Transcript of the Preliminary Injunction Hearing 1 1 UNITED STATES DISTRICT COURT 2 DISTRICT OF CONNECTICUT 3 CONNECTICUT BAR ) 4 ASSOCIATION, et al, ) Plaintiff, ) NO: 3:06CV729(CFD) 5 ) vs. ) 6 ) July 13, 2006 UNITED STATES OF AMERICA, ) 7 et al, ) Defendants. ) 8 ___________________________ 9 HEARING 450 Main Street 10 Hartford, Connecticut 11 B E F O R E: THE HONORABLE CHRISTOPHER F. DRONEY, U.S.D.J. 12 13 A P P E A R A N C E S: 14 For the Plaintiffs : BARRY S. FEIGENBAUM, ESQUIRE Rogin, Nassau, Caplan, Lassman 15 & Hirtle Cityplace I, 22nd Floor 16 185 Asylum Street Hartford, CT 06103 17 PETER J. RUBIN, ESQUIRE 18 Georgetown University Law Center 19 600 New Jersey Avenue Washington, DC 20001 20 21 For the Defendants : MARCIA K. SOWLES, AUSA U.S. Department of Justice 22 20 Massachusetts Ave. N.W. Room 7108 23 Washington, DC 20530 24 Court Reporter : Martha C. Marshall, RMR, CRR 25 Proceedings recorded by mechanical stenography, transcript produced by computer. 2 1 2 A P P E A R A N C E S: (Continued) 3 ANN M. NEVINS, AUSA 4 U.S. Attorney's Office 915 Lafayette Blvd., Room 309 5 Bridgeport, CT 06604 6 Amicus THOMAS D. GOLDBERG, ESQUIRE 7 Commercial Law League Day, Berry & Howard of America One Canterbury Green 8 Stamford, CT 06901 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 1 THE COURT: Good morning. This is the case of the 2 Connecticut Bar Association, et al versus United States of 3 America, et al. It's our civil action number 3:06CV729. 4 If I could have the appearances of counsel for the 5 record, please. 6 MR. FEIGENBAUM: Please the Court, your Honor, 7 Barry Feigenbaum from Rogin Nassau representing the 8 plaintiffs. With me, your Honor, today is my co-counsel 9 Peter Rubin from Georgetown University Law School. 10 And with your Honor's leave, we have at counsel 11 table here a representative of the Connecticut Bar 12 Association, Attorney Tom Gugliotti, and the President of 13 NACBA, the National Association of Consumer Bankruptcy 14 Attorneys, Henry Stein. 15 THE COURT: Welcome. 16 MS. NEVINS: Good morning, your Honor, Ann Nevins, 17 Assistant United States Attorney, for the defendants. 18 Your Honor, with me at counsel table today is 19 Matthew Sutko, a Trial Attorney from the Executive Office of 20 United States Trustees at the Department of Justice, as well 21 as Marcia Sowles, from the Civil Division of the Department 22 of Justice. 23 Your Honor, also present in court today is 24 defendant Diane Adams, the Acting United States Trustee for 25 Region II, Assistant United States Trustee Elizabeth Austin. 4 1 And, your Honor, I'd like to just mention that 2 there are two law student interns from the Bridgeport U.S. 3 Attorney's Office who have done some research and have 4 provided assistance present in the courtroom as well, Seth 5 Lloyd from Yale Law School and Emily Grenier from the 6 Quinnipiac University Law School. 7 THE COURT: Thank you, Ms. Nevins. And I have 8 two motions to take up today -- 9 MR. GOLDBERG: Your Honor, also Thomas Goldberg 10 from Day, Berry & Howard. We represent the Amicus Curiae, 11 the Commercial Law League of America. 12 THE COURT: Thank you, Mr. Goldberg. 13 And I do have two motions to take up today. The 14 first is the plaintiff's Motion for Preliminary Injunction. 15 It's dated May 11th of this year and has an entry number of 16 4. And then the more recently filed Motion to Dismiss of 17 the defendants. 18 Are we prepared to proceed with both today? 19 MR. FEIGENBAUM: Yes, your Honor. 20 THE COURT: You too? 21 MS. NEVINS: Yes, your Honor. 22 THE COURT: So why don't we go with the plaintiffs 23 first. Are you going to argue that, Mr. Feigenbaum, or 24 Mr. Rubin? 25 MR. FEIGENBAUM: Mr. Rubin will be arguing that, 5 1 your Honor. 2 As a preliminary matter, if I may, there are a 3 couple of motions, one from each side here, filed briefs in 4 excess of the allotted limit under the rules, and we both 5 ask that those motions be granted. 6 In addition, there are two sets of exhibits which 7 have been premarked and given to the clerk, along with 8 additional copies for you and your law clerk. The 9 plaintiffs exhibits are 1 through 7. And I'd ask that those 10 be admitted as evidence in this proceeding. 11 THE COURT: Is there any objection to that? 12 MS. NEVINS: No, your Honor. 13 THE COURT: So I'll admit them as full exhibits. 14 And back to the pending motions. I did take a 15 look at the pending motion, and I think it is, as you say, 16 it's just a motion for the oversized briefs, and the pro hac 17 vice motions have been granted already. So I'll grant the 18 motions for the oversized briefs as well. 19 MS. NEVINS: Thank you, your Honor. 20 Your Honor, with respect to the defendant's 21 exhibits, those have been premarked and there are copies 22 available for the Court and for the -- I believe they've 23 been provided to you. They are marked as Government 24 Exhibits A through I. And I'd ask that those be marked and 25 allowed as full exhibits as well. 6 1 THE COURT: Is there any objection to that? 2 MR. FEIGENBAUM: No objection, your Honor. 3 THE COURT: So we'll mark those as full exhibits 4 as well. Are we ready to proceed then? Mr. Rubin, you're 5 ready to go? 6 MR. RUBIN: May it please the Court. Before I 7 begin, I'd like to reserve 15 minutes of my argument time 8 for rebuttal. 9 THE COURT: Certainly. 10 MR. RUBIN: If they apply to attorneys, the new 11 Sections 526, 527 and 528 of the Bankruptcy Code working 12 profound, and so far as plaintiffs are aware, unprecedented 13 intrusion into the attorney/client relationship, they 14 interfere directly with the provision of advice of counsel 15 from attorneys to clients, advice of counsel that may not 16 only be ethical and wise, but ethically required. 17 The consequences of these provisions is quite 18 grave. And our declaration evidence demonstrates that 19 already these provisions are having a substantial impact on 20 the practice of law by attorneys here in Connecticut and 21 elsewhere. If these provisions apply to attorneys they 22 violate the First and Fifth Amendments to the United States 23 Constitution, as well as principles of separation of powers 24 and federalism. But the first question this Court would 25 have to address is do they apply to attorneys. 7 1 If these provisions were ambiguous on that point, 2 the canon of constitutional avoidance and the clear 3 statement rule which provides that Congress may not, unless 4 it speaks clearly, supplant areas of traditional state 5 regulation, would both require it to construe the statute so 6 as not to apply to attorneys. But ultimately there is no 7 ambiguity in this law because of the presence in the statute 8 of a rule of construction that can be found at 11 U.S.C. 9 Section 526(d)(2). 10 The statute in which these were adopted have many, 11 many, many provisions. It's a huge statute, the so-called 12 BAPCPA. These three provisions, and only these three, are 13 subject to a rule of construction which says that they may 14 not be construed to interfere with the authority of states 15 or the federal courts to regulate the qualifications for the 16 practice of law. Yet if they are construed to apply to 17 attorneys that's just what they'll do. Indeed, not only do 18 they interfere with the authority of states to regulate the 19 practice of law by making it impossible for them to enact 20 conflicting provisions, they already conflict with state 21 rules of ethics and professional conduct here in 22 Connecticut. For example, Rule of Professional Conduct 1.5 23 does not require a signed contract, an executed contract, 24 before a representation may go forward. These provisions 25 do. Rule 7.1 prohibits the provision of misleading 8 1 statements. These require the provision of such statements. 2 Rule 2.1 requires that the candid advice of the attorney be 3 given to the client. And these provisions require them to 4 provide advice that is not their candid advice and, indeed, 5 that they would never give in the ethical practice of their 6 profession. 7 THE COURT: Well, is there any question that debt 8 relief agency applies to attorneys who provide assistance to 9 debtors? Just by reading the statute, isn't it clear that 10 it does apply to those lawyers? 11 MR. RUBIN: The answer is no, your Honor. I think 12 that if you read the entire statute it's actually clear that 13 it does not. The statute may not be construed to apply to 14 attorneys. It is absolutely true that Section 526 includes 15 a restriction, the definitions include a restriction or a 16 definitional term that given the information and advice of 17 of counsel, but then the one that is most suggestive of 18 attorneys is or legal representation in a bankruptcy 19 proceeding is covered by this. 20 THE COURT: It's pretty clear, isn't it, that 21 we're talking about lawyers who represent debtors in 22 bankruptcy cases? 23 MR. RUBIN: Well, I guess I have two answers to 24 that. First of all, it is at least ambiguous. At least one 25 court has already held that that does not refer to 9 1 attorneys, but refers to the unlawful practice of law -- 2 THE COURT: That's the Georgia Bankruptcy Court? 3 MR. RUBIN: This is the Georgia Bankruptcy 4 Court. 5 THE COURT: Is there an action proceeding before 6 that Judge? 7 MR. RUBIN: It's on appeal now whether that was a 8 known violation -- whether there was any standing in that 9 suit, but was a judiciable controversy before the the court. 10 But the reasoning of the opinion is why I refer to 11 it, not because ultimately I know whether or not the Court 12 properly issued its ruling. It did construe the statute and 13 it said that it construed it not to apply to attorneys. So 14 there's at least ambiguity about the statute, but the rule 15 of construction I think is the critical point here. 16 The rule of construction -- well, there are two 17 points. First is the explicit text of the rule of 18 construction. The rule of construction was added to the 19 statute very late in the game. These provisions had been in 20 earlier versions, and at the 11th hour before passing the 21 bill this was added. It would serve no purpose except to 22 say, look, whatever else this does, it's not about 23 regulating the ethics of the practice of law. And so I have 24 to say, I mean, obviously it's true that talking about legal 25 representation does connote what attorneys do. I can even 10 1 if the word attorney appeared -- and there are many places 2 in this statute where it says attorneys must do this, 3 attorneys must do that. Even if the word attorney appeared 4 here, the rule of construction has to be given some meaning. 5 And it would be a far more difficult case if it said 6 attorney and then it said but don't construe it to apply to 7 attorneys. It doesn't quite say that. 8 In addition, the ambiguity here created by Section 9 526(d)(2) means that this Court ought to employ the canon of 10 construction if it finds it ambiguous that says that we 11 construe statutes to avoid grave constitutional problems. 12 And as I'm sure we'll discuss as we go forward, there are 13 grave constitutional problems with each of the provisions of 14 the statute. 