Document ID: ./input/supremecourt_opinions/opinions/boundvolumes/524bv.pdf
Page Number: 213.0

524US1

Unit: $U81

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

168

PHILLIPS v. WASHINGTON LEGAL FOUNDATION

Opinion of the Court

States v. General Motors Corp., 323 U. S. 373, 377–378 (1945)
(property “denote[s] the group of rights inhering in the citi-
zen’s relation to the physical thing, as the right to . . . dispose
of it”). Similarly, the Texas rules governing the distribution
of marital assets have a historical pedigree tracing back to
the marital property laws adopted by the Texas Congress
only four years after Texas became an independent republic.
W. McClanahan, Community Property Law in the United
States § 3:23, pp. 123–124 (1982). But petitioners point to no
“background principles” of property law, Lucas, supra, at
1030, that would lead one to the conclusion that the owner of
a fund temporarily deposited in an attorney trust account
may be deprived of the interest the fund generates.

Petitioners further contend that “interest follows princi-
pal” is an incomplete explication of the Texas rule. Reply
Brief for Petitioners 11. Petitioners explain that interest
follows principal in Texas only if the interest is “allowed
by law or ﬁxed by the parties.” Cavnar v. Quality Control
Parking, Inc., 696 S. W. 2d 549, 552 (Tex. 1985). We fail
to see how this assists petitioners’ cause. We agree that
the government has great latitude in regulating the cir-
cumstances under which interest may be earned. As we
explained in Andrus v. Allard, 444 U. S. 51, 66 (1979), “an-
ticipated gains ha[ve] traditionally been viewed as less
compelling than other property-related interests.” But
petitioners do not argue that the payment of interest on cli-
ent funds deposited in an attorney trust account is not “al-
lowed by law” in Texas. Rather, they argue that interest
actually “earned” by funds held in IOLTA accounts, Texas
IOLTA Rule 9, is not the private property of the owner of
the principal. However, regardless of whether the owner of
the principal has a constitutionally cognizable interest in the
anticipated generation of interest by his funds, any interest
that does accrue attaches as a property right incident to the
ownership of the underlying principal.