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Jordan v. Trainor

decided: October 19, 1977.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 71 C 70 - Honorable Hubert L. Will, District Judge.

Fairchild, Chief Judge, and Swygert, Cummings, Pell, Sprecher, Tone, Bauer, and Wood, Circuit Judges. Pell, Circuit Judge, dissenting. Tone, Circuit Judge, dissenting. Bauer, Circuit Judge, dissenting.

Author: Wood

WOOD, Circuit Judge.

In 1971 plaintiffs filed this class action seeking declaratory and injunctive relief alleging failure of the Illinois Department of Public Aid to process applications for assistance under the Aid to the Aged, Blind and Disabled program (AABD) within the time limits prescribed by federal regulations. Plaintiffs sought to have entitlement attach at the end of the federal time limit. The district court in an unreported decision required by permanent injunction that defendants comply in the future with the time limits and awarded retroactive benefits. Upon appeal that judgment was affirmed. Jordan v. Weaver, 472 F.2d 985 (7th Cir. 1973). The Supreme Court granted certiorari, and in a five to four decision reversed upon Eleventh Amendment grounds so much of the decree which ordered retroactive payment of benefits found to have been wrongfully withheld but left undisturbed the purely prospective relief. Edelman v. Jordan, 415 U.S. 651, 39 L. Ed. 2d 662, 94 S. Ct. 1347 (1974). Thereafter this court remanded the case to the district court. After remand, plaintiffs filed a motion for an "order requiring the defendants to notify the members of the plaintiff class of their possible entitlement to retroactive benefits and their right to apply for benefits within sixty days through the state's administrative procedures, and requiring said defendants to include with such notice a form returnable to the Department of Public Aid upon which such persons may indicate their desire to appeal." Over the defendant's Eleventh Amendment objections the motion was allowed. Jordan v. Trainor, 405 F. Supp. 802 (N.D. Ill. 1975). The trial court's order set forth the form of the Notice of Right to Appeal Denial of Benefits to be used by the Department and the Notice of Appeal to be used by the applicant. On appeal of that order a panel of this court reversed holding that the Supreme Court in Edelman had interpreted the Eleventh Amendment to be a jurisdictional bar precluding any type of retroactive relief. Jordan v. Trainor, 551 F.2d 152 (7th Cir. 1977). A Petition for Rehearing en Banc was granted.*fn1

The issue being reconsidered is whether or not the Eleventh Amendment bars the proposed limited use of the court's equitable power in these circumstances. Defendants do not urge upon us the view that there is no "case or controversy" as required by Article III, Section 2 of the Constitution. That problem was referred to by Judge Garth in his concurring opinion in Fanty v. Commonwealth of Pennsylvania, Dept. of Public Welfare, 551 F.2d 2 (3rd Cir. 1976). In the present case the trial court determined that the class included applicants who had applied for AABD since July 1, 1968, and whose applications were not timely processed as required by federal regulations. In its judgment, in addition to its award to applicants of past benefits withheld, the trial court held certain applicable state regulations to be invalid and granted a permanent injunction requiring compliance with the federal time limits for processing and paying AABD applicants. Only the retroactive award provision was struck down by the Supreme Court. The basic controversy did not disappear. The notice problem we now face is a related aspect of the class controversy controlled by the trial court's permanent injunction.

The specified notice required by the district court to be sent to members of the class stated in part that "you were denied public assistance to which you were entitled in the amount of $. . . ." Enclosed with that notice was the other form, "Notice of Appeal," to be signed by the applicant and returned to the Illinois Department of Public Aid. That notice contained the language "The department illegally delayed in the processing of my AABD application, and, as a consequence denied me benefits to which I was and am entitled." We agree with the panel's opinion that

"The sending of the particular notice and the form of notice of appeal will order, in effect, the payment of state funds by retroactive award to the members of the plaintiff class for past action or inaction by the State of Illinois. In the form of notice to be sent, there is an admission by the State of Illinois that each member of the plaintiff class was 'denied public assistance to which you were entitled ' in an amount to be stated in such notice. "

That admission was compelled by the order of the district court and appears to be a type of money judgment against the state. We agree that the district court's order controverts the Eleventh Amendment in this regard and cannot be sanctioned.

