our first piece this morning is international union of operating engineers local one thirty nine versus shuttle mr burroughs on thank you judge plowing new pleas to court in light of the sweeney versus hence the first question i would assume is what are we asking this court to do and what we're asking his court to do respectfully is to utilize its procedures to  y have the full court in one form or another either under rule forty easy or however the court would wish to proceed reverse sweeny versus pitts we think the court should do that for several reasons first this is a very important issue tension affecting hundreds of thousands of workers in the seventh circuit it is an issue that has not been de resolved by this court in that there was a five to five vote under non bank and what was a bit unusual about that vote is the five dissenting judges didn't just dissent but they dissented for the reasons set forth in judge chief judge woods had a decision which was a merits decision so there really is does not seem to be comfortably in final view of this court on the issue since  wisconsin has now passed the right to work law which is before this court that is the strict example there was there are quite a few right to work laws throughout the country as any court of appeals ruled in favor of the line of argument you know they have in your honor but they've they've really divided in a very quite even way this court is the best we can tell did divide on the merits five on one side two on the other side three didn't declare because they just voted to deny the on bond the d c circuit it was a two to one decision but interesting lee judge easterbrook that of the d c circuit judges it was one two one now it is a binding decision on the two d c circuit decision that is correct your honor as i indicated a decision that was a very close question and i think with quite a few others no others no no no others no others your honor no others your honor and in fact there are there are there were two supreme court so how do you count the sims decision in the fifth circuit this or the blow of san juan decision in the tenth circuit those decisions were not directly on the question of fourteen be a to my recollection those were the martin county decision in the six or the hardin county decision was a very different decision that dealt strictly with whether local with whether localities had the ability to pass right to work laws they did not decide in this case whether a state has an ability to pass a right to work law and i would have it's why would there be any were differences between local laws and state laws for purposes  section fourteen oh absolutely the question is whether congress if whatever right to work was can provide the question and in the hardin county or in the hard case are going county this was whether the congress intended by use of the word they didn't revisit the supreme court's last word on this issue which was justice white's unanimous decision in retail clerks so i do think that as far as the supreme court is concerned this is very much an open issue and the only two courts that have ever directly addressed the issue as whether a state can ban all papers and provide for complete free ridership as opposed to just banning membership and been the practical equivalent that it there they are of such as jews has only been decided twice in sweeney versus pence and the plumber's case where it indicated chief judge senior judge lumberyard on the second circuit was the swing vote on that case now why should most importantly why should this court revisit the issue because with all respect sweeney was wrongly decided and it's the role of this plumber's case and it's just this white strongly suggested in his opinion for the court in retail clerks one the test hartley act in a particular fourteen b which is not designed in any way to provide for complete pre writing free ride first of all the word or the wording talks about membership and as judge would say chief judge wood said paying for a dinner at the chicago club is not membership in the club  judge mikva said much the same and judge posner of this court in the whig shite case referring specifically to membership said the pope paying the cost of service like in this case for example a lawyer or an arbitrator to keep your job does as membership changes its literal meaning and indeed virtually to invert and that's a quote from from judge pos forty seven saw as an evil senator taft the author of the bill and i've read every word of the legislative history now it's quite clear on that though once it's partly condolences yes believe me i yes but i wanted to make sure there objectives was to eliminate pretty ridership more specifically not only is the wording of fourteen to be very narrow membership but none of left legislative references to fourteen be in the committee report but conference report the floor debates indicate in any way that paying for services that are rendered and no more that is no free rider was a problem well the references to fourteen b and there are many talk about compulsory union is and they talk about what that means in the legislative history and they say the clothes shop the union shop and maintenance of membership which means once you're in you can't get out till the end of the contract never did they indicate having to pay for services and not pre rock was a problem it just wasn't  sweeney but there is not one word in that legislative history that indicates anyone in congress was familiar with the detail with the fact that there were some states that had provisions that said specifically no payments can be made to a union and i should add that some states some of those laws actually said no collective bargaining at all and some of them said no hiring holes at all those are permitted what if anybody did know that in fact there was a there was a state law that said no payment of any kind to union