# Appendix — Allstate Insurance v. Baksalary > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0102%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1985 - **Citation:** 469 U.S. 1146 ## Text b S FILED: 64-765" ;. No. , NOY 14 {964 — ALEXAND STEVAS IN THE C — - Supreme Court of the United States October Term, 1984 ALLSTATE INS. COMPANY, ARGONAUT INS. COMPANY, HARLEYSVILLE INS. COMPANY, OHIO CASUALTY GROUP OF INS. COMPANIES, ROYAL INS. COMPANY, SUN COMPANY, INC., TRAVELERS INS. COMPANY and WAUSAU INS. COMPANIES, Appellants/Objecting Members of Defendant Class, VS. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, CHARLES SAMUEL, Individually and on behalf of ail others similarly situated, Appellees/Plaintiffs, and PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN'S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS ASSOC. INS. COMPANY, AMERICAN MUTUAL LIABILITY INS. COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORP. and all other insurance carriers and/or self-insured employers similarly situated, Defendants (Appellees). On APPEAL FROM THE UNITED STATES District CouRT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. APPENDIX TO JURISDICTIONAL STATEMENT RICHARD D. HARBURG SWARTZ, CAMPBELL & DETWEILER 1700 Land Title Building Philadelphia, Pennsylvania 19110 Phone: (215) 564-5190 Attorneys for Appellants Batavia Times Publishing Co. ad Edward W. Shannon Philadelphia. Pa. (215) 232-8181 ) 3600 TABLE OF CONTENTS. Documents Date Page Final Opinion and Order co eee la Order (Amendment) ee 33a Opinion on Merits and Order for Submissions | Perr 36a Notice of Appeal— Circuit Court 8/20/84 ....... 84a Notice of Appeal— Supreme Court ak. oe 87a Memorandum and Interim Order ee 9la Joint Motion and Proposed Consent Decree : Gee ss seks 102a Order (Preliminary Approval) IN so dia'e' 13la Appearance (Objecting Defendants) 2 ere 135a Statement/Objections (Objecting Defendants) i. eee 137a Appearance (Objecting Defendants) if) 144a Appearance (Objecting Defendants) Spee 146a Order—Circuit Court Stay of Proceedings 10/29/84 ....... 148a Designation of Corporate Relationships 150a la APPENDIX Final Opinion and Order IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, Plaintiffs, v. PAUL. J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, TH SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. Filed July 30, 1984; MICHAEL E. KUNZ, Clerk. By (Illegible) Dep. Clerk. Before: ADAMS, Circuit Judge, * GREEN and POLLAK, District Judges. * Honorable Arlin M. Adams, United States Circuit Judge, United States Court of Appeals for the Third Circuit, sitting by designation. 2a Final Opinion and Order. OPINION Per Curiam July 30, 1984 I. INTRODUCTION We have previously resolved the central constitutional issues in this case. Baksalary v. Smith, 579 F. Supp. 218 (E.D. Pa. 1984). We now address the question of what remedy our prior holdings require or permit. The named parties to this bilateral class action have submitted for approval a proposed consent decree which undertakes to resolve all but one of the remaining remedial issues. The proposed consent decree accompanies this Opinion as an appendix. The remedial issue not dealt with by the consent decree has been submitted to the court to be determined as a litigated judgment. For reasons developed at some length in section II hereof, we have determined that the proposed consent decree represents a fair, adequate, and reasonable resolution of the remedial questions which it addresses. The accompanying Order therefore approves it pursuant to Federal Rule of Civil Procedure 23(e). Further, for reasons elaborated in section III, the accompanying Order resolves the single remaining litigated remedial issue. Our previous Opinion has described in detail the facts and procedural history of this litigation through February 1, 1984. See Baksalary, 579 F. Supp. at 219- | 224. In this section, we review that history briefly before describing in detail the issues now before the court. This litigation commenced in 1976. In it, plaintiffs successfully challenged the constitutionality of the automatic supersedeas provision of section 413(a) of the 3a Final Opinion and Order. Pennsylvania Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, §774 (Purdon Supp. 1983).! This action has proceeded before a three-judge district court convened pursuant to 28 U.S.C. §2281 (repealed). (That court initially consisted of Circuit Judge Adams and District Judges Fogel and Green. After Judge Fogel left the bench Judge Pollak replaced him on the three-judge court.) Plaintiff and defendant classes were certified pursuant to Federal Rule of Civil Procedure 23(b)(2). The plaintiffs’ class includes ‘‘all persons who have been or will be receiving benefits pursuant to the Pennsylvania Workmen’s Compensation Act and who have had or will have such benefits terminated, suspended, reduced or otherwise deprived without advance notice and opportunity for a prior evidentiary hearing.’’ Order of Judge Fogel (March 27, 1978). The defendants’ class includes ‘‘all insurance companies, mutual associations and employment establishments authorized to insure the payment of Pennsylvania Workmen’s Compensation benefits who have acted, or will act, to terminate, 'The term ‘‘automatic supersedeas provision’ has been used in this litigation to refer to the first sentence of Pa. Stat. Ann. tit. 77, §774 (Purdon Supp. 1983). That sentence provides: The filing of a petition to terminate or modify a notice of compensation payable or a compensation agreement or award as provided in this section shall operate as a supersedeas, and shall suspend the payment of compensation fixed in the agreement or by the award, in whole or to such extent as the facts alleged in the petition would, if proved, require only when such petition alleges that the employe has returned to work at his prior or increased earnings or where the petition alleges that the employe has fully recovered and is accompanied by an affidavit of a physician on a form prescribed by the [Bureau of Workers’ Compensation] to that effect which is based upon an examination made within fifteen days of the filing of the petition. 4a Final Opinion and Order. suspend, reduce, or otherwise deprive benefits to previously eligible claimants without advance notice and opportunity for a prior evidentiary hearing ... .’’ Jd. Discovery was extensive and took years to complete. After hearing and argument on April 7, 1983, we filed an Opinion, on February 1, 1984, which concluded that operation of the automatic supersedeas authorized by section 413 of the Pennsylvania Workmen's Cempensation Act involves conduct reasonably attributable to the state and that section 413 does not accord worker’s compensation recipients due process. Thus, plaintiffs have made out a violation of 42 U.S.C. $1983 (Supp. V 1981). Plaintiffs are entitled to entry of a judgment declaring the unconstitutionality of the automatic supersedeas provision of section 413. Baksalary, 579 F. Supp. at 233.’ After having decided the legal and factual issues leading to a determination of liability, we found ourselves with little guidance from the parties as to the appropriate form of relief. The parties had concentrated their legal arguments on the question of the automatic supersedeas -provision’s constitutionality and had not given any extended treatment to the remedy which a finding of unconstitutionality would require or permit. Accordingly, we did not accompany the February 1 Opinions with a remedial Order. Instead, we ordered the parties to submit a joint proposed form of remedial order, or alternative proposed remedial orders, by February 15, 1984. * Judge Adams’ separate Opinion, which Judges Green and Pollak joined, reached the same conclusion. 579 F. Supp. at 237. 5a Final Opinion and Order. On February 14, 1984, counsel for plaintiffs informed Judge Poilak’s chambers that the parties had not agreed on a joint proposed form of order, but that the court would receive several alternative remedial requests from the various named parties. On receipt of this information, the court established a schedule which permitted the parties fully to brief their respective positions on the remedy appropriate to this case. On February 15, 1984, eight proposed forms of remedial order were filed: one by plaintiffs, one by the Commonwealth Defendants,* two by the State Workmen's Insurance Fund (‘‘SWIF’’) and four by the School District of Philadelphia and several private insurance companies. The parties submitted initial briefs in support of their positions on March 6, 1984, and reply briefs on March 12. Upon examination of the proposed forms of order and the briefs supporting them, we determined that several of the remedial issues in dispute did not require oral argument. On March 15, 1984, we filed a Memorandum and Order which decided these remedial questions. First, we declared that any invocations of the automatic supersedeas provision after March 15, 1984, would violate the due process clause of the Fourteenth Amendment. Order, 41 (March 14, 1984). We also expressly reserved judgment on whether any invocations of the automatic supersedeas between February 1, 1984, and March 15, 1984—if in fact any had _ taken place—would be subject to a later declaration of * Throughout this litigation the parties and the court have referred to defendants Paul J. Smith, C. John Urling, William J. Sheppard, Grace M. Sloan, and their successors in their official capacities, as the “Commonwealth Defendants. "’ 6a Final Opinion and Order. invalidity. Memorandum at 4 (March 15, 1984). We also were at pains to make clear that this litigation concerned the automatic supersedeas provision of section 413(a) of the Pennsylvania Workmen's Compensation Act, and only that provision. Memorandum at 4-5; see also Baksalary, 579 F. Supp. at 233 (‘‘Invalidation of the automatic supersedeas provision does not call for invalidation of any other provision of the Workmen's Compensation Act. . .’’). The March 15 Order also considered both plaintiffs’ and defendants’ requests for injunctive relief. Plaintiffs desired immediate reinstatement of worker's compensation benefits and complete retroactive