Court Opinion

ID: 4453249
Source: CourtListenerOpinion
Date Created: 2019-11-06 08:00:21.472263+00
Date Added: 2024-06-11T14:53:24.393043
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 19‐1553
MARK JANUS,
                                                 Plaintiff‐Appellant,
                                v.

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL
EMPLOYEES, COUNCIL 31; AFL‐CIO, et al.,
                                        Defendants‐Appellees,

                               and

KWAME RAOUL, in his official capacity as Attorney General of
the State of Illinois,
                               Intervenor‐Defendant‐Appellee.
                    ____________________

        Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
         No. 1:15‐cv‐01235 — Robert W. Gettleman, Judge.
                    ____________________

 ARGUED SEPTEMBER 20, 2019 — DECIDED NOVEMBER 5, 2019
               ____________________

    Before WOOD, Chief Judge, and MANION and ROVNER, Cir‐
cuit Judges.
2                                                   No. 19‐1553

    WOOD, Chief Judge. For 41 years, explicit Supreme Court
precedent authorized state‐government entities and unions to
enter into agreements under which the unions could receive
fair‐share fees from nonmembers to cover the costs incurred
when the union negotiated or acted on their behalf over terms
of employment. Abood v. Detroit Bd. of Educ., 431 U.S. 209
(1977). To protect nonmembers’ First Amendment rights, fair‐
share fees could not support any of the union’s political or
ideological activities. Relying on Abood, more than 20 states
created statutory schemes that allowed the collection of fair‐
share fees, and public‐sector employers and unions in those
jurisdictions entered into collective bargaining agreements
pursuant to these laws.
    In 2018, the Supreme Court reversed its prior position and
held that compulsory fair‐share or agency fee arrangements
impermissibly infringe on employees’ First Amendment
rights. Janus v. AFSCME, Council 31, 138 S. Ct. 2448, 2461
(2018). The question before us now is whether Mark Janus, an
employee who paid fair‐share fees under protest, is entitled
to a refund of some or all of that money. We hold that he is
not, and so we aﬃrm the judgment of the district court.
                                I
                    A. History of Agency Fees
    Before turning to the specifics of the case before us, we
think it useful to take a brief tour of the history behind agency
fees. This provides useful context for our consideration of Mr.
Janus’s claim and the system he challenged.
   The principle of exclusive union representation lies at the
heart of our system of industrial relations; it is reflected in
both the Railway Labor Act (“RLA”), 45 U.S.C. §§ 151–165
No. 19‐1553                                                       3

(first enacted in 1926), and the National Labor Relations Act
(“NLRA”), 29 U.S.C. §§ 151–169 (first enacted in 1935). In its
quest to provide for “industrial peace and stabilized labor‐
management relations,” Congress authorized employers and
labor organizations to enter into agreements under which em‐
ployees could be required either to be union members or to
contribute to the costs of representation—so‐called “agency‐
shop” arrangements. See 29 U.S.C. §§ 157, 158(a)(3); 45 U.S.C.
§ 152 Eleventh. Unions designated as exclusive representa‐
tives were (and still are) obligated to represent all employees,
union members or not, “fairly, equitably, and in good faith.”
H.R. Rep. No. 2811, 81st Cong., 2d Sess., p. 4.
    In Railway Employment Dep’t v. Hanson, 351 U.S. 225 (1956),
a case involving the RLA, the Supreme Court held that “the
requirement for financial support of the collective‐bargaining
agency by all who receive the benefits of its work is within the
power of Congress under the Commerce Clause and does not
violate either the First or the Fifth Amendments.” Id. at 231. In
approving agency‐shop arrangements, the Court said, “Con‐
gress endeavored to safeguard against [the possibility that
compulsory union membership would impair freedom of ex‐
pression] by making explicit that no conditions to member‐
ship may be imposed except as respects ‘periodic dues, initi‐
ation fees, and assessments.’” Id. Hanson thus held that the
compulsory payment of fair‐share fees did not contravene the
First Amendment.
    Several years later, in Int’l Ass’n of Machinists v. Street, 367
U.S. 740 (1961), the Court discussed the careful balancing of
interests reflected in the RLA, observing that “Congress did
not completely abandon the policy of full freedom of choice
embodied in the [RLA], but rather made inroads on it for the
4                                                   No. 19‐1553

limited purposes of eliminating the problems created by the
‘free rider.’” Id. at 767. The Court reaﬃrmed the lawfulness of
agency‐shop arrangements while cautioning that unions
could receive and spend nonmembers’ fees only in accord‐
ance with the terms “advanced by the unions and accepted by
Congress [to show] why authority to make union shop agree‐
ments was justified.” Id. at 768. Legitimate expenditures were
limited to those designed to cover “the expenses of the nego‐
tiation or administration of collective agreements, or the ex‐
penses entailed in the adjustment of grievances and dis‐
putes.” Id. The Court left the question whether state public
agencies were similarly empowered under state law to enter
into agency‐shop arrangements for another day.
    That day came on May 23, 1977, when the Supreme Court
issued its opinion in Abood. 431 U.S. 209. There, a group of
public‐school teachers challenged Michigan’s labor relations
laws, which were broadly modeled on federal law. Id. at 223.
Michigan law established an exclusive representation scheme
and authorized agency‐shop clauses in collective bargaining
agreements between public‐sector employers and unions. Id.
at 224. The Court upheld that system, stating that “[t]he de‐
sirability of labor peace is no less important in the public sec‐
tor, nor is the risk of ‘free riders’ any smaller,” id., and that
“[t]he same important government interests recognized in the
Hanson and Street cases presumptively support the impinge‐
ment upon associational freedom created by the agency shop
here at issue.” Id. at 225. It recognized that “government may
not require an individual to relinquish rights guaranteed him
by the First Amendment as a condition of public employ‐
ment.” Id. at 233–34. Nonetheless, it said that a public em‐
ployee has no “weightier First Amendment interest than a pri‐
vate employee in not being compelled to contribute to the
No. 19‐1553                                                      5

