Fee-Generating Cases; Use of Non-LSC Funds, Transfers of LSC Funds, Program Integrity; Attorneys' Fees, 21506-21508 [2010-9397]
Download as PDF
<![CDATA[
21506
Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Rules and Regulations
Special Pay is effective on December 19,
2009, the enactment date of the 2010
Department of Defense Appropriations
Act.
FOR FURTHER INFORMATION CONTACT:
LTC
Brigitte Williams, (703) 614–3973.
SUPPLEMENTARY INFORMATION:
Need for Correction
The words of issuance that were set
out within the final rule must be
corrected to allow for the proper
codification of the rule’s regulatory text.
Correction
In rule FR Doc. 2010–8739, published
on April 16, 2010 (75 FR 19878) make
the following correction. On page
19879, in the first column, in the words
of issuance, correct the word ‘‘added’’ to
read ‘‘revised’’.
Dated: April 20, 2010.
Mitchell S. Bryman,
Alternate OSD Federal Register Liaison
Officer, Department of Defense.
Privacy Note: The Department’s policy for
comments received from members of the
public (including those comments submitted
by mail, commercial delivery, or hand
delivery) is to make these submissions
available for public viewing in their entirety
on the Federal eRulemaking Portal at:
https://www.regulations.gov. Therefore,
commenters should be careful to include in
their comments only information that they
wish to make publicly available on the
Internet.
[FR Doc. 2010–9541 Filed 4–23–10; 8:45 am]
BILLING CODE 5001–06–P
DEPARTMENT OF EDUCATION
34 CFR Part 280
RIN 1855–AA07
[Docket ID ED–2010–OII–0003]
Magnet Schools Assistance Program
WReier-Aviles on DSKGBLS3C1PROD with RULES
AGENCY: Office of Innovation and
Improvement, Department of Education.
ACTION: Interim final rule; reopening
comment period.
SUMMARY: On March 4, 2010, the
Department of Education published in
the Federal Register an interim final
rule and requested comments on that
rule for the Magnet Schools Assistance
Program (MSAP). The rule became
effective March 4, 2010, and the
comment period for the interim final
rule ended on April 5, 2010. During the
comment period, the Department
received requests asking that the
Department extend the comment period
for the interim final rule. This document
announces the reopening of the
comment period.
DATES: The Department reopens the
public comment period for the interim
final rule that was published in the
Federal Register on March 4, 2010
(75 FR 9777). Comments must be
received on or before May 17, 2010.
ADDRESSES: Submit your comments
through the Federal eRulemaking Portal
or via postal mail, commercial delivery,
or hand delivery. We will not accept
VerDate Nov<24>2008
15:07 Apr 23, 2010
Jkt 220001
comments by fax or by e-mail. Please
submit your comments only one time, in
order to ensure that we do not receive
duplicate copies. In addition, please
include the Docket ID at the top of your
comments.
• Federal eRulemaking Portal: Go to
https://www.regulations.gov to submit
your comments electronically.
Information on using Regulations.gov,
including instructions for accessing
agency documents, submitting
comments, and viewing the docket is
available on the site under ‘‘How To Use
This Site.’’
• Postal Mail, Commercial Delivery,
or Hand Delivery: If you mail or deliver
your comments about these interim final
regulations, address them to Anna
Hinton, U.S. Department of Education,
400 Maryland Avenue, SW., Room
4W229, Washington, DC 20202.
FOR FURTHER INFORMATION CONTACT:
Anna Hinton, U.S. Department of
Education, 400 Maryland Avenue, SW.,
Room 4W229, Washington, DC 20202.
Telephone: (202) 260–1816 or by e-mail:
FY10MSAPCOMP@ed.gov.
If you use a telecommunications
device for the deaf (TDD), call the
Federal Relay Service (FRS), toll free, at
1–800–877–8339.
Individuals with disabilities may
obtain this document in an accessible
format (e.g., braille, large print,
audiotape, or computer diskette) on
request to the contact person listed
above.
SUPPLEMENTARY INFORMATION: The
Department reopens the public
comment period for the interim final
rule that was published in the Federal
Register on March 4, 2010 (75 FR 9777)
because we have determined that a
longer comment period would provide
local educational agencies submitting
grant applications under the MSAP for
fiscal year (FY) 2010 funding and other
interested parties an opportunity to
submit comments on the interim rule
after the May 3, 2010 application
deadline date announced for the FY
2010 grant competition in the notice
inviting applications published on
March 4, 2010 (75 FR 9879).
