United Food & Commercial Workers Local 99 v. Brewer, 817 F. Supp. 2d 1118

Arizona SB 1365 (Protect Arizona Employees’ Paychecks from Politics Act) amended A.R.S. § 23-361.02, requiring employers to disclose or cap the share of payroll-deducted funds used for political purposes.
SB 1365 exempts deductions for charitable organizations, health/retiree/welfare benefits, taxes, and unions’ political action committees, and excludes five public safety employee groups from the definition of employee.
The law imposes a minimum $10,000 fine if the reported percent used for political purposes is exceeded, and requires annual employee authorization for payroll deductions.
SB 1365 was scheduled to take effect October 1, 2011; plaintiffs challenged SB 1365 (and SB 1363) as unconstitutional. Plaintiff-Intervenors moved for a preliminary injunction; the court granted the intervention and granted an injunction against enforcement of SB 1365 pending merits.
The court concluded it would not reach other claims after finding probable First Amendment violations and that the statute is not severable in a way that preserves neutrality, resulting in an injunction against enforcement.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does SB 1365 violate the First Amendment by viewpoint discrimination?	Plaintiffs contend SB 1365 burdens unions’ political speech and discriminates by speaker.	Defendants contend law regulates payroll deductions generally for political activity.	SB 1365 likely violates First Amendment; underinclusive and viewpoint-discriminatory.
Is SB 1365 subject to strict scrutiny due to underinclusiveness and speaker-based targeting?	Exemptions create disparate burdens on unions and similarly situated groups.	Not explicitly argued here; law applied generally to organizations with political activities.	SB 1365 is underinclusive and subject to strict scrutiny; likely invalid.
Can the statute be severed to cure constitutional defects and achieve neutrality?	Severing exemptions would render the statute more neutral.	Unclear; court must determine severability.	Court cannot sever the provisions without undermining the statute as enacted; remains flawed.

Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353 (Supreme Court 2009) (upheld payroll-deduction prohibition; underinclusiveness matters emphasized)
City of Ladue v. Gilleo, 512 U.S. 43 (Supreme Court 1994) (underinclusiveness can reveal government viewpoint bias)
R.A.V. v. St. Paul, 505 U.S. 377 (Supreme Court 1992) (content discrimination analysis; viewpoint distinctions)
Brown v. Entertainment Merchants Ass’n, 131 S. Ct. 2729 (Supreme Court 2011) (free speech protections and government regulation of speech)
Davis v. Federal Election Comm’n, 554 U.S. 724 (Supreme Court 2008) (speech costs and burdens in political campaigning)
Grossman v. City of Portland, 33 F.3d 1200 (9th Cir. 1994) (economic penalties on speech can chill expression)
Arizona Right to Life Political Action Committee v. Bayless, 320 F.3d 1002 (9th Cir. 2003) (analysis of campaign finance disclosure and speech)
Leavitt v. Jane L., 518 U.S. 137 (Supreme Court 1996) (severability and legislative intent considerations)