Bain v. California Teachers Association

          Argued and Submitted December 6, 2017 Pasadena, California

          Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding D.C. No. 2:15-cv-02465-SVW-AJW

          Joshua S. Lipshutz (argued), Gibson Dunn & Crutcher LLP, San Francisco, California; Theodore J. Boutrous Jr., Marcellus McRae, and Samuel Eckman, Gibson Dunn & Crutcher LLP, Los Angeles, California; Kyle Hawkins, Gibson Dunn & Crutcher LLP, Dallas, Texas; Michael R. Huston, Gibson Dunn & Crutcher LLP, Washington, D.C.; for Plaintiffs-Appellants.

          Eric A. Harrington (argued), Jason Walta, and Alice O'Brien, National Education Association, Washington, D.C., for Defendants-Appellees.

          Before: Paul J. Kelly, Jr., ^[*] Consuelo M. Callahan, and Carlos T. Bea, Circuit Judges.

         SUMMARY^[**]

         Civil Rights

         The panel dismissed as moot an appeal by public school teacher plaintiffs from the district court's dismissal of their action alleging that their Unions' requirement that they pay a fee to support the Unions' political and ideological activities violated their constitutional right to free speech.

         The panel determined that a change in plaintiffs' professional circumstances during the pendency of this appeal fundamentally altered the posture of this case. Because plaintiffs had disassociated from their respective Unions, they could no longer benefit from the injunctive and declaratory relief they sought, and therefore their appeal was moot. The panel rejected plaintiffs' attempt to transform their lawsuit from a request for prospective equitable relief into a plea for money damages. The panel noted that plaintiffs had consistently represented throughout the litigation that they were seeking only declaratory and injunctive relief.

         The panel further denied plaintiffs' motion to add an organizational plaintiff, the Association of American Educators, to their suit under Federal Rule of Civil Procedure 21. The panel held that Rule 21 may not be used to rehabilitate a court's jurisdiction where a case becomes moot on appeal. The panel further held that even if mootness were not an insurmountable barrier to considering a Rule 21 motion, the panel would still deny the motion because Association failed to satisfy the criteria for Rule 21 joinder. The panel dismissed plaintiffs' appeal and remanded to the district court with instructions to dismiss the case without vacating its judgment.

          OPINION

          CALLAHAN, Circuit Judge:

         Plaintiffs-Appellants are public school teachers in California who were, at the time they filed their lawsuit, members of the Defendants-Appellees public sector teachers' Unions. Plaintiffs claim that their Unions' requirement that they pay a fee to support the Unions' political and ideological activities violates their constitutional right to free speech. While "[public sector] union[s] remain[] as free as any other entity to participate in the electoral process with all available funds other than [] state-coerced agency fees lacking affirmative permission, " Davenport v. Washington Educ. Ass'n, 551 U.S. 177, 190 (2007), Plaintiffs reason that, as exclusive bargaining representatives under California law, the Unions are state actors and thus subject to the First Amendment's proscriptions. And because the First Amendment prohibits state actors from infringing individuals' right to free speech, Plaintiffs argue that their Unions' requirement that Union members pay a political fee violates their and other members' constitutional rights.

         A change in Plaintiffs' professional circumstances during the pendency of this appeal fundamentally alters the posture of this case. Plaintiffs have disassociated from their respective Unions, meaning they can no longer benefit from the injunctive and declaratory relief they seek. Their appeal is therefore moot. Perhaps cognizant of the consequences of their actions, Plaintiffs have filed a motion to add the Association of American Educators ("AAE") to their suit as an organizational Plaintiff under Federal Rule of Civil Procedure 21. But because we hold that Rule 21 is an improper vehicle to resuscitate a moot case, we deny the motion and dismiss Plaintiffs' appeal as moot.

         I.

         California law accommodates agency shop^[1]arrangements between public sector teachers' unions and public school employers. Cal. Gov't Code §§ 3343.1; 3544- 3544.9. To establish a union, public school teachers must first form a bargaining unit. Id. § 3344. If a majority of teachers in the unit elect to negotiate collectively with their employer, then the union "may become the exclusive representative for the employees of [that] unit for purposes of meeting and negotiating." Id. § 3544(a), (b). Once a union gains status as the exclusive bargaining representative, the public employer may bargain with only that union. Id. § 3543.1(a).

         Like many States, California allows public sector unions to charge a "fair share service fee"-commonly known as an "agency fee"-to those public employees who do not join the exclusive bargaining representative. Id. §§ 3543(a), 3546. Nonmembers pay less than their union-member counterparts because California law permits a union to charge nonmembers only "chargeable fees"-i.e., fees related to a union's collective bargaining activities.^[2] Id. § 3546(a). Union members, by contrast, are subject to the internal rules of the union, which, as is pertinent here, include paying "non-chargeable fees"-e.g., fees that fund members-only benefits and the union's political, ideological, and other activities unrelated to collective bargaining. See id. § 3543.1(d). Supreme Court precedent and California law prohibit unions from charging objecting nonmembers for the unions' First Amendment-protected expressive political activities. Abood v. Detroit Bd. of Ed., 431 U.S. 209, 234-36 (1977); Cumero v. Pub. Emp't Relations Bd., 49 Cal.3d 575, 594 (1989).

