Case Information
*2 Before: PHIPPS, RENDELL, and FISHER, Circuit Judges *3 Joseph F. Canamucio, Esq.
Pennsylvania State Education Association 400 North Third Street
Harrisburg, PA 17101
Leon Dayan, Esq. [ARGUED]
Bredhoff & Kaiser
805 15th Street, N.W.
Suite 1000
Washington, DC 20005
Jacob Karabell, Esq.
Bredhoff & Kaiser
805 15th Street, N.W.
Suite 1000
Washington, DC 20005
John M. West, Esq.
Bredhoff & Kaiser
805 15th Street, N.W.
Suite 1000
Washington, DC 20005
Counsel for Appellees Pennsylvania State Education Association, et al.
Daniel B. Mullen, Esq.
Office of Attorney General of Pennsylvania 1251 Waterfront Place
Mezzanine Level
Pittsburgh, PA 15222
Counsel for Appellees Attorney General Joshua D. Shapiro, et al.
Jonathan F. Mitchell, Esq. [ARGUED] Direct: 512-686-3940
Email: jonathan@mitchell.law
Fax: 512-686-3941
[COR NTC Retained]
Suite 400
111 Congress Avenue
Austin, TX 78701
Counsel for Appellants Arthur Diamond, et al.
Meredith Johnson, Esq.
Altshuler Berzon
177 Post Street
Suite 300
San Francisco, CA 94108
Scott A. Kronland, Esq.
Altshuler Berzon
177 Post Street
Suite 300
San Francisco, CA 94108
P. Casey Pitts, Esq. [ARGUED]
Altshuler Berzon
177 Post Street
Suite 300
San Francisco, CA 94108
Counsel for Appellee Service Employees International Union Local 668 Charles O. Beckley, II, Esq.
Beckley & Madden
212 North Third Street
Suite 301
Harrisburg, PA 17108
Brian Kelsey, Esq. [ARGUED]
Liberty Justice Center
190 South LaSalle Street
Suite 1500
Chicago, IL 60603
William L. Messenger, Esq.
National Right to Work Legal Defense Foundation 8001 Braddock Road
Suite 600
Springfield, VA 22151
Counsel for Appellants Janine Wenzig and Catherine Kioussis
O P I N I O N RENDELL , Circuit Judge:
In reliance on a Pennsylvania statute and the Supreme
Court’s decision in
Abood v. Detroit Bd. of Educ.
,
I
A. Legal background
Labor laws in the United States have long authorized
employers and labor organizations to bargain for an “agency
shop,” an arrangement in which one union is allowed to
exclusively represent an entity’s employees on the condition
that the union represent
all
the entity’s employees—even those
who do not join the union.
See, e.g.
,
Janus I
,
The Supreme Court has upheld the constitutionality of
these agency shop arrangements, including fair-share fees. For
instance, in
Railway Employees’ Dep’t v. Hanson
, the Supreme
Court ruled that the Railway Labor Act’s provisions allowing
agency shop arrangements and fair-share fees did not violate
the First Amendment.
*8 Eventually, state legislatures across the country passed laws authorizing public-sector unions to collect fair-share fees and bargain for agency shop arrangements with state government employers. In Abood , the Supreme Court affirmed the constitutionality of one such law, a Michigan statute permitting state employers to negotiate for agency shop arrangements and fair-share fees with the public-sector unions that represented their employees. 431 U.S. at 224-26. The Abood Court ruled that the important government interests in creating functional and peaceful labor relations and preventing the free rider problem “support the impingement upon associational freedom created by the agency shop.” Id. at 225. Although the Court recognized that the “government may not require an individual to relinquish rights guaranteed [] by the First Amendment as a condition of public employment,” id. at 234, the Court held that there was no reason to distinguish Abood from cases like Hanson that had upheld agency shop arrangements in the private sector, id. at 232 (holding that the “differences between public- and private-sector collective bargaining simply do not translate into differences in First Amendment rights”).
But the
Abood
Court also ruled that—as in the private
sector—non-members’ fair-share fees could only be used to
pay for union activities that were “germane to [the union’s]
duties as collective-bargaining representative,” but not the
union’s political or other work.
Id.
at 235. In the
Abood
Court’s view, this limitation struck an appropriate balance
between the non-members’ speech rights under the First
Amendment and the government’s interests in regulating labor
relations.
Id.
at 237 (describing the Court’s ruling as
“preventing compulsory subsidization of ideological activity
by employees who object . . . without restricting the [u]nion’s
*9
ability to require every employee to contribute to the cost of
collective-bargaining activities”). Over the course of the
following four decades, the Supreme Court affirmed its
holding
in
Abood
against similar challenges
to
the
constitutionality of state laws allowing for agency shop
arrangements between public-sector employers and public-
sector unions.
See, e.g.
,
Lehnert v. Ferris Faculty Ass’n
, 500
U.S. 507 (1991);
Locke v. Karass
, 555 U.S. 207 (2009);
Friedrichs v. Cal. Tchrs. Ass’n
,
*11 B. Factual background
1. Diamond facts
Plaintiff Arthur Diamond and his six co-plaintiffs (the
“Diamond Plaintiffs”) are current or former teachers in
Pennsylvania public schools. They were not members of the
Pennsylvania State Education Association (“PSEA”), the
union that exclusively represented their bargaining unit. But
PSEA’s collective bargaining agreement contained a fair-share
clause that required they pay fair-share fees to either the union
or to a union-approved nonreligious charity.
See
Diamond
Appellants’ Br. at 5 (citing D.A. 73-74). Only Diamond paid
his fair-share fee to PSEA.
Id.
at 6. The other six Plaintiffs
directed their fees to be diverted to nonreligious charities,
though Sandra H. Ziegler did not identify a charity.
Id.
at 5-6.
