Fee-Generating Cases, 20444-20447 [2017-08835]
Download as PDF
<![CDATA[
20444
Federal Register / Vol. 82, No. 83 / Tuesday, May 2, 2017 / Rules and Regulations
G. Protest Activities
The Coast Guard respects the First
Amendment rights of protesters.
Protesters are asked to contact the
person listed in the FOR FURTHER
INFORMATION CONTACT section to
coordinate protest activities so that your
message can be received without
jeopardizing the safety or security of
people, places or vessels.
List of Subjects in 33 CFR Part 165
45 CFR Part 1609
Legal Services Corporation.
Final rule.
This final rule revises the
Legal Services Corporation (LSC or
Corporation) regulation regarding feegenerating cases. This rule clarifies the
definition of ‘‘fee-generating case,’’
clarifies that brief advice is permitted by
the regulation, and revises how a
recipient accounts for attorneys’ fees
awards.
SUMMARY:
1. The authority citation for part 165
continues to read as follows:
Authority: 33 U.S.C. 1231; 50 U.S.C. 191;
33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5;
Department of Homeland Security Delegation
No. 0170.1.
2. Add § 165.T05–0152 to read as
follows:
■
§ 165.T05–0152 Security Zone; Schuylkill
River; Philadelphia, PA.
jstallworth on DSK7TPTVN1PROD with RULES
LEGAL SERVICES CORPORATION
ACTION:
■
(a) Definitions. As used in this
section, designated representative
means a Coast Guard Patrol
Commander, including a Coast Guard
petty officer, warrant or commissioned
officer operating a Coast Guard vessel
and a Federal, State, and local law
enforcement officer designated by or
assisting the Captain of the Port,
Delaware Bay in the enforcement of the
security zone.
(b) Location. The following area is a
security zone: All the waters of the
Schuylkill River from the Market Street
Bridge north to the Fairmount dam.
(c) Regulations. (1) Under the general
security zone regulations in subpart D of
this part, persons may not enter the
security zone described in paragraph (b)
of this section unless authorized by the
COTP or the COTP’s designated
representative.
(2) To request permission to enter the
security zone, contact the COTP or the
COTP’s representative on VHF–FM
channel 16. All persons and vessels in
the security zone must comply with all
lawful orders or directions given to
them by the COTP or the COTP’s
designated representative.
(d) Enforcement period. This section
will be enforced from April 27, 2017
through April 29, 2017 from 10:00 a.m.
to 6:00 p.m. each day.
Jkt 241001
BILLING CODE 9110–04–P
AGENCY:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
14:38 May 01, 2017
[FR Doc. 2017–08819 Filed 4–27–17; 4:40 pm]
Fee-Generating Cases
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures,
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
VerDate Sep<11>2014
Dated: April 24, 2017.
Benjamin A. Cooper,
Captain, U.S. Coast Guard Captain of the
Port, Delaware Bay.
This final rule is effective on
June 1, 2017.
FOR FURTHER INFORMATION CONTACT:
Stefanie K. Davis, Assistant General
Counsel, Legal Services Corporation,
3333 K Street NW., Washington, DC
20007; (202) 295–1563 (phone), (202)
337–6519 (fax), or sdavis@lsc.gov.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
Section 1007(b)(1) of the Legal
Services Corporation Act of 1974
prohibits recipients from using LSC
funds ‘‘to provide legal assistance
(except in accordance with guidelines
promulgated by the Corporation) with
respect to any fee-generating case[.]’’ 42
U.S.C. 2996f(b)(1). LSC implemented
this provision through 45 CFR part
1609. In the preamble to the original
part 1609, LSC explained that the
private bar is generally ‘‘eager to accept
contingent fee cases and cases in which
there may be an award of attorneys’ fees
to be paid by the opposing party
pursuant to [statute].’’ 41 FR 38505,
Sept. 10, 1976. LSC therefore drafted
part 1609 to ‘‘insure that recipients do
not use scarce legal services resources
when private attorneys are available to
provide effective representation and
. . . assist eligible clients to obtain
appropriate and effective legal
assistance.’’ 45 CFR 1609.1(a), (b).
Nevertheless, LSC recognized that
‘‘there may be instances when no
private attorney is willing to represent
an individual, because the recovery of a
fee is unlikely, the potential fee is too
small, or some other reason.’’ 41 FR
38505.
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
To balance these considerations, LSC
(1) defined ‘‘fee-generating case’’ to
prohibit recipients from accepting cases
that a private attorney would take, and
(2) provided exceptions to the
prohibition when adequate
representation by the private bar is
unavailable and contains safeguards to
prevent recipients from taking cases the
private bar would accept. Id. The
definition of ‘‘fee-generating case’’
includes ‘‘every situation in which an
attorney reasonably may expect to
receive a fee for services from any
source except the client.’’ Id.
Specifically, LSC defined ‘‘feegenerating case’’ as ‘‘any case or matter
which, if undertaken on behalf of an
eligible client by an attorney in private
practice, reasonably may be expected to
result in a fee for legal services from an
award to a client, from public funds, or
from the opposing party.’’ Id. In
§ 1609.3, LSC established circumstances
in which a recipient may use LSC funds
to provide legal assistance in a feegenerating case, such as after the case
has been rejected by the local lawyer
referral service or by two private
attorneys. 45 CFR 1609.3(a)(1).
In 1996, LSC proposed two changes to
clarify the meaning of ‘‘fee-generating
case.’’ First, LSC proposed ‘‘[a] technical
numerical change’’ to the definition of
‘‘fee-generating case’’ which was
intended ‘‘to clarify that the definition
includes fees from three sources: an
award (1) to a client, (2) from public
funds, or (3) from the opposing party.’’
