Opinion

Hamidi v. Service Employees International Union Local 1000

Court: District Court, E.D. California
Filed: Oct 25, 2019
Cited by: 0 cases
Authority: More cited than 17.3%

“The Ninth Circuit has thus 12 far expressed no position regarding the proper standard.”

How later courts described this case

“The Ninth Circuit has thus 12 far expressed no position regarding the proper standard.”
“Wyatt 6 explicitly stated that it did not decide whether or not the 7 private defendants before it might assert, not immunity, but a 8 special ‘good-faith’ defense . . . we do not express a view on 9 this last-mentioned question.”

Written by the judges who cited it.

The opinion

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

KOUROSH KENNETH HAMIDI, et al., No. 2:14-cv-00319 WBS KJN

13 AND THE CLASS THEY SEEK TO

REPRESENT,

Plaintiffs, MEMORANDUM AND ORDER RE:

15 CROSS-MOTIONS FOR SUMMARY

v. JUDGMENT, MOTION TO DECERTIFY

16 THE CLASS, AND MOTION TO

SERVICE EMPLOYEES INTERNATIONAL AMEND CLASS CERTIFICATION

17 UNION LOCAL 1000, ORDER

18 Defendant.

20 ----oo0oo----

21 Plaintiffs Kourosh Kenneth Hamidi et al., and the class

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

23 against defendants Service Employees International Union Local

24 1000 (“Local 1000”) and the California state controller,1

1 After this court dismissed plaintiffs’ claims for

declaratory and injunctive relief, plaintiffs had no claims

27 remaining against the state controller. The court thus dismissed

the party from this lawsuit. (See June 18, 2019 Order at 16

28 (Docket No. 139).)

1 alleging that Local 1000’s ‘opt-out’ system for collecting

optional union fees violates the Employees’ First Amendment

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

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

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. 138 S. Ct.

at 2486. 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. (Id. at

11, ¶ 12). Nonmembers could choose to pay the “full” fair share

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

1 not germane to collective bargaining, or a “reduced” fair share

fee, which defendant used to fund only expenditures that were

germane to collective bargaining. (See Decl. of Brian Calderia

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

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. (Local 1000 Resp. to SUMF at 11-12, ¶

13.) Employees who did not object were charged the full fair

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

1).) 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

1 rights. (Compl. at 1-2, ¶ 1 (Docket No. 1).) 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. (See May 22, 2015 Order at 3 n.3, 20 (Docket No.

53).) 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. (See Feb.

8, 2017 Order at 14, 18 (Docket No. 94).) After the Court

decided Janus, this court dismissed as moot plaintiffs’ claims

for declaratory and injunctive relief. (See June 18, 2019 Order

at 16 (Docket No. 139).) 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

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. (Pls.’ Mot.

in Supp. Summ. J. at 46 (Docket No. 149-1).) 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. This court agrees that

such a defense applies here.

A. Section 1983 Good-Faith Defense

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

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.”).

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.” 518 F.3d 1090, 1097

(9th Cir. 2008). 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.

1 2019).

B. 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. No court,

however, has read Clement so rigidly. “[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-

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

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

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

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 pre-

Harris collection of fair share fees,” because the union “relied

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

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

1996)).

This court previously “express[ed] skepticism that the

good faith defense depends on more than the union’s actual

compliance with then-existing law.” 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.

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

1 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. (See Feb. 8, 2017

Order at 12-13 (Docket No. 94).) 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.

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

1 notice for years regarding [the] Court’s misgivings about Abood.”

Janus, 138 S. Ct. at 2484. But “reading the tea leaves of

Supreme Court dicta has never been a precondition to good faith

reliance on governing law.” Cook, 364 F. Supp. 3d at 1192. To

find otherwise would force defendants to engage in

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

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

28 2 The court’s ruling here resolves plaintiffs’ “sole

D : r 24, 201 □

ated Octobe 019 ak.

3 WILLIAM B. SHUBB

UNITED STATES DISTRICT JUDGE

27 remaining claim.” (Joint Status Report at 1 (Docket No. 143).)

Defendant’s motion to decertify the class and plaintiffs’ motion

28 to amend the class certification order are therefore moot.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.