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February 29, 1972

Gerald M. Marker et al., Plaintiffs,
John B. Connally, as Secretary of the Treasury of the United States, and Johnnie M. Walters, as Commissioner of Internal Revenue, et al., Defendants

Judge Charles R. Richey

The opinion of the court was delivered by: RICHEY

This case came before the Court for hearing on the plaintiffs' application for a three-judge court. Prior to the hearing of the plaintiffs' motion, the Court signed two orders permitting the International Association of Machinists and Aerospace Workers, AFL-CIO, and the United Auto Workers' Union to intervene as co-defendants in this action.

 The plaintiffs in the case at bar challenge the constitutionality of the income tax exemptions granted and recognized for labor unions under Section 501 of the Internal Revenue Code. They allege that the labor organizations of which they are members engage in substantial political activity with which plaintiffs disagree, and that portions of the mandatory dues paid by them are used in this activity in violation of their constitutional rights. Finally, the plaintiffs allege that to the extent the labor organizations engage in political activity the tax exemption afforded to them under Section 501(c)(5) of the Internal Revenue Code acts as an indirect subsidy by the government of their political activity, which is a violation of plaintiffs' constitutional rights under the First and Fifth Amendments to the United States Constitution.

 Title 28, Section 2282 of the United States Code provides as follows:

"An interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution of the United States shall not be granted by any district court or judge thereof unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title."

 In Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 8 L. Ed. 2d 794, 82 S. Ct. 1294 (1962), the United States Supreme Court stated:

"When an application for a statutory three-judge court is addressed to a district court, the court's inquiry is appropriately limited to determining whether the constitutional question raised is substantial, whether the complaint at least formally alleges a basis for equitable relief, and whether the case presented otherwise comes within the requirements of the three-judge statute." Id. at 715.

 More recently, the United States Court of Appeals for the District of Columbia in Bulluck v. Washington, No. 24,863, decided January 19, 1972, restated the test for determining whether the constitutional questions presented are substantial in the context of 28 U.S.C. ยง 2284 (1970):

"To conclude that the constitutional questions are not substantial, we must conclude that they are 'obviously without merit' or that 'their unsoundness so clearly [results] from previous decisions of [the Supreme Court] as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy.' Ex parte Poresky, 290 U.S. 30, 32, 78 L. Ed. 152, 54 S. Ct. 3 (1933)." Id. at 6.

 The Court has carefully considered the arguments of counsel for all the parties to the litigation, and it has concluded that the plaintiffs' application for a three-judge court should be denied. The Court bases its decision on its examination of previous Supreme Court decisions where substantially the same claims were raised.

 In International Association of Machinists v. Street, 367 U.S. 740, 6 L. Ed. 2d 1141, 81 S. Ct. 1784 (1961), the United States Supreme Court had occasion to discuss political activism on the part of labor organizations and the remedies available to union members who opposed expenditures for this purpose. The Court stated:

"Moreover, the fact that these expenditures are made for political activities is an additional reason for reluctance to impose such an injunctive remedy. Whatever may be the powers of Congress or the States to forbid unions altogether to make various types of political expenditures, as to which we express no opinion here, many of the expenditures involved in the present case are made for the purpose of disseminating information as to candidates and programs and publicizing the positions of the unions on them. As to such expenditures an injunction would work a restraint on the expression of political ideas which might be offensive to the First Amendment. For the majority also has an interest in stating its views without being silenced by the dissenters. To attain the appropriate reconciliation between majority and dissenting interests in the area of political expression, we think the courts in administering the Act should select remedies which protect both interests to the maximum extent possible without undue impingement of one on the other." Id. at 773.

 Regarding possible remedies for the dissenters, the Court stated:

"One remedy would be an injunction against expenditure for political causes opposed by each complaining employee of a sum, from those moneys to be spent by the union for political purposes, which is so much of the moneys exacted from him as is the proportion of the union's total expenditures made for such political activities to the union's total budget. The union should not be in a position to make up such sum from money paid by a nondissenter, for this would shift a disproportionate share of the cost of collective bargaining to the dissenter and have the same effect of applying his money to support such political activities. A second remedy would be restitution to each individual employee of that portion of his money which the union expended, despite his notification, for the political causes to which he had advised the union he was opposed. There should be no necessity, however, for the employee to trace his money up to and including its expenditure; if the money goes into general funds and no separate accounts of receipts and expenditures of the funds of ...

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