Trees v. Service Employees International Union Local 503

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

STACI TREES, Case No. 6:21-cv-468-SI

Plaintiff, OPINION AND ORDER

v.

SERVICE EMPLOYEES

INTERNATIONAL UNION LOCAL 503,

Defendant.

Rebekah Schultheiss (Millard) and James G. Abernathy, FREEDOM FOUNDATION, PO Box 552,

Olympia, WA 98507. Of Attorneys for Plaintiff.

Stacey M. Leyton, Scott A. Kronland, and Zoe Louise Palitz, ALTSHULER BERZON LLP, 177 Post

Street, Suite 300, San Francisco, CA 94108; and James S. Coon, THOMAS, COON, NEWTON &

FROST, 820 SW Second Avenue, Suite 200, Portland, OR 97204. Of Attorneys for Defendant.

Michael H. Simon, District Judge.

Plaintiff Staci Trees, a state employee, sues Service Employees International Union

Local 503 (“SEIU”), the union she joined in October 2009 and from which she resigned in

December 2020.1 Plaintiff asserts federal civil rights claims under 42 U.S.C. § 1983, a federal

1 Plaintiff originally also asserted claims against both the Oregon Department of

Administrative Services (“DAS”), the state agency that processes union membership information

it receives monthly from SEIU and distributes the information to state agency employers for

payroll processing, and Katy Coba, the Director of DAS (collectively, the “State Defendants”).

On December 8, 2021, the Court granted the State Defendants’ motion to dismiss all claims

against them for lack of Article III standing. ECF 61.

racketeering claim, and state claims of fraud and racketeering. One of the key factual disputes is

Plaintiff’s allegation that SEIU “forged” Plaintiff’s signature in 2016 on a new union

membership agreement and dues authorization form solicited by a union organizer during a

campaign asking members to reaffirm their union membership. SEIU denies any forgery.

After Plaintiff commenced this lawsuit, SEIU filed an unfair labor practices (“ULP”)

complaint against Plaintiff with the Oregon Employment Relations Board (“ERB”), a different

state agency.2 In SEIU’s ULP complaint before the ERB, SEIU alleged that, by filing her state

claims in this federal lawsuit, rather than with the ERB, Plaintiff violated state law. SEIU also

alleged that under ORS § 243.806(10)(a), the ERB must determine the validity of the

disputed 2016 union agreement. The Court stayed this case to allow the ERB to resolve the

dispute. ECF 61. An ERB Administrative Law Judge (“ALJ”) heard the dispute in a three-day

state administrative proceeding and made factual findings that Plaintiff had signed the 2016

agreement and that it was a valid agreement. The Oregon Court of Appeals affirmed the ERB’s

decision, and the Oregon Supreme Court denied Plaintiff’s petition for review.

Now before the Court are three motions by SEIU. First, SEIU moves for leave to file a

supplemental answer asserting collateral estoppel as an affirmative defense to all of Plaintiff’s

claims. Second, SEIU requests judicial notice of documents related to the ERB and Oregon state

court proceedings. Third, SEIU moves for judgment on the pleadings, or in the alternative, for

summary judgment on all of Plaintiff’s claims, arguing that issue preclusion applies such that

Plaintiff fails to state any claims, Plaintiff lacks Article III standing to seek prospective relief,

and Plaintiff fails to state a federal claim. For the following reasons, the Court grants all motions.

2 The ERB has jurisdiction over ULP complaints involving public employers, public

employees, or labor organizations that represent public employees. See Or. Rev. Stat.

(hereinafter “ORS”) § 243.672.

STANDARDS

A. Supplemental Pleadings

Rule 15(d) of the Federal Rules of Civil Procedure provides that “the court may, on just

terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or

event that happened after the date of the pleading to be supplemented.” “The purpose

of Rule 15(d) is to promote as complete an adjudication of the dispute between the parties as

possible.” William Inglis & Sons Baking Co. v. ITT Cont’l Baking Co., 668 F.2d 1014, 1057 (9th

Cir. 1981). Rule 15(d) serves as “a tool of judicial economy and convenience” to “promote the

economical and speedy disposition of the controversy.” Keith v. Volpe, 858 F.2d 467, 473 (9th

Cir. 1988). Leave to permit a supplemental pleading thus is “favored.” Id.

“Motions to amend pursuant to Rule 15(d) should be granted unless undue prejudice to

the opposing party will result.” LaSalvia v. United Dairymen of Ariz., 804 F.2d 1113, 1119 (9th

Cir. 1986) (cleaned up). “In addition to prejudice, courts commonly evaluate the propriety of a

motion to supplement based on factors such as (1) undue delay, (2) bad faith or dilatory motive

on the part of the movant, (3) repeated failure of previous amendments or supplements, and

(4) futility.” Desio v. State Farm Mut. Auto. Ins., 339 F.R.D. 632, 638 (D. Nev. 2021). That is,

“the legal standard for granting or denying a motion to supplement under Rule 15(d) is the same

as the standard for granting or denying a motion under Rule 15(a).” California v. U.S. Dep’t of

Lab., 155 F. Supp. 3d 1089, 1099 (E.D. Cal. 2016) (cleaned up).

B. Motion for Judgment on the Pleadings

A motion for judgment on the pleadings is brought under Rule 12(c) of the Federal Rules

of Civil Procedure. Rule 12(c) allows a party to move for judgment on the pleadings after the

pleadings are closed but early enough not to delay trial. Fed. R. Civ. P. 12(c). “Analysis under

Rule 12(c) is ‘substantially identical’ to analysis under Rule 12(b)(6) because, under both rules, a

court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff

to a legal remedy.” Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d 1147, 1155 (9th

Cir. 2015) (quoting Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012)). Thus, in a

Rule 12(c) motion a court “must accept all factual allegations in the complaint as true and

construe them in the light most favorable to the non-moving party.” Fleming v. Pickard, 581

F.3d 922, 925 (9th Cir. 2009).

Dismissal for failure to state a claim under Rule 12(b)(6) “is proper if there is a ‘lack of a

cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal

theory.’” Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balistreri

v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)). In addition, “to survive a motion to

dismiss, a complaint must contain sufficient factual matter to state a facially plausible claim to

relief.” Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010)

(citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); see also Cafasso, United States ex rel. v.

Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011) (Iqbal standard applies to

review of Rule 12(c) motions).

BACKGROUND

Plaintiff is a public employee in Oregon. Since 2009, she has worked for the Oregon

Department of Transportation (“ODOT”). Defendant SEIU is the exclusive representative of

Plaintiff’s bargaining unit.

In October 2009, Plaintiff signed a union membership agreement that authorized the

deduction of SEIU union dues from her wages. Compl. (ECF 1) ¶¶ 12-13; see also id., Ex. A. On

June 27, 2018, the U.S. Supreme Court issued its decision in Janus v. American Federation of

State, County, & Municipal Employees, Council 31, 585 U.S. 878 (2018), holding that, when

applied to public-sector workers, “fair share” agreements violate an employee’s First

Amendment rights to freedom of association and freedom of speech.3 Plaintiff states that in

July 2018, she informed SEIU that she no longer wanted to be a union member and no longer

wanted union dues deducted from her monthly paycheck. She contends that SEIU never

responded to this alleged communication.

Plaintiff also alleges that in December 2020 she again informed SEIU that she no longer

wanted to be a union member and no longer wanted union dues deducted from her pay. In

response to this communication, SEIU told Plaintiff that she was contractually obligated to pay

union dues through the end of the current annual period, which was February 28, 2021. SEIU

stated that this requirement was contained in a union membership agreement that Plaintiff signed

on an iPad in March 2016. Compl., Ex. C. Plaintiff contends that she did not complete or sign

the 2016 agreement.4 Id. ¶¶ 27-29.

ODOT deducted union dues from Plaintiff’s monthly paychecks from November 1, 2009,

through February 28, 2021. Decl. of Nettie Pye, ¶ 4 (ECF 27) SEIU instructed DAS, through a

monthly membership file, to cease deducting union dues from Plaintiff’s paychecks effective

March 1, 2021, because she was no longer a union member. ODOT stopped deducting union

dues from Plaintiff’s pay at that time and has not deducted union dues from Plaintiff’s pay since

then.

3 A “fair share” agreement is an agreement between a public employer and a union under

which the public entity can “require public employees to pay a fair share of the cost that a union

incurs when negotiating on their behalf over terms of employment” but no part of which may “go

to any of the union’s political or ideological activities.” Janus, 585 U.S. at 931 (Kagan, J.,

dissenting).

4 The original agreement signed by Plaintiff in 2009, which Plaintiff admits signing, did

not contain any similar timing requirements for discontinuing Plaintiff’s dues.

On March 29, 2021, Plaintiff filed this lawsuit against SEIU and the State Defendants.

Against all Defendants, Plaintiff, under 42 U.S.C. § 1983, alleged violations of her constitutional

rights of freedom of association, freedom of speech, and due process. In addition, Plaintiff

alleged against only SEIU fraud, federal racketeering,5 and state racketeering,6 based on

Plaintiff’s allegation that SEIU “forged” her signature in March 2016. Plaintiff sought monetary

damages against only SEIU, and prospective relief against all Defendants.

On June 8, 2021, SEIU filed with the ERB its ULP complaint against Plaintiff. ECF 30

¶ 2. In that complaint, SEIU alleged that a union organizer visited Plaintiff’s home on the

evening of March 22, 2016, and after Plaintiff spoke with the organizer, Plaintiff signed a new

membership agreement with her handwritten signature captured electronically by iPad. SEIU

further alleged that the 2016 membership agreement signed by Plaintiff provides authorization of

dues deductions that may only be revoked after the first year “not less than thirty (30) and not

more than forty-five (45) days prior to the end of any annual period or the termination of the

contract between my employer and the Union, whichever occurs first.” ECF 30 ¶ 8. Based on

these allegations, SEIU asserted three claims against Plaintiff: (1) that the ERB must resolve the

issue of the validity of the disputed 2016 dues authorization under ORS § 243.806(10)(a);7

5 Plaintiff asserts this claim under the federal Racketeer Influenced and Corrupt

Organizations Act (“RICO”), 18 U.S.C. § 1964, which Plaintiff erroneously calls the “Racketeer

Influenced and Corrupt Practices Act.” Compl. at 16.

6 Plaintiff asserts this claim under Oregon’s state-version of RICO, the Oregon Racketeer

Influenced and Corrupt Organization Act, ORS § 166.715 et seq., which Plaintiff erroneously

calls the “Oregon Racketeer Influenced and Corrupt Practices Act.” Compl. at 18.

7 ORS § 243.806(10)(a) provides: “If a dispute arises between the public employee and

the labor organization regarding the existence, validity or revocation of an authorization for the

deductions and payment described under subsections (1) and (2) of this section, the dispute shall

be resolved through an unfair labor practice proceeding under ORS 243.672.” (emphasis

(2) that Plaintiff violated ORS § 243.672(2)(c) by violating ORS § 243.806(10) when Plaintiff

asserted preempted state claims (fraud and state racketeering) against SEIU in Plaintiff’s federal

court complaint, rather than by filing a ULP complaint with the ERB; and (3) that Plaintiff

violated ORS § 243.672(2)(c) by violating ORS § 243.806(6) when Plaintiff attempted to revoke

a valid dues authorization before its termination. Id. ¶¶ 14-18.

While those motions were pending, Plaintiff filed several motions before the ALJ in the

ERB proceeding, seeking to dismiss or stay the ERB proceeding. Those motions were denied,

and the ERB proceeding began on November 3, 2021. That same day, Plaintiff filed a motion for

a temporary restraining order (“TRO”) before this Court, seeking to enjoin the ERB proceeding.

On November 9, 2021, the Court denied the TRO. Trees v. Serv. Emps. Int’l Union Loc. 503, 570

F. Supp. 3d 954 (D. Or. 2021).

On December 8, 2021, the Court granted the State Defendants’ motion to dismiss

Plaintiff’s claims against them for lack of standing and dismissed all claims against State

Defendants. Trees v. Serv. Emps. Int’l Union Loc. 503, 574 F. Supp. 3d 856 (D. Or. 2021). In the

same Opinion, the Court also granted SEIU’s motion to stay the case until after the ERB issued a

final decision in the agency action. Id.

