
USCA1 Opinion

	




          June 3, 1993      UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                     ____________          No. 92-1775                         WASHINGTON LEGAL FOUNDATION, ET AL.,                               Plaintiffs, Appellants,                                          v.                        MASSACHUSETTS BAR FOUNDATION, ET AL.,                                Defendants, Appellees.                                     ____________                                     ERRATA SHEET               The opinion of this court issued on May 20, 1993, is amended          as follows:               Page 4, lines  5-6 from bottom:  Delete 1987 after 11th Cir.          and add (1987) at end of citation:  484 U.S. 917 (1987).            Page 5, line 13:  Abbreviate Indiana to Ind.                  line 18:  Change Assoc. to Ass'n                  footnote 1, line 2:  Abbreviate Arkansas to Ark.                              line 3:  Abbreviate Association to Ass'n                              line 5:  Delete 1984          Page 11, footnote 4, line 9:  change and add as follows:                    (1st Cir.), cert. denied, 494 U.S. 1082 (1990).                                _____ ______          Page 17, line 8:  Abbreviate Educational to Educ.                   line 9:  Abbreviate Foundation to Found.          Page 22, line 18:  Delete (1979)           Page 24, line 3:  Delete (1979)          Page 36, footnote  15, line  3:  add  after ...newspaper),  cert.                                                                      _____          denied, 113 S. Ct. 1067 (1993);          ______                    line 10: add after ...organizations), cert. denied, 493                                                          _____ ______          U.S. 1094 (1990);                    line 11:  add after ...NJPIRG), cert.  denied, 475 U.S.                                                    _____  ______          1082 (1986);                                        UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1775                         WASHINGTON LEGAL FOUNDATION, ET AL.,                               Plaintiffs, Appellants,                                          v.                        MASSACHUSETTS BAR FOUNDATION, ET AL.,                                 Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Joseph L. Tauro, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Bownes, Senior Circuit Judge,                                    ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________            Richard A. Samp,  with whom Daniel J.  Popeo, John C.  Scully, and            _______________             ________________  _______________        Francis C. Newton, Jr. were on brief, for appellants.        ______________________            Allan  van  Gestel,  with   whom  James  C.   Rehnquist,  John  C.            __________________                _____________________   ________        Kissinger,  Jr., and  Goodwin  Procter  &  Hoar  were  on  brief,  for        _______________       _________________________        Massachusetts  Bar Foundation,  William W. Porter,  Assistant Attorney                                        _________________        General,  and  Scott  Harshbarger,  Attorney  General,  on  brief  for                       __________________        Massachusetts IOLTA  Committee, Donald K.  Stern, S. Tara  Miller, and                                        ________________  _______________        Hale and Dorr on brief for  Boston Bar Foundation, Joseph L. Kociubes,        _____________                                      __________________        Stephanie A. Kelly,  Diane E.  Cooley, and  Bingham, Dana  & Gould  on        __________________   ________________       ______________________        brief for Massachusetts Legal Assistance Corporation, appellees.            William  W.   Porter,  Assistant  Attorney   General,  and   Scott            ____________________                                         _____        Harshbarger,  Attorney  General,  on  brief  for  The  Chair  of   the        ___________        Massachusetts Board of Bar Overseers, appellee.            William  W.  Porter,   Assistant  Attorney   General,  and   Scott            ___________________                                          _____        Harshbarger,  Attorney  General,  on brief  for  The  Justices of  the        ___________        Massachusetts Supreme Judicial Court, appellees.            Peter M.  Siegel, Randall  C. Berg,  Jr., and  Arthur J.  England,            ________________  ______________________       ___________________        Jr., and Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A. on        ___      __________________________________________________________        brief for  Alabama Law Foundation,  Inc., Alabama State  Bar, Arkansas        IOLTA  Foundation, State Bar  of Arizona, Arizona  Bar Foundation, The        State Bar of California,  The Legal Services Trust Fund  Commission of        the State Bar of California, Colorado Bar Association, Colorado Lawyer        Trust Account  Foundation, Connecticut Bar Foundation, Connecticut Bar        Association, Delaware Bar Foundation, Delaware State  Bar Association,        The Florida Bar,  The Florida Bar Foundation,  Georgia Bar Foundation,        State  Bar  of  Georgia,  Hawaii  Bar  Foundation,  Hawaii  State  Bar        Association,  Idaho Law  Foundation, Inc.,  Idaho State  Bar, Illinois        State  Bar Association, Lawyers Trust Fund of Illinois, The Iowa State        Bar Association, Kansas Bar Foundation, Kentucky IOLTA Fund, Louisiana        State  Bar   Association,  Maine  Bar  Foundation,   Maine  State  Bar        Association,  Maryland Legal Services  Corporation, Maryland State Bar        Association,  Inc.,   State  Bar  of  Michigan,   Michigan  State  Bar        Foundation, Inc.,  Minnesota Lawyer Trust Account  Board, The Missouri        Bar, Missouri Lawyer Trust Account Foundation, National Association of        IOLTA  Programs,  Inc.,  National  Legal Aid  &  Defender  Association        (NLADA),  Nevada Law  Foundation, New  Hampshire Bar  Association, New        Hampshire Bar Foundation, New Jersey State Bar Association, New Jersey        State  Bar Foundation, The  IOLTA Fund of  the Bar of  New Jersey, New        Mexico Bar Foundation,  New York  State Bar  Association, Interest  on        Lawyer  Account Fund  of the  State  of New  York, North  Carolina Bar        Association,  North Carolina State  Bar Plan for  Interest on Lawyers'        Trust  Accounts, State  Bar Association  of North  Dakota,  Ohio Legal        Services Program of the Ohio  Public Defender Commission, Oklahoma Bar        Foundation,   Inc.,   Oregon   Law  Foundation,   Oregon   State  Bar,        Pennsylvania   Bar   Association,    Lawyer   Trust   Account    Board        [Pennsylvania],  Philadelphia   Bar  Association,  Rhode   Island  Bar        Foundation, Seattle-King  County Bar Association,  South Carolina Bar,        The  South  Carolina  Bar  Foundation, South  Dakota  Bar  Foundation,        Tennessee Bar  Association,  Tennessee  Bar  Foundation,  Texas  Equal        Access to Justice Foundation, State Bar of Texas, Utah Bar Foundation,        Utah  State Bar, Vermont Bar  Association, Vermont Bar Foundation, The        Virginia Bar Association, Virginia Law Foundation, Virginia State Bar,        Washington State Bar Association, Legal Foundation of Washington, West        Virginia Bar Foundation, Inc., West Virginia State Bar, amici curiae.            J. Michael McWilliams, Dennis A. Kaufman,  and John H. Morrison on            _____________________  _________________       ________________        brief for The American Bar Association, amicus curiae.            Gerald B. Gallagher, on brief pro se, amicus curiae.            ___________________            Kathleen  McDonald  O'Malley, Chief  Counsel,  Patrick  A. Devine,            ____________________________                   __________________        Assistant  Attorney General,  Lee  Fisher, Attorney  General of  Ohio,                                      ___________        Winston  Bryant, Attorney  General  of  Arkansas, Richard  Blumenthal,        _______________                                   ___________________        Attorney General  of Connecticut, Larry EchoHawk,  Attorney General of                                          ______________        Idaho,  Roland  W.  Burris  Attorney General  of  Illinois,  Bonnie J.                __________________                                   _________        Campbell,  Attorney General  of Iowa,  Michael E.  Carpenter, Attorney        ________                               _____________________        General of Maine, J. Joseph Curran, Jr., Attorney General of Maryland,                          _____________________        Hubert  H. Humphrey,  III,  Attorney General  of  Minnesota, Mario  J.        _________________________                                    _________        Palumbo,  Attorney  General of  West  Virginia,  Mike Moore,  Attorney        _______                                          __________        General  of Mississippi,  Frankie  Sue Del  Papa, Attorney  General of                                  ______________________        Nevada, Robert J. Del Tufo, Attorney General of New Jersey, Tom Udall,                __________________                                  _________        Attorney  General of New Mexico,  Nicholas J. Spaeth, Attorney General                                          __________________        of  North  Dakota,  Earnest  D.  Preate,   Jr.,  Attorney  General  of                            __________________________        Pennsylvania,  Dan  Morales, Attorney  General  of  Texas, Jeffrey  L.                       ____________                                ___________        Amestoy, Attorney General of  Vermont, Robert Abrams, Attorney General        _______                                _____________        of New York,  Charles W.  Burson, Attorney General  of Tennessee,  Ken                      __________________                                   ___        Eikenberry,  Attorney  General  of  Washington, and  Mary  Sue  Terry,        __________                                           ________________        Attorney  General  of  Virginia, on  brief  for  the  States of  Ohio,        Arkansas,  Connecticut,  Idaho,   Illinois,  Iowa,  Maine,   Maryland,        Minnesota,  Mississippi, Nevada,  New  Jersey, New  Mexico, New  York,        North Dakota,  Pennsylvania,  Tennessee, Texas,  Vermont,  Washington,        West Virginia, and Virginia, amici curiae.                                 ____________________                                     May 20, 1993                                 ____________________                      BOWNES, Senior Circuit Judge.  This appeal involves                      BOWNES, Senior Circuit Judge                              ____________________            a challenge  to the Massachusetts Interest  on Lawyers' Trust            Accounts ("IOLTA")  program.  The district  court granted the            defendants' motion to dismiss the plaintiffs' claims that the            IOLTA  program  violated  their  First  Amendment  rights  of            freedom  of speech and association, and  effected a taking of            their  property  in violation  of  the  Fifth and  Fourteenth            Amendments.  