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The 7th U.S. Circuit Court of Appeals ruled that the State Bar of Wisconsin didn’t violate members’ First Amendment rights by using mandatory dues for a public image campaign, but it also held that compulsory dues spending must be germane to the State Bar’s purposes. On Sept. 9, a unanimous panel in Kingstad v. State Bar of Wisconsin determined that “State Bar expenditures funded by mandatory dues must be germane to the legitimate purposes of the State Bar.” But Judge David Hamilton wrote that the State Bar could use objecting members’ mandatory dues to fund activities “that are reasonably related to the State Bar’s dual purposes of regulating the profession and improving the quality of legal services, whether or not those same expenditures are also non-ideological and non-political.” The panel found that “the State Bar’s public image campaign was germane to the Bar’s constitutionally legitimate purpose of improving the quality of legal services available to the Wisconsin public.” The decision overturned one of the alternative holdings of the 7th Circuit’s 1996 ruling in Thiel v. State Bar of Wisconsin. Thiel held that “the First Amendment does not prohibit the Bar from funding non-ideological, non-germane activities with compelled dues.” It then concluded that the challenged activities were all in fact germane to the State Bar’s legitimate purposes. The court’s ruling in Kingstad departs from the first holding by stating that activities paid with compelled dues do need to be germane to the group’s purposes: “The First Amendment prohibits the Wisconsin State Bar from funding non-germane activities with compelled dues.” The 7th Circuit’s ruling referenced Keller v. State Bar of California, a 1990 ruling by the U.S. Supreme Court, which held that compulsory bar dues could be used only for activities relating to regulating the legal profession or improving the quality of legal services. The 7th Circuit also noted a 2000 ruling by the 1st Circuit in Romero v. Colegio de Abogados de Puerto Rico, which held that mandatory payments to the Puerto Rican Bar group’s life insurance plan was unconstitutional because it was not germane to the group’s purposes. An arbitrator first heard the Kingstad case and decided that the public image campaign was within the language and intent of the relevant Wisconsin Supreme Court Rules. The plaintiffs sought state court review, and the State Bar had the case removed to federal court. In 2009, Magistrate Judge Stephen Crocker of the Western District of Wisconsin affirmed the arbitrator’s ruling and held that the U.S. Supreme Court’s 2001 ruling in U.S. v. United Foods Inc. did not overrule the 7th Circuit’s Thiel ruling. United Foods held that a federal law compelling members of an agricultural collective to spend compulsory assessments on generic advertising violated dissenters’ First Amendment rights because it forced them to pay for speech with which they disagreed. Because Kingstad departed from the 7th Circuit’s earlier decision in Thiel, the panel circulated its opinion to the other active judges. Judge Diane Sykes was the only judge who voted for en banc rehearing in the case. Sykes dissented from the denial of rehearing en banc on the issue of whether the public image campaign was relevant to the Bar’s function of improving legal services in the state. “To be ‘germane’ to ‘improving the quality of legal services,’ an expenditure of compulsory bar dues should as a factual matter have at least some connection to the law, legal advising, legal education, legal ethics, or the practice of law,” Sykes wrote. “The public-image campaign was aimed at none of these things; it was all about marketing.” Roberta Howell, a partner in Madison, Wis, office of Foley & Lardner who represented the State Bar, did not returned a call for comment. In an e-mailed statement, the Bar’s president, James Boll, said that the decision affirms the ability of integrated bar association, “to apply mandatory member dues to programs that are intended to advance its core mission.” The statement continued: “The mission of the State Bar of Wisconsin includes improving the delivery of legal services, and we welcome the court’s finding that ‘the State Bar’s public image campaign was germane to the Bar’s constitutionally legitimate purpose of improving the quality of legal services available to the Wisconsin public.’ “ Steven Levine, one of the three appellants and the lawyer who represented the trio in the case, said that the ruling “provides a more restrictive environment on what state bars can spend their mandatory dues on.” Levine is also assistant general counsel for the Wisconsin Public Service Commission and a State Bar leader. He’s currently an elected member of the board of governors and a former Bar president. “I think there will be a lot more State Bar activities that don’t meet those criteria and that they can’t use mandatory dues to finance,” Levine said. Levine said he tried to change the Wisconsin Bar’s approach during the years he was president-elect, president and immediate past president. He and his co-appellants, who are also active in the Bar, eventually decided they needed a court ruling. “We thought [Thiel] was an incorrect decision at the time, but it took 14 years to get it reversed,” Levine said. Levine is also part of a group petitioning the Supreme Court of Wisconsin to change the rules in light of the new 7th Circuit ruling. Jon Kingstad, a solo practitioner in Oakdale, Wis., is secretary of the nonresident lawyers’ division of the Bar. Jim Thiel, counsel to the Wisconsin Department of Transportation, is a member of the board of governors. “It looks like we lost the battle but won the war,” Thiel said. “Basically, [they] can now only require mandatory dues to be paid for improving the quality of legal services.”

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