Petition for Writ of Certiorari — Air Line Pilots v. Miller

0) FILED

gy. 428 sep -s 109

Orr ive Ue cobs ow ~ avett

No, —————

IN THE

Supreme Court of the United States

OCTOBER TERM, 1997

Arm LINE PILOTS ASSOCIATION,

Petitioner,

Vv.

ROBERT A. MILLER, et ai.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

JERRY D. ANKER

(Counsel of Record)

CLAY WARNER

Air Line Pilots Association

Legal Department

1625 Massachusetts Avenue, N.W.

Washington, D.C. 20036

(202) 797-4087

WILSON - Erzs PrintinG Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

D ETM eo

—

QUESTIONS PRESENTED

1. When nonunion employees wish to challenge the

agency fee they are required to pay under an agency-shop

agreement, must they exhaust the “impartial decision-

maker” procedure mandated by this Court’s decision in

Chicago Teachers Union, Local No. 1 v. Hudson, 475

U.S. 292 (1986) before bringing their claim to court?

2. After an “impartial decisionmaker” has held a full

evidentiary hearing and issued a decision concerning the

calculation of an agency fee, should a court that is sub-

sequently presented with a challenge to that calculation

accept the decisionmaker’s findings of fact if they are not

clearly erroneous, and determine de novo only the issues

of law that are presented?

3. In the absence of any claim of fraud or willful mis-

conduct, should a court accept an audit performed by a

reputable national accounting firm as satisfying the re-

quirement that a union’s agency-fee disclosure statement

be “verifi[ed] by an independent auditor,” Hudson, 475

U.S. at 307 n.18, notwithstanding allegations by nonunion

employees that the audit was not properly conducted?

4. When government regulation directly impacts matters

that are within the scope of a union’s collective bargaining

responsibilities (in this case, on-the-job safety of airline

pilots), is union advocacy with respect to such regulation

an activity that is “germane to collective bargaining,” the

costs of which are properly chargeable to nonmember em-

ployees who are subject to an agency-shop agreement?

(i)

LIST OF PARTIES

The parties before the Court are the same as the parties

in the court below. They are:

Petitioner (appellee below)

Air Line Pilots Association

Respondents (appellants below)

Ted M. Abbott Ramond Dale Compton

Neal E. Alberts Peyton H. Cook, Jr.

Clarence A. Anderson William S. Cook

J. Eric Anderson Marcus Covington, Jr.

J.L. Armstrong James J. Crayton

Donald E. Asay Frederick T. Darvill

David J. Baccitich Gale Charles Davis

Gerda H. Baitis as Charles P. Dawsen

pp ag for Brian Decker

Walter W. Baitis Timothy L. Dermer

R.B. Barnes Joseph H. DeVelis

David Bauer W. David Doiron

Alan G. Blake James V. Dunlap

Dale N. Boschetto John D. Durris

Richard A. Breems James S. Ehmer

David L. Brinton Joseph M. Elder

John C. Brittenhaus Jerry D. Elmore

Robert Brushwyler Bruce E. Elmquist

Jerald C. Burgess Robert D. Engel

G.D. Burson William T. Erwin

Cornelius J. Carney George W. Etter

Alvin W. Chamberlain James T. Ferguson

Maurice Cloutier Roger Ferris

Ferdinand Fletcher

Neil B. Fossum

G.R. Fow

Don L. Fowler

R. Dell Fuller

Alan L. Gaines

Gary Gebo

James A. Gibbons

Patrick M. Glazier

Richard D. Grantham

Nicholas Gravino

Dennis E. Greulich

Gary Guilliat

John F. Gulledge

George S. Haines

Michael T. Hannan

Barry W. Harman

George L. Harmon

Douglas R. Harper

John C. Harrison

James C. Harwood

Harvey L. Hayden

George Hector

John Hemminger

L.R. Hern

Robert W. Hobbs

Harry F. Houdeshel

Willard F. Ice

Lester H. Ideker, Jr.

Dominic M. Insogna

iii

John P. Jenkins

Peter G. Just

Robert Kane

Arthur L. Knowles

Gordon B. Kuntz

Edouard W. Lacroix, Jr.

John L. Lynch

Leslie C. Long

Robert G. Lyon, Jr.

Donald D. MacEachern

Peter E. Martin

Donald E. Massey

Jack B. McBride

Joe C. McDole

William A. McGaw

Michael D. McGibney

Gary R. McHargue

Dane W. McNeil

Charles R. Miller

Dale E. Miller

Robert A. Miller

Einar J. Mogensen

Ronald A. Morin

C. Richard Mcrrow

Robert M. O’Brien, Jr.

Winthrop B. Orgera

Keith E. Parker

Paul E. Paulsen

Dale F. Peel

Joseph A. Peterman

Larry W. Peterson

William W. Peterson

Patrick A. Pettyiohn

James R. Pittman

Thomas J. Prosch

George S. Pupich

John C. Rector

Terril J. Richardson

Charles E. Robinson

Gordon G. Rogers

Lenard A. Rogers

Allan H. Roy

Melvin A. Rozema

James P. Scanlon

Robert P. Scheinblum

N.E. Schulze

Kenneth Shackelford

John M. Sharp

Kerin L. Shaughnessey

Robert K. Shepherd

Gary D. Simmons

David F. Smith

Robert W. Spielman

James Sorley

Dale A. Sticka

Murray V. Stookey

Larry J. Taylor

John S. Thompson

Donald L. Thorn

Richard Tichacek

James A. Tidwell

Michael H. Uhlienhop

Edwin D. Uselmann

Ernesto E. Valadez

John M. Valenzuela

Denis F. Waldron

Michael J. Walton

Robert W. Warner

George B. Waterman

Neal C. Watshon

R. Taft Weaver

M.G. Wilson

Howard C. Wolf, Jr.

