International Union of Operating Engineers Local 139 et al v. Schimel et al
Filing
25
ORDER signed by Judge J P Stadtmueller on 9/26/16: granting 16 Defendants' Motion for Judgment on the Pleadings; denying 9 Plaintiffs' Motion for Preliminary Injunction; and, denying 19 Defendant's Motion to File an Amicus Brief. (cc: all counsel) (nm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL 139 and
INTERNATIONAL UNION OF OPERATING
ENGINEERS LOCAL 420,
Case No. 16-CV-590-JPS
Plaintiffs,
v.
BRAD D. SCHIMEL,
JAMES R. SCOTT, and
ANTHONY ARNOLD,
ORDER
Defendants.
This case represents Wisconsin’s chapter in the ongoing, national
debate about the role that labor unions play in the modern workplace
and the extent to which they may be regulated by both state and
federal governments. In 2015, Wisconsin joined the ranks of many sister
states when it passed its own species of a so-called “right to work” law.
See WIS. STAT. § 111.04 (Supp. 2016) (enacted Mar. 9, 2015), available at
https://docs.legis.wisconsin.gov/statutes/statutes/111/I/04 (last visited Sep. 9,
2016) (“Act 1”). In their complaint, the plaintiffs claim, under 42 U.S.C.
§ 1983, 29 U.S.C. § 158(a)(3), and Article III, § 2 of the United States
Constitution, that a specific provision of that right to work law, WIS. STAT.
§ 111.04(3)(a)(3), is preempted by Section 14(b) of the National Labor
Relations Act (“NLRA”), 29 U.S.C. §164(b) (2012), and violates the Fifth
Amendment of the United States Constitution. (Docket #1 ¶ 1). The specific
subsection at issue in this case—Section 111.04(3)(a)(3)—prohibits unionsecurity agreements that require employees to “[p]ay any dues, fees,
assessments…to a labor organization.” In short, therefore, neither union
membership, nor the payment of “any dues”—including those related to
collective
bargaining,
contract
administration,
and
grievance
processing—may be compelled from Wisconsin workers. WIS. STAT.
§ 111.04(3)(a)(1)-(3).
This case now comes before the Court on three motions: (1) the
plaintiffs’ motion for a preliminary injunction (Docket #9); (2) the defendants’
motion for judgment on the pleadings (Docket #16); and (3) five alleged
Amici’s motion for leave to file an amicus brief (Docket #19). As more fully
explained below, the disposition of this matter is largely controlled1 by the
Seventh Circuit’s recent decision with respect to Indiana’s right to work law.
See generally Sweeney v. Pence, 767 F. 3d 654 (7th Cir. 2014).2 On the basis of
Sweeney, and for the reasons stated herein, the Court concludes that the
defendants’ motion for judgment on the pleadings should be granted in its
entirety, thereby rendering the plaintiffs’ motion for a preliminary injunction
moot. Furthermore, as the Amici do not add any materially significant
arguments to the resolution of this case, the Court will exercise its discretion
in denying the motion for leave to file an amicus brief.
1
Indeed, the litigants also acknowledge the same. (Docket #9 at 7; Docket #21
at 4-5, 12, 18-20; Docket #22 at 8).
2
As explained in further detail below, the Seventh Circuit has ruled directly
on the preemption claim at issue in this case; the takings claim was not presented
on appeal, though the majority offered “considered dicta” on the topic. See Reich v.
Continental Casualty Co., 33 F.3d 754, 757 (7th Cir. 1994) (discussing the strong
persuasive value of “considered dicta”).
Page 2 of 24
1.
BACKGROUND
Due to the unique posture of this case, the Court will first provide a
brief summary as to where the matter stands both factually and procedurally.
To that end, the following sections will be devoted to providing a overview
of: (1) the parties in this case; (2) the relevant legal landscape; (3) the
plaintiffs’ challenge to Act 1; and (4) the Seventh Circuit’s Sweeney decision.
1.1
The Parties
The plaintiffs are two unions that operate in the State of Wisconsin.
(Docket #1 ¶¶ 7-8).3 More specifically, the International Union of Operating
Engineers Local 139 (“Local 139”) and the International Union of Operating
Engineers Local 420 (“Local 420”) are labor organizations representing
approximately nine thousand, and two thousand, working men and women
in Wisconsin, respectively. (Docket #1 ¶¶ 7-8). Together, the unions are suing
Brad Schimel—in his official capacity as Attorney General for the State of
Wisconsin—and James R. Scott—in his official capacity as the chair of the
Wisconsin Employment Relations Commission.4 (Docket #1 ¶¶ 9-10).
The plaintiffs allege that, combined, they have represented the
interests of Wisconsin workers for more than 200 years. (Docket #1 ¶ 20). As
part of their duties, they each purport to spend significant financial and
3
As this matter comes before the Court on the defendants’ motion for
judgment on the pleadings, the Court will rely solely on the facts contained in the
complaint or answer. See N. Indiana Gun & Outdoor Shows, Inc. v. City of South Bend,
163 F.3d 449, 452 (7th Cir. 1998) (“As the title of the rule implies, Rule 12(c) permits
a judgment based on the pleadings alone.”).
