Appendix — Crosetto v. Wisconsin State Bar

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APPENDIX A

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted September 16, 1996*

September 17, 1996.

Before

Hon. HARLINGTON WOOD, JR., Circuit Judge

Hon. FRANK H. EASTERBROOK, Circuit Judge

Hon. MICHAEL S. KANNE, Circuit Judge

JOHN CROSETTO, et al., ) Appeal from the

Plaintiffs-Appellants, ) United States

) District Court for the

) Western District of

Nos. 96-1118 & 96-1211 vv. ) Wisconsin.

)

STATE BAR OF WISCONSIN, ) No. 88-C-433

Defendant-Appellee. ) StanleyJ.Roszkowski,

) Judge.

Order

A prior decision, 12 F.3d 1396 (1993), affirmed the bulk of

the district court’s conclusions in this case but remanded a

single issue for reconsideration: "whether the suit against the

Wisconsin State Bar Association is properly considered a suit

against the state qua state." On remand, the district court held

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that the State Bar is indeed part of the state and therefore

dismissed under the eleventh amendment what remained of the

suit.

After the appellate briefing in this case had been completed,

another panel of this court held, in Thiel v. State Bar of

Wisconsin, No. 95-3442 (7th Cir. Sept. 3, 1996), that the State

Bar is part of the state, and that a federal court accordingly

lacks jurisdiction to entertain a suit against it for either

damages or prospective relief. See Seminole Tribe of Florida v.

Florida, 116 S. Ct. 1114, 1124 (1996) ("the relief sought by a

plaintiff suing a State is irrelevant to the question whether the

suit is barred by the Eleventh Amendment”). The decision in

Thiel resolves this case, too, adversely to the appellants.

Only one other matter calls for comment. After we remanded

the case, plaintiffs sought to amend their complaint to drop the

request for damages, to add defendants in order to facilitate

claims under Ex Parte Young, 209 U.S. 123 (1908), and to add

additional theories of liability. The district court denied this

motion for two principal reasons: First, it would fundamentally

alter the litigation many years after its inception; second, it

would make this case a close cousin to Thiel, without good

reason, for the plaintiffs in this case could take advantage of

any victory in Thiel. This decision did not abuse the discretion

a district court possesses Over such matters. Amendment would

have been inconsistent with our mandate, which required the

resolution of one specific issue. And now that Thiel has been

decided--adversely to the plaintiffs on all issues, not just the

eleventh amendment--there is even less reason to go back to

Square One.

AFFIRMED

* Originally scheduled for oral argument, this case was taken

off the calendar and submitted for prompt decision after

another panel released an opinion resolving the principal issue.

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APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

WESTERN DIVISION

JOHN CROSETTO, et al.,

Plaintiffs,

CASE NO. 88 C 433

Vv.

STATE BAR OF WISCONSIN,

Defendant.

ORDER

This matter comes before the court on the defendant's

Motion for Summary Judgment. For the reasons that follow,

defendant’s motion is granted.

Background

In 1988, plaintiffs brought this action pursuant to 42 U.S.C.

§ 1983 against the State Bar of Wisconsin, the Bar’s executive

director, Stephen Smay, and the Justices of the Wisconsin

Supreme Court. They challenged the mandatory bar in

Wisconsin and certain activities conducted by the bar. The

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complaint sought compensatory and punitive damages, as well

as declaratory and injunctive relief. On November 16, 1990, the

claims against the Justices of the Wisconsin Supreme Court

were dismissed. Crosetto v. Hefernan, 771 F. Supp. 224 (W.D.

Wis. 1990).

On October 22, 1992, this court granted the defendants’

motion for summary judgment. The Seventh Circuit affirmed

that order in all respects except one. Crosetto v. State Bar of

Wisconsin, 12 F.3d 1396 (1993). The Court questioned whether

the federal courts had jurisdiction over the State Bar under the

Eleventh Amendment,! and thus did not reach the merits of

the dismissal of the claims for past damages against the bar. Id.

at 1402. The Court stated:

We agree that a suit against a state bar association, as

a general matter, may constitute a suit against the state

for sovereign immunity purposes. Whether the

Iw in the absence of consent a suit in which the state or

one of its agencies or departments is named as the defendant

is proscribed by the Eleventh Amendment.” Papasan v. Allain,

478 U.S. 265, 276 (1986), citing, Pennhurst State School &

Hospital v. Halderman, 465 U.S. 89, 100 (1984). This bar exists

whether the relief sought is legal or equitable. Id.

Sa

Wisconsin State Bar, in particular, is vested with

Sufficient state characteristics to qualify for sovereign

immunity is a factual question, however, that cannot be

answered on the record before us. We therefore vacate

that part of the district court’s decision holding for the

State Bar of Wisconsin, and remand this case for a

determination of the State Bar’s sovereign status.

Id.

The Court went on to say that if after an analysis of the facts,

this court "finds that a suit against the Wisconsin State Bar is

a suit against the State, then unless one of the recognized

exceptions to a state’s sovereign immunity applies here, [the

district court} must dismiss all of Piaintiffs’ claims against the

Wisconsin State Bar for lack of subject matter jurisdiction.” Id.

at 1402-03.

Discussion

A summary judgment motion will be granted only if the

pleadings and supporting documents indicate that there is no

genuine issue of material fact and the moving party is entitled

to judgment as a matter of law. Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 247 (1986); Fitzsimmons v. Best, 528 F.2d

692, 694 (7th Cir. 1976). The dispute of a material fact is

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genuine if the evidence is such that a reasonable jury could

return a verdict for the non-moving party. Anderson, 477 U.S.

at 248. However, the district court is not required to evaluate

every conceivable inference that can be drawn from the

evidence, but only those inferences that are reasonable. Parker

v. Federal Nat’] Mortgage Ass’n, 741 F.2d 975, 980 (7th Cir.

1984).

This court has been directed by the Seventh Circuit to

determine whether the State Bar is an agency of the state of

Wisconsin. In Crosetto, the Court outlined the relevant factors

to be considered in determining the Bar’s sovereign status. 12

F.3d at 1402. First, the court should consider the extent of

control exercised by the Wisconsin Supreme Court over the

Bar. Id. If the Wisconsin Supreme Court had the ultimate

authority to adopt and enforce the Bar’s rules in question, then

a Suit against the Bar challenging those rules would not be that

different than a suit directly against the Supreme Court. Id.

Second, this court should consider whether the Bar has a role

completely defined by the Wisconsin Supreme Court. Id. That

Se ee

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is, “whether the Bar was acting as an agent of the Wisconsin

Supreme Court when it promulgated the rules in question.” Id.

And finally, this court should consider whether a judgment

against the State Bar would ultimately be paid by the state’s

treasury. Id. However, if the first two factors indicate that the

Bar is an agent of the state, then this factor is irrelevant

because the state is immune to suit even where there is no

impact to the state treasury. Id. (citing Zych v. Wrecked Vessel

Believed to be the Lady Elgin, 960 F.2d 665, 669 (7th Cir.

1992); Green v. Mansour, 474 U.S. 64, 72 (1985)).

An analysis of the facts indicates that the Wisconsin Supreme

Court has "ultimate control over the Bar." The Bar was created

by the Court in 1956 pursuant to its constitutionai authority

over the administration of justice. Wis. Const. Art. VII; SCR

10.02(1). See also, Lathrop v Donahue, 10 Wis. 2d 230, 243

(1960). The Court has provided for the organization and

government of the association. SCR 10.01(2). The Court

requires the Bar to include in membership dues the amount

necessary to pay the costs of the Board of Attorneys of

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Professional Responsibility and the continuing legal education

functions of the Board of Bar examiners. SCR 10.03(5)(a). The

Court retains authority over any increase in bar dues. SCR

10.03(5). It limits the use of dues for ideological and political

activities. SCR 10.03(5)(b). It requires the Board of Governors

to procure an annual audit of the Bar’s books. SCR 10.09(1).

