Eric Brown v. AFSCME ( 2022 )

United States Court of Appeals
For the Eighth Circuit
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No. 21-1640
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Eric Brown; Jody Tuchtenhagen; Debbie Schultz, on behalf of themselves and
others similarly situated,
lllllllllllllllllllllPlaintiffs - Appellants,
v.
American Federation of State, County and Municipal Employees, Council No. 5, AFL-CIO,
lllllllllllllllllllllDefendant - Appellee.
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No. 21-1684
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Mark Fellows; Alicia Bonner; Catherine Wyatt, on behalf of themselves and
others similarly situated,
lllllllllllllllllllllPlaintiffs - Appellants,
v.
Minnesota Association of Professional Employees,
lllllllllllllllllllllDefendant - Appellee.
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Appeals from United States District Court
for the District of Minnesota
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Submitted: February 16, 2022
Filed: July 25, 2022
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Before LOKEN, COLLOTON, and SHEPHERD, Circuit Judges.
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COLLOTON, Circuit Judge.
These are appeals by current and former Minnesota state employees who seek
damages for money deducted from their paychecks by unions that represented their
local bargaining units. Although the Supreme Court held the deduction practice
unlawful in Janus v. American Federation of State, County, & Municipal Employees,
138 S. Ct. 2448 (2018), the district court* determined that the unions acted in good-
faith reliance on state statutes and existing judicial precedent. Accordingly, the court
ruled that the unions were entitled to a defense to liability under 42 U.S.C. § 1983,
and dismissed the employees’ claims. We agree, and therefore affirm.
Minnesota law permits public employees to bargain collectively with the State
by designating a labor union to serve as the exclusive representative for employees
in their bargaining unit. Minn. Stat. § 179A.06, subdiv. 2. Employees may decline
to join the union. Id. If an employee chooses not to join, however, state law permits
the union to require the employee to contribute a so-called “fair-share” fee equal to
the cost of membership dues, less the cost of benefits available only to members. Id.,
subdiv. 3. The statute caps these fees at eighty-five percent of what the union charges
for regular membership dues. Id. To collect fees from a non-member employee, the
union must send a written notice to the employee’s public employer, at which point
*
The Honorable Susan Richard Nelson, United States District Judge for the
District of Minnesota.
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the employer is required to “deduct the fee from the earnings of the employee and
transmit the fee” to the union after thirty days. Id.
In Abood v. Detroit Board of Education, 431 U.S. 209 (1977), the Supreme
Court held that a similar regime permitting public-sector unions to compel the
payment of fees from state employees who chose not to join the unions did not violate
the First Amendment free speech rights of the employees. The Court concluded that
the unions could extract fair-share fees from non-members so long as the fees were
used to fund projects “germane to [the unions’] duties as collective-bargaining
representative,” rather than ideological or political causes. Id. at 235-36. Forty-one
years later in Janus, the Supreme Court overruled Abood. 138 S. Ct. at 2460. The
Court held that public-sector unions violated the First Amendment by deducting fair-
share fees from non-member employees without first obtaining affirmative consent
from the employees. Id. at 2486.
The employees allege that between May 2014 and the 2018 decision in Janus,
the unions representing their bargaining units unconstitutionally deducted fair-share
fees from their paychecks. The employees sued the unions under § 1983 on behalf
of themselves and a putative class, and sought damages equal to the amounts
deducted from their paychecks before Janus. The unions moved to dismiss the
complaint. The unions did not dispute that collecting these fees ran afoul of the rule
announced in Janus. But the unions asserted that for deductions taken until Janus
was decided, they were entitled to rely “in good faith upon then-valid Minnesota law
and then-binding Supreme Court precedent in receiving Plaintiffs’ fair-share fees
payments.”
The district court granted the motions to dismiss. Joining “every court to
consider the issue,” the court concluded “that private actors who act in good faith
reliance on a state statute and Supreme Court case law holding that statute
constitutional have an affirmative defense to § 1983 liability.” The court concluded
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that “[t]he Unions’ reliance on [§ 179A.06] was supported by Abood and forty years
of precedent,” and that the employees had not alleged that the unions acted in bad
faith. The employees appeal, and argue that there is no good-faith defense to liability
for damages under § 1983.
