Restriction on Solicitation, 25813-25816 [2024-07761]

Agencies

• LEGAL SERVICES CORPORATION

[Federal Register Volume 89, Number 72 (Friday, April 12, 2024)]
[Rules and Regulations]
[Pages 25813-25816]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07761]


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LEGAL SERVICES CORPORATION

45 CFR Part 1638


Restriction on Solicitation

AGENCY: Legal Services Corporation.

ACTION: Final rule.

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SUMMARY: This final rule revises the Legal Services Corporation's (LSC 
or Corporation) regulation prohibiting solicitation of clients. LSC 
adds definitions for the terms ``communicate'' and ``communication,'' 
revises the existing text to make language more active, and clarifies 
how recipients may interact with client-eligible individuals. The main 
goal of these revisions is to formalize the interpretations of LSC's 
rule on solicitation that the Office of Legal Affairs (OLA) has issued 
over the past several years, making clear that recipients may inform 
client-eligible individuals about their rights and responsibilities and 
provide them with information about the recipients' intake processes, 
as well as how recipients may relay that information without violating 
either LSC's Fiscal Year 1996 appropriations statute or the rule 
prohibiting solicitation.

DATES: This final rule is effective on May 13, 2024.

FOR FURTHER INFORMATION CONTACT: Elijah Johnson, Assistant General 
Counsel, Legal Services Corporation, 3333 K Street NW, Washington, DC 
20007; (202) 295-1638 (phone), or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On April 26, 1996, Congress passed the appropriations act for 
Fiscal Year 1996. Public Law 104-134, 110 Stat. 1321. Through this 
statute, Congress enacted a series of restrictions applicable to LSC 
grant recipients' activities. One of the restrictions was section 
504(a)(18), which states that grant recipients ``will not accept 
employment resulting from in-person unsolicited advice to a nonattorney 
that such nonattorney should obtain counsel or take legal action, and 
will not refer such nonattorney to another person or entity or an 
employee of the person or entity, that is receiving financial 
assistance provided by the Corporation[.]'' Pubic Law 104-134, 110 
Stat. 1321, 1321-56.
    On May 19, 1996, the Operations and Regulations Committee 
(Committee) of the LSC Board of Directors requested that LSC staff 
prepare an interim rule to implement section 504(a)(18), and in April 
1997, LSC promulgated part 1638. Consistent with section 504(a)(18), 
LSC's rule prohibits a grant recipient from representing an individual 
who had not sought legal advice from the grant recipient but who the 
grant recipient had provided in person unsolicited advice to seek legal 
representation or take legal action. 45 CFR 1638.3(a). Part 1638 also 
prohibits a grant recipient who has given in-person unsolicited advice 
to an individual from referring that individual to another LSC grant 
recipient. 45 CFR 1638.3(b). Finally, LSC included language in part 
1638 stating that providing legal information, including information 
about the availability of counsel and a grant recipient's intake 
procedures, are permissible activities. 45 CFR 1638.4(a).
    The regulation's language caused grantees to question whether they 
can provide information about individuals' legal rights and the 
availability of legal assistance through texts, phone calls, and in-
person contacts at court clinics. Over the years, OLA has received 
multiple inquiries from grant recipients and other stakeholders about 
the types of proposed outreach activities permissible under part 1638. 
Examples of inquiries include:
     Is it permissible to send text messages to unrepresented 
individuals explaining defendants' rights in eviction cases?
     Is it permissible to inform individuals of the 
availability of legal assistance via mailings and text messages?
     What activities are allowed when interacting with 
individuals approaching grant recipient attorneys at court-based self-
help clinics?
    In July 2003, OLA published an advisory opinion (AO) answering a 
question from the Northwest Justice Project (``NJP''). NJP asked 
whether they could hand out informational brochures to individuals in 
the courthouse as part of their administration of the Housing Justice 
Program (``HJP''). The HJP provided same-day advice and representation 
from volunteer attorneys to LSC-eligible clients in eviction 
proceedings in court. The previous coordinator of the HJP, a non-LSC-
funded organization, contacted prospective clients at the courthouse, 
advised them of the availability of services, asked if they would like 
to discuss their case with a lawyer, and represented some the same day. 
Upon assuming operation of the program, NJP stopped engaging in direct 
contact and submitted its inquiry to LSC. NJP contacted LSC because it 
was concerned that the lack of direct client engagement had led to a 
decline in the usage of HJP services. LSC confirmed that under part 
1638, it would be impermissible for NJP to provide unsolicited advice 
to prospective clients at the courthouse to advise them of the 
availability of legal services and ask individuals if they wanted to 
discuss their case with a lawyer and then accept those individuals as 
clients. EX-2003-1011, June 9, 2003. This advisory opinion remained 
LSC's position until 2016.
    In 2016, OLA received a question from a law professor who was 
researching methods to increase the likelihood that individuals living 
in poverty would engage with the legal system, including by seeking 
free legal services. The study proposed to test the effectiveness of 
different types of mailings sent to defendants in debt collection 
cases. The professor asked OLA whether part 1638 prohibits a grant 
recipient from representing individuals to whom the grant recipient has 
mailed information regarding their rights and

