NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 21 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
TERRY KLEE, No. 23-3304 D.C. No. Plaintiff - Appellant, 2:22-CV-00148-JAK-MRW Central District of California v. MEMORANDUM* INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 501, ET AL.,
Defendants - Appellees.
Appeal from the United States District Court for the Central District of California John A. Kronstadt, District Judge, Presiding
Submitted January 15, 2025** San Francisco, California
Before: H.A. THOMAS, MENDOZA, and DE ALBA, Circuit Judges.
Terry Klee appeals the dismissal of his claims against the International Union
of Operating Engineers, Local 501 (“the Union”), California State Controller Betty
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Yee, and Attorney General Rob Bonta. He argues that the Defendants deprived him
of his First and Fourteenth Amendment rights by diverting money out of his
paycheck and to the Union. We affirm.
We have jurisdiction under 28 U.S.C. § 1291. We review a grant of a motion
to dismiss de novo. Doe v. Regents of the Univ. of Cal., 23 F.4th 930, 935 (9th Cir.
2022). We must “accept[] as true all well-pleaded allegations of material fact and
constru[e] those facts in the light most favorable to the non-moving party.” Ernst &
Haas Mgmt. Co. v. Hiscox, Inc., 23 F.4th 1195, 1199 (9th Cir. 2022) (citation
omitted). “[A] district court’s determination that [a] plaintiff[] lack[s] constitutional
standing” is also reviewed de novo. Maya v. Centex Corp., 658 F.3d 1060, 1067
(9th Cir. 2011). The parties are familiar with the facts, so we recite only what is
necessary.1
1. Klee’s claims against the Union are brought under 42 U.S.C. § 1983.
Section 1983 provides a cause of action against those who deprive others of federal
rights while acting “under color of state law.” Belgau v. Inslee, 975 F.3d 940, 946
1 The district court dismissed Klee’s entire case. We limit our review to the distinct dispositive issues argued in Klee’s opening brief: (1) whether the Union acted under color of state law, (2) whether he may recover nominal damages from the state officials, and (3) whether he may recover prospective relief from the state officials for an ongoing constitutional violation. Although Klee makes further argument about the nature of his claims and injuries, we discern no argument sufficiently stated relating to the dismissal of his claims against the California Department of Corrections and Rehabilitation (“CDCR”) or for compensatory relief against the state officials.
2 (9th Cir. 2020) (quoting Collins v. Womancare, 878 F.2d 1145, 1147 (9th Cir.
1989)). To establish that a private actor acted under color of state law, we employ a
two-prong inquiry comprised of “the state policy requirement” and “the state actor
requirement.” Wright v. SEIU, 48 F.4th 1112, 1121 (9th Cir. 2022).
First, the state policy requirement asks “whether the claimed constitutional
deprivation resulted from the exercise of some right or privilege created by the State
or by a rule of conduct imposed by the State or by a person for whom the State is
responsible.” Id. at 1121–22 (quoting Ohno v. Yasuma, 723 F.3d 984, 994 (9th Cir.
2013) (internal quotation marks and alterations omitted)). Klee’s arguments at this
step are foreclosed by recent precedent. As we explained in Wright, the state
statutory scheme “does not create a ‘right or privilege’ in [the union] to direct the
State’s deductions of union dues.” Id. at 1122 (quoting Lugar v. Edmondson Oil
Co., 457 U.S. 922, 937 (1982)). Under California law, the State Controller makes
deductions at the request of the Union, but must first get certification from the Union
that those individuals whose paychecks are to be deducted authorized the deductions.
Cal. Gov’t Code § 1153(a), (b). If the State Controller determines that the Union
has failed to comply with statutes or regulations for deductions, she must refuse to
deduct. Id. § 1153(f).
