From Veterans Guardian VA Claim Consulting LLC v. Platkin, decided yesterday by Judge Stephanos Bibas, joined by Judges Anthony Scirica and Cheryl Krause:
The marketplace of ideas is not just a metaphor. Many Americans, from journalists to playwrights to therapists, speak for a living. Laws that bar these professionals from earning money on that speech limit their ability to speak and so must survive First Amendment scrutiny. New Jersey recently passed one such law, banning charging for some advice on how to claim veterans benefits. Because this law likely burdens speech, yet the District Court thought otherwise and so denied a preliminary injunction, we will vacate and remand….
The majority opinion began by concluding that professional speech, including paid speech, is likely presumptively protected by the First Amendment:
Professional services delivered by speaking or writing are speech. Veterans Guardian … advises clients about how to claim benefits: what disabilities to claim, what evidence to include, and how to fill out forms. That advice is likely speech. See Upsolve, Inc. v. James (S.D.N.Y. 2022) (distinguishing conduct of filing motions from speech of offering legal advice)….
[And] laws that ban charging for speech burden the right to speak. Supreme Court cases establish this. See United States v. Nat'l Treasury Emps. Union (1995); Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd. (1991). Common sense agrees. Someone who cannot earn money from speaking has less incentive to speak and so will speak less. Indeed, many canonical examples of protected speech involve professionals speaking for pay: think of novelists, speechwriters, and newspaper columnists….
More importantly (because the matter is less well-settled), the panel concluded that "there is no separate category of professional speech":
Our circuit used to carve out a separate category of professional speech and give it less protection. But seven years ago, in NIFLA v. Becerra, the Supreme Court clarified that there is no separate category of professional speech. With few exceptions, the same First Amendment principles apply when professionals speak to clients as when anyone else talks. That said, NIFLA confirms that lesser scrutiny is warranted where there is "persuasive evidence of a long (if heretofore unrecognized) tradition to that effect." And it preserved two exceptions when regulations of professional speech get reviewed more deferentially: (1) "laws that require professionals to disclose factual, noncontroversial information in their commercial speech" and (2) regulations of "professional conduct, even though that conduct incidentally involves speech."
New Jersey tries to jam its law into NIFLA's second exception by arguing that the law regulates price instead of speech, that it regulates speech incidental to illegal conduct, and that Section (a)(1) is a neutral professional licensing scheme. The first two arguments do not work, and the record is too sparse for us to confidently decide the third.
Start with New Jersey's contention that its law targets only the conduct of charging money. As we discussed above, pricing regulations are not exempt from the First Amendment—restricting compensation to licensed counselors still imposes a financial burden on speech.
Second, Veterans Guardian's speech is not integral to illegal conduct. Because New Jersey reads its law as mirroring federal requirements, it argues that any speech it bans must be integral to breaking federal law. That argument is wrong twice over. For one, Veterans Guardian's speech is not just one step in service of some separately illegal act, unlike the speech involved in soliciting a crime, demanding ransom, or posting a "White applicants only" sign as part of hiring discrimination. Veterans Guardian's speech is the core of what it does.
For another, though New Jersey says federal law outlaws Veteran Guardian's activities, that federal law is equally subject to the First Amendment. Veterans Guardian does not challenge the federal scheme, and we take no position on whether it is valid. But states cannot immunize their laws from constitutional scrutiny by pointing to a federal scheme that may suffer the same constitutional defects. To hold otherwise would let states end-run around the First Amendment.
Finally, New Jersey attempts to frame Section (a)(1), which incorporates federal accreditation requirements, as a neutral licensing scheme regulating professional conduct. Yet we have very little information on how the federal accreditation scheme works or what it covers. The District Court ruled on a different basis and did not address whether the law should be viewed as a professional licensing scheme or whether, as a licensing scheme, it would fit within NIFLA's second exception. We leave it to the District Court to consider those questions in the first instance on remand.
When it does, it should reconsider one more part of its reasoning. It held that New Jersey's law was content neutral in part because the state did not intend to suppress disfavored ideas. But courts judge laws based on their effects on speech, not just on legislatures' purposes or motives. For instance, they usually decide whether a law is content based—and so presumptively unconstitutional—by judging whether it "single[s] out any topic or subject matter for differential treatment."
We take no position on whether this law is content neutral, leaving that to the District Court on remand. But when it does reach that question, its answer should be based on whether the law applies to speech based on its content or topic, regardless of the legislature's good intentions….
The District Court will need to gauge New Jersey's interests and the law's tailoring, and it may need to weigh preliminary-injunction factors other than the merits. Each inquiry is riddled with unknowns.
Start with New Jersey's interests. They depend on how often paid services covered by the law are predatory, how often they are merely useless, and how often they are valuable. The record contains no answers. Nor does it show how big a problem paid consultants are. Though the District Court noted that "benefits consultants and other businesses ha[ve] defrauded veterans of over $414 million," the document it relies on lumps together all sources of fraud, from identity theft to "bogus investment schemes" and "sweepstakes and lotteries." App. 17, 217. In fact, this document lists the eleven most common sources of fraud, but predatory benefits-claiming services are not among them.
