Petition for Writ of Certiorari — Crosetto v. Wisconsin State Bar

(Y) “Tre

06 975 DEC 16 19%

In THE

Supreme Court of the Anited States

OctToBER TERM, 1996

JOHN CROSETTO,

Petitioner,

vs.

STATE BAR OF WISCONSIN,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

AMEDEO GRECO

Counsel of Record for Petitioner

6406 Masthead Drive

Madison, Wisconsin 53705

(608) 233-0017

*

QUESTIONS PRESENTED

Whether an entity, which claims to be an “arm of the

state,” is entitled to sovereign immunity under the

Eleventh Amendment in federal court after dropping

that defense and when a money judgment against it will

not be paid out of the state treasury.

Whether, after a Circuit Court raises a sovereign

immunity defense sua sponte and after a defendant on a

remand raises that defense, a party under Fed. R. Civ. P.

15 can amend a complaint by naming nominal

defendants to preserve subject matter jurisdiction.

Whether, under Keller, a unified bar can:

a. require its members to first submit their constitutional

claims to final and binding arbitration before they can be

heard in federal court;

b. give preclusive effect to any arbitration awards issued

under such an arbitration plan.

PARTIES TO THE PROCEEDING

Petitioner John Crosetto is licensed to practice law in the

State of Wisconsin. He was a plaintiff in the District Court

and appellant in the Court of Appeals. Respondent State Bar

of Wisconsin is a unified bar association headquartered in

Madison, Wisconsin. It was a defendant in the District Court

and an appellee in the Court of Appeals.

None of the parties to this proceeding is a corporation.

iii

TABLE OF CONTENTS

QUESTIONS PRESENTED

PARTIES TO THE PROCEEDING

TABLE OF AUTHORITIES

OPINIONS BELOW

JURISDICTION

CONSTITUTIONAL, STATUTORY, AND RULE

PROVISIONS

STATEMENT OF THE CASE

A. Introduction and Summary

B. Factual Background

1.

2.

6.

LAWPAC

Respondent's Record-Keeping Practices

Respondent's Dues Reduction-Art,iration

Plan

Respondent's Role

Respondent's Prior Representation That It

Is Not A Governmental Entity

Contrary Indicators of Immunity

C. Course of Proceedings Below

4,

5.

iv

TABLE OF CONTENTS (continued)

Nature of the Case

Respondent's Representations That It

Would Not Raise A Sovereign Immunity

Defense

Petitioner's Challenges To The Dues

Reduction-Arbitration Plan

Before the Remand

After the Remand

REASONS FOR GRANTING THE WRIT

I.

IT.

IT.

There Is A Direct Conflict Between The

Seventh Circuit Below And The First, Second,

Third, Fourth, Fifth, Sixth, Eighth, Ninth, And

Eleventh Circuits On Whether A Claimed State

Entity Is Entitled To Sovereign Immunity

Under The Eleventh Amendment When A

Money Judgment Against It Does Not Come

From The State Treasury

This Court Has Granted Certiorari And Now

Has Pending Before It A Similar Sovereign

Immunity Question

Fairness And Justice Dictate That Petitioner's

Prevailing Party Claim Should Not Be

Dismissed Because Of The Seventh Circuit's

Decision Which Prohibited Petitioner From

Adding Nominal Defendants To The Complaint

To Counter Respondent's Lack Of Subject

Matter Jurisdiction Claim

15

17

23

24

Vv

TABLE OF CONTED >.5 (continued) Page

IV. The Courts Below Clearly Erred In Not 27

Addressing The Merits Of Petitioner’s Claims

Which Were First Raised In 1992 And Which

Are Covered By The Pretrial Order

CONCLUSION 30

INDEX TO APPENDIX

Appendix A

Judgment Order of United States Court of

Appeals for the Seventh Circuit Dated September

err rr ors mr cs het fee la-2a

Appendix B

Order of the United States District Court for the

Northern District of Illinois, Western Division,

{sic] Dated December 15,1995 ......---+++> 3a-16a

Appendix C

Order of the United States District Court for the

Northern District of Illinois, Western Division,

[sic] Dated May 1, 1995 .....--+---eeeeeeees 17a-21la

Appendix D

Judgment of the United States Court of Appeals

for the Seventh Circuit Dated December 20, 1993 22a-40a

Appendix E

Constitutional and Statutory Provisions ........ 41a-42a

vi

TABLE OF CONTENTS (continued) Page

Appendix F

Wisconsin Supreme Court Rule 10.03(5)(b)

(1992) TETERERULELEEUEUE ETE 43a-44a

Appendix G

se a INE EAM ACER i eae RC TAI ee NEI AS HBP

vii

TABLE OF AUTHORITIES

Cases: Page

Christy v. Pennsylvania Tumpike Com'n, 54 F.3d.

1140 (3rd Cir. 1993), cert. denied, 116 S.Ct. 340

(IDOE). cs cveccccescccecen de ommet i gmerms>® * 19

ON os. 0 ognnteee en ceee eee ngeh ss HCAS 48s" 1]

inc ackeceecccuscegevevereryerveyert' 11

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

Cir. 1993), rehearing and suggestion for rehearing

denied, (1994), cert. denied, _ U.S. __, 114 God

2138, 128 L.Ed. 2d. 867 (1994) .---- seer rere passim

Delahoussaye v. City of New Iberia, 937 F.2d. 144

(Stl Cle, 1991)... once seve rsenerercseccetsers 20

Doe v. Lawrence Livermore Nat. Laboratory, 65 F.3d.

771 (9th Cir. 1995), cert. granted, 64 U.S.L.W. 3837

(U.S. June 17, 1996) (No. 95-1694) ..-----+++++> 21, 23

Esparza v. Valdez, 862 F.2d. 788 (10th Cir. 1988) ... 18

Ex parte Young, 209 USS. 123 (1908) ....----+->: 14

Felder v. Casey, 487 U.S. 131 (1988) ..-- +--+ +++°> 27

Foman v. Davis, 371 U.S. 178 (1962) .----++--+++> 24, 25

Gray v. Laws, 51 F.3d. 426 (4th Cir. 1995) ....---- 19

Vili

TABLE OF AUTHORITIES—Continued Page

Hadley v. North Arkansas Community Technical

College, 76 F.3d. 1437 (8th Cir. 1996), petition for

cert. filed, 65 U.S.L.W. 3054 (U.S. June 24, 1996)

keh nn ETRE TEE er eee ee een 20

Harter v. C. D. Vernon, 1996 U.S.L.W. 673953 (4th

Cir.) (Nov. 22, cn MEET TE EUR PE OT ol aD ae 19, 20

Hess v. Port Auth. Trans-Hudson Corp., 115 S.Ct.