[[Page 25814]]

identifying the types of legal services provided by the grant 
recipient. AO 2016-001. OLA opined that a mailing from an LSC grant 
recipient would violate part 1638 if it provided (1) ``unsolicited 
advice'' and (2) constituted a ``personal letter.'' Id. OLA also stated 
that a mailing that contains only ``information regarding legal rights 
and responsibilities or . . . information regarding the recipient's 
services and intake procedures'' does not constitute ``unsolicited 
advice.'' Further, a mailing does not constitute a ``personal letter'' 
if the letter provides only generic information that is not tailored to 
the individual receiving the mailing and it does not include specific 
facts related to the individual's legal issues. Id. OLA concluded that 
a mailing that contains unsolicited advice that is not tailored to the 
individual receiving the mailing is not considered a ``personal 
letter'' under Sec.  1638.2(a). Id.
    In 2020, OLA issued an advisory opinion addressing a question 
involving the permissibility of a grant recipient representing 
individuals that it had either (1) contacted over the telephone or via 
text message; or (2) initiated contact with through the grant 
recipient's ongoing presence in the courthouse. Regarding in-person 
contact in courthouses, OLA confirmed that part 1638 does not prohibit 
a grant recipient from initiating contact with individuals if the grant 
recipient is providing ``information regarding legal rights and 
responsibilities'' or providing information about the grant recipient's 
intake process while ``. . . maintain[ing] an ongoing presence in a 
courthouse to provide advice at the invitation of the court[.]'' AO 
2020-004. Additionally, part 1638 does not prohibit a grant recipient 
from representing an individual that the grant recipient initiated 
contact with over the telephone or via text message as long as the 
communication contains only generic information that is not tailored to 
the individual or the specific facts of the individual's legal issues. 
Id.
    LSC issued its most recent guidance on part 1638 in 2022. In 
Program Letter 22-1, LSC advised that grant recipients could send text 
messages to defendants (tenants) in landlord/tenant cases to notify 
them that an eviction case has been filed against them; to let them 
know of any upcoming court appearances; and to inform them of the 
availability of counsel. Program Letter 22-1. The program letter cited 
previous guidance from OLA regarding unsolicited advice via text 
message and mail.
    LSC believes regulatory action is justified at this time for two 
reasons. First, OLA has been applying a nearly thirty-year-old rule 
concerning communications to new technologies and outreach strategies 
developed since part 1638 was published. Second, regulatory action is 
justified because LSC has continued to receive questions from grantees 
and other stakeholders about whether certain proposed outreach 
activities are permissible under part 1638. These questions became more 
compelling as governments began lifting moratoria on filing evictions 
and pursuing debt collection cases that had been put into place near 
the beginning of the COVID-19 pandemic. Rulemaking to make part 1638 
more consistent with the language of section 504(a)(18) has become more 
critical to helping grantees inform people living in poverty who are 
facing eviction or potentially significant financial consequences about 
their rights and the availability of attorneys to assist them.
    On July 25, 2023, the Committee voted to recommend that the LSC 
Board authorize rulemaking on part 1638. On July 27, 2023, the Board 
authorized LSC to begin rulemaking. On October 16, 2023, the Committee 
voted to recommend that the Board authorize publication of a notice of 
proposed rulemaking (NPRM) in the Federal Register for notice and 
comment. On October 17, 2023, 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 
October 25, 2023. 88 FR 73303, Oct. 25, 2023. The comment period 
remained open for sixty days and closed on December 26, 2023.
    After consideration of the comments received during the comment 
period, on April 2, 2024, the Committee voted to recommend that the LSC 
Board adopt this final rule and approve its publication in the Federal 
Register. On April 8, 2024, the Board voted to adopt and publish this 
final rule.
    Materials regarding this rulemaking are available in the open 
rulemaking section of LSC's website 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 seven comments during the public comment period. 
Comments were received from the following: (1) 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; (2) the American Bar 
Association (ABA) through its Standing Committee on Legal Aid and 
Indigent Defense (SCLAID); (3) Lakeshore Legal Aid, an LSC-funded 
recipient; (4) four law students and one private individual. LSC 
received one telephone call from a LSC grantee former Executive 
Director after the comment period. All commenters were generally 
supportive of LSC's proposed changes to part 1638.