15 If I can turn to them, I will go through them one 16 by one. 17 I should also respond, your Honor, you said 18 debtors. There is no reference to attorneys for debtors or 19 providing assistance to debtors anywhere in the statute. 20 The statute refers to assisted persons as any persons and 21 bankruptcy, you know, with certain assets and so on. And 22 bankruptcy assistance is defined to talk about assistance 23 that's given to assisted persons, including providing 24 information and advice of counsel, legal representation with 25 respect to a case, or proceeding under this title. So it's 11 1 not limited to debtors either. 2 THE COURT: I know that's another argument you 3 have about the statute, but that doesn't go to the issue 4 about whether lawyers advising debtors are covered by the 5 statute. 6 MR. RUBIN: No, I agree, your Honor. I agree. 7 That would be included if attorneys were included, certainly 8 for debtors would be included. 9 Section 526(a)(4) is the restriction on providing 10 advice to assisted persons by debt relief agencies. If, 11 indeed, a debt relief agency includes an attorney, this 12 would mark an unprecedented regulation of the 13 attorney/client relationship. The only similar regulation 14 of which we're aware is the one that was invalidated by the 15 Supreme Court in Velasquez. This would prohibit two types 16 of advice: Advice to incur debt in contemplation of 17 bankruptcy, that's the first half; and to pay an attorney 18 fee or charge, that's the second. 19 Let's deal with the first half first. The advice 20 to incur debt in contemplation of bankruptcy, that 21 restriction is a restriction on advice to engage in conduct 22 that is proper, lawful, and even in some circumstances 23 ethically required. This statute is remarkable because it 24 does not render incurring such debt unlawful, and in many 25 circumstances described in our brief it would be 12 1 appropriate. Very ordinarily bankruptcy attorneys with a 2 debtor as a client may advise borrowing money to purchase a 3 car so that the client may have reliable transportation. 4 This is in contemplation of bankruptcy. It's -- to use one 5 of the government's alleged narrow constructions, it's 6 because of bankruptcy. They would be unable to do so after 7 filing bankruptcy or it will be substantially more 8 expensive. This may permit the debtor to continue going to 9 work and obviously the other necessities of life, and may be 10 beneficial to the debtor and to creditors. Medical expenses 11 is another example of something where an attorney might well 12 counsel incurring debt in order to pay them. Domestic 13 support obligations as well. And all of these would be 14 advice because of the impending bankruptcy. 15 THE COURT: But the government argues that the in 16 contemplation of language in the statute deals with that. 17 What's your view on that? 18 MR. RUBIN: They really have taken two distinct 19 positions. The position I take them to have articulated in 20 their brief before this Court is barely in defense of this 21 statute at all. What they say is in contemplation of 22 bankruptcy means these two tiny narrow groups of debt: Debt 23 that is fraudulent, and that debt is already prohibited by 24 statute, incurring it may lead to criminal sanction, and 25 counseling is illegal under federal law. The second is what 13 1 they describe as gaming the means test. There's now a means 2 test in Section 707 for who may file for Chapter Seven 3 relief. And if one's ratio of income to debt changes in a 4 certain way one may, in certain circumstances, now fall 5 within the permissible class. And they say that it's gaming 6 the system to incur debt in order to do that. 7 Now, first of all, this is an incredibly tiny 8 group of cases that we're talking about. Over 90 percent of 9 Chapter 7 bankruptcy debtors are in a safe harbor under that 10 provision anyway. If you have below the median family 11 income of a family of your size within your state, you pass 12 the means test without -- you're not in a circumstance where 13 this might be relevant. And, of course, most debtors in 14 Chapter 7 are at that level of income or below. 15 The Court also argues, however, that there are all 16 kinds of debts that you can incur. They say you can incur 17 debt for medical expenses, you can incur debt to buy a car 18 and so on. That may bring you down below the line anyway. 19 So this is not tailored. The way this is written has 20 nothing to do with these two exceptions. It simply says to 21 incur debt in contemplation of bankruptcy. And whether in 22 contemplation means what it really means, in contemplation 23 of, that is, with the possibility in mind that you would 24 file bankruptcy, or whether it means because of bankruptcy, 25 knowing you're going to file bankruptcy and you want to 14 1 incur the debt right now, those categories are broadly over 2 inclusive that go way beyond any appropriate restriction on 3 conduct or advice. 4 THE COURT: Are you arguing that it's 5 unconstitutional on its face or as applied? 6 MR. RUBIN: It is unconstitutional on its face. 7 This is a preenforcement facial challenge to the Act. The 8 Supreme Court has been made clear as recently as earlier 9 this year in the Ayotte v. Planned Parenthood, which can be 10 found at 126 Supreme Court Reporter 91, they have made clear 11 that in a facial challenge it is appropriate for a court to 12 invalidate a statute and enjoin its application against some 13 class of cases where it would be unconstitutional. 14 THE COURT: Professor Chemerinsky seems to 15 disagree with you about that in his article. That he 16 believes that if the Supreme Court has a problem with the 17 statute it's going to be on an as applied basis rather than 18 on its face, even in light of the more recent Supreme Court 19 decisions on that. How do you feel about that? 20 MR. RUBIN: I would have to refer back to his 21 article. I think he's mistaken about that. I don't know 22 what he's saying about likelihood of how the Supreme Court 23 will act. I don't know if his article is before or after 24 the Ayotte case which, as I say, was this year. There's 25 been debate about how facial challenges should work since -- 15 1 well, essentially since Planned Parenthood v. Casey in 1982. 2 And in that case the Court said every application doesn't 3 have to be unconstitutional for a statute to be invalid on 4 its face, given the large fraction of the cases in which the 5 statute has bite, it violates the constitution. The Court 6 said that is an appropriate circumstance for facial 7 invalidation as well. So I'm very comfortable that a facial 8 challenge is appropriate here and that this Court has 9 authority to issue an injunction applied to the class of 10 attorneys. 11 This first restriction is not a restriction on 12 commercial speech. It's about attorney advice to clients, 13 but the outcome here, and I think this is an important 14 point, your Honor, does not depend on the standard of 15 review. Regulations of speech must be precisely tailored 16 whether under strict scrutiny or under the various forms of 17 intermediate scrutiny that are applicable to commercial 18 speech. This is not narrowly tailored. It's not narrowly 19 tailored for the bedrock reason that it doesn't prohibit the 20 conduct in incurring debt in contemplation of bankruptcy, it 21 incurs telling someone about it. And it is clear from cases 22 like Western States Medical and Rubin v. Coors Brewery that 23 that is not permissible. That it is narrower, a narrower 24 and more permissible regulation to regulate the conduct than 25 speech about lawful conduct. 16 1 Second, it's not tailored to any legitimate goal. 2 It's over inclusive with respect to the two circumstances 3 where the government says there's a reason for it. 4 Third, it's limited to advice to assisted persons. 5 That is, for some reason people with more wealth are 6 permitted to get this advice to incur debt, and people with 7 $150,000 or less in non-exempt assets are not. And if it's 8 bad and unlawful advice, it should be in every circumstance. 9 And fourth, it is limited to advice from those who 10 receive compensation. That is, it's not bankruptcy 11 assistance if it's done by a non-profit and the lawyer 12 working for non-profit is free to give this advice to a 13 client. If it's unethical advice, it's unethical advice. 14 And this isn't narrowly tailored to prohibit all of it. 15 THE COURT: Are all applications of that part of 16 the law unconstitutional, or are there parts that would not 17 be unconstitutional? 18 MR. RUBIN: It would not be unconstitutional if 19 this were more narrowly drawn as the statute, for example, 20 prohibiting advising a client to incur fraudulent debt. 21 That is, in fact, already unlawful and can lead to 22 non-discharge of the debt to dismissal of the petition and 23 lead to criminal sanction. And a law like that would be 24 permissible. 25 Under Casey, it is clear that in the vast majority 17 1 of cases this imposes an unconstutional burden. It's a free 2 speech case. Precision of tailoring is the key. And so 3 these violate the rights of our clients who seek to give 4 this advice in the wide range of cases where it is not 5 fraudulent, you know, and it cannot be illegal for that 6 reason. 7 THE COURT: What about Salerno? Salerno says that 8 you have to establish there are no set of circumstances 9 under which the Act would be valid for a facial challenge. 10 MR. RUBIN: I have two answers to that. One is 11 Casey itself which makes clear that at least where 12 fundamental rights are involved that is not the rule. The 13 rule is if in a large fraction of cases where it will have 14 application it is unconstutional, it's facially 15 unconstitutional. In the Casey case, for example, the 16 statute said you have to notify your husband if you're 17 having an abortion. And a substantial number of women do 18 anyway and didn't object to this. And in those cases it 19 would be constitutionally applied and the Court said that 20 doesn't matter, the question is with respect to people it 21 restrains, in a large fraction of the cases it would be an 22 unconstitutional burden and, therefore, it's 23 unconstitutional. The second answer is this is a First 24 Amendment case and there are a wide range of doctrines like 25 overbreadth doctrine that make clear if something even -- 18 1 even if our own speech were illegal and could be prohibited, 2 we would still be able to say this is an over-broad law that 3 reaches a wide range of protected content of speech and that 4 it, therefore, must be invalidated on its face. So I guess 5 my answers are two-fold to Salerno. It's inapplicable here 6 both because of the fundamental right generally, and then 7 it's clear First Amendment precedent on this. 8 The second half of the incur debt prohibition or 9 the prohibition on advice is about advice to pay an 10 attorney. That's how it's grammatically written. The 11 government says it's advice to incur debt to pay an 12 attorney. Even if it is read in that narrower way -- and in 13 their assessment so much of what the government have said 14 they flee from the statutory text itself. Even if it were 15 read in that way, advice to incur debt to hire an attorney 16 is frequently ethical. Incurring debt to pay the attorney 17 is the primary means by which Chapter 13 debtors pay their 18 attorneys. They incur debt to the attorney and it is paid 19 back through the plan that is approved by the Court. It may 20 be the only available avenue for paying an attorney. It's 21 clear that one has a constitutional right to advise someone 22 that their rights may have been violated and that they 23 should hire an attorney. And that's the holding in cases 24 like N.A.A.C.P. v. Button back in 1963, the United Mine 25 Workers case cited in our brief which applies to routine 19 1 civil litigation. This could lead to destruction of a 2 client's rights and the tailoring of this provision is 3 fatal. It prohibits the primary mechanism by which 4 attorneys are hired in Chapter 13 proceedings. 