International Union of Operati v. Brad Schimel ( 2017 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 16-3736 & 16-3834
INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 139
and INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL
420,
Plaintiffs-Appellants / Cross-Appellees,
v.
BRAD D. SCHIMEL and JAMES R. SCOTT,
Defendants-Appellees / Cross-Appellants.
____________________
Appeals from the United States District Court for the
Eastern District of Wisconsin.
No. 16-CV-590-JPS — J.P. Stadtmueller, Judge.
____________________
ARGUED JUNE 2, 2017 — DECIDED JULY 12, 2017
____________________
Before FLAUM, EASTERBROOK, and KANNE, Circuit Judges.
FLAUM, Circuit Judge. The International Union of Operat-
ing Engineers, Local 139 and Local 420 (“IUOE”), challenged
Wisconsin’s right-to-work law. The district court determined
that this Court’s decision upholding Indiana’s nearly-identical
law, Sweeney v. Pence, 767 F.3d 654 (7th Cir. 2014), controlled
2 Nos. 16-3736 & 16-3834
in this case, and the court dismissed IUOE’s complaint with
prejudice. For the following reasons, we affirm.
I. Background
A. The Sweeney Decision
In 2012, Indiana passed a right-to-work law that prohibits
agreements requiring people to:
(1) become or remain a member of a labor or-
ganization; [or]
(2) pay dues, fees, assessments, or other charges
of any kind or amount to a labor organization
…
as a condition of employment or continuation of
employment.
Ind. Code § 22–6–6–8. Union members in Indiana challenged
this right-to-work law as preempted by the National Labor
Relations Act (“NLRA”).1 However, after a comprehensive
1 The NLRA provides:
It shall be an unfair labor practice for an employer … to
encourage or discourage membership in any labor organ-
ization: Provided, That nothing in this subchapter, or in
any other statute of the United States, shall preclude an
employer from making an agreement with a labor organ-
ization … to require as a condition of employment mem-
bership therein … .
29 U.S.C. § 158(a)(3). The Act also states:
Nothing in this subchapter shall be construed as author-
izing the execution or application of agreements requir-
ing membership in a labor organization as a condition of
Nos. 16-3736 & 16-3834 3
discussion of the NLRA’s legislative history and relevant Su-
preme Court precedent, this Court determined that the NLRA
did not preempt Indiana’s right-to-work law, even though
that law prohibits the payment of any dues or fees to unions.
See Sweeney, 767 F.3d at 661 (The NLRA’s “express allowance
of state laws prohibiting agreements requiring membership in
a labor organization as a condition of employment necessarily
permits state laws prohibiting agreements that require em-
ployees to pay Representation Fees”) (quotation marks omit-
ted); see generally id. at 658–665. We also determined that the
enactment of Indiana’s law did not effect a taking in violation
of the Fifth Amendment: Although the NLRA requires unions
to provide fair representation to non-paying members of the
bargaining unit, the unions are “justly compensated by fed-
eral law’s grant to [unions] the right to bargain exclusively
with … employer[s].” Id. at 666.
B. Wisconsin Act 1
After Sweeney issued, Wisconsin enacted Act 1, which
states:
No person may require, as a condition of obtain-
ing or continuing employment, an individual to
do any of the following:
…
employment in any State or Territory in which such exe-
cution or application is prohibited by State or Territorial
law.
29 U.S.C. § 164(b). In Sweeney, we discussed the effect of the NLRA’s
preemption framework on right-to-work laws prohibiting the formation
of any union-security agreements. See generally 767 F.3d at 658–665.
4 Nos. 16-3736 & 16-3834
2. Become or remain a member of a labor organ-
ization [or]
3. Pay any dues, fees, assessments, or other
charges or expenses of any kind or amount, or
provide anything of value, to a labor organiza-
tion.
Wis. Stat. § 111.04(3)(a). IUOE—which had entered into sev-
eral conditional union-security agreements with employers—
filed suit against various Wisconsin officials (“Wisconsin”),
seeking to void the provision of Act 1 that prohibits forming
union-security agreements of any kind. IUOE argued that
Act 1 was preempted by the same NLRA provisions at issue
in Sweeney and that Act 1 unconstitutionally takes affected un-
ions’ property without just compensation. The district court
entered judgment on the pleadings in favor of Wisconsin and
dismissed the case with prejudice. These cross-appeals fol-
lowed.
II. Discussion
We review de novo the district court’s order granting
judgment on the pleadings. Barr v. Bd. of Trs. of W. Ill. Univ.,
796 F.3d 837, 839 (7th Cir. 2015) (citations omitted).
A. Sweeney Remains Good Law
IUOE acknowledged before the district court and con-
cedes on appeal that Sweeney controls the preemption analysis
in this case and dictates an outcome in favor of Wisconsin.
