Assume, in response to the Supreme Court's decision in Kelo v. City of New London, 545 U.S. 469 (2005), that your state legislature enacts a law that bans the government from taking private property and giving it to another private party. If you view IOLTA programs as an example of a private property taking, has your state — through its post-Kelo legislative response — made your IOLTA programs illegal?
My colleague, Dru Stevenson (pictured), writes about this issue in a paper that he recently posted to SSRN. Here's the abstract:
IOLTA
programs are a very popular mechanism for funding legal services for
the poor, and are now operating in every state. As a result, however,
IOLTA has become the most frequent and widespread instance of
government takings of private property in America. The post-Kelo era
has seen increasing legislative restrictions on takings, and the
post-Kelo reforms in several states appear to have inadvertently made
their respective IOLTA programs illegal by banning all takings where
the government immediately gives the taken property to another private
party (in this case, private poverty-law foundations and legal aid
clinics).
IOLTA takings also highlight a puzzling gap in our
legal system between eminent domain law and administrative law. Eminent
domain law tends to downplay the importance of procedure itself for
government actions, often allowing states to proceed without regard to
procedural due process as long as the victims of takings can bring
inverse condemnation actions after the fact. Administrative law, in
contrast, includes a long line of Supreme Court precedents that
emphasize the importance of procedure itself as a component of due
process and fairness; state infringements on the “property interests”
of individuals can face reversal simply because an agency failed to
provide a fair hearing beforehand.
The ensuing discussion
also reaches three inherent tensions or puzzles with public funding of
legal services for the poor: crowding-out effects,
monopoly/single-payer system problems, and the moral hazard problems
with providing free lawyers for the poor. This article addresses,
apparently for the first time, these three (rather significant)
concerns as they pertain to IOLTA or legal services in general. I offer
some modest policy reforms in response to these issues.
programs are a very popular mechanism for funding legal services for
the poor, and are now operating in every state. As a result, however,
IOLTA has become the most frequent and widespread instance of
government takings of private property in America. The post-Kelo era
has seen increasing legislative restrictions on takings, and the
post-Kelo reforms in several states appear to have inadvertently made
their respective IOLTA programs illegal by banning all takings where
the government immediately gives the taken property to another private
party (in this case, private poverty-law foundations and legal aid
clinics).
IOLTA takings also highlight a puzzling gap in our
legal system between eminent domain law and administrative law. Eminent
domain law tends to downplay the importance of procedure itself for
government actions, often allowing states to proceed without regard to
procedural due process as long as the victims of takings can bring
inverse condemnation actions after the fact. Administrative law, in
contrast, includes a long line of Supreme Court precedents that
emphasize the importance of procedure itself as a component of due
process and fairness; state infringements on the “property interests”
of individuals can face reversal simply because an agency failed to
provide a fair hearing beforehand.
The ensuing discussion
also reaches three inherent tensions or puzzles with public funding of
legal services for the poor: crowding-out effects,
monopoly/single-payer system problems, and the moral hazard problems
with providing free lawyers for the poor. This article addresses,
apparently for the first time, these three (rather significant)
concerns as they pertain to IOLTA or legal services in general. I offer
some modest policy reforms in response to these issues.
Dru tells me that he continues to welcome comments before he circulates the paper to law journals in a few weeks. His email address is dstevenson@stcl.edu.
If you view IOLTA programs as an example of a private property taking, has your state — through its post-Kelo legislative response..