9th Circuit Reverses on Expanded Protection for Commercial Speech

Josh King

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.

May 2017 Notes: Live-tweeting trials and client communications via Facebook

Josh King

Live-Tweeting Trials Not “Broadcast.” In early May, at the ABA Litigation Section Annual Meeting, I spoke on a panel relating to social media use in trial. Two of my co-panelists were Judge William Alsup – who has presided over several high-profile technology cases in the Northern District of California – and Sarah Jeong, a lawyer/journalist who has pithily live-tweeted several of these cases. I was really struck by Alsup’s commitment to openness in the proceedings, and his sense that Jeong’s live-tweeting added something substantive to public understanding of his cases. This is certainly not the case everywhere, as many courts don’t even permit mobile devices in the courtroom, and others prohibit video or audio coverage. But in a sign of at least some movement on the transparency front, the Indiana Judicial Ethics Commission recently concluded that live-tweeting does not run afoul of that state’s prohibition on “broadcasting” court proceedings.

Failure to Communicate, Facebook Edition. A Nebraska lawyer was just suspended for failing to adequately respond to a client’s Facebook Messenger inquiries. But as Vermont Ethics Counsel Michael Kennedy notes, there’s nothing special to see here – this is simply a failure to communicate with a client; the medium used just happened to be “social.” And that’s the thing: as clients increasingly use social media to communicate – and anyone with teenage children knows that the idea of using a phone to actually TALK will be met with blank stares – attorneys have to respond and adapt to these changing habits. Social media may feel informal or frivolous, but a client’s concerns are no less real simply because they were communicated via instant message. And the attorney here still could have responded with a call, a letter, or an email – rather than just tapping back “Relax.”

Florida LRS Rule Changes Rejected. Florida is home to the nation’s most restrictive and extensive set of lawyer advertising regulations. For the last several years, the Florida Bar has been attempting to update those rules – specifically the rules relating to lawyer referral services – to deal with problems stemming from services cross-referring clients for unnecessary medical care. Unfortunately, the approach the Bar came up with didn’t address this problem at all. Instead, it attempted to water down the LRS rules and have them apply to all forms of legal marketing – including Avvo. So I went to Tallahassee last month to let the Florida Supreme Court know why we think this proposal is bad for Florida consumers and lawyers (I’m up at the 23:00 mark). I’m happy to report that the Court agreed that the Bar is on the wrong track, and sent it back to the drawing board. This doesn’t mean Florida won’t ultimately change its rules, but hopefully it will do so in a way that thoughtfully considers both the issues and the opportunities raised by developments in legal marketing and services.

Social Media News and Notes:

The “internet of things” lets manufacturers retaliate directly against negative reviews (note: NOT a good idea).

Lawyer’s defamation lawsuit over “worst ever” review is tossed by court.

Texas judge is reprimanded after letting his inner racist fly on Facebook.

Florida Supreme Court Rejects LRS Rule Changes

Josh King3 Comments

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?

Josh King

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.

April 2017 Notes: It’s all About “Unmasking” This Month!

Josh King

Twitter Crushes Unmasking Attempt. If you’ve been following the political news lately, there’s been LOTS of talk about leaks of information and the “unmasking” of the identity of U.S. citizens caught up in government surveillance of foreign spies. But the political unmasking tilt took yet another turn in early April, as the Department of Homeland Security tried to use an administrative summons to force Twitter to reveal the identity of the person behind an anonymous account. The account – @ALT_uscis – was one of many “ALT government” accounts set up after last November’s presidential election. And like many of the other accounts, @ALT_uscis regularly posts content critical of the Trump administration and the agency it spoofs – in this case, the Customs and Immigration Service. Twitter, to its credit, filed a federal lawsuit to quash the summons. After all, there is a strong first amendment protection for anonymous speech, and the use of administrative summons or subpoenas to reveal the identity of anonymous speakers – particularly when such tools are wielded by thin-skinned bureaucrats – is exceptionally threatening to full and robust public expression. Within a day the DHS withdrew the subpoena, showing that at least at some level grownups have asserted authority within the agency. But it shouldn’t have to take a lawsuit and public pressure for government agencies to respect the right of the public to criticize them.

