Overview of IOLTA Litigation
IOLTA, a method of raising money for charitable purposes, primarily the provision of civil legal services to indigent persons, flourished in jurisdictions across the United States without any significant opposition during the 1980s. That changed in the 1990s with a series of cases which challenged IOLTA on constitutional grounds. The most persistent claim, that IOLTA violated the Just Compensation Clause of the Fifth Amendment to the Constitution, resulting in two cases, one involving the Texas IOLTA program and the other Washington State program.
Both cases were eventually heard by the U.S. Supreme Court The Court issued decisions in 1998 (Phillips, et al. v. Washington Legal Foundation, et al., 524 U.S. 156, 118 SCt 1925) and 2003 (Brown v. Legal Foundation of Washington, 538 U.S. 216). In the Brown decision, the Court upheld the constitutionality of IOLTA under the Just Compensation Clause and brought an end to the decade-long 5th Amendment challenge to IOLTA. The ABA aided in the vigorous defense of IOLTA throughout the litigation, and filed seven amicus briefs on behalf of the IOLTA programs during the course of these two major cases.