Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-01053/USCOURTS-ca10-89-01053-0/pdf.json

Nature of Suit Code: 740
Nature of Suit: Railway Labor Act
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

PILOTS AGAINST ILLEGAL DUES (PAID), et al., ) 

) 

Plaintiffs-Appellants, ) 

) 

v. ) 

) 

AIR LINE PILOTS ASSOCIATION (ALPA), ) 

) 

Defendant-Appellee. ) 

FILED 

United States Court of Appeals 

Tenth Circuit 

JUL 111991 

.ROBERT L. HOECKER 

Clerk 

No. 89-1053 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. No. 86-Z-410) 

Franklin A. Nachman, Semple & Jackson, P.C., Denver, Co., (Martin 

Semple and Dwight L. Pringle, of the same firm, with him on the 

brief), for plaintiffs-appellants. 

Jerry D. Anker, Air Line Pilots Association, Washington, D.C., 

(Felice Busto, ALPA, Washington, D.C., and Donald D'Antuono, 

Tallmadge, Tallmadge, Wallace & Hahn, P.C., Denver, Co., with him 

on the brief) for defendant-appellee. 

Before McKAY and ANDERSON, Circuit Judges, and BROWN, District 

Judge.* 

BROWN, District Judge. 

* The Honorable Wesley E. Brown, United States District Senior 

Judge for the District of Kansas, sitting by designation. 

Appellate Case: 89-1053 Document: 01019293731 Date Filed: 07/11/1991 Page: 1 
Plaintiff-appellants are twenty-one nonunion pilots employed 

by United Airlines. The defendant-appellee Air Line Pilots 

Association (ALPA) is the exclusive bargaining representative of 

all United pilots. In 1983, United Airlines and ALPA entered into 

an "agency shop" arrangement, under which United pilots were 

required either to become ALPA members or to pay ALPA an agency fee 

for expenses incurred in representing the pilots. Such 

arrangements are authorized by Section 2, Eleventh of the Railway 

Labor Act (RLA), 45 u.s.c. § 152. 

The plaintiffs brought this action alleging that ALPA violated 

the RLA and plaintiffs' constitutional rights in 1983 and 

subsequent years by using agency shop fees for purposes not 

"germane to collective bargaining." Plaintiffs also alleged that 

ALPA was impermissibly charging them for expenses incurred in 

activities at other airlines. Furthermore, the plaintiffs sought 

relief for what they contended were inadequate procedures for 

challenging ALPA's determination of the agency fees owed by nonmembers. Judgment was entered for the defendants after a trial to 

the district court. The district court found that ALPA had rebated 

to the plaintiffs the portion of agency fees that were used for 

purposes not germane to collective bargaining. The district court 

also found that ALPA had established adequate procedures to allow 

challenges to agency fees. The court found the plaintiffs' claims 

concerning the rebate for 1983 to be barred by the applicable 

statute of limitations. Finally, the court dismissed plaintiffs' 

constitutional claims under 42 U.s. c. § 1983. Appellants contended 

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in arguments before this court that the district court committed 

several errors. We held our opinion in this matter in abeyance 

pending the Supreme Court's decision in Lehnert v. Ferris Faculty 

Association, 59 U.S.L.W. 4544 (May 30, 1991) because the Lehnert 

case raised several issues nearly identical to those raised by 

appellants. 

a. Union Expenditures Generally Under Section 2, Eleventh. 

We first examine the federal law concerning the authority of 

a union to charge expenditures to dissenting employees under the 

Railway Labor Act. The agency shop1 was first given a stamp of 

approval by Congress in 1951 when the RLA was amended to permit 

such arrangements. The 1951 amendment was an attempt to deal with 

"free riders"--employees who benefitted from a union's representation but did not contribute to the costs of that representation. 

The constitutionality of this amendment was upheld in Railway 

Employees' Department v. Hanson, 351 u.s. 225, 76 S.Ct. 714, 100 

L.Ed. 1112 (1956), in which the Supreme Court rejected the 

contention that the amendment's effect of forcing contributions 

from unwilling persons was a violation of the First Amendment or 

the Due Process Clause of the Fifth Amendment. The Court found it 

was within Congress' power to require financial support for a 

1 An "agency shop" agreement generally provides that while 

employees are not required to join the union, they are required to 

pay the union an amount equal to union dues. A "union shop" 

agreement provides that no one will be employed who does not join 

the union within a short time after being hired. See Oil Workers v. 

