KINGSTAD v. STATE BAR OF WISCONSIN (September 9, 2010)

Any person who wants to practice law in Wisconsin must join the Wisconsin State Bar and pay the compulsory dues it charges its members. Pursuant to Wisconsin Supreme Court rule, the Bar may fund activities that are related to its purposes but may not fund “political or ideological activities that are not reasonably intended for the purpose of regulating the legal profession or improving the quality of legal services.” In 2007, the State Bar proposed to use compulsory dues for a public image campaign. Several members objected. An arbitrator ruled in the Bar's favor. On appeal, Magistrate Judge Crocker upheld the finding. The objectors appeal.

In their opinion, Judges Bauer, Rovner, and Hamilton affirmed. The First Amendment is implicated when a state requires its attorneys to join a group and to provide financial support for that group. The Supreme Court has concluded that some mandatory associations are permissible because they serve legitimate governmental purposes. Mandatory state bars are such associations. There are limits, however, to the types of activities that can be funded by compulsory dues. The Court referred to its 1996 decision in Thiel. In that case, the Court found constitutional a Wisconsin rule that permitted the funding of non-political and non-ideological activities even if they were not germane to the “constitutional purposes” (that is, the purposes that justify the association’s existence under the First Amendment) of the association. In an alternative holding, the Court concluded that the activities at issue were germane to those purposes. Since Thiel, however, the Supreme Court has decided United Foods and the First Circuit has decided Romero. In United Foods, the Supreme Court held that mandatory support for an agricultural collective's generic advertising violated the First Amendment. Although the speech was not political or ideological, the Supreme Court concluded that it was not related to an otherwise proper goal that justified the collective’s existence. Likewise, in Romero, the First Circuit held that a bar association's mandatory life insurance plan violated the First Amendment. The court concluded that mandatory dues are permissible only for activities that were germane to the purposes that justified the association. In light of United Foods and Romero, the Court overruled one of the alternative holding in Thiel and concluded that the State Bar's mandatory dues must be reasonably related to one of its dual constitutional purposes -- regulating the profession or improving the quality of legal services. In applying that standard to the activities in question, the Court adopted a deferential, "reasonably related," standard of review. The Court concluded that the public image campaign expenditures were germane to improving the quality of legal services. The campaign was meant to improve lawyers' public image, which could lead to better client relationships, which could lead to higher-quality services.

Because the panel opinion overruled one of the alternative holdings of Thiel, it was circulated among active service judges. Although no judge favored rehearing en banc on that issue, Judge Sykes favored rehearing on the panel's application of the standard to the activities in question. She wrote separately, dissenting from the denial of rehearing en banc. She called the panel's approach "procedurally questionable" and "substantively flawed." With respect to procedure, Judge Sykes noted that the arbitrator never ruled on "germaneness" and that there is very little in the record on that issue. She suggested the remand requested by the objectors might be appropriate. With respect to substance, she took exception to the panel's conclusion that the campaign was germane. Not only was there no support in the record for that conclusion, what little there was in the record supported the opposite conclusion. The campaign was about marketing and in the interests of the lawyers, not the public.