61 FR 45765, Aug. 29, 1996. This
proposed change resulted in comments
about whether LSC intended to make
substantive changes to the definition. 62
FR 19398, Apr. 21, 1997. Because LSC
did not intend to change the definition
and sought to avoid confusion about its
intent, the Board of Directors (‘‘Board’’)
rejected the numerical changes
proposed in the Notice of Proposed
Rulemaking (‘‘NPRM’’). Id.
Nevertheless, the Board implemented
a second proposed change by adopting
language that explained what is not a
‘‘fee-generating case.’’ Id. The revision
excluded court appointments from the
definition because such cases, even
where fees are paid, are considered a
professional obligation. Id.
Additionally, the revision excluded
situations where recipients undertake
representation under a contract with a
government agency or other entity and
the agency or entity pays the recipient
‘‘because a contract payment does not
constitute fees that come from an award
to a client or attorneys’ fees that come
from the losing party in a case, or from
public funds.’’ Id.; see 45 CFR 1609.2(b).
LSC has not made substantive changes
E:\FR\FM\02MYR1.SGM
02MYR1
jstallworth on DSK7TPTVN1PROD with RULES
Federal Register / Vol. 82, No. 83 / Tuesday, May 2, 2017 / Rules and Regulations
to the definition of ‘‘fee-generating case’’
since this revision.
When a recipient may take a feegenerating case, part 1609 also
prescribes how recipients account for
attorneys’ fees received in the case. Part
1609 requires the fees to be remitted to
the recipient. 41 FR 38505, Sept. 10,
1976. In 1984, LSC adopted a new
section, § 1609.6, that requires
attorneys’ fees received by the recipient
to be returned to the fund from which
the resources to litigate the case came.
49 FR 19657, May 9, 1984. In other
words, if the recipient funds a case half
with LSC funds and half with private
funds, § 1609.6 requires the recipient to
allocate any attorneys’ fees received to
each fund in equal proportion. Section
1609.6 also requires that fees be
recorded during the accounting period
in which the program receives the
award. Id.
In 1996, LSC’s appropriation
legislation provided that no LSC funds
could be used to provide financial
assistance to a recipient that receives
attorneys’ fees pursuant to any federal
or state law. Sec. 504(a)(13), Pub. L.
104–134, 110 Stat. 1321, 1321–55; 75 FR
21507, Apr. 26, 2010. To implement this
legislation, LSC created a separate rule,
45 CFR part 1642. 62 FR 25862, May 12,
1997 (final rule); 61 FR 45762, Aug. 29,
1996 (interim final rule). LSC moved
§ 1609.6 to part 1642 and revised the
provision to require recipients to
allocate fees from cases or matters
supported in whole or in part with LSC
funds to the LSC fund in the same
proportion that the case or matter was
funded with LSC funds. Id. In a
departure from then-existing § 1609.6,
LSC did not propose to dictate how
recipients allocated remaining fees to
their non-LSC accounts. Id.
In 2010, Congress repealed the
prohibition on accepting and retaining
attorneys’ fees. Sec. 533, Pub. L. 111–
117, 123 Stat. 3034, 3157. LSC
subsequently repealed part 1642 but
retained two provisions relevant to
accounting for attorneys’ fee awards and
accepting reimbursement of costs from a
client. 75 FR 6816, Feb. 11, 2010
(interim final rule); 75 FR 21506, Apr.
26, 2010 (final rule). LSC placed these
two provisions in part 1609 at §§ 1609.4
and 1609.6, respectively. 75 FR 21508.
LSC has made no changes to either
section since then.
LSC added rulemaking on part 1609
to its annual rulemaking agenda in June
2015. On July 17, 2016, the Operations
and Regulations Committee
(‘‘Committee’’) of the Board voted to
recommend that the Board authorize
rulemaking on part 1609. The Board
voted to authorize rulemaking on July
VerDate Sep<11>2014
14:38 May 01, 2017
Jkt 241001
18, 2016. On January 26, 2017, the
Committee voted to recommend that the
Board approve publication of an NPRM
in the Federal Register for notice and
comment. On January 28, 2017, the
Board accepted the Committee’s
recommendation and voted to approve
publication of the NPRM. LSC
published the notice of proposed
rulemaking in the Federal Register on
February 13, 2017. 82 FR 10446, Feb.
13, 2017. The comment period remained
open for thirty days and closed on
March 15, 2017.
Materials regarding this rulemaking
are available in the open rulemaking
section of LSC’s Web site at https://
www.lsc.gov/about-lsc/laws-regulationsguidance/rulemaking. After the effective
date of the rule, those materials will
appear in the closed rulemaking section
at https://www.lsc.gov/about-lsc/lawsregulations-guidance/rulemaking/
closed-rulemaking.
II. Section-by-Section Discussion of
Comments and Regulatory Provisions
LSC received two comments during
the public comment period. One
comment was submitted by Northwest
Justice Project (NJP), an LSC-funded
recipient. The other comment was
submitted by the National Legal Aid and
Defender Association (NLADA) by its
Civil Council, the elected representative
body that establishes policy for the
NLADA Civil Division, and its
Regulations Committee. Both
commenters were generally supportive
of LSC’s proposed changes to part 1609.
III. Proposed Changes
Section 1609.1
Purpose.
LSC proposed no changes to this
section. LSC received no comments on
this section.
Section 1609.2
Definition.
Recipients have repeatedly requested
guidance regarding what constitutes a
fee-generating case as defined in
§ 1609.2(a). Questions have included
whether paid court appointments are
fee-generating cases and whether
‘‘advice and counsel’’ or ‘‘brief services’’
are prohibited if the case may, during
subsequent extended representation,
develop into a fee-generating case.
Recipients have also sought guidance
regarding permissible sources of fees.