The Department believes this
approach will improve the quality of
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
information available for rulemaking, so
the Secretary is reopening the comment
period.
Dated: April 16, 2010.
James H. Shelton, III,
Assistant Deputy Secretary for Innovation and
Improvement.
[FR Doc. 2010–9195 Filed 4–23–10; 8:45 am]
BILLING CODE 4000–01–P
LEGAL SERVICES CORPORATION
45 CFR Parts 1609, 1610, and 1642
Fee-Generating Cases; Use of NonLSC Funds, Transfers of LSC Funds,
Program Integrity; Attorneys’ Fees
Legal Services Corporation.
Final rule.
AGENCY:
ACTION:
SUMMARY: On February 11, 2010, LSC
issued an Interim Final Rule and
Request for Comments repealing its
regulatory prohibition on the claiming
of, and the collection and retention of
attorneys’ fees pursuant to Federal and
State law permitting or requiring the
awarding of such fees. The action was
taken in accordance with the
elimination on the statutory prohibition
on attorneys’ fees in LSC’s FY 2010
appropriation legislation. The rule
moved provisions on accounting for and
use of attorneys’ fees and acceptance of
reimbursements from clients from part
1642 (which was eliminated) to part
1609 of LSC’s regulations. LSC also
made technical changes to its
regulations to remove cross references to
the obsolete statutory and regulatory
citations. With this document, LSC is
responding to the comments received
and confirming the February 11 rule as
final without change.
DATES: This final rule is effective April
26, 2010.
FOR FURTHER INFORMATION CONTACT:
Mattie Cohan, Senior Assistant General
Counsel, Office of Legal Affairs, Legal
Services Corporation, 3333 K Street,
NW., Washington DC 20007; 202–295–
1624 (ph); 202–337–6519 (fax);
mcohan@lsc.gov.
SUPPLEMENTARY INFORMATION:
Background
LSC’s FY 1996 appropriation
legislation provided that none of the
funds appropriated in that Act could be
used to provide financial assistance to
any person or entity (which may be
referred to in this section as a recipient)
that claims (or whose employee claims),
or collects and retains, attorneys’ fees
pursuant to any Federal or State law
permitting or requiring the awarding of
E:\FR\FM\26APR1.SGM
26APR1
WReier-Aviles on DSKGBLS3C1PROD with RULES
Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Rules and Regulations
such fees. Section 504(a)(13), Public
Law 104–134, 110 Stat. 1321 (April 26,
1996). Since appropriations legislation
expires with the end of the Fiscal Year
to which it applies, for the statutory
restriction on attorneys’ fees to remain
in place by statute, it needed to be, and
was, carried forth in each subsequent
appropriation law by reference. See,
e.g., Consolidated Appropriations Act,
2009, Public Law 111–8, 123 Stat. 524
(March 11, 2009).
LSC adopted regulations found in
1996 and 1997 which implemented the
statutory attorneys’ fees restriction. 45
CFR Part 1642; 61 FR 45762 (August 29,
1996); 62 FR 25862 (May 12, 1997). The
attorneys’ fees regulation restates the
basic prohibition on claiming or
collecting and retaining attorneys’ fees,
providing that except as permitted by
§ 1642.4 (providing exceptions cases
filed prior to the prohibition and for
cases undertaken by private attorneys
providing pro bono services in
connection with a recipient’s private
attorney involvement program), no
recipient or employee of a recipient may
claim, or collect and retain attorneys’
fees in any case undertaken on behalf of
a client of the recipient. 46 CFR 1642.3.
The regulation provides further
guidance to recipients by, among other
things, providing a regulatory definition
of attorneys’ fees; setting forth rules for
the applicability of the restriction to
private attorneys providing legal
assistance to a recipient’s private
attorney involvement program; and
providing express authority to
recipients to accept reimbursements of
costs from a client. The regulation also
sets forth rules for the accounting for
and use of those attorneys’ fees which
recipients are not prohibited from
claiming, collecting or retaining.
On December 16, 2009 President
Obama signed the Consolidated
Appropriations Act of 2010 into law.