recovery for all members of the plaintiff class against whom a member of the defendant class had invoked the automatic supersedeas provision, and who had not received a final decision from a referee. Defendants, on the other hand, all took the position that this court should not award relief to any individual against whom the automatic supersedeas provision was invoked prior to the date of the final remedial order in this case. Certain defendants also requested that this court’s injunctive relief provide a procedure alternative to the automatic supersedeas provision which would permit self-insured employers and insurers to suspend worker’s compensation benefits prior to a final decision by a referee on a termination petition. We felt that oral argument on the appropriate nature and scope of injunctive relief would be helpful. But we concluded that we did not wish to hear argument on proposals that this court frame a procedure to be substituted for the automatic supersedeas we had found invalid. We stated that we Ta Final Opinion and Order. see no circumstances under which we would grant injunctive relief mandating adoption of a procedure of our selection to replace the automatic supersedeas provision. A federal court cannot enact state law. Further, we do not read the Workmen's Compensation Act to require adoption of any of the proposed alternative procedures. Memorandum at 6-7 (March 15, 1984). The March 15 Memorandur: and Order left open several broad areas of possible remedy: First, we did not resolve the dispute between plaintiffs and the Commonwealth Defendants over whether this court should grant any injunction at all covering future invocations of the automatic supersedeas provision. The Commonwealth Defendants. argued that a declaration alone sufficed. We shall refer to that question as the prospective injunction question. Second, we did not decide whether, and under what circumstances, a self-insured. employer or insurer would be ordered to resume payment of benefits to members of the plaintiff class against whom the employer or insurer had invoked the automatic supersedeas provision. We shall refer to this question as the resumption question. Third, we left undetermined the question whether, and under what circumstances, a self-insured employer or insurer would be ordered to pay retroactive benefits to members. of the plaintiff class against whom the employer or insurer had invoked the automatic supersedeas provision. We shali refer to this question as the back-benefits question. 8a Final Opinion and Order. Fourth, we did not address plaintiffs’ request for a declaration of their entitlement to recovery of reasonable attorneys’ fees pursuant to 42 U.S.C. $1988. The March 15 Order scheduled oral argument on these four issues for March 28, 1984. That date was subsequently changed to April 3. On the morning of April 3, counsel jointly advised the court that they were finally engaged in settlement discussions and those discussions appeared likely to be fruitful. Accordingly, we assented to a continuance of the argument at least for a few hours. In mid-afternoon of April 3, counsel announced on the record tentative agreement on the substance—albeit not the wording—of a _ proposed consent decree which counsel believed the named parties would ratify. Accordingly, the scheduled argument was cancelled and the court, by Order filed on April 4, 1984, established a schedule for the submission of a proposed consent decree. The schedule announced on April 4 was modified by Order of April 19. On April 27, 1984, the named parties submitted a joint motion for preliminary approval of a proposed consent decree. We suggested one amendment to the proposed decree, which the parties agreed to. By Order of May 14, 1984, we preliminarily approved the proposed consent decree, as amended, and approved transmission of notice packages to members of the plaintiff and defendant classes. The proposed consent decree purports to settle all outstanding remedial questions but one. Plaintiffs have demanded immediate reinstatement and back benefits for any member of the plaintiff class against whom a member of the defendant class may have invoked the | automatic supersedeas provision after February 1, 1984, 9a Final Opinion and Order. the date of our liability. Opinions in this matter. The named defendants represented that any named defendant who had invoked the automatic supersedeas between February 1 and March 15, the date of our declaratory Order, had done so inadvertently and had taken steps to reinstate the terminated employee with full back benefits. The named defendants felt, therefore, that they could not, on this issue, speak for other members of the defendant class who might have invoked the automatic supersedeas between February 1 and March 15 and who might have felt entitled to have done so. Therefore, the named defendants represented that they could take no position on plaintiffs’ demands for reinstatement and ' back benefits on behalf of post-February 1 pre-March 15 terminees. The parties desired to submit this question to the court for a litigated judgment. As required by Federal Rule of Civil Procedure 23(e), the named parties arranged for transmission of notice of the proposed consent decree to all known members of the plaintiff and defendant classes. These non-named class members had the opportunity to’ comment and object to the proposed settlement until June 13, 1984. Quite a number of both plaintiffs and defendants availed themselves of that opportunity. We also used the same procedure to provide non-named defendants an opportunity to respond to plaintiffs’ claims for reinstatement and back benefits on behalf of post- February 1 pre-March 15 terminees. This court held a hearing on June 18, 1984. At that hearing, several objectors made orai presentations in opposition to the proposed consent decree and counsel. for the named parties m.Je presentations in support of en 4 10a Final Opinion and Order. the proposed decree. In addition, several defendants made oral presentations in opposition to, and plaintiffs made a presentation in support of, the relief requested by plaintiffs for post-February 1 pre-March 15 terminees. In the course of the hearing, a substantial issue arose concerning the import of the proposed consent decree for a claimant’s entitlement to receive both worker’s compensation benefits and salary when the claimant has returned to work at the same or higher wage. We gave the parties until June 25 to make further submissicns on that issue. They have made such further submissions. Therefore the entire case is now before the court for a decision on the fairness of the proposed consent decree and on the propriety of the relief requested by plaintiffs for post-February 1 pre-March 15 terminees. II. FAIRNESS OF PROPOSED CONSENT DECREE A. Applicable Standards Federal Rule of Civil Procedure 23(e) provides that ‘‘[a] class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.’’ We have already approved the manner of notifying class members and we are satisfied that the parties have provided notice as suggested in their joint motion for preliminary approval of the proposed consent decree. Thus, we must now determine whether to approve the proposed compromise. In considering whether approval is appropriate, we must decide whether ‘‘the proposed settlement [is] fair, adequate and reasonable.” Girsh v. Jepson, 521 F.2d 153, lla Final Opinion and Order. 157 (3d Cir. 1975). In making that determination, the district court carries out a “fiduciary responsibility, as the guardian of the rights of the absentee class members .... Id. The determination ordinarily requires that the district court make certain findings of fact. See Girsh, 521 F.2d at 159. Typicaliy this involves scrutiny of a list of nine factors—albeit not an exclusive list—enunciated by the Court of Appeals for the Second Circuit in City of Detroit v. Grinnell Corp., 495 F.2d 448, 463 (2d Cir. 1974), and adopted by our Court of Appeals in Girsh: (1) the complexity, expense and likely duration of the litigation .. .; (2) the reaction of the class to the settlement .. .; (3) the stage of the proceedings and the amount of discovery completed .. .; (4) the risks of establishing liability ...; (5) the risks of establishing damages ...; (6) the risks of maintaining the class action through the trial . . .; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery ...; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation .... 521 F.2d at 157; cf. 3B J. Moore & J. Kennedy, Moore’s Federal Practice 423.80[4] at pp. 23-520 to 23-521 (2d ed. 1982). While we view ourselves as fiduciaries for the absent class members, and while we shall attempt to decide whether the proposed consent decree provides a fair, adequate, and reasonable settlement of this matter, we believe that this case presents a situation somewhat out of the ordinary. The named parties achieved a tentative 12a Final Opinion and Order. settlement on the very day scheduled for oral argument on certain unresolved remedial issues. We _ had determined two months earlier that invocation of the automatic supersedeas provision violated the due process clause, and we had already rejected certain requested forms of relief and granted others. In effect, the court’s only remaining tasks were to elaborate the remedial implications of our ruling on liability within the range of remedies laid out in our March 15 Memorandum. This is not the typical case where settlement evaluations require predictions of the probability that the tribunal would reach one or another substantive result; the central issues had been resolved. With these thoughts in mind, we analyze, in the light of our prior rulings in this case, the terms of the proposed consent decree and the various objections to the proposed decree which have been advanced. We have considered whether the proposed consent decree is within the range of possible remedial results flowing out of our liability opinions of February 1 and our partial remedial decision of March 15. We have found no aspects of the proposed consent decree inconsistent with those rulings and we find the proposed consent decree well within the range of