# Reply Brief — Legal Services Corp. v. Velazquez > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0178%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 2001 - **Citation:** 531 U.S. 533 ## Text silat. Pa ok [y2/ cin Nos. 99-603 and 99-9 IN THE | Supreme Court of the Wnited ppiates: 4 4% ; f Wiieaih i ois Caan LEGAL SERVICES CORPORATION, Petitioner, an | fen CARMEN VELAZQUEZ, et al., Respondents. tie Bie ie UNITED STATES OF AMERICA, Petitioner, —) CARMEN VELAZQUEZ, et al., Respondents. ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT REPLY BRIEF FOR PETITIONER LEGAL SERVICES CORPORATION ALAN LEVINE Counsel of Record STEPHEN L. ASCHER STEPHEN A. WIEDER KRONISH LIEB WEINER & HELLMAN LLP 1114 Avenne of the Americas New York, New York 10036 (212) 479-6000 Counsel for Petitioner Legal Services Corporation TABLE OF CONTENTS A. The Suit-for-Benefits Limitation Does Not Exclude Welfare Claimants from a Public Forum Based on their WIE RES ae Cahn ees EKG ekas Le 1. The LSC Program Is Not a Public Mo LD ee ee nr es ey ane 2. The Suit-for-Benefits Limitation Does Not Discriminate Against Any Particular Viewpoint.......... 3. Respondents Do Not Identify a Coherent Speaker for Purposes of the First Amendment............ B. The Suit-For-Benefits Limitation Does Not Violate the Associational Rights of Welfare Claimants and LSC SEES Fa Ohba acace crassa eeinkeciads C. The Suit-for-Benefits Limitation Does Not Prevent Welfare Claimants from Challenging the Welfare Laws.... 13 li PAGE D. LSC’s Program Integrity Regulations Do Not Violate LSC Grantees’ First Amondment Rages ooo. occcncccdiccexsiss 16 CONCLUSION... ... «caskeaneu duncan eeeeeeeees 20 ili TABLE OF AUTHORITIES Cases PAGE Arkansas Education Television Com’n v. Perea, 229 U.S. 666 (1996) ............50.0. 4 Blum v. Bacon, 457 U.S. 132 (1982)............. 6, 10 Califano v. Westcott, 443 U.S. 76 (1979)........ 10 City of Ladue v. Gilleo, 512 U.S. 43 (1994) ..... 16 City of Lakewood v. Plain Dealer Publishing SOS Ree kL | 16 Goldberg v. Kelly, 397 U.S. 254 (1970).......... 10, 13 King v. Smith, 392 U.S. 309 (1968).............. 6, 11 McCoy v. Department of Health & Welfare, pur ©.20 110 (idaho 1995) .................. 6, 11 NAACP v. Button, 371 U.S. 415 (1963).......... 9 National Endowment for the Arts v. Finely, Oe Re OP CEP oi cic ives edvccs cocesecs 3-4,5 Niemotko v. State of Maryland, 340 U.S. 268 ee os boas pul cu Nba cae 17 Ortwein v. Schwab, 410 U.S. 656 (1973) ......... 13-14 Regan v. Taxation with Representation, ON Pte OOO oo ia bo ove ss cies oesleance 17 Reno v. ACLU, 521 U.S. 844 (1997) ............. 16 Rist v. Missouri State Division of Family Services, 595 S.W.2d 783 (Mo. Ct. App. NE ehh Wien us ows suas Wied bhawle eeew kes 1] Rosenberger v. Rector & Visitors of the University of Virginia, 515 U.S. 819 LSP ee Ma icnancuedersuneme lenses ccedeons uc ce ae i Rust v. Sullivan, 500 U.S. 173 (1991) ........... passim Schneider v. State of New Jersey, 308 U.S. 147 Cee aka exe neh hacia ew amas 17 Shapiro v. Thompson, 394 U.S. 618 (1969)....... 10-11 Shuttlesworth v.:City of Birmingham, Ala., a Me PO te rear 17 Sullivan v. Zebley, 493 U.S. 521 (1990)......... 6, 10 Walters v. National Association of Radiation Survivors, 473 U.S. 305 (1985)........... 5, 14, 18 Webster v. Reproductive Health Services, Ok as EEE oxida 0k ks oak adkc ene 14 Statutes, Regulations and Legislative History 42 U.S.C. § GOl(a) (Aug. 1996) ... occ cccsceccces 18 SD Gs SE OED os on chk cvcadcnsinas 17 BF Ges BUFR CPF ov kacdctacdarivndonicas 1] GS C.F. SUG TP. 20) CABO Eo vse sees civicciadcci 1] S« Mop. No. TOG-S95 C1996) aac cscs cckccacecdas 19 —_——— — ———— ——————— PAGE Other Authorities ABA Comm. On Ethics and Professional Responsibility, Formal Op. 96-399 PRS 5 xd dbceatncakinceee chee 8, 11, 12-13 Legal Services Corporation, 1996 Facts......... 10 Legal Services Corporation, 1997 Annual ONE 5. i500 de nesenuuseceneredie ce 10 Legal Services Corporation, 1998 Fact Book and Program Information.................... 