*1 Blaylock; KNOX; L. William Dianne Conover; L. Dobro- Edward

Robert A. Gil; Jr.; Karyn

wolski, Thomas Jacob Johnson; Jumper,

Hass; Jon Patrick and the of Themselves

On Behalf Represent, They Plain-

Class Seek

tiffs-Appellees,

v. EMPLOYEES

CALIFORNIA STATE

ASSOCIATION, LOCAL SER- INTERNATION- EMPLOYEES

VICE AFL-CIO-CLC, UNION, Defen-

dant-Appellant, Controller, Westly, State

Steve California, Defendant.

No. 08-16645. Appeals,

United States Court

Ninth Circuit.

Argued and Submitted Oct. 2009.

Filed Dec.

Jeffrey Demain, B. Altshuler Berzon LLP, Francisco, CA, San for the defen- dant-appellant. Young,

W. James Right National Legal Foundation, Inc., Work Defense VA, Springfield, plaintiffs-appel- lees. by requiring “an WALLACE, these interests balance

Before: J. CLIFFORD R. and SIDNEY of the basis for the adequate explanation R. THOMPSON DAVID THOMAS, Judges. fee, reasonably prompt opportunity Circuit *3 amount of the fee before an challenge the THOMAS; Dissent by Judge Opinion decisionmaker, and an escrow for impartial Judge WALLACE. reasonably dispute while the amounts 310, pending.” Id. at challenges such OPINION pursuant issued 106 S.Ct. 1066. Notices THOMAS, Judge: Circuit known as language have become of question appeal presents This v. Wagner noticefs].” “Hudson Prof'l required, pursuant a union is whether 1036, Gov’t, 354 F.3d 1039 Eng’rs in Cal. Hudson, 475 v. Teachers Union Chicago (9th Cir.2004). L.Ed.2d 232 89 106 S.Ct. U.S. notice, receiving a Hudson After annual notice (1986), to an in addition of nonmembers, employee notice “the nonunion has the burden send a second mid-term fee adopting temporary, objection, a an ... the union raising when but pre- the circumstances increase. Under proof’ of to the retains the burden as case, a conclude that by this we sented of fair share fees. appropriate proportion required, and we re- notice is not second Hudson, at 106 475 U.S. S.Ct. court. judgment of the district verse the policies underlying Hudson that It is the I a inform the determination of whether adequate: Hudson notice is “Basic consid A fairness, erations of as well as concern for long recognized the Congress has stake, ... First Amendment at shop of the union “important contribution objectors giv potential dictate Locke v. system of labor relations.” gauge pro information to en sufficient 798, 803, Karass, 207, 129 S.Ct. 555 U.S. fee.” Id. priety of the union’s (2009) (quoting Abood v. 552 172 L.Ed.2d Ed., 209, 222, Detroit Bd. of B (1977)). L.Ed.2d 261 appeal adequacy This involves the has underscored this Con Supreme Court given by SEIU Local by enforcing right policy gressional (the “Union”), bargaining the exclusive union, bargain the exclusive collective as employees. The agent for California state employees, of its to re ing representative and the State of California have a fair Union employees pay quire nonunion v. Bhd. a series of Memoranda of of the union’s costs. Ellis entered into share Clerks, Han Freight Ry., Understanding controlling Airline and S.S. the terms and dlers, Employees, 466 Express and Station employment employees, conditions of 435, 448, 80 L.Ed.2d that all including provision requiring (1984). However, Supreme Court units employees these State recognized the First has also members, formal Union join the Union as from dis limitation on collection of fees join, “agency” an or opting pay if not to or support for the of ideo senting employees repre- “fair share” fee to the Union for to the union’s logical germane causes not on their behalf. Id. sentational efforts Id. collective-bargaining agent. duties as (known agreement”). “agency shop an at S.Ct. 1883. percent- as a fee is calculated agency paid by members of of the Union dues age Supreme Court es safeguards to the Union. procedural certain tablished day period, challenge

The Union issues Hudson no nonmembers can every June. The tice to all nonmembers Union’s calculation of its constitutionally required notice meant to non-ehargeable expenses, resolved adequate an provide nonmembers with ex impartial decision maker. Knox v. planation the basis of fee. 2:05-CV-02198, Westly, No. 2008 WL (E.D.Cal. S.Ct. 1066. 850128, 28, 2008). *2 Mar. regarding The notice contains information A given July fee is in effect from from expenditures the most 1 through following year June 30 of the recently prior year, audited broken down (the year”), at point “fee which then, by major category expense *4 fee set forth the Union’s next Hudson category, within each allocated between goes notice into effect. The 2005 Hudson “non-ehargeable” “chargeable” and classifi agency paid notice set the fee to be “Chargeable” expenses cations. are those employees nonunion as 99.1% of the Union “germane” that are to the repre union’s dues.1 reduced fee agency of 56.35% functions, sentational can charged and of Union charged dues would be to non- to all union. nonmembers of the See Leh objected members paying who the full Ass’n, 507, nert v. Faculty Ferris fee, agency requested and who a reduction 519, 1950, (1991) 114 L.Ed.2d 572 pursuant procedures and deadlines (Blackmun, J., opinion). plurality “Non outlined in the notice. notice explicit- chargeable” expenses are those unrelated ly subject stated dues and fees were functions, representational to the union’s change without further notice to fee pay- political such partisan expenditures or ers. purely ideological issues. Id. The union 2005, During the summer legisla- may for charge non-charge nonmembers tive within bodies the Union debated and expenses, able but the nonmember has the (also approved temporary assessment re- object, option only and be charged a increase) ferred to as a dues and fees upon reduced fee per based .0025, equal to or .25% of Union members’ cent expenditures of the union’s total that gross wages. The increase took effect at can be as “chargeable.” classified In addi September the end of 2005 and tenninated tion, the nonmember not charged for at the end of December and was benefits, union-sponsored certain such aas expected to raise for million the Union. $12 card, credit credit union that are not avail able to nonmembers. Specifically, July on Budget proposed Committee an emergen-

The financial in the information cy temporary create what forms the for calculating basis the fee to agenda was termed in the item introducing be paid by during nonmembers the ensu- it Fight as a “Political Back Fund.” ing year. This provides fee The notice also that agenda item stated the Fund “will be thirty days after used issued, the notice is range for a political expenses” broad employees nonunion can to the col- fee, response to several proposi- lection of the full “anti-union” and elect tions on only pay special instead to the November 2005 a reduced rate elec- during California, tion upcoming year fee on ballot in per- based and fund centage ratio of “will chargeable expenditures regular not be used for costs of the to total expenditures. During thirty rent, union—such as office staff salaries or noted, gap 1. As between and 99.1% benefits. 100% represents the value of member restricted under 42 Id. On Fourteenth replacement.” equipment routine delegates § voted 1983. Plaintiffs filed for sum- 2005 Union U.S.C. August increase. temporary dues filed a mary judgment, and Union implement sent Union August summary judg- partial On cross-motion for pay- and all members letter to granted district court Plain- ment. The subject to the they were stating ers entirety, partially motion in its tiffs’ increase, that the fund would new granted partially denied the Union’s 75,” 76 and Propositions “to defeat used timely appeal This followed. motion. pension future attacks on Union other review de novo district We activities. and other plan, summary judgment on the grant court’s material indicated The Union sufficiency of the Hudson notice. Cum activi political the fund would be used (9th Connell, mings F.3d v. Yet, inquiries, response ties. Cir.2003). review, determine, On we must intended to specifically stated light viewing the evidence most actions increase “between split the nonmoving party, favorable to the whether *5 Fur bargaining actions.” and collective any of material genuine there are issues ther, activities fell political not all of the the district court correct fact and whether “non-chargeable” category. into the ly applied the relevant substantive law. lim spending itself included no assessment Med., Idaho Bd. 363 F.3d Olsen v. State of itations, actually used money and the was (9th Cir.2004). 916, 922 activities, political and range of both Pursu not, and not.2 chargeable and both II increase, began the Controller ant Aat fees from Plaintiffs collecting additional 2005. September reviewing adequacy