Mobil Oil Corporation, 426 U.S. 407, 409 n.1, 96 S.Ct. 2140, 48 

L.Ed.2d 736 (1976). As far as the issues raised in this case are 

concerned, there is no material difference between the two. 

3 

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collective bargaining agent from those who benefitted from the work 

of the agent. Hanson, 351 u.s. 225, 238. The Court observed that 

"[t)he financial support required relates to the work of the 

union in the realm of collective bargaining." Id. at 235. The 

court noted, however, that "[i]f 'assessments' are in fact imposed 

for purposes not germane to collective bargaining, a different 

problem would be presented." Id. In International Association of 

Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 

(1961), the Supreme Court held that the RLA did not authorize a 

union to use agency fees from objecting employees to support 

political candidates. The Court stated that Congress did not 

intend to vest the unions with unlimited power to spend exacted 

money. Although the court did not set forth a standard to 

distinguish between proper and improper uses of agency fees, it 

stated: 

Its use to support candidates for public 

office, and advance political programs, is not 

a use which helps defray the expenses of the 

negotiation or administration of collective 

agreements, or the expenses entailed in the 

adjustment of grievances and disputes. In 

other words, it is a use which falls clearly 

outside the reasons advanced by the unions and 

accepted by Congress why authority to make 

union-shop agreements was justified. 

Street, 367 u.s. at 768. In Railway Clerks v. Allen, 373 u.s. 113, 

83 S.Ct. 1158, 10 L.Ed.2d 235 (1963), the Court again distinguished 

between political expenditures and those expenditures that were 

"germane to collective bargaining." 

More recently, in Ellis v. Railway Clerks, 466 U.S. 435, 104 

s.ct. 1883, 80 L.Ed.2d 428 (1984), the Court addressed the issue of 

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whether a union could charge objecting employees for expenses that 

fell in the grey area between expenses clearly germane to collective bargaining and expenditures that are clearly political. The 

Court stated that: 

[T)he test must be whether the challenged 

expenditures are necessarily or reasonably 

incurred for the purpose of performing the 

duties of an exclusive representative of the 

employees in dealing with the employer on 

labor-management issues. Under this standard, 

objecting employees may be compelled to pay 

their fair share of not only the direct costs 

of negotiating and administering a collectivebargaining contract and of settling grievances 

and disputes, but also the expenses of 

activities or undertakings normally or 

reasonably employed to implement or effectuate 

the duties of the union as exclusive 

representative of the employees in the 

bargaining unit. 

Ellis, 466 u.s. at 448. 

In Lehnert v. Ferris Faculty Association, 59 U.S.L.W. 4546 

(May 30, 1991), a case dealing with a public sector union, the 

Court declared that in determining what expenses a union may 

constitutionally charge dissenting members, Hanson and Street and 

their progeny teach that chargeable activities must (1) be 

"germane" to collective bargaining activity; (2) be justified by 

the government's vital policy interest in labor peace and avoiding 

"free riders"; and (3) not significantly add to the burdening of 

free speech that is inherent in the allowance of an agency or union 

shop. Id. at 4547. These same characteristics presumably are 

required for chargeable expenses under the Railway Labor Act, since 

the Court has consistently interpreted the RLA to avoid serious 

doubt of the statute's constitutionality. Street, 367 U.S. at 749. 

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b. Expenditures by ALPA. 

Appellants first contend that the district court applied an 

erroneous standard of law to determine which of ALPA' s expenditures 

were germane to collective bargaining. Appellants believe that the 

district court gave the union's determination of what was germane 

and what was not germane "undue deference." We disagree. In 

findings made from the bench, the district court clearly cited the 

Ellis case and recognized that the governing standard was whether 

the union's expenditures were shown to be germane to collective 

bargaining. Tr. Vol.XIII at 13. The court recognized that the 

burden of proving that the expenditures were germane was on the 

defendant. Id. Appellant suggests that the court's remark at one 

point that "the court merely has to look at this to see whether the 

union used good judgment, .•. " Id. at 15, shows that the court 

applied an erroneous standard of law. Perhaps this particular 

comment was intended to reflect that the nature of the free rider 

problem requires that the union "have a certain flexibility in its 

use of compelled funds." Ellis, 466 U.S. at 456. At any rate, the 

balance of the court's analysis shows that the court generally 

applied the proper standard and determined that the expenditures in 

question were germane to ALPA's duties as a collective bargaining 

agent. 2 We cannot agree that the district court gave undue 

deference to ALPA's determination of what was germane and what was 

not germane. 

