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Neither the latitude for government speech nor its rationale applies to subsidies for private speech in every instance. It does not follow that viewpoint-based restrictions are proper when the government does not itself speak or subsidize transmittal of a message it favors but instead expends funds to encourage a diversity of views from private speakers.
The Legal Services Corporation Act authorizes petitioner Legal Services Corporation (LSC) to distribute funds appropriated by Congress to local grantee organizations providing free legal assistance to indigent clients in, inter alia, welfare benefits claims. In every annual appropriations Act since 1996, Congress has prohibited LSC funding of any organization that represented clients in an effort to amend or otherwise challenge existing welfare law. Grantees cannot continue representation in a welfare matter even where a constitutional or statutory validity challenge becomes apparent after representation is well under way. Respondents -- lawyers employed by LSC grantees, together with others -- filed suit to declare, inter alia, the restriction invalid. The District Court denied them a preliminary injunction, but the Second Circuit invalidated the restriction, finding it impermissible viewpoint discrimination that violated the First Amendment.
Did the funding restriction violate the First Amendment?
The court concluded that the Legal Services Corporation Act, 42 U.S.C.S. § 2996 et seq., facilitated private speech, rather than promoted a governmental message, because attorneys who were funded by the program, such as respondents, spoke on behalf of their clients in pursuing welfare claims. However, Congress had impermissibly restricted that speech by designing a subsidy to limit the arguments that respondents were allowed to make before the judicial branch. In effect, Congress had attempted to insulate its own laws from legitimate judicial challenge by defining the scope of the litigation it funded to exclude certain vital theories and ideas. Such a restriction violated the First Amendment and was inconsistent with the accepted separation of powers principle.