Tidwell v. Schweiker, s. 81-1402
| Decision Date | 04 October 1982 |
| Docket Number | Nos. 81-1402,81-1654,s. 81-1402 |
| Citation | 677 F.2d 560 |
| Parties | Robert TIDWELL, et al., Plaintiffs-Appellees, v. Richard SCHWEIKER, etc., et al., Defendants-Appellees, and Ivan Pavkovic, etc., Defendant-Appellant. Robert SCHRECKENBERG, et al., Plaintiffs-Appellees, v. Richard S. SCHWEIKER, etc., et al., Defendants-Appellees, and Ivan Pavkovic, etc., et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Patricia Rosen, Chicago, Ill., for defendants-appellants.
Fay Clayton, Sachnoff, Schrager, Jones, Weaver & Rubenstein, Chicago, Ill., for plaintiffs-appellees.
Before CUMMINGS, Chief Judge, SWYGERT, Senior Circuit Judge, and CUDAHY, Circuit Judge.
In 1973 plaintiff-appellee Robert Tidwell, for himself and on behalf of a class similarly situated, filed a complaint against the Director of the Illinois Department of Mental Health ("DMH"). 1 An amended complaint was later filed in which Tidwell named the Secretary of the United States Department of Health, Education and Welfare 2 and the Administrator of the Social Security Administration 3 as additional defendants ("federal defendants"). In 1974 plaintiff-appellee Robert Schreckenberg, for himself and on behalf of others similarly situated, filed a suit identical to the Tidwell complaint. The two suits were consolidated pursuant to the state defendant's motion. 4 The plaintiffs challenged the statutory and regulatory scheme providing for the payment of Social Security disability benefits ("Social Security benefits" or "disability benefits") to institutionalized mental patients.
Specifically, plaintiffs alleged that their disability benefits were unlawfully seized by the state and federal defendants in violation of 42 U.S.C. §§ 407 and 1983 and the Fifth and Fourteenth Amendments of the Constitution. The plaintiffs' disability benefits were subject to seizure by one of two methods:
(1) If a patient entering an Illinois institution was determined to be competent, the patient was asked to sign DMH Form 623. The form allowed the state to accumulate disability benefits and other assets in a trust fund. When the assets in the fund reached $400, the state could use the surplus to pay the support costs incurred by the patient at the institution. DMH Form 623 did not disclose to the patient that the patient would be cared for regardless of whether the form was signed, that the agreement was revocable at any time or that the agreement covered Social Security disability benefits, which were not otherwise subject to legal process. See Figure I.
(2) If a patient was determined to be incompetent, a representative payee was appointed to receive the patient's disability benefits. The superintendent of the patient's institution was appointed as the payee if there was no other person available, such as a family member, to serve in that capacity. The process for appointing a representative payee did not provide notice to the patient or an opportunity for the patient to submit evidence. Once a representative payee was appointed, the disability benefits were accumulated in a trust fund identical to that used in conjunction with Form 623. See Figure I.
A three-judge court was impaneled to consider the issues raised by this suit. On June 23, 1976 the court found that the Illinois statutory and regulatory scheme involving the use of DMH Form 623 was in conflict with 42 U.S.C. § 407 and, therefore, violated the supremacy clause of the Constitution. The three-judge court also found that the appointment of an Illinois institutional superintendent as a representative payee was not per se unlawful, but that the procedures actually used to appoint such a payee violated due process standards. The court ordered specific remedial steps to cure both violations.
Subsequent to this ruling, both the State and the federal defendants altered their procedures relating to patients' disability benefits. On March 5, 1979 the three-judge court amended its 1976 order and determined that the revised federal procedures for appointing a representative payee now comported with due process. The court also found that revised DMH Form 623 was no longer an assignment in violation of 42 U.S.C. § 407. Additionally, Tidwell's motion for class certification was granted.
