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QUESTION PRESENTED

Whether the regulation of the Board of Directors of Puerto Rico Legal Services (“PRLS”) requiring that 60 percent of the members of the Board be appointed by the Colegio de Abogado de Puerto Rico (the Puerto Rico Bar Association, “CAAPR”) complies with the Legal Service Corporation’s (“LSC”) regulation addressing the composition of recipient governing bodies, 45 C.F.R. § 1607.3(b)(2).

BRIEF ANSWER

No, the PRLS Board appointments regulation does not comply with 45 C.F.R. § 1607.3.

LSC regulations at 45 C.F.R. § 1607.3 implement the governing body requirements of both the LSC Act and the McCollum Amendment. 42 U.S.C. § 2996f(c) and section 502 of LSC’s FY 1983 appropriation, Pub. L. 97-377, 96 Stat. 1874 (1982). Section 1607.3(b)(1) sets forth requirements regarding composition and appointment for attorney board members:

(b) At least sixty percent (60%) of a governing body shall be attorney members.

(1) A majority of the members of the governing body shall be attorney members appointed by the governing body(ies) of one or more State, county or municipal bar associations, the membership of which represents a majority of attorneys practicing law in the localities in which the recipient provides legal assistance.

(i) Appointments may be made either by the bar association which represents a majority of attorneys in the recipient’s service area or by bar associations which collectively represent a majority of the attorneys practicing law in the recipient’s service area.

Under Article V(2)(A) of the PRLS Board Regulations, 60 percent of the PRLS Board members (15 of 25 members, including the Board’s President) must be appointed by CAAPR.  Membership in CAAPR, once mandatory for members of the Puerto Rican bar, became voluntary in 2014 following a Puerto Rico Supreme Court decision.  Rivera Schatz v. ELA y C. Abo. PR II, 2014 TSPR (PRSC) 122 (P.R. Oct. 16, 2014). Membership in CAAPR has dwindled since that time to fewer than 15 percent of the practicing lawyers in Puerto Rico. As a result, CAAPR members no longer constitute “a majority of attorneys in the recipient’s service area.” Accordingly, Article V(2)(A) of the PRLS Board Regulations no longer complies with 45 C.F.R. § 1607.3(b)(1). PRLS must amend its Board Regulations to bring them into compliance with 45 C.F.R. Part 1607.

BACKGROUND[fn]Our understanding of the facts regarding the composition of the PRLS Board and CAAPR membership numbers are based on representations contained in a letter dated July 17, 2017, from PRLS Board member Luis Rivera. The representations in the letter are supported by attachments to the letter, including the Regulations of the PRLS Board of Directors, PRLS’s Articles of Incorporation, resolutions of PRLS’s Board of Directors, and minutes of meetings of the CAAPR Board. We have reviewed those attachments, but have not otherwise undertaken an independent investigation to verify the facts set forth in Mr. Rivera’ letter.[/fn]

A. The PRLS Board Regulations

PRLS’s Regulations of the Board of Directors state that:

The Board of Directors shall be made up of 25 members, distributed as follows:

A. The Illustrious Bar Association: Its President as a member ex officio, and fourteen (14) other members nominated by the president and confirmed by the Governing Board of the Bar Association.

Regulations of the Board of Directors, Art. V § 2 (emphasis in original).[fn]Translation provided by LSC Office of Program Performance.[/fn] These regulations were last amended in March 2005, and thus CAAPR remains the appointing body for attorney members of the PRLS Board.

B. CAAPR Membership

Until recently, membership in the CAAPR was mandatory for all attorneys licensed to practice law in Puerto Rico. In 2014, the Supreme Court of Puerto Rico held that the territory’s mandatory bar membership was unconstitutional. Rivera Schatz v. ELA y C. Abo. PR II, 2014 TSPR (PRSC) 122 (P.R. Oct. 16, 2014). Consequently, membership in the CAAPR is now voluntary, and CAAPR membership has fallen to fewer than 15 percent of the attorneys licensed to practice in Puerto Rico.

APPLICABLE LAW

A. Section 1007(c) of the LSC Act

LSC’s governing body requirements originate from the LSC Act and LSC’s annual appropriation statutes. In relevant part, section 1007(c) of the Act provides:

In making grants or entering into contracts for legal assistance, the Corporation shall insure that any recipient organized solely for the purpose of providing legal assistance to eligible clients is governed by a body at least 60 percent of which consists of attorneys who are members of the bar of a State in which the legal assistance is to be provided . . . and at least one-third of which consists of persons who are, when selected, eligible clients who may also be representatives of associations or organizations of eligible clients. Any such attorney, while serving on such board, shall not receive compensation from a recipient.

