YSURSA v. POCATELLO EDUCATION ASSOCIATION

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ORAL ARGUMENT OF CLAY R. SMITH ON BEHALF OF THE PETITIONERS

Chief Justice Roberts: We'll hear argument next in Case 07-869, Ysursa v. Pocatello Education Association.

Mr. Smith.

Mr. Smith: Mr. Chief Justice, and may it please the Court: This case is narrowed to a single, but from the Petitioner's perspective a critical, dispute over the scope of internal State sovereignty: whether the First Amendment trumps the otherwise existing authority of the Idaho legislature to direct political subdivisions of the State to take an action, here restricting access to their payroll systems, that the subdivisions could take independently without violating the Amendment.

The genesis of this dispute is Idaho Code Section 44-2004(2), which was adopted in 2003.

That provision prohibits State and local government public employers from deducting amounts for political activities from the payroll checks due to their employees and remitting those amounts to third parties.

Justice Stevens: Didn't the statute also prohibit private employers from doing that?

Mr. Smith: As construed by the district court, it did.

The base legislation in this, the Voluntary Contribution Act, excluded from application an employee -- an employer subject to the two major labor -- Federal labor relations statutes, the NLRA and the RLA.

But there was obviously a group of employers, private employers, in -- who were not engaged in commerce, as well as the agricultural sector.

Justice Stevens: And you concede the statute was unconstitutional as applied to them?

Mr. Smith: The district court concluded that the -- yes, Your Honor, we did.

Justice Stevens: And you agree with that conclusion?

Mr. Smith: We do.

Justice Stevens: And what is the difference between the private employer and the county agency?

Mr. Smith: Well, the principal difference is that one is a private employer -- that is to say, engaging in private speech -- while the public employer is a -- is a subdivision of the State of Idaho, subject, we would argue, to the plenary control, pursuant to the Idaho Constitution, of the Idaho legislature.

Chief Justice Roberts: I think Justice Stevens's question highlights for me one of the confusing parts of this case.

You sort of paired off a number of the people who would otherwise be covered, and you are left with the county employees.

If you had started with the county employees, is this how you would have gone about telling them they can't do this?

I mean the county employers.

Would you have passed a law saying that the county employers are not allowed to have this checkoff?

If you think they are part of the State, I guess you could have just written them a letter and say don't do this, right?

Mr. Smith: Your Honor, in a word, the answer is no.

I don't believe we, referring to the Petitioners in this case, could have written the -- the political subdivisions of a State to direct them to take an action unless there was a legislative basis for doing so.

In this instance, the -- the legislature concluded that it wanted all public employers, among others, to not allow access to their payroll systems.

Justice Stevens: Do I understand that the counties, if they elected to, could decide not to -- not to do the checkoff?

Mr. Smith: Prior to the adoption of the statute in 2003, yes.

Justice Stevens: And so why should counties be different from -- from -- I'm still puzzled about why counties -- county employers are different from private employers in terms of the State interest in preventing the checkoff.

Mr. Smith: Well, there is a fundamental difference, Your Honor.

And -- and it rests in the notion that the State has no interest in the -- in private employers' determination to be involved or not involved in political matters.

The State legislature, however, has a very concrete interest in avoiding either the reality or the appearance--

Justice Kennedy: If you -- if you think of the case as a principal-agent case so that the principal can direct the agent as to what to do, the agent being the county, then it seems to me that the unions might still have an argument that this is an unconstitutional condition.

I've been looking for ways to examine this case.

The public forum doesn't really work for me.

Subsidy doesn't really work for me.

It seems to me to be an unconstitutional-condition case.

At least that's the argument.

That doesn't mean you necessarily can't prevail.

But suppose the State told the city: You can't have a parade that you sponsor for this particular cause.

That would raise an unconstitutional-conditions argument; wouldn't it?

Mr. Smith: --It might, Your Honor, but that situation, of course, is not the situation presented here.

Justice Kennedy: Why isn't it?

And I say that because I think that follows on Justice Stevens's line of questioning.

I didn't mean to interrupt him, but it seems to me that is consistent with what he is asking.

Mr. Smith: Because the statute at issue here, Justice Kennedy, speaks across the board to a specific kind of conduct, political activities.

It does so in the a viewpoint-neutral fashion.

To prohibit a particular parade might well raise viewpoint non-neutrality issues.

Chief Justice Roberts: Yes, because the State couldn't--

Justice Kennedy: You stand up and say that this isn't viewpoint -- that this is -- that this is viewpoint-based.

Isn't it where the union -- and aren't they right about that?

Mr. Smith: Your Honor, they are incorrect about that.

The district court concluded that the statute is viewpoint-neutral.

Indeed--

Justice Ginsburg: But does it get at any speech other than union speech?

I mean you say, yes, it is content-based, but it's viewpoint neutral.

But it seems that what is banned by the statute is union speech.

Is any other organization affected?

Does the ban affect any other organization?

Isn't it simply union speech that's at stake?

Mr. Smith: --The answer is no.

It -- the -- the statute just -- does not just affect union speech by its literal terms.

Justice Ginsburg: But, in practice, is there any other application?

Mr. Smith: Well, there is no evidence in the record, Your Honor, as to any other entity who is affected by the statute.

But that is hardly -- that's hardly remarkable, given the fact that the plaintiffs in the litigation are six labor organizations.

I should add that--

Justice Scalia: Are there -- are there in counties some charitable drives that occur annually and that permit employees to donate to those charities through deductions from their wages?

Mr. Smith: --There are, Your Honor.

Justice Scalia: And would they presumably be covered by this?

United Fund drives, so-called, my -- my recollection is that usually the contributions to that simply come out of -- are deducted from the wages.

