[Federal Register Volume 88, Number 205 (Wednesday, October 25, 2023)]
[Proposed Rules]
[Pages 73303-73305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-23568]


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LEGAL SERVICES CORPORATION

45 CFR Part 1638


Restriction on Solicitation

AGENCY: Legal Services Corporation.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule revises the Legal Services Corporation (LSC 
or Corporation) regulation prohibiting solicitation of clients. LSC 
proposes to add definitions for ``communicate'' and ``communication,'' 
revise the existing text to make language more active, and clarify how 
recipients may interact with client-eligible individuals. The main goal 
of these revisions is to formalize the interpretations that the Office 
of Legal Affairs has issued over the past several years, making clear 
that recipients may inform client eligible individuals about their 
rights and responsibilities and provide them with information about the 
recipient's intake process, as well as how recipients may relay that 
information without violating either LSC's Fiscal Year 1996 
appropriations statute or LSC's regulations.

DATES: Comments must be submitted by December 26, 2023.

ADDRESSES: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include ``Comments on 
Revisions to Part 1638'' in the subject line of the message.
     Mail: Elijah Johnson, Assistant General Counsel, Legal 
Services Corporation, 3333 K Street NW, Washington, DC 20007, ATTN: 
Part 1638 Rulemaking.
     Hand Delivery/Courier: Elijah Johnson, Assistant General 
Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 
20007, ATTN: Part 1638 Rulemaking.
    Instructions: Electronic submissions are preferred via email with 
attachments in Acrobat PDF format. LSC will not consider written 
comments sent to any other address or received after the end of the 
comment period.

FOR FURTHER INFORMATION CONTACT: Elijah Johnson, Assistant General 
Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 
20007; (202) 295-1638 (phone), or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On April 26, 1996, Congress passed the appropriations act for 
Fiscal Year 1996. Public Law 104-134, 110 Stat. 1321. Through this 
statute, Congress enacted a series of restrictions applicable to LSC 
grant recipients' activities. One of the restrictions was section 
504(a)(18), which states that grant recipients

will not accept employment resulting from in-person unsolicited 
advice to a nonattorney that such nonattorney should obtain counsel 
or take legal action, and will not refer such nonattorney to another 
person or entity or an employee of the person or entity, that is 
receiving financial assistance provided by the Corporation[.]

Public Law 104-134, 110 Stat. 1321, 1321-56.
    On May 19, 1996, the Operations and Regulations Committee of the 
LSC Board requested LSC staff to prepare an interim rule to implement 
section 504(a)(18), and in April 1997, LSC promulgated part 1638. 
Consistent with section 504(a)(18), LSC's rule prohibited a grant 
recipient from representing an individual who had not sought legal 
advice from the grant recipient but was advised to seek legal 
representation or take legal action by the grant recipient. Part 1638 
also prohibits grant recipients who have given in-person unsolicited 
advice to an individual from referring the individual receiving the 
advice to

[[Page 73304]]

