NASBA National Association of State Boards of Accountancy

Understanding Constitutional Limits on Regulating Truthful Speech

By Dale G. Mullen, Esq., and Dan Vuckovich, CPA (Retired)

“Understanding Constitutional Limits on Regulating Truthful Speech” comes to life through the story of the landmark Ibanez v. Florida Board of Accountancy case. With recent conversations in the accounting profession about the use of titles and when an individual can use the CPA designation, there has been renewed attention to how these titles are regulated. As Boards of Accountancy work to protect the public from confusion or the misuse of title, this brief exploration reveals why courts insist that such regulations honor First Amendment protections while still safeguarding the public’s trust.

Introduction

Boards play a vital role in protecting the public through professional oversight. Their oversight is subject to constitutional constraints, especially when it comes to truthful commercial speech. This principle was established in the U.S. Supreme Court’s 1994 decision in Ibanez v. Florida Department of Business and Professional Regulation, Board of Accountancy. That case, and decisions that have followed, show federal and state courts’ expectations for aligning regulation of the use of title with the requirements imposed by the First Amendment of the U.S. Constitution regarding commercial speech.

The Ibanez Case: A Quick Overview

Silvia Ibanez was both a licensed CPA and attorney in Florida, and she held a Certified Financial Planner (CFP) designation conferred by a private, non-governmental organization. She listed these credentials accurately on her advertising and business communications. The Florida Board of Accountancy concluded that her use of the CFP designation was “misleading” because it was not a state-issued credential, and it disciplined her for deceptive advertising.

The U.S. Supreme Court disagreed. The Court held that Ibanez’s use of truthful, verifiable credentials was protected by the First Amendment of the U.S. Constitution. The Court concluded that the Florida Board of Accountancy could not restrict her from accurately identifying her professional qualifications unless it had evidence of consumer harm or misunderstanding.

The Legal Framework: The Central Hudson Test

The Ibanez decision was based on an older Supreme Court decision, Central Hudson Gas & Electric Corp. v. Public Service Commission. In that 1980 decision, the Supreme Court set out a four-part test for determining the constitutionality of government restrictions on commercial speech:

  1. The speech must concern lawful activity and not be misleading.
  2. The government must have a substantial interest.
  3. The regulation must directly advance that interest.
  4. The regulation must not be more extensive than necessary.

Under this framework, courts reviewing licensing laws and licensing board decisions require that any restriction on speech directly advances a legitimate public interest and is narrowly tailored to achieve that goal.

Takeaways for Boards of Accountancy

In recent years, federal and state court cases have upheld laws and board actions restricting use of title when the title may be misleading or harmful. This may mean a title that is misleading either when considered on its own, or when advertised alongside the services provided by the individual at issue. Courts also look for concrete evidence of public misunderstanding and injury, including consumer complaints and public surveys. Additionally, courts look for the existence of clear and narrow guidelines, and favor laws and regulations requiring advertising disclosures over enacting blanket prohibitions.

Additional Resources

Dale G. Mullen, Esq., provided content for this article. Dale is a partner with Whiteford Law and currently serves as the vice chair of the Virginia Board of Accountancy. He can be reached at  [email protected]. To request summaries of recent First Amendment use of title cases, please contact NASBA’s Chief Legal Officer, Brie Allen, at [email protected].