And if they existed in the counties, presumably they would have been covered.

But we don't know if they would.

Mr. Smith: Well, to the extent that the -- the contribution was for political activities--

Justice Scalia: Oh, it's only political activities?

Mr. Smith: --That's correct.

Justice Scalia: I see.

Well, none of those would allow that--

Justice Breyer: But if in fact there is a charity, which charity in Idaho is a charity that makes all of its contributions to help support right-to-work laws.

All right.

So that charity goes and says, could you -- we'd like a payroll deduction.

Can they get it, or not?

Mr. Smith: Your Honor, again, it depends.

I -- I don't know the answer.

Justice Breyer: You don't know.

Okay.

So, then, we do know this.

We do know -- what I'm wondering is: Isn't this case, to me, quite confused about something fairly simple?

The question would be: Look, one, do you or do you not in Idaho allow anybody to have payroll deductions for anything?

And I take it your answer to that question is: Yes, we do allow some payroll deductions for some things.

Okay?

So then we look at this one, and it says: No payroll deductions for union activities that are political.

All right?

Now, you either do have or you do not have a justification for that difference.

If you have a reasonable, or whatever the sufficient test is, justification for the difference, you win.

And if you don't, you lose.

And, indeed, whether you are the State or the county could have to do with the plausibility of the justification.

Here we are, end of case, traditional.

You just -- you didn't argue it that way, I guess, below.

What's wrong with that?

Mr. Smith: Your Honor, in fact, we argued below that there was no constitutional right of access to the payroll system for purposes of making political contributions.

And let me reiterate at this--

Justice Breyer: There certainly, I would think, would be a problem if the right-to-work people can get there.

And you are not going to let the unions get there.

But I don't know the facts.

So shouldn't we just send this case back and say: Please look at what the situation is?

If they have to treat some people one way, some people another, bad; if they don't, everybody is treated alike for good reason, probably okay.

Mr. Smith: --Well, the -- I would suggest that a remand for that purpose would be futile.

The district court, as I said before, concluded that the statute is viewpoint neutral.

And let me stress that the term "political activities" does not -- is not defined with reference to unions or speech by other entities that might be controlled by unions.

It addresses political contributions for electoral matters, independent expenditures, and expenditures to political parties.

Justice Scalia: --Would -- would they include contributions to an organization that makes contributions to political parties--

Mr. Smith: Yes, to the--

Justice Scalia: --such as a right-to work-organization?

Mr. Smith: --To the extent that the -- the organization is, for example, a political action committee, it would.

And let me go back to Justice Ginsburg's question for a moment.

Had the legislature intended 44-2004(2) to apply only to unions, they would have -- it would have been engaging in a redundancy because under another provision of the same legislation, 44-2603(1)(b)(iv), which appears at petition appendix 70, the Idaho legislature proscribed amounts being -- amounts -- required all amounts to be paid -- paid to a separate segregated fund which was established pursuant to the legislation that was invalidated by the district court, required those kinds of contributions to be made directly by the employee and not through -- or not by the employee's employer.

Justice Scalia: Does the State give some particular favor to unions?

I mean, does it allow -- what -- what is the situation?

Can you be forced to contribute to the union even though you're not a union member?

Mr. Smith: No, Your Honor.

The -- 44-2004(2) is part of the Idaho Right to Work Act, which was adopted in the mid 1980s.

It allows amounts to be deducted through payroll checkoffs for union dues.

Justice Scalia: But unions do have a special prerogative which -- which no other organizations, as far as you're aware, have in the State, which is to have money deducted from people's payrolls?

Mr. Smith: That's -- that's correct.

The--

Chief Justice Roberts: --No other organization other than the Federal, State and local governments.

Mr. Smith: --True.

But let -- let me -- let me continue with my response to Justice Scalia's question.

The special prerogative that, for example, the Pocatello Education Association or the firefighters union has is the ability to engage in collective bargaining pursuant to State statute as the exclusive bargaining representative of, for example, the Pocatello School District's teachers.

That exclusivity which is granted to a limited number of -- of -- in fact, two areas under Colorado -- excuse me -- under Idaho law, namely, firefighters and teachers, is the extraordinary benefit that unions have.

Justice Scalia: Yes.

The point of my question is it doesn't seem to be terribly discriminatory if indeed the only organizations in the State that are given the right, whether by Federal or State law, to deduct, private organizations, given the right to deduct from the salary a municipal or private employer pays.

It doesn't seem to me particularly discriminatory to say that, moreover, in making those deductions, no part of it will be given for political activities.

I mean you're only addressing a narrow class, but it's a narrow class that has a special benefit.

Mr. Smith: Well, I would agree that -- that unions have, and particularly these -- particularly the Respondents have a special benefit.

But again, I go back to the basic point that 2004(2) addresses all public employers or public employees and is not limited to political activity contributions.

That might be, for example, as the situation is here, to a union-sponsored political action -- political action committee.

Justice Stevens: May I ask a question about, say, an attempt to deduct contributions to a charity like the United Fund?

Do counties have a choice to either do that or not do it, or does State law require them to accept such requests?

Mr. Smith: Local governments have discretion.

Justice Stevens: They have discretion to do that?

Mr. Smith: That's correct.

Justice Stevens: With respect to the union situation, the statute takes away that discretion.

Mr. Smith: With respect--

Justice Stevens: And the question is why is there -- why is there a State interest in taking away that discretion for unions, but not as to charities.

Mr. Smith: --Well, it takes away that discretion with respect to any third party who might receive amounts for political activities.

Justice Stevens: For political activities.

But what is -- what is the reason for differentiating political activities from charities?