Section 1609.2 currently provides,
‘‘Fee-generating case means any case or
matter which, if undertaken on behalf of
an eligible client by an attorney in
private practice, reasonably may be
expected to result in a fee for legal
services from an award to a client, from
public funds or from the opposing
party.’’ 45 CFR 1609.2(a). A reader
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
20445
could interpret ‘‘award’’ as modifying
only ‘‘to a client’’ and not to include an
‘‘award . . . from public funds or [an
award] from the opposing party.’’ Thus,
under the current definition, a recipient
might accept a case that may result in
an award from public funds, a result not
intended by LSC. Therefore, LSC
proposed removing ‘‘from public funds
or from the opposing party’’ from the
definition.
Additionally, LSC proposed revising
part 1609 to clarify that a recipient may
provide brief services to an eligible
client despite the possibility that the
case ultimately may result in fees
otherwise restricted by part 1609. In
AO–2015–002, LSC considered whether
a recipient may provide ‘‘advice and
counsel’’ or ‘‘limited services’’ (as
defined in 45 CFR 1611.2(a) and (e)) to
an eligible client where the matter might
constitute a fee-generating case if
extended services were provided. Based
on the language of § 1609.3, which
prohibits recipients from using LSC
funds to provide assistance in ‘‘every
situation in which an attorney
reasonably may expect to receive a
fee[,]’’ LSC concluded an ‘‘attorney’s
reasonable expectation of such fees
would not typically arise until after . . .
initial advice or brief services was under
way or had been completed.’’ AO–2015–
002, June 17, 2015. LSC proposed
incorporating this clarification into part
1609 by adding a separate paragraph to
§ 1609.2(b). The proposed paragraph
explained that ‘‘advice and counsel’’ or
‘‘limited services’’ in matters that may
later constitute fee-generating cases are
not prohibited by part 1609.
Finally, in response to questions
regarding court appointments, current
§ 1609.2(b) states that a court
appointment pursuant to a statute or
court rule or practice that is equally
applicable to all attorneys in the
jurisdiction is not a fee-generating case.
45 CFR 1609.2. LSC did not propose to
change this language in the NPRM.
Comments: NJP ‘‘assume[d] that
deletion of the source of the award to a
client in proposed § 1609.2(a) is
intended to denote the availability of an
attorneys’ fee from funds that are paid
to a lawyer from a monetary award to
compensate the client for the injury or
claim that is the subject to the
litigation.’’ NJP continued, ‘‘As LSC
notes, recipients may request, collect
and retain an award of attorney fees as
provided by law, so long as such a
request is in the name of the recipient
or the award is remitted to the recipient
and accounted for pursuant to
§ 1609.4.’’ NJP provided no comment on
proposed § 1609.2 besides its
assumption.
E:\FR\FM\02MYR1.SGM
02MYR1
20446
Federal Register / Vol. 82, No. 83 / Tuesday, May 2, 2017 / Rules and Regulations
NLADA ‘‘fully supports’’ clarifying
that advice and counsel or limited
services do not fall within the meaning
of fee-generating case. In NLADA’s
view, ‘‘[t]he provision is beneficial to
LSC eligible clients by affording them
the opportunity to receive brief advice
or services regarding a fee generating
case. The program can provide legal
advice or take limited action that can be
critical to preserving the client’s
rights[.]’’
Response: LSC is unsure what NJP’s
assumption means. If NJP is assuming
the proposed language means that a case
in which a court awards fees directly to
the attorney rather than awarding fees to
the client is no longer a ‘‘fee-generating
case’’ for purposes of part 1609, the
assumption is incorrect.
LSC intends part 1609 to require
recipients and their attorneys to
consider whether cases that may result
in fee awards are ones that can be
handled by the private bar before
accepting such cases. LSC does not
intend to permit a recipient to accept a
fee-generating case without first
attempting to refer the case to the
private bar simply because the court
may award the attorneys’ fee portion of
an award directly to the recipient or its
attorney instead of the client.
Nevertheless, this restriction does not
prohibit a recipient from accepting cases
where permitted by § 1609.2(b) or
§ 1609.3.
LSC believes the language in the
proposed rule provides sufficient clarity
regarding the intent of the rule and
therefore adopts the proposed version in
this final rule.
Section 1609.3
General requirements.
jstallworth on DSK7TPTVN1PROD with RULES
LSC proposed a technical change to
the heading of § 1609.3 to more
accurately reflect the topic it addresses.
Section 1609.3 briefly sets forth the
general prohibition on a recipient using
LSC funds to provide legal assistance in
a fee-generating case. The bulk of
§ 1609.3, however, prescribes the
circumstances and procedures under
which recipients may accept feegenerating cases. To more aptly reflect
the substance of § 1609.3, LSC proposed
to rename § 1609.3 Authorized
representation in a fee-generating case.
LSC received no comments on this
change and therefore adopts the
proposed version in this final rule.
Section 1609.4 Accounting for and use of
attorneys’ fees.
LSC proposed to revise part 1609’s
requirement to account for receipt of
attorneys’ fees. Currently, § 1609.4
requires that attorneys’ fees received in
a case that the recipient used some
VerDate Sep<11>2014
14:38 May 01, 2017
Jkt 241001
amount of LSC funds to handle be
allocated to the LSC grant account in
proportion to which the LSC funds were
used. 45 CFR 1609.4(a). This language
requires the accounting only for
attorneys’ fees received by the recipient,
which could be interpreted to mean that
attorneys’ fees awarded to a staff
attorney in his or her own name need
not be remitted to the recipient or be
subject to the accounting requirement.
To clarify that attorneys’ fee awards
received by either the recipient or a
recipient’s staff attorney are subject to
the accounting requirement, LSC
proposed the following revisions to
§ 1609.4. First, LSC proposed to require
recipients to file any petitions for
attorneys’ fees in the name of the
recipient and not in the name of any
staff attorney. To the extent a
jurisdiction may allow an attorneys’ fee
petition in the recipient’s name rather
than a staff attorney’s name, this change
would help ensure that the court would
award attorneys’ fees to the organization
and not to an individual staff attorney.
