Appeal from the United States District Court for the Middle District of Pennsylvania. D.C. Civil No. 88-01348
Before: Hutchinson, Cowen, and Seitz, Circuit Judges.
Class action plaintiffs, nonunion employees, appeal the order of the district court to the extent it grants final judgment in favor of various officials of the Commonwealth of Pennsylvania, (the "Commonwealth"), and Council 13 of the American Federation of State, County and Municipal Employees, ("Council 13"), (collectively "the defendants"). Plaintiffs' sought, inter alia, declaratory and injunctive relief against the implementation of Section 2 of The Public Employee Relations Act No. 84 of 1988 (S.B. 291), Pa. Stat. Ann. tit. 71, § 575 (Purdon Supp. 1990) [hereinafter "Act"]. This section permits the Commonwealth and the exclusive representative selected by the unionized employees of the Commonwealth to enter into a fair share fee agreement.*fn1
I. FACTUAL AND PROCEDURAL BACKGROUND
In July 1988, the General Assembly of the Commonwealth of Pennsylvania passed the Act, which became effective immediately. Pursuant to the Act, the Commonwealth of Pennsylvania and Council 13, the exclusive bargaining representative for approximately 54,000 Commonwealth employees, amended their collective bargaining agreement to provide for the deduction of fair share fees. Between August 8 and 12, 1988, Council 13 mailed notices to approximately 18,000 nonmembers for whom it served as the exclusive collective bargaining representative. This notice informed the nonmembers that beginning August 16, the Commonwealth would deduct fair share fees from their wages and transmit those fees to Council 13. The notice also provided nonmembers with certain information concerning Council 13's calculation of the fair share fee and the procedures it had established to enable the nonmembers to challenge the fee.
On August 26, 1988, the fifteen named plaintiffs, Commonwealth employees represented by, but not members of, Council 13, initiated this action against Council 13 and various officials of the Commonwealth. They sought injunctive and declaratory relief under 42 U.S.C. § 1983 barring the implementation of the Act, and certain subsections related to provisions in the collective bargaining agreement between the Commonwealth and Council 13, as well as the collection procedures adopted by Council 13. Plaintiffs also requested damages for the alleged constitutional violations. The basis of the nonmembers' § 1983 claims was that the challenged subsections, provisions and procedures violated the First and Fourteenth Amendments of the United States Constitution.
On August 30, 1988, the district court issued a temporary restraining order prohibiting the Commonwealth from deducting the fair share fees pending a hearing on plaintiffs' motion for a preliminary injunction. See Hohe v. Casey, 704 F. Supp. 581 (M.D. Pa. 1988). On September 15th, after the hearing, the district court lifted the restraining order and denied plaintiffs' request for a preliminary injunction. The plaintiffs appealed that order to this court, which affirmed on the ground that plaintiffs failed to show irreparable harm. See Hohe v. Casey, 868 F.2d 69, 70 (3d Cir. 1989).
Subsequent to the denial of their motion for a preliminary injunction, plaintiffs amended their complaint and sought class certification. On January 18, 1989, the court ordered that the action shall be maintained as a class action under Fed. R. Civ. P. 23(b)(1)(A) and 23(b)(2) by the plaintiffs on behalf of class comprised of the plaintiffs and all other individuals employed since August 16, 1988, by the Commonwealth of Pennsylvania, or its departments, boards, commissions, agencies, authorities, systems and other instrumentalities, who are represented exclusively for purposes of collective bargaining by Council 13 . . . and who are not members of said labor organization.
Hohe v. Casey, 128 F.R.D. 68, 72 (M.D. Pa. 1989).
In April 1989, Council 13 moved for summary judgment, the Commonwealth moved for judgment on the pleadings, and plaintiffs for partial summary judgment. In ruling on these motions, the district court determined that the "Act 84 can be applied constitutionally, and that for the most part, the fair share fee deduction program implemented by AFSCME Council 13 comports with" the constitutional requirements set forth in Chicago Teachers Union, Local No. 1 v. Hudson, 475 U.S. 292, 89 L. Ed. 2d 232 , 106 S. Ct. 1066 (1986). Nonetheless, it denied all of the parties' motions on the ground that there existed a genuine issue of material fact as to whether the financial data set forth in the notice sent to nonmembers in August 1988 had been properly verified as required by Hudson. The Court ordered that a hearing be held "to receive evidence on the sole remaining issue remaining in this matter: whether the expense figures for AFSCME International have been verified by an independent auditor."
