BAPCPA and Free Speech (Part 1)
By Douglas Jacobs, California Bankruptcy Attorney on Jul 15, 2007 in General Bankruptcy Information
The first amendment of the US Constitution guarantees the right to Free Speech, or at least that the government won’t prosecute us for speaking our minds. There are, of course, limits. One can’t yell “fire” in a crowded theatre, causing a panic without appropriate repercussions.
The new bankruptcy law, BAPCPA, raises at least two questions of constitutionality for violations of the guarantee of free speech. The first is the requirement that all “debt relief agents” must include a specific designation in their advertising. The second is the prohibition against giving certain types of pre-bankruptcy advice to a prospective debtor.
If and when these clauses reach the Supreme Court of the United States for a final determination of their constitutionality each will probably be interpreted somewhat differently.
The first section, regarding advertising, will be reviewed to determine if this is an appropriate governmental limitation on “commercial speech.” Although protected by the First Amendment, non-misleading commercial speech can be limited more readily than other types of protected speech. The government must show that their law (or act) causing the limitation is “substantially related to an important governmental objective, intended to further that objective and is no more extensive than necessary.”
The court, as it is currently, may likely find that the protection of the public requires the advertising disclosures under BAPCPA, or at least that Congress hasn’t overstepped its bounds in so finding. See Part 2 for a discussion of the other clause.
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