# Petition — Mathews v. Jimenez > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1682%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 427 U.S. 658 ## Text i Yupreme Court, U. & FILED noV5-1114]) fe > wm ODAK, JR, CLEAR ——— In the Supreme Court of the UniteD States OctroperR TERM, 1975 F. Davip Matuews, SecreTrary ©" HEALTH, EDUCATION, AND WELFARE, PETITIONER v. EUGENIO AND ALICIA JIMENEZ, BT AL. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Ropert H, BORK, Solicitor General, Rex 1. Lee, Aasiastant Attorney General, WILLIAM KANTER, JOHN K, VILLA, Attorneys, Department of Justice, Washington, D, C. 205380, In the Supreme Court of the United States OCTOBER TERM, 1975 No. I’, DAVID MATHEWS, SECRETARY OF HEALTH, MDUCATION, AND WELFARE, PETITIONER v. IUGENIO AND ALICIA JIMENEZ, BT AL, PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS POR THE SEVENTH CIRCUIT The Solicitor General, on behalf of the Secretary of Health, Edueation, and Welfare, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Seventh Circuit in this case, OPINIONS BELOW The opinion of the court of appeals (App, A, infra, pp. la-35a) is reported at 528 F.2d 6x9, (1) 2 The orders of the district court (App, D and App. B, infra, pp, 40a-4da) ave not officially reported,’ JURISDICTION The judgment of the court of appeals (App, B, infra, pp, 86a-37a) was entered on September 12, 1975, A timely motion for rehearing was denied on November 7, 1975 (App. C, infra, pp. 38-39a), The jurisdiction of this Court is invoked under 28 U.S.C, 1254(1), QUESTIONS PRESENTED 1. Whether class relief is available in suits brought under Section 205(@) of the Social Security Act, 2, If so, whether individuals who are not them- selves entitled to bring suit under that provision may nevertheless be included within the class that is awarded relief, STATUTE INVOLVED Section 205(@) of the Social Security Aet, 4) Stat, 624, as amended, 42 U.S.C, 405(g@), provides in pertinent part; Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such de- ‘In prior proceedings in this suit, a three-judge distriet court upheld the constitutionality of the provision of the So celal Seeurity Aet under which respondents’ applications fo: henefita had been denied, 358 F. Supp, 1856 (N.D, Th). This Court on review held that provision unconstitutional and re manded for further proceedings, 417 U.S, 628,. cision by a civil action commenced within sixty days after the mailing to him of notice of suel decision or within such further time as the Sec- retary may allow, * * * The court shall have power to enter, upon the pleadings and tran- script of the record, a judgment affirming, modi- fying, or reversing the decision of the Secretary, with or wiinout remanding the cause for a re- hearing, * * * [Where a claim tas been denied by the Secretary or a decision is rendered under subsection (b) of this section which is adverse to an individual who was a party to the hear- ing before the Secretary, because of failure of the claimant or such individual to submit proof in conformity with any regulation preseribed under subsection (a) of this section, the court shall review only the question of conformity with such regulations and the validity of such regulations, © * * The judgment of the court shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions, * * * STATEMENT The named respondents, Eugenio and Alicia Jime- nez, are the illegitimate children of Ramon Jimenez, a fully insured individual entitled to disability in- surance benefits under Title II of the Social Security Act, Beeause both named respondents had been born after their father became entitled to disability bene- fits in October 1963, they were unable to satisfy the eligibility requirements for child's insurance bene fits under Section 202(d) of the Act, 42 U.S.C, 402 (a), 4 After their applications for benefits had been de- nied by the Seevetary after a hearing, the named respondents instituted this action in the United States District Court for the Northern District of Ilinois on their own behalf and “on behalf of all claimants for child’s social security insurance benefits, who are born out of wedlock after their fathers have become entitled to receive Social Security insurance henefits by reason of old age, disability, or death’ (Complaint, Count II, 13), The complaint requested reversal of the Secretary's decision denying the named respondents’ application for benefits, a declara- tion that the provision denying benefits to after-born illegitimate children was unconstitutional, and an injunetion prohibiting the Seeretary “from denying Social Security benefits to any members of the class” (Complaint, p. 8). A three-judge district court was convened pursuant to 28 U S.C, 2282, and, without considering the request for class relief, upheld the statute as constitutional, 853 F, Supp, 1856, Re- spondents appealed the district court’s judgment to this Court,’ Reapondents asserted that this Court's jurisdiction was conferred by 28 U.S.C, 1255. While it ia doubtful whether the distriet court was empowered to grant injunctive relief under Section 2O5(g), and therefore whether this Court had jurisdiction over the appeal under 28 U,S.C, 1255 (see Wein. herger V, Salfi, 422 U.S, 749, 763, n, 8), the Seeretary did not chatlenwe thin Court's jJuriadietion, and thia Court did not consider the question at that time, That juriadietional quea- tion, which remained open (see Hagana Vv, Lavine, 416 US, 528, S55, 0. 5), la presently before the Court in Norton Vv, Mathews, No, 74-0212, argued January 13, 1976, This Court declared unconstitutional the portion of the Act which conclusively denied benefits to after- born illegitimates and remanded the suit to the distriet court with directions to provide the named respondents with an opportunity to establish their eligibility for benefits by proving that they lived with and were supported by their father. 417 U.S. 628. The district court remanded the case to the Sec- retary, who determined that the named respondents were eligible for benefits under the standard enunci- ated by this Court. The district court then, for the first time, considered the request for class relief. The court certified the suit as a class action and ordered the Secretary “to provide benefits to all those denied benefits since the date of the filing of this action solely by reason of that portion of the Act declared unconstitutional” (App. E, infra, p. 44a). The order specifically previded that “|s|uch benefits shall cover the period from which said persons would originally have been entitled but for the provisions invalidated herein * * *” (ibid.). The Secretary appealed from that order to the extent that it required payment of benefits to the class for the period prior to June 1974, the month in which this Court held the statutory bar uncon- stitutional.’ The court of appeals affirmed, reject- ‘No appeal was taken from the district court’s order inso- far as it ordered benefits for the period after May 1974, since the Secretary was voluntarily reviewing prior applications to determine which claimants may have been denied benefits on mm 6 ing the Secretary’s argument, inter alia, that the district court lacked jurisdiction to grant the class relief ordered and that this Court’s earlier decision should be given prospective effect only (App. A, infra, pp. lla-35a).* REASONS FOR GRANTING REVIEW The issues presented by this case are presently before this Court, in a slightly different context, in Norton v. Mathews, No. 74-6212, argued January 13, 1976. Since this Court’s opinion in Norton is likely to address these issues, this petition should be held pending disposition of that case. 1. In Norton, we have contended that Section 205 (g) of the Social Security Act manifests a congres- sional intention of barring class suits and permitting adjudication only of individual claims. See pp. 12- 13 of our brief in Norton.’ If that contention is sustained, the court of appeals here erred in affirm- ing the award of class relief. The tota! benefits at issue here are estimated to amount to approximately the basis of the provisions held unconstitutional by this Court. After these applications were reviewed and updated, all eligi- ble claimants were paid prospectively and back to June 1974, without being required to file new applications unless their upplications previously had been finally adjudicated. ‘While the Secretary intends in future cases to adhere to the position that constitutional adjudication under the Act should be given prospective effect only, he has concluded that the consequences of retroactivity are not sufficiently substan- tial in the instant case to warrant review of that question by this Court at this time. A copy of that brief is being furnished to respondents’ counsel. 7 24 million dollars,’ and the availability vel non of class relief in Social Security cases such as this is a question of substantial cumulative importance to the administration of the Social Security trust fund. 2. We further contended in Norton that even if Section 205(g) is construed as permitting the ad- judication of class suits, it is nevertheless clear that a district court exercising jurisdiction under that provision is empowered to award relief only to in- dividuals who are themselves entitled to bring suit for review of a decision by the Secretary made after a hearing and within 60 days prior to the filing of the complaint. See generally pp. 8-18 of our brief in Norton. The decision of the court below doubly violates that principle by awarding relief not only to individuals with respect to whom the Secretary finally denied benefits after the filing of the com- plaint in this case but also to individuals with re- spect to whom the Secretary only initially denied benefits but who did not sufficiently exhaust their administrative remedies to be entitled to bring suit in their own behalf.’ Thus the courts below departed *In the courts below, the amount of benefits at issue was represented, on the basis of estimates made by the Secretary at the time, to be approximately 5 million dollars. Closer examination of the outstanding applications has caused that estimate to be reduced by half. * The court of appeals reasoned that the exhaustion require- ment of Section 205(g¢). that the claimant receive a “final decision * * * made after a hearing,” “may be disregarded if the Secretary’s decision rested on a legal ground that did not necessitate any hearing’’ (App. A, infra, p. lla, n. 10). But 8 from the well-settled rule that each class member’s claim must fall within the subject-matter jurisdic- tion of the court. See Zahn v. International Paper Co., 414 U.S. 291, 301. In so doing, the district court and court of appeals here directly frustrated one of the major purposes of the finality require- ments of Section 205(g), @e., to protect the Social Security trust fund against lability arising from the untimely reassertion of abandoned claims. CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be disposed of in accordance with this Court’s opinion in Norton v. Mathews, No. 74-6212, argued January 13, 1976. Respectfully submitted. ROBERT H. Bork, Solicitor General. Rex E. LEE, Assistant Attorney General. WILLIAM KANTER, JOHN K. VILLA, Attorneys. FEBRUARY 1976. this Court in Weinberger Vv. Salfi, 422 U.S. 749, 766-767, made clear that where there has becn no hearing, the decision is final only if the Secretary concedes finality. The Secretary has now promulgated regulations governing when a decision made without a hearing may be considered “final” for pur- poses of Section 205(¢). See 40 Fed. Reg. 53,585 (November 18, 1975). Those regulations require, inter alia, issuance by the Secretary of a letter certifying finality; no such letter was issued with respect to the members of the class defined by the courts below. la APPENDIX A IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT No. 75-1046 EUGENIO and ALICIA JIMENEZ, by their father and next friend, RAMON JIMENEZ, PLAINTIFFS-APPELLEES v8. CASPAR WEINBERGER, Secretary of Health, Education and Welfare, DEFENDANT-APPELLANT Appeal from the United States District Court for the Northern District of Illinois, Eastern Division No. 71 C 1436 RICHARD B. AUSTIN, Judge. Argued April 2, 1975 Decided September 12, 1975 Before MCALLISTER, Senior Circuit Judge,* STEVENS and SPRECHER, Circuit Judges. * Senior Circuit Judge Thomas F. McAllister of the United States Court of Appeals for the Sixth Circuit is sitting by designation. a 2a STEVENS, Circuit Judge. This appeal is a sequel to Jimenez v. Weinberger, 417 U.S. 628, in which the Supreme Court held unconstitutional the portion of the Social Security Act which had provided the basis for the Secretary’s denial of plaintiffs’ application for benefits. On remand, the district court granted relief to the plaintiffs and to other similarly situated applicants, The Secretary has appealed, question- ing (1) whether the district court had the power to certify the case as a class action after a decision on the merits, and (2) if so, whether the award of retroactive relief to the unnamed plaintiffs was proper. Because of the novelty and importance of the issues, we recite the procedural history of the case in some detail. I Plaintiffs are the illegitimate children of a dis- abled wage earner. On August 21, 1969, their father, acting on their behalf applied for insurance benefits under the Social Security Act. Because plaintiffs were born after the onset of their father’s disability, § 216(h)(3)(B) of the Act, 42 U.S.C. § 416(h) (3) (B), required the Secretary to deny their applica- tion.’ They exhausted their administrative remedies; ' “(3) An applicant who is the son or daughter of a fully or currently insured individual, but who is not (and is not deemed to be) the child of such insured individual under paragraph (2) of this subsection, shal! neverthe- less be deemed to be the child of such insured individ- ual if: [Continued] * [Continued] ** € “(B) in the case of an insured individual entitled to disability insurance benefits, or who was entitled to such benefits in the month preceding the first month for which he was entitled to old-age insurance bene- fits— (i) such insured individual— (I) has acknowledged in writing that the appli- cant is his son or daughter, (II) has been decreed by a court to be the father of the applicant, or (III) has been ordered by a court to contribute to the support of the applicant because the applicant is his son cr daughter, and such acknowledgement, court decree, or court or- der was made before such insured individual’s most recent period of disability began; or (ji) such insured individual is shown by evidence satisfactory to the Secretary to be the father of the applicant and was living with or contributing to the support of that applicant at the time such period of disability began [.]” Subparagraph (2)(A) of 42 U.S.C. § 416(h) provides that the Secretary shall apply the intestate succession law of the insured’s domicile state to determine whether an applicant is the child of an insured individual. The plaintiffs were not considered the children of Ramon Jimenez under Illinois law because the parents had not intermarried and Ramon had not formally acknowledged the children. Nor could they qual- ify under subparagraph 2( B), as the offspring of a marriage, commenced by a marriage ceremony, which, “but for a legal impediment . .. would have been a valid marriage.” Plaintiffs could not satisfy the requirements of subpara- graph (3) (B) (i), and, because they were born after the commencement of the disability period, even thougia they were living with and supported by Ramon Jiruenez, they could not qualify under subparagraph (3) (B) (ii ). da on June 15, 1971, which was less than 60 days after the final adverse decision of the Secretary, they com- menced this action, invoking the jurisdiction of the federal court under 42 U.S.C, § 405(g)." The complaint sought both individual and class re- lief. The class allegations met the requirements of subparagraph (b)(2) of Fed. R.Civ, 23 rather than subparagraph (b)(8).° Plaintiffs prayed for a judg- ment declaring the statutory exclusion unconstitu- tional, enjoining the Secretary from denying benefits ‘That seetion provides, in part; “Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespec- tive of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or Within such further time aa the Secretary may al- Paragraph 3 of Count IT of the complaint reads as follows: “Plaintiffs EUGENIO and ALICIA JIMENEZ bring thia action individually and as a class action, pursuant to Rule 23 of the Federal Rules of Civil Procedure on behalf of all claimants for child's social security insurance bene- fita, who are born out of wedlock after their fathers have become entitled to receive Social Security insurance bene- fits by reason of old age, disability, or death, The persons in this class are so numerous as to make joinder of all members unpracticable and there are questions of law common to all member of the class, The claims of the individual Plaintiff are typical of the claims of the class, and the individual Plaintiff will iairly and adequately protect the interest of the class, Separate actions by in- dividual members of the class would create the risk of inconsistent adjudications that would establish ineom- patible standards of conduct for the Defendant,” eee OE OE EE 5a to plaintiffs or to any other members of the class, and for such other reliéf as might be appropriate, The Secretary’s answer admitted the facts alleged in the complaint, averred that the statute foreclosed relief, and denied that the case was appropriately brought as a class action, No separate motion di- rected at the question whether the case should be certified as a class action was filed by either party. The Secretary moved for summary judgment, con- tending (1) that the case should not be treated as a class action, and (2) that he should prevail on the merits, The plaintiffs filed a cross motion for sum- mary judgment, arguing the converse of both is- sues, Thereafter, in May 1972 plaintiffs filed a mo- tion to convene a three-judge court pursuant to 28 U.S.C, § 2282.° The three-judge court was appointed and pro- ceeded to decide the merits, apparently without giv- ing any consideration to the class action issue, In their opinion sustaining the constitutionality of the statute, the majority said nothing about the class action; Jimenez vy. Richardson, 353 F.Supp, 1356 (N.D. Til, 1978). In his dissent, however, Circuit Judge Fairchild stated that he would have enjoined '“S 2282. Injunction against enforcement of Federal statute; three-judge court required An interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution of the United States shall not be pwranted by any district court or judge thereof unless the application therefor is heard and determined by a district court of three judwes under section 2284 of this title.” 