Appendix — Culpeperer v. Schneider (Nos. 90-1513, 90-1470, 90-1651)

. "4

90-1513

No. 90-

a2 £2 40 fe SF

APR 1 1991

OFFICE OF THE Cisuck

In the

Supreme Court of the United States

OctroBer TERM, 1990

CARMEN ANA CULPEPER, er At.,

PETITIONERS,

v.

ROBERT SCHNEIDER, Er AL.,

RESPONDENTS.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

Hector Rivera Cruz

Attorney General

Jorce E. Perez Diaz

Solicitor General

MicueLt A. SANTANA BAGUR

Acting Deputy Solicitor General

* ANABELLE RODRIGUEZ- RODRIGUEZ

Assistant Solicitor General

Department of Justice

P. O. Box 192

San Juan, Puerto Rico 00902

(809) 721-2924

*Counsel of Record

Blanchard Press, Inc., Boston, Mass. — Law Printers [617] 426-6690

J

TABLE OF CONTENTS

Page

Appenpix A: Opinion of the Court of Appeals for the

First Circuit, October 24, 1990 ................... A-1

AppenbIx B: Order of the Court of Appeals, December

20, 1990, denying Petition for Rehearing ........... A-37

AppenbDIxX C: Opinion and Order of the District Court

for the District of Puerto Rico, March 3, 1988 ....... A-39

ApPENIDX D: §3343, Destruction of Presumptions: res

RN cana ir eres Fito anger tact rn ne A-80

Appenix E: Opinion of the Supreme Court of Puerto

ON envy cae beeen s eae | A-81

AppeNpDIx F: Opinion of the Supreme Court of Puerto

OE ee ee re ene A-107

AppeNnpIx G: Opinion of the Supreme Court of Puerto

Rico, Humberto Pagan Hernandez v. University of

Puerto Rico, et al, October 16, 1978 ............... A-164

Appenpix H: Opinion of the Supreme Court of Puerto

Rico, A & P Contractors, Inc. v. Association Cana,

ee Oa Ps I a co os che ae eee hee A-192

AppeNpDIx I: Opinion of the Supreme Court of Puerto

Rico, Miguel D. Lausell Marxuach vy. Priscilla Diaz

ae Vamos, Maree 11, F076 . ou. ck ce esc cs wees A-205

APPENDIX A

United States Court of Appeals

For the First Circuit

Nos. 88-1937 to 88-1939

Robert E. SCHNEIDER, Jr., et al.,

PLAINTIFFS, APPELLEES,

v.

COLEGIO de ABOGADOS de PUERTO RICO,

DEFENDANT, APPELLANT.

Rosert E. SCHNEIDER, Jr., ev Av.,

PLAINTIFFS, APPELLEES,

v.

COLEGIO de ABOGADOS de PUERTO RICO, et al.,

DEFENDANTS, APPELLEES.

Appeal of Carmen Ana CULPEPER, etc., et al.,

DEFENDANTS.

Robert E. SCHNEIDER, Jr., et al.,

PLAINTIFFS, APPELLANTS,

v.

COLEGIO de ABOGADOS de PUERTO RICO, et al.,

DEFENDANTS, APPELLEES.

Hearp Nov. 2, 1989.

Decipep Ocr. 24, 1990.

Robert E. Schneider, Jr., with whom Hector L. Marquez

was on brief, for Robert E. Schneider, Jr., et al.

Anabelle Rodriguez-Rodriguez, Asst. Soi. Gen., with whom

Rafael Ortiz-Carrion, Sol. Gen., Jorge E. Perez Diaz, Sol.

A-2

Gen., and Norma Cotti-Cruz, Deputy So!. Gen., were on

brief for Carmen Ana Culpeper, etc., et al.

Harry Anduze Montano with whom Carlos V. Garcia Guti-

errez, Carlos A. Rodriguez Vidal, Pia Gallegos, Patricio Mar-

tinez, and Carlos Ramos, were on brief, for Colegio de

Abogados de Puerto Rico.

Before CAMPBELL, Circuit Judge, Corrin, Senior Circuit

Judge, and Pieras,* District Judge.

CorrFin, Senior Circuit Judge.

This case requires us to add another chapter, still not the

final one, to an already lengthy saga concerning the constitu-

tionality of Puerto Rico’s system of mandatory bar member-

ship. In the decision on appeal, the United States District

Court for the District of Puerto Rico held that compelled

membership in the bar association known as the Colegio de

Abogados de Puerto Rico (“Colegio”) is unconstitutional in its

present form. Schneider v. Colegio de Abogados de Puerto

Rico, 682 F.Supp. 674 (D.P.R. 1988). The district court also

invalidated statutes requiring that lawyers affix official

stamps, sold by the Colegio, to all court documents. We agree

that the present system is constitutionally deficient, and there-

fore in large part affirm the conclusions of the district court.

We modify the court’s judgment, however, to delay tempo-

rarily an injunction prohibiting mandatory dues so that the

Colegio may remain integrated while it attempts to correct its

constitutional defects.' We also limit the court’s holding on the

stamp statutes.

I. Legal and Factual Background

We detailed the origins and early history of this case at

length when the dispute last came before us. See Romany v.

Colegio de Abogados de Puerto Rico, 742 F.2d 32 (lst Cir.

*Of the District of Puerto Rico, sitting by designation.

' An “integrated” bar is an association of attorneys in which membership

and dues are required as a condition of practicing law in the jurisdiction.

A-3

1984). The district court in its most recent decision also set.

forth a thorough review of the prior proceedings. See Colegio,

682 F.Supp. at 675-679. We see no need to repeat, once again,

the full factual and procedural background of this case. This

opinion therefore shal! contain only that history necessary for a

full understanding of the issues we decide today.

Accordingly, we begin this background section by stating

briefly the constitutional claim raised by plaintiffs and review-

ing the federal law relevant to that claim. The next subsection

describes the Colegio system as it presently exists. We then

review the district court’s decision. In Section II of the opin-

ion, we briefly discuss jurisdiction and appealability issues.

Section III contains our analysis and conclusions. The remain-

ing sections discuss the stamp issue and damages, and provide

a brief summary of the opinion.

A. Constitutional Principles

Plaintiffs, five attorneys, claim that Puerto Rico’s manda-

tory system of bar membership violates their First Amendment

freedom of association by depriving them of the right not to

associate with the Colegio, which conducts activities they find

objectionable.? Their primary complaint is that the Colegio

uses their compulsory dues and fees to publicly espouse views

and support causes, with which they disagree, on controversial

issues far removed from the immediate concerns of lawyers.

These issues have in the past included supporting the Sandi-

nista Front for National Liberation in Nicaragua, forcing the

United States Navy to leave the island of Vieques, stopping the

? Plaintiffs brought this action against the Colegio and the Common-

wealth Secretaries of the Treasury and of Justice, and the Justices of the

Puerto Rico Supreme Court, based on the alleged unconstitutionality of sta-

tutes compelling bar membership and payment of dues and stamp fees. See

P.R.Laws Ann. tit. 4, §§ 771-785, 1006, 1038. The Justices remain in the

case as nominal parties only in respect to the stamp claims. See In re Justices

of the Supreme Court of Puerto Rico, 695 F.2d 17, 20-27 (\st Cir. 1982).

Thus, the defendants appealing at this time are only the Colegio and the

Secretaries.

A-4

draft, and amending the electoral law in Puerto Rico. See

Schneider v. Colegio de Abogados de Puerto Rico, 565

F.Supp. 963, 966-971 (D.P.R. 1983); 682 F.Supp. at 679-681.

In a decision reached after oral argument in this case, and

for which we held up our opinion, the United States Supreme

Court addressed a virtually identical claim made by 21 mem-

bers of the California bar. In Keller v. State Bar of California,

___. * U.S. ___, 110 S.Ct. 2228, 110 L.Ed.2d 1 (1990), the

Court reaffirmed its earlier conclusion that compelled mem-

bership in a state bar association, and the exaction of compul-

sory dues, do not per se violate an individual's First Amend-

inent rights, see Lathrop v. Donahue, 367 U.S. 820, 81 S.Ct.

1826, 6 L.Ed.2d 1191 (1961).* The court went on, however, to

establish for the first time that the principles it previously had

developed for the permissible use of compulsory union dues

are equally applicable for the use of mandatory bar dues.

Abood [v. Detroit Board of Education, 431 U.S. 209

[97 S.Ct. 1782, 52 L.Ed.2d 261] (1977)] held that a union

could not expend a dissenting individual’s dues for

ideological activities not “germane” to the purpose for

which compelled association was justified: collective bar-

gaining. Here the compelled association and integrated

bar is justified by the State’s interest in regulating the

legal profession and improving the quality of legal serv-

ices. The State Bar may therefore constitutionally fund

activities germane to those goals out of the mandatory

dues of all members. It may not, however, in such man-

ner fund activities of an ideological nature which fall out-

side of those areas of activity.

® Like the California and Michigan bar associations at issue in Keller and

Lathrop, the Colegio is an organization established by statute to regulate the

legal profession and perform other functions associated with improving the

administration of justice. See P.R.Laws Ann., tit. 4, §§ 771-773. We there-

fore start from the proposition that the Commonwealth constitutionally may

condition the right to practice law upon membership in the Colegio. See

Keller, 110 S.Ct. at 2232-33 (quoting Lathrop).

A-5

110 S.Ct. at 2236.

The Supreme Court recognized that its limitation on the use

of mandatory bar dues was not self-executing and that a diffi-

cult problem remained in defining the class of activities ger-

mane to “regulating the legal profession and improving the

quality of legal services.” Jd. The Court again found the union

context helpful in setting guiding principles, and quoted from

its decision in Ellis v. Railway Clerks, 466 U.S. 435, 448, 104

S.Ct. 1883, 1892, 80 L.Ed.2d 428 (1984):

“[W]hen employees such as petitioners object to being

burdened with particular union expenditures, the test

must be whether the challenged expenditures are neces-

sarily or reasonably incurred for the purpose of perform-

ing the duties of an exclusive representative of the em-

ployees in dealing with the employer on labor-manage-

ment issues. Under this standard, objecting employees

may be compellato pay their fair share of not only the

direct costs of negotiating and administering a collective-

bargaining contract and of settling grievances and dis-

putes, but also the expenses of activities or undertakings

normally or reasonably employed to implement or effec-

tuate the duties of the union as exclusive representative of

the employees in the bargaining unit.”

We think these principles are useful guidelines for deter-

mining permissible expenditures in the present context as

well. Thus, the guiding standard must be whether the

challenged expenditures are necessarily or reasonably in-

curred for the purpose, of regulating the legal profession

or ‘improving the quality of the legal service available to

the people of the State.’ Lathrop, 367 U.S., at 843 [81

S.Ct. at 1838] (plurality opinion).

110 S.Ct. at 2236. Even with this standard, however, the

Court acknowledged that the line will be difficult to draw

A-6

between those State Bar activities in which the officials

and members of the Bar are acting essentially as profes-

sional advisors to those ultimately charged with the reg-

ulation of the legal profession, on the one hand, and those

activities having political or ideological coloration which

are not reasonably related to the advancement of such

goals. ... But the extreme ends of the spectrum are clear:

Compulsory dues may not be expended to endorse or ad-

vance a gun control or nuclear weapons freeze initiative;

at the other end of the spectrum petitioners have no valid

constitutional objection to their compulsory dues being

spent for activities connected with disciplining members

of the bar or proposing ethical codes for the profession.

Id. at 2237.

The Court in Keller also acknowledged that state bar asso-

ciations may encounter added inconvenience or burden in en-

suring that compulsory dues are used only for permissible pur-

poses, but observed that “‘such additional burden or incon-

venience is hardly sufficient to justify contravention of the

constitutional mandate,’” 110 S.Ct. at 2237 (quoting Keller v.

State Bar, 47 Cal.3d 1152, 1192, 255 Cal. Rptr. 542, 568, 767

P.2d 1020, 1046 (1989) (Kaufman, J., concurring and dis-

senting)).

The Court therefore held that a permissible system of man-

datory bar membership must include a mechanism for protect-

ing the rights of dissenting members to withhold financial sup-

port of activities that fall outside the bar’s core purposes.‘ On

the limited record before it, the Court declined to speculate on

the various methods a bar association might adopt to accom-

plish the required segregation of funds. The justices noted,

however, that the procedure they deemed adequate for unions

in Teachers v. Hudson, 475 U.S. 292, 106 S.Ct. 1066, 89 L.

* We shall use the phrases “core purposes” or “core functions” throughout

this opinion to refer to the bar's responsibility for regulating the legal profes-

sion and improving the quality of the legal service available to the people of

the Commonwealth.

A-7

Ed.2d 232 (1986), also would suffice in the bar setting. 110

S.Ct. at 2237. In Hudson, the Court held that “the constitu-

tional requirements for the collection of ... fees include an

adequate explanation of the basis for the fee, a reasonably

prompt opportunity to challenge the amount of the fee before

an impartial decisionmaker, and an escrow for the amounts

reasonably in dispute while such challenges are pending.” 475

U.S. at 310, 106 S.Ct. at 1078.

Before turning to our analysis of whether the Cclegio sys-

tem, which is modeled after the Hudson procedure, fulfills

these constitutional requirements, we complete our back-

ground summary by describing that system and why the dis-

trict court found that it is inadequate to protect its members’

First Amendment rights.

B. The Colegio System®

In 1982, in the course of state proceedings involving some of

the attorneys who are plaintiffs in this federal case, the

Supreme Court of Puerto Rico upheld under state law compul-

sory membership in the Colegio and compulsory financial sup-

port of the bar. See Colegio de Abogados v. Schneider, 112

D.P.R. 540, 12 Official Translations of the Opinions of the

Supreme Court of Puerto Rico 676 (1982). Consistent with

federal law, however, the court held that lawyers who dis-

sented from ideological activities not related to the Colegio’s

purposes must have the right te prevent the use of their funds

for those activities. The court ordered that a remedy be de-

signed to protect the dissenters’ right to object and, in a 1986

ruling, it adopted the rebate and escrow procedure that is

challenged in this case (“the 1986 Rule”). Schneider v. Colegio

de Abogados, 117 D.P.R. 504 (1986), Official Translation of

the Supreme Court of Puerto Rico, slip op. (June 26, 1986)

(hereinafter Schneider, Official Translation).

* In this section, and throughout Section I, we will focus entirely on the

collection of mandatory dues. We will discuss the stamp issue separately

below. See Section !V infra.

A-8

The elements of the Supreme Court procedure are as

follows:

1. An interest-bearing escrow account must be set up, into

which 15 percent of dissenting attorneys’ dues will be

deposited.

2. Dissenting attorneys may, at the time they pay their

dues, file a general objection to the use of their dues for ideolog-

ical activities unrelated to the core purposes of the Colegio, and

eventually receive a refund of the proportion of their dues based

on the cost of all activities found to be “objectionable,” or

3. Attorneys may object on a case-by-case basis throughout

the year, receiving a proportionate refund based on the cost of

the specific activities to which they objected.

4. Athree-member panel, composed of retired members of

the Puerto Rico judiciary, will determine which activities are

truly “objectionable” and whether the 15 percent escrow

figure should be modified at some later date. This Review

Board has promulgated regulations governing the objection

procedure. See App. II at 323-344.

5. Dissenting members may not object to the use of their

funds for activities related to any of 15 listed “functions and

purposes” of the Colegio. Schneider, Official Translation, slip

op. at 17-18.

C. The District Court Opinion

1. Defects. The district court found two significant defects

in the Supreme Court's remedy. First, it held that the 1986

Rule fails to limit adequately the types of activities that may be

funded with compulsory fees. Second, the method used to ac-

commodate dissenting members, including the 15% escrow,

falls short of the procedures required by the Supreme Court

for protecting dissenters’ rights. We now describe its findings

with regard to each of these in some detail.

a. Activities Suitable for Compulsory Funding. The 1986

Rule provides for mandatory support for all “[a]ctivities com-

A-9

prised within the Bar Association’s purposes and ends which

are germane thereto.” Schneider, Official Translation, slip op.

at 17. In other words, if an activity promotes a purpose of the

Colegio, dissenters may be compelled to subsidize it. The

problem, in the district court’s view, is that the Puerto Rico

Supreme Court has defined too broadly the “purposes and

ends” that justify mandatory financial support. The court in

particular rejected two purposes articulated by the Puerto

Rico court in support of the integrated bar: “‘the creation of a

strongly pluralistic society,’ Schneider, Official Translation,

slip op. at 13 (quoting Schneider, 112 D.P.R. at 549) and

“contribut[ing] to the betterment of the administration of jus-

tice,” id. at 18.

The district court’s concern was that almost any activity

could be said to advance one or both of these interests, and

that dissenting lawyers therefore would be compelled to ac-

cept the Colegio’s publicly expressed viewpoint as representing

them on a vast number of sensitive issues. “Accepting these

standards as the guides to determine permissible bar activity,”

the court stated, “would be tantamount to a complete abdica-

tion of the court’s duty to protect dissenting attorneys’ First

Amendment rights.” 682 F.Supp. at 683.

