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FROST v. WEINBERGER

May 3, 1974

Claudia FROST, Individually and as the next friend of James Frost and Kristen Frost, minors, and as representatives of a class of all persons who are now or may in the future be entitled to receive survivors' benefits under the Social Security Act whose benefits have been or may be reduced without a prior hearing, Plaintiffs,
v.
Caspar WEINBERGER, as Secretary of the United States Department of Health, Education and Welfare, Defendant


Travia, District Judge.


The opinion of the court was delivered by: TRAVIA

TRAVIA, District Judge.

The facts relevant to the legal issues presented to this court are not in dispute. Charles Frost, Jr., the husband of the plaintiff Claudia Frost and the father of the plaintiffs James and Kristen Frost, died on August 21, 1968, and was fully insured under the provisions of the Social Security Act, Title 42 U.S.C. § 414(a). In that same year, the plaintiffs began receiving survivors' benefits under the provisions of the Social Security Act. *fn1" By 1973 the payments being made under the award amounted to $159.30 per month for each of the named plaintiffs, i.e., an aggregate monthly benefit of $477.90 for the entire family. *fn2"

 On February 15, 1973 the plaintiffs were notified by letter that their monthly benefits were to be reduced by $63.60 per person, or a total reduction of $190.80 per month for the family. The basis for the downward adjustment in benefits was stated to be because the Social Security Administration had determined that the insured decedent, Charles Frost, Jr., had fathered two illegitimate children, Charles E. and Tina L. Frost (hereinafter referred to as the "claimants"), who had also applied for and were now entitled to receive survivors' benefits. *fn3" Reduction of the plaintiffs' benefits was deemed necessary by virtue of the maximum total benefits limitation provided in Title 42 U.S.C. § 403(a). *fn4" It is alleged that upon inquiring into the matter, plaintiff, Claudia Frost, was orally advised that in order to contest the Social Security Administration's decision, she would have to file a written request for reconsideration and submit evidence which would rebut either claimants' allegations or the administrative determination. *fn5" Plaintiff, Claudia Frost, then filed the requisite forms for reconsideration at the local office of the Social Security Administration in Freeport, New York, on behalf of herself and her children. Plaintiff, Claudia Frost, alleges that she repeatedly requested an opportunity to examine the evidence which had formed the premise for the administrative determination, but that her requests were all denied. She asserts that as a result she was unable to present sufficient evidence to rebut the claimants' assertions and could only categorically deny the claim that her husband had sired the two claimants.

 In May 1973 the plaintiffs received a letter of "reconsideration determination," informing them that the Social Security Administration had deemed the original determination, which found the two claimants entitled to benefits under Section 216(h) (3) of the Social Security Act, to have been correct in all respects. Thereafter, commencing with the May 1973 survivors' benefits payment and continuing until the present date, plaintiffs have only received their benefits at the reduced level of payment.

 In October 1973, plaintiff, Claudia Frost, commenced the instant action, on behalf of herself, her two infant children, as well as on behalf of all persons similarly situated, against the defendant, who is statutorily charged with the administration of the provisions of the Social Security Act and who is empowered to make rules and regulations and to establish procedures for determining benefit rights under the Act. Title 42 U.S.C. § 405(a) and (b).

 The plaintiffs demand the following relief:

 (1) A declaratory judgment that the reduction of benefits to the plaintiffs and the members of the class represented by them prior to a hearing violates their rights to the due process of law guaranteed by the Fifth Amendment to the Constitution of the United States.

 (2) A declaratory judgment establishing the minimum standards for any hearing required to be given prior to any reduction of benefits to the plaintiffs and the members of the class represented by them, including but not limited to:

 
(a) prior notice in writing of the initial determination of the right to request a pre-reduction hearing, of how to obtain such a hearing, of the right to be represented by counsel at such hearing, of the right to confront and cross-examine witnesses, and of the right to examine documents and records to be used at such hearing at a reasonable time prior to and during such hearing.
 
(b) The deferral of the effective date of any reduction pending the decision in such hearing.

 (3) A mandatory permanent injunction ordering defendant, his successors in office, agents and employees, to establish the mechanism for providing such hearings, for the plaintiffs and the members of the class represented by them.

 (4) A permanent injunction prohibiting defendant, his successors in office, agents and employees from reducing benefits to the plaintiffs and the members of the class represented by them without such a prior hearing.

 (5) A preliminary injunction prohibiting defendant, his successors in office, agents and employees from reducing benefits to the plaintiffs and the members of the class represented by them without such a prior hearing.

 (6) A temporary restraining order requiring that pending a hearing as requested herein defendant restore the benefits of the named plaintiffs to the levels to which they would be entitled but for the reduction herein alleged and a temporary restraining order, preliminary injunction and/or permanent injunction requiring that defendant restore to the named plaintiffs all sums by which the benefits of the named plaintiffs have been reduced without a hearing.

