Opinion ID: 1241425
Heading Depth: 2
Heading Rank: 1

Heading: Statutory Background: The Program Integrity Regulation

Text: LSC is a private nonprofit corporation established by the United States for the purpose of providing financial support to individuals who would otherwise be unable to afford legal assistance. 42 U.S.C. § 2996b(a). To accomplish this purpose, LSC provides federal funds to local legal assistance programs throughout the United States. Id. § 2996e(a). See generally Legal Services Corporation Act of 1974 (LSC Act), Pub.L. No. 93-355, 88 Stat. 378 (1974) (codified as amended at 42 U.S.C. §§ 2996-2996 l ). By regulation, LSC places certain restrictions on the use of its funds. Id. § 2996e(b)(1). These restrictions include, for example, a prohibition on the use of LSC funding for such activities as lobbying, participating in class action lawsuits, and advocating for the redistricting of political districts. 45 C.F.R. §§ 1612.3, 1617.3, 1632.3. Additionally, LSC requires its recipients to maintain objective integrity and independence from any organization that engages in restricted activities. Id. § 1610.8(a). [1] Requirements for this objective integrity are codified in what is now denominated the program integrity rule or regulation. The requirements include: (1) legal separation of the recipient from the unrestricted organizations; (2) no transfer of LSC funds between the recipient and the unrestricted organization; and (3) the recipient's physical and financial separation from the unrestricted organization. [2] Id. Whether an LSC fund recipient is sufficiently physically and financially separated from non-compliant legal services providers is determined on a case-by-case basis, based upon the totality of the circumstances. Id. § 1610.8(a)(3). The program integrity regulation specifies that mere bookkeeping separation of LSC funds from other funds is not sufficient. Id. Other factors, such as having separate personnel, separate accounting and timekeeping records, separate facilities, and distinguishing forms of identification are relevant but not all-encompassing. Id. Fund recipients must annually certify to the LSC that they comply with the program integrity regulation. Id. § 1610.8(b). In this appeal, Oregon contends that the program integrity regulation violates its Tenth Amendment rights.