[House Report 104-255]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-255
_______________________________________________________________________
LEGAL AID ACT OF 1995
_______________________________________________________________________
September 21, 1995.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Gekas, from the Committee on the Judiciary, submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 2277]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 2277) to abolish the Legal Services Corporation and
provide the States with money to fund qualified legal services,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Legal Aid Act of 1995''.
SEC. 2. LEGAL SERVICES CORPORATION
The Legal Services Corporation Act (42 U.S.C. 2996-2996l) is amended
to read as follows:
``SECTION 1. SHORT TITLE.
``This Act may be cited as the `Legal Aid Grant Act'.
``SEC. 2. DEFINITIONS.
``For purposes of this Act:
``(1) Qualified legal service provider.--
``(A) In general.--The term `qualified legal
service provider' means--
``(i) any individual who is licensed
to practice law in a State for not less
than 3 calendar years, who has
practiced law in such State not less
than 3 calendar years, and who is so
licensed during the period of a
contract under section 4; or
``(ii) a person who employs or
contracts with an individual described
in clause (i) to provide qualified
legal services.
Nothing in this subparagraph shall be
interpreted to prohibit a qualified legal
service provider from employing an individual
who is not described in clause (i) to assist in
providing qualified legal services.
``(B) Not qualified.--No individual shall be
considered, or employed by, a qualified legal
service provider if such individual during the
10 years preceding the submission of a bid for
a contract under section 4--
``(i) has been convicted of a felony;
or
``(ii) has been suspended or
disbarred from the practice of law for
misconduct, incompetence, or neglect of
a client in any State; or
if such individual has a criminal charge
pending on the date of the submission of a bid
for a contract under section 4. In determining
whether to award a contract under section 4, a
State may also consider, to the extent the
State considers it relevant in evaluating the
qualifications of an applicant, whether an
applicant has been found in contempt of a court
of competent jurisdiction in any State or
Federal court or has been sanctioned under
Federal Rule of Civil Procedure 11 or an
equivalent State rule of procedure applicable
in civil actions.
``(C) Additional requirements.--No State may
impose a requirement on an individual or person
as a condition to bidding on a contract under
section 4 or to being awarded such a contract
which requirement is different from any other
requirement of subparagraph (B).
``(2) Qualified legal services.--The term `qualified
legal services' means--
``(A) mediation, negotiation, arbitration,
counseling, advice, instruction, referral, or
representation, and
``(B) legal research or drafting in support
of the services described in subparagraph (A),
provided by or under the supervision of a qualified
legal service provider to a qualified client for a
qualified cause of action.
``(3) Qualified client.--The term `qualified client'
means any individual who is a United States citizen or
an alien admitted for permanent residence who in the 3
months prior to seeking legal assistance from a
qualified legal service provider had an income from any
source which was equal to or less than the poverty line
established under section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)).
``(4) Qualified cause of action.--
``(A) The term `qualified cause of action'
means only a civil cause of action which
results only from--
``(i) landlord and tenant disputes,
including an eviction from housing
except an eviction where the prima
facie case for the eviction is based on
criminal conduct;
``(ii) foreclosure of a debt on a
qualified client's residence;
``(iii) the filing of a petition
under chapter 7 or 12 of title 11,
United States Code, or under chapter 13
of such title unless a petition of
eviction has preceded the filing of
such petition;
``(iv) enforcement of a debt;
``(v) an application for a statutory
benefit;
``(vi) appeal of a denial of a
statutory benefit on a statutory
ground;
``(vii) child custody and support;
``(viii) action to quiet title;
``(ix) activities involving spousal
or child abuse on behalf of the abused
party;
``(x) an insurance claim;
``(xi) competency hearing;
``(xii) probate;
``(xiii) divorce or separation;
``(xiv) employment matters; or
``(xv) consumer fraud.
Additional causes of action qualify as a
qualified cause of action if they arise out of
the same transaction as a cause of action
described in this subparagraph unless such
additional causes of action are described in
clause (i) of subparagraph (B).
``(B) Such term does not include--
``(i) a class action under Federal,
State, or local law; or
``(ii) any challenge to the
constitutionality of any statute.
``(5) State.--The term `State' means any State of the
United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Trust Territory of the Pacific
Islands, and any other territory or possession of the
United States and includes any recognized governing
body of an Indian Tribe or Alaskan Native Village that
carries out substantial governmental powers and duties.
``SEC. 3. GRANTS.
``(a) Grant Authority.--The Attorney General shall direct the
Office of Justice Programs to make grants to States for the
provision of qualified legal services and to insure compliance
with the requirements of this Act. To receive a grant under
this subsection a State shall make an application to the
Attorney General. Such an application shall be in such form and
submitted in such manner as the Attorney General may require.
``(b) Poverty Line.--Grants shall be made under subsection
(a) to States in such proportion as the number of residents of
each State which receive a grant who live in households having
income equal to or less than the poverty line established under
section 673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)) bears to the total number of residents in the
United States living in such households.
``(c) Retention of Grant Funds.--Each State may in any fiscal
year retain for administrative costs not more than 5 percent of
the amount granted to the State under subsection (a) in such
fiscal year. The remainder of such grant shall be paid under
contracts to qualified legal service providers in the State for
the provision in the State of qualified legal services. If a
State which has received a grant under subsection (a) has at
the end of any fiscal year funds which have not been obligated,
such State shall return such funds to the Attorney General.
``(d) Requirements of This Act.--No State may receive a grant
under subsection (a) unless the State has certified to the
Attorney General that the State will comply with and enforce
the requirements of this Act.
``(e) Limitation on Use of Grant Funds.--None of the funds
provided under subsection (a) shall be used by a qualified
legal service provider--
``(1) to make available any funds, personnel, or
equipment for use in advocating or opposing any plan or
proposal or represent any party or participate in any
other way in litigation, that is intended to or has the
effect of altering, revising, or reapportioning a
legislative, judicial, or elective district at any
level of government, including influencing the timing
or manner of the taking of a census;
``(2) to attempt to influence the issuance,
amendment, or revocation of any executive order,
regulation, policy, or similar promulgation by any
Federal, State, or local agency;
``(3) to attempt to influence the passage or defeat
of any legislation, constitutional amendment,
referendum, initiative, confirmation proceeding, or any
similar procedure of the Congress of the United States
or by any State or local legislative body;
``(4) to support or conduct training programs for the
purpose of advocating particular public policies or
encouraging political activities, labor or anti-labor
activities, boycotts, picketing, strikes, and
demonstrations, including the dissemination of
information about such policies or activities;
``(5) to participate in any litigation, lobbying,
rulemaking or any other matter with respect to
abortion;
``(6) to participate in any litigation or provide any
representation on behalf of a local, State, or Federal
prisoner;
``(7) to pay for any personal service, advertisement,
telegram, telephone communication, letter, or printed
or written matter or to pay administrative expenses or
related expenses, associated with an activity
prohibited in paragraph (1), (2), (3), (4), (5), or
(6);
``(8) to solicit in-person any client for the purpose
of providing any legal service; or
``(9) to pay any voluntary membership dues to any
private or non-profit organization.
``(f) Limitation on Use of State Funds.--A State which
receives a grant under subsection (a) and which also
distributes State funds for the provision of legal services
shall require that such State funds be used to provide
qualified legal services to qualified clients and shall impose
on the use of such State funds the limitations prescribed by
subsection (e).
``(g) Attorneys' Fees.--A qualified legal service provider of
any qualified client or any client of such provider may not
claim or collect attorneys' fees from parties to any litigation
initiated by such client.
``(h) Evasion.--Any attempt to avoid or otherwise evade the
requirements of this Act is prohibited.
``(i) Authorization of Appropriations.--For grants under
subsection (a) there are authorized to be appropriated to the
Attorney General $278,000,000 for fiscal year 1996,
$250,000,000 for fiscal year 1997, 175,000,000 for fiscal year
1998, and $100,000,000 for fiscal year 1999.
``SEC. 4. CONTRACTS.
``(a) In General.--Each State which receives a grant under
section 3(a) shall make funds under the grant available for
contracts entered into for the provision of qualified legal
services within the State.
``(b) Bids.--
``(1) Authority.--The Governor of each State shall
designate the authority of the State which shall be
responsible for soliciting and awarding bids for
contracts for the provision of qualified legal services
within such State.
``(2) Service area.--The authority of a State
designated under paragraph (1) shall designate service
areas within the State. Such service areas shall be the
counties or parishes within a State but such authority
may combine contiguous counties or parishes to form a
service area to assure the adequate provision of
qualified legal services.
``(3) Non-english-speaking clients.--If 5 percent or
more of the population of qualified clients in a
qualified legal service provider's service area
includes individuals whose household language is other
than English, the qualified legal service provider
shall include provision in the provider's bid for
satisfying the communication needs of that portion of
such population.
``(c) Availability of Funds.--A State shall allocate grant
funds for contracts for the provision of qualified legal
services in a service area on the same basis as grants are made
available to States under section 3(b).
``(d) Contract Awards.--A State shall award a contract for
the provision of qualified legal services in a service area to
the applicant who is best qualified, as determined by the
State, and who in its bid offers to provide, in accordance with
section 5, the greatest number of hours of qualified legal
services provided by lawyers or paralegals in such area. In
determining which applicant is best qualified, a State shall
consider the reputations of the principals of the applicant,
the quality, feasibility, and cost effectiveness of plans
submitted by the applicant for the delivery of qualified legal
services to the qualified clients to be served, and a
demonstration of willingness to abide by the restrictions of
this Act.
``(e) Form and Billing.--A State contract awarded under
subsection (d) shall be in such form as the State requires. The
contract shall provide for the rendering of bills supported by
time records at the close of each month in which qualified
legal services are provided. A State shall make payment to a
qualified legal service provider at the contract rate only for
hours of qualified legal services provided and supported by
appropriate records. The contract rate shall be the total
dollar amount of the contract divided by the total hours bid by
the qualified legal service provider. A State shall have 60
days to make full payment of such bills.
``SEC. 5. REQUIREMENTS FOR THE PROVISION OF QUALIFIED LEGAL SERVICES
UNDER A CONTRACT.
``(a) Term.--The term of a contract entered into under
section 4 shall be not more than 1 year.
``(b) Manner of Provision of Services.--A qualified legal
service provider shall service the legal needs of qualified
clients under a contract entered into under section 4 in a
professional manner consistent with applicable law.
``(c) Case Files.--A qualified legal service provider shall
maintain a qualified client's case file, including any
pleadings and research, at least until the later of 5 years
after the resolution of client's cause of action or 5 years
after the termination of the contract under which services were
provided to such client or as provided by the applicable code
of professional responsibility.
``(d) Time Records.--A qualified legal service provider shall
keep daily time records of the provision of services to a
qualified client in one tenth of an hour increments identifying
such client, the general nature of the work performed in each
increment, and the account which will be charged for such work.
``(e) Questionnaire.--Each qualified client shall be provided
a self-mailing customer satisfaction questionnaire in a form
approved by the authority granting the contract under section 4
which identifies the qualified legal service provider and is
preaddressed to such authority.
``(f) Attorney Client Privilege.--Any qualified client who
receives legal services other than advice or legal services
provided by mail or telephone shall execute with respect to
such services a waiver of attorney client and attorney work
product privilege as a condition to receiving such service. The
waiver shall be limited to the extent necessary to determine
the quantity and quality of the service rendered by the
qualified legal service provider and compliance with this Act.
Such waiver shall not constitute a waiver as to other parties.
The use of such waiver or any information obtained under such
waiver for any purpose other than determining the quantity and
quality of the service of a provider or compliance with this
Act shall be strictly prohibited.
``(g) Records of Qualifications.--A qualified legal service
provider shall make and maintain records detailing the basis
upon which the provider determined the qualifications of
qualified clients. Such records shall be made and maintained
for 3 years following the termination of a contract under
section 4 for the provision of legal services to such clients.
``(h) Audits.--A qualified legal service provider shall
consent to audits by the Attorney General, the General
Accounting Office, or the authority which awarded a contract to
such provider. Any such audit may be conducted at the
provider's principal place of business. Such an audit shall be
limited to a determination of whether such provider is meeting
the requirements of this Act and the provider's contract under
section 4.
``(i) Recovery of Fees.--A contract shall provide for the
recovery of reasonable attorneys' fees in any successful action
brought to compel payment to a qualified legal service provider
under a contract under section 4.
``(j) Termination and Recovery of Funds.--The Attorney
General, the Governor, or the authority which awarded a
contract shall terminate a qualified legal service provider who
is found to have a committed a material violation of this Act.
A material violation shall include involvement with any
prohibited activity. A breach of contract by a qualified legal
service provider shall entitle the Governor or the authority to
terminate the contract, to award a new contract, and to recover
any funds improperly expended by the provider, together with
interest at the statutory rate in the State for interest on
judgments. If such a breach was willful, the provider shall pay
to the authority which awarded the contract an additional
amount equal to one half of the amount improperly expended by
the provider.''.
SEC. 3. TRANSITION AND EFFECTIVE DATE.
(a) Termination.--The Legal Services Corporation shall
terminate on the expiration of 6 months after the date of the
enactment of this Act.
(b) Pending Cases.--During the 6-month period after the
termination of the Legal Services Corporation, the Attorney
General may make funds available to grantees under the Legal
Services Corporation Act to bring to a completion any legal
action filed in a State or Federal court on or before the date
of the enactment of this Act. The Attorney General shall use
funds appropriated to the Attorney General under section 3(i)
of the Legal Aid Grant Act to fund such grantees. Such funds
for such purpose may not exceed 1 percent of the amount
appropriated to the Attorney General under such section 3(i)
for fiscal year 1996.
(c) Transition.--Upon termination of such Corporation all
assets, liabilities, obligations, property, and records
employed directly or held or used primarily in connection with
any function of the President of the Legal Services Corporation
in carrying out legal services activities under the Legal
Services Corporation Act shall be transferred to the Attorney
General.
(d) Action of the President.--Notwithstanding any other
provision of law, upon termination of the Legal Services
Corporation the President of the Legal Services Corporation
shall take such action as may be necessary--
(1) to assist the Attorney General in the initial
undertaking of the Attorney General's responsibilities
under the Legal Aid Grant Act; and
(2) to transfer to the Attorney General for use under
the Legal Aid Grant Act all unexpended balances of
funds appropriated for the purpose of carrying out
legal services programs and activities under the Legal
Services Corporation Act.
(e) Effective Date.--The amendment made by section 2 shall
take effect on the date of the enactment of this Act.
Summary and Purpose
The ``Legal Aid Act of 1995'' (H.R. 2277) improves the
delivery and accountability of legal services to the poor by
establishing a new system which involves the states in the
selection and oversight of individual providers.
The bill approved by the Committee on the Judiciary
abolishes the Washington, D.C. based Legal Services Corporation
in order to ensure that federal money authorized for the
provision of legal services will be more directly applied to
the legal needs of the poor. Under this Act, the Department of
Justice will oversee the administration of grant money to the
states; and the respective governors are charged with the
responsibility of selecting local providers through a
competitive bid process.
Due to the controversial history of the Legal Services
Corporation Act, the Committee feels it necessary to imbue this
new system with controls adequate to guarantee that the needs
of the poor are truly met. The bill defines who is a qualified
provider and an eligible client, and what constitutes a
qualified cause of action that a provider may initiate. H.R.
2277 also restricts providers from engaging in conduct that
would otherwise derogate from the goal of serving the poor.\1\
\1\ The restrictions in H.R. 2277 are contained in Section 3(e) and
are based upon those in H.R. 1806 and commonly referred to as the
McCollum/Stenholm restrictions. However, similar restrictions have
consistently been imposed by the Congress as provisions contained in
appropriations legislation, and have also been proposed in legislation
to reauthorize the Legal Services Corporation (H.R. 2644 [Bryant] 103rd
Cong., and H.R. 2039 [Frank] 102nd Cong.). While, in general, these
restrictions have been conceded as necessary by all sides in order to
prevent grantees from engaging in inappropriate activities, debate has
occurred on their specifics. See, Dissenting Views of Mr. McCollum, et
al. to the report accompanying H.R. 2039, H.R. Rep. No. 102-476, 103rd
Cong., 2nd Sess. (1992).
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The bill allows the Legal Services Corporation to continue
only for a brief transitional period and requires upon its
termination the transfer of its assets, liabilities,
obligations, property, and records to the Attorney General. The
Committee authorizes the Act for four years at $278 million for
FY 1996, $250 million for FY 1997, $175 million for FY 1998 and
$100 million for FY 1999. The Committee's intent is to scale
down the federal commitment to legal services in order to
prepare the States to assume responsibility for providing legal
aid in cooperation with the Bar and the private sector.
Background and Need for the Legislation
The Legal Services Corporation (LSC) is a private, not-for-
profit, entity incorporated in the District of Columbia,
designed to provide legal assistance to the poor in non-
criminal proceedings. The Corporation itself does not provide
this assistance, but merely forwards the money appropriated to
it by Congress to individual grantees throughout the
country.\2\
\2\ The Corporation provides grants to basic field programs, state
and national support centers and a variety of other recipients such as
Native American and Migrant programs.
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The Corporation's roots are in President Lyndon Johnson's
War on Poverty. Originally established as the Office of Legal
Services within the Office of Economic Opportunity, it was
transformed into an independent corporation in 1974 by Public
Law 93-355 (42 U.S.C. 2996 et seq). The LSC is governed by an
eleven person board of directors appointed by the President
with the advice and consent of the Senate. The LSC has been
extremely controversial since its inception and despite several
Congressional attempts, has not been reauthorized since 1980.
Although its survival now depends solely upon the
appropriations process, the Corporations budget has more than
quintupled since its inception, from $72 million in 1975 to
$400 million in 1995.\3\
\3\ The Corporation requested $500 million for Fiscal Year 1995.
Congress appropriated $415 and later rescinded $15 million. The
Corporation's FY 1996 request was for $440 million.
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Controversy has beset virtually every aspect of the LSC
throughout its history. Despite a clear statutory requirement
that all LSC board members be confirmed by the Senate, the
program has become so politicized that the Senate confirmed
only one board between 1982 and 1993.\4\ Throughout the past
fifteen years, the LSC has been a continuing saga of partisan
wrangling pitting an increasingly remote and isolated national
board against far-flung and intractable grantees. As more and
more grantee abuses came to light, the Congress became more
active in attempting to supervise the entire system--only to
find that the national board was poorly suited to respond to
Congressional mandates. Having established a comfortable
relationship with their funding source, the current grantees
have enjoyed presumptive refunding, and, among other things,
have successfully thwarted Congressional attempts to invigorate
the system by instituting competition. When the LSC has tried
to enforce congressionally imposed restrictions, it has been
stymied by resistance from the very grantees it funds.\5\
\4\ During this period, the board generally consisted of recess
appointees who, due to lack of Senate confirmation, were without full
authority to oversee the Corporation.
\5\ Terrance Wear, LSC's President from 1988 to 1990, has testified
about his attempt to lower grant amounts to recipients who had
disregarded Congressional prohibitions against engaging in abortion
related litigation. He was sued by the errant grantees themselves, who
utilized federal grant money earmarked for the poor to bring suit on
their behalf. That litigation, which persisted for over three years,
was eventually settled in support of the President's actions.
Unfortunately, the court's ruling was moot since Congressional
prohibitions like the one on abortion-related litigation have only been
mandated through Appropriations bills which are only in effect for one
year.
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Grantee abuses were detailed during the hearings of the
Subcommittee on Commercial and Administrative Law and depict a
program in need of considerable supervision. The expenditure of
resources on class actions \6\ and constitutional challenges
has meant that many poor have been left unattended because
their needs, however urgent, were too prosaic. It is generally
acknowledged that LSC programs provide assistance to less than
20 percent of the poor in this country. That figure becomes
even more distressing when it is coupled with the fact that LSC
money and manpower is liberally expended helping illegal
aliens, prisoners, and those who public housing authorities and
tenant associations have sought to evict for illegal drug
activities.\7\
\6\ Considerably alarming is the frequent use of class actions, a
time-consuming and labor intensive form of litigation which the
Committee has learned displaces resources that could be brought to bear
on the immediate needs of individual poor people. In 1989 alone, for
instance, the Corporation's records indicate that its grantees were
involved in 1,759 class actions.