uh cm REL RE TT TREE eT Cae passim

Hutsell v. Sayre, 5 F.3d. 996 (6th Cir. 1993) cert.

denied, 114 S.Ct. 1071 (1994) ................. 20

Ingraham v. Wright, 498 F.2d. 248, 252 (Sth Cir.

ite: METER EET POE ET Py 5 Sa ae 26

Jackson v. Georgia Dept. of Ti ransp., 16 F.3d. 1573

(eee BOE eh thew ccs eao uke 21

Keller v. State Bar of California, 496 U.S. 1 (1990) .. 27,30

Mancuso v. New York State Thruway Authority, 86

F.3d. 239 (2nd Cir. 1996), cert. denied, (Nov. 18,

ites vtsatboach xc. Mee eT Oa 18, 19

McDonald v. Board of Miss. Levee Comm ‘rs, 832

F.2d. 901 (Sth Cir. BOOED) 8 E50 nik Por bet RS 20

Metcalf & Eddy v. P.R. Aqueduct and Sewer

Authority, 991 F.2d. 935 (1st Cir. Rae 18

Mullaney v. Anderson, 342 U.S. 415 SUE becite vas 26

Lea we we

-

;

|

:

:

:

;

ix

TABLE OF AUTHORITIES—Continued Page

Patsy v. Florida Board of Regents, 457 U.S. 496

(1982)... cc cccecccecncccvresccccccesssess 27

Ruehman v. Sheahan, 34 F.3d. 525 (7th Cir. 1994)... 17

Seminole Tribe of Florida v. Florida, 116 S.Ct. 1114

¢ 1) ) passim

Teachers v. Hudson, 475 U.S. 292 (1986) .......-: 27

Thiel v. State Bar of Wisconsin, 94 F.3d. 399, (7th

CW. TVG) ccc cc ccncrcccsvcsccccevescceess 14-15,

17-18

CONSTITUTIONAL, STATUTORY,

AND RULE PROVISIONS

is fe SS ee rrr reer eee ee 22

U.S. Const. amend I... ccc cece ccc ccecees 2

US. Const. amend XI... 0... cece cece ce eccces passim

U.S. Const. amend XIV ........cccccceccsvees 2

28 US.C. $ 1254 (1) 2... cccccccccccrvcvcceces 2

MERI ET, BIGED fc cccccvcdcsdceredvauseceds 9

28 U.S.C. § 1343(a)(3) . 0. eee eee eee eerie 9

Wisconsin Supreme Court Rule 10.03(5)(b) (1992) . passim

State Bar Bylaw Article I, Section 5 (1992) ....... 11, 27

x

TABLE OF AUTHORITIES—Continued Page

MISCELLANEOUS

Stevens, Is Justice Irrelevant , 87 Nw. U.L. Rev.

EESk, ERDOREae COPED) (0 000s che Vevey cmennthes< 15

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1996

No. 96 ___

John Crosetto, Petitioner

VS.

State Bar of Wisconsin, Respondent

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioner John Crosetto respectfully petitions this Court for a

writ of certiorari to review a judgment of the United States

Court of Appeals for the Seventh Circuit in the above-

captioned case.

2

OPINIONS BELOW

The , Opinion of the Court of Appeals is unreported. App. at

la-2a.! The District Court's decisions granting summary

judgment (App. at 3a-16a) and denying Petitioner's motion to

supplement the complaint (App. at 17a-21a) are unreported.

The prior opinion of the Court of Appeals ordering the remand

is reported at 12 F.3d. 1396. App. 22a-40a.

JURISDICTION

The judgment of the Court of Appeals was entered on

September 17, 1996. App. 1a- 2a.! This Court's jurisdiction is

invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL, STATUTORY,

AND RULE PROVISIONS

The pertinent provisions of the United States Constitution

are the First, Eleventh, and Fourteenth Amendments. The

pertinent provision of the Wisconsin Supreme Court's Rules

is SCR 10.03(5)(b). The pertinent Statutory provision is 42

USS.C. § 1983. All of these siege are set forth in App. at

41a-47a.

STATEMENT OF THE CASE

A. Introduction And Summary

This case is a civil rights action brought by Petitioner John

Crosetto (“Crosetto”) in 1988 against Respondent State Bar of

Wisconsin (“State Bar”) and others. The suit charges that

Respondent has violated his rights under the First and

Fourteenth Amendments by, inter alia, forcing him to

1Al] references to “App.” are to the Appendix contained in the Petition

For Writ Of Certiorari.

ipa sear enone ets

3

financially support certain bar activities; by failing to maintain

constitutionally mandated records; and by maintaining an

unconstitutional dues reduction-arbitration plan. His action

initially named as co-defendants Stephen L. Smay (“Smay”),

Respondent's Executive Director, and the then Justices of the

Wisconsin Supreme Court. The District Court dismissed the

latter as parties and it subsequently entered summary judgment

in favor of Respondent and Smay. The Seventh Circuit affirmed

the dismissals of Smay and the members of the Wisconsin

Supreme Court, but remanded to the District Court the

question of whether Respondent is a state entity and entitled to

sovereign immunity, a question it raised sua sponte.

Petitioner subsequently filed a Petition For Writ Of

Certiorari with this Court which was denied.

On the remand, Respondent moved for summary judgment

on the ground that it is a state entity and entitled to sovereign

immunity under the Eleventh Amendment to the United States

Constitution and that, as 4 result, the federal court lacked

subject matter jurisdiction.

To counter Respondent's claim of lack of subject matter

jurisdiction, Petitioner moved to supplement the complaint by,

inter alia, naming as nominal defendants the individual

members of Respondent's Board of Governors. The

supplemental complaint also challenged Respondent's dues

reduction-arbitration plan.

The District Court denied Petitioner's motion to supplement

the complaint. It later granted Respondent's motion for

summary judgment on the basis that it is a state entity and thus

entitled to sovereign immunity.

The Seventh Circuit affirmed the District Court's rulings on

the grounds that Petitioner's motion to supplement the

complaint was barred by the terms of its mandate and that

4

Respondent's state agency status had just been recently

resolved by a different Circuit Court panel in other pending

litigation involving Respondent where it was found to be a state

agency. App. la-2a.

B. Factual Background

Petitioner Crosetto practices law in the State of Wisconsin

and is required to belong to Respondent and to financially

support all of its legislative, political, and other bar activities

not covered by a dues reduction plan.” Respondent is a unified

bar which maintains its offices in Madison, Wisconsin.

