Opinion ID: 174856
Heading Depth: 1
Heading Rank: 3

Heading: The Statutory Provisions at Issue

Text: With these principles in mind, we consider plaintiffs' argument that the challenged provisions of §§ 527 and 528 regulate noncommercial rather than commercial speech. (a) Section 528(a)(3)-(4) and (b)(2) We start with § 528(a)(3)-(4) and (b)(2) because plaintiffs' argument that those advertising requirements do not regulate commercial speech is now foreclosed by Milavetz. The Supreme Court examined these exact statutory provisions and determined that they regulate only commercial speech. Milavetz, Gallop & Milavetz, P.A. v. United States, 130 S.Ct. at 1339. We necessarily reach the same conclusion. (b) Section 528(a)(1)-(2) As for § 528(a)(1)-(2), these provisions require a debt relief agency to prepare and execute a written document disclosing the services to be provided to the debtor, the fee the debtor will pay for those services, and the terms of payment. Such speech is reasonably viewed as the debt relief agency's propos[al of] a commercial transaction to the consumer debtor. Bolger v. Youngs Drug Prods. Corp, 463 U.S. at 66, 103 S.Ct. 2875 (internal quotation marks omitted). The debt relief agency details the services it will provide in return for specified remuneration. When the debtor manifests acceptance by signing the document, the proposed transaction becomes an enforceable contract. See, e.g., Omega Eng'g, Inc. v. Omega, S.A., 432 F.3d 437, 444 (2d Cir.2005) (noting basic principle of Connecticut law that contract is binding when parties mutually assent). Accordingly, we conclude that the contract requirements of § 528(a)(1)-(2) qualify as commercial speech. See generally Zauderer v. Office of Disciplinary Counsel, 471 U.S. at 651, 105 S.Ct. 2265 (treating required attorney notification to clients of potential costs of litigation as commercial speech). (c) Section 527(a) and (b) The disclosures required by § 527(a) and (b) provide consumer debtors with basic information about bankruptcy. Such speech is by its nature commercial. First, it provides a consumer debtor with information about what to expect in a commercial transaction with a debt relief agency providing bankruptcy assistance. Second, the speech is situated in the federal bankruptcy system, a creature of law pervaded by commerce. That system allows debtors to refashion commercial transactions in order to discharge debt obligations. In this sense, the speech at issue may be understood as facilitating the debtor's proposal of any number of new commercial transactions to his creditors. The government's power to regulate these commercial transactions justifies its concomitant power to regulate commercial speech linked to the transactions. See generally 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 499, 116 S.Ct. 1495, 134 L.Ed.2d 711 (1996) (collecting cases). Third, the regulated speech is grounded in a commercial assumption that is itself the basis for debt relief agencies' procurement of remunerative employment, Ohralik v. Ohio State Bar Ass'n, 436 U.S. at 459, 98 S.Ct. 1912, i.e., that the information provided by debt relief agencies can assist debtors to navigate the bankruptcy system to their economic advantage. The requirements imposed by § 527 reinforce the assumption by detailing the minimum disclosures that a debt relief agency must make to permit debtors to make informed bankruptcy choices. Thus, we conclude both from the mandated disclosures and the context in which they are made that § 527(a) and (b) regulate commercial speech. See generally Riley v. Nat'l Fed'n of the Blind, 487 U.S. at 796, 108 S.Ct. 2667 (signaling that overall nature and effect of speech determine whether it is commercial or noncommercial). The plainly commercial nature and effect of the mandated disclosures are not diluted by the fact that bankruptcy and the process attending it are frequent subjects of public debate. Bolger v. Youngs Drug Prods. Corp., 463 U.S. at 68, 103 S.Ct. 2875 (internal quotation marks omitted). Nothing in § 527(a) or (b) limits or impedes a debt relief agency's ability to communicate its own views on public issues associated with the bankruptcy system. Much less do those provisions require the expression of such views to be intertwined with the mandated disclosures. Cf. Riley v. Nat'l Fed'n of the Blind, 487 U.S. at 796, 108 S.Ct. 2667. Indeed, the written disclosure required by § 527(b) can simply be handed to the debtor, after which the debt relief agency may pursue whatever avenue of discussion professional judgment warrants. Further, our conclusion that § 527 regulates only commercial speech comports with this court's prior treatment of similar disclosure requirements. See, e.g., New York State Restaurant Ass'n v. N.Y. City Bd. of Health, 556 F.3d 114, 131-32 (2d Cir.2009) (treating required restaurant posting of nutritional information as commercial speech); National Elec. Mfrs. Ass'n v. Sorrell, 272 F.3d 104, 113 (2d Cir.2001) (treating required labeling as to mercury content of light bulbs as commercial speech).