Source: https://supreme.justia.com/cases/federal/us/559/229/
Timestamp: 2019-12-10 10:23:20
Document Index: 457192474

Matched Legal Cases: ['§101', '§526', '§528', '§528', '§526', '§528', '§526', '§101', '§101', '§101', '§526', '§96', '§96', '§526', '§526', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528', '§528']

Milavetz, Gallop & Milavetz, P. A. v. United States :: 559 U.S. 229 (2010) :: Justia US Supreme Court Center
Justia › US Law › US Case Law › US Supreme Court › Volume 559 › Milavetz, Gallop & Milavetz, P. A. v. United States
Milavetz, Gallop & Milavetz, P. A. v. United States, 559 U.S. 229 (2010)
Concurrence (Scalia)
MILAVETZ, GALLOP & MILAVETZ, P. A. V. UNITEDSTATES
MILAVETZ, GALLOP & MILAVETZ, P. A., et al. v. UNITED STATES
No. 08–1119. Argued December 1, 2009—Decided March 8, 2010
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) amended the Bankruptcy Code to define a class of bankruptcy professionals termed “debt relief agenc[ies].” 11 U. S. C. §101(12A). That class includes, with limited exceptions, “any person who provides any bankruptcy assistance to an assisted person … for … payment … , or who is a bankruptcy petition preparer.” Ibid. The BAPCPA prohibits such professionals from “advis[ing] an assisted person … to incur more debt in contemplation of [filing for bankruptcy] … .” §526(a)(4). It also requires them to disclose in their advertisements for certain services that the services are with respect to or may involve bankruptcy relief, §§528(a)(3), (b)(2)(A), and to identify themselves as debt relief agencies, §§528(a)(4), (b)(2)(B).
The plaintiffs in this litigation—a law firm and others (collectively Milavetz)—filed a preenforcement suit seeking declaratory relief, arguing that Milavetz is not bound by the BAPCPA’s debt-relief-agency provisions and therefore can freely advise clients to incur additional debt and need not make the requisite disclosures in its advertisements. The District Court found that “debt relief agency” does not include attorneys and that §§526 and 528 are unconstitutional as applied to that class of professionals. The Eighth Circuit affirmed in part and reversed in part, rejecting the District Court’s conclusion that attorneys are not “debt relief agenc[ies]”; upholding application of §528’s disclosure requirements to attorneys; and finding §526(a)(4) unconstitutional because it broadly prohibits debt relief agencies from advising assisted persons to incur any additional debt in contemplation of bankruptcy even when the advice constitutes prudent prebankruptcy planning.
1. Attorneys who provide bankruptcy assistance to assisted persons are debt relief agencies under the BAPCPA. By definition, “bankruptcy assistance” includes several services commonly performed by attorneys, e.g., providing “advice, counsel, [or] document preparation,” §101(4A). Moreover, in enumerating specific exceptions to the debt-relief-agency definition, Congress indicated no intent to exclude attorneys. See §§101(12A)(A)–(E). Milavetz relies on the fact that §101(12A) does not expressly include attorneys in advocating a narrower understanding. On that reading, only a bankruptcy petition preparer would qualify—an implausibility given that a “debt relief agency” is “any person who provides any bankruptcy assistance … or who is a bankruptcy petition preparer,” ibid. Milavetz’s other arguments for excluding attorneys are also unpersuasive. Pp. 5–9.
2. Section 526(a)(4) prohibits a debt relief agency only from advising a debtor to incur more debt because the debtor is filing for bankruptcy, rather than for a valid purpose. The statute’s language, together with its purpose, makes a narrow reading of §526(a)(4) the natural one. Conrad, Rubin & Lesser v. Pender, 289 U. S. 472, supports this conclusion. The Court in that case read now-repealed §96(d), which authorized reexamination of a debtor’s attorney’s fees payment “in contemplation of the filing of a petition,” to require that the portended bankruptcy have “induce[d]” the transfer at issue, id., at 477, understanding inducement to engender suspicion of abuse. The Court identified the “controlling question” as “whether the thought of bankruptcy was the impelling cause of the transaction,” ibid. Given the substantial similarities between §§96(d) and 526(a)(4), the controlling question under the latter is likewise whether the impelling reason for “advis[ing] an assisted person … to incur more debt” was the prospect of filing for bankruptcy. In practice, advice impelled by the prospect of filing will generally consist of advice to “load up” on debt with the expectation of obtaining its discharge. The statutory context supports the conclusion that §526(a)(4)’s prohibition primarily targets this type of conduct. The Court rejects Milavetz’s arguments for a more expansive view of §526(a)(4) and its claim that the provision, narrowly construed, is impermissibly vague. Pp. 9–18.
