Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy – Oral Argument – April 19, 1994

Media for Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy

Audio Transcription for Opinion Announcement – June 13, 1994 in Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy

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William H. Rehnquist:

We’ll hear argument now in 93-639, Silvia S. Ibanez v. the Florida Department of Professional Regulation.

Ms. Ibanez.

Silvia S. Ibanez:

Mr. Chief Justice, and may it please the Court:

This case presents an important commercial speech issue.

Specifically, whether the Board of Accounting censure of Petitioner’s truthful communications in attorney advertising violate her First Amendment rights.

The truthful speech in question consists of the CPA and the CFP credentials, which communicate licensure status.

Petitioner is indeed a CPA, licensed in good standing by the State of Florida.

Petitioner is indeed a CFP licensee in good standing.

The Board has acknowledged and agreed in accepting these findings of facts.

The Board says, no, that these truthful communications are somehow not… are somehow misleading.

In doing so, it charges Petitioner with a deceptive advertising statute and regulations.

It does so by using a contrived rationale.

It uses a complex hypothetical, an irrelevant argument, that attempts to transform what is truthful speech into violative conduct.

The record is devoid of anyone having been misled.

The record is absolutely devoid of any violative conduct.

The record does disclose that no one has been misled as to Petitioner’s truthful speech contained within her attorney advertising.

Thus, the Board is punishing Petitioner for truthful speech.

There are no charges as to conduct.

And the BOA’s, the Board of Accounting’s, censure of Petitioner’s truthful speech provides no latitude.

It constitutes a ban.

Sandra Day O’Connor:

Ms. Ibanez, may I inquire of you?

You… do you acknowledge that you engage in public accounting on occasion?

Silvia S. Ibanez:

Your Honor, the record is clear, the Petitioner has maintained that she does not practice public accounting; she practices law.

She does this by choice, because she is authorized to practice public accounting.

The Board, however–

Sandra Day O’Connor:

If you did practice public accounting, do you recognize that you have to abide by the regulations of the Board of Public Accounting?

Silvia S. Ibanez:

–Your Honor, I believe that anyone who practices public accounting or doesn’t practice public accounting is subject to Chapter 473.

Yes, Your Honor.

Sandra Day O’Connor:

And did you take a different position earlier in the litigation?

Silvia S. Ibanez:

No, Your Honor.

Silvia S. Ibanez:

I believe that the entire record of the rule challenge proceedings clearly states that Petitioner understands that Chapter 473 has two different layers of regulation.

The first layer covers all CPA’s good moral conduct, continuing education requirements and so forth and so on.

There is a second layer of regulation that, by the express provisions of Chapter 473 and some other rules, are conditioned on the practice of public accounting.

Sandra Day O’Connor:

Reading the briefs, I got the impression that the position you’ve taken has shifted somewhat during the course of the proceedings.

Silvia S. Ibanez:

Your Honor, I believe the record is clear that in the rule challenge proceedings, a lot of hypothetical questions were posed… that was not the disciplinary proceeding… and the questions, I believe, and the answers are consistent.

The record–

Sandra Day O’Connor:

And does the Board take the position that your law firm somehow has to be licensed or authorized as… by the Board of Accounting for accountancy?

Silvia S. Ibanez:

–Your Honor, it appeared that initially the Board thought so.

It included a charge in the amended complaint.

But even after hearing Petitioner’s opinions in the rule challenge proceeding, it decided to withdraw that charge just a few mere days before the disciplinary hearing.

The record is clear.

So, there has been no–

Sandra Day O’Connor:

And while I have you interrupted, the CFP designation after your name in the advertisement, how is somebody reading that ad supposed to verify what that means and whether you’re a member in good standing of whatever that organization is?

Silvia S. Ibanez:

–Your Honor, the record is clear, at the disciplinary transcript found at the joint appendix, that the public is very well aware and informed about the CFP credentialing… considers it quite valuable.

Mr. Robert Goss, the expert witness, spoke about the hundreds of calls that they get about referrals from the CFP organization.

It is a national, bona fide organization.

There are strict requirements as to a comprehensive examination to be–

Sandra Day O’Connor:

But does… your advertisement at least doesn’t make any explanation about what that is or who has issued the certificate, I take it?

Silvia S. Ibanez:

–Your Honor, the CPA and CFP within the context of attorney advertisement, and in the case of a multiple-licensed professional such as Petitioner is, clearly could disclose some disclaimers in connection to the–

Sandra Day O’Connor:

Excuse me.

The question I asked was whether your advertisement, the one at issue here, had any explanation about the CFP designation?

Silvia S. Ibanez:

–No, Your Honor.

Anthony M. Kennedy:

Thank you.

Well, could… could the State require some explanation of the certified financial planner designation?

Silvia S. Ibanez:

I believe that the State could certainly require, as to the CPA, some disclaimer.

And that disclaimer is the threshold issue.

And that disclaimer would cover the CFP issue.

The CFP issue would come later.

Because this is in the context of attorney advertising, Your Honor.

Anthony M. Kennedy:

I’m not sure that I understood your answer.

Anthony M. Kennedy:

I think it was a concise answer.

But you’re saying that the State could require this of an… of an accountant, but not of an attorney?

Silvia S. Ibanez:

Your Honor, I believe in the context of attorney advertisement the CPA credential, which is the credential regulated by the Board, certainly the Board regulate for some disclaimer language.

It has not done so here.

Anthony M. Kennedy:

In other words, your position then, is that a State may require some sort of disclaimer or explanation of the use of the term C… certified financial planner, CFP, either when that is used by someone in conjunction with advertising their services as an attorney, or in advertising their services as an accountant?

Silvia S. Ibanez:

Yes, Your Honor, with the following qualification if I may, because it’s the CPA credential that’s the threshold issue.

