Wescott v. Stanfill

United States Court of Appeals

For the First Circuit

No. 25-1324

E. DAVID WESCOTT, an individual residing in Dedham, County of

Hancock, State of Maine; RUSSELL JOHNSON BEAUPAIN, a Maine

Limited Liability Company,

Plaintiffs, Appellants,

v.

HON. VALERIE STANFILL, in their official capacity as Chief

Justice, Maine Supreme Judicial Court; AMY QUINLAN, ESQ., in

their official capacity as State Court Administrator for the

State of Maine, Judicial Branch; MAINE JUSTICE FOUNDATION,

Defendants, Appellees,

MAINE BOARD OF OVERSEERS OF THE BAR,

Defendant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MAINE

[Hon. Lance E. Walker, U.S. District Judge]

Before

Barron, Chief Judge,

Howard and Rikelman, Circuit Judges.

Kyle Singhal, with whom Stephen C. Smith, Hopwood & Singhal

PLLC, and Steve Smith Trial Lawyers were on brief, for appellants.

Jason Anton, Assistant Attorney General, with whom Aaron M.

Frey, Attorney General, Thomas A. Knowlton, Deputy Attorney

General, and Heather A. Francis, Assistant Attorney General, were

on brief, for appellees Valerie Stanfill and Amy Quinlan.

Julia B. MacDonald, with whom Gavin G. McCarthy and Pierce

Atwood LLP were on brief, for appellee Maine Justice Foundation.

McDermott Will & Schulte, Ethan H. Townsend, Wilber H. Boies,

Gabrielle L. Siroonian, and Maura R. Cremin on brief for National

Association of IOLTA Programs, Massachusetts IOLTA Committee,

Rhode Island Bar Foundation, and Fundación Fondo de Acceso a la

Justicia, as amici curiae supporting appellees.

April 2, 2026

BARRON, Chief Judge. In this appeal, we confront an

as-applied challenge to Maine's Interest on Lawyers' Trust

Accounts ("IOLTA") program. The plaintiffs -- a law firm and one

of its clients -- contend that the program unconstitutionally

compels their speech by requiring the firm to place the client's

funds in a special pooled account, see Me. Bar R. 6(a), (c)(1),

and then directing a nonprofit organization to distribute the

resulting interest to other organizations to "maintain and

enhance . . . access to justice in Maine," id. 6(e)(3). The

defendants are the Chief Justice of the Maine Supreme Judicial

Court, the State Court Administrator for Maine's Judicial Branch,

and Maine Justice Foundation, the nonprofit corporation charged

under the program with disbursing the interest.1 The United States

District Court for the District of Maine dismissed the claims

against the Chief Justice and State Court Administrator on the

merits and dismissed the claim against Maine Justice Foundation

for lack of jurisdiction. The plaintiffs challenge those rulings

on appeal. We affirm.

1 The operative complaint also named the Maine Board of

Overseers of the Bar (the "Board") as a defendant, but the

plaintiffs later agreed that the Board was shielded from suit by

sovereign immunity. The portion of the District Court's order

dismissing the claim against the Board on sovereign immunity

grounds is not at issue in this appeal.

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I.

A.

The Maine Supreme Judicial Court created Maine's IOLTA

program in the mid-1980s. IOLTA: Interest on Lawyers' Trust

Accounts, State of Me. Bd. of Overseers of the Bar (Mar. 26, 2026),

https://www.mebaroverseers.org/attorney_services/registration/io

lta.html [https://perma.cc/SX3N-FZ6A]. In Maine, as elsewhere,

"attorneys are frequently required to hold clients' funds for

various lengths of time" and are generally subject to restrictions

regarding how such funds may be stored. Brown v. Legal Found. of

Wash., 538 U.S. 216, 220 (2003). And, even before Maine created

its IOLTA program, attorneys complying with these requirements

often pooled the funds that they held in trust for their clients

in non-interest-bearing checking accounts. See id. at 221. But

after Congress enacted a 1980 statute that permitted interest to

be paid on a "limited category of demand deposits" known as "NOW

accounts," states began adopting programs -- known as IOLTA

programs -- that authorized attorneys to deposit client funds in

NOW accounts and required that the interest generated by the funds

in those accounts "be used for charitable purposes," including

"legal services for the poor." Id. at 221-23.

