538
Opinion of the Court
are barred from bringing class-action suits unless express approval is obtained from LSC. § 2996e(d)(5).
The restrictions at issue were part of a compromise set of restrictions enacted in the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (1996 Act), § 504, 110 Stat. 1321-53, and continued in each subsequent annual appropriations Act. The relevant portion of § 504(a)(16) prohibits funding of any organization
"that initiates legal representation or participates in any other way, in litigation, lobbying, or rulemaking, involving an effort to reform a Federal or State welfare system, except that this paragraph shall not be construed to preclude a recipient from representing an individual eligible client who is seeking specific relief from a welfare agency if such relief does not involve an effort to amend or otherwise challenge existing law in effect on the date of the initiation of the representation."
The prohibitions apply to all of the activities of an LSC grantee, including those paid for by non-LSC funds. §§ 504(d)(1) and (2). We are concerned with the statutory provision which excludes LSC representation in cases which "involve an effort to amend or otherwise challenge existing law in effect on the date of the initiation of the representation."
In 1997, LSC adopted final regulations clarifying § 504(a)(16). 45 CFR pt. 1639 (1999). LSC interpreted the statutory provision to allow indigent clients to challenge welfare agency determinations of benefit ineligibility under interpretations of existing law. For example, an LSC grantee could represent a welfare claimant who argued that an agency made an erroneous factual determination or that an agency misread or misapplied a term contained in an existing welfare statute. According to LSC, a grantee in that position could argue as well that an agency policy violated existing law. § 1639.4. Under LSC's interpretation, however,
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