Nos. 99-603 and 99-960
In the Supreme Court of the United
States
LEGAL SERVICES CORPORATION, PETITIONER
v.
CARMEN VELAZQUEZ,
ET AL.
UNITED STATES OF AMERICA, PETITIONER
v.
CARMEN VELAZQUEZ, ET
AL.
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS
FOR THE SECOND CIRCUIT
REPLY BRIEF FOR THE UNITED STATES
SETH P. WAXMAN
Solicitor General
Counsel of Record
Department
of Justice
Washington, D.C. 20530-0001
(202) 514-2217
A. THE
WELFARE CLAIM PROVISO IN SECTION 504(a)(16) OF THE 1996 APPROPRIATIONS ACT IS
FULLY CONSISTENT WITH THE FIRST AMENDMENT
1. Respondents contend (Br.
12-14, 19-24, 30) that the proviso to Section 504(a)(16) of the Omnibus
Consolidated Rescissions and Appropriations Act of 1996, 110 Stat. 1321-55,
restricting the types of representation of welfare claimants that an LSC fund
recipient may accept, violates the First Amendment because it allocates
subsidies on the basis of viewpoint and suppresses a particular perspective.
Respondents rely on cases holding that, when the government creates a public
forum, it may not limit access to that forum on a viewpoint discriminatory
basis. Resp. Br. 10-14. Respondents fundamentally misconceive the nature of the
LSC program.
a. The cases upon which respondents rely did not involve
programs at all similar to the LSC program. In Board of Regents of the Univ. of
Wis. Sys. v. Southworth, 120 S. Ct. 1346 (2000), for instance, the Court
considered a program adopted by a state university "for the sole purpose of
facilitating the free and open exchange of ideas by, and among, its students."
Id. at 1354. In that setting, the Court concluded that its public forum cases
furnished a "close analogy," and that the viewpoint neutrality standard of those
cases therefore should apply. Id. at 1354. Similarly, in Rosenberger v. Rector
& Visitors of Univ. of Va., 515 U.S. 819 (1995), the Court invalidated a
university's effort to exclude all religious speech from a program funding
student activities, finding that the program "expends funds to encourage a
diversity of views from private speakers," 515 U.S. at 834, and therefore was
subject to scrutiny under the Court's public forum cases, see id. at
829-830.1
The public forum doctrine is inapplicable here. The LSC program
was not designed to facilitate a debate or free exchange of ideas among the
recipients of federal funds for the benefit of the larger community, as in
Southworth and Rosenberger. Indeed, LSC funds are not furnished to facilitate
the public expression of the recipients' own views at all. Rather, the LSC was
established to enable fund recipients to provide a particular professional
service-legal representation-to particular individuals, namely, to indigent
persons in certain types of legal proceedings before an agency or in court. See
Legal Aid Soc'y of Haw. v. Legal Servs. Corp., 145 F.3d 1017, 1028 (9th Cir.)
(White, J.) ("Like the Title X program in Rust, the LSC program is designed to
provide professional services of limited scope to indigent persons, not create a
forum for the free expression of ideas."), cert. denied, 525 U.S. 1015 (1998).
Although lawyers, in furnishing those services, present legal and factual
arguments on behalf of their clients, those focused submissions are made under
structured rules and are presented for their independent legal significance in
governmental decision-making processes, not as an act of self-expression (by
either lawyer or client) of the sort that the Court's free speech cases have
addressed.
Issues concerning the attorney-client relationship, the role
of counsel in litigation, access to courts, suing the government, and the
availability of government-funded counsel have typically been dealt with by
reference to rules of ethics, court rules, statutes, and doctrines such as
sovereign immunity. To the extent the Constitution speaks to those issues, it is
primarily through the Due Process Clause, not the First Amendment. See, e.g.,
Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305, 335 (1985) (in a
case involving the individual interest in presenting a benefits claim,
"appellees' First Amendment arguments, at base, are really inseparable from
their due process claims"); Lassiter v. Department of Social Servs., 452 U.S. 18
(1981) (Due Process Clause does not require government-funded counsel in
parental-status termination proceeding); Ortwein v. Schwab, 410 U.S. 656,
658-660 & n.5 (1973) (Due Process Clause does not prohibit filing fee for
judicial review of welfare benefits denial; First Amendment furnishes no
independent basis for claim); Goldberg v. Kelly, 397 U.S. 254, 270 (1970) (Due
Process Clause does not require government-funded counsel in welfare hearing).
