US Supreme Court Briefs

No. 99-960

In the Supreme Court of the United States






Solicitor General
Counsel of Record
Acting Assistant Attorney General
Deputy Solicitor General
Assistant to the Solicitor
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217


Section 504(a)(16) of the Omnibus Consolidated Rescissions and AppropriationsAct of 1996, Pub. L. No. 104-134, 110 Stat. 1321-55, precludes recipientsof Legal Services Corporation funds from participating in "litigation,lobbying, or rulemaking, involving an effort to reform a Federal or Statewelfare system," except that it allows representation of "an individualeligible client who is seeking specific relief from a welfare agency ifsuch relief does not involve an effort to amend or otherwise challenge existinglaw in effect on the date of the initiation of the representation."The question presented is whether that provision violates the First Amendment.

In the Supreme Court of the United States

No. 99-960






The Solicitor General, on behalf of the United States, respectfully petitionsfor a writ of certiorari to review the judgment of the United States Courtof Appeals for the Second Circuit in this case.


The opinion of the court of appeals (App., infra, 1a-50a) is reported at164 F.3d 757. The opinion of the district court (App., infra, 51a-99a) isreported at 985 F. Supp. 323.


The court of appeals entered its judgment on January 7, 1999. A timely petitionfor rehearing was denied on July 8, 1999. On September 28, 1999, JusticeGinsburg extended the time for filing a petition for a writ of certiorarito and including November 5, 1999, and on October 27, 1999, she furtherextended the time for filing to and including December 5, 1999 (a Sunday).The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).


Section 504(a) of the Omnibus Consolidated Rescissions and AppropriationsAct of 1996, Pub. L. No. 104-134, 110 Stat. 1321-55, provides, in pertinentpart:

None of the funds appropriated in this Act to the Legal Services Corporationmay be used to provide financial assistance to any person or entity * **-
* * * * *
(16) that initiates legal representation or participates in any other way,in litigation, lobbying, or rulemaking, involving an effort to reform aFederal or State welfare system, except that this paragraph shall not beconstrued to preclude a recipient from representing an individual eligibleclient who is seeking specific relief from a welfare agency if such reliefdoes not involve an effort to amend or otherwise challenge existing lawin effect on the date of the initiation of the representation.

This restriction was carried forward in subsequent appropriations acts.See p. 4, infra.


1. a. In 1974, Congress enacted the Legal Services Corporation Act (theLSC Act), Pub. L. No. 93-355, 88 Stat. 378, 42 U.S.C. 2996 et seq., whichcreat[ed] the Legal Services Corporation (LSC) as an independent, non-profitcorporation to "provide financial assistance to qualified programsfurnishing legal assistance to eligible clients." 42 U.S.C. 2996e(a)(1)(A).The LSC Act authorizes the LSC to make grants to, and to contract with,individuals, organizations and (in certain limited circumstances) stateand local governments, for the purpose of providing legal assistance toeligible clients. Ibid. The LSC receives funds appropriated annually byCongress to provide such financial assistance. The LSC then distributesthose funds to programs, individuals, and other entities that submit applicationsdescribing their proposed legal services activities. 42 U.S.C. 2996b(a),2996e(a).

The LSC Act limits LSC financial support to "legal assistance in noncriminalproceedings or matters" for "persons financially unable to affordlegal assistance." 42 U.S.C. 2996b(a). The LSC program was designedto target the "day-to-day" legal problems of the poor. 119 Cong.Rec. 20,688 (1973) (statement of Rep. Biester); see also 142 Cong. Rec.H8189 (daily ed. July 23, 1996) (statement of Rep. Torkildson) (the Act'sprimary focus is on "bread-and-butter services" to the poor).

Recipients of LSC funds have long been subject to restrictions to ensurethe focus on basic legal services. The LSC Act has, from the outset, prohibitedLSC fund recipients from, inter alia, making available any LSC funds, programpersonnel, or equipment to any political party, to any political campaign,or for use in "advocating or opposing any ballot measures." 42U.S.C. 2996e(d)(3) and (4). The LSC Act has also prohibited LSC funds frombeing used to influence any governmental agency action or legislation, exceptupon request or when necessary to represent an eligible client. 42 U.S.C.2996f(a)(5). And the Act has prohibited LSC funds from being used to providelegal assistance with regard to any proceeding relating to any nontherapeuticabortion, elementary or secondary school desegregation, military desertion,or violation of the selective service statute. 42 U.S.C. 2996f(b)(8)-(10).Finally, the LSC Act has, from the outset, prohibited LSC fund-recipientsfrom bringing any class action suits directly, or through others, unlessexpress approval is obtained from the LSC fund recipient's project directoraccording to established policies. 42 U.S.C. 2996e(d)(5). The LSC Act restrictionsapply to LSC fund recipients' activities supported by LSC funds as wellas by other nonpublic and nontribal funds. 42 U.S.C. 2996i(c).

b. In 1996, at a time when proposals were before Congress to eliminate theLSC altogether because of controversy over certain activities pursued bysome LSC fund recipients, Congress enacted compromise legislation that expandedthe scope of restrictions on the activities of LSC fund recipients. SeeOmnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L.No. 104-134, § 504, 110 Stat. 1321-53 (1996 Act). Congress carriedforward the restrictions again in the Omnibus Consolidated AppropriationsAct, 1997, Pub. L. 104-208, § 502(a), 110 Stat. 3009-59 (1997 Act),and has continued the restrictions in subsequent legislation. See the Departmentsof Commerce, Justice, and State, the Judiciary, and Related Agencies AppropriationsAct, 1998, Pub. L. No. 105-119, § 502, 111 Stat. 2510; Omnibus Consolidatedand Emergency Supplemental Appropriations Act, 1999, Pub. L. No. 105-277,§ 411, 112 Stat. 2681-107.

Under those Appropriations Acts, LSC fund recipients are precluded fromrepresenting certain parties in specified circumstances. In the provisionat issue here, the Acts prohibit LSC fund recipients from participatingin "litigation, lobbying, or rulemaking, involving an effort to reform a Federal or State welfare system," exceptthat representation is allowed of an individual client "seeking specificrelief from a welfare agency if such relief does not involve an effort toamend or otherwise challenge existing law in effect on the date of the initiationof the representation." 1996 Act, § 504(a)(16), 110 Stat. 1321-55to 1321-56.

