Gendron v. Saxbe

• Decision Date: 07 January 1975
• Docket Number: No. CV 73-2241-EC.,CV 73-2241-EC.
• Citation: 389 F. Supp. 1303
• Court: U.S. District Court — Central District of California
• Parties: Ronald GENDRON, Plaintiff, v. Honorable William B. SAXBE, Attorney General of the United States of America, et al., Defendants.

389 F. Supp. 1303

Ronald GENDRON, Plaintiff, v. Honorable William B. SAXBE, Attorney General of the United States of America, et al., Defendants.

No. CV 73-2241-EC.

United States District Court, C. D. California.

January 7, 1975.

Scott J. Tepper, Los Angeles, Cal., Dennis H. Devermont, Santa Monica, Cal., Carole E. Goldberg, A. L. Wirin, Fred Okrand, Los Angeles, Cal., for plaintiff.

William D. Keller, U. S. Atty., Frederick M. Brosio, Jr., Asst. U. S. Atty., by Carolyn M. Reynolds, Asst. U. S. Atty., Los Angeles, Cal., for defendants.

Before KOELSH, Circuit Judge, and CRARY and LUCAS, District Judge.

MEMORANDUM OPINION

The plaintiff seeks to enjoin the enforcement of Sections 3401-3405, Title 38, U.S.C., which limits the fees payable to agents and attorneys and provides for criminal sanctions for violation thereof. It is plaintiff's contention that the $10 fee limitation for agent or attorney imposed by § 3404 for the preparation, presentation and prosecution of claims under laws administered by the Veterans Administration, violates the plaintiff's constitutional rights to due process in the pursuit of his claim to service-connected disability benefits (38 U.S.C. § 301) and is a denial of his right to equal protection of the laws under the 5th Amendment.

The case was ordered remanded by the Court of Appeals, 501 F.2d 1087 (9th Cir., 1974), for hearing by a three-judge court following appeal from denial of plaintiff's request for a three-judge court and dismissal of the case on the grounds that the statute in issue and the predecessor statutes had been held to be constitutional by the Supreme Court in Hines v. Lowrey, 305 U.S. 85, 59 S.Ct. 31, 83 L.Ed. 56 (1938), and Margolin v. United States, 269 U.S. 93, 46 S.Ct. 64, 70 L.Ed. 176 (1925). The Court of Appeals observed in its opinion:

"In holding that the issues are not insubstantial, we express no opinion on the ultimate merits of the constitutional arguments."

The Supreme Court, in the Margolin case, held that the statute in effect at that time, limiting fees to a claim agent or attorneys for services to a beneficiary in respect to a claim under the War Risk Insurance Act, was not in conflict with the 5th Amendment. Claimant's counsel was convicted for charging more than the authorized amount.

Hines v. Lowrey, supra, involved the World War Veterans' Act in effect in 1938 which limited to $10 the fee for any agent or attorney for services in the preparation of an application for veterans' benefits to the Bureau of Veterans' Affairs. The Supreme Court held that the limiting of the fee payable to an attorney for services in connection with the claim was a valid exercise of Congressional power. The veteran's counsel had received an award of $1500 for the services in question which involved preparation of the application for the claim and appearing with the disabled veteran in presenting the claim to the Bureau. The respondent was the representative of the estate of the incompetent veteran and sought to justify an award of $1500 attorney's fees made by a New York court. In upholding the limitation the Court said:

"Congressional enactments in pursuance of constitutional authority are the supreme law of the land. Section 500 is a valid exercise of congressional power."

The Court of Appeals, Third Circuit, ruled on the issue before that Court in Hoffmaster v. Veterans Administration, 444 F.2d 192 (3rd Cir., 1971). The trial court, Chief Judge John W. Lord, Jr., denied the plaintiff veteran's motion for injunction and granted the motion of the Veterans' Administration to dismiss. After noting plaintiff's argument that the $10 limitation as to attorneys fees made it "* * * impossible for him to obtain proper legal counsel for his claims," the Court of Appeals ruled that the $10 limitation statute was enacted to protect just claimants from improvident bargains and "the constitutionality of this type of law has been upheld many times," citing several authorities, including Hines v. Lowrey and Margolin v. United States, supra.

