Category Archives: Regulation

Compelled Speech & Viewpoint Discrimination

So “compelled speech.” The government telling you what you’ve got to say. It’s surprisingly common, and also often uncontroversial. Think nutrition labeling and warning signs.

Other times, not so much.

So what’s the test? Under what circumstances can the government tell us what we’ve got to say?

I’ll tell you what the test SHOULD be: it should be the same “intermediate scrutiny” test that applies to commercial speech restrictions. Meaning that if the state wants to make a business say something, that requirement must be both necessary and narrowly-tailored. Oh, and there’s gotta be some evidence of necessity.

But this area of commercial speech law is a mess.

It all starts with Zauderer v. Office of Disciplinary Counsel, a 1985 Supreme Court case dealing with attorney advertising. One of the key issues in the case – and the one it is best known for – was the legality of a disclaimer requirement for “no recovery, no legal fees” advertising.

The Zauderer court found that the disclaimer rule must only be “reasonably related” to the state’s interest in preventing consumer deception. That’s a much lower bar to clear than the intermediate scrutiny standard. Pretty much any argument the state can make without breaking into uncontrollable laughter will do.

Unfortunately, some nuance has gotten lost since Zauderer was decided. What it seems the court meant – though it was only specifically called out by Justice Brennan in his concurrence – is that the “reasonably related” test is only appropriate when the compelled speech is necessary to avoid consumer deception. Sadly, what this has been taken to mean by many lower courts is that ANY compelled speech need only be justified under the “reasonably related” test.

So this brings me to the Supreme Court’s decision Monday in Matel v. Tam, a case involving the trademark application for the band “The Slants.” It was an important decision, and a unanimous one, 1 finding that the government’s denying of “disparaging” trademarks was constitutionally impermissible content regulation. But in a four judge concurrence, Justice Kennedy went even further, delving into the importance of holding the government to a high standard when it dictates a viewpoint, even in the commercial speech context:

“Commercial speech is no exception,” the Court has
explained, to the principle that the First Amendment
“requires heightened scrutiny whenever the government
creates a regulation of speech because of disagreement
with the message it conveys.” Sorrell v. IMS Health Inc.,
564 U. S. 552, 566 (2011) (internal quotation marks omitted).
Unlike content based discrimination, discrimination
based on viewpoint, including a regulation that targets
speech for its offensiveness, remains of serious concern in
the commercial context. See Bolger v. Youngs Drug Products
Corp., 463 U. S. 60, 65, 71–72 (1983).

If the government picking and choosing which trademarks are appropriate is “viewpoint discrimination,” why is the same not true for compelled speech? Or, at least, speech that is compelled outside of those situations where disclosure is necessary to cure otherwise-deceptive marketing messages?

This isn’t an idle question. There are dozens of instances of speech compulsion contained within state lawyer advertising rules, and many – if not most- of them aren’t designed to cure otherwise-deceptive messages. In fact, many require that attorneys publish the state’s view on the efficacy or usefulness of lawyer advertising. 2

Speech that’s compelled outside of health, safety, or a need to cure deceptive marketing is an even starker example of viewpoint discrimination than the picking and choosing of acceptable trademarks. I’d love to see the Supreme Court close this “Zauderer exception” to the commercial speech doctrine sooner rather than later.

Notes:

  1. 8-0; Justice Gorsuch wasn’t on the bench when the case was heard.
  2. For example, New Jersey requires that any comparative advertising by lawyers state that “No aspect of this advertisement has been approved by the Supreme Court of New Jersey.”

9th Circuit Reverses on Expanded Protection for Commercial Speech

Early last year, the 9th Circuit made an intriguing ruling: that commercial speech regulation required an even higher showing of necessity than that long-recognized by the “intermediate scrutiny” standard.  Unfortunately, in an en banc opinion this week, the court reversed its decision in RDN v. Appelsmith. 

That’s a shame, because there’s been a lot of noise that the commercial speech doctrine could use some freshening up and additional protection from overreaching regulation. And while the appellants here have vowed to take this case to the Supreme Court, the odds of getting that kind of review are always very long.