costs of exclusive union representation,” id. at 229, and thus
concluded that “[t]he diﬀerences between public‐ and pri‐
vate‐sector collective bargaining simply do not translate into
diﬀerences in First Amendment rights.” Id. at 232.
    The correct balance, according to Abood, was to “prevent[]
compulsory subsidization of ideological activities by employ‐
ees who object thereto without restricting the Union’s ability
to require every employee to contribute to the cost of collec‐
tive‐bargaining activities.” Id. at 237. And for four decades fol‐
lowing Abood, courts, state public‐sector employers, and un‐
ions followed this path. See, e.g., Locke v. Karass, 555 U.S. 207
(2009); Lehnert v. Ferris Faculty Ass’n, 500 U.S. 507 (1991); Chi‐
cago Teachers Union v. Hudson, 475 U.S. 292 (1986); Ellis v. Rail‐
way Clerks, 466 U.S. 435 (1984). Agency‐shop arrangements,
the Court repeatedly held, were consistent with the First
Amendment and validly addressed the risk of free riding. See
Comm’cns Workers of America v. Beck, 487 U.S. 735, 762 (1988)
(“Congress enacted the two provisions for the same purpose,
eliminating ‘free riders,’ and that purpose dictates our con‐
struction of § 8(a)(3) … .”); Ellis, 466 U.S. at 447, 452, 456 (re‐
ferring in three places to the free‐rider concern); see also
Lehnert, 500 U.S. at 556 (Scalia, J., concurring).
    In time, however, the consensus on the Court began to
fracture. Beginning in Knox v. Serv. Emps. Int’l Union, 567 U.S.
298 (2012), the rhetoric changed. Abood began to be character‐
ized as an “anomaly,” and the Court started paying more at‐
tention to the “significant impingement on First Amendment
rights” Abood allowed and less to the balancing of employees’
rights and unions’ obligations. Id. at 310–11. Building on Knox,
Harris v. Quinn criticized the reasoning in Hanson and Abood
as “thin,” “questionable,” and “troubling.” 573 U.S. 616, 631–
6                                                     No. 19‐1553

35 (2014). Harris worried that Abood had “failed to appreciate
the conceptual diﬃculty of distinguishing between union ex‐
penditures that are made for collective‐bargaining purposes
and those that are made to achieve political ends” and to an‐
ticipate “the practical administrative problems that would re‐
sult.” Id. at 637. The Harris Court also suggested that “[a] un‐
ion’s status as exclusive bargaining agent and the right to col‐
lect an agency fee from non‐members are not inextricably
linked.” Id. at 649.
    Nonetheless, and critically for present purposes, these ob‐
servations did not lead the Court in Harris to overrule Abood.
Informed observers thought that Abood was on shaky ground,
but it was unclear whether it would weather the storm, be re‐
stricted, or be overturned in its entirety. That uncertainty con‐
tinued after the Court signaled its intention to revisit the issue
in Friedrichs v. California Teachers Ass’n, 135 S. Ct. 2933 (2015),
which wound up being aﬃrmed by an equally divided Court.
136 S. Ct. 1083 (2016).
                          B. Janus’s Case
    Plaintiﬀ Mark Janus was formerly a child‐support special‐
ist employed by the Illinois Department of Healthcare and
Family Services. Through a collective bargaining agreement
between Illinois’s Department of Central Management Ser‐
vices (“CMS”) (which handles human resources tasks for Illi‐
nois’s state agencies) and defendant American Federation of
State, County and Municipal Employees (“AFSCME”), Coun‐
cil 31, AFSCME was designated as the exclusive representa‐
tive of Mr. Janus’s employee unit. Mr. Janus exercised his
right not to join the union. He also objected to CMS’s with‐
holding $44.58 from his paycheck each month to compensate
AFSCME for representing the employee unit in collective
No. 19‐1553                                                   7

bargaining, grievance processing, and other employment‐re‐
lated functions.
    Initially, however, Mr. Janus was not involved in this liti‐
gation. The case began instead when the then‐governor of Il‐
linois challenged the Illinois Public Labor Relations Act
(“IPLRA”), which established an exclusive representation
scheme and authorized public employers and unions to enter
into collective bargaining agreements that include a fair‐share
fee provision. 5 ILCS § 315/6. Under that law, a union desig‐
nated as the exclusive representative of an employee unit was
“responsible for representing the interests of all public em‐
ployees in the unit,” whether union members or not,
§ 315/6(d). Fair‐share fees were earmarked to compensate the
union for costs incurred in “the collective bargaining process,
contract administration and pursuing matters aﬀecting
wages, hours and conditions of employment.” § 315/6(e).
    The district court dismissed the governor for lack of stand‐
ing, but at the same time it permitted Mr. Janus (and some
others) to intervene as plaintiﬀs. Mr. Janus asserted that the
state’s compulsory fair‐share scheme violated the First
Amendment. He recognized that Abood stood in his way, but
he argued that Abood was wrongly decided and should be
overturned by the high court. Although the lower courts that
first considered his case rejected his position on the ground
that they were bound by Abood, see Janus v. AFSCME, Council
31, 851 F.3d 746, 747–48 (7th Cir. 2017) (“Janus I”), Janus pre‐
served his arguments and then, as he had hoped, the Supreme
Court took the case.
   This time, the Court overruled Abood. Janus, 138 S. Ct. at
2486 (“Janus II”). It held that agency‐shop arrangements that
require nonmembers to pay fair‐share fees and thereby
8                                                    No. 19‐1553

“subsidize private speech on matters of substantial public
concern,” are inconsistent with the First Amendment rights of
objectors, no matter what interest the state identifies in its au‐
thorizing legislation. 138 S. Ct. at 2460. This is so, the Court
explained, because “the First Amendment does not permit the
government to compel a person to pay for another party’s
speech just because the government thinks that the speech
furthers the interests of the person who does not want to pay.”
Id. at 2467.
    Several aspects of the Court’s opinion are relevant to Mr.
Janus’s current claim for damages. First, the Court character‐
ized the harm inflicted by the agency‐fee arrangement as
“compelled subsidization of private speech,” 138 S. Ct. at
2464, whereby “individuals are coerced into betraying their
convictions,” id. It was not concerned in the abstract with the
deduction of money from employees’ paychecks pursuant to
an employment contract. Rather, the problem was the lack of
consent (where it existed) to the use of that money—i.e. to sup‐
port the union’s representation work. In other words, the case
presented a First Amendment speech issue, not one under the
Fifth Amendment’s Takings clause.
    The Court found that any legitimate interest AFSCME had
in those fees had to yield to the objecting employees’ First
Amendment rights. In so doing, it rejected the approach to
free riding that earlier opinions had taken, holding to the con‐
trary that “avoiding free riders is not a compelling interest”
and thus Illinois’s statute could not withstand “exacting scru‐
tiny.” 138 S. Ct. at 2466. Yet it came to that conclusion only
after weighing the costs and benefits to a union of having ex‐
clusive representative status: on the one hand, the union in‐
curs the financial burden attendant to the requirement to
No. 19‐1553                                                     9