The ERB held a three-day hearing before an ALJ from November 3 to 5, 2021, which

involved witnesses, oral arguments, and post-hearing briefing by both parties. ECF 74-10 at 2,

11-15. On March 8, 2022, the ALJ issued a recommended ruling and proposed order dismissing

SEIU’s complaint and finding that “[Plaintiff]’s signature was not forged on the 2016

added). ORS § 243.672(2)(c) provides that, among other things, it is an unfair labor practice for a

public employee to “[r]efuse or fail to comply with any provision of ORS 243.650 to 243.809.”

membership agreement, and . . . the 2016 membership agreement is valid.” ECF 74-8 at 11. The

ERB adopted this recommendation in an order issued on August 31, 2022. ECF 74-10.

Both parties filed petitions for review with the Oregon Court of Appeals, and the Court of

Appeals affirmed the ERB’s decision on January 24, 2024. SEIU Local 503 v. ST, 330 Or.

App. 310 (2024). Plaintiff then filed a petition for review with the Oregon Supreme Court, which

the Oregon Supreme Court denied on August 29, 2024. ECF 74-13.

DISCUSSION

A. Leave to Supplement Answer

SEIU moves for leave to supplement its answer to assert the affirmative defense of

collateral estoppel, or issue preclusion, which has newly arisen after the conclusion of the ERB

proceeding. SEIU asserts that the Ninth Circuit has held not only that “a preclusion defense that

arises after the pleadings have been filed” can justify leave to amend, but that such a defense

“can be raised only by a motion for leave to file a supplemental answer under Rule 15(d).”

Harbeson v. Parke Davis, Inc., 746 F.2d 517, 520 (9th Cir. 1984). Plaintiff responds that leave to

supplement would be futile. She contends that the issue preclusion defense is “categorically

unavailable” because it would violate her Seventh Amendment right to a jury trial.8

The U.S. Supreme Court has addressed this question and held that the Seventh

Amendment does not bar a finding of preclusion from a court of equity, Parklane Hosiery Co. v.

Shore, 439 U.S. 322, 335 (1979), nor from an administrative agency adjudication, B&B

Hardware, Inc., v. Hargis Industries, Inc., 575 U.S. 138, 140-41 (2015). The Supreme Court

8 Plaintiff argues that there are “many other reasons” why issue preclusion does not apply

in this case, but that she saves them for her response to the motion for judgment on the pleadings.

The Court thus considers only Plaintiff’s Seventh Amendment argument in ruling on SEIU’s

motion for leave to supplement its answer.

held that “the Seventh Amendment does not strip competent tribunals of the power to issue

judgments with preclusive effect,” even considering that administrative agencies, in their modern

form, did not exist at common law. B&B Hardware, 575 U.S. at 150.

Plaintiff acknowledges these cases but argues that the recent Supreme Court decision in

Securities & Exchange Commission v. Jarkesy, 603 U.S. 109 (2024), “leaves [their] conclusion

in question.” Plaintiff concedes that Jarkesy did not address issue preclusion—the Supreme

Court addressed only whether a jury was required to adjudicate a securities fraud case seeking

civil penalties. Id. at 120. But Plaintiff argues that if the SEC “may not, under the Seventh

Amendment, proceed against a defendant before an ALJ, the court cannot possibly apply issue

preclusion to any facts determined by an ALJ without similarly depriving the defendant of his

Seventh Amendment rights.” Such an interpretation overstates the holding in Jarkesy and

contradicts the Supreme Court’s instructions to lower courts that

[i]f a precedent of this Court has direct application in a case, a

lower court should follow the case which directly controls, leaving

to this Court the prerogative of overruling its own decisions. This

is true even if the lower court thinks the precedent is in tension

with some other line of decisions.

Mallory v. Norfolk S. Ry. Co., 600 U.S. 122, 136 (2023) (cleaned up). Thus, even if Plaintiff

thinks that the earlier Supreme Court cases are in tension with Jarkesy, there are directly

controlling cases, Parklane and B&B Hardware, and thus the Court follows those cases.

The Court therefore grants SEIU’s motion to supplement its answer. The Court considers

the supplemented answer in evaluating SEIU’s motion for judgment on the pleadings.

B. Judicial Notice

SEIU requests that the Court take judicial notice of 149 exhibits: briefing, rulings, and

orders in the ERB proceeding and in state court. Plaintiff opposes this request to the extent that

SEIU seeks judicial notice of the facts within the exhibits. SEIU argues that judicial notice can

be taken of factual findings when the preclusive effect of those decisions is at issue.

Under Rule 201 of the Federal Rules of Evidence, a court make take judicial notice of

adjudicative facts that are “capable of accurate and ready determination by sources whose

accuracy cannot be reasonably questioned.” United States v. Ritchie, 342 F.3d 903, 909 (9th

Cir. 2003) (quoting Fed. R. Evid. 201(b)(2)). “[A] court may take judicial notice of matters of

public record without converting a motion to dismiss into a motion for summary

judgment.” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018). In

the preclusion context, a federal court may “[take] judicial notice of a state court decision and the

briefs filed in that court to determine if an issue was raised and decided by the state court for res

judicata purposes.” Manufactured Home Cmtys. Inc. v. City of San Jose, 420 F.3d 1022, 1037

(9th Cir. 2005). This includes administrative agency documents. See Nugget Hydroelectric, L.P.

v. Pac. Gas & Elec. Co., 981 F.2d 429, 435 (9th Cir. 1992) (taking judicial notice of state

administrative agency published decisions). A court may not, however, “take judicial notice of

facts presented in those documents or in court opinions for the purpose of considering those facts

to be established in the case currently before them.” Dauven v. U.S. Bancorp, 390 F. Supp. 3d

9 SEIU’s original request for judicial notice included only 13 exhibits. ECF 75. In

Plaintiff’s response in opposition to SEIU’s motion for judgment on the pleadings, Plaintiff

references the ALJ’s ruling on SEIU’s motion in limine to exclude certain witnesses at the ERB

hearing. See ECF 80 at 25-26. SEIU therefore requests judicial notice of this ruling in its reply in

support of its motion for judicial notice. See ECF 84 at 3 n.2. The Court finds that this additional

request is properly raised and thus includes Exhibit 14, ECF 83-1, in its decision on SEIU’s

request for judicial notice.