the end of In the of the Hud- notice, employ son we our usual standard classes of non- represent Plaintiffs two review, Hudson. In that dictated objected to those who employees, union case, Supreme the Court articulated the (“objec- notice 2005 Hudson the Union’s analy- legal applied standard to be this tors”) (“nonobjec- not and those who did test, balancing stating that “[t]he sis as “Plaintiffs”). Knox, tors”) (collectively objective way pre- must to devise a 850128, initiated at *2. Plaintiffs 2008 WL compulsory of ideo- venting subsidization alleging the action in November this First, Fifth, activity by employees who logical and violated their 1950; Lehnert, e.g., 111 S.Ct. both conflate The district court and dissent Mahdesian, non-chargeable political expenses and ex- 268 F.3d 692 n. 6 Foster v. condemning the assessment as penses (9th Cir.2001); when Treasury Employees Un- Nat'l departure "purely political” and a drastic 839, 853, Chertoff, 452 F.3d 859-60 ion v. Yet, spending. this is not from usual Union (D.C.Cir.2006) (regulation allowing employer audit supported by the record. The later re- unilaterally abrogate collective charge- included both vealed the assessment agreements fundamentally a un- diminishes non-chargeable expenses, and the able bargaining position ion's and nullifies the chargeable percentage the 2006 Hudson Here, Propo- right bargaining). to collective notice, spending the from the which included effectively permitted would have sition 76 assessment, actually larger than that abrogate the Union’s collective Governor the 2005 notice. from bargaining agreements under certain circum- addition, expenses political all are au- stances, undermining ability the Union's Rather, ger- tomatically non-chargeable. if representation duty negotiating perform bargaining, they can be mane to collective bargaining agreements. effective collective See, just expense. like other 1120 (a regardless sys- payers, of cost no restricting without test

thereto possibly satisfy); to con- in- ability require every employee tem could rather we collective-bargaining quire system reasonably to the cost of ac- tribute whether at 106 legitimate activities.” 475 U.S. commodates the interests Abood, at (quoting union, 431 U.S. [public employer] S.Ct. and nonmem- 1782). S.Ct. employees.” ber Id. argue Therefore, abandon The Plaintiffs we should we apply will the normal balancing test established balancing Hudson and reasonable accom- They scrutiny in favor of strict review. past modation test we have used in the compelling argue case involves deciding challenges when Hudson issues, speech their on See, procedures.3 e.g., Wagner, F.3d government-mandated therefore 1039; Cummings, at 316 F.3d at 890. cases, application and their of strict speech B scrutiny Riley apply, citing should v. Nat’l test, Applying the we balancing Blind, 781, 795, Fed’n conclude that the Union did not violate (1988) L.Ed.2d 669 requirements. Supreme Visitors, Rosenberger v. Rector & recognized Court Hudson the impossi 819, 827-29, 132 L.Ed.2d bility determining of a chargeability (1995). disagree. We anticipated expenditures union’s First, legal Hudson itself articulated the year, outset of and specifically applied, to be are not standard and we free approved calculating present year’s ob reject the balancing test mandated *6 jector based on prior year’s fee the total Supreme the Court. expenditures. Supreme ex Court plained, “We continue to that recognize

Second, we the test in articulated practical why there are reasons absolute City v. San Grunwald Bernardino Unified precision the Dist., (9th Cir.1993). charge in calculation of to the 994 Sch. F.2d 1370 expected nonmembers cannot be re in or challenges noted that case that in We to Thus, instance, quired. for can the First procedure by the used unions, not be faulted for calculating its fee the employ proce the union need on not expenses basis of during preceding that its the dures “would minimize further the Hudson, year.” Grunwald, 475 payers.” burden on fee 307 n. 106 (internal test, all, quotation F.2d at 1376 n. 7. S.Ct. 1066 “The after marks and omitted). [employ is not whether the union the citations a and Hudson thus struck have up system come with the that balance rights er] between and burdens context, imposes least burden on fee this acknowledging that a union is ing 3. The dissent takes issue character- with resolve conflict with fairness to requirements balancing ization of Hudson as a both That is a balanc- sides. test. test, ing focusing language addition, requir- instead on consistently we have recognized ing impingement unions to minimize on legitimate have a unions and interest rights emphasizing See, ability nonmembers’ charge agency "settled” fees. "right” Union has no fees e.g., Cummings, to be 316 F.3d at not 889. We do by balanced such a dissent test. The insists rises to the intimate this level of a constitu- balancing yet, inappropriate, "right,” test is there tional but that does not mean way faithfully no other is characterize the union not have does at all in such procedure set out in Hudson ac- Hudson. situation. S.Ct. knowledges competing (affirming right are at "require interests union’s non- play, particular employ- set employees, describes of consti- as a union condition of tutionally fees). acceptable procedures attempt- pay fair ment” to share The Hudson notice can any out over time. required to take constitutionally prediction, be more than a which payers fee never demanded steps and all accurately the un- inevitably fee notice be incorrect as to that its annual will insure upcom- in the spending expenditures. actual The Hudson ion’s actual predicts not, be, ing year. expected notice is and cannot be than that. more prac- method is a year prior of the Use because, large public C necessity tical unions, notice must be the Hudson sector The district court faulted the Union for statements, with on audited financial

based prediction an failing to make accurate percentage calcula- the union’s notice of its actual its June 2005 Hudson auditor, independent tion verified in the remainder of that fee expenditures payers its fee the union must send year subsequent due to the enactment report with its Hud- auditor’s independent Yet, temporary increase. under the n. 475 U.S. at 307 notice. son procedure, any payments normal Hudson requirement audit ren- 1066. The actual charge- over and above the Union’s determining any method of impossible ders expenditures year able the 2005 fee upcoming changeability incorporated would be into the rate for the basing than it on year’s expenditures other year. Supreme next fee Court has year’s expenditures, actual be- prior sufficiently accu- determined is anticipated future one cannot audit cause with the constitutional re- comply rate money has been expenditures. Until There no principled strictions. distinc- cannot determine spent, auditor the paradigmatic tion to be drawn between which the union expenditures whether employed one procedure and the expenses were it made for certain claims here. actually expenses. made for those Pres- Indeed, in the usual Hudson notice situ- Dorado, 177 F.3d County El cott v. ation, chargeable percentage the actual (9th Cir.1999), vac’d & remand- spending any given actual union’s grounds, other ed on *7 year, precise as well as the dollar amount in 145 L.Ed.2d reinstated fees, Cir.2000). likely vary from the (9th of dues and will part, relevant 204 F.3d 984 forth in prior year’s figures appli- set the “pri- effect of the Hudson The inevitable allege cable Hudson notice. The Plaintiffs lag is a of at least one year” or method procedure not a that the Union did a year between the time when union incurs avoid the risk that nonmembers’ would ratio and when the audited of expenditures special from the assessment would funds expen- to total chargeable expenditures used, temporarily, to finance non- be even objec- calculate the applied is ditures activities, merely but offered chargeable year. Fluctuation is fee for the next tors’ a possibility dissenters the of rebate. year, in in such a method: each inherent Therefore, reason, proce- the Plaintiffs the objectors may “underpaying” be or “over- unconstitutional. This construction dure is compared fees when paying” concepts takes the central Hudson com- actual chargeable percentage of the union’s applies them in a pletely out of context and year under in that because expenditures only the fee way that would not invalidate “prior year” method the fee is Hudson’s increase, very invalidate the but would chargeable percentage the upon based system by the Su- procedural decreed year’s expenses, actual but the prior the appear Plaintiffs Court Hudson. preme is effect of the Hudson method inevitable the assessment was undercharges argue that because over- and even that these reasons, a “purely” may there new collective political used for be to be constitutionally not collected from negotiated, resulting could in a agreement high place, and that in the first objectors nonmembers chargeable percentage for that is incorporation collection and then later by an election that year followed results non-chargeable amount into a future of the objectors. percentage a low for chargeable would tanta- objector fee rate fact, example, chargeable per- for the impermissible to an rebate of the mount centage year incorporating for the Yet, already fee. the had earlier spending, higher the fee increase was than nonmembers, objecting for reduced fee that for Hudson notice. has and demonstrated prior year Hudson’s method assumes intend- purely non-chargeable, nor accepts “typical and that a union has no Further, be so. record ed to belies that spending regime,” though and even charges that were used assertion spending might vary dramatically, single non-chargeable expenses.4 “purely” year’s annual based upon prior discussing re- The section Hudson constitutionally audited finances suffi- is did not condemn the reduc- bates advance Otherwise, cient. a union’s Hudson notice here, procedure tion the Union used but partisan an upcoming political election “pure system rather a rebate” where year, following negotiating year, could equal nearly a fee that union collects or upon not be based the union’s actual total dues, to full equal provides and then expenditures in previous year because portion non-chargeable rebate coming the union would intend fee objectors only year. end year “depart drastically previ- from its 475 U.S. at 106 S.Ct. spending regime ous focus on activi- 1066; Ellis, 443-44, see also ideological ties or in na- charged Here the Union Yet, system ture.” this is the set out objectors only 56.35% of the following no ques- case has increase, set percentage vitality. continuing tioned its The fact notice, forth the June 2005 than rather a projection expenditures may dif- 100% the increase followed later expenditures fer from actual should sur- rebate. prise key analytic no one. The point for Additionally, the district court’s di- purposes proper is that notice is rection a union must issue a second given subsequent adjustments made. depart Hudson notice when it intends “to The district court’s conclusion was also drastically spending from its typical re- *8 precedent. at odds with our The district gime and to focus on activities that [are] up court the to Union come with Knox, political nature,” or ideological in system imposes the least burden on *8, at practically 2008 WL 850128 is un- However, spending may payers. legal workable. Union sub- fee the vary stantially year year year from requirement to one for unions in this situation is —in argue court explicitly only The district and dissent the Plaintiffs concede theirs is inadequate partly 2005 Hudson notice is be- challenge, procedural challenge not a year prior speak cause the method does not to the spending Union's actual of the fees. "political” the nature of the or the Since, Plaintiffs, according chargeability is propriety changeability of the Union’s deter- challenge, immaterial their their chief ar- Yet, we minations. have held there a fun- is (and dissent) gument premised that of the "changeability” damental difference between upon alleged non-chargeability the the in- challenges "procedural” Hudson notice (its nature), purely crease must fail. challenges. Wagner, 354 F.3d at 1046-47. Ill merely “reason- system establish legitimate the interests ably accommodates complied case The Union’s notice union, employer] and [public the procedural requirements. with the Hudson as is the Union’s employees,” nonmember court, Therefore, we reverse the district Grunwald, 994 F.2d at obligation under deny and remand with instructions v. Educ. Ass’n 7; Andrews n. accord summary judgment. Plaintiffs’ motion for (2d Cheshire, Cir. F.2d of defendant’s also reverse the denial We (“When 1987) plan the union’s satisfies summary judgment re- partial motion for plan established standards nonobjectors the consent of under garding can opponents even if its upheld should be law, and remand with instruc- California less plausible alternative put forth some grant tions to the motion. We reverse not to be coerced right of their restrictive damages award of nominal to Plaintiffs. support political ac- funds to to contribute support.”). not wish to they do tivities AND REMANDED. REVERSED the standards 2005 notice satisfied The WALLACE, Judge, dissenting: Circuit by Hudson.