If there was a disclaimer or additional information required of a CPA licensee within attorney advertising that would say, for example, not engaged in public accounting, or a positive disclaimer that says, attorney engaged in the practice of law, then that disclaimer would serve as to all other multiple credentials, whether Petitioner includes two, three or four credentials that are all, on its face, truthful communications, rather than require Petitioner to add disclaimers to every credential.

I believe that would only confuse the public.

Harry A. Blackmun:

Of course, I don’t understand why there’s concern about lack of information as to what the letters mean.

After all, physicians use M.D. There are a lot of people that don’t know what that means.

And I… I don’t recall anybody ever requiring an explanation of M.D.–

And now we’re developing the practice among lawyers of using E-S-Q, Esquire.

Silvia S. Ibanez:

Yes, Your Honor.

John Paul Stevens:

May I ask… you said there are two levels of regulation by the Accountancy Board, and you comply with one about your general qualifications.

And I gather you do not comply with the different level?

Silvia S. Ibanez:

Your Honor, Petitioner has not been charged as to whether she complies or doesn’t comply regarding the allegation of unlicensed firm status; only when she is confronted directly, and not indirectly, can she be afforded her due process rights.

And then there can be a conclusion, and not a summary conclusion, about whether she has violated this provision or not.

John Paul Stevens:

What… just help me out a little bit… what is the nature of the reg… the second layer of regulation?

What are we talking about anyway?

What do they require that arguably you may or may not do?

I’m not asking you to plead guilty, but what is it that we’re talking about here?

Silvia S. Ibanez:

Your Honor, as I understand the Board’s position, Chapter 473, in various of its statutes and in some of its regulations thereunder, actually counts the regulations and the statutes with the phrase

“only if engaged in the practice of public accounting. “

So, apparently there is some concern from the State that in some areas this would apply to only CPA’s in public accounting and not to other CPA’s engaged in the practice of law or banking or other professions.

John Paul Stevens:

But I still don’t understand what this second layer of regulation regulates.

What does it make you do or forbid you from doing?

I mean, what… how could you possibly violate that?

I don’t even understand that.

Silvia S. Ibanez:

Well, I could possibly think of one example in the area of contingency fees, for example.

There is a provision that says CPA’s may not accept in the form of remuneration contingency fees.

Silvia S. Ibanez:

That is a regulation of conduct.

Certainly the Board can regulate conduct.

John Paul Stevens:

I see.

Silvia S. Ibanez:

It has an ample regulatory arsenal to regulate conduct.

It has–

John Paul Stevens:

But that would be contingency fees for performing accounting services?

Silvia S. Ibanez:

–Yes, Your Honor.

John Paul Stevens:

I see.

And you’re saying if you took a contingency fee for handling a lawsuit, that should not violate that provision?

Silvia S. Ibanez:

Yes, Your Honor.

And that is not part of the record.

These are hypothetical musings of the Board.

Ruth Bader Ginsburg:

Were you ever told… was Petitioner ever told expressly what she must do to bring herself into compliance with the regulation that she was censured for violating?

Silvia S. Ibanez:

No, Your Honor.

The record is clear that she was never even given the opportunity.

The Board uses the phrase, “refuse”…

“she refuses to comply, she refuses to comply. “

There is nothing in the record to show that she’s ever been offered… first of all, she was never charged… and then she was never offered to then comply because of the charge.

David H. Souter:

Is–

Silvia S. Ibanez:

She could not have refused if she was not offered.

David H. Souter:

–In… in your view, does the State have a valid interest in… in prohibiting the… the… the formation of an accounting firm which includes non-accountants… or non-CPA’s, I should say?

Silvia S. Ibanez:

I believe there are some provisions under Chapter 473.

David H. Souter:

Well, I know there’s a provision, but do you… do you agree that it is a valid provision?

Silvia S. Ibanez:

Yes, Your Honor.

I have… I have no problems with any of the regulations of the Board of Accounting.

David H. Souter:

Including the regulation that requires separate firm registration?

Silvia S. Ibanez:

Yes, Your Honor.

All those regulate conduct.

And I believe those are perfectly permissible.

John Paul Stevens:

Okay.

John Paul Stevens:

Do you happen to know whether in Florida CPA’s can list… who are practicing CPA’s… they’re accountants… can they list the fact that they’re lawyers?

Silvia S. Ibanez:

Excuse me.

If I understand the question–

John Paul Stevens:

Could a CPA with… perhaps I should ask your opponent this rather than you… but could a CPA, without violating the regulations, who is a practicing CPA, does tax work and audits and all that sort of stuff… could such a CPA put on his or her business card, also a member of the Florida Bar?

Silvia S. Ibanez:

–I am not quite sure what the answer would be to that question.

I believe that Professor John Sullivan, in the rule challenge proceedings, indicated that CPA’s in accounting practices may certainly add J.D. or Esquire, along with CPA.

So, when the shoe is on the other foot, it is all right.

Anthony M. Kennedy:

Well, from a constitutional standpoint, what’s your answer to that question?

Silvia S. Ibanez:

I believe it is constitutionally permitted.

Anthony M. Kennedy:

In other words, there is a constitutional right for an accountant to say that… who is practicing as an accounting… to list on their letterhead or in their professional announcement the fact that they are an attorney?

Silvia S. Ibanez:

Yes, Your Honor, I think that this Court’s commercial speech cases in the area of attorney advertising clearly articulate the doctrine of truthful speech, on its face, passive speech, non-coercive, relevant to the listener… because the public interest is very well served by providing them more information, not less.

Anthony M. Kennedy:

One other question.

Since you indicate… I think this was your position… that a disclaimer or an explanation of CFP might be required, should this case be remanded?

Silvia S. Ibanez:

No, Your Honor.

I believe the Board’s position in its order is clear… they use the advertising rule, subsection (i), which is an absolute prohibition on the use of the word “certified”.

