On Friday April 18, 2003, the Federal District Court in Brooklyn, New York, heard arguments on a challenge to regulations which force legal aid offices receiving federal funds to establish separate offices and staff if they wish to spend their non-federal funds on activities that are ineligible for federal funding. These include lobbying, participating in agency rule-making, claiming court ordered attorneys' fee awards, and filing class actions on behalf of low-income clients and communities. The Plaintiffs, South Brooklyn Legal Services and Mobilization for Youth, based in Manhattan, are seeking an injunction barring enforcement of the rules. The South Brooklyn group, which gets about one-third of its budget from federal funds, said compliance with the rules would force it to spend 8% of its $4.3 million budget on separate facilities, reducing services by 400 clients a year. As a result, they have decided to stop filing class action lawsuits. See more background information in the June 2002 issue of the Watcher.