On March 12, 2010, the U.S. Court of Appeals for the Second Circuit released its much-anticipated decision concerning the constitutionality of New York’s recently-adopted prohibitions on certain types of attorney advertising and solicitation. In Alexander v. Cahill, the court confirmed that New York’s 30-day moratorium on attorneys’ targeted solicitations of accident victims and their families is constitutional, thereby extending the reasoning of the U.S. Supreme Court in Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995) to include targeted advertising made via the Internet, radio, television, newspapers and direct mailings. In so holding, the Second Circuit specifically approved of both the Report of the New York State Bar Association Task Force on Attorney Advertising, which was chaired by Arent Fox’s Bernice Leber, and the amicus brief submitted by Arent Fox (Bernice Leber and Jennifer Bougher) on behalf of the New York State Bar Association.

The Second Circuit also affirmed, with one exception, the district court’s decision striking down the content-based advertising restrictions, e.g., those barring testimonials from clients relating to pending matters, portrayals of judges or fictitious law firms, attention-getting techniques unrelated to attorney competence, and trade names or nicknames that imply an ability to get results. (These were not among the Rules or approach proposed by the State Bar Task Force and adopted by its House of Delegates).

The 30-Day Moratorium: Guidance Offered to Lawyers Soliciting Clients

For the first time, the Second Circuit held that New York’s moratorium on solicitation of accident victims and their families applies to all media – including Internet, television, radio, newspaper, and direct mailings, among others – through which an attorney might initiate communication directed to, or targeted at, a specific recipient or group of recipients for 30 days following the accident. The court stated that where a legal filing is required within 30 days, the moratorium, limited to a 15-day “cooling off period” is constitutional. As the State Bar Task Force Report had proposed, this moratorium does not include: (1) broad, generalized mailings; (2) general advertisements conveying an attorney’s experience in handling personal injury lawsuits, even when they appear near news stories in a newspaper that the attorney knows will be filled with coverage of a particular accident; or (3) advertisements informing readers of an attorney’s past experience with a particular product where that product has caused repeated personal injury problems. These three forms of advertising by lawyers remains protected as commercial speech under the First Amendment.

Having determined that the moratorium, as drafted, restricts protected commercial speech, as defined by Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980), the court considered the factors set forth in that case to determine whether or not the 15-day ban restriction violated the First Amendment. The court concluded that it did not. First, the court held that the moratorium protects a substantial state interest, relying upon the Florida Bar decision and the NYSBA Task Force Report. Second, the court, again relying on Florida Bar and the Task Force Report, held that the rule materially advances the state’s interest. The Second Circuit specifically acknowledged that “[t]he Task Force Report…recommended a fifteen-day ‘cooling-off period’ during which direct-mail solicitation of accident victims would be prohibited,” which was less restrictive than the 30-day ban allowed in Florida Bar.

Third, the court held that the restriction was narrowly tailored and found no reason to distinguish between different forms of media carrying the advertisements. The court specifically “eschew[ed] a technology-specific approach to the First Amendment and conclude[d] that New York’s moratorium provisions…survive constitutional scrutiny notwithstanding their applicability across the technological spectrum.” This is a departure from prior United States Supreme Court decisions, which suggest such an approach. The court found that the Task Force Report “demonstrate[d] that the harms it recites are real and its restriction will in fact alleviate them to a degree,” citing Florida Bar, 515 U.S. at 626. The Second Circuit went on to hold that “as amici New York State Bar Association point out, New York’s moratorium is more narrowly tailored than that of Florida Bar insofar as it incorporates the Task Force Report’s fifteen-day black-out period, which shortens the moratorium period to fifteen days where an attorney or law firm must make a filing within thirty days of an incident as a legal prerequisite to a particular claim.”

The Content-Based Restrictions: Further Guidance Offered to Lawyers, Law Firms

With only one exception, the Second Circuit found that the content-based restrictions impermissibly attempted to regulate commercial speech protected by the First Amendment. The sole exception is an advertisement by a fictitious law firm or lawyer or use of a fictitious name to refer to lawyers who are not in fact associated together in a law firm or otherwise imply that lawyers are associated in a law firm if that is not the case. Such an ad is banned as misleading, the Second Circuit held.

First, the court noted that the speech at issue was “not inherently false, deceptive, or misleading,” and that the rule-makers’ “own press release described its proposed rules as protecting consumers against ‘potentially misleading ads.’” (emphasis in original). Having concluded that the regulations therefore fall within the scope of First Amendment scrutiny, the court went on to examine the remaining Central Hudson factors.

The Second Circuit accepted that the state’s interests in “prohibiting attorney advertisements from containing deceptive or misleading content,” “prohibiting advertising and solicitation practices that disseminate false or misleading information,” and “protecting the legal profession’s image and reputation” as substantial interests in support of the proposed regulations. However, in examining the next prong, the court agreed with the district court that the content-based restrictions each failed to materially advance, beyond mere speculation or conjecture, those interests. Finally, the Second Circuit concluded that the regulations were not narrowly tailored, largely due to the categorical, “blanket” nature of the proposed restrictions. Thus, the court struck down the restrictions against client testimonials, portrayals of a judge, and the use of irrelevant techniques, nicknames, mottos and trade names in attorney advertising.

For all practical purposes, lawyers and law firms may continue to use testimonials from clients relating to pending matters, to portray judges in their advertisements, to use attention-getting techniques unrelated to attorney competence (e.g., showing a lawyer jumping off a tall building in a single bound to assist his/her client), and to use trade names or nicknames (e.g., “the Heavy Hitters”) so long as these forms of advertisements are not misleading.