The Most Important Case (that You Never Heard About)

by: tmess2

Sun Jul 01, 2012 at 15:51:19 PM EDT

Some Supreme Court cases are front page news.  Others involve technical issues only of interest to attorneys and those in the industry covered by the law (and perhaps consumers).  Others have potential to be significant, but get lost behind other cases that have more immediate interest.

This post is about one of those latter cases.  With a lot of other cases involving significant issues of public policy coming at the end of the term, a significant decision regarding how campaigns are funded got lost in the shuffle.  That case is Knox v. SEIU.

By way of background, in some states, "closed-shop" laws can make belonging to a union (or at least paying union dues) a condition of employment if the workers have opted to join together for collective bargaining purposes.  Other laws regulating certain professions (e.g. law) require members of that profession to join an organization representing all members of that profession.  In the 1970s and 1980s, the Supreme Court recognized that those represented by these unions and organizations could be assessed and required to pay dues for the core operations of these organizations, members should not be forced to pay dues for any political speech that these organizations wished to engage in.  The procedure ultimately established in these cases required that these organizations give members annual notice of the proposed dues, including how those dues would be divided between core expenses and political expenses, and give members the opportunity to opt out of paying the political portion of the dues.

Knox specifically involved a local of the Service Employee's Union in California which represented some public employees.  In June 2005, this local sent out its annual notices.  Shortly after the annual notices were mailed out, the Republican Governor called for a special election on multiple ballot issues -- two of which would have significantly impacted public employees (by giving the Governor the ability to reduce state appropriations, potentially leading to layoffs or pay cuts) and public sector unions (by replacing the opt-out rules with opt-in rules).

In light of these proposed ballot issues, shortly after the opt-out period had ended for regular dues, the local proposed a special assessment to fund the local's share of the expenses of a coalition of unions opposing these two propositions.  While notice of the new assesment was sent to union members, there was no provision allowing members to object to the additional expenditure or opt-out from this additional assessment. 

Originally, the District Court found that the local was required to give members notice and the opportunity to opt out of the full amount of the additional assessment.  A panel of the Ninth Circuit found that there was nothing wrong with the new assessment and that even employees who had filed an objection to the original notice could be forced to pay a share of the additional assessment (based on the percentages in the original assessment).

After the Supreme Court took the case, the union made full refunds.  The Supreme Court (apparently unanimously) rejected any suggestion that the refund made the case moot.

Seven of the justices also agreed that the new assessment required a new notice to members of the union and that members who objected would not have to pay any of the special assessment.

Five of the justices (Alito writing the opinion, joined by Roberts, Scalia, Kennedy, and Thomas) found that not only was a new notice required, but that on such a special assessment, members had to opt-in to paying the special assessment. 

Two of the justices (Justice Sotomayor writing, joined by Justice Ginsburg) find that the opt-out/opt-in question was not properly presented, and did not see a reason to depart from traditional opt-out rules.

The two dissenters (Justices Breyer writing, joined by Justice Kagan) found no need for a new notice (and opportunity to opt out) and had no problem with the same percentages applying to the special assessment.  The reasoning was that the process for computing the annual assessments (based on the previous year's expenditure) would correct for any overpayment caused by the special assessment (and on the facts of this case, even with the special assessment, objecting members still underpaid their share of the core expenses).

The fact that there were five justices for the first time ever proposing that union members had to opt-in for a special assessment is big in a very bad way for progressive politics.  Even bigger is that the language in the opinion implicitly questioned the constitutional basis of the prior decisions requiring opt-our for the political portion of the regular dues assessment.  Republicans have been pushing in Congress to replace opt-out with opt-in as a matter of federal law (even though it is currently established by state law).  If the majority holds to its current reasoning, there is a good chance that Republicans can just sit back and let the Supreme Court do it for them.

Unions have been a good source of funds for progressive organizaitons balancing out business groups on the other side.  Businesses do not need shareholders to opt-in (and do not give shareholders the opportunity to opt out) of the spending of funds which might otherwise go to dividends for political purposes (indirectly or, now, after Citizens United, potentially directly).  A replacement of opt-out with opt-in for unions would place unions (and thus progressive groups) at a substantial disadvantage to businesses.