10 Legal Services Corporation, Serving the Civil Legal Needs of Low-Income Americans, A Special Report to Congress (Apeit 2000) «ooo cicccsccccsicccawas 10 National Center on Poverty Law Website, . In fact, the NYSBA cites a handful of recent cases in which non-LSC lawyers successfully challenged welfare laws. Id. at 26-27. These cases are vivid proof that wel- fare reform litigation can and does take place notwith- Standing the suit-for-benefits limitation. From all the NYSBA’s facts and figures, one stands out: No matter how this Court resolves the present case, the legal services available to meet the needs of the poor will be greatly insufficient. NYSBA Br. at 19. Invali- dating the suit-for-benefits limitation will not alleviate that shortage. It will transfer control of the LSC program 16 from Congress, which decided to fund an apolitical ben- efits program, to LSC lawyers, some of whom want to participate in the contentious debate on welfare reform through their subsidized employment. But ultimately Congress has the power to define—or eliminate—the LSC program.’ D. LSC’s Program Integrity Regulations Do Not Violate LSC Grantees’ First Amendment Rights Finally, Respondents challenge LSC’s program integrity regulations, claiming that overturning this lim- itation on the use of non-federal funds would provide a “less ifitrusive ground on which to affirm the decision below.” Resp. Br. at 33 n.32. In fact, the challenge to the program integrity regulations is far more intrusive, because it would invalidate LSC’s enforcement of a cru- cial element of all the provisions in the 1996 Act. Thus, the Court should reject Respondents’ attempt to justify review of the program integrity regulations; this Court granted certiorari to review the court of appeals’ inval- idation of the suit-for-benefits limitation, not its approval of the program integrity regulations. If the Court decides to hear this challenge, the pro- gram integrity regulations should be upheld. Although Respondents allege that the regulations cannot survive “strict scrutiny,” the strict scrutiny cases cited by Respondents involved direct restrictions on First Amendment activity;'? insofar as we are aware, this 12 Respondents’ separation of powers argument is ironic when one considers that the lawyer-Respondents are trying to arrogate Congress’s spending power to themselves. 3 See, e.g., Reno v. ACLU, 521 U.S. 844 (1997) (prohibition on transmission of obscene/indecent communications); City of Ladue v. Gilleo, 512 U.S. 43 (1994) (city ordinance banning certain signs); City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750 (1988) (statute giving mayor unbridled discretion to prohibit news racks); 17 Court has never applied strict scrutiny in a selective sub- sidy case. See, Regan v. Taxation with Representation, 461 U.S. 540, 548-49 (1983) (“We have held in several contexts that a legislature’s decision not to subsidize the exercise of a fundamental right. . . is not subject to Strict scrutiny.”) (citations omitted). Once the correct rational basis standard is applied, it is clear that the program integrity regulations serve two proper purposes. First, they prevent indirect subsidiza- tion of activities Congress chose not to subsidize directly. Respondents claim the district court held that a physically separate facility was not necessary to prevent indirect subsidization. Resp. Br. at 42. But the regula- tions do not require complete physical separation between LSC and non-LSC programs; they provide only that “the degree of separation” is a factor for LSC to consider when reviewing a grantee’s relationship with an affiliate. 45 C.F.R. § 1610.8(a) (1997). Under these cir- cumstances, LSC reasonably determined that “mere book-keeping separation” could allow federal funds to “cross-subsidize” restricted activities. The second valid purpose of the program integrity reg- ulations is preventing public confusion over whether the government is endorsing the activities of LSC lawyers. Pet. Cert. (99-603) at 77a-80a. Respondents claim this justification is inapplicable to the LSC program because “there is no risk at all that the public will confuse fed- eral government funding of litigation against itself with federal endorsement.” Resp. Br. at 42-43. But the federal government will not be the defendant in lawsuits seek- ing welfare benefits from state and local agencies; in Shuttlesworth v. City of Birmingham, Ala., 394 U.S. 147 (1969) (restriction on participation in parades); Niemotko v. State of Mary- land, 340 U.S. 268 (1951) (prosecution for Bible talks); Schneider v. State of New Jersey, 308 U.S. 147 (1939) (prohibition on distribution of handbills). 