1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 MARK GABRIELE; JEN-FANG LEE; No. 2:19-cv-00292 WBS KJN

STACY PENNING; CHARLES

13 FRIEDRICHS, as individuals, and on behalf of all others 14 similarly situated, MEMORANDUM AND ORDER RE:

MOTION TO DISMISS FIRST

15 Plaintiffs, AMENDED COMPLAINT 16 v. 17 SERVICE EMPLOYEES INTERNATIONAL

UNION, LOCAL 1000; SERVICE

18 EMPLOYEES INTERNATIONAL UNION,

LOCAL 1020; NATIONAL EDUCATION

19 ASSOCIATION OF THE UNITED

STATES; CALIFORNIA TEACHERS

20 ASSOCIATION; CALIFORNIA FACULTY

ASSOCIATION,

21 Defendants. 22

23 ----oo0oo---- 24 Plaintiffs bring this action against Service Employees 25 International Union, Local 1000 (“Local 1000” or “union 26 defendant”), Service Employees International Union, Local 1020, 27 the National Education Association of the United States, the 28 1 California Teachers Association, and the California Faculty 2 Association, alleging that defendants unlawfully deducted agency 3 fees from their paychecks prior to the Supreme Court’s decision 4 in Janus v. American Federation of State, County, & Municipal 5 Employees, Council 31, 138 S. Ct. 2448 (2018). Before the court 6 is defendant Local 1000’s motion to dismiss (Docket No. 89). 7 I. Relevant Allegations 8 The court previously dismissed the claims of all but 9 plaintiffs Mark Gabriele and Jen-Fang Lee against Local 1000. 10 (Docket No. 30.) Gabriele and Lee were at all relevant times 11 employees of the State of California. (First Amended Complaint 12 (“FAC”) ¶¶ 1, 2 (Docket No. 17).) Local 1000 is plaintiffs’ 13 exclusive collective bargaining representative. (Id. ¶ 5.) 14 Although plaintiffs chose not to be members of Local 1000, prior 15 to the Supreme Court’s decision in Janus, plaintiffs’ employers 16 withheld fair-share fees from their wages and paid those fees to 17 union defendant Local 1000. (Id. ¶¶ 1-2, 15.) 18 On June 27, 2018, the Supreme Court decided Janus and 19 held that payment to a union may not be collected from an 20 employee without the employee’s affirmative consent. 138 S. Ct. 21 at 2486. Plaintiffs then filed suit alleging the following 22 causes of action: (1) violation of plaintiffs First Amendment 23 right, 42 U.S.C. § 1983; (2) conversion; and (3) restitution. 24 (See generally FAC.) Plaintiffs request a refund of fees 25 collected, as well as declaratory and injunctive relief. (Id. ¶ 26 45.) Defendants now move to dismiss the complaint. 27 II. Discussion 28 A. Injunctive and Declaratory Relief 1 Plaintiffs seek declaratory judgment providing that the 2 collection of agency fees, and any state statute or collective 3 bargaining agreement that provides for such a collection, is 4 unconstitutional under the First Amendment. (Id. ¶ 45(B).) 5 Plaintiffs also ask the court to enjoin defendants from 6 collecting or receiving agency fees. (Id. ¶ 45(C).) 7 For the following reasons, the court finds that 8 plaintiff’s claims for declaratory and injunctive relief are moot 9 because the Supreme Court in Janus already declared all 10 collections of agency fees to be unconstitutional and because the 11 collection of agency fees permanently ended immediately after 12 Janus. 13 1. Legal Standard 14 Article III grants federal courts authority to 15 adjudicate cases and controversies. Already, LLC v. Nike, Inc., 16 568 U.S. 85, 90 (2013). “A case becomes moot—-and therefore no 17 longer a ‘Case’ or ‘Controversy’ for purposes of Article III—- 18 ‘when the issues presented are no longer “live” or the parties 19 lack a legally cognizable interest in the outcome.’” Rosebrock 20 v. Mathis, 745 F.3d 963, 971–72 (9th Cir. 2014) (citing Already, 21 568 U.S. at 91). The party asserting mootness must show that the 22 “allegedly wrongful behavior could not reasonably be expected to 23 recur.” Already, 568 U.S. at 91 (quoting Friends of the Earth, 24 Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 190 25 (2000)). 