Public Law 111–117. This act provides
LSC’s appropriation for FY 2010. Like
its predecessors, this law incorporates
the various restrictions first imposed by
the FY 1996 legislation by reference.
However, section 533 of that same law
also provides that Section 504(a) of the
Departments of Commerce, Justice, and
State, the Judiciary, and Related
Agencies Appropriations Act, 1996 (as
contained in Pub. L. 104–134) is
amended by striking paragraph (13).
Taken together, these provisions serve
to incorporate by reference all of the
restrictions in section 504 of the FY
1996 law, except for paragraph (a)(13),
which contained the restriction on
attorneys’ fees. As such, there is no
current statutory restriction on LSC
providing the money FY 2010
VerDate Nov<24>2008
15:07 Apr 23, 2010
Jkt 220001
appropriated to it to any recipient
which claims, or collects and retains
attorneys’ fees
Repeal of Part 1642 and Issuance of the
Interim Final Rule
The current law lifts the statutory
restriction, but does not affirmatively
provide recipients the right to claim or
collect and retain attorneys’ fees, nor
does it prohibit LSC from restricting a
recipient’s ability to claim or collect and
retain attorneys’ fees. As such, in
accordance with LSC inherent
regulatory authority, the regulation
remained in place notwithstanding the
lifting of the statutory restriction unless
and until repealed. At its Board Meeting
on January 30, 2010, the LSC Board of
Director’s determined that retaining the
regulatory restriction was no longer
either necessary or appropriate
instructed staff to publish an Interim
Final Rule repealing its regulatory
prohibition on the claiming of, and the
collection and retention of attorneys’
fees pursuant to Federal and State law
permitting or requiring the awarding of
such fees. LSC published the Interim
Final Rule and Request for Comments
implementing the Board’s direction on
February 11, 2010, 75 FR 6816. The
Interim Final Rule also moved
provisions on accounting for and use of
attorneys’ fees and acceptance of
reimbursements from clients from Part
1642 (which is being eliminated) to Part
1609 of LSC’s regulations. LSC also
made technical changes to Part 1609
and Part 1610 of its regulations to
remove cross references to the obsolete
statutory and regulatory citations. The
Interim Final Rule became effective on
March 15, 2010.
LSC received ten (10) comments on
the Interim Final Rule. All of the
comments strongly supported the
changes reflected in the Interim Final
Rule and urged LSC to issue a Final
Rule making permanent the Interim
Final Rule without further amendment.1
At its meeting of April 17, 2010 the
Board of Directors adopted the Interim
Final Rule as permanent and instructed
staff to publish this Final Rule in the
Federal Register. Because this Final
Rule is retaining the changes made by
the Interim Final Rule without further
amendment, prior notice is unnecessary
and contrary to the public interest. See
5 U.S.C. 553(b)(3)(B) and 553(d)(3).
Accordingly, this Final Rule is effective
upon publication.
1 One commenter requested that LSC provide
clarification in two places of the preamble. LSC has
responded to this request and the preamble reflects
the commenter’s concerns.
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
21507
In adopting the Interim Final Rule
and this Final Rule, LSC’s
determination reflects a number of
considerations. First, LSC notes that the
lifting of the restriction indicates that
Congress itself has had a change of heart
regarding this restriction. Although
Congress did not prohibit LSC from
retaining the restriction, the fact that
Congress chose not to re-impose this
particular restriction (and no others)
does indicate that support for this
restriction has waned and that the
policy arguments in support of the
original restriction are no longer
reflective of the will of Congress. Rather,
the legislative history suggests that
Congress chose not to re-impose the
attorneys’ fees restriction in express
recognition of the fact that the
restriction imposes several significant
burdens on recipient. See, H. Rpt. 111–
149 at p. 163; Transcript of Hearing of
the Subcommittee on Commerce, Justice
and Science of the House Committee of
Appropriations of April 1, 2009 at pp.
220–223. As such, LSC believes that
repealing the regulatory restriction is
consistent with the expectations of
Congress.
