a nd case for this morning is money against the illinois educational association and i'm going to take the liberty of inviting counsel to the extent they can between this case and the rd case janice against american federation that has been taken in violation of another's constitutional rights must be returned even if the defendant took the property in good faith so that mean all property or does that mean money it means all property whether tangible or personal property or money and the cases are consistent on this point so are there no statutes of limitation on a fly of course there could be other defenses like our claim is that a defendant's good world recognizes for a claim to obtain money from somebody as equitable versus such a claim being a claim for damages the court the court starting with the wal mart case or all kinds of cases i can think of mcfadden case where the court has been careful not to over extend the the realm of equity into functionally claims for dollars that's right the way the court's drawn the distinction in recent cases like mountain i'll just ask whether the plaintiff is seeking to impose an equitable lien on a specific account right and you don't have a specific account here you just say you can go against the union's general treasury treasury is a specific account at joe union puts it's money it's not like it's not like you know the lawyers trust fund or it's not like a segregated account say on  wrist so that a company might run for the for a one k i mean you can call it a separate account in that it's there is not mine but is that what the court means by separate account in your view there has to be a specific account that you're seeking to impose an equitable lien on how do you know any of her of your clients money is in that account that's where the money goes when the union takes it in but it's already been spent that th the specific dollars may very well have been spent but that does not deprive our clients of a remedy and why it will united states against arms or the taxes were paid into the u s treasury and they still had to be repaid to ms windsor even though the taxes  collected in good faith reliance on a statute that had not yet been declared unconstitutional so the case is no different from any of the other myriad cases where criminal fines have been collected now you're in yours all of your cases involve governmental entities holding the money but of course the government isn't your defendant greg you're suing a private party the union for money because the state of illinois took that money out of your client's check that's right the state of illinois authorized the union to take the money from it and then you know will be going in the state of illinois took the money out and then they gave it to the union public employer and the union both participated in this it was done pursuant to it was done pursuant to an agreement exactly but i'm saying that the actual party who took the money out was the state of illinois and then they gave it to the union i don't agree with that characterization or with respect the school district is not the state of illinois but the school district entered into the school district entered into a collective bargaining agreement with the union and that the public entity is the one that gives the check to the recipient the public entity pays the check the public entity and the public enemies takes the money out of the check for taxes for health insurance and in this instance money that it's no longer taking of course t generous ruling that it took the money out but you're going after somebody who received the money but the union agreed with the school district to have an agency shop arrangement in the collective bargaining agreement amongst the collective bargaining agreement that established the agency shot you know i understand you have a question yes i tunes thank you during the course of her employment she had been passed over for  in she's not willing to concede that then isn't she conceding that she's not really asking for repayment of her but really damages for what she thinks is a constitutional violation no so surely you would at a minimum you would need a hearing to find out over the years did she get any pay raises that the union negotiated was she represented ever in a grievance some catalog of what benefits that she got which she would then have to tender back to the union before the union would have to tender to her what was left over from the agency fees unlawfully in your view collected judgement with respect i don't think court to make that type of inquiry era what interest you see as it says that janice specifically allows public employees to withhold financial support from the union even if they receive benefits from the absolutely but that you are asking janice doesn't address your issue as the supreme court to my regret from time to time did they say you know we're sending this back to the lower courts to take it from here and if it really actually writes quite a bit in the future tense justice alito has opinions says state and public sector units it doesn't resolve it your way or her against you we agree it does not have to open and i say yes and i'm saying if you are using as i believe joe joe drover was trying to explore in if you have a pure equitable claim for restitution you are on winding what happened in the past that's right but and so there are benefits whether she wanted them or not that she received from the union's efforts whether it's the hypothetical and obviously this may not apply at all to ms mooney you know but hypothetical processing of the grievance or hours provisions or pay raises or something and unless she didn't want to pay raises now mr genest didn't want to pay raises mr jenna said the state of illinois is bankrupt and you know don't give me the money fine so he can give the pay raises back to the union before he gets anything that the union might give him now it's quite possible our client receives some type of benefit from collective bargaining it's quite possible the proposed class members receive some type about it from the union but judge with the way i would answer your honor's question is let's suppose the union ignored janice and kept taking this money is money after the supreme court's decision if ms money sued the union to recover that post janice money the union could not possibly claim that it could be docked from that money whatever benefits it thought  course you know if the court that's not what they did they stopped immediately course not to me but if they hadn't ms money would be entitled to one hundred percent of what the union took there would be no offset for potential benefits that union but you wouldn't  in equity at that point i believe we would be in equity because she'd be