1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF CALIFORNIA 8 9 CESAR CAMPOS, LATANA M. CASE NO. 1:18-CV-1660 AWI EPG CHANDAVONG, NENG HER, HUGH 10 YANG, and NICK VANG, ORDER FOLLOWING ADDITIONAL 11 Plaintiffs BRIEFING AND ORDER SEVERING MATTER 12 v.
13 FRESNO DEPUTY SHERIFF’S ASSOCIATION, COUNTY OF FRESNO, 14 and XAVIER BECERRA in his official capacity as Attorney General of California, 15 Defendants 16 17 18 This is a dispute between current and former members of the Fresno County Sheriff’s 19 Department regarding the collection of union dues and vacation hours by the County of Fresno 20 (“the County”) for the benefit of the Fresno Deputy Sheriff’s Association (“FDSA”). Plaintiffs 21 seek relief under state law theories and Janus v. AFSCME, Council 31, 138 S.Ct. 2448 (2018) 22 (“Janus”). The active complaint is the Second Amended Complaint (“SAC”). On November 12, 23 2020, the Court granted in part FDSA’s Rule 12(b)(1) and Rule 12(b)(6) combined motion to 24 dismiss. See Doc. No. 74. The Court dismissed the first and third causes of action (which alleged 25 only federal law claims) and issued an order to show cause why the federal claims against the 26 County should not be dismissed for the same reasons that dismissal was appropriate as to the 27 FDSA. See id. The Court did not address the state law causes of action but reserved a ruling 28 pending receipt of the additional briefing. See id. After receiving additional briefing, the Court 1 dismissed without leave to amend the first cause of action and the third cause of action for conduct 2 that post-dated Janus. See Doc. No. 79. Based on the parties’ submissions, the Court also ordered 3 the parties to file additional briefing regarding whether the good faith defense has been applied to 4 a municipal entity like the County, whether any post-Janus cases have found a municipal entity 5 like the County liable for taking fees or vacation hours, and whether Janus applies retroactively. 6 See id. The County and Plaintiffs have now fully responded to the Court’s order for additional 7 briefing. For the reasons that follow, the Court will not dismiss any further claims, will sever the 8 claims of Plaintiffs Her and Chandavong, permit these Plaintiffs to amend with respect to the 9 FDSA, decline to exercise supplemental jurisdiction over the remainder of this case, and direct the 10 Clerk to close this case. 11 Plaintiffs’ Position 12 In prior briefing, Plaintiffs argued that Her and Chandavong still had viable claims against 13 the County for the County’s confiscation of vacation hours that pre-dated Janus. 14 In supplemental briefing, Plaintiffs have cited numerous lower courts that have held that 15 municipal entities are categorically barred from asserting a good-faith type of defense (which 16 might be shorthand for qualified immunity) and no case questions whether a differing analysis or 17 defense from that in Owen v. City of Independence, 445 U.S. 622 (1980) should apply. Only one 18 unpublished case with no substantive analysis has applied the good faith defense to a post-Janus 19 case. That case (Adams v. Teamsters Local Union 429, 2019 WL 8333531 (M.D. Pa. Dec. 5, 20 2019)) simply assumed that the good-faith defense applied. 21 Plaintiffs state that they are aware of no post-Janus cases in which a municipal entity was 22 held liable for agency fees or forced payments that were diverted from wages. In Aliser v. SEIU 23 Cal., 419 F.Supp.3d 1161 (N.D. Cal. 2019), a county was held not liable by successfully asserting 24 a Monell related defense. Specifically, the county’s actions were compelled by state law and thus, 25 did not represent a policy or custom of the county. Plaintiffs argue that Aliser does not apply 26 because the decision to divert vacation hours was a municipal policy that was not compelled by 27 state law. Additionally, in reply briefing, Plaintiffs argue that nothing in Abood indicates that an 28 employer can take vacation hours from non-union employees. Abood permitted employers to take 1 a portion of membership fees from non-members. Here, what has been taken is vacation hours, 2 not fees, and the same number of hours were taken from both members and non-members alike. 3 Finally, Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993) holds that a federal rule 4 that is announced and applied to the parties is retroactive. Application of the Harper rule leads to 5 the conclusion that Janus should apply retroactively to this case. Additionally, in reply, Plaintiffs 6 argue that the question of retroactivity is governed by Harper, not Chevron Oil Co. v. Huson, 404 7 U.S. 97 (1991). 8 Defendant’s Position 9 The County argues that Adams applied the good faith defense to a municipal entity. 10 Further, the Ninth Circuit has extended the good faith defense to private entities. While Owen 11 held that governmental entities are not entitled to qualified immunity, there is a significant 12 difference between the good faith defense and qualified immunity. In litigation against private 13 entities, courts have recognized that it is unfair for a private entity who relied on a presumptively 14 constitutional statute to be held liable while the state may invoke sovereign immunity and its 15 officials may invoke qualified immunity. The same principles would apply here where the FDSA 16 is entitled to a good faith defense, yet the County is not; the County simply acted in a ministerial 17 capacity by transferring the hours in compliance with law. The County received no benefit from 18 the transfer of hours. Instead, the FDSA used those hours to conduct business on behalf of 19 members and non-members. 20 The County also argues that it is unaware of any post-Janus cases that have held a 21 municipal entity liable for collecting fees or payments in accordance with Abood. In Aliser, the 22 Northern District found that mere compliance with mandatory state laws does not cause a 23 constitutional violation, and that the general decision to contract with unions using an agency shop 24 arrangement did not cause any constitutional violations. Here, California law (Cal. Gov. Code § 25 3502.5) authorized public employee union members to call for a vote on whether to impose an 26 agency shop, and when the vote approves an agency shop, the public employer is under a 27 mandatory duty to collect agency fees from its employees. Therefore, the County exercised no 28 discretion in taking the vacation hours. 1 Finally, the County argues that courts have recognized that the language actually used in 2 Janus suggests that retroactive application is not appropriate. All courts seem to assume that 3 Janus applies retroactively and then deny relief primarily through application of the good faith 4 defense. In deciding whether Janus applies retroactively, the Ninth Circuit dictates that the Court 5 should apply Huson. Application of the three Huson factors (whether the decision establishes a 6 new principle of law, whether retrospective operation will further or retard the rule’s operation in 7 light of the rule’s history, purpose, and effect, and whether the decision could produce substantial 8 inequitable results if applied retroactively) indicates that retroactive application should not occur. 