Although this court has yet to address whether private parties sued under
§ 1983 may invoke a good-faith defense, the issue has been much discussed
elsewhere. The Supreme Court broached the topic in Lugar v. Edmondson Oil Co.,
457 U.S. 922 (1982), a case holding that certain private actors could be subject to suit
under § 1983 for acting under color of state law. Id. at 941-42. Responding to a
concern that a private individual might be held liable for innocent reliance on a state
law that was only later declared unconstitutional, see id. at 955-56, 956 n.14 (Powell,
J., dissenting), the Court said that “this problem should be dealt with not by changing
the character of the cause of action but by establishing an affirmative defense.” Id.
at 942 n.23 (opinion of the Court). But because the question of a defense was not
before it, the Court left the issue for another day. Id.
A decade later, the Court raised the possibility again. In Wyatt v. Cole, 504
U.S. 158 (1992), the Court held that private actors subject to suit under § 1983 could
not invoke qualified immunity. Id. at 168-69. At the same time, however, the Court
did “not foreclose the possibility that private defendants faced with § 1983 liability
. . . could be entitled to an affirmative defense based on good faith and/or probable
cause or that § 1983 suits against private, rather than governmental, parties could
require plaintiffs to carry additional burdens.” Id. at 169.
In separate opinions, a majority of the Justices found support for a good-faith
defense in the common law, and suggested that the defense would be available on
remand. See id. at 172-75 (Kennedy, J., concurring); id. at 176-77 (Rehnquist, C.J.,
dissenting). Two Justices concluded that there was “support in the common law for
the proposition that a private individual’s reliance on a statute, prior to a judicial
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determination of unconstitutionality, is considered reasonable as a matter of law.” Id.
at 173-74 (Kennedy, J., concurring). Three others believed that the defendants could
prevail if “their reliance on the . . . statute was objectively reasonable for someone
with their knowledge of the circumstances.” Id. at 178 (Rehnquist, C.J., dissenting).
These two opinions debated whether a showing of subjective bad faith by the
defendant would obviate the defense.
On remand, the Fifth Circuit concluded that the separate opinions in Wyatt
“largely answered” the question whether a defendant in a § 1983 action may assert
a good-faith defense. The court held “that private defendants sued on the basis of
Lugar may be held liable for damages under § 1983 only if they failed to act in good
faith in invoking the unconstitutional state procedures.” Wyatt v. Cole, 994 F.2d
1113, 1118 (5th Cir. 1993).
Since Wyatt, seven more circuits have recognized a good-faith defense for
private parties who relied on a presumptively valid state statute when they allegedly
deprived a plaintiff of constitutional rights. Each of these courts has held that the
defense barred a claim against a public-sector union to recover fair-share fees
collected before Janus. See Akers v. Md. State Educ. Ass’n, 990 F.3d 375, 382 (4th
Cir. 2021); Doughty v. State Emps.’ Ass’n of N.H., 981 F.3d 128, 130, 132 n.3 (1st
Cir. 2020); Diamond v. Pa. State Educ. Ass’n, 972 F.3d 262, 271 (3d Cir. 2020)
(opinion of Rendell, J.); id. at 284 (Fisher, J., concurring in the judgment); Wholean
v. CSEA SEIU Loc. 2001, 955 F.3d 332, 334-36 (2d Cir. 2020); Lee v. Ohio Educ.
Ass’n, 951 F.3d 386, 391 (6th Cir. 2020); Danielson v. Inslee, 945 F.3d 1096, 1098-
99 (9th Cir. 2019); Janus v. Am. Fed’n of State, Cnty. & Mun. Emps., 942 F.3d 352,
364-66 (7th Cir. 2019). No circuit has ruled otherwise.
Challenging this consensus, the employees rely on the text of § 1983. The
statute provides that “[e]very person” who acts under color of state law to deprive
another of his constitutional rights “shall be liable to the party injured in an action at
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law, suit in equity, or other proper proceeding for redress.” 42 U.S.C. § 1983. The
employees argue that a defense predicated on a defendant’s good faith would
undermine the promise of a remedy for “every person” whose rights are violated.
They urge that this court may not depart from the statutory text and “create
immunities based solely on our view of sound policy.” Rehberg v. Paulk, 566 U.S.
356, 363 (2012).
