Dobbins/Velazquez v. Legal Services Corporation

Challenging Legal Services Funding Restrictions

The Brennan Center is challenging restrictions on civil legal aid programs that receive some of their funding from the federal Legal Services Corporation (LSC).

In February 2001, the Brennan Center obtained a ruling in the Velazquez v. LSC from the U.S. Supreme Court striking down as unconstitutional a restriction that had prohibited civil legal aid lawyers from challenging welfare reform laws in the course of representing clients seeking welfare benefits.

In December 2001, the Brennan Center filed a second case, Dobbins v. LSC, on behalf of several legal aid programs and some of their funders. Dobbins was filed before the same judge in federal district court in Brooklyn, and is now proceeding alongside Velazquez.

In December 2001, the Brennan Center moved for a preliminary injunction in both cases.

First, the plaintiffs sought to prohibit LSC from enforcing the federal law known as the “private money restriction.” The private money restriction extends other LSC restrictions (those barring class action litigation, lobbying, representation of certain immigrants, and other important activities) to limit the use of non-LSC funds by LSC recipient programs.

Second, the plaintiffs sought to enjoin LSC from enforcing a regulation that requires LSC grantees to set up a physically separate organization if they wish to use any of their non-LSC funds to finance the restricted activities (LSC’s “physical separation requirement”).

And, third, the plaintiffs challenged three specific LSC restrictions: the restrictions prohibiting class actions, public interest solicitation, and claims for attorneys fee awards. 

On December 20, 2004, the U.S. District Court ordered LSC to stop enforcing the physical separation requirement against the plaintiff civil legal aid programs. The court agreed with the plaintiffs that, as applied to them, the requirement violated the First Amendment to the Constitution. Having made this ruling, the court did not determine to overturn the private money restriction. The court also declined to overturn the specific restrictions that plaintiffs had challenged concerning class actions, attorneys’ fee awards, and public interest solicitation. 

In 2005, LSC appealed the district court’s ruling and the United States joined the appeal.  The plaintiffs filed a cross-appeal. On September 8, 2006, a panel of three judges of the U.S. Court of Appeals for the Second Circuit issued a decision that does the following:

• Lifts a preliminary injunction entered by the district court,
• Requires the district court to apply a different legal standard to determine whether the burdens imposed on the plaintiff legal services programs by the physical separation requirement effectively deny them adequate alternative channels through which to spend their non-LSC funds on the activities prohibited by the funding restrictions, and
• Affirms the part of the district court’s order that declined to overturn the specific restrictions on class actions, attorneys’ fee awards and public interest solicitation.

In December, 2006, the Second Circuit denied the plaintiffs’ petition for rehearing and rehearing en banc. In May, 2007, the plaintiffs filed a petition with the U.S. Supreme Court, asking it to hear the case. In October 2007, the Supreme Court denied our request to hear the case, which means the case will continue at the District Court.

On April 2, 2009, the parties agreed to suspend Dobbins and Velazquez indefinitely, based on the plaintiffs’ belief that Congress may soon enact legislation appropriating funding to LSC that would amend or repeal some or all of the Congressional acts and statutes being challenged in these cases, including the so-called “private money restriction.” The continuance may be terminated by any party and the case may be resumed in the District Court at any time.

To learn more about the Center’s parallel public policy campaign that works for a legislative repeal of the restriction on non-LSC funds, click here.