Gregory F. Zoeller, Attorney General and Rick J. Ruble, Commissioner of the In. Dept. of Labor v. James M. Sweeney, David A. Fagan, Charles Severs

ATTORNEYS FOR APPELLANTS ATTORNEYS FOR APPELLEES ATTORNEYS FOR AMICI CURIAE
Gregory F. Zoeller Dale D. Pierson [see below]
Attorney General of Indiana Elizabeth A. LaRose
Melinda S. Hensel
Thomas M. Fisher IUOE Local 150 Legal Dept.
Solicitor General Countryside, Illinois

Heather H. McVeigh Marc R. Poulos
Ashley T. Harwel Kara M. Principe
Jonathan R. Sichtermann Indiana, Illinois, Iowa November 6 2014, 10:00 am
Deputy Attorneys General Foundation for Fair Contracting
Indianapolis, Indiana Countryside, Illinois

Jeffrey S. Wrage
Blachly, Tabor, Bozik, & Hartman
Valparaiso, Indiana
______________________________________________________________________________

In the
Indiana Supreme Court
_________________________________

No. 45S00-1309-PL-596

GREGORY F. ZOELLER, ATTORNEY GENERAL OF THE STATE OF INDIANA AND
RICK J. RUBLE, COMMISSIONER OF THE INDIANA DEPARTMENT OF LABOR,
Appellants (Defendants),

v.

JAMES M. SWEENEY, DAVID A. FAGAN, CHARLES SEVERS, JAMES C. OLIVER,
BRYAN SCOFIELD, EARL CLICK JR., AND
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 150-AFL-CIO
Appellees (Plaintiffs).
_________________________________

Appeal from the Lake Superior Court, Cause No. 45D01-1305-PL-52
The Honorable John M. Sedia, Judge
_________________________________

November 6, 2014

Dickson, Justice.

This is a direct appeal from a trial court judgment declaring that two provisions of the
Indiana Right to Work Law, Indiana Code sections 22-6-6-8 and 22-6-6-10, violate Article 1,
Section 21 of the Indiana Constitution. The plaintiffs, Local 150 of the International Union of
Operating Engineers, AFL‐CIO—an exclusive-agency union—and several of its members and
officers (collectively the "Union"), filed a complaint against the Attorney General of Indiana and
the Commissioner of the Indiana Department of Labor (the "State"), seeking a declaratory judg-
ment that various provisions of the Indiana Right to Work Law, Ind. Code § 22-6-6 et seq., vio-
lated several parts of the Indiana Constitution. In response to the State's consolidated motion to
dismiss for failure to state a cause of action, the trial court dismissed all of the Union's claims
except Count I, as to which the court not only denied dismissal but also entered final judgment
sua sponte, declaring the challenged statutory provisions unconstitutional.

The State has appealed, and because the judgment declares a state statute unconstitutional
in whole or in part, this appeal falls within the mandatory and exclusive jurisdiction of the Indi-
ana Supreme Court. Ind. Appellate Rule 4(A)(1)(b). We now reverse the trial court's denial of
the motion to dismiss and its grant of declaratory judgment.

The relief granted by the trial court was limited to the Union's claim that the challenged
provisions violated Section 21. As to all other claims of constitutional invalidity, the trial court
did not grant relief but rather dismissed such claims. We thus restrict our analysis to the trial
court's judgment as to Section 21.

Before we proceed, however, we address the Union's argument that principles of waiver
and estoppel preclude some of the State's arguments. The Union purports that the State has
waived these arguments "because it failed to make them in the trial court." Appellees' Br. at 28
(citing Cavens v. Zaberdac, 849 N.E.2d 526, 533 (Ind. 2006)). The State responds that the trial
court's entry of declaratory judgment on the merits, rather than merely denying the State's motion
to dismiss, "deprived the State of the opportunity to develop its second- and third-tier arguments
in defense." Appellants' Reply Br. at 19. In Cavens, the defense counsel had an opportunity to
raise an argument but sought "only a clarification" and failed to "object to the trial court's re-
sponse" to preserve the issue for appeal. 849 N.E.2d at 532–33. This case is not Cavens. Here,
the trial court entered final judgment sua sponte on the State's motion to dismiss without provid-
ing the State—which did not move for summary judgment—the opportunity to respond. See Ind.