The Court sets the deadlines within which members must enroll

and pay dues, and establishes the penalties for nonpayment of

Bar dues. SCR 10.03(2), 10.03(6). The Court establishes the

manner in which the Bar conducts its daily activities, establishes

its governing bodies and offices, and defines their powers,

functions and duties. SCR 10.04-.08. The Court has the ultimate

authority to review amendments to the Bar’s bylaws. SCR

10.05(4)(a)(8). Also, the Wisconsin Supreme Court has the

exclusive, inherent power to take remedial action against the

Bar on sufficient showing that the activities or policies of the

Bar are not in harmony with the objectives of integration or are

otherwise contrary to the public interest. In re Integration of

the Bar, 5 Wis. 2d 618, 92 N.W. 2d 601 (1958). Furthermore,

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under Wis. Stat. § 70.11(1), property owned by the Wisconsin

State Bar is exempt from real and personal property taxation as

property owned by the state, and the Bar also does not pay

Wisconsin income or "sales tax.”

The facts also indicate that the Bar "was acting as an agent

of the Wisconsin Supreme Court when it promulgated the rules

in question." The rule challenged here, SCR 10.03(5)(b),

concems the collection and use of mandatory dues. The Bar’s

authority to collect and use those dues are explicitly conferred

and regulated by Supreme Court orders. The Supreme Court

has the ultimate authority over SCR 10.03(5)(b), and has the

sole authority to amend it. The Court has taken an active role

in limiting the use of Bar dues for legislative, political or

ideological activities.

Finally, because the first two factors compel the conclusion

that the Bar is an agency of the state, this court need not

consider whether a judgment against the Bar would impact the

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state treasury.

As the Court of Appeals noted in its opinion, other federal

courts addressing this issue have found unanimously that state

bars are entitled to sovereign immunity as agencies of the

particular state. Crosetto, 12 F.3d at 1401-02 (citing Lewis v.

Louisiana State Bar Ass’n, 792 F.2d 493 (Sth Cir. 1986); Bishop

2In Crosetto, the Seventh Circuit stated:

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. See Zych v. Wrecked Vessel Believed

to be the Lady Elgin, 960 F.2d 665, 669 (7th Cir. 1992)

(rejecting the notion that an absence of financial impact

on the state is a per se pass from the Eleventh

Amendments purview); see also Green v. Mansour, 474

U.S. 64, 72 (1985). 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. See Lewis, 792 F.2d at 497 (discussing

Bates, 433 U.S. at 361, 97 S.Ct. at 2696; Will v.

Michigan Dept. of State Police, 491 U.S. 58, 71, 109

S.Ct. 2304, 2311 (1989) (Sovereign immunity forbids a

Suit against an individual or entity who occupies the

position of a state office--even if there is no impact on

state funds--just as if the state had been named directly

as a party to the suit).

Crosetto, 12 F.3d at 1402.

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y. State Bar of Texas, 791 F.2d 435 (Sth Cir. 1986); Lupert v.

California State Bar, 761 F.2d 1325 (9th Cir. 1986); Ginter v.

State Bar of Nevada, 625 F.2d 829 (9th Cir. 1980); Doyle v.

Oklahoma, 787 F. Supp. 189 (W.D.Okl. 1992)). See also

Kaimowitz_ v. The Florida Bar, 996 F.2d 1151, 1155 (1993)

("The Eleventh Amendment prohibits actions against state

courts and state bars."). In addition, in a well reasoned and

persuasive opinion, Judge Shabaz of the Western District of

Wisconsin recently held that the Wisconsin State Bar is immune

from suit under the Eleventh Amendment. Thiel v. State Bar of

Wisconsin, 95 C 0103-S.

The plaintiffs contend that even if the defendant is entitled

to sovereign immunity, it has waived that defense. They assert

that under Wisconsin law sovereign immunity is a matter of

personal jurisdiction and thus can be waived by conduct, such

as defending a case on the merits, without authorization from

the state legislature. This argument is clearly misplaced.

Whether or not sovereign immunity is a matter of personal

jurisdiction in the state courts of Wisconsin is irrelevant. Under

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Hans and its progeny, sovereign immunity deprives federal

courts of subject matter jurisdiction over a case. Hans v.

Louisiana, 134 U.S. 1 (1890). As the Seventh Circuit stated in

Crosetto, if this court finds that the Bar is an agent of the state,

then "all plaintiffs’ claims against the Wisconsin State Bar" must

be dismissed "for lack of subject matter jurisdiction.” 12 F.3d at

1402-03 (emphasis added).

Sovereign immunity can be waived only under limited

circumstances. Congress may abrogate the States’ sovereign

immunity in certain cases, or states may consent to suit in

federal court. Port Auth. Trans-Hudson v. Feeney, 495 U.S.

299, 304 (1990). State officials can waive a state’s sovereign

immunity, but only if they are specifically authorized to do so

by the state’s constitution, statutes, or decisions. Estate of

Porter _v. State of Illinois, 36 F.3d 684, 690 (7th Cir. 1994)

(citing Ford Motor Co. v. Department of Treasury of State of

Indiana, 323 U.S. 459, 467 (1945). See also Silver v. Baggiano,

804 F.2d 1211, 1214 (11th Cir. 1986) ("[R]emoval by state

Officials of a suit containing state law claims to federal court

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does not amount to waiver of Eleventh Amendment immunity

unless those state officials are authorized to waive such

immunity."). Thus, this court must look to the laws of Wisconsin

to determine whether the State Bar had the authority to waive

the State’s sovereign immunity.

Under the Wisconsin Constitution, the legislature has the

authority to direct by law the manner in which suits may be

brought against the state. Wis. Const. Art. IV, § 27. This

provision gives the state legislature sole authority to consent to

suit. Cords v. Wisconsin, 214 N.W.2d 405, 409 (Wis. 1974);

Forseth v. Sweet, 38 Wis. 2d 676, 689, 158 N.W.2d 370, 376

(1968) ("[The legislature] has the absolute right to proscribe the

boundaries of its sovereign immunity."); Townsend v. Wisconsin

Desert Horse Ass’n, 167 N.W.2d 425, 429 (Wis. 1969) ("It is for

the legislature to declare pursuant to the mandate in sec. 27,

Art. IV of the Wisconsin Constitution how and in what respect

the state can be sued by a citizen."). Zhe Wisconsin Supreme

Court has interpreted Art. IV, § 27 as meaning that a state

agency or Officer may not waive the state’s sovereign immunity

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without specific authorization. Lister v. Board of Regents, 240

N.W.2d 610, 618 (Wis. 1976). Furthermore, principles of

estoppel will not be applied to deprive a state of its right to

sovereign immunity. Lister, 240 N.W.2d at 619.

There is no Wisconsin statute authorizing suits against the

State Bar or giving the Bar authority to consent to suit in

federal court. Although the Wisconsin Supreme Court has given

the Bar the power to sue and be sued,” this does not give the

Bar authority to consent to suit in federal court. In order to

waive the Eleventh Amendment defense, a statute or

constitutional provision must do so in explicit language, stating

not "merely whether [the state] may be sued, but where it may

be sued.” Atascadero State Hospital v. Scanlon, 473 U.S. 234,

241 (1985) (citing Pennhurst State School and Hospital v.

Halderman, 465 U.S. 89, 99 (1984)). "In order for a state

Statute or constitutional provision to constitute a waiver of

3Wisconsin SCR 10.02(1) states in part: "The state bar may,

for the purpose of carrying out the purposes for which it is

organized, sue and be sued, enter into contracts, acquire, hold,

encumber and dispose of real and personal property.”

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Eleventh Amendment immunity, it must specify the State’s

intention to subject itself to suit in federal court.” Id. at 241

(emphasis in original). Thus, even if Wisconsin SCR 10.02 (1)

allows suits against the Bar in state court, it does not authorize

the Bar to waive the State’s sovereign immunity in federal

court. Because there has been no legislative authorization to

waive sovereign immunity, defendant is entitled to assert that

defense in this case.

