Legal Services Corporation (LSC)

1. Legal Services Corporation (LSC) • Created by Congress in 1974 • Mission statement: “provide high-quality civil legal assistance to low-income Americans.” • Headed by a bipartisan, 11 member, board of directors appointed by the President • Largest source of funding for civil legal aid • Fund 138 independent programs nation wide

2. LSC Grants • Money Cycle: • American Public  Congress  LSC  Independent organization • Grants given with guidelines: • These ensure that organizations cater to clients who are disabled, elderly, war veterans, or sufficiently indigent. • Emphasis on basic human needs such as housing, health care, and protection from domestic violence

3. Omnibus Consolidated Rescissions and Appropriations Act of 1996 • Decreased LSC funding by 30.5% - single largest reduction • $400,000,000 to $278,000,000 • Largest previous drop was 25% under the Reagan administration • Act imposed large number of restrictions on LSC funds

4. Restrictions imposed by 1996 Act • Prevented LSC funded attorneys from: • taking any part in challenging welfare reform laws • requesting attorneys fees from the losing party in a victorious law suit • lobbying or in anyway influencing legislation • filing a class action • participating in abortion litigation • representing imprisoned clients • Various other restrictions

5. Personal Responsibility and Work Opportunity Act • Signed by President Clinton in 1996 • Replaced Welfare with Temporary Assistance for Needy Families (TANF) • Essentially a stipend for indigent people with children • Imposed additional conditions on recipients of TANF • Must work or look for work • Can receive federal benefits for a maximum of 60 months

6. TANF continued • States receive TANF as a block grant and can impose additional requirements • TANF replaced AID to Families with Dependent Children (AFDC) and Job Opportunities and Basic Skills Training (JOBS) • TANF reduced emphasis on education and increasing skill set. • Essentially unskilled labor – quick to lose their jobs

7. President Clinton Signing the Personal Responsibility and Work Opportunity Act

8. Appropriations Act Aftermath • restrictions required LSC-financed lawyers to abandon more than 600 legal matters • The indigence of the clients affected left them little recourse, and without the money to hire a private attorney, their cases collapsed.

9. Carmen Velazquez • A 56 year old woman living in New York • Challenged a New York welfare regulation on the grounds that it was unlawful “because it did not afford her a pretermination opportunity to demonstrate that physical impairments prevented her from working.” • Ms. Velazquez’s legal issue challenged a welfare regulation • Bronx Legal Services attorney was forced to withdraw • Ms. Velazquez searched unsuccessfully for a substitute attorney and eventually lost her benefits.

10. Brennan Center • In 1997, the Brennan Center stepped in to represent Ms. Velazquez and challenge 1996 Act Restrictions • Mission Statement: “non-partisan public policy and law institute that focuses on the fundamental issues of democracy and justice.” • Founded in honor of Justice Brennan

11. Burt Neuborne • Director of the Brennan Center at the time of litigation • Professor of Civil Liberties at NYU school of law • received the University's Distinguished Teaching Award in 1990 • Written four books and seventeen law review articles

12. Interesting side note Burt Neuborne received a lot of negative media attention after submitting a bill to Holocaust survivors for $4.1 Million for eight years of service. They were under the impression that he was working pro bono! When litigating the issue, asked for an “excellence multiplier” that would have raised his hourly rate to $875 an hour Burt Neuborne

13. Alan Levine • Mr. Levine was an attorney at Kronish Lieb Weiner & Hellman LLP. • Hired to help defend LSC by LSC president Alexander Forger • Today he is the Partner in charge of the New York office of Cooley Godward Kronish LLP and Chair of the Board of The Legal Aid Society in New York, a privately funded legal aid organization.

14. Interesting Side notelooks suspiciously similar to actor Anthony Heald

15. Alexander Forger, President of LSC from 1994-1997 • Worked extensively with Congress to form a compromise on funding and restrictions regarding LSC. • Interested in defending these compromises against the mounting legal challenges • Referred to the legal challenges against the restrictions as “playing Russian roulette, some people feel it’s better to hang than to compromise.”

16. LSC Compromise with Congress • California Congressman Julian Dixon: “In the face of new political realities, Legal Services advocates have been willing to bend over backward to accept far-reaching restrictions on attorney activities to ensure the continued existence of a viable core program.”

17. LSC’s Fight Against Litigation • Alan Levine supported and agreed to defend the work of Mr. Forger that created a compromise with Congress. • If the litigation efforts succeeded in removing the limitations placed on LSC by Congress, LSC was worried it may lead to a removal of Congressional Funding.