2
Trial Rule 56(C). We find no waiver.

The trial court correctly described the issue presented as one of law, not fact. We review
such questions of law de novo without deference to a trial court's determination. See Paul Stieler
Enterprises, Inc. v. City of Evansville, 2 N.E.3d 1269, 1272 (Ind. 2014) ("Whether a statute or
ordinance is constitutional on its face is a question of law and we review the matter de novo.").
Our methodology for reviewing alleged violations of the Indiana Constitution is well-established.
Any statute challenged under the Indiana Constitution "stands before this Court 'clothed with the
presumption of constitutionality until clearly overcome by a contrary showing.'" Dvorak v. City
of Bloomington, 796 N.E.2d 236, 237–38 (Ind. 2003) (quoting Boehm v. Town of St. John, 675
N.E.2d 318, 321 (Ind. 1996)). The party challenging the constitutionality of a statute bears the
burden of proof, and all doubts are resolved against that party and in favor of the legislature. Id.
at 238. The Union requests that this Court "[d]eclare that the Indiana Right to Work [L]aw, Indi-
ana Code § 22-6-6 is invalid in its entirety; and of no force or effect as a violation of the Indiana
Constitution." Appellants' App'x at 16. In other words, the Union seeks a general declaration
that the Indiana Right to Work Law is unconstitutional on its face and thus faces a heavier bur-
den of proof. "When a party claims that a statute is unconstitutional on its face, the claimant as-
sumes the burden of demonstrating that there are no set of circumstances under which the statute
can be constitutionally applied." Baldwin v. Reagan, 715 N.E.2d 332, 337 (Ind. 1999) (emphasis
added).

Section 21 of the Indiana Bill of Rights, Article 1 of the Indiana Constitution, provides in
relevant part that "[n]o person's particular services shall be demanded, without just compensa-
tion." Ind. Const. art. 1, § 21. To prevail on its Section 21 claim, the Union must demonstrate:
(1) that it performs "particular services," (2) "on the State's demand," and (3) is entitled to "just
compensation." Bayh v. Sonnenburg, 573 N.E.2d 398, 411 (Ind. 1991); accord Cheatham v.
Pohle, 789 N.E.2d 467, 476 (Ind. 2003) ("This provision applies only if both a 'person's particu-
lar services' are rendered and they have been 'demanded' by the State."). The trial court rea-
soned—and the Union agrees—that "the effect of IC 22-6-6-8 and IC 22-6-6-10 under the cur-
rent, long-standing federal labor law, is to demand particular services without just compensa-
tion," and thus violate Section 21. Order, Appellants' App'x at 5.

3
 Under current federal labor law, an exclusive-agency union must represent the interests
of all employees in the unit regardless of whether they are union members; non-union members
receive the same wages and other benefits negotiated by the union for its members. See
29 U.S.C. § 159(a) ("Representatives designated or selected for the purposes of collective bar-
gaining by the majority of the employees in a unit appropriate for such purposes, shall be the ex-
clusive representatives of all the employees in such unit for the purposes of collective bargaining
in respect to rates of pay, wages, hours of employment, or other conditions of employment . . . .")
(emphasis added).

The first challenged provision of the Indiana Right to Work Law prohibits employers
from requiring union membership or the payment of monies as a condition of employment:

A person may not require an individual to:
(1) become or remain a member of a labor organization;
(2) pay dues, fees, assessments, or other charges of any kind or amount to a labor
organization; or
(3) pay to a charity or third party an amount that is equivalent to or a pro rata part
of dues, fees, assessments, or other charges required of members of a labor organ-
ization;
as a condition of employment or continuation of employment.

Ind. Code § 22-6-6-8. The second provision, Indiana Code section 22-6-6-10, makes the know-
ing or intentional violation of section 8 a Class A misdemeanor.

On appeal, the State and the Union dispute whether the challenged provisions of the Indi-
ana Right to Work Law constitute a demand by the State for particular services under Section 21.
The State argues that, literally, state law has not demanded the Union to do anything. The Union
responds that its services are indirectly demanded by the State because the State is "charged with
the knowledge of the existence of the federal law which requires unions to represent every indi-
vidual employee fairly," Appellees' Br. at 23, and has enforced the federal law in state courts.
The Union cites Sonnenburg for the proposition that "a request becomes a 'demand' when it is
backed up with the use or threatened use of physical force or legal process which creates in the
citizen a reasonable belief that he is not free to refuse the request.'" 573 N.E.2d at 417.
Sonnenburg, however, did not address the question whether enforcement, by itself, could be a
4
"demand" under Article 21 but rather addressed "how coercive the State's request for services
must be to become a 'demand.'" Id. (emphasis added). On the face of the Indiana Right to Work
Law, there is no state demand for services; the law merely prohibits employers from requiring
union membership or the payment of monies as a condition of employment. See Sweeney v.
Pence, 767 F.3d 654, 666 (7th Cir. 2014).