LSC proposed placing this addition as
§ 1609.4(a), and redesignating
paragraphs (a) and (b) of existing
§ 1609.4 as paragraphs (b) and (c),
respectively.
Second, LSC proposed to state
explicitly in § 1609.4(b) that, in the
event a jurisdiction requires attorneys’
fee petitions to be made in a staff
attorney’s name, the staff attorney must
remit the award to the recipient, which
must then allocate an award of
attorneys’ fees to its LSC grant account
in proportion to the amount of LSC
funds used to obtain the award. LSC
believed that these two changes
accommodate variations in state and
local rules governing the award of
attorneys’ fees and help ensure that any
attorneys’ fee awards supported by LSC
funds are adequately credited to LSC
funds.
Finally, to more aptly describe the
substance of § 1609.4, LSC proposed
changing the heading to Requesting and
receiving attorneys’ fees.
Comment: NJP had no concerns about
requiring fee petitions to be made in the
recipient’s name to the extent permitted
by law. NLADA generally supported the
proposed revision clarifying that
attorneys’ fees are to be awarded to the
recipient. NLADA, however, relayed a
recipient’s concern that state court rules
may require licensed, individual
attorneys to be designated on a petition
for attorneys’ fees instead of an
organization. This contrasts with the
proposed rule, which requires petitions
for attorneys’ fees to be filed in the
name of the recipient ‘‘to the extent
permitted by law.’’ Recognizing there
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
may be differences among statutes, court
rules, and other rules, NLADA
recommended that the rule be revised to
state ‘‘to the extent required by law or
rules in the jurisdiction.’’
Response: LSC will adopt the
recommendation with one change. As
NLADA noted, LSC does not intend for
an attorney to violate any applicable law
or any applicable rule in his or her
petition for attorney fees. To clarify that
the regulation requires compliance with
both the law and rules, LSC will add the
language recommended by NLADA,
except that LSC will use the conjunction
‘‘and’’ between the phrases ‘‘to the
extent permitted by law’’ and ‘‘rules in
the jurisdiction.’’
Section 1609.5 Acceptance of
reimbursement from a client.
To create consistency in the verbs
used in the headings for §§ 1609.4 and
1609.5 and more aptly describe the
substance of the latter section, LSC
proposed to change the heading to
Receiving reimbursement from a client.
LSC proposed no substantive changes to
this section. LSC received no comments
on this section. Consequently, LSC
adopts the language proposed in the
NPRM in this final rule
Section 1609.6 Recipient policies,
procedures and recordkeeping.
LSC proposed no changes to this
section. LSC received no comments on
this section.
List of Subjects in 45 CFR Part 1609
Administrative practice and
procedure, Grant programs—law, Legal
services.
For the reasons set forth in the
preamble, the Legal Services
Corporation amends 45 CFR part 1609
as follows:
PART 1609—FEE-GENERATING
CASES
1. The authority citation for part 1609
is revised to read as follows:
■
Authority: 42 U.S.C. 2996g(e).
2. In § 1609.2:
a. Revise the section heading and
paragraph (a);
■ b. Remove ‘‘, or’’ at the end of
paragraph (b)(1) and add a semicolon in
its place;
■ c. Remove the period at the end of
paragraph (b)(2) and add ‘‘; or’’ in its
place; and
■ d. Add paragraph (b)(3).
The revision and addition read as
follows:
■
■
§ 1609.2
Definitions.
(a) Fee-generating case means any
case or matter which, if undertaken on
E:\FR\FM\02MYR1.SGM
02MYR1
Federal Register / Vol. 82, No. 83 / Tuesday, May 2, 2017 / Rules and Regulations
behalf of an eligible client by an
attorney in private practice, reasonably
may be expected to result in a fee for
legal services from an award to a client.
(b) * * *
(3) A recipient provides only advice
and counsel or limited services, as those
terms are defined in 45 CFR 1611.1(a)
and (e), to an eligible client.
3. Revise the heading of § 1609.3 to
read as follows:
■
§ 1609.3 Authorized representation in a
fee-generating case.
*
■
*
*
*
(a) Any petition seeking attorneys’
fees for representation supported in
whole or in part with funds provided by
LSC, shall, to the extent permitted by
law and rules in the jurisdiction, be
filed in the name of the recipient.
(b) Attorneys’ fees received by a
recipient or an employee of a recipient
for representation supported in whole or
in part with funds provided by LSC
shall be allocated to the fund in which
the recipient’s LSC grant is recorded in
the same proportion that the amount of
LSC funds expended bears to the total
amount expended by the recipient to
support the representation.
(c) Attorneys’ fees received shall be
recorded during the accounting period
in which the money from the fee award
is actually received by the recipient and
may be expended for any purpose
permitted by the LSC Act, regulations,
and other law applicable at the time the
money is received.
5. Revise the heading of § 1609.5 to
read as follows:
■
*
Receiving reimbursement from a
*
*
*
Dated: April 26, 2017.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2017–08835 Filed 5–1–17; 8:45 am]
jstallworth on DSK7TPTVN1PROD with RULES
BILLING CODE 7050–01–P
VerDate Sep<11>2014
14:38 May 01, 2017
50 CFR Part 635
[Docket No. 160620545–6999–02]
RIN 0648–XF211
Atlantic Highly Migratory Species;
Commercial Blacktip Sharks,
Aggregated Large Coastal Sharks, and
Hammerhead Sharks in the Western
Gulf of Mexico Sub-Region; Closure
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; closure.
§ 1609.4 Requesting and receiving
attorneys’ fees.
