Uphill Climb for Workers Seeking Refund on Union Fees

BOSTON (CN) – Lawyers for two New Hampshire workers seeking a refund of union fees they paid in the years before the Supreme Court shook up the landscape struggled to persuade the First Circuit on Monday to revive their case

“I’m not following” why a retroactive refund is appropriate, U.S. Circuit Judge David J. Barron told the workers’ lawyer, Frank D. Garrison of the National Right to Work Legal Defense Foundation.

Garrison was interrupted almost immediately by Barron and spent his entire time at oral arguments fending off Barron’s insistent and skeptical questions.

The union’s lawyer, Leon Dayan of Bredhoff & Kaiser in Washington, D.C., told the judges that it would be a “basic injustice” to require a refund since “the money isn’t just sitting in some vault somewhere.”

“It’s already been spent by the union to benefit the very employees who are now suing,” Dayan continued.

Patrick Doughty and Randy Severance brought the underlying class action in January 2019, just a few months after the Supreme Court used the case Janus v. AFSCME to overrule a 1977 case that said, so long as the money is not spent on lobbying or other political activities, unions could collect fees from workers who did not want to join, because of the intrinsic benefits that flow from collective bargaining.

Janus by contrast holds that requiring non-union workers to pay any union fees at all violates their First Amendment rights.

To date, 18 U.S. District Courts have addressed ensuing suits by workers seeking refunds with retroactive application of Janus. The unions have roundly prevailed, with the Seventh Circuit upholding one such decision just last month. In addition to Doughty and Severance’s case, appeals are also pending before the Second, Third, Fourth, Sixth and Ninth Circuits.

The New Hampshire workers sued under an 1871 civil rights law that allows private organizations to be held liable for violating someone’s constitutional rights. The question is whether the union can defend itself by arguing that it relied in good faith on existing law at the time.

Barron, an Obama appointee, insisted that the workers’ claim was analogous to a common-law suit for malicious prosecution, abuse of process or wrongful attachment, where a good-faith defense would be available. “Why is this case any different?” he demanded. “Why wouldn’t we do the same thing here, since it looks so much like that?”

“We don’t think it looks so much like that,” Garrison answered.

Garrison insisted that there is no common-law analogy to a First Amendment claim, and that since Congress didn’t specifically create a good-faith defense in the 1871 law, it doesn’t exist. “If Congress wants it, it should create it,” he said.

When pressed by Barron, Garrison finally conceded that the First Amendment claim here bore some resemblance to a common-law claim for conversion. “And you don’t have any authority for a retroactive claim in a conversion case?” Barron asked.

“No, your honor,” Garrison replied.

Dayan argued that the First Amendment claim was analogous to a suit for malicious prosecution or abuse of process. But he also said the key question was “would the Congress in 1871 have assumed there was a defense” based on good faith. He said there was no question that a person in 1871 who relied on a presumptively valid law couldn’t be held liable for damages if the law later changed, and “it would be shocking” if Congress intended to abolish that longstanding rule without even mentioning it.

This echoed the union’s argument in its brief that “citizens are entitled to rely on the law as it exists at the time of their actions, and are not required, at the risk of substantial liability, to order their affairs based upon predictions of what the Supreme Court might decide in the future.”

U.S. Circuit Judge O. Rogeriee Thompson and Chief U.S. Circuit Judge Jeffrey R. Howard presided over Monday’s hearing as well. Thompson is a fellow Obama appointee while Howard was appointed by President George W. Bush.

The case applies only to public-sector workers, since employees of private companies are not covered in the same way by the First Amendment.

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