reasonably expectable outcomes based upon our earlier rulings. Further, many of the objections raised to the proposed consent decree suggest relief inconsistent with our earlier rulings. We do not think that any such objection bears upon the fairness, adequacy, or reasonableness of a settlement proposed after the court has made rulings adverse to the objector’s position. We begin with a discussion of the reasons why we believe that this proposed consent decree fairly balances 13a Final Opinion and Order. the risks faced by the plaintiff class and the risks faced by the defendant class in anticipating our remedial decision. We next turn to a discussion of particular objections to the proposed consent decree. B. Evaluation of Proposed Consent Decree as Against the Range of Possible Outcomes In our view both plaintiffs and defendants faced substantial risks in the remedial stage of this litigation. The proposed settlement replaces those risks with a proposed certainty advantageous to both sides. Thus, the proposed decree gives plaintiffs a much more favorable result than the most pro-defendant result possible under our prior rulings. At the same time, the proposed decree gives defendants a much more favorable result than the most pro-plaintiff result possible under our prior rulings. So viewed, the proposed consent decree provides a fair accommodation of the parties’ extreme positions. Although this court’s Opinions of February 1, 1984, did not foreclose the possibility that our remedial decree would include injunctive relief, the single remedial provision plainly required by those Opinions was a d®claration of the invalidity of the challenged statute. See Baksalary, 579 F. Supp. at 233. We made that declaration on March 15. On March 15 we specifically adverted to the Commonwealth Defendants’ argument against any relief other than a declaration of invalidity. Memorandum at 5-6 (March 15, 1984). The Commonwealth Defendants urged the court to permit the ordinary enforcement mechanisms of the Bureau of Workers’ Compensation to implement any declaration of this court. That comity argument had a certain force. It l4a Final Opinion and Order. certainly presented plaintiffs with a substantial risk that they would receive no relief beyond that granted on March 15. In addition, plaintiffs faced the risk and delay of an appeal.‘ The appellate court might have overturned this court’s legal pronouncement of February 1 and any aspect of the relief which we might have granted. In addition, even if, in the event, plaintiffs’ position was ultimately sustained on appeal, this court, or the appellate court, might have stayed enforcement of some or all of this court’s decree pending appeal—thereby postponing, for perhaps an additional year, any effective vindication of the rights of plaintiff class members. See Baksalary, 579 F. Supp. at 224-225. Defendants also faced considerable risks in the remedial portion of this litigation. Defendants argued strongly for no recovery of back benefits, no resumption of benefits, and a prospective injunction dating from several weeks after the final remedial order in this case. For their insistence on purely prospective relief to have prevailed, defendants would have to have persuaded this court that our case met the three-factor nonretroactivity ‘ Plaintiffs also faced the possibility that there would be not one appeal but two appeals pursued concurrently. 28 U.S.C. $1253 provides, of course, that an appeal from a three-judge district court's grant (or denial) of an injunction goes to the Supreme Court. See Poe v. Gerstein, 417 U.S. 281 (1974); Oldroyd v. Kugler, 461 F.2d 535, 539 (3d Cir. 1972). But it appears that an appeal! from so much of a three- judge district court’s judgment as grants (or denies) declaratory relief goes to the court of appeals. Gerstein v. Coe, 417 U.S. 279 (1974). 15a Final Opinion and Order. test set out in Chevron Oil Company v. Huson, 404 U.S. 97 (1971).° Had we granted an immediate resumption of benefits, or had we granted back benefits, defendants stood to incur a substantial liability. In the event that defendants appealed and both this court and the appellate court denied a stay, defendants would have had to continue paying substantial amounts during the pendency of an appeal. Had the appeal been successful, defendants might then have found that the interim pay-outs to ‘It is not clear that this case presents a situation where the ordinary rule of retroactive application of constitutional decisions should not prevail. Chevron Oil prescribes a strict test for nonretroactive application: First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relief ... or by deciding an issue of first impression whose resolution was not clearly foreshadowed .... Second, it has been stressed that ‘‘we must * * * weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter v. Walker .... Finally, we have weighed the inequity imposed by retroactive application, for “[wjhere a decision of this Court could produce 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... . 404 U.S. at 106-107; see also Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 102 S. Ct. 2858, 2880 (1982). Further, it is not at all clear that we would have taken the same view of nonretroactivity as did defendants in the event that we found Chevron Oil applicable. For example, it may be plausibly argued that, even if Chevron Oil applied, it would merely proscribe retroactive relief in the form of back benefits, while permitting immediate resumption of benefits to terminees who had not received final decisions from referees. l6a Final Opinion and Order. members of the plaintiff class were, as a practical matter, unrecoverable. The proposed consent decree represents a fair, adequate, and reasonable compromise between the possible extreme results in this case. The proposed decree incorporates our earlier grant of declaratory relief. Consent Decree $4. In addition, it includes a full prospective injunction effective on the date of the decree’s final approval. Consent Decree 445-6. The decree accommodates the defendants’ risk of substantial retroactive liability by providing for resumption of benefits and the award of back benefits only to those whose claims have not yet been finally adjudicated by a referee and who receive favorable rulings at a “special supersedeas hearing’’ to be conducted within sixty days of the entry of the consent decree. Consent Decree 4{7- 14.6 A claimant would remain without benefits if a referee determined at the time of the special supersedeas hearing that the self-insured employer or insurer who had invoked the automatic supersedeas provision against him would have qualified for a non-automatic supersedeas on the evidence presented at the special hearing. Consent Decree 4415-18; see also Pa. Stat. Ann. tit. 77, $774 (Purdon Supp. 1983) (second sentence); 34 Pa. Admin. Code $$131431-131.33 (Shephard’s 1982). The proposed consent decree accommodates plaintiffs’ interests in two ways. First, it provides for some resumption of benefits with back benefits after a result favorable to the claimant at the special supersedeas hearing, or, if a hearing is not held or no decision is * No such hearing is required if all evidence has been presented at a final hearing on the merits. Consent Decree 419. ee le hh a ina a ——— ewer. Dt etl Te 2 im Te Te 17a Final Opinion and Order. rendered, after sixty-seven days. Consent Decree 414. Second, the plaintiffs avoid the risks entailed in an appeal from the court’s liability decision by one or more of the named defendants. Consent Decree 443, 29. The proposed consent decree also settles the question of attorneys’ fees under section 1988 without litigation, Consent Decree 4426-28, a result much to the benefit of all parties. Moreover, plaintiffs’ counsel represented at the fairness hearing that he had consented to a cap on plaintiffs’ fee award under the consent decree of $300,000 for eight years’ work. The burden of paying the award is to be allocated among nine hundred defendants (pursuant to a formula which would require of most defendants only a very modest contribution). We therefore find that the proposed consent decree represents a fair, adequate, and reasonable settlement of the remaining remedial issues in this case viewed from the perspective of the range of reasonably anticipatable outcomes as of April 3, 1984. C. Objections Reactions of both classes are factors to be considered by the court in deciding whether to approve a consent decree. The classes have manifested their reactions by the filing (or not filing) of objections to the proposed decree. As counsel for plaintiffs noted at the fairness hearing, a rather small proportion of a'l non-named class members filed objections to the proposed decree. While this is not dispositive, we think it deserving of some weight. That is to say, we are of the view that the non- opposition of the vast majority of class members somewhat neutralizes the generally negative tone of those who did file objections. 18a Final Opinion and Order. 1. Inclusion of Return to Work Cases The automatic supersedeas provision covers two sorts of cases. See Baksalary, 579 F. Supp. at 221. The first sort consists of cases in which an insurer or self-insured employer files a termination petition together with the affidavit of a physician which recites that the claimant subject to termination has fully recovered. The second sort consists of cases in which the insurer or self-insured employer avers that the claimant subject to termination has returned to work at the same or higher wage. The declaratory relief and the injunctive relief granted by the proposed consent decree do not distinguish between physician’s-affidavit and return-to-work cases.’ Several non-named members of the defendani class have objected to the inclusion of return-to-work cases. They represent that the failure to distinguish them from physician’s-affidavit cases suggests that a claimant who has returned to work at the same or higher wage has an entitlement to continue receiving both compensation and wages until a referee can issue a final decision on a termination petition. With the court’s encouragement, counsel for the named parties and at least one of the objecting defendants, Philadelphia Electric Company, have agreed to a statement of the import of the proposed consent decree "The proposed consent decree does make certain procedural distinctions between physician’s-affidavit and return-to-work cases in the entitlement to a special supersedeas hearing. All those terminated upon a physician’s affidavit who have contested their termination cases and who have yet to receive a referee’s decision will receive special supersedeas hearings. One terminated upon an assertion that he has returned to work will only receive such a hearing if he files a form with the Bureau of Workers’ Compensation. Consent Decree 4417, 8. .. 0 .......Q™™S— 19a Final Opinion and Order. with respect to this issue. We endorse and adopt this statement: The Consent Decree does not entitle any claimant to receive both compensation payments and salary during discrete periods of time when that claimant has actually returned to work at wages equal to or greater than his/her pre-injury wages. The Consent Decree does however contemplate the payment of compensation for those periods during which a claimant, having previously returned to work at pre- injury or greater wages, again leaves his/her job as a result of a work-related injury. In addition, the Consent Decree contemplates that those claimants who have returned to work will be entitled to payment of all compensable medical expenses until or unless a Referee enters an Order granting a request for supersedeas of such benefits or a decision is rendered and received granting a termination. Letter from Harold I. Goodman, Esq., to Hon. Arlin M. Adams, Hon. Clifford Scott Green, and Hon. Louis H. Pollak (filed in this action June 25, 1984). To the extent, however, that the objecting defendants contend that the proposed decree is unfair because it enjoins invocation of the automatic supersedeas provision in return-to-work cases, their objections have no merit. The named parties arrived at their proposed consent decree on the basis of our prior rulings. Our principal February 1 Opinion expressly addressed both aspects of the automatic supersedeas provision. Baksalary, 579 F. Supp. at 221. Moreover, both of our February 1 Opinions were grounded on the failure of the 20a Final Opinion and Order. automatic supersedeas procedure to provide any notice to a terminated employee and its fa:lure to provide any opportunity to contest termination before the termination takes effect. 579 F. Supp. at 233 and 237. This failure to provide notice applies in both the return- to-work and physician’s-affidavit cases. Because this court’s legal rulings have treated the two aspects of the automatic supersedeas symmetrically, the proposed conserit decree quite reasonably also treats the two aspects symmetrically. To the extent that the objecting defendants contend that the proposed consent decree is unfair because it fails to provide an alternative to the automatic supersedeas provision in return to work cases, their position is again without merit. On March 15, we held that we would not, under any circumstances, require adoption of a particular alternative procedure to the automatic supersedeas; we believed that to be the prerogative and responsibility of the Pennsylvania Legislature.. Memorandum at 6-7 (March 15, 1984). Plaintiffs, therefore, had no reason to agree to an alternative procedure for return-to-work cases. In this regard, we reiterate two of our holdings. First we do not understand the consent decree as creating any entitlement to the concurrent receipt of wages and of compensation benefits other than compensation for medical expenses. No claimant may properly receive both. Second, the procedures available for vindicating employers’ and insurers’ privilege not to pay both wages and compensation concurrently must be embodied in provisions of the Workmen’s Compensation Act other than the automatic supersedeas provision of Section 2la Final Opinion and Order. 413(a) which we are invalidating. All provisions of that Act other than the first sentence of the fourth paragraph of section 413(a), the automatic supersedeas provision, remain intact. Specifically, neither the rulings of this couft nor the provisions of the proposed consent decree affect in any way the operation of sections 306(b) or 413(c) of the Act, Pa. Stat. Ann. tit. 77, §§512, 774.2 (Purdon Supp. 1983). Cf. Memorandum at 4-5 (March 15, 1984). If the other provisions of the Workmen's Compensation Act, as currently interpreted by the Pennsylvania courts, do not adequately ensure that a claimant will not wrongfully receive both compersation benefits and wages, then the Pennsylvania courts or legislature, and not this court, should address that problem. Cf. The Sansom Committee v. Lynn, No. 83- 1121, slip op. at 11 ff. (3d Cir. June 1, 1984) (Becker, J., concurring). 2. Time Limit for Special Supersedeas Hearings Paragraph 14 of the proposed consent decree provides that all special supersedeas hearings will be conducted within sixty days of the entry of the Order approving the proposed consent decree. Further, the referee conducting these hearings ‘must render his decision within seven days of the end of this sixty-day period. Cf 34 Pa. Admin. Code §§131.33(b) (Shephard’s 1982) (regulation concerning non-automatic supersedeas hearings). Paragraph 14 further provides that in the event that no hearing is scheduled within sixty days, or in the event that the referee does not render his decision on the special supersedeas within sixty-seven days of the entry of this court’s Order, then the claimant will receive automatic resumption of future benefits and automatic 22a Final Opinion and Order. back benefits. The claimant does not receive automatic resumption when the referee finds that the claimant or his counsel has caused the delay. Several members of the defendant class have objected to paragraph 14 on the ground that the additional burden on the Bureau of Workers’ Compensation will make it likely that many claimants will not receive decisions in their special supersedeas proceedings within sixty-seven days. These defendants contend that because delay beyond sixty-seven days may arise through no fault of the insurer or employer, the insurer or employer should not be obligated automatically to reinstate the claimant with full back benefits, unless the insurer or employer had caused the excessive delay. The accommodation contemplated by the proposed consent decree seems to us fair, adequate, and reasonable. If this matter had proceeded to a litigated judgment, defendants faced the real possibility that this court would have ordered reinstatement of all claimants contesting their termination petitions who had been terminated pending the referee’s decision under the automatic supersedeas provision. We had previously held that the automatic supersedeas procedure did not accord plaintiffs due process. Certainly on the resumption question defendants had no clear entitlement to rely on an unconstitutional procedure, albeit invoked before this court’s decision to that effect. Therefore, defendants obtained a significantly less-than-worst-case result by virtue of the proposed consent decree. Moreover, the Commonwealth has actively participated in the settlement negotiations leading to the proposed consent decree. The Commonwealth has abandoned its { : ; ; j i 23a Final Opinion and Order. position that this court ought impose no obligations upon it and has embraced the sixty-seven day rule as fair and as administratively feasible. For us to tell the Commonwealth that it could not fulfill the administrative commitment it has joined in recommending would smack of judicial impertinence. Finally, a consent decree deferring resumption of benefits pending the outcome of the administrative hearing should quite properly have provided some outside time limit for that outcome to be reached. Without such a time limit, defendants could have had the benefits of an _ unconstitutional deprivation indefinitely. For these reasons, we do not find the sixty-seven day limit in any way unfair or unreasonable. 3. Attorneys’ Fees Several members of the defendant class have objected to the allocation of plaintiffs’ attorneys’ fees recovery among all named and non-named defendants. The proposed consent decree would allocate the plaintiffs’ attorneys’ fees in the same proportion as the allocation of defendants’ contributions to the Workmen’s Compensation Administration Fund for 1983. Consent Decree 427. The objections come in two forms. Some objecting defendants challenge the liability in any form because they had no notice of this action. Their complaints of lack of notice would be appropriate if the defendant class had been certified pursuant to Federal Rule of Civil Procedure 23(b)(3). However, the class was certified pursuant to Rule 23(b)(2). The notice provisions of Rule 24a Final Opinion and Order. 23(c)(2) do not apply to a Rule 23(b)(2) class. Accordingly, defendants had no option to participate or not participate and they had no entitlement to notice. Walsh v. Great Atlantic & Pacific Tea Co., Inc., 726 F.2d 956, 962-963 (3d Cir. 1983). Some objecting defendants take issue with the allocation formula. They contend that the formula is completely arbitrary and, in particular, bears no relation to the use that any defendant has made of the automatic supersedeas procedure. We agree that the proposed consent decree will not allocate plaintiffs’ attorneys’ fees in proportion to the number of automatic supersedeas petitions filed by each defendant. Plaintiffs’ counsel has represented that the allocation formula essentially assesses each defendant in proportion to its total participation in the workers’ compensation program. We do not believe that this allocation scheme makes the proposed consent decree unfair, inadequate, or unreasonable. In the first place, the $300,000 cap placed upon plaintiffs’ attorneys’ fees recovery makes the difference between this allocation scheme and any other reasonable allocation scheme rather small for any one of the nine hundred members of the defendant class.