Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 217.0

524US1

Unit: $U81

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172

PHILLIPS v. WASHINGTON LEGAL FOUNDATION

Souter, J., dissenting

III

In sum, we hold that the interest income generated by
funds held in IOLTA accounts is the “private property” of
the owner of the principal. We express no view as to
whether these funds have been “taken” by the State; nor
do we express an opinion as to the amount of “just compen-
sation,” if any, due respondents. We leave these issues to
be addressed on remand. The judgment of the Court of
Appeals is

Afﬁrmed.

Justice Souter, with whom Justice Stevens, Justice

Ginsburg, and Justice Breyer join, dissenting.

The Court holds that “interest income generated by funds
held in IOLTA accounts is the ‘private property’ of the
owner of the principal.” Ante this page.
I do not join in
today’s ruling because the Court’s limited enquiry has led
it to announce an essentially abstract proposition; even as-
suming that the proposition correctly states the law, it may
ultimately turn out to have no signiﬁcance in resolving the
real issue raised in this case, which is whether the Interest
on Lawyers Trust Account (IOLTA) scheme violates the Tak-
ings Clause of the Fifth Amendment. Since the sounder
course would be to vacate the similarly limited judgment of
the Court of Appeals for the Fifth Circuit and remand for
the broader enquiry outlined below, I respectfully dissent.
The Court recognizes three distinct issues implicated by a
takings claim: whether the interest asserted by the plaintiff
is property, whether the government has taken that prop-
erty, and whether the plaintiff has been denied just compen-
sation for the taking.
Ibid. The Court is careful to address
only the ﬁrst of these questions, ibid., which is the only one
on which the Fifth Circuit ruled. See Washington Legal
Foundation v. Texas Equal Access to Justice Foundation,
94 F. 3d 996, 1004 (1996).