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October 25, 1988

KENNETH ABRAMS, et al., Plaintiffs,

The opinion of the court was delivered by: LAMBERTH



 Plaintiffs in this action have filed a complaint on behalf of themselves and putative class members alleging that defendant has violated the first amendment, the National Labor Relations Act (NLRA) § 8(a)(3) and the duty of fair representation owed by the defendant to plaintiffs. Plaintiffs are employees of private telephone companies who work in collective bargaining units represented by Communications Workers of America (CWA) and pay agency fees to CWA pursuant to collectively bargained union security provisions.

 Plaintiffs maintain that the current collection of agency fees is in excess of the amount of such fees which the union spends on collective bargaining activities and thus violates the first amendment, the NLRA, and the duty of fair representation. Defendant acknowledges the collection of fees in excess of those needed to support collective bargaining activity, but maintains that because the excess is not spent on non-collective bargaining activity, but rather held in an interest-bearing escrow account to be later refunded to plaintiffs, defendant is not in violation of any duty to plaintiffs. Defendant further maintains that no state action is involved such as to make defendant subject to the first amendment.

 Defendant has filed a motion to dismiss, and plaintiffs have filed a motion for a preliminary injunction. The Court addresses each of these motions in turn.

 I. Defendant's Motion to Dismiss

 A. First Amendment Claim

 Plaintiffs' complaint, the facts of which are taken as true for purposes of this motion, alleges that the agency fees collected by defendant are spent on political and ideological activities not authorized by plaintiffs, in violation of plaintiffs' first amendment rights. Defendant argues that, insofar as plaintiffs' complaint states a first amendment claim, that complaint fails for want of state action.

 This issue was recently before the Supreme Court in Communications Workers of America v. Beck, 487 U.S. 735, 56 U.S.L.W. 4857, 101 L. Ed. 2d 634, 108 S. Ct. 2641 (1988). In that case, the court found that the exaction of agency fees from dissenting employees in excess of the amount spent for collective bargaining activities violated § 8(a)(3) of the NLRA, but declined to reach the first amendment question. In light of the Supreme Court's failure to settle the issue, this court agrees with defendant that the holding of the D.C. Circuit in Kolinske v. Lubbers, 229 U.S. App. D.C. 157, 712 F.2d 471 (D.C.Cir. 1983) controls, and has not, as plaintiffs suggest, been overruled sub silentio or successfully distinguished on its facts.

 In Kolinske, the Court of Appeals addressed the issue of whether the defendant union violated the constitutional rights of the nonmember employee plaintiff when it refused to pay him strike benefits. Plaintiff had refused to participate in any strike activities except to honor the picket line. The strike benefits were paid from fees collected under an agency shop clause similar to the one at issue in this action. The Court of Appeals addressed at length the issue of whether or not the agency shop clause negotiated between a private union and a private employer pursuant to the NLRA constituted state action. This discussion encompassed all but one of the line of cases relied upon by plaintiffs, beginning with Railway Employes' Department v. Hanson, 351 U.S. 225, 100 L. Ed. 1112, 76 S. Ct. 714 (1956) and ending with Abood v. Detroit Board of Education, 431 U.S. 209, 52 L. Ed. 2d 261, 97 S. Ct. 1782 (1977).

 This line, which also includes International Association of Machinists v. Street, 367 U.S. 740, 6 L. Ed. 2d 1141, 81 S. Ct. 1784 (1961) and Brotherhood of Railway and Steamship Clerks v. Allen, 373 U.S. 113, 10 L. Ed. 2d 235, 83 S. Ct. 1158 (1963), all involve the interpretation of and limit on union security provisions under the Railway Labor Act (RLA). In Hanson, according to the Kolinske court, the preemption by the RLA of a state law outlawing union shop laws constituted state action. The Court found that in preempting the state law the government created a right or privilege on the part of the union the exercise of which deprived the nonmembers of his constitutional rights. Kolinske, 712 F.2d at 476. In Street and Allen, the Court avoided the plaintiffs' constitutional claims by interpreting Section 2 (11) of the RLA to prohibit the use of fees collected from dissenting employees under union security agreements for non-collective bargaining purposes. The Kolinske court found that unlike the RLA, the NLRA expressly preserves the power of the states to outlaw union security laws. Therefore, the Court concluded, the preemption theory of state action discussed in Hanson was inapplicable to cases arising under the NLRA.

