Mark Janus v. American Federation of State, 942 F.3d 352

For decades Abood (1977) allowed public‑sector unions designated as exclusive representatives to collect fair‑share (agency) fees from nonmembers to cover collective‑bargaining and grievance costs, excluding ideological expenditures.
Mark Janus, an Illinois state employee who declined union membership, paid monthly fair‑share fees withheld by CMS under a collective‑bargaining agreement naming AFSCME as exclusive representative.
The Supreme Court overruled Abood in Janus v. AFSCME (2018), holding mandatory agency fees violate the First Amendment; the Court remedied prospectively and remanded for further proceedings on relief.
Janus sued AFSCME under 42 U.S.C. § 1983 seeking refund of fees paid before the Janus decision; the district court granted summary judgment for AFSCME based on a good‑faith defense.
The Seventh Circuit assumed Janus applies retroactively to pending cases for argument, held AFSCME is a suable “person” that acted under color of state law, recognized a narrow good‑faith defense for private actors who reasonably relied on longstanding statutory and Supreme Court precedent, and affirmed denial of money damages (leaving declaratory and injunctive relief).
The court emphasized restitution was inequitable because nonmembers received union representation and related benefits in exchange for the fees; the good‑faith defense is narrow and rarely available.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Retroactivity of Janus decision	Janus should apply retroactively to plaintiffs and entitle refunds (relying on Harper)	Retroactivity not automatic; remedy can account for reliance interests	Court assumed retroactivity for argument but resolved relief based on defenses; did not award refunds
§1983 liability — is the union a proper defendant and state actor?	Union is private; liability under §1983 limited	AFSCME is a "person" and its receipt of fees via CMS is attributable to state action	AFSCME is a suable "person" and acted under color of state law
Statute of limitations / accrual	Claim timely from Janus decision	Collection occurred earlier but plaintiff reasonably relied on settled precedent	Claim accrues at Janus (June 27, 2018); suit timely under two‑year Illinois limitations period
Availability of good‑faith defense; entitlement to monetary relief	Janus argues §1983 imposes mandatory liability and seeks refund of all fees paid	AFSCME claims good‑faith reliance on Abood and state law bars damages; restitution inequitable because services were received	Court recognizes a narrow good‑faith defense for private parties relying on long‑standing statute and precedent; denies money damages, affirms declaratory/injunctive relief only

Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) (upholding public‑sector agency‑shop fees but forbidding use for ideological activities)
Janus v. AFSCME, Council 31, 138 S. Ct. 2448 (2018) (overruling Abood; mandatory agency fees violate the First Amendment)
Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922 (1982) (private parties may act "under color of" state law via state‑created procedures)
Wyatt v. Cole, 504 U.S. 158 (1992) (discussing scope of immunities and defenses for private actors sued under §1983)
Railway Emp’t Dep’t v. Hanson, 351 U.S. 225 (1956) (federal precedent approving agency‑shop arrangements)
Int’l Ass’n of Machinists v. Street, 367 U.S. 740 (1961) (limits on union use of nonmember fees to collective‑bargaining activities)
Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993) (discussing retroactivity of Supreme Court decisions)
Gilpin v. AFSCME, 875 F.2d 1310 (7th Cir. 1989) (restitution principles: benefits received may preclude equitable recovery)