[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Rules and Regulations]
[Pages 19418-19420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10033]
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LEGAL SERVICES CORPORATION
45 CFR Part 1636
Client Identity and Statement of Facts
AGENCY: Legal Services Corporation.
ACTION: Final rule.
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SUMMARY: This final rule implements a restriction contained in the
Legal Services Corporation's (``LSC'' or ``Corporation'') FY 1996
appropriations act that is currently incorporated by reference in the
Corporation's FY 1997 appropriations act. The rule requires LSC
recipients to identify by name each plaintiff they represent in any
litigation. In the case of pre-litigation negotiation, the regulation
requires recipients to notify potential defendants of the names of
plaintiffs represented by the recipient. The rule also requires that a
plaintiff sign a written statement of facts on which the plaintiff's
complaint is based before the recipient engages in litigation or before
it undertakes pre-litigation negotiations on the plaintiff's behalf.
DATES: Effective May 21, 1997.
FOR FURTHER INFORMATION CONTACT: Victor M. Fortuno, General Counsel,
(202) 336-8910.
SUPPLEMENTARY INFORMATION: On May 19, 1996, the Operations and
Regulations Committee (``Committee'') of the LSC Board of Directors
(``Board'') requested the LSC staff to prepare an interim rule to
implement Sec. 504(a)(8), a restriction in the Corporation's FY 1996
appropriations act which requires LSC recipients to identify the
plaintiffs they represent and have the plaintiffs sign written
statements of the facts underlying their claims. The Committee held
hearings on staff proposals on July 8 and 19, 1996. An interim rule was
adopted by the Board on July 20 and was published in the Federal
Register on August 29, 1996 (61 FR 45740), to be effective immediately.
The Corporation received 9 timely comments on the interim rule. The
Committee held public hearings to discuss the written comments and to
hear oral comments on December 13, 1996, and January 5, 1997, and made
revisions to the interim rule. The Board adopted the Committee's
recommended version as a final rule on January 6, 1997.
[[Page 19419]]
The Corporation's FY 1997 appropriations act became effective on
October 1, 1996, see Pub. L. 104-208, 110 Stat. 3009. It incorporated
by reference the Sec. 504 condition on LSC grants included in the FY
1996 appropriations act implemented by this rule. Accordingly, the
preamble and text of this rule continue to refer to the applicable
section number of the FY 1996 appropriations act.
Generally, this rule implements Sec. 504(a)(8) of the Corporation's
FY 1996 appropriations act, which requires recipients to identify the
plaintiffs they represent when filing a complaint or initiating or
participating in litigation or prior to engaging in any pre-litigation
settlement negotiations with a prospective defendant, unless a court
issues an order based on a finding that disclosure would cause serious
harm to the plaintiff. In addition, the rule requires that, prior to
entering into any pre-litigation settlement negotiations with a
prospective defendant or prior to filing the complaint in court, each
recipient obtain from the client being represented a signed statement
of the facts supporting the complaint. The purpose of the rule is to
ensure that an LSC-funded program represents eligible clients who have
colorable claims when instituting litigation against or negotiating
with a defendant.
A section-by-section discussion of this interim rule is provided
below.
Section 1636.1 Purpose
The purpose of the rule is to ensure that during pre-litigation
settlement negotiations with a prospective defendant and when filing a
complaint in a court of law or otherwise participating in litigation
against a defendant, LSC recipients identify their clients to the
adverse party. The rule also seeks to ensure that recipients undertake
such activities based on facts which support the complaint. This final
rule revises the interim rule by adding language that clarifies that
the purpose of this rule is to ensure disclosure of the plaintiff's
identity to the defendant rather than to the public at large. Thus,
filings in bankruptcy would not fall under this rule, because they do
not implicate any defendant.
Section 1636.2 Requirements
This section sets forth the requirement that recipients identity
plaintiffs they represent in all court complaints filed and prior to
engaging in any pre-litigation settlement negotiations. The disclosure
of a client's identity is not required when a court of competent
jurisdiction has entered an order protecting the client from such
disclosure to prevent probable, serious harm the client.
Public comments pointed out types of cases and certain situations
they believed would not fall within the exception for probable serious
harm but where the identities of plaintiffs should not be disclosed to
the public in a complaint because they are protected by State law or
court rules, or public disclosure would cause great embarrassment and
humiliation. Comments pointed out, for example, that State law usually
protects the identities of juveniles or persons who are mentally
incompetent in such cases as guardianships, paternity actions, and
juvenile court actions initiated for the protection of the child. Other
comments stated that, in certain types of cases, the identity of the
plaintiff is generally already known to the defendant, such as divorces
and domestic violence cases, or where both parties have agreed to keep
the plaintiff's identity confidential.
