Opinion ID: 174856
Heading Depth: 2
Heading Rank: 4

Heading: The Milavetz Decision

Text: After briefing and oral argument in this appeal, the Supreme Court decided Milavetz, Gallop & Milavetz, P.A. v. United States, ___ U.S. ___, 130 S.Ct. 1324, 176 L.Ed.2d 79, which resolved a number of the questions here at issue. Specifically, the Supreme Court held that the term debt relief agency does apply to attorneys, see id. at 1331-32, but only those assisting consumer debtors contemplating bankruptcy, see id. at 1341. The Supreme Court also construed § 526(a)(4)'s prohibition on advising clients to take on debt in contemplation of bankruptcy to apply only to advising a debtor to incur more debt because the debtor is filing for bankruptcy, rather than for a valid purpose. Id. at 1336. The Court explained that such advice will generally consist of advice to `load up' on debt with the expectation of obtaining its discharge  i.e., conduct that is abusive per se. Id. The Court concluded that when the section was so construed, it raised no First Amendment overbreadth or vagueness concerns. See id. at 1337-38. Further, the Supreme Court rejected a First Amendment challenge to the advertising requirements of § 528(a)(3)-(4) and (b)(2). Concluding that the requirements pertained to speech that was commercial in nature and compelled only disclosures, the Court determined that the appropriate standard of review was the rational basis test set forth in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985). The Court held that the advertising requirements passed this test because they govern only professionals who offer bankruptcy-related services to consumer debtors, and, as such, reasonably relate to the government's interest in preventing deception of consumer debtors contemplating bankruptcy. See Milavetz, Gallop & Milavetz, P.A. v. United States, 130 S.Ct. at 1341.