Revo v. Disciplinary Board of the Supreme Court for the New Mexico , 106 F.3d 929 ( 1997 )

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
FEB 5 1997
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
M. TERRENCE REVO,
Plaintiff - Appellee,
vs. No. 96-2000
DISCIPLINARY BOARD OF THE
SUPREME COURT FOR THE STATE
OF NEW MEXICO, LUIS G.
STELZNER, Chairman; CHRISTINA
ARMIJO, LINDA S. BLOOM, FELIX
BRIONES, JR., MICHAEL D.
BUSTAMANTE, CHARLES W.
DANIELS, PATRICIA B. MURRAY,
LARRY RAMIREZ, WARREN F.
REYNOLDS, ALEX ROMERO, JOHN
H. SCHULKE, SARAH M.
SINGLETON, members, in their official
capacities,
Defendants - Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
(D.C. No. CIV-92-764-JC)
Andrew G. Schultz, Rodey, Dickason, Sloan, Akin & Robb, Albuquerque, NM (Bruce
Hall, Albuquerque, NM, Stephen Durkovich, Albuquerque, NM, and Damon Ely,
Albuquerque, NM, with him on the brief) for Defendants - Appellants.
Charles R. Peifer, Browning & Peifer, P.A., Albuquerque, NM (John Newman Carr,
Albuquerque, NM, with him on the brief) for Plaintiff - Appellee.
Before KELLY, HOLLOWAY and WEIS,* Circuit Judges.
KELLY, Circuit Judge.
Defendants, members of the Disciplinary Board of the Supreme Court of New
Mexico (the Board), appeal from the district court’s order enjoining enforcement of Rule
16-701(C)(4) of the New Mexico Rules of Professional Conduct.1 Rule 16-701(C)(4)
bans all attorney direct mail advertisements to personal injury victims and family
members of wrongful death victims, unless the recipient of the solicitation is a relative of
the attorney sending the letter or has had a prior personal, business or professional
*
The Honorable Joseph F. Weis, Jr., Senior Circuit Judge for the Third Circuit
Court of Appeals, sitting by designation.
1
16-701. Communications concerning a lawyer’s services.
....
C. Prohibited Solicitations. A lawyer may not send or permit to be
sent a written communication to a prospective client for the purpose
of obtaining professional employment . . . if:
....
(4) the written communication or other solicitation, except as
provided in Paragraph A of Rule 16-703 [allowing contact
with prospective clients who are relatives or with whom the
lawyer has a prior personal, business or professional
relationship], concerns an action for personal injury or
wrongful death or otherwise relates to an accident involving
the person to whom the communication is addressed or a
relative of that person.
S.C.R.A. 16-701(C)(4) (Michie 1995 Repl.) (as amended, effective August 1, 1992).
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relationship with that attorney. The district court found the rule unconstitutional, in
violation of the First Amendment and the Equal Protection Clause. We exercise
jurisdiction under 28 U.S.C. § 1291 and affirm. We grant the Board’s unopposed motion
to withdraw portions of its appendix not before the district court.
Background
Plaintiff, M. Terrence Revo, is a personal injury lawyer who practices in
Albuquerque, New Mexico. He has been a member in good standing of the New Mexico
and New York bars since 1978 and 1976 respectively. Following the United States
Supreme Court’s decision in Shapero v. Kentucky Bar Ass’n, 486 U.S. 466 (1988), Mr.
Revo began advertising by means of direct mail letters sent to persons injured in
automobile accidents. He continued to do so until 1992, when the Supreme Court of New
Mexico enacted Rule 16-701(C)(4), amending its Rules of Professional Conduct to ban
all direct mail advertising to personal injury victims and family members of wrongful
death victims. S.C.R.A. 16-701 (1995 Repl.) (as amended, effective August 1, 1992). At
the same time that it adopted this complete ban on direct mail to accident victims, New
Mexico adopted a procedure for screening all other lawyer advertisements. S.C.R.A. 16-
707 (1995 Repl.) (as amended, effective August 1, 1992). By its terms, this screening
procedure applies to all direct mail advertisements except those to personal injury victims,
which are specifically banned by Rule 16-701(C)(4).