Avvo Unmasking Follow-Up. Back in 2015, Avvo took a similar stance in response to a subpoena from an attorney seeking to unmask the identity of the anonymous author of a negative Avvo review, who the attorney believed was a non-client. That case, decided in favor of the reviewer, established the balancing standard in Washington State by which courts will determine whether to permit discovery under “unmasking subpoenas.” Now, the reviewer has come forward and identified herself, proving that she was a client of the lawyer in question, and noting that she “feels strongly about the need for a consumer to speak the truth about their experience” with an attorney.

It’s Hard to Hide Online. If any of my readers are wondering whether they can reliably stay anonymous online, here’s a fascinating cautionary tale. After FBI Director James Comey mentioned offhand that he had a “secret” Twitter account, Gizmodo reporter Ashley Feinberg took on the challenge of tracking it down. Through some quick detective work and cross-referencing of other accounts, Feinberg zeroed in on a particular twitter account: @ProjectExile7. And by tracking the accounts @ProjectExile7 followed, and the FBI-centric tweets occasionally sent out by the account, she concluded that it was “almost certainly” Comey’s (this conclusion was bolstered by the posting of this meme by @ProjectExile7 right after Feinberg’s story ran). The takeaway? If even the FBI Director can’t stay hidden from a motivated investigator, don’t count on having better luck yourself.

Social Media News and Notes:

Lawyers continue to wring hands about reconciling ethics rules and use of social media.

“Reverse astroturfing:” $34,500 judgment in case of false negative review left for competitor.

Some surprisingly good tips for lawyers experimenting with Facebook advertising.

Non-Lawyer Investment in Law Firms?

Josh King

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:

 

March 2017 Notes: Social Media Lockout?

Josh King

On “Giving Freely” in Social Media. Kevin O’Keefe recently wrote a great blog post on the importance of lawyers being willing to “give” – without expectation of return – when using social media. You should read the whole thing, but the central point is key to prosperity in all relationships, whether on social media or in the real world (or in the increasingly prevalent intersection of the two): it all starts with sharing and real engagement. This can be hard for lawyers; we are skeptical, cautious, risk-adverse. We can have a hard time wrapping our heads around the concept of opening our arms and freely giving advice, information, encouragement, or guidance. But Kevin’s post is echoed in another recent take, from the brilliant Farnham Street blog, on the differences between “rich” and “poor” mindsets: while the latter always seeks the easy way out, the former knows that all success comes from enriching the lives of other people and going the extra mile. Getting hyped up on traffic numbers or constantly selling yourself is just a distraction from the work that drives real value – giving of yourself.

Is Using Facebook a Fundamental Right? In a sign of the pervasiveness of social media, the Supreme Court is poised to decide whether the state (in this case, under the ambit of restrictions on sex offenders) may prohibit access to social media platforms. The case raises broad questions about access to information and news, particularly in an environment where so much news dissemination comes via social media. With both the press and political leaders regularly taking to Twitter to spread news and express opinions, is it proper for government to limit access to such media? Look for the court’s answer later this summer. However, even if the Supreme Court finds such a right, don’t expect it to extend to the courtroom. Judges have wide discretion to control their spaces. As one commenter noted, constitutional rights are “at their nadir” in the courtroom. Or, as one witness recently learned the hard way, if a judge doesn’t want you to broadcast your buddy’s murder trial using Facebook Live, he probably means it.

Settlement in “Fake Defendant” Libel Lawsuit. I’ve written here a number of times before about what seems to be a growing practice of fraud on the courts designed to remove negative online reviews: file a defamation lawsuit, show up with the “defendant,” stipulated judgment in hand, and then take the judgment to Google and have the offending review “de-indexed” so it will never show in search results. Paul Alan Levy of Public Citizen has been leading the charge against this practice, and he’s obtained first blood: a settlement, along with the referral of the case to law enforcement. For lawyers who outsource their marketing, this case is yet another call for expanded due diligence, as the defendant here was a “reputation management” company. There are no doubt other such companies also doing this. And while it would be bad for any business to be found to have used a third party to try and defraud the courts, just imagine how career-impacting it would be for an attorney to be caught up in such matters.