1262, 1269 (D. Or. 2019) (citing Wyatt v. Terhune, 315 F.3d 1108, 1114 (9th Cir. 2003)). The

Court thus takes judicial notice of these exhibits to determine what issues were actually litigated

before the ERB and Oregon state courts and how the issues were decided, but does not accept the

underlying facts as true.

C. Judgment on the Pleadings

SEIU moves for judgment on the pleadings. SEIU argues that Plaintiff’s claims are

precluded by the ERB proceeding, and that even if issue preclusion does not apply, Plaintiff

lacks Article III standing to seek prospective relief and fails to state any federal claims. The

Court first addresses whether issue preclusion applies.

1. Standards for Issue Preclusion

“When a state agency acting in a judicial capacity resolves disputed issues of fact

properly before it which the parties have had an adequate opportunity to litigate, federal courts

must give the agency’s factfinding the same preclusive effect to which it would be entitled in the

State’s courts.” Univ. of Tenn. v. Elliott, 478 U.S. 788, 799 (1986) (cleaned up).10

In Oregon, issue preclusion applies when five elements are satisfied: (1) the issue in the

two proceedings is identical; (2) the issue was actually litigated and was essential to a final

10 “It is well established that judicial affirmance of an administrative determination is

entitled to preclusive effect.” Kremer v. Chem. Constr. Corp., 456 U.S. 461, 480 n.21 (1982); see

also McClure v. Santos, 669 F. Supp. 344, 345-46 (D. Or. 1987) (“I find no Oregon caselaw . . .

addressing the question of whether an issue determined by a state appellate court exercising its

power of administrative review, and therefore not applying de novo review, should be given

preclusive effect in a subsequent action. . . . I conclude that if the Oregon Supreme Court were to

address this question, it would follow the ruling of the United States Supreme Court and

conclude that a judicial affirmance of an administrative determination may be given preclusive

effect in a subsequent proceeding.”). Neither SEIU nor Plaintiff, however, discuss the preclusive

effect of the Oregon Court of Appeals decision affirming the ERB order. Because the Court finds

that the ERB proceeding has preclusive effect, the Court does not consider any preclusive effect

of the Oregon Court of Appeals decision.

decision on the merits in the prior proceedings; (3) the party sought to be precluded has had a full

and fair opportunity to be heard on that issue; (4) the party sought to be precluded was a party or

was in privity with a party to the prior proceedings; and (5) the prior proceedings was the type of

proceedings to which this court will give preclusive effect. Nelson v. Emerald People’s Util.

Dist., 318 Or. 99, 104 (1993). “Even where those elements are met, ‘the court must also consider

the fairness under all the circumstances of precluding a party.’” Minihan v. Stiglich, 258 Or.

App. 839, 855 (2013) (quoting State Farm Fire & Cas. Co. v. Century Home Components,

Inc., 275 Or. 97, 110 (1976). “The party asserting issue preclusion bears the burden of proof on

the first, second, and fourth requirements, whereupon the burden shifts to the party against whom

preclusion is asserted to show that the third and fifth requirements are not met.” Thomas v. U.S.

Bank Nat’l Ass’n, 244 Or. App. 457, 469 (2011).

2. Analysis

SEIU argues that all five factors for issue preclusion are met, and thus the Court should

apply issue preclusion to dismiss Plaintiff’s claims. Plaintiff concedes that the proceedings

involved the same parties, but disputes that the remaining four factors are satisfied. Plaintiff also

argues that fairness considerations counsel against preclusion. The Court addresses the factors in

turn.

a. Identical Issues

Oregon courts have adopted “a strict standard for the ‘identity of issues’ requirement and

require that ‘the precise question was raised and determined in the former suit.’” Engquist v. Or.

Dep’t of Agric., 478 F.3d 985, 1007 (9th Cir. 2007) (quoting State v. Hunt, 161 Or. App. 338

(1999)). In other words, the “relevant factual issues” determined in the prior proceeding must be

“identical to” the factual issues raised in the later dispute. Marshall v. PricewaterhouseCoopers,

LLP, 316 Or. App. 610, 621-22 (2021).

In the ERB’s decision, it stated that “it is undisputed that SEIU and [Plaintiff] had a

dispute as to whether her 2016 authorization for dues deductions existed and was valid, as well

as whether and how she could revoke it. SEIU sought resolution of that dispute through an unfair

labor practice proceeding.” 74-10 at 3. The ERB went on to make a finding of fact that Plaintiff

signed the 2016 membership card, and a conclusion of law that the parties entered into a valid

dues deduction authorization agreement in 2016 based on Plaintiff’s signature on the card. Id.

at 4-5, 11-15. The Oregon Court of Appeals affirmed this finding as supported by substantial

evidence. SEIU Local 503, 330 Or. App. at 318-19. These findings and conclusions are identical

to a factual issue raised in Plaintiff’s Complaint in this case, in which she repeatedly alleges that

she did not sign the 2016 membership card and that there was no valid agreement. Compl. ¶¶ 2,

27-31, 33, 61, 77, 81, 84-86, 92, 97, 111-13.

Plaintiff argues only that the issues are not identical with respect to her First and

Fourteenth Amendment claims (Counts I-IV of her Complaint). Regarding her First Amendment

claims (Counts I-III), Plaintiff contends that the ERB ruled on the contractual validity of her

signature, but not whether the 2016 card constitutes an adequate constitutional waiver of her

First Amendment rights under Janus. The Ninth Circuit squarely rejected such a reading of

Janus in Belgau v. Inslee, explaining that the Supreme Court “discussed constitutional

waiver because it concluded that nonmembers’ First Amendment right had been infringed, and in

no way created a new First Amendment waiver requirement for union members before dues are

deducted pursuant to a voluntary agreement.” 975 F.3d 940, 952 (9th Cir. 2020) (emphasis in

original). The plaintiffs in Belgau voluntarily signed membership cards, just as the ERB found

that Plaintiff did, and the Ninth Circuit denied their argument that they had a First Amendment

right of “the freedom not to pay union dues without ‘consent that amount to the waiver of a First

Amendment right.’” Id. at 951-52. Accordingly, Plaintiff’s First Amendment claim does not

require an analysis of waiver of a First Amendment right, and the issue of the validity of

the 2016 agreement is identical in the ERB proceeding and in Counts I-III at issue here.

