Mark Janus v. American Federation of State

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 19‐1553

MARK JANUS,

Plaintiff‐Appellant,

v.

AMERICAN FEDERATION OF STATE, COUNTY AND MUNICIPAL

EMPLOYEES, COUNCIL 31; AFL‐CIO, et al.,

Defendants‐Appellees,

and

KWAME RAOUL, in his official capacity as Attorney General of

the State of Illinois,

Intervenor‐Defendant‐Appellee.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:15‐cv‐01235 — Robert W. Gettleman, Judge.

____________________

ARGUED SEPTEMBER 20, 2019 — DECIDED NOVEMBER 5, 2019

____________________

Before WOOD, Chief Judge, and MANION and ROVNER, Cir‐

cuit Judges.

2 No. 19‐1553

WOOD, Chief Judge. For 41 years, explicit Supreme Court

precedent authorized state‐government entities and unions to

enter into agreements under which the unions could receive

fair‐share fees from nonmembers to cover the costs incurred

when the union negotiated or acted on their behalf over terms

of employment. Abood v. Detroit Bd. of Educ., 431 U.S. 209

(1977). To protect nonmembers’ First Amendment rights, fair‐

share fees could not support any of the union’s political or

ideological activities. Relying on Abood, more than 20 states

created statutory schemes that allowed the collection of fair‐

share fees, and public‐sector employers and unions in those

jurisdictions entered into collective bargaining agreements

pursuant to these laws.

In 2018, the Supreme Court reversed its prior position and

held that compulsory fair‐share or agency fee arrangements

impermissibly infringe on employees’ First Amendment

rights. Janus v. AFSCME, Council 31, 138 S. Ct. 2448, 2461

(2018). The question before us now is whether Mark Janus, an

employee who paid fair‐share fees under protest, is entitled

to a refund of some or all of that money. We hold that he is

not, and so we affirm the judgment of the district court.

I

A. History of Agency Fees

Before turning to the specifics of the case before us, we

think it useful to take a brief tour of the history behind agency

fees. This provides useful context for our consideration of Mr.

Janus’s claim and the system he challenged.

The principle of exclusive union representation lies at the

heart of our system of industrial relations; it is reflected in

both the Railway Labor Act (“RLA”), 45 U.S.C. §§ 151–165

No. 19‐1553 3

(first enacted in 1926), and the National Labor Relations Act

(“NLRA”), 29 U.S.C. §§ 151–169 (first enacted in 1935). In its

quest to provide for “industrial peace and stabilized labor‐

management relations,” Congress authorized employers and

labor organizations to enter into agreements under which em‐

ployees could be required either to be union members or to

contribute to the costs of representation—so‐called “agency‐

shop” arrangements. See 29 U.S.C. §§ 157, 158(a)(3); 45 U.S.C.

§ 152 Eleventh. Unions designated as exclusive representa‐

tives were (and still are) obligated to represent all employees,

union members or not, “fairly, equitably, and in good faith.”

H.R. Rep. No. 2811, 81st Cong., 2d Sess., p. 4.

In Railway Employment Dep’t v. Hanson, 351 U.S. 225 (1956),

a case involving the RLA, the Supreme Court held that “the

requirement for financial support of the collective‐bargaining

agency by all who receive the benefits of its work is within the

power of Congress under the Commerce Clause and does not

violate either the First or the Fifth Amendments.” Id. at 231. In

approving agency‐shop arrangements, the Court said, “Con‐

gress endeavored to safeguard against [the possibility that

compulsory union membership would impair freedom of ex‐

pression] by making explicit that no conditions to member‐

ship may be imposed except as respects ‘periodic dues, initi‐

ation fees, and assessments.’” Id. Hanson thus held that the

compulsory payment of fair‐share fees did not contravene the

First Amendment.

Several years later, in Int’l Ass’n of Machinists v. Street, 367

U.S. 740 (1961), the Court discussed the careful balancing of

interests reflected in the RLA, observing that “Congress did

not completely abandon the policy of full freedom of choice

embodied in the [RLA], but rather made inroads on it for the

4 No. 19‐1553

limited purposes of eliminating the problems created by the

‘free rider.’” Id. at 767. The Court reaffirmed the lawfulness of

agency‐shop arrangements while cautioning that unions

could receive and spend nonmembers’ fees only in accord‐

ance with the terms “advanced by the unions and accepted by

Congress [to show] why authority to make union shop agree‐

ments was justified.” Id. at 768. Legitimate expenditures were

limited to those designed to cover “the expenses of the nego‐

tiation or administration of collective agreements, or the ex‐

penses entailed in the adjustment of grievances and dis‐

putes.” Id. The Court left the question whether state public

agencies were similarly empowered under state law to enter

into agency‐shop arrangements for another day.

That day came on May 23, 1977, when the Supreme Court

issued its opinion in Abood. 431 U.S. 209. There, a group of

public‐school teachers challenged Michigan’s labor relations

laws, which were broadly modeled on federal law. Id. at 223.

Michigan law established an exclusive representation scheme

and authorized agency‐shop clauses in collective bargaining

agreements between public‐sector employers and unions. Id.

at 224. The Court upheld that system, stating that “[t]he de‐

sirability of labor peace is no less important in the public sec‐

tor, nor is the risk of ‘free riders’ any smaller,” id., and that

“[t]he same important government interests recognized in the

Hanson and Street cases presumptively support the impinge‐

ment upon associational freedom created by the agency shop

here at issue.” Id. at 225. It recognized that “government may

not require an individual to relinquish rights guaranteed him

by the First Amendment as a condition of public employ‐

ment.” Id. at 233–34. Nonetheless, it said that a public em‐

ployee has no “weightier First Amendment interest than a pri‐

vate employee in not being compelled to contribute to the

No. 19‐1553 5

costs of exclusive union representation,” id. at 229, and thus

concluded that “[t]he differences between public‐ and pri‐

vate‐sector collective bargaining simply do not translate into

differences in First Amendment rights.” Id. at 232.