III. Proposed Changes

Section 1638.1 Purpose

    LSC proposed to make no changes to this section. LSC received no 
comments on this section.

Section 1638.2 Definitions

    LSC proposed to add a definition for the terms communicate and 
communication that pertains to mailed, emailed, and texted messages, as 
opposed to merely in-person engagements. With advances in technology 
since the inception of this prohibition, this change will provide 
greater flexibility and clarity around the methods of communication 
that are permitted. This change is not intended to require recipients 
to use particular methods to reach client-eligible individuals. Rather, 
it clarifies which methods are permissible.
    LSC also proposed to amend the definition of the term in-person to 
include virtual engagements such as clinics conducted via Zoom or other 
videoconferencing software. LSC proposed to make this change to reflect 
the transition, hastened by the COVID-19 pandemic, to the provision of 
legal services through virtual means in addition to traditional in-
person engagements.
    Finally, to account for adding a new definition, LSC proposed to 
redesignate existing paragraph (b), defining the term unsolicited 
advice, as paragraph (c).
    Comments: Commenters generally supported LSC's proposed changes to 
provide clarity and greater flexibility for recipients to reach client-
eligible members. For example, in the ABA's view, ``the proposed 
revisions to section 1638 that clearly delineate permissible 
communication and impermissible in-person solicitation are consistent 
with what is allowed under Model Rule 7.3. The revisions setting forth 
permissible communication such as `sending information via mailings, 
text message, email, or other methods of voice or electronic 
Communication' meet the

[[Page 25815]]

`easily disregarded' standard under Rule 7.3, as they do not implicate 
a potential for undue influence to be exerted by the lawyer in the 
interaction.'' Additionally, at the Committee meeting on January 21, 
2024, this comment was discussed, and Board members commented that 
phone use is still very prevalent in some areas, and it is important 
for recipients to be able to provide legal information to eligible 
clients by calling the clients because that is the only viable means of 
communication.
    Some commenters recommended additional refinement of the terms 
communicate and communication. One person commented that ``further 
explanation is required for the record as per why LSC is declining to 
include live phone calls within its definition of in-person activity'' 
because LSC's decision to not extend ``in-person activity'' to phone 
calls by narrowing the proposed definition to ``face-to-face 
encounters'', is ``directly contrary to Model Rule 7.3's explicit 
inclusion of prohibiting solicitation via live telephone.'' Another 
suggested clarifying ``what types of communication are not considered 
solicitation under the rule'' because the proposed rule definitions 
``could potentially include any form of interaction between a recipient 
and a client-eligible individual.'' Additionally, the commenter 
continued, the rule should specify how recipients may communicate with 
client-eligible individuals without violating part 1638. Lastly, LSC 
``may want to consider adopting or adapting the ABA's guidance on 
electronic and written communication to clarify its own rule on 
solicitation. This may help recipients avoid confusion and potential 
violations of the rule.''
    Response: LSC believes the language in the proposed rule provides 
sufficient clarity and, therefore, will adopt this section with no 
changes. It is impossible to list out every potential scenario that may 
arise and language such as ``not limited to'' and ``including'' is 
intended to signal that the examples are not an exhaustive list. LSC 
agrees with the ABA's comments that the proposed revisions to this 
section clearly delineate permissible communication and impermissible 
in-person solicitation and the changes are consistent with what is 
allowed under Model Rule 7.3.
    Regarding the use of telephone, the definition of ``communication'' 
includes methods of voice or electronic communication. The telephone is 
an example of voice communication but is not the only means of voice 
communication. In 2020, OLA opined that part 1638 does not prohibit a 
grant recipient from representing an individual that the grant 
recipient initiated contact with over the telephone as long as the 
communication contains only generic information that is not tailored to 
the individual or the specific facts of the individual's legal issues. 
AO-2020-004 (June 24, 2020).

