Stacey Mooney v. Illinois Education Associatio ( 2019 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 19-1774
STACEY MOONEY,
Plaintiff-Appellant,
v.
ILLINOIS EDUCATION ASSOCIATION, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Central District of Illinois.
No. 1:18-cv-1439-JBM — Joe Billy McDade, Judge.
____________________
ARGUED SEPTEMBER 20, 2019 — DECIDED NOVEMBER 5, 2019
____________________
Before WOOD, Chief Judge, and MANION and ROVNER, Cir-
cuit Judges.
WOOD, Chief Judge. Stacey Mooney is a public-school
teacher in Eureka (Illinois) Community School District #140.
She is not a member of respondent Illinois Education Associ-
ation (“IEA”), the union that serves as the exclusive repre-
sentative of her employee unit in collective bargaining with
the school district. From the time she started as a public em-
ployee until June 2018, the District deducted from her
2 No. 19-1774
paycheck and sent to the union a fair-share fee that contrib-
uted to the costs incurred by the union in its labor-manage-
ment activities. Both the Illinois Public Relations Act, 5 ILCS
§ 315/6, and existing Supreme Court precedent, Abood v. De-
troit Bd. of Educ., 431 U.S. 209 (1977), authorized this fee ar-
rangement.
That state of affairs came to an end when, in Janus v.
AFSCME, Council 31, 138 S. Ct. 2448 (2018), the Supreme
Court overruled Abood and announced that compulsory fair-
share fee arrangements violate the First Amendment rights of
persons who would prefer not to associate with the union that
represents their employee unit. 138 S. Ct. at 2460. Following
Janus, state employers in Illinois immediately ceased deduct-
ing fair-share fees from the paychecks of nonmembers of pub-
lic sector unions.
Mooney filed suit in the Central District of Illinois on be-
half of herself and a putative class of similarly situated per-
sons, seeking restitution pursuant to 42 U.S.C. § 1983 for the
fees that had been deducted from her pay prior to Janus. The
district court entered judgment for IEA on April 23, 2019, dis-
missing Mooney’s claims with prejudice. In so doing, it joined
the consensus across the country concluding that unions that
collected fair-share fees prior to Janus, in accordance with
state law and Abood, are entitled to assert a good-faith defense
to section 1983 liability.
We heard oral argument on Mooney’s case on September
20, 2019, in conjunction with Janus v. AFSCME, No. 19-1553.
We now affirm the judgment of the district court, largely for
the reasons set forth in our opinion of today’s date in Janus v.
AFSCME, No. 19-1553.
No. 19-1774 3
We write briefly here to address one difference between
the claim brought by Mooney and that brought by Mark Ja-
nus. On remand from the Supreme Court, Mr. Janus sought
damages pursuant to 42 U.S.C. § 1983 in the amount of the
fair-share fees he had paid prior to Janus. Mooney, in contrast,
insists that she is not seeking damages, but instead that she is
entitled to the equitable remedy of restitution under the same
statute. From the point of view of the union, the two requests
are identical: each one seeks a refund of the fees that the plain-
tiff paid under the ancien régime. Mooney, however, believes
that there is something special about restitution that is out-
come-determinative. Perhaps that is true in some situations,
but as we now explain, in substance Mooney is also seeking
damages, and so her claim must fail.
Section 1983 allows for remedies either at law or in equity.
42 U.S.C. § 1983 (“… [covered persons] shall be liable to the
party injured in an action at law, suit in equity, or other
proper proceeding for redress…”). The district court has dis-
cretion to tailor an appropriate remedy for the constitutional
violation. See Bell v. Hood, 327 U.S. 678, 684 (1946) (“[I]t is also
well settled that where legal rights have been invaded, and a
federal statute provides for a general right to sue for such in-
vasion, federal courts may use any available remedy to make
good the wrong done.”); Lieberman v. Univ. of Chicago, 660 F.2d
1185, 1193 (7th Cir. 1981) (“[F]ederal courts have the role of
providing broad and flexible remedies for violations of fed-
eral statutory and constitutional rights.”).
Mooney would like us to regard her requested relief as
restitutionary in nature. She believes that even if she concedes
that a good-faith defense protects the union against a dam-
ages award, an equitable demand for restitution cannot be
4 No. 19-1774
defeated on good-faith grounds. She argues that there is noth-
ing unfair about requiring the union to return monies that,
according to Janus, should never have been deducted from
her paychecks in the first place. In fact, she concludes, the un-
ion would receive a windfall based on its violations of her
constitutional rights if no restitution were ordered.
