Hamidi v. Serv. Emps. Int'l Union Local 1000

• Decision Date: 18 June 2019
• Docket Number: No. 2:14-cv-319 WBS KJN,2:14-cv-319 WBS KJN
• Court: U.S. District Court — Eastern District of California
• Parties: Kourosh HAMIDI, et al., and the Class They Seek To Represent, Plaintiffs, v. SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 1000, and Betty Yee, California State Controller, Defendants.

386 F.Supp.3d 1289

Kourosh HAMIDI, et al., and the Class They Seek To Represent, Plaintiffs,

v.SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 1000, and Betty Yee, California State Controller, Defendants.

No. 2:14-cv-319 WBS KJN

United States District Court, E.D. California.

Signed June 18, 2019

W. James Young, PHV, Pro Hac Vice, National Right to Work Legal Defense Foundation Inc., Springfield, VA, Steven R. Burlingham, Gary, Till, Burlingham & Lynch, Roseville, CA, for Plaintiffs.

Jeffrey B. Demain, Eric Prince Brown, Eve H. Cervantez, Patrick Casey Pitts, Altschuler Berzon, LLP, San Francisco, CA, Anne Marie Giese, Service Employees International Unio, Sacramento, CA, York Jiann Chang, Los Angeles, CA, for Defendants.

MEMORANDUM & ORDER

WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE

Fifteen employees of the State of California brought this class action against defendants Service Employers International Union Local 1000 and the California state controller, alleging that defendants' ‘opt-out’ system for collecting optional union fees violates the First Amendment. (Compl. (Docket No. 1).) On remand from the Ninth Circuit, defendants move to dismiss plaintiffs' claims for prospective relief. (Docket Nos. 121 & 127.) Plaintiffs move to reopen discovery. (Docket No. 126.)

I. Background

This court described much of the factual and procedural background to this lawsuit in its prior order on summary judgment. (Mem. & Order Re: Cross-Mots. for Summ. J. ("Summ. J. Order") (Docket No. 94).) After the court entered judgment in favor of defendants, plaintiffs filed a notice of appeal. (Docket No. 102.) After the parties had filed their briefs on appeal, the Supreme Court issued its decision in Janus v. American Federation of State, County, & Municipal Employees, ––– U.S. ––––, 138 S. Ct. 2448, 201 L.Ed.2d 924 (2018).

Because the parties agreed that Janus impacts this case, the Ninth Circuit then vacated this court's judgment and remanded the case for further proceedings in light of the Supreme Court's decision. (Ninth Cir. Mem. at 2 (Docket No. 111).) The panel also noted that this court "may determine in the first instance whether any of [plaintiffs'] claims are moot." (Id. ) Pursuant to the discussion with the parties at the status conference on remand, the court set a briefing schedule for the two motions at issue in this order: (1) defendants' motion to dismiss plaintiffs' claims for prospective relief as moot and (2) plaintiffs' motion to reopen discovery on the affirmative defense of good faith. (Docket No. 118.) The court held a hearing on these motions on June 17, 2019.

II. Defendants' Motions to Dismiss

A. Legal Standard

Federal Rule of Civil Procedure 12(h)(3) provides that "[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action." Fed. R. Civ. P. 12(h)(3). The difference between a Rule 12(h)(3) motion and a motion to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) "is simply that the former may be asserted at any time and need not be responsive to any pleading of the other party." Berkshire Fashions, Inc. v. M.V. Hakusan II, 954 F.2d 874, 880 n.3 (3d Cir. 1992) ; see also Augustine v. United States, 704 F.2d 1074, 1075 n.3 (9th Cir. 1983) (stating that the issue of subject-matter jurisdiction may be raised by the parties at any time pursuant to Rule 12(h)(3) ); Johnson v. Cal. Welding Supply, Inc., No. 2:11-cv-01669 WBS GGH, 2011 WL 5118599, at *2 (E.D. Cal. Oct. 27, 2011) (applying a single standard to a motion to dismiss pursuant to Rules 12(b)(1) and 12(h)(3) ).

Under Federal Rule of Civil Procedure 12(b)(1), a complaint must be dismissed once the court determines that it lacks subject-matter jurisdiction to adjudicate the claims. Fed. R. Civ. P. 12(b)(1). The court presumes that it has no jurisdiction until the party asserting jurisdiction proves otherwise, and once subject-matter jurisdiction has been challenged, the burden of proof is placed on the party asserting that jurisdiction exists. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 376, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ; Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (holding that "the party seeking to invoke the court's jurisdiction bears the burden of establishing that jurisdiction exists").