Accordingly, although an attorney's ability to accept particular cases is often
restricted by a wide array of laws and rules, such measures generally are not
viewed as raising First Amendment issues.2 If they were, rules governing
attorney ethics and conflicts of interests, and state and federal restrictions
like Federal Rule of Civil Procedure 11, which prohibit attorneys from filing
complaints unless they are certified by the attorney as meeting certain
standards, would be subject to heightened scrutiny. But such laws and rules are
instead treated as reasonable limitations on an attorney's ability to provide
legal representation in certain circumstances. Section 504(a)(16) should be
viewed in a similar manner and as not triggering distinct First Amendment
scrutiny. As this Court observed in Walters, 473 U.S. at 335 & n.13, "the
constitutional analysis of a regulation that restricts core political speech * *
* will differ from the constitutional analysis of a restriction on the available
resources of a claimant in Government benefit proceedings."
A different
analysis is not required on the ground that the Section 504(a)(16) proviso
affords a greater likelihood of free legal representation to a certain type of
litigant (a welfare claimant seeking benefits under the existing welfare system,
who can hope to be one of those represented by an LSC fund recipient lawyer)
than to another type of litigant (a welfare claimant seeking relief that
involves a challenge to existing welfare reform law, who must find free
representation elsewhere). Congress often acts in a way that favors one type of
litigant over another, sometimes based on the nature of the litigant's legal
claim. See, e.g., Bennett v. Spear, 520 U.S. 154, 166 (1997) ("citizen-suit
provision * * * favor[s] environmentalists in that it covers all private
violations of the [Endangered Species Act] but not all failures of the Secretary
to meet his administrative responsibilities"); Christiansburg Garment Co. v.
EEOC, 434 U.S. 412 (1978) (award of attorney's fees under Title VII to
prevailing plaintiff is governed by more favorable standard than standard
governing award of attorney's fees to prevailing defendant); Hensley v.
Eckerhart, 461 U.S. 424, 429 & n.2 (1983) (same differential standards
govern attorney's fees awards under 42 U.S.C. 1988); cf. Block v. Community
Nutrition Inst., 467 U.S. 340 (1984) (statute allows handlers of dairy products
to seek judicial review of administrative order but does not allow ultimate
consumer to seek judicial review of same order). And far from calling for the
strictest of scrutiny, as respondents assert (Br. 12), special rules in suits
against the government are common, as demonstrated most prominently by the
doctrine of sovereign immunity, which can limit the type of relief that can be
obtained against the government or bar such suits altogether.
b.
Respondents take issue (Br. 22-27) with our position that the Section 504(a)(16)
proviso represents a legitimate instance of Congress defining the scope of a
funding program by subsidizing some services but not others. They assert (id. at
22) that our position reduces the First Amendment analysis to an "exercise in
semantics," because "virtually every viewpoint discriminatory allocation of a
speech subsidy can be repackaged semantically as a decision to fund one
'program' or 'service' rather than another." Respondents' objection overlooks
the express holding of Rust v. Sullivan, 500 U.S. 173 (1991), that Congress does
not engage in viewpoint discrimination by "refusing to fund activities,
including speech, which are specifically excluded from the scope of the project
funded." Id. at 194-195. That is precisely what Congress has done
here.
Respondents err in contending (Br. 18-21, 27) that the holding in
Rust applies only where the government itself is the speaker. The analysis in
Rust did not rely on that proposition. The Court held that the government does
not violate the Constitution when it "selectively fund[s] a program to encourage
certain activities it believes to be in the public interest, without at the same
time funding an alternative program that seeks to deal with the problem in
another way." 500 U.S. at 193 (emphasis added). Indeed, respondents concede (id.
at 19 n.17) that "the true speaker in Rust was not the government." Nor,
contrary to respondents' assertion (id. at 12-14, 18 n.16), have this Court's
subsequent cases limited Rust in the manner respondents propose or otherwise
suggested that the standards governing a public forum apply to all
government-funded speech except when the government itself is the
speaker.3
The First Amendment provides that Congress shall make no law
"abridging the freedom of speech." That freedom is presumptively "abridged" when
the government directly regulates private speech, or limits access on the basis
of content or viewpoint to a forum it has established for free private
expression. But government subsidies, like private donations, expand the
opportunity for private expression. Thus, even in the context of ordinary free
expression, they do not, absent more, "abridge" the freedom of speech of those
persons who are not subsidized. See Lyng v. Automobile Workers, 485 U.S. 360,
368 (1988) ("a legislature's decision not to subsidize the exercise of a
fundamental right does not infringe that right") (quoting Regan v. Taxation With
Representation, 461 U.S. 540, 549 (1983)); see also Regan, 461 U.S. at 546. A
fortiori that is so in the specialized setting of government funding of
representation in litigation.
c. Even if the Court were to apply notions
of viewpoint neutrality in the present setting, respondents could not prevail.
Their argument that the Section 504(a)(16) proviso discriminates against a
particular viewpoint in the allocation of federal funding is based on a
misunderstanding of the proviso. Respondents characterize it as protecting an
undefined, monolithic "government viewpoint." But the proviso does not operate
in that manner.
