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Keywords

lawsuitplaintifflawyerstatuteinjunctioncorporationregulation
lawsuitplaintiffstatuteinjunctionmotioncorporationregulation

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Velazquez v. Legal Services Corp., 164 F.3d 757

Facts

The plaintiffs, including lawyers from New York City LSC grantees, their indigent clients, and contributors to LSC grantees, filed a lawsuit against the restrictions imposed by Congress and LSC on the professional activities of LSC grantees. They sought a preliminary injunction against these restrictions, arguing that they violated various constitutional provisions. The district court denied the injunction, stating that the plaintiffs had not shown a likelihood of success on the merits.

Plaintiffs filed this lawsuit in January 1997, alleging that the restrictions on the use of non-federal monies violate their rights under First, Fifth, and Tenth Amendments to the United States Constitution.

Issue

Did the restrictions imposed by the Legal Services Corporation on the use of non-LSC funds by grantees violate the First Amendment and other constitutional provisions?

Did the restrictions on the use of non-federal monies violate their rights under First, Fifth, and Tenth Amendments to the United States Constitution?

Rule

The court applied the principles established in previous cases regarding the permissible scope of congressional restrictions on the activities of federally funded entities, particularly focusing on whether adequate alternative channels for protected speech remained available.

The Act provides that while program recipients may “us[e] funds received from a source other than the Legal Services Corporation to provide legal assistance, … such funds may not be expended by recipients for any purpose prohibited by this Act.”

Analysis

The court found that the LSC regulations did not violate the First Amendment as they did not impose an impermissible burden on the grantees' rights of free speech and association. The court noted that while the restrictions were broad, they were permissible as long as grantees had alternative avenues for engaging in protected activities. The court also emphasized that the plaintiffs had not demonstrated that the regulations would unduly burden their ability to engage in protected speech.

We find that the final rules represent a “permissible construction” of the Act and therefore survive the second Chevron inquiry.

Conclusion

The court affirmed in part and reversed in part, concluding that the LSC regulations were consistent with the governing statute and did not violate the First Amendment, except for the 'suit-for-benefits' provision.

The court determined that the statute and regulations were not likely to be invalidated and therefore denied the motion for a preliminary injunction.

Who won?

Legal Services Corporation prevailed in the case as the court upheld the majority of the restrictions imposed on LSC grantees, finding them constitutional.

Legal Services Corporation prevailed in the case as the court upheld the majority of the restrictions imposed on LSC grantees, finding them constitutional.

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