US Supreme Court takes up constitutionality of special union fees

Listen to this article

The justices of the U.S. Supreme Court appear poised to issue a split decision in a case considering what notice non-union state workers must receive before being assessed a special fee that will fund political efforts. But a preliminary issue may keep the Court from even reaching the merits of the case.

The case of Knox v. Service Employees International Union Local 1000 involves California state employees who, as a condition of employment, must either join the union or pay the union an “agency fee” for its representation on their behalf. Each year, pursuant to the 1986 Supreme Court ruling in Chicago Teachers Union v. Hudson (475 U.S. 292),  the union sends out a notice to all members explaining how the agency fee fund will be used. Non-union members may object to portions of the agency fee being used for non-chargeable expenditures – meaning expenditures for things other than the union’s representational function – and pay only the chargeable portion of the agency fee.

In 2005, the union assessed a special fee to respond to anti-union petitions in the upcoming state election. The union sent a letter to employees informing them of the special fee and the fee was collected from them.

Non-union members sued the union, claiming the special assessment violated their First, Fifth and Fourteenth Amendment rights.

The district court granted summary judgment in favor of the employees and awarded them nominal damages of $1 apiece.

A divided 9th Circuit reversed, holding that the union satisfied the Hudson requirement with its notice to employees before the fee was taken.

The employees sought and were granted certiorari by the U.S. Supreme Court.

Three months later, the union sent all non-union members who objected to the fee a letter informing them that their fees would be refunded. Each letter contained a $1 bill, representing the nominal damages that were awarded by the district court. The union then petitioned the Supreme Court to dismiss the case as moot, since the district court’s ordered relief had been granted. The Court agreed to consider the mootness issue with the merits of the case.

Moot issue?

At oral arguments last week, William Young, staff attorney for the National Right to Work Legal Defense Foundation in Springfield, Va., who represented the employees, was peppered with questions on the mootness issue right out of the gate, giving a strong indication that the Court may not get to the merits.

“This case is about a completed episode,” said Justice Ruth Bader Ginsburg, noting that the funds were refunded and the dollar bills had been mailed.

“It is also about the effect of that judgment for future activities, and how that will affect the way SEIU operates,” Young said.

“Are you saying that it’s capable of repetition, yet aiding review?” asked Justice Anthony Kennedy. “I’m not quite sure.”

Young argued that the way notice periods are set up, they would always expire before employees would have an opportunity to seek appellate relief from the court.

“Cases like this should not become moot, because it is capable of repetition and would be evading review simply by the mere limits of how long these policies and procedures are in effect,” Young said.

When Young got to the merits of the case – with the help of Chief Justice John Roberts, who stopped the mootness questioning and urged Young to move on to the other issues – he emphasized that the reason notice should be required before a special assessment is that “these people may not trust the union.”

Justice Stephen Breyer noted that even if the Court held that a special assessment requires a special notice – including where the fee will benefit non-union employees – the union is still free to take the annual assessment it already collected on an annual basis and apply it all to non-chargeable activities without an additional notice.

“That seems totally backwards,” Breyer said.

Justice Antonin Scalia took issue with Breyer’s classification.

“Do you concede that it is going to make them better off?” Scalia asked Young before he could respond to Breyer’s point. “At the very least, [non-union employees] have to make an interest-free loan to the union until such time as they can challenge it.”

“[What if] they have 20 bishops and the 14 most honest people in the United States, and they have all absolutely guaranteed and everybody agrees that this goes to chargeable activity,” Breyer said, clearly irritated by Scalia’s interruption of his point.

“I assume we wouldn’t need a Hudson notice at all, bishops affirmed all of these things, right?” Scalia said.

‘Partisan and ideological objections?’

Jeremiah Collins, member of the Washington-based firm Bredhoff & Kaiser, argued on the union’s behalf that “Justice Ginsburg is absolutely correct” that the case was moot the minute the union mailed the non-member the letters and dollars.

“Why did you give up once the case was granted here?” asked Roberts. “You didn’t consider that until the case came before this Court?”

Collins said that once cert was granted, the union officers “came to the realization that they have no stake in the procedures that are at issue here.”

“What is this local and what will the other locals do in the future when special assessments are made?” asked Justice Samuel Alito. “Will they provide notice or will they go back to the old system?”

“There were no allegations of an ongoing practice,” Collins said. “There was no request for declaratory or injunctive relief.”

Roberts cut to the heart of the plaintiffs’ argument.

“The whole point of your friend’s argument with the Hudson notice is they want people to understand what’s happening with their union money,” Roberts said. “If the case is not moot and if they prevail, they will have a right to be heard on what the notice should say. And that will make a difference in how many people opt out or how many people don’t.”

Collins disagreed. “The district court required a certain kind of notice to be given,” in its order, Collins said, adding that the plaintiffs in the case are “looking a gift horse in the mouth.”

Alito went back to the case’s merits.

“What if the money is going to be used for an election campaign?” Alito asked. “[T]he non-members may have very strong partisan and ideological objections” and be without the ability to object to “what would be at a minimum an interest-free loan for the purposes of influencing an election.”

Collins said it would depend on the notice given in Alito’s hypothetical, and whether the funded activity “could not be anticipated reasonably by the person who got the notice.”

A decision is expected before the term concludes this summer.