In addition, LSC fund recipients may not: advocate or oppose any reapportionmentof a legislative, judicial, or elective district, or participate in anylitigation related thereto; attempt to influence the "issuance, amendment,or revocation of any executive order, regulation" or similar governmentpromulgation; attempt "to influence any part of any adjudicatory proceedingof any Federal, State, or local agency" that is formulating generalagency policy; attempt to influence "the passage or defeat of any legislation,constitutional amendment, referendum, initiative * * * of the Congress ora State or local legislative body"; initiate or participate in class-actionlawsuits; represent aliens who are unlawfully present in the United Statesexcept in cases of domestic violence; conduct a training program "forthe purpose of advocating a particular public policy or encouraging a politicalactivity"; claim or collect attorneys' fees; participate "in anylitigation with respect to abortion"; "participat[e] in any litigationon behalf of a person incarcerated in a Federal, State, or local prison;"defend a person in a proceeding to evict the person from a public housingproject if the person has been charged with illegal engaging in illegaldrug activity which threatens the health or safety of a tenant or employeeof the housing agency. 1996 Act, §§ 504(a)(1), (2), (3), (4),(7), (11), (12), (13), (14), (15) and (17), 110 Stat. 1321-53 to 1321-56;1997 Act, § 502(a)(2)(C), 110 Stat. 3009-60.1

The restrictions apply to the use by LSC fund recipients of funds receivedboth from the LSC and from non-federal sources (except for Indian tribalfunds). 1996 Act, §§ 504(d)(1) and (2), 110 Stat. 1321-56. LSCfund recipients must notify non-federal fund donors "that the fundsmay not be expended for any purpose prohibited" by the Act. 1996 Act,§ 504(d)(1), 110 Stat. 1321-56.2

c. Shortly after passage of the 1996 Act, the LSC published regulationsimplementing the new statutory restrictions. See 61 Fed. Reg. 41,960 (1996);61 Fed. Reg. at 63,749. Coupled with pre-existing guidelines, the regulationsapplied the new restrictions not only to LSC fund recipients but also toany "interrelated" organization, defined as an organization asto which the LSC fund recipient determined "the direction of managementand policies" or influenced them "to the extent an arm's lengthtransaction may not be achieved." 50 Fed. Reg. 49,279 (1985).3

2. a. On January 14, 1997, certain lawyers employed by LSC fund recipients,their indigent clients, and various contributors to LSC fund recipients(respondents) brought this suit in the United States District Court forthe Eastern District of New York against the Legal Services Corporationand Legal Services of New York. They alleged that the restrictions on theuse by LSC fund recipients of federal and non-federal funds violate a varietyof federal constitutional provisions.

b. On March 14, 1997, the LSC announced its intention to amend its regulationsto allow LSC fund recipients "to have an affiliation or relationshipwith separate organizations which may engage in prohibited activities fundedsolely with non-LSC funds," 62 Fed. Reg. 12,102, in the same manneras was approved for separate projects in Rust v. Sullivan, 500 U.S. 173(1991), and it issued interim regulations addressing that issue. See 62Fed. Reg. 12,101 to 12,104 (1997). LSC issued final regulations on May 21,1997. 62 Fed. Reg. at 27,695 (1997).

Under the final regulations, an LSC fund recipient may create an affiliatethat may spend non-federal funds on activities in which the LSC fund recipientitself may not engage ("restricted activities"), so long as theLSC fund recipient maintains its "objective integrity and independence"from the affiliate. 45 C.F.R. 1610.8(a). An LSC fund recipient "willbe found to have objective integrity and independence" from an affiliateif: (1) the affiliated organization is a "legally separate" organization;(2) the affiliate "receives no transfer of LSC funds, and LSC fundsdo not subsidize restricted activities"; and (3) the LSC fund recipientis "physically and financially separate" from the affiliate. Id.§ 1610.8(a)(1)-(3). Satisfaction of the third criterion is to be determinedon a case-by-case basis according to the "totality of the facts,"including, but not limited to: "(i) [t]he existence of separate personnel;(ii) [t]he existence of separate accounting and timekeeping records; (iii)[t]he degree of separation from facilities in which the restricted activitiesoccur, and the extent of such restricted activities; and (iv) [t]he extentto which signs and other forms of identification which distinguish the [LSCfund] recipient from the [affiliated] organization are present." Id.§ 1610.8(a)(3)(i)-(iv).4

3. On March 14, 1997, the United States intervened in the district courtproceedings, pursuant to 28 U.S.C. 2403(a), to defend the constitutionalityof the restrictions. On March 21, 1997, respondents sought a preliminaryinjunction against enforcement of the restrictions to the extent they preventLSC fund recipients from using non-federal funds to engage in certain activities.The district court denied respondents' motion for a preliminary injunction,concluding that respondents had failed to establish a probability of successon the merits. App., infra, 53a-54a.

The court first held, following Rust v. Sullivan, 500 U.S. 173 (1991), thatLSC's final regulations implementing the statutory funding restrictionsprovide for adequate alternative channels through which the respondent LSCfund recipients can engage in otherwise prohibited activities, because theregulations allow recipients to create and control affiliate organizationsthat engage in such activities. The court found that the LSC's regulationsrequiring separation between LSC fund recipients and their affiliates areconsistent with the statutory funding restrictions, App., infra, 83a-88a,and that the LSC's program-integrity requirements are appropriately tailoredto serve the government's interest in preventing the appearance that thegovernment is endorsing activities that Congress does not wish to fund.Id. at 88a-94a. The court rejected respondents' contention that the LSCprogram integrity requirements, while "embraced by the Court in Rust"(id. at 88a), are different when applied to lawyer-client relationships.

The district court rejected respondents' argument that the affiliate rulesaccepted in Rust do not provide the appropriate benchmark here because theLSC regulations "strike at the heart of activities that are laden withFirst Amendment value." App., infra, 94a (citation omitted). The courtfound that, while the lawyer-client relationship implicates First Amendmentvalues, "the restrictions pertaining to LSC recipients do not significantlyimpinge on the lawyer-client relationship," especially when contrastedwith the "proactive aspects" of Title X, involved in Rust. 97a. In fact, the court noted that the LSC regulations "broadlypromote the lawyer-client relationship by providing that the lawyer maycounsel the client, refer the client to another attorney, and explain tothe client that LSC restrictions preclude the lawyer from engaging in theactivity the client may wish to undertake." Id. at 98a.5

4. The court of appeals affirmed in part and reversed in part. App., infra,1a-50a.

a. The court held that LSC's regulations are based on a reasonable interpretationof the relevant statutory provisions, App., infra, 12a-14a, and that theprohibition against furnishing LSC funds to entities that engage in certainactivities does not unconstitutionally encroach on the relationship betweenlawyer and client, id. at 15a-17a. The court reasoned that, even assuming"that an 'all-encompassing' lawyer-client relationship enjoys heightenedprotection from government regulation, the lawyer-client relationships fundedby LSC are no more 'all-encompassing' than the doctor-patient relationshipsfunded under Title X, which were considered in Rust." Id. at 16a.

