Can Maryland Legal Services Corporation money pay for legal help for organizations, or only for individual poor clients?

Plain-English summary

The Maryland Legal Services Corporation (MLSC) does not represent anyone itself; it funds nonprofit organizations that furnish legal assistance to "eligible clients," people who cannot afford a lawyer under income and asset standards. Its chairman, Benjamin L. Cardin, asked whether MLSC grants could pay for legal services to two kinds of organizations: groups made up primarily of people who would individually qualify for MLSC-funded help, and nonprofits that serve the poor (housing, day care, health care, employment assistance) but are not composed of poor members.

The opinion drew the line between the two. The Act's central aim is legal help for impoverished individuals, but nothing in it flatly bars assisting organizations. When poor individuals form a group to pursue common goals, helping the group conduct its affairs still delivers legal services to eligible clients, and the class action prohibition in §45J(b)(6) is not implicated, since a class action is not really an "organization" at all. The strongest support came from the statute's federal model: the Maryland enabling act was closely patterned on the federal legal services statute, whose implementing regulation, 45 C.F.R. §1611.5(c), expressly allows grantees to assist groups "primarily composed of persons eligible for assistance." The parallel structure signaled that Maryland's program was meant to be no more restrictive than the federal one. Organizations that merely serve the poor came out differently. Free legal help for such a nonprofit frees up its resources and benefits the poor indirectly, but the poor themselves receive no legal assistance, and MLSC exists to provide exactly one thing: services of a legal character to eligible clients. The federal program had reached the same result, amending its regulation in 1983 to drop an earlier authorization for groups working "in furtherance of the interests of the poor."

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Could a tenants' association of low-income renters get MLSC-funded legal help?
Under this 1990 opinion, yes, if the organization was composed primarily of individuals who themselves met the eligibility standards. Assisting such a group with its affairs counted as providing legal assistance to eligible clients.

Could a nonprofit that runs housing or day care programs for the poor get MLSC-funded legal help?
No. Even though free legal services would stretch the nonprofit's resources and indirectly benefit the poor, the poor themselves would not be receiving legal assistance, so the grant would exceed MLSC's authority.

Didn't the ban on class actions block help to organizations of poor people?
No. The opinion explained that a class action is a procedural device for aggregating similar individual claims, not the representation of a genuine organization, so helping a real membership organization did not violate §45J(b)(6). The opinion cautioned, though, that an organization formed just to get around the class action ban could not be represented with MLSC funds.

Why did the federal rules matter for a Maryland program?
Because the General Assembly built MLSC in 1982 as a state-level replacement for shrinking federal Legal Services Corporation funding and copied the federal act nearly verbatim. The opinion read that parallelism as intent that the state program be no more restrictive than the federal one, which allowed assistance to organizations of eligible clients.

Background and statutory framework

MLSC was created by the Maryland Legal Services Corporation Act, Article 10, in response to cuts in federal Legal Services Corporation appropriations (§45B(b)). It funds nonprofits "for the purpose of furnishing legal assistance to eligible clients" (§45G(b)), with "legal assistance" defined in §45C(g) and eligibility set by income, assets, and obligations under §§45C(c) and 45G(e), capped at 50 percent of the state median family income. Grantees must weigh the relative need of clients (§45J(a)) and may not use funds for class action representation (§45J(b)(6)), the one place the state law is stricter than the federal restriction in 42 U.S.C. §2996e(d)(5). Testimony from then-Attorney General Steven H. Sachs during the Act's passage framed its purpose around events in a poor person's life: evictions, debt suits, child support, benefit terminations.

The federal act barred grantees from organizing associations while expressly permitting legal assistance to eligible clients (42 U.S.C. §2996f(b)(7)), and its regulation, 45 C.F.R. §1611.5(c), authorized assistance to a group "primarily composed of persons eligible for assistance." A substantially similar regulation was in force when MLSC was created in 1982; a 1983 amendment eliminated the earlier authorization for groups engaged in furtherance of the interests of the poor, which the Legal Services Corporation justified by the program's premise of enabling eligible clients to assert their own interests. The opinion also traced legal services back to the community action programs of the Economic Opportunity Act of 1964 and its 1967 amendments, whose self-sufficiency goals supported assisting organizations formed by the poor themselves.

