Section 528 Advertising Disclosure Requirements Fail Constitutional Test
After the Minnesota Court in Milavetz ruled that strict scrutiny must apply to the restrictions on attorney advice contained in BAPCPA's section 526(a)(4), the court turned its attention to the advertising disclosure requirements.
Noting that the statute regulates not merely deceptive advertising but truthful advertising as well, the court determined that the regulations could stand only if
1) the regulation directly advances a
2) substantial government interest, and is
3) narrowly drawn.
The court found that section 528's advertising requirements failed to advance the government's purported substantial interest and were not narrowly drawn. While the government advanced the theory that, without these disclosures, advertising might be confusing, the court determined that the public was more likely to be confused by the use of the "Congressionally-invented" term than by its absence. In fact, the court suggested, the very merging of attorneys and non-attorneys, with their differing roles in the bankruptcy process, under the designation "Debt Relief Agency" was itself likely to confuse the public.
Having fully discussed and ruled on the Constitutionality of the advice restrictions and advertising requirements as applied to attorneys, the court turned to the issue of the designation of attorneys as debt relief agencies, and determined that attorneys did not fall within the statutory definition of "Debt Relief Agency". We'll discuss that piece of the ruling in a future post. Meanwhile, a number of bloggers are discussing the growing list of rulings on the Constitutionality of BAPCPA, including the Cleveland Law Library Weblog and this extensive review at the Georgia Bankruptcy Law Blog.