Section 1638.3 Prohibition

    LSC proposed to edit the text to be active as opposed to passive. 
For example, ``shall not represent'' replaced ``are prohibited from 
representing.''
    Comments: LSC received one comment in support of the change.
    Response: LSC adopts the proposed version in this final rule 
without change.

Section 1638.4 Permissible Activities

    LSC proposed to edit the text of this rule to be active as opposed 
to passive. Additionally, LSC proposed to revise Sec.  1638.4(a) to 
permit communication and in-person engagement about individuals' legal 
rights and responsibilities and grantees' intake procedures. LSC 
believes that the proposed language clarifies that grantees are 
permitted to send individuals information about rights and 
responsibilities that could lend itself to individuals filing 
complaints, either pro se or with the assistance of counsel. This 
instance may arise in the context of housing cases; for example, in 
housing habitability and tenant building purchase cases. A grantee may 
discover that there is a building with numerous safety issues and 
communicate with the tenants about the warranty of habitability, their 
options for getting the landlord to make repairs, including affirmative 
litigation, and the grantee's intake process. After receiving such 
legal information, some tenants could conceivably apply for legal 
assistance to help them pursue legal action to force repairs. This 
approach is consistent with the text of section 504(a)(18) of LSC's 
1996 appropriation statute, which speaks in general terms about 
prohibited solicitation. It is critical to closing the justice gap that 
grantees are aware that they can advise their client-eligible 
communities about issues for which affirmative litigation may be an 
appropriate solution.
    Further, LSC proposed to add paragraphs (c) and (e) to incorporate 
OLA's interpretations of existing part 1638 and the guidance LSC 
provided in Program Letter 22-1. Finally, LSC proposed to redesignate 
existing paragraph (c) as paragraph (d) and to revise new paragraph (d) 
to replace the phrase ``physically or mentally disabled'' with the 
person-first term ``living with a physical or mental disability.''
    Comments: Commenters generally supported LSC's proposed changes. 
The ABA noted that ``the range of permissible activities set forth 
under section 1638.4 reflects the same types of activities in which 
lawyers in general may engage under Rule 7.3.'' Additionally, Lakeshore 
Legal Aid commented that ``the proposed changes to section 1638, 
particularly section 1638.4(b), clarify that this critical notice to 
tenants is allowable in the regulation itself. This change will 
encourage legal aid programs to provide the exact notice that tenants 
need to avail themselves of legal representation, protect their rights, 
and remain in their homes.''
    There were two main suggested edits. The first was to make this 
section ``more explicit that this list of permissible activities is an 
illustrative one, not an exhaustive one . . . The intention of this 
revision would be undermined if an LSC recipient could look at this 
regulation a few years from now and come away thinking that a 
permissible outreach effort should be avoided because it was not one of 
the specific activities listed in Sec.  1638.4.''
    The second is regarding the phrase in Sec.  1638.4(a) ``at the 
invitation of the court.'' NLADA observed that the meaning of the 
phrase is unclear because ``[a]n invitation could be a formal letter, a 
request by a judge on the record, or a simple ask by a clerk or other 
court staff.'' They continued: ``[m]any LSC recipients work closely 
with courts to maintain a presence in the courthouse. This increases 
the ability to provide legal information and reach eligible clients who 
may in fact be seeking legal advice.'' NLADA suggested changing the 
language to ``in cooperation with the court . . . This will also help 
clarify that LSC recipients do not need to wait for a formal invitation 
by the court to reach out to court officials and work alongside courts 
to establish a courthouse presence and reach clients in need of 
services.'' This comment was also discussed at the January 21, 2024, 
Committee meeting, during which Board members remarked that if the 
statute does not require recipients to be present in the courthouse 
``at the invitation of the court,'' the phrase should not be included 
in this rule. Further, recipients should cooperate with courts, but 
since courthouses are public buildings, recipients should not be 
precluded from performing important functions for eligible clients if 
the court has not invited the recipient or is not particularly 
cooperative.

