Monday, July 30, 2001
State Bar Agrees to Pay $900,000 in Legal Fees in Brosterhous Case
By a MetNews Staff Writer
The final chapter in the decade-long Brosterhous dispute over expenditure of State Bar dues appeared to come to a close Friday with an agreement under which the Pacific Legal Foundation will get $900,000 in legal fees.
The conservative legal organization sued the State Bar in 1991 on behalf of 43 California attorneys who alleged that their mandatory dues were being used for political and other improper purposes. A Sacramento Superior Court judge ruled for the Pacific Legal Foundation in 1999, and the State Bar earlier this year opted to drop its appeal, leaving only the question of attorney fees.
The fee settlement figure was almost three times the State Bar’s initial offer, according to the PLF.
Foundation attorney Stephen McCutcheon said the PLF demanded about $1.1 million in base fees, but sought a multiplier to reflect the case’s importance.
A State Bar statement noted that the settlement was substantially less than the $2.3 million demand that included the multiplier.
“We are pleased to have resolved the final issue in a case that lasted 10 years, State Bar President Palmer Brown madden said in a statement. “I think this is a reasonable solution.”
The long-running legal dispute over use of State Bar fees had its origin in the 1990 U.S. Supreme Court ruling in Keller v. State Bar of California. In that case, the high court ruled that that the First Amendment prohibits the State Bar from using compulsory dues to finance political or ideological activities unrelated to professional regulation or “improving the quality of legal services.”
Since that time, the State Bar has permitted attorneys to deduct the amount of dues that it calculates are devoted to political purposes. The dues reduction, which the State Bar calculates annually, is sometimes referred to as “Hudson fees” after Chicago Teachers v. Hudson, 475 U.S. 292, a 1986 case in which the court required unions to adopt procedures for objecting to the use of dues for ideological causes.
Under procedures adopted by the State Bar, lawyers who object to the calculation may challenge it in arbitration.
The State Bar calculated the 1991 Hudson deduction, based on 1989 expenditures, at $3. The arbitrator subsequently increased it by $4.36, which the Brosterhous plaintiffs attacked as inadequate.
They then filed a 42 U.S.C. Sec. 1983 free-speech challenge. The state Supreme Court in 1995 rejected the State Bar’s argument that the arbitration program was the exclusive avenue of challenge, and the matter moved to trial in Sacramento Superior Court.
After a two-phase trial in 1991, Sacramento Superior Court Judge Morris England Jr. held that a number of programs which had in the past been charged to mandatory dues are political or ideological in character and thus “non-chargeable” to mandatory dues under Keller.
England found, among other things, that:
•The Conference of Delegates was “non-chargeable in its entirety” because its 1989 activities were “tainted by unacceptable non-germane, ideological coloration” such that “the impermissible and the permissible [were] intertwined beyond separation.”
•The Office of Bar Services, which served as a liaison between the State Bar and voluntary bar associations, and the Bar Leaders Conference—which educates voluntary bar leaders—were non-chargeable because local bar associations engage in political or ideological activity, and because the office’s and conference’s assistance to local bars in organizing their activities was not shown to “improve the quality of legal service to the people of the state.”
•Activities directed at benefiting designated sub-groups of lawyers, such as women or minorities, were chargeable to the extent that they sought to remedy actual or perceived barriers to participation within the State Bar. The State Bar may not, however, “spend mandatory dues on remedying problems which are firmly entrenched in society itself,” such as by supporting a mentoring program for minority lawyers, the judge said.
•Lobbying is chargeable only to the extent that it relates to “the concept of legal service by an attorney to his or her client.” Lobbying for the improvement of the legal system in “attenuated” ways, such as by increasing judicial salaries, was held to be non-chargeable, along with all lobbying in Washington, D.C.
•Volunteers in Parole, which matches attorneys as mentors to young parolees, is non-chargeable in its entirely because, although it is a successful and “praiseworthy endeavor,” the “participants act, not as lawyers, but as caring members of society.”
The plaintiffs were awarded damages reflecting the amount the State Bar should have added to the Hudson deduction—$10 apiece, for a total of $430.
Since the time the suit was filed, the Legislature has imposed sweeping restrictions on the programs on which the State Bar may spend dues money, and the State Bar has pared back its activities and spun off the more controversial programs in an effort to fend off further challenges.
The changes were spurred more by a veto of a State Bar dues bill by then-Gov. Pete Wilson than by the ongoing Brosterhous case. McCutcheon said the State Bar argued before trial that the changes mooted the lawsuit, but the case went forward.
In January Madden said there was little reason to pursue an appeal because of the changes.
“The fact is that we now rely principally, if not exclusively, on voluntary funds for the activities that were the source of so much controversy,” Madden told the MetNews after the decision was reached in January to drop the matter and move to the fee negotiations.
McCutcheon said the case was important because a future State Bar, and a future Legislature and governor, otherwise might return to the more expansive view of what kind of spending is allowed.
“This case ties the Bar’s hands,” McCutcheon said.
Copyright 2001, Metropolitan News Company