In response to these comments, the Board agreed to add language to
allow a recipient the alternative of providing notice directly to the
defendant against whom the complaint is filed where public disclosure
would be contrary to law or court rules or practices. This revision is
consistent with the purpose of the underlying statutory requirement,
which pertains only to complaints or negotiation efforts against a
defendant or prospective defendant.
One comment stated that the interim rule seemed to apply to
situations where the recipient program is co-counseling with another
attorney and, thus, the recipient would need to identify each plaintiff
represented by all plaintiffs' attorneys to the defendants. The comment
suggested language clarifying this point. The Board revised the rule to
clarify that recipients need only identify clients they represent.
One comment pointed out that it is unclear that procedures exist in
most jurisdictions for making a motion to the court to protect the
identity of a client prior to filing a complaint. Thus, for a client
who is in pre-litigation settlement negotiations, it is unclear how a
recipient would obtain a court order to protect the identity of a
client. The comment suggested that it would require the filing of a
separate action to obtain the protective order and requiring extra
litigation simply to obtain a protective order goes against judicial
efficiency.
No revisions were made to the rule in response to this comment.
Section 504(a)(8) applies the exception for probable serious harm to
pre-litigation negotiations as well as to complaints filed in court.
Therefore, the Corporation determined it has no discretion to make
exceptions for pre-litigation negotiations, either to promote judicial
economy or in recognition that procedures for such actions may not
exist.
This section also requires that prior to the recipient's entering
into any pre-litigation settlement negotiations or prior to filing the
complaint in court, each recipient obtain from the client being
represented a signed statement of the facts supporting the complaint.
The requirement does not apply to defendants represented by a recipient
for counterclaims filed against a plaintiff. Nor does it apply to a
recipient's delivery of advice and brief services or to attempts to
resolve matters for a client through negotiations in which there is no
contemplation of litigation.
The statement of facts is to be written in English and in the
client's language if the client does not understand English. If the
client's language is only an oral and not a written language, such as
the Navajo language, the statement in English should be certified to
have been translated orally to the client prior to the client's
signing.
In a few emergency situations, it may be necessary for the
recipient to negotiate with a prospective defendant or to file an
action before the plaintiff's statement of facts can be prepared or
signed. A recipient may proceed without a signed statement in such
emergencies, if delay in proceeding is reasonably likely to cause harm
to a significant interest of the client. Emergency situations might
include threats to take the client's child out of State, to assault the
client, or to evict the client without following the required legal
procedures. Where a recipient proceeds on an emergency basis, a
statement must be prepared and signed as soon as practicable.
Section 1636.3 Access to Written Statements
This section implements the statutory provision granting a right of
access to the statements of facts for certain specified governmental
officials and their agents but not for adverse parties and others.
Comments stated that the access provisions should be strengthened to
limit any potential for abuse by parties not specifically granted
access by this rule. The first comment suggested adding language
stating that the access provision should not be deemed a waiver of any
privilege. The second proposed that language be added referencing the
rules protecting client confidentiality generally and those
[[Page 19420]]
governing the attorney-client privilege specifically.
In response, the Board revised Sec. 1636.3(b) to limit access for
persons and parties who are not specifically provided access under
paragraph (a) of this section. The interim rule provided some
protection for the statements under the discovery rule. As applied to
those not identified in paragraph (a), the final rule has added the
protection of other ``applicable law,'' which would include rules
protecting client confidentiality generally and those governing the
attorney-client privilege specifically. This language is consistent
with the access requirements of paragraph (a) but also conforms to the
requirement of Sec. 1006(b)(3) in the LSC Act that the Corporation
ensure that recipient activities be carried out in a manner consistent
with professional responsibilities.
This section does not create any new right of access to information
for parties to a lawsuit or for others, and the Corporation anticipates
that, in most cases, courts will determine that statements are not
discoverable by an adverse party in litigation. Recipients should draft
the statements of facts, however, mindful of their local law regarding
confidentiality.
A copy of each statement drafted according to this section should
be maintained separate from the client's case file.