Turning to Plaintiff’s Fourteenth Amendment claim (Count IV), Plaintiff argues that “the

issue is whether there were adequate procedural safeguards, including notice and an opportunity

to be heard, prior to her wages being withdrawn—not whether the 2016 card was considered

valid.” She thus contends that she may recover for a procedural due process violation even if she

was found to have signed the 2016 membership card. In support, Plaintiff cites cases involving

Hudson notices, which are notices that explain union expenses for the purpose of allowing

nonmembers of the union to decide whether to object to payments not for collective bargaining.

See Knight v. Kenai Peninsula Borough Sch. Dist., 131 F.3d 807 (9th Cir. 1997); Hudson v. Chi.

Tchrs. Union, 922 F.2d 1306 (7th Cir. 1991). These cases merely distinguish between the

adequacy of notice provided to nonmembers and the adequacy of the underlying fee assessment.

In fact,

the holding of Hudson is inapplicable to union members. In

Hudson, the complainants were employees who chose not to join

the union but were nonetheless required to pay agency fees. The

case, therefore, has no application to employees like [Plaintiff],

who voluntarily signed a union membership agreement and

contractually agreed to pay the full dues.

Wheatley v. N.Y. State United Tchrs., 80 F.4th 386, 392 (2d Cir. 2023) (citations omitted).

The deduction of dues pursuant to a voluntary authorization—as the ERB found Plaintiff

had provided in this case—does not deprive an employee of a protected liberty or property

interest such that due process rights are triggered. See id. at 393 (“Because Appellant was

contractually obligated to pay union dues pursuant to the Membership Agreement that she

voluntarily signed, and the District’s withholding of union dues did not constitute a violation of

her First Amendment rights, Appellant’s Fourteenth Amendment claim fails.” (citing Wagner v.

Univ. of Wash., 2022 WL 1658245, at *1 (9th Cir. May 25, 2022) (unpublished))). Plaintiff’s

Fourteenth Amendment claim thus rises and falls with her First Amendment claim and the

underlying issue of the validity of the 2016 agreement. Therefore, the issues litigated before the

ERB, and affirmed by the Oregon Court of Appeals, are identical to the issue in this case.

b. Actually Litigated and Essential to a Final Decision on the Merits

To satisfy the “actually litigated and essential to a final decision” requirement, “a prior

court’s resolution of an issue must either be apparent from the face of a judgment or order or, if

not apparent from the face of a judgment or order, must have been necessary to the resolution of

the prior adjudication.” Leach v. Scottsdale Indem. Co., 261 Or. App. 234, 240 (2014) (citing

Westwood Constr. Co. v. Hallmark Inns, 182 Or. App. 624, 635-36 (2002)).

SEIU argues that the ERB reached both a finding of fact and conclusion of law as to the

validity of Plaintiff’s signature, and the merits of the alleged ULPs depended on the validity of

the signature, such that the issue was actually litigated and essential to the ERB’s decision. See

Kolander v. Weeks, 916 F. Supp. 1042, 1048 (D. Or. 1996) (“[T]he hearings officer was required

to make a determination on each deduction requested by plaintiff, and on the validity of each

state regulation. As a result, the hearing officer’s determination that the state regulations were in

accord with the federal regulations was essential to his determination on the merits of plaintiff’s

requested deductions.”). SEIU further contends that ERB’s “express, detailed findings” on the

validity of the 2016 agreement indicates that the issue was essential to ERB’s decision. See id.

Plaintiff responds that the validity of the 2016 agreement was not litigated as an element

of either ULP charge and was thus superfluous and a mere advisory finding. Plaintiff contends

that this issue was not “essential to a final decision,” see Scott v. Sears, Roebuck & Co., 395 F.

Supp. 2d 961, 970 (D. Or. 2005), because the ERB “could have concluded that SEIU 503 forged

[Plaintiff’s] 2016 membership card, but still ruled for SEIU 503 on its ULP claims.” Plaintiff

does not explain how the ERB could have ruled for SEIU if it had forged her signature,

considering that the ERB emphasized the threshold necessity of determining the validity of her

signature and the 2016 agreement.

In describing the issues before it, the ERB repeatedly highlighted the necessity of

resolving the validity of the 2016 signature and membership agreement in order to resolve

SEIU’s ULP claims. The ERB stated:

The issues are: (1) did [Plaintiff] and SEIU enter into a valid dues

deduction authorization agreement in March 2016; (2) did

[Plaintiff] fail to comply with ORS 243.806(6), in violation of

ORS 243.672(2)(c), by attempting to repudiate a valid dues

deduction authorization agreement with SEIU; (3) did [Plaintiff]

fail to comply with ORS 243.806(10), in violation of

ORS 243.672(2)(c), by filing a lawsuit against SEIU asserting

preempted state law claims for fraud and racketeering rather than

filing an unfair labor practice complaint to resolve the dispute over

the validity of the dues deduction authorization agreement; and

(4) should [Plaintiff] be required to pay a civil penalty, pursuant to

ORS 243.676(4)(a)?

ECF 74-8 at 2-3 (emphases added); see also ERB Tr. 3:12-4:3 (ECF 74-7 at 4-5) (same);

ECF 74-10 at 3 (“The issues are: . . . (2) In 2016, did [Plaintiff] authorize dues deductions to be

withheld from her paycheck, and if so, was that authorization valid?”).11 This necessity is further

demonstrated by the fact that one of SEIU’s ULP claims was that Plaintiff did not comply with

ORS § 243.806(6) by attempting to repudiate a valid dues deduction authorization agreement.

11 Plaintiff appealed the ERB’s finding to the Oregon Court of Appeals. The ERB found

that Plaintiff had not committed either ULP alleged by SEIU, and Plaintiff thus appealed only the

ERB’s conclusion that the 2016 agreement was valid. Plaintiff cannot persuasively argue both

that the ERB decision on the validity of the 2016 agreement was so important that it needed to be

appealed, but also that it was not actually litigated and essential to the ERB’s final judgment.

