972 F.3d 262
3rd Cir.2020Background
- Pennsylvania law (71 Pa. Stat. § 575) and decades of Supreme Court precedent (Abood) authorized public-sector "fair-share" fees deducted from nonmembers’ pay to fund union collective-bargaining activities.
- In Janus v. AFSCME (2018), the Supreme Court overruled Abood and held that compelled fair-share fees violate the First Amendment.
- Nonmember public employees (Diamond; Wenzig) sued their unions under 42 U.S.C. § 1983 seeking repayment of fair-share fees taken pre-Janus. District courts dismissed, concluding unions raised a good-faith defense.
- The Third Circuit (majority) affirmed: private unions that collected fees in good-faith reliance on then-governing statute and Abood are shielded from monetary liability under § 1983.
- Judge Fisher concurred on historical/common-law grounds (reliance/voluntary-payment rule); Judge Phipps dissented, arguing no firm common-law basis or fit with § 1983’s purpose for a transsubstantive good-faith affirmative defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether private parties (unions) may assert a good-faith defense to § 1983 monetary claims for collecting fair-share fees pre-Janus | Diamond/Wenzig: No; unions should return money taken in violation of First Amendment | Unions: Yes; they relied in good faith on state statute and controlling Supreme Court precedent (Abood) | Held: Yes — a narrow good-faith defense applies where defendants relied on statute and unambiguous precedent, barring monetary liability |
| Whether plaintiffs seek restitution (equitable) or damages (legal) and whether that distinction avoids the good-faith defense | Plaintiffs: They seek return of funds (restitution) so good-faith defense inapplicable | Unions: Plaintiffs seek recovery from general assets (legal remedy); good-faith defense still applies | Held: Plaintiffs pleaded legal recovery; good-faith defense bars their claims |
| Whether discovery into unions’ internal use of fees or compliance with Abood is necessary | Plaintiffs: Need discovery to show improper uses or bad faith to defeat defense | Unions: Claims arise from reliance on Abood/statute, not alleged misuses; no discovery needed | Held: No discovery required on Abood-compliance for purposes of good-faith defense; reliance, not fee-spending, is decisive |
| Whether Janus’s rule is treated as retroactive for recovery and whether that affects the good-faith defense | Plaintiffs assume Janus applies retroactively so fees became unconstitutional ab initio | Defendants: Even if Janus is retroactive, previously available good-faith/voluntary-payment defenses preclude monetary liability | Held: Court assumed retroactivity for argument’s sake but held good-faith defense independently bars recovery |
Key Cases Cited
- Janus v. AFSCME Council 31, 138 S. Ct. 2448 (2018) (overruled Abood; held compelled public‑sector agency fees violate the First Amendment)
- Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) (previously upheld public-sector fair‑share fees; overruled by Janus)
- Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250 (3d Cir. 1994) (recognized narrow good‑faith defense for private parties sued under § 1983)
- Wyatt v. Cole, 504 U.S. 158 (1992) (refused Harlow‑style qualified immunity for private parties; left open possibility of common‑law rooted good‑faith defense)
- Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982) (private parties may be liable under § 1983 when acting under color of state law)
- Harlow v. Fitzgerald, 457 U.S. 800 (1982) (established objective qualified immunity for government officials; distinguished from private‑party context)
- Pierson v. Ray, 386 U.S. 547 (1967) (look to common‑law immunities when construing § 1983 defenses)
- Janus v. AFSCME (Janus II), 942 F.3d 352 (7th Cir. 2019) (followed by several circuits; accepted narrow good‑faith defense where unions relied on statute and precedent)
- Danielson v. Inslee, 945 F.3d 1096 (9th Cir. 2019) (same: good‑faith defense available to unions that relied on prevailing law)