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Fleck v. Wetch

United States Court of Appeals, Eighth Circuit

August 17, 2017

Arnold Fleck Plaintiff- Appellant
Joe Wetch, President of the State Bar Association of North Dakota, et al. Defendants - Appellees

          Submitted: April 4, 2017

         Appeal from United States District Court for the District of North Dakota - Bismarck

          Before LOKEN, COLLOTON, and KELLY, Circuit Judges.

          LOKEN, Circuit Judge.

         In 2014, North Dakota attorney Arnold Fleck volunteered time and money to support Measure 6, a state ballot measure to establish a presumption that each parent is entitled to equal parental rights. North Dakota has an integrated bar, meaning that Fleck and other licensed attorneys must maintain membership in and pay annual dues to the State Bar Association of North Dakota ("SBAND") as a condition of practicing law.[1] When Fleck learned that SBAND was using his compulsory fees to oppose Measure 6, he filed a lawsuit seeking declaratory and injunctive relief, asserting three First Amendment claims. First, he alleged that SBAND's procedures for allowing members to object to non-germane expenditures failed to comply with the minimum safeguards required by Keller v. State Bar of California, 496 U.S. 1 (1990), and Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292 (1986). This claim was resolved by a November 2015 settlement in which SBAND revised its license fees statement. Second, Fleck alleged that an integrated bar violates his freedoms not to associate and to avoid subsidizing speech with which he disagrees. The district court dismissed this claim as barred by Keller. Fleck concedes we are bound by Keller, so we need not further address this issue. Third, he alleged that SBAND's "opt-out" procedure violates his right to affirmatively consent before subsidizing non-germane expenditures. The district court[2] granted summary judgment dismissing this claim, the subject of Fleck's appeal. Reviewing this ruling de novo, we affirm.

         1. The First Amendment Landscape.

         In International Association of Machinists v. Street, 367 U.S. 740, 774 (1961), a divided Supreme Court upheld the validity of a Railway Labor Act provision authorizing "union shop" collective bargaining agreements that require railroad employees to pay union dues, fees, and assessments as a condition of continued employment. Four Justices upheld the statute by construing it as "denying the unions the right, over the employee's objection, to use his money to support political causes which he opposes, " id. at 768 (opinion of Brennan, J., for the Court); a fifth Justice agreed to this remedy "dubitante, " id. at 779 (Douglas, J., concurring). That same day, a divided Court held that a State may constitutionally condition practicing law on membership in an integrated bar association. There was no majority opinion, and Justice Brennan's four-Justice plurality did not address whether an integrated bar association may use a member's compulsory fees to support political activities that he or she opposes. See Lathrop v. Donohue, 367 U.S. 820, 843-844 (1961).

         In Abood v. Detroit Board of Education, 431 U.S. 209 (1977), applying Street and First Amendment principles, the Court held that public sector unions may collect compulsory "agency fees" from non-members within the bargaining unit to fund activities germane to collective bargaining, but may not use those fees to fund non-germane political or ideological activities that a non-member employee opposes. In Hudson, the Court held that the procedure a union adopts to implement this distinction must "be carefully tailored to minimize the infringement" of a non-member's First Amendment rights. 475 U.S. at 303. The procedure at issue in Hudson did not meet this standard "because it failed to minimize the risk that nonunion employees' contributions might be used for impermissible purposes . . . failed to provide adequate justification for the advance reduction of dues, and . . . failed to offer a reasonably prompt decision by an impartial decisionmaker." Id. at 309. Constitutional requirements include, the Court declared, "an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker, and an escrow for the amounts reasonably in dispute while such challenges are pending." Id. at 310.

         The Supreme Court returned to the issue of integrated bar compulsory fees in Keller, concluding that an integrated bar can, consistent with the First Amendment, use a member's compulsory fees to fund activities germane to "regulating the legal profession and improving the quality of legal services, " but not to fund non-germane activities the member opposes. 496 U.S. at 13-14. Lacking an adequate record to address procedural alternatives in detail, the Court stated that "an integrated bar could certainly meet its Abood obligation by adopting the sort of procedures described in Hudson." Id. at 17.

          2. SBAND's Post-Settlement Procedures.

         SBAND concedes that its expenditures in support of Measure 6 were "non-germane" under Keller, so the issue in this case is whether SBAND has implemented constitutionally adequate procedures to protect the First Amendment rights of North Dakota attorneys who oppose a non-germane expenditure. When Fleck filed this action, SBAND's Legislative Policy provided that a member who dissented from a position on any legislative or ballot measure matter could receive a refund of that portion of his or her dues which would otherwise have been used in that activity. The Policy did not advise if members could opt out of paying for non-germane expenses in advance, inform members of the breakdown between germane and non-germane expenses, or allow members to challenge SBAND's calculation of germane expenses before an impartial decisionmaker. In response to this lawsuit, SBAND adopted revised policies that Fleck agreed comply with the minimum safeguards required by Keller and Hudson, and the district court dismissed Fleck's first claim without prejudice. Accordingly, it is the revised policies that are relevant to Fleck's appeal of the "opt-out" issue.

         Each year, SBAND sends a Statement of License Fees Due. Unless exempt, a member must pay annual dues of either $380, $350, or $325, depending on years of practice. The Statement lists this figure as the "annual license fee." The member certifies that he or she has complied with rules governing trust accounts and malpractice insurance, and checks boxes to enroll in specialized SBAND sections for additional fees, contribute to the bar foundation, and donate to a pro bono fund. The following new section appears near the end of the revised Statement:

OPTIONAL: Keller deduction relating to nonchargeable activities. Members wanting to take this deduction may deduct $10.07 if paying $380; $8.99 if paying $350; and $7.90 if paying $325. (See Insert.)

         SBAND computes this deduction as a percentage of annual license fees based on the percentage of the prior year's fees ...

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