Moreover, LSC agrees that the
restriction imposes unnecessary
burdens on recipients and places clients
at a disadvantage with respect to other
litigants. Specifically, the ability to
make a claim for attorneys’ fees is often
a strategic tool in the lawyers’ arsenal to
obtain a favorable settlement from the
opposing side. Restricting a recipient’s
ability to avail itself of this strategic tool
puts clients at a disadvantage and
undermines clients’ ability to obtain
equal access to justice. The attorneys’
fees restriction can also be said to
undermine one of the primary purposes
of fee-shifting statutes, namely to
punish those who have violated the
rights of persons protected under such
statutes. In addition, in a time of
extremely tight funding, the inability of
a recipient to obtain otherwise legally
available attorneys’ fees places an
unnecessary financial strain on the
recipient. If a recipient could collect
and retain attorneys’ fees, it would free
up other funding of the recipient to
provide services to additional clients
and help close the justice gap.2 More
2 It should be noted that the LSC Act and the
implementing regulatory restriction on feegenerating cases found at 45 CFR Part 1609 restrict
recipients from taking fee-generating cases. This
restriction is not affected by the lifting of the
statutory ban on the claiming and collecting and
retention of attorneys’ fees and is not be affected by
any regulatory amendment to Part 1642.
Accordingly, amendment of Part 1642 does not
have an adverse impact on the private bar nor
provide any incentive for recipients to seek out fee-
E:\FR\FM\26APR1.SGM
Continued
26APR1
WReier-Aviles on DSKGBLS3C1PROD with RULES
21508
Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Rules and Regulations
fundamental, the restriction results in
clients of grantees being treated
differently and less advantageously than
all other private litigants, which LSC
believes is unwarranted and
fundamentally at odds with the
Corporation’s Equal Justice mission.
This action makes permanent the
Interim Final Rule’s lifting of the
regulatory prohibition on claiming, or
collecting and retaining attorneys’ fees
available under Federal or State law
permitting or requiring the awarding of
such fees. Accordingly as of March 15,
2010, recipients were and remain
permitted make claims for attorneys’
fees in any case in which they are
otherwise legally permitted to make
such a claim. Recipients are also
permitted to collect and retain
attorneys’ fees whenever such fees are
awarded to them.
With the repeal of the restriction,
recipients are permitted to claim and
collect and retain attorneys’ fees with
respect to any work they have
performed for which fees are available
to them, without regard to when the
legal work for which fees are claimed or
awarded was performed. LSC
considered whether recipients should
be limited seek or obtain attorneys fees
related to ‘‘new’’ work; that is, work
done only as of the date of the statutory
change or the effective date of the
Interim Final Rule. LSC rejected that
position because the attorneys’ fees
prohibition applies to the particular
activity of seeking and receiving
attorneys’ fees, but is irrelevant to the
permissibility of the underlying legal
work. Limiting the ability of recipients
to seek and receive attorneys’ fees on
only future case work would create a
distinction between some work and
other work performed by a recipient, all
of which was permissible when
performed. LSC continues to find such
a distinction to be artificial and not
necessary to effectuate Congress’
intention.
LSC also believes that not limiting the
work for which recipients may now seek
or obtain attorneys’ fees will best afford
recipients the benefits of the lifting of
the restriction. There may well be a
number of ongoing cases where the
newly available option of the
potentiality of attorneys’ fees will still
be effective to level the playing field
and afford recipients additional leverage
with respect to opposing counsel in
those cases. Likewise, being able to
obtain attorneys’ fees in cases in which
prior work has been performed would
likely help relieve more financial
generating cases at the expense of the needs of other
clients.
VerDate Nov<24>2008
15:07 Apr 23, 2010
Jkt 220001
pressure on recipients than a ‘‘new work
only’’ implementation choice would
because it would increase sources and
amount of work for which fees might
potentially be awarded.
are applicable to a recipient’s non-LSC
funds. Subsection (b)(9) was the
provision that references the attorneys’
fees restriction (504(a)(13) and Part
1642) and which became obsolete.
Amendment of Part 1609 and Part 1610
List of Subjects in 45 CFR Parts 1609,
1610, and 1642
As noted above, Part 1642 contains
two provisions not directly related to
the restriction on claiming and
collecting attorneys’ fees. These
provisions address the accounting for
and use of attorneys’ fees and the
acceptance of reimbursement from a
client. 45 CFR 1642.5 and 1642.6. These
provisions used to be incorporated into
LSC’s regulation on fee-generating cases
at 45 CFR Part 1609, but were separated
out and included in the new Part 1642
regulation when it was adopted.