 More troubling to the Kolinske court, and to plaintiffs in the present action, is the Supreme Court's expansive dicta in Abood, in which the court stated that "differences between public- and private -sector bargaining simply do not translate into differences in First Amendment rights." 431 U.S. at 232, quoted in Kolinske at 476. The appellees in Kolinske, like plaintiffs here, urged the court "to adopt the full sweep of that dictum from Abood and apply the first amendment full force. . . ." 712 F.2d at 476. The Kolinske court declined to do so, for reasons which remain persuasive today. *fn1"

 Plaintiffs argue that Kolinske has been overruled by the Supreme Court sub silentio in Ellis v. Railway Clerks, 466 U.S. 435, 80 L. Ed. 2d 428, 104 S. Ct. 1883 (1984). In Ellis, another RLA case, the court applied constitutional restraints to the collection and expenditure of agency fees, despite the fact that they were collected from employees in California, which does not have a right to work law. Because California does not have a state law to preempt, plaintiffs argue, the rationale which supported state action in Hanson, and upon which the Kolinske court relied, is no longer tenable.

 This court does not read Ellis so broadly. As the Supreme Court most recently pointed out in Beck :


We ruled in Railway Employes' Dept. v. Hanson, 351 U.S. 225 [100 L. Ed. 1112, 76 S. Ct. 714] (1956), that because the RLA pre-empts all state laws banning union security agreements, the negotiation and enforcement of such provisions in railroad industry contracts involves "governmental action" and is therefore subject to constitutional limitations.

 487 U.S. at 761, 56 U.S.L.W. at 4864. The NLRA, the Court notes, differs from the RLA in this respect "for § 14(b) of the NLRA expressly preserves the authority of states to outlaw union security agreements." Id. The distinction thus appears to lie more in the statutory language itself, rather than, as plaintiffs suggest, whether or not a state actually has a statute which the RLA preempts.

 Defendant cites two other cases, cited in both Kolinske and Beck, which support defendant's reading of Kolinske and the proposition that actions of private unions covered by the NLRA are not state action. In Steelworkers v. Sadlowski, 457 U.S. 102, 121 n.16, 72 L. Ed. 2d 707, 102 S. Ct. 2339 (1982), the court noted that a union's decision to adopt an "outsider rule" - prohibiting contributions from nonmembers to candidates for union office - did not involve state action. Similarly, in Steelworkers v. Weber, 443 U.S. 193, 200, 61 L. Ed. 2d 480, 99 S. Ct. 2721 (1979) the court found an affirmative action plan adopted into a collective-bargaining agreement was not subject to constitutional scrutiny. Although neither of these cases involved § 8(a)(3), they support the contention that union rules governed by the NLRA do not involve state action. Beck, 487 U.S. at 761, 56 U.S.L.W. at 4864; Kolinske, 712 F.2d at 476-77.

 Lastly, plaintiffs attempt to distinguish Kolinske on its facts, adopting the distinction made by Judge Murnaghan in the concurrence in Beck v. C.W.A., 800 F.2d 1280 (4th Cir. 1986). Whereas the union's decision not to distribute strike benefits to Kolinske could be "characterized as an internal union matter because the authority to make and enforce that decision lay solely with the union", the collection of agency fees is enforceable only by threat of action from the employer and stems from an agency contract that exists only by virtue of federal law. Id. at 1287 n.8 (Murnaghan J. concurring); Beck v. C.W.A., 776 F.2d 1187, 1205 (4th Cir. 1985).

 Even accepting this distinction as meritorious, it does not serve in itself to make actions under § 8(a)(3) constitute state action for two reasons. First, the argument fails to distinguish Weber, supra, in which an employer was intimately involved in enforcing the terms of the affirmative action plan incorporated into the collective-bargaining agreement. Like agency shop clauses under the NLRA, federal law merely authorizes such agreements, but does not mandate them, and thus no state action is involved. Second, because Kolinske and Beck both involve § 8(a)(3) issues, drawing a distinction between them does not advance the idea that all actions under § 8(a)(3) involve state action, as appears to be the case under the RLA § 2(11). Thus, this distinction is only a factor to be considered in determining whether state action exists in this case, under the test set forth in Lugar v. Edmondson Oil Co., 457 U.S. 922, 73 L. Ed. 2d 482, 102 S. Ct. 2744 (1982), and followed in Kolinske, 712 F.2d at 477.