The correct balance, according to Abood, was to “prevent[]

compulsory subsidization of ideological activities by employ‐

ees who object thereto without restricting the Union’s ability

to require every employee to contribute to the cost of collec‐

tive‐bargaining activities.” Id. at 237. And for four decades fol‐

lowing Abood, courts, state public‐sector employers, and un‐

ions followed this path. See, e.g., Locke v. Karass, 555 U.S. 207

(2009); Lehnert v. Ferris Faculty Ass’n, 500 U.S. 507 (1991); Chi‐

cago Teachers Union v. Hudson, 475 U.S. 292 (1986); Ellis v. Rail‐

way Clerks, 466 U.S. 435 (1984). Agency‐shop arrangements,

the Court repeatedly held, were consistent with the First

Amendment and validly addressed the risk of free riding. See

Comm’cns Workers of America v. Beck, 487 U.S. 735, 762 (1988)

(“Congress enacted the two provisions for the same purpose,

eliminating ‘free riders,’ and that purpose dictates our con‐

struction of § 8(a)(3) … .”); Ellis, 466 U.S. at 447, 452, 456 (re‐

ferring in three places to the free‐rider concern); see also

Lehnert, 500 U.S. at 556 (Scalia, J., concurring).

In time, however, the consensus on the Court began to

fracture. Beginning in Knox v. Serv. Emps. Int’l Union, 567 U.S.

298 (2012), the rhetoric changed. Abood began to be character‐

ized as an “anomaly,” and the Court started paying more at‐

tention to the “significant impingement on First Amendment

rights” Abood allowed and less to the balancing of employees’

rights and unions’ obligations. Id. at 310–11. Building on Knox,

Harris v. Quinn criticized the reasoning in Hanson and Abood

as “thin,” “questionable,” and “troubling.” 573 U.S. 616, 631–

6 No. 19‐1553

35 (2014). Harris worried that Abood had “failed to appreciate

the conceptual difficulty of distinguishing between union ex‐

penditures that are made for collective‐bargaining purposes

and those that are made to achieve political ends” and to an‐

ticipate “the practical administrative problems that would re‐

sult.” Id. at 637. The Harris Court also suggested that “[a] un‐

ion’s status as exclusive bargaining agent and the right to col‐

lect an agency fee from non‐members are not inextricably

linked.” Id. at 649.

Nonetheless, and critically for present purposes, these ob‐

servations did not lead the Court in Harris to overrule Abood.

Informed observers thought that Abood was on shaky ground,

but it was unclear whether it would weather the storm, be re‐

stricted, or be overturned in its entirety. That uncertainty con‐

tinued after the Court signaled its intention to revisit the issue

in Friedrichs v. California Teachers Ass’n, 135 S. Ct. 2933 (2015),

which wound up being affirmed by an equally divided Court.

136 S. Ct. 1083 (2016).

B. Janus’s Case

Plaintiff Mark Janus was formerly a child‐support special‐

ist employed by the Illinois Department of Healthcare and

Family Services. Through a collective bargaining agreement

between Illinois’s Department of Central Management Ser‐

vices (“CMS”) (which handles human resources tasks for Illi‐

nois’s state agencies) and defendant American Federation of

State, County and Municipal Employees (“AFSCME”), Coun‐

cil 31, AFSCME was designated as the exclusive representa‐

tive of Mr. Janus’s employee unit. Mr. Janus exercised his

right not to join the union. He also objected to CMS’s with‐

holding $44.58 from his paycheck each month to compensate

AFSCME for representing the employee unit in collective

No. 19‐1553 7

bargaining, grievance processing, and other employment‐re‐

lated functions.

Initially, however, Mr. Janus was not involved in this liti‐

gation. The case began instead when the then‐governor of Il‐

linois challenged the Illinois Public Labor Relations Act

(“IPLRA”), which established an exclusive representation

scheme and authorized public employers and unions to enter

into collective bargaining agreements that include a fair‐share

fee provision. 5 ILCS § 315/6. Under that law, a union desig‐

nated as the exclusive representative of an employee unit was

“responsible for representing the interests of all public em‐

ployees in the unit,” whether union members or not,

§ 315/6(d). Fair‐share fees were earmarked to compensate the

union for costs incurred in “the collective bargaining process,

contract administration and pursuing matters affecting

wages, hours and conditions of employment.” § 315/6(e).

The district court dismissed the governor for lack of stand‐

ing, but at the same time it permitted Mr. Janus (and some

others) to intervene as plaintiffs. Mr. Janus asserted that the

state’s compulsory fair‐share scheme violated the First

Amendment. He recognized that Abood stood in his way, but

he argued that Abood was wrongly decided and should be

overturned by the high court. Although the lower courts that

first considered his case rejected his position on the ground

that they were bound by Abood, see Janus v. AFSCME, Council

31, 851 F.3d 746, 747–48 (7th Cir. 2017) (“Janus I”), Janus pre‐

served his arguments and then, as he had hoped, the Supreme

Court took the case.

This time, the Court overruled Abood. Janus, 138 S. Ct. at

2486 (“Janus II”). It held that agency‐shop arrangements that

require nonmembers to pay fair‐share fees and thereby

8 No. 19‐1553

“subsidize private speech on matters of substantial public

concern,” are inconsistent with the First Amendment rights of

objectors, no matter what interest the state identifies in its au‐

thorizing legislation. 138 S. Ct. at 2460. This is so, the Court

explained, because “the First Amendment does not permit the

government to compel a person to pay for another party’s

speech just because the government thinks that the speech

furthers the interests of the person who does not want to pay.”

Id. at 2467.

Several aspects of the Court’s opinion are relevant to Mr.

Janus’s current claim for damages. First, the Court character‐

ized the harm inflicted by the agency‐fee arrangement as

“compelled subsidization of private speech,” 138 S. Ct. at

2464, whereby “individuals are coerced into betraying their

convictions,” id. It was not concerned in the abstract with the

deduction of money from employees’ paychecks pursuant to

an employment contract. Rather, the problem was the lack of

consent (where it existed) to the use of that money—i.e. to sup‐

port the union’s representation work. In other words, the case

presented a First Amendment speech issue, not one under the

Fifth Amendment’s Takings clause.