Citations and references

Statutes and regulations:

• Maryland Legal Services Corporation Act, Article 10: §45B (legislative findings), §45C (definitions), §45G(b) and (e) (grants and eligibility), §45H(b)(1) (litigation bar), §45J(a) and (b)(6) (grantee duties and class action prohibition)
• The federal legal services statute: 42 U.S.C. §2996e(d)(5) (class action restriction) and 42 U.S.C. §2996f(b)(7) (organizing prohibition); 45 C.F.R. §1611.5(c) (assistance to groups of eligible clients), amended at 48 Fed. Reg. 54,203 (1983)
• Economic Opportunity Act of 1964, Pub. L. No. 88-452, §§201-211; Economic Opportunity Amendments of 1967, Pub. L. No. 90-222 (repealed 1974)

Legislative materials: Statement of Steven H. Sachs, Attorney General of Maryland, before the Maryland Senate Judicial Proceedings Committee (March 2, 1982); H.R. Rep. No. 866, 90th Cong., 1st Sess. (1967); 1974 U.S. Code Cong. & Admin. News 3882-83

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1990/Volume75_1990.pdf (this opinion appears at printed pages 336-342 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

LEGAL SERVICES CORPORATION

Legal Assistance Grants — Scope of Grant-Making Authority — Corporation May Make Grants For Provisions of Legal Assistance to Organizations Primarily Composed of Eligible Clients, But Not For Provision of Legal Assistance to Other Organizations

February 27, 1990

The Honorable Benjamin L. Cardin
Chairman
Maryland Legal Services Corporation

 You have requested our opinion on whether the Maryland Legal Services Corporation ("MLSC") may make grants for the provision of legal services to organizations of either of two types: (i) organizations composed primarily of individuals who are themselves eligible to receive MLSC-funded legal assistance; or (ii) organizations that provide services such as housing, day care, health care, or employment assistance to the poor but that are not themselves composed of eligible individuals. For the reasons given below, we conclude that MLSC may make grants for the provision of legal services to organizations of the first type. However, MLSC may not make grants for the provision of legal services to organizations of the second type.

I

Background

 MLSC does not provide direct legal services. Indeed, it is expressly prohibited from participating in litigation unless it or one of its grantees is a party or unless the interpretation of MLSC's enabling act or guidelines is an issue. Article 10, §45H(b)(1). Rather, MLSC provides financial assistance to nonprofit organizations "for the purpose of furnishing legal assistance to eligible clients." Article 10, §45G(b). See also §45C(e). "Legal assistance" is defined to mean legal representation, including "training, research, coordination with private attorneys and other activities necessary to insure the delivery of quality legal services." §45C(g). An "eligible client" is a person determined, on the basis of income, assets, and obligations, to be unable to afford legal assistance. §§45C(c) and 45G(e).

 Nonprofit organizations that receive grants from MLSC are required, in using those moneys, to "take into account the relative need for service of clients, particularly the needs of eligible clients with special difficulties of access to legal services or with special legal problems, including elderly and handicapped individuals." §45J(a). In addition, grantees are expressly prohibited from using grant moneys in certain ways. One of those is a prohibition against "provid[ing] representation in a class action suit." §45J(b)(6).

II

Legal Assistance to Groups of Indigent Individuals

 The central thrust of the Maryland Legal Services Corporation Act (the "Act") undeniably is the provision of legal services to impoverished individuals. Indeed, the Act is expressly premised on legislative recognition of the "need to provide equal access to the system of justice for individuals who seek redress of grievances." §45B(a).

 The provisions regarding client eligibility for legal assistance under an MLSC grant reinforce this legislative focus on the individual. Under those provisions, MLSC is required to set maximum income levels for client eligibility, which may not exceed 50 percent of the median family income for the State. In setting those eligibility standards, MLSC must consider the size of the client's family, cost of living variations among areas of the State, and a client's "fixed debts and medical expenses" — matters that generally have no application to organizations. §45G(e).

