Schneider v. Colegio De Abogados De Puerto Rico

• Decision Date: 30 October 1996
• Docket Number: Civil No. 82-1513.,Civil No. 82-1514.,Civil No. 82-1459(TR).
• Citation: 947 F.Supp. 34
• Parties: Robert E. SCHNEIDER, Jr., et al., Plaintiffs, v. COLEGIO de ABOGADOS de PUERTO RICO, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

947 F.Supp. 34

Robert E. SCHNEIDER, Jr., et al., Plaintiffs, v. COLEGIO de ABOGADOS de PUERTO RICO, et al., Defendants.

Civil No. 82-1459(TR).

Civil No. 82-1513.

Civil No. 82-1514.

United States District Court, D. Puerto Rico.

October 30, 1996.

Robert E. Schneider, Jr., San Juan, PR, pro se.

Carlos A. Rodriguez Vidal, Isla Verde, PR, for Colegio.

Dep't of Justice of the Commonwealth, for Commonwealth Officials.

Salvador Antonetti, San Juan, PR, for Justices of the P.R. Supreme Court.

MEMORANDUM OPINION AND ORDER

JAMES L. WATSON, Senior Judge, Sitting by Designation.

This opinion deals with a dispute that has been going on for almost two decades between a number of attorneys practicing law in Puerto Rico and the Colegio de Abogados de Puerto Rico (hereinafter the "Colegio"), i.e. the Puerto Rico Bar Association.

Time and judicial decisions have reduced the issues to two. The first is the question of whether compliance has been achieved by the Colegio with the orders of this court mandating a mechanism by which the members of the Colegio can avoid paying for Colegio activities that are not within the core purposes of a bar association. The second is the question of attorneys' fees for plaintiffs. These issues are the focus of a motion by plaintiffs for entry of judgment and for injunctive and other relief, based on an asserted failure of the Colegio to comply with orders of this court.

Since the motion asks for relief that was granted and held in abeyance in an earlier phase of this litigation that history will be reviewed. Hopefully this will provide a coherent background to the result reached herein and will obviate the need for further reading on the part of all except those who are duty-bound to delve into the prior opinions. This summary does not contain the details of some extremely intricate procedural matters.

In 1982 Plaintiffs Schneider and Ramos filed an action to challenge the constitutionality of the laws that required attorneys in Puerto Rico to be members of the Colegio and to enjoin the attempt to disbar them for refusing to pay dues to the Colegio. The Supreme Court of Puerto Rico had earlier ordered them to pay the dues or face disbarment in Colegio de Abogados de Puerto Rico v. Schneider, et al., 112 D.P.R. 540 (1982). That decision also recognized the right of lawyers to prevent the Colegio from using their dues to support ideological causes outside the core purposes of a bar association and promised to develop a "final segregation" plan. When Schneider and Ramos refused to pay dues the Supreme Court suspended them from the practice of law in June, 1982.

The federal action was brought against the Colegio, the Bar Association Foundation (the "Fundacion"), the Justices of the Supreme Court of Puerto Rico, and the Puerto Rico Secretaries of Justice and the Treasury. Based on 42 U.S.C. § 1983, the action attacked the compulsory membership and dues statute, the compulsory purchase of forensic and notarial stamps for use on legal documents and the disciplinary proceedings.

The district court dismissed the conspiracy claims, the disciplinary proceeding claims and damage claims against the justices, many of the damage claims against the Colegio and the Fundacion, and all claims regarding the outcome of prior disciplinary proceedings. What remained were claims for declaratory and injunctive relief against the compulsory membership, the dues and the stamps, claims that were directed at the justices of the Supreme Court, the Colegio and the Fundacion. Schneider v. Colegio de Abogados de Puerto Rico, 546 F.Supp. 1251 (D.Puerto Rico 1982).

The Court of Appeals for the First Circuit granted a petition for a writ of mandamus dismissing the claims involving compulsory membership and dues against the Justices of the Supreme Court. The court so decided on the ground that there was no reason to believe that the justices would penalize as misconduct the refusal to join the Colegio or pay dues if the federal courts were to rule that they were constitutionally justified. However, the court retained them as parties in the stamp claim on the ground that they had administrative responsibilities with respect to the stamps that made them proper parties for the purposes of the existence of a "case or controversy." The court noted that they were "purely nominal parties." The claims against the Colegio and the Fundacion were left untouched. In re The Justices of the Supreme Court of Puerto Rico, 695 F.2d 17 (1st Cir.1982).