provide fair representation even for nonmembers who de‐
cline to contribute anything to the cost of its services; on the
other hand, even with payments of zero from objectors, the
union still enjoys the power and attendant privileges of being
the exclusive representative of an employee unit. The Court’s
analysis focused on the union rather than the nonmembers:
the question was whether requiring a union to continue to rep‐
resent those who do not pay even a fair‐share fee would be
suﬃciently inequitable to establish a compelling interest, not
whether requiring nonmembers to contribute to the unions
would be inequitable.
    Nor did the Court hold that Mr. Janus has an unqualified
constitutional right to accept the benefits of union representa‐
tion without paying. Its focus was instead on freedom of ex‐
pression. That is why it said only that the state may not force
a person to pay fees to a union with which she does not wish
to associate. But if those unions were not designated as exclu‐
sive representatives (as they are under 5 ILCS §§ 315/6 and
315/9), there would be no obligation to act in the interests of
nonmembers. The only right the Janus II decision recognized
is that of an objector not to pay any union fees. This is not the
same as a right to a free ride. Free‐riding is simply a conse‐
quence of exclusivity; drop the duty of fair representation,
and the union would be free to cut oﬀ all services to the non‐
members.
    Finally, the Court did not specify whether its decision was
to have retroactive eﬀect. The language it used, to the extent
that it points any way, suggests that it was thinking prospec‐
tively: “Those unconstitutional exactions cannot be allowed
to continue indefinitely,” 138 S. Ct. at 2486; “States and public‐
sector unions may no longer extract agency fees from
10                                                   No. 19‐1553

nonconsenting employees,” id; “This procedure violates the
First Amendment and cannot continue,” id. In the end, how‐
ever, the Court remanded the case to the district court for fur‐
ther proceedings, in particular those related to remedy. Id. at
2486.
                  C. District Court Proceedings
    The most immediate eﬀect of the Court’s Janus II opinion
was CMS’s prompt cessation of its collection of fees from Mr.
Janus and all other nonmembers of the union, and thus the
end of AFSCME’s receipt of those monies. That relief was un‐
doubtedly welcome for those such as Mr. Janus who funda‐
mentally disagree with the union’s mission, but matters did
not stop there. Still relying on 42 U.S.C. § 1983 for his right of
action, Mr. Janus followed up on the Court’s decision with a
request for damages from AFSCME in the amount of all fair‐
share fees he had paid. The State of Illinois joined the litiga‐
tion as an intervenor‐defendant in support of AFSCME.
    The district court entered summary judgment for
AFSCME and Illinois on March 18, 2019. Janus v. AFSCME,
Council 31, No. 15 C 1235, 2019 WL 1239780 (N.D. Ill. Mar. 18,
2019) (“Janus III”). It began with the observation that in 1982,
the Supreme Court held that private defendants could in
some circumstances act “under color of state law” for pur‐
poses of section 1983 by participating in state‐created proce‐
dural schemes. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922,
941–42 (1982). Although such private defendants are not enti‐
tled to the identical immunity defenses that apply to public
defendants, the Court later indicated, they may be entitled to
an aﬃrmative defense based on good faith or probable cause.
Wyatt v. Cole, 504 U.S. 158, 169 (1992) (“Wyatt I”). Noting that
“every federal appellate court that has considered the good‐
No. 19‐1553                                                      11

faith defense [to a damages action] has found that it exists for
private parties,” the court followed that rule and found that
the defense applies here. The key question, it said, is whether
the defendant’s reliance on an existing law was in good faith.
Given the fact that “the statute on which defendant relied had
been considered constitutional for 41 years,” it found good
faith. In so doing, it rejected the idea that earlier intimations
from the Court that Abood ought to be overruled undermined
the necessary good faith. Accordingly, it held that Mr. Janus
was not entitled to damages.
    Mr. Janus timely filed a notice of appeal on March 27, 2019.
We heard oral argument in both Mr. Janus’s appeal and a re‐
lated case, Mooney v. Ill. Educ. Ass’n, No. 19‐1774, on Septem‐
ber 20, 2019. The predicate for each case is the same—the Su‐
preme Court’s decision in Janus II—but whereas Mr. Janus
seeks damages from the union, Mooney insists that her claim
lies in equity and is one for restitution. As we explain in more
detail in a separate opinion filed in Mooney, we find no sub‐
stantive diﬀerence in the two theories of relief, and so much
of what we have to say here also applies to Mooney’s case.
                                 II
    This appeal presents only questions of law. Accordingly,
we review the district court’s grant of summary judgment in
favor of AFSCME de novo. Mazzai v. Rock‐N‐Around Trucking,
Inc., 246 F.3d 956, 959 (7th Cir. 2001).
                          A. Retroactivity
     We begin with the question whether Janus II is retroactive.
If it is not, that is the end of the line for Mr. Janus, because the
union’s collection of fair‐share fees was expressly permitted
by state law and Supreme Court precedent from the time he
12                                                    No. 19‐1553