An attack on the court's subject-matter jurisdiction may be facial or factual. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). As is the case here where defendants bring a factual challenge to the court's subject-matter jurisdiction, this court "may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment." Id. The court "need not presume the truthfulness of plaintiffs' allegations," White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000), and "may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction," McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).

B. Mootness

Under Article III of the U.S. Constitution, the judicial power extends to "Cases" and "Controversies." Courts cannot decide legal disputes "in the absence of such a case or controversy." Already, LLC v. Nike, Inc., 568 U.S. 85, 90, 133 S.Ct. 721, 184 L.Ed.2d 553 (2013). No principle is more fundamental to the judiciary's proper role in the federal system. Clapper v. Amnesty Int'l USA, 568 U.S. 398, 408, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). This limitation requires that plaintiffs have standing, that is "an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision." Lewis v. Cont'l Bank Corp., 494 U.S. 472, 477, 110 S.Ct. 1249, 108 L.Ed.2d 400 (1990). Article III necessitates that an actual controversy exist "through all stages of the litigation." Already, LLC, 568 U.S. at 91, 133 S.Ct. 721 (quotations omitted). "A case becomes moot--and therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article III--when the issues presented are no longer live or the parties lack a legally cognizable interest in the outcome." Id. Put another way, a case is moot if the dispute "is no longer embedded in any actual controversy about the plaintiffs' particular legal rights." Alvarez v. Smith, 558 U.S. 87, 93, 130 S.Ct. 576, 175 L.Ed.2d 447 (2009).

Defendants contend that the Supreme Court's decision in Janus and subsequent actions taken by the state and the union have mooted plaintiffs' claims for prospective relief. In Janus, the Supreme Court held that states and public-sector unions cannot compel the payment of agency fees from nonconsenting employees because such a practice violates the First Amendment. 138 S. Ct. at 2486. On June 28, 2018, the day after Janus was decided, the California State Controller's Office cancelled the deduction of agency fees from all nonconsenting public employees. (See State Controller's Req. for Judicial Notice Ex. 1 (Docket No. 128-1).) The Controller's Office also said that it would refund all June 2018 agency fees. (Id. ) About a month later, the California Attorney General issued an advisory concerning the Supreme Court's decision in Janus, explaining that the state "may no longer automatically deduct a mandatory agency fee from the salary or wages of a non-member public employee who does not affirmatively choose to financially support the union." (See State Controller's Req. for Judicial Notice Ex. 2 (Docket No. 128-2).)¹ Similarly, in-house counsel for the union defendant has filed an affidavit stating that the union ceased collecting agency fees and using the opt-out procedure following Janus. (See Decl. of Anne M. Giese ("Giese Decl.") ¶¶ 3, 8; see also id. Exs. 1 & 2 (Docket No. 124).) Union counsel agrees that the entire practice is unconstitutional in light of Janus and that this determination binds the union. (Giese Decl. ¶ 8.)

Plaintiffs, inter alia, ask for declaratory and injunctive relief against the opt-out procedure defendants used to collect optional union dues. (See Compl. at 13-14.) Because defendants have abandoned this procedure because they can no longer collect union dues without an employees' affirmative consent, see Janus, 138 S. Ct. at 2448, they maintain that these claims for relief are now moot. In response, plaintiffs concede that their claim for injunctive relief is now moot (see Pls.' Consolidated Opp'n at 2 n.3 & 4 (Docket No. 130)), but they insist that this change in policy does not render their claim for declaratory relief moot.²

1. Applicability of the Voluntary Cessation Exception

At the outset, the court must decide whether the challenged conduct ended due to defendants' "voluntary cessation" of collecting fees. "The voluntary cessation of challenged conduct does not ordinarily render a case moot because a dismissal for mootness would permit a resumption of the challenged conduct as soon as the case is dismissed." Knox v. Serv. Employees Int'l Union, 567 U.S. 298, 307, 132 S.Ct. 2277, 183 L.Ed.2d 281 (2012). Under Ninth Circuit precedent, "voluntary cessation must have arisen because of the litigation" for this exception to mootness to apply. Pub. Utilities Comm'n of State of Cal. v. F.E.R.C., 100 F.3d 1451, 1460 (9th Cir. 1996) (emphasis in original).

All available evidence indicates that defendants changed their position, not because of this lawsuit, but because the Supreme Court's decision in Janus rendered the collection of union dues from nonconsenting public employees unconstitutional. Defendants cited Janus as the justification for their change in policy, and the timing of the change indicates that the decision was a significant motivating force. (See State Controller's Req. for Judicial Notice Ex. 1; Decl. of Anne M. Giese ¶ 3.) Indeed, defendants vigorously defended against this lawsuit and employed the opt-out procedure up until Janus. Therefore, the real motivating factor behind the change "tends to indicate that the change...