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Mr. Revo sought a declaratory judgment that the ban was unconstitutional on First
Amendment and Equal Protection grounds, as applied to him and the solicitation letter he
proposes to send.2 After a one-week trial, both parties submitted thousands of additional
2
The advertising letter at issue, as set forth in Mr. Revo’s second amended
complaint, is as follows:
[Date] “LAWYER ADVERTISEMENT”
[Name and Address]
Dear [Title and Name]:
The Albuquerque Police [State Police] Department records show that you
were recently involved in an auto accident. Unfortunately, such accidents
are an all too common fact of life and can cause serious concern. I
understand that dealing with injuries, emergency rooms, medical bills, lost
earnings, damaged autos, rental cars, and insurance adjusters can be
difficult and frustrating.
In our system of legal justice, the injured person has certain rights and
protections under the law. It is important that you know about your rights
before deciding what to do.
I have been an attorney for more than 16 years. I invite you to make an
appointment for a free initial consultation and evaluation of your case. We
will do our best to answer all your questions and you are under no
obligation to hire my firm.
I accept personal injury cases on a contingency fee basis, which means that
my fee is based upon a percentage of your total recovery, before costs are
deducted. Regardless of the outcome, the client will bear the expenses of
the case. Some exceptions may apply. I have found that the earlier I
become involved in a case, the more I can do on your behalf, therefore, I
invite you to call today.
If you have already retained the services of an attorney, I hope that your
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pages of depositions and other documentary evidence for the court’s further
consideration, and the district court took the matter under advisement. Before rendering a
decision, the district judge died. The case was assigned to another district judge, who
gave the parties the option under Fed. R. Civ. P. 52 of retrying any part of the case.
Waiving their right to retry the case, the parties submitted it on the record. The district
court held that New Mexico’s blanket ban on direct mail advertising is an
unconstitutional violation of Mr. Revo’s First Amendment and Equal Protection rights,
and permanently enjoined its enforcement. The Board now appeals.
Discussion
In a First Amendment case, we have an obligation to make an independent
examination of the whole record in order to make sure that the speech regulation does not
constitute a forbidden intrusion on the field of free expression. Melton v. City of
Oklahoma City, 879 F.2d 706, 713 (10th Cir. 1989) (citing Bose Corp. v. Consumers
Union of U.S., Inc., 466 U.S. 485, 499 (1984)). Because of this obligation, and because
of the unique procedural posture of this case, the Board contends that we owe no
case will proceed well and that you will have a positive outcome. If you are
not represented, then I ask you to think about what is at stake, now and for
the future. If we can help please call.
Respectfully,
M. Terrence Revo
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deference to the district court’s findings and that we should substitute our own
independent review of the evidence. Ordinarily, our review of the district court’s findings
of fact is under the clearly erroneous standard, even if those findings were based on
documentary evidence and a cold record. Anderson v. City of Bessemer City, 470 U.S.
564, 574 (1985); United States v. Little, 60 F.3d 708, 714 n.5 (10th Cir. 1995). This case,
however, turns primarily on the application of the First Amendment to the facts
surrounding New Mexico’s ban. Although the district court also held that the ban
violated the Equal Protection Clause, we need not address that holding because the trial
record makes it clear that Mr. Revo’s equal protection claim was subsumed in his First
Amendment claim. We review the district court’s findings of constitutional fact and its
ultimate conclusions of constitutional law de novo. Robinson v. City of Edmond, 68 F.3d
1226, 1230 n.7 (10th Cir. 1995); Yates v. Commissioner, 924 F.2d 967, 969 (10th Cir.
1991).
Lawyer advertising is commercial speech and is accorded an intermediate measure
of First Amendment protection. Florida Bar v. Went For It, Inc., 115 S. Ct. 2371, 2375
(1995). Government restrictions on commercial speech, such as New Mexico’s ban on
personal injury direct mail advertising, are analyzed under the framework set forth in
Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980).
As a threshold inquiry under Central Hudson, we must determine whether the particular
advertisement is protected speech—i.e., whether it concerns lawful activity and is not
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misleading. Id. at 563, 566; Went For It, 115 S. Ct. at 2376. If not, the speech may be
freely regulated. Protected commercial speech may also be regulated, but only if the
government can show that (1) it has a substantial state interest in regulating the speech,
(2) the regulation directly and materially advances that interest, and (3) the regulation is
no more extensive than necessary to serve the interest. Central Hudson, 447 U.S. at 564-
65; Went For It, 115 S. Ct. at 2376.