2 As set forth on Pp. 10-14, infra, we find that the court 

erroneously determined that all litigation expenses could be 

charged to the plaintiffs. 

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In addition to challenging the standard applied by the 

district court, appellants challenge the court's findings that the 

various expenses incurred by the union were germane to collective 

bargaining. In particular, appellants object to the court's 

finding that ALPA could properly charge agency fee payers at United 

for expenses incurred by ALPA in representing other airlines. In 

calculating the amount of agency fee that each of the plaintiffs 

owed, ALPA did not attempt to determine what expenses it incurred 

on behalf of each airline. Instead, ALPA calculated the total 

amount of its chargeable expenses at all airlines and then divided 

that amount by the total number of employees at all of the 

airlines. Thus, the agency fee was determined by combining and 

averaging expenses from all bargaining units rather than by 

charging employees in each specific bargaining unit only for 

expenses incurred representing that unit. Appellants argue that 

the Supreme Court's decision in Ellis made clear that expenses 

incurred by a union outside of a particular bargaining unit are not 

considered germane to collective bargaining as far as the employees 

in that unit are concerned. 

Whatever ambiguity Ellis created with regard to expenses 

incurred by a union outside of a particular bargaining unit was 

cleared up by the Court in Lehnert. Like the plaintiffs here, the 

plaintiffs in Lehnert objected to helping pay for union expenditures outside of their bargaining unit because those expenses did 

not produce a direct benefit to them. The Lehnert Court concluded 

that "a local bargaining representative may charge objecting 

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employees for their pro rata share of the costs associated with 

otherwise chargeable activities of its state and national affiliates, even if those activities were not performed for the direct 

benefit of the objecting employees bargaining unit." Lehnert, 59 

u.s.L.W. at 4548. The Court declared that it had never interpreted 

the test for germane expenses to require a direct relationship 

between the expense at issue and some tangible benefit to the 

dissenter's bargaining unit and that to do so would "ignore the 

unified-membership structure under which so many unions 

operate." Id. The Court cautioned that this did not give a local 

union carte blanche to charge dissenters for activities wholly 

unrelated to the employees in their unit, such as a contribution in 

the nature of a charitable donation from a local union to its 

parent. The only connection required is that "there must be some 

indication that the payment is for services that may ultimately 

enure to the benefit of the members of the local union by virtue of 

their membership in the parent organization." Id. at 4549. This 

is so because "[t)he essence of the affiliation relationship is the 

notion that the parent will bring to bear its often considerable 

economic, political, and informational resources when the local is 

in need of them. Consequently, that part of a local's affiliation 

fee which contributes to the pool of resources potentially available to the local is assessed for the bargaining unit's protection, 

even if it is not actually expended on that unit in any particular 

membership year." Id. at 4548. 

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When these standards are applied to the facts of this case, it 

is clear to us that ALPA properly charged the plaintiffs for 

negotiating and administrative expenses incurred outside of the 

united bargaining unit. The district court found that it was 

reasonable for ALPA to divide its negotiation costs among all of 

the employees it represents because of the effect negotiations at 

one airline have upon others. The court found persuasive the 

argument that when certain terms are negotiated at one airline they 

very quickly become incorporated into agreements with other 

airlines. Although the plaintiffs vigorously contested this 

assertion, the court was persuaded otherwise. 3 This factual 

finding has considerable support in the record and we cannot say 

that it is clearly erroneous. ALPA • s method of pooling negotiation 

expenses is permissible under Lehnert because "the payment is for 

services that may ultimately enure to the members of the local 

union by virtue of their membership in the parent organization." 

Lehnert, 59 U.s. L. W. at 4549. Although negotiations at other 

airlines are not undertaken directly on behalf of the plaintiffs, 

the costs of such activities can be said to contribute to "the pool 

of resources potentially available" to the United unit. Cf. id. at 

4548. The evidence here suggests that a contract negotiated on 

behalf of one ALPA unit is subsequently used as a bargaining tool 

3 The district court cited with approval Crawford v. Airline 

Pilots Assoc. Int'l., No. 87-891-A (E.D.Va. 1988), aff'd, 870 F.2d 

155 (4th Cir. 1989), reh'g en bane granted, a similar case in which 

the district court found that the circumstances of negotiating 

collective bargaining contracts for pilots made it reasonable for 

ALPA to divide its costs equally among all of its constituents. 