another LSC grant recipient. Id. Finally, LSC included language in part 
1638 stating that providing legal information, including information 
about the availability of counsel and a grant recipient's intake 
procedures, are permissible activities. 45 CFR 1638.4(a).
    The broad definition of ``in-person'' may restrict more conduct 
than Congress intended when it enacted the prohibition on client 
solicitation. Section 504(a)(18) applies only to ``in-person advice.'' 
It does not mention ``personal encounters via other means of 
communication,'' which part 1638 does. 45 CFR 1638.2(a). Congress 
appears to have based section 504(a)(18) on ABA Model Rule 7.3, which 
generally prohibits ``in-person, live telephone, or real-time 
electronic communications.'' Model Rule 7.3 also prohibits solicitation 
through ``written, recorded or electronic communications,'' but only 
when such communications are abusive. Thus, part 1638's inclusion of 
``a personal letter'' in the definition of ``in-person'' goes beyond 
the statutory language of section 504(a)(18) and the use of the same 
term by ABA Model Rule 7.3. The ABA updated Rule 7.3 in 2013. The 
changes, among other things, added electronic communications and 
reinforced the distinction between in-person contacts and written 
contacts (an electronic contact is in the same category as an ``in-
person'' contact only when it is a ``real-time electronic contact.'').
    The regulation's existing language has caused grantees to question 
whether they can provide information about the individuals' legal 
rights and the availability of legal assistance through texts, phone 
calls, and in-person contacts at court clinics. Over the years, OLA has 
received multiple inquiries from grant recipients and other 
stakeholders about what proposed outreach activities are permissible 
under part 1638. Some of the examples include:
     sending text messages explaining defendants' rights to 
unrepresented individuals in eviction cases;
     informing individuals of the availability of legal 
assistance via mailings and text messages; and
     individuals approaching grant recipient attorneys at 
court-based self-help clinics.
    In July 2003, OLA published an advisory opinion answering a 
question from the Northwest Justice Project (``NJP''). NJP asked 
whether they could hand out informational brochures to individuals in 
the courthouse as part of their administration of the Housing Justice 
Program (``HJP''). The HJP provided same-day advice and representation 
from volunteer attorneys to LSC-eligible clients in eviction 
proceedings in court. The previous coordinator of the HJP, a non-LSC-
funded organization, contacted prospective clients at the courthouse, 
advised them of the availability of services, asked if they would like 
to discuss their case with a lawyer, and represented some the same day. 
Upon assuming operation of the program, NJP stopped engaging in direct 
contact and submitted its inquiry to LSC. NJP contacted LSC because it 
was concerned that the lack of direct client engagement had led to a 
decline in the usage of HJP services. LSC confirmed that under part 
1638, it would be impermissible for NJP to communicate with prospective 
clients at the courthouse to advise them of the availability of legal 
services and ask individuals if they wanted to discuss their case with 
a lawyer and then accept those individuals as clients. EX-2003-1011, 
June 9, 2003. This advisory opinion remained LSC's position until 2016.
    In 2016, OLA received a question from a law professor who was 
researching methods for increasing the likelihood that individuals 
living in poverty would engage with the legal system, including by 
seeking free legal services. The study proposed to test the 
effectiveness of different types of mailings sent to defendants in debt 
collection cases. The professor asked OLA whether part 1638 prohibits a 
grant recipient from representing individuals to whom the grant 
recipient has mailed information regarding their rights and identifying 
the types of legal services provided by the grant recipient. AO 2016-
001. OLA opined that a mailing from an LSC grant recipient would 
violate part 1638 if it provided (1) ``unsolicited advice'' and (2) 
constituted a ``personal letter.'' Id. OLA also stated that a mailing 
that contains only ``information regarding legal rights and 
responsibilities or . . . information regarding the recipient's 
services and intake procedures'' does not constitute ``unsolicited 
advice.'' Further, a mailing does not constitute a ``personal letter'' 
if the letter provides only generic information that is not tailored to 
the individual receiving the mailing and it does not include specific 
facts related to the individual's legal issues. Id. OLA concluded that 
a mailing that contains unsolicited advice that is not tailored to the 
individual receiving the mailing is not considered a ``personal 
letter'' under Sec.  1638.2(a). Id.
    In 2020, OLA issued an advisory opinion about part 1638 that 
addressed a question involving the permissibility of a grant recipient 
representing individuals that it had either (1) contacted over the 
telephone or via text message; or (2) initiated contact with through 
the grant recipient's ongoing presence in the courthouse. Regarding in-
person contact in courthouses, OLA confirmed that part 1638 does not 
prohibit a grant recipient from initiating contact with individuals if 
the grant recipient is providing ``information regarding legal rights 
and responsibilities'' or providing information about the grant 
recipient's intake process while ``. . . maintain[ing] an ongoing 
presence in a courthouse to provide advice at the invitation of the 
court[.]'' AO 2020-004. Additionally, part 1638 does not prohibit grant 
recipients from representing an individual that the grant recipient 
initiated contact with over the telephone or via text message as long 
as the communication contains only generic information that is not 
tailored to the individual or the specific facts of the individual's 
legal issues. Id.
    LSC issued its most recent guidance on part 1638 in 2022. In 
Program Letter 22-1, LSC advised that grant recipients could send text 
messages to defendants (tenants) in landlord/tenant cases to notify 
them that an eviction case has been filed against them; to let them 
know of any upcoming court appearances; and to inform them of the 
availability of counsel. Program Letter 22-1. The program letter cited 
previous guidance from OLA regarding unsolicited advice via text 
message and mail.
    LSC believes regulatory action is justified at this time for two 
reasons. First, OLA has been applying a nearly thirty-year-old rule 
concerning communications to new technologies and outreach strategies 
developed since part 1638 was published. Second, regulatory action is 
justified because LSC has continued to receive questions from grantees 
and other stakeholders about whether certain proposed outreach 
activities are permissible under part 1638. These questions have become 
more compelling as governments began lifting moratoria on filing 
evictions and pursuing debt collection cases that they had put into 
place near the beginning of the COVID-19 pandemic. Rulemaking to make 
part 1638 more consistent with the language of section 504(a)(18) has 
become more critical to helping grantees inform people living in 
poverty who are facing eviction or potentially significant financial 
consequences about their rights and the availability of attorneys to 
assist them.
    On July 25, 2023, the Operations and Regulations Committee voted to

[[Page 73305]]

recommend that the Board authorize rulemaking on part 1638. On July 27, 
2023, the Board authorized LSC to begin rulemaking. On October 16, 
2023, the Committee voted to recommend that the Board authorize 
publication of this NPRM in the Federal Register for notice and 
comment. On October 17, 2023, the Board accepted the Committee's 
recommendation and voted to approve publication of this NPRM.

II. Proposed Changes

Sec.  1638.1 Purpose

    LSC proposes to make no changes to this section.