The court also rejected respondents' facial challenge to the adequacy ofthe regulations that allow LSC fund recipients to establish affiliate organizationsthat can then use non-federal funds to engage in activities that are foreclosedto the recipients themselves. App., infra, 17a-23a. The court rejected respondents'argument that the restrictions create "unconstitutional conditions"by unreasonably burdening LSC fund recipients' use of nonfederal funds toengage in activity protected by the First Amendment. The court noted thatrespondents "provide no basis for concluding that the program integrityrules cannot be applied in at least some cases without unduly interferingwith grantees' First Amendment freedoms." Id. at 23a. In particular,the court found that the existence of adequate alternative avenues for theexercise of restricted activities through affiliates is sufficient to satisfyFirst Amendment scrutiny. Id. at 21a.

The court of appeals next rejected respondents' claims of impermissibleviewpoint discrimination with respect to the general restrictions on lobbyingand attempting to influence a rulemaking proceeding. It held that the classificationsestablished by the provisions were "based on subject matter, not viewpoint."App., infra, 23a-25a. The restrictions do not suppress ideas, the courtreasoned, but rather merely prohibit fund recipients from engaging in activitiesoutside the scope of the program. Ibid.

The court also upheld the prohibitions against lobbying and rulemaking "involvingan effort to reform a * * * welfare system," App., infra, 25a, andthe prohibition against "initiat[ing] legal representation * * * involvingan effort to reform a * * * welfare system," Id. at 25a-26a. The courtreasoned that those provisions are viewpoint neutral because they couldbe read as prohibiting activity that either supports or opposes welfarereform. Id. at 25a-28a.

The court reversed, however, with regard to one aspect of the restrictionsrelated to welfare reform- the provision that creates an exception to thoserestrictions by permitting representation of a client seeking specific relieffrom a welfare agency but only "if such relief does not involve aneffort to amend or otherwise challenge existing law in effect on the dateof the initiation of the representation." App., infra, 28a. The courtacknowledged that this Court, in Rust, stated that "the Governmenthas not discriminated on the basis of viewpoint" when "it hasmerely chosen to fund one activity to the exclusion of the other,"id. at 30a, and that those words from Rust "seem on their face"to support the view of Judge Jacobs in dissent, who would have sustainedthe provision. Id. at 31a. The court stated, however, that it "doubt[ed]that these words can reliably be taken at face value." Ibid. The courtthought it "inconceivable that the Supreme Court that approved theRust regulation would have intended its language to authorize grants fundingsupport for, but barring criticism of, governmental policy." Id. at32a.

The court of appeals observed that "the First Amendment's free speechguarantee goes to the right to criticize government or advocate change ingovernmental policy." App., infra, 32a. The court then reasoned thata lawyer's argument that a statute or rule is unconstitutional or illegal"falls far closer to the First Amendment's most protected categoriesof speech than abortion counseling or indecent art," id. at 33a, andthat the welfare proviso represents an attempt to drive ideas from the "marketplace"of the courtroom. Id. at 34a.

The court of appeals therefore held that the exception permitting only certainrepresentation of clients seeking relief from a welfare agency constitutesviewpoint discrimination subject to strict First Amendment scrutiny, andit perceived no reason why that provision survived strict scrutiny. App.,infra, 35a. In fashioning a remedy, however, the court declined either toinvalidate the entire welfare reform prohibition or to eliminate the individual-benefitsexception to that prohibition altogether. Instead, the court chose to leavethe general prohibition in place and to broaden the exception by strikingthe proviso to the exception that limits representation to situations inwhich the specific relief sought "involve[s] an effort to amend orchallenge existing law." Id. at 35a-37a. The court of appeals thereforedirected the district court to enter a preliminary injunction barring enforcementof that restriction on seeking specific relief.

b. Judge Jacobs filed a separate opinion, concurring in the majority's rulingsupholding most of the statutory provisions but dissenting from the rulingstriking down the one welfare-related provision as unconstitutional viewpointdiscrimination. App., infra, 38a-50a. He pointed to the Ninth Circuit'sdecision in Legal Aid Society of Hawaii v. Legal Services Corp., 145 F.3d1017, cert. denied, 119 S. Ct. 539 (1998) (White, J., sitting by designation),which rejected similar challenges to LSC restrictions. App., infra, 47a.

In Judge Jacobs' view, this case falls within the teaching of Rust. App.,infra, 45a, 46a-47a (quoting Rust, 500 U.S. at 193). He characterized as"surprising" the majority's position that Rust cannot "reliablybe taken at face value," noting that "[t]his approach to SupremeCourt opinions is not one previously employed by this Circuit. I think theSupreme Court meant what it said." Id. at 46a.

Judge Jacobs also took issue with the notion that "the statute promotesone favored view over others in a supposed public forum. Whose viewpoint?What forum? According to the majority opinion: the government-funded lawyerspossess the protected expressive interest; and the public forum is the courtroom(an idea that may come as a surprise to trial judges)." App., infra,49a. Judge Jacobs similarly rejected the proposition that the proviso disfavorsthe speech of the clients, explaining that the limitation applies regardlessof the ground on which the attorney would seek relief that would amend orinvalidate existing law: "There are certainly people * * * who favornarrowing welfare eligibility, or reduced benefits, or abolition of thewelfare system. But the statute gives them nothing. Where then is the viewpointdiscrimination, even if one assumed (as I do not) that the LSC makes everycourtroom into a public forum?" Id. at 50a. Judge Jacobs emphasizedthat the restriction at issue is viewpoint neutral, because it is "nota promotion of advocacy for the good old status quo, or a suppression ofa point of view," but rather is a means for channeling money for "theadministration of a complex existing statute so that everyone can get whatthe statute provides." Id. at 48a.


The court of appeals erred in holding unconstitutional on its face the provisionin successive Acts of Congress that creates only a limited individual-benefitsexception to the general prohibition against participation by LSC fund recipientsin litigation, lobbying, or rulemaking involving an effort to reform a federalor state welfare system. That exception allows recipients of Legal ServicesCorporation (LSC) funds to represent individual eligible clients who areseeking specific relief from a welfare agency "if such relief doesnot involve an effort to amend or otherwise challenge existing law in effecton the date of the initiation of the representation." Omnibus ConsolidatedRescissions and Appropriations Act of 1996, Pub. L. No. 104-134, §504(a)(16), 110 Stat. 1321-55. The court of appeals concluded that the exceptionconstitutes impermissible viewpoint discrimination by precluding lawyersemployed by recipients of LSC funds from representing clients who seek suchrelief.

This Court has recognized, however, that "[t]he Government can, withoutviolating the Constitution, selectively fund a program to encourage certainactivities it believes to be in the public interest, without at the sametime funding an alternative program which seeks to deal with the problemin another way. In so doing, the Government has not discriminated on thebasis of viewpoint; it has merely chosen to fund one activity to the exclusionof the other." Rust v. Sullivan, 500 U.S. 173, 193 (1991). The courtof appeals' ruling conflicts with that holding in Rust.

