May 1, 2019 – Two lawyers have filed a lawsuit against the State Bar of Wisconsin in the U.S. District Court for the Western District of Wisconsin, alleging that the mandatory status of the State Bar violates their constitutional rights.
Adam Jarchow of Clear Lake and Michael Dean of Brookfield filed the lawsuit last month, naming the State Bar and its volunteer officers as defendants. The civil rights complaint requests declaratory and injunctive relief and damages.
Richard Esenberg of the Wisconsin Institute for Law and Liberty represents the plaintiffs. The State Bar of Wisconsin, which was created as a mandatory professional association by the Wisconsin Supreme Court, will defend against the lawsuit.
The State Bar issued the following statement on the litigation: “The Board of Governors voted to defend the authority of the Wisconsin Supreme Court to regulate the profession of law in Wisconsin via an integrated Bar association, a form of association that the Court most recently affirmed in 2018. As an integrated association, the State Bar of Wisconsin serves the public and the Court by working to enhance the delivery of legal services, to ensure a well-qualified community of lawyers, to educate the public about the law, their rights and the court system, and to promote the development of the law.”
The plaintiffs argue that the State Bar of Wisconsin “regularly engages in advocacy and other speech on matters of intense public interest and concern, and it funds that advocacy through mandatory dues payments.”
Requiring them to pay State Bar dues, the plaintiffs argue, “compel Plaintiffs’ speech and compel them into an unwanted expressive association with the State Bar.”
Mandatory Dues under Keller
The Wisconsin Supreme Court, which has promulgated rules that govern the State Bar and the State Bar membership, requires lawyers to be members of the State Bar as a condition of practicing law in Wisconsin. Thus, most lawyers must pay annual dues.
Currently, dues are $260 per year for full, active members. Inactive and first-year lawyers pay $130 in State Bar dues. Emeritus members (over age 70) are not required to pay dues. The State Bar collects other assessments on behalf of the Supreme Court.
About 45 percent of the State Bar’s operations are funded by dues. Every year, members can elect to withhold a pro rata amount that funds activity deemed nonchargeable to mandatory dues, known as the “Keller dues rebate amount.”
The Keller rebate process follows the law established by Keller v. State Bar of California, 496 U.S. 1 (1990), in which the U.S. Supreme Court upheld mandatory dues so long as members are not compelled to fund political or ideological activities not germane to the regulation of the legal profession or improving the quality of legal services. Keller remains good law, as the U.S. Supreme Court has not overturned its central holding, which applies specifically to bar associations.
In Wisconsin, unlike other bar associations, the Keller test is applied to all activities, not just those considered political or ideological, under a subsequent 2010 decision from the U.S. Court of Appeals for the Seventh Circuit, Kingstad v. State Bar of Wisconsin.
In other words, any activity that is not germane to the regulation of the legal profession or improving the quality of legal services is included in the Keller rebate amount, regardless of whether those activities are considered political or ideological.
Keller Review Process
The State Bar Board of Governors sets the rebate amount annually, after a rigorous review of State Bar activities. Staff tracks activities that may fall outside the stated purposes of regulating the legal profession or improving the quality of legal services.
The State Bar’s Executive Committee reviews those activities to determine what may be permissibly charged to mandatory dues. Those activities that do not fall within permissible activities chargeable to dues are included in the Keller rebate amount.
State Bar President Christopher Rogers said the State Bar of Wisconsin has remained a national model on the process, in order to address the concerns of objecting members.
“The State Bar takes the Keller review process very seriously to ensure that all nonchargeable activities are included in the rebate amount that objecting members aren’t required to pay,” he said. “We both err on the side of caution when reviewing activities and round up amounts to ensure the inclusion of all nonchargeable activities.”
Keller Dues Rebate Policy
Last year, the State Bar’s Board of Governors adopted a policy to include all direct lobbying activity within the Keller rebate calculation, even lobbying activity deemed germane to regulating the legal profession and improving the quality of legal services.
The board’s unanimous decision to include all direct lobbying activity in the rebate amount recognized the concerns of members who object to the use of mandatory dues for any direct lobbying activity, regardless of what Keller permits.
The annual calculation of expenditures deemed nonchargeable to mandatory dues now includes expenditures that relate to activities that constitute direct lobbying on policy matters before the Wisconsin Legislature and U.S. Congress, “regardless of whether they would otherwise qualify as chargeable under a Wisconsin Keller dues analysis.”
In other words, members who object to funding State Bar lobbying and other activities deemed nonchargeable under the Keller review process are not required to do so. The Keller rebate process allows them to withhold those amounts from annual dues.
In 2018, the Wisconsin Supreme Court noted this new State Bar policy and other State Bar measures to ensure transparency in rejecting a petition that sought to change how the State Bar uses mandatory dues, through a bifurcated budgeting process.
In a final order, the supreme court upheld the current structure, under the Keller review process that allows objecting members to withhold nonchargeable dues. “On balance, the court was not persuaded that granting this rule petition would serve the best interests of Wisconsin's citizens, the lawyers of this state, or the court,” the order states.
In the current lawsuit, the plaintiffs ask the U.S. District Court for the Western District to declare that the Supreme Court Rules and decisions on State Bar membership and payment of mandatory dues violate their First Amendment rights.