\7\ Jodie Stearns, a farmer and attorney from Ohio, testified
concerning inordinate expenditure of resources by a Legal Services
grantee. She cited numerous examples, including: routine assignment of
three or four attorneys to pretrial conferences; use of two or three
lawyers, as well as a paralegal, for a simple deposition; flying three
persons to Miami, Florida for depositions lasting three days; and
staffing uncomplicated hearings with multiple attorneys. She also
testified that Legal Services attorneys regularly represent illegal
aliens under the Migrant Seasonal Agricultural Worker Protection Act
and various other federal statutes. Hearing on Reauthorization of the
Legal Services Corporation before the Subcommittee on Commercial and
Administrative Law of the House Committee on the Judiciary, June 15,
1995, 104th Cong., 1st Sess. (1995).
John Hiscox, of the Macon (Georgia) Public Housing Authority,
testified that one tenant, after purchasing drugs within public housing
premises, was arrested by police beyond its perimeter. Although he pled
guilty to the drug offense, Legal Services attorneys represented him to
prevent his eviction based on the argument that his arrest had occurred
off public housing premises. As a result of involvement of Legal
Services attorneys, Mr. Hiscox indicated that the annual cost of
evictions had increased from $9,000 in 1987 to $90,000 in 1990. Id.
Harriet Henson, executive Director of Northside Tenants
Reorganization in Pittsburgh, Pennsylvania testified that while
visiting a tenant she witnessed the tenant's boyfriend engaging in a
drug transaction on the premises. Because of Neighborhood Legal
Services involvement in the matter, eviction of the tenant require two
years of effort. Id.
Ken Boehm, former Director of Policy, Development and
Communications for the Legal Services Corporation, referenced a class
action suit brought by a Legal Services grantee. In the suit, which
consumed more than four years, the Legal Services grantee represented
prisoners who asserted that HIV positive patients should not be treated
in a segregated medical ward, nor their infection revealed to the
prison population. Id.
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Considering the controversy engendered by LSC, reference to
the Community Services Block Grant program is instructive,
since both it and the Legal Services Corporation have common
ancestry in the War on Poverty. One of the most significant
programs authorized by the Economic Opportunity Act of 1964 was
Community Action, sometimes referred to as Local Initiative or
Section 221 of the Act. Under the auspices of the Office of
Economic Opportunity (OEO), a network of approximately 900
local Community Action Agencies (CAA) were developed.
Similarly, as noted earlier, the LSC began as the Office of
Legal Services within the OEO.
At approximately the same time that the Legal Services
Corporation was established as an independent entity, the OEO
was renamed the Community Services Administration with the
responsibility for ultimately administering not only the
network of CAA's but also some 40 Community Development
Corporations and a number of small categorical grant programs.
In 1981, the Congress abolished the Community Services
Administration and created the Community Services Block Grant
program to be administered by an office within the Department
of Health and Human Services.\8\ Today, fourteen years after
the block granting of CSA, a history of incessant political
rancor and ineffective administration within the Legal Services
Corporation suggests the wisdom of adopting a similar approach
for it.
\8\ Like many of the domestic policy changes that year, the
Community Services Block Grant legislation was incorporated into the
Omnibus Budget Reconciliation Act of 1981 (Pub. L. No. 97-35) (1981),
of which it is technically title VI, Subtitle B.
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The need for this legislation is clear. The Legal Services
Corporation has been unauthorized since 1980, nearly fifteen
years. Even if the Committee were not to suggest such an
innovative course as that contained in H.R. 2277, it would be
an abdication of its oversight responsibility to ignore reality
and prolong this continuing neglect. The current state of the
LSC makes this legislation all the more necessary if legal
services to the poor are to become, in any respect, effective.
The concept of block granting legal services to the states
is designed to focus the effort closer to the needs of the poor
in several ways. First, it will facilitate a more specific
identification of those needs because the authority that
oversees the providers will be located within their respective
states, an advantage of propinquity that no Washington entity
could enjoy. Secondly, it will permit not only closer scrutiny
of providers but also foster a better working relationship with
them. During the past fifteen years, LSC's grantees and the
Washington corporation have viewed each other with distrust
which has often developed into, blatant hostility. It is
envisioned that block granting this program will encourage the
kind of cooperation from the local Bar and private sector that
can only develop through concerns that are shared in an
immediate and more local environment. The legislation's
emphasis on local involvement is essential to its purpose; and
is supported by recent trends in Congress which suggest that
local governments will inevitably have to shoulder more, if not
all, of the burden of providing an array of services to their
poor residents.\9\
\9\ Attorney witnesses before the subcommittee recognized the pro
bono responsibility of the bar. However, debate on how best to
encourage pro bono activities is warranted not only on the question of
whether a too active role of government in providing legal services
discourages such involvement, but also on the extent to which legal
barriers exist that discourage volunteerism. See, Michael A. Bedke and
Scott Jay Feder, ``Good Samaritan Legislation,'' Barrister magazine,
Spring 1995, which discusses the experience of the American Bar
Association's Young Lawyers Division volunteer efforts on behalf of
disaster victims.
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Although hearings conducted this summer by the Subcommittee
on Commercial and Administrative Law identified numerous areas
of abuse within the current system, Congress has been aware of
problems with the Corporation for many years. Current
appropriations riders restricting the activities of the
Corporation or its grantees were developed in response to
specific and widely held concerns; and many have been in
effect, albeit unenforced since 1984.
Given this history, the Committee feels that the
limitations in H.R. 2277 on the activities of providers, as
well as those placed on the states, are clearly justified by
the principle that what is past is prologue. The Committee
intends to address the real and immediate needs of the poor and
to discourage litigation which serves little purpose other than
to pursue the ideological vindications of a particular
political philosophy.
Hearings
The Subcommittee on Commercial and Administrative Law held
three days of hearings concerning the reauthorization of the
Legal Services Corporation. The hearings were held on May 16,
1995; June 15, 1995; and July 27, 1995.
The first hearing, convened on May 16, 1995, focused
primarily on the Corporation and the current statute, and heard
only from supporters of the current Corporation. Testimony was
received from the following: Rep. Bill McCollum (R-FL); Rep.
Charles W. Stenholm (D-TX); Rep. Paul McHale (D-PA); Rep. Ron
Wyden (D-OR); Rep. Benjamin L. Cardin (D-MD); Abner J. Mikva,
Counsel to the President, The White House; Jamie Gorelick,
Deputy Attorney General, U.S. Department of Justice; John
Carey, General Counsel, Federal Emergency Management Agency;
Alexander D. Forger, President, Legal Services Corporation;
Douglas F. Eakely, Chairman of the Board, Legal Services
Corporation; Thomas F. Smegal, Jr., Member of the Board, Legal
Services Corporation; and Ernestine P. Watlington, Member of
the Board, Legal Services Corporation.
The second day of the hearings, conducted on June 15, 1995,
focused on testimony from long-time critics of the Legal
Services Corporation as well as one supportive witness, John
McKay, Chairman of the Equal Justice Coalition. Testimony
critical of the current Corporation and statute included
statement from the following: Rep. Charles Taylor (R-NC); David
Keene, American Conservative Union; Howard Phillips, Chairman,
Conservative Caucus; Ken Boehm, Chairman, National Legal and
Policy Center; Harry Bell, President, South Carolina Farm
Bureau on behalf of the American Farm Bureau; Judy Mauch, Mauch
Farms; Jodie Stearns, Esq., Mitchell, Stearns & Hammer; Stan
Eury, North Carolina Grower's Association; Dan Gerawan, Gerawan
Ranches; John McKay, Chairman, Equal Justice Coalition; Libby
Whittley, Farm Business Coalition; John Hiscox, Director, Macon
Housing Authority; Harriet Henson, Northside Tenants
Reorganization; Zelma Boggess, Director, Charleston Housing
Authority; and Michael Pileggi, Esq., Philadelphia Housing
Authority.
The final hearing, held on July 27, 1995, focused on
solutions to current problems facing the Legal Services
Corporation and inadequacies of the current statute. With an
eye toward drafting legislation, the subcommittee heard from
the following: Rep. Howard L. Berman (D-CA); Rep. Robert K.
Dornan (R-CA); Alan D. Bersin, U.S. Attorney for the Southern
District of California on behalf of the Department of Justice;
Thomas J. Madden, Esq., Former General Counsel, Law Enforcement
Assistance Administration, Department of Justice; Rev. Fred
Kammer, S.J., President, Catholic Charities, U.S.A.; Robert E.
Adams, Executive Director, Legal Services of the Fourth
Judicial District, South Carolina; Jack Martin, Vice President,
the Ford Motor Company; Neal I. Hogan, General Counsel, Dublin
Castle Group; Edouard R. Quatrevaux, Inspector General, Legal
Services Corporation; Penny Pullen, Former Board Member of the
Legal Services Corporation; Hon. Howard H. Dana, Former Board
Member of the Legal Services Corporation; Terrance Wear, Former
President of the Legal Services Corporation; and Mike Wallace,
Former Chairman of the Legal Services Corporation.
Additional material was submitted by a number of
individuals and organizations.
Committee Consideration
On September 13, 1995, the Committee met in open session
and ordered reported the bill H.R. 2277, with amendments, by a
vote of 18-13, a quorum being present.
Vote of the Committee
Eight amendments were adopted by voice vote. These were:
(1) an amendment by Mr. Bono to specifically include divorce or
separation among the qualified causes of action under the Act;
(2) an amendment by Mr. Watt to prohibit the use of any
information gained pursuant to a waiver of the attorney/client
privilege for any purpose other than determining the quantity
or quality of the service of a provider or compliance with the
Act; (3) an amendment by Mr. Hyde to include consumer fraud
among the qualified causes of action under the Act; (4) an
amendment by Mr. Watt to provide that states, in determining
whether to award a legal services contract, may consider
whether the applicant has been found in contempt of court or
has been sanctioned under Rule 11 of the Federal Rules of Civil
Procedure, rather than these being a bar to such an award; (5)
an amendment by Mr. Reed reformulating the definition of a
qualified client; (6) of en bloc amendment by Mr. McCollum: (a)
directing the Office of Justice Programs within the Department
of Justice to administer the program under the Act; (b)
prohibiting any attempt to evade provisions of the Act; (c)
permitting states to consider the number of hours of service to
be performed by paralegals as well as those to be performed by
lawyers in awarding contracts; and (d) requiring providers to
maintain case files for five years after termination of the
contract or resolution of the cause of action, whichever is
longer, or as provided by the applicable code of professional
responsibility; (7) an amendment offered by Mr. McCollum
directing states to consider several additional factors in
determining to whom to award a legal services contract; (8) an
amendment by Mr. Barr relating to the definition of qualified
causes of action with respect to its inclusion of additional
causes of action.
There were ten recorded votes (nine on amendments and one
on final passage) during the Committee's consideration of H.R.
2277, as follows:
1. An amendment in the nature of a substitute by Mr.
McCollum. Defeated 27 to 17.
YEAS NAYS
Mr. McCollum Mr. Hyde
Mr. Schiff Mr. Sensenbrenner
Mr. Conyers Mr. Gekas
Mrs. Schroeder Mr. Coble
Mr. Frank Mr. Smith (TX)
Mr. Schumer Mr. Gallegly
Mr. Berman Mr. Canady
Mr. Boucher Mr. Inglis
Mr. Bryant (TX) Mr. Goodlatte
Mr. Reed Mr. Buyer
Mr. Nadler Mr. Hoke
Mr. Scott Mr. Bono
Mr. Watt Mr. Heineman
Mr. Becerra Mr. Bryant (TN)
Mr. Serrano Mr. Chabot
Ms. Lofgren Mr. Flanagan
Ms. Jackson-Lee Mr. Barr
2. A motion by Mr. Sensenbrenner to reconsider the vote by
which the McCollum amendment in the nature of a substitute was
not agreed to. Defeated 17 to 18.
YEAS NAYS
Mr. McCollum Mr. Hyde
Mr. Schiff Mr. Moorhead
Mr. Conyers Mr. Sensenbrenner
Mrs. Schroeder Mr. Gekas
Mr. Frank Mr. Coble
Mr. Schumer Mr. Smith (TX)
Mr. Berman Mr. Gallegly
Mr. Boucher Mr. Canady
Mr. Bryant (TX) Mr. Inglis
Mr. Reed Mr. Goodlatte
Mr. Nadler Mr. Buyer
Mr. Scott Mr. Hoke
Mr. Watt Mr. Bono
Mr. Becerra Mr. Heineman
Mr. Serrano Mr. Bryant (TN)
Ms. Lofgren Mr. Chabot
Ms. Jackson-Lee Mr. Flanagan
Mr. Barr
3. An amendment offered by Mr. Scott to provide that
contracts be awarded to the best qualified applicant as
determined by the State. Defeated 10 to 17.
YEAS NAYS
Mr. Flanagan Mr. Hyde
Mr. Conyers Mr. Moorhead
Mr. Berman Mr. Gekas
Mr. Boucher Mr. Coble
Mr. Reed Mr. Smith (TX)
Mr. Scott Mr. Schiff
Mr. Watt Mr. Gallegly
Mr. Serrano Mr. Canady
Ms. Lofgren Mr. Inglis
Ms. Jackson-Lee Mr. Goodlatte
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant (TN)
Mr. Chabot
Mr. Barr
4. An amendment offered by Mr. Watt to provide for
continued legal services after the one-year contract term
expired. Defeated 9 to 19.
YEAS NAYS
Mr. Berman Mr. Hyde
Mr. Boucher Mr. Moorhead
Mr. Reed Mr. Sensenbrenner
Mr. Nadler Mr. McCollum
Mr. Scott Mr. Gekas
Mr. Watt Mr. Coble
Mr. Serrano Mr. Smith (TX)
Ms. Lofgren Mr. Schiff
Ms. Jackson-Lee Mr. Gallegly
Mr. Canady
Mr. Inglis
Mr. Goodlatte
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant (TN)
Mr. Chabot
Mr. Flanagan
Mr. Barr
5. An amendment offered by Mr. Berman to add ``employment
matters'' to qualified causes of action. Adopted 15 to 11.
YEAS NAYS
Mr. McCollum Mr. Hyde
Mr. Canady Mr. Moorhead
Mr. Goodlatte Mr. Sensenbrenner
Mr. Hoke Mr. Gekas
Mr. Flanagan Mr. Smith (TX)
Mr. Conyers Mr. Gallegly
Mr. Berman Mr. Inglis
Mr. Boucher Mr. Bono
Mr. Reed Mr. Heineman
Mr. Nadler Mr. Chabot
Mr. Scott Mr. Barr
Mr. Watt
Mr. Serrano
Ms. Lofgren
Ms. Jackson-Lee
6. An amendment offered by Mr. Nadler making class action
suits a qualified cause of action. Defeated 9 to 16.
YEAS NAYS
Mr. Conyers Mr. Hyde
Mr. Boucher Mr. Moorhead
Mr. Reed Mr. Sensenbrenner
Mr. Nadler Mr. Gekas
Mr. Scott Mr. Coble
Mr. Watt Mr. Schiff
Mr. Serrano Mr. Canady
Ms. Lofgren Mr. Inglis
Ms. Jackson-Lee Mr. Goodlatte
Mr. Hoke
Mr. Bono
Mr. Heineman
Mr. Bryant (TN)
Mr. Chabot
Mr. Flanagan
Mr. Barr
7. An amendment offered by Mr. Flanagan to increase the
authorization for FY 1997 from $141,000,000 to $250,000,000.
Adopted 14 to 13.
YEAS NAYS
Mr. McCollum Mr. Hyde
Mr. Schiff Mr. Moorhead
Mr. Goodlatte Mr. Sensenbrenner
Mr. Hoke Mr. Gekas
Mr. Flanagan Mr. Coble
Mr. Conyers Mr. Gallegly
Mr. Reed Mr. Canady
Mr. Nadler Mr. Inglis
Mr. Scott Mr. Bono
Mr. Watt Mr. Heineman
Mr. Becerra Mr. Bryant (TN)
Mr. Serrano Mr. Chabot
Ms. Lofgren Mr. Barr
Ms. Jackson-Lee
8. An amendment offered by Mr. Watt to allow legal service
providers to collect attorneys' fees from parties to
litigation. Defeated 14 to 16.
YEAS NAYS
Mr. Goodlatte Mr. Hyde
Mr. Flanagan Mr. Moorhead
Mr. Conyers Mr. Sensenbrenner
Mrs. Schroeder Mr. McCollum
Mr. Berman Mr. Gekas
Mr. Boucher Mr. Coble
Mr. Bryant (TX) Mr. Schiff
Mr. Reed Mr. Canady
Mr. Nadler Mr. Inglis
Mr. Scott Mr. Buyer
Mr. Watt Mr. Hoke
Mr. Becerra Mr. Bono
Mr. Serrano Mr. Heineman
Ms. Lofgren Mr. Bryant (TN)
Mr. Chabot
Mr. Barr
9. An amendment offered by Mr. McCollum to extend the
bill's authorization by two years (1998-1999). Adopted 18 to
13.
YEAS NAYS
Mr. Moorhead Mr. Hyde
Mr. McCollum Mr. Sensenbrenner
Mr. Schiff Mr. Gekas
Mr. Canady Mr. Coble
Mr. Goodlatte Mr. Smith (TX)
Mr. Flanagan Mr. Gallegly
Mr. Conyers Mr. Inglis
Mrs. Schroeder Mr. Buyer
Mr. Schumer Mr. Hoke
Mr. Bryant (TX) Mr. Bono
Mr. Reed Mr. Heineman
Mr. Nadler Mr. Bryant (TN)
Mr. Scott Mr. Chabot
Mr. Watt
Mr. Becerra
Mr. Serrano
Ms. Lofgren
Ms. Jackson-Lee
10. Vote on final passage on H.R. 2277. Adopted 18 to 13.
YEAS NAYS
Mr. Hyde Mr. Conyers
Mr. Sensenbrenner Mr. Schumer
Mr. McCollum Mr. Berman
Mr. Gekas Mr. Boucher
Mr. Coble Mr. Bryant (TX)
Mr. Smith (TX) Mr. Reed
Mr. Schiff Mr. Nadler
Mr. Gallegly Mr. Scott
Mr. Canady Mr. Watt
Mr. Inglis Mr. Becerra
Mr. Goodlatte Mr. Serrano
Mr. Buyer Ms. Lofgren
Mr. Hoke Ms. Jackson-Lee
Mr. Bono
Mr. Bryant (TN)
Mr. Chabot
Mr. Flanagan
Mr. Barr
* Mr. Heineman indicated that if present he would have
voted Yea.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(1) or rule X of the
Rules of the House of Representatives are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(l)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(l)(3)(B) of House rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 2(l)(C)(3) or rule XI of Rules of
the House of Representatives, the Committee sets forth, with
respect to H.R. 2277, the following estimate and comparison
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 19, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2277, the Legal
Aid Act of 1995.
Enactment of H.R. 2277 would affect direct spending.
Therefore, pay-as-you-go procedures would apply to the bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Enclosure.
congressional budget office cost estimate
1. Bill number: H.R. 2277.
2. Bill title: Legal Aid Act of 1995.
3. Bill status: As ordered reported by the House Committee
on the Judiciary on September 13, 1995.
4. Bill purpose: H.R. 2277 would abolish the Legal Services
Corporation (LSC) and replace it with block grants provided
directly to the states to fund local legal aid programs. The
bill would authorize appropriations to the Attorney General of
$278 million for fiscal year 1996, $250 million for fiscal year
1997, $175 million for fiscal year 1998, and $100 million for
fiscal year 1999. The bill also would establish eligibility
criteria for receiving legal services and the type of cases for
which legal aid would be available.
5. Estimated cost to the Federal Government: For purposes
of this estimate, CBO assumes that the amounts authorized by
the bill would be appropriated for each fiscal year and that
outlays would reflect the historical spending patterns of
similar grant programs. CBO also estimates that it would cost
the federal government about $3 million in direct spending in
fiscal year 1996 to terminate the LSC. This cost would cover
severance pay and other administrative costs for eliminating
the Corporation. Finally, CBO estimates that the Department of
Justice could incur additional expenses for administering this
new grant program; however, we do not expect that any
additional costs would be significant. The following table
summarizes the estimated budgetary impact of H.R. 2277.
------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
------------------------------------------------------------------------
Spending Subject to
Spending under current
law:
Budget authority \1\ 415 ...... ...... ...... ...... ......
Estimated outlays... 413 50 ...... ...... ...... ......
Proposed changes:
Authorization level. ...... 278 250 175 100 ......
Estimated outlays... ...... 70 168 236 185 104
Spending under H.R.
2277:
Authorization level
\1\................ 415 278 250 175 100 ......
Estimated outlays... 413 120 168 236 185 104
Direct Spending
Termination expenses:
Estimated budget
authority.......... ...... 3 ...... ...... ...... ......