Plaintiffs further argue that since defendant did not raise the

sovereign immunity defense in previous proceedings, it cannot

raise it now. This argument is without merit. Because it is in the

nature of a jurisdictional bar, sovereign immunity can be raised

at any time, even after the state has defended a matter on the

merits. Friendship Medical Center v. Yorke, 710 F.2d 1297,

1300 (7th Cir. 1983) ("[B]ecause the agency could have raised

the [sovereign immunity] defense on appeal, there is no merit

to the appellant’s contention that IDPA waived the defense by

defending on the merits instead of resting exclusively on the

[Eleventh] Amendment.”); Edelman v. Jordan, 415 U.S. 651,

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678 (1974) ("[T]he Eleventh Amendment defense sufficiently

partakes of the nature of a jurisdictional bar so that it need not

be raised in the trial court.”)

Conclusion

For the reasons stated, defendant’s Motion for Summary

Judgment is granted and the cause is dismissed.

ENTER:

Stanley J. Roszkowski /s/

STANLEY J. ROSZKOWSKI, JUDGE

UNITED STATE DISTRICT COURT

DATE: _ Dec. 15, 1995 /s/

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APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

WESTERN DIVISION

JOHN CROSETTO, et al.,

Plaintiffs,

CASE NO. 88 C 433

, 4

STATE BAR OF WISCONSIN,

Defendant.

Nee Nee ee” ee” See” See See” ee ee”

ORDER

This matter comes before the court on the plaintiffs’ Motion

for Leave to Supplement the Complaint pursuant to Federal

Rule of Civil Procedure 15(a). For the reasons that follow,

leave to amend is denied.

Background

In 1988, Plaintiffs filed this suit raising constitutional

challenges to Wisconsin’s integrated bar, including the

procedure used to calculate mandatory bar dues. In 1992, this

court granted summary judgment in favor of the defendants on

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all counts. Plaintiffs appealed, and the Seventh Circuit affirmed

in part, reversed in part and remanded the case. The mandate

from the Seventh Circuit leaves only a few issues remaining:

whether this court has subject matter jurisdiction over a suit

against the State Bar Association under the 11th Amendment;

whether there was an effective waiver of sovereign immunity;

whether a qualified immunity defense is available to the State

Bar; and, if defendant is not entitled to any immunity, whether

the plaintiffs are entitled to compensatory and punitive

damages.

The plaintiffs now seek to amend the complaint by, inter alia,

adding the individual members of the State Bar of Wisconsin’s

Board of Governors as defendants; dropping their request for

compensatory and punitive damages for other State Bar

members; and requesting declaratory and injunctive relief

prohibiting the State Bar from enforcing the dues reduction-

arbitration plan that has been in effect since July 1, 1993.

Discussion

Any time after a responsive pleading has been filed, a party

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must seek leave from the court or consent of the adverse party

to amend a pleading. Fed. R. Civ. P. 15(a). It is within the

district court’s sound discretion to grant or deny leave to amend

at that point in the litigation. Perrian v. O’Grady, 958 F.2d 192,

194 (7th Cir. 1992). Pursuant to Rule 15(a), leave to amend

should be freely given unless there is "undue delay, bad faith,

dilatory motive on the part of the movant, repeated failure to

cure deficiencies by amendments previously allowed, undue

prejudice to the opposing party by virtue of allowance of the

amendment, or futility of the amendment." Id. (citing Foman v.

Davis, 371 U.S. 178, 182 (1962)). Undue prejudice has been

found when a proposed amendment would bring new claims

and add new parties, and when it would require significant

additional preparation. Conroy Datsun Ltd v. Nissan Motor

Group, 506 F. Supp. 1051 (N.D. Ill. 1980); See also, Troxel

Mfg. Co. v. Schwinn Bicycle, 489 F.2d 968 (6th Cir. 1973).

Plaintiffs’ proposed amendments would add 46 new parties to

this litigation. They would add a completely new claim that is

dissimilar to the issues remaining, thus expanding the scope of

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this lawsuit. Since this case was remanded, discovery has been

conducted on the issues left open by the Seventh Circuit’s

opinion. At this point, adding new parties and substantially

changing the theory upon which the case is based would

undoubtedly require significant additional preparation on the

part of the defendant, and would impose a greater burden on

this court.

The current dues reduction-arbitration plan that the plaintiffs

now seek to challenge was promulgated severa] years after the

commencement of this lawsuit and is not appropriately a part

of this lawsuit. Furthermore, the constitutionality of the current

rules is the subject of a lawsuit, Thiel v. State Bar of Wisconsin,

Case No. 95 C 103 S, now pending in the Western District of

Wisconsin. That action seeks the same declaratory and

injunctive relief as plaintiffs’ proposed supplemental complaint.

Since the relief sought in Thiel is declaratory and injunctive,

plaintiffs will benefit from any relief granted. And if they so

desire, they can seek to intervene in that case. Plaintiffs,

therefore, will not be prejudiced by a denial of their motion.

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Conclusion

This litigation has been pending for seven years. To add

claims upon which this case proceeds at this point in time

would be unduly prejudicial to the defendants. It is time to

conclude this litigation, not change gears and proceed anew.

Therefore, plaintiffs motion to amend is denied.

ENTER:

Stanley J. Roszkowski /s/_

STANLEY J. ROSZKOWSKI, JUDGE

UNITED STATE DISTRICT COURT

DATE: _ May 1, 1995 /s/

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APPENDIX D

In the

United States Court of Appeals

For the Seventh Circuit

No. 92-3899

JOHN CROSETTO, ET AL.,

Plaintiffs-Appellants,

Vv.

STATE BAR OF WISCONSIN, ET AL.,

Defendants-Appellees.

Appeal from the United States District Court for the

Western District of Wisconsin

No. 88 C 433—Stanley J. Roszkowski, Senior District Judge.

ARGUED SEPTEMBER 29, 1993—-DECIDED

DECEMBER 20, 1993

Before FLAUM, EASTERBROOK, and KANNE, Circuit

Judges.

FLAUM, Circuit Judge. In this case Wisconsin lawyers, John

Crosetto, Kenneth Doran, and Douglas Kammer ("Plaintiffs"),

have alleged that the State Bar of Wisconsin, Stephen Smay

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(the Executive Director of the Wisconsin Bar), and the Justices

of the Wisconsin Supreme Court ("Defendants"), violated

Plaintiffs’ First Amendment rights by requiring Plaintiffs both

to join the Wisconsin State Bar and to contribute money for

certain political causes in order to practice law in the State. The

district court granted Defendants’ motion for summary

judgment finding that Defendants acted in good faith and

holding that Defendants were entitled to qualified immunity.

Furthermore, the district court denied Plaintiffs’ motion for a

preliminary injunction, upholding the cocnstitutionality of

Wisconsin’s integrated bar and compulsory membership dues.

We affirm in part, vacate in part, and remand this case to the

district court for a factual finding.

I. Background

The issue presented here is not wholly new to this court and

we are mindful of the long history of litigation surrounding

Wisconsin’s mandatory bar rule. In 1943, the Wisconsin

legislature enacted a bill directly that there "shall be an

association to be known as the ’State Bar of Wisconsin’

composed of persons licensed to practice law in this state, and

membership in the association shall be a condition precedent to

the right to practice law in Wisconsin.” Wis. Stat. § 256.31

(1943). Construing the statute to be merely advisory, the

Wisconsin Supreme Court initially declined to integrate! the

State’s bar, and allowed the bar association membership to

remain voluntary. See Integration of Bar Case, 244 Wis. 8, 11

N.W.2d 604 (1943); In re Integration of the Bar, 249 Wis. 523, 25

N.W.2d 500 (1946).

By 1956, the Wisconsin Supreme Court had become

concemed that "too many lawyers have refrained or refused to

join [the voluntary bar association], that membership in the

lan integrated bar is one requiring both membership and the payment of

dues as conditions of practicing law within the state.