6a enforcement of the statutory exclusion as applied to the unnamed plaintiffs “and others similarly situ- ated.” /d, at 1363, Plaintiffs appealed directly to the Supreme Court pursuant to 28 U.S.C, §$ 1253. By accepting jurisdic- tion, that Court implicitly decided that the three- judge court was properly convened,’ and also, again implicitly, that the district court had the power to grant injunctive relief in an action brought under $ 405(@) of the Social Security Act." The only ques- tion formally presented by plaintiffs’ appeal was whether the statute was constitutional; at the end of their brief, however, plaintiffs “submitted that the case should be remanded to the district court for con- sideration of proper relief with respect to restitution for members of the plaintiffs’ class.”' * ‘In this case, unlike Weinberger Vv, Salfi, 48 U.S.L.W, 4985 (U.S, June 26, 1975), the district court did not hold the fed- eral statute unconstitutional; § 1252 did not, therefore, confer appellate jurisdiction on the Supreme Court, Cf, footnote & of the Salfi opinion, 43 U.S.L.W, at 4989, The Court's juria- diction under § 12583 waa dependent on the fact that the char- acter of the litigation in the distriet court required decision by a three-judge court, See note 4, supra, ® Unless the district court had jurisdiction to enjoin enforce- ment of an Act of Congress, 28 U.S.C, § 2282 would not have required that « three-judge court be convened; absent such “n requirement, the Supreme Court would not have had appel- late jurisdiction pursuant to § 12638, See note 5, svpra. In his Supreme Court brief for the Government in this case the Solicitor General acknowledged that the Supreme Court's jurisdiction rested on § 1253; he did not question that juris- diction, Brief for appellanta in No, 72-6609, O.T, 1973, pp, 44-45, Ta On June 19, 1974, the Supreme Court reversed on the mevits, vacated the judgment of the district court, and remanded the case “to provide appellants an opportunity, consistent with this opinion, to estab- lish their claim of eligibility as ‘children’ of the claimant under the Social Security Act.” 417 U.S, at 637-638. Neither the opinion of the Chief Justice for the Court, nor the dissent of Mr, Justice Rehnquist, made any reference to the class action issue, After the mandate issued, plaintiffs moved for the entry of an order reconvening the three-judge court, certify- ing the case as a class action, and granting relief to the named as well as the unnamed plaintiffs, The Secretary opposed that motion and filed his own motion for remand to the agency for a final deter- mination of the eligibility of the named plaintiffs. After those motions had been briefed, the plaintiffs filed a separate motion for a ruling on the named plaintiffs’ right to relief without further administra- tive proceedings, Without addressing any other pend- ing issue, on October 21, 1974, the single district judge remanded the case to the Secretary for final disposition within three weeks, The Secretary then found that plaintiffs were eligible for benefits and so advised the district court. On November 15, 1974, the single district judge entered two orders, In the first, he declared the rele- vant portion of the statute null and void and ordered the Seeretary to pay benefits to the plaintiffs for the period after August 21, 1969, the date of their orig- inal application, In the second order, the court di- Ra rected the Seeretary to give notice of the resultant change in the statute to all those applicants for Social Security bene- fite Who have been denied benefits aulely by Pei son of the provisions of the Act now declared unconstitutional, together with an explanation of how they should proceed in order to obtain the benefits]. | He further ordered the Secretary to provide benefits to all those denied benefits since the date of the filing of this action solely by reason of that portion of the Act declared unconstitutional, Such benefits shall cover the period from which said persons would originally have been entitled but for the provisions invali- dated herein, and payment of said benefits and ongoing monthly benefits to all eligible persons shall begin forthwith. | In support of a motion for reconsideration, which was denied, and a motion for stay pending appeal, Which was granted in part, the Secretary added cer- tuin factual matter to the record, There are about 7,000 members of the class; their aggreyate claims amount to about $5,000,000, Although the Secretary challenges the court’s power to order retroactive re- lief to the unnamed members of the class, he repre- sents that he is now paying them benefits for the period after the date of the Supreme Court decision on June 19, 1974, and that he has paid the named plaintiffs back to the date of their original applica- tion, as ordered by the district court. The amount 9a in dispute therefore includes claims which were de- nied by the Secretary after the litigation commenced on June 15, 1971, and which acerued prior to June 19 1974 I] The Supreme Court’s recent decision in Weinber- ger Vv, Salfi, 43 U.S.L.W, 4985 (June 26, 1975), re- minds us to confront at the outset the question whether the district court had jurisdiction of the class aspects of this litigation.” As the Court held in Salfi, 42 U.S.C, § 405(g@) is the only statute authorizing the district court to grant relief from a denial of benefits under the So- cial Security Act. The language of the statute con- fers authority to affirm, modify or reverse a decision of the Secretary, but contains no suggestion that a reviewing court is empowered to enter an injunctive decree whose operation reaches beyond the particular applicants before the Court, 43 U.S.L.W, at 4989, note 8 Nevertheless, as we have already noted, the Court’s acceptance of appellate jurisdiction in this very case Was a holding, albeit unarticulated, that such jurisdiction does exist, Moreover, if the Court did not believe a class action could ever be main- tained under the Social Security Act, there would have been no need to analyze the shortcomings of the —=_ "Asa we have indicated on several recent oecasions, a re- viewing court has the responsibility to raise ava sponte the question of the district court's jurisdiction, Sehreiber Vv, Lugar, Nos, 74-1998, 1999, at 2 (7th Cir, July 14, 1975); Carson V, Allied News Co., 5611 F.2d 22, 23 (7th Cir, 1975), 10a particular class which Salfi represented, Unques- tionably §$ 405(g) conferred jurisdiction on the dis- trict court to hear a timely claim by each individual member of the class; we think Rule 23 provides a procedure by which such power may be exercised in au single appropriate proceeding, Unnamed, as well us named, plaintiffs are “applicants before the court” in a properly maintained class action, In the Salfi case, the Court held that § 405(g@) did not provide jurisdiction over the claims of the un- named members of the class because they had not satisfied one of the three statutory requirements for judicial review of an adverse decision by the Secre- tary,’ specifically, the requirement of a final decision ‘As the Court explained, “Section 405(g) specifies the following requirements for judicial review: (1) a final decision of the Secretary made after a hearing; (2) commencement of a civil action within 60 days after the mailing of notice of such decision (or within such further time aa the Secretary may allow); and (3) filing of the action in an appro- priate district court, in general that of the plaintiff's residence or principal place of business, The second and third of these requirements specify, reapectively, a atat- ute of limitations and appropriate venue, As such, they are waivable by the parties, and not having been timely raised below, see Fed, Rules Civ, Proe, &8(¢), 12¢0h) (1), need not be considered here, We interpret the firat re- quirement, however, to be central to the requisite grant of subject matter furisdiction—the atatute enjpowers district courta to review a particular type of decision by the Secretary, that type being those which are ‘final’ and ‘made after a hearing.’ ” 43 U.S.L.W. at 4989, | Continued | lla by the Secretary. The complaint was deficient be- cause it did not contain any allegation that those plaintiffs had “even filed an application with the Secretary much less that he had rendered any deci- sion, final or otherwise, review of which [was] sought.” In this case, although the complaint is somewhat ambiguous, the order of the district court overcomes this objection because it limits the class to “appli- cants’” who have been denied benefits solely by reason of the invalid provisions of the Act. By definition, therefore, in this case the class is limited to persons satisfying the requirement of a final decision by the Secretary.” It is, however, not equally clear that the * [Continued] The court found that the unnamed class members had not satisfied § 405(g)’s “final decision” requirement. “(T]he complaint is deficient in that it contains no alle- gations that they have even filed an application with the Secretary, much less that he has rendered any decision, final or otherwise, review of which is scught.” Salfi makes it clear that the “made after a hearing” lan- guage may be disregarded if the Secretary’s decision rested on a legal ground that did not necessitate any hearing. In that case, with respect to the named plaintiffs, the court con- cluded that a “fins decision of the Secretary” had been ren- dered, even though exhaustion of the full panoply of hearings and appeals provided by the applicable Social Security regu- lations had not occurred. Only a constitutional issue re- mained with respect to these applications. The Court stated: “Plainly [the purposes of exhaustion of administrative remedies{| have been served once the Secretary has satis- fied himself that the only issue is the constitutionality of a statutory requirement, a matter which is beyond his 12a unnamed plaintiffs in this case satisfied the second statutory requirement for judicial review, namely, the timely commencement of a civil action. jurisdiction to determine, and that the claim is neither otherwise invalid nor cognizable under a different section of the Act. Once a benefit applicant has presented his or her claim at sufficiently high a level of review to satisfy the Secretary’s administrative needs, further ex- haustion would not merely be futile for the applicant, but would also be a commitment of administrative re- sources unsupported by any administrative or judicial interest.” 43 U.S.L.W. at 4990. The claims of the named plaintiffs were, therefore, found to be properly before the court. In this case, the district court defined the class as “all those denied benefits since the date of the filing of this action solely by reason of that portion of the Act declared uneonstitutional.” (Emphasis added). While perhaps open to differing inter- pretations, we read this language as referring only to those persons who were denied benefits by reason of the challenged section of the Act and by reason of that section alone. In other words, we do not interpret the court’s description as including those persons who may have been denied benefits as « result of § 216(h)(3)(B) but whose applications could have been or were rejected for other reasons as well. Thus, the class whose claims were properly before the district court was made up of applicants whose applications had progressed to a high enough level in the administrative proceedings where it could be, and was, determined “that the claim[s] [were] neither otherwise invalid nor cognizable under a dif- serent section of the Act.” 43 U.S.L.W. at 4990. If the class is defined in this way, the exhaustion concerns embodied in $405(¢) and discussed in Selfi are satisfied. Thus, with respect to such a class, a “final decision of the Secretary” has been rencered, and judicial review in the district court was appropriate. 13a Timeliness was not an issue in Salfi because the Secretary had waived any question of limitations. No such waiver can be found in this record.'' The ques- tion which is therefore presented is whether the timely filing of suit by the named plaintiffs satisfied the 60 day statute of limitations requirement for the entire class. The question appears to have been answered by American Pipe and Construction Co. v. Utah, 414 U.S. 538, but a possibly critical difference between that case and this must be identified. The holding in American Pipe was that the pen- dency of a complaint seeking relief for the class tolled the statute of limitations applicable to the claims of the unnamed plaintiffs for the period prior to the entry of the district court’s order refusing to certify the case as a class action, See 414 U.S. at 543-545, 552-553. Immediately after that order was entered, and before the statute ran, the unnamed parties had filed motions to intervene. The denial of those motions was reversed by the Supreme Court. No appeal was taken from the adverse ruling on the certification question itself.’ We cannot, therefore, '' The Secretary argued that the requirements of § 405(g) had not been met by the unnamed class members in his De- fendant’s Memorandum in Support of His Motion for Sum- mary Judgment, at 6, and his Memorandum of Points and Authorities in Support of Defendant’s Motion for Reconsid- eration, at 4. ': At least the Supreme Court’s opinion made no reference to any such appeal, or to the possibility that the refusal to certify might be assigned as error at the time of an appeal from the final judgment entered by the district court. The appeal to the court of appeals in American Pipe was taken l4a be positive that an appeal from such an order would continue to tol! the statute. In this case we have no doubt that the filing of the complaint tolled the statute at leas: until the Jate of the three-judge district court decision on the merits. If that decision had expressly refused to certify the case as a class action, we think the tolling would have continued if the plaintiffs had appealed from such a ruling, but probably would not have continued if they had acquiesced. Therefore, if the district court’s failure to address the class action issue is construed as an adverse ruling, the plaintiffs’ failure to raise that issue on appeal to the Supreme Court would defeat the unnamed plaintiffs’ claims. On the other hand, if we construe the first decision on the merits as simply failing to rule upon the class issue, consistently with the analysis in American Pipe, the class claims continued to pend and the statute of limitations did not run.“ For three rea- by the class members who were denied leave to intervene rather than by the named plaintiff. There was no occasion for the Court to consider any question of tolling after the refusal to certify in a case in which the absent class members made no timely effort to assert their rights directly. “A contrary rule allowing participation only by those potential! members of the class who had earlier filed motions to intervene in the suit would deprive Rule 23 class actions of the efficiency and economy of litigation which is a principal purpose of the procedure, Potential class members would be induced to file protective motions to intervene or to join in the event that a class was later found unsuitable. In cases such as this one, where the determination to disallow the class action was made upon considerations that may vary with such subtle factors as experience with prior similar l5a sons we think this is the proper conclusion to reach in this case. First, one of the purposes of a statute of limitations is to afford a defendant fair notice of potential liability; the applications actually filed by the class members provided such notice to the Secre- tary. Second, since by hypothesis the plaintiffs’ claims were denied solely for an impermissible reason, we think it appropriate to resolve a close question in their favor. And third, the most realistic interpreta- tion of the action of the three-judge court is that the majority simply saw no need to rule on the class issue in view of its holding on the merits."* litigation or the current status of a court’s docket, a rule requiring successful anticipation of the determination of the viability of the class would breed needless duplication of mo- tions. We are convinced that the rule most consistent with federal class action procedure must be that the commencement of a class action suspends the applicable statute of limita- tions as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action. * * * The policies of ensuring essential fairness to defendants and of barring a plaintiff who ‘has slept on his rights,’ Burnett v. New York Central R. Co., 380 U.S. 424, 428, are satisfied when, as here, a named plaintiff who is found to be reprsentative of a class commences a suit and thereby notifies the defendants not only of the substantive claims being brought against them, but also of the number and generic identities of the potential plaintiffs who may participate in the judgment. Within the period set by the statute of limitations, the defendants have the essential in- formation necessary to determine both the subject matter and size of the prospective litigation whether the actual trial is conducted in the form of a class action, as a joint suit, or as a principal suit with additional intervenors.” 414 U.S. at 553-555 (footnote omitted). '*We do not imply approval of the district court’s failure to certify the class. That failure, like the inadequate com- rr rarer rr eis (i l6a We therefore hold that the district court acquired jurisdiction of the class action when the complaint was filed, and that the claims were not thereafter barred by limitations. The question we must now consider is whether the failure to comply with Rule 23 deprived the district court of the power to grant class relief. Ill Rule 23(¢)(1) provides: (1) As soon as practicable after the com- mencement of an action brought as a class ac- tion, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be,al- tered or amended before the decision on the merits. Unlike other provisions of Rule 23 which differen- tiate between class actions brought under subpara- graphs (b)(1) and (2) and those brought under subparagraph (b)(3), this requirement is applicable to all class actions. The rule unquestionably allows the district judge to exercise his discretion in deciding upon the earliest “nracticable” time to determine whether the case is to be processed as a class action; but the text cer- tainly implies, even if it does not state expressly, pliance with Rule 23 in Indianapolis School Commissioners V. Jacobs, 420 U.S. 128, created an unnecessary risk of moot- ness. Since there has never been any doubt in this proceed- ing avout the existence of a live controversy between the real adversaries, the Jacobs problem is not presented here. 17a that such a decision should be made in advance of the ruling on the merits. For the explicit permis- sion to alter or amend a certification order before decision on the merits plainly implies disapproval of such alteration or amendment thereafter. On the other hand, that degree of flexibility permitted be- fore the merits are decided also indicates that in some cases the final certification need not be made until the moment the merits are decided. From an examination of the remainder of Rule 23, it is fair to infer that the timing of the certifi- cation may well be different in (b)(3) cases than in (b)(1) or (b) (2) cases. For in the (b) (3) situ- ation it is imperative that the class members be identified early enough to enable notice to be sent to them which in turn will give them a meaningful opportunity to request exclusion from the class."’ Commenting on this provision, which in terms ap- plies only to (b)(3) classes, the Court stated in American Pipe: ‘* Subparagraph (c) (2) provides: “(2) In any class action maintained under subdivision (b) (3), the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who ean be identified through reasonable effort. The notice shall advise each member that (A) the court wi!l exclude him from the class if he so requests by a specified date; (B) the judgment, whether favorable or not, will in- clude all members who do not request exclusion; and (C) any member who does not request exclusion may, if he desires, enter an appearance through his counsel.” 18a Not until the existence and limits of the class have been established and notice of membership has been sent does a class member have any duty to take note of the suit or to exercise any responsibility with respect to it in order to profit from the eventual outcome of the case... . 414 U.S. at 552. In that situation the class determination enables the parties to assess the contours of any potential settle- ment and identifies the parties who will be bound by the judgment regardless of how the case is later decided. It avoids the kind of ‘one-way interven- tion” that would be “strikingly unfair’ in some cases “ and that the Supreme Court has plainly iden- tified as a principal concern of the draftsmen of the amended rule." See Sprogis Vv. United Air Lines, 444 F.2d 1194, 1207 (7th Cir, 1971) (dissenting opinion), cert, denied, 404 US. 991. In Sprogis this Court held that the district court had power to certify the class after a decision on the merits, but on remand the district court concluded that it would be unfair to do so, 56 F.R.D, 420 (N.D, Tl, 1972). '' As the Supreme Court explained in American Pipe, the 1966 amendment to Rule 283 which inserted subparagraph (c)(1) was specifically intended to deal with post-merits certifications: “A recurrent source of abuse under the former Rule lay in the potential that members of the claimed class could in some situations await developments in the trial or even final judgment on the merits in order to determine whether participation would be favorable to their inter- ests. If the evidence at the trial made their prospective position as actual class members appear weak, or if a judgment precluded the possibility of a favorable deter- mination, such putative members of the class who chose 19a But in the portions of the rule referring to (b) (1) and (b) (2) class actions, the notice requirement and the language describing the form of the judgment are significantly different. The rule does not man- date advance notice to the absent class members in all such cases; the rule does not provide that they be given an opportunity to request exclusion fiom the class; '* and the language of subparagraph (c) (3) would seem to permit the entry of a single order determining both the merits and the identity of the members of the class."’ Certainly there is nothing not to intervene or join as parties would not be bound by the judgment, This situation-—the potential for so- called ‘one-way intervention’—aroused considerable crit- icism upon the ground that it was unfair to allow mem- bers of a class to benefit from a favorable judgment without subjecting themselves to the binding effect of an unfavorable one, The 1966 amendments were de- signed, in part, specifically to mend this perceived defect in the former Rule and to assure that members of the class would be identified before trial on the merits and would be bound by all subsequent orders and judg- ments.” 414 U.S, at 547 (footnote omitted) ‘See Airline Stewards v, American Airlines, Ine., 490 F.2d 686, 642 (7th Cir, 1973). ' Subparagraph (c) (8) provides: “(3) The judgment in an action maintained as a class action under subdivision (b) (1) or (b) (2), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subdivision (b) (3), whether or not favorable to the class, shall include and specify or describe those to 20a in the rule expressly depriving the district court of power to enter such an order, This consideration of the text of the rule leads us to three conclusions, none of which is decisive in this “se. First, we are persuaded that the order ulti- mately entered by the district court on November 15, 1974, which purports simultaneously to define the class and to adjudicate the merits, would have been an acceptable judgment if it had been entered promptly after the action was commenced. Second, we do not think that mere delay in the entry of an otherwise acceptable order—assuming no resultant prejudice—would deprive the court of the power to enter such order even though the delay was incon- sistent with the command to act “as soon as prac- ticable.” Third, in this case when the three-judge district court entered its original order on the mer- its, it plainly did not comply with Rule 23. Not only did it fail to reach the class issue as soon as prac- ticable, as required by subparagraph (c) (1), but its judgment also omitted the description of the class member's as required by subparagraph (c) (8)." These preliminary conclusions lead us to the question ——— whom the notice provided in subdivision (c)(2) was directed, and who have not requested exclusion, and whom the court finds to be members of the class,” “It would, of course, be possible to interpret the district court's omission in reference to the class issues as a deter- mination that the case should wef be maintained us a class action, As noted above, however, we think it more reason. able to conclude that the district court simply did not decide the class question, 2la whether the court’s power simultaneously to decided the merits and to certify the case as a class action survived the entry of the original erroneous judg- ment and the subsequent appeal. We have concluded that mere delay in making a class certification, even though contrary to the man- date to act as soon as practicable, does not deprive the district court of the power to enter an otherwise proper order, Nor do we believe that the entry of an erroneous judgment, subsequently vacated on ap- peal, necessarily terminated the court’s power to en- tertain a class action, In this case the delay was ag- gravated by the error, but, if we can confine inquiry to the question whether the court had power to grant class relief after the Supreme Court had decided the merits, we are satisfied that such power survived the violation of the rule. Cf. Sprogis v. United Air Lines, 444 F.2d 1194, 1201-1202 (7th Cir, 1971)." We hold therefore that the district court did not ex- ceed its jurisdiction by granting relief to the class on November 15, 1974. It may nevertheless have been reversible error to grant such relief at that time. We turn to that question, ‘Our holding is consistent with this court's disposition of the class issues in Burns Vv. Elrod, 509 F.2d 1133, 1186-1137 (7th Cir, 1975). In that case, as in this, the district court dismissed the complaint without addressing the question whether the case should be maintained as a class action, This court reversed, holding that the complaint was sufficient, and directed the district court to consider the class issues upon remand, 22a IV We start by noting that the prerequisites to a class action deseribed in Rule 23(a) are clearly met in this case and that the allegations of the complaint satisfy the terms of subparagraph (b)(2). We have no doubt that a timely decision of the issue would have resulted in a certification that the case could be maintained as a class action,” It is also clear that reversal would almost certainly be required if this were a class action maintained under subdivision (b)(3) of the rule. We read the Supreme Court’s recent opinions in Lisen,” and Of course, the district court might have certified a amaller class—-perhaps just the applicants within the district —but we are not confronted by any issue concerning the size of the class, Whether there shall be a class certification is of course a question different from what class should be certi- fied, “In Bisen Vv. Carlisle & Jaequelin, 417 U.S. 156, the Court condemned a procedure whereby a preliminary inquiry into the merits would precede the Rule 23(¢) (1) determination, In language which indicates that certification after a final decision on the merits is equally inappropriate, the Court concluded: “We find nothing in either the languaye or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class ae- tion, Indeed, such a procedure contravenes the Rule by illowing a representative plaintiff to secure the benefits of a class action without first satisfying the requirements for it. He is thereby allowed to obtain a determination on the merits of the claims advanced on behalf of the class without any assurance that a class action mav he maintained, This procedure is directly contrary to the American Pipe” as rather plainly requiring that conclusion, But in FHisen the court carefully noted that it was there concerned only with the notice re- quirement applicable to class actions under subdivi- sion (b)(3), a requirement which is inapplicable to class actions for injunctive or declaratory relief under subdivision (b)(2).