started his covered work until the Court’s decision, which all
agree marked the end of his payments. If it is, then we must
reach additional questions that also bear on the proper reso‐
lution of the case. As we noted earlier, the Supreme Court’s
opinion did not address retroactivity in so many words.
    Mr. Janus relies primarily on Harper v. Virginia Dep’t of Tax‐
ation, 509 U.S. 86 (1993), for the proposition that “a rule of fed‐
eral law, once announced and applied to the parties to the
controversy, must be given full retroactive eﬀect by all courts
adjudicating federal law.” Id. at 97; see also Reynoldsville Cas‐
ket Co. v. Hyde, 514 U.S. 749, 752 (1995) (“Harper… held that,
when (1) the Court decides a case and applies the (new) legal
rule of that case to the parties before it, then (2) it and other
courts must treat that same (new) legal rule as ‘retroactive,’
applying it, for example, to all pending cases, whether or not
those cases involve predecision events.”). Mr. Janus’s asser‐
tion is that all Supreme Court cases, without exception, “must
be applied retroactively.” AFSCME responds that “[i]t is not
at all clear, in the first place, that the Supreme Court’s decision
in this case is to be applied retroactively.”
   We agree with AFSCME that the rules of retroactivity are
not as unbending as Mr. Janus postulates. Even in Harper, the
Court said only that its “consideration of remedial issues
meant necessarily that we retroactively applied the rule we
announced … to the litigants before us.” 509 U.S. at 99. Right
and remedy are two diﬀerent things, and the Court has taken
great pains to evaluate them separately. See, e.g., Franklin v.
Gwinnett Cnty. Pub. Schs., 503 U.S. 60, 65–66 (1992) (“As we
have often stated, the question of what remedies are available
under a statute that provides a private right of action is
No. 19‐1553                                                     13

‘analytically distinct’ from the issue of whether such a right
exists in the first place.”).
    Retroactivity poses some knotty problems. The Supreme
Court disapproved of what it called “selective prospectivity”
in Harper (that is, application of the new rule to the party be‐
fore the court but not to all others whose cases were pending),
but it did not close the door on “pure prospectivity”—i.e.,
wholly prospective force, equally inapplicable to the parties
in the case that announces the rule and all others—as used in
Lemon v. Kurtzman, 411 U.S. 192 (1973) (“Lemon II”). In that
case, after invalidating a Pennsylvania program permitting
nonpublic sectarian schools to be reimbursed for secular edu‐
cational services, see Lemon v. Kurtzman, 403 U.S. 602 (1971)
(“Lemon I”), the Court aﬃrmed a district court order permit‐
ting the state to reimburse the schools for all services per‐
formed up to the date of Lemon I. Lemon II, 411 U.S. at 194. One
could argue that similar reliance interests on the part of
AFSCME and the state argue for pure prospectivity here.
    On the other hand, in later decisions the Supreme Court
has stated that the “general practice is to apply the rule of law
we announce in a case to the parties before us … even when
we overrule a case.” Agostini v. Felton, 521 U.S. 203, 237 (1997).
Only when there is “grave disruption or inequity involved in
awarding retrospective relief to the petitioner” does the op‐
tion of pure prospectivity come into play. Ryder v. United
States, 515 U.S. 177, 184–85 (1995). See also Suesz v. Med‐1 Sols.,
LLC, 757 F.3d 636, 650 (7th Cir. 2014) (en banc).
    Rather than wrestle the retroactivity question to the
ground, we think it prudent to assume for the sake of argu‐
ment that the right recognized in Janus II should indeed be ap‐
plied to the full sweep of people identified in Harper (that is,
14                                                  No. 19‐1553

Mr. Janus himself and all others whose cases were in the pipe‐
line at the time of the Court’s decision). That appears also to
be the approach the district court took. We thus turn to the
broader question whether Mr. Janus is entitled to the remedy
he seeks.
               B. Requirements under Section 1983
   Section 1983 supports a civil claim against “every person
who, under color of any statute … of any State … subjects, or
causes to be subjected, any citizen of the United States … to
the deprivation of any rights, privileges, or immunities se‐
cured by the Constitution and laws.” 42 U.S.C. § 1983.
     1. AFSCME is a “person” that can be sued
    To be liable under section 1983 a defendant must be a “per‐
son” as Congress used that term. While “person” is a broad
word, the Supreme Court has held that states do not fall
within its compass. See Will v. Michigan Dep’t of State Police,
491 U.S. 58 (1989). But it is hard to find other exclusions. The
union, as an unincorporated organization, is a suable “per‐
son,” and we are satisfied that it is suﬃciently like other enti‐
ties that have been sued under section 1983 to permit this ac‐
tion. Compare Monell v. Dep’t of Soc. Servs. of City of New York,
436 U.S. 658, 690 (1978) (municipalities and other local gov‐
ernment units are “persons” for purposes of section 1983);
Walsh v. Louisiana High School Athletic Ass’n, 616 F.2d 152, 156
(5th Cir. 1980) (voluntary association of schools); Frohwerk v.
Corr. Med. Servs., 2009 WL 2840961 (N.D. Ind. Sept. 1, 2009)
(prison contractors). Cf. Citizens United v. Fed. Election
Comm’n, 558 U.S. 310 (2010).
No. 19‐1553                                                      15

   2. AFSCME acted “under color of” state law
    The next question is whether AFSCME acted under color
of state law. Unions generally are private organizations. See,
e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570
F.3d 811, 815 (7th Cir. 2009). Nonetheless, private actors some‐
times fall within the statute. See Lugar, 457 U.S. at 935. Indeed,
the “color of law” requirement for section 1983 is more expan‐
sive than, and wholly encompasses, the “state action” require‐
ment under the Fourteenth Amendment. Id. For our purposes,
the analysis is the same—if AFSCME’s receipt from CMS of
the fair‐share fees is attributable to the state, then the “color
of law” requirement is satisfied.
    A “procedural scheme created by … statute obviously is
the product of state action” and “properly may be addressed
in a section 1983 action.” Id. at 941. “[W]hen private parties
make use of state procedures with the overt, significant assis‐
tance of state oﬃcials, state action may be found.” Tulsa Prof’l
Collection Servs., Inc. v. Pope, 485 U.S. 478 (1988); see also Apos‐
tol v. Landau, 957 F.2d 339, 343 (7th Cir. 1992). Here, AFSCME
was a joint participant with the state in the agency‐fee ar‐
rangement. CMS deducted fair‐share fees from the employ‐
ees’ paychecks and transferred that money to the union,
which then spent it on authorized labor‐management activi‐
ties pursuant to the collective bargaining agreement. This is
suﬃcient for the union’s conduct to amount to state action.
We therefore conclude that AFSCME is a proper defendant
under section 1983.
                     C. Statute of Limitations
   Mr. Janus’s claim is also timely under the applicable stat‐
ute of limitations. Section 1983 does not have its own organic
16                                                   No. 19‐1553

