Opinion ID: 775593
Heading Depth: 5
Heading Rank: 3

Heading: Character of Government Action

Text: 69 Brown and Hayes concede that they would have no interest without IOLTA, but they argue that, once interest is created, they have the right to determine what -if anything-is done with the interest. Viewing the accrued interest as its own entity, divorced from the principal, for the purpose of characterizing the extent of the property taken, Brown and Hayes assert that because the IOLTA rules dictate that all the interest earned on IOLTA accounts must go to the Legal Foundation of Washington, the IOLTA program is the equivalent of a 100 percent physical invasion of their property. We disagree. 70 The IOLTA rules are better viewed as a regulation of the uses of Brown's and Hayes's property, consisting of the principal and the accrued interest in aggregation. That said, the character of the government action is best viewed in the context of the industry it regulates. Banking is a heavily regulated industry, and the ability of particular types of deposits to earn interest has often been the subject of banking regulations. In fact, without the Federal Government's regulations regarding what types of accounts can earn interest, the IOLTA program may never have been born. Moreover, the ability to practice a profession -and the conduct expected of those who do-is also heavily regulated. Lawyers have always been held to the highest legal and ethical standards. As part of their state bar membership, lawyers in Washington are encouraged to provide legal services to persons of limited means or to public service or charitable groups.  Wash. Rules of Prof'l Conduct R. 6.1. With or without IOLTA, they are required to segregate their clients' funds from their own to ensure that funds are not used improperly. Wash. Rules of Prof'l Conduct R. 1.14. When LPOs are admitted to perform a limited practice of law, they are held to the same legal and ethical standards as lawyers. Thus, they, too, are expected to safeguard their clients' property and to do their best to ensure that the legal system is available to all who need it. Viewed in this context, the IOLTA regulations are not out of character for either the commercial industry or the professions they affect. 71 The Takings Clause does not prevent the Government from being able to regulate how people use their property but limits that ability to what is just and fair.  Andrus, 444 U.S. at 66-67. Although [t]he government may impose regulations to adjust rights and economic interests among people for the public good, it may not force `some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'  Wash. Legal Found. v. Mass. Bar Found., 993 F.2d at 974 (citation omitted). Here, neither Brown nor Hayes is being singled out to bear a burden that should be borne by the public as a whole. They, as participants in our legal system, are required to place their money in IOLTA trust accounts that generate funds at no cost to them and that expand access to the legal system from which they benefit. Given the highly regulated nature of the banking and professional industries the IOLTA rules affect, this additional unobtrusive regulation does not exceed what is just and fair -especially where Brown and Hayes would have earned no interest absent IOLTA. We therefore conclude that Washington State's IOLTA program does not take either Brown's or Hayes's property.