Mr. Smith: The reason, as we articulate in our brief, is the desire to avoid either the appearance or the reality of public employer involvement in, in this instance, electoral politics.

Justice Stevens: I see.

Chief Justice Roberts: Are there other areas in which the State exercises the authority you're asserting here with respect to county employers, telling them what they can and can't do?

Mr. Smith: Outside the area of elections, not with respect to payroll deductions.

Chief Justice Roberts: I mean more generally.

Your assertion is that this is part of the State, and therefore, as I gather, it's conceded on the other side, this is acceptable with respect to State employees but not other public employers.

Are there other areas in which you act like the counties are part of the State?

Mr. Smith: Your Honor, the -- the county -- counties in Idaho and I suppose in most States act as political subdivisions of the State.

And whatever authority they have or don't have derives, if not exclusively, virtually exclusively from State law.

Chief Justice Roberts: I'm looking for--

Justice Souter: No.

Please.

Chief Justice Roberts: --I'm looking for a specific example.

I mean, maybe counties or municipalities, you know, contract for trash collection or water services and maybe the State tells them, look, you've got to deal with these people, you've got to do it by open bidding, whatever.

Mr. Smith: Your Honor, let me go back to the election context for a moment to try to address that question.

Prior to its amendments pursuant to the legislation at hand, Idaho Code Section 67-6605, which is part of Idaho's election campaign finance and reporting statute or general statutes, allowed payroll deductions to be made for contributions to political committees.

In that sense, it allowed counties, as well as other public employers, to make deductions of the kind at issue today.

Now, that authority was rescinded by virtue of the amendment to 2004(2).

The point simply is that if necessary, we -- we could describe in detail various kinds of -- of requirements that exist with respect to counties or school districts or cities.

Chief Justice Roberts: Well, that's -- since I asked the question, I think it's necessary.

So what's the best example where the State exercises control over what the counties would otherwise have discretion to do?

You mentioned school districts.

Is that -- is that an area?

Mr. Smith: Well, Your Honor, for example, with respect to -- take open meetings, for example, take public records, for example.

Those are general kinds of statutes that impose requirements on all levels of State government.

So, for example, with respect to open meetings, the Idaho law requires essentially all meetings, except for certain exclusions, to be open to the public.

In that sense, it's akin to the Wisconsin statute.

Justice Scalia: What about a Hatch Act?

Does -- does -- does the State allow State employees to engage in political activity?

Mr. Smith: Your Honor, it does, but not -- not in connection with their public employment activities.

Justice Scalia: I don't know -- I don't know what that means.

Mr. Smith: It means that there is no prohibition under State law, for example, for a public employee to engage in political activity.

If -- but our statute in Idaho applies actually only to State employees.

It doesn't govern those kinds of activities by local government.

Justice Scalia: That's interesting.

Why not?

Justice Kennedy: The general proposition that underlies your argument that the local entities are creatures of State law and they cannot receive Federal powers from the Federal Government when the States object, is that -- is that an acceptable proposition?

Mr. Smith: It would be an acceptable proposition to the extent that Federal law doesn't pre-empt State law, Your Honor.

Justice Kennedy: Right.

Mr. Smith: In this instance, we would argue that the First Amendment does not interpose some kind of barrier to essentially vulcanize local government from State legislative control.

Justice Kennedy: There is -- there is a case out of the Ninth Circuit, and it was affirmed by this Court on a procedural point, but not on a -- not on the merits -- out of the neighboring State of Washington, where the State says a locality cannot build a dam more than 25 feet high.

The locality then gets a license from the Federal Power Commission, and the State said, well, you still don't have this authority.

And the Ninth Circuit said you do.

The Federal power then supersedes.

Would you agree that that case is valid?

Mr. Smith: Depending on -- on the facts, I -- I would agree that it is certainly possible for the State law to--

Justice Kennedy: Because there the local entity has powers greater than what the State wants to give it, even over the State's objection.

Mr. Smith: --Well, but -- but, Your Honor, that is, I think, beyond cavil; that is to say that Federal law--

Chief Justice Roberts: I -- I didn't hear you.

You think that's what?

Mr. Smith: --Beyond cavil, beyond--

Justice Kennedy: Really, if the State can -- can opt not to do something, it can't tell its subdivisions, we don't want you to do it, either?

And the subdivision can then go to the -- directly to the Federal Government and say, please let us do this, even if the State would be free to reject it on its own?

Mr. Smith: --Well, it -- it depends on--

Justice Kennedy: It seems to me that that is the argument you should be making here.

Mr. Smith: --Your Honor, perhaps it was -- it was an argument that we don't have to make in this instance.

Needless to say, by virtue of the Supremacy Clause, there may be instances where Federal law--

Justice Ginsburg: But I thought your whole argument was that the counties are simply instrumentalities of the State, and the State has full power over them.

It chooses to delegate to them autonomy, but it holds the control rein.

And now you're saying no, that the Federal Government can give the State local-unit authority that the State, itself, chooses not to give.

And you say that's beyond cavil.

I really don't understand your argument.

Mr. Smith: --It is beyond cavil if the Federal law, in fact, supersedes State law.

There may be issues--

Chief Justice Roberts: That depends -- I mean the whole case turns on -- and the response to Justice Kennedy, I think, would be -- if the Federal Government is simply saying you can do it if you want, that's one thing.

If the Federal Government is saying you must do it because it's covered by the Federal Power Act, or whatever, that's different.

If it's just a grant of permission, I would suppose the State can say, well, fine, it's okay with the Feds, but you can't do it because we don't want you to.

Mr. Smith: --That's correct.