Estimated outlays... ...... 3 ...... ...... ...... ......
------------------------------------------------------------------------
\1\ The 1995 level is the amount actually appropriated.
The costs of this bill fall within budget function 750.
6. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enactment
of H.R. 2277 would increase direct spending by $3.3 million in
fiscal year 1996 to cover costs for terminating the LSC. The
following table shows the estimated pay-as-you-go impact of
this bill.
------------------------------------------------------------------------
1995 1996 1997 1998
------------------------------------------------------------------------
Change in outlays........................... 0 3 0 0
Change in receipts.......................... (\1\) (\1\) (\1\) (\1\)
------------------------------------------------------------------------
\1\ Not applicable.
7. Estimated cost to State and local governments: None.
8. Cost comparison: None.
9. Previous CBO estimate: None.
10. Estimate prepared by: Susanne S. Mehlman.
11. Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
Inflationary Impact Statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that H.R.
2277 will have no significant inflationary impact on prices and
costs in the national economy.
Section-by-Section Analysis
Section 1 of the bill--Short title
Section 1 of the Bill, H.R. 2277, sets forth its short
title as ``The Legal Aid Act of 1995.''
Section 2 of the bill--Legal Services Corporation
Section 2 of H.R. 2277 provides that the ``Legal Services
Corporation Act'' (42 U.S.C. 2996-29961) is repealed and
replaced with the ``Legal Aid Grant Act.'' The provisions of
the ``Legal Aid Grant Act'' are described in the section-by-
section which follows.
Section 1 of the act--Short title
Section 1 provides a short title for the proposed Act which
is the ``Legal Aid Grant Act.''
Section 2 of the act--Definitions
Section 2 of the Act redefines the essential parties to the
legal services contract and grant process. Current parties to
that process include the Legal Services Corporation as the
grantor, the Legal Services grantee, and an eligible client.
New definitions set forth in Section 2 define those terms as
the state, the qualified legal service provider, and the
qualified client. Section 2 further defines a qualified case of
action under the Act and a qualified legal service.
Section 2(1)(A) of the Act defines a ``qualified legal
service provider'' to be any individual who is licensed to and
who has practiced law in a state for not less than 3 years or a
person (to include corporations, partnerships or limited
liability companies) who employs or contracts with an
individual (who is licensed to and who has practiced law in a
state for not less than three years). The Committee's intent in
so defining qualified providers is to encourage additional
providers to become involved in the process of furnishing legal
aid and to encourage lawyers who are engaged in an ongoing
private practice to incorporate legal services into their
practice.\10\ Section 2(1)(B) clearly disqualifies some persons
from becoming qualified legal service providers, including any
individual, who during the ten years prior to submitting a bid
for a contract under the Act has been convicted of a felony, or
disbarred from the practice of law for misconduct, incompetence
or neglect of a client. This section also prohibits anyone from
bidding on a legal services contract if any criminal charge
against that individual is pending on the date of submission of
a bid. Consistent with the provisions of Section 2(1)(A), the
acts of the officers, directors, partners and employees of a
corporation, partnership or limited liability company are
attributed to the entity and will be considered determinative
in disqualifying any person from bidding for or receiving a
contract under this Act.
\10\ An problem inherent in the current LSC program is that the
same grantees, or legal service providers, have been receiving federal
funding to provide these services for over a decade. It is the
Committee's hope that competitive bidding as required under section 4
of this Act together with this definition of a qualified provider will
encourage new and different participants to provide legal services
under this Act.
---------------------------------------------------------------------------
The Committee adopted an amendment that encourages the
states to consider two additional factors as potential
disqualifiers regarding an applicant for a contract under this
Act. Consequently, Section 2(1)(B) permits states to
specifically consider whether or not an applicant has ever been
found in contempt of any state or federal court, or, whether or
not the applicant has ever been sanctioned pursuant to Federal
Rule of Civil Procedure 11 or an equivalent state rule
regarding false pleadings or pleading in bad faith.
The Committee's intent with regard to these disqualifiers
is to encourage members of the Bar in good standing, who have a
reputation of respect for the courts, judges and legal process,
to make application to provide legal services. It is the
Committee's intent to discourage from application under this
Act members of the Bar who have on several occasions been found
in contempt of court or sanctioned under Civil Rule 11 or its
state equivalent or whose professional experience exemplifies
disrespector the Bar, the judiciary or the legal process. It is
the Committee's intent to prohibit states from awarding
contracts to applicants whose professional record or reputation
would indicate any proclivity toward the disqualifying factors
set forth in Section 2(B).
Section 2(1)(C) of this Act prohibits the states from
imposing any additional requirements on individuals or persons
as conditions to either bidding on a contract or being awarded
a contract under this Act. It is the Committee's intent to
impose uniform requirements upon all the states with regard to
these minimal standards; and to preclude the states from
imposing any different requirements. It is also the Committee's
design to encourage lawyers who have not previously been
involved in legal services to make application for, and
participate in providing legal aid to the poor. Consequently,
the Committee's minimum requirements and disqualifiers to
bidding upon or receiving a contract under this Act are
intentionally tailored neither to benefit current grantees of
the LSC nor to create a disadvantage for lawyers who have no
specific experience in representing the poor.\11\
\11\ For example, a state which attempts to impose a requirement
that the successful bidder, under this Act, be one who is able to show
substantial experience in poverty law would directly contradict the
Committee's intention regarding this provision.
---------------------------------------------------------------------------
Section 2(2) of the Act defines the term ``qualified legal
services'' to mean: mediation, negotiation, arbitration,
counseling, advice, instruction, referral, or representation;
and legal research or drafting in support of such services.
Section 2(2) also requires that such services be provided
either by a qualified legal service provider or under the
supervision of a qualified provider; and on behalf of a
qualified client for a qualified cause of action as defined
under this Act. This definition is intended to be a general
description of the types of services a provider is authorized
to provide to a qualified client. However, this description of
the types of services is intended to be exclusive. The specific
subject matter prohibitions and restrictions set forth in
Sections 2(4) and 3(e) further limit the scope of ``qualified
legal services.''
Section 2(3) of the Act defines the term ``qualified
client'' to mean any individual who is a U.S. citizen or alien
admitted for permanent residence who is the three months prior
to seeking legal assistance under this Act had an income from
any source which was equal to or less than the poverty line
established under the Community Services Block Grant Act. This
definition is significant to the Committee's aim through this
legislation to confine the use of federal funds to the
representation of U.S. citizens or permanent resident aliens
and to prohibit such funds from being used in the
representation of illegal aliens applicants for residence or
temporary residents.
The current LSC board acknowledged in testimony before the
Committee this year, that despite the ever growing annual
funding for the Corporation, it still only represents twenty
percent of poor U.S. citizens.\12\ Considering that the current
LSC grantees are permitted to and do frequently represent
individuals who are not U.S. citizens,\13\ this twenty percent
figure becomes even more disturbing. It is the Committee's aim
to increase the percentage of U.S. citizens and permanent
resident aliens represented by legal service lawyers. Since
that the goal requires a definition that excludes temporary
agricultural workers and illegal aliens from legal services
representation, this provision facilitates that result. The
term ``qualified client'' is further defined to require that an
eligible client be at or below the poverty level for a minimum
of three months prior to seeking federally funded legal
assistance. This provision is significant when compared to
current law, which allows for the representation of any
individual whose income is equal to 125 percent of the poverty
line and has no specific time frame to determine such income
level. Additionally, the definition is section 2(3)
specifically includes income from any source. In contrast, for
the purpose of the definition of an eligible client, current
LSC regulations exclude entire categories of sources of income.
\12\ LSC proponents also acknowledged to our Committee that LSC
offices turn away hundreds of needy clients every day. Hearing on
Reauthorization of the Legal Services Corporation before the Subcomm.
on Commercial and Administrative Law of the House Comm. on the
Judiciary, May 16, 1995, 104th Cong. 1st Sess. (1995) (testimony of
Deputy Attorney General Jamie Gorelick).
\13\ Congressman Barr referred to several such cases during
Subcommittee hearings in which Legal Services attorneys represented
illegal aliens, including: National Center for Immigrants Rights, Inc.,
et. al. v. Immigration and Naturalization Service, 743 F.2d 1365
(1984), and Recardo Davila-Bardales v. Immigration and Naturalization
Service, 27 F.3d 1 (1st Cir. 1994). Hearing Subcomm. on Commercial and
Administrative Law, House Comm. on the Judiciary, May 16, 1995, 104th
Cong., 1st Sess. (1995).
---------------------------------------------------------------------------
Section 2(4) of the Act defines a ``qualified cause of
action'' by setting forth a finite list of specific causes of
action that shall be considered as qualified under this Act. It
is the Committee's intent in establishing this list to
prioritize the expenditure of time and resources of legal
service providers in a way that will allow them to assist the
greatest number of eligible clients with legal needs that are
most urgently required.\14\ The dismal statistic provided by
the current LSC Board of the Committee which indicates that the
Corporation currently serves only twenty percent of the poor,
would appear capable of improvement when considered in
conjunction with the fact that scarce LSC resources have been
used to represent illegal aliens in deportation proceedings,
drug dealers against eviction from public housing authorities,
and convicted prisoners in various civil proceedings.\15\
\14\ The most recent data made available to the Committee by the
LSC indicates that the types of representation prioritized in Section
2(4) comport with the most frequently provided types of services that
current eligible clients have sought. Legal Services Corporation Fact
Book--1990 Cases Closed, by type of Legal Problem (1991).
\15\ Hearing on Reauthorization of Legal Services, Subcom. on
Commercial and Administrative Law of the House Comm. on the Judiciary,
July 17, 1995, 104th Cong. 1st Sess. (1995) (testimony of Terrance
Wear, Mike Wallace, Penny Pullen and Neal Hogan).
---------------------------------------------------------------------------
It is the intent of the Committee to prohibit this panoply
of adventuresome and politically oriented causes of action in
order to focus the legal service lawyer's time and work product
on the immediate concerns of qualified and law abiding U.S.
citizens and permanent resident aliens. While the Committee
acknowledges that the types of causes permitted under Section
2(4) may be more mundane than the class of cases which an
unfettered lawyer might choose, it is the Committee's intent to
prohibit the use of federal funds to finance these less
practical types of representatives that LSC grantees have
heretofore engaged in with the support of federal dollars.
The types of representation prioritized in the list set
forth in Section 2(4) include only civil causes of action
resulting only from the specific descriptions of clauses (i)
through (xv). Legal service providers are enjoined to avoid
accepting cases where law enforcement agencies, district
attorney's offices, or other agencies are able to provide
adequate service. The causes set out in section 2(4) clause (i)
include those arising from landlord and tenant disputes and are
intended to cover all such actions except for the
representation of a tenant where either a public entity or
private citizen has instituted an eviction proceeding based
upon criminal activity. It is the Committee's design to
explicitly exclude authority for legal service providers to
represent a tenant in any eviction proceeding who is either
personally involved in, responsible for, or who knowingly
allows his or her dwelling to be used for, criminal activity.
Section 2(4), clause (ii) provides authority for legal
service providers to represent eligible clients in any
foreclosure proceedings regarding the client's residence.
Clause (iii) authorizes providers to become involved in
bankruptcy-related representation regarding Chapters 7 and 12
of title 11 of the U.S. Code; and in Chapter 13 proceedings
with the caveat that no Chapter 13 representation is authorized
if a petition for eviction of the client has preceded such
filing. Testimony to the Committee has indicated that current
LSC grantees frequently advise their clients, in order to delay
an otherwise inevitable eviction, to file a petition in
bankruptcy in Chapter 13. The filing of such a petition ensures
that a landlord or a public housing authority cannot move
forward in an eviction proceeding for at least 90 days after
the date of filing. It is the Committee's intent to prohibit
legal service lawyers from frustrating an otherwise legitimate
proceeding in eviction through the misuse of the bankruptcy
courts.
Clause (iv) of section 2(4) provides authority for
qualified providers to represent clients regarding the
enforcement of any debt. Clauses (v) and (vi) of section 2(4)
allow providers to represent eligible clients who apply for any
statutory benefit to which they are specifically entitled under
State or Federal law; and to further represent clients in
appellate proceedings regarding the denial of such benefits. It
is significant that clause (vi) limits a provider's
representation of an appeal regarding the denial of a statutory
benefit. Since clause (iv) of section 2(4)(B) of this Act
excludes from the term ``qualified cause of action'' any
challenge to the constitutionality of any statute, clause (vi)
of section 2(4)(A) is consistent in restricting appellant
representation only to the denial of a benefit on a statutory
ground.
Clause (vii) of section 2(4)(A) provides authority for a
qualified provider to represent a qualified client in a child
custody or child support action. This has proven in the past to
be an important legal service for the poor, and, the Committee
intends that it will continue to be a priority under this Act.
Clause (viii) of section 2(4)(A) provides for representation in
actions to quiet title, which is intended to provide a wide
array of representation regarding legitimate and fraudulent
transactions surrounding real property.
Clause (ix) of section 2(4)(A) authorizes providers to
represent individuals who are victims of spousal or child
abuse. In the past, this type of representation by legal
service lawyers has been decisive in protecting the rights of
abused women and children; the Committee intends for such
representation to continue to be a priority. It is significant
that the Committee has limited such representation to the
abused party. It is the Committee's design to avoid a legal
services lawyer/client relationship like that which has arisen
under the current program where an LSC lawyer represented the
abusing party under such circumstances.\16\ It is also the
Committee's intent by including the prefatory language,
``activities involving'' in clause (ix) to ensure that divorce-
related representation be provided in conjunction with spousal
or child abuse cases.
\16\ In re: Involuntary Termination of E.C.C. to Baby Girl V.H.,
No. 92-1253 (Northhampton County, Penn. Feb. 28, 1995).
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Clauses (x)(xi)(xii)(xiii)(xiv) and (xv) of section 2(4)(A)
provide authority to qualified providers under this Act to
represent qualified clients on matters involving insurance,
competency hearings, probate, divorce, employment matters and
consumer fraud cases. These are all types of representation
that legal services lawyers have been called upon in the past
to provide for the poor, and the Committee intends that they
will continue to be a priority.
Finally, section 2(4)(B) includes certain catchall language
at the end of the enumerated list of qualified causes of action
to authorize additional causes of action which are not
specifically set out in clauses (i)-(xv) of section 2(4)(A), if
they arise out of the same transaction as a cause of action
specified in clauses (i)-(xv) of section 2(4)(A). It is the
Committee's design through this language to be flexible and to
authorize full representation of qualified clients for actions
directly involving those causes specified in section
2(4)(A)(i)-(xv). However, it is also the Committee's intent
that this catchall language not be abused as a loophole by a
qualified provider to allow their involvement in representation
that is clearly beyond causes directly relevant and arising
directly from the actions prioritized in section 2(4)(A)(i)-
(xv). It is additionally the Committee's intent, as the wording
of this catchall provision indicates, to preclude this language
from being used to circumvent other prohibitions and
restrictions set forth in this Act.
Section 2(4)(B) makes explicitly clear that the term
``qualified cause of action'' does not include any class action
under Federal, State or local law or any challenge to the
constitutionality of any statute. This clarification is
critical to the Committee's intent in prioritizing the
qualified causes of action authorized in section 2(4)(A). The
purpose in specifying qualified causes of action is to
prioritize a provider's use of limited time and resources.
Class actions and constitutional challenges are explicitly
excluded pursuant to section 2(4)(B) due to the fact that the
complexity of those actions necessarily consume inordinate time
and resources of legal services lawyers to the detriment of
unserved eligible clients.\17\ Testimony before the Committee
this year overwhelmingly implored the Committee to disallow
class actions and constitutional challenges to statutes.
\17\ Some have argued that class actions represent only a small
percentage of current LSC cases. However, the most recent data
available to the Committee from the Corporation indicates that 1,759
class actions were litigated by Legal Service grantees in 1989. H.R.
Rep. No. 102-476, 102nd Cong., 2nd Sess. (1992). The Committee has
concluded that this type of resource drain is a luxury that Legal
Services providers cannot afford in today's budgetary climate.
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Finally, section 2(5) defines the term ``State'' with the
traditional statutory language which includes the District of
Columbia and the several U.S. territories. However, section
2(5) also provides that an authority pursuant to the bill for
the purposes of receiving grant money, shall be the recognized
governing body of an American Indian tribe or an Alaskan native
village that carried out substantial governmental powers and
duties. This language regarding native Americans was included
in light of the fact that while many native Americans have in
the past required legal services, they do not recognize state
governments as sovereigns. Therefore, pursuant to section 2(5),
grants may be made directly to the governing body of an Indian
tribe or Alaskan native village.
Section 3 of the act--Grants
Section 3(a) of the Act provides certain guidelines to the
states with regard to applying of grant money and for its use.
Section 3(a) makes clear that the Attorney General of the
United States shall direct the Office of Justice Programs in
the Department of Justice to make grants to the states for the
purpose of providing qualified legal services. Section 3(b)
provides that grants shall be made pursuant to this section to
the states in such proportion as the number of poverty line
residents of each state bears to the total number of such
residents in the U.S. Section 3(b) is significant in that it
ensures that the money made available pursuant to this Act will
be proportioned amongst the states pursuant to the poverty line
which will require that more federal money be provided to the
states with the greatest number of poor residents. Section 3(c)
requires that states retain not more than 5 percent of any
grant provided by the Attorney General for administrative
costs. The Committee allowed each state to retain up to 5
percent of its grant money for administrative costs to comport
with an identical provision in the Community Services Block
Grant Act, which was passed by Congress in 1981.\18\
\18\ Critics of the legal aid block grant concept argue that
allowing 5 percent administrative costs for the States is prohibitive
considering their are 50 different states. Furthermore, they contend
that the current LSC only expends 3 percent of its Federal money on
administrative costs. However, the LSC has acknowledged that the 3
percent figure for administrative costs of the Corporation relates only
to the administrative costs of the Corporation's headquarters in
Washington and not to the various 15 or 20 percent administrative costs
incurred by the 323 different grantees of the Corporation which are
financed with Federal money. Consequently, it is the Committee's
estimate that even if all 50 states retained the maximum 5% allowed,
the aggregate figure for administrative costs for legal services would
be substantially less than under the current Corporation .
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Section 3(d) provides that each state which applies for a
grant certify to the Attorney General that it will comply with
and enforce the requirements of this Act. This provision is
significant in requiring any state which receives a grant
pursuant to this Act to certify to the U.S. Attorney General
that it will not only comply with, but enforce the requirements
of this Act. It is the Committee's intent through section 3(d)
to require the states to actively monitor qualified providers
with whom they contract in order to enable the state to enforce
all the restrictions and prohibitions set forth in this Act.
This state certification, coupled with current Federal law
regarding block grants, is intended to ensure dual state and
federal enforcement of this Act.\19\
\19\ It is important to note the State's certification to enforce
the provisions of this Act in conjunction with the Department of
Justice regulations that currently require the Justice Department to
enforce all provisions of Federal Grants and Cooperative Agreements
with State and Local governments. 28 C.F.R. Ch. 1 (7-1-94 Edition) Part
66-Uniform Administrative Requirements for Grants in Cooperative
Agreements to State and Local Governments.
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Section 3(e) imposes significant restrictions on a
qualified provider's use of federal grant money should it
receive a contract from the state to provide such services.
These restrictions are similar to those found in past
appropriations riders which have funded the Legal Services
Corporation, and to restrictions found in the Commerce, State,
Justice Appropriations legislation which passed the House on
July 26, 1995. The restrictions of section 3(e) prohibit the
use of federal funds: in any litigation regarding
redistricting; for Executive branch or regulatory lobbying; for
any legislative lobbying of the Congress or any state or local
legislative body; to conduct training programs for political
activities or labor or antilabor activities; to participate in
any litigation or lobbying with respect to abortion or to
participate in any litigation or representation on behalf of
any prisoner. Section 3(e) also prohibits the solicitation by
any qualified provider of any client for the purposes of
providing legal services. Section 3(e) also prohibits the use
of federal funds to pay any voluntary membership dues to any
private or nonprofit organization.\20\ It is the Committee's
design with regard to the restrictions set forth in section
3(e) to absolutely prohibit any activities set forth therein;
and it is expected that pursuant to section 5(j) of this Act, a
state would terminate a qualified provider who is found to have
breached any of these prohibitions.
\20\ In prohibiting the use of Federal funds to pay for voluntary
membership dues to any private or nonprofit organization, the Committee
intends to allow requisite State bar membership dues to be paid with
federal funds and recognizes those as nonvoluntary membership dues;
however, it explicitly intends to prohibit the use of federal funds to
pay for any other organizational dues which are not essential to a
lawyer's legal authority to practice law.
