Hamidi et al v. Service Employees International Union Local 1000 et al

Filing 160

ORDER signed by Senior Judge William B. Shubb on 10/24/2019 GRANTING 148 Motion for Summary Judgment. CASE CLOSED (Reader, L)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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KOUROSH KENNETH HAMIDI, et al.,
AND THE CLASS THEY SEEK TO
REPRESENT,

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Plaintiffs,
v.
SERVICE EMPLOYEES INTERNATIONAL
UNION LOCAL 1000,

No. 2:14-cv-00319 WBS KJN

MEMORANDUM AND ORDER RE:
CROSS-MOTIONS FOR SUMMARY
JUDGMENT, MOTION TO DECERTIFY
THE CLASS, AND MOTION TO
AMEND CLASS CERTIFICATION
ORDER

Defendant.

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Plaintiffs Kourosh Kenneth Hamidi et al., and the class

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they represent (“the Employees”), brought this class action

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against defendants Service Employees International Union Local

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1000 (“Local 1000”) and the California state controller,1

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After this court dismissed plaintiffs’ claims for
declaratory and injunctive relief, plaintiffs had no claims
remaining against the state controller. The court thus dismissed
the party from this lawsuit. (See June 18, 2019 Order at 16
(Docket No. 139).)
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alleging that Local 1000’s ‘opt-out’ system for collecting
optional union fees violates the Employees’ First Amendment
rights.

v. AFSCME, Council 31, 138 S. Ct. 2448 (2018), requiring
employees’ affirmative consent prior to any collection of union
fees, the court is now presented with the parties’ cross-motions
for summary judgment, defendant’s motion to decertify the class,
and plaintiffs’ motion to amend the class certification order.
I.

Factual and Procedural Background

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In light of the Supreme Court’s recent decision in Janus

On June 27, 2018, the Supreme Court decided Janus and
held that payment to a union may not be collected from an
employee without the employee’s affirmative consent.
at 2486.

138 S. Ct.

The decision overruled Abood v. Detroit Board of

Education, 431 U.S. 209 (1977), and its progeny, which
established that unions may require nonmembers to pay a fee to
the union that would be used to fund expenditures germane to
collective bargaining.
Plaintiffs are employees of the State of California.
(Local 1000 Resp. to Statement of Undisputed Material Facts
(“SUMF”) at 7, ¶ 6 (Docket No. 152-1).)

Local 1000 is the

exclusive representative for collective bargaining purposes of
plaintiffs and other state employees.

(Id. at 8, ¶ 8).

Before Janus, employees represented by Local 1000 could
either join the union as dues-paying members (id. at 11, ¶ 12) or
remain nonmembers and pay Local 1000 a ‘fair share’ fee.
11, ¶ 12).

(Id. at

Nonmembers could choose to pay the “full” fair share

fee, which Local 1000 used to fund expenditures both germane and

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not germane to collective bargaining, or a “reduced” fair share
fee, which defendant used to fund only expenditures that were
germane to collective bargaining.

(“Caldeira Decl.” ¶ 3 (Docket No. 37).)

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Non-germane

expenditures, also known as non-chargeable expenditures,
included, for example, contributions to “political or ideological
causes only incidentally related to the terms and conditions of
employment.”

(Local 1000 Resp. to SUMF at 12, ¶ 13 (Docket No.

152-1)).

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(See Decl. of Brian Calderia

Under that pre-Janus system, in deciding whether to
charge a nonmember the full or reduced fair share fee, Local 1000
had, with the state’s authorization and assistance, implemented
an ‘opt-out’ system.

(Id. at 3-4, ¶ 1).

Prior to each annual

fee cycle, Local 1000 sent nonmembers, a notice (“Hudson notice”)
informing them that they will be charged the full fair share fee
for the upcoming cycle unless they opt out by sending back a
written statement stating that they wish to be charged only the
reduced fair share fee.
13.)

Employees who did not object were charged the full fair

share fee.
1).)