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voluntary association [had] become static, and that substantial

minority of the lawyers in the state [were] not associated with

the State Bar Association." Jn the Matter of the Integration of the

Bar, 273 Wis. 281, 77 N.W.2d 602 (1956). The Court ordered

integration of the State’s bar on an interim basis, id. 77 N.W.2d

at 604, and after a two year trial period, the Court permanently

integrated the State’s bar.

A significant portion of Wisconsin lawyers opposed the

Wisconsin Supreme Court’s decision and filed a lawsuit alleging

that Wisconsin’s integrated bar violated the First Amendment.

This lawsuit ultimately reached the Supreme Court of the

United States. Lathrop v. Donohue, 367 U.S. 820, 81 S.Ct. 1826,

6 L.Ed.2d 1191 (1961). In Lathrop, six justices employed a

legitimate state interest test and concluded that Wisconsin’s

integrated bar did not violate a Wisconsin lawyers’ First

Amendment rights. But Lathrop hardly settled the opposition to

Wisconsin’s integrated bar. By the late 1970s, resistance to

Wisconsin’s integrated bar became so pronounced, as the State

Bar became increasingly involved in advocating various political

policies, that the Wisconsin Supreme Court decided to allow all

attorneys who objected to the Bar’s political expenditures to

reduce their membership dues according to that portion of dues

spent on the objectionable political activities. See Matter of

Discontinuation of Wis. State Bar, 93 Wis.2d 385, 286 N.W.2d

601 (1980).

Unsatisfied by the Wisconsin Supreme Court’s dues-reduction

compromise, a Wisconsin lawyer filed a federal class action suit

challenging the facial constitutionality of Wisconsin’s integrated

bar. Levine v. Supreme Court of Wisconsin, 679 F.Supp. 1478

(W.D. Wis. 1988) (hereinafter "Levine I"). In Levine I, the

plaintiff contended that compulsory membership dues facially

violate a Wisconsin lawyer’s speech and association rights under

the First Amendment. Jd. at 1489. Alternatively, the plaintiff

argued that the Bar’s use of compulsory dues to fund political

advocacy violated the First Amendment and that Wisconsin’s

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dues-reduction compromise failed to cure this defect. Jd. at

1502. Without addressing the plaintiff's alternative argument,

the district court declared that Wisconsin’s mandatory bar

membership rule and its Bar dues requirement facially violated

all Wisconsin lawyers’ First and Fourteenth Amendment rights.

Id. The district court awarded the plaintiff both compensatory

and punitive damages, and enjoined the State Bar’s from

enforcing its mandatory bar-membership rule. /d. In its analysis,

the district court questioned the continued viability of Lathrop,

the cornerstone upon which the defendant's legal arguments for

an integrated bar rested. To comply with Levine J, the

Wisconsin Supreme Court suspended enforcement of the

mandatory membership rule. Following the victory in Levine J,

the opposition lawyers filed the case here before us—Crosetto

v. State Bar of Wisconsin—hoping to curb further the State’s

integrated bar.

The district court stayed all its proceedings pending the

outcome of Levine I’s appeal which was then before the Seventh

Circuit. Subsequently, we reversed Levine I on appeal, holding

that Lathrop still controlled the constitutionality of integrated

bars and allowed Wisconsin to enforce its integrated bar. See

Levine v. Heffernan, 864 F.2d 457, 458 (7th Cir.1988)

(hereinafter "Levine Ir)? After Levine II, the Crosetto district

court lifted its stay and the parties briefed fully Plaintiffs’

motion for class certification. Judge Crabb denied Plaintiffs’

motion without prejudice and then recused herself, noting that

as a member of the Wisconsin bar, she would be affected by the

case’s outcome. The Chief Judge of the Seventh Circuit

designated Judge Roszkowski from the Northern District of

Illinois, to preside over Crosetto. Thereafter, the proceedings of

Crosetto were again stayed pending the decision from the

United States Supreme Court in Keller v. State Bar of California,

496 US. 1, 110 S.Ct. 2228, 110 L.Ed.2d 1 (1990) (posing

2Notwithstanding Levine II the Wisconsin Supreme Court continued its

suspension of the bar integration rule until July 1, 1992.

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questions regarding the constitutionality of California’s

integrated bar).

After the Court in Keller upheld California’s integrated bar,

the Wisconsin Bar began the process of re-integrating. In

March 1991, the State Bar approved a petition to the Wisconsin

Supreme Court to reinstate the State Bar as a mandatory

organization. Following a public hearing, the Wisconsin

Supreme Court reestablished the integrated bar, effective J uly

1, 1992, under a new set of Court rules and State Bar by-laws.

3See Wisconsin SCR 10.03(5)(b) and Wisconsin State Bar Bylaws, art. I,

sec. 5. The newly-enacted Wisconsin Supreme Court Rule 10.03(5)(b)

provides the following:

1. The state bar may use compulsory dues only for activities reasonably

intended for the purpose of regulating the legal profession or improving

the quality of legal services offered by members of the state bar. Other

activities must be supported by voluntary dues, user fees or other sources

of revenue.

2. Prior to the beginning of each fiscal year, the state bar shall publish

written notice of the activities that can be supported by compulsory dues

and the activities that cannot be supported by compulsory dues. The notice

shall indicate the cost of each activity, including all appropriate indirect

expense, and the amount of dues to be devoted to each activity. The notice

shall set forth each member’s pro rata dues to be devoted to activities that

cannot be supported by compulsory dues. The notice shal] be sent to every

member of the state bar along with the annual dues statement. A member

of the state bar may withhold the pro rata portion of dues budgeted for

aciivpties that cannot be supported by compulsory dues.

3. A member of the state bar who contends that the state bar incorrectly

set the amount of dues that can be withheld may deliver to the state bar

a written demand for arbitration. Any such demand shal] be delivered

within 30 days of receipt of the members’s dues statement.

4. If one or more timely demands for arbitration are delivered, the state

bar shall promptly submit the matter to arbitration before an impartial

arbitrator. All such demands for arbitration shal] be consolidated for

hearing. The costs of the arbitration shall be paid by the state bar.

5. In the event the decision of the arbitrator results in an increased pro

rata reduction of dues for members who have delivered timely demands for

(continued...)

A ee OS eRe SS A ne

27a

See In Matter of State Bar of Wisconsin: Membership, 169 Wis.2d

21, 485 N.W.2d 225 (1992).

Meanwhile, Plaintiffs’ continued pressing their constitutional

objections through this case, Crosetto. In Crosetto, Plaintiffs

alleged that before Keller, (1) Defendants had forced Plaintiffs

to financially support the State Bar’s political and other

legislative activities contrary to the First and Fourteenth

Amendments, (2) confiscated Plaintiffs’ property without due

process of law, and after Keller (3) Defendants implemented a

dues reduction plan that still failed the most recent

pronouncements of the Supreme Court of the United States. In

support of their allegations, Plaintiffs contend that among other

things, Defendants commingled resources between the State Bar

and its political action committee failed to keep adequate

records so that dissenting bar members may obtain a proper

refund, and used dues money for political activities unrelated to

the regulation of the legal profession.

The Justices of the Wisconsin Court filed a motion to dismiss

Plaintiffs complaint against them in that, as J ustices, they were

absolutely immune from suit for the quasi-legislative conduct,

and further, that Plaintiffs lacked any immediate threat of

injury. The District Court granted the Justices’ motion

dismissing them from the case. Then the remaining defendants

filed a motion for summary judgment. The district court granted

the motion, dismissed the rest of Plaintiffs’ case, and denied

Plaintiffs’ counter motion for a preliminary injunction against

the State’s integrated bar rule, 810 F ‘Supp. 966. After reviewing

the district court’s grant of summary judgment de ovo,

McMillan v. Svetanoff, 878 F.2d 186, 188 (7th Cir.1989), we

3(...continued)

arbitration for the fiscal year, the state bar shall offer such increased pro

rata reduction to members first admitted to the state bar during that fiscal

year and after the date of the arbitrator’s decisions.