seeking recovery of the money the property that was taken in violation of our constitutional rights there would not be an offset because janice would not permit it the constant i don't know  holding that the st amendment rights of people who do not wish to contribute in any way to the union are more important and take precedence over anything else that's going on they take precedence over whatever the union is doing they take precedence over whatever the employer is doing people do not have to subsidize organizations with whom they disagree that's what janice hold right and that even trumps equitable settle i know that i'm not sure i don't see that anywhere in the opinion but your honor i think your honor agreed with my suggestion that if the union were to take money from his movies paycheck post yes they would have to return  i'm saying to damages as a judge's action because the money goes into the union's general treasury but ms money would be seeking to recover that money that was taken and should be seeking to impose an extra belief but more importantly we don't need to show that the recovery we're trying to figure out how this different in a hit against the union for requiring her to wear to work a button supporting a particular political candidate for which she would have a damages cle because in that hypothetical the union hasn't taken her money or property the union has simply injure her and if the union forced her to do that in good faith and reliance on the statute or some supreme court ruling that had not yet been repudiated the union might very well have a good faith to an action for money damages because that's consistent with the holdings of other courts of appeals that have allowed private parties in section one thousand eight hundred and three litigation to assert good it's to an action for damages the difference here is the union took property the long star and good faith is never a defense to a restitution or a remedy whether we call the restitution legal or equitable it doesn't matter if a defendant takes property in violation of another person's constitutional rights good faith will never allow them to keep that property when the point of sues for it's return now it is talking about money to mail money or property either want but priority is different if you look at the entire line is cases an equitable restitution if you take my favorite monet painting i have to give it you know it needs to go back to the right place but money poses unique problems in this instance because a dollars a dollar you know it gets spent it's not there anymore it's not in an identifiable account that the general treasury isn't an identifiable account but that's never and that was paid to a private party under a statute that was declared unconstitutional nine years later and the private entity that received the victims restitution had to pay it back so not all the cases involved government planets most of them do not claim for money damages but the white opinion never go so far as to hold that the defendant could have kept the cattle in the tractor that had seized and revile suppose the cattle had died or suppose the finding burned up in a warehouse thank you your honor good morning consistent with the court's observation that of the overlap between the two cases what i'd like to do with the court's permission to start with a few more general comments about  good faith defense generally and then turned to do a couple of specific technical arguments ok the real issue here is whether private parties can be held liable under forty at the time of the actions that they they took so of course mr mitchell's point is even with all of that if in hindsight it turns out you shouldn't have gotten the money you have  couple actually six have after after several years after abood both both they the two statutes that issue this morning were enacted shortly after abood both of them setting up a system what i'd call a system of exchange in a way but  system for funding of collective bargaining by public employee representatives and they the system was such that even if you chose not to join the union you were required to contribute your fair share of the unions costs of collective bargaining and in exchange you got union representative representation both at the bargaining table and bargaining that that the supreme court threw it away that was that there in the supreme court the supreme court said that you can't do that anymore right admitted but if we're looking at this from the point of view of an equitable remedy which is mr mitchell's way of looking at it the fact that the supreme court has now said you can't do that anymore doesn't change the fact that this was a system that was authorized by law at the time the events took place and even more important it does not change the fact that the plaintiff like all the other members of the bargaining unit whether they were union members or not receive the benefit of union representation and the  our briefs so i was going to ask if you could talk a little bit about retroactivity because that theme weaves through the arguments in these two cases and i'd like you to tell me  what your theory is whether the janice opinion addresses you know in in some way changes the fact that what you were doing at the time was authorized by law that i would say two things on retroactivity st of all as i think your honor indicated in the question earlier there is at the minimum significant doubt as to whether the janice ruling was in fact applied to the parties before it as opposed to simply stating a new rule of law and remanded to the lower courts for them to deal with the consequences having said that however our real argument here is even if janice is deemed to have been retroactive that doesn't change the fact that as justice stevens i believe it was justice souter i believe pointed out in the james beam case and as the court also mentioned the reynolds will casket case finding that that there is retroactive application for a judicial holding is only the st step in the process and that there's even after you determined that that the that the new rule applies backwards so to speak you still have an issue of remedy and that's what the court said is that there will be cases not all cases but some cases in which there is an yes it would there be a point when this litigation started and now there's a speaking challenge but it took some time to get to brood and jan would it be i don't want to call it a compromise but something that maybe there should have been an escrow account set up when this challenge was obviously at hand and you had it in keep collecting and paying it out to at least put it aside in case something happened where they're going to have to pay it back well i would i appreciate question judge