Justice Souter: And don't -- don't you suffer from -- doesn't your position suffer from a -- a more serious problem that doesn't even implicate the pre-emption doctrine?

And that is, as I understand your argument, the -- the local governments are creatures of the State.

Their powers are the powers that the State gives them by statute, as -- as you were pointing out.

The same thing is true for corporations.

Corporations are creatures of the State.

They have the powers, and only the powers, that the State gives to them.

It -- it seems to me, going back to Justice Stevens's initial question, that I don't see where the distinction lies between the -- in effect, the position of the local-government units and corporations, and -- and between the local-government units and the corporations.

And it seems to me that that's a problem for you quite apart from any application of Federal law.

Mr. Smith: I disagree, Justice Souter.

The -- as I stated in response to Justice Stevens, the difference is a central one.

That is to say, a corporation is a private entity with -- with distinct rights under the First Amendment.

Justice Souter: Well, it has distinct rights under the First Amendment if State law creates a corporate form of -- of -- of business organization.

And the -- the -- when -- when it comes into existence, it then does acquire some rights under the national Constitution.

But if in the first instance it's a creature of State law, its powers, generally speaking, are the powers that State law gives it.

And that is -- that same proposition is true of counties and towns and -- and other sub-State governmental units.

Mr. Smith: I disagree to the extent that there is any attempt to equate a private corporation with essentially an agent or an arm of the State such as a county, which has been delegated governmental functions.

Justice Souter: All right.

Then -- then it seems to me that your argument is not that State law controls what it may do and defines its powers.

Your argument, it seems to me, has to rest upon the fact that what it is doing is a public, as opposed to a private, function.

And that's the extent of the argument.

Isn't that true?

Mr. Smith: Well, that is -- certainly is the distinction between a private corporation and, for example, a county.

Justice Souter: That's the only distinction that you can maintain.

You can't maintain the distinction based upon the superiority of State law in defining the -- the extent of the governmental unit's powers and so on, because that is just as true of a corporation.

So your distinction has simply got to be a distinction based on the nature of the function that is being performed.

Mr. Smith: And -- and the very nature of the entity, itself, Your Honor.

A county--

Justice Souter: What -- what do you mean by the "nature of"--

Mr. Smith: --A county or school district performs functions assigned to it by the State legislature to carry out the function, to carry out activities that are public in nature.

Justice Souter: --Yes, it's doing -- it's doing a governmental job.

Mr. Smith: That's correct.

Justice Souter: We understand what that is, so I understand that point.

Mr. Smith: Your Honor, I -- I can only repeat that the distinction between the private corporation and the -- and a political subdivision of the State is that, in fact, one is an entity created by the legislature for the very purpose of carrying out State governmental functions.

That -- that, I think, is entirely consistent with the position argued throughout this case.

Justice Souter: No.

But -- it -- it is, but I mean when you say, as I think you are now saying, the -- the law for the State to be the law for the subdivision because they are both governmental, the counter-argument is, in fact, there are resemblances to private organizations, too.

And those resemblances are, in effect, their creation and definition by State law; their enjoyment of the powers, and only those powers, which State law gives them; so that, in fact, there is -- there is not only an analogy with the State government, there is an analogy with private corporations, too.

And the question is why should we choose one analogy rather than the other analogy?

Mr. Smith: And Your Honor, I think I responded.

Justice Alito: You don't think that under our Federal system, the States have greater powers deciding how they are going to organize themselves than they have with respect to the regulation of artificial private entities that they choose to permit under State law?

Mr. Smith: Yes.

States -- of course States do have that authority.

Chief Justice Roberts: Counsel, we'll give you a minute for rebuttal--

Mr. Smith: Thank you.

Chief Justice Roberts: --Since our questioning has taken away from your time.

Mr. Collins.

ORAL ARGUMENT OF JEREMIAH A. COLLINS ON BEHALF OF THE RESPONDENTS

Mr. Collins: Mr. Chief Justice and may it please the Court: This case turns on three points.

First, the statute at issue is a content-based restriction on speech which is therefore presumptively invalid, requires heightened scrutiny, which Petitioners acknowledge they have not satisfied, unless one of the exceptions to heightened scrutiny is applicable here, those being exceptions which as the Court has explained in R.A.V. and Davenport, are limited to circumstances where there is no real risk of viewpoint suppression.

Justice Scalia: Mr. Collins, suppose -- I gather Idaho doesn't have it, but suppose Idaho wanted a Hatch Act similar to the Federal Hatch Act that prohibits Federal employees from engaging in political activity, and suppose it decided that not only should the State employees at the capital not engage in political activities, but it's a problem for any governmental employee to do that; they ought to be neutral and we don't want patronage to be passed out on the basis of whether they are campaigning for one party or another, and we don't want them to be coerced into campaigning for one party or another.

Now, I assume that such a law would violate the First Amendment if it were extended to all employers.

Saying no -- no company employee, no private employee can engage in political activity would surely violate the First Amendment.

Would it violate the First Amendment if it was extended?

Certainly, it doesn't when it's applied to State employees because there are a lot of State Hatch Acts.

And you're saying it would violate the First Amendment as applied to county and municipal employees?

Mr. Collins: Not at all, Your Honor.

Justice Scalia: Why not?

Mr. Collins: We don't take that position at all, because, as the Court has indicated in Letter Carriers and Broadrick and other cases, there is a compelling interest in a statute which says that government employees -- and it could be State or local -- will not be performing their jobs as servants of politics.

Justice Scalia: You're saying -- you're analogizing these to private entities.

That's your whole point.

Mr. Collins: That's not our point.

Justice Scalia: This is not a creature of the State.