(Local 1000 Resp. to SUMF at 11-12, ¶

(Pls.’ Mot. in Sup. Summ. J. at 3-4 (Docket No. 149-

The day after Janus was decided, the California State

Controller’s Office cancelled the deduction of agency fees from
all nonconsenting public employees.

(See June 18, 2019 Order at

5 (Docket No. 139).)
On January 31, 2014, plaintiffs brought this action
under 42 U.S.C. § 1983 alleging that Local 1000’s fee collection
system violated nonmembers’ First and Fourteenth Amendment

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rights.

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This court first

certified plaintiff’s cause of action for class treatment to the
extent it is brought as a facial challenge to the
constitutionality of Local 1000’s opt-out requirement and
procedure.
53).)

(See May 22, 2015 Order at 3 n.3, 20 (Docket No.

Then, evaluating Local 1000’s fee collection system under

pre-Janus precedent, this court granted summary judgment in favor
of defendants and denied plaintiffs’ challenge to the
constitutionality of Local 1000’s opt-out requirement.
8, 2017 Order at 14, 18 (Docket No. 94).)

(See Feb.

After the Court

decided Janus, this court dismissed as moot plaintiffs’ claims
for declaratory and injunctive relief.
at 16 (Docket No. 139).)

(See June 18, 2019 Order

Plaintiff’s “sole remaining claim” is

“for retrospective monetary relief.”

(Joint Status Report at 1

(Docket No. 143).)
II.

Defendant’s Motion for Summary Judgment

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(Compl. at 1-2, ¶ 1 (Docket No. 1).)

Plaintiff seeks repayment of all fees –- both germane
and non-germane to collective bargaining -- collected from
nonmembers prior to the Court’s decision in Janus.
in Supp. Summ. J. at 46 (Docket No. 149-1).)

(Pls.’ Mot.

Defendant does not

contest that Local 1000’s opt-out system to collect agency fees
from nonmembers violates nonmembers’ First Amendment rights under
Janus.

Defendant instead asserts a good faith defense to § 1983

liability because the law at the time of Local 1000’s collection
of agency fees permitted such a system.
such a defense applies here.
A.

Section 1983 Good-Faith Defense

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This court agrees that

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In Wyatt v. Cole, the Supreme Court did not foreclose
“the possibility that private defendants faced with § 1983
liability . . . could be entitled to an affirmative defense based
on good faith.”

also Richardson v. McKnight, 521 U.S. 399, 413–14 (1997) (“Wyatt
explicitly stated that it did not decide whether or not the
private defendants before it might assert, not immunity, but a
special ‘good-faith’ defense . . . we do not express a view on
this last-mentioned question.”).

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Wyatt v. Cole, 504 U.S. 158, 169 (1992); see

The Supreme Court in Janus “itself did not specify
whether the plaintiff was entitled to retrospective monetary
relief for conduct the Supreme Court had authorized for the
previous forty years.”

Cooley v. California Statewide Law Enf't

Ass'n, 385 F. Supp. 3d 1077, 1081 (E.D. Cal. 2019) (citing Janus,
138 S. Ct. at 2486).

The controlling law in the Ninth Circuit,

however, recognizes a good faith defense in shielding private
defendants from liability in § 1983 actions.

In Clement v. City

of Glendale, the Ninth Circuit granted summary judgment in favor
of defendant –- a towing company -- as to the plaintiff’s § 1983
claim because the defendant “did its best to follow the law” in
that “the tow was authorized by the police department, conducted
under close police supervision and appeared to be permissible
under both local ordinance and state law.”
(9th Cir. 2008).

518 F.3d 1090, 1097

Since Clement, “[t]he threshold question of

whether the good faith defense is available to private parties in
§ 1983 actions has been answered affirmatively by the Ninth
Circuit.”

Cook v. Brown, 364 F. Supp. 3d 1184, 1190 (D. Or.

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2019).
B.

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Application of Good-Faith Defense
1.

Legal Standard

Plaintiffs construct a five-element good-faith test out
of the Ninth Circuit’s decision in Clement to argue that
defendant’s actions do not qualify for the defense.
however, has read Clement so rigidly.

