Washington Legal Foundation v. Texas Equal Access to Justice Foundation

RHESA HAWKINS BARKSDALE, Circuit Judge:

The Supreme Court having held in this case that, for purposes of the Takings Clause of the Fifth Amendment, interest earned on client-funds deposited in demand accounts pursuant to the Texas Interest on Lawyers Trust Accounts (IOLTA) program is the “private property” of the client, Phillips v. Washington Legal Foundation, 524 U.S. 156, 160, 172, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998), and the Court having remanded this case for consideration, inter alia, of two other sub-parts of the Takings Clause (whether there has been a “taking” and, if so, what “just compensation”, if any, is due, id. at 172, 118 S.Ct. 1925), and the district court, following a bench trial on remand, having concluded, inter alia, there was neither a compensable loss nor a taking, the principal issues at hand are: whether there can be a taking when, without the cost-savings provided by the IOLTA program, client-funds would not earn “net” interest; and whether, even if there is a taking, prospective injunctive relief can be a remedy.

Because we hold that the Fifth Amendment is violated, we need not reach Appellants’ claim that the IOLTA program violates the First Amendment as well. REVERSED and REMANDED.

I.

The requisite underlying facts have been fully discussed in prior opinions by the Supreme Court and our court. See Phillips v. Washington Legal Found., 524 U.S. 156, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998); Washington Legal Found, v. Texas Equal Access to Justice Found., 94 F.3d 996 (5th Cir.1996). They are restated here, together with pertinent new facts.

When attorneys hold their clients’ funds, Texas ethical rules require placing those funds in a trust account that permits withdrawal on demand. Tex. Disciplinary Rules of Professional Conduct, Art. 10, § 9, Rule 1.14(a). Those rules allow attorneys to aggregate client-funds in a single trust account, but, of course, prohibit attorneys from commingling their money with the trust fund. Id. Prior to 1980, because federal law prohibited banks from paying interest on demand accounts, these accounts were, in effect, interest-free loans to the banks. See S.Rep. No. 96-368, at 5 (1980), reprinted in 1980 U.S.C.C.A.N. 236, 240.

In 1980, Congress enacted legislation that allowed negotiable order of withdrawal (NOW) accounts. See Depository Institutions Deregulation and Monetary Control Act of 1980, 94 Stat. 132, 146 (codified as amended at 12 U.S.C. § 1832). In general, NOW accounts allow attorneys to *183pool client-funds in an interest-bearing trust account.1

The creation of NOW accounts led to the creation of IOLTA programs. When either the amount of a client’s funds to be held is nominal or the period of time for which the funds will be held is brief, a NOW account for such client-funds is not feasible, because the cost of maintaining the account is greater than the interest the client would have earned {no “net interest”). As discussed infra, such costs are those incurred not only by the bank, but also by the attorney. In this situation, the trust accounts are — as they were formerly — -interest-free loans to the banks. IOLTA programs transfer this benefit from the bank to legal providers for the indigent. Based on the assumption — later held erroneous in Phillips — that the interest generated was not the client’s property, the American Bar Association’s Standing Committee on Ethics and Professional Responsibility opined that IOLTA programs are ethical. See ABA Comm, on Ethics and Profl Responsibility, Formal Op. 348 (1982).

The Texas Supreme Court created its IOLTA program in 1984. The program was voluntary, permitting an attorney to place client-funds that were “nominal in amount” or “reasonably anticipated to be held for a short period of time” in an unsegregrated, interest-bearing bank account (an IOLTA account), the interest on which was paid to the Texas Equal Access to Justice Foundation (TEAJF), a nonprofit corporation created by the Texas Supreme Court. See Tex. Gov’t Code Ann. tit. 2, subtit. G, app. A, art. 11 §§ 6-7 (1987). TEAJF manages the interest earned from the IOLTA accounts and distributes it to non-profit organizations that “have as a primary purpose the delivery of legal services to low income persons”, with the exception that funds may not be used to finance class actions or to lobby on behalf of a political candidate or issue. See Texas Rules of Court — State, Rules Governing the Operation of the Texas Equal Access to Justice Program [TEAJF rule] rule 10,15 (West 1996).

Texas’ voluntary IOLTA program generated only $1 million annually. Therefore, in 1988, following the lead of several other States and the recommendation of the American Bar Association, the Texas Supreme Court made mandatory attorney participation in the IOLTA program.

An attorney ... receiving in the course of the practice of law ... client funds that are nominal in amount or are reasonably anticipated to be held for a short period of time, shall establish and maintain a separate interest-bearing demand account at a financial institution and shall deposit in the account all those client funds.

Tex. Gov’t Code Ann. tit. 2, subtit. G, app. A, art. 11 § 5 (West Supp.1995) (emphasis added). The rules define which funds are “nominal in amount” and/or “held for a short period of time”. They state that a client’s funds may be deposited in an IOLTA account only if the attorney holding the funds determines they

could not reasonably be expected to earn interest for the client or if the interest which might be earned on such funds is not likely to be sufficient to offset the cost of establishing and maintaining the *184account, service charges, accounting costs and tax reporting costs which would be incurred in attempting to obtain interest on such funds for the client.