Section 1636.4 Applicability
This section specifies that the requirements of this part apply not
only to cases handled by recipient staff but also to cases for which
private attorneys are compensated by the recipient. Attorneys who are
handling cases pro bono, however, are not subject to the requirements
of this rule, because pro bono attorneys are uncompensated. It is the
Corporation's judgment that the requirements of this part, especially
the requirement for the plaintiff's statement of facts, would be a
substantial impediment to the recruitment of pro bono lawyers. In
addition, the fact that pro bono lawyers are volunteering their time
serves as an additional impediment to their bringing frivolous law
suits.
A judicare program commented that the distinction between PAI
attorneys who accept a reduced fee and those who provide free
representation is an artificial distinction considering that the
reduced fees are insignificant amounts and do not constitute any real
incentive for private attorneys to handle PAI cases. According to the
program, the reduced fees should not be considered compensation
significant enough to provide an exception for judicare attorneys. The
Board disagreed that reduced fees to judicare attorneys are too
insignificant to be considered compensation and included no exception
for judicare programs.
Section 1636.5 Recipient Policies, Procedures and Recordkeeping
This section requires recipients to establish policies and
procedures to ensure compliance with this part and to maintain records
sufficient to document compliance with this part.
List of Subjects in 45 CFR Part 1636
Client identity, Grant programs, Legal services.
For reasons set forth in the preamble, 45 CFR part 1636 is revised
as follows:
PART 1636--CLIENT IDENTIFY AND STATEMENT OF FACTS
Sec.
1636.1 Purpose.
1636.2 Requirements.
1636.3 Access to written statements.
1636.4 Applicability.
1636.5 Recipient policies, procedures and recordkeeping.
Authority: Pub. L. 104-208, 110 Stat. 3009; Pub. L. 104-134, 110
Stat. 1321.
Sec. 1636.1 Purpose.
The purpose of this rule is to ensure that, when an LSC recipient
files a complaint in a court of law or otherwise initiates or
participates in litigation against a defendant or engages in pre-
complaint settlement negotiations, the recipient identifies the
plaintiff it represents to the defendant and ensures that the plaintiff
has a colorable claim.
Sec. 1636.2 Requirements.
(a) When a recipient files a complaint in a court of law or
otherwise initiates or participates in litigation against a defendant,
or before a recipient engages in pre-complaint settlement negotiations
with a prospective defendant on behalf of a client who has authorized
it to file suit in the event that the settlement negotiations are
unsuccessful, it shall:
(1) Identify each plaintiff it represents by name in any complaint
it files, or in a separate notice provided to the defendant against
whom the complaint is filed where disclosure in the complaint would be
contrary to law or court rules or practice, and identify each plaintiff
it represents to prospective defendants in pre-litigation settlement
negotiations, unless a court of competent jurisdiction has entered an
order protecting the client from such disclosure based on a finding,
after notice and an opportunity for a hearing on the matter, of
probable, serious harm to the plaintiff if the disclosure is not
prevented; and
(2) Prepare a dated written statement signed by each plaintiff it
represents, enumerating the particular facts supporting the complaint,
insofar as they are known to the plaintiff when the statement is
signed.
(b) The statement of facts must be written in English and, if
necessary, in a language other than English that the plaintiff
understands.
(c) In the event of an emergency, where the recipient reasonably
believes that delay is likely to cause harm to a significant safety,
property or liberty interest of the client, the recipient may proceed
with the litigation or negotiation without a signed statement of facts,
provided that the statement is prepared and signed as soon as possible
thereafter.
Sec. 1636.3 Access to written statements.
(a) Written statements of facts prepared in accordance with this
part are to be kept on file by the recipient and made available to the
Corporation or to any Federal department or agency auditing or
monitoring the activities of the recipient or to any auditor or monitor
receiving Federal funds to audit or monitor on behalf of a Federal
department or agency or on behalf of the Corporation.
(b) This part does not give any person or party other than those
listed in paragraph (a) of this section any right of access to the
plaintiff's written statement of facts, either in the lawsuit or
through any other procedure. Access to the statement of facts by such
other persons or parties is governed by applicable law and the
discovery rules of the court in which the action is brought.
Sec. 1636.4 Applicability.
This part applies to cases for which private attorneys are
compensated by the recipient as well as to those cases initiated by the
recipient's staff.
Sec. 1636.5 Recipient policies, procedures and recordkeeping.
Each recipient shall adopt written policies and procedures to guide
its staff in complying with this part and shall maintain records
sufficient to document the recipient's compliance with this part.
Dated: April 14, 1997.
Victor M. Fortuno,
General Counsel.
[FR Doc. 97-10033 Filed 4-18-97; 8:45 am]
BILLING CODE 7050-01-P
