Velazquez v. Legal Services Corp.
| Decision Date | 20 December 2004 |
| Docket Number | No. 01-CV-8371.,No. 97-CV-182.,97-CV-182.,01-CV-8371. |
| Citation | 349 F.Supp.2d 566 |
| Parties | Carmen VELAZQUEZ, Wep Workers Together!, Community Service Society of New York, Inc., New York City Coalition to End Lead Poisoning, Centro Independiente de Trabajadores Agricolas, Inc., and Greater New York Labor-Religion Coalition, on behalf of all similarly situated individuals, organizations and their members; namely, individuals and organizations who are, or wish to be, represented by lawyers employed by entities receiving funds from the Legal Services Corporation, and who wish to assert legal claims as members of a class, or to benefit from some other legal advocacy activity proscribed by Pub.L. 104-208; Farmworkers Legal Services of New York, Inc., on behalf of itself, and on behalf of all similarly situated not-for-profit legal services entities; namely, organizations who wish to be eligible to receive funds from the Legal Services Corporation, and who wish to be free to engage in legal advocacy activities that are proscribed by Pub.L. 104-208; Lucy A. Billings, Peggy Earisman, Olive Karen Stamm, Jeanette Zelhof, Elisabeth Benjamin, Jill Ann Boskey, and Lauren Shapiro, on behalf of each, and on behalf of all similarly situated individuals; namely, attorneys employed or formerly employed by entities receiving funds from the Legal Services Corporation who wish to be free to represent indigent individuals in class actions, and to engage in other attorney-client activities that are proscribed by Pub.L. 104-208; and Andrew J. Connick, Councilmember C. Virginia Fields, Councilmember Guillermo Linares, Councilmember Stanley Michels, Councilmember Adam Clayton Powell, IV, Senator Lawrence Seabrook, and Assemblyman Scott M. Stringer, on behalf of themselves and all similarly situated individuals; namely, individuals who have provided public or private non-federal funding to entities that also receive funds from the Legal Services Corporation, and who wish these funds to be used for legal advocacy activities that are proscribed by Pub.L. 104-208, Plaintiffs, v. LEGAL SERVICES CORPORATION, Defendant. David F. Dobbins, New York Foundation, Lisa E. Cleary, David W. Ichel, David G. Keyko, MFY Legal Services, Inc., Brooklyn Legal Service Corp. B, Legal Services for New York City, Bronx Legal Services, Inc, on their own behalf and on behalf of their clients, Plaintiffs, v. Legal Services Corporation, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
The Brennan Center for Justice, by Burt Neuborne, Esq., David S. Udell, Esq., Laura Abel, Esq., Craig Siegel, Esq., Kaye, Scholer, Fierman, Hays & Handler, LLP, by Peter M. Fishbein, Esq., Michael F. Bahler, Esq., New York, NY, for Plaintiffs.
Kronish, Lieb, Weiner & Hellman LLP, by Stephen L. Ascher, Esq., Alan Levine, Esq., Rachel Gordon Licten, Esq., Anne Nacinovich, Esq., New York, NY, for Defendant Legal Services Corporation.
United States Department of Justice, Civil Division, by Joseph W. Lobue, Esq., John Tyler, Esq., Washington, DC, for Intervenor-Defendant United States of America.
General familiarity with the prior litigation in Action I (the Velazquez action) is presumed, as encompassed by this Court's decision in Velazquez v. Legal Services Corp., 985 F.Supp. 323 (E.D.N.Y.1997) ("Velazquez I"), the Second Circuit's decision in Velazquez v. Legal Services Corp., 164 F.3d 757 (2d Cir.1999) ("Velazquez II"), and the Supreme Court's decision in Legal Services Corp. v. Velazquez, 531 U.S. 533, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001) ("Velazquez III"). Action II (the Dobbins action) was filed after the Supreme Court rendered its decision in Velazquez III. Before the Court are the following preliminary injunction applications: (1) all the plaintiffs in both actions bring a facial Tenth Amendment challenge to the extension of the restrictions Congress has imposed on legal-services entities that accept funding from defendant Legal Services Corporation ("LSC") to state and local-government funding of these entities; (2) all the plaintiffs in both actions bring facial First Amendment challenges to three such restrictions: the class-action, attorney's-fees and solicitation prohibitions; (3) two of the Dobbins plaintiffs, South Brooklyn Legal Services ("SBLS") and Legal Services of New York ("LSNY"), and one of the Velazquez plaintiffs, Farmworker Legal Services ("FWLS") (collectively "plaintiff-grantees"), bring as-applied First Amendment challenges to LSC's program integrity rules. LSC and the United States intervener (the "Government") (collectively "defendants") seek dismissal of both actions pursuant to Fed. R. Civ. Pro. 12(b)(1) and 12(b)(6).
The Court rejects all facial challenges, but grants plaintiff-grantees preliminary injunctive relief in respect to their as-applied challenges.1
The Velazquez complaint, as amended, mounted a broad-scaled attack under the First, Fifth and Tenth Amendments to proscribed activities imposed on recipients of LSC funds under the Omnibus Consolidated Rescissions and Appropriations Act of 1996 § 504, 110 Stat. 1321-53 (the "Act"),2 and a regulation enacted by LSC authorizing recipients of LSC funds to create affiliates with non-LSC funds to perform restricted activities, provided there be compliance with LSC's program integrity rules.3 In addition to FWLS, a former recipient of LSC funds, which refused to accept such funds after the Act's restrictions went into effect, the other Velazquez plaintiffs are clients of LSC grantees, lawyers employed by LSC grantees, and public-office holders of state and local governmental entities, which entities have given non-federal monies to LSC grantees ("government-donor plaintiffs"). In Velazquez I, the Court tersely disposed of plaintiffs' Fifth Amendment challenge, finding no due process or equal protection violations, and rejected their First Amendment facial challenge to the program integrity rules, holding that they were lawfully adopted by LSC and facially afforded a means by which LSC-fund recipients could create affiliates with non-LSC funds to engage in activities prohibited by the Act. Plaintiffs appealed the rejection of their First Amendment challenge, and the Court of Appeals affirmed. In doing so, it also passed upon plaintiffs' facial challenges to some of the restricted activities. Other than their challenge to the "suits-for-benefits" exception of the welfare-reform restriction, the circuit court rejected all such facial challenges, finding the restrictions to be viewpoint neutral. In respect to the "suits-for-benefits" exception, the circuit court held that it violated the First Amendment because it "unconstitutionally restricts freedom of speech, insofar as it restricts a grantee, seeking relief for a welfare applicant, from challenging existing law." Velazquez II, 164 F.3d at 772. On that issue, the Supreme Court granted LSC's...
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