Ortiz v. Eichler

• Decision Date: 09 July 1986
• Docket Number: No. 85-5606,85-5606
• Parties: Medicare&Medicaid Gu 35,489 Nilsa ORTIZ, John Peek, Annie Mae Revelle, Marcinda Jackson and Denise Trader, individually and on behalf of all other persons similarly situated and Marsha Curtis (pltf-intervenor) (13) v. Thomas P. EICHLER, in his official capacity as Secretary of the Delaware Department of Health and Social Services, and Phyllis T. Hazel in her official capacity as Acting Director of the Department's Division of Economic Services. Appeal of Thomas EICHLER and Phyllis Hazel.
• Court: U.S. Court of Appeals — Third Circuit

Page 889

794 F.2d 889

Medicare&Medicaid Gu 35,489

Nilsa ORTIZ, John Peek, Annie Mae Revelle, Marcinda Jackson and Denise Trader, individually and on behalf of all other persons similarly situated and Marsha Curtis (pltf-intervenor) (13) v. Thomas P. EICHLER, in his official capacity as Secretary of

the Delaware Department of Health and Social Services, and

Phyllis T. Hazel in her official capacity as Acting Director

of the Department's Division of Economic Services.

Appeal of Thomas EICHLER and Phyllis Hazel.

No. 85-5606.

United States Court of Appeals, Third Circuit.

Argued June 2, 1986.

Decided July 9, 1986.

Richmond L. Williams (argued), Deputy Atty. Gen., Delaware Dept. of Justice, Wilmington, Del., for appellants.

Anne M. Perillo (argued), Community Legal Aid Society, Inc., Wilmington, Del., for appellees.

Before ALDISERT, Chief Judge, and GARTH and SLOVITER, Circuit Judges.

OPINION OF THE COURT

ALDISERT, Chief Judge.

This appeal requires us to decide two major questions relating to procedures used by Delaware for denying or terminating Aid to Families with Dependent Children (AFDC), Food Stamps and Medicaid benefits. We must first decide the extent of a pre-hearing notice required to be given by Delaware under the due process clause of the 14th Amendment; we must also decide the extent of confrontation of witnesses at the hearings. Delaware authorities are the appellants. They argue that the district court imposed notice requirements that are too detailed and that they should not be required to conduct denial or termination hearings with the formality directed by the court. For the reasons set forth below, we will affirm the district court.

I.

Class representatives of all recipients of or applicants for federally-funded public assistance benefits administered by the Delaware Department of Health and Social Services (hereinafter "claimants") filed an action pursuant to 42 U.S.C. Sec. 1983 against appellants, the Secretary of the Delaware Department of Health and Social Services (DHSS), and the Director of DHSS's Division of Economic Services (DES). They sought declaratory and injunctive relief, objecting to DES procedures for the denial or termination of Aid to Families with Dependent Children (AFDC), Food Stamps and Medicaid benefits. They alleged, inter alia, that these procedures violated the laws and regulations governing these programs, and deprived them of property without due process of law.

Plaintiffs moved for class certification and summary judgment on all but two claims. The district court granted the class certification motion and, in part, their motion for summary judgment. Ortiz v. Eichler, 616 F.Supp. 1046 (D.C.Del.1985). The district court subsequently issued an opinion on reargument, Ortiz v. Eichler, 616 F.Supp. 1066 (D.C.Del.1985), entered an order relating to issues decided in these opinions [August 16, 1985 Order (reprinted in appendix in br. for appellants) ], and issued a third opinion covering procedures the parties should follow in complying with the court's order. All parties agree that the effect of the three opinions and order was to grant summary judgment as requested by appellees on all but one issue. ¹ The district court granted declaratory relief on all other issues, August 16, 1985 Order at 1-2; and immediately enjoined DES from considering ex parte evidence and statements of adverse declarants not available for cross-examination. Id. at 3. The court also ordered that commencing October 1, 1985, DES notices of adverse action must comply with all regulatory and due process requirements and that final decision letters must contain all of the information required by federal regulations. Id. at 3-5. Finally, the district court enjoined DES from allowing the state hearing representative to prepare the recommended hearing decision in food stamp cases and ordered that the opportunity for new hearings be given to all class members who were adversely affected by the procedural deficiencies in their prior hearings. Id. at 5-6. The Delaware agencies have appealed.

II.

Before us, DES challenges those portions of the district court's order concerning the pre-hearing notice of agency action and the use of adverse statements of absent witnesses at agency hearings.

