Opinion ID: 765608
Heading Depth: 2
Heading Rank: 4

Heading: Refund of dues

Text: 56 The district court's final judgment in this matter, Schneider XI at 1-2, included an order resolving Dissenters' claims to a refund of dues amounts corresponding to ideological activities of the Colegio during years prior to the institution of the final dues reduction procedure outlined in the 1993 rules promulgated by the Supreme Court of Puerto Rico. Before responding to the parties' objections to the district court's dues refund order, I must review the history of that court's orders concerning dues payments during the pendency of this case, including the dues payments that were actually made by plaintiffs (relying primarily on the briefs on appeal and cross-appeal for much of the payment data, which is absent from the record). 57 Schneider ceased to pay dues in 1974, Ramos in 1976. See Schneider I, 546 F. Supp. at 1255. Our 1984 abstention decision stated that a pure refund remedy was inadequate (a similar plan having been rejected by the Supreme Court in Ellis v. Brotherhood of Railway, Airline & Steamship Clerks, 466 U.S. 435, 441-44, 104 S. Ct. 1883, 1889-90 (1984), on the grounds that the amount to be rebated constitutes an involuntary loan to the union), and that the Supreme Court of Puerto Rico should adopt an interim rule allowing for a portion of Dissenters' dues payments to be held in escrow. See Schneider V, 742 F.2d at 44. We suggested that a reasonable interim remedy would allow Dissenters to pay 50% of dues into escrow. See id. at 44-45. This recommended interim remedy was approved on November 13, 1984 by the Supreme Court of Puerto Rico, which allowed readmission of Dissenters upon compliance; with respect to Schneider and Ramos, the Court allowed them to pay 50% of their dues into escrow for all dues years for which they had voiced objection to Colegio ideological activities. See Dkt. 328, Exh. A (Nov. 13, 1984 order of the Supreme Court of Puerto Rico). 58 The parties stipulated terms for the escrow account, including requirements that the name of the bank holding the account and the account number be disclosed to Dissenters, and that the Supreme Court of Puerto Rico would order the Colegio not to withdraw any amount of money from this [Escrow] Account until the claims in dispute have been finally resolved by the Supreme Court of Puerto Rico, and, if it were necessary, by the federal courts. Bl. Br. (cross appeal) at 7-8 (quoting Dkt. 328, Exh. B, at 2). The stipulation was signed by the parties on Jan. 23, 1985, and on Jan. 31, 1985, Schneider and Ramos paid the Colegio 50% of their dues corresponding to years 1978-1985 inclusive, and an equal amount into the escrow account. At the same time, Schneider paid his full dues for years 1974-1977 directly to the Colegio as well, see Red Br. (cross appeal) at 21, and Ramos similarly paid full dues for 1976-1977 directly to the Colegio, see Red Br. (cross appeal) at 22; neither plaintiff paid any amount into escrow for those dues years. In 1986 Schneider and Ramos paid appropriate amounts to the Colegio and the escrow account for their 1986 dues. See Red Br. (cross appeal) at 22. The Supreme Court of Puerto Rico's 1986 remedy provided that 15% of dues could be paid to escrow for dues years from 1987 onwards. See Colegio II, 17 T.P.R. at 634. Nothing in the briefs or record on appeal indicates whether or not Schneider or Ramos paid any dues for 1987 or 1988. 59 In 1988 the district court enjoined the Colegio from mandating bar membership or dues payments, see Schneider VII, 682 F. Supp. at 691; after a grace period, this injunction appears to have gone into effect on May 31, 1988 (although the record is far from clear; the injunction may have been stayed pending appeal). We suspended effectiveness of the injunction for 6 months in 1990, but allowed 100% of dues to be escrowed during this stay. See Schneider VIII, 917 F.2d at 636. After the 6 months expired, petitions for certiorari were filed by all parties, and the district court extended our stay pending resolution of these certiorari petitions. The Supreme Court denied certiorari in January 1992. See 502 U.S. 1029 (1992). In June 1992, the Supreme Court of Puerto Rico issued new rules governing dues that allowed Dissenters to pay a proportionately lower dues amount based on the Colegio's budget for unobjectionable activities. Schneider admits not making dues payments for the dues year 1989 and every year afterwards. See Red Br. at 12. As for Ramos, the Colegio indicates that he paid dues from 1989 to 1992 and paid the full, undiscounted amount to the Colegio for 1993, see Red Br. (cross appeal) at 21; there is no indication of whether Ramos paid some or all of his dues for 1989-1992 into the escrow account. 