No. 16- IN THE Supreme Court of the United States

Transcription

1 No. 16- IN THE Supreme Court of the United States JOSE SERNA; MARY RICHARDSON; ROBERTO CRUZ; SANTOS CORDERO; SARI MADERA; RALPH ANDERSON; WARREN LAMBERT; GREG HOFER; KENT HAND; and the class they represent, Petitioners, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Respondents, UNITED STATES OF AMERICA, Intervenor-Respondent. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit PETITION FOR A WRIT OF CERTIORARI DAVID E. WATKINS BRUCE N. CAMERON JASON E. WINFORD Counsel of Record JENKINS & WATKINS, P.C. MILTON L. CHAPPELL 2626 Cole Avenue, GLENN M. TAUBMAN Suite 200 c/o National Right to Work Dallas, Texas Legal Defense (214) Foundation, Inc Braddock Road, Suite 600 Springfield, Virginia (703) bnc@nrtw.org Counsel for Petitioners WILSON-EPES PRINTING CO., INC. (202) WASHINGTON, D. C

2 QUESTIONS PRESENTED Twice in the past four years this Court has found questionable under the First Amendment the Court s prior decisions upholding compulsory union fees. See Harris v. Quinn, 134 S. Ct. 2618, (2014); Knox v. Serv. Emps. Int l Union, 132 S. Ct. 2277, (2012). Last term, in Friedrichs v. California Teachers Ass n, 136 S. Ct (per curiam), reh g denied, 136 S. Ct (2016), this Court evenly divided on the constitutionality of both such fees themselves and union objection procedures for nonmembers forced to pay those fees. Having ruled in Railway Employes Department v. Hanson, 351 U.S. 225 (1956) that the Railway Labor Act s authorization of agency shop agreements is the governmental action on which the Constitution operates, id. at 232, the questions presented here are, therefore: 1. Whether Hanson, and implicitly Abood v. Detroit Board of Education, 431 U.S. 209 (1977), should be overruled insofar as they uphold the constitutionality of compulsory union fees. 2. Whether requiring that employees affirmatively object to subsidizing constitutionally nonchargeable union speech, rather than requiring affirmative consent, violates the First Amendment. (i)

3 ii PARTIES TO THE PROCEEDING AND RULE 29.6 STATEMENT Petitioners were Plaintiffs-Appellants in the court below. Four petitioners are representatives of a nationwide class of nonunion employees forced to pay fees to the Respondent. Respondent, the Defendant-Appellee in the court below, is the Transport Workers Union of America, AFL-CIO. In addition to these parties, the United States intervened in the district court to defend the constitutionality of compulsory union fees, but not the objection requirement. Because no Petitioner is a corporation, a corporate disclosure statement is not required under Supreme Court Rule 29.6.

4 TABLE OF CONTENTS Page QUESTIONS PRESENTED... i PARTIES TO THE PROCEEDING AND RULE 29.6 STATEMENT... ii TABLE OF AUTHORITIES... vi PETITION FOR WRIT OF CERTIORARI... 1 OPINIONS BELOW... 1 JURISDICTION... 1 CONSTITUTIONAL AND STATUTORY PROVISIONS... 1 STATEMENT OF THE CASE... 1 A. The Facts... 3 B. Proceedings Below... 5 REASONS FOR GRANTING THE PETITION.. 6 I. THIS CASE CAN RESOLVE THE COMPELLING CONSTITUTIONAL QUESTIONS FRIEDRICHS LEFT UNSETTLED... 6 II. THE COMPULSORY UNION FEE EXPERIMENT IS INCOMPATIBLE WITH RECENT DECISIONS OF THIS COURT... 8 A. Compulsory Union Fees Are an Undue Burden on Speech Subject to Strict Scrutiny... 8 (iii)

5 iv TABLE OF CONTENTS Continued Page B. The Undue Burden in Drawing the First Amendment Line Is Inconsistent With Recent Decisions of the Court... 9 C. Knox and Harris Support the Need for the Court to Clarify the Law on Compulsory Union Fees III. FRIEDRICHS LEFT UNRESOLVED WHETHER THE FIRST AMENDMENT PERMITS THE UNION TO ASSUME THAT NONMEMBERS CONSENT TO ITS POLITICAL ACTIVITIES A. Opt-Out Objection Regimes Are Incompatible With First Amendment Rights B. The Record in This Case Includes Scientific Evidence Showing That Opt-Out Regimes Do Not Satisfy the Least Restrictive Means Prong of Strict Scrutiny CONCLUSION APPENDIX APPENDIX A. Opinion of the United States Court of Appeals for the Fifth Circuit (July 11, 2016)... 1a APPENDIX B. Opinion and Order of the U.S. District Court for the Northern District of Texas (March 30, 2015)... 3a

6 v TABLE OF CONTENTS Continued Page APPENDIX C. Final Judgment of the U.S. District Court for the Northern District of Texas (March 30, 2015)... 15a APPENDIX D. Opinion and Order of the U.S. District Court for the Northern District of Texas on Class Certification (December 3, 2014)... 16a APPENDIX E. Declaration of John Balz (September 19, 2014)... 40a APPENDIX F. Transport Workers Union of America Policy on Agency Fee Objection... 54a APPENDIX G. Declarations of Emily Pitts Dixon, Ralph Anderson, Greg Hofer, Santos Cordero and Deposition of Roberto Cruz... 63a APPENDIX H. United States Constitution, Amendment I and 45 U.S.C. 152, Eleventh a

7 CASES vi TABLE OF AUTHORITIES Page(s) Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977)... 3, 8, 12, 13 Bd. of Regents v. Southworth, 529 U.S. 217 (2000)... 10, 11 Citizens United v. FEC, 558 U.S. 310 (2010)... 9, 11, 12 Commc ns Workers of Am. v. Beck, 487 U.S. 735 (1988)... 2, 7, 14 Davenport v. Wash. Educ. Ass n, 551 U.S. 177 (2007) Ellis v. Bhd. of Ry. Clerks, 466 U.S. 435 (1984)...passim Friedrichs v. Cal. Teachers Ass n, 136 S. Ct (2016), aff g by an equally divided court No , 2014 WL (9th Cir. Nov. 18, 2014), reh g denied, 136 S. Ct (2016)...passim Harris v. Quinn, 134 S. Ct (2014)...passim Hoffman v. Inslee, No. C MJP, 2016 WL (W.D. Wash. Aug. 16, 2016) Int l Ass n of Machinists v. Central Airlines, Inc., 372 U.S. 682 (1963)... 2, 7 Int l Ass n of Machinists v. Street, 367 U.S. 740 (1961)...passim

8 vii TABLE OF AUTHORITIES Continued Page(s) Knox v. SEIU, Local 1000, 132 S. Ct (2012)...passim Lathrop v. Donohue, 367 U.S. 820 (1961) Lehnert v. Ferris Faculty Ass n, 500 U.S. 507 (1991) Locke v. Karass, 555 U.S. 207 (2009) Ry. Emps Dep t v. Hanson, 351 U.S. 225 (1956)...passim R.A.V. v. St. Paul, 505 U.S. 377 (1992)... 9 Retail Clerks Int l Ass n, Local 1625 v. Schermerhorn, 373 U.S. 746 (1963) Thomas v. Collins, 323 U.S. 516 (1945)... 8, 13 Thornhill v. Alabama, 310 U.S. 88 (1940)... 8 United States v. Playboy Entm t Grp., Inc., 529 U.S. 803 (2000) CONSTITUTION U.S. Const., amend. I...passim FEDERAL STATUTES 28 U.S.C. 1254(1)... 1

9 viii TABLE OF AUTHORITIES Continued Page(s) 28 U.S.C U.S.C U.S.C U.S.C U.S.C , U.S.C MISCELLANEOUS Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (rev. & expanded ed. 2009)... 18

10 PETITION FOR WRIT OF CERTIORARI Petitioners Jose Serna, Mary Richardson, Roberto Cruz, Santos Cordero, Sari Madera, Ralph Anderson, Warren Lambert, Greg Hofer, and Kent Hand ( Workers ) respectfully petition for a writ of certiorari to review the judgment and order of the United States Court of Appeals for the Fifth Circuit in this case. OPINIONS BELOW The Fifth Circuit s order affirming the district court is reproduced in the appendix (Pet. App. 1a), as is the district court s order granting summary judgment to Respondent and denying Petitioners cross-motion for summary judgment (Pet. App. 3a). JURISDICTION The Fifth Circuit entered judgment on July 11, 2016 (Pet. App. 1a). This Court has jurisdiction under 28 U.S.C. 1254(1). CONSTITUTIONAL AND STATUTORY PROVISIONS Relevant constitutional and statutory provisions are reproduced in the Appendix (Pet. App. 142a). STATEMENT OF THE CASE Last term this Court evenly divided on the constitutionality of compulsory union fees and the objection requirement. Friedrichs v. California Teachers Ass n, 136 S. Ct (2016) (per curiam), aff g by an equally divided court No , 2014 WL (9th Cir. Nov. 18, 2014), reh g denied, 136 S. Ct (2016). This case, like Friedrichs, challenges the constitutionality of compulsory union fees and whether non-union employees must affirmatively

11 2 object to subsidizing nonchargeable union speech that the First Amendment precludes. The only difference here, one without a distinction, is that this case arises under the Railway Labor Act (RLA), 45 U.S.C. 152, Eleventh, 1 rather than state law. Under the RLA 2, Eleventh, Congress authorizes employers and labor unions to compel represented employees to join or financially support a union as a condition of employment. That authorization forces all employees who refuse to join a union to associate with it and support its collective bargaining views regardless of whether union positions are contrary to the nonmembers goals and interests. Ellis v. Bhd. of Ry. Clerks, 466 U.S. 435 (1984). This regime of compelled speech is irreconcilable with this Court s recent recognition of the critical First Amendment rights at stake in such arrangements. Knox v. Serv. Emps. Int l Union, 132 S. Ct. 2277, 2289 (2012). The logic and reasoning of this Court s recent decisions have called into question its much earlier approval of such compulsion in Railway Employes Department v. Hanson, 351 U.S. 225 (1956) 1 The Railway Labor Act, 45 U.S.C. 152, Eleventh, itself, and actions taken by private parties thereto, constitute the governmental action on which the Constitution operates. Ry. Emps Dep t v. Hanson, 351 U.S. 225, 232 (1956); accord Commc ns Workers of Am. v. Beck, 487 U.S. 735, 761 (1988) (enforcement of agency shop provisions in railroad industry contracts involves governmental action and is therefore subject to constitutional limitations ); Ellis v. Bhd. of Ry. Clerks, 466 U.S. 435, (1984) (determining whether compelled funding of union expenses interfere with First Amendment interests); cf. Int l Ass n of Machinists v. Central Airlines, Inc., 372 U.S. 682, 692 (1963) (collective bargaining agreements under the RLA are creations of federal law ).

12 3 and Abood v. Detroit Board of Education, 431 U.S. 209 (1977), decisions that were questionable from the start. See Harris v. Quinn, 134 S. Ct. 2618, (2014) (constitutionality of compulsory fees in Hanson was disposed of in a single, unsupported sentence that its author essentially abandoned a few years later); Abood, 431 U.S. at 245 (Powell, J., concurring in the judgment) (describing the majority s opinion in Abood as unsupported by either precedent or reason ). Like the opportunity presented in Friedrichs, the time has come again for this Court to reconsider those questionable decisions. Surely a First Amendment issue of this importance deserve[s] better treatment. Harris, 134 S Ct. at Freedom of association plainly presupposes a freedom not to associate or be compelled [to] fund... the speech of other private speakers or groups. Knox, 132 S. Ct., at A. The Facts Although these airline Workers resigned their memberships in the Transport Workers Union of America, AFL-CIO ( Union ), as nonmembers they were still subject to and compelled by the union contract to pay union fees (Pet. App. 4a, 7a, 17a; see also Pet. App. 32a). They believe the First Amendment protects them from being forced to give any financial support to the Union. Furthermore, they disagree with the Union s policy of automatically defaulting them into supporting its nonchargeable activities unless they affirmatively opt out in writing (Pet. App. 17a). Union dues include money spent for collective bargaining (which the Union calls chargeable ) and for political, ideological, and other non-bargaining expenses (which the Union calls non-chargeable )

13 4 (Pet. App. 7a-11a, 57a-59a; see also 21a, 108a). It is statutorily and constitutionally impermissible for nonmembers to be compelled to pay for nonchargeable expenses as a condition of their employment. Ellis, 466 U.S. at 457; Int l Ass n of Machinists v. Street, 367 U.S. 740, (1961). The Union unilaterally created its Transport Workers Union of America Policy on Agency Fee Objection ( Policy ) for the collection and disposition of compulsory dues-equivalent fees (Pet. App. 8a-10a, 54a). The Policy is structured to slant the playing field to the Union s pecuniary and political advantage (Pet. App. 49a-53a). The Union s Policy requires every nonmember to pay an amount equal to full Union membership dues, including the nonchargeable portion. Failure to pay full dues results in termination of employment. Thus, by default, every nonmember employee automatically pays both the chargeable and nonchargeable portions of union dues (Pet. App. 7a, 46a, 49a). This automatic flow of money from a nonmember to the Union continues unchecked unless the employee takes timely affirmative action to stop the transfer. (Pet. App. 9a; see also Pet. App. 51a). To secure return of the nonchargeable fee, the Union requires that a nonmember affirmatively object in writing during a thirty-one day window period in January (Pet. App. 54a). The nonmember must also plan, draft, and mail or deliver individual written objection notices to two separate entities: the Union and its local (Pet. App. 54a-55a). Thus, the Union structures this decision to allow it to collect automatically, by default, nonchargeable money, to which it has no constitutional or legal claim, from employees

14 5 salaries without their actual consent, or even their knowledge (Pet. App. 12a; see also Pet. App. 135a- 136a). B. Proceedings Below To establish and enforce their First Amendment rights with regard to the compulsory union fees, the Workers filed a class action complaint with three counts on June 27, 2013 (see Pet. App. 17a). 2 The questions presented involve the first two counts. Count I challenged the constitutionality of the requirement that nonmembers pay any compulsory union fees (Pet. App. 17a). Count II challenged the constitutionality of the Union defaulting nonmembers into automatically supporting union nonchargeable expenses unless they affirmatively opt out (Pet. App. 17a). 3 On August 11, 2014, the Union moved for summary judgment (see Pet. App. 3a). On September 19, 2014, the Workers filed their response and a cross motion for summary judgment (see Pet. App. 3a). The United States gave notice on December 12, 2014 that it was intervening as to Count I to defend the constitutionality of the provisions of the RLA authorizing compulsory union fees (Pet. App. 4a). On March 30, 2015, the district court granted the Union summary judgment and denied the Workers 2 On December 3, 2014, the district court certified a national class of nonunion employees who are required to pay compulsory fees to the Union (Pet. App. 16a). 3 Subject matter jurisdiction arose in the federal district court under 28 U.S.C and 1337, and pursuant to 28 U.S.C and 2202 to declare the Petitioners constitutional rights.

