Thank you for sharing!

Your article was successfully shared with the contacts you provided.
in a 5-4 decision, the justices rejected a property rights challenge to state IOLTA programs-the second-largest source of funds for legal services for the poor. Interest on lawyers’ trust accounts programs, authorized by statute, require lawyers to pool client funds, which are incapable of earning net interest on their own, in IOLTA accounts. Brown v. Legal Foundation of Washington, No. 01-1325. The programs generate approximately $160 million a year for legal services. The court concluded that the IOLTA program does not violate the Fifth Amendment prohibition against the taking of private property without just compensation. According to the justices, the Fifth Amendment imposes two conditions on the state’s authority to confiscate private property: The taking must be for a “public use” and “just compensation” must be paid to the owner. IOLTA programs, in serving the compelling interest of providing legal services to the poor, qualify as “public use.” As for the “just compensation” required by the Fifth Amendment, this is measured by the property owner’s loss rather than the government’s gain. Any monetary compensation must be meas-ured by net losses rather than the value of the public’s gain. Consequently, if the net loss is zero, the compensation that is due is also zero. Stevens delivered the court’s opinion, in which O’Connor, Souter, Ginsburg and Breyer joined. Scalia filed a dissenting opinion, in which Rehnquist, Kennedy and Thomas joined.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.