TEACHERS v. HUDSON

Transcript: 

ORAL ARGUMENT OF LAURENCE A. GOLD, ESQ. ON BEHALF OF THE PETITIONERS

Chief Justice Burger: We will hear arguments first this morning in Chicago Teachers Union against Hudson.

Mr. Gold, you may proceed whenever you're ready.

Mr. Gold: Thank you, Mr. Chief Justice, and may it please the Court.

This case concerns the validity of a system for effectuating an agency shop agreement, such agreements as the litigation to this point in this Court shows are those that provide that, where a majority of an appropriate collective bargaining unit has selected an exclusive bargaining representative, all the employees within the bargaining unit are required to pay a sum equal to a percentage of union dues.

The litigation in this Court to this point demonstrates that the requirement of support of all of the employees for the representative is constitutionally appropriate so long as the union uses the money of individuals who file objections only for matters relating to collective bargaining and attendant activities.

And in the Ellis v. Railway Clerks case in 1984, the Court began the process, at least under the Railway Labor Act, of specifying which of the union's costs are chargeable to such objectors and which are not.

In this case, the Seventh Circuit confined itself to a procedural issue, and indeed the Seventh Circuit remarked in its opinion that the plaintiffs below, the Respondents in this Court, had predicated their challenge on procedural due process issues.

The Seventh Circuit ruled that a system such as the one here, whereby the union calculates and, as the district court's uncontested findings state, carefully documents the portion of union dues that represents the... and here I quote the state statutory language...

"the cost of the collective bargaining process and contract administration. "

and provides an advance reduction from regular union dues based on that calculation, and that furthermore places the payments of objectors who pay in this reduced amount into an interest-bearing escrow account pending the objector's use of either an internal review proceeding within the union which ends before an arbitrator selected from a list maintained by the state by the union, or through judicial review, does not accord the objector due process of law.

In other words, the court held that, even though the union makes the calculation and provides an advanced reduction and backs up that advanced reduction by an interest-bearing escrow account into which is placed the money of objectors while they pursue their challenges to the union's calculation, the objector is not given due process of law.

Now--

Unidentified Justice: Would you say the Court of Appeals said that, even though the substantive result reached was right, there still was a procedural component that was separate from that?

Mr. Gold: --Yes, indeed, Justice Rehnquist.

The Seventh Circuit said that it needn't get into the substantive issue, that it could assume that the calculation was correct and that not a penny of the objector's money would be spent for an impermissible purpose, and nonetheless there would be a constitutional violation in this case.

Unidentified Justice: Well, Mr. Gold, I thought that the Court of Appeals did indicate, though, that some... give some opinion as to what could be included in the share that the employee would have to pay?

Mr. Gold: The Court of Appeals noted in passing that the objector's rights included not only a right not to pay for political and ideological activity, but also a right not to pay for any activity which is not germane to--

Unidentified Justice: That's pretty substantive, isn't it?

Mr. Gold: --It is substantive, but it isn't presented in this case, and the court indicated as much, because the state statute--

Unidentified Justice: Don't you think that was just gratuitous dicta?

Mr. Gold: --I would hate to use the word "gratuitous", but I certainly believe that the way the Seventh Circuit approached the case, it was dictum, not only because of what it--

Unidentified Justice: But some arbitrator, if this procedure holds, would probably follow it, wouldn't he?

Mr. Gold: --Hopefully, the arbitrator wouldn't be faced with that because the decision ought not and we hope will not--

Unidentified Justice: Be affirmed.

Mr. Gold: --hold.

But the Seventh Circuit's position as it articulated it is that a procedure with the safeguards I've just outlined nonetheless works a deprivation of the objector's liberty interest, which that court noted are taken to or determined by the objector's right of non-association.

And it is our position that that ruling of the Seventh Circuit is erroneous, that it is contrary to the method of approach this Court stated in Abood versus the Detroit Federation of Teachers in 431 U.S., which is the other public sector agency shop case in this Court, and flatly contrary to what the Court had to say in Ellis versus Railway Clerks, a 1984 decision, albeit one arising under the Railway Labor Act.

In determining what due process is required in this case, and as I think the Court of Appeals recognized, the beginning point has to be the nature of the objector's liberty interest, the nature of his right of non-association.

And this Court has spoken to the nature of that interest and that right in the Abood case.

And in Abood... and this was foreshadowed in earlier cases as well... the Court defined the objector's interest and his right as not being required to provide compulsory subsidization of union ideological and political activity not related to collective bargaining.

And the Court has at every point phrased its holdings as being that the First Amendment does limit the uses to which the union can put funds obtained from dissenting employees.

That was the phrase used in the most recent case, in the Ellis case.

And the Court throughout has made it plain that the union shop and the agency shop concepts themselves are constitutional and that, as the Court put it in one of the earliest cases, that the mere collection of an amount equal to or a proportion of union dues does not work any unconstitutional deprivation of the objector's rights, that because of the weighty interests of the Government in industrial peace and the governmental determination that equal support of all employees in the bargaining unit of the exclusive representative, insofar as the exclusive representative is engaging in activities that are related to or germane to its functions as an exclusive representative--

Unidentified Justice: Mr. Gold, may I inquire of you.

I suppose the Court has recognized a First Amendment interest in non-members for use of their money for political purposes.

And normally we would approach the problem by saying that there can be a burden placed on them, all right.

They'll have to contribute, but it should be by the least burdensome method.

