The "watchman for Truth": Professional Licensing and the First Amendment

• Publication year: 2000

SEATTLE UNIVERSITY LAW REVIEWVolume 23, No. 4SPRING 2000

ARTICLES

The "Watchman for Truth": Professional Licensing and the First Amendment

Robert Kry(fn*)

The modem state owes and attempts to perform a duty to protect the public from those who seek for one purpose or another to obtain its money. . . . But it cannot be the duty, because it is not the right, of the state to protect the public against false doctrine. . . . In this field every person must be his own watchman for truth. . .(fn1)

Table of Contents

Introduction................................................................ 886

I. The Professional Speech Doctrine........................... 891

A. Professional Speech and Professional Conduct.............. 891

B. The Value-Neutral Test for Restraints on Professional Speech......................................................897

1. Thomas v. Collins....................................................897

2. Lowe v. SEC...........................................................901

3. Analysis.................................................................906

C. The Value-Based Test for Restraints on Professional Speech...................................................... 919

1. NAACP v. Button and Its Progeny.......................... 919

2. Other Cases........................................................... 924

D. Summary..................................................................... 928

II. Current Application of the Professional Speech Doctrine............................................................ 929

A. The Question of Software............................................ 929

B. Recent Caselaw............................................................ 935

1. Toucher v. Bom....................................................... 935

2. Unauthorized Practice of Law Committee v. Parsons Technology, Inc........................................... 943

C. Academic Commentary............................................... 946

D. Doctrinal Significance.................................................. 951

III. Reconsidering Professional Speech.......................... 954

A. The Historical Perspective........................................... 954

B. First Amendment Theories and Their Limitations.................................................................. 957

C. The Legal Realist Perspective...................................... 968

conclusion: professional speech and Client Empowerment.................................................. 973

Introduction

States have exercised broad authority over the practice of professionals for most of this century.(fn2) This regulation currently extends not only to the traditional professions such as medicine and law,(fn3) but to a wide array of modern occupations.(fn4) In addition, the federal government extensively regulates many forms of professional practice.(fn5)

A typical method of professional regulation is licensure. Under this system, a professional must obtain a license from a government agency before engaging in certain acts defined to comprise the practice of that profession.(fn6) Today, state or federal governments license some 500 different occupations, and licensing laws directly affect as much as one-third of the workforce.(fn7)

Although licensing laws vary widely, certain characteristics are common. First, the licensure scheme typically sets out certain requirements that the professional must fulfill before practicing. These may include completing a prescribed course of study, passing prescribed examinations, and agreeing to practice according to defined standards.(fn8) Second, licensure schemes often grant the administering agency some degree of authority to deny licensure to those deemed unfit to practice the profession.(fn9)

Practice by an unlicensed person is punishable whether or not there is any actual harm to the public. State Bar v. Cramer(fn10) is representative. Virginia Cramer operated a low-cost form-preparation and advice service for parties seeking no-fault divorces in the state of Michigan. The state bar alleged that her business was in violation of the state's unauthorized practice of law statute. Despite the lack of any evidence that her work was deficient and the fact that all of her customers knew that she was not an attorney, the court enjoined her business. When she continued to operate it, she was jailed.(fn11)

Licensure can be compared with certification, another means of professional regulation. Certification is similar to licensure in that the government (or a private certification authority) prescribes requirements and reviews the qualifications of those who seek to obtain a designation. However, certification differs from licensure in that "lack of certification does not bar someone from practicing the certified trade; it only prohibits him from presenting himself to the public as a 'certified' practitioner."(fn12)

The most common interest asserted to justify professional practice regulation is the protection of the public.(fn13) Proponents of professional licensing argue that regulation is necessary to prevent harm from unscrupulous or incompetent practice.(fn14) They note that professional-client relationships are frequently marked by a disparity in knowledge that may hamper the ability of clients to make informed decisions.(fn15)

On the other hand, there is a large body of historical, economic, and sociological literature that suggests that the primary motivation for professional licensing laws is economic self-interest.(fn16) By restricting entry into the practice of a profession, professional groups can insulate themselves from competition and derive monopoly profits at the expense of consumers, who are denied lower-cost alternatives to the professional's services.(fn17) This view is consistent with the fact that the principal proponents of licensing laws are typically the occupational groups themselves.(fn18) Adherents to this position also note that most of the justifications for licensure could be equally well addressed by systems of certification.(fn19)

Like most statutes, professional licensure systems that neither concern a suspect classification nor burden a fundamental right are subject to only rational basis review in the courts: they are constitutional so long as they have a reasonable relationship to a legitimate government interest.(fn20) Protection of the public is certainly a legitimate government interest, and in most cases courts have held that licensing regimes are a reasonably related means of pursuing that interest, even if the profession enjoys a consequential economic benefit. While courts have invalidated some licensing laws under the rational basis test,(fn21) in most cases, they have found them constitutional.(fn22)

This Article addresses a particular aspect of many kinds of professional practice: the rendering of advice to clients. Drawing on their knowledge and experience, professionals may recommend a certain course of action to their clients in the course of their practice. The client may then assess the recommendation and decide whether or not to act on it. This aspect of professional practice involves a speech-related activity, so government regulation might raise at least a colorable First Amendment issue.(fn23)

This Article also focuses on a particular aspect of the regulation of professional advice, namely, licensure. When professional advice-rendering activities are covered by a system of licensure, particularly acute First Amendment questions arise because the license requirement arguably acts as a prior restraint on speech. A prior restraint is a legal requirement that an individual obtain permission from the government before speaking.(fn24) Protection of speakers from regimes of prior restraint lies at the heart of the First Amendment's guarantee of free speech. As the Supreme Court explains, "[Pjrior restraints on speech and publication are the most serious and least tolerable infringement on First Amendment rights."(fn25) This view reflects the First Amendment's historical motivation: British laws that had sought to impose licensing requirements on the press.(fn26)

Prior restraints are particularly severe when the licensing requirements impose significant burdens on the speaker,(fn27) or when they grant administrative officials broad discretion in evaluating applications.(fn28) Many professional licensing schemes fall into both categories.

Professional licensing laws applied to individuals who render advice present a conflict between the states' traditional authority to regulate professions and the First Amendment prohibition on prior restraints of speech. The Supreme Court has developed a unique jurisprudence which I believe can be reduced to two rules, the operation of which depend on both the content and the context of the advice given. Though these rules rest on venerable First Amendment theories, the theories themselves do not justify the broad licensing power claimed by the states today. I call for a reevaluation of the professional speech doctrine driven by the values that the First Amendment represents.

Part I of this Article examines the evolution of the judicial doctrine of professional speech. Many courts uphold restrictions on...