At bottom, Klee challenges the Union’s refusal to let him leave, which is a
dispute over the terms of Union membership. “Thus, the ‘source of the alleged
3 constitutional harm’ is not a state statute or policy but the particular private
agreement between the union and Employees.” Belgau, 975 F.3d at 947 (quoting
Ohno, 723 F.3d at 994). Section 1983 provides no remedy for such disputes. Klee
cannot meet the state policy requirement.
Second, the state actor requirement determines “whether the party charged
with the deprivation could be described in all fairness as a state actor.” Wright, 48
F.4th at 1122. This requirement can be met by succeeding in at least one of four
tests. Id. Klee argues that he meets two tests: joint action and governmental nexus.
His arguments as to each are foreclosed by recent precedent. As we found in Wright,
which analyzed an Oregon statutory scheme similar to California’s, the State “did
not ‘affirm, authorize, encourage, or facilitate unconstitutional conduct’ by
processing dues deductions” and therefore could not be a joint actor. Id. at 1123
(quoting Belgau, 975 F.3d at 947 (alterations omitted)). Turning to the
governmental nexus test, Klee must establish that the State “has exercised coercive
power or has provided such significant encouragement, either overt or covert, that
the choice must in law be deemed to be that of the State.” Ochoa v. Pub. Consulting
Grp., Inc., 48 F.4th 1102, 1109 (9th Cir. 2022) (quoting Blum v. Yaretsky, 457 U.S.
991, 1004 (1982)). In Belgau, we declined to find a governmental nexus in similar
circumstances, 975 F.3d at 947 n.2, and in any event, we find no factual allegations
arising to the requisite coercion or encouragement supporting a governmental nexus
4 to the Union’s alleged constitutional violations.2 Klee thus fails to meet the state
actor requirement and dismissal of his § 1983 claims against the Union was
appropriate.
2. Klee seeks nominal damages from state officials Yee and Bonta as
recognition of their failure to secure his liberty and property interests in violation of
the Fourteenth Amendment. “‘[A]bsent waiver by the State or valid congressional
override,’ state sovereign immunity protects state officer defendants sued in federal
court in their official capacities from liability in damages, including nominal
damages.” Platt v. Moore, 15 F.4th 895, 910 (9th Cir. 2021) (quoting Kentucky v.
Graham, 473 U.S. 159, 166–69 (1985)). Klee argues, with reference to wide-
ranging authority concerning nominal damages, that his request for damages is
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 21 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
TERRY KLEE, No. 23-3304 D.C. No. Plaintiff - Appellant, 2:22-CV-00148-JAK-MRW Central District of California v. MEMORANDUM* INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 501, ET AL.,
Defendants - Appellees.
Appeal from the United States District Court for the Central District of California John A. Kronstadt, District Judge, Presiding
Submitted January 15, 2025** San Francisco, California
Before: H.A. THOMAS, MENDOZA, and DE ALBA, Circuit Judges.
Terry Klee appeals the dismissal of his claims against the International Union
of Operating Engineers, Local 501 (“the Union”), California State Controller Betty
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). Yee, and Attorney General Rob Bonta. He argues that the Defendants deprived him
of his First and Fourteenth Amendment rights by diverting money out of his
paycheck and to the Union. We affirm.
We have jurisdiction under 28 U.S.C. § 1291. We review a grant of a motion
to dismiss de novo. Doe v. Regents of the Univ. of Cal., 23 F.4th 930, 935 (9th Cir.
2022). We must “accept[] as true all well-pleaded allegations of material fact and
constru[e] those facts in the light most favorable to the non-moving party.” Ernst &
Haas Mgmt. Co. v. Hiscox, Inc., 23 F.4th 1195, 1199 (9th Cir. 2022) (citation
omitted). “[A] district court’s determination that [a] plaintiff[] lack[s] constitutional
standing” is also reviewed de novo. Maya v. Centex Corp., 658 F.3d 1060, 1067
(9th Cir. 2011). The parties are familiar with the facts, so we recite only what is
