Yesterday, the U.S. Court of Appeals for the Second Circuit heard oral argument in Velazquez v. Legal Services Corporation (LSC), a lawsuit brought by three New York nonprofit organizations that provide free legal representation to low-income people. Burt Neuborne of the Brennan Center for Justice at NYU School of Law, appearing for the legal services organizations, urged the court to uphold a lower court ruling that had declared that the government imposed unconstitutional restrictions on the ability of the organizations to use their own non-federal funds. At stake is the ability of legal service providers who receive some federal LSC funding to use their non-federal dollars to provide certain important services, such as representing clients in class action lawsuits, claiming court-ordered attorneys’ fee awards, or providing assistance to certain categories of legal immigrants. Under the challenged rule, programs would have to establish physically separate offices and hire new staff to do such work -- even if they pay for those cases with money from non-federal sources. This “physical separation requirement” imposes a severe burden on the plaintiff legal services programs, which struggle to find funding to meet the needs of their clients. We will post more information on the oral argument as we receive it.