While federal courts may not “make a freewheeling policy choice” to graft a
defense onto § 1983, Malley v. Briggs, 475 U.S. 335, 342 (1986), a court properly
may read § 1983 against the background of tort liability as it existed when the statute
was enacted. See City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 258 (1981).
That approach considers the common-law torts that are most analogous to the claim
at issue. Wyatt, 504 U.S. at 163-64. Although § 1983 is not “simply a federalized
amalgamation of pre-existing common-law claims,” Rehberg, 566 U.S. at 366, it is
sometimes appropriate for “a court to adopt wholesale the rules that would apply in
a suit involving the most analogous tort.” Manuel v. City of Joliet, 137 S. Ct. 911,
920 (2017). Where a § 1983 claim “implicates the same concerns” as an analogous
common-law claim, McDonough v. Smith, 139 S. Ct. 2149, 2157 (2019), and the rule
governing the common-law claim “is consistent with ‘the values and purposes of the
constitutional right at issue,’” Thompson v. Clark, 142 S. Ct. 1332, 1337 (2022)
(quoting Manuel, 137 S. Ct. at 921), there is a good reason to think that Congress
would have expected the common-law principles to govern the § 1983 claim.
Several circuits have deemed § 1983 actions alleging Janus violations
analogous to common-law actions for abuse of process or malicious prosecution. See
Doughty, 981 F.3d at 134. The employees resist this line of authority and suggest that
“[a] First Amendment claim for compelled subsidization of speech has no common
law equivalent.” But if forced to choose among common-law analogues, they say that
the strict-liability tort of conversion is the better match.
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We think the analogy to conversion is strained. Conversion is the wrongful
interference with a plaintiff’s right to control a chattel. See Thomas M. Cooley, A
Treatise on the Law of Torts 447-48 (1879); see also Restatement (Second) of Torts
§ 222A (Am. L. Inst. 1965). Here, the source of the constitutional injury is not
interference with the employees’ rights to control their money. Rather, the injury
arises from the unions’ ability to compel the employees to speak through their
contributions in support of a cause that they do not wish to endorse. See Akers, 990
F.3d at 382; Danielson, 945 F.3d at 1102.
The employees’ claims are more comparable to the torts of abuse of process
and malicious prosecution. At root, these torts concern the misuse of state procedures
for an improper or unlawful end. Abuse of process, for example, occurs when an
actor “willfully” uses legal process “for a purpose not justified by the law.” Cooley,
supra, at 185, 189-90. Here, Minn. Stat. § 179A.06 allowed public-sector unions to
enlist the State’s coercive power and collection procedures to deduct fees from the
employees’ pay. The crux of the employees’ claim is that the unions deployed these
processes for an unconstitutional purpose—to subsidize union speech. Ogle v. Ohio
Civ. Serv. Emps. Ass’n, 951 F.3d 794, 797 (6th Cir. 2020) (per curiam).
At common law, both abuse of process and malicious prosecution required a
plaintiff to show malice—that is, an improper purpose for bringing the action or using
the process. W. Page Keeton et al., Prosser & Keeton on the Law of Torts § 119, at
870-71 (5th ed. 1984); id. § 121, at 897-98; Cooley, supra, at 185-90. Malicious
prosecution further required the plaintiff to show that the defendant instituted
proceedings without reasonable grounds for doing so. Keeton et al., supra, § 119, at
870-71, 876; Cooley, supra, at 184-85.
We agree with other circuits that a § 1983 plaintiff bringing an analogous suit
should be required to make a similar showing of malice. See Doughty, 981 F.3d at
134-35. Therefore, a plaintiff who sues a private-party defendant based on the
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defendant’s employment of a state law that has been declared unconstitutional must
show that the defendant was not acting in good-faith reliance on that law. Strictly
speaking, it may be “something of a misnomer to describe the common law as
creating a good-faith defense,” but the label is “a useful shorthand” that captures the
burden that the common law suggests a plaintiff should bear in such an action. Wyatt,
504 U.S. at 176 n.1 (Rehnquist, C.J., dissenting); id. at 172 (Kennedy, J., concurring);
see Doughty, 981 F.3d at 132 n.3. By requiring the plaintiff to negate a private-party
defendant’s good faith as an element of his or her claim, the “defense” protects parties
who “unwittingly cross [the] line” into unconstitutionality while acting “in reliance
on a presumptively valid state law—those who had good cause in other words to call
on the governmental process in the first instance.” Ogle, 951 F.3d at 797.