*
National Oceanic and Atmospheric
Administration
AGENCY:
*
4. Revise § 1609.4 to read as follows:
§ 1609.5
client.
DEPARTMENT OF COMMERCE
Jkt 241001
NMFS is closing the
commercial fishery for blacktip sharks,
aggregated large coastal sharks (LCS)
and hammerhead shark management
groups in the western Gulf of Mexico
sub-region. This action is necessary
because the commercial landings of
aggregated LCS in the western Gulf of
Mexico sub-region for the 2017 fishing
season exceeded 80 percent of the
available commercial quota as of April
26, 2017, and the aggregated LCS and
hammerhead shark management groups
are quota-linked under the regulations.
The blacktip shark fishery in the
western Gulf of Mexico sub-region will
be closed to minimize regulatory
discards of aggregate LCS in the western
Gulf of Mexico sub-region, which are
often caught in conjunction with
blacktip sharks in the commercial shark
fisheries. This closure will affect anyone
commercially fishing for sharks in the
western Gulf of Mexico sub-region.
DATES: The commercial fishery for
blacktip sharks, aggregated LCS and
hammerhead shark management groups
in the western Gulf of Mexico subregion are closed effective 11:30 p.m.
local time May 2, 2017 until the end of
the 2017 fishing season on December 31,
2017, or until and if NMFS announces
via a notice in the Federal Register that
additional quota is available and the
season is reopened.
FOR FURTHER INFORMATION CONTACT:
Lauren Latchford or Karyl BrewsterGeisz 301–427–8503; fax 301–713–1917.
SUPPLEMENTARY INFORMATION: The
Atlantic shark fisheries are managed
under the 2006 Consolidated Highly
Migratory Species (HMS) Fishery
Management Plan (FMP), its
amendments, and implementing
regulations (50 CFR part 635) issued
under authority of the MagnusonStevens Fishery Conservation and
SUMMARY:
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
20447
Management Act (16 U.S.C. 1801 et
seq.).
Under § 635.5(b)(1), dealers must
electronically submit reports on sharks
that are first received from a vessel on
a weekly basis through a NMFSapproved electronic reporting system.
Reports must be received by no later
than midnight, local time, of the first
Tuesday following the end of the
reporting week unless the dealer is
otherwise notified by NMFS. Under
§ 635.28(b)(4), the quotas of certain
species and/or management groups are
linked. If quotas are linked, when the
specified quota threshold for one
management group or species is reached
and that management group or species
is closed, the linked management group
or species closes at the same time
(§ 635.28(b)(3)). The quotas for
aggregated LCS and the hammerhead
shark management groups in the
western Gulf of Mexico sub-region are
linked (§ 635.28(b)(4)(iii)). The blacktip
shark quota in the western Gulf of
Mexico sub-region is not linked to the
aggregated LCS or hammerhead shark
quotas. Regulations at § 635.28(b)(2) and
§ 635.28(b)(5) authorize the closure of
the blacktip shark fishery in the Gulf of
Mexico at a regional or sub-regional
level when landings have reached or are
expected to reach 80 percent of the
quota or, after considering certain
criteria and relevant factors, before
those situations occur.
Under § 635.28(b)(2) and
§ 635.28(b)(3), when NMFS calculates
that the landings for any species and/or
management group of either a nonlinked or a linked group have reached
or are projected to reach a threshold of
80 percent of the available quota, NMFS
will file for publication with the Office
of the Federal Register a notice of
closure for all of the species and/or
management groups of either a nonlinked or linked group that will be
effective no fewer than 5 days from date
of filing. From the effective date and
time of the closure until and if NMFS
announces, via a notice in the Federal
Register, that additional quota is
available and the season is reopened,
the fisheries for all linked species and/
or management groups and specified
non-linked species and/or management
groups are closed, even across fishing
years.
On November 23, 2016 (81 FR 84491),
NMFS announced that for 2017, the
commercial western Gulf of Mexico
blacktip shark sub-regional quota was
331.6 metric tons (mt) dressed weight
(dw) (730,425 lb dw), the western Gulf
of Mexico aggregated LCS sub-regional
quota was 72.0 mt dw (158,724 lb dw),
and the western Gulf of Mexico
E:\FR\FM\02MYR1.SGM
02MYR1
]]>Agencies
[Federal Register Volume 82, Number 83 (Tuesday, May 2, 2017)]
[Rules and Regulations]
[Pages 20444-20447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08835]
=======================================================================
-----------------------------------------------------------------------
LEGAL SERVICES CORPORATION
45 CFR Part 1609
Fee-Generating Cases
AGENCY: Legal Services Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule revises the Legal Services Corporation (LSC or
Corporation) regulation regarding fee-generating cases. This rule
clarifies the definition of ``fee-generating case,'' clarifies that
brief advice is permitted by the regulation, and revises how a
recipient accounts for attorneys' fees awards.
DATES: This final rule is effective on June 1, 2017.
FOR FURTHER INFORMATION CONTACT: Stefanie K. Davis, Assistant General
Counsel, Legal Services Corporation, 3333 K Street NW., Washington, DC
20007; (202) 295-1563 (phone), (202) 337-6519 (fax), or sdavis@lsc.gov.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1007(b)(1) of the Legal Services Corporation Act of 1974
prohibits recipients from using LSC funds ``to provide legal assistance
(except in accordance with guidelines promulgated by the Corporation)
with respect to any fee-generating case[.]'' 42 U.S.C. 2996f(b)(1). LSC
implemented this provision through 45 CFR part 1609. In the preamble to
the original part 1609, LSC explained that the private bar is generally
``eager to accept contingent fee cases and cases in which there may be
an award of attorneys' fees to be paid by the opposing party pursuant
to [statute].'' 41 FR 38505, Sept. 10, 1976. LSC therefore drafted part
1609 to ``insure that recipients do not use scarce legal services
resources when private attorneys are available to provide effective
representation and . . . assist eligible clients to obtain appropriate
and effective legal assistance.'' 45 CFR 1609.1(a), (b). Nevertheless,
LSC recognized that ``there may be instances when no private attorney
is willing to represent an individual, because the recovery of a fee is
unlikely, the potential fee is too small, or some other reason.'' 41 FR
38505.
