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7th Circuit reaffirms Wisconsin’s controversial Act 10 collective bargaining law as constitutional

Wisconsin’s Act 10 (Wis. Stat. § 66.0508) made significant changes to public employee unions in that it prohibited government employers from collectively bargaining with their general employees over anything except base wages, made it more challenging for general‐employee unions to obtain  certification  as  exclusive  bargaining  agents, and precluded  general‐employee unions from using  automatic  payroll deductions  and  fair‐share agreements.

The plaintiffs,  two  public‐employee  unions  and an individual union member, argue that these changes infringe their First Amendment petition and association rights. While one case already decided that the Act was constitutional (Wisconsin Educ. Ass’n Council v. Walker, 705 F.3d 640 (7th Cir. 2013)), the plaintiffs pled other First Amendment and Equal Protection Clause theories unique to this case. The District Court dismissed the complaint pursuant to Fed. R. Civ. P. 12(c), granting judgment on the pleadings. Plaintiffs appealed.

The Court first had to determine how to interpret provision 1M of the Act (“Except as provided under subch. IV of ch. 111 [the amended, post–Act 10 MERA], no local governmental unit may collectively bargain with its employees”). Wisconsin surprisingly argued to the effect that provision 1m merely prohibited a local government from being “obligated” to negotiate with a labor union rather than preventing local governments from negotiating altogether outside of the issue of base wages. Were this the case, there would be no controversy. However, the 7th Circuit ultimately made its own interpretation of the provision since the Wisconsin Supreme Court had not yet done so despite several pending cases in the state. The 7th Circuit interpreted the provision “to prohibit municipal employers from reaching binding agreements with their general employees on a collective basis, if the agreement concerns anything other than the employees’ base wages.”

The Court then turned to the main arguments, which were threefold: 1) 1st Amendment – Petitions Clause; 2) 1st Amendment – Association; and 3) Equal Protection.

1.  Petitions Clause

The unions acknowledged the applicability of the Supreme Court case of Smith v. Highway Employees, 441 U.S. 463, 99 S. Ct. 1826, 60 L. Ed. 2d 360 (1979) (per curiam). In that case, the Court ruled that simply because employees had unionized, the employer did not have to hear out what the union had to say (i.e., the right to free speech does not necessarily obligate the State to listen). More specifically, the State Highway Commission could hear grievances from individuals and choose not to hear the same from unions.

In the instant matter, the unions argued that the Act’s effect took it one step further in that it removes a government’s option of whether or not to listen to a union on any issue other than base wages. However, the 7th Circuit noted another Supreme Court case on point, Minnesota State Bd. for Community Colleges v. Knight, 465 U.S. 271, 104 S. Ct. 1058, 79 L. Ed. 2d 299 (1984). In that case, the Supreme Court was faced with the issue where faculty instructors who did not wish to join the union serving as their bargaining representative argued that Minnesota’s “restriction on participation in the nonmandatory- subject exchange process” violated their First Amendment rights. Id. at 273. The Supreme Court upheld its application in Smith and held that there was “no constitutional right to force the government to listen to their views.” Id. at 283. Notably, the Knight Court and the 7th Circuit here underscored that there was nothing preventing less formalized meetings – just collective bargaining – and that some Wisconsin municipalities already had less formal meeting procedures with unions.

The 7th Circuit thus reaffirmed that there is no right to collectively bargain as it would in essence recognize a constitutional right to government policymaking. “Public officials at all levels of government daily make policy decisions based only on the advice they decide they need and choose to hear. To recognize a constitutional right to participate directly in government policymaking would work a revolution in existing government practices.” Knight, 465 U.S. at 284.

2.  Association

This portion was more straightforward since the 7th Circuit already held that nothing in the Act prevented unions from forming or associating. “An  organization  cannot  come  up  with  an  associational purpose—even a purpose that involves speech—and then require support from the  state in  order to realize its goal.”

3.  Equal Protection

Here, the unions argue that they are treated differently than the individuals who make up such unions in that local governments may negotiate with individual employees but not employee unions. Analyzing this argument under a rational basis lens, the unions would concede this point. However, they argued that the Act’s effect infringes upon rights to associate (the State’s favoring individuals over unions punishes the right to associate) and thus invokes strict scrutiny. The 7th Circuit repeated its position that the freedom to associate was not infringed upon and thus upheld the rational basis review.

What does it all mean? It is an interesting case since similar legislation may foreseeably be implemented in other States. It will also be interesting to see whether the Wisconsin Supreme Court interprets the statute differently or adopts the 7th Circuit’s approach, since that issue remains open. It seems reasonable that the fight over this will move there.