TEAJF rule 6 (emphasis added).2

The January 1999 guidelines to the TEAJF rules provide attorneys “should consider all costs associated with such an account” in determining whether a client’s funds are suitable for deposit in the program. But, W. Frank Newton, past chair of TEAJF and member of its board of directors, testified that attorneys may disregard their overhead costs. (As Appel-lees note, the guidelines have been revised — approximately when the trial on remand was held in September 1999 — to provide that attorneys may consider all costs associated with such an account.)

Attorneys must review periodically whether changed circumstances require removing a client’s funds from an IOLTA account. TEAJF rule 6. Along this line, if an attorney determines funds were erroneously placed in an IOLTA account, he must notify TEAJF and seek a refund of the interest earned.

The mandatory IOLTA program generated much more revenue than its predecessor. Recent earnings approximate over $5 million annually.

As noted, Texas’ IOLTA program was made mandatory in 1988. In 1994, Michael J. Mazzone, a Texas attorney who regularly places client-funds in an IOLTA account,3 William R. Summers, a Texas citizen who currently has funds in an IOLTA account, and Washington Legal Foundation, a public interest law firm with members similarly situated to Mazzone and Summers (Appellants), filed this action against the Texas IOLTA program, naming as defendants TEAJF, TEAJF’s chairman, and the nine Justices of the Texas Supreme Court (Appellees). Appellants claimed: the IOLTA program impermissi-bly takes interest earned from client-funds, in violation of the Fifth Amendment; and the program forces Appellants to support speech they find offensive, in violation of the First Amendment. Appellants sought monetary reimbursement, as well as declaratory and injunctive relief.

*185The district court granted Appellees’ motion for summary judgment, concluding clients lacked property rights in the interest generated by their funds. Washington Legal Found. v. Texas Equal Access to Justice Found., 873 F.Supp. 1, 7 (W.D.Tex.1995). But, through an opinion authored by the late Judge John Minor Wisdom, our court reversed in part, holding the interest was the clients’ property. Washington Legal Found., 94 F.3d at 1000. On the other hand, our court affirmed the district court’s conclusion that Appellees have Eleventh Amendment immunity from the monetary-restitution claim. Id. at 1005.

The Supreme Court granted certiorari, limiting its review to: “Is interest earned on client trust funds held by lawyers in IOLTA accounts a property interest of the client or lawyer, cognizable under the Fifth Amendment of the United States Constitution, despite the fundamental precept of IOLTA that such funds, absent the IOLTA program, could [not] earn interest for the client [or] laioyer?”. Phillips v. Washington Legal Found., 521 U.S. 1117, 117 S.Ct. 2535, 138 L.Ed.2d 1011 (1997) (emphasis added). In June 1998, the Court affirmed, stating the issue to be “whether interest earned on clientrfunds held in IOLTA accounts is ‘private property’ of either the client or the attorney for purposes of the Takings Clause”, and holding the interest is the property of the client. Phillips, 524 U.S. at 160, 118 S.Ct. 1925. In the light of its “hold[ing] that the interest income generated by funds held in IOLTA accounts is the ‘private property’ of the owner of the principal [,the client,]”, id. at 172, 118 S.Ct. 1925, the Court remanded for further proceedings, including a determination of whether the interest has been “taken” by the State and the amount of “just compensation”, if any, due. Id.

A bench trial was held in September 1999. In January 2000, the district court granted the Texas Supreme Court Justices’ motion for judgment on the pleadings, holding the Justices are legislatively immune from suit. Washington Legal Found. v. Texas Equal Access to Justice Found., 86 F.Supp.2d 617, 624 (WD.Tex. 2000). Later that month, the court dismissed the remaining claims, concluding the IOLTA program was not violative of either the Fifth or First Amendments. Washington Legal Found. v. Texas Equal Access to Justice Found., 86 F.Supp.2d 624, 636, 643 (W.D.Tex.2000).

Regarding the taking claim, the court concluded that the “just compensation” subpart .of the Takings Clause had not been violated; this was premised on its conclusion that Appellants failed to show an identifiable compensable loss because a client’s IOLTA-deposit funds cannot generate “net interest” without the IOLTA program. Id. at 643. Again, by “net interest”, the court meant interest in excess of the costs associated with establishing and maintaining an interest-bearing demand account. Id. at 628 (citing TEAJF rule 6); see also TEAJF rule 4B. In the alternative, and applying the ad hoc analysis referenced infra, the court concluded there had been no taking. Id. at 643-47.

II.

The district court’s conclusions of law are reviewed de novo; its findings of fact, for clear error. E.g., Dunbar Med. Sys., Inc. v. Gammex Inc., 216 F.3d 441, 448 (5th Cir.2000). Of course, whether public interests are served by Texas’ IOLTA program is not the question. Instead, at issue is the constitutionality vel non of the program. Because Appellants’ Fifth Amendment claim has merit, we do not reach their claim that the IOLTA program violates their First Amendment rights by *186forcing them to finance speech they find objectionable.

The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth, provides: “nor shall private property be taken for public use, without just compensation”. U.S. Const. amend. V; Phillips, 524 U.S. at 163-64, 118 S.Ct. 1925. Appellants have met their burden of demonstrating the existence of a property interest. Id. at 172, 118 S.Ct. 1925. And, there is no dispute that “private property” has been allocated “for public use”. Therefore, has there been a “taking”? If so, what “just compensation”, if any, is due?