Sec.  1638.2 Definitions

    LSC proposes to add a definition for the terms communicate and 
communication that pertains to mailed, emailed, and texted messages, as 
opposed to merely in-person engagements. With additional technology 
since the inception of this prohibition, this change will provide 
greater flexibility and clarity around the methods of communication 
that are permitted. This is not intended to require recipients to use 
various methods to reach client-eligible individuals; rather it 
clarifies which methods are permissible.
    LSC also proposes to amend the definition of the term in-person to 
include virtual engagements such as clinics conducted via Zoom or other 
videoconferencing software. LSC proposes to make this change to reflect 
the transition, hastened by the COVID-19 pandemic, to the provision of 
legal services through virtual means in addition to traditional in-
person engagements.
    Finally, to account for adding a new definition, LSC proposes to 
redesignate existing paragraph (b), defining the term unsolicited 
advice, as paragraph (c).

Sec.  1638.3 Prohibition

    LSC proposes to edit the text to be active as opposed to passive. 
For example, ``shall not represent'' would replace ``are prohibited 
from representing.''

Sec.  1638.4 Permissible Activities

    LSC proposes to edit the text to be active as opposed to passive. 
Additionally, LSC proposes to revise Sec.  1638.4(a) to permit 
communication and in-person engagement about individuals' legal rights 
and responsibilities and grantees' intake procedures. LSC believes that 
the proposed language should be clearer that grantees are permitted to 
send individuals information about rights and responsibilities that 
could lend itself to individuals filing complaints, either pro se or 
with the assistance of counsel. This instance may arise in the context 
of housing cases; for example, in housing habitability and tenant 
building purchase cases. A grantee may discover that there is a 
building with numerous safety issues and communicate with the tenants 
about the warranty of habitability, their options for getting the 
landlord to make repairs, including affirmative litigation, and the 
grantee's intake process. After receiving such legal information, some 
tenants could conceivably apply for legal assistance to help them 
pursue legal action to force repairs. This approach is consistent with 
the text of section 504(a)(18) of LSC's 1996 appropriation statute, 
which speaks in general terms about prohibited solicitation. It is 
critical to closing the justice gap that grantees are aware that they 
can advise their client-eligible communities about issues for which 
affirmative litigation may be an appropriate solution.
    Further, LSC proposes to add paragraphs (c) and (e) to incorporate 
OLA's interpretations of existing part 1638 and the guidance LSC 
provided in PL 22-1. Finally, LSC proposes to redesignate existing 
paragraph (c) as paragraph (d) and to revise new paragraph (d) to 
replace the phrase ``physically or mentally disabled'' with the person-
first term ``living with a physical or mental disability.''

Sec.  1638.5 Recipient Policies

    LSC proposes no changes to this section.

List of Subjects in 45 CFR Part 1638

    Grant programs--law, Legal services.

    For the reasons set forth in the preamble, the Legal Services 
Corporation proposes to amend 45 CFR part 1638 as follows:

PART 1638--RESTRICTION ON SOLICITATION

0
1. Revise the authority citation for part 1638 to read as follows:

    Authority: 42 U.S.C. 2996g(e).
0
2. Revise Sec.  1638.2 to read as follows:


Sec.  1638.2   Definitions.

    (a) Communicate or communication means to share information. 
Permissible forms of communication include, but are not limited to, 
sending information via mailings, text message, email, or other methods 
of voice or electronic communication.
    (b) In-person means a face-to-face encounter, including virtual 
clinics or other encounters via videoconference.
    (c) Unsolicited advice means advice to obtain counsel or take legal 
action given by a recipient or its employee to an individual who did 
not seek the advice and with whom the recipient does not have an 
attorney-client relationship.
0
3. Revise Sec.  1638.3 to read as follows:


Sec.  1638.3   Prohibition.

    (a) Recipients and their employees shall not represent a client as 
a result of in-person unsolicited advice.
    (b) Recipients and their employees shall not refer to other 
recipients individuals to whom they have given in-person unsolicited 
advice.
0
4. Revise Sec.  1638.4 to read as follows:


Sec.  1638.4   Permissible activities.

    A recipient may:
    (a) Communicate about legal rights and responsibilities or the 
recipient's services and intake procedures or provide the same 
information through community legal education activities such as 
outreach, public service announcements, maintaining an ongoing presence 
in a courthouse to provide advice at the invitation of the court, 
disseminating community legal education publications, and giving 
presentations to groups that request them.
    (b) Communicate to parties in civil cases to notify them that a 
case has been filed against them; to inform them of upcoming court 
dates; to inform them that counsel may be available to represent them; 
and to provide information about intake.
    (c) Represent an otherwise eligible individual seeking legal 
assistance from the recipient as a result of a communication or 
information provided as described in Sec.  1638.4(a), provided that the 
request has not resulted from in-person unsolicited advice.
    (d) Represent or refer clients pursuant to a statutory or private 
ombudsman program that provides investigatory and referral services 
and/or legal assistance on behalf of persons who are unable to seek 
assistance on their own, including those who are institutionalized or 
living with a physical or mental disability.
    (e) Represent an individual with whom the recipient initiated 
contact over the phone or via an electronic platform so long as the 
communication provides only generic information that is not tailored to 
the individual or the specific facts of the individual's legal issues.

    Dated: October 20, 2023.
Stefanie Davis,
Deputy General Counsel for Regulations and Ethics Officer, Legal 
Services Corporation.
[FR Doc. 2023-23568 Filed 10-24-23; 8:45 am]
BILLING CODE 7050-01-P