The court of appeals believed that this case is controlled not by Rust,but by Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S.819 (1995). Unlike the University in Rosenberger, however, Congress hasnot, through the LSC Act, chosen to promote a diversity of private viewsin a public forum. It has simply chosen to pay for certain services butnot others to assist people in seeking benefits under welfare programs thatare themselves government-funded.

The Second Circuit's decision holding that limitation unconstitutional isinconsistent with the Ninth Circuit's decision in Legal Aid Society of Hawaiiv. Legal Services Corp., 145 F.3d 1017, cert. denied, 119 S. Ct. 539 (1998)(LASH). There, the Ninth Circuit upheld against another facial First Amendmentchallenge various restrictions on LSC fund recipients, in light of the LSCregulations that permit an LSC fund recipient to create an affiliate thatmay spend non-federal funds on activities in which the recipient itselfis restricted from engaging, so long as the recipient maintains its "objectiveintegrity and independence" from the affiliate. 45 C.F.R. 1610.8(a).

1. In Rust, the petitioners made an argument almost identical to the onerespondents make here, contending that a program funding family-planningservices impermissibly discriminated on the basis of viewpoint because itallowed speech discussing some viewpoints (those favoring certain familyplanning options) while prohibiting competing viewpoints (those favoringabortion as a family planning option). 500 U.S. at 192. This Court rejectedthat argument, holding that Congress may "selectively fund a programto encourage activities it believes to be in the public interest, withoutat the same time funding an alternative program which seeks to deal withthe problem in another way." Id. at 193. In doing so, the Court explained,"the Government has not discriminated on the basis of viewpoint; ithas merely chosen to fund one activity to the exclusion of the other."Ibid. Thus, Rust was "not a case of the Government 'suppressing a dangerousidea,' but of a prohibition on a project grantee or its employees from engagingin activities outside of the project's scope." Id. at 194. Accord NationalEndowment for the Arts v. Finley, 524 U.S. 569, 587-588 (1998).

The court of appeals acknowledged that the language of Rust supports theview that the limitation on seeking certain relief from a welfare agencydoes not discriminate on the basis of viewpoint, but stated that it "doubt[ed]that these words can reliably be taken at face value." App., supra,31a. Contrary to the court of appeals' view, however, the limitation atissue here falls squarely within Rust.

As in Rust, Congress has chosen to fund a certain program to the exclusionof another. Congress has chosen to fund litigation in which individualsseek to establish their entitlement to benefits under a current welfareprogram (which is itself funded by the government), but not to fund litigationin which individuals would ask a court to invalidate that very program insome respect. In that way, Congress has sought to maximize the availabilityof funds to pay for legal assistance that will enhance the value of thecurrent welfare program to its intended recipients by providing assistanceto persons who believe they were wrongfully denied the benefits the programmakes available. Attorneys for LSC fund recipients who are requested torepresent other individuals, whose entitlement to welfare benefits may dependon a court's invalidation of the current welfare program in some respect,are free to inform those individuals that such representation is beyondthe scope of the LSC program and to refer the individuals concerned to legalcounsel outside the program, including any lawyer at an affiliate organizationthat the LSC fund recipient may have established under the LSC regulations.The LSC program is thereby less restrictive than the statute upheld in Rust,which prohibited physicians and other fund-recipient personnel from "referringa pregnant woman to an abortion provider, even upon specific request,"and from providing even counseling about abortion. 500 U.S. at 180. Attorneysemployed by LSC grantees thus are free to express their views, to actualor potential clients or anyone else, regarding any legal matter- includingthe view that a welfare rule or statute is unlawful or unconstitutional-andto refer clients to counsel who will represent them in conducting litigationthat the attorneys employed by the LSC fund recipient cannot conduct themselves.

The court of appeals attempted to distinguish this case from Rust (and fromNational Endowment for the Arts v. Finley, supra) on the rationale thatthis case involves restrictions on speech that is critical of the government,which the court regarded as more protected by the First Amendment than abortioncounseling or indecent art. The court of appeals erred in suggesting thatthe limitation on welfare litigation prevents LSC-funded lawyers from makingcertain arguments during the course of comprehensive legal representation.App., infra, 33a-34a. The limitation prevents LSC fund recipients from engagingin representation at all if it involves a request for a particular formof relief-namely, amendment or invalidation of a welfare statute or regulation.See App., infra, 42a-43a (Jacobs, J., dissenting). Thus, the proviso doesnot exclude certain viewpoints in the course of litigating a particularcase; it excludes a certain class of cases from the scope of the programto ensure that the program focuses on the day-to-day legal problems of thepoor people who are attempting to obtain benefits to which they may be entitledunder the current program.6

As the dissent below explained, App., infra, 48a, the limitation at issueis not viewpoint-based; it merely ensures that the program operates withinits intended limits to determine correctly the benefits owed under existinglaw. Congress reasonably may determine that funding legal assistance forpeople seeking to obtain benefits under existing welfare programs best furthersthe interests of both those programs and the Legal Services program itself,without also funding legal representation for people who do not qualifyunder existing law.

2. The court of appeals also erred in applying what appears to be a publicforum analysis, in reliance upon this Court's decision in Rosenberger. Inthat case, the Court struck down a university program that provided fundingfor student publications but that excluded publications with religious viewpoints,noting that the university had created a limited public forum for the expressionof ideas. 515 U.S. at 837. In a situation where the government creates apublic forum to promote a diversity of private views, the exclusion of particularviewpoints from that forum "abridges" the freedom of speech inthat limited forum. But that is not what the LSC Act does.

In invoking Rosenberger, the court of appeals regarded the courtroom asthe relevant public forum. The court reasoned that the limitation on seekingcertain relief from a welfare agency is calculated to drive viewpoints thatquestion the validity of statutes or regulations from the marketplace inthat forum. App., infra, 34a. That analysis is inconsistent with the NinthCircuit's holding in LASH, supra. In that case, the Ninth Circuit (per JusticeWhite, sitting by designation) rejected the contention that Rosenbergerundermines the validity of the LSC restrictions, noting that the governmentin Rosenberger expended funds to encourage a diversity of views, while theLSC program is designed to appropriate public funds to promote a particularcategory of professional services. The court concluded: "Like the TitleX program in Rust, the LSC program is designed to provide professional servicesof limited scope to indigent persons, not create a forum for the free expressionof ideas." Ibid. (emphasis supplied).

The notion that litigation in the courtroom is a public forum for the freeexpression of views would, as the dissent below noted, "come as a surpriseto trial judges." App., infra, 49a. While a courtroom might be referredto as a public forum in the sense that courts conduct public (as opposedto private) proceedings, we are aware of no case holding that a courtroomis a public forum for the robust expression of ideas by attorneys or clientsor for applying strict scrutiny to rules regulating attorneys' speech. Infact, courts that have considered the matter have held to the contrary.See, e.g., Kelly v. Municipal Court, 852 F. Supp. 724, 734-735 (S.D. Ind.1994), aff'd, 97 F.3d 902 (7th Cir. 1996); see also Zal v. Steppe, 968 F.2d924, 932 (9th Cir.) (Trott, J., concurring), cert. denied, 506 U.S. 1021(1992). As one court has reasoned, "[a] courtroom is not a debate hallor gathering place for the public to exchange ideas; it is a forum for adjudicatingthe rights and duties of litigants. In contrast to discourse in public fora,discussions that occur in court are highly regulated by rules of evidenceand procedure." Kelly, 852 F. Supp. at 735.