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Section 3(f) of the Act limits a participating state's use
of its own funds expended for the provision of legal services
to the restrictions set forth in this Act. A fundamental
problem with the current LSC Act is the complete lack of
authority it provides the Corporation to account for the
federal money which the Corporation oversees. There is no
requirement that LSC grantees maintain any record regarding the
specific clients served, the nature of the services provided,
or the funds which pay for any particular legal services.
Consequently, there is no way to prevent the illicit use of
non-federal funds by LSC grantees.
The LSC contends that non-federal funds may be utilized to
circumvent federal restrictions on LSC activities because they
are private funds and therefore not subject to federal
oversight.\21\ The fungibility of Federal, state and private
funds prevents effective oversight of federal funds to LSC
grantees by Congress and is frequently proffered as an excuse
by the LSC board for not disciplining grantees who violate
attempted congressional mandates. While the Committee does not
find it constitutionally sound to limit the use by qualified
providers of purely private funds, it has pursuant to section
3(f) limited the use of such state funds. The Committee
provides an incentive to the states to apply the same
restrictions to state funds as apply to federal funds. In
return for the states' consent to the restrictions of this Act,
federal funds are provided for legal services in the states.
\21\ See Hearing on Reauthorization of the Legal Services
Corporation, supra, (testimony of Alexander Forger).
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Section 3(g) of the Act prohibits a qualified provider and
qualified client from claiming or collecting attorneys fees
from parties to any litigation initiated by such client. It is
the Committee's intent through this Act to encourage the
private Bar to participate in the representation of the poor.
The Committee has concluded that if attorneys fees are
available to a client regarding any particular cause if action,
it will be attractive to a private sector lawyer. Considering
the fact that legal services lawyers represent only 20 percent
of the poor, and so many eligible clients are refused
representation, the Committee has concluded that legal service
lawyers should not be put in a position to be competing with
the private Bar for clients.
Section 3(h) sets forth language which was adopted by
amendment during the Committee's consideration of the bill.
Section 3(h) is intended to prohibit any attempt by any
qualified provider or client to avoid or, in any way, evade the
requirements and restrictions of this Act. While such language
may, when considered with other provisions of this Act, appear
redundant; the Committee has concluded that a twenty year
history of LSC grantees' deliberate evasion of congressional
restrictions warrant this additional provision.
Section 3(i) of the Act designates the dollar amounts
authorized to be appropriated for this Act. The original text
of H.R. 2277 provided funding of $278 million for FY 1996 and
$141 million for FY 1997; however, the Act as amended by
Committee provides for $278 million for FY 1996, $250 million
for FY 1997, $175 million for FY 1998 for $100 million for FY
1999. It is the Committee's intent to encourage a phasing out
of federal participation in legal services; and to encourage
state and local governments and private organizations to become
more active in funding legal services for the poor.
Section 4 of the act--Contracts
Section 4(a) of the Act requires each state which receives
funds under this Act to make such funds available for contracts
pursuant to a competitive bid process throughout the state.
Section 4(b)(1) requires the governor of each state to
designate an authority of the state to administer the legal aid
program, and to solicit and award bids for the provision of
legal services within the state. Section 4(b)(2) requires the
state authority to divide the state into service areas to
ensure the availability of adequate legal services for the poor
throughout the state.
Section 4(b)(3) requires a bidder for a contract with a
state whose service area includes a client population which is
at least five percent non-English speaking demonstrate the
ability to satisfy the communication needs of that population.
The current LSC Act contains a similar provision; however, it
imposes no population percentage requirement. It is the
Committee's intent through section 4(b)(3) to encourage special
attention for non-English speaking eligible client populations
regarding legal services, and to do so through a uniform
standard which will apply to all states. This requirement may
be satisfied by bilingual staff, paid translators or volunteer
translators.
Section 4(c) requires states which receive money pursuant
to this Act to provide funds throughout that state to its
service areas on the same basis as grants are made available to
the states pursuant to section 3(b) of this Act. Section 3(b)
of this Act references the Community Block Grant Act (42 U.S.C.
9902(2)). The Committee intends through this provision to
require the states to make federal money proportionally
available, through the bidding process, to service areas in the
state in a manner that ensures that the poorest service areas
receive the greatest percentage of federal money.
Section 4(d) of the Act requires the states to award
contracts for the provision of qualified legal services to the
applicant who is best qualified, as determined by the state,
and who in its bid offers to provide the greatest number of
hours of legal services to qualified clients. It is the
Committee's intention through section 4(d) to require a start
to award the contract to an applicant who prevails on both
prongs of this two prong test: (1) who is best qualified
according to the state, and (2) who bids to provide the
greatest number of hours. Section 4(d) further provides that a
state, in determining which applicant is best qualified, shall
consider, among other things, the reputation of the principals
of the applicant, the quality, feasibility and cost-
effectiveness of the bidder's plan and a demonstration of
willingness to abide by the restrictions of this Act. It is the
Committee's intention through this provision to encourage
persons who have not previously acted as LSC grantees to become
involved in the provision of legal services to the poor. It is
not the Committee's intention to tilt the scales in favor of or
against existing legal service providers.
Section 4(e) is critical to understanding the significance
of the requirements of section 4(d). Section 4(e) requires that
contractors under this Act only be paid for hours of service
rendered, only at the contract rate, and only if such services
are substantiated by attorney's time records (billable hours)
and additional client-specific documentation. Section 4(e)
mandates that the contract rate by determined by dividing the
total dollar amount of the contract awarded by the number of
hours bid by the applicant (pursuant to subsection 4(d)). This
language is critical to the Committee's fundamental intent to
establish a cost-effective and accountable legal services
delivery system.
Clearly, the Committee's requirement in section 4(d) that a
state contract with the highest bidder is paramount to the
cost-effective control inherent in section 4(e)'s contract rate
formula. If they are not encouraged through this competitive
bid process to bid the greatest number of hours the bidder is
capable of providing, then the contract rate will not produce
the most cost-effective provision of qualified legal services
for the poor.\22\ The Committee intends for the states to
determine who amongst the highest bidders is otherwise best
qualified. However, it is not the Committee's intent to allow a
state to utilize the ``best qualified'' test to undermine the
Act's aim to award contracts to the most cost-effective bidder.
Finally, section 4(e) requires a state to make full payment for
bills rendered by qualified providers to the state within sixty
days.
\22\ For example, if a contract is advertised for a specific
service area at $200,000 and one applicant bids to provide 1,000 hours
of legal services and another applicant bids to provide 2,000 hours,
then the first applicant, pursuant to section 4(e) would be paid at a
rate of $200 per hour, while the second applicant would be paid at $100
per hour. Pursuant to this Act that is the only rate at which a
provider may be paid once the terms of the contract are agreed upon.
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Section 5 of the act--Requirements for the provision of qualified legal
services under a contract
Section 5(a) of the Act provides that the term of a
contract under Section 4 shall be no longer than one year. The
Committee recognizes that the Act provides for a limited period
of authorization and intends that states should be in a
position to assume the responsibility to provide legal services
when that period of authorization expires. Contracts of longer
than one year would not facilitate the assumption of that
responsibility, nor would they encourage the competitive
process, particularly at the outset of an innovative program as
envisioned by this Act.
Section 5(b) requires qualified legal service providers to
discharge their responsibilities under a contract in a
professional manner consistent with applicable law. The
Committee intends that this section should be interpreted to
require that all providers under this Act comply with all
applicable state Bar ethics rules.
Section 5(c) requires that providers maintain case files on
qualified clients, which shall include all pleadings and
research, for five years after the resolution of the client's
cause of action. The Committee believes that it is important
that records be available for as long as practicable which
document the provider's relationship with the client in order
to verify the provision of quality legal services. The bill, as
introduced, provided that case files be kept for three years;
however, the Committee adopted an amendment extending that
period to five years--evidencing its strong interest in
insuring quality legal services.
Section 5(d) requires legal services providers to maintain
daily time records documenting their provision of qualified
legal services. These records must be in increments of one-
tenth of an hour and must identify the relevant client, the
general nature of the work performed and the account charged
for such work. Timekeeping has long been proposed by those
seeking to improve the quality of legal service provided by
Legal Services Corporation grantees, and has been identified by
them as one of the major obstacles in guaranteeing that current
grantees adhere to federal restrictions. The Committee believes
that this provision is critical to the goal of providing an
accountable delivery system for legal services.
Section 5(e) provides that qualified clients shall be given
questionnaires to encourage them to assess the quality of the
services which they received, in order to assist the
administrative authority in its supervisory role. Section 5(f)
provides that qualified clients who receive in person legal
services shall be required to execute a waiver with respect to
such services of their attorney/client and attorney work
product privilege as a condition to receiving such services.
The waiver is intended to facilitate the determination of the
quality and quality of such service, as well as compliance with
the Act, and is limited to such purpose. It does not constitute
a waiver as to other parties and its use for any other purpose
is prohibited.
The Committee has concluded that such a waiver is essential
if accountability of the provider is to be maintained. The
Committee notes that in the past, grantees have interposed
claims of attorney/client privilege to withhold even routine
client information which is necessary for even the most cursory
of monitoring functions.\23\ The Committee also notes that
similar waivers of confidentiality of otherwise privileged
information are required in other instances by the Federal
government to protect the integrity and promote the
effectiveness of federal programs.\24\
\23\ See, ``Legal Services Corporation: Grantee Attorneys' Handling
of Migrant Farmworker Disputes With Growers'', Report of the General
Accounting Office, September 1990 (GAO/HRD 90-144)
\24\ 42 U.S.C. 1320c-9.
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Section 5(g) requires legal service providers to make and
maintain records indicating the basis upon which they
determined the eligibility of qualified clients. The records
must be maintained for three years following the termination of
a contract. The Committee intends to insure the integrity of
the program developed under the Act and feels that this can
only be accomplished by the retention and availability of such
information to those supervising it.
Section 5(i) requires that contracts entered into with
legal service providers shall provide for the recovery of
reasonable attorneys' fees in a successful action brought to
compel payments to the provider under the contract. The
Committee believes that a provider who has been forced to
resort to an action to compel payment from a state should be
compensated for its attorneys' fees when such actions are
successful.
Section 5(j) requires that the Attorney General, the
Governor of the respective state, or the authority which
awarded a contract to terminate a qualified legal service
provider who is found to have committed a material violation of
this Act. A material violation shall include, but is not
limited to, involvement with any prohibited activity. The
requirement that this power be exercised underscores how
strongly the Committee a material violation of this Act. A
material violation shall include, but is not limited to,
involvement with any prohibited activity. The requirement that
this power be exercised underscores how strongly the Committee
feels that providers must adhere to the structure and
strictures of this Act. The Committee also acknowledges that
the contract which the provider has entered into with the
respective state authority may contain additional requirements
binding the provider. Section 5(j) provides that a breach of
this contract by a provider shall entitle the Governor or the
authority to terminate the contract, to award a new contract,
and to recover any funds improperly expended by the provider
with interest. If the breach was willful, the provider is
required to pay to the authority awarding the contract, an
additional amount equal to one half the amount improperly
expended by the provider. This is intended as an additional
enforcement incentive.
Section 5(h) requires a qualified legal service provider to
consent to audits by the Attorney General, the General
Accounting Office and the authority which awarded its contract.
The audit may be performed at the provider's principal place of
business and is to be limited to a determination of whether the
provider is meeting the requirements of this Act and the
contract. The Committee intends not only to insure the
efficiency of the program but also to emphasize the maintenance
of its federal character relative to the application of federal
criminal laws to those who would misuse funds provided under
this Act.\25\
\25\ It is the Committee's understanding and intention that all
contractors under this Act will be considered federal contractors and,
therefore, subject to all federal statutes and laws. See, U.S. v.
Faulks, 905 F.2d 928 (1990); U.S. v. Littriello, 866 F.2d 713 (1989);
U.S. v. Johnson, 596 F.2d 842; U.S. v. Scott, 784 F.2d 787 (1986) cert.
den. 476 U.S. 1145 (1986).
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Section 3 of the bill--Transition and effective date
Section 3(a) of H.R. 2277 provides that the Legal Services
Corporation shall terminate six months after the date of
enactment of this Act. Section 3(b) of the bill provides that
the Attorney General may make funds available to grantees who
were funded under the LSC Act in order to complete court
actions which were filed prior to the date of enactment of this
Act. The funds available to the Attorney General for this
purpose must come from funds authorized under the Act, however,
they may not exceed one percent of the amount appropriated
under Section 3 of the Act for fiscal year 1996.
Section 3(c) of the bill provides that upon the
Corporation's termination, all assets, liabilities,
obligations, property, and records relating to its activities
shall be transferred to the Attorney General. Section 3(d)
provides that upon termination of the Corporation, its
President shall take whatever action is necessary to assist the
Attorney General in undertaking her new responsibilities under
the Act, and transfer to her all unexpended funds which have
been appropriated to the Corporation for the purpose of
carrying out its activities. Section 3(e) of the bill provides
that the Legal Aid Grant Act shall take effect on the date of
enactment.
Agency Views
The Administration was represented during the hearings by
the Honorable Abner Mikva, Counsel to the President; Deputy
Attorney General Jamie Gorelick and John Carey, General
Counsel, Federal Emergency Management Agency.
In addition, the following letter with attachments was
received from the Honorable Abner Mikva and U.S. Attorney
General Janet Reno.
Office of the Attorney General,
Washington, DC, September 11, 1995.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: By this letter and its Appendix we want
to convey the Administration's vigorous opposition to H.R.
2277, the Legal Aid Act of 1995. We urge the Committee, in the
strongest terms possible, to reject this proposed legislation.
Against the 21-year success of the Legal Services
Corporation in delivering a broad array of needed legal
services to poor and low-income citizens throughout the country
at levels of economy, efficiency, and effectiveness rarely
realized in either public or private management, the Legal Aid
Act of 1995 would:
(i) dismantle the well-tested and extraordinarily
efficient and effective Legal Services Corporation
grants to, and management of, some 300 legal services
providers across the nation, and substitute for that
system a wholly untested block grant structure to be
managed by the Department of Justice and operated
through the States;
(ii) disqualify from eligibility for legal services
entire categories of poor and low-income people;
(iii) disallow from federally funded services many
critical causes of action ranging from adoption to
constitutional challenges; and
(iv) set an appropriations course to end federally
funded legal services.
To so narrow the availability and scope of publicly funded
legal services, and to scrap a successful system and replace it
with a yet-to-be-developed set of both federal and state
bureaucracies, is shortsighted. The Legal Aid Act of 1995 makes
a mockery of the essential American principle ``Equal Justice
Under Law.'' If enacted, the bill will mean for millions the
loss of effective, community based legal services and the
certainty of continuing and aggravated problems that will cost
us dearly in other ways down the line.
We urge you, Chairman Hyde, for these reasons and others
detailed in the accompanying Appendix, to oppose this bill and
lead the Committee to reject it.
Sincerely,
Janet Reno,
Attorney General.
Abner Mikva,
Counsel to the President.
Appendix
i. Background
Approximately 50% of all low-income households today face
at least one problem having a legal dimension. The legal
problems low-income people most frequently face include housing
problems, family and domestic matters, credit and creditor
problems, problems concerning benefits conferred by law, and
health and health care-related problems.
Low-income people, however, are very often denied access to
justice because they cannot afford legal help. Nearly three-
fourths of the low-income people with legal needs do not get
help in the civil justice system--not because the Legal
Services Corporation is functioning poorly, or because it has
diverted its resources to matters other than direct client
representation--but simply because the entire civil justice
system is overburdened.
When Congress passed the Legal Services Authorization Act
in 1974 it was responding to a clear need and acknowledging
that a large part of society was barred from effective access
to the legal system. For the last 21 years the Corporation has
directly channeled federal funding to nonprofit legal services
programs serving indigent persons whose rights need protecting.
There are more than 300 of these programs nationwide, operating
from nearly 12,000 neighborhood law offices.
Corporation programs operate through small, community-based
and locally staffed offices headed by independent boards that
include members of the local bar and other representative
quarters of the community. These offices are available to low-
income people in every county of every state, and function as
law firms tailored to meet the needs of each community, and the
people who staff these offices develop expertise and accumulate
institutional and community knowledge that cannot be replaced.
The management of the Corporation is a model for efficient
and effective public funding. Only 3% of the Corporation's
budget is spent on administrative functions; the remaining 97%
is channeled directly to the community-based legal service
providers for the delivery of legal services to people in need.
This extraordinary ratio of administrative costs to program
funding leaves very little room for improvement.
Legal Services Corporation providers nationwide handle over
1.7 million cases each year, improving the lives of families
and the quality of life in their communities. Program providers
help families secure safe housing, prevent illegal evictions,
and protect clients' health, educational, and employment
rights. Approximately 33% of all legal services program cases
involve issues of family law; 22% involve protection of housing
rights; and more than 75% involve or directly affect the rights
of children.
In May of this year the Deputy Attorney General testified
before one of your Subcommittees to the continuing need for a
strong and independent Legal Services Corporation. Judge Mikva
also testified to that need, based on his observations from
legislative bodies for nearly 20 years and from the federal
bench for an additional 15 years. In July Alan Bersin, the
United States Attorney for the Southern District of California,
also testified to the important role the Corporation plays in
law enforcement.
ii. the ill-conceived provisions of h.r. 2277
Against this backdrop of legal needs and the Corporation's
extraordinary record of service and efficiency, the provisions
of H.R. 2277 are badly flawed.
a. The system of block grants
We are very strongly opposed to the bill's system of block
grants to be administered by unknown state entities.
First, this proposal would not save money. The bill would
allow each state to retain as an administrative fee 5 percent
of each federal grant it processes. Currently, however, only 3
percent of the Corporation's budget is spent on administrative
functions with the remainder going directly to the delivery of
legal services.The Corporation involves a staff of
approximately 125 experienced people and operates at an
exceptionally high level of economy, efficiency and
effectiveness. None of these important and rarely achieved
goals would be served by dissolving this small, experienced and
specialized group and providing for a larger fee to be charged
by the states.
Second, jeopardizing the well-established system of
neighborhood law offices with experienced attorneys trained to
meet local legal needs would be extremely wasteful. To disrupt
the current, proven structure for providing legal services to
the poor and replace it with an as-yet undeveloped system that
by its very nature would involve or create a new layer of
bureaucracy in each of the fifty states would decrease both the
quality and quantity of legal services available to the poor
and the working poor. Years of institutional knowledge and
expertise would be lost.
Third, the bill's provisions for individual contracts
obtained by bids risk the result of second-class justice.
Because it appears that only individual may bid on these
contracts, low-income persons will lose the benefit of the
expertise developed by local legal services offices over the
last 21 years. The critical function of these local offices as
magnets, or clearinghouses, would also be destroyed, thwarting
the approximately 130,000 attorneys naitonwide engaging in pro
bono activities each year but needing a mechanism to do so.
Similarly, the bill's proposed contracts are for a short
duration--on year--which presents the very real danger of lack
of continuity in representation and disruption to pending
cases.
Fourth, the involvement of state governmental units in the
administration of legal services for private persons would
present the inevitable potential for conflicts of interest.
Legal providers would hesitate to represent clients whose
cases, while highly meritorious, challenge a flawed law or
governmental practice. A provider whose funding could be
terminated for advancing a legitimate claim on behalf of his or
her client is put in an unfair position.
Finally, oversight would not be improved. This Committee
has for 20 years very capably overseen the operations of the
Corporation. To delegate this important function to unspecified
state bureaucracies with no experience in such oversight simply
is not responsible.\1\
\1\ Further, because the bill provides for a 50 percent decrease in
funding from 1996 to 1997 and no funding for 1998, states may lack the
incentive to create permanent, efficient offices to administer these
grants.
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B. The Justice Department's administration of the grant program
We are also very strongly opposed to the provision that the
Department of Justice administer the grant system.
First, this system would not increase efficiency or save
money. As stated above, the Corporation consumes only 3% of its
budget on administrative expenses. The bill allows states to
withhold 5% of all grant amounts as administrative expenses;
this amount is in addition to the increased costs the Justice
Department would incur in overseeing this program, and that the
public would have to bear.
Second, involvement in the delivery of legal services to
poor and low-income people is outside the scope of, and
fundamentally inconsistent with, the primary mission of the
Justice Department. The Department's primary responsibilities
are criminal and civil law enforcement directly and exclusively
in the interests of the United States and its constituent
executive branch agencies. Even indirect involvement in the
litigation of private interests has never been the job of the
Department.
