Court Opinion

ID: 8924244
Source: CourtListenerOpinion
Date Created: 2022-11-27 06:31:16.595209+00
Date Added: 2024-06-11T17:09:21.563454
License: Public Domain

SLOVITER, Circuit Judge,
dissenting.
I agree with the majority that lobbying activities that are pertinent to the duties of a public employee union as a bargaining representative and that are not used to advance the political and ideological position of the union may be financed with representation fees. Thus I join parts I, II, and III of the majority opinion. I dissent from the remainder of the opinion that upholds the New Jersey statute notwithstanding the absence of any effective mechanism for insuring that funds collected from unwilling employees will not be used to subsidize activities in support of a union’s political and ideological position.
The district court’s ruling in this regard was that N.J.S.A. 34:13A-5.5 and 5.6
violate plaintiffs’ constitutional rights in that (i) these statutory provisions permit labor organizations to receive and use plaintiffs’ representation fees for political, ideological and impermissible lobbying purposes over plaintiffs’ objections, and (ii) the demand and return system purportedly designed to enable plaintiffs to recover the portion of their representation fees used for political, ideological and impermissible lobbying purposes does not avoid or cure the improper use of representation fees because it is extraordinarily cumbersome and places heavy burdens upon a claimant.
Robinson v. New Jersey, 565 F.Supp. 942, 944 (D.N.J.1983) (quoting Robinson v. New Jersey, 547 F.Supp. 1297, 1321 (D.N.J. 1982)).
I do not view the initial question before us to be whether the protective mechanisms incorporated by the defendant unions are satisfactory. We must reach that issue only if the statute itself can withstand constitutional attack. I agree with the district court that it cannot.
Unlike the majority, I begin with the relevant legal principle enunciated by the *617Supreme Court in the most recent case to address the issue, Ellis v. Railway Clerks, — U.S. -, 104 S.Ct. 1883, 80 L.Ed.2d 428 (1984). There the Court distanced itself from its earlier dictum in International Association of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961) and Abood v. Detroit Board of Education, 431 U.S. 209, 238-40, 97 S.Ct. 1782, 1801-02, 52 L.Ed.2d 261 (1977), that might be read as supporting the validity of a rebate program. As the Court in Ellis pointed out:
Those opinions did not, nor did they purport to, pass upon the statutory or constitutional adequacy of the suggested remedies. Doing so now, we hold that the pure rebate approach is inadequate.
104 S.Ct. at 1890 (footnote omitted).
I cannot agree with the majority that the relevant precedent is that of Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), dealing with discontinuation of disability benefits prior to a full evidentiary hearing. Implicated here is the First Amendment, and the substantial right of employees protected by that Amendment not to be forced “to contribute to the support of an ideological cause [they] may oppose”. Abood, 431 U.S. at 235, 97 S.Ct. at 1799. As the Court stated in Ellis, “By exacting and using full dues, then refunding months later the portion that it was not allowed to exact in the first place, the union effectively charges the employees for activities that are outside the scope of the statutory authorization.” 104 S.Ct. at 1890. Although the Court was referring to the Railway Labor Act, the Court recognized that the central flaw of a system that permits exaction and then relies upon a subsequent refund is that in practical effect it charges the nonmembers for activities and political positions that may not be charged to them.
In Abood, the Court set forth the objective against which the constitutionality of a fee collection arrangement should be measured. It stated: “[T]he objective must be to devise a way of preventing compulsory subsidization of ideological activities by employees who object thereto without restricting the Union’s ability to require every employee to contribute to the cost of collective-bargaining activities.” 431 U.S. at 237, 97 S.Ct. at 1800. Indeed, Justice Stevens, concurring, stressed that a refund very well might not be adequate. He stated that “the Court’s opinion does not foreclose the argument that the Union should not be permitted to exact a service fee from nonmembers without first establishing a procedure which will avoid the risk that their funds will be used, even temporarily, to finance ideological activities unrelated to collective bargaining.” Id. at 244, 97 S.Ct. at 1804.
When we last considered this issue, Judge Adams, in an opinion which I joined, noted: “A number of courts and commentators appear to agree with the observations by Justice Stevens that a funding system requiring continual payments and subsequent refunds to defendants may not satisfy the requirements of the First Amendment.” Galda v. Bloustein, 686 F.2d 159, 168 (3d Cir.1982). Justice Stevens’ concern about the adequacy of an exaction/refund mechanism seems now to have been accepted by the Court’s majority. In Ellis, the Court stated, albeit in a statutory analysis:
The only justification for this union borrowing would be administrative convenience. But there are readily available alternatives, such as advance reduction of dues and/or interest-bearing escrow accounts, that place only the slightest additional burden, if any, on the union. Given the existence of acceptable alternatives, the union cannot be allowed to commit dissenters’ funds to improper uses even temporarily.
104 S.Ct. at 1890. Since the Court held that an exaction/refund mechanism was invalid when advance reduction of dues and/or interest-bearing escrow accounts were available as alternatives, I disagree with the majority’s approval of a statute that requires use of the exaction/refund mechanism when, as in Ellis, advance re*618duction of dues and/or use of an interest-bearing escrow account are also available.
The New Jersey statute contains no provision that realistically insures that nonmember fees are not used for purposes that would impermissibly infringe upon their First Amendment rights. The majority refers to the “protective mechanism” of a 15% differential “between the amounts chargeable to fee payers and the union dues of full union members,” since “the ceiling of fees to the former is set at 85 percent of the dues of the latter.” See Majority Op. at 612. However, I am not persuaded by the majority’s suggestion that the statutory fifteen percent differential between union fees and nonunion fee payers satisfies either Ellis or the Constitution. Majority Op. at 612-613 n. 12. Ellis did not address the elements of a proper “advance reduction” scheme because the case did not require it. I see nothing in the Ellis opinion that approves a fixed-percentage reduction that fails to prevent compulsory subsidization of ideological and non-member activities.