The petition for a writ of certiorari should be granted.

Respectfully submitted.

Solicitor General
Acting Assistant Attorney General
Deputy Solicitor General
Assistant to the Solicitor


1 The restrictions do not preclude LSC fund recipients from using non-LSCfunds "to comment on public rulemaking or to respond to a written requestfor information or testimony from a Federal, State or local agency, legislativebody, or committee," 1996 Act, § 504(e), 110 Stat. 1321-57, or"for the purpose of contacting, communicating with, or responding toa request from, a State or local government agency, a State or local legislativebody or committee, or a member thereof, regarding funding for the recipient,"1996 Act, § 504(b), 110 Stat. 1321-56.

2 The LSC Act has also provided since 1974 that "attorneys providinglegal assistance must have full freedom to protect the best interests oftheir clients in keeping with the Code of Professional Responsibility, theCanons of Ethics, and the high standards of the legal profession."42 U.S.C. 2996(6); see also 42 U.S.C. 2996e(b)(3) (LSC "shall not,under any provision of this subchapter, interfere with any attorney in carryingout his professional responsibilities to his client as established in theCanons of Ethics and the Code of Professional Responsibility of the AmericanBar Association * * * or abrogate as to attorneys in programs assisted underthis subchapter the authority of a State or other jurisdiction to enforcethe standards of professional responsibility generally applicable to attorneysin such jurisdiction. The Corporation shall ensure that activities underthis subchapter are carried out in a manner consistent with attorneys' professionalresponsibilities.").

3 The regulations also applied the restrictions to any entity that receiveda transfer of funds from an LSC fund recipient. 61 Fed Reg. at 63,752. Ifthe funds transferred to the entity were LSC funds, the restrictions appliedto all of the transferee entity's activities; if an LSC fund recipient transferrednon-LSC funds, the restrictions applied only to the transferred funds. Ibid.

4 The new regulations also amended the rule governing the transfer of fundsto provide that the restrictions apply only when an LSC recipient transfersLSC funds to another person or entity. When a person or entity receivesLSC funds from an LSC fund recipient, that person or entity is subject tothe restrictions with respect to both its LSC funds and its non-LSC funds.45 C.F.R. 1610.7. However, a person or entity that receives non-LSC fundsfrom an LSC fund recipient is not subject to the restrictions. See 62 Fed.Reg. at 27,696-27,697.

5 The district court rejected respondents' "rather casual due processand equal protection claims" App., infra, 98a. The due process claimfailed "for the same reasons the analogous claim failed in Rust-namely,because plaintiffs are not absolutely precluded from engaging in prohibitedactivities and, furthermore, have no constitutional entitlement to the benefitsprovided by the legal services program." Ibid. The equal protectionargument failed because "the Government had a rational basis for restrictingthe activities of recipients, and because poverty is not a suspect classification."Ibid.

6 The court of appeals rejected that interpretation of the program (App.,infra, 34a n.9), believing that, "[a]s a practical matter, a lawyeroften will not know in advance what arguments must be raised" in aparticular case. Even if an LSC lawyer has already undertaken representationof a client believing that it would not be necessary to seek invalidationof a statute or regulation, but then concludes that such relief should besought, the lawyer may at that point refer the client to another lawyer.The panel majority expressed concern that there may be circumstances inwhich an attorney could not readily "withdraw from litigation thatis in progress" or where "prejudice to the client * * * may resultfrom such a withdrawal." Ibid. As the dissent pointed out (id. at 43a-44a),however, this case presents a facial challenge to the statutory restrictions.The constitutionality of its application in particular instances such asthose posited by the court of appeals is not at issue.




No. 2020, Docket 96-6006





[Argued: March 20, 1998
Decided: Jan. 7, 1999
Rehearing and Rehearing En Banc Denied:
July 2, 1999]

Before: JACOBS, LEVAL, and GIBSON,* Circuit Judges.

Judge JACOBS concurs in part and dissents in part in a separate opinion.

LEVAL, Circuit Judge:

This appeal concerns the validity of restrictions imposed by Congress andthe Legal Services Corporation ("LSC") on the professional activitiesof entities that receive funding from LSC ("LSC grantees"). Plaintiffsare lawyers employed by New York City LSC grantees, their indigent clients,private contributors to LSC grantees, and state and local public officialswhose governments contribute to LSC grantees. Plaintiffs sought a preliminaryinjunction against the enforcement of the restrictions, contending theyviolate various provisions of the U.S. Constitution. The district courtdenied a preliminary injunction, finding that plaintiffs had failed to establisha probability of success on the merits. We affirm in part and reverse inpart.

I. Background

A. The Legal Services Corporation and the Challenged Statute. LSC is a non-profitgovernment-funded corporation, created by the Legal Services CorporationAct of 1974 ("LSCA"), 42 U.S.C. § 2996 et seq., "forthe purpose of providing financial support for legal assistance in noncriminalproceedings or matters to persons financially unable to afford legal assistance."42 U.S.C. § 2996b(a). LSC fulfills this mandate by making and administeringgrants to hundreds of local organizations that in turn provide free legalassistance to between 1,000,000 and 2,000,000 indigent clients annually.See Texas Rural Legal Aid v. Legal Services Corp., 940 F.2d 685, 688 (D.C.Cir. 1991); S. Rep. 104-392 at 2-3 (1996). Many LSC grantees are fundedby a combination of LSC funds and other public or private sources. S. Rep.104-392 at 3; A. 225, A. 297. LSC grantees are governed by local Boardsof Directors who set policies and priorities in response to local conditionsand client needs. LSC is empowered to implement the LSCA through the traditionaladministrative rulemaking process. Tex. Rural Legal Aid, 940 F.2d at 692.

From the outset of the LSC program, LSC grantees have been restricted inthe use of LSC funds. See 42 U.S.C. § 2996f(b)(1)-(10) (prohibitinguse of LSC funds in, inter alia, most criminal proceedings, political activities,and litigation involving nontherapeutic abortion, desegregation, or militarydesertion). Recipient organizations are also barred from using most nonfederalfunds for any activity proscribed by the LSCA. See 42 U.S.C. § 2996i(c).