The fair-share fees were no longer collected after June 27,
(“Rather than wrestle the retroactivity question to the ground,
we think it prudent to assume for the sake of argument that the
right
recognized” by the Supreme Court in
Janus I
is
retroactive.);
Danielson v. Inslee
, 945 F.3d 1096, 1099 (9th
Cir. 2019) (“[W]e will assume that the right delineated in
[
Janus I
] applies retroactively and proceed to a review of
available remedies.”);
Lee v. Oh. Educ. Ass’n
,
2018, the date that the Supreme Court issued its decision in Janus I . A. 74, 93-96.
The Diamond Plaintiffs originally sued PSEA on the same theory as the plaintiffs in Janus I , but once the Supreme Court ruled in that case, the Diamond Plaintiffs amended their Complaint to seek repayment of the fair-share fees they had previously paid to their union. See Diamond Appellants’ Br. at 6 . PSEA moved to dismiss the amended complaint, arguing that because it had collected the fees in good faith reliance on a Pennsylvania statute and pre- Janus I Supreme Court precedent authorizing fair-share fees, they could not be held liable for monetary damages. Id. at 7. The District Court granted the motion to dismiss, ruling that because PSEA had relied on a prevailing state statute and federal caselaw, they were entitled to a good faith defense to § 1983 liability that barred the Diamond Plaintiffs’ claims. D.A. 50-51. The Diamond Plaintiffs timely appealed. D.A. 1.
2. Wenzig facts
Janine Wenzig and Catherine Kioussis (the “Wenzig Plaintiffs”) work for the Commonwealth of Pennsylvania. W.A. 8. Like the Diamond Plaintiffs, they were forced to pay fair-share fees to their union, the Service Employees International Union Local 668, without their consent. Id. Their bargaining unit’s CBA contained the following provision:
The Employer further agrees to deduct a [fair- share] fee from all compensation paid to all employees in the bargaining unit who are not members of the Union. Authorization from non- members to deduct [fair-share] fees shall not be *13 required. The amounts to be deducted shall be certified to the Employer by the Union and the aggregate deductions of all employees shall be remitted together with an itemized statement to the Union by the last day of the succeeding month after such deductions are made.
Wenzig App. 42.
More than a year after Janus I was issued, the Wenzig Plaintiffs filed suit on behalf of themselves and a putative class of similarly situated employees to recover damages under § 1983 for the fair-share fees that they had paid to their union. See Wenzig Appellants’ Br. at 3. They sought a declaratory judgment that the union’s pre- Janus I collection of fair-share fees violated the First Amendment and repayment of all fair- share fees that were collected. W.S.A. 9.
The SEIU filed a motion to dismiss their claims, which the District Court granted. The District Court ruled the good faith defense shielded the union from monetary liability for collecting fair-share fees in good faith reliance on then- prevailing Supreme Court precedent. W.A. 16. The Wenzig Plaintiffs timely appealed, and their case was consolidated for argument and opinion with the Diamond Plaintiffs’ case. W.A.1.
II
The District Courts had jurisdiction pursuant to 28
U.S.C. §§ 1331 and 1343. We have jurisdiction under 28
U.S.C. § 1291. We review the District Courts’ judgments
granting the Defendants’ motions to dismiss
de novo. See, e.g.
,
*14
Foglia v. Renal Ventures Mgmt., LLC
,
III
We are not the first court of appeals to rule on this
question, and we join a growing consensus of our sister circuits
who, in virtually identical cases, have held that because the
unions collected the fair-share fees in good faith reliance on a
governing state statute and Supreme Court precedent, they are
entitled to a good faith defense that bars Appellants’ claims for
monetary liability under § 1983.
See Janus v. AFSCME,
Council 31
,
A. Private parties may assert a good faith defense to
§ 1983 liability.
42 U.S.C. § 1983 creates a cause of action for plaintiffs who are injured by a person who, acting “under color of any statute . . . of any State,” causes the plaintiff to suffer “the deprivation of any rights, privileges, or immunities secured by the Constitution.” Appellants assert that the Unions—acting under color of a Pennsylvania statute—caused them to be deprived of their First Amendment rights when the Unions collected fair-share fees from Appellants’ paychecks.
In
Lugar v. Edmondson Oil Co.
, the Supreme Court held
that § 1983 allows suits against private parties acting under
*15
color of state law.
Despite voicing this “concern,” the Court in
Lugar
left
open the question of whether private parties may avail
themselves of immunity to suit.
Id.
In
Wyatt v. Cole
, the
Supreme Court answered this question, ruling that immunity is
reserved for governmental entities, not private parties subject
to suit under § 1983.
We addressed this open question shortly after
Wyatt
was
issued. In
Jordan v. Fox, Rothschild, O’Brien & Frankel
, we
held that a “good faith defense is available” to private parties
who act under color of state law and are sued for monetary
liability under § 1983.
J UDGE F ISHER also suggests that my reading of Jordan is “expansive[],” Fisher Op. at II.B., and J UDGE P HIPPS “does not see a valid basis for recognizing such a defense,” Phipps Op., but urges that, instead, our adoption of the good faith defense in Jordan was a “misnomer,” id.
I disagree. In
Jordan
, we embraced the good faith defense
and opined on the contours of its relatively modest
requirements.
B. Appellants’ § 1983 claims are barred by the Unions’
good faith defense.
Jordan therefore established that the good faith defense is available to a private-party defendant in a § 1983 case if, after considering the defendant’s “subjective state of mind,” id. at 1277, the court finds no “malice” and no “evidence that [the defendant] either knew or should have known of the statute’s constitutional infirmity,” id. at 1276.
There was no such finding of malice or knowledge in Jordan , and, similarly here, Appellants have not asserted that either of these disqualifying factors is implicated. Indeed, as noted above, the Unions’ collection of fair-share fees was authorized by over four decades of Supreme Court precedent and a Pennsylvania statute, 71 Pa. Stat. and Cons. Stat. Ann. § 575 (West 2020), that explicitly authorized fair-share fees for public-sector unions like the Unions. Accordingly, in this case, Appellants cannot possibly make any “showing of malice” or demonstrate that the Unions “either knew or should have known of [§ 575]’s constitutional infirmity.” Jordan , 20 F.3d at 1276 (citation omitted). The Unions are therefore entitled to the good faith defense under Jordan .