60 The 1992 rules promulgated by the Supreme Court of Puerto Rico established a Review Board to deal with disputes over categorization of expenses. On May 24, 1995, the Colegio appeared before the Board to present its dues refund proposal for dues years 1985-1992. On August 29, 1995, the Review Board issued a decision determining amounts for refund to plaintiffs in conformity with the Colegio's proposal. For dues years 1989-1992, the amount to be refunded was determined on the basis of an independent accounting for that portion of the Colegio budget spent on ideological activities 35 ; for other years where no accounting was done, the total portion of dues (50% for 1985-1986 and 15% for 1987-1988) paid into escrow was ordered refunded; in each case, refunds were to include interest. Notwithstanding the Review Board's pronouncement, further proceedings in the district court took place in order to resolve the refund issue. After reviewing the contentions of both parties, the court determined that the fairest way to resolve the refund issue was to avoid determining exactly what percentage of the Colegio budget for past years was attributable to ideological activities, Schneider IX, 947 F. Supp. at 42, and ultimately ordered that all moneys that had been paid into escrow but were as yet unrefunded should be returned to plaintiffs, with interest. See Schneider XI at 1-2. 61
62 The Colegio argues that the district court's Memorandum, Opinion and Order of Oct. 30, 1996, Schneider IX, 947 F. Supp. at 42, augments the amount of dues to be refunded to plaintiffs, over and above the limited refunds of escrowed dues approved by the Review Board in 1995. The district court's final judgment ordered the refund of all dues deposited in escrow, whereas the Review Board approved only a partial refund for the years 1989-1992, following the results of its independent accounting. For example, for years 1990-1992, Dissenters were allowed to pay 100% of their dues into escrow, all of which would be refundable to Dissenters under the district court's refund plan, whereas the Review Board determined that only a small portion of those payments would be refunded based on its accounting of ideological-activity related expenses for those years. However, in developing its argument, the Colegio does not claim that this augmentation of the refund is substantively unfair (with one minor exception addressed below), but only claims that the Review Board's determination of the issue should have had a preclusive effect on the district court. I find nothing about the Review Board proceedings and refund order that indicates its Conclusions should be binding on the parties to the federal case. 36 The refund issue had been a part of the federal case for many years, see, e.g., Schneider VII, 682 F. Supp. at 675, it remained so, and the district court was well within its power in choosing to resolve it as it did. 63 The Colegio also seems to imply that the 1996 Opinion unfairly augments the dues refund by ordering the Colegio to pay Schneider a refund (in the amount of 50% of compulsory dues) for years in which Schneider did not in fact pay any dues. The October 1996 order states: To the extent that, in any year of the ... period [during which dues were partially escrowed], the refund by the Colegio to plaintiffs was less than 50% of the compulsory dues, the difference shall be paid to plaintiffs with interest from the end of that membership year. Schneider IX, 947 F. Supp. at 42. 37 This language might be read to mean that, had no dues been paid into escrow by a plaintiff, and thus no dues refunded, the Colegio would nonetheless owe said plaintiff the difference between the amount refunded (zero) and half the compulsory dues, resulting in a windfall for the plaintiff. However, the court's final order of March 23, 1998 states its mandate somewhat differently: 64 3. That, for the years in which plaintiffs and other lawyers, following the commencement of this action up to the promulgation of the rules referred to above, paid 50% or another portion of their annual compulsory dues into an escrow account and said amounts have not been refunded, then the Colegio shall refund the unrefunded amounts together with interest on those amounts from the end of the membership year for which they were deposited. 65 Schneider XI at 1-2 (D. Puerto Rico March 23, 1998). This provision clearly covers only paid and unrefunded amounts, which by definition could not include amounts never paid by plaintiffs or amounts already refunded under the plan approved by the Colegio's Board of Review, if any. To the extent that any language in the earlier opinion of the court could be interpreted to the contrary, it is superseded by the text of this final order. 38