42 U.S.C. § 2996f(c) (emphasis added). Thus, under the LSC Act grantee governing bodies must be composed of a majority of attorneys (at least 60 percent) and a minority of eligible clients (at least 33 percent). Id.    

B. The McCollum Amendment

Section 502 of LSC’s FY 1983 appropriations act, commonly referred to as “the McCollum Amendment” after its sponsor Rep. William McCollum (R-FL), imposed additional governing body requirements on LSC grantees. Pub. L. 97-377, 96 Stat. 1874 (1982). Congress has included some version of the McCollum Amendment in all of LSC’s subsequent appropriations, including at section 502 of LSC’s 1996 appropriations act, which has been incorporated by reference every year thereafter. Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134, Title V, § 502(2)(B), 110 Stat. 1321 (April 26, 1996), incorporated by reference in subsequent appropriations, see, e.g., Commerce, Justice, Science, and Related Agencies Appropriations Act, 2012, Pub. L. No. 112-55, Div. B, Title IV, 125 Stat. 629 (2011). The McCollum Amendment, in its current form and relevant part, provides that:

None of the funds appropriated in this Act to the ���˶��� shall be used by the Corporation to make a grant, or enter into a contract, for the provision of legal assistance unless the Corporation ensures that the person or entity receiving funding to provide such legal assistance is— . . .

(2)  a qualified nonprofit organization, chartered under the laws of a State or the District of Columbia, that—

(A) furnishes legal assistance to eligible clients; and

(B) is governed by a board of directors or other governing body, the majority of which is comprised of attorneys who—

(i) are admitted to practice in a State or the District of Columbia; and

(ii) are appointed to terms of office on such board or body by the governing body of a State, county, or municipal bar association, the membership of which represents a majority of the attorneys practicing law in the locality in which the organization is to provide legal assistance;

Pub L. No. 104-134, § 502(2)(B), 110 Stat. 1321 (April 26, 1996) (emphasis added). Thus, by its plain language, the McCollum Amendment addresses both board composition and the manner of appointment for attorney board members. First, it requires a majority-attorney board (at least 51 percent). Id. Second, a qualified bar association must appoint the 51 percent attorney-majority. Id. at § 502(2)(B)(2)(ii).

C. LSC Governing Body Regulations

LSC regulations at 45 C.F.R. §1607.3 implement the governing body requirements of both the LSC Act and the McCollum Amendment:

(b) At least sixty percent (60%) of a governing body shall be attorney members.

(1) A majority of the members of the governing body shall be attorney members appointed by the governing body(ies) of one or more State, county or municipal bar associations, the membership of which represents a majority of attorneys practicing law in the localities in which the recipient provides legal assistance.

(i)  Appointments may be made either by the bar association which represents a majority of attorneys in the recipient's service area or by bar associations which collectively represent a majority of the attorneys practicing law in the recipient's service area.

45 C.F.R. § 1607.3(b). Thus, a grantee’s governing body must have at least 60 percent attorney membership, and 51 percent of the governing body must be attorneys appointed under McCollum Amendment requirements. Id. at § 1607.3(b).

ANALYSIS

LSC requires that “a majority of the members of a governing body” of a grantee are attorneys “appointed by the governing body(ies) of one or more State, county or municipal bar associations, the membership of which represents a majority of attorneys practicing law in the localities in which the recipient provides legal assistance.”  45 C.F.R. § 1607.3(b)(1). Section 1607.3(b)(1)(i) provides that each of those appointments can be made by either:

1. a single bar association whose membership represents “a majority of the attorneys practicing law in the recipient’s service area,” or
2. by multiple bar associations that “collectively represent a majority of the attorneys practicing law in the recipient’s service area.”

PRLS’s Regulations of the Board of Directors, Article V(2)(A), mandates that 60 percent of the members of PRLS’s Board (15 of 25 members) be “confirmed by the Governing Board of [CAAPR].”  Because membership in CAAPR has dwindled to less than 15 percent of the practicing lawyers in Puerto Rico, CAAPR members no longer constitute “a majority of attorneys in the recipient’s service area.”  Accordingly, Article V(2)(A) of the PRLS Board Regulations no longer complies with 45 C.F.R. §1607.3(b)(1).  PRLS must amend its Board Regulations to bring them into compliance with 45 C.F.R. Part 1607.

RONALD S. FLAGG
General Counsel and Vice President for Legal Affairs

KRISTIN L. MARTIN
Graduate Fellow