4
According to the complaint, the Wisconsin Employment Relations
Commission is responsible for enforcing and resolving disputes arising under
Wisconsin Statutes § 111 et seq., including Wisconsin’s right to work law. (Docket
#1 ¶ 10).
Page 3 of 24
human resources representing every employee in the bargaining units for
which they have been elected the “exclusive representative,” union members
and non-members alike. (Docket #1 ¶¶ 21-29). Each of the plaintiffs represent
Wisconsin employees under the auspices of various collective bargaining
agreements (“CBAs”) with employers across the state. These CBAs are renegotiated according to a specific time schedule every couple of years.
(Docket #1 ¶ 22). The plaintiffs allege that their contract administration and
grievance related services are available equally to all members of the
bargaining unit, regardless of an individual’s union membership status.
(Docket #1 ¶ 30).
Prior to the enactment of Wisconsin’s right to work law, each of the
plaintiffs had, in each of their CBAs with Wisconsin employers, a union
security clause that required all bargaining unit employees to pay their “fair
share” for the union’s representation, i.e., what the Court will refer to
hereinafter as “representation fees.” (Docket #32). In other words, prior to
Act 1, unions were permitted to charge non-union member employees in the
bargaining unit for representation fees associated with: (1) CBA negotiation;
(2) contract administration; and (3) grievance services. (Docket #1 ¶ 32). As
a consequence of the enactment of Act 1, however, labor unions in Wisconsin
have been prohibited from negotiating agreements that require employees
pay representation fees. (Docket #1 ¶¶ 33-40).
As a result of this changed legal landscape, beginning in
approximately May of 2016, Local 139 has proposed to several Wisconsin
employers to enter into a “Fair Representation Fee Agreement” that contains
Page 4 of 24
what is, in essence, a conditional representation fee provision.5 (See Docket
#1 ¶¶ 33-36). These agreements may only be enforced if Local 139 obtains a
final judgment that Wisconsin’s law cannot be applied to preclude their
enforcement. (Docket #1 ¶¶ 33-36). Thus far, eight employers have signed
such an agreement with Local 139. (Docket #1 ¶ 33). Two employers have
refused to do so, citing Act 1. (Docket #1 ¶ 33). Though Local 420 does not
purport to have entered into any similar type of agreements, it would like the
opportunity to negotiate Fair Representation Fee Agreements with each of
the employers with whom it has a CBA. (Docket #1 ¶ 39).
1.2
Act 1 and the NLRA
After a highly publicized and protracted political battle, the Wisconsin
state legislature passed into law Act 1, which provides, inter alia, that:
No person may require, as a condition of obtaining or
continuing employment, an individual to do any of the
following:
1.
Refrain or resign from membership in, voluntary
affiliation with, or voluntary financial support of
a labor organization.
5
According to the complaint, these provisions would require, as a condition
of employment, all employees in the bargaining unit to pay a service fee to
contribute to the cost of the union’s representation. (Docket #1 ¶ 33). The service
fees would purportedly be used by the respective union solely to pay for costs
related to negotiating and administering the collective bargaining agreement,
including investigating and processing grievances. (Docket #1 ¶ 34). At the end of
each calendar year, the union would then provide to all bargaining unit employees
an accounting of how the service fees were spent. (Docket #1 ¶ 35). The Union
would also provide annual notice to all bargaining unit members, as well as
individual notice to all new hires, regarding the calculation of the fair
representation fee and the employee’s right to challenge the calculation of that fee,
including the right to an appeal before an impartial arbitrator paid for by the
Union. (Docket #1 ¶ 35).
Page 5 of 24
2.
Become or remain a member of a labor
organization.
3.
Pay any dues, fees, assessments, or other charges or
expenses of any kind or amount, or provide anything
of value, to a labor organization.
4.
Pay to any 3rd party an amount that is in place
of, equivalent to, or any portion of dues, fees,
assessments, or other charges or expenses
required of members of, or employees
represented by, a labor organization.
WIS. STAT. § 111.04(3)(a) (emphasis added). Here, the Unions do not dispute
their inability to require employees’ “member[ship].” See WIS. STAT.
§ 111.04(3)(a)(2). Rather, the plaintiffs challenge subsection (3), which
precludes unions from obtaining reimbursement for service fees associated
with union representation expenses (i.e., those costs that accrue from
collective bargaining, agreement administration, and grievance processing).
Without delving into the merits of the parties’ arguments, a brief
summary of relevant federal law—namely that which is embodied in Section
8(a) and 14(b) of the NLRA—is important. In 1935, the federal government
intervened to regulate what had once been a tumultuous relationship
between laborers and management through the passage of the NLRA (also
known as the Wagner Act). See 49 Stat. 449, as amended, 29 U.S.C. § 151 et seq.
In general, the NLRA established the right of workers to unionize and
bargain collectively through a democratic system of exclusive representation.
