RANDY BOUDREAUX v. LOUISIANA STATE BAR ASSOCIATION, a Louisiana Nonprofit Corporation; LOUISIANA SUPREME COURT; BERNETTE J. JOHNSON, Chief Justice of the Louisiana Supreme Court; SCOTT J. CRICHTON, Associate Justice of the Louisiana Supreme Court for the Second District; JAMES T. GENOVESE, Associate Justice of the Louisiana Supreme Court for the Third District; MARCUS R. CLARK, Associate Justice of the Louisiana Supreme Court for the Fourth District; JEFFERSON D. HUGHES, III, Associate Justice of the Louisiana Supreme Court for the Fifth District; JOHN L. WEIMER, Associate Justice of the Louisiana Supreme Court for the Sixth District; UNIDENTIFIED PARTY, Successor to the Honorable Greg Guidry as Associate Justice of the Louisiana Supreme Court for the First District
No. 20-30086
United States Court of Appeals for the Fifth Circuit
July 2, 2021
Before SMITH, WILLETT, and DUNCAN, Circuit Judges.
Appeal from the United States District Court for the Eastern District of Louisiana, USDC No. 2:19-CV-11962. FILED July 2, 2021. Lyle W. Cayce, Clerk.
Don R. Willett, Circuit Judge:
After the COVID-19 pandemic threw the rite-of-passage bar exam into turmoil, states adopted a hodgepodge of responses that teed up larger questions, like “Is the bar exam the best way to measure competency?” and “[A]re there ways to fundamentally change how lawyers are trained, licensed, and regulated?”1 The exam is being reexamined. But for most lawyers, the bar examination is just step one of a career-long relationship with the bar association. Even if the legal licensing regime is lastingly upended, thirty or so states still mandate joining and funding the state bar as a precondition to practicing law.
This First Amendment case, one of several “bar wars” lawsuits across the country, challenges Louisiana law that forces lawyers to join and pay annual dues to the Louisiana State Bar Association (LSBA).2 Louisiana attorney Randy Boudreaux objects to many of LSBA‘s activities, which he labels political and ideological advocacy. He claims that compelled dues and membership violate his First Amendment rights, as does LSBA‘s failure to ensure that his dues are not used to fund the bar‘s political and ideological activities. The district court dismissed all of Boudreaux‘s claims. We reverse.
I
A
The Louisiana Supreme Court established the Louisiana State Bar Association (LSBA) in 1941 at the direction of the state legislature.3 LSBA is a “mandatory”
LSBA‘s purposes are “to regulate the practice of law, advance the science of jurisprudence, promote the administration of justice, uphold the honor of the Courts and of the profession of law, encourage cordial intercourse among its members, and, generally, to promote the welfare of the profession in the State.”8 To those ends, LSBA administers the state‘s continuing legal education program, maintains a standing committee on the Rules of Professional Conduct, operates subject-matter “sections” devoted to different areas of the law, provides a mediation and arbitration service to resolve disputes between attorneys and clients, and sponsors the Judges and Lawyers Assistance Program to aid members of the profession struggling with substance abuse and mental health.
LSBA also conducts legislative advocacy on behalf of the legal profession. Its Legislation Committee recommends policy positions on “matters involving issues affecting the profession, the regulation of attorneys and the practice of law, the administration of justice, the availability and delivery of legal services to society, the improvement of the courts and the legal profession, and such other matters consistent with the mission and purposes of the [LSBA].”9 However, LSBA‘s bylaws prohibit the Legislation Committee‘s involvement with “legislation which is ideological in nature, unrelated to the practice of law, or which is unnecessarily divisive.”10 From 2015 to 2019, the Legislation Committee took positions on at least 136 bills considered by the Louisiana legislature.