established decision Daven- Supreme Court’s majority’s opinion I from the dissent Ass’n, 551 Washington v. Education port principles it not faithful because L.Ed.2d 71 127 S.Ct. guiding Chicago the Court’s decision contrary (2007), us to a does not lead Teachers v. Davenport, Supreme conclusion. (1986). L.Ed.2d 232 out- requirements held the Court an inaccurate majority begins from by which procedures a minimum set of line stake, ap- account of the interests at shop union in an public sector procedures set forth Hudson plies could meet its constitutional relationship distinguishing without due attention legislatures and that state requirements, contrary facts of this case. The result is a union’s entitle- limitations on may place prin- First Amendment to well-established in Hud- those laid out ment to fees above ciples. in the context of arose Davenport son. I. enacting legisla- Washington state of legal authorization for give begin all nonmem- I unions to requiring tion objector they rate unless affir- agency shop system pro- bers the because for non- matively agreed charged to be my the framework for evaluation of vides (in activities contrast case, I am in this and because the issues equals con- rule where silence California majority’s opinion pres- the view dissent). 182-83, sent, than Id. at rather of the relevant incomplete ents an account held that while Davenport 127 S.Ct. 2372. legal principles. consent rule” is consti- equals the “silence A. tutional, for a state it is also constitutional Relations Act allows The National Labor equals a “silence dissent” rule. Id. to make regulate the states to their labor relation- 190-91, 127 2372. Under Daven- *9 public employees. sector See 29 ships with legislatures, rather than port, it is state 152(2). states, Many including § U.S.C. courts, power implement to that have California, unions and public-sector allow holding does not This higher standards. employers “agen- to enter into government case that the our conclusion this alter arrangements. Lehnert v. Ferris cy-shop” adequate to cover 2005 notice was Ass’n, 507, 511, 111 Faculty 500 U.S. S.Ct. increase, Davenport subsequent dues as (1991); 1950, 114 572 Cal. Gov’t L.Ed.2d speak not to such situation. does 1124 3502.5(a). §

Code Local Despite infringement Defendant SEIU of First (Union) bargaining engendered by Amendment designated 1000 agency-shop arrangement, the Supreme representative employ for California state Court deemed ees, arrangements has such to pursuant agency-shop to such an ar constitutionally permissible in principle. rangement. legally obligated The Union is Karass, 207, v. Locke U.S. 129 555 employees represent equally all in the 798, 801, (2009) S.Ct. 172 L.Ed.2d 552 NLRB, unit. v. Lucas 333 “in (holding government principle, (9th Cir.2003). 927, F.3d 931-32 The Un may require payment this kind of every employee ion a fee on lie. levies whom violating fees] without the First represents bargaining, in collective even if Amendment”). The Court has determined join employee refuses to the Union. agency-shop arrangements “justi- are See, e.g., Int'l Ass’n Machinists v. of government’s fied interest in pro- Street, 760-764, 740, U.S. 367 81 S.Ct. moting peace avoiding labor the ‘free- 1784, (1961). L.Ed.2d 1141 6 The fees problem rider’ that would otherwise ac- paid by bargaining employees unit who are company Lehnert, union recognition.” 500 of commonly members the Union are 520-21, 1950; U.S. at 111 S.Ct. see also “agency or known as fees” “fair share Abood, 222, 431 U.S. at 97 S.Ct. 1782. fees.” Plaintiffs in case eight are Importantly, however, a union “[may] Union, of representing nonmembers not, consistently Constitution, with the col 28,000 approximately public class of em lect dissenting from employees any sums ployees, required pay who an agen for the support ideological causes not cy fee. germane collective-bargain duties as Agency-shop arrangements present ing Airline, agent.” Ry., Ellis v. Bhd. of First Amendment concerns. See id. at Clerks, 435, 447, & S.S. 466 104 U.S. (union shop presents S.Ct. 1784 1883, (1984). Instead, 80 L.Ed.2d 428 non First “questions of the utmost may only members compelled to con gravity”); Railway Employees’ Dep’t v. tribute a fair germane share of costs Hanson, 225, 236-38, 351 U.S. 76 S.Ct. bargaining. collective Ry. See Bhd. & 714, (1956). 100 L.Ed. 1112 These con- Allen, 113, 118-20, S.S. v. Clerks 373 U.S. particularly sharp cerns are public 1158, (1963). 83 S.Ct. 235 L.Ed.2d As a “agency-shop arrangements sector: in the corollary, nonmembers have constitution public sector raise First Amendment con- al right to “prevent the Union’s spending a they cerns because force individuals to part of their service fees to con money contribute as a unions condition tribute to political candidates and to ex government employment.” Davenport press political views unrelated to its duties Ass’n, v. 177, 181, Wash. Educ. representative.” exclusive bargaining (2007). 127 S.Ct. L.Ed.2d Abood, 1782; 97 S.Ct. see explained Davenport Court also, e.g., Beck, Commc’ns Workers v. “[r]egardless one’s as to views the desir- 735, 762-63, U.S. 108 S.Ct. ability of agency-shop agreements, ... it is (1988); Union, L.Ed.2d 634 v. Price Int’l undeniably government unusual for a Auto., Agric. United Aerospace Imple & give private entity Workers, the power, (2d ment 927 F.2d 90-91 Cir. essence, 1991). tax government employees.” “The amount at stake for each citing Id. Abood v. individual dissenter does not diminish this Educ., 209, 255, For, Detroit Bd. amount, 97 concern. whatever the *10 (1977). quality respondents’ 52 L.Ed.2d 261 interest not be- is, propagation that ing compelled expenses subsidize those related to collective ideological they or views that bargaining and contract administration. Hudson, oppose is clear.” at procedure The union also established 106 S.Ct. 1066. the consideration of objec nonmembers’ failed, however, tions. The union pro B. vide nonmembers with explanation of addition, In procedural protections are how the fair share fee was calculated or constitutionally required in connection with explanation of procedures. the union’s a union’s assessment and collection of an The Court held that the procedure union’s Hudson, agency fee. In the Court consid- inadequate for three reasons: “be procedure ered whether a union’s for the cause it failed to minimize the risk that collection of adequately pro- fees employees’ nonunion germane might tected the distinction between contributions collective bargaining noncharge- impermissible costs and be used for purposes, be political expenditures. able The Court ex- cause it to provide adequate failed justifi plained procedural protections were cation dues, for the advance reduction of constitutionally this context for and because it failed offer a reasonably two reasons: prompt impartial decision an decision-