See 29 U.S.C. § 159(a). Flowing from this system of exclusive representation,
the Supreme Court interpreted the NLRA to also impose upon unions a
“corresponding duty…to exercise fairly the power conferred upon [them]
[o]n behalf of all those for whom [they] act[], without hostile discrimination
Page 6 of 24
against them.” Steele v. Louisville & N.R. Co., 323 U.S. 192, 203 (1944)
(emphasis added); see also Ford Motor Co. v. Huffman, 345 U.S. 330, 337–38
(1953) (extending duty of fair representation to the NLRA). In other words,
“[t]he duty of fair representation requires the exclusive bargaining
representative (i.e., the union) to ‘serve the interests of all members [of the
bargaining unit] without hostility or discrimination toward any, to exercise
its discretion with complete good faith and honesty, and to avoid arbitrary
conduct.’” Sweeney, 767 F.3d at 672 (J. Wood, dissenting) (quoting Vaca v.
Sipes, 386 U.S. 171, 177 (1967)). This duty extends not only to the negotiation
of CBAs, but to all union representational activity. See Air Line Pilots Ass'n,
Int'l v. O'Neil, 499 U.S. 65, 67 (1991); see also Abood v. Detroit Bd. of Educ., 431
U.S. 209, 221 (1977) (“The tasks of negotiating and administering a
collective-bargaining agreement and representing the interests of employees
in settling disputes and processing grievances are continuing and difficult
ones.…in carrying out these duties, the union is obliged fairly and equitably
to represent all employees…union and nonunion, within the relevant unit.”).
In 1947, “[c]oncerned that the Wagner Act had pushed the labor
relations balance too far in favor of unions,” Chamber of Commerce v. Brown,
554 U.S. 60, 67 (2008), Congress amended the NLRA through the
Taft–Hartley Act. See 61 Stat. 136. On the one hand, various provisions
contained in the NLRA—and specifically to Section 8(a)(3)—were aimed at
combating the evils associated with the “closed shop,” that is, a species of
union-security agreement in which employers agreed to hire only those
persons who were already union members. See 29 U.S.C. § 158(a)(3) (“It shall
be an unfair labor practice for an employer…by discrimination in regard to
hire or tenure or employment or any term or condition of employment to
Page 7 of 24
encourage or discourage membership in any labor organization.…[p]rovided,
[t]hat nothing in this subchapter…shall preclude an employer from making
an agreement with a labor organization…to require as a condition of
employment membership therein.”) (emphasis added); see also Commc'ns
Workers of Am. v. Beck, 487 U.S. 735, 745-48 (1988) (collecting relevant
legislative history and explaining that “[p]rior to the enactment of the
Taft-Hartley Act…§ 8(a)(3) of the Wagner Act…permitted majority unions
to negotiate ‘closed shop’ agreements requiring employers to hire only
persons who were already union members”). On the other hand, the 1947
amendments to the NLRA also addressed Congress’s “recogni[tion] that in
the absence of a union-security provision ‘many employees sharing the
benefits of what unions are able to accomplish by collective bargaining will
refuse to pay their share of the cost.’” Id. at 749 (quoting NLRB v. Gen. Motors
Corp., 373 U.S. 734, 740-41 (1963)) (emphasis added).
Despite this ban on the closed shop, “the amended Section 8(3)
‘shield[ed] from an unfair labor practice charge less severe forms of
union-security arrangements.…’” Sweeney, 767 F.3d at 659 (quoting Gen.
Motors Corp., 373 U.S. at 739). Thus, for example, Section 8(a)(3) permits
unions to collectively bargain for a “union shop,” that is, “a workplace in
which the employer is free to hire anyone, but new employees can be
required to join the union after hire.” Id. at 682 (J. Wood, dissenting).
However, while Section 8(a)(3) permits union security agreements in which
all employees must become union “members” as a condition of continued
employment, at the same time, “dues-paying nonmember employees” may not
be compelled to fund “activities unrelated to collective bargaining, contract
Page 8 of 24
administration, or grievance adjustment….’” Beck, 487 U.S. at 738 (emphasis
added). 6
In what would eventually spawn decades of litigation regarding the
interplay between federal and state labor regulations, the NLRA was also
amended to include a related provision, namely, Section 14(b). See 29 U.S.C.
§ 164(b). This provision provides that “‘nothing in this Act shall be construed
as authorizing the execution or application of agreements requiring
membership in a labor organization as a condition of employment in any State
or Territory in which such execution or application is prohibited by State or
Territorial law.” 29 U.S.C. § 164(b) (emphasis added). According to the
Supreme Court, Section 14(b) “was designed to prevent other sections of the
Act from completely extinguishing state power over certain union-security
arrangements.” Retail Clerks Int'l Ass'n, Local 1625, AFL-CIO v. Schermerhorn,
373 U.S. 746, 751 (1963) (“Retail Clerks I”); see also Retail Clerks Int'l Ass'n, Local
1625, AFL-CIO v. Schermerhorn, 375 U.S. 96, 101 (1963) (“Retail Clerks II”) (“In
light of the wording of [Section] 14(b) and this legislative history, we
conclude that Congress in 1947 did not deprive the States of any and all
power to enforce their laws restricting the execution and enforcement of
union-security agreements.”). And, though Section 8(3) and Section 14(b)
“unquestionably…overlap to some extent,” the Supreme Court left open the
question of “[w]hether they are perfectly coincident.…” Retail Clerks I, 373
U.S. at 751-52 (concluding that—under Section 14(b) and the rule announced
6
In Beck, the distinction between “nonmembers” and “members” was indeed
a relevant one. Id. at 758-61. Though the majority in Sweeney did not address this
distinction, the dissent found it both relevant and instructive. See Sweeney, 767 F.3d
at 673–84 (J. Wood, dissenting).