We affirm.                                          I.                                          I.                                      BACKGROUND                                      BACKGROUND                                      __________                      Traditionally,  in  Massachusetts   and  in   other            states, clients' funds which lawyers held for a short term or            in nominal  amounts were deposited into  non-interest bearing            pooled trust accounts.  See, e.g., In Re Mass. Bar Ass'n, 478                                    ___  ____  _____________________            N.E.2d  715, 716 (Mass. 1985);  In Re Minn.  State Bar Ass'n,                                            ____________________________            332  N.W.2d 151, 155-56 (Minn.  1982).  Banking  laws and the            ethical obligation  of lawyers to maintain  clients' funds so            that  they  were   immediately  available  for  reimbursement            prevented such  pooled trust accounts from accruing interest.            Cone v. State Bar of  Fla., 819 F.2d 1002, 1005 (11th  Cir.),            ____    __________________            cert. denied, 484 U.S. 917 (1987).  Interest earned by pooled            _____ ______            trust accounts remained  with the  banking institution  which            held  the funds. Id.  With  the advent of Negotiable Order of                             ___            Withdrawal  ("NOW")  accounts   authorized  by  the  Consumer            Checking Account  Equity Act,  interest  became available  on                                         -4-            checking accounts  for eligible depositors.   Id. at 1005-06.                                                          ___            Eligible  depositors include  individual owners  of deposited            funds and  certain charitable, non-profit  or public interest            entities including IOLTA programs.  See id.; In Re N.  H. Bar                                                ___ ___  ________________            Ass'n,  453 A.2d  1258, 1259  (N.H. 1982).   During  the late            _____            1970's and through the 1980's, Florida and many  other states            proposed  IOLTA  programs  and  courts  upheld  the  programs            finding  them  constitutionally  and ethically  permissible.1            As of  January, 1992, forty-nine  states and the  District of            Columbia  had authorized  IOLTA  programs.   ABA/BNA Lawyers'            Manual  on  Professional  Conduct  45:202  (1992).    Indiana            remains  the  only  state  which has  not  adopted  an  IOLTA            program.  Id.;  In Re Public Law No. 154-1990, 561 N.E.2d 791                      ___   _____________________________            (Ind.  1990);  In Re  Ind. State  Bar,  550 N.E.2d  311 (Ind.                           ______________________            1990).                      The  Massachusetts IOLTA program was established by            amendment to Canon 9, DR  9-102 of Rule 3:07 of the  Rules of            the Supreme Judicial Court,  effective September 1, 1985, the            "IOLTA  Rule."  Mass. Bar Ass'n, 478  N.E.2d at 720-21.  From                            _______________            1985  until 1990, the  IOLTA program operated  as a voluntary                                            ____________________            1   See, e.g., Cone,   819 F.2d 1002; In Re Interest on Trust                ___  ____  ____                   _______________________            Accounts, 402 So.2d 389 (Fla.  1981);  In Re Ark.  Bar Ass'n,            ________                               _____________________            738  S.W.2d 803 (Ark. 1987); Mass. Bar Ass'n, 478 N.E.2d 715;                                         _______________            Carroll v. State Bar  of California, 213 Cal. Rptr.  305 (4th            _______    ________________________            Dist.), cert. denied sub nom. Chapman v. State Bar of Calif.,                    _____ ______ ___ ____ _______    ___________________            474  U.S.  848  (1985);  In  Re  Interest  on Lawyers'  Trust                                     ____________________________________            Accounts, 672 P.2d 406 (Utah 1983); N. H. Bar Ass'n, 453 A.2d            ________                            _______________            1258; Minn. State Bar Ass'n, 332 N.W.2d 151.                     _____________________                                         -5-            system. Attorneys could elect to  participate by establishing            an interest-bearing IOLTA account and by complying with DR 9-            102(C)  requirements  which  included  choosing  a  recipient            charity from a group designated by the IOLTA Committee.                       In  1989, the Massachusetts  Supreme Judicial Court            ("SJC")  converted   the  voluntary  IOLTA  program   into  a            mandatory  program  by  amending the  IOLTA  Rule,  effective            January  1,  1990.    As  amended,  the   rule  required  all            Massachusetts  lawyers to deposit  client funds into interest            bearing accounts:  either  (1) a pooled IOLTA account  if, in            the  judgment of  the lawyer,  the  deposits were  nominal in            amount or to  be held for only a short period of time; or (2)            individual  accounts for  all other client  funds.   The Rule            required lawyers  or law  firms to  direct the  banks holding            their  IOLTA  accounts  to  disburse accrued  interest  to  a            charitable entity selected by the lawyer or firm from a group            designated  by  the  SJC.    The  designated  charities  were            Massachusetts   Legal   Assistance,  the   Massachusetts  Bar            Foundation, and the Boston Bar Foundation.                      The  SJC again  amended the  IOLTA Rule,  effective            January 1,  1993, to change  the process for  disbursement of            IOLTA funds.2   The IOLTA Rule  now vests responsibility  for                                            ____________________            2    The  Massachusetts Supreme  Judicial Court  amended Rule            3:07, DR 9-102(C) by Order 92-18,  effective January 1, 1993.            A copy  of DR 9-102 and the  amendment appear in the appendix            following this opinion.                                         -6-            disbursement  of  IOLTA  funds  in the  IOLTA  Committee  and            eliminates choice by lawyers of recipient eligible charities.            The IOLTA Committee must  disburse sixty-seven percent of all            IOLTA   funds  to  Massachusetts  Legal  Assistance  and  the            remaining   thirty-three   percent   to   "other   designated            charitable entities."                      The parties  have not briefed or  argued any issues            in  the context  of the  1993 amendment  to the  IOLTA Rule.3            Although the  amendment of the IOLTA Rule affects the process            of funds disbursement, the  changes are not material  to this            decision.   None  of the  parties  argued that  the  lawyers'            choice  of  recipient  charities,  as provided  by  the  1990            version  of the IOLTA Rule,  was significant.   The funds are            still  disbursed primarily to  Massachusetts Legal Assistance            with the remainder  to "other designated eligible  charities"            which  are still  the  Massachusetts Bar  Foundation and  the            Boston  Bar Foundation.   In addition,  the mission  of IOLTA            funds remains the same:   "The Massachusetts Legal Assistance            Corporation  may use  IOLTA  funds to  further its  corporate            purpose and  other designated  charitable entitles  [sic] may            use IOLTA  funds either for (1)  improving the administration            of justice or  (2) delivering civil  legal services to  those            who  cannot afford them."   Mass. Sup.  J. C. R.  3:07, DR 9-                                            ____________________            3    The Massachusetts  Attorney General's  Office sent  this            court  a copy of the amendment to DR 9-102(C) by letter dated            February 12, 1993.                                           -7-            102(C), as amended  by Order 92-18,  effective Jan. 1,  1993.                    __ _______  __            The  corporate purpose of  the Massachusetts Legal Assistance            Corporation is to                      provid[e]  financial  support  for  legal                      assistance    programs    that    provide                      representation  to   persons  financially                      unable  to  afford  such   assistance  in                      proceedings   or   matters   other   than                      criminal  proceedings or  matters, except                      those proceedings or matters in which the                      commonwealth   is  required   to  provide                      representation.            Mass. Gen. L. ch. 221A,   2 (West Supp. 1992).                        Unless   further   designation  is   necessary  for            clarity,   we   will  refer   to   the  currently   effective            Massachusetts Supreme Judicial Court  Rule 3:07, DR  9-102(C)            as "DR 9-102(C)" or the "IOLTA Rule."                 A.  The Plaintiffs' Claims                ______________________                      There  are five  plaintiffs  in this  action.   The            Washington Legal  Foundation ("WLF") is a  non-profit, public            interest law and policy  center operating in Washington, D.C.            Karen Parker is  a citizen of Massachusetts  who has employed            lawyers in connection with her real estate business and other            businesses, which  has resulted in her  money being deposited            in  IOLTA  accounts.    Stephanie  Davis  is   a  citizen  of            Massachusetts  who has  not  had her  money  placed in  IOLTA            accounts, but she  anticipates that, in  the future, she  may            need to hire an  attorney which would cause  her money to  be            deposited  in  an IOLTA  account.   William  R. Tuttle  is an                                         -8-            attorney  practicing in  Abington, Massachusetts,  without an            IOLTA  account.     Timothy  J.  Howes  is  an   attorney  in            Springfield,  Massachusetts,  where  he  maintains  an  IOLTA            account in the  Shawmut Bank.   Howes is suing  on behalf  of            himself  and  on  behalf  of  his  clients  whose  funds  are            deposited in his IOLTA account.                        The   defendants   are   the    Massachusetts   Bar            Foundation,  the  Boston  Bar  Foundation,  the Massachusetts            Legal Assistance  Corporation,  Katherine S.  McHugh (in  her            capacity as chair of the Massachusetts IOLTA Committee), Fran            F.  Burns (in  his  capacity as  chair of  the  Board of  Bar            Overseers), and the Justices of the Supreme Judicial Court of            Massachusetts.  