Brown v. Legal Foundation of Washington
Four individuals challenged the legality of Washington state’s Interest on Lawyer’s Trust Accounts (IOLTA) program on Fifth Amendment grounds. The IOLTA program uses interest generated by money put in mandatory client trust accounts to fund indigent legal services. The district court held that there was no Fifth Amendment taking. A panel of the court of appeals reversed. The Ninth Circuit, en banc, affirmed the district court, holding that (1) there was no taking of the plaintiffs’ property, and (2) even if there was a taking, there was no constitutional violation because the compensation due to the plaintiffs was nil.
Questions Presented:
1. Whether the regulatory scheme for funding state legal services by systematically seizing this property violates the Takings Clause of the Fifth Amendment to the Constitution so that the property
owners are entitled to relief.
2. Whether injunctive relief is available to enjoin a State from committing such a violation of the Takings Clause, where the legislative scheme in issue clearly contemplates that no compensation
would be paid to the owners of the interest taken, and where the small amount due in any individual case often renders recovery through litigation impractical.
