ABA Brief Says Lawyer Advice Shouldn’t Be Restricted by Bankruptcy Law

The American Bar Association has filed an amicus brief with the U.S. Supreme Court arguing that a federal bankruptcy law restricting the advice of debt relief agencies should not apply to lawyers.

The law says debt relief agencies are barred from advising clients to “incur more debt in contemplation” of filing for bankruptcy. The ABA argues in the brief (PDF) that applying the provision to lawyers would restrict their ability to provide appropriate advice to clients and risk subjecting privileged communications to discovery, according to a press release.

The St. Louis-based 8th U.S. Circuit Court of Appeals ruled the law applies to lawyers, but it violates the First Amendment because it “prevents attorneys from fulfilling their duty to clients to give them appropriate and beneficial advice,” according to a January story in the ABA Journal. In June, the Supreme Court granted cert in the case, United States v. Milavetz, Gallop & Milavetz.

The ABA brief notes that the association’s House of Delegates opposes applying the law to lawyers on the ground that it violates First Amendment principles, undermines the confidential attorney-client relationship, and interferes with state judicial systems’ regulation of the legal profession.

The brief asks the Supreme Court to overturn the 8th Circuit holding that the law applies to lawyers. If the Supreme Court reaches the constitutional issue, it should consider the “substantial negative—and unnecessary—impact of the [law] on the ability of the state judicial systems to regulate the legal profession and on the important protections embodied in the attorney-client privilege,” the brief says.