Michael N. Wood

H.S. Wright, II

Edward J. Wucik

Warren B. Young

Robert V. Ziminsky

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED q...2..........c.-cccccccccccceeecceeeseess i

og EE ee ee ii

po vi

ET CS 1

ETE EES ES ee 2

CONSTITUTIONAL PROVISION AND STATUTE

i! ee 2

STATEMENT OF THE CASE ......-.....-..-000. eee 3

ALPA’s Policies And Procedures Applicable To

sh laeniriehchged decd thie aecee tied cette neabentiaeate 4

The Arbitration Proceeding In This Case... 5

The Decisions Of The District Court 0... 6

The Court Of Appeals Decision 9

REASONS FOR GRANTING THE WRIT 10

ES EE A SE eS ly Oe Be 23

(v)

vi

TABLE OF AUTHORITIES

CASES: Page

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

a ee 10, 22

Andrews v. Education Ass'n of Cheshire, 829 F.2d

fe ree 15

Bromley v. Michigan Educ. Ass'n, 843 F. Supp.

1147 (E.D. Mich. 1994), rev'd, 82 F.3d 686 (6th

Cir. 1996), cert. denied, —— U.S. ——, 117

—f § 0 0 RRR ee 12, 14

Bromley v. Michigan Educ. Ass'n, 82 F.3d 686,

cert. denied, —— U.S. ——, 117 S. Ct. 682

Ee a ere oe: i. SSS 13

Brotherhood of Ry. Clerks v. Allen, 373 U.S. 113

TEED ctocemennecnmsanstanssnmiediinimermnctpsiiinsinsiiminiinemmens 10, 21

Chicago Teachers Union, Local No. 1 v. Hudson,

OF AEF es passim

Communications Workers v. Beck, 487 U.S. 735

(ETE AAAI LIE ES PRATER RIDE IEE LIS An Weed 10

Crosetto v. Heffernan, 810 F. Supp. 966 (N.D. II.

1992), aff'd in part, vacated in part on other

grounds sub. nom. Crosetto v. State Bar of Wis-

consin, 12 F.3d 1396 (7th Cir. 1993), cert. de-

nied, §11 U.S. 1129 (1994) .............................--—..- 12

Dashiell v. Montgomery Cty., Md., 925 F.2d 750

YQ eee eee 15

Ellis v. Brotherhood of Ry. Clerks, 466 U.S. 435

eS Na ES 10

Ford Motor Co. v. Huffman, 345 U.S. 330 (1953) .. 22

Glickman v. Wileman Bros. & Elliott, Inc., ——

U.S. ——, 117 S. Ct. 2130 (1997) -..................... 21

Gwirtz v. Ohio Educ. Ass'n, 887 F.2d 678 (6th Cir.

1989), cert. denied, 494 U.S. 1080 (1990) _........ 15

Hohe v. Casey, 727 F. Supp. 163 (M.D. Pa. 1989),

aff'd in part, rev'd in part on other grounds, 956

ft FF £ ff 15

Hohe v. Casey, 956 F.2d 399 (3d Cir. 1992) ............ 13

Hudson v. Chicago Teachers Union, Local No. 1,

922 F.2d 1306 (7th Cir.), cert. denied, 501 U.S.

J EF 12

vii

TABLE OF AUTHORITIES—Continued

International Ass'n of Machinists v. Street, 367

FF RERERREE GIT Reenath SS 10, 21

Kidwell v. Transportation Communications Int'l

Union, 946 F.2d 283 (4th Cir. 1991), cert. de-

nied, 603 U.S. 1005 (1992) 2... cnceccccceeeeeee 13

Lancaster v. Air Line Pilots Ass'n, 76 F.3d 1509

I, 10, 12, 13

Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507

ES Ce ee eee eee .....10, 20, 21

Mitchell v. Los Angeles Unified School Dist., 739

F. Supp. 511 (C.D. Cal. 1990) ... 15

Ping v. National Educ. Ass'n, 870 F.2d 1369 (1th

ALR TS AO SS Se ITA 15

Prescott v. 4 > “thaamaticiae 915 F. bireasthhe 1080

(E.D. Cal. 1996) . ET ae bce 15

CONSTITUTION, STATUTES & REGULATIONS:

U.S. Const. First Amendment 0. 2, 10, 11

Railway Labor Act, Section 2 Eleventh, 45 U.S.C.

RE SEN GT ei A RS CN Pa 2-3

ESE ET SE oe 2

28 U.S.C. § 1881 .................... anastasia abiatitociine . 84

28 U.S.C. § 1887 .......................... SEES rea Oe 4

RE ERT STE LARE SRRTO eee 4

S (“ESSEC Gemeee aie meer eee 18

EEE ET A ae Wee 18

SF Ne Se eT 18

ELLE TD 18

Lk 2 8 8 FF eee 19

Te 19

I te 18

RULE:

RF EE a a nae Creme was 14

Supreme Court of the Anited States

OcToBER TERM, 1997

No.

Arr LINE PILOTS ASSOCIATION,

¥. Petitioner,

RoBertT A. MILLER, et al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

Petitioner Air Line Pilots Association respectfully peti-

tions this Court to issue a writ of certiorari to review the

judgment of the United States Court of Appeals for the

District of Columbia Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals is officially reported

at 108 F.3d 1415, and is reprinted in the separately bound

appendix to the petition (App.) at page la. The United

States District Court for the District of Columbia issued

three separate opinions plus an order denying a motion

to amend or alter the judgment, none of which is officially

reported. They are reproduced, respectively, at App. 21a,

2

44a, 62a and 41a. The Amended Opinion and Award *

of Arbitrator Louis Aronin, whose findings of fact were

accepted by the district court, is reprinted at App. 71a.

The arbitrator also issued a Supplemental Opinion and

Award, which is reprinted at App. 158a.

