On February 22, 2005, the U.S. District Court for the Eastern District of New York modified its preliminary injunction in Dobbins v. LSC. In December 2004, the court had issued a preliminary injunction barring the Legal Services Corporation (LSC) from applying the physical separation requirement contained in its program integrity regulation, 45 C.F.R. 1610.8, to three New York-based legal services programs - LSC-funded Legal Services for New York City, LSC-funded South Brooklyn Legal Services, and former LSC grantee Farmworker Legal Services of New York. The ruling allows the three programs to use their private, nonfederal funds to engage in a range of advocacy activities that Congress had restricted in 1996, so long as they do so through legally separate affiliate programs that comply with certain conditions. The court permitted the programs to share employees, equipment and back office space with their non-LSC affiliates, so long as the two programs adhere to strict timekeeping and accounting procedures, use extensive signage and disclaimers to avoid confusion, and maintain separate public areas. Defendants LSC and the United States have appealed this order, and the plaintiffs have cross-appealed. In January, the plaintiffs, who are represented by the Brennan Center for Justice and Kaye Scholer LLP, asked the court to amend its order in two respects: the order's treatment of cases containing both a restricted component and an unrestricted component, and the separate public areas requirement. In response, the court's most recent order clarifies that a case can be charged to either the LSC grantee or the affiliate if it initially has no restricted components. A case initially charged to the LSC grantee that turns out to have a restricted component can be transferred to the affiliate, but must be handled by a different lawyer. The court decided to leave to the Second Circuit the plaintiffs' claim that requiring two sets of waiting areas and conferences rooms imposes an "unnecessary and unjustifiable burden" on legal services programs. The court also stated that it will not issue a permanent order until the Second Circuit rules, but that the preliminary injunction remains in effect until then.

Velazquez v. Legal Services Corporation, No. 97-cv-182, Supplemental Memorandum and Order (E.D.N.Y. Feb. 22, 2005). See also Legal Services E-lert of Dec. 21 & 23, 2004.