LEGAL AID SERVICES OF OR. v. Legal Services Corp.

587 F.3d 1006, 2009 U.S. App. LEXIS 25629
CourtCourt of Appeals for the Ninth Circuit
DecidedNovember 23, 2009
Docket20-55243
StatusPublished
Cited by5 cases

This text of 587 F.3d 1006 (LEGAL AID SERVICES OF OR. v. Legal Services Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LEGAL AID SERVICES OF OR. v. Legal Services Corp., 587 F.3d 1006, 2009 U.S. App. LEXIS 25629 (9th Cir. 2009).

Opinions

Opinion by Judge TASHIMA; Dissent by Judge PREGERSON.

TASHIMA, Circuit Judge:

We must determine whether restrictions on lobbying, soliciting clients, participating in class actions, and seeking attorneys’ fees (collectively, the “Restrictions”) that Congress has imposed on legal aid organizations that receive federal grants through the Legal Services Corporation (“LSC”), comport with the requirements of the First Amendment. In Legal Aid Soc’y of Haw. v. Legal Serv. Corp., 145 F.3d 1017 (9th Cir.1998) (“LASH III”), we upheld the Restrictions as facially constitutional. We concluded that LSC’s program integrity rule (“PIR”) permits grantees to channel restricted speech, paid for with non-federal dollars, through unrestricted affiliates, and thus, the Restrictions do not unconstitutionally condition the receipt of federal funds on the relinquishment of First Amendment rights. Id. at 1025.

Legal Aid Services of Oregon (“LASO”), Oregon Law Center (“OLC”), individual LASO and OLC attorneys and board members, and organizations representing LASO clients and private donors (collectively “Plaintiffs”), present a two-pronged attack on the Restrictions and PIR. First, they contend that the Supreme Court’s decision in Legal Serv. Corp. v. Velazquez, 531 U.S. 533, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001) {“Velazquez III”) superseded LASH III, and that under Velazquez III, the Restrictions must be struck down as facially violative of the First Amendment. Next, they contend that, even if LASH III remains good law, LSC has applied the PIR to them in a manner that cuts off alternative avenues for engaging in protected speech.

The district court dismissed Plaintiffs’ facial challenge to the Restrictions, granted summary judgment in favor of LSC on their as-applied challenge to the PIR, and denied their motion for a new trial.

[1010]*1010We have jurisdiction to review the final judgment of the district court under 28 U.S.C. § 1291, and affirm.

Background and Proceedings

I. LSC and the Restrictions

In 1974 Congress enacted the Legal Services Corporation Act (the “1974 Act”), Pub.L. No. 93-355, 88 Stat. 378 (codified as amended at 42 U.S.C. §§ 2996-29961), establishing LSC as an independent nonprofit corporation. LSC’s mission is to distribute congressionally appropriated funds to qualifying organizations “for the purpose of providing financial support for legal assistance in noncriminal proceedings or matters to persons financially unable to afford legal assistance.” 42 U.S.C. § 2996b(a).

Congress has restricted the activities of LSC grantees since the grant program’s inception, and the scope of those restrictions has expanded over time. The 1974 Act, for example, provided that LSC funds could not be used to provide legal assistance in school desegregation cases, cases in which a client seeks to procure an abortion or compel an institution to provide an abortion, military desertion cases, any “fee-generating case,” and collateral attacks on criminal convictions. Id. § 2996f(b). Further, every year between 1983 and 1996, Congress included an appropriations rider in its annual spending bill “purporting] to eliminate legislative lobbying and administrative advocacy” among LSC grantees. S. Rep. 104-392 at 3 (Sept. 30,1996).

In 1996, responding to concerns that LSC had strayed from its core mission of “funding] basic legal services for poor individuals,” id. at 1, Congress imposed new restrictions on the activities of LSC grantees. See Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub.L. No. 104-134, § 504, 110 Stat. 1321, 1321-53-57 (1996) (the “1996 Act”), reenacted in the Omnibus Consolidated Appropriations Act of 1997, Pub.L. 104-208, § 502, 110 Stat. 3009, 3009-59-60 (1997). The 1996 Act enacted, and subsequent LSC regulations implemented, restrictions on: (1) attempts to influence legislation and/or administrative rulemaking processes, 45 C.F.R. § 1612 et seq.; (2) initiation of, and participation in, class action lawsuits, id. § 1617 et seq.; (3) claiming, collecting or retaining attorneys’ fees available under any federal or state law, id. § 1642 et seq.; and (4) soliciting clients, id. § 1638 et seq.1 The Restrictions apply to all of the activities of an LSC grantee, including those paid for by non-LSC funds. 45 C.F.R. § 1610.4.

II. PIR and the LASH Litigation

In 1997, in response to a federal district court’s injunction declaring several of the 1996 Act’s restrictions facially unconstitutional insofar as they applied to LSC grantees’ nonfederally funded activities, see Legal Aid Soc’y of Haw. v. Legal Serv. Corp., 961 F.Supp. 1402, 1422 (D.Haw.1997) (“LASH /”), LSC promulgated the PIR to clarify the circumstances under which a grantee could affiliate with an organization that engages in restricted activities.2 See 45 C.F.R. § 1610.8. The PIR provides that:

[1011]*1011(a) A[n] [LSC grant] recipient must have objective integrity and independence from any organization that engages in restricted activities.

A recipient will be found to have objective integrity and independence from such an organization if:

(1) The other organization is a legally separate entity;
(2) The other organization receives no transfer of LSC funds, and LSC funds do not subsidize restricted activities; and
(3) The recipient is physically and financially separate from the other organization. Mere bookkeeping separation of LSC funds from other funds is not sufficient. Whether sufficient physical and financial separation exists will be determined on a case-by-case basis and will be based on the totality of the facts. The presence or absence of any one or more factors will not be determinative. Factors relevant to this determination shall include but will not be limited to:
(i) The existence of separate personnel;
(Ii) The Existence Of Separate Accounting And Timekeeping Records;
(iii) The degree of separation from facilities in which restricted activities occur, and the extent of such restricted activities; and
(iv) The extent to which signs and other forms of identification which distinguish the recipient from the organization are present.

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Bluebook (online)
587 F.3d 1006, 2009 U.S. App. LEXIS 25629, Counsel Stack Legal Research, https://law.counselstack.com/opinion/legal-aid-services-of-or-v-legal-services-corp-ca9-2009.