JURISDICTION

The decision of the court of appeals was issued on

March 14, 1997. A timely petition for rehearing and

suggestion for rehearing en banc was denied by the court

of appeals on June 9, 1997. (App. 162a, 164a). This

Court has jurisdiction pursuant to 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION AND STATUTE

INVOLVED

The First Amendment to the United States Constitution

provides in pertinent part:

Congress shall make no law . . . abridging the free-

dom of speech, or of the press; or the right of the

people peaceably to assemble, and to petition the

Government for a redress of grievances.

Section 2 Eleventh of the Railway Labor Act, 45 U.S.C.

§ 152 Eleventh, provides in pertinent part:

Notwithstanding any other provisions of this chap-

ter, or of any other statute or law of the United

States, or Territory thereof, or of any State, any car-

rier or carriers as defined in this chapter and a labor

organization or labor organizations duly designated

and authorized to represent employees in accord-

ance with the requirements of this chapter shall

be permitted—

(a) to make agreements, requiring, as a condition

of continued employment, that within sixty days

1The Amended Opinion and Award was identical to the arbi-

trator’s original Opinion and Award except for nonsubstantive

typographical and editorial corrections.

aN

3

following the beginning of such employment, or the

effective date of such agreements, whichever is the

later, all employees shall become members of the

labor organization representing their craft or class:

Provided, That no such agreement shall require such

condition of employment with respect to employees

to whom membership is not available upon the same

terms and conditions as are generally applicable to

any other member or with respect to employees to

whom membership was denied or terminated for any

reason other than the failure of the employee to

tender the periodic dues, initiation fees, and assess-

ments (not including fines and penalties) uniformly

required as a condition of acquiring or retaining

membership.

STATEMENT OF THE CASE

Petitioner Air Line Pilots Association (ALPA) is a

labor organization that represents the pilots employed by

most U.S. commercial air carriers, including Delta Air

Lines, Inc. In November 1991, ALPA and Delta negoti-

ated several amendments to their existing collective bar-

gaining agreement, including an “agency shop” provision.

This provision requires all represented pilots who choose

not to become or remain members of ALPA to pay a

“service charge” to ALPA in an amount equal to ALPA’s

dues and certain assessments. ALPA has similar agree-

ments with most other airlines with which it bargains.

Respondents, who are pilots employed by Delta, brought

this actiou in December 1991 to enjoin implementation

of the agency-shop agreement.* The jurisdiction of the

district court was invoked on the basis of 28 U.S.C.

2 The original complaint was filed by five pilots, only three of

whom remain in the case as respondents before this Court. One of

the original plaintiffs, Donald Pedrazzini, voluntarily withdrew

from the case while it was still pending in the district court.

Another, Bruce R. Booher, was dismissed by the district court be-

cause he was an ALPA member, and he ultimately withdrew from

the appeal. The other respondents are 150 nonmember pilots (one

4

$§ 1331 and 1337, and 29 U.S.C. $412. The original

complaint alleged seven separate grounds on which re-

spondents claimed the agreement was unlawful under

federal statutory and constitutional law, and a subsequent

amendment to the complaint added two more grounds.

The district court, in three separate decisions (App. 21a,

44a, 62a), dismissed all of respondents’ claims. Most of

those claims were abandoned on appeal.

Only two of the claims raised in the complaint remain

at issue: (1) the claim that ALPA does not properly

calculate the percentage of its expenses that are germane

to collective bargaining and therefore chargeable to object-

ing agency-fee payers under applicable decisions of this

Court, and (2) the claim that ALPA’s independent audi-

tors, Price Waterhouse, did not properly audit ALPA’s

1992 “Statement of Germane and Nongermane Expenses,”

which ALPA issues each year in compliance with the

disclosure requirements imposed by this Court’s decision

in Chicago Teachers Union, Local No. 1 v. Hudson, 475

U.S. 292 (1986). The first, second, and fourth questions

presented in this petition relate to the first of these claims;

the third question relates to the second claim.

ALPA’s Policies And Procedures Applicable To Agency Fees

ALPA has adopted written “Policies and Procedures

Applicable to Agency Fees” designed to ensure that no

nonmember’s agency fees are used, over his objection,

for any purpose not germane to collective bargaining.

These Policies and Procedures:

(1) inform nonmembers how to notify ALPA if they

have an objection to paying for nongermane activities;

(2) require ALPA to prepare and distribute each year

to all nonmembers paying agency fees a “Statement of

of whom is now deceased and represented by his executor) who

were permitted to intervene by the district court and who partici-

pated in the appeal.

5

Germane and Nongermane Expenses” (SGNE), audited

by ALPA’s independent auditors, disclosing “in reason-

able detail, the year’s expenditures, segregating those that

were germane to collective bargaining from those that

‘were not”;

(3) provide that all agency-fee payers who submit a

written objection will receive an appropriate dues reduc-

tion, rebate, or credit, based on the percentage of ALPA’s

expenses that the SGNE shows were used for purposes not

germane to collective bargaining; and

(4) provide an arbitration procedure by which an

objector may challenge ALPA’s calculation of the dues

reduction or rebate. The selection of the arbitrator, and

the procedures of the arbitration, are governed by the

American Arbitration Association Rules for Determination

of Union Fees.

The Arbitration Proceeding In This Case

The first year that respondents were required to pay

an agency fee pursuant to the Delta agency-shop agree-

ment was 1992. The SGNE for that year was issued in

1993, after ALPA’s 1992 books had been closed and

audited, and while this lawsuit was already pending. It

showed that 19 percent of ALPA’s expenses in 1992

were not germane to collective bargaining. (App. 120a).

One hundred seventy-four pilots, including many (but

not all) of the respondents, requested arbitration of the

1992 calculation as reflected in the SGNE. The arbi-

tration hearing occurred over three days, during which

both oral testimony and documentary evidence were pre-

sented. Respondents’ counsel objected to the arbitration

but entered a “conditional” appearance on behalf of all

the plaintiffs in this case and participated actively in the

proceeding, challenging ALPA’s record-keeping and fee

calculation on numerous grounds. After the close of the

hearing, both sides submitted comprehensive written briefs.

