Wednesday, January 11, 2012
The Supreme Court heard oral argument yesterday in Knox v. SEIU, the case testing whether a union had to issue a special opt-out notice to nonmembers when it increased its assessment mid-year. The case comes to the Court on nonmembers' First Amendment challenge--whether the failure to provide a special opt-out notice violates their speech and associational rights not to support the union's political (i.e., non-bargaining) activities. But as the argument yesterday suggests, it could turn on something much more practical: how to craft a rule that would give a union enough flexibility to adjust its assessments mid-year, while still respecting nonmembers' rights to opt-out of supporting the union's political agenda. Or it could turn on something else entirely: standing.
In the ordinary course of things, the union collects dues once a year and issues a notice--a Hudson notice, after Chicago Teachers Union v. Hudson (1986)--that allows nonmembers to opt-out of dues that would go to the union's political expenditures (but not dues that would go to the union's collective bargaining expenditures). The union here regularly anticipated dues for the next year based on audited prior year expenditures and issues a Hudson notice that reflected that. This was a practical solution, designed to estimate the union's coming year expenditures while protecting nonmembers from supporting the union's political activities that nonmembers may not wish to support. No party challenged this basic procedure.
But in 2005, shortly after the union issued its 2005 Hudson notice, the union increased its assessment slightly to fund its opposition to anti-union ballot initiatives. The union did not issue a separate Hudson notice for this increase, although nonmembers could have objected under the 2005 Hudson notice and the 2006 Hudson notice. (The 2005 Hudson notice did not include the mid-year increase, but it did say that dues and fees were subject to change. The 2006 Hudson notice did include the mid-year increase, because, as above, the estimate in each year's Hudson notice is based on last year's actual audited expenditures.)
Nonmembers claimed that this violated their First Amendment rights to not support causes they don't agree with. Again: They didn't challenge the fundamental Hudson process, just the lack of a Hudson notice for the 2005 mid-year increase.
The district court granted summary judgment for the plaintiffs, but the Ninth Circuit reversed. After the Court granted cert., the union sent all nonmembers a notice that permitted them to obtain a refund of the increased assessment and a $1 bill, representing nominal damages. The union claimed that this satisfied the district court order and argued that it mooted the case.
The argument yesterday focused a good deal on mootness. The plaintiffs tried to persuade the Court that the union's mid-year increase without a separate Hudson notice was capable of repetition but evading review, while the union argued that its eleventh-hour notice gave the plaintiffs all the relief they could possible get even under the district court's order. There were skeptics on the bench on both sides. For example, Justices Ginsburg and Kagan both suggested that the capable-of-repetition exception usually applies to cases involving injunctive relief, and this case doesn't. On the other side, Chief Justice Roberts and Justice Kagan both suggested that the plaintiffs said that the union's notice didn't satisfy the district court's order--a live dispute--and that the union can't say that there is no standing at the Supreme Court, while there is standing at the district court (even if only on the question whether the union's notice satisfied its order).
Despite the significant focus on mootness, however, Chief Justice Roberts also moved both parties along to the merits. On the merits, the Court treated the question as a choice between (1) a forced loan by the nonmembers to the union to support political causes they don't wish to support and (2) a practical solution that gives the union flexibility to adjust assessments mid-year while still respecting nonmembers' right to opt-out.
The plaintiffs pressed for a rule that would require a Hudson notice each time there was a "material alteration in the obligations that are imposed upon nonmembers," without regard to the reason for the assessment. But it's not clear that that rule is workable, or that it is efficient, or that it would benefit (and not hurt) nonmembers. Justice Breyer put it this way:
It's peculiar, because in the circumstances where the extra assessment is all going to go to chargeable [non-political] activities, in fact that means economically speaking the following year the objector will be better off, not worse off, because there is a higher pecentage of the total fee that's being paid to chargeable activities.
Response: "Justice Breyer, the reason for the notice is these people may not trust the union. They -- they may choose to challenge the amount of the fee."
This may not be enough, though. The plaintiffs also conceded that the union could shift funds mid-year to use more than anticipated on political activities--without a separate Hudson notice. This practice would be even less transparent than the practice that the union followed here. This point did not go unnoticed, particularly by Justices Breyer and Kagan. Justice Sotomayor added that she didn't see how the mid-year increase amount to a loan, especially when nonmembers could object with the next Hudson notice and when in any event they ultimately benefit from it (for the reasons that Justice Breyer said).
On the other side, Justice Alito described the practice here as a forced loan, without interest, for activities that nonmembers may not support. He said that the stakes could be quite different for nonmembers, if the percent of nonchargeable and chargeable costs are reversed, and asked "why should [nonmembers] not be given a notice at that time and given the opportunity not to give what would be at a minimum an interest-free loan for the purpose of influencing an election campaign?"
Justices Breyer and Sotomayor returned to the practical: they wanted to know from the union how much of a hassle it would be to provide a special notice with each mid-year increase. Answer: the magnitude of the hassle may be high, but the union's attorney didn't know how often unions would have to do this.
Justice Kennedy reminded the union that there are significant First Amendment interests at issue here:
And the point there was that you're taking someone's money contrary to that person's conscience. And that's what the First Amendment stands against.
Justice Kennedy also threw a bit of a curve ball toward the end of the union's argument, suggesting that "even collective bargaining involves a core political judgment." This position would erase the distinction between chargeable and nonchargeable costs and could undo even the routine Hudson practice that the union employs. No party went so far, and no other Justice picked up on this point, however. It's not even clear that Justice Kennedy intended much by it: he prefaced this line of questioning with "just in the way of background."
If the Court avoids fully wrestling with Justice Kennedy's larger question and thus avoids potentially upsetting a routine practice that nobody seems to object to (as seems nearly certain), and if the Court gets past mootness (as seems far less certain), the case will likely come down to the practical: How best to allow the union some flexibility, while respecting nonmembers' rights to opt-out. But Justice Kennedy's point is a reminder of the stakes; and even in a very practical calculus, for this Court it could mean a thumb on the scale of the nonmembers.