LSBA‘s bylaws require it to “timely publish notice of adoption of legislative positions in at least one of its regular communications vehicles and [to] send electronic notice of adoption of legislative positions to Association members.”11 A member who opposes any of the bar‘s activities for political or ideological reasons may file a written objection with LSBA‘s Executive Director “within forty-five (45) days of the date of the Bar‘s publication of notice of the activity to which the member is objecting.”12 LSBA‘s Board of Governors must either refund the pro rata amount of the objecting member‘s dues expended on the challenged activity or refer the matter to arbitration.13
B
Randy Boudreaux is a member of LSBA who practices law in New Orleans. He opposes the mandatory nature of the bar and claims he would not be a member but for the laws and regulations requiring it. He also opposes the use of his dues to fund political activity and legislative advocacy, and he claims that LSBA does not provide
Boudreaux sued LSBA, the Louisiana Supreme Court, and the individual state supreme court justices under
Defendants moved to dismiss for lack of jurisdiction under
Boudreaux timely appealed.14 We consider Boudreaux‘s appeal alongside McDonald v. Longley, which involves similar challenges to Texas‘s bar.15
II
We review dismissals under
III
Before addressing Boudreaux‘s arguments, we detail the two Supreme Court cases that govern First Amendment challenges to state bars, Lathrop v. Donohue20 and Keller v. State Bar of California.21 We emphasize what those cases did decide and, more importantly for this appeal, what they did not.
Lathrop considered whether mandatory bar membership violates the right to free association. A plurality of the Supreme
Lathrop‘s freedom of association holding is limited. First, as the plurality itself emphasized, the opinion addressed only the consequences “of compelled financial support of group activities, not with involuntary membership in any other aspect.”24 So, Lathrop did not consider whether an attorney‘s associational rights are violated by, for instance, being incorrectly perceived as agreeing with the bar when the bar takes a public stance on a topic. Second, the opinion did not specify when (if ever) a bar‘s legislative activity would infringe on an attorney‘s associational rights. The plurality either presumed that the bar‘s legislative activity in the case furthered a legitimate interest or concluded that the legislative activity did not alter the First Amendment analysis because it was not the bar‘s “major activity.”25 The opinion is unclear on that. In any event, Lathrop does not appear to implicate the constitutionality of a bar‘s political activity that is unrelated to improving the legal profession. “At bottom, Lathrop merely permitted states to compel practicing lawyers to pay toward the costs of regulating their profession” without running afoul of the right to free association.26
Three decades later, Keller considered whether a bar‘s use of mandatory dues to fund its political activity violates the right to free speech. The attorney in Lathrop had raised this issue, but the Court chose not to resolve it because the record in that case was ill suited to the task.27 In finally addressing the issue, Keller held that the use of mandatory bar dues to regulate and improve the legal profession does not violate an attorney‘s speech rights.28 However, Keller prohibited bars from using mandatory dues for activities that are not germane to regulating and improving the legal profession.29 The Court explained that state bars could satisfy their First Amendment obligation toward mandatory dues by adopting procedures to prevent the use of objecting attorneys’ dues for non-germane expenses.30 It posited, but did not hold, that the constitutional minimum set of procedures in the union-fee context, set forth in Chicago Teachers Union v. Hudson, would likely be adequate in the bar-dues context as well.31 Hudson requires “an adequate explanation of the basis for the fee, a reasonably prompt opportunity to challenge the amount of the fee before an impartial decisionmaker, and an escrow for the amounts reasonably in dispute while such challenges are pending.”32 But again, the
In addition to their free speech claim, the attorneys in Keller raised a free association claim that was not controlled by Lathrop. Specifically, they argued “that they cannot be compelled to associate with an organization that engages in political or ideological activities beyond those for which mandatory financial support is justified under the principles of Lathrop.”34 In other words, they argued that mandatory membership in a state bar is unconstitutional if the bar engages in any activity that is not germane to regulating or improving the legal profession. The Court acknowledged that the “request for relief appear[ed] to implicate a much broader freedom of association claim than was at issue in Lathrop.”35 But the Court declined to address the claim because the lower courts had not considered it.36 Keller therefore left open whether an attorney can be compelled to join a bar that engages in non-germane activity.37
Both Lathrop and Keller heavily relied on cases governing union membership and dues.38 The Supreme Court has since either overruled those union cases or seriously called their reasoning into question.39 As the parties agree, Lathrop and Keller remain controlling law.40 Even so, we recognize their weakened foundations, which counsels against expanding their application as we consider various questions the two cases left open. With this background in mind, we now turn to Boudreaux‘s claims.