The operative facts in this case are not in dispute, although the parties contest how
those facts should be characterized. At issue here is whether, under the Central Hudson
framework, New Mexico’s ban is a constitutionally permissible restriction on the
commercial speech of lawyer advertising.
There is no question that advertising legal services concerns lawful activity. The
Board argues, however, that the letters Mr. Revo sent to accident victims are misleading.
Our review of the record does not support this overbroad contention. As early as 1988,
the Board’s Chief Disciplinary Counsel admitted that Mr. Revo’s letters were “carefully
worded to avoid creating false impressions.” Aplt. App. at 271. Also, the Board admitted
that it had not received a single complaint from any recipient of any of Mr. Revo’s letters
stating that the letters were false or misleading, were unfairly coercive, or caused them to
enter an attorney-client relationship unwillingly or without adequate information. Aplt.
App. at 375-76.
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The Board contends that direct mail solicitation letters such as those sent by Mr.
Revo are inherently misleading, and therefore may be freely restricted. The Board
suggests that direct mail letters to personal injury victims inevitably convey a false
message that soliciting lawyers are more experienced, tougher, more skillful, and better
qualified than non-soliciting lawyers, notwithstanding the fact that the letters themselves
make no reference to those attributes. According to the Board, therefore, the mere
sending of any letter to poor and uneducated accident victims (the group the Board claims
is specifically targeted by soliciting attorneys) carries with it the notion that the lawyer is
superbly able to represent their interests—a notion that is inherently misleading because
only unqualified shysters send these letters and because their targeted clients are not
sophisticated enough to know that they are being preyed upon. The Board ignores the
fact that the letters are sent to all accident victims, without regard to their financial well-
being. The fact that different segments of the population may choose different means of
selecting lawyers is not proof that those persons choosing lawyers from direct mail
solicitation are somehow less capable of making intelligent decisions.
In support of its arguments, the Board points to four soliciting attorneys who it
claims are either unqualified to represent personal injury clients or who do not act in the
best interests of such clients. According to the Board, these attorneys represent, for all
practical purposes, the total population of soliciting personal injury attorneys in New
Mexico. Assuming the Board is correct in its characterizations, the fact that these four
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attorneys may mislead their potential clients is not proof that the letters themselves are
inherently misleading. For a particular mode of communication to be inherently
misleading, it must be incapable of being presented in a way that is not deceptive. In re
R.M.J., 455 U.S. 191, 203 (1982). The Board offers no proof that some other qualified
lawyer who could superbly represent personal injury victims would nevertheless be
misleading potential clients simply by sending a direct mail solicitation. In addition, the
Board offers no evidence that anyone was actually deceived by Mr. Revo’s letters. Given
the absence of any evidence of actual deception, the Board’s “concern about the
possibility of deception in hypothetical cases is not sufficient to rebut the constitutional
presumption favoring disclosure over concealment.” Peel v. Attorney Disciplinary
Comm’n of Ill., 496 U.S. 91, 111 (1990); Ibanez v. Florida Dep’t of Bus. & Prof.
Regulation, 114 S. Ct. 2084, 2090 (1994).
Having determined that the solicitation letters in question are protected
commercial speech, we now turn to the first element of the Central Hudson test. “‘Unlike
rational basis review, the Central Hudson standard does not permit us to supplant the
precise interests put forward by the State with other suppositions.’” Went For It, 115 S.
Ct. at 2376 (quoting Edenfield v. Fane, 507 U.S. 761, 768 (1993)). The Board asserts that
it has a substantial interest in maintaining the public’s respect for the legal
system—respect which may be eroded by personal injury solicitation letters. The
Supreme Court found this interest substantial in Went For It. 115 S. Ct. at 2376. The
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Board also has a substantial interest in protecting the privacy of accident victims. Id.;
Edenfield, 507 U.S. at 769. But see Shapero v. Kentucky Bar Assoc., 486 U.S. 466, 475-
76 (1988).
The heart of the Central Hudson test as it applies to New Mexico’s ban is in the
remaining two elements, which can be characterized as the “fit” between the ban and the
interests it is designed to serve. The second element asks whether the ban directly and
materially advances the asserted state interest. In Central Hudson, the Court explained
this inquiry by stating that “the regulation may not be sustained if it provides only
ineffective or remote support for the government’s purpose.” 447 U.S. at 564. The
Board’s burden “is not satisfied by mere speculation and conjecture; rather, a
governmental body seeking to sustain a restriction on commercial speech must
demonstrate that the harms it recites are real and that its restriction will in fact alleviate
them to a material degree.” Went For It, 115 S. Ct. at 2377 (citations omitted).