Over time, every state in the United States (including

Maine), as well as the District of Columbia, the Commonwealth of

Puerto Rico, and the Virgin Islands, has adopted an IOLTA program.

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Comm'n on IOLTA, Status of IOLTA Programs, A.B.A. (Mar. 26, 2026),

https://www.americanbar.org/groups/interest_lawyers_trust_accoun

ts/resources/status_of_iolta_programs [https://perma.cc/7ULP-

ZHU6]. The Maine IOLTA program is governed by Maine Bar Rule 6

("Rule 6"). That rule requires "[e]very lawyer admitted to

practice in Maine" to "deposit all funds held in trust in this

jurisdiction in accordance with Rule 1.15 of the Maine Rules of

Professional Conduct in accounts clearly identified as IOLTA

accounts." Me. Bar R. 6(a). It goes on to define "IOLTA account"

as follows:

An IOLTA account is a pooled trust account

earning interest or dividends . . . in which

a lawyer or law firm holds funds on behalf of

clients, which funds are small in amount or

held for a short period of time such that they

cannot earn interest or dividends for the

client in excess of the costs incurred to

secure such income . . . .

Id. 6(c)(1).

Rule 6 also requires banking institutions that service

IOLTA accounts to "remit the interest and dividends on [IOLTA]

account[s], net of any allowable reasonable fees," "to the Maine

Justice Foundation." Id. 6(c)(4)(A). It then directs Maine

Justice Foundation to "receive[] and distribute[]" IOLTA funds for

the purpose of "provid[ing] services that maintain and enhance

resources available for access to justice in Maine, including those

services that achieve improvements in the administration of

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justice and provide legal services, education, and assistance to

low-income, elderly, or needy clients."2 Id. 6(e)(3).

The Maine Rule of Professional Conduct referenced in

Rule 6 is Rule 1.15 ("MRPC 1.15"). It provides that "[a] lawyer

shall deposit into a client trust account any advance payment of

fees or retainer and any expenses that have been paid in advance."

Me. R. Pro. Conduct 1.15(b)(1). It goes on to state, with respect

to "[a]ll funds of any client held by the lawyer or law firm that

are small in amount or held for a short period of time so that

they cannot earn interest or dividends for the client in excess of

the costs incurred to secure such income," that such funds "shall

be deposited in an [IOLTA] account" pursuant to Rule 6.

Id. 1.15(b)(4). MPRC 1.15 provides, however, that "when a lawyer

or law firm reasonably expects that client funds will earn interest

or dividends for the client in excess of the costs incurred to

secure such income," "such funds shall be deposited in a client

trust account," with net earnings to be paid to the client.

Id. 1.15(b)(3).

2 The rule allots a portion of IOLTA funds to Maine Justice

Foundation's administrative costs. Me. Bar R. 6(e)(2).

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B.

The lawsuit that gives rise to this appeal was filed in

the District of Maine in August 2024.3 The plaintiffs are Russell

Johnson Beaupain ("RJB"), a law firm with its principal place of

business in Maine, and E. David Wescott ("Wescott"), one of RJB's

clients. The operative complaint named as defendants Valerie

Stanfill, in her official capacity as Chief Justice of the Maine

Supreme Judicial Court; Amy Quinlan, in her official capacity as

State Court Administrator for the State of Maine's Judicial Branch;

and Maine Justice Foundation ("MJF"). We refer to the first two

defendants collectively as the "State Defendants."

The operative complaint alleges that the defendants, in

violation of 42 U.S.C. § 1983, "deprived . . . RJB of its First

and Fourteenth Amendment rights to be free from compelled speech

by requiring [RJB] to maintain an IOLTA account and store client

funds therein," with "the interest on such funds being used to

support causes that contravene the sincerely held beliefs of the

members of . . . RJB." It further alleges that the defendants, in

violation of 42 U.S.C. § 1983, "deprived . . . Wescott of his

First and Fourteenth Amendment rights to be free from compelled

speech by compelling the contribution of interest from his retainer

3 "[W]e take the facts from the [plaintiffs'] amended

complaint." San Juan Cable LLC v. P.R. Tel. Co., 612 F.3d 25, 28

(1st Cir. 2010).