1. LAWPAC

Petitioner and all other State Bar members at one time were

required to financially support LAWPAC—a political action

committee operated out of Respondent's offices and headed

by one of its employees—which gave financial support to

political candidates. Respondent admits that part of

Petitioner's dues money was spent on LAWPAC before

Respondent severed its relationship. It is impossible to

determine how much of Petitioner's dues money was spent on

LAWPAC because of Respondent's failure to maintain

complete and accurate records for all of LAWPAC's expenses.

R. 510, fs 21, 27-28.9

2Petitioner is not challenging the constitutionality of Wisconsin's

mandatory bar requirement. Petitioner initially raised, but subsequently

dropped, such a challenge. Hence, that issue is not before this Court.

3AJi references to “R. 510” are to Plaintiffs’ Statement Of Undisputed

Facts In Opposition To Defendant's Second Motion For Summary

Judgment. R. 510 refers to the specific parts of the record supporting the

facts asserted therein.

5

A special study committee created by the Wisconsin Supreme

Court found that “The State Bar created LAWPAC .. .:” that

even after its governing structure was changed, LAWPAC “as

a practical matter” still used the State Bar's mailing address

and its files still were kept in the State Bar's Offices; that a

State Bar employee Suggested to Respondent's Board of

Governors that “The expedient of renting a separate postal box

for LAWPAC would tend to conceal the relationship of the Bar

and LAWPAC .. .;” that a separate postal box was then

created; and that “throughout its existence, [a State Bar

employee] has played the principal role in LAWPAC's

activities.” (R. 510) 122. The State Bar employee involved with

LAWPAC admits that all of these findings are correct. (R. 510)

123.

2. Respondent's Record-Keeping Practices

Respondent's employees before the commencement of this

litigation were not required to fill in and file their time

reports—which are used to determine how much money

Respondent spends on given bar activities—until the eleventh

of the following month; i.e., from 11 to 42 days after the fact.

Because of the inadequacy of such records, Respondent's

employees were unable to ascertain how much of Petitioner's

mandatory dues money was spent on particular bar activities

when they were asked to do so at their depositions. (R. 510) Is

5-10.

Respondent changed its time-keeping and record-keeping

procedures several months after Petitioner in 1990 amended the

complaint to raise this issue (R. 127). Hence, time reports are

now filled out daily and filed once a week. Respondent also

changed its auditing practices in 1993 or 1994 after Petitioner

raised this issue and claimed that Respondent's expenses were

not being properly audited. Respondent admits firing one of its

employees in part because of the issues raised in this litigation.

(R. 510) Ws 16-20.

6

3. Respondent's Dues Reduction-Arbitration Plan

Petitioner Crosetto and other State Bar members from July 1,

1992, to the present have been subjected to Respondent's dues

reduction-arbitration plan which: 1), forces members to

arbitrate constitutional challenges to the plan before they can

proceed in federal court; and 2), gives preclusive effect to any

arbitration awards issued thereunder. (R. 510) 9 47.

4. Respondent's Role

Respondent admits that it was not acting as an agent of the

Wisconsin Supreme Court when it created LAWPAC, its

political action committee, and that it did not rely on any rules,

regulations, decisions, or orders of the Wisconsin Supreme

Court when it established its record-keeping, time-keeping, and

accounting practices. (R. 510) fs 14, 30.

Respondent adopted its current Dues Reduction and

Arbitration Policy without prior approval from the Wisconsin

Supreme Court. Furthermore, the Wisconsin Supreme Court

from July 1, 1992, to the present lias never reviewed any of

Respondent's expenses to determine whether they are

constitutionally permissible. (R. 510) Mls 44, 45.

5. Respondent's Prior Representation That It Is Not A

Governmental Entity

At the time Petitioner filed his complaint in May, 1988,

Respondent was involved in a dispute with the United States

Postal Service's Office of Classification and Rate

Administration (“Postal Service”) over revocation of

Respondent's special bulk mailing privileges which enable

Respondent to send mail at a cheaper rate. The Postal Service

initially revoked the permit because it cannot be given to any

governmental agency.

7

Respondent successfully challenged the revocation by stating

in a June 22, 1989, letter from its attorney: “The bar is not a

¢€ tity.” (Emphasis in Original.) (R. 509) That

letter referred to one of Respondent's earlier submissions to

the Postal Service which “cited a decision of the United States

Supreme Court which explicitly held that the bar was not a

governmental entity” and which further stated: “the Supreme

Court noted that the Bar was an independent organization, and

not simply an arm of the Wisconsin Supreme Court.”

The letter also stated that “the Supreme Court had therefore

explicitly held that the Wisconsin bar was not an arm of the

court but a ‘quasipublic’ entity.” The letter added:

“The Bar's pleading went on to characterize the numerous

Operational indicia that underscore the Bar's

independence from the Wisconsin Supreme Court and

every other state governmental entity: (1) the Governors of

the State Bar are elected by members of the state bar

rather than being appointed by state officials or the

legislature; (2) the organization's budget is approved by its

governors and not by any state official; (3) the organization

does not receive any funding from the state treasury; and

(4) bar employees do not participate in any of the benefit

plans offered by the State of Wisconsin to its employees.”

Respondent prevailed and retained its bulk mailing privileges

on the basis that it is not a governmental entity.

8

6. Contrary Indicators of Immunity

There are contrary indicators relating to whether Respondent

is an arm of the state.

On the one hand, the Wisconsin Supreme Court has ruled on

various bar related issues and it has supervised some of its

activities. Such indicators are related in the District Court's

decision granting summary judgment. (App. 7a-9a).

On the other hand, Respondent operates as an independent

entity with little or no state control over its activities. Thus, it

conveys real estate and disposes of personal property in its own

name; it holds and disburses its own funds; it is given no

appropriations from the state's general revenues; it has the

independent power to borrow money, to buy and sell bonds,

and to incur other evidence of indebtedness; and its own debts

and expenses are satisfied out of bar dues and revenues from its

various services. (R.510) 1 66.

Respondent's employees are not classified as state

employees and Respondent does not follow any of the various

personnel rules and regulations governing state employment

even though it has never been told by the Wisconsin Supreme

Court that it is free to disregard them. (R. 510) "s 63-64.

Respondent is autonomous in fiscal and budgetary matters

and thus does not follow any of the procedures mandated for

all other state entities, again even though it has never been told

by the Wisconsin Supreme Court that it is free to disregard

those procedures. (R. 510) Is 60-62.

Other indicia showing that Respondent does not operate as

a state entity are too numerous to be recited here. They are

more fully set forth in Petitioner's Statement of Undisputed

Facts In Opposition to Defendant's Second Motion for

Summary Judgment. (R. 510) %s 60-63.