mannion but i would say no for several reasons st of all because at the time up until the janice ruling came down abboud was the law of the land and people were entitled to to order their their affairs according to boot the nd thing i would say is that simply saying well you could put it in escrow i mean that has serious consequences but because the union like any nonprofit organization has a budget it has money that comes in and money that is spent for representation if the union were to say well all this money that's come from fair share fee payers we are we are going to put it in an escrow account where we can't touch it that means one of two things either the union has to charge its its members more for it another way of putting that is that the union should have ordered its affairs in reliance on the non binding dicta in harris and knox and some of the other supreme court opinions rather than following the rule of bood which at the time was controlling law and i think that really brings us to the fundamental question here which is whether private citizens are entitled to rely on the law as it exists or whether they are required to try and speculate on what the supreme court is likely to say next and the supreme court has very clearly said in its directions to the lower courts that the lower courts if there is a supreme court decision it's on point but that there are more recent decisions that have cast some doubt on it that the lower courts should follow the directly on point decision and i can't see any reason why private parties who are defendants in a little so a lawsuit should be expected to to place more reliance or less reliance on  unsettled you know binding supreme court precedent than than the lower court or our own it would put private parties as the court has observed it would drive a wedge between the position of the school district or the state or whoever the entity is we've got a state in one of these cases and school district and the other like ms money can't sue the school district because qualified immunity would clearly protect your school district and so what she's done is she's looked at the for the other party to the collective bargaining agreement in the court drew a distinction which is being challenged here as whether it's meaningful or not between an immunity and a defense seemed open to giving a defense hasn't definitively ruled of course it seemed open to giving a defense but not immunity yes and judge would let me let me just go back to what i think is the the real the the real starting point for for looking at at this notion of the good faith the met defense and that is the court's decision in lugar versus edmonson oil because that's the case where the court  the private defendants who made use of seemingly valid laws could be subject to liability if the law is subsequently held to be unconstitutional and that's exactly the situation we have here and the court suggested  three in the luger case not only suggests that not only identified this problem recognized that it was a problem but suggested how the problem should be dealt with should be dealt with by establishing an affirmative defense similar to what what you know what we had for government officials with qualified immunity now this is of course dicta and then we get to why it st is coal where the question really is should the problem be solved by extending qualified immunity to private party defendants and the court said no but for a very particular reason it looked at the ep at  history of immunities and defenses at the common wall and at least five judges of the court those who joined the two separate opinions specifically found that at common law there was a basis for a good faith defense for private defendants that in reliance on a presumptively valid statute and the other four ready justices assumed that position for the sake of argument so the entire court either either found or assumed that there was such a private party defense that common law but the reality no distinction how much of your argument depends on characterizing this as a suit for damages as opposed to restitution i think we win either way your honor i think it clearly is a suit for damages but if it's a suit same in equity and i think the the lemon case which i mentioned earlier is is directly on point the eight circuits case in the prison fellowship ministries both of these were cases in which a state statute authorized providing funding to a religious organization and in both cases the statutes were struck down by the courts as unconstitutional mclaws grounds and the courts nonetheless held that the organizations the religious organizations that had received the money were not required to pay it back in fact in the lemon case the supreme court went even further than that and said money that hadn't yet been paid up the state could go ahead and still pay out this money to the parochial schools for services that they had already r in reliance on the statute so you know i think the these cases stand for the proposition that there are really two reasons why if we're in equitable restitution we still win one is the benefit theory that we talked about a little earlier and the other one is the reliance on existing law which if you see and in both of these cases all right thank you very much we have no quarrel with mr breasts claimed the good bands should exist we have no quarrel with his claim that a good faith defense could protect his client from an action for money damages we tried to sue to recover for emotional distress or  holdings of the other courts of appeals on the good faith defense would if this court were to follow them protect the union from that type of law but mr west hasn't answered the claim are making today which is that even with a good faith  offended never can use good faith as an excuse to keep property or money that it took in good faith but in violation of an a in no area of law is allowed not a common law  criminal law or fines that are paid under an unconstitutional statute have to be repaid not in tax law united states against windsor the i r s had to refund the money that it collected even though the i r s agents would have qualified immunity and action for money damages rather wonderful took at what point when you say taken what point does that start to be a problem but within the statute of limitations of course we're not saying that we can go back forty years to recover this money statute of limitations will protect the union any money that it took beyond why is there a statute of limitations that applies to an equitable claim under under section ninety three dollars their stature going to tensions would apply to all right well thank you very much thank you we will continue on the same theme theme and variations if you like music