A.

For determining whether there has been a taking, Appellants urge use of the per se analysis; Appellees, the ad hoc inquiry set forth in Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 124, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978) (three factors of “particular significance”: economic impact of regulation; extent of interference with distinct investment-backed expectations; and character of governmental action).

On remand, the district court first rejected using the per se analysis, and then applied the ad hoc method. Washington Legal Found., 86 F.Supp.2d at 643-47. We conclude, however, that Phillips, and Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980), and Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), cases the Phillips Court relied upon in reaching its property interest holding, compel applying the per se analysis.4

Webb’s, 449 U.S. at 155-56, 101 S.Ct. 446, the case most factually similar to the one at hand, involved a state statute pursuant to which, in addition to charging a fee for the clerk’s services in receiving an interpleader fund into the registry of its court, a county took the interest accruing on that deposited fund. Citing Penn Central, but not engaging in the ad hoc analysis articulated in it, the Court first noted it “has been permissive in upholding” governmental action that denies a property owner the full use of his property, if that action promotes the general welfare. Id. at 163, 101 S.Ct. 446.

[For the governmental action at issue in Webb’s], however, [the government] has not merely adjusted the benefits and burdens of economic life to promote the common good. Rather, the exaction is a forced contribution to general governmental revenues, and it is not reasonably related to the costs of using the courts.

Id. (emphasis added; internal quotation marks and citation omitted). The exaction was found similar to that in United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206 (1946): “The county’s appropriation of the beneficial use of the fund is analogous to the appropriation of the use of private property in ... Causby ”. Webb’s, 449 U.S. at 163-64, 101 S.Ct. 446.

In Causby, 328 U.S. at 258-59, 66 S.Ct. 1062, the Government’s use of air space above private property as part of the flight plan for military aircraft was held to be a taking: the appropriation destroyed the use of the land as a chicken farm. Causby was decided before the per se tak*187ings analysis was articulated. But, Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), classified Causby as involving a “physical invasion of property”, one of “at least two distinct categories of regulatory action ... compensable without case-specific inquiry into the public interest advanced in support of the restraint”.5 Continuing the discussion of the per se analysis, and of great significance to the taking issue presented by the case at hand, the Court stated:

In general (at least with regard to permanent invasions), no matter how minute the intrusion, and no matter how weighty the public purpose behind it, we have required compensation. For example, in Loretto v. Teleprompter Manhattan CATVCorp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), we determined that New York’s law requiring landlords to allow television cable companies to emplace cable facilities in their apartment buildings constituted a taking, id., at 435-40, 102 S.Ct. 3164, even though the facilities occupied at most only 1 cubic feet of the landlords’ property, see id., at 438, n. 16, 102 S.Ct. 3164. See also United States v. Causby, 328 U.S. 256, 265, and n. 10, 66 S.Ct. 1062, 90 L.Ed. 1206 (1946) (physical invasions of airspace); cf. Kaiser Aetna v. United States, 444 U.S. 164, 100 S.Ct. 383, 62 L.Ed.2d 332 (1979) (imposition of navigational servitude upon private marina).

Id. at 1015,112 S.Ct. 2886.

Appellees maintain the Court has repeatedly rejected governmental appropriation of money being subjected to the per se analysis. They rely, however, on cases where the government provided a service and charged a reasonable fee for that service. See, e.g., United States v. Sperry Corp., 493 U.S. 52, 110 S.Ct. 387, 107 L.Ed.2d 290 (1989) (upholding imposition of reasonable fee for use of Iran-United States Claims Tribunal). As Phillips determined, the case at hand is not such a case:

This would be a different case if the interest income generated by IOLTA accounts was transferred to the State as payment for services rendered by the State. Our holding does not prohibit a State from imposing reasonable fees it incurs in generating and allocating interest income. But here the State does not, indeed cannot, argue that its confiscation of [a client’s] interest income amounts to a fee for services performed.

Phillips, 524 U.S. at 171, 118 S.Ct. 1925 (emphasis added; internal quotation marks and citations omitted). Moreover, the analysis in Webb’s dispels any assertion that the per se test applies solely to governmental appropriation of real property-

Appellees also emphasize the district court’s finding, 86 F.Supp.2d at 643, that, absent the IOLTA program, net interest could not have been generated on Appellant Summers’ funds. But, as referenced earlier, the Court concluded in Loretto, 458 U.S. at 434-35, 102 S.Ct. 3164, that a government’s permanent physical occupation of property constitutes a per se taking, regardless of the economic impact on the owner. Even more to the point, as stated in Phillips, 524 U.S. at 170, 118 S.Ct. 1925: “The government may not seize rents received by the owner of a building simply because it can prove that the costs incurred in collecting the rents exceed the amount collected”. Along this line, Phillips made clear that a client’s *188rights to possess, control, and dispose of the interest earned on his funds are valuable rights, regardless of whether the interest has economic value. Id.6