9 

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for another unit. In light of this relationship, it is not 

unreasonable to determine the plaintiffs' agency fee by pooling the 

negotiating expenses of these units and dividing the costs among 

the represented employees. This method does not run afoul of 

Ellis, which states that objecting employees "may be compelled to 

pay their fair share of not only the direct costs of negotiating 

and administering a collective bargaining contract and of settling 

grievances and disputes, but also the expenses of activities or 

undertakings normally or reasonably employed to implement or 

effectuate the duties of the union as exclusive representative of 

the employees in the bargaining unit." Ellis, 466 u.s. at 448. 

Similarly, the union may spread its administrative costs to all of 

the bargaining units, including that of the plaintiffs. Administrative costs by their nature contribute to the pool of resources 

potentially available to each affiliated bargaining unit. These 

expenses are necessary to maintain the union's existence and 

ultimately enure to the benefit of all represented employees. Cf. 

Ellis, 466 u.s. at 448 ("Surely if a union is to perform its 

statutory functions, it must maintain its corporate or 

associational existence . . . . . ") 

Although Lehnert and Ellis pose no obstacle to spreading the 

costs of administration and negotiation among various bargaining 

units, some of the litigation expenses incurred by ALPA may not be 

charged to objecting United pilots. ALPA spent large sums of money 

for litigation after Continental Airlines filed for bankruptcy in 

1983. ALPA challenged Continental when the airline declared that 

10 

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its bankruptcy filing abrogated its collective bargaining 

agreement. The plaintiffs object to paying any of the costs of the 

continental litigation because it did not involve the United 

Airlines bargaining unit. In Ellis, the Supreme Court had this to 

say about the propriety of charging objecting employees for 

litigation expenses: 

The expenses of litigation incident to 

negotiating and administering the contract or 

to settling grievances and disputes arising in 

the bargaining unit are clearly chargeable to 

petitioners as a normal incident of the duties 

of the exclusive representative. The same is 

true of fair representation litigation arising 

within the unit, of jurisdictional disputes 

with other unions, and of any other litigation 

before agencies or in the courts that concerns 

bargaining unit employees and is normally 

conducted by the exclusive representative. 

The expenses of litigation not having such a 

connection with the bargaining unit are not to 

be charged to objecting employees. Contrary 

to the view of the Court of Appeals, 

therefore, unless the Western Airlines 

bargaining unit is directly concerned, 

objecting employees need not share the costs 

of the union's challenge to the legality of 

the airline industry mutual aid pact; of 

litigation seeking to protect the rights of 

airline employees generally during bankruptcy 

proceedings; or of defending suits alleging 

violation of the nondiscrimination 

requirements of Title VII of the Civil Rights 

Act of 1964. 

Ellis, 466 u.s. at 453 (emphasis added). Under this standard, ALPA 

may not charge objecting United pilots for expenses incurred in 

litigation on behalf of the Continental bargaining unit. The 

plaintiffs here were not directly concerned by the bankruptcy 

litigation at Continental. The district court found that the 

litigation was a "very important part of keeping this union 

11 

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strong." Tr. Vol.XIII at 15. ALPA failed to show, however, that 

this litigation benefitted the United bargaining unit in any 

significant way. No concrete evidence was presented as to how the 

bankruptcy litigation concerned United employees. The suggestion 

that challenging one airline might prevent other airlines from 

declaring bankruptcy amounts to little more than a hypothesis. The 

argument that the litigation helped to "make the union stronger" is 

too nebulous to support charging the plaintiffs for those expenses. 

This argument is analogous to the situation in Ellis, where the 

union contended that organizing expenses could be properly charged 

to objecting nonmembers because organizing efforts helped to 

strengthen the union's overall bargaining position. The Ellis 

Court observed that § 2, Eleventh of the Railway Labor Act was not 

intended to be a tool for the expansion of overall union power. Id. 

at 451. Moreover, the Court found that the free-rider rationale 

was not aimed at such expenses: 

If one accepts that what is good for the union 

1s good for the employees, a proposition 

petitioners would strenuously deny, then it 

may be that employees will ultimately ride for 

free on the union's organizing efforts outside 

the bargaining unit. But the free rider 

Congress had in mind was the employee the 

union was required to represent and from whom 

it could not withhold benefits obtained for 

its members. Nonbargaining unit organizing is 

not directed at that employee. 