The district court therefore articulated its own list of “per-

missible purposes” for which financial support may be com-

pelled. These purposes, which the court acknowledged may

not be exhaustive, all revolve around the role of the lawyer as

lawyer, rather than relying on the lawyer's more generic role

as an informed and perhaps influential member of a complex

society. The four areas are: monitoring attorney discipline, en-

suring attorney competence, increasing the availability of

legal services and improving court operations. Activities that

promote one or more of these purposes, and which therefore

may be funded by mandatory dues and fees, could include

continuing legal education programs, legal aid services, public

education on substantive areas of the law (e.g., landlord-ten-

ant) that would help citizens recognize and enforce their legal

A-10

rights, and public commentary on such matters as rules of

evidence and attorney advertising.®

b. Procedures. The district court found procedural prob-

lems with the 15% escrow amount and with the manner of fil-

ing objections.

The escrow system is inadequate, the district court held,

because the 1986 Rule fails to require a detailed accounting

showing how the Colegio spends its funds, and how it calcu-

lated the 15% setaside. The court relied on Hudson in holding

that the Colegio each year must precisely calculate the escrow

percentage based on its projected budget and its estimate of ex-

penditures to be made for objectionable purposes. 682 F.Supp.

at 687-88. It held that the Colegio not only must explain the

basis for the escrow amount, but also must justify the entire

amount to be collected. The court further held that the

Colegio must include a “buffer” in the escrow percentage to

ensure that, if the impermissible expenditures exceed the

amounts budgeted for them, the funds required to be returned

to dissenting members do not exceed the escrowed amount.

The other procedural problem noted by the district court is

the requirement that dissenters file objections to specific activ-

ities in order to receive a refund.’ The court held that, under

ditures — those without expressive content that benefit all members equally.

682 F.Supp. at 685. The Colegio, for example, provides life insurance for its

members. Because these kinds of items do not infringe on members’ First

Amendment rights in any significant way, if at all, the court felt that they

need not be strictly scrutinized. Id.. citing Ellis v. Railway Clerks, 466 U.S.

435, 456, 104 S.Ct. 1883, 1896, 80 L.Ed.2d 428 (1984).

’ Although the remedy provides for a “general objection” to be filed at the

beginning of the dues year, or at any time thereafter, the district court

viewed the filing of a general objection merely as a “notice of the right to ob-

ject,” with no refund being made until the Review Board adjudicates specific

objections. See Schneider, Official Translation, slip op. at 22 (§ C(3)(e)) and

Regulations at Articles 11 and 13, App. II at 337, 340.

At oral argument, defendants claimed that once any type of objection is

made — general or specific — the independent review panel must review all

Colegio activities and expenditures in order to determine which were objec-

tionable. Those making general objections would receive a full refund for all

A-11

Abood, a dissenter may not be required to object specifically to

an activity because this “‘would confront an individual .. .

with the dilemma of relinquishing either his right to withhold

his support of ideological causes to which he objects or his free-

dom to maintain his own beliefs without public disclosure.’”

682 F.Supp. at 689 (quoting Abood, 431 U.S. at 241, 97 S.Ct.

at 1802).

2. State of the Record. The district court unquestionably

was bothered by the state of the record before it. Despite re-

peated invitations, defendants failed to present evidence con-

cerning the extent of the Colegio’s non-ideological activities:

Instead, they urged the court to take judicial notice of the

lengthy list of law-related activities conducted by the Colegio

that was contained in the 1986 opinion of the Supreme Court

of Puerto Rico. See Schneider, 682 F.Supp. at 692-94 (Appen-

dix A). See also Schneider, Official Translation, slip op. at

25-43 (Appendix listing activities) .* That court had found that

the Colegio’s ideological activities were de minimis. Jd. at 13.

In contrast to the lack of evidence regarding non-ideological

activities, the district court received substantial evidence of

the partisan political activities undertaken by the Colegio. See

682 F.Supp. at 679-681. No party, however, provided the

court with quantitative or comparative data showing what

percentage of Colegio activities typically are devoted to each

category. Accordingly, the court felt obliged to conclude “that

the ideological activities of the Colegio constitute a large and

objectionable activities, whether or not there had been a specific objec-

tion.

We note, however, that neither the 1986 Rule nor the regulations adopted

to implement it include a provision for refunds in the absence of specific

objections. Thus, on their face, the Rule and regulations seem to operate as

the district court described.

* At oral argument, the attorney for defendant Colegio stated that numer-

ous documents, many of which had been generated for the state court pro-

ceeding that 'ed to creation of the 1986 Rule, had been offered to the district

court but were never admitted into evidence. We obviously do not know the

nature of the information contained in those materials, and we have no basis

for questioning the district court’s apparent conclusion that the offered docu-

ments would not have resolved its questions concerning the Rule.

aii ee

A-12

inseparable proportion of the Colegio’s total activities.” 682

F.Supp. at 681.°

Despite the problems it found, the district court stated its

belief that the Colegio could devise a lawful procedure incor-

porating most of the features of the 1986 Rule. 682 F.Supp. at

691. In the absence of appropriate modifications, however,

the court held that the Colegio either must cease all ideological

activities not germane to its core purposes or it may not compel

membership. So long as the status quo remained, defendants

were enjoined from taking any action against any Jawyer for

failing to pay fees to the Colegio.

II. Jurisdiction and Appealability

Before delving into our own discussion of the Colegio man-

datory membership system, we briefly address the parties’

various contentions that the case is not properly before us. The

defendants claim that principles of federalism, res judicata

and collateral estoppel bar our review. Plaintiffs argue that

defendants failed to perfect their appeals because of untimely

and incorrect filings. We reject all of these claims.

[1] Jurisdiction and preclusion. It is well-established that

lower federal courts have no jurisdiction to hear appeals from

state court decisions, even if the state judgment is challenged

as unconstitutional. Review of state decisions may be obtained

only in the United States Supreme Court. See D.C. Court of

* The district court observed that the apparent factual inconsistency be-

tween its findings of “pervasive and continuous” ideological activities by the

Colegio, 682 F.Supp. at 678; 565 F.Supp. as 965, and the Commonwealth

court's finding that such activities were de minimis was attributable, “at least

in part, to a different conception of what are ideological activities.” 682

F.Supp. at 678 n.3.

The court also suggested that the Commonwealth Supreme Court's find-

ings were inconsistent with the Colegio’s stipulation “that activities similar in

nature to those undertaken by the Colegio prior to 1983 [and listed by the

district court in its 1983 opinion, 565 F.Supp. at 966-71] have continued,”

682 F.Supp. at 678 & n.3. We note, however, that the Colegio’s stipulation

acknowledged only that certain types of activities have continued, and not

that those activities constituted a substantial portion of all Colegio pursuits.

A-13

Appeals v. Feldman, 460 U.S. 462, 476, 103 S.Ct. 1303, 1311,

75 L.Ed.2d 206 (1983); Rooker v. Fidelity Trust Co., 263 U.S.

413, 416, 44 S.Ct. 149, 150, 68 L.Ed. 362 (1923). See also 28

U.S.C. § 1257. In Feldman, the Supreme Court considered the

so-called Rooker doctrine specifically in the context of attorney

challenges to rules and regulations governing the bar, in that

instance relating to bar admission. The Court carefully distin-

guished between “genera) challenges to state bar rules, pro-

mulgated by state courts in nonjudicial proceedings” — for

which there is jurisdiction in the lower federal courts — and

“challenges to state-court decisions in particular cases arising

out of judicial proceedings,” 460 U.S. at 486, 103S.Ct. at 1317

— for which there is not.

Defendants claim that the Rooker doctrine is triggered in

this case because plaintiffs are, in effect, attempting to appeal

the Puerto Rico Supreme Court’s decisions in the Schneider

case. According to defendants, the 1986 Rule was the particu-

lar judicial remedy ordered in the original Commonwealth

Schneider case, and the district court therefore had no juris-

diction to consider its validity.

We disagree, primarily for the reasons identified by the dis-

trict court. 670 F.Supp. 1098, 1100-1103. The fate of attorneys

Schneider and Ramos — the particular judicial decision made

in the Commonwealth court — is not at issue here. Plaintiffs

challenge not the outcome of that specific case, but the general

Colegio system of mandatory bar membership, as defined by

various statutory provisions and the 1986 Rule. Although the

motivation for the 1986 Rule originated with the Schneider-

Ramos case, we are persuaded that the Supreme Court in-

voked its inherent powers over the bar to go beyond their in-

dividual complaints to accomplish needed bar reform. See

Romany, 742 F.2d at 34 n.3, 40 & 42 (Puerto Rico Supreme

Court has “unique latitude” to regulate the bar). That the

court chose to combine its rule-making with its adjudication in

the form of a single opinion does not detract from the non-

judicial nature of the Rule. See Feldman, 460 U.S. at 482, 103

ee

A-14

S.Ct. at 1314 (“‘[T]he form of the proceeding is not signifi-

cant. It is the nature and effect which is controlling.’”’)

(quoting In re Summers, 325 U.S. 561, 567, 65 S.Ct. 1307,

1311, 89 L.Ed. 1795 (1945)). See also Zimmerman v. Griev-

ance Com. of Fifth Jud. Dist., 726 F.2d 85, 86 (2d Cir. 1984)

(referring to the possibility of a combined adjudication and

rulemaking in single opinion); Razatos v. Colorado Supreme

Court, 746 F.2d 1429, 1433 (10th Cir. 1984) (finding jurisdic-

tion after noting that “(t|he distinction is often difficult to

draw” between “general challenges to state bar rules as pro-

mulgated and challenges to state court decisions in particular

cases.”’)

Moreover, a contrary conclusion on the nature of the 1986

Rule would have little impact on this litigation because only

two of the plaintiffs were parties in the state court; thus, even

if jurisdiction were improper as to them, the case would con-

tinue on behalf of the remaining plaintiffs. See In re Justices of

the Supreme Court of Puerto Rico, 695 F.2d 17, 26 (ist Cir.

1982) .'°

'° Defendant Colegio claims that, if the 1986 Rule was the product of a

regulatory rather than an adjudicative process, then plaintiffs should have

amended their complaint to seek review of an administrative act and the dis-

trict court should have reviewed the rule under the substantial evidence test

that is used for agency decisionmaking. This argument is without merit. The

district court had no jurisdiction to conduct an administrative review of the

1986 Rule. It considered the Rule’s content as part of plaintiff's claim that the

Colegio mandatory membership system violates the First Amendment. The

question before the district court was not whether there was substantial

evidence to support the Rule, but whether the Rule modifies the compulsory

Colegio system specified by statute so that that system meets constitutional

requirements.

The Colegio also argues that the Supreme Court Justices should have been

brought in as parties if the validity of a “rule” were at stake. Although the

Justices originally were full defendants and remained as nominal parties with

respect to the stamp claims, we ordered dismissal of the claims against the

Justices in 1982 “insofar as they involve Puerto Rico’s system of compulsory

bar membership and compulsory payment of bar dues.” See In re Justices,

695 F.2d at 29-25, 27. At that time, the compulsory membership and dues

claims involved only the statutes creating and regulating the Colegio. The

Colegio is correct that the Justices are now appropriate parties in the dues

A-15

[2] As for defendants’ invocation of res judicata and col-

lateral estoppel as bars to this action, we note that the district

court first rejected these claims in 1982, and that that decision

was not challenged in the subsequent appeal to this court. See

Romany, 742 F.2d at 37 n.6. Nothing-that has occurred either

in the Puerto Rico Supreme Court or the district court since

that time convinces us that we should now open up that issue

for full review. Moreover, unlike jurisdiction, preclusion is a

matter subject to some flexibility in application. See Berrios

Rivers v. British Ropes, Ltd. , 575 F.2d 966, 970 (1st Cir. 1978)

(Puerto Rico courts have recognized that “in certain cases, the

policies of res judicata are not well served by literal applica-

tion of the procedural rules of the courts.”) Accordingly, with-

out further analysis, we choose to treat the district court’s 1982

ruling on preclusion as establishing the law of the case. See 18

C. Wright, A. Miller & E. Cooper, Federal Practice and Pro-

cedure § 4478, at 801 (1981) (if a “matter is omitted from one

appeal ... it may be held foreclosed on a later appeal to the

same court as a matter of law of the case’’)."!

claim because of their promulgation of the 1986 Rule. Id. at 23. We fail to

see, however, how this fact affects the validity of either the district court's

judgment or our own. The Colegio and Secretaries have defended the 1986

Rule on the merits, and the Colegio presumably has the ability to ensure that

the Rule is refined in the ways required by our opinions. If not, plaintiffs’

rights will be effectively protected by the district court’s injunction against

the Colegio and the Secretaries.

_'! As with the Rooker doctrine, res judicata and collateral estoppel would

not, in any event, apply to plaintiffs Romany, Souss and Oreste Ramos Diaz

because they were not parties on the merits in the Commonwealth litigation.

Although defendants attempt to characterize them as having withdrawn

from the Commonwealth case, and the Supreme Court in its 1986 ruling

refers to a motion on their behalf “to be relieved from further participation in

the case,” Schneider, Official Translation, slip op. at 5, we fail to see how

they were parties in the first place.

In addition, the rulemaking aspects of the Puerto Rico case, including the

Supreme Court's factfinding on the nature and extent of the Colegio’s “objec-

tionable” activities, do not implicate preclusion principles because they were

not “judicial proceedings” entitled to full faith and credit. See 28 U.S.C.

§ 1738.

Thus, the potential scope of preclusion in this case is quite narrow, and

even had defendants preserved and prevailed with this defense against plain-

A-16

[3] Appealability. Plaintiffs contend that both the Colegio

and the Secretaries filed untimely appeals from the wrong

judgments. Appeals must be filed “within 30 days of the judg-

ment or order appealed from,” Fed.R.App.P. 4(a)(1), and

courts of appeals have jurisdiction only over “[flinal

decisions,” 28 U.S.C. § 1291. Before addressing the merits of

plaintiffs’ argument, we review the procedural chronology.

The district court issued a full opinion on the merits on

March 3, 1988, but delayed entering final judgment until after

the defendants had an opportunity to modify the remedy to

bring it into compliance with the court’s guidelines. The de-

fendants made no changes, and the court issued an opinion on

May 27 entering judgment in accordance with the March 3

decision. That May 27 decision was formally entered on the

docket on either May 31 or June 1. On June 13, the Colegio

filed a motion requesting additional findings of fact, which

was denied by the district court on July 15. Both the Colegio

and Secretaries filed their appeals on August 10.

The Colegio appealed from the court’s March 3 order and

from the July 15 denial of its motion for additional findings of

fact. The Secretaries’ notice of appeal sought review of a June

17 judgment.

It is worth noting at the outset of our discussion that if form

alone were to govern, we would have to dismiss both appeals

of the merits. The Secretaries appealed from a nonexistent

judgment on June 17, while the Colegio appealed from a non-

final judgment — the one on March 3. It would disserve the

interests of justice, however, if we dismissed the appeals on

these grounds. Indeed, the Secretaries apparently made no

more than a clerical mistake in referring to a June 17 judg-

ment, which should not bar appellate review. See Foman v.

Davis, 371 U.S. 178, 181, 83 $.Ct. 227, 229, 9 L.Ed.2d 222

(1962). The Colegio, while committing more than clerical

error, undoubtedly appealed from the March 3 decision be-

tiffs Schneider and Ramos, our opinion would have differed only with

respect to their individual entitlements to damages.

A-17

cause it contained the district court’s full analysis. With regard

to both appellants, there is no doubt as to the nature of their

appeals, and avoiding decision on the merits would be con-

trary to the spirit of the Federal Rules of Civil Procedure. Jd.

As for timing, we accept the district court’s conclusion that

the Colegio’s motion for additional findings of fact was

timely,'? extending the time for filing an appeal of the court’s

judgment until 30 days following the court’s decision on that

motion. See Fed.R.App.P. 4(a)(4) (timely motion by any party

extends time for appeal). Both the Colegio and the Secretaries

met that extended deadline.

Ill. Discussion

We begin by stating that, in most significant respects, we

agree with the district court’s legal conclusions and its disposi-

tion of this case. We nevertheless write at some length so that

we may respond to arguments made by both plaintiffs and de-

fendants,'* and so that, in some instances, we may elaborate

on the district court’s discussion in ways that we hope will

prove helpful to defendants in administering a constitutional

procedure for protecting dissenters’ rights.

Our review of the Colegio system requires us to answer

three primary questions: what activities may be funded with

compulsory dues? does the 1986 Rule adequately protect the

right of dissenters not to contribute to other activities? and

'? Plaintiffs argue at length about whether the official entry of judgment

for the May 27 decision occurred on May 31 or June 1. Regardless of the cor-

rect date, we would not reject as untimely a1 appeal that is dependent on the

later date because of the legitimate confusion over which date the judgment

was entered.

'? Both plaintiffs and defendants filed appeals in this case. Defendants

claim that the district court erred in concluding that the 1986 Rule fails to

meet constitutional requirements. Plaintiffs claim that the court erred in

finding that they do not have standing to challenge the government's involve-

ment in collecting Colegio stamp fees, in awarding them only nominal

damages and in approving certain aspects of the 1986 Rule.

A-15

what steps must defendants take to fulfill their constitutional

obligations to dissenters?'* We address each of them in turn.

A. What activities may be funded with compulsory

dues?

The district court’s view that an integrated bar may use

compulsory dues only for activities directly related to the law-

yering profession and the operation of the judicial system ac-

cords with the Supreme Court's subsequent pronouncements

in Keller. See supra p. 624. To be sure, Puerto Rico's legisla-

ture and Supreme Court evidently envision purposes for the

Colegio extending far beyond a “professional advisor” role. See

Keller, 110 S.Ct. at 2235; Schneider, Official Translation, slip

op. at 13. But even if it persuasively could be argued that law-

yers in Puerto Rico play a distinctive role in creating a pluralis-

tic society, and that collective political action by lawyers is

therefore uniquely central to the mission of the Puerto Rico

bar, compulsory funding of non-legal ideological activities

would impose too great a burden on the First Amendment

rights of individual members to be constitutionally acceptable.