 The first part of the Lugar test examines whether the alleged deprivation of constitutional rights is caused by "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 for whom the state is responsible. The second part of the test asks whether the person responsible for the deprivation may be held to be a state actor, e.g. the actor performed a traditional public function, was compelled to act by state law, or acted in concert with the state. 457 U.S. at 937. In Kolinske, the court found neither part of the test satisfied, in that there was "no direct governmental involvement in either the parties' adoption of or their continued adherence to the agency shop clause." 712 F.2d at 479. The Kolinske court's analysis applies fully to the instant case, and plaintiffs' distinction on the facts does not affect the analysis. See also the discussion in Kolinske, 712 F.2d at 479-80, of Blum v. Yaretsky, 457 U.S. 991, 73 L. Ed. 2d 534, 102 S. Ct. 2777 (1982), and Rendell-Baker v. Kohn, 457 U.S. 830, 73 L. Ed. 2d 418, 102 S. Ct. 2764 (1982) (holding that extensive state regulation did not of itself render the regulated party's activities state action).

 B. The § 8(a)(3) Claim

 Defendant challenges plaintiffs' § 8(a)(3) claim on the grounds that the National Labor Relations Board (NLRB) has primary jurisdiction over this claim. Defendant correctly relies on Beck which affirms this general rule. 487 U.S. at 742-44, 56 U.S.L.W. at 4859. The Beck Court goes on to recognize, however, that federal courts may resolve such questions as "emerge as collateral issues in suits brought under independant federal remedies," such as the judicially implied duty of fair representation. Id., quoting Connell Construction Co. v. Plumbers, 421 U.S. 616, 626, 44 L. Ed. 2d 418, 95 S. Ct. 1830 (1975).

 In Beck, under circumstances nearly identical to this case, the Court found that "the necessity of deciding the scope of § 8(a)(3) arises because petitioners [the union] seek to defend themselves on the ground that the statute authorizes precisely this type of agreement [an agency shop agreement authorizing the exaction of fees unrelated to collective bargaining]. Under these circumstances, the Court held that the federal court had jurisdiction "to decide the § 8(a)(3) question raised by respondents' duty of fair representation claim." Id. This court finds Beck indistinguishable on this point, and thus finds jurisdiction to the extent allowable under Beck.

 C. Duty of Fair Representation

 Although defendant challenged this claim in its original motion to dismiss, it has since acknowledged that plaintiffs' claim for breach of the duty of fair representation states a cognizable claim under Beck.

 For the reasons set forth above, defendant's motion to dismiss will be granted as to plaintiff's first amendment claim, and denied as to plaintiffs' § 8(a)(3) and duty of fair representation claims.

 II. Preliminary Injunction

 Plaintiffs' motion for a preliminary injunction follows hard on the heels of the Supreme Court's decision in Beck, supra. In that case, the Court held that Section 8(a)(3) of the NLRA prohibits a union from exacting, over the objection of nonmember employees, any agency shop fees beyond those necessary to finance collective bargaining activities. Plaintiffs here seek to enjoin defendant from collecting such fees. Under the present arrangement, the union collects from the plaintiffs an amount equal to the dues of union members, but holds a portion of the fee in an interest-paying escrow account. When defendant determines the percentage of the union budget not spent on collective bargaining activities, that percentage of the fee is refunded to plaintiffs and other objecting employees.

 Defendant concedes that, after Beck, plaintiffs have stated a claim for breach of the duty of fair representation. Indeed, defendant avows that it will change to an advance-reduction method of collection in 1989, and argues that the delay is necessary only for administrative convenience. The court is troubled by its perception that defendant's collection system does not meet the requirements of Beck and by defendant's delay in so conforming the system. Nonetheless, even assuming that plaintiffs are likely to prevail on the merits, plaintiffs are not entitled to a preliminary injunction for two reasons. First, plaintiffs have failed to show the traditional common law requirement of irreparable harm necessary to the remedy of injunctive relief. See Virginia Petroleum Jobbers Assoc v. Federal Power Com'n, 104 U.S. App. D.C. 106, 259 F.2d 921, 925 (D.C. Cir. 1958). Second, plaintiffs have not shown "special circumstances" such as to merit an exception to the well-recognized federal labor policy against injunctive relief in the area of labor disputes. See Railway Clerks v. Allen, 373 U.S. 113, 120, 10 L. Ed. 2d 235, 83 S. Ct. 1158 (1963).