Id. at 452. Because ALPA has failed to show that the litigation 

involving Continental was related to the plaintiffs' bargaining 

unit, the free-rider rationale does not mandate that plaintiffs 

share in the costs associated with it. 

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ALPA argues that Ellis was not intended to express any opinion 

on how a union should allocate litigation expenses among its 

various bargaining units. Appellee points out that other courts 

have read Ellis in a restrictive manner. See Crawford v. Airline 

Pilots Association International, 870 F.2d 155 (4th Cir. 1989), 

reh'g en bane granted. At bottom, appellee's argument boils down 

to a contention that the Supreme Court did not mean what it said in 

Ellis. We think the Court meant what it said. The Court must be 

presumed to know the meaning of the term "bargaining unit." The 

Ellis case makes no exception for litigation that helps the union 

in a general way or that benefits other bargaining units 

represented by the union. In order for litigation expenses to be 

charged to a bargaining unit, the litigation must concern the 

members of the bargaining unit. "The expenses of litigation not 

having such a connection with the bargaining unit are not to be 

charged to objecting employees." Ellis, 466 U.S. at 453. 

This reading of Ellis is bolstered by the recent Lehnert 

decision. In an opinion representing the view of four justices, 

Justice Blackmun concluded in Lehnert that although a union could 

generally charge dissenters for expenses incurred on behalf of 

other bargaining units, 

"[t]his rationale does not extend ... to 

the expenses of litigation that does not 

concern the dissenting employees' bargaining 

unit . . While respondents are clearly 

correct that precedent established through 

litigation on behalf of one unit may 

ultimately be of some use to another unit, we 

find extra-unit litigation to be more akin to 

lobbying in both kind and effect. We have 

long recognized the important political and 

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expressive nature of litigation. [cite 

omitted] Moreover, union litigation may cover 

a diverse range of areas from bankruptcy 

proceedings to employment discrimination. See 

Ellis, 466 u.s. at 453. When unrelated to an 

objecting employee's unit, such activities are 

not germane to the union's duties as exclusive 

bargaining representative. Just as the Court 

in Ellis determined that the RLA, as informed 

by the First Amendment, prohibits the use of 

dissenters 1 fees for extra-unit litigation, 

ibid., we hold that the Amendment proscribes 

such assessments in the public sector. 

Lehnert, 59 U.S.L.W. at 4550. In view of the fact that this 

section of Justice Blackmun's opinion was not adopted by a majority 

of the Court, some uncertainty may remain as to whether the 

Constitution forbids charging dissenting employees for extra-unit 

litigation. 4 The Railway Labor Act, however, is consistently 

construed in order to relieve doubts concerning the statute's 

constitutionality. See Id. at 4557 (Scalia, J. dissenting in part) 

("Street adopted a construction of the Railway Labor Act nowhere 

suggested in its language, to avoid 'serious doubt of [its) 

constitutionality.'") In light of the interpretation of the RLA 

stated in Ellis and the further constitutional problems suggested 

in Lehnert, we conclude that the RLA does not allow ALPA to charge 

4 The portion of Justice Blackmun' s op1n1on dealing with 

extra-unit litigation expenses was joined by Chief Justice 

Rehnquist and Justices White and Stevens. Additionally, three other 

justices would have adopted a test for chargeable expenses that 

required "a direct relationship between the expense at issue and 

some tangible benefit to the dissenters' bargaining unit." Id. at 

4559 (Scalia, J., concurring in part and dissenting in part). As we 

noted supra at p. 12, ALPA failed to show such a relationship with 

regard to its litigation expenses outside of the United bargaining 

unit. Thus, it appears that a majority of the Supreme Court would 

not allow ALPA to charge these litigation expenses to the 

plaintiffs. 

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the plaintiffs for the litigation expenses objected to that arise 

outside of the plaintiffs' bargaining unit. Such a construction is 

consistent with Congress' intent in amending the RLA to eliminate 

the problem of the free rider while at the same time protecting 

freedom of dissent. See Street, 367 U.S. at 767. As Justice 

Blackmun recognized, an association for litigation often 

constitutes the most effective form of political association. 

Lehnert, 59 U.S.L.W. at 4550 (citing NAACP v. Button, 371 U.S. 415, 

431, 83 s.ct. 328, 9 L.Ed.2d 405 (1963)). 

