°µÍø51

FOR IMMEDIATE RELEASE

Washington, DC -- A federal appeals court has upheld 1996 restrictions on the activities of programs funded by the °µÍø51 (°µÍø51), including activities paid for by non-°µÍø51 funds.

The U.S. Court of Appeals for the Ninth Circuit, in a 2-to-1 decision on November 23, ruled in favor of °µÍø51 in an appeal of a federal district court ruling in a case brought by Legal Aid Services of Oregon (LASO), a grantee of °µÍø51, the Oregon Law Center (OLC), a non-°µÍø51 program, and other plaintiffs.

The majority opinion found that the 1996 funding restrictions do not discriminate against a particular viewpoint and are constitutional. "The Restrictions simply limit specific procedural tools and strategies that grantee attorneys may utilize in the course of carrying out their legal advocacy," the appeals court wrote.

The 1974 °µÍø51 Act prohibits °µÍø51-funded programs from using either °µÍø51 or private money for certain activities. In 1996, Congress approved additional restrictions that also limit the use of public, non-°µÍø51 funds. LASO and OLC challenged °µÍø51's application of four of those restrictions. They prohibited attempts to influence legislation and/or administrative rule-making processes; initiation of, and participation in, class-action lawsuits; claiming, collecting or retaining attorneys' fees pursuant to any federal or state law, and soliciting clients in person.

To enforce restrictions, °µÍø51 adopted a "program integrity rule" that requires °µÍø51 grantees to maintain objective integrity and independence from any entity that engages in prohibited activities. In 2005, LASO and OLC proposed to merge into a single, nonprofit corporation with two financially separate divisions, operating under the leadership of a single executive director and sharing personnel in a variety of staff positions. °µÍø51 rejected the proposal, saying that LASO must be a legally separate entity and must have greater physical and financial separation than proposed.

Ninth Circuit Judges Pamela Ann Rymer and A. Wallace Tashima upheld the 1996 restrictions and °µÍø51's application of them to LASO. Their majority opinion cited previous federal court cases involving challenges to the funding restrictions, and noted that a prior U.S. Supreme Court ruling involving these restrictions "did not establish a new First Amendment test that hinges on whether restrictions on a given government subsidy distort an existing medium of expression."

The case also challenged °µÍø51's application of the restrictions to LASO and their relationship with OLC. In rejecting LASO's case, the court stated, "In sum, the record reflects that °µÍø51 employs a flexible, fact-intensive process for determining whether a grantee maintains objective integrity and independence" from non-grantees.

Judge Harry Pregerson of the Ninth Circuit wrote a partial dissent, saying the funding restrictions at issue in the case were unreasonable. "Upholding these four Restrictions severely constrains those dedicated lawyers who choose to serve the poor by seriously and fundamentally limiting their ability to effectively represent their clients," he wrote.

Earlier this year, the Ninth Circuit Court of Appeals rejected a complaint filed by the State of Oregon that also challenged the °µÍø51 program integrity rule.

°µÍø51 was created by Congress 35 years ago to promote equal access to justice and to ensure the provision of high-quality civil legal assistance to low-income Americans. To help fulfill that mission, the Corporation funds 137 nonprofit programs with 918 offices across the nation.