28a

vacate and remand in part, affirming the rest of the district

court’s judgment.

Il. Analysis

In their appeal, Plaintiffs argue the following: (A) the federal

courts have subject matter jurisdiction over Plaintiffs’ claims

against (1) the State Bar Association as an entity, and (2) the

Justices of the Wisconsin Supreme Court, (B) the doctrine of

qualified immunity does not bar Plaintiffs’ damage claims

against the defendant Smay (the Bar’s Executive Director) for

his alleged official misconduct, and (C) both Wisconsin’s

present integrated bar and dues reduction plan fail to pass

constitutional muster thus entitling Plaintiffs to injunctive relief.

We shall address these arguments serially.

A. Subject Matter Jurisdiction

Plaintiffs arguments focus on the merits of a qualified

immunity defense with respect to both Smay and the State Bar.

In so doing, Plaintiffs apparently have assumed that the State

Bar, as an entity, is entitled to raise the qualified immunity

defense. In fact, the question of whether a non-natural person,

such as the State Bar, may raise a qualified immunity defense

has yet to be settled.4 Today we need not grapple with this

question because the Constitution of the United States may not

grant us any judicial power to hear either Plaintiffs’ claims

against the State Bar or those against the Wisconsin Justices.

1. The State Bar Association

[1-4] In our federalist system of dual sovereignty the

jurisdiction of the federal courts is limited to the grants of

4Not only was the non-natural person issue not briefed for us, but

Plaintiffs resisted discussing this possible objection even after several pointed

queries from this court during oral argument.

ane non

29a

power declared in the Constitution. Plaintiffs having brought

their suit in a federal court must endeavor to surmount one of

the Constitutions’ unavoidable jurisdictional hurdles, that of

state sovereign immunity. While we note that a state’s sovereign

immunity sets a constitutional lid on the exercise of federal

judicial power, we must also be mindful that when a citizen sues

his home state the Constitution’s Eleventh Amendment is

evidence, but not the origin of this doctrine.’ Hans v.

Louisiana, 134 US. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). In

developing the Hans doctrine, the Eleventh Amendment has

served as a historical framework for the Supreme Court’s

teaching that the Constitution never granted federal courts any

judicial power over suits by a citizen against his own state.

*We mention this fact only because, in explicating the Hans doctrine,

some courts have used "the Eleventh Amendment" as a short-hand substitute

for the Hans doctrine’s authority and origin. While convenient, this

characterization is imprecise. The text of the Eleventh Amendment clearly

does not provide for immunity when a citizen sues his resident state. U.S.

Const. amend. XJ. ("The Judicial power of the United States shall not be

construed to extend to any suit in law or equity, commenced or prosecuted

against one of the United States by Citizens of another State, or by Citizens

or Subjects of any Foreign State.”).

°The States passed the Eleventh Amendment in reaction to the Supreme

Court’s decision in Chisholm v. Georgia, 2 U.S. (2 Dall.) 419, 1 L.Ed. 440

(1793), and constitutionally overruled Chisholm which had allowed federal

subject matter jurisdiction over a suit against a state by a citizen of another

state. Nearly a hundred years later, when a resident citizen attempted to sue

his own state in federal court, the Court in Hans held that federal courts

lacked subject matter jurisdiction over such a suit. The Court reasoned as

follows:

"Can we suppose that, when the Eleventh Amendment was adopted, it

was understood to be left open for citizens of a State to sue their own

state in the federal courts, while the idea of suits by citizens of other

states, or of foreign states, was indignantly repelled? Suppose that

Congress, when proposing the Eleventh Amendment, had appended to

it a proviso that nothing therein contained should prevent a State from

(continued...)

30a

Without some affirmative constitutional grant the federal courts

lack any judicial power to decide a case. See Hans, 134 US. at

15, 10 S.Ct. at 507; see also Pennhurst v. Halderman, 465 U.S.

89, 98, 104 S.Ct. 900, 906, 79 L.Ed.2d 67 (1984). Therefore,

when a state citizen sues an entity that happens to be an arm of

that citizen’s home state, then a federal court, under Hans and

its progeny,’ ordinarily lacks subject matter jurisdiction.® Of

course for the Hans doctrine to forbid federal jurisdiction, a

suit against the state bar association must appropriately be

considered a suit against an arm of the state. While the actual

State status of "state" bar associations will vary from state to

state, the case law confirms that in several instances state bar

associations will be protected by sovereign immunity.

6(._.continued)

be=.g sued by its own citizens in cases arising under the Constitution or

laws of the United States; can we imagine that it would have been

adopted by the States? The supposition that it would is almost an

absurdity on its face.

"The truth is, that the cognizance of suits and actions unknown to the law,

and forbidden by the law, was not contemplated by the Constitution when

establishing the judicial power of the United States.” Hans, 134 US. at 15, 10

S.Ct. at 507.

Though criticized, especially by the academy, the Hans doctrine has been

repeatedly affirmed. Monaco v. Mississippi, 292 U.S. 313, 54 S.Ct. 745, 78

L.Ed. 1281 (1934); Employees v. Dep’t of Pub. Health & Welfare, 411 U.S. 279,

93 S.Ct. 1614, 36 L.Ed.2d 251 (1973); Atascadero v. Scanlon, 473 U.S. 234, 105

S.Ct. 3142, 87 L.Ed.2d 171 (1985); McKesson v. Div. of Alcoholic Beverages &

Tobacco, 496 U.S. 18, 110 S.Ct. 2238, 110 L_Ed.2d 17 (1990).

8We say ordinarily because there are exceptions to this bar which

concededly make the Eleventh Amendment and Hans immunity peculiar

jurisdictional rules. For example, Congress can abrogate state sovereign

immunity, see Welch v. Texas Department of Public Transport~tion, 483 U.S.

468, 107 S.Ct. 2941, 97 L.Ed.2d 389 (1987); Fitzpatrick v. Bitzer, 427 U.S. 445,

96 S.Ct. 2666, 49 L_Ed.2d 614 (1976); Furthermore, a state can consent to suit

in federal court, see infra note 11 and accompanying text.

3la

[5] The Supreme Court has never directly addressed the

sovereign immunity of state bars,” but its approach in related

areas may be helpful to the analysis. For example, in holding

that the actions of a state bar association constituted enough

Official state action to exempt a state bar from antitrust law, the

Supreme Court has noted that "the regulation of the activities

of the bar is at the core of the State’s power to protect the

public . . .. Few other professions are as close to the core of the

State’s power to protect the public. Nor is any trade or other

profession as essential to the primary governmental function of

administering justice." Hoover v. Ronwin, 466 U.S. 558, 569 n.

18, 104 S.Ct. 1989, 1996 n. 18, 80 L.Ed.2d 590 (1984) (citations

omitted). The Court concluded that because of this close

relationship, “although only the State Bar was named as a

defendant in the suit, the [plaintiff's] complaint was with the

State.” Id. at 571, 104 S.Ct. at 1977.

*Neither Keller, 496 U.S. 1, 110 S.Ct. 2228, the Court’s most recent bar-

association case, nor Bates v. State of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 55

L.Ed.2d 810 (1977) (where the court also decided claims against a state bar

on the merits imply that a suit against a state bar association is not a suit

against the state for the purposes of sovereign immunity. The doctrine of

sovereign immunity does not apply when, as in Keller or Bates, the Supreme

Court exercises its appellate jurisdiction over a case arising from state court.

McKesson, 496 U.S. at 27, 110 S.Ct. at 2245.

Nor can the Supreme Court’s review in either Goldfarb v. Virginia State

Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975), or Hoover v. Ronwin,

466 US. 558, 104 S.Ct. 1989, 80 L-Ed.2d 590 (1984), represent an implicit

holding that the jurisdictional bar of sovereign immunity does not apply when

&@ state bar is sued in federal court. In Goldfarb, the Court explicitly noted:

“The State Bar also contends that it is protected by the Eleventh Amendment.