15 6 cross motion for summary judgment (Pet. App. 15a). It did so on Count I because existing law forecloses their challenge to the union shop provision, citing Hanson and Ellis. Although subsequent Supreme Court cases have arguably indicated some concern regarding the soundness of Hanson, e.g., Harris, 134 S. Ct. at 2629, it is not the role of this Court to deviate from established, binding jurisprudence. (Pet. App. 7a-8a). It did so on Count II for the same existing precedent reason, citing different Supreme Court cases. At the same time it acknowledged that this Court in Knox, 132 S. Ct. at , might have suggested that it is poised to require opt in for all union expenditures, but it has not yet done so (Pet. App. 9a-10a). The Workers timely filed their Notice of Appeal as to Counts I and II to the Fifth Circuit on April 14, 2015 (see Pet. App. 1a-2a). After hearing oral argument, the Fifth Circuit notified the parties that it was holding the case in abeyance pending this Court s decision in Friedrichs v. California Teachers Ass n. Following this Court s 4-4 affirmance in Friedrichs, the Fifth Circuit entered a summary per curiam affirmance of the district court, believing it was bound by this Court s prior decisions, Hanson on Count I and International Ass n of Machinists v. Street, 367 U.S. 740, 774 (1961), on Count II (Pet. App. 1a-2a). REASONS FOR GRANTING THE PETITION I. THIS CASE CAN RESOLVE THE COMPEL- LING CONSTITUTIONAL QUESTIONS FRIEDRICHS LEFT UNSETTLED. The Court has already determined that the questions presented in this case are worthy of

16 7 consideration. Last Term the Court attempted to address them by granting certiorari in Friedrichs. Unfortunately, Justice Scalia s untimely death resulted in an evenly split decision that failed to resolve these two important issues: first, whether the First Amendment protects nonunion employees from being compelled to pay for any union activities; and second, whether the First Amendment s least restrictive means test protects nonunion employees from being defaulted into paying for the union s nonchargeable activities. Friedrichs was a dispute between nonunion public employees and a public sector union, whereas this case presents a dispute between nonunion employees and a private sector union covered by the Railway Labor Act. This difference is immaterial. In Hanson, 351 U.S. 225, an RLA case, this Court ruled that [t]he enactment of the federal statute authorizing union shop agreements is the governmental action on which the Constitution operates. Id. at 232. Shortly after Hanson, the Court found state action under the RLA for a second reason: the federal government s extensive governmental involvement in collective bargaining. In International Ass n of Machinists v. Central Airlines, Inc., 372 U.S. 682, 692 (1963), the Court held [t]he contracts and the adjustment boards for which they provide are creations of federal law.... If any provision contained in a 204 [45 U.S.C. 184] contract is enforceable, it is because of congressional sanction. Thirty years later, in Communications Workers of America v. Beck, 487 U.S. 735, 761 (1988), the Court discussed Hanson and stated because the RLA preempts all state laws banning union-security

17 8 agreements, the negotiation and enforcement of such provisions in railroad industry contracts involves governmental action and is therefore subject to constitutional limitations. In addition to protecting political, economic and social speech, Knox, 132 S. Ct. at 2288, the First Amendment protects speech on labor relations, trade unionism, labor philosophy, and union organizing from government restraint. Thomas v. Collins, 323 U.S. 516, 532, , 539 (1945); Thornhill v. Ala., 310 U.S. 88, , 103 (1940). It does so because these are all matters of public concern. 310 U.S. at 104. II. THE COMPULSORY UNION FEE EXPERI- MENT IS INCOMPATIBLE WITH RECENT DECISIONS OF THIS COURT. A. Compulsory Union Fees Are an Undue Burden on Speech Subject to Strict Scrutiny. In past cases like Hanson and Abood, this Court deferred to legislators and allowed the experiment of forcing nonmembers to subsidize the ideologies and public concerns of private entities they abhor. See, Hanson, 351 U.S. at 234; Abood, 431 U.S. at In contrast, the Court s more recent cases have questioned the underpinnings of those early decisions, and criticized their rationales. See, e.g., Harris, 134 S. Ct. at ; Knox, 132 S. Ct. at Such criticism is in keeping with the Court s general jurisprudence that [t]he First Amendment generally prevents government from proscribing speech... or even expressive conduct... because of disapproval of the ideas expressed. Content-based regulations are

18 9 presumptively invalid. (citations omitted). R.A.V. v. St. Paul, 505 U.S. 377, 382 (1992). Indeed, this Court has stated that [t]he government may not prohibit the dissemination of ideas that it disfavors, nor compel the endorsement of ideas that it approves. Knox, 132 S. Ct. at 2288 (emphasis added). Forced union dues violate these principles. By forcing employees to engage in one type of expressive conduct (i.e., subsidizing union activities, including bargaining) and prohibiting employees from engaging in other forms of expressive content (i.e., declining to associate with the union and spending their money on other causes), the compulsory fee provision of the RLA is, at its core, a presumptively impermissible contentbased restriction on free speech rights. B. The Undue Burden in Drawing the First Amendment Line Is Inconsistent With Recent Decisions of the Court. Even if this Court were inclined to believe that the First Amendment allows the compulsory funding of bargaining expenses, the remedy of drawing the line between chargeable and nonchargeable speech is too burdensome and vague to allow bargaining expenses to be compelled. In Citizens United v. FEC, 558 U.S. 310, 324 (2010), this Court stated that [p]rolix laws chill speech for the same reason that vague laws chill speech. If protecting speech against a statute requires substantial litigation over an extended time... [t]he interpretive process itself would create an inevitable, pervasive, and serious risk of chilling protected speech. Id. at As Justice Black predicted, the Hanson and Street decisions have inflicted precisely that damage upon

19 10 employees. Employees must object to a union s agency fee calculation and must litigate to protect their rights. The process the Union uses here is especially worthy of censure (supra pp. 4-5), but an undue burden necessarily exists in all of the line-drawing cases that Justice Black described in Street. 367 U.S. at The major problems are vague standards and the difficulty dividing chargeable from nonchargeable expenses. In Lehnert v. Ferris Faculty Ass n, 500 U.S. 507 (1991), the Justices had trouble deciding what was protected speech and what was not. A map is needed to determine at what point Justice Blackmun wrote for the Court or only for a plurality. Id. at 511. More troubling, this Court has drawn the First Amendment line in different places at different times. In 1984, the Court in Ellis held that [t]he expenses of litigation not having... a connection with the bargaining unit are not to be charged to objecting employees. 466 U.S. at 453. Yet, seven years later, the Court in Lehnert was split into three irreconcilable factions as to the chargeability of litigation. Locke v. Karass, 555 U.S. 207, 208 (2009). And, eighteen years after Lehnert, despite Ellis, the Court decided some litigation expenses incurred outside the bargaining unit were chargeable. 555 U.S. at In Board of Regents v. Southworth, 529 U.S. 217 (2000), the Court considered applying its procedures for resolving union fee disputes to university student fee disputes. The Court agreed that compulsory union fee precedents were applicable. Id. at 231. However, the Court concluded that the remedy applied in the union fee cases was too complex for student fee cases. Id. at Showing great candor, the Southworth Court noted that even in dealing with unions, whose

20 11 functions are, or so we might have thought, well known and understood, and even after a long history of judicial involvement, we have encountered difficulties in deciding what is germane [i.e., chargeable to employees] and what is not. Id. The Court concluded: [D]ifferent Members of the Court reached varying conclusions regarding what expressive activity was or was not germane to the mission of the [union]. If it is difficult to define germane speech with ease or precision where a union... is the party, the standard becomes all the more unmanageable in the public university setting. Id. at 232. More recently, this Court admitted that it has struggled repeatedly with this issue of separating lawfully chargeable and nonchargeable union activities, and that litigating such cases is expensive and a heavy burden on objecting nonmembers. Harris, 134 S. Ct. at The nonunion employees First Amendment rights can never be protected in a scheme that requires them to engage in annual protracted litigation where even Supreme Court Justices struggle and reach varying conclusions. Thus, the current scheme of compulsion creates an inevitable, pervasive, and serious risk of chilling protected speech. Citizens United, 558 U.S at The detailed factual record in this case provides specific evidence of the complex and exceedingly expensive litigation required to vindicate speech in union fee calculation cases supported by the National

21 12 Right to Work Legal Defense Foundation ( Foundation ). Beginning with Abood in 1977, the Foundation, a public interest legal aid organization (Pet. App. 63a-92a), provided the lawyers and support staff in all challenges, save Friedrichs, to compulsory union fee cases decided by this Court. The Foundation also provided aid for many other cases decided by federal and state courts, and administrative tribunals. (See Pet. App. 64a; see also Pet. App. 37a). In Citizens United, the Court held that when a citizen is required to engage in complex and prolix litigation to vindicate speech, the statute creating such a burden cannot stand. 558 U.S. at United States v. Playboy Entertainment Group, 529 U.S. 803 (2000) held that [e]rror in marking [the] line between protected and unprotected speech exacts an extraordinary cost. Id. at 817. The results are in, and the experiment of requiring employees each and every year to object and challenge a union s fee calculations to protect their political autonomy is a failure. C. Knox and Harris Support the Need for the Court to Clarify the Law on Compulsory Union Fees. In 2014, this Court in Harris squarely examined its precedents permitting any compulsory union fees, going back to the earliest RLA cases. Harris first criticized Hanson, calling its First Amendment analysis thin, and its ruling narrow. 134 S. Ct. at The Court next noted that Street failed to reach the fundamental question of the constitutionality of compulsory union fees, id. at 2630, and that only four

22 13 Justices fully agreed with the remedies discussed in the Court s opinion. Id. at 2630 n.6. Harris summarized those two pivotal cases that undergird the constitutionality of compulsory fees under the RLA in this way: Street was not a constitutional decision at all, and Hanson disposed of the critical question in a single, unsupported sentence that its author essentially abandoned a few years later. Id. at 2632; see Lathrop v. Donohue, 367 U.S. 820, (1961) (Douglas, J., dissenting). These decisions were also a departure from even earlier labor precedent. In Thomas, 323 U.S. 516, Texas claimed union officials were required to obtain a government-issued license an organizer s card before giving pro-union speeches to supporters. The organizer s card met merely a previous identification requirement and was granted as a ministerial, not discretionary, matter. Id. at 538. The Court nevertheless found the prior registration requirement quite incompatible with the requirements of the First Amendment. Id. at 540. Although Thomas specifically examined a union member s First Amendment protections for affirmative speech, the Court explicitly noted that [t]he Constitution protects no less the employees converse right. Id. at 538 (emphasis added). The Supreme Court has not yet applied exacting scrutiny to abrogate the long-standing and questionable rule that union fees for bargaining purposes can be compulsory under the RLA. However, the Court has held that its prior decision in Abood, 431 U.S. 209, upholding such fees for public employees, has questionable foundations. Harris, 134 S. Ct. at 2638; see also id. at Significantly here, the Court suggested that its earlier decisions allowing forced

23 14 fees under the RLA failed to consider First Amendment principles sufficiently. See id. at Hanson and Street are now discredited and undermined decisions of earlier decades, that used a wrong constitutional test. Certiorari should be granted so the Court may now abandon these mistaken relics. III. FRIEDRICHS LEFT UNRESOLVED WHETHER THE FIRST AMENDMENT PERMITS THE UNION TO ASSUME THAT NONMEMBERS CONSENT TO ITS POLIT- ICAL ACTIVITIES. A. Opt-Out Objection Regimes Are Incompatible With First Amendment Rights. Unions spend their dues and fees moneys on both chargeable and nonchargeable expenditures. Retail Clerks Int l Ass n, Local 1625 v. Schermerhorn, 373 U.S. 746, (1963) (noting that unions typically use dues for a variety of purposes); Street, 367 U.S. at 767 (Congress is aware of the long history of intensive political involvement by RLA unions). The Union s spending habits here are no exception (see Pet. App. 7a, 55a-57a). Coerced nonmember fee collections may not exceed the collective bargaining ( chargeable ) portion of union dues because unions are not authorized by Congress to forcibly extract the nonchargeable portion from nonmembers. We conclude that [National Labor Relations Act] 8(a)(3), like its statutory equivalent, 2, Eleventh of the RLA, authorizes the exaction of only those fees and dues necessary to performing the duties of an exclusive representative of the employees in dealing with the employer on labor-management issues. Ellis, 466 U.S. at 448. Beck, 487 U.S. at 762-

24 Accord, Ellis at 444 (it is a statutory violation of the RLA to exact the nonchargeable portion of the union fee in the first place). In fact, unions have no constitutional entitlement to the fees of nonmember-employees at all. Davenport v. Wash. Educ. Ass n, 551 U.S. 177, 185 (2007). Simply because the union takes possession of the nonchargeable fees pursuant to Federal law and its contract with the employer, that possession does not transfer title. It still remains the employee s money. Id. at 187. Agency-shop provisions are an extraordinary state entitlement [for unions] to acquire and spend other people s money. Id. (emphasis in original). This Court in Knox, 132 S. Ct. at , questioned the validity of objection requirements and noted that prior decisions permitting the use of an opt-out system... approach, if they do not cross, the limit of what the First Amendment can tolerate. Id. at Objection requirements are intrinsically unlawful because unions lack the lawful authority to seize nonchargeable fees from nonmembers in the first place. An opt-out regime is a two-step process. First, the Union seizes fees for nonchargeable expenses from nonmembers without their prior consent. Second, the Union provides a quarterly rebate several months later, should an employee object during a limited time frame to the taking (Pet. App. 7a, 9a, 46a, 49a, 52a, 54a-55a). Step one is illegal by definition. If an expense is not chargeable to a nonmember under the First Amendment, a union has no lawful right or authority to seize fees from a nonmember for that expense. If step one is illegal, there is no basis for step two