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Seventh Circuit affirms denial of Notre Dame’s preliminary injunction request

In a rather lengthy opinion issued on Friday, the Seventh Circuit affirmed the denial of Notre Dame’s request for a preliminary injunction from participating in the Affordable Care Act. The abridged version is that the Court found there was not a likelihood of success on the merits and on multiple occasions stressed that its opinion was limited and preliminary (or without prejudice in essence). In the end, the undoing for Notre Dame was that it could not overcome the provision that the government would pick up the tab for the contraceptive services that Notre Dame could refuse to provide. Notre Dame’s argument that this action would make it something of an enabler to contraceptive services was unavailing. Judge Posner authored the opinion for the majority and Judge Flaum dissented, finding that Notre Dame likely would succeed on the merits at the District Court level.

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Michael Jordan treats Jewel like it’s Patrick Ewing

The Seventh Circuit holds that a Jewel congratulatory advertisement to Michael Jordan is commercial speech and therefore not subject to the protections of the First Amendment. As such, Jewel may be liable to Jordan for unauthorized use of his image. Jewel attempted to equate its ad to corporate practice of commending local community groups on notable achievements, which the Court did not readily accept as true. Further, the Court noted that the District Court erred in applying the “inextricably intertwined” test in that the test should be whether the commercial and noncommercial elements of the speech could be legally or practically separated.

media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2014/D02-19/C:12-1992:J:Sykes:aut:T:fnOp:N:1292976:S:0.

And for those who feel they are missing a key reference:

7th Circuit affirms $413,000,000 judgment for discovery abuses

This case, originating out of IL ND, involved a shareholder dispute in a Polish business park venture. The crux of the complaint was that the defendants were using foreign accounts as a clearinghouse to hide funds. As you might imagine, numerous violations of court orders ensued. The best (or worst) of these was a protracted request for a hard drive that one defendant finally remembered he had given to his kids to play with two years prior. So clearly the children were to blame for its demise. Further notes of interest were that retired Mag. Nan Nolan was willing to let the defendants off with a proverbial slap on the wrist before plaintiffs took the matter to presiding Judge Elaine Bucklo, who took a decidedly different approach.

Default judgment for $413,000,000 and contempt orders were affirmed and stay of case was denied.

J. Flaum authored the opinion with J. Easterbrook and J. Tinder concurring.

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Fields v. Warrie (1-23-14)

7th Circuit (Posner; Flaum concurs and Sykes dissents w/ sep. opinion). Civil Rights – absolute immunity for prosecutors.

Interesting civil rights opinion by Judge Posner last week on immunity for Cook County Illinois prosecutors in 1983 claims. The Plaintiff, Fields, was allegedly wrongfully prosecuted with evidence falsified by the prosecutor before he was arrested or indicted. He subsequently spent over 17 years in prison and was finally released and given a certificate of innocence from the Cook County court. He then filed suit against, inter alia, the prosecutors who falsified the evidence against him. The prosecutors moved for dismissal on grounds of absolute immunity and the District Court denied it. This appeal ensued.

By way of background, prosecutors, particularly those in Indiana are nearly impossible to sue in a civil rights action. They enjoy absolute immunity for their actions in the decision to prosecute defendants and in their case against the same defendants. This immunity applies to them in their individual capacity and thus bars 1983 actions against prosecutors even when they act with malice. The immunity does not apply to actions taken within an investigatory capacity prior to indictment or arrest, though, in which case qualified immunity applies. In their official capacity, they also enjoy 11th Amendment protections since Indiana Federal District Courts have long held that the Indiana Constitution deems them an arm of the state rather than a county. (On a side note, when I last looked in 2008, Illinois held the opposite to be true thereby eliminating this bar to recovery.)

With that background in mind, Judge Posner’s opinion deals with what occurs when a prosecutor falsifies evidence in the investigation stage and the same prosecutor goes on to prosecute the wrongfully accused. Essentially, Judge Posner states that such an action enjoys neither absolute nor qualified immunity since fabriaction is a clear violation of due process. Citing Whitlock  v. Brueggemann,  682  F.3d  567 (7th Cir.  2012), an opinion authored by the current Chief Judge Diane Wood, Judge Posner finds that coerced testimony may enjoy immunity since such evidence may turn out to be true but such a rationale cannot apply to falsified evidence, which is inherently false. Therefore, regardless of whether a harm results from the falsification, the immunity itself is lost by virtue of the act of falsification during the investigation phase.

What does it mean? Prosecutors, particularly those in Indiana, have long been impossible to file suit against for alleged civil rights violations, even those where qualified immunity may apply. This opinion certainly provides a roadmap on what language to use and how to frame a complaint against a prosecutor to allow an attorney to a) see whether a viable claim exists and b) to move past the 12(b)(6) motion that always meets these actions.

media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2014/D01-23/C:13-1195:J:Posner:aut:T:fnOp:N:1278458:S:0.

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