According to the Board, direct mail solicitation by personal injury lawyers
“engenders the public perception of ambulance chasing, which has been shown to
encourage overreaching and underrepresentation, and which invades the privacy and
offends the sensibilities of those most grievously injured.” Aplt. Reply Brief at 11. The
first part of this argument goes to New Mexico’s interest in upholding the integrity of the
legal profession. To demonstrate that the harms it recites are real, the Board proffers its
“record,” consisting primarily of testimony about the bad practices of soliciting attorneys,
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along with the results of a survey it conducted of potential direct mail recipients. The
Board cites examples of illegal tie-in relationships between soliciting attorneys and
chiropractors, in which the attorneys and chiropractors end up receiving inflated fees at
the expense of their clients. The Board’s record shows examples of gross
underrepresentation of clients by some of the soliciting attorneys, including missing filing
deadlines and attempting to settle soft-tissue claims while ignoring obvious and much
more serious head injuries. We agree with the Board that such harms are real, and we do
not doubt that some of the sharp practices associated with solicitation contribute to the
denigration of the legal profession. Though it may sometimes appear otherwise, the
practice of law remains a profession, not just a ticket to entrepreneurship. In addition, the
lack of correlation between solicitation and the quality of legal services may be lost on
those most in need of protection.
There is, however, more to the inquiry. Not only must the harms be real, but the
ban must also be able to address those harms in a material way. Mr. Revo claims that the
overwhelming majority of the harms identified by the Board are the direct result of
unethical practices of two New Mexico attorneys who have unethical referral
relationships with two New Mexico chiropractors, and about whom the Board had already
received numerous complaints prior to enacting its ban. One of these attorneys receives
only five percent of his clients through direct mail solicitation, and the other receives only
twenty-five percent of his clients through direct mail. Appellee’s Brief at 14, 15 (citing
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Tr. at 226-27, 289). Thus, a blanket ban on all direct mail solicitation by personal injury
lawyers in New Mexico will not protect the other seventy-five to ninety-five percent of
the clients harmed by these two lawyers. Nor will it protect the infinitely greater number
of clients who are served by other lawyers who might someday participate in direct mail
solicitation, even accepting the Board’s mighty assumption that all attorneys who
advertise by direct mail are by definition incompetent to represent their clients, regardless
of whether the clients were obtained by such solicitation. The ban, therefore, “provides
only ineffective or remote support for the [Board’s] purpose” of protecting the integrity of
the bar by eliminating these bad practices. Central Hudson, 447 U.S. at 564.
Regarding its asserted interest in protecting the privacy of direct mail recipients,
the Board’s record also identifies the real harm suffered by accident victims who receive
solicitation letters right after suffering an injury or the loss of a loved one. The Court in
Went For It distinguished a long line of precedent and held that the receipt of offensive
printed material, even though not misleading, could constitute a constitutionally
impermissible privacy invasion. 115 S. Ct. at 2378-79 (distinguishing Shapero, 486 U.S.
at 476; Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 72 (1983); and Cohen v.
California, 403 U.S. 15, 21 (1971)). The Court pointed out that with its thirty-day
restriction on direct mail solicitation to accident victims, Florida was protecting the
“privacy and tranquility” of its citizens “while wounds are still open,” and “forestall[ing]
the outrage and irritation with the state-licensed legal profession that the practice of direct
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solicitation only days after the accident has engendered.” Went For It, 115 S. Ct. at 2379.
In so holding, the Court emphasized the importance of Florida’s anecdotal record which
detailed the harms suffered by accident victims who received solicitation letters so soon
after suffering their injuries. Id. at 2377-78.
In this case, New Mexico argues that because it has developed a similar record, its
restriction on direct mail solicitation must also be upheld. In so arguing, however, the
Board has condensed the application of the final two elements of the Central Hudson test
into one. Not only must the harms asserted by the state be real and capable of redress by
the state’s chosen regulation, but also the regulation must be no broader than necessary to
serve the state’s interest. Central Hudson, 447 U.S. at 565. This final element of the test
is New Mexico’s undoing.
New Mexico’s ban does directly and materially advance its asserted interest in
protecting the privacy of accident victims—it eliminates the receipt of these letters
altogether. We are unable to conclude, however, that New Mexico’s chosen restriction is
sufficiently narrowly tailored to withstand constitutional scrutiny.