25 16 because there is no lawful fee seizure from which to opt out. For example, it is unlawful for an individual to take his neighbor s property and force the neighbor to object. Title to the property does not pass to the thief. The reason is not because objecting may be burdensome, which it may. It is because an individual has no right to take his or her neighbor s property without prior consent. If this principle applies to property, it applies with more force to political speech. Permitting the Union to create a choice structure that benefits its nonchargeable political program at the expense of the nonmembers constitutional free speech and associational rights opens the door to all sorts of mischief. If the default choice is that nonmembers keep their own money, the Union, like every other candidate or group seeking ideological support, would be required to muster its most persuasive appeal for funds. But, when the choice is structured to default the nonmembers nonchargeable money into the Union s ideological machine, the Union takes money to which it has no legal claim, and erects as many barriers as possible to nonmembers who want to reclaim their own money. Accordingly, if the Court declines to take the first question presented, it should take the second. Even under Hanson, the Union s objection requirement is invalid because the Union lacks the lawful right to seize money unilaterally for nonchargeable expenses from nonunion airline employees without their consent. The Court held in Knox that the union there could not take a special assessment or dues increase

26 17 designated for nonchargeable purposes from nonmembers without their affirmative consent. 132 S. Ct. at The Union here cannot, for the same reasons, exact any funds for statutorily and constitutionally nonchargeable purposes without nonmembers affirmative consent. Granting review of the constitutionality of compulsory union fees does not obviate the importance of passing on the default consent issue. Overruling Hanson will render unconstitutional RLA, 2, Eleventh and the Union s agency fee agreements. The Union will thereafter lack lawful authority to seize any fees from nonmembers without their prior consent. Unless the Court also makes clear that objection requirements are invalid, unions will use opt-out requirements to subvert this Court s ruling on the First Amendment rights of nonmembers to be free from compulsory union fees. At least one union is already using an opt-out requirement to undermine this Court s ruling in Harris that nonunion homecare providers cannot be forced to pay compulsory union fees at all. Hoffman v. Inslee, No. C MJP, 2016 WL (W.D. Wash. Aug. 16, 2016). Instead of automatically ceasing all fee deductions from nonunion providers, the State of Washington only ceased making deductions for either dues or agency fees for any [providers] who expressed their wish not to pay them (i.e., retaining an opt-out system). Id. at *1. That court upheld the challenged opt-out system because this Court s 4-4 affirmance in Friedrichs did not change Ninth Circuit law. Id. at *2-*3. If Hanson is overruled, the Court should make clear that unions may only extract fees from individuals

27 18 who affirmatively opt in to those fees. Even if Hanson is not overruled, the Court should make clear that unions may only extract the nonchargeable portion from nonmembers who affirmatively opt in to the nonchargeable fees. B. The Record in This Case Includes Scientific Evidence Showing That Opt- Out Regimes Do Not Satisfy the Least Restrictive Means Prong of Strict Scrutiny. Dr. John Balz is Petitioners expert witness on the science of choice architecture. He served as the lead researcher for the authors of the New York Times best-selling book Nudge, 4 and wrote initial drafts of some sections of the book for the authors, Richard H. Thaler and Cass R. Sunstein (Pet. App. 40a-41a) (Dr. Balz s Declaration is Appendix E, at Pet. App. 40a.) Nudge addresses behavioral economics, a science that examines how people make financial and other decisions. Specifically, Nudge looks at how structuring a choice (the book uses the terminology choice architecture ) strongly influences a person s ultimate decisions (Pet. App. 40a-41a). Dr. Balz s expert opinion is that by structuring its Policy to transfer money automatically from nonmembers to the Union by use of an opt-out requirement, the Union causes the nonmembers money to change hands, even though they have done nothing to 4 Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (rev. & expanded ed. 2009).

28 19 relinquish their money or authorize such a transaction (Pet. App. 46a, 49a, 52a-53a). Compelling nonunion employees to fund the speech of other private speakers presents the same dangers as compelled speech. Harris, 134 S. Ct. at Therefore, the Union s procedure for collecting fees from nonmembers cannot be tolerated unless it passes strict scrutiny. Id.; accord Knox, 132 S. Ct. at If that money is for admitted nonchargeable speech and activities, the government has absolutely no reason, much less a compelling one, to tilt the scales to promote union political speech. In contrast to the current opt-out regime, an opt-in system would ensure that nonmembers will waive their free speech rights on nonchargeable matters only knowingly, voluntarily, and intelligently. Only that accords with the First Amendment s least restrictive means test. CONCLUSION For the foregoing reasons, Petitioners urge the Court to grant their petition, issue a writ of certiorari to the United States Court of Appeals for the Fifth Circuit, and set the case for plenary briefing and argument on the important questions presented.

29 20 Respectfully submitted, DAVID E. WATKINS BRUCE N. CAMERON JASON E. WINFORD Counsel of Record JENKINS & WATKINS, P.C. MILTON L. CHAPPELL 2626 Cole Avenue, GLENN M. TAUBMAN Suite 200 c/o National Right to Work Dallas, Texas Legal Defense (214) Foundation, Inc Braddock Road, Suite 600 Springfield, Virginia (703) Counsel for Petitioners

30 APPENDIX

31 1a APPENDIX A IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT [Filed 7/11/16] No JOSE SERNA; MARY RICHARDSON; ROBERTO CRUZ; SANTOS CORDERO; SARI MADERA; RALPH ANDERSON; WARREN LAMBERT; GREG HOFER; KENT HAND, v. Plaintiffs-Appellants TRANSPORT WORKERS UNION OF AMERICA AFL-CIO, Union, Defendant-Appellee UNITED STATES OF AMERICA, Intervenor-Appellee Appeal from the United States District Court for the Northern District of Texas USDC No. 3:13-CV-2469 Before STEWART, Chief Judge, and CLEMENT and ELROD, Circuit Judges.

32 2a PER CURIAM: We have reviewed the record, read the briefs, and heard arguments from both parties. We conclude that the two questions presented in this appeal are governed by controlling Supreme Court and Fifth Circuit precedent. See Ry. Employes Dep t v. Hanson, 351 U.S. 225, 238 (1956) (allowing union shop provision of the Railway Labor Act (RLA)); Int l Ass n of Machinists v. Street, 367 U.S. 740, 774 (1961) (allowing opt-out requirement under the RLA); Shea v. Int l Ass n of Machinists & Aerospace Workers, 154 F.3d 508, 513, 515 (5th Cir. 1998) (allowing opt-out requirement under the RLA). 1 Accordingly, the judgment of the district court is AFFIRMED. Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R We note that when Serna filed his complaint, the Transport Workers Union of America required dissenting non-members to annually renew their objection in order to avoid paying support to the union s political activities. We expressly held in Shea which was decided fifteen years prior to Serna s complaint that the First Amendment prohibits a union from requiring objectors to annually renew their objections. Because the union no longer requires an annual opt-out, Shea obliges us to uphold the union s current opt-out policy.

33 3a APPENDIX B IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION [Filed 3/30/15] Civil Action No. 3:13-CV-2469-N JOSE SERNA, et al., Plaintiffs, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant. ORDER This Order addresses Defendant Transport Workers Union of America, AFL-CIO s ( TWU ) motion for summary judgment [Doc. 54] and Plaintiffs Jose Serna, Mary Richardson, Roberto Cruz, Santos Cordero, Sari Madera, Ralph Anderson, Warren Lambert, Greg Hofer, and Kent Hand s motion for summary judgment [61]. The Court grants TWU s motion and denies Plaintiffs motion. I. THE LABOR DISPUTE Defendant Transport Workers Union of America ( TWU ) is the collective bargaining representative for thousands of railroad and airline workers under the Railway Labor Act ( RLA ), 45 U.S.C Def. s Mot. Summ. J. 4. TWU provides collective bargaining services such as negotiating collective bargaining agreements with employers and enforcing

34 4a and administering these agreements. Id. at 5. Plaintiffs are, or at one point were, airline workers such as flight attendants and fleet-service workers with Envoy Air, Inc., formerly American Eagle Airlines, Inc., and Southwest Airlines Co. who seek to challenge certain TWU policies. Plaintiffs are, or at one point were, nonmembers of the union. Pls. First Am. Compl. 4 [37]. For the purposes of this Order, the Court construes the amended complaint as having four counts. First, Plaintiffs allege that the RLA s authorization of compelled union fees violates the First Amendment. Second, Plaintiffs allege that TWU s opt-out choice structure for union fees violates the First Amendment. Third, Plaintiffs allege that TWU s requirement that nonmembers renew their objections annually violates the First Amendment. Fourth, Plaintiffs allege that TWU s escrow-and-rebate procedure for collecting dues violates the First Amendment. Plaintiffs request declaratory, injunctive, and monetary relief. On December 3, 2014, the Court certified a class of all former, present, and future nonmembers of TWU, excluding former nonmembers who have since joined the union. See Order, Dec. 3, 2014, at 23 [71]. The parties now move for summary judgment. On December 12, 2014, the United States intervened in this action to defend the constitutionality of the RLA. See Notice of Intervention, Dec. 12, 2014 [72]. II. SUMMARY JUDGMENT STANDARD Courts shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a);

35 5a Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In making this determination, courts must view all evidence and draw all reasonable inferences in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the initial burden of informing the court of the basis for its belief that there is no genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When a party bears the burden of proof on an issue, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor. Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). When the nonmovant bears the burden of proof, the movant may demonstrate entitlement to summary judgment either by (1) submitting evidence that negates the existence of an essential element of the nonmovant s claim or affirmative defense, or (2) arguing that there is no evidence to support an essential element of the nonmovant s claim or affirmative defense. Celotex, 477 U.S. at Once the movant has made this showing, the burden shifts to the nonmovant to establish that there is a genuine issue of material fact so that a reasonable jury might return a verdict in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, (1986). Moreover, [c]onclusory allegations, speculation, and unsubstantiated assertions will not suffice to satisfy the nonmovant s burden. Douglass v. United Servs. Auto. Ass n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc). Indeed, factual controversies are resolved in favor of the nonmoving party only when an actual controversy exists, that is, when both parties have submitted evidence of contradictory facts. Olabisiomotosho v. City of Houston, 185 F.3d 521, 525

36 6a (5th Cir. 1999) (quoting McCallum Highlands, Ltd. v. Washington Capital Dus, Inc., 66 F.3d 89, 92 (5th Cir. 1995)). III. THE COURT GRANTS TWU S MOTION FOR SUMMARY JUDGMENT A. Claim One: Compelled Union Fees In their first claim, Plaintiffs challenge the constitutionality of the so-called union shop provision of the RLA, 45 U.S.C. 152, Eleventh. Under the union shop provision, union agreements may require all represented employees to either join the union or pay a fee to the union for the fair cost of representation. See Shea v. Int l Ass n of Machinists & Aerospace Workers, 154 F.3d 508, 513 (5th Cir. 1998). The relevant portion of the Act provides as follows. Notwithstanding any other provisions of this chapter,... any carrier or carriers as defined in this chapter and a labor organization or labor organizations duly designated and authorized to represent employees in accordance with the requirements of this chapter shall be permitted (a) to make agreements, requiring, as a condition of continued employment, that within sixty days following the beginning of such employment, or the effective date of such agreements, whichever is the later, all employees shall become members of the labor organization representing their craft or class[.] 45 U.S.C. 152, Eleventh. Despite the literal language of the statute, the Act is to be construed to deny the unions, over an employee s objection, the

37 7a power to use his exacted funds to support political causes which he opposes. Int l Ass n of Machinists v. Street, 367 U.S. 740 (1961); accord Kidwell v. Transp. Commc ns Int l Union, 946 F.2d 283, 291 (4th Cir. 1991) ( [U]nder the RLA, nonmember objecting employees can only be compelled to pay for activities germane to collective bargaining. ); see Marden v. Int l Ass n of Machinists & Aerospace Workers, 576 F.2d 576, 579 (5th Cir. 1978) ( [A] collective bargaining agreement can require an employee to share in the expenses of union activity; it may not mandate that he actually join the union as a condition of employment. ). TWU s collective bargaining agreements with Southwest and American Eagle contain union security clauses that require all represented employees, regardless of whether they are members of the union, to pay their share of costs related to TWU s collective bargaining activities. Def. s Mot. Summ. J. 6. An independent auditor determines the amount of expenses that relate to TWU s collective bargaining ( chargeable ) and the amount that relates to nonchargeable expenses such as charitable and political contributions. Id. at 7. Plaintiffs maintain that compulsory union fees are a prior restraint on speech and violate the free association rights of employees who reject Union membership. Pls. Am. Compl. 25. Yet, as Plaintiffs acknowledge, existing law forecloses their challenge to the union shop provision. 1 In Railway 1 In their motion for summary judgment, Plaintiffs assert that they recognize that existing Supreme Court precedent in Railway v. Employes Department v. Hanson, 351 U.S. 225 (1956), probably forecloses their request in Count I, but the Workers preserve that Count for appellate review[.] Pls. Mot.

38 8a Employes Department v. Hanson, the Court held that the requirement for financial support of the collective-bargaining agency by all who receive the benefits of its work is within the power of Congress under the Commerce Clause and does not violate either the First or the Fifth Amendments. 351 U.S. 225, 238 (1956); accord Ellis v. Bhd. of Ry., Airline & S.S. Clerks, Freight Handlers, Exp. & Station Employes, 466 U.S. 435, 439 (1984) ( [The employees] do not contest the legality of the union shop..., nor could they. ) Although subsequent Supreme Court cases have arguably indicated some concern regarding the soundness of Hanson, e.g., Harris v. Quinn, 134 S. Ct. 2618, 2629 (2014) ( The First Amendment analysis in Hanson was thin, and the Court s resulting First Amendment holding was narrow. ), it is not the role of this Court to deviate from established, binding jurisprudence. Because Hanson makes clear that the union shop provision of the RLA is constitutional, the Court grants summary judgment in favor of TWU on Plaintiffs first claim. B. Claim Two: Opt-Out Structure TWU has established a Policy on Agency Fee Objections (the Policy ) for employees who object to paying nonchargeable expenses. 2 See Def. s Mot. Summ. J. 15; see Pls. Reply 1 [69] ( Count I Anticipates a Change in the Law[.]). 2 In a footnote, TWU maintains that Plaintiffs claims regarding how it administers the Policy (claims 2, 3, and 4) all fail because TWU is a private entity whose actions are not subject to constitutional scrutiny. Def. s Mot. Summ. J. 15 n.9. The Court disagrees. In Hanson, the Supreme Court stated that [i]f private rights are being invaded, it is by force of an agreement made pursuant to federal law which expressly

39 9a Summ. App Under the Policy, objectors must opt out of paying nonchargeable expenses by mailing notice of their objections to TWU s Secretary Treasurer and to their local union. Id. at 44. Plaintiffs maintain that this choice structure violates the First Amendment. Again, existing precedent forecloses Plaintiffs argument. In Street, the Supreme Court held that the RLA did not permit a union to require an objecting employee to pay for nonchargeable expenses. 367 U.S. at In so deciding, the Court stated: The safeguards of s 2, Eleventh were added for the protection of dissenters interest, but dissent is not to be presumed it must affirmatively be made known to the union by the dissenting employee. The union receiving money exacted from an employee under a union-shop agreement should not in fairness be subjected to sanctions in favor of an declares that state law is superseded. 351 U.S. at 232. The Fifth Circuit has described the implication of government action in this arena as follows: the RLA... preempts state laws that ban union shop agreements, and this preemption has been held to be sufficient governmental action to trigger constitutional limitations. Shea, 154 F.3d at 516. Although language in Harris perhaps suggests that the Supreme Court may revisit this issue and hold otherwise, Def. s Mot. Summ. J. 15 n.9, the Supreme Court has yet to do so. Under current case law, TWU s policies are subject to constitutional review. The Court further disagrees with TWU s assertion that the challenge to the opt-out structure is moot. On December 3, 2014, the Court certified the class as specified above. Accordingly, because some members of the class (for example, future nonmembers) would be required to opt out of the fee requirement, the claim is not moot.