[[Page 25816]]

    Lastly, one commenter suggested updating the new paragraph (d), 
which is a redesignation of existing paragraph (c). The commenter 
recommended that LSC revise the list of individuals who may not be able 
to seek legal assistance on their own to include persons who are 
incarcerated, unhoused, living in institutions or correctional 
facilities, or living with a physical or mental disability.
    Response: LSC agrees it is important for this rule to be flexible 
enough for recipients to apply the rule to new technologies and 
circumstances not contemplated at the time of these changes. Therefore, 
the section will be revised to indicate the listed methods are examples 
of permissible activities.
    Further, LSC agrees that a recipient may have a difficult time 
proving they were in a courthouse ``at the invitation of the court'' 
particularly because the rule does not indicate what constitutes an 
``invitation.'' Although not contemplated in the NPRM, LSC believes 
that removal of ``at the invitation of the court'' is a logical 
outgrowth of the proposed rule changes. The purpose of this rulemaking 
was to clarify and simplify part 1638. Removal of this language is not 
a substantive change, rather it is a technical change to remove 
ambiguity. As mentioned during the January 21, 2024, Committee meeting, 
section 504(a)(18) does not require this language. In fact, the statute 
does not discuss a recipient's activities in courthouses at all. 
Further, as the written comments note, a recipient's ongoing presence 
in a courthouse is sufficient to establish the court's approval of the 
recipient being in the courthouse. Therefore, the term will be removed 
for the sake of clarity.
    Lastly, to achieve active voice, LSC will amend the last clause of 
Sec.  1638.4(d) to read as ``including institutionalized individuals or 
individuals living with a physical or mental disability.''

Section 1638.5 Recipient Policies

    LSC proposed no changes to this section. LSC received no comments 
on this section.

List of Subjects in 45 CFR Part 1638

    Grant programs--law, Legal services.

    For the reasons set forth in the preamble, the Legal Services 
Corporation amends 45 CFR part 1638 as follows:

PART 1638--RESTRICTION ON SOLICITATION

0
1. The authority citation for part 1638 is revised to read as follows:

    Authority:  42 U.S.C. 2996g(e).


0
2. Revise Sec.  1638.2 to read as follows:


Sec.  1638.2  Definitions.

    (a) Communicate or communication means to share information. 
Permissible forms of communication include, but are not limited to, 
sending information via mailings, text message, email, or other methods 
of voice or electronic communication.
    (b) In-person means a face-to-face encounter, including virtual 
clinics or other encounters via videoconference.
    (c) Unsolicited advice means advice to obtain counsel or take legal 
action given by a recipient or its employee to an individual who did 
not seek the advice and with whom the recipient does not have an 
attorney-client relationship.

0
3. Revise Sec.  1638.3 to read as follows:


Sec.  1638.3  Prohibition.

    (a) Recipients and their employees shall not represent a client as 
a result of in-person unsolicited advice.
    (b) Recipients and their employees shall not refer to other 
recipients individuals to whom they have given in-person unsolicited 
advice.

0
4. Revise Sec.  1638.4 to read as follows:


Sec.  1638.4  Permissible activities.

    A recipient may:
    (a) Communicate about legal rights and responsibilities or the 
recipient's services and intake procedures or provide the same 
information through community legal education activities. Recipients 
may engage in various activities including, but not limited to, 
outreach, public service announcements, maintaining an ongoing presence 
in a courthouse to provide advice, disseminating community legal 
education publications, and giving presentations to groups that request 
them.
    (b) Communicate to parties in civil cases to notify them that a 
case has been filed against them; to inform them of upcoming court 
dates; to inform them that counsel may be available to represent them; 
and to provide information about intake.
    (c) Represent an otherwise eligible individual requesting legal 
assistance from the recipient as a result of a communication or 
information provided as described in paragraph (a) of this section, 
provided that the request has not resulted from in-person unsolicited 
advice.
    (d) Represent or refer clients pursuant to a statutory or private 
ombudsman program that provides investigatory and referral services 
and/or legal assistance on behalf of persons who are unable to seek 
assistance on their own, including institutionalized individuals or 
individuals living with a physical or mental disability.
    (e) Represent an individual with whom the recipient initiated 
contact over the phone or via an electronic platform so long as the 
communication provides only generic information that is not tailored to 
the individual or the specific facts of the individual's legal issues.

    Dated: April 8, 2024.
Stefanie Davis,
Deputy General Counsel, Legal Services Corporation.
[FR Doc. 2024-07761 Filed 4-11-24; 8:45 am]
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