[00:00:00] Speaker 01:
Please be seated.

[00:00:06] Speaker 04:
Good morning, everyone, and welcome to the Ninth Circuit.

[00:00:09] Speaker 04:
We have three cases that have been submitted today.

[00:00:11] Speaker 04:
The first of those is Leacup and Tracy Castro versus Jefferson Avenue to Macula.

[00:00:17] Speaker 04:
And then the second two cases, Concern Hughes versus First National Insurance Company of America.

[00:00:24] Speaker 04:
Our first case for argument is Crane versus American Federation of State, County, and Municipal Employees, Council 36, Local 119.

[00:00:31] Speaker 04:
And you can come up to the podium when you're ready.

[00:00:40] Speaker 05:
Mr. Crane, yes Well, good morning your honors and may it please the court Timothy snowball on behalf of the appellant Michael Crane I would like to reserve two minutes for rebuttal.

[00:00:58] Speaker 04:
Thank you

[00:00:59] Speaker 05:
Your Honors, Michael Crane seeks a judicial recognition that when a public sector union uses state authority to compel an employee's association and speech, constitutional scrutiny applies to their claims.

[00:01:11] Speaker 05:
On this and related issues, the district court erred in its order dismissing Crane's lawsuit should be overturned for four primary reasons.

[00:01:18] Speaker 05:
The first, Crane had the undisputed right to end his union association at any time.

[00:01:24] Speaker 05:
Second, only Crane, not the union or the county, can waive his constitutional rights.

[00:01:30] Speaker 05:
Third, the window restriction was in fact a discretionary county policy.

[00:01:35] Speaker 05:
And fourth, AFSCME acted under color of law for purposes of Section 1983.

[00:01:40] Speaker 05:
As my first point, the free association issue.

[00:01:43] Speaker 05:
No party here, including the union, disputes that Crane had the unfettered right to end his union membership at any time.

[00:01:51] Speaker 05:
The issue was also left entirely unaddressed by the district court.

[00:01:55] Speaker 05:
The Abboud case.

[00:01:56] Speaker 06:
He's not disputed what's to address.

[00:01:58] Speaker 06:
I mean, maybe if there could dispute any issues, you'd get to that.

[00:02:01] Speaker 06:
But nobody's disputing that.

[00:02:03] Speaker 06:
So what's the point?

[00:02:05] Speaker 05:
What we would like the court to do, Your Honor, is to clarify the district court that, in fact, Mr. Crane had the right to seek relief for injuries that he suffered to his free association rights by being compelled to remain a member against his will.

[00:02:17] Speaker 05:
There's Supreme Court cases like the Abboud case.

[00:02:19] Speaker 06:
But who's disputing that?

[00:02:21] Speaker 06:
District court may not have addressed it,

[00:02:23] Speaker 06:
But from the district court's perspective, this appears to be a case desperately searching for a reason to proceed, because by the time the district court dealt with the case, that wasn't disputed.

[00:02:36] Speaker 06:
Your client had been reimbursed the money that was taken during the period of time.

[00:02:40] Speaker 06:
What's the problem?

[00:02:42] Speaker 05:
Well, there are additional damages, Your Honor.

[00:02:43] Speaker 05:
It is true that Mr. Crane was given back a check for the amount of money the dues taken without his affirmative consent for four months.

[00:02:50] Speaker 06:
Does he want the interest for that time period, or did he not get paid the interest for that time period?

[00:02:54] Speaker 05:
Well, he's seeking additional constitutional damages in addition to nominal damages, Your Honor.

[00:02:58] Speaker 02:
He did, in fact, get the interest paid with the repayment of his dues, correct?

[00:03:02] Speaker 05:
I believe that is correct, insofar as the due deduction is taken without his affirmative consent.

[00:03:07] Speaker 06:
So he's searching for some remedy for an injury that has already been recompensed.

[00:03:13] Speaker 06:
Is that what you're telling us?

[00:03:15] Speaker 05:
No, Your Honor, not at all.

[00:03:16] Speaker 05:
The issue here are the additional damages.

[00:03:18] Speaker 05:
Again, nominal damages.

[00:03:21] Speaker 06:
Well, I'm having a little trouble figuring out what this case is really about.

[00:03:26] Speaker 05:
Well, our contention would be, again, the four issues that I raised in my introduction, the first of them.

