Dixon v. Georgia Indigent Legal Services, Inc.

• Decision Date: 07 January 1975
• Docket Number: No. CV474-288.,CV474-288.
• Citation: 388 F. Supp. 1156
• Parties: Frances DIXON, Plaintiff, v. GEORGIA INDIGENT LEGAL SERVICES, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Georgia

388 F. Supp. 1156

Frances DIXON, Plaintiff, v. GEORGIA INDIGENT LEGAL SERVICES, INC., et al., Defendants.

No. CV474-288.

United States District Court, S. D. Georgia, Savannah Division.

December 23, 1974.

Opinion on Motion for Reconsideration January 7, 1975.

Joseph B. Bergen, Savannah, Ga., for plaintiff.

Frank W. Seiler, Bouhan, Williams & Levy, Savannah, Ga., Austin E. Catts, Nightingale, Liles & Dennard, Brunswick, Ga., for defendants.

ORDER ON PLAINTIFF'S MOTION TO REMAND

LAWRENCE, Chief Judge.

This case was originally brought in the Superior Court of Chatham County. It was removed to this Court under 28 U.S.C. § 1442(a)(1). The defendants are two legal services corporations, Georgia Indigent Legal Services, Inc. (GILS) and Georgia Legal Services Program, Inc. (GLSP), and two individuals. The latter who are attorneys are referred to as "representatives" of the legal services corporations and are alleged to be engaged in the illegal practice of law in Chatham County as agents of GILS and GLSP. Plaintiff seeks injunctive relief.

The provenance of this litigation is an action in trover brought by attorneys employed by the defendant corporations in the Municipal Court of Savannah against Frances Dixon, who is plaintiff in the case. She alleges that the suit in the Municipal Court was filed and is being prosecuted by Messrs. Gottlieb and Remar in violation of Georgia law which prohibits the practice of the profession by corporations. Mrs. Dixon contends that in representing clients in the courts of this State and in maintaining a legal department and rendering legal services, defendants are violating the Georgia statutes governing the unauthorized practice of law.¹

Plaintiff seeks to enjoin defendants from proceeding further with the conduct of the trover action in the Municipal Court. She also prays for a rule nisi directing them to show cause why they should not be enjoined from engaging in the practice of law. A restraining order was issued by the Superior Court as to further prosecution of the trover suit in the Municipal Court.

Defendants removed the case to this Court under 28 U.S.C. § 1442(a)(1).² They contend that in performing the challenged acts the individual defendants (both are attorneys) acted under officers of the United States, namely, the Director of the Office of Economic Opportunity and the Secretary of Health, Education, and Welfare.

Plaintiff moves to remand on the grounds: (a) that the State Court proceeding is not against an officer of the United States or any agency thereof, or person acting under him, for any act under color of such office; (b) federal courts are without jurisdiction to regulate the practice of law in the courts of Georgia which possess inherent and statutory power to govern the subject in the courts of this State.

An extensive evidentiary hearing was held on December 13th and 16th in connection with the motion to remand. Testimony was heard from six witnesses, including the Director of the Southeast Regional Legal Services (OEO); the present Executive Director of GILS and GLSP; his predecessor in that office; the managing attorney of the regional office at Savannah; the President and immediate past President of the Savannah Bar Association.

A proper understanding of the setting of the present controversy and particularly of the legal question as to removability of the State Court suit to this jurisdiction requires a somewhat extended review of the historical background of legal aid in Georgia and of the evidence before this Court connected with the motion to remand.

Background of Legal Aid in Georgia

The first Legal Aid Society in Georgia was established in 1924 at Atlanta. Under it, volunteer attorneys furnished gratuitous services to the poor. Similar local offices were later established by several local Bar Associations (Savannah, 1946;³ Macon, 1955; Columbus 1957).

For years the organized Bar of Georgia was interested in establishing a State-wide and funded Legal Aid system. However, adequate funds were lacking. In 1967 Federal funds for legal assistance to the poor became available through OEO. Several local Legal Aid offices took advantage of federal funding and qualified for same.