Subsection (i) does not give leeway for adding disclaimers.

In addition, this case represents a separate discipline.

So, even though the case of Peel v. Illinois Regulatory Commission certainly applies to this case and provides protection… constitutional protection to the speech in this case, it certainly goes beyond.

We’re in an era where many individuals and professionals seek higher education, seek to better themselves for their own reasons, but mostly so that they can offer additional competence to the public.

It–

Ruth Bader Ginsburg:

Ms. Ibanez, do I understand your answer to Justice Kennedy to say that you… you were laced with a total prohibition, and there might not be any controversy if the Board came back with something specific… you might agree with it and there might not be any controversy?

Is that–

Silvia S. Ibanez:

–Yes, Your Honor.

If I may clarify.

Because there are multiple licenses here, whether there were two or three, if the threshold issue is, can the State regulate an ad or restrict the CPA credential by adding more information and more… and a disclaimer, certainly that is always a possibility and consistent with this Court’s decisions.

However, to the extent that there are additional licenses, to what point does… at what point does it begin to chill the speech?

If there are two credentials or three credentials, is the professional then supposed to add a disclaimer to each credential, or just the threshold credential that the Board of Accountancy was trying to clarify?

Ruth Bader Ginsburg:

–But that remains hypothetical at this point, because we don’t have any specifics of what a clarification might be.

Silvia S. Ibanez:

Yes, Your Honor, right now it is hypothetical.

The Board could have chosen that route to add more information to the CPA credential.

Silvia S. Ibanez:

It certainly could have regulated a disclaimer or an asterisk regarding CPA.

It has not done so.

But it may certainly do so.

And that is a more reasonable form of regulation than totally inhibiting and suppressing truthful speech that deserves constitutional protection.

The Petitioner’s speech is truthful.

No one has been misled.

It is non-coercive.

It communicates valuable information.

The truthful speech deserves constitutional protection, not so much to protect Petitioner, but to protect listeners.

This Court has said time and time again, it is the listeners’ rights that we are protecting here, not so much the speakers.

The public interest is well served by providing disclosure of relevant information, to help potential legal clients.

And certainly this is the context presented before the Court… attorney information in attorney advertisement.

So, it is definitely directed to potential legal clients.

Certainly, it is relevant to their decision-making process in helping them choose a lawyer.

The Federal Trade Commission has a staff report that we have cited in our brief regarding the additional information disclosures that should be encouraged and not censured when an attorney attempts to help in this decision-making process that only benefits the marketplace of ideas.

The Central Hudson test, which is a balancing test well known and applied by this Court in the attorney advertising cases, requires a balancing test.

When the speech is truthful, as it is here, and deserves constitutional protection, then the State has a heavy burden.

The State must have a constitutionally adequate reason to suppress Petitioner’s commercial speech.

The State, in this case the Board of Accounting, has not met its burden.

As recent as in the 1993 decision of Edenfield v. Fane, this Court has reiterated that the burden of providing substantial government interest in suppressing Petitioner’s truthful speech must directly advance the government’s goal… in this case, the Board of Accounting’s interest.

In this case, there is no substantial government interest.

Sandra Day O’Connor:

Well, I… I think when you come to the use of cert… CFP, which stands, I guess, for certified financial planner–

Silvia S. Ibanez:

Yes, Your Honor.

Sandra Day O’Connor:

–I would think that at the very least you would have to acknowledge there is a potential there that the public will be misled into thinking that somehow the State has certified you as a certified financial planner.

And, in fact, this is a certificate issued by some private organization, as I understand it.

And so, I would think there would be that much of a concern there at the State level that might justify either an outright ban or some kind of a disclaimer.

Silvia S. Ibanez:

Yes, Your Honor.

But the substantial government interest, I believe, answers the question as to which credential should this additional disclaimer or information be provided to.

Certainly, the Board does not own the word “certified”.

So, whether… whether it’s certified pilot, certified financial planner, certified engineer, it certainly cannot be the word “certified” that does it.

Silvia S. Ibanez:

So, the interest as to disclaimer and more information, I believe, is to the threshold question of, can the Board of Accounting… could it have regulated in a more reasonable way?

Is there a more reasonable fit?

And, yes, a disclaimer to the CPA credential.

And that would have cured any possibility of potentially misleading effect regarding any of the other credentials.

Antonin Scalia:

How could that… how could that be?

What disclaimer attached to the CPA would make it clear that the CFP is not a State credential?

Silvia S. Ibanez:

Justice Scalia, very simply, if there is an asterisk to a CPA credential, not engaged in public accounting–

Antonin Scalia:

Yes.

Silvia S. Ibanez:

–That would cure all misleading effects.

Because the advertising rule says at subsection (2), this only applies to public accounting advertising.

And this is attorney advertising.

So, that disclaimer would cure not only as to the CFP credential, but as to any other credential.

Antonin Scalia:

Well, it would… it would prevent you from misleading any people looking for accountants.

It would not prevent you from misleading people looking for lawyers.

But you’re saying that’s none of the Board’s business, I suppose?

Silvia S. Ibanez:

Your Honor, anyone looking for lawyers has found a lawyer under the attorney advertising and has found a lawyer that complies–

[Laughter]

Antonin Scalia:

But… but the person looking for the lawyer sees CFP> [“] next to CPA> [“] and knows that CPA is a State-conferred certificate and assumes that CFP is a State-conferred… and you say, that’s okay because people looking for lawyers deserve what they get… is that it?

[Laughter]

Silvia S. Ibanez:

Your Honor, I… I will agree with… with Your Honor, but what I would like to say is, if the Florida Bar, who is also the State, regulates attorney advertising… and I believe we all agree on that… and they have already indicated that the credential from a recognized institution is all right with them, then obviously the attorney who uses CFP in the Bar’s… in advertising rules, in compliance with the Bar’s rules, is perfectly in compliance.