As our court has already noted for the case at hand, in order to prevail on their taking claim, Appellants must demonstrate the taking was against the will of the property owner. Washington Legal Found., 94 F.3d at 1004. Appellant Summers testified he objected to his interest being taken to support Texas’ IOLTA program. However, he had no choice. IOLTA programs are structured so that they satisfy Internal Revenue Service ruling 81-209, by which the IRS agrees not to tax clients on the interest generated by their funds in IOLTA accounts and paid to TEAJF if they have no control over whether to participate in the program. See Rev. Rul. 81-209, 1981-2 C.B. 16, 1981 WL 165692; Phillips, 524 U.S. at 162, 118 S.Ct. 1925; Washington Legal Found., 94 F.3d at 1003. Clients have no choice whether to participate because attorney participation in Texas’ IOLTA program is mandatory. Therefore, a client cannot avoid the appropriation of his interest by selecting an attorney who elects not to participate.7

In reality, the linchpin for this case has already been inserted by the Supreme Court: “interest income generated by funds held in IOLTA accounts is the ‘private property’ of the owner of the principal” — -the client. Phillips, 524 U.S. at 172, 118 S.Ct. 1925.8 And, because the State has permanently appropriated Appellant Summers’ interest income against his will, instead of merely regulating its use, there is a per se taking. Compare Loretto, 458 U.S. at 432 & n. 9, 102 S.Ct. 3164, with Penn Central, 438 U.S. at 124, 98 S.Ct. 2646.

*189It is well to remember that a “taking” is distinct from “just compensation”.

Once the fact of occupation is shown, ... a court should consider the extent of the occupation as one relevant factor in determining the compensation due. For that reason, ... there is less need to consider the extent of the occupation in determining whether there is a taking in the first instance.

Loretto, 458 U.S. at 437-38, 102 S.Ct. 3164 (emphasis in original; footnote omitted). In other words, once a taking is found, the question becomes what amount of, not whether, just compensation is due. Id. at 441, 102 S.Ct. 3164; see also First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, Cal., 482 U.S. 304, 314, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987) (Takings Clause “does not prohibit the taking of private property, but instead places a condition on the exercise of that power”); Monongahela Navigation Co. v. United States, 148 U.S. 312, 336, 13 S.Ct. 622, 37 L.Ed. 463 (1893) (government “can take only on payment of just compensation”).9 Again, as explained in Phillips, 524 U.S. at 170, 118 S.Ct. 1925, there can be a compensable taking of a property right “even when infringement of that right arguably inerease[s] the market value of the property at issue”.10

B.

Originally, Appellants sought not only reimbursement of the earned interest, but also the following declaratory and injunc-tive relief: (1) declaring void rules requiring attorneys to place client-funds in IOLTA accounts; (2) enjoining TEAJF from both compiling lists of attorneys who fail to comply with IOLTA and transmitting those lists to the State Bar; and (3) enjoining the Justices of the Texas Supreme Court from (a) adopting any rules that purport to require attorneys, as a condition for practicing law in Texas, to handle client-funds in a manner designed to ensure that interest on those funds will accrue to anyone not designated by the client, and (b) taking disciplinary action against any attorney for failing to deposit client-funds in an IOLTA account.

But, as noted, our court has affirmed the district court’s holding that the Eleventh Amendment bars Appellants’ monetary-reimbursement claim. Washington Legal Found., 94 F.3d at 1005. Therefore, Appellants now seek only prospective declaratory and injunctive relief.

1.

Following the remand by the Supreme Court, Appellees, for the first time, took the position that injunctive relief is not available, claiming: the only remedy for an *190unconstitutional taking is just compensation; and Appellants should have sought it in state court. Although Appellees maintain that position here, they do not strenuously urge it as a basis for affirmance.

The district court did not reach this issue. Instead, it noted that, although Appellants were seeking only declaratory and injunctive relief, “they must still prove that a taking occurred ‘without just compensation’ in order to establish a violation of the Fifth Amendment, which is a prerequisite to relief’. Washington Legal Found., 86 F.Supp.2d at 643 n. 8.

a.

Perhaps the district court did not rule on this remedy issue because, in the prior appeal to our court, our court had stated: “[Appellees] concede that they are subject to [Appellants’] prospective injunction claims”. Washington Legal Found., 94 F.3d at 1005 (emphasis added).11 Appellees are bound by that concession; they cannot now take an inconsistent position. See Jett v. Zink, 474 F.2d 149, 154-55 (5th Cir.) (party who argued on first appeal that action was in personam precluded from arguing on second appeal that action was quasi in rem), cert. denied, 414 U.S. 854, 94 S.Ct. 153, 38 L.Ed.2d 104 (1973). Cf. United States v. Morris, 79 F.3d 409, 411 (5th Cir.1996) (in criminal case, refusing to allow Government to take position on appeal inconsistent with that in district court); Gregory v. Missouri Pacific R.R. Co., 32 F.3d 160, 164-65 (5th Cir.1994) (although “appellee generally may urge in support of a judgment any matter appearing in the record”, it “cannot take one position before the district court and then take an inconsistent position” on appeal).

b.

In the alternative, Appellees’ injunctive- and-declaratory-relief-unavailable-contention fails. Nevertheless, the contention has some support.

In Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978), individuals living near planned nuclear power facilities sought a declaration that the Price-Anderson Act, 42 U.S.C. § 2210, was unconstitutional. That Act imposed a limitation on liability for nuclear accidents resulting from the operation of private nuclear power plants licensed by the United States. Among other things, one claim was “in the event of a nuclear accident, their property would be ‘taken’ without any assurance of just compensation”. Id. at 69, 98 S.Ct. 2620. Then Justice Rehnquist, in his separate opinion concurring in the judgment, maintained that the taking claim could be adjudicated only in the Court of Claims under the Tucker Act, 28 U.S.C. § 1491 (granting jurisdiction to Court of Federal Claims to render judgment on claims against the United States founded on, inter alia, the Constitution). Id. at 101-02 & n. 4, 98 S.Ct. 2620 (Rehnquist, J., concurring). The majority held otherwise:

Appellees are not seeking compensation for a taking, a claim properly brought in the Court of Claims, but are now requesting a declaratory judgment that since the Price-Anderson Act does not *191provide advance assurance of adequate compensation in the event of a taking, it is unconstitutional- While the De-
claratory Judgment Act does not expand our jurisdiction, it expands the scope of available remedies. Here it allows individuals threatened with a taking to seek a declaration of the constitutionality of the disputed governmental action before potentially uncompensable damages are sustained.

Id. at 71 n. 15, 98 S.Ct. 2620 (emphasis added).

Six years later, in Ruckelshaus v. Monsanto Co., 467 U.S. 986, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984), the Court considered Monsanto’s request for injunctive and declaratory relief, based on its claim that the data-disclosure and data-consideration provisions of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 186, ei seq., effected a taking of its property (trade secrets) without just compensation. The Court stated: “Equitable relief is not available to enjoin an alleged taking of private property for a public use, duly authorized by law, when a suit for compensation can be brought against the sovereign subsequent to the taking”. Id. at 1016, 104 S.Ct. 2862 (footnote omitted). The Court held: because Congress, in FIFRA, had not expressly withdrawn jurisdiction under the Tucker Act, a Tucker Act remedy was available for any uncompensated taking. Id. at 1017-19, 104 S.Ct. 2862. Accordingly, Monsanto’s challenges to the constitutionality of FIFRA were held not ripe for resolution. Id. at 1019, 104 S.Ct. 2862.

Monsanto did not overrule Duke Power. In fact, Monsanto cited Duke Power in support of the conclusion that Monsanto’s claims were not ripe. Id. at 1021, 104 S.Ct. 2862. See also Preseault v. ICC, 494 U.S. 1, 11, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990) (taking claim against United States premature until property owner has availed itself of process provided by Tucker Act).

A year after Monsanto was decided, the Court applied its ripeness doctrine in a case in which the owner of property being developed as a residential subdivision claimed a county planning commission’s application of zoning laws and regulations constituted a taking of its property. Williamson County Reg’l Planning Comm’n v. Hamilton Bank, 473 U.S. 172, 195, 105 S.Ct. 3108, 87 L.Ed.2d 126 (1985). The Court held that, because the property owner had “not yet obtained a final decision regarding the application of the zoning ordinance and subdivision regulations to its property, nor utilized the procedures [state law] provides for obtaining just compensation”, its claim was “not ripe”. Id. at 186, 105 S.Ct. 3108.

The Court explained that the Fifth Amendment does not “require that just compensation be paid in advance of, or contemporaneously with, the taking; all that is required is that a reasonable, certain and adequate provision for obtaining compensation exist at the time of the taking”. Id. at 194, 105 S.Ct. 3108 (internal quotation marks omitted; citing Monsanto). As is the case with taking claims against the United States, which are premature until the property owner has sought just compensation under the Tucker Act, “if a State provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation”. Id. at 195, 105 S.Ct. 3108.

Following Monsanto, the Ninth Circuit held that the “exclusive remedy” for a taking claim against the United States is “a suit for money damages under the Tucker Act”; therefore, neither declarato*192ry nor injunctive relief is available. Clouser v. Espy, 42 F.3d 1522, 1539 (9th Cir.1994) (citing Monsanto), cert. denied, 515 U.S. 1141, 115 S.Ct. 2577, 132 L.Ed.2d 827 (1995). See also Rose Acre Farms, Inc. v. Madigan, 956 F.2d 670, 673-74 (7th Cir.) (reversing grant of injunctive relief against enforcement of federal regulation because of availability of just compensation under Tucker Act (citing Monsanto and Preseault)), cert. denied, 506 U.S. 820, 113 S.Ct. 68,121 L.Ed.2d 34 (1992).

Other circuits have held otherwise. See Student Loan Mktg. Ass’n v. Riley, 104 F.3d 397, 402 (D.C.Cir.) (entertaining declaratory relief request where alleged taking involved “straightforward mandate[] of cash payment to the government”), cert, denied, 522 U.S. 913, 118 S.Ct. 295, 139 L.Ed.2d 227 (1997); LTV Steel Co., Inc. v. Shalala (In re Chateaugay Corp.), 53 F.3d 478, 491-93 (2d Cir.) (distinguishing “statutes burdening real and tangible property” from “those [as in the case at hand] requiring direct transfers of money to the government”, and holding: Tucker Act does not “remove from the federal district courts jurisdiction over an action for declaratory relief where no money damages have been requested”; Duke Potver demonstrates “the clear availability of declaratory relief for asserted Takings Clause violations”), cert. denied, 516 U.S. 913, 116 S.Ct. 298, 133 L.Ed.2d 204 (1995); Southeast Kan. Comty. Action Program, Inc. v. Secretary of Agric., 967 F.2d 1452,1456-57 (10th Cir.1992) (taking claim based on United States Department of Agriculture’s failure to renew contract to administer federal child nutrition program; Tucker Act inapplicable when declaratory and injunc-tive relief sought).