Sweeney dealt with, and disposed of, IUOE’s preemption and
Takings Clause arguments with respect to a substantively-
identical Indiana law. Thus, IUOE’s only remaining argument
on appeal is that Sweeney was wrongly decided and should be
overturned. “We do not take lightly suggestions to overrule
Nos. 16-3736 & 16-3834 5
circuit precedent,” Chi. Truck Drivers, Helpers & Warehouse Un-
ion (Indep.) Pension Fund v. Steinberg, 32 F.3d 269, 272 (7th Cir.
1994), and therefore “require a ‘compelling reason’” to do so,
United States v. Kendrick, 647 F.3d 732, 734 (7th Cir. 2011)
(quoting Santos v. United States, 461 F.3d 886, 891 (7th Cir.
2006)).
Beyond re-arguing the merits of the Sweeney decision,
IUOE notes that Chief Judge Wood published a strong dissent
in that case, see Sweeney, 767 F.3d at 671–85 (Wood, C.J., dis-
senting), and that this Court’s vote to rehear Sweeney en banc
was close, see Sweeney v. Pence, No. 13-1264 (7th Cir. Jan 13,
2015). Such facts, however, are not “compelling reasons” to
overturn a recent decision. See Santos, 461 F.3d at 894 (“the
previous decision [having been] upheld by a 5–5 vote” was
not a compelling reason to overturn it); Kendrick, 647 F.3d at
734 (“a solid defense of the arguments that we rejected in
[prior cases] … does not amount to a compelling reason to re-
visit” those cases) (citation omitted). Furthermore, IUOE
points to no intervening developments in statutory, Supreme
Court, or even intermediate-appellate-court law between
Sweeney and today that undermine Sweeney’s validity. In sum,
IUOE does not provide any compelling reason to revisit
Sweeney, and we decline to do so.
B. Takings Clause Ripeness
IUOE argues that Act 1 takes affected unions’ property
without just compensation in violation of the Fifth Amend-
ment. IUOE brought this claim in federal district court with-
out first seeking just compensation in the state courts. The dis-
trict court acknowledged this fact and noted that such claims
are generally unripe under Williamson County Regional Plan-
ning Commission v. Hamilton Bank of Johnson City, 473 U.S. 172,
6 Nos. 16-3736 & 16-3834
195 (1985). It determined that IUOE’s takings claim was nev-
ertheless ripe because IUOE had made a pre-enforcement fa-
cial challenge to Act 1, and dismissed the complaint with prej-
udice. On cross-appeal, Wisconsin argues that the district
court should have ruled that this claim was unripe and should
have dismissed it without prejudice.
Generally, “if a State provides an adequate procedure for
seeking just compensation, the property owner cannot claim
a violation of the Just Compensation Clause until it has used
the procedure and been denied just compensation.” Id.Though the record reveals no regulatory procedure for han-
dling Act 1-based takings claims—Wisconsin asserts that the
Act does not create a takings issue in the first place—we have
determined that the state courts can provide an adequate route
for seeking just compensation, see Sorrentino v. Godinez, 777
F.3d 410, 413–14 (7th Cir. 2015) (Illinois Court of Claims an
adequate forum for takings claim though incapable of grant-
ing the equitable relief sought); see also Forseth v. Vill. of Sussex,
199 F.3d 363, 372–73 (7th Cir. 2000) (noting a variety of availa-
ble Wisconsin state-court review mechanisms), and thus must
be utilized, when available, before seeking relief in federal
court. However, this Court has recognized two exceptions to
Williamson’s ripeness requirement: “one for pre-enforcement
facial challenges and one for situations in which relief is not
available in state court.” Muscarello v. Ogle Cty. Bd. of Comm'rs,
610 F.3d 416, 422 (7th Cir. 2010).2
2 IUOE also urges this Court to acknowledge a third exception to Wil-
liamson: that takings for a private use do not need to be litigated in state
court first. However, Muscarello clearly states that this Court recognizes
the facial-challenge and futility exceptions, and does not allude to any
other possible exceptions. The case on which IUOE relies, Peters v. Village
Nos. 16-3736 & 16-3834 7
IUOE argues that it has satisfied both of these exceptions
and that its takings claim was ripe when it filed suit in the
district court. With respect to the facial-challenge exception,
Wisconsin responds that IUOE could not have been making
such a challenge to Act 1, since IUOE’s complaint contained
the phrase “as applied.” However, the complaint reads, “[a]s
applied to unions covered by the NLRA, [Act 1] effects an uncon-
stitutional taking.” (emphasis added). In context, it is clear
that the phrase “as applied” was not meant to limit IUOE to
making an as-applied challenge to Act 1; IUOE used this
phrase to invoke the rights of all unions covered by Act 1 and
the NLRA. Regardless, the Supreme Court has instructed
that, in determining whether a challenge is facial or as-ap-
plied, “[t]he label is not what matters. The important point is