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funds -- interest that would otherwise accrue to his benefit -- to

support causes that contravene the sincerely held beliefs

of . . . Wescott." As relief, it seeks: (1) a declaration that

Rule 6, "as currently enforced," violates the First and Fourteenth

Amendments "insofar as it permits mandatory IOLTA funds to

subsidize systemic advocacy or legislative lobbying"; (2) a

declaration that it is unconstitutional for the defendants "to

permit IOLTA funds to be used for" five enumerated purposes;4

(3) alternatively, an injunction barring the defendants "from

requiring lawyers to participate in . . . IOLTA" and "requir[ing]

[the] [d]efendants to provide notice to lawyers and clients"

regarding the potential uses of IOLTA funds; and (4) costs and

attorneys' fees.

The operative complaint alleges, in relevant part, the

following.

In June 2023, Wescott transmitted a $2,500 retainer to

RJB as an advance payment for legal services. "[I]nterest [later]

accrued on the retainer that, but for the mandatory IOLTA program,

would have accrued to . . . Wescott's benefit." But, "[i]n

4 Those purposes were listed as follows: "(1) supporting or

opposing candidates for elected office, (2) supporting or opposing

ball[o]t initiatives or referenda, (3) lobbying in support of or

in opposition to pending proposed legislation, (4) seeking public

support through the media including social media to support or

oppose legislation, valid initiatives or referenda for candidates

for elected office, or (5) voter registration, voter education,

voter signature gathering, or get out to vote actions."

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compliance with the mandatory IOLTA program, the

interest . . . was not transferred to . . . Wescott but was

instead transferred to [MJF] to support causes adverse

to . . . Wescott's interest."

MJF distributed most of the IOLTA interest it received

to six legal services groups: Cumberland Legal Aid Clinic,

Immigrant Legal Advocacy Project, Legal Services for Maine Elders,

Maine Equal Justice, Pine Tree Legal Assistance, and Maine

Volunteer Lawyers Project.

Shortly after the plaintiffs filed their amended

complaint, the State Defendants filed a motion to dismiss the

complaint for failure to state a claim. They argued, first, that

the plaintiffs' participation in the Maine IOLTA program was not

compelled because, in representing Wescott, RJB could have used a

payment structure other than a retainer fee, and because, under

Rule 6 and MRPC 1.15, the "interest generated by an IOLTA

account . . . is not money that . . . Wescott would otherwise have

pocketed." Second, the State Defendants argued that even if the

plaintiffs' participation in Maine's IOLTA program was compelled,

the "connection" between the plaintiffs and the speech to which

they objected was too attenuated to support a subsidy-based

compelled-speech claim. Finally, the State Defendants argued

that, even if Maine's IOLTA program compelled the plaintiffs'

speech, the program still complies with the First Amendment because

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"support[ing] access to justice" is "a compelling state interest

that cannot be achieved through significantly less restrictive

means." (Citing Gaspee Project v. Mederos, 13 F.4th 79, 82-83,

95-96 (1st Cir. 2021).)

MJF filed a separate motion to dismiss the complaint, in

which MJF adopted the State Defendants' arguments in full, that

same day. MJF additionally argued that the plaintiffs lacked

standing to sue it because it did not cause their injuries and

because the relief that they sought could not be provided in an

action against MJF because MJF neither promulgated nor enforced

Rule 6.

The District Court granted both motions. It noted that,

in Washington Legal Foundation v. Massachusetts Bar Foundation,

our Circuit had "considered a near-identical" challenge to

Massachusetts's IOLTA program. See 993 F.2d 962, 968 (1st Cir.

1993). The District Court explained that we held in that case

that, for a plaintiff to state a First Amendment claim for

subsidized speech, "there must be a connection between dissenters

and the organization so that dissenters reasonably understand that

they are supporting the message propagated by [the] recipient

organizations." Id. at 979. The District Court noted that we

ruled there that the connection was lacking at least in part

because "[t]he interest earned on IOLTA accounts belongs to no

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one" but instead was a "benefit . . . created by the

practicalities of" the IOLTA program. Id. at 980.