In 1996, Congress substantially expanded the restrictions on activitiesof LSC grantees. See Omnibus Consolidated Rescissions and AppropriationsAct of 1996, Pub. L. No. 104-134, § 504, 110 Stat. 1321, 1321-53-56(1996) ("OCRAA," or "the 1996 Act"), reenacted in theOmnibus Consolidated Rescissions and Appropriations Act of 1997, Pub. L.104-208, § 502, 110 Stat. 3009 (1997). Section 504 of OCRAA, set forthbelow in pertinent part,1 bars the use of LSC funds to aid entities thatperform various activities including lobbying, participation in class actions,providing legal assistance to aliens in certain categories, supporting advocacytraining programs, collecting attorneys' fees under fee shifting laws, litigatingon behalf of prisoners, and seeking to reform welfare.2

Congress left no question of its intention to restrict grantees' use ofnon-federal and federal funds alike. The Act provides that while programrecipients may "us[e] funds received from a source other than the LegalServices Corporation to provide legal assistance, . . . such funds may notbe expended by recipients for any purpose prohibited by this Act."§ 504(d)(2)(B). Moreover, § 504(d)(1) requires recipients to notifyall non-federal donors that their contributions "may not be expendedfor any purpose prohibited by . . . this title."

In August 1996, LSC proposed regulations to implement the 1996 Revisions,which, inter alia, (1) prohibited a grantee from "us[ing] non-LSC fundsfor any purpose prohibited by the LSC Act," 61 Fed. Reg. 41960, 41962(1996); (2) prohibited any organization controlled by a grantee from pursuingrestricted activities (the "interrelated organizations prohibition"),see id.; 50 Fed. Reg. 49276, 49279 (1985) (defining "control"as "the ability to determine the direction of [or] influence the managementor policies" of another organization); and (3) applied the OCRAA restrictionsto any third party to whom a grantee transfers LSC funds, and to any privatefunds transferred from a grantee to a third party irrespective whether thefunds were private or public (the "transfer of funds provision").61 Fed. Reg. 63749, 63752 (1996). The combined effect of the regulationswas to prohibit LSC grantees from engaging in any restricted activity, eventhrough a legally distinct affiliate organization. These regulations werepromulgated in December 1996. See 45 C.F.R. §§ 1610.3, 1610.8(1996).

B. The Challenges to the Statute and Implementing Regulations. Plaintiffsfiled this lawsuit in January 1997, alleging that the restrictions on theuse of non-federal monies violate their rights under First, Fifth, and TenthAmendments to the United States Constitution. They also claimed that therestrictions on the use of federal funds violate the First Amendment, thedoctrine of Separation of Powers, and the Tenth Amendment. Plaintiffs soughta preliminary injunction only to enjoin restrictions on the use of non-federalfunds.

Soon after this suit was filed, and before the hearing on plaintiffs' applicationfor a preliminary injunction, a federal district court in Hawaii issuedan order partially granting a motion by a different set of plaintiffs topreliminarily enjoin enforcement of the OCRAA restrictions. See Legal AidSociety of Hawaii v. Legal Servs. Corp., 961 F. Supp. 1402 (D. Haw. 1997)("LASH I"). LASH I concluded that under Rust v. Sullivan, 500U.S. 173, 111 S. Ct. 1759, 114 L.Ed.2d 233 (1991) and other Supreme Courtdecisions, congressional restrictions on the activities of federally-fundedentities were permissible only so long as they "left open adequatechannels for [protected] speech."3 961 F. Supp. at 1414. Applying thisstandard, the court found that the LSC regulations unduly burdened grantees'protected First Amendment rights to lobby, to associate, and to have meaningfulaccess to courts. Central to the court's analysis was its finding that theinterrelated organizations prohibition barred LSC grantees from creatingaffiliate organizations that could engage in restricted activity. See LASHI, 961 F. Supp. at 1415-16. The court held that as implemented, the 1996restrictions denied to grantees not only the ability to undertake restrictedactivity directly, but also all alternative channels for exercise of theseconstitutionally protected activities. The court therefore determined thatplaintiffs' constitutional challenge was likely to prevail on the meritsand enjoined enforcement of portions of the OCRAA restrictions. See 1421-22.

In order to cure these constitutional infirmities, LSC issued "interimregulations" in March 1997 modelled after the restrictions upheld bythe Supreme Court in Rust. See 62 Fed. Reg. 12101, 12101-04 (1997) (interimregulations "are intended to address constitutional challenges raisedby the previous rule"); Legal Aid Society of Hawaii v. Legal ServicesCorp., 981 F. Supp. 1288, 1290 (D. Haw. 1997) ("LASH II"); Velazquezv. Legal Services Corp., 985 F. Supp. 323, 332-333 (E.D.N.Y. 1997). Theinterim regulations modified the earlier rules in two important respects.LSC revised the transfer of funds rules so that, in most cases, non-federalfunds transferred by a grantee to a controlled affiliate would cease tobe subject to the restrictions. Compare 62 Fed. Reg. 12101, 12103, §1610.7 (1997) with 45 C.F.R. § 1610.7 (1996) (61 Fed. Reg. 63749, 63752).Equally important, a new section entitled "Program Integrity of Recipient,"62 Fed. Reg. 12101 at 12103-04, § 1610.8, provided that grantees couldmaintain a relationship with "affiliate" organizations, whichcould in turn engage in restricted activities so long as the associationbetween the organizations met standards of "program integrity."The nonexclusive list of factors relevant to the determination of programintegrity were (1) the existence of separate personnel; (2) the existenceof separate accounting and timekeeping records; (3) the existence of separatefacilities; and (4) the extent to which signage and identification distinguishesrecipient from affiliate. Id. at 12104.

Ten days after the interim rules were promulgated, the court below helda hearing on the plaintiffs' motion for a preliminary injunction. See 985F. Supp. at 332. The district court found that "although based on theRust program integrity requirements," the interim regulations differedfrom those approved in Rust in three ways. Id. at 333. First, the LSC regulations,unlike Rust, included provisions that organizations under the "control"of a grantee would be subject to the statutory restrictions, unless theprogram integrity requirements were met. See id. Second, while the Rustregulations provided that "the 'degree of separation' of facilitieswould be considered," the interim regulations required the "existence"of separate facilities. Id. Third, the Rust regulations provided that thedetermination "whether a recipient and affiliate were sufficientlyseparate would be based on all 'facts and circumstances' whereas the interimregulations made no such statement, which arguably implied that [to satisfythe separation rules] a recipient would have to satisfy each and every programintegrity factor." Id. at 333-34.

The district court expressed some doubt as to the constitutionality of theinterim regulations but nevertheless delayed decision. Observing that "theseare interim regulations," the district court determined that it might"be provident to withhold judgment until the final regulations werepromulgated." Id. at 334. The court speculated that "maybe afterwe have this argument today, there will be more regulations," and thereforeundertook to "allow[] some period of time to let the dust settle untilwe get final regulations." Id.

