Friday, June 4, 2010

Ninth Circuit Declines Further Review of Legal Services Funding Restrictions

A three-judge panel of the Ninth Circuit today ruled 2-1 to decline further review of Legal Services Corporation (LSC) restrictions on lobbying, class actions, attorney's fees, and client solicitation by legal service organizations that receive LSC funding.  The ruling today in Legal Aid Services of Oregon v. Legal Services Corp. affirms the panel's November 2009 decision, and adds an order declining further review.

Plaintiffs in the case argued that the restrictions violated the First Amendment speech clause under the Court's 2001 decision in Legal Services Corp. v. Velazquez.  The Court in Velazquez held that an LSC provision that restricted legal services attorneys to arguing only for their clients' benefits in public benefits cases (and prohibiting attorneys from challenging public benefits laws themselves)--the so-called "suits-for-benefits" exception--violated the First Amendment.  In Velazquez, Justice Kennedy wrote for the majority that the suits-for-benefits exception distorted the legal system, in that it prevented attorneys from making a standard argument on behalf of their clients, effectively requiring them to fight for their clients with one hand tied behind their back.  The Court in Velazquez ruled only on the suits-for-benefits exception; it declined to rule on the restrictions on lobbying, class actions, attorney's fees, and client solicitation--the restrictions at issue here.

The plaintiffs in Legal Aid Services of Oregon picked up on the distortion rationale in Velazquez and ran with it.  They argued that the Court articulated a new unconstitutional conditions principle in Velazquez--a distortion test--and that the LSC restrictions at issue here violated it.

The Ninth Circuit panel flatly rejected this reading of Velazquez.  The panel wrote that the Velazquez Court rested its holding on First Amendment limited public forum principles, not a new distortion test.  The panel ruled that the distortion discussion in Velazquez was "ancillary to the Court's holding in the case."

In applying the limited public forum test, the panel upheld the LSC restrictions, rejecting both the plaintiffs' facial and as-applied challenges, because the restrictions are viewpoint neutral and because they allow for an alternative forum for communication (through the "program integrity rules," modeled after the rules upheld in Rust v. Sullivan, that allow an affiliate to engage in advocacy disallowed for the LSC funded organization).

But nothing in Velazquez commands this result.  Justice Kennedy's opinion for the Court in fact rejects a formalist application of the limited public forum test and instead seems to combine public forum principles with the distortion principle advocated by the plaintiffs here.  Consider this language from Velazquez:

When the government creates a limited public forum for speech, certain restrictions may be necessary to define the limits and purposes of the program.  The same is true when the government establishes a subsidy for specified ends.  As this suit involves a subsidy, limited forum cases . . . may not be controlling in a strict sense, yet they do provide some instruction.  Here the program presumes that private, nongovernmental speech is necessary, and a substantial restriction is placed upon that speech. . . .  The limitation forecloses advice or legal assistance to question the validity of statutes under the Constitution of the United States. . . .

By providing subsidies to LSC, the Government seeks to facilitate suits for benefits by using the State and Federal courts and the independent bar on which those courts depend for the proper performance of their duties and responsibilities.  Restricting LSC attorneys in advising their clients and in presenting arguments and analyses to the courts distorts the legal system by altering the traditional role of the attorneys in much the same way broadcast systems or student publication networks were changed in the limited forum cases we have cited. . . .

(Citations omitted.)

Perhaps the restrictions at issue in Legal Aid Services of Oregon would not have met this standard, either.  But by framing the plaintiffs' facial challenge strictly in terms of the limited public forum analysis, the Ninth Circuit dodged an analysis of the attorney's role (merely to represent clients in court? or to advocate more broadly?) and of the importance of lobbying, class actions, attorney's fees, and client solicitation in the work of poverty lawyers.  Had the panel more seriously considered the distortion rationale of Velazque, alongside the limited public forum principles at play in that case, it would have had to more seriously grapple with these important issues--and ruled more squarely on poverty lawyers' rights to help clients through other channels that private attorneys often take for granted.

The Second Circuit, the only other circuit to rule on the constitutionality of the restrictions, also upheld them in Brooklyn Legal Services Corp. v. Velazquez (Velazquez V) in 2006.


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