The Union responds that the "plain language of Article 1, Section 21 does not limit
claims to those involving a State demand." Appellees' Br. at 25. But in interpreting and apply-
ing provisions of the Indiana Constitution, we examine the language of the text in the context of
the purpose and structure of our Constitution and case law interpreting the specific provisions.
Town of St. John, 675 N.E.2d at 321. Article 1 of Indiana's Constitution, Indiana's Bill of
Rights, was written to protect the liberty of Hoosiers from the reaches of their state government.
The overall structure of Indiana's Bill of Rights as limiting state power is well-established:

The Indiana Constitution does not grant government an absolute, limitless state power
and then withdraw discrete portions of it by specific excision. The individual guarantees
in our Bill of Rights merely help to highlight some of the particular contours of the state
power as it has generally been delegated. The particular guarantees of liberty in the
Indiana Bill of Rights are but concrete manifestations of the abstract limiting principle
that state power may only be exercised to advance the peace, safety, and well-being of
Hoosiers. They merely describe with greater particularity some of the personal freedoms
the restriction of which would not, in the framers' view, tend to advance those permissi-
ble state goals.

Whittington v. State, 669 N.E.2d 1363, 1369 n.6 (Ind. 1996) (emphases added). Provisions with-
in Article 1 limit state, not federal, power. Our case law is consistent with this interpretation.
See, e.g., Meredith v. Pence, 984 N.E.2d 1213, 1226 (Ind. 2013); Whittington, 669 N.E.2d at
1368–69. "Because it is federal law that provides a duty of fair representation, Indiana's right-to-
work statute does not 'take' property from the Union . . . ." Sweeney, 767 F.3d at 666 (emphasis
in original). In sum, Article 21 requires just compensation when the state demands particular
services, not when the federal government does so.

The State further argues that, in any event, there is no demand for services at all because
the Union can choose not to be an exclusive-agency union and become a members only union.
The Union responds that "[c]hoosing to represent members-only bargaining units is not an option

5
under the [National Labor Relations Act]" because the "[National Labor Relations Board] will
not process a representation petition by a union seeking a members-only bargain unit" and "a un-
ion that proposes to represent a minority of the bargaining unit has no remedy if the employer
refuses to bargain with it." Appellees' Br. at 32, 34. We disagree. The Union's federal obliga-
tion to represent all employees in a bargaining unit is optional; it occurs only when the union
elects to be the exclusive bargaining agent, for which it is justly compensated by the right to bar-
gain exclusively with the employer. See 29 U.S.C. § 158(a) ("It shall be an unfair labor practice
for an employer . . . (5) to refuse to bargain collectively with the representatives of his employ-
ees, subject to the provisions of section 159(a) of this title."); Sweeney, 767 F.3d at 666 ("The
duty of fair representation is therefore a 'corresponding duty' imposed in exchange for the powers
granted to the Union as to an exclusive representative.").

Conclusion

We conclude that Indiana Code sections 22-6-6-8 and 22-6-6-10 in the Indiana Right to
Work Law do not violate Article 1, Section 21 of the Indiana Constitution. Any compulsion to
provide services does not constitute a demand made by the State of Indiana. We reverse the trial
court's entry of declaratory judgment and its denial of the defendants' motion to dismiss.

Rush, C.J., and David and Massa, JJ., concur.
Rucker, J., concurs in result with separate opinion.

6
Rucker, Justice concurring in result.

I concur in the result reached by the majority. I write separately to emphasize the
significance of the Union seeking “a general declaration that the Indiana Right to Work Law is
unconstitutional on its face . . . .” Slip op. at 3. As the majority points out, “[w]hen a party
claims that a statute is unconstitutional on its face, the claimant assumes the burden of
demonstrating that there are no set of circumstances under which the statute can be
constitutionally applied.” Id. (emphasis added) (quoting Baldwin v. Reagan, 715 N.E.2d 332,
337 (Ind. 1999)).

This case was decided on the strength of the Union’s complaint alone. No testimony or
documents were introduced into evidence. More precisely the Union filed its complaint seeking
declaratory and injunctive relief alleging that the “Right to Work Law” violated various
provisions of the Indiana Constitution. Without responding to the merits of the complaint by
way of answer, the State moved to dismiss the complaint under the provision of Indiana Trial
Rule 12(B)(6) for “[f]ailure to state a claim upon which relief can be granted.” A motion under
this rule “tests the legal sufficiency of a complaint: that is, whether the allegations in the
complaint establish any set of circumstances under which a plaintiff would be entitled to relief.”
Trail v. Boys and Girls Clubs of Nw. Ind., 845 N.E.2d 130, 134 (Ind. 2006). By denying the
State’s motion to dismiss that portion of the Union’s complaint alleging the Right to Work Law
violated Article 1, Section 21 of the Indiana Constitution the trial court necessarily concluded
that on the face of the complaint, the Union may be entitled to relief. See King v. S.B., 837
N.E.2d 965, 966 (Ind. 2005) (noting that in ruling on a motion to dismiss for failure to state a
claim, the trial court is required to view the complaint in a light most favorable to the nonmoving
party and with every reasonable inference in its favor). Hence, the denial of the State’s motion at
this juncture was unproblematic. But, a declaration that the statute is unconstitutional required
additional factual development and legal argument. The parties nevertheless proceeded on
appeal by arguing the merits of the constitutionality question on the present record.