Now, would it be a less burdensome method here to have an independent determination ahead of time of the amount that should be withheld, as opposed to the method used here, which is placing it in escrow and then giving the non-member a right to challenge it later?

Would it be in your view possibly less burdensome if there were some mechanism for an independent determination ahead of time?

Mr. Gold: --That approach would be less burdensome on the individual, but--

Unidentified Justice: On the First Amendment right.

Mr. Gold: --I don't believe that it is fair to say that it would be less burdensome on the First Amendment right than the escrow system, because the First Amendment right is the right not to subsidize a First Amendment activity with which one disagrees.

There is another aspect to this case, albeit one not treated below, which the Respondents' brief is devoted to, namely a claim that there's a burden on the individual's property right, the right to uncontrolled dominion of the $16 and I think it's 84 cents per month that is in issue here.

But I don't think that the requirement that the individual paid the money into escrow can properly be said to be a burden on that individual's First Amendment rights.

The burden comes if the individual's money is appropriated to the union's activities.

Unidentified Justice: Well, exactly.

And so perhaps an independent determination at the outset of what amount ought to be withheld is the most effective way and the least burdensome way of meeting that obligation.

Mr. Gold: It isn't... in our view--

Unidentified Justice: There would still be the question of whether the individual has to pay anything while that determination goes on.

And if he has to pay anything, what would it be?

If he pays the full amount that the union tells him to pay, you haven't solved a great deal.

Mr. Gold: --You've solved several different--

Unidentified Justice: Not pending the decision as to how much you should pay.

Mr. Gold: --Justice White, you've solved several interests.

The Government's interest is that everybody in the bargaining unit pay the amount required by the union month-in, month-out, to meet its collective bargaining and representational responsibilities.

If there has to be a determination before the individual pays anything in--

Unidentified Justice: Anything at all?

Mr. Gold: --Yes.

If that is the requirement, then all the governmental interests are heavily and adversely impacted during the time the determination--

Unidentified Justice: And the union's interests.

Mr. Gold: --That's right.

And it is... the governmental interest is to permit the union to fulfil the functions in the industrial relations system that the Government has laid out.

So if the individual, simply by making an objection, can trigger a prior hearing, then all the interests on the other side of the equation are sacrificed.

Unidentified Justice: And you may never be able to recover it, because you may not be able to go back, go back and collect what you--

Mr. Gold: That's right, and that's why, as I was going to note, in Abood the Court said that the proper approach here was to prevent compulsory subsidization of ideological activity by employees who object thereto, while not restricting the union's ability to require every employee to contribute to the costs of collective bargaining activities.

And in furtherance--

Unidentified Justice: --Let me just ask at this point, doesn't the escrow, which you seem to be satisfied with, doesn't that also frustrate the governmental interest during the period required to make the determination?

Mr. Gold: --It does in part.

In the conclusion of our brief, we note that at least an approach where there is a prior calculation and once there is experience, an escrow of a limited amount based on the experience, one that will give a cushion, while permitting the union to use the money, the percentage of money, that in past years had been devoted to properly chargeable activities, strikes the best balance between the competing First Amendment rights on both sides of the equation and the Government interest.

Unidentified Justice: Do you agree that the objector has the constitutional right to have the determination of the fair, whatever the allocation may be, at some point be made by an independent decisionmaker?

Mr. Gold: We do.

Unidentified Justice: But you take the position that that could be just the state judicial system that if you put everything in escrow and then waited whatever time it takes the Illinois courts to decide the case, that would be--

Mr. Gold: Yes, that here, as in any other area that I know of where someone is making a First Amendment claim, if the states... if the state provides an access to the judicial system--

Unidentified Justice: --Say the Illinois courts take five or six years to run the route of going through the circuit court, the court of appeals, and all the rest, and all the money sits in escrow for six years.

Every year you have to do this.

Would that still be constitutional?

Mr. Gold: --As the district court pointed out, at the beginning of the process there is going to be some fair room for dispute about whether this category is chargeable or another category is not.

Thereafter, the likelihood of the type of protracted proceeding you're talking about is at least less likely.

But I do have to point out that if the money is in escrow or if any substantial part of it is in escrow, both sides are paying a price.

The majority has First Amendment rights, too.

There are governmental interests quite aside from those First Amendment rights on the majority's side.

While the money is sitting in escrow, those rights are being limited in the same way that the objector's rights are.

Unidentified Justice: Would you say that system would be constitutionally sufficient even if the union provided no internal mechanism whatsoever for review, if they just off the top of their heads said, we'll take 98 percent this year, we won't have any review, you just have to sue us in court and we'll hold all the money in escrow?

Is there any constitutional obligation to do anything except respond to litigation and hold money in escrow?

Mr. Gold: I would think that so long as the union on objection holds the money in escrow, both the objector's liberty interests and the objector's property interests are fairly protected.

Let me say in that regard that we are not dealing here with the situation in which the state says to the union, you can take from the individual whatever amount strikes you.

The state has placed a limit on what the union can seek, both by saying that it cannot be more than the union dues and by setting out a definition of what it is, what type of costs there are that the union can charge the objector for.

In those terms, you have the state limiting in very sharp degree the area that is open to fair dispute, and that area, as the district court pointed out, will continue to narrow once we know more about what the nature of the law is here.

Unidentified Justice: Mr. Gold, at the beginning of this the question that the Justice gave you said that you pulled this off the top of your head, and you agreed to that, do you?