And they do not require a disclaimer.

John Paul Stevens:

What you’re saying is that… that people who are being misled are people in the market for lawyers, not people in the market for accountants… if there is any misleading?

Silvia S. Ibanez:

Yes, Your Honor.

Which we do not believe they are misled.

John Paul Stevens:

And the Florida Bar takes the position that you’re not misleading anybody?

Silvia S. Ibanez:

Correct, Your Honor.

Ruth Bader Ginsburg:

The Petitioner would not be before this Court if she were attorney-at-law and CFP and not CPA?

Silvia S. Ibanez:

Correct, Your Honor.

There must be a reasonable fit between the goals of the legislature and the means chosen.

And what were the goals of the legislature?

Silvia S. Ibanez:

The legislators… legislature spoke clearly.

At section 473.322 of Florida’s statutes it says, a CPA who holds an active license may append credentials after his or her name to designate status, connote status.

This is speech.

This is passive, truthful speech.

It’s not conduct.

I urge the Court not to travel this winding, complex road with twists and turns that the Board of Accountancy has put before the Court regarding hypothetical conduct that it has not even charged Petitioner with.

John Paul Stevens:

May I ask you one other factual question about this winding road?

I’m still somewhat un… I don’t really thoroughly understand the second layer of regulation referred to earlier.

Is there a procedure in the Florida regulation of accountants whereby they not only regulate the individual… you have a license as a CPA, as I understand it… but if you did want to practice accounting, would you have to get a separate license to have your firm also licensed?

Silvia S. Ibanez:

Your Honor, in the rules which are in the rule challenge portion of the proceedings in the exhibits at R. 377 to 700, you will find rule 21A-20.006, Florida Administrative Code, that says a CPA may practice as a sole proprietor.

So, if a CPA-attorney, such as Petitioner, or others–

John Paul Stevens:

Well, that’s not my question.

My question is, supposing you got another person who is also an accountant, you are a CPA, your other person is also a CPA, but you want to practice as a firm of X and Y, do you have to get a third license for the firm to do that?

Silvia S. Ibanez:

–The license needs to be, yes, with the firm, as I understand it.

John Paul Stevens:

You do.

I see.

And that’s what their really… their… their complaint is… that you don’t have such a license.

Silvia S. Ibanez:

Yes, Your Honor.

But that–

John Paul Stevens:

And you say you don’t need it because you’re not practicing accounting?

Silvia S. Ibanez:

–Correct.

And… and certainly the record has been somewhat misinterpreted regarding the attorneys and CPA’s out there who have chosen to practice dual professions.

Certainly, those are practicing dual professions and, of course, need to license their firm.

That is not the case before the Court.

The public interest is certainly well served by protecting commercial speech.

Why?

Because it assures free flow of information to the public.

In turn, this helps consumers to make more informed and rational decisions.

It also encourages competition, which benefits the public.

It also benefits small and large businesses alike.

Silvia S. Ibanez:

For, in this marketplace of large law firms, the sole practitioner… the small businessman, the businesswoman… needs to have the opportunity to truthfully disclose any distinguishing and differentiating factors.

John Paul Stevens:

Let me… I hate to be asking these stupid little questions, but I wanted… if… if you just want to be a sole practitioner as a CPA, do you need two licenses or one?

Silvia S. Ibanez:

As a sole practitioner?

John Paul Stevens:

Yes.

Silvia S. Ibanez:

Without being incorporated?

John Paul Stevens:

Without, yes, being incorporated or a partnership.

Silvia S. Ibanez:

Possibly the Board can answer that question better than I, but as I understand it, the sole practitioner needs to be individually licensed.

John Paul Stevens:

Period?

Silvia S. Ibanez:

I believe so.

John Paul Stevens:

Okay.

Silvia S. Ibanez:

The public is not easily misled.

The Board of Accounting would have this Court believe that the public can be easily misled.

But that is not so.

That merely follows a paternalistic argument that has been rejected by this Court.

The public needs truthful, relevant information to make informed decisions.

And Petitioner and others like her, multiply licensed in good standing, communicating truthful speech, should be encouraged and not censured for disclosing it.

If there are no further questions of the Court, I would reserve the rest of the time for rebuttal.

William H. Rehnquist:

Very well, Ms. Ibanez.

Ms. Nelson, we’ll hear from you.

Lisa S. Nelson:

Mr. Chief Justice, and may it please the Court:

The Petitioner contends that the Florida Board of Accountancy refuses to allow her to advertise her status as a CPA.

That is not actually the case.

The State intends to demonstrate that we are here because of Petitioner’s refusal to offer her services as a CPA in a manner that complies with the law.

Although she is individually licensed as a CPA, the firm which she… through which she provides accounting services and which she is advertising does… is not.

Antonin Scalia:

She claims she is not providing accounting services.

Lisa S. Nelson:

Your Honor–

Anthony M. Kennedy:

What is there in the record that shows that she is providing accounting services?

Lisa S. Nelson:

–The record is very clear and Ms. Ibanez admitted during hearing that she is providing exactly the same kind of services now… tax representation, interpretation of financial records, representation before the IRS–

Antonin Scalia:

Is that the practice of accountancy under Florida law?

Lisa S. Nelson:

–Yes, it is.

Lisa S. Nelson:

The practice of accountancy is governed by a title act.

Chapter 473 is a title act in Florida, which means that the practice of the attest function is… can only be practiced by a certified public accountant.

Antonin Scalia:

So, then… then a lawyer who represents people in tax matters is practicing accounting?

Lisa S. Nelson:

Not necessarily.

Because the definition of the practice of public accounting in Florida has two components.

The first component is the offering of accounting services or… or consultant management services.