First, although the government interest 309, 106 maker.” Id. at S.Ct. 1066. peace in labor strong enough sup- First, the procedure at issue in Hudson port “agency shop” notwithstanding was constitutionally deficient because it infringement its limited on nonunion em- merely offered dissenters the possibility of ployees’ rights, constitutional the fact rebate; it failed to possibil- minimize the rights protected that those are by the ity that dissenters’ funds would be used for requires First Amendment pro- an improper purpose in the first place. carefully cedure be tailored to minimize The Court stressed that the union should Second, the infringement. the nonunion permitted to exact an agency fee employee individual whose First —the from dissenters “without establishing first Amendment rights being affected— procedure which will avoid the risk that must have a fair opportunity identify used, their funds will be temporarily, even impact of the governmental action ideological to finance activities unrelated to on his interests to assert a meritori- collective bargaining.” Id. at ous First Amendment claim. added; (emphasis S.Ct. 1066 quo- internal 302-03, omitted), Abood, tation marks citing “[sjince that, 1066. The Court held U.S. at 97 S.Ct. 1782 (concurring opin- agency shop ‘a significant itself is impinge ion). ment on rights,’ First Amendment ... Second, procedures the union’s government and were responsibili union have a ty constitutionally held procedures that deficient because em- minimize impingement ployees and that had not provided been with suffi- facilitate nonunion employee’s ability protect cient his information about the basis of the rights.” Id. at n. “[bjasic 106 S.Ct. 1066 proportionate share: consider- added), (emphasis Ellis, quoting fairness, ations of as well as concern for at S.Ct. 1883. stake, the First also dictate that potential objectors

In defendant, giv- a teacher’s union, en implemented gauge had sufficient information to pro- a fair share proportion priety calculated as the union’s fee.” Id. at expenditures Abood, in the preceding year, fiscal S.Ct. 1066. had Court stat- *11 duty provide “important it contribution of the union

ed that was union’s relations,” and records from shop system “the facts which of labor proportion expen- to total union Supreme Court has under- “[t]he reasonably calculated.” ditures can Congressional policy by scored this enforc- 239-40, 1782, quot- U.S. at n. 97 S.Ct. right union, ing the of a as the exclusive Allen, at ing 83 S.Ct. 1158. collective-bargaining representative of its The Court went further hold- employees, require nonunion employees ing required provide that the union was a fair pay share of the union’s costs.” objec- awaiting this information without an majority The puts finger its on the tion. wrong side of the scale. A union has no 1066. fees, “right” to the collection of Third, Hudson held that there must be a merely and Hudson does not call for dispute procedure. resolution The Court “reasonable of employees’ accommodation” provide stated that a union must both “a rights. constitutional From the frame- reasonably prompt opportunity to chal- above, work I described view the Union’s lenge the amount of the fee” as well as “a procedures differently much than the ma- reasonably prompt by impar- decision an jority. majority’s I fear that the account 307, 310, tial decisionmaker.” Id. stake, compounded of the interests at by added). (emphasis proce- S.Ct. 1066 The test, operative legal its view the invites inadequate dure at issue in Hudson was Indeed, confusion. tampers vitally it it by because was controlled the union and important First principles. did not for an impartial decision- (describ- maker. Id. at 106 S.Ct. 1066 “ ing conspicuous ‘most feature of the begin I cannot from proposition procedure is that from start to it finish we are “rights” balance the ”). entirely controlled the union’ against rights the Union of the em- pro- Court further held that a union must ployees represents. majority While the vide an “escrow for the amounts reason- only way insists that “to faithfully ably dispute challenges while such are procedures characterize the set out ” pending.” Id. at 106 S.Ct. 1066. is to “balance” the Union’s considerations, “right” to

Drawing against on these collect fees Hud requirements son outlined three a un rights first amendment of non-union em- (1) ion’s collection of an n.3], fee: “an ployees [Maj. Op. major- it is the adequate explanation of the basis for the ity that is unfaithful to Hudson and her (2) fee,” “reasonably prompt opportunity progeny. The Union’s collection of fees to challenge the amount of the fee before from nonmembers is an authorized act (3) impartial decisionmaker,” “an legislative grace, by any not inherent escrow for the reasonably amounts in dis “right” possession of the Union to the pute while such challenges pending.” nonmembers’ funds. Davenport, Id. at S.Ct. 1066. U.S. at 127 S.Ct. 2372. This should C. clear all. Davenport, the Court explained that agency-fee cases “were

Surprisingly, in the case before us the balancing constitutional majority characterizes the Hudson “test” manner suggests, for the sim- [the union] “balancing as a test” or “reasonable ac- ple reason that no chooses, commodation test.” unions have constitu- majority moreover, highlight tional entitlement to the fees of Union’s inter- nonmem- ests, stating Congress recognized lines, has ber-employees.” Along Id. similar

1127 by accepted by has held that it is error advanced the unions and Circuit Second Congress why authority issue “with a approach agency-fee make union- Lehnert, in which the cost to the balancing shop agreements justified.” test practicality proce- 554, 1950, union and quoting 500 U.S. at 111 S.Ct. weighed against to be the dis- Street, 768, dures were 81 S.Ct. 1784. An- First Amendment interests.” senters’ Thus, majority is mistaken. The Cheshire, F.2d v. Educ. Ass’n 829 drews Union’s interest this case is not a (2d Cir.1987). 335, 339-40 “right” to nonmembers’ funds. The Un- Davenport Washington considered in receiving ion’s interest lies a fair con- unions from prohibiting state law labor tribution to its collective ex- fees of nonmembers using agency-shop penses. The no legitimate Union has purposes for election-related unless the interest, however, collecting agency affirmatively nonmember consented. 551 fill fees from nonmembers to 185, 127 The at S.Ct. 2372. Court U.S. war-chest. this restriction on a considered whether 2. fees, spending applied union’s majority The describes Hudson as a unions, public-sector violated the labor “reasonable accommodation test.” The emphatical First Amendment. The Court majority points following to the statement did not: ly determined restriction objective from Hudson: be to “[t]he must notion that this modest limitation “[t]he way preventing devise a compulsory extraordinary benefit violates the upon ideological activity subsidization of by em- is, least, say First Amendment coun ployees who thereto without re- 184, at 127 terintuitive.” Id. S.Ct. 2372. stricting ability require ev- funds; in right The union had no ery employee to contribute the cost of stead, public-sector matters is that “[w]hat collective-bargaining activities.” 475 U.S. possession fees are the union’s at 106 majority S.Ct. 1066. The also only Washington and its union- because “any states that a union need not take contracting government agencies have steps by payers.” all demanded fee compelled employees pay their those majority looks to our decision in Grunwald at fees.” Id. S.Ct. City v. San Bernardino School Unified properly, agen- the collection of Viewed District, which stated: ... “[t]he test cy by legislative policy fees is authorized [employer] whether union and the pertaining considerations to labor rela- up system impos- have come with the Locke, Abood, 803; tions. 129 S.Ct. at 431 payers, es the least burden on fee at U.S. 97 S.Ct. 1782. There are regardless of cost.” 994 F.2d n. 1376 justifications agency shop, several for an (9th Cir.1993). 7 only implicated but one is in this case: to gap But there is a wide between taking prevent free-riding by nonmembers who “any steps and all pay- demanded bargain- benefit from union’s collective is, ers”—that a least-restrictive means ing Davenport, activities. at U.S. majority test —and what endorses. (describing the “pri- While Hudson not require does a union to mary purpose” agency-shop arrange- adopt procedures impose the least prevention free-riding by ments as non- Abood, payers intrusive burden on fee members); possible, see also 1782; Ellis, majority affords the union undue le- 466 U.S. at 447- See, Andrews, niency. ideologi- e.g., Political and 829 F.2d at S.Ct. 1883. expenditures majority ignores cal fall outside “the reasons 339-40. Hudson’s that, First to draw more attention to the well-rea- employees’