Third, the independent and exclusive mission of the
Corporation is an important aspect of its professionalism and
effectiveness for its clients. Access to independent legal
advice and services is the essence of the civil justice
equality we are trying to achieve, and that goal is best
achieved by a single-purpose entity such as the Corporation.
Fourth, it makes no sense to federalize, or involve state
governments in, functions relating to the network of legal
services programs that operate so efficiently and effectively
at the community level. At a time when the Justice Department
is grappling with so many issues pertaining to law enforcement,
public safety and justice reform, and is trying to consolidate
functions and simplify its operations, the addition of a
substantial and wholly unrelated administrative task would be
inconsistent with the goal shared by all agencies--reducing
size and doing more with less.
C. Limitations and restrictions on the provision of legal services
The bill so severely limits all aspects of representation
that the fundamental concept of a lawyer having the
independence to zealously represent his or her client would
simply not apply to the bill's supposed beneficiaries. The
following examples, while not comprehensive, are among the most
troubling in the bill:
1. Limitations on a State's use of its own money
One of the bill's most misguided provisions dictates that
if a state receives grant money from the federal government and
also distributes its own funds to legal service providers the
state must require that only ``qualified clients,'' as defined
under the federal bill, receive ``qualified legal services,''
again as defined under the bill, pursuant to the bill's laundry
list of restrictions limiting the uses of federal grant money.
In other words, the federal government restricts in the bill
the rights of all 50 states to spend their own money as they
wish in funding legal services, including actions between two
residents of a given state--or between that state and one of
its citizens--in a case pending in that state's own courts.
This extraordinary provision is overreaching and
inconsistent with the underlying idea that states are capable
of regulating the administration of the legal affairs of their
citizens with greater efficiency and wisdom than the
Corporation's community-based offices. While the thrust of the
bill appears to be to provide states with more discretion and
more authority, the logic behind this provision limiting state
authority is difficult to fathom.
2. ``Qualified'' clients
The bill dramatically limits those who may even apply for
legal services, excluding entire categories of now-eligible
people who are the most likely to be in need. Its definition of
a ``qualified client''--a client who is eligible to receive
legal assistance from a provider--is limited to United States
citizens and certain aliens admitted for permanent residence.
This definition would unconscionably deprive many legally-
admitted, low-income aliens of access to the civil justice
system while they are lawfully in the United States.
3. ``Qualified'' causes of action
The bill's listing of ``qualified'' causes of action which
may be funded by grant money is not only very small but, most
extraordinarily, excludes a number of commonly brought and
long-eligible claims such as paternity, adoption, foster care,
guardianship, hiring discrimination and wage claims, as well as
actions to protect the rights of the physically disabled.
Clients with legal problems that do not fit neatly into a
predesignated pigeonhole are foreclosed from representation, no
matter how meritorious their cases.\2\
\2\ Further, even within the context of this limited set of
eligible cases the bill restricts attorneys representing poor and low-
income persons from engaging in numerous, perfectly legal activities on
their behalf.
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Equally offensive is the specific exclusion of ``any
challenge to the constitutionality of any statute.'' This
limitation is illogical and unjustifiable; it should be the
right of every citizen and legal immigrant to have meaningful
access to the protection of the Constitution regardless of his
or her financial means. Under the bill, if a state were to pass
a statute denying a particular group due process or equal
protection, or blurring the line between church and state or
limiting free speech, low-income persons would be denied the
constitutional protections they are due and that are available
to those with money.\3\
\3\ Indeed, if a pending case were to have a constitutional issue
injected by an opponent or late-arriving third party, an attorney
funded with grant money would be placed in the ethical bind of having
to forego the assertion of a meritorious defense or withdraw from the
case leaving his or her client to attempt a pro se defense.
---------------------------------------------------------------------------
4. Attorneys fees
The bill anomalistically provides that legal service
providers may not, under any circumstances, collect attorneys
fees from parties in litigation initiated by their clients.
Thus in the case of a state statute that automatically awards
fees to prevailing plaintiffs as part of an enforcement
mechanism, or a state court judge who seeks to award
discretionary attorneys fees against a private attorney for
engaging in frivolous conduct wasting the court's time and that
of a publicly-funded legal services provider, the provider is
barred from accepting the compensatory award. This provision
again treads, without reason, on state practice.
D. The appropriation ceiling
Finally, the bill imposes for fiscal years 1996 and 1997
increasingly lower ceilings--$278 million and $141 million
respectively--on future appropriations for the grant program.
This is yet another indication of the sponsors' not-so-secret
intent to terminate federally funded legal services altogether.
This year's appropriation of $400 million, while far greater
than the 1996 and 1997 authorizations provided in H.R. 2277,
fell far short of the funding truly needed. If the Committee is
serious about legal services, however their delivery is
structured, any reauthorization bill should simply authorize
the appropriation of such sums as may be necessary rather than
impose an artificial ceiling.
conclusion
For the reasons outlined above, the Administration
vigorously opposes passage of H.R. 2277, the Legal Aid Act of
1995, and respectfully urges the Committee to defeat it and to
reauthorize the Legal Services Corporation.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of the
House of Representatives, changes in existing law made by the
bill, as reported, are shown as follows (existing law proposed
to be omitted is enclosed in black brackets, new matter is
printed in italic, existing law in which no change is proposed
is shown in roman):
LEGAL SERVICES CORPORATION ACT
[TITLE X--LEGAL SERVICES CORPORATION ACT
[statement of findings and declaration of purpose
[Sec. 1001. The Congress finds and declares that--
[(1) there is a need to provide equal access to the
system of justice in our Nation for individuals who
seek redress of grievances;
[(2) there is a need to provide high quality legal
assistance to those who would be otherwise unable to
afford adequate legal counsel and to continue the
present vital legal services program;
[(3) providing legal assistance to those who face an
economic barrier to adequate legal counsel will serve
best the ends of justice and assist in improving
opportunities for low-income persons consistent with
the purposes of this Act;
[(4) for many of our citizens, the availability of
legal services has reaffirmed faith in our government
of laws;
[(5) to preserve its strength, the legal services
program must be kept free from the influence of or use
by it of political pressures; and
[(6) attorneys providing legal assistance must have
full freedom to protect the best interests of their
clients in keeping with the Code of Professional
Responsibility, the Canons of Ethics, and the high
standards of the legal profession.
[definitions
[Sec. 1002. As used in this title, the term--
[(1) ``Board'' means the Board of Directors of the
Legal Services Corporation;
[(2) ``Corporation'' means the Legal Services
Corporation established under this title;
[(3) ``eligible client'' means any person financially
unable to afford legal assistance;
[(4) ``Governor'' means the chief executive officer
of a State;
[(5) ``legal assistance'' means the provision of any
legal services consistent with the purposes and
provisions of this title;
[(6) ``recipient'' means any grantee, contractee, or
recipient of financial assistance described in clause
(A) of section 1006(a)(1);
[(7) ``staff attorney'' means an attorney who
receives more than one-half of his annual professional
income from a recipient organized solely for the
provision of legal assistance to eligible clients under
this title; and
[(8) ``State'' means any State of the United States,
the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the
Trust Territory of the Pacific Islands, and any other
territory or possession of the United States
[establishment of corporation
[Sec. 1003. (a) There is established in the District of
Columbia a private nonmembership nonprofit corporation, which
shall be known as the Legal Services Corporation, for the
purpose of providing financial support for legal assistance in
noncriminal proceedings or matters to persons financially
unable to afford legal assistance.
[(b) The Corporation shall maintain its principal office in
the District of Columbia and shall maintain therein a
designated agent to accept service of process for the
Corporation. Notice to or service upon the agent shall be
deemed notice to or service upon the Corporation.
[The Corporation, and any legal assistance program assisted
by the Corporation, shall be eligible to be treated as an
organization described in section 170(c)(2)(B) of the Internal
Revenue Code of 1954 and as an organization described in
section 501(c)(3) of the Internal Revenue Code of 1954 which is
exempt from taxation under section 501(a) of such Code. If such
treatments are conferred in accordance with the provisions of
such Code, the Corporation, and legal assistance programs
assisted by the Corporation, shall be subject to all provisions
of such Code relevant to the conduct of organizations exempt
from taxation.
[governing body
[Sec. 1004. (a) The Corporation shall have a Board of
Directors consisting of eleven voting members appointed by the
President, by and with the advice and consent of the Senate, no
more than six of whom shall be of the same political party. A
majority shall be members of the bar of the highest court of
any State, and none shall be a full-time employee of the United
States. Effective with respect to appointments made after the
date of enactment of the Legal Services Corporation Act
Amendments of 1977 but not later than July 31, 1978, the
membership of the Board shall be appointed so as to include
eligible clients, and to be generally representative of the
organized bar, attorneys providing legal assistance to eligible
clients, and the general public.
[(b) The term of office of each member of the Board shall be
three years, except that five of the members first appointed,
as designated by the President at the time of appointment,
shall serve for a term of two years. Each member of the Board
shall continue to serve until the successor to such member has
been appointed and qualified. The term of initial members shall
be computed from the date of the first meeting of the Board.
The term of each member other than initial members shall be
computed from the date of termination of the preceding term.
Any member appointed to fill a vacancy occurring prior to the
expiration of the term for which such member's predecessor was
appointed shall be appointed for the remainder of such term. No
member shall be reappointed to more than two consecutive terms
immediately following such member's initial term.
[(c) The members of the Board shall not, by reason of such
membership, be deemed officers or employees of the United
States.
[(d) The President shall select from among the voting members
of the board a chairman, who shall serve for a term of three
years. Thereafter the Board shall annually elect a chairman
from among its voting members.
[(e) A member of the Board may be removed by a vote of seven
members for malfeasance in office or for persistent neglect of
or inability to discharge duties, or for offenses involving
moral turpitude, and for no other cause.
[(f) Within six months after the first meeting of the Board,
the Board shall request the Governor of each State to appoint a
nine-member advisory council for such State. A majority of the
members of the advisory council shall be appointed, after
recommendations have been received from the State bar
association, from among the attorneys admitted to practice in
the State, and the membership of the council shall be subject
to annual reappointment. If ninety days have elapsed without
such an advisory council appointed by the Governor, the Board
is authorized to appoint such a council. The advisory council
shall be charged with notifying the Corporation of any apparent
violation of the provisions of this title and applicable rules,
regulations, and guidelines promulgated pursuant to this title.
The advisory council shall, at the same time, furnish a copy of
the notification to any recipient affected thereby, and the
Corporation shall allow such recipient a reasonable time (but
in no case less than thirty days) to reply to any allegation
contained in the notification.
[(g) All meetings of the Board, of any executive committee of
the Board, and of any advisory council established in
connection with this title shall be open and shall be subject
to the requirements and provisions of section 552b of title 5,
United States Code (relating to open meetings).
[(h) The Board shall meet at least four times during each
calendar year.
[officers and employees
[Sec. 1005. (a) The Board shall appoint the president of the
Corporation, who shall be a member of the bar of the highest
court of a State and shall be a non-voting ex officio member of
the Board, and such other officers as the Board determines to
be necessary. No officer of the Corporation may receive any
salary or other compensation for services from any source other
than the Corporation during his period of employment by the
Corporation, except as authorized by the Board.
[(b)(1) The president of the Corporation, subject to general
policies established by the Board, may appoint and remove such
employees of the Corporation as he determines necessary to
carry out the purposes of the Corporation.
[(2) No political test or political qualification shall be
used in selecting, appointing, promoting, or taking any other
personnel action with respect to any officer, agent, or
employee of the Corporation or of any recipient, or in
selecting or monitoring any grantee, contractor, or person or
entity receiving financial assistance under this title.
[(c) No member of the Board may participate in any decision,
action, or recommendation with respect to any matter which
directly benefits such member or pertains specifically to any
firm or organization with which such member is then associated
or has been associated within a period of two years.
[(d) Officers and employees of the Corporation shall be
compensated at rates determined by the Board, but not in excess
of the rate of level V of the Executive Schedule specified in
section 5316 of title 5, United States Code.
[(e)(1) Except as otherwise specifically provided in this
title, officers and employees of the Corporation shall not be
considered officers or employees, and the Corporation shall not
be considered a department, agency, or instrumentality, of the
Federal Government.
[(2) Nothing in this title shall be construed as limiting the
authority of the Office of Management and Budget to review and
submit comments upon the Corporation's annual budget request at
the time it is transmitted to the Congress.
[(f) Officers and employees of the Corporation shall be
considered officers and employees of the Federal Government for
purposes of the following provisions of title 5, United States
Code: subchapter I of chapter 81 (relating to compensation for
work injuries); chapter 83 (relating to civil service
retirement); chapter 87 (relating to life insurance); and
chapter 89 (relating to health insurance). The Corporation
shall make contributions at the same rates applicable to
agencies of the Federal Government under the provisions
referred to in this subsection.
[(g) The Corporation and its officers and employees shall be
subject to the provisions of section 552 of title 5, United
States Code (relating to freedom of information).
[powers, duties, and limitations
[Sec. 1006. (a) To the extent consistent with the provisions
of this title, the Corporation shall exercise the powers
conferred upon a nonprofit corporation by the District of
Columbia Nonprofit Corporation Act (except for section 1005(o)
of title 29 of the District of Columbia Code). In addition, the
Corporation is authorized--
[(1)(A) to provide financial assistance to qualified
programs furnishing legal assistance to eligible
clients, and to make grants to and contracts with--
[(i) individuals, partnerships, firms,
corporation, and nonprofit organizations, and
[(ii) State and local governments (only upon
application by an appropriate State or local
agency or institution and upon a special
determination by the Board that the
arrangements to be made by such agency or
institution will provide services which will
not be provided adequately through
nongovernmental arrangements),
for the purpose of providing legal assistance to
eligible clients under this title, and (B) to make such
other grants and contracts as are necessary to carry
out the purposes and provisions of this title;
[(2) to accept in the name of the Corporation, and
employ or dispose of in furtherance of the purposes of
this title, any money or property, real, personal, or
mixed, tangible or intangible, received by gift,
devise, bequest, or otherwise; and
[(3) to undertake directly, or by grant or contract,
the following activities relating to the delivery of
legal assistance--
[(A) research, except that broad general
legal or policy research unrelated to
representation of eligible clients may not be
undertaken by grant or contract,
[(B) training and technical assistance, and
[(C) to serve as a clearinghouse for
information.
[(b)(1)(A) The Corporation shall have authority to insure the
compliance of recipients and their employees with the
provisions of this title and the rules, regulations, and
guidelines promulgated pursuant to this title, and to
terminate, after a hearing in accordance with section 1011,
financial support to a recipient which fails to comply.
[(B) No question of whether representation is authorized
under this title, or the rules, regulations or guidelines
promulgated pursuant to this title, shall be considered in, or
affect the final disposition of, any proceeding in which a
person is represented by a recipient or an employee of a
recipient. A litigant in such a proceeding may refer any such
question to the Corporation which shall review and dispose of
the question promptly, and take appropriate action. This
subparagraph shall not preclude judicial review available under
applicable law.
[(2) If a recipient finds that any of its employees has
violated or caused the recipient to violate the provisions of
this title or the rules, regulations, and guidelines
promulgated pursuant to this title, the recipient shall take
appropriate remedial or disciplinary action in accordance with
the types of procedures prescribed in the provisions of section
1011.
[(3) The Corporation shall not, under any provision of this
title, interfere with any attorney in carrying out his
professional responsibilities to his client as established in
the Canons of Ethics and the Code of Professional
Responsibility of the American Bar Association (referred to
collectively in this title as ``professional
responsibilities'') or abrogate as to attorneys in programs
assisted under this title the authority of a State or other
jurisdiction to enforce the standards of professional
responsibility generally applicable to attorneys in such
jurisdiction. The Corporation shall insure that activities
under this title are carried out in a manner consistent with
attorneys' professional responsibilities.
[(4) No attorney shall receive any compensation, either
directly or indirectly, for the provision of legal assistance
under this title unless such attorney is admitted or otherwise
authorized by law, rule, or regulation to practice law or
provide such assistance in the jurisdiction where such
assistance is initiated.
[(5) The Corporation shall insure that (A) no employee of the
Corporation or of any recipient (except as permitted by law in
connection with such employee's own employment situation),
while carrying out legal assistance activities under this
title, engage in, or encourage others to engage in, any public
demonstration or picketing, boycott, or strike; and (B) no such
employee shall, at any time, engage in, or encourage others to
engage in, any of the following activities; (i) any rioting or
civil disturbance, (ii) any activity which is in violation of
an outstanding injunction of any court of competent
jurisdiction, (iii) any other illegal activity, or (iv) any
intentional identification of the Corporation or any recipient
with any political activity prohibited by section 1007(a)(6).
The Board, within ninety days after its first meeting, shall
issue rules and regulations to provide for the enforcement of
this paragraph and section 1007(a)(5), which rules shall
include, among available remedies, provisions, in accordance
with the types of procedures prescribed in the provisions of
section 1011, for suspension of legal assistance supported
under this title, suspension of an employee of the Corporation
or of any employee of any recipient by such recipient, and,
after consideration of other remedial measures and after a
hearing in accordance with section 1011, the termination of
such assistance or employment, and deemed appropriate for the
violation in question.
[(6) In areas where significant numbers of eligible clients
speak a language other than English as their principal
language, the Corporation shall, to the extent feasible,
provide that their principal language is used in the provision
of legal assistance to such clients under this title.
[(c) The Corporation shall not itself--
[(1) participate in litigation unless the Corporation
or a recipient of the Corporation is a party, or a
recipient is representing an eligible client in
litigation in which the interpretation of this title or
a regulation promulgated under this title is an issue,
and shall not participate on behalf of any client other
than itself; or
[(2) undertake to influence the passage or defeat of
any legislation by the Congress of the United States or
by any State or local legislative bodies, except that
personnel of the Corporation may testify or make other
appropriate communication (A) when formally requested
to do so by a legislative body, a committee, or a
member thereof, or (B) in connection with legislation
or appropriations directly affecting the activities of
the Corporation.
[(d)(1) The Corporation shall have no power to issue any
shares of stock, or to declare or pay any dividends.
[(2) No part of the income or assets of the Corporation shall
inure to the benefit of any director, officer, or employee,
except as reasonable compensation for services or reimbursement
for expenses.
[(3) Neither the Corporation nor any recipient shall
contribute or make available corporate funds or program
personnel or equipment to any political party or association,
or the campaign of any candidate for public or party office.
[(4) Neither the Corporation nor any recipient shall
contribute or make available corporate funds or program
personnel or equipment for use in advocating or opposing any
ballot measures, initiatives, or referendums. However, an
attorney may provide legal advice and representation as an
attorney to any eligible client with respect to such client's
legal rights.
[(5) No class action suit, class action appeal, or amicus
curiae class action may be undertaken, directly or through
others, by a staff attorney, except with the express approval
of a project director of a recipient in accordance with
policies established by the governing body of such recipient.
[(6) Attorneys employed by a recipient shall be appointed to
provide legal assistance without reasonable compensation only
when such appointment is made pursuant to a statute, rule, or
practice applied generally to attorneys practicing in the court
where the appointment is made.
[(e)(1) Employees of the Corporation or of recipients shall
not at any time intentionally identify the Corporation or the
recipient with any partisan or nonpartisan political activity
associated with a political party or association, or the
campaign of any candidate for public or party office.
[(2) Employees of the Corporation and staff attorneys shall
be deemed to be State or local employees for purposes of
chapter 15 of title 5, United States Code, except that no staff
attorney may be a candidate in a partisan political election.
[(f) If an action is commenced by the Corporation or by a
recipient and a final order is entered in favor of the
defendant and against the Corporation or a recipient's
plaintiff, the court shall, upon motion by the defendant and
upon a finding by the court that the action was commenced or
pursued for the sole purpose of harassment of the defendant or
that the Corporation or a recipient's plaintiff maliciously
abused legal process, enter an order (which shall be appealable
before being made final) award reasonable costs and legal fees
incurred by the defendant in defense of the action, except when
in contravention of a State law, a rule of court, or a statute
of general applicability. Any such costs and fees shall be
directly paid by the Corporation.