5 I should say something, too, about the claims that 6 this denies clients access to court and their protection 7 rights. This is a very interesting statute in this regard, 8 this aspect about advice to, let's take the government's 9 reading, incur debt to pay an attorney. If this applies to 10 attorneys, it denies clients access to courts. It is an 11 obstacle to them getting into court. If this is the only 12 way they can pay an attorney, it's an obstacle to them 13 finding out what their rights are. And there's a long line 14 of cases talking about cases like Christopher v. Harbury, in 15 the recent Tennessee v. Lane case that talk about this 16 aspect of the right of access to courts. That there can't 17 be an obstacle put in place to seek and to vindicate your 18 rights in court. And, of course, this also goes back to 19 Powell v. Alabama, the right to be heard, includes the right 20 to be heard by counsel. 21 Now, the equal protection piece of this I think is 22 also most interesting. I've never seen a statute like this. 23 I think it may be unique. It is clear that where the right 24 of access to courts is infringed on the basis of wealth, a 25 fundamental right is invaded and strict scrutiny applies 20 1 under the equal protection laws. This is a most interesting 2 discrimination on the basis of wealth. Most of the cases, 3 which I'll sure the Court's familiar, deal with indigent 4 people seeking an exception to a fee, a filing fee, for 5 example, or a fee for transcripts was the lead case in 6 Griffith v. Illinois. In this case these clients don't seek 7 an exception to a fee. They seek to be able to hire a 8 lawyer to represent them. They can't get a lawyer if they 9 can't get the advice to borrow money to hire one under the 10 second half of this provision on the basis of nothing more 11 than assets -- non-exempt assets beneath $150,000. And if 12 they do hire a lawyer, they don't get the same lawyer 13 everyone else gets. Everyone else's lawyer can tell them 14 you really need to buy a car and you need to do it now. And 15 the lawyers who are bound by this, if they are debt relief 16 agencies, can't give that advice. 17 THE COURT: Until now you've been arguing it's the 18 clients rights that are compromised by the statute. You're 19 also arguing it's the lawyers rights as well under 20 separation of powers and the 10th Amendment, is that right? 21 MR. RUBIN: Clients rights, I'm talking about 22 equal protection and access to courts. 23 THE COURT: But that applies to the clients, their 24 rights to access to the courts? 25 MR. RUBIN: Yes. The rights of clients to access 21 1 to courts. And the right to the equal protection rights of 2 a client, the ones who are discriminated against on the 3 basis of their wealth. 4 THE COURT: But you also briefed that the lawyers 5 have rights that are compromised by that statute as well? 6 MR. RUBIN: Well, the lawyers do have rights. 7 They have due process rights to practice their profession. 8 And an inability to advise a client to undertake an ordinary 9 way of hiring an attorney clearly interferes with that. 10 It's not a reasonable regulation of the practice of law. 11 THE COURT: But the state courts have regulated 12 the practice of law extensively for a long, long time. 13 MR. RUBIN: Of course. 14 THE COURT: Why is that different when it's the 15 federal government that does it? 16 MR. RUBIN: The difference isn't federal versus 17 state government. That's relevant to the question of is 18 there clear enough statement here by the federal government 19 that they can do. We don't contest that the government -- 20 the federal government may impose reasonable regulations on 21 the practice of law where they have the authority to do so 22 under the commerce laws, for example. If they have the 23 authority, they have the authority. 24 The argument here is that this is not a reasonable 25 regulation of the practice of law, to tell an attorney you 22 1 may not counsel your client, what you're ethically required 2 to do. To tell an attorney you may not counsel a client 3 that they should pay you through a Chapter 13 plan. That 4 these impose undue burdens on the practice of law. And 5 although the court has upheld reasonable regulation of the 6 practice of law, practice of a profession is not an ordinary 7 kind of economic enterprise. The practice of law is imbued 8 with other constitutional values. It's the way in which 9 free speech rights, rights to litigate, rights to 10 petition -- and consequently, this restriction is not like a 11 restriction that says you have to pass the bar to be a 12 lawyer, you know, you can't engage in overbearing conduct, 13 you have to be an ethical person and so on. This is an 14 unreasonable and unduly burdensome restriction. 15 THE COURT: But you're not arguing the 10th 16 Amendment then, is that right? This is reserved for the 17 states? 18 MR. RUBIN: No, I don't think there's a 10th 19 Amendment argument here. Our federalism argument is under 20 cases like United States v. Bass. It is clear that Congress 21 must speak in unmistakably clear language if they're going 22 to displace this kind of traditional regulation of state 23 medical practice, legal practice. Those are the kinds of 24 areas that are protected by that clear statement rule. And 25 we talked at the beginning about does this apply to 23 1 attorneys or not, and you made your point about legal 2 representation. There is this 526(d)(2) provision and that 3 renders this at least ambiguous enough that principles of 4 federalism requires construction not to apply to lawyers. 5 But that's the sum and substance of our federalism argument. 6 Section 528(a)(1) is an executed contract 7 provision. This is not a written contract requirement. 8 State law in Connecticut at least already requires provision 9 of written contract. And plaintiffs accept that and don't 10 contest the constitutionality of that regulation. This 11 requires a contract to be executed within five days of a 12 provision of the first information to an assisted person. 13 Even pro bono representation requires that. If it applies 14 to attorneys -- 15 THE COURT: You argue that that's impossible to 16 comply with at times, very hard to by lawyers. But the 17 government points out that violations are only for, I think, 18 intentional and negligent violations of the statute. 19 Doesn't that protect the lawyers when the attorney -- when 20 the client's not returning the document? How would the 21 attorney suffer from that? 22 MR. RUBIN: I guess I have at least two, maybe 23 three answers to that, your Honor. First of all, the 24 question of whether one was negligent in providing the 25 advice without the executed contract is something that is 24 1 going to be difficult for an attorney to determine. To play 2 it safe, the only safe thing to do is what the government in 3 fact suggests. They suggest don't give any advice unless 4 you've got the signed contract. And, indeed, as our 5 declaration evidence shows, there are attorneys who are 6 doing that now, protecting themselves in that way by simply 7 not providing this advice because it may not -- it may 8 not -- the contract may not ultimately be executed. So 9 that's the first answer. 10 Second, it is true that -- well, the second and 11 third answer, I guess. It is unlawful under the statute 12 anyway. So that's essentially a suggestion that they act 13 unlawfully but kind of cross their fingers that no one's 14 going to bring a suit saying that they can defend on the 15 grounds of negligence. And that is a cost that they suffer 16 as well. 17 Thirdly, it's not at all clear that that is the 18 only mechanism for enforcement of this provision. Under the 19 Bankruptcy Code, I think more broadly I think it's Section 20 105, the court may issue different kinds of penalties and 21 fines, disgorging the fees and so on. And if an attorney 22 has acted unlawfully, because it would be a violation, 23 negligent or not of this statute, they may not be protected 24 from that. Even if they were protected from that, at the 25 five day point no one contests that they continue to provide 25 1 information. It clearly puts a gag in place five days after 2 the first information. Many people, as we described, are 3 wary, won't sign, don't sign, can't sign. And this puts an 4 attorney in a dilemma. State ethical rules may require 5 continued representation of this client. This bans it. It 6 gags attorneys at that five day point, if not before, on the 7 basis of an act over which the attorney has no control. And 8 as long as well as Chief Justice Marshall's opinion in Pace 9 v Ware because it violates due process and because it's a 10 speech restriction it violates free speech as well. It's 11 not to any legitimate interest either. This only has bite 12 where the client wants to continue talking to the lawyer but 13 hasn't signed the contract. The client doesn't want to talk 14 to the lawyer, he doesn't have to. He can obviously always 15 fire his lawyer. He doesn't have to call him anymore. The 16 attorney has to say, I'm sorry, I can't give you any 17 information even if the contract isn't signed. And that is 18 a gag on the attorney's speech and a restriction of the 19 client's rights too. And this also, I should say, violates 20 equal protection. For some reason if you have more than 21 $150,000 in non-exempt assets you're free to continue 22 receiving that advice. 23 Section 527 contains a compelled statement of 24 requirement. Really, two of them, one at 527(a) and one at 25 527(b). These compelled statements are not routine 26 1 statements of facts about bankruptcy that may be provided to 2 give some additional information that is purely factual and 3 uncontroversial to clients. If this applies to attorneys, 4 if this applies to attorneys that disclosure is actually 5 already required by a part of the statute we don't 6 challenge, 527(a)(1). This is something different. The 7 527(a)(2) and (b) compelled statements are something 8 different. These include false and misleading statements 9 that are incomplete and inaccurate, in some cases simply 10 false. They include advice which attorneys disagree with 11 and which they would never give. Factual falsity. Section 12 527(b) says, in every case it says trustee is a court 13 official. And, of course, that's not true. Section 527(a) 14 says that in Chapter 13 you are required to calculate your 15 disposable income in accord with Section 707(b). That is 16 not true. That statement is always false. 