Extra Legal
Use and Abuse of Joinder in Copyright
Infringement Actions
By Jeremiah W. Meyer-O’Day1
In Knox v. Service Employees International Union, Local 1000, the Supreme Court further
restricted conditions on when unions may exact dues from agency-fee 2 paying non-member
employees.3 The Court’s heightened concern for the rights of employees of union shops who opt not to
become members of the union contrasts with the lack of concern for the rights of dissenting
shareholders in the context of corporate political advocacy. 4 This article shows the discrepancy in the
1
Juris Doctor, 2013, Northeastern University School of Law.
“Agency fees,” also known as “fair share fees,” are dues imposed on non-member employees whose employers are party
to a collective bargaining agreement with a union that is recognized as an “exclusive bargaining agent” for the employees
as allowed by section 8(a)(3) of the National Labor Relations Act of 1935, codified as amended at 29 U.S.C. § 158(a)(3)
(1974), so as to prevent such represented nonmembers from free-riding on the union’s collective bargaining efforts. See 48
Am. Jur. 2d Labor and Labor Relations § 832 (2012); see also 29 U.S.C. § 158(a)(3) (2012) (permitting employers to agree
to require employees to “tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or
retaining membership” as a condition of employment after the thirtieth day of such employment); cf. 45 U.S.C. §
152, Eleventh (same with respect to unions covered by the Railway Labor Act of 1926 as amended).
3
See Knox v. Serv. Emps. Int’l Union, Local 1000, 132 S. Ct. 2277, 2293 (2012) (requiring unions to follow an opt-in
mechanism for collecting a special assessment from non-member agency-fee paying employees for use in political
advocacy, rejecting the union’s use of an opt-out procedure, and casting doubt on the opt-out practice for regular dues, all
out of its concern that the dissenting non-members not be required even temporarily to subsidize political speech with
which they disagree).
4
See Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 361 (2010) (stating that mechanisms of shareholder
democracy are sufficient to protect dissenting shareholders from compelled association, and as such, shareholder2
NE. U. L. J. Extra Legal (Summer 2013)
Court’s
treatment of compelled speech and association seems to depend on the identity of the entity
)
doing the compelling,5 and then poses questions regarding that discrepancy.
Same Issue, Different Entity, Different Result
Citizens United v. Federal Election Commission involved a challenge to section 441b of Title 2
of the United States Code as amended by the Bipartisan Campaign Reform Act of 2002, 6 which
prohibits any corporation from engaging in “electioneering communications” within thirty days of any
federal primary election or sixty days of any federal general election. 7 The suit concerned this
provision’s application to a film that attacked Hillary Clinton, produced by a non-profit seeking to
release the film during the prohibited time period. 8 In striking down section 441b as an
unconstitutional infringement on corporate speakers’ First Amendment right to freedom of speech,
the Court had two overriding concerns: (1) the law discriminated on the basis of the identity of the
speaker,
9
and (2) limiting corporate expenditures on electioneering communications would
necessarily deprive the public of the corporate point of view.10
In rejecting the government’s position that a compelling interest supported section 441b the
Court specifically rejected the idea that the need to protect dissenting shareholders from having their
protection rationale for law restricting corporate political expenditures during the sixty days prior to an election was
insufficient to uphold the law, and disposing of this concern in just two relatively short paragraphs of discussion).
5
See id.
6
2 U.S.C. § 441b (2012), Pub. L. No. 107–155, Title II, §§ 203, 204, 214(d), 116 Stat. 91, 92, 95 (2002) (amended 2002).
7
2 U.S.C. § 441b(a) (2012). “Electioneering communication” in turn is defined as “any broadcast, cable, or satellite
communication which . . . refers to a clearly identified candidate for Federal office” and “is targeted to the relevant
electorate” that occurs within the thirty days preceding a primary election or the sixty days preceding a general election, 2
U.S.C. § 434(f)(3)(A)(i) (2012); 11 C.F.R. §§ 100.29(a)(2–3) (2012). Federal Election Commission (FEC) rules further
provide that in order to meet the definition of an electioneering communication, the communication must be “publicly
distributed,” which itself requires that the communication be distributed so as to be capable of reaching at least 50,000
members of the relevant electorate. 11 C.F.R. §§ 100.29(a)(2), (b)(3)(ii), (b)(5) (2012).
8
Citizens United, 558 U.S. 310, 319–23.
9
Id. at 340–42. (stating that the majority “f[ound] no basis for the proposition that, in the context of political speech, the
Government may impose restrictions on certain disfavored speakers.”).
10
Id. at 355–57 (stating that “[w]hen Government seeks to use its full power, including the criminal law, to command
where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to
control thought. This is unlawful.”).
NE. U. L. J. Extra Legal (Summer 2013)
property used in a manner contrary to their political interests could justify the ban. 11 The majority
blithely assumed that there was “little evidence of abuse that cannot be corrected by shareholders
‘through the procedures of corporate democracy.’” 12 The majority discussed why a prior case cited for
this same issue in the context of union dues payments did not support the legitimacy of this
shareholder-protection rationale. 13 In Citizens United, there is only a conclusory statement that
shareholders do not need protection from management’s political expenditure choices.