[grants and contracts
[Sec. 1007. (a) With respect to grants or contracts in
connection with the provision of legal assistance to eligible
clients under this title, the Corporation shall--
[(1) insure the maintenance of the highest quality of
service and professional standards, the preservation of
attorney-client relationships, and the protection of
the integrity of the adversary process from any
impairment in furnishing legal assistance to eligible
clients;
[(2)(A) establish, in consultation with the Director
of the Office of Management and Budget and with the
Governors of the several States, maximum income levels
(taking into account family size, urban and rural
differences, and substantial cost-of-living variations)
for individuals eligible for legal assistance under
this title;
[(B) establish guidelines to insure that eligibility
of clients will be determined by recipients on the
basis of factors which include--
[(i) the liquid assets and income level of
the client,
[(ii) the fixed debts, medical expenses, and
other factors which affect the client's ability
to pay,
[(iii) the cost of living in the locality,
and
[(iv) such other factors as relate to
financial inability to afford legal assistance,
which may include evidence of a prior
determination that such individual's lack of
income results from refusal or unwillingness,
without good cause, to seek or accept an
employment situation; and
[(C) insure that (i) recipients, consistent with
goals established by the Corporation, adopt procedures
for determining and implementing priorities for the
provision of such assistance, taking into account the
relative needs of eligible clients for such assistance
(including such outreach, training, and support
services as may be necessary), including particularly
the needs for service on the part of significant
segments of the population of eligible clients with
special difficulties of access to legal services or
special legal problems (including elderly and
handicapped individuals); and (ii) appropriate training
and support services are provided in order to provide
such assistance to such significant segments of the
population of eligible clients;
[(3) insure that grants and contracts are made so as
to provide the most economical and effective delivery
of legal assistance to persons in both urban and rural
areas;
[(4) insure that attorneys employed full time in
legal assistance activities supported in major part by
the Corporation refrain from (A) any compensated
outside practice of law, and (B) any uncompensated
outside practice of law except as authorized in
guidelines promulgated by the Corporation;
[(5) insure that no funds made available to
recipients by the Corporation shall be used at any
time, directly or indirectly, to influence the
issuance, amendment, or revocation of any executive
order or similar promulgation by any Federal, State, or
local agency, or to undertake to influence the passage
or defeat of any legislation by the Congress of the
United States, or by any State or local legislative
bodies, or State proposals by initiative petition,
except where--
[(A) representation by an employee of a
recipient for any eligible client is necessary
to the provision of legal advice and
representation with respect to such client's
legal rights and responsibilities (which shall
not be construed to permit an attorney or a
recipient employee to solicit a client, in
violation of professional responsibilities, for
the purpose of making such representation
possible); or
[(B) a governmental agency, legislative body,
a committee, or a member thereof--
[(i) requests personnel of the
recipient to testify, draft, or review
measures or to make representations to
such agency, body, committee, or
member, or
[(ii) is considering a measure
directly affecting the activities under
this title of the recipient or the
Corporation.
[(6) insure that all attorneys engaged in legal
assistant activities supported in whole or in part by
the Corporation refrain, while so engaged, from--
[(A) any political activity, or
[(B) any activity to provide voters or
prospective voters with transportation to the
polls or provide similar assistance in
connection with an election (other than legal
advice and representation), or
[(C) any voter registration activity (other
than legal advice and representation);
[(7) require recipients to establish guidelines,
consistent with regulations promulgated by the
Corporation, for a system for review of appeals to
insure the efficient utilization of resources and to
avoid frivolous appeals (except that such guidelines or
regulations shall in no way interfere with attorneys'
professional responsibilities);
[(8) insure that recipients solicit the
recommendations of the organized bar in the community
being served before filling staff attorney positions in
any project funded pursuant to this title and give
preference in filling such positions to qualified
persons who reside in the community to be served;
[(9) insure that every grantee, contractor, or person
or entity receiving financial assistance under this
title or predecessor authority under this Act which
files with the Corporation a timely application for
refunding is provided interim funding necessary to
maintain its current level of activities until (A) the
application for refunding has been approved and funds
pursuant thereto received, or (B) the application for
refunding has been finally denied in accordance with
section 1011 of this Act; and
[(10) insure that all attorneys, while engaged in
legal assistance activities supported in whole or in
part by the Corporation, refrain from the persistent
incitement of litigation and any other activity
prohibited by the Canons of Ethics and Code of
Professional Responsibility of the American Bar
Association, and insure that such attorneys refrain
from personal representation for a private fee in any
cases in which they were involved while engaged in such
legal assistance activities.
[(b) No funds made available by the Corporation under this
title, either by grant or contract, may be used--
[(1) to provide legal assistance (except in
accordance with guidelines promulgated by the
Corporation) with respect to any fee-generating case
(which guidelines shall not preclude the provision of
legal assistance in cases in which a client seeks only
statutory benefits and appropriate private
representation is not available);
[(2) to provide legal assistance with respect to any
criminal proceeding, except to provide assistance to a
person charged with a misdemeanor or lesser offense or
its equivalent in an Indian tribal court;
[(3) to provide legal assistance in civil actions to
persons who have been convicted of a criminal charge
where the civil action arises out of alleged acts or
failures to act and the action is brought against an
officer of the court or against a law enforcement
official for the purpose of challenging the validity of
the criminal conviction;
[(4) for any of the political activities prohibited
in paragraph (6) of subsection (a) of this section;
[(5) to make grants to or enter into contracts with
any private law firm which expends 50 percent or more
of its resources and time litigating issues in the
board interests of a majority of the public;
[(6) to support or conduct training programs for the
purpose of advocating particular public policies or
encouraging political activities, labor or antilabor
activities, boycotts, picketing, strikes, and
demonstrations, as distinguished from the dissemination
of information about such policies or activities,
except that this provision shall not be construed to
prohibit the training of attorneys or paralegal
personnel necessary to prepare them to provide adequate
legal assistance to eligible clients;
[(7) to initiate the formation, or act as an
organizer, of any association, federation, or similar
entity, except that this paragraph shall not be
construed to prohibit the provision of legal assistance
to eligible clients;
[(8) to provide legal assistance with respect to any
proceeding or litigation which seeks to procure a
nontherapeutic abortion or to compel any individual or
institution to perform an abortion, or assist in the
performance of an abortion, or provide facilities for
the performance of an abortion, contrary to the
religious beliefs or moral convictions of such
individual or institution.
[(9) to provide legal assistance with respect to any
proceeding or litigation relating to the desegregation
of any elementary or secondary school or school system,
except that nothing in this paragraph shall prohibit
the provision of legal advice to an eligible client
with respect to such client's legal rights and
responsibilities; or
[(10) to provide legal assistance with respect to any
proceeding or litigation arising out of a violation of
the Military Selective Service Act or of desertion from
the Armed Forces of the United States, except that
legal assistance may be provided to an eligible client
in a civil action in which such client alleges that he
was improperly classified prior to July 1, 1973, under
the Military Selective Service Act or prior
corresponding law.
[(c) In making grants or entering into contracts for legal
assistance, the Corporation shall insure that any recipient
organized solely for the purpose of providing legal assistance
to eligible clients is governed by a body at least 60 percent
of which consists of attorneys who are members of the bar of a
State in which the legal assistance is to be provided (except
that the Corporation (1) shall, upon application, grant waivers
to permit a legal services program, supported under section
222(a)(3) of the Economic Opportunity Act of 1964, which on the
date of enactment of this title has a majority of persons who
are not attorneys on its policy-making board to continue such a
nonattorney majority under the provisions of this title, and
(2) may grant, pursuant to regulations issued by the
Corporation, such a waiver for recipients which, because of the
nature of the population they serve, are unable to comply with
such requirement) and at least one-third of which consists of
persons who are, when selected, eligible clients who may also
be representatives of associations or organizations of eligible
clients. Any such attorney, while serving on such board, shall
not receive compensation from a recipient.
[(d) The Corporation shall monitor and evaluate and provide
for independent evaluations of programs supported in whole or
in part under this title to insure that the provisions of this
title and the bylaws of the Corporation and applicable rules,
regulations, and guidelines promulgated pursuant to this title
are carried out.
[(e) The president of the Corporation is authorized to make
grants and enter into contracts under this title.
[(f) At least thirty days prior to the approval of any grant
application or prior to entering into a contract or prior to
the initiation of any other project, the Corporation shall
announce publicly, and shall notify the Governor, the State bar
association of any State, and the principal local bar
associations (if there be any) of any community, where legal
assistance will thereby be initiated, of such grant, contract,
or project. Notification shall include a reasonable description
of the grant application or proposed contract or project and
request comments and recommendations.
[(g) The Corporation shall provide for comprehensive,
independent study of the existing staff-attorney program under
this Act and, through the use of appropriate demonstration
projects, of alternative and supplemental methods of delivery
of legal services to eligible clients, including judicare,
vouchers, prepaid legal insurance, and contracts with law
firms; and, based upon the results of such study, shall make
recommendations to the President and the Congress, not later
than two years after the first meeting of the Board, concerning
improvements, changes, or alternative methods for the
economical and effective delivery of such services.
[(h) The Corporation shall conduct a study on whether
eligible clients who are--
[(1) veterans,
[(2) native Americans,
[(3) migrants or seasonal farm workers,
[(4) persons with limited English-speaking abilities,
and
[(5) persons in sparsely populated areas where a
harsh climate and an inadequate transportation system
are significant impediments to receipt of legal
services.
have special difficulties of access to legal services or
special legal problems which are not being met. The Corporation
shall report to Congress not later than January 1, 1979, on the
extent and nature of any such problems and difficulties and
shall include in the report and implement appropriate
recommendations.
[records and reports
[Sec. 1008. (a) The Corporation is authorized to require such
reports as it deems necessary from any grantee, contractor, or
person or entity receiving financial assistance under this
title regarding activities carried out pursuant to this title.
[(b) The Corporation is authorized to prescribe the keeping
of records with respect to funds provided by grant or contract
and shall have access to such records at all reasonable times
for the purpose of insuring compliance with the grant or
contract or the terms and conditions upon which financial
assistance was provided.
[(c) The Corporation shall publish an annual report which
shall be filed by the Corporation with the President and the
Congress. Such report shall include a description of services
provided pursuant to section 1007(a)(2)(C) (i) and (ii).
[(d) Copies of all reports pertinent to the evaluation,
inspection, or monitoring of any grantee, contractor, or person
or entity receiving financial assistance under this title shall
be submitted on a timely basis to such grantee, contractor, or
person or entity, and shall be maintained in the principal
office of the Corporation for a period of at least five years
subsequent to such evaluation, inspection, or monitoring. Such
reports shall be available for public inspection during regular
business hours, and copies shall be furnished, upon request, to
interested parties upon payment of such reasonable fees as the
Corporation may establish.
[(e) The Corporation shall afford notice and reasonable
opportunity for comment to interested parties prior to issuing
rules, regulations, and guidelines, and it shall publish in the
Federal Register at least 30 days prior to their effective date
all its rules, regulations, guidelines, and instructions.
[audits
[Sec. 1009. (a)(1) The accounts of the Corporation shall be
audited annually. Such audits shall be conducted in accordance
with generally accepted auditing standards by independent
certified public accountants who are certified by a regulatory
authority of the jurisdiction in which the audit is undertaken.
[(2) The audits shall be conducted at the place or places
where the accounts of the Corporation are normally kept. All
books, accounts, financial records, reports, files, and other
papers or property belonging to or in use by the Corporation
and necessary to facilitate the audits shall be made available
to the person or persons conducting the audits; and full
facilities for verifying transactions with the balances and
securities held by depositories, fiscal agents, and custodians
shall be afforded to any such person.
[(3) The report of the annual audit shall be filed with the
General Accounting Office and shall be available for public
inspection during business hours at the principal office of the
Corporation.
[(b)(1) In addition to the annual audit, the financial
transactions of the Corporation for any fiscal year during
which Federal funds are available to finance any portion of its
operation may be audited by the General Accounting Office in
accordance with such rules and regulations as may be prescribed
by the Comptroller General of the United States.
[(2) Any such audit shall be conducted at the place or places
where accounts of the Corporation are normally kept. The
representatives of the General Accounting Office shall have
access to all books, accounts, financial records, reports,
files, and other papers or property belonging to or in use by
the Corporation and necessary to facilitate the audit; and full
facilities for verifying transactions with the balances and
securities held by depositories, fiscal agents, and custodians
shall be afforded to such representatives. All such books,
accounts, financial records, reports, files, and other papers
or property of the Corporation shall remain in the possession
and custody of the Corporation throughout the period beginning
on the date such possession or custody commences and ending
three years after such date, but the General Accounting Office
may require the retention of such books, accounts, financial
records, reports, files, papers, or property for a longer
period under section 117(b) of the Accounting and Auditing Act
of 1950 (31 U.S.C. 67(b)).
[(3) A report of such audit shall be made by the Comptroller
General to the Congress and to the President, together with
such recommendations with respect thereto as he shall deem
advisable.
[(c)(1) The Corporation shall conduct, or require each
grantee, contractor, or person or entity receiving financial
assistance under this title to provide for, an annual financial
audit. The report of each such audit shall be maintained for a
period of at least five years at the principal office of the
Corporation.
[(2) The Corporation shall submit to the Comptroller General
of the United States copies of such reports, and the
Comptroller General may, in addition, inspect the books,
accounts, financial records, files, and other papers or
property belonging to or in use by such grantee, contractor, or
person or entity, which relate to the disposition or use of
funds receive from the Corporation. Such audit reports shall be
available for public inspection, during regular business hours,
at the principal office of the Corporation.
[(d) Notwithstanding the provisions of this section or
section 1008, neither the Corporation nor the Comptroller
General shall have access to any reports or records subject to
the attorney-client privilege.
[financing
[Sec. 1010. (a) There are authorized to be appropriated for
the purpose of carrying out the activities of the Corporation,
$90,000,000 for fiscal year 1975, $100,000,000 for fiscal year
1976, and such sums as may be necessary for fiscal year 1977.
There are authorized to be appropriated for the purpose of
carrying out the activities of the Corporation $205,000,000 for
the fiscal year 1978, and such sums as may be necessary for
each of the two succeeding fiscal years. The first
appropriation may be made available to the Corporation at any
time after six or more members of the Board have been appointed
and qualified. Appropriations for that purpose shall be made
for not more than two fiscal years, and shall be paid to the
Corporation in annual installments at the beginning of each
fiscal year in such amounts as may be specified in Acts of
Congress making appropriations.
[(b) Funds appropriated pursuant to this section shall remain
available until expended.
[(c) Non-Federal funds received by the Corporation, and funds
received by any recipient from a source other than the
Corporation, shall be accounted for and reported as receipts
and disbursements separate and distinct from Federal funds; but
any funds so received for the provision of legal assistance
shall not be expended by recipients for any purpose prohibited
by this title, except that this provision shall not be
construed to prevent recipients from receiving other public
funds or tribal funds (including foundation funds benefiting
Indians or Indian tribes) and expending them in accordance with
the purposes for which they are provided, or to prevent
contracting or making other arrangements with private
attorneys, private law firms, or other State or local entities
of attorneys, or with legal aid societies having separate
public defender programs, for the provision of legal assistance
to eligible clients under this title.
[(d) Not more than 10 percent of the amounts appropriated
pursuant to subsection (a) of this section for any fiscal year
shall be available for grants or contracts under section
1006(a)(3) in any such year.
[special limitations
[Sec. 1011. The Corporation shall prescribe procedures to
insure that--
[(1) financial assistance under this title shall not
be suspended unless the grantee, contractor, or person
or entity receiving financial assistance under this
title has been given reasonable notice and opportunity
to show cause why such action should not be taken; and
[(2) financial assistance under this title shall not
be terminated, an application for refunding shall not
be denied, and a suspension of financial assistance
shall not be continued for longer than thirty days,
unless the grantee, contractor, or person or entity
receiving financial assistance under this title has
been afforded reasonable notice and opportunity for a
timely, full, and fair hearing, and, when requested,
such hearing shall be conducted by an independent
hearing examiner. Such hearing shall be held prior to
any final decision by the Corporation to terminate
financial assistance or suspend or deny funding.
Hearing examiners shall be appointed by the Corporation
in accordance with procedures established in
regulations promulgated by the Corporation.
[coordination
[Sec. 1012. The President may direct that appropriate support
functions of the Federal Government may be made available to
the Corporation in carrying out its activities under this
title, to the extent not inconsistent with other applicable
law.
[right to repeal, alter, or amend
[Sec. 1013. The right to repeal, alter, or amend this title
at any time is expressly reserved.
[short title
[Sec. 1014. This title may be cited as the ``Legal Services
Corporation Act''.]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Legal Aid Grant Act''.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Qualified legal service provider.--
(A) In general.--The term ``qualified legal
service provider'' means--
(i) any individual who is licensed to
practice law in a State for not less
than 3 calendar years, who has
practiced law in such State not less
than 3 calendar years, and who is so
licensed during the period of a
contract under section 4; or
(ii) a person who employs or
contracts with an individual described
in clause (i) to provide qualified
legal services.
Nothing in this subparagraph shall be
interpreted to prohibit a qualified legal
service provider from employing an individual
who is not described in clause (i) to assist in
providing qualified legal services.
(B) Not qualified.--No individual shall be
considered, or employed by, a qualified legal
service provider if such individual during the
10 years preceding the submission of a bid for
a contract under section 4--
(i) has been convicted of a felony;
or
(ii) has been suspended or disbarred
from the practice of law for
misconduct, incompetence, or neglect of
a client in any State; or
if such individual has a criminal charge
pending on the date of the submission of a bid
for a contract under section 4. In determining
whether to award a contract under section 4, a
State may also consider, to the extent the
State considers it relevant in evaluating the
qualifications of an applicant, whether an
applicant has been found in contempt of a court
of competent jurisdiction in any State or
Federal court or has been sanctioned under
Federal Rule of Civil Procedure 11 or an
equivalent State rule of procedure applicable
in civil actions.
(C) Additional requirements.--No State may
impose a requirement on an individual or person
as a condition to bidding on a contract under
section 4 or to being awarded such a contract
which requirement is different from any other
requirement of subparagraph (B).
(2) Qualified legal services.--The term ``qualified
legal services'' means--
(A) mediation, negotiation, arbitration,
counseling, advice, instruction, referral, or
representation, and
(B) legal research or drafting in support of
the services described in subparagraph (A),
provided by or under the supervision of a qualified
legal service provider to a qualified client for a
qualified cause of action.
(3) Qualified client.--The term ``qualified client''
means any individual who is a United States citizen or
an alien admitted for permanent residence who in the 3
months prior to seeking legal assistance from a
qualified legal service provider had an income from any
source which was equal to or less than the poverty line
established under section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)).
(4) Qualified cause of action.--
(A) The term ``qualified cause of action''
means only a civil cause of action which
results only from--
(i) landlord and tenant disputes,
including an eviction from housing
except an eviction where the prima
facie case for the eviction is based on
criminal conduct;
(ii) foreclosure of a debt on a
qualified client's residence;
(iii) the filing of a petition under
chapter 7 or 12 of title 11, United
States Code, or under chapter 13 of
such title unless a petition of
eviction has preceded the filing of
such petition;
(iv) enforcement of a debt;
(v) an application for a statutory
benefit;
(vi) appeal of a denial of a
statutory benefit on a statutory
ground;
(vii) child custody and support;
(viii) action to quiet title;
(ix) activities involving spousal or
child abuse on behalf of the abused
party;
(x) an insurance claim;
(xi) competency hearing;
(xii) probate;
(xiii) divorce or separation;
(xiv) employment matters; or
(xv) consumer fraud.
Additional causes of action qualify as a
qualified cause of action if they arise out of
the same transaction as a cause of action
described in this subparagraph unless such
additional causes of action are described in
clause (i) of subparagraph (B).
(B) Such term does not include--
(i) a class action under Federal,
State, or local law; or
(ii) any challenge to the
constitutionality of any statute.
(5) State.--The term ``State'' means any State of the
United States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam,
American Samoa, the Trust Territory of the Pacific
Islands, and any other territory or possession of the
United States and includes any recognized governing
body of an Indian Tribe or Alaskan Native Village that
carries out substantial governmental powers and duties.
SEC. 3. GRANTS.
(a) Grant Authority.--The Attorney General shall direct the
Office of Justice Programs to make grants to States for the
provision of qualified legal services and to insure compliance
with the requirements of this Act. To receive a grant under
this subsection a State shall make an application to the
Attorney General. Such an application shall be in such form and
submitted in such manner as the Attorney General may require.
(b) Poverty Line.--Grants shall be made under subsection (a)
to States in such proportion as the number of residents of each
State which receive a grant who live in households having
income equal to or less than the poverty line established under
section 673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)) bears to the total number of residents in the
United States living in such households.