You're saying what the First Amendment -- as the First Amendment applies to private individuals, so it applies here.

This is regulation by the State, rather than the State's control of State government.

Mr. Collins: We are saying that, Your Honor, because the only defense that the State can possibly offer here to this content discrimination is the forum notion that the State has introduced.

In the case of--

Justice Kennedy: Now--

Mr. Collins: --It's not a forum analysis.

Justice Kennedy: --Let me just establish something at the outset.

You had conceded below, and I thought I saw this in your brief as well, that as to the State of Idaho, its determination not to allow the deductibility is permissible.

Mr. Collins: That's correct, Your Honor.

Justice Kennedy: All right.

So, we begin with the proposition that a State may do this if it chooses; i.e., this -- refused on its own to have the payroll deduction.

Mr. Collins: Yes.

And the reason for that is that, under Regan and Finley and Rust and the other cases, the State has perfect freedom to decide not to devote its own resources and expenditure.

But interestingly and very much on point here--

Justice Kennedy: And if -- and if a State had a system in which all payroll deductions were -- by local entities -- were routinely controlled by the State, the State did all the pay roles for the local entities, then it -- in that case the nondeductibility would also be permitted, I take it.

Mr. Collins: --Yes, Your Honor, and let me explain because those are two -- the answer to both questions is "yes" but for two very different reasons.

The answer to the second question is that our contention is not that the State is never a proprietor and never entitled to the kind of deference that goes with the proprietor when it's dealing with local government programs.

As the Court noted in the Council of Greenberg case, a government can become a proprietor with respect to property or programs it doesn't actually own.

Our point is quite simply that the State has not done that here.

That's why, if the State had done it, if the State said we are going to dictate the nature of payroll deduction systems for and local governments, the State could do that, and it would be then--

Chief Justice Roberts: Did you have any doubt how they would?

I mean, they passed a law dictating that with respect to everybody.

And then it's pared down by litigation and concessions.

So, we don't have any real question of what the State is wanting to do here.

It's--

Mr. Collins: --What I'm suggesting, Mr. Chief Justice, is that since we are beginning with a content-based restriction -- and I do want to emphasize it's a law here which says that for all employers -- public, private, or State -- the only expenditure you can't make through payroll deduction is for political activities, and also the only resource of an employer that can't be used for any kind of political activity is payroll deduction, this being in a statute targeted at employee support of union activity.

So, we have a content-based restriction, and the question is: Can it come within an exception to the heightened scrutiny that Petitioners acknowledge they can't satisfy?

But when I'm suggesting that the State could come within reduced scrutiny if it were actually managing the payroll system, I'm referring to situations like Council of Greenburg, where the government with respect to a particular kind of facility or program says, we don't own it, but we -- it's an integral part of a system that we are managing, establishing, not just saying -- not just to say all we care about is one kind of speech we don't want to go on there.

If the government says we have -- we want to be the manager, the operator of a particular kind of local government operation, the State is free to do that--

Justice Ginsburg: Well, if the State wants to, it's because it can exercise a heavy hand and control its local units, but if it wants to give the local units discretion, then it has to leave it to the local units whether or not they want to enact such a ban.

That's your position?

Mr. Collins: --No.

It's not a question of whether the State has the power to regulate.

The question is if the State regulation is in the form of a content-based restriction on speech, can it elude heightened scrutiny?

And--

Justice Ginsburg: My question really is, if you look at this at the most basic level, we have two important concessions.

You don't question the constitutionality of the ban as to State employees.

And the other side doesn't question that it is unconstitutional as to private employees.

So here we have State local employees.

Do we bracket them with with State employees or with private employees as essential--

Mr. Collins: --Your Honor, functionally that's the question, but I think analytically we don't see it that way because the question is, as we see it, is the State, with regard to this challenged statute in its application to the local governments, acting in a capacity that entitles it to be free from the normal First Amendment scrutiny that it acknowledges it would fail -- and that's where our point is.

The reason it is free from that scrutiny as to its own employees is because of the cases that say the government doesn't have to spend its money.

Justice Breyer: It's at that part, just where you are, that I've always had a hard time not for lack of trying.

I don't understand what the word 15 times you can explain it.

And the thing I don't understand it about is it seems to me government engages in thousands of different kinds of activity, and there isn't some special test.

When they say that in the jury room, the jury room is there for juries; it's not to show movies of Steven Spielberg.

And there isn't some special test when you say the purpose of the biology class is to teach biology, and we don't want people coming in here teaching some other thing.

I don't understand what this special test called 30 seconds or 45 seconds to see if you can help me?

Mr. Collins: Well, Justice Breyer, the -- the concept of content discrimination may blur on some edges, but one thing that the Court has been clear on is that when a government says speech -- one form of speech will not be allowed and that will be political speech, that is treated as requiring heightened scrutiny.

And I should say--

Justice Breyer: It doesn't -- for example, in biology class, the school board says: You know, biology teacher, I want you to teach biology; I don't want you to teach politics.

And then there is some special scrutiny about how the biology teacher is to teach or -- but they say just face it.

The jury room is for juries.

It's not for politics.

All that is subject to some special First Amendment test?

Mr. Collins: --Well, first of all, Your Honor, all of those would pass muster either because--

Justice Breyer: They might.

They might.

But you know a lot of them, you know you could show movies in jury rooms in the evening and people might find it much better.

[Laughter]

Mr. Collins: --They would pass muster either because they are within exceptions to heightened scrutiny -- because not all content distinctions require heightened scrutiny -- or they would pass muster even under heightened scrutiny.

But one kind of content distinction that the Court consistently has indicated requires heightened scrutiny is in -- well, in Burson, a majority court at least, you can talk about anything you want near the polling place but not politics.