Petitioners dispute this contention, and the District Court had no occasion to

reach it in view of its holding. Given the record before us we intimate no view

on the issue, leaving it for the District Court on remand.” Jd. 421 U.S. at 792

n. 22, 95 S.Ct. at 2016. (citations omitted). In Hoover, the state bar association

was already dismissed from the suit by the district court before the case

reached the Court. 466 U.S. at 565 n. 12, 104 S.Ct. at 1993 n. 12; see also

Lathrop, 367 U.S. 820, 81 S.Ct. 1826.

32a

With respect to state bar associations and sovereign immunity

the lower federal courts that have addressed this issue

unanimously have found particular state bars entitled to the

sovereign immunity defense. See Lewis v. Louisiana State Bar

Ass'n, 792 F.2d 493 (Sth Cir.1986) (holding that federal courts

lacked jurisdiction to hear a suit by a Louisianian against the

Louisiana State Bar); Bishop v. State Bar of Texas, 791 F.2d 435

(Sth Cir.1986) (holding the Texas State Bar could not be sued

by a Texan); Lupert v. California State Bar, 761 F.2d 1325 (9th

Cir.1986), cert. denied, 474 U.S. 916, 106 S.Ct. 241, 88 L.Ed.2d

251 (1986) (holding that the federal courts lacked jurisdiction

to hear a suit by a Californian against the California State Bar);

Ginter v. State Bar of Nevada, 625 F.2d 829, 830 (9th Cir.1980)

(holding the Nevada State Bar was immune from suit by a

Nevadan); Doyle v. Oklahoma Bar Ass'n, 787 F.Supp. 189 (W.D.

Okl. 1992) (holding that the Oklahoma state bar association

was an instrumentality of the state, and thus, federal courts

lacked jurisdiction to hear a suit for damages by an

Oklahoman).

[6] We agree that a suit against a state bar association, as a

general matter, may constitute a suit against the state for

sovereign immunity purposes. Whether the Wisconsin State Bar,

in particular, is vested with sufficient state characteristics to

qualify for sovereign immunity is a factual question; however,

that cannot be answered now on the record before us.!9 We

10The parties never addressed the issue of sovereign immunity, but

because it is jurisdictional, we raise it sua sponte. See Pennhurst, 465 US. at

99 n. 8, 104 S.Ct. at 907 (“The limitation deprives federal courts of any

jurisdiction to entertain such claims, and thus may be raised at any point in

a proceeding.”); Edelman v. Jordan, 413 U.S. 651, 678, 94 S.Ct. 1347, 1363, 39

L.Ed.2d 662 (1974) (holding that a state’s sovereign immunity “sufficiently

partakes of the nature of a jurisdictional bar so that it need not be raised in

the trial court.”); Shabazz v. Coughlin, 852 F.2d 697, 699-700 (2d Cir.1988);

see also Wright, Miller & Cooper, Federal Practice and Procedure:

Jurisdiction 2d § 3524 at 170 n. 83 (2d ed. 1984), discussing Patsy v. Board of

Regents of Florida, 457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1981).

33a

therefore vacate that part of the district court’s decision holding

for the State Bar of Wisconsin, and remand this case for a

determination of the State Bar’s sovereign status.

[7,8] After additional briefing along with any other

discovery deemed appropriate, the district court must ultimately

determine whether the suit against the Wisconsin State Bar

Association is properly considered a suit against the state qua

state. In making its finding the district court should consider the

extent of control exercised over the Bar by the Wisconsin

Supreme Court (or the State at large). See Lewis, 792 F.2d at

497 discussing Bates, 433 U.S. at 361, 97 S.Ct. at 2697, and

Hoover, 466 US. at 569 n. 18, 571, 104 S.Ct. at 1995 n. 18,

1996. In this matter we agree with Lewis, that the analysis

presented in both Bates and Hoover is applicable to questions

of sovereign immunity. If the Wisconsin Supreme Court had the

ultimate authority to adopt and enforce the Bar's rules in

question, then a suit against the Bar challenging those rules

may be not that different from a suit directly against the

Wisconsin Supreme Court. See Lewis, 792 F.2d at 497. The

district court should also consider, as additional indication of

state control, whether the Wisconsin State Bar has a role

completely defined by the Wisconsin Supreme Court—that is

whether the Bar was acting as the agent of the Court when it

promulgated the rules in question. /d. Also relevant is whether

a judgment against the State Bar would ultimately be paid by

the state’s treasury. See Paschal v. Jackson, 936 F.2d 940 (7th

Cir.1991); Cannon v. University of Health Sciences, 710 F.2d 351,

356 (7th Cir.1983); see also Lewis, 792 F.2d at 498 (holding

that since the dues of the Louisiana Bar Association, an

integrated bar, are actually state license taxes levied by the

express authority of the state legislature, they are thus

unavailable as damages under the doctrine of sovereign

immunity). 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. See Zych v. Wrecked Vessel Believed to be the

Lady Elgin, 960 F.2d 665, 669 (7th Cir.1992) (rejecting the

34a

notion that an absence of financial impact on the state is a per

se pass from the Eleventh Amendment’s purview); see also

Green v. Mansour, 474 U.S. 64, 72, 106 S.Ct. 423, 427, 88

L.Ed.2d 371 (1985). 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. See Lewis, 792 F.2d at 497

(discussing Bates, 433 U.S. at 361, 97 S.Ct. at 2697); Will v.

Michigan Dept. of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304,

2311, 105 L.Ed.2d 45 (1989) (Sovereign immunity forbids a suit

against an individual or entity who occupies the position of a

state office—even if there is no fiscal impact on state

funds—just as if the state had been named directly as a party to

the suit.).

If after its analysis the district court finds that a suit against

the Wisconsin State Bar is a suit against the State, then unless

one of the recognized exceptions to a state’s sovereign

immunity applies here,!! it must dismiss all of Plaintiffs’

claims against the Wisconsin State Bar for lack of subject

matter jurisdiction.

For example, while we recognize that a general appearance by an

authorized representative of the state may constitute an implied consent to

suit under some circumstances, thus waiving the sovereign immunity defense,

see, e.g, Hankins v. Finnel, 964 F.2d 853 (8th Cir.1992), cert. denied, _ US.

_» 113 S.Ct. 635, 121 L_Ed.2d 566 (1992), the Wisconsin State Bar may not

have had the authority to effectuate such an important waiver unilaterally. See

Employees, 411 U.S. at 285, 93 S.Ct. at 1618. The Wisconsin Constitution, art.

IV § 27 provides [“t}he legislature shall direct by law in what manner and in

what court suits may be brought against the state.” In interpreting this

language, the Wisconsin Supreme Court has held that "a state agency or

Officer may not waive the state’s sovereign immunity without specific

authorization nor will principles of estoppel be applied 30 as to deprive a

state of its sovereign rights.” Lister v. Board of Regents, 72 Wis. 2d 282, 240

N.W.2d 610 (1976). In some circumstances even “the attorney general may

appear on behalf of the state . . . without waiving the state’s sovereign

immunity to suit.” WisStat. § 895.46(1)(a) (1983). Whether under the

circumstance of this case the state bar waived any sovereign immunity it may

have had is an issue possibly worthy of exploration on remand.

35a

2. The State Court Justices

[9,10] Plaintiffs’ claims against the Justices of the

Wisconsin Supreme Court must be dismissed for jurisdictional

reasons. Plaintiffs concede that any prayer for retrospective

relief against the Justices "in their official capacity" would lack

subject matter jurisdiction.!4 However, the limited jurisdiction

of the federal courts not only bars any possible retrospective

claims against the Justices, but also mandates that we dismiss

Plaintiffs’ prayer for injunctive relief because it fails to present

an Article III case or controversy.

(11, 12] Article III of the Constitution extends the judicial

power of the United States only to real cases or controversies.