The second–

Antonin Scalia:

And tax representation is included among them?

Lisa S. Nelson:

–If it’s within those.

The second prong is to also hold yourself out as a certified public accountant.

If you are simply a lawyer who is providing those services, unless you are providing the attest function, you may do so.

You are not practicing public accounting under Florida law, because it is a title act, unless you… unless you both perform the service–

Ruth Bader Ginsburg:

She could do… she doesn’t do audit and attest, right?

Lisa S. Nelson:

–That is correct.

Ruth Bader Ginsburg:

That’s undisputed?

Lisa S. Nelson:

That is correct.

Ruth Bader Ginsburg:

Are you saying to us now that she could do everything that she’s doing… the tax representation… if she were merely a lawyer?

Lisa S. Nelson:

Yes.

Ruth Bader Ginsburg:

She could do those functions?

Lisa S. Nelson:

Yes.

Ruth Bader Ginsburg:

But if she is also certified as a CPA–

Lisa S. Nelson:

If she holds herself out–

Ruth Bader Ginsburg:

–She can’t?

Lisa S. Nelson:

–If she holds herself out as a CPA, then she can do those things.

But she must adhere to all of the regulations under Chapter 473.

It’s a two-pronged test.

David H. Souter:

Well, do you… do you have… what… what is… what is your evidence that she is not adhering to them?

The only thing I gather that’s apparent on the face of the record is that she did not separately register her professional corporation.

Do you–

Lisa S. Nelson:

That is true.

Lisa S. Nelson:

And that was alleged in the administrative complaint.

David H. Souter:

–Then why didn’t you… why didn’t the Board simply go after her to revoke her CPA license because she had failed to register her corporation?

Lisa S. Nelson:

We originally did have a charge… or the administrative complaint was amended to add that charge to the… the charges against her.

However, it was withdrawn because the hearing officer felt that that amendment was untimely.

However, the conduct in this case and the speech in this case are inextricably intertwined because of the definition of public accounting.

The administrative complaint, as it was–

David H. Souter:

Well, they may inextricably intertwined, but do you not understand… is there any reason… let me put it this way… why the Board cannot go after her for failing to… to register her corporation and fight it out as a matter of fact and fight it out as to the validity of the regulation, if she contests it… and I don’t know that she does–

Lisa S. Nelson:

–Yes, they could.

David H. Souter:

–Without… without raising any First Amendment problem?

Lisa S. Nelson:

They could do that, as well as what they have done in… in raising the advertising violations here.

But in this particular case, what she is doing is advertising that she can provide these services through a professional association.

And that professional association is not licensed.

That is an unlawful act.

This Court–

Anthony M. Kennedy:

But… but my understanding is that that wasn’t a part of the complaint that was retained before the Board.

Lisa S. Nelson:

–Yes, it was, Your Honor.

If you look at page 33 of the record, in the allegations that are in the record, on paragraphs eight and nine, it specifically indicates that the respondent provides or offers to provide services to the public through her firm, called Silvia S. Ibanez, P.A., which firm is not licensed by the Florida Board of Accountancy.

Anthony M. Kennedy:

Are you referring to the Joint Appendix?

Lisa S. Nelson:

No; in the record itself.

I don’t believe that the administrative complaint is in the Joint Appendix.

But it’s on page 32 and 33 of the record.

And the respondent–

Anthony M. Kennedy:

My understanding is that the only rulings that were before the Board after the complaint was amended was, first, that this CFP designation was misleading, and the second, that the CPA designation was misleading.

Lisa S. Nelson:

–That is true.

Anthony M. Kennedy:

Is that an incorrect statement?

Lisa S. Nelson:

No, Your Honor.

Those are the conclusions of law that they reached.

But the allegations of fact that were part of the complaint also indicated that the respondent holds herself out to the public as a CPA in this unlicensed firm by appending the CPA designation after her name.

Anthony M. Kennedy:

Well, but if the conclusions of law… which was the basis of the… the Board’s action… were simply that CPA and… and CFP were misleading, why isn’t… that’s… that’s all that’s before us.

Lisa S. Nelson:

No, Your Honor.

Lisa S. Nelson:

Their conclusion was that her advertisement, because she doesn’t comply with this requirement, is misleading.

Because she is misleading the public by… by letting the public believe that she is in conformance with the requirements of law, when in fact she is not.

Ruth Bader Ginsburg:

Can you read the finding on which you’re relying that says just that?

Lisa S. Nelson:

It says in the Joint Appendix–

Ruth Bader Ginsburg:

This is a finding as distinguished from a charge.

Lisa S. Nelson:

–Yes.

In the Joint Appendix, in the final order of the Board… which is found at approximately page 180 and–

Ruth Bader Ginsburg:

Approximately?

Lisa S. Nelson:

–Excuse me.

On page 185 of the Joint Appendix it specifically indicates that respondent is unwilling to acquiesce in the requirements of Chapter 473 and Chapter 21A, Florida Administrative Code, by complying with those requirements, which are the requirements in Chapter 473.

She does not license her firm as a CPA firm.

Ruth Bader Ginsburg:

Now–

–She is… she is a CPA?

Lisa S. Nelson:

Yes, she is, individually.

Ruth Bader Ginsburg:

Is there… in the… in the view of the Board, is there any way that she can distinguish herself legitimately from a non-CPA?

She’s an attorney-at-law, she advertises as an attorney-at-law.

She is also a CPA.

Is there a way that she can present that credential to the public… that she is in fact a CPA, which is undisputed?

Lisa S. Nelson:

There are two answers to that question, Justice Ginsburg.

The first is if she licensed her firm, then there would be no problem whatsoever.

The second is if her business card indicated Silvia Ibanez, Attorney, CPA, and stopped there, there would also be no problem.