[00:03:30] Speaker 06:
The first of which is undisputed, and we spent a lot of time talking about something that doesn't appear to be disputed.

[00:03:35] Speaker 06:
What is disputed?

[00:03:37] Speaker 05:
What is disputed is whether or not the union can, in fact, waive Mr. Crane's constitutional rights to free association and to free speech.

[00:03:44] Speaker 06:
What says is that it did.

[00:03:46] Speaker 06:
There's not a fight anymore about his ability to cut off the dues.

[00:03:50] Speaker 06:
There was a delay in accomplishing that.

[00:03:53] Speaker 06:
He's been refunded with interest for that.

[00:03:56] Speaker 06:
I'm having a little trouble finding out what this is really about.

[00:03:59] Speaker 05:
Well, Mr. Crane would contend that he does have a damages claim and has a right to nominal damages.

[00:04:05] Speaker 06:
Nominal damages.

[00:04:06] Speaker 06:
Is there any actual injury we're talking about here?

[00:04:08] Speaker 05:
That would be a fact that we would think would have to be determined at trial, Your Honor.

[00:04:11] Speaker 06:
Is there any actual injury that we're talking about here?

[00:04:14] Speaker 05:
Yes.

[00:04:14] Speaker 05:
Injuries to his free association rights pursuant to the Abboud case from 1977, the Hudson case from 1986, and the Knox case from 2012.

[00:04:23] Speaker 06:
Each of those Supreme Court presidents specifically addressed... Which is not disputed here, so I'm having a little trouble seeing if there's anything really

[00:04:31] Speaker 06:
at issue at this case, and increasingly the answer appears to be there's no real injury we're talking about here.

[00:04:37] Speaker 06:
He wants to get a declaration that he was right, but nobody's disputing that anymore, and he's been refunded the money.

[00:04:45] Speaker 06:
So what are we taking everybody's time for at this point?

[00:04:49] Speaker 05:
Because Mr. Crane, his contention would be that he suffered concrete constitutional injuries to his constitutional rights, Your Honor.

[00:04:55] Speaker 05:
when he attempted to exercise his First Amendment rights pursuant to the Janus case.

[00:05:00] Speaker 04:
I'm wondering why this case isn't controlled by our decisions in rights.

[00:05:04] Speaker 04:
and in Belgao.

[00:05:05] Speaker 04:
So why don't you tell me why this case is different?

[00:05:08] Speaker 05:
Certainly.

[00:05:08] Speaker 05:
The Belgao case specifically addressed whether or not someone had agreed to a certain contractual term of dues deductions for a given period of time.

[00:05:16] Speaker 05:
The plaintiffs in Belgao had, in fact, done that.

[00:05:19] Speaker 05:
And so the court's analysis was focused specifically on a conflict over a card.

[00:05:23] Speaker 05:
Specifically, the issue in Belgao was they're trying to use constitutional claims, the Janus case to, as the court phrased it or put it into effect,

[00:05:32] Speaker 05:
to get out of their contract.

[00:05:34] Speaker 05:
Can you raise First Amendment claims to get out of a contract?

[00:05:36] Speaker 05:
And the court, in fact, found that they could not.

[00:05:39] Speaker 05:
In this case, there is no issue over contract.

[00:05:41] Speaker 05:
None of the parties here are disputing that Mr. Crane had the right, the unfettered right, to end his association and his dues deduction at any time.

[00:05:49] Speaker 05:
The issue is the deductions and the association both continuing past that point pursuant to authority the state has given the union to control that.

[00:05:58] Speaker 05:
As far as the Wright case is concerned, in Wright, you had a specific issue of an allegation of a misuse of state law.

[00:06:04] Speaker 05:
And so the plaintiffs in Wright had alleged specifically that there was a forgery involved.

[00:06:09] Speaker 05:
And the court had found in Wright that because they had alleged a misuse of state law and illegal conduct, that could not be pursuant to a state policy under the Lugar test for state action for private entities.

[00:06:19] Speaker 05:
Neither one of those contentions are part of this case.

[00:06:22] Speaker 05:
Our contention is that the statute, in fact, allows this behavior.

[00:06:26] Speaker 05:
Section 1983 provides protection to persons wronged by the misuse of state law.

[00:06:30] Speaker 02:
Any portion of the California statutory scheme here discretionary?