17 The government argues here only that these 18 compelled statements can survive rational basis scrutiny. 19 This isn't commercial speech again. It's not about the 20 commercial transaction. But regardless of standard of 21 review, this 527 compelled statement is unconstitutional. 22 THE COURT: So you're saying if it is a rational 23 basis review, it's not rational. 24 MR. RUBIN: I'm saying it's a speech restriction. 25 It must be measured by any applicable standard review, 27 1 either strict scrutiny or the heightened scrutiny applicable 2 to commercial speech. It may not be rational, your Honor, 3 but we don't ask you to apply rational basis scrutiny in 4 finding that, although there are cases like that. 5 This has a broad message, if you read the 6 disclosure, we can go through it point by point or not as 7 you prefer, your Honor. 8 THE COURT: I've got it in front of me. 9 MR. RUBIN: This has a broad message, and the 10 message seems to be you needn't hire a lawyer, your case may 11 be routine. No attorney would say that at the outset of 12 representation when this is due. It would be inappropriate 13 to say that to a new client without a lot more information 14 always. This is nothing more than a government message. 15 And if one thing is clear in the First Amendment, it's the 16 government cannot conscript private individuals to deliver 17 their preferred message. This is not tailored to an 18 interest in preventing deception or providing information as 19 I've said. There's already a provision that provides 20 information about bankruptcy. It has to be given to all 21 debt relief -- by all debt relief agents and attorneys, and 22 that includes not only attorneys for debtors, attorneys for 23 creditors, family lawyers who don't file bankruptcy 24 petitions and so on, the plain language of the statute. It 25 is not accurate. And it requires providing advice with 28 1 which they disagree. And the government hasn't under the 2 requirement already under any level of heightened scrutiny, 3 hasn't any need for these disclosure. 4 Finally, there's Section 528(a)(3) and (a)(4). 5 These are compelled statements in advertising. The Supreme 6 Court has made clear that to compel speech is as bad as to 7 sensor it. Here, the compelled statement is we are a debt 8 relief agency. We help people file for bankruptcy relief 9 under the Bankruptcy Code. There is no case in which adding 10 that phrase to an advertisement will make it less 11 misleading. Debt relief agency may be a term of art now in 12 the leather bound volumes of the United States Code, but as 13 Zauderer makes clear, the question is what does it mean to 14 lay people. We are a debt relief agency is inherently 15 confusing to people in an advertisement for an attorney. 16 What does it mean? I don't know what it means. Agency. 17 You're an agency. Are you an agency of the government? 18 Whose agent are you? Are you -- I mean, are you like a 19 social service agency? What exactly are you? It's 20 inherently confusing. And it blurs the difference between 21 lawyers and petition preparers and anyone else who's 22 required as a debt relief agency if attorneys are also debt 23 relief agencies. It blurs the difference between them. If 24 you open the phone book and there's two different ads, three 25 different ads for all different specialities, and they all 29 1 say we're a debt relief agency, it will create the 2 impression that they're all essentially interchangeable for 3 meeting your needs. 4 THE COURT: Are you arguing that this disclosure 5 is required of lawyers who don't represent debtors as well? 6 I know there's an argument there that it applies to people 7 representing creditors, landlords. And so those law firms 8 must now include that disclosure in their advertisement as 9 well. Are you still arguing that? 10 MR. RUBIN: Yes, that's clearly true, your Honor. 11 As with Section 527, this compelled disclosure applies to 12 all debt relief agencies that includes those who provide 13 assistance to creditors having to do with bankruptcy 14 proceedings. Commercial Law League, of course, is Amicus 15 here just because of that. It also, Attorney Roisman, who 16 is one the plaintiffs here, has a family law practice. He 17 doesn't represent debtors in bankruptcy, but he does counsel 18 them and advise them with respect to the way they're already 19 filed bankruptcy or at some point filed bankruptcy may 20 affect their rights and obligations. All these people would 21 have to include this. So this is like the compelled 22 statement requirement, this is over inclusive and 23 unconstitutional on that ground alone. But even with 24 respect to attorneys who do, in fact, represent debtors in 25 bankruptcy proceeding, this is impermissible. 30 1 THE COURT: Is it commercial speech? 2 MR. RUBIN: It is not commercial speech, no. We 3 are a debt relief agency is not commercial speech. It 4 certainly doesn't propose a commercial transaction and it 5 doesn't -- it isn't intimately linked with selling the goods 6 or services the person is selling. I think it's a political 7 statement. We are a debt relief agency. I don't know why 8 it's included. And, in fact, there's another provision here 9 that says you already have to say that the services you're 10 providing are with respect to bankruptcy. So this is not 11 commercial speech. But regardless of standard of review, 12 even if it's commercial speech, it can't meet the 13 intermediate scrutiny test. It doesn't directly further the 14 interest and prevention of the section, both because there 15 is simply no evidence that anyone's ever been misled by an 16 ad that doesn't say we are a debt relief agency. That would 17 not be an intentionally misleading ad, and there's no 18 evidence of any problem with such ads that's been put before 19 the Court. And as the Court said in Ibanez just a few years 20 ago, the burden on the government in a disclosure 21 circumstance such as this is not slight to show a need for 22 this. 23 THE COURT: But the disclosure is not just that we 24 are a debt relief agency, there's other parts to it, isn't 25 it? We help people file for bankruptcy relief under the 31 1 Bankruptcy Code, isn't that really the core of the 2 disclosure? Isn't that what Congress had in mind, to make 3 sure that people knew when they were going to see these 4 lawyers that bankruptcy was a possibility on the horizon? 5 MR. RUBIN: I guess I'd say three things about 6 that. To begin with, the statute doesn't require the 7 statement we help people file for bankruptcy by itself. It 8 requires this two sentence statement or something 9 substantially similar. I think one would be violating the 10 statute to cross out the first sentence and just publish the 11 second one. And, indeed, there's another provision here 12 also that says, as I mentioned, it's mentioned in our 13 opening brief, another provision that says you have to say 14 that your services are related to bankruptcy. Even that 15 second one, we help you file for bankruptcy under the 16 Bankruptcy Code I think would be unconstitutional because of 17 the absence of any evidence in the record that there's a 18 problem with statutes -- advertisements that don't say that. 19 That there's an actual problem with people being misled by 20 ads that don't say we help people file for bankruptcy. 21 THE COURT: But there's testimony at the hearings 22 that the government's presented where bankruptcy judges, I 23 think maybe Senator Sessions as well, and some other people 24 said one of the evils here is that people go to see lawyers 25 thinking that they're going to get their debt discharged 32 1 without having to go into bankruptcy, and then they end up 2 in Bankruptcy Court and within 15 minutes they're 3 discharged. I don't know whether that's true or not, but 4 that's the evil the comments were addressing. 5 MR. RUBIN: I think a close examination of the 6 legislative history they present demonstrates that there was 7 no testimony like what you describe. There was certainly 8 testimony that there were some problems with attorneys 9 related to bankruptcy. Senator Sessions, for example, has 10 this statement, I don't know, unscrupulous lawyers. That is 11 an apparent -- if you look, it's talking about why 12 requiring -- and this is now required by another provision 13 of the code that was just added, why requiring credit 14 counseling before someone can file for bankruptcy at this 15 point in place. Beyond that, bankruptcy judges, Judge 16 Keller testified that there's a problem with reaffirmation 17 of debt being pushed on debtors by creditors, but she didn't 18 talk about any problem with advertising. 19 There is no evidence that anyone has ever been 20 misled. There are some descriptions of ads that are 21 secondhand. There are no ads in the record. One person, a 22 creditor said some attorneys advertise that they offer 23 relief from debt, they don't even mention bankruptcy. He 24 went on to say, I doubt if they're really telling their 25 clients everything once they come in the door. 33 1 THE COURT: You're familiar, very familiar with 2 their brief, but page nine of the government's brief they 3 say Dean Schaffer, Chairman of the Pennsylvania Retailers 4 Association, testified that some lawyers run advertisements 5 promising to make individual debts disappear without even 6 mentioning bankruptcy. Some advertisers promising debt 7 relief may actually use bankruptcy as a method for such 8 relief. There's numerous references on page nine and ten. 9 That's where the Senator Sessions comment is. In many 10 instances the deceptive and fraudulent advertising practice 11 of bankruptcy mills lure consumers into bankruptcy 12 unnecessarily. 13 MR. RUBIN: Well, let me say -- I guess I'd say 14 several things about that. Those are not complaints about 15 deceptive ads by attorneys that promise debt relief and then 16 don't -- and then the person doesn't realize that's what 17 they're doing. 18 THE COURT: A study conducted by Tahira K. Hira, 19 Professor, Iowa State, revealed that the two most common 20 complaints of people who had their debts discharged in the 21 bankruptcy proceeding were lack of information and a concern 22 about the practices of their lawyers. 23 MR. RUBIN: I agree. But these are generic 24 complaints. Actually, in that study there's talk about what 25 conduct they actually had in mind and they're talking about 34 1 overcharging, they're not telling them what's it going to 2 cost. There's a lot of complaints about not paying enough 3 attention to them, treatment like cattle and so on. But 4 there isn't literally a piece of evidence where someone says 5 here's an ad, someone was misled by this ad. They didn't 6 know what they were going in for was bankruptcy assistance. 