KAREN NELSON MOORE, Circuit Judge.
Plaintiffs-Appellants are home childcare providers in Michigan seeking to file a class-action lawsuit for the return of union dues and agency fees that were collected allegedly in violation of their First Amendment rights. The district court denied certification of plaintiffs' proposed class — all home childcare providers in Michigan — because there was a conflict of interest within the class that undermined the adequacy of the named plaintiffs' representation: some members voted for union representation and others voted against union representation. Plaintiffs attempted to cure this conflict by proposing a subclass of only those providers who did not participate in any election related to union representation. The district court determined that plaintiffs' proposed subclass did not cure within-class conflicts because the district court could not assume that all members of the subclass opposed union representation. The district court further reasoned that, even if all members of the proposed subclass did oppose union representation, their reasons for doing so were different enough to create a conflict within the class.
On appeal, plaintiffs argue that the district court abused its discretion in denying certification of both their proposed class
Plaintiffs Carrie Schlaud, Edward Gross, Nora Gross, Peggy Mashke, and Diana Orr are home childcare providers in Michigan. Plaintiffs receive subsidies from the State of Michigan's Child Development and Care Program ("CDC") for providing childcare services for low-income families. The CDC helps qualifying parents enter the workforce by providing a means to afford childcare services. Under the CDC, parents choose a childcare provider, and the Michigan Department of Human Services ("DHS") makes direct payments to that provider. In theory, providers can charge parents the difference between their rates and the money received from the CDC subsidy; in reality, most qualifying parents are unable to afford anything, so providers generally receive the subsidy alone as payment for their services.
In 2006, DHS and Mott Community College ("Mott") entered into an interlocal agreement ("ILA") to create the Michigan Home Based Child Care Council ("the Council"). DHS and Mott established the Council with the intent "to establish a mechanism for improving the quality of child care provided in home settings, raising standards and improving training for home based child care providers, and stabilizing the home based child care industry." R. 83-2 (Ex. 8 — ILA at 3) (Page ID #1593). The ILA grants the Council "the right to bargain collectively and enter into agreements with labor organizations." Id. at 16 (Page ID #1606).
In the fall of 2006, the Council began negotiations with Child Care Providers Together Michigan ("CCPTM" or "the Union"). CCPTM is a joint venture between International Union, United Automobile, Aerospace and Agricultural Implement Workers of America and Michigan Council 25 of the American Federation of State, County and Municipal Employees. Prior to the negotiations between the Council and CCPTM, a neutral third party certified CCPTM as the exclusive majority collective bargaining representative of home childcare providers in Michigan, based on the submission of 22,180 valid provider-signed authorization cards out of a possible 40,532 eligible providers. R. 83-2 (Ex. 7 — Certification of Results) (Page ID #1588-89). After the card check, "[t]he Union... petitioned the Michigan Employment Relations Commission ("MERC") for an election under the guidelines of M.C.L. § 423.212." R. 118 (08/30/2011 D. Ct. Op. at 4) (Page ID #2592). MERC certified CCPTM as the representative after the secret-ballot election, in which 5,921 out of 6,396 ballots cast were in favor of the Union. R. 83-3 (Ex. 13 — Certification of Representative) (Page ID #1672); R. 83-3 (Ex. 12 — Tabulation of Results) (Page ID #1670).
The Union and the Council entered into a Collective Bargaining Agreement ("CBA"), which became effective on January 1, 2008. R. 83-3 (Ex. 17 — CBA) (Page ID #1691-727). Prior to signing the CBA, the Union "conducted a mail ballot
In January 2009, DHS began deducting 1.15% from subsidy payments made to home childcare providers. R. 19 (Governor and DHS Director Answer at ¶ 30) (Page ID #336); R. 83-4 (Ex. 18 — Letter) (Page ID #1730). The deducted funds were sent to the Council, which then forwarded them to the Union. "The Union collected $2,000,019.09 in 2009 and [at least] $1,821,635.21 in 2010." R. 118 (08/30/2011 D. Ct. Op. at 5) (Page ID #2593) (citing R. 79 (Mot. for Summ. J.App. at 10) (Page ID #819)).
On February 17, 2010, plaintiffs filed a class-action suit against the Union, the Council, the Governor of Michigan, and the director of DHS. In their complaint, plaintiffs alleged that defendants deprived plaintiffs "of their rights to free association and speech under the First Amendment, as secured by the Fourteenth Amendment and 42 U.S.C. § 1983," by "compelling Plaintiffs and the members of the Plaintiff class to financially support the Union as their state-designated political representative." R.1 (Compl. at ¶ 41) (Page ID #12-13). On January 15, 2011, plaintiffs moved to certify the following plaintiff class under Federal Rule of Civil Procedure 23(b)(1)(A) or 23(b)(3):
R. 63 (Mot. for Certification) (Page ID #634-35). Plaintiffs also requested that the district court certify, in the alternative, any class that it deemed appropriate. Id.
The district court denied plaintiffs' motion for certification because a conflict of interest within plaintiffs' proposed class undermined the adequacy of the named plaintiffs' representation under Federal Rule of Civil Procedure 23(a)(4). R. 118 (8/30/2011 D. Ct. Op. at 8-12) (Page ID #2596-600). The conflict identified by the district court was:
Id. at 10 (Page ID #2598).