Mr. Gold: No, I was going to finish my answer, and I thank you, Justice Marshall.

I was going to say that, if an objector sued and was able to prove that the union in Illinois made no effort to limit the amount sought to that which the statute permits, namely the proportionate share based on the cost of the collective bargaining process and contract administration... that's the state's statutory standard.

If an objector proved that, I would think that he would be entitled to an injunction against the collection of some or all of what was being sought.

The union's obligation is to seek and to certify, as it did here, to the employer making the deduction no more than the state permits.

The reason that a union that does that is not violating any of the due process rights of the individual, at least so long as the union's calculation is backed up by a reasonable escrow--

Unidentified Justice: Mr. Gold.

Mr. Gold: --Yes.

Unidentified Justice: Excuse me for interrupting, but it would help me if you would clarify a response you made to Justice Stevens, that you agreed that there must be an independent determination of an issue that may be raised by a non-union member as to the use of his or her dues.

What is the present independent agent to which the non-member could take his or her complaint?

Mr. Gold: The courts of the state of Illinois.

Unidentified Justice: But there's nothing... well, I suppose they could go to arbitration and grievance procedure, but you don't suggest that's independent?

Mr. Gold: I'm not arguing here that the union's internal system is one which can replace the individual's right to go to court.

Unidentified Justice: Would there be any duty to exhaust that possible remedy before going to court?

Mr. Gold: That would seem to us to be in the first instance a question of state law.

There are sound arguments, at least so long as the union's process is expeditious... and the district court noted here that it can move in 75 days... there are sound considerations that might lead the state court to say that the case will be more rationally litigated if this process has been used.

Unidentified Justice: Well, what if the Illinois courts give the same sort of deference to an arbitrator's decision that the federal courts under the Labor Act do?

Would that still amount to access to a judicial officer for purposes of your answer?

Mr. Gold: I would have to say that I think a substantial question would be raised if the objectors could not get a de novo determination, at least on the category questions, namely what categories of union activity is chargeable.

And we make it plain that we believe that objectors do have that right.

The issue here is really whether the rights that the objector has, given the nature of this liberty interest, which is not to subsidize and which is protected by the escrow feature and the right not to have property taken without due process, which we think is protected by the limit, the outer limit that the state puts on the amount that can be taken, and which, when you run through the Eldridge test, shows that there is no denial of--

Unidentified Justice: Of course, the state's outer limit isn't much of a limit.

It's 100 percent of union dues, and by hypothesis some of that percentage is used for non-union purposes.

Mr. Gold: --No, I don't believe that by hypothesis some of it is used for non-collective bargaining purposes.

Each union differs in the way it approaches its task.

This union, for example, has a completely separate voluntary fund from which it pays for all--

Unidentified Justice: Oh, I see.

Mr. Gold: --political activities.

Unidentified Justice: Right, I see.

Mr. Gold: And the union has no organizing expenses because it has one employer and that's the only employer it deals with.

Unidentified Justice: Well, Mr. Gold, how do you differ with what the Court of Appeals held?

Mr. Gold: We differ with the Court of Appeals in validating this system, which provides every protection that this Court in Ellis said is required.

Unidentified Justice: What did it invalidate?

Mr. Gold: It invalidated a system whereby the union makes this initial calculation and certification and provides escrow, a union escrow system.

It said that's not good enough.

Unidentified Justice: But didn't the union just put in the escrow arrangement after the case started?

Mr. Gold: It did indeed, but--

Unidentified Justice: But did the Court of Appeals invalidate that?

Mr. Gold: --Yes.

Unidentified Justice: But it didn't give it much attention?

Mr. Gold: Well, no, it said it wasn't... we don't believe that the escrow system changes our conclusion, it said.

It said the escrow system was insufficient because it was under the union's control and the union created it.

Unidentified Justice: But you don't... you wouldn't say that... did you answer Justice Stevens that you think the escrow arrangement is constitutionally required?

Mr. Gold: I answered Justice Stevens by saying that where the union makes a prior calculation that it is our judgment that some cushion has to be provided to take care of the eventualities of what the union is actually going to do.

Unidentified Justice: Well, that may be so, but suppose the union purported to establish a cushion.

Do you think that there has to be an escrow arrangement to make it constitutional?

Mr. Gold: No.

It seems to us that in Ellis this Court said that there are two different alternatives.

Unidentified Justice: That's right.

Mr. Gold: All we're saying is that we approach... this union approached this matter in a suspenders and belt style.

It has both a prior reduction and an escrow.

Unidentified Justice: But as I understand you, maybe I'm wrong, Mr. Gold, but I think you in effect have not challenged the analysis of the Court of Appeals if there were no escrow agreement.

It seems to me you have more or less assumed there must be either an independent decisionmaker or an escrow if the objector's money is to be used pending the determination of how much should be used.

Say we had no escrow in this case.

Would you still challenge the Court of Appeals' analysis then?

Mr. Gold: If there were no escrow arrangement and all there was was the union's initial sole determination of the amount due without any background of prior experience or prior decisions, we wouldn't challenge the Court of Appeals' determination.

But this is a first... I want to emphasize in answering that this is a first, what I would call and what the district court called a first year case, a case where there isn't prior experience.

Unidentified Justice: Well, I understand that the practicality, I suppose, is because of the problem of collecting from people who don't pay their share, is that you have to make the 95 percent.