6

The arbitrator upheld ALPA’s computation of germane

and nongermane expenses for 1992 in all but four respects.

He directed ALPA to reallocate expenses attributable to

those four items from germane to nongermane, and ALPA

did so. The reallocations resulted in an increase in the

nongermane percentage for 1992 from 19 to 20.49 per-

cent. The arbitrator approved this recalculation in his

Supplemental Opinion and Award. (App. 158a-161a).

With respect to issues relevant to this petition, the

arbitrator ruled as follows. First, despite the “conditional”

appearance of plaintiffs’ counsel, only those pilots who

had submitted timely requests for arbitration prior to the

hearing were entitled to be parties to the arbitration pro-

ceeding. (App. 73a-75a). Second, ALPA’s expenditures

to promote air safety are germane to collective bargain-

ing, and are not ideological in character. They are there-

fore properly chargeable to agency-fee objectors. (App.

96a-108a).

The Decisions Of The District Court

As noted above, the district court issued three separate

decisions concerning the merits of this case. Its first deci-

sion, issued on August 2, 1993, granted ALPA’s motion

for summary judgment with respect to most of respond-

ents’ claims but denied the motion with respect to others,

including the claim that ALPA improperly charged agency-

fee payers for costs that were not germane to collective

bargaining. (App. 62a-70a). The denial was “without

prejudice to renewal following further proceedings, includ-

ing the additional round of discovery.” (App. 70a). In

separate orders issued on ‘he same date, the court (a)

allowed respondents to amend their complaint by adding,

inter alia, the claim that ALPA’s SGNE was not properly

audited, and (b) granted respondents’ motion to reopen

discovery.

The second decision was issued on April 28, 1995, after

the new round of discovery had closed and ALPA had

7

renewed its motion for summary judgment with respect to

the remaining claims. In that decision, the court disposed

of the claim that the SGNE had not been properly audited.

The court found that the “Report of Independent Audi-

tors” signed by Price Waterhouse, which accompanied the

SGNE, established that the SGNE had been audited, and

concluded that this was sufficient to satisfy the Hudson

requirement of “verification by an independent auditor.”

(App. S5la-52a). However, with respect to plaintiffs’

claim that ALPA did not properly calculate its germane

and nongermane expenses in its 1992 SGNE, the court

requested further briefing concerning what deference, if

any, the court should give to the decision of the arbitrator

and what effect, if any, the arbitration decision should

have on those plaintiffs who were not parties to it. (App.

58a-59a).

The third decision was issued on August 30, 1995,

after the requested briefing. The court held that nonunion

employees who wish to challenge the calculation of their

agency fees must exhaust the “impartial decisionmaker”

procedure mandated by Hudson. Therefore, those of the ~

plaintiffs who were not parties to the arbitration could

not pursue their claims in court. (App. 27a-32a). The

court further held that the proper standard of review of

the arbitration decision would be to “defer to the findings

of fact of the arbitrator unless those findings are clearly

erroneous,” but to “review de novo the arbitrator’s legal

conclusions.” (App. 22a). In justifying these conclu-

sions, the court stated:

The Court concludes that the requirement of exhaus-

tion of arbitral remedies and the standard of review

set forth above give effect to the procedures estab-

lished by the Supreme Court in Hudson and prevent

the situation whereby unions subject to the RLA

would have to defend their agency shop fee calcula-

tions in two separate trials every year—both in an

arbitration proceeding and in a lawsuit brought by

nonmembers who elect not to participate in the

arbitration.

(App. 3la-32a).

The court then reviewed the arbitrator's decision accord-

ing to the standard it had adopted and upheld that decision

in all respects. (App. 32a-39a). With respect to the one

substantive issue that is pertinent here, the germaneness

of ALPA’s air safety activities, the court stated:

Plaintiffs allege that ALPA should have treated

all costs related to air safety activities as nongermane

to collective bargaining. Their main argument with

respect to air safety is that, because ALPA’s safety

activities involve contacts with the FAA and other

government entities, charging nonmembers for such

activities is impermissible. . . . The record shows

that ALPA’s role in air safety includes accident in-

vestigation, the representation of pilots in grievances

before the FAA, involvement in local and regional

air safety committees, and other activities designed

to promote safety. .. . ALPA’s collective bargaining

agreement with the Delta pilots includes safety-related

provisions.

Because the air safety costs are not directly related

to ALPA’s representational duties, the Court must

apply the standards set forth in Lehnert |v. Ferris

Faculty Ass'n, 500 U.S. 507 (1991)] to determine

if those costs are properly chargeable to the union

nonmembers. The Court concludes as a matter of

law that ALPA has met its burden of proving that

the air safety costs have been properly allocated as

germane expenses. Such expenditures are germane

to collective-bargaining activity because they are a

subject of the collective bargaining agreement. Safety

expenditures are justified by the government's vital

policy interest in labor peace and avoiding “free

riders.” Finally, safety expenditures do not signifi-

cantly add to the burdening of free speech. See

Lehnert, 500 U.S. at 519. The air safety expendi-

9

tures are not being used for a political purpose

simply because ALPA has some dealings with the

federal government. The Court can find no constitu-

tional grounds by which a nonmember could object to

being charged for safety costs.

(App. 37a-39a).

The Court Of Appeals Decision

The court of appeals reversed the district court on

three grounds. First, it held that respondents were not

required to exhaust the arbitration procedure, because

they had never agreed to arbitration. Second, it held that,

as a matter of law, any expenses incurred by ALPA in

connection with advocacy before government entities on

issues relating to air safety cannot be charged to agency-

fee objectors. Third, it held that the respondents were

entitled to a trial on their claim that Price Waterhouse

had not conducted a proper audit of the SGNE.