This is not the huge jurisprudential leap that my colleagues urge. This is a reasonable way to afford private parties some of the protection that government actors are afforded when they act in a situation in which the existing state and federal law explicitly condoned their behavior. Do we need to chart a complex path to ensure that this underlying principle is recognized? We did not in Jordan , and we do not need to do so here.
Moreover, “principles of equality and fairness,”
Wyatt
,
Appellants present numerous arguments that the good
faith defense should not bar their claims against the Unions.
First, Appellants urge us to rule that the good faith defense only
applies to § 1983 suits that allege theories of liability for which
the most analogous common law tort requires malice or
probable cause. We decline to do so for several reasons. First,
Wyatt
applied this most analogous tort concept in considering
the way courts have analyzed immunity from suit under
§ 1983. The
Wyatt
Court did not mention this concept in
relation to the good faith defense and there is no reason to think
that it would apply a historical immunity analysis to what it
obviously considered to be a distinct good faith analysis.
See
Wyatt
, 504 U.S. at 168. Other courts have concurred in this
view.
See Danielson
,
Third, Appellants urge that the good faith defense does
not apply to claims for restitution, which they allegedly seek.
But contrary to their urging, Appellants’ claims do not
constitute claims for restitution. “[R]estitution in equity
typically involved enforcement of a constructive trust or an
equitable lien, where money or property identified as
belonging in good conscience to the plaintiff could clearly be
traced to particular funds or property in the defendant’s
possession.”
Montanile v. Bd. of Trustees of Nat’l Elevator
Indus. Health Benefit Plan
, 136 S. Ct. 651, 657 (2016)
fees through government employer payroll withholding.
Abuse of process also requires a showing of malice and
probable cause, which would support the availability of the
good faith defense here.
Id
.;
see also Jordan
,
Appellants next theorize that the Unions can only avoid
liability—even if there is a good faith defense—if they acted
appropriately to benefit Appellants as
Abood
reasoned. Thus,
they urge that the District Courts should not have dismissed
their claims without allowing discovery as to whether the
Unions’ conduct was consistent with what
Abood
required.
But because Appellants have pled an entitlement to return of
their money based on
Janus I
, not on the Unions’ conduct, this
argument falls flat.
See Danielson
,
Finally, Appellants argue that an “entity”—as opposed
to an “individual”—cannot invoke the good faith defense. But
this argument is plainly contradicted by our ruling in
Jordan
,
which made the good faith defense available to a law firm.
Jordan
,
IV
As Judge Wood noted in
Janus II
, the good faith defense
to section 1983 liability is “narrow” and “only rarely will a
party successfully claim to have relied substantially and in
good faith on both a state statute
and
unambiguous Supreme
Court precedent validating that statute.”
In April 1871, Congress passed, and President Grant signed, an extraordinary act, variously called the Ku Klux Klan Act, Third Force Act, or Civil Rights Act of 1871. On its face, the first section of that act—what we now know as 42 U.S.C. § 1983—provided its violators no immunities from or defenses to liability. See Act of Apr. 20, 1871, ch. 22, § 1, 17 Stat. 13, 13. Of course, the Supreme Court has since read immunities and defenses into § 1983, but it has done so principally on the conceit that they were available at common law in 1871, and implicitly incorporated into the statute. While this approach certainly limits the scope of liability, it also constrains judges from straying too far from the statutory text. In only one context has the Court invented a freestanding defense: the qualified immunity of certain state officials. Whatever might be said for that doctrine—and it is increasingly under scrutiny—I believe that the precedent of neither the Supreme Court nor our own Court warrants another divergence from the common-law approach in the present context. And however strongly considerations of equality and fairness might recommend such action, it is beyond our remit to invent defenses to § 1983 liability based on our views of sound policy. I must, therefore, respectfully disagree with the reasoning of J UDGE R ENDELL ’s opinion announcing the Court’s judgment.
Nevertheless, I concur in the affirmance of the District Courts’ orders. There was available in 1871, in both law and equity, a well-established defense to liability substantially similar to the liability the unions face here. Courts consistently *25 held that judicial decisions invalidating a statute or overruling a prior decision did not generate retroactive civil liability with regard to financial transactions or agreements conducted, without duress or fraud, in reliance on the invalidated statute or overruled decision. Because this defense comports with the history and purposes of § 1983, I conclude that it is available to the unions here and supports the dismissal of the plaintiffs’ complaints.
I
A
Section 1983 “cannot be understood in a historical
vacuum.”
City of Newport v. Fact Concerts, Inc.
,
The paradigm application of this common-law approach
has been the absolute immunity of legislators, judges, and
certain other state officials. Congress, the Supreme Court has
said, gave “no clear indication” in passing § 1983 that it “meant
to abolish wholesale all common-law immunities.”
Pierson v.
Ray
,
Even when absolute immunity does not apply, the Court
has still employed the common law approach. To “defin[e] the
contours and prerequisites of a § 1983 claim,”
Manuel v. City
of Joliet
, 137 S. Ct. 911, 920 (2017), it has read the statute
“against the background of tort liability that makes a man
responsible for the natural consequences of his actions.”
Monroe v. Pape
,
B
The singular exception to this practice is the doctrine of
qualified immunity. Early on, the Court did refer to the
common law. In
Pierson
, which concerned common-law and §
1983 claims against police officers, the Court held that because
“the defense of good faith and probable cause” was “[p]art of
the background of tort liability[] in the case of police officers
making an arrest,” it was available to the officers in the § 1983
action as well as the common-law action.
This drift culminated in Harlow v. Fitzgerald , 457 U.S. 800 (1982), where “the Court completely reformulated qualified immunity along principles not at all embodied in the common law,” Anderson v. Creighton , 483 U.S. 635, 645 *28 (1987). [1] The Court abandoned any reference to a subjective good-faith standard, noting that such “[i]nquiries . . . can be peculiarly disruptive of effective government.” Harlow , 457 U.S. at 817. Instead, the question was now purely one of objective reasonableness, and it would apply “across the board,” id. at 821 (Brennan, J., concurring) (citation omitted), to all “government officials performing discretionary functions,” id. at 818 (majority opinion).