Briefly:

Who says blogging doesn’t pay? Prolific tax law blogger named dean of Pepperdine law school.

Groupon’s legal team has created a scorecard – with client reviews – for outside law firms.

The Nevada Supreme Court will have to decide a fight between the State Bar and AG’s office over attorney licensing.

Credibility in Business and Government

Josh King

[This post was inspired by an email discussion after my last CLE webinar, “Lawyers & Lies.”]

Prior to the 2016 Presidential election, it wasn’t exactly a secret that Donald Trump is a less-than-effective businessman. Those familiar with how businesses operate and grow know that building a business empire through real estate and one’s gilded name, on the back of inherited wealth, is no marker of an excellent business operator.

The signs were all there: the bankruptcies, the reliance on a small coterie of loyalists and family, the rumors of shady dealings, the repeated stories about screwing over counterparties (often tradespeople and small-scale vendors), and the lack of any business vision other than the simple logic of commercial real estate: leveraging other people’s money and hoping that rents rise and assets inflate fast enough to outpace debt service.

So I doubt that any serious business person voted for Trump on the commonly-held assumption that he would wield his “business acumen” to bring the problems of unruly government to heel. [ref]Although surely plenty voted for him on the assumption that he would adopt business-friendly policies, either hoping that collateral damage (to democratic institutions, national security, minority rights, etc.) would be minimized or out of a willingness to ignore such concerns. The first part of that seems to be working out so far.[/ref] But plenty of people less familiar with business surely bought in to this pipe dream, assuming that Trump’s gold-festooned lifestyle was a proxy for serious mastery of all things business.

It should now be obvious – to  all but the willfully blind – that the assumption of Trump’s business skills has been put soundly and firmly to bed. The failures of operational discipline were apparent from the start, from the disorganized transition to the complete goat rodeo that represented Trump’s first travel ban rollout – an egregious bit of policy that nonetheless could have easily been landed successfully had a defter hand been at the helm. But beyond this lack of operating chops, we are now seeing the impact of another, even more critical form of business currency that Trump seems devoid of: credibility.

Presidents and politicians, even more than business leaders, are notorious for spin, overstatement, and failed predictions. But this doesn’t mean they don’t retain – and rely on – some reservoir of core credibility. That much of what they say, particularly when making statements of fact and important or personal commitments, can be fundamentally trusted.

Trump is something else entirely. In the New York Times yesterday, David Leonhardt offered a good overview of the President’s many, many confabulations. Yet while the man is clearly a liar (in the sense that so many of his untruthful utterances, unlike the spin or failed predictions of other politicians, are clearly intentional), he is also something more: a bullshitter. The bullshitter will lie, certainly. But more fundamentally, the bullshitter doesn’t care about the truth. Whatever he says is whatever he says – it’s just a means to end. He says whatever he needs to say to get to where he wants to be.

And the thing is, being a bullshitter probably worked pretty well in Trump’s sad, shoddy, little business empire. You can shine on lenders, as long as they get paid or you’ve got an escape hatch via bankruptcy. You can stiff your “little guy” vendors, because what are they going to do, sue? And you can take advantage of the star-struck and gullible, because suckers abound when celebrity (even of the tarnished, C-list variety) is around.

But lacking credibility doesn’t work in real business, or – as Trump is learning – in government. First of all is the transparency: people start checking things out. They follow up to see if you did what you said you were going to do. And they call you on your bullshit when you lie or fail to follow through.

Even worse for the bullshitter who finds himself out of his depth is the fact that the loss of credibility makes it really hard to get things done. While our society has lots of contracts, laws, and verification procedures, there are myriad points where we invest – time, money, effort – based on our trust of another person. Imagine if you didn’t trust a counterparty to not retrade or willfully breach an agreement. Would you invest the time to negotiate a deal with them anyway? Of course not. The same goes for government – the bullshitter’s got no ability to cajole, persuade, or incentive. His bullshit has cost him any room to negotiate, because his counterparties don’t believe what he’s saying, and don’t trust that he will meet any commitments he makes. He’s stuck with nothing but punitive measures.

The punitive-and-petulant approach may have worked passably well in the gaudy corridors of Trump Tower. But as our 45th President is discovering, it’s not remotely enough to meet the challenge of running the country. Credibility must come first.

High Past Time to Amend the Attorney Ad Rules

Josh King

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.

Disbar Conway for Lying?

Josh King

It’s not too early into the Trump administration to call it: this is a group that’s got very little regard for the truth. And that’s even by the low standards of political spin – we’ve got plenty of examples, already, of out-and-out gaslighting. Chief among the lying liars in the administration has been White House “Senior Counselor” Kellyanne Conway, who done everything from puff the (anemic) size of Trump’s inauguration crowds to shill for his daughter’s clothing line.

In response, a group of law professors has filed a grievance against Conway seeking professional discipline against her in Washington, D.C., where she is licensed as a lawyer. The complaint relies upon the famously broad language in Rule 8.4(c), which proscribes “conduct involving dishonesty, fraud, deceit or misrepresentation.”

Loathsome as I find Conway’s approach, I am similarly appalled at this grievance. I mean, I could see some wingnut lawyer filing a grievance against Conway, but over a dozen law professors? Who should know better?

While there are many issues with this grievance, I just want to focus on two macro-points, one legal and one practical.

The Legal Objection

Like many of the Rules of Professional Conduct, Rule 8.4(c) appears to be written by people with little understanding of the First Amendment. First there’s the bit about “conduct,” which sort of dodges the question about whether this is dealing with matters purely of speech or only “speech as conduct,” a famously messy area that was dealt with just last week by the 11th Circuit in striking down Florida’s limitation on doctors asking patients about firearms ownership.

More objectionable is the failure to tie this broad prohibition on lying to the actual practice of law.  While the outer bounds of the state’s ability to limit speech in the professional realm is uncertain, here are two propositions that clearly lie on opposite sides of that boundary:

  1. Well within the power of the state to regulate: Requiring that attorneys not lie in the course of representing clients.
  2. Well outside the power of the state to regulate: Requiring that attorneys not lie, ever.

There is a first amendment right to lie, and we attorneys don’t forfeit it just because we get licensed. This is a straightforward legal principle, and the law profs’ grievance fails on this front right out of the gate.

The Practical Objection

I was going to say “like it or hate it, we all have a right to lie.” But really, if you hate the fact that we have the right to lie, you haven’t given it enough thought. Having the right to lie doesn’t mean we have the license to do so, or that lying should be socially acceptable. It means simply this:

We are not going to let the government be the arbiter of truth.

Many of the law profs who brought the grievance would likely object “but Conway is in an important position of power and influence; she may be working as a lawyer (i.e., an active “representation”), and because of how Big of a Deal this is we need to push it forward.”

But it is for precisely this reason that we shouldn’t push edge cases. We don’t want the government calling balls and strikes in matters of public discussion. That’s a straight path to censorship. The first amendment and freedom of discourse needs a lot of breathing room, as even the implication of regulatory action will cause many to clam up.

No, not Kellyanne Conway, of course (although the social virtues of lie-shaming seem to have set in, as the cable news outlets have tired of her act). But how about everyone else? My practical objection to this grievance is that if it gets any traction, what does that mean for any other lawyer who wants to speak out on matters of public import? Or, closer to home, what if someone wants to start policing the many words – again, outside of any representation – that these law professors no doubt spill publicly on any number of subjects?

Hopefully, the D.C. Bar will do the right thing and dismiss this grievance quickly and decisively.