2001—The Legal Services Corporation Act of 1974 created a federal subsidy program that provides financial support for legal assistance to the poor in noncriminal matters. To keep the program from being used for political purposes, Congress has tightly regulated the use of LSC funds. One funding restriction, added in 1996, withheld LSC funds from entities that took part, on either side, in litigation to reform welfare.
In Legal Services Corp. v. Velasquez, the Supreme Court, by a vote of 5 to 4, rules (in an opinion by Justice Kennedy, joined by Stevens, Souter, Ginsburg, and Breyer) that the 1996 funding restriction violates the First Amendment. Justice Scalia, in dissent (joined by Rehnquist, O’Connor, and Thomas), explains that the case is “embarrassingly simple: The LSC subsidy neither prevents anyone from speaking nor coerces anyone to change speech, and is indistinguishable in all relevant respects from the subsidy upheld in [the Court’s 1991 ruling in] Rust v. Sullivan.”