The District Court then considered whether, under that

precedent, the plaintiffs here had alleged that they had the

requisite connection to the speech of the IOLTA-fund-recipient

organizations to which they objected. It ruled that they had not.

The District Court further held that the plaintiffs

"lack[ed] standing in their claim against" MJF because that claim

"wants redressability." It explained that MJF "do[es] not enforce

Rule 6" and that the "[p]laintiffs can obtain complete

redressability from a favorable ruling solely against [the] State

Defendants."

The plaintiffs timely appealed.

II.

In reviewing the dismissal of a complaint pursuant to

Federal Rule of Civil Procedure 12(b)(6) for failure to state a

claim on which relief may be granted, we "accept[] all well-pleaded

facts as true, and we draw all reasonable inferences in favor of

the [plaintiffs]." Id. at 971. "Because only well-pleaded facts

are taken as true," however, we need not "accept a complainant's

unsupported conclusions or interpretations of law," id., nor must

we "credit bald assertions" or "subjective characterizations,"

United States v. AVX Corp., 962 F.2d 108, 115 (1st Cir. 1992)

(first quoting Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49,

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52 (1st Cir. 1990); then citing Dartmouth Rev. v. Dartmouth Coll.,

889 F.2d 13, 16 (1st Cir. 1989)). Our review is de novo, "and we

may affirm on any ground apparent in the record." Rodríguez-Ortiz

v. Margo Caribe, Inc., 490 F.3d 92, 95 (1st Cir. 2007).

III.

In dismissing the plaintiffs' complaint against the

State Defendants for failure to state a claim based on our decision

in Massachusetts Bar Foundation, the District Court acknowledged

that the plaintiffs' complaint alleged that the IOLTA program

"creat[es] the public perception that their participation in the

IOLTA program implies their endorsement of the views that [the]

[d]efendants use IOLTA funds to support." The District Court

concluded, however, that this statement asserted a legal

conclusion and so did not constitute a factual allegation. As

such, the court stated that it needed to accept that conclusion as

true only if the complaint's factual allegations supported it.

The District Court explained that the plaintiffs'

contention that the public would perceive them to have "endorse[d]"

the speech in question was "predicated" on their complaint's

allegation "that the IOLTA 'interest would otherwise accrue to

[Wescott's] benefit.'" (Second alteration in original.) But, the

District Court concluded, it could not accept that factual

allegation as plausible because it is "simply false," given that,

under Maine's IOLTA program, "[u]nless RJB is mismanaging

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Wescott's funds, absent the IOLTA program Wescott would not see a

penny of interest as it would not cover the financial institution's

cost of handling his funds."

In challenging the District Court's ruling dismissing

their claims against the State Defendants, the plaintiffs do not

dispute the District Court's premise that their as-applied First

Amendment claims can go forward only if their complaint plausibly

alleged both that the IOLTA program required them to deposit the

Wescott funds into an IOLTA account and that those funds otherwise

would have accrued interest. Nor do they dispute that Rule 6

provides that an attorney must deposit client funds into an IOLTA

account only when such funds are "small in amount or held for a

short period of time such that they cannot earn interest or

dividends for the client in excess of the costs incurred to secure

such income." Me. Bar R. 6(c)(1) (emphasis added); accord Me. R.

Pro. Conduct 1.15(b)(4). Nor, finally, do they dispute that

MRPC 1.15, which Rule 6 references, requires that client funds be

deposited in a non-IOLTA account if a lawyer "reasonably expects"

that such funds "will earn interest or dividends for the client."

Me. R. Pro. Conduct 1.15(b)(3). The plaintiffs nonetheless

contend that the District Court erred for either of two reasons,

neither of which we find convincing.

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A.

The plaintiffs first take aim at the District Court's

ruling on the ground that, by assuming that Wescott's retainer fee

would have accrued interest only if RJB was "mismanaging" Wescott's

funds, the District Court impermissibly drew a negative inference

against them. After all, the plaintiffs highlight, on a motion to

dismiss, "all reasonable inferences" must be drawn in favor of the

plaintiffs' factual allegations. See Dartmouth Rev., 889 F.2d. at

16. As a result, in their view, "[t]he proper inference to draw

in RJB's favor" would be that, "if RJB is in doubt about whether

a retainer is sufficiently large . . . to permit its deposit into

a separate, non-IOLTA interest-bearing account, then RJB feels

compelled to err on the side of using an IOLTA account so as to

avoid the threat of enforcement and punishment for noncompliance."