40 10a employee who makes no complaint of the use of his money for such activities. Id. at 774; see Bhd. of Ry. & S. S. Clerks, Freight Handlers, Express & Station Employes v. Allen, 373 U.S. 113, (1963) ( [W]e made clear in Street that dissent is not to be presumed it must affirmatively be made known to the union by the dissenting employee. ). The Fifth Circuit also acknowledges that an opt-out procedure is permissible. In Shea, the Fifth Circuit considered a policy that required employees to object annually. 154 F.3d at 510. In striking down the annual renewal requirement, the Court stated, [c]ertainly the procedure that least interferes with an employee s exercise of his First Amendment rights is the procedure by which an employee can object in writing on a continuing basis. Id. at 515. Now that TWU has removed the annual renewal requirement, this is precisely the scenario before this Court. As Shea acknowledges, this procedure is fully permissible. Plaintiffs rely on Knox v. Service Employees International Union, 132 S. Ct (2012), in support of their position that the opt-out requirement is unconstitutional. The Court in Knox struck down a special assessment for political activities in the public sector where the period for objections had already expired. 132 S. Ct. at While the Court in Knox might have suggest[ed] that it is poised to require opt in for other union expenditures, Catherine L. Fisk & Erwin Chemerinsky, Political Speech and Association Rights After Knox v. SEIU, Local 1000, 98 CORNELL L. REV.1023, 1026 (2013) (citing Knox, 132 S. Ct. 2277, (2012)), it has not yet done so. Because current case law makes clear that the opt-out structure for chargeable fees is permissible,

41 11a the Court grants summary judgment in favor of TWU on Plaintiffs second claim. C. Claim Three: Annual Renewal In their third claim, Plaintiffs challenge the constitutionality of the Policy s requirement that objecting nonmembers annually renew their objecttion. TWU maintains that this claim is moot because TWU has repealed that requirement. Def. s Mot. Summ. J. 3. Under the current TWU policy, a nonmember need submit an objection just once and that objection is deemed a continuing one. Id. at 8. According to TWU s Chief of Staff and Director of Accounting, TWU has no intention to ever reinstate this renewal requirement. Def. s Mot. Summ. J. App. 41. Plaintiffs maintain that under the voluntary cessation doctrine, the claim is not moot. The voluntary cessation of challenged conduct does not ordinarily render a case moot because a dismissal for mootness would permit a resumption of the challenged conduct as soon as the case is dismissed. Knox, 132 S. Ct. at Regardless, [a] case might become moot if subsequent events made it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur. United States v. Concentrated Phosphate Exp. Ass n, 393 U.S. 199, 203 (1968). The heavy burden of persua[ding] the court that the challenged conduct cannot reasonably be expected to start up again lies with the party asserting mootness. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000) (alteration in original) (quoting Concentrated, 393 U.S. at 203).

42 12a In its motion for summary judgment, TWU acknowledges that its annual renewal requirement was inconsistent with governing Fifth Circuit law. Def. s Mot. Summ. J. 20. TWU does not defend the constitutionality of this requirement. TWU cannot reasonably be expected to engage in conduct that it acknowledges is contrary to binding precedent. See Carlson v. United Academics, 265 F.3d 778, 786 (9th Cir. 2001) ( It is unreasonable to think that the Union would resort to conduct that it had admitted in writing was constitutionally deficient and had attempted to correct[.] ). Accordingly, this claim is moot. D. Claim Four: Escrow-and-Rebate Procedures Employees represented by TWU have the option of having their employer automatically deduct dues from their paycheck. Def. s Mot. Summ. J. App. 41. Where a nonmember who has opted out elects automatic deduction, TWU collects the entire dues amount (both chargeable and nonchargeable). Id. The nonchargeable portion is placed in an interest bearing escrow account with a cushion of an additional 50% of that amount and is subsequently refunded with interest to the nonmember. 3 Id at 41, 46. Plaintiffs challenge the constitutionality of the escrow-and-rebate procedure, which they refer to as a forced loan. In support of their argument that the escrow-andrebate procedure is unconstitutional, Plaintiffs rely on Ellis. At issue in Ellis was a rebate program whereby the union exact[ed] and us[ed] full dues 3 Where a nonmember decides to pay his dues directly, he is only required to pay for chargeable expenses. Def. s Mot. Summ. J. 41.

43 13a and subsequently returned the nonchargeable amount without interest. 466 U.S. at 444 (emphasis added). In striking down the rebate program, the Supreme Court noted the availability of acceptable alternatives including the use of interest-bearing escrow accounts. Id. at 444. That is precisely the scenario before this Court. TWU does not use the nonchargeable amount they receive from objectors, but rather places it into an escrow account. TWU later refunds the money to the objecting employee with interest. Circuit courts have upheld the constitutionality of such a escrow-and-rebate procedure. E.g., Pilots Against Illegal Dues (PAID) v. Air Line Pilots Ass n (ALPA), 938 F.2d 1123, 1133 (10th Cir. 1991) ( The [escrow-and-rebate] procedure ensures that agency fees will not be used even temporarily for improper purposes. ); Crawford v. Air Line Pilots Ass n Int l, 870 F.2d 155, 161 (4th Cir. 1989) on reh g, 992 F.2d 1295 (4th Cir. 1993) ( This court has interpreted Ellis to permit an escrow-andrebate plan. ). In light of this authority, the Court holds TWU s procedure for rebating nonchargeable dues is constitutional and grants summary judgment in favor of TWU. 4 4 The Court briefly notes that Chicago Teachers v. Hudson, 467 U.S. 292 (1986) does not compel a different outcome. In that case, the Supreme Court did not hold that the use of an escrowand-rebate procedure was unconstitutional. Rather, the Court held that the use of escrow alone was not sufficient to cure a deficient procedure that, among other issues, failed to provide sufficient information to nonmembers regarding fees. 467 U.S. at 310.

44 14a CONCLUSION The Court grants TWU s motion for summary judgment and denies Plaintiffs motion for summary judgment. Signed March 30, /s/ David C. Godbey David C. Godbey United States District Judge

45 15a APPENDIX C IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION [Filed 03/30/15] Civil Action No. 3:13-CV-2469-N JOSE SERNA, et al., Plaintiffs, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant. FINAL JUDGMENT By separate Order of this same date, the Court granted Defendant Transport Workers Union of America s ( TWU ) motion for summary judgment. The Court accordingly orders that Plaintiffs individually and the Plaintiff class certified in the Court s December 3, 2014 Order, see Order [71], take nothing by their claims against TWU. Court costs are taxed against Plaintiffs. All relief not expressly granted is denied. This is a final judgment. Signed March 30, /s/ David C. Godbey David C. Godbey United States District Judge

46 16a APPENDIX D IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION [Filed 12/03/14] Civil Action No. 3:13-CV-2469-N JOSE SERNA, et al., Plaintiffs, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant. ORDER This Order addresses Plaintiffs motion for class certification and appointment of class counsel [Doc. 14] ( Mot. Certify Class ). For the following reasons, the Court grants Plaintiffs motion. I. THE LABOR DISPUTE Defendant Transport Workers Union of America ( TWU ) is the collective bargaining representative for over 50,000 railroad and airline workers under the Railway Labor Act ( RLA ), 45 U.S.C Def. s Resp. Mot. Certify Class 2 [33] ( Def. s Resp. ). TWU provides collective bargaining services such as negotiating collective bargaining agreements with employers and enforcing and administering these agreements. Id. at 3. Plaintiffs Jose Serna, Mary Richardson, Roberto Cruz, Santos Cordero, Sari Madera, Ralph Anderson, Warren Lambert, Greg

47 17a Hofer, and Kent Hand ( Plaintiffs ) are, or at one point were, airline workers such as flight attendants and fleet-service workers who seek to challenge certain TWU policies. See Pls. Br. Supp. Pls. Mot. Class Certification 1 [15] ( Pls. Br. ). Plaintiffs are, or at one point were, nonmembers of the union. Pls. First Am. Compl. 4 [37]. Their complaint contains three counts. First, Plaintiffs allege that the RLA s authorization of compelled union fees violates the First Amendment. Id Second, Plaintiffs allege that the opt-out choice structure for union fees violates the First Amendment. Id. at Third, Plaintiffs allege that the requirements that nonmembers renew their objections annually and that nonmembers fund nonbargaining expenses through forced loans violate the First Amendment. Id. at Plaintiffs request declaratory, injunctive, and monetary relief. Id. Plaintiffs seek to certify a class defined as all former, current, and future nonmember employees represented by TWU and compelled to pay compulsory union fees as a condition of employment. 1 See Pls. Br. 5. The Court previously ordered that further discovery was necessary to determine whether to certify the proposed class. Order [45]. The parties filed supplemental briefs on the issue of class certification following this discovery period. II. THE COURT GRANTS PLAINTIFFS MOTION TO CERTIFY A. Class Action Certification Standard Under Federal Rule of Civil Procedure 23, the Court must determine by order whether to certify the action as a class action. FED R. CIV. P. 23(c). The 1 The plaintiffs seeking class representative status are Cruz, Cordero, Anderson, and Madera. See Pls. First Am. Compl. 15.

48 18a party seeking certification bears the burden of showing that class certification is appropriate. Unger v. Amedisys, Inc., 401 F.3d 316, 320 (5th Cir. 2005). The Court has wide discretion in determining whether to certify a class; however, that discretion must be exercised within the bounds of Rule 23. See Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996). Furthermore, in making this determination, the Court must undertake a rigorous analysis of Rule 23 s prerequisites by probing beyond the pleadings to understand the claims, defenses, and relevant facts. See Unger, 401 F.3d at 321. Although the Court does not consider the merits of the plaintiffs claims in determining whether to certify the proposed class, the Court must consider the the nature and range of proof necessary to establish the plaintiffs substantive allegations if it is adequately to conduct the rigorous analysis called for under Rule 23. Owner-Operator Indep. Drivers Ass n, Inc. v. Swift Transp. Co., 2006 WL , at *4 (D. Ariz. 2006); see Castano, 84 F.3d at 741 ( In order to make the findings required to certify a class action under Rule 23(b)(3)... one must initially identify the substantive law issues which will control the outcome of the litigation. (quoting Alabama v. Blue Bird Body Co., 573 F.2d 309, 316 (5th Cir. 1978))). A case may proceed as a class action only if the party moving for certification demonstrates that it has met all four requirements of Rule 23(a) as well as at least one of the three requirements of Rule 23(b). See Feder v. Elec. Data Sys., 429 F.3d 125, 129 (5th Cir. 2005). Under Rule 23(a), the moving party must demonstrate that: (1) the class is so numerous that joinder of all members is impracticable (numerosity); (2) there are questions of law or fact common to the class (commonality); (3) the claims or defenses of the

49 19a representative parties are typical of the claims or defenses of the class (typicality); and (4) the representative parties will fairly and adequately protect the interests of the class (adequacy). FED. R. CIV. P. 23(a) In this case, Plaintiffs rely on the requirements of Rule 23(b)(1)(A) and Rule 23(b)(2) in support of class certification, and alternatively rely on the requirements of Rule 23(b)(3). To satisfy the requirements of Rule 23(b)(1)(A), Plaintiffs must show that prosecuting separate actions would create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class. FED. R. CIV. P. 23(b)(1)(A). Under Rule 23(b)(2), Plaintiffs must establish that TWU has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. FED. R. CIV. P. 23(b)(2). To satisfy Rule 23(b)(3), Plaintiffs must show that questions of law or fact common to the class predominate and a class action is superior to any other available method of resolution. FED. R. CIV. P. 23(b)(3). B. Plaintiffs Meet All of the Requirements of Rule 23(a) 1. The Proposed Class Is So Numerous that Joinder of All Members Is Impracticable. There is no magic number of class members required to satisfy Rule 23(a) s numerosity requirement. Simms v. Jones, 296 F.R.D. 485, 497 (N.D. Tex. 2013) (citing In re TWL Corp., 712 F.3d 886, 894 (5th Cir. 2013)). Rather, courts considering the numerosity requirement look to several factors, such as size of the class, ease of identifying members and determining their addresses, facility of making service on them if joined and their geographic

50 20a dispersion. Garcia v. Gloor, 618 F.2d 264, 267 (5th Cir. 1980). Plaintiffs need only demonstrate some evidence or a reasonable estimate of the number of purported class members to satisfy the first requirement of Rule 23(a). See James v. City of Dallas, 254 F.3d 551, 570 (5th Cir. 2001) (citing Penderson v. La. State Univ., 213 F.3d 858, 866 (5th Cir. 2000)). Discovery in this matter has indicated that there are at least 177 members of the proposed class and that these individuals reside in 21 states. Pls. Am. Supplemental Br. 2 [53] ( Pls. Supplemental Br. ). The number and geographic diversity of these individuals is sufficient to satisfy the numerosity requirement. Moreover, TWU has not disputed the numerosity requirement. The Court accordingly finds that Plaintiffs have satisfied the first requirement under Rule 23(a). 2. There Are Questions of Law or Fact Common to the Class. To satisfy the second requirement of Rule 23(a), the claims of every class member must depend upon a common contention... of such a nature that it is capable of classwide resolution which means the determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 840 (5th Cir. 2012) (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011) (internal quotation marks omitted)). Rule 23(a)(2) necessitates that a common issue of law or fact will resolve a central issue of each class member s claims. Id. The Court finds that there are common issues of law and fact in the instant case. Every proposed class member must establish (1) whether the imposition of