18 those cases, the federal government will appear to be subsidizing suits against the states. Congress’s decision not to subsidize these suits is valid, particularly in light of Congress’s virtually simultaneous decision “to increase the flexibility of States” to administer certain welfare laws. 42 U.S.C. § 601(a) (Aug. 1996). Congress legitimately decided that it cannot fairly delegate admin- istration of the welfare laws to the states while simul- taneously funding lawsuits alleging that the states are administering those laws improperly. On this facial challenge, Respondents cannot prove that the program integrity regulations do not rationally serve these two legitimate purposes. As the court of appeals concluded, Respondents have not established “that no set of circumstances exists under which the Act would be valid.” Pet. Cert. (99-903) at 20a (citing Rust, 500 U.S. at 183). Thus, the Court should reject Respon- dents’ suggestion that the regulations are so burdensome and wasteful that no grantee can create an affiliate under them.'4 The few facts before the Court dispell this contention. At least two grantees have established affiliates in com- pliance with the program integrity regulations. Resp. Br. at 39. No Respondent alleges that LSC has questioned its certification of program integrity with respect to an affil- '4 Contrary to Respondents’ suggestion (Resp. Br. at 44-45 n.45), they have brought a facial challenge because they are seeking relief that would invalidate the 1996 Act and/or the program integrity reg- ulations with respect to any LSC lawyer, donor or client, regardless of their circumstances; Respondents are not seeking relief only for themselves, based on how statutes or regulations have been applied to their own individual circumstances. Walters, 473 U.S. at 316 and 336- 39 (O’Connor, J., concurring) (1985). It is particularly obvious that Respondents’ challenge to the program integrity regulations is facial; none of the Respondents is an LSC grantee who alleges that it tried to set up an unsubsidized affiliate, but was unable to do so. 19 iate. In fact, LSC has notified only one grantee that its attempt to create an affiliate did not meet the regula- tions. That incident proves nothing, however, because the grantee did not make a good faith effort to comply with the regulations, but ‘instead simply created two sep- arate corporations that shared all personnel, office space, office equipment, and library facilities. CAJA 538-44. There is no reason to conclude that the program integrity regulations are facially unconstitutional. Finally, Respondents contend that LSC did not have the statutory authority to issue the program integrity regulations, citing a portion of the section-by-section analysis of a 1996 Senate bill. Resp. Br. at 34-35. The language Respondents cite was a comment to a section of similarly worded bill (S. Rep. No. 104-392 at 61-62 (1996)) that was deleted from the 1996 Act as enacted. Thus, if anything can be gleaned from the legislative his- tory of the 1996 Act, it is that Congress deliberately decided not to prohibit affiliate corporations. As the court of appeals correctly recognized, “LSC enjoys ‘the full measure of interpretive authority under the [LSC Act]’ to promulgate” the program integrity regulations. Pet. App. (99-603) at lla. The program integrity regu- lations should be upheld. 20 CONCLUSION For the reasons stated above and in our opening brief, the judgment of the court of appeals, insofar as it inval- idated the suit-for-benefits limitation, should be reversed. Dated: New York, New York August 17, 2000 Respectfully submitted, ALAN LEVINE Counsel of Record STEPHEN L. ASCHER STEPHEN A. WIEDER KRONISH LIEB WEINER & HELLMAN LLP 1114 Avenue of the Americas New York, New York 10036 (212) 479-6000 ~ Counsel for Petitioner Legal Services Corporation --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_0178%3A09. Public record. Not legal advice.