Back in the good old days when bashing BAPCPA was in vogue, I posited here that BAPCPA's "debt relief agency" provisions
"look more like an effort to create a consumer bankruptcy lawyer clone who, much
like the ever-multiplying Agent Smith from The Matrix-Reloaded, speaks and does precisely as directed with
ruthless efficiency." Today's unanimous opinion from Justice Sonia Sotomayor
(with concurrences from Justices Scalia and Thomas) tells us not to worry
because while attorneys in fact are "debt relief agents" under the Code,
§526(a)(4) "prohibits a debt relief agency only from advising a debtor to incur
more debt when the impelling reason for the advice is the anticipation of
bankruptcy." Milavetz, Gallop & Milavetz, P.A., v. United States,
No. 08-1119 (Op. at 13).
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It would make scant sense to prevent attorneys and other
debt relief agencies from advising individuals thinking of filing for bankruptcy
about options that would be beneficial to both those individuals and their
creditors. That construction serves none of the purposes of the Bankruptcy Code
or the amendments enacted through the BAPCPA. Milavetz itself acknowledges that
its expansive view of § 526(a)(4)would produce absurd results; that is one of
its bases for arguing that “debt relief agency” should be construed to exclude
attorneys. Because the language and context of § 526(a)(4) evidence a more
targeted purpose, we can avoid the absurdity of which Milavetz complains without
reaching the result it advocates.
For the same reason, we reject Milavetz's
suggestion that § 526(a)(4) broadly prohibits debt relief agencies from
discussing covered subjects instead of merely proscribing affirmative advice to
undertake a particular action. Section 526(a)(4) by its terms prevents debt
relief agencies only from “advis[ing]” assisted persons “to incur” more debt.
Covered professionals remain free to “tal[k] fully and candidly about the
incurrence of debt in contemplation of filing a bankruptcy case.” Brief for
Milavetz. Section 526(a)(5) requires professionals only to avoid instructing or
encouraging assisted persons to take on more debt in that circumstance. Cf.
ABA Model Rule of Professional Conduct 1.2(d) (2009) (“A lawyer shall not
counsel a client to engage, or assist a client, in conduct that the lawyer knows
is criminal or fraudulent, but a lawyer may discuss the legal consequences of
any proposed course of conduct with a client and may counsel or assist a client
to make a good faith effort to determine the validity, scope, meaning or
application of the law”). Even if the statute were not clear in this regard, we
would reach the same conclusion about its scope because the inhibition of frank
discussion serves no conceivable purpose within the statutory scheme. Cf.
Johnson v. United States, 529
U.S. 694, 706, n. 9 (2000). (Op. at 16) (emphasis in
We admit that, in many places and in ordinary
times, the defendants, in saying all that was said in the circular, would have
been within their constitutional rights. But the character of every act depends
upon the circumstances in which it is done. Aikens v. Wisconsin,195 U. S.
194, 205-06 (1904). The most stringent
protection of free speech would not protect a man in falsely shouting fire in a
theatre and causing a panic. It does not even protect a man from an injunction
against uttering words that may have all the effect of force. Gompers v. Bucks Stove & Range Co.,
221 U. S.
418, 439 (1911). The question in every
case is whether the words used are used in such circumstances and are of such a
nature as to create a clear and present danger that they will bring about the
substantive evils that Congress has a right to prevent. It is a question of
proximity and degree. When a nation is at war, many things that might be said
in time of peace are such a hindrance to its effort that their utterance will
not be endured so long as men fight, and that no Court could regard them as
protected by any constitutional right. It seems to be admitted that, if an
actual obstruction of the recruiting service were proved, liability for words
that produced that effect might be enforced.