Hudson v. Chicago Teachers Union, Local No. 1, No. 89-2493

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtBefore COFFEY and RIPPLE, Circuit Judges, and REYNOLDS; RIPPLE
Citation922 F.2d 1306
Parties136 L.R.R.M. (BNA) 2153, 59 USLW 2463, 18 Fed.R.Serv.3d 1522, 65 Ed. Law Rep. 81 Annie Lee HUDSON, K. Celeste Campbell, Estherlene Holme, Edna Rose McCoy, Debra Ann Petitan, Walter A. Sherrill and Beverly F. Underwood, Plaintiffs-Appellants, v. CHICAGO TEACHERS UNION, LOCAL NO. 1, Robert M. Healey, Jacqueline B. Vaughn, Rochelle D. Hart, Thomas H. Reece, Glendis Hambrick, Individually and as Officers of the Chicago Teachers Union, Board of Education of the City of Chicago, Illinois, Raoul Villalobos, Martha Jantho, Thomas Corcoran, Betty Bonow, Sol Brandzel, Clark Burrus, Leon Jackson, Rose Mary Janus, Dr. Wilfred Reid, Myrna Salazar, Dr. Luis Salces and Viola Thomas, Individually and as Officers and Members of the Board of Education of the City of Chicago, Illinois, Defendants-Appellees.
Decision Date09 January 1991
Docket NumberNo. 89-2493

Page 1306

922 F.2d 1306
136 L.R.R.M. (BNA) 2153, 59 USLW 2463,
18 Fed.R.Serv.3d 1522,
65 Ed. Law Rep. 81
Annie Lee HUDSON, K. Celeste Campbell, Estherlene Holme,
Edna Rose McCoy, Debra Ann Petitan, Walter A.
Sherrill and Beverly F. Underwood,
Plaintiffs-Appellants,
v.
CHICAGO TEACHERS UNION, LOCAL NO. 1, Robert M. Healey,
Jacqueline B. Vaughn, Rochelle D. Hart, Thomas H. Reece,
Glendis Hambrick, Individually and as Officers of the
Chicago Teachers Union, Board of Education of the City of
Chicago, Illinois, Raoul Villalobos, Martha Jantho, Thomas
Corcoran, Betty Bonow, Sol Brandzel, Clark Burrus, Leon
Jackson, Rose Mary Janus, Dr. Wilfred Reid, Myrna Salazar,
Dr. Luis Salces and Viola Thomas, Individually and as
Officers and Members of the Board of Education of the City
of Chicago, Illinois, Defendants-Appellees.
No. 89-2493.
United States Court of Appeals,
Seventh Circuit.
Argued Feb. 20, 1990.
Decided Jan. 9, 1991.

Lewis E. Bulkeley, John V. Ryan, III, Rooks, Pitts & Poust, Margaret S. Garvey, Freeborn & Peters, Chicago, Ill., Edwin Vieira, Jr., Manassas, Va., for plaintiffs-appellants.

Stephen B. Horwitz, S. Leslie Kleiman, Joseph M. Jacobs, Charles Orlove, Jacobs, Burns, Sugarman & Orlove, Wayne B. Giampietro, Lawrence A. Poltrock, Witwer, Burlage, Poltrock & Giampietro, Chicago, Ill., Laurence Gold, David S. Silberman, Washington, D.C., Thomas P. Brown, P. Kevin Connelly, Jody Wilner, Michael J. Sheehan, Connelly, Sheehan & Moran, Robert A. Wolf, John L. Wren, Patricia J. Whitten, Board of Educ. of the City of Chicago, Chicago, Ill., for defendants-appellees.

Page 1307

Before COFFEY and RIPPLE, Circuit Judges, and REYNOLDS, Senior District Judge. *

RIPPLE, Circuit Judge.

The plaintiffs, nonunion teachers, filed a suit against the Chicago Teachers Union and the Chicago Board of Education that challenged the constitutionality of the procedural scheme employed by the Union to collect "fair share fees" 1 from their nonunion employees. In Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986), the Supreme Court held that the Union's procedural scheme was constitutionally defective. On remand, the district court concluded that the Union's revised procedural scheme was constitutionally adequate under the directives of Hudson and denied the plaintiffs' renewed motion to certify a class. The plaintiffs have appealed both rulings. For the following reasons, we affirm the judgment of the district court.

