Brown v. Legal Foundation

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In Brown v. Legal Foundation, the U.S. Supreme Court affirmed that the Fifth Amendment applies to protect income against complete takings by government. 538 U.S. 216 (2003). The unanimous Court agreed that a "law that requires that the interest on [client] funds be transferred to a different owner for a legitimate public use, however, could be a per se taking requiring the payment of 'just compensation' to the client." Id. at 240.

At issue in Brown was the constitutionality of a Washington law requiring attorneys to deposit client trust funds in a common account for the benefit of a legal aid program if the individual interest amounts to less than individual administrative costs. The Court split 5-4 against compensating the client for the taken interest based on the likely excess of administrative costs over income, but all Justices agreed that seizure of this interest did constitute a taking for purposes of the Fifth Amendment.

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