Bates v. State Bar of Ariz.

Supreme Court of the United States
433 U.S. 350 (1977)

ELI5:

Rule of Law:

A state bar's blanket suppression of truthful price advertising for routine legal services by attorneys is a violation of the First Amendment's protection of commercial speech.

Facts:

John R. Bates and Van O’Steen were attorneys licensed to practice in Arizona.
In 1974, they opened a 'legal clinic' in Phoenix, aiming to provide services at modest fees to persons of moderate income.
The clinic focused on routine matters such as uncontested divorces, adoptions, and simple personal bankruptcies, using standardized procedures to keep costs down.
After two years, Bates and O'Steen concluded their clinic could not survive without advertising to generate the necessary high volume of clients.
On February 22, 1976, they placed an advertisement in the Arizona Republic newspaper.
The ad stated they offered 'legal services at very reasonable fees' and listed specific prices for several routine services.
This action constituted a clear violation of Arizona Supreme Court Disciplinary Rule 2-101(B), which imposed a broad ban on attorney advertising.

Procedural Posture:

The President of the State Bar of Arizona filed a complaint against Bates and O'Steen in response to their newspaper advertisement.
A Special Local Administrative Committee held a hearing and recommended that both attorneys be suspended from practice for six months.
On review, the Board of Governors of the State Bar recommended reducing the sanction to a one-week suspension for each attorney.
Bates and O'Steen (appellants) appealed to the Supreme Court of Arizona, the state's highest court, challenging the rule on Sherman Act and First Amendment grounds.
The Supreme Court of Arizona rejected the appellants' claims but reduced the punishment to censure only, recognizing the advertisement was a good-faith test case.
Bates and O'Steen appealed the judgment of the Supreme Court of Arizona to the U.S. Supreme Court.

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Issue:

Does a state bar's disciplinary rule that prohibits attorneys from advertising the prices of routine legal services violate the First Amendment's freedom of speech, as applied to the states through the Fourteenth Amendment?

Opinions:

Majority - Justice Blackmun

Yes. A state's blanket ban on truthful newspaper advertising of routine legal services by attorneys violates the First Amendment. While commercial speech can be regulated, it is not wholly outside the protection of the First Amendment, and the state's justifications for a complete ban are insufficient. The Court first affirmed that the Sherman Act claim was barred by the state-action exemption established in Parker v. Brown, because the advertising ban was an affirmative command from the Arizona Supreme Court acting as a sovereign. Turning to the First Amendment, the Court extended its reasoning from Virginia Pharmacy Board v. Virginia Consumer Council, holding that the public's interest in the free flow of commercial information applies to legal services. The Court systematically rejected the State Bar's justifications for the ban, including adverse effects on professionalism, the inherently misleading nature of legal ads, stirring up litigation, and negative economic impacts, finding them to be speculative or unpersuasive. The Court concluded that while false, deceptive, or misleading advertising is subject to restraint, and reasonable time, place, and manner restrictions are permissible, a state cannot justify a complete suppression of truthful information about the availability and terms of routine legal services.

Concurring-in-part-and-dissenting-in-part - Chief Justice Burger

No. The state's disciplinary rule does not violate the First Amendment. While agreeing with the majority on the Sherman Act issue, the dissent argues that the holding on advertising will be injurious to the public. It distinguishes Virginia Pharmacy by noting legal services are not standardized products like prescription drugs. Legal services, even seemingly 'routine' ones like an uncontested divorce, are complex and individualized, making price advertising inherently misleading. The dissent expresses fear that the Court's decision will create unmanageable enforcement problems for state bars and that it is a 'hasty plunge' into a sensitive regulatory area.

Concurring-in-part-and-dissenting-in-part - Justice Powell

No. The state bar's rule is constitutional. While concurring on the Sherman Act holding, this dissent argues that the Court's First Amendment decision fails to give appropriate weight to the vast potential for deception in advertising professional services compared to tangible products. It criticizes the majority’s distinction between 'routine' and 'unique' services as facile and unworkable, using the example of an uncontested divorce to illustrate the host of complex issues that can arise. The dissent also contends that policing such advertisements for truthfulness would be wholly impractical for state bars and that the decision will ultimately promote distrust of lawyers and disrespect for the justice system.

Dissenting - Justice Rehnquist

No. The disciplinary rule does not violate the First Amendment. Concurring on the Sherman Act claim, the dissent reiterates the view from Virginia Pharmacy that the First Amendment was not intended to protect essentially commercial activity like advertising. The dissent argues that once the Court abandoned the 'constitutionally sound and practically workable' distinction from Valentine v. Chrestensen, which left commercial speech unprotected, it started down a 'slippery slope' where workable differentiations largely evaporated. The First Amendment is demeaned by using it to protect advertisements for goods and services.

Analysis:

This landmark decision fundamentally altered the legal profession by extending First Amendment protection to attorney advertising. It effectively struck down the blanket prohibitions on advertising that had been in place for decades, forcing state bars to craft new rules that regulate only false or misleading speech. The case established that professional services are not exempt from the commercial speech doctrine articulated in Virginia Pharmacy, thereby opening the door for lawyers to compete for clients in the public marketplace. While the holding was narrowly framed around truthful newspaper ads for routine services, its reasoning has been applied to various forms of advertising, profoundly changing the business of law and consumer access to legal information.

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