Lawyers who wish collectively to advocate certain politica!

views can band together in a voluntary association, without

coercing those with different views to join their ranks.

The Supreme Court cases upholding compelled membership

rest on an implicit assumption that “‘the cause which justified

bringing the group together,’” see Abood, 431 U.S. at 223, 97

S.Ct. at 1793 (quoting Machinists v. Street, 367 U.S. 740, 775,

81 S.Ct. 1784, 1805, 6 L.Ed.2d 114] (1961) (Douglas, J., con-

curring)), would be sufficiently narrow that dissenting em-

‘* Throughout the discussion section, our assumption is that defendant

would choose to modify the 1986 Rule so that it meets constitutional require

ments rather than to design a completely new procedure for protecting di

senters’ rights. Defendants are, of course, free to tackle such a project if »

clined. See Keller, 110 S.Ct. at 2237-38 (leaving open the possibility that pr

cedures different from those described in Hudson could satisfy an integra’

bar's obligation to dissenters)

A-19

ployees would be forced to associate against their will in only a

limited way. As the district court recognized, if objecting

members could be required to subsidize any activity that pro- —

moted the creation of a strongly pluralistic society, the limita-

tion on compulsory support carved out in Abood would be

meaningless.

[4] Thus, the district court correctly set the boundaries for

the Colegio’s use of compulsory dues. The court also described

various activities that fall within those boundaries, see supra

p. 626, and we endorse its list.'* The district court's discussion

of activities, however, dwelled primarily on bar programs that

we think fail at an extreme end of the spectrum, and for which

there would be little dispute that compulsory financing would

be appropriate. We therefore think it worth adding to its cata-

log both some general principles and some specific examples to

assist in categorizing activities as either appropriate or inap-

propriate for compulsory funding.

Before we begin that list, however, it is necessary to review

the United States Supreme Court’s rather sketchy references to

the propriety of using compulsory dues for “nongermane, non-

ideological expenditures,” Hudson, 475 U.S. at 304 n.13, 106

S.Ct. at 1074 n.13. These would include, for example, the

costs of members’ life insurance or purely social activities. In

Hudson, the most recent compulsory union dues case, the

Court specifically refrained from deciding whether “the cate-

gory of impermissible expenditures included all those that

were not germane to collective bargaining, even if they might

not be characterized as ‘political or ideological,’ id. at 299,

304 n.13, 106 S.Ct. at 1072, 1074 n.13.'*

'’ We note that most of the activities listed as non-objectionable by the

Puerto Rico Supreme Court, and restated in regulations issued by the Review

Board, see App. II at 331-334, are within the court's acceptable range. These

are described by the regulations as “[a|ctivities closest related to the practice

of law and the administration of justice.” Jd. at 331.

‘* A majority of the Court of Appeals in Hudson had addressed that issue,

and concluded that compulsory dues could not be used for such purposes.”

See 743 F.2d 1187, 1194 (7th Cir. 1984). The Supreme Court saw no need to

reach the question, however, because the plaintiffs’ challenge was to the

ee

A ne 20

In an earlier case, however, the Court had considered

whether expenditures for unicn social activities could be fi-

nanced with compulsory dues. See Ellis, 466 U.S. at 449-50,

456, 104 S.Ct. at 1893, 1896. After concluding that the Rail-

way Labor Act permitted the union to charge all employees

for such expenses, the Court only briefly addressed the First

Amendment question:

Petitioners do not explicitly contend that union social

activities implicate serious First Amendment interests.

We need not determine whether contributing money to

such affairs is an act triggering First Amendment protec-

tion. To the extent it is, the communicative content is not

inherent in the act, but stems from the union's involve-

ment in it. The objection is that these are union social

hours. Therefore, the fact that the employee is forced to

contribute does not increase the infringement of his First

Amendment rights already resulting from the compelled

contribution to the union. Petitioners may feel that their

money is not being well-spent, but that does not mean

they have a First Amendment complaint."

466 U.S. at 456, 104 S.Ct. at 1896 (emphasis in original).

Despite the Supreme Court’s reluctance in Hudson to cor.-

front the “constitutional nongermaneness question,” we think

the quoted discussion from Ellis provides the appropriate an-

alysis for resolving the issue. Moreover, not only is the First

Amendment not a factor, but “[t]he very nature of the free-

rider problem and the governmental interest in overcoming it

procedure used to protect dissenters’ rights and not to particular expen-

ditures. The Court felt that the procedural requirements would be the same

regardless of the outcome of the “constitutional nongermaneness question.”

475 U.S. at 304 n.13, 106 S.Ct. at 1074 n.13.

' Although the plaintiffs in Ellis also challenged mandatory funding of

the union's death benefits program, the Court fuund it unnecessary to reach

that issue because the union was no longer the exclusive bargaining agent for

the plaintiffs and so they no longer were involved in the death benefits

system

A-21

require that the union have a certain flexibility in its use of

compelled funds.” Ellis, 466 U.S. at 456, 104 S.Ct. at 1896.

We therefore conclude, as did the district court, that activities

incidental to the operation of an association — such as social

events and the provision of insurance to members — may be fi-

nanced with mandatory fees.

[5] 1. Political activities, including lobbying, may be

funded from compulsory dues so long as the target issues are

narrowly limited to regulating the legal profession or improv-

ing the quality of legal service available to the residents of

Puerto Rico. See Keller, 110 S.Ct. at 2236-37. Thus, for exam-

ple, the Colegio could lobby in favor of budget appropriations

for new judicial positions or increased salaries for government

attorneys, or against statutory limitations on attorney adver-

tising or requirements for the certification of legal specialists.

Cf. Gibson v. The Florida Bar, 798 F.2d 1564, 1569 & n.4

(ilth Cir. 1986).

It would not be permissible, however, to use mandatory

dues for such lobbying if the Colegio’s position rested upon

partisan political views rather than on lawyerly concerns. For

example, while it would be appropriate for the Colegio gen-

erally to lobby regarding attorney advertising, it may not use

mandatory dues to advocate restrictions only on advertising

for legal services in aid of (or opposed to) family planning

agencies or abortion clinics. It likewise would be impermissi-

ble for the Colegio to use mandatory dues to lobby on any issue

pertaining to the political status of Puerto Rico, even if

arguably related to the legal prefession or the quality of !egal

services.

[6] 2. Among the activities that could not proper!y be

funded with mandatory dues would be lobbying on controver-

sial bills to change the law in ways not directly linked to the

legal profession or the judicial system. For example, the bar

could not use dissenting members’ funds to promote a system of

pro-life amendment to the Commonwealth constitution or gen-

erate support for a death penalty. See Keller, 110 S.Ct. at 2237.

A-22

We see no problem, however, in the Colegio’s participation

in efforts to amend technical, non-ideological aspects of sub-

stantive law. For example, the Wisconsin state bar’s 1975 leg-

islative program included advocacy on two bills that would

appear to have engendered no controversy: one making it clear

that land contracts enjoy the same exemption from the Wis-

consin Consumer Act as do first lien mortgages, and the other

simplifying condominium transactions by abolishing a re-

quirement that floor plans be recorded. See T. Schneyer, “The

Incoherence of the Unified Bar Concept: Generalizing from

the Wisconsin Case,” 1983 Am.B.Found.Res.J. 1, 31 (1983)

(hereinafter “Unified Bar Concept”). Another example falling

into this category would be a bill to allow notaries to use either

a stamp or a seal on documents. All of these measures appear

politically noncontroversial and designed merely to “‘im-

provie] the quality of the legal service available to the people

of the [Commonwealth],’” Keller, 110 S.Ct. at 2236 (quoting

Lathrop, 367 U.S. at 843, 81 S.Ct. at 1838).

[7] 3. Among the Colegio’s activities that clearly fall out-

side the narrow categories for which financial support may be

compelled are the following Colegio-sponsored committees:

the Committee for the Study of the Constitutional Develop-

ment of Puerto Rico from 1977 to 1984, which, among other

business, has published a report on the “Procedural Require-

ments for Decolonization of the United Nations organization”'’;

'* The Puerto Rico Supreme Court described the work of this committee as

follows:

The Committee for the Study of the Constitutional Development is

constituted by attorneys from all political stands. Among the studies it

has conducted, the most important are: police corruption as a threat to

the democratic system, the electorate’s direct means of intervention in

the political process. And the third one is the result of a series of reports

on the Puerto Rican status issue. One of the reports, which was unani-

mously approved by the members of the Committee, recommends

some minimum requirements that should be guaranteed under any

status alternative. Based on these reports, the President of the Bar

Association has appeared before the United Nations to present the

recommendations of the Committee.

Schneider, Official Translation, slip op. at 36 (citations omitted)

A-23

the Electoral Process Committee, which was created “to en-

hance the level of political debate in our country, to enforce

compliance with the laws governing the voting process and to

frame a code of ethics to regulate public debate among pollit-

ical candidates”; the Special Committee on Nuclear Arma-

ment and the Nuclear Arms Ban Treaty in Latin America, and

the Committee for the Study of the Proposed Territorial

Demarcation of the San Juan and Rio Piedras Delegations. See

Schneider, Official Translation, slip op. at 48-49; 53; 54.

[8] 4. In many instances, it is likely that activities that

may be subsidized with mandatory dues will be combined

with those that may not. Consider, for example, a hypothet-

ical annual meeting where business matters of direct concern

to the regulation of the legal profession will be discussed, but

where the chaplain opens with a long prayer for the health of

Fidel Castro, and the featured speaker is a prominent Sanda-

nista. Even if the business meeting takes two hours, and the

prayer and speech together take only 35 minutes, we think it

likely that the atmosphere would have become so partisan that

the proportionate cost of the whole meeting should be de-

ducted from a dissenter’s dues. In other words, where the per-

missible and impermissible are intertwined beyond separa-

tion, the objector should be entitled to a full rebate for the cost

of the function.

[9] The district court made a similar observation with re-

spect to the Bar’s publications, holding that “[e]ach publica-

tion stands or falls ... as an indivisible entity, depending on

its editorial policy.” 682 F.Supp. at 686. If a magazine is de-

voted to educational articles about the legal profession or the

quality of the legal services available in the Commonwealth, it

may be funded by compulsory dues. A magazine that pub-

lishes markedly political and ideological material may not rely

on that source of funding (unless, perhaps, the magazine pub-

lishes a broad spectrum of counterbalancing views).

This list, obviously, is not intended to be exhaustive, but it

hopefully will provide some context within which to evaluate

other activities.

A-24

B. Does the 1986 rule adequately protect the right of

dissenters NOT to contribute to other activities?

It is not disputed that the Colegio regularly has engaged in

activities that may not be funded with compulsory dues. As-

suming that it continues to do so in the future, it must ensure

that dissenters’ dues are used only for activities germane to the

bar’s core functions or for other pursuits incidental to the

operation of a bar association. The district court concluded

that the procedures specified in the 1986 Rule are inadequate

to accomplish that task. We agree.

Before turning to the specific procedural deficiencies of the

Rule, however, we note our previous observation that there is

an argument to be made that “the Colegio’s penchant for ide-

ological contention is so pervasive and unremitting ... that

Puerto Rico cannot constitutionally force dissenters to join,”

Romany, 742 F.2d at 40-41. Although the present record

leaves that argument unresolved, we are not yet prepared to

hold that a rebate and escrow system to protect dissenters is

necessarily unworkable. The district court believed that such a

system could work and it is clear that the Colegio does engage

in some activities that serve the core purposes of a bar associa-

tion identified by the Supreme Court in Keller. Thus, while

leaving open the possibility that no such system would suffice,

our comments on the Rule are based on the assumption that it

could be modified to meet constitutional requirements. But see

L. Tribe, American Constitutional Law § 12-4 at 805 n.5 (2d

ed. 1988) (in the case of unions, it may be preferable to require

ideological activities unrelated to collective bargaining to be

financed from voluntary contributions) .'”

{10} Our view of the Rule’s procedural problems coincides

with that of the district court, and we therefore shall not re-

visit at length matters that that court already has covered well.

© We also leave open, as did the Supreme Court in Keller, see 110 S.Ct. at

2238, the alternate possibility that the Colegio should be enjoined perma-

nently from using its name to advance political or ideological causes beyond

those for which mandatory financing is permissible.

—

A-25

See Schneider, 682 F.Supp. at 687-89. We emphasize,

however, the Rule’s two biggest procedural shortcomings: the

failure to justify and support adequately an escrow percentage

limited to 15% and the need for objections to specific activities

as a prerequisite for refunds.

With respect to the escrow percentage, neither the Rule nor

the record as a whole offers support for the 15% figure or, in-

deed, for any specific allocation of the amount of resources

devoted to activities either entitled or not entitied to manda-

tory financing. Fifteen percent would seem, on its face, to be a

small proportion. It is the Colegio’s obligation at the outset of

a dues year to categorize its activities so that an escrow amount

can be based on actual anticipated expenditures for non-core

activities. Although “absolute precision” in predicting plans

and expenses is not required, see Hudson, 475 U.S. at 307

n.18, 106 S.Ct. at 1076 n.18, it is insufficient to classify activ-

ities only after a member specifically objects to financing them

with mandatory dues. This would place too great a burden on

members to monitor Colegio activities. See Abood, 431 U.S. at

241, 97 S.Ct. at 1802.

[11] In addition, we reject the Colegio’s challenge to the

district court’s imposition of a “buffer” allocation in the es-

crow amount, see 682 F.Supp. at 688-89. Because “absolute

precision” in predicting the upcoming year’s plans is unlikely,

such a cushion will serve to avoid, or minimize, any First

Amendment infringement resulting from a higher-than-bud-

geted expense for non-core ideological activities. Although the

Colegio’s right to use its funds freely will be compromised if

the cushion turns out to be unnecessary, we think it appropri-

ate to err on the side of protecting the First Amendment rights

of the Colegio’s compelled members. If, over time, it turns out

that the Colegio accurately predicts the nature of its annual

expenditures, it will be free to seek relief from the buffer re-

quirement. At this time, however, we see no basis on which to

second-guess the judgment that such a cushion is appropriate.

The fact that the Supreme Court has not explicitly required

such an amount in the past does not render it invalid.”

{12} The district court also ably outlined the measures

necessary to bring the Colegio into conformance with Supreme

Court requirements concerning the method for objecting tq

expenditures. 682 F.Supp. at 689. As the district court recog-

nized, a primary feature of a constitutional system is that dis-

senters be able to trigger refunds by means of general objec-

tions so that they need not make public their views on specific

issues. See id. (quoting Abood, 431 U.S. at 241, 97 S.Ct. at

1802).7! Dissenters also may not be required to explain the

basis for particular objections beyond detailing why they view

a disputed activity to be outside the Colegio’s core functions.

See Regulations § 12.1, App. II at 338 (“The objection shall be

raised in a brief document briefly listing the reasons on which

the objection is based.”’)”?

[13] We, like the district court, decline to invalidate the

use of former Justices of the Puerto Rico Supreme Court as

members of the three-member Review Board that will deter-

*® Moreover, such a cushion is not unprecedented. The Chicago Teachers

Union rounded up its estimate for expenditures unrelated to collective bar-

gaining and contract administration in establishing a dissenters’ rebate to

provide a cushion to cover inadvertent errors. See Hudson, 475 U.S. at 295,

106 S.Ct. at 1070

*! As noted above, it may be that defendants intend that the procedure

operate in this fashion, in other words, that a general objection lodged at the

beginning of the dues year automatically will entitle that dissenter to a full

rebate for the amount spent on all activities unconnected with the Colegio’s

core purposes. See supra n.7

* Thus, one way for an objection procedure to work would be for the

Colegio to provide members at the beginning of the dues year with a pro-

posed budget that classifies activities as appropriate or inappropriate for

mandatory financing. Based on that classification, the budget would include

an escrow percentage for dissenters’ dues. Members who filed a general ob-

jection at the beginning of the year would trigger an escrow contribution on

their behalf and ultimately would be entitled to a rebate for all activities

listed as inappropriate for mandatory financing. In addition, members must

be able to challenge the placement of particular activities within the “non-

objectionable” category. Moreover, the Colegio has the obligation to adjust

the refund amount during the year based on actual expenditures

A-27

mine which activities may be funded with compulsory dues.

Plaintiffs challenge the impartiality of the Justices because of

their participation in the Supreme Court's decision upholding

the integrated bar and setting a wide scope for the bar’s core

functions. We agree fully with the district court’s judgment

that a panel whose members include former Supreme Court

Justices “meets the requirements of an ‘impartial decision-

maker,’ at least facially until appropriate evidence is presented

to the contrary.” 682 F.Supp. at 689.

C. What steps must defendants take to fulfill their con-

stitutional obligations to dissenters?

[14] As a result of the deficiencies it found with the

Colegio’s present method of operation, the district court en-

joined the Puerto Rico bar association from compelling mem-

bership until it either ceased all ideological activities not ger-

mane to its core purposes or devised an adequate system to

protect dissenters’ rights. We find no abuse of discretion in the

court’s decision to impose this injunction, but for various rea-

sons believe that its implementation should be delayed for six

months while defendants work to modify their Rule. If, at the

end of six months, defendants have failed to submit to the dis-

trict court a rule that resolves the constitutional problems

identified in its opinion and our own, and if no extension of

time has been granted for cause by the district court, the in-

junction will take effect. During this interim period, 100% of

dissenters’ dues should be held in escrow, to be refunded in full

if no adequate procedure is developed to protect their rights.

