Complaint - MI v. Johnson

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 1 of 28
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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MICHIGAN STATE AFL-CIO; UTILITY WORKERS

UNION OF AMERICA, AFL-CIO, LOCAL 223;
GEORGE HORUCZI; INTERNATIONAL
BROTHERHOOD OF ELECTRICAL WORKERS,
AFL-CIO, LOCAL 58; MICHIGAN STATE UTILITY
WORKERS COUNCIL; and WILLIAM D.
Case No.
CHADWICK, JR.,
Plaintiffs,
Hon.
v.
RUTH JOHNSON, IN HER OFFICIAL CAPACITY
AS MICHIGAN SECRETARY OF STATE;
and WILLIAM SCHUETTE, IN HIS OFFICIAL
CAPACITY AS MICHIGAN ATTORNEY GENERAL,
Defendants.
_____________________________________________/
COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF
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NATURE OF THIS ACTION

This action challenges the constitutionality of a recent amendment to the
Michigan Campaign Finance Act The amendment, 2016 Public Act 269 (PA
269) selectively prohibits unions, but not corporations, from using the most
effective method of collecting voluntary contributions for spending in campaigns for
Michigan elective office. The 2016 election campaign season is fully underway.
Plaintiffs seek injunctive and declaratory relief to preserve their constitutional rights
to participate in this election.
Under the Michigan Campaign Finance Act, 1976 Public Act 388, M.C.L.
169.201 et seq. (MCFA), unions and corporations may not make contributions in
support of candidates with their general funds.
They may do so only by
establishing a separate political committee called a separate segregated fund (SSF

or PAC). Union and corporate SSFs can be funded solely through voluntary
contributions from the unions or corporations restricted class.
A unions
restricted class is comprised primarily of its members, as well as the unions officers
and managerial employees. For-profit corporations may solicit contributions from
their officers, managerial employees and stockholders. Non-profit corporations may
accept SSF contributions from their officers and managerial employees and their
individual members, as well as from officers and managerial employees of their
corporate members.
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For union members, payroll deduction (often called PAC check-off) is by

far the most effective and widely used method for giving financial support to their
unions political advocacy. Payroll deduction allows employees to contribute a
small amount (along with union dues and other deductions) with each payroll,
without the burden of writing a check or arranging for credit card or bank
transactions. Under the MCFA and Michigans Wages and Fringe Benefits Act,
M.C.L. 408.477, PAC check-off must be authorized by an employee in writing, and
must be entirely voluntary.
For unions representing employees in the private sector, the vast majority of
SSF contributions are received through PAC check-off administered by the
corporate employers of their members. Unions commonly negotiate PAC check-off
in their collective bargaining agreements with the employers. The payroll deduction
method has been in use in Michigan for many years.
A series of amendments to the MCFA enacted late in 2015 changed all that.
At the very end of the legislative session, a surprise, last-minute addition to a bill
containing routine amendments to the MCFA passed both houses, without hearings
and with little debate, in a single session that lasted well into the night. This
high-speed law making was virtually without precedent, other than in rare
emergencies.
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Among the many changes made in the resulting bill, 2015 Public Act 269
(PA 269), which went into effect immediately upon signing by the Governor, was
a selective, targeted ban on PAC check-off. As amended by PA 269, the MCFA
now allows corporations to continue using PAC check-off for their own SSFs and
for the SSFs of their trade associations. But under PA 269, it is now a felony for a
corporation to administer PAC check-off for its employees contributions to their
unions SSF.
No explanation was given for amending the MCFA to treat unions and
corporations differently.
This is not surprising, because there is no credible
rationale for the Legislatures discriminatory and precipitous action. The political
agenda behind PA 269, which passed along party lines, was obvious to all. A
contemporaneous news report quoted a source describing the revisions as a head
shot to organized labor and the Democratic political candidates they support.
Public Act 269 violates the U.S. Constitution in several respects. The First
Amendment right to express political views, associate and advocate in elections for
public office is accorded paramount protection. Prior to PA 269, the ability to collect
voluntary political contributions through payroll deduction was available to all
private sector entities in Michigan for profit and non-profit corporations and
unions alike. Under PA 269 unions are now disqualified from using the most
effective means of political fundraising, while corporations remain free to employ it.
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Discriminatory government speech regulation that selectively favors some preferred