For the ERB to reach the merits of this claim, it was necessary for it first to determine whether a

valid dues deduction authorization agreement existed.

The ERB explicitly stated that it resolved this dispute over the validity of the 2016

agreement in favor of SEIU: “[W]e conclude that [Plaintiff] signed the 2016 agreement, and that

the agreement is valid. Therefore, we resolve the dispute brought under ORS 243.806(10) in

SEIU’s favor.” ECF 74-10 at 15. Although Plaintiff repeatedly argued that a ruling on the

validity of the 2016 membership agreement was not necessary to determine if she committed a

ULP, see ECF 74-2 at 14-15 (motion to dismiss SEIU’s ULP); ECF 74-9 at 7-8 (objections to the

recommended ruling); ECF 74-11 at 26-35 (opening brief in front of the Oregon Court of

Appeals), the ERB and the Oregon Court of Appeals rejected that argument. The Court thus

finds that this factor is satisfied.

c. Full and Fair Opportunity to Be Heard

Under Oregon law, “providing a contested case hearing and formal adjudication

proceedings meets the threshold for a full and fair opportunity to litigate a question,” as required

for issue preclusion. Kolander, 916 F. Supp. at 1048; see also Dodd v. Hood River County, 136

F.3d 1219, 1226 (9th Cir. 1998) (explaining that a “full evidentiary hearing,” where, among

other things, witnesses could be cross-examined and only sworn testimony was accepted, would

“no doubt” have provided “a full and fair opportunity to litigate”); Hickey v. Settlemier, 116 Or.

App. 436, 439 (1992) (finding a full and fair opportunity to litigate in an administrative

proceeding where the plaintiff was represented by counsel and allowed to call and cross-examine

witnesses, there was a neutral factfinder, and the final order was subject to judicial review), rev’d

on other grounds, 318 Or. 196 (1993); Vilches v. Multnomah Educ. Serv. Dist., 2004

WL 1662074, at *8 (D. Or. May 5, 2004) (“[The plaintiff] was represented by counsel, had the

opportunity to call witnesses and cross-examine them, and could offer evidence. Absent concrete

evidence to the contrary, this court cannot say that he lacked an adequate opportunity to

litigate.”), report and recommendation adopted, 2004 WL 1661986 (D. Or. July 23, 2004).

Further, the parties must have “both a full opportunity and the incentive to contest the point at

issue on a record that also was subject to judicial review.” Chavez v. Boise Cascade Corp., 307

Or. 632, 635 (1989).

SEIU argues that the ERB proceeding meets these requirements, given its procedural

requirements, and that Plaintiff had the same incentive to litigate before the ERB as she does

here. Plaintiff responds that she lacked an incentive to fully litigate the validity of the 2016

agreement in front of the ERB, and that the allegations in front of the ERB differ from those in

the federal case, such that she was prevented from presenting evidence. Plaintiff does not dispute

that the ERB proceeding was a contested case hearing, where both sides were represented by

counsel and had the opportunity to present evidence and cross-examine witnesses, nor that the

ERB has many strong procedural and evidentiary rules.

Plaintiff first argues that she had no incentive to litigate the validity of the 2016

membership agreement, relying on her argument that its validity was not actually litigated or

essential to the final decision. As discussed, the Court finds that the validity of the 2016

agreement was actually litigated and necessary to at least Plaintiff’s claim under ORS

§ 243.806(6) and thus rejects this argument.

Plaintiff also argues that the compensation she could potentially receive in the ERB

proceeding—the return of any wrongfully deducted union dues—“is a small part of what she

seeks in her current lawsuit,” and that this economic disparity creates a difference in incentive.

See Mack v. S. Bay Beer Distribs., Inc., 798 F.2d 1279, 1284 (9th Cir. 1986) (“[A]n employee’s

incentive to litigate an unemployment benefits claim is generally much less than his incentive to

litigate a discrimination claim where generally the stakes are much higher. When the amount in

controversy in the first action is much less than the amount in controversy at the second,

preclusion would be unfair.”), abrogated on other grounds by Astoria Fed. Sav. & Loan Ass’n v.

Solimino, 501 U.S. 104 (1991). The Court notes that in Mack, the plaintiff litigated the denial of

employment benefits in front of the agency, then brought an age discrimination claim in federal

court, and the court’s decision on preclusion depended in part on the fact that the ALJ made no

specific findings about the age discrimination claim and the record did not show any evidence

presented on the issue. Id. at 1283-84. In this case, on the other hand, the ALJ made specific

findings about the validity of the 2016 agreement, which is an issue in all Plaintiff’s claims in

this litigation. Moreover, Plaintiff had already brought this case, which was stayed pending

litigation of the ERB proceeding. The Supreme Court has noted in allowing the offensive use of

issue preclusion: “If a defendant in the first action is sued for small or nominal damages, he may

have little incentive to defend vigorously, particularly if future suits are not foreseeable.”

Parklane, 439 U.S. at 330 (emphasis added).

Despite the difference in amounts in controversy, Plaintiff had a strong incentive to

litigate the validity of the 2016 agreement in the ERB proceeding. Where a party knows that a

determination may affect future adjudications, it has the incentive to fully litigate. See id. at 330

(noting that the foreseeability of future suits affects a party’s incentive to litigate); cf.

Kolander, 916 F. Supp. at 1048 (explaining that plaintiff knew that her future benefits “were

affected by the hearing officer’s determination,” and thus “her motivation to appeal the

determination was plainly established by the agency’s denial of the 1995 deductions”). Plaintiff

knew that she faced the risk of the Court finding that the ERB’s decision had preclusive effect.

See Trees, 574 F. Supp. 3d at 870 (“The parties dispute whether that factual determination should

be given preclusive effect in this Court, and the undersigned will, at the appropriate time, decide

that issue.”); ECF 38 at 11-19 (opposing SEIU’s motion for a stay and arguing that the ERB’s

decision will not have preclusive effect); ECF 48 (unsuccessfully moving for a TRO stopping the

ERB proceeding and arguing that SEIU plans to argue that the ERB proceeding has preclusive

effect). Moreover, as discussed, the ERB made it clear that it considered the validity of the 2016

agreement to be a critical threshold issue. Given the known possibility that ERB’s factual

determination could “significantly limit or simplify this case,” Trees, 574 F. Supp. 3d at 870,

Plaintiff had the incentive to fully litigate the validity of the 2016 agreement in the ERB

proceeding. The Court rejects Plaintiff’s argument to the contrary.