The Board has absolutely no problem with the designation of Attorneys and CPA’s together.

It is her advertisement of her status in conjunction with the unlicensed firm that makes this advertisement misleading.

Antonin Scalia:

How does it mislead?

It seems to me you confuse the Board’s power to compel licensing of the firm with the Board’s power to prohibit speech because it misleads the public in some detrimental way.

How is the public detrimentally misled?

Let’s assume that she’s failed to license her… her full… her whole firm.

The public sees CPA> [“].

She is a CPA.

How has the public been harmed?

Lisa S. Nelson:

Because the public is allowed to believe that she can offer these services through the professional association that she is advertising when in fact that is unlawful.

David H. Souter:

Well, the worst that can happen then is that some member of the public calls up and says, I want you to perform an audit function for me.

And she says, well, my firm is not licensed as a CPA firm and I can’t go that far.

I mean, that’s the extent of the misleading.

If she then goes ahead and says, all right, I will do it, the Board may very well have a complaint for her failure to conform to the Board’s regulations by… by registering the firm.

But I… the extent of the possible misleading of the public in your answer, it seems to me, is… is in the suggestion that might lead them to call her up and get a “no” answer.

Lisa S. Nelson:

Your Honor, there are two answers to that.

The first is that the disclaimer that she may give by telephone is not in conjunction with the advertisement itself.

And the public has already had to take the step to either call her or go to her office.

David H. Souter:

No.

But I think my point was that what you call misleading does not run a very high risk of anybody being seriously misled in any way that’s going to harm them unless she goes a further step and starts performing acts which she is not… which she is not licensed to do.

And your claim is not that she has performed acts, but simply that the advertising is misleading.

Lisa S. Nelson:

Your Honor, any time that she performs any of the services which fit within the definition of public accounting, which she has indicated she does perform through this firm, she is committing an unlawful act.

And the public is misled by believing that they can obtain and do obtain–

Ruth Bader Ginsburg:

But you said she could have on her card Attorney, CPA.

That’s what a member of the public sees.

Lisa S. Nelson:

–Yes.

Ruth Bader Ginsburg:

Now, what is it that a member of the public would see differently from her current card than it would see… I mean, if it gets Attorney, CPA, it’s still going to have the problem with it, well, a CPA can audit, so I’ll call her up and ask her to audit.

I don’t see the difference from the public perception in a card that says Attorney, CPA, and a card that says what this card says, in terms of misleading or deception of the public.

Lisa S. Nelson:

Because the public is led to believe that she can provide these services through the P.A., which she in fact cannot do.

Ruth Bader Ginsburg:

Through the?

Lisa S. Nelson:

Through the professional association.

And the professional association–

Antonin Scalia:

My, that’s a very refined misleading.

The public is going to think that she can provide the services through the association instead of individually.

And this is what the Board is protecting the public against?

Lisa S. Nelson:

–Yes.

Because there are ramifications that attach to providing your services as a sole proprietor that are different than those from providing your services–

John Paul Stevens:

Do I understand this, to be sure, the card I guess is at page five of the Joint Appendix and it gives her name and her… her degrees and so forth, and then says law offices, and then Silvia S. Ibanez, P.A. Now, if after the words “law offices”, there were a parenthesis, and said not engaged in public accounting, parenthesis, then you’d have no problem?

Lisa S. Nelson:

–That would not be a truthful statement, because the Board found that she was in fact practicing public accounting.

Antonin Scalia:

You are engaged in accounting if you are… if you are… if you are an accountant and practice law?

Lisa S. Nelson:

If you provide accounting services and–

Antonin Scalia:

Well, not distinctively accounting services, whatever the Board chooses to define as accounting services… if you do those acts and are an accountant.

Lisa S. Nelson:

–Using accounting skills, and you hold yourself out as P.A. and CPA.

Antonin Scalia:

I suppose the Board could say that just addition and subtraction are accounting skills and that anyone who performs addition and subtraction and has a CPA is practicing accounting if it wants?

Lisa S. Nelson:

I don’t think there’s been any interpretation–

Antonin Scalia:

It hasn’t moved to that yet?

Lisa S. Nelson:

–No, it has not.

[Laughter]

Anthony M. Kennedy:

So, where… so, where we are is this: If John Doe, who is an attorney and not an accountant, and has simply advertises that he’s an attorney, does exactly what Ms. Ibanez is doing, the Board has no problem?

Lisa S. Nelson:

None at all.

Anthony M. Kennedy:

All right.

But the minute you have a double qualification and you advise the public that you are also a CPA, then that’s prohibited?

Lisa S. Nelson:

Only if you do so in terms of providing those services through an entity that it not licensed if that entity needs to be licensed.

Anthony M. Kennedy:

So… so, what you are accomplishing in order to protect the public is not allowing her to disclose her additional qualification?

Lisa S. Nelson:

No, she may–

Anthony M. Kennedy:

And your position is: that protects the public?

Lisa S. Nelson:

–She may disclose her additional qualification if she complies with the other requirements of Chapter 473, which she has chosen not to do.

Anthony M. Kennedy:

And those other requirements are to get a license for the firm?

Lisa S. Nelson:

Yes.

William H. Rehnquist:

Well, she… as I… I’m sorry–

–What is entailed in getting a license for the firm?

I mean, are there qualification examinations for the firm that are different from her individually?

Lisa S. Nelson:

She has to submit an application, pay a fee of $150, and she has to provide proof of insurance for the professional service corporation.

Which she does not have to do individual.

William H. Rehnquist:

Does an individual seeking a CPA license have to provide proof of insurance?

Lisa S. Nelson:

No, they do not.

David H. Souter:

I take it, under no circumstance is she… could she add the CFP designation, because, as I understand it, one of the regs is that one may not add any term… and I presume any abbreviation indicating a term… with the word “certified” on it if the certification is not a State certification?