The plaintiffs  allege, pursuant to 42 U.S.C.               1983, that they have  been deprived, under  color of state            law,  of  their  rights  secured  by  the  First,  Fifth  and            Fourteenth Amendments of the Constitution by operation of the            Massachusetts IOLTA program.  1.    Count  One:    First  and                                                _________________________            Fourteenth Amendments            _____________________                      WLF alleges that it sent a check to cover costs and            expenses  related to  this  legal action  to a  Massachusetts            attorney  (not a party to the action) who deposited the check            in his IOLTA  account as required by the IOLTA  Rule.  Parker            alleges  that she  has and  will continue  to use  lawyers in            connection  with her real estate business  and that her funds                                         -9-            deposited with lawyers  have and will  be deposited in  IOLTA            accounts.  WLF and Parker allege that:                        The collection of  and use of interest,                      under color of state law,  generated from                      the   IOLTA   trust  account   of  [their                      attorneys] for litigation, especially for                      litigation  that  involves  political  or                      ideological  causes, and  for legislative                      or  other  forms  of   lobbying,  deprive                      [them]  of  their  rights  to  freedom of                      speech and association guaranteed  by the                      First  and  Fourteenth Amendments  to the                      U.S. Constitution.                       Davis  alleges that  although she  has not  yet had            money deposited in an IOLTA, the IOLTA Rule creates "the risk            that  she  will be  forced  to  choose  between employing  an            attorney or  financially supporting organizations  with which            she disagrees."   Davis alleges her constitutional claims  in            substantially similar terms to  those quoted above.  Attorney            Howes alleges that he has had to deposit client funds  in his            IOLTA as required by the IOLTA Rule and that the Rule "forces            [him] to  choose  between not  practicing  law and  or  [sic]            practicing  law  and  associating  with  organizations  whose            actions  offend  his  political and  ideological  beliefs and            thereby depriving him of  his right to freedom of  speech and            association  as  guaranteed  by   the  First  and  Fourteenth            Amendments  to  the U.S.  Constitution."    Finally, Attorney            Tuttle alleges that the IOLTA Rule has forced him "to forego,            to  his  professional  and  financial  detriment,  depositing            certain  client funds  into non-interest bearing  accounts in                                         -10-            order to avoid  associating with organizations whose  actions            offend   his  political  and   ideological  beliefs"  thereby            depriving him of the same constitutional rights as alleged by            Attorney Howes.                        In  summary,  Count  I  alleges  violation  of  the            plaintiffs' rights of freedom of speech and association.                                         -11-                 2.  Count Two:  Fifth and Fourteenth Amendments                     ___________________________________________                      Plaintiffs WLF  and  Parker allege  that the  IOLTA            Rule constitutes an  illegal taking of the  beneficial use of            their  funds for  public  use without  just compensation  and            without  due process  of law  in violation  of the  Fifth and            Fourteenth Amendments to the  Constitution.4  Howes makes the            same  claim on  behalf  of his  clients  whose funds  he  has            deposited into his IOLTA account.   Neither Davis, Howes  (on            his own behalf) nor Tuttle make claims under Count II.                  3.  Relief Requested                     ________________                      The  plaintiffs ask for  declaratory and injunctive            relief  to dismantle  the  operation of  the mandatory  IOLTA            program.    Specifically,  the plaintiffs  request  that  the            court:  (1) require  the  defendants to  refund the  interest            which has been earned on their funds while in IOLTA accounts;            (2)  declare  the  IOLTA  Rule void  as  an  unconstitutional            violation  of the  plaintiffs'  First, Fifth  and  Fourteenth                                            ____________________            4    The plaintiffs have not  pursued their claims alleged in            Count III based  on the Fourteenth  Amendment that the  IOLTA            program  has   unconstitutionally  deprived  them   of  their            property  without  due  process  of  law.    The  plaintiffs'            statement   of   issues  on   appeal   is   limited  to   the            constitutional rights  of the plaintiffs under  the First and            Fifth Amendments.  Therefore,  we assume that the plaintiffs'            claims under the Fourteenth Amendment have been abandoned and            are waived.  United  States v. Zannino, 895  F.2d 1, 17  (1st                         ______________    _______            Cir.) cert. denied,  494 U.S.  1082 (1990).   Of course,  the                  _____ ______            Fourteenth Amendment  is properly  included in each  count as            the  basis   upon  which   the  First  and   Fifth  Amendment            prohibitions apply to the states.                                                        -12-            Amendment rights; (3) issue permanent injunctions prohibiting            the defendants  from requiring  attorneys to comply  with the            IOLTA  Rule and  from disciplining  attorneys for  failure to            comply with the IOLTA Rule; (4) issue a permanent  injunction            directing  the   SJC  to  require  attorneys   to  make  full            disclosure to their  clients of  uses of IOLTA  funds if  the            attorney  elects  to  participate  in IOLTA,  and  (5)  grant            reasonable attorneys  fees to  the plaintiffs pursuant  to 42            U.S.C.   1988.            B.  Dismissal of Claims                ___________________                      The  defendants  moved to  dismiss  the plaintiffs'            action on the grounds that their constitutional claims lacked            merit  and that some of the plaintiffs lacked standing.5  The            district court found that  there was no serious  dispute that            at least  two  of  the  plaintiffs,  Parker  and  Howes,  had            standing to bring their  constitutional claims.  The district            court  dismissed the  plaintiffs'  claims  holding "that  the            plaintiffs have no property interest  in the funds subject to                                            ____________________            5   On appeal, the  record includes only the defendants' bare            motion to dismiss which states the grounds as lack of subject            matter jurisdiction and  failure to state a  claim upon which            relief  may be granted.   The  district court  summarized the            defendants' grounds  for the motion to  dismiss: "In addition            to arguing that the plaintiffs' constitutional challenges are            without  merit, the  defendants contend  that  two plaintiffs            lack standing."  Washington Legal Found., 795 F. Supp. at 52,                             _______________________            n.3.  We assume, therefore, that the defendants' assertion of            lack  of  subject matter  jurisdiction  referred  to lack  of            standing.                                            -13-            the  SJC  Rule,"  and  that  the  SJC  Rule  did  not  compel            association  with speech and  "speech, in  the constitutional            sense,  is  not  a  factor   of  the  challenged  SJC  Rule."            Washington  Legal Found., 795 F.  Supp. 50, 53,  56 (D. Mass.            ________________________            1992).  The plaintiffs  appeal the district court's dismissal            of their claims.            C.  Standard of Review                __________________                      Our standard  of review of a  dismissal pursuant to            Fed. R. Civ.  P. 12(b)(6) is  well established.  We  begin by            accepting all  well-pleaded facts as  true, and  we draw  all            reasonable  inferences in favor of  the appellants.  Coyne v.                                                                 _____            City  of Somerville, 972  F.2d 440,  442-43 (1st  Cir. 1992).            ___________________            Because  a dismissal  terminates  an action  at the  earliest            stages of  litigation without  a developed factual  basis for            decision, we  must carefully  balance the rule  of simplified            civil  pleading against  our  need for  more than  conclusory            allegations.  Dewey v. University of New Hampshire, 694  F.2d                          _____    ___________________________            1,  3 (1st  Cir. 1982),  cert. denied,  461 U.S.  944 (1983).                                     _____ ______            Because only  well-pleaded facts are  taken as true,  we will            not  accept  a   complainant's  unsupported  conclusions   or            interpretations of law.  United States v. AVX Corp., 962 F.2d                                     _____________    _________            108,  115 (1st  Cir.  1992) ("a  reviewing  court is  obliged            neither    to    'credit   bald    assertions,   periphrastic            circumlocutions,  unsubstantiated  conclusions,  or  outright            vituperation,'... nor to honor  subjective characterizations,                                         -14-            optimistic   predictions,   or   problematic   suppositions."            (citations  omitted)).   We may  affirm the  district court's            order on any independently  sufficient grounds.  Willhauck v.                                                             _________            Halpin, 953 F.2d 689, 704 (1st Cir. 1991).              ______            D.  Standing                ________                      The issue of  standing has not  been raised by  the            parties  on appeal,  and therefore  we address  standing only            because  it  presents  a threshold  jurisdictional  question.            Bender v. Williamsport Area  School Dist., 475 U.S.  534, 541            ______    _______________________________            (1986)  ("every  federal   appellate  court  has   a  special            obligation   to  'satisfy   itself  not   only  of   its  own            jurisdiction,  but also that of  the lower courts  in a cause            under  review,'  even  though  the parties  are  prepared  to            concede it." (citations omitted));  Warth v. Seldin, 422 U.S.                                                _____    ______            490,  498 (1975)  ("[Standing] is  the threshold  question in            every  federal case, determining  the power  of the  court to            entertain  the  suit.").    