51 21a a compulsory union fee on TWU nonmembers is constitutional; (2) whether the requirement that nonmembers opt out of TWU s political, ideological, and other non-bargaining expenses violates the Railway Labor Act or the First Amendment; (3) whether TWU s requirement that nonmembers renew their objections annually is lawful; and (4) whether TWU may subject nonmembers to payroll deductions to make an involuntary loan to support TWU s non-bargaining expenses. See Pls. Br Additionally, the case stems from the common acts of TWU in collecting the challenged fees in accordance with its policies. See Pls. Supplemental Br. 3. TWU contends that under the Supreme Court s Wal-Mart decision, plaintiffs must demonstrate that they and the members of the proposed class have the same interest and suffer the same injury. Def. s Resp. 11 (quoting Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550 (2011)). However, the Fifth Circuit recently struck down the same argument in In re Deepwater Horizon, where the Fifth Circuit clarified that the legal requirement that class members have all suffered the same injury can be satisfied by an instance of the defendant s injurious conduct, even when the resulting injurious effects the damages are diverse. 739 F.3d 790, (5th Cir. 2014). In fact, in Wal-Mart, the Court noted that a companywide discriminatory pay and promotion policy, would have satisfied the same injury test under Rule 23(a)(2). Wal-Mart Stores, 131 S. Ct. at Here, Plaintiffs allegations regarding the legality of TWU s fee policies are sufficient to satisfy the commonality requirement. TWU also contends that there is no commonality because Plaintiffs have not established that all

52 22a members of the proposed class have the same interests of the Plaintiffs in, for example, undermining their union financially and thus undermining its ability to operate effectively on their behalf. Def. s Resp. 11. TWU suggests other reasons that an employee might choose not to join the Union. Id. at 12. The inquiry under the commonalty requirement is whether there are common issues of law or fact, not whether the interests of the class members are aligned. Walmart v. Dukes makes clear that even a single common question is sufficient to satisfy the commonality requirement. 131 S. Ct. at 2551 ( We quite agree that for purposes of Rule 23(a)(2) [e]ven a single [common] question will do. (alteration in original) (citation omitted)). There is no requirement under the commonality prong that Plaintiffs establish the nonexistence of a conflict of interest. See Ned-Sthran v. Methodist Hospitals of Dallas, 2008 WL , at *2 (N.D. Tex. 2008) (discussing the standard for commonality and noting that [t]he interests and claims of each plaintiff need not be identical ). The Court therefore considers TWU s arguments regarding potential conflicts of interest under the adequacy analysis below. Accordingly, Plaintiffs have established that there are common issues of law and fact and the second requirement of Rule 23(a) is satisfied. 3. The Representative Parties Claims are Typical of the Class. The third requirement of Rule 23(a) requires the claims of the representative parties be typical of the proposed class members claims. The test for typicality is not demanding, see Forbush v. J.C. Penney Co., 994 F.2d 1101, 1106 (5th Cir. 1993), and is satisfied if the representative plaintiffs claims arise out of the same event or course of conduct as the other

53 23a proposed class members, or are based on the same legal theory. James, 254 F.3d at 571. The Court finds the representative plaintiffs claims are typical of the claims of the proposed class because they all arise out of the same issue: the legality of the abovementioned TWU policies. The fact that each proposed class member might have incurred different monetary damages alone does not refute the typicality requirement in this case. Additionally, TWU does not challenge the Plaintiffs ability to establish typicality. The Court accordingly finds that Plaintiffs have established the third requirement under Rule 23(a). 4. Cruz, Cordero, Madera, and Anderson Are Adequate Representatives of the Proposed Class. To show adequacy of representation, a plaintiff must show that (1) the plaintiff s counsel has the zeal and competence to represent the class; (2) the proposed class representative is willing and able to take an active roll in controlling the litigation; and (3) the absence of conflict and antagonism between the named plaintiffs and the interest of the class. See Feder, 429 F.3d at 130; Unger, 401 F.3d at 321. The Court finds that Plaintiffs have established adequacy of representation. Plaintiffs counsel has the zeal and competence to represent the class and the proposed class representatives are willing and able to pursue the litigation. The National Right to Work Legal Defense Foundation, Inc. (the Foundation ) is committed to funding the lawsuit, see Pls. Br. 10; that precludes concern regarding the potentially prohibitive cost of litigation. Additionally, Plaintiffs attorneys are experienced in litigating labor and employment cases and have articulated a commitment to pursing this case zealously. Id. at Plaintiff class rep-

54 24a resentatives have declared their willingness to pursue this matter in a way that protects the proposed class. Id. at 9; Pls. Supplemental Br. 7. Therefore, the first and second requirements of Rule 23(a)(4) have been satisfied. Finally, there is no antagonism or conflicts between the class representative and the interest of the class. Plaintiffs have the burden of showing that class certification is appropriate, and this includes the burden of showing that the class representatives adequately represent the class. See Horton v. Goose Creek Ind. Sch. Dist., 690 F.2d 470, 486 (5th Cir. 1982). Plaintiffs met their burden for establishing adequacy of representation in their brief in support of their motion to certify. See Pls. Br ( Because their claims are typical and common of, and identical to, those of the class members, by protecting their own interests through vigorous litigation, Plaintiff class representatives will also protect the same rights of the class members. ); id. at 13 ( In this lawsuit, such conflict or antagonism between interests does not exist because the Plaintiff class representatives and the class members claims are aligned and arise out of the same common actions and policies taken by TWU against TWU nonmembers, and because Plaintiff class representatives seek the same relief for themselves as they do for the class members. (citation omitted)). Yet, TWU asserts that there are conflicts of interest between the class representatives and the proposed class that prevent adequate representation. TWU must, however, have some support for its alleged conflicts. See Wagner v. Prof l Eng rs in Cal. Gov t, 3 F. App x 594, 595 (9th Cir. 2001) ( Without some evidence that members of the putative class disagree with Plaintiffs generally, or with their claim for

55 25a punitive damages specifically, we cannot evaluate the district court s conclusion that Plaintiffs and their counsel are inadequate.... ); Littlewolf v. Hodel, 681 F. Supp. 929, 937 (D.D.C. 1988), aff d sub nom. Littlewolf v. Lujan, 877 F.2d 1058 (D.C. Cir. 1989) ( While actual antagonism between class members, or a strong likelihood of antagonism, would defeat class certification... incantations of the potential for antagonism are insufficient. (internal citations omitted)). With one narrow exception, TWU has not identified any class members with real antagonism or a conflict of interest in this case. Although TWU has presented evidence that nonmembers have chosen not to join the union for a variety of reasons, see Def. s Supplemental Br. 4, App. 6 8, this does not necessarily mean that they oppose the claims and relief sought in the matter. See James, 254 F.3d at 571 ( Differences between the named plaintiffs and class members render the named plaintiffs inadequate only if those differences create conflicts between the named plaintiffs interest and the class members interests. ). To assert otherwise is speculation that cannot alone disprove the adequacy requirement. See In re S. Cent. States Bakery Products Antitrust Litig., 86 F.R.D. 407, 418 (M.D. La. 1980) ( A naked allegation of antagonism cannot defeat class certification; there must be an actual showing of a real probability of a potential conflict which goes to the subject matter of the suit. ). TWU additionally presents evidence that some members of the class have since joined the union and argues that these individuals would be opposed to the relief sought. See Def. s Supplemental Br. 3. Although this asserted conflict is potentially illusory, the Court will exclude these individuals from the class.

56 26a Therefore, any former nonmember that has since joined the union is not a class member. The only evidence TWU has presented of an actual conflict of interest is the deposition of Jose Serna who, as a former nonmember, would be a member of the putative class. In his deposition, Serna noted that he was not opposed to paying union dues for the handling of grievances. Id. App. 26. This interest is partially opposed to count one of the amended complaint which seeks to make all union payments voluntary. Apart from Serna, TWU has offered no evidence of additional proposed class members whose interests actually conflict with those of the class representatives. Serna is just one class member, and he objects to a minor part of just one of several claims. This alone is insufficient to establish inadequacy of representation. Horton, 690 F.2d at 485 (noting that courts have been content simply to observe that unanimity can never be achieved in large classes and have proceeded on that basis to certify a class. ); see Wyatt By and Through Rawlins v. Poundstone, 169 F.R.D. 155, 162 (M.D.Ala.1995) (noting that, in certain circumstances, it would be impossible to obtain and maintain 100% agreement within the class ). Additionally, to the extent that Serna does not want to participate in this action, he would be able to opt out of the class under the provisions of Rule 23(c)(2). See FED. R. CIV. P. 23(c)(2). TWU relies heavily on Gilpin v. American Federation of State, Cnty., & Mun. Emps., AFL-CIO, 875 F.2d 1310 (7th Cir. 1989) and its progeny in support of its assertion that potential conflicts of interest prevent Plaintiffs from establishing adequacy of representation. In Gilpin, the Seventh Circuit refused to find that a district court erred in its denial of certification to a class of nonunion employees,

57 27a concluding [a] potentially serious conflict of interest within the class precluded the named plaintiffs from representing the entire class adequately. 875 F.2d at 1313 (citing FED. R. CIV. P. 23(a)(4)). The court noted that different types of employees could decline to join the union for different reasons. Id. An employee might be hostile to unions on political grounds or might just be disagreeable to paying more for union representation than is required. Id. The two types have potentially divergent aims. The first wants to weaken and if possible destroy the union; the second, a free rider, wants merely to shift as much of the cost or representation as possible to other workers. Id. The court noted that, should the union be required to pay restitution as requested by the Plaintiffs, it might ruin the union despite the fact that the free riders have no desire to impair the union s ability to represent them. Therefore, the court determined that The National Right to Work Foundation is not an adequate litigation representative of [the free riders]. Id; see also Weaver v. Univ. of Cincinnati, 970 F.2d 1523, 1531 (6th Cir. 1992) ( The publishers of [a newsletter] could have interests that conflict with those of other nonunion employees who are merely free riders. ); Kidwell v. Transp. Commc ns Int l Union, 946 F.2d 283, 299 (4th Cir. 1991) ( We agree with [Gilpin]. The plaintiffs, once again represented by the National Right to Work Legal Defense Foundation, are not adequate representatives under Rule 23. ). Gilpin is factually distinguishable from this case because here the primary relief sought is declaratory and injunctive. In Gilpin, the proposed class sought restitution for all the bargaining unit s nonunion employees of the entire agency fees collected by the union. 875 F.2d at 1313 (emphasis in original). As

58 28a noted in Plaintiffs brief in support of their motion to certify, Plaintiff class representatives interest[s] are not antagonistic to class members interests because the claims in this lawsuit seek to protect the constitutional and statutory rights of all class members through permanent injunctive and declaratory relief against TWU s standard, uniform policies and requirements against TWU members. Pls. Br. 13 (emphasis added). The Court thus finds on this factual record that TWU has failed to show the existence of two sub-classes with antagonistic goals in this litigation, as existed in Gilpin. Moreover, making nonmember support voluntary would not necessarily ruin the union or impair its ability to represent them effectively, as was the case with the requested relief in Gilpin. 875 F.2d at Almost twenty percent of TWU s locals operate without forced fee requirements. See Pls. Supplemental Br. 6, App It is therefore only speculative for TWU to assert that it would suffer financial hardship should Plaintiffs obtain their requested relief. Additionally, this Court notes that Gilpin is not binding on this Court and has its critics. See, e.g., Harrington v. City of Albuquerque, 222 F.R.D. 505, 512 (D.N.M. 2004) (stating that [t]he Defendants reliance on Gilpin is misplaced, beyond the fact that its holding is not binding on this Court and even if some class members do not share the named Plaintiffs [] motivation for the present litigation, that is insufficient alone to defeat class certification ); Murray v. Local 2620, Dist. Council 57, Am. Fed n of State, Cnty., & Mun. Employees, AFL-CIO, 192 F.R.D. 629, 633 (N.D. Cal. 2000) ( Gilpin is not persuasive because the Ninth Circuit has not denied class certification based on the types of reasoning and arguments used in

59 29a Gilpin. ). Accordingly, the Court declines to adopt the position of the Seventh Circuit in Gilpin. Finally, the Court notes that any potential disagreement between some proposed class members and the class representatives is ameliorated by the position taken by TWU. To the extent that some proposed class members may oppose the claims and relief sought in this action, TWU will vigorously advocate their position. There are only two positions available to class members in this case: TWU s policies are either unconstitutional or they are constitutional. Therefore, to the extent the hypothetical conflicts asserted by TWU actually exist, they would not necessarily bar certification because TWU supports the constitutionality of TWU s policies. See Horton, 690 F.2d at ( Though some members may disagree with the named plaintiffs, their position has been asserted energetically and forcefully by the defendant... and we can rely on the defendant to present to the court the arguments supporting the contention of any dissident absentees. ). Furthermore, any proposed class member who opposes the claims and relief sought can opt out of the class. According to the Fifth Circuit, [d]ifferences between named plaintiffs and class members render the named plaintiffs inadequate representatives only if those differences create conflicts between the named plaintiffs interests and the class members interests. Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, (5th Cir. 1999). Here, Plaintiffs have shown the requisite absence of antagonism and potential conflicts between the class representatives and the proposed class members. For the reasons previously discussed, TWU s speculations do not overcome this showing. Accordingly, the Court finds that the proposed class

60 30a representatives adequately represent the proposed class and that Plaintiffs have met all of the prerequisites of class certification under Rule 23(a). 2 C. Plaintiffs Meet the Necessary Requirements of Rule 23(b) 1. The Proposed Class Does Not Meet the Requirements of Rule 23(b)(1)(A). Plaintiffs request the Court certify the proposed class under Rule 23(b)(1)(A). To satisfy the requirements of this Rule, Plaintiffs must establish that prosecuting separate actions would create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class. FED. R. CIV. P. 23(b)(1)(A). According to the Supreme Court, this rule takes in cases where the party is obliged by law to treat the members of the class alike..., or where the party must treat all alike as a matter of practical necessity. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997) (internal quotation marks omitted) (citation omitted). Rule 23(b)(1)(A) is satisfied only in the event that inconsistent judgments in separate suits would trap the party opposing the class in the inescapable legal quagmire of not being able to comply with one such judgment without violating the terms of 2 Additionally, TWU argues for the first time in its supplemental brief that, as TWU has eliminated the annual renewal requirement, there are conflicts of interest between members of the putative class and the class representatives in litigating this issue. That some nonmembers are subject to annual renewal and some are not does not necessitate a conflict of interest. It is entirely possible that those individuals who are not subject to the annual renewal requirement still object to its imposition on those who are subject to the requirement. Again, absent additional evidence, this speculation is insufficient to establish a conflict of interest for adequacy purposes.

