Bedgood v. Cleland

• Decision Date: 29 July 1982
• Docket Number: Civ. No. 4-80-596.
• Citation: 554 F. Supp. 513
• Parties: Levi Z. BEDGOOD, individually and on behalf of others similarly situated, Plaintiffs, v. Max CLELAND, in his capacity as Administrator of the Veterans Administration, Defendant.
• Court: U.S. District Court — District of Minnesota

554 F. Supp. 513

Levi Z. BEDGOOD, individually and on behalf of others similarly situated, Plaintiffs, v. Max CLELAND, in his capacity as Administrator of the Veterans Administration, Defendant.

Civ. No. 4-80-596.

United States District Court, D. Minnesota, Fourth Division.

July 29, 1982.

M. Francesca Chervenak and Laurie N. Davison, Legal Aid Society of Minneapolis, Minneapolis, Minn., for plaintiffs.

Deborah Kleinman McNeil, Asst. U.S. Atty., Minneapolis, Minn., for defendant.

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Plaintiff Levi Z. Bedgood brings this action on behalf of himself and all others similarly situated against defendant Max Cleland in his capacity as the Administrator of the Veterans Administration (VA) attacking on due process grounds the notice and hearing procedures used in connection with reductions, terminations, or suspensions of veterans' pension benefits. Plaintiffs seek to hold defendant in contempt of court for alleged violations of an order entered by a Maryland District Court and ask for declarative and injunctive relief requiring that certain procedures be followed by the VA. Jurisdiction is alleged under 28 U.S.C. §§ 1361 and 1331.

Plaintiffs move for summary judgment, enforcement of judgment, and for contempt. Defendant moves to dismiss or for summary judgment.

Background

Based upon the factual stipulation of the parties and the affidavits, depositions, and exhibits filed herein, the following facts appear to be undisputed. Plaintiff Levi Z. Bedgood is a sixty-two year old man who has received a veteran's disability pension since April, 1969. The pension is his sole source of income. Upon his admittance to a nursing home in 1979, his pension benefits were raised to the "aid and attendance rate." When the VA was subsequently informed by an attendant at the nursing home that he had left the facility, it required him to furnish certain information and undergo a medical examination to determine the extent of his disability.

The VA ratings board determined that his pension benefits should be lowered to the "housebound rate." Bedgood was informed of this change only after its effective date and was not given a copy of the board's decision. He then brought this action and sought to obtain a preliminary injunction forbidding defendant to reduce, terminate, or suspend his benefits without advance notice and a hearing.

On February 12, 1981, the court issued an order which (1) certified a class of all recipients of VA pension benefits in the State of Minnesota whose pension benefits have been or may be reduced, terminated, or suspended without adequate advance notice and a hearing prior to a change in benefits; (2) ordered defendant to restore Bedgood's benefits to their former level until he was given adequate notice and a hearing; and (3) preliminarily enjoined defendant from reducing, terminating, or suspending pension benefits to classmembers without providing adequate advance notice, the form of which was specified in the order. 521 F.Supp. 80.

Upon subsequent motion of defendant and receipt of new evidence, the court modified the preliminary injunction on April 30, 1981, to except from the notice requirement changes based on unambiguous numerical information supplied by the claimant after notice that the information would be used to calculate the monthly benefit amount and based on reliable information that the claimant had died.

Bedgood was afforded a hearing on the decision to reduce his benefits before a St. Paul VA ratings board panel on April 1, 1981. The medical member of the rating panel had participated in the initial decision to reduce Bedgood's benefits. The panel determined that Bedgood was not entitled to benefits at the aid and attendance rate, thus affirming the previous decision. This decision was based on everything in Bedgood's file, not only on the evidence adduced at the hearing. Bedgood was not sent a copy of the board's decision.

Bedgood's case subsequently came before the VA's central office for random discretionary review. It determined that Bedgood had been entitled to benefits at the aid and attendance rate even after he left the nursing home and voided the rating board's decision. He was awarded benefits at the aid and attendance rate retroactively.

The parties have stipulated that the way Bedgood's hearing was conducted and the way a decision was reached following his hearing was consistent with the VA's policies and procedures.