instruction because implicated interests are decision of the district court. soned *13 fee, agency proce an “the the collection of A. carefully tailored to mini be [must] dure issues a Pursuant to the Union infringement.” 475 U.S. mize the agency payers every to June. At 302-03, (emphasis 1066 add at 106 S.Ct. in issue this case is the Union’s June 2005 ed). doubt, eliminate in the foot To agen- Hudson notice. That notice set the statement, the Court appended note to cy fee to be extracted from nonmember’s holding that First cites several cases when at of full union paychecks 99.1% member- implicated, gov objected ship dues. Nonmembers who burdening must avoid those ernment paying nonchargeable expenses for would 11, 1066, 303, n. rights. Id. at 106 S.Ct. fee, at pay agency reduced set 56.35% of Jaycees, v. citing Roberts United States full membership union dues. The 609, 637, 3244, 104 S.Ct. 82 468 U.S. in the in fees described notice were effect (1984); Burns, L.Ed.2d 462 Elrod v. following July, until the when a new Hud- 347, 363, 2673, 96 S.Ct. 49 L.Ed.2d U.S. son notice was to become effective. The Pontikes, (1976); Kusper v. provided June 2005 Hudson notice also 58-59, 303, 51, 94 S.Ct. 38 L.Ed.2d 260 objection period thirty days, during of Button, 415, (1973); NAACP v. 371 U.S. payers object which nonmember fee could (1963). L.Ed.2d 405 to the collection of the full fee and moreover, emphasized, pay elect to the reduced fee. Some “procedural safeguards spe- often have a in plaintiffs objected of the this action First Amendment context.” cial bite notice, the June 2005 Hudson while others n. 106 S.Ct. 1066 did not. (internal quotation marks and alteration shortly the Summer after the omitted). context, In the agency fee Hud- expiration period objection for goal of procedural pro- son described notice, the June 2005 Hudson the Union’s as to “minimize the tections risk non- legislative began discussing bodies a tem- employees’ might union contributions porary proposal dues increase. The for impermissible purposes” used even 305, 309,106 “Emergency Temporary described as an temporarily, id. at S.Ct. employee’s Fights “facilitate nonunion Assessment Build Political ability protect rights,” his at 307 n. agenda July id. Back Fund.” The 1066. I therefore conclude Meeting 2005 Council the pur- described majority’s “reasonable accommo- pose of the assessment as follows: “[t]he misguided dation test” is and is inconsis- emergency temporary funds from this as- tent with case law that we are specifically sessment will be used follow. political arenas California to defend and II. advance the interests of members of Local ” agenda 1000.... The continued to de- procedures this case scribe: light should evaluated in princi- emergency These assess- ples legiti- set forth in Hudson and the necessary by political ments are made majority mate interests at stake. As the employees attacks on state and other already has set forth the facts of this case launched Governor detail, public workers only in some I recite them where Schwarzenegger and his allies which particularly my relevant to views or where wages, additional detail is warranted. I also seek threaten the benefits and work- told, members, effect, Fight-Back Local 1000 Fund.” He was ing conditions of they provide nothing the services that there was he could do and undermine about it; object. he was not allowed to people California. thereafter sent a letter to nonmem- that the “Political contemplated The Union bers, Dobrowolski, like plaintiff who at- Fund” would not be used Fighb-Back tempted to to the increase in fees. the union ... such as “regular costs of letter, 27, 2005, That dated October stated rent, equip- routine staff salaries or office in part: Instead, the Fund replacement.” ment your objection The Union has received range politi- “for a broad

would be used *14 to the dues increase. expenses.” cal We understand you objector that a political are and a approved temporary as- The Union payer you in the Union and that August at the end of 2005. The sessment objection have an paying raised to this yearly Htidson notice had been Union’s you money increase because believe the that issued June and notice did solely will be directed activi- possibility not mention the of the later- by ties your Union. We understand temporary enacted assessment. After paying frustration about a little more to assessment, passage temporary you the Union when have not seen a new non- Union sent a letter members and However, contract pay with a increase. members, 31, 2005, August dated inform- hope we that by explaining the Union’s ing delegates them that “Local 1000 voted position concerning this dues and fees temporary for a in- overwhelmingly dues increase, you will better understand our Fight-Back crease to create a Political position.... letter Fund.” The stated the funds collected from the dues increase would be campaign When we have a split (1) to political purposes: used for several political actions between and collective propositions appearing defeat two on the required actions the Union is (Propositions November 2005 ballot 75 and by annually expendi- law to audit the (2) 76); attack to “defeat another on activities; [the] for tures those the Union will (3) 2006; pension plan” in June “[i]n and fully comply requirement. with this governor November 2006 ... to elect a However, Supreme Court has stated who legislature support public employ- that this audit must occur at the end of [they] ees and the services provide.” year the fiscal in which the activities month explained per letter $45 place, year’s objecting take because next cap apply tempo- on dues would not to the fee-payer rate must be based on that rary I clarity, assessment. For sake of audit. point that this out letter did not constitute campaign This much will entail work- contemplated “notice” as Hudson. The place organizing divided over fiscal two provide an explanation letter did not years. year, At the end of each being the basis of the additional fees im- expenses Union’s for these activities will posed, and it did not nonmembers audited, expense and the amount of opportunity object an the addi- germane which is not to collective bar- tional fees. gaining objecting will be used to set letter, fee-payer year. rate for next receiving the Pres-

After Union’s some ently you objecting attempted fee-payer who nonmembers temporary pays year. the audited rate for this example, assessment. For year, you plaintiff Dobrowolski contacted the Union Next will be able to exercise objection your objection lodge again pay his “Political audited misleading year, based on the assessment was rate set for well, That expenditures year. and that respects other any political fully rate will account actual increase fair share fee for non- you of the nature to which have actions ranged, average, on from 25% to members objected. “a 33%. The district court deemed this change in the amount of funds material temporary assessment took effect at employees nonunion were to con- time, 2005. At that September the end of California, expenditures.” tribute to Union The dis- the Controller of the State concluded, Westly, began deducting trict court “the fair share fees defendant Steve automatically from all the additional fees objectors nonobjectors both paid Al- employees’ paychecks. nonmember actually greater a much mar- increased though “temporary,” the assessment was sug- than like to gin Defendants would duration, certainly lasting not of short gest.” until of De- September from the end Second, the district court discussed the cember 2006. *15 temporary characterization of the special B. assessment. Plaintiffs asserted that the 2005, plaintiffs In November initiated solely political fund was intended and in District this action the United States ideological purposes. The Union charac- Court for the Eastern District of Califor- ordinary terized the assessment as “an nia, contending temporary the as- because, dues and fees increase” in retro- First, sessment violated their Fifth and spect, expenses some of funded rights. Fourteenth Plaintiffs through temporary assessment were alleged, among things, other tem- eventually deemed to nonmem- porary assessment constituted seizure thought bers. The district court the Un- money nonchargeable political their position logic.” ion’s “deified] The Union expenses, constitutionally without re- had the proposed described assessment as quired procedural safeguards. The dis- fund, political specifically and stated that granted injunc- trict court a preliminary regular the fund was not to be used for plaintiffs. tion to On cross-motions for costs. summary judgment, the district court en- Third, taking together, all of the above summary judgment plaintiffs’ tered fa- the district court concluded that the June vor. provide potential objec- 2005 notice did not important There are several features of gauge tors sufficient information to summary judgment. the district court’s fee, propriety light of the Union’s First, the court district addressed the bur- temporary special assessment. The imposed by temporary special den as- June 2005 Hudson notice could not argued sessment. The Union that non- adequate notice temporary as to the as- objected members who had June categories sessment because it relied on 2005 Hudson only were assessed temporary that were not relevant to the 14.09% increase in the from the deduction According assessment. to the Union’s objector’s salary. The district court statements, temporary special assess- opined figure was “somewhat mis- specific purpose ment was intended for a leading” in- ignored because the fee regular and would not be used for ex- imposed employees crease on nonunion penses. pointed The district court out objected who had to the Union’s June that, increase, 2005 Hudson notice. The district court implementing “after quantification position indicated the Union’s of Union took the that nonunion em- no other already given oppor- adopted procedures protect been ion had ployees informed decision as to nonmembers’ First Amendment tunity to make an upon imposition temporary of the 2005 assess- means the Assessment provided turns a ment. Nonmembers were no ad- notice. The Union now Hudson notice, object, inconsistency opportunity inherent in ditional dis- eye to the blind compare pute procedure, resolution and so forth. asking employees non-union failures, year’s Compounding procedural these prior in the form of apples, financials, problem. a new there is a The tem- oranges, the form of substantive porary suspect, because it Assessment.” shortly gen- after the was instituted June court concluded that Finally, the district explicitly eral Hudson notice and was remedy was a second appropriate exclusively intended to fund the Union’s notice, relying Wagner on v. Pro political activities. assess- Govern Engineers in California fessional special ment was a purpose fund that (9th Cir.2004). ment, 354 F.3d regular would not be used for Union costs remedy had to be made available to This represented a departure therefore regardless they of whether nonmembers typical spending from the regime.1 objected to the June 2005 Hudson had sufficiently I do not believe the Union notice, order for non “[i]n because: the risk that minimized nonmembers’ failure to to have employees’ union funds would be used to subsidize any legal significance, the 2005 Hudson ideological light activities of these must have been valid and sufficient Notice *16 circumstances. the Assessment.” The district to cover A. objectors held that to the second court a

