Aug. 20, 2024 – A party alleging the State Bar of Wisconsin uses membership dues to fund political and ideological activities cannot seek money damages, under a recent ruling from the U.S. District Court for the Eastern District of Wisconsin.

Atty. Daniel Suhr, represented by the Wisconsin Institute for Law and Liberty (WILL), filed a complaint in December 2023, alleging that the State Bar’s mandatory status is unconstitutional because, Suhr alleges, the State Bar uses membership dues to fund political and ideological activities with which the plaintiff disagrees.

However, the State Bar does not use membership dues to fund political and ideological activities and follows a rigorous annual accounting process to reduce dues for “nonchargeable” activities under Wisconsin Supreme Court Rule (SCR) 10.03(5)(b).

SCR 10.03(5)(b) says the State Bar “may not use the compulsory dues of any member who objects pursuant to SCR 10.03(5)(b)3. for activities that are not necessarily or reasonably related to the purposes of regulating the legal profession or improving the quality of legal services. Expenditures that are not necessarily or reasonably related to the purposes of regulating the legal profession or improving the quality of legal services may be funded only with user fees or other sources of revenue.”

The State Bar engages in an annual “Keller rebate” process every year. The process name derives from Keller v. State Bar of California, 496 U.S. 1 (1990), in which the U.S. Supreme Court held that a mandatory bar may not fund political or ideological activities with mandatory dues unless those activities are germane to regulating the legal profession or improving the quality of legal services.

The Keller Court further held that a mandatory bar could satisfy its constitutional obligation to ensure that such activities were funded only with voluntary payments by adopting a procedure that would allow dissenting members to deduct the pro rata amount spent on those activities from their mandatory dues payment.

The State Bar’s annual Keller rebate process, enshrined in SCR 10.03(5)(b), follows Keller’s mandate. Additionally, the State Bar does not fund any lobbying activity with mandatory dues, even if related to regulating the legal profession or improving the quality of legal services. This State Bar policy goes beyond Keller’s mandate.

But Suhr claims that the State Bar’s Keller rebate process is not constitutionally permissible, despite the U.S. Supreme Court’s ruling in Keller. He sought money damages for his alleged claims. The State Bar filed a motion to dismiss.

Recently, U.S. Magistrate Judge Stephen C. Dries ruled that Suhr cannot seek money damages against the State Bar in the litigation, and also dismissed claims against specific State Bar officers – now immediate past president Dean Dietrich, current Board of Governors Chairperson Melodie Wiseman, and president-elect (vacant).

However, Magistrate Judge Dries also ruled that the State Bar must show, in practice, how its activities and accounting procedures comply with the constitution and court precedent.

That is, the litigation will continue for the State Bar to show, through discovery, that “the activities in question are truly funded independently from mandatory dues.”

The court may also determine whether mandatory membership violates the First Amendment’s Freedom of Association clause if a bar association engages in political or ideological activities “beyond those for which mandatory financial support is justified.”

That is, Suhr argues membership should not be required if the State Bar engages in any activity determined not germane to regulating the legal profession or improving the quality of legal services. The court indicated it would answer that question.

"The State Bar applauds the Court's dismissal of the claims against Past-President Dietrich, Chairperson Wiseman, and the as-yet-elected President-Elect, as well as the Court's dismissal of any claims for money damages," said State Bar President Ryan Billings.

"The Court determined that the remaining claims require further consideration and development of the record. The State Bar intends to defend the litigation vigorously and looks forward to demonstrating that its activities and procedures are constitutionally permissible, as it has in many similar cases over the last seven decades."