26 2. Injunctive Relief 27 At the outset, the court notes that “every other 28 district court to consider this issue has found claims for 1 prospective relief moot after Janus.” See Babb v. Cal. Teachers 2 Ass’n, 378 F. Supp. 3d 857, 871 (C.D. Cal. 2019) (citing Cook v. 3 Brown, 364 F. Supp. 3d 1184, 1188 (D. Or. 2019); Carey v. Inslee, 4 364 F. Supp. 3d 1220, 1225-27 (W.D. Wash. 2019); Danielson v. 5 Inslee, 345 F. Supp. 3d 1336, 1339-40 (W.D. Wash. 2018)); see 6 also Penning v. Service Emps. Int’l Union, Local 1021, No. 19-cv- 7 03624-YGR, 2020 WL 256126, at *1 (N.D. Cal. Jan. 16, 2020); 8 Seidemann v. Prof’l Staff Congress Local 2334, 432 F. Supp. 3d 9 367 (S.D.N.Y. 2020); Lee v. Ohio Educ. Ass’n, 366 F. Supp. 3d 10 980, 981-82 (N.D. Ohio 2019); Crockett v. NEAAlaska, 367 F. Supp. 11 3d 996, 1002-03 (D. Alaska 2019); Lamberty v. Conn. State Police 12 Union, No. 3:15-cv-378 (VAB), 2018 WL 5115559 at *6-9 (D. Conn. 13 Oct. 19, 2018); Danielson v. AFSCME Council 28, 340 F. Supp. 3d 14 1083, 1084 (W.D. Wash. 2018), aff’d, 945 F.3d 1096 (9th Cir. 15 2019); Yohn v. Cal. Teachers Ass’n, 17-cv-202-JLS-DFM, 2018 WL 16 5264076, at *3-4 (C.D. Cal. Sept. 28, 2018). 17 This court agrees that because it cannot reasonably be 18 expected that the union defendants will resume withholding agency 19 fees in contravention of Janus, plaintiffs’ claim for injunctive 20 relief is moot. The Janus court held that states and public- 21 sector unions cannot compel the payment of agency fees from 22 nonconsenting employees because such a practice violates the 23 First Amendment. 138 S. Ct. at 2486. On June 28, 2018, the day 24 after Janus was decided, the California State Controller’s Office 25 cancelled the deduction of agency fees in compliance with Janus. 26 (Ex. 3 (Docket No. 42-2).) The Controller’s Office also said 27 that it would refund all June 2018 agency fees. (Id.) The 28 California Attorney General then issued an advisory statement 1 concerning the Supreme Court’s decision in Janus, explaining that 2 the state “may no longer automatically deduct a mandatory agency 3 fee from the salary or wages of a non-member public employee who 4 does not affirmatively choose to financially support the union.” 5 (Ex. 4 (Docket No. 42-2).) 6 Similarly, in-house counsel for Local 1000 has filed an 7 affidavit stating that the union ceased the collection agency 8 fees following Janus. (See Decl. of Anne M. Giese (“Giese 9 Decl.”) ¶¶ 3, 9 (Docket No. 42-2).) Union counsel agrees that 10 the entire practice is unconstitutional in light of Janus and 11 that this determination binds the union. (Giese Decl. ¶ 9.) And 12 even if the union decided to withdraw fees in violation of Janus, 13 the union would be incapable of doing so because only the State 14 Controller’s Office actually deducts the fees. (Id. ¶ 10.) 15 These circumstances demonstrate that defendant Local 1000 is not 16 likely to withdraw agency fees from nonconsenting employees. 17 Plaintiffs point out that the California statutes 18 authorizing the deduction of agency fees have not been repealed. 19 (Opp’n at 1 (Docket No. 46).) However, this court has previously 20 found, under identical circumstances, that the repeal of the 21 California statutes is not a requirement for this court to 22 declare this case moot. See Hamidi v. Serv. Emps. Int’l Union 23 Local 1000, 386 F. Supp. 3d 1289, 1297 (E.D. Cal. 2019). “The 24 mere presence on the statute books of an unconstitutional 25 statute, in the absence of enforcement or credible threat of 26 enforcement, does not entitle anyone to sue.” Id. (quoting 27 Winsness v. Yocom, 433 F.3d 727, 732 (10th Cir. 2006)). For the 28 reasons above, the court finds that such a threat does not exist, 1 and plaintiffs’ claim for injunctive relief is moot.1 2 3. Declaratory Relief 3 “The test for mootness is ‘not relaxed in the 4 declaratory judgment context.’” Id. at 1295 (quoting Gator.com 5 Corp. v. L.L. Bean, Inc., 398 F.3d 1125, 1129 (9th Cir. 2005) (en 6 banc)). Plaintiffs must demonstrate that “a substantial 7 controversy . . . of sufficient immediacy and reality to warrant 8 the issuance of a declaratory judgment” exists. Id. (quoting 9 Gator.com, 398 F.3d at 1129). 10 Applying this standard here, the court finds that 11 plaintiffs’ claim for declaratory relief is also moot. The 12 complaint requests declaratory judgment providing that it is 13 “unconstitutional under the First Amendment . . . to withhold or 14 require payment of fair share service fees or agency fees from 15 [p]laintiffs”; that the state statutes “that allow the imposition 16 of fair share service fees are unconstitutional under the First 17 Amendment [and] null and void]”; and that “any collective 18 bargaining agreement provision imposing fair share service fees 19 or agency fees against [p]laintiffs . . . is unconstitutional 20 under the First Amendment [and] null and void.” (FAC ¶ 45(B).) 21 The action plaintiffs object to –- the nonconsensual deduction of 22