freewriting is allowed why would congress in fourteen be have said that what the states can do is is banned voluntary agreements between labor and management that require membership they would have said what concrete states can do is they can they can ban any agreements that require payments to unions so that is to me that is you know the best answer on that and that brings us to pick which is obviously the eight hundred pound gorilla in the room because justice brennan in the court  different way and we say membership can should be construed here the court limited what nonmembers could be required to pay but that decision was not based on the wording it was not based on the legislative history except to say that they wanted to in one nine hundred forty seven eliminate free ride that analysis of a three not fourteen b was because the court thought mistakenly under a now discredited theory that justice brennan himself had adopted in hansen under the railway labor act in one nine hundred sixty one that there could be state action if an employer and a union voluntarily agree to limit hiring to union members they thought there could be state action why the push ellie versus kramer had provided for state action in it in forcing a contract and that theory is now thoroughly discredited but nonetheless the court said that under cases of constitutional avoidance such as the part of the we're going to construe day three to not reach that issue secondly the court is going to match up be an all or a with the railway labor state it's you the correct or not right and you know what the supreme court said about its factual statements with they turned out to be incorrect i was in a picture what that was retail clerks two was an opinion by justice douglas right and frankly justice  got his facts wrong on that and what the supreme court said in the current signed case and what do you think is the likely outcome of the seventh circuit decision saying the supreme court is just flat wrong in cases action in case why it got its facts wrong  wrong in case why we aren't following you know you're not asking to say to spring court was wrong and that beck stands for what it stands for the supreme court narrow in eighty three to be consistent with the railway labor act i'm asking you to respect that fully respect that with regard to what's a factual statement in a supreme court opinion that is incorrect when looking at the facts the supreme court itself said is the court having once written clear it up by pointing to what in the legislative history that you studied that would point to a different direction than the conclusion that the court had the sixty three yes we crossed first of all there is nothing there that indicates th legislature knew any knew what was in view that there were states that had banned all payments but if there were almost certainly the court there are two things almost certainly the the congress would not have railed about free ridership as it did because those provisions allow for pre ridership they wouldn't said one of our queen goals is to eliminate free ridership and to make sure it doesn't occur so i think to start with the congress the congress would have  would have not done that and secondly i think we can assume that congress would have used different wording than the term membership in the third there's a third the court did say what it meant it said we mean compulsory union is and they talked about what that meant and each time they did they talked about the close up the union shop and maintenance of membership all of which are what are considered compulsory unionism not paying for a service paying for a lawyer paying for an arbitrator so i think we can be comfortable with that and finally i do want to talk about retail clerks one because it is right on point that's i think the most telling opinion for this court if it wants to get it right in terms of what congress did in one nine hundred forty seven the court spent great to great lengths several pages to explain when the union said well we're doing is charging for services so that's not true hit that's allowed under fourteen big the court said no you're not you've made that argument up you're charging these nonmembers the same thing you're charging the members full freight and therefore that is something the states can prohibit under fourteen big if in fact the states co prevent any payment there would be no reason for justice white to spend several pages explaining that and secondly justice white said and we leave for another day another day whether under fourteen b where there is no railway labor act counterpart like the like in that that case with eighty three would leave for another day whether in fact just charging for services can be barred from the spy the states under fourteen big and that day has not yet arrived others and we request that you take steps to get it right get the issue in shape because you know we could have a right to work law on illinois too and there are many states around the country other circuits deserve the benefit of this court's re analysis not leaving it at five judges voting on the merits to say that the indiana was invalid to staying it was valid and three as far as we know anyway have taken no public position on the issue if it's at all close just as in back we think there is a constitutional question here and it cuts our way and that is the takings issue and we think that the court should proceed to that properly before us it is before you in two respects first of all even if we didn't raise the issue as it wasn't raised in sweden it is before you for constitutional avoidance real reasons you still have to reach the issue to determine if it's a serious issue whether that should that first of all if if if there are three reasons if you have both a pre enforcement facial challenge to a statute you are entitled to bring that as a as a as a as a federal case for an injunction as