The proviso prohibits legal representation of an
individual welfare claimant by an LSC fund recipient where the relief sought
challenges "existing law." § 504(a)(16), 110 Stat. 1321-55; 45 C.F.R. 1639.4
(U.S. Br. App. 29a). LSC has defined "existing law" to mean "Federal, State or
local statutory laws or ordinances which are enacted as an effort to reform a
Federal or State welfare system and regulations issued pursuant thereto that
have been formally promulgated pursuant to public notice and comment
procedures." 45 C.F.R. 1639.2(b) (U.S. Br. App. 28a-29a).4
Thus, the
Section 504(a)(16) proviso precludes a welfare claimant from being represented
by an LSC fund recipient where the claimant seeks relief that challenges any
state or federal welfare reform law. That prohibition applies regardless of the
"viewpoint" of the challenged law or the person challenging it-e.g., whether the
law being challenged was enacted to reform a welfare system to the advantage of
welfare claimants or to their disadvantage. Respondents nonetheless charge that
the proviso "is openly premised on hostility toward legal arguments challenging
a particular government viewpoint." Resp. Br. 30. That is not true- even if we
accept for present purposes the strained hypothesis that the text of a duly
enacted law is properly characterized as a "viewpoint" in this context. For
example, the proviso prohibits representation by an LSC fund recipient not only
in a case where a welfare claimant seeks relief challenging a federal welfare
reform statute, but also in a case where a welfare claimant relies on the same
federal welfare reform statute and seeks relief challenging a state welfare
reform law or regulation as inconsistent with the federal statute. Also, the
proviso precludes representation by an LSC fund recipient where the relief
sought challenges the welfare reform law "in effect on the date of the
initiation of the representation," § 504(a)(16), 110 Stat. 1321-55, even though
that law may include provisions that are directly contrary to those in another
welfare reform law in effect on the date representation was initiated in another
case.
In sum, the Section 504(a)(16) proviso is properly regarded not as
resting on a hostility to a particular "viewpoint," but rather as furthering
Congress's legitimate purpose of ensuring that federal funds and federally
subsidized attorneys are not directed to efforts to upset the reforms of welfare
laws that have recently been put in place by Congress and the States. See note
4, supra. That purpose is justified by Congress's determination that there is a
need to focus the limited resources of LSC fund recipients on providing
representation in run-of-the-mine individual claims for benefits under those
laws, because such cases are specifically calculated to obtain benefits for
persons who are entitled to receive them, are less time-consuming and less
expensive than challenges to the welfare programs themselves, and are less
likely to attract other lawyers. See U.S. Br. 25-27. Moreover, a limitation on
federal subsidies of counsel, like a decision not to enact a fee-shifting
statute or a decision to invoke sovereign immunity, necessarily reflects a
judgment regarding the need for an apportionment of incentives in a particular
context, and may also take into account considerations of respect and comity
between the federal and state governments, as reflected here in the devolution
of authority to the States under PRWORA. Cf. Alden v. Maine, 527 U.S. 706, 754
(1999).
2. Respondents also contend (Br. 14-17, 27) that the Section
504(a)(16) proviso violates the First Amendment rights of attorneys employed by
LSC fund recipients because it impermissibly intrudes on their associational
relationship with their clients. Respondents acknowledge that Congress is not
generally obligated to furnish welfare claimants with a free lawyer (id. at 16),
but they contend that, "once Congress elects to fund a lawyer-client
relationship," the government cannot "manipulate the expressive associational
activities of the participants" (id. at 16-17).
a. The fundamental flaw
in that line of argument is that Congress has elected not to fund a
lawyer-client relationship between an attorney employed by an LSC fund recipient
and a welfare claimant who seeks relief that would invalidate existing welfare
reform laws and regulations. Section 504(a)(16) does not bar an attorney
employed by an LSC fund recipient from expressing to a person seeking legal
assistance (or to anyone else) his or her views regarding any legal issue,
including that a welfare reform law or regulation is unlawful or
unconstitutional. But the LSC Act and appropriations provisions do not allow
that attorney to agree to provide legal representation, under the auspices of an
LSC fund recipient, to all potential clients or to pursue all potential claims.
Lawyers employed by an LSC fund recipient accordingly are obliged to describe to
a potential client at the outset the statutory limitations on LSC-funded
representation, including the Section 504(a)(16) proviso, and to decline to
provide legal representation in cases covered by that (or other) restrictions.
The attorney is free, however, to refer a potential client to another attorney
who is not subject to the LSC restriction.5
The fact that the proviso
precludes an attorney employed by an LSC fund recipient from forming, within the
confines of an LSC-funded program, an attorney-client relationship with a
potential client for purposes of a particular lawsuit does not violate the First
Amendment. That limitation is a condition of the attorney's employment by a
recipient of federal funds and is a condition to which the attorney freely
agrees when he or she accepts that employment. Thus, respondents' claim of
unrestricted associational rights and their reliance (Resp. Br. 14-16, 27-28) on
cases such as NAACP v. Button, 371 U.S. 415 (1963), are misplaced. In none of
those cases did the attorneys or the organization claim the right to federal
funding to subsidize their First Amendment activities. See also note 2, supra.