IV
We first consider whether Lathrop and Keller foreclose Boudreaux‘s challenge to mandatory membership in LSBA. Then we consider whether the Tax Injunction Act precludes federal courts from exercising jurisdiction over his challenge to mandatory dues. Finally, we consider whether Boudreaux has standing to pursue his claim that LSBA does not employ adequate procedures to safeguard his dues.
A
Boudreaux‘s first claim is that mandatory membership in LSBA violates the First Amendment. The district court dismissed
Boudreaux alleged that LSBA engages in legislative advocacy that is “inherently political and ideological.” His complaint specifically identifies LSBA‘s resolutions urging a moratorium on executions, opposing civil immunities, and advocating changes to the high school civics curriculum. His complaint also notes LSBA‘s lobbying against reducing the amount-in-controversy threshold to request a civil jury trial in state law, against requiring judges to file financial statements, and against allowing school personnel to carry firearms in schools. With these allegations, Boudreaux plausibly pleads that LSBA‘s political and legislative activity goes beyond what‘s constitutionally permissible under Lathrop—that the activity is not justified by the state‘s interest in regulating and improving the legal profession. That‘s all that is required to present the free association claim that Keller left unresolved.
Discovery may bear out that LSBA does not actually engage in any non-germane activity.42 But at this stage, we take Boudreaux‘s allegations as true and draw all reasonable inferences in his favor.43 Under that standard, dismissing his freedom of association claim as foreclosed by Keller was error.
LSBA does not contest that Boudreaux pleaded the open question from Keller. Instead, it argues that Boudreaux lacks standing to pursue this claim because he did not plead a cognizable injury to his associational rights. Specifically, LSBA argues that Boudreaux has not alleged that it engages in any non-germane activity with which he disagrees. But Boudreaux alleged that he “opposes the LSBA‘s use of any amount of his mandatory dues to fund any amount of political or ideological speech, regardless of its viewpoint” and that “he does not wish to fund the LSBA‘s political and ideological speech and other activities.” Plainly, Boudreaux objects to all of LSBA‘s political activity. And, though Boudreaux characterizes the complained-of conduct as “political and ideological,” rather than using Keller‘s term “non-germane,” pleading standards don‘t demand such precision in terminology or any magic words.44 The inference is clear that Boudreaux considers all of the conduct he identified in his complaint to be non-germane. That is enough to confer standing.
B
Boudreaux‘s second claim challenges LSBA‘s use of mandatory dues to fund non-germane political activities under Keller. The district court characterized the bar dues as a tax and dismissed this claim for lack of jurisdiction under the Tax Injunction Act. We disagree with that characterization.
Under the Tax Injunction Act, “district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.”45 “Distinguishing a tax from a fee often is a difficult task.”46 A classic tax (1) “sustains the essential
Whether an assessment is a tax for purposes of the Tax Injunction Act is a question of federal law.50 The label that the state legislature uses is immaterial.51 A state court‘s characterization may inform the inquiry, but it is not dispositive.52 Here, the district court relied on the Louisiana Supreme Court‘s description of the mandatory dues as “merely a form of levying a license tax upon the right to practice law.”53 But the state court‘s description from a 1942 case is outweighed by other factors.
First, the dues are imposed by LSBA, not the legislature, which supports the characterization of the dues as a fee. In reaching the opposite conclusion, the district court emphasized that the state legislature directed the Louisiana Supreme Court to create LSBA and to impose mandatory dues on its members.54 But this ignores the reality that LSBA, not the legislature, administers and sets the dues.55 And, as Boudreaux argues, “virtually all charges government bodies impose are authorized by some statutory authority.” That the dues were authorized by the legislature thus means little; the question is whether the dues are “imposed” by the legislature.56 A charge is more likely to be a tax when it is “directly set by the legislature.”57 LSBA‘s dues are not.
Second, the dues are imposed only on the attorneys LSBA regulates, not on the public at large. This is characteristic of a classic fee.58
Third, the dues are used to defray LSBA‘s regulatory costs, not to raise general revenue for the state of Louisiana. The district court recognized as much. It nonetheless treated the dues as a tax because
Because all three factors show that the bar dues are a fee, not a tax, dismissal under the Tax Injunction Act was improper.