Hudson notice would be entitled to re I of adequacy first consider the Un- fund, interest, of withheld in light ion’s June 2005 Hudson notice amounts. temporary assessment. The June provided, in part: III. 2005 Hudson notice 1, July through Effective June case, protect In this the Union failed to 30, 2006, the fee will be no more than adequately the First regular membership 99.1% of dues. from whom it collected an nonmembers Regular monthly membership dues are collecting In fees from agency fee. currently monthly gross salary 1.0% of nonmembers, subject is to con- the Union presently capped and are at a maximum procedural straints that are both and sub- per subject month. Dues are $45 Grunwald, in stantive nature. See notice to fee change pay- without further did Procedurally, F.2d at 1373. the Union ers. provide not nonmembers with sufficient

information gauge propriety July through of the Effective June (the Year”) Payer fee. The June 2005 Hud- “2005-6 Fee Union’s light charge payers notice insufficient in of the will fee who [the Union] son was temporary Notably, expenditures germane assessment. the Un- not non-chargeable majority special to be 1. The avers that assess- determined in and represent depar- does not a substantial non-chargeable ment was deemed in 2006. 39.6% ordinary spending. assessment, therefore, ture from the Union's special The cannot be audits, however, Subsequent a revealed that being with the described consistent Union’s very portion substantial of the Union's assess- spending especially when the Union usual — ment, was in 2005 and 72.6% 81.2% explicitly nec- stated that the assessment was non-chargeable purposes. con- used for purposes. essary political trast, expenses of the Union's total was 31.2% ever, collective fee of no more the Union’s June 2005 Hudson notice adequate regular membership provide explana- than 56.35% of dues tion of the basis for the salary for that level. fee extract- paychecks ed from nonmembers’ for the addition, provided, for a “Po- temporary assessment. To reiterate the payers Action Reduction:” “Fee are litical obvious, pro- the June 2005 Hudson notice entitled to have their fees reduced also regarding tempo- vided no information portion goes rata pro fee assessment, rary itas was enacted subse- Political Action Fund that [the Union] quently, August 2005. The Union would sets aside for contributions to candidates respond adequate the notice was campaigns, initiative other parti- and contingencies. cover such future How activities.” san could that temporary special be? The as- point comparison, To sessment resulted in approximately 25% notice, June 2006 Hudson issued in fair fairly increase share fees—a sub- temporary after the assessment had been stantial increase. Because the enacted, provided as follows: exempted assessment was from the dues July through Effective June cap, higher-earning employees might expe- 30, 2007, the will be no more than rience an effective or actual increase regular membership 99.1% of dues. Moreover, greater. was even while the monthly Regular membership dues are “temporary,” assessment was inwas ef- currently monthly salary 1.0% of gross fect for the bulk of year, the 2005 fee from presently capped at a maximum the September end of 2005 until com- per Additionally, month. a tem- $45 mencement of year July the next fee porary assessment of of 1% of 1/4 2006. monthly gross salary being collected The district court further held that the through December Dues are material, fee increase was I agree. subject to change without further notice temporary special might payers. to fee therefore have payer’s *17 affected fee deci- 1, July through Effective 2006 June object pursuant sion to to the June 2005 (the Year”) 2007 “2006-7 Payer Fee See, e.g., Hudson notice. Dashiell v. charge [the will payers Union] fee who Montgomery County, 925 F.2d 756 object to expenditures germane (4th Cir.1991) (“The adequacy test of collective a fee of no more explanation the initial provided by than 68.8% of regular membership dues the union is ... whether the information is for that salary level. sufficient to employee enable the to decide Regarding Fund,” the “Political Action the Indeed, object”). whether to because the 2006 Hudson provided pay- that fee give employ- Union refused to nonmember ers were also entitled “to have their fees opportunity object ees an when informa- by reduced pro portion the rata of the fee temporary tion about the assessment was ” that goes to the Political Action Fund.... disclosed, these nonmembers were essen- The Union submits that Supreme the tially left in the “dark” about the nature of Court has approved retrospective the agency during the fee the in period time yearly method which it the calculates they required objections. which were to file agency fee: a procedure, by “look-back” 106 S.Ct. which the agency Union sets the fee for (emphasizing that unions cannot leave upcoming year the according pro- employees “nonunion in the dark the about fee”). portion of chargeable noncharge- figure versus source of the for the words, expenditures year. able in the prior though special How- other even the in jeopardy— are magni the First altered significantly assessment Moreover, fee, temporary the not the Union’s. intended use tude cap from the on exempted that assessment was majority believe and the the Union Thus, though even the fair share to dues. were employees nonmember percent- constant as a basic fee remained material information before assessment, temporary under the be- simply age cannot approach an Such revealed. exempted the assessment was from set forth cause procedures be reconciled with dues, Karass, per cap month on some v. the $45 Locke in Hudson. See id.] cf. (ex (D.Me.2005) in experience pro- would fact employees F.Supp.2d monthly greater share fee previous year’s portionately of a that the use plaining deductions. This is inconsistent with percentage financial audit set justification for the Un- static-percentage would violate chargeable fees fi ion’s failure to additional notice “cherry pick[s]” certain when a union data, regarding temporary assessment. fails to disclose other nancial information, in in an effort to material Furthermore, by exempting tempo- fees), by 498 F.3d crease affirmed rary cap, from the assessment (2007) by 555 U.S. contrary to the 2005 Hudson acted June (2009). 172 L.Ed.2d 552 notice, 2005 Hudson notice. June venture, by “currently monthly gross I stated: 1.0% of respond, The Union would salary at maxi- temporary presently capped and are asserting that assessment per Exceptions mum of month.” from percent- fee as a did not alter the $45 it, cap, or the elimination of was not union dues. The June 2005 age of total in the June 2005 Hudson agency contemplated that Hudson notice disclosed dues, membership and notice. The Union’s June Hudson fee was 99.1% subject objectors’ agency “[d]ues fee was 56.35% notice also stated: temporary change pay- without further notice to fee membership dues. The as- percentages. put weight ers.” I cannot much did not affect these sessment faulty sweeping reservation of assumed authori- argument rests on the But such event, that, the notice did not disclose ty; if fees remain premise nonmembers’ cap dues could be eliminated. For percentage constant as a members’ reasons, I conclude that year, any absolute these additional through given might be a ma- protected scrutiny from increase fees is, notice, in a nonmembers’ decision to yearly terial factor *18 matters, object. proportionate the share is what this was not altered there can and because I conclude that the Union’s June 2005