Standing  requirements  are  most            strictly   enforced   in   cases   involving   constitutional            questions.  Bender, 475 U.S. at 541-42.                        ______                      The standing  doctrine is derived from  Article III            of the  Constitution which requires the existence  of a "case            or controversy"  before  a claim may be resolved  by judicial            process.  Allen v. Wright, 468 U.S. 737, 750 (1984).  To show                      _____    ______            a  case  or  controversy,  a plaintiff  must  first  "clearly                                         -15-            demonstrate that he has suffered an 'injury in fact[]'" which            means   "an  injury   to  himself   that  is   'distinct  and            palpable,'... as opposed to  merely '[a]bstract,' ... and the            alleged harm must be actual or imminent, not 'conjectural' or            hypothetical.'"   Whitmore  v.  Arkansas, 495  U.S. 149,  155                              ________      ________            (1990) (citations omitted).  Second, the claimant must allege            facts  which show "that the  injury 'fairly can  be traced to            the challenged action' and, third, 'is likely to be redressed            by  a favorable  decision.'"   Id. (quoting Simon  v. Eastern                                           ___          _____     _______            Kentucky  Welfare Rights  Organization, 426  U.S. 26,  38, 41            ______________________________________            (1976) and Valley Forge Christian College v. Americans United                       ______________________________    ________________            for Separation of Church  and State, Inc., 454 U.S.  464, 472            _________________________________________            (1982); see also Rumford Pharmacy v. City of East Providence,                    ___ ____ ________________    _______________________            970 F.2d  996, 1001 (1st Cir.  1992); AVX Corp., 962  F.2d at                                                  _________            113.   Our standing inquiry depends on whether the plaintiffs            have established the existence of a case or controversy as to            each  of their  claims, but  does not  involve the  merits of            particular claims.  Warth, 422 U.S. at 500.                                _____                      The district  court found  that at least  Howes and            Parker had standing to bring the constitutional challenges in            this  case.   Karen  Parker alleges  that  she has  and  will            continue to  employ lawyers  for transactions related  to her            business  and that she has and  will have her funds placed in            IOLTA accounts by the  lawyers she employs.  She  claims that            the  IOLTA  program  collects  and  uses  for  political  and                                         -16-            ideological causes interest generated  by her funds placed in            IOLTA  accounts, and  therefore  the operation  of the  IOLTA            program deprives her of freedom  of speech and association in            violation of the  First Amendment.   Parker also claims  that            the  IOLTA  program  constitutes  an illegal  taking  of  the            beneficial use  of her funds  deposited in IOLTA  accounts in            violation of the  Fifth Amendment.   She asks  this court  to            declare  the IOLTA  Rule unconstitutional  and to  enjoin the            operation  of the rule.  Based upon her allegations, which we            take  as  true for  this purpose,  she  has stated  an actual            injury  to herself which is  traceable to the  IOLTA rule and            which may  be remedied by  the relief sought.   We agree with            the district  court that Parker has standing  to maintain her            claims made in this action.                      Howes presents  a more complex  standing situation.            Howes  brings the First Amendment claim on his own behalf and            on  behalf of his clients, and the Fifth Amendment claim only            on behalf of  his clients.6  As to  the First Amendment claim                                            ____________________            6     Howes'  standing on  behalf  of third  parties  is more            difficult.  The general rule is that a plaintiff has standing            to  assert only his own  rights, not those  of third parties.            Playboy Enterprises, Inc. v.  Public Service Comm'n, 906 F.2d            _________________________     _____________________            25, 36-37 (1st Cir.),  cert. denied, sub nom. Rivera  Cruz v.                                   _____ ______  ___ ____ ____________            Playboy Enterprises, Inc., 498 U.S. 959 (1990).  An exception            _________________________            to  the  rule against  jus  tertii standing  exists  if other                                   ___  ______            considerations,  such  as  the representative's  relationship            with the third party  and the opportunity of the  third party            to assert its own rights, overcome  prudential concerns.  Id.                                                                      ___            at 37.   We do not  address the third  party standing  issue,            however, because it is unnecessary for our limited purpose of            determining jurisdiction.                                            -17-            on his own behalf,  Howes alleges that he has  been compelled            by the IOLTA  Rule to  participate in the  IOLTA program  and            thereby to  associate with IOLTA  funded organizations  which            offend  his political  and ideological  beliefs.   Howes also            alleges  that the operation of  the IOLTA Rule  forces him to            choose between  practicing law and  not practicing  law.   He            asks for  the  same  relief requested  by  Parker.    Without            addressing the merits of Howes' personal claims, we find that            he  has  alleged  an injury  which  may  be  remedied by  the            requested  relief  which  is  sufficient  to  establish   his            standing to maintain his First Amendment claim.                         Because  we   find  that   at  least  two   of  the            plaintiffs,  Parker,  a client,  and  Howes,  a lawyer,  have            standing  to maintain  each claim,  we need  not address  the            standing of all plaintiffs as to each claim.  Watt  v. Energy                                                          ____     ______            Action  Educ. Found., 454 U.S.  151, 160 (1981);   Buckley v.            ____________________                               _______            Valeo, 424 U.S. 1, 12 (1976) (finding appellants had standing            _____            because "at  least some of  the appellants have  a sufficient            'personal  stake' in  a determination  of  the constitutional            validity of each  of the challenged provisions to  present 'a            real and substantial controversy admitting of specific relief            through a  decree of  a conclusive character'"  (citation and            footnote  omitted)).    We  find, therefore,  that  based  on            Parker's and  Howes' standing,  we have jurisdiction  in this            case.                                         -18-                                         II.                                         II.                                       ANALYSIS                                       ANALYSIS                                       ________                      The  plaintiffs7  allege  that   the  Massachusetts            IOLTA  program  violates  their  First  Amendment  rights  by            collecting the interest generated by clients' funds which are            deposited  in IOLTA  accounts and  distributing the  money to            designated organizations.  The plaintiffs further allege that            the  recipient  organizations use  the  money for  litigation            involving political or ideological  causes and for  lobbying.            The IOLTA  program, the plaintiffs allege,  therefore compels            them to  support political  and ideological  causes depriving            them of freedom  of speech and  association.  The  plaintiffs            also  allege  that  the  IOLTA  program's   appropriation  of            interest from  lawyers' trust accounts  takes the  beneficial            use of  client funds  which  constitutes an  unconstitutional            taking in violation of  the Fifth and Fourteenth Amendments.8            A.  The Fifth Amendment Taking Claim                ________________________________                                            ____________________            7   As noted  above, all of the plaintiffs do not join in all            counts of the complaint.   In addition, we have  not resolved            the  standing   of  all  plaintiffs.  "Plaintiffs"   as  used            throughout  this   opinion  will  refer   to  the  particular            plaintiffs  making  the  claims  discussed  without resolving            standing.             8   We  address the plaintiffs' Fifth Amendment  claim first,            although  it  is  raised  in  Count  II  of  the  plaintiffs'            complaint,  in  order  to resolve  the  plaintiffs'  property            rights to funds deposited in IOLTA accounts before discussing            the First Amendment claim which also involves that issue.                                          -19-                      The Fifth Amendment provides that "private property            [shall   not]  be   taken  for   public  use,   without  just            compensation."   There is no  dispute that clients'  money or            property held by lawyers  belongs to the clients and  must be            returned to  the clients  at their request.   Mass. S.  J. C.            Rule 3:07, Cannon 9,  DR 9-102(B)(4); Mass. Gen. L.  Ann. ch.            221,    51  (1986).    Many  courts,  including  the  Supreme            Judicial Court  of Massachusetts,  have held that  clients do            not have  a constitutionally protected property  right to the            interest earned on  IOLTA accounts.9   Mass.  Bar Ass'n,  478                                                   ________________            N.E.2d at 718; see also Cone,  819 F.2d at 1007; Carroll, 213                           ___ ____ ____                     _______            Cal. Rptr. at 312; Minn. State Bar Ass'n, 332  N.W.2d at 158;                               _____________________            N. H. Bar Ass'n, 453  A.2d at 1260-61.  Perhaps  in response,            _______________            the plaintiffs have eschewed a  right to the interest itself,            and instead claim a  property right to the beneficial  use of            their deposited  funds, and  more specifically, the  right to            control and  to  exclude others  from the  beneficial use  of            those funds.                      To make a cognizable claim of a taking in violation            of the Fifth Amendment, the plaintiffs must first show that             they  possess a  recognized  property interest  which may  be            protected  by the Fifth Amendment.  Penn Cent. Transp. Co. v.                                                ______________________                                            ____________________            9     We  accept as  true,  as do  all  of  the parties,  the            assumption that  there are no feasible  accounting procedures            which  would allow  individual  client funds  deposited  into            pooled accounts to earn net interest.                                             -20-            New York City, 438  U.S. 104, 124-25 (1978).   The plaintiffs            _____________            must  point to  credible sources  for their  claimed property            interest:                         Property  interests,  of course,  are not                      created  by  the  Constitution.   Rather,                      they are created and their dimensions are                      defined    by     existing    rules    or                      understandings   that    stem   from   an                      independent   source    such   as   state                      law rules  or understandings  that secure                      certain benefits and that  support claims                      of entitlement to those benefits.            Board  of   Regents  v.  Roth,  408  U.S.  564,  577  (1972).            ___________________      ____            Intangible property rights, "'the group of rights inhering in            the citizen's relation to the physical thing, as the right to            possess, use and  dispose of it[,]'" which  are recognized by            state law  are protected by the Takings  Clause.  Ruckelshaus                                                              ___________            v. Monsanto  Co., 467 U.S.  986, 1003 (1984)  (quoting United               _____________                                       ______            States v. General Motors Corp., 323 U.S. 373, 377-78 (1945));            ______    ____________________            see  also  Bowen v.  Gilliard,  483 U.S.  587,  603-09 (1987)            ___  ____  _____     ________            (finding no unconstitutional taking  of child's right to have            support  payments  used  for  child's  best  interest  by  an            amendment to the  AFDC statute).   Not all asserted  property            interests are constitutionally protected, however, as "a mere            unilateral expectation or an abstract  need is not a property            interest   entitled  to   protection."      Webb's   Fabulous                                                        _________________            Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980).              ________________    ________                      1.  Beneficial Use of Deposited Funds                          _________________________________                                         -21-                      The plaintiffs rely on trust law to establish their            right  to  control the  beneficial use  of  their funds  as a            protected property interest.  IOLTA deposits do not require a            trust  agreement  and the  plaintiffs  have  not argued  that            formal  trust  agreements  exist.    Rather,  the  plaintiffs            contend that  because the  acronym "IOLTA" includes  the word            "trust," a  trust relationship is created  between lawyer and            client when  client funds are deposited  into IOLTA accounts.            The  relationship between lawyer  and client in Massachusetts            is  fiduciary as  a  matter of  law.   Markell  v.  Sidney B.                                                   _______      _________            Pfeifer  Found., Inc., 402  N.E.2d 76, 94  (Mass. App. 1980).            _____________________            The  lawyer-client  relationship  presumes  that  the  client            trusts the lawyer to  handle the client's funds appropriately            and the  lawyer assumes  the fiduciary obligation  subject to            the  regulation of the profession.  We are not convinced that            the deposit of clients'  funds into IOLTA accounts transforms            a  lawyer's fiduciary  obligation  to clients  into a  formal            trust  with the reserved right  by the client  to control the            beneficial use of the funds as claimed by the plaintiffs.                      The  plaintiffs   also  claim  that  they   have  a            protected  property   right  to   exclude  others   from  the            beneficial  use of  their funds while  they are  deposited in            IOLTA  accounts.   In support  of the  right to  exclude, the            plaintiffs rely on cases which have established that property            owners  have  a right  to  exclude  others  from  their  real                                         -22-            property.  See,  e.g.,   Kaiser Aetna v.  United States,  444                       ___   ____    ____________     _____________            U.S. 164, 176; Loretto  v. Teleprompter Manhattan CATV Corp.,                           _______     _________________________________            458  U.S. 419, 435-36 (1982).   The plaintiffs  have cited no            sources  which recognize a similar constitutionally protected            property right  to control or exclude  others from intangible            property and we have found none.10                                    2.  IOLTA Program Does Not Cause a Taking                          _____________________________________                      Assuming   arguendo   that  the   plaintiffs  could                                 ________            establish their claimed property interests in the  beneficial            use  of  their funds  subject to  the  IOLTA Rule,  the IOLTA            program does not cause an  illegal taking of those interests.            The analysis  of Fifth  Amendment takings claims  has evolved            through a  series of cases  in which Supreme  Court decisions            "engaging in  ... essentially  ad hoc, factual  inquiries ...            have   identified  several   factors  that   have  particular            significance."  Penn Central, 438 U.S. at 124.  The Court has                            ____________            repeatedly  used the  significant factors enunciated  in Penn                                                                     ____            Central to analyze takings claims:  "(1) 'the economic impact            _______            of  the regulation on the claimant'; (2) 'the extent to which                                            ____________________            10   The  plaintiff has  not  discussed, and  we do  not find            analogous,  intangible property rights which, by their nature            or by  agreement, require the exclusion of others to preserve            the property interest.  See, e.g., Monsanto, Co., 467 U.S. at                                    ___  ____  _____________            1002 ("Because of  the intangible nature  of a trade  secret,            the  extent of the property  right therein is  defined by the            extent to which the owner of the secret protects his interest            from disclosure to others.").                                         -23-            the regulation has interfered with distinct investment-backed            expectations'; and  (3)  'the character  of the  governmental            action.'"   Connolly v.  Pension Benefit Guaranty  Corp., 475                        ________     ______________________________            U.S. 211, 225  (1986) (citation omitted);  see also Hodel  v.                                                       ___ ____ _____            Irving, 481 U.S. 704, 714-15 (1987); Kaiser, 444 U.S. at 175.            ______                               ______            The government  may impose  regulations to adjust  rights and            economic interests among  people for the public good, as long            as the government does  not force "some people alone  to bear            public burdens  which, in all fairness and justice, should be            borne by the public as a whole."  Armstrong v. United States,                                              _________    _____________            364 U.S.  40, 49 (1960); see also  Andrus v. Allard, 444 U.S.                                     ___ ____  ______    ______            51, 65 (1979).                         a. Character of governmental action.                            _________________________________                      The   plaintiffs  claim   that  the   character  of            governmental action,  through the  IOLTA Rule, is  a physical            invasion of their beneficial interests in their funds held in            IOLTA accounts.  The physical invasion occurs, the plaintiffs            argue,  because the  IOLTA program  borrows the  principal to            generate income  by collecting  the interest earned  on IOLTA            accounts.  The  plaintiffs do  not claim that  they have  any            rights  to  the interest,  rather  they assert  the  right to            control  who  uses  and  benefits from  the  principal  which            generates the  interest.   The IOLTA program,  the plaintiffs                                         -24-            claim, "involves a permanent  physical invasion of the funds"            while they are held in IOLTA accounts.                         The Supreme  Court has recognized that  a taking is            more  obvious   when   the   governmental   action   can   be            characterized as a physical invasion.  Penn Central, 438 U.S.                                                   ____________            at  124.   The Court  has identified  particular governmental            action  as  categorical or  per  se  takings which  generally                                        ___  __            occur:  (1) when government action compels property owners to            acquiesce in  permanent  physical invasion  or occupation  of            their private property, and (2)   when "regulation denies all            economically beneficial or  productive use of land."    Lucas                                                                    _____            v.  South Carolina  Coastal Council,  112 S.  Ct. 2886,  2893                _______________________________            (1992); see also Yee v.  City of Escondido, Cal., 112  S. Ct.                    ___ ____ ___     _______________________            1522, 1526 (1992).                        The plaintiffs argue that the  IOLTA program causes            a physical taking similar to the takings found in Kaiser, 444                                                              ______            U.S.  164 (1979); Loretto, 458 U.S. 419; and Webb's, 449 U.S.                              _______                    ______            155.   In  Kaiser,  owners  of  a  private  marina,  who  had                       ______            connected their private pond to the Pacific Ocean, challenged            the   federal  government's  imposition   of  a  navigational            servitude on their property requiring that they allow a right            of   access  to  the  public.    The  Court  found  that  the            government's regulation of the  marina amounted to a physical            invasion of  their private property  by the public,  and was,            therefore, an unconstitutional  taking of the  marina owners'                                         -25-            right to exclude others from their private property.  