19

- 1563

- cv Wholean v. CSEA SEIU Local 2001



## In the 1 

# United States Court of Appeals 2 

## for the Second Circuit 3

4

5 A UGUST T ERM 201 9 6

7 No. 1 9

- 1 563

- cv 8

9
K IERNAN J. W HOLEAN AND J AMES A. G RILLO , 10 Plaintiffs

- Appellants, 11

12
L AKEISHA C HRISTOPHER , 13 Plaintiff, 14

15

v. 16

17 CSEA SEIU L OCAL 2001; B ENJAMIN B ARNES , IN HIS OFFICIAL CAP ACITY 18

AS S ECRETARY OF THE O FFICE OF P OLICY AND M ANAGEMENT , S TATE OF 19 C ONNECTICUT ; S ANDRA F AE B ROWN

- B REWTON , IN HER OFFICIAL 20

CAPACITY AS U NDERSECRETARY OF L ABOR R ELATIONS , S TATE OF 21 C ONNECTICUT ; R OBERT K LEE , IN HIS OFFICIAL CAP ACITY AS 22 C OMMISSIONER OF THE D EPARTMENT OF E NERGY AND E NVIRONMENTAL 23
P ROTECTION , S TATE OF C ONNECTICUT , 24 Defendants

- Appellees

, 25

26
K EVIN L EMBO , IN HIS OFFICIAL CAP ACITY AS C OMPTROLLER , S TATE OF 27 C ONNECTICUT , 28 Defendant. 29

30

312 On Appeal from the United States District Court 1 for the District of Connecticut 2

3

4 A RGUED : D ECEMBER 1 2

, 2019 5
D ECIDED : A PRIL 15

, 2020 6

7

8 Before: C ABRANES and L OHIER , Circuit Judges , and R EISS , District 9 Judge

. * 10

11

In this appeal, Plaintiff s

- Appellant s Kiernan J. Wholean and 12 James A. Grillo contend that the United States District Court for the 13

District of Connecticut ( Eginton , J.) improperly dismissed their First 14

and Fourteenth Amendment claims brought pursuant to 42 U.S.C. 15 § 1983 to obtain repayment of fair

- share union fees collected pursuant 16 to controlling precedent

. Because w e hold that a good

- faith defense 17 applies to Appellees’ collection of fair

- share union f ees , we AFFIRM 18

the District Court’s dismissal of Appellants’ Second Amended 19 Complaint

. 20

21

J EFFREY D. J ENNINGS ( Milton L. Chappell

, on 22 the brief )

, National Right to Work Legal 23

* Judge Christina Reiss, of the United States Distric t Court for the District of Vermont, sitting by designation.3 Defense and Education Foundation, Inc.

, 1 Springfield

, VA, for Plaintiff s

- Appella nt s

. 2

S COTT A. K RONLAND ( P. Casey Pitts

, 3 Altshuler Berzon LLP, San Francisco, CA ; 4 Daniel E. Livingston, Livingston, Adler, 5 Pulda, Meiklejohn & Kelly, P.C., Hartford, 6
CT, on the brief ), Altshuler Berzon LLP, San 7 Francisco, CA

, for Defendant

- Appellee CSEA 8
SEIU Local 2001

. 9

C LARE K INDALL , Solicitor General ( Philip 10 Miller, Assistant Attorne y General, on the 11 brief ), for William Tong, Connecticut 12 Attorney General

, for State Defendants

13 Appelle e s

. 14

15

C HRISTINA R EISS , District Judge : 16

Plaintiff s

- Appellant s Kiernan J. Wholean and James A. Grillo 17
contend that the United States District Court for the District of 18

Connecticut ( Eginton , J.) improperly dismissed their First and 19

Fourteenth Amendment claims brought pursuant to 42 U.S.C. § 1983 20 against Defendant s

- Appellee s CSEA SEIU Local 2001 (“Local 2001”); 21 Benjamin Barnes, Secretary of the Office of Policy and Management for 22 the State of Connecticut; Sandra Fae Brown