Unless SCOTUS wants to use this case to deal with the increasingly-large pit of vagueness in the commercial speech doctrine that is compelled speech. Is compelled speech subject only to rational basis review? Something more? Or are all speech requirements – compulsions and restrictions alike – subject to the same test of constitutional validity? A test perhaps more demanding than that laid out by Central Hudson?

Here’s hoping the Supreme Court decides to give us an answer.

Florida Supreme Court Rejects LRS Rule Changes

Last month, I did something I hadn’t done in 21 years. I put on a suit, grabbed my notes, and argued a case in court.

And not any old court: this hearing was in front of the Florida Supreme Court. The Court was hearing a petition by the Florida Bar to change its lawyer referral service rules.

In our view, the Bar’s changes were  bad for on many levels. They didn’t address the problem at hand (alleged cross-referral of legal clients for unneeded medical services). They created a cumbersome new set of compliance obligations. They watered down protections currently applicable to Florida lawyer referral services. And, by bringing virtually all forms of legal marketing within the ambit of the rule, they threatened to chill the availability of legal information and the willingness of Florida lawyers to offer innovative new services to the public.

So Avvo filed comments opposing the Bar’s rule change. We weren’t the only ones; it seemed that no one liked what the Bar was proposing. When it came down to it, Avvo was one of four parties arguing against the rules, and I was allotted all of 6 minutes with which to do so.

Appellate arguments call for a tricky balance. You’ve got to be ready to make your argument, for the allotted time, without facing a single question. But you’ve also got to be ready to abandon your prepared work and face down questions from the bench for as long as the Justices desire.

I’ve always preferred the latter, and as it turned out, the Court had lots of questions for me. The video is available here; my bit starts at 23:00. As you’ll see, the Court was far more interested in hearing about Avvo and online legal marketing than it was about my nuanced First Amendment arguments.

It was gratifying – and fun – to argue in court again after so many years. And the Florida Supreme Court’s Greek Revival courtroom in Tallahassee was an inspiring venue in which to do so.

The capper came last week when the Court rejected the Bar’s proposed rules. While I’d like to claim that result on the force of my advocacy, it was the only reasonable outcome possible. The Bar had been asked to address a specific issue, and had used that opportunity to attempt wholesales changes to the rules.

It’s a favorable outcome, and I’m happy to see it. But at the same time, the process demonstrated how far from effective Bar regulation can be. In any other agency, regulatory changes would go though an administrative law process – with workshops, open hearings, and comments – to vet issues before adopting new rules. Florida, like many states, devolves that process to the Bar. The final arbiter is then the Supreme Court, which deals with the matter in much the same way it would treat any other adversary proceeding.

It’s not that such a system is doomed to failure. It could work, given enough structure, direction, and discipline by those involved. But the odds are long. Market participants drive the process, and these lawyers often have parochial interests. They also rarely have experience with administrative rulemaking. And the Florida Supreme Court sits at a remove, only dealing with the process near its conclusion.

For the Supreme Court to actively supervise this work – work that impacts the availability of legal services to the public – it’s got to get more involved. It must oversee and direct the Bar throughout the rulemaking process. This could include hiring out neutral professionals to run rulemaking. Or having a subcommittee of Justices deeply involved throughout (and there’s some indication in the Court’s order that it plans to do something along these lines).

This problem isn’t unique to Florida. Most lawyer regulators do their rulemaking in a similar way. But in a state with a bar as large and fractious as Florida’s, the weaknesses of the process are particularly evident.

Need a License to Speak Your Mind?

Need a license to perform your chosen occupation? More and more Americans do. While licensing has long been a requirement for doctors and lawyers, it has spread far wider – licensing is up 5-fold in the last 50 years or so, and around 25% of us work in professions where a license is required.

I’m not going to get into all of the reasons why this spread of licensing is counterproductive, read this Brookings Institute report if you want to dig deeper. Rather, I’m interested in how the spread of licensing is speeding toward a collision with the First Amendment – a collision that will likely change how we think about what’s included within the monopoly our legal licenses grant us.

The tension between occupational licensing and free speech rights is particularly fraught for lawyers, as so much of what we do involves verbal and written expression. But outside of lawyer advertising, there’s been next to no guidance from the courts about the limits of regulators to compel or prohibit the speech of lawyers.

Or the speech of any licensed profession, for that matter.