23 1 To the extent that plaintiffs are relying on the voluntary cessation exception to mootness, that exception does 24 not apply here. “Under Ninth Circuit precedent, ‘voluntary cessation must have arisen because of the litigation’ for this 25 exception to mootness to apply.” Hamidi, 386 F. Supp. 3d at 1295–96 (quoting Pub. Utilities Comm’n of State of Cal. v. 26 F.E.R.C., 100 F.3d 1451, 1460 (9th Cir. 1996) (emphasis in 27 original)). Here, plaintiffs filed suit months after defendants ceased the collection of agency fees, so defendant’s voluntary 28 cessation was not a result of this litigation. 1 agency fees –- ceased months before plaintiffs filed suit, 2 however. At this point, the controversy is neither sufficiently 3 immediate nor real enough to warrant a declaratory judgment. 4 Plaintiffs argue that neither the unions nor the Public 5 Employment Relations Board (“PERB”) has declared anything 6 unconstitutional and that Janus did not address the California 7 statutes, specifically. Again, however, given the circumstances 8 described above, it cannot reasonably be expected that these 9 statutes will be used to collect fees in contravention of Janus 10 in the future. “[T]he existence of potentially problematic 11 agreements and laws is not sufficient to overcome mootness.” Cf. 12 Cook, 364 F. Supp. 3d at 1190 (finding request for declaratory 13 relief moot despite Janus not addressing Oregon statutes and 14 bargaining agreements, specifically). The court will therefore 15 dismiss plaintiffs’ claim for declaratory relief as moot. 16 B. Good Faith Defense 17 In requesting a refund for agency fees collected from 18 plaintiffs in violation of Janus, plaintiffs ask the court to 19 apply Janus retroactively. The Ninth Circuit, however, recently 20 held that, where the union defendant “relied on presumptively- 21 valid state law and then-binding Supreme Court precedent,” the 22 union defendant is entitled to a good-faith defense and “is not 23 retrospectively liable” for pre-Janus collection of agency fees. 24 Danielson v. Inslee, 945 F.3d 1096, 1103, 1105 (9th Cir. 2019). 25 Danielson is the law of the circuit and binds this court. 26 Here, it is undisputed that the union defendants relied 27 on presumptively valid state statutes and then-applicable Supreme 28 Court precedent. Accordingly, the good faith defense applies and 1 the court will dismiss plaintiffs’ claim for a refund of fees 2 collected. 3 All of plaintiffs’ arguments in response merely 4 disagree with the Ninth Circuit’s decision in Danielson. (Opp’n 5 at 4 (“Plaintiffs disagree with almost every part of Danielson 6 related to the good-faith defense.”); id. at 6 (“Danielson 7 wrongly rejects the most analogous tort analysis.”); compare id. 8 at 10 (“Owen [v. City of Independence, Mo., 455 U.S. 622, 654-55 9 (1980)] shows that the Unions are not entitled to a good-faith 10 defense.”), with Danielson, 945 F.3d at 1103 (“The good faith 11 defense applies to the Union as a matter of law.”).) Ninth 12 Circuit precedent, however, is binding on this court, and because 13 plaintiffs fail to identify any meaningful distinction between 14 this case and Danielson, the court will follow the Ninth Circuit. 15 Accordingly, union defendants here are entitled to the good faith 16 defense and, as a matter of law, cannot be liable for agency fees 17 collected prior to Janus. 