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A Welcome Ruling on Legal
Services Funding
Ruling in a case from Washington state, the
U.S. Supreme Court has preserved a vital means of assuring
the poor access to America's court.
The court's 5-4 ruling Wednesday was a significant victory
for state efforts to make the legal system fairer and more
accessible to low income Americans. It keeps open an essential
cash pipeline that generates about $200 million a year for
legal services for the nation's poor, including about $4 million
in Washington.
Despite current funding levels, many legal services programs
are already stretched too thin. Too many low income Americans
can't even dream of seeking legal advice or representation.
For them, the courthouse door isn't just closed, it's locked.
This lack of access is a shameful blot on the American legal
system one that would have expanded had the Supreme Court
ruled otherwise.
The majority turned back a challenge by a conservative public
interest law firm to Washington's program requiring attorneys
to pool their clients' escrow funds and other money that "could
not otherwise generate net earnings" in short term deposits.
The interest from these accounts is used to support legal
services for the poor. Washington's plan is based on a national
model.
The Washington Legal Foundation, which filed a lawsuit on
behalf of two real estate developers, unsuccessfully argued
that the Interest on Lawyers' Trust Accounts (IOLTA) program
violated the Fifth Amendment's "takings" provision
because it used money that should go to clients without providing
just compensation.
But, as Justice John Paul Stevens noted, the constitutional
requirement of just compensation is determined by an owner's
monetary loss, which in this case is zero. The amount of interest
earned in the IOLTA account in question was minuscule, less
than $5 in both cases.
Although the interest obviously belonged to the clients,
transaction fees in non IOLTA accounts would have gobbled
up the interest earned, the court majority noted. In addition,
using the money to support legal services for the poor satisfied
another Fifth Amendment requisite that private property confiscated
by the state be used for a public purpose.
The majority combines solid legal analysis with something
equally important a fair result. The ruling doesn't impose
an economic burden on legal clients. More importantly, it
will help some of the poor open courthouse doors.
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