On remand the district court should direct the union to 

redetermine the amount of the agency fee owed by the plaintiffs for 

the period covered by this suit. The union must exclude from 

chargeable expenses any litigation expenses that did not concern 

the United bargaining unit. Expenses relating to the bankruptcy of 

Continental Airlines must be excluded, as well as any litigation 

expenses arising from the bankruptcy of any employer other than 

United. The costs of any litigation associated with the 

Continental matter, such as the RICO suit against ALPA, should also 

be excluded because ALPA has failed to show the requisite 

connection with the United bargaining unit. Under Ellis, the 

expenses of any other litigation that does not directly concern the 

United Airlines bargaining unit must also be excluded. 

Appellants• next objection relates to the Major Contingency 

Fund. This large reserve fund was financed by a one percent dues 

increase imposed on all pilots represented by ALPA. ALPA decided 

to establish the fund because it believed that its vulnerability to 

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a prolonged strike significantly weakened its bargaining position 

with management. Appellants take issue with two features of the 

Major Contingency Fund. First, they object to ALPA's practice of 

accumulating agency fees in a "war chest." The district court's 

findings show, however, that the contingency fund had a direct 

impact on the union's ability to negotiate a collective bargaining 

agreement. Based on the court's findings, we agree that the 

contingency fund is sufficiently germane to collective bargaining 

that it is fair to require the plaintiffs to bear a portion of the 

costs of funding it. The fund is available to United pilots in the 

event of a strike against United. This directly enhances the 

ability of ALPA to negotiate on the plaintiffs' behalf. The 

contingency fund was shown to be reasonably employed to effectuate 

the duties of ALPA in representing the plaintiffs. Cf. Ellis, 466 

u.s. at 448. 

Plaintiffs' second objection concerning the fund is that it 

was used for an impermissible purpose because payments were made to 

flight attendants and others who honored ALPA' s strike against 

United Airlines. Whatever the plaintiffs' beliefs may be regarding 

the propriety of a strike against their employer, however, the 

simple fact is that a strike is a conventional practice in the 

realm of collective bargaining. We cannot say the court erred in 

determining that such payments were reasonably employed by the 

union to effectuate its duties as the exclusive representative of 

the bargaining unit. 

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In addition to the requirement that expenses be "germane to 

collective bargaining" in order to be chargeable, Lehnert also 

indicated that such expenses must be justified by the government's 

interest in labor peace and avoiding "free riders," and they must 

not add to the burdening of free speech inherent in the allowance 

of the agency shop. Because Lehnert was not decided until after 

the appeal was taken in this case, the district court did not have 

the benefit of that opinion in making its findings. Inasmuch as 

the record before us is sufficiently complete and the facts 

underlying the plaintiffs' claim are undisputed, we have examined 

the union expenses found to be germane in light of the additional 

requirements of Lehnert. We find that the expenses at issue here 

are in fact justified by the government's interest in eliminating 

the free rider problem. ALPA' s negotiation and administrative 

expenses (as well as those other expenses taken to effectuate its 

duties as the exclusive bargaining representative) presumably 

created a benefit to all those represented by ALPA; it is therefore 

fair to require the plaintiffs to share in those costs. Moreover, 

these expenses create little additional interference with the First 

Amendment interests of the plaintiffs beyond that already 

countenanced by allowing the agency shop arrangement. By an 

overwhelming margin, the expenses relate to the union's duties of 

negotiation and administration of collective bargaining contracts 

rather than to expressive and ideological activities. Clearly, 

compulsory financial support of a union does not, without more, 

violate the First Amendment. Lehnert, 59 U.S.L.W. at 4547. We 

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find no statutory or constitutional barriers to charging the 

plaintiffs for those expenses shown to be germane to collective 

bargaining. 

c. Procedures. 

Appellants next contend that the procedures adopted by ALPA 

regulating challenges to the agency fee determination were 

constitutionally inadequate. In Chicago Teachers Union v. Hudson, 

475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), the Supreme 

Court held that the Constitution required certain procedural 

safeguards in connection with an agency shop arrangement between a 

teachers' union and a school board. The constitutional requirements set forth by the Court included an adequate explanation of 

the basis for the agency fee, a reasonably prompt opportunity to 

challenge the amount of the fee before an impartial decisionmaker, 

and an escrow for the amounts reasonably in dispute while such 

challenges are pending. Hudson, 475 U.S. at 310. In the instant 

case, the district court found that the procedures established by 

ALPA met the requirements set forth by the Supreme Court in Hudson. 