9 Moreover, as indicated above, the County received no benefit from collecting the vacation hours 10 and the FDSA used those hours for the benefit of Her and Chandavong. 11 Discussion 12 1. Issues from Additional Briefing 13 a. Good Faith Defense 14 Private parties are generally not entitled to qualified immunity.1 See Wyatt v. Cole, 504 15 U.S. 158, 167-69 (1992); Franklin v. Fox, 312 F.3d 423, 444 (9th Cir. 2002). However, private 16 individuals and private entities may invoke a good faith affirmative defense to § 1983 liability. 17 Danielson v. Inslee, 945 F.3d 1096, 1097 (9th Cir. 2019); Clement v. City of Glendale, 518 F.3d 18 1090, 1096-97 (9th Cir. 2008). The good faith affirmative defense can apply to actions taken in 19 direct reliance on presumptively valid state laws and then-binding Supreme Court precedent. See 20 Danielson, 945 F.3d at 1097; Clement, 518 f.3d at 1096-97. 21 Like private parties, municipal entities may not assert the defense of qualified immunity. 22 Owen v. City of Independence, 445 U.S. 622, 638 (1980); Hernandez v. City of San Jose, 897 23 F.3d 1125, 1139 (9th Cir. 2018). Unlike private parties, courts that have addressed a 24 municipality’s assertion of the good faith affirmative defense have generally rejected the defense 25 based on Owen or cases that have followed Owen. E.g. Saye v. St. Vrain Valley Sch. Dist., 650 26 F.Supp. 716, 722 (D. Col. 1986). 27
28 1 A private party who is hired by a governmental entity to perform public services may assert the qualified immunity 1 Owen did not deal with the good faith affirmative defense as enunciated by the Ninth 2 Circuit in Danielson and Clement. Instead, Owen dealt with whether a municipal entity may assert 3 qualified immunity. Owen, 445 U.S. at 624-25. However, while qualified immunity and the good 4 faith affirmative defense are not identical, Owen’s language and rationale are illuminating, if not 5 dispositive. Owen explained that Monell v. New York Dept. of Social Services, 436 U.S. 658 6 (1978) resolved the question of “whether local governments, although not entitled to an absolute 7 immunity, should be afforded some form of official immunity in § 1983 suits.” Id. at 624. The 8 Eighth Circuit had extended qualified immunity to a city because the city officials had “acted in 9 good faith and without malice.” Id. at 625. In reversing the Eighth Circuit, Owen noted: a long 10 legal history of municipal entities being held liable for tortious conduct without any mention of an 11 entitlement to immunity, the purpose of § 1983 was to provide compensation for past abuses and 12 to deter future unconstitutional behavior, the likelihood that many victims of municipal 13 malfeasance would be left with no remedy if the municipality could assert “a good faith defense,” 14 and that the two rationales that support official immunity were unpersuasive when applied to 15 municipalities. Id. at 639-55. In summarizing its holding, Owen explained: 16 In sum, our decision holding that municipalities have no immunity from damages liability flowing from their constitutional violations harmonizes well with 17 developments in the common law and our own pronouncements on official immunities under § 1983. Doctrines of tort law have changed significantly over the 18 past century, and our notions of governmental responsibility should properly reflect that evolution. No longer is individual “blameworthiness” the acid test of liability; 19 the principle of equitable loss-spreading has joined fault as a factor in distributing the costs of official misconduct. 20 We believe that today's decision, together with prior precedents in this area, 21 properly allocates these costs among the three principals in the scenario of the § 1983 cause of action: the victim of the constitutional deprivation; the officer whose 22 conduct caused the injury; and the public, as represented by the municipal entity. The innocent individual who is harmed by an abuse of governmental authority is 23 assured that he will be compensated for his injury. The offending official, so long as he conducts himself in good faith, may go about his business secure in the 24 knowledge that a qualified immunity will protect him from personal liability for damages that are more appropriately chargeable to the populace as a whole. And 25 the public will be forced to bear only the costs of injury inflicted by the “execution of a government's policy or custom, whether made by its lawmakers or by those 26 whose edicts or acts may fairly be said to represent official policy.” [Monell, 436 U.S. at 694]. 27 Id. at 657-58 (emphasis added). The Fifth Circuit characterized Owen as holding that 28 1 “municipalities have no immunity in § 1983 actions, and that good faith does not serve as a 2 defense to liability.” Wheeler v. Pleasant Grove, 664 F.2d 99, 101 (5th Cir. 1981). 3 In Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 4 166 (1993), the Supreme Court addressed pleading standards. In relevant part, Leatherman 5 discussed the holdings of Monell and Owen. Leatherman explained that Monell and Owen “make 6 it quite clear that, unlike various government officials, municipalities do not enjoy immunity from 7 suit – either absolute or qualified – under § 1983. In short, a municipality can be sued under § 8 1983, but it cannot be held liable unless a municipal policy or custom caused the constitutional 9 injury.” Id. 10 In a case that is similar to the contentions made by the County, the Ninth Circuit cited 11 Owen to deny an attempted good faith/immunity defense. In Evers v. County of Custer, 745 F.2d 12 1196, 1203 (9th Cir. 1984), an Idaho County argued that “it should be immune because it was 13 merely acting according to state law, rather than carrying out County policy.” The Ninth Circuit 14 found the argument to be without merit. “This argument, however, goes only to the question of 15 the Commissioners’ good faith in applying the statute. The fact that the Commissioners are 16 immune from suit under § 1983 because of their good faith does not relieve the County from 17 liability.” Id. 18 Together, Owen, Leatherman, and Evers can be read as standing for the proposition that, in 19 order to redress constitutional wrongs, a municipality will be held liable for constitutional injuries 20 caused by its practice, policy, or custom, irrespective of its officers’ ability to assert qualified 21 immunity and irrespective of any good faith reliance on state statutes. This proposition would 22 seem to undercut application of a good faith affirmative defense to a municipality. Recognizing 23 the good faith defense for a municipality could negate Owen’s balancing and goal of ensuring the 24 availability of compensation for injuries caused by municipal policies and practices. To the 25 Court’s knowledge, and as confirmed by the parties’ briefing, no court in a reasoned decision has 26 extended the good faith affirmative defense to municipalities. In light of Owen, Leatherman, and 27 Evers, until the Supreme Court or the Ninth Circuit holds otherwise, this Court cannot hold that 28 the County is entitled to assert the good faith affirmative defense. 