We have the power, under our supervisory authority, to

defer effectuation of the district court’s judgment. See 28

U.S.C. § 2106; City of Newport v. Fact Concerts, Inc., 453

U.S. 247, 257 and nn. 15, 16, 101 S.Ct. 2748, 2754 and nn. 15,

16, 69 L.Ed.2d 616 (1981). See also Monmouth County Cor-

rectional Inst. Inmates v. Lanzaro, 834 F.2d 326, 333 n.10 (3d

Cir. 1987) (revising district court order granting preliminary

A-28

injunctive relief). Our reasons for doing so in this case are

these:

First, as noted above, we think there remains a good possi-

bility that the Colegio can operate constitutionally. The

Supreme Court of Puerto Rico has listed a number of useful

and important functions performed by the Colegio that are

directly linked to the regulation of the legal profession and im-

proving legal services, and it appears that an accounting sys-

tem now exists for determining the direct and indirect cost of

any Colegio activity, see 682 F.Supp. at 688 n.14. Thus, we

think it appropriate to act on the assumption, shared by the

district court, that the Colegio will be able to modify its rule to

comply with Hudson

Second, the defendant® interest in maintaining an inte-

grated bar is sufficiently }weighty that we should hesitate

before halting the system completely. It seems more appro-

priate to allow the Colegio to continue functioning, at least

temporarily, with the compelled dues of members who do not

object to its activities.

Third, we think that the United States Supreme Court’s re-

cent decision on the integrated bar is likely to spur action that

defendants previously may have resisted while pursuing their

appeals. Before Keller, it had been nearly three decades since

the Court addressed the integrated bar, in Lathrop, and the

commentary since that time has questioned the nature and

continuing validity of a mandatory bar. See, e.g., “Unified

Bar Concept,” 1983 Am.B.Found.J., at 67; C. Sorenson, Jr.,

“The Integrated Bar and the Freedom of Nonassociation —

Continuing Siege,” 63 Neb.L.Rev. 30, 31 (1983). Now that

Keller has come down, defendants have an unequivocal need

to change their system to ensure its continued operation.

Fourth, we recognize that changes in the Colegio system are

not easily made because of the various entities involved in

decision-making. The Rule was a creature of the Supreme

Court, but it rests upon a foundation of information that is the

Colegio’s responsibility to maintain. We therefore think it

A-29

appropriate to give defendants a substantial period of time to

work out a constitutional approach to mandatory Colegio

membership.

Finally, a federal court should endeavor to facilitate a

proper objective of state and commonwealth government by

constitutional means; it should, if possible, avoid frustration

caused by the perhaps ill-advised strategies of counsel. Thus,

while we understand the district court’s inclination at this

stage of the proceedings against further indulging the defen-

dants and their lawyers, we think it is worth giving them the

benefits of any doubts one more time.

Accordingly, we envision the following course of events:

[15] — The first task is for the Colegio, or an independent

agent, to perform the verified accounting required by Hudson.

The resulting report should categorize activities as suitable or

unsuitable for mandatory funding, consistent with the criteria

described in Section A above, and the report should list the

cost for each activity. This accounting should enable the Col-

egio to set an amount for the reduction of dues of dissenting

members. This accounting should strive as much as possible to

reflect reality, perhaps relying on the Colegio’s actual expendi-

tures during the last several years as the basis for the projected

allocation. See Hudson, 475 U.S. at 307 n.18, 106 S.Ct. at

1076 n.18. And in close situations, the accounting should favor

the dissenter’s right not to fund programs they find offensive.

— An independent panel (perhaps the Supreme Court or

the Review Board) should review the categories of activities to

determine whether all items to be funded with mandatory

dues are “necessarily or reasonably incurred for the purpose of

regulating the legal profession or ‘improving the quality of the

legal service available to the people of the [Commonwealth].’”

Keller, 110 S.Ct. at 2236. The panel may wish to solicit cri-

tiques and proposals from interested parties, such as plaintiffs,

to ensure that the final remedy is as fully developed as possible.

— The objection procedure must be clarified or modified

consistent with the district court’s discussion. See supra pp.

626-27, 613.

ls

A-30

— The new rule with reievant supporting materials, or

some alternative, should be submitted to the district court for

review within six months or, if a limited extension is granted,

within such later period. The court must be given sufficient

data to enable it to evaluate the categorization of expenses and

any proposed rebate/escrow percentage. This would include,

for example, copies of past Colegio budgets.

— If defendants do not modify the Colegio system within

the required time, the district court’s injunction will go into

effect and the Colegio will be required to operate solely as a

voluntary association until it stops all ideological activities out-

side its core purposes relating to the legal profession.

IV. Stamps

Under Puerto Rico law, lawyers must attach notarial and

forensic stamps issued by the Colegio to many official docu-

ments as a means of authenticating them and as a prerequisite

to filing them in court. See P.R.Laws Ann. tit. 4, §§ 783, 785,

1006, 1038. The stamps are sold at the Commonwealth’s inter-

nal revenue offices by government employees, but all proceeds

are turned over to the Colegio. The Colegio is not charged for

any administrative or processing costs.

The 1986 Rule stated that stamp proceeds could be used to

pay for only the following items: bar members’ life insurance,

legal aid to indigents, legal advice to the community, process-

ing of complaints regarding the conduct of bar members in the

practice of the profession, publication of judicial opinions

“and for any other purpose comprised within the duties and

purposes of the Bar Association.” Schneider, Official Transla-

tion, slip op. at 23. The Rule specified that the funds shall not

be used for “objectionable activities.”

Plaintiffs complain both about the use of their tax monies to

support the Colegio, through the government's involvement in

selling the stamps, and the use of the stamp fees to fund Cole-

gio activities with which they disagree. We depart in only one

A-31

respect from the district court’s resolution of the stamps

problem.

[16] As that court observed, if an adequate mechanism for

protecting dissenters’ rights is implemented, and no revenues

from the sale of stamps are used to fund activities outside the

Colegio’s proper core functions, no constitutional problem will

remain.” Although there still would be disparity among law-

yers in the amounts paid to the Colegio, based on their need

for Colegio stamps, we see no basis for chal/enging the Com-

monwealth’s arguably rational judgment to impose a larger

share of the burden of funding core activities on those lawyers

who use the judicial system more frequently.*

The district court believed, however, that if no adequate

method is devised to protect dissenters’ rights with respect to

* It seems that a proper approach to the budgeting process would be to

deduct, at the outset, the amount of the stamp revenues from the total esti-

mated funds needed by the Colegio for core activities. It would then be pos-

sible to calculate the additional amount needed from dues to fund the re-

mainder of the bar’s budget, broken down into the amount needed to fund

core activities and the amount needed to fund all other activities. Dissenters

would be entitled to a rebate or dues reduction for the portion of dues

assessed for all non-core activities.

** It is not the case, as plaintiffs argue, that dissenting attorneys who pur-

chase a large number of stamps will be improperly subsidizing the Colegio’s

non-core activities through their stamp fees. Assuming a constitutional dues

procedure is implemented, the Colegio will be required to specify the cost of

its non-core activities, and those items will be funded only by means of the

portion of mandatory dues that dissenters will not be charged.

Although it is true that any amount raised through stamps will not need to

be raised through dues, this is not the sort of bookkeeping deception rejected

by the Supreme Court in Abood, 431 U.S. at 237 n.35, 97 S.Ct. at 1800 n.35.

The court there was referring to a system in which all members are charged

the same fee but dissenting members’ payments are allocated only to core

purposes while other members’ payments could be used for any purpose. In

those circumstances, where there is no discount for dissenters, dissenters

would pay more than their pro rata share of core expenses. That sort of

disparity differs from the disparity in attorney purchases of Colegio stamps

because the stamp fees paid by all lawyers, dissenting or not, receive iden-

tical treatment. Unless it were shown that, as a rule, dissenting attorneys

used substantially more stamps than non-dissenting ones, there is no dispro-

portionate burden placed on dissenting attorneys for the funding of Colegio

core activities. There is therefore no First Amendment violation.

A-32

mandatory dues, the stamp requirements; like membership in

the Colegio, must be made voluntary. The court held that re-

stricting the use of stamp revenues to non-objectionable activ-

ities is insufficient as a solution because dissenters through

their stamp purchases would then, in effect, be subsidizing

ideological activities by allowing a larger portion of the volun-

tary dues to be used for them. We disagree. We see no differ-

ence with respect to the stamp proceeds, whether or not the

Colegio can compel membership and dues, provided the

starnp fees are used solely for proper core activities. In both

circumstances, the Colegio has the same funds available for

objectionable activities — only some portion of the dues of

consenting members. Even if the Colegio chose to use all of the

voluntary dues for objectionable activities, and funded its core

activities solely with stamp revenues, we see no constitutional

problem. The Commonwealth’s decision to fund core bar asso-

ciation activities in that manner would put the core funding

burden not on dissenters but on stamp purchasers. This alloca-

tion of burden does not implicate the First Amendment, and

the Colegio therefore may collect and use the stamp fees for

core activities whether or not it may compel membership.

[17] Ifthe Colegio should be unable to devise a satisfactory

method to protect dissenters’ rights, and thus be required to

change to a voluntary bar, this would affect the stamp issue in

one respect. If Colegio membership is voluntary and associa-

tion benefits therefore do not inure to all lawyers, it would

plainly be inappropriate to use stamp revenues for any activ-

ities that, while not ideological, do not directly serve the core

purposes of regulating the legal profession or improving the

quality of legal services. To charge nonmembers fees to help

pay for members’ life insurance, for example, strikes us — as it

did the district court — as improper. See 682 F.Supp. at 690.

In that event, the Commonwealth would be compelling cer-

tain individuals to help pay for a private benefit system for

other individuals, an arrangement that triggers due process

concerns if not First Amendment ones. We therefore hold that,

A-33

if the Colegio becomes a voluntary association, stamp revenues

may be used to finance only core activities not including “non-

germane, nonideological” ones. Hudson, 475 U.S. at 304,

n.13, 106 S.Ct. at 1074, n.13.

As a final note, if the Colegio is unable to show that stamp

proceeds are, in fact, isolated from its other revenues and allo-

cated only to appropriate activities, it would of course be

barred from requiring stamp fees.*°

With respect to the government's involvement in the sale of

the stamps, we subscribe to the district court’s view that no

remedy is warranted. If stamp revenvies are segregated appro-

priately, the government's assistance in selling the stamps will

not support a First Amendment claim. The government sim-

ply would be involved in collecting funds that are used to pro-

mote the substantial government interests of regulating the

legal profession and improving the quality of legal services

available in the Commonwealth. If the Colegio cannot dem-

onstrate that the use of stamp fees is properly limited, how-

ever, the sale of stamps would be allowed to continue only on a

voluntary basis, and plaintiffs then would lack standing to

challenge the government’s role in the stamp program. As the

district court observed, plaintiffs presumably would choose

not to purchase the stamps, and their complaint therefore

would depend on their status as taxpayers and the use of some

portion of their tax dollar to help the Colegio finance its ide-

ological activities.

In order to establish state taxpayer standing, plaintiffs must

show that the challenged activity involves “a measurable

appropriation” or loss of revenue, and “a direct dollars-and-

cents injury” to themselves, Doremus v. Board of Education,

342 U.S. 429, 434, 72 S.Ct. 394, 397, 96 L.Ed. 475 (1952). See

also, e.g., District of Columbia Common Cause v. District of

Columbia, 858- F.2d 1, 4-5 (D.C. Cir. 1988); Donnelly v.

** For the six-month interim period, all stamp revenues, like dissenters’

dues, should be placed in escrow. Defendants may, however, ask the district

court to lift this requirement before the dissenters’ remedy is modified upon a

showing that stamp fees are fully segregated and used only for core activities

A-34

Lynch, 691 F.2d 1029, 1030-32 (Ist Cir. 1982), rev'd on other

grounds, 465 U.S. 668, 104 S.Ct. 1355, 79 L.Ed.2d 604

(1984). Plaintiffs have failed to make such a showing. The

stamps are sold at government offices that exist for another

purpose, and plaintiffs do not allege that additional employees

are hired to handle the stamp business. At best, it might be

argued that there are some incidental expenses incurred by the

government, but this does not constitute the “direct and par-

ticular financial interest’ necessary to establish standing.

Doremus, 342 U.S. at 435, 72 S.Ct. at 398.

V. Damages

[18] Plaintiffs contend that the district court erred in

awarding each of them only $1 in nominal damages for the

deprivation of their First Amendment rights. The court de-

clined to make a higher award because “‘[t ]he evidence is too

vague for the Court to establish through anything other than

speculation, the amount of damages suffered by these Plain-

tiffs.’ Schneider, 682 F.Supp. at 691 (quoting Schneider, 565

F.Supp. at 979). Plaintiffs acknowledge that there was no

direct proof of damages, but make an emotional appeal for

financial relief in an amount reflecting the seriousness of the

defendants’ First Amendment violation.

We have sympathy for plaintiffs’ position, and recognize the

risk that nominal damages will tend to minimize the serious-

ness of defendants’ violation and plaintiffs’ injury. Neverthe-

less, we are unable to say the district court abused its discre-

tion in making the $1 awards. From all that appears in the

record, plaintiffs have submitted no evidence of the nature

and extent of the harm they have suffered, and they have cited

no precedent imposing on the court the obligation to speculate

on the extent of their injury. In the absence of any proof of

damages, we think the district court acted within its discretion

in declining to award more than a nominal sum. See Memphis

Community School Dist. v. Stachura, 477 U.S. 299, 308 n.11,

A-35

106 S.Ct. 2537, 2543 n.11, 91 L.Ed.2d 249 (1986) (“[N]ominal

damages, and not damages based on some undefinable ‘value’

of infringed rights, are the appropriate means of ‘vindicating’

rights whose deprivation has not caused actual, provable in-

jury.”’) (citing Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042,

55 L.Ed.2d 252 (1978)). See also id. 477 U.S. at 315-316, 106

S.Ct. at 2547 (Marshall, J., concurring) (quoting Hobson v.

Wilson, 737 F.2d 1, 62 (D.C. Cir. 1984)) (injury to a First

Amendment-protected interest may be compensated with sub-

stantial damages, but “only to the extent that it was ‘reason-

ably quantifiable’”).

V. Conclusion

We summarize our primary holdings:

1. The 1986 Rule was the product not of judicial decision-

making but of Puerto Rico Supreme Court rulemaking, and

the district court therefore had jurisdiction to review its

merits. In addition, our review is barred neither by preclusion

principles nor procedural defaults.

2. The Colegio may use mandatory dues and fees only for

those expenditures that are “necessarily or reasonably incurred

for the purpose of regulating the legal profession or ‘improving

the quality of the legal service aVailable to the people of the

[(Commonwealth].’” Keller, 110 S.Ct. at 2236. It may, in

addition, use such funds to finance activities incidental to the

operation of a bar association, such as social activities and

insurance programs.

3. Activities that may be funded with compulsory dues,

therefore, generally must “revolve around the role of the

lawyer as lawyer, rather than relying on the lawyer’s more

generic role as an informed and perhaps influential member of

a complex society,” see supra p. 626. When ideological activ-

ities outside the bar’s core purposes are intertwined beyond

separation with activities within them, dissenters may not be

charged for any portion of the challenged program.

A-36

4. The Colegio system of mandatory membership, as defined

by statute and the 1986 Rule, does not presently meet constitu-

tional standards. It defines too broadly the range of activities

that may be funded with compulsory dues. Its two primary

procedural defects are the failure to support the 15% escrow

amount and the provision, at least on the Rule’s face, that re-

funds are triggered only by objections to specific activities.

5. Defendants shall have six months from the date this judg-

ment becomes final to submit a modified version of its rule, or

an alternative, to the district court, during which time 100%

of dissenters’ dues must be held in escrow. If, at the end of that

six-month period, defendants have failed to submit to the dis-

trict court a procedure for resolving the constitutional prob-

lems identified in its opinion and uur own, and if no extension

has been granted for cause, the injunction imposed by the

district court regarding compulsory dues will take effect.”

That injunction bars the Colegio from compelling membership

until it either ceases al! ideological activities not germane to its

core purposes or devises an adequate system to protect dis-

senters’ rights.

6. The Colegio may collect stamp fees so long as the funds are

segregated from other revenues and used only for core pur-

poses. Plaintiffs may not challenge the use of government

facilities to sell the Colegio stamps.

7. The district court award of $1 in nominal damages to each

plaintiff is affirmed.

Affirmed in part. reversed in part, modified and remanded for

further proceedings consistent with this opinion. Costs to

plaintiffs.

*” We expect that defendants immediately will begin a good-faith effort to

revise the Colegio’s compulsory membership system, and will submit their

proposal to the district court as soon as possible. We further expect that the

district court will need a period of time to review that proposal. We do not

intend that the injunction take effect during the review so long as it appears

that defendants have made a good-faith effort to fulfill their constitutional

obligations to plaintiffs. We leave it to the district court to determine when,

if at all, the injunction should take effect after the six-month delay.

A-37

APPENDIX B

United States Court of Appeals

For the First Circuit

No. 88-1937

ROBERT E. SCHNEIDER, JR., ET AL.,

PLAINTIFFS, APPELLEES,

v.

COLEGIO DE ABOGADOS DE PUERTO RICO,

DEFENDANT, APPELLANT.

