House Subcommittee Begins Unraveling Restrictions on Legal Services Activism

Mollohan photoA key congressional appropriations committee recently took the first step in removing restrictions on the ability of legal aid programs funded by the Legal Services Corporation (LSC) to use taxpayer dollars to engage in politically-motivated litigation. On June 4, the House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies, chaired by Rep. Alan Mollohan (D-WV), voted to lift the restriction on the ability of LSC-funded programs to collect attorneys’ fees.

This restriction was part of a series of provisions Congress enacted 13 years ago in an attempt to end the practice of legal services lawyers using taxpayer money to file lawsuits advancing liberal political causes. In addition to the prohibition on collecting attorneys’ fees, the restrictions included bans on filing class action lawsuits, challenges to welfare reform, representation of undocumented aliens, and abortion advocacy.The prohibition on collecting attorneys’ fees, a routine practice for private sector lawyers, is necessary to insure that LSC-funded programs, currently numbering 137 nonprofit organizations, only pursue cases that meet the LSC mission of ostensibly providing assistance to the poor for routine legal problems such as landlord disputes or domestic violence complaints. Allowing LSC grantees to collect fees would make them operate more like for-profit law firms. As a result, legal services lawyers, who are already salaried, would seek out those cases that generate lucrative fees at the expense of those cases that are most relevant to the actual needs of the poor.

The decision of the Commerce Appropriations Subcommittee to lift the fee restriction, a disturbing development in itself, only marks the beginning of the removal of other key restrictions. At an April 1 subcommittee hearing, several Democratic members stated that the restriction on class action suits should be lifted as well. On March 26, Senator Tom Harkin (D-IA) introduced legislation, the “Civil Access to Justice Act,” that would lift the restriction on collecting attorneys’ fees, to bring class action suits, and permit lobbying with non-federal funds. The Harkin bill also called for boosting the LSC budget from its current $390 million to $750 million.

And it is not just Congress that wants to gut the restrictions. On May 7, the Obama Administration called on Congress to repeal the restrictions on receiving attorneys’ fees, the prohibition against class action lawsuits, and the use of non-LSC money to pursue prohibited LSC cases.

Lifting the bans on attorneys’ fees and class action lawsuits would have a most pernicious effect. LSC grantees would be emboldened to engage in the type of controversial political litigation that has plagued the program since its inception in 1974. For instance, grantees would be more motivated to file massive class action suits on behalf of thousands of people they claim were unjustly denied Medicaid benefits or welfare assistance. These are the types of lawsuits that typically generate enormous awards of attorneys’ fees. While a legitimate practice for a private-sector lawyer, it is not at all the kind of litigation that taxpayers should have to subsidize.

If Congress lifts the ban on the use of non-LSC funds to pursue prohibited cases, which the White House and Senator Harkin advocate, it would render virtually all restrictions meaningless. The large majority of LSC grantees, which are private nonprofit organizations, receive money from either private or other government sources. Without the restriction on non-LSC funds, grantees could simply claim they are using non-LSC money to pursue the cases prohibited from using LSC funds. Thus, LSC grantees would be free to file lawsuits on behalf of illegal aliens, prisoners, and drug criminals being evicted from public housing.

In addition to lifting the ban on fees, the Commerce Appropriations Subcommittee also voted to boost the LSC budget from $390 to $440 million for Fiscal Year 2010, a nearly 13 percent increase. LSC sought $485 million. The subcommittee’s recommendation, which the House Appropriations Committee will no doubt accept, is similar to the Obama Administration’s recommendation of $435 million.

Likewise, the Senate is indicating it supports that level of funding. In May, 53 Senators – 45 Democrats, six Republicans, and two independents – signed a letter asking key congressional appropriators to provide at least $435 million for LSC.

The combination of increased funding and repeal of critical restrictions will lead to a sharp increase in legal services litigation on behalf of hard left causes. So Americans, already exasperated for having to fund trillion-dollar bailouts and stimulus boondoggles, will see their tax dollars used by activist lawyers to fund radical political advocacy.