necessary.1
1. Klee’s claims against the Union are brought under 42 U.S.C. § 1983.
Section 1983 provides a cause of action against those who deprive others of federal
rights while acting “under color of state law.” Belgau v. Inslee, 975 F.3d 940, 946
1 The district court dismissed Klee’s entire case. We limit our review to the distinct dispositive issues argued in Klee’s opening brief: (1) whether the Union acted under color of state law, (2) whether he may recover nominal damages from the state officials, and (3) whether he may recover prospective relief from the state officials for an ongoing constitutional violation. Although Klee makes further argument about the nature of his claims and injuries, we discern no argument sufficiently stated relating to the dismissal of his claims against the California Department of Corrections and Rehabilitation (“CDCR”) or for compensatory relief against the state officials.
2 (9th Cir. 2020) (quoting Collins v. Womancare, 878 F.2d 1145, 1147 (9th Cir.
1989)). To establish that a private actor acted under color of state law, we employ a
two-prong inquiry comprised of “the state policy requirement” and “the state actor
requirement.” Wright v. SEIU, 48 F.4th 1112, 1121 (9th Cir. 2022).
First, the state policy requirement asks “whether the claimed constitutional
deprivation resulted from the exercise of some right or privilege created by the State
or by a rule of conduct imposed by the State or by a person for whom the State is
responsible.” Id. at 1121–22 (quoting Ohno v. Yasuma, 723 F.3d 984, 994 (9th Cir.
2013) (internal quotation marks and alterations omitted)). Klee’s arguments at this
step are foreclosed by recent precedent. As we explained in Wright, the state
statutory scheme “does not create a ‘right or privilege’ in [the union] to direct the
State’s deductions of union dues.” Id. at 1122 (quoting Lugar v. Edmondson Oil
Co., 457 U.S. 922, 937 (1982)). Under California law, the State Controller makes
deductions at the request of the Union, but must first get certification from the Union
that those individuals whose paychecks are to be deducted authorized the deductions.
Cal. Gov’t Code § 1153(a), (b). If the State Controller determines that the Union
has failed to comply with statutes or regulations for deductions, she must refuse to
deduct. Id. § 1153(f).
At bottom, Klee challenges the Union’s refusal to let him leave, which is a
dispute over the terms of Union membership. “Thus, the ‘source of the alleged
3 constitutional harm’ is not a state statute or policy but the particular private
agreement between the union and Employees.” Belgau, 975 F.3d at 947 (quoting
Ohno, 723 F.3d at 994). Section 1983 provides no remedy for such disputes. Klee
cannot meet the state policy requirement.
Second, the state actor requirement determines “whether the party charged
with the deprivation could be described in all fairness as a state actor.” Wright, 48
F.4th at 1122. This requirement can be met by succeeding in at least one of four
tests. Id. Klee argues that he meets two tests: joint action and governmental nexus.
His arguments as to each are foreclosed by recent precedent. As we found in Wright,
which analyzed an Oregon statutory scheme similar to California’s, the State “did
not ‘affirm, authorize, encourage, or facilitate unconstitutional conduct’ by
processing dues deductions” and therefore could not be a joint actor. Id. at 1123
(quoting Belgau, 975 F.3d at 947 (alterations omitted)). Turning to the
governmental nexus test, Klee must establish that the State “has exercised coercive
power or has provided such significant encouragement, either overt or covert, that
the choice must in law be deemed to be that of the State.” Ochoa v. Pub. Consulting
Grp., Inc., 48 F.4th 1102, 1109 (9th Cir. 2022) (quoting Blum v. Yaretsky, 457 U.S.
991, 1004 (1982)). In Belgau, we declined to find a governmental nexus in similar
circumstances, 975 F.3d at 947 n.2, and in any event, we find no factual allegations
arising to the requisite coercion or encouragement supporting a governmental nexus
4 to the Union’s alleged constitutional violations.2 Klee thus fails to meet the state
actor requirement and dismissal of his § 1983 claims against the Union was
appropriate.