* Further, one would be hard put to establish a method for allocating plaintiffs’ attorneys’ fees which would appear significantly less arbitrary. The method suggested by defendants—allocation upon the basis of past use of the automatic supersedeas provision—would surely prove expensive, and might prove impossible, to effectuate. * The objectors did not know of this cap at the time they filed their objections, as the cap only became known at the time of the fairness hearing. nel 25a Finai Opinion and Order. This is because the Bureau of Workers’ Compensation has no computerized records of the invocations of the automatic supersedeas provision which identify the insurer or employer filing the automatic supersedeas petition. Accordingly, we find the proposed allocation scheme a fair, adequate, and reasonable accommodation of the practicalities of assessing plaintiffs’ section 1988 recovery. 5. Scope of Relief to Plaintiffs Several plaintiffs have objected to their exclusion from relief under the proposed consent decree. These objections come in two forms. First, some objectors seek relief from a supersedeas even though they have not been subject to an invocation of the automatic supersedeas provision of section 413(a). Second, some objectors seek relief even though they have obtained a final referee’s decision. A consent decree which does not address the claims of those not subject to an automatic supersedeas in this case cannot, for that reason, be unfair, inadequate, or unreasonable. From its inception until now, this case has dealt only with Section 413(a). The remedial portion of this litigation has involved the named parties in an attempt to litigate, and then to compromise, the remedial implications of our February 1 and March 15 Opinions. A consent decree arising in this context which does not address what has not been litigated does not fail on that account. If it be the case that what we have decided has implications for situations other than the invocation of the automatic supersedeas, exploration of those implications must await another lawsuit. 26a Final Opinion and Order. The proposed consent decree also does not appear to us unfair, inadequate, or unreasonable because it does not provide relief to those who have had a referee's decision on the merits in their termination petition dispute. Consent Decree 47. We have made clear that this case concerns only ‘“‘the right to compensation between the time an employer or insurer petitions for termination or modification and the time the referee makes a final determination.’’ Baksalary, 579 F. Supp. at 221. After that time, the automatic supersedeas has no independent force; the referee’s decision on the merits of the termination petition controls. Moreover, after an individual has received a referee's decision on the merits, none of our reasoning concerning notice and an opportunity to be heard applies; the individual has received his hearing. Cf. Cohen v. City of Philadelphia, No. 83-1575 (3d Cir. June 6, 1984); Vinson v. Freeman, Civil Action No. 81-0643 (E.D. Pa. June 29, 1984). For the foregoing reasons, we find that the proposed consent decree, as amended by our Order of May 14, 1984, is fair, adequate, and reasonable. Therefore, the accompanying Order approves the decree pursuant to Federal Rule of Civil Procedure 23(e). III. LITIGATED ISSUE As discussed above, the named parties, proposed consent decree does not resolve the question of what remedy, if any, should be awarded claimants against whom a member of the defendant class may have invoked the automatic supersedeas provision between February 1, 1984, the date of this court’s liability Opinions, and March 15, 1984, the date of this court’s declaratory Order. Plaintiffs have moved for mandatory 27a Final Opinion and Order. relief requiring immediate resumption of post-February 1 pre-March 15 terminees’ benefits together with an immediate award of back benefits to the date of the automatic supersedeas. Several members of the defendant class other than named defendants oppose such an award. Much of the parties’ discussion of this issue turns on whether the defendants who invoked the automatic supersedeas provision after February 1, 1984, had any justification for doing so. We find this analysis unhelpful. We see no reason to characterize any defendant’s activity as ‘‘wrongful’” or not ‘‘wrongful.” Instead, we believe that we may usefully commence our discussion of the relief appropriate to post-February 1 pre-March 15 terminees with consideration of the retroactive impact of our March 15 declaration of the automatic supersedeas provision’s unconstitutionality. Our March 15 Memorandum explicitly reserved the question of our declaration’s retroactivity. Ordinarily, judicial decisions operate retroactively in our system of precedent. Solem v. Stumes, 104 S. Ct. 1338, 1341 (1984). Nevertheless, a court may limit its holdings’ effect and deny retroactive relief when the court’s decision meets the three criteria enunciated in Chevron Oil Co. v. Huson, 404 U.S. 97 (1971). Specifically, a court will take the unusual step of denying retroactive relief when its decision was so novel as to be unpredictable, when retroactive application of the court’s decision will retard the holding’s purpose, and when retroactive application of the decision will produce substantial inequity. Chevron Oil, 404 U.S. at 106-907; see also Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 102 S. Ct. | sence eatin 28a Final Opinion and Order. 2858, 2880 (1982); cf. Solem v. Stumes, 104 S. Ct. at 1341 (different but analogous formulation in criminal context). On February 1, 1984, we announced our constitutional conclusion that the automatic supersedeas provision of the Pennsylvania Workmen’s Compensation Act did not accord procedural protections required by the due process clause. On March 15 we formally declared that provision unconstitutional. As applied to invocations of the automatic supersedeas provision between February 1 and March 15, our March 15 declaration quite clearly does not meet the stringent requirements of Chevron Oil. It was not a new holding; its retroactive application will not retard its purpose, and its retroactive application will not produce substantial inequity.’ We therefore find that the Chevron Oil factors do not militate in favor of the nonretroactive application of our March 15 declaration of the automatic supersedeas provision’s invalidity. We find that, as of February 1, 1984, any invocation of the automatic supersedeas violated the constitutional rights of the worker’s compensation claimant involved. We find that immediate resumption of benefits and an award of back benefits with interest provide the appropriate relief for this constitutional deprivation. Any award must clearly include immediate resumption of benefits. No defendant should be entitled to continue *On March 15 we not only reserved the question of our declaration’s retroactivity to February 1, but we also reserved the question of our declaration’s retroactivity to invocations of the automatic supersedeas provision before February 1, 1984. The latter, in our view, presented a much more difficult problem. However, the consent decree has obr‘ated the need for a decision on the more difficult portion of the retroactivity issue. iii iia Me atti cen 29a Final Opinion and Order. withholding compensation on the basis of a constitutionally invalid supersedeas. Further, we believe that restitution of the compensation that should have been paid duiing the time of the automatic supersedeas also follows from the _ supersedeas’ invalidity. Resumption of benefits and an award of back benefits with interest serve to put the parties in the position they would hive been in but for the invalid invocation of tlie automatic supersedeas. The accompanying Order, then, grants plaintiffs’ petition for relief on the litigated issue and awards immediate resumption of benefits and back benefits to claimants subject to the automatic supersedeas after February 1, 1984. 30a Final Opinion and Order. IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, Plaintiffs, Vv. PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. Filed July 30, 1984; MICHAEL E. KUNZ, Clerk. By (Illegible) Dep. Clerk. Before: ADAMS, Circuit Judge,* GREEN and POLLAK, District Judges. * Honorable Arlin M. Adams, United States Circuit Judge, United States Court of Appeals for the Third Circuit, sitting by designation. 3la Final Opinion and Order. ORDER For the reasons stated in the accompanying Opinion: 1. The consent decree filed in this action on April 27, 1984, as amended by Order of May 14, 1984, is hereby APPROVED pursuant to Federal Rule of Civil Procedure 23(e). 2. Any invocation on or after February 2, 1984, of the automatic supersedeas provision of section 413(a) of the Pennsylvania Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, §774 (Purdon Supp. 1983)(first sentence), is hereby DECLARED to have deprived the compensation claimant involved of his or her property without due process of law. 3. Each named and class defendant insurance carrier and self-insured employer is hereby directed, within thirty (30) days of the date of this Order, to reinstate and resume the payment of all worker’s compensation benefits to each member of the plaintiff class who: (a) has had his or her benefits terminated under the automatic supersedeas provision of section 413 on or after February 2, 1984, and (b) has not yet received a decision from a referee on the merits of the underlying termination petition. 