You have to have a figure that you're going to be reasonably sure you're going to get your money from the objectors.

Mr. Gold: Well, that's right.

The governmental interests here are that if you don't... and the union interests the... that if you don't get the money month-in, month-out, in the same way you're getting it from members, A, all the friction created by the free rider syndrome, which is what the Government is seeking to alleviate, continues month-in and month-out; and secondly, all the costs of collection are increased enormously, particularly if the individual leaves or if you have to sue to get a big chunk of money way after the fact.

Unidentified Justice: All of which... I don't mean to retrace ground, but all of which comes back to a question Justice O'Connor asked earlier.

Not only might it be in the objector's interest, but it may also be in the union's interest to have an independent audit or whatever you want to call it as early as possible.

Mr. Gold: Well, I don't think that anybody looking at this from the union perspective is interested in delay.

The question is whether the individual can say I object and by doing so set a train in motion whereby he doesn't pay at all for weeks, months, or years.

And we say nothing in the Constitution, no interest that the individual has, can possibly justify that.

Chief Justice Burger: Mr. Vieira.

ORAL ARGUMENT OF EDWIN VIEIRA, JR. ON BEHALF OF RESPONDENTS

Mr. Vieira: Thank you, Mr. Chief Justice, and may it please the Court:

I came here and I remain somewhat perplexed in attempting to determine for myself what the utility is of viewing this case as a First Amendment case that involves the uses of fees that a union is collecting.

We're not dealing at this stage with uses, except in an abstract definitional sense that they are entitled to money only that will be eventually used for collective bargaining.

And no money here has been used because, as Justice White suggested a moment ago, during the course of litigation the union introduced an escrow procedure where it segregated the moneys in a separate account.

So all of this First Amendment analysis and discussion of Abood and such cases seemed to me to be beside the point.

Unidentified Justice: Well, the Court of Appeals didn't think it was beside the point.

Mr. Vieira: Well, I think the Court of Appeals has--

Unidentified Justice: Well, are you defending the Court of Appeals' opinion or not?

Mr. Vieira: --Yes, Your Honor.

But I think they--

Unidentified Justice: Are you?

Mr. Vieira: --Yes, Your Honor.

They've needlessly complicated this problem, and let me explain why.

I'll take a minute to explain why.

Unidentified Justice: Do you defend needless complications?

Mr. Vieira: Well, I wasn't responsible for writing the opinion.

Unidentified Justice: Sometimes judges talk too much?

Mr. Vieira: Well, it seems to me this case would have been approached simply by saying, money is being taken for legitimate purpose; is the procedure involved in the taking constitutional?

What does the Seventh Circuit tell us?

It says, well, there's a liberty interest involved in the taking of this money because the money will be used by a union and therefore it arguably infringes freedom of association to take it, but that liberty interest is not unconstitutionally infringed, per Abood.

Fine.

You can deprive a person of liberty and of property and even of his life, if you give him due process of law.

That's the question: Is this money that eventually causes a justifiable infringement on freedom of association being taken with due process of law?

And I think the very simple answer... and that's why I'm perplexed... the very simple answer is there is no constitutional procedure in this case.

There's no procedure that meets any standard, it seems to me, that this Court has ever suggested is applicable, except in some extraordinary emergency situations, which we do not have here.

Unidentified Justice: Even if... and I take it then we should just... you suggest we just analyze it as a property case?

Mr. Vieira: Well, I think you can do that without ever getting into any--

Unidentified Justice: Well, you say the First Amendment issues are all beside the point, so it's a property case.

Well, then you certainly don't need a neutral decisionmaker to make the decisions if it's just a property case, I would think.

Mr. Vieira: --Well, I think you need the neutral decisionmaker.

You need the governmental decisionmaker to justify the taking.

It's the Government that's taking his money.

It's the Board of Education that's deducting these fees from the salaries of the employees simply on the say-so of the union.

And I think before that step is taken, some decisionmaker has to have some type of factual presentation at least at the level of probable cause, at least at the level of rationality, to suggest that this figure that's being given has some connection with the reality of the collective bargaining activities of the union.

Now, in the first year, I agree with Mr. Gold, it's a more difficult problem because we don't know precisely what the union is doing.

In fact, in this case we don't know anything about what the union is doing.

Unidentified Justice: Well, Mr. Vieira, I have a difficult time understanding how there could be a due process issue here that's independent of the First Amendment concern.

And it would certainly seem to me that whatever procedures are required for determining the amount to be withheld are required by the First Amendment itself and not the due process clause.

I really don't understand your analysis at all.

Mr. Vieira: Well, the First Amendment comes into this, Justice O'Connor, if we look at the use.

That is, we obviously want to prevent the union from getting control of the money to expend that money until we determine that that money will be spent only on First Amendment allowed activity.

We never want the union to obtain control of any money--

Unidentified Justice: That's the whole underlying purpose of the protections in the scheme that we're reviewing.

So it's a little hard to separate it out.

Mr. Vieira: --But what I'm saying is I don't think that that question would be relevant to the taking issue.

That is, if this money were being taken to pay some other debt that these people owed the union, not a payment that implicated associational interests, we'd still be worried about the collection procedure.

We're going to be worried about this collection procedure in any kind of a creditor-debtor framework.

There's a secondary problem that not only are we worried about the initial taking, but we're also worried about the transfer to the union.