statute of limitations but rather borrows the state statute of
limitations for personal‐injury actions. Wilson v. Garcia, 471
U.S. 261, 279 (1985). In Illinois, this is two years. 735 ILCS
§ 5/13–202. “The claim accrues when the plaintiﬀ knows or
should know that his or her constitutional rights have been
violated.” Draper v. Martin, 664 F.3d 1110, 1113 (7th Cir. 2011).
    In this case, the statute began running on the date of the
Supreme Court’s decision in Janus II: June 27, 2018. Mr. Janus
neither knew nor should have known any earlier that his con‐
stitutional rights were violated, because before then it was the
settled law of the land that the contrary was true. Thus, his
suit is timely.
                               III
               A. Existence of Good‐faith Defense
    We now turn to the ultimate question in this case: to what
remedy or remedies is Mr. Janus entitled? As the Supreme
Court wrote in Davis v. United States, 564 U.S. 229 (2011), ret‐
roactivity and remedy are distinct questions. “Retroactive ap‐
plication does not … determine what ‘appropriate remedy’ (if
any) the defendant should obtain.” Id. at 243; see also Ameri‐
can Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167, 189 (1990) (plu‐
rality opinion) (“[T]he Court has never equated its retroactiv‐
ity principles with remedial principles….”). It thus does not
necessarily follow from retroactive application of a new rule
that the defendant will gain the precise type of relief she
seeks. See Powell v. Nevada, 511 U.S. 79, 84 (1994). To the con‐
trary, the Supreme Court has acknowledged that the retroac‐
tive application of a new rule of law does not “deprive[] re‐
spondents of their opportunity to raise … reliance interests
entitled to consideration in determining the nature of the
No. 19‐1553                                                     17

remedy that must be provided.” James B. Beam Distilling Co. v.
Georgia, 501 U.S. 529, 544 (1991).
    Sometimes the law recognizes a defense to certain types of
relief. An example that comes readily to mind is the qualified
immunity doctrine, which is available for a public employee
if the asserted constitutional right that she violated was not
clearly established. See, e.g., Ashcroft v. al‐Kidd, 563 U.S. 731
(2011). We must decide whether a union may raise any such
defense against its liability for the fair‐share fees it collected
before Janus II.
    This is a matter of first impression in our circuit. But, as
the district court noted, every federal appellate court to have
decided the question has held that, while a private party act‐
ing under color of state law does not enjoy qualified immun‐
ity from suit, it is entitled to raise a good‐faith defense to lia‐
bility under section 1983. See Clement v. City of Glendale, 518
F.3d 1090, 1096–97 (9th Cir. 2008); Pinsky v. Duncan, 79 F.3d
306, 311–12 (2d Cir. 1996); Vector Research, Inc. v. Howard &
Howard Attorneys P.C., 76 F.3d 692, 698–99 (6th Cir. 1996); Jor‐
dan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1275–78
(3d Cir. 1994); Wyatt v. Cole, 994 F.2d 1113, 1118–21 (5th Cir.
1993) (“Wyatt II”).
    Mr. Janus takes issue with this consensus position. He
points to the text of section 1983, which we grant says nothing
about immunities or defenses. That, he contends, is the end of
the matter. “Shall be liable to the party injured” is mandatory
language that, in his view, allows for no exceptions. The prob‐
lem with such an absolutist position, however, is that the Su‐
preme Court abandoned it long ago, when it recognized that
liability under section 1983 is subject to common‐law immun‐
ities that apply to all manner of defendants.
18                                                  No. 19‐1553

    The Court discussed that history in Wyatt I, where it noted
that despite the bare‐bones text of section 1983, it had “ac‐
corded certain government oﬃcials either absolute or quali‐
fied immunity from suit if the tradition of immunity was so
firmly rooted in the common law and was supported by such
strong policy reasons that Congress would have specifically
so provided had it wished to abolish the doctrine.” 504 U.S. at
163–64 (quoting Owen v. City of Independence, 445 U.S. 622, 637
(1980)) (internal quotation marks omitted). In Wyatt I, the
Court had to decide how far its immunity jurisprudence
reached, and specifically, whether private parties acting under
color of state law would have been able, at the time section
1983 was enacted (in 1871), to invoke the same immunities
that public oﬃcials had. (That is more than a bit counterfac‐
tual, as the Court did not recognize this type of private liabil‐
ity until 1982, but we put that to one side.) Surveying its im‐
munity jurisprudence, including Mitchell v. Forsyth, 472 U.S.
511 (1985), Harlow v. Fitzgerald, 457 U.S. 800 (1982), Wood v.
Strickland, 420 U.S. 308 (1975), and Pierson v. Ray, 386 U.S. 547
(1967), the Court “conclude[ed] that the rationales mandating
qualified immunity for public oﬃcials are not applicable to
private parties.” 504 U.S. at 167.
    The Court recognized that this outcome risked leaving pri‐
vate defendants in the unenviable position of being just as
vulnerable to suit as public oﬃcials, per Lugar, but not pro‐
tected by the same immunity. Id. at 168. But, critically for
AFSCME, the Court pointed toward the solution to that prob‐
lem. It distinguished between defenses to suit and immunity
from suit, the latter of which is more robust, in that it bars
recovery regardless of the merits. Id. at 166. It then confirmed
that its ruling rejecting qualified immunity did “not foreclose
the possibility that private defendants faced with § 1983
No. 19‐1553                                                   19