7 I mean, that's the point. It's not that generic complaints 8 about attorneys may be addressed through a compelled speech 9 requirement that isn't tailored to the complaints. And 10 there is no evidence here -- there's evidence of one person 11 saying that there are such ads, but there's no evidence of 12 anyone ever being misled. And the ads that they show, this 13 is covered in our reply brief in some measure, the ads that 14 they put forward actually say in them this is about 15 bankruptcy. 16 Now, this statute says these two sentences, we are 17 a debt relief agency, we help people file for bankruptcy 18 relief under the Bankruptcy Code always have to be included. 19 It's inadequately tailored both because it applies to, for 20 example, lawyers and because it isn't limited to ads that 21 didn't have the word bankruptcy in them anyway. It applies 22 to a wide range of ads, including all ads indicating the 23 debt relief agency provides assistance with respect to 24 credit defaults, mortgage foreclosures, eviction 25 proceedings. It's not properly tailored to address any 35 1 problem. But there is no evidence in the record of a 2 problem with ads actually deceiving anyone. There are 3 people who don't like them saying we don't like this, 4 creditors primarily saying we don't like these ads, but 5 there's no evidence. We have other cases where Ibanez says 6 that it's not a slight burden. And Edenfield v. Fane (ph) 7 says the government has to show real and genuine problem 8 before they impose some requirement like this. This is 9 misleading to begin with so it is impermissible even to 10 solve the problem your Honor is describing. But there needs 11 to be more evidence here. And the Court has made clear that 12 merely antidotal evidence isn't enough. They did uphold the 13 restriction in Florida Bar v. Went For It where there were 14 studies showing the impact of the challenged action or the 15 action to which there was a restriction put in place, the 16 impact on people of solicitation letters and so on. In the 17 absence of that kind of record, the government isn't 18 entitled to just say we think it would be a good idea if you 19 said we are a debt relief agency, we help people file for 20 bankruptcy under the Bankruptcy Code. 21 As I've said before, in any event, because it 22 includes this first sentence, it isn't tailored to the 23 problem you've described anyway. A properly tailored 24 statement might be permissible, depending what evidence the 25 government could marshal. But if this just said you have to 36 1 mention bankruptcy in your ads, your title is bankruptcy 2 addistance, that would be a far different law from this one 3 which requires this inherently misleading and profoundly 4 troubling to attorneys who practice in this field. 5 THE COURT: And tell me why you think the Zauderer 6 test doesn't apply, the rational basis test apply to this. 7 MR. RUBINZ: Well, I guess I'd say two things. 8 First of all, Zauderer is not a rational basis case. This 9 is a mistake the government makes in a couple of places 10 throughout its brief. The Zauderer test is virtually the 11 same as the Central Hudson test except for the final 12 tailoring prong. And the way we know that, among other 13 things, aside from what it says, if you look at the Ibanez 14 case in the Supreme Court, they talked about the need to 15 show a genuine and real problem with evidence before a 16 disclosure can be required, even a factual disclosure. So 17 it is an intermediate scrutiny test and this can't survive 18 it, but that only applies to purely factual and 19 uncontroversial statements. And you can see that in the 2nd 20 Circuit there are these two cases, NEMA and IDFA. IDFA is a 21 case in Vermont about whether milk containers could be 22 required to say on them made with bovine growth hormone. 23 And the Court there applied the Central Hudson test to that 24 compel disclosure saying this isn't purely factual and 25 uncontroversial statement. Later in the NEMA case, they say 37 1 if it's purely factual and controversial, you apply it but. 2 They made it clear there you need a substantial interest. 3 Ibanez makes clear that it has to be directly and materially 4 advanced. So even if Zauderer were applied, this can't meet 5 that standard. 6 I think I'm out of time, your Honor. 7 THE COURT: I'll give you a little more time if 8 you want because I asked you a bunch of questions. I know 9 you're going to come back. 10 MR. RUBIN: I think we've addressed it. The only 11 other point is the due process practice of law. We 12 discussed that matter, your Honor. 13 THE COURT: Let me just take a look at my notes, 14 see if there's anything I want to ask you. I think that's 15 it. 16 Thank you, Mr. Rubin. 17 Ms. Sowles, are you going to argue? 18 MS. SOWLES: Sure. 19 The focus of this case is actually on the debt 20 relief provisions which the government and Congress 21 described as professional standards to be placed on consumer 22 -- attorneys for consumer debtors, small consumer debtors to 23 protect them. And basically what they're challenging is 24 basically four of those standards: 25 The first, the restrictions on advising a consumer 38 1 debtor to incur further debt in contemplation of bankruptcy; 2 Second, that the requirement that they provide 3 certain written disclosures; 4 Third, the requirement they insert a two line 5 statement in advertising touting bankruptcy assistance; and 6 Finally, the requirement that debt relief agency 7 execute contracts outlining their fees and services. 8 Plaintiffs have not challenged other aspects of 9 these standards, particularly 526(a)(1) through (3). 10 In this case the plaintiff, in order to prevail on 11 a motion for preliminary injunction, they must show both 12 substantial likelihood of success, plus irreparable injury. 13 We feel in this case they have done neither. The first 14 question, though, I think, is before we get to the 15 constitutional question, it's important to sort of separate 16 out exactly who do these standards apply to. And in this 17 case, I think it's pretty clear that when you read it 18 there's no question it applies to attorneys, because a debt 19 relief agency is described as a person who provides 20 bankruptcy assistance, and bankruptcy assistance includes 21 providing information, advice, counsel and legal 22 representation. So it clearly covers attorneys. In fact, 23 if you look at the disclosure provisions themselves which 24 are part of that, that attorneys are mentioned in three 25 places. It's important information from attorneys and 39 1 bankruptcy preparers. Attorneys and bankruptcy preparers 2 are required to give you written contracts. Again, these 3 are all entailed back to the fact that attorneys are 4 covered. 5 THE COURT: What about Judge Davis' opinion about 6 that in Georgia? 7 MS. SOWLES: That was a case in which he issued it 8 sua sponte on October 17th, the day it went into effect. 9 And I think it's actually dated or the time is like 9 or 10 10 or something, and there was not actually a motion in front 11 of him. It was something that was merely issued by himself 12 sua sponte and is being appealed to the District Court and 13 is in front of the District Court in that case. 14 THE COURT: Where is it in the District Court, has 15 it been argued yet? 16 MS. SOWLES: No. It's been fully briefed, but no 17 argument. The only thing that they've tried to sort of hang 18 their hat on as to why attorneys might not be covered is 11 19 U.S.C. 526(d)(2). And they say that, again, that they 20 talked about it doesn't preempt the qualifications for 21 attorneys. But qualifications and ethical standards are 22 quite different. They're two types of things. The 23 standards here are not purporting and do not preempt the 24 qualifications for practicing law. They try to sort of 25 blend the two that are saying in certain cases some states 40 1 in certain cases may say that a person, because they 2 violated certain ethical standards may, in a particular 3 circumstance because it's severe or grievance, like in that 4 particular case a person had been found to have committed a 5 felony, that that person may be disbarred. But in that case 6 if the state chooses to apply this standard, violation of 7 the standard in the bar of someone, that's something that 8 the state is imposing that as a qualification. The federal 9 government isn't imposing that as a qualification. They're 10 just two completely different things. It's basically the 11 standards and qualifications. It's clear from 526(d)(1) 12 that it does preempt its standards to the extent that 13 they're inconsistent, but it is not intended to preempt the 14 qualifications. 15 They've also, if you look at the legislative 16 history, the other aspect of this is exactly -- they try to 17 say, well, if attorneys are covered, then we all must be 18 covered. In fact, it might be included attorneys for 19 creditors, attorneys that are family lawyers. And it 20 doesn't. Again, if you look at the entire ad, which you 21 have to do and you can't just look at particular provisions, 22 it's clear the other provision of the Act explain that it's 23 directed at attorneys for consumer debtors. 528, the 24 language that they must insert in the advertising says we 25 are a debt relief agency. We help people file for 41 1 bankruptcy. Clearly that's covered. 2 If you look at the other aspects as in the finding 3 the disclosures themselves, again, they're talking about 4 people that are thinking about filing petitions for 5 bankruptcy. They're not talking about creditors. And so if 6 you look at the type of advice that's given, again, it's 7 talking about incurring debt in contemplation of filing for 8 bankruptcy. So, again, it's clear that it's directed at 9 consumer debtors. In fact, if you go to the House Report 10 again, it describes these as standards for attorneys 11 representing consumer debtors. In their reply brief they 12 try to sort of dismiss that and say, well, we really think 13 that maybe what Congress really intended when they described 14 debt was not the standard for debt relief agencies, but 15 instead they were describing the restrictions and the means 16 test for applying Rule 911, or maybe they were also 17 referring to the fact that courts can now consider whether 18 you have a certification as a factor in determining the 19 level or reasonableness of your attorney fees. But I think 20 the dispute that that is really sort of wishful thinking on 21 their part, because if you look at the Act itself, the 22 statement was made under the section consumer protection. 23 And the debt relief provisions are in Title II of the Act. 24 And Title II of the Act is described as Consumer Protection. 25 The provisions that they're describing, as far as the 42 1 applying 9011, those are under Title I which is called Need 2 Phase, and the provision that they talked about, you konw, 3 viewing credentials as a factor in applying to the level of 4 attorneys fees, that's under Title IV which is called 5 General and Small Business Bankruptcy Provisions. 