1 b. Retroactive Application of Janus 2 “When [the Supreme Court] applies a rule of federal law to the parties before it, that rule is 3 the controlling interpretation of federal law and must be given full retroactive effect in all cases 4 still open on direct review and as to all events, regardless of whether such events predate or 5 postdate our announcement of the rule.” Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 97 6 (1993); see also Reynoldsville Casket Co. v. Hyde, 514 U.S. 749, 752 (1995); Hajro v. United 7 States Citizenship & Immigration Servs., 811 F.3d 1086, 1099 (9th Cir. 2016). When the 8 Supreme Court “does not ‘reserve the question whether its holding should be applied to the parties 9 before it,’ however, an opinion that announces a rule of federal law ‘is properly understood to 10 have followed the normal rule of retroactive application’ and must be ‘read to hold . . . that its rule 11 should apply retroactively to the litigants then before the Court.’” Harper, 509 U.S. at 97-98 12 (quoting James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 539 (1991) (Souter, J)). Thus, 13 “[s]ilence on the issue [of retroactivity] indicates that the decision is to be given retroactive 14 effect.” Hajro, 811 F.3d at 1099. When the Supreme Court announces a retroactive rule of federal 15 law, the rule must be applied retroactively by all courts. See Reynoldsville Casket, 514 U.S. at 16 752; Hajro, 811 F.3d at 1099. 17 The question is whether the above principles apply to Janus such that its First Amendment 18 holding applies retroactively. Janus overruled Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977). 19 Janus, 138 S.Ct. at 2486. As explained by the Ninth Circuit, Abood had “held that unions could 20 collect compulsory agency fees from nonmembers to finance their collective bargaining activities, 21 without running afoul of the First and Fourteenth Amendments.” Danielson, 945 F.3d at 1097. 22 After the Supreme Court determined that Abood was wrongly decided and that stare decisis did 23 not sufficiently support affirming Abood’s continued vitality, the Supreme Court concluded: 24 For these reasons, States and public-sector unions may no longer extract agency fees from nonconsenting employees. Under Illinois law, if a public-sector 25 collective-bargaining agreement includes an agency-fee provision and the union certifies to the employer the amount of the fee, that amount is automatically 26 deducted from the nonmember’s wages. §315/6(e). No form of employee consent is required. 27 This procedure violates the First Amendment and cannot continue. Neither an 28 agency fee nor any other payment to the union may be deducted from a 1 unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot 2 be presumed. Johnson v. Zerbst, 304 U. S. 458, 464 (1938); see also Knox, 567 U. S. at 312-313. Rather, to be effective, the waiver must be freely given and shown 3 by “clear and compelling” evidence. Curtis Publishing Co. v. Butts, 388 U. S. 130 (1967) (plurality opinion); see also College Savings Bank v. Florida Prepaid 4 Postsecondary Ed. Expense Bd., 527 U. S. 666, 680-682 (1999). Unless employees clearly and affirmatively consent before any money is taken from them, this 5 standard cannot be met.
6 *** Abood was wrongly decided and is now overruled. The judgment of the United 7 States Court of Appeals for the Seventh Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion. 8 Janus, 138 S.Ct. at 2486 (emphasis added). This holding, as well as a nutshell summary of the 9 entire opinion, was also given in the first two paragraphs of Janus: 10 Under Illinois law, public employees are forced to subsidize a union, even if they 11 choose not to join and strongly object to the positions the union takes in collective bargaining and related activities. We conclude that this arrangement violates the 12 free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern. 13 We upheld a similar law in [Abood], and we recognize the importance of following 14 precedent unless there are strong reasons for not doing so. But there are very strong reasons in this case. Fundamental free speech rights are at stake. Abood was poorly 15 reasoned. It has led to practical problems and abuse. It is inconsistent with other First Amendment cases and has been undermined by more recent decisions. 16 Developments since Abood was handed down have shed new light on the issue of agency fees, and no reliance interests on the part of public-sector unions are 17 sufficient to justify the perpetuation of the free speech violations that Abood has countenanced for the past 41 years. Abood is therefore overruled. 18 Id. at 2459-60 (emphasis added). 19 From these passages, the Court concludes that application of Harper leads to the 20 conclusion that Janus applies retroactively. 21 First, the Supreme Court recognized the rule that the First Amendment is violated when 22 non-union public employees are forced to subsidize a union without having affirmatively and 23 freely given their consent for the subsidy. See Janus, 138 S.Ct. at 2459-60, 2486. The Supreme 24 Court analyzed § 315/6(a) of the Illinois Public Labor Relations Act under this constitutional rule. 25 Because § 315/6(a) forced all public employees to subsidize a union, irrespective of consent or 26 actual membership in the union, § 315/6(a) violated the First Amendment. See id. In other words, 27 the Supreme Court applied the First Amendment constitutional rule to the parties in the case and 28 1 found that § 315/6(a) was unconstitutional. Under Harper, this application of a constitutional rule, 2 which led to the invalidation of § 315/6(a), means that Janus applies retroactively. See 3 Reynoldsville Casket, 514 U.S. at 752; Harper, 509 U.S. at 97-98. 4 Second, Janus did not reserve the question of whether its holding should be applied to the 5 parties before it. Janus overruled Abood, invalidated § 315/6(a) based on the newly announced 6 constitutional rule, and then remanded for further proceedings. See Janus, 138 S.Ct. at 2486. 7 Nowhere in Janus is there any discussion about retroactivity or application of the new rule being 8 reserved. Indeed, the terms “prospective” and “retroactive” are not found in the opinion. The 9 absence of a reservation, either in terms of retroactivity or application of the new rule, shows that 10 Janus is to be given retroactive effect. Harper, 509 U.S. at 97-98; Hajro, 811 F.3d at 1099. 