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Small Firm Takes Big Bankruptcy Fight to High Court
The National Law Journal
November 30, 2009
image: PhotoDisc Photography
Alan Milavetz remembers how his mother, "in typical Jewish-mother fashion," always urged him to be a doctor, lawyer or engineer when he grew up. "She didn't say doctor, debt relief agency or engineer," recalled the personal injury lawyer.
For Milavetz and a number of lawyers across the country, a 2005 federal law requiring them to advertise as a debt relief agency -- regardless of whether they offer sporadic or regular bankruptcy advice to clients -- irritates like a pair of ill-fitting shoes.
That requirement is in the Bankruptcy Abuse Prevention and Consumer Protection Act, a comprehensive package of reform measures. However, it is not the only reason Milavetz, Gallop & Milavetz, a small general practice firm in Edina, Minn., has fought the inclusion of lawyers in the law's debt relief agency provisions all the way to the U.S. Supreme Court.
In particular, a red flag soared in the mind of the firm's Barbara Nevin when she read the law's restriction on the kind of advice that a lawyer may give to someone who may be contemplating bankruptcy. The restriction prohibits them from advising persons of certain limited means to incur additional debt.
Nevin, who handles bankruptcy cases among other work, and firm founder Robert Milavetz saw a huge potential ethical conflict there for all types of lawyers. The restriction, together with the law's advertisement and disclosure requirements, they believed, also struck at the heart of fundamental First Amendment values. "It's a huge challenge for any firm to litigate against the federal government, but especially for us," said Robert's son, Alan Milavetz, noting the firm has 10 lawyers. "But there comes a point when if you think you're right -- and we do -- you move on it."
The firm's four-year odyssey culminates on Tuesday in the Supreme Court when the justices hear arguments in Milavetz, Gallop & Milavetz v. U.S. "This is an evil law prohibiting speech, and among the least powerful people, interfering with their right to get reasonable advice," Robert Milavetz said. "If we don't get a judgment that this law is unconstitutional, I have said we will handle no more consumer bankruptcy cases, and we think no true lawyer can handle them as well."
FIRST AMENDMENT CRUSADER
Law firms are rather rare name parties in Supreme Court cases. A rough look over the past two decades reveals only five, three of which involved major firms such as O'Melveny & Myers, then-Swidler Berlin and then-Milberg Weiss Bershad Hynes & Lerach.
The Milavetz law firm, founded nearly 50 years ago in Edina, a suburb of Minneapolis, is not as unlikely a First Amendment crusader as might appear at first glance. That's primarily because of Robert Milavetz. From the time he was 13 years old and discovered the injustice of McCarthy-era loyalty oaths, he has been passionate about the First Amendment. After putting himself through law school while working as a prison guard and raising three children, Milavetz became a legal aid lawyer until he opened his own practice in 1963. First Amendment cases have always been part of his legal work.
"He probably knows more about the First Amendment than anyone I know," said his son, who joined the firm 25 years ago. "My guess is it had something to do with needing to take the business available in the 1960s. The Vietnam War was going on, and there were an awful lot of people with legitimate bases for not serving. There also were many societal changes going on, raising issues involving obscenity, freedom of religion, flag burning."
Those kinds of cases, often unpopular, normally would not be handled by large corporate law firms, he added, but by someone like his father, with a personal interest in them and the ability to do them. "I've taken on the U.S. government many times since I began practicing law in many different First Amendment issues," said the elder Milavetz. "I've won over 100 First Amendment cases, including the first where a jury in a criminal case found hard-core pornography protected under the First Amendment."
In the 1970s, the firm began to grow; the type of cases expanded and became more traditional. The firm's work now includes bankruptcy, personal injury, family law, workers' compensation and criminal defense. And the door is always open to First Amendment problems. "My father has never shied away from taking on a case that is challenging, difficult, time-consuming or expensive," said Alan Milavetz, adding that the case now in the Supreme Court "certainly fits the bill."
MAKING THE CASE
Shortly after the 2005 law took effect, Nevin recalled, she sat down with Robert Milavetz to discuss what she viewed as its problems. Milavetz, she said, immediately saw the First Amendment issues and started planning their attack. She and Milavetz, along with two clients, became plaintiffs in the constitutional challenge that they filed one month after the law became effective.