speakers over others are presumptively invalid; they are permitted only in very
limited contexts.
In addition, apart from its selective application to certain
speakers, PA 269 significantly impairs the unions and their members exercise of
their rights of political speech and association; therefore it must satisfy strict
scrutiny, which requires the Government to identify a compelling interest and show
that the measure is narrowly tailored to achieve that interest. The government can
identify no compelling interest here and PA 269 fails under strict scrutiny. Indeed,
PA 269 fails even the lenient rational basis test, and therefore violates the Equal
Protection Clause. The government can assert no rational basis for selectively
prohibiting the use of PAC check-off based on the identity of the entity doing the
political fundraising. Finally, because PA 269 negates PAC check-off clauses in
existing collective bargaining agreements without serving any legitimate public
purpose, it violates the Contract Clause of the U.S. Constitution.
JURISDICTION AND VENUE
1.
This Court has subject matter jurisdiction under 42 U.S.C. 1983 and 28
U.S.C. 1331 and 1343(a)(3) and (4), because this action seeks to redress
the deprivation, under color of state law, of rights secured by the U. S.
Constitution, and under 28 U.S.C. 2201 and 2202, because this action
seeks declaratory relief.
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2.
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Venue is proper in this District under 28 U.S.C. 1391(b)(1) and Local Rule
83.10.
PARTIES
3.
The Michigan State AFL-CIO is a labor federation comprised of constituent

labor organizations in Michigan. Local unions affiliated with the Michigan
State AFL-CIO represent hundreds of thousands of employees of corporate
employers located throughout Michigan. A primary objective of the Michigan
State AFL-CIO is to improve the quality of life for working families in
Michigan. In furtherance of this objective, the Michigan State AFL-CIO
encourages and assists affiliated labor unions in their participation in
Michigan elections, including the making of contributions to support
candidates for elective office. Plaintiff Michigan State AFL-CIO sues in a
representative capacity on behalf of its affiliated unions.
4.
Plaintiff Local 223 of the Utility Workers Union of America, AFL-CIO,

(UWUA Local 223) is a labor union headquartered in Dearborn, Michigan.
UWUA Local 223 represents approximately 3,500 employees in Michigan
employed by DTE Electric Company, DTE Gas Company, and DTE
Corporate Services LLC (collectively referred to as DTE Energy).
5.
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Plaintiff George Horuczi resides in Riverview, Michigan. Plaintiff Horuczi

is an employee of DTE Electric Company. He is a member and an officer of
UWUA Local 223.
6.
Plaintiff International Brotherhood of Electrical Workers, AFL-CIO, Local

58 (IBEW Local 58) is a labor union headquartered in Detroit, Michigan.
IBEW Local 58 has collective bargaining agreements with numerous
employers throughout southeastern Michigan and represents approximately
4,500 members working as electricians in the construction industry, and in the
sound and communications, broadcast, maintenance, and manufacturing
industries.
7.
Plaintiff Michigan State Utility Workers Council (MSUWC) is a labor

organization headquartered in Charlotte, Michigan, that conducts business in
the Eastern District of Michigan. Plaintiff MSUWC is comprised of and
represents 24 local unions affiliated with the Utility Workers Union of
America, AFL-CIO, which themselves represent approximately 3,800
employees working in Michigans utility industry as linemen, gas line
construction and maintenance workers, and power plant operators and
maintenance workers.
8.
Plaintiff William D. Chadwick, Jr., resides in West Olive, Michigan.

Plaintiff Chadwick is an employee of Consumers Energy. He is a member of
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Utility Workers Union of America, Local 388, which is affiliated with

Plaintiff MSUWC.
9.
Defendant Ruth Johnson is the Secretary of State of the State of Michigan and
is sued in her official capacity. Defendant Johnson is the chief election officer
of the state and has responsibility for enforcement of the MCFA under Section
15, M.C.L. 169.215.
10.
Defendant William Schuette is the Attorney General of the State of Michigan