- Brewton, Undersecretary 23 of Labor Relations for the State of Connecticut; and Robert Klee, 244 Commissioner of the Department of Energy and Environmental 1 Protection for the State of Connecticut (collectively, “Appellees”)

. We 2 hold that a good

- faith defense applies to Appellees’ collection of fair

3 share union fees from Appellants and therefore AFFIRM the District 4

C ourt’s dismissal of Appellants’ Second Amended Complaint

. 5

I. BACKGROUND 6

Appellants Kiernan J. Wholean and James A. Grillo are 7 employees of the State of Connecticut. Appellee Local 2001 is a union 8 that represents State of Connecticut employees. The remain ing 9 Appellees are State of Connecticut officials. 1 10

On June 13, 2018, Appellants, who are not members of Local 11 2001, filed a Complaint against Appellees, asserting that they were 12 forced to pay fair

- share union fees to Local 2001 as a condition of their 13 employment in violation of the First Amendment to the U nited States 14 Constitution. Appellees admit that they collected fair

- share fees from 15 Appellants, but contend they were entitled to do so under applicable 16 law. During the pendency of Appellants’ lawsuit, the United States 17 Supreme Court decided Janus v. Ame rican Federation of State, County, 18 and Municipal Employees (“AFSCME”), Council 31 , 138 S. Ct. 2448 (2018) 19

wherein it overruled Abood v. Detroit Board of Education , 431 U.S. 209 20

1 A lthough A ppellants appealed the entirety of the District Court’s decision and judgment in their notice of appeal, in their brief they abandon their appeal of
the District Court’s dismissal of their claims against the State of Connecticut
officials

. See Appellants’ Br. at 3 n.1 (“[Appellants] also sued certain officials of the Connecticut state government but they do not appeal the [D]istrict [C]ourt’s dismissal of their claims ag ainst the State Defendants.”)

.5 (1977), to hold that the collection of fair

- share fees from public

- sector 1 emplo yees violated the First Amendment because they “forced [non

2 members] to subsidize a union, even if they choose not to join and 3 strongly object to the positions the union takes in collective bargaining 4 and related activities,” thereby “compelling them to su bsidize private 5 speech on matters of substantial public concern.” Id. at 2459

- 60. 6

A fter Janus was decided, Appellees ceased deducting fair

- share 7 fees from Appellants’ pay and refunded any such fees collected post

8 Janus

. Thereafter, Appellants amended t heir Complaint to seek the 9 return pursuant to 42 U.S.C. § 1983 of all fair

- share fees collected by 10 Appellees pre

- Janus allegedly in violation of the First and Fourteenth 11
Amendments to the United States Constitution. 12

On October 1, 2018, Appellees moved to dismiss the First 13 Amended Complaint, asserting a good

- faith defense based upon their 14 compliance with Conn. Gen. Stat. § 5

- 280 (authorizing, among other 15 things, the collection of fair

- share fees from non

- members) and 16 directly controlling Supreme Court prec edent that rendered the 17

collection of fair

- share fees from non

- consenting, non

- waiving, non

18 member public

- sector employees lawful. See Abood , 431 U.S. at 235

- 36

. 19 While the motion to dismiss was pending, Appellants filed a S econd 20 Amended Complaint. 21

On April 26, 2019, the D istrict C ourt dismissed the Second 22 Amended Complaint, finding Appellants’ claims for declaratory 23 judgment and injunctive relief were moot based o n Janus . With regard 24 to Appellants’ assertion that Local 2001 continued to violate the First 256 and Fourteenth Amendments by retaining pre

- Janus fees, the D istrict 1

C ourt concluded those claims were barred by the defense of good

- faith 2 adherence to existing pr ecedent. 3

II. DISCUSSION 4

The Second Circuit reviews a district court’s dismissal of a 5 complaint de novo using the same standard employed by the district 6

court. See Purcell v. N.Y. Inst. of Tech.