Moreover, as respondents concede (Br. 39), an attorney employed by an LSC fund
recipient is not prohibited from exercising whatever right he or she has to
associate with clients outside of the LSC program.
b. There is no merit
to respondents' argument (Br. 16-17) that Rust supports their attorney-client
associational claim. Although the Court observed in Rust that one could argue,
by analogy to the university setting, that "traditional relationships such as
that between doctor and patient should enjoy protection under the First
Amendment from Government regulation, even when subsidized by the Government,"
500 U.S. at 200, the Court declared that it "need not resolve that question"
because the challenged regulations did not "significantly impinge upon the
doctor-patient relationship." Ibid.
Both of the reasons the Court gave
for that conclusion in Rust apply with equal force here. First, the Court noted
that "[n]othing in [the regulations] requires a doctor to represent as his own
any opinion that he does not in fact hold." 500 U.S. at 200. That is
unquestionably the case with respect to a lawyer employed by a recipient of LSC
funds. Second, the Court observed that the doctor-patient relationship
established by the federally funded program was not "sufficiently all
encompassing so as to justify an expectation on the part of the patient of
comprehensive medical advice." Ibid. The same is true under the LSC program.
That program allows the establishment of an attorney-client relationship to
pursue a client's rights with regard to certain categories of legal issues. See,
e.g., 42 U.S.C. 2996e; 42 U.S.C. 2996f(b) (1994 & Supp. IV 1998). Those
relationships are not so all-encompassing, however, as to justify an expectation
on the part of a client that he or she is entitled to comprehensive legal
representation for all possible welfare claims. More importantly, LSC fund
recipients remain free to inform clients of the limitations on the legal
representation that they can provide, and, unlike in Rust, they may refer
individuals who need other types of representation to other attorneys or
offices, including any affiliate organization.
B. RESPONDENTS'
CHALLENGES TO THE REGULATIONS ALLOWING FUND RECIPIENTS TO ESTABLISH SEPARATE
ENTITIES TO ENGAGE IN RESTRICTED ACTIVITIES USING NON-FEDERAL FUNDS DO NOT
WARRANT REVIEW AND ARE WITHOUT MERIT
Respondents argue, in the
alternative, that, even if the statutory limitation on the use of federal funds
is constitutional, the restriction on the use by an LSC fund recipient of
non-federal funds to provide representation in challenges to existing welfare
reform laws places an unconstitutional condition on its receipt of federal funds
because Congress did not leave open adequate alternative channels for LSC fund
recipients to exercise their own First Amendment rights. Yet at the same time,
respondents challenge, as beyond LSC's authority, the LSC regulations that allow
an LSC fund recipient to provide for the furnishing of restricted services
through the use of non-LSC funds by establishing a separate organization for
that purpose.
As we point out in our opening brief (at 23 n.11),
respondents have sought review of the Second Circuit's rejection of those
contentions in their certiorari petition in No. 99-604, Velazquez v. Legal
Services Corp.. The Court has not granted that petition, however, and the court
of appeals' decision in that regard does not merit review by this Court because
it is in accord with the decision of the Ninth Circuit in Legal Aid Soc'y of
Haw., 145 F.3d at 1024-1029, does not conflict with the ruling of any other
circuit, and is supported by this Court's decisions in FCC v. League of Women
Voters, 468 U.S. 364 (1984), Regan, and Rust, which held that such
separate-entity requirements are consistent with the First Amendment.
Respondents nevertheless seek to have the Court consider their contentions here
by asserting (Br. 33 n.32) that they furnish an alternative ground for
affirmance of that portion of the Second Circuit's judgment that held Section
504(a)(16) unconstitutional. The logic of respondents' contentions, however,
would invalidate all of the restrictions in Section 504(a), not simply the
welfare benefits proviso to Section 504(a)(16), and, moreover, the Second
Circuit's reasoning with respect to Section 504(a)(16) appears to apply to both
LSC and non-LSC funds.6 But whether or not these factors would preclude the
Court from considering respondents' arguments as alternative grounds for
affirmance of the Second Circuit's judgment concerning Section 504(a)(16) (see
R. Stern et al., Supreme Court Procedure sect; 6.35, at 365-367 (7th ed. 1993)),
the Court should decline to do so as a matter of discretion since, as we have
said, they do not warrant review. See United States v. Nobles, 422 U.S. 225,
241-242 n.16 (1975).
