Bowen v. Sonnenburg, 3-1078A267

Citation411 N.E.2d 390
Decision Date09 October 1980
Docket NumberNo. 3-1078A267,3-1078A267
Parties25 Wage & Hour Cas. (BNA) 434 Otis BOWEN, M.D., Governor of the State of Indiana; William E. Murray, M.D., Mental Health Commissioner; Patient Remuneration Board, State of Indiana, Defendants-Appellants, v. Leo J. SONNENBURG, a/k/a Leo J. Sonburg, by his sister and Legal Guardian, Marie Maupin; Gerald Hartnett; on behalf of themselves and all Similarly Situated Plaintiffs, Plaintiffs-Appellees.
CourtCourt of Appeals of Indiana

Theodore L. Sendak, Atty. Gen., Alembert W. Brayton, Deputy Atty. Gen., for defendants-appellants.

Terrance L. Smith, Anthony DeBonis, Jr., Murphy, McAtee, Murphy & Costanza, East Chicago, J. Patrick Smith, Smith & Smith, LaPorte, for plaintiffs-appellees.

GARRARD, Presiding Judge.

This action was brought by Leo J. Sonnenburg and Gerald Hartnett to secure compensation for services performed while they were patients in institutions for the mentally handicapped and mentally retarded in the State of Indiana. In addition to individual claims they sought to conduct a class action for the benefit of all other persons similarly situated.

I. History of the Case

A simplified account of the progress of the suit is as follows. The original complaint was filed May 23, 1974. It contended that the plaintiffs were entitled to be paid for all services performed in accord with the minimum wage and overtime provisions of the Fair Labor Standards Act, 29 U.S.C. §§ 201-219. 1

In March 1976, the complaint was amended to refer to the Indiana Patient Remuneration Act, IC 16-13-12.8-1 with the contention that the act was unconstitutional as a violation of the supremacy clause.

The complaint was again amended, apparently in August 1977 (although the file stamped copy contained in the transcript bears the date September 22, 1978). This complaint asserted that patient-employees were entitled to compensation under the Indiana act after January 21, 1972; that the Fifty Thousand Dollar ($50,000) appropriation contained in the act denied them equal protection of the laws and imposed upon them involuntary servitude in violation of the federal constitution; and that "(t)he named class of plaintiffs is incapable, by reason of mental handicaps and because they are, while mental patients in the physical custody of the defendants, unable to bring administrative action before the Patient Remuneration Board as established by the statute to recover claims for wages past due." It is unclear whether plaintiffs were attempting to state a claim for the period prior to January 21, 1972.

The defendants answered in denial and raised as affirmative defenses failure to state a claim, lack of jurisdiction of the subject matter, lack of standing of plaintiffs, statute of limitations and the failure of plaintiffs to exhaust their administrative remedies.

In November the plaintiffs filed a motion for partial summary judgment in which they sought judgment that this was a proper class action; that the defendants were obligated to pay the minimum wage under the Fair Labor Standards Act to mentally ill or retarded employees in hospitals, institutions and schools operated by the Department of Mental Health and had failed to do so; and a declaratory judgment that the plaintiffs had performed valuable services for the defendants.

The defendants' response, among other things, questioned the propriety of a class action. In addition they moved for a partial summary judgment to the effect that the Patient's Remuneration Act provided an administrative remedy that must be utilized before a civil action could be maintained.

On January 11, 1978 Alban L. Smith petitioned to intervene asserting that he was "the duly appointed guardian ad litem of all the patient workers who are confined to the Beatty Memorial Hospital, Westville, Indiana, and has been such guardian ad litem since the 23rd day of June, 1976," and as such was interested in the litigation.