2. Klee seeks nominal damages from state officials Yee and Bonta as
recognition of their failure to secure his liberty and property interests in violation of
the Fourteenth Amendment. “‘[A]bsent waiver by the State or valid congressional
override,’ state sovereign immunity protects state officer defendants sued in federal
court in their official capacities from liability in damages, including nominal
damages.” Platt v. Moore, 15 F.4th 895, 910 (9th Cir. 2021) (quoting Kentucky v.
Graham, 473 U.S. 159, 166–69 (1985)). Klee argues, with reference to wide-
ranging authority concerning nominal damages, that his request for damages is
“prospective” in nature and therefore circumvents the Eleventh Amendment under
Ex parte Young, 209 U.S. 123 (1908). The case law cited is inapposite and does not
endorse the novel theory he argues. Not only have we recently observed that state
officers are shielded from nominal damages, Platt, 15 F.4th at 910, but the nature of
Klee’s requested nominal damages is not prospective. He seeks nominal damages
2 Further, our case law casts doubt on whether the “governmental nexus” test is truly distinct from the “joint action test.” See Wright, 48 F.4th at 1122 n.6 (“the public function and joint action tests ‘largely subsume the state compulsion . . . and . . . governmental nexus test[s].’”) (quoting Ohno, 723 F.3d at 996 n.13); Rawson v. Recovery Innovations, Inc., 975 F.3d 742, 748 (9th Cir. 2020) (describing the nexus and joint action tests as one and the same).
5 “for the deprivation of his First Amendment and Fourteenth Amendment rights,”
rather than as a measure to prevent a future injury. And as we have recognized,
“relief that in essence serves to compensate a party injured in the past by an action
of a state official in his official capacity that was illegal under federal law is
barred[.]” Lund v. Cowan, 5 F.4th 964, 970 (9th Cir. 2021) (quoting Papasan v.
Allain, 478 U.S. 265, 278 (1986)). Therefore, even if there is room under Ex parte
Young for certain types of nominal damages, there is none for those that Klee seeks.
3. Lastly, Klee seeks injunctive and declaratory relief from Yee and Bonta
for their failure to secure his liberty and property interests from interference by the
Union, in violation of the Fourteenth Amendment.
Article III of the Constitution restricts the judiciary to deciding only “cases”
and “controversies.” Davidson v. Kimberly-Clerk Corp., 889 F.3d 956, 967 (9th Cir.
2018). The case or controversy requirement, which constitutes “the irreducible
constitutional minimum of standing,” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992), requires that a plaintiff show “(1) an ‘actual or imminent’ injury as a result
of the alleged illegal conduct; (2) there is a ‘causal connection between the injury
and the conduct complained of’; and (3) the injury will ‘likely’ be ‘redressed by a
favorable decision’ of the court.” Wright, 48 F.4th at 1118 (quoting Lujan, 504 U.S.
at 560–61). For prospective relief to redress a Fourteenth Amendment procedural
due process injury, Klee must demonstrate “that [he] was accorded a procedural right
6 to protect [his] interests and that [he] has concrete interests that are threatened.” Id.
at 1120–21.
We find again that Klee’s argument is foreclosed by Wright. In Wright, we
found that the plaintiff lacked a concrete interest in future wages because she had
retired and was no longer at risk of having her wages unfairly deducted. Id. at 1121.
Similarly, here, Klee’s Complaint explains that he is no longer a member of the
Union and has no intention to become one. His risk of future injury “rests on a
highly attenuated chain of inferences,” including that he will rejoin the Union, and
the same sequence of events will play out again. Id. at 1120 (internal quotation
marks omitted). Like the plaintiff in Wright, “the threat of future unauthorized dues
deductions from [Klee’s] wages is entirely imaginary,” id. at 1121 (internal
quotation marks omitted), and thus insufficient to satisfy Article III standing. Klee
fails to establish standing for injunctive or declaratory relief for his Fourteenth
Amendment procedural due process claims against the state officials.
AFFIRMED.