and is sued in his official capacity. Defendant Schuette also has responsibility
for enforcement of the MCFA under Section 15, M.C.L. 169.215.
BACKGROUND FACTS
Payroll Deduction for Voluntary Political Contributions
11.
Under the MCFA, unions may not contribute to candidates for Michigan
elective office or to political parties directly with their general treasury funds.
M.C.L. 169.254(1). A union must establish a Michigan political committee
and separate account, called a separate segregated fund (SSF), for the
purpose of making contributions or expenditures to support or oppose
candidates
for
elective
office
in
Michigan.
M.C.L.
169.255(1).
Contributions for a union SSF may be solicited only from the unions
members, as well as from officers and managerial employees of the union.
M.C.L. 169.255(4).
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12.
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Until the events giving rise to this action, the MCFA permitted employers to
enter into an agreement with a union for the payroll deduction of voluntary
contributions from employees to the unions SSF (often referred to as a PAC
check-off), subject to certain conditions and restrictions. M.C.L. 169.255(6).
For example, employee contributions must be voluntary and may not be
coerced, and payroll deduction could be used only if the employee
affirmatively consented to the payroll deduction in writing on an annual basis.
13.
A union may pay from its general treasury funds for the establishment,
administration or solicitation of contributions to its SSF. M.C.L.
169.206(2)(c). A corporate employer may not pay the expense of soliciting
contributions to a unions SSF. M.C.L. 169.206(1)(d). Under interpretive
rulings issued by the Secretary of State, unions may reimburse employers for
the use of their payroll systems for union PAC check-off, in order to avoid a
prohibited in-kind contribution by an employer to the unions SSF.
14.
Unions and their members rely heavily on employer payroll deduction for the
collection of members voluntary contributions to the unions SSFs. Payroll
deduction is by far the most efficient and effective method for collecting
member contributions to a union SSF. Other methods of obtaining member
contributions, such as individual solicitation, or electronic payment methods
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such as EFT and credit cards, are more burdensome and far less effective than
regular deduction from pay.
The Enactment of 2016 PA 269
15.
On October 20, 2015, Senate Bill 571 was introduced in the Michigan Senate.
Senate Bill 571 contained the following changes to the MCFA: removing the
requirement that written consent to automatic or payroll deduction
contributions to an SSF be renewed annually, and permitting a connected
organization (the entity that establishes the SSF) to commingle SSF
contributions with other general assets and later transmit the contributions
separately to the SSF, provided certain requirements were met.
16.
The bill was referred to the Senates Elections and Government Reform
Committee, which reported the bill out, without any hearings, nine days later.
17.
On November 4, 2015, the Senate unanimously passed Senate Bill 571

without amendment and gave it immediate effect. The bill was referred to
the House.
18.
The House referred S.B. 571 to the Committee on Elections. No hearings

were held and the bill was reported to the House without amendment.
19.
On December 16, 2015, the last day of legislative voting in 2015, in a session
lasting nearly 12 hours, the House radically revised Senate Bill 571 as passed
unanimously by the Senate.
A floor substitute S.B. 571 (H-3) was

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introduced. The House substitute bill expanded the size of the original Senate
bill from 11 to 52 pages. Among the many additional amendments in the
House substitute bill that day were the following (new language bolded and
capitalized):
a.
The substitute bill inserted a new Sec. 54(3), MCL 169.254(3), as
follows:
EXCEPT
FOR
EXPENDITURES
MADE
BY
A
CORPORATION IN THE ORDINARY COURSE OF ITS
BUSINESS,
AN
EXPENDITURE
MADE
BY
A
CORPORATION TO PROVIDE FOR THE COLLECTION
AND TRANSFER OF CONTRIBUTIONS TO ANOTHER
SEPARATE SEGREGATED FUND NOT ESTABLISHED BY
THAT CORPORATION, OR TO A SEPARATE
SEGREGATED FUND NOT CONNECTED TO A
NONPROFIT
CORPORATION
OF
WHICH
THE
CORPORATION IS A MEMBER, CONSTITUTES AN
IN-KIND CONTRIBUTION BY THE CORPORATION AND
IS PROHIBITED UNDER THIS SECTION. ADVANCED
PAYMENT OR REIMBURSEMENT TO A CORPORATION
BY
A
SEPARATE
SEGREGATED
FUND
NOT
ESTABLISHED BY THAT CORPORATION, OR BY A
SEPARATE SEGREGATED FUND NOT CONNECTED TO
A NONPROFIT CORPORATION OF WHICH THE
CORPORATION IS A MEMBER, DOES NOT CURE A USE
OF
CORPORATE
RESOURCES
OTHERWISE
PROHIBITED BY THIS SECTION.
b.
The substitute bill added the following sub-section (3)(d) to Section 4,
M.C.L. 169.204(3)(d), defining contribution:

(3)
Contribution does not include any of the following: . . .