The Court found that any legitimate interest AFSCME had

in those fees had to yield to the objecting employees’ First

Amendment rights. In so doing, it rejected the approach to

free riding that earlier opinions had taken, holding to the con‐

trary that “avoiding free riders is not a compelling interest”

and thus Illinois’s statute could not withstand “exacting scru‐

tiny.” 138 S. Ct. at 2466. Yet it came to that conclusion only

after weighing the costs and benefits to a union of having ex‐

clusive representative status: on the one hand, the union in‐

curs the financial burden attendant to the requirement to

No. 19‐1553 9

provide fair representation even for nonmembers who de‐

cline to contribute anything to the cost of its services; on the

other hand, even with payments of zero from objectors, the

union still enjoys the power and attendant privileges of being

the exclusive representative of an employee unit. The Court’s

analysis focused on the union rather than the nonmembers:

the question was whether requiring a union to continue to rep‐

resent those who do not pay even a fair‐share fee would be

sufficiently inequitable to establish a compelling interest, not

whether requiring nonmembers to contribute to the unions

would be inequitable.

Nor did the Court hold that Mr. Janus has an unqualified

constitutional right to accept the benefits of union representa‐

tion without paying. Its focus was instead on freedom of ex‐

pression. That is why it said only that the state may not force

a person to pay fees to a union with which she does not wish

to associate. But if those unions were not designated as exclu‐

sive representatives (as they are under 5 ILCS §§ 315/6 and

315/9), there would be no obligation to act in the interests of

nonmembers. The only right the Janus II decision recognized

is that of an objector not to pay any union fees. This is not the

same as a right to a free ride. Free‐riding is simply a conse‐

quence of exclusivity; drop the duty of fair representation,

and the union would be free to cut off all services to the non‐

members.

Finally, the Court did not specify whether its decision was

to have retroactive effect. The language it used, to the extent

that it points any way, suggests that it was thinking prospec‐

tively: “Those unconstitutional exactions cannot be allowed

to continue indefinitely,” 138 S. Ct. at 2486; “States and public‐

sector unions may no longer extract agency fees from

10 No. 19‐1553

nonconsenting employees,” id; “This procedure violates the

First Amendment and cannot continue,” id. In the end, how‐

ever, the Court remanded the case to the district court for fur‐

ther proceedings, in particular those related to remedy. Id. at

2486.

C. District Court Proceedings

The most immediate effect of the Court’s Janus II opinion

was CMS’s prompt cessation of its collection of fees from Mr.

Janus and all other nonmembers of the union, and thus the

end of AFSCME’s receipt of those monies. That relief was un‐

doubtedly welcome for those such as Mr. Janus who funda‐

mentally disagree with the union’s mission, but matters did

not stop there. Still relying on 42 U.S.C. § 1983 for his right of

action, Mr. Janus followed up on the Court’s decision with a

request for damages from AFSCME in the amount of all fair‐

share fees he had paid. The State of Illinois joined the litiga‐

tion as an intervenor‐defendant in support of AFSCME.

The district court entered summary judgment for

AFSCME and Illinois on March 18, 2019. Janus v. AFSCME,

Council 31, No. 15 C 1235, 2019 WL 1239780 (N.D. Ill. Mar. 18,

2019) (“Janus III”). It began with the observation that in 1982,

the Supreme Court held that private defendants could in

some circumstances act “under color of state law” for pur‐

poses of section 1983 by participating in state‐created proce‐

dural schemes. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922,

941–42 (1982). Although such private defendants are not enti‐

tled to the identical immunity defenses that apply to public

defendants, the Court later indicated, they may be entitled to

an affirmative defense based on good faith or probable cause.

Wyatt v. Cole, 504 U.S. 158, 169 (1992) (“Wyatt I”). Noting that

“every federal appellate court that has considered the good‐

No. 19‐1553 11

faith defense [to a damages action] has found that it exists for

private parties,” the court followed that rule and found that

the defense applies here. The key question, it said, is whether

the defendant’s reliance on an existing law was in good faith.

Given the fact that “the statute on which defendant relied had

been considered constitutional for 41 years,” it found good

faith. In so doing, it rejected the idea that earlier intimations

from the Court that Abood ought to be overruled undermined

the necessary good faith. Accordingly, it held that Mr. Janus

was not entitled to damages.

Mr. Janus timely filed a notice of appeal on March 27, 2019.

We heard oral argument in both Mr. Janus’s appeal and a re‐

lated case, Mooney v. Ill. Educ. Ass’n, No. 19‐1774, on Septem‐

ber 20, 2019. The predicate for each case is the same—the Su‐

preme Court’s decision in Janus II—but whereas Mr. Janus

seeks damages from the union, Mooney insists that her claim

lies in equity and is one for restitution. As we explain in more

detail in a separate opinion filed in Mooney, we find no sub‐

stantive difference in the two theories of relief, and so much

of what we have to say here also applies to Mooney’s case.

II

This appeal presents only questions of law. Accordingly,

we review the district court’s grant of summary judgment in

favor of AFSCME de novo. Mazzai v. Rock‐N‐Around Trucking,

Inc., 246 F.3d 956, 959 (7th Cir. 2001).

A. Retroactivity

We begin with the question whether Janus II is retroactive.

If it is not, that is the end of the line for Mr. Janus, because the

union’s collection of fair‐share fees was expressly permitted

by state law and Supreme Court precedent from the time he

12 No. 19‐1553

started his covered work until the Court’s decision, which all

agree marked the end of his payments. If it is, then we must

reach additional questions that also bear on the proper reso‐

lution of the case. As we noted earlier, the Supreme Court’s

opinion did not address retroactivity in so many words.

Mr. Janus relies primarily on Harper v. Virginia Dep’t of Tax‐

ation, 509 U.S. 86 (1993), for the proposition that “a rule of fed‐

eral law, once announced and applied to the parties to the

controversy, must be given full retroactive effect by all courts

adjudicating federal law.” Id. at 97; see also Reynoldsville Cas‐

ket Co. v. Hyde, 514 U.S. 749, 752 (1995) (“Harper… held that,

when (1) the Court decides a case and applies the (new) legal

rule of that case to the parties before it, then (2) it and other

courts must treat that same (new) legal rule as ‘retroactive,’

applying it, for example, to all pending cases, whether or not

those cases involve predecision events.”). Mr. Janus’s asser‐

tion is that all Supreme Court cases, without exception, “must

be applied retroactively.” AFSCME responds that “[i]t is not

at all clear, in the first place, that the Supreme Court’s decision

in this case is to be applied retroactively.”

