Knox v. John Chiang
| Decision Date | 05 June 2013 |
| Docket Number | No. 2:05-cv-02198-MCE-CKD,2:05-cv-02198-MCE-CKD |
| Parties | DIANNE KNOX, et al., ON BEHALF OF THEMSELVES AND THE CLASSES THEY REPRESENT, Plaintiffs, v. JOHN CHIANG, Controller, State of California, et al., Defendants. |
| Court | U.S. District Court — Eastern District of California |
Through this action, Plaintiffs, state employees, sought redress from Defendants Controller of the State of California John Chiang ("the Controller") and Service Employees International Union, Local 1000 ("the Union" or "SEIU") (collectively "Defendants") for violations of Plaintiffs' First, Fifth and Fourteenth Amendment rights pursuant to 42 U.S.C. § 1983. Plaintiffs alleged, and the Supreme Court of the United States ultimately held, that Defendants used Plaintiffs' monies to support political causes without satisfying constitutionally required procedural safeguards.
Presently before the Court is Plaintiffs' Motion for Attorney's Fees and Expenses pursuant to 42 U.S.C. § 1988. (Pls.' Mot. Att'y Fees, Jan. 2, 2013, ECF No. 192.)Defendant SEIU filed a timely opposition to Plaintiffs' Motion (Def.'s Opp'n, Feb. 28, 2013, ECF No. 206) which the Controller joined (Joinder, Feb. 28, 2013, ECF No. 208). Plaintiffs filed a reply (Pls.' Reply, March 14, 2013, ECF No. 210) and subsequently filed a Notice of Partial Withdrawal of the request for expenses (Pls.' Notice, March 19, 2013, ECF No. 212).
Also before the Court is Defendant SEIU's Motion for Clarification (ECF No. 198). Plaintiffs filed a timely response to the Motion for Clarification (Pls.' Response, Jan. 25, 2013, ECF No. 202) and Defendant SEIU filed a Reply (Def.'s Reply, Jan. 31, 2013, ECF No. 203).1
For the reasons set forth below, Plaintiffs' Motion for Attorney's Fees and Expenses is GRANTED, and Defendant SEIU's Motion for Clarification is also GRANTED.
LEGAL BACKGROUND2
Under California law, public-sector employees in a bargaining unit may decide by majority vote to create an "agency shop" arrangement under which all the employees are represented by a union selected by the majority. Cal. Gov't Code § 3502.5(a) (2010). While employees in the unit are not required to join the union, they must nevertheless pay the union an annual fee to cover the cost of union services related to collective bargaining (so-called chargeable expenses). See Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507, 524 (1991); Machinists v. Street, 367 U.S. 740, 760 (1961). The Supreme Court has recognized that such arrangements represent an "impingement" on the First Amendment rights of nonmembers.Teachers v. Hudson, 475 U.S. 292, 307 n.20 (1986); see also Davenport v. Wash. Ed. Ass'n, 551 U.S. 177, 181 (2007) (); Street, 367 U.S. at 749 (). Thus, in Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977), the Supreme Court held that a public-sector union, while permitted to bill nonmembers for chargeable expenses, may not require nonmembers to fund its political and ideological projects. In Hudson, the Court identified procedural requirements that a union must meet to collect fees from nonmembers without violating their rights. 475 U.S. at 302-11. There, the Court also held that the First Amendment does not permit a public-sector union to adopt procedures that have the effect of requiring objecting nonmembers to lend the union money to be used for political, ideological, and other purposes not germane to collective bargaining. Id. at 305. In the interest of administrative convenience, however, the Hudson Court concluded that a union "cannot be faulted" for calculating the fee that nonmembers must pay "on the basis of its expenses during the preceding year." Id. at 307 n.18.
FACTUAL AND PROCEDURAL BACKGROUND3
In June 2005, Defendant SEIU sent out its regular Hudson notice informing employees what the agency fee would be for the year ahead. The notice set monthly dues at 1% of an employee's gross monthly salary but capped monthly dues at $45. Based on the most recently audited year, Defendant SEIU estimated that 56.35% of its total expenditures in the coming year would be dedicated to chargeable collective-bargaining activities.Thus, if a nonunion employee objected within 30 days to payment of the full amount of union dues, the objecting employee was required to pay only 56.35% of total dues. Defendant SEIU's notice also included a feature that was not present in Hudson: The notice stated that the agency fee was subject to increase at any time without further notice. During this time, the citizens of the State of California were engaged in a wide-ranging political debate regarding state budget deficits and, in particular, the budget consequences of growing compensation for public employees backed by powerful public-sector unions.