– Coll. of Osteopathic Med. , 931 7 F.3d 59, 62 (2d Cir. 2019). Appellants urge this court to reverse on two 8 grounds. 9

First, Appellants contend that 42 U.S.C. § 1983 does not 10 recognize a good

- faith defense beyond qualified immunity . They 11

assert one cannot be implied because a First Amendment violation 12

does not turn on a violator’s motive and there is no analogous common 13 law tort from which a good

- faith defense may be extrapolated. 14

S econd, Appellants urge this court to find that Appellees should have 15 anticipated Janus and ceased collecting fair

- share fees on th at basis. 16

We hold that a party who complie d with directly controlling 17 Supreme Court precedent in collecting fair

- share fees cannot be held 18 liable for monetary damages under § 1983. In so holding, we do not 19

write on a blank slate. The Supreme Court in Wy att v. Cole

, 504 U.S. 20
158, 168 (1992) , observed that “principles of equality and fairness may 21 suggest . . . that private citizens who rely unsuspectingly on state laws 22 they did not create and may have no reason to believe are invalid 23 should have some protection from liability, as do their gov ernment 24 counterparts.” Although the Court ultimately held that private 257 defendants are not entitled to qualified immunity, the Court refused 1 to “foreclose the possibility that private defendants faced with § 1983 2 liability . . . could be entitled to an aff irmative defense based on good 3 faith and/or probable cause.” Id. at 169 ; see also id. at 168 (noting that 4 the interests underlying a good

- faith defense “are not sufficiently 5 similar to the traditional purposes of qualified immunity to justify 6 such an expa nsion” of immunity to private parties)

. Indeed, in Wyatt

, 7

s everal Justices opined that a good

- faith defense for private 8

individuals who rely on preced ent has always existed

. See id. at 174 9 (Kennedy, J., concurring) ( joined by Justice Scalia in finding “s upport 10 in the common law for the proposition that a private individual’s 11 reliance on a statute, prior to a judicial determination of 12 unconstitutionality, is considered reasonable as a matter of law”); id. 13

at 17 6 (Rehnquist, J., dissenting) ( joined by Justi ces Souter and Thomas 14 in stating “ i t is clear that at the time § 1983 was adopted, there 15 generally was available to private parties a good

- faith defense to the 16 torts of malicious prosecution and abuse of process”) (footnote 17 omitted)

. 18

Since Wyatt

, e very Circuit Court of Appeals to have considered 19 the question has held that a good

- faith defense exists under § 1983 for 20 private individuals and entities acting under the color of state law who 21 comply with applicable law , including three c ircuits who have 22

concluded that a good

- faith defense is available to unions that relied 23

on Abood and applicable state law in collecting fair

- share fees prior to 248 Janus

. 2 1

Consistent with Wyatt

, a 2016 panel of this court found “a good 2 faith defense was available to a private defendant sued under § 1983 3
for a First Amendment violation.” Jarvis v. Cuomo , 660 F. App’x 72

, 7 5 4

2 See, e.g.

, Ogle v. Ohio Civil Serv. Emps. Ass’n

, 951 F.3d 794, 797 (6th Cir. 2020) (“A narrow good

- faith defense protects those who unwittingly cross that line in reliance on a presumptively valid state law

— those who had go od cause in other words to call on the governmental process in the first instance.”); Lee v. Ohio Educ.
Ass’n

, 951 F.3d 386, 390

- 9 1 (6th Cir. 2020) (“[A] consensus has emerged among the lower courts that while a private party acting under color of state la w does not enjoy qualified immunity from suit, it is entitled to raise a good

- faith defense to liability under section 1983 [including for pre

- Janus collection of fair

- share fees.]