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(D) A CONTRIBUTION OR EXPENDITURE FOR THE

ESTABLISHMENT OR ADMINISTRATION OF, OR
SOLICITATION, COLLECTION, OR TRANSFER OF
CONTRIBUTIONS TO, A SEPARATE SEGREGATED
FUND IF THAT CONTRIBUTION OR EXPENDITURE WAS
MADE BY THE PERSON THAT ESTABLISHED THE
SEPARATE SEGREGATED FUND AS AUTHORIZED
UNDER SECTION 55, OR WAS MADE BY A PERSON
THAT IS A MEMBER OF A NONPROFIT CORPORATION
THAT ESTABLISHED THE SEPARATE SEGREGATED
FUND AS AUTHORIZED UNDER SECTION 55.
c.
The substitute bill also made the following changes to sub-section
6(2)(c), M.C.L. 169.206(2)(c), describing an exception to the definition of

expenditure, as follows:
(2) Expenditure does not include any of the following: . . . . (c) An
expenditure for the establishment, OR administration OF, or
solicitation, COLLECTION, OR TRANSFER of contributions to,
a separate segregated fund if that expenditure was made by the
person who THAT established the separate segregated fund as
authorized under section 55, OR MADE BY A PERSON WHO IS
A MEMBER OF A NONPROFIT CORPORATION THAT
ESTABLISHED THE SEPARATE SEGREGATED FUND AS
AUTHORIZED UNDER SECTION 55.
20.
The House adopted the substitute Senate bill along party lines, and gave it
immediate effect.
21.
The bill returned to the Senate late that evening. Invoking a rarely used
parliamentary procedure, the Senate Majority Leader removed all staff from
the Chamber and forbade Senators from leaving the floor. The Senate voted
along party lines to concur in the House substitute bill.
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22.
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A number of Senators rose to speak in protest. Senator Steve Bieda stated:

This bill actually started off as a pretty good bill, and it turned into something
totally different. (Senate Journal December 16, 2015, No. 111, p. 2084)
Senator Coleman A. Young III protested: This is a hell of a way to start out
the Christmas holiday. First you wipe all our staff off the floor, then you cut
off debate, and now we are voting on this corporate takeover. I thought we
were a government of the people, for the people, and by the people. Now, after
this bill, we are going to be a government of the corporation, for the
corporation, and by the corporation. This is ridiculous. . . . No one read this
bill, and no one knows what is in it. It might as well be Peggy Bundys
mystery meat, because nobody knows what this bill does or what it is. I just
think it is ridiculous. (Id.)
23.
SB 571 was presented to Governor Rick Snyder on December 28, 2015. The
Governor signed the Bill on January 6, 2016. Senate Bill 571 was enrolled as
2015 Public Act 269.
24.
The process used to radically transform Senate Bill 571 and rush it to passage
through both houses in a single day was extraordinary and virtually
unprecedented in the absence of an imminent emergency.
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25.
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There is no legislative history, legislative report or commentary that explains

why PAC check-off, which had been available to corporations and unions
alike for many years, was prohibited for unions.
26.
Public Act 269 was adopted for the purpose and with the intended effect of
suppressing political speech and participation in electoral politics by
Michigan unions and their members.
The Foreseeable and Intended --Effect of Public Act 269
27.
The amendments made by Public Act 269 at issue in this case have had and
will have the following foreseeable effects:
a.
PAC check-off is available to corporations (and their trade
associations). A corporation may use payroll deduction for contributions to

its own SSF and for contributions to the SSF of a non-profit corporation (such
as a trade association) of which the corporation is a member.
b.
PAC check-off no longer is available to unions and their members.
Corporations now are prohibited from performing their agreements to provide

PAC check-off for employees contributions to their unions SSF.
corporation providing union PAC check-off is considered to be making a

prohibited in-kind contribution to the unions SSF. Violation is a felony
punishable, if the person is an individual, by a fine of up to $5,000.00 or
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imprisonment for up to 3 years or both, or if the person is not an individual, by

a fine of up to $10,000.00. M.C.L. 169.254(5).
c.
The ability to avoid a prohibited corporate contribution by the
unions SSF reimbursing the employers cost is eliminated. Under PA 269,

full reimbursement given by a unions SSF to a corporate employer for the
employers expenses incurred in providing payroll deduction, either in
advance or after the fact, does not avoid or cure a violation.
The Imminent and Irreparable Harm to Plaintiff Unions and their
Members Political Expression and Association, and Contract Rights
Plaintiff UWUA Local 223
28.
Among the organizational purposes of UWUA Local 223, as reflected in its

