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Can the government be accused of taking an individual's private
property when there is no property to take? The U.S. Supreme
Court answered that question recently with the obvious answer:
No. The decision salvaged a vital funding source for legal
services programs across the country.
The case, Brown vs. The Legal Foundation of Washington,
challenged a program providing funding of legal services to
the poor. Opponents of the program claimed that the way it
generates revenue is unconstitutional.
When lawyers hold money for clients for short periods of
time, such as real estate deposits held in escrow, that money
is typically set aside in a separate trust account. Any interest
that might be earned on that short term account is eaten up
by administrative fees. However, by directing attorneys to
utilize a combined account, interest can be accumulated into
substantial amounts. That money about $160 million annually
nationwide has been used by states to underwrite legal services
to the poor. In Florida, the Interest on Trust Accounts, or
Iota, funds are distributed by the Florida Bar Foundation
and amount to about $12 million per year.
For the past decade, the Washington Legal Foundation a conservative
litigation group has been challenging these funding programs
arguing that the money being diverted is the private property
of attorney clients. The Constitution's prohibition on government
takings without just compensation is violated, said the group,
when the trust account interest money is used without permission
of the clients.
Justice John Paul Stevens rebutted this assertion for the
five justice majority. He said the actual loss to the attorneys'
clients was "zero." Therefore, there could be no
"taking" and no lost compensation. The ruling makes
perfect sense and is so narrowly drawn it isn't likely to
apply to many other situations.
The case was another skirmish in the culture war. This time,
those looking to keep the courts open to the poor won, but
one new justice could change the outcome.
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