If the Court does reach those arguments, they are
without merit. Respondents argue, first, that contrary to LSC's regulations, the
statute prohibits the furnishing of restricted services through a separate
affiliate, and therefore imposes an unconstitutional condition on the receipt of
federal funds by prohibiting a recipient altogether from engaging in such
services, even with nonfederal funds. Second, respondents argue that, even if
LSC's regulations are based on a valid construction of the statute, the
requirement of complete institutional separation imposes an impermissible burden
on the use of nonfederal funds. Both arguments are mistaken.
1. The court
of appeals correctly held that the LSC regulations, which were issued after
notice-and-comment rulemaking, rest on a reasonable interpretation of the
relevant statutes and are entitled to deference under Chevron U.S.A. Inc. v.
NRDC, Inc., 467 U.S. 837 (1984). See 99-960 Pet. App. 12a-14a, 17a-23a. LSC is
vested with the duty to administer the statutory scheme and to fill any gaps
left by Congress through such regulations. See 42 U.S.C. 2996e(a)(1)(A) and (B),
2996g; Texas Rural Legal Aid, Inc. v. Legal Servs. Corp., 940 F.2d 685, 689
(D.C. Cir. 1991). Accordingly, the "basic principles of Chevron apply to the
statutory scheme" created by the LSC Act "and the role contemplated for LSC
under it." Ibid. It follows that LSC's interpretation of Section 504(a)(16) must
be upheld unless Congress has directly spoken to the question and resolved it
differently, or the regulations are based on an impermissible construction of
the statute. Chevron, 467 U.S. at 842-844.
Contrary to respondents'
contention (Br. 34-37), there is nothing in the text of the 1996 Appropriations
Act that precludes an LSC fund recipient from engaging in otherwise restricted
activities through an affiliated organization. Section 504(a) of the 1996 Act
provides that "[n]one of the funds appropriated" in that Act to LSC "may be used
to provide financial assistance to any person or entity" that is described in
subsections (1) through (19), 110 Stat. 1321-53; U.S. Br. App. 1a-2a. Section
504(d)(2)(B) further provides that funds received by a recipient from a source
other than LSC "may not be expended by recipients for any purpose prohibited by"
the 1996 Act or the LSC Act. 110 Stat. 1321-56; U.S. Br. App. 10a. An LSC fund
recipient does not act inconsistently with either of those provisions if it
creates an affiliate organization to spend non-federal funds and abides by the
program-integrity requirements of the LSC regulations. The affiliate does not
"use[]" federal funds to engage in activities prohibited by Section 504(a)(16),
and the LSC fund recipient does not "expend[]" any funds it receives for any of
those purposes. Moreover, respondents' argument was properly rejected by the
court of appeals in light of "the rule favoring an interpretation of a statute
that preserves its constitutionality." 99-960 Pet. App. 14a. See, e.g., Edward
J. DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485
U.S. 568, 575 (1988).
Respondents quote a passage in a Senate Report
stating that "[t]he legislation prohibits the use of alternative corporations to
avoid or evade the provisions of the law." Resp. Br. 35 (quoting S. Rep. No.
392, 104th Cong., 2d Sess. 13 (1996)). The bill that was the subject of that
Report would have amended Section 1013 of the LSC Act expressly to provide that
"[a]ny attempt, such as the creation or use of 'alternative corporations,' to
avoid or otherwise evade the provisions of this title or the Legal Services
Reform Act of 1995 is prohibited." See S. Rep. No. 392, supra, at 40. The fact
that Congress did not include that provision in the 1996 Act and subsequent
appropriations acts (see U.S. Br. 2; U.S. Br. App. 1a-25a) supports LSC's
interpretation of Section 504(a) not to preclude establishment of an affiliate
organization as provided in the LSC regulations.
2. LSC's regulations do
not place unconstitutionally burdensome restrictions on a recipient's use of
non-federal funds to exercise First Amendment rights. See Resp. Br. 38-44.
Congress has broad power to specify the purposes for which funds appropriated
out of the Federal Treasury may be spent. See U.S. Const. Art. I, § 9, Cl. 7. It
is well settled that Congress, in exercising that power, may, "in order to
ensure the integrity of the federally funded program," Rust, 500 U.S. at 198,
provide that federal funds are not to be used to facilitate particular
activities that also are supported by non-federal funds-even if the activities
involved are of a sort that are fully protected by the First Amendment when
engaged in without federal support so long as the fund recipient is allowed to
form an affiliate organization to receive and spend non-federal funds to engage
in those activities. See, e.g., League of Women Voters, 468 U.S. at 400.