to if if if there if there yet and that's true here too all applications under the n r a are covered by this statute to an even more significantly williamson provides if you can't get just compensation from the state you can sue directly in and in federal court for an injunction here the only remedy we can get is an injunction why the union is not entitled to compensation unless an employer enters into an agreement with the union providing that all mccloy have to pay a representation fee if the employer were to do that here the employer would be could be prosecuted it's a crime so there is no agreement the eight agreements that have been side or contingent on a final judgment that in fact it is not a crime and the only way to get an injunction against a prosecution is directly in federal court otherwise the union isn't even entitle to just compensation why because there's no dream it that gives it the right to be there it can't have the agreement unless the state law that makes it criminal is struck down so we're covered they are in third this court and peters also made it clear that you can sue directly for an injunction when there is a private when there is a taking for a  many supreme court cases held that that statutes can have different constructions words can have different constructions even in the same statute here we're dealing with two different statutes eighty three was the court bryan walsh on behalf of the state of wisconsin so we need versus pence it is the law of the circuit and quote the three judge panel of this court is bound to follow it and no we aren't we have unlike most brief cannot change circuit wall we have the authority to overrule sweeney at so just proceed on that assumption the problem is that the unions make no attempt to argue that this court should overrule sweeny under the rather heard mr burns on make just such an argument yes that's right he argues that sweeney is incorrect and under this court's story decisis precedent merely pointing out that a previous decision was incorrect doesn't get your foot in the door under the compelling reason standard they also point out that the vote over on bank rehearing was close that also is categorically an insufficient reason under the compelling reason standard the reasons to stand by sweeney by contrast  our county it was a for she or he that a state could ban union security agreements of this kind it also is easy to apply and no factual statutory or doctrinal developments cast any doubt on its soundness what's more sweeney is correct it's holding that the national labor relations act permits states to ban union security agreements of this kind follows from two basic several propositions of law first a provision in the collective bargaining agreement that requires employees to pay their pro rata share of what are known as chargeable expenses which includes expenses related to negotiating the collective bargaining agreement administering the contract and handling grievances is a  imposes quote unquote membership within the meaning of one fifty eight three that's the holding of communication workers of america against back which builds upon general motors the second proposition is this the meaning of membership under section one fifty eight eighty three is the same meaning of membership in section one sixty four b the key provision allowing states to ban quote agreements requiring membership unquote retail clerks one held the meaning of membership in the both provisions is the same so here we have proposed fair representation agreements that would require employees pay their share of chargeable expenses which all parties agree is permissible as a matter of federal policy under one hundred one fifty eight eighty three and so it must be that it is susceptible of state prohibition under section one sixty four b so act one is plainly lawful now the unions counter with a few arguments with each of which has been considered and rejected not only by this court in sweeney but by the supreme court united states in the cases that i've mentioned and the other side has focused on first they say one membership should be given its literal definition and one sixty four p problem is this the supreme court has already held that membership is kind of a term of art in this context that the next argument is well under retail clerks one the supreme court's interpretation of membership in one sixty four b should not apply to union security devices that they call less stringent than the union security device in that case the problem there are two problems the first is as the d c circuit pointed out it's not the facts of retail court clerks one that binds it's the rationale  principle of the case in the principle is as the court put it that the connection between the two provisions is clear what the first permits as a matter of federal policy the second puts to the states under one sixty four b the second problem is that the unions are forced to take one of two positions one after back section one sixty four b does no work they actually candidly admit this in their response reply they say that there is no room for state right to work laws to do any work after back because no union six known no union security agreement that would be subject to prohibition by a state is even permitted in the first place under section one fifty eight eighty three now they do argue that back should be overruled but whether bax interpretation is strained as they say or whether it is cramped as they say or whether it does violence to the statutory tax as they say arguments that are more properly directed to the body with authority to overrule that precedent the last argument they call an alternative argument they say well even taking communication workers against back as a given the union security device in this case requires less than what a union security agreement under back could permit are two problems with this argument first we've