9

C. Course of Proceedings Below

l. Nature of the Case

Petitioner Crosetto and several other State Bar members filed

their action under 42 U.S.C. § 1983 on May 19, 1988, against

Respondent State Bar, its Executive Director, and the

individual members of the Wisconsin Supreme Court.

(Complaint, R. 2)4 The District Court's jurisdiction was based

on 28 U.S.C. § 1343(a)(3).

As amended, the complaint (R127) alleges that Respondent

has violated Petitioner's rights under the First and Fourteenth

Amendments to the United States Constitution by, inter alia,

forcing him to financially support LAWPAC, its political action

committee; by forcing him to Support other bar activities which

are not constitutionally mandated; by maintaining an

unconstitutional dues reduction-arbitration plan; by taking away

his property and liberty without due process of law; and by not

maintaining constitutionally mandated time-keeping, record-

keeping, and auditing practices.

As a remedy, Petitioner seeks declaratory and injunctive

relief and legal money damages of about $1,500-$2,000.°

Petitioner has asked for a jury trial regarding all genuine issues

of disputed fact.

‘Those other plaintiffs are no longer parties to this litigation. For purposes

of clarity, the singular term “Petitioner” is used herein even though several

other plaintiffs originally were part of this action.

Petitioner earlier requested class certification on behalf of himself and all

other similarly situated State Bar members and compensatory and punitive

damages on their behalf. All money claims on behalf of any other State Bar

members were dropped before the District Court and Petitioner has dropped

his request for class certification.

10

Petitioner also contends that he is a prevailing party because

of his success in bringing about major improvements in

Respondent's time-keeping, record-keeping, and auditing

practices—a success which is evidenced by Respondent's

admission that it fired one of its employees in part because of

the abuses uncovered in this litigation. (R. 510) 9 17.

The action was filed in the United States District Court for

the Western District of Wisconsin where it was assigned to

Federal Judge Barbara B. Crabb. She subsequently recused

herself sua sponte because of her membership in the State Bar.

R. 86. Federal Judge Stanley J. Roszkowski of the Northern

District of Illinois was then assigned to the case by special

designation. R. 87. This case has always remained a Western

District of Wisconsin case.

2. Respondent's Representations That It Would Not Raise

A Sovereign Immunity Defense

Respondent on three separate occasions has represented that

it would not assert a sovereign immunity defense. See

Respondent's Response To Plaintiffs‘ Statement Of Material

Undisputed Facts (R. 467) {is 6, 7 and 8.

It first did so at an August 1989 deposition when one of its

attorneys Stated: “To my understanding as I sit here today with

respect to this lawsuit, and only this lawsuit, the issue of state

agency will not be raised.” One of Respondent's other

attorneys represented at a February 1991 status conference

before the Magistrate that Respondent would not raise this

defense at any time in this litigation. The same attorney in a

6The captions of the District Court's Orders (App. 3a, 17a) incorrectly

describe this action as being before the “United States District Court for the

Norther District of Dlinois, Western Division.” The correct title should read

before the “United States District Court for the Westem District of

Wisconsin.”

eee

1]

February 1991 letter to Petitioner's counsel stated: “We do not

believe that the State Bar's Status as a state agency has any

relevance to this litigation.” Id.

3. Petitioner's Challenges To The Dues Reduction-

Arbitration Plan

Petitioner and Respondent in August 1991 entered into a

Pretrial Order which stated, inter alia, that one of the disputed

questions of law to be answered by the Court was: “Is the dues

reduction plan set forth in SCR 10.03(5), and State Bar Bylaws

adopted in response to that rule, constitutional on its face

and/or as applied.” R324, Tab B-2, 9 3.

Pursuant thereto, Petitioner in 1992 moved for injunctive and

declaratory relief on the grounds that SCR 10.03(5) (App. 43a-

44a), was unconstitutional, facially and as applied, because

Respondent's dues reduction-arbitration plan, inter alia: (1),

imposes an unlawful exhaustion requirement which requires

State Bar members to submit their constitutional claims to

arbitration against their will, and (2), contains an unlawful

preclusion requirement.’ (R. 374-375)

4. Before the Remand

The District Court dismissed the individual Justices of the

Wisconsin Supreme Court as named Defendants on November

16, 1990, pursuant to their Motion to Dismiss. 771 F. Supp. 224

(1990).

The magistrate on August 24, 1992, addressed some, but not

all, of Petitioner's constitutional challenges to SCR 10.03(5).

810 F. Supp. 966 (N.D. Ill. 1992). He ruled that some of the

rules and bylaws were facially valid and that Petitioner's

7Petitioner also asserted that the plan is unconstitutional on other grounds.

Petitioner is not raising those challenges in this Proceeding.

12

constitutional challenge to the fee calculation for fiscal year

1993 was not ripe because the calculation had not been

reviewed by an impartial arbitrator. Jd. at 37-44. The magistrate

did not identify or rule on the merits on Petitioner's other

constitutional challenges. His Report and Recommendation also

stated that summary judgment should be granted on behalf of

Respondent and Executive Director Smay.

The District Court on October 22, 1992, denied Petitioner's

motion for declaratory relief on the ground that it was “moot.”

R. 384. At the same time, it adopted the Magistrate's Report

and Recommendation and granted summary judgment.

On appeal, Petitioner asserted before the Seventh Circuit, as

he did before the District Court, that he was entitled to

injunctive and declaratory relief because Res, ondent's July 1,

1992, dues reduction plan was unconstitutionai for the reasons

set forth at p. 11, ante. Respondent maintained that the pian

was constitutional and stated that it had recently been

amended, effective July 1, 1993, so that “it more closely follows.

the language of Ke Ns

The Seventh Circuit denied injunctive and declaratory relief

without addressing these specific claims. It also affirmed the

dismissals of Smay and the Justices of the Wisconsin Supreme

Court, but raised sua sponte the question of whether

Respondent is a state entity and entitled to sovereign immunity

under the Eleventh Amendment. App. at 32a, n. 10.

It remanded that issue and stated that the District Court

“should consider the extent of control exercised over the Bar by

the Wisconsin Supreme Court or the state at large” and that it

also should decide whether “the Bar was acting as the agent of

8Brief of Defendants-Appellees State Bar of Wisconsin and Stephen L.

Smay to the Court of Appeals for the Seventh Circuit, pp. 32-33, n. 16.

13

the Court when it promulgated the rules in question.” App. at

33a.

It added: “Also relevant is whether a judgment against the

State Bar would be ultimately be paid by the state treasury.” Id.

