Court Opinion

ID: 7394767
Source: CourtListenerOpinion
Date Created: 2022-07-29 01:09:39.233361+00
Date Added: 2024-06-11T16:21:46.625745
License: Public Domain

WYNN, Judge dissenting.
In this case, the North Carolina State Board of Certified Public Accountant Examiners ("CPA Board") prohibits McGladrey & Pullen, LLP ("McGladrey & Pullen") from changing its name to "RSM McGladrey & Pullen, LLP, Certified Public Accountants." In denying this name change, the CPA Board cited N.C. Admin. Code tit. 21, r. 8N.0307(a) (Mar.2003) which provides,
A CPA or CPA firm shall not trade upon the CPA title through use of any name *346that would have the capacity or tendency to deceive.
McGladrey & Pullen argues that the CPA Board has failed to meet its burden to show that the proposed name will mislead or deceive the public and, therefore, violates its right to free speech. I agree that the CPA Board has failed to show how the name will be misleading or deceiving. Accordingly, I respectfully dissent.
The United States Supreme Court has long held that "commercial speech" is protected by the First Amendment of the United States Constitution. Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 770, 96 S.Ct. 1817, 48 L.Ed.2d 346, 363 (1976). The government may ban forms of communication more likely to deceive the public than to inform it, or commercial speech related to illegal activity. Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., 447 U.S. 557, 563-64, 100 S.Ct. 2343, 65 L.Ed.2d 341, 349 (1980) (internal citations omitted).
In Cent. Hudson Gas & Elec. Corp., the United States Supreme Court set out three prongs the State must meet to validly restrict commercial speech: (1) "The State must assert a substantial interest to be achieved by restrictions on commercial speech[;]" (2) "the restriction must directly advance the state interest involved[;]" and (3) "if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive." Id., at 560, 100 S.Ct. at 2350, 65 L.Ed.2d at 350.
McGladrey & Pullen acknowledges that the CPA Board has a "substantial interest in protecting the public from misleading and deceptive names and advertising by CPAs[,]" meeting the first prong of the Cent. Hudson Gas & Elec. Corp. test. But McGladrey & Pullen argues that the CPA Board failed to meet the second prong, because the proposed name is not deceptive or misleading and the CPA Board's asserted harms are merely speculative. I agree.
The second prong of the Cent. Hudson Gas & Elec. Corp. test "is not satisfied by mere speculation or conjecture[.]" Edenfield v. Fane, 507 U.S. 761, 770, 113 S.Ct. 1792, 123 L.Ed.2d 543, 555 (1993). In the CPA Board's declaratory ruling denying the name change, it stated "the use of `RSM' in the name of the firm would have the capacity or tendency to deceive the public by giving the impression that any firm using a name that begins with `RSM,' regardless of the nature of the firm, is a lawful CPA firm." But this is not a concrete reason for the restriction; instead, it is merely conjecture. Indeed, the record shows that a CPA board member stated, "I think it's important to note that whether it's deceitful or not, we didn't - we don't believe that. It's just that it gets caught in the language of our rules more than anything else." This cannot satisfy the second prong of the Cent. Hudson Gas & Elec. Corp. test, as there was merely a speculative reason that the CPA Board denied the proposed name change. See, e.g., Michel v. Bare, 230 F.Supp.2d 1147, 1154 (D.Nev.2002) (State failed to show that a rule prohibiting an attorney from using the trade names "Your Legal Power" and "Su Poder Legal," directly advanced the State's interest).
Moreover, the CPA Board's emphasis on the addition of three letters, "RSM", ignored the addition of the words "Certified Public Accountants" to the end of the proposed name change. Indeed, the proposed name of "RSM McGladrey & Pullen, LLP, Certified Public Accountants" when compared to "RSM McGladrey, Inc." would be less misleading than the current name of "McGladrey & Pullen, LLP." As McGladrey & Pullen points out, the word "McGladrey" has been used in both names for five years without prohibition, and there is no evidence that the public has been deceived by those names.
In sum, I would hold that the CPA Board's denial of McGladrey & Pullen's proposed name change impermissibly restricted McGladrey & Pullen's right to free speech under the First Amendment of the United States Constitution. Cent. Hudson Gas & Elec. Corp., 447 U.S. at 563-64, 100 S.Ct. at 2350-51, 65 L.Ed.2d at 349-50. Accordingly, I respectfully dissent from the majority opinion and would reverse the trial court's order.