Finally, Plaintiff contends that the allegations before the ERB differed from those in this

case, such that Plaintiff could not present evidence that she would have relied on in this case.12

Specifically, she cites the ALJ’s ruling that proposed testimony from other employees who have

experienced deductions by SEIU would be irrelevant. See ECF 83-1 at 2 (“I have determined that

their testimony is not relevant to the issues set for hearing. [Plaintiff] reserves the right, however,

to call these witnesses on rebuttal if the relevance of their testimony is established.”). The rules

of evidence that the ERB follows in its proceedings set forth that “[i]rrelevant, immaterial, or

unduly repetitious evidence shall be excluded.” Or. Admin. R. 115-010-0050(2). This rule

mirrors the Federal Rules of Evidence, which mandate that irrelevant evidence is inadmissible.

12 Plaintiff also argues that “the burden of proof at the Board is ‘substantial evidence,’

and review of the Board’s findings is deferential. These procedural realities strongly contribute

to the unfairness that would arise if the Board’s opinion was given preclusive effect.” The ERB’s

finding, however, was that “a preponderance of the evidence establishes that [Plaintiff] signed

the 2016 membership agreement, and that it was not forged.” ECF 74-10 at 11 (emphasis added).

Plaintiff seems to be referring to the Oregon Court of Appeals’ standard of review of the ERB’s

order, which is “for substantial evidence, substantial reason, and legal error.” SEIU Local 503,

330 Or. App. at 312 (citing ORS § 183.482(8)). Regardless, this standard of review does not

affect Plaintiff’s opportunity to be heard.

Fed. R. Evid. 402. Further, the Oregon Court of Appeals affirmed that the evidence was

“properly excluded, because it was not relevant to the question of whether [Plaintiff] signed

the 2016 agreement, and the evidence related to different bargaining units, different organizers,

and different devices.” SEIU Local 503, 330 Or. App. at 319. Plaintiff does not explain how

witnesses who were found to be irrelevant by the ALJ and the Oregon Court of Appeals would

be relevant in this case. Therefore, Plaintiff had the opportunity to present witnesses, as required

for a full and fair opportunity to litigate.

Plaintiff was provided with a contested case hearing in which she was represented by

counsel and called and cross-examined witnesses, presided over by an ALJ, where the final order

was subject to judicial review. Plaintiff also had an incentive to fully litigate in that proceeding.

The Court thus finds that Plaintiff had a full and fair opportunity to be heard during the ERB

proceeding, and this factor is met.

d. Same Party

There is no dispute that Plaintiff was a party to the ERB proceeding. This factor is

therefore met.

e. Type of Proceeding

Oregon courts have enumerated four factors to consider in deciding whether the prior

proceeding is the type of proceeding to which it will give preclusive effect: “(1) whether the

administrative forum maintains procedures that are ‘sufficiently formal and comprehensive’;

(2) whether the proceedings are ‘trustworthy’; (3) whether the application of issue preclusion

would ‘facilitate prompt, orderly and fair problem resolution’; and (4) whether the ‘same quality

of proceedings and the opportunity to litigate is present in both proceedings.’” Nelson, 318 Or.

at 104 n.4 (quoting State v. Ratliff, 304 Or. 254, 258 (1987) (en banc); Boise Cascade Corp., 307

Or. at 635; N. Clackamas Sch. Dist. v. White, 305 Or. 48, 52 (1988) (en banc)).

SEIU contends that the Oregon Supreme Court has held that ERB proceedings are the

“type of proceeding to which [Oregon] court[s] will give preclusive effect.” Washington Cnty.

Police Officers Ass’n v. Washington County, 321 Or. 430, 437 (1995). The Court does not read

this case as broadly holding that all ERB proceedings are awarded preclusive effect. In

Washington County, the question was whether the ERB could apply issue preclusion in one of its

own proceedings based on one of its prior decisions. The Oregon Supreme Court explained:

“The same quality of proceedings and opportunity to litigate is present in both proceedings. If the

incentive to litigate the question is substantially the same, the procedural requisites for

application of the issue preclusion rule would appear to exist.” Id. at 437 (quoting N. Clackamas

Sch. Dist., 305 Or. 48 at 52). This explanation does not support that all ERB proceedings have

preclusive effect for later federal court proceedings, and thus the Court turns to the four factors

set out in Nelson.

Plaintiff does not argue that the ERB proceeding was not “trustworthy,” but contends that

it was not “sufficiently formal and comprehensive” and thus did not provide the “same quality of

proceedings and the opportunity to litigate” as in federal court. Plaintiff compares this case to

Ratliff, in which the Oregon Supreme Court held that an administrative DMV license suspension

hearing did not have preclusive effect in a later criminal proceeding. 304 Or. at 260. The Oregon

Supreme Court explained that although the license suspension hearing was a “contested case,”

such “[c]ontested case hearings vary greatly in formality, complexity and the parties’

opportunities and inclinations to litigate the issues.” Id. at 258. The court noted that it had little

on the record to explain the character of license suspension hearings, but extrapolated based on

statutes, administrative rules, and the particular circumstances of Ratliff’s case. Id. at 258-59. In

such hearings, the person whose license may be suspended “may be represented by an attorney,”

and “[t]he proceedings are brief, usually limited to the testimony of two witnesses.” Id. at 259.

Further, the DMV is not represented by an attorney, but “is represented in a way by the hearings

officer,” who “may or may not be a lawyer.” Id. “The litigation is not conducted as it would be in

court with two adversary parties and a neutral judge. Rather, there is one party advocating a

position before a decision-maker who also has the responsibility of developing a record that will

include evidence against the party.” Id. Accordingly, this “administrative procedure can impose

only limited sanctions and is designed to provide a simple and expeditious decision.” Id. at 260.