Kaiser,                                                                  ______            444 U.S. at 180.                        In  Loretto, 458  U.S.  419, government  regulation                          _______            required private property owners  to allow conduits for cable            television to  be attached to  their buildings even  when the            property  owners did not subscribe to  cable television.  The            Court  found  that  the   regulation  authorized  a  physical            occupation,   however  small,  of   the  plaintiff's  private            property which was unconstitutional without compensation.                      We  find no  logical  analogy between  the physical            invasion  of real property, as in Kaiser and Loretto, and the                                              ______     _______            operation of the  IOLTA Rule.  The  plaintiffs' takings claim            involves intangible  property rights  not real property.   To            bolster  their claim  of  physical  invasion, the  plaintiffs            contend that  their property  rights are nearly  identical to            the claimants' property  rights in Webb's,  449 U.S. 155,  in                                               ______            which the  Court stated "the  [government's] appropriation of            the  beneficial  use  of   the  fund  is  analogous  to   the            appropriation of the use  of private property."  Id.  at 163-                                                             ___            64.                            In Webb's,  449 U.S. 155, the  Supreme Court struck                         ______            down, as an unconstitutional violation of the Fifth Amendment            Takings  Clause,  a  Florida  statute  which required  county            clerks  to deposit  interpleaded  funds in  interest  bearing            accounts and  retain the  accrued interest.   Another Florida                                         -26-            statute provided for a separate fee to be paid  to the county            registry  for holding  interpleaded funds.   The  Court first            determined  that claimants  of the  interpleaded funds  had a            property right to the  deposited funds.  Webb's, 449  U.S. at                                                     ______            161-62.  Applying the general  rule that interest follows the            principal,  the Court held that the  claimants had a property            right to the interest accrued on the interpleaded funds.  Id.                                                                      ___            The   Court   concluded  that   there   was   not  sufficient            justification  for  the  county   to  take  the  interest  on            interpleaded  funds, which  was the  private property  of the            claimants, when the county registries were receiving fees for            the  costs related to holding the interpleaded funds.  Id. at                                                                   ___            164-65.                          Despite the some  superficial similarities  between            Webb's  and this case, there is a fundamental difference.  In            ______            Webb's,   the  Court   found  that   the  claimants   to  the            ______            interpleaded  fund had  a  recognized property  right to  the            interest  earned while  the  funds were  held  by the  county            registries.    In this  case, the  plaintiffs  do not  have a            property  right to the interest earned on their funds held in            IOLTA  accounts.  See Cone, 819 F.2d at 1006-07 (holding that                              ___ ____            plaintiffs had no right to interest earned on IOLTA  accounts            and  discussing  implications  of  Webb's).    In  fact,  the                                               ______            plaintiffs  recognize  this  and  claim  only  the intangible            rights related to the beneficial use of deposited funds:  the                                         -27-            right  to control and exclude others.  The property rights of            the plaintiffs  here and the claimants  in Webb's, therefore,                                                       ______            are different.   The Webb's claimants had  property rights to                                 ______            accrued interest which  is tangible personal  property, while            plaintiffs in this case have claimed only intangible property            interests.                      The  IOLTA program  does not  occupy or  invade the            plaintiffs'  property  even temporarily:   the  IOLTA program            leaves the  deposited funds  untouched, the funds  are always            available to clients as  required by DR 9-102(B)(4),  and the            interest  earned on  IOLTA  accounts is  not the  plaintiffs'            property.  The property rights  claimed by the plaintiffs are            intangible.   We  find no  logical or  legal support  for the            plaintiffs'  claim  that  the  IOLTA  program  has  caused  a            physical invasion and occupation of their intangible property            rights.             b.  Economic interference.                                    ______________________                      Governmental  action through regulation  of the use            of  private  property  does not  cause  a  taking  unless the            interference  is significant.    Andrus, 444  U.S. at  66-67.                                             ______            Having  found  no weight  to  the  plaintiffs' argument  that            governmental  action through  the IOLTA  Rule has  effected a            physical invasion  of their property rights,  we consider the            economic factors which are significant to a takings claim the            economic  impact of  the  IOLTA Rule  on the  plaintiffs, and            "'the  extent to  which  the regulation  has interfered  with                                         -28-            distinct  investment-backed  expectations.'"   Connolly,  475                                                           ________            U.S. at 225 (citations omitted).                      The property  rights claimed by  the plaintiffs  do            not involve  clients' economic interests.   The claimed right            to control and to  exclude others from the beneficial  use of            funds  held  by  lawyers  has  no  economic  benefit for  the            plaintiffs because clients would not otherwise be entitled to            the  interest earned on  pooled accounts.   Plaintiffs do not            claim  and there are  no "investment-backed"  expectations in            the claimed rights of  clients to control and  exclude others            from  the  beneficial  use  of deposited  funds  under  these            circumstances.                        In  sum,  the plaintiffs  claim,  at  best, a  thin            strand in the commonly  recognized bundle of property rights.            Under  the IOLTA  Rule,  the plaintiffs  retain the  right to            possess, use and  dispose of the  principal sum deposited  in            IOLTA  accounts.  "At least  where an owner  possesses a full            'bundle' of property rights,  the destruction of one 'strand'            of the bundle is  not a taking, because the aggregate must be            viewed  in  its  entirety."    Andrus,  444  U.S.  at  65-66.                                           ______            Weighing the plaintiffs' claimed  property rights against the            bundle  of rights  remaining  in their  deposited funds  left            untouched by the IOLTA  program, we find that the  IOLTA Rule            has   not   caused   a   taking   of   plaintiff's  property.                                         -29-            Consequently, we need not  weigh any burden caused  by taking            private rights against the public benefit.                      We  affirm,   albeit  on  different   grounds,  the            district court's  dismissal of  Count Two of  the plaintiffs'            complaint.            B. The First Amendment Speech and Association Claim               ________________________________________________                      The  plaintiffs claim  that the IOLTA  Rule compels            lawyers, and  therefore clients, to participate  in the IOLTA            program  and  thereby  support lobbying  and  litigation  for            ideological  and political  causes.   They  contend that  the            IOLTA Rule  violates their First Amendment  rights of freedom            of speech and association.  The district  court dismissed the            plaintiffs' First  Amendment claims  on the grounds  that (1)            the IOLTA  Rule did not compel  the plaintiffs' participation            in  the IOLTA program, and (2) the IOLTA Rule did not involve            constitutionally  protected  speech.     We  agree  that  the            plaintiffs' First Amendment claim was properly dismissed.                      The First Amendment protects the right not to speak            or associate, as  well as  the right to  speak and  associate            freely.11  Roberts  v. United States  Jaycees, 468 U.S.  609,                       _______     ______________________                                            ____________________            11  The First Amendment provides:                         Congress shall make no  law respecting                      an   establishment    of   religion,   or                      prohibiting the free exercise thereof; or                      abridging  the freedom  of speech,  or of                      the  press; or  the right  of the  people                      peaceably  to  assemble, and  to petition                      the   Government   for   a   redress   of                                         -30-            623 (1984); Wooley v. Maynard, 430 U.S. 705, 714 (1977); West                        ______    _______                            ____            Va. State Bd. of Educ. v. Barnette, 319 U.S. 624, 633 (1943).            ______________________    ________            The Supreme Court has established  that "[t]he right to speak            and  the right  to  refrain from  speaking are  complementary            components of  the broader concept of  'individual freedom of            mind.'"   Wooley, 430 U.S. at 714 (quoting Barnette, 319 U.S.                      ______                           ________            at 637).                        The  most obvious  infringement on  First Amendment            rights  in  the  context  of  compelled  speech  occurs  when            individuals  are  forced  to  make a  direct  affirmation  of            belief.   See,  e.g.,    Barnette,  319  U.S.  at  633  ("the                      ___   ____     ________            compulsory flag  salute and pledge requires  affirmation of a            belief and an  attitude of  mind"); Wooley, 430  U.S. at  715                                                ______            ("New Hampshire's  statute in effect requires  that appellees            use their  private property as  a 'mobile billboard'  for the            State's  ideological message");  Pacific Gas  & Elec.  