liability under [Lugar] could be entitled to an aﬃrmative de‐
fense based on good faith and/or probable cause or that § 1983
suits against private, rather than governmental, parties could
require plaintiﬀs to carry additional burdens.” Wyatt I, 504
U.S. at 169.
     Mr. Janus rejects the line that the Court drew between
qualified immunity and a defense to liability; he sees it as
nothing but a labeling game. But Wyatt I directly refutes this
criticism. Adding to the language above from the majority,
Justice Kennedy, in concurrence, explained why a defense on
the merits might be available for private parties even if im‐
munity is not. “By casting the rule as an immunity, we imply
the underlying conduct was unlawful, a most debatable prop‐
osition in a case where a private citizen may have acted in
good‐faith reliance upon a statute.” 504 U.S. at 173 (Kennedy,
J., concurring). The distinction between an immunity and a
defense is one of substance, not just nomenclature, and “is im‐
portant because there is support in the common law for the
proposition that a private individual’s reliance on a statute,
prior to a judicial determination of unconstitutionality, is con‐
sidered reasonable as a matter of law.” Id. at 174; see also Lu‐
gar, 457 U.S. at 942 n.23 (“Justice Powell is concerned that pri‐
vate individuals who innocently make use of seemingly valid
state laws would be responsible, if the law is subsequently
held to be unconstitutional, for the consequences of their ac‐
tions. In our view, however, this problem should be dealt with
not by changing the character of the cause of action but by
establishing an aﬃrmative defense.”).
  The Wyatt I Court remanded the case to the Fifth Circuit,
which decided that the “question left open by the majority”—
whether a good‐faith defense is available in section 1983
20                                                  No. 19‐1553

actions—“was largely answered” in the aﬃrmative by the five
concurring and dissenting justices. Wyatt II, 994 F.2d at 1118.
The court accordingly held “that private defendants sued on
the basis of Lugar may be held liable for damages under § 1983
only if they failed to act in good faith in invoking the uncon‐
stitutional state procedures, that is, if they either knew or
should have known that the statute upon which they relied
was unconstitutional.” Id.
    Other circuits followed suit. In Jordan, the Third Circuit
noted “the [Supreme Court’s] statement [in Wyatt I] that per‐
sons asserting section 1983 claims against private parties
could be required to carry additional burdens, and the state‐
ments in Lugar which warn us [that] a too facile extension of
section 1983 to private parties could obliterate the Fourteenth
Amendment’s limitation to state actions that deprive a person
of constitutional rights and the statutory limitation of section
1983 actions to claims against persons acting under color of
law.” 20 F.3d at 1277 (cleaned up). Those considerations, the
court said, lead to the conclusion that “‘good faith’ gives state
actors a defense that depends on their subjective state of
mind, rather than the more demanding objective standard of
reasonable belief that governs qualified immunity.” Id. The
Sixth Circuit concurred in Vector Research, 76 F.3d at 699, as
did the Ninth Circuit in Clement, 518 F.3d at 1096–97. Most
recently, in a case decided after Harris v. Quinn, the Second
Circuit allowed a good‐faith defense to a section 1983 claim
for reimbursement of agency fees paid prior to decision. Jarvis
v. Cuomo, 660 F. App’x 72, 75–76 (2d Cir. 2016).
   Mr. Janus pushes back against these decisions with the ar‐
gument that there is no common‐law history before 1871 of
private parties enjoying a good‐faith defense to constitutional
No. 19‐1553                                                                21

claims. As we hinted earlier, however, the reason is simple:
the liability of private parties under section 1983 was not
clearly established until, at the earliest, the Court’s decision in
United States v. Price, 383 U.S. 787 (1966). For nearly 100 years,
nothing would have prompted the question.
   We now join our sister circuits in recognizing that, under
appropriate circumstances, a private party that acts under
color of law for purposes of section 1983 may defend on the
ground that it proceeded in good faith. The final question is
whether that defense is available to AFSCME.
                  B. Good‐faith Defense for AFSCME
    Although this is a new question for us, we note that every
district court that has considered the precise question before
us—whether there is a good‐faith defense to liability for pay‐
ments collected before Janus II—has answered it in the aﬃrm‐
ative.1 While those views are not binding on us, the unanimity
of opinion is worth noting.

    1 See Hamidi v. SEIU Local 1000, 2019 WL 5536324 (E.D. Cal. Oct. 25,
2019); LaSpina v. SEIU Pennsylvania State Council, 2019 WL 4750423 (M.D.
Pa. Sept. 30, 2019); Casanova v. International Ass’n of Machinists, Local 701,
No. 1:19‐cv‐00428, Dkt. #22 (N.D. Ill. Sept. 11, 2019); Allen v. Santa Clara
Cty. Correctional Peace Officers Ass’n, 2019 WL 4302744 (E.D. Cal. Sept. 11,
2019); Ogle v. Ohio Civil Serv. Emp. Ass’n, 2019 WL 3227936 (S.D. Ohio July
17, 2019), appeal pending, No. 19‐3701 (6th Cir.); Diamond v. Pennsylvania
State Educ. Ass’n, 2019 WL 2929875 (W.D. Pa. July 8, 2019), appeal pending,
No. 19‐2812 (3d Cir.); Hernandez v. AFSCME California, 386 F. Supp. 3d
1300 (E.D. Cal. 2019); Doughty v. State Employee’s Ass’n, No. 1:19‐cv‐00053‐
PB (D.N.H. May 30, 2019), appeal pending, No. 19‐1636 (1st Cir.); Babb v.
California Teachers Ass’n, 378 F. Supp. 3d 857 (C.D. Cal. 2019); Wholean v.
CSEA SEIU Local 2001, 2019 WL 1873021 (D. Conn. Apr. 26, 2019), appeal
pending, No. 19‐1563 (2d Cir.); Akers v. Maryland Educ. Ass’n, 376 F. Supp.
3d 563 (D. Md. 2019), appeal pending, No. 19‐1524 (4th Cir.); Bermudez v.
22                                                            No. 19‐1553

    The first task we have under Wyatt I is to identify the “most
closely analogous tort” to which we should turn for guidance.
504 U.S. at 164 (citations and internal quotation marks omit‐
ted). Arguing in some tension with his statute‐of‐limitations
position, Mr. Janus says that his claim lacks any common law
analogue. His back‐up position is that good faith is pertinent
only if the underlying oﬀense has a state‐of‐mind element,
and he asserts that the most analogous tort in his case lacks
such an element.
    Mr. Janus compares the First Amendment violation in his
case to conversion. But that analogy does not work, at least
with regard to the state’s deduction of fair‐share fees and its
transfer of those fees to the union. Conversion requires an in‐
tentional and serious interference with “the right of another
to control” a chattel. Restatement (Second) of Torts § 222A
(1965). At the time AFSCME received Mr. Janus’s fair‐share
fees, he had no “right to control” that money. Instead, under