18. Court Cases • Velazquez I: Velazquez v. Legal Services Corp. • U.S. District Court for the Eastern District of New York: 985 F.Supp. 323 • Velazquez II: Velazquez v. Legal Services Corp. • U.S. Court of Appeals, Second Circuit: 164 F.3d 757 • Velazquez III: Legal Services Corp. v. Velazquez • Supreme Court: 531 U.S. 533 • Velazquez IV: Velazquez v. Legal Services Corp. • U.S. District Court for the Eastern District of New York: 349 F.Supp.2d 566 • Velazquez V: Brooklyn Legal Services Corp. v. Legal Services Corp. • U.S. Court of Appeals, Second Circuit: 462 F.3d 219

19. Velazquez v. Legal Services Corp.Round 1 – District Ct. • Plaintiffs complaint alleged that the restrictions in the 1996 Act impinged on free speech • Prevented clients and attorneys from pursuing a wide number of legal options and challenging Congress • Velazquez motioned for a preliminary injunction against the application of the restrictions of LSC money • LSC countered by revising their regulations – retreated to guidelines set forth in Rust v. Sullivan ,500 U.S. 173 (1991)

20. Rust v. Sullivan ,500 U.S. 173 (1991) • Supreme Court upheld as constitutional regulations from the Department of Health and Human Services • Regulations prohibited doctors receiving government funds from “engaging in abortion counseling, referral, and activities advocating abortion.” • Rust was upheld because doctors were permitted to construct a separate building with different staff unassociated with the government funds through which they could facilitate abortion. As a result, the doctors’ first amendment right of free speech was not infringed upon.

21. Rust v. Sullivan Political Cartoon

22. U.S. District Court for the Eastern District of New York continued • LSC revised regulations • an organization who wished to continue to receive LSC funds only need establish an entirely separate institution, privately funded with different personnel through which to pursue the prohibited legal action. • As a result – LSC attorneys could still exercise free speech with their own money • District Court concluded that the new LSC regulations were sufficiently similar to a set of regulations upheld as constitutional in Rust v. Sullivan.

23. Velazquez Political Cartoon

24. U.S. Court of Appeals, Second Circuit • Constrained by Rust to uphold the District Court in part • “because grantees were not ‘effectively prohibit[ed] ... from engaging in the protected conduct outside the scope of the federally funded program,’…there was no unconstitutional conditions violation.” • Translation – can not infringe upon free speech if you can still say/do what you want without federal funds • Overruled in part – Held that the restriction against challenging existing welfare statutes or regulations was unconstitutional • viewpoint discrimination in violation of the First Amendment • Both parties appealed the Appellate Court decision to the Supreme Court

25. Supreme Court • Justice Kennedy distinguishes Rust from Velazquez • Rust involved the government using private speakers to transmit a specific governmental message • “When the government disburses public funds to private entities to convey a governmental message, it may take legitimate and appropriate steps to ensure that its message is neither garbled nor distorted by the grantee.” • However, the “LSC program was designed to facilitate private speech not to promote a governmental message.” • “Advice from the attorney to the client and the advocacy by the attorney to the courts cannot be classified as governmental speech even under a generous understanding of the concept.”

26. J. Kennedy’s Opinion • The Court then looked to whether the restriction against challenging existing welfare statutes violated the First Amendment • “The First Amendment forbade the Government from using the forum in an unconventional way to suppress speech inherent in the nature of the medium.” • In finding the restriction to be unconstitutional, the Court held: • Congress “may not design a subsidy to effect this serious and fundamental restriction on advocacy of attorneys and the functioning of the judiciary.” • “The restriction imposed by the statute here threatens severe impairment of the judicial function.” • “With respect to the litigation services Congress has funded, there is no alternative channel for expression of the advocacy Congress seeks to restrict.” supct.law.cornell.edu/supct/images/kennedy.jpg

27. J. Scalia’s Dissent • In the dissent, Scalia found that Rust was controlling and the statute was constitutional. • The regulations do not “discriminate on the basis of viewpoint since it funds neither challenges to nor defenses of existing welfare law. The provision simply declines to subsidize a certain class of litigation and under Rust that decision ‘does not infringe the fight’ to bring such litigation.” • “No litigant in the absence of LSC funding, would bring a suit challenging existing welfare law is deterred from doing so by § 504(a)(16).” • “Rust thus controls these cases and compels the conclusion that § 504(a)(16) is constitutional.” supct.law.cornell.edu/supct/images/scalia.jpg

28. J. Scalia’s Dissent • “This has been a very long discussion to make a point that is embarrassingly simple: The LSC subsidy neither prevents anyone from speaking nor coerces anyone to change speech, and is indistinguishable in all relevant respects from the subsidy upheld in Rust v. Sullivan, supra. There is no legitimate basis for declaring § 504(a)(16) facially unconstitutional.”

29. Supreme Court • The Court ignored the Second Circuit's specific holding and dictum concerning the restrictions on non-federal funds, leaving this question open for a challenge in the district court.

30. Dobbins v. Legal Services Corporation • In December 2001, the Brennan Center filed another action against LSC, the Dobbins case. • The case involved several legal aid programs in New York and their private donors. • Dobbins was consolidated into the Velazquez case and proceeded for new hearing in the District Court.

31. Velazquez v. Legal Services Corp.Round 2 – District Ct. • The original Velazquez plaintiffs and the new plaintiffs in Dobbins challenged the LSC program integrity requirements as-applied. • Program integrity requirements by LSC require that grant recipients “objective integrity and independence from any organization that engages in restricted activity.” • Requirement involves a 3 part test for the organization engaging in restricted activity • Be a separate legal entity; • Receive no transfer of LSC funds or subsidy from the grantee; and • Be physically and financially separate.