No court,

“[T]he [good faith]

defense has been applied by the Ninth Circuit without a precise
articulation of its contour.”

Cook v. Brown, 364 F. Supp. 3d

1184, 1192 (D. Or. 2019); see also Carey v. Inslee, 364 F. Supp.
3d 1220, 1228–29 (W.D. Wash. 2019) (“The Ninth Circuit has thus
far expressed no position regarding the proper standard.”).
Courts instead apply “traditional principles of equity and
fairness.”

Cook, 364 F. Supp. 3d at 1192.

Because union

defendants relied on 40-year precedent, and because unions cannot
retract the bargaining they carried out on plaintiffs’ behalf,
district courts have concluded that requiring the unions to
refund the collected fees would be inequitable.

See, e.g., Babb,

378 F. Supp. 3d at 876; Cook, 364 F. Supp. 3d at 1192; Crockett
v. NEA-Alaska, 367 F. Supp. 3d 996, 1008 (D. Alaska 2019).
In the fair share fee context, “every district court to
consider whether unions that collected agency fees prior to Janus
have a good-faith defense to § 1983 liability have answered in
the affirmative.”

Babb v. California Teachers Ass'n, 378 F.

Supp. 3d 857, 872 (C.D. Cal. 2019) (collecting cases).

Most

recently, this court found that, because unions enjoyed Supreme
Court and statutory authorization, the unions that followed then-

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valid law were “entitled to the good-faith defense as a matter of
law.”

(E.D. Cal. June 20, 2019).

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Hernandez v. AFSCME California, 2019 WL 2546195, at *2

Although courts have not articulated a standard to
evaluate good faith after Janus, the district courts that have
considered the issue have found good faith where the union
complied with then-existing Supreme Court precedent and state
law.

See, e.g., Babb, 378 F. Supp. 3d at 876 (finding good faith

where union defendant relied “on a presumptively valid state
statute” and “the 40-year-precedent of Abood”); Danielson v. Am.
Fed'n of State, Cty., & Mun. Employees, Council 28, AFL-CIO, 340
F. Supp. 3d 1083, 1086 (finding good faith where “the Union
Defendant followed the then-applicable laws”); Cook, 364 F. Supp.
3d at 1192 (finding that “[i]t would be highly inequitable to
hold [the union defendant] retroactively liable” where the union
collected fees in accordance with state law and Supreme Court
precedent); Crockett, 367 F. Supp. 3d 996, 1006 (same).
Moreover, the limited circuit-level guidance available
concludes that a union’s compliance with previously valid law
suffices to grant a good faith defense to § 1983 liability.

In

Jarvis v. Cuomo, 660 F. App'x 72, (2d Cir. 2016), the Second
Circuit considered a union’s § 1983 liability for fair share fees
collected before the Supreme Court ruled in Harris v. Quinn, 573
U.S. 616 (2014), that unions may not compel personal care
providers to pay fair share fees.

The Jarvis court found that

the union was “not liable for damages stemming from the preHarris collection of fair share fees,” because the union “relied

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on a validly enacted state law and the controlling weight of
Supreme Court precedent,” such that “it was objectively
reasonable for [the union] ‘to act on the basis of a statute not
yet held invalid.’”

Cir. 2016) (citing Pinksy v. Duncan, 79 F.3d 306, 313 (2d Cir.
1996)).

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This court previously “express[ed] skepticism that the
good faith defense depends on more than the union’s actual
compliance with then-existing law.”

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Hamidi v. Serv. Employees

Int'l Union Local 1000, 386 F. Supp. 3d 1289, 1300 (E.D. Cal.
2019).

Today, in reliance on the guidance above, this court

makes the standard clear: in the agency fee context, a union’s
compliance with then-existing law indeed suffices to find good
faith.

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Jarvis v. Cuomo, 660 F. App'x 72, 76 (2d

2.

Application to Local 1000’s Opt-Out System

Local 1000 is entitled to the good-faith defense
because its opt-out system complied with then-valid Supreme Court
precedent.

