Monday, March 8, 2010

Attorneys Governed By Bankruptcy Act

The United States Supreme Court held today that the class of bankruptcy professionals designated as "debt relief agenc[ies]" by the Bankruptcy Abuse Prevention and Consumer Protection Act includes attorneys who provide bankruptcy assistance. The provision of the Act that prohibits advising a debtor to incur more debt because the debtor is filing for bankruptcy rather than for a legitimate purpose is valid as applied to the attorneys who brought the challenge. The court further held that its decision in the Zauderer case governs the disclosure requirements of the Act and that such disclosure obligations are "reasonably related" to the Government's interest.

Justice Sotomayor wrote for the Court. All justices joined the full opinion except Justice Scalia, who did not join one footnote and Justice Thomas, who joined except for one part. Justice Thomas filed an opinion that discusses the Zauderer precedent. (Mike Frisch)

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