Supreme Court upholds bankruptcy law provisions applied to attorneys

[JURIST] The US Supreme Court [official website; JURIST news archive] on Monday ruled [opinion, PDF] in Milavetz, Gallop & Milavetz v. United States [Cornell LII backgrounder; JURIST report] that attorneys are considered debt relief agencies under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) [text] when they provide qualifying services. The court also held that the BAPCPA, which requires certain disclosures in advertisements, does not violate attorneys' First Amendment [text] rights. The US Court of Appeals for the Eighth Circuit ruled [opinion, PDF] that, while bankruptcy attorneys meet the definition of a debt relief agency, the BAPCPA provisions codified in 11 USC § 526(a)(4) [text] are unconstitutional as applied to attorneys. In partially reversing the opinion below, Justice Sonia Sotomayor wrote:

Because § 528's requirements that Milavetz identify itself as a debt relief agency and include certain information about its bankruptcy-assistance and related services are "reasonably related to the [Government's] interest in preventing deception of consumers," we uphold those provisions as applied to Milavetz.
Justices Antonin Scalia and Clarence Thomas filed separate opinions concurring in part and concurring in the judgment.

The case arose when Minnesota law firm Milavetz, Gallop & Milavetz, PA [firm website] filed suit against the US government seeking a declaratory judgment that attorneys were not debt relief agencies under the BAPCPA and that certain provisions of the BAPCPA were unconstitutional as applied to attorneys. The district court ruled in favor of Milavetz, and the appeals court affirmed in part and reversed in part, causing both parties to appeal to the Supreme Court.

 

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