With respect to the exhaustion issue, the court noted

that “[t}he circuits are split as to whether a union, obliged

by federal law to offer Hudson-style arbitration to non-

members challenging the amount of agency fees that they

are charged, is entitled to insist on ‘exhaustion’ before the

dissident employees come to federal court.” (App. 10a).

The court also acknowledged that Justice White’s con-

curring opinion in Hudson had expressed the view that

exhaustion was required. The court concluded, however,

that there was “no /egal basis for forcing into arbitration

a party who never agreed to put his dispute over federal

law to such a process. Nor is there anything in the Hudson

majority opinion that even suggests that the Court thought

it was putting protesting agency shop employees in that

position.” (App. lla, emphasis in original; footnote

omitted ).

With respect to ALPA’s advocacy on safety issues, the

court considered such activity to be “political” in nature

and therefore precisely the kind of activity that dissenters

10

cannot be required to support. The fact that safety is a

matter within the scope of collective bargaining, the court

said, “hardly renders the union’s government relations

expenditures germane.” (App. 14a). Although this Court

had recognized, in Lehnert v. Ferris Faculty Ass'n, 500

U.S. 507, 519-20 (1991), that for unions in the public

sector certain kinds «f lobbying are an integral part of

the collective-bargaimrz process, the court of appeals

concluded that “extension of the Lehnert exception” to

the present situation “would swallow the Lehnert rule.”

(App. 15a).

With respect to the audit issue, the court held that

“{t}he professional adequacy of the Hudson audit is cer-

tainly a proper subject for review by a judge or an

arbitrator.” (App. 17a-18a). Therefore, various criticisms

leveled at the Price Waterhouse audit by an accountant

retained by the respondents raised a factual dispute that

would have to be tried by the district court. (App. 18a-

19a).

REASONS FOR GRANTING THE WRIT

A series of decisions of this Court has imposed on

unions both substantive * and procedural * obligations to

3 See International Ass'n of Machinists v. Street, 367 U.S. 740

(1961); Brotherhood of Ry. Clerks v. Allen, 373 U.S. 113 (1963);

Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) ; Ellis v. Brother-

hood of Ry. Clerks, 466 U.S. 435 (1984) ; Communications Workers

v. Beck, 487 U.S. 735 (1988); Lehnert v. Ferris Faculty Ass'n, 500

U.S. 507 (1991).

*See Chicago Teachers Union, Local No. 1 v. Hudson, supra.

Because the Hudson case involved public employees, the Court's

decision was based on the First Amendment rather than any fed-

eral statute. However, as the court below pointed out (App. 8a),

agency shop agreements negotiated under the Railway Labor Act

have been held to be subject to the same constitutional restrictions

as those in the public sector. See Lancaster v. Air Line Pilots

Ass'n, 76 F.3d 1509, 1519-20 (10th Cir. 1996). Moreover, the

court below held that the same procedural requirements imposed

on public employee unions by the First Amendment would apply to

11

nonmembers who are subject to agency-fee agreements.

These rules have been developed by the Court based on

its of the underlying purposes of the applica-

ble labor statutes and/or the implied imperatives of the

First Amendment. While the Court's decisions in this

area are clear as to some matters, other issues are un-

, causing confusion, conflict, and unnecessary liti-

gation in the lower federal courts. This case presents

several such issues, and the protracted litigation that those

ssinen eat eeciendl ta Gs GA Glide Glee Gaiabeaioates

the need for further clarification by this Court.

L

One issue, in particular, is a subject of squarely con-

flicting decisions among the Circuits. That is the issue

of whether the “impartial decisionmaker” procedure man-

dated by the Hudson decision must be exhausted before a

union’s agency-fee determination can be challenged in

court.

Among the procedural safeguards imposed by Hudson

is a requirement that a union with an agency-shop agree-

ment must provide a mechanism by which nonmembers

may present any objection concerning the calculation of

their agency fee to “an impartial decisionmaker.” 475

U.S. at 307. The majority in that case did not address

the question of whether an objector must exhaust that

procedure before bringing suit in court. The issue was

mentioned only in the concurring opinion of Justice White,

joined by Chief Justice Burger, which stated: “if the union

provides for arbitration and complies with the other re-

quirements specified in our opinion, it should be entitled

to insist that the arbitration procedure be exhausted before

resorting to the courts.” /d. at 311.

As a result of the silence of the main opinion in Hudson,

the lower courts “have had no small difficulty untying the

unions in the private sector under the statutory duty of fair repre-

sentation. (App. 9a-10a).

resolved, ca

12

Gordian knot binding the judicial and nonjudicial pro-

cedures” for resolving agency-fee disputes. Lancaster v.

Air Line Pilots Ass'n, 76 F.3d 1509, 1521 (10th Cir.

1996). Two Circuits, the Seventh and Tenth, have held

that exhaustion is required. The Seventh Circuit, con-

sidering the issue in the Hudson case itself after the remand

from this Court, reasoned as follows:

Were we to accept plaintiffs’ invitation and provide

a hearing and judicial determination of the correct-

ness of the fee, we would in effect render redundant

and irrelevant the requirements that an impartial de-

cisionmaker hear the dispute and that an escrow

account be provided for the amounts reasonably in

dispute while the challenge is pending. The proper

procedure employs each of the prerequisites identi-

fied by the Supreme Court: the fair share notice

provides the basis for a challenge to the fair share

fee assessment; the impartial decisionmaker deter-

mines the correctness of the fee amount; and the

escrow protects the challenger’s funds pending such

a decision. . . . Of course, the impartial decision-

maker's determination is not the final word on the

challenge. /f the decision is adverse to the plaintiffs,

they may subsequently seek review by a federal court.

Hudson v. Chicago Teachers Union, Local No. 1, 922

F.2d 1306, 1314 (7th Cir.), cert. denied, 501 U.S. 1230

(1991) (emphasis in original). Accord: Crosetto v.

