Monday, March 8, 2010

Supreme Court Upholds Ban On Certain Lawyer Advice In Bankruptcy

The Supreme Court released its opinion today in Milavetz, Gallop & Milavetz, P. A. v. United States.  Justice Sotomayor wrote the opinion for the Court and stated:
Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA or Act) to correct perceived abuses of the bankruptcy system. Among the reform measures the Act implemented are anumber of provisions that regulate the conduct of “debt relief agenc[ies]”—i.e., professionals who provide bankruptcy assistance to consumer debtors. See 11 U. S. C. §§101(3), (12A). These consolidated cases present the threshold question whether attorneys are debt relief agencies when they provide qualifying services. Because we agree with the Court of Appeals that they are, we must also consider whether the Act’s provisions governing debt relief agencies’ advice to clients, §526(a)(4), and requiring them to make certain disclosures in their advertisements, §§528(a) and (b)(2), violate the First Amendment rights of attorneys. Concluding that the Court of Appeals construed §526(a)(4) too expansively, we reverse its judgment that the provision is unconstitutionally overbroad. Like the Court of Appeals, we uphold §528’s disclosure requirements as applied in these consolidated cases.
Articles can be found at the following links: Reuters; Wall Street Journal Law Blog; and the New York Times.


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