If the plaintiffs mean to argue, however, that their

complaint's allegations support a reasonable inference that, when

they deposited the Wescott funds into an IOLTA account, they

reasonably expected that those funds would not generate net

interest, we cannot agree. The complaint is devoid of any facts

that so much as hint that RJB was ever unsure about whether

Wescott's retainer would generate net interest, let alone that RJB

expected that those funds would not do so when they were deposited

in an IOLTA account. Indeed, even in their briefs on appeal, the

plaintiffs do not assert that RJB in fact was uncertain or had any

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such expectation. They instead simply argue in the abstract that

a lawyer may "not know whether" funds will accrue net interest and

that, with respect to RJB, it "would prefer to be able to store

client funds in non-IOLTA accounts regardless of the amount of

interest that each retainer might generate during the time it is

held."

The plaintiffs do argue, elsewhere in their briefing to

us, that MRPC 1.15 "is insufficient to provide an opt-out" from

Maine's IOLTA program. That is so, they contend, because that

rule "imposes an external 'reasonableness' constraint,"

which -- coupled with the fact that it is the State Defendants who

"enforce the rules" and the "threat of imminent punishment" that

RJB would face if the defendants "determin[ed] that RJB had flouted

Rule 6" -- "compel[s the plaintiffs] into IOLTA participation."

If by this the plaintiffs mean to argue that the

complaint's allegation about the penalties required the District

Court to draw the inference that they claim it had to draw, we

cannot see why. The allegation in the complaint concerning

penalties appears only in the section of the complaint that details

how, insofar as Rule 6 did oblige the plaintiffs to store Wescott's

funds in an IOLTA account, they were injured by Maine's IOLTA

program because of the penalties that they would face for failing

to comply with that obligation. The complaint does not at any

point purport to draw a connection between that allegation and the

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complaint's later allegations regarding RJB's storage of Wescott's

funds and the interest that accrued on those funds. Thus, the

complaint's allegation regarding the "imminent threat of severe

penalties . . . for failing to store client retainer funds in an

IOLTA account" fails to support a reasonable inference that the

plaintiffs reasonably believed that Wescott's funds would not

accrue net interest and, thus, that Rule 6 required that those

funds be deposited in an IOLTA account.

We suppose the plaintiffs could be making a distinct

argument regarding the import of the complaint's allegation about

the threat of penalties. Perhaps they mean to contend that that

allegation gives rise to the reasonable inference that the

plaintiffs believed that they would be penalized for violating

Rule 6 even if they had not violated it. And thus, we further

suppose, they may mean to be arguing that that allegation gives

rise to the reasonable inference that they had to deposit the

Wescott funds in an IOLTA account, even though they reasonably

expected that those funds would accrue net interest, due to their

reasonable fear of enforcement. But, if the plaintiffs do mean to

be making this contention, we are not persuaded by it.

The complaint does not set forth any facts that plausibly

support an allegation that Rule 6 has been enforced in a manner

that would make any such belief reasonable. And the plaintiffs

develop no argument on appeal about why this penalty-based theory

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of compulsion is viable, beyond what appears to be their conclusory

assertion that we must accept it. Nor do we see how an unreasonable

fear of enforcement, if held, could suffice to shore up their

complaint under Massachusetts Bar Foundation.

That the plaintiffs allege in their complaint that they

"sincerely believe[d]" that they were required under Rule 6 to

deposit these funds in an IOLTA account also does not help their

cause. The sincerity of their belief that Rule 6 compelled the

conduct in question is, as a legal matter, irrelevant to the

question of whether they reasonably believed that they had to

deposit the Wescott funds in an IOLTA account notwithstanding their

reasonable expectation that those funds would earn net interest.

Even an unreasonable belief can be sincerely held.

