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United States: Appellate Court Affirms Restrictions on Federally Funded Legal Aid Organizations

(Dec. 14, 2009) A federal appellate court has ruled that the First Amendment to the United States Constitution permits restricting government-funded legal aid organizations from lobbying, soliciting clients, participating in class actions, and seeking attorneys' fees.

The U.S. Government, through the Legal Services Corporation (LSC), distributes federal funds to organizations that provide noncriminal legal assistance to the poor. Federal law restricts organizations receiving LSC funds from engaging in certain activities, such as influencing lawmaking or rulemaking, participating in class-action law suits, and obtaining attorney's fees under federal or state law. The LSC regulates the extent to which LSC-funded organizations can associate with groups that carry out restricted activities. Litigation arose when an LSC-funded organization in Oregon sought to merge with a non-funded organization that carries out restricted activities, and the LSC rejected the proposal. The organizations sued, claiming that the restrictions violate the First Amendment. The district court rejected the plaintiffs' claims, and the plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit.

The plaintiffs argued that the reasoning of a 2001 Supreme Court decision, Legal Servs. Corp. v. Velazquez, in which the Court held that the First Amendment prohibits the government from restricting LSC-funded lawyers from challenging the statutory or constitutional validity of established welfare laws, applies also to limitations on procedural tools and legal strategies that distort their ability to effectively represent their clients. The Ninth Circuit rejected this contention, holding that Velazquez merely reiterated that when the government establishes a funding program for private speakers, it may not discriminate based on speakers' particular viewpoints. Content-neutral restrictions on activities by LSC-funded organizations, such as those at issue here, are permissible under Velazquez, the Court found. A dissenting judge agreed with the plaintiffs that the restrictions violate the First Amendment as interpreted in Velazquez by unreasonably distorting attorneys' ability to effectively represent their clients. (Legal Aid Servs. of Or. v. Legal Servs. Corp., No. 08-35467 (9th Cir. Nov. 23, 2009), available at