That was content.

Consolidated Edison -- you can talk about anything -- billing envelopes but not controversial issues.

Davenport, very recently -- from fees that individuals are required to pay to you -- and in this case we are not talking about any compelled fees -- but with compelled fees, you can use them for anything you want but not politics.

Chief Justice Roberts: --Since we are in confessional mode, I've never understood forum analysis.

I don't understand how ----

[Laughter]

--how you can say that this payroll deduction system is some kind of a forum.

A forum is, you know, the corner at Hyde Park or something.

This is -- this is something that governmental entities and private entities do, and they can either exclude this type of activity or they can't.

And the problem with the forum analysis is it's all or nothing.

I mean -- and both parties seem to agree: If it's a State forum, you could do it; if it's a private forum or if it's an open forum, you can't.

That's not how we usually analyze these things.

Mr. Collins: Well, two points in response to that, Mr. Chief Justice.

First, we are not the ones who say that this must be looked at under forum analysis.

We'd be quite happy, and I think the most sensible way actually to approach the case is that this is a content distinction, and it's presumptively invalid, and there is no sufficient justification.

The other side says wait a minute; there is a line of cases that says that when there is a forum involved of the government, and the government is restricting speech in that forum, there can be an exception to heightened scrutiny.

In Davenport--

Justice Alito: You say there is a sufficient -- presumably you concede there is a sufficient justification for this content-based restriction as to State employees.

Mr. Collins: --What we say as the State employees, Justice Alito, is that if falls under the Regan-Findley line of cases; that you don't even get to a First Amendment scrutiny because it's under the doctrine that when the government says we won't spend our money on something, that's not an infringement of speech in the first place.

And interestingly--

Justice Alito: So if there is State money involved in these payroll systems that would be sufficient?

Mr. Collins: --If the State said you can't use our money for payroll deductions of this kind then it would arguably be into that category.

But I think what's important to recognize--

Justice Ginsburg: --Isn't there -- isn't there some State tax money that goes to fund local units?

I mean, you say here there are State taxpayers' funds involved; therefore the State doesn't have to pay for what it doesn't want to buy.

But are there State funds that fund local government entities?

Mr. Smith: There is State funding, but the reason, I believe, why the Respondents -- excuse me the Petitioners -- have conceded that the subsidization case law does not apply to this statute in its application to the local governments, is that what the subsidization cases are talking about -- cases like Regan, Rust, Findley -- are situations where we'll say the State is involved in developing a program which it will pay for, and it says because we are paying for that, our priorities are to be honored.

The government in this instance, it's been conceded, as the Court of Appeals pointed out, there is no actual subsidization to the payroll systems.

In effect the State says we have some money we give to our local governments -- by no means, all revenue, but they get some money.

But we -- the State does not set the kinds of budget priorities that are protected by the Regan line of cases.

Specifically, the State in effect says that as far as payroll systems and in fact as far as most employment matters and most administrative matters are concerned, here's some money for you, local government.

The only thing we say about it is don't use it for political payroll deductions.

Justice Souter: No, but another way of looking at it is to say in each of these instances -- whether we are talking about the State taxing in order to perform functions at the State level or whether the State is authorizing taxation for functions for functions to be performed at the local level -- in all of these instances, the State is in the position to say not that it is sort of our money, but to say it is public money.

And our decision is that public money will not be used to -- by a public entity to underwrite political activity.

And why isn't the State in exactly the same position in making that judgment, whether it's talking about money that goes directly into the State coffer or public tax money that happens to be going into a -- a town coffer?

Mr. Collins: --Because, Your Honor, I think the courts never applied the Regan subsidization analysis in that kind of--

Justice Souter: But I'm -- I'm asking you why shouldn't--

Mr. Collins: --It shouldn't--

Justice Souter: --Why shouldn't we, on the theory that what is important is not which particular coffer the penny goes into, but the fact that it is public money, i.e., money being raised from taxpayers under a statute passed by the State authorizing taxation; and it is going to -- and its justification for taxation is the performance of public functions.

And if the State can say it is not a proper public function when the money is being filtered through our particular treasury, why isn't it equally valid for the State legislature to say that when the money is being filtered through a local treasury?

Mr. Collins: --For the following reason, I think, Justice Souter.

That -- the doctrine that says when a government is refusing to subsidize something there is no violation in the first place in the First Amendment, and therefore except in the rarest, rarest of cases -- the rarest of cases there can be no First Amendment claim; that's very powerful medicine and it turns on the notion that -- somewhat alike but different from in detail the proprietor concept -- but it turns on the notion that the government is making judgments about how its money is going to be used.

It decides what it wants its money to be used for, and we are going to honor that--

Justice Souter: Yes, but what you're saying is, I -- you're saying in effect that I -- that you reject my -- my hypothetical assumption here, that what we ought to regard as the proper characterization of the money is not "our" State money, but public money raised under a system of public taxation; and you're saying you should not go -- you should not characterize the funds that way.

Of course that's your position--

Mr. Collins: --No, I--

Justice Souter: --because if you do characterize the funds that way, it seems to me you're in trouble.

Mr. Collins: --Now--

Justice Souter: But why shouldn't I characterize them that way?

Mr. Collins: --The -- even characterizing -- even characterizing it that way, the reason that I think the analysis breaks down as to applying subsidization law, is that the subsidization law doctrine, subsidization doctrine -- Regan and those cases -- as the Court has explained it, it is to protect the prerogatives of the government that is making decisions about how it wants particular programs to be operated.

Justice Souter: The State -- the State legislature is making a decision as to how it wants the -- the programs which comprise local government to be operated.