61 31a another. McBirney v. Autrey, 106 F.R.D. 240, 245 (N.D. Tex. 1985) (citation omitted). Here, Plaintiffs seek declaratory and injunctive relief regarding the legality of TWU s policies. Even though TWU applies its policies to all nonmembers, conflicting orders on the constitutionality of these policies would not necessarily force TWU to violate one court order to abide by another. If one court found the policies to be constitutional, TWU could still alter its policies in accordance with an order that found the policies unconstitutional. An incompatible judgment would only occur if one court required TWU to continue its policies while another court required TWU to change them. See Casa Orlando Apartments, Ltd. v. Fed. Nat. Mortgage Ass n, 624 F.3d 185, (5th Cir. 2010) ( Varying results with respect to these measures are not necessarily incompatible. For example, if one court failed to require Fannie Mae to cease its relationship with GMACCM, Fannie Mae could still end this relationship in order to comply with a different court order. Such action would not be incompatible with the first court s order, but rather might exceed what that court demanded. An incompatible judgment would arise if one court required Fannie Mae to continue its relationship with GMACCM while another court prevented Fannie Mae from working with GMACCM. (footnote omitted)). Certification under (b)(1)(a) is therefore inappropriate because separate actions would not necessarily lead to incompatible judgments. 2. The Proposed Class Meets the Requirements of Rule 23(b)(2). Plaintiffs additionally request certification under Rule 23(b)(2). According to the Fifth Circuit, certification under (b)(2) is appropriate where the party opposing the class has established a

62 32a regulatory scheme common to all class members. Johnson v. Am. Credit Co. of Ga., 581 F.2d 526, 532 (5th Cir. 1978) (citing 7 WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE 1775, at 19 20, 21 (1972)). Here, TWU s policies regarding fees, opting out, annual renewal, and forced loans apply equally to all represented TWU nonmembers. Additionally, the Fifth Circuit has set forth two requirements for certification under Rule 23(b)(2) when a class seeks classwide injunctive relief: (1) the class members must have been harmed in essentially the same way... and (2) the injunctive relief sought must be specific. M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 845 (5th Cir. 2012) (citations omitted). Here, Plaintiffs meet both of these requirements. The class members were harmed in essentially the same way because they were obligated to pay fees and engage in policies that they allege are unconstitutional. The mere fact that they might have suffered different monetary damages does not negate the similarity of the harm in this case. The Fifth Circuit has noted that certification under (b)(2) does not extend to cases in which the appropriate final relief relates exclusively or predominately to monetary damages. Allison v. Citgo Petroleum Corp., 151 F.3d 402, 411 (5th Cir. 1998). The Fifth Circuit has explained that monetary relief predominates in (b)(2) class actions unless it is incidental to requested injunctive or declaratory relief. Id. Monetary relief is incidental only when damages... flow directly from liability to the class as a whole on the claims forming the basis of the injunctive of declaratory relief. Id. (emphasis in original). Furthermore, [l]iability for incidental damages should not require additional hearings to resolve the disparate merits of each individual s case, [nor should it]

63 33a introduce new and substantial legal or factual issues [or] entail complex individualized determinations. Id. Here, any requested monetary damages are only incidental to the predominate relief because they flow directly from any liability on the claims that form the basis for the requested injunctive and declaratory relief, specifically the permissibility of TWU s policies. Plaintiffs also meets the Fifth Circuit s second requirement because the relief they seek is specific. According to their complaint, Plaintiffs seek (1) a declaration that the RLA s authorization of compulsory union fees is unconstitutional; (2) a declaration that the opt out requirement is unconstitutional; or (3) a declaration that requiring annual renewal and forced loans is unconstitutional. Pls. First Am. Compl Plaintiffs also request the Court enjoin TWU from engaging in these specific activities, see id. at 16, and grant a permanent injunction requiring TWU to inform their employees of the final order. Id. This requested injunctive relief is highly specific, and the acts that would be covered by an injunction are laid out in sufficient detail such that the individuals against whom an injunction is directed [would] receive explicit notice of the precise conduct that is outlawed. Alabama Nursing Home Ass n v. Harris, 617 F.2d 385, (5th Cir. 1980) (citation omitted). The Court therefore finds that certification is proper under Rule 23(b)(2). 3. The Proposed Class Meets the Requirements of Rule 23(b)(3). Plaintiffs alternatively request that the Court certify the class under Rule 23(b)(3). To certify a class under (b)(3) the court must find that (1) the questions of law or fact common to class members predominate over any questions affecting only individual members[;] and (2) a class action is

64 34a superior to other available methods for fairly and efficiently adjudicating the controversy. FED. R. CIV. P. 23(b)(3); see also Funeral Consumers Alliance, Inc. v. Serv. Corp. Int l, 695 F.3d 330, 348 (5th Cir. 2012). In determining predominance and superiority, the Court looks to, among other matters, (1) the class members interest in individually controlling their separate actions; (2) the extent and nature of existing litigation by class members concerning the same claims; (3) the desirability of concentrating the litigation in a particular forum; and (4) the likely difficulties of managing a class actions. FED. R. CIV. P. 23(b)(3). The Court addresses the requirements of predominance and superiority in turn. Considering whether questions of law or fact common to class members predominate begins, of course, with the elements of the underlying cause of action. Erica P. John Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179, 2184 (2011). As has been recited repeatedly in this Order, Plaintiffs in this case challenge both the constitutionality of the RLA s authorization of compulsory union fees and the constitutionality of various TWU policies. Whether the RLA s authorization of compulsory union fees and various TWU policies violate the First Amendment is therefore the question of law common to all class members. There are no other legal issues in this case. And because the case presents mainly legal issues, there are minimal questions of fact. The only individualized factual inquiry required in this case is the amount of damages each class members could receive. The Fifth Circuit has found no abuse of discretion in certification under Rule 23(b)(3) where there required individualized calculation of damages because every issue prior to damages [was] a common issue. Bertulli v. Indep. Ass n of Cont l Pilots, 242

65 35a F.3d 290, 298 (5th Cir. 2001). This is precisely the scenario before this Court, and the Court accordingly finds that the predominance requirement of Rule 23(b)(3) has been satisfied. [T]he superiority analysis is fact-specific and will vary depending on the circumstances of any given case. In re TWL Corp., 712 F.3d 886, 896 (5th Cir. 2013) (internal quotation marks omitted) (citation omitted). In Roper v. Consurve, 578 F.2d 1106 (5th Cir. 1978), aff d sub nom. Deposit Guar. Nat. Bank, Jackson, Miss. v. Roper, 445 U.S. 326 (1980), the Fifth Circuit noted that a case was a classic case for Rule 23(b)(3) class where [t]he claims of a large number of individuals can be adjudicated at one time, with less expense than would be incurred in any other form of litigation. The claims are relatively small... and the question of law is one that applies alike to all. Id. at Moreover, [w]hile it may be necessary to make individual fact determinations with respect to charges, if that question is reached, these will depend on objective criteria that can be organized by a computer, perhaps with some clerical assistance. It will not be necessary to hear evidence on each claim. Id. Again, this is the precise scenario before the Court in this case. Because all individuals in the class have the same claims, it is efficient to adjudicate them in one forum. Additionally, the monetary claims of the individuals are relatively small, see Pls. Br , 20 n.2, and could be calculated formulaically and without the need for additional hearings. See Pls. Br. 20. Also, the small potential damage award in this case provides little incentive for individuals to pursue their claims individually. Amchem Prods., Inc., 521 U.S. at 617 (noting that certification under Rule 23(b)(3) contemplates the rights of groups of people who

66 36a individually would be without effective strength to bring their opponents into court at all. ). The Court accordingly finds that the superiority requirement of Rule 23(b)(3) has been satisfied. The Court therefore finds that certification is appropriate under Rule 23(b)(3). Thus, should it hereafter be determined that certification under Rule 23(b)(2) is inappropriate, the court would still certify the class under Rule 23(b)(3). 4. The Court Orders That Class Members Be Given Notice And An Opportunity to Opt Out. Notice to class members and the opportunity to opt out of the class are mandatory rights in a class action certified under Rule 23(b)(3). FED. R. CIV. P. 23(c)(2)(B); In re Monumental Life Ins. Co., 365 F.3d 408, 416 (5th Cir. 2004). A court has discretion to order notice and an opportunity to opt out in class actions certified under either Rule 23(b)(1) or Rule 23(b)(2). FED. R. CIV. P. 23(c)(2)(A); In re Monumental Life Ins. Co., 365 F.3d at 416. Because the Court had found that certification is warranted under Rule 23(b)(2), the Court exercises its discretion and orders that notice and an opportunity to opt out be provided to the class. Such notice will address any due process concerns that may arise in class actions involving monetary damages. See In re Monumental Life Ins. Co., 365 F.3d at (noting due process requires the provision of notice where a rule 23(b)(2) class seeks monetary damages, but there is no absolute right of opt-out in a rule 23(b)(2) class, even where monetary relief is sought and made available. (citing Penson v. Terminal Transp. Co., 634 F.2d 989, 994 (5th Cir. 1981))).

67 37a D. Plaintiffs Requested Counsel Meet the Requirements for the Appointment of Class Counsel Under Rule 23(g) Once a class has been certified, the Court must appoint class counsel. FED. R. CIV. P. 23(g). The Court may appoint the applicant seeking appointment where the applicant satisfies the requirements of Rule 23(g)(1) and Rule 23(g)(4). FED. R. CIV. P. 23(g)(2). Specifically, the Court must consider: (i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel s experience in handling class actions, other complex litigation, and the types of claims asserted in the action; (iii) counsel s knowledge of the applicable law; and (iv) the resources that counsel will commit to representing the class. FED. R. CIV. P. 23(g)(1)(A). The Court must also consider whether the requested counsel fairly and adequately represents the interests of the class. FED. R. CIV. P. 23(g)(4). Plaintiffs request that this Court appoint Milton L. Chappell, David E. Watkins, Jason Edward Winford, and Nathan J. McGrath as class counsel. See Pls. Br. 21. Mr. Chappell and Mr. McGrath have vast experience in cases involving unions and, as staff attorneys for the Foundation, have a variety of resources at their disposal. Moreover, both Mr. Watkins and Mr. Winford are experienced in labor and employment law. The attorneys are therefore qualified to serve as class counsel under Rule 23(g)(1)(A). TWU asserts that the Foundation s ideology prevents its staff attorneys from fairly and adequately

68 38a representing the interest of the class; the Court is not persuaded. TWU bases this argument on potential conflicts of interest between the Foundation and proposed class members who favor continuation of a legal regime that makes effective union representation possible by requiring that all represented employees pay their fair share of TWU s collective bargainingrelated costs. See Def. s Resp TWU s assertion that Foundation attorneys cannot adequately represent the class in this case is based on conjecture, as it has offered no evidence in support of these purported conflicts of interest. As previously discussed, with one narrow exception, TWU has not established that any class member is actually opposed to this litigation or the relief sought therein. The Court therefore declines to consider such speculation as establishing an absence of fair and adequate representation of the class. See Lee v. Am. Airlines, Inc., 2002 WL , at *8 (N.D. Tex. 2002) (considering the adequacy of class counsel and noting that any allegations of potential conflict are very speculative and hypothetical and [m]any courts have held that speculative conflict should be disregarded at the class certification stage. (internal quotation marks omitted) (citation omitted)). In short, TWU is not entitled to a veto of proposed class counsel because they strongly believe in the correctness of their position. CONCLUSION The Court grants Plaintiffs motion for class certification and appointment of class counsel. The certified class is all former, present, and future nonmembers of TWU, excluding former nonmembers who have since joined the union. The Court appoints Milton L. Chappell, David E. Watkins, Jason Edward Winford, and Nathan J. McGrath as class counsel. The

69 39a Court further orders that the parties confer regarding the notice to be provided to class members and provide a status report to the Court regarding the same within twenty-one (21) days of this Order. This deadline is stayed if either party appeals this Order. Signed December 3, /s/ David C. Godbey David C. Godbey United States District Judge

70 40a APPENDIX E IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION [Filed 9/19/14] Civil Action No. 3:13-CV-2469-N JOSE SERNA, MARY RICHARDSON, ROBERTO CRUZ, SANTOS CORDERO, SARI MADERA, RALPH ANDERSON, WARREN LAMBERT, GREG HOFFER, and KENT HAND, for themselves and the class they seek to represent, Plaintiffs, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant. DECLARATION OF JOHN BALZ Pursuant to 28 U.S.C. 1746, I, John Balz, declare that I am a resident of the State of Wisconsin, am competent to testify under its laws, and have personal knowledge of the facts that follow: [1] I, John Balz, am an applied behavioralist who leverages the principles and lessons of behavioral economics and psychology to solve problems that involve behavior change. I am a behavioral science practitioner with expertise in identifying and changing features of an environment or context that influence human decisions and behavior through conscious and unconscious processes. Collectively, these features are known as choice architecture.

71 41a [2] I hold a B.S. in political science from Northwestern University, an M.A. in American Studies from the University of Texas-Austin, and an M.A. and Ph.D. in political science from the University of Chicago. [3] I was introduced to behavioral science while at the University of Chicago through interactions with behavioral economist Richard Thaler and law professor Cass Sunstein. [4] I served as the lead researcher for two years for the New York Times best-selling book Nudge, which provides a blueprint for applying behavioral science principles to the field of public policy and politics. During the composition of the book, I drafted two chapters one on Medicare Part D and a second on school choice. 1 [5] After publication, I edited the online companion to the book, the Nudge blog ( for more than two years, compiling an online reference volume of behavioral science examples for practitioners to draw on for their work. Nudge blog traffic averaged close to 100,000 unique visits a year during my time as editor. I also co-authored the paper Choice Architecture with Sunstein and Thaler for a book titled The Behavioral Foundations of Public Policy published in 2013 by Princeton University Press. [6] Currently, I am an active participant in social media conversations about behavioral science. Under the twitter I have attracted more than 12,300 followers and use the account to 1 Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven, Conn: Yale University Press, 2008).