To balance these considerations, LSC (1) defined ``fee-generating
case'' to prohibit recipients from accepting cases that a private
attorney would take, and (2) provided exceptions to the prohibition
when adequate representation by the private bar is unavailable and
contains safeguards to prevent recipients from taking cases the private
bar would accept. Id. The definition of ``fee-generating case''
includes ``every situation in which an attorney reasonably may expect
to receive a fee for services from any source except the client.'' Id.
Specifically, LSC defined ``fee-generating case'' as ``any case or
matter which, if undertaken on behalf of an eligible client by an
attorney in private practice, reasonably may be expected to result in a
fee for legal services from an award to a client, from public funds, or
from the opposing party.'' Id. In Sec. 1609.3, LSC established
circumstances in which a recipient may use LSC funds to provide legal
assistance in a fee-generating case, such as after the case has been
rejected by the local lawyer referral service or by two private
attorneys. 45 CFR 1609.3(a)(1).
In 1996, LSC proposed two changes to clarify the meaning of ``fee-
generating case.'' First, LSC proposed ``[a] technical numerical
change'' to the definition of ``fee-generating case'' which was
intended ``to clarify that the definition includes fees from three
sources: an award (1) to a client, (2) from public funds, or (3) from
the opposing party.'' 61 FR 45765, Aug. 29, 1996. This proposed change
resulted in comments about whether LSC intended to make substantive
changes to the definition. 62 FR 19398, Apr. 21, 1997. Because LSC did
not intend to change the definition and sought to avoid confusion about
its intent, the Board of Directors (``Board'') rejected the numerical
changes proposed in the Notice of Proposed Rulemaking (``NPRM''). Id.
Nevertheless, the Board implemented a second proposed change by
adopting language that explained what is not a ``fee-generating case.''
Id. The revision excluded court appointments from the definition
because such cases, even where fees are paid, are considered a
professional obligation. Id. Additionally, the revision excluded
situations where recipients undertake representation under a contract
with a government agency or other entity and the agency or entity pays
the recipient ``because a contract payment does not constitute fees
that come from an award to a client or attorneys' fees that come from
the losing party in a case, or from public funds.'' Id.; see 45 CFR
1609.2(b). LSC has not made substantive changes
[[Page 20445]]
to the definition of ``fee-generating case'' since this revision.
When a recipient may take a fee-generating case, part 1609 also
prescribes how recipients account for attorneys' fees received in the
case. Part 1609 requires the fees to be remitted to the recipient. 41
FR 38505, Sept. 10, 1976. In 1984, LSC adopted a new section, Sec.
1609.6, that requires attorneys' fees received by the recipient to be
returned to the fund from which the resources to litigate the case
came. 49 FR 19657, May 9, 1984. In other words, if the recipient funds
a case half with LSC funds and half with private funds, Sec. 1609.6
requires the recipient to allocate any attorneys' fees received to each
fund in equal proportion. Section 1609.6 also requires that fees be
recorded during the accounting period in which the program receives the
award. Id.
In 1996, LSC's appropriation legislation provided that no LSC funds
could be used to provide financial assistance to a recipient that
receives attorneys' fees pursuant to any federal or state law. Sec.
504(a)(13), Pub. L. 104-134, 110 Stat. 1321, 1321-55; 75 FR 21507, Apr.
26, 2010. To implement this legislation, LSC created a separate rule,
45 CFR part 1642. 62 FR 25862, May 12, 1997 (final rule); 61 FR 45762,
Aug. 29, 1996 (interim final rule). LSC moved Sec. 1609.6 to part 1642
and revised the provision to require recipients to allocate fees from
cases or matters supported in whole or in part with LSC funds to the
LSC fund in the same proportion that the case or matter was funded with
LSC funds. Id. In a departure from then-existing Sec. 1609.6, LSC did
not propose to dictate how recipients allocated remaining fees to their
non-LSC accounts. Id.
In 2010, Congress repealed the prohibition on accepting and
retaining attorneys' fees. Sec. 533, Pub. L. 111-117, 123 Stat. 3034,
3157. LSC subsequently repealed part 1642 but retained two provisions
relevant to accounting for attorneys' fee awards and accepting
reimbursement of costs from a client. 75 FR 6816, Feb. 11, 2010
(interim final rule); 75 FR 21506, Apr. 26, 2010 (final rule). LSC
placed these two provisions in part 1609 at Sec. Sec. 1609.4 and
1609.6, respectively. 75 FR 21508. LSC has made no changes to either
section since then.
LSC added rulemaking on part 1609 to its annual rulemaking agenda
in June 2015. On July 17, 2016, the Operations and Regulations
Committee (``Committee'') of the Board voted to recommend that the
Board authorize rulemaking on part 1609. The Board voted to authorize
rulemaking on July 18, 2016. On January 26, 2017, the Committee voted
to recommend that the Board approve publication of an NPRM in the
Federal Register for notice and comment. On January 28, 2017, the Board
accepted the Committee's recommendation and voted to approve
publication of the NPRM. LSC published the notice of proposed
rulemaking in the Federal Register on February 13, 2017. 82 FR 10446,
Feb. 13, 2017. The comment period remained open for thirty days and
closed on March 15, 2017.
Materials regarding this rulemaking are available in the open
rulemaking section of LSC's Web site at https://www.lsc.gov/about-lsc/laws-regulations-guidance/rulemaking. After the effective date of the
rule, those materials will appear in the closed rulemaking section at
https://www.lsc.gov/about-lsc/laws-regulations-guidance/rulemaking/closed-rulemaking.