Thereafter, in December of 1982, the Colegio informed the Supreme Court of Puerto Rico that it had created a mechanism for refunding dues money to lawyers. While this was under consideration, the district court, in June of 1983, following an evidentiary hearing and full argument and briefing, characterized the mechanism proposed by the Colegio as a "sham" and enjoined all defendants except the justices of the Supreme Court of Puerto Rico from taking any action against lawyers for failing to pay dues or fees to the Colegio. It also enjoined any use of funds from forensic or notarial stamps for the use of the Collage or any adverse consequences from the failure to use the stamps. The court also issued a declaratory judgment declaring portions of Law No. 43 and other statutes providing for the funding of the Colegio to be unconstitutional. Schneider v. Colegio de Abogados de Puerto Rico, 565 F.Supp. 963 (1983).

In August of 1984 in Romany v. Colegio de Abogados de Puerto Rico, 742 F.2d 32 (1st Cir.1984), the court of appeals held that the district court should have abstained from reaching the merits of the case and should have allowed the Supreme Court of Puerto Rico "a reasonable time within which to review the Colegio's remedy, and to accept, reject or modify it." It vacated the injunction without ruling on the merits of the analysis of the district court, directing the district court to await action by the Puerto Rico court. The appellate tribunal stated that "While we can appreciate the concerns of the district court, we think this matter must be approached with deliberation and full respect for the role of the judiciary of the Commonwealth of Puerto Rico." 742 F.2d at 43. While this reasoning was primarily addressed to the dues issue, the stamp issue was also found to be appropriate for abstention. The court of appeals also provided that during the pendency of further proceedings the plaintiffs would have to pay only 50% of their annual dues to the Colegio. The remainder was to be paid into an escrow account managed by a neutral entity.

In June of 1986 the Supreme Court of Puerto Rico issued its final rule governing the matters on which the court of appeals had ordered a period of abstention. The elements of that procedure were to deposit 15% of the dues of "dissenting" attorneys into an escrow account and require them to make a general objection to ideological use of their dues upon payment of the dues. Refunds were to depend on case-by-case objections to events during the year, following which they would receive a proportionate refund, as determined by a three-member panel composed of retired members of the Puerto Rico judiciary. The panel would determine what activities are objectionable and whether the 15% escrow should be modified at a later date. The Rule also barred objection to 15 listed "functions and purposes" of the Colegio. The Colegio moved to dismiss the federal action at that point on the ground that the decision of the Supreme Court had become res judicata as to plaintiffs' claims in this action. That motion was denied in Schneider v. Colegio de Abogados de Puerto Rico, 670 F.Supp. 1098 (D. Puerto Rico 1987).

In March of 1988 the district court reached the merits of the case again in Schneider v. Colegio, 682 F.Supp. 674 (D. Puerto Rico 1988). The court found that the 1986 rule did not meet constitutional requirements because it did not properly identify those activities which cannot be funded by compulsory fees, and did not provide adequate procedures for determining and refunding the amounts attributable to objectionable activity. The court undertook to define the permissible core activities for which dues could be compelled and outlined the measures needed to bring the refund procedures into compliance with federal law. In the absence of lawful definitions and procedures in the promulgated rule, the court enjoined the Colegio from taking action against non-dues-paying lawyers and further held that the Colegio must either end all ideological activity or end compulsory bar membership. On the question of forensic and notarial stamps, whose proceeds the Rule had designated for a set of clearly unobjectionable bar purposes, for bar members' life insurance as well as for "any other purpose comprised within the duties and purposes of the Bar Association," the court held that unless the issue of dues was properly resolved, even the legitimate use of stamp proceeds would be a way of subsidizing ideological activities by allowing more of the voluntary dues to be used for them.

On appeal in Schneider v. Colegio, 917 F.2d 620 (1st Cir.1990), the Court of Appeals for the most part agreed with the district court. It did, however, delay the implementation of the injunction to allow six months for a modification of the Rule, during which period 100% of the dissenters' dues would be held in escrow. The appellate court did not agree with the district court on the question of the stamp proceeds, and saw a problem arising only if the Colegio became a voluntary bar, in which case stamp proceeds used for traditional core purposes benefiting the legal profession would not inure to the benefit of all lawyers in Puerto Rico. If, however, the Colegio worked out a lawful dues-refund mechanism, the devotion of stamp revenues to core purposes and the allocation of consensual dues revenues to objectionable activities would not implicate the First Amendment. With that partial reversal ...