A threshold issue in this case is whether the Hudson 

procedures apply to an agency shop agreement between private 

parties. Both the Hudson case and its predecessor, Abood v. 

Detroit Board of Education, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 

261 (1977), found that procedural safeguards were required in an 

agency shop arrangement involving a public employer. The Supreme 

Court has not expressly stated whether the same procedures would be 

required under an agency shop arrangement with a private employer. 

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We find that it is not necessary to resolve the issue in this case 

because, although we assume Hudson does apply, appellants have not 

shown they are entitled to any relief beyond that required by the 

RLA. 

There appears to be no challenge to the rebate procedures 

currently in place at ALPA. Instead, appellants focus on ALPA's 

procedures in past years. Appellants raise three principal 

objections concerning past procedures. First, they argue that the 

rebate reports were not specific enough to allow objections to the 

calculation of the agency fee. We agree with the district court, 

however, that the reports met the minimum level of specificity 

required by Hudson. The court noted in Hudson that a union "need 

not provide nonmembers with an exhaustive and detailed list of all 

of its expenditures," but that adequate disclosure "surely would 

include the major categories of expenses." Hudson, 475 U.S. at 

307, n.18. Although ALPA's initial rebate reports were somewhat 

sketchy, they outlined the major categories of expenses and gave 

potential objectors sufficient information to gauge the propriety 

of the union's fee. 

Appellants' second objection relates to the lack of an 

arbitration procedure in connection with the 1984 rebate. The 

rebate report for 1984 was not issued until shortly after the 

Hudson case was decided in 1986. As the Hudson Court made clear, 

the opportunity for prompt review by an impartial decisionmaker is 

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a requirement in an agency shop arrangement. 5 Although the union 

here did not have adequate procedures relating to the 1984 rebate, 

we do not think Hudson would require the relief requested by 

appellants. Appellants suggested that the district court order the 

union to refund all agency fees paid for 1984. In assessing what 

remedy was appropriate for the union's inadequate procedures, 

however, the district court first observed that plaintiffs did not 

request arbitration for 1984 or even when the procedure was 

available in connection with the 1985 rebate. The court felt that 

the union's failure to provide arbitration normally would require 

the court to order the issues to be submitted to arbitration, but 

found that this would be superfluous under the present 

circumstances because the issues had already been presented to and 

ruled on by the court. Although the procedure for challenging the 

1984 rebate clearly did not measure up to Hudson, under the 

circumstances the district court chose a permissible course. The 

Hudson procedural scheme evidently contemplates that challenges to 

agency fee determinations will be reviewed initially through an 

arbitration procedure. Hudson, 4 7 5 U.S. at 3 07 and n. 2 0. It would 

be redundant at this point, though, to order the matter to be 

submitted to an arbitrator. Cf. Hudson v. Chicago Teachers Union, 

1991 U.S.App. Lexis 214 (7th Cir. Jan. 9, 1991) ("Were we to ... 

provide a hearing and judicial determination of the correctness of 

the fee, we would in effect render redundant and irrelevant the 

5 As noted on page 19, supra, we assume for purposes of this 

opinion that the Hudson requirements would apply to the agency shop 

provision at United. 

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requirement that an impartial decisionmaker hear the dispute • • • 

• "). Under the circumstances of this case, including the fact that 

appellants did not request arbitration, the hearing before the 

district court was adequate to protect the rights of the 

plaintiffs. Cf. Gilpin v. American Federation of State, County, 

and Municipal Employees, 875 F.2d 1310, 1313-15 (7th Cir. 

1989) (Plaintiffs must show some harm to recover for inadequate 

union procedures) . To the extent plaintiffs seek a return of 

agency fees plus interest that were used for purposes not germane 

to collective bargaining (e.g. for litigation expenses on behalf of 

continental employees), that harm will be remedied under the RLA by 

the recalculation of agency fees by the union when the case is 

remanded. 

Appellants final objection to ALPA's rebate procedures 

concerns the practice of placing disputed agency fees in an 

interest bearing escrow account pending determination of the 

appropriateness of the fee. We find that the district court did 

not err in determining that the escrow procedure now used by ALPA 

is adequate under Hudson. The procedure ensures that agency fees 

will not be used even temporarily for improper purposes. Cf. 