be no constitutional violation. obligations fulfill under notice did not purpose Hudson. The of a Hudson notice proportion- I am not convinced that the objection. evaluating is to enable informed consent or ate share is all that matters Connell, Cummings of a Hudson notice. From See v. 316 F.3d adequacy the (9th Cir.2003), denied, objector, the cert. standpoint potential the of (2003) 2577, 156 L.Ed.2d 604 magnitude imposed of the increase in fees notice was de very (holding assessment could Hudson temporary the increase, with infor signed provide as an abso- to nonmembers well be material. This amount, necessary to evaluate whether to could affect a nonmember’s mation lute charge of object object if to a union’s calculation object to or not to even decision Casey, Hohe v. 956 F.2d expenses); fee remained static. And able percentage the (3d Cir.1992) (“the wheth- issue is are the ones whose these nonmembers contemplated Back provided notice nonmembers with Fund.” Union er the pro- temporary ... information to determine the assessment would sufficient they only being compelled political to of for capital whether were vide distinct source activities”). The contribute to and that it would be used for activities June was in- regular Union’s 2005 Hudson notice the expenses the union.2 to fee with a adequate provide payers ba- unique the character of the Recognizing adjudge propriety sis on which to temporary implica- assessment has two fee, agency and to decide Union’s tions. object. or not to whether First, the June 2005 Hudson notice June 2005 Because Union’s adequate could not be to enable nonmem- inadequate, employee’s notice was an fail objection informed to the fee. bers’ object ure to to it does not constitute an The contemplat- June Hudson notice waiver, an effective of a abandonment ordinary expenditures; temporary ed right. Lowary Lexington known v. Local special apart assessment stood from that. (6th Educ., Bd. 903 F.2d Cir. stated, As the district court the union 1990). Until requirements Hudson’s compare “apples, asked nonmembers satisfied, employees must be afforded sub year’s financials, prior the form the object. sequent opportunities oranges, of a new form [assess- Dist., v. L.A. Mitchell Sch. 963 F.2d ment, Unif. which not to be [assessment (9th Cir.1992). 258, 261-63 operations for utilized but was in- stead political pur- earmarked for discrete The June 2005 Hudson notice was not poses.” Even if agency fees remained con- adequate as tem- stant a percentage of total member porary assessment for an additional rea- dues, son, might warrants nonmembers well separate which attention. paying temporary special purely political assessment was a increased fees for purpose example, fund. purposes; they might object The Union envisioned the political light departure assessment as fund- from the Union’s vehicle, raising Fight- to build a “Political spending regime. normal majority acknowledges general 2. The previous year, Union’s from fund August example letter to members and fee non-political "campaign" as an of a payers specifically Thus, fee stated that the increase activity. August when the and October fact, political be used would activities. In together, appears letters are read it the Union that letter makes no mention whatsoever of politi- intended use the fee increase to fund non-political reason for the increase. aspects campaign, cal while intended Nevertheless, based on the 2005 let- October non-political general to fund activities ter, majority reasons that the Union "in- member fees. split political tended the increase 'between " Similarly, majority misapprehends actions and collective actions.' suggests record when it fee assess- letter, Maj. Op. at 1119. The October howev- er, spending ment contained no limitations. does not state that the increase would Maj. Op. at 1118-19. When the Union decid- split between and collective bar- *19 fees, Instead, budget ed to increase committee indi- gaining activities. the letter indi- cated the be that increase would "not used for undertaking the cates that Union would be a " regular agenda costs of the "year-long [U]nion.” The campaign "split” that be would meeting, the wherein Union political non-political between both and counsel the re- func- fees, to Nothing solved increase further states that tions. the that in letter states "campaign” emergency temporary exclusively by "[t]he would be funded funds from this fact, specifically will used assessment. In the Union's letter assessment be in the political appear then identified a 2004 "Call arenas of the Governor” California.” These program, apparently spending which was to be funded limitations. used, funds will be even matter, the risk that their Second, as a substantive ideological to finance activi- temporarily, that a union stressed repeatedly has Court bargaining.” to collective ties unrelated “only those nonmembers extract from may 1066; 475 U.S. at S.Ct. necessary performing and dues fees Abood, at 97 S.Ct. 1782 of the representative an exclusive duties of (concurring opinion). on employer dealing in with employees Price, 927 labor-management issues.” contem- was temporary The (internal marks quotation at 90-91 F.2d vehicle; it fundraising a plated political omitted). Lehnert, outlined a In the Court justified by the inter- therefore cannot be an ac- evaluating whether framework from free- preventing in nonmembers est role as to a union’s tivity germane on the Union’s collective riding “chargeable bargaining agent: exclusive temporary assessment clear- efforts. The (1) ‘germane’ to collec- must be activities nonmembers. ly speech burdened the (2) activity; justified be tive-bargaining efforts, in But undertook no Union interest policy vital government’s imposition of the tem- connection with riders’; ‘free avoiding peace assessment, labor impact to minimize the porary (3) burdening significantly not add rights. nonmembers’ First Amendment on allow- inherent free that is speech together, I Taking these considerations shop.” or union that, of an impo- ance conclude connection with the 1950. temporary at collection of the as- sition and sessment, not fulfill its obli- the Union did between the distinction protect To gation to be mindful of nonmembers’ First activities, a non-chargeable rights. Amendment adopt procedures is union majority will be that nonmembers and the seek minimize the risk Union ideologi- fact that the assess- political or evade the compelled subsidize activi- they agree.3 political was enacted to fund which do ment cal activities with that the fund was ultimate- explained, by arguing ties “[t]he the Court expenses that were ly used for some permitted to exact should not Union agree I with chargeable to nonmembers.4 without first fee from nonmembers service of the Un- the district court’s assessment which will avoid establishing procedure political activities is relevant incorrectly raise fees to fund majority concludes 3. The charge- determining provided appeal "must fail” because whether the Plaintiffs' ability employ- is "immaterial” to of the assessment for nonunion sufficient information challenge. Maj. Op. procedural Hudson "gauge” object. their whether or not to ees to the Plaintiffs While it is true that at 1122 n.4. Wagner, majority's reliance on 354 F.3d challenge to do not raise a direct in this case 1046-47, Wagner mispled. While ob- at determinations, chargeability the Union's challenge procedural Hudson served that a that the nature does not mean challenge questions different than raises In- special assessment is irrelevant. Union's determinations, chargeability Wag- a union's deed, adopted procedures were the Hudson proposition ner does not stand for employees op- fair nonunion mid-year potential chargeability aof union's portunity to a union’s use of be considered in deter- fee increase cannot ideological, political, and otherwise fees for mining pro- a union has satisfied the whether non-chargeable activities. See 475 U.S. requirements set forth in Hudson. ("Basic cedural considerations of 106 S.Ct. 1066 id.; Hudson, fairness, for the First as well as concern stake, rights at ... dictate objectors given in- potential sufficient *20 ideological challenge Propo- to 4. The Union’s propriety the un- gauge to the formation Here, categorized, majori- fee”). as the sition 76 cannot the Union's decision to ion's post “[following propriety ion’s hoc rationalization: of the Union’s fee. it should be logic only the union’s enacting temporary special After as- small fraction of this to show that some sessment, the made no effort what- chargeable purposes fund was used for infringement soever to minimize the subverting justify order to its Hudson re- rights. nonmembers’ The Union did not The district court sponsibilities.” further provide regarding temporary notice that, temporary if the reasoned even as- assessment; also did not pro- the Union solely politi- intended for sessment was not vide with an opportunity nonmembers cal indeed intended purposes, pre- object to temporary assessment. The dominantly political purposes. for As procedure Union did not provide such, continued, court the district “it is resolving disputes place did not dis- depart clear that the intent was to Indeed, puted escrow. amounts in when drastically typical spending from its re- attempted nonmembers to the temporary gime special [the and to focus assessment, they were refused on activities that were funds] dispute a forum for their and were never political ideological or nature.” provided opportunity with the to obtain sum, procedures the Union’s were neutral hearing decision of a officer. adequate not under circumstances. IV. The June 2005 Hudson was inade- brings This to the crux of me the Un- quate nonmembers with suffi- argument: cient information from which to ion’s approved evaluate that Hudson expense ty attempts, chargeable support ed as to ob- the amount of financial available jecting agency-fee payers. According public employment. to fund id. to the See majority, expenses po- related to the Union's sure, To be are some there limited circum- challenge might litical this ballot measure political stances where a union's activities can chargeable Proposition be considered because chargeable. According be deemed to the Su- effectively permitted 76 "would have the Gov- Court, preme lobbying political or other activ- abrogate ernor to the Union's collective bar- chargeable they directly ities are when relate gaining agreements under certain circum- negotiated agreements by to "ratification of Maj. Op. at 1119 stances.” n.2. A review of proper legislative body” ... acquir- or "to 76, however, Proposition reveals that ing appropriations approved collective- challenge connection between Union's Lehnert, bargaining agreements.” was too attenuated to its collective Where, however, 111 S.Ct. 1950. as in agreement chargeable to be considered ex- case, "challenged the instant ... activities pense. purpose of the ballot measure support relate ... public to financial of ... was to limit the annual amount of total state employees generally, the connection to the spending prior year's spending plus to the bargaining representative union's function as growth. Sec’y reasonable amount justify compelled support is too attenuated to Cal., the St. of Voter by objecting employees.” Official Accordingly, Information Id. (2005). Special Guide: Statewide Election 60 contention, contrary majority’s the dis- It budget surpluses also would have set aside political trict court and I do "conflate” for future use. Id. To achieve these initia- expenses non-chargeable expenses. Maj. tives, Proposition governor 76 allowed the Op. simply recognize at 1119 n.2. We that the spending reduce certain under circumstances. assessment, Union's for the intended uses all instance, passed, proposition For if would pertained of which to core activities given have "authority the Governor limited challenge Proposition such as the Union's appropriations” reduce for future state con- legally chargeable. as cannot be construed tracts, bargaining agreements, collective Additionally, peculiar majority it is Thus, programs. properly entitlement Id. un- even that the Union’s makes assertion if, Proposition derstood political expenses was ballot measure would avers, majority “changeability related to of tax the allocation revenue for is immateri- activities, funding government Maj. Op. al” which includ- to the instant case. at 1122 n.4. *21 Cal., 1, 17, Keller v. State Bar proportion fee as the agency calculating (1990). 110 L.Ed.2d nonchargeable expenses stressed, Davenport, asserts “we have year. The Union the Court prior fiscal in the virtually re- mini- method is a described Hudson prior-year ‘outlinpng] as here, large public sector as it is [public- mum set quired procedures which agency fee on calculate its union and must agency-shop in an relation- union sector] Be- reports. financial of audited the basis requirement its under ship could meet ” moreover, requirement, cause of the audit Abood.’ 127 S.Ct. 2372. not pro- that it could asserts the Union Here, assessment was temporary temporary assess- apportion the spectively ordinary dues and not not like the Union’s noncharge- chargeable and ment between in Hudson. Sev- presented like the facts expenses. able special assessment dis- eral features of that agrees Union majority The temporary case. The assess- tinguish this majori- The obligations. with its complied mid-year not in imposed ment was cannot precision that “absolute” ty recites of the Hudson process. normal course calculation required in the expected or imposed a ma- The fee, can- and that the Union agency of an fees over those terial increase calculating “faulted” for not be notice, in the Hudson contemplated year’s prior of the fiscal fee on the basis (which exempt cap from the dues was Further, majority expenditures. notice). inconsistent with the Hudson not deviate could that the Union states Hudson did not consider a fee increase calculating method of prior-year from the periodic process. outside of a normal notice respect special agency fee with Hudson did not Likewise, contemplate majority explains that The assessment. assessment, special-purpose as here. inherent; lag method makes prior-year assuming the did here what Even Union objector might year, an any given Hudson, it was done in could not be suffi- in- but “the overpaying,” or “underpaying satisfy light cient to its duties of the the Hudson method is effect of evitable unique circumstances of this case. undercharges even these over- agree proposition I cannot with the out over time.” the Union’s June 2005 Hudson notice sat- strange argument as a This strikes me obligations to nonmem- isfied Union’s with a First Amendment dealing when Hud- yearly until issuance of the next bers Hudson notice First, pro- challenge. mid-year son notice. conduct Union’s adequate protect per cedure is not se scrutiny. Rath- cannot be insulated from in all situations. of nonmembers er, limitation on a there must be some here, Instead, where, is a there substan- of fee increases between imposition union’s from the normal tial deviation Hudson annual notices. Second, adaptation required. process, B. method does not prior-year calculation adequacy of the June 2005 establish the complied contends Hudson nor does it demonstrate forth in procedures with the set adequate were procedures that the Union’s the calculation approved because the Court as a whole. when viewed proportion on the of an based A. to non- prior year’s chargeable Indeed, in a chargeable expenditures. con- should not measure