More than a decade after Monsanto was decided, the Court in Babbitt v. Youpee, 519 U.S. 234, 242-43, 117 S.Ct. 727, 136 L.Ed.2d 696 (1997), affirmed declaratory and injunctive relief in an action challenging the constitutionality of a federal statute providing for escheat of fractional interests in land. Although at issue was whether there had been a taking, rather than the remedy that could be provided, Babbitt lends support to the conclusion that Monsanto and Williamson County do not categorically prohibit such relief for taking claims, especially where, as here, the claim is not against the United States (thus, Tucker Act not in play).

In 1998, the Court considered a taking claim by a company no longer involved in the coal industry, challenging the constitutionality of the Coal Industry Retiree Health Benefit Act of 1992, 26 U.S.C. §§ 9701-9722. Eastern Enters. v. Apfel, 524 U.S. 498, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998). A four-justice plurality concluded that the Act violated the Takings Clause, and that the challenged provisions should be enjoined as applied to Eastern. Id. at 538, 118 S.Ct. 2131.

Citing Monsanto, the plurality acknowledged that “a claim [against the United States] for just compensation under the Takings Clause must be brought to the Court of Federal Claims in the first instance, unless Congress has withdrawn the Tucker Act grant of jurisdiction in the relevant statute”. Id. at 520, 118 S.Ct. 2131. But, Eastern was not seeking compensation; instead, similar to the case at hand, it was requesting “a declaratory judgment that the Coal Act violates the Constitution and a corresponding injunction against the ... enforcement of the Act as to Eastern”. Id. “Such equitable relief is arguably not within the jurisdiction of the Court of Federal Claims under the Tucker Act.” Id.

The plurality noted the split among the Courts of Appeals regarding whether, for claims against the United States, equitable relief was available under the Takings *193Clause when just compensation had not been sought under the Tucker Act. Id. at 520-21, 118 S.Ct. 2181. Citing Preseault and Monsanto, the plurality acknowledged that the “Court’s precedent can be read to support the ... conclusion that regardless of the nature of relief sought, the availability of a Tucker Act remedy renders premature any takings claim in federal district court”. Id. at 521, 118 S.Ct. 2131. But, because the Coal Act mandated payments to a privately-operated fund, monetary relief against the United States was not an available remedy. Id. The plurality reasoned: “Congress could not have contemplated that the Treasury would compensate coal operators for them liability under the Act, for ‘[e]very dollar paid pursuant to a statute would be presumed to generate a dollar of Tucker Act compensation’ ”. Id. (quoting Chateaugay, 53 F.3d at 493). “Accordingly, the ‘presumption of Tucker Act availability must be reversed where the challenged statute, rather than burdening real or physical property, requires a direct transfer of funds’ mandated by the Government.” Id. (quoting Chateaugay, 53 F.3d at 493). “In that situation, a claim for compensation hvould entail an utterly pointless set of activities.’ ” Id. (quoting Riley, 104 F.3d at 401).

The plurality stated Duke Poiver had “explained” that “the Declaratory Judgment Act allows individuals threatened with a taking to seek a declaration of the constitutionality of the disputed governmental action before potentially uneom-pensable damages are sustained”. Id. (internal quotation marks and citation omitted). And, it noted that, in analogous situations, the Court had “assumed the lack of a compensatory remedy ... for Takings Clause violations without discussing the applicability of the Tucker Act”. Id. at 521-22, 118 S.Ct. 2131 (citing Babbitt, 519 U.S. at 243-45, 117 S.Ct. 727; Hodel v. Irving, 481 U.S. 704, 716-18, 107 S.Ct. 2076, 95 L.Ed.2d 668 (1987)). The plurality noted also that, without addressing the basis of its jurisdiction, the Court had “upheld similar statutory schemes against Takings Clause challenges”. Id. at 522, 118 S.Ct. 2131 (citing Concrete Pipe & Prods, of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U.S. 602, 641-47, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993); Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 221-28, 106 S.Ct. 1018, 89 L.Ed.2d 166 (1986)). Finally, the plurality stated that, although it was “ ‘not bound by previous exercises of jurisdiction in cases in which [the Court’s] power to act was not questioned but was passed sub silentio, neither should [it] disregard the implications of an exercise of judicial authority assumed to be proper’ in previous cases”. Id. (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 307, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)).

Therefore, based on the nature of the alleged taking, which required Eastern to make payments to a privately operated fund for retirement benefits for former coal industry workers, the plurality concluded: “the declaratory judgment and injunction sought by [Eastern] constitute an appropriate remedy under the circumstances, and ... it is within the district courts’ power to award such equitable relief’. Id.