Heffernan, 810 F. Supp. 966, 982 (N.D. Ill. 1992), aff'd

in part, vacated in part on other grounds sub nom. Cro-

setto v. State Bar of Wisconsin, 12 F.3d 1396 (7th Cir.

1993), cert. denied, 511 U.S. 1129 (1994). The Tenth

Circuit agreed, pointing out that, unless exhaustion was

required, the impartial-decisionmaker requirement would

be “ ‘largely a waste of time and money,’ ”* and “we would

more often be forced to micromanage the fee calculation

5 Quoting Bromley v. Michigan Educ. Ass'n, 843 F. Supp. 1147,

1153 (E.D. Mich. 1994), rev'd, 82 F.3d 686 (6th Cir. 1996), cert.

denied, U.S. ——, 117 S. Ct. 682 (1997).

13

in every case challenging a union assessment.” Lancaster

v. Air Line Pilots Ass'n, 76 F.3d at 1522.

The District of Columbia Circuit in this case has held

directly to the contrary:

Although we recognize that Justice White raised a

legitimate practical concern directed at the quasi-

legislative scheme that the majority adopted in Hud-

son, we simply see no legal basis for forcing into

arbitration a party who never agreed to put his dis-

pute over federal law to such a process. Nor is there

anything in the Hudson majority opinion that even

suggests that the Court thought it was putting pro-

testing agency shop employees in that position.

(App. lla, emphasis in original; footnote omitted). See

also Bromley v. Michigan Educ. Ass'n, 82 F.3d 686,

691-95 (6th Cir. 1996), cert. denied, US. ——,

117 S. Ct. 682 (1997) (exhaustion cannot be re-

quired); Hohe v. Casey, 956 F.2d 399, 406-09 (3d Cir.

1992) (exhaustion cannot be required as to “constitu-

tional” issues); Kidwell v. Transportation Communications

Int'l Union, 946 F.2d 283, 303 (4th Cir. 1991), cert.

denied, 503 U.S. 1005 (1992) (noting circuit conflict

without deciding the issue).

This conflict urgently requires resolution by this Court.

As a result of the Hudson decision, virtually every union

in the country has adopted an arbitration procedure for

resolving agency-fee disputes. Most unions, like ALPA,

use the services of the American Arbitration Association,

which has adopted “Rules for Impartial Determination of

Union Fees” for this specific purpose. In many unions,

including ALPA, disputes concerning the calculation of

agency fees recur every year, because a new calculation

must be made each year based on that year’s activities

and expenses. Thus, the exhaustion question wil! arise

again and again until it is finally resolved by this Court.

This case presents the perfect opportunity to resolve it.

14

Il.

A corollary issue presented by this case is the degree

of deference, if any, that a court should give the decision

of a Hudson-mandated impartial decisionmaker in an

agency-fee dispute. This issue, also, was left unresolved

by this Court’s decision in Hudson. The Court did say

that “{t}]he arbitrator’s decision would not receive preclu-

sive effect in any subsequent § 1983 action,” 475 U.S. at

308 n.21, but it gave no hint as to whether any deference

short of “preclusive effect” would be appropriate.

The district court in the present case analogized the

role of the impartial decisionmaker required under Hudson

to that of a court-appointed master under Fed. R. Civ. P.

53, whose findings of fact must be accepted by the court

“unless clearly erroneous.” Rule 53(e)(2). All legal

issues, on the other hand, remain subject to determination

de novo. (App. 22a, 31a). The court expressed the view

that applying this standard of review here would

give effect to the procedures established by the Su-

preme Court in Hudson and prevent the situation

whereby unions subject to the RLA would have to

defend their agency shop fee calculations in two sep-

arate trials every year—both in an arbitration pro-

ceeding and in a lawsuit brought by nonmembers who

elect not to participate in the arbitration.

(App. 3la-32a). Another district court relied on similar

reasoning in adopting a deferential standard of review,

but its decision was reversed on appeal. Sce Bromley v.

Michigan Educ. Ass'n, 843 F. Supp. 1147, 1153-54 (E.D.

Mich. 1994), rev'd, 82 F.3d 686 (6th Cir. 1996), cert.

denied, U.S. , 117 S. Ct. 682 (1997).

The court of appeals in the present case, having decided

the exhaustion issue in favor of respondents, found it

unnecessary to decide the standard of review issue. Be-

cause the court found that respondents had submitted to

arbitration only “under protest” and were not required

to do so at all, it concluded that “the parties’ dispute as

15

to the scope of review of the arbitrator's decision is besiae

the point.” (App. 4a). Nevertheless, this Court should

grant review of both questions. If the Court disagrees

with the court of appeals on the issue of exhaustion, the

question of what standard of review applies would have

to be decided. Moreover, the latter question is independ-

ently important, and will continue to recur and cause

confusion and needless litigation until it is finally resolved

by this Court.

IIL.

The third issue presented by this case is whether the

auditing procedures used by an independent accounting

firm in “verifying” the agency-fee disclosure statement

required by Hudson are subject to judicial challenge and

review. Hudson held that potential agency-fee objectors

must be given “sufficient information to gauge the propri-

ety of the union’s fee.” 475 U.S. at 306. The Court

further explained: “The Union need not provide non-

members with an exhaustive and detailed list of all its

expenditures, but adequate disclosure surely would include

the major categories of expenses, as well as verification

by "raat auditor.” Id. at 307 n.18 (emphasis

The Hudson opinion gave no further indication of what

the Court precisely meant by the phrase “verification by

an independent auditor,” and the issue has spawned ex-

tensive litigation in the federal courts.*

* See Andrews v. Education Ass'n of Cheshire, 829 F.2d 225. 240

(2d Cir, 1987); Ping v. National Educ. Ass'n, 870 F.2d 1369. 1374

(7th Cir. 1989); Gwirte v. Ohio Edue. Ass'n, 887 F.2d 678 (6th

Cir. 1989), cert. denied, 494 U.S. 1080 (1990): Dashiell v. Mont.

gomery Cty., Md., 925 F.2d 750, 754-57 (4th Cir. 1991): Hohe v.