The extent of tailoring is also foggy. Neither the District Court nor the parties have discussed whether less restrictive alternatives to Sections (a)(1) and (a)(4) would have achieved New Jersey's interests. And each section raises its own questions that the record does not answer. Section (a)(1) purports to fight exploitation by forcing providers to follow federal law. But how effective is federal law at stopping fraud and incompetence? And at what cost to speech? Section (a)(4) bans paid advice before appeal. The weight of this burden depends in part on whether the appeal is too late to offer some advice. Is it? On remand, the District Court should fill these gaps….
Judge Krause joined the majority but wrote a separate concurrence "with some observations about the review of reasonable professional licensing schemes in the wake of NIFLA"; an excerpt:
On the one hand, NIFLA established that professional speech, as a whole, is not a unique category subject to lesser protections than other protected speech and cautioned against giving states "unfettered power" to impose content-based restrictions on speech "by simply imposing a licensing requirement." Taken to the extreme, the Court observed, states could enact onerous licensing laws that, in effect, "impose invidious discrimination of disfavored subjects," for example, by restricting publishers from printing books by certain authors or lawyers from advocating for clients outside the courtroom—all under the guise of regulating professional conduct….
On the other hand, NIFLA confirmed that more deferential scrutiny continues to apply in the commercial context where there is "'persuasive evidence … of a long (if heretofore unrecognized) tradition' to that effect," and it identified two such situations. The first was "laws that require professionals to disclose factual, noncontroversial information in their 'commercial speech'" …. And the second was for "regulations of professional conduct that incidentally burden speech." …
[The] long tradition of professional licensing schemes in our law dates back well before the Founding, with deep roots in English law. In the Middle Ages, craft guilds, chartered by the monarch, functioned as early licensing authorities, with membership a prerequisite to entering trades like weaving and goldsmithing. As early as 1421, doctors in England petitioned Parliament to exclude unqualified practitioners, and the Royal College of Physicians was established in 1518 to grant licenses and regulate the practice of medicine. Membership in the English Inns of Court, founded in the mid-fourteenth century, ensured the qualifications of those practicing law. And by the seventeenth century, licensing schemes governed the professions of tavern owner, peddler, coach driver, and many more on that side of the Atlantic.
Credentialing practices followed the colonists to early America, where the medical and legal professions were among the first to be licensed and regulated, along with traders, tanners, printers, peddlers, boat pilots, tavern and innkeepers, distillers, and purveyors of liquor. By the early-nineteenth century, licensing schemes expanded to include barbers, boarding house operators, insurance agents, midwives, real estate brokers, steamboat operators, embalmers, horseshoers, undertakers, veterinarians, auctioneers, and pawnbrokers, among many others.
The inevitable challenges to these regulatory regimes gave the Supreme Court opportunity to explain their place in our legal system and to acknowledge their importance. In rejecting a challenge to a medical licensing regime in 1889, for example, the Supreme Court recognized the inherent authority of the states to prescribe regulations to combat "consequences of ignorance and incapacity, as well as of deception and fraud," and to fulfill the government's responsibility "from time immemorial, to exact in many pursuits a certain degree of skill and learning upon which the community may confidently rely." While the Court has also policed the constitutional bounds of such regulations, particularly after the incorporation of the First Amendment, and as legislatures in the twentieth century increasingly targeted the speech of professionals, it has continued to recognize that states "have broad power to establish standards for licensing practitioners and regulating the practice of professions."
Against the backdrop of this long tradition, it would be anomalous indeed to read NIFLA as an endorsement of heightened scrutiny for all professional licensing schemes. After all, the Supreme Court "does not normally overturn, or [ ] dramatically limit, earlier authority sub silentio," and, as a general rule, we "leav[e] to th[e] [Supreme] Court the prerogative of overruling its own decisions." If anything, NIFLA confirms that lesser scrutiny applies to licensing regimes that "regulate[ ] speech only 'as part of the practice of [a profession],'" and … [makes] made clear that some restrictions of speech, though content based, remain subject to more deferential review as burdens incidental to the regulation of professional conduct….
With its recent grant of certiorari in Chiles v. Salazar, the Court may bring greater clarity, but for now, in the wake of NIFLA, whether a particular component of a licensing scheme imposes a content-based regulation on professional speech subject to strict scrutiny, or "regulate[s] speech only 'as part of the practice of [a profession], subject to reasonable licensing and regulation by the State," must be decided on a case-by-case basis. Compare Billups v. City of Charleston (4th Cir. 2020) (holding the burden on speech was not merely incidental because the ordinance "completely prohibit[ed] unlicensed tour guides from leading visitors on paid tours—an activity which, by its very nature, depends upon speech or expressive conduct"), with Cap. Associated Indus., Inc. v. Stein (4th Cir. 2019) (upholding "UPL statutes [that] don't target the communicative aspects of practicing law, such as the advice lawyers may give to clients" but, instead, "focus more broadly on the question of who may conduct themselves as a lawyer").
Here, as the majority observes, we have little information on the workings of New Jersey's accreditation scheme for veterans benefits counselors, and the District Court ruled on a different basis. We, thus, leave the application of NIFLA in this case to the District Court in the first instance….
Martine E. Cicconi, Kristen Loveland, James E. Tysse, and Caroline L. Wolverton (Akin Gump Strauss Hauer & Feld) represent plaintiffs.
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