SEIU Local 521, 2019 WL 1615414 (N.D. Cal. Apr. 16, 2019); Lee v. Ohio Educ.
Ass’n, 366 F. Supp. 3d 980 (N.D. Ohio 2019), appeal pending, No. 19‐3250
(6th Cir.); Hough v. SEIU Local 521, 2019 WL 1274528 (N.D. Cal. Mar. 20,
2019), amended, 2019 WL 1785414 (N.D. Cal. Apr. 16, 2019), appeal pend‐
ing, No. 19‐15792 (9th Cir.); Crockett v. NEA‐Alaska, 367 F. Supp. 3d 996 (D.
Alaska 2019), appeal pending, No. 19‐35299 (9th Cir.); Carey v. Inslee, 364
F. Supp. 3d 1220 (W.D. Wash. 2019), appeal pending, No. 19‐35290 (9th
Cir.); Cook v. Brown, 364 F. Supp. 3d 1184 (D. Or. 2019), appeal pending,
No. 19‐35191 (9th Cir.); Danielson v. AFSCME, Council 28, 340 F. Supp. 3d
1083 (W.D. Wash. 2018), appeal pending, No. 18‐36087 (9th Cir.). See also
Winner v. Rauner, 2016 WL 7374258 (N.D. Ill. Dec. 20, 2016) (post‐Harris
claim for fee reimbursement); Hoffman v. Inslee, 2016 WL 6126016 (W.D.
Wash. Oct. 20, 2016) (same). But see Lamberty v. Connecticut State Police Un‐
ion, 2018 WL 5115559 (D. Conn. Oct. 19, 2018) (dismissing for lack of stand‐
ing but implying plaintiffs were entitled to previously withheld fees, plus
interest).
No. 19‐1553                                                   23

Illinois law and Abood, the union had a right to the fees under
the collective bargaining agreement with CMS. This rules out
conversion. As the Supreme Court said in Chicot Cnty. Drain‐
age Dist. v. Baxter State Bank, 308 U.S. 371 (1940), “the actual
existence of a statute, prior to such a determination, is an op‐
erative fact and may have consequences which cannot justly
be ignored.” Id. at 374.
    There are also at least two privileges that may be relevant
to a conversion‐style claim: authority based upon public in‐
terest, Restatement (Second) of Torts § 265 (1965), and privi‐
lege to act pursuant to court order, Restatement (Second) of
Torts § 266 (1965). Section 265 provides that “one is privileged
to commit an act which would otherwise be a trespass to a
chattel or a conversion if he is acting in discharge of a duty or
authority created by law to preserve the public safety, health,
peace, or other public interest, and his act is reasonably nec‐
essary to the performance of his duty or the exercise of his
authority.” While the usual context for the assertion of this
privilege is law enforcement, it is not too much of a stretch to
apply it to the union’s conduct here. CMS and AFSCME acted
pursuant to state law. That sounds like action in discharge of
a duty imposed by law. Section 266, which provides a privi‐
lege when one acts pursuant to a court order, is not directly
applicable because there was no court order directing
AFSCME to receive fair‐share fees—Abood was permissive,
not mandatory. Nevertheless, CMS and AFSCME did rely on
the Supreme Court’s opinion upholding the legality of exactly
this process.
   AFSCME contends that the better analogy is to the tort of
abuse of process. Abuse of process occurs where a party “uses
a legal process, whether criminal or civil, against another
24                                                   No. 19‐1553

primarily to accomplish a purpose for which it is not de‐
signed.” Restatement (Second) of Torts § 682 (1977). Alterna‐
tively, the most analogous tort might be interference with
contract. See Restatement (Second) of Torts § 766A (1979). Un‐
der the agency‐fee arrangement, a certain portion of the salary
CMS contracted to pay employees went instead to the union.
This arguably made the contract less lucrative for objecting
employees and violated their First Amendment rights.
    None of these torts is a perfect fit, but they need not be. We
are directed to find the most analogous tort, not the exact‐match
tort. This is inherently inexact. Although there are reasonable
arguments for several diﬀerent torts, we are inclined to agree
with AFSCME that abuse of process comes closest. But per‐
haps the search for the best analogy is a fool’s errand. As sev‐
eral district courts have commented, the Supreme Court in
Wyatt I embarked on the search for the most analogous tort
only for immunity purposes—the Court never said that the
same methodology should be used for the good‐faith defense.
See, e.g., Carey, 364 F. Supp. 3d at 1229–30; Babb, 378 F. Supp.
3d at 872–73; Diamond, 2019 WL 2929875 at *25–26. In the al‐
ternative, therefore, we leave common‐law analogies behind
and consider the appropriateness of allowing a good‐faith de‐
fense on its own terms.
              C. Good‐faith Defense under Wyatt I
   Like our sister circuits, we read the Court’s language in
Wyatt I and Lugar, supplemented by Justice Kennedy’s opin‐
ion concurring in Wyatt I, as a strong signal that the Court in‐
tended (when the time was right) to recognize a good‐faith
defense in section 1983 actions when the defendant reasona‐
bly relies on established law. This is not, we stress, a simple
“mistake of law” defense. Neither CMS nor AFSCME made
No. 19‐1553                                                  25

any mistake about the state of the law during the years be‐
tween 1982 and June 27, 2018, when Janus II was handed
down. Abood was the operative decision from the Supreme
Court from 1977 onward, until the Court exercised its exclu‐
sive prerogative to overrule that case. Like its counterparts
around the country, the State of Illinois relied on Abood when
it adopted a labor relations scheme providing for exclusive
representation of public‐sector workers and the remit of fair‐
share fees to the recognized union. The union then relied on
that state law in its interactions with other actors.
    We realize that there were signals from some Justices dur‐
ing the years leading up to Janus II that indicated they were
willing to reconsider Abood, but that is hardly unique to this
area. Sometimes such reconsideration happens, and some‐
times, despite the most confident predictions, it does not. See,
e.g., Dickerson v. United States, 530 U.S. 428 (2000) (reaﬃrming
the Miranda rule); see also Agostini, 521 U.S. at 237 (“We do
not acknowledge, and we do not hold, that other courts
should conclude our more recent cases have, by implication,
overruled an earlier precedent.” (cleaned up)). The Rule of
Law requires that parties abide by, and be able to rely on,
what the law is, rather than what the readers of tea‐leaves pre‐
dict that it might be in the future.
     Notably, Mr. Janus does not allege that CMS and
AFSCME, acting pursuant to state law, failed to comply with
Abood. Mr. Janus says only that AFSCME did not act in good
faith because it “spurned eﬀorts to have agency fees placed in
escrow while their constitutionality was determined.” But
AFSCME was under no legal obligation to escrow the fair‐
share fees for an indefinite period while the case was being
litigated. Such an action, as AFSCME says, would (in the
26                                                    No. 19‐1553