The district court also determined that no alternative class could be certified under Rule 23(a)(4) because even if all potential class members opposed financially supporting the Union, their motivations for that opposition were different enough to create conflict. Relying on Weaver v. University of Cincinnati, 970 F.2d 1523 (6th Cir.1992), and Gilpin v. AFSCME, 875 F.2d 1310 (7th Cir.), cert. denied, 493 U.S. 917, 110 S.Ct. 278, 107 L.Ed.2d 258 (1989), the district court explained that although some members of the subclass, like plaintiffs, would not support the Union regardless of the benefits it might bring, there were other members of the subclass who approved of the potential benefits of unionization but nonetheless would not financially support the Union in hopes of free-riding on the Union's success. R. 118 (08/30/2011 D. Ct. Op. at 10) (Page ID #2598); R. 123 (12/22/2011 D. Ct. Op. at 5) (Page ID #2630).
Plaintiffs attempted to cure the conflict identified by the district court by proposing a subclass of:
R. 120 (Mot. to Amend J. at 1) (Page ID #2608). The district court determined that plaintiffs' proposed subclass did not cure the conflict because "[s]hort of requiring depositions of each provider in the proposed subclass, it is impossible to determine the motivations behind each provider's action (or inaction) regarding the Union." R. 123 (12/22/2011 D. Ct. Op. at 5) (Page ID #2630). Relying again on Weaver and Gilpin, the district court concluded that it "cannot simply assume that non-voting providers are hostile to Union representation." Id. Plaintiffs timely appealed the denial of certification.
We review the district court's denial of class certification for abuse of discretion.
Plaintiffs have the burden of establishing their right to class certification. Beattie, 511 F.3d at 560. The Federal Rules of Civil Procedure impose four prerequisites to a class action:
Fed.R.Civ.P. 23(a). The district court must engage in a "rigorous analysis" to ensure that these factors are present before it can certify a class. Beattie, 511 F.3d at 560 (quotation marks omitted). This case revolves primarily around the fourth factor: adequacy of representation.
"The adequacy inquiry under Rule 23(a)(4) serves to uncover conflicts of interest between named parties and the class they seek to represent. A class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625-26, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (quotation marks and citations omitted). If "the district court [has] some indication that the named plaintiffs' interests could be divergent from those of other members of the proposed class," the district court does not abuse its discretion in denying certification. Weaver v. Univ. of Cincinnati, 970 F.2d 1523, 1531 (6th Cir. 1992).
Plaintiffs' proposed class consists of any home childcare provider in the State of Michigan who had union dues or agency fees deducted from a subsidy payment from DHS. The district court denied certification because a conflict existed within this proposed class: the interests of "the potential class representatives — all of whom oppose union representation in any form — are inherently at odds with a substantial number[] of the potential class members" who "not only wanted union representation, but were willing to pay union dues or an agency fee to receive it." R. 118 (08/30/2011 D. Ct. Op. at 10) (Page ID #2598). Plaintiffs assert that their interests are not at odds with potential class members because they "share[d] ... a common interest in not being forced to financially support an expressive organization without their consent and in violation of their First Amendment rights." Appellants Br. at 16. The evidence in the record leads us to the opposite conclusion.
The record shows that 4,806 home childcare providers approved the CBA that contains the provision authorizing deductions from subsidy payments to support the Union. R. 83-3 (Ex. 16 — Election Results) (Page ID #1688); R. 83-3 (Ex. 17 — CBA at 9) (Page ID #1700). Thus, plaintiffs' proposed class includes a substantial number of providers who voted in favor of financially supporting the Union in an action that alleges that the entire class was forced to support the Union financially. This is a clear conflict within the proposed class. Plaintiffs, who allege that they were compelled to pay the fees under the CBA, have divergent interests from other potential class members, who voted in favor of that same CBA. Further, those who voted for the CBA did not suffer the injury alleged by plaintiffs because they were not compelled to support the Union financially — they voted to do so. Finally, plaintiffs' lawsuit would impair the ability of the Union to represent its members and is, therefore, not in the interest of those proposed class members who voted in favor of using collective action to improve the conditions of the CDC. The district court did not abuse its discretion in denying certification of plaintiffs' proposed class because plaintiffs fail to meet the prerequisite of adequacy of representation under Rule 23(a)(4).
Plaintiffs' proposed subclass includes any home childcare provider who did not vote in any Union-related election. Plaintiffs argue that this subclass cures the conflict identified above because no one in the proposed subclass expressed support for the Union. In effect, plaintiffs attempt to meet their burden of establishing their right to class certification by asking this court to assume that any home childcare provider who did not vote in any election related to the Union is opposed to supporting the Union financially. We decline to make this assumption.
There are a variety of reasons why a home childcare provider might not participate in any of the Union elections, but one stands out to us. As noted earlier, there is a high turnover rate of home childcare providers. Also noted earlier, the Union elections occurred years before DHS made
For the reasons set forth in this opinion, we
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 626 n. 20, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (quoting Gen. Tel. Co. of S.W. v. Falcon, 457 U.S. 147, 157, n. 13, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)).
