Monthly Archives: September 2020

This week, we examine one Ninth Circuit decision exploring the extent to which the deprivation of information and statutorily-conferred powers can satisfy Article IIIs injury-in-fact requirement, and a second declining to extend the Supreme Courts decision in Janus to former union-members asserting First Amendment right not to pay agreed-upon dues.

SOUTHCENTRAL FOUNDATION v. ANTHCThe Court holds that a board of directors alleged delegation of decision-making authority to an executive committee, and a confidentiality policy that allegedly restricted the flow of information to board members, sufficed to confer Article III standing under a statute entitling plaintiff to a voting representative on the board of directors.

Panel: Judges Gould, Bea, and Murguia, with Judge Murguia writing the opinion.

Key highlight: Because we conclude that Section 325 [of the Department of the Interior and Related Agencies Appropriations Act of 1998] conferred governance and participation rights to [plaintiff], which necessarily includes an entitlement to information necessary to effectively exercise those rights, we reverse the district courts dismissal of [plaintiff]s complaint for lack of Article III standing.

Background: Congress created the Alaska Native Tribal Health Consortium (the Consortium) under Section 325 of the Department of the Interior and Related Agencies Appropriation Act of 1998 to provide health services at the Alaska Native Medical Center in Anchorage, Alaska. Southcentral Foundation (Southcentral) is a nonprofit regional tribal health organization that provides health care to some 65,000 Alaska Natives as a member of the Consortium. Section 325 provides in relevant part that the Consortium shall be governed by a 15-member Board of Directors, which shall be composed of one representative of each of 13 regional tribal health organizations, including Southcentral, and two tribal representatives. The statute also provides that [e]ach member of the Board of Directors shall be entitled to cast one vote. Decisions of the Board of Directors shall be made by consensus whenever possible, and by majority vote in the event that no consensus can be reached.

Southcentral alleged that the Consortiums board, over Southcentrals objection, created an executive committee authorized to take actions without ratification by the full board. The executive committee then allegedly approved lucrative employment contracts for Consortium executives without disclosing the terms of those contracts to the full board. A few years later, the board also adopted a strict confidentiality policy that allegedly gave unidentified Consortium personnel absolute discretion to restrict information from being shared even with the Board of Directors, with a rebuttable presumption against disclosure. Southcentral sought declaratory relief that the Consortium violated Section 325 when it: (1) formed the Executive Committee and delegated the authority of the full board, and (2) erected informational barriers to board member decision-making. The district court dismissed the suit, concluding that Southcentral failed to allege an injury in fact sufficient to confer Article III standing.

Result: The Ninth Circuit reversed. The Court began by laying out the now-familiar requirements for Article III injury-in-fact: to confer standing, an injury must be particularized (affect[ing] the plaintiff in a personal and individual way) and concrete (de facto; that is, it must actually exist.). Applying that standard, the Court first addressed Southcentrals executive committee claim. The statutory language conferring governance and participation rights on representatives of each member health organization made clear that Southcentrals alleged injury was particularized and concrete, the Court reasoned, because the creation of the executive committee deprived Southcentral of precisely those express statutory powers. The Court was not convinced by the Consortiums argument that Section 325s participation rights only applied to providing health care, not management decisions, or its argument that Section 325 grants governance rights only to individual directors, rather than the organizations they represent. Because Congress endowed each specified regional health entity with the right to have a representative on the Board that stands in the shoes of the designating entity by acting on its behalf, Southcentral had alleged sufficient injury to its statutory decision-making power.

As for the confidentiality policy, the Court reached a similar conclusion. Because the Consortiums policy allegedly restricted information necessary to make decisions called for by the statute, the Court said Southcentral had adequately alleged Article III injury. In so holding, the Court rejected the Consortiums argument that to satisfy Article III, an alleged informational injury must stem from an express statutory right to receive such information. Making informed decisions requires having information, the Court reasoned. Because Southcentrals informational injury was inextricably tied to its interest in exercising its governance and participation rights under the statute, the Court concluded that Southcentral had alleged sufficient injury-in-fact. The case was remanded to the trial court for further proceedings.