Co. v.                                             _________________________            Public  Util.   Comm'n,  475  U.S.  1,   17-18  (1986)  ("the            ______________________            [California  Public  Utilities]  Commission's order  requires            [Pacific  Gas   Company]  to  use  its  property the  billing            envelopes to distribute the message of another.").  The IOLTA            Rule does  not compel  the plaintiffs  to display,  affirm or            distribute  ideologies or  expression allegedly  advocated by                                            ____________________                      grievances.                                         -31-            the  IOLTA program  or its  recipient organizations.   Direct            compelled speech, therefore, is not an issue in this case.                      Compelled  support of  an organization  engaging in            expressive activities may also burden First Amendment rights.            In  a series  of cases,  the Supreme  Court has  examined the            First  Amendment implications  raised by  compelled financial            support  of  unions  and  bar associations  which  engage  in            political or  ideological activities.   See, e.g.,  Keller v.                                                    ___  ____   ______            State  Bar of Cal.,  496 U.S.  1 (1990);   Lehnert  v. Ferris            __________________                         _______     ______            Faculty  Ass'n,  111 S.  Ct.  1950  (1991); Chicago  Teachers            ______________                              _________________            Union,  Local No.  1, AFT,  AFL-CIO v.  Hudson, 475  U.S. 292            ___________________________________     ______            (1986); Ellis v.  Railway Clerks, 466 U.S.  435 (1984); Abood                    _____     ______________                        _____            v.  Detroit  Board of  Educ.,  431 U.S.  209  (1977); Railway                ________________________                          _______            Clerks v. Allen,  373 U.S. 113 (1963);  Machinists v. Street,            ______    _____                         __________    ______            367  U.S. 740  (1961);   Lathrop  v.  Donohue, 367  U.S.  820                                     _______      _______            (1961);  Railway  Employees Dept.  v.  Hanson,  351 U.S.  225                     ________________________      ______            (1956).  The Court found that compelled  financial support of            these  organizations implicates  First Amendment  rights when            the  funds were  used to  subsidize ideological  or political            activities.                      In our analysis of  the plaintiffs' First Amendment            claims,  we  must  first  determine whether  the  IOLTA  Rule            burdens  protected  speech  by  forcing   expression  through            compelled  support of  organizations espousing  ideologies or            engaging in  political  activities.   If  so,  we  will  then                                         -32-            strictly scrutinize the  IOLTA program  to determine  whether            the IOLTA  Rule  serves compelling  state  interests  through            means which  are narrowly tailored  and germane to  the state            interests.  See Austin  v. Mich. Chamber of Commerce,  110 S.                        ___ ______     _________________________            Ct. 1391,  1396 (1990);  Pacific Gas & Elec. Co., 475 U.S. at                                     _______________________            19; Abood, 431 U.S. at 235.                  _____                 1.  Is the IOLTA Rule Compulsory?                     _____________________________                      The district court  concluded that  the IOLTA  Rule            was  not compulsory because  lawyers could avoid establishing            IOLTA accounts by  choosing not  to hold client  funds or  by            establishing  individual client  accounts.   Washington Legal                                                         ________________            Found., 795 F. Supp. at 55.  On appeal,  the plaintiffs argue            ______            that the district court  erred in not finding the  IOLTA Rule            compulsory   as  to   them.     Interpretation  of   a  state            disciplinary rule  of professional  conduct is a  question of            law  which we  review under  the  de novo  standard.   In  Re                                              __ ____              ______            Dresser  Indus., Inc., 972 F.2d 540, 543 (5th Cir. 1992); see            _____________________                                     ___            also Salve Regina College  v. Russell, 111 S. Ct.  1217, 1225            ____ ____________________     _______            (1991)  (holding that  district  courts are  not entitled  to            deference  on   review  of  determinations  of   state  law).            Reviewing  a dismissal, we apply the law to the facts alleged            in  the complaint and taken as true.   AVX Corp., 962 F.2d at                                                   _________            115.                      The IOLTA Rule obligates lawyers to deposit  client            funds which they hold  for short terms or in  minimal amounts                                         -33-            into IOLTA accounts.  The plaintiffs allege facts which, when            taken as  true, establish  that avoiding the  IOLTA Rule  has            significantly limited  Attorney Tuttle's practice  of law and            negatively  affected  his   livelihood.12    Attorney   Howes            alleges that he  has had to comply with IOLTA to maintain his            practice of  law  despite  his  belief that  the  IOLTA  Rule            compels him to  support politics and ideologies with which he            disagrees.                       Claimants cannot  be required by  government action            to  relinquish  First  Amendment  rights as  a  condition  of            retaining employment.  Keller, 496 U.S. at 10.  As alleged by                                   ______            the plaintiffs,  the burden on  Tuttle and Howes  of avoiding            the  IOLTA Rule is more than an inconvenience, although it is            less extreme  than forcing loss  of employment.   See Austin,                                                              ___ ______            110  S.   Ct.  at   1399  (recognizing  that   "less  extreme            disincentives   than  the  loss   of  employment"  can  force            association affecting First Amendment rights).  Reviewing the            dismissal of  their claims,  we take the  plaintiffs' factual            allegations  as true and we draw the inference in their favor            that they cannot engage  in the full practice of  law without            holding client funds which  would trigger compliance with the                                            ____________________            12   We express no opinion concerning whether the Real Estate            Settlement Procedures Act, 12 U.S.C.   2601, requires lawyers            to  use IOLTA accounts as alleged by the plaintiffs.  Because            the  allegation requires  a  legal conclusion,  it is  not an            allegation of fact and  is not taken as true  for purposes of            reviewing the dismissal of the plaintiffs' suit.                                         -34-            IOLTA Rule.13    Therefore, based  on the stated  assumptions            and inference, the  IOLTA Rule  is compulsory as  to the  two            plaintiffs  who are  lawyers  for purposes  of deciding  this            case.                      A  different   question  is  presented  as  to  the            compulsory effect  of the IOLTA  Rule on  plaintiffs who  are            clients.  Although  the IOLTA Rule does not directly regulate            clients, its effect  is compulsory because lawyers  generally            deposit  appropriate funds from  clients into  IOLTA accounts            without   the  knowledge   or   consent  of   their  clients.                                            ____________________            13  In  a dissent  urging a stiffer  penalty on a  malfeasant            lawyer, the  following passage  was quoted to  illustrate the            importance of holding clients' funds in the practice of law:                         "Like   many   rules   governing   the                      behavior of lawyers, [the  rule governing                      client  funds]  has  its  roots   in  the                      confidence and trust which  clients place                      in  their attorneys.   Having  sought his                      advice and relying on his  expertise, the                      client  entrusts  the  lawyer   with  the                      transaction including the handling of the                      client's  funds.   Whether it  be a  real                      estate  closing,  the establishment  of a                      trust,  the purchase  of a  business, the                      investment  of  funds,  the   receipt  of                      proceeds of litigation,  or any one of  a                      multitude  of  other  situations,  it  is                      commonplace  that  the  work  of  lawyers                      involves  possession  of  their  clients'                      funds.    That  possession  is  sometimes                      expedient, occasionally simply customary,                      but usually essential.  Whatever the need                      may  be  for  the  lawyer's  handling  of                      clients'  money,  the  client permits  it                      because he trusts the lawyer."            Matter   of   Driscoll,   575   N.E.2d   46,   51-52   (Mass.            ______________________            1991)(Greaney, J., dissenting) (quoting Matter of Wilson,  81                                                    ________________            N.J. 451, 454, 409 A.2d 1153 (1979)).                                         -35-            Therefore,   the  IOLTA  Rule  effectively  coerces  clients'            compliance through the  practices of their lawyers.   Even if            clients were informed of the IOLTA Rule and offered a choice,            we will  assume, again for the limited  purposes of reviewing            dismissal of this case, that there are circumstances in which            the   use  of   IOLTA   accounts  is   necessary  for   legal            representation and therefore, that  clients would at times be            compelled to  allow  their funds  to  be deposited  in  IOLTA            accounts.                        2.   Does the IOLTA Rule Compel Speech by the                           ________________________________________                           Plaintiffs?                           ___________                      The client-plaintiffs allege  that "the  collection            and use of interest, under color of state law, generated from            the IOLTA trust accounts  ..., especially for litigation that            involves political or ideological causes, and for legislative            or other  forms of lobbying, deprive  [plaintiffs] of [their]            right to  freedom of  speech and  association."   