Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 225.0

524US1

Unit: $U81

[09-06-00 20:27:26] PAGES PGT: OPIN

180

PHILLIPS v. WASHINGTON LEGAL FOUNDATION

Breyer, J., dissenting

is distributed to groups that represent low-income individu-
als rather than to the lawyers or their clients who own the
funds.

Insofar as factual circumstances such as these raise a
Fifth Amendment question, I agree with Justice Souter
that the question is whether Texas, by requiring the plac-
ing of the funds in special IOLTA accounts and depriving
the funds’ owners of the subsequently earned interest has
temporarily “taken” what is undoubtedly “private prop-
erty,” namely, the client’s funds, i. e., the principal, without
“just compensation.” To answer this (appropriately framed)
question, the parties and the lower courts would have to
in the fashion
consider whether the use of the principal
dictated by the IOLTA rules amounts to a deprivation of a
property right, and, if so, whether the government’s “tak-
ing” required compensating the owner of the funds, where
it did not deprive the funds’ owners of interest they might
have otherwise received. But the Court of Appeals did not
address this latter question. See ante, at 179 (Souter, J.,
dissenting).

Although I believe it wrong to separate Takings Clause
analysis of the property rights at stake from analysis of
the alleged deprivation, I have considered the question pre-
sented on its own terms. And, on the majority’s as-
sumptions, I believe that its answer is not the right one.
The majority’s answer rests upon the use of a legal truism,
namely, “interest follows principal,” and its application of a
particular case, namely, Webb’s Fabulous Pharmacies, Inc.
v. Beckwith, 449 U. S. 155 (1980). See ante, at 166, 171.
In
my view, neither truism nor case can answer the hypothetical
question the Court addresses.

The truism does not help because the question presented
assumes circumstances that differ dramatically from those in
which interest is ordinarily at issue. Ordinarily, prin-
cipal is capable of generating interest for whoever holds it.
Here, by the very terms of the question, we must assume