“Fair-share” fees as “compelled speech”; 42 USC § 1983; U.S. Const. amend. I; Abood v. Detroit Board of Educ.; Janus v. AFSCME, Council 31; Janus v. AFSCME, Council 31 (7th Cir.) (Janus Remand); Whether Janus was retroactive; Danielson v. Inslee (9th Cir.); Agostini v. Felton; The “good faith” exception to retroactive application; Reynoldsville Casket Co. v. Hyde; Lugar v. Edmonson Oil Co.; Duncan v. Peck; Wyatt v. Cole (5th Cir.); “Equitable restitution” claim; Mooney v. Illinois Educ. Ass’n (7th Cir.); Montanile v. Board of Trs. of Nat’l Elevator Indus. Health Benefit Plan; Babb v. California Teachers Ass’n (CD CA)

The court affirmed the dismissal of plaintiff-Lee’s § 1983 claim based on the defendant-Union’s collection of “fair-share” fees, holding for the first time that a private party who acts under color of law may assert a “good-faith defense” to a § 1983 claim. Lee is an Ohio public school teacher. When she was hired, she agreed to pay a fair-share fee because she chose not to join the Union. These fees were constitutional under Abood. “Anticipating that the Supreme Court would overrule Abood,” Lee sued the Union, alleging that the fair-share fees violated her First Amendment rights. Two days later, the Supreme Court released Janus, which overruled Abood. The Union moved to dismiss, arguing that its prior collection of fair-share fees was proper under both state law and Supreme Court precedent, and that it acted in good faith at the time. The district court and the court both agreed. After assuming without deciding that Janus applies retroactively, the court concluded that “the good-faith defense constitutes ‘a previously existing, independent legal basis . . . for denying’ a retroactive remedy.” It then joined the Seventh and Ninth Circuits and held “that the good-faith defense precludes claims brought under § 1983 for a return of fair-share fees collected under the Abood regime." Thus, the Union’s “reliance on existing authority satisfied the good-faith defense as a matter of law.” The court rejected Lee’s argument that her claim was one for equitable restitution, noting that an award of damages would compensate her “for the dignitary harm she suffered from being forced to subsidize the Union’s speech, not to recoup fees which had been wrongfully taken—suggesting that her claim is legal in nature.” As it viewed her claim as one arising in law, it did not have to decide “whether the good-faith defense applies to equitable claims.” The district court did not err by dismissing the § 1983 claim.