Yet even as it departed from the common-law model,
the Court indicated its unwillingness to extend
Harlow
’s
policy-based rationale to other contexts. “We reemphasize,” it
said in 1986, “that our role is to interpret the intent of Congress
in enacting § 1983, not to make a freewheeling policy choice,
and that we are guided in interpreting Congress’ intent by the
common-law tradition.”
Malley v. Briggs
,
C
This background informs the context we confront in
these cases—the far less developed area of private-party
liability under § 1983. Any limitation on such liability should,
as with official liability, “be dealt with . . . by establishing an
affirmative defense.”
Lugar v. Edmondson Oil Co.
, 457 U.S.
922, 942 n.23 (1982);
see also Adickes v. S.H. Kress & Co.
,
The
Wyatt
defendants were private parties who invoked
a Mississippi statutory procedure that obliged state officials,
solely upon the declaration of the applicant, “to issue a writ of
replevin for the seizure of the property described in [the]
declaration.”
Wyatt v. Cole
,
In reversing, the Supreme Court distinguished between
post-
Harlow
qualified immunity and a good-faith defense. The
basic approach, the Court said, is the one grounded in the
common law: whether the “parties seeking immunity were
shielded from tort liability when Congress enacted the Civil
Rights Act of 1871”; and, if so, whether “§ 1983’s history or
purpose counsel against applying [the immunity] in §
1983 actions.”
Wyatt
,
For present purposes, this holding has two relevant
implications. First, contrary to what some of our sister circuits
have said, the Court in
Wyatt
made no suggestion that the
common-law approach applies only in the context of immunity
and not in the context of a good-faith defense.
See Janus v. Am.
Fed’n of State, Cnty. & Mun. Emps., Council 31
,
Second, in declining to extend qualified immunity to private-party defendants, the Court did not imply, as today’s opinion announcing our judgment holds, see Rendell Op. at III.B, that alternative policy grounds might supply an affirmative defense.
Although principles of equality and fairness may suggest . . . that private citizens who rely unsuspectingly on state laws they did not create and may have no reason to believe are invalid should have some protection from liability, as do their government counterparts, such interests are not sufficiently similar to the traditional purposes of qualified immunity to justify such an expansion.
Wyatt
, 504 U.S. at 168. Rather than open the door to an
independent defense based on “principles of equality and
fairness,” this statement asserts that, at least in the context of
private-party § 1983 defendants, equality and fairness
*32
considerations are not significant enough in themselves to
warrant divergence from the common-law model in the manner
of
Harlow
. Those concerns “may be well founded,” but courts
“do not have a license to establish immunities from § 1983
actions in the interests of what [they] judge to be sound public
policy.”
Tower
,
Justice Kennedy’s concurrence in
Wyatt
, joined by
Justice Scalia, underlines both of these points. “Our immunity
doctrine,” he wrote, “is rooted in historical analogy, based on
the existence of common-law rules in 1871, rather than in
‘freewheeling policy choices.’”
Wyatt
, 504 U.S. at 170
(Kennedy, J., concurring) (alteration omitted) (quoting
Malley
,
Justice Kennedy then went further than the Court in
laying out what such an inquiry, at least on the
Wyatt
facts,
should look like. All of the Justices, including those in dissent,
accepted that at common law in 1871 the tort actions “most
closely analogous” to the
Wyatt
action were “malicious
prosecution and abuse of process.”
Id.
at 164 (majority
opinion);
see id.
at 172 (Kennedy, J., concurring);
id.
at 176
(Rehnquist, C.J., dissenting). Both torts required the plaintiff
to prove that the defendant acted with malice and without
probable cause.
Id.
at 166 n.2 (majority opinion);
id.
at 172
(Kennedy, J., concurring);
id.
at 176 n.1 (Rehnquist, C.J.,
dissenting). For Justice Kennedy, proof of “subjective bad faith
on the part of the defendant”—rather than an objective
standard—went “far towards proving” both elements.
Id.
at
*33
173 (Kennedy, J., concurring). “[T]here is support in the
common law,” he observed, “for the proposition that a private
individual’s reliance on a statute, prior to a judicial
determination of unconstitutionality, is considered reasonable
as a matter of law; and therefore under the circumstances of
this case, lack of probable cause can
only
be shown through
proof of subjective bad faith.”
Id.
at 174 (citing
Birdsall v.
Smith
,
II
Under Wyatt , then, any defense to private-party liability under § 1983 must derive from the common-law approach and may not rest on freestanding policy grounds. The next question is whether the defense suggested there—whether the defendant acted with malice and without probable cause—is context dependent or applies categorically to all cases involving private-party defendants. Only the former view is faithful to the common-law approach; the latter, like the Supreme Court’s qualified-immunity standard in cases such as Procunier , O’Connor , and Wood , generalizes a subjective good-faith defense, unmooring it from its common-law origins. J UDGE R ENDELL ’s opinion, in addition to its policy-based holding, takes this latter view, relying upon our decision in Jordan v. Fox, Rothschild, O’Brien & Frankel , 20 F.3d 1250 (3d Cir. 1994). See Rendell Op. at III.A-B. On my reading, however, Jordan did not announce a categorical rule, and so we must conduct an independent inquiry based on the common-law approach. And on that score, I think that instead of determining whether a pre-1871 tort is sufficiently analogous, resolution on *34 an alternative ground, also based in the common-law approach, is preferable.
A
Lugar
and
Wyatt
both concerned “private defendants
charged with 42 U.S.C. § 1983 liability for invoking state
replevin, garnishment, and attachment statutes later declared
unconstitutional.”
