Paid Professional Advice Is Protected Speech: Third Circuit Requires First Amendment Scrutiny of New Jersey’s Ban on Compensation for Veterans‑Claims Counseling

Introduction

In a precedential opinion authored by Judge Bibas, the Third Circuit vacated the denial of a preliminary injunction and remanded a First Amendment challenge to New Jersey’s recently enacted consumer-protection statute regulating compensation for advocacy in veterans’ disability claims. The court held that advising veterans about how to file for benefits is speech, and that a law forbidding compensation for that advice burdens speech and therefore must satisfy First Amendment scrutiny. The panel also emphasized that New Jersey’s statute imposes two distinct restrictions—one tied to federal accreditation (who may be paid) and another barring any compensation for assistance before an appeal is filed (when one may be paid)—and that each must be analyzed separately.

The case arises at the intersection of occupational regulation and free speech: as benefits consulting has grown, so too have state efforts to curb fraud and predation. The plaintiffs—Veterans Guardian (a nationwide consulting firm) and two New Jersey veterans who wished to use its services—argue that New Jersey’s law chills protected speech by banning payment for their advice. The District Court denied preliminary relief, reasoning that the statute regulates only compensation, not speech. The Third Circuit disagreed, clarifying that prohibiting payment for speech is a burden on speech and triggering First Amendment scrutiny.

Summary of the Opinion

The Third Circuit vacated the District Court’s denial of a preliminary injunction and remanded for further proceedings with these key holdings and instructions:

Advice is speech: Veterans Guardian’s services—advising veterans on what to claim, what evidence to gather, and how to complete VA forms—are speech.
Compensation bans burden speech: A law that forbids charging for speech burdens the right to speak and thus triggers First Amendment scrutiny; the District Court erred in concluding otherwise.
No freestanding “professional speech” carveout: After NIFLA, professional speech is not a lesser-protected category; with narrow exceptions, ordinary First Amendment principles apply even when professionals advise clients.
Two distinct provisions must be separately analyzed:
- Section (a)(1): bars receiving compensation for advising or assisting on veterans’ claims except as allowed by federal law (effectively tying compensation to VA accreditation).
- Section (a)(4): imposes a categorical ban on compensation for any services rendered before a veteran appeals the VA’s initial decision to the Board of Veterans’ Appeals.
Serious constitutional questions as to § (a)(4): The panel expressed skepticism that the pre‑appeal compensation ban can be justified, noting the availability of less restrictive alternatives and the State’s failure to produce evidence connecting the ban to its asserted anti‑fraud interests.
Record development and full PI analysis required: Because the record is thin and the District Court did not reach irreparable harm, equities, or public interest, the panel remanded for a fuller record and application of the proper standards, including the government’s burden to show plaintiffs are unlikely to succeed on the merits in First Amendment cases.

Judge Krause concurred, underscoring that while NIFLA forecloses a broad “professional speech” exception, there remains a long tradition of professional licensing. Some speech regulations that are incidental to professional conduct may receive more deferential review. She advocated a case-by-case approach and noted the Supreme Court’s grant of certiorari in Chiles v. Salazar, which may further clarify the doctrine.

Factual and Procedural Background

To obtain disability compensation from the Department of Veterans Affairs, a veteran must submit an initial claim identifying service-connected disabilities and supporting evidence. If dissatisfied with the initial decision, a veteran may appeal to the Board of Veterans’ Appeals by filing a notice of disagreement. Federal law requires accreditation before anyone may “act as an agent or attorney in the preparation, presentation, or prosecution of any claim” and prohibits accredited agents/attorneys from charging fees for services rendered before the VA’s initial decision. Although federal law sets these requirements, Congress provided no express civil enforcement mechanism.

New Jersey enacted N.J. Stat. Ann. § 56:8‑228 to “mirror” the federal scheme but with state civil enforcement. Two provisions are central:

§ (a)(1): “No person shall receive compensation for advising or assisting” with the “preparation, presentation, or prosecution” of a veterans’ benefits claim, except as allowed by federal law (tying compensation to federal accreditation and limits).
§ (a)(4): “No person shall receive any compensation for any services rendered before” a veteran appeals the initial VA decision (a categorical timing ban that binds everyone, including licensed or accredited actors).

