In New York, the interest from this pool is then distributed to organizations providing legal services to the poor. But the Court in Phillips did not decide the constitutionality of that program or any other. For all we know at this point, the alarm sounded may be a false alarm. Phillips may turn out to be nothing more than an academic exercise in property theory, because the Court addressed only one of the three essential elements of the taking claim. Banks then kept the interest actually earned on the deposits and used it to increase their own profits.
Compensation is measured by the loss to the property owner.
More importantly, the programs should ultimately be safe from a takings claim altogether. While that constitutional claim is being decided, however, lawyers in New York can, and indeed, must continue to comply with IOLA requirements dictated by law. The decision in Phillips has not in any way affected the statute or regulations in this state. But New York lawyers here should do more than follow the letter of the IOLA law. We should be actively supporting the program, which provides badly needed funds for legal services to the poor.