For more than six years, federal officials have pressed for client information and internal policy documents from a prominent California legal services group that provides assistance to the poor.

The inspector general for the Legal Services Corp. (LSC), which funds organizations that offer civil legal services to low-income families and individuals, is investigating whether the nonprofit California Rural Legal Assistance Inc. (CRLA) has abused its receipt of grant money — potentially violating federal law.

The California group’s lawyers have resisted complying with an administrative subpoena, pushing the U.S. Justice Department to ask a judge in Washington’s federal trial court to force the organization to obey the demand for documents. CRLA lost at the trial level last year, and now the closely watched dispute is unfolding in the U.S. Court of Appeals for the D.C. Circuit.

The case spotlights a clash between government oversight of federally funded legal service groups and state-based professional rules of responsibility that govern attorney conduct. Lawyers for CRLA contend disclosure of the information the government has demanded will violate attorney-client confidentiality and intrude on protected work-product documents.

“For all these years, the LSC has regularly audited programs for a wide variety of things,” said Arnold & Porter senior counsel Martin Glick, a lead attorney for the California organization. “They look at records. They investigate complaints. Here we have an overbroad, intrusive, unlimited demand for data that can’t possibly be useful. What’s it about? It comes across as an exercise of raw power.”

The LSC is looking into issues that include whether the California legal group impermissibly solicited clients and engaged in lobbying and political activity. Lawyers for CRLA call the ongoing investigation politically motivated and meritless.

LSC officials deny the investigation is motivated by undue political pressure, saying the probe is valid and that CRLA should not be allowed to shield documents from review.

“The purpose of the [office of the inspector general's] investigation is to conduct a complete and thorough investigation into CRLA’s activities, as requested by Congress,” Laurie Tarantowicz, assistant inspector general for audit at LSC, said in a declaration in the trial court. The information sought, Tarantowicz said, “is critical to a thorough investigation of alleged continued and widespread regulatory violations.”

DOJ Civil Division lawyer Susan Ullman did not respond to messages seeking comment about the dispute. A DOJ spokesman declined to comment.

‘LEGITIMATE CONCERNS’

Since 1966, CRLA has provided legal services for a variety of people, including immigrants and migrant workers, domestic violence victims, individuals with disabilities and school children. Based in San Francisco, CRLA has 22 offices across California. In 2010, the organization said it served 48,617 people.

CRLA highlights in annual reports the group’s work to hold growers accountable for wage and employment discrepancies and the promotion of healthier rural communities. CRLA said it opened more than 6,000 housing and labor cases in 2011 over issues that included the enforcement of fair-housing laws, foreclosure counseling and the collection of unpaid wages.

The pending dispute in the D.C. Circuit is rooted in an anonymous complaint Congress forwarded to LSC’s inspector general in 2005. The complaint said that CRLA was focusing on “impact work” to advance a social and political agenda and devoting resources to farm worker and Latino issues to the detriment of other groups. The LSC inspector general’s office said in an interim report to Congress in 2006 that CRLA’s alleged pushing aside of day-to-day legal services for the poor “to push an impact agenda” was a source of concern.

The government sued CRLA in March 2007 to seek the enforcement of the LSC administrative subpoena, which demands client names and identification information, documents reflecting any work with certain nonprofit groups and internal records about the nature and scope of services provided between 2003 and 2005.

Last November, U.S. District Judge Emmet Sullivan in Washington ruled against CRLA, ordering the enforcement of the subpoena. Sullivan said the LSC’s investigation is “lawful and within the scope of its authority.”

The “solicitation of clients, serving undocumented clients, working fee-generating cases and failing to provide basic legal assistance to a variety of demographic groups in need,” Sullivan said, would mark violations of federal law.

In the trial court, a team from Dechert and the Washington-based Center for Law and Social Policy filed an amicus brief on behalf of the National Legal Aid & Defender Association in support of the California group.

“[E]nforcement of the [office of the inspector general's] subpoena will undermine the legitimate concerns of its client members regarding confidentiality and will substantially undercut the ability of its LSC funded legal aid program members around the country to provide legal representation to vulnerable members of the client community,” wrote Linda Perle, then senior staff attorney with the law and policy group.

Glick and the lawyers for the CRLA, including Bernard Burk of the University of North Carolina School of Law, argue that attorneys under California state law are not authorized to reveal much of the information that the federal government wants to inspect.

The group’s brief in the D.C. Circuit, filed on August 22, said the LSC “seeks to compel CRLA and its attorneys to disregard their duties of nondisclosure regarding confidential information and work product.”

A group of seven current or former CRLA lawyers are participating in the suit in support of CRLA. Morrison & Foerster partner Wendy Garbers, representing the attorneys, said there’s a general assumption that when a person walks in and sees a lawyer, confidentiality attaches to the dialogue.

“From the attorneys’ perspective,” Garbers said, “this case is about giving poor people the same right of confidentiality and privacy as paying clients.”

Mike Scarcella can be contacted at mscarcella@alm.com.