Now, what I'm saying in this case is the union has precluded any difficulty with the use question through an escrow, and I think a procedure... and now we're talking about a procedure that the state will have to devise.

I don't think it's for this Court to tell us what that procedure should be in every permutation and combination.

It's for the state also to devise a procedure whereby the union does not obtain possession, is not allowed to use that money, until there's a final determination that precludes First Amendment violations.

But what I'm getting at here is, at this stage of the case we have a procedural due process problem pure and simple because the taking is effective without any submission to any governmental agency of a rational basis that the figure the union gives has some connection with its real collective bargaining costs.

What they do is they take the union dues, an arbitrary figure, no necessary connection with the collective bargaining there, they subtract what they admit they're not entitled to have, and they say: Aha, the answer is collective bargaining costs.

That's not rational on its face.

Unidentified Justice: You, I take it you are saying that you must have a prior hearing or some prior participation in the procedure before they could take a nickel?

Mr. Vieira: I think there has to be some pre-taking process.

Now, we use the word "hearing".

That word is used in the brief, but I think it's used in an extensive sense.

Unidentified Justice: I suppose you would say that, until that... until you have exhausted all of your rights, they can't take a nickel.

If you wanted to take it to court, you could keep them from taking a nickel from you until the court procedures are through?

Mr. Vieira: No, in theory not necessarily, Your Honor.

Unidentified Justice: Well, not necessarily.

I would suppose that that must be the logical bottom line for you.

Mr. Vieira: No, I don't think so, Your Honor.

I mean, look at a case--

Unidentified Justice: Well, they have some internal union procedures in which non-consenting employees can participate and those procedures are exhausted, and you just disagree wholly with whatever the decision is.

Mr. Vieira: --Oh, I don't think these employees can be required to exhaust any internal union procedures whatsoever.

I don't think the union procedures have anything to do with this case.

The union is coming to the Government saying: Take these people's property, we have a claim of right to it; we're not going to tell you the factual basis for that claim; we're going to give you some non-rational facts over here that have nothing whatsoever to do with the final figure.

Unidentified Justice: Well, then you say that you should be able to go to court and have, pending trial, you should have an injunction against collecting any money?

Mr. Vieira: Well, I don't think in this case that it's the burden on the employee to have to initiate a court suit.

I think that the procedure that should be followed in broad outline is that the union should be required to come to some agency of the state... not saying it's a court; it could be an administrative agency, a labor board, what have you; we just don't have a procedure down there in Illinois... come to some agency of the state with some certifiable facts as to what the collective bargaining costs are.

At that stage, if that agency determines as a factual matter that there's a need for these collections prior to a final judicial determination, prior to the exhaustion of all of the legal remedies, fine.

We don't have any determination of that at this stage.

We don't have any submission of any rational--

Unidentified Justice: And until that agency decided, they couldn't collect anything?

Mr. Vieira: --That's right.

But I think that that could be done relatively quickly.

Certainly in later years it could be, after that agency had had some experience dealing with this particular union or other particular unions as to what their cost structure was, their organizational structure was.

Unidentified Justice: You're really opposed to paying dues at all, aren't you?

Mr. Vieira: Excuse me, Your Honor?

Unidentified Justice: Your clients are really opposed to paying dues at all?

Mr. Vieira: Well, I don't know particularly what the personal preference of my clients are, but they're required to pay these dues under Abood to the extent that the dues meet collective bargaining costs.

Unidentified Justice: Well, you said that the union should have to go to court before collecting any dues?

Mr. Vieira: Who should have to go, Your Honor?

Unidentified Justice: The union.

Mr. Vieira: Oh, no, no.

The union should have to come to some governmental agent.

Unidentified Justice: In order to collect dues?

Mr. Vieira: In order to begin this collection process.

Unidentified Justice: What's that?

Mr. Vieira: In order to begin this collection process, yes, they should have to--

Unidentified Justice: In order to collect all dues?

All dues or some dues?

Mr. Vieira: --To collect the fee to which they're entitled under this statute.

They don't have to go to an agency to collect dues from their own members.

Unidentified Justice: That's what I thought you were saying.

Mr. Vieira: No, not from their own members, only from their non-members.

Unidentified Justice: Mr. Vieira, supposing they went to the state legislature in springfield and said, we have an expense... a free rider problem, we have an expense of representing non-members as well as members, and we can demonstrate to the legislature that substantially all of the dues is required for this duty, an amount roughly equal to that, and the legislature, say it made an express finding... they didn't here... that we think generally speaking the dues is a fair summary of what the costs are involved, so we'll make an initial payment of dues, and that's just your contribution, subject to some right to recoup if it's misspent in some way.

Why can't the state legislature be the very agency that you're saying has to play a part in that?

Mr. Vieira: Because I think that brings you into Justice O'Connor's problem.

I don't think the legislature can preclude discussion of the First Amendment question.

I don't think a legislature can determine--

Unidentified Justice: Well, now you go back to the First Amendment, and they say, yes, that's exactly right, and we'll hold the money in escrow until we resolve the First Amendment issues.

And supposing they, instead of having an internal procedure, they agree to an audit by Price Waterhouse or some independent auditing firm who is acceptable to your clients.

Mr. Vieira: --Who's the "they", Your Honor?

Unidentified Justice: The union, the union agreed with your clients that they would do it, and then they would refund the parts that--

Mr. Vieira: Well, I'm not sure what the statute is that you're proposing.