Veterans Guardian closed its New Jersey operations, and alongside two veterans who planned to use its services, sought a preliminary injunction. The District Court denied relief, holding that the statute regulates conduct (compensation), not speech. Plaintiffs appealed.

Issues Presented

Does advising veterans about how to file benefits claims constitute protected speech?
Does a law barring compensation for such advice burden speech and trigger First Amendment scrutiny?
How should courts apply NIFLA’s framework to occupational regulations that condition or forbid compensation?
Must § (a)(1) (accreditation-tied compensation restriction) and § (a)(4) (pre‑appeal compensation ban) be analyzed separately for First Amendment purposes?
What is the proper preliminary‑injunction standard in a First Amendment case, and who bears which burdens?

Analysis

Precedents Cited and How They Shape the Decision

King v. Governor of N.J. and Upsolve, Inc. v. James: The panel draws on King’s recognition that professional services delivered through speaking or writing are speech, and on Upsolve’s distinction between the conduct of filing papers and the speech of giving individualized legal advice. This supports treating Veterans Guardian’s counseling as speech.
Riley v. National Federation of the Blind, Simon & Schuster v. Crime Victims Board, and U.S. v. NTEU: These decisions establish that paid speech is still speech; restricting compensation for speech is a burden on expression requiring First Amendment scrutiny. The court uses this line to reject the District Court’s “price-only” characterization.
Expressions Hair Design v. Schneiderman: The panel clarifies that EH does not insulate all price regulations from First Amendment review. Regulating the price of a sandwich primarily targets conduct; regulating the price (or total compensation) of speech targets speech itself.
NIFLA v. Becerra: Central to the framework. NIFLA rejects a general “professional speech” category receiving diminished protection, while allowing two limited exceptions: (1) compelled disclosure of factual, noncontroversial information in commercial speech (Zauderer), and (2) regulation of professional conduct that only incidentally burdens speech. The panel evaluates New Jersey’s statute under these guideposts.
United States v. Hansen and Rumsfeld v. FAIR: Used to reject New Jersey’s attempt to label the counseling as “speech integral to illegal conduct.” Veterans Guardian’s advice is the core activity, not mere facilitation of a separate crime; and the federal scheme itself, even if paralleled, is subject to First Amendment limits.
Reed v. Town of Gilbert, City of Austin v. Reagan, and O’Brien: Cited to stress that content-based analysis depends on how a law operates (its effects), not the legislature’s benign intent. The panel flags but leaves for remand whether New Jersey’s law is content-based.
Bruni v. City of Pittsburgh and McCullen v. Coakley: Provide the tailoring standard under intermediate scrutiny, emphasizing that the State must show that substantially less speech-restrictive alternatives would not achieve its interests.
Preliminary injunction precedents: Winter v. NRDC, Reilly v. City of Harrisburg, Greater Philadelphia Chamber of Commerce v. Philadelphia, and Delaware State Sportsmen’s Ass’n establish the gateway factors, the government’s burden in First Amendment merits assessments, and the presumption of irreparable harm for speech violations.
Historical licensing cases (in concurrence): Dent v. West Virginia, Ohralik, Casey, Zauderer, and others ground the enduring legitimacy of professional licensing while cautioning, per Button and Primus, against using licensing labels to suppress protected advocacy.