But, it cautioned: “We hasten to note, however, that even when

there is no risk to the state treasury, the state is immune when

sued in its own name” and that:

“Thus, even without any impact on the state's treasury,

the district court must consider whether the Bar occupies

the position of a public agency or Official, necessarily

forbidding any suit in federal court.” App. at 34a.

The Seventh Circuit also Suggested that the District Court

consider whether Respondent waived any sovereign immunity

defense when its attorneys repeatedly stated that this defense

would not be raised. App. at 34a, n. 11.

Petitioner then filed a Petition For Writ Of Certiorari with

this Court seeking review over (1), the dismissal of Petitioner's

motion for declaratory relief; (2), the dismissal of the Wisconsin

Supreme Court Justices as named defendants; (3), whether

Respondent's Executive Director was entitled to qualified

immunity; and (4), whether Respondent was barred from raising

a sovereign immunity defense. Petition, p. i.

Respondent opposed the petition on the grounds that the

Seventh Circuit had properly: (1) remanded this matter for a

determination of whether subject matter jurisdiction extends to

claims against Respondent; (2), determined that Executive

Director Smay was entitled to qualified immunity; and (3),

dismissed Petitioner's motion for declaratory relief. Brief in

Opposition, p. i.

The Petition For A Writ Of Certiorari was denied. 114 S.Ct.

2138 (1994).

14

5. After the Remand

Respondent on August 25, 1994, moved for summary

judgment on the ground, inter alia, that it is a state agency; that

it is entitled to sovereign immunity; and that the federal courts

thus lack subject matter jurisdiction. (R. 434)

In response to that defense, Petitioner on February 28, 1995,

moved to supplement the complaint by naming as nominal

defendants the individual members of Respondent's Board of

Governors—who were then nominal defendants in Thiel v. State

Bar of Wisconsin, 94 F.3d. 399 (71h Cir. 1996)—and by seeking

equitable relief against them pursuant to Ex parte Young, 209

U.S. 123 (1908). (R. 458)

The proposed supplemental complaint also claimed that

Respondent's dues reduction-arbitration plan was

unconstitutional for the reasons set forth at p. 11, ante. (R. 458)

Ws 191-192.

The proposed complaint also stated that Petitioner would

drop all money claims if his constitutional challenges were

addressed on the merits and if his prevailing party claims were

submitted to a jury. (R. 458) 7G.

The District Court on May 1, 1995, denied the motion on the

grounds that it would add 46 new parties (i.e., the members of

Respondent's Board of Governors); that it would add a

“completely new claim that is dissimilar to the issues remaining,

thus expanding the scope of this lawsuit;” that this would

require “significant additional preparation on the part of the

defendant, and would impose a greater burden on this court;

and that Petitioner's challenges to the dues reduction plan

“were not appropriately a part of this lawsuit.” App. 19a-20a.

It therefore stated that Petitioner should intervene in Thiel,

which was then pending in the Western District of Wisconsin,

if he wanted his constitutional challenges heard, 20a. In doing

15

so, the District Court did not address, or even mention, that

Petitioner would drop all money claims if the merits of his

constitutional challenges were addressed.

Petitioner on March 3, 1995, moved to strike Respondent's

sovereign immunity defense and he on March 13, 1995, moved

for partial summary judgment on whether Respondent had

waived that defense after its attomeys repeatedly had dropped

it. (R. 460, 462)

The District Court on December 15, 1995, granted

Respondent's motion for Summary judgment on the ground

that it is a state entity and hence entitled to sovereign

immunity, an issue it found had not been waived. App. 3a-16a.

The Seventh Circuit on September 17, 1996, summarily

affirmed the District Court's dismissal. App. 1a-2a It ruled that

Respondent just recently had been found to be a state entity by

another Circuit Court panel in Thiel. It affirmed the dismissal

of Petitioner's complaint amendment because: “Amendment

would have been inconsistent with our mandate, which required

the resolution of one specific issue.” App. 2a.

REASONS FOR GRANTING THE WRIT

“Is Justice Irrelevant ”

Justice Stevens has posed this question in addressing the

doctrine governing sovereign immunity under the Eleventh

Amendment. Stevens, Is Justice Irrelevant Nw. ULL. Rev. 1121,

1124-1125 (1993).

That also is the same question posed here because Petitioner

has spent over eight years in the federal courts, during which

time one procedural barrier after another has been erected to

avoid ruling on the merits of his claims and his status as a

prevailing party.

16

Respondent's resurrected sovereign immunity defense is the

last and, without this Court's review, final barrier. Respondent

has raised this defense even after stating on three separate

occasions that it would not do so and even after representing to

the Postal Service: “The bar is not a governmental entity.”

(Emphasis in original.)

Petitioner on the remand tried to respond to this resurrected

defense by naming as nominal defendants the individual

members of Respondent's Board of Governors in order to

counter Respondent's claim that the federal courts lack subject

matter jurisdiction. The Court of Appeals, however, ruled that

Petitioner's motion to that effect was barred under the terms

of its mandate. App. 2a.

Its ruling runs roughshod over Rule 1's command that the

Federal Rules of Civil Procedure are to be construed “to secure

the just, speedy, and inexpensive determination of every action.”

Kicking Petitioner out of court after eight years and telling him

that he must start anew if he wants his legal rights vindicated at

this late date—merely because nominal defendants have not

been added to this action—represents the very antithesis of this

command and it invites comparison to Jarndyce v. Jarndyce

(Charles Dickens, Bleak House (1853)).

Its ruling also is manifestly unjust because it prevents

Petitioner from being declared a prevailing party because of his

hard earned success in getting Respondent to improve its

woeful record-keeping, time-keeping and auditing

practices—one of the central issues in this litigation. Indeed,

Respondent itself has acknowledged Petitioner's success by

firing one of its employees in part because of the abuses

uncovered here.

But, the issues before this Court are far broader than

Petitioner's individual complaint. The constitutional issues

raised herein—first raised in 1992 before the District Court and

17

then in 1993 before the Seventh Circuit—affect all of

Wisconsin's other 18,000 or so attorneys. In addition, the

Seventh Circuit's decision that payment from the state treasury

is no longer a critical criteria in resolving sovereign immunity

questions is now being applied in all other cases arising within

its jurisdiction.

For the reasons stated below, Petitioner respectfully submits

that this Court should grant review and correct this situation.

Such a review also would show that justice is relevant.

I. There Is A Direct Conflict Between The Seventh Circuit

Below And The First, Second, Third, Fourth, Fifth, Sixth,

Eighth, Ninth, And Eleventh Circuits On Whether A Claimed

State Entity Is Entitled To Sovereign Immunity When A

Judgment Against It Does Not Come From The State

Treasury

The Circuit Courts are deeply split on whether payment from

a State's treasury remains a critical criteria in determining

whether an entity is entitled to sovereign immunity under the

Eleventh Amendment.