4. The payments to be made under paragraph 3 shall include: (a) all previously withheld compensation retroactive to the date of termination, provided, however, that no payments are required for any period(s) during which claimants are shown to have actually returned to work at wages equal to or greater than the wages they earned at the time of their compensable injury; a el 32a Final Opinion and Order. (b) statutory interest of 10% on all unpaid compensation as provided by section 406.1 of the Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, $717.1 (Purdon Supp. 1983); (c) resuned compensation payments, to be paid pending a decision by a referee on the rnerits of the termination petition, based on the weekly rate in effect at the time of termination; and (d) the payment of all previously incurred medical expenses and medical expenses incurred prior to a decision by a referee on the merits of the termination petition, such payments to be made regardless of whether the claimant has returned to work. ARLIN M. ADAMS ADAMS, Circuit Judge CLIFFORD SCOTT GREEN GREEN, District Judge LOU'S H. POLLAK, AMA POLLAK, District Judge JULY -30, 1984 7/31/84 copies to: See attached fad 33a Order (Amendment) IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, Plaintiffs, Vv. PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. % Filed August 13, 1984; MICHAEL E. KUNZ, Clerk. s By (illegible) Dep. Clerk. Before: ADAMS, Circuit Judge, * GREEN and POLLAK, District Judges. * Honorable Arlin M. Adams, United States Circuit Judge, United States Court of Appeals for the Third Circuit, sitting by designation. : [a 34a \ Order (Amendment). | ORDER On July 30, 1984, we issued an unsigned Opinion and an accompanying Order approving and adopting the named parties’ pryposed consent decree. That Opinion and Order also resolved the issues which the named parties had been unable amicably to resolve among themselves. x Counsel have brought to our attention that we mischaracterized paragraph 14 of the consent decree on page 23 of our Opinion. The third sentence of the first full paragraph on page 23 reads: Paragraph 14 further provides that in the event that no hearing is scheduled within sixty days, or in the event that the referee does not render his decision on the special supersedeas within sixty-seven days of the entry of this court’s Order, then the claimant will receive automatic resumption of future benefits and automatic back benefits. In fact, paragraph 14 provides, in pertinent part, that lilf no decision has been rendered by the referee assigned the Special Supersedeas Hearing by the seventh day following the expiration of the prescribed sixty (60) day period, then the payment of compensation benefits shall be resumed only prospectively commencing the day following the expiration of the foregoing sixty-seven (67) day period. ... Consent Decree 414 (emphasis added). ieee 35a Order (Amendment). For the foregoing reason, the third sentence of the first full paragraph on page 23 of our July 30 Opinion»is AMENDED by sstriking the last four words of that sentence. The amended sentence SHALL now read: Paragraph 14 further provides that in the event that no hearing is scheduled within sixty days, or in the event that the referee does not render his decision on the special supersedeas within sixty-seven days of the entry of this court’s Order, then the claimant will receive automatic resumption of future benefits. ARLIN M. ADAMS ADAMS, Circuit Judge CLIFFORD SCOTT GREEN GREEN, District Judge LOUIS H. POLLAK POLLAK, District Judge AUGUST 8, 1984 8/13/84 copies to: See attached 36a¥ Opinion on Merits and Order for Submissions IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, . Plaintiffs, PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. Filed February 1, 1984; MICHAEL E. KUNZ, Clerk. By (Illegible) Dep. Clerk. ¢ Before: ADAMS, Circuit Judge,* GREEN and POLLAK, District Judges. * Honorable Arlin M. Adams, United States Circuit Judge, United States Court of Appeals for the Third Circuit, sitting by designation. Pet Ae - ——— as 37a Opinion on Merits and Order for Submissions. HAROLD I. GOODMAN (argued) MARK B. SEGAL Community Legal Services, Inc. Sylvania House Juniper and Locust Streets Philadelphia, PA 19107 DAVID RUDOVSKY 1427 Walnut Street Philadelphia, PA 19102 RITA L. BERNSTEIN Community Legal Services, Inc. 1226 South Broad Street Philadelphia, PA 19146 Attorneys for Plaintiffs ROBERT H. NOTTALL (argued) ROBERT T. LEAR Law Department School District of Philadelphie Parkway at 21st Street Philadelphia, PA Attorneys for Defendant School District of Philadelphia HENRY H. JANSSEN (argued) Rawle & Henderson 211 South Broad Street Philadelphia, PA 19107 Attorney for Defendant Bituminous Casualty Corporation 38a Opinion on Merits and Order for Submissions. CHRISTO! HER J. PAKURIS (argued) 925 Chestnut Street Philadelphia, PA 19107 Attorney for Defendant Pennsylvania Manufacturers’ Association Insurance Company JOSEPH R. THOMPSON (argued) 656 Public Ledger Building Philadelphia, PA 19106 Attorney for Intervenor Liberty Mutual Insurance Co. _-- oe Ur, ee LEROY S. ZIMMERMAN 7 DEBRA K. WALLET (argued) ALLEN C. WARSHAW Office of the Attorney General 15th Floor, Strawberry Square Harrisburg, PA 17102 Attorneys for ‘“‘Commonwealth”’ Defendants Paul J. Smith, C. John Urling, Jr., William J. Shepard, and Grace M. Sloan WILLIAM C. STEPPACHER (argued) — State Workmen’s Insurance Fund 100 Lackawanna Avenue Scranton, PA 18503 Attorney for Defendant State Workmen’s Insurance Fund i ial 39a Opinion on Merits and Order for Submissions. ROBERT G. HANNA, JR. Marshall, Dennehey & Warner, P.A. 1515 Locust Street Philadelphia, PA 19102 Attorney for Defendant American Mutual Liability Insurance Company OPINION POLLAK, District Judge February 1, 1984 I. Plaintiffs initiated this action in 1976, challenging the constitutionality of certain provisions of the Pennsylvania Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, $§1-1031 (Purdon 1952 and Supp. 1982). In particular, plaintiffs allege that the ‘‘automatic supersedeas”’ provision of section 413 of the Act, Pa. Stat. Ann. tit. 77, §774 (Purdon Supp. 1982), permits employers and insurers to terminate worker’s compensation benefits without according due process of law to those whose benefits are terminated, in violation of the Fourteenth Amendment. The automatic supersedeas terminates benefits without notice to the person receiving benefits. It requires only an employer’s or insurer’s petition reciting that the benefit recipient has returned to work at the same or higher pay or a petition accompanied by a physician’s affidavit averring that the recipient has recovered. Plaintiffs make their due process claim in an action under the Civil Rights Act of 1871, 42 U.S.C. $1983 (Supp. V 1981). 40a Opinion on Merits and Order for Submissions. A decade ago a three-judge panel of this court heard a challenge to section 413’s predecessor. In Silas v. Smith, 361 F. Supp. 1187 (E.D. Pa. 1973), the court cunsidered the case of an individual whose worker’s compensation benefits were terminated by his employer’s insurer under the automatic supersedeas provision then in effect. The court found no state action in this termination. The court further stated that even had it found state action, it would not have found a violation of the due process clause. The Silas court, however, faced these questions at a time when employers and employees could opt out of the Pennsylvania Workmen’s Compensation Act. Further, the Silas court was not called on to consider the problem of the automatic supersedeas’ application to public employees or to employees of employers insured by the State Workmen's Insurance Fund, an insurer administered by state offi@ials. Therefore, as we explain more fully below, the ruling in Silas is not controlling with respect to the claims advanced in the lawsuit now before the court. Because the prior decision in Silas is not controlling here, it was proper that, after this action was commenced, Judge Fogel ordered that ‘a three- judge court be convened ... in that, pursuant to 28 U.S.C. §§2281 and 2284, the complaint raises substantial constitutional issues and requests as relief the enjoining of the enforcement, operation and execution of a state statute.’ ‘Congress has repealed section 2281, Pub.L. No. 94-381, §$1, 2, 90 Stat. 1119 (1976), but section 2281 still applies to cases filed before the repeal. . . 10la Memorandum and Interim Order. court’s Opinions of February 1, and will not be understood to betoken that party’s acquiescence in those Opinions. ARLIN M. ADAMS ADAMS, Circuit Judge CLIFFORD SCOTT GREEN GREEN, District Judge LOUIS H. POLLAK POLLAK, District Judge MARCH 15, 1984 3/16/84 Copy To: Robert Lear, Esq. (See Attached List) 102a Joint Motion and Proposed Consent Decree IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, et al., v. PAUL J. SMITH, et al. Filed April 27, 1984; MICHAEL E. KUNZ, Clerk. By LVC Dep. Clerk. JOINT MOTION FOR PRELIMINARY APPROVAL OF CONSENT DECREE AND FOR APPROVAL OF TRANSMISSION OF NOTICES OF SETTLEMENT TO MEMBERS OF THE PLAINTIFF AND DEFENDANT CLASSES Pursuant to Rule 23(e) cf the Federal Rules of Civil Procedure, named and class plaintiffs, and named defendants Paul J. Smith, C. John Urling, Jr., William J. Sheppard, Grace M. Sloan (hereafter ‘‘Commonwealth defendants”), the State Workmen’s Insurance Fund, Pennsylvania Manufacturers’ Association Insurance Company, American Mutual Liability Insurance Company, the School District of Philadelphia, Bituminous Casualty Corporation, and _ intervening defendant Liberty Mutual Insurance Company, by their undersigned counsel, hereby move the Court for preliminary approval of the proposed Consent Decree FE er aoe 103a Joint Motion and Proposed Consent Decree. annexed hereto and incorporated herein by reference. As more fully set forth in the accompanying Memorandum of Law, the moving parties believe that the proposed Consent Decree represents a fair, adequate and reasonable settlement of the litigation and one which, viewed as a whole, advances the best interests of all the members of the plaintiff and defe t classes. For these reasons, the moving parties res lly request that the Court grant preliminary approval to the proposed Consent Decree. The moving parties also respectfully request the Court under Rule 23(e) of the Federal Rules of Civil Procedure to approve the transmission of the proposed Consent Decree, and the accompanying notices, to €ach member of the plaintiff and defendant classes. The form and content of the class notices are set forth in Exhibits H and J to the proposed Consent Decree. In counsel's view, the notices and the procedure for notifying class members satisfy both the requirements of due™“process and Rule 23(e). Therefore, they should be approved by the Court. A proposed form of Order is attached for the Court’s consideration. HAROLD