Prior to Janus, this court specifically found that

Local 1000’s opt-out procedure was consistent with both Ninth
Circuit and Supreme Court decisions on agency fee collection.
(Feb. 8, 2017 Order at 14, 18 (Docket No. 94).)

When plaintiffs

filed suit, it was well established that unions may require
nonmembers to pay the portion of the fair share fees that are
used to fund expenditures germane to collective bargaining.
Abood, 431 U.S. at 235.

Further, this court found that the Ninth

Circuit’s finding in Mitchell v. Los Angeles Unified Sch. Dist.,
namely “that the Constitution does not mandate a system under

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which nonmembers . . . ‘opt in,’” 963 F.2d 258, 260 (9th Cir.
1992), was consistent with Supreme Court jurisprudence and was
therefore the controlling law in the circuit.
Order at 12-13 (Docket No. 94).)

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Defendants “are entitled to

rely” upon the Supreme Court’s binding precedent and Local 1000
did so here.

See Lee v. Ohio Educ. Ass'n, 366 F. Supp. 3d 980,

983 (N.D. Ohio 2019).
Local 1000 also complied with then-valid state law.
The Dills Act (“the Act”) expressly permitted the collection of
fair share fees.

See Cal. Gov’t Code § 3513(k).

Specifically,

the Act permitted Local 1000 to establish procedures for a
nonmember employee to object to paying the full fair share fee.
Cal. Gov’t Code § 3515.8.

Moreover, the Public Employment

Relations Board issued a regulation requiring exclusive
representatives like Local 1000 to “provide an annual written
notice to each nonmember who will be required to pay an agency
fee” that includes “procedures for . . . objecting to the payment
of an agency fee amount that includes nonchargeable
expenditures.”

8 C.C.R. § 32992.

Both Supreme Court precedent

and then-valid state law authorized Local 1000 to require
nonmembers to opt out of payment of non-chargeable fees.

Local

1000’s compliance with then-valid law therefore entitles
defendant to a good-faith defense as a matter of law.

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(See Feb. 8, 2017

3.

Local 1000’s Subjective Belief

Plaintiffs contend that defendant did not in fact act
in good faith because they should have known that the Court would
overturn Abood.

Plaintiffs are correct that “unions have been on

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notice for years regarding [the] Court’s misgivings about Abood.”
Janus, 138 S. Ct. at 2484.

Supreme Court dicta has never been a precondition to good faith
reliance on governing law.”

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the Supreme Court's reasoning to avoid future liability.”

Carey,

364 F. Supp. 3d at 1231.
More importantly, evaluating defendant’s October Term
predictions in a good-faith determination would “imperil the rule
of law.”

Cook, 364 F. Supp. 3d at 1193.

Unions that followed

what was then the law –- Abood -- would not be entitled to the
defense, while those that questioned the Supreme Court’s binding
interpretation of the Constitution would walk away unscathed.
See also Danielson, 340 F. Supp. 3d at 1086 (concluding that
consideration of a union’s “subjective anticipation of an
unpredictable shift in the law undermines the importance of
observing existing precedent”).

Defendant need not engage in

telepathy to avail itself of the good faith defense to § 1983
liability.

See Winner v. Rauner, No. 15-cv-7213, 2016 WL

7374258, at *5 (N.D. Ill. 2016).

Instead, as stated above, Local

1000’s compliance with what was then the law is sufficient for a
finding of good faith.
IT IS THEREFORE ORDERED that defendant’s Motion for
Summary Judgment (Docket No. 148) be, and the same hereby is,
GRANTED.2

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To

“constitutional gambling” and “decid[e] if they truly agree with

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Cook, 364 F. Supp. 3d at 1192.

find otherwise would force defendants to engage in

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But “reading the tea leaves of

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The court’s ruling here resolves plaintiffs’ “sole
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Dated:

October 24, 2019

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remaining claim.” (Joint Status Report at 1 (Docket No. 143).)
Defendant’s motion to decertify the class and plaintiffs’ motion
to amend the class certification order are therefore moot.
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