Zauderer addressed the validity of a rule of
professional conduct that required attorneys who advertised
contingency-fee services to disclose in their advertisements that a
losing client might still be responsible for certain litigation fees
and costs. Noting that First Amendment protection for commercial speech
is justified in large part by the information's value to consumers, the
Court concluded that an attorney's constitutionally protected interest
in not providing the required factual information is
"minimal." Unjustified or unduly burdensome disclosure requirements
First Amendment by chilling protected speech, but "an advertiser's
rights are adequately protected as long as disclosure requirements are
reasonably related to the State's interest in preventing deception of
The challenged provisions of §528 share the essential features of the rule at issue in Zauderer. As in that case, §528's required disclosures are intended to combat the problem of inherently misleading commercial advertisements--specifically, the promise of debt relief without any reference to the possibility of filing for bankruptcy, which has inherent costs. Additionally, the disclosures entail only an accurate statement identifying the advertiser's legal status and the character of the assistance provided, and they do not prevent debt relief agencies like Milavetz from conveying any additional information.
The same characteristics of §528 that make it analogous to the rule in Zauderer serve to distinguish it from those at issue in In re R. M. J. to which the Court applied the intermediate scrutiny of Central Hudson. The ethical rules addressed in R. M. J. prohibited attorneys from advertising their practice areas in terms other than those prescribed by the State Supreme Court and from announcing the courts in which they were admitted to practice. Finding that the restricted statements were not inherently misleading and that the State had failed to show that the appellant's advertisements were themselves likely to mislead consumers, the Court applied Central Hudson's intermediate scrutiny and invalidated the restrictions as insufficiently tailored to any substantial state interest. In so holding, the Court emphasized that States retain authority to regulate inherently misleading advertisements, particularly through disclosure requirements, and it noted that advertisements for professional services pose a special risk of deception.
Milavetz makes much of the fact that the Government in these consolidated cases has adduced no evidence that its advertisements are misleading. Zauderer forecloses that argument: "When the possibility of deception is as self-evident as it is in this case, we need not require the State to 'conduct a survey of the ... public before it [may] determine that the [advertisement] had a tendency to mislead.' " Evidence in the congressional record demonstrating a pattern of advertisements that hold out the promise of debt relief without alerting consumers to its potential cost, see 1998 Hearings, pt. III, at 86, 90-94, is adequate to establish that the likelihood of deception in this case "is hardly a speculative one."
Milavetz alternatively argues that the term "debt relief agency" is confusing and misleading and that requiring its inclusion in advertisements cannot be "reasonably related" to the Government's interest in preventing consumer deception, as Zauderer requires. This contention amounts to little more than a preference on Milavetz's part for referring to itself as something other than a "debt relief agency"--e.g., an attorney or a law firm. For several reasons, we conclude that this preference lacks any constitutional basis. First, Milavetz offers no evidence to support its claim that the label is confusing. Because §528 by its terms applies only to debt relief agencies, the disclosures are necessarily accurate to that extent: Only debt relief agencies must identify themselves as such in their advertisements. This statement provides interested observers with pertinent information about the advertiser's services and client obligations.
Other information that Milavetz must or may include in its advertisements for bankruptcy-assistance services provides additional assurance that consumers will not misunderstand the term. The required statement that the advertiser " 'help[s] people file for bankruptcy relief' " gives meaningful context to the term "debt relief agency." And Milavetz may further identify itself as a law firm or attorney. Section 528 also gives Milavetz flexibility to tailor the disclosures to its individual circumstances, as long as the resulting statements are "substantially similar" to the statutory examples. §§528(a)(4) and (b)(2)(B).
Finally, we reject Milavetz's argument that §528 is not reasonably related to any governmental interest because it applies equally to attorneys who represent creditors, as Milavetz sometimes does. The required disclosures, Milavetz contends, would be counterfactual and misleading in that context. This claim is premised on an untenable reading of the statute. We think it evident from the definition of "assisted person"--which is stated in terms of the person's debts, see §101(3)--and from the text and structure of the debt-relief-agency provisions in §§526, 527, and 528 that those provisions, including §528's disclosure requirements, govern only professionals who offer bankruptcy-related services to consumer debtors. Section 528 is itself expressly concerned with advertisements pertaining to "bankruptcy assistance services," "the benefits of bankruptcy," "excessive debt, debt collection pressure, or inability to pay any consumer debt," §§528(a)(3) and (b)(2). Moreover, like the other debt-relief-agency provisions, that section is codified in a subchapter of the Bankruptcy Code entitled "debtor's duties and benefits." In context, reading §528 to govern advertisements aimed at creditors would be as anomalous as the result of which Milavetz complains. Once again, we decline Milavetz's invitation to adopt a view of the statute that is contrary to its plain meaning and would produce an absurd result.
Because §528's requirements that Milavetz identify itself as a debt relief agency and include certain information about its bankruptcy-assistance and related services are "reasonably related to the [Government's] interest in preventing deception of consumers," Zauderer, 471 U.S. at 651, we uphold those provisions as applied to Milavetz.