No. 88-1938

ROBERT E. SCHNEIDER, JR., ET AL.,

PLAINTIFFS, APPELLEES,

v.

COLEGIO DE ABOGADOS DE PUERTO RICO, ET AL...

DEFENDANTS, APPELLEES.

CARMEN ANA CULPEPER, ETC., ET AL.,

DEFENDANTS, APPELLANTS.

No. 88-1939

ROBERT E. SCHNEIDER, JR., ET AL.,

PLAINTIFFS, APPELLANTS,

v.

COLEGIO DE ABOGADOS DE PUERTO RICO, ET AL.,

DEFENDANTS, APPELLEES.

A-38

BEFORE

Breyer, Chief Judge,

Corrin, Senior Circuit Judge,

CAMPBELL, TORRUELLA*, Se_ya and Cyr, Circuit Judges,

Preras**, District Judge

ORDER OF COURT

Entered December 20, 1990

The panel of judges that rendered the decision in these cases

having voted to deny the petition for rehearing and the sugges-

tion for the holding of a rehearing en banc having been care-

fully considered by the judges of the Court in regular active

service and a majority of said judges not having voted 46 order

that the appeal be heard or reheard by the Court en banc,

It is ordered that the petition for rehearing and the sugges-

tion for rehearing en banc be denied.

By the Court:

S FRANCIS P. ScicLiano. Clerk

*Circuit Judge Juan R. Torruella is recused.

**Of the District of Puerto Rico, sitting by designation

(cc: Messrs. Schneider, Jr., Anduze Montano, Ms. Rodriguez Rodriguez)

“ili iia

A-39

APPENDIX C

United States District Court

District of Puerto Rico

Civ. Nos. 82-1459 (TR), 82-1513, 82-1514 and 82-1532.

ROBERT E. SCHNEIDER, Jr. ef Ac.,

PLAINTIFFS,

v.

COLEGIO pr ABOGADOS pe PUERTO RICO, er ar

DEFENDANTS.

OPINION AND ORDER

Dorrvuetta, Circuit Judge

1. History of thr

Plaintiffs in thisgease have presented the court with a

challenge, under 42 U.S.C. § 1983, to the requirement that

they belong to the integrated bar association, the Colegio de

Abogados de Puerto Rico (“Colegio” or the “Bar’), as a

condition to the practice of law in Puerto Rico. The

Association is funded through compulsory annual dues and the

proceeds from stamps that must be purchased and affixed by

lawyers and notaries to papers filed with the courts and to

notarized documents. The court must therefore evaluate that

integrated bar scheme, including the escrow/rebate procedure

built into it. It must decide whether compulsory membership

in the Colegio violates dissenting members’ non-associationa!

rights under the First Amendment, in light of the importance

A-40

traditionally assigned to those rights, and in view of the

governmental interests that prompt the regulation of attorneys

and the practice of law.

In order to simplify the reader's task, the history of this

hoary case will again be set forth. The Colegio instituted

disbarment proceedings in 1977 against ninety-nine attorneys

for failure to pay their annual dues. All but two—Robert E.

Schneider and Hector R. Ramos Diaz—paid the dues. These

two argued that Law Number 43, 4 L.P.R.A. § 771, et seq.

(establishing the Colegio de Abogados) violates the Constitu-

tion of the Commonwealth of Puerto Rico. The Supreme

Court of the Commonwealth received the report of a Special!

Master in September of 1980, entertained proofs and stipula-

tions by the parties until March of 1981, and issued its opinion

Colegio de Abogados v. Schneider, 112 D.P.R. 540 (1982)

(hereinafter the “1982 Opinion”). That court ordered.

Schneider and Ramos to pay all dues owing the Colegio, and

upheld the constitutionality of the integrated bar under the

Constitution of Puerto Rico. It also announced that a pro-

cedure would be established, in cooperation with the Colegio,

to ensure that dissenting members of the Bar would not be

compelled to finance “ideological” activities through their bar

dues.

In spite of the promised procedure, Schneider and Ramos

refused to pay, and were consequently disbarred. They and

three other plaintiffs (who had been paying dues and were not

disbarred or subject to the 1982 Opinion) brought suit in

federal court under 42 U.S.C. § 1983. That suit was limited to

a claim for declaratory and injunctive relief from their pro-

spective obligation to pay dues and belong to the Colegio.

Schneider v. Colegio de Abogados, 546 F. Supp. 1251 (D.P.R.

aff'd in part, rev'd in part sub nom., In re Justices of the

Supreme Court of Puerto Rico, 695 F.2d 17 (Ist Cir. 1982).'

' In that decision the Court of Appeals dismissed plaintiffs’ action against

the Justices, except as nominal parties. But cf. Forrester v. White, 56

U.S.L.W., 4067, 4069-70 (U.S. Jan. 12, 1988), (no immunity from suit for

damages by judges for administrative or rulemaking actions).

A-4]

This court thus expressly dismissed “[{a]ll allegations or claims

seeking in any way to modify, alter, challenge, or otherwise

affect the outcome of the suspension for non-payment of past

dues of plaintiffs Schneider and Ramos in [the 1982

Opinion],...for lack of jurisdiction.” Jd. at 1276 (emphasis

supplied).

Next this court addressed itself to the substantive issues

presented by this case. Schneider v. Colegio de Abogados, 565

7 F. Supp. 963 (D.P.R. 1983), vacated sub nom., Romany v.

Colegio de Abogados, 742 F.2d 32 (ist Cir. 1984). On the

record before it, the court found that “the Colegio engages in

ideological and/or political activity of a pervasive and con-

tinuous nature....” Id. at 965. It also noted that “there is no

way of determining, from an accounting standpoint, the

dollar amount of [support for ideological activities] except to

conclude that from the pervasiveness, scope and breadth of

this type of activity, it is obvious that the backing has been and

is considerable.” Jd. at 971 (citing the testimony of Juan

Espiet, the Colegio’s auditor). In other words, the Colegio’s

expenditures in support of ideological activities were inex-

tricably intermingled with its other, non-controversial expen-

ditures.

On the basis of these and other findings, this court held that,

as applied, Law No. 43 establishing a., integrated bar violated

dissenting attorneys’ rights under the First Amendment. It

ordered, in consequence, that the defendants (except for the

Justices of the Supreme Court) be enjoined from taking any ac-

tion based on plaintiffs’ refusal to pay either the compulsory

bar fees or the legal and notarial stamps. Jd. at 979.

When called upon to review this opinion, however, the First

Circuit declined to comment on the merits of the adjudication

Romany v. Colegio de Abogados de Puerto Rico, 742 F.2d 32

(Ist Cir. 1984). Instead, it found that this court should have

abstained from deciding the issue until the Puerto Rico

Supreme Court should issue the remedy it promised in its 1952

alae

A-42

Opinion. Id. at 40. The First Circuit grounded its holding on

several premises that deserve mention here. It pointed out first

that the Supreme Court had interpreted the Commonwealth's

Constitution to require some sort of remedy for dissenting

lawyers, parallel to the remedy required by the United States

Supreme Court for dissenting workers in closed shop labor

cases. Id. at 40 (citing Machinists v. Street, 367 U.S. 740

(1961); Railway Clerks v. Allen, 373 U.S. 113 (1963); Abood

v. Detroit Board of Education, 431 U.S. 209 (1977).

The First Circuit commented also that the Commonwealth

Court has the power to determine the grounds for admission to

the bar. It could, therefore, fashion a procedure parallel to

that suggested in the above-cited cases, to safeguard dissenters’

associational freedoms. Since the Supreme Court of Puerto

Rico declared itself to be in the process of doing just that, the

Court of Appeals reasoned, the federal courts should await the

result. “[WJhile even provision of a remedy in complete com-

pliance with Abood and its progeny would not necessarily

signal the end of plaintiffs’ federal case, it would surely

transform it.” Romany, 742 F.2d at 41 (emphasis added). The

First Circuit added:

Conversely, of course, to the extent whatever remedy

the Supreme Court of Puérto Rico approves falls short

even of the standards established in Abood anu Ellis,

plaintiffs will have a different, more specific and more

powerful federal constitutional claim.

Id. at 42.

The Court of Appeals, as an interim measure, decided that

the plaintiffs should put 50 percent of their dues into an

escrow account, to be distributed to the Colegio and the plain-

tiffs pursuant to a final resolution of this litigation. Citing Ellis

v. Brotherhood of Railway Clerks, 466 U.S. 435, 444 (1984)

the First Circuit made the following statement:

A-43

{W]e do not decide now whether dues reduction alone is

a satisfactory answer to plaintiffs’ complaint; but at least

it is clear that, at a minimum, dissenting attorneys may

not be forced to subsidize ideological activity outside the

ambit of activities for which membership may properly

be compelled. This being so, plaintiffs should not be

forced to pay full dues to the Colegio while this litigation

proceeds.

Romany, at 44.

This court accordingly held this suit in abeyance until the

Puerto Rico Supreme Court should complete its rule-making

procedure. The new rules for dealing with dissenting

attorneys’ dues finally issued on June 26, 1986, in the form of

an opinion. Schneider v. Colegio de Abogados, 86 J.T.S. 10

(June 26, 1986) (hereinafter, the “1986 Rule’).? The specific

details of these rules will be explored further in considering

their sufficiency under the First Amendment; for the moment

it will suffice to sketch in their broad outlines. The Com-

monwealth court concluded that compulsory bar member-

ship. the imposition of dues, and the required affixation of

stamps (with proceeds to the bar) on legal documents were alli

constitutionally valid. It also decided that the Colegio should

be free to engage in any activity authorized by Law No. 43, or

by Court-ordered rules. It found, most importantly, that “the

? As this court held on August 21, 1987, while the “remedy” was issued in

opinion form, with a case heading, it is nonetheless “a rule promulgated in a

non-judicial proceeding. It looks like a rule, reads like a rule, and acts like a

rule.” Schneider v. Colegie-de Abogados de Puerto Rico, 670 F. Supp. 1098,

1102 (D.P.R. 1987).

The Court attaches the “rule” label to the 1986 opinion not to engage in

semantic game-playing, but in order to emphasize the opinion’s true nature,

and to avoid even the appearance of reviewing a judicial decision of the

highest court of Puerto Rico. In the exercise of anLover-abundance of care we

state that it is only the validity of the 1986 Rule, as applied to the facts

presented to this court, that we consider to be the case and controversy before

this court.

a

A-44

Bar Association may, constitutionally, pronounce itself on

idelological matters, but that the members who dissent from

such pronouncements are entitled, under the Constitution of

Puerto Rico, to object to the use of their contributions or of

part thereof for the ideological activities they do not approve.”

Schneider, 86 ].T.S. 60, Official Translation at 1-2.

In order to protect this right to object, the court set up an

interest-bearing escrow account, into which 15% of dissenting

attorneys’ fees would be deposited. At the end of the year,

dissenting attorneys could specify particular “objectionable”

activities, and receive a refund of a proportion of their dues

equal to the proportion of total dues expended on those ac-

tivities. Attorneys were also given the option of objecting

throughout the year, on a case-by-case basis, to particular ac-

tivities. A three-member panel, composed of retired members

of the judiciary, was established to determine what activities

are truly “objectionable,” and to decide if the 15% figure

should be altered at some later date.

The Puerto Rico Court opted for the term “objectionable”

rather than “ideological” in describing impermissible expen-

ditures. Schneider, 86 J.T.S. 60, Official Translation at 17.

That decision was made, apparently, because the court felt

that the Bar not only can and should speak out on many

ideological issues, Schneider, 112 D.P.R. 540, 551 (1982), but

can compel objecting attorneys to fund some of those expres-

sions, as long as they are “comprised within the Bar Associa-

tion’s purposes and ends which are germane thereto... .” 86

].T.S. 60, Official Translation, at 17. The Bar Association's

purposes—and, in consequence, the content of “objectionable

activities’ —are to be determined by reference to the powers

granted the Bar by the Legislature or the Puerto Rico Supreme

Court. See, Id., Official Translation at 17-18.

The issuance of the 1986 opinion reactivated the case now

being decided. Schneider, 742 F.2d 32, 44 (Ist Cir. 1984)

(“The district court may proceed after the Supreme Court of

A-45

Puerto Rico has finally determined what remedy to pro-

vide... .”). This court entertained several motions, set a hear-

ing date, and reopened the record to allow the parties to in-

troduce additional evidence. The parties declined to present

additional witnesses at the time of the hearing and limited

their evidence to mostly irrelevant documents. The parties also

chose—and this is of crucial significance for today’s deci-

sion—to stipulate “that activities similar in nature to those

undertaken by the Colegio prior to 1983 have continued” .*

The defendant Bar Association then brought a motion to

dismiss for lack of jurisdiciton which the court decided this

past August 21. Schneider v. Colegio de Abogados de Puerto

Rico, 670 F. Supp. 1098 (D.P.R. 1987). That opinion ex-

plained that this case did not constitute a review of any issues

adjudicated by the Supreme Court of Puerto Rico in the earlier

disbarment proceedings (the 1982 Opinion). Rather this case

constitutes a challenge under the federal constitution to an in-

tegrated bar scheme. A challenge that was affected, but not

mooted, by the Supreme Court of Puerto Rico’s decision to im-

plement—out of concern for the requirements of the Constitu-

tion of the Commonwealth of Puerto Rico—an escrow/

rebate program for objecting attorneys.

This court found that, first, defendants had failed to

challenge on appeal this court’s initial assertion of jurisdiction.

In any event, it held,the Supreme Court was acting in its rule-

> The Supreme Court of Puerto Rico, in its 1986 rule/decision, found that

the Colegio’s ideological activities are de minimis. The Colegio now argues

that these findings are somehow binding on the court. That argument,

however, is patently inconsistent, in light of the court’s extensive findings in

1983, with the Colegio’s stipulation set forth above. Nevertheless, it is the

stipulation that binds the parties to this case. The court notes, however, that

the perceived factual inconsistency between this court's findings and the

Commonwealth's are due, at least in part, to a different conception of what

are ideological activities.

More importantly, defer.Jants failed, notwithstanding the Court's

repeated invitations to that effect, to present evidence concerning Colegio’s

non-ideological activities. See Appendix A, which is a partial transcript of

the proceedings.

A-46

making capacity in promulgating the 1986 Rule, and federal

adjudication of the constitutionality of a rule is appropriate

even if the rule is enunciated by the highest court of the Com-

monwealth. Furthermore, the case against Ramos and

Schneider had ended already with their disbarment and subse-

quent reinstatement. See Schneider, 670 F. Supp. at 1102-03;

Schneider, 546 F. Supp. 1251, 1274 (D.P.R. 1982). And, in

fact, the 1986 Rule is not a remedy limited to the parties in a

certain case, but applies to all dissenting attorneys whether or

not they were parties to any of the cases discussed so far.

In that motion, the Colegio also claimed that either res

judicata or collateral estoppel bar plaintiffs’ claims in this

court. Again, these issues were decided in this court’s 1982

opinion, see Schneider, 546 F. Supp. at 1268-74, and not ap-

pealed, see Romany, 742 F.2d at 37 n.6, and are therefore the

law of the case. Schneider 670 F. Supp. 1103. These objections

lack substance in any event, as this court pointed out, because

the requisite pefect identity for res judicata does not exist. Id.

at 1104-05; and beacuse the issues being decided here were not

actually litigated or addressed by the Puerto Rico Supreme

Court in its 1982 adjudication, in such a way as to trigger the

issue-preclusive effect of collateral estoppel. Id.‘

Before considering the relevant constitutional principles, it

may be important to point out the reasons for the dissenters’

discontent. This court found in 1983, and the parties’ stipula-

tion, ante at p. 8, now puts beyond dispute, that “the Colegio

engages in ideological and/or political activism of a pervasive

and continuous nature... .” Schneider, 565 F. Supp. 963, 965

* The court decided these issues in 1982. See Schneider, 546 F. Supp. 1251,

1266-74. In 1987 it reconsidered, and again decided these issues adversely to

the defendants. See Schneider, 670 F. Supp. 1098 (D.P.R. 1987). It continues

to find that reasoning persuasive, and deeply regrets that counsel for the Col-

egio continues to waste its time and the court's by devoting at least 27 of 50

pages in its latest Memorandum to the court, filed a short two months after

this last opinion, to these twice-settled issues. Counsel would have done well!

to address himself more single-mindedly to the merits of this case—the only

issues in contention today

A-47

(D.P.R. 1983). The court attempted to highlight the extent of

the Colegio’s involvement in issues of a highly partisan and

divisive nature by giving examples of its activities, see id., at

965-71. Because of the importance of these findings of fact,

and their present relevance in view of the pretrial stipulation

of the parties they are reproduced hereinafter (the footnotes in

the original findings are excluded only for convenience; they

are nevertheless part of our findings).

Il. Findings of Fact

(1) At least since 1973, the President of the Colegio has

made annual appearances before the United Nations to pre-

sent the “official” position of the Colegio with regard to the

political status of the Commonwealth of Puerto Rico to the ef-

fect that the Commonwealth is a colony of the United States,

and to request that the “case” for its decolonization be submit-

ted for action to the United Nations General Assembly. This

position is espoused as representing the views of all the

members of the Colegio.

The appearances by the Colegio before the United Nations’

Decolonization Committee, as well as the substance of the

Colegio’s position therein, have received wide-spread pub-

licity in Puerto Rico and in the international news media.