Congress may require that such an affiliate organization be kept "physically and
financially separate" from the organization that receives federal funds. Rust,
500 U.S. at 180, 187-190.
As we explain at greater length in our brief in
opposition (at 12-18) in No. 99-604, this Court has, on several occasions,
rejected contrary arguments akin to those pressed by respondents. See Regan, 461
U.S. at 544-545; League of Women Voters, 468 U.S. at 400; Rust, 500 U.S. at
180-181, 198. The LSC restrictions, as implemented by LSC in its final
regulations, are fully consistent with the Court's explanation in those cases of
the separation requirements the Constitution permits the government to impose in
order to eliminate the risk of direct or indirect subsidization of activities
that Congress has chosen not to fund. LSC fund recipients are allowed to create
affiliates that use non-LSC funds to provide legal services that are foreclosed
to the LSC fund recipients themselves. As noted by the courts below, the
challenged regulations are substantially the same as those upheld in Rust. See
99-960 Pet. App. 10a, 76a.7 As in Rust, "Congress has merely refused to fund
[certain] activities out of the public fisc, and the [agency] has simply
required a certain degree of separation from the [federally funded] project in
order to ensure the integrity of the federally funded program." 500 U.S. at
198.
Moreover, the LSC restrictions are more permissive in some respects
than those at issue in Rust, because the latter contained a rule that prevented
physicians from discussing abortion as a method of family planning or referring
a patient to an abortion provider. See 500 U.S. at 180. The LSC regulations
contain no comparable restrictions As a result, LSC fund recipients may discuss
with their clients what other options they might have (including activities in
which the LSC fund recipient may not engage) and may refer clients to
organizations that provide restricted services (including any affiliate
organization the LSC fund recipient may create under the program-integrity
regulations).8
3. Respondents attempt to distinguish Rust by contending
(Br. 41-43) that there is no justification for requiring that an affiliate of an
LSC fund recipient be physically separate because longstanding LSC bookkeeping
requirements are sufficient to prevent government subsidization of restricted
activities in which the affiliate engages.
Respondents are wrong that
bookkeeping necessarily ensures that federal funds do not subsidize restricted
activities. Respondents' argument (Br. 38) that establishing a physically
separate affiliate imposes wasteful and inefficient burdens on recipients (by
requiring duplication of resources) confirms that, absent physical separation,
the funds of the LSC fund recipients are, to the extent of the burden
respondents assert, subsidizing the affiliate's activities by making them more
efficient and less costly. It is precisely that sort of indirect subsidy that
Congress intended to prohibit and that the LSC regulations are designed to
prevent.9 Put another way, respondents are complaining of the very costs and
asserted "burdens" that legal services organizations would have to bear if they
received no federal funds at all. The federal restrictions therefore are not
properly regarded as the cause of those costs and burdens.10
This Court
has recognized that the government has a strong interest in maintaining the
integrity of the programs it funds and in preventing direct or indirect
subsidies to activities that Congress has chosen not to fund. In Rust, for
instance, the Court held that the regulations requiring physical separation
furthered the interest in preventing federal funds from being spent on
prohibited activities, see 500 U.S. at 198, and rejected the argument that the
program could not extend to private matching funds. Id. at 199 n.5. And in
Regan, the Court noted: "TWR would, of course, have to ensure that the §
501(c)(3) organization did not subsidize the sect; 501(c)(4) organization;
otherwise, public funds might be spent on an activity Congress chose not to
subsidize." 461 U.S. at 544.
Respondents suggest that the only other
possible objective of the separation requirement is in avoiding the perception
that the government endorses the restricted activities, which, they assert, is
an insubstantial or even impermissible interest. See Resp. Br. 42-43. This case,
however, is unlike Rosenberger, in which the fact that the university funded a
multiplicity of competing student views reduced the potential that it endorsed
any one of them. 515 U.S. at 841-842. Here, Congress could be legitimately
concerned that the public would perceive that federal funds were being used to
support, and thus endorse, the restricted activities.11 Cf. Cornelius v. NAACP
Legal Defense & Educ. Fund, 473 U.S. 788, 809 (1985) ("avoiding the
appearance of political favoritism is a valid justification for limiting speech
in a nonpublic forum"). LSC's regulations also advance an additional government
interest: avoiding the public perception that federal funds are being used in a
manner not authorized by Congress. That interest is crucial to the integrity of
the LSC program and is precisely the governmental interest that the Court
recognized in Rust. See 500 U.S. at 188.12
* * * * *
For the
reasons set forth above and in our opening brief, the judgment of the court of
appeals should be reversed insofar as it holds unconstitutional the proviso in
Section 504(a)(16).
Respectfully submitted.
SETH P.
WAXMAN
Solicitor General
AUGUST 2000
1 Arkansas Educ.
Television Comm'n v. Forbes, 523 U.S. 666, 675-676 (1998), also cited by
respondents (Br. 11, 13-14), involved the standards applicable to a candidate's
access to a political debate on a public television station-a setting far
removed from the furnishing of legal services to an individual client.
