Chester Darling Sues SJC About IOLTA

By Atty. Michael Williams
February 2002

Atty. Chester Darling sued the Supreme Judicial Court last month for appropriating over $10,000,000 each year of money which belongs to lawyers’ clients.

The suit was entered in the United States District Court in Boston by Darling’s non-profit law firm, Citizens for the Preservation of Constitutional Rights.

The money in question is taken through a program called IOLTA (Interest on Lawyers Trust Accounts). Under the court’s IOLTA rule, all lawyers practicing in the Commonwealth are required to deposit certain monies held in trust for their clients into pooled accounts.

The interest income generated by these accounts is the private property of the clients, the U.S. Supreme Court decided in 1998. Despite the Supreme Court’s admonition, the SJC takes this money for its own use.

IOLTA has been described by many as a welfare program for lawyers.

This money is represented as being used to provide legal services to the poor. In reality, the groups of attorneys who receive it often use the money to sue the very clients from whom the money was taken. Individuals are forced to fund litigation against themselves.

Some of the largest unwilling “donors” to IOLTA are small property owners. Most small property owners find themselves regularly utilizing attorneys’ services. This means they have a disproportionately high amount of money placed into IOLTA accounts. The interest income generated is taken from them and given to groups like Greater Boston Legal Services, who turn around and use the funds to fund lawsuits against those same small property owners.

Some IOLTA fund recipients use the money for lobbying activities on Beacon Hill. They often lobby for legislation that is against the interests of the people who unknowingly pay the lobbyists’ bills.

SJC Asked to End IOLTA

On September 12, 2001, Darling wrote to the Justices of the Supreme Judicial Court and to the members of the Massachusetts IOLTA Committee reminding them of the U.S. Supreme Court’s ruling that the interest generated by the client funds held in IOLTA accounts is the property of the clients and not of the Committee or the SJC.

He asked the Court to end this unconstitutional policy. The Court has refused to modify its rules to conform to the U.S. Supreme Court’s Phillips decision.

(Copies of these letters are available on CPCR’s web page: www.julyfourth.net, click on “Cases & Legal Briefs,” then “Property Rights.)

Law Firms Warned

In November, CPCR warned Massachusetts law firms of the potential liability they face for their participation in IOLTA. This letter pointed out that attorneys for the IOLTA program have argued that if client funds are improperly being placed in IOLTA accounts, it’s the clients’ lawyers who should be held responsible, not the SJC’s IOLTA Committee.

(A copy of this letter is also available on CPCR’s web page.)

Three Constitutional Violations

CPCR filed its Complaint in federal court on behalf of itself, the Small Property Owners Association, and individual citizens of the Commonwealth who seek to end the violation of the federal and state constitutions by the Justices of the Supreme Judicial Court and its IOLTA Committee.

IOLTA violates three separate constitutional provisions. The First and Fifth Amendment to the Constitution of the United States (as applied to the

states through the Fourteenth Amendment) and Article 10 of the Massachusetts Constitution. The Fifth Amendment to the U.S. Constitution and Article 10 of the Massachusetts Constitution both forbid the “taking” of private property by government without the payment of just compensation.

The First Amendment to the Constitution of the United States not only forbids government suppression of speech, it also prevents the government from forcing individuals to express a view or finance the expression of a view that they do not support. A government official cannot order you to place a sign on your front lawn calling for his or her reelection.

Similarly, they cannot order you to provide money so that someone else can buy signs expressing a view you do not wish to support.

Much of the money taken through IOLTA goes to support politically motivated litigation and to lobbying on Beacon Hill.

Examples of IOLTA Funded Activities

Examples of the groups that receive funding through IOLTA grants are the Massachusetts Law Reform Institute, Greater Boston Legal Services, Gay and Lesbian Advocates and Defenders, Western Massachusetts Legal Services and Merrimack Valley Legal Services.

In 1990, the Massachusetts Law Reform Institute filed a brief with the Supreme Judicial Court advocating a tax increase. In 1992, it advocated against the repeal of Massachusetts’ estate tax. It has lobbied against a bill that sought to limit the availability of AFDC benefits to teenagers with excessive absences from school.

In 1989, it and Greater Boston Legal Services brought a case seeking to continue government benefits to illegal aliens. It has lobbied against various welfare reform initiatives. After welfare reforms were enacted, it sent a letter to other non-profit organizations urging them not to participate in workfare.

Recently Gay and Lesbian Advocates and Defenders lobbied the Massachusetts Attorney General’s Office to not certify a ballot initiative.

Currently, it is suing the Commonwealth in an effort to have same sex marriages recognized.

Western Massachusetts Legal Services brought an action seeking welfare benefits for a man who won $75,000 in the lottery, then lost the money on a drug and gambling binge. It published a brochure that advised welfare recipients who inherit or win large amounts of money on how to remain on public assistance. The brochure advised: “Since in most cases you want to resume your [welfare] eligibility as soon as possible, you will want to spend the money as quickly as possible. You can buy a special gift [or] take a vacation.”

Merrimack Valley Legal Services lobbied against a bill that would have removed drug addicts and mental patients from housing for the elderly.

Michael Williams is a Staff Attorney for Citizens for the Preservation of Constitutional Rights, Inc., a Boston based non-profit law firm. Information about CPCR and its other cases can be found at www.JulyFourth.net.