18 C. State Law Claims 19 Defendants argue that plaintiffs’ state law claims are 20 preempted by the Dills Act, Cal. Gov’t Code §§ 3512-3524, and 21 that PERB has exclusive jurisdiction over these claims. The 22 court agrees and finds that plaintiff’s state law claims for 23 conversion and restitution are preempted by the Dills Act. See 24 Babb, 378 F. Supp. 3d at 877-78; Penning v. Service Emps. Int’l 25 Union, Local 1021, 424 F. Supp. 3d 684, 686 (N.D. Cal. 2020). 26 Plaintiffs’ allegations under the state law claims 27 identify conduct expressly permitted by the Dills Act, and 28 therefore that conduct cannot form the basis for common law 1 claims. Plaintiffs’ employment is governed by the Dills Act. 2 (See Complaint ¶¶ 1-2; Cal. Gov’t Code §3513(c).) The Act 3 expressly permits the collection of fair-share fees. (See Cal. 4 Gov’t Code §§ 3512, 3515, 3515.7.) Because the common law is 5 necessarily displaced by a statute, the collection of fair-share 6 fees is not a violation of state common law. See Babb, 378 F. 7 Supp. 3d at 877 (“‘Janus does not change the fact that [the 8 state’s public employee collective-bargaining statute] displaced 9 any state common law tort claims that could have been brought 10 with regard to [fair-share fees] collected prior to Janus.’” 11 (quoting Crockett, 367 F. Supp. 3d at 1009; substitutions 12 altered)); Cal. Civ. Code § 22.2 (“The common law . . . so far as 13 it is not . . . inconsistent with . . . laws of this State, is 14 the rule of decision in all the courts of this State.”). 15 Further, PERB possesses “exclusive jurisdiction” over 16 matters covered by the Act, subject to appeal to the California 17 Courts of Appeal. Cal. Gov’t Code §§ 3514.5. Pursuant to 18 Section 3514.5, that “exclusive jurisdiction” extends to “[t]he 19 initial determination as to whether the charges of unfair 20 practices are justified, and, if so, what remedy is necessary to 21 effectuate the purposes of this chapter,” i.e., whether a 22 violation of the Act has occurred and, if so, what remedy should 23 be ordered. Cal. Gov’t Code § 3514.5. Noting ”the broad powers 24 expressly conferred upon PERB,” El Rancho Unified School District 25 v. National Education Association, 33 Cal. 3d 946, 953 (1983), 26 the California Supreme Court has held that identical language2 in 27 2 Compare EERA, Cal. Gov’t Code § 3541.5 (“The initial 28 determination as to whether the charges of unfair practices are 1 California’s Educational Employment Relations Act (“EERA”) 2 “broadly preempts state tort claims that allege conduct that is 3 even ‘arguably protected or prohibited under EERA.’” Babb, 378 4 F. Supp. 3d at 877 (quoting El Rancho, 33 Cal.3d at 960). The 5 Dills Act therefore strips the courts’ jurisdiction not only to 6 adjudicate claims arising from conduct that is prohibited or 7 protected by the Act, but also to determine whether conduct is in 8 fact prohibited or protected by the Act, as long as it is 9 arguably prohibited or protected. Because plaintiffs’ claims 10 depend on whether the unions are entitled to keep the fair share 11 fees that the Dills Act arguably permitted the unions to collect, 12 PERB has exclusive jurisdiction over these claims. 