[EL] Serious Question About Knox v. SEIU

Fri Jun 22 16:19:00 PDT 2012

For what it's worth, in California, which has been regulating auto
insurance rates pursuant to a voter-enacted initiative (Prop 103) since
1990, the Insurance Commissioner's regulations prohibit the company's
expenditures for political contributions to be included as an expense
item in the rate base, thereby effectively requiring those expenses to
be borne by the company's shareholders and not its policyholders.  Larry
Tribe filed a lawsuit on behalf of Fireman's Fund challenging the
constitutionality of the regulations on numerous, numerous grounds,
including the claim that the disallowance of expenditures for political
contributions impermissibly penalizes the insurance companies "for
exercising their First Amendment rights to free speech and to petition
the government for the redress of grievances."  See Fireman's Fund Ins.
Co. v. Garamendi, 790 F.Supp. 938, 946 (N.D. Cal. 1992).  The district
court dismissed the lawsuit on ripeness and three different abstention
grounds, so the claim was never litigated in that case, but the
regulations' exclusion of political contribution expenses was
subsequently upheld by the California Supreme Court.

Fredric D. Woocher

Strumwasser & Woocher LLP

10940 Wilshire Blvd., Ste. 2000

Los Angeles, CA 90024

fwoocher at strumwooch.com

(310) 576-1233

From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of
Samuel Bagenstos
Sent: Friday, June 22, 2012 12:31 PM
To: Volokh, Eugene
Cc: law-election at uci.edu
Subject: Re: [EL] Serious Question About Knox v. SEIU

I've never been especially persuaded by Abood myself, but for now I want
to take it seriously.  I'm simply trying to understand the limits of the
Abood principle as glossed by Knox.  And Justice Marshall's one-justice
concurrence in the judgment in PG&E seems to me to address a quite
different question.  Justice Marshall's conclusion that PG&E does not
give up its own negative speech rights simply because it is a regulated
monopoly doesn't really draw a distinction with public-sector labor
unions, nor does it say anything about whether PG&E's customers should
have Abood-type rights to prevent PG&E from spending their money on
ideological and political speech to which the customers object.  I don't
imagine you would suggest that a city could require AFSCME to include in
its dues bill a statement from National Right to Work explaining why
unionism is horrible -- but that seems to me the precise analogy with
PG&E.  The question I posed is whether customers of auto insurance
companies who are required by state law to purchase auto insurance if
they are to register a car, are, under the Abood/Knox principle,
entitled to object to the ideological or political uses of the money
they are required to pay -- just as workers who are required by state
law to contribute an agency fee if they are to work in a unionized
public workplace are, under the Abood/Knox principle, entitled to object
to the ideological or political uses of the money they are required to
pay.

One answer to this question might be that, in the special case of auto
insurance companies whose business is mandated by the state, Bellotti
and Citizens United don't apply, and states can simply ban political or
ideological expression by these organizations.  If that were true, then
there wouldn't be any Abood/Knox problem.  But that doesn't seem to me
tenable.  So I'm still, honestly, wondering what the difference is
between the two situations -- or if there just isn't one.

(Also, a minor point:  I certainly don't take the fact that Justice
Marshall or anyone else was a liberal as a prima facie reason for me, as
a fellow liberal, to agree with what he said about a particular case.
So I'm not sure what is the analytical as opposed to the rhetorical
significance of the "even-the-liberal-New-Republic" move here.)

On Jun 22, 2012, at 2:59 PM, Volokh, Eugene wrote:

                I think Abood is wrong, chiefly because I think that the
government is free to decide to pay each employees $X and then give $Y
to the union (as, say, a "labor peace fee"), and that this is
essentially what is happening with the dues deduction in Abood.

