## Facts

- Congress amended 42 U.S.C. § 1320a-7b(a)(6) to criminalize, “for a fee,” knowingly and willfully counseling or assisting an individual to dispose of assets to qualify for Medicaid if the transfer triggers a Medicaid ineligibility period under 42 U.S.C. § 1396p(c).
- The New York State Bar Association (NYSBA) alleged the law reached ordinary legal counseling about lawful asset transfers for Medicaid eligibility and chilled attorney–client communications and advocacy.
- NYSBA brought a facial constitutional challenge seeking declaratory and injunctive relief against the Attorney General in her official capacity.
- While the case was pending, the Department of Justice informed Congress it would not enforce the provision, and argued this eliminated any credible threat and irreparable harm.
- The matter came before the district court on NYSBA’s motion for a preliminary injunction to bar enforcement pending resolution on the merits.

## Issues

1. Whether a pre-enforcement facial challenge was ripe and justiciable despite the government’s stated intention not to enforce the statute.
2. Whether NYSBA established irreparable harm through a credible chilling effect on attorneys’ speech and counseling.
3. Whether NYSBA showed a likelihood of success on the merits (or serious questions and a favorable balance of hardships) on its First Amendment and related constitutional claims.

## Decision

- The court granted NYSBA’s motion for a preliminary injunction.
- The court held the case was ripe and justiciable because facial First Amendment challenges receive a relaxed ripeness analysis and the record supported present self-censorship.
- The court found irreparable harm because chilled First Amendment activity and the prospect of self-censorship among lawyers constituted immediate injury not compensable by damages.
- The court concluded NYSBA raised at least serious constitutional questions, including that the statute could criminalize core professional legal advice about lawful conduct and was potentially overbroad and vague.
- The court enjoined the Attorney General from enforcing the challenged provision against NYSBA members pending further proceedings.

## Legal Principles

- In facial challenges alleging burdens on First Amendment activity, courts may apply a less demanding ripeness inquiry due to the risk of chilled speech.
- A credible threat of self-censorship in response to a criminal statute regulating speech can constitute present injury supporting pre-enforcement review.
- Loss of First Amendment freedoms, including chilled professional counseling, is generally treated as irreparable harm for preliminary-injunction purposes.
- Statutes that broadly criminalize fee-based legal counseling about lawful options may raise substantial First Amendment concerns, including overbreadth and vagueness where uncertainty encourages self-censorship.
- In balancing equities for preliminary relief, protecting constitutional rights can outweigh governmental interests, particularly where the government asserts it will not enforce the challenged provision.

## Conclusion

The district court preliminarily barred enforcement of a federal criminal restriction on fee-based Medicaid-planning advice, holding that the chilled attorney speech made the dispute justiciable and that NYSBA showed irreparable harm and substantial likelihood of prevailing on First Amendment-based objections to the statute’s breadth and uncertainty.


N.Y. State Bar Ass’n v. Reno, 999 F. Supp. 710 (N.D.N.Y. 1998)