Amending these provisions was not
necessary to effectuate the lifting of the
attorneys’ fees restriction and they
provide useful guidance to recipients. In
fact, with recipients likely collecting
and retaining fees more often than they
have since 1996, the provision on
accounting for and use of attorneys’ fees
will be of greater importance than it has
been. Retaining these provisions would
continue to provide clear guidance to
the benefit of both recipients and LSC.
Accordingly, LSC is adopting as
permanent the changes which moved
these provisions back into Part 1609 as
§§ 1609.4 and 1609.5, with only
technical amendment to the regulatory
text to remove references to Part 1642
and which redesignated § 1609.4 as
§ 1609.6.3
LSC is also adopting as permanent
technical conforming amendments to
delete references to Part 1642 and the
attorneys’ fees statutory prohibition that
are now obsolete. Having obsolete and
meaningless regulatory provisions is not
good regulatory practice and can at the
very least lead to unnecessary
confusion. Accordingly, LSC adopts
permanently the deletion of paragraph
(c) of § 1609.3, General requirements, to
eliminate that paragraph’s reference to
the attorneys’ fees restriction in Part
1642. Similarly, LSC adopts
permanently a technical conforming
amendment to its regulation at Part
1610. Part 1610 sets forth in regulation
the application of the appropriations
law restrictions to a recipient’s non-LSC
funds. Section 1610.2 sets forth the list
of the restrictions as contained in
section 504 of the FY 1996
appropriations act, and the
implementing LSC regulations which
3 For additional information about the provision
on the accounting for attorneys’ fees, see the
preamble to the 1997 Attorneys’ Fees Final Rule: 62
FR 25862 (May 12, 1997) at 25864.
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
Grant programs—Law, Legal services.
Accordingly, for reasons set forth
above, and under the authority of 42
U.S.C. 2996g(e), LSC hereby adopts the
interim rule published February 11,
2010 (75 FR 6816) as final without
change.
■
Mattie Cohan,
Senior Assistant General Counsel.
[FR Doc. 2010–9397 Filed 4–23–10; 8:45 am]
BILLING CODE 7050–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
48 CFR Chapter 3
Health and Human Services
Acquisition Regulation; Corrections
AGENCY: Department of Health and
Human Services.
ACTION: Correcting amendments.
SUMMARY: This action corrects minor
errors, inconsistencies and omissions in
the final rule, which revised the Health
and Human Services Acquisition
Regulation (HHSAR) to implement
statutes and government-wide mandates
enacted or issued since December 2006.
DATES: These corrections are effective
on April 26, 2010.
FOR FURTHER INFORMATION CONTACT:
Cheryl Howe, Procurement Analyst,
U.S. Department of Health and Human
Services, Office of the Assistant
Secretary for Financial Resources, Office
of Grants and Acquisition Policy and
Accountability, Division of Acquisition,
202–690–5552 (voice);
cheryl.howe@hhs.gov (e-mail); 202–690–
8772 (facsimile).
SUPPLEMENTARY INFORMATION:
I. Background
HHS published a revision of the entire
HHSAR (48 CFR parts 301 through 370)
in the Federal Register on November 27,
2009 to reflect changes since the last
revision was published in the Federal
Register in December 2006. No adverse
comments were received.
The revisions included, but were not
limited to, the following:
A. Revising Subpart 301.6 regarding
training and certification of acquisition
officials to implement federal
acquisition certification programs.
E:\FR\FM\26APR1.SGM
26APR1
]]>Agencies
[Federal Register Volume 75, Number 79 (Monday, April 26, 2010)]
[Rules and Regulations]
[Pages 21506-21508]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-9397]
=======================================================================
-----------------------------------------------------------------------
LEGAL SERVICES CORPORATION
45 CFR Parts 1609, 1610, and 1642
Fee-Generating Cases; Use of Non-LSC Funds, Transfers of LSC
Funds, Program Integrity; Attorneys' Fees
AGENCY: Legal Services Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: On February 11, 2010, LSC issued an Interim Final Rule and
Request for Comments repealing its regulatory prohibition on the
claiming of, and the collection and retention of attorneys' fees
pursuant to Federal and State law permitting or requiring the awarding
of such fees. The action was taken in accordance with the elimination
on the statutory prohibition on attorneys' fees in LSC's FY 2010
appropriation legislation. The rule moved provisions on accounting for
and use of attorneys' fees and acceptance of reimbursements from
clients from part 1642 (which was eliminated) to part 1609 of LSC's
regulations. LSC also made technical changes to its regulations to
remove cross references to the obsolete statutory and regulatory
citations. With this document, LSC is responding to the comments
received and confirming the February 11 rule as final without change.