72 42a promote behavioral science ideas via social conversations. [7] Upon graduation from Chicago, I joined the social impact organization ideas42 as a Vice President. Led by team of academics behavioral economists Sendhil Mullainathan of Harvard and Antoinette Schoar of MIT and psychologist Eldar Shafir of Princeton University ideas42 develops behavioral science nudges to solve pressing social problems around health, poverty, the environment, and education. It tests the impact of these nudges using scientifically rigorous randomized control experiments similar to those used in the medical industry. [8] While at ideas42, I worked on the Behavioral Interventions to Advance Self-Sufficiency (BIAS) project, which explores the application of behavioral economics principles to the programs and target populations of the Administration for Children and Families (ACF) in the Department of Health and Human Services (HHS). I led a behavioral auditing project to identify areas of social welfare programs that could benefit from behavioral science. Partnering with a job assistance center in Illinois, my ideas42 team mapped the process by which individuals enroll in job training programs to recommended changes in steps, language on application forms, and scripts used by job center employees to increase participation rates. I coauthored a project report Behavioral Economics and Social Policy: Designing Innovative Solutions for

73 43a Programs Supported by the Administration for Children and Families. 2 [9] The BIAS project was featured in the New York Times for work on the National Domestic Violence Hotline, which faces a behavioral problem of callers being placed on hold and hanging up before speaking with a counselor. ACF is currently preparing experimental trials with strategies to help keep callers on the line longer. 3 [10] At ideas42, I led a project for a Fortune 500 financial institution to shift the behavior of individuals who use physical branches to pay bills to other customer service channels such as the web, ATM, or phone. I also helped design a nudge intervention for parents at a San Francisco elementary school to help save for their children s college educations. [11] Following ideas42, I joined the Chicago office of the global advertising firm Foote, Cone, and Belding (FCB) as a Senior Strategic Planner where I developed strategies for financial services and pharmaceutical products. For a Fortune 500 financial institution, I developed a strategy for positioning a 2 Lashawn Richburg-Hayes, Caitlin Anzelone, Nadine Dechausay, Saugato Datta, Alexandra Fiorillo, Louis Potok, Matthew Darling, and John Balz, Behavioral Economics and Social Policy: Designing Innovative Solutions for Programs Supported by the Administration for Children and Families, (Washington DC: MDRC, Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services (OPRE), 2014). 3 Richard Thaler, Public Policies, Made to Fit People, New York Times, August 24, 2013, accessed September 6, 2014,

74 44a signature credit product that became the foundation for the company s online acquisition program. Working with teams of graphic and user experience designers, I set the direction for an online tool to help consumers set and achieve financial goals using the company s credit product. [12] Within FCB, I spearheaded the creation of a tool 8 Ways to Change Behavior that other strategic planners could draw on to apply behavioral economics to various brands and campaigns under their purview. [13] Currently, I am the Behavioral Marketing Manager at Opower, an energy efficiency technology company based in Arlington, Virginia, and one of the Top 50 environmental technology companies according to the Wall Street Journal. Having turned a foundational psychology experiment aimed at helping people save electricity into a scalable software product, Opower is now among the world s largest ongoing behavioral science experiments. With a product deployed in more than 20 million homes in the U.S. and seven countries abroad, Opower tests its impact using the randomized control scientific framework. Leading independent researchers at New York University, Yale, and Harvard have validated our long-term results. [14] As part of the Consumer Marketing Team, I have led program design for utility companies in the U.S. and Europe who purchased Opower s software with the goal of reducing energy use or improving customer satisfaction. Working in partnership with Opower s Analytics team, I have directed tests of Opower s Home Energy Report program, adjusting messages and visual designs, with the goal of optimizing energy savings and improving customer

75 45a engagement. Within the Marketing team, I have developed a framework for bringing the principles and lessons of behavioral science to marketing and communication plans and creative work. [15] Attorney Bruce Cameron contacted me with regard to providing my expertise and evaluation about a case in Dallas, Texas, for which he is a counsel. The case involves a group of employees who are compelled to join or financially support a labor union. I have reviewed the complaint in the case and specifically have read the Attachment to the Complaint Transport Workers Union of America Policy on Agency Fee Objection. [16] I reviewed the Union s policy for the purpose of expressing my opinion on the choice architecture issues involved in it. I reviewed the Attachment with an eye to determine how the specific language and requirements affected individual employee support of the union. I am here representing my own views and not those of any organization to which I have been or currently am a member of. [17] My professional opinion is based on my educational background and my professional experience in this area. I am not an expert in law and offer no legal opinion. [18] It is my opinion that two themes from behavioral science and choice architecture are especially relevant to the case at hand. [19] The first is the default option. In decisionmaking contexts, choice architects must structure an outcome that will result if an individual does not make a choice. Two primary choice structures are Opt-in and Opt-out. Opt-in/Opt-out policies are commonly found in enrollment contexts. In an Opt-in

76 46a structure, an individual must actively choose to participate or select an option to receive it. The situation with the Union represents an Opt-out structure in which an individual participates or is given an option regardless of whether that individual has actively chosen it. The choice of this default option is at the discretion of the choice architect. [20] It is my opinion that the Union s policy uses default options that affect two decision points. The first decision point has to do with whether a non- Union employee will financially support the Union s political activities. The default option is the support of political activity through fees equal to dues in an amount determined by the Union. The second decision point has to do with whether the employee will waive his legal interest in the Union s calculation of chargeable costs. The default option is the Union s calculation of chargeable costs. [21] The choice of a default option is important because of a human tendency toward inertia or nonaction. This tendency is known in behavioral literature as the Status Quo Bias whereby people continue to participate in a program for a long period of time regardless of whether their initial enrollment happened through an Opt-in or an Opt-out structure [22] The power of default options has been shown in a wide range of areas. It is perhaps best known through a 2001 study of 401k participation showing large differences in enrollment between Opt-in and Opt-out structures. 4 The study of automatic 4 Brigitte Madrian and Dennis Shea. The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior, Quarterly Journal of Economics, November 116 (2001):

77 47a enrollment at a Fortune 500 firm showed that under an Opt-in structure, 37.4 percent of recent hires enrolled in their employer s 401k program compared to 85.9 percent under an Opt-out structure. In a separate study, researchers found participation rates under Opt-in structures at three firms falling between 26% and 43% after six months and 57% and 69% after three years. Again, under an Opt-out structure, participation rates exceeded 85 percent. 5 [23] My opinion is that the difference between the two structures is not indicative of different employee preferences, rather it is because of the choice architecture, especially when one considers survey responses in which people say they want to save for their retirement. According to a recent survey from the Washington D.C. non-profit America Saves, the overall interest level in saving money across all ages is 71 percent with young people indicating the strongest interest at 77 percent. 6 [24] Default options have also been shown to affect organ donation rates. European governments have adopted different Opt-in/Opt-out structures for organ donation programs. A study of 11 European countries found that organ donor program enrollment rates under Opt-in policies ranged between 4.25% and 27.5% while rates rose to between 85.9% and 99.98% 5 James Choi, David Laibson, Brigitte Madrian, and Andrew Metrick, Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance. Tax Policy and the Economy 16 (2002): America Saves Press Release, New Personal Savings Index Measures Perceived Savings Interest (71%), Effort (62%), and Effectiveness (58%), America Saves, November 4, 2013.

78 48a in countries with Opt-out policies. 7 Justifying these differences on the basis of socio-cultural norms requires explaining why enrollment rates in Germany and Austria, Sweden and Denmark, and Belgium and the Netherlands differ so dramatically despite their similar cultural heritages. It is my opinion that an explanation based on socio-cultural differences as opposed to choice architecture is not credible. [25] In the area where I currently work, energy, again I see the power of default options to influence enrollment. A 2013 study from the Department of Energy of 19 smart grid programs recruiting customers to enroll found an average recruitment rate of 84% among Opt-out structures compared to 11 percent for Opt-in structures. The highest Opt-in participation rate was 27%, while the lowest Opt-out participation rate was 78%. 8 [26] Unlike in the 401k example, where the default option to enroll fits the survey responses Americans give about wanting to save for retirement, in energy the match between the default option and customer preferences is less clear. Just 43% of Americans said they knew what smart grid technology is, according to a 2011 survey conducted on behalf of Whirlpool and Habitat for Humanity International. 9 So why 7 Eric Johnson and Daniel Goldstein, Do Defaults Save Lives? Science 302 (2003): Department of Energy, Analysis of Customer Enrollment Patterns in Time-Based Rate Programs: Initial Results from the SGIG Consumer Behavioral Studies, Department of Energy, Washington D.C., Whirlpool Corporation Press Release, Most Consumers Feel They Only Moderately Understand How Smart Grid Technology Works, Whirlpool Corporation, March 29, 2011, Accessed

79 49a would 78 percent opt into a program about it? Again, this is indicative of the power of the default option. [27] In the case at hand, the Union s Opt-out structure with a default option for full enrollment (payment of full fees including those for politics) means that an employee hands over money to the Union for political purposes in an amount determined by the Union. If an employee does not object within 30 days, the Union keeps the political portion of dues, and the employee waives a right to challenge that proportion for the remainder of the year. [28] Under an Opt-in structure in which an employee must actively choose to pay for political activities through fees or an Opt-out structure with a different default choice specifically for fees, no money for political purposes would change hands. [29] Because the default is set in this case to opting into Union politics, employees end up supporting those politics even though it is not clear they do. [30] The second major theme of behavioral science that is relevant to the case at hand is a concept from the psychology literature known as a channel factor. [31] The seminal study of channel factors was conducted on the campus of Yale University with a health campaign encouraging students to get a tetanus shot. One group of students was given information about the risks of tetanus, the benefits of a shot, and where to go to get inoculated. Another group was given the same information as well as a September 6, /most-consumers-feel-they-only-moderately-understand-howsmart-grid-technology-works html.

80 50a map showing how to get to the building. Three percent of people who received information about the shot got inoculated compared to 28 percent of people who received the map. 10 [32] The impact of this small additional piece of information is referred to as a channel factor. From an outsider s perspective, the additional value of this piece of information appears minimal. Finding out how to get to the building does not require a large investment in time or resources. But from the perspective of the decision maker, this apparently small hurdle is actually significant and inhibits their chances of getting a shot. [33] In the case of letters and forms, common channel factors include lengthy text and confusing terms. Humans limited attention spans and mental capacities to process information lead to tendencies to procrastinate or to accept the terms given to them by the letter drafter. The existence of multiple channel factors can make the default option even more powerful and difficult to overcome. [34] In the case at hand, I see multiple noteworthy channel factors that influence a decision. Union forms refer to political activities as non-chargeable, an unintuitive term that does not help employees assess how those funds would be used. The Union determines what proportion of dues is earmarked for those political activities. Employees who object and wish to challenge this division must gather 10 Howard Leventhal, Robert Singer, and Susan Jones Effects of Fear and Specificity of Recommendation Upon Attitudes and Behavior, Journal of Personality and Social Psychology 2 (1965):

81 51a information from the Union itself to make a difficult calculation. [35] The process to opt in for Union membership is straightforward and simple. Handing over money for political activities requires completing a membership card with basic information like an employee s name, address, and place of employment. It then requires signing a statement to tender my application for membership in your Union and filling in the required initiation fee amount. My understanding is that dues are then automatically withdrawn from an employee s paycheck every pay cycle. [36] For those employees who do not opt in for membership, the Union still defaults them into paying fees at the rate of 100% of dues, including even the political portion. In contrast, not asking to have the portion of fees set aside for political activities requires challenging action by the employee. It is a lengthy, multi-step process containing many channel factors. The instructions for doing so are not included in the membership form itself. [37] In order to object, a non-member must obtain a copy of the Union s informational newsletter that includes an objection policy in the back of the newsletter in a small type. The employee must draft a letter indicating their preference for a refund in fees for political activities. No form letter or suggested language for opting out is offered. The employee must also make separate copies of the letter to be sent by mail to their local and national Union representative using their own envelopes and stamps. Employees are given a specific time window of 30 days under which to express their desire to optout of paying political fees.

82 52a [38] Contrast the procedure described above with how the Union handles a request from an objecting employee who decides she changes her mind about resigning membership. One of the materials that I reviewed in preparing this affidavit is the letter to Mary Richardson from the Transport Workers Union. In it, Richardson, who requested to resign her membership, is informed by the Union at two places in the letter that if she wishes to change her mind to simply communicate her desire by letter, or fax to the International Secretary-Treasurer. If she does so, she will be considered a member with no questions asked. [39] If an employee affirmatively objects and goes through the process estimating the cost of fees for political activities, the Union offers its own estimation of those fees. Objecting to the Union s estimation sets off another series of necessary steps by the employee to attempt to avoid paying any amount for political activities. [40] The power of default options and channel factors combine together to tilt against employees with personal preferences not to pay fees for political activities. Although employees may hold such preferences, behavioral science research indicates that as in the case of retirement savings, a human tendency toward procrastination can inhibit action, especially when such action requires understanding complex terminologies and multi-step processes like the Union example here. [41] The differences between these two procedures for paying (or not paying) fees for political activities constitute distinct sets of unequal channel factors. They indicate the Union s enrollment document is not a level, unbiased statement about its

83 53a activities. Instead, it is a tool that nudges employees toward membership and non-members toward paying a fee equal to dues. [42] As a result, an unknown number of employees are giving political money that they would not otherwise give. They are giving money to the Union for activities they would do not agree to and would prefer not to support financially. I declare under penalty of perjury that the foregoing is true and correct. Executed on this 16 day of September, /s/ John Balz John Balz State of IL County of Cook Subscribed & Sworn to before me this 16th day of September 2014 /s/ AnnMarie Piotrowski AnnMarie Piotrowski Notary

84 54a APPENDIX F TRANSPORT WORKERS UNION OF AMERICA POLICY ON AGENCY FEE OBJECTION TWU s Policy on Agency Fee Objections, as amended, is based upon decisions of the United States Supreme Court. 1. Employees who are members of TWU are eligible to engage in a broad range of activities by virtue of their membership. This includes, for example, the right to run for and vote in Union elections, to vote on ratification of collective bargaining agreements, and to attend and participate in Union meetings and activities that are pertinent to their employment. Employees represented by TWU can elect to be nonmembers, but if they do, they lose these and other rights and benefits that go along with membership in good standing in TWU. 2. A TWU-represented nonmember employee who is subject to a union security clause conditioning continued employment on the payment of dues or fees referred to as agency fees for nonmembers has the right to object to expenditures by TWU or the employee s Local Union that are not related to collective bargaining contract administration, grievance adjustment or other expenditures that are considered chargeable to nonmember objectors. A nonmember objector s agency fees shall be calculated in accordance with this policy. 3. To become an objector, a TWU-represented nonmember employee shall notify the International Secretary Treasurer in writing of her/his objection by mail postmarked during the month of January in the year for which the employee elects to be an objector. The written notification shall be signed by the