But with so many occupations now being licensed, and so many regulators imposing and enforcing rules, the Supreme Court’s opportunity to take this issue on may be fast approaching. Recently, we’ve had psychologists told that they couldn’t write newspaper columns, veterinarians told they couldn’t give advice online, and mathematicians told they couldn’t . . . math.

Oh, and Florida doctors have only just recently fought back efforts to restrict their ability to ask patients about guns in the home, and California now requires pregnancy counseling offices to provide government-mandated information about abortion services.

So, lots of efforts abound to restrict professional speech. But what do we know about the acceptable limits of professional speech regulation? Precious little. There’s Justice Byron White’s concurrence in the 1985 case of Lowe v. S.E.C.and some lower court cases. My best guess from these cases is that professional speech regulation requires something in the neighborhood of the “intermediate scrutiny” review that applies to commercial speech.

But there may end up being a difference for regulation of those who aren’t licensed. It’s one thing for regulators to restrict the regulated, but what gives them the right to tell the rest of us what we can and cannot say?

Watch this; it has major implications for the monopoly that lawyers have on providing legal advice. After all, legal advice is just someone expressing their opinion. It’s hard to see what rationale exists for restricting such opinions to lawyers.

Non-Lawyer Investment in Law Firms?

While the ABA has, in recent years, tentatively nosed around the idea of allowing some form of non-lawyer investment in law firms, it’s a concept that continues to be met largely with cries of “BURN THE WITCH” rather than any meaningful engagement.

Arguments against are of the “lawyer exceptionalism” variety, which I addressed in a piece that Vermont Bar Counsel Michael Kennedy reminded me I wrote 5 years ago:

The idea that the law is an exceptional case, that it is a profession that “often mandates conduct and practices that are not profit maximizing or optimizing” such that non-lawyer ownership cannot happen is hogwash. The same argument can be made for business writ large – Sarbanes-Oxley, charitable giving, employee benefits, community involvement and the accounting profession (kidding!) – are all examples of conduct and practices common in business that are not profit maximizing. Or on a more specific level, with medicine, where doctors make daily non-profit-maximizing decisions in the service of patients, despite non-MD ownership of most large medical groups.

What’s more, so many of the problems that our prized ethics rules are designed to prevent could be more effectively solved by letting people who know something about running a business be involved in law firms:

Ineffective marketing, lackadaisical client development, poor internal controls, shoddy accounting practices – all can lead to cash crunches, blown deadlines, drawing from client trust accounts and the litany of ills that end in attorney discipline and malpractice lawsuits.

The concept is back in the news this week, thanks to the spectacularly-poorly-lawyered efforts of Jacoby & Meyers in pressing for a First Amendment right of lawyers to non-lawyer investment. It’s not a great argument, but they surely could have done a better job with it.

In any event, the advent of non-lawyer investment in firms will happen – if it ever does happen – through the wisdom of lawyers rather than judgments from tribunals. I’m hopeful that one day enough attorneys will realize that our profession CAN bring in professionals from other disciplines, allow them to be invested in our work, and improve the quality of the services we offer across the board.

But it might also take a little shaming:

 

High Past Time to Amend the Attorney Ad Rules

Faithful readers of this blog will know that I have long lamented the scabrous attorney advertising rules. Larded down with a centuries-old accretion of quaint prohibitions, the rules are doing nobody any favors.

However, there may be some light at the end of the tunnel. The ABA is actively considering a proposal to streamline its Model Rules relating to attorney advertising. This process gathered momentum on the back of some very fine work by the Association of Professional Responsibility Lawyers, and is happening in an environment that seems ripe for change: states from Oregon to Virginia are actively considering changes – good changes – to improve their ad rules.

Avvo has filed comments in support of the ABA’s initiative; you can read them here. Some other folks also filed comments; almost all of them are also supportive.

Here’s the tl;dr version of Avvo’s comments:

The current rules are both unnecessary and actively harmful. Unnecessary, in that the detailed regulations don’t offer consumers any meaningful protections beyond what a general prohibition on false and misleading advertising would provide. And actively harmful, as they cost the public legal information and innovation through the chilling of lawyer speech.

Here’s hoping the ABA sees this one through, and makes this necessary and long-overdue change.