To be sure, we must accept as true that RJB deposited

Wescott's funds into an IOLTA account and that those funds would

earn net interest. But the plaintiffs do not deny that, as the

District Court ruled based on our decision in Massachusetts Bar

Foundation, they need to do more. More specifically, they do not

deny that they needed to plausibly allege not only that they

deposited the Wescott funds in an IOLTA account and that those

funds would earn net interest,5 but also that Maine's IOLTA program

5 The plaintiffs hinted at oral argument that depositing any

funds into an IOLTA account would give rise to a compelled-speech

claim even if those funds did not or would not earn net interest

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required them to deposit those funds into such an account. But,

as we have explained, we see no basis for rejecting the District

Court's determination that they failed to plausibly allege as much.

See Kaempe v. Myers, 367 F.3d 958, 963 (D.C. Cir. 2004) (explaining

that the court will not accept "inferences drawn by plaintiffs

[that] are unsupported by the facts set out in the complaint"

(quoting Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002))).

B.

The plaintiffs also take issue with the District Court's

dismissal of their claims against the State Defendants for a

distinct reason. Here, they assert that the dismissal was in error

because the District Court mistakenly treated one of their key

allegations as if it were an unsupported legal conclusion. But

this contention rests on a misreading of the District Court's

opinion.

The plaintiffs assert that the District Court erred by

treating the following allegation as a "legal conclusion couched

as a factual allegation": "that the interest on Wescott's retainer

on their own. But any such argument was too little too late; the

plaintiffs did not clearly trace their First Amendment injury to

their ownership of IOLTA principal. See Phillips v. Wash. Legal

Found., 524 U.S. 156, 172 (1998). Their opening brief on appeal,

meanwhile, assigns some importance to a loss of hypothetical

interest. We therefore have no occasion to address whether a

compelled-speech claim could survive in the absence of a showing

that the IOLTA deposits would have earned net interest on their

own.

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'would otherwise accrue to Wescott's benefit' in the absence of

the IOLTA program." But, as our review of the District Court's

ruling at the outset of our analysis reveals, the District Court

did no such thing. Rather, the District Court treated as "a legal

conclusion couched as a factual allegation" the plaintiffs'

assertion in their complaint that the IOLTA program "creat[es] the

public perception that their participation in the IOLTA program

implies their endorsement of the views that [the] [d]efendants use

IOLTA funds to support."

The plaintiffs do not contend, however, that that

statement regarding the "public perception" of their endorsement

alleges a fact rather than asserting a legal conclusion, and we do

not see how they could. See Mass. Bar Found., 993 F.2d at 977-78

(treating the issue of whether Massachusetts's IOLTA program was

compulsory as a question of law). Thus, we see no merit to this

ground for challenging the District Court's ruling dismissing

their claims against the State Defendants.

In sum, for these reasons, we conclude that the District

Court did not err in dismissing the plaintiffs' First

Amendment-based claims against the State Defendants for failing to

state a claim upon which relief may be granted. We thus need not

reach any of the plaintiffs' other arguments as to why we must

overturn that ruling.

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IV.

There remains the plaintiffs' jurisdictional challenge

to the dismissal of their claim against MJF. There is no question,

however, that we have jurisdiction to address their challenge to

the dismissal of their claims against the State Defendants. As a

result, there is no question that we have jurisdiction to address

whether the complaint that sets forth those claims plausibly

alleged that Maine's IOLTA program compelled the plaintiffs to

deposit Wescott's funds in an IOLTA account and that that deposit

was sufficiently connected to the speech to which they object.

See, e.g., Kachalsky v. Cnty. of Westchester, 701 F.3d 81, 84 n.2

(2d Cir. 2012) (noting that the court's "jurisdiction is secure"

so long as "at least one plaintiff has standing," and declining to

address the issue of one of the plaintiff's standing after

affirming dismissal). Thus, because the fatal defect in the

complaint that we identified above in affirming the dismissal of

the claims against the State Defendants inheres in the complaint

as a whole without regard to the particular defendant, we conclude

that the plaintiffs' appeal of the District Court's dismissal of

their claim against MJF is moot. See Efron v. Embassy Suits

(P.R.), Inc., 223 F.3d 12, 21 (1st Cir. 2000) (finding questions

concerning the plaintiff's standing "obviously . . . moot" after

concluding that he had failed to allege sufficient facts to state

a claim).

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V.

For the foregoing reasons, we affirm.

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