We agree with AFSCME that the rules of retroactivity are

not as unbending as Mr. Janus postulates. Even in Harper, the

Court said only that its “consideration of remedial issues

meant necessarily that we retroactively applied the rule we

announced … to the litigants before us.” 509 U.S. at 99. Right

and remedy are two different things, and the Court has taken

great pains to evaluate them separately. See, e.g., Franklin v.

Gwinnett Cnty. Pub. Schs., 503 U.S. 60, 65–66 (1992) (“As we

have often stated, the question of what remedies are available

under a statute that provides a private right of action is

No. 19‐1553 13

‘analytically distinct’ from the issue of whether such a right

exists in the first place.”).

Retroactivity poses some knotty problems. The Supreme

Court disapproved of what it called “selective prospectivity”

in Harper (that is, application of the new rule to the party be‐

fore the court but not to all others whose cases were pending),

but it did not close the door on “pure prospectivity”—i.e.,

wholly prospective force, equally inapplicable to the parties

in the case that announces the rule and all others—as used in

Lemon v. Kurtzman, 411 U.S. 192 (1973) (“Lemon II”). In that

case, after invalidating a Pennsylvania program permitting

nonpublic sectarian schools to be reimbursed for secular edu‐

cational services, see Lemon v. Kurtzman, 403 U.S. 602 (1971)

(“Lemon I”), the Court affirmed a district court order permit‐

ting the state to reimburse the schools for all services per‐

formed up to the date of Lemon I. Lemon II, 411 U.S. at 194. One

could argue that similar reliance interests on the part of

AFSCME and the state argue for pure prospectivity here.

On the other hand, in later decisions the Supreme Court

has stated that the “general practice is to apply the rule of law

we announce in a case to the parties before us … even when

we overrule a case.” Agostini v. Felton, 521 U.S. 203, 237 (1997).

Only when there is “grave disruption or inequity involved in

awarding retrospective relief to the petitioner” does the op‐

tion of pure prospectivity come into play. Ryder v. United

States, 515 U.S. 177, 184–85 (1995). See also Suesz v. Med‐1 Sols.,

LLC, 757 F.3d 636, 650 (7th Cir. 2014) (en banc).

Rather than wrestle the retroactivity question to the

ground, we think it prudent to assume for the sake of argu‐

ment that the right recognized in Janus II should indeed be ap‐

plied to the full sweep of people identified in Harper (that is,

14 No. 19‐1553

Mr. Janus himself and all others whose cases were in the pipe‐

line at the time of the Court’s decision). That appears also to

be the approach the district court took. We thus turn to the

broader question whether Mr. Janus is entitled to the remedy

he seeks.

B. Requirements under Section 1983

Section 1983 supports a civil claim against “every person

who, under color of any statute … of any State … subjects, or

causes to be subjected, any citizen of the United States … to

the deprivation of any rights, privileges, or immunities se‐

cured by the Constitution and laws.” 42 U.S.C. § 1983.

1. AFSCME is a “person” that can be sued

To be liable under section 1983 a defendant must be a “per‐

son” as Congress used that term. While “person” is a broad

word, the Supreme Court has held that states do not fall

within its compass. See Will v. Michigan Dep’t of State Police,

491 U.S. 58 (1989). But it is hard to find other exclusions. The

union, as an unincorporated organization, is a suable “per‐

son,” and we are satisfied that it is sufficiently like other enti‐

ties that have been sued under section 1983 to permit this ac‐

tion. Compare Monell v. Dep’t of Soc. Servs. of City of New York,

436 U.S. 658, 690 (1978) (municipalities and other local gov‐

ernment units are “persons” for purposes of section 1983);

Walsh v. Louisiana High School Athletic Ass’n, 616 F.2d 152, 156

(5th Cir. 1980) (voluntary association of schools); Frohwerk v.

Corr. Med. Servs., 2009 WL 2840961 (N.D. Ind. Sept. 1, 2009)

(prison contractors). Cf. Citizens United v. Fed. Election

Comm’n, 558 U.S. 310 (2010).

No. 19‐1553 15

2. AFSCME acted “under color of” state law

The next question is whether AFSCME acted under color

of state law. Unions generally are private organizations. See,

e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570

F.3d 811, 815 (7th Cir. 2009). Nonetheless, private actors some‐

times fall within the statute. See Lugar, 457 U.S. at 935. Indeed,

the “color of law” requirement for section 1983 is more expan‐

sive than, and wholly encompasses, the “state action” require‐

ment under the Fourteenth Amendment. Id. For our purposes,

the analysis is the same—if AFSCME’s receipt from CMS of

the fair‐share fees is attributable to the state, then the “color

of law” requirement is satisfied.

A “procedural scheme created by … statute obviously is

the product of state action” and “properly may be addressed

in a section 1983 action.” Id. at 941. “[W]hen private parties

make use of state procedures with the overt, significant assis‐

tance of state officials, state action may be found.” Tulsa Prof’l

Collection Servs., Inc. v. Pope, 485 U.S. 478 (1988); see also Apos‐

tol v. Landau, 957 F.2d 339, 343 (7th Cir. 1992). Here, AFSCME

was a joint participant with the state in the agency‐fee ar‐

rangement. CMS deducted fair‐share fees from the employ‐

ees’ paychecks and transferred that money to the union,

which then spent it on authorized labor‐management activi‐

ties pursuant to the collective bargaining agreement. This is

sufficient for the union’s conduct to amount to state action.

We therefore conclude that AFSCME is a proper defendant

under section 1983.