6 So, you know, then if you look at the provision, 7 go on and actually read it in the House Report, it not only 8 describes the standard but mentions the fact that there's 9 disclosure requirements. So it's clear that they're 10 referring to this. And I think that it's clear that, you 11 know, when you look at the Act, and look at it as a whole, 12 it's clear that these debt relief provisions applies to 13 attorneys that represent consumer debtors. 14 Now, the reason that they say, well, it says 15 assisted persons. It doesn't say consumer debtor. The 16 reason for that is clear. Because in the Bankruptcy Act the 17 term debtor actually has a legal meaning. It only refers to 18 a person that actually has filed a case, even though we 19 refer to debtors as people who have accumulated debts and 20 are thinking about it. That for the actual purposes of the 21 Bankruptcy Act they couldn't define it as debtor, because 22 that would basically mean that it would only apply to a 23 person after they've already filed. And the provisions here 24 are already geared to a person that's prior to the filing of 25 bankruptcy. So that's why assisted persons is defined as it 43 1 is and doesn't use the word debtor. 2 So let's now get to the sort of second issue. And 3 the second issue is are these provisions constitutional. 4 And the first provision, I think, the main sort of challenge 5 here is to 526(a)(4). And that's the restriction on 6 providing advice to incur further debt in contemplation of 7 bankruptcy. And the way that the government has interpreted 8 that is it doesn't say you cannot advise a person to incur 9 any debt prior to filing bankruptcy, or you have a person 10 contemplating bankruptcy cannot file any debt. Instead, 11 it's advice to incur debt in contemplation of bankruptcy. 12 In contemplation of bankruptcy, that is a term that's been 13 sort of similar in the tax codes for gifts. And the way 14 that the Supreme Court has interpreted that in United States 15 v. Wells is what is the motivational factor for incurring 16 the debt. And what this is is basically saying that a 17 person is incurring the debt because of bankruptcy. That 18 they're doing it somehow to game the system, it's 19 fraudulent, or because you're filing it. And where they've 20 listed various examples. They said, well, you might want to 21 incur a debt because you need medical needs, or you need to 22 repay support payments, or that you may have a car that is 23 not dependable and you need to replace it. Again, there's 24 nothing preventing an attorney from advising that -- giving 25 that advice because those are things you're not incurring 44 1 the debt for medical expenses because you're filing for 2 bankruptcy, you're incurring the debt because you need 3 medical assistance or medical help. 4 THE COURT: But couldn't it be argued that it is 5 in contemplation of bankruptcy, that you may end up in 6 bankruptcy and you need to take care of these situations, 7 getting a car, paying the medical expenses, because you're 8 heading down that road and that it is encompassed by that 9 language but it does not violate -- the principal reason 10 behind this language seems to me is the adjustment to the 11 means test for people who game the system, right? But isn't 12 Mr. Rubin right, though, there are situations where the 13 lawyers will be very reluctant to give that advice because 14 it seems to be within the language of in contemplation of 15 it. It doesn't say to game the means test. It says in 16 contemplation of it. Sure, I may be contemplating 17 bankruptcy, that's why I have to replace this car, so I can 18 drive to work, and I don't have to repay these medical bills 19 because there's going to be a problem. Isn't it on here 20 inclusive in that respect? 21 MS. SOWLES: If you look at it, you're doing it 22 because of the thing. You could say, well, you're going to 23 get the replacement car because you're also going into 24 bankruptcy, but you're not doing it solely because you're 25 going into bankruptcy or you're trying to game the system. 45 1 THE COURT: But that's not what the statute says, 2 that language solely because of or something like that, it 3 might be a better fit. It says in contemplation of. 4 MS. SOWLES: We feel the proper interpretation of 5 in contemplation is you're doing it because of the 6 bankruptcy and that's the primary motivational factor, that 7 you're doing it to somehow get around the system. And 8 that's, again, you know, how we're interpreting. If you're 9 looking at again the focus -- the reason for this is that 10 they say well -- they seem to say, well -- they even admit 11 with regard to fraudulent that that's no problem. That 12 that's covered. But there's also this problem about getting 13 around the means system or otherwise abuse of debts. 14 Now, those are debts that are not sort of illegal 15 per se in the sense that you won't go to jail necessarily 16 for them, but you will get your petition for bankruptcy 17 kicked out by doing such things. And the problem is, and 18 that's again why it's called a consumer protection, is that 19 a debtor relying on that advice to, well, you're not quite 20 under the means test, but if you go out and buy a new car 21 and maybe if you buy a little fancier car you'll get under 22 the means test. That in those cases the person then will, 23 you know, be filing for bankruptcy and they run the risk 24 that that could be dismissed because it's been found to be 25 abusive. And that then they're hurt because their petition 46 1 is dismissed that, you know, they've suffered a harm. And 2 this is protecting them by allowing them to, first of all, 3 it's a guard against it by telling the attorneys that they 4 shouldn't be allowing -- advising people to do things that 5 are abusive, but it also protects the person who erroneously 6 relied on that advice by giving them an enforcement 7 mechanism against their attorney. 8 And if you look at the various legislative 9 history, it was clear that that was one of the concerns that 10 repeatedly, almost everybody who spoke against the means 11 test, two federal bankruptcy judges, the Consumer Federation 12 itself, spoke about the fact the means test could be 13 manipulated. And that was, again, a concern. And this is 14 designed to prevent that. 15 THE COURT: Is it content neutral? 16 MS. SOWLES: I guess the problem is that under the 17 Gentile standards it doesn't need to be content neutral 18 because what it is it's protecting -- it's an ethical 19 standard, and the standard is not strict scrutiny, but is to 20 basically protect the system by protecting, first of all, 21 the debtor from having bad advice that could come back to 22 haunt him. It's protecting the creditors from these abusive 23 practices. It's also protecting the system. Because the 24 system it would, in order to weed out these abusive 25 practices, would be incurring further costs. So it's very 47 1 much like Gentile test. 2 Now, there's a difference, of course, in the 3 Gentile test. They try to say, well, that would involve a 4 criminal matter and, therefore, it's somehow different. But 5 if you look at the basic line, again, it's protecting the 6 judicial system the same. They've also said that if it's 7 interpreted to apply to just, you know, fraudulent debt, 8 abusive practices, this is really narrow, and that it -- and 9 then therefore it's not a problem. But it seems like that 10 sort of defeats their constitutional problem because it is 11 narrowly confined to those cases. And that's exactly what 12 the Gentile provision said, is that the attorneys do, 13 because of their role in front of the courts and in 14 protecting the judicial system, have duties not only for 15 clients but to the judicial system itself. And in this case 16 this is exactly what this provision does. It's protecting 17 the judicial system as well as protecting consumer debtors 18 from advice that could come back to haunt them. 19 Getting to the second restriction and, that is, 20 the disclosure provisions, the written disclosures. We've 21 heard a lot about the fact they said that these are 22 inaccurate, but their bottom line seems to be -- 23 THE COURT: Are they inaccurate? 24 MS. SOWLES: No, they aren't. 25 THE COURT: He points out four or five parts of 48 1 the disclosure that he says are just not true. 2 MS. SOWLES: Again, I think it's a problem of 3 misreading it and misreading that. They say this is saying 4 that -- requiring attorneys to tell them that attorneys are 5 not needed. It doesn't say that. What it says, that under 6 the law you can represent yourself, you can hire an attorney 7 to represent you, or you can get some help from localities, 8 from bankruptcy petition preparers who are not attorneys. 9 And then it goes on to say that, you know, only attorneys 10 can give you legal advice. It also -- there's nothing in 11 here saying that you -- it's not advisable to have an 12 attorney. Nothing that's prohibiting an attorney from 13 telling a client, that's true. You might be able to 14 under -- legally you don't need an attorney to go to court, 15 but it's advisable to do it. It doesn't say that attorneys 16 are not advisable. It's merely setting out the fact that 17 legally to file a petition for bankruptcy you can file it 18 pro se, you can get the help of a bankruptcy petitioner, or 19 you can hire an attorney. There's nothing here saying that 20 all three should be done or that it's not legally advisable 21 to have an attorney. They're just really misreading it. 22 They're also -- in fact, then they say that, again, they 23 stress the fact that many of the cases may be routine. But, 24 again, there's nothing saying that even in a routine case a 25 attorney may not be advisable. In fact, it says the 49 1 opposite. If you go on to the next sentence, it says before 2 filing a bankruptcy case either you or your attorney should 3 analyze your eligibility for the different forms of 4 bankruptcy relief under the Bankruptcy Code and which form 5 of relief is most likely to be beneficial to you. 6 So, again, it's contemplating that, you know, you 7 should determine level of services that you will need. So 8 it's, again, it's not untruthful. They're merely sort of 9 reading things into it that aren't there. It doesn't say 10 that you don't need an attorney. It just says that as a 11 legal option, one of the legal options is that you can 12 represent yourself, you can go to a bankruptcy petitioner. 13 But then it goes on to say that only attorneys can provide 14 legal advice. 15 The other thing that they sort of give an example 16 of sort of an inaccuracy is that it says you're required to 17 pay their filing fee before filing. Again, they say, well, 18 that's not accurate because in certain circumstances it can 19 be waived. But, again, there's nothing preventing the 20 attorney from orally advising them, giving written 21 information on that. In fact, under 527 they actually -- 22 they can modify it in certain circumstances. So if they 23 would want to put in language about waiver, there's nothing 24 stopping them from doing that in their written statement. 25 They also seem to be troubled by the fact that and 50 1 when they talk about Chapter 13 it says three to five years. 