The legislature passes a statute--

Unidentified Justice: --The statute's already been passed.

It's on the books.

Mr. Vieira: --The statute says that the employer and the union can agree to an agency fee, the outer limit of which will be the dues.

It doesn't say that the dues will be--

Unidentified Justice: But doesn't that represent a legislative finding that substantially all of the dues probably are required for this purpose?

Mr. Vieira: --No, I think it represents a legislative finding that it would be rather ridiculous for the union to claim that it was spending more money on non-members than it was spending on members, in the extreme case.

Unidentified Justice: Well, supposing they had preceded the statute with a legislative finding at the committee hearings that said, we find, based on testimony before the legislature, that most of the dues... that dues fairly represents an approximation of what's needed for this purpose.

Mr. Vieira: 100 percent of the dues?

Not mostly, 100 percent of the dues?

Unidentified Justice: Yes, or 95 percent.

In the range of 80 to 90 percent is required.

Mr. Vieira: Every union, every year?

Unidentified Justice: Yes.

Mr. Vieira: Well, I'd say that would be non-rational.

I'd say you have a big First Amendment problem there.

That kind of a statute couldn't possibly stand up.

Unidentified Justice: Well, supposing after five or six years of the sort of hearings that you propose, in each of which it has come out that, in one year it was 89, the other year it was 91, the next year it was 90, so that you have a five or six-year experience that shows you're within a range of 90 percent, varying by only one or two percent, then could the legislature enact the sort of statute that Justice Stevens says?

Mr. Vieira: Well, it could, and I think that that statute would still be subject to judicial challenge on the facts.

Unidentified Justice: Well, what sort of challenge?

Was there evidence to support the conclusion that 90 percent is a fair--

Mr. Vieira: Well, in the particular year, for instance.

It could be in a particular year they didn't spend 90 percent.

Now, if you put that scenario into a procedural context, I can imagine a situation where, after three or four years, whatever this agency is that makes the initial determination had seen these figures... 89 percent, 90 percent, 91 percent, coming every year... there would be really no problem in it more or less mechanically allowing these collections of say 88 percent after some experience has been developed.

Unidentified Justice: --And why couldn't the legislature make the same judgment as the agency did?

Mr. Vieira: Well, I don't know how a legislature can make a judgment about the future.

Are you going to hold a legislative hearing every hearing every year to determine what the union does?

Unidentified Justice: No, but they can make the judgment that there's no reason that we think the future will be any different than the past, so there'll be at least a presumption that the same amount will obtain.

Mr. Vieira: All right.

Well, I'm willing to live with the presumption concept.

Unidentified Justice: Well, a presumption which would entitle the union to deduct that amount of dues.

Mr. Vieira: And put it where, in escrow?

Unidentified Justice: Put it in escrow.

Mr. Vieira: All right.

Well, when we see that kind of a statute passed we can discuss it.

But that's not what we have here.

Unidentified Justice: I thought we just were discussing--

Mr. Vieira: No, no.

I was saying if we had that type of a statute we would have a First Amendment problem if they let the union have that money.

There's no question about that.

I don't think that the legislature can foreclose the challenge to how the union is spending the money.

You're now posing the question, if the legislature says X percent of a union's dues is presumptively going to be the collective bargaining cost, subject to being held and to being challenged on the facts of a particular year, would that escrow be legitimate?

Well, I think if you have a legislative determination based on their finding of a necessity for that kind of a procedure, that is the taking of the money, it might very well be.

The problem I have with it is that if you look at cases that this Court has decided in the procedural area, there tends to be a great deal more factual basis for the necessity of getting the taking into operation than we have in this case.

What are we talking about here?

We're talking about 160-something dollars a year.

I cannot see that the union is going to suffer some great financial detriment by these moneys being deferred to some time in the future because they're not collected.

In this particular case, the moneys are collected and put in escrow.

The union never seems them until when, five years from now, ten years from now.

How long do you think the judiciary is going to deal with this question in the state of Illinois before those escrowed moneys finally come into the possession of the union?

Besides, from the union's point of view, if they have such a good case, if these fees that they are charging actually represent their costs, they should have no problem borrowing this small amount of money and then charging the interest on that to the agency fee-payers as a legitimate cost of collective bargaining.

I just see no problem on their side.

Now, the employee's problem is always the same: Are they entitled, as a matter of constitutional law, to the interim possession and use of their own wages, absent some very strong governmental interest in taking that money out of their possession and putting it in a segregated account?

Unidentified Justice: --Well, the odds are, though, that the amount the union wants to collect, well, almost all of it or at least a majority of it they will be entitled to in the long run.

Mr. Vieira: Oh, even they question that, Your Honor.

There's a footnote in their brief where they admit that as a matter of state law and federal constitutional law the parameters of these collective bargaining charges are all up in the air.

We're talking about years and years of litigation when we go to that question, as to what's a legitimate collective bargaining cost under the Illinois statute, what's a legitimate collective bargaining cost under the federal Constitution.

I don't believe for one instant that the majority of these moneys are going to end up in the union's possession.

Unidentified Justice: Well, let's assume that that would be the case.

Mr. Vieira: Okay.

Unidentified Justice: Let's assume that there's a perfectly legitimate basis for saying that 75 percent, 80, 90 percent of it's going to end up in the union's hands.

Mr. Vieira: Okay.

Unidentified Justice: All I'm suggesting is that the burden on the individual employee is not very substantial, either.

