For the past 14 years, the Legal Services Corporation (LSC), which funds legal services for the poor, has been forced by Congress to place severe restrictions on legal aid programs that receive LSC funds. These restrictions also extend to non-federal funds raised by legal services programs. Since their passage, the restrictions have been plagued by repeated First Amendment questions and have sparked calls for change.

Background on the LSC Funding Restrictions

The LSC Act specifically prohibits organizations receiving LSC funding from using LSC or private funds to engage in: political activities; most criminal cases; "challenging criminal convictions against officers of the court or law enforcement officers; organizing activities, including training for – or encouraging of – political or labor activities"; litigation to receive "non-therapeutic abortions" or "compel the provision of abortion services over religious or moral objections"; and "proceedings involving desegregation of public schools, military service or assisted suicide."

In 1996, Congress expanded the LSC restrictions to apply to funds from all sources, including federal, state, local, and private funds, with the exception of tribal funds. It also prohibited additional activities, including: class actions; all abortion-related litigation; representing prisoners; representing people who are being evicted from public housing for allegedly distributing illegal drugs; redistricting activities; lobbying governmental bodies, with limited exceptions; and representing non-U.S. citizens, with limited exceptions.

Current LSC rules also require legal aid programs that wish to lobby, spend private dollars on class action lawsuits, comment on proposed regulations, or represent certain types of clients, such as prisoners or certain immigrants, to set up physically separate offices with separate staff.

A Brief History of Judicial Efforts to Remove LSC Funding Restrictions

The first legal challenge to these restrictions was brought by the Legal Aid Society of Hawaii (LASH v. LSC) and several other LSC-funded programs in 1997. LSC then revised its regulations in May 1998 to set up conditions under which private funds could theoretically be used for advocacy. Known as the "program integrity regulation," the rule requires physical separation between LSC-funded recipients and any organizations that engage in restricted activities. (45 C.F.R. 1610)

After this change, the U.S. Court of Appeals for the Ninth Circuit found that the new rule was not a violation of the First Amendment protection of free speech. LASH and the other plaintiffs filed a petition asking the U.S. Supreme Court to review the case, but that petition was denied. Since 1998, a legal services program that wants to engage in restricted advocacy must set up a separate organization, with separate physical facilities and separate executive directors, staff, and budgets.

The next legal challenge to the LSC restrictions addressed a rule barring lawyers from using federal funding to challenge welfare reform laws in the course of representing clients seeking welfare benefits. Legal Services Corporation v. Velazquez was filed in the U.S. District Court for the Eastern District of New York in 1997 on behalf of legal aid lawyers, clients, and funders. In February 2001, the U.S. Supreme Court struck this provision down as an unconstitutional restriction of free speech.

In 2001, a coalition of lawyers, low-income clients, and New York City officeholders filed Dobbins v. Legal Services Corporation, arguing that it is unconstitutional for the government to regulate the privately funded activities of legal services programs.

In December 2004, the U.S. District Court for the Eastern District of New York struck down application of the rule imposing the restrictions on private funding. The court also issued a preliminary injunction against the physical separation requirement. The court ruled that the LSC violated the plaintiffs' First Amendment rights by requiring too great a degree of physical separation between federally funded approved activities and privately funded restricted activities.

The government had argued that shared facilities and staff create public confusion about what is LSC-funded activity and what is not. The court said the government's concerns can be met by having legally separate programs with strict accounting for shared facilities and staff to ensure LSC funds are not spent on restricted activities and having separate public areas for LSC and privately funded activities.

After an appeal by the government, the U.S. Court of Appeals for the Second Circuit held in December 2006 that the district court had used the wrong legal standard and lifted the preliminary injunction.

In 2007, the Supreme Court declined a request to review the Dobbins case, returning the case to the District Court for application of the new legal standard described by the Court of Appeals. Under the rule, the only way for a legal aid office to use non-federal dollars on certain work, such as representing clients in class action lawsuits or providing assistance to certain categories of legal immigrants, would be to establish a physically separate facility with separate staff.

Recent Legislative Efforts to Lift LSC Funding Restrictions

Legislative efforts to overturn the LSC funding restrictions have increased in the past year. In March 2009, Sen. Tom Harkin (D-IA) introduced the Civil Access to Justice Act of 2009 (S. 718) that ends the restrictions on the use of non-federal funds by LSC grantees, except those related to abortion litigation and a few other activities. "Lifting these restrictions allows individual states, cities and donors the ability to determine themselves how best to spend non-federal funds to ensure access to the courts," said Harkin.

Public sentiment also appears to be on the side of providing legal access to those in need. Since the Reagan administration, conservatives have sounded a drumbeat of opposition directed at the LSC. The Reagan budgets annually proposed elimination of legal services, only to have those services protected by Congress. Over the years, LSC funding has limped along. However, with the recent economic downturn, there has been a noticeable uptick in support for legal services. According to the Associated Press, two-thirds of those polled in 2009 on behalf of the American Bar Association said they favor federal funding for people who need legal assistance. Notably, Congress increased funding for the LSC in the last appropriations cycle.

A Washington Post editorial in March 2009 added to the calls for change, asking lawmakers to "unshackle Legal Services from congressionally-imposed restrictions that have kept it from working more efficiently and broadly." The editorial also called for support of the Harkin bill.

Also in 2009, a number of organizations signed a joint letter that draws upon the current economic crisis to highlight the need to remove the funding restrictions. According to the letter, "Families and communities across the country are suffering because of the restrictions" and "those most knowledgeable about issues critical to low-income clients cannot engage themselves in legislative and administrative reform efforts." The letter made clear that restrictions that may seem like technicalities to some have direct, real-world impacts on the most vulnerable Americans.

Despite public support and recent legislative efforts on the issue, most of the restrictions on LSC-funded grantees remain. Though most of these restrictions were lifted by the Senate version of the FY 2010 Commerce, Justice, and Science (CJS) appropriations bill, that language was stripped out by the conference committee that handled the FY 2010 omnibus appropriations bill, of which the CJS appropriations were a part. The only restriction that Congress ultimately lifted during the FY 2010 appropriations process was that covering the award of attorneys' fees.

The Need for Legislative Support of the Civil Access to Justice Act of 2009

At this critical time in our nation, legislative support for the Civil Access to Justice Act of 2009 is crucial. The harsh economic times and the foreclosure crisis that we are currently experiencing make it more necessary than ever to provide low-income individuals with access to legal aid services and skilled advocates. The current, unduly burdensome LSC restrictions only serve to limit access to the legal system to those who need it most.

The Civil Access to Justice Act would change all that by addressing the most problematic restrictions on LSC grantees: those that prevent the use of non-federal funds to advocate on behalf of the neediest of our communities. The Act would lift most of the restrictions listed above except those related to abortion, prisoners challenging prison conditions, and people convicted of illegal drug possession in public housing eviction proceedings.

The act also "increases the yearly LSC authorization to $750 million, which matches the amount (adjusted for inflation) appropriated in 1981, the high-water mark for LSC funding. LSC's current $390 million appropriation is well below the amount needed to adequately fund the program," according to a press release from Rep. Bobby Scott (D-VA), who introduced the House version of the bill in October 2009.

The Civil Access to Justice Act would expand access to justice to low-income populations by lifting those restrictions and helping to ensure that federally funded legal services providers are able to assist their clients in the most effective way possible. The battle over LSC restrictions has been going on for far too long. It is time to pass and implement the Civil Justice Act of 2009 and end LSC restrictions on the use of non-federal funds for advocacy.