IEA responds that Mooney is simply playing with labels,
and that calling her claim equitable, or one for restitution,
does not make it so. In substance, IEA says, Mooney’s suit is
exactly the same as Mr. Janus’s: one for damages flowing from
a First Amendment violation. The gravamen of Mooney’s
complaint is that her First Amendment rights were violated
by the fair-share requirement because she was compelled to
furnish financial support to union activities with which she
disagreed.
As have all other district courts that have faced this ques-
tion, the court here agreed with IEA’s position. It concluded
that “Plaintiff’s claim lies in law rather than equity, and there
is consequently no reason to consider whether the good-faith
defense applies where the claim is for equitable restitution.”
See also, e.g., Carey v. Inslee, 364 F. Supp. 3d 1220 (W.D. Wash.
2019), appeal pending, No. 19-35290 (9th Cir.); Crockett v.
NEA-Alaska, 367 F. Supp. 3d 996 (D. Alaska 2019), appeal
pending, No. 19-35299 (9th Cir.); Babb v. California Teachers
Ass’n, 378 F. Supp. 3d 857 (C.D. Cal. 2019); Allen v. Santa Clara
Cnty. Correctional Peace Officers Ass’n, 2019 WL 4302744 (E.D.
Cal. Sept. 11, 2019).
The characterization of Mooney’s claim presents a legal
question on which our consideration is de novo. That said, we
agree with the district court’s analysis, which finds ample
support in the law. Indeed, many years ago we held that a
No. 19-1774 5
claim for a refund of an agency-fee overcharge under the
Abood regime was a legal rather than an equitable claim. Gil-
pin v. Am. Fed’n of State, Cnty., & Mun. Employees, AFL-CIO,
875 F.2d 1310, 1314 (7th Cir. 1989) (citing Dobbs, Handbook
on the Law of Remedies 224 (1973) (“The damages recovery
is to compensate the plaintiff, and it pays him, theoretically,
for his losses. The restitution claim, on the other hand, is not
aimed at compensating the plaintiff, but at forcing the defend-
ant to disgorge benefits that it would be unjust for him to
keep.”)). But see Laramie v. Cnty. of Santa Clara, 784 F. Supp.
1492, 1501–02 (N.D. Cal. 1992) (labeling a refund of non-
chargeable fees under the Abood regime as restitution).
Furthermore, as the Supreme Court explained in Mon-
tanile v. Bd. of Trustees of Nat. Elevator Indust. Health Benefit
Plan, 136 S. Ct. 651 (2016), “restitution in equity typically in-
volved enforcement of a ‘constructive trust or an equitable
lien, where money or property identified as belonging in
good conscience to the plaintiff could clearly be traced to par-
ticular funds or property in the defendant’s possession.’” Id.at 657 (citing Great-West Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204, 217 (2002)). Where a plaintiff seeks “recovery from
the beneficiaries’ assets generally” because her specific prop-
erty has dissipated or is otherwise no longer traceable, the
claim “is a legal remedy, not an equitable one.” Id. at 658 (em-
phasis in original) (internal quotation marks omitted).
Mooney is bringing just such a claim—that is, one against
the union’s treasury generally, not one against an identifiable
fund or asset. She attempts to escape this conclusion with the
argument that the entire treasury is an identifiable fund
against which she can pursue an equitable lien, but that
proves too much. Every defendant will always have a “fund”
6 No. 19-1774
consisting of all of its assets, but that is not what the Supreme
Court was talking about in Great-West Life and Montanile. It is
not enough that Mooney’s fees once contributed to IEA’s
overall assets. According to Montanile, she must point to an
identifiable fund and show that her fees specifically are still
in the union’s possession. 136 S. Ct. at 657–59. This she has not
done. Her claim is against the general assets of the union, held
in its treasury, and can only be characterized as legal.
In substance, then, Mooney’s claim is one for damages. For
the reasons we set forth in more detail in Janus v. AFSCME,
No. 19-1553, decided today, we AFFIRM the district court’s
judgment.
No. 19-1774 7
MANION, Circuit Judge, concurring. I concur with the
court’s ultimate conclusion. I write separately here for the
same reason I write separately in Janus v. AFSCME, Council
31, No. 19-1553, also decided today. Janus II recognized
Abood gave unions a windfall for 41 years. But Janus II also
implied unions need not disgorge this windfall.