On December 11, 1989, after the hearing, the district court concluded that "the breakdown of chargeable and non-chargeable expenses [for 1988-89] . . . were not subjected to verification by an independent auditor as required by Hudson." It further noted "that Hudson was violated because AFSCME International's Special Reports were prepared after the notices to nonmembers were sent." For this constitutional violation, the district court awarded plaintiffs nominal damages in the amount of $1.00 apiece. The court also concluded that it could not, at that time, order a rebate of any of the collected fees because even though the breakdown of expenses was not verified, "the figures may indeed be accurate." Id. at 1180. It issued an order permitting defendants and plaintiffs to submit audits and evidentiary materials for the purpose of determining whether the expense figures contained in the notice were in fact accurate. Id. at 1182.
After reviewing the submissions of the parties, the district court accepted the Conclusion of the defendants' auditor that "the schedules of expenses . . . present fairly, in all material respects, the expenses . . . and the allocation between chargeable and nonchargeables expenses . . . ." App. at 1301. It then determined that plaintiffs were only entitled to the nominal damages of $1.00 apiece.
In response to plaintiffs' motion for the entry of final judgment, the district court entered final judgment consistent with its prior rulings. Plaintiffs filed a timely notice of appeal from that order.
The district court had jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1343 (1988). This court has jurisdiction pursuant to 28 U.S.C. § 1291 (1988). Our review of all issues is plenary.
A. The Facial Constitutional Challenges to the Act
We must decide facial federal constitutional challenges by plaintiffs to subsections (d) and (g) of the Act.
1. The Commonwealth's Obligation to Deduct Fees
Plaintiffs challenge the last sentence in § 575(d) on the ground that it requires public employers to make unconstitutional deductions of fair share fees. To analyze this contention, it is necessary to place the challenged sentence within the relevant statutory context. Thus, we set forth both subsections (c) and (d) of § 575.
(c) To implement fair share agreements . . . the exclusive representative shall provide the public employer with the name of each nonmember who is obligated to pay a fair share fee, the amount of the fee that he or she is obligated to pay and a reasonable schedule for deducting said amount from the salary and wages of such nonmember. The public employer shall deduct the fee in accordance with said schedule and promptly transmit the amount deducted to the exclusive representative.
(d) As a precondition to the collection of fair share fees, the exclusive representative shall establish and maintain a full and fair procedure, consistent with constitutional requirements, that provides nonmembers, by way of annual notice, with sufficient information to gauge the propriety of the fee and that responds to challenges by nonmembers to the amount of the fee. The procedures shall provide for an impartial hearing before an arbitrator to resolve disputes regarding the amount of the chargeable fee. A public employer shall not refuse to carry out its obligation under subsection (c) on the grounds that the exclusive representative has not satisfied its obligation under this subsection.
In advancing their argument, plaintiffs assert that Hudson held that the public employer has an obligation to ensure that the union's procedures are adequate before it begins deducting fair share fees. They claim that the challenged sentence requires public employers to deduct fair share fees and transmit those fees to the exclusive bargaining representative even when the exclusive representative has failed to satisfy the constitutional requirements set forth in Hudson. They therefore maintain that since the sentence requires the public employer to make unconstitutional deductions, it is facially invalid.
The defendants concede that the statute requires the exclusive representative to adopt constitutionally adequate procedures before fair share fees can be deducted. They assert, however, that the obligation of the public employer to deduct and transmit the fee pursuant to § 575(d) can be applied in a valid manner, thus negating a facial attack.
As a general matter this court "will not invalidate a statute on its face simply because it may be applied unconstitutionally, but only if it cannot be applied consistently with the Constitution." Robinson v. State of New Jersey, 806 F.2d 442, 446 (3d Cir. 1986). This same principle applies when a part of statute is challenged on "facial" grounds. See, e.g., United States v. Grace, 461 U.S. 171, 175-76, 75 L. Ed. 2d 736 , 103 S. Ct. 1702 (1983) (restricting review of facial challenge to one part of the statutory provision, "the display of a 'banner or devise,'" and considering whether there existed a construction of that language that avoided the constitutional question). Thus, plaintiffs' facial challenge will succeed only if the last sentence of § 575(d) "is unconstitutional in every conceivable application, or . . . it seeks to prohibit such a broad range of protected conduct that it is constitutionally 'overbroad.'" Members of the City Council v. Taxpayers for Vincent, 466 U.S. 789, 796, 80 L. Ed. 2d 772 , 104 S. Ct. 2118 (1984); see also Brockett, 472 U.S. 491, 504, 86 L. Ed. 2d 394 , 105 S. Ct. 2794 ("lust" was neither incurably overbroad nor impossible to apply constitutionally).