Because this appeal involves the application and interpretation of legal principles, the standard of review is plenary. Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 101-02 (3d Cir.1981). See also Barnes v. Cohen, 749 F.2d 1009, 1013 (3d Cir.1984) (on review of district court rulings concerning interpretations of federal and state regulations under the AFDC program, standard is whether district court applied correct legal precepts), cert. denied, --- U.S. ----, 105 S.Ct. 2126, 85 L.Ed.2d 490 (1985).

III.

Before addressing the merits of DES's contentions, we must determine whether this appeal is properly before us. The Delaware authorities contend that appellate jurisdiction lies pursuant to 28 U.S.C. Sec. 1291. Br. for Appellants at 1. But claimants counter that the court's order was not final under Sec. 1291 because the order granted only partial summary judgment for claimants. We conclude that appellate jurisdiction lies pursuant to 28 U.S.C. Sec. 1292(a)(1).

Courts of appeals have jurisdiction "of appeals from all final decisions of district courts...." 28 U.S.C. Sec. 1291. Rule 54(b), F.R.Civ.P., expressly provides that an order adjudicating less than all claims in an action with multiple claims is not final unless the district court makes "an express determination that there is no just reason for delay ... on express direction for the entry of judgment." DES concedes that the district court has not disposed of all of claimants' claims, and DES has not sought a Rule 54(b) determination and certification from the district court. Nor does DES assert that the district court's order is appealable under the "collateral order exception" of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 545-47, 69 S.Ct. 1221, 1225-26, 93 L.Ed. 1528 (1949). Consequently, the district court's order is not appealable under 28 U.S.C. Sec. 1291. Brooks v. Fitch, 642 F.2d 46, 47 (3d Cir.1981).

Unlike section 1291, however, section 1292 provides for appellate jurisdiction of appeals from "[i]nterlocutory orders of the district courts of the United States ... granting ... [or] refusing ... injunctions...." 28 U.S.C. Sec. 1292(a)(1). Because the district court's order granted some of claimants' requests for injunctive relief, this court has jurisdiction of DES's appeal under Sec. 1292(a)(1). The additional declaratory relief from which DES appeals tracks issues virtually identical to those raised by the grant of injunctive relief. Where the additional elements of the district court's order are closely intertwined with those granting or denying injunctive relief, the exercise of jurisdiction over the additional elements is proper. Gomez v. Turner, 672 F.2d 134, 138 (D.C.Cir.1982) (appellate review of both injunctive and declaratory relief afforded by district court's partial grant of summary judgment); Adashunas v. Negley, 626 F.2d 600, 602 (7th Cir.1980) (where injunctive relief was deemed part of order denying motion for partial summary judgment, appellate court could review entire order on appeal "[b]ecause the denial of injunctive relief is interdependent with the remainder of the appealed order...."). ² We now turn to the merits of the appeal.

IV.

Claimants had contended that the notices routinely sent by DES to public assistance claimants prior to denying or terminating benefits were inadequate because the notices failed to explain the reasons for DES's action or to present calculations justifying that action. The district court agreed. It directed DES to issue notices that complied with the requirements of the applicable regulations and due process:

At a minimum, these notices shall ... 3) provide a detailed individualized explanation of the reason(s) for the action being taken which includes, in terms comprehensible to the claimant, an explanation of why the action is being taken and, if the action is being taken because of the claimant's failure to perform an act required by a regulation, an explanation of what the claimant was required by the regulation to do and why his or her actions failed to meet this standard; and 4) if calculations of income or resources are involved, set forth the calculations used by the agency, including any disregards or deductions used in the calculations, explanations of what income and/or resources the agency considers available to the claimant and the source or identity of these funds, and the relevant eligibility limits and maximum benefit payment levels for a family or assistance unit of the claimant's size.

August 16, 1985 Order at 4.

A.

DES contends that the pre-hearing notice required by the district court goes beyond the minimum requirements of due process and the applicable federal regulations. It argues that order "requires individual level data of an unlimited degree of specificity which would result in a notice virtually incomprehensible to a claimant and would be a substantial administrative burden." Br. for appellants at 14. We disagree.

The district court's order tracks the requirements of "adequate" notice set forth in the applicable federal regulations. ³ Although these regulations do not specify precisely the information required for adequate notice, the district court properly looked to requirements mandated by the due process clause to flesh out the details. Garrett v. Puett, 707 F.2d 930 (6th Cir.1983); Schroeder v. Hegstrom, 590 F.Supp. 121, 127 (D.Ore.1984). The leading case of Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), teaches that due process requires that claimants facing termination of public assistance benefits must be given "adequate notice detailing the reasons for a proposed termination...." Id. at 267, 90 S.Ct....