Mr. Smith: But the difference, Your Honor, in all of the other cases one could look at Regan and the like, there is a program where the government is involved in its manifold details.

The government determines the purpose of the program; it has an overriding interest in the program; and it says in the course of that, in the course of dealing with this program, we don't want government money to be used for the following things.

If you -- if that were extended to say that there will be essentially no First Amendment claim whenever the government says as to some program that it has no other involvement and that it has no other interest in, we don't want the following speech, and over here we don't have the following speech--

Justice Souter: Well, but the point in the case that you concede that the government may make that choice is that the government is subsidizing it by the activity which the government is refusing to perform.

So it's not nearly a case of saying there shall be this kind of speech and not that kind of speech.

In each instance there is a decision being made in my hypothetical that the government will not subsidize that kind of activity, that kind of speech, by using public money.

Mr. Collins: But the difference for First Amendment analysis, I would submit, Your Honor, and the reason why I think the subsidization doctrine has been confined in the areas it's been confined, is when we are talking in this case, for example, about the State, the State determines whether it's going to have a payroll deduction system.

It determines whether it's going to allow deductions for charities; whether it's going to allow deductions for this that and the other.

It determines who -- who's going to administer the program, how expensive it's going to be, all of those things.

Its money is going into that program and it is as to that program making all of these decisions about how its money is going to be spent.

That is -- and if the course of that it says we don't want this one, this element as part of it just as we do want charitable, we don't want political; maybe we don't want charitable either -- it is a different situation in items of basic First Amendment analysis, I believe, if you have a government that's saying we don't care anything about government payroll systems.

Justice Stevens: Mr. Collins, may I interrupt you and ask you the converse of the question I asked your opponent?

He conceded that it was unconstitutionally what you call it, content discrimination -- whatever -- to have the deduction from the private sector, but the counties were different; and he justified the counties on the ground that the State's interest in avoiding taking a position with regard to union matters justifies it.

But that's the only justification for the -- it's not the administrative justification -- this statute wasn't enacted to save the government administrative expenses.

The purpose of the statute is perfectly clear, and I'm surprised that you concede that it's constitutional as applied to the State government, when there's no evidence whatsoever that it serves the purpose that everybody is talking about.

Mr. Collins: Your Honor, we conceded that reluctantly under the view that where the question is whether the State -- our claim against the State would say we are -- we are going to require the State to start devoting money that it doesn't want to spend as we -- we have chosen given the force of cases like Regan, not to make that contention, but to accept the ruling that the State's refusal to spend money on its own programs is in a different category.

Justice Stevens: But this is not a case involving a State's decision not to spend the time and energy to do payroll deductions because they do them for everybody else.

It's simply based on the reason for the payroll deduction, which is, in your view, an impermissible reason.

Is that not correct.

Mr. Collins: That's correct, Your Honor.

And if it were clear that as to what kinds of reasons are considered impermissible under subsidization--

Justice Stevens: How can it not be clear?

It enacted a general statute that had the same justification throughout the State.

And now you're justifying on the ground it doesn't apply to all their other government activities because they allow payroll deductions.

Mr. Collins: --Well, in Davenport, Your Honor, the Court did indicate that a statute that applies to public and private, even though it's a unitary statute, you have to analyze it separately in the two contexts.

But our point, though -- I think the point that is being lost, we don't see this as a question about what can the State do with respect to its own operations as such and what can it do with respect to local government operations.

We see it as a case that asks the question whether a content distinction directed at certain kinds of political activities that would normally require heightened scrutiny gets the pass from that scrutiny because it's in a "forum"?

And we -- our position is quite simply that if the State were, in fact, managing these local government payroll systems, which it would have a perfect right to do, that then it could avail itself of that analysis, but because it doesn't, it cannot.

Justice Stevens: I see your argument.

Justice Kennedy: Suppose the State at the State level says this is a contentious area, we want to stay out of it.

We are going to be neutral.

We are simply not allowing payroll deduction for right to work clauses, for union clauses.

We don't want this.

If the State can say that, and your concession indicates to me that it can, then why can't it tell its subdivisions you have to be efficient, we don't want arguments from one city to the next city about payroll deduction that's going to consume the time of the city council's, the time of the citizens, we want to take this off the table for you just the way we've taken it off the table for us?

Mr. Collins: Because I think the difference here, Your Honor, as I understand the case law, is that when the State is simply saying we choose not to spend our own money on this activity, it does not have the same burden of explaining why it's made that choice that it has when it reaches out and says, and by the way, we don't want local government or even private government--

Justice Kennedy: Well, of course, that's the interest.

This is a very strong Federal interest in allowing the States to organize their governmental systems the way they choose.

Our gun control registration case, where we said the Federal Government cannot tell the counties that it has certain duties for gun control.

Mr. Collins: --And we have no quarrel at all with that notion.

Our position in no way dictates, in no way has the First Amendment dictating how a State is going to structure its government.

It simply says, look, we begin with the proposition that normally this restriction on political speech would be heightened to public scrutiny.

Justice Kennedy: I -- I -- I'm not sure that's right.

I'm not sure the State isn't saying we want to determine how our government is structured in this respect.

Mr. Collins: If the -- if the State wants to have a uniform law for itself -- for public employer -- employees, its own employees and local government employees because of some unitary interest that the State wants to pursue, there is nothing wrong with the state pursuing that objective.

But when it does it through restricting political speech, it has to either satisfy heightened scrutiny or come within one of the exceptions.

And the distinction -- maybe I can put it this way, Justice Kennedy.

The reason why for First Amendment scrutiny analysis, there is a sharp distinction in this case between what the State's treatment of its own employees and the State treatment of local governments is -- I think it's basically threefold.

