Legal Aid to Get Help

By Robert Iafolla

Daily Journal Staff Writer

WASHINGTON - The Senate passed a spending bill last week that would ease a raft of restrictions on what nonprofit legal service providers can do if they take federal dollars, paving the way for negotiations that could decide the level of access America's poor has to civil legal aid.

Under the bill, federally funded legal nonproftis could once again collect attorney fees, bring class action lawsuits, and engage in other matters banned since 1996, as long as those activities were paid for by private donations or state sources. Remnants of the restrictions remain, however, as the nonprofits could not use federal money to finance those activities.

The bill also gives Legal Services Corp., the quasi-governmental group that distributes federal grants to local nonprofits, a relatively modest budget boost, raising its overall funding by $10 million to $400 million.

The spending bill passed in the House of Representatives this summer takes a different approach by calling for a larger funding increase - $50 million - while keeping all of the prohibitions on legal nonprofits except the ban on collecting fees.

Passage in the Senate sets up an all-important conference committee, where lawmakers from both chambers will reconcile the two versions and come up with one bill. The Legal Service Corp. budget is one part of a $65 billion Commerce-Justice-Science spending bill that covers everything from the Justice Department to the space program.

California-based nonprofit legal service providers interviewed for this article expressed hope that Congress would incorporate the House version's higher funding with the Senate version's broader list of softened restrictions. The prolonged recession has created a feedback loop, they explained, in which demand among the poor for civil legal aid has increased at the same time that private donations are down and returns on lawyer trusts accounts have slowed to a trickle.

Plus, the expanding need has outpaced government funding. Legal Services Corp. received just $6.28 in federal money per person qualifying for free legal services in 2009, according to a July study from the Center for American Progress, a left-leaning think tank. That's the lowest amount in the program's history and roughly half of the inflation-adjusted amount available per person in 1976, the earliest year for which statistics are available.

Legal Services Corp. funds 137 groups nationwide. In 2008, it allocated $43 million to 11 California-based programs.

A Legal Services Corp. report released Sept. 30 detailed the "justice gap" between the demand and availability of legal services for the poor. For every person who seeks help, another will be turned away, meaning nearly one million people won't get the assistance they need, the report concluded.

The Legal Aid Foundation of Los Angeles staff of 60 attorneys was able to serve about 14,000 people last year, said executive director Silvia R. Argueta. "But that's just a drop in the bucket," Argueta continued, "considering we have 2 million people in our service area."

Some providers said that if forced to choose between a larger funding boost and a broader array of eased restrictions, they'd prefer more freedom to represent their clients.

"Even if some dollars have to be given up, I think I can do a lot more if the restrictions are eliminated," said Gregory E. Knoll, executive director of the Legal Aid Society of San Diego.

Congress created the restrictions in 1996, when Newt Gingrich Revolution-era Republicans argued legal nonprofits used the poor as a pretext for pushing a liberal agenda. Those prohibitions - which apply whether the activities are paid for with public or private money - include bans on: lobbying except in limited situations; representing non-citizens except in domestic violence cases; class actions; attorney fees and activities involving welfare reform.

In addition to the restrictions, Congress also slashed Legal Service Corp.'s budget by 32 percent in 1996.

The Senate version would lift all the prohibitions - provided they're not paid for by federal funds - except ones on abortion-related litigation and those representing prisoners.

The restrictions are there to keep Legal Services Corp. "out of the partisan arena" and focused on helping the poor, Rep. Trent Franks, R-Ariz., said at an Oct. 27 House Judiciary subcommittee hearing. Franks cited evidence showing legal nonprofits engaged in "partisan activism" in violated of the existing bans.

"Until LSC has proven over a sustained period of time that its funds are no longer being used for partisan activism, we should not consider rewarding LSC with increased funds and lifted restrictions," he said.

Legal aid providers said the easing of restrictions could help them to raise more money themselves. Opening up the types of advocacy the groups could be involved in would make them a more attractive vehicle for charitable dollars, providers explained.

Allowing nonprofits to keep attorney fees could have an immediate impact on funding. A 2001 report by the California Legal Services Coordinating Committee said legal aid programs took in an average $1.75 million each year in attorney fees before the restrictions were put in place.

But providers emphasized that the primary benefit to expanded freedom would be the ability to be more effective and efficient advocates for their clients.

The threat of attorney fees, for instance, served as leverage and helped resolve disputes. A single class action lawsuit could prompt the sort of systemic change that would make many individual suits unnecessary. Providers also said lifting the onerous protocols for lobbying could have a similarly broad impact.

"We're interested in having the opportunity to bring issues to the attention of elected officials because the issues are being raised by our clients," said Neal S. Dudovitz, executive director of Neighborhood Legal Services Los Angeles. "Sometimes that's much more efficient than going to court."

Even as the recession has driven demand and increased the importance of federal support, the Obama administration and the Democratic-dominated Congress have so far proven generous when it comes to paying for legal aid - at least compared to their predecessors over the past few decades.

In March, Legal Services Corp. received a $40 billion boost as part of omnibus spending bill. That 12 percent increase was the first since 1999 and the largest in 30 years.

Bay Area Legal Aid Executive Director Ramon Arias said: "Whatever Congress decides will be far more supportive of our work and the country's commitment to fundamental fairness than anything we've seen in a real long time."

robert_iafolla@dailyjournal.com