2 And they say, well, in some cases it may be less than three 3 years. Again, there's nothing preventing the attorney from 4 advising them of that, that this is clearly just an 5 informational disclosure, just like the informational 6 disclosure given in Casey that was describing the various 7 options that a person could do and give them basic 8 information. The reason for this, again, goes back to the 9 legislative history. There was testimony that the attorneys 10 often were not telling people about the different types of 11 chapters. They didn't really understand, for instance, as 12 far as reaffirmation that creditors may be approaching them 13 at the initial creditors meeting. This warns them of that. 14 They say at the initial creditors meeting you may be 15 approached by creditors asking you to reaffirm some of your 16 loans. 17 So Congress heard the concerns. They heard the 18 testimony, the comments that people were having as far as 19 attorneys, and this is designed to prevent that. It's 20 geared to the fact that it's informing people that just the 21 minimum sort of information that the person needs. It's not 22 the sealing. The attorneys can go on and, in fact, 23 hopefully will go on and explain more details. But it's 24 assuring at the very minimum the client has some basic 25 information to work with. And that under Casey this clearly 51 1 is reasonable and should be upheld. 2 With regard to the advertising requirement. 3 Again, the advertising requirement here is really just say 4 we are a debt relief agency, we help people file for 5 bankruptcy. Under the law, they are a debt relief agency. 6 They can't really quarrel with the fact that that's 7 inaccurate. They may not like the law, but the fact is they 8 are a debt relief agency. And the second sentence, we help 9 people file for bankruptcy relief is clearly true. And so 10 it's under the Zauderer test, again, they talk about the 11 fact that this doesn't meet the Central Hudson test, but 12 they're again applying the wrong standard that the Second 13 Circuit recognized in the National Electric case, the 14 Zauderer test for disclosure is much more lenient. You just 15 need to have a legitimate government interest. And in this 16 case there was a legitimate government interest and, that 17 is, that people were being misled, there were deceptive ads 18 out there. 19 There was record in the legislative history of 20 these deceptive ads. The FTC, in fact, issued a consumer 21 alert warning people that there were ads out there promising 22 sort of debt consolidation and not telling people that there 23 was actually what they're really talking about is bankruptcy 24 relief. They also say that that there wasn't any, you know, 25 even any examples given in the legislative history. But, 52 1 again, I was sort of puzzled by this because one of the 2 examples they criticized us for is they said that your 3 creditor that you cited didn't even mention the word 4 advertising, that he simply said that some of his people 5 thought that they were -- they didn't realize that they had 6 filed for bankruptcy, but you didn't link it to advertising. 7 But actually his testimony at page 122 of Exhibit D is quite 8 clear on that. He talks about the example that there was 9 one of his customers, was actually a friend of his that came 10 in and said, you know, I consolidated my debts, I'm going to 11 get back on track. I'm going to get back on track. And he 12 says -- and so then he said and I would like to say come to 13 my office, let me show you something. They didn't even 14 realize that they had filed. They were being told that 15 there was debt consolidation. It's in our phone books, it's 16 on the TV screens, it's in our newspapers, advertising to 17 debt consolidation. If it's a horse, call it a horse. He 18 clearly did mention advertising. 19 THE COURT: What about, though, the argument that 20 it applies to people who are not advising debtors? 21 MS. SOWLES: Again, it doesn't do that. Because 22 it only applies to a debt relief agency. And debt relief 23 agency is recognized as the people that are advising 24 consumer debtors. 25 THE COURT: But couldn't a creditor or a landlord 53 1 be an assisted person under that definition? 2 MS. SOWLES: They could be assist -- again, that 3 gets back you have to look at the entire Act. And that if 4 you interpret debt relief agency, it's clear that you're 5 talking about the person that's getting the bankruptcy 6 relief, not about creditors. What they're trying to do when 7 they're saying, well, it could be interpreted to include 8 creditors, they're looking at sort of just one provision by 9 itself. If you look at the various debt relief definitions, 10 the assisted persons, the debt relief agency, the definition 11 of bankruptcy assistant, and you look at that and each of 12 that provisions itself, 526 through 528, it's clear they're 13 talking about consumer debtor. In fact, the statement 14 itself says we help people file for bankruptcy. And then 15 the other provision talking about in 528(b) where they say 16 that it also applies to, you know, again credit default, 17 eviction proceedings. Again, you have to be a debt relief 18 agency. So if you're an attorney that represent landlords 19 and you're talking about, you know, we can help you, you 20 know, in eviction proceedings, that couldn't be covered 21 because they wouldn't be a debt relief agency. What it's 22 designed to do is cover, again, the person that's helping 23 consumers file for bankruptcy relief but is not directly 24 advertising the fact that they're providing bankruptcy 25 assistance. And that's why those other provisions are 54 1 there. 2 Getting to the final provision that they're 3 challenging, and that is the contract provision. And they 4 say that they feel like there's a problem because people are 5 not returning or refusing to sign it within five days. But, 6 again, under the enforcement provision that there's two 7 problems with that. First of all, that is, under the 8 enforcement provisions you're only liable if you negligently 9 or intentionally violate it. If you attempt to send it to 10 the person, you give it to the person and they simply refuse 11 to sign it for some reason, the only person that can enforce 12 it is really the debtor themselves. So, they can't really 13 say you intentionally or negligently didn't do it when they 14 were the ones who didn't sign it or return it in five days. 15 They say, well, in their brief, they mention the fact the 16 state could present the 526 also allows the state to bring 17 enforcement proceedings. But that's only with respect to 18 section 526 provision, not the 517 or 528. And this was in 19 528. And again, the reason for this contract provision was 20 clear. In fact, even some of the examples that plaintiffs 21 attorney cited, they said, well, there are problems in the 22 legislative history and one of the problems is as far as 23 fees and not telling people about fees. This is exactly 24 what it's designed to do, is to try to help people 25 understand upfront what the fees are and what the services 55 1 are. That's exactly like Connecticut did when they're 2 requiring a written statement of your services and what the 3 fees are. It's designed to help them. 4 The other aspect that I'd like to address briefly 5 is the fact that he said, well, they're saying this only 6 applies to the small consumer debtor. Isn't this, 7 therefore, it discriminates against them. It doesn't 8 discriminate against them. Instead, it provides them 9 affirmative relief. It's providing them more consumer 10 protection. The reason for that is it was viewed that the 11 smaller consumer debtor would be the one that may not be as 12 experienced with attorneys and, therefore, needs this 13 special protection. So that's why it's not discriminated 14 against them, it's providing special protection. 15 So I think that it's pretty clear that these 16 provisions, when you look at them, when you look at them as 17 a package, it only applies to the attorneys that are 18 representing small consumer debtors. And when you look at 19 each of the provisions, they do not violate the 20 Constitution. 21 With respect to the first one, restriction on 22 advice, that that should be upheld under Gentile. The 23 restrictions on disclosures, again, those are accurate 24 informational things. They're just setting a floor, you 25 know, sort of minimum things that are required. And that 56 1 those should be upheld under Casey. And that the 2 advertising requirements are clear that those are, again, 3 informational disclosures and aren't judged under the 4 Central Hudson but under Zauderer. 5 THE COURT: Thank you. 6 Mr. Rubin, you wanted to add a few things? 7 MR. RUBIN: Yes, thank you, your Honor. 8 THE COURT: So did she convince you? 9 MR. RUBIN: No, your Honor, I'm afraid not. 10 I guess I'll just briefly address what Ms. Sowles 11 said about each of the provisions. 12 With respect to Section 526, we have no problem 13 with a properly tailored law. This law is dramatically over 14 inclusive and restricts attorneys speech. It's content 15 based restriction on attorneys speech and not like Gentile 16 which is completely inapposite. That was a criminal defense 17 lawyer, after an indictment she was holding a press 18 conference and talking about a case. That's a free press 19 fair trial case. This is nothing like that. This is a 20 restriction on core protected speech, the advice, 21 confidential advice that an attorney gives to his or her 22 client. 23 Ms. Sowles said nothing in defense of the 24 restriction on the First Amendment violative restriction on 25 advising an attorney to pay -- advising a client to pay an 57 1 attorney or to incur debt to pay an attorney. 2 With respect to the compelled statement 3 requirements of Section 527(b). First of all, we do indeed 4 challenge Section 527(a). We talked about it a little bit 5 about during my initial presentation. She, for some reason, 6 she says we don't, but it's in our briefs and complaint. 7 This statement, I mean -- 8 THE COURT: Can we just go back to Gentile, 9 though. Gentile was, the bar rule that applied there was 10 void from vagueness. That's what the Supreme Court -- 11 MR. RUBIN: Yes, the ultimate holding there is 12 void from vagueness. There's a long discussion in -- 13 there's two opinions of the Court. Chief Justice Rehnquist 14 also gets five votes for two sections of his opinion, but 15 you are absolutely correct, your Honor, ultimately that is 16 dictum, the discussion in Chief Justice Rehnquist's opinion 17 where he says the reason he would uphold the substantial 18 likelihood of prejudice test was because it met some kind of 19 balancing test. But even that case said, these are all 20 balancing tests, the question is how aggressive a balancing 21 test. And there's every difference in the world between a 22 criminal defense attorney holding a press conference about a 23 pending trial in which the person has already been indicted, 24 risking all that infection of the jury pool and so on and 25 the likelihood of a fair trial and telling an attorney what 58 1 he or she may or may not counsel his client that's lawful 2 and proper and ethically required. 