Discussion

1. Background: Plato v. Roudebush

Plaintiffs contend that defendant is required to follow certain procedures set out in Plato v. Roudebush, 397 F.Supp. 1295 (D.Md.1975). The Plato court certified a nationwide class of "all individuals whose individual VA monthly pension benefits have been or may in the future be administratively reduced, terminated, or suspended without first being afforded adequate advance notice and the opportunity for a hearing prior to the change in monthly pension benefits." Id. at 1301. The court then declared in its judgment that the VA had a due process obligation to provide classmembers with adequate notice prior to decrease in VA pension benefits and to provide a full hearing thereon.¹ It ordered the VA not to reduce, terminate, or suspend monthly pension benefits until it afforded the individual timely and adequate notice detailing the reasons for the change, its effective date, and the available review procedure, and also afforded the opportunity for a hearing at which the individual could confront and cross-examine witnesses, be represented by counsel, and receive a reasoned decision by an impartial decisionmaker.² Judgment was entered in Plato on July 7, 1975, and no appeal was taken by defendant.

Plaintiffs contend that the Plato decision is res judicata as to the issues herein and also seek to enforce the decision in this court in a motion for contempt. They claim that defendant is in violation of the order entered in Plato in a number of respects. Specifically, they allege that predetermination notices are not provided in all cases required, that the content of the notices is insufficient, and that the hearings supplied do not comply with Plato's requirements (that the decisionmaker be impartial, the decision be based on the evidence adduced at the hearing, claimants be allowed to confront and cross-examine witnesses, and claimants be provided with a copy of the decision).

2. Defendant's Motions to Dismiss

Defendant first moves to dismiss for mootness. He contends that the VA has recently amended its nationwide notice procedures so that all proper due process is provided petitioners and no controversy remains.

Plaintiffs admit that proper notice and a predetermination hearing are provided in most cases, but they contend that the requirements of Plato have not been met in that changes in benefits are made without notice and hearing based on clear oral information from the claimant and non-numerical information from the claimant. The Plato decision excepted from the notice and hearing requirement only changes based on application of numerical standards to clear written statements of fact, which were typically made in the annual income questionnaire, reliable information that the beneficiary had died, or failure to return the questionnaire. Plato v. Roudebush, 397 F.Supp. at 1312-1313; note 1, supra. Plaintiffs also have provided evidence of certain flaws in the hearing procedure itself, as noted above.

On the factual record now before the court, it cannot be said the issue is moot. Defendant denies in his answers to interrogatories that in Minnesota predetermination notices are not supplied in the categories of cases alleged by plaintiffs. However, the parties have stipulated that the VA manual does not require predetermination notice when a change is based on either oral or written information supplied by the claimant and that the decision whether to provide such notice is made by persons in the regional offices who rely on the claims manual without any other written instructions. John R. Kelly of the VA stated in his deposition that it is possible for there to be a change in benefits without notice in certain cases of oral notice from a petitioner. These alleged practices would violate the Plato judgment, and the claim for mootness should therefore be denied.

Second, defendant moves to dismiss plaintiff's attack on VA hearing procedures for lack of standing. He contends that Bedgood was not injured by the hearing process because he ultimately retained benefits at the aid and attendance level as a result of the random discretionary review of his file.³

Generally, to have standing a plaintiff must himself have suffered the injury he seeks to address. This requirement is necessary to assure the concrete adverseness which sharpens the issues to guarantee the existence of a genuine case or controversy. Urban Contractors Alliance v. Bi-State Development Agency, 531 F.2d 877, 881 (8th Cir.1976) (quoting Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962)). Similarly, unless the named plaintiff purporting to represent a class establishes a case or controversy with a defendant, he may not seek relief for himself or the class. O'Shea v. Littleton, 414 U.S. 488, 494, 94 S.Ct. 669, 675, 38 L.Ed.2d 674 (1974). But where the class has been certified, the case need not be dismissed simply because the specific controversy between the class representative and the defendant no longer exists after certification. Sosna v. Iowa, 419 U.S. 393, 399-403, 95 S.Ct. 553, 557-559, 42 L.Ed.2d 532 (1975). Accord United States Parole Commission v. Geraghty, 445 U.S. 388, 398, 100 S.Ct. 1202, 1209, 63 L.Ed.2d 479 (1980). In addition, where a named plaintiff had a personal stake in the outcome at the outset and the claim may arise again with respect to the plaintiff, the litigation may be allowed to continue notwithstanding the named plaintiff's...