The minority view is taken by the Seventh Circuit which ruled

here that sovereign immunity can be granted “even when there

is no risk to the state treasury .. ..” App. at 33a. The District

Court on the remand thus ruled that because Respondent is an

agency of the state under other criteria, “This court need not

consider whether a judgment against the Bar would impact the

state treasury.” App. 9a-10a. The Seventh Circuit summarily

affirmed the District Court's ruling. App. la-2a.

The Seventh Circuit in Ruehman v. Sheahan, 34 F.3d. 525,

528 (7th Cir. 1994) reiterated: “A drain on the state treasury is

not a necessary condition to an affirmative answer” as to

whether an entity is entitled to sovereign immunity under the

Eleventh Amendment. It upheld that principle in Thiel when it

18

stated that its analysis was supported by Seminole Tribe of

Florida v. Florida, 116 S.Ct. 1114, 1124 (1996). The court added:

“we held in Crosetto that the effect on the state treasury

was the least important of the three factors, and would be

irrelevant if the first two [which relate to control and

agency] weigh in favor of Eleventh Amendment immunity.”

94 F.3d. at 401.

The Tenth Circuit in Esparza v. Valdez, 862 F.2d. 788, 795

(10th Cir. 1988), also ruled:

“even if we could find little or no fiscal impact on the state

from plaintiffs‘ suits, the financial impact on the state

does not appear to be the predominant factor in Eleventh

Amendment analysis.”

These rulings are in direct conflict with the majority of other

Circuit Courts which have addressed this issue.

The First Circuit in Metcalf & Eddy v. P. R. Aqueduct and

Sewer Authority, 991 F.2d. 935, 939-940, (1st Cir. 1993), set forth

a sevenfold test for determining whether sovereign immunity

cam be granted, with payment from a state‘s treasury being the

single most important criteria.

The Second Circuit in Mancuso v. New York State Thruway

Authority, 86 F.3d. 239, 293 (2nd Cir. 1996), cert. denied, (Nov.

18, 1996) (No. 96-381) held that payment from a state treasury

was one of the six (6) criteria used to determine whether

sovereign immunity can be granted and added: “The

jurisprudence over how to apply the arm-of-the-state doctrine

is, at best, confused.” Jd. at 293. The court referred to Hess v.

Port Auth. Trans-Hudson Corp., 115 S.Ct. 394, (1994), and

ruled: “Although Hess involved a bi-state entity, we nevertheless

believe that it is the proper starting place for our Eleventh

Amendment inquiry in this case.” Id. at 293. It added:

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19

“The parties suggestion to the contrary notwithstanding,

the Supreme Court's decision in Seminole Tribe v. Florida,

—_— US. __, 116 S. Ct. 1114, 134 L.Ed. 252 (1996), does

not alter our analysis here.” Id. at 293, n. 1.

The Third Circuit uses a three-pronged test for determining

if sovereign immunity can be granted, one of which centers on

whether:

“payment of the judgment would come from the state (this

includes three considerations: whether the payment will

come from the state's treasury, whether the agency has

sufficient funds to satisfy the judgment, and whether the

sovereign has immunized itself from responsibility for the

agency's debts).” Christy v. Pennsylvania Turnpike Com'n,

54 F.3d.1140, 1144 (3rd Cir. 1995), cert. denied, 116 S. Ct.

340 (1995).

The Fourth Circuit in Gray v. Laws, 51 F.3d. 426, 433 (4th

Cir. 1995), reviewed Hess and held:

“a determination that the state treasury will be liable for a

particular judgment is largely, if not wholly, dispositive of

entitlement to Eleventh Amendment immunity in the

single state context, as it is in the multistate context.” 115

S.Ct. at 394.”

More recently, the Fourth Circuit ruled in Harter v. C. D.

Vernon, 1996 U.S.L.W. 673953 (4th Cir.), (Nov. 22, 1996), that

“the most important factor is whether the state treasury will pay

any resulting judgment” and that:

“Hess makes clear that the impact on the state treasury is

generally determinative when the state will not have to pay

for a judgment.” The court rejected Appellant's claim that

Seminole Tribe of Florida dictates a contrary result because:

20

“Seminole Tribe held Congress has no power under Article

Ill oi the Constitution to abrogate the Eleventh

Amendment immunity of a state; the case had nothing to

do with who the Eleventh Amendment applies to.”

The Fifth Circuit has ruled: “the most significant factor in

assessing an entity's status is whether a judgment against it will

be paid with state funds.” McDonald v. Board of Miss. Levee

Comm'rs., 832 F.2d. 901, 907 (Sth Cir. 1987). See also

Delahoussaye v. City of New Iberia, 937 F.2d. 144, 149-150 (Sth

Cir. 1991).

The Sixth Circuit has ruled: “[T]he most important factor in

resolving this question, however, is whether any monetary

judgment would be paid out of the state treasury.” Hutsell v.

Sayre, 5 F.3d. 996, 999 (6th Cir. 1993), cert. denied, 114 S.Ct.

1071 (1994).

The Eighth Circuit in Hadley v. North Ark. Community

Technical College, 76 F.3d. 1437, 1439, (8th Cir. 1996), petition

for cert. filed, 65 U.S.L.W. 3054 (U.S. June 24, 1996) (95-2060)

reviewed Hess and concluded:

“we adhere to the test that we instructed the district court

to apply on remand, which requires that we ‘examine the

particular entity in question and its powers and

characteristics as created by state law to determine whether

the suit is in reality a suit against the state. Courts typically

look at the degree of local autonomy and control and most

importantly whether the funds to pay any award will be

derived from the state treasury’.” (Citations omitted.)

The Ninth Circuit applies a five-part test which centers on

“whether a money judgment would be satisfied out of state

funds,” as it has ruled: “State liability for money judgment is

the single most important factor in determining whether an

entity is an arm of the state.” Doe v. Lawrence Livermore Nat.

21

Laboratory, 65 F.3d. 771, 774 (9th Cir. 1995), cert. granted, 64

U.S.L.W. 3837 (U.S. June 17, 1996) (95-1694).

The Eleventh Circuit in Jackson v. Georgia Dept. of Transp.,

16 F.3d. 1573, 1577, (11th Cir. 1994), cert. denied, 115 S.Ct. 320

(1994), ruled that the “general test” for determining sovereign

immunity:

“is whether the relief sought against the nominal defendant

would in fact operate against the state, especially by

imposing liability damages that must be paid out of the

public fisc.”