On May 21, 1997, LSC replaced the interim regulations with a "FinalRule" (the "final regulations"). See id. As the districtcourt noted, "[t]he revised program integrity section eliminates virtuallyevery difference between the interim regulations and the Rust regulationsin respect to program integrity requirements." Id. at 335. The threedifferences between the LSC regulations and the Title X regulations approvedin Rust noted by the court at the March hearing were eliminated. See id.Concluding that the final regulations represented a permissible constructionof the 1996 Act, see id. at 338-39, and were consistent with the First Amendment,the district court determined that the statute and regulations were notlikely to be invalidated and therefore denied the motion for a preliminaryinjunction. See id. at 326-27.4 This appeal followed.
II. Discussion

On appeal, plaintiffs object that the final regulations represent an unreasonableinterpretation of the 1996 Act, and therefore fail under Chevron USA Inc.v. Natural Resources Defense Council, 467 U.S. 837, 104 S. Ct. 2778, 81L.Ed.2d 694 (1984). Plaintiffs also challenge the constitutionality of the1996 Act and the final regulations, arguing that they impermissibly burdengrantees' exercise of First Amendment activities, contrary to the commandof Rust v. Sullivan, and that they constitute a viewpoint-based restrictionon expression.

The posture of this appeal imposes upon plaintiffs a heavy burden. Becausethis is a facial challenge to legislative action, we need only determinewhether there are "any circumstances under which the prohibitions ofthe Act are permissible in order to uphold the Act." Able v. UnitedStates, 88 F.3d 1280, 1290 (2d Cir. 1996); see also Rust, 500 U.S. at 183,111 S. Ct. 1759 (plaintiffs "must establish that no set of circumstancesexist under which the Act would be valid. The fact that the regulationsmight operate unconstitutionally under some conceivable set of circumstancesis insufficient to render them wholly invalid.") (citation omitted).
Plaintiffs' burden is also increased because the preliminary injunctionthey seek is against the government. Grant of a preliminary injunction normallyrequires a showing by the moving party of irreparable harm and either (1)a probability of success on the merits or (2) sufficiently serious questionsgoing to the merits of the case to make them a fair ground for litigation,and a balancing of the hardships tipping decidedly in favor of the movingparty. See Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137, 142 (2dCir. 1997). But where a preliminary injunction is sought against the enforcementof governmental rules, the movant may not invoke the "fair ground forlitigation standard" but must show "likelihood of success."See International Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 70 (2d Cir.1996).

A. Statutory Claim

We consider first plaintiffs' contention that the final regulations constitutean unreasonable interpretation of the 1996 Act. Plaintiffs claim that LSC'soriginal rules, which precluded grantees from establishing or funding affiliateswith the purpose of undertaking restricted activity, fairly reflected thestatutory text. They maintain that the more lenient final rules, craftedafter LASH I held the original rules unconstitutional, conflict with congressionalcommand. Plaintiffs ask us to find that the final rules are unauthorizedby the statute, and that the statute, without the flexibility provided bythe final rules, is unconstitutional. See Appellants' Br. at 40.

LSC enjoys "the full measure of interpretive authority under the [LSCA]"and its interpretations of the Act are entitled to deference under Chevron.See Texas Rural Legal Aid, 940 F.2d at 690. Under this standard, LSC's regulationsmust be upheld unless "Congress has directly spoken to the precisequestion at issue" and LSC has resolved it contrary to statute, orunless the regulation cannot be termed a "permissible construction"of the statute or is arbitrary or capricious. See id.; Chevron, 467 842-44, 104 S. Ct. 2778.

Plaintiffs argue that Congress plainly intended to bar LSC grantees fromundertaking restricted activities through affiliate organizations. Thisargument relies principally on § 504(d)(2)(B) of the Act, which providesthat LSC grantees may "use[ ] funds received from a source other thanthe Legal Services Corporation to provide legal assistance . . . exceptthat such funds may not be expended by recipients for any purpose prohibitedby this Act or by the Legal Services Corporation Act." According toplaintiffs, this language plainly articulates Congress's desire to prohibitgrantees from engaging in restricted activity through an affiliate, evenwith non-federal funds. By permitting grantees to fund affiliates who engagein restricted activity, argue plaintiffs, the final rules impermissiblyallow non-LSC funds to be "expended by recipients" for prohibitedpurposes. Plaintiffs claim to find support in the legislative history, whichexplains that "[t]he legislation prohibits the use of alternative corporationsto avoid or evade the provisions of the law." S. Rep. No. 104-392 at13 (1996). Plaintiffs contend that the final rules-which authorize granteesto create affiliates and fund them with nonfederal moneys allowing themto conduct activity proscribed under the Act-facilitate a purpose expresslyprecluded by Congress, and thus fail under the first step of Chevron.
We are not persuaded. Nowhere in the statute does Congress speak directlyto the question whether grantees may create and support affiliate organizations.The Act does not indicate whether a transfer of non-federal funds by a granteeto an affiliate, or the affiliate's subsequent use of such transferred non-federalfunds for a prohibited purpose, constitutes an "expend[iture] by [a]recipient[]" under the Act. We conclude that Congress has not spokenclearly regarding grantees' authority to design and fund affiliate organizations,so that the first prong of Chevron is inapplicable.

We are also reluctant to accept plaintiffs' invitation to find that thefinal regulations are unauthorized, and that the statute without those regulationsis unconstitutional, because of the rule favoring an interpretation of astatute that preserves its constitutionality. See Edward J. DeBartolo Corp.v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568,575, 108 S. Ct. 1392, 99 L.Ed.2d 645 (1988); Hooper v. California, 155 U.S.648, 657, 15 S. Ct. 207, 39 L.Ed. 297 (1895).

We find, moreover, that the final rules represent a "permissible construction"of the Act and therefore survive the second Chevron inquiry. While the legislativehistory may give some support to the view that Congress intended to preventgrantees from creating affiliates to undertake restricted activity, thestatutory text is silent on the point. We conclude that the LSC regulationsare not inconsistent with or unauthorized by the terms of the Act.

B. Constitutional Claims

1. Lawyer-Client Relationship. Plaintiffs contend that the First Amendmentforbids Congress from interfering with the "intense associational bond"between lawyer and client, even when Congress funds the relationship. Appellants'Br. at 30. Plaintiffs allege that the welfare reform provision, the attorneys'fees provision, and the lobbying provisions encroach upon "the autonomyand professional judgments" of LSC lawyers, in violation of their FirstAmendment rights.