Needless to say, the challenged governmental action in the case at hand does not merely burden real or personal property; instead, it involves TEAJF’s taking all of the interest earned on client-funds in IOLTA accounts. In that sense, it is more analogous to the challenged governmental actions in Eastern Enterprises, Chateaugay, and Riley, which involved payment of money to, or to support, a government program, than to the chal*194lenged governmental actions in Monsanto and Williamson County, which burdened real or personal property, and in which a procedure for seeking just compensation was available. Again, as Chateaugay explained, “where the challenged statute requires a person or entity to pay money to the government, it must be presumed that [the government] had no intention of providing compensation for the deprivation”. Chateaugay, 53 F.3d at 493. “For such cases, use of the [just compensation] remedy would entail an utterly pointless set of activities, as ‘[e]very dollar paid pursuant to a statute would be presumed to generate a dollar of [just] compensation’ ”. Riley, 104 F.3d at 401 (quoting Chateaugay, 53 F.3d at 493).

Restated, because the purpose of IOLTA is to take the interest generated from client-funds and use it to fund legal services for the indigent, it is obvious that the program makes no provision for payment of just compensation. If the interest earned on client-funds were available as just compensation for the clients, the very purpose of the program would be thwarted; therefore, it would defy logic, to say the least, to presume the availability of a just compensation remedy. Because there is no “reasonable, certain and adequate provision for obtaining compensation ... at the time of the taking”, Williamson County, 473 U.S. at 194, 105 S.Ct. 3108, the ripeness doctrine does not preclude declaratory or injunctive relief.12

2.

Consistent with the conclusion by the district court, the Justices of the Texas Supreme Court claim they are legislatively immune from suit for injunctive relief. The district court’s ruling was premised on its conclusion that the Justices do not possess the power to enforce compliance with the IOLTA program. Washington Legal Found,., 86 F.Supp.2d at 624.

a.

As discussed, the Justices, together with the other Appellees, conceded on the prior appeal to our court that they are subject to Appellants’ prospective injunction claims. Washington Legal Found., 94 F.3d at 1005. As also discussed, that concession is binding on them.

b.

In the alternative, and for the reasons that follow, we hold that, because the Texas Supreme Court has the power to suspend attorneys who do not comply with IOLTA rules, the Justices are not entitled to legislative immunity from this action.

Pursuant to its inherent power to regulate the practice of law in Texas, the Texas Supreme Court created the IOLTA program and its underlying rules. Texas Rules of Court — State, Rules Governing the State Bar of Texas Art. XI, § 2(D). Rule 24 addresses compliance with the *195IOLTA program: a Texas attorney is required to annually provide a written statement of compliance to TEAJF; if he fails to do so, TEAJF contacts him and attempts administratively to resolve the noncompliance; if unsuccessful, TEAJF places his name on a list of non-compliant attorneys and sends him a notice; if, within 30 days, the non-compliant attorney still refuses to file the required compliance statement, the State Bar of Texas notifies the Clerk of the Texas Supreme Court of such non-compliance; and the attorney “shall be” immediately suspended by the Clerk from the practice of law until the compliance statement is filed. See TEAJF rule 24; Washington Legal Found., 86 F.Supp.2d at 622.

Applicable here is the holding in Supreme Court of Virginia v. Consumers Union of the United States, Inc., 446 U.S. 719, 725-26, 100 S.Ct. 1967, 64 L.Ed.2d 641 (1980). There, a consumer organization brought an action against the Virginia Supreme Court and its chief justice for a declaration they had violated the First and Fourteenth Amendments by promulgating and enforcing rules prohibiting attorney advertising. The Supreme Court held the court and its chief justice, although legislatively immune from claims regarding the adoption of the challenged rules, were properly held liable in their enforcement capacities. Id. at 736, 100 S.Ct. 1967.

III.

For the foregoing reasons, we REVERSE and REMAND this case to the district court for entry, consistent with this opinion, of declaratory and injunctive relief.

REVERSED and REMANDED.

. None of the funds may belong to a for-profit corporation or partnership. 12 U.S.C. § 1832(a)(2). But see Letter from Federal Reserve Board General Counsel Michael Bradfield to Donald Middlebrooks (15 Oct. 1981), reprinted in Middlebrooks, The Interest on Trust Accounts Program: Mechanics of its Operation, 56 Fla. B.J. 115, 117 (Feb.1982) (concluding corporate funds may be held in NOW accounts if charitable organizations have exclusive right to interest generated by funds).

. When Phillips was decided, the parties agreed that the portion of then TEAJF rule 6 prohibiting attorneys from pooling clients’ funds in one account in an effort to generate net interest for the clients was not enforced. Phillips, 524 U.S. at 169, 118 S.Ct. 1925. That portion was omitted in the January 1999 revision to the TEAJF rules. TEAJF rule 6.

Consistent with the following ruling in Phillips, this rule-change does not affect our analysis concerning whether there has been a taking.

Whether client funds held in IOLTA accounts could generate net interest [for a client] is a matter of some dispute. As written [ (prior to the above-referenced January 1999 TEAJF rules-revision) ], the Texas IOLTA program requires the calculation as to net interest to be made "without regard to funds of other clients which may be held by the attorney.” [TEAJF] Rule 6. This provision would deny to an attorney the traditional practice of pooling funds of several clients in one account, a practice which might produce net interest when opening an account for each client would not. But in the District Court, petitioners [ (Appellees here) ] agreed that this portion of the rule was not to be enforced, and that an attorney could make the necessary calculation on the basis of pooled accounts. Petitioners made a similar concession during oral argument here. Tr. of Oral Arg. 13-16. We accept this concession but find that it does not avail petitioners.