(c) Retention of Grant Funds.--Each State may in any fiscal
year retain for administrative costs not more than 5 percent of
the amount granted to the State under subsection (a) in such
fiscal year. The remainder of such grant shall be paid under
contracts to qualified legal service providers in the State for
the provision in the State of qualified legal services. If a
State which has received a grant under subsection (a) has at
the end of any fiscal year funds which have not been obligated,
such State shall return such funds to the Attorney General.
(d) Requirements of This Act.--No State may receive a grant
under subsection (a) unless the State has certified to the
Attorney General that the State will comply with and enforce
the requirements of this Act.
(e) Limitation on Use of Grant Funds.--None of the funds
provided under subsection (a) shall be used by a qualified
legal service provider--
(1) to make available any funds, personnel, or
equipment for use in advocating or opposing any plan or
proposal or represent any party or participate in any
other way in litigation, that is intended to or has the
effect of altering, revising, or reapportioning a
legislative, judicial, or elective district at any
level of government, including influencing the timing
or manner of the taking of a census;
(2) to attempt to influence the issuance, amendment,
or revocation of any executive order, regulation,
policy, or similar promulgation by any Federal, State,
or local agency;
(3) to attempt to influence the passage or defeat of
any legislation, constitutional amendment, referendum,
initiative, confirmation proceeding, or any similar
procedure of the Congress of the United States or by
any State or local legislative body;
(4) to support or conduct training programs for the
purpose of advocating particular public policies or
encouraging political activities, labor or anti-labor
activities, boycotts, picketing, strikes, and
demonstrations, including the dissemination of
information about such policies or activities;
(5) to participate in any litigation, lobbying,
rulemaking or any other matter with respect to
abortion;
(6) to participate in any litigation or provide any
representation on behalf of a local, State, or Federal
prisoner;
(7) to pay for any personal service, advertisement,
telegram, telephone communication, letter, or printed
or written matter or to pay administrative expenses or
related expenses, associated with an activity
prohibited in paragraph (1), (2), (3), (4), (5), or
(6);
(8) to solicit in-person any client for the purpose
of providing any legal service; or
(9) to pay any voluntary membership dues to any
private or non-profit organization.
(f) Limitation on Use of State Funds.--A State which receives
a grant under subsection (a) and which also distributes State
funds for the provision of legal services shall require that
such State funds be used to provide qualified legal services to
qualified clients and shall impose on the use of such State
funds the limitations prescribed by subsection (e).
(g) Attorneys' Fees.--A qualified legal service provider of
any qualified client or any client of such provider may not
claim or collect attorneys' fees from parties to any litigation
initiated by such client.
(h) Evasion.--Any attempt to avoid or otherwise evade the
requirements of this Act is prohibited.
(i) Authorization of Appropriations.--For grants under
subsection (a) there are authorized to be appropriated to the
Attorney General $278,000,000 for fiscal year 1996,
$250,000,000 for fiscal year 1997, 175,000,000 for fiscal year
1998, and $100,000,000 for fiscal year 1999.
SEC. 4. CONTRACTS.
(a) In General.--Each State which receives a grant under
section 3(a) shall make funds under the grant available for
contracts entered into for the provision of qualified legal
services within the State.
(b) Bids.--
(1) Authority.--The Governor of each State shall
designate the authority of the State which shall be
responsible for soliciting and awarding bids for
contracts for the provision of qualified legal services
within such State.
(2) Service area.--The authority of a State
designated under paragraph (1) shall designate service
areas within the State. Such service areas shall be the
counties or parishes within a State but such authority
may combine contiguous counties or parishes to form a
service area to assure the adequate provision of
qualified legal services.
(3) Non-english-speaking clients.--If 5 percent or
more of the population of qualified clients in a
qualified legal service provider's service area
includes individuals whose household language is other
than English, the qualified legal service provider
shall include provision in the provider's bid for
satisfying the communication needs of that portion of
such population.
(c) Availability of Funds.--A State shall allocate grant
funds for contracts for the provision of qualified legal
services in a service area on the same basis as grants are made
available to States under section 3(b).
(d) Contract Awards.--A State shall award a contract for the
provision of qualified legal services in a service area to the
applicant who is best qualified, as determined by the State,
and who in its bid offers to provide, in accordance with
section 5, the greatest number of hours of qualified legal
services provided by lawyers or paralegals in such area. In
determining which applicant is best qualified, a State shall
consider the reputations of the principals of the applicant,
the quality, feasibility, and cost effectiveness of plans
submitted by the applicant for the delivery of qualified legal
services to the qualified clients to be served, and a
demonstration of willingness to abide by the restrictions of
this Act.
(e) Form and Billing.--A State contract awarded under
subsection (d) shall be in such form as the State requires. The
contract shall provide for the rendering of bills supported by
time records at the close of each month in which qualified
legal services are provided. A State shall make payment to a
qualified legal service provider at the contract rate only for
hours of qualified legal services provided and supported by
appropriate records. The contract rate shall be the total
dollar amount of the contract divided by the total hours bid by
the qualified legal service provider. A State shall have 60
days to make full payment of such bills.
SEC. 5. REQUIREMENTS FOR THE PROVISION OF QUALIFIED LEGAL SERVICES
UNDER A CONTRACT.
(a) Term.--The term of a contract entered into under section
4 shall be not more than 1 year.
(b) Manner of Provision of Services.--A qualified legal
service provider shall service the legal needs of qualified
clients under a contract entered into under section 4 in a
professional manner consistent with applicable law.
(c) Case Files.--A qualified legal service provider shall
maintain a qualified client's case file, including any
pleadings and research, at least until the later of 5 years
after the resolution of client's cause of action or 5 years
after the termination of the contract under which services were
provided to such client or as provided by the applicable code
of professional responsibility.
(d) Time Records.--A qualified legal service provider shall
keep daily time records of the provision of services to a
qualified client in one tenth of an hour increments identifying
such client, the general nature of the work performed in each
increment, and the account which will be charged for such work.
(e) Questionnaire.--Each qualified client shall be provided a
self-mailing customer satisfaction questionnaire in a form
approved by the authority granting the contract under section 4
which identifies the qualified legal service provider and is
preaddressed to such authority.
(f) Attorney Client Privilege.--Any qualified client who
receives legal services other than advice or legal services
provided by mail or telephone shall execute with respect to
such services a waiver of attorney client and attorney work
product privilege as a condition to receiving such service. The
waiver shall be limited to the extent necessary to determine
the quantity and quality of the service rendered by the
qualified legal service provider and compliance with this Act.
Such waiver shall not constitute a waiver as to other parties.
The use of such waiver or any information obtained under such
waiver for any purpose other than determining the quantity and
quality of the service of a provider or compliance with this
Act shall be strictly prohibited.
(g) Records of Qualifications.--A qualified legal service
provider shall make and maintain records detailing the basis
upon which the provider determined the qualifications of
qualified clients. Such records shall be made and maintained
for 3 years following the termination of a contract under
section 4 for the provision of legal services to such clients.
(h) Audits.--A qualified legal service provider shall consent
to audits by the Attorney General, the General Accounting
Office, or the authority which awarded a contract to such
provider. Any such audit may be conducted at the provider's
principal place of business. Such an audit shall be limited to
a determination of whether such provider is meeting the
requirements of this Act and the provider's contract under
section 4.
(i) Recovery of Fees.--A contract shall provide for the
recovery of reasonable attorneys' fees in any successful action
brought to compel payment to a qualified legal service provider
under a contract under section 4.
(j) Termination and Recovery of Funds.--The Attorney General,
the Governor, or the authority which awarded a contract shall
terminate a qualified legal service provider who is found to
have a committed a material violation of this Act. A material
violation shall include involvement with any prohibited
activity. A breach of contract by a qualified legal service
provider shall entitle the Governor or the authority to
terminate the contract, to award a new contract, and to recover
any funds improperly expended by the provider, together with
interest at the statutory rate in the State for interest on
judgments. If such a breach was willful, the provider shall pay
to the authority which awarded the contract an additional
amount equal to one half of the amount improperly expended by
the provider.
DISSENTING VIEWS
We cannot support HR. 2277, a bill that eviscerates a 30-
year federal commitment to civil legal assistance to the poor.
Without a federal program, millions of low-income Americans
will lose access to our civil justice system. This we cannot
support. Nor should the Congress of the United States.
Equal justice is a fundamental principle of our democratic
society. The Constitution, its Preamble, the Bill of Rights and
our Pledge of Allegiance all echo the founding fathers' intent
to establish justice, assure due process and equal protection
under the law, and promote liberty and justice for all. One
system of justice for the rich and a different one for the poor
is untenable in a democracy. As the Legal Services
Corporation's first president Thomas Ehrlich stated: ``All
citizens are required to live under the law, regardless of
their wealth or poverty; all citizens are entitled to use the
law as well. If they are not able to do so, the substantive
rights to which the law entitles them are a sham, and the legal
system is dangerously skewed.''
The alternative proposed by HR 2277--a limited, state run
funding program that provides, at best, fragmented services in
a few types of cases through lawyers whose hands are tied--will
not achieve equal justice. The defects in this bill cannot be
corrected by amending HR 2277 because its approach is
fundamentally flawed. HR 2277 does not ensure that services
continue to be available throughout the country, a goal of the
Legal Services Corporation Act that has largely been achieved.
Nor does HR 2277 provide legal services in numerous types of
cases where civil legal assistance is critical. The lawyers
receiving funds under this bill will be unable to practice law
for the poor as they would practice for those who can afford to
pay an attorney. Finally, there is limited accountability for
expenditure of federal funds and no responsibility to ensure
that services provided are of high quality. Ironically, and
contrary to the fundamental principles of federalism, this bill
attempts to restrict what a state can do with its own funds.
I. Background
a. need for legal services to the poor
The need for legal services for the poor could not be
clearer, and the need has never been greater than it is today.
More than 39,000,000 Americans live in households with incomes
below the poverty level. According to the recent American Bar
Association Comprehensive Legal Needs Study on the legal needs
of low and moderate income persons, nearly half of low-income
households faced problems that merited the attention of the
civil justice system. However, nearly three-fourths of low-
income people with legal needs do not get help. As former
Representative Guy Molinari stated when he testified before the
House Appropriations Subcommittee two years ago: ``We can argue
about the amount of unmet need; but I don't think there is any
dispute about the fact that there is a very substantial amount
of people out there who are, in fact, in need of civil legal
services.''
b. history of the legal services program
The first legal aid society was established in New York
City in 1876. Slowly, other such societies were formed.
However, as the number of poor persons increased and their
legal problems grew more complex, legal aid societies could not
begin to meet the needs of the poor in those jurisdictions
where they existed, nor were there consistent sources of
financial support for civil legal assistance in most areas of
the country.
In 1973, President Nixon called for the establishment of an
independent nonprofit corporation--not a Federal or State
agency--to provide financial support for legal assistance in
civil proceedings or matters to persons financially unable to
afford legal assistance. He stressed the need for a program
with independence and freedom to exercise professional
judgment. He remarked that ``legal assistance for the poor is
one of the most constructive ways to help them help themselves.
* * * that justice is served far better and differences settled
more rationally within the system than on the street. * * *
[and that it was] time to make legal services an integral part
of our judicial system.''
In 1974, Congress responded and passed--with bipartisan
support--the Legal Services Corporation Act of 1974 (P.L. 93-
355), which created a private, nonmembership, nonprofit
corporation whose main purpose was to provide financial support
to civil legal services programs for assistance to those
persons unable to afford legal services. The Corporation is not
a department, agency, or instrumentality of the Federal
Government and was established to be independent of the
Executive Branch so that legal assistance would be insulated
from partisan pressures and would be delivered based on locally
determined priorities and the independent professional judgment
of the legal services attorneys and other providers. The
Corporation, however, was accountable to Congress through the
process of periodic reauthorization and annual appropriations.
c. structure of the legal services corporation and its recipients
The Corporation is governed by an 11-member Board of
Directors appointed by the President with the advice and
consent of the Senate. No more than six members may be from the
same political party, and none may be Federal government
employees. A majority of the Board must be members of the bar
of the highest court of a State, and at least two must be
eligible clients.
The Board oversees a staff of less than 110 employees who
administer and oversee a legal services delivery system that
employs 11,000 lawyers, paralegals and support staff. Only 3%
of the Corporation's budget is spent on administrative
functions. The remaining 97% is channeled directly to the
communities where legal services are delivered to people in
need.
The Corporation does not directly represent clients; rather
it provides funds to local programs to support their provision
of legal services. With only a few historical exceptions,
funding on a local level has been through a single recipient in
a geographic service area, although separate Native American
and migrant farmworker programs were determined to be necessary
to address their unique and special legal problems. At the end
of fiscal year 1994, there were 323 legal services programs
throughout the 50 States, the Virgin Islands, the District of
Columbia, Puerto Rico and Micronesia. They operated over 1200
community-based law offices in every county in the country.
Each program sets its own priorities for services based on
an assessment of client needs and available resources in the
local community. Reliance on locally determined policies rather
than nationally set priorities has been a hallmark of the legal
services program and a major reason for its continued success.
d. delivery of legal services
1. What legal services programs do
Of the 1,686,313 cases closed by legal services programs in
1994, only 8 percent were litigated and only one-tenth of one
percent were class actions. The other matters were handled
outside the courtroom through counseling, negotiation and other
means. The representation provided to poor persons was in a
variety of categories of cases:
On a national basis, family matters made up 33.2 percent of
total closed cases, consisting of adoption, custody, divorce,
support, parental rights, spouse abuse and other family-related
matters.
Income maintenance and housing matters comprised 16 and
22.2 percent, respectively.
Consumer matters made up 10.6 percent, consisting of
contracts, warranties, credit matters, debt collection and
sales practices, as well as public utilities and energy-related
issues.
Education, juvenile, health, individual rights, and
employment matters constituted 10.5 percent.
Miscellaneous matters, such as tort defense, tribal
matters, wills, and auto licenses, made up the remaining 7.5
percent.
As is clear from these figures, the vast majority of cases
handled by legal services programs do address the basic legal
needs of poor people. These cases often represent matters of
grave crisis for individual clients and their families, such as
the loss of a family's home or its only source of income or the
break-up of the family itself. Left unresolved, such problems
can cost society far more than the costs of legal services to
help address them.
Obtaining child support from absent parents, for example,
can prevent single parents and their children from being forced
to turn to welfare to meet their needs. In 1994, LSC attorneys
handled over 50,000 child support cases.
Spousal abuse causes not only individual suffering, but
enormous societal costs as well. In 1994, legal services
recipients handled 52,000 cases in which individuals sought
legal protection from violent spouses. Domestic violence was
also a factor in a significant percent of the 56,326 divorce
and separation cases that resulted in a court decision.
Legal services programs have helped individuals from
falling into dependency by resolving employment disputes, by
saving small family farms, by preventing the loss of the car
that the client needed to drive to work or the equipment needed
to earn a livelihood. They have helped young people remain in
school and get access to job training programs. They have
helped veterans suffering from Agent Orange and post-traumatic
stress disorder. They have protected vulnerable elderly people
from consumer fraud. They have provided assistance to victims
of hurricanes in Florida, floods in the Midwest, earthquakes in
California and the bombings in Oklahoma City. Indeed, as the
General Counsel for the Federal Emergency Management Agency
stated before this Committee in May: ``Legal Services
organizations play a fundamental role in disaster recovery.
Indeed, they are an important part of the comprehensive
response and recovery approach that is composed of federal,
state and local governments and community based
organizations.''
2. What legal services cannot do
The LSC Act, appropriations provisions and LSC regulations
contain a number of explicit prohibitions and restrictions on
the activities of legal services programs. Recipients cannot
provide representation in criminal, redistricting, abortion,
school desegregation, military and selective service cases.
Only U.S. citizens and legal aliens can be represented. Class
actions can only be brought after other approaches to settling
the problem have been exhausted and only with the explicit
approval of the project director under guidelines issued by the
local boards of directors. Grassroots lobbying, advocacy
training and organizing are prohibited. Representation before
legislative bodies is limited to communicating about a client's
problem only after all administrative and judicial remedies
have been exhausted and with approval of the project director
under guidelines adopted by the program's board. Corporation
funds cannot be used for self-held lobbying. Recipients cannot
participate in any way on constitutional amendments,
referendums and ballot initiatives. Recipient staff cannot
engage in voter registration or partisan political activity and
staff attorneys cannot seek partisan elected office.
There is virtually no evidence, and none has been provided
in the hearings before this committee, that legal services
attorneys are violating the current restrictions imposed by law
and regulation. The so-called ``horror stories'' dredged up by
critics are riddled with factual inaccuracies. Recipients are
living within the rules. Monitoring by LSC staff appointed
during the Reagan Administration never produced any systemic
evidence that the Act and regulations were being violated.
Congress can decide what activities to prohibit. When it
has done so, legal services has stayed within the letter and
spirit of the law.
It is one thing to argue for additional prohibitions; it is
entirely another to claim that legal services should be
dismantled because recipients engage in activities that
Congress had not prohibited.
3. Staffing
Most legal services programs rely primarily on staff
attorneys and paralegals to provide legal representation to the
program's clients. In 1994, the last year for which statistics
are available, legal services programs employed approximately
4793 full-time (or full-time equivalent) attorneys and 1934
paralegals. These talented and committed people have developed
expertise and accumulated institutional and community knowledge
that cannot be replaced. They work at low salaries under often
difficult conditions. In 1994, the average entry level salary
for a legal services attorney was $25,337, in comparison to
$34,295 for an entry-level attorney in the Department of
Justice and more than $80,000 in many major law firms.
4. Private attorney involvement
Since the beginning of the legal services program there has
been a steady increase in the involvement of private attorneys
in the delivery of legal services to the poor. Today, at least
12.5% of a recipient's annual basic field grant must be devoted
to private attorney involvement activities.
The Deputy Attorney General described in her testimony the
critical role of local recipients which ``serve as a hub, and a
magnet, for marshaling pro bono legal services by private bar
members.'' These efforts involve private attorneys through
organized pro bono programs, contracts, reduced-fee panels,
referral lists, judicare and other locally-determined
arrangements. More than 130,000 lawyers are registered as
volunteer attorneys in organized pro bono programs. Last year,
they handled over 250,000 cases. In addition to coordinating
and increasing the involvement of private attorneys in the
delivery of pro bono legal services, legal services recipients
also provide valuable training to bar members so they can
handle additional cases under the auspices of the pro bono
program or on their own. By providing a framework and a
mechanism through which non-program legal providers can channel
their efforts, local legal services programs provide fertile
ground for private bar and local community involvement.
II. Programs With the Judiciary Committee Bill
a. elimination of the legal services program
The Committee bill is designed to both abolish the Legal
Services Corporation and phase out, over a period of four
years, the federal commitment to fund legal services for the
poor. We do not believe that states or the private bar will be
able to fill this gap.
The federal program began precisely because certain states
failed to address the legal needs of their low income resident.
The American commitment to equal access to justice should not
be dependent on where an individual lives, anymore than on
income.
Most pro bono activity is dependent on the existence of an
integrated network of legal services providers that are
available to screen clients for eligibility, develop cases,
make referrals of clients to appropriate and willing private
lawyers, provide training and co-counseling assistance on
complex poverty law issues, as well as keep track of cases and
generally administer the pro bono programs. Even assuming pro
bono services could continue in the vacuum created by
dismantling the current system, it is simply unrealistic to
presume that enough pro bono private attorney time could be
made available to make up for the loss of more than 6,000
attorneys and paralegals who now devote their full-time
energies to servicing the legal needs of the poor.
While IOLTA (interest on lawyer's trust accounts) now
yields approximately $100 million per year to support legal
services, the program has reached its outer limits of expansion
and will be constrained by the vagaries of low interest rates,
high bank fees and unpredictable variations in the business
cycle. IOLTA is not an elastic resource, and cannot be readily
increased to make up for a loss of federal funds. In addition,
many states are eyeing IOLTA as a possible source of funding to
meet other pressing needs, e.g. to fund the courts or support
criminal defense representation.
As we will detail below, this bill will limit the providers
who can provide civil legal services, eliminate funding for key
components of the delivery system, impose artificial
limitations on the clients who can be served and the services
that can be provided, and inflict far more restrictions and
prohibitions on activities than are necessary to ensure the
delivery of high quality, professional representation. The
funding mechanism proposed will cause huge administrative costs
without any provision for effective accountability and no
provision for review and oversight of quality. States will have
their own funds severely limited if they accept any federal
funds, thus further impeding the ability to provide a full
range of civil legal assistance to the poor. The competitive
bidding system proposed will not work and will only result in
poor quality representation at higher costs. For these and
other reasons, this bill will work against ensuring that civil
legal services continues to be available to our nation's poor.
