Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 218

524US1

Unit: $U81

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Cite as: 524 U. S. 156 (1998)

173

Souter, J., dissenting

The afﬁrmative answer given by the Court and the Fifth
Circuit to the question whether IOLTA interest attributable
to a client’s funds is the client’s property states, in essence,
a proposition of state law, which is one source of property
interests entitled to federal constitutional protection, see
Board of Regents of State Colleges v. Roth, 408 U. S. 564, 577
(1972), and Lucas v. South Carolina Coastal Council, 505
U. S. 1003, 1030 (1992).
In this instance the relevant state
law is said to embrace the general principle that property in
interest income follows ownership of the principal on which
the interest is earned, ante, at 164–166, and n. 4, and the
Court treats any income generated by a client’s funds like
income that the client could derive directly through a method
of money management or investment that costs more than it
produced, ante, at 169–171.

In addressing only the issue of the property interest, leav-
ing the questions of taking and compensation for a later day
in the litigation of respondents’ action, the Court and the
Court of Appeals have, however, postponed consideration of
the most salient fact relied upon by petitioners in contesting
respondents’ Fifth Amendment claim: that the respondent
client would effectively be barred from receiving any net
interest on his funds subject to the state IOLTA rule by
the combination of an unchallenged federal banking statute
and regulation, 12 U. S. C. § 1832(a); 12 CFR § 204.130 (1997);
a separate, unchallenged Texas rule of attorney discipline,
Texas Bar Rules, Art. 10, § 9, Rule 1.14(b); and unchallenged
Internal Revenue Service interpretations of the Tax Code,
Rev. Rul. 81–209, 1981–2 Cum. Bull. 16; Rev. Rul. 87–2,
1987–1 Cum. Bull. 18. The argument for the view contrary
to the one taken by the Court would emphasize that salient
fact right now. The view that the client has no cognizable
property right in the IOLTA interest is said to rest not only
on a different understanding of the scope of the general prin-