433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977)
After admission to the bar in 1972, appellants worked as attorneys with the Maricopa County Legal Aid Society.1 In March 1974, they left the Society and opened a law office in Phoenix that they called a legal clinic.2 Their aim was to provide legal services at modest fees to persons of moderate income who did not qualify for governmental legal aid by accepting only routine matters such as uncontested divorces, uncontested adoptions, simple personal bankruptcies, and changes of name.3
To keep costs down, they relied on extensive use of paralegals, automatic typewriting equipment, and standardized forms and office procedures.4 After conducting their practice in this manner for two years, they concluded that advertising, and in particular the advertising of fees, was necessary to generate the volume of business required for the clinic to survive.5 On February 22, 1976, they placed an advertisement in the Arizona Republic, a daily newspaper of general circulation in the Phoenix metropolitan area.6
The advertisement stated that appellants were offering legal services at very reasonable fees.7 It listed exact prices for the services, including $175 plus a $20 filing fee for an uncontested divorce or legal separation, $225 plus a $20 filing fee for an uncontested adoption, $250 plus a $55 filing fee for a non-business bankruptcy, and $95 plus a $20 filing fee for a change of name, with personal injury cases handled on a contingent fee basis.8
Upon the filing of a complaint initiated by the president of the State Bar, a hearing was held before a three-member Special Local Administrative Committee.9 The committee recommended that each of the appellants be suspended from the practice of law for not less than six months.10 Upon further review by the Board of Governors of the State Bar, the Board recommended only a one-week suspension for each appellant, the weeks to run consecutively.11
Appellants sought review in the Supreme Court of Arizona.12 The court rejected both their Sherman Act and First Amendment claims, concluded that the conduct violated the disciplinary rule, and imposed a sanction of censure.13 Appellants then appealed to this Court, which noted probable jurisdiction.14
Whether the Arizona Supreme Court's disciplinary rule restricting attorney advertising is exempt from Sherman Act challenge under the state-action doctrine?15
Yes. The Arizona Supreme Court possesses plenary authority over the regulation of the practice of law in Arizona.18 It adopted Disciplinary Rule 2-101(B) as an affirmative command under its Rules 27(a) and 29(a).19 This renders the restraint compelled by direction of the State acting as sovereign rather than private conduct prompted by state action.20
The State Bar functions merely as an agent of the court under continuous supervision.21 The rule reflects a clear articulation of state policy subject to pointed re-examination by the court in enforcement proceedings.22 Because the court is the ultimate body wielding the State's power over the practice of law, the Parker exemption shields the rule from Sherman Act attack.23
The disciplinary rule is exempt from Sherman Act challenge under the state-action doctrine.24
Whether the First Amendment prohibits a state from enforcing a disciplinary rule that bans newspaper advertising of prices for routine legal services by attorneys?25
Commercial speech receives First Amendment protection.26 A state may not impose a blanket prohibition on truthful newspaper advertising of prices for routine legal services unless the restriction serves a substantial governmental interest and is no more extensive than necessary to serve that interest.
No. Bates and O'Steen published a newspaper advertisement in the Arizona Republic listing exact fees for uncontested divorces, uncontested adoptions, simple personal bankruptcies, and changes of name.27 These were routine services performed with standardized procedures.28 The advertisement contained no claims as to quality or deceptive statements.29 The state's asserted interests in preserving professionalism, preventing misleading information, avoiding stirring up litigation, and easing enforcement do not justify total suppression.30
The advertisement conveyed truthful price information that assists consumers in making informed decisions.31 The services advertised lend themselves to fixed pricing.32 Less restrictive alternatives such as targeted regulation of false claims would suffice.33 The rule therefore violates the First Amendment as applied to this protected commercial speech.34
The First Amendment prohibits enforcement of the disciplinary rule against truthful newspaper advertising of prices for routine legal services.35
Related opinions on this issue
Chief Justice Burger agreed with the Sherman Act holding but dissented from the First Amendment ruling.36 He argued that legal services cannot be standardized like prepackaged drugs.37 Price advertising of variable services inevitably misleads the public.38
He emphasized that even an uncontested divorce involves unpredictable variables such as child custody and property settlements.39 Fixed-price claims are incomplete and potentially harmful.40 He warned that the decision imposes unmanageable regulatory burdens on deficient bar disciplinary machinery without adequate safeguards for the public.41
Joined by Justice Stewart
Justice Powell joined the Sherman Act portion but dissented on the First Amendment issue.42 He argued that the distinction between routine and unique legal services is illusory.43 Even apparently simple matters implicate diagnostic and advisory functions that cannot be known in advance.44
He stressed the enforcement difficulties arising from the inability to test empirically claims about reasonableness of fees or scope of services.45 He noted that the profession's self-regulatory mechanisms are already strained.46 He cautioned that constitutionalizing price advertising would inhibit ongoing experimentation by the bar and states in expanding access to legal services.47
Justice Rehnquist joined the Sherman Act holding but dissented from the First Amendment analysis.48 He maintained that the First Amendment does not protect advertisements of goods and services.49 He argued that the Amendment is demeaned when invoked to shield commercial advertising of legal services.50
He viewed the distinction between commercial and other speech as constitutionally sound and practically workable.51 He argued that once commercial speech was brought within the Amendment's coverage the shift to case-by-case adjudication became inevitable and undesirable.52