Constitution and Bylaws and in its Mission Statement, is to provide its
members with a voice in the workplace and in the larger community by, inter
alia, active participation in the political and legislative process. In support of
this organizational purpose, Local 223 has established and maintains a
separate segregated fund called the Local 223 UWUA PAC Fund, which
makes contributions to Michigan candidate committees.
29.
UWUA Local 223 and DTE Energy have for a number of years been parties to
a series of collective bargaining agreements (CBAs) covering the various
bargaining units at DTE Energy. The most recent CBA is effective March
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23, 2013 to October 9, 2017 with respect to employees in the Gas Division
bargaining unit, and effective March 23, 2013 to June 5, 2017 with respect to
employees in other DTE Energy bargaining units.
30.
In the current and several previous CBAs, UWUA Local 223 and DTE
Energy negotiated a provision pursuant to which DTE Energy agreed to
deduct contributions to the Local 223 UWUA PAC Fund from the wages of
each employee who individually and voluntarily authorized such a deduction
in writing. As a result, DTE Energy has for a number of years deducted and
forwarded to the Local 223 UWUA PAC Fund the voluntary contributions of
those employees who voluntarily signed written authorizations to have these
contributions deducted from their paychecks.
31.
Pursuant to his written authorization, Plaintiff George Horuczis employer,

DTE Electric Company, has been deducting his contributions to the Local 223
UWUA PAC Fund from his pay for a number of years. Plaintiff Horuczis
employer also has been deducting Plaintiff Horuczis contributions to its own
corporate SSF. In January, 2016, without informing Plaintiff Horuczi, DTE
Electric Company stopped deducting contributions on his behalf to the Local
223 UWUA PAC Fund; DTE Electric Company continued deducting
contributions to its own SSF from Plaintiff Horuczis pay. Plaintiff Horuczi
did not discover that his employer had discontinued his union PAC check-off
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until several weeks later. Plaintiff Horuczi believes that if payroll deduction is
no longer available, it will be more difficult for him and other members to
provide financial support for his unions political activity on a regular basis.
32.
On about March 15, 2016, DTE Energy advised UWUA Local 223 that
because of PA 269, it had ceased all payroll deductions to the Local 223
UWUA PAC Fund.
33.
UWUA Local 223 and its members are justly concerned that other employers
may follow suit. There is no readily available replacement for payroll
deduction that would allow members to continue their voluntary contributions
to the Local 223 UWUA PAC Fund without significant difficulty and
expense; no alternative method would come close to matching the
effectiveness of payroll deduction in facilitating and maximizing member
participation in UWUA Local 223s SSF. The foreseeable result is that
UWUA Local 223 will have no way of avoiding a substantial reduction in
funding to the Local 223 UWUA PAC, which will severely inhibit UWUA
Local 223s ability to participate and advocate on behalf of its members in the
2016 election in Michigan.
IBEW Local 58
34.
In furtherance of its organizational interest in representing and advocating for

the interests and welfare of its members, Plaintiff IBEW Local 58 has
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established a Michigan separate segregated fund, called Local Union No. 58

International Brotherhood of Electrical Workers Committee, which makes
contributions to Michigan candidate committees. Members of IBEW Local
58 contribute to the Locals SSF through payroll deduction plans provided for
in the collective bargaining agreements between their employers and IBEW
Local 58. Approximately 70 per cent of the Locals members who contribute
to the Locals SSF do so through negotiated payroll deduction programs.
35.
IBEW Local 58 and its members are justly concerned that PA 269s
prohibition of PAC check-off will impair and inhibit the ability of IBEW
Local 58 members to make voluntary contributions on an automatic and
regular basis to the Locals SSF. In particular, a number of collective
bargaining agreements covering a large number of members are set to expire
in the next several weeks. IBEW Local 58 is concerned that because of PA
269, employers will refuse to renew the payroll deduction agreements.
36.
The foreseeable effect of PA 269 will be to substantially diminish the amount

of member contributions to IBEW Local 58s SSF. Payroll deduction is the
familiar and accepted method for the Locals members to make voluntary
contributions to the Locals SSF. There would be significant practical and
financial obstacles to replacing payroll deduction, and no alternative method
could come close to payroll deduction in effectiveness and efficiency. The
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effect would be to significantly reduce the amount of voluntary member