A criminal trial, on the other hand, “is by constitution and statute more formal and hence more

cumbersome.” Id.

The ERB proceeding at issue here suffers from none of the deficiencies of the hearing in

Ratliff. As discussed, Plaintiff was able to present multiple witnesses and the hearing was an

adversarial proceeding before a neutral factfinder. Moreover, the current proceeding is civil, not

criminal. Although the ERB proceeding did not provide an identical forum as a federal court, it

has all the hallmarks of a sufficiently formal and comprehensive proceeding. Thus, this factor is

met.

f. Fairness Considerations

Plaintiff argues that, even if the enumerated factors for issue preclusion are met, fairness

dictates that issue preclusion should not apply. Even though courts repeatedly have applied issue

preclusion to state agency proceedings, Plaintiff argues that its application would violate her

constitutional and statutory rights.

First, Plaintiff argues, as she does in opposing SEIU’s motion for leave to supplement its

answer, that applying issue preclusion here would violate her Seventh Amendment right to a jury

trial. As discussed, this argument lacks merit.

Second, Plaintiff contends that issue preclusion would violate her First Amendment right

to seek redress of grievances through a court. She cites Bill Johnson’s Restaurants, Inc. v.

NLRB, 461 U.S. 731 (1983), in which the National Labor Relations Board (“NLRB”) in an

administrative proceeding ordered an employer to withdraw its state-court complaint. Id. at 737.

The Supreme Court vacated this order, explaining that the NLRB “may not halt the prosecution

of a state-court lawsuit, regardless of the plaintiff’s motive, unless the suit lacks a reasonable

basis in fact or law.” Id. at 748 (emphasis added). With issue preclusion, an agency does not

directly halt the prosecution of a lawsuit. Instead, a court applies preclusion to an issue before it,

which may or may not end the entire proceeding or dispose of a claim (claim preclusion, on the

other hand, will dispose of a claim but also may not dispose of an entire proceeding). Plaintiff

does not cite any case in which a court has held that issue preclusion violates the First

Amendment right to redress grievances. The Court thus finds that the First Amendment does not

bar the application of issue preclusion in this case.

Finally, Plaintiff argues that applying issue preclusion would deny her recourse in a

forum separate than the state government that is allegedly violating her rights, in violation of 42

U.S.C. § 1983. She argues that a state administrative proceeding is not a substitute for a federal

court case, and that SEIU has attempted to set a “preclusion trap.” SEIU responds by noting that

the U.S. Supreme Court has affirmed that issue preclusion applies in § 1983 cases when issues

have been litigated in state courts. See Allen v. McCurry, 449 U.S. 90, 103-04 (1980) (“[N]othing

in the language or legislative history of § 1983 proves any congressional intent to deny binding

effect to a state-court judgment or decision when the state court, acting within its proper

jurisdiction, has given the parties a full and fair opportunity to litigate federal claims, and thereby

has shown itself willing and able to protect federal rights.”). Further, the Ninth Circuit has held

that state administrative proceedings are also given preclusive effect in cases brought under

§ 1983. See Miller v. County of Santa Cruz, 39 F.3d 1030, 1032 (9th Cir. 1994) (“[A]s a matter

of federal common law, federal courts give preclusive effect to the findings of state

administrative tribunals in subsequent actions under § 1983.”).

The case Plaintiff cites in support of her “preclusion trap” argument, Knick v. Township

of Scott, invalidated an exhaustion requirement for constitutional claims under the Takings

Clause. 588 U.S. 180, 185 (2019). Before Knick, the Supreme Court had held that property

owners cannot bring a federal takings claim in federal court until a state court has denied their

claim for just compensation under state law. See Williamson Cnty. Reg’l Plan. Comm’n v.

Hamilton Bank of Johnson City, 473 U.S. 172 (1985). The Court in Knick noted that Williamson

County created a “preclusion trap” because “a state court’s resolution of a claim for just

compensation under state law generally has preclusive effect in any subsequent federal suit.”

Knick, 588 U.S. at 184. Such a situation, the Court explained, would violate the Civil Rights Act

of 1871, which “guarantees a federal forum for claims of unconstitutional treatment at the hands

of state officials, and the settled rule is that exhaustion of state remedies is not a prerequisite to

an action under § 1983.” Id. at 185 (emphasis in original) (cleaned up).

Plaintiff argues that ORS § 243.806(10) creates a similar exhaustion requirement that

violates the right to a federal forum guaranteed by § 1983, citing the ERB’s conclusion that

“ORS 243.806(10) vests this Board with exclusive jurisdiction to hear dues-deduction disputes.”

ECF 74-10 at 7. As SEIU notes, however, this statute does not create an exhaustion requirement

for § 1983 claims. The statute merely requires that disputes about the “existence, validity or

revocation of an authorization for the deduction[]” of union dues must be resolved through an

ULP proceeding in front of the ERB. ORS § 243.806(10)(a). This does not require that

constitutional claims are resolved by the ERB, and thus Plaintiff has not been deprived of her

§ 1983 rights. Therefore, issue preclusion fairly applies in this case, as it does in other § 1983

claims.

The Court applies issue preclusion to the ERB’s conclusions that Plaintiff voluntarily

signed the 2016 agreement and that agreement was a valid membership agreement between

Plaintiff and SEIU. The resolution of these issues determines all of Plaintiff’s claims against

SEIU for purposes of SEIU’s motion for judgment on the pleadings. All of Plaintiff’s claims

depend on the allegation that SEIU forged her signature on the 2016 membership agreement and

thus there was no valid membership agreement. Taking the rest of Plaintiff’s allegations in her

complaint as true, and construing these allegations in the light most favorable to Plaintiff, she

fails to state any claims against SEIU. The Court, therefore, declines to reach the parties’

remaining arguments.

CONCLUSION

The Court GRANTS SEIU’s Motion for Leave to File Supplemental Answer, ECF 73.

The Court also GRANTS SEIU’s Request for Judicial Notice, ECF 75. Finally, the Court

GRANTS SEIU’s Motion for Judgment on the Pleadings, ECF 72. The Court dismisses this case

with prejudice.

IT IS SO ORDERED.

DATED this 24th day of January, 2025.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge