Labor & Employment Law Daily Wrap Up, LABOR—UNIONS, UNION MEMBERS—1st Cir.: Prevailing party issue did not revive employee’s dues deduction case found moot, (Jul 27, 2026)

By Ronald Miller, J.D.

The district court denied the employee’s request for a declaratory judgment that he was entitled to money deposited with the court by the union because the money was his for the asking.

A former Puerto Rico public employee’s constitutional challenge to union-dues deductions was no longer a live controversy after the deductions ceased and the union deposited the full amount of the requested damages with a district court, ruled the First Circuit. The employee had alleged that the deduction of union dues used for political and ideological activities violated his First Amendment rights. In an earlier appeal, the First Circuit largely agreed that the case had become moot but remanded a narrow question regarding whether Cruz’s potential entitlement to prevailing-party attorney’s fees prevented mootness. On remand, the district court held that the employee qualified as a prevailing party against the union but concluded that attorney’s fees do not preserve an otherwise moot case. The First Circuit agreed, holding that any dispute regarding fees did not revive the underlying controversy and affirming the dismissal of all claims as moot (Cruz v. Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados, No. 23-2011 (1st Cir. July 24, 2026)).

Union dues withholding. The employee filed a lawsuit alleging violations of his constitutional rights by his employer, his union, of which he is a former member, and the governor in her official capacity. Specifically, the employee objected to the withholding from his pay of union dues used for “political, ideological, and other nonbargaining expenditures,” and he contended that such withholding—and the Puerto Rico law and collective bargaining agreement authorizing the withholding—violated the First Amendment of the U.S. Constitution.

While the employee’s suit was pending, the U.S. Supreme Court decided Janus v. AFSCME, Council 31, 585 U.S. 878 (2018). Thereafter, the union stopped deducting union fees from the employee’s pay and explained that it did so in compliance with an opinion letter issued by the Puerto Rico Secretary of Justice concluding that, under Janus, unauthorized union fee deductions were unconstitutional. For its part, the union filed a motion with the district court that sought leave to deposit with the court the full amount of compensatory damages the employee sought, plus interest and nominal damages. The district court granted the motion, and the union deposited the funds.

Employee claims moot. The district court thereafter issued an order in which it dismissed all of the employee’s claims as moot. According to the district court, the employee’s request for declaratory relief was moot because the challenged conduct had ceased and that his request for damages was moot because the union had deposited with the court the amount corresponding to union dues and fees deducted from his wages.

Thereafter, the employee filed a motion asking the district court to alter and amend its judgment under Rule 59(e). He requested that the court enter “a declaratory judgment... adjudicating his legal claims and entitlement to the UIA deposit.” The district court denied the motion, explaining that the union deposited the money, and that it was the employee’s for the asking. The employee appealed.

Declaratory judgment. On appeal, the employee asked the First Circuit to vacate the district court’s order dismissing his claims as moot and to direct the district court to enter judgment in his favor. The employee argued that he was unable to access the funds the union had deposited with the district court absent a declaratory judgment in his favor on the merits of his claims.

Because the district court ruled that the employee was entitled to the funds, the appeals court rejected his argument challenging the district court’s mootness determination.

First Amendment rights. However, the appeals court noted that the employee also asserted at oral argument that his request for declaratory relief was not moot because, absent a declaration that his First Amendment rights had been violated, “he may be unable to seek ‘prevailing party’ attorneys’ fees pursuant to 42 U.S.C. §§ 1983 and 1988.” Because the district court had “not address[ed] the prevailing party issue below or how it might bear on the mootness issue,” the appeals court remanded to the district court for consideration of that question, while retaining jurisdiction over the appeal.

Remand. On remand, the district court concluded that the employee had not waived the issue of whether he was a “prevailing party,” and held that he qualified as a prevailing party against the union. However, the district court also held that the prevailing party issue had “no bearing on the general mootness issue or this case’s dismissal.”

Prevailing party issue. Thereafter, the appeals court issued an order asking the parties to address why it should not affirm the dismissal of all of the employee’s claims as moot. Because every party agreed that the prevailing party issue did not bear on mootness and that the employee’s claims are all moot, the appeals court affirmed the district court’s ruling dismissing the claims.

The case is No. 23-2011.

Judge: Barron, D.

Attorneys: Matthew B. Gilliam, (National Right to Work Legal Defense Foundation) for Reynaldo Cruz. José-Enrico Valenzuela-Alvarado (Valenzuela-Alvarado) for Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados. Alberto Tabales-Maldonado (Schuster) for Puerto Rico Aqueduct and Sewer Authority. Francisco J. González-Magaz (Francisco González) for Jenniffer A. González-Colón.

Companies: Unión Independiente Auténtica de los Empleados de la Autoridad de Acueductos y Alcantarillados; Puerto Rico Aqueduct and Sewer Authority

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