So, the… the prohibition on that, I take it, is absolute?

Lisa S. Nelson:

The prohibition there is only in conjunction with the CPA designation.

David H. Souter:

Yes, yes.

Lisa S. Nelson:

It is not… and that is the only time that it comes into play.

David H. Souter:

But I mean that’s… that’s the… that’s the only way she wants to use it.

So, if she holds herself out as a CPA, assuming she may otherwise do that, I take it there are no circumstances in which she could also add CFP?

Lisa S. Nelson:

No, that is not true, Your Honor.

The rule specifically indicates that if she were to seek approval from the Board to do so, and the Board were to grant that approval, she could certainly do it.

David H. Souter:

But I–

Lisa S. Nelson:

The Board has also–

David H. Souter:

–I thought that was under a separate section.

I don’t have it in front of me.

Lisa S. Nelson:

–No.

David H. Souter:

That… that applies to the… to the prohibition against using the term “certify”?

Lisa S. Nelson:

Yes, Your Honor, it does.

It’s on page 209 of the Joint Appendix.

And the… the Board–

David H. Souter:

And which… which section is the provision for Board approval of a deviation here?

Is that under (g)?

(i).

Lisa S. Nelson:

–Actually, it’s a combination; (i) is the one that specifically talks in terms of the term “certified”.

The Board order, however, made it very clear that since 1982, the Board had interpreted that section as being a specialty designation that if someone sought approval from the Board, they may be allowed to do so.

In fact, no organization–

David H. Souter:

How has the Board made this known?

Is it in a separate reg, or informal announcements or what?

Lisa S. Nelson:

–They have… they have formal opinions which are available by public record.

It was also a finding of fact by the hearing officer in this particular case.

I think it may be provided through their newsletters, which are required to be–

David H. Souter:

Is… is… does the record… excuse me… does the record contain any citation to any formal opinion in which it… the Board has indicated that (i) is subject to this dispensation?

Lisa S. Nelson:

–Yes.

And the hearing officer so found–

David H. Souter:

It is–

Lisa S. Nelson:

–There are multiple opinions by the Board.

David H. Souter:

–But does the… does the hearing officer’s finding cite one of the… the letter rulings?

I… I don’t want to take a lot of your time if you’re not sure.

Lisa S. Nelson:

I do not believe that they specifically cite an individual opinion.

But they do make the specific finding that the Board has, since 1982, taken that position.

And there were multiple exhibits in this case which were formal opinions of the Board that were submitted both by Ms. Ibanez and by intervenors in the rule challenge case.

In this particular instance, there has been no effort by either the parent organization or by Ms. Ibanez to seek approval by the Board.

In addition, the Board… the Board’s opinions have indicated that this is also treated as a specialty designation in many instances, and a disclaimer is available for specialty designations, which would indicate that this is not a specialty that is granted by a govern… or affiliated with a government entity, whether State or Federal.

In this particular instance, Ms. Ibanez’s advertisement does not have the approval of the Board, nor does it have the disclaimer that is required under the rule.

This–

William H. Rehnquist:

Are you suggesting that had there been a… the disclaimer, which you see as required under the rule, she would have been in compliance?

Lisa S. Nelson:

–I think there’s a great possibility that would be the case.

She should seek approval from the Board directly, but I think if there had been the disclaimer, we would not be here.

Sandra Day O’Connor:

Well, but if you look at the rule… the regulation… on its face, it says in (i) that use of the word “certified” is prohibited.

Lisa S. Nelson:

Because of the confusion that is created with the use of the word “certified”.

Sandra Day O’Connor:

Okay.

But I mean, you’re… you’re here today telling us, don’t pay any attention to what the regulation says, because maybe she could have done something else, and maybe the board would have authorized it.

Is that what I’m hearing you saying?

Lisa S. Nelson:

No, Your Honor.

What I’m saying–

Sandra Day O’Connor:

I mean, the Board seem… the… the regulation seems clear on its face as a ban.

Lisa S. Nelson:

–Yes, Your Honor.

However, the Board has interpreted that these other avenues are available to her, and those interpretations are available to the public.

I do think, however, that it could be banned in this particular instance because of the confusion that can be generated by the use of exactly the same term in certified public accounting, which connotes State licensure, and the term “certified” in certified financial planner, which has no government affiliation.

And unlike the situation that was presented to this Court in Peel, there is no indication on the advertisement at all as to who grants the CFP designation.

At least in Peel you had the designating authority or designating agency revealed to the public.

In this case, the only member of the public who testified at all regarding the CFP had no idea what it was.

So, there was absolutely no public knowledge that was demonstrated–

Antonin Scalia:

Well, that can’t be misleading then.

I mean, if I don’t know what it means, I’m not being misled.

Antonin Scalia:

[Laughter]

The only… the only person who is… how can you possibly be misled if you have no idea what it means?

Lisa S. Nelson:

–I think that while that person didn’t know what it was, I think there is still the potential there, at least a potential there, that it is misleading because they clearly knew what certified meant in terms of a certified public accountant.

They just didn’t know what CFP meant.

John Paul Stevens:

But her card doesn’t say C.> [“]–

–“C”, they don’t know what “C”–

–Maybe that means College of something or other.

[Laughter]

Could somebody who is in an accounting firm advertise… and let’s assume it’s truthful… on the card, in the yellow pages, J.D.?

Lisa S. Nelson:

Yes.

Ruth Bader Ginsburg:

This is somebody who is in a firm that’s qualified to do audit and attest and all the rest, and that person has whatever is the designation of the accounting firm and then J.D.–

Lisa S. Nelson:

That is perfectly permissible.

Ruth Bader Ginsburg:

–And that’s… well, you don’t care because that’s another profession and you don’t care about it?