The court added: “Moreover, this court has previously

reasoned that Eleventh Amendment immunity applies only if

the judgment must, under all circumstances, be paid out of state

funds.” (Emphasis in original). Jd. at 1577.

This direct conflict between the Seventh Circuit and the

majority of Circuit Courts centers on a fundamental principle

of federalism which goes to the very core of the Eleventh

Amendment; i.e., whether a claimed state entity is entitled to

sovereign immunity when a money judgment against it will not

come out of the state treasury.

Petitioner believes that the majority view adopted by the

Circuit Courts is in accord with Hess where a majority of this

Court (Justices Blackmun, Stevens, Souter, Kennedy, and

Ginsburg, J.J.) ruled that sovereign immunity turns on respect

for a state's sovereignty and whether a judgment will come out

of the state treasury. The majority stated “the impetus for the

Eleventh Amendment” was “the prevention of federal court

judgments that must be paid out of a state treasury” and that:

“Courts of Appeals have recognized the vulnerability of the

State's purse as the most salient factor in Eleventh

Amendment determinations (citations omitted).” 115 S.Ct. at

404.

22

It thus ruled that the proper focus is on losses and debts and

that:

“If the expenditures of the enterprise exceed receipts, is

the State in fact obligated to bear and pay the resulting

indebtedness of the enterprise When the answer is

‘No'—both legally and practically—then the Eleventh

Amendment's core concern is not implicated.” Jd., at 406.

That is the same question presented here. And, like Hess, the

answer is “No” because a money judgment of about $1,500-

$2,000 most certainly will not come out of the state's general

treasury. Respondent has a $500,000 line of credit with its own

bank; about $217,000 in bonds which it purchased; about

$350,594 reserved for its building fund; and unrestricted cash

assets of about $115,194. (R. 127) 144. Hence, Respondent has

more than enough assets under its own name to pay for such a

small judgment.

The Seventh Circuit here cited Seminole Tribe of Florida in

support of its contrary view. App. at 2a. There, the majority

(Rehnquist, CJ., O'Connor, Scalia, Kennedy and Thomas, J.J.)

stated: “the relief sought by a plaintiff suing a State is irrelevant

to the question whether the suit is barred by the Eleventh

Amendment.” 116 S.Ct. at 1124. The majority added: “The

Eleventh Amendment does not exist solely to prevent federal

court judgments that must be paid out of a State's treasury,”

Id. at 1124. The Seventh Circuit apparently assumes these

statements mean that it no longer is necessary to determine

whether a judgment will come out of the state treasury.

However, that conclusion does not necessarily follow.

Seminole Tribe of Florida centered on the Indian Commerce

Clause, U.S. Const. art. 1, § 8, C1.3, and Congress" ability to

regulate it. Hence, the majority there never had to decide

whether Hess, which turned on the Compact Clause, should be

overruled and whether payment from the state treasury remains

23

a needed criteria in determining whether sovereign immunity

can be granted.

Only this Court, then, can clarify how Hess and Seminole

Tribe of Florida are to be interpreted when read together.

Review thus should be granted so that this important

question—which goes to the core of the Eleventh

Amendment—can be answered and thereby bring about the end

of the Circuit Court split which presently exists.

II. This Court Has Granted Certiorari And Now Has Pending

Before It A Similar Sovereign Immunity Question

The need for review is further shown by this Court's grant

of certiorari and holding of oral argument on December 2,

1996, in The Regents of the University of California, et al., v. John

Doe, et al, No. 95-1694, which centers on whether an otherwise

“arm of the state” loses its sovereign immunity if a monetary

judgment is paid by the federal government or other third party,

as Opposed to being paid out of the state treasury.

The facts here are not exactly the same because there is a

dispute whether Respondent is a governmental agency (it after

all has admitted that it is not) and because there is no legal

liability on the part of the State if it is not. In addition, this case

does not involve possible reimbursement from some outside

source such as the federal government. Furthermore, that case

arises in a higher education context and the Court's decision

may be limited to those facts. Hence, there is no guarantee that

the Court's decision there will automatically be applied here.

9Petitioner maintains that the District Court erred in finding that

Respondent had not waived its sovereign immunity defense and that it is an

arm of the state. If review is granted, Petitioner will argue these points in

greater detail.

24

Nevertheless, the two cases are closely connected regarding

the fundamental issue of federalism raised in both proceedings;

i.e., whether sovereign immunity can be granted under the

Eleventh Amendment if a money judgment does not come out

of the state treasury.

This Court therefore should grant review here, just as it has

granted review there.

Ill. Fairness And Justice Dictate That Petitioner's Prevailing

Party Claim Should Not Be Dismissed Because Of The

Seventh Circuit's Decision Which Prohibited Petitioner

From Adding Nominal Defendants To The Complaint To

Counter Respondent's Lack Of Subject Matter Jurisdiction

Claim

The Seventh Circuit ruled that Petitioner was prohibited on

the remand from amending (or supplementing) the complaint

because: “Amendment would have been inconsistent with our

mandate which required the resolution of one specific issue.”

App. 2a,10

This flat-out, ironclad prohibition on any complaint

amendment to counter Respondent's resurrected sovereign

immunity defense, which it initially dropped in 1989, is contrary

to Foman v. Davis 371 U.S. 178, 182 (1962) which held:

“outright refusal to grant the leave without any justifying

reason appearing for the denial is not an exercise of

discretion; it is merely abuse of that discretion and

inconsistent with the spirit of the Federal Rules.”

10The Court also stated that the District Court did not abuse its discretion

in denying the amendment because it was precluded under its mandate. App.

at 2a. However, since the Seventh Circuit ruled that its mandate prohibited

any such amendment, the District Court had no such discretion in the first

place.

25

That is the exact situation here because the Seventh Circuit,

with no explanation whatsoever, precluded Petitioner from

having the merits of his claims addressed only because of the

technicality of not having the individual members of

Respondent's Board of Governors named as nominal

defendants. Those members were nominal parties in Thiel, a

matter over which judicial notice can be taken because the

Certificate of Interest filed in that case lists them all.

Furthermore, their addition as parties would not entail any

additional discovery!! Or expose them to any financial risk

(Petitioner only seeks equitable relief against them). Their

addition as parties thus is a routine, ministerial task.

Hence, “It is too late in the day .. .” for “decisions on the

merits to be avoided on the basis of such mere technicalities”

because:

“The Federal Rules reject the approach that pleading is a

game of skill in which one misstep by counsel may be

decisive to the outcome and accept the principle that the

purpose of pleading is to facilitate a proper decision on the

merits.” Foman v. Davis, 371 U.S. at 181. (citation omitted)

Here, there was no “misstep” by Petitioner's counsel since

he reasonably relied on Respondent's repeated representations

between 1989-1994, set forth at pp. 10-11, ante, that it would

not raise a sovereign immunity defense and that the federal

courts had subject matter jurisdiction. That is why Petitioner in

1995 moved for such an amendment only after Respondent in

1994 resurrected this defense and moved for summary judgment

on that basis.