That, first, when the State says, we don't choose to allow certain speech in our own forum, it is simply declining to facilitate speech that couldn't take place without an affirmative grant.

When it says to local governments, who in the state of nature can allow whatever they want in the way of speech, when it says that there we will not allow these kinds of deductions, it's blocking speech that would take place but for the government's intervention.

And so--

Justice Kennedy: I'll read Russo again, but I didn't think Pocatello, Idaho, was part of the state of major.

Mr. Collins: --I just meant that no -- it's this simple, Justice Kennedy, and the point I'm trying to make is that for someone to get access to political -- to a payroll deduction system of the State government, it needs an affirmative grant from the State.

To have access to the use of payroll deduction from local governments, it doesn't need an affirmative grant from the State.

It simply needs the State not to interfere and reject the local government.

So it's -- it's a different kind of action.

But equally important, the basis for the kind of relaxed scrutiny that the -- that the Petitioners have argued for, the forum cases like Cornelius, et cetera, those are all situations where a government, that is, that has established and managed a facility is determining on a day-to-day basis what's the purpose of our program, what are we going to allow--

Justice Kennedy: Could you help me with this?

Would you object if we analyzed this as a constitutional condition case?

I don't know that you would prevail or not.

But it -- the forum analysis doesn't seem to me to quite fit.

Mr. Collins: --It's fine with me, but if you analyze it in any way that says that heightened scrutiny is applicable and there is no exception--

Justice Kennedy: Why is that?

[Laughter]

Mr. Collins: MR. COLLINS -- the problem with constitutional condition -- if it were a condition on the local governments, then it's not really--

Justice Breyer: Are you saying -- is it your view that heightened scrutiny applies whenever a government tells any group that wants to raise money for political purposes in any way they want involving the government that it can't?

Mr. Collins: --No, Your Honor.

Justice Breyer: No.

Okay.

I thought the answer would be no.

Then, will you try to say in a sentence or two if the answer is it heightened scrutiny doesn't apply to any kind of an effort to raise money for political purposes where they say to the government you got to help me, when does it apply and when doesn't it?

Mr. Collins: The -- well, there are exceptions to heightened scrutiny where the government is acting as a proprietor.

There are exceptions to heightened scrutiny where the government--

Justice Breyer: But then you are making -- say it always applies except in a few little exceptions.

I mean I know there is one for government speech and so forth.

But you're saying whenever the government tells a person you can't, for example, go to the city hall and raise money, you can't do it in the jury room, you can't raise money here, you can't raise money there, dah, dah, dah, or you can't speak there, you can't -- it's always heightened scrutiny?

Mr. Collins: --Well, if the government is allowing other speech it would be heightened scrutiny.

Justice Breyer: You cannot -- you have to use heightened scrutiny when the FDA, for example -- you know, the case I wrote in -- the FDA says you cannot advertise on a label for a drug.

We don't want advertising.

We don't want advertising on the label.

That's heightened scrutiny.

Mr. Collins: It -- if it's -- if it's commercial speech, it might fall under a different standard.

It would easily pass it is the point.

I mean, this is no question that a lot of situations easily pass heightened scrutiny, and a lot of circumstances are an exception.

And the problem in this case is that the Petitioner's sole submission--

Justice Breyer: And regulation of government employees is the same?

Mr. Collins: --It basically would trigger the -- the heightened scrutiny except where the government is involved.

When the government is involved in managing employees in just as when it's managing a forum, there -- there could be a different analysis.

But the problem -- where the shoe doesn't fit the Petitioner's are trying to put on this case is Petitioner's concede everything there is to concede about this case and then say but it's just like Cornelius, and it's just the government deciding what to do with its own programs.

And our point is quite simply that unlike every case where the court has applied relaxed scrutiny in a proprietary situation, this is a case where the government does not play any role with respect to the -- to limit the speech.

Chief Justice Roberts: Why are you -- why are you focusing on heightened scrutiny?

We have a whole series of cases about employee speech Darcetti and Pickering where it's quite different than heightened scrutiny, and here we are talking about the employees being able to deduct checkoffs from their paycheck for political speech?

Mr. Collins: If I may answer that question, Mr. Chief Justice?

It's correct that where a law is based on employee behavior, that other kinds of scrutiny can be involved.

Darcetti is, obviously if it's speech in your capacity of doing your job.

But the Hatch Act cases, letter carriers use the Pickering balance.

That's not a mere reasonableness test by a long shot.

That's a comparison as in the NT -- National Treasury Employees honoraria case, same situation, a balancing test between the harm that's perceived from allowing the speech and the benefits of the speech to the individual.

So, there can be that separate analysis, which if it were applied here, the State would also fail.

The State, it says it only prevails under a reasonableness test.

But none of those are near reasonableness analyses.

Chief Justice Roberts: Thank you, counsel.

Mr. Smith, you have one minute.

REBUTTAL ARGUMENT OF CLAY R. SMITH ON BEHALF OF THE PETITIONERS

Mr. Smith: Two points that I think are critical.

First, the concession with respect to the State government employees based on Regan it itself entails a concession as to the reasonableness and the due point neutrality of the statute.

Two, Respondents' theory of government with respect to the legislature having to speak in some kind of specific term, we would suggest, ignores -- would ask this Court to create entirely new case law.

But it also ignores in this situation the fact that the Idaho legislature contributes in 2006-2007 about half of the funds used by school districts in the State.

And over 80 percent of those funds that go into what is known as a general maintenance and operations fund from which salary compensation is paid.

Thank you.

Chief Justice Roberts: Thank you, counsel.

The case is submitted.