BELGAU v. INSLEEThe Court holds that former union members who had agreed to allow their employer, the State of Washington, to deduct union dues even if they terminated their union membership had no First Amendment claim when that agreement was enforced.

Panel: Judges McKeown, Christen, and Harpool (W.D. Mo.), with Judge McKeown writing the opinion.

Key Highlight: We join the swelling chorus of courts recognizing that Janus does not extend a First Amendment right to avoid paying union dues.

Background: Plaintiffs were Washington state employees who had joined a union (WSFE) shortly after starting work. They had signed contracts allowing the state to deduct union dues from their paychecks. They subsequently agreed to revised contracts making their consent to the deduction of such dues irrevocable for one year.

In Janus v. American Federation of State, County, and Muni Employees, 138 S. Ct. 2448 (2018), the Supreme Court overturned longstanding precedent and held that public employers cannot automatically deduct union fees from the paycheck of nonunion employees because such deductions compel nonmembers to subsidize union speech. After Janus was issued, the plaintiffs notified their union that they no longer wanted to be members, and the union terminated their memberships. The state, however, continued to deduct their union dues until the irrevocable one-year terms for dues payment had expired.

In response, the plaintiffs filed a putative class action against various state officials and the union, pressing First Amendment claims. The district court granted summary judgment to the defendants.

Result: The Ninth Circuit affirmed. The Court began by holding that the plaintiffs constitutional claims against the union failed for lack of state action. First, the Court reasoned, the plaintiffs could not establish that 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 from whom the State is responsible; rather, the source of their harm was their contract with the union, not any state statute or policy. Second, and in any event, the plaintiffs also could not establish that the party charged with the deprivation could be described in all fairness as a state actor: the union was plainly a private entity, and it had not been coerced or overseen by the state in shaping or entering the challenged agreements, nor had it acted in concert with the state. As the Court declared, Providing a machinery for implement the private agreement by performing an administrative task does not render Washington and the [union] joint actors.

The Court next turned to the plaintiffs claims against the state, holding that these likewise failed. The Court first addressed whether it had jurisdiction to consider this issue, given that the plaintiffs had sought only prospective relief and the state was no longer deducting fees from their paychecks. It determined that these claims satisfied the capable of repetition yet evading review exception to mootness, as the one-year period of fees-deductions was too short to allow full litigation, and other similarly situated employees might confront the same issue.

On the merits, the Court rejected the plaintiffs contention that the state had violated their First Amendment rights. As the Court explained, plaintiffs complained of obligations that were self-imposed rather than imposed by the State, and the First Amendment provides [no] right to disregard promises that would otherwise be enforced under state law. Although Janus had condemned the practice of automatically deducting agency fees from nonmembers who were not asked and not required to consent before the fees are deducted, the plaintiffs here had experienced no such compulsion. They had voluntarily joined the union and accepted the benefits of membership, and thus had agreed to bear the financial burdens of membership. The First Amendment, the Court held, does not prevent the State from honoring that agreement.

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This Week at The Ninth: Informational Injury and Union Dues - JD Supra

More evidence of the decline of the political party system in New Jersey comes from statistics published recently by the Election Law Enforcement Commission (ELEC) that compared fundraising by parties and special interest PACs[1] during the first six months of 2010.

The first six months of 2020 witnessed the big six party entities, which include the two state parties and four legislative leadership committees, raising $1.3 million. While the pandemic undoubtedly took its toll, nevertheless this amount continued the downward trend in party financial activity and is the least raised since 2007.

County party organizations continued their downward slide as well, raising $1.955 million during the first two quarters of 2020, their lowest fundraising total in 20 years.

Compare their combined total of $3.3 million to the fundraising haul reported by 235 union, business, regulated industry, trade association, and professional association PACs for the first half of 2020.