 Plaintiffs claim that the payment of the excess fees into defendant's escrow account deprives them of the use of the money for their own political, charitable and other expenditures. This deprivation has been recognized as a first amendment claim. Seay v. McDonnell Douglas Corp., 427 F.2d 996, 1004 (9th Cir. 1970). As the court found above, however, plaintiffs' first amendment claim is simply not cognizable in this action, where no state action is involved. Plaintiffs' claim thus becomes simply one for money damages, and it is well-recognized that money damages are rarely, if ever, irreparable. Virginia Petroleum, 259 F.2d at 925.

 In addition, the stated harm is to some degree inevitable. Were the court to grant the injunction, plaintiffs would be required to post a bond equal to the money plaintiffs claim is being wrongfully exacted from them. 29 U.S.C. § 101; F.R.C.P. 65 (c). Plaintiffs concede that they would be unable to post a bond in that amount for the 50,000 putative class members, and suggest alternatively that they pay the contested fees into the registry of the court. The court declines to adopt this burdensome suggestion and notes that, were it to do so, the resulting burden to plaintiffs would be exactly the same. The defendant is not expending fees over their objections, but only depriving them of money which they would otherwise use for their own purposes. The preliminary injunction sought by plaintiffs would provide no remedy for this harm, as the money would be paid into the registry of the court and plaintiffs would still be deprived of its use.

 Plaintiffs also fail to show that the "public interest," which they claim is in enforcing the limited-purpose collections required under Beck, outweighs the federal labor policy against injunctions as recognized in Machinists v. Street, 367 U.S. 740, 6 L. Ed. 2d 1141, 81 S. Ct. 1784 (1961) and Railway Clerks v. Allen, 373 U.S. 113, 10 L. Ed. 2d 235, 83 S. Ct. 1158 (1963). In Street and Allen, the court found that the expenditure of agency shop fees on non-collective bargaining activities violated the RLA § (2)(11). The Beck court relied heavily on these decisions in holding that the NLRA § 8(3)(a) prohibited the exaction of fees for such purposes.

 In Street, however, the Court went on to find that the use of an injunction to prohibit the collection of any fees was improper. This would be true, the Court added, even where the injunction would be subject to modification to permit collection of that portion of the fee that the union could show were spent on collective bargaining activities. 367 U.S. at 771-72. In Allen, the court likewise found an injunction improper, stating that " lest the important functions of labor organizations under the Railway Labor Act be unduly impaired, dissenting employees (at least in the absence of special circumstances not shown here) can be entitled to no relief until final judgment in their favor is entered." 373 U.S. at 120.

 This policy against interfering prematurely with union activities, which the Supreme Court has recognized under the RLA, is equally applicable under the NLRA. Cases cited by plaintiffs in which an injunction was found appropriate are first amendment cases and are thus inapplicable. See Tierney v. City of Toledo, 824 F.2d 1497 (6th Cir. 1987), Lowary v. Lexington Local Bd. of Educ., 854 F.2d 131 (6th Cir. 1988). Although first amendment claims may properly override the anti-injunctive concerns of Street and Allen, plaintiffs' Beck concerns do not.

 For the reasons stated above, plaintiffs' motion for a preliminary injunction will be denied.


 Upon consideration of defendant's Motion to Dismiss, the opposition and reply thereto, and plaintiffs' Motion for Preliminary Injunction and the opposition thereto, and the record herein, it is, for the reasons set forth in the accompanying memorandum opinion, hereby


 1. Defendant's motion to dismiss is granted as to plaintiffs' first amendment claim, and denied as to plaintiffs' NLRA § 8(a)(3) and breach of duty of fair representation claims.

 2. Plaintiffs' motion for a preliminary injunction is denied.

 The accompanying memorandum opinion shall constitute the Court's findings of fact and law in accordance with Rule 52 of the Federal Rules of Civil Procedure.

 Upon consideration of the representations of counsel at the preliminary injunction hearing, it is further

 ORDERED, that defendant shall file its Motion for Summary Judgment within 30 days of the date of this order, with opposition and reply filed in accordance with Local Rule 108.


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