Casey, 727 F. Supp. 163, 165-67 (M.D. Pa. 1989), aff'd in part, rev'd

on other grounds, 956 F.2d 399 (3d Cir. 1992): Mitchell v. Los

Angeles Unified School Dist. 739 F. Supp. 511, 514-16 (C.D. Cal,

m4 Legere 7 County of El Dorado, 915 F. Supp. 1080, 1089-90

16

In this case, ALPA’s 1992 SGNE was accompanied by

a “Report of Independent Accountants,” signed by Price

Waterhouse. (App. 118a-119a). The Report certified

that “[w]e have audited the accompanying statement of

germane and nongermane expenses of Air Line Pilots

Association for the year ended December 31, 1992,” and

went on to describe the audit and its result:

We conducted our audit in accordance with generally

accepted auditing standards which require that we

plan and perform the audit to obtain reasonable

assurance about whether this statement is free of

material misstatement. An audit includes examining,

on a test basis, evidence supporting the amounts and

disclosures in the financial statements assessing the

accounting principles used and significant estimates

made by management and evaluating the overall

financial statement presentation. We believe that our

audit provides a reasonable basis for the opinion

expressed below.

* * * *

In our opinion, the aforementioned statements pre-

sent fairly, in all material respects, the germane

and nongermane expenses of the Air Line Pilots Asso-

ciation for the year ended December 31, 1992, based

on the definitions, significant factors, and manage-

ment assumptions referred to above.

(App. 118a-119a).

The district court held that this certification, in itself,

satisfied the “verification” requirement. (App. 51a-52a).

Respondents, however, contended that Price Waterhouse’s

auditing procedures were inadequate, and the court of ap-

peals held that they are entitled to a trial of this issue:

The professional adequacy of the Hudson audit is

certainly a proper subject for review by a judge or

an arbitrator. ALPA would have us hold that, in the

absence of allegations of fraud or willful misconduct,

a court or arbitration panel should not inquire

whether the Hudson audit was properly performed.

17

Although Hudson does not require that every under-

lying record and document be discoverable i object-

ing members’ accounting experts, as [plaintiffs’ ac-

countant] suggests, we disagree that the methodology

of the auditor may not be questioned for anything

but fraud or intentional deception. Hudson did not

stand for the proposition that a rubber stamp by an

accountant stating “this was audited” meets the con-

stitutional minimum it envisioned.

(App. 17a-18a).

The court of appeals’ ruling would require a trial not

merely of the correctness of the data contained in the

SGNE, but also the adequacy of the procedures used by

Price Waterhouse in performing its audit of the SGNE.

At such a trial, both sides would present expert account-

ing testimony concerning the relevant standards and prac-

tices of the accounting profession. The trial court would

then have to choose between the conflicting accountants’

opinions, with no guidance other than this Court's state-

ment that the SGNE must be “verififed] by an independ-

ent auditor.” Hudson, 475 U.S. at 307 n.18.

We doubt that the Hudson Court intended to place the

federal courts in the position of mediating this kind of

dispute between accountants. But whether we are correct

or not, the matter should be clarified by this Court. Given

the frequency of litigation concerning agency fees, the

lower courts should not be required to speculate about

what the Court truly meant by the verification requirement.

IV.

The fourth and final issue in this case is whether union

advocacy before government agencies on matters that

directly impact the working conditions of employees the

union represents should be considered “germane to collec-

tive bargaining” and therefore appropriately chargeable

- a 0 agp or whether, as the court of appeals

: Ivities are “political” i

ae “ political” in nature and therefore

18

The issue arises in this case with respect to ALPA’s

activities in the field of air safety. The promotion of air

safety is a major ALPA goal, and one that ALPA pursues

in a wide variety of ways. ALPA negotiates provisions

in its collective bargaining agreements relating to air safety;

maintains a safety committee at each airline to monitor

airline operations and work with management on safety

issues and problems as they arise; participates in airline

accident investigations conducted by the National Trans-

portation Safety Board; conducts ongoing studies in a

wide range of technical areas relating to air safety and

publishes the results of such studies to the pilots and the

industry; works with aircraft manufacturers to promote

air safety in the design of new aircraft or improvements

in existing aircraft; participates in rulemaking and other

administrative proceedings before government agencies on

matters affecting air safety; and works informally with

government regulators on safety-related issues.

The object of all of ALPA’s safety-related activities is

to protect and enhance the on-the-job safety of the pilots

it represents. ALPA pursues this goal both with the air-

lines and with the government because the pilot’s working

life and environment are controlled by both. For example,

government regulations determine:

—the maximum number of hours a commercial pilot

may be scheduled to fly during any day, week, month, and

year, and the minimum amount of rest he must have

between flight assignments (14 C.F.R. § 121.470 et seq.);

—the specific medical standards that commercial pilots

must meet, and the nature and frequency of the medical

testing they must undergo (id. § 67.1 et seq.);

—the qualifications a pilot must meet to be certified to

fly each particular aircraft type (id. § 61.61 et seq.);

—the frequency and nature of the in-flight proficiency

tests a pilot must pass, including the specific maneuvers

he must perform (id. §§ 61.57-61.58);

19

——the age at which a commercial pilot must retire (id.

§ 121.383(c));

—detailed rules of flight operation, such as minimum

altitudes and speeds, rights of way, communications with

air traffic control, and many other matters relating to the

performance of a pilot's flight duties (id. § 91.101 et seq.).

These are all matters which, in the absence of regula-

tion, would be subject to normal collective bargaining. As

they are actually determined in large measure by govern-

ment regulation, the only way ALPA can effectively repre-

sent the pilots’ interests with respect to such matters is to

advocate those interests both to the appropriate agencies

of government and to the airlines themselves. The airlines

forcefully present their views to the government, and if

ALPA did not do the same the pilots would have no effec-

tive voice in these matters.

