Schuyler File v. Jill Kastner ( 2022 )

In the
United States Court of Appeals
for the Seventh Circuit
____________________
No. 20-2387
SCHUYLER FILE,
Plaintiff-Appellant,
v.
LARRY MARTIN, Executive Director
of the State Bar of Wisconsin, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 19-C-1063 — Lynn Adelman, Judge.
____________________
ARGUED JANUARY 15, 2021 — DECIDED APRIL 29, 2022
____________________
Before SYKES, Chief Judge, and WOOD and HAMILTON,
Circuit Judges.
SYKES, Chief Judge. Under rules adopted and enforced by
the Wisconsin Supreme Court, all lawyers licensed to prac-
tice in the state must be members of and pay dues to the
State Bar of Wisconsin, a professional association created by
the court. Attorney Schuyler File contends that requiring
him to join and subsidize the State Bar violates his free-
2 No. 20-2387
speech and associational rights under the First Amendment.
Recognizing that Supreme Court precedent forecloses this
claim, see Keller v. State Bar of Cal., 496 U.S. 1 (1990), File
maintains that the Court’s more recent cases—particularly
Janus v. American Federation of State, County, & Municipal
Employees, Council 31, 138 S. Ct. 2448 (2018)—implicitly
overruled Keller.
The district court rejected this argument, and properly
so. Keller may be difficult to square with the Supreme
Court’s more recent First Amendment caselaw, but on
multiple occasions and in no uncertain terms, the Court has
instructed lower courts to resist invitations to find its deci-
sions overruled by implication. Keller is binding. We affirm.
I. Background
Wisconsin lawyers must join and pay annual dues to the
State Bar of Wisconsin, and active membership in the associ-
ation is “a condition precedent to the right to practice law”
in the state. WIS. S. CT. R. 10.01(1); see also id. R. 10.03(5)
(establishing the dues requirement); id. R. 23.02(1) (provid-
ing that no person may practice law in the state without a
current license issued by the Wisconsin Supreme Court and
active membership in the State Bar). This regulatory regime,
often called an “integrated, mandatory[,] or unified bar,”
Kingstad v. State Bar of Wis., 622 F.3d 708, 713 n.3 (7th Cir.
2010) (quotation marks omitted), authorizes the State Bar to
use membership dues to fulfill the purposes for which it was
created. These include “aid[ing] the courts in … the admin-
istration of justice”; “conduct[ing] a program of continuing
legal education”; and “maintain[ing] … high ideals of integ-
rity, learning, competence[,] … public service[,] and high
standards of conduct” in the bar of the state. WIS. S. CT.
No. 20-2387 3
R. 10.02(2). To those ends, the State Bar hosts seminars,
sponsors amicus briefs, publishes a magazine, proposes
legal-ethics rules, and lobbies the government. Some of these
activities venture into political and socially sensitive sub-
jects.
Failing to pay bar dues can result in serious consequenc-
es. Attorneys who fail to pay dues by the annual due date
and remain delinquent after notice and the expiration of a
specified grace period are automatically suspended. WIS.
STATE BAR BY-LAWS art. I, § 3(a). (The administrative suspen-
sion is lifted if the delinquent lawyer pays the late dues plus
a small penalty, but this remedy is not available if the dues
have been in arrears for three years. Id. art. I, § 3(c).)
Suspended lawyers cannot practice law. Id.; see also WIS.
S. CT. R. 23.02(1). The state supreme court and every judge in
the state receives a certified list of all lawyers suspended for
nonpayment of dues. WIS. STATE BAR BY-LAWS art. I, § 3(a).
Practicing law while suspended violates state legal-ethics
rules. WIS. S. CT. R. 20:8.4(f).
The Office of Lawyer Regulation—the court agency that
investigates and prosecutes ethics violations—may initiate
proceedings to impose additional sanctions, including full
license suspension. See, e.g., In re FitzGerald, 735 N.W.2d 913,
916 (Wis. 2007). But the Wisconsin Supreme Court, which
has plenary constitutional power to regulate the legal pro-
fession in the state, is the ultimate enforcement authority for
the lawyer regulatory system—including the licensing rules,
bar-membership requirement, and the ethics code—and
imposes discipline for violations. WIS. S. CT. R. 21.09; see also
id. R. 21 pmbl. (“The lawyer regulation system is established
to carry out the supreme court’s constitutional responsibility
4 No. 20-2387
to supervise the practice of law … .”). The Office of Lawyer
Regulation acts pursuant to the court’s authority and is the
court’s agent for investigating and prosecuting violations.
See id. R. 21.13.
Schuyler File is an active, dues-paying member of the
State Bar. But he does not want to be. He filed suit challeng-
ing the constitutionality of the mandatory bar, naming the
association’s executive director and its president and the
justices of the state supreme court as defendants. He sought
a declaration that the mandatory bar is facially incompatible
with the First Amendment and an injunction prohibiting the
defendants from enforcing the membership and dues re-
quirements.