I. GOODMAN HAROLD I. GOODMAN Counsel for Class Plaintiffs Community Legal Services, Inc. Sylvania House Juniper and Locust Streets Philadelphia, Pennsylvania 19107 LeRoy S. Zimmerman Attorney General _ By: DEBRA K. WALLET DEBRA K. WALLET Deputy Attorney General 104a Joint Motion and Proposed Consent Decree. LOWELL A. REED, JR. LOWELL A. REED, JR. PATRICIA A. MATTERN Counsel for Bituminous Casualty Corp. Rawle & Henderson 211 South Broad Street, 15th FI. Philadelphia, Pennsylvania 19107 CHRISTOPHER J. PAKURIS CHRISTOPHER J. PAKURIS Counsel for Pennsylvania Manufacturers’ Association Insurance Co. 925 Chestnut Street Philadelphia, Pennsylvania 19107 ROBERT G. HANNA, JR. ROBERT G. HANNA, JR. Counsel for American Mutual Liability Insurance Company 1515 Locust Street, 10th Floor Philadelphia, Pennsylvania 19102 MICHAEL CHURCHILL MICHAEL CHURCHILL ROBERT H. NOTTALL Counsel for School District of Philadelphia School District of Philadelphia Legal Department, Room 605B 21st and the Parkway Philadelphia, Pennsylvania 19103 105a Joint Motion and Proposed Consent Decree. WILLIAM C. STEPPACHER WILLIAM C. STEPPACHER Acting Deputy Chief Counsel State Workmen’s Insurance Fund Department of Labor and Industry 100 Lackawanna Avenue Scranton, Pennsvivania 18503 JOSEPH R. THOMPSON JOSEPH R. THOMPSON Counsel for Liberty Mutual Liability Insurance Company 410 Public Ledger Building 6th and Chestnut Streets Philadelphia, Pennsylvania 19106 106a Joint Motion and Proposed Consent Decree. IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL, Individually and on behalf of all others similarly situated, v. PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated. ORDER AND NOW this day of _____—_,- 1984, after due consideration of the Joint Motion for Preliminary Approval of Consent Decree and for Approval of Transmission of Notice of Settlement to Members of the Plaintiff and Defendant Classes, the Memorandum supporting the Joint Motion, and the proposed Consent Decree itself, ee =. ee ot wwe Sty CR, ol he Sh FO aie rt it ee 107a Joint Motion and Proposed Consent Decree. IT IS ORDERED that: 1. The proposed Consent Decree (‘‘Decree”’) is preliminarily APPROVED since it appears to be, at this stage of the proceedings, a fair, adequate and reasonable resolution of the litigation. 2. Transmittal of notice of the Decree by the Bureau of Workers’ Compensation to members of the plaintiff and defendant classes is APPROVED. The form and content of the respective class notices, as set forth in Exhibits H and J to the Decree, are also APPROVED. 3. The Bureau of Workers’ Compensation (‘‘Bureau’’) shall transmit the proposed Consent Decree and class notices to members of the plaintiff and defendant classes by regular mail as promptly as possible, and in any event no later than ten (10) days after the date of the entry of this Order. The Bureau shall file with the Clerk of Court a notarized affidavit, with copies served on counsel of record, attesting to the transmission of these documents to members of the plaintiff and defendant classes. 4. Written objections, if any, to the proposed Decree and the plaintiffs’ proposed resolution of the unsettled issue, identified in paragraph 3 of the Decree, if any, must be filed with the Clerk of Court within thirty (30) days of the date of this Order, i.e., on or before ____, 1984. Any such filings should briefly but clearly state the basis for the objection presented. 5. The Court will hold a fairness hearing on , 1984 (i.e., thirty-five days after the date of this Order) at ___.m., in Courtroom 13B to consider whether to grant final approval to the proposed Decree, and to consider the resolution of the unsettled issue identified in m 108a Joint Motion and Proposed Consent Decree. paragraph 3 of the Decree. At this hearing, any member of the plaintiff or defendant class, or their counsel, who has filed a timely written objection to the Decree, may present to the Court the basis for any such objection, or such other comments as the Court may deem to be relevant and material to its consideration whether to grant final approval to the Decree and to its resolution of the unsettled issue identified in parigraph 3 of the Decree. 6. Counsel for the moving parties to the Joint Motion may respond at the fairness hearing to any objections or comments presented to the Decree. Further. these counsel shall be permitted to file written responses, to the extent deemed necessary and at such time as determined by the Court, to the objections and/or comments raised by any class member at the fairness hearing. HONORABLE ARLIN M. ADAMS Circuit Court Judge HONORABLE LOUIS H. POLLAK District Judge HONORABLE CLIFFORD SCOTT GREEN District Judge —" I a ee as? 3 kath ae ype 3, «DS. Salo Minit 109a Joint Motion and Proposed Consent Decree. IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, Plaintiffs, Vv. PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS’ ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. 110a Joint Motion and Proposed Consent Decree. CONSENT DECREE I. INTRODUCTION This lawsuit was commenced by plaintiffs on February 13, 1976. It challenged the constitutionality of the automatic supersedeas provision of section 413(a) of The Pennsylvania Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, §774.' Suit was brought under Section 1 of the Civil Rights Act of 1871, 42 U. S. C. §1983, and alleged violations of the Due Process clause of the Fourteenth Amendment of the United States Constitution. A statutory three-judge federal district court was convened pursuant to 28 U.S.C. §2281 to hear and determine the merits of plaintiffs’ claims.’ ‘The automatic supersedeas procedure challenged by plaintiffs is set forth in the first sentence of the fourth paragraph of section 413(a). That sentence provides: The filing of a petition to terminate or modify a notice of compensation payable or a compensation agreement or award as provided in this section shall operate as a supersedeas, and shall suspend the payment of compensation fixed in the agreement or by the award, in whole or to such extent as the facts alleged in the petition would, if proved, require only when such petition alleges that the employe has returned to work at his prior or increased earnings or where the petition alleges that the employe has fully recovered and is accompanied by an affidavit of a physician on a form prescribed by the department to that effect which is based upon an examination made within fifteen days of the filing of the petition. ? The members of the court included the Honorable Arlin M. Adams, Circuit Court Judge of the United States Court of Appeals for the Third Circuit, the Honorable Herbert A. Fogel and the Honorable Clifford Scott Green, District Judges of the United States District Court for the Eastern District of Pennsylvania. In 1978 the Honorable Louis H. Pollak was assigned the case to replace Judge Fogel who had left the bench. = eka a lS hk ce tela tty Lt ; F] é:| : { j llla Joint Motion and Proposed Consent Decree. The complaint was filed by six named plaintiffs whose workers’ compensation benefits had been terminated under section 413(a)’s automatic supersedeas procedure.’ Named as defendants were four state officials, including two who are responsible for administering The Pennsylvania Workmen’s Compensation Act,‘ as well as three insurance carriers,° one self-insured employer,® and the statutorily created State Workmen’s Insurance Fund (““SWIF’’)—each of which had terminated workers’ compensation benefits under the automatic supersedeas procedure of section 413(a).’ On March 28, 1978 the court entered an order under Rule 23(b)(2) of the Federal Rules of Civil Procedure permitting the action to proceed as both a plaintiffs’ and defendants’ class action. On the plaintiffs’ side, the class was defined to include all persons whose benefits had been, or would be terminated, under section 413(a)’s automatic supersedeas procedure. On the defendants’ side, the class was defined to include all insurance carriers and self-insured employers who had invoked, or would in the future invoke, the automatic supersedeas procedure of section 413(a). * Two of the named plaintiffs were subsequently dismissed from the case by stipulation of the parties. ‘J.e., the Secretary of Labor and Industry, and the Director of the Bureau of Workers’ Compensation. ’ Pennsylvania ‘Manufacturers’ Association Insurance Company (“PMA”), American Mutual Liability Insurance Company (“‘American Mutual’’) and Bituminous Casualty Corporation (‘Bituminous’). * The School District of Philadelphia. ’ Subsequent to the filing of the complaint, an additional insurance company, Liberty Mutual Insurance Company, moved to intervene in the case as a named defendant. Its motion was granted by Judge Fogel on April 3, 1978. 112a Joint Motion and Proposed Consent Decree. Following a lengthy period of pre-trial discovery, the parties submitted the case to the court through a comprehensive Stipulation of Facts and accompanying exhibits. These submissions were followed by briefs and oral argument in which counsel for the parties advocated the merits of their respective positions. On February 1, 1984 the court, after considering the parties’ contentions, ruled that the automatic supersedeas procedure of section 413(a) was unconstitutional and its use a violation of 42 U. S. C. $1983 in that it permitted insurance companies and self- insured employers to terminate a claimant’s worker's compensation benefits without prior notice or an opportunity to be heard in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution.‘ At the direction of the court, the named parties, through their counsel, submitted proposed forms of orders on February 15, 1984 addressed to the remedial * The court’s memorandum opinion was written by Judge Pollak and was joined by Judges Adams and Green. Judge Adams wrote a separate concurring opinion in which he addressed the due process deficienttes of the automatic supersedeas procedure. Both Judges Green and Pollak joined in Judge Adams’ concurrence. A copy of the thrity-nine (39) page opinion of Judge Pollak and the ten (10) page concurring opinion of Judge Adams, as well as any other documents filed in the case, are available for inspection and/or purchase from the Clerk of Court at the following address: Michael E. Kunz Clerk of the United States District Court for the Eastern District of Pennsylvania Room 2609 United States Courthouse 601 Market Street Philadelphia, Pennsylvania 19106 All inquiries to the Clerk should reference the caption of the case: Baksalary, et al. v. Smith, et al., C.A. No. 76-429. 