C
Boudreaux‘s third claim challenges LSBA‘s procedures for ensuring that his dues are not used for non-germane purposes. Specifically, he alleges that LSBA does not provide adequate notice of its expenditures under Hudson because it publicizes only its legislative advocacy, leaving attorneys unable to challenge other activities as non-germane. The district court dismissed this claim for lack of standing, concluding that Boudreaux failed to allege a concrete injury because he had not identified any bar expenditures that he would have challenged if he had been given proper notice. According to the district court, Boudreaux‘s allegation that “the LSBA may also engage in other activities, in addition to its legislative advocacy, that a member could challenge as not germane” was too speculative to establish standing.60 We disagree with the characterization of Boudreaux‘s injury.
As an initial matter, we have never addressed whether the Constitution requires state bars to implement Hudson procedures in their entirety or whether some lesser safeguards may suffice. We now hold that Hudson procedures are a constitutional prerequisite to a state bar‘s collection of mandatory dues. In so holding, we part ways with the Ninth Circuit‘s recent decision in Crowe v. Oregon State Bar that “nothing in Keller mandates a strict application of the Hudson procedures.”61 Like the partial dissent in Crowe, we are persuaded that Hudson is the constitutional floor.62
In the public-union sector, where Hudson originated, the Supreme Court recently expressed skepticism that Hudson notice is ever sufficient to protect a union member‘s First Amendment rights.63
The question remains whether Boudreaux needed to identify a non-germane expenditure to which he would have objected to establish standing on his Hudson claim. As we noted above, Boudreaux‘s complaint does list LSBA‘s alleged non-germane activities. However, Boudreaux never claims that he would have sought a refund of his dues, or otherwise protested, had he been given “an adequate explanation of the basis for the fee.”66
No court seems to have considered whether a plaintiff must identify an expenditure to which he would have objected in order to challenge a mandatory bar‘s procedural safeguards. Lacking clear guidance on the standing issue, the district court turned to Air Line Pilots Association v. Miller.67 The union in Air Line Pilots adopted an arbitration procedure to comply with Hudson‘s second requirement, that union members have an opportunity to challenge an expenditure before an impartial decisionmaker.68 The Supreme Court held that the union members did not need to arbitrate their challenges to the union‘s fees before filing suit in federal court.69 The Court rejected the union‘s concern that allowing plaintiffs to bypass arbitration would be inefficient, admonishing that a plaintiff cannot “file a generally phrased complaint, then sit back and require the union to prove the ‘germaneness’ of its expenditures without a clue” as to which expenditures the plaintiff opposed.70 Rather, the Court explained, “[a]gency-fee challengers, like all other civil litigants, must make their objections known with the degree of specificity appropriate at each stage of litigation their case reaches: motion to dismiss; motion for summary judgment; pretrial conference.”71 The district court relied on that language to require Boudreaux to allege a non-germane expenditure to which he was opposed before he could challenge LSBA‘s procedures.
Air Line Pilots is inapposite. As noted, that case involved Hudson‘s second requirement, the impartial decisionmaker. This case involves Hudson‘s first requirement, that members receive notice of the basis for the fee or dues. More importantly, unlike Boudreaux, the union members
In this case, Boudreaux asserts that LSBA‘s Hudson notice is not fulfilling its purpose. The Constitution requires that bar members be able to challenge expenditures as non-germane, but Boudreaux alleges he is unable to do so because of LSBA‘s deficient notice process. His inability to identify non-germane expenditures is his injury, not the non-germane expenditures themselves. In that way, his claim differs from the union members’ in Air Line Pilots. By alleging that LSBA does not regularly provide notice of its expenditures with sufficient specificity, Boudreaux has pleaded an injury-in-fact for the claim he is pursuing. Dismissing his claim for lack of standing was therefore error.
V
We REVERSE the district court‘s judgment and REMAND this case for further proceedings.
DON R. WILLETT
UNITED STATES CIRCUIT JUDGE