The justices and State Bar officials filed separate motions
to dismiss for lack of subject-matter jurisdiction and failure
to state a claim. See FED. R. CIV. P. 12(b)(1), (b)(6). Both sets of
defendants argued that the Supreme Court’s decision in
Keller precludes File’s claim on the merits. The justices also
challenged File’s standing to sue, arguing that his injury is
hypothetical at best and not traceable to them. Additionally,
the justices raised a defense of immunity.
The judge rejected the jurisdictional argument, holding
that the injury File would suffer if he stopped paying bar
dues—automatic suspension of his right to practice law—is
certain enough to support his standing to bring this pre-
enforcement suit for prospective relief. File v. Kastner, 469 F.
Supp. 3d 883, 886–87 (E.D. Wis. 2020). The judge also reject-
ed the justices’ immunity claim, relying on Pulliam v. Allen,
466 U.S. 522, 541–42 (1984). File, 469 F. Supp. 3d at 888.
Moving to the merits, the judge dismissed the case, ruling
No. 20-2387 5
that File’s claim “is foreclosed by Keller, which only the
Supreme Court may overrule.” Id. at 891.
II. Discussion
We review the judge’s dismissal order de novo. Price v.
City of Chicago, 915 F.3d 1107, 1110 (7th Cir. 2019). Our first
order of business is the question of standing. The justices
(but not the State Bar officials) argue that File alleged noth-
ing more than a hypothetical injury and thus lacks standing
to sue.
Article III limits the federal judicial power to “Cases” and
“Controversies,” which in turn requires the party invoking
the jurisdiction of the federal court to establish his standing
to sue. Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). To do
so, the plaintiff “must demonstrate (1) that he or she suffered
an injury in fact that is concrete, particularized, and actual or
imminent, (2) that the injury was caused by the defendant,
and (3) that the injury would likely be redressed by the
requested judicial relief.” Thole v. U.S. Bank N.A., 140 S. Ct.
1615, 1618 (2020).
As noted, this is a pre-enforcement suit: File seeks pro-
spective relief based on the threat of injury—suspension of
his right to practice law—if he were to refuse to pay bar
dues. “It is well-established that pre-enforcement challenges
are within Article III.” Ezell v. City of Chicago, 651 F.3d 684,
695 (7th Cir. 2011) (quotation marks and alterations omitted).
For this type of claim, the Article III minimums are satisfied
when “there exists a credible threat of prosecution.” Susan B.
Anthony List v. Driehaus, 573 U.S. 149, 159 (2014) (quotation
marks omitted). A person need not violate the law and risk
prosecution to bring a pre-enforcement challenge. Ezell,
6 No. 20-2387
651 F.3d at 695; see also Schirmer v. Nagode, 621 F.3d 581, 586
(7th Cir. 2010). A credible threat of prosecution is sufficient
to establish injury in fact; an actual prosecution or other
enforcement action is not necessary. Driehaus, 573 U.S. at
159.
The justices insist that the threat of disciplinary action
against File is entirely hypothetical. That’s a puzzling argu-
ment in the context of this regulatory scheme. An attorney
who fails to pay bar dues is administratively suspended
from the practice of law, and every judge in the state re-
ceives a list of suspended lawyers. Practicing law while
administratively suspended is an ethics violation subject to
additional discipline. Under the court’s own rules, there is
more than a credible threat of enforcement: the penalty for
nonpayment of dues—administrative suspension of the right
to practice law—is automatic and universally applicable.
It does not matter that the State Bar processes administra-
tive suspensions or that the Office of Lawyer Regulation
initiates misconduct proceedings against lawyers who
practice law while suspended. As we’ve explained, the
Wisconsin Supreme Court is the ultimate regulatory authori-
ty for the practice of law in the state; it promulgates and
enforces the rules governing attorney licensure, bar mem-
bership, and ethics. The respective roles of the State Bar and
the Office of Lawyer Regulation flow directly from the court.
The justices rely on Crosetto v. State Bar of Wisconsin,
12 F.3d 1396 (7th Cir. 1993), but the relevant holding in that
case is narrow and does not support their contention that
File lacks standing to sue in federal court. Like this case,
Crosetto was a challenge to Wisconsin’s mandatory bar; the
plaintiffs named the State Bar, its executive director, and the
No. 20-2387 7
justices of the state supreme court as defendants. We af-
firmed the dismissal of the justices from the suit, explaining
that the plaintiffs’ attorney had conceded in oral argument
“that he was unaware of any Wisconsin lawyer ever being
disciplined by the [j]ustices for that lawyer’s failure to pay
dues to the integrated bar.” Id. at 1403. Based on that conces-
sion, we held that the claim against the justices was unripe.