GILS

In 1970 the State Bar of Georgia became aware that Federal funds (through the Department of Health, Education, and Welfare) were available on a matching, three-to-one basis to fund a Statewide program for legal assistance for indigents in civil cases. Pursuant to resolution of the Board of Governors of the State Bar, Georgia Indigents Legal Services, Inc., a non-profit charitable corporation, was chartered in Bibb County under HEW guidelines. GILS qualified for federal funding. The present allocations to it are $250,000.00 of State funds and $750,000.00 of HEW funds. Its Directors are comprised of the Board of Governors of the State Bar, certain ex-officio members and five members-at-large.

Through the applicable State agency (now Department of Human Resources), HEW contracted with GILS to provide legal services in accordance with federal guidelines and regulations. GILS also entered into an agreement under which VISTA volunteers assist the regional offices in the capacity of paralegal assistants, clerical workers, librarians and investigators. These workers receive compensation directly from the federal Government.

Budget approval is required.⁴ The Executive Director of the State legal assistance corporation must submit a monthly financial report. A similar report as to the number of clients served is required. The Executive Director must approve the hiring of all employees. Remodeling of offices requires HEW approval. Telephone call logs must be kept reflecting the number of calls and the date and purpose thereof.

As a recipient of Federal funds, GILS is subject to various HEW regulations and requirements. Since they are of the same pattern as OEO guidelines governing the operations of GLSP, they will be covered under that heading.

GLSP

In 1971 the Younger Lawyers Section of the State Bar learned that OEO funds were available for legal services to indigents. However, the guidelines prohibited the funding of such a program through GILS as that program was then structured. For that reason, Georgia Legal Services Program, Inc., a non-profit, charitable corporation, was chartered in 1971 in Fulton County in accordance with OEO regulations. GLSP receives an annual federal grant of $500,000. The Board of Directors consists primarily of lawyers from areas receiving funds and five at-large directors.

Expenditure of GLSP funds is subject to the following OEO controls and regulations:

1. Its annual budget⁵ must be approved by the Regional Office.

2. Every three months the program must submit a "Grantee Quarterly Financial Report" (OEO Form 315) reporting the expenditure of federal funds. The annual audit must be made by a federally-approved firm of auditors.

3. All salaries exceeding $15,000 per year and any increase in an employee's salary exceeding 20% per annum must be approved by OEO.

4. A property inventory is required from each Regional Office. In any purchase of an item over $100 two oral bids are necessary. Purchases of items over $500 necessitate a written estimate and a federal form and approval in writing of the Regional Office. Title to all property purchased with federal funds is vested in OEO.

5. The program's personnel policies regarding vacation time, employee disputes and organizational structure require OEO approval.

6. The location of program offices, size of the staff, and office hours are subject to OEO approval.

7. All programs are subject to annual evaluations by a federally-funded evaluation team. It reviews the operation of the program and reports its findings, conclusions and recommendations to OEO. Based on such evaluations, the decisions as to additional federal funds and changes in the structure or operation of the program under review are made by OEO.

8. In the event of termination of federal assistance, the Regional Office arranges for the disposition of the personal property and the representation of clients and disposition of pending cases.

The two programs are operated together out of a central office in Atlanta.⁶ They are managed by the same Executive Director. There are nine regional offices, each of which is managed by a managing attorney. The regional office at Savannah is composed of one managing attorney, seven staff attorneys, three secretaries, and two administrative workers.

It is the responsibility of the Executive Director at the central office in Atlanta to assure that the two corporations and programs are operated in accordance with applicable HEW and OEO guidelines and regulations. He makes the final decision concerning hiring and firing of staff attorneys. All salaries are paid out of Federal funds from the Atlanta office. The Executive Director who is answerable to the Director, Southeast Regional Legal Services (OEO), is required to file numerous reports and financial forms with such Regional Director under applicable federal regulations. These reports cover the operation and activities of the Savannah regional office.

OEO and HEW guidelines are periodically forwarded to the Executive Director of the Georgia Legal Services Programs. It is his responsibility to communicate same to the regional offices and staff attorneys. Many of the OEO and HEW guidelines are restated in an office manual which is furnished to each regional office for use by staff attorneys.

Both programs must make a detailed day-by-day accounting of expenditures to the Federal government. Periodic surveys are made by an independent evaluation team selected by OEO. It visits each regional office and conducts interviews with clients, judges, bar leaders and community service organizations concerning the manner in which the federally funded programs are operating. The result of such evaluation could limit or even terminate the funding...