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.