Phillips, 524 U.S. at 169, 118 S.Ct. 1925 (emphasis added).

. Mazzone’s unopposed 29 May 2001 motion (post-oral argument) to dismiss his appeal was denied. See Fed. R.App. P. 42(b) (“An appeal may be dismissed on the appellant’s motion on terms agreed to by the parties or fixed by the court.”).

. Likewise, in a similar IOLTA case, a panel of the Ninth Circuit recently applied the per se analysis. Washington Legal Found, v. Legal Found, of Wash., 236 F.3d 1097, 1111 (9th Cir.2001). But, rehearing en banc was granted on 9 May 2001. Washington Legal Found, v. Legal Found. of Wash., 248 F.3d 1201 (9th Cir.2001).

. The second type listed was "where regulation denies all economically beneficial or productive use of land". Lucas, 505 U.S. at 1015, 112 S.Ct. 2886.

. The dissent at 198 maintains, erroneously, that we ignore the district court’s factual findings. Instead, we conclude, in the light of Phillips and Loretto, that they are not relevant. Pursuant to these cases, the economic impact on the owner is a non-factor in the takings analysis. See note 10 infra.

. Subsequent to oral argument, we directed the parties to file supplemental briefs on whether this case is resolved by Paulsen v. State Bar of Tex., 2001 WL 23180 (Tex.App.— Austin 11 Jan.2001), withdrawn on reh’g, 2001 WL 300142 (Tex.App. — Austin 29 Mar. 2001), interpreting Tex. Disciplinary Rules of Professional Conduct, Art. 10, § 9, Rule 1.14(a); and TEAJF rules 21 and 22. In Paulsen, an attorney appealed the State Bar's refusal to grant him an exemption from IOLTA participation. In the course of rejecting that challenge, the Texas Court of Appeals, in its original opinion, stated:

[Tjhese rules permit lawyers to make full disclosure to clients regarding the use of IOLTA accounts and clients' property interest therein.... [Ljawyers must invest client funds as directed by their clients. If a client directs his lawyer to withdraw his funds from an IOLTA account, the lawyer should do so and inform the Bar that he takes such action at his client's insistence. The IOLTA Rules provide that lawyers cannot be compelled to take any action in violation of the Disciplinary Rules. Because client funds are unquestionably client property, investing such funds in a manner contrary to a client's instructions would be a violation of the Disciplinary Rules and the lawyer's fiduciary duties.

Id. 2001 WL 23180, at *10. Obviously, the quoted language could be construed as interpreting the State Bar and TEAJF rules as making client participation in IOLTA voluntary, rather than mandatory.

In their supplemental briefs, the parties agreed, albeit for different reasons, that the original Paulsen opinion did not resolve the case at hand. In any event, subsequent to our requesting supplemental briefs, the opinion was revised to delete the above quoted language. See Paulsen, 2001 WL 300142, at *10.

.Appellees request certifying to the Texas Supreme Court the question of whether a client has any property right in a Texas IOLTA account. Phillips has answered that question in the affirmative.

. The dissent, thus, creates an anomaly by assuming at 198 there has been a “taking”, yet concluding at 199 that, because there can be no "just compensation” for it, the taking is not unconstitutional. Contrary to the dissent’s perception of the taking, in play is a "physical taking[] of tangible property”, Dissent at 203.

. For the reasons given supra, that there has been a "taking” is not contingent on whether the client would have had "net interest” without the IOLTA program. Nevertheless, Appellants posit the following: deposits in demand accounts earn some interest, albeit at a low rate; the related costs are what preclude net interest; and it is the client’s prerogative to incur those costs related to his earned interest on his principal even though, by doing so, it would probably result in a loss to the client.

Restated, Appellants urge that the earned interest must be segregated from the costs; that, notwithstanding those costs, the client has earned interest on his principal, and it is for him (his right) to decide how to use that interest. As stated, in the light of our foregoing analysis, it is not necessary to consider this contention.

. The dissent at 196-98 posits erroneously that we hold Appellees conceded Appellants were “entitled'' to equitable relief. Obviously, being “subject to” a claim is not the same as the party opposite being "entitled” to the corresponding requested relief. In any event, Appellees’ concession in the prior appeal (that they were "subject to” Appellants' prospective injunction claims) is inconsistent with their position in this appeal that equitable relief is not available, that, instead, the only remedy for an unconstitutional taking is just compensation.

. The dissent asserts at 200 that, by addressing ripeness, we have "buil[t] a straw man [and] then take[n] great pains to knock the stuffing out of him”, because Appellees "have made no such argument in this appeal”. But, as the dissent acknowledges, id., Appellees do contend Appellants cannot claim injunctive relief because they have not availed themselves of available state remedies, citing, inter alia, Williamson County. The state remedies referenced by the dissent and Appellees are not "available”. As the dissent acknowledges at 203, the Texas IOLTA program’s provision for refunds is available only for a "client whose funds are wrongly placed in IOLTA accounts”.

Nor, contrary to the dissent, do we rely on the ripeness doctrine to conclude that the claim for equitable relief is substantively viable. Dissent at 200. Instead, we hold the claim is substantively viable because there has been an unconstitutional taking of private property, and there is no mechanism for payment of just compensation.