Federal judge delays enforcement of ‘Granny’s Adviser Goes to Jail Act’

Thursday, April 16, 1998

Granny's advisers aren't going to jail—at least for the moment.


A federal judge granted an order temporarily preventing enforcement of a federal law that imposes criminal penalties on those who advise the elderly how to lawfully transfer assets in order to qualify for Medicaid.


The law, known as the “Granny's Adviser Goes to Jail Act,” was passed last year as part of the Balanced Budget Act of 1997. It applies to attorneys, accountants, doctors, social workers or anyone who, for a fee, dispenses advice on this subject.


The New York State Bar Association sued Janet Reno in her official capacity as U.S. Attorney General in December, contending the law violates First Amendment free-speech rights.


In January, the NYSBA filed a motion to temporarily prevent the government from enforcing the law until its constitutionality is decided by the court.


Federal district court Judge Thomas J. McElvoy recently granted the bar's motion for temporary relief “pending final judgment” in New York State Bar Association v. Reno, because the bar association showed it would suffer “irreparable harm” if the law was enforced.


The court wrote: “The irreparable harm that exists here is the potential for self-censorship among NYSBA members. NYSBA members have an ethical obligation as attorneys to respect and uphold the law. … Furthermore, Defendant provides no assurance that NYSBA members will not be prosecuted on some future date or that state Medicaid fraud units will also not enforce” the law.


NYSBA President Joshua Pruzansky said: “We are very pleased with the judge's decision. It was a bad law. Congress' own service–the Congressional Reporting Service–told Congress the law violated the First Amendment. It was simply outrageous to pass a law that places restrictions on the advice of counsel.”


A call placed to the U.S. attorney's office in Albany, N.Y., was not returned.