Opinion ID: 4644353
Heading Depth: 2
Heading Rank: 2

Heading: Failure to State a Claim as to Count 3

Text: We turn next to the district court’s dismissal of Count 3 for failure to state a claim for which relief may be granted. In reviewing a district court’s grant of a motion to dismiss for failure to state a claim, we “accept well-pleaded facts as true and draw all reasonable inferences in the plaintiffs’ favor.” Shipley v. Chi. Bd. of Election Comm’rs, 947 F.3d 1056, 1060–61 (7th Cir. 2020). To withstand a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In Count 3, plaintiffs-appellants claim that Act 10’s preclusion of voluntary dues deductions infringes on individual employees’ First Amendment rights. They acknowledge that we upheld Act 10’s payroll-deduction prohibition in WEAC, and that our precedent and that of the Supreme Court, particularly Ysursa v. Pocatello Education Association, appear to foreclose their challenge. Nonetheless, plaintiffs-appellants make 20 Nos. 20-1672 & 20-1724 a convoluted attempt to distinguish this case from Ysursa and WEAC. Failing that, plaintiffs-appellants also argue that we should revisit our WEAC decision through the lens of the Supreme Court’s decisions in Janus and Citizens United v. Federal Election Commission. In Ysursa, the Supreme Court upheld a law prohibiting payroll deductions for union political activities because the First Amendment “does not confer an affirmative right to use government payroll mechanisms for the purpose of obtaining funds for expression.” 555 U.S. at 355. Therefore, “a legislature’s decision not to subsidize the exercise of a fundamental right does not infringe the right.” Id. at 358 (quoting Regan v. Tax’n With Representation of Wash., 461 U.S. 540, 549 (1983)). The Court concluded that while “publicly administered payroll deductions for political purposes can enhance the unions’ exercise of First Amendment rights,” states have “no obligation to aid the unions in their political activities.” Id. at 359. Moreover, the decision not to allow payroll deductions “is not an abridgment of the unions’ speech”; instead, “they are free to engage in such speech as they see fit.” Id. Payroll-deduction prohibitions thus represent a state’s decision to “decline[] to promote that speech by allowing public employee checkoffs for political activities.” Id. at 355. We applied Ysursa in WEAC to uphold Act 10’s payrolldeduction prohibition against a First Amendment challenge. The plaintiffs there attempted to distinguish Act 10 from the law in Ysursa by noting that Act 10’s prohibition applied only to general employees, rather than all public employees. WEAC, 705 F.3d at 646. We held that this distinction did not alter the analysis because “Act 10 erects no barrier to speech and speaker-based discrimination is permissible when the Nos. 20-1672 & 20-1724 21 state subsidizes speech.” Id. In other words, a “government subsidy ‘that discriminates among speakers does not implicate the First Amendment unless it discriminates on the basis of ideas.’” Id. (quoting Leathers v. Medlock, 499 U.S. 439, 450 (1991)). Applying that understanding, we held Act 10 to be constitutional under rational basis review because it “is neither facially discriminatory nor a neutral façade for viewpoint discrimination.” Id. at 648. Plaintiffs-appellants attempt to escape this precedent by arguing that WEAC did not consider Act 10’s impact on the First Amendment rights of individual employees, rather than unions—as distinct from the analysis in Ysursa. This argument overlooks the fact that the Supreme Court rendered this distinction immaterial in Ysursa by concluding that “the State is not constitutionally obligated to provide payroll deductions at all,” so long as it does not discriminate based on viewpoint. 555 U.S. at 359. While plaintiffs-appellants complain that Ysursa’s rationale “defies logic,” that does not change the fact that it is binding on this Court. We find similarly unavailing plaintiffs-appellants’ argument that Ysursa’s rationale does not apply here because Act 10, unlike the statute in Ysursa, “does not impose a blanket prohibition or draw constitutionally permissible lines” because it “allows payroll deductions for some favored Unions, but not others.” We rejected these exact arguments in WEAC; we concluded both that “speaker-based discrimination is permissible when the state subsidizes speech” and that “Act 10 is neutral—it does not tie public employees’ use of the state’s payroll system to speech on any particular viewpoint.” 705 F.3d at 646, 648. Therefore, Act 10’s payroll-deduction prohibition passed rational basis review, despite applying 22 Nos. 20-1672 & 20-1724 only to general employees and not public safety employees. Id. at 657. In an effort to save their claim, plaintiffs-appellants rely on Citizens United, arguing that “WEAC did not explain how a law precluding individual employees from funding an organization of their choice can be squared with” the holding of that case. We expressly considered Citizens United in WEAC, however, noting that the law there, unlike Act 10, “actively created [a] barrier[] to speech rather than mere subsidies. … by forbidding certain speakers from spending money, akin to prohibiting speech altogether.” Id. at 648. Despite plaintiffs-appellants’ claims to the contrary, Act 10 does not preclude municipal employees from funding their union if they so choose or prohibit unions from freely spending their money. Rather, Act 10 prohibits municipal employers from “deduct[ing] labor organization dues from the earnings of a general municipal employee or supervisor.” Wis. Stat. § 111.70(3g). Plaintiffs-appellants’ contention that we should revisit WEAC because Janus overruled Ysursa fares no better. Janus held that the First Amendment prohibits compelled speech in the form of mandatory agency fees. 138 S. Ct. at 2486. It did not mention Ysursa, let alone overrule its holding that states have no obligation to provide any payroll deductions. Plaintiffs-appellants concede that “Janus did not have the opportunity to have directly overruled or altered the framework of Ysursa.” Given that the Supreme Court does not normally overturn or dramatically limit its precedents sub silentio, Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 18 (2000), we conclude that Ysursa—and by extension, WEAC—still controls. Nos. 20-1672 & 20-1724 23 Finally, plaintiffs-appellants dispute the classification of a payroll deduction as a subsidy, arguing that this classification “ignores the de minimis burden on a governmental employer to provide that option to its employees.” They therefore ask that we remand this case to conduct discovery on the burden payroll deductions impose on the state. As we noted in WEAC, however, “the Supreme Court has settled the question: use of the state’s payroll systems to collect union dues is a state subsidy of speech that requires only viewpoint neutrality.” 705 F.3d at 645 (citing Ysursa, 555 U.S. at 358–59). Accordingly, the district court appropriately dismissed Count 3 of plaintiffs-appellants’ complaint for failure to state a claim.