Id.
Our ripeness holding must be understood in the context
of the arguments raised and addressed in the case. Im-
portantly, the automatic administrative suspension was
never discussed. Moreover, Crosetto was decided long before
the elaboration of pre-enforcement standing principles in
Driehaus, Ezell, and Schirmer (among other cases). Our ruling
in Crosetto was therefore a limited one; it does not control
here.
The justices also reprise their immunity defense, which
turns on a proper understanding of the nature of the claim
raised in this suit. The justices enjoy immunity from suits
challenging the exercise of their legislative power to draft
and promulgate rules regulating the legal profession. Sup.
Ct. of Va. v. Consumers Union of the U.S., Inc., 446 U.S. 719, 734
(1980). In contrast, they are not immune when sued in their
prosecutorial or enforcement capacity—provided that the suit
seeks prospective relief against the enforcement of the
regulatory regime. Id. at 736–37; Reeder v. Madigan, 780 F.3d
799, 805 (7th Cir. 2015).
In the district court, the parties debated which of these
two roles best describes the capacity in which the justices
have been sued here. The district judge, however, chose a
third option. He construed File’s suit as a claim against the
8 No. 20-2387
justices in their judicial capacity “as adjudicators of discipli-
nary matters.” File, 469 F. Supp. 3d at 888. Relying on
Pulliam, 466 U.S. at 541–42, he held that the justices are not
immune. File, 469 F. Supp. 3d at 888.
The judge reached the right destination by the wrong
route. This is a straightforward pre-enforcement suit seeking
prospective relief enjoining the justices from enforcing the
requirements of State Bar membership and payment of
compulsory dues. In short, the justices have been sued in
their enforcement capacity, not their legislative or judicial
capacity. See Sup. Ct. of Va., 446 U.S. at 734 (listing the “issu-
ance of, or failure to amend” legal-ethics rules as legislative
activities and “hear[ing] appeals” as adjudicative activity).
The justices resist this conclusion, arguing that because
the Office of Lawyer Regulation initiates and prosecutes
disciplinary proceedings, their role with respect to the rules
regarding bar membership is legislative only. As we’ve
noted, however, the court has plenary constitutional authori-
ty to regulate the legal profession. In re Crandall, 754 N.W.2d
501, 507 (Wis. 2008) (“[B]ecause the constitutional grants of
authority obligate this court to ensure that courts function
efficiently and effectively to provide for the due administra-
tion of justice, this court has the inherent and exclusive
authority and power to regulate and discipline members of
the bar in this state.”). The court created the Office of Legal
Regulation, which acts as its agent in the investigation and
initiation of misconduct complaints. The court supervises
and controls the actions of the agency and remains the
ultimate enforcement authority for the regulation of the bar.
WIS. S. CT. R. 21 pmbl.; id. R. 21.03 (providing that the direc-
tor of the Office of Lawyer Regulation is appointed by and
No. 20-2387 9
serves at the pleasure of the state supreme court); id. R. 21.12,
21.13 (providing that all components of the lawyer regulato-
ry system act on behalf of the state supreme court). Because
File seeks prospective relief enjoining the justices from
enforcing the requirements of the mandatory bar, they are
not immune.
Before moving on, a few words about the judge’s reason
for rejecting the justices’ immunity claim. As we have noted,
he reached the right result for the wrong reason. It was error
to rely on the Supreme Court’s decision in Pulliam, which
interpreted § 1983 to permit a claim for prospective relief
against a judicial officer acting in his judicial capacity.
466 U.S. at 541–42. Congress abrogated Pulliam’s holding in
1996 by amending § 1983 to expressly bar such claims.
Federal Courts Improvement Act of 1996, Pub. L. No. 104-
317, § 309, 110 Stat. 3847, 3853. As amended, § 1983 provides
that “in any action brought against a judicial officer for an
act or omission taken in such officer’s judicial capacity,
injunctive relief shall not be granted unless a declaratory
decree was violated or declaratory relief was unavailable.”
Though we have not had occasion to note the statutory
abrogation of Pulliam, other circuits have done so. See, e.g.,
Bolin v. Story, 225 F.3d 1234, 1242 (11th Cir. 2000); Justice
Network Inc. v. Craighead County, 931 F.3d 753, 763 (8th Cir.
2019); Moore v. Urquhart, 899 F.3d 1094, 1104–05 (9th Cir.
2018); Allen v. DeBello, 861 F.3d 433, 439 (3d Cir. 2017).
Summing up, File has standing to bring this pre-
enforcement suit against the justices for an injunction block-
ing the enforcement of the rules requiring bar membership
and payment of dues. And because the suit seeks prospec-
10 No. 20-2387
tive relief against them in their enforcement capacity, they
are not immune.