On June 13, 2005, Governor Arnold Schwarzenegger called for a special election to be held in November 2005 where voters would consider various ballot propositions aimed at state-level structural reforms. Two of the most controversial issues on the ballot were Propositions 75 and 76. Proposition 75 would have required unions to obtain employees' affirmative consent before charging them fees to be used for political purposes. Proposition 76 would have limited state spending and would have given the Governor the ability under some circumstances to reduce state appropriations for public-employee compensation. Defendant SEIU joined a coalition of public-sector unions in vigorously opposing these measures. Calling itself the "Alliance for a Better California," the group would eventually raise "more than $10 million, with almost all of it coming from public employee unions, including $2.75 million from state worker unions, $4.7 million from the California Teachers Association, and $700,000 from school workers unions."
On July 30, shortly after the end of the thirty-day objection period for the June Hudson notice, Defendant SEIU proposed a temporary 25% increase in employee fees, which it billed as an "Emergency Temporary Assessment to Build a Political Fight-Back Fund." The proposal stated that the money was needed to achieve the union's political objectives, both in the special November 2005 election and in the November 2006 election.According to the proposal, money in the Fight-Back Fund would be used for a broad range of political expenses, including television and radio advertising, direct mail, voter registration, voter education and get out the vote activities in work sites and in communities across California. The proposal specifically stated that "[t]he Fund will not be used for regular costs of the union—such as office rent, staff salaries or routine equipment replacement, etc." It noted that "all other public worker unions are in the process of raising the extraordinary funds needed to defeat the Governor." And it concluded: "Each of us must do our part to turn back these initiatives which would allow the Governor to destroy our wages and benefits and even our jobs, and threaten the well-being of all Californians." On August 27, Defendant SEIU's General Council voted to implement the proposal.
On August 31, Defendant SEIU sent out a letter addressed to "Local 1000 Members and Fair Share Fee Payers," announcing that, for a limited period, their fees would be raised to 1.25% of gross monthly salary and the $45-per-month cap on regular dues would not apply. The letter explained that the union would use the fund to "defeat Proposition 76 and Proposition 75 on November 8," and to "defeat another attack on [its] pension plan" in June 2006. The letter also informed employees that, in the following year, the money would help "to elect a governor and a legislature who support public employees and the services [they] provide."
After receiving this letter, one of the Plaintiffs in this case called Defendant SEIU's offices to complain that the union was levying the special assessment for political purposes without giving employees a fair opportunity to object. One of Defendant SEIU's area managers responded that "even if [the employee] objected to the payment of the full agency fee, there was nothing he could do about the September increase for the Assessment." (ECF No. 139.) "She also stated that 'we are in the fight of our lives,' that the Assessment was needed, and that there was nothing that could be done to stop the Union's expenditure of that Assessment for political purposes." Id.As a consolation, however, those employees who had filed timely objections after the regular June Hudson notice were required to pay only 56.35% of the temporary increase.
Plaintiffs filed this class-action suit on behalf of 28,000 nonunion employees who were forced to contribute money to the Political Fight-Back Fund. On March 28, 2008, this Court issued an order granting summary judgment to Plaintiffs, and granting in part Defendants' cross-motion for partial summary judgment. (Order, ECF No. 139.) Defendants appealed, and the Ninth Circuit reversed and remanded. 628 F.3d 1115 (9th Cir. 2010). In accordance with the Ninth Circuit's opinion, this Court then issued an order denying Plaintiffs' motion for Summary Judgment and reversing the denial of Defendant's partial motion for summary judgment. (ECF No. 178.) Plaintiffs then appealed, and the Supreme Court of the United States granted certiorari. 131 S. Ct. 3061 (2011). The Supreme Court reversed and remanded the Ninth Circuit's decision. 132 S. Ct. 2277, 2284 (2012). The Ninth Circuit then vacated this Court's decision in its entirety and remanded the case to this Court "for further proceedings consistent with the Supreme Court's opinion." (ECF No. 183.) On December 4, 2012, this Court entered judgment in favor of Plaintiffs and ordered that "Defendant SEIU shall refund to Plaintiffs all monies exacted for...
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