3. Section 528’s disclosure requirements are valid as applied to Milavetz. Consistent with Milavetz’s characterization, the Court presumes that this is an as-applied challenge. Because §528 is directed at misleading commercial speech and imposes only a disclosure requirement rather than an affirmative limitation on speech, the less exacting scrutiny set out in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U. S. 626, governs. There, the Court found that, while unjustified or unduly burdensome disclosure requirements offend the First Amendment, “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers.” Id., at 651. Section 528’s requirements share the essential features of the rule challenged in Zauderer. The disclosures are intended to combat the problem of inherently misleading commercial advertisements, and they entail only an accurate statement of the advertiser’s legal status and the character of the assistance provided. Moreover, they do not prevent debt relief agencies from conveying any additional information through their advertisements. In re R. M. J., 455 U. S. 191, distinguished. Because §528’s requirements are “reasonably related” to the Government’s interest in preventing consumer deception, the Court upholds those provisions as applied to Milavetz. Pp. 18–23.
541 F. 3d 785, affirmed in part, reversed in part, and remanded.
Sotomayor, J., delivered the opinion of the Court, in which Roberts, C. J., and Stevens, Kennedy, Ginsburg, Breyer, and Alito, JJ., joined, in which Scalia, J., joined except for n. 3, and in which Thomas, J., joined except for Part III–C. Scalia, J., and Thomas, J., filed opinions concurring in part and concurring in the judgment.
Together with No. 08–1225, United States v. Milavetz, Gallop & Milavetz, P. A., et al., also on certiorari to the same court.
I join the opinion of the Court, except for footnote 3, which notes that the legislative history supports what the statute unambiguously says. The Court first notes that statements in the Report of the House Committee on the Judiciary “indicate concern with abusive practices undertaken by attorneys.” Ante, at 6, n. 3. Perhaps, but only the concern of the author of the Report. Such statements tell us nothing about what the statute means, since (1) we do not know that the members of the Committee read the Report, (2) it is almost certain that they did not vote on the Report (that is not the practice), and (3) even if they did read and vote on it, they were not, after all, those who made this law. The statute before us is a law because its text was approved by a majority vote of the House and the Senate, and was signed by the President. Even indulging the extravagant assumption that Members of the House other than members of its Committee on the Judiciary read the Report (and the further extravagant assumption that they agreed with it), the Members of the Senate could not possibly have read it, since it did not exist when the Senate passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. And the President surely had more important things to do.
The footnote’s other source of legislative history is truly mystifying. For the proposition that “the legislative record elsewhere documents misconduct by attorneys” which was presumably the concern of Congress, the Court cites a reproduction of a tasteless advertisement that was (1) an attachment to the written statement of a witness, (2) in a hearing held seven years prior to this statute’s passage, (3) before a subcommittee of the House considering a different consumer bankruptcy reform bill that never passed. “Elsewhere” indeed.
The Court acknowledges that nothing can be gained by this superfluous citation (it admits the footnote is “unnecessary in light of the statute’s unambiguous language,” ante, at 6, n. 3). But much can be lost. Our cases have said that legislative history is irrelevant when the statutory text is clear. See, e.g., United States v. Gonzales, 520 U. S. 1, 6 (1997); Connecticut Nat. Bank v. Germain, 503 U. S. 249, 254 (1992). The footnote advises conscientious attorneys that this is not true, and that they must spend time and their clients’ treasure combing the annals of legislative history in all cases: To buttress their case where the statutory text is unambiguously in their favor; and to attack an unambiguous text that is against them. If legislative history is relevant to confirm that a clear text means what it says, it is presumably relevant to show that an apparently clear text does not mean what it seems to say. Even for those who believe in the legal fiction that committee reports reflect congressional intent, footnote 3 is a bridge too far.