C. Statute of Limitations

Mr. Janus’s claim is also timely under the applicable stat‐

ute of limitations. Section 1983 does not have its own organic

16 No. 19‐1553

statute of limitations but rather borrows the state statute of

limitations for personal‐injury actions. Wilson v. Garcia, 471

U.S. 261, 279 (1985). In Illinois, this is two years. 735 ILCS

§ 5/13–202. “The claim accrues when the plaintiff knows or

should know that his or her constitutional rights have been

violated.” Draper v. Martin, 664 F.3d 1110, 1113 (7th Cir. 2011).

In this case, the statute began running on the date of the

Supreme Court’s decision in Janus II: June 27, 2018. Mr. Janus

neither knew nor should have known any earlier that his con‐

stitutional rights were violated, because before then it was the

settled law of the land that the contrary was true. Thus, his

suit is timely.

III

A. Existence of Good‐faith Defense

We now turn to the ultimate question in this case: to what

remedy or remedies is Mr. Janus entitled? As the Supreme

Court wrote in Davis v. United States, 564 U.S. 229 (2011), ret‐

roactivity and remedy are distinct questions. “Retroactive ap‐

plication does not … determine what ‘appropriate remedy’ (if

any) the defendant should obtain.” Id. at 243; see also Ameri‐

can Trucking Ass’ns, Inc. v. Smith, 496 U.S. 167, 189 (1990) (plu‐

rality opinion) (“[T]he Court has never equated its retroactiv‐

ity principles with remedial principles….”). It thus does not

necessarily follow from retroactive application of a new rule

that the defendant will gain the precise type of relief she

seeks. See Powell v. Nevada, 511 U.S. 79, 84 (1994). To the con‐

trary, the Supreme Court has acknowledged that the retroac‐

tive application of a new rule of law does not “deprive[] re‐

spondents of their opportunity to raise … reliance interests

entitled to consideration in determining the nature of the

No. 19‐1553 17

remedy that must be provided.” James B. Beam Distilling Co. v.

Georgia, 501 U.S. 529, 544 (1991).

Sometimes the law recognizes a defense to certain types of

relief. An example that comes readily to mind is the qualified

immunity doctrine, which is available for a public employee

if the asserted constitutional right that she violated was not

clearly established. See, e.g., Ashcroft v. al‐Kidd, 563 U.S. 731

(2011). We must decide whether a union may raise any such

defense against its liability for the fair‐share fees it collected

before Janus II.

This is a matter of first impression in our circuit. But, as

the district court noted, every federal appellate court to have

decided the question has held that, while a private party act‐

ing under color of state law does not enjoy qualified immun‐

ity from suit, it is entitled to raise a good‐faith defense to lia‐

bility under section 1983. See Clement v. City of Glendale, 518

F.3d 1090, 1096–97 (9th Cir. 2008); Pinsky v. Duncan, 79 F.3d

306, 311–12 (2d Cir. 1996); Vector Research, Inc. v. Howard &

Howard Attorneys P.C., 76 F.3d 692, 698–99 (6th Cir. 1996); Jor‐

dan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1275–78

(3d Cir. 1994); Wyatt v. Cole, 994 F.2d 1113, 1118–21 (5th Cir.

1993) (“Wyatt II”).

Mr. Janus takes issue with this consensus position. He

points to the text of section 1983, which we grant says nothing

about immunities or defenses. That, he contends, is the end of

the matter. “Shall be liable to the party injured” is mandatory

language that, in his view, allows for no exceptions. The prob‐

lem with such an absolutist position, however, is that the Su‐

preme Court abandoned it long ago, when it recognized that

liability under section 1983 is subject to common‐law immun‐

ities that apply to all manner of defendants.

18 No. 19‐1553

The Court discussed that history in Wyatt I, where it noted

that despite the bare‐bones text of section 1983, it had “ac‐

corded certain government officials either absolute or quali‐

fied immunity from suit if the tradition of immunity was so

firmly rooted in the common law and was supported by such

strong policy reasons that Congress would have specifically

so provided had it wished to abolish the doctrine.” 504 U.S. at

163–64 (quoting Owen v. City of Independence, 445 U.S. 622, 637

(1980)) (internal quotation marks omitted). In Wyatt I, the

Court had to decide how far its immunity jurisprudence

reached, and specifically, whether private parties acting under

color of state law would have been able, at the time section

1983 was enacted (in 1871), to invoke the same immunities

that public officials had. (That is more than a bit counterfac‐

tual, as the Court did not recognize this type of private liabil‐

ity until 1982, but we put that to one side.) Surveying its im‐

munity jurisprudence, including Mitchell v. Forsyth, 472 U.S.

511 (1985), Harlow v. Fitzgerald, 457 U.S. 800 (1982), Wood v.

Strickland, 420 U.S. 308 (1975), and Pierson v. Ray, 386 U.S. 547

(1967), the Court “conclude[ed] that the rationales mandating

qualified immunity for public officials are not applicable to

private parties.” 504 U.S. at 167.

The Court recognized that this outcome risked leaving pri‐

vate defendants in the unenviable position of being just as

vulnerable to suit as public officials, per Lugar, but not pro‐

tected by the same immunity. Id. at 168. But, critically for

AFSCME, the Court pointed toward the solution to that prob‐

lem. It distinguished between defenses to suit and immunity

from suit, the latter of which is more robust, in that it bars

recovery regardless of the merits. Id. at 166. It then confirmed

that its ruling rejecting qualified immunity did “not foreclose

the possibility that private defendants faced with § 1983

No. 19‐1553 19

liability under [Lugar] could be entitled to an affirmative de‐

fense based on good faith and/or probable cause or that § 1983

suits against private, rather than governmental, parties could

require plaintiffs to carry additional burdens.” Wyatt I, 504

U.S. at 169.

Mr. Janus rejects the line that the Court drew between

qualified immunity and a defense to liability; he sees it as

nothing but a labeling game. But Wyatt I directly refutes this

criticism. Adding to the language above from the majority,

Justice Kennedy, in concurrence, explained why a defense on

the merits might be available for private parties even if im‐

munity is not. “By casting the rule as an immunity, we imply

the underlying conduct was unlawful, a most debatable prop‐

osition in a case where a private citizen may have acted in

good‐faith reliance upon a statute.” 504 U.S. at 173 (Kennedy,

J., concurring). The distinction between an immunity and a

defense is one of substance, not just nomenclature, and “is im‐

portant because there is support in the common law for the

proposition that a private individual’s reliance on a statute,

prior to a judicial determination of unconstitutionality, is con‐

sidered reasonable as a matter of law.” Id. at 174; see also Lu‐

gar, 457 U.S. at 942 n.23 (“Justice Powell is concerned that pri‐

vate individuals who innocently make use of seemingly valid

state laws would be responsible, if the law is subsequently

held to be unconstitutional, for the consequences of their ac‐

tions. In our view, however, this problem should be dealt with

not by changing the character of the cause of action but by

establishing an affirmative defense.”).

