Unlike the earlier cases, which largely addressed straightforward attorney marketing and solicitation issues, Milavetz involved a more tangential issue: whether the disclosure requirements of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) – which mandate that debt relief agencies disclose that their assistance may involve seeking bankruptcy relief – violate the First Amendment rights of bankruptcy attorneys.[ref]Milvetz attracted significant attention from the bar while it was being litigated due to the larger, threshold issue it raised – whether bankruptcy attorneys are “debt relief agencies” under BAPCPA. The Court concluded that they are. 130 S. Ct. at 1333.[/ref]
The Milavetz case offers a good look at how the standard of review for disclosure requirements works in the commercial speech context. While the Milavetz firm argued for the application of the “intermediate scrutiny” standard, the Supreme Court agreed with the government that the more relaxed “reasonably related” standard should apply. Importantly, the application of the lower standard was due not merely to the fact that the regulation involved disclosure rather than speech prohibition, but also because the court found that advertisements for legal assistance with debt that didn’t mention the possibility of bankruptcy would be inherently misleading.
Takeaway: A bit of an edge case compared to earlier SCOTUS decisions on attorney advertising, Milavetz is nonetheless important for expanding upon and reinforcing the Zauderer principle that disclosure requirements don’t merit relaxed first amendment scrutiny on their own; they must also target inherently misleading communications.