We footnote, stated that union the Court Hudsm procedures duct the discrete calculating its fee on a floor. “cannot be faulted for Hudson establishes alone. *22 expenses during pre requirement the basis of its appropriate relates to the year.” ceding at 307 n. case, remedy in this a question we do not 18, represents, 106 S.Ct. 1066. The Union court, reach. A district proper with a furthermore, that its hands were tied with record, could evaluate the require audit assessment, regard temporary be in light temporary ment assessment. required cause it is to base its Indeed, purpose of an audit verify is to calculation on audited financial statements. actually that a union spent the amount of Knight Borough v. Kenai Peninsula money claims; the audit is not intended Dist., (9th 807, Sch. 131 F.3d 812-13 Cir. to verify the union’s allocation “legal, as a denied, 1997), 904, cert. 524 U.S. not an accounting, regarding decision 2060, (1998); 141 L.Ed.2d 138 Prescott v. appropriateness of the allocation of ex Dorado, County El 177 F.3d penses to the chargeable and non-charge (9th Cir.1999), 1106—09 vacated and remanded Andrews, categories.” able 829 F.2d grounds, on other 120 S.Ct. 340; Ass’n, accord Gwirtz v. Ohio Educ. 807, reinstated, 145 L.Ed.2d 204 F.3d (6th Cir.1989); 887 F.2d 682 n. 3 Ping (9th Cir.2000). Ass’n, v. Nat'l Educ. 870 F.2d prior-year calculation method used (7th Cir.1989). any event, In the audit satisfy here does not all of the Union’s requirement does not relate to the other obligations, however. The Union’s alloca- protections implicated by this expenses tion of or non- case, ultimately and is help limited chargeable presents a distinct issue the Union. Even a temporary violation of adequacy See, of its Hudson notice. e.g., the First Amendment a significant is viola Bowen, Seidemann v. 499 F.3d 127 tion. (2d Cir.2007) (there is a “clear distinction y. adequacy between the of a union’s notice ... propriety and the of a changea- union’s majority construes the issue determinations”); bility Hudson v. Chica- appeal as “whether a union is ... Union, go 1306, 1309, Teachers 922 F.2d to send a second adopting notice when (7th Cir.1991) (pointing out that a temporary, mid-term fee By increase.” party had adequacy confused of the notice framing narrowly case, the issue in this itself).

with the accuracy Thus, of the fee majority shifts attention to the remedy even if the Union “cannot be faulted” for adopted by the district court. But the relying prior-year on expenditures in cal- district remedy court’s only is one consid- culating fee, the agency it is not relieved eration in this case—one we do not even from its other Hudson obligations. The reach—and should not up be set as a Union must still adequate notice to strawman for attack. decision, enable informed an opportuni- ty lodge objections, prompt hearing on case, In this provision of an objections by decisionmaker, a neutral annual Hudson notice was insufficient to escrow of in dispute. amounts Even if enable protect nonmembers to their First only we look compliance upon imposition of the therefore, the Union still falls short of the Union, assessment. The fur- mark. thermore, made no effort to minimize the Union, I recognize infringement that the relying nonmember’s on First prior-year expenditures Amendment rights despite as the basis for substantially in- fee, subject require- creasing an audit the fees extracted from their pay- my view, ment. application of the audit checks. I believe majority’s opin- carry out principles ion does I therefore dissent.

Hudson. *23 KROTTNER; Shamasa, Ishaya

Laura

individually and on of all oth- behalf similarly situated, Plaintiffs-Ap-

ers

pellants,

v. CORPORATION, a

STARBUCKS

Washington Corporation,

Defendant-Appellee. Lalli, individually

Joseph and on behalf situated, similarly all others

Plaintiff-Appellant,

v. Corporation, Washington

Starbucks Defendant-Appellee.

Corporation, 09-35823,

Nos. 09-35824. Appeals, States Court of

United

Ninth Circuit. 6, 2010.

Argued and Submitted Oct.

Filed Dec.