Wyatt
,
The district court held that the post-judgment garnishment phase of the procedure violated due process, id. at 477-78, but it dismissed the § 1983 action, determining that the defendants were entitled to qualified immunity, id. at 479-80. While the case was pending on appeal, however, the Supreme Court decided Wyatt . Our question, then, was whether the defendants were entitled to a good-faith defense. Jordan , 20 F.3d at 1276. We held that they were, declaring ourselves “in basic agreement” with the Fifth Circuit’s holding on remand in Wyatt that “[p]rivate defendants should not be held liable under § 1983 absent a showing of malice and evidence that they *35 either knew or should have known of the statute’s constitutional infirmity.” Id. (quoting Wyatt II , 994 F.2d at 1120).
In my view,
Jordan
’s holding is best read as limited to
the context before it. Immediately after announcing our
agreement with the Fifth Circuit, we clarified that by “malice”
we had in mind “a creditor’s subjective appreciation that its act
deprives the debtor of his constitutional right to due process.”
Id.
To support this standard, we cited Justice Kennedy’s
reference, in his
Wyatt
concurrence, to
Birdsall v. Smith
.
Id.
at
1276 n.30. That case concerned a malicious-prosecution action
brought by a milk vendor who had been charged, solely on the
basis of a report filed with state officials, under a state statute
later declared unconstitutional.
See
122 N.W. at 626-27. We
also referred to “Pennsylvania cases that place state law
limitations on the use of judgment by confession” because we
thought they may “sometimes be relevant on the good faith
issue.”
Jordan
,
B
Because
Jordan
cannot be read as expansively as J UDGE
R ENDELL ’s opinion suggests, the proper question is whether
the abuse-of-process and malicious-prosecution torts, from
which the
Wyatt
defense is derived, are sufficiently analogous
to the present action, such that our recognition of that defense
in
Jordan
is applicable here. For their part, our sister circuits
that have confronted the question have so far uniformly
concluded that those torts do provide the best analogy.
See,
e.g.
,
Janus II
,
In both
Wyatt
and
Jordan
, the private-party defendants
invoked a generally available state procedure. Upon the
defendants’ independent initiative, state officials were
compelled to seize or garnish property of the plaintiffs. That
mandate was what rendered the state laws unconstitutional in
each case.
See Fox Rothschild
,
Thus, the relevant state action in our cases stems not
merely from
the
involvement of state officials
in
unconstitutional conduct,
see Lugar
,
It may be, as the Seventh Circuit observed in
Janus II
,
that abuse of process and malicious prosecution are the
most
analogous torts, however imperfect the analogy.
See
942 F.3d
at 365. But it does not necessarily follow that they therefore
supply the basis of a defense. By that logic, a defense is
potentially always available, no matter how attenuated the
connection between the common-law cause of action and the
injury alleged. We must remember that “[c]ommon-law
principles are meant to guide rather than to control the
definition of § 1983 claims.”
Manuel
,
In what follows, I describe an alternative basis for a
defense, well established at both common law and equity in
1871, and providing a closer similarity to the facts that we
confront. Resolving these cases on this ground would both
avoid the knotty problems raised by a most-analogous-tort test
and preserve the notion, accepted by six Justices in
Wyatt
, that
Harlow
was an exception that should not swallow the
common-law rule. Indeed, in my view, that latter benefit is
especially compelling, given the recent cogent critiques of
*38
qualified immunity as incongruent with the principles of
statutory interpretation.
See, e.g.
,
Ziglar v. Abbasi
, 137 S. Ct.
1843, 1871-72 (2017) (Thomas, J., concurring in part and
concurring in the judgment);
Baxter v. Bracey
,
III
“An unconstitutional act is not a law; . . . it is, in legal
contemplation, as inoperative as though it had never been
passed.”
Norton v. Shelby County
,
Yet there was a contemporaneous exception to this general view, in which a judicial decision either voiding a statute or overruling a prior decision does not generate retroactive civil liability with regard to financial transactions or agreements conducted, without duress or fraud, in reliance on the invalidated statute or overruled decision. See, e.g. , *39 Benjamin N. Cardozo, The Nature of the Judicial Process 146- 47 (1921); Oliver P. Field, The Effect of an Unconstitutional Statute 221-28 (1935); Note, The Effect of Overruled and Overruling Decisions on Intervening Transactions , 47 Harv. L. Rev. 1403 (1934). An assessment of the cases applying this exception demonstrates its applicability in the present context.
The exception appears to have developed as a sort of
corollary to originally English legal and equitable doctrines.
One such doctrine is that voluntary payments made upon an
illegal demand are not recoverable except where the payments
were made under an immediate and urgent necessity.
See, e.g.
, Valpy v. Manley (1845), 135 Eng. Rep. 673, 677; 1 C. B. 594,
602-03 (Tindal, C.J.) (citing and quoting Fulham v. Down
(1798), 170 Eng. Rep. 820 n.; 6 Esp. 26 n. (Kenyon, C.J.));
Brisbane v. Dacres (1813), 128 Eng. Rep. 641, 645; 5 Taunt.
143, 152 (Gibbs, J.). Another is that money paid pursuant to a
contract may not be recovered if the contract was formed under
a mutual mistake of law.
See, e.g.
, Bilbie v. Lumley (1802) 102
Eng. Rep. 448, 449-50; 2 East 469, 472. Although nineteenth-
century American courts straightforwardly applied these
doctrines in the contexts in which they originated,
see, e.g.
,
Bank of U.S. v. Daniel
,
A
At common law, money extracted illegally by taxes or fees could be recovered through an action of assumpsit. See, e.g. , 3 William Blackstone, Commentaries on the Laws of England *158-59 (describing as a form of assumpsit an action *40 to recover tax or fee payments to a government or other body of which one is a member). [4] As noted, in Janus the unconstitutional act was the compelled subsidization of speech through the payment of the fair-share fees. The plaintiffs here seek a repayment of the fees they paid prior to Janus and whose extraction only became illegal as a result of that decision. Several pre-1871 state cases address a similar situation, where repayment of a tax, fee, or other expenditure is sought when the law or court decision under which it was made is declared unconstitutional or overruled. The courts in these cases developed a limitation on such liability, uniformly barring repayment where the initial expenditure was made voluntarily and without duress.