I
BACKGROUND

A. Facts

This litigation dates back to 1982. Several nonunion teachers brought suit against the Chicago Board of Education (Board) and the Chicago Teachers Union (CTU). The dispute pertains to an "agency shop agreement" entered into in 1982 between the Board and the CTU. An "agency shop agreement" is one that requires every employee in the collective bargaining unit, whether union or nonunion, to pay a fee to help defray the costs of collective bargaining and contract administration. These agreements originated in response to a perceived "free rider" problem created when nonunion members enjoy the benefits of union representation without contributing to the cost of that representation. The Supreme Court sanctioned the agency shop agreement concept in Abood v. Detroit Board of Education, 431 U.S. 209, 97 S.Ct. 1782, 52 L.Ed.2d 261 (1977).

Until 1982, members of the CTU financed the entire cost of collective bargaining and contract administration, and the nonunion teachers were "free riders." In 1981, however, the Illinois General Assembly amended the School Code to authorize the Board and the CTU to enter into an agency shop agreement. See Chicago Teachers Union v. Hudson, 475 U.S. 292, 294-95, 106 S.Ct. 1066, 1069-70, 89 L.Ed.2d 232 (1986). In 1982, the Board and the CTU entered into such an agreement, which required the Board to deduct fair share fees from nonmembers' paychecks. Id. at 295, 106 S.Ct. at 1070. However, the Illinois statute strictly limited the amount of money deductible from nonmembers' salaries to their proportionate share of the cost of "the collective bargaining process and contract administration." Id. at 295 n. 1, 106 S.Ct. at 1070 n. 1. Such a limitation on the amount of nonmembers' contributions is required by first amendment considerations, which, the Supreme Court has held, forbid a union from collecting "from dissenting employees any sums for the support of ideological causes not germane to its duties as collective-bargaining agent." Ellis v. Railway Clerks, 466 U.S. 435, 447, 104 S.Ct. 1883, 1891, 80 L.Ed.2d 428 (1984). The Supreme Court has also ruled that a union must supply nonmembers an adequate notice or explanation of the basis for the fair share fee so that the nonmembers may challenge the fee amount if they believe their first amendment rights were infringed as proscribed by Ellis. See Hudson, 475 U.S. at 306, 106 S.Ct. at 1075. At the heart of this dispute is the adequacy of the notice procedure employed by the CTU to explain the basis for the fair share fee amount collected from the plaintiffs. For advance clarification, this appeal involves three separate fair share notice procedures. The first (FSN-1) was in place for the

Page 1308

1982-83 school year; the second (FSN-2), for the 1986-87 school year; and the third (FSN-3), for the 1987-88 school year.

B. Procedural History

1. FSN-1 and the Supreme Court's Hudson decision

In 1983, the plaintiffs challenged the constitutionality of the CTU's fair share fee amount for the 1982-83 school year. See Hudson v. Chicago Teachers Union, 573 F.Supp. 1505 (N.D.Ill.1983). The CTU had computed the nonmembers' fair share fee of the relevant representational costs at ninety-five percent of union members' dues. Id. at 1509. The CTU also established a procedure for considering nonmembers' objections to the deduction (FSN-1). Id. at 1508. After receiving a minimal response from the CTU, the plaintiffs challenged FSN-1 in district court as violative of their first and fourteenth amendment rights. Id. at 1515.

The district court rejected these constitutional challenges. Id. On appeal, however, this court reversed. See Hudson v. Chicago Teachers Union, 743 F.2d 1187 (7th Cir.1984). We concluded that the constitution requires the CTU to implement a procedure that protects nonmembers from being compelled to subsidize ideological activities that are not germane to the collective bargaining process and that the CTU's FSN-1 was inadequate to meet this requirement. Id. at 1190, 1192. The Supreme Court granted certiorari and affirmed our judgment. See Chicago Teachers Union v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.Ed.2d 232 (1986). The Supreme Court concluded that FSN-1, as initially adopted by the CTU, contained three fundamental flaws: (1) its choice of a simple rebate remedy created an impermissible risk that nonmembers funds would be used (albeit temporarily) for an impermissible purpose; (2) the procedure failed to provide an adequate justification for the advance deduction of the fees; and (3) the procedure failed to provide a reasonably prompt resolution of disputes by an impartial decisionmaker. Id. at 304-09, 106 S.Ct. at 1074-77. The Court also concluded that the CTU's attempt to remedy these flaws by placing all nonmember funds in escrow did not cure problems (2) and (3) above. Id. at 309-10, 106 S.Ct. at 1077-78. The Court remanded the case to the district court to determine an appropriate remedy. Id. at 310, 106 S.Ct. at 1077.