funding that IBEW Local 58 can use to participate on behalf of its members in
the election.
MSUWC
37.
Members represented by unions affiliated with MSUWC are employed under

collective bargaining agreements with several large utilities, including
Consumers Energy, Midland Cogeneration Venture (MCV), and the Entergy
Palisades Nuclear Power Plant. These employers have agreed to payroll
deduct voluntary employee contributions to Plaintiff MSUWCs SSF, the
Michigan State Utility Workers AFL-CIO PAC, which makes contributions
to Michigan candidate committees.
38.
Without payroll deduction, Plaintiff MSUWC would be forced to use far less
effective and more expensive methods of collecting members SSF
contributions. MSUWC and its members are justly concerned that the
predictable result of PA 269 will be a significant diminution of PAC funds
available to MSUWC for political advocacy and participation in campaigns
for elective office in Michigan.
39.
Pursuant to his written authorization, Plaintiff William D. Chadwick Jr.s

employer, Consumers Energy, has been deducting his contributions to
Michigan State Utility Workers AFL-CIO PAC from each payroll for a
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number of years. Plaintiff Chadwick believes that if payroll deduction is no

longer available, it will be more difficult for him and other members to
provide financial support for his unions political activity on a regular basis.
The 2016 Election
40.
The 2016 election campaign is well under way. Participation by Plaintiff

Unions in the Michigan election through their SSFs is crucially important in
furthering the Unions objectives of protecting and advocating for the interest
of their members.
41.
Without the courts intervention, as a direct and proximate result of the

enforcement of PA 269, the members of Plaintiffs UWUA Local 223, IBEW
Local 58, and MSUWC, and, upon information and belief, many other unions,
will be deprived of the ability to give financial support to their unions
political speech through payroll deduction of their voluntary SSF
contributions, impairing their ability to participate in the political process and
exercise their First Amendment rights of political speech and association.
Public Act 269 will significantly diminish Plaintiff unions ability to
participate in the political process, and their exercise of their First
Amendment rights of political speech and association will be irreparably
harmed and impaired. Furthermore, Plaintiff unions constitutional, and
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federally protected, right to freely enter into contracts will be unjustifiably

impaired.
42.
There is no legal remedy for the deprivation of political speech and

association and contract rights that Plaintiff Unions and their members will
suffer as a result of PA 269.
COUNT I
SELECTIVE DEPRIVATION OF FIRST AMENDMENT RIGHTS IN
VIOLATION OF THE FOURTEENTH AMENDMENT TO THE U.S.
CONSTITUTION: VIEWPOINT DISCRIMINATION
43.
The First Amendment has its fullest and most urgent application to speech
uttered during a campaign for political office." Citizens United v. FEC, 558
U.S. 310, 339 (2010)(quoting, Eu v. San Francisco County Democratic
Central Comm., 489 U.S. 214, 223 (1989), internal quotation marks and
citations omitted).
44.
Payroll deduction is the most effective and efficient method for employees to
contribute to their unions Michigan SSFs, which is why the proponents of PA
269 selectively banned its use for that purpose.
45.
Public Act 269 selectively prohibits the use of PAC check-off for union SSFs
while permitting its use for the SSFs of corporations.
46.
By prohibiting PAC check-off for unions and their members, PA 269 will
interfere with and impair the right of Plaintiff unions and their members to
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engage in political speech and association protected by the First Amendment

to the U.S. Constitution.
47.
The First Amendment prohibits the government from discriminating among

speakers, because speaker-selective government regulation of speech raises
the specter of viewpoint discrimination, that is, the favoring or disfavoring of
speech based on its content associated with the identity of the speaker.
48.
Michigan can assert no compelling justification for selectively permitting

corporations to use payroll deduction for political fundraising and denying
that method to unions and their members. A selective speaker-based
regulation of speech without a sufficiently compelling justification is
presumptively invalid.
There is no rational explanation much less a
compelling justification for the governments selective discrimination