The most succinct formulation of this doctrine came in an 1846 decision of the Maryland high court:
It is now established, by an unbroken series of adjudications in the English and American *41 courts, that where money is voluntarily and fairly paid, with a full knowledge of the facts and circumstances under which it is demanded, it cannot be recovered back in a court of law, upon the ground, that the payment was made under a misapprehension of the legal rights and obligations of the party.
City of Baltimore v. Lefferman
,
The Pennsylvania Supreme Court at midcentury also
adopted this general doctrine.
See Taylor v. Phila. Bd. of
Health
,
Finally, although the United States Supreme Court did
not, during this period, have a factually similar case, it did
approvingly recite this doctrine in analogous situations. For
example, in an 1877 case involving payments to Confederate
*43
officials for the right to export cotton, the Court said that to
“justify an action against [the payees], either for the return of
the money paid . . . or for damages of any kind,” “the doctrine
established by the authorities is[] that ‘a payment is not to be
regarded as compulsory, unless made to emancipate the person
or property from an actual and existing duress imposed upon it
by the party to whom the money is paid.’”
Radich v. Hutchins
,
B
The doctrine was also applied in equitable actions,
usually involving not the payment of a tax or fee, but rather a
financial transaction between private parties. Its most well-
known enunciation was by Chancellor Kent in 1815: “A
subsequent decision of a higher Court, in a different case,
giving a different exposition of a point of law from the one
declared and known when a settlement between parties takes
place, cannot have a retrospective effect, and overturn such
settlement.”
Lyon v. Richmond
,
***
When Congress in 1871 enacted the law that became §
1983, it was well established at both law and equity that court
decisions that invalidated a statute or overruled a prior
decision, and thereby affected transactional relationships—
between private parties and government officials or
representatives, or between private parties alone—established
in reliance on that statute or decision, did not generate civil
liability for repayment except where duress or fraud was
present. Whatever the nature of the state action in the present
cases—whether the state “act[ed] jointly with” the unions or
“compel[led] the [unions] to” collect the fees,
Manhattan
Cmty. Access Corp. v. Halleck
,
IV
It may be tempting, in cases like the present, to read precedent broadly, or appeal to freestanding principles such as the rule of law and basic notions of fairness. But we must interpret and apply § 1983 as we would any other statute, always prepared for the faithful execution of that duty to result in a seemingly extreme outcome. For even when that does not occur, there is value in adhering to the well-established principles of interpretation.
Because the plaintiffs in these cases have not pleaded any facts, suggesting that their payments were either sufficiently involuntary or exacted on a fraudulent basis, [7] to permit a reasonable person to infer that the unions might be liable, I concur in the affirmance of the orders granting the unions’ motions to dismiss.
*46 Diamond v. Pa. State Educ. Ass’n , No. 19-2812 Wenzig v. Serv. Emps. Int’l , No. 19-3906 PHIPPS, Circuit Judge , dissenting.
The central question presented in these consolidated cases, which seek recovery of agency fees garnished from the wages of non-union members, is whether a good faith affirmative defense exists to a First Amendment compelled speech claim under 42 U.S.C. § 1983. I do not see a valid basis for recognizing such a defense. A good faith affirmative defense was not firmly rooted in the common law in 1871 when § 1983 was enacted, and nothing else compels recognition of such a defense today. For that reason, I would reverse the orders dismissing these cases and remand them for further proceedings.
My colleagues see it differently. Judge Rendell recognizes such a defense from precedent and out of consideration of “principles of equality and fairness.” Rendell Op. at III.B. In concurring in the judgment only, Judge Fisher does not rely on a good faith defense. Instead, from an examination of pre-1871 common law, he identifies another limitation on the § 1983 cause of action: it may not be used to collect voluntary payments. See Fisher Op. at III.A. I disagree with these perspectives and respectfully dissent.
The Supreme Court has articulated standards for
supplementing the plain text of § 1983, which itself identifies
no immunities or defenses. Such supplementation requires a
tradition “so firmly rooted in the common law and . . .
supported by such strong policy reasons that ‘Congress would
have specifically so provided had it wished to abolish the
*47
doctrine.’”
Owen v. City of Independence
,
I. A GOOD FAITH DEFENSE WAS NOT FIRMLY ROOTED IN
THE COMMON LAW IN 1871 WHEN C ONGRESS ENACTED § 1983.
The specific inquiry here focuses on whether a good faith defense was firmly rooted in the common law in 1871. But as an initial point of reference, the good faith affirmative defense is not firmly rooted in the common law today – either generally or for any specific cause of action.
In articulating 18 affirmative defenses that must be raised in a responsive pleading, Rule 8(c) of the Federal Rules of Civil Procedure does not include good faith. See Fed. R. Civ. P. 8(c). The rule’s listing is not exhaustive, and leading treatises supplement those 18 listed defenses, but those treatises do not identify a common-law good faith affirmative defense. See, e.g., Arthur R. Miller et al., Federal Practice and Procedure § 1271 (3d ed., Apr. 2020 Update) (recognizing no common-law good faith affirmative defense); 2 Jeffrey A. Parness, Moore’s Federal Practice § 8.08 (3d ed. 2020) (listing affirmative defenses, such as immunities, but not including good faith). If a good faith affirmative defense were deeply rooted in the common law, such as defenses like statute of *48 limitations, laches, or accord and satisfaction, then one would expect to find it listed in Rule 8(c) – or at least to make a showing in a leading treatise.
Similarly, a review of other statutory causes of action reveals that Congress has not understood good faith to be so deeply rooted as to go unspoken. Rather, when Congress wants to include good faith as an affirmative defense, it does so expressly. [1] And that begs the question: if the good faith defense were so well established that it could be assumed “that Congress [in enacting § 1983] would have specifically so provided had it wished to abolish the doctrine,” then why did Congress find the need to expressly provide for the defense in many other statutes but not in § 1983? Pierson , 386 U.S. at 555.