 Moreover, testimony offered during the General Assembly's consideration of the Act by the then-Attorney General, a major proponent of the Act, likewise indicates that the focus of concern was for legal representation of individuals. In explaining the need for the Act, the Attorney General offered examples of "event[s] in a poor person's life" for which legal assistance is needed: "an eviction notice, a suit for non-payment of an account with a furniture store, non-receipt of a child support payment, denial of special education services for a mentally retarded grade schooler, termination of a disability pension or welfare grant, failure of an employer to pay minimum wage, [or] the involuntar[y] institutionalization of disturbed relatives ...." Statement of Steven H. Sachs, Attorney General of Maryland, before the Maryland Senate Judicial Proceedings Committee (March 2, 1982).

Despite this primary focus, however, we do not think that the General Assembly intended to flatly prohibit the use of MLSC funds for counseling or representation of any organizations. No such prohibition is expressed in Article 10; neither, in our view, is it implied.

 To be sure, the use of MLSC funds for representation in class action suits is absolutely prohibited by §45J(b)(6). But a class action does not involve the representation of an "organization" in any genuine sense. A class action is simply a convenient means of addressing through a single lawsuit the closely similar claims of a large number of individuals, most of whom will likely never have any contact with each other. See Md. R. Proc. 2-231. When, therefore, a group of poor individuals form an organization through which to work toward common goals, the provision of legal assistance to the organization in conducting its affairs would not per se violate the prohibition against class action representation.1

 Nor do we think that providing legal assistance to such an organization would otherwise contravene the legislative intent. The Act's evident aim was to make available, at least so far as resources would permit, legal assistance for the poor in general civil matters that would be roughly equivalent to the services available to the more affluent. Indeed, the General Assembly expressly stated its recognition of "a need to continue and expand legal assistance [then being provided] to those who would otherwise be unable to afford adequate legal counsel ...." §45B(c). Providing legal assistance to groups formed by impoverished individuals for the accomplishment of their common goals is consistent with this legislative aim.

 Our view in this regard is bolstered by consideration of the antecedents of MLSC. The Maryland Legal Services Corporation was created in response to significant reductions in federal appropriations for the federal Legal Services Corporation. Article 10, §45B(b). Its enabling act was closely patterned on the federal act, and the State-level legal services program was designed to be much the same as that administered by the federal Legal Services Corporation. Hence, the powers, duties, and limitations on MLSC and its grantees contained in Article 10 are virtually identical in substance to those contained in the federal statute, insofar as the federal provisions are applicable on the State level. Indeed, the only instance in which a state provision differs from the federal provision on which it is modeled relates to class actions, which are restricted under 42 U.S.C. §2996e(d)(5) but prohibited under Article 10, §45J(b)(6).

 One restriction in the federal law that does not appear in Article 10 is a prohibition against grantees' use of federal Legal Services Corporation funds "to initiate the formation, or act as an organizer, of any association, federation, or similar entity, except that this paragraph shall not be construed to prohibit the provision of legal assistance to eligible clients ...." 42 U.S.C. §2996f(b)(7). This provision was evidently included in response to earlier complaints that recipients of similar federal grants had urged the formation of political action organizations and had been the principal organizers of those groups. See 1967 U.S. Code Cong. & Admin. News 2428, (minority report on Economic Opportunity Amendments of 1967). The committee report on the bill enacting this provision explained it as follows:

          The Committee expects that pursuant to guidelines issued by the corporation, recipients [of the funds] shall provide appropriate legal assistance to eligible clients and organizations of eligible clients. Recipients and their employees are prohibited from organizing a group, but shall be permitted to prepare papers of incorporation and render other legal assistance as necessary.

1974 U.S. Code Cong. & Admin. News at 3882-83.

 The regulation implementing 42 U.S.C. §2996f(b)(7) authorizes recipients of Legal Services Corporation grants to "provide legal assistance to a group, corporation, or association if it is primarily composed of persons eligible for assistance under the [Legal Services Corporation] Act and if it provides information showing that it lacks, and has no practical means of obtaining, funds to retain private counsel." 45 C.F.R. §1611.5(c). A substantially similar federal regulation was in effect when the MLSC was created in 1982.2 Thus, the federal law on which Article 10 was modeled permitted the provision of legal services to organizations of eligible clients.