 (7) A determination that this action be maintained as a class action and that the declaratory and injunctive relief ordered apply to all members of the class.

 On November 2, 1973 the plaintiffs made application to this court for the issuance of a temporary restraining order and a preliminary injunction, directing the defendant to restore plaintiffs' survivors' benefits to the pre-reduction level. This court, by an order signed November 12, 1973, denied the plaintiffs' motion without prejudice to a renewal, if the defendant failed to hold an administrative hearing on the matter within one month. Pursuant to this court's order, a hearing was held on November 27, 1973 by the Social Security Administration, as will be referred to herein.

 Subsequently, the plaintiffs made a motion, pursuant to Rule 23(b) (2) of the Federal Rules of Civil Procedure, seeking leave of this court to maintain their lawsuit as a class action. Oral argument on the application was heard on December 8, 1973. On that date, the parties indicated their desire to submit motions for summary judgment. Accordingly, the attorneys orally agreed that decision on the class action motion should be held in abeyance pending the resolution of the litigants' respective motions for summary judgment. On February 26, 1974 in addition to filing a motion for summary judgment the plaintiffs also renewed their previous application for a preliminary injunction. Oral argument was heard on all of the unresolved motions on March 8, 1974, at which time it was brought to the court's attention that an administrative determination had been rendered by an Administrative Law Judge on the underlying factual merits of the claimants' eligibility to share in the plaintiffs' benefits. As a result, this court granted the litigants two-weeks to submit additional papers and memoranda, commenting on the impact of the administrative ruling upon the instant action.

 MAINTENANCE OF A CLASS ACTION

 Rule 23 of the Federal Rules of Civil Procedure provides the applicable standards for determining whether a suit can be maintained as a class action. As a prerequisite to the declaration of any lawsuit as a class action, a plaintiff must demonstrate that:

 
"(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class." Fed. R. Civ. P. 23(a).

 1103*1317 The spirit of Rule 23 calls for a liberal rather than a restrictive reading of the statutory language. Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 563 (2d Cir. 1968). Indeed, it has been opined that "if there is to be an error made, let it be in favor and not against the maintenace of the class action." Green v. Wolf Corp., 406 F.2d 291, 298 (2d Cir.), cert. denied, 395 U.S. 977, 89 S. Ct. 2131, 23 L. Ed. 2d 766 (1968).

 The defendant's opposition to the plaintiffs' right to maintain this lawsuit as a class action is grounded upon the plaintiffs' alleged failure to comply with the "typicality" requirement of Rule 23(a) (3). More specifically, the defendant asserts that by the very nature of the case, the interests of approximately one-half of the members, i.e., the illegitimate children, are diametrically opposed to the interests of the plaintiffs, who purport to represent the class. In support of this contention, the defendant cites the rule that:

 
"If the class members themselves have conflicting rights in the subject matter of the litigation so that their respective priorities among the class members must be determined in the action, then claims of a right to represent the class often will be found to be improper." 7 Wright & Miller, Federal Practice and Procedure § 1768, at 647.

 Upon closer scrutiny, however, the defendant's argument must be rejected. The rule defendant relies upon is subject to one important caveat, namely, that the antagonism among the class members "must be as to the subject matter of the suit." 3B J. Moore, Federal Practice para. 23.07 [3], at 23-104. Any antagonism of interests which might exist here relates solely to the ultimate apportionment of the survivors' benefits between the claimants and the plaintiffs. *fn6" This is an issue not properly before this court and it is wholly peripheral to the central issue which is presented in this case, i.e., whether a recipient of survivors' benefits is entitled to a pre-reduction evidentiary hearing. Inasmuch as both the plaintiffs and the claimants would stand to benefit from a requirement that the Social Security Administration provide a due process hearing prior to any downward adjustment in a recipient's benefits, this court is unable to discern any conflict of interests between the claimants and the plaintiffs. By supposition, if at a future time the Social Security Administration were to determine that other children were also the progeny of the deceased insured, then the claimants herein would have an interest coextensive with that of the plaintiffs in demanding that an evidentiary hearing be afforded to them before any readjustment in benefits takes place.

 Moreover, it is arguable that the claimants are really not in fact members of the class which the plaintiffs seek to represent. Plaintiffs only purport to represent those recipients of survivors' benefits who have had a downward adjustment in benefits without being afforded a pre-reduction evidentiary hearing. The claimants clearly have not suffered such a deprivation and cannot be considered as coming within the parameters of the class.

 As to the other prerequisites enumerated in Rule 23(a), suffice it to say that the plaintiffs have adequately demonstrated the requisite numerosity, that a common question of law exists *fn7" and that they, as representatives, will fairly and adequately protect the interests of their ...


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