II. Section-by-Section Discussion of Comments and Regulatory Provisions
LSC received two comments during the public comment period. One
comment was submitted by Northwest Justice Project (NJP), an LSC-funded
recipient. The other comment was submitted by the National Legal Aid
and Defender Association (NLADA) by its Civil Council, the elected
representative body that establishes policy for the NLADA Civil
Division, and its Regulations Committee. Both commenters were generally
supportive of LSC's proposed changes to part 1609.
III. Proposed Changes
Section 1609.1 Purpose.
LSC proposed no changes to this section. LSC received no comments
on this section.
Section 1609.2 Definition.
Recipients have repeatedly requested guidance regarding what
constitutes a fee-generating case as defined in Sec. 1609.2(a).
Questions have included whether paid court appointments are fee-
generating cases and whether ``advice and counsel'' or ``brief
services'' are prohibited if the case may, during subsequent extended
representation, develop into a fee-generating case. Recipients have
also sought guidance regarding permissible sources of fees.
Section 1609.2 currently provides, ``Fee-generating case means any
case or matter which, if undertaken on behalf of an eligible client by
an attorney in private practice, reasonably may be expected to result
in a fee for legal services from an award to a client, from public
funds or from the opposing party.'' 45 CFR 1609.2(a). A reader could
interpret ``award'' as modifying only ``to a client'' and not to
include an ``award . . . from public funds or [an award] from the
opposing party.'' Thus, under the current definition, a recipient might
accept a case that may result in an award from public funds, a result
not intended by LSC. Therefore, LSC proposed removing ``from public
funds or from the opposing party'' from the definition.
Additionally, LSC proposed revising part 1609 to clarify that a
recipient may provide brief services to an eligible client despite the
possibility that the case ultimately may result in fees otherwise
restricted by part 1609. In AO-2015-002, LSC considered whether a
recipient may provide ``advice and counsel'' or ``limited services''
(as defined in 45 CFR 1611.2(a) and (e)) to an eligible client where
the matter might constitute a fee-generating case if extended services
were provided. Based on the language of Sec. 1609.3, which prohibits
recipients from using LSC funds to provide assistance in ``every
situation in which an attorney reasonably may expect to receive a
fee[,]'' LSC concluded an ``attorney's reasonable expectation of such
fees would not typically arise until after . . . initial advice or
brief services was under way or had been completed.'' AO-2015-002, June
17, 2015. LSC proposed incorporating this clarification into part 1609
by adding a separate paragraph to Sec. 1609.2(b). The proposed
paragraph explained that ``advice and counsel'' or ``limited services''
in matters that may later constitute fee-generating cases are not
prohibited by part 1609.
Finally, in response to questions regarding court appointments,
current Sec. 1609.2(b) states that a court appointment pursuant to a
statute or court rule or practice that is equally applicable to all
attorneys in the jurisdiction is not a fee-generating case. 45 CFR
1609.2. LSC did not propose to change this language in the NPRM.
Comments: NJP ``assume[d] that deletion of the source of the award
to a client in proposed Sec. 1609.2(a) is intended to denote the
availability of an attorneys' fee from funds that are paid to a lawyer
from a monetary award to compensate the client for the injury or claim
that is the subject to the litigation.'' NJP continued, ``As LSC notes,
recipients may request, collect and retain an award of attorney fees as
provided by law, so long as such a request is in the name of the
recipient or the award is remitted to the recipient and accounted for
pursuant to Sec. 1609.4.'' NJP provided no comment on proposed Sec.
1609.2 besides its assumption.
[[Page 20446]]
NLADA ``fully supports'' clarifying that advice and counsel or
limited services do not fall within the meaning of fee-generating case.
In NLADA's view, ``[t]he provision is beneficial to LSC eligible
clients by affording them the opportunity to receive brief advice or
services regarding a fee generating case. The program can provide legal
advice or take limited action that can be critical to preserving the
client's rights[.]''
Response: LSC is unsure what NJP's assumption means. If NJP is
assuming the proposed language means that a case in which a court
awards fees directly to the attorney rather than awarding fees to the
client is no longer a ``fee-generating case'' for purposes of part
1609, the assumption is incorrect.
LSC intends part 1609 to require recipients and their attorneys to
consider whether cases that may result in fee awards are ones that can
be handled by the private bar before accepting such cases. LSC does not
intend to permit a recipient to accept a fee-generating case without
first attempting to refer the case to the private bar simply because
the court may award the attorneys' fee portion of an award directly to
the recipient or its attorney instead of the client. Nevertheless, this
restriction does not prohibit a recipient from accepting cases where
permitted by Sec. 1609.2(b) or Sec. 1609.3.
LSC believes the language in the proposed rule provides sufficient
clarity regarding the intent of the rule and therefore adopts the
proposed version in this final rule.
Section 1609.3 General requirements.
LSC proposed a technical change to the heading of Sec. 1609.3 to
more accurately reflect the topic it addresses. Section 1609.3 briefly
sets forth the general prohibition on a recipient using LSC funds to
provide legal assistance in a fee-generating case. The bulk of Sec.
1609.3, however, prescribes the circumstances and procedures under
which recipients may accept fee-generating cases. To more aptly reflect
the substance of Sec. 1609.3, LSC proposed to rename Sec. 1609.3
Authorized representation in a fee-generating case. LSC received no
comments on this change and therefore adopts the proposed version in
this final rule.
Section 1609.4 Accounting for and use of attorneys' fees.