11 It is true that some courts have found that the issue of retroactivity “poses some knotty 12 problems.” Janus v. American Fed’n of State, 942 F.3d 352, 360 (7th Cir. 2019). These courts 13 often point to language within Janus that arguably suggests purely prospective application, but 14 these courts generally assume retroactivity without actually deciding the issue. E.g. Akers v. 15 Maryland State Educ. Ass’n, 990 F.3d 375, 379 (4th Cir. 2021); Wholean v. CSEA SEIU Loc. 16 2001, 955 F.3d 332, 336 (2d Cir. 2020); Lee v. Ohio Educ. Ass’n, 951 F.3d 386, 389 (6th Cir. 17 2020); Janus, 942 F.3d at 358-60. For example, Janus stated that public sector unions received a 18 “considerable windfall” through their collection of representation fees during Abood, the 19 “unconstitutional extractions cannot be allowed to continue indefinitely,” and that the unions “may 20 no longer extract” representation fees from non-consenting non-union members. Lee, 951 F.3d at 21 389 (quoting Janus, 138 U.S. at 2485-86; see also Akers, 990 F.3d at 379 (same). The Second 22 Circuit has gone so far as to “note” that “nothing in Janus suggests that the Supreme Court 23 intended its ruling to be retroactive. Indeed, the Janus Court held that ‘States and public-sector 24 unions may no longer extract agency fees from nonconsenting employees,’ Janus, 138 S.Ct. at 25 2486 (emphasis added), and the Supreme Court reversed and remanded for further proceedings 26 rather than apply its new rule to the parties before it.” Wholean, 955 F.3d at 336. Based on the 27 status of this case, the Court cannot assume that Janus is to be applied retroactively. While the 28 Court appreciates these courts’ skepticism, the Court still concludes that Janus is retroactive. 1 First, the Court respectfully disagrees with Wholean that Janus did not apply its 2 constitutional rule to the parties before it. As stated above, the new constitutional rule is that, 3 under the First Amendment, public employees who are not union members and who do not 4 consent to subsidizing a union cannot be forced to do so. See Janus, 138 S.Ct. at 2459-60, 2486. 5 Instead of simply announcing that rule and letting the Seventh Circuit determine how the new rule 6 applies to any of the issues raised by the parties, the Supreme Court overruled Abood and held that 7 § 315/6(a) violated the First Amendment rule. The case was remanded with the understanding 8 that the plaintiffs had been subjected to an unconstitutional practice and statute. As result, the 9 Seventh Circuit analyzed affirmative defense issues (good faith defense and statute of limitations), 10 whether the union was a “person” who “acted under color of state law” (§ 1983 elements), and 11 applied the good faith defense to defeat Mr. Janus’s claimed remedy; it did not evaluate the 12 constitutionality of § 315/6(a) or whether Mr. Janus had suffered a constitutional injury. See 13 Janus, 942 F.3d at 354, 360-67. It is unclear how the invalidation of § 315/6(a) is anything other 14 than application of the new First Amendment rule to the issues and parties of Janus. Therefore, 15 the Court concludes that Janus applied its new First Amendment rule to the parties before it. 16 Second, it seems to the Court that focusing on potentially forward looking statements to 17 determine “prospectivity”/retroactivity is contrary to Harper. Harper set bright line rules: (1) 18 application of a new rule to the parties requires all courts to apply the rule retroactively; (2) silence 19 on the issue of whether a rule applies retroactively means that the rule applies retroactively; and 20 (3) the Supreme Court’s reservation of the issue of retroactivity/whether to apply the rule to the 21 parties before it means that courts are not required to automatically apply the rule retroactively. 22 See Harper, 509 U.S. at 97-99; see also Hajro, 811 F.3d at 1099; Shah v. PAN AM Servs., 148 23 F.3d 84, 91 (2d Cir. 1998) (holding in part that Harper does not require retroactive application 24 where the Supreme Court explicitly ‘reserves the question whether its holding should be applied to 25 the parties before it.’” (quoting Harper, 509 U.S. at 97) (emphasis added)).2 In other words, the 26
27 2 The Court notes that in a withdrawn opinion (that was nonetheless cited without reservation in Hajro, 811 F.3d at 1099), consistent with Shah, the Ninth Circuit viewed Harper as admonishing that “if a decision is not to be given 28 retroactive effect, its prospective-only application should be announced in the opinion itself.” Gonzales v. United 1 Supreme Court has indicated that Courts should look for a reservation of the issue in an opinion, 2 one that is express or clear. See Shah, 148 F.3d at 91; see also Gonzales, 659 F.3d at 938; 3 Tagaeva v. BNV Home Care Agency, Inc., 2018 U.S. Dist. LEXIS 42081, *8 (E.D. N.Y. Mar. 13, 4 2018) (characterizing Harper as requiring an “express reservation” in order for the general rule of 5 retroactivity not to apply); Digital Equip Corp. v. Department of Revenue, 916 P. 933, 937 (Wash. 6 1996) (same); Dart Indus. v. Clark, 657 A.2d 1062, 1066 (R.I. 1995) (same). Looking to 7 potentially forward looking and ambiguous statements that could have several implications and 8 connotations is an approach that could easily lead to inconsistent results and would not lead to 9 universal retroactive applications of new federal rules. Such a result would be contrary to Harper. 10 Third, and relatedly, Harper’s “reservation” language comes directly from Justice Souter’s 11 opinion in Beam, specifically page 539. See Harper, 509 U.S. at 97-98 (citing Beam, 501 U.S. at 12 539). Beam at page 539 explained that because Bacchus Imports, Ltd. v. Dias, 468 U.S. 263 13 (1984) “did not reserve the question whether its holding should be applied to the parties before it,” 14 Bacchus was to be read as mandating retroactive application. See Beam, 501 U.S. at 539. Beam 15 contrasted Bacchus with American Trucking Assns, Inc. v. Scheiner, 483 U.S. 266 (1987). Beam 16 gave the following parenthetical description of Scheiner: “remanding case to consider whether 17 ruling ‘should be applied retroactively and to decide other remedial issues.’”3 Beam, 501 U.S. at 18 539. There is no similar language to Scheiner that can be found in Janus.4 Again, Janus never 19 states that retroactivity or application of the new First Amendment rule is being reserved, nor does 20 Janus even use the terms “prospective” or “retroactive” anywhere in its opinion. While there are 21 forward looking statements in Janus, those statements do not clearly or expressly purport to be 22 addressing retroactivity, nor do the statements appear within the context of a discussion of 23 3 The Court notes that the retroactive application of a new rule does not “determine what ‘appropriate remedy’ (if any) 24 [a party] should obtain.” Davis v. United States, 564 U.S. 229, 243 (2011); see Danielsen, 945 F.3d at 1099 (“The Supreme Court has made clear that right and remedy must not be conflated, and that retroactivity of a right does not 25 guarantee a retroactive remedy.”); see also Janus, 942 F.3d at 361+62.