The Wyatt I Court remanded the case to the Fifth Circuit,

which decided that the “question left open by the majority”—

whether a good‐faith defense is available in section 1983

20 No. 19‐1553

actions—“was largely answered” in the affirmative by the five

concurring and dissenting justices. Wyatt II, 994 F.2d at 1118.

The court accordingly held “that private defendants sued on

the basis of Lugar may be held liable for damages under § 1983

only if they failed to act in good faith in invoking the uncon‐

stitutional state procedures, that is, if they either knew or

should have known that the statute upon which they relied

was unconstitutional.” Id.

Other circuits followed suit. In Jordan, the Third Circuit

noted “the [Supreme Court’s] statement [in Wyatt I] that per‐

sons asserting section 1983 claims against private parties

could be required to carry additional burdens, and the state‐

ments in Lugar which warn us [that] a too facile extension of

section 1983 to private parties could obliterate the Fourteenth

Amendment’s limitation to state actions that deprive a person

of constitutional rights and the statutory limitation of section

1983 actions to claims against persons acting under color of

law.” 20 F.3d at 1277 (cleaned up). Those considerations, the

court said, lead to the conclusion that “‘good faith’ gives state

actors a defense that depends on their subjective state of

mind, rather than the more demanding objective standard of

reasonable belief that governs qualified immunity.” Id. The

Sixth Circuit concurred in Vector Research, 76 F.3d at 699, as

did the Ninth Circuit in Clement, 518 F.3d at 1096–97. Most

recently, in a case decided after Harris v. Quinn, the Second

Circuit allowed a good‐faith defense to a section 1983 claim

for reimbursement of agency fees paid prior to decision. Jarvis

v. Cuomo, 660 F. App’x 72, 75–76 (2d Cir. 2016).

Mr. Janus pushes back against these decisions with the ar‐

gument that there is no common‐law history before 1871 of

private parties enjoying a good‐faith defense to constitutional

No. 19‐1553 21

claims. As we hinted earlier, however, the reason is simple:

the liability of private parties under section 1983 was not

clearly established until, at the earliest, the Court’s decision in

United States v. Price, 383 U.S. 787 (1966). For nearly 100 years,

nothing would have prompted the question.

We now join our sister circuits in recognizing that, under

appropriate circumstances, a private party that acts under

color of law for purposes of section 1983 may defend on the

ground that it proceeded in good faith. The final question is

whether that defense is available to AFSCME.

B. Good‐faith Defense for AFSCME

Although this is a new question for us, we note that every

district court that has considered the precise question before

us—whether there is a good‐faith defense to liability for pay‐

ments collected before Janus II—has answered it in the affirm‐

ative.1 While those views are not binding on us, the unanimity

of opinion is worth noting.

1 See Hamidi v. SEIU Local 1000, 2019 WL 5536324 (E.D. Cal. Oct. 25,

2019); LaSpina v. SEIU Pennsylvania State Council, 2019 WL 4750423 (M.D.

Pa. Sept. 30, 2019); Casanova v. International Ass’n of Machinists, Local 701,

No. 1:19‐cv‐00428, Dkt. #22 (N.D. Ill. Sept. 11, 2019); Allen v. Santa Clara

Cty. Correctional Peace Officers Ass’n, 2019 WL 4302744 (E.D. Cal. Sept. 11,

2019); Ogle v. Ohio Civil Serv. Emp. Ass’n, 2019 WL 3227936 (S.D. Ohio July

17, 2019), appeal pending, No. 19‐3701 (6th Cir.); Diamond v. Pennsylvania

State Educ. Ass’n, 2019 WL 2929875 (W.D. Pa. July 8, 2019), appeal pending,

No. 19‐2812 (3d Cir.); Hernandez v. AFSCME California, 386 F. Supp. 3d

1300 (E.D. Cal. 2019); Doughty v. State Employee’s Ass’n, No. 1:19‐cv‐00053‐

PB (D.N.H. May 30, 2019), appeal pending, No. 19‐1636 (1st Cir.); Babb v.

California Teachers Ass’n, 378 F. Supp. 3d 857 (C.D. Cal. 2019); Wholean v.

CSEA SEIU Local 2001, 2019 WL 1873021 (D. Conn. Apr. 26, 2019), appeal

pending, No. 19‐1563 (2d Cir.); Akers v. Maryland Educ. Ass’n, 376 F. Supp.

3d 563 (D. Md. 2019), appeal pending, No. 19‐1524 (4th Cir.); Bermudez v.

22 No. 19‐1553

The first task we have under Wyatt I is to identify the “most

closely analogous tort” to which we should turn for guidance.

504 U.S. at 164 (citations and internal quotation marks omit‐

ted). Arguing in some tension with his statute‐of‐limitations

position, Mr. Janus says that his claim lacks any common law

analogue. His back‐up position is that good faith is pertinent

only if the underlying offense has a state‐of‐mind element,

and he asserts that the most analogous tort in his case lacks

such an element.

Mr. Janus compares the First Amendment violation in his

case to conversion. But that analogy does not work, at least

with regard to the state’s deduction of fair‐share fees and its

transfer of those fees to the union. Conversion requires an in‐

tentional and serious interference with “the right of another

to control” a chattel. Restatement (Second) of Torts § 222A

(1965). At the time AFSCME received Mr. Janus’s fair‐share

fees, he had no “right to control” that money. Instead, under

SEIU Local 521, 2019 WL 1615414 (N.D. Cal. Apr. 16, 2019); Lee v. Ohio Educ.