[00:06:36] Speaker 05:
We did make an argument that it is discretionary, Your Honor, but even if it's not discretionary.

[00:06:40] Speaker 02:
What language in the statute establishes that?

[00:06:43] Speaker 05:
The discretionary portion?

[00:06:45] Speaker 05:
Yeah.

[00:06:47] Speaker 05:
The first part, I believe it's 1157.12a, says that those individuals with those municipalities who provide for payroll deductions, so there is discretionary, potential discretionary language as part of that.

[00:07:03] Speaker 02:
Where is the potentially discretionary language?

[00:07:04] Speaker 05:
Well, even if the government is simply following what the statute says, even if your honor is correct that the government is simply following what the statute says, the point is that it is the union rather than the individual employee who has been tasked with deciding from whose paycheck money will be taken.

[00:07:21] Speaker 05:
So the Giannis case says that in order for an employee to have waived their First Amendment rights to refuse to subsidize a union's political speech,

[00:07:28] Speaker 05:
That employee has to take some affirmative action to make that happen.

[00:07:31] Speaker 02:
Are you conceding here today that the statutory language does not actually give any discretion to the government?

[00:07:39] Speaker 05:
I don't think it gives discretion to the government, no, Your Honor, but I don't think, again, that that is really the purpose here, though, or the main point behind this.

[00:07:47] Speaker 05:
that the union would not have had a right to access even a single penny of Michael Crane's lawful Leonard wages had it not been for the statutory system set up by the government.

[00:07:56] Speaker 05:
And so when we look at what the actual requirements are for state action under section 1983, it's a two-pronged test, the Lugar test.

[00:08:03] Speaker 05:
The first one is the state policy requirement in which the court asked, was the deprivation alleged caused by the exercise of some right or privilege given by the state to the private entity?

[00:08:13] Speaker 05:
And here we have two statutory bases that we allege.

[00:08:15] Speaker 05:
The Myers-Millius Brown Act, which allows for collective bargaining in California, under which the collective bargaining agreement between the union and the county was entered into in this case.

[00:08:25] Speaker 05:
Under which the county affected a discretionary policy, the window period.

[00:08:28] Speaker 05:
It's not compelled by state law, that was selected by the county freely discretionary.

[00:08:33] Speaker 05:
and 1157.12, under which the deductions continued.

[00:08:37] Speaker 05:
Both of these statutory bases should be sufficient to find state action, in this case, on behalf of the union.

[00:08:43] Speaker 05:
But for the statutory rights given by the state to the union, they would not have been able to continue their conduct injuring Crane's constitutional rights.

[00:08:51] Speaker 05:
As far as Lugar Prong II is concerned, the so-called state characterization requirement focuses on whether the private party may be appropriately characterized as a state actor.

[00:09:01] Speaker 05:
The question here is, has the government facilitated in some way the conduct that's being alleged here?

[00:09:07] Speaker 05:
And again, the key point is that the statutes in place in California make this entire system possible, specifically the union being able to access a government-created and functioned payroll deduction system.

[00:09:19] Speaker 05:
But for the statutes, this private entity would not be able to simply access a state employee's or a mutual employee's privately earned wages.

[00:09:27] Speaker 05:
So the statutory system makes that possible.

[00:09:30] Speaker 05:
I wanted to backtrack just for a moment, because I referenced the Myers-Millius Brown Act.

[00:09:34] Speaker 04:
And I just want to call your attention to the time, because I know you wanted to save two minutes for rebuttal.

[00:09:38] Speaker 04:
You're down to about one.

[00:09:40] Speaker 05:
Well, I can reserve the remainder of my time, Your Honor.

[00:09:43] Speaker 05:
OK, thank you.

[00:09:44] Speaker 05:
Appreciate it.

[00:09:56] Speaker 04:
OK, Ms.

[00:09:56] Speaker 04:
Alizar.

[00:10:04] Speaker 01:
Good morning, Your Honours.

[00:10:05] Speaker 01:
I'm Christine Salazar and I represent ASME Local 119.

[00:10:11] Speaker 01:
This case is controlled by Belgao Wright and Ochoa.

[00:10:15] Speaker 01:
California law only allows for the deduction of union dues from

[00:10:20] Speaker 01:
that are authorized.

[00:10:22] Speaker 01:
Here, plaintiff alleges that the deductions at issue were not authorized because he had properly revoked his authorization.

