October 23, 2012

Q and A on Milavetz, Gallop & Milavetz v. United States and United States v. Milavetz, Gallop & Milavetz Oral Argument with David L. Hudson, Jr.

Q and A on Milavetz, Gallop & Milavetz v. United States and United States v. Milavetz, Gallop & Milavetz Oral Argument with
David L. Hudson, Jr.

Can you briefly review how this case got to the Court?
This case came to the Court because the lower courts were divided over three issues: (1) whether the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) applied to attorneys; (2) whether the provision in BAPCPA that prohibits attorneys from giving advice to bankruptcy clients about incurring additional debt violates the First Amendment; (3) whether provisions mandating that attorneys include certain disclaimers violates the First Amendment.

The Court presumably took the case(s) to resolve these splits.

How did the oral argument go? Which if any side do you think should have come out feeling good about their hour in Court?
The oral argument was engaging and the Court hit on all three issues though not necessarily in the order one might expect. The initial questioning concerned the "lawful advice" provision—the provision that prohibits attorneys from telling clients to incur more debt. Then, the argument transitioned over to the threshold statutory argument of whether the act applies to attorneys. Then, the Court addressed the advertising disclosure provisions.

It is like reading tea leaves to predict, but…it seems as if the government looked strong on the statutory question—whether the act applies to attorneys. The plain language of the statute suggests that it does. However, the petitioners looked strong on the "incur more debt" provision as many of the justices seemed to express grave reservations about that provision.

It is tougher to tell on the forced advertising disclosures, but the Court might not reach that issue. What do you think the Court saw as the strongest argument?
I think the Court was very concerned about the breadth of the prohibition against lawyers giving advice to their client about incurring more debt. The Court peppered the government attorney with several questions that seemed to indicate its displeasure with this provision that bans lawful advice.

Were there any questions or discussions that surprised you?
Yes, there were some excellent questions. Justice Ginsburg asked an excellent question as to whether the ban on giving clients advice on incurring more debt would apply to a lawyer who had a client who faced serious cancer surgery before bankruptcy.

The other thing that surprised was the repeated questioning of the government's attorney on the "lawful advice" provision by Chief Justice Roberts, who seemed to have real trouble with this law. He repeatedly questioned the government’s attorney at times beginning with "oh, no, no, no …" He seemed to indicate that he thought this provision would intrude on the attorney-client relationship.

I was also surprised at some of the tough question that Justice Alito delivered to the government on the forced disclosure provisions that require attorneys to identify themselves as "debt relief agencies"

What was the media coverage of the argument like? If there was any, do you think it was a fair representation?
The media coverage was sparse. I'm not sure the media recognized how important the forced disclaimer issue is in First Amendment jurisprudence and how deeply divided the lower courts are. Most of the coverage was quite superficial.

Any guesses on how the case will be resolved? Did any of the justices show their hand?
I think the Court will find that the statute does apply to attorneys—the government will win on that point. However, the Court will rule for the petitioners on the "incur more debt" provision—Chief Justice Roberts really does not like that provision. I am less sure on the forced disclaimer/disclosure issue.