Lisa S. Nelson:

The Board does not seek to regulate the practice of attorneys.

David H. Souter:

May I just go back to an earlier question?

Assuming just for the sake of argument… and maybe more than just for the sake of argument… that the Board has these interests and that some of the objectives are perfectly legitimate, why isn’t the Board sufficiently and why isn’t the public sufficiently protected if the Board simply proceeds to revoke the CPA license of the person who does not abide by the rules?

Lisa S. Nelson:

I think the public would be protected in that particular instance.

And the proper course in this case would have been to charge her with both.

David H. Souter:

So, you can… you can accomplish everything you claim that you ought to be able to accomplish without regulating speech.

Lisa S. Nelson:

Not entirely, because… because of the very definition of the practice of public accounting, as it is defined in Florida… and Ms. Ibanez has not challenged that definition–

David H. Souter:

Well, who cares about definitions if she is not using the term CPA> [“]?

I mean, if you are… if the Board is correct and the Board revokes her CPA license, and she stops using CPA because she is no longer is one, then why… why does… why does an abstract interest in definitional matters help the public one way or the other?

The fact is, you can accomplish as much public protection by going after the CPA license as you can possibly accomplish even on the rosiest First Amendment view to you of trying to regulate speech.

Lisa S. Nelson:

–If in fact… if in fact her license was revoked and she quit using the title, then yes, that interest would be served.

David H. Souter:

And if she didn’t quit using the title and she was no longer a CPA, you would have a very different First Amendment case, wouldn’t you?

Lisa S. Nelson:

Yes, we would.

John Paul Stevens:

May I ask the question about the insurance requirement for if you practice as a professional corporation?

Lisa S. Nelson:

Yes.

John Paul Stevens:

Is it different for a lawyer who practices as a professional corporation?

Does the Florida Bar require insurance and so forth?

Lisa S. Nelson:

I have no idea.

John Paul Stevens:

You don’t?

Lisa S. Nelson:

Working for State government, I don’t have–

John Paul Stevens:

I just wonder if… if the insurance policy she had with the… with the… to protect her from legal malpractice would have been adequate to satisfy your insurance requirement to also say you’re a CPA even though you’re not practicing accounting.

Lisa S. Nelson:

–As I indicated, I don’t know what the requirements are under the Florida bar.

John Paul Stevens:

I see.

Lisa S. Nelson:

However, the fact would remain that even if she had that insurance for the purposes of her law practice, the Board would never have that assurance unless she actually submitted an application and provided that information to them.

John Paul Stevens:

Yes.

Lisa S. Nelson:

And they would therefore not be performing their regulatory function.

If the Court has no other questions, we would–

William H. Rehnquist:

Thank you, Mrs. Nelson.

Ms. Ibanez, you have four minutes remaining.

Could you tell us how one does go about getting a CFP?

Silvia S. Ibanez:

Yes, Mr. Chief Justice.

There is a comprehensive examination over several days’ time.

There are educational requirements and components.

William H. Rehnquist:

What is the organization that gives the designation?

Silvia S. Ibanez:

It was called, up until February, the IBCFP.

It has undergone a name change.

It is now called the Certified Financial Planning Board of Standards.

And the Certified Financial Planning Board of Standards has a coordination with multiple universities and colleges and institutions of higher education across the United States… I believe, according to their amicus brief, over 50 at this point… that, in coordination with the universities, there is an educational component and, at the end of all the educational requirements having been met, then there is a certification component.

The Certified Financial Planning Board is a national licensing nonprofit body.

It has a Federal trademark over the use of CFP and over the use of certified financial planner.

And there are a code of ethics to comply with, which are also in the record… were submitted in the disciplinary hearing, a strict code of ethics.

There are also continuing education requirements to ensure that the CFP licensee continues to stay up to date and continues to stay informed.

Anthony M. Kennedy:

Is… is your failure to have a CPA license for your firm and to comply with CPA requirement… i.e., insurance… an issue that’s before this Court and that’s before the Board in its proceedings?

Silvia S. Ibanez:

No, Your Honor, it’s not an issue before this Court.

Anthony M. Kennedy:

Was it an issue before the Board?

Silvia S. Ibanez:

No, Your Honor.

Those are hypothetical situations that could have been confronted in this case.

Anthony M. Kennedy:

So, the Board’s order was not predicated on your failure to comply with requirements for CPA’s?

Silvia S. Ibanez:

As I understand it, no, Your Honor.

They also made reference to forgoing certain remuneration.

That was also hypothetical… at the same record page that Counselor Nelson already cited to.

These were hypothetical.

In the footnote to that same record reference it said, it could have simply charged Petitioner.

Indeed, why did it not?

In such a confrontation there would have been some complex regulatory determinations.

And the Florida Bar’s conflict with the rules, and the CPA Board’s rules.

And out of that there would have been some… some, I’m sure, some rationale.

But that did not happen in this case.

That is another case for another day.

It is not the case before the Court today.

The Court was asking about accounting skills.

If I may make reference to one of the informal opinions that is available, and the Court may make public notice, in 1991, early 1991, CPA Price, business owner, sole business owner of a beauty salon, asked if she could use CPA.

She was denied.

She was told because she offered services to the public and uses accounting skills, the beauty salon could be engaged in the practice of public accounting.

Your Honor, this shows that this is an absolute ban.

This… this poor woman… this CPA business owner, who is owning her own shop and is indeed licensed, was told she could not use it.

Petitioner is duly licensed as a CPA and is duly licenses as a CFP.

She has not refused in any way, shape or form to comply.

There is only one thing she’s refused to do.

She refuses to refrain from exercising her First Amendment rights.

If there are no further questions, may it please the Court.

William H. Rehnquist:

Thank you, Ms. Ibanez.

The case is submitted.

The honorable court is now adjourned until tomorrow at ten o’clock.