The Court protests that the earlier hearing was “part of the record cited by the 2005 House Report,” ante, at 6, n. 3. The page it cites, however, does nothing more than note that the earlier hearing took place, see H. R. Rep. No. 109–31, pt. 1, p. 7 (2005). Are we to believe that this brought to the attention of the committee (much less of the whole Congress) an attachment to the testimony of one of the witnesses at that long-ago hearing? Of course not. That legislative history shows what “Congress” intended is a fiction requiring no support in reality.
I concur in the judgment and join all but Part III–C of the Court’s opinion. I agree with the Court that 11 U. S. C. §528’s advertising disclosure requirements survive First Amendment scrutiny on the record before us. I write separately because different reasons lead me to that conclusion.
I have never been persuaded that there is any basis in the First Amendment for the relaxed scrutiny this Court applies to laws that suppress nonmisleading commercial speech. See 44 Liquormart, Inc. v. Rhode Island, 517 U. S. 484, 522–523 (1996) (opinion concurring in part and concurring in judgment) (discussing Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N. Y., 447 U. S. 557 (1980)). In this case, the Court applies a still lower standard of scrutiny to review a law that compels the disclosure of commercial speech—i.e., the rule articulated in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U. S. 626 (1985), that laws that require the disclosure of factual information in commercial advertising may be upheld so long as they are “reasonably related” to the government’s interest in preventing consumer deception, id., at 651.
I am skeptical of the premise on which Zauderer rests—that, in the commercial-speech context, “the First Amendment interests implicated by disclosure requirements are substantially weaker than those at stake when speech is actually suppressed,” id., at 652, n. 14; see id., at 650 (citing “material differences between disclosure requirements and outright prohibitions on speech”). We have refused in other contexts to attach any “constitutional significance” to the difference between regulations that compel protected speech and regulations that restrict it. See, e.g., Riley v. National Federation of Blind of N. C., Inc., 487 U. S. 781, 796–797 (1988). I see no reason why that difference should acquire constitutional significance merely because the regulations at issue involve commercial speech. See Glickman v. Wileman Brothers & Elliott, Inc., 521 U. S. 457, 480–481 (1997) (Souter, J., dissenting) (arguing that “commercial speech is … subject to [this] First Amendment principle: that compelling cognizable speech officially is just as suspect as suppressing it, and is typically subject to the same level of scrutiny”); id., at 504 (Thomas, J., dissenting); cf. United States v. United Foods, Inc., 533 U. S. 405, 419 (2001) (Thomas, J., concurring) (stating that regulations that compel funding for commercial advertising “must be subjected to the most stringent First Amendment scrutiny”).
Accordingly, I would be willing to reexamine Zauderer and its progeny in an appropriate case to determine whether these precedents provide sufficient First Amendment protection against government-mandated disclosures.[Footnote 1] Because no party asks us to do so here, however, I agree with the Court that the Zauderer standard governs our review of the challenge to §528 brought by the Milavetz law firm and the other plaintiffs in this action (hereinafter Milavetz).
Yet even under Zauderer, we “have not presumptively endorsed” laws requiring the use of “government-scripted disclaimers” in commercial advertising. See Borgner v. Florida Bd. of Dentistry, 537 U. S. 1080, 1082 (2002) (Thomas, J., dissenting from denial of certiorari). Zauderer upheld the imposition of sanctions against an attorney under a rule of professional conduct that required advertisements for contingency-fee services to disclose that losing clients might be responsible for litigation fees and costs. See 471 U. S., at 650–653. Importantly, however, Zauderer’s advertisement was found to be misleading on its face, and the regulation in that case did not mandate the specific form or text of the disclosure. Ibid. Thus, Zauderer does not stand for the proposition that the government can constitutionally compel the use of a scripted disclaimer in any circumstance in which its interest in preventing consumer deception might plausibly be at stake. In other words, a bare assertion by the government that a disclosure requirement is “intended” to prevent consumer deception, standing alone, is not sufficient to uphold the requirement as applied to all speech that falls within its sweep. See ante, at 20.
Instead, our precedents make clear that regulations aimed at false or misleading advertisements are permissible only where “the particular advertising is inherently likely to deceive or where the record indicates that a particular form or method of advertising has in fact been deceptive.” In re R. M. J., 455 U. S. 191, 202 (1982) (emphasis added); see Zauderer, supra, at 651 (“recogniz[ing] that unjustified or unduly burdensome disclosure requirements might offend the First Amendment”). Therefore, a disclosure requirement passes constitutional muster only to the extent that it is aimed at advertisements that, by their nature, possess these traits. See R. M. J., supra, at 202; Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy, 512 U. S. 136, 143, 146–147 (1994).