Page 9 of 24
in General Motors Corp.—states may ban “agency shop” agreements by which
employees have an “obligation to pay initiation fees and regular
dues,.…[w]hatever may be the status of less stringent union-security
arrangements.…”) (emphasis added).
1.3
The Plaintiffs Challenge Wisconsin Act 1
It is against the complex regulatory backdrop outlined above that the
plaintiffs challenge Section 111.04(3)(a)(3). (Docket #1 ¶¶ 44-50). More
precisely, the Unions argue that federal labor law—namely, the NLRA, 29
U.S.C. § 164(b)—preempts Section 111.04(3)(a)(3). (Docket #1 ¶¶ 44-47).
Specifically, they argue that Section 111.04(3)(a)(3) prohibits unions from
entering “into an agreement [with employers] that requires, as a condition
of employment, that all employees in the bargaining unit, regardless of
membership status, pay a service fee to cover the union’s representational
expenses,” which they define as those “fair share” expenses that are solely
dedicated to collective bargaining, contract administration, and grievance
services. (Docket #1 ¶¶ 13, 30). And, since Section 111.04(3)(a)(3) attempts to
regulate concerted activities that are arguably or actually protected or
prohibited by the NLRA (namely, Section 14(b)), the plaintiffs claim that Act
1 is preempted and violates 42 U.S.C. § 1983.
Next, the plaintiffs argue that Section 111.04(3)(a)(3) effects an
unconstitutional taking and violates the Fifth Amendment. (Docket #1 ¶¶ 4850). They base this claim on the interplay between: (1) the unions’ obligation
under federal law to fairly represent all persons in the bargaining unit, and
(2) Wisconsin’s prohibition on the collection of representation fees. (Docket
#1 ¶¶ 4, 48-50). In other words, the plaintiffs claim that in being compelled
to provide equal representational services to non-dues-paying and nonPage 10 of 24
representation fee-paying persons within their bargaining unit, Act 1
effectuates a “taking” of their property. See U.S. Const. amend. V (providing
that “private property [shall not] be taken for public use, without just
compensation”).
1.4
The Seventh Circuit Decides Sweeney
In Sweeney, the Seventh Circuit was presented with similar, though not
identical, challenges to Indiana’s right to work law. 767 F.3d at 654. Like Act
1, Indiana’s statute prohibits employers from requiring an individual to: “(1)
[b]ecome or remain a member of a labor union; [and] (2) [p]ay dues, fees,
assessments, or other charges of any kind or amount to a labor
organization.…” Id. at 657 (citing Ind. Cod. § 22-6-6-8). In a 2-1 decision, the
Seventh Circuit affirmed the district court’s dismissal of the case on the
grounds that Section 8 of Indiana’s right to work law was not preempted
under the NLRA. Id. at 658. Though it was not necessary to the decision, the
majority likewise concluded that the Indiana statute did not constitute a
taking. Id.
With regard to the preemption issue, the majority first interpreted the
text and legislative history of the NLRA to allow states wide latitude to
regulate unions. Id. at 659–60. Focusing on the text of the NLRA, the court
rejected the argument that Section 14(b) permits states ban only those unionsecurity agreements that require “full membership,” that is, agreements
compelling employees to pay “full membership fee[s]” as opposed to
agreements which limit the fees paid by nonmembers to representation fees.
Id. at 660. To the contrary, relying on Beck and General Motors, Corp., the
majority interpreted the “financial core” of union “membership” under
Section 8(a)(3) to comprise only the payment of “representation fees,”
Page 11 of 24
namely,
“those
fees
germane
to
collective bargaining, contract
administration, and grievance adjustment.” Id at 661. Under this view,
because: (1) “membership” under Section 8(a)(3) and 14(b) should be
interpreted consistently; and (2) Section 14(b) allows states to prohibit
agreements requiring “membership,” then states “necessarily” have the
power to “prohibit[] agreements that require employees to pay
Representation Fees.” Id. With regard to legislative history, the Court found
persuasive the fact that at the time of the Taft-Hartley’s passage in 1947,
twelve states had right to work laws in effect, some of which included
language similar to that which was presented in Section 8 of Indiana’s right
to work law. Id. at 662-63. Thus, having passed the NLRA at a time when
right to work laws like Indiana’s were in existence, Congress must not have
intended to overrule such state conduct. Id. In sum, therefore, similar to the
conclusion reached by the D.C. Circuit in 1982, Int'l Union of the United Ass'n
of Journeymen & Apprentices of the Plumbing & Pipefitting Indus. of the U.S. &
Canada, Local Unions Nos. 141,229,681, & 706 v. N.L.R.B., 675 F.2d 1257,
1267–68 (D.C. Cir. 1982), the court concluded that the Indiana right to work
law was not preempted under federal labor law. Id. at 665.