Of course, both within the Congress and without, some will
support this bill as merely a cynical and disingenuous ploy.
There are people in this nation who believe that poor people
deserve only the legal representation they can pay for, and
there are others who simply do not wish poor people to have
representation at all where that representation is likely to
impinge on the prerogatives and privileges of special
interests. In our view, justice is not served when such views
prevail.
b. limitations on providers
While the Subcommittee Chairman stated at the Committee
mark-up that existing legal services programs would be eligible
because nonprofit corporations are considered to be ``persons''
under the law, five other provisions in the bill will create
significant barriers to participation both for legal services
programs and for other lawyers and law firms.
First, under Section 2, paragraph (1) of HR 2277, providers
who bid for legal services contracts from the States are
subject to minimal requirements. The Committee bill imposes no
requirement that providers have any knowledge of legal needs of
poor people or any past experience in delivering the kinds of
services to be provided under the contract. It does not take
into account conflicts of interest that may exist between a
particular bidder and the clients who would be served under the
contract. Under subparagraph (C), States are not permitted to
impose additional requirements on providers as a condition of
bidding or awarding grants. The process could easily become a
patronage mill for well connected attorneys.
Under Section 4(e), the Committee bill requires that states
use a system of cost reimbursable contracts under which they
have 60 days to make reimbursements. Such a system will limit
the entities that are likely to bid for the contracts and make
it almost impossible for a new entity without substantial
outside funding to submit a bid, since it would have no funds
to hire, equip and pay staff to deliver the services for which
reimbursement would be sought. An existing recipient without a
large fund balance or private resources would have difficulty
supporting the staff to provide services under a contract until
the invoices are paid.
Section 5(a) establishes a one year limitation on contracts
with no expectations or assurance of refunding. This limitation
will make it even more unlikely that many will bid on these
contracts, since they would not provide any reliable source of
income and support in the long term. If the demand for services
is higher than expected and funds run out before the end of the
contract term, the provider has nowhere to turn for money to
complete pending cases and to meet the legal needs of eligible
clients for representation in new matters. In order to meet
their ethical obligations to clients with pending cases,
providers would have to finish the representation without
further compensation, or seek to extract fees from clients who
are, by definition, too poor to pay for legal services. Clients
with new problems would have to find pro bono help on their own
or wait until the next year's contract is awarded to get help.
Section 5(j) includes no meaningful protections for
providers against wrongful termination of contracts. If the
state or the Attorney General determines that a legal services
provider has violated the Act, the state can terminate the
contract, recover funds determined to have been spent
improperly and assess attorneys' fees and damages against the
provider. The bill provides no hearing rights or appeal. There
is no protection for attorneys or programs that, in the course
of zealously representing their poor clients, offend the state
or powerful private interests.
Finally, Section 5(h) requires providers to consent to
audits by the Attorney General, GAO and the authority which
awarded the contracts, presumably the state, tribe or Native
Alaskan Village. Few private attorneys or law firms are likely
be willing to take these funds for a one year contract if to do
so would subject their practices to so many potential
disruptive and intrusive audits. This is especially true in
light of the fact that the bill includes no time limit on the
period beyond the end of the contract term during which a
former provider would continue to be subject to audit.
c. limitations on funding for migrants and support services
Under HR 2277 there is no funding designated for support
services or migrant representation.
1. Migrant programs
In 1980, the Corporation completed a study of access
problems of migrant farmworkers as well as other groups
required by Section 1007(h) of the LSC Act. That study found
that (1) migrant workers encounter special barriers which
severely restrict their ability to access legal assistance
through the regular basic field programs and (2) that migrants
face specialized legal problems which are very different from
those ordinarily faced by basic field clients. As a result, LSC
continued and expanded the existing system of specialized
migrant legal services programs because it was the most
efficient and effective way to overcome these special access
barriers and address the specialized legal needs of migrants.
Unless there is funding designed for migrant farmworkers or
additional changes in the legislation, it will be very
difficult for states to set up a migrant legal services
program. In addition to the access barriers and special legal
problems which make it difficult to deliver legal services to
migrants through a general delivery system, the funding formula
used to determine populations to be served does not work for
migrants. Because migrant labor camps are often extremely
inaccessible, migrant farmworkers have been historically
undercounted in the Census. Perhaps more important, they are
included in Census only in the area where they happen to be
when the count is taken. Since, by definition, migrant
farmworkers move from place to place to follow the harvest, the
area where they were counted is unlikely to be where they are
when their legal problems arise, so no money would be available
for their representation in the area where it is needed. While
states would not be precluded from funding a migrant program to
deliver services in counties where there are large
concentrations of migrant farmworkers, it is very unlikely that
states would fund such a program from their limited state
allocations particularly where migrants are only in the county
during brief periods during the year.
2. Support services
Currently, the Corporation funds 16 national support
centers and a support effort in each state, as well as training
programs, a National Clearinghouse and other support
activities. With reduced funds, there will be changes in
support. However, particularly if new attorneys with limited
poverty law expertise are going to be delivering services in
the future, it is critically important that some funding be
available for support services. Such front-line attorneys will
need expert advice and assistance, experienced guidance and
timely and current information in a cost-effective manner on
critical poverty law matters that such attorneys confront as
they provide advice and representation to their clients. No
provision is made in the bill for such critical services.
Moreover, because of the restrictions on the use of other state
funds found in Section 3(f), H.R. 2277 could be interpreted to
eliminate any discretion for states to use any other funds for
support activities. Such an outcome would be a terrible
mistake.
In order to remedy these problems, the bill should specify
that support services, such as training, technical assistance
and clearinghouse activities, could be funded. H.R. 2277 should
also permit both states and the Attorney General to set aside
funds for funding of a migrant program. In addition H.R. 2277
should clarify that states can use their own funds for funding
of migrant programs and support services.
d. limitation on clients who can be served
Section 2, paragraph (3) of the Committee bill permits
providers to serve only those individual citizens and permanent
resident aliens whose incomes are equal to or less than the
poverty line. Under the current LSC Act and regulations, a
client whose income is equal to or less than 125% of the
poverty line is eligible for services and exceptions can be
made under certain circumstances for poor people whose incomes
are marginally higher. Many of those people whose incomes are
slightly above the poverty line are members of the working
poor, whose full-time, minimum wage jobs do not provide
sufficient income to raise them out of poverty. Thus, under the
Committee bill, many poor people now served by the legal
services program would be ineligible for service and would have
to forego representation or pay for it out of their already
inadequate wages. Also, under H.R. 2277, both state and federal
funds are restricted to fund services only to citizens and
permanent resident aliens, leaving many aliens who are in this
country legally--such as refugees--and who were previously
served by legal services programs with either state or federal
funds without access to legal representation.
Finally, H.R. 2277 does not permit the provision of legal
assistance to any group or entity, such as a tenant association
or an alliance of small businesses in a community, that might
need legal help to rid a building of drug dealers or to
encourage investment and job creation in a community.
Activities such as these can often do more to improve living
conditions for poor people in a community than individual
representation on the kinds of matters envisioned under the
Committee bill.
e. limitations on services provided and cases brought
The majority has identified a range of cases brought by
current recipients of LSC funds that it finds offensive and
characterizes to be abuses. Not content to prohibit the cases
that it finds offensive, the majority has taken an extreme
position in this bill, by limiting legal services providers to
a narrow range of fifteen permissible case types (``qualified
causes of action'') found in Section 2, paragraph (4) and ten
permissible activities (``qualified legal services'') that can
be undertaken on behalf of poor clients, found in Section 2,
paragraph (2). Additional causes of action can only be brought
if they ``arise out of the same transaction as'' one of the
qualified causes of action. There is no comparable mechanism to
permit any other activities that may be necessary to address
the legal needs of poor clients.
The fact that at mark-up the Committee voted to add several
additional case types to the list of qualified causes of
action, merely illustrates what is fundamentally wrong with the
approach contained in the Committee bill. No list formulated in
Congressional offices can begin to catalog the myriad of legal
problems faced by poor people throughout the country in their
everyday lives. What sense does it make to allow Legal Services
to probate a will but not to help a poor person prepare a will?
Adoption, paternity, refinancing a home or family farm are
among the excluded cases. This list could be expanded ten-fold
and would still exclude an enormous range of critical problems
that can only be addressed through legal representation. By
adopting an approach that identifies what is permissible and
excludes everything else, HR 2277 substitutes the judgment of
Congress about what is important for that of the local
communities where the needs are felt and confronted every day.
It completely eliminates local control over allocation of
resources and eliminates any ability to deal with locally
identified needs and priorities.
f. prohibitions on the use of grant funds
In addition to identifying those causes of action that are
permissible, the Committee bill includes two lists of actions
and activities that are explicitly prohibited under the Act.
While the members of the minority may quarrel with the specific
items included in those lists, we firmly believe that, rather
than limiting the program to particular services and cases, the
appropriate approach to deal with perceived abuses of the legal
services program is to specifically prohibit those activities
that Congress finds offensive, as is done in Section 2,
paragraph (4)(B) [class actions and constitutional challenges]
and Section 3(e), subsections (1) through (9) [redistricting,
administrative advocacy, legislative advocacy, public policy
advocacy training, abortion, prisoner representation,
solicitation and payment of voluntary membership dues to any
private organization].
However, we do have serious reservations and objections to
some of the particular prohibitions as well as concerns about
the actual language used.
1. Prohibiting constitutional claims
H.R. 2277 as introduced specifically excluded any challenge
to the constitutionality of any statute, a provision that
unconscionably would deny low income Americans the protections
of the Constitution. Although members of the minority proposed
an amendment that would have removed this prohibition, the
substitute language that was adopted by the Committee does not
fully address the issue and may invite confusion.
2. Class action ban
We believe the total ban on class actions is unreasonable.
Unlike HR 1806, the McCollum-Stenholm bill, which permits a
program to bring class actions under certain narrow conditions,
HR 2277 bans all class actions under any circumstances.
However, many legal problems of the poor, just like those of
the affluent, are better resolved by proceeding as class
actions. A class action is merely a procedural device to seek a
legal remedy for many individuals who are in the same
situation. Instead of doing it in many lawsuits, all of the
plaintiffs join together to file one lawsuit--which makes
litigation more cost effective and efficient. It does not
change what the plaintiffs have to prove to prevail. Under the
rules of all state and federal courts, the court closely
supervises and controls the class action process from beginning
to end.
3. Representation before administrative and legislative bodies
We also object to the total ban on legislative and
administrative advocacy found in Section (3)(e), subsections
(2), (3) and (7). We firmly believe that as legislators and
administrators revise and craft complex laws, regulations and
policies that affect poor people, they should have the benefit
of the knowledge and expertise of legal services providers.
During the 1980s. Congress succeeded in crafting a set of
restrictions on legislative and administrative advocacy that
have worked effectively to ensure that legal services advocates
speak for their clients and not for themselves when they
advocate before Congress, state legislatures and administrative
agencies. At the very least, legal services advocates should be
permitted to respond to requests of agency officials and
elected representatives for information about the proposals
they are considering--advice that proved invaluable to FEMA
disaster relief efforts, according to testimony received by the
Committee.
4. Training
Section 3, paragraph (4), the public policy advocacy
training provision, is subject to an interpretation that would
preclude the expenditure of both federal and state funds for
routine training activities. Unlike HR 1806 and current
training prohibitions, HR 2277 makes no exception for training
of attorneys and paralegals. Because the provision bans the
dissemination of information about particular public policies,
it could be interpreted to prevent dissemination of information
about current laws or regulations, which have been defined in
the past by LSC as ``particular public policies.'' While we
presume that the Committee did not have this in mind, the
language needs to be clarified to avoid an unintended result.
g. role of the attorney general and the states
Under HR 2277 the administration of this program would be
parceled out to the Justice Department, more than 50 state and
territorial governments, as well as countless tribal
governments and Alaskan Native American Villages. No provision
is made to ensure that a system is set up to monitor for
compliance or to ensure the quality and effectiveness of legal
services delivery. No guaranty is included that federally
funded legal services would continue to exist in every
jurisdiction across the country.
HR 2277 permits a state to refuse its allocation of federal
funds, either because it does not wish to provide for legal
services or, more likely, it does not wish to undertake
administrative responsibility for the program, accept funds
that are so restricted or restrict its own state legal services
funds. If a State refuses federal funds, poor people in that
state will be denied the benefit of federally supported legal
services. In some states, where other resources are not
available, this may result in no legal services at all being
available to poor people.
HR 2277 would require the creation of hundreds of new
State, tribal and Native Village bureaucracies to administer
each jurisdiction's program, and allots up to five percent,
rather than the current three percent, to run them. The
Committee bill also gives the Justice Department's Office of
Justice Programs new administrative and compliance
responsibilities, but provides no new resources to pay for
them. The Bill assigns no responsibility and creates no
mechanism for evaluating the quality or effectiveness of legal
services delivery and provides for termination of contracts
only for violations of the Act. The Committee bill thus
transforms a streamlined and efficient administrative structure
into a complex array of separate bureaucracies that together
will eat up far more than the five percent allocated in the
bill. Inevitably, the increased administrative costs will be
borne either by the taxpayers of each jurisdiction that is
involved in the program, including the federal taxpayers who
support the Justice Department, or by poor people because the
amount of funds available for direct delivery of legal services
will be further reduced. And HR 2277 cannot guarantee that the
services it supports are high quality and effective.
While the Committee bill gives compliance authority to both
the States and the Justice Department, it is not at all clear
how accountability for the use of both federal and state legal
services funds will be monitored and enforced. For example, can
the Justice Department look at the compliance of individual
contracts or just actions of States? Does the Department of
Justice have authority to second-guess compliance
determinations made by States? Does the Attorney General really
have the authority to terminate an individual contract, as the
bill seems to suggest? Is there any basis on which the Attorney
General can refuse to provide a funding allocation to a State?
While it is clear that states have the authority to solicit
bids, select providers and award contracts, their discretion is
severely limited by restrictive language in the legislation
including: (1) the restrictions on what services and cases can
be funded; (2) the limitation on the selection of providers to
the criteria stated in the Act; and (3) the prohibition on
states from taking into consideration additional criteria that
might be needed to address particular state or local concerns.
h. limitations on the use of state legal services funds
Perhaps the greatest and most outrageous restriction on a
state's discretion under this bill is limitation imposed on the
use of a state's own legal services funds.
If a State takes the federal legal services funds provided
under HR 2277, its own state legal services funds may then only
be used to fund the same limited ``qualified legal services''
on behalf of the same limited pool of ``qualified clients''
subject to all of the same prohibitions that are contained in
the bill and apply to federal funds. Under the language of the
Committee bill, these limitations could even be read to apply
to all state legal services funds, even if those funds go to
providers who do not also receive federal funds provided under
the bill! Thus, if a State agrees to take its allocation of
federal funds, it could be effectively tainting all of its own
legal services funds with the same restrictions that apply to
federal funds allocated to that State, regardless of who uses
those funds. If the bill were to be interpreted in this way,
the only way for a State to avoid the federal restrictions
would be to refuse to take the federal funds. Clearly, poor
people in those states that do not take the federal funds will
suffer a severe diminution in the resources otherwise available
to assist them with their legal needs. This result is not mere
speculation. Several governors have already stated that they
would not take the funds under these constraints.
The Committee has overreached with this provision far
beyond what can be justified by reference to any need to ensure
that federal funds not be used to subsidize improper activity.
Clearly Congress has the right to restrict the use of federal
funds by any state or contractor. But no other block grant
proposal prohibits states from using their own funds in any
manner they wish. Congress should not restrain a state from
funding a program to provide legal services when that program
receives no federal support. If the provision is read in this
way, it flies in the face of current efforts to give the states
more room for innovation and creativity in meeting local needs.
The purpose appears to be a transparent effort to simply
prevent poor people from exercising their rights under the
Constitution and the laws of this country, and the effect will
be that far fewer resources will be available to protect and
enforce those same legal rights.
i. competitive bidding
Under the Committee bill, states would use a system of
competitive bidding to award one year contracts. The system
encourages low cost over other factors related to quality and
effectiveness,\1\ and permits the use of political patronage in
awarding contracts. The bill does not permit the consideration
of actual or potential conflicts of interest in deciding who is
to be awarded contracts to provide service. Because the bill
does not require providers to have any experience with or
knowledge of poverty law or legal services to the poor, the
system permits funding of relatively inexperienced individual
attorneys, law firms or corporate entities. The short terms
discourage the development of expertise in poverty law issues.
\1\ Without significant changes, HR 2277 will encourage the very
problems which have arisen in bidding for contract defense services.
Testimony provided by Robert L. Spangenberg, a nationally recognized
expert on indigent criminal defense services, in Hearings before the
Subcommittee on Administrative Law and Governmental Relations (May 9
and 3, 1990, pp. 89-118), pointed out that in contract defense bidding
initial low-ball bids were the norm. Over time, costs rose
substantially and the quality of representation significantly
deteriorated. In fact, under the contract system, the costs rose to a
level that exceeded both that of the public defender and assigned
counsel. In addition, the most qualified and experienced practitioners
dropped out of the system and were ultimately replaced by recent law
graduates and marginally competent criminal attorneys. Instability
among providers increased, resulting in the dismantlement of effective
public defender programs (which later had to be reinstated because they
proved to be more effective and efficient providers than the
contractors that had replaced them.) Funding sources experienced
substantial administrative costs necessary to process the bids and to
negotiate the contracts. Finally, in a number of states, the courts
held the contract defense bidding system unconstitutional. See, e.g.,
State of Arizona v. Smith, 140 Ariz. 355 (1984).
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Because the Committee bill requires a new competition each
year, the system will be in constant state of chaos,
guaranteeing that poor people will be ill-served and that
precious resources will be wasted as states are forced to run
constant solicitation, bidding and contract award processes.
And after the first six months, the bill makes no provision for
transition or completion of pending cases when a new provider
is awarded a contract at the conclusion of a contract term.
j. waiver of attorney-client and work product privilege
Under the Committee bill, clients who receive more than
advice services by mail or telephone, would be required to
execute a waiver of the attorney-client and attorney work
produce privilege as a condition to receiving such services.
The waiver would be limited to the extent required to determine
quantity, quality of service and compliance with Act, and the
waiver could not be used by third parties. However, the waiver
would permit a state agency or the Justice Department to review
client files, even if the United States or the state were the
defendant in a case. The limitations contained in the bill
provide no real protection against misuse.
The Committee bill presumes that a client can waive the
attorney work-product privilege. However, that privilege
belongs to the attorney, and is not the client's to waive. It
was created to ensure that justice was served by encouraging
lawyers to engage in full and thorough preparation of client's
cases. It protects from discovery a lawyer's thoughts,
theories, impressions and strategies, as well as the specific
documents, letters, interview notes, memoranda and other
tangible items that are assembled in the course of
representation. Obviously, it does not protect documents that
have been filed in court or are otherwise a matter of public
record.
The minority believes that in most instances compliance
with the requirements of a contract and the Act can be ensured
without access to confidential documents and information that
either the client or the lawyer would have protected.
k. prohibition on attorneys' fees
Under HR 2277 legal services providers would be prohibited
from claiming or collecting attorneys' fees from parties in
litigation with any of the providers' clients. Under the
language of the bill, this prohibition could be read to apply
not just to clients whose legal services are covered by the
contract, but to all of the provider's private clients as well.
Such a restriction would eliminate an important source of
additional funds to support the provision of legal services to
the poor. In addition, it would undermine one of the primary
purposes of the fee-shifting statutes, i.e., to punish
wrongdoers who have violated the rights of persons protected
under the statutes. Assuming that the prohibition does apply to
all of an attorney's practice, it would also be a significant
disincentives to private attorneys who might otherwise be
inclined to seek contracts to handle cases on behalf of the
poor.
In closing, we urge our colleagues to reject HR 2277. As
Attorney General Janet Reno and Counsel to the President Abner
Mikva wrote to the Committee:
The Legal Aid Act of 1995 makes a mockery of the
essential American principle ``Equal Justice Under
Law.'' If enacted, the bill will mean for millions the
loss of effective, community based legal services and
the certainty of continuing and aggravated problems
that will cost us dearly in other ways down the line.
John Conyers, Jr.
Pat Schroeder.
Barney Frank.
Charles E. Schumer.
Howard L. Berman.
Rick Boucher.
John Bryant.
Jack Reed.
Jerrold Nadler.
Robert C. Scott.
Melvin L. Watt.
Xavier Becerra.
Jose E. Serrano.
Zoe Lofgren.
Sheila Jackson-Lee.