85 55a employees and include the objectors current home address and TWU Local Union number, if known. The nonmember objector shall also mail a copy of this notice to her/his Local Union. A nonmember employee who first becomes subject to a TWU union security after January in a particular year and who desires to be an objector must submit a written signed notification to the International Secretary Treasurer, with a copy to the employee s Local Union, including the objectors current home address and TWU Local Union number, if known, within thirty (30) days after the employee subject to union security obligations and been provided notice of these procedures. a. A current TWU member who chooses to become an objector, must resign from TWU membership before she/he can file an objection through these procedures. A member who resigns from membership during the course of the year shall have 30 days following resignation in which to elect to become an objector by utilizing the procedures set forth in paragraph 3 above. b. A nonmember employee objector who wishes to again be an objector in a subsequent calendar year must provide notice of objection in the January of the year for which the employee desires to be an objector, in accordance with the procedures in paragraph 3 above. 4. Expenditures in the following categories are among those chargeable to nonmember objectors. a. Negotiation of agreements, practices and working conditions. b. Administration of agreements, practices and working conditions, including grievance handling, all activities related to arbitration, and

86 56a discussion with employees in the bargaining unit or employer representatives regarding working conditions, benefits and contract rights. c. Conventions, Union business meetings, and other Union internal governance and related expenses. d. Social activities. e. Publications, to the extent related to chargeable activities. f. Litigation before courts and administrative agencies related to contract administration, collective bargaining rights or other chargeable activities. g. Legislative, executive branch and administrative agency activities on legislative or regulatory matters related to the negotiation or administration of contracts and working conditions. h. Education and training of members, officers and stall intended to prepare the participants to better perform chargeable activities or otherwise related to chargeable activities. i. Activities related to group cohesion and economic action of or by TWU represented employees, e.g., demonstration, general strike activity, informational picketing. j. Overhead and administration related to or reflective of TWU or TWU Local Union chargeable activities. 5. Expenditures in the following categories arguably are non-chargeable to nonmembers objectors: a. Community service and charitable contributions.

87 57a b. Affiliation with non-twu organizations c. Support for political candidates. d. Member-only benefits. e. Lobbying to the extent not chargeable as per paragraph 4.g. above. f. Publications, litigation and for overhead and administration to the extent related to arguably non-chargeable activities. g. External recruitment of new members. 6. The TWU Policy on Agency Fee Objections shall be reprinted in each December issue of the EXPRESS. The International shall also send a copy of this Policy to each nonmember who objected during that calendar year to inform such person of the right to elect to again object in a succeeding year. Any Local Union that is required by law to have an agency fee policy, but which has failed to adopt such a policy, shall be deemed to have adopted this Policy on Agency Fee Objections as its own, and such Locals shall be identified in the December issue of the EXPRESS. 7. The International shall retain an independent auditor who shall submit an annual report verifying the breakdown of chargeable and arguably nonchargeable expenditures (the Report ). Similarly, if a Local Union has determined to apply this Policy for its expenditures, the Local Union shall arrange for an independent audit of the breakdown of the Local s chargeable and arguably non-chargeable expenditures. Any Local Union which fails in a given year to conduct an independent audit of expenditures shall be deemed to have spent the same percentage of its expenditures on chargeable activities as the International expended as reflected in the auditor s

88 58a report. The report(s) of the independent auditor(s) for the International and, where applicable, the Locals shall be completed promptly after the end of the fiscal year. The most recent report of the International s expenditures shall be reprinted in the December issue of the EXPRESS. The Local Union shall provide to the nonmembers it represents a copy of the report of the breakdown of the Local Union s expenditures. 8. The fees paid by nonmember objectors shall be handled as follows: a. Nonmember objectors who pay fees directly and not by check off shall pay an amount equal to the full amount of agency fees reduced by the percentage of agency fees ascribed by the audit report(s) (described in paragraph 7 above) to arguably non-chargeable activities (the latter amount referred to hereafter as the nonchargeable amount ). An amount equal to 50% of the non-chargeable amount shall be placed in an interest bearing escrow account. b. With regard to nonmember objectors who pay agency fees by check-off, promptly following receipt of the checked-off fees, the non-chargeable amount, both for the International and the Local that is utilizing this Agency Fee Objection Policy, plus an additional 50% of that amount, shall be placed in an interest bearing escrow account. Promptly following each calendar quarter, the non-chargeable amount for the preceding calendar quarter, plus the interest accrued thereon, shall be paid to each such nonmember Objector. c. The International shall bill each Local for the monies returned to objectors from escrow in

89 59a connection with the Local s arguably nonchargeable expenditures. 9. A nonmember objector may challenge the last audited breakdown of chargeable and arguably non-chargeable expenditures contained in the independent accountant s report(s) by filing a challenge with the International Secretary-Treasurer, together with notice to the employee s Local Union, postmarked no later than thirty (30) days after mailing of the December issues of the EXPRESS that includes the report(s). a. All such timely challenges shall be referred to an impartial arbitrator by the American Arbitration Association ( AAA ) under its rules for impartial determination of Union fees. TWU will request that the AAA appoint an arbitrator to promptly consider and makes a determination regarding the challenges in a single consolidated hearing to take place in Washington, D.C.. TWU will provide the AAA with the names and addresses of the nonmember objectors who have filed timely challenges. b. Challengers, the International and, if a participant, the Local Union(s) shall each bear its/their own costs related to the arbitration. The challengers shall have the option of paying a pro rate portion of the arbitrator s fees and expenses; if they decline that option, the Union parties to the proceeding will pay the full fees and expenses of the arbitrator and not just their pro rate portion of such fees and expenses. c. Challengers may, at their expense, be represented by counsel or other representative of choice. Challengers need not appear at the

90 60a hearing for their challengers to be considered. Challengers who elect not to appear at the hearing may file written statements with the arbitrator, provided they do so by no later than the beginning of the hearing before the arbitrator. Challengers who appear but elect not to represent evidence or otherwise participate in the hearing may also submit written statements at or before the beginning of the hearing. d. Fourteen (14) days prior to the start of the arbitration, challengers shall be provided with copies of all exhibits or a list of all such exhibits that a Union party then intends to introduce at the arbitration and a list of all witnesses the Union party then intends to call, except for exhibits and witnesses the Union party may introduce for rebuttal. If copies of exhibits have not otherwise been provided, a challenger may request that the Union forward a copy to the requesting challenger(s) during the 14-day prehearing period. Copies of all exhibits shall also be available for review by challengers at the hearing. e. A court reporter shall make a transcript of all proceedings before the arbitrator. This transcript shall be the only official record of the proceedings and may be purchased by the challengers. The parties shall be informed when the transcript is available for purchase and/or review. If challengers do not purchase a copy of the transcript, a copy shall be available for purposes on inspection by them at the Union party s/parties headquarters during normal business hours.

91 61a f. The arbitrator may determine all procedural matters affecting the arbitration consistent with the dual objectives of providing for an informed and an expeditious arbitration. g. Each party to the arbitration shall have the right to file a post-hearing statement by no later than fifteen (15) days after the parties have been provided notice that the transcript has been completed and is available for purchase or review. Neither challengers nor Union parties may include or refer in the post-hearing statements to any evidence that was not previously introduced and accepted by the arbitrator during the arbitration proceeding. h. The arbitrator, taking account of the record presented, shall issue a decision on the challenges to the validity of the auditor s report of the chargeable percentage of Union expenditures. The arbitrator s decision shall be issued with forty-five (45) days after the final date for submission of post-hearing statements or within such other reasonable period as is consistent with the AAA and the requirements of law. The decision of the arbitrator shall be final and binding. i. Upon receipt of the arbitrator s award, the escrowed funds, as referred above, shall be distributed in accordance with the arbitrator s decision, with the remaining balance, if any, after any required payments to challengers, returned to the International s or Local Union s general funds. 10. The provisions of this Policy on Agency Fee Objections shall be considered legally separable.

92 62a Should any provisions or portion thereof be held contrary to law by a court or tribunal of competent jurisdiction, the remaining provisions or portions thereof shall continue to be legally effective and binding.

93 63a APPENDIX G IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION [Filed 09/19/14] Civil Action No. 3:13-CV-2469-N JOSE SERNA, MARY RICHARDSON, ROBERTO CRUZ, SANTOS CORDERO, SARI MADERA, RALPH ANDERSON, WARREN LAMBERT, GREG HOFFER, and KENT HAND, for themselves and the class they seek to represent, Plaintiffs, v. TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO, Defendant. DECLARATION OF EMILY PITTS DIXON Pursuant to 28 U.S.C. 1746, I, Emily Pitts Dixon, declare that I am a resident of Virginia, am competent to testify under its laws, and have personal knowledge of the facts that follow: 1. Due to semi-retirement, I am currently a part-time employee of the National Right to Work Legal Defense Foundation. I began my employment with the Foundation in 1972 and worked as a legal assistant and paralegal until January In 1975, I became the Paralegal Director. In 1998, I became Office Manager for the litigation section of

94 64a the Foundation and custodian of the litigation files, as well as Paralegal Director. 2. In 1971, I received my Bachelor of Arts degree from Sweet Briar College. In addition, I hold a paralegal certificate from the Institute for Paralegal Studies. 3. While I was the Foundation s Office Manager and custodian of its litigation files, attorney Bruce N. Cameron asked that I supervise the collection of information on the time and expense involved in several high-profile cases funded by the Foundation. Specifically, I understand the Foundation to have funded all of the cases decided by the U.S. Supreme Court in the last forty years involving employee challenges to the amount, or other aspects, of compulsory union fees. Mr. Cameron asked me to supervise the collection of files and the compilation of case-related information for the following three landmark U.S. Supreme Court cases involving the amount of union fees: A. Ellis v. Railway Clerks, 466 U.S. 435 (1984); B. CWA v. Beck, 487 U.S. 735 (1988); C. Lehnert v. Ferris Faculty Ass n, 500 U.S. 507 (1991). He also asked me to pull the files for a fourth case, Belhumeur v. Springfield Education Ass n. Belhumeur involved a 53-day trial before the Massachusetts Labor Relations Commission, and various appeals. It is reported at: Belhumeur v. Labor Relations Commission, 432 Mass. 458 (2000); Wareham Education Ass n v. Labor Relations Commission, 430 Mass. 81 (1999);

95 65a Belhumeur v. Labor Relations Commission, 411 Mass. 142 (1991). 4. Attached as Exhibit 1 is a three-page chart that lists, by year, the amount of attorney and research hours recorded in the Foundation s system of record-keeping for each of the four cases. These records are not only used for internal Foundation management, but, where possible, form the basis for requests for attorneys fee awards. Actual original records are only available for the Belbumeur litigation, and these begin on Page 2 of Exhibit 1. Those expenses do not include attorney or paralegal salaries, but rather are filing, transcript, travel, and expert witness expenses. 5. Exhibit 2, Page 1 recites the time each case took from initial filing to conclusion. Page 1 refers to an attachment, which comprises the next thirteen pages. The attachment includes court filings in Beck (including affidavits of Barbara Thorn), and reveals about $100,000 in expenses for the Beck litigation, which was filed in Exhibit 3 is the Motion for Costs in Belhumeur filed with the Massachusetts Labor Relations Commission in It reveals the hearing transcript alone cost approximately $54,000 and half of that, $26,866.71, was levied on the teachers challenging the amount of the union fee. 7. Exhibits 1 and 2 reveal that the Ellis case was filed in 1973 and decided by the U.S. Supreme Court in It consumed 5, attorney hours and 6, hours of support staff work. 8. Exhibits 1 and 2 reveal that Beck was filed in 1976 and decided by the U.S. Supreme Court in It consumed 4, hours of attorney work, and

96 66a 2, hours of support staff work. My staff was able to find documentation for approximately $100,000 in expenses for transcript fees, special master fees, and similar costs. That $100,000 does not include the value of attorney and support staff work. Although the Foundation s records do not contain this information, a panel decision in Beck stated that 4,000 pages of testimony, the introduction of over 3,000 documents, and innumerable hearings, and adjudication of motions were filed in the case. Beck v. CWA, 776 F.2d 1187, 1194 (1985), aff d on rehearing, 800 F.2d 1280 (4th Cir. 1986), aff d, 487 U.S. 735 (1988). 9. According to Exhibits 1 and 2, Lehnert, which was filed in 1978 and decided by the U.S. Supreme Court in 1991, consumed 4, hours of attorney work, and 1, hours of support staff work. 10. Belhumeur was filed in 1988 and settled in It consumed 8, attorney hours, 7, support staff hours, $161, in court costs, expert fees, and travel expenses and 5, hours of Westlaw research. 11. Belhumeur was such a massive case that its related litigation files could not reasonably be contained in the Foundation s main file room. As a result, ten standard, five foot tall file cabinets were installed in an area approximately 10 feet by 15 feet to house the voluminous case files. 12. After supervising the collection of that information about the foregoing cases, Attorney Cameron asked that information about a federal case involving a challenge to the amount of compulsory union fees, but not decided by the - U.S. Supreme Court, be

97 67a added. This case, Abrams v. CWA, 59 F.3d 1373 (D.C. Cir. 1995), reveals that ordinary federal court litigation challenging the amount of compulsory fees is also daunting. Filed in October 31, 1987, Abrams did not reach a judgment on remand for the employees challenging the union fee amount until 1998, after which there were further proceedings. See Abrams v. CWA, 23 F. Supp. 2d 47, 49, (D.D.C. 1998), including another appeal to the D.C. Cir., Abrams v. CWA, 2000 U.S. App. LEXIS (D.C. Cir. Mar. 20, 2000). Final judgment was not entered until March 28, Thus, this challenge took almost fourteen years to resolve. I declare under penalty of perjury that the foregoing is true and correct. Executed on September 18, /s/ Emily Pitts Dixon Emily Pitts Dixon

98 68a EXHIBIT 1 ATTORNEY AND RESEARCH HOURS FOR ELLIS/FAILS, BECK, LEHNERT AND BELHUMEUR

99 69a IN 1985 THERE WERE COMPUTER HOURS OF 79 HOURS. I DID NOT FIND ANY OTHER FOR THE OTHER YEARS.