Second, though no arguments under the Fifth Amendment were
advanced by the union plaintiffs on appeal, the majority also concluded that
Indiana’s right to work law did not work an unconstitutional taking because
“the union is justly compensated by federal law’s grant to the Union the right
to bargain exclusively with the employer.” Id. at 666. In other words,
Indiana’s right to work law did not constitute a taking because, under the
NLRA, the plaintiffs’ federal duty to fairly represent all unit employees
Page 12 of 24
during the collective bargaining process was “compensated” by their
exclusive “seat at the negotiation table.” Id.
Chief Judge Wood, in dissent, reached two wholly distinct conclusions
with respect to the preemption and takings issues. Id. at 671-85. The dissent
first outlined the basic structure of the NLRA and presented the economic
“free riding” problem that arises if certain persons in the bargaining unit
receive federally mandated services (pursuant to the duty of fair
representation) without having to pay the corresponding representation fees
to cover those costs. Id. at 671-74. Applying Phillips v. Washington Legal
Foundation, 524 U.S. 156 (1998), and Brown v. Legal Foundation of Washington,
538 U.S. 216 (2003), as analytical guideposts,7 Chief Judge Wood began her
analysis by explaining that because Indiana law compels one private party
(namely, representation fee-paying union members) to give property to
another private party (namely, non-representation fee-paying nonmembers),
the Indiana law must be analyzed as a taking under the Fifth Amendment.8
7
Phillips and Brown both addressed the fate of interest income generated by
funds contained in lawyers’ trust accounts (IOLTA’s). In those cases, the Court
concluded that: (1) income generated on those accounts were indeed the private
property of clients, 524 U.S. at 160, 538 U.S. at 217; and (2) any action transferring
that private property into the hands of another must be analyzed under the takings
framework, 524 U.S. at 172, 538 U.S. at 235.
8
Indeed, Chief Judge Wood acknowledged the obvious distinction between
the subject matter of the IOLTA cases (namely, money), and the subject matter of
the unions’ dispute, (namely, services), but concluded that distinction was one
without a difference. Sweeny, 767 F.3d at 674-76. After all, as acknowledge by Justice
Scalia in Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507, 556 (1991) (concurring in
judgment in part, dissenting in part), services too have economic value and can
therefore suffer from the paradigmatic common good or “free riding” problem. Id.
Page 13 of 24
Although neither the text of Section 14(b) nor the language in the
Supreme Court’s NLRA jurisprudence answered the precise legal question
presented by the parties, Chief Judge Wood analyzed the text of the NLRA,
case law, and the legislative history of the NLRA to reach the conclusion that
Section 14(b) preempted Indiana’s right to work law. Sweeney, 767 F.3d at
680. At bottom, Chief Judge Wood relied on a different interpretation of Beck,
General Motors, Corp., Retail Clerks I, and Retail Clerks II to conclude that
requiring a person employed under the auspices of a CBA to pay their “fair
share” for services related to collective bargaining and contract
administration is not enough to deem that person a union “member” as that
term is used in Section 8(a)(3) and 14(b). Id. at 678-81. In this way, the dissent
maintained a distinction between what may and may not be compelled of
union “members,” as opposed to non union “members,” all while arguably
maintaining a balance between: (1) a union’s federal duty to represent both
members and nonmembers equally; and (2) an employee’s right to refrain
from having to join the union as a full dues-paying member. The virtue of
such an interpretation, according to the dissent, is that it not only comported
with the text of the NLRA, but it also satisfied the court’s duty to avoid
interpreting statutes in such a way as to create a constitutional takings
problem. Id. at 684-85.
Approximately six months after the Seventh Circuit decided Sweeney,
Wisconsin passed Act 1.
2.
LEGAL STANDARD
“After the pleadings are closed—but early enough not to delay
trial—a party may move for judgment on the pleadings.” FED . R. CIV . P. 12(c);
see also Bartlett v. City of Chicago Sch. Dist. #299, 40 F. Supp. 3d 959, 963 (N.D.
Page 14 of 24
Ill. 2014) (“A Rule 12(c) motion for judgment on the pleadings permits a
party to move for judgment after both the plaintiff’s complaint and the
defendant’s answer have been filed.”). “Only when it appears beyond a
doubt that the plaintiff cannot prove any facts to support a claim for relief
and the moving party demonstrates that there are no material issues of fact
to be resolved will a court grant a Rule 12(c) motion.” Moss v. Martin, 473
F.3d 694, 698 (7th Cir. 2007).When ruling on such a motion, the Court must
“take the facts alleged in the complaint as true, drawing all reasonable
inferences in favor of the plaintiff.” Pisciotta v. Old Nat. Bancorp, 499 F.3d 629,
633 (7th Cir. 2007).
3.
ANALYSIS
The plaintiffs argue that Act 1: (1) is preempted by the NLRA; and (2)
effects an unconstitutional taking under the Fifth Amendment. (See generally
Docket #1). The parties do not dispute, and the Court agrees, that Sweeney’s
holding with respect to the preemption claim and considered dicta with
respect to the takings claim all but control the disposition of the motions that
now come before this Court. See Reich, 33 F.3d at 757 (explaining that in the
case of recent, considered dictum, “it would be reckless to think the Court
likely to adopt a contrary view in the near future. In such a case the dictum
provides the best, though not an infallible, guide to what the law is, and it
will ordinarily be the duty of a lower court to be guided by it.”). Accordingly,
this Court concludes, under the holding and reasoning announced by the
majority in Sweeney, that Act 1: (1) is not preempted by the NLRA; and (2)
does not work an unconstitutional taking. The defendants’ motion for
judgment on the pleadings will, therefore, be granted, and the plaintiffs’
motion for a preliminary injunction will be denied as moot.