The objectionable content of the notice forms are not in keeping with the views expressed by the trial judge in his Memorandum Opinion to which they were attached. With those views, but not the forms, we agree.

The more delicate variation of that issue is the constitutionality of a mere explanatory notice to applicants advising them that there is a state administrative procedure available if they desire to have the state determine whether or not they may be eligible for past benefits. A simple returnable notice of appeal form could also be provided. Those notices would not be handicapped by any federal predetermination of state liability. The parties agree that there are or may be various defenses available to defendant which could be raised in the state proceeding. The federal court would in no way be involved in any determination of whether or not past benefits were in fact due from the state.

This court is not in agreement on the constitutionality of such limited relief as an adjunct to the purely prospective relief granted. Although we view it as a close question, we hold that in the context of this case a permissible notice may be fashioned within the strictures of the Eleventh Amendment. There is no longer a claim that the state has waived its constitutional protection under the Eleventh Amendment. It is likewise conceded that the state, not merely an officer, would be directly involved in any relief granted. We realize there is little or no supporting precedent directly in point to give us complete confidence in our view, but we shall examine what we find.

We look for guidance to Edelman v. Jordan, supra. As the Court pointed out, the rule "has evolved that a suit by private parties seeking to impose a liability which must be paid from public funds in the state treasury is barred. . . ." 415 U.S. at 663. " Ex parte Young [209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908)] does not extend so far as to permit a suit which seeks the award of an accrued monetary liability which must be met from the general revenue of a State. . . ." Id. at 664. The Court also noted that the retroactive portion of the district court's order required "the payment of a very substantial amount of money." Id. We learn also that the character of any relief ordered which may in practice resemble a money judgment payable out of the state treasury cannot be changed or made acceptable by labeling it "equitable" in nature. Id. at 666. What had been labeled "equitable restitution" was found to be indistinguishable in many aspects from an award of damages against the state. Id. at 668.

The form of notice we envisage would not create a "liability" against the state. Whether a liability might result would be a matter for state determination, not the federal court. No federal judgment against the state would be created. Such a notice could not be labeled equitable restitution or be considered an award of damages against the state. The defendant makes no issue out of any incidental administrative expense connected with the preparation or mailing of the notice. It has suggested in the record that the notice could be included in the regular monthly mailing. The necessary information comes from a computer. There is no indication that the administrative expense would be substantial.

Looking further at Edelman, we see some suggestion that the Eleventh Amendment, even apart from Ex parte Young, may not be a total and complete bar so long as it does not constitute a retroactive award for damages to be paid by state funds. The Court commented that "we must judge the award actually made in this case, and not one which might have been differently tailored in a different case. . . ." 415 U.S. at 665. Similarly, the Court recognizes that "as in most areas of the law, the difference between the type barred by the Eleventh Amendment and that permitted under Ex parte Young will not in many instances be that between night and day." Edelman specifically overruled three recent cases in which the Supreme Court had summarily affirmed district court judgments requiring state directors of public aid to make similar retroactive payments as were originally ordered in this case by the district court. Although the list may not be intended to be complete, there is no mention of the three-judge decision, Grubb v. Sterrett, 315 F. Supp. 990 (N.D. Ind. 1970), summarily affirmed 400 U.S. 922, 27 L. Ed. 2d 182, 91 S. Ct. 187 (1971).*fn2 That decision provided for notice to members of the class whose applications for Indiana public assistance had previously been denied under a regulation subsequently held to be invalid. The notice was to contain no prejudgment of state liability. The state was left to make the eligibility determination according ...

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