In upholding the “fit” of Florida’s thirty-day ban, the Court pointed out that the
respondents’ challenge that the ban was too broad “would have force if the Bar’s rule
were not limited to a brief period and if there were not many other ways for injured
Floridians to learn about the availability of legal representation during that time.” 115 S.
Ct. at 2380 (emphasis added). In concluding that the thirty-day ban was constitutional,
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the Court said “[t]he palliative devised by the Bar to address these harms is narrow both
in scope and in duration.” Id. at 2381 (emphasis added). The Court distinguished
Florida’s restriction from the one struck down in Shapero, which was a “broad ban on all
direct mail solicitations, whatever the time frame and whoever the recipient.” Id. 2378
(emphasis in original). The New Mexico ban is a complete ban on all personal injury
direct mail solicitation, no matter what the time frame, and as such is as broad in scope
and duration as it can possibly be.
The Board argues that “New Mexico’s ban is proportional in that it effects only
four lawyers.” Aplt. Reply Brief at 11. According to the Board, therefore, the ban merely
“prohibit[s] the advertising activities of this marginal group of attorneys . . .” Id. Mr.
Revo contends that the ban affects at least eight New Mexico personal injury attorneys
who were using direct mail solicitation at the time it was enacted. In fact, it affects every
New Mexico attorney who might ever decide to expand his practice to include personal
injury clients or who might decide that direct mail is a good way to reach such clients,
without any showing that such attorneys have engaged in or are necessarily even likely to
engage in the unethical practices identified by the Board. “[M]erely because targeted,
direct-mail solicitation presents lawyers with opportunities for isolated abuses or mistakes
does not justify a total ban on that mode of protected commercial speech.” Shapero, 486
U.S. at 476 (citing In re R.M.J., 455 U.S. at 203).
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There are several less-burdensome alternatives available to the
Board—alternatives which the Board has not shown would be insufficient to materially
address its concerns. While it is true that the “least restrictive means test has no role in
the commercial speech context,” Went For It, 115 S. Ct. at 2380, “the existence of
‘numerous and obvious less-burdensome alternatives to the restriction on commercial
speech . . . is certainly a relevant consideration in determining whether the “fit” between
ends and means is reasonable.’” Id. (quoting Cincinnati v. Discovery Network, Inc., 113
S. Ct. 1505, 1510 n.13 (1993)). The Board has not shown why subjecting personal injury
direct mail letters to a screening process would not protect against misleading potential
clients. All other attorney direct mail solicitation letters are subjected to this screening
process, so there can be no argument that such a requirement would be a regulatory
burden, particularly in light of the Board’s claim that only four attorneys even use such
letters. Also, if, as Mr. Revo claims, the real harms identified by the Board are the result
of the unethical practices of a handful of attorneys, the existing regulations (or enhanced
enforcement of those regulations) for disciplining attorneys for violations of the Rules of
Professional Conduct should adequately address those harms. Finally, the Board has not
shown why a thirty-day ban similar to Florida’s would not adequately address the harms it
has identified.
The Board argues that the harms it has identified are without time limits, and that
grieving does not fit into a neat thirty-day cycle. This may be true, but the Constitution
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favors disclosure of information, even in the commercial speech context. The Board has
shown that it has significant interests in protecting the emotional well-being of members
of the public and in assuring that individuals responding to direct-mail solicitations will
be represented by competent attorneys. The Board has failed, however, to demonstrate
that its interests outweigh the public’s right to at some point receive truthful and non-
misleading written advertising that is plainly and conspicuously marked “Advertising
Material” or “Lawyer Advertising.”
As applied to Mr. Revo and the letter he proposes to send to personal injury
victims, New Mexico Supreme Court Rule 16-701(C)(4) is an unconstitutional violation
of the First Amendment. New Mexico’s complete ban on attorney direct mail solicitation
to personal injury victims is not narrowly tailored to serve the Board’s interests, and is
therefore unenforceable. See Board of Trustees, State Univ. of N.Y. v. Fox, 492 U.S.
469, 483 (1988) (although as applied holding on commercial speech restriction does not
assure a defense to all others whose own commercial solicitation may be constitutionally
proscribed, rationale of narrow-tailoring holding may be so broad as to render statute
effectively unenforceable).
AFFIRMED.
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