Page 15 of 24
Nonetheless, the defendants also argue that this Court should refrain
from ruling on the plaintiffs’ takings claim because it is not “ripe.” (Docket
#21 at 13-18). Though this may be an academic question at this juncture in the
litigation (indeed, the defendants argue that even if the claim is ripe, they
prevail under Sweeney, a conclusion with which this Court agrees), the Court
finds the most prudent course is to address the ripeness issue.9 For the
reasons outlined below, the Court concludes that the plaintiffs’ takings claim
is indeed ripe.
The Fifth Amendment, made applicable to the states by the Fourteenth
Amendment, provides that no “private property [shall] be taken for public
use, without just compensation.” U.S. CONST . amend. V. “While it confirms
the State’s authority to confiscate private property, the text of the Fifth
Amendment imposes two conditions on the exercise of such authority: the
taking must be for a ‘public use’ and ‘just compensation’ must be paid to the
owner.” Brown, 538 U.S. at 231-32. However, “[t]he Fifth Amendment does
not proscribe the taking of property; it proscribes taking without just
compensation.” Williamson Cnty. Reg’l Planning Comm’n., 473 U.S. at 194
9
The plaintiffs suggest the Court need not address the defendants’ argument
that their takings claim is unripe because the doctrine announced in Williamson
Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson Cnty., 473 U.S. 172, 194
(1985) (explained in further detail below), is prudential, rather than jurisdictional,
in nature. (Docket #22 at 11). Indeed, the Court has confirmed that it decided
Williamson Cnty. with prudential, rather than jurisdictional, concerns in mind. See
Forseth v. Vill. of Sussex, 199 F.3d 363, 368 n.7 (7th Cir. 2000) (citing Suitum v. Tahoe
Reg’l Planning Agency, 520 U.S. 725, 733 n.7 (1997)). However, while “ripeness ‘is
drawn from both Article III limitations on judicial power and from prudential
reasons…[,]’ Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993), the
prudential nature of the test does not give ‘the lower federal courts license to
disregard’ it.” Murphy v. Vill. of Plainfield, 918 F. Supp. 2d 753, 760 (N.D. Ill. 2013)
(quotingPeters v. Vill. of Clifton, 498 F.3d 727, 734 (7th Cir. 2007)).
Page 16 of 24
(emphasis added).
“This principle
makes
clear
that,
ordinarily,
compensation, not an injunction, is the appropriate remedy for a taking that
satisfies the public use requirement.” Peters, 498 F.3d at 731 (citing Patel v.
City of Chicago, 383 F.3d 569, 574 (7th Cir. 2004)).
In general, the “exhaustion of state administrative remedies [is]
not…required as a prerequisite to bringing an action pursuant to § 1983.”
Patsy v. Board of Regents of Florida, 457 U.S. 496, 516 (1982); see also Wudtke v.
Davel, 128 F.3d 1057, 1063 (7th Cir. 1997) (“[T]here is no general exhaustion
requirement for § 1983 plaintiffs.”). However, in the context of claims under
the Takings Clause, “[b]ecause ‘[n]o constitutional violation occurs until just
compensation has been denied,’ Williamson Cnty., 473 U.S. at 195 n.13,…a
special ripeness doctrine…applies….” Peters, 498 F.3d at 731. Under this
prudential ripeness doctrine—which was formally articulated by the
Supreme Court in Williamson County—federal courts are precluded “from
adjudicating land use disputes until: (1) the regulatory agency has had an
opportunity to make a considered definitive decision[;] and (2) the property
owner exhausts available state remedies for compensation.” Forseth, 199 F.3d
at 368.
However, the principles announced in Williamson County are not iron
clad, and “[d]espite the strong presumption that damages, not injunctive
relief, is the appropriate remedy in a Takings Clause action…there are
limited circumstances in which injunctive relief is available.” Id. For this
reason, the Supreme Court has recognized certain exceptions to the twoprong ripeness test, which commonly arise in the context of cases in which
injunctive and/or declaratory relief is sought. See, e.g., Daniels v. Area Plan
Com'n of Allen Cnty., 306 F.3d 445, 449 (7th Cir. 2002) (seeking a declaration
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under Section 1983 that a certain zoning plan violated the Takings Clause);
see also Williamson Cnty., 473 U.S. at 193-94 (distinguishing the applicability
of the ripeness doctrine in remedial cases, such as where “an aggrieved
property owner…seek[s] a declaratory judgment regarding the validity of
zoning and planning actions”). More specifically, if the pursuit of state court
relief would be futile, plaintiffs are not required to seek state court
intervention. See Peters, 498 F.3d at 732 (citing Daniels, 306 F.3d at 456). In
other words, “[i]f a property owner demonstrates that state procedures for
obtaining just compensation are either unavailable or inadequate, the claim
is immediately ripe in federal court.” Id. In addition, the “Supreme Court has
held that many facial challenges to legislative action authorizing a taking can
be litigated immediately in federal court.” Id. (citing San Remo Hotel, L.P. v.