. . . We now add our voice to that chorus.”) (citations and internal quota tion marks omitted); Danielson v. Inslee , 945 F.3d 1096, 1 097 (9th Cir. 2019) ( “[j]oining a growing
consensus” following Janus in holding that “private parties may invoke an affirmative defense of good faith to retrospective monetary liability under 42 U.S .C. § 1983, where they acted in direct reliance on then

- binding Supreme Court precedent and presumptively

- valid state law”); Janus v. AFSCME , 942 F.3d 352, 366 (7th Cir. 2019) (holding on remand that until the Supreme Court “said otherwise,
AFSCME had a le gal right to receive and spend fair

- share fees collected from nonmembers as long as it complied with state law and the Abood line of cases. It did not demonstrate bad faith when it followed these rules”); Clement v. City of
Glendale , 518 F.3d 1090, 1097 ( 9th Cir. 2008) (holding that a towing company was entitled to assert a good

- faith defense to a Fourteenth Amendment due process claim based on the lack of notice to a towed vehicle’s owner because “[t]he company did its best to follow the law and had no re ason to suspect that there would be a constitutional challenge to its actions”); Jordan v. Fox, Rothschild, O’Brien
& Frankel , 20 F.3d 1250, 1276 (3d Cir. 1994) (recognizing a good

- faith defense under § 1983 for due process deprivations); Wyatt v. Cole , 994 F.2d 1113, 1120 (5th Cir. 1993), cert. denied , 510 U.S. 977 (1993) (on remand from the Supreme Court, holding that “private defendants, at least those invoking ex parte prejudgmen t statutes, should not be held liable under § 1983 absent a showing of malice and evidence that they either knew or should have known of the statute’s constitutional infirmity”).9 (2d Cir. 2016), cert. denied , 137 S. Ct. 1204 (2017) . In Jarvis , the lack of a 1
scienter element for a First Amendment violation did not defeat the 2 recognition of a good

- faith defense because “unlike standard defenses, 3 affirmative defenses need not relate to or rebut specific elements of an 4 underlying claim.” Id. (citing Black’s Law Dictionary 482 (9th ed. 5 2009)). We find Jarvis well

- reasoned. Because Appellees collected fair

6 share fees in reliance on directly controlling Supreme Court precedent 7
and then

- valid state statutes, their reliance was objectively reasonable, 8 and they are e ntitled to a “good

- faith” defense as a matter of law. See 9 Pinsky v. Duncan , 79 F.3d 306, 313 (2d Cir. 1996) (“There is common 10 law authority that it is objectively reasonable to act on the basis of a 11 statute not yet held invalid.”); Jarvis , 660 F. App’x at 76 ( affirming the 12 district court’s application of the good

- faith defense because “CSEA 13 relied on a validly enacted state law and the controlling weight of 14 Supreme Court precedent,” and thus it was “objectively reasonable for 15

CSEA ‘to act on the basis of a statute not yet held invalid’”) (quoting 16 Pinsky , 79 F.3d at 313). 17

In finding a good

- faith defense , we note that nothing in Janus 18 suggests that the Supreme Court intended its ruling to be retroactive. 19 Indeed, the Janus Court held that “States and public

- sector unions may 20 no longer extract agency fees from nonconsenting employees

, ” Janus

, 21 138 S. Ct. at 2486 (emphasis supplied) , and the Supreme Court 22 reversed and remanded for further proceedings rather than apply its 23 new rule to the parties before it. Cf. Harper v. Va. Dep’t of Taxation , 509 24 U.S. 86, 90 (1993) (holding that the Supreme Court’s “application of a 25

rule of federal law to the parties before the Court requires every court 2610 to give retroactive effect to that decision”). Even if the retroactivity of 1 Janus is presumed, no different outcome is warranted. A good

- faith 2 defense would still preclude the relief Appellants seek. 3

C ontrary to Appellants’ second argument on appeal, Appellees 4 cannot reasonably be deemed to have forecasted whether, when, and 5

how Abood might be overruled. Instead, they were entitled to rely on 6 directly controlling Supreme Court precedent , and in good fa ith

, they 7
did so. See Agostini v. Felton , 521 U.S. 203, 207 (1997) (holding that 8

courts
, and by extensio n citizens

, should “follow the case which 9 directly controls, leaving to [the Supreme] Court the prerogative of 10 overruling its own decisions”). 11

III. CONCLUSION 12

We have reviewed all of the remaining arguments raised by 13 Appellants on appeal and find them without merit. For the foregoing 14

reasons, we AFFIRM the April 2 9 , 2019 judgment of the D istrict C ourt. 15