LSC proposed to revise part 1609's requirement to account for
receipt of attorneys' fees. Currently, Sec. 1609.4 requires that
attorneys' fees received in a case that the recipient used some amount
of LSC funds to handle be allocated to the LSC grant account in
proportion to which the LSC funds were used. 45 CFR 1609.4(a). This
language requires the accounting only for attorneys' fees received by
the recipient, which could be interpreted to mean that attorneys' fees
awarded to a staff attorney in his or her own name need not be remitted
to the recipient or be subject to the accounting requirement.
To clarify that attorneys' fee awards received by either the
recipient or a recipient's staff attorney are subject to the accounting
requirement, LSC proposed the following revisions to Sec. 1609.4.
First, LSC proposed to require recipients to file any petitions for
attorneys' fees in the name of the recipient and not in the name of any
staff attorney. To the extent a jurisdiction may allow an attorneys'
fee petition in the recipient's name rather than a staff attorney's
name, this change would help ensure that the court would award
attorneys' fees to the organization and not to an individual staff
attorney. LSC proposed placing this addition as Sec. 1609.4(a), and
redesignating paragraphs (a) and (b) of existing Sec. 1609.4 as
paragraphs (b) and (c), respectively.
Second, LSC proposed to state explicitly in Sec. 1609.4(b) that,
in the event a jurisdiction requires attorneys' fee petitions to be
made in a staff attorney's name, the staff attorney must remit the
award to the recipient, which must then allocate an award of attorneys'
fees to its LSC grant account in proportion to the amount of LSC funds
used to obtain the award. LSC believed that these two changes
accommodate variations in state and local rules governing the award of
attorneys' fees and help ensure that any attorneys' fee awards
supported by LSC funds are adequately credited to LSC funds.
Finally, to more aptly describe the substance of Sec. 1609.4, LSC
proposed changing the heading to Requesting and receiving attorneys'
fees.
Comment: NJP had no concerns about requiring fee petitions to be
made in the recipient's name to the extent permitted by law. NLADA
generally supported the proposed revision clarifying that attorneys'
fees are to be awarded to the recipient. NLADA, however, relayed a
recipient's concern that state court rules may require licensed,
individual attorneys to be designated on a petition for attorneys' fees
instead of an organization. This contrasts with the proposed rule,
which requires petitions for attorneys' fees to be filed in the name of
the recipient ``to the extent permitted by law.'' Recognizing there may
be differences among statutes, court rules, and other rules, NLADA
recommended that the rule be revised to state ``to the extent required
by law or rules in the jurisdiction.''
Response: LSC will adopt the recommendation with one change. As
NLADA noted, LSC does not intend for an attorney to violate any
applicable law or any applicable rule in his or her petition for
attorney fees. To clarify that the regulation requires compliance with
both the law and rules, LSC will add the language recommended by NLADA,
except that LSC will use the conjunction ``and'' between the phrases
``to the extent permitted by law'' and ``rules in the jurisdiction.''
Section 1609.5 Acceptance of reimbursement from a client.
To create consistency in the verbs used in the headings for
Sec. Sec. 1609.4 and 1609.5 and more aptly describe the substance of
the latter section, LSC proposed to change the heading to Receiving
reimbursement from a client. LSC proposed no substantive changes to
this section. LSC received no comments on this section. Consequently,
LSC adopts the language proposed in the NPRM in this final rule
Section 1609.6 Recipient policies, procedures and recordkeeping.
LSC proposed no changes to this section. LSC received no comments
on this section.
List of Subjects in 45 CFR Part 1609
Administrative practice and procedure, Grant programs--law, Legal
services.
For the reasons set forth in the preamble, the Legal Services
Corporation amends 45 CFR part 1609 as follows:
PART 1609--FEE-GENERATING CASES
0
1. The authority citation for part 1609 is revised to read as follows:
Authority: 42 U.S.C. 2996g(e).
0
2. In Sec. 1609.2:
0
a. Revise the section heading and paragraph (a);
0
b. Remove ``, or'' at the end of paragraph (b)(1) and add a semicolon
in its place;
0
c. Remove the period at the end of paragraph (b)(2) and add ``; or'' in
its place; and
0
d. Add paragraph (b)(3).
The revision and addition read as follows:
Sec. 1609.2 Definitions.
(a) Fee-generating case means any case or matter which, if
undertaken on
[[Page 20447]]
behalf of an eligible client by an attorney in private practice,
reasonably may be expected to result in a fee for legal services from
an award to a client.
(b) * * *
(3) A recipient provides only advice and counsel or limited
services, as those terms are defined in 45 CFR 1611.1(a) and (e), to an
eligible client.
0
3. Revise the heading of Sec. 1609.3 to read as follows:
Sec. 1609.3 Authorized representation in a fee-generating case.
* * * * *
0
4. Revise Sec. 1609.4 to read as follows:
Sec. 1609.4 Requesting and receiving attorneys' fees.
(a) Any petition seeking attorneys' fees for representation
supported in whole or in part with funds provided by LSC, shall, to the
extent permitted by law and rules in the jurisdiction, be filed in the
name of the recipient.
(b) Attorneys' fees received by a recipient or an employee of a
recipient for representation supported in whole or in part with funds
provided by LSC shall be allocated to the fund in which the recipient's
LSC grant is recorded in the same proportion that the amount of LSC
funds expended bears to the total amount expended by the recipient to
support the representation.
(c) Attorneys' fees received shall be recorded during the
accounting period in which the money from the fee award is actually
received by the recipient and may be expended for any purpose permitted
by the LSC Act, regulations, and other law applicable at the time the
money is received.
0
5. Revise the heading of Sec. 1609.5 to read as follows:
Sec. 1609.5 Receiving reimbursement from a client.
* * * * *
Dated: April 26, 2017.
Stefanie K. Davis,
Assistant General Counsel.
[FR Doc. 2017-08835 Filed 5-1-17; 8:45 am]
BILLING CODE 7050-01-P