26 4 The Court notes that in Shah, the Second Circuit held that the Supreme Court reserved the question of retroactivity in Lexecon, Inc. v. Millberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). Specifically, Shah explained that 27 Lexecon reversed and remanded a lower court opinion but also noted a party’s “prospectivity” argument, but held that it was “unnecessary for [the Court] to consider [that argument]” because it was not presented below and in the 28 opposition to certiorari. See Shah, 148 F.3d at 91 (citing Lexecon, 523 U.S. at 42-43 & n.5). Again, there is no 1 retroactivity. It seems more plausible that, instead of intending to hold that Janus applies 2 prospectively, the Janus majority was addressing a dissent that repeatedly emphasized the 41 year 3 validity of Abood, or answering particular arguments by the litigants, or merely emphasizing that 4 an older and previously valid practice was too offensive to the First Amendment to be upheld 5 solely on the basis of stare decisis or longevity. The forward looking statements in Janus (as 6 identified in cases like Akers) are insufficient similar to Scheiner for the Court to conclude that 7 they represent a reservation of the retroactivity issue or that the Supreme Court intended Janus to 8 be applied prospectively. See Shah, 148 F.3d at 91; see also Gonzales, 659 F.3d at 938; Tagaeva, 9 2018 U.S. Dist. LEXIS 42081 at *8; Digital Equip Corp., 916 P. at 937; Dart Indus., 657 A.2d at 10 1066. Therefore, the failure of Janus to reserve the retroactivity question means that Janus is to 11 be applied retroactively. See Harper, 509 U.S. at 97-98; Hajro, 811 F.3d at 1099. 12 Fourth, the fact that the Supreme Court ended Janus with a remand to the Seventh Circuit 13 “for further proceedings consistent with this order” is not dispositive. Simply establishing that a 14 constitutional violation has occurred and invalidating a statute does not answer issues with respect 15 to remedies, other elements of 42 U.S.C. § 1983, or affirmative defenses. As noted above, the 16 Seventh Circuit on remand addressed those other issues and ultimately held that the good faith 17 affirmative defense applied to the union, which defeated Mr. Janus’s requested damages. See 18 Janus, 942 F.3d at 354, 360-67. Moreover, in Bacchus, a cased that Beam clarified was to be read 19 as retroactive because there was no reservation of the issue in that opinion, see Beam, 501 U.S. at 20 539, the Supreme Court reversed the Supreme Court of Hawaii and “remand[ed] for further 21 proceedings not inconsistent with this opinion.” Bacchus, 468 U.S. at 277. Similarly, in United 22 States v. James Daniel Good Real Prop., 510 U.S. 43, 65 (1993), the Supreme Court held that the 23 United States had filed its lawsuit within the applicable limitations period. Good then ended by 24 remanding the matter “for further proceedings consistent with this opinion.” Id. The Ninth 25 Circuit subsequently applied Harper to Good and held that Good was to be applied retroactively. 26 See United States v. 20832 Big Rock Dr., 51 F.3d 1402, 14005-06 (9th Cir. 1995); see also United 27 States v. One Parcel of Real Property, Located at 9638 Chicago Heights, 27 F.3d 327, 329 (8th 28 Cir. 1994) (holding that Good was to be applied retroactively). 1 In sum, after applying Harper, the Court concludes that Janus is to be applied 2 retroactively.5 3 c. Municipal Liability Post-Janus 4 The parties have been unable to find any cases post-Janus in which a municipality like the 5 County has been held liable for pre-Janus conduct. However, the parties have found and 6 discussed Aliser v. SEIU Cal., 419 F.Supp.3d 1161, 1165 (N.D. Cal. 2019). 7 In Aliser, a number of plaintiffs brought claims against three California counties under § 8 1983 for continuing to deduct union dues after the plaintiffs communicated their desire to resign 9 their union membership. Aliser, 419 F.Supp.3d at 1164-65. The Counties all relied on Cal. Gov’t 10 Code § 1157.12(b) to deduct dues. See id. Section 1157.12(b) “requires public employers to 11 direct all employee requests for changes in dues deductions to the unions, and to rely on the 12 unions for information regarding which employees should have dues deducted from their 13 paychecks.” Aliser, 419 F.Supp.3d at 1165 (quoting Cal. Gov. Code § 1157.12(b)). Aliser 14 rejected the plaintiffs’ claims against the counties since no plausible Monell claim had been stated: 15 Regardless of whether it violates the Constitution for public employers to rely on unions for information regarding dues deductions, the plaintiffs have not 16 adequately alleged that the three county defendants (Riverside, Monterey, and Alameda) are liable for this conduct under Monell v. Department of Social Services 17 of the City of New York, 436 U.S. 658 (1978). For municipal liability to attach under Monell, the constitutional violation must be caused by an official policy of 18 the municipality. Sandoval v. County of Sonoma, 912 F.3d 509, 517 (9th Cir. 2018). Here, however, the plaintiffs have not plausibly alleged any county policy 19 of relying on unions for dues deduction information — rather, it appears that the counties were simply complying with state law. See California Government Code 20 § 1157.12. The state statute uses mandatory language, and the plaintiffs have not suggested that the counties had discretion under state law to act contrary to the 21 statute's instructions. See id. (“Public employers . . . shall . . . [d]irect employee requests to cancel or change deductions for employee organizations to the 22 employee organization, rather than to the public employer. The public employer shall rely on information provided by the employee organization regarding whether 23 deductions for an employee organization were properly canceled or changed . . . .” (emphasis added)). When a municipality exercises no discretion and merely 24 complies with a mandatory state law, the constitutional violation was not caused by an official policy of the municipality. See Vives v. City of New York, 524 F.3d 25 346, 353 (2d Cir. 2008); see also Evers v. County of Custer, 745 F.2d 1196, 1203 26 5 The County cites Nunez-Reyes v. Holder, 646 F.3d 684, 690 (9th Cir. 2011) to argue that Chevron Oil Co. v. Huson, 27 404 U.S. 97 (1971) remains good law and that the Chevron Oil factors show that Janus should be applied prospectively. However, as discussed above, Harper controls whether Janus is to be applied retroactively. The cited 28 passage from Nunez-Reyes was a passage in which the Ninth Circuit was deciding whether to announce a new federal 1 the plaintiffs' claims against the counties for both prospective and retrospective relief. See Los Angeles County v. Humphries, 562 U.S. 29, 37, 131 S. Ct. 447, 178 2 L. Ed. 2d 460 (2010).