U.S. Const. art. III, § 1. As a result federal courts lack the

power to give advisory opinions in hypothetical cases.

Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435

(1806). Plaintiffs argue that because the Justices might someday

enforce the Bar’s rules, Plaintiffs have a ripe claim. We

disagree. Before a plaintiff may obtain an injunction against a

future enforcement he must show some substantial

hardship—the enforcement must be certain and the only

impediment to the case’s ripeness is a delay before its eventual

prosecution. Steffel v. Thompson, 415 U.S. 452, 462. 94 S.Ct.

1209, 1217, 89 L.Ed.2d 505 (1974) (allowing an injunction

against police when the plaintiff or his friends had twice before

been arrested for distributing the same handbills at the same

shopping center.) When pressed by the panel during oral

argument Plaintiffs’ counsel conceded that he was unaware of

any Wisconsin lawyer ever being disciplined by the Justices for

that lawyer's failure to pay dues to the integrated bar. In the

absence of any real threat of harm resulting from

\2Brief for Appellant at 42, Crosetto v. State Bar, No. 92-3899 (7th

Cir.1993). See also supra pp. 1400-02. Only prospective relief can be sought

against the Justices sued in their official capacity. See Ex Parte Young, 209

U.S. 123, 28 S.Ct. 441, 52 LEd. 714 (1908,

36a

noncompliance with the dues requirement, Plaintiffs’ immediate

claim is not ripe against the Justices, and must be dismissed for

lack of subject matter jurisdiction. Therefore, we affirm the

district court’s decision to dismiss Plaintiffs’ case against the

Justices.

B. Qualified Immunity

Federal courts have subject matter jurisdiction over Plaintiffs’

claims against Mr. Smay, the Executive Director of the

Wisconsin State Bar, sued in his individual capacity for

allegedly violating Plaintiffs’ First and Fourteenth Amendment

rights. 28 U.S.C. § 1331. However, as an individual serving in a

state office, Smay may be entitled to qualified immunity. Abel

v. Miller, 824 F.2d 1522, 1580 (7th Cir.1987).

[13-15] The doctrine of qualified immunity "is intended to

provide governmental officials with the ability ’to anticipate

reasonably when their conduct may give rise to liability for

damages.” Jd. at 1533 (quoting Anderson v. Creighton, 483 U.S.

635, 646, 107 S.Ct. 3034, 3042, 97 L.Ed.2d 523 (1989)). In

Harlow v. Fitzgerald, the Supreme Court explained that

defendants are shielded from liability by the doctrine of

qualified immunity "insofar as their conduct doe not violate

clearly established statutory or constitutional rights of which a

reasonable person would have known." 457 U.S. 800, 818, 102

S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982); see also Williams v.

Anderson, 959 F.2d 1411, 1414 (7th Cir.1992). Where the

affirmative defense of qualified immunity is properly raised,

"the plaintiff bears the burden of establishing the existence of

the allegedly clearly established constitutional right.” Rakovich

v. Wade, 850 F.2d 1180, 1209 (7th Cir.1988), cert. denied, 488

U.S. 968, 109 S.Ct. 497, 102 L.Ed.2d 534 (1988) (citations

omitted). For the qualified immunity defense to fail, “what is

required is a ’sufficient consensus,’ based on all relevant case

law, indicating that the official’s conduct was unlawful."

Landstrom v. Illinois Dep’t of Children, 892 F.2d 670 676 (7th

tb oon me

37a

Cir.1990). Since Smay properly raised this defense, unless

Plaintiffs can show that a sufficient consensus clearly established

the existence of a violated constitutional rigtit, Smay will receive

qualified immunity from Plaintiffs’ damage claims.

[16] Plaintiffs have not begun to meet their burden. The

constitutional rights allegedly breached by Smay were not

clearly established to a sufficient legal consensus at the time of

the alleged violation. Far from being clearly established in 1990,

Keller, 496 U.S. at 1, 110 S.Ct. at 2228 (which extended the

rules of Hudson, 476 U.S. 292, 106 S.Ct. 1066, to bar

associations), represented the first definitive legal statement

that mandatory bar dues had the same restrictions on their use

as compulsory union dues. See Schneider v. Colegio, 917 F.2d

620, 624 (1st Cir.1990), cert. denied, _ U.S. __, 112 S.Ct. 865,

116 L.Ed.2d 772 (1992); see also, supra notes 9, 12-14 and

accompanying text discussing Keller and integrated bar dues. As

the district court found, before the Keller decision "even the

basic issue of the applicability of First Amendment protections

to lawyers in an integrated bar was open to question.” Crosetto

v. State Bar, No. 88 C 433 C, Mag. Report and

Recommendation at 33 (Magis.Ct., N.D.Ill., W.Div., 1992)

(hereinafter, "Magistrate’s Report"). Notably, the California

Supreme Court was reversed by the Supreme Court of the

United States on this point of law as late as 1990. See generally,

Keller, 496 U.S. at 1, 110 SCt. at 2228. The doctrine of

qualified immunity is designed to relieve public officials from

having to predict, at their own financial peril, how judges might

decide future close cases. As this circuit has stated, "government

employees must obey the law in force at the time but need not

predict its evolution”. Greenberg v. Kmetko, 922 F.2d 382, 385

(7th Cir.1991). Because the law confronting Smay before 1990

did not clearly establish to a sufficient legal consensus that his

\3Hudson prohibited, as a violation of the First Amendment, a labor

union from using union dues for political contributions against union

member’s will.

38a

activities would subject him to any liability, Smay is entitled to

qualified immunity for his conduct during this period. We

affirm the district court’s dismissal of Plaintiffs’ damage claims

against Smay.

C. Integrated Bar Dues

[17] All that remains of Plaintiffs’ case is their prayer for an

injunction "to prevent the reintegration of the Wisconsin State

Bar under the revised Wisconsin Supreme Court rules and State

Bar by-laws governing legislative activities.". Magistrate's Report

at 40. After considering the merits of Plaintiffs’ argument, the

district court concluded that the Wisconsin rules and by-

laws!4 readily met the requirements established by the

Supreme Court in Keller and therefore denied Plaintiffs’ motion.

We agree.

Plaintiffs assert that the compulsory dues plan set out in the

State Bar’s bylaws and the Wisconsin Supreme Court’s rules is

facially invalid for failing to comply with Keller (which expanded

Hudson to the arena of state bar associations).! However, as

noted by the district court, the requirements of Keller and

Hudson were the foundation on which the Wisconsin rules were

promulgated. See Magistrate’s Report at 40. The language of

Wisconsin’s SCR 10.03(5)(b) follows the language of Keller in

14See supra note 3 and accompanying text discussing SCR 10.03(b) and

State Bar Bylaws.

15 See supra note 9 discussing Keller. The Keller decision singularly rejected

the notion that the "[s}tate [bjar, considered as a government agency, may use

dues for any purpose within the scope of its statutory authority,” 496 U.S. at

7, S.Ct. at 2232, and did not represent any type of implicit recognition that

the Eleventh Amendment (or the Hans doctrine) is inapplicable to suits

against state bar associations when the Court reversed a case arising from the

California Supreme Court. Keller, 496 U.S. at 17, 110 S.Ct. at 2237; see also

generally Bates, 433 U.S. 350, 97 S.Ct. 269.

39a

definin, ing what activities may be funded with compulsory

dues.! Finally, as the district court found, the new Wisconsin

rules and by-laws seem _ to incorporate all the Hudson

procedural requirements.!7 In Hudson, the Supreme Court

held that in order to protect the rights of dissenting union

employees, a union collecting a fair-share or agency fee must

provide procedural safeguards to prevent “compulsory

subsidization of ideological activity by employees who object

thereto without restricting the Union’s ability to require every

employee to contribute to the cost of collective bargaining

activities.” 475 U.S. at 302, 106 S.Ct. at 1074. The Court went

on to state that such procedures must include "an adequate

explanation of the basis of the fee, a reasonable prompt

Opportunity to challenge the fee before an impartial decision

maker, and an escrow for the amounts reasonably in dispute

while such challenges are pending.” Jd. at 310, 106 S.Ct. at 1077.

