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  &amp;  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  &amp; 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 &amp; 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  &amp;  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.
                          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.
                           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  &amp; 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 &amp; 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.
                                         

                    

Amendment).

                             -41-