Good Reversal in “Docs v. Glocks” Case

The 11th Circuit in Florida has just issued its en banc ruling in the infamous “Docs v. Glocks” case. This is something like the third or fourth decision in this case, which addresses the question of whether and to what extent doctors can ask their patients about firearms in the home.

As I’ve written about before, my interest in the case is what it tells us about state regulation of professional speech. Such regulation is an open area, and obviously important to lawyers and the legal profession. After all, most of what we do professionally consists of “speech.”

Today’s decision – which reverses the prior panel, thus striking down the speech-offending portions of the law – spends a fair bit of time parsing the meager state of occupational speech regulation law (much of which consists of Justice Byron White’s concurrence in the 1985 case of Lowe v. S.E.C.). In so doing, it affirmatively rejects the appropriateness of “rational basis” review of occupational speech-limiting regulation, while leaving the ultimate question (which is it, intermediate or strict scrutiny?) hanging:

Because these provisions fail to satisfy heightened scrutiny under Sorrell, they obviously would not withstand strict scrutiny. We therefore need not decide whether strict scrutiny should apply.

Darn it. Still, it’s good to see a decision solidly finding that professional speech is entitled to First Amendment protection – even if it can’t quite tell us how limited the state’s power to regulate might be.

Fake News, Hate Speech, and the First Amendment

I launched this blog as a place to keep all of my notes and thoughts on the professional regulation of attorney speech, a topic largely (but not entirely) informed by the commercial speech doctrine. The doctrine – which permits the government to limit or compel speech under a laxer set of standards than would apply to “core” expression – labors under an unfortunate name. Too many people, including far too many lawyers, think that the doctrine applies to ALL speech by businesses.

This is, of course, demonstrably wrong. The vast majority of media outlets in the U.S. are “commercial,” insofar as they are owned by for-profit entities. In fact, many of these entities are the corporations that people (many of whom surely know better) inveigh against when gnashing their teeth over the Supreme Court’s Citizens United decision. As the Supreme Court has held, time and again, the fact that something is published for commercial reasons (i.e., to make money) does not make it commercial speech. Because if it did, we couldn’t have an independent media. 1

And it seems to me that right about now is when we really, really should see the benefits of an independent media. We’ve got a new administration that has explicitly called out the media as the “opposition party,” that traffics in falsehoods, lies, and gaslighting, and which seeks to punish those outlets that aren’t deemed sufficiently obsequious to its agenda.

This is why it’s particularly galling that people on the left continue to be some of the loudest voices for chipping away at media independence – or free expression rights in general. We’ve seen in recent days an MSNBC journalist suggesting that the federal government should regulate to prevent “fake news,” and even my neighborhood college campus is now up in arms over “hate speech.”

While I could fall back on my lofty exhortations about the value of a robust First Amendment, I would ask all of these would-be censors a simpler and more pragmatic question:

Is this the government you want to let decide what you can and cannot say?

 

 

Notes:

  1. For additional context and background on this, check out Avvo’s 2016 federal court win, which turned on this very question.

The McDonalds of Law?

Late last year, I offered to a room full of attorneys that they should consider emulating McDonalds when it comes to delivering consumer legal services.

Yes, the response was underwhelming. But hear me out:

Think of restaurant dining and legal services as solutions to problems. Dining solves the problem of hunger and nutrition; legal services whatever our legal problem (or, perhaps, opportunity) might be.

When it comes to dining out, one option is McDonalds. It’s quick, predictable, calorie-dense, and cheap. And while the “quality” of the McDonalds dining experience from the subjective perspective of taste might be low, the “quality” from the objective perspective of food safety is on par with other restaurants (and probably higher than average).

Now, if you want a dining experience that is higher in a subjective quality like taste, novelty, or ambiance, you will choose something other than McDonalds. That experience will almost certainly cost more – perhaps orders of magnitude more – but you will make that choice knowingly and openly. And, critically, the restaurant you choose won’t be any different from McDonalds on the objective quality measure of food safety.

Now, on to legal services.

If you’re a consumer in need of legal services, you face a legal marketplace where 95+% of the providers are offering only Chez Panisse-levels of services. Fancy, full-scope, custom services. And let’s put aside for a moment how well they are delivering on that quality promise [too often, not well], and ask the harder question: do consumers of legal services really WANT only the option of dining at Chez Panisse? Or would many of them just rather have some of that fast-predictable-cheap McDonalds action?