DATES: This final rule is effective April 26, 2010.
FOR FURTHER INFORMATION CONTACT: Mattie Cohan, Senior Assistant General
Counsel, Office of Legal Affairs, Legal Services Corporation, 3333 K
Street, NW., Washington DC 20007; 202-295-1624 (ph); 202-337-6519
(fax); mcohan@lsc.gov.
SUPPLEMENTARY INFORMATION:
Background
LSC's FY 1996 appropriation legislation provided that none of the
funds appropriated in that Act could be used to provide financial
assistance to any person or entity (which may be referred to in this
section as a recipient) that claims (or whose employee claims), or
collects and retains, attorneys' fees pursuant to any Federal or State
law permitting or requiring the awarding of
[[Page 21507]]
such fees. Section 504(a)(13), Public Law 104-134, 110 Stat. 1321
(April 26, 1996). Since appropriations legislation expires with the end
of the Fiscal Year to which it applies, for the statutory restriction
on attorneys' fees to remain in place by statute, it needed to be, and
was, carried forth in each subsequent appropriation law by reference.
See, e.g., Consolidated Appropriations Act, 2009, Public Law 111-8, 123
Stat. 524 (March 11, 2009).
LSC adopted regulations found in 1996 and 1997 which implemented
the statutory attorneys' fees restriction. 45 CFR Part 1642; 61 FR
45762 (August 29, 1996); 62 FR 25862 (May 12, 1997). The attorneys'
fees regulation restates the basic prohibition on claiming or
collecting and retaining attorneys' fees, providing that except as
permitted by Sec. 1642.4 (providing exceptions cases filed prior to
the prohibition and for cases undertaken by private attorneys providing
pro bono services in connection with a recipient's private attorney
involvement program), no recipient or employee of a recipient may
claim, or collect and retain attorneys' fees in any case undertaken on
behalf of a client of the recipient. 46 CFR 1642.3. The regulation
provides further guidance to recipients by, among other things,
providing a regulatory definition of attorneys' fees; setting forth
rules for the applicability of the restriction to private attorneys
providing legal assistance to a recipient's private attorney
involvement program; and providing express authority to recipients to
accept reimbursements of costs from a client. The regulation also sets
forth rules for the accounting for and use of those attorneys' fees
which recipients are not prohibited from claiming, collecting or
retaining.
On December 16, 2009 President Obama signed the Consolidated
Appropriations Act of 2010 into law. Public Law 111-117. This act
provides LSC's appropriation for FY 2010. Like its predecessors, this
law incorporates the various restrictions first imposed by the FY 1996
legislation by reference. However, section 533 of that same law also
provides that Section 504(a) of the Departments of Commerce, Justice,
and State, the Judiciary, and Related Agencies Appropriations Act, 1996
(as contained in Pub. L. 104-134) is amended by striking paragraph
(13). Taken together, these provisions serve to incorporate by
reference all of the restrictions in section 504 of the FY 1996 law,
except for paragraph (a)(13), which contained the restriction on
attorneys' fees. As such, there is no current statutory restriction on
LSC providing the money FY 2010 appropriated to it to any recipient
which claims, or collects and retains attorneys' fees
Repeal of Part 1642 and Issuance of the Interim Final Rule
The current law lifts the statutory restriction, but does not
affirmatively provide recipients the right to claim or collect and
retain attorneys' fees, nor does it prohibit LSC from restricting a
recipient's ability to claim or collect and retain attorneys' fees. As
such, in accordance with LSC inherent regulatory authority, the
regulation remained in place notwithstanding the lifting of the
statutory restriction unless and until repealed. At its Board Meeting
on January 30, 2010, the LSC Board of Director's determined that
retaining the regulatory restriction was no longer either necessary or
appropriate instructed staff to publish an Interim Final Rule repealing
its regulatory prohibition on the claiming of, and the collection and
retention of attorneys' fees pursuant to Federal and State law
permitting or requiring the awarding of such fees. LSC published the
Interim Final Rule and Request for Comments implementing the Board's
direction on February 11, 2010, 75 FR 6816. The Interim Final Rule also
moved provisions on accounting for and use of attorneys' fees and
acceptance of reimbursements from clients from Part 1642 (which is
being eliminated) to Part 1609 of LSC's regulations. LSC also made
technical changes to Part 1609 and Part 1610 of its regulations to
remove cross references to the obsolete statutory and regulatory
citations. The Interim Final Rule became effective on March 15, 2010.
