C. Appropriate Remedy
The Complaint requests declaratory and injunctive relief and damages, specifically:
1. A declaration that the LSC Act does not authorize LSC to reduce a recipient's funding "based solely on LSC's determination that the responsible state agency improperly approved the recipient's use of state funds."
2. A declaration that NCYL did not violate the LSC Act by using state funds to participate in the AAP litigation.
3. A declaration that LSC funding appropriation must be maintained at the same level from 1989 to 1990 under the Omnibus Reconciliation Act of 1989 (Pub.L.No. 101-162 § 608, 103 Stat. 1032 (1989)).
4. A declaration that LSC's funding reduction violated plaintiff's right to free expression as guaranteed by the First Amendment to the United States Constitution.
5. For damages in the amount of the total funding reduction for 1990, with interest.
6. An injunction barring LSC from further refunding reductions based upon review of state agency legal service funding decisions.
7. Attorneys' fees and costs to the full extent authorized by law.
As discussed above, the Court has hereby set aside the LSC's decision to reduce NCYL's 1990 funding as that decision was arbitrary and unsupported by substantial evidence. Furthermore, the Court has found that, inasmuch as NCYL's use of state Trust funds for the AAP litigation was proper under § 1010(c) of the LSC Act, LSC's reduction of funding was taken in violation of the LSC Act's express protection for use of non-Federal public funds. Because the Court finds that this decision disposes of the case on its merits, no declaratory relief on LSC's general funding decision practices or the effect of those practices on recipients' First Amendment Rights will be granted. In addition, the injunctive relief requested is speculative as to any other funding reduction decisions which LSC may now or in the future make with regard to NCYL or other grantees.
The Court does find that plaintiff is entitled to the full contractual amount of its 1990 grant, without reduction for the invalid 9.95% sanction. As plaintiff has cited no basis on which a grant of attorneys' fees is justified in this case, the Court grants leave to file further a request for attorneys' fees in this action to provide such a basis, if any.
For the reasons stated above, the Court finds that LSC violated the clear purpose of the LSC Act not to interfere with state funding of legal assistance funds, and hereby sets aside the 9.95% funding sanction, GRANTING summary judgment for plaintiff.
Plaintiff is ordered to file a form of judgment consistent with this Order within 20 days, and to serve a copy of such proposed judgment upon defendants. Defendants shall have an additional 14 days to review the proposed judgment and file comments, if any, with the Court.
IT IS SO ORDERED.
DATED: September 10, 1990.