3 The plaintiffs argue that Monell liability can be based on the counties' policies of “establish[ing] and enforc[ing] an agency shop,” Dkt. 124 at 4. But that is wrong. 4 The general decision to contract with unions using an agency shop arrangement did not “cause” the specific allegedly unconstitutional conduct that forms the basis of 5 this claim. 6 Id. at 1165. 7 At this time, the Court cannot follow Aliser. 8 First, the County invokes Cal. Gov. Code § 3502.5, not Cal. Gov. Code § 1157.12(b) 9 which was at issue in Aliser. Under § 3502.5, an “agency shop” may be created in one of two 10 ways, either by negotiation between the public employer and a recognized public employee 11 organization, or by a petition signed by 30% of the bargaining unit members combined with 12 majority approval in a secret ballot election. See Cal. Gov. Code §§ 3502.5(a), (b); Orange Cnty. 13 Water Dist. v. Public Employment Relations Bd., 8 Cal.App.5th 52, 61-62 (2017). An “agency 14 shop” for purposes of § 3502.5 means “an arrangement that requires an employee, as a condition 15 of continued employment, either to join the recognized employee organization or to pay the 16 organization a service fee in an amount not to exceed the standard initiation fee, periodic dues, and 17 general assessments of the organization.” Cal. Gov. Code § 3502.5(a); County of L.A. v. Los 18 Angeles Cnty Employee Relations Com., 56 Cal.4th 905, 912 (2013). The County does not 19 specify which provision of § 3502.5 actually applies with respect to the FDSA or the applicable 20 MOU. If the “agency shop” in this case was created as result of the procedures of § 3502.5(a), i.e. 21 negotiation between the Union and the County, then it is arguable that the County made a 22 voluntary policy decision and was not acting under any mandatory state law duty. If the “agency 23 shop” was created through § 3502.5(b), i.e. through petition and election, then it is arguable that 24 the County was simply following mandatory duties under state law and not making a voluntary 25 policy decision when it collected fees and vacation hours. The County’s briefing suggests this is 26 the method/subsection at issue. However, the parties’ briefing on the significance of § 3502.5 is 27 short and not particularly developed. For example, there is no discussion about whether the 28 collection of vacation hours by the County was done purely through § 3502.5, or whether it was 1 the result of an otherwise voluntary agreement between the FDSA and the County. In other 2 words, there is an insufficient explanation of how the vacation hours that were collected from non- 3 members Chandavong and Her fit within § 3502.5 and any agreements between the County and 4 the FDSA. Moreover, the FAC does not mention § 3502.5. Accepting evidence regarding the 5 nature of the “agency shop” at issue or the history of the agreement to collect vacation hours 6 would entail acceptance of extrinsic evidence. The additional briefing received for this order was 7 requested by the Court in connection with a Rule 12(b)(6) motion to dismiss.6 Consideration of 8 extrinsic evidence would be inconstant with Rule 12(b)(6). See Fed. R. Civ. P. 12(d). Therefore, 9 there is insufficient argument and evidence regarding § 3502.5’s application to this case, and, 10 given the procedural posture of case, additional necessary information to support the County’s 11 arguments cannot be received at this time. 12 Second, the law is unsettled in the Ninth Circuit with respect to a municipality’s liability 13 under § 1983 when the municipality is following or acting in accordance with state law. Some 14 courts find that there is no liability when the municipality follows a non-discretionary mandatory 15 state law because the municipality did not make a policy decision. E.g. Quezambra v. United 16 Domestic Workers of Am., 445 F.Supp.3d 695, 706 (C.D. Cal. 2020); Aliser, 419 F.Supp.3d at 17 1165; Mitchell v. Atkins, 387 F.Supp.3d 1193, 1201-02 (W.D. Wash. 2019). Some courts find or 18 suggest that following state law, even if a non-discretionary, mandatory, state law duty is 19 involved, does not relieve a municipality of liability. E.g. Denning v. Lincoln Cnty. Sheriff’s 20 Office, 2020 U.S. Dist. LEXIS 12288, *33-*34 (D. Ida. Jan. 21, 2020); Brewster v. City of L.A., 21 2019 U.S. Dist. LEXIS 225770, *21 n.6 (C.D. Cal. July 29, 2019); Conroy v. City of Philadelphia, 22 421 F.Supp.2d 879, 886-87 (E.D. Pa. 2006). Other courts have noted that the issue has not been 23 definitively settled. See Bruce & Tanya & Assocs. v. Board of Supervisors, 355 F.Supp.3d 386, 24 400 n.6 (E.D. Va. 2018). Within the Ninth Circuit, at least, part of the disagreement involves how 25 to interpret Evers. Given the divide, the Court will not decide the issue without more in depth 26 briefing from the parties. 27 6 The FDSA challenged the SAC through a combined Rule 12(b)(1) and Rule 12(b)(6) motion. However, mootness 28 was the only issue addressed by the Court through the prism of Rule 12(b)(1). The County’s liability (if any) is 1 Third, Aliser appears to have involved only the collection of ordinary membership dues. 2 In this case, Chandavong and Her emphasize that they are complaining about vacation hours that 3 were involuntarily taken from them. Further, they contend that no state law compelled the transfer 4 of vacation hours from them to the FDSA, and that Abood authorized only the collection of a 5 portion of fees and not the collection of the same amount of fees or vacation hours from union 6 members and non-members alike. The parties do not spend a great deal of time briefing these 7 specific issues. However, the Court finds that the questions raised by Chandavong and Her are 8 significant. For example, the nature of the vacation hours earned by Chandavong and Her, and 9 whether the transfer of vacation hours can reasonably be classified as part of a service fee or 10 special assessment, would be relevant to not only determining whether a constitutional violation 11 occurred, but also whether their collection may have been part of a mandatory duty imposed on 12 the County through the establishment of an “agency shop” under § 3502.5.7 It may be that 13 vacation hours are equivalent to or a part of a service fee or membership dues.8 But until further 14 proceedings occur, the Court cannot hold that the fact that Chandavong and Her are challenging 15 the taking of vacation hours is immaterial. 