of Clifton, 498 F.3d 727 (7th Cir. 2007), does not support its argument. In
that case, we elaborated on the futility exception, and noted that, “[d]es-
pite the strong presumption that damages, not injunctive relief, is the ap-
propriate remedy in a Takings Clause action, our case law does
acknowledge that there are limited circumstances in which injunctive re-
lief is available. For instance, it is well accepted that, when the government
has taken property for a private, rather than a public, use, injunctive or
declaratory relief may be appropriate.” Id. at 732 (citing Daniels v. Area
Plan Comm'n of Allen Cty., 306 F.3d 445, 457 n.11 (7th Cir. 2002)). However,
neither Peters nor Daniels states that potential injunctive relief for private-
use takings is sufficient by itself to relieve litigants of Williamson’s exhaus-
tion requirement. In Daniels, we observed that “the district court should
accept jurisdiction over takings claims for injunctive relief in the few cases
where a Claims Court remedy is so inadequate that the plaintiff would not be
justly compensated.” 306 F.3d at 457 n.11 (emphasis added) (quoting
Transohio Sav. Bank v. Dir., Office of Thrift Supervision, 967 F.2d 598, 613
(D.C. Cir. 1992)) (internal quotation marks omitted). Daniels’s focus on the
inadequacy of remedies indicates that the futility exception to Williamson
would cover a valid takings claim seeking non-monetary relief, not a new,
standalone exception.
8 Nos. 16-3736 & 16-3834
that plaintiffs’ claim and the relief that would follow … reach
beyond the particular circumstances of these plaintiffs.” John
Doe No. 1 v. Reed, 561 U.S. 186, 194 (2010).3 In this case, IUOE’s
claim that Act 1 works an unconstitutional taking from all af-
fected unions, and the relief IUOE seeks—invalidation of
parts of Act 1—both clearly “reach beyond [IUOE’s] particular
circumstances.” Id. Further, the panel’s discussions of the Tak-
ings Clause issue in Sweeney indicate that an unconstitutional
taking would arise, if at all, from the statutory language of the
right-to-work statutes or the NLRA, see 767 F.3d at 665–66 (re-
jecting a remedy of “strik[ing] down Indiana's right-to-work
statute”) (emphasis added); id. at 683 (Wood, C.J., dissenting)
(noting that “plaintiffs have argued throughout that the Indi-
ana statute is unconstitutional,” and describing “the confisca-
tory nature of the Indiana statute”) (emphases added), a the-
ory to which a facial challenge would have been well-suited.
3 Wisconsin argues that IUOE cannot be making a facial challenge to
Act 1, as IUOE does not seek to invalidate every provision of Act 1. How-
ever, Reed undercuts that line of argument. In that case, the parties disa-
greed as to whether a First Amendment-based challenge to Washington
State’s Public Records Act (“PRA”) was facial or as-applied. 561 U.S. at
191. As here, the complaint alleged that the law “violates the First Amend-
ment as applied to referendum petitions.” Id. at 194 (emphasis added). De-
spite the use of the phrase “as applied,” the Supreme Court reasoned that
the complaint “obviously has characteristics of both [facial and as-applied
challenges]: The claim is ‘as applied’ in the sense that it does not seek to
strike the PRA in all its applications, but only to the extent it covers refer-
endum petitions. The claim is ‘facial’ in that it is not limited to plaintiffs’
particular case, but challenges application of the law more broadly to all
referendum petitions.” Id. As a result, the plaintiffs in Reed had to “sat-
isfy … standards for a facial challenge to the extent of that reach.” Id. Like-
wise, IUOE’s claim is facial, and thus ripe for adjudication, in that it chal-
lenges Act 1 as it affects all unions elected to represent bargaining units.
Nos. 16-3736 & 16-3834 9
Likewise, in this case, IUOE asserts that the provision of Act 1
that forbids all union-security agreements amounts to an un-
constitutional taking on its face. Thus, the district court cor-
rectly construed this claim as a “pre-enforcement facial chal-
lenge” to Act 1, Muscarello, 610 F.3d at 422,4 determined that
the takings claim was ripe under that Williamson exception,5
and dismissed the claim with prejudice in light of Sweeney.
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of
the district court.
4 To the extent IUOE’s takings claim challenges Act 1 as not “substan-
tially advanc[ing] legitimate state interests,” the Supreme Court has de-
termined that such a challenge is properly understood as a due-process
inquiry that “has no proper place in … takings jurisprudence.” Lingle v.
Chevron U.S.A. Inc., 544 U.S. 528, 540 (2005) (citations omitted).
5 Because we hold that IUOE’s claim was ripe as a pre-enforcement
facial challenge to Act 1, we need not decide whether adequate relief
would have been available in the Wisconsin state courts.