                But as to the dues to unions vs. payment to businesses
question, I should note that Justice Marshall discusses the latter point
inPG&E v. Public Utilities Commission in upholding the rights even of
regulated monopolies:

"The State seizes upon appellant's status as a regulated monopoly in
order to argue that the inclusion of postage and other billing costs in
the utility's rate base demonstrates that these items "belong" to the
public, which has paid for them. However, a consumer who purchases food
in a grocery store is "paying" for the store's rent, heat, electricity,
wages, etc., but no one would seriously argue that the consumer thereby
acquires a property interest in the store. That the utility passes on
its overhead costs to ratepayers at a rate fixed by law rather than the
market cannot affect the utility's ownership of its property, nor its
right to use that property for expressive purposes, see Consolidated
Edison Co. v. Public Service Comm'n of N. Y., 447 U. S. 530, 534, n. 1
(1980)
<http://scholar.google.com/scholar_case?case=1554910653142299503&q=pacif
ic+gas+electric+first+amendment&hl=en&as_sdt=2,5> . The State could have
concluded that the public interest would be best served by state
ownership of utilities. Having chosen to keep utilities in private
hands, however, the State may not arbitrarily appropriate property for
the use of third parties by stating that the public has "paid" for the
property by paying utility bills."

                And Justice Marshall joined the majority in Abood.
Perhaps he was mistaken in one or both cases - as I said, I think he and
all the other Justices were in Abood - but it's worth noting that this
issue arose, and even a liberal Justice such as Justice Marshall treated
purchases from businesses (even ones that one practically has to deal
with) differently from compelled dues payments to unions.

                Eugene

From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of
Mathew Manweller
Sent: Friday, June 22, 2012 11:46 AM
To: sbagen at gmail.com; liptaka at nytimes.com; richardwinger at yahoo.com
Cc: law-election at uci.edu
Subject: Re: [EL] Serious Question About Knox v. SEIU

I think the boring answer to this question, but probably the most on
point legally, is that the insurance company is spending their own money
and the SEIU is spending another person's money. Now, we as customers
may think of it as "our money" but once you give it to an insurance
company--for whatever rate/cost, whatever they plan to do with it, etc,
it is THEIR money. They don't need our permission on how to spend it. In
the case of the SEIU, they are taking someone elses money out of their
paycheck. 

Central Washington University
Associate Professor of Political Science 
manwellerm at cwu.edu
509-963-2396

?The first lesson of economics is scarcity. There is never enough of
anything to fully satisfy all who want it. The first lesson of politics
is to disregard the first lesson of economics.? ? Thomas Sowell

>>> "Liptak, Adam" <liptaka at nytimes.com> 06/22/12 7:02 AM >>>

This interesting article by Benjamin Sachs in the Columbia Law Review
explores these questions:

http://columbialawreview.org/assets/pdfs/112/4/Sachs.pdf

________________________________________
From: law-election-bounces at department-lists.uci.edu
[law-election-bounces at department-lists.uci.edu] On Behalf Of Samuel
Bagenstos [sbagen at gmail.com]
Sent: Friday, June 22, 2012 9:57 AM
To: richardwinger at yahoo.com
Cc: law-election at uci.edu
Subject: Re: [EL] Serious Question About Knox v. SEIU

Maybe. But (a) maybe every insurance company in my state is engaged in
some ideological/political expenditures (if not all on the same side or
the same issue), and I'd just prefer that my money go to paying claims
and associated administrative expenses rather than subsidizing political
speech on issues that I have not made my own; and (b) I don't
necessarily have to work in the public sector, not all public sector
jobs are unionized, and not all unionized public sector jobs are
represented by the same union. If I don't like AFT, I can work as a
teacher in a private school (where, if I have a union, it won't be a
public sector one), or a charter school (where if I try to unionize
they'll fire me for sure!), or I can work in a next-door district
represented by NEA.

Samuel R. Bagenstos
Professor of Law
University of Michigan Law School
625 S. State St.
Ann Arbor, MI 48109
sambagen at umich.edu<mailto:sambagen at umich.edu
<mailto:sambagen at umich.edu%3cmailto:sambagen at umich.edu> >
http://web.law.umich.edu/_FacultyBioPage/facultybiopagenew.asp?ID=411
http://disabilitylaw.blogspot.com/
Twitter: @sbagen

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