against unions and their members. The discriminatory suppression of
constitutionally protected speech and association effected by PA 269 serves
no legitimate government interest and constitutes invidious content-based
discrimination by the government.
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COUNT II
DEPRIVATION OF FIRST AMENDMENT RIGHTS IN VIOLATION OF
THE FOURTEENTH AMENDMENT TO THE U.S. CONSTITUTION:
UNJUSTIFIED GOVERNMENT SUPPRESSION OF POLITICAL
SPEEECH AND ASSOCIATION
49.
The First Amendment protects the raising of funds to pay for speech and
advocacy.
50.
The government may not enact laws that burden, inhibit or suppress political
speech and raising funds to finance political speech without sufficient
justification. [P]olitical speech must prevail against laws that would suppress
it, whether by design or inadvertence. Laws that burden political speech are
subject to strict scrutiny, which requires the Government to prove that the
restriction furthers a compelling interest and is narrowly tailored to achieve
that interest. Citizens United v. FEC, 558 U.S. 310, 340 (2010)(internal
quotation marks and citations omitted).
51.
Public Act 269 does not survive strict scrutiny. There is no compelling
justification for prohibiting the long practice of payroll deduction of
employees contributions to their unions SSF.
52.
Any asserted governmental concern regarding an in-kind contribution of a

corporate employers expenses of providing PAC check-off to a unions SSF
is fully addressed by requiring reimbursement to the employer for those
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expenses. This approach has been endorsed by the Secretary of State in

interpretive rulings and it is specifically provided for in FEC regulations
applicable
to
federal
SSFs.
The
legislature
inexplicably
forbade
reimbursement by the unions SSF of an employers expense in amended

Section 54(3).
53.
Public Act 269 violates the First Amendment rights of unions and their
members to engage in political speech and association.
COUNT III
VIOLATION OF THE EQUAL PROTECTION CLAUSE OF THE
FOURTEENTH AMENDMENT
54.
As stated above, PA 269 selectively permits payroll deduction arrangements

only for corporations and not for other speakers, such as unions.
55.
There is no rational basis for PA 269s selective and discriminatory

application to certain speakers and not to others, particularly where the
fundamental right to advocate and participate in election campaigns is
affected.
56.
Such selective and discriminatory treatment by the government violates the

Equal Protection Clause of the Fourteenth Amendment.
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COUNT IV
VIOLATION OF THE CONTRACT CLAUSE
OF THE U.S. CONSTITUTION
57.
The Contract Clause of the United States Constitution, Article 1, 10, clause
1, provides in pertinent part that: No State shall . . . Pass any . . . Law
impairing the Obligation of Contracts.
58.
Collective bargaining agreements entered into by Plaintiffs UWUA Local

223, IBEW Local 58, and MSUWC provide for PAC check-off by their
members so that they can voluntarily contribute a portion of their wages to the
Unions SSF through payroll deduction.
59.
As described above, Public Act 269 substantially impairs the Plaintiff

Unions collective bargaining agreements by making it a criminal offense for
corporate employers who comprise the overwhelming majority of signatory
employers - to comply with the PAC check-off provision in those agreements.
Pubic Act 269 was given immediate effect, and unlike other legislation, PA
269 does not make an exception for collective bargaining agreements
currently in effect.
60.
Michigan does not have a significant or legitimate public purpose for

prohibiting performance of the PAC check-off agreements.
25
Pg ID 26
RELIEF REQUESTED
Plaintiffs request that the Court:
A.
Declare that enforcement of PA 269 violates the First Amendment to the U.S.
Constitution by suppressing and impairing political speech and association of
unions and their members without sufficient justification;
B.
Declare that enforcement of PA 269 violates the First Amendment to the U.S.
Constitution by selectively and discriminatorily suppressing political speech
and associational activity by unions and their members while not so limiting
such activity by corporations, based on the governments disagreement and
disfavoring of unions perceived viewpoints and political ideology;
C.
Declare that enforcement of PA 269 violates the Equal Protection Clause of

the Fourteenth Amendment by selectively and discriminatorily suppressing
political speech and associational activity by unions and their members while
not so limiting such activity by corporations, without any rational basis for
doing so;
D.
Declare that enforcement of PA 269 violates the Contract Clause of the U.S.
Constitution by substantially impairing agreements between unions and
employers for PAC check-off, without a significant and legitimate public
purpose;
26
E.
Pg ID 27
Issue a temporary restraining order, and preliminary and permanent

injunctions, enjoining Defendants, their agents, and those acting in concert or
cooperation with them, from taking any action to implement or enforce the
prohibition of payroll deduction under PA 269 as described in this Complaint;
F.
Order Defendants to reimburse Plaintiffs for their reasonable attorneys fees

and costs in bringing this action, pursuant to 42 U.S.C. 1988; and
G.
Grant such other relief as the Court deems just.