(2) The Board of Governors has adopted many resolutions

dealing with diverse tupics of an ideological and/or political

nature. These include among others: condemning the Federal

Bureau of Investigation for “intervention” with the Puerto

Rican independence movement and its leaders (Plaintiffs’ Ex-

hibit 44); opposing an increase in the number o: Federal

Judges in Puerto Rico as an “attempt to fortify Federal Control

over the island contrary to the duty of Congress to recognize

the right of Puerto Rico to assume full sovereignty” (Plaintiffs’

Exhibit 46); requiring that the President of the United States

order the Navy to cease target practice in the island of Vieques

A-48

and withdraw therefrom, “and that this resolution be sent to

the Puerto Rican Legislature, to Congress, to the President, to

the Decolonization Committee of the United Nations and to

the media for massive promulgation” (Plaintiffs’ Exhibit 49):

resolving to “orient and inform” the people of Puerto Rico

regarding the resolution of the Decolonization Committee of

the United Nations regarding Puerto Rico (Plaintiffs’ Exhibit

235 at p. 14. Resolution No. 6); condemning the Legislature of

Puerto Rico for its “distortion [of] the historical truth” in con-

demning the previously referred to resolutions of the Decol-

onization Committee (Plaintiffs’ Exhibit 235 at p. 29, resolu-

tion No. 14); requesting the President of the United States that

he release four Puerto Rican Nationalists convicted of par-

ticipating in the shootings in Congress in 1952 (Plaintiffs’ Ex-

hibit 61); opposing a new voter identification system proposed

by the Puerto Rico Electoral Committee (Plaintiffs’ Exhibit

62); repudiating the Somoza regime in Nicaragua, supporting

the Sandinista Front of National Liberation, and asking the

United States to recognize the “provisional Government of Na-

tional Reconstruction” (Piaintiffs’ Exhibit 235 at p. 66, Resolu

tion No. 32); condemning the Russian invasion of Afghanistar

(Plaintiffs’ Exhibit 235 at p. 91, Resolution No. 43); expressing

sur port for Olympic sports and that the Puerto Rico Olym:

Committee be the one to decide whether or not to boycott the

Moscow Olympic Games (Plaintiffs’ Exhibit 235 at

Resolution No. 44); stating the Colegio’s concer: ne

of all qualified voters” as to the state of the

and authorizing the president of the Colegio to name a ccm

mittee “to watch and guarantee the purity of the electora

cess” (Plaintiffs’ Exhibit 235 at p. 102, Resolution N

pressing the Colegio’s solidarity with the people of E! Sa

and condemning the governing Military Junta (Plaintiff

hibit 235 p. 114, Resolution No. 2); endorsing ar

a march to be held favoring the movement to get the Na

»

leave Vieques (Plaintiffs’ Exhibit 236 at 129, Resolution N

a

A-49

10); asserting the “defense” of Puerto Rican culture and rejec-

ting “the efforts of the Commonwealth with relation to the In-

stitute of Puerto Rican Culture as attempts to destroy the

cultural heritage of Puerto Rico” (Plaintiffs Exhibit No. 235 at

p. 135, Resolution No. 13); criticizing the United States for

transferring Haitian refugees to Puerto Rico and demanding

their immediate release to the mainland (Plaintiffs’ Exhibit

235 at p. 149, Resolution No. 21); condemning the United

States “for imposing a concentration camp on Puerto Rico in

complicity with the Government of Haiti” (Plaintiffs’ Exhibit

235 at p. 167, Resolutiom No. 30); opposing the use of the

Federal Grand Jury system in Puerto Rico (Plaintiffs’ Exhibit

235, at p. 137, 151, 162, Resolutions Nos. 14, 22, 28); blaming

the police and the University Administration for the use of

force in a strike by students at the University of Puerto Rico

(Plaintiffs’ Exhibit 235 at p. 201, Resolution No. 42); condem-

ning the draft as a “blood tax paid by Puerto Ricans :n the four

wars fought in the Armed Forces of the United States” (Plain-

tiffs’ Exhibit 235 at ». 203, Resolution No. 43).

All of the above have been widely disseminated by the Col-

egio throughout the news media, as a matter of practice and

routine. if

(3) The physical facilities of the Colegio have been routinely

used for ideological and/or political activities unrelated to the

purposes of the Colegio. These activities have included among

thers: a concert to raise funds for the accused in the armed

robbery of a Wells Fargo truck; a press conference by the

Committee for the Defense of Our Dignity”; a press con-

ference by the “Committee for the Defense of Democracy in

Haiti’; numerous press conferences by labor unions; assembly

of the “National Committee for the Defense of Vieques”;

meetings of the “Committee for the Selection of Celeste as

Mayor’; a press conference of the “Pastors’ Association”; a

seminar about the “organizational and pclitical aspects of the

Grand Jury’; press conferences of the Puerto Rican Socialist

A530

party; press iii at the “United Committee Against

Repression”; public hearing of the Central Committee of the

Popular Democratic Party; meetings to’ organize a defense

committee by the Puerto Rican Socialist-League; a meeting of

the leadership of the Popular Democratic Party-in San Juan; a

meéting of the San Juan Zone of the Puerto Rican Socialist

Party; an organizational meeting of “Citizens interested in the

improvement of TV"; meetings of the "Crusade for the Rescue

of Vieques”; a prets conference of the “Artists in Favor of Ar--

tistic Freedom”; commemoration of the anniversary of the |

death -of Dr. Pedro J. Chamorro; a press conference of the se

“Committee for the Defense of Puerte Rican Culture”; a press

conference and meetings of the “Committee for the Defense of

Nicarague® ; meetings of the-“Law Students’ Council” in con-

nection with the strike at the University of Puerto Rico; a con- -

cert by the “Committee for the Defense in Support of the Puer-

to Rican Prisioners of War”; a press conference of the “Com- |

mittee for the Rescue of Villa sin Miedo,” as well as various

meetings and conferences related thereto; a movie-showing by.

“Claridad,” the official newspaper ef the Puerto Rican

Socialist Party, dealing with education in Cuba; a press con:

ference by the Federation of University Students for In-

dependence in connection with the “situation” at the Univer-

sity of Puerto Rico; an activity of the Puerto Rican Socialist

Party in support of Cuba; a “cultura! political” activity by the

“Committee for the Defense of Nicaragua”; a press conference

-by the local of the Professional Air Traffic Controllers

Organization regarding their negotiations and strike; a show- >

“ing of the movie “E] Salvador; the people shall triumph,” by

the “Puerto Rican Committee’ in Solidarity with the

Salvadoran ‘People,” as well as numerous other activities by

said organization; a conference by the Dominican Revolu-

~—tinnary Party; meetings and press conferences of the “Commit-

tee Against the Uniform Increase in Tuition” of the University

- of Puerto Rico; a press conference of the Vieques Fishermen's |

rye.

5

one he 6

_—ae ee ee eee ee UP eee ee

rar Cen Le ea Neg Rae oN eee ita RET ete eR get ns eR fy EOE RC a

{oF 4 ‘ Eran i - 2

Jae ASI

‘Association regarding military maneuvers in the Cisibbean

: Area; a_press conference by the ° ‘Puerto Rican Ecumenical -

- Social Action Committee” about the role of the “Church in the

80's”; an organizing meeting: of the New Progressive Party -

followers -of “Hernan Fadiila for Governor’; the annual ~

assembly of the “Puerto Rican Confedetation of Spiritualists”;

* a press conference of the “National Ecumenical Movement” in

support of the people of El Salvador.

Many 4f these activities were held without any charge being

made by the-Célegio to the sponsoring group. or with only a

nominal fee being charged. Irrespective of whether or not a -

charge is made for the use of the Colegio’s facilities, because of

the. continuous nature of these activities and the widespread |

publicity given to the fact that they take place in the Colegio’s

premises, a general impression is given that the Colegio is

somehow associated in an active manner with at least some of

these activities. This general impression is buttressed by ‘the

nature of the resolutions approved by the Board to which we, .

have previously alluded, many of which in fact appear to com-

plement the above-mentioned activities. The Colegio’s total

"failure to disavow its sponsorship of the activities held within.

its premises does nothing to dissipate this impression.

(4) The Colegio also sponsors various publications. These.

include a law review, a monthly news letter and the

miscellaneous reports of its various committees. Several resolu-

tions and proceédings of tne Board of Governor's and of the _

general assembly, of an ideological or political nature; have “

been published in the Colegio’s law review, a publication

which receives wide dissemination in and outside Puerto Rico.

Additionally, the law review publishes some articles which ~

can only be cataloged as political or ideological rhetoric, with: —

little, if any, relationship to the workings of a law journal. The

monthly news letter is also used to disseminate the resolutions

of the Board of Governors, some of which as previously’ in-

dicated, have a strong ideological or political content. The

a

ASQ -

program for the annual general assembly is also a source of

-_ publicity for ideologically-tainted resolutions, and is used as

well for other proselytizing purposes.

Relatéd to the above age the various committees “ae com. —

missions of the Colegio. These groups issue reports on matters,

including ideoloyical and political issues, many of which have

been the basis of the resolutions previously referred to herein:

Many of these reports have been independently published by —

the Colegio, and their contents have received wide publicity

and circulation throughout the Colegio membership and the

general pubiic.

(5) The Colegio has appeared either through testis ony or

‘by written briefs, before Congressional committees and before

committees of the Legislature of Puerto Rico to present institu- -

tional views on behalf of the Colegio membership regarding

_ pending legislation and other matters of -2 political and/or

ideological nature. Examples of these activities include ap-

pearances before Congressional Committees considering

legislation dealing with migrant farm workers, and similar ap-

‘pearances to oppose legislation fo increase the number of

District Judges in the United States District Court for Puerto

Rico. Colegio President Tapia Flores also appeared in person —

before a committee of Congress considering the enactment of

Spanish language legislation for the U.S. District Court in

_ Puerto Rico. On a second occasion he appeared before a com-

mittee investigating Naval activites in Vieques. Colegio Pres-

_sident Negron Garcia appeared before the Puerto Rice

Legislature to condemn the Electoral Law of Puerto Rico, and

to state the Colegio’s position as to “what the electoral process

in a democracy should be.”

Schenider, 565 F. Supp. 963, 966-71.

(6) Although no evidence was presented by the Colegio

regarding its non-ideological activities, we assume that these

activities take place. There is, however, no way of deciding

from the evidence before us the proportion of non-ideological

i

i

:

4

A583

to ideological activities. Considering. the - Sietimony of the

Colegio’s. auditor, Juan Espiet, to the effect that there is no

way of determining, from an accounting standpoint, the ex-

‘tent of nonideotogical versus ideological activities, and further ~~

considering the pervasiveness of the latter, we are forced to

conclude that the ideological activities of the Colegio con-

stitute a large and cea proportion of the Colegio’s total

activities,

Ill. The relevant constitutional principles

A. Whe First Amendment Principles

3 The court turns therefore to its principal task: deciding

_ precisely “the ambit of activities for which membership [in the

Bar] may properly be compelled,” Romany, 742 F.2d at 44;

and attempting to ensure that dissenting members are not —

forced-t0' port ideological activity outside that ambit, if the -

rule set forth in the Commonwealth Court's 1986 opinion does

not already do so. The court wishes to emphasize that it caty-

‘not and does not express arly opinion regarding the validity of

the integrated bar, including the escrow/ rebate scheme, under

the Constitution of the Commonwealth of Puerto Rico. See

Cuesnongle v. Ramos, Na. 85-1068, slip - at 16 n. 6 (ist Cir.,

Dec. 30, 1987).

If there is any settled proposition in this 6 area of the law; it is

that a corollary of the First Amendment freedom of association

is the right not to associate. See, e.g., Abood v. Detroit Board

of Education, 431 U.S. 209, 234-36 (1977); Chicago Teachers’ |

Union v. Hudson, 475 U.S. 292,/301 (1986). Compelling an in-.

dividual to contribute to a particular association, through dues

and membership therein, necessarily has an — on. that

right. See Hudson, supra, at 301.

Whenever the interests protected by the First Aaisaieeet

are infringed, the courts must strictly scrutinize that govern-

ment action to determine if it advances a compelling state

il

ne ee A-54

interest. See Elrod vy. Burns, 427.U.S. 347-362 (1976) (opinion

of Brennan, J.) (“The interest advanced must be paramount,

of vital importance... .”); Buckley v. Valea, 424 U.S. 1, 44-45

(1976) (“whether the governmental interests advanced in its

_~ support satisfy the exacting scrutiny applicable to limitations

_ on core First Amendment rights of political expression”). Fur-

_ thermore, the governmental ‘compulsion must be “carefully

tailored to minimize the infringement.” Hudson, 475.U. S. at

303. In the words of the — Court:

The. right to associate for expressive purposes is not,

. however, absolute. Infringements on that right may be

_justified by regulations adopted to serve compelling. state

interests, unrelated to the suppression of ideas, that can-

nat be achieved through means significantly less restric-

tive of associational freedoms..

Roberts v. United States Jaycees, 468 U.S. 609, 623 (1984).°

The Supreme Court has dealt with the problem of com-

pelled association in the union context. See Chicago Teachers’

Union v. Hudson, 475 U.S. 292 (1986); Ellis v. Brotherhood of

_ Railway Clerks, 466 U.S. 435 (1984); Abood v. Detroit Board

of Education, 431 U.S. 209 (1977); Brotherhood of Railway

Clerks v. Allen, 373 U.S. 113 (1963); International Ass’n of .

Machinists v. Street, 367 U.S. 740:(1961); Railway Employees

Dept. v. Hanson, 351 U.S. 225 (1956). The principles express-

ed in these cases are controlling here, although the differences

between bar associations and unions preclude a purely

mechanical application. Even extrapolating directly from

* Whatever confusion may have existed concerning the standard to be

applied when an individual is compelled to ‘pay dues to an association, sé¢

Sorenson, The Integrated Bar and the Freedom of Nonassociation—Contin-

uing Siege, 63 Neb.L.Rev. 30, 62 (1983), was allayed by Hudson’s direct

reference to traditional First Amendment analysis. See Hudson, 475 U.S. at

303 n.11, 106 S.Ct. at 1074 n.11; see also Gibson v. The Florida Bar, 798

F.2d 1564, 1569 (11th Cir. 1986).

_"

we ae.

ASS. <<

< bathrop v. Boschen 367 U.S. 820 1961), an early case deal:

ing with the constitutionality of the integrated bar, is unlikely

- to prove very fruitful. See Gibson vy. The Florida Bar, 798 F.2d

1564, 1566-67 (11th Cir. 1986); see also Abood, 431 U.S. at

233 n.29. Analysis of plaintiffs’ claims therefore will require

determining whether compulsory membership in the bar, with —

the present esctow/rebate system in place, is the least restric-

tive way to achieve Puerto Rico's compelling interests. —

B. Application of the First Ainendment to the Colegic

l. The Asserted. State Interests

When announcing its new rule for dealing with dissenting

attorney's fees, the Commonwealth court articulated several

of the interests the integrated bar association is intended to

further. Two were remarkably broad: “[t]he creation of a .

strongly pluralistic society ...,” 1986 Rule, Official Transla-

tion at 13 (quoting Colegio de Abogados de Puerto Rico v.

Schneider, 112 D.P.R. 540, 549 (1982)) and “contributing to

the betterment of the administration of justice.” Id. at 18.

One can hardly conceive of loftier goals in a democratic

society than creating a strongly pluralistic society and improv-

ing the administration of justice. And yet broad statements

such as these cannot form the basis for an infringement of First

Amendment .rights. If used at all they must be natrowly

tailored. The Eleventh Circuit, for example, has somewhat

artificially narrowed this “amorphous” interest:

The Bar should construe “improving the administration

of justice” as pertaining to the role of the lawyer in the

judicial system and in society. The collective expertise of

_. lawyers is grounded in their long-standing relationship

with the courts, Lobbying activities that infringe upon

individual rights should relate directly to that expertise.

rad

A-56

Gibson v. The Florida Bar, 798 F.2d 1564, 1569 (1ith Cir.

1986). In a footnote it then gave — of permissible

lobbying subjects: '

‘Acceptable areas for Bar lobbying would include the

following topics: (1) questions concerning the regulation

of atterneys; (2) budget appropriations for the judiciary

and legal aid; (3) proposed changes in litigation pro-

cedures; (4) regulation of attorneys’ client trust accounts;

and (5) law school and Bar admission standards. |

Id. at 1569 n.4. In commenting on a similar statement of pur-

pose advanced by the New Mexico Bar, the sumer court

stated:

The standard urged by the Bar is an all-encompassing

exception to the rule of Abood. It is difficult to conceive

_ of an issue presented to the New Mexico Legislature

which cannot arguably be related to the administration

of justice or improvement of the legal system. The stan-

dard is too broad.

Arrow v. Dow, 544 F. Supp. 458, 462 (D.N.M. 1982). If “the

administration of Justice” is deemed too broad a standard,

what can be said of the “advancement of a pluralistic society”?

Accepting these standards as the guides to determine permissi-

ble bar activity would be tantamount to a complete abdication

of the court's duty to protect dissenting attorneys’ First

Amendment rights.