The Court’s Legal Reasoning

Speech characterization: The court treats Veterans Guardian’s tailored advice about claims, evidence, and form completion as speech. The fact that the advice is professional, and often exchanged for money, does not alter its speech character.
Compensation restrictions burden speech: Drawing on Riley, Simon & Schuster, and NTEU, the court reasons that banning payment for speech diminishes incentives and capacity to speak, chilling expression. Thus, New Jersey’s statute triggers First Amendment scrutiny.
Rejecting misread of Expressions Hair Design: EH’s sandwich-price hypothetical addressed a law whose primary effect was conduct regulation with only incidental speech effects; New Jersey’s law targets the price (indeed, existence) of paid speech itself.
NIFLA’s framework controls: There is no generalized “professional speech” exception. The State’s attempts to fit within NIFLA’s second exception fail on this record:
- Price-only conduct regulation? Not here; restricting who gets paid, when, and for what advice is a speech restriction.
- Speech integral to illegality? No; the advice is not a step toward an independent crime. And mirroring federal law does not immunize the State’s scheme from constitutional scrutiny.
- Neutral licensing? Possibly, for § (a)(1), but the record is too sparse to tell. The District Court must analyze whether tying compensation to VA accreditation is a regulation of professional conduct that only incidentally burdens speech, and whether it fits within NIFLA’s limited exception.
Content neutrality: The District Court erred by focusing on legislative intent. On remand, content-based analysis should turn on whether the law applies to speech because of its content or subject (veterans-claims advice).
Separate provisions, separate scrutiny: The panel instructs the District Court to analyze:
- § (a)(1): A compensation restriction linked to federal accreditation and limits (who may be paid).
- § (a)(4): A categorical timing ban (no pay until an appeal is filed), which may also functionally bar paid advice on initial-claim choices that cannot be cured on appeal.
Tailoring concerns—especially for § (a)(4): The State’s asserted interest (protecting veterans from fraud and predation) is substantial, but the record lacks evidence that a pre‑appeal compensation ban advances that interest. The panel highlights obvious less restrictive alternatives, such as disclosures about free assistance, leaving § (a)(4) on shaky ground even under intermediate scrutiny.
Procedural posture and burdens: Because this is a preliminary-injunction appeal in a First Amendment case, the government bears the burden to show the plaintiffs are unlikely to succeed on the merits. The panel remands for development of the record and for consideration of the remaining factors: irreparable harm (presumed for First Amendment violations), balance of equities, and public interest.

Section-by-Section Constitutional Analysis the District Court Must Now Undertake

Section (a)(1) (accreditation-tied compensation rule):
- Key question: Is this a content-based restriction on speech, or a regulation of professional conduct with only incidental speech effects within NIFLA’s second exception?
- Record needs: How VA accreditation works, what it requires, whether it effectively screens against fraud/incompetence, and the speech burden imposed by conditioning compensation on accreditation.
- Scrutiny: If content-based, strict scrutiny applies; if a neutral licensing rule incidental to conduct, more deferential review may apply. Either way, the State must show tailoring and consider less restrictive alternatives.
Section (a)(4) (pre‑appeal compensation ban):
- Key question: Does a total ban on compensation before the notice of disagreement is filed meaningfully advance anti‑fraud interests, and is it narrowly tailored?
- Record needs: Evidence about the prevalence of predation at the initial-claim stage, availability and adequacy of free alternatives, the complexity of initial filings, and whether some initial choices are irrevocable (making post‑appeal advice too late).
- Tailoring: The panel identifies less restrictive alternatives—including disclosures about free help—that the State has not shown to be inadequate.

Preliminary-Injunction Framework and Allocation of Burdens

Gateway factors: Likelihood of success (a “reasonable probability” in this Circuit) and irreparable harm (more likely than not). In First Amendment cases, the government bears the burden of showing the plaintiff is unlikely to succeed on the merits, and alleged speech violations presumptively cause irreparable harm.
Remaining factors: The court must weigh the balance of equities and the public interest (often overlapping when the government is a party). It should also consider whether tailored interim relief is needed to preserve the status quo pending adjudication.
Independent First Amendment review: Appellate courts review the whole record independently in speech cases, deferring to credibility determinations but not to the District Court’s characterizations of speech versus conduct.

The Krause Concurrence: Professional Licensing After NIFLA

Judge Krause traces the deep historical pedigree of professional licensing—from medieval guilds through early American regulation—and emphasizes that NIFLA should not be read to impose strict scrutiny on all licensing regimes. Instead, courts must distinguish laws that regulate speech because of its content (which generally draw strict scrutiny) from laws that regulate the practice of a profession, with speech burdens only incidental to conduct (which may draw more deferential review). Her concurrence reinforces the majority’s remand instruction for a careful, record-based, provision-by-provision analysis and notes the Supreme Court’s cert grant in Chiles v. Salazar as a potential source of further guidance.