Hudson, 475 u.s. at 305. 

d. Admission of Evidence. 

Appellants contend that the district court abused its 

discretion by excluding certain evidence. The evidence in question 

indicated that ALPA officials may have believed that some of the 

plaintiffs were not obligated to pay agency fees. The district 

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court excluded this evidence on the ground that it sought to inject 

new issues into the trial in an untimely fashion. Up until shortly 

before the trial began, plaintiffs' contentions focused primarily 

on whether the union's expenditures were germane to collective 

bargaining. A challenge to the obligation of the plaintiffs to pay 

any agency fees obviously would have changed the issues in dispute 

quite significantly. The defendant indicated that the inclusion of 

these issues would require it to call additional witnesses to 

testify. There is no indication that these issues were included in 

the pretrial order, although plaintiffs apparently had some 

awareness of the underlying facts during discovery. The plaintiffs 

did not seek a continuance or leave to amend the pleadings to allow 

the inclusion of these issues in the trial. Under the circumstances, the district court's exclusion of this evidence was not an 

abuse of discretion. 

e. Plaintiffs' Section 1983 Claims. 

Appellant argues that the district court erred by dismissing 

their claims brought under 42 u.s.c. § 1983. The basis for the 

court's decision is not made clear from the record. Nevertheless, 

we affirm the dismissal because § 1983 applies only to actions 

taken under color of state law. The authorization for the agency 

shop at issue here was based on a federal statute, the Railway 

Labor Act, and § 1983 is therefore inapplicable. 

f. Denial of Class Certification. 

Appellants next argue that the trial court's refusal to 

certify this matter as a class action or to allow additional 

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plaintiffs was reversible error. The district court evidently 

denied class certification on the ground that the plaintiffs would 

not adequately represent the class. See Fed.R.Civ.P. 23(a) (4). 

Appellants do not allege that the district court applied an 

improper standard in denying certification; we therefore review the 

court's decision only for an abuse of discretion. Adamson v. 

Bowen, 855 F.2d 668, 675 (lOth Cir. 1988). The district court 

concluded that the plaintiffs were inadequate representatives 

because one of the plaintiffs sent out a misleading letter to 

potential class members. Based on this episode, the court surmised 

that a conflict of interest existed among potential class members. 

The district court clearly had a basis for finding that a 

potential conflict of interest existed among the class. The burden 

of showing the adequacy of representation was on the plaintiffs 

below and appellants have not demonstrated to us that they met this 

burden. We therefore reject the argument that the district court 

abused its discretion. See Gilpin v. American Federation of State, 

County, and Municipal Employees, 875 F.2d 1310, 1313 (7th Cir. 

1989). Similarly, appellants have not demonstrated an abuse of 

discretion in the court's refusal to allow additional plaintiffs to 

be added to the suit. The court denied the motion to add 

additional plaintiffs after securing a stipulation from the union 

that it would treat other objecting nonmembers in the same fashion 

as the named plaintiffs. Tr.Vol.III at 23. 

g. Statute of Limitations. 

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Finally, appellants contend the district court erred in ruling 

that their claims arising out of agency fees collected in 1983 were 

barred by the statute of limitations. The district court applied 

what it found to be the most analogous statute of limitations under 

the circumstances--the six month period governing duty of fair 

representation claims--and held that any challenge concerning the 

1983 rebate was barred. Appellants do not quarrel with the 

selection of this particular statute of limitations; instead they 

contend that the time for filing suit should have been tolled 

because ALPA did not notify them until 1986 that they could 

challenge the amount of the agency fee. We reject this argument. 

The rebate report in question was issued to the plaintiffs in 

November of 1984. As of that date the plaintiffs were in 

possession of the facts underlying a possible claim against the 

union. Consequently, any claim arising out of the 1983 rebate is 

barred because the plaintiffs' claim was not brought within six 

months of receiving the report. See Crawford v. Air Line Pilots 

Association International, 870 F.2d 155, 159 (4th Cir. 1989), reh'g 

en bane granted, (The statute of limitations began to run on the 

date the rebate report was distributed). 

conclusion 

The district court is reversed insofar as the court allowed 

the union to charge the plaintiffs for litigation expenses that did 

not directly concern the United bargaining unit. The matter is 

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remanded to the district court for further proceedings not 

inconsistent with this opinion. The district court is affirmed in 

all other respects. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 

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