Mr. Vieira: Well, in this particular case the burden on the individual--

Unidentified Justice: He's going to have to pay 75 cents out of every dollar anyway.

Mr. Vieira: --Your Honor, in this particular case the burden on the employee to determine for himself whether or not these fees are accurate is wholly disproportionate to the amount of money.

The union is saying, we're going to take $164 from you and if you want to challenge this bring a court suit.

How much do you think it's going to cost to bring a court suit to determine the validity of these fees, when the union has all of the evidence, has presented none of the evidence, when it's all a matter of statutory interpretation, constitutional interpretation?

How many people are going to bring a court suit in the Illinois courts to contest $164?

Unidentified Justice: May I ask this question--

--Well, somebody did.

I'm sorry.

Would you have the same constitutional objection if the procedure were one that the union financed an audit by an independent arbitrator?

You didn't have the selection procedure now.

Say you had an independent decisionmaker and the cost was entirely borne by the union and they had some kind of procedure where they could get a decision in three months or something.

I should think the audit could be done in a reasonable period of time if it were done by an independent auditor.

What would be the constitutional objection to such a procedure?

Mr. Vieira: The money having been collected before the determination was made?

Unidentified Justice: It would be in escrow until whatever it would take to complete the audit, and then they divide it up, whatever the auditor said.

You'd always have a chance to litigate later on, I suppose, whether--

Mr. Vieira: Your Honor, at this stage I'm not interested in litigating.

All I'm saying is, before they're allowed to take the money they have to present to someone some rational facts.

Unidentified Justice: --Well, assume for the moment that they did present to the legislature a fairly strong showing that a substantial percentage of the money would be used for collective bargaining.

And they say, pending the decision by an independent decisionmaker what percentage is appropriate, we'll collect it so we're sure we'll get it, that these people won't lose their jobs or die or something and they have trouble collecting.

And we'll put it in escrow and leave it there for 90 days while a decision is made, and then we'll divide it up.

What would be the constitutional objection to that?

Mr. Vieira: Assuming that the legislature makes that finding, based on its determination of the need for this collection and escrowing of the moneys, I guess we'd have to live with it.

Unidentified Justice: Well, you would concede that the auditor could do it just by himself, wouldn't you?

He wouldn't have to talk to you about it.

He wouldn't have to have a hearing.

There wouldn't be any procedures.

The auditor just decides.

Mr. Vieira: Well, Your Honor, we have the great difficulty here that, as the union itself admits--

Unidentified Justice: Take Justice Stevens' example.

Would you say that there would have to be a... the auditor would have to take your input to it and have a hearing, with witnesses?

Mr. Vieira: --Well, let's not say witnesses.

The problem I have with Justice Stevens' suggestion is, until the statutory and constitutional questions of the definition of collective bargaining services have been settled at least in large part, what is this auditor going to do?

Is he going to make legal determinations?

Is he going to look at a list of union activities and say, yes, this one is inside of Abood, no, that one's outside of Abood?

And then what's the value of that type of determination?

Unidentified Justice: Well, let's suppose that the union said, look, we're going to have a procedure here where we're going to end up with an arbitrator, an independent arbitrator, as to how much the employee should pay, and pending that decision he doesn't have to pay anything.

And then the arbitrator decides.

Is that all right?

Mr. Vieira: And that figure they bring to the board.

Well now, that's getting to what I was suggesting.

Unidentified Justice: Well, I know, but the Court of Appeals for the Seventh Circuit doesn't seem to accept that system.

Mr. Vieira: No, Your Honor, I think--

Unidentified Justice: Because it's under the control of the testimony.

Mr. Vieira: --Well now, wait a minute.

That's after the collections, the determination after the collections of the validity of the uses of the money.

I'm talking about the pre-collection.

If the union came to the board and said, we had our own--

Unidentified Justice: I would think the due process employee of the Court of Appeals--

Mr. Vieira: --Excuse me?

Unidentified Justice: --The due process theory of the Court of Appeals would apply whether the money is collected before or after.

Mr. Vieira: No, I don't think so, Your Honor, because when the union comes--

Unidentified Justice: Well, that's all right.

You've answered my question.

If that's what the Court of Appeals said, you don't defend it, I take it?

Mr. Vieira: --Well, it's not directed towards this question.

I think when the union comes to the state agency, the board, let's say, and what it has as the evidence for its fee request is some sort of determination made by an independent accounting firm or arbitrator or whatever you want to call this, now, that's some probative evidence.

Whether it rises to the level of what I would call probable cause is another question, and you have to look at the evidence.

But that isn't what happened here.

The independent determination, the basis for this claim, was not made before the taking.

It was made after the taking, or to be made after the taking, because actually no one went through that internal union procedure.

I'm not saying that the union can't generate these figures initially.

I'm saying that it should generate the figures initially.

It should be required to take it to some responsible official in the state and justify this with some minimal level of factual and legal basis, and then that agency can say, all right, now we're going to collect this money, and maybe then it can be put into escrow, so we don't have the problem Justice O'Connor discussed of impermissible uses.

But first let's have some rational basis for this thing.

We have no procedure now.

We have a union coming to a Government official and saying, we want those people's property and we're really not going to tell you why, because as they say and admit at every level in this litigation, they calculate the fee by subtracting an arbitrary number from an arbitrary number.

And if that doesn't come up with an arbitrary number, I'm not too good at arithmetic.

