Assistant Solicitor General Cleland Welton told a three-judge panel that the court's 2023 decision in Brokamp v. D.C.
, which held that New York's licensing requirements around mental health counseling are content-neutral and therefore only subject to intermediate scrutiny, "squarely forecloses" Upsolve Inc. and the Rev. John Udo-Okun's argument that the advice it offers debtors is protected by the First Amendment."A license requirement draws a distinction between those speakers who are qualified to render professional advice and those speakers who are not so qualified," he said.
One of the plaintiffs' attorneys, Brian Morris of the Institute of Justice, told Law360 in an email Wednesday that for the last two years, Upsolve and the American Justice Movement — its training program for non-attorney professionals — has "provided valuable advice to help New Yorkers respond to debt collection actions."
"These one-on-one conversations don't only benefit AMJ's clients, they're also constitutionally protected by the First Amendment," he said. "We're hopeful that the Second Circuit will understand that and keep the injunction in place that allows AMJ volunteers to give their advice without breaking the law."
U.S. District Judge Paul Crotty had ruled in 2022 that the state cannot stop Upsolve from coaching people being sued by debt collectors — at least while the lawsuit is playing out — saying the organization is engaging in speech, not in conduct reserved for lawyers.
In his decision, Judge Crotty maintained that the rules around the unauthorized practice of law trigger strict scrutiny, and that under Brokamp a licensure requirement "cannot lower that bar" simply because it is characterized as a professional regulation. He issued that opinion before the Second Circuit issued its decision in Brokamp.
During Wednesday's oral arguments, plaintiffs' counsel Robert McNamara of the Institute of Justice pushed back against the notion that the district court applied the wrong standard under Brokamp. Unlike in that case, he argued, the law at the heart of his clients' lawsuit is triggered by the conversation's contents, not its purpose.
"Brokamp says that [licensure] law got intermediate scrutiny because once you are engaged in a conversation with a therapeutic purpose, you could say anything at all and still violate the law," he said. "You could do nothing but talk about baseball and still violate the counselor licensing law. You can't give legal advice by talking about baseball."
Upsolve and Udo-Okon preemptively filed their lawsuit in early 2022, asking the court to make clear with an injunction that the laws against unauthorized practice of law do not apply to the work they do, including person-to-person advice.
Welton did agree that a non-attorney could hypothetically give someone facing a legal process a pamphlet with information they think would be helpful to them. They just can't "apply their own legal knowledge, judgment, skill [and] expertise to the facts of a particular case."
"The thing that they can't do is give individualized advice to particular clients in a one-on-one scenario," he said.
The state declined to comment.
U.S. Circuit Judges Pierre Nelson Leval, Richard Joseph Sullivan and Sarah A. L. Merriam sat on the panel for the Second Circuit.
Udo-Okon and Upsolve are represented by Robert McNamara and Brian Morris of the Institute for Justice.
The state of New York is represented by Cleland Welton of the Office of the New York State Attorney General.
The case is Upsolve Inc. et al. v. James, case number 22-1345, in the U.S. Court of Appeals for the Second Circuit.
--Additional reporting by Henrik Nilsson and Emily Lever. Editing by Dave Trumbore.
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