LEGAL SERVICES CORPORATION v. CARMEN VELAZQUEZ, et al.

Legal Principle at Issue

Does a 1996 law that permits attorneys receiving Legal Services Corp. funds to represent individuals in suits for welfare benefits, but prohibits them from challenging the constitutionality of existing welfare laws violate the First Amendment?

Action

Affirmed (includes modified). Petitioning party did not receive a favorable disposition.

Facts/Syllabus

Congress created the nonprofit Legal Services Corporation (LSC) in 1974 to distribute federal funds to local legal-aid organizations as the primary means of providing basic legal services for the indigent. Restrictions on the use of funds precluded litigation concerning: abortion, political activity, criminal proceedings, school desegregation, and military desertion. In 1996, restrictions were extended to encompass challenges to welfare laws, although representation of individuals in suits-for-benefits were permitted. The 1996 Act also forbid LSC recipients from using non-LSC funds for those purposes, although such activity by an affiliate not under the control of the recipient was allowed.

In 1997, legal-aid lawyers challenged the law as a violation of the First Amendment freedoms of speech and association and sought a preliminary injunction against its enforcement. The judge for the federal District Court in New York denied the injunction. The 2nd Circuit Court of Appeals agreed, with the exception of the suit-for-benefits provision. The 2nd Circuit ruled that the restriction on challenging the constitutionality of existing welfare laws constituted impermissible viewpoint discrimination.

The government has greater leeway to selectively fund speech when the government is the speaker. Rust v. Sullivan, 500 U.S. 173 (1991). The First Amendment generally prohibits discrimination against speech based on viewpoint. Rosenberger v. Rector and Visitors of the University of Virginia, 515 U.S. 819 (1995).

Importance of Case

Congress designed the LSC program to facilitate private speech, not promote the message of the government. The government cannot deny a subsidy that will affect a "serious and fundamental restriction on advocacy of attorneys and the functioning of the judiciary." The restriction would have an adverse impact on the judicial process and raise serious separation-of-powers problems.

The decision shows that the Court is very sensitive to claims involving viewpoint discrimination. The case is important in the area of welfare reform because numerous states have passed welfare reform laws, making this area of the law more complex that ever. The decision could lead to First Amendment challenges to a variety of federal subsidy programs, particularly where the Court deems the subsidy to be funding private speech.