(Posted April 28) Maybe, and apparently it will take a federal judge, or court, to decide the question.
The president of the Michigan AFL-CIO, Ron Bieber, has called a new law passed by the Michigan Legislature and signed by Gov. Rick Snyder “unfair, unconstitutional and downright un-American.” Four unions, including Bieber’s, have filed suit in Michigan’s Eastern District Federal Court to block a provision in Public Act 269 of 2015 that bans corporations from administering a PAC payroll deduction program for any PAC not their own, or for an association PAC of which the corporation is not a member. Practically speaking, the new law bans a corporation from administering a PAC payroll deduction program for a union PAC like the ones Bieber utilizes.
Unlike federal law, the Michigan Campaign Finance Act (or MCFA, a post-Watergate reform passed in 1976) does not require a corporation to administer a union PAC payroll deduction program at the state level if the corporation administers such a program for its own corporate PAC.
The unions should be happy that their draw of a judge assigned to hear the case is Linda Parker, an appointee of President Barack Obama, named to the bench in 2014 after stints as a Wayne Co. circuit judge and as director of the Michigan Dept. of Civil Rights under Gov. Jennifer Granholm. Parker succeeded the retired Robert Cleland, who had been appointed by a Republican president.
If Parker rules in favor of the plaintiffs (the unions), it will be interesting to see whether Michigan Secretary of State Ruth Johnson (the defendant in this case) will appeal Parker’s decision to the 6th Circuit Court of Appeals, where she (and the state) might get a more favorable verdict. Earlier this year, Johnson did NOT appeal a decision by another federal judge, John Corbett O’Meara, to temporarily stay another law passed last December that prevented local officials from providing information on local ballot proposals. Now Johnson and local governments have reached an agreement that O’Meara has accepted in making his injunction permanent.
Here are some issues the courts will look at to determine whether PA 269 is unconstitutional, if not “un-American”:
- Prior to 1994, the MCFA was not necessarily “fair and balanced.” There seemed to be a double standard in the statute. On the one hand, corporations, both for-profit and non-profit, were banned in Section 54 of the MCFA from using corporate treasury funds to make contributions to state and local candidates and political party committees. Corporations were also banned from using corporate treasury funds to make independent expenditures. On the other hand, labor unions could make political contributions to state and local candidates and political parties from their union treasuries, comprised of mandatory union dues money. Labor unions were also permitted to make independent expenditures from union dues in support of or in opposition to various candidates. Labor unions, prior to an alteration of the MCFA under Gov. John Engler and a Republican-controlled legislature in 1994, were not even required to have a separate segregated fund. Evidently, the unions felt this was when the law was truly “American.” In a related development, four years earlier, the U.S. Supreme Court in Austin v. Michigan Chamber of Commerce had rejected a claim by the Chamber that Michigan’s MCFA represented “disparate treatment” of corporations and labor unions, with the corporations getting the shaft. The unions liked this, too. However, later, in 2010, in the now-famous Citizens United decision, the high bench reversed its 1990 Austin decision for 1st Amendment (free speech) reasons.
- In 2013, the feds’ 6th Circuit Court of Appeals, in Bailey v. Callaghan, turned aside a challenge by a teachers’ union to another Michigan law that had been enacted the previous year, also by a Republican-controlled legislature and signed by Gov. Rick Snyder. This law, PA 53 of 2012, was passed after the Michigan Education Association had spent a lot of money to recall state Rep. Paul Scott (R-Grand Blanc). PA 53 made such a recall less likely to happen in the future by prohibiting teacher unions from collecting dues via payroll deduction. Interestingly, that new law might have gone even further, but didn’t — it allowed other public employers like police and fireman to continue to collect union dues through payroll deduction as well as clerical unions like AFSCME and SEIU to do the same. The new law also did not prohibit the collection of union dues using payroll deduction for the six unions that represent Michigan state employees. PA 53 survived the unions’ legal challenge in the 6th circuit because the court said the law needed to be evaluated only on a “rational” basis, i.e., that the issue could be resolved by the political/democratic process, not the courts. In other words, the court’s Bailey decision said PA 53 didn’t stop teachers’ unions from collecting dues, but whether they could do it via mandatory payroll deduction was a decision the Michigan legislature had the right to determine.3. Back in 2005, the Michigan Dept. of State, in an interpretive statement, said a corporation that provides a labor union with payroll deductions to collect union PAC contributions has, in effect, made an in-kind contribution to that labor union PAC. Such an arrangement, the Dept. went on to say, is a violation of of Section 54 of the MCFA, which bans corporate contributions, UNLESS the union PAC reimburses the corporation for the costs it incurs in administering the payroll deduction program for the union. Reimbursement would “cure” the violation, said the Department. But the Michigan Supreme Court, in 2011, ruled that reimbursement “curing” didn’t do the job — reimbursement would henceforth be banned. That as much as anything gave the Michigan legislature a rational basis for enacting PA 269 of 2015.
4. The AFL-CIO challenge to PA 269 raises the issue of “impairment of contract,” relying on the argument that the U.S. and Michigan Constitutions do not allow a government to intrude into and change a private contract, and that PA 269 constitutes precisely such an invasion. But a case known as Toledo Area AFL-CIO v. Pizza, decided in 1998, is 6th Circuit precedent for finding that if a labor union and corporation have a contract whereby the corporation agrees to administer a union PAC payroll deduction program, the prohibition found in PA 269 can go into effect — but only after the expiration of the contract, and then it can.
However the legal challenge against PA 269 is decided, the next question is what the litigants will do next. Depending on whether one side wins or loses in Judge Parker’s court, will there be an appeal to the 6th Circuit? And, after that, to the U.S. Supreme Court? If it’s the Secretary of State who might be doing the appealing, will she “punt” as she did in the “gag law” ruling by Judge O’Meara this week? The reaction to O’Meara’s injunction by the GOP-controlled legislature is likely to be muted between now and the Nov. 8 general election, but let’s see what happens in a “lame duck” session at the end of the year.
In other words, it’s going to take a while longer to decide not only what is unconstitutional, but also “un-American.”