32. District Court: Effect of Program Integrity Requirements • SBLS serves indigent civil clients in Brooklyn. • Funded: 33% by LSC and 67% by private and non-LSC government funding. • Costs for operating a physical separate location would cost at least 8% of the annual budget • These expenses would cause the organization to serve 500 fewer clients.

33. District Court: Preliminary Injunction • “LSC shall be enjoined from withholding federal funds from plaintiff-grantees and from precluding plaintiff-grantees from forming affiliates with their non-federal funds, provided plaintiff-grantees comply with the terms and conditions of their Clarified Proposal.”

34. Court of Appeals Holding • Lifts the preliminary injunction entered by the district court; • Requires the district court to apply a different legal standard to determine whether the burdens imposed on the plaintiff legal services programs by the physical separation requirement effectively deny them adequate alternative channels through which to spend their non-LSC funds on the activities prohibited by the funding restrictions; and • Affirms the part of the district court’s order that declined to overturn the specific restrictions on class actions, attorneys’ fee awards and public interest solicitation.

35. Petition for Certiorari • On October 1, 2007, the Supreme Court declined to review the opinion of the United States Court of Appeals decision. • The case will now return to the District Court in New York to apply the standard of review set out by the Court of Appeals.

36. Future litigation against LSC restrictions • Mr. Levine believes the litigation against the LSC restrictions will continue for the foreseeable future. • However, the future of LSC funding may well depend on uncontrollable Congressional cost cutting. • Even though the Democrats may be poised to regain control of the Presidency in addition to Congress, it does not guarantee increased funding or support for LSC and the funding of legal services. • As the past shows, both Republicans (Regan Administration) and Democrats (Clinton Administration) have been responsible for restrictions and cost cutting regarding LSC.

37. Legal Aid Society of New York • Currently Chaired by Alan Levine • Mission: "[The Society's] object and purpose shall be, to render legal aid, gratuitously if necessary, to all who may appear worthy thereof and who, from poverty, are unable to procure it." • The Legal Aid Society is the oldest and largest non-for-profit organization in the United States providing free legal services for clients who cannot afford to pay for counsel. • During 2006, with a staff of some 1,400 - including nearly 850 lawyers and 600 social workers, investigators, paralegals, and support and administrative staff - the Society handled 275,00 legal matters for clients with civil, criminal, or juvenile rights legal problems. http://www.legal-aid.org

38. Legal Aid Society of New York • The Society made the purposeful choice not to accept government funding. • The decision was made so that there would be no restrictions placed on the legal services that were provided by the society.

39. Alan Levine’s Opinion on meeting the demand for legal services for the indigent • Believes it should be everyone’s responsibility. • He feels that there is plenty of individual litigation that the Federal government could fund without lifting the restrictions currently in place • Also believes the state and local governments and the private bar should make up the difference that Federal funding does not cover.

40. Brennan Center reasons to remove restrictions on LSC funding • Restrictions waste precious public funds. • Federal dollars which could help more clients are eaten up by running duplicate offices. • Individuals suffer because of the Restrictions • People have nowhere to go to address legal needs and whole communities go unnerved. • Restriction interferes with choices of state, local and private charitable donors about how to spend their money.

41. Reasons to Remove Restrictions • Restrictions makes LSC-funded organizations less appealing to state and private funders • An easy, no-cost fix solves the problems while leaving restrictions on LSC funds intact • LSC funds are strictly accounted for and the restrictions are applicable to those funds • Legal aid programs should be treated the same as other non-profits. • LSC-funded organizations are treated more stringently than most other non-profits.

42. Effect on Prairie State Legal Services • Prairie State Legal Services, an LSC funded organization stated the restriction on claiming attorney fees in successful lawsuits is a large detriment. • The organization does not necessarily depend on them, but it raises the risk for their clients. The opponent has no risk of having to pay legal fees if they lose their case. This becomes an issue frequently in foreclosure cases against their clients.

43. Lobbying Initiatives against LSC Restrictions • National Campaign to Fix LSC's "Private Money Restriction" • The coalition involves leaders throughout the country, on the left and on the right, are supporting both a federal lawsuit and a national public education campaign to help low-income individuals and families obtain urgently needed legal assistance. • Studies consistently show that only one-in-five low-income people in America are able to obtain legal assistance when they need it.

44. National Campaign to Fix LSC's "Private Money Restriction" • Groups involved in the effort: • Over 40 members of Congress • Faith-Based Groups and Religious Leaders representing around 85 million Americans • Prisoner Reentry Advocates • Senior Groups including AARP • Hundreds of Bar Associations, Lawyers' Groups, and Non-Profits • Veterans Groups

45. Final Thoughts • The Independent Sector, a “leadership forum for charities, foundations, and corporate giving programs committed to advancing the common good in America and around the world,” has sounded the alarm, stating that Velazquez: • “will have far-reaching implications that go well beyond the funding of legal services, to the core principles and rights of private giving, private action by charitable nonprofit organizations, and the right to advocate by 501(c)(3) organizations with their private funds, regardless of whether they receive government funding.”