° That note implies that command of subdivision (¢) (1) that the court determine whether a suit denominated a class action may be main- tained as such ‘[a]s soon as practicable after the com- mencement of [the} action... 0" ' See footnote 14 supra; Cf, Perite v. Liberty Loan Cor- poration, No, 74-1667 (7th Cir., Sept, 3, 1975). "The Court's footnote 14 reads as follows: “We ar. concerned here only with the notice require- ments of subdivision (c) (2), which are applicable to class actions maintained under subdivision (b) (3), By its terms subdivision (c) (2) is inapplicable to class ac- tions for injunctive or declaratory relief maintained un- der subdivision (b) (2), Petitioner's effort to qualify his suit as a class action under subdivisions (b)(1) and (b) (2) was rejected by the Court of Appeals, See n, 4, supra,” In Bijeol v. Benson, No, 75-1024, April 15, 1975, slip op. at p. 5 n. 3, we sugyested that this footnote in the Supreme Court’s opinion in Fisen may require a reexamination of this court's holding in Sehrader v. Selective Service System Local Board No, 76 of Wisconsin, 470 F.2d 73, 75 (7th Cir. 1972), that a judgment in a (b) (2) cless action is not binding on the defendant unless prior notice has been viven to all mem- bers of the class, It is not necessary to reexamine that hold- ing in this case, but it is appropriate to identify the differ- ence between the question whether such » judgment is bind- ing on the defendant and the question whether such a jude. ment ia binding on a member of the class, With that distinetion in mind, we might observe that the Supreme Court's analysis 24a it may be appropriate to examine the reasons for the rule before interpreting it as mandating auto- matie reversal in a (b)(1) or (b)(2) case, The rule is largely concerned with the problem of one-way intervention, If unnamed members of the class may await the outcome on the merits before deciding whether to be excluded from the class, they will receive the benefits of a favorable judgment but not the burden of being bound by an unfavorable judgment. The precedential effect of the acverse judgment in the class action would be a hurdle to overcome, but not necessarily an insurmountable obstacle because the same issue might be appraised differently in a different forum. Moreover, succes- sive suits by different members of the class would defeat the purpose of the rule to eliminate the judi- cial waste involved in processing repetitious litiga- tion of the same issue. There is also a risk that the failure to certify may result in a dismissal of an entire case if the claim of the named plaintiff should become moot.” Finally, the failure to certify may make it impossible for the parties to conduct mean- ineful settlement negotiations because of uncertainty with respect to both the magnitude of the contingent liability and the burdens of going forward with a in the Blonder-Tongue case, discussed in the text, infra, may provide an independent reason for reexamining the holding in Schrader, Sec Roard of School Commiasioner of the City of Indian- apolia Vv. Jacoba, 420 U.S. 128, No such problem is presented by this case, 25a trial. Without doubt, orderly class action procedure mandates compliance with subparagraph (c) (1). On the other hand, procedural error does not war- rant reversal unless it affects the substantial rights of the parties. 28 U.S.C. $2111. If our holding on the statute of limitations issue is correct, all of the unnamed members of the plaintiff class still retain their right to bring an independent action for the relief already ordered by the district court. And if we are correct in our holding that a class action may be brought to enforce claims arising under the Social Security Act, a reversal of the class aspect of the district court order would no doubt be followed im- mediately by a new class action to be brought by a different named plaintiff. At least there would be no legal objection to such an action. We know of no de- fense which the Secretary could raise in such a pro- ceeding that was not available in the district court in this case after the remand by the Supreme Court, or which was not argued before us on this appeal. As a practical matter, it is difficult to identify any substantial rights of the parties that are likely to be affected by the difference between class relief in this case and class relief in a case that would presumably be filed tomorrow if this one were to be reversed. All that appears to be at stake is the possibility that the Secretary may benefit from a combination of past illegal acts and a possible future lack of diligence by potential new class representatives. The policies of avoiding multiple litigation, and providing an effective mechanism for the enforce- 26a ment of relatively small claims, favor affirmance. On the other hand, the policy underlying the doctrine of mutuality of estoppel and the policy of encovraging the settlement of class actions favor strict adherence to Rule 23’s procedural requirements. But these poli- cies carry less than their usual weight in this case. As the Supreme Court pointed out in Blonder- Tongue v, University Foundation, 402 U.S, 313, 320- 327, the doctrine of mutuality of estoppel has been modified significantly in recent years. Under the rea- soning of Justice Traynor’s famous opinion in Bern- hard vy. The Bank of America National Trust and Savings, 122 P. 2d 892 (Calif. 1942), from which the Court quoted with approval in Blonder-Tongue, it is at least doubtful that the Secretary could reliti- gate the merits of the common question of law raised in this case even if it had not been brought as a class action. Certainly it would be futile for him to do so after the decision of the United States Supreme Court. From the standpoint of the defendant—as- suming always that we have properly concluded that the statute of limitations is tolled and that a class action is maintainable—there seems to be little dif- ference between a class determination after the rul- ing on the merits and a test case brought by an in- dividual litigant followed promptly by a class action if the individual should prevail.” ** See Judge Gibbons’ thoughtful analysis of the compara- tive significance of a test case and a judgment binding on the class in Katz v. Carte Blanche Corp., 496 F.2d 747, 758-762 (2rd Cir. 1974). 27a {f the district court had not committed error when it first addvessed the merits, the Secretary would face the same judgment that he now asks us to re- verse. Since the applications of the members of the class gave him notice of the magnitude of the con- tingent liability, and since he must have recognized the substantial character of the constitutional issue raised by plaintiffs,“ he has not been prejudiced by the fact that a correct judgment was not entered at an earlier date. From the standpoint of the plaintiffs, who have a clear entitlement to insurance benefits for which pre- miums have been paid by disabled wage earners, it seems to us that there would be greater injustice in permitting the Government to avoid its obligation to provide equal treatment to similarly situated bene- ficiaries because of a procedural error committed by the district court than in allowing absent members of the class to become formal parties to the judgment long after their doubtful posture in the case should have been clarified. Similarly, the rule’s purpose to facilitate settle- ment has little if any application to this case. For the Secretary had an unquestioned obligation to ap- ply the statutory exclusion until such time as it had been authoritively held unconstitutional. Since the “8 Not only was the constitutional claim upheld by eight members of the Supreme Court, but previously Judges Tuttle, Wisdom and Fairchild had all expressed the opinion that it was meritorious. See Beaty Vv. Weinberger, 478 F.2d 300 (5th Cir. 1973), and Jiminez Vv. Richardson, 353 F.Supp. 1356, 1362 (N.D. Ill. 1.73) (dissenting opinion). 