City & Cnty. of San Francisco, 545 U.S. 323, 345 (2005); Yee v. City of Escondido,
503 U.S. 519 (1992)); see also Holliday Amusement Co. of Charleston v. South
Carolina, 493 F.3d 404, 406-07 (4th Cir. 2007) (“[T]he state procedures
requirement does not apply to facial challenges to the validity of a state
regulation.”). “Such ‘facial’ challenges to regulation are generally ripe the
moment the challenged regulation or ordinance is passed, but face an ‘uphill
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battle.…’” Suitum, 520 U.S. at 736 n.10 (citing Keystone Bituminous Coal Assn.
v. DeBenedictis, 480 U.S. 470, 495 (1987)).10
Here, it is undisputed that the plaintiffs have not sought any form of
relief from Wisconsin state courts and, therefore, fail to satisfy either prong
of the Williamson County ripeness test. Nonetheless, for the reasons described
below, the Court concludes that Williams County is inapplicable in this case
because the plaintiffs’ allegations are best understood as comprising a facial
challenge to Act 1.
In order to mount a facial attack in the takings context, a claimant
must allege that the “mere enactment” of a statute violates the Takings
Clause of the Fifth Amendment. Keystone, 480 U.S. at 494 (describing “an
important distinction between a claim that the mere enactment of a statute
10
The parties also dispute whether a third exception to Williamson County
applies, i.e., whether claims that allege a taking for a private purpose are exempt
from the ripeness doctrine. (Docket #21 at 15 n.3; Docket #22 at 11-13; Docket #24
at 6-9); cf. Sweeney, 767 F.3d 674 (construing the plaintiffs’ Takings Clause claim as
a “private use” claim). Indeed, while other Courts of Appeal have concluded that
“private use” takings claims need not comply with the Williamson County ripeness
requirements, see Carole Media LLC v. New Jersey Transit Corp., 550 F.3d 302, 308 (3d
Cir. 2008) (collecting cases), this Court reads the Seventh Circuit’s language in
Daniels to preclude a similar conclusion. See Daniels, 306 F.3d at 453 (“Unlike some
circuits, this Circuit has consistently maintained a strict requirement that Takings
Clause litigants must first take their claim to state court even when plaintiffs, such
as the Daniels, are alleging a taking for private purpose.”). But see Peters, 498 F.3d
at 732 (indicating potential tension with the language in Daniels by acknowledging
that “it is well accepted that, when the government has taken property for a
private, rather than a public, use, injunctive or declaratory relief may be
appropriate”). Because the plaintiffs cannot avoid the application of Williams
County under Daniels, it is unnecessary to address whether the plaintiffs’ purported
“private use” claim is exempt from the ripeness test articulated above.
Page 19 of 24
constitutes a taking and a claim that the particular impact of government
action on a specific piece of property requires the payment of just
compensation”). In assessing a facial challenge, courts will look to the
regulation’s “‘general scope and dominant features, leaving other specific
provisions to be dealt with as cases arise directly involving them.’” Garneau
v. City of Seattle, 147 F.3d 802, 807 (9th Cir. 1998) (quoting Village of Euclid v.
Ambler Realty Co., 272 U.S. 365, 397 (1926)). In order to prevail on a facial
takings claim, a plaintiff must be able to establish that the piece of legislation
in question “‘deprived [the owner] of economically viable use of [his or her]
property.’” Suitum, 520 U.S. at 736 (quoting Hodel v. Virginia Surface Mining
& Reclamation Assn., Inc., 452 U.S. 264, 297 (1981)). And, the plaintiff must
“establish that no set of circumstances exists under which the Act would be
valid.” Daniels, 306 F.3d at 467.
In this case, the Court reads the substance of the plaintiffs’ allegations
as comprising a facial attack on Act 1. At bottom, they argue that Act 1
categorically prohibits them from lawfully seeking compensation from
nonmembers operating under CBAs across the state for services that the
unions are compelled to render to them under federal law. (Docket #1 ¶¶ 3-4,
16-18, 37, 40-43). In other words, so long as Act 1 remains “on the books,”
there are “no set of circumstances” in which the plaintiffs may obtain “just
compensation” for services that they are compelled to give. Daniels, 306 F.3d
at 467; see also Carole Media LLC, 550 F.3d at 308 (describing how the
exceptions to the Williamson County ripeness doctrine exist because “forcing
the plaintiff to pursue state ‘remedial’ procedures would be an exhaustion
requirement, a requirement that Williamson Cnty. explicitly does not
impose”) (citing Williamson County, 473 U.S. at 193-94). And, merely by
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enacting Act 1, the Wisconsin legislature allegedly deprived the plaintiffs,
and unions across the state, from the opportunity to receive just
compensation for these services, all of which constitute an appropriate basis
for a facial challenge.