13 Plaintiffs assert that their common law claims are not 14 preempted because those claims do not arise from conduct 15 constituting “unfair practices” under the Dills Act but, at most, 16 conduct that is protected or prohibited by the Act. (Opp’n at 17 18.) But the courts have rejected the argument that preemption 18 is limited to claims arising from conduct that would constitute 19 an “unfair practice,” as opposed to some other violation of the 20 Dills Act. See Babb, 378 F. Supp. 3d at 877-78; Leek v. Wash. 21 Unified Sch. Dist., 124 Cal. App. 3d 43, 48-49 (Third Dist. 22 1981); accord Link v. Antioch Unified Sch. Dist., 142 Cal. App. 23 3d 765, 768-69 (1st Dist. 1983). Indeed, the very case 24 justified, and, if so, what remedy is necessary to effectuate the 25 purposes of this chapter, shall be a matter within the exclusive jurisdiction of the board.”), with Dills Act, Cal. Gov’t Code § 26 3514.5 (“The initial determination as to whether the charges of 27 unfair practices are justified, and, if so, what remedy is necessary to effectuate the purposes of this chapter, shall be a 28 matter within the exclusive jurisdiction of the board.”). 1 plaintiffs ask the court to rely on for their proposition that 2 PERB has limited jurisdiction (Opp’n. at 18) explicitly declines 3 to limit PERB’s jurisdiction only to claims alleging unfair 4 practices under the Act. See Hott v. Coll. of Sequoias Cmty. 5 Coll. Dist., 3 Cal. App. 5th 84, 94 (5th Dist. 2016) (“PERB’s 6 exclusive jurisdiction extends to all alleged violations of [the 7 Act], not just those which constitute unfair practices.”). PERB 8 instead has jurisdiction to adjudicate both unfair practices and 9 whether conduct is protected or prohibited by the Act. See id. 10 Next, plaintiffs argue that their complaint does not 11 allege a violation of the Dills Act. (Opp’n at 18-19.) 12 Specifically, plaintiffs contend that the Dills Act is 13 “irrelevant” to their claims because, regardless of what the 14 Dills Act provides, the unions’ receipt of any agency fees 15 constituted conversion. Id. Plaintiffs, however, are not 16 permitted to “plead around” preemption by not alleging Dills Act 17 violations. Instead, “what matters is whether the underlying 18 conduct on which the suit is based –- however described in the 19 complaint –- may fall within PERB’s exclusive jurisdiction.” El 20 Rancho, 33 Cal. 3d at 954 n.13.; cf. Link, 142 Cal. App. 3d at 21 769 (finding that claims fall under PERB’s exclusive jurisdiction 22 where plaintiffs alleged only constitutional challenges). The 23 preemption question therefore turns on whether plaintiffs’ claims 24 arise from conduct that is protected, prohibited, or arguably 25 protected or prohibited under the Dills Act, regardless of the 26 legal labels they assign to their claims. Because the Dills Act 27 expressly authorizes the collection of agency fees, Cal. Gov. 28 Code §§ 3513(k), “[c]hallenges to agency fees, even on WA Ct UV VY EVO VY DSUING IN RUUD tee AY te OV te

1 constitutional grounds, are subject to [PERB’s] exclusive 2 jurisdiction.” Babb, 378 F. Supp. 3d at 877. Accordingly, the 3 court lacks jurisdiction to hear plaintiff’s state law claims. 4 IT IS THEREFORE ORDERED that defendants’ motion to 5 dismiss (Docket No. 89) be, and the same hereby is, GRANTED. All 6 claims against defendants are DISMISSED. Because all of 7 | plaintiff’s claims must be dismissed as a matter of law, any 8 amendment would be futile, and no leave to amend is granted. 9 The Clerk of Clerk shall enter final judgment in favor 10 of defendants. 11 | Dated: June 11, 2020 Abbe an~ Ve 2d. bE 12 WILLIAM B. SHUBB

UNITED STATES DISTRICT JUDGE

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12