28a issue on the merits was not one subject to compro- mise, the concern of Rule 23 with settlement should not control our decision. In sum, although we recognize the salutory policy considerations underlying subparagraph (c)(1) and the clear admonition by the Supreme Court to en- force the rule in cases maintained under subpara- graph (b)(3) and, no doubt, in most cases main- tained under (b)(1) or (b)(2), as well, we are persuaded that the rule contemplates some flexibility in its enforcement and that in this case the district court class determination, although untimely, was not erroneous. V Two questions remain. The Secretary argues (1) that the doctrine of sovereign immunity precludes re- covery, and (2) that retroactive relief may not be awarded for the period prior to the date of the Supreme Court’s decision holding the statutory ex- clusion unconstitutional. We think both these argu- ments are adequately met by $ 405(g) of the Act which authorizes each member of the plaintiff class to commence a civil action to recover benefits wrong- fully withheld. That section operates as a waiver of sovereign immunity, and since we have held that there has been a timely assertion of the claims of the unnamed, as well as the named, plaintiffs, they are entitled to the benefit of the rule first announced by the Supreme Court in this litigation. The Secretary nevertheless argues that, on the basis of the test set forth in Chevron Oil Co. v. 29a Huson, 404 U.S. 97, the Supreme Court’s opinion should have only a prospective application.” In Chevron Oil, the Court considered whether its earlier decision in Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, which held that the Outer Continental Shelf Lands Act does not make ad- miralty law applicable to actions for personal in- juries suffered on off-shore platforms, should be ap- plied retroactively so as to bar Huson’s claims, The Court set forth the following test: In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be ap- plied nonretroactively must establish a new prin- ciple of law, either by overruling clear past prec- edent on which litigants may have relied, see, e.g., Hanover Shoe vy. United Shoe Machinery Corp., supra, at 496, or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, ¢.g., Allen v. State Board of Elections, supra, at 572. Second, it has been stressed that “we must ... weigh the merits and demerits in each case by looking to the prior histery cf the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter vy. Walker, supra, at 629, Finally, we have weighed the inequity imposed by retroactive application, for “{w here a decision of this Court could pro- ** This issue of the retroactivity effect of a decision holding a portion of the Social Security Act unconstitutional was briefed and argued, but not reached, in Weinberger Vv. Salfi, supra. 30a duce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘injustice or hardship’ by a holding of nonretroactivity.” Cipriano v. City of Houma, supra, at 706. 404 U.S. at 106-107. In Chevron Oil, the Court found that the Rodrigue decision was not only a case of first impression but that it also in fact had overruled clear past prece- dent. The Court then looked to the purpose which underlay the absorption of state law as federal law in the Lands Act, the desire “to aid injured employ- ees by affording them comprehensive and familiar remedies,” and concluded that a retroactive applica- tion of Rodrigue would defeat this purpos. Finally, the Court concluded that a retroactive application would produce “substantial inequitable results” in that it would deny Huson his right to a day in court. 404 U.S. at 108. Applying these factors to the instant case, how- ever, compels us to reach the opposite conclusion; we hold that the class members” are entitled to the retroactive application of the Supreme Court’s deci- sion. The Secretary argues correctly that the Jimenez decision established a new principle of law insofar as it was the first Supreme Court ruling on the consti- tutionality of § 216(h) (3) (B) of the Social Security ” As noted above, the Secretary has complied with the district court order requiring retroactive payments for the named plaintiffs back to the date of their original application. 3la Act. Prior to that time, although there was substan- tial disagreement among the lower courts on the validity of the Act’s provisions dealing with illegit- imate children,” the Secretary was bound to admin- ister the Act as written. Thus, the Secretary was re- quired to act under the assumption that this portion was constitutional until ordered to comply with a contrary decision. Although the first of the Chevron factors suggests a nonretroactive result, the second and third over- whelmingly indicate the correctness of the district court’s award. The Supreme Court’s decision in Jimenez established that the discrimination in § 216 (h)(3)(B) against illegitimate children born after the disability of their parent was constitutionally repugnant. Surely a retrospective application of this decision would only further and not retard its opera- tion. For, the Jimenez decision holds, these children have been wrongfully denied these insurance benefits from the date of their applications. Similarly, we find that the purposes behind the entire children’s insurance benefits program support the award of retroactive benefits in this case, As the Court explained in Jimenez, “the purpose of the con- — ‘\ See Watts v. Veneman, 334 F.Supp. 482 (D.D.C. 1971), aff'd as modified, 476 F.2d 529 (D.C. Cir. 1973); Perry V. Richardson, 440 F.2d 677 (6th Cir. 1971); Barnes V. Richard- son, 342 F.Supp. 435 (S.D.N.Y. 1972); Norton Vv. Weinberger, 364 F.Supp. 1117 (D. Md. 1973), vacated, 418 U.S. 902; Beaty Vv. Weinberger, 478 F.2d 300 (5th Cir. 1973), aff'd, 418 U.S. 901: Severance V. Weinberger, 362 F.Supp. 1348 (D.D.C. 1973). 32a a wage earner who has lost his earning power. ...” 417 U.S. at 633. The denial of these benefits by the Secretary necessarily required these plaintiffs and their family to consume other assets in order to attempt to maintain their standard of living. During his working career, plaintiffs’ father paid a portion of his wages into the Social Security program with the reasonable expectation that, if he should ever become disabled, his dependents would receive these insurance benefits. Surely the retro- spective payment of such benefits furthers, rather than impedes, the effectuation of the purposes of the statute. The provisions of the Act itself support our conclu- sion that retroactive payments further the statutory purpose. For § 204 of the Act, 42 U.S.C. § 404,” provides a specific authorization for the recovery of underpayments; there is no requirement that such denials have been willful; any mistaken denial will 32 **(a) Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, as follows: * * * “(2) With respect to payment to a person of less than the correct amount, the Secretary shall make payment of the balance of the amount due such underpaid person, or, if such person dies before payments are completed or before negotiating one or more checks representing cor- rect payments, disposition of the amount due shall be made in accordance with subsection (d) of this section.” 33a give rise to retroactive recovery. Thus, Congress in- tended that Social Security beneficiaries receive the full and correct amount of their entitlement, even if this requires payments to be made long after the period of entitlement.” Finally, in applying the third Chevron factor, it is important to note that it is the Secretary who must convince us that a retroactive application of Jimenez would produce “substantial inequitable re- °° The Secretary relies on Rothstein v. Wyman, 467 F.2d 296 (2a C 1972), cert. denied, 411 U.S. 921, where the court held that retroactive payments by the State of New York of improperly withheld welfare benefits need not be made. We believe the Rothstein decision is inapposite here for sev- eral reasons. First, the court emphasized that a major factor in its refusal to order such repayments was the existence of a “scheme of cooperative federalism” that underlay the match- ing grant program and its recognition that, “It is not the business of the federal courts needlessly to exacerbate those problems fof federalism].” 467 F.2d at 232. Of course, no such federalism consideration can enter into our decision in this case. Second, the Rothstein court found that Congress had not spoken on the question of court-ordered retroactive payments. Id. at 234. Here, however, in enacting 42 U.S.C. § 404, supra n. 26, Congress has approved retroactive payment orders. Finally, the Second Circuit noted that the entire purpose of the welfare payments was to swiftly provide sustenance to impoverished people, and that “As time goes by... retro- active payments become compensatory rather than remedial.” Id. at 235. The Social Security insurance program is not tied to individualized need, however. The only eligibility require- ments these plaintiffs must meet deal with their relation- ship to the disabled insured parent. Consequently, satisfying current needs of the beneficiary is only part of the purpose of the Act. By contributing to the trust fund, plaintiffs’ father established the eligibility of his children to receive the child’s benefits regardless of their need. 34a sults.” Thus, unless the balance of the equities clear- ly tips in the Secretary’s favor, the general rule of retroactivity must be applied. The Secretary has not convinced us that such inequities will result from such an application of Jiminez. On the one hand we have the substantial equities in favor of paying the benefits to the children who were admittedly entitled to them but for the unconstitutional provision in the statute. On the other, the Secretary argues, making such lump sum payments might affect the abiliiy of the Trust Fund to make current payments to indi- viduals who are now eligible for benefits. We find this argument unconvincing. As the Supreme Court said in Jiminez, “[T]here is no evidence supporting the contention that to allow illegitimates in the clas- sification of appellants to receive benefits would sig- nificantly impair the federal Social Security trust fund and necessitate a reduction in the scope of per- sons benefited by the Act.” 417 U.S. at 633." Thus, applying the three factors set forth in Chev- ron Oil, we conclude that the district court did not err in ordering the Secretary to make payments to the class members back to the date of the filing of ** Harry Ballantyne, an actuary for the Office of the Actu- ary of the Social Security Administration, estimated that if Jimenez were applied retroactively it would result in 7,000 persons receiving benefits at a cost of $5,000,000. Affidavit in Support of Motion for Stay Pending Appeal. Over $5] billion was paid out in old age, survivors, disability and health insur- ance by the Social Security Administration in fiscal year 1973. Dept. of Health, Education & Welfare, Social Security Bulle- tin, November, 1974. 