April 16, 2010 − The U.S. Court of Appeals for the Seventh Circuit yesterday heard oral argument in Jon E. Kingstad, et al. v. State Bar of Wisconsin, a case that stems from a challenge to the State Bar of Wisconsin’s use of mandatory bar dues to fund a 2007 public image campaign.

Wisconsin Supreme Court Rule (SCR) 10.03(5)(b) states: “[t]he State Bar may engage in and fund any activity that is reasonably intended for the purposes of the association. The State may not use compulsory dues of any member who objects to that use for political or ideological activities that are not reasonably intended for the purpose of regulating the legal profession or improving the quality of legal services. The state bar shall fund those political or ideological activities by the use of voluntary dues, user fees or other sources of revenue.”

Appellants (objectors) — Wisconsin lawyers Jon Kingstad, Steven Levine and James Thiel — contend on First Amendment grounds that, regardless of an activities’ status as political/ideological, an “integrated bar” cannot use mandatory bar dues to fund any activity that is not germane to the promotion of lawyer regulation or to improve the quality of legal services. The public image campaign, the objectors argue, was not germane to that purpose.

The State Bar contends that the public image campaign was indeed germane to that purpose, and in any event, First Amendment jurisprudence allows an “integrated bar” to use mandatory dues as long as the member-funded activity is not political or ideological.

The three-judge panel — Judges Ilana Rovner (chair), David Hamilton, and William Bauer — extended time for both parties to support their arguments.

History

In Keller v. State Bar of California, 496 U.S. 1 (1990), the Supreme Court held that political/ideological activities funded by mandatory dues required such activities to be germane to the regulation of the legal profession or improving the quality of legal services. If not germane to these purposes, the Keller court held, political/ideological activities survive constitutional scrutiny so long as objecting members can deduct the dues used to fund them.

The Wisconsin Supreme Court in 1993 revised SCR 10.03(5)(b) on the State Bar’s petition to adhere to the rule announced in Keller.

In Thiel v. State Bar of Wisconsin, 94 F.3d 399 (7^th Cir. 1996), the objectors – including James Thiel − challenged the use of mandatory bar dues to fund what they argued to be non-political/ideological, but also not germane to the purposes stated in SCR 10.03(5)(b). The Court — in an opinion written by Judge William Bauer — held that the “First Amendment does not prohibit the bar from funding non-ideological, non-germane activities with compelled dues.”

Main constitutional arguments

Speaking for the objectors at oral argument, Levine placed “substantial weight” on the more recent decision in United States v. United Foods, 533 U.S. 405 (2001). That case involved mandatory assessments on mushroom handlers for the purpose of advertising — assessments the Court found to be unconstitutional.

The objectors argue that Thiel has been superseded by United Foods, stating in their brief that United Foods “indicates that an expenditure by a mandatory state bar need not be political before it is subject to the Keller requirement of being germane to ‘regulating the legal profession and improving the quality of legal services.’”

The State Bar — represented by Roberta Howell of Foley and Lardner, LLP — contends that United Foods does not match the context of the present case and thus does not overrule Thiel.

Questioning of Levine focused on how United Foods fits into the present case. Judge Rovner asked whether the purpose of compelled dues in United Foods — to allow a “mushroom counsel” to pay for generic mushroom advertising — is somehow different “if not ancillary to some more comprehensive program” like a State Bar.

Howell fielded questions mostly concerning the limits to which a State Bar could compel its members to fund non-political/ideological activities that are not germane to the purposes stated in SCR 10.03(5)(b).

How it got there

Initially, the objectors sought arbitration for dues reductions relating to the 2007 public image campaign. The arbitrator found the activities to be non-political/ideological and thus did not contravene SCR 10.03(5)(b) regardless of whether such activities were germane.

On March 11, 2009, the objectors filed an action for review of the arbitration decision in the Dane County Circuit Court pending a January 2009 petition seeking original review by the Wisconsin Supreme Court, which was later rejected. The State Bar removed the state case to the U.S. District Court for the Western District of Wisconsin. On Nov. 23, 2009, the federal district court ruled in favor of the State Bar. The appeal followed.

The objectors argue the arbitrator exceeded his authority because the decision conflicts with First Amendment law under United Foods. They ask the court to resolve the constitutional question before remanding the case so, ultimately, the arbitrator can determine whether the public image campaign was germane to the purposes stated in SCR 10.03(5)(b).

Judge Rovner questioned the wisdom of such an approach, and asked whether the panel could rule on the “germaneness” issue itself if the record were supplemented. Levine argued that the panel's only purpose was to determine whether “germaneness” is required under United Foods.