While the defendants argue that the plaintiffs cannot prove that Act
1 deprives the unions of “economically viable use of” their property (because
no “taking” has occurred), such an argument is flawed for two reasons. First,
predicating a ripeness ruling on the conclusion that no “taking” has occurred
puts the cart before horse. In other words, the defendants cite to no binding
precedent which holds that the threshold ripeness inquiry requires a fullblown merits analysis of the purported takings claim. Second, this Court is
satisfied that the complaint sufficiently alleges that the plaintiffs’ property,
namely, their services, will be deprived of economic value if they are
rendered for free. (Docket #1 ¶ 31). Indeed, the Supreme Court has
acknowledged the economic value of the services that unions render to
bargaining unit employees. See Abood, 431 U.S. at 221 (“The tasks of
negotiating and administering a [CBA] and representing the interests of
employees in settling disputes and processing grievances are continuing and
difficult ones. They often entail expenditure of much time and money.”); see
also Sweeney, 767 F. 3d at 473 (“In our situation, the nonmember of the union
will reap the benefits of being represented by the union during a grievance,
for instance, but he will pay nothing for those benefits, which might include
a lay representative, maybe even a lawyer, investigative services, and so on–
all things that cost the union real dollars to provide.”). Accordingly, properly
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read as a facial challenge to Act 1,11 the Court concludes that the plaintiffs’
takings claim is ripe for adjudication by this Court.12
On a final note, the Court must address an outstanding motion
relating to the filing an amicus brief. (Docket #19). Amici Curiae Anthony
Arnold, Randy Darty, Todd Momberg, Daniel Sarauer, and Daniel Zastrow
are Wisconsin residents and private sector employees currently employed
within bargaining units exclusively represented by a labor union. (Docket #19
at 2). They are not union members and they do not wish to be represented by
a labor union or financially support a labor union. (Docket #19 at 2). Act 1,
therefore, applies to each of these employees’ respective bargaining units,
and each employee wants Act 1 to be upheld and not ruled unconstitutional.
(See generally Docket #19).
11
Indeed, the Court acknowledges the defendants’ assertion that the words
contained in the plaintiffs’ complaint state that, “as applied,” Act 1 is preempted
and constitutes an unconstitutional taking. (Docket #1 ¶¶ 46-47, 50). This language,
however, does not control whether the substance of the complaint constitutes a
facial or as-applied challenge. Indeed, the nature of the plaintiffs’ claim indicates
that not only will they suffer an economic loss as a result of Wisconsin Act 1, but
so too will any union elected as the exclusive bargaining representative of
Wisconsin workers. (See Docket #1 ¶ 16). While Act 1, certainly “applies” to the
plaintiffs, so too does it equally “apply”—and work the same unconstitutional
taking—on every other union in the state. Thus, this is not the multifactor “ad hoc,
factual inquiry” described in Keystone. 480 U.S. at 495; see also Planned Parenthood of
Se. Pennsylvania v. Casey, 505 U.S. 833, 894 (1992) (“Legislation is measured for
consistency with the Constitution by its impact on those whose conduct it
affects…[Therefore] the proper focus of constitutional inquiry is the group for
whom the law is a restriction, not the group for whom the law is irrelevant”).
12
Because the Court concludes that the plaintiffs assert a facial challenge
against Act 1, it need not address the parties’ arguments regarding the futility
doctrine.
Page 22 of 24
A federal district court’s decision to grant amicus status is
discretionary. Leigh v. Engle, 535 F. Supp. 418, 420 (N.D. Ill. 1982) (citing 3A
C.J.S. Amicus Curiae § 3). Relevant factors in determining whether to allow
an entity the privilege of being heard as an amicus include whether the
proffered information is “timely” or “useful.” Id. While the Court certainly
appreciates the unique perspective of the Amici, their proposed amicus brief
adds no materially significant argument that was not or could not have been
raised by the State, and “in effect merely extend[s] the length of the [State’s]
brief.” Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1063 (7th
Cir. 1997) (“The vast majority of amicus curiae briefs are filed by allies of
litigants and duplicate the arguments made in the litigants’ briefs.…”). The
Seventh Circuit has concluded that “[s]uch amicus briefs should not be
allowed.” Id. Thus, in the interest of avoiding further delay and needless
briefing, the Court will deny the Amici’s request for leave to file an amici
curiae brief. (Docket #19).
4.
CONCLUSION
In sum, the Court concludes that the majority opinion in Sweeney
compels the Court to grant the defendants’ motion for judgment on the
pleadings in its entirety. (Docket #16). Further, it is on this basis that the
Court will deny the plaintiffs’ motion for a preliminary injunction as moot.
(Docket #9). Finally, the Court will deny the Amici’s motion for leave to file
an amicus brief, as it provides no useful arguments related to the disposition
of the outstanding motions. (Docket #19).
Accordingly,
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IT IS ORDERED that the defendants’ motion for judgment on the
pleadings (Docket #16) be and the same is hereby GRANTED;
IT IS FURTHER ORDERED that the plaintiffs’ motion for a
preliminary inunction (Docket #9) be and the same is hereby DENIED as
moot; and
IT IS FURTHER ORDERED that the motion for leave to file an
amicus brief (Docket #19) be and the same is hereby DENIED.
The Clerk of the Court is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 26th day of September, 2016.
BY THE COURT:
J.P. Stadtmueller
U.S. District Judge
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