Keller Compliance Option for the Year 2008: Notice to WSBA Members

In a U.S. Supreme Court case, Keller v. State Bar of California, the Court ruled that a bar association may not use mandatory member fees to support political or ideological activities that are not reasonably related to the regulation of the legal profession or improving the quality of legal services. The bar is required to identify that portion of mandatory license fees that go to such "nonchargeable" activities and establish a system whereby objecting members may either deduct that portion of their fees or receive a refund. This year (2008), objecting members may deduct up to $3.15 if paying $407; $2.56 if paying $331; $1.57 if paying $203; $0.93 if paying $120; $0.89 if paying $115; and $0.49 if paying $63.

Under Keller v. State Bar of California, the WSBA cannot use the compulsory membership fees of objecting WSBA members for political or ideological activities that are not reasonably related to the regulation of the legal profession or improving the quality of legal services. These activities are considered "nonchargeable." The WSBA may use compulsory membership fees for all other activities.

WSBA members may deduct a specified amount from their membership fee payment that represents each member's pro rata portion of fees devoted to nonchargeable activities. The method used to calculate the fee reduction is based on the method approved by the U.S. Supreme Court in Chicago Teachers Union v. Hudson. In that case, the Court indicated that it was appropriate to use the year for which the most recent audit report is available as the base line period for determining chargeable and nonchargeable activities and for calculating the cost of the nonchargeable activities.

Based on the decision of the Impartial Decision maker in Popejoy v. New Mexico Board of Bar Commissioners, the Board of Governors of the WSBA has concluded that the only activities in the WSBA budget that are "political or ideological" are a portion of those activities funded as legislative activities. To calculate the 2008 fee reduction, the WSBA used its fiscal year 2008 budget.

Any member who wishes to call for arbitration of the amount of the fee reduction permitted for 2008 should deliver a request in writing to the Executive Director of the WSBA by February 1, 2008. For details of the arbitration-process, see Arbitration Process below.

The Executive Director reviewed all of the fiscal year 2007 activities in accordance with the opinion of the Impartial Decision maker in Popejoy v. New Mexico Board of Bar Commissioners, a case where all of the activities of the State Bar of New Mexico were challenged, and concluded that only the WSBA's legislative activities would include political or ideological activities not reasonably related to the regulation of the legal profession or improving the quality of legal services.

The fiscal 2008 budget for the WSBA's legislative activities is divided by the total number of active members of the WSBA at the time this notice was prepared to arrive at the amount of each member's fee attributable to legislative activities. That amount is then apportioned by the percentage of time spent by WSBA staff on specific legislative activities in the most recent legislative session, plus a proportionate share of the legislative general administrative activity. Based on records from the 2007 legislative session, we estimate that 14.5% of staff legislative time was spent on nonchargeable activities.

The WSBA has used an extremely "conservative" test for determining whether individual issues would be subject to rebate, i.e., the WSBA has erred on the side of considering issues nonchargeable even when a reasonable argument could be made that such issues were reasonably related to regulating the legal profession or improving the quality of legal services.

a. A member of the WSBA who contends that the WSBA has incorrectly set the amount of fee that can be deducted may demand arbitration by delivering a written demand for arbitration on or before February 1, 2008. Delivery may be made in person or by first-class mail, and mailed demands will be deemed delivered upon mailing. Demands shall include the name and address of the member or members demanding arbitration, a brief statement of the claim or objection, and the signature of each objecting member.

b. If one or more timely demands for arbitration are delivered, the WSBA shall submit the matter forthwith to arbitration. All timely demands for arbitration shall be consolidated for hearing and the provisions of RCW 7.04 shall apply as if the parties had entered into a written agreement for arbitration. Upon receipt of all timely demands for arbitration, the WSBA shall apply to the Chief Justice of the Washington Supreme Court for appointment of an impartial arbitrator.

c. A member demanding arbitration is required to pay his or her WSBA fee, excepting the amount in dispute, on a timely basis as otherwise required by the WSBA Bylaws. Failure to pay the fee by the requisite date may result in suspension as provided by the WSBA Bylaws.

d. A hearing shall be held within 30 days of the appointment of the arbitrator. The arbitrator shall determine the date, time, and location of the arbitration hearing(s) and shall so notify the parties at least 15 days prior to said hearing(s). The arbitrator will hold hearings in which the parties will be permitted to participate personally or through a representative. The WSBA shall bear the burden of coming forward regarding the accuracy of the determination of the amount of fee that can be withheld. Members demanding arbitration shall have access to the financial records upon which the WSBA based the determination of the amount of fee that can be withheld. These records shall be available for inspection and copying during normal business hours. Copying shall be at the member's expense.

e. All parties will be given the opportunity to present evidence and to present arguments in support of their positions. The following rules shall apply to the arbitration proceedings:

i. There will be no transcripts or post-hearing briefs.

ii. The arbitrator will issue an award stating the reasons for the decision within five business days of the close of the hearing. The opinion will be brief and will be based on the evidence and arguments presented.

iii. The arbitrator will charge a maximum of $100 per hour for services, including the hearing, preparation, and study time, and shall be reimbursed for all necessary expenses of the arbitration. The WSBA will pay for the arbitrator's services.

iv. The arbitrator shall not be deemed a necessary party in judicial proceedings relating to the arbitration.

v. The arbitrator shall have no authority to add, subtract, set aside, or delete from any Supreme Court Rule and WSBA Bylaw.

f. Members admitted to the WSBA during the course of a year shall be advised of this notice with their initial fee statements. Such members may demand arbitration within 30 days following receipt of the notification. If arbitration is pending at the date of delivery of a demand for arbitration, the newly admitted member's demand shall be consolidated with the pending arbitration. All of the provisions of this section shall otherwise apply to demands for arbitration filed by newly admitted members.