2
In cases such as Brotherhood of R.R. Trainmen v. Virginia, 377 U.S. 1 (1964),
relied upon by respondents (Br. 15-16), "the First Amendment interest at stake
was primarily the right to associate collectively for the common good," not, as
here, "the individual interest in best prosecuting a claim," Walters, 473 U.S.
at 335. And NAACP v. Button, 371 U.S. 415 (1963), and its progeny, also relied
upon by respondents (see Br. 14-15), involved the First Amendment rights of an
organization to use litigation to promote its own political goals. Congress
surely was not required to fund any political goals LSC fund recipients may have
in their own right.
3 In Rosenberger, the Court did not describe Rust as
a case in which the government itself was actually speaking; it said that the
government "used private speakers to transmit specific information pertaining to
its own program," 515 U.S. at 833-a program making federal funds available for
professional family planning counseling that was conducted by the recipients of
the funds, not the government. Significantly, moreover, after noting that in
situations involving a governmental message, the government may take appropriate
steps to ensure that the message is not garbled or distorted by the grantee,
ibid., the Court stated that "[i]t does not follow * * * that viewpoint-based
restrictions are proper when the University does not itself speak or subsidize
transmittal of a message it favors but instead expends funds to encourage a
diversity of views from private speakers." Id. at 834 (emphasis added). The
emphasized passage makes it clear that Rosenberger did not hold that the
government is foreclosed from subsidizing private expression that it favors,
where it has refrained from establishing what is, in essence, a public forum for
the free expression of a broad range of private views. Accord 515 U.S. at
829-830.
Similarly, in National Endowment for the Arts v. Finley, 524
U.S. 569 (1998), the Court reiterated what it said Rust "held": that Congress
may "selectively fund a program to encourage certain activities it believes to
be in the public interest," and that, in doing so, "the Government has not
discriminated on the basis of viewpoint," id. at 588 (quoting 500 U.S. at 193);
and the Court in Finley distinguished Rosenberger as a case in which the
Government "indiscriminately 'encourage[d] a diversity of views from private
speakers,'" id. at 586 (quoting 515 U.S. at 834). (Respondents' quotation from
Finley (see Resp. Br. 18 n.16) is from the dissenting opinion in that case.)
In Southworth, although the Court cited Rust following its statement
that public forum analysis would not apply where the university speaks, 120 S.
Ct. at 1357, the Court did not thereby imply that the central principle of
Rust-that in a broad range of situations the government may selectively fund a
program to encourage certain activities-had been abandoned and replaced with a
rule that the government may favor a particular message only when the government
itself does the speaking. Indeed, in addition to citing Rust in connection with
its statement concerning speech by the university itself, the Court also cited
Regan v. Taxation With Representation, 461 U.S. 540 (1983), a case that
indisputably involved expressive activity (lobbying) by private entities, not
the government. Accord 120 S. Ct. at 1354.
4 LSC regulations define "an
effort to reform a Federal or State welfare system" to include the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (except
for its child support enforcement provisions) and "subsequent legislation
enacted by Congress or the States to implement, replace or modify key
components" of PRWORA, or "by States to replace or modify key components of
their General Assistance or similar means-tested programs conducted by States or
by counties with State funding or under State mandates." 45 C.F.R. 1639.2(a)
(U.S. Br. App. 28a). In adopting that definition, LSC explained that Congress
was considering Section 504(a)(16) while it was also considering PRWORA. See 62
Fed. Reg. 30,764-30,765 (1997). Thus, LSC's interpretation furthers Congress's
intent in enacting PRWORA "to increase the flexibility of States" in operating
welfare systems, 42 U.S.C. 601(a) (Supp. IV 1998); see Saenz v. Roe, 526 U.S.
489 (1999), by precluding federal subsidization of lawsuits challenging such
welfare reform systems.
5 Respondents complain (Br. 24-26) that it is
"often" impossible for an LSC fund recipient lawyer to know at "the outset of an
attorney-client relationship" whether representation of a welfare claimant will
involve a challenge to existing law. Respondents offer no empirical support for
that assertion, and ethical considerations may well require an attorney to
resolve any such doubts at the outset against undertaking the representation.
See ABA Comm. on Ethics & Prof. Resp., Formal Op. 96-399 (1996). But even if
respondents' speculation proved to be accurate, that would not render Section
504(a)(16) unconstitutional. It would simply mean that a lawyer who had accepted
representation would have to withdraw if he continued to be supported by LSC
funds. While the rules of ethics would then speak to the manner in which the
withdrawal would be accomplished, those ethical considerations do not present
matters of constitutional dimension. Cf. Caplin & Drysdale, Chartered v.