3 As I say, the only other case anything like this 4 is the Velasquez case. 5 Section 527 -- 6 THE COURT: But Velasquez was much more political 7 in nature, though, wasn't it, not being able to challenge 8 the welfare regulations in statutes? Isn't that much more 9 content based than this kind of a situation? 10 MR. RUBIN: I think they are both content based, 11 your Honor. And I think it's clear -- a number of things 12 are clear. The Court has long said that merely because 13 something is not fundamentally political or religious, this 14 is actually an objection that's raised in the government's 15 brief, political or religious speech. This is protected 16 speech. It's clearly protected under cases like Velasquez 17 and NAACP v. Button, United Mine Workers. It's not just 18 that it's a political case, it's that advising someone about 19 their legal rights is a precious and protected aspect of 20 speech. 21 It also has separation of powers implications 22 because the cases that are presented to courts will be 23 different if the client doesn't receive the appropriate and 24 ethical advice. Ultimately it's the same. And Velasquez 25 talks about the First Amendment issue there, the legal 59 1 service prohibition restriction working through the 2 mechanism, preventing certain attorney advice being given to 3 clients. So I agree that that happens to be a more 4 political case, but you can also see a kind of -- NAACP v. 5 Button is a good analogy. That's a case where it was an 6 NAACP litigation question in a southern state in 1963, but 7 the Court subsequently said that's not what it's about, it's 8 not that it was a really important case of political moment, 9 it's that it's advice to hire a lawyer and to get an 10 attorney as to what your legal rights are. Those are 11 precious rights. Zauderer itself of course is not -- is 12 primarily a case in which a restriction on advertising the 13 Dalcon Shield, the availability of an attorney to represent 14 a client in a Dalcon Shield case was struck down. The Court 15 there said this is in a commercial speech context. It was 16 an advertisement saying I represent some people in Dalcon 17 shield litigation. It had a line did you use this IUD and 18 that there was a statement that they had done this. There 19 the court said the state may not interfere with access to 20 civil courts by denying its citizens information about their 21 legal rights. And that's exactly what this restriction is 22 and does. 23 527(b), the government's defense is really just 24 misdescription. It doesn't apply to attorneys, if 25 necessary. It doesn't suggest the case is routine. But, of 60 1 course, the whole purpose of this is to suggest that you 2 don't need an attorney and that their case may be routine. 3 It even says that. It is no solution to say you can correct 4 the errors in this speech. You can always add to this. The 5 definition of something being misleading simply by material 6 omission is misleading. And to say, well, you can correct 7 the bits and pieces, that doesn't solve the problem here. 8 This is misleading. And the cost it imposes are detailed in 9 some of the declarations. The amount of time attorneys have 10 to spend. Their fees have gone up. That's bad for their 11 clients, that's bad for them. 12 THE COURT: Is there any prohibition against 13 modifying the notice or adding to it based on the particular 14 situation? 15 MR. RUBIN: There is no -- well, that's a real 16 interesting question in a way, because if your modification 17 is to say this is all a lie, don't pay any attention to 18 this, I don't know whether you've materially complied with 19 the disclosure requirement. But it is certainly true that 20 an attorney can try to explain what is going on in this to 21 the extent that he or she can. The problem is that our 22 objection isn't that in some circumstances this is 23 misleading if only that we have a few attorneys for whom, 24 you know, who are in that category, mostly it's okay. This 25 is misleading and false and compels the provision of advice 61 1 no attorney would give in every case. No attorney would say 2 to someone without examining their case -- well, let's just 3 look, I've got the thing in front of me. 4 If you select another type of relief under the 5 Bankruptcy Code other than Chapter 7 or Chapter 13, you will 6 want to find out what should be done from someone familiar 7 with that type of relief. That's not a piece of advice that 8 an attorney would ever give to a client, particularly not a 9 new client. They wouldn't say right off the bat if you 10 decide to seek bankruptcy relief you can represent yourself, 11 you can hire an attorney to represent you, or you can get 12 help from a bankruptcy petition preparer who is not an 13 attorney. There's not some subset of cases where a client 14 walks in the door and that's appropriate advice. It's 15 always inappropriate advice. 16 The same is true essentially in every single 17 paragraph here. And there are these misstatements about 18 what has to be done. You have to pay a filing fee to the 19 Bankruptcy Court. That could deter someone from going 20 forward. But, of course, there's a waiver for that. To 21 file a bankruptcy case documents called petition schedules 22 you must have a statement of financial affairs as well as in 23 some cases a statement of intention needs to be prepared 24 correctly and filed with the Bankruptcy Court. That 25 understates the work involved in filing a bankruptcy 62 1 petition. 2 So our objection isn't there is some class of 3 cases where it's okay and some not. Whether or not it could 4 be added to or detracted -- well, it could be detracted from 5 maybe in certain circumstances. That doesn't solve the 6 problem that my clients have with this. 7 I should also say she mentions reaffirmation. 8 This isn't -- actually, she's absolutely correct. There are 9 concerns expressed. I'm sure my clients have concerns about 10 creditors overbearingly trying to get debtors to reaffirm 11 debts. This says if you choose to file a Chapter 7 case you 12 may be asked by a creditor to reaffirm a debt. You may want 13 help in deciding whether to do so. A creditor is not 14 permitted to coerce you into reaffirming your debts. This 15 actually seems to suggest that the assistance may come from 16 the creditor. They can't force you, but they could assist 17 you. This isn't a statement that solves that problem. 18 With respect to Section 528 in the compelled 19 speech, again, the government simply mistakes the standard 20 and suggests that Casey applied rational base of scrutiny. 21 She talks about relief from legitimate state interest. It's 22 clear under Zauderer, if you look at the Second Circuit 23 cases construing it, if you look at the NEMA case to which 24 she referred, this case talking about disposal of mercury 25 lamps. The Court there finds that it's a permissible 63 1 disclosure because it serves a substantial interest. Not a 2 legitimate interest. And as I described before in the 3 Ibanez case, the second prong of Central Hudson applies 4 under Zauderer as well. That second prong is directly and 5 materially advancing that substantial interest. And this we 6 are a debt relief agency language doesn't do that. 7 She talks about the problems in the bankruptcy 8 code, the person who said they didn't -- they talked to 9 someone who didn't know they had filed for bankruptcy. This 10 is the testimony of a creditor, an owner of a store, being 11 told by a customer essentially I didn't know that I had 12 filed for bankruptcy. Maybe I injured you. I think it's 13 inherently implausible. To file for bankruptcy you have to 14 sign a petition and a bunch of documents all which say 15 United States Bankruptcy Court. I can't imagine a person 16 who didn't know that they filed for bankruptcy. That's not 17 quite what it says here. But, in any event, an 18 advertisement, this restriction isn't narrowly drawn. It 19 doesn't solve the problem of not mentioning bankruptcy and 20 advertisement, and there's no evidence that such an 21 advertisement ever led to someone being misled. 22 And, of course, as you suggested, because of the 23 plain language of the statute it does cover attorneys from 24 creditors doing eviction proceedings and the like. 25 THE COURT: What else did you have, Mr. Rubin? 64 1 MR. RUBIN: Well, I think it's clear that Section 2 528 is not just a requirement of informing of fees, but 3 requires the executed contract. She didn't fully address 4 that. 5 And I guess, finally, I would say Section 6 527(b) -- if I could go back to that for one second -- 7 Section 527(b) she calls it a disclosure requirement. Under 8 Section 342B1 written notice contain a brief description of 9 Chapter 7, 11, 12 and 13. And the general purposes, 10 benefits and costs of proceeding under those chapters is 11 already required to be given. It's required to be given by 12 all attorneys under Section 521. And if attorneys are debt 13 relief agencies, it's also required by 527(a)(1) which we 14 don't contest. We don't object to a properly tailored 15 restriction, but that's not what we have here. 16 I think that's all I have, your Honor. 17 THE COURT: Thank you. So just a few things. 18 I'll take the papers obviously. But I would like to get a 19 transcript of the oral argument. I ask the government to 20 order it if plaintiff is not going to order it. I think it 21 would be helpful for me. 22 The next is I wanted to see if you wanted to file 23 any additional papers after the argument today. I think 24 you've covered most, if not all, of it in your papers 25 already, but I'll give you some chance if you want to follow 65 1 up on anything you've heard today. 2 MS. SOWLES: Your Honor, I believe that 3 technically under the Motion to Dismiss that we do have a 4 right of reply. We were going to be filing something. 5 THE COURT: You still want to do that? When was 6 it filed, about two weeks ago, I think? 7 MS. SOWLES: I believe that a reply was filed 8 Monday, and then I believe that our response time is ten 9 days, but not counting the weekends would make our response 10 due a week from this Monday, if I'm correct. 11 THE COURT: We can work around that schedule but, 12 Mr. Rubin, do you want to file anything more, do you think, 13 about your arguments here? 14 MR. RUBIN: No, your Honor. I think we're content 15 with what we filed. 16 THE COURT: So you want to follow up on the Motion 17 to Dismiss, right? 18 MS. SOWLES: Right. 19 THE COURT: Anything else you need to do? 20 MS. SOWLES: No, I don't believe so. 21 THE COURT: We'll be in recess. Thank you both. 22 23 24 25 66 1 2 3 C E R T I F I C A T E 4 5 I, Martha C. Marshall, RMR, CRR, hereby certify 6 that the foregoing pages are a complete and accurate 7 transcription of my original stenotype notes taken in the 8 matter of CONNECTICUT BAR ASSOCIATION V. UNITED STATES OF 9 AMERICA which was held before the Honorable Christopher F. 10 Droney, U.S.D.J, at 450 Main Street, Hartford, Connecticut, 11 on July 13, 2006. 12 13 14 15 ___________________________ Martha C. Marshall, RMR,CRR 16 Official Court Reporter 17 18 19 20 21 22 23 24 25