Legal Services Corp. v. Velazquez, 531 U.S. 533 (2001), is a decision of the Supreme Court of the United States concerning the constitutionality of funding restrictions imposed by the United States Congress. At issue were restrictions on the Legal Services Corporation (LSC), a private, nonprofit corporation established by Congress. The restrictions prohibited LSC attorneys from representing clients attempting to amend (or challenge) existing welfare law. The case was brought by Carmen Velazquez, whose LSC-funded attorneys sought to challenge existing welfare provisions since they believed that it was the only way to get Velazquez financial relief.
The Court ruled that the restrictions violated the free speech guarantees of the First Amendment to the United States Constitution. Because LSC facilitated "private" speech, that of its grantees, the restrictions did not simply regulate government speech.
Because the restrictions blocked attempts to change only a specific area of law, the Court held, they could not be considered viewpoint-neutral, and the government is prohibited from making such viewpoint-based restrictions of private speech.
Reactions to the decision were mixed within Congress, with Republicans and Democrats disagreeing on the propriety of the decision. Several law review articles argued that the use of a "distortion principle" to decide violations of free speech was an unreasonable and unconstitutional rule whose conditions on funding might "distort" speech advocacy. Others contended that the Court mishandled the interpretation of the statute at issue.
Background History of funding restriction jurisprudence The first major test of the federal government's power over funding restrictions based on speech was the 1991 case Rust v. Sullivan. In Rust, the Supreme Court had upheld a restriction on the use of Department of Health and Human Services funds for counseling, referring patients to, or advocating the use of abortion services. The Court reasoned that the restriction "merely [chose] to fund one activity to the exclusion of the other."531 U.S. at 541–543. Here, the government was using private speakers to transmit information about the government's own program.531 U.S. at 541–542.
Six years later, the Court reviewed another restriction, this time about funding restrictions imposed by a public university. In the 1997 case Rosenberger v. University of Virginia, a government supported university sought to withhold funds from religious student publications although it funded similar secular publications. The Court said that the government could seek to shape funding to support a government message, such restrictive steps could not be imposed to the exclusion of a particular viewpoint.531 U.S. at 542.
Legal Services Corporation In 1974 the United States Congress passed the Legal Services Corporation Act, which established the Legal Services Corporation. The purpose of the Act was to provide government-funded legal aid to indigent clients that would be funded through grants to regional entities throughout the country. In 1996, Congress amended the act with that year's appropriations bill, which imposed restrictions on the LSC. The restrictions included prohibitions against filing class action lawsuits, providing legal assistance to immigrants in particular types of cases, collecting attorney's fees, soliciting clients, providing advocacy training programs, and attempting to reform welfare laws. The restrictions affected only a small portion of the caseload.Houseman, Alan W. "What Can and Cannot Be Done: Representation of Clients by LSC-Funded Programs", "Center for Law and Social Policy," August 9, 2001. The restrictions prohibited funding cases:
... initiating legal representation or participating in any other way, in litigation, lobbying, or rulemaking, involving an effort to reform a Federal or State welfare system, except that this paragraph shall not be construed to preclude a recipient from representing an individual eligible client who is seeking specific relief from a welfare agency if such relief does not involve an effort to amend or otherwise challenge existing welfare law in effect on the date of the initiation of the representation.
Lower-court proceedings In 1997, Carmen Velazquez lost welfare benefits from the government under the provisions of the Temporary Assistance for Needy Families Act (TANF). An attorney from an LSC grantee, Bronx Legal Services, litigated her claim. Bronx Legal Services, on behalf of Velazquez, filed suit in the United States District Court for the Eastern District of New York to seek a declaration that the provision of the Act prohibiting challenges to existing welfare law was unconstitutional under the First Amendment. It argued that there was no way to help Velazquez without challenging the welfare system itself, and it sought to challenge the provisions under which Velazquez lost her benefits, a challenge that they could not make because of the 1996 restrictions.164 F.3d at 764 (2d Cir. 1999). The district court denied an injunction.164 F.3d at 762 (2d Cir. 1999).
The court's decision was affirmed in part and reversed in part by the United States Court of Appeals for the Second Circuit, which unanimously held that the welfare-advocacy restriction was unconstitutional,531 U.S. 535 at 537 but upheld other restrictions that Bronx Legal Services had challenged (such as the lobbying restriction) by a 2–1 vote. The Second Circuit also rejected the claim that any funding conditions would be illegitimate by instead preferring a case-by-case analysis. LSC asked the Supreme Court for a review and argued that the Second Circuit had been wrong in striking only down the welfare-advocacy restriction.531 U.S. 535 at 537, 540.