The Right to Work statute provides that the terms of union contracts in effect on March
14, 2012 remain valid. See Ind. Code § 22-6-6-13. On this ground, under the procedural
circumstances here, the Union’s facial constitutional challenge must fail. This is because there
exists at least one “circumstance[] under which the statute can be constitutionally applied.”
Baldwin, 715 N.E.2d at 337; see also Citizens Nat’l Bank of Evansville v. Foster, 668 N.E.2d
1236, 1242 (Ind. 1996) (noting that a facial challenge “demands a sweeping pronouncement of
the statute[’s] constitutionality regardless of the factual setting”).

What is not at stake in this case is an “as applied” constitutional challenge to the statute.
Unlike the heavy burden placed on a party seeking to challenge a statute on its face, an “as-
applied” constitutional challenge asks “only that the reviewing court declare the challenged
statute or regulation unconstitutional on the facts of the particular case.” Dowdell v. City of
Jeffersonville, 907 N.E.2d 559, 564 (Ind. Ct. App. 2009) (emphasis added), trans. denied
(quoting Sanjour v. E.P.A., 56 F.3d 85, 92, n.10 (D.C. Cir. 1995)). And here the Union has not
attempted to demonstrate that under the particular circumstances presented in this case it has
been deprived of compensation by operation of the Right to Work Law.

The National Labor Relations Act and subsequent federal legislation permit employees to
unionize and provide a mechanism for a particular union to serve as the exclusive representative
of all employees on the vote of a majority of employees in a bargaining unit. This is termed
“exclusive representation.” See 29 U.S.C. § 159(a). The benefit of “exclusive representation” to
unions and the people they represent is that federal law compels employers to “bargain” with that
union. See 29 U.S.C. § 158(a)(5). But the federal Act also requires that when a majority of
employees in a “bargaining unit” have elected a union to bargain for them (and the union thus
gains the benefit of exclusive representation) that union must represent (and bear the cost of
representing) all employees, not just the majority. See 29 U.S.C. § 159(a). This is commonly
referred to as a union’s duty of “fair representation.” But the parties here vigorously dispute
whether it is legally possible for a union to operate as something other than an exclusive
representation union, and thus avoid the duty of fair representation and its concomitant costs.
See Br. of Appellants at 24-28; Br. of Appellees at 32-35. Here, the Union has not attempted to
demonstrate that the Right to Work Law operates in such a way as to have actually eliminated or
reduced its compensation from dues or “fair share” payments. Nor has the Union shown that

2
upon expiration of a valid union security agreement, it was unable to operate in a manner that
would allow the Union to charge all of its members for the services the Union provided them.

In essence there may very well exist a set of facts and circumstances that if properly
presented and proven could demonstrate that a union has actually been deprived of compensation
for particular services by application of the Right to Work Law. And thus as to that union the
statute would be unconstitutional as applied. However, this is not that case.

3
AMICI CURIAE

THE INDIANA LEGAL FOUNDATION

Charles B. Baldwin
Todd M. Nierman
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
Indianapolis, Indiana

AMICUS CURIAE BRIEF OF PROFESSOR KENNETH G. DAU-SCHMIDT

Kenneth G. Dau-Schmidt
Professor of Law
Indiana University Maurer School of Law
Bloomington, Indiana

Kenneth B. Elwood
Rhame & Elwood
Portage, Indiana

BRIEF OF AMICI CURIAE JULIE HUFFMAN, MICHAEL MILLER, AND THE NATIONAL FEDERATION OF INDEPENDENT
BUSINESS SMALL BUSINESS LEGAL CENTER

Keith E. White
Barnes & Thornburg LLP
Indianapolis, Indiana

Adam L. Bartrom
Barnes & Thornburg LLP
Fort Wayne, Indiana

Jonathan A. Watson
Passaro, Kahne & Taylor
Benton Harbor, Michigan

Milton L. Chappell
National Right to Work Legal Defense Foundation, Inc.
Springfield, Virginia

BRIEF OF AMICUS CURIAE INDIANA STATE BUILDING AND CONSTRUCTION TRADES COUNCIL

Neil E. Gath
Fillenwarth Dennerline Groth & Towe, LLP
Indianapolis, Indiana

BRIEF OF AMICUS CURIAE UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED IN-
DUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION

Jeffrey A. Macey
Richard J. Swanson
Macey Swanson and Allman
Indianapolis, Indiana