Ass’n, 366 F. Supp. 3d 980 (N.D. Ohio 2019), appeal pending, No. 19‐3250

(6th Cir.); Hough v. SEIU Local 521, 2019 WL 1274528 (N.D. Cal. Mar. 20,

2019), amended, 2019 WL 1785414 (N.D. Cal. Apr. 16, 2019), appeal pend‐

ing, No. 19‐15792 (9th Cir.); Crockett v. NEA‐Alaska, 367 F. Supp. 3d 996 (D.

Alaska 2019), appeal pending, No. 19‐35299 (9th Cir.); Carey v. Inslee, 364

F. Supp. 3d 1220 (W.D. Wash. 2019), appeal pending, No. 19‐35290 (9th

Cir.); Cook v. Brown, 364 F. Supp. 3d 1184 (D. Or. 2019), appeal pending,

No. 19‐35191 (9th Cir.); Danielson v. AFSCME, Council 28, 340 F. Supp. 3d

1083 (W.D. Wash. 2018), appeal pending, No. 18‐36087 (9th Cir.). See also

Winner v. Rauner, 2016 WL 7374258 (N.D. Ill. Dec. 20, 2016) (post‐Harris

claim for fee reimbursement); Hoffman v. Inslee, 2016 WL 6126016 (W.D.

Wash. Oct. 20, 2016) (same). But see Lamberty v. Connecticut State Police Un‐

ion, 2018 WL 5115559 (D. Conn. Oct. 19, 2018) (dismissing for lack of stand‐

ing but implying plaintiffs were entitled to previously withheld fees, plus

interest).

No. 19‐1553 23

Illinois law and Abood, the union had a right to the fees under

the collective bargaining agreement with CMS. This rules out

conversion. As the Supreme Court said in Chicot Cnty. Drain‐

age Dist. v. Baxter State Bank, 308 U.S. 371 (1940), “the actual

existence of a statute, prior to such a determination, is an op‐

erative fact and may have consequences which cannot justly

be ignored.” Id. at 374.

There are also at least two privileges that may be relevant

to a conversion‐style claim: authority based upon public in‐

terest, Restatement (Second) of Torts § 265 (1965), and privi‐

lege to act pursuant to court order, Restatement (Second) of

Torts § 266 (1965). Section 265 provides that “one is privileged

to commit an act which would otherwise be a trespass to a

chattel or a conversion if he is acting in discharge of a duty or

authority created by law to preserve the public safety, health,

peace, or other public interest, and his act is reasonably nec‐

essary to the performance of his duty or the exercise of his

authority.” While the usual context for the assertion of this

privilege is law enforcement, it is not too much of a stretch to

apply it to the union’s conduct here. CMS and AFSCME acted

pursuant to state law. That sounds like action in discharge of

a duty imposed by law. Section 266, which provides a privi‐

lege when one acts pursuant to a court order, is not directly

applicable because there was no court order directing

AFSCME to receive fair‐share fees—Abood was permissive,

not mandatory. Nevertheless, CMS and AFSCME did rely on

the Supreme Court’s opinion upholding the legality of exactly

this process.

AFSCME contends that the better analogy is to the tort of

abuse of process. Abuse of process occurs where a party “uses

a legal process, whether criminal or civil, against another

24 No. 19‐1553

primarily to accomplish a purpose for which it is not de‐

signed.” Restatement (Second) of Torts § 682 (1977). Alterna‐

tively, the most analogous tort might be interference with

contract. See Restatement (Second) of Torts § 766A (1979). Un‐

der the agency‐fee arrangement, a certain portion of the salary

CMS contracted to pay employees went instead to the union.

This arguably made the contract less lucrative for objecting

employees and violated their First Amendment rights.

None of these torts is a perfect fit, but they need not be. We

are directed to find the most analogous tort, not the exact‐match

tort. This is inherently inexact. Although there are reasonable

arguments for several different torts, we are inclined to agree

with AFSCME that abuse of process comes closest. But per‐

haps the search for the best analogy is a fool’s errand. As sev‐

eral district courts have commented, the Supreme Court in

Wyatt I embarked on the search for the most analogous tort

only for immunity purposes—the Court never said that the

same methodology should be used for the good‐faith defense.

See, e.g., Carey, 364 F. Supp. 3d at 1229–30; Babb, 378 F. Supp.

3d at 872–73; Diamond, 2019 WL 2929875 at *25–26. In the al‐

ternative, therefore, we leave common‐law analogies behind

and consider the appropriateness of allowing a good‐faith de‐

fense on its own terms.

C. Good‐faith Defense under Wyatt I

Like our sister circuits, we read the Court’s language in

Wyatt I and Lugar, supplemented by Justice Kennedy’s opin‐

ion concurring in Wyatt I, as a strong signal that the Court in‐

tended (when the time was right) to recognize a good‐faith

defense in section 1983 actions when the defendant reasona‐

bly relies on established law. This is not, we stress, a simple

“mistake of law” defense. Neither CMS nor AFSCME made

No. 19‐1553 25

any mistake about the state of the law during the years be‐

tween 1982 and June 27, 2018, when Janus II was handed

down. Abood was the operative decision from the Supreme

Court from 1977 onward, until the Court exercised its exclu‐

sive prerogative to overrule that case. Like its counterparts

around the country, the State of Illinois relied on Abood when

it adopted a labor relations scheme providing for exclusive

representation of public‐sector workers and the remit of fair‐

share fees to the recognized union. The union then relied on

that state law in its interactions with other actors.

We realize that there were signals from some Justices dur‐

ing the years leading up to Janus II that indicated they were

willing to reconsider Abood, but that is hardly unique to this

area. Sometimes such reconsideration happens, and some‐

times, despite the most confident predictions, it does not. See,

e.g., Dickerson v. United States, 530 U.S. 428 (2000) (reaffirming

the Miranda rule); see also Agostini, 521 U.S. at 237 (“We do

not acknowledge, and we do not hold, that other courts

should conclude our more recent cases have, by implication,

overruled an earlier precedent.” (cleaned up)). The Rule of

Law requires that parties abide by, and be able to rely on,

what the law is, rather than what the readers of tea‐leaves pre‐

dict that it might be in the future.