Besides their inherent ambiguity, these government interests

~ read too broadly suffer from an additional fundamental flaw:

Compelling association to further these interests acts directly

to compel the expression of sensitive beliefs. As several Justices

of the Supreme Court of Michigan recognized,

A-57

[e]ven if the specific legislative political goals can be

justified as advancing the public interest or improving the

administration of justice, compelled support and associa-

tion to further these activities is not constitutionally ac-

ceptable. The “public interests” and the “advancement of

jurisprudence” are not unitary concepts subject to a single

| interpretation. Disagreements regarding legislative or

other policy choices arise not only because they result in

differing practical effects on individuals, but more im-

portantly because they reflect differing ideological ap-

proaches to the subject matter. Such ideological beliefs,

and association to promote or oppose such beliefs lie at

“the core of those activities protected by the First Amend-

ment.” Elrod v. Burns, 427 U.S. 347, 356, 96 S.Ct. 2673,

2681, 49 L.Ed.2d 547 (1978) (plurality opinion). |

Falk v. State Bar of Michigan, 411 Mich. 63, 305 N.W.2d 201,

218 (1981) (Ryan, J., joined by Moody and Fitzgerald, J.J.),

dismissed after further fact finding, 418 Mich. 270, 342

N.W.2d 504 (1983) (per curiem).

In other werds, lawyers would be compelled to express their

opinion (or, worse, represent someone else’s opinion as their

own) on matters in which differing opinions are the product of

ideology.® Abood v. Detroit Board of Education seems to state

that such compulsion cannot be required as a condition for

employment. See Abood, 431 U.S. 209 at 235. Roberts v.

United States Jaycees reinforces this conclusion when it states

that an infringement of First Amendment rights‘can only be

® The very fact that differences of opinion stem from varying ideologies

renders much less compelling the state’s interest in getting an attorney's

opinion, since it is less likely to be informed by his or her particular expertise

as a lawyer than by his or her political ideological tendencies.

A-58

justified by ‘a compelling state interest “unrelated to the sup-

pression of ideas.” Roberts, 468 U.S. at 623.’

For all of the above reasons, therefore, the court must

search for narrower expressions of the state interest, when —

attempting to justify the burden that compulsory association

places on dissenting attorneys’ freedom of association. It is

worth noting that the Supreme Court, faced with the agency

shop, reacted in a similar manner. The inquiry was not

whether the payment of dues was narrowly tailored to ad-

vance “labor peace”; but rather whether it narrowly remedied

the free rider problem—the threat to labor peace. As a conse-

quence, the Supreme Court decided objectors should only pay

for those activities that directly benefited them and con-

tributed to collective bargaining and contract administration

(which are the Union's core contributions to labor peace). See

Ellis, 466 U.S. 435, 447-48.

* One commentator has summed up. all these objections as follows:

[Advancing the administration of justice is too broad.] Too broad, |

presume, in two senses. First, given Abood’s applicability, any such

standard must enable the bar and ultimately the courts to discriminate

between valid and invalid uses of compulsory dues in order to

safeguard the First Amendment rights of captive dues payers. But this

standard is far too vague to serve as a basis for any such discrimination.

Second, the standard’s breadth suggests that there is a compelling state

interest in having the bar lobby on virtually any bill it chooses, which

seems preposterous. Lawyers’ expertise is surely more modest than that

and ... bar position taking on some subjects germane to the ad-

ministration of justice (e.g., no-fault auto insurance) may be sc colored.

by lawyers’ private interests as to have no distinctive, let alone com-

pelling, public value.

Sorenson, supra n.4, at 61 (footnotes omitted).

* An additional reason tor discarding these purposes may be pointed out:

In light of the scope of the goal to be achieved (e.g., a more pluralistic

society) one may wonder if a compulsory bar association could ever be con-

sidered the means least restrictive of first amendment rights of reaching that

ideal. Indeed, one may question whether compelling uniformity of expres-

sion is calculated to achieve a more pluralistic society at all.

A-59

2. The Permissible sean

— os

Certain state purposes for the bar are clearly acceptable,’

and attorney discipline is one of these. The Commonwealth

clearly has an interest in ensuring that attorneys, as

repositories of the public trust, and as officers of the court

playing a crucial role in determining the guilt or innoncence of

its citizens, are held to the highest level of integrity. The in- -

terest takes on even. greater weight when one considers that

only lawyers can be notaries in Puerto Rico, and that as

notaries they validate all sorts of public documents, acting

essentially as public cfficers. See Schneider, 565 F. Supp. at

972 n.34. 3

Furthermore, bar-controlled discipline is clearly anarrowly

tailored method of policing attorneys. Lawyers themselves,

better than anyone, know the pressures created by the.practice

of law. They can anticipate problem areas and effectively pro-

vide safeguards. Attorneys are uniquely qualified to strike the

delicate balance between zealous advocacy and respect for the

judicial system. Finally, they are in a particularly favored

position to police themselves. While some aspects of this self-

regulatory function may be seen to have ideological overtones

(note, for example, the debate concerning attorney advertis-

ing), the weight-of the interest and the bar's particular ability

to advance it outweigh the burden on dissenting attorneys.'°

* The conclusions the court sets forth in the following pages have been

culled from the few cases on point, see, e.g., Gibson v. The Florida Bar, 798

F.2d 1564, 1569-70 (11th Cir. 1986); Arrow v. Dow, 544 F. Supp. 458,

461-63 (D.N.M. 1982), and from the commentators, see, e.g., Schneyer, The

Incoherence of the Unified Bar Concept: Generalizing from the Wisconsin

Case, 1983 A.B.F.Res.J. 1, passim; Sorenson, The Integrated Bar and the

Freedom of Nonassociation—Continuing Siege, 63 Neb.L. Rev. 30, 63-80

(1983); Note, Falk v. State Bar of Michigan: First Amemdment Challenge to

Bar Expenditures, 3 Det,Col.L.Rev. 737, 747-50:(1982), fs well as from the

articulations of state interest set out by the Supreme Court of Puerto Rico, see

Colegio de Abogados, 86 ].T.S. 60 (1986).

‘© One commentator, however, has suggested that if approximately 20 of

50 states manage equally well to perform all these functions by means of

legislative regulation and judicial rule-making, without a compulsory bar

association, then it cannot be said that an integrated bar |; the least restric-

tive method of achieving any goals. See Sorenson, supra, at 69.

=

A-60

_. A similar evnpelling state interest is upholding the com-

~ petence of members of the profession! The importance of

skilled, wei. ained lawyers to ensure the evenhanded ap-

plication of the laws is self-evident. The government may re-

quire the bar to assure that, through continuing legal educa-

tion, bar admission standards, and the supervision of law

schools, attorneys become and remain qualified to practice the

law. Again, attorneys are singularly qualified and owe a cer-

tain duty to ascertain lawyers’ most serious educational needs

and the best ways to meet them,

A third constitutionally permissible end is increasing the

availability of legal services to society. This includes tradi-

tional efforts like legal aid programs, public information

regarding availability of legal services, and public education —

on substantive areas of law (e.g., landlord-tenant law) that

would increase citizens’ ability to recognize and enforce their

legal rights.'' The reasons this can be seen as a compelling in-

terest narrowly served by an integrated bar are similar to those

described above: Lawyers’ collective expertise places them in a

special position to perform this function, Furthermore, their

position in society, as a link between the written law and its

living expression, imposes certain special duties on them to

make legal services available to those for whom legislation

would otherwise remain behind an impenetrable veil. Deci-

sions regarding the course society ought to take lie in the

political realm; once those decisions are incorporated into

legislation, lawyers may be required to ensure that the law is

explained to society's members.

‘' Tits should not be read, of course, as a license to lobby for new con-

sumer legislation, for example, but simply as the ability to in.urm people of

the state of the law

v

‘ » '

ee a

a

be

A-61

Finally, the special and intimate relationship between

attorneys and the courts gives attorneys special knowledge in

areas relating to the improvement of the functioning of the

courts. See Gibson v. The Florida Bar, 798 F.2d at 1569. They

include such subjects as evidentiary rules, rules of procedure,

— docketing matters, and similar methods of ensuring j al ef.

ficacy and efficiency. Public commentary by the Bar Associa-

tion on these subjects is not likely to seriously implicate

attorneys’ political beliefs. Furthermore, they are subjects

that, because of their arcane nature, escape public scrutiny to

a great degree, making commentary by the qualified segment

of the public all the more vital.

There are some expenditures that are not challenged, and

do not seem to present any First Amendment problems. We

note, for example, that the Bar Association provides attorneys

with life insurance. A fifth category, therefore, of permissible

expenditures, are those with no expressive content, that con-

vey no messages, and benefit all members equally. While not

necessarily promoting a great public interest, these items do.

not act to infringe any real right to freedom of expression, and

therefore need not be strictly scrutinized. See Ellis v. Railway

Clerks, 466.U.S. 435, 456 (198}).

The Bar's publications, of course, may meet all or none of

these purposes. In this case, the court has found that the Bar's

various publications contain markedly ideological material.

See ante, and Schneider, 565 F. Supp. 963, 969-70. As the

Supreme Court has made clear, “[i}f the {Bar} cannot spend

dissenters’ funds for a particular activity, it has no justifieation

for spending their funds for writing about that activity.” Ellis

v. Railway Clerks, 466 U.S. at 451. In view. of the extent of

political content in these magazines, and its intermingling

with permissible content, the publications as they exist mow

cannot be funded by objecting attorneys. Furthermore, teving

to separately account for the expense of each individual /

published item is the kind of burdensome nit-picking that itself

7

ae

e 7

GE a | ee (Ae ee

he hibtee de dds Oe Ne el SAL ee” ad) i eae

, A-€2

chills the exercise of First Amendment aie: Each publica:

tion stands or falls, therefore, as an indivisible entity, depen-

ding on its editorial policy. La magazine, for example, is a

free forum for the exposition of educational articles reflecting

different viewpoints, it passes muster.

_ It is entirely possible that additional legitimate areas of con-

cern for the Bar may exist or may develop. It is unfortunate

that becatise plaintiffs’ position is that no expenditures are per-

_ missible, defendants’ that all statutory purposes are per-

missible, the court has received no meaningful discussion of

what means narrowly advance compelling state interests. This

situation, as mentioned already, was aggravated by Colegio’s

insistence on procedural matters already repeatedly decided

by this. same court and its failuré to supplement the record

with any additional evidence from that previously presented.

IV. The Constitutionality of the 1986 Rule

As the court has pointed out, see Schneider y. Colegio de

Abogados de Puerto Rico, 565 F. Supp. 963 (D.P.R. 1983),

and the parties have stipulated, the Colegio uses a substantial

portion of its budget to subsidize ideological activities. These

are activities, as we have seen, for which support carfot be

compelled. What we must now ascertain, therefore, is

whether appropriate ‘steps have been taken to ensure that |

dissenting attorneys’ funds are not being used to finance those

activities. The procedure that purports to do this is the 1986

'* Although federal courts will often abstain when f with a challenge

to a new rule that lacks definitive interpretation by a 's court,

Railroad Comm'n. v. Pullman Co., 312 U.S. 496, there is no to do so

here. The 1986 Rule is facially invalid. No interpretation by a court could

limit the plain language of the rule regarding the ambit of permissible ac-

tivities: the rule simply allows the court or the legislature to add permissible

activities at will. That very uncertainty is fatal to its validity. Furthermore,

the procedures it sets forth by no means adequately protect the dissenters.

Finally, the harm is ongoing, and will continue, under the terms of the 1986

Rule. Pullman type abstention, therefore, is not required.

: .

a ey ee ee, ee NS ee ee ee

A-3

Rule. Schneider v. Colegio de Abogados, 86 }.T.S. 10 (June

26, 1986). Whatever its yalue under the Constitution of Puerto.

Rico, however, it is clear that this remedy dees not adequately

safeguard disseriters’ federal First Amendment rights.

As will be recalled, the rule defines “objectionable

activities.” It requires that 15% of annual dues be paid in to

an escrow account for all those attorneys who enter general

—eabjections. It also provides that attorneys may object to

specific activities, in which case it appears that the portion of

their fees allocable to those activities will go into escrow.

(While this last feature shows respect for members’ feelings, it

is clearly not compelied by the First Amendment, as the union

shop cases make clear). At the end of the year, attorneys whose

monies are in the escrow account can come forth and present,

before a Review Board, their objection. Once the Review

Board determines, under procedure} yet to be set forth, which

activities are objectionable and the costs allocable to them, a

portion of the 15% would be returned to all objecting

attorneys. This portion represents the proportion of their an-

nual dues equal to the percentage of annual dues received by

the Bar Association and spent on those objectionable a ‘ivities.

Perhaps the most basic flaw in this arrangement lies buried

in the rule's definition of “objectionable activities.” The Com-

monwealth Court said: “Activities comprised within the Bar

Association's purposes and ends which are germane thereto

shall not be considered objectionable activities.” 86 ].T.S. 10,

Official Translation, at 17. A little later, the Court said:

“The functions and purposes of the Bar Association are:

— a oa nara cay

’

To exercise other powers conferred -by law or by the

Supreme Court of Puerto Rico and any other incidental

powers necessary or convenient for the ends of its creation

und which are not in disagreement with the purpose and

the law which creates the Bar Association.”

Id. at 18.

A-64

It is Obvious that the mere fact that an-act lies within the

statutory powers of a quasi-official organization does not per-

mit the state to compel dissenters to fund that act. In facf, that

was the very issue the United States Supreme Court avoided in ~

international Machinists v. Street, 367 U.S. 740 (1961), dy in-

terpreting a statute not. to permit certain challenged

activities.'? More im portantly the Court explicitly held certain

statutory purposes unconstitutional in Abood v. Detroit Bd. of

Education, 431 U.S, 209 (1977). There the Michigan Supreme

Court interpreted the relevant statute to permit unions to lob-

by the legislature on-certain subjects. The Supreme Court of

:, the United States nevertheless said that “[First Amendment

principles] prohibit the appellees from requiring any of the ap-

‘pellants to contribute te the-support of an ideological cause he

may oppose as a condition of holding a job...” Abood.

To hold otherwise would be to permit the Conimotiwenith

to determine, legislatively or by Court tule, the content of

dissenters’ First Amendment rights. The range of permissible

compelled expression, as we have seen, must be determined by

means of careful balancing of interests and rigorous constitu-

tional. analysis, not merely by deferring to, legislative

judgments. Therefore, since the remedy does not properly —

.dentify the activities which cannot be funded through com-

. pulsory fees, it fails to bring the integrated bar into conformity

with the First Amendment.

The infirmities of the 1986 Rule do not énd here, however.

The proceedure it sets ont falls short of. some of the re-

quirements elucidated aleady by the Supreme'Court in the

union shop cases. The percentage of dues assigned to the

escrow account has been set at 15% by the Commonwealth,

with power in the Review Board to change that figure “within

what is reasonable... according to the experience acquired.”

_, Schneider, 86 J.T.S. 60, Official Translation at 21. No

eer erie cote

'? An interpretation “not without its difficulties,” * see Abood v, Detroit Bd.

of Education, 431 U.S. 209, 232(1977).

ee yen

SADR Ca wy ey

justification is given for the 15% figure nor are any procedures _

set forth to allow objection to it or review. of a decision to ve

change. that figure.”

The Supreme Court made the requirements in this respect

crystal clear: -

| | )

[T]he advance reduction of dues” was inadequate.

. because it provided [objectors] with inadequate informa-

tion about the bases for the proportionate share. . . . Basic

considerations of fairness, as tg ee for the First

Amendment rights at stake, also dictate that the potential

objectors be given sufficient information to gauge the

propriety of the union's fee. Leaving the nonunion

employees in the dark about the source of the figure for

the agency fee—and requiring them, to object in order to

receive information—does not adequately anew the .

careful distinctions drawn in Abood.

Chicdas Teachers Untin-v, Hadwn. 475 US. 292, 306 (1986)

_ (footnote omitted).

In any given year, therefore, the percentage to go into

escrow must be based on the Colegio’s projected budget, and |

on its estimate of expenditures to be made for objectionable

purposes. Furthermore, the United States Supreme Court re-

quires that the organization. justify the dues to be collected,

- not merely explain how the non-collected or escrowed fees will

be spent. “An acknowledgement that.nonmembers would not.

be required to pay any part of 5% of the Union's total annual

expenditures was not an adequate disclosure of the reasons —

why they were required to pay their share of 95% ". Id. at 307.

In essence, the Colegio needs to make known to the members —

of the Bar—all of them—its proposed budget, allocating all

the dues it intends to retain to one or other of the permipsibie

ends set forth ante. 7 ;

An additional reason to require the organization to explain

one

Pinte

A-66 _

in advance what its expenditures will be, and which are per-

missiblecan be found in Abood, 431 U.S. at 241: “[To do

otherwise] would also place on each employee the con-

siderable burden of monitoring all of the numerous and shif-

ting expenditures made by the Union that are unrelated to its

duties as exclusive bargaining representative.” The solution, of

course, is simply to categorize each expenditure in the budget

under one of those heads, and use the percentage of expen-

ditures not so allocated as the escrow percentage.'* If it is im-

possible to do so in advance of the Colegio’s fiscal year, the

percentage can be determined by reference to average past

budget items, with a view to reasonably expected changes in

spending habits. .

In this way, then, the Colegio will bear the initial burden of

justifying all its expenditures, as required by Hudson, 475 U.S.

at 307. In addition, dissenters must have a right to objeet to

that allocation. The burden then remains on the Colegio to

show before an “impartial decisonmaker” (who must render a

“reasonably prompt decision”) that the expenditure is ger-

mane to one of the permissible purposes. Id. at 307. That im-

partial body, of course, could be the one already in place by

virtue of the 1986 Rule: The Review Board. The objectors’

participation in this procedure, the provision of an impartial

'* It is noteworthy that Hudson does not require “absolute precision” in

this respect. See Hudson, 475 U.S. at 307 n.18. The Court recalls also that

Colegio’s auditor once testified that it was impossible to isolate ideological

from other expenditures. Schneider, 565 F. Supp. 963, 971 (D.P.R. 1983).