I do not read the Court’s opinion to hold otherwise. See ante, at 20. Accordingly, and with that understanding, I turn to the question whether Milavetz’s challenge to §528’s disclosure requirements survives Zauderer scrutiny on the record before us.
As the Court notes, the posture of Milavetz’s challenge inhibits our review of its First Amendment claim. See ante, at 19, n. 7. Milavetz challenged §528’s constitutionality before the statute had ever been enforced against any of the firm’s advertisements. Although Milavetz purports to challenge §528 only “ ‘as-applied’ ” to its own advertising, see ante, at 19, it did not introduce any evidence or exhibits to substantiate its claim. Thus, no court has seen a sampling of Milavetz’s advertisements or even a declaration describing their contents and the media through which Milavetz seeks to transmit them. As a consequence, Milavetz’s nominal “as applied” challenge appears strikingly similar to a facial challenge.
We generally disapprove of such challenges because they “often rest on speculation” and require courts to engage in “ ‘premature interpretation of statutes on the basis of factually barebones records.’ ” Washington State Grange v. Washington State Republican Party, 552 U. S. 442, 450 (2008) (quoting Sabri v. United States, 541 U. S. 600, 609 (2004)). Milavetz’s claim invites the same problems. Milavetz alleges that §528’s disclosure requirements are unconstitutional as applied to its advertisements because its advertisements are not misleading and because the disclaimer required by §528 will create, rather than reduce, confusion for Milavetz’s potential clients. That may well be true. But because no record evidence of Milavetz’s advertisements exists to guide our review, we can only speculate about the ways in which the statute might be applied to Milavetz’s speech.
When forced to determine the constitutionality of a statute based solely on such conjecture, we will uphold the law if there is any “conceivabl[e]” manner in which it can be enforced consistent with the First Amendment. Washington State Grange, supra, at 456. In this case, both parties agree that §528’s disclosure requirements cover, at a minimum, deceptive advertisements that promise to “ ‘wipe out’ ” debts without mentioning bankruptcy as the means of accomplishing this goal.[Footnote 2] Brief for Milavetz 82, 86; Brief for United States 60–62. As a result, there is at least one set of facts on which the statute could be constitutionally applied. Thus, I agree with the Court that Milavetz’s challenge to §528 must fail.
I have no quarrel with the principle that advertisements that are false or misleading, or that propose an illegal transaction, may be proscribed. See 44 Liquormart, Inc. v. Rhode Island, 517 U. S. 484, 520 (1996) (opinion concurring in part and concurring in judgment). Furthermore, I acknowledge this Court’s longstanding assumption that a consumer-fraud regulation that compels the disclosure of certain factual information in advertisements may intrude less significantly on First Amendment interests than an outright prohibition on all advertisements that have the potential to mislead. See, e.g., Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U. S. 748, 771–772 (1976); Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U. S. 626, 651–652, n. 14 (1985); Riley v. National Federation of Blind of N. C., Inc., 487 U. S. 781, 796, n. 9 (1988); Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N. Y., 447 U. S. 557, 565 (1980). But even if that assumption is correct, I doubt that it justifies an entirely different standard of review for regulations that compel, rather than suppress, commercial speech.
At oral argument, Milavetz’s counsel declined to describe Milavetz’s challenge to §528 as a facial overbreadth claim, Tr. of Oral Arg. 25–26, and Milavetz’s briefs make no such contention. But even viewing Milavetz’s argument as a claim that §528 is facially overbroad because it applies to nonmisleading advertisements for bankruptcy-related services, such an argument must fail. First, as noted, Milavetz acknowledges that §528 can be constitutionally applied to deceptive bankruptcy-related advertisements and, thus, at least one “set of circumstances exists under which [§528] would be valid.” United States v. Salerno, 481 U. S. 739, 745 (1987). Second, Milavetz does not attempt to argue that §528’s unconstitutional applications are “substantial” in number when judged in relation to this “plainly legitimate sweep.” Washington State Grange v. Washington State Republican Party, 552 U. S. 442, 449–450, and n. 6 (2008) (internal quotation marks omitted).
Oral Argument - December 01, 2009
Opinion Announcement - March 08, 2010
Milavetz, Gallop & Milavetz, P.A., et al.
559 U.S. 229
08-1119