Supreme Court decision The Supreme Court heard oral arguments in the case on October 4, 2000 and issued its decision four months later.531 U.S. at 535.
The Court affirmed the decision of the Second Circuit Court of Appeals by holding 5-4 that the restriction on pursuing welfare advocacy was unconstitutional because of the First Amendment.531 U.S. at 549.
Justice Kennedy delivered the majority opinion. It distinguished a 1991 Supreme Court case, Rust v. Sullivan, which upheld a prohibition on federally funded family planning services from discussing abortion with their patients. The majority reasoned that in Rust, the government was attempting to use its funds to express its own message, but the purpose of the Act was to promote a diversity of private views with its funding, not an attempt to restrict any views. The Court said that the government can only issue "content-neutral" conditions on such speech and that the specific prohibition on welfare-reform litigation was viewpoint-based by restricting only support for welfare reform advocacy. "If the restriction on speech and legal advice were to stand, the result would be two tiers of cases... there would be lingering doubt whether the truncated representation had resulted in complete analysis of the case, full advice to the client, and proper presentation to the court."531 U.S. at 546.
The Court also criticized the fact that the restriction functionally barred attorneys from participating in the courts.531 U.S. at 548. Any attorney receiving LSC funding would not be able to litigate welfare claims that challenged welfare rules, thereby preventing certain cases from being filed. "The restriction imposed by the statute here threatens severe impairment of the judicial function.... We must be vigilant when Congress imposes rules and conditions which, in effect, insulate its own laws from legitimate judicial challenge."
Dissent Justice Scalia wrote a dissenting opinion from the decision of the Court and believed that Rust mandated a ruling upholding the restriction. Scalia was joined by Chief Justice William H. Rehnquist and Associate Justices Sandra Day O'Connor and Clarence Thomas and wrote, "The [act] is a federal subsidy program, not a federal regulatory program... regulations directly restrict speech; subsidies do not." He disagreed with the majority's contention that there was viewpoint discrimination and argued that no specific viewpoint was restricted. Scalia was also concerned with dicta in the majority opinion that seemed to him to indicate a "fondness" for the concept of reform by using the courts.531 U.S. at 563.
He argued that the majority's holding was "unprecedented" because it was the first time the government would be limited in advocating its own message.
Reactions The immediate reaction was mixed among members of Congress. Democratic supporters of the decision were optimistic of future victories against funding restrictions and stated that they were glad the restriction had fallen but that the decision "opens the LSC up to even more attacks." Republicans in Congress condemned the decision and agreeing to work against it. US Representative Steve Largent (R-OK) said, "It'll be on the radar screen for sure.... Why are we giving taxpayer money to sue taxpayers?" The New York Times described the decision as the end of the "latest chapter, although almost certainly not the last, in a long political struggle over the federally financed program of civil legal services for the poor."
Parties involved in the case also had mixed reactions. LSC, which had sought to protect the restrictions, said that it would "immediately review [their] regulations and then modify them to adhere to the Court's ruling," which it did quickly after the decision. Burt Neuborne, the lawyer who argued against the restriction before the Supreme Court, said that the ruling "really reads like a First Amendment textbook."
Subsequent developments In the weeks following the Velazquez decision, the Supreme Court rejected appeals related to other LSC restrictions. LSC has engaged in welfare-reform litigation since the original injunction was lifted.
The case provided the basis for other challenges to restrictions imposed on LSC, such as bans against lobbying or class actions.Schwinn, Steven D. "Ninth Circuit Declines Further Review of Legal Services Funding Restrictions", Constitutional Law Prof Blog, June 4, 2010, accessed January 1, 2011 The challenges were rejected by the Ninth Circuit and the Second Circuit in separate suits.Oregon v. Legal Services Corp., 552 F. 3d 965 (9th Cir., 2009; dismissing challenge against restrictions)Brooklyn Legal Services Corp. v. Legal Services Corp., 462 F. 3d 219 (2nd Cir., 2006; dismissing challenge to attorney fee restriction) The challenges failed because the relevant provisions do not regulate a specific type of advocacy; for example, the restriction on LSC grantees from collecting attorney's fees would not raise a speech issue because there is no speech involved in such a process. The argument raised in those challenges was that the Court articulated a new "conditions" principle in Velazquez, a distortion-of-speech test, which they argued would require the restrictions to be struck down. Both courts of appeal reviewing that claim have rejected that reading of Velazquez. Instead of a distortion-of-speech test, the decision was based on the application of limited public forum principles. When the government provides funds to an entity, and the funding's purpose was to encourage diversity of private views, it must act in a viewpoint-neutral way. Programs funded in this manner are treated as a public forum in which the ability of the government to restrict speech is highly limited.