We know the answer to this question already. In every other category of goods and services, consumers are used to trading off price for quality. And, predictably, most of them will choose the lower-cost / lower-quality option.

It’s not just McDonalds vs. Chez Panisse. Think staying at the Motel 6 vs. The Ritz. Flying Frontier vs. any other airline. Buying clothes at Old Navy vs. Nordstrom. The subjective quality differences scale all over the place.

And here’s the thing: it’s completely rational for consumers to make these choices based on their own needs and economic condition, as long as the most important measures of objective quality are reasonably similar. Which they are; a mix of marketplace dynamics and consumer protection regulations ensure that minimum levels of objective quality are met.

So knowing that consumers in every other category want the option of a quick, predictable, affordable experience, why don’t more lawyers offer it? One common reason I hear repeatedly is that every legal problem is different, and that lawyers need to provide a sterling level of diligence in order to meet their ethical obligations and avoid malpractice.

This is a bogus objection. McDonalds doesn’t offer a high degree of food safety because they custom-make and inspect every burger and order of fries; they do it because they’ve consciously built up the processes necessary to provide this quality at scale. And lawyers could also offer cheap-and-predictable legal services, at high objective quality, but in order to do so they would need to re-tool their processes to support it. But rather than so doing, too many lawyers continue to rely on handwork, hoping to entice the small “fine dining” segment of the legal market.

So a lot of what’s blocking the opening up of a much bigger segment of the legal services market is mix of inertia, aversion to change, and a lack of facility in business process design. I am far from having all of the answers to this, but if you’re planning on attending Lawyernomics 2017 this April in Las Vegas, my talk will be focused on exploring this opportunity in more detail. I hope to see you there.

This is Why We Can’t Have Nice Things

If you want to see a particularly bleak example of what’s wrong with the legal profession’s over-regulation, check out Massachusetts Bar Ethics Opinion 98-1. This opinion finds that attorneys can’t offer limited scope legal services to clients if those services consist of “ghost-writing” litigation documents.

While this opinion is something of an outlier (and, it should be noted, was issued by a voluntary bar), many states have specific regulatory limitations on the ability of consumers to buy limited scope legal services in the form of help with drafting pleadings. 1

These rules usually take the form of some requirement that attorneys sign off on or otherwise notify the court that they – and not the pro se litigant – have written the document, and are justified on the theory that to not do so would be to somehow deceive the court.

This seems to take a particularly dim view of the capabilities of judges, while simultaneously playing up the supposed uniqueness of lawyers (as anyone who reads a lot of pleadings can tell you, there is vast range of quality across pleadings drafted by lawyers).

And more importantly, it acts as (yet another) regulatory barrier to access to justice. Lawyers who must sign off on pleadings they help draft are going to be far more reluctant to offer limited scope services, or will only do so at a cost level approaching full-scope representation.

Look, attorneys have since time immemorial relied on other attorneys – often not listed in the caption – to help them craft their pleadings. Pro se litigants regularly rely on family members and friends to pitch in.

So why are we so worried about disclosure when a lawyer helps a pro se litigant? Yes, maybe in some edge cases these litigants will gain an edge due to judges giving them some pro se deference despite the professional nature of their briefs. But see what I wrote above about judges – and keep in mind that the deference given to parties who represent themselves is almost never substantive; it’s more about getting more leeway on the process side.

When it comes to the arcana of courtrooms and litigation procedure, unrepresented parties could use all of the help they can get. And I’m sure judges would agree that the whole process would run a lot more smoothly if pro se litigants had regular access to SOME sort of limited scope advice.

At the end of the day, we are fighting the imagined demon of judicial deception at the expense of providing greater access to legal support for pro se litigants.

Maybe that tradeoff was intentional, but I doubt it. Rather, I bet these rules were adopted under roughly this algorithm:

  1. Hey, here’s a theoretical problem!
  2. OK, here’s a potential solution to your theoretical problem!
  3. Great, let’s draft a rule!

If we ever want to get serious about improving consumer access to legal services, we’re going to need to rein in our lawyerly fondness for regulatory solutions, and start fully considering the potential consequences of each rule.

Notes:

  1. Lawyerist recently published a comprehensive list of each state’s rules.