pointed out that the language of the proposed fair representation agreements contract and processing grievances so we've we've pointed out that the language of the same in their response reply they don't respond at that point in any event we both agree that if as the unions say and we say that the union security agreement that imposed fees less than the total amount of back this is back chargeable expenses minus one penny if the union security agreement requires employees to pay that amount it's permitted under one fifty a day three because it imposes membership we all agree on that but then to require retail clerks one if it imposes membership as we agree then it imposes membership under one sixty four b moving to the  again they seem to think and we agree that sweeney vs pence the analysis in that case governance we think sweeney got this exactly right this argument is identical theory was raised in considered by the panel in that case now as a preliminary matter we think it's not properly before this court because williamson county holds its that litigants under the takings clause are required to give a state an opportunity to deny just compensation until it's done that there can't be said to be correction the the point is to give the state system an opportunity to provide compensation right whatever compensation is due whatever compensation is due they argue that they fit within the circuits two exceptions to that rule but neither applies first they argue that seeking relief in the state courts would be futile but the problem is that the wisconsin constitution has a takings clause of its own its meaning tracks that of the fifth amendment the supreme court of wisconsin has held that that takings clause a self executing that where a takings plaintiff lacks a cause of action under the statutes of the wisconsin legislature he or she may bring a takings claim directly under wisconsin constitution's takings clause and that no sovereign immunity defense would bar relief in that case the second exception applies to pre enforcement facial challenges problem here is that as this court pointed out in daniels the facial standard for a pre enforcement taking challenges that a point of must show that there are no set of circumstances that under which the law can be constitutionally applied and that near an accident of the challenge law deprives them of all or substantially all economically viable use of their property this is an uphill battle as the supreme court put it in keystone they would have to show that actually one of the to be fair representation with a combination of the two have deprived their representation of services of all of their economically valuable  rejected for the reasons given sweeney plus several other reasons the first most straightforward point is that actually won the only want challenge here wisconsin's right to work law makes no demand of union services at all it prohibits unions from forcibly collecting money from other people the source of the obligation that the unions complain of it's section nine of the national labor relations act which the supreme court has held requires an exclusive representative to the second point is that even if this lawsuit were understood as a challenge to the duty of fair representation or to the right to work provision or the two in combination he would fare no better because the supreme court has long held that when it's a sophisticated economic entity except a special government privilege to which is attached rational and legitimate conditions that actor cannot later be heard to argue that acceptance of those conditions amounts to a regulatory taking this is the holding of monsanto which has been recyclers the privilege here a contract between a union and an employer setting up a union security clause is just a contract between a union and an employer national labor relations act shows that with few exceptions no one can your fear with that contract it doesn't require the contract it doesn't enable the contract it's just a contract to point i think the privilege here is the exclusive representation privilege which the supreme court has likened to a legislative power when a union is certified as an exclusive bargaining representative the individual employees in the bargain unit lose their rights to negotiate terms and conditions of employment with their employer at the same time that's a sense in which contract is limited but the my point is not that there are no limitations of contract rights in the national labor relations it's that union security clauses are in the first instance and predominately a matter of contract they are created by government they are imposed on anybody b agree that there are matter of contract once that when the parties are proposing to negotiate them but this report said repeatedly that there are the right to enter into such a clause is conferred as a matter of legislative great's i don't think this is a right that a party ordinarily has under the common law to force another person to pay it money to give that entity you know look like you know there it's it's very difficult on ramp and what's going on here before the national labor relations act what would happen was that the employer would agree to pay the amount of money directly to the the national labor relations act forbade direct payments from employers to unions and that's what set off the request for union security clauses where you get complex and historically contingent sequence but i find it very hard to pretend that this is some kind of privilege created by a legislature one needs to tackle it as a contract case even accepting that your hon or i still think that the exclusive representation power is one conferred by the legislature that's right subject to what the supreme court still called constitutional type limitations you can't use the exclusive representation privilege to go out of your way to discriminate against a member