. To the extent that ALPA negotiates directly with the

airlines on matters relating to safety, no one disputes that

the costs can be charged to agency-fee payers. The court

of appeals held, however, that when ALPA pursues the

same Safety goals through advocacy before government

agencies, it is engaging in “lobbying” and the costs cannot

be charged to agency-fee objectors:

That the subject of safety is taken up in collective

bargaining hardly renders the union’s government

relations expenditures germane. Under that reason-

ing, union lobbying for increased minimum wage

laws or heightened government regulation of pen-

sions would also be germane. Indeed, if the union’s

argument were played out, virtually all of its political

activities could be connected to collective bargaining;

but the federal courts, including the Supreme Court,

have been particularly chary of treating as germane

union expenditures that touch the political world.

(App. 14a-15a).

20

This holding is in conflict with the approach taken by

this Court in Lehnert v. Ferris Faculty Ass'n, 500 U.S.

507 (1991), in which the issue was the chargeability of

lobbying activities by a union representing public teachers.

Although the Court concluded that the particular lobbying

activities at issue in that case were not sufficiently related

to collective bargaining, it acknowledged that some lobby-

ing activities by a union representing public employees

would be chargeable to agency-fee objectors:

The Court of Appeals determined that unions con-

stitutionally may subsidize lobbying and other polit-

ical activities with dissenters’ fees so long as those

activities are “ ‘pertinent to the duties of the union

as a bargaining representative.” . . . In reaching

this conclusion, the court relied upon the inherently

political nature of salary and other workplace deci-

sions in public employment. “To represent their

members effectively,” the court concluded, “public

sector unions must necessarily concern themselves

not only with negotiations at the bargaining table but

also with advancing their members’ interests in legis-

lative and other ‘political’ arenas.” .. .

This observation is clearly correct. Public-sector

unions often expend considerable resowices in secu-

ring ratification of negotiated agreements by the

proper state or local legislative body. . . . Similarly,

union efforts to acquire appropriations for approved

collective-bargaining agreements often serve as an

indispensable prerequisite to their implementation. . . .

The dual roles of government as employer and policy-

maker in such cases make the analogy between lobby-

ing and collective bargaining in the public sector a

close one.

Id. at 519-20 (citations omitted).

Admittedly, Lehnert involved public employees, whose

lobbying acivities would be aimed directly at the public

agency that controls their wages and working conditions.

But airline pilots, although privately employed, are in

21

essentially the same relationship to the government when

it comes to matters of air safety. From the moment a

pilot reports for duty to the moment he is released, his

entire working environment and his every action on the

job are determined by two sets of interrelated and inter-

dependent rules—those promulgated by the employer and

those promulgated by the government.

The court of appeals argued that if ALPA’s “lobbying”

on safety issues were to be treated as germane to collective

bargaining, “the Lehnert exception would swallow the

Lehnert rule.” (App. 15a). We respectfully disagree.

Many political activities commonly pursued by unions—

for example, supporting candidates for public office or

promoting general legislation dealing with such issues as

medicare, social security, welfare, foreign trade, and the

like—are far removed from collective bargaining, and

therefore are covered by the rule, not the exception.

There is a bright line between such general political activi-

ties, on the one hand, and, on the other, advocacy that

concerns matters that directly impact the working condi-

tions of employees that a union represents. When this

Court has ruled, in prior cases, that costs associated with

“political” activities and “lobbying” cannot be charged to

agency-fee objectors, it was dealing with the former type

of activity, not the latter. See International Ass’n of

Machinists v. Street, 367 U.S. 740, 744 (1961) (funds

used “to finance the campaigns of candidates for federal

and state offices . . . and to promote the propagation of

political and economic doctrines, concepts and ideolo-

gies”); Brotherhood of Ry. Clerks v. Allen, 373 U.S. 113.

117 (1963) (funds used for political and legislative pur-

poses “not reasonably necessary or related to collective

bargaining”). Just last term, the Court characterized this

line of cases as holding that “compelled contributions for

political purposes unrelated to collective bargaining im-

plicated First Amendment interests . . . .” Glickman vy.

Wileman Bros. & Elliott, Inc., US. ——, 117 S. Ct.

2130, 2139 (1997) (emphasis added).

22

It is possible, as the court of appeals pointed out, that

not all pilots will necessarily always agree with ALPA’s

position or tactics with respect to specific regulatory mat-

ters relating to air safety—although respondents in this

case have never expressed any specific disagreement. A

union is not restricted to those actions that are unani-

mously supported by its constituents: “The complete satis-

faction of all who are represented is hardly to be expected.”

Ford Motor Co. v. Huffman, 345 U.S. 330, 338 (1953).

The furtherance of the common cause leaves some

leeway for the leadership of the group. As long as

they act to promote the cause which justified bringing

the group together, the individual cannot withdraw

his financial support merely because he disagrees with

the group’s strategy.

Abood vy. Detroit Bd. of Educ., 431 US, 209, 222-23

(1977) (quoting International Ass'n of Machinists v.

Street, 367 U.S. 745, 778 (1961) (concurring opinion) ).

In short, we believe the court below misconstrued and

misapplied the applicable decisions of this Court in deter-

mining that ALPA’s advocacy before government agencies

concerning issues relating to air safety was not chargeable

to agency-fee objectors. At the very least, there is an

urgent need for clarification by this Court of the criteria

for determining when a union’s advocacy before govern-

ment entities is sufficiently related to its collective bargain-

ing function to be considered “germane to collective

bargaining.”

23

CONCLUSION

For the reasons stated, the writ of certiorari should be

granted.

Respectfully submitted,

JERRY D. ANKER

(Counsel of Record)

CLAY WARNER

Air Line Pilots Association

Legal Department

1625 Massachusetts Avenue, N.W.

Washington, D.C. 20036

(202) 797-4087