The record in this case contains little, if no, evidence that supports the majority’s assumption that impermissible uses of the nonmember representation fee will not exceed 15% of the members’ dues. In fact, even as to a union that has made extraordinary efforts to meet the constitutional challenge mounted.in this case, expenditures did exceed 15%. The New Jersey locals of the Communication Workers of America “were discovered to have spent between 15.01 per cent and 23.76 per cent of their budgets on arguably non-collective bargaining issues.” Majority Op. at 614; see Brief for Appellants CWA in No. 83-5532 at 17; see also Olsen v. Communication Workers of America, 559 F.Supp. 754, 760-61 (D.N.J.1983) (non-ehargeable expenditures exceeded 15%). Moreover, the evidence in this record pertains only to these few defendant unions whose practices have been subject to extensive scrutiny and revision following filing of this suit. Other unions may spend considerably more than 15% for ideological and political purposes, particularly in an election year, that are unacceptable to nonmembers. The statute itself contains no provision prohibiting such use in the first instance. As the district court said, “To assume that membership-only expenses and political, ideological and lobbying expenses of each [of the local and national sections of the unions] total 15% or less of pertinent total expenses requires an exercise of faith which should not be required of plaintiffs.” Robinson v. New Jersey, 547 F.Supp. at 1319.
The only other “protective mechanism” referred to by the majority is the creation by the defendant unions of escrow systems for a portion of the representation fee. Majority Op. at 612. However, most of these escrow systems were created only after they were mandated by the district court. Since the statute itself makes no such requirement, such post hoc remedial action by these few unions can hardly cure the facial invalidity of the statute.
Thus, the constitutionality of the statute must depend on the adequacy of the demand and return system contained therein, a system not substantially different than that considered inadequate by the Supreme Court in Ellis. Under the New Jersey statutory system, after the union meets its initial burden, which the district court said “can be readily met” by “simple and con-clusory statements as to expenditures,” the fee payer bears the burden of litigating his or her claim through a long chain of internal and administrative proceedings, during which time the union may continue to use the fees for nonmember and ideological purposes to which the fee payer objects. As the district court described these cumbersome proceedings,
the non-members must then go behind those statements to test not only the propriety of the accounting involved but also the assumptions which were made in allocating expenses to member-only benefits, partisan political activities, and varying kinds of lobbying activities. This the non-members must do before the internal union bodies and then before an administrative law judge. They must proceed before the Appeals Board after the ad*619ministrative law judge makes his findings and recommendations and they are confronted with an appeal to the Appellate Division of the Superior Court of New Jersey and possibly to the New Jersey Supreme Court.
Robinson v. New Jersey, 547 F.Supp. 1297, 1318-19 (D.N.J.1982).
The district court had an unusually complete opportunity to examine the operation of these provisions before making its final ruling on the facial invalidity of the statute. Although the court did ultimately categorically reject all demand and return systems it did so only at the conclusion of several years’ experience in monitoring the operation of various demand and return options. Therefore, the district court’s findings merit considerably more deference than the majority accords them. The district court found,
It has been a useful exercise to examine the CWA demand and return system and the new systems devised by the Robinson and Antonacci unions after my original opinion in that case. These constituted genuine attempts to create as effective demand and return systems as human ingenuity could devise. Yet each system is complex and overwhelmingly burdensome. Each requires an objecting member to expend such major efforts to pursue his remedy that no individual could be expected to avail himself of the remedy. Thus under the very best demand and return system no objecting non-member can devote the time and money required to ascertain and, if warranted, regain the portion of his representation fee which the union may use for political and ideological purposes. The statutory requirement of a demand and return system is an illusory remedy. As a practical matter, therefore, the statute permits a union to take the funds of objecting non-members and use them for the union’s own political and ideological purposes. The good faith efforts of the union defendants in these cases to create workable systems demonstrate that no demand and return system can protect an objecting non-member’s First Amendment rights.
565 F.Supp. at 945-46 (emphasis added).
These findings serve as confirmation of the concerns articulated by Justice Stevens in Abood and of the judgment of the Supreme Court in Ellis. From a practical standpoint, an exaction and return system “effectively charges” the employees for impermissible activities. Ellis, 104 S.Ct. at 1890.
The New Jersey legislature can readily enact provisions that would reduce the probability that representation fees from nonmembers will be impermissibly used. It could require an advance determination of the amount of the proposed fee and give notice and a hearing before a state tribunal before payment to the union must be made. Even if such an advance determination could not precisely measure the percentage of expenditures that would be used for purposes that could not be charged to nonmembers, a statutory requirement that the union make some pre-exaction effort to determine the percentage would go a long way toward ameliorating the defects in the exaction/return system established by the New Jersey statute. It would place the burden where it rightfully belongs, on the union that chooses to exact such fees and not on the individual members who are now subject to procedures aptly characterized by the district court as “overwhelmingly burdensome.” Robinson v. New Jersey, 565 F.2d at 945.
Therefore, I would uphold that portion of the injunction that enjoins the union from receiving representation fees until the statute is amended “so as to include a provision for a hearing before a state tribunal on the validity of any representation fee prior to payment of the fee to the union.” 565 F.Supp. at 949.