[00:10:30] Speaker 01:
If the allegations of the complaint are correct, then the union engaged in unilateral misconduct that violated state law and for which state law provides a remedy.

[00:10:40] Speaker 01:
As this court held in right, such unilateral misconduct is not state action.

[00:10:46] Speaker 01:
And as this court held in Ochoa, the proper way to address any injury based on this alleged misconduct is by pursuing a state law claim against the union, not a federal constitutional claim.

[00:10:59] Speaker 01:
Does Janus affect the state action analysis here in any way?

[00:11:03] Speaker 01:
No, this case is the same issue that was at issue in Wright.

[00:11:08] Speaker 01:
Plaintiff is simply incorrect that the union was following state law.

[00:11:12] Speaker 01:
The union's actions, as alleged, would be in violation of state law, just as the union's actions in Wright would have been in violation of state law.

[00:11:22] Speaker 06:
Wright came after Janice, didn't it?

[00:11:24] Speaker 01:
Yes.

[00:11:32] Speaker 01:
As I said, plaintiff's arguments in this appeal are fundamentally based on misstatements of California law.

[00:11:41] Speaker 01:
Plaintiff is simply incorrect that California law permits the union to represent that a worker has authorized deductions when the worker has not authorized deductions.

[00:11:50] Speaker 01:
In fact, California law explicitly makes it unlawful for a public employer or a union to interfere

[00:11:59] Speaker 01:
or coerce an employee's right to refuse to join or participate in the activities of a union.

[00:12:07] Speaker 01:
And indeed, California's state labor board has held that it is an unfair labor practice in a case with fairly indistinguishable circumstances.

[00:12:18] Speaker 01:
And also, there was no allegation here that the government was ever aware of any issue with the deductions, which was something that was also considered as a relevant fact by the right court and by the Ochoa court.

[00:12:34] Speaker 01:
In right and numerous other decisions, this court has been careful to avoid turning the federal courts into substitutes for state labor boards and for state courts that are more than capable of dealing with the types of allegations that are presented here.

[00:12:47] Speaker 01:
The union respectfully urges this court to follow those decisions and leave matters to the state.

[00:12:53] Speaker 01:
And if there are no further questions about specific to the union's liability, I will turn things over to counsel for the county.

[00:12:59] Speaker 01:
Thank you.

[00:13:09] Speaker 03:
Good morning.

[00:13:10] Speaker 03:
May it please the court.

[00:13:10] Speaker 03:
David Urban for the County of Los Angeles.

[00:13:14] Speaker 03:
None of the defendants are liable in this case for perspective or retrospective relief.

[00:13:18] Speaker 03:
I'd like to discuss mainly the county issues here.

[00:13:23] Speaker 03:
First, there's two main considerations to go into with the county.

[00:13:26] Speaker 03:
Is there a now liability?

[00:13:28] Speaker 03:
Is there a choice that was made that was a policy decision that would render the county liable under Section 1983?

[00:13:34] Speaker 03:
And second, even if there is such a policy decision, was there causation?

[00:13:39] Speaker 03:
Neither of these elements are satisfied for the county.

[00:13:42] Speaker 03:
The county did nothing to continue the deductions of Mr. Crane.

[00:13:47] Speaker 03:
It never heard of Mr. Crane's objections to being a union member or to the deductions until this lawsuit was filed.

[00:13:54] Speaker 03:
even if it had the state law, which is mandatory, would have required the county to go to the union to find out whether there was a legitimate dispute of membership and whether the deduction should be stopped.

[00:14:06] Speaker 03:
And we did just hear plaintiff's counsel concede that there's nothing discretionary about 1157.12 of the government code.

[00:14:16] Speaker 03:
One of plaintiff's main arguments is that the MOU window, that you can only stop your deductions as an employee in September, is a monel decision, and that there's causation.

[00:14:28] Speaker 03:
The problem with that argument, as the district court pointed out, is that the MOU had expired, pursuant to the plaintiff's allegations.

[00:14:35] Speaker 03:
In the district court, their position was that provision expired.

[00:14:38] Speaker 03:
Accordingly, there is no way there could be causation from it.

[00:14:42] Speaker 03:
They went a little bit further.

[00:14:44] Speaker 03:
as well, and said that even if the collective bargaining agreement continued under the MMBA, that particular provision would have itself expired because it doesn't relate to wages, hours, and working conditions.