Apparently, however, the situation has changed:

The Bar Association -carries a strict bookkeeping of its income and

expenses. It has a competent and responsible internal and external

‘auditing system. It has devised a system by virtue of which it is possible

to determine the direct and indirect cost of any activity in such a way

that anybody can accurately say what contribution would correspond

per bar member to a specific activity.

Schneider, 86 J.T.S. 60, Official Translation at 12. Therefore, it seems not

unreasonable, indeed required in order to narrov. ly tailor this scheme, to de-

mand as much precision as is practically possible, so as to protect dissenters’

First Amendment rights more adequately.

A-67

forum, and the allocation of the burden of proof to the Colegio

are all necessary components of the escrow/rebate Scheme.

One last item to be noted in this respect is the need for.a

“buffer.” This is a certain percentage of the funds in addition,

to the unallocated percentage discussed above that should be .

escrowed in order to ensure that, if the impermissible expen-

ditures exceed the amounts budgeted for them, the amount to

be returned does not exceed the escrowed amount. (Compare

Hudson, at 295. While the Supreme Court has not explicitly

required such a buffer, this Court deems it necessary to keep

the First Amendment infringement to a minimum. It need not

be excessive, however, since the Colegio has a right also to use

non-dissenters’ fees in any way it chooses’ See Railway Clerks:

v. Allen, 373 U.S. 113, 122 (1963); Colegio de Abogados, 86

J.T.S. 60, Official Translation at 1 (citing Colegio de

Abogados, 112 D.P.&. 531 (1982)). The buffer will need to be

larger, of course, if the pecentage escrowed is based on past

budgets rather than the specific annual budget since the

calculations will necessarily be more imprecise.

The buffer could be determined by reference to traditional

levels of spending as reflected in past budgets, and traditional

levels of overspending budgetary prognostications. Should im-

proper expenditures ‘still exceed the escrowed amount they

should be returned with interest. While this would still work a

temporary loan such as the court found impermissible in. Ellis

v. Railway Clerks, 466 U.S. 435, 443 (1984), it at least would

be infrequent and inadvertent. It would satisfy, therefore, the

“narrowly tailored” requirement.

As a separate matter, the 1986 Rule requires dissenting

attorneys to object at the end of the year to specific activities

they do not wish to fund. 1986 Rule, § C(2)(a), Official

Translation at 21. The general objection filed initially acts

merely as a “notice of the right ‘to object,” and no refund is

made until the Review Board adjudicates the specific objec-

tions. 1986 Order, § C(3)(e), id. at 22-23. That, of course,

A-68

violates the specific mandate of Abood, 431 U.S. at 241: “To re-

quire greater specificity [in objecting] would confront an in-

dividual employee with the dilemma of relinquishing either his

right to withhold his support of ideological causes to which he ob-

jects or his freedom to maintain his own beliefs without public

disclosure” (footnote omitted). Once it is determined how much

was spent for the activities forecast in the budget that do not come

under one of the permissible headings, all those who made general

objections should automatically be refunded the proper propor-

tion of their funds.

One of plaintiffs’ complaints is not only that they must make

specific objections, but that these objections and their subsequent

adjudication are to be made public: 1986 Rule, § B(9), C(3)(a) Of-

ficial Translation at 20, 22. As is apparent from the earlier discus-

sion, the determination that a certain activity has been deemed

objectionable by the Colegio (or, after a challenge, by the Review

Board) must be made known to all members of the Colegio.

However, the identity of the dissenters and of those who challenge

particular allocations in the budget must not be made public.

While the plaintiffs also argue that the neutrality of the Review

Board is suspect, the court refuses to entertain this argument. The

Review Board is composed of former members of the Supreme

Court of Puerto Rico, and other ex-judges. Such a board meets the

requirements of an “impartial decision-maker,” at least facially

until appropriate evidence is presented to the contrary.

Finally, the government collects the revenues from the judicial

and notarial stamps and remits those revenues to the Bar Associa-

tion without charging costs of administration and processing.

Plaintiffs complain that their tax monies are in this way being used

to support the Colegio. The 1986 Rule limiting expenditures of the

stamp revenues to non-objectionable activities would adequately

protect dissenters’ right not to fund ideological activities.'> If a

'S As a practical matter, by simply substracting the dollar amount of stamp

revenues from the revenues in the budget and an equal amount ef permissible ex-

penditures from the expenses side of the budget, before calculating the percentage

of dues that must be refunded or escrowed, the Colegio can ensure that none of the

stamp monies are spent on objectionable activities. We assume, of course, that ob-

jectionable activities can be funded in toto with the annual dues of non-objecting

members, without making use of any income proceeding from dissenters’ pockets,

either through stamps or dues..

‘

%

A-69

future rule is approved that complies with the principles stated

so far, it would also include such a limitation, and stamp ex-

penses would not pose a problem. If, on the other hand, no

such rule is forthcoming, plaintiffs’ position with respect to the

tax monies spent on stamps will be radically altered. In this

latter posture, as set forth below, plaintiffs would have no

standing to challenge government spending: to collect the

stamp revenues, ff

Once the compulsory bar and stamp affixation schemes are

held unconstitutional, they become essentially voluntary.

Plaintiffs, as objectors, would presumably choose not to pay

membership dues or purchase legal or notarial stamps. Once

they make this choise, their only injury, and they admit as

much in their ‘post-trial memorandum, is the generalized in-

jury suffered by all taxpayers a fraction of whose contributions

are used to support this program. To claim relief, therefore,

they must, assert taxpayer standing.

These plaintiffs do not meet, however, any of the requisites

for taxpayer standing. First, they challenge not a spending

- program, but the incidental expenses of regulating the Bar

Association. Compare, Flast v. Cohen, 392 U.S. 83, 102-03

(1968) (“It will not be sufficient to allege an’ cidental expen-

diture of tax funds in the administration { an essentially

regulatory statute.””) Second, United States v 2ichardson, 418

U.S. 166 (1974), and Schlesinger v. Reservisis’ Committee to

Stop the War, 418 U.S. 208 (1974) “make it clear that a direct

injury, and not merely a general interest common ‘to all

members of the public, is required for standing.” C. Wrights.

Law of Federal Courts, 67 (4th Ed. 1983). Without further

analysis, we conclude plaintiffs lack standing to challenge the

use of tax money to collect and transfer to the Colegio the

revenues from stamps.

-A separate word is yet in order about amp revenues, as op-

posed to the expenses incurred by the Se_ retary of the Treasury

in collecting those revenues. The Bar «association argues that

~

A-70

the stamp issue is moot because of the Puerto Rico Court's ear-

marking of stamp proceeds. The Court: also notes Colegio

Resolution No. 1 (September 3, 1983), designating stamp) pro-

ceeds to the purchase of attorney life insurance. Under the

terms of this order, however, membership in the Bar becomes

voluntary, and the Bar is under no constitutional compulsion

to limit its activities in any way. No guarantee exists,

therefore, that use of the stamp money will be curtailed toa

particular kind of activity.

Faced with the same argument, the Supreme Court rejected

it: “It is clear ‘that voluntary cessation of allegedly illegal con-

duct does not moot a case.’ Chicago Teachers Union v. Hud-

son, 475 U.S. 292, 305 n.14 (1986) (quoting, inter alia, United

States v. Concentrated Phosphate Export Ass'n, 393 U.S. 199,

203 (1968)). As here, the defendant in Hudson was “free to

return to his old ways,” and would otherwise be granted “a

powerful weapon against public law enforcement.” Ibid. The

court is not convinced that the Colegio: has “satisflied] the

heavy burden of persuasion which [the Court has] held rests

upon those [making this argument]. United States v. Concen-

trated Phosphate Export Ass'n, 393 U.S. at 203.

Furthermore, and more importantly, the dissenters will ob-

viously choose not to remain members of the Bar. To force

them to pay for part of the members’ life insurance, for exam-

ple, is just another way of compelling support for the Colegio’s

activities. Even though the specific activity for which the

money is earmarked is innoccous, the stamps would, in effect,

be nothing but a levy imposed on dissenting attorneys for the

benefit of those who choose to join the Colegio—now a volun-

tary association free to be political.

In addition, as long as the insurance benefits only members,

earmarking those funds would be nothing more than the book-

keeping trick dismissed by the Supreme Court in Abood v.

Detroit Bd. ef Education, 431 U.S. 209, 237 n.35 (1977). Any

funds from ‘dissenters that relieved the members of even non- .

A-71

political expenses would merely free up additional assets for

use in ideological activities. This kind of support for the Col-

egio must, therefore, be enjoined, until adequate protection

for objecting attorneys is put into place.

V. Conclusion

While all other aspects of the 1986 Rule appear to pass con-

stitutional muster, it is apparent from the shortcomings just

highlighted that the Rule fails to adequately protect dissenters’

rights. In the absence of such protection, or until the Colegio

_ceases all ideological activities not germane to the purposes ex:

- pressed in this opinion, compelled membership in the Colegio

de Abogados is unconstitutional. Therefore, under the present

. circumstances, the Commonwealth cannot continue to make\

membership in the Bar, or its support, through the affixation

of stamps, a precondition to the practice of law.

The court believes, however, that a remedy incorporating

the features of the 1986 Rule not inconsistent with this opinion

and additional safeguards in line with the principles expressed

herein is feasible. The Court therefore will delay the entrance

of judgment in this case for 60 days from the date of this order,

to provide the Commonwealth with time to set in place such a

remedial rule, if it so wishes. If the parties have not presented

the court, before 60 days, with a scheme that meets the

necessary. requirements, the defendants will be prevented

from imposing any negative consequences upon lawyers who

’ fail to pay their dues or affix legal or notarial stamps to any

legal document.

In conclusion the court finds that Sections 3, 4, 10 and 11 of

Law 43, and such part of Section 6 of Law 99 as deals with the

notarial stamp, as well as the analogous provisions of Section

38 of that law, and ali of Law 115, as interpreted, enforced

and applied, are in violation of the basic guarantees of

freedom of expression and association embodied in the First

A-72

Amendment of the Constitution of the United States, and

therefore contravene either the First or the Fourteenth Amen-

ment to that Constitution.'®

The plaintiffs also request an award of damages for past in-

fringements of their rights. Since no additional evidence has

been introduced, the court is forced to come to the same con-

clusion it reached in 1983:

There is no question but that the Colegio’s actions have

caused these. Plaintiffs damages and that the Colegio’s

bad faith qualifies these damages for recovery pursuant to

42 U.S.C: § 1983. The problem, however, lies with a

determination as to the amount to which said Plaintiffs

are entitled. The evidence is too vague for the Court to

establish through anything other than speculation, the

amount of damages suffered by these Plaintiffs. Such con-

jecture would be contrary to good legal practice and is

- thus rejected, In view thereof, Plaintiffs are awarded

nominal damages in the amount of $1.00 each against the

Colegio.

Schneider, 565 F. Supp. 963, 979.

In view of the findings and conclusions set forth above, it is

hereby ORDERED, ADJUDGED AND DECREED, on a

date 60 days from the date of this opinion, and unless the court

at that time orders otherwise: }

(1) That Sections 3, 4, 10 and 11 of Law No. 43 of May

14, 1932, as amended, of the Commonwealth of Puerto

Rico (4 LiP.R.A. 774, 775, 781, 783), as interpreted, en-

forced and applied are hereby declared to be violative of

the First or Fourteenth Amendments to the Constitution

of the United States; %

'* See Examining Board v, Flores de Otero, 426 U.S. 572, 96 S.Ct. 2264,

49 L..Ed.2d 65 (1976).

.

:

7

.~S

A-73

(2) That Section 6 of Law No. 99 of June 27, 1956 of

the Commonwealth of Puerto Rico (4 L.P.R.A. 1006),

comimencing with that part of the second sentence of the

section which reads “and a stamp to be adopted” and

continuing through the end of said section, insofar as it

deals with Bar Association stamps, as interpreted, en-

forced and applied is hereby declared to be violative of

the First or Fourteenth Amendments to the Constitution

of the United States»

(3) That Section 38 of Law No. 99 of June 27, 1956 of .

the Commonwealth of Puerto Rico (4 L.P.R.A. 1038),

where it reads “as well as the proper bar stamps of the

Bar Association of Puerto Rico,” as interpreted, enforced

and applied is hereby declared to be violative of the First

or Fourteenth Amendments to the Constitution of the.

United States, } pe

(4) That, as of the effective date of this order, and until

such time as the Colegio de Abogados de Puerto Rico

ceases to engage in ideological and/or political activism,

or sets in place an adequate protective mechanism in

compliance with the* First Amendment principles ex-

plained herein, all Defendants, except the Justices of the

Supreme Court of Puerto Rico (see In re Justices of

Supreme Court of Puerto Rico, 695 F.2d 17, 23 (Ast Cir.

1982)), their agents, employees, subordinates, and all

persons over whom control may be exercised by said

Defendants are hereby enjoined and prohibited forthwith

from;

(a) Prosecuting, harassing or in any manner taking ac-

tion against any person licensed to practice law, in-

cluding notarial law, for failure to pay directly or in-

directly any due or fee prescribed by any law, regulation,

practice or custam of the Commonwealth of Puerto Rico

or of the Colegio de Abogados de Puerto Rico, that is-in-

tended to fund the Colegio de Abogados;

“s.

(b) From denying fall legal validity to any pleading,

public instrument or deed by reason of the failure of any

person to adhere thereto, and/or cancel therein, any

forensic or notarial stamps; and

(c) From denying or affecting the right of any person,

otherwise duly qualified to practice law and/or engagk in

notarial practice by reason of their failure to pay any due

or fee to the Colegio de Abogados de Puerto Rico, or by

reason of their non-membership in said organization, «

by reason of the failure or refusal of said person to pur-

chase and use, in the relevant pleading or public instru-

-ment, any forensic or notarial stamp:

(5) That the Colegio de Abogados de Puerto Rico pay

the sum of one dollar ($1.00) each to:

(a) Robert E. Schneider

(b) Hector Ramos

(c) Oreste V. Ramos

(d) Jorge F. Romany

(e) Jorge Souss

IT IS SO ORDERED.

At San Juan, Puerto Rico, this March 3, 1988.

(s) JUAN R. TorRUELLA

JUAN R. Torrukuia

U.S. Circuit Judge

ApPpENDIX A

Excerpt of Hearing Before Judge Torruella, July 8, 1987

THE COURT: Before you rest, I would like to say some-

thing for the record. I don’t want any misunderstandings. I

understarid the record in this case to be the evidence that has

been presented before the Court today and at the prior hear-

ing. If it’s not presented before. this Court, it is not evidence

unless I can take judicial notice, of course.

Secondly, there is a stipulation that has been referred to by

A-75

plaintiff that is in the record that reads, “The plaintiffs and

the Colegio stipulate that activities similar in nature to those

undertaken by the Colegio prior to 1983 have continued.”

That is evidence.

I would like also to state for the record that in my op-

nion— whieh should speak for itself, but I would like to be sure

that there are no misunderstandings— I stated on page 97 of ©

575 Federal Supplement

~MR. ANDUZE: 575, your Honor?

THE COURT: Yes, 575 Federal Supplement, at page 97 |

stated, “Furthermore, there is no way of determining from an

accounting standpoint footnote 24, testimony of Juan [Espict},

Colegio auditor, the dollar amount of this support —* talking

about the support for ideological activities “—-except to con-

clude that. from the pervasiveness, scope and breadth of this

type of activity it’s obvious that the backing has been and is

considerable.” |

1 would also like to state for the record

MR. ANDUZE: Excuse me, your, Honor. You were re-

ferring to footnote number what?

THE COURT: Twenty-four. The Court, without any

analysis on my part, reads, “Furthermore* there is no way of

determining from an accounting standpoint the dollar

amount of their support except to conclude that from the per-

vasiveness, scope and breadth have this type of activity it's ob-

vious that the backing has been and is considerable.”

Furthermore, I would like to state for the record— well,

what is in the record Colegio has never presented. any evidence

before this Court before or—at [least] up to now—coneerning

any other activities engaged in by the Colegio.

MR. ANDUZE: What do you mean by “any other ac-

tivities”?

THE COURT: The record is—the only record that f have,

before me is the evidence (hat has been presented up to how. |

have no way of making any findings as to anything except

A-76 ad

what has been presented before me, at the last hearing and at

this hearing.

MR. ANDUZE: Well, your Honor—

THE COURT: Let me finish.

MR. ANDUZE: I am sorry.

THE COURT: Sol am asking you again if you—with what

I have just stated if you have any other evidence to present to

this Court?

MR. ANDUZE: Your Honer, the Co!sgio de Abogados has

requested your Honor to take judicial notice of the June 26,

1986, opinion of the Supreme Court. In said opinion the

Supreme Court makes an extensive analysis of the documen-

tary evidence before that Court and before this Court. It

makes an evaluation of the dollar amount of the activities that

the Supreme Court found that may be ideological in nature or

_ non-germane in nature, and the Supreme Court states very

plainly that they are found to be [de minimus]. I agree with

your Honor that even if they are [de minimus] they might be

substantial.

THE COURT: Don't agree with me, I haven't said they

were [de minimus]. As a matter of fact, I wiil also point out as

part of my statement that the plaintiffs, as | understand at this

stage of proceeding, are challenging the so-called remedy,

they are challenging the validity of t

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