After this decision, plaintiffs' attorneys filed motions in the Northern District of Illinois pursuant to 42 U.S.C. § 1988 requesting attorney's fees against both the State and federal defendants. The court concluded that fees could not be awarded against the federal defendants and Tidwell voluntarily reduced fees attributable solely to these defendants. On February 6, 1981, the district court held that the State was responsible for all remaining attorney's fees and applied a 1.5 lodestar multiplier to the hourly rates of all attorneys and paralegals.
The State now appeals from the final judgment of the court on four grounds:
(1) Tidwell did not have standing to challenge the legality of DMH Form 623;
(2) the original Form 623 was not an assignment in violation of 42 U.S.C. § 407;
(3) the district court erred in awarding attorney's fees; and,
(4) the district court erred in failing to apportion attorney's fees between the state and federal defendants and by applying a lodestar multiplier.
Tidwell contends that all the issues raised on appeal by the State are moot except whether the award of attorney's fees was proper. We shall first consider the mootness issue.
Tidwell argues that the underlying controversy in this case has been extinguished and further review by this court would be meaningless. Tidwell bases this argument on the fact that the State defendant voluntarily altered DMH Form 623 and the new form has been in effect for more than five years; the challenged activity has ceased and there is no reasonable expectation that the conduct will be repeated.
The record does not show that the State's actions were "voluntary." The DMH altered Form 623 only after the three-judge court declared it illegal and this conduct was in compliance with the judgment of the court. If a party believes an order is incorrect, the remedy is to comply promptly with that order or judgment (absent a stay) and then to appeal. Maness v. Meyers, 419 U.S. 449, 458-59, 95 S.Ct. 584, 590, 42 L.Ed.2d 574 (1975). A party does not lose the right to appeal simply because it complies with an order of the court. Further, in the instant case, there is reason to believe that the conduct complained of may be repeated. In its reply brief, the State reaffirmed its belief that the original Form 623 was legal and, stated that if allowed to do so, it would reinstitute the form's use. Where a reasonable expectation exists that the conduct will be repeated, the issue is not moot. Johnson v. Board of Education, 664 F.2d 1069, 1071-72 (7th Cir. 1981). Because we have concluded that none of the issues raised in the State's appeal are moot, we now turn to the merits of those arguments.
The State contends that Tidwell does not have standing to challenge DMH Form 623 because none of the named plaintiffs actually signed Form 623 or were asked to sign the form. The State's argument boils down to one simple proposition: if Tidwell cannot challenge Form 623 as an individual, he cannot challenge the form as the representative of a class. Any issue involving Article III and a class action is not that simple. In Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975), the Supreme Court recognized that the class nature of a lawsuit may establish jurisdiction where none exists for an individual. 5Standing to challenge this system, in which the State was a knowing and active participant, is not defeated simply because the named plaintiffs did not actually sign Form 623. Every plaintiff was threatened by Form 623 upon entering the facility, every plaintiff was subject to the same system of deprivation, and in the end, every plaintiff suffered the identical harm--deprivation of Social Securtiy benefits. Only the precise means by which the injury was inflicted were different.
The recent Supreme Court case of Blum v. Yaretsky, --- U.S. ---, 102 S.Ct. 2777, 73 L.Ed.2d 534 (1982), which discusses standing, does not compel a different result. In that case, Medicaid patients in a nursing home brought an action on behalf of themselves and other members of a class to challenge nursing home procedures which allowed the transfer or discharge of such patients without notice or hearing. The named plaintiffs had been transferred to lower levels of care, but they sought to represent other class members who allegedly had been transferred to a higher level of care. The Court held that they lacked standing to challenge transfers to higher levels of care. The Court found that " [n]othing in the record available to this Court suggests that any of the individual respondents have been either transferred to more intensive care or threatened with such transfers." Id. at ---, 102 S.Ct. at 2784. The plaintiffs contended that the standing requirements of Article III were nevertheless met because other unnamed class members had been transferred to higher levels of care under the contedted procedure, but the Court rejected this contention Respondents ... "must allege and show that they personally have been suffered by other, unidentified members of the class to which they belong and which they purort to represent." Warth v. Seldin, 422 U.S. 490, 50, 95 S.Ct. 2197, 2207, 45 L.Ed.2d 343 (1975). Unless these individuals
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