In Knox v. Service Employees International Union, Local 1000 the same members of the
Court reveal a contrary attitude.14 The Knox majority’s primary concern was that unions could require
workers it represents to pay dues that could be used for political advocacy against their will. 15 The
majority noted that one of the ballot initiatives the union opposed with non-member funds would
have strengthened the ability of nonmembers to resist paying full dues.16 The majority states that the
effect of the union’s “procedure was to force many nonmembers to subsidize a political effort designed
to restrict their own rights.”17
The Knox majority emphasized that unions are creatures that only exist in contemplation of
the law and do not possess a constitutional right to spend funds in contravention of agency-fee paying
11
Id. at 361–62.
Id. (quoting First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 794 (1978)).
13
See Bellotti, 435 U.S. at 794 n.34 (distinguishing the union due cases on the basis that dissenting shareholders
voluntarily opted to buy a company’s shares and may just as easily sell them if they disagree with the political expenditures
of the corporation, but neglecting to explain why the same “exit” option that is available to employees (i.e., they could quit
and find a different job) does not vitiate the need to protect such employees from compelled association of the same kind).
14
The Citizens United majority which struck section 441b for the above-mentioned reasons consisted of Chief Justice
Roberts and Justices Scalia, Thomas, Alito, and Kennedy, with Kennedy writing the majority opinion. 130 S. Ct. at 886.
The Knox majority consisted, likewise, of Chief Justice Roberts and Justices Scalia, Thomas, Alito, and Kennedy, with
Alito writing the majority opinion. Knox v. Serv. Emps. Int’l Union, Local, 132 S. Ct. 2277, 2284 (2012).
15
See, e.g., Knox, 123 S. Ct. at 2289 (stating that union’s “compulsory fees constitute a form of compelled speech and
association that imposes a ‘significant impingement on First Amendment rights’”) (quoting Ellis v. Brotherhood of
Railway, Airline & Steamship Clerks, 466 U.S. 435, 455 (1984)); see also id. at 2295 (asking which of either the dissenting
non-member agency fee-payer or the union should be required to bear the risk of the non-member paying too much or too
little for union’s representational activities, and holding that non-members’ constitutional rights compelled the conclusion
that the union should bear such risk).
16
Id. at 2292.
17
Id.
12
NE. U. L. J. Extra Legal (Summer 2013)
non-members’
desires, even on a temporary basis. 18 Finally, the majority rejected the union’s
)
contention that lobbying to support pro-worker initiatives were expenditures germane to the
purposes of collective bargaining and therefore chargeable to nonmembers. The majority argued that
accepting such a “definition of germaneness . . . would effectively eviscerate the limitation on the use
of compulsory fees to support unions’ controversial political activities.”19
Why the Difference?
The Court's application of speech protection clearly appears to vary according to whether the
speech is that of a corporation or a union. In stark contrast with the Court's concerns regarding
agency-fee paying employees in Knox, any real concern for the First Amendment rights of dissenting
shareholders was notably absent from the Citizens United majority’s perfunctory treatment of the
shareholder-protection rationale for section 441b. Such an absence cannot be explained by arguing
that corporations do not engage in political activities inimical to the rights of shareholders; the flurry
of successful corporate lobbying in Delaware ably demonstrates that corporations in fact do engage in
just such political activity.20
What must to be explained are the bases underlying the majority's different conclusions
in Citizens United and Knox. 21 The Citizens United majority seems to have tacitly accepted the
proposition that corporate expenditures on political advocacy are at least ordinarily germane to the
profit-making purposes of a corporation. 22 This contrasts with the Court’s refusal to regard the
18
Id. at 2295 (stating that “if unconsenting nonmembers pay less than their proportionate share, no constitutional right of
the union is violated because the union has no constitutional right to receive any payment from these employees”).
19
Id.
20
See generally Sean J. Griffith, Good Faith Business Judgment: A Theory of Rhetoric in Corporate Law Jurisprudence,
55 DUKE L.J. 1, 63 (2005) (noting that “[w]ith the adoption of § 102(b)(7) of the Delaware General Corporation Law, the
management lobby won an amendment effectively overturning” a decision holding directors and officers liable to the
corporation’s shareholders for gross negligence in conducting business).
21
Compare Citizens United v. Fed. Election Comm’n, 558 U.S. 301, 361–62 (2010) (referring to dissenting shareholders’
“interests” in not subsidizing speech to which they are opposed), with Knox, 132 S. Ct. at 2289 (referring to dissenting
nonmember agency fee payers’ First Amendment rights).
22
I infer the Court's acceptance of this proposition from its blithe reliance on the “procedures of corporate
democracy,” Citizens United, 558 U.S. 310, 360 (quoting Belloti, 435 U.S. At 794). Whether this proposition is true is open
NE. U. L. J. Extra Legal (Summer 2013)
political activities of unions as germane to collective bargaining’s stated goals of improving the wages,
hours, and working conditions of workers.23
These distinctions cannot be founded on the fact that unions exist only as creatures of statute.
