The opinion of the court was delivered by: PARKER
BARRINGTON D. PARKER, District Judge:
In this proceeding, 14 national support centers which receive funding under contracts with the Legal Services Corporation ("LSC" or "Corporation") seek to enjoin the LSC from enforcing Instruction 83-9 which restricts the use of funds appropriated by Congress for fiscal year ("FY") 1984. The Instruction, issued on December 1, 1983, was to become effective January 1, 1984. The effect of the Instruction is to require the national support centers to allocate no more than 10 percent of fiscal year 1984 LSC funds for direct representation in court (as sole counsel, co-counsel, amicus counsel, and of counsel), and before administrative and legislative bodies, including the presentation of written or oral testimony before such groups. The Instruction also provides that no 1984 LSC funds should be utilized for branch offices of national support centers.
The implementation of the Instruction was delayed when Judge Gesell of this Court entered a temporary restraining order on December 28, 1983. This Court continued the Order with the consent of the parties, pending a final ruling on plaintiffs' motion for a preliminary injunction.
After consideration of the legal memoranda and oral argument of counsel for the parties, various declarations, affidavits, depositions, and the entire record,
the Court finds that the plaintiffs have satisfied the requirements for the requested relief, and concludes that a preliminary injunction should issue. The reasons for that determination are set out in this Memorandum Opinion.
1. The Legal Services Corporation Act of 1974 ("LSCA" or "Act"), 42 U.S.C. 2996 et seq., created the Legal Services Corporation "for the purpose of providing financial support for legal assistance in noncriminal proceedings or matters to persons financially unable to afford legal assistance." 42 U.S.C. 2996b(a). The Corporation is a private nonprofit corporation.
2. Plaintiffs, the national support centers,
receive funding under contracts with the Corporation pursuant to the Act. The centers are independent private nonprofit corporations located throughout the United States. All the plaintiffs had annual contracts with the Corporation during 1983 which expired on December 31, 1983. Most of the plaintiffs are exclusively or predominantly funded by the LSC, and have received funds for as few as two years and as many as 17 years. The terms and conditions of plaintiffs' 1984 contracts with the Corporation are the subject of this litigation.
3. The defendants are the Legal Services Corporation and Donald Bogard, president of its board of directors. The Corporation is governed by an 11-member directorate appointed by the President of the United States with the advice and consent of the Senate. At present, a full board of directors has not been confirmed by the Senate.
4. One of the primary functions and activities of the Legal Services Corporation is to make grants and enter into contracts in order to maintain the independent entities that provide legal services to the indigent. The majority of the rules and regulations issued by the Corporation govern the terms and conditions of these grants and contracts. 45 C.F.R. Parts 1604, 1605, 1607 through 1613, 1615 through 1617, 1619 through 1621, and 1624.
5. Since the inception of the Legal Services program, the Federal government has recognized the need for two distinct but complementary components in the legal services delivery system. First, local legal services programs operate neighborhood offices and employ the front-line legal services lawyers who provide legal advice and representation to indigent clients on a day-to-day basis. Second, national support centers (and more recently state support centers) have developed specialized expertise in particular areas of the law affecting the poor (e.g., senior citizens' problems, housing, welfare, and consumer rights).
6. Recently, the defendants have aptly described the principal purposes of the national support centers as follows:
(1) To support legal services program staff and clients through individual service work, library and resource material, training, communications, the development of manuals and material, technical assistance and development of strategies for use by local program staff; (2) to undertake litigation, including serving as counsel for eligible clients and as co-counsel with local program staff; (3) to undertake legislative and administrative representation on behalf of eligible clients, including legislative representation before Congress; and (4) to coordinate and establish networks with local program staff, other support projects, other advocates and advocate organizations representing the poor.
48 Fed.Reg. 54305 (Dec. 1, 1983).
7. On December 1, 1983, the Corporation promulgated an Instruction in the Federal Register, to be effective January 1, 1984. The Instruction, No. 83-9, was published without notice and comment, and provides in part that:
2. No more than ten (10) percent of Fiscal Year 1984 LSC funds shall be allocated for networking, direct representation (i.e., sole counsel, co-counsel, amicus counsel, and of counsel in judicial, administrative, and legislative forums) and written or oral legislative or administrative testimony.