Notably, Mr. Janus does not allege that CMS and

AFSCME, acting pursuant to state law, failed to comply with

Abood. Mr. Janus says only that AFSCME did not act in good

faith because it “spurned efforts to have agency fees placed in

escrow while their constitutionality was determined.” But

AFSCME was under no legal obligation to escrow the fair‐

share fees for an indefinite period while the case was being

litigated. Such an action, as AFSCME says, would (in the

26 No. 19‐1553

absence of a court order requiring security of some kind)

“have been hard to square with the fiduciary duty the Union

owes to its own members,” as the unit’s exclusive representa‐

tive.

Until Janus II said otherwise, AFSCME had a legal right to

receive and spend fair‐share fees collected from nonmembers

as long as it complied with state law and the Abood line of

cases. It did not demonstrate bad faith when it followed these

rules.

D. Entitlement to Money Damages

No one doubts that Mr. Janus is entitled to declaratory and

injunctive relief. The Supreme Court declared that the status

quo violated his First Amendment rights and that “States and

public‐sector unions may no longer extract agency fees from

nonconsenting employees.” 138 S. Ct. at 2486. Mr. Janus is

now protected from that practice. Any remaining relief was

for the district court to consider. That court declined to grant

monetary damages, on the ground that AFSCME’s good‐faith

defense shielded the union from such liability. We agree with

that conclusion.

While this may not be all that Mr. Janus hoped for in this

litigation, it is not unusual for remedies to be curtailed in light

of broader legal doctrines. Moreover, though Mr. Janus con‐

tends that he did not want any of the benefits of AFSCME’s

collective bargaining and other representative activities over

the years, he received them. Putting the First Amendment is‐

sues that concerned the Supreme Court in Janus II to one side,

there was no unjust “windfall” to the union, as Mr. Janus al‐

leges, but rather an exchange of money for services. Our

No. 19‐1553 27

decision in Gilpin v. AFSCME, 875 F.2d 1310 (7th Cir. 1989) is

on point:

[T]he union negotiated on behalf of these employees as

it was required by law to do, adjusted grievances for

them as it was required by law to do, and incurred ex‐

penses in doing these things … . The plaintiffs do not

propose to give back the benefits that the union’s ef‐

forts bestowed on them. These benefits were rendered

with a reasonable expectation of compensation

founded on the collective bargaining agreement and

federal labor law, and the conferral of the benefits on

the plaintiffs would therefore give rise under conven‐

tional principles of restitution to a valid claim by the

union for restitution if the union were forced to turn

over the escrow account to the plaintiffs and others

similarly situated to them.

Id. at 1316.

We have followed similar principles in the ERISA context.

“If restitution would be inequitable, as where the payor ob‐

tained a benefit that he intends to retain from the payment

that he made and now seeks to take back, it is refused.” Oper‐

ating Eng’rs Local 139 Health Benefit Fund v. Gustafson Const.

Corp., 258 F.3d 645, 651 (7th Cir. 2001); see also Constr. Indus.

Ret. Fund of Rockford, Ill. v. Kasper Trucking, Inc., 10 F.3d 465,

467 (7th Cir. 1993) (“The welfare fund pooled the money to

provide benefits for all persons on whose behalf contributions

were made. Because the drivers received the health coverage

for which they paid through the deductions Kasper sent to the

fund, no one is entitled to restitution.”); UIU Severance Pay Tr.

Fund v. Local Union No. 18‐U, United Steelworkers of Am., 998

F.2d 509, 513 (7th Cir. 1993) (“[B]ecause the cause of action we

28 No. 19‐1553

are authorizing is equitable in nature, recovery will not follow

automatically upon a showing that the Union contributed

more than was required but only if the equities favor it.” (in‐

ternal quotation marks omitted)). We conclude that Mr. Janus

has received all that he is entitled to: declaratory and injunc‐

tive relief, and a future free of any association with a public

union.

IV

Before closing, we emphasize again that the good‐faith de‐

fense to section 1983 liability is narrow. It is not true, as Mr.

Janus charges, that this defense will be available to “every de‐

fendant that deprives any person of any constitutional right.”

We predict that only rarely will a party successfully claim to

have relied substantially and in good faith on both a state stat‐

ute and unambiguous Supreme Court precedent validating

that statute. But for those rare occasions, following the lead

first of the Supreme Court in Wyatt I and second of our sister

circuits, we recognize a good‐faith defense for private parties

who act under color of state law for purposes of section 1983.

We AFFIRM the judgment of the district court.

No. 19‐1553 29

MANION, Circuit Judge, concurring. The court’s opinion in

this challenging case is thorough, and I concur with the

court’s ultimate conclusion. I have a couple additional

thoughts. Some might observe that Abood had some benefit

to the objectors because they no longer had to pay service

fees equal to union dues as a condition of employment. But

for 41 years, the nonunion employees had to pay their “fair

share.”

The unions received a huge windfall for 41 years. As the

Supreme Court acknowledged in Janus II, Abood was wrong,

so the unions got what the Court called a “considerable

windfall.” The Court in Janus II sums it up pretty well:

We recognize that the loss of payments from

nonmembers may cause unions to experience

unpleasant transition costs in the short term,

and may require unions to make adjustments

in order to attract and retain members. But we

must weigh these disadvantages against the

considerable windfall that unions have re‐

ceived under Abood for the past 41 years. It is

hard to estimate how many billions of dollars

have been taken from nonmembers and trans‐

ferred to public‐sector unions in violation of

the First Amendment. Those unconstitutional

exactions cannot be allowed to continue in‐

definitely.

Janus v. AFSCME, Council 31, 138 S. Ct. 2448, 2485–86 (2018).

Even though the Supreme Court reached the wrong re‐

sult in Abood 41 years before Janus II, the unions justify their

acceptance of many millions of dollars because they accept‐

30 No. 19‐1553

ed the money in “good faith.” Probably a better way of look‐

ing at it would be to say rather than good faith, they had

very “good luck” in receiving this windfall for so many

years. Since the court is not holding that the unions must re‐

pay a portion of the windfall, they can remind themselves of

their good luck for the years ahead.