In sum, the absence of a good faith affirmative defense from Rule 8(c) along with its presence as a defense in other federal statutes suggests that today the good faith affirmative defense is not firmly rooted in the common law.
That conclusion, of course, is not dispositive – it could be that a good faith affirmative defense was deeply entrenched in the common law in 1871 but has lost traction over time. But cf . Fed. R. Civ. P. 8(c) (continuing to identify the virtually obsolete affirmative defense of injury to fellow servant). To make such a showing would require proof similar to that adduced in Tenney v. Brandhove , 341 U.S. 367 (1951), wherein the Supreme Court determined that legislative immunity applied to § 1983 claims. See id. at 377-78. In reaching that conclusion, the Supreme Court relied on evidence of that immunity dating back to sixteenth and seventeenth century English law, provisions of the Articles of Confederation and the Constitution, as well as protections specifically articulated in 41 of the then 48 admitted States. See id . at 372-76.
By contrast no such evidence is present here. No party identifies a pre-1871 case recognizing a common-law good faith affirmative defense – either as a general matter or in the context of any particular cause of action. Judge Rendell’s opinion does not identify any common-law basis for such a defense. Nor do any of the other courts applying a good faith defense to agency fee cases identify any grounding in common law for such an affirmative defense. [2]
The strongest case for such a defense comes from Chief
Justice Rehnquist’s dissenting opinion in
Wyatt v. Cole
. There,
he viewed the good faith defense as “something of a
misnomer” because it actually referred to elements of the
common-law torts of malicious prosecution and abuse of
process.
Judge Fisher picks up on that theme. From an examination of the common law, he concludes that in 1871 no cause of action allowed for later recovery of voluntary payments. See Fisher Op. at III.A. But unlike the cases he relies upon, the agency fee payments at issue here were not voluntary – they were wage garnishments that were paid to unions. [3] More fundamentally, Judge Fisher’s approach is law history before 1871 of private parties enjoying a good-faith defense to constitutional claims”).
[3]
See
71 Pa. Stat. and Cons. Stat. Ann. § 575(c) (West 1988)
(requiring employers to garnish wages for fair-share agency
fees for transmittal to unions);
see also
Wenzig Compl. ¶¶ 9-
10 (Wenzig App. 42) (alleging that non-union members were
*51
analogous to the one that the Supreme Court did not adopt in
Wyatt
– which prompted Chief Justice Rehnquist’s dissent.
Section 1983 created a new statutory cause of action, not one
pre-defined by the common law. Thus, it is immaterial that no
pre-1871 cause of action permitted recovery for voluntary
payments that were subsequently declared unconstitutional:
the Civil Rights Act of 1871 established a new cause of action
in part to provide “a remedy where state law was inadequate.”
Monroe v. Pape
,
For these reasons, I do not see the common law as limiting the scope of a § 1983 claim for compelled speech – either through a good faith affirmative defense or through a separate limitation on the statutory cause of action.
II. B OTH THE HISTORY AND THE PURPOSE OF § 1983
COUNSEL AGAINST RECOGNITION OF A GOOD FAITH AFFIRMATIVE DEFENSE .
For completeness, even supposing that the common law did recognize good faith as an affirmative defense in 1871, more would be required. Before a deeply rooted affirmative “forced to pay” fair-share agency fees and that those fees were deducted from nonmembers’ wages “without their consent”); Diamond Second Am. Compl. ¶ 24 (Diamond App. 74) (alleging that the class representatives were “compelled . . . to pay a financial penalty for exercising their constitutional right to not join a union”), ¶ 39 (Diamond App. 77) (defining the putative class as persons who were “compelled to pay money . . . as a condition of employment”).
defense can apply to a § 1983 action, it must also be “supported
by such strong policy reasons that Congress would have
specifically so provided had it wished to abolish the doctrine.”
Owen
,
A good faith defense is inconsistent with the history of the Civil Rights Act of 1871. As the Supreme Court has explained, that statute is predicated on the understanding that “Congress has the power to enforce provisions of the Fourteenth Amendment against those who carry a badge of authority of a State and represent it in some capacity, whether they act in accordance with their authority or misuse it.” Monroe , 365 U.S. at 171-72 (emphasis added). As this statement makes clear, the history behind the Civil Rights Act, which Congress enacted pursuant to the Enabling Clause of the Fourteenth Amendment, [4] demonstrates the need to remedy actions taken in accordance with state law . And thus a good faith affirmative defense – that a state actor was merely following state law – is an especially bad fit as an atextual addition to § 1983.
Nor can a good faith affirmative defense be reconciled
with the purpose of the Civil Rights Act of 1871. The Supreme
Court has identified “three main aims” for § 1983.
Monroe
,
The later enactment of § 1988 also supports this conclusion. There, Congress allowed for consideration of state common law, but only to supplement “deficienc[ies] in the provisions necessary to furnish suitable remedies and punish offenses against law.” 42 U.S.C. § 1988. That is quite different than looking to state common law to limit the remedies permitted by § 1983.
Thus, even if it were firmly entrenched in the common law, a good faith affirmative defense should not be grafted onto the text of § 1983 – either as a transsubstantive defense (such as accord and satisfaction or res judicata) or a cause-of-action specific defense (such as assumption of the risk or duress). *54 III. T HE ROLE OF GOOD FAITH IN § 1983 LITIGATION DOES
NOT RISE TO THE LEVEL OF AN AFFIRMATIVE DEFENSE .
Although good faith does not operate as an affirmative
defense, it still may have a role in § 1983 litigation. As this
Circuit recognized, proof of good faith may negate an element
of a § 1983 claim.
See Jordan v. Fox, Rothschild, O’Brien &
Frankel
,
Beyond Jordan , Judge Rendell relies on “principles of equality and fairness” to justify a good faith defense. Rendell Op. at III.B. But in full context, the Supreme Court made clear that “principles of equality and fairness” were insufficient to establish immunity:
Although principles of equality and fairness may suggest . . . that private citizens who rely unsuspectingly on state laws they did not create and may have no reason to believe are invalid should have some protection from liability, as do their government counterparts, such interests are not sufficiently similar to the traditional purposes of qualified immunity to justify such an expansion.
Wyatt
,
But even still, principles of equality and fairness would
not carry the day here. Neither equality nor fairness
overwhelmingly favors the reliance interests of the unions in
pre-existing law over the free speech rights of non-members
who were compelled to support the unions. The Supreme
Court in
Janus
already accounted for those reliance interests in
overturning
Abood
.
See Janus
,
* * *
Good faith was not firmly rooted as an affirmative defense in the common law in 1871, and treating it as one is inconsistent with the history and the purpose of § 1983. Nor does our precedent or even principles of equality and fairness favor recognition of good faith as an affirmative defense to a compelled speech claim for wage garnishments. I respectfully dissent and vote to reverse the orders dismissing the complaints and to remand these cases.
Notes
[1] We assume without deciding that the right announced by the Supreme Court in Janus I is retroactive. Janus v. AFSCME, Council 31 , 942 F.3d 352, 360 (7th Cir. 2019) (“ Janus II ”)
[2] Under
Lugar
, a private party may be appropriately
characterized as a state actor where the private party “is a state
official, . . . has acted together with or has obtained significant
aid from state officials, or [where its] conduct is otherwise
chargeable to the State.”
Lugar
,
[3] In his concurrence, J UDGE F ISHER suggests that a historical approach to the issue of good faith requires a complex analysis based on common law. He asserts that the various opinions in Wyatt imply “that any limitation on private-party liability must be grounded in the common-law approach.” Fisher Op. at I.C. J UDGE P HIPPS similarly urges that the good faith defense should be available if and only if a “deeply rooted common- law tradition exists” to support it. See Phipps Op. I can find no such implication, let alone any directive to that effect. Indeed, the point—the very narrow ruling—of the majority in Wyatt is that qualified immunity is uniquely a creature of common law to which private parties are not entitled. And the Wyatt concurrence’s statement (which Judge Fisher quotes as the basis for this implication), that “[w]e may
[4] We note that the Appellants did not urge (or even suggest)
that we delve into the historical “common-law approach” with
the level of historical detail and specificity that J UDGE
F ISHER ’s concurrence would require, so we need not consider
it. Our sister circuits have construed what J UDGE F ISHER refers
to broadly as the “common-law approach” as a narrower most
analogous common law tort approach, and, although they
ultimately reject the idea that this approach should be
incorporated into our analysis, they have uniformly determined
that, even if we were to adopt this mode of analysis, abuse of
process is the most analogous common law tort on these facts.
See Janus II
, 942 F.3d at 365;
Danielson
, 945 F.3d at 1102;
Lee
,
[1] Although Harlow arose under the cause of action created in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics , 403 U.S. 388 (1971), the Court saw no reason to distinguish between that context and § 1983, see Harlow , 457 U.S. at 818 n.30.
[2] Moreover, the distinction between immunities and defenses
is potentially misleading because qualified immunity is itself
“an affirmative defense that must be pleaded by a defendant
official.”
Harlow
,
[3] It follows from this argument that the parties’ other proposed torts—conversion, defamation, tortious interference with contract, and intentional infliction of emotional distress—are also insufficiently analogous. Their elements are even further afield than those of abuse of process and malicious prosecution.
[4] Although the Supreme Court has often referred specifically to tort law when enunciating the common-law approach to § 1983 immunities and defenses, it has never suggested that application of that approach is limited to tort, rather than contract, law where the latter is most applicable. Moreover, the assumpsit action was in fact a form of the writ of trespass on the case—the fountainhead of modern tort law—that officially came to supplant actions in debt due to the institutional rivalry of the Courts of Common Pleas and King’s Bench. See David Ibbetson, Sixteenth Century Contract Law: Slade’s Case in Context , 4 Oxford J. Legal Stud. 295 (1984). Assumpsit treats misperformance or nonperformance of an implied agreement as a tort-like wrong. See John H. Langbein et al., History of the Common Law: The Development of Anglo-American Legal Institutions 252 (2009).
[5] The Alabama Supreme Court’s adoption of
Benson
’s
language is significant.
Benson
, also an assumpsit action, more
nearly approximates abuse of process because the plaintiffs,
who were ship owners, only paid after their vessel was
attached. Nevertheless, the Massachusetts Supreme Judicial
Court still denied recovery. The plaintiffs had the choice of
either paying or litigating.
Benson
,
[6] The Diamond appellants argue strenuously that this is a case of restitution. Even if it is, every case upon which they rely can be explained according this doctrine. Moreover, they cite cases only from the mid-twentieth century or later. There is no suggestion that the principle they claim was established in 1871. The reverse, in fact, seems to be the case.
[7] J UDGE P HIPPS asserts that, even accepting the standard I adopt here, the plaintiffs’ payments were not voluntary. I think it apparent that none of the plaintiffs have pleaded anything approaching the kind of involuntariness or duress articulated in the cases I discuss.
[1] See, e.g. , 15 U.S.C. § 78r (providing a good faith defense to securities fraud); 15 U.S.C. § 1115(b) (providing a good faith defense to trademark infringement); 15 U.S.C. §§ 1640, 1691e(e), 1692k(e), 1693m(d) (providing a good faith defense to claims related to consumer credit protection); 16 U.S.C § 1540(a)(3), (c)(3) (providing a good faith defense to certain claims under the Endangered Species Act); 29 U.S.C. § 259(a) (providing a good faith defense to certain claims under the Fair Labors Standards Act); 29 U.S.C. § 2617(a)(1)(iii) (providing a good faith defense to a liquidated damages claim under the Family Medical Leave Act).
[2]
See Wholean v. CSEA SEIU Local 2001
,
[4] See Civil Rights Act of 1871, Pub. L. 42-22, 17 Stat. 13, 13 (Apr. 20, 1871) (entitling the legislation as “[a]n Act to enforce the [p]rovisions of the Fourteenth Amendment . . . and for other [p]urposes”).