Tuesday, November 24, 2009
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Ninth Circuit Rejects Challenges to Legal Services Funding Rules
By STEVEN M. ELLIS, Staff Writer
The Ninth U.S. Circuit Court of Appeals ruled yesterday that restrictions preventing legal aid organizations that receive certain federal grants from lobbying, soliciting clients, participating in class actions or seeking attorneys’ fees do not violate the First Amendment.
Rejecting a challenge by two Oregon groups which sought to merge, a panel held 2-1 that Congress did not discriminate against any particular viewpoint or ideology where it simply limited specific procedural tools and strategies attorneys could utilize.
The panel also held that the groups and their individual attorneys failed to show a violation where they could not identify any other concrete application that prohibited them or their clients from expressing restricted speech through alternative channels.
Legal Aid Services of Oregon and the Oregon Law Center brought suit after the Legal Services Corporation—a non-profit organization established by Congress to fund legal assistance for the poor—rejected their request to integrate operations and staff into a single, nonprofit corporation.
The LSC provides funds to local legal assistance programs throughout the country, but by regulation requires legal, physical and financial separation from groups that engage in activities prohibited by the restrictions in order to ensure the program’s “objective integrity.”
Prior Ruling
The Ninth Circuit in 1998 upheld the restrictions as facially constitutional in Legal Aid Soc’y of Haw. v. Legal Serv. Corp. 145 F.3d 1017, concluding that they did not unconstitutionally condition the receipt of federal funds on the relinquishment of First Amendment rights because the LSC’s program integrity rule permitted grantees to channel restricted speech—paid for with non-federal dollars—through unrestricted affiliates.
The Oregon groups contended the U.S. Supreme Court superseded that conclusion in 2001 when it ruled 5-4 in Legal Serv. Corp. v. Velazquez 531 U.S. 533 that an exception allowing an LSC grantee to represent a client seeking specific relief from a welfare agency only if the grantee refrained from challenging the validity of the underlying statutes and regulations was viewpoint discrimination subject to strict First Amendment scrutiny.
The groups also argued that even if the Ninth Circuit’s 1998 decision remained good law, the LSC had applied the program integrity rule to them in a manner that cut off alternative avenues for engaging in protected speech.
However, U.S. Magistrate Judge Paul J. Papak of the District of Oregon dismissed the groups’ facial challenge to the restrictions and granted summary judgment in favor of the LSC on the groups’ as-applied challenge to the program integrity rule.
On appeal, the Ninth Circuit panel affirmed in an opinion by Senior Judge A. Wallace Tashima, who said the Supreme Court’s decision did not establish a new First Amendment test hinging on whether restrictions on a given government subsidy distorted an existing medium of expression.
“Rather, the Court applied familiar principles, drawn from the limited public forum doctrine, to strike down a viewpoint-based restriction on private expression,” he wrote. “Because the Restrictions do not discriminate against a particular viewpoint, they are constitutional.”
‘Flexible’ Process
Tashima then opined that the LSC’s rejection of the proposal was not sufficient to establish an as-applied First Amendment violation because the LSC employed “a flexible, fact-intensive process for determining whether a grantee maintains objective integrity and independence.” He also said that the groups and their attorneys did not establish such a violation absent a showing that no workable alternative channels for engaging in restricted speech existed.
Judge Pamela Ann Rymer joined Tashima in his opinion, but Judge Harry Pregerson dissented, writing that determining whether the restrictions distorted attorneys’ ability to effectively represent their clients was key to determining whether they were unreasonable in light of the purpose of the LSC grants, and thus unconstitutional.
He further opined that the restrictions did distort the legal system, explaining:
“Upholding these four Restrictions severely constrains those dedicated lawyers who choose to serve the poor by seriously and fundamentally limiting their ability to effectively represent their clients.”
The LSC, through attorney William S. Freeman of Cooley Godward Kronish in Palo Alto, declined public comment on the decision.
Counsel for the plaintiffs—Stephen S. Walters of the San Francisco office of Allen Matkins Leck Gamble Mallory & Natsis—told the MetNews the groups were “disappointed” by the result but “gratified” by Pregerson’s dissent. He said his clients were still considering their options, including seeking en banc review by the Ninth Circuit or a petition to the Supreme Court for certiorari.
The case is Legal Services of Oregon v. Legal Services Corporation, 08-35467.
Copyright 2009, Metropolitan News Company