LSC received ten (10) comments on the Interim Final Rule. All of
the comments strongly supported the changes reflected in the Interim
Final Rule and urged LSC to issue a Final Rule making permanent the
Interim Final Rule without further amendment.\1\ At its meeting of
April 17, 2010 the Board of Directors adopted the Interim Final Rule as
permanent and instructed staff to publish this Final Rule in the
Federal Register. Because this Final Rule is retaining the changes made
by the Interim Final Rule without further amendment, prior notice is
unnecessary and contrary to the public interest. See 5 U.S.C.
553(b)(3)(B) and 553(d)(3). Accordingly, this Final Rule is effective
upon publication.
---------------------------------------------------------------------------
\1\ One commenter requested that LSC provide clarification in
two places of the preamble. LSC has responded to this request and
the preamble reflects the commenter's concerns.
---------------------------------------------------------------------------
In adopting the Interim Final Rule and this Final Rule, LSC's
determination reflects a number of considerations. First, LSC notes
that the lifting of the restriction indicates that Congress itself has
had a change of heart regarding this restriction. Although Congress did
not prohibit LSC from retaining the restriction, the fact that Congress
chose not to re-impose this particular restriction (and no others) does
indicate that support for this restriction has waned and that the
policy arguments in support of the original restriction are no longer
reflective of the will of Congress. Rather, the legislative history
suggests that Congress chose not to re-impose the attorneys' fees
restriction in express recognition of the fact that the restriction
imposes several significant burdens on recipient. See, H. Rpt. 111-149
at p. 163; Transcript of Hearing of the Subcommittee on Commerce,
Justice and Science of the House Committee of Appropriations of April
1, 2009 at pp. 220-223. As such, LSC believes that repealing the
regulatory restriction is consistent with the expectations of Congress.
Moreover, LSC agrees that the restriction imposes unnecessary
burdens on recipients and places clients at a disadvantage with respect
to other litigants. Specifically, the ability to make a claim for
attorneys' fees is often a strategic tool in the lawyers' arsenal to
obtain a favorable settlement from the opposing side. Restricting a
recipient's ability to avail itself of this strategic tool puts clients
at a disadvantage and undermines clients' ability to obtain equal
access to justice. The attorneys' fees restriction can also be said to
undermine one of the primary purposes of fee-shifting statutes, namely
to punish those who have violated the rights of persons protected under
such statutes. In addition, in a time of extremely tight funding, the
inability of a recipient to obtain otherwise legally available
attorneys' fees places an unnecessary financial strain on the
recipient. If a recipient could collect and retain attorneys' fees, it
would free up other funding of the recipient to provide services to
additional clients and help close the justice gap.\2\ More
[[Page 21508]]
fundamental, the restriction results in clients of grantees being
treated differently and less advantageously than all other private
litigants, which LSC believes is unwarranted and fundamentally at odds
with the Corporation's Equal Justice mission.
---------------------------------------------------------------------------
\2\ It should be noted that the LSC Act and the implementing
regulatory restriction on fee-generating cases found at 45 CFR Part
1609 restrict recipients from taking fee-generating cases. This
restriction is not affected by the lifting of the statutory ban on
the claiming and collecting and retention of attorneys' fees and is
not be affected by any regulatory amendment to Part 1642.
Accordingly, amendment of Part 1642 does not have an adverse impact
on the private bar nor provide any incentive for recipients to seek
out fee-generating cases at the expense of the needs of other
clients.
---------------------------------------------------------------------------
This action makes permanent the Interim Final Rule's lifting of the
regulatory prohibition on claiming, or collecting and retaining
attorneys' fees available under Federal or State law permitting or
requiring the awarding of such fees. Accordingly as of March 15, 2010,
recipients were and remain permitted make claims for attorneys' fees in
any case in which they are otherwise legally permitted to make such a
claim. Recipients are also permitted to collect and retain attorneys'
fees whenever such fees are awarded to them.