16 In sum, this appears to be a unique case. The ultimate resolution of the County’s liability 17 (if any) will have to await further proceedings. 18 d. Conclusion 19 In light of the arguments made in connection with the FDSA’s motion to dismiss the SAC 20 and the supplemental briefing received, the Court will not dismiss the third cause of action against 21 the County for vacation hours involuntarily taken from Chandavong and Her pre-Janus when they 22 were not members of the FDSA. 23 2. The FDSA 24 In the order on the FDSA’s motion to dismiss the SAC, the Court dismissed without leave 25 7 The Court at this time is not resolving the question of whether the County was under a mandatory duty, or what the 26 effect of a non-discretionary mandatory duty on the County would be for purposes of § 1983. The Court is only noting the potential issues surrounding the proper classification of the vacation hours taken. 27 8 The Court notes that the third cause of action does not allege that any part of the vacation hours were collected 28 properly or that only a portion of the vacation hours were collected unconstitutionally. The Court reads the SAC as 1 to amend Her and Chandavong’s third cause of action for vacation hours taken pre-Janus. Upon 2 further consideration, the Court finds that the claims should be dismissed with leave to amend. At 3 the time of dismissal, Chandavong and Her had not been appraised of any pleading flaws for that 4 claim. Generally, the first time a claim is dismissed for a particular deficiency, leave to amend is 5 granted unless it is clear that amendment would be futile. See Garmon v. County of L.A., 828 6 F.3d 837, 842 (9th Cir. 2016). The supplemental briefing received leads the Court to conclude 7 that amendment would not necessarily be futile. Therefore, the Court will grant Chandavong and 8 Her leave to amend their third cause of action against the FDSA for pre-Janus vacation hours that 9 were involuntarily taken when Chandavong and Her were not members of the FDSA. 10 3. Severance 11 In relevant part, Rule 21 provides that a court may sua sponte “at any time, on just terms, 12 add or drop a party. The court may also sever any claim against any party.” Fed. R. Civ. P. 21; 13 Bain v. California Teachers Ass’n, 891 F.3d 1206, 1215 (9th Cir. 2018). “[A] finding of 14 misjoinder is not a prerequisite to severing parties or claims under Rule 21.” Acevedo-Garcia v. 15 Monroig, 351 F.3d 547, 560 n.5 (1st Cir. 2003); Wyndham Assoc. v. Bintliff, 398 F.2d 614, 618 16 (2d Cir. 1968). Courts have broad discretion in determining whether to sever claims or parties. 17 See In re EMC Corp., 677 F.3d 1351, 1355 (Fed. Cir. 2012); Rice v. Sunrise Express, Inc., 209 18 F.3d 1008, 1016 (7th Cir. 2000). A severance may be justified by various considerations, 19 including avoiding undue delay or prejudice to the parties, see Applewhite v. Reichhold Chems., 20 Inc., 67 F.3d 571, 574 (5th Cir. 1995), whether there are significantly different factual situations or 21 legal questions, Langley v. Guiding Hands Sch., Inc., 2021 U.S. Dist. LEXIS 63302, *37 (E.D. 22 Cal. Mar. 30, 2021), whether the claims are otherwise logically distinct, see Aiello v. Kingston, 23 947 F.2d 834, 835 (7th Cir. 1991), or whether severance will serve the ends of justice and further 24 the prompt and efficient disposition of litigation. Crown Cork & Seal Co. v. Credit Suisse First 25 Boston Corp., 288 F.R.D. 331, 332 (S.D. N.Y. 2013); Tab Express Int’l, Inc. v. Aviation 26 Simulation Tech., Inc., 215 F.R.D. 621, 623 (D. Kan. 2003). A severance under Rule 21 results in 27 the creation of a new, distinct, separate case. Demartini v. Demartini, 964 F.3d 813, 821 (9th Cir 28 .2020); Herklotz v. Parkinson, 848 F.3d 894, 898 (9th Cir. 2017). To proceed in federal court, the 1 newly created severed action must have its own independent basis for federal jurisdiction; the 2 severed action cannot rely solely on supplemental jurisdiction. Herklotz, 848 F.3d at 898; see also 3 Demartini, 964 F.3d at 821. 4 Here, the remaining claims can be divided into two groups. The first group consists of 5 state law claims based on the attempted resignation from the FDSA by FDSA members Campos, 6 Chandavong, Vang, and Yang – this is the second cause of action. The second group consists of 7 federal and possibly state law claims based on involuntarily taken vacation hours from FDSA non- 8 members Her and Chandavong – this is the third cause of action.9 These two groups of claims are 9 distinct. They involve different injuries, different wrongful acts by Defendants, and are based on 10 different theories of recovery. Moreover, the only federal issues remaining in this case involve 11 only non-FDSA members. The Court detects no prejudice to any party if these two claim groups, 12 and more specifically the claims between FDSA member Plaintiffs and FDSA non-member 13 Plaintiffs, are severed. In fact, severing the claims of the FDSA non-member Plaintiffs will enable 14 the Court to exercise its discretion under 28 U.S.C. § 1367(c)(3) and complete the substantive 15 aspects of the litigation as to the FDSA member Plaintiffs in this Court.10 Also, the FDSA 16 member Plaintiffs will be able to pursue their state law claims in state court, a preferable forum 17 considering the claims and policy arguments made and implicated by the second cause of action. 18 Given these considerations, the Court finds it appropriate to utilize Rule 21 to sever claims. 19 The claims of Chandavong (as a non-member of FDSA) and Her found in the third cause of action 20 based on the involuntary taking of vacation hours against the County and the FDSA will be 21 severed from all other claims. 22
23 9 Chandavong was initially an FDSA member, but successfully resigned in December 2016. See SAC ¶ 24. Therefore, from December 2016 forward, Chandavong was not an FDSA member. In the Court’s December 17, 2020 24 order dismissing the first cause of action and part of the third cause of action against the County, the Court stated in a footnote that Chandavong’s claims for vacation hours ran from December 2016 to July 2018. See Doc. No. 79 at 3 25 n.1. The Footnote indicated that this was connected to the good faith defense. See id. To clarify, Chandavong’s claim runs from December 2016 because this was the date Chandavong was no longer a member of the FDSA. See 26 Janus, 138 S.Ct. at 2486; Doc. No. 74 at 12:15-23.
