July 2007
Featured Disciplinary Case
Topic
As a general rule, empirical evidence is necessary to support any state restriction on misleading advertising.
Summary
James L. Alexander, Alexander and Catalano LLC, and Public Citizen, Inc. v. Thomas J. Cahill, et al., 2007 WL 2120024, No. 5:07-CV-117 (FJS/GHL)(N.D.N.Y. July 20, 2007). James L. Alexander is a New York lawyer and the managing partner of a firm with offices in Syracuse and Rochester. The firm actively markets itself both in print and through electronic media. Before February 1, 2007, firm commercials often contained jingles and special effects including wisps of smoke and blue electrical currents surrounding the firm’s name. A number of the firm’s commercials also contained fictional or comic scenes. Public Citizen, Inc. is a national non-profit corporation with approximately 100,000 members. Approximately 9,450 members reside in New York and are consumers of legal services. A division of Public Citizens, Inc. employs lawyers licensed in New York and litigates public interest cases, including First Amendment matters.
New York amended advertising guidelines effective on February 1, 2007. According to the amendments, New York lawyers would no longer be able to market themselves by placing advertisements including any:
- client endorsements or testimonials with respect to pending matters;
- the portrayal of a judge, a fictitious law firm or a fictitious name;
- information that “rel(ies) on techniques to obtain attention that demonstrate(s) a clear and intentional lack of relevance to the selection of counsel including the portrayal of lawyers exhibiting characteristics clearly unrelated to legal competence;
- any nickname, moniker, motto or trade names that implies an ability to obtain results in a matter; and
- pop-up or pop-under advertising in connection with computer-accessed communication other than on the lawyer’s own website.
In addition, the New York adopted regulations regarding a lawyer or law firm’s use of a domain name for any internet web site and changed its solicitation guidelines to provide a cooling off period for lawyers interested in seeking legal business from affected persons, or the families of victims or their representatives, within thirty days of a personal injury or wrongful death. The same day the laws noted above became effective, Alexander, his firm, and Public Citizen, Inc., all filed suit for declaratory relief in federal court and requested an injunction prohibiting each New York bar counsel from enforcing the amended rules. The firm alleged that it had been harmed. Specifically, it averred that it had to cease using the phrase “the heavy hitters” in its marketing and, most alarmingly, had to stop running advertisements portraying its attorneys as giants towering over downtown buildings, depicting its attorneys counseling space aliens concerning insurance disputes, and representing its lawyers as fast running blurs to reach a client in distress. Defendants sought to dismiss the action by arguing that Public Citizen, Inc. had no standing, that the case was barred by the abstention doctrine, and that the plaintiffs had sued the wrong party by not naming the New York court responsible for the changes. District Court Judge Frederick J. Scullin, Jr. rejected each of these arguments and proceeded to address the First Amendment issues raised by the plaintiffs. The court based its First Amendment analysis on commercial speech cases involving lawyer advertising and, most significantly, upon the
Central Hudson test first promulgated in
Central Hudson Gas and Electric Corp. v. Public Service Comm’n of New York, 447 US.557 (1980). Under the Central Hudson test, in order to survive constitutional challenge, any state restricting marketing must be able to establish that its advertising regulations:
1. Advance a substantial state interest through the restrictions;
2. Establish that the restriction materially advance that state interest; and
3. Are narrowly drawn.
Using this test, the federal judge found many of the amended New York advertising guidelines to be constitutionally infirm. In reviewing the claims, he divided the challenged amendments into three groups and then applied the Central Hudson test.
First Group-Advertising Content
Many of the amended rules limited the ability of a lawyer to market the lawyer’s practice by employing certain prohibited information. The judge ruled that, as to the content-related matters, the first part of the entral Hudson test had been satisfied as the state had established that it had a substantial interest to protect the public by ensuring that attorney advertisements are not misleading. The second prong of the test, however, dealing with the material advancement of the state’s interests, was not met as to some of the advertising. Those regulations that failed to withstand challenge, those that could not by supported by bare reason and logic alone, were stricken due to the lack of any empirical data demonstrating a harm to consumers. Notwithstanding the fact that he federal judge was dealing with a barren record in the case (the defendants had failed to submit any statistical or anecdotal evidence of consumer problems with or complaints about, misleading advertising) the district judge was willing to hold that the court could prohibit the portrayal of judges in attorney advertisements. In addition, a lawyer’s use of a trade name that implied an ability to obtain results also did not violate the second-prong of Central Hudson. However, the remaining content-based prohibitions were not shown to materially advance the state’s interests and were thus deemed unconstitutional. As to the prohibitions that failed to conform to the third and last prong of the Central Hudson test, the judge ruled that bar counsel had “failed to produce any evidence that measures short of categorical bans would not have sufficed to remedy the perceived risks of such advertising being misleading.” The judge was of the opinion that there was nothing in the record to suggest that a state-imposed disclaimer could not have been effective to prevent the harm sought to be addressed by the amendments. Finally, the pop-up and pop-down prohibitions were stricken as being “contrary to common sense.” With nothing in the record to suggest otherwise in regards to that obnoxious, albeit now protected, marketing technique, the defendants had little chance of succeeding in preserving this particular provision of the amended rule.
Second Group-Domain Names
As to amended restrictions dealing with attorney and law firm domain names and websites, the court ruled that the Central Hudson test was met, largely due to the existence in the record of a New York Task Force Report on electronic marketing that articulated a reasoned basis for the changes. Specifically, the judge found, and the amended law provided, that lawyers can use any domain name as long as all pages of the lawyer’s website contain the lawyer’s name, that the lawyer does not practice law using the domain name, that the domain name does not imply an ability to obtain results, and the domain name does not violate another disciplinary rule.
Third Group-Cooling-off Periods
The amended guidelines contained a thirty day cooling-off period on communicating to prospective clients who are either victims, families, or representatives, relating to any potential personal injury or wrongful death claim. Once the thirty-day period expires, a lawyer is free to follow up with any constitutionally appropriate mode of communication in order to market the lawyer’s service to the intended target audience. In cases where a legal filing is required within thirty days, the moratorium is limited to a fifteen day cooling-off period. New York’s guidelines in this regard are far broader than restrictions from other moratorium states that have been held to be constitutionally valid, such as in Florida Bar Ass’n v. Went-for-It Inc., 15 US 618 (1995), which dealt only with direct-mail solicitation. New York expansively prohibits any television, radio, newspaper, or websites solicitations within the cooling-off period that are directed to a specific recidient or group of recipients. The judge found that the amended rules were constitutional by acknowledging that federal law adopts a forty-five day moratorium following airline disasters. Further, the judge recognized the obvious ease of lawyers to effectively market themselves notwithstanding the moratorium by noting:
Even casual observers of television, radio, and print advertisements since February 1, 2007, indicates that New York law firms have had little difficulty advertising their services and explaining their expertise to consumers without running afoul of the moratorium.
The firm website is at:
http://www.AlexanderandCatalano.com