With the repeal of the restriction, recipients are permitted to
claim and collect and retain attorneys' fees with respect to any work
they have performed for which fees are available to them, without
regard to when the legal work for which fees are claimed or awarded was
performed. LSC considered whether recipients should be limited seek or
obtain attorneys fees related to ``new'' work; that is, work done only
as of the date of the statutory change or the effective date of the
Interim Final Rule. LSC rejected that position because the attorneys'
fees prohibition applies to the particular activity of seeking and
receiving attorneys' fees, but is irrelevant to the permissibility of
the underlying legal work. Limiting the ability of recipients to seek
and receive attorneys' fees on only future case work would create a
distinction between some work and other work performed by a recipient,
all of which was permissible when performed. LSC continues to find such
a distinction to be artificial and not necessary to effectuate
Congress' intention.
LSC also believes that not limiting the work for which recipients
may now seek or obtain attorneys' fees will best afford recipients the
benefits of the lifting of the restriction. There may well be a number
of ongoing cases where the newly available option of the potentiality
of attorneys' fees will still be effective to level the playing field
and afford recipients additional leverage with respect to opposing
counsel in those cases. Likewise, being able to obtain attorneys' fees
in cases in which prior work has been performed would likely help
relieve more financial pressure on recipients than a ``new work only''
implementation choice would because it would increase sources and
amount of work for which fees might potentially be awarded.
Amendment of Part 1609 and Part 1610
As noted above, Part 1642 contains two provisions not directly
related to the restriction on claiming and collecting attorneys' fees.
These provisions address the accounting for and use of attorneys' fees
and the acceptance of reimbursement from a client. 45 CFR 1642.5 and
1642.6. These provisions used to be incorporated into LSC's regulation
on fee-generating cases at 45 CFR Part 1609, but were separated out and
included in the new Part 1642 regulation when it was adopted. Amending
these provisions was not necessary to effectuate the lifting of the
attorneys' fees restriction and they provide useful guidance to
recipients. In fact, with recipients likely collecting and retaining
fees more often than they have since 1996, the provision on accounting
for and use of attorneys' fees will be of greater importance than it
has been. Retaining these provisions would continue to provide clear
guidance to the benefit of both recipients and LSC. Accordingly, LSC is
adopting as permanent the changes which moved these provisions back
into Part 1609 as Sec. Sec. 1609.4 and 1609.5, with only technical
amendment to the regulatory text to remove references to Part 1642 and
which redesignated Sec. 1609.4 as Sec. 1609.6.\3\
---------------------------------------------------------------------------
\3\ For additional information about the provision on the
accounting for attorneys' fees, see the preamble to the 1997
Attorneys' Fees Final Rule: 62 FR 25862 (May 12, 1997) at 25864.
---------------------------------------------------------------------------
LSC is also adopting as permanent technical conforming amendments
to delete references to Part 1642 and the attorneys' fees statutory
prohibition that are now obsolete. Having obsolete and meaningless
regulatory provisions is not good regulatory practice and can at the
very least lead to unnecessary confusion. Accordingly, LSC adopts
permanently the deletion of paragraph (c) of Sec. 1609.3, General
requirements, to eliminate that paragraph's reference to the attorneys'
fees restriction in Part 1642. Similarly, LSC adopts permanently a
technical conforming amendment to its regulation at Part 1610. Part
1610 sets forth in regulation the application of the appropriations law
restrictions to a recipient's non-LSC funds. Section 1610.2 sets forth
the list of the restrictions as contained in section 504 of the FY 1996
appropriations act, and the implementing LSC regulations which are
applicable to a recipient's non-LSC funds. Subsection (b)(9) was the
provision that references the attorneys' fees restriction (504(a)(13)
and Part 1642) and which became obsolete.
List of Subjects in 45 CFR Parts 1609, 1610, and 1642
Grant programs--Law, Legal services.
0
Accordingly, for reasons set forth above, and under the authority of 42
U.S.C. 2996g(e), LSC hereby adopts the interim rule published February
11, 2010 (75 FR 6816) as final without change.
Mattie Cohan,
Senior Assistant General Counsel.
[FR Doc. 2010-9397 Filed 4-23-10; 8:45 am]
BILLING CODE 7050-01-P