Plaintiffs rely heavily on dictum drawn from Rust v. Sullivan. There, theSupreme Court remarked, "It could be argued . . . that traditionalrelationships such as that between doctor and patient should enjoy protectionunder the First Amendment from Government regulation, even when subsidizedby the Government." 500 U.S. at 200, 111 S. Ct. 1759. Rather than addressthe argument, however, the Rust court found that "the doctor-patientrelationship established by the Title X program [was not] sufficiently allencompassing so as to justify an expectation on the part of the patientof comprehensive medical advice." Id. Because Title X patients shouldbe on notice that the scope of care received was subject to Congressionallimitation, a "traditional" or "all-encompassing" doctor-patientrelationship could not be said to exist. Id. Plaintiffs interpret this passageto extend constitutional protection to the doctor-patient relationship,and, by analogy, to the lawyer-client relationship.
We find the argument unconvincing. As a preliminary matter, Rust did notconfer constitutional protection on the doctor- patient relationship. Theopinion only speculated that the relationship may be protected from governmentregulation and expressly declined to resolve the question. Id. The questionwas left open in Rust and remains open today.

Nor need we resolve it here. Even if we assume that an "all-encompassing"lawyer-client relationship enjoys heightened protection from governmentregulation, the lawyer-client relationships funded by LSC are no more "all-encompassing"than the doctor-patient relationships funded under Title X, which were consideredin Rust. As noted above, the LSCA has always limited the range of legalservices available through LSC grantees. See 42 U.S.C. § 2996i(c).Indeed, grantees have historically limited their representations to selectedissues, and are typically "able to meet only a fraction of the demandfor their services." See Overview of LSC at 4 (1996)(http://ltsi.ncs/lsc/about.html).Because grantee lawyers are bound to explain to prospective and actual clientsthe limitations imposed by the 1996 restrictions, and may refer clientsto lawyers unencumbered by the restrictions, there is no reason to fearthat clients will detrimentally rely on their LSC lawyers for a full rangeof legal services. The LSC lawyer-client relationship cannot, therefore,be considered "sufficiently all encompassing so as to justify an expectationon the part of the [client] of comprehensive [legal] advice." Rust,500 U.S. at 200, 111 S. Ct. 1759. Accordingly, we need not decide whetherthe traditional lawyer-client relationship enjoys constitutional protection,because (as in Rust) such a relationship does not exist for practitionersand clients operating under the challenged statutory scheme.

Nor do plaintiffs provide any basis to question the validity of the schemeitself. Just as Congress is entitled to provide a limited range of medicalservices under Title X, it is free to offer a limited menu of legal servicesunder the LSCA. We think it clear, for example, that Congress could funda legal aid office but limit its practice to specific services such as representingthe indigent in landlord-tenant disputes or in consumer fraud cases. Thelimitations of the 1996 Act are no more suspect simply because they aredefined in terms of representations that are prohibited rather than thosethat are permitted. We find, therefore, that Congress was within its powerto limit the scope of legal services available under the LSCA.

2. Unconstitutional Conditions. Plaintiffs' second constitutional contentionis that the program integrity rules contained in the final regulations unreasonablyburden a grantee's ability to use nonfederal funds to engage in restrictedactivity. Because each of the provisions of the 1996 Act burdens protectedrights of association and speech, say plaintiffs, the undue burden of thefinal rules amounts to an unconstitutional condition on the receipt of LSCsubsidies.

Three Supreme Court cases provide the framework for evaluating plaintiffs'unconstitutional conditions claim. In Regan v. Taxation With Representation,461 U.S. 540, 103 S. Ct. 1997, 76 L.Ed.2d 129 (1983), Taxation With Representation(TWR), a non-profit organization devoted to studying tax issues and lobbyingfor tax reform, challenged Section 501(c)(3) of the Internal Revenue Code,which provided that organizations engaged in lobbying could not receivetax-deductible contributions. See I.R.C. § 501(c)(3). TWR argued that§ 501(c)(3) impermissibly conditioned the benefit of contribution deductibilityon the relinquishment of the First Amendment right to lobby. See TaxationWith Representation, 461 U.S. at 545, 103 S. Ct. 1997. Because this wasnot an instance where "Congress [had] discriminate[d] invidiously inits subsidies in such a way as to aim at the suppression of dangerous ideas,"the Court applied minimal scrutiny and upheld the law. Id. at 548, 103 S.Ct. 1997 (alteration and internal quotation marks omitted). Nevertheless,Justice Rehnquist's majority opinion noted, and a concurring opinion reliedupon, the fact that the I.R.C. allowed § 501(c)(3) organizations toestablish financially independent but wholly controlled lobbying affiliatesunder I.R.C. § 501(c)(4) without compromising their eligibility fordeductible contributions. See id. at 544, 103 S. Ct. 1997 (majority opinion);id. at 552-53, 103 S. Ct. 1997 (Blackmun, J., concurring) (concluding that§ 501(c)(3) alone would be "constitutionally defect[ive]").

The next Term, the Court invalidated a condition denying federal publicbroadcasting funds to public stations that engage in editorializing. SeeF.C.C. v. League of Women Voters, 468 U.S. 364, 104 S. Ct. 3106, 82 L.Ed.2d278 (1984). The Court found that because a "noncommercial educationalstation that receives only 1% of its overall income" from the Corporationfor Public Broadcasting (CPB) would be barred from editorializing, stations"ha[ve] no way of limiting the use of [their] federal funds to allnoneditorializing activities, and, more importantly, [they are] barred fromusing even wholly private funds to finance editorial activity." 400, 104 S. Ct. 3106. The Court emphasized that Congress could cure thestatute by amending it to allow stations "to establish 'affiliate'organizations which could then use the station's facilities to editorializewith nonfederal funds." Id.
Finally, in Rust, 500 U.S. 173, 111 S. Ct. 1759 (1991), recipients of familyplanning funds under Title X of the Public Health Services Act challengedregulations prohibiting Title X recipients from engaging in abortion counseling,referral, and any other activities advocating abortion as a means of familyplanning. In Rust, as in the instant case, "program integrity"regulations required separation of facilities, personnel and records betweenTitle X providers and any medical provider dispensing abortion information.See id. at 180-81, 111 S. Ct. 1759. The Court observed that "[t]heTitle X grantee can continue to perform abortions, provide abortion-relatedservices, and engage in abortion advocacy; it simply is required to conductthose activities through programs that are separate and independent fromthe project that receives Title X funds." Id. at 196, 111 S. Ct. 1759(emphasis omitted). For their part, Title X "employees remain free. . . to pursue abortion-related activities when they are not acting underthe auspices of the Title X project." Id. at 198, 111 S. Ct. 1759.Because grantees were not "effectively prohibit[ed] . . . from engagingin the protected conduct outside the scope of the federally funded program,"this circumstance was different from that considered in League of WomenVoters, and there was no unconstitutional conditions violation. Id. at 197,111 S. Ct. 1759.

Taking these cases together, we infer that, in appropriate circumstances,Congress may burden the First Amendment rights of recipients of governmentbenefits if the recipients are left with adequate alternative channels forprotected expression. Section 501(c)(3)'s prohibition on lobbying in TaxationWith Representation was permissible because the organizations receivingthe benefit of deductibility could undertake lobbying activities through

FindLaw Career Center

    Select a Job Title

      Post a Job  |  Careers Home

    View More