The constitutionality of the fee limitation to agents or attorneys in proceedings before the Veterans' Administration and of Section 211(a), Title 38, U.S.C., were before District Judge Kinneary in Holley v. United States, 352 F. Supp. 175 (S.D.Ohio, 1972). Section 211(a) provides that no court of the United States shall have power or jurisdiction to review the decisions of the Administrator of the Veterans' Administration. The claim of the plaintiff veteran was entitlement to a disability pension for service-connected disability. In denying the request for a three-judge court and dismissing the complaint, the Court observed with respect to the restriction of attorneys fees, "* * * such limitations on attorney's fees are clearly constitutional," citing the cases discussed hereinabove.

The parties, by their "Stipulation of Facts for Trial," have agreed, among other things, that the plaintiff enlisted in the United States Air Force about February 6, 1969. As a result of psychiatric evaluation conducted at the United States Air Force Hospital, Chanute Air Force Base, Illinois, about May 14, 1969, he was found to be suffering from psychiatric problems and was discharged from the Air Force under honorable conditions as "unsuitable" on June 20, 1969. It was further stipulated that after consideration of plaintiff's application for service-connected disability benefits and an examination of plaintiff in January, 1973, it was determined the plaintiff was not entitled to the benefits he was seeking. On May 3, 1973, the plaintiff appealed the Veterans' Administration ruling and thereafter attempted to retain counsel but was unable to do so by reason of the $10 fee limitation. Plaintiff did not apply to the lay personnel referred to in Section 3402, Title 38, U.S.C. By reason of his mental condition plaintiff has received aid from the State of California and social security disability. He has, since March, 1973, been under the care of a psychiatrist whose services are paid for by Federal medicare.

Plaintiff relies chiefly on the decision of the Supreme Court of the United States in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). There the appellees were receiving financial aid under the federally assisted New York State's Home Relief program. The issue involved was whether appellees' constitutional rights to due process were violated by termination of the aid being received, without prior notice and pre-termination evidentiary hearing. The Supreme Court held that such welfare benefits are a matter of statutory entitlement for persons qualified to receive them and procedural due process is applicable to their termination. Pages 261-262, 90 S.Ct. 1011.

In ruling that the appellees were entitled to pre-termination hearing, the Court said that the hearing need not be a judicial or quasi-judicial trial but the recipient must be advised of the grounds for termination and be given the opportunity to confront adverse witnesses and present his own argument and evidence orally before the decision maker. It was held that counsel need not be furnished at the hearing but the recipient of the benefits must be allowed to retain an attorney if he so desired. The Court, in ordering the pre-termination hearing, said:

"Thus the crucial factor in this context — a factor not present in the case of the black-listed government contractor, the discharged government employee, the taxpayer denied a tax exemption, or virtually anyone else whose governmental entitlements are ended — is that termination of aid pending a resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits." Page 264, 90 S.Ct. page 1018.

That condition does not exist in the case at bar.

In reaching its conclusions in the Goldberg case, the Supreme Court applied a two part test, (a) is the interest at issue a constitutionally protected "property" or "liberty" interest, and if it is, (b) whether the recipient's interest in avoiding loss outweighs the Government's interest in maintaining the procedure as provided. Pages 262-263, 90 S.Ct. 1011.

As to public assistance benefits, the Court states:

"The constitutional challenge cannot be answered by an argument that public assistance benefits are `a "privilege" and not a "right".'" Page 262, 90 S.Ct. page 1017.

It then observes:

"Relevant constitutional restraints apply as much to the withdrawal of public assistance benefits as to disqualifications for unemployment compensation * * *."

Apparently, the Court was considering a "right" in terms of a property interest as applying to withdrawal of an established right to public assistance benefits and not as a claim of qualifications for such benefits manifested by an application therefor, as is involved in the instant case.

In Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 the respondent teacher had been hired for the term of one year and the issue, pertinent to the instant matter, was whether his procedural due process rights had been violated by the Regents refusing to rehire him without notice of the reasons therefor. The Court held that the terms of the respondent's employment accorded him no "property" interest protected by procedural due process. In discussing the property rights...