2. District court's decision on class certification

In their initial action, the plaintiffs sought to maintain a class action on behalf of all similarly situated nonunion employees. See 573 F.Supp. at 1507. They had moved for certification of the class. However, because the district court upheld the constitutionality of FSN-1, the court dismissed the motion to certify as moot. Id. at 1522. On remand, the plaintiffs again moved for class certification. See Hudson v. Chicago Teachers Union, 117 F.R.D. 413, 414 (N.D.Ill.1987). The district court denied the motion. Id. at 415. It concluded that the decision to certify the class hinged on the single issue of the type of relief sought by the plaintiffs. The court reasoned that, while the plaintiffs' initial goal in the lawsuit appeared to be injunctive relief (a Rule 23(b)(2) class action), 2 the Supreme Court's adjudication of their case granted the relief the plaintiffs initially sought. Id. Moreover, under the Supreme Court's decision, the court noted, all prospective class members already were guaranteed a procedure that protected their first amendment rights. Thus, the court concluded, the only remaining rationale for certifying a class would be to allow the plaintiffs to seek damages from the CTU (a Rule 23(b)(3) class action). 3 Certification of a (b)(3) class, however, was precluded by the Seventh Circuit's and Supreme Court's prior adjudication of the merits of the plaintiffs' claims. Id. The court explained that Rule 23 requires certification of a (b)(3) class prior to a determination on the merits in order to prevent the inequitable

Page 1309

practice of "one-way intervention"--in which a prospective plaintiff could avoid the binding effect of a potential adverse judgment by waiting to see if the litigation was successful on the merits before joining the class. Id. Thus, the court believed it had no choice but to deny the plaintiffs' motion for certification. Id.

3. District court's decision on FSN-3

Meanwhile, the CTU attempted to revise its fair share notice procedure to comply with Hudson 's mandate. A revised procedure was implemented for the 1986-87 school year (FSN-2), but the plaintiffs challenged it as constitutionally inadequate under Hudson. While the adequacy of FSN-2 was before the district court, the parties agreed that all fair share fees collected by the CTU would be deposited with the clerk of the court pursuant to Rule 67 (Rule 67 funds). 4 See Hudson v. Chicago Teachers...

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    ...not affect appellate jurisdiction but may affect the consenting party’s right to review); Hudson v. Chi. Teachers Union, Local No. 1 , 922 F.2d 1306, 1312–13 (7th Cir. 1991) (emphasizing the importance of "practicalities" and explaining that, although settlements generally are not appealabl......
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    ...were brought in federal court but did not address the scope of "constitutional" claims. However, in Hudson v. Chicago Teachers Union, 922 F.2d 1306 (7th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991), the court stated that judicial review without prior arbitrati......
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    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
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    ...remedies provided those remedies are adequate under the criteria established by the Supreme Court. Hudson v. Chicago Teachers Union, 922 F.2d 1306, 1314 (7th Cir.), cert. denied, 501 U.S. 1230, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991). Although we have never squarely decided the issue, we ex......
  • Knox v. Cal. State Employees Ass'n, Local 1000, Serv. Employees Intern. Union, AFL-CIO-CLC, No. 08-16645
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 10, 2010
    ...the adequacy of a union's notice ... and the propriety of a union's chargeability determinations"); Hudson v. Chicago Teachers Union, 922 F.2d 1306, 1309, 1314 (7th Cir.1991) (pointing out that a party had confused adequacy of the notice with the accuracy of the fee itself). Thus, even if t......
  • Request a trial to view additional results
25 cases
  • Lacy v. Cook Cnty., No. 17-2141
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • July 30, 2018
    ...not affect appellate jurisdiction but may affect the consenting party’s right to review); Hudson v. Chi. Teachers Union, Local No. 1 , 922 F.2d 1306, 1312–13 (7th Cir. 1991) (emphasizing the importance of "practicalities" and explaining that, although settlements generally are not appealabl......
  • Kidwell v. Transportation Communications Intern. Union, No. 86
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • October 28, 1991
    ...were brought in federal court but did not address the scope of "constitutional" claims. However, in Hudson v. Chicago Teachers Union, 922 F.2d 1306 (7th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991), the court stated that judicial review without prior arbitrati......
  • Lancaster v. Air Line Pilots Ass'n Intern., No. 94-1467
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • February 21, 1996
    ...remedies provided those remedies are adequate under the criteria established by the Supreme Court. Hudson v. Chicago Teachers Union, 922 F.2d 1306, 1314 (7th Cir.), cert. denied, 501 U.S. 1230, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991). Although we have never squarely decided the issue, we ex......
  • Knox v. Cal. State Employees Ass'n, Local 1000, Serv. Employees Intern. Union, AFL-CIO-CLC, No. 08-16645
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • December 10, 2010
    ...the adequacy of a union's notice ... and the propriety of a union's chargeability determinations"); Hudson v. Chicago Teachers Union, 922 F.2d 1306, 1309, 1314 (7th Cir.1991) (pointing out that a party had confused adequacy of the notice with the accuracy of the fee itself). Thus, even if t......
  • Request a trial to view additional results

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