27 10 The Court recognizes that there may be issues or motions relating to attorneys’ fees that may remain. Further, the 28 FDSA member Plaintiffs will be able to appeal any of the Court’s decisions to the Ninth Circuit if they desire. 1 As part of the severance process, Chandavong and Her will be required to file a new 2 complaint, which will be styled as the Third Amended Complaint (“TAC”). The TAC will 3 eliminate all allegations from the SAC that are not relevant to pursuing a claim found in the SAC’s 4 third cause of action. As discussed above, although the Court previously dismissed the FDSA 5 without leave to amend, the TAC may (but is not required to) include additional allegations 6 against the FDSA in order to pursue claims based on the involuntary taking of vacation hours. 7 Also, it is not entirely clear whether the third cause of action contains state and federal claims. 8 The § 1983 cause of action must be pled separately as its own distinct cause of action in the TAC. 9 To the extent Chandavong and Her are attempting to allege pendent state law claims based on the 10 involuntary taking of vacation hours, each state law claim must be alleged expressly and as a 11 separate and distinct cause of action; Plaintiffs will not be permitted to lump all state law claims 12 together under a single cause of action. Finally, if Plaintiffs intend to use an incorporation by 13 reference pleading technique, then they shall refrain from incorporating all prior allegations under 14 a cause of action when all prior allegations are not relevant or appropriately incorporated by 15 reference. Incorporating by reference all prior allegations irrespective of relevance is an improper 16 pleading technique; instead, specific relevant paragraphs or specific groups of paragraphs are to be 17 incorporated by reference under each cause of action. See Weiland v. Palm Beach Cnty. Sheriff’s 18 Office, 792 F.3d 1313, 1321-23 (11th Cir. 2015); Deerpoint Grp., Inc. v. Agrigenix, LLC, 345 19 F.Supp.3d 1207, 1234 n.14 (E.D. Cal. 2018). 20 4. Supplemental Jurisdiction 21 By severing the claims of Chandavong and Her, two separate and distinct cases have been 22 created. Demartini, 964 F.3d at 821 Herklotz, 848 F.3d at 898. Further, by severing the claims of 23 Chandavong and Her in the third cause of action, the Court has disposed of all of the federal 24 causes of action over which it had original subject matter jurisdiction in this case. 25 “A district court may decline to exercise supplemental jurisdiction over supplemental state 26 law claims if “the district court has dismissed all claims over which it has original jurisdiction.” 27 28 U.S.C. § 1367(c)(3). The general rule is “when federal claims are dismissed before trial . . . 28 pendent state claims should also be dismissed.” Religious Tech. Ctr. v. Wollersheim, 971 F.2d 1 367-68 (9th Cir. 1992). Considering the early procedural posture of this case, as well as 2 | judicial economy, convenience, fairness, and comity, the Court will exercise its discretion and 3 decline to entertain supplemental jurisdiction over the second cause of action. See 28 U.S.C. § 4 | 1367(c)(3); Religious Tech., 971 F.2d at 367-68. 5 6 ORDER 7 Accordingly, IT IS HEREBY ORDERED that: No further claims or parties will be dismissed as a result of the FDSA’s second motion to 9 dismiss or the supplemental briefing received to date; 10 }2. The claims contained in the third cause of action as alleged by FDSA non-members Her 11 and Chandavong against the FDSA and the County is SEVERED pursuant to Rule 21; 12 }3. The Clerk shall ISSUE a new case number for the severed claims of Chandavong and Her 13 with the undersigned and Magistrate Judge Grosjean assigned to the new case; 14 Within twenty-one (21) days of service of this order, Plaintiffs Her and Chandavong shall 15 file an amended complaint as described in this order against the FDSA and the County in 16 the newly severed case and use the newly issued case number for all further filings; 17 The Clerk shall file the following documents from this case’s docket to the newly severed 18 case’s docket: Document Nos. 1, 6, 7, 8, 12, 14, 22, 24, 39, 44, 45, 48, 54, 56, 62, 65, 67, 19 68, 74, 75, 76, 78, 79, 81, 82, 83, 84; 20 Pursuant to 28 U.S.C. § 1367(c)(3), the Court declines to exercise supplemental 21 jurisdiction over the remaining state law claims in this case; and 22 |7. The Clerk shall CLOSE this case.!" 23 IT IS SO ORDERED. 55 |Dated: _ April 21, 2021 □□ 7 □ Z Cb Led — SENIOR DISTRICT JUDGE 26 27 9g | !! The closure of this case does not prohibit the filing of any motions for attorney’s fees in this case, as discussed in the order on the FDSA’s second motion to dismiss. See Doc. No. 74 at 13:21-14:4. aN