Plaintiffs contend that the last sentence of § 575(d) can never be applied constitutionally. As they read the sentence, it only applies when the exclusive representative has not satisfied the precondition set forth in § 575(d), and thus only when the exclusive representative has failed to meet the constitutional requirements set forth in Hudson. Therefore, in their view, in every instance in which the public employer acts pursuant to the last sentence of § 575(d), the public employer's deduction of fair share fees is unconstitutional.
The cornerstone of plaintiffs' argument is their assertion that the last sentence only applies when the exclusive representative has failed to satisfy the precondition. Plaintiffs' position requires us first to ascertain the interpretation and construction intended by the General Assembly. See 1 Pa. Cons. Stat. Ann. § 1921(a) (Purdon 1990) ("The object of all interpretation and construction of statutes is to ascertain and effectuate the intention of the General Assembly.").
On May 26, 1987, Representative Heckler proposed an amendment that would have deleted the last sentence in § 575(d), and thereby eliminate the obligation of the public employer to make these [fair share] deductions until such time as the bargaining agent had established that the payments were consistent with the constitutional requirements which have been imposed by law.
See Legislative Journal of Pennsylvania, House of Representatives, May 26, 1987, at 713. In response to that proposal, Majority Leader Manderino, a strong supporter of the Act, stated:
I ask for a negative vote on this amendment. This amendment simply guts the procedure in a time which any objections might be made to the precondition placed upon the union by this bill. If the moneys are not collected during that period of time, they will be lost to the union, and you can imagine how many objections can be raised. Court cases, I am sure will arise. Court cases presently have the ability to enjoin collection in the event that collections should not be made.
Id. (Statement by Representative Manderino) (emphasis added); see also id. (statement by Representative Cowell that "the protections are not necessary . . . and in fact they risk dragging into court in a middleman role the public employer").
We draw from these statements two points bearing directly on the applicability of the last sentence of § 575(d). First, the General Assembly intended to insulate the public employer, so far as possible, from disputes between nonmembers and their exclusive representative as to the collection of the fair share fee. The last sentence was intended to require the public employer to deduct or continue to deduct fair share fees even when nonmembers raise objections to the collection of fees. Second, the General Assembly, in our view, never intended the last sentence to apply after a determination that the collection of fair share fees was improper. We therefore prophesy that the Supreme Court of Pennsylvania would similarly interpret § 575(d).
Further, we reject plaintiffs' contention that the challenged sentence applies when it is clear that the exclusive representative has failed to satisfy the precondition, and thus the requirements in Hudson. If the last sentence of § 575(d) continued to apply after it was determined that the procedures implemented by the union do not comply with Hudson, a constitutional problem would arise with respect to those cases in which that determination had been made. It is then the Commonwealth becomes involved in the unconstitutional act and thus can be said to have violated the precondition. At that point, the action of the public employer in withholding funds violates the nonmembers' constitutional rights by deducting fair share fees.
There is nothing in the Act that prevents the exclusive representative from satisfying the constitutional requirements set forth in Hudson, and thus the precondition.*fn2 Moreover, the Act places no limits on the nonmembers' right to object to the deduction and collection of fees. Therefore, under the Act, there can be situations in which nonmembers file objections but a court subsequently determines that the exclusive representative has, in fact, satisfied the precondition and its constitutional obligations. In such situations, the public employer deducting or continuing to deduct fair share fees over the nonmembers' objections would not have deducted fees in violation of the Constitution. Thus, the last sentence can be applied constitutionally, and plaintiffs' facial challenge to it must be rejected.
We note that our Conclusion does not conflict with the other cases cited by plaintiff, Tierney v. City of Toledo, 824 F.2d 1497 (6th Cir. 1987) and Dean v. Trans World Airlines, Inc., 924 F.2d 805 (9th Cir. 1991). As we read those cases and Hudson, the employer and the union must have a constitutional procedure in place before deducting fees. This does not mean, however, that the employer or the exclusive representative must in some way establish the constitutionality of the procedure before fees are deducted. Such a requirement would have the serious defect of depriving the exclusive representative of fees to which it is unquestionably entitled. Cf. Hudson, 475 U.S. at 310 (stating that "100% escrow . . . has a serious defect of depriving the Union of access to some escrowed funds to which it is unquestionably entitled"). Moreover, such a construction would render the escrow requirement completely unnecessary. See id. (stating that the union is required to provide "an escrow for amounts reasonably in dispute while such challenges are pending ") (emphasis added). Rather, the requirement that a constitutional procedure be in place before fair share fees are collected simply means that if a court subsequently determines ...