They simply have not documented the actual services they've performed or the costs of those services.

Now, I don't think that's a great deal of documentation, really.

If they've done these things, they have a record of it.

If they plan to do them, they have a proposed budget.

And I don't see why they can't do the same thing that's been required in Sniadach, Fuentes, North Georgia Finishing, Mitchell versus W.T. Grant... some kind of factual evidence presented to a neutral government official.

I don't think it has to be a judicial, full-blown judicial evidentiary hearing.

It probably doesn't even have to be a full-blown administrative evidentiary hearing.

But it has to be something more than nothing.

It has to be something more than a naked demand for the money, backed up by a bluff, because that's what we have here.

It has to be a rational calculation on paper.

Look at it and see that it's rational, that you could get from A through B to C.

And we have no check in this present case against erroneous determinations whatsoever.

The check comes after the fact, either before the union's internal arbitrator or in some protracted judicial proceedings.

Heaven knows how long they'll take and how complicated and how expensive.

Unidentified Justice: Mr. Vieira, you use the term "irrational".

Don't you have a check of a mind because at least you have the union membership agreeing to pay certain dues periodically?

And presumably they're not just throwing their money away.

They must think they get something for their dues.

Mr. Vieira: But it's not necessarily collective bargaining they're paying for, Your Honor.

Unidentified Justice: Well, presumably a significant part of it must be, because isn't that the principal function that a union performs for its membership?

Mr. Vieira: I have no idea what the principal function this union performs.

Unidentified Justice: Don't you have any idea what they do?

Is that a total secret?

I mean, this is a fairly well-known union.

They're in the newspapers a lot.

Mr. Vieira: Well, for instance, Your Honor--

Unidentified Justice: They do represent the teachers of Chicago.

Mr. Vieira: --Sure.

If we want to speculate, because none of this is in the record, some of this money, a significant amount of this money goes to the national level of this union, the American Federation of Teachers.

I'm pretty sure the American Federation of Teachers doesn't do much collective bargaining in Chicago.

I think they have national concerns, maybe even international concerns.

Unidentified Justice: What proportion of it goes to the national?

Is that in the record?

Mr. Vieira: Yes, it is, but it escapes me now.

Unidentified Justice: It's in the record?

Mr. Vieira: A little more than one-third, I believe.

Mr. Gold might have that figure.

It's a sizable amount of money.

And again, I don't think the amount of money... well, let's look at the Carey case.

What did you say in the Carey case?

There's an absolute right to procedural due process.

It doesn't make any difference whether you win or lose, ultimately.

You have absolute right to procedural due process.

That's all we're asking for here.

Before they take the money, at some stage the government receives some factual basis for saying the figure is reasonable.

Afterwards, there can be an argument about exactly how much.

Unidentified Justice: Could it be a school official?

Mr. Vieira: Well, I suppose abstractly it could be, Your Honor.

But I really don't like that idea.

They don't have any expertise in these matters.

You're putting a burden on those people that they're really not capable of meeting.

Unidentified Justice: Well, I would think the school board which bargains with the union might have as good at least a way of getting knowledge as any other governmental agency.

Mr. Vieira: That's right.

I think if you put it that way, if you look at the activities of the union that are done in conjunction with the school board, there you would have a case in which the government official who was reviewing the request actually had its own independent knowledge of the facts.

And that might be workable with respect to the activities of the union in the local.

I'm not so sure of the extent that that would be workable with respect to the activities that the union conducts at the state and national level that the local charges for.

That's the only reason I have a problem with it.

There are some levels of activity of the union in which there is no interaction with the board.

If we were talking about a local union only or the local proportion of the dues, which I imagine is the largest proportion of the Chicago Teachers Union section of this in any event, it might very well be possible for the state to work out a system.

But we don't have the state.

And to be honest with you, Your Honors, I'm not asking you to give us a system.

It's the state of Illinois' problem.

The only thing I'm asking for here is first a determination that there has to be some injection of fact and review by a government official before the taking, and secondly--

Unidentified Justice: Do you think that the Court of Appeals held that?

Mr. Vieira: --Yes, I think that they sent this thing back, they threw it in the lap of the board and they said: You work out a procedure, you work out a procedure.

Unidentified Justice: I didn't think they said that there had to be a procedure before any money could be taken from them, did they?

Mr. Vieira: Well, they left it rather open.

In fact, I think that they may have been telling the board, too, that they had to make almost a final determination of the figure.

Unidentified Justice: Well, you're asking for an affirmance on a ground that perhaps goes beyond what the Court of Appeals decided.

Mr. Vieira: Well, I think it's a lesser included.

I'm not going to require the board to make the final determinations on the size of the fee.

I'm saying that the agency that does the checking off, the agency that does the deducting, has to have something before it beyond just a naked demand.

After that, if you go into an administrative agency, which I think is the way these things will end up, the state of Illinois will fashion some sort of an administrative procedure for handling this.

And probably that's the way it will end up ultimately, that the union will have to come to that agency, present its facts, the agency will certify it, and the checkoffs will be made.

But they'll have the facts on the record, and if there's some gross problem with the facts presented by the union then the dissenting employee can put his challenge on the record with the agency at that point, right at the beginning.

Otherwise, this thing will go along rather mechanically, any challenges to be brought up later on.

Our problem here is that we're at the initial step in the whole procedure.

We have no rational involvement by the state other than the seizure of the money.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.