Upon this state of the record, and considering the affidavits on file as well as the defendants' responses to discovery, on February 16, 1978 the court entered two orders. First, it found that Alban L. Smith was guardian ad litem for all patient-workers at Beatty Memorial Hospital and as such should be allowed to intervene as a plaintiff. Secondly, it considered the motions for partial summary judgment, and determined that the plaintiffs' motion should be granted and the defendants' denied. It then entered an order specifying that:

(a) the action was properly maintainable as a class action;

(b) a proper class consisted of "all patient workers who have labored in the State of Indiana institutions for the mentally handicapped or mentally retarded since the enactment of the Patient Remuneration Law (L.C. (sic) 16-13-12.8-1, et seq.); "

(c) the plaintiffs establish guardians ad litem in each of the counties where the ten state institutions enumerated by the court exist and such guardians be given the appropriate class action notice;

(d) the defendants notify by first class mail each member of the class not (no longer) confined in one of the institutions; and

(e) "the members of the class are entitled to be paid for all their labor performed for the defendants, at least to the gross amounts specified in the Patient Remuneration Law, after April 1, 1972; "

From these orders an interlocutory appeal was perfected by the defendants. However, before addressing the issues raised, it is necessary that we depart briefly to consider the statute in question since its scheme and applicability bear directly upon the matters in issue.

II. Patient Remuneration Act

Because of amendments to the Indiana Patient Remuneration Act, IC 16-13-12.8-1 et seq. during the period contemplated in the lawsuit, we consider the act as it evolved.

The bill was originally enacted by the 1969 legislature, vetoed and enacted over the veto on January 22, 1971. Acts 1969, Ch. 487. This act established a seven member patient remuneration board and concerned patients in any mental institution or institution for the mentally retarded operated by the State Department of Mental Health. Essentially it required the board to establish a schedule of occupational classifications and a remuneration schedule for them within six months after the effective date of the act. It provided the schedule should become effective "subject to the availability of funds" within seven months after the effective date and would provide remuneration for patients performing "work activity" as defined in the act. Section 9 provided a right of administrative review through the patient remuneration board and subsequent appeal to the courts for any patient who believed he had not been properly remunerated. No effective date was specified in the act, nor was a specific appropriation made.

The 1971 legislature also amended the act. Acts 1971, P.L. 474. These amendments restructured the board and increased its size to nine members; redefined "work activity" for which compensation was contemplated; and provided that the patient remuneration schedule should be completed within six months after the effective date of the act and would take effect "within thirty (30) days after having been reviewed and approved by the State Budget Agency" as to the availability of funds to implement its provisions. Again no effective date was specified, but an appropriation of fifty thousand dollars annually was made with the expression that "(t)he maximum annual expenditure may not exceed this specific appropriation." Acts 1971, P.L. 474, § 9. Additionally this version provided patients would be entitled to remuneration "if funds are available at the rate set forth in the remuneration schedule" for work activity "on and after the date the Department of Mental Health patient remuneration schedule shall first become effective." 2 The right of administrative review by the board was retained but reference to civil actions was deleted.

Acts of 1972, P.L. 3, approved January 21, 1972 and containing an emergency clause repealed Chapter 487 of the Acts of 1969, as amended, and re-enacted the 1971 act as Ch. 12.8 of IC 1971, 16-13, retaining its effective dates.

Amendment again occurred in 1975. Acts 1975, P.L. 151. The legislature then redefined the significant service in terms of "employment relationship" rather than "work activity." This version required the board to prepare a pay plan for patient remuneration but deleted reference to its completion date and to review and approval by the State Budget Agency. It provided the remuneration schedule should be the federal minimum wage, except that the board could "grant higher or lower wages in accordance with the skills of the patient." Also deleted was the proviso "if funds are available" concerning when the schedule was to become effective. These amendments became effective upon promulgation on July 29, 1975.

Finally, Acts of 1978, P.L. 21 abolished the Patient Remuneration Board and its functions effective December 31, 1978. Also repealed were the provisions for administrative review and the appropriation of fifty thousand dollars per year.

These institutions referred to were found by the trial court to include the following: Central State Hospital, Indianapolis; Evansville State Hospital, Evansville; Madison State Hospital, Madison; Logansport State Hospital, Logansport; Richmond State Hospital, Richmond; Muscatatuck State Hospital, Butlerville; Norman Beatty Memorial Hospital, Westville; Larue Carter Memorial Hospital, Indianapolis; New Castle State Hospital, New Castle; and Fort Wayne State Hospital and Training Center, Fort Wayne.

From the foregoing it is readily apparent that the action before us involves substantive issues of great weight concerning the rights of mentally handicapped persons in state institutions and the public treasury. Those issues are complicated by a difficult statutory history, imprecision in the nature of the claims advanced, 3 and the...

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