With those threshold questions resolved, we come now
to the merits. Our discussion can be brief. File’s claim is
squarely foreclosed by the Supreme Court’s decision in
Keller, which held that the compelled association required by
an integrated bar is “justified by the State’s interest in regu-
lating the legal profession and improving the quality of legal
services.” 496 U.S. at 13. Keller further held that an integrated
state bar “may … constitutionally fund activities germane to
those goals out of the mandatory dues of all members.” Id. at
14.
The Wisconsin Supreme Court follows Keller precisely.
See WIS. S. CT. R. 10.03(5)(b)1 (providing that “[e]xpenditures
that are not necessarily or reasonably related to the purposes
of regulating the legal profession or improving the quality of
legal services” may not be funded by compulsory dues). The
court’s rules also provide for an optional annual dues de-
duction for activities that are not germane to the purpose
identified in Keller and thus may not be funded by compul-
sory dues. Id. R. 10.03(5)(b)2.1
File responds that Keller has been fatally undermined by
more recent Supreme Court cases, culminating with Janus.
The tension between Janus and Keller is hard to miss. Keller
rests largely on Abood v. Detroit Board of Education, 431 U.S.
1 File has not raised a Keller “germaneness” challenge to any specific
State Bar activity funded through compulsory dues. Nor has he chal-
lenged the adequacy of the dues-deduction procedures or raised a
freestanding compelled-association claim distinct from his compelled-
speech claim challenging the compulsory dues.
No. 20-2387 11
209, 235–36 (1977), which rejected a First Amendment chal-
lenge to a law requiring public employees to pay mandatory
union dues. Analogizing the relationship between a union
and its members to the relationship between a state bar
association and its members, Keller applied Abood to uphold
California’s mandatory bar. 496 U.S. at 12. The Court over-
ruled Abood in Janus, holding that it “was poorly reasoned,”
had “led to practical problems and abuse,” and was “incon-
sistent with other First Amendment cases and ha[d] been
undermined by more recent decisions.” 138 S. Ct. at 2460.
With Abood overruled, the foundations of Keller have
been shaken. But it’s not our role to decide whether it re-
mains good law. Only the Supreme Court can answer that
question. See State Oil Co. v. Khan, 522 U.S. 3, 20 (1997) (“[I]t
is this Court’s prerogative alone to overrule one of its prece-
dents.”). Though we long ago suggested that a lower court
might be free to declare that a Supreme Court precedent has
been overruled by implication, see Levine v. Heffernan,
864 F.2d 457, 461 (7th Cir. 1988), we now know that’s incor-
rect. The Court’s instructions are clear: “If a precedent of this
Court has direct application in a case, yet appears to rest on
reasons rejected in some other line of decisions, the Court of
Appeals should follow the case [that] directly controls,
leaving to this Court the prerogative of overruling its own
decisions.” Agostini v. Felton, 521 U.S. 203, 237 (1997) (quota-
tion marks omitted).
On this understanding, we have already declined an invi-
tation to find that Janus implicitly overruled Keller, though
we did so in an unpublished summary decision. Jarchow v.
State Bar of Wis., No. 19-3444, 2019 WL 8953257, at *1 (7th
Cir. Dec. 23, 2019). Other circuits have reached the same
12 No. 20-2387
conclusion in published opinions. Schell v. Chief Just. & Justs.
of the Okla. Sup. Ct., 11 F.4th 1178, 1190–91 (10th Cir. 2021)
(recognizing that Keller remains binding); Taylor v. Buchanan,
4 F.4th 406, 409 (6th Cir. 2021) (same); McDonald v. Longley,
4 F.4th 229, 243 n.14 (5th Cir. 2021) (same); Boudreaux v. La.
State Bar Ass’n, 3 F.4th 748, 755 (5th Cir. 2021) (same); Crowe
v. Or. State Bar, 989 F.3d 714, 725 (9th Cir. 2021) (per curiam)
(same).
The Supreme Court denied certiorari in Jarchow, with two
justices dissenting. Jarchow v. State Bar of Wis., 140 S. Ct. 1720,
1721 (2020) (Thomas, J., joined by Gorsuch, J., dissenting
from the denial of certiorari). The Court has turned away
several additional opportunities to revisit Keller based on
Janus—including, most recently, in two cases just a few
weeks ago. Firth v. McDonald, No. 21-974, 2022 WL 994348(U.S. Apr. 4, 2022) (mem.); Schell v. Darby, No. 21-779,
2022 WL 994342 (U.S. Apr. 4, 2022) (mem.); see also Crowe v.
Or. State Bar, 142 S. Ct. 79 (2021) (mem.). Keller therefore
remains binding on us. File must seek relief from the
Supreme Court.
AFFIRMED