35a their original applications for benefits.” The judg- ment of the district court is, therefore, AFFIRMED. A true Copy: Clerk of the United States Court of Appeals for the Seventh Circuit ’> Our conclusion with respect to retroactivity is buttressed by the Supreme Court’s summary affirmtance in Richardson V. Griffin, 409 U.S. 1069. In that case a three-judge district court had found a portion of the Social Security Act uncon- stitutional and ordered payments of improperly withheld benefits. See 346 F.Supp. 1226, 1237 (D. Md. 1972). 36a APPENDIX B UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Chicago, Illinois 60604 SEPTEMBER 12, 1975 Before Hon. THOMAS F. MCALLISTER, Senior Circuit Judge * Hon. JOHN PAUL STEVENS, Circuit Judge Hon. ROBERT A. SPRECHER, Circuit Judge No. 75-1046 EUGENIO and ALICIA JIMENEZ, by their father and next friend, RAMON JIMENEZ, PLAINTIFFS-APPELLEES Vs. CASPAR WEINBERGER, Secretary of Health, Education and Welfare, DEFENDANT-APPELLANT * Senior Circuit Judge Thomas F. McAllister of the United ‘ States Court of Appeals for the Sixth Circuit is sitting by designation. 37a Appeal from the United States District Court for the Northern District of Illinois Eastern Division No. 71 C 1436 2ICHARD B. AUSTIN, Judge OPINION BY JUDGE STEVENS This cause came on to be heard on the transcript of the record from the United States District Court for the Northern District of Illinois, Eastern Divi- sion, and was argued by counsel. On consideration whereof, it is ordered and ad- judged by this court that the judgment of the said District Court in this cause appealed from be, and the same is hereby, AFFIRMED, with costs, in ac- cordance with the opinion of this Court filed this date. 38a APPENDIX C UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Chicago, Illinois 60604 NOVEMBER 7, 1975 Before Hon. THOMAS F. MCALLISTER, Senior Circuit Judge Hon. JOHN PAUL STEVENS, Circuit Judge Hon. ROBERT A. SPRECHER, Circuit Judge No. 75-1046 EUGENIO and ALICIA JIMENEZ, ETC.., PLAIN TIFFS-APPELLEES vs. CASPAR WEINBERGER, Secretary of Health, Education and Welfare, DEFENDANT-APPELLANT Appeal from the United States District Court for the Northern District of Illinois Eastern Division (71 € 1436) 39a On consideration of the petition for rehearing filed in the above-entitled cause, IT IS HEREBY ORDERED that the petition for rehearing in the above-entitled appeal be, and the same is hereby, DENIED. 40a APPENDIX D ORDERS ENTERED NOVEMBER 19, 1974, AND DEFENDANT'S MOTION FOR RECONSIDERATION DENIED DECEMBER 3, 1974 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION No. 71 C 1436 EUGENIO and ALICIA JIMENEZ, by their father and next friend, RAMON JIMENEZ, individually and on behalf of all others similarly situated, PLAINTIFFS VU. CASPAR WEINBERGER, Secretary of Health, Education and Welfare, DEFENDANT JUDGMENT AND ORDER This matter coming on for hearing pursuant to an Order of the Supreme Court of the United States (Jimenez v. Weinberger, No. 72-6609, June 19, 1974) remanding the cause to this Court, and all parties having received due notice and being represented by counsel, and the Court having been advised in the premises; the Defendant Secretary having found the Plaintiffs Eugenio and Alicia Jimenez eligible to re- ceive benefits on the Social Security account of their father Ramon Jimenez, and this Court having found that the Plaintiffs were eligible for those benefits from the date of their original application, August 4la 21, 1969; there being no genuine issue as to any material fact, this Court hereby grants Plaintiffs’ motion for summary judgment; and having deter- mined that the provisions of this Decree are neces- sary to afford the named Plaintiffs the full legal and equitable relief to which they are entitled, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT: 1. Section 216(h)(3)(b) of the Social Security Act (42 U.S.C. § 416(h) (3) (b)) is declared in vio- lation of the due process clause of the Fifth Amend- ment to the Constitution of the United States and therefore invalid insofar as it requires illegitimate children of insured individuals applying for child’s Social Security benefits to have met, with their in- sured fathers, the eligibility requirements set forth therein, prior to their parents’ becoming disabled. Accordingly, the following language in section 216 (h)(3)(b) is hereby declared null and void: “and such acknowledgement, court decree, or court order was made before such insured in- dividual’s most recent period of disability be- OOS 2 “and was living with or contributing to the sup- port of that applicant at the time such period of disability began;” 2. Defendant, his agents, employees, and succes- sors are ordered to promulgate within 60 days new regulations, provisions of the Social Security Hand- book and Claims Manual, and other relevant and 42a necessary rules and regulations, instructions and directives (including necessary changes in computer programs) consonant with the decision invalidating portions of 42 U.S.C. § 416(h) (3) (b); 3. Plaintiffs Eugenio and Alicia Jimenez are en- titled to receive child’s Social Security benefits on the account of their father Ramon Jimenez, from the date of their application, August 21, 1969, pursuant to 42 U.S.C. § 416(h) (3) (b) as interpreted in para- graph 1; 4. Defendant, his agents, employees, and succes- sors are hereby ordered to pay to Plaintiffs Eugenio and Alicia Jimenez, by November 27, 1974, all monies due to them on their father Ramon’s Social Security account, from the date of their original ap- plication, August 21, 1969, to the present, and hence- forth to pay to them the regular monthly benefits to which they are entitled in accordance with this order; 5. This Court finds no just reason for delay of enforcement of this order. ‘s/ Richard B. Austin Judge, United States District Court 43a APPENDIX E ORDERS ENTERED NOVEMBER 19, 1974, AND DEFENDANT’S MOTION FOR RECONSIDERATION DENIED DECEMBER 3, 1974 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION No. 71 C 1436 EUGENIO and ALICIA JIMENEZ, by their father and next friend, RAMON JIMENEZ, individually and on behalf of all others similarly situated, PLAINTIFFS Vv. CASPAR WEINBERGER, Secretary of Health, Education and Welfare, DEFENDANT ORDER This matter coming on for hearing pursuant to an Order of the Supreme Court of the United States (Jimenez v. Weinberger, No. 72-6609, June 19, 1974) remanding this cause and pursuant to Motion of the Plaintiffs for Entry of an Order, and to this Court’s Judgment and Order, and all parties having received due notice and being represented by counsel, and the Court having considered plaintiffs’ Motions and hav- ing determined that the several provisions of this Decree are necessary to afford full legal and equit- able relief; IT IS HEREBY ORDERED AND DECREED THAT: eee 44a 1. Defendant, his agents, employees, and succes- sors are ordered to, within sixty (60) days of the Court’s entry of the Judgment and Order and this Order, take reasonable measures to ascertain, and give notice of the resultant change in the Social Security Act to, all those applicants for Social Secur- ity benefits who have been denied benefits solely by reason of the provisions of the Act now declared unconstitutional, together with an explanation of how they should proceed in order to obtain the benefits; 2 Defendant, his agents, employees, and succes- sors are ordered to provide benefits to all those de- nied benefits since the date of the filing of this action solely by reason of that portion of the Act declared unconstitutional. Such benefits shall cover the period from which said persons would originally have been entitled but for the provisions invalidated herein, and payment of said benefits and ongoing monthly bene- fits to all eligible persons shall begin forthwith; 8 Defendant is further ordered to file an affidavit with this Court six months from the date of filing of this Order, attesting to the complete accomplish- ment of the duties ordered herein; 4. This Court retains jurisdiction of this cause until all the relief ordered herein has been effec- tuated. s/ Richard B. Austin Judge, United States District Court W U. S&S. GOVERNMENT PRINTING OFFICE 1976 213597 1986 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1682%3A1. Public record. Not legal advice.