Impact

Occupational speech regulation: The decision reinforces that when the government targets advice or counseling for topic-specific treatment, forbidding or conditioning payment, First Amendment scrutiny applies. Legislatures cannot sidestep free speech limits by relabeling paid advice as mere economic conduct.
State mirroring of federal schemes: States cannot immunize their restrictions by incorporating federal rules that may themselves raise constitutional questions. Parallelism does not cure First Amendment defects.
Designing consumer-protection measures: Policymakers must build records that connect harms to their chosen remedies and consider less restrictive alternatives—e.g., disclosures, targeted anti‑fraud enforcement, fee caps, or transparency requirements—before imposing categorical bans on paid speech.
Veterans’ claims ecosystem: If § (a)(4) is ultimately enjoined, for‑pay advising at the initial claim stage may expand, conditioned by other lawful safeguards. If § (a)(1) survives as a neutral licensing rule, states may permissibly require accreditation as a predicate to compensation, provided the scheme is genuinely about professional conduct and is not a covert content-based speech control.
Litigation posture in First Amendment PI’s: Governments defending speech restrictions bear the burden on the merits likelihood and must marshal evidence on harms and tailoring early, not for the first time at oral argument. Courts will expect separate analysis of distinct statutory provisions.
Beyond veterans’ benefits: The opinion has resonance for regulations on paid advice in areas like immigration consulting, tax preparation advice, college admissions consulting, mental-health counseling, and financial coaching—any regime that forbids or conditions compensation for topic‑specific advice.

Complex Concepts Simplified

Speech vs. conduct: Speaking for a living—giving individualized advice—is speech. Filing a form or executing a transaction may be conduct. Laws that restrict payment for advice generally burden speech.
Content-based law: A law is content-based if it applies because of what is said (e.g., advice about veterans’ claims). Content-based laws are usually presumptively unconstitutional unless justified under strict scrutiny.
NIFLA exceptions: Two narrow contexts may draw less-than-strict scrutiny: (1) compelled disclosure of purely factual, noncontroversial information in commercial speech; and (2) regulation of professional conduct that only incidentally burdens speech.
Speech integral to illegal conduct: Narrow category covering speech that is part of committing a separate crime (e.g., soliciting a crime). Advice that is itself the core service being sold is not “integral” merely because the government disapproves of selling it.
Intermediate vs. strict scrutiny: Under intermediate scrutiny, the government must show its law directly advances an important interest and is not more speech‑restrictive than necessary—i.e., that substantially less restrictive alternatives would not work. Strict scrutiny demands a compelling interest and narrow tailoring.
Preliminary injunction burdens: In First Amendment cases, the government bears the burden to show the plaintiff is unlikely to succeed on the merits; alleged speech violations presumptively cause irreparable harm.

Conclusion

The Third Circuit’s decision draws a bright, speech-protective line: when the State forbids or conditions payment for professional advice, it burdens speech and must satisfy First Amendment scrutiny. The court rejects the notion that price or compensation regulation is categorically beyond the First Amendment when the regulated good is speech itself, and it declines to resurrect a broad “professional speech” exception after NIFLA. It also requires precision: distinct statutory provisions—like New Jersey’s accreditation-tied compensation rule and its pre‑appeal compensation ban—must be analyzed separately for content neutrality, fit within NIFLA’s exceptions (if any), evidentiary support, and tailoring, with serious doubts flagged as to the constitutionality of the categorical pre‑appeal ban.

On remand, New Jersey must demonstrate, with evidence, that its chosen means directly advance its asserted interests and that less speech‑restrictive alternatives would not suffice. More broadly, the opinion cautions lawmakers: consumer-protection goals do not license categorical bans on paid advice. In the marketplace of ideas—professional or otherwise—a government that damps payment for speech damps speech itself, and must justify that choice under the First Amendment.