United States, 491 U.S. 617, 633 n.10 (1989). Moreover, speculation about
particular cases is insufficient to sustain a facial constitutional challenge-a
"'manifestly, strong medicine' that 'has been employed by the Court sparingly
and only as a last resort.'" Finley, 524 at 569; see also Hill v. Colorado, 120
S. Ct. 2480, 2498 (2000).
6 The district court ruled on respondents'
motion for a preliminary injunction, which sought to prevent LSC "from
disciplining any person or entity, including but not limited to dismissal or
termination or suspension of funding, for using non-federal funds to * * *
challenge the constitutionality of welfare statutes, to challenge the legality
of welfare regulations or statutes." J.A. 48 (emphasis added). The court of
appeals' decision was rendered on interlocutory appeal of that order under 28
U.S.C. 1292(a)(1), and it might therefore be argued that the court of appeals'
judgment is confined in that sense to the application of the funding
restrictions to non-federal funds. As respondents recognize (Br. 5), however,
the court of appeals' reasoning would invalidate the proviso to Section
504(a)(16) as applied to federal and non-federal funds alike.
7 Like the
Rust regulations, the LSC regulations require "physical and financial
separation" as part of a requirement that the LSC fund recipient and its
affiliate maintain "objective integrity and independence." Compare 45 C.F.R.
1610.8 with 42 C.F.R. 59.9. Sufficient physical and financial separation under
the LSC program is determined on a case-by-case basis using the same factors
identified in the Rust regulations: the existence of "separate personnel,"
"separate accounting and timekeeping records," "the degree of separation from
facilities in which restricted activities occur," and the presence of "forms of
identification which distinguish the recipient" from the affiliate. Compare 45
C.F.R. 1610.8 with 42 C.F.R. 59.9.
8 The one requirement in the LSC
regulations that was not in the Rust regulations-that an LSC fund recipient and
its affiliate organization be "legally" separate entities (45 C.F.R.
1610.8(a)(1))-does not alter the analysis, because such a requirement was held
by this Court in Regan not to constitute an undue burden. 461 U.S. at 544-545
n.6; see Legal Aid Soc'y of Haw., 145 F.3d at 1027-1028.
9 Congress made
clear when it enacted the statutory restrictions that "it is inappropriate for
Federal resources to be used to support directly or indirectly these
[prohibited] activities," since these activities "only further drain much needed
resources from the program's core mission-to provide basic legal aid to poor
individuals." H.R. Rep. No. 196, 104th Cong., 2d Sess. 121 (1996); see also S.
Rep. No. 392, supra, at 7 ("many legal services grantees currently receive funds
from both public and private sources. Since the money is basically fungible, it
would be difficult if not impossible to place restrictions only on the Federal
funds").
10 We do not doubt that it would be easier for LSC grant
recipients to benefit from the economies of scale allowed by shared resources.
Yet as respondents themselves acknowledge (Br. 39-40), some recipients have
established physically separate affiliates, and therefore the notion that it is
impossible to do so is simply incorrect. See also C. Carr & A. Hirschel, The
Transformation of Community Legal Services, Inc., of Philadelphia: One Program's
Experience Since the Federal Restrictions, 17 Yale L. & Pol'y Rev. 319
(1998). If a recipient avails itself of the affiliate structure, its ability to
use non-federal contributions is subject to restrictions only if the donor makes
a specific choice to give the money to the recipient rather than its non-LSC
affiliate, after receiving written notification that that choice would make the
contribution subject to the same restrictions as federal funds. That consequence
raises no substantial First Amendment issue.
11 As one Member of
Congress stated, in the eyes of the public, "every time they [legal services
lawyers] go out they are wearing the imprimatur of Congress and they are the
Federal Government, and the public does not distinguish the difference." 138
Cong. Rec. 10,521 (1992) (statement of Rep. McCollum). In conjunction with a
subsequent proposal to limit the activity of LSC grantees, concern was expressed
in Congress that "the public cannot differentiate between LSC advocacy
subsidized with public versus private funds." S. Rep. No. 392, supra, at 7. As a
result, Congress enacted the LSC restrictions to "maintain the credibility and
effectiveness of the program," 141 Cong. Rec. 27,002 (1995) (statement of Sen.
Hollings), and to "protect LSC from the negative perceptions of those who wish
to see its termination." 142 Cong. Rec. 4715 (1996) (remarks of Sen.
Domenici).
12 Respondents' contention (Br. 45-47) that the Section
504(a)(16) proviso violates separation of powers by interfering with the
decisional autonomy of the judiciary is without merit. Nothing in Section 504(a)
prevents a court from declaring what the law is, Marbury v. Madison, 5 U.S. (1
Cranch) 137 (1803), or directs a decision in a particular case, United States v.
Klein, 80 U.S. (13 Wall.) 128 (1871). Nor does Section 504(a) authorize LSC
attorneys to represent certain clients and then preclude them from calling
certain legal issues to the court's attention. Rather, the proviso prohibits LSC
attorneys from representing a client at all in a case in which the client seeks
relief that challenges existing welfare reform laws. The proviso does not
preclude any welfare claimant, whether proceeding pro se or represented by
someone other than an LSC fund recipient, from seeking such relief or making any
legal argument in support thereof.