of the bargaining unit because otherwise there would constitutional questions would arise that's what the supreme court said in steel in one nine hundred forty seven and so i think the duty of fair representation and this one sixty four statutory limitation on the conditioned right to enter into union security agreements are both parts of the bargain that any would be exclusive representative knowingly except when that entity elects to become an exclusive represent another problem is that the unions could not even begin to show that act warner due to the duty of fair representation or both deprives them of all or substantially all economically viable use of their services they say that they spent considerable expenses and bargaining and in processing grievances i'll take one of the time the problem with the argument that they are necessarily better if benefiting all employees in the bargaining unit by bargaining is that there are many in a bargaining unit who may object to the unions existence in the first place they may prefer to not negotiate their own terms and then they'd be positively harmed by the bargaining positions that the union takes in negotiations supposin employees would prefer to be paid according to merit whereas the union would prefer a seniority pay system that employees harmed by the bargaining position of the union secondly on grievances an important point to understand in assessing their takings claim is that this is  they have to show that the government is making a demand of their services in a particular way i understand that unions have historically provided a certain kind of or certain level of grievance representation that has been in some cases generous but the question is does the law require them to provide that the answer is no they have a duty to administer any grievance process system that they adopt in a way that does not discriminate against members of the bargaining unit that doesn't act in bad faith or arbitrarily toward members of the bargaining unit but it doesn't require them to adopt the most expensive system they can imagine it could be a paper paper you system it could be it could be a non exclusive system as the unions actually conceded in their response reply so the argument that the federal government through the net and laura is requiring them to take up a grievance and take it all the way through arbitration when a nonmember some requests is just flat wrong it's also wrong that the unions have to take up the representation when they don't think it would benefit them or the bargaining unit as a whole they know they owe no individual duty to the employees as such they owed a duty to the bargaining unit signed on to their rationale which is that a law that imposes a general obligation to perform an act that may benefit another but that does not target specific or identifiable tangible interests and property and is indifferent actually as to how the regulated entity chooses to comply with the law cannot be said to impose the taking is just of prior put it when it's a general liability and not to the government but to third parties the court simply draws the line and says that does not violate the interests of the heart of the fifth amendment but that's exactly what the duty of fair representation insists it's an imposition on unions to take a general act with respect to employees the law is indifferent as to what funds they use to perform that act whether it's dues money whether it's money they phrase for the money they've invested so it can't be said that that duty targets a specific an identifiable interest in private property and regarding the private use takings theory we pointed out that that's not right either but even if this court were to conclude that it were right the problem is for the unions that under the public use requirement the court has basically analogized it to a rational basis test and so as we need help actually won a state right to work all that's materially identical the act one trial first retail clerks one did not say membership is the same and both statutes they said where when that were full dues payments involved for nonmembers the two statutes over lap but they said they were leaving open the question of whether that would be true in other circumstances second there are facts in the in that it's we didn't just provide the union and in the fair reparatory mit the contingent one that signed with eight employers depending on this court's ruling didn't just provide for full representation fees they had a specific some it was one percent of the monthly dues plus seven hundred fifty which is less than the back dues would otherwise be that's irrelevant to whether they could reach the of the federal issuance we need vs pence fourth and most importantly with regard to taking this law the state is confusing what the feds require and what the state requires the duty of fair rep is comes from federal law when the state is going to take private property what the state is required to do with the state has to accept the background principles from an independent source here that's federal law well the state is doing is saying this service they couldn't the unions have to provide you can't charge for it that's no different than with the raising growers there was a law since  seven that required that raisins could be required a portion of the crop to be sold for free the supreme court struck that down if you told the gas station owner that he had to provide free gas to certain people that would be a taking this is no different and finally duty of fair rep exclusive representation this all stems from the back of the site but it is not true that the unions can just walk away from a grievance procedure not only to because of the d f contract as judge easterbrook said and the decisions of each arbitrator become part of the contract so it is built into the structure that one has to have exclusive representation th