11Petitioner has repeatedly stated that this record is fully complete

regarding the issues in dispute and that he would not conduct any further

discovery if his amendment were to be granted.

26

The motion also was aimed at ensuring that the federal

courts retain subject matter jurisdiction (which Respondent

never disputed between 1989-1994)-over whether Petitioner is

a prevailing party because of his success in bringing about major

improvements in Respondent's sorry record-keeping, time-

keeping, and auditing practices.

That is why Petitioner has asked that he be allowed to name

nominal defendants to at least carry forward this part of his

case even if his other request for equitable relief is denied. See

Plaintiffs-Appellants' Brief to the Court of Appeals at p. 27, n.

10.

The situation here is almost identical to Mullaney v.

Anderson, 342 U.S. 415, 417 (1952), which held that it was

proper to add parties to counter a defendant's belated claim

that proper parties had not been joined because:

To dismiss the present petition and require the new

plaintiffs to start over in the District Court would entail

needless waste and runs counter to effective judicial

administration--the more so since, with the silent

concurrence of the defendant, the original plaintiffs were

deemed proper parties below. Rule 21 will rarely come

into play at this stage of a litigation. We grant the motion

in view of the special circumstances before us.

Similar “special circumstances” most certainly exist here since

Respondent between 1989-1994 never claimed that proper

parties had not been joined for purposes of subject matter

jurisdiction, an issue it ceded over and over again throughout

that time.

The Seventh Circuit's refusal to allow such a necessary

amendment is also contrary to Ingraham v. Wright, 498 F.2d.

248, 252 (Sth Cir. 1994) where, under like circumstances, the

court ruled that “fairness and efficient judicial administration

27

justify the addition of the individual school board members as

parties ....”

Accordingly, review is needed to correct the manifest

injustice caused by the Seventh Circuit's ruling.

IV. The Courts Below Clearly Erred In Not Addressing The

Merits Of Petitioner's Claims Which Were First Raised In

1992 And Which Are Covered By The Pretrial Order

Petitioner maintains that by virtue of Keller v. State Bar of

California, 496 U.S. 1 (1990), Respondent is clearly prohibited

under 42 U.S.C. 1983 from insisting that Petitioner must

exhaust state remedies by first presenting his constitutional

challenges to arbitration before they can be heard in federal

court. Felder v. Casey, 487 U.S. 131 (1988); Patsy v. Florida

Board of Regents, 457 U.S. 496 (1982).

The plan also is unconstitutional under Keller because it

contains an unlawful preclusion requirement contrary to

Teachers v. Hudson, 475 U.S. 292, 307, n. 1 (1996).

These challenges are covered by the Pretrial Order which

asks: “Is the dues reduction plan set forth in SCR 10.03(5) and

State Bar Bylaws adopted in response to that rule,

constitutional on its face and/or as applied.” (R. 324) Tab B-2,

7 3.

Pursuant thereto, Petitioner in 1992 moved for injunctive and

declaratory relief before the District Court on the grounds,

inter alia, that Respondent's dues reduction, arbitration plan,

which was established under SCR 10.03(5), was

unconstitutional, facially and as applied, for these reasons. (R.

375)

The District Court therefore clearly erred when it stated that

the complaint amendment represented a “completely new claim

that is dissimilar to the issues remaining, thus expanding the

scope of this lawsuit.” App. 19a-20a.

Its error can best be seen by simply comparing Petitioner's

verbatim 1992 claims before the District Court with his

verbatim 1995 amendment. Such a comparison reveals the

following:

Petitioner's 1992

Memorandum In Support Of

Plaintiffs's Objections To The

Magistrate's Report and

Recommendation (R. 375)

(pp. 12-13), stated that the

dues reduction-arbitration

plan is unconstitutional

because:

"1. Defendants have failed

to meet their burden of proof

that all of their chargeable

activities are justified by

compelling state interests

which cannot be achieved

through alternative and less

restrictive means.

2. Defendants have failed

to meet their burden of proof

under Keller, supra, that all of

their chargeable expenses are

‘germane’ to either regulating

the legal profession or

improving the delivery of

legal services.

Petitioner's 1995 Amendment

(R. 458), Is 190-191, states

that “the State Bar's current

dues reduction plan which

was amended effective July 1,

1993, is constitutionally

defective . . . because:

Defendants have fai.J to

meet their burden of proving

that each chargeable activity

used in establishing the size

of its dues reduction is

justified by compelling state

interests which cannot be

supported by alternative and

less restrictive means.

[The plan] does not follow

the ‘guiding standard’ set

forth in Keller . . . (i.¢., that

chargeable expenses must

relate to either regulating the

legal profession or improving

the delivery of legal services.)

;

'

;

:

3. It gives preclusive effect

to any arbitration award

issued under its procedures.

The plan is also

unconstitutional because of

its unconstitutional

exhaustion requirement. For

the law is clear: Civil rights

claimants proceeding under

Section 1983 cannot be

forced to first avail

themselves of state

administrative remedies

before bringing their action

in federal court.

it failed to warn that

objectors seeking arbitration

are expected to waive any de

NnOvo review of the

arbitrator's award because of

its preclusive effect .. .”

29

It gives preclusive effect to

any arbitration awards issued

thereunder.

7. It forces State Bar

members to go to arbitration

before they can bring any of

their constitutional claims in

federal court.

It fails to warn prospective

State Bar objectors

requesting arbitration that by

proceeding under Section

788, Wis. Stats., they may be

waiving their right to obtain

de novo review of any such

award.

This comparison establishes that Petitioner's pending

constitutional challenges have been part of this litigation since

1992 and that their resolution on the merits would not expand

its scope by one iota.

Petitioner in this proceeding, however, is only asking for a

determination relating to those parts of Respondent's plan

relating to arbitration. Those other challenges are not before

the Court.

30

Review therefore is needed to vindicate the rights established

under Keller and the rights of Wisconsin's approximately other

18,000 attorneys who have been subjected to these requirements

since July 1, 1992.

CONCLUSION

For the reasons stated, the petition for a writ of certiorari

should be granted.

Respectfully submitted.

AMEDEO GRECO

Attorney for Petitioner

6406 Masthead Drive

Madison, Wisconsin 53705

(608) 233-0017

DECEMBER 14, 1996

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