Corporations are juridical creatures, and as such, derive their rights from legislative fiat just as unions
do. The most plausible justification for such a difference in treatment was one not mentioned in either
case: It is perhaps less of a hardship to exercise the option to exit a corporation by selling one’s shares
than it is to leave one’s job. In the former case, one loses some investment funds, whereas in the latter
one loses one’s livelihood, a primary source of one’s identity, and other important benefits that
employment supplies.24
No such argument was advanced in either Citizens United or Knox, and this lack reflects the
Justices’ assumptions regarding the political speech of unions as compared to that of business
corporations. In the former case, the union has only mere interests which must be balanced carefully
against the First Amendment rights of the individual natural persons who are the union’s
constituents. In the latter case, the corporation has strong First Amendment rights against which the
to serious doubt, given the facts that: (1) “under the basic rules of state law, shareholders do not have the right to vote
directly on, or to enact bylaws addressing, the ordinary business decisions of the corporation,” Lucian A. Bebchuk &
Robert J. Jackson, Jr., Corporate Political Speech: Who Decides?, 124 HARV. L. REV. 83, 87 (2010); and (2) even under the
recently reformed federal proxy rules for shareholder-initiated proposals, so long as political advocacy is conceived of as
falling under the rubric of “ordinary business operations,” shareholder proposals to regulate a corporation's political
activities may be excluded by the corporation from its form of proxy. 17 C.F.R. § 240.14a–8(h)(i)(7) (2012). See also CA,
Inc. v. AFSCME Emps. Pension Plan, 953 A.2d 227, 234–35 (Del. 2008) (stating that “[i]t is well-established Delaware law
that a proper function of bylaws is not to mandate how the board should decide specific substantive business decisions,
but rather, to define the process and procedures by which those decisions are made.”).
23
Compare Citizens United, 558 U.S. 310, 361–62 (failing to address the propriety of such expenditures in light of
corporate purposes), with Knox, 132 S. Ct. at 2295 (rejecting contention that political activity on behalf of workers’
interests can be germane to union’s statutory purpose).
24
See generally Richard E. Lucas et al., Unemployment Alters the Set Point for Life Satisfaction, 15 PSYCHOL. SCI. 8, 10–11
(2004) (examining data from the German Socio-Economic Panel Study and finding that involuntary unemployment
resulted in a precipitous drop in life satisfaction followed by a failure to return to the previous baseline level of life
satisfaction; the effect was more pronounced with multiple bouts of unemployment during the 15-year period studied);
Andrew E. Clark et. al., Scarring: The Psychological Impact of Past Unemployment, 68 ECONOMICA 221, 230 (2001)
(finding also that long-term unemployment resulted in men (but not women) becoming indifferent to the prospect of
reemployment); Marcus Gangl, Scar Effects of Unemployment: An Assessment of Institutional Complementarities, 71
AM. SOC. REV. 986, 1000 (2006) (finding that unemployment reduced earnings on a persistent basis relative to similarlysituated but continuously employed workers in a panel study involving the U.S. and twelve Western European nations).
NE. U. L. J. Extra Legal (Summer 2013)
mere
interests of dissenting constituents can be waived away with a few platitudes about shareholder
)
democracy or shareholders’ ability to exit the offending corporation.25
To reiterate, neither Citizens United nor Knox considered whether there might be different
considerations to take into account when evaluating the legitimacy of corporate versus union political
expenditures. If there are legitimate and principled reasons for heavily discounting the legitimacy of
the political advocacy of organized labor and for simultaneously exalting the legitimacy of the political
advocacy of organized capital, neither Citizens United nor Knox tell us what those reasons might be.
This is a rather glaring omission, particularly for the institution charged with the duty to “say what the
law is.”26
25
As Justice Stevens’ dissent in Citizens United points out, “[b]y ‘corporate democracy,’ presumably the [majority] means
the rights of shareholders to vote and to bring derivative suits for breach of fiduciary duty. In practice, however, many
corporate lawyers will tell you that ‘these rights are so limited as to be almost nonexistent,’ given the internal authority
wielded by boards and managers and the expansive protections afforded by the business judgment rule.” 558 U.S. 310,
467–77 (Stevens, J., dissenting) (citing Margaret M. Blair & Lynn A. Stout, A Team Production Theory of Corporate Law,
85 VA. L. REV. 247, 298–315, 320 (1999) (discussing the ineffectual nature of the so-called mechanisms of corporate
democracy); Adam Winkler, Beyond Bellotti, 32 LOY. L.A. L. REV. 133, 165–66 and 199–200 (1998) (same)); see
also Daniel R. Fischel, Organized Exchanges and the Regulation of Dual Class Common Stock, 54 U. CHI. L. REV. 119,
134–36 (1987) (reporting empirical studies documenting the inability of minority shareholders to influence corporate
behavior).
26
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803).