Brown v. Legal Foundation of Washington

Washington's IOLTA program pooled client funds held in trust by lawyers into interest-bearing NOW accounts, directing the resulting interest to fund legal services for the poor; the law specifically barred depositing funds that could earn clients net interest on their own into these accounts. Brown and Hayes (plaintiffs), clients whose funds were deposited under this scheme, sued the Legal Foundation of Washington (defendant), claiming the state's taking of the interest was a Fifth Amendment taking requiring just compensation. The district court found for the Foundation since their funds could not have earned net interest anyway; the Ninth Circuit reversed based on a similar precedent, measuring compensation by what the funds would have earned outside the program, and the Supreme Court granted certiorari.