Respectfully submitted,
s/Andrew Nickelhoff
Andrew Nickelhoff (P37990)
Marshall J. Widick (P53942)
Sachs Waldman, P.C.
Attorneys for Plaintiffs Michigan State AFL-CIO,
Michigan State Utility Workers Council, and
William D. Chadwick, Jr.
2211 E. Jefferson Ave, Ste. 200
Detroit, MI 48207-4160
(313) 496-9429
anickelhoff@sachswaldman.com
/s/ John R. Canzano
John R. Canzano (P30417)
McKnight Canzano Smith Radtke & Brault P.C.
Attorneys for UWUA Local 223 and
George Horuczi
423 N. Main St., Ste. 200
Royal Oak, MI 48067-1884
(248) 354-9650
jcanzano@michworkerlaw.com
27
/s/ Robert D. Fetter

Robert D. Fetter (P68816)
Miller Cohen PLC
Attorneys for IBEW Local 58
600 W. Lafayette Blvd., Fl. 4
Detroit, MI 48226-2711
(313) 964-4454
rfetter@millercohen.com
Dated: April 22, 2016
28
Pg ID 28

Complaint - MI v. Johnson

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Complaint - MI v. Johnson

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4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 1 of 28

UNITED STATES DISTRICT COURT

MICHIGAN STATE AFL-CIO; UTILITY WORKERS

COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 2 of 28

NATURE OF THIS ACTION

They may do so only by

establishing a separate political committee called a separate segregated fund (SSF

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 3 of 28

For union members, payroll deduction (often called PAC check-off) is by

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 4 of 28

This is not surprising, because there is no credible

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 5 of 28

Discriminatory government speech regulation that selectively favors some preferred

In addition, apart from its selective application to certain

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 6 of 28

The Michigan State AFL-CIO is a labor federation comprised of constituent

Plaintiff Local 223 of the Utility Workers Union of America, AFL-CIO,

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 7 of 28

Plaintiff George Horuczi resides in Riverview, Michigan. Plaintiff Horuczi

Plaintiff International Brotherhood of Electrical Workers, AFL-CIO, Local

Plaintiff Michigan State Utility Workers Council (MSUWC) is a labor

Plaintiff William D. Chadwick, Jr., resides in West Olive, Michigan.

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 8 of 28

Utility Workers Union of America, Local 388, which is affiliated with

Defendant William Schuette is the Attorney General of the State of Michigan

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 9 of 28

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 10 of 28

On November 4, 2015, the Senate unanimously passed Senate Bill 571

The House referred S.B. 571 to the Committee on Elections. No hearings

A floor substitute S.B. 571 (H-3) was

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 11 of 28

The substitute bill inserted a new Sec. 54(3), MCL 169.254(3), as

The substitute bill added the following sub-section (3)(d) to Section 4,

M.C.L. 169.204(3)(d), defining contribution:

Contribution does not include any of the following: . . .

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 12 of 28

(D) A CONTRIBUTION OR EXPENDITURE FOR THE

The substitute bill also made the following changes to sub-section

6(2)(c), M.C.L. 169.206(2)(c), describing an exception to the definition of

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 13 of 28

A number of Senators rose to speak in protest. Senator Steve Bieda stated:

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 14 of 28

There is no legislative history, legislative report or commentary that explains

PAC check-off is available to corporations (and their trade

associations). A corporation may use payroll deduction for contributions to

PAC check-off no longer is available to unions and their members.

Corporations now are prohibited from performing their agreements to provide

corporation providing union PAC check-off is considered to be making a

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 15 of 28

imprisonment for up to 3 years or both, or if the person is not an individual, by

The ability to avoid a prohibited corporate contribution by the

unions SSF reimbursing the employers cost is eliminated. Under PA 269,

Among the organizational purposes of UWUA Local 223, as reflected in its

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 16 of 28

Pursuant to his written authorization, Plaintiff George Horuczis employer,

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 17 of 28

In furtherance of its organizational interest in representing and advocating for

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 18 of 28

established a Michigan separate segregated fund, called Local Union No. 58

The foreseeable effect of PA 269 will be to substantially diminish the amount

4:16-cv-11454-LVP-SDD Doc # 1 Filed 04/22/16 Pg 19 of 28

effect would be to significantly reduce the amount of voluntary member

Members represented by unions affiliated with MSUWC are employed under