The lawyer-            plaintiffs allege that forcing them to comply with the  IOLTA            Rule requires  them to choose between  serious curtailment of            their practice  of  law or  "associating  with  organizations            whose   actions  offend  [their]  political  and  ideological            beliefs" depriving them of their  right to freedom of  speech            and association.                          The plaintiffs  rely on  the compulsory  union fees            and  bar association dues cases for support.  They argue that            they  are  required   to  finance  IOLTA  program   recipient                                         -36-            and bar  association members  have been compelled  to support            organizations in  the same way that  dissenting union members            unconstitutional.   In  Abood, 431  U.S. 209,  Detroit school                                    _____            fees  and  dues  which the  Supreme  Court  has  found to  be            political and  ideological causes through  the collection  of            teachers   challenged  an   "agency-shop"  clause   in  their            U.S. at 7-9.                                           -37-            compelled union membership and compelled financial support of            distinguished,   for   First   Amendment  purposes,   between            unions.   Abood, 431 U.S. at 217, n.10;  see also Keller, 496                      _____                          ___ ____ ______            claiming  that  it violated  their First  Amendment rights.14            union's  collective bargaining efforts to avoid allowing non-            join  the  representative union  to pay  dues to  support the            members  to  benefit  from collective  bargaining,  as "free-            The agency-shop  clause required  employees who chose  not to            compel employees  financially  to support  their  collective-            riders", without paying.  The Supreme Court found that  "[t]o            collective-bargaining   agreement   with  the   school  board            bargaining  representative  [had] an  impact  on  their First            14  An "agency-shop" does not require union membership of all            unions  could not use the dues of dissenters for political or            235-36.            bargaining purpose  of the  agency-shop requirement.   Id. at                                                                   ___            ideological causes  that were not germane  to the collective-                                            ____________________            Amendment  interests."   Id.  at 222.    The Court  held that                                     ___            employees  while a  "union-shop"  does.   The  Court has  not                      In the  context of bar association  dues, the Court            similarly found that  compelled dues of members of  a unified            bar association could not be used to finance activities which            were  not  germane  to  administrative purposes  of  the  bar            association.  Keller,  496 U.S. at 14;  see also Schneider v.                          ______                    ___ ____ _________            Colegio  de Abogados de Puerto  Rico, 917 F.2d  620 (1st Cir.            ____________________________________            1990).                      The union  fees and  bar association dues  cases do            not support  the plaintiffs' cause  nor do other  cases which            have considered the First Amendment implications of compelled            contribution to  organizations.15    These  cases  show  that            compelled speech, through compelled financial support, arises            from the dissenters' involuntary association with ideology or            political  activities.   To  affect  First Amendment  rights,            there  must  be  a  connection  between  dissenters  and  the                                            ____________________            15  See, e.g., Hays County Guardian v. Supple, 969 F.2d  111,                ___  ____  ____________________    ______            122-24  (5th  Cir. 1992)  (compulsory  student  fees used  to            support university newspaper); cert.  denied, 113 S. Ct. 1067                                           _____  ______            (1993);  Carroll   v.  Blinken,   957  F.2d  991   (2d  Cir.)                     _______       _______            (compulsory student  fees used  to support  NYPIRG, statewide            student advocacy organization), cert.  denied, 113 S. Ct. 300                                            _____  ______            (1992);  United States v. Frame, 885 F.2d 1119 (3d Cir. 1989)                     _____________    _____            (fee  imposed on  cattle producers  and importers  by federal            statute  used to  fund  national beef  campaign by  remitting            funds  to recipient  organizations); cert.  denied, 493  U.S.                                                 _____  ______            1094 (1990): Galda v.  Rutgers, 772 F.2d 1060 (3d  Cir. 1985)                         _____     _______            (compulsory  student  fee  used  to  support  NJPIRG);  cert.                                                                    _____            denied, 475 U.S. 1082  (1986); Smith v. Regents of  the Univ.            ______                         _____    _____________________            of Calif.,  844 P.2d 500 (Cal. 1993) (compulsory student fees            _________            used to  support a  wide range  of student  organizations and            activities); Cahill v. Public Service Comm'n, 556 N.E. 2d 133                         ______    _____________________            (N.Y.  1990) (utilities  authorized  by  N.Y. Public  Service            Commission  to pass  along to  ratepayers cost  of charitable            contributions).                                         -38-            organization  so that  dissenters reasonably  understand that            they  are  supporting  the  message  propagated by  recipient            organizations.   Typically,  compelled  contribution of money            to support political or ideological causes is the root of the            evil which offends the First Amendment:  "'to compel a man to            furnish  contributions  of  money   for  the  propagation  of            opinions which  he disbelieves,  is sinful  and tyrannical.'"            Abood, 431  U.S.  at 234-35  n.31  (quoting I.  Brant,  James            _____            Madison:  The Nationalist 354 (1948)).  In  this   case,  the            plaintiffs' allegations that "[t]he  collection of and use of            interest, under  color of  state law, generated  by funds  in            IOLTA  trust accounts"  violate  their rights  to freedom  of            speech and  association do  not  state a  claim of  compelled            financial support.  The interest generated by funds deposited            in IOLTA accounts is not the clients' money.  The  process by            which  the  IOLTA  program  collects  and  uses  the  accrued            interest does not affect the plaintiffs' funds  held in IOLTA            accounts  nor  does  it  require any  other  expenditures  or            efforts  by the  plaintiffs.16   Put  simply, the  plaintiffs            have not been compelled by the IOLTA Rule to contribute their            money  to  the IOLTA  program.    Rather, the  IOLTA  program                                            ____________________            16   We note that  the plaintiff-lawyers are  required by the            IOLTA  Rule to  set up  IOLTA accounts  in banks  and deposit            appropriate  client  funds  therein.    Because a  comparable            effort  would be  necessary  to set  up non-interest  bearing            accounts  for  the  deposit  of  client  funds,  we  find  it            inconsequential for First Amendment analysis.                                         -39-            recipient organizations benefit  from an  anomaly created  by            the practicalities of accounting, banking practices,  and the            ethical obligation of lawyers.   The interest earned on IOLTA            accounts belongs to  no one,  but has been  assigned, by  the            Massachusetts Supreme Judicial Court, to be used by the IOLTA            program.   Therefore, the collection and  use of the interest            by the IOLTA program does not constitute financial support by            the  plaintiffs, as they  claim.   If the  plaintiffs believe            that the IOLTA  program is  not operated in  accord with  its            stated  purpose  or  if  they remain  dissatisfied  with  the            assigned recipients of  IOLTA funds, they may   address their            complaints  to  the  IOLTA  Committee  or  the  Massachusetts            Supreme Judicial Court.                      The plaintiffs  have not  alleged and there  are no            other facts  or circumstances which establish  that they have            been compelled to associate with or support the IOLTA program            in any other  manner.  They  have not  been compelled by  the            IOLTA Rule to join,  affirm, support or subsidize ideological            expression  of IOLTA  recipient organizations  in  any way.17                                            ____________________            17  Although the plaintiffs have alleged deprivation of their            right to  freedom of  association, we  have found no  factual            allegations  to support their claim.  The IOLTA Rule does not            require that clients or lawyers  join any organization.   The            plaintiffs  have  not alleged  that  the organizations  which            ultimately receive  IOLTA funding automatically  include them            as  members  or  otherwise  link them  to  the  organizations            without  their  consent.   C.f.  Carroll,  957  F.2d at  1003                                       ____  _______            (holding that  SUNY Albany's distribution of  student fees to            NYPIRG   which  automatically  made   all  students  members,            impermissibly forced  association in  violation of  the First                                         -40-            Because the  plaintiffs have not adequately  alleged that the            IOLTA  Rule compels a  connection between them  and the IOLTA            recipient organizations, we find that the IOLTA Rule does not            burden the plaintiffs' First  Amendment rights.  Having found            no impact on the plaintiffs' First Amendment rights caused by            the IOLTA  Rule,  we  need  not consider  whether  the  IOLTA            program  serves a  compelling state  interest.   The district            court's order dismissing the plaintiffs' claims is                                            Affirmed.                                            Affirmed.                                            _________                                                             ____________________            Amendment).                                         -41-