[00:14:56] Speaker 03:
That's excerpt of record, page 13, paragraph 49 of their complaint.

[00:15:01] Speaker 03:
Based on that,

[00:15:02] Speaker 03:
there is simply no liability.

[00:15:04] Speaker 03:
On appeal, they've argued, wait, this provision continued after that, and they've cited some case law to that effect.

[00:15:10] Speaker 03:
Even if that were the case, there's still no liability for the county because there's no causation.

[00:15:17] Speaker 03:
We didn't assert that provision and we were never called upon to do so.

[00:15:20] Speaker 03:
So I'd like to reserve the remainder of my time.

[00:15:24] Speaker 04:
Thank you.

[00:15:24] Speaker 03:
Thank you.

[00:15:33] Speaker 00:
Good morning, Your Honors.

[00:15:34] Speaker 00:
May it please the Court?

[00:15:35] Speaker 00:
Kristin Liska on behalf of the Attorney General.

[00:15:38] Speaker 00:
I will try to keep it brief, since I think the briefs do a lot of the discussion of the issues.

[00:15:43] Speaker 00:
I'll focus briefly on the claims asserted as against the Attorney General, just briefly as our papers discuss.

[00:15:49] Speaker 00:
With respect to the injunctive relief claims, those are all moots at this point in time.

[00:15:53] Speaker 00:
And I believe that that's pretty much covered and disposed of by this Court's decision in right.

[00:15:58] Speaker 00:
With respect to the nominal damages claims,

[00:16:00] Speaker 00:
that those, as to the attorney general, those are barred by the state sovereign immunity, as with all damages claims.

[00:16:07] Speaker 00:
The court addressed that issue or stated as such in the Platt decision, and it's applied that holding in Platt in other union-duce matters, albeit in unpublished decisions as in the Savas case.

[00:16:19] Speaker 00:
And to the extent that nothing is moot, the constitutionality of the underlying state statutes are disposed of by the decisions in Belgao and Ochoa, since they need a

[00:16:29] Speaker 00:
written authorization in order for these deductions to occur, any deductions would be consensual, and any unconsensual deductions, as the union councils discussed, would violate the statute.

[00:16:39] Speaker 00:
So we would request the court affirm.

[00:16:41] Speaker 00:
If you have any questions, I'm happy to answer.

[00:16:43] Speaker 00:
If not, I'm happy to yield my time back.

[00:16:45] Speaker 04:
Thank you very much.

[00:16:46] Speaker 00:
Thank you.

[00:16:50] Speaker 04:
Okay.

[00:16:51] Speaker 04:
Mr. Snowball, you have just over a minute.

[00:16:57] Speaker 05:
Thank you again, Your Honors.

[00:16:58] Speaker 05:
I'll make this brief as I can.

[00:17:00] Speaker 05:
We would ask the court to assess, in looking at the plaintiff's claims, our three basic points.

[00:17:09] Speaker 05:
Does Crane have the right of free association to disassociate from the union at any time, and does he have the right against compelled speech from the union?

[00:17:16] Speaker 05:
I don't think anyone contends that he doesn't.

[00:17:18] Speaker 05:
I think the answer is yes.

[00:17:21] Speaker 05:
Did the statutes allow him to be compelled?

[00:17:23] Speaker 05:
Our contention, again, we have a different reading, 1157.12 than the defense counsel in this case, in the Myers-Millius Brown Act.

[00:17:30] Speaker 05:
Our contention based on 40 years of Supreme Court precedent, going all the way back to the Abboud case, up until 2018 in the Janus case, in addition to other cases from your sister circuits, would the contention would be that, in fact, there is state action here and his injuries can be traceable directly to the statutory authority.

[00:17:49] Speaker 05:
In regard to the policy for the county,

[00:17:52] Speaker 05:
The window period didn't float down from heaven and land in the contract between the county and the union.

[00:17:57] Speaker 05:
The county was fully authorized to negotiate and to enter into that contract with the window provision, which was enforced against Mr. Crane.

[00:18:04] Speaker 05:
For those reasons, we would ask you to overturn the district court.

[00:18:07] Speaker 05:
Thank you.

[00:18:08] Speaker 04:
We thank counsel for their arguments this morning.

[00:18:10] Speaker 04:
This matter is submitted.