The special interest PACs raised $22.3 million during this period of time, though their financial activity did slow during the second quarter, most likely due to COVID-19.

The $3.3 million combined fundraising total reported by the state and county party entities amounted to 15 percent of the money raised by the special interest PACs during the same period of time.

Looking back a decade ago to 2010, parties also were at a disadvantage even then. But the gap wasnt nearly as large.

The Big Six and county parties raised $4.2 million during the first six months of 2010 versus $12.2 million by special interest PACs. Party fundraising represented 35 percent of the PAC fundraising.

Party Versus PAC Fundraising First Six Months- 2010 versus 2010

It is important to note as well that this ratio of PAC fundraising to party fundraising does not even factor in financial activity of independent spending by special interest groups, which has dwarfed party activity during the last decade.

Unlike traditional political action committees, which are subject to contribution limits and are required to disclose all their contributions and spending, independent spending committees face no such limits and often avoid public disclosure rules.

Independent groups, for instance, spent $48 million during the 2017 Assembly and State Senate contest and about $50 million in the 2018 congressional election in New Jersey. During the 12-year period, 2005-2017, their spending increased exponentially by 11,458 percent just in state elections.

The undeniable message to voters of these statistics, repeatedly chronicled in columns, white papers and analytical reports released by ELEC, is that the driving force in New Jersey elections is no longer political parties, or even the candidates themselves.

Instead, it is conventional PACs and independent groups run by special interests.

While the First Amendment protects participation by interest groups, which is welcome, the current situation by which special interests are the dominant influence in elections does not bode well for democracy.

Some would say, perhaps rightly, that the genie is out of the bottle, and that trying to return parties and candidates to their preeminence is a futile goal.

But the history of campaign finance law suggests otherwise. Changes to campaign finance laws have redirected the flow of money before in New Jersey and transformed its politics. It can do so again.

A recent column in Insidernj,com entitled, NJ Political Parties Have Been Down Before. They Can Come Back Again, traced reform in New Jersey and its connection to transforming electoral politics in the State.

The most recent example was the 2006 pay-to-play reforms. These reforms undermined a robust party system that was brought about by the 1993 Campaign Finance Reforms. The 2006 reforms helped usher in the current period of weak parties and special interest independent group dominance.

Bipartisan proposals put forth by ELEC would try to restore balance within the electoral system by strengthening political parties and offsetting the influence of special interest independent groups.

Commission recommendations include: election-related disclosure by independent groups, including disclosure of donations; including PACs under pay-to-play law and excluding parties from the law; allowing parties to participate in gubernatorial elections; raising general contribution limits for parties; and, mandating that contractors annually disclose their contributions to PACs and independent groups.

Though not a commission proposal, tax credits for contributions to parties and candidates may help as well.

Political parties have always been an integral part of politics in America and restoring their strength and vitality would not only bring them back into the flow of money but also into the flow of politics and elections in New Jersey.

Jeff Brindle is the Executive Director of the New Jersey Election Law Enforcement Commission.

The opinions presented here are his own and not necessarily those of the Commission.

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Even with a Recent Lag, Special Interest PACs Enjoy Big Fundraising Edge Over Parties - InsiderNJ

I was recently in line for gas at a Costco store in Vancouver. In front of me was a car with a sign that cursed George Floyd, Black Lives Matter and anyone who was put off by the sign.

What is happening? This is not OK.

The ugliness of our current times is rearing its monstrous head. Its hateful, mean and divisive.

Im a Black woman, born and raised in Vancouver who graduated from Fort Vancouver High School in the 1970s. I never encountered the hate and overt racism I witness now. Obviously, racists existed then behind closed doors and out of my hearing range. They stayed relatively hidden until this current administration apparently empowered them to come out of the woodwork and openly express themselves.

I get the First Amendment and freedom of speech. If someone wants to post a sign like this sign on their private property in their yard I guess they can, although I prefer they didnt.

