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Case Summary for Legal Services Corporation v. Velazquez
Argued: Oct. 4, 2000
Decided: Feb. 28, 2001
Issue: Freedom of Speech — 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?
Answer: Yes. The Court ruled 5-4 that the restriction constitutes impermissible viewpoint discrimination.
Decisions: The opinion for the U.S. District Court for the Eastern District of New York is Velazquez v. Legal Servs.Corp., 985 F. Supp. 323 (E.D.N.Y. 1997). The opinion of the U.S. Court of Appeals for the 2nd Circuit is Velazquez v. Legal Servs. Corp., 164 F.3d 757 (2d Cir. 1999).

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.

Legal Principles: 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).
Legal Basis for Decision: 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.
Significance: 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.

Majority: Kennedy (joined by Stevens, Souter, Ginsburg and Breyer)
Dissent: Scalia (joined by O'Connor, Rehnquist and Thomas)
Quotable: "Congress cannot recast a condition on funding as a mere definition of its program in every case, lest the First Amendment be reduced to a simple semantic exercise." (Kennedy)

"We must be vigilant when Congress imposes rules and conditions which in effect insulate its own laws from legitimate judicial challenge." (Kennedy)

"The Court's decision displays not only an improper special solitude for our own profession; it also displays, I think, the very fondness for 'reform through the courts' — the making of innumerable social judgments through judge-pronounced constitutional imperatives — that prompted Congress to restrict publicly funded litigation of this sort." (Scalia)

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