Archive for the 'Advertising' Category

Bankruptcy Lawyers Have Rights, Too

September 8, 2008

You know those bankruptcy lawyers who advertise on TV or anywhere else?  In Minnesota, they are now required to state in their ads that they “help people file for bankruptcy relief,” or something to that effect.  But those same lawyers are now free to advise soon-to-be-bankrupt clients that maybe they should take on more debt.  So saith the Eighth Circuit Court of Appeals in a First Amendment case from Minnesota that was released Thursday.

I first blogged about the case a year and nine months ago.  (Yes, that’s how long appeals take.)  It was brought by the lawyers at Milavetz, Gallop & Milavetz, familiar names to anyone who watches Twin Cities TV. Back in December of 2006, Judge James Rosenbaum ruled that the federal statute at issue violated the First Amendment because the “sweeping regulation goes beyond whatever problem it was designed to address.”  As I said at the time:

It’s pretty unusual for federal judges to strike down laws in such sweeping fashion with the First Amendment. The government doesn’t take losses like this lying down, so we’ll see what happens on appeal. A bankruptcy blogger at www.creditslips.org opined: “My guess is that the Department of Justice will appeal, and my guess is that they will lose at the appellate level.”

Well, I was right and the bankruptcy blogger was partially right.  According to the Eighth Circuit’s 2-1 decision, it is a First Amendment violation to prohibit a lawyer from advising a soon-to-be-bankrupt client about the value of taking on more debt.  Maybe refinincing a home or buying a car to get to work is in everyone’s best interest, saith the court.  Good point.

But on the advertising restriction issue, the government won.  According to the Eighth Circuit, requiring attorneys “to disclose factually correct statements on their advertising” does not violate the First Amendment.  I am not sure I agree.  Anytime the government compels anyone to say anything, that is a problem.  But apparently not to the Eighth Circuit.

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