 We think that the parallelism in structure and wording between the state and federal laws evidences a legislative intent that, except as expressly provided, the State legal services program is to be no more restrictive than the federal program. Article 10 is silent with regard to the activities of grant recipients in relation to organizations of eligible clients. Accordingly, we think that the Maryland law should be construed to permit the use of MLSC funds for legal assistance to those organizations.

 Finally, we think that the provision of legal services to organizations composed primarily of eligible clients is consistent with the impetus for the initial creation of legal assistance programs. The original legal services programs arose as part of the community action programs funded under the Economic Opportunity Act of 1964, Pub. L. No. 88-452, §§201-211, 78 Stat. 508, reprinted in 1964 U.S. Code Cong. & Admin. News 585, 595-99. Those programs were intended to combat poverty by providing services "designed to aid the poor [to] achieve self-sufficiency." H.R. Rep. No. 866, 90th Cong., 1st Sess., reprinted in 1967 U.S. Code Cong. & Admin. News 2428, 2447.

 In 1967 federally funded community action agencies were given express authorization to conduct legal services programs when necessary to accomplish the objectives of general community action programs. Economic Opportunity Amendments of 1967, Pub. L. No. 90-222, §222(a)(3), 81 Stat. 672, reprinted in 1967 U.S. Code Cong. & Admin. News 743, 776 (repealed 1974). Those objectives included assisting the poor "to remove obstacles and solve personal and family problems which block the achievement of self-sufficiency [and] to achieve greater participation in the affairs of the community ...." Pub. L. No. 90-222, 221(a)(8) and (9), reprinted in 1967 U.S. Code Cong. & Admin. News at 774 (repealed 1974). Providing legal assistance to organizations composed of eligible clients would further that underlying aim.

III

Legal Assistance to Groups Serving the Poor

 We do not, however, reach the same conclusion with regard to organizations that provide services to low-income individuals and families but that are not themselves composed of low-income individuals.

 The MLSC was created to ensure the availability of but one kind of assistance — legal counsel and representation. Therefore, we believe that the appropriateness of any contemplated use of MLSC funds must be judged by whether the use will provide the poor with services of a legal character.

 When an organization that provides services like housing, day care, or employment assistance to the poor receives free legal services, that assistance undoubtedly enhances the organization's ability to serve its clients. At a minimum, more of the organization's resources are available to the poor than would otherwise be the case. The poor to that extent unquestionably benefit from the organization's receipt of legal assistance. Nonetheless, the poor themselves do not receive legal assistance in that situation. Hence, we think that the provision of legal services to an organization whose membership is not composed primarily of individuals who are themselves eligible for legal assistance would be beyond the scope of the authority of MLSC.

 We note, moreover, that the federal statute has evidently been construed in the same way. Under 45 C.F.R. §1611.5(c), recipients of federal Legal Services Corporation grants may provide legal assistance to organizations primarily composed of eligible clients. No similar provision is made for legal assistance to other organizations. Indeed, 45 C.F.R. §1611.5(c) was amended in 1983 to eliminate an earlier authorization of legal assistance to groups engaged in "furtherance of the interests of the poor." 48 Fed. Reg. 54,203 (1983). The Legal Services Corporation justified the revised regulation as more in keeping with the "fundamental premise of the Legal Services program ... to provide legal representation by which eligible clients can assert their own interests ...." Id. (emphasis in original).

IV

Conclusion

 In sum, it is our opinion that MLSC may make grants for the provision of legal services to organizations composed primarily of individuals who are themselves eligible to receive MLSC-funded legal assistance. However, MLSC may not make grants for the provision of legal services to organizations that provide services such as housing, day care, health care, or employment assistance to the poor but that are not themselves composed of eligible individuals.

                                         J. Joseph Curran, Jr.
                                         Attorney General

                                         C. J. Messerschmidt
                                         Assistant Attorney General

1
Of course, we should not be understood as suggesting that an organization plainly formed for the purpose of circumventing that prohibition may properly be represented with MLSC funds. By the same token, an MLSC grantee may not, in the course of representing an organization, violate any other restriction on the use of MLSC funds.

2
The federal regulation as it existed in 1982 did not include the express requirement that an organization seeking legal assistance provide information regarding its own ability to afford private counsel. See 48 Fed. Reg. 54,203 (1983) (amending 45 C.F.R. §1611.5(c) to add information requirement).