However, why is it permissible to drive around with prominent profane signage publicly displayed on a vehicle for all to see? Washington and Oregon dont allow profanity on vanity plates. Its offensive and its not OK.

Rita Griffin Deiz, Vancouver

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Readers respond: Racists coming out of the woodwork - oregonlive.com

Late last week, a Magistrate Judge for the U.S. District Court for the Northern District of California issued an order granting a motion for a nationwide preliminary injunction forbidding implementation of sanctions against Tencent Holdings Ltd. and its mobile application WeChat as described in our prior alert found here. Based on this preliminary injunction, the prohibitions regarding WeChat will not go into effect at 11:59pm EDT Sunday evening. The judges ruling is predicated on her belief that the plaintiffs have shown serious questions going to the merits of the plaintiffs First Amendment claim, that the balance of hardships tips in the plaintiffs' favor, and that the plaintiffs have established the other elements for preliminary-injunctive relief. The government is expected to challenge the order.

Separately, the Department of Commerce has delayed implementation of the first phase of the TikTok sanctions (prohibiting U.S. online mobile application stores from selling the TikTok application) until no earlier than September 27, 2020 at 11:59 p.m. EDT. As the U.S. government has reportedly, in principle, approved arrangements to mitigate national security concerns regarding TikTok operations in the United States, it seem likely that the TikTok sanctions will never become effective.

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WeChat and TikTok Sanctions Not to Came Into Effect Yesterday - JD Supra

Uptons Naturals

The Plant Based Foods Association (PBFA) and one of its members Uptons Naturals, an independent maker of plant-based foods based in Chicago, has joined forces with The Institute for Justice to file a federal lawsuit challenging a new Oklahoma food labeling law as a violation of the First Amendment.

The new law requires vegan producers to label products as plantbased in a font that is equal in size to the brand name. This move will incur heavy costs to smaller companies and could force some out of business. PBFA Executive Director Michele Simon stated to FoodNavigator.com that it was highly likely that some PBFA members would withdraw products in Oklahoma, should the law go into effect.

The PBFA website states: The Oklahoma Meat Consumer Protection Act, which takes effect November 1, 2020, was introduced by Oklahoma State Senator Micheal Bergstrom in conjunction with the Oklahoma Cattlemens Association and stewardedthroughthe Oklahoma Legislature by one of the associations cattle ranchers, State Representative Toni Hasenbeck.

Mississippi, Missouri, and Arkansas have sought to make it illegal for plant-based foods to use terms such as burgers or bacon. And this summer we reported that in California, plant-based creameryMiyoko, won the first round in its lawsuit against the California Department of Food and Agriculture, in a dispute over labeling, specifically the term Cultured Vegan Butter, as this apparently creates an erroneous impression, implying that Californian consumers cant understand that vegan butter is animal-free.

On the other hand, however: in Florida this April, a lawsuit against Burger King for being misleading with how it cooks its Impossible Burgers on the same grill as its meat products, was ruled in the favour of BK since vegans were unreasonably ignorant, by not asking the question is my plant-based burger still animal-free when served?

Uptons Naturals co-founder Daniel Staackmann stated: Our labels make it perfectly clear that our food is 100% vegan. But now our meat industry competitors in Oklahoma want to force us to redesign our labels as if our safe, healthy products are potentially harmful. Its not the first time weve had to fight a state law created by our competitors, and we look forward again to defending our First Amendment right to clearly communicate with our customers.

PBFAs Executive Director Michele Simon also stated: The plant-based meat category is on fire right now, with consumers demanding healthier and more sustainable options as alternatives to animal products. Oklahomas law, along with similar laws in several other states, is the meat lobbys anti-competitive response to the increased consumer demand for plant-based options. Whatever happened to free-market competition? We are proud to stand with Uptons Naturals and the Institute for Justice to protect PBFA members First Amendment rights to clearly communicate to consumers.

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The Oklahoma Meat Consumer Protection Act is Meat Lobby's Response to the Increased Consumer Demand for Plant-Based Options - vegconomist - the vegan...