In an effort to overcome the defense, the employees assert that the unions
should have predicted that the Supreme Court would overrule Abood and declare the
collection of fair-share fees unconstitutional. But rumblings that members of the
Court were unhappy with existing precedent, e.g., Harris v. Quinn, 573 U.S. 616,
635-638 (2014), are “hardly unique to this area,” and even overt judicial signals
sometimes do not result in the overruling of the precedent in question. Janus, 942
F.3d at 366 (citing Dickerson v. United States, 530 U.S. 428 (2000)). “The Rule of
Law requires that parties abide by, and be able to rely on, what the law is, rather than
what the readers of tea-leaves predict that it might be in the future.” Id. The
employees do not allege that the unions subjectively believed that they were violating
the rights of the employees, so we need not address whether such a showing would
overcome the unions’ objectively reasonable reliance on the statute in question.
Compare Wyatt, 504 U.S. at 173-74 (Kennedy, J., concurring), with id. at 177-78(Rehnquist, C.J., dissenting).
The employees further maintain that even if a good-faith defense exists, the
defense should be confined to procedural due process violations, where malice or lack
of probable cause are elements of the constitutional tort. As support for this
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proposition, they assert that the earliest cases to recognize the defense involved
alleged due process violations. See Pinsky v. Duncan, 79 F.3d 306, 313 (2d Cir.
1996); Jordan v. Fox, Rothschild, O’Brien & Frankel, 20 F.3d 1250, 1276 (3d Cir.
1994); Wyatt, 994 F.2d at 1121. The employees say this “claim-specific” defense
should not extend to their Janus claims, because “malice and lack of probable cause
are not elements of, or a defense to, a First Amendment deprivation.”
The trouble with this argument is that malice and lack of probable cause are not
elements of a procedural due process violation either. See Stevenson v. Blytheville
Sch. Dist. No. 5, 800 F.3d 955, 965-66 (8th Cir. 2015). A due process claim concerns
the inadequacy of the procedures afforded the plaintiff, rather than the misuse of
those procedures. Doughty, 981 F.3d at 135. There ordinarily is no requirement that
a plaintiff show that officials who established or implemented those procedures acted
with malice or without cause. Yet the generally accepted analogies for § 1983 actions
against private-party defendants who used constitutionally deficient attachment or
replevin procedures are the torts of abuse of process or malicious prosecution. See
id. at 134-36 (collecting cases). This is so because the § 1983 employees, like
employees in suits for the common-law torts, sought compensation for a private
party’s use of state-backed processes to acquire the employees’ property. Id. While
not a “perfect match,” the resemblance was close enough to justify importing a good-
faith requirement for a procedural due process claim brought under § 1983. Id. The
same analogy applies where the use of state-backed processes results in a violation
of the First Amendment rather than the Due Process Clause.
Finally, the employees assert that the good-faith defense is inconsistent with
principles of retroactivity. Generally, when the Supreme Court applies a rule, “that
rule is the controlling interpretation of federal law and must be given full retroactive
effect.” Harper v. Va. Dep’t of Tax’n, 509 U.S. 86, 97 (1993). But the retroactivity
of a decision acknowledging a federal right is distinct from the availability of a
remedy for a past violation of that right. While reliance interests alone cannot be
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used to circumvent a decision’s retroactive reach, a “general legal rule” that “reflects
both reliance interests and other significant policy justifications” may trump a new
rule of law and prevent liability from attaching. Reynoldsville Casket Co. v. Hyde,
514 U.S. 749, 758-59 (1995). The Court cited qualified immunity as an example.
Even assuming the right recognized in Janus applies retroactively, the good-faith
defense qualifies as another such “general legal rule.”
In sum, because the unions collected fair-share fees under Minn. Stat.
§ 179A.06 at a time when the procedure employed had been deemed constitutional
by the Supreme Court, their reliance on the statute was objectively reasonable, and
they are entitled to a good-faith defense. Even if subjective intent were deemed
relevant, the employees have pleaded no facts to support a plausible inference that the
unions collected these fees in subjective bad faith. The good-faith defense thus bars
the employees’ claims for damages.
The judgments of the district court are affirmed.
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