absence of a court order requiring security of some kind)
“have been hard to square with the fiduciary duty the Union
owes to its own members,” as the unit’s exclusive representa‐
tive.
    Until Janus II said otherwise, AFSCME had a legal 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.
                D. Entitlement to Money Damages
    No one doubts that Mr. Janus is entitled to declaratory and
injunctive relief. The Supreme Court declared that the status
quo violated his First Amendment rights and that “States and
public‐sector unions may no longer extract agency fees from
nonconsenting employees.” 138 S. Ct. at 2486. Mr. Janus is
now protected from that practice. Any remaining relief was
for the district court to consider. That court declined to grant
monetary damages, on the ground that AFSCME’s good‐faith
defense shielded the union from such liability. We agree with
that conclusion.
     While this may not be all that Mr. Janus hoped for in this
litigation, it is not unusual for remedies to be curtailed in light
of broader legal doctrines. Moreover, though Mr. Janus con‐
tends that he did not want any of the benefits of AFSCME’s
collective bargaining and other representative activities over
the years, he received them. Putting the First Amendment is‐
sues that concerned the Supreme Court in Janus II to one side,
there was no unjust “windfall” to the union, as Mr. Janus al‐
leges, but rather an exchange of money for services. Our
No. 19‐1553                                                    27

decision in Gilpin v. AFSCME, 875 F.2d 1310 (7th Cir. 1989) is
on point:
   [T]he union negotiated on behalf of these employees as
   it was required by law to do, adjusted grievances for
   them as it was required by law to do, and incurred ex‐
   penses in doing these things … . The plaintiﬀs do not
   propose to give back the benefits that the union’s ef‐
   forts bestowed on them. These benefits were rendered
   with a reasonable expectation of compensation
   founded on the collective bargaining agreement and
   federal labor law, and the conferral of the benefits on
   the plaintiﬀs would therefore give rise under conven‐
   tional principles of restitution to a valid claim by the
   union for restitution if the union were forced to turn
   over the escrow account to the plaintiﬀs and others
   similarly situated to them.
Id. at 1316.
    We have followed similar principles in the ERISA context.
“If restitution would be inequitable, as where the payor ob‐
tained a benefit that he intends to retain from the payment
that he made and now seeks to take back, it is refused.” Oper‐
ating Eng’rs Local 139 Health Benefit Fund v. Gustafson Const.
Corp., 258 F.3d 645, 651 (7th Cir. 2001); see also Constr. Indus.
Ret. Fund of Rockford, Ill. v. Kasper Trucking, Inc., 10 F.3d 465,
467 (7th Cir. 1993) (“The welfare fund pooled the money to
provide benefits for all persons on whose behalf contributions
were made. Because the drivers received the health coverage
for which they paid through the deductions Kasper sent to the
fund, no one is entitled to restitution.”); UIU Severance Pay Tr.
Fund v. Local Union No. 18‐U, United Steelworkers of Am., 998
F.2d 509, 513 (7th Cir. 1993) (“[B]ecause the cause of action we
28                                                   No. 19‐1553

are authorizing is equitable in nature, recovery will not follow
automatically upon a showing that the Union contributed
more than was required but only if the equities favor it.” (in‐
ternal quotation marks omitted)). We conclude that Mr. Janus
has received all that he is entitled to: declaratory and injunc‐
tive relief, and a future free of any association with a public
union.
                               IV
    Before closing, we emphasize again that the good‐faith de‐
fense to section 1983 liability is narrow. It is not true, as Mr.
Janus charges, that this defense will be available to “every de‐
fendant that deprives any person of any constitutional right.”
We predict that only rarely will a party successfully claim to
have relied substantially and in good faith on both a state stat‐
ute and unambiguous Supreme Court precedent validating
that statute. But for those rare occasions, following the lead
first of the Supreme Court in Wyatt I and second of our sister
circuits, we recognize a good‐faith defense for private parties
who act under color of state law for purposes of section 1983.
     We AFFIRM the judgment of the district court.
No. 19‐1553                                                  29

    MANION, Circuit Judge, concurring. The court’s opinion in
this challenging case is thorough, and I concur with the
court’s ultimate conclusion. I have a couple additional
thoughts. Some might observe that Abood had some benefit
to the objectors because they no longer had to pay service
fees equal to union dues as a condition of employment. But
for 41 years, the nonunion employees had to pay their “fair
share.”
   The unions received a huge windfall for 41 years. As the
Supreme Court acknowledged in Janus II, Abood was wrong,
so the unions got what the Court called a “considerable
windfall.” The Court in Janus II sums it up pretty well:
       We recognize that the loss of payments from
       nonmembers may cause unions to experience
       unpleasant transition costs in the short term,
       and may require unions to make adjustments
       in order to attract and retain members. But we
       must weigh these disadvantages against the
       considerable windfall that unions have re‐
       ceived under Abood for the past 41 years. It is
       hard to estimate how many billions of dollars
       have been taken from nonmembers and trans‐
       ferred to public‐sector unions in violation of
       the First Amendment. Those unconstitutional
       exactions cannot be allowed to continue in‐
       definitely.
Janus v. AFSCME, Council 31, 138 S. Ct. 2448, 2485–86 (2018).
    Even though the Supreme Court reached the wrong re‐
sult in Abood 41 years before Janus II, the unions justify their
acceptance of many millions of dollars because they accept‐
30                                                No. 19‐1553

ed the money in “good faith.” Probably a better way of look‐
ing at it would be to say rather than good faith, they had
very “good luck” in receiving this windfall for so many
years. Since the court is not holding that the unions must re‐
pay a portion of the windfall, they can remind themselves of
their good luck for the years ahead.