Legal Services Corporation (LSC)
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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
LSC Grants

Money Cycle:
 American
Public  Congress  LSC 
Independent organization
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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
Omnibus Consolidated Rescissions
and Appropriations Act of 1996
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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
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Act imposed large number of restrictions
on LSC funds
Restrictions imposed by 1996 Act
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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
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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
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Must work or look for work
Can receive federal benefits for a maximum of 60
months
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
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President Clinton Signing the
Personal Responsibility and Work
Opportunity Act
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.
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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
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Bronx Legal Services attorney was forced to withdraw
Ms. Velazquez searched unsuccessfully for a
substitute attorney and eventually lost her
benefits.
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
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Burt Neuborne
Director of the Brennan Center at the time
of litigation
 Professor of Civil Liberties at NYU school
of law
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 received
the University's Distinguished Teaching
Award in 1990
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Written four books and seventeen law
review articles
Burt Neuborne
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Interesting side note
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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
Alan Levine
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Mr. Levine was an attorney at Kronish
Lieb Weiner & Hellman LLP.
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Hired to help defend LSC by LSC
president Alexander Forger
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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.
Interesting Side note
looks suspiciously similar to actor
Anthony Heald
Alexander Forger, President of LSC
from 1994-1997
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Worked extensively with Congress to form a
compromise on funding and restrictions
regarding LSC.
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Interested in defending these compromises
against the mounting legal challenges
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Referred to the legal challenges against the
restrictions as “playing Russian roulette, some
people feel it’s better to hang than to
compromise.”
LSC Compromise with Congress
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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.”
LSC’s Fight Against Litigation
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Alan Levine supported and agreed to
defend the work of Mr. Forger that created
a compromise with Congress.
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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.
Court Cases
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Velazquez I: Velazquez v. Legal Services Corp.
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U.S. District Court for the Eastern District of New York: 985
F.Supp. 323
Velazquez II: Velazquez v. Legal Services Corp.
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U.S. Court of Appeals, Second Circuit: 164 F.3d 757
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Supreme Court: 531 U.S. 533
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U.S. District Court for the Eastern District of New York: 349
F.Supp.2d 566
Velazquez III: Legal Services Corp. v. Velazquez
Velazquez IV: Velazquez v. Legal Services Corp.
Velazquez V: Brooklyn Legal Services Corp. v. Legal
Services Corp.
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U.S. Court of Appeals, Second Circuit: 462 F.3d 219
Velazquez v. Legal Services Corp.
Round 1 – District Ct.
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Plaintiffs complaint alleged that the restrictions
in the 1996 Act impinged on free speech
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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)
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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.
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Rust v. Sullivan Political Cartoon
U.S. District Court for the Eastern
District of New York continued
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LSC revised regulations
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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.
Velazquez Political Cartoon
U.S. Court of Appeals, Second Circuit
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Constrained by Rust to uphold the District Court in part
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“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.”
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Overruled in part – Held that the restriction against
challenging existing welfare statutes or regulations was
unconstitutional
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Translation – can not infringe upon free speech if you can still
say/do what you want without federal funds
viewpoint discrimination in violation of the First Amendment
Both parties appealed the Appellate Court decision to the
Supreme Court
Supreme Court
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Justice Kennedy distinguishes Rust from Velazquez
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Rust involved the government using private speakers to transmit
a specific governmental message
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“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.”
J. Kennedy’s Opinion
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The Court then looked to whether the restriction against
challenging existing welfare statutes violated the First
Amendment
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“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.”
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supct.law.cornell.edu/supct/i
mages/kennedy.jpg
J. Scalia’s Dissent
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In the dissent, Scalia found that Rust was
controlling and the statute was
constitutional.
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supct.law.cornell.edu/supct/ima
ges/scalia.jpg
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.”
J. Scalia’s Dissent
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“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.”
Supreme Court
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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.
Dobbins v. Legal Services Corporation
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In December 2001, the Brennan Center filed
another action against LSC, the Dobbins case.
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The case involved several legal aid programs in
New York and their private donors.
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Dobbins was consolidated into the Velazquez
case and proceeded for new hearing in the
District Court.
Velazquez v. Legal Services Corp.
Round 2 – District Ct.
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The original Velazquez plaintiffs and the new plaintiffs
in Dobbins challenged the LSC program integrity
requirements as-applied.
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Program integrity requirements by LSC require that
grant recipients “objective integrity and independence
from any organization that engages in restricted
activity.”
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(1)
(2)
(3)
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.
District Court: Effect of Program
Integrity Requirements
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SBLS serves indigent civil clients in
Brooklyn.
 Funded:
33% by LSC and 67% by private and
non-LSC government funding.
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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.
District Court: Preliminary Injunction
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“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.”
Court of Appeals Holding
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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 nonLSC 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.
Petition for Certiorari
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On October 1, 2007, the Supreme Court
declined to review the opinion of the
United States Court of Appeals decision.
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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.
Future litigation against LSC restrictions
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Mr. Levine believes the litigation against the LSC restrictions
will continue for the foreseeable future.
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However, the future of LSC funding may well depend on
uncontrollable Congressional cost cutting.
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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.
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As the past shows, both Republicans (Regan
Administration) and Democrats (Clinton Administration)
have been responsible for restrictions and cost cutting
regarding LSC.
Legal Aid Society of New York
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Currently Chaired by Alan Levine
http://www.legal-aid.org
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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."
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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.
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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.
Legal Aid Society of New York
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The Society made the purposeful choice
not to accept government funding.
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The decision was made so that there
would be no restrictions placed on the
legal services that were provided by the
society.
Alan Levine’s Opinion on meeting the
demand for legal services for the
indigent
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Believes it should be everyone’s responsibility.
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He feels that there is plenty of individual
litigation that the Federal government could fund
without lifting the restrictions currently in place
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Also believes the state and local governments
and the private bar should make up the
difference that Federal funding does not cover.
Brennan Center reasons to remove
restrictions on LSC funding
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Restrictions waste precious public funds.
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Individuals suffer because of the Restrictions
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Federal dollars which could help more clients are
eaten up by running duplicate offices.
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.
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
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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.
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LSC-funded organizations are treated more stringently
than most other non-profits.
Effect on Prairie State Legal Services
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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.
Lobbying Initiatives against LSC
Restrictions
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National Campaign to Fix LSC's "Private Money
Restriction"
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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.
National Campaign to Fix LSC's
"Private Money Restriction"
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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
Final Thoughts
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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:
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“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.”