3. No Fiscal Year 1984 LSC funds shall be utilized for national support Center branch offices.
48 Fed.Reg. 54305 (Dec. 1, 1983).
9. Faced with the question of how to proceed in light of the Green Amendment, the Corporation in 1975 commissioned a study of the support centers which was chaired by Alexander Polikoff, a Chicago attorney. The study emphasized the importance of providing for direct client representation at the national support center level. Letter from Alexander Polikoff to President of the Legal Services Corporation (dated Feb. 16, 1976), attached as Exhibit C to plaintiffs' Post-Argument Memorandum (filed Jan. 21, 1984). As a result of the study, the Board adopted a resolution providing for funding of the centers which limited their activities to direct representation, among other functions. That resolution was published for comment, 41 Fed. Reg. 10271 (March 10, 1976), pursuant to 42 U.S.C. § 2996g(e), later finalized, 41 Fed.Reg. 17977 (April 29, 1976), and incorporated in the contracts of the centers.
10. In 1975, the Congress again debated the role of the national support centers and considered a bill, H.R. 10799, 94th Cong., 1st Sess., to repeal the Green Amendment. See H.R.Rep. No. 310, 95th Cong., 1st Sess. (1977) at 5 U.S.Code Cong. & Admin.News 1977, 4503. Congress ultimately repealed the Green Amendment restriction that required the Corporation to carry out certain support activities directly. Pub.L. 95-222, 91 Stat. 1619 (1977).
11. In December 1977, a study entitled "Survey of Legal Services Resource Needs: Final Report" was prepared by the Bureau of Social Science Research for the Corporation. Plaintiffs' Exhibit H-5, Document 4-41.
The objective of the study was to determine the resource needs of legal services attorneys in substantive law areas. The study found that 28 percent of the 741 attorneys who responded to the survey needed assistance from outside co-counsel, that 13 percent were unable to obtain such assistance, and the majority of those who were able to obtain assistance found it from other LSC programs. Id. at 47, Figure III-C. The study concluded that the resource needs of most legal services attorneys were being met, in large part through the efforts of the national support centers. Id. at 82.
12. In 1978, LSC published a study entitled "Support: Policies and Options for 1979 and Beyond." The study declined to set blanket priorities among the functions served by the national support centers, recognizing that needs and priorities will differ from center to center. Plaintiffs' Exhibit H-2, Document 4-7 at 16. Nevertheless, it expressly provided that special emphasis be given to "national policy support and representation," centers should have some kind of Washington presence." Id. at 21-22. The conclusions of the 1978 study were reiterated in the 1979 and 1981 evaluations of the centers undertaken by the Corporation (Rosenthal, "Overview Report on National Support Center Evaluations" (November 1979), Plaintiffs' Exhibit H-7 at 3, 18-19; Hartley Dec. at 10), and in a background paper prepared by the LSC. "A Background Paper on National Support Centers," Plaintiffs' Exhibit H-2, Document 4-8 at 12-13. Both evaluations praised the centers' direct representation activities and the work of their Washington offices, and encouraged them to expand these efforts.
13. One month later, after extensive discussion at a Board meeting, the LSC Board of Directors ordered the staff to conduct a study of the activities of the national support centers. See Transcript of December 17, 1983, Board Meeting at 82-98, 122-46, 183 (filed January 17, 1984). That study was directed to the precise issues addressed in Instruction 83-9. See Attachment to January 6, 1983 letter from Donald P. Bogard to Henry Freedman, paras. 2, 9, 10, 12, attached as Appendix B to Plaintiffs' Memorandum in Support of Application for Temporary Restraining Order and Preliminary Injunction (filed Dec. 27, 1983). The study was in draft form at the time the Instruction was issued, and the Board has neither approved nor disapproved its findings. Hartley Dep. at 158-59.
14. On December 21, 1982, Congress attached an amendment in the nature of an "affirmative rider" to a FY 1983 Legal Services Corporation funding measure. The rider directed the Corporation to maintain FY 1983 funding of its current grantees and contractors at the level at which they were funded in 1982 "until action is taken by directors of the Corporation who have been confirmed in accordance with Section 1004(a)" of the LSC Act. H.J.Res. 631, Pub. L. 97-377. Essentially identical language has since been incorporated into two subsequent continuing resolutions, Pub.L. 98-107 and Pub.L. 98-151. Most recently, this affirmative rider was re-enacted for a fourth time as part of the FY 1984 Appropriations Act for the Departments of Commerce, Justice, State, the Judiciary, and related agencies, Pub.L. 98-166, 97 Stat. 1071 (1983), which governs the 1984 funds to be provided to the plaintiffs by the defendants.
15. The above materials were reviewed by the LSC staff before and during the development of the Instruction. This process was supervised by Gregg Hartley, when he assumed his position with OFS in March of 1983. He was assisted by Gene Potack, who began working with the Corporation in ...