         Consistent with their own internal policies, the Unions in the instant matter provide certain members-only benefits. For example, Union members enjoy the privilege of voting on collective bargaining agreements ("CBA") and sitting on school district committees. In addition, the Unions provide employment-related benefits such as disability insurance, free legal representation, life insurance, death and dismemberment benefits, and disaster relief. Nonmembers are not entitled to these benefits, nor are they charged for them. Cumero, 49 Cal.3d at 587-88 (under California law, nonmembers "should not be required to support activities which are beyond the Association's representational obligations" (emphasis in original)). And while the Unions could negotiate for state-offered insurance benefits in the collective bargaining process-e.g., California's State Disability Insurance and Paid Family Leave ("SDI") program-they have opted not to do so and instead offer alternative insurance to their members.^[3]

         Plaintiffs April Bain, Clare Sobetski, and Bhavini Bhakta were public school teachers in California who elected to join the Unions. They are no longer Union members, however, because they have left their teaching positions. Bain's Union membership ended in June 2017 and Sobetski's ended in August 2017. For her part, Bhakta's Union membership ended in August 2016 when she was promoted to Assistant Principal at Arcadia High School, a position that makes her ineligible for Union membership.

         II.

         Plaintiffs filed their operative Second Amended Complaint ("SAC") in October 2015 in the Central District of California as a 42 U.S.C. § 1983 civil rights action. Both in the district court and on appeal, Plaintiffs claim violations of their right to free speech under the First Amendment and Article I, § 2(a) of the California Constitution.^[4] Plaintiffs argue that the Unions and state School Boards work together to force teachers to either finance the Unions' political activities and thereby surrender their free speech rights, or forgo the benefits of union membership and keep their constitutional rights intact. Plaintiffs assert that because membership benefits are so enticing, most teachers will acquiesce, join the Unions, and pay the non-chargeable- i.e., political-fee.

         Plaintiffs seek declaratory relief in the form of (1) a declaration that California's agency shop laws, collective bargaining laws, and the CBAs entered into the by the Unions violate their constitutional rights; (2) a declaration that those laws and CBAs coerce teachers into funding the Unions' political activities in violation of their constitutional rights; and (3) a declaration that those laws and CBAs violate Plaintiffs' constitutional rights by forcing school superintendents to deduct from teachers' paychecks dues that support the Unions' non-chargeable activities. Plaintiffs also seek an injunction (1) barring the Unions from denying Union membership or any of its privileges based on a teacher's refusal to pay the non-chargeable fee; and (2) barring school superintendents from deducting the non-chargeable fee from Union members' paychecks. Finally, Plaintiffs seek "such additional or different relief as [the district court] deems just and proper, including an award of reasonable attorneys' fees and the costs of this action."

         The Unions filed a motion to dismiss the SAC under Federal Rule of Civil Procedure 12(b)(6), which the district court granted with prejudice. The court rejected Plaintiffs' argument that the Unions' internal membership rules requiring their members to pay the non-chargeable fee constitute state action. The court found unpersuasive Plaintiffs' theory that "the choice [teachers] face between the benefits of union membership and the lack of benefits of nonmember status 'is a product of state action because the coercion that California teachers experience could not exist without the State.'" To the contrary, the court found that because the Unions could decide, without any intervention by the State, not to require their members to pay non-chargeable fees, Plaintiffs challenged only a private decision by the Unions.

         The district court also rejected Plaintiffs' argument that the CBAs negotiated by the State and the Unions are infused with state action through state legislation authorizing agency shops. The court noted that the "agency shop arrangement established by the State does not compel employees to finance union activities unrelated to collective bargaining unless they choose to join a union." (emphasis added). Citing the Fourth Circuit's decision in Kidwell v. Transportation Communications International Union, 946 F.2d 283 (4th Cir. 1991), the court reasoned that the State's recognition of the Unions as collective bargaining representatives did not transform the Unions' "internal policies and practices" into state action. Accordingly, because Plaintiffs failed to show that the Unions qua "state actors" had infringed their constitutional rights, the district court found no actionable claim for relief and dismissed the case. Plaintiffs timely appealed.

         III.

         We review a district court's grant of a Rule 12(b)(6) motion to dismiss for failure to state a claim de novo. Edwards v. Marin Park, Inc., 356 F.3d 1058, 1061 (9th Cir. 2004). "A motion under Rule 12(b)(6) should be granted only if 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, ' construing the complaint in the light most favorable to the plaintiff." Id. (internal citation omitted) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id.

         IV.

         We must first decide whether Plaintiffs' appeal is moot in light of their disassociation from the Unions. "[A]n actual controversy must be extant at all stages of review, not merely at the time the complaint is filed." Arizonans for Official English v. Arizona, 520 U.S. 43, 67 (1997) (internal quotation marks and citation omitted). Thus, a plaintiff must satisfy the irreducible constitutional minimum of Article III standing at each stage of the litigation, including on appeal. Standing requires a showing that a plaintiff has suffered an (1)injury-in-fact that is actual or imminent and concrete and particularized, rather than speculative or hypothetical; (2)which is ...