As the district court found in Crosetto, each of these

requirements is included in the in the new Wisconsin

procedure. Magistrate’s Report at 37-44.

The Wisconsin rules follow the law of Keller and Hudson in

the following ways: (1) SCR 10.03(5)(b)(2) requires that the Bar

provide written notice to all members before the beginning of

each fiscal year, describing those activities the Bar has

determined are chargeable and those which are non-chargeable,

informing members as to the cost of those activities and

describing how those amounts were calculated; (2) SCR

161n Keller the Supreme Court opined that "the guiding standard must be

whether the challenged expenditures are necessarily or reasonably incurred

for the purpose of regulating the legal profession or improving the quality of

the legal service available to the people of the State", which compares closely

to the language from SCR 10.03(5)(b), "[t]he state bar may use compulsory

dues only for activities reasonably intended for the purpose of regulating the

legal profession or improving the quality of legal services offered by members

of the state bar.”

17 See supra note 3 and accompanying text.

40a

10.03(5)(b)(3)-(S) sets up a procedure whereby those who

contend that the calculation is incorrect may challenge the

calculation and have their challenge promptly determined by an

impartial arbitrator; (3) State Bar Bylaws Article 1, Section 5(b)

provides that a member demanding arbitration need not pay

any dues until October 31 or 15 days following the arbitrator’s

decision, whichever is later. Therefore because Plaintiffs have

failed to identify any defect in the Wisconsin Bar’s compulsory

dues plan, we hold this plan constitutional both facially and as

applied, and thus affirm the district court’s denial of Plaintiffs’

motion for injunctive relief.

Ill. Conclusion

For the foregoing reasons we affirm that part of the district

court’s judgment to dispose of Plaintiffs’ suit against *he

Justices of the Supreme Court and defendant Smay, vacating in

part and remanding this case back to the district court for a

factual determination of the status of Plaintiffs’ suit with respect,

to the state.

AFFIRMED in part, VACATED in part, and REMANDED.

4la

APPENDIX E

ite tituti

AMENDMENT I

Congress shall make no law respecting an establishment of

religion, or prohibiting the free exercise thereof; or abridging

the freedom 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.

AMENDMENT XI

The Judicial power of the United States shall not be

construed to extend to any suit in law or equity, commenced

or prosecuted against one of the United States by Citizens of

another State, or by Citizens or Subjects of any Foreign

State.

AMENDMENT XIV provides in pertinent part:

Section 1. All persons born or naturalized in the United

States and subject to the jurisdiction thereof, are citizens of

the United States and of the state wherein they reside. No

State shall make or enforce any law which shall abridge the

privileges or immunities of citizens of the United States; nor

shall any State deprive any person of life, liberty, or property

without due process of law; nor deny to any person within its

jurisdiction the equal protection of the laws.

Statutes

42, U.S.C. § 1983 provides in pertinent part:

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State ***, subjects, or

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causes to be subjected, any citizen of hte United States or

other person within the jurisdiction thereof to the

deprivation of any rights, privileges, or immunities secured

by the Constitution and laws, shall be liable to the party

injured in an action at law, suit in equity, or other proper

proceeding for redress.

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APPENDIX F

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

1. The state bar may use compulsory dues only for activities

reasonably intended for the purpose of regulating the legal

profession or improving the quality of legal services offered by

members of the state bar. Other activities must be supported by

voluntary dues, user fees or other sources of revenue.

2. Prior to the beginning of each fiscal year, the state bar

shall publish written notice of the activities that can be

supported by compulsory dues and the activities that cannot be

supported by compulsory dues. The notice shall indicate the

cost of each activity, including all appropriate indirect expense,

and the amount of dues to be devoted to each activity. The

notice shall set forth each member’s pro rata portion, according

to the class of membership, of the dues to be devoted to

activities that cannot be supported by compulsory dues. The

notice shall be sent to every member of the state bar along with

the annual dues statement. A member of the state bar may

withhold the pro rata portion of dues budgeted for activities

that cannot be supported by compulsory dues.

3. A member of the state bar who contends that the state

bar incorrectly set the amount of dues that can be withheld may

deliver to the state bar a written demand for arbitration. Any

such demand shall be delivered within 30 days of receipt of the

member’s dues statement.

4. If one or more timely demands for arbitration are

delivered, the state bar shall promptly submit the matter to

arbitration before an impartial arbitrator. All such demands for

arbitration shall be consolidated for hearing. The costs of the

arbitration shall be paid by the state bar.

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5. In the event the decision of the arbitrator results in an

increased pro rata reduction of dues for members who have

delivered timely demands for arbitration for a fiscal year, the

state bar shall offer such increased pro rata reduction to

members first admitted to the state bar during that fiscal year

and after the date of the arbitrator’s decision.

i

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APPENDIX G

State Bar Bylaw Article I, Section 5 (1992)

(a) Demands for arbitration of the dues reduction under

SCR 10.03(5)(b) shall be made in writing and shall be delivered

to the Executive Director of the State Bar within 30 days of

receipt of the member’s dues statement. Delivery may be made

in person or by first class mail, and mailed demands will be

deemed delivered upon mailing. Demands shall include the

name and address of the member or members demanding

arbitration, a brief statement of the claim or objection, and the

signature of the member or members.

(b) If one or more timely demands for arbitration are

delivered, the State Bar shall agree to submit the matter

forthwith to arbitration. All timely demands for arbitration shall

be consolidated for hearing before the arbitrator appointed, and

the provisions of sec. 788, Stats., shall apply as if the parties had

entered into a written agreement for arbitration. A member

demanding arbitration is required to pay his or her dues by

October 31 or 15 days following the arbitrator’s decision,

whichever is later. Failure to pay dues by such date shall

automatically suspend the delinquent member.

(c) Upon receipt of all demands for arbitration, the State

Bar shall apply for appointment of an impartial arbitrator to the

Chief Judge of the Federal District Court for the Western

District of Wisconsin.

(d) Members demanding arbitration shall have access to the

financial records upon which the State Bar based the

determination of the amount of dues that can be withheld.

These records shall be available for inspection and copying

during normal business hours. Copying shall be at the member’s

expense.

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(e¢) The arbitrator shall determine the date, time and

location of the arbitration hearing(s) and shall so notify the

parties at least 15 days prior to said hearing(s). The arbitrator

will promptly hold hearings in which the parties will be

permitted to participate personally or through a representative.

The State Bar shall bear the burden of proof regarding the

accuracy Of the determination of the amount of dues that can

be withheld. All parties will be given the opportunity to present

evidence and to present arguments in support of their positions.

The following rules shail apply to the arbitration proceedings:

i. There will be no transcripts or post-hearing briefs.

ii, The arbitrator will issue an award stating the reasons

for the decision within five business days of the closing of the

hearing. The opinion will be brief, and based on the evidence

and arguments presented.

iii, The arbitrators will charge a maximum of $100 per

hour for services, including the hearing, preparation and study

time, and shall be reimbursed for all necessary expenses of the

arbitration.

iv. The hearing shall be held within 30 days of the

appointment of the arbitrator.

v. The arbitrator shall not be deemed a necessary party

in judicial proceedings relating to the arbitration.

vi. The arbitrator shall have no authority to add, subtract,

set aside or delete from any Supreme Court Rule, or State Bar

Bylaw.

(f) Members first admitted to the State Bar after the date

of notification to members shall be given that notification with

their initial dues statements. Such members shall be further

notified that they may deliver a demand for arbitration within

en

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30 days following receipt of the notification. If arbitration is

pending at the date of delivery of a demand for arbitration by

a newly admitted member, the newly admitted member’s

demand shall be consolidated with the pending arbitration. All

of the provisions of this section shall otherwise apply to

demands for arbitration filed by newly admitted members.