113a Joint Motion and Proposed Consent Decree. issues left to be resolved by the court’s opinion, without prejudice to the defendants’ right to appeal the decision on the merits. While differing on whether and to what extent injunctive relief was available to remedy the constitutional violations found by the court, all of the forms of relief presented by the parties to implement the holding of the Court in its liability opinion necessarily provided for a declaratory judgment. On March 15, 1984, the court entered an order, binding on all class members, declaring section 413(a)’s automatic supersedeas procedure to be unconstitutional.® It also scheduled oral argument on the remaining remedial issues. Oral argument was initially scheduled for March 28, 1984, but was rescheduled for April 3, 1984. Prior to that date, the named parties, through their counsel, had commenced and engaged in extensive discussions with regard to an amicable settlement of all claims for relief raised by the litigation. By the afternoon of April 3, 1984, counsel had reached an agreement in principle on the outstanding remedial issues, and so advised the court. As a result, oral argument was not held, and counsel for the parties proceeded to. draft this proposed Consent Decree (hereafter ‘“‘Decree’’), the provisions of which are intended to bind each member of the plaintiff and defendant classes. II. SCOPE OF DECREE 1. This Decree settles finally and in fuii all class claims for relief which were, or could have been, raised by plaintiffs in this litigation, except to the extent set forth in paragraph 3 infra. The Decree’s terms and *The March 15, 1984 order also denied several named defendants’ proposals to have the court order the Commonwealth to adopt a procedural alternative to the automatic supersedeas procedure struck down by the court’s February 1, 1984 opinion. 1l4a Joint Motion and Proposed Consent Decree. provisions are intended to bind each named and class plaintiff and defendant, their agenis, employees, heirs and successors. The entry of the Decree is intended as a compromise by the parties to avoid the burden and expense of further litigation. For that reason, this Decree has been entered into with the understanding that the terms and conditions hereof shall not be construed as a present or past admission of liability, or the violation of any law. Each named and class member of the plaintiff and defendant class hereby consents to the entry of this judgment as a final order with respect to all of the issues which were or could have been raised in this litigation. 2. It is specifically understood by and among the parties that the Decree shall not have any precedential impact in any litigation save this one. | 3. This Decree does not resolve the remedial claims of those members of the plaintiff class whose workers’ compensation benefits have been terminated under the automatic supersedeas procedure of section 413(a) as a result of termination petitions filed by any member of the defendant class after February 1, 1984. The claims for relief for this sub-group of plaintiffs have been severed and specifically reserved for a litigated judgment by the court. Because the named and _ intervening insurance carrier (including S.W.I.F.) and _ self-insured defendants have either not invoked the automatic supersedeas provision of the Act since February 1, 1984, or have reinstated benefits so terminated, said named defendants will not be representing the remaining sub- group of the defendants’ class as to this unsettled issue. The sub-group of the defendants’ class will receive special notice of this issue as part of Exhibit ‘J”’ attached hereto. 1l5a Joint Motion and Proposed Consent Decree. Ill. DECLARATORY JUDGMENT 4. The court’s order of March 15, 1984 declared the automatic supersedeas provision of the first sentence of the fourth paragraph of section 413(a) of The Pennsylvania Workmen’s Compensation Act, as codified at Pa. Stat. Ann. tit. 77, $774 (Purdon Supp. 1982), to be an unconstitutional deprivation of plaintiffs’ property in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. That declaratory judgment is set forth in full below: The automatic supersedeas provision of the Pennsylvania Workmen’s Compensation Act authorizes a procedure which violates the Due Process Clause of the Fourteenth Amendment to the Constitution of the United States. Any invocation by any defendant of the automatic supersedeas provision after this date in order to terminate an individual’s worker’s compensation benefits without prior notice or a pretermination opportunity to be heard is hereby DECLARED to be a deprivation of that individual’s property without due process of law. March 15, 1984 Order, at 41(b). IV. PROSPECTIVE INJUNCTION 5. Each named and class defendant insurance carrier and self-insured employer is hereby ENJOINED now and in the future from invoking in any way the automatic supersedeas provision of section 413(a) of The Pennsylvania Workmen’s Compensation Act to terminate the payment of workers’ compensation benefits. 11l6a Joint Motion and Proposed Consent Decree. 6. The Pennsylvania Bureau of Workers’ Compensation (hereinafter, ‘‘Bureau’’) shall review each Petition For Termination, Suspension or Modification of Compensation (Form LIBC-40) submitted to it for filing by any named or class insurance carrier or self-insured employer to determine whether the petition has attempted to invoke the automatic supersedeas provisions of Section 413(a) of The Pennsylvania Workmen's Compensation Act. If, on the face of Form LIBC-40, the petitioner has invoked the unconstitutional automatic supersedeas provision, the Bureau shall send a letter to the insurance carrier or self-insured employer notifying it chat the automatic supersedeas provision of Section 413(a) has been declared unconstitutional, that it must continue to pay all compensation benefits, and that termination of benefits may subject it to any and all penalties provided in The Pennsylvania Workmen’s Compensation Act. V. INJUNCTIVE RELIEF FOR MEMBERS OF THE PLAINTIFF CLASS WHOSE BENEFITS WERE TERMINATED UNDER THE AUTOMATIC SUPERSEDEAS PROCEDURE AS A RESULT OF TERMINATION PETITIONS FILED ON OR BEFORE FEBRUARY 1, 1984. 7. Subject to paragraphs 8 and 19, Special Supersedeas Hearings shall be scheduled by the Bureau for each member of the plaintiff class whose benefits have been terminated under the automatic supersedeas provision of section 413(a) as a result of a termination petition filed with the Bureau on or before February i, 1984 and on which there has not yet been rendered a decision on the merits by a referee. 8. No Special Supersedeas hearing is required to be held for any claimant for whom an insurance carrier or 117a Joint Motion and Proposed Consent Decree. self-insured employer has alleged in such petition that the claimant has returned to work at earnings equal to or greater than the claimant’s pre-injury earnings unless within thirty (30) days after the date of the notice of the proposed class action settlement any such claimant returns to the Bureau, a form attached hereto and marked Exhibit “‘A’’, which shall be provided to the claimant by the Bureau indicating that either (a) the claimant has not continuously received wages equal to or greater than his pre-injury wages from the date the petition was filed to present; or (b) there are compensable medical expenses remaining unpaid to the provider which have not been paid by the insurance carrier oi self- insured employer. A claimant may subsequently submit such a form (Exhibit ‘“‘A’’), or raise the issue referred to in this paragraph at the next scheduled Referee’s hearing, and in either event a Special Supersedeas Hearing shall be scheduled, but all relevant time frames for the scheduling of hearings subject to this paragraph and prospective resumption of benefits as set forth in paragraphs 9 and 14, shall commence to run from the date the form (Exhibit ‘‘A’’) is received by the Bureau or the issue is first raised before the Referee. 9. The Bureau shall schedule the Special Supersedeas Hearings to occur within sixty (60) days of the date of the court’s final order approving this Decree. 10. In order to identify the members of the plaintiff class entitled to receive a Special Supersedeas Hearing as provided by paragraph 7 supra, the Bureau and each named and class member of the defendant class shall have the following responsibilities: (a) The Bureau shall, within thirty (30) days of the court’s order tentatively approving this Decree, conduct a review of all its pertinent files and records and develop 118a Joint Motion and Proposed Consent Decree. a list of all plaintiff class members who may be entitled according thereto to a Special Supersedeas Hearing under the terms of paragraph 7, supra. A copy of the list so generated shall be promptly forwarded to plaintiffs’ counsel. The list shail contain, at a minimum, the name, address and social security number of the claimant, the identity of the insurance carrier or self-insured employer which filed the termination petition, the rate of weekly (or other) compensation benefits, the date the termination petition was filed and an indication as to whether there was attached to the petition a physician's affidavit of recovery or whether the petition contained an allegation that the claimant returned to work at wages equal to or in excess of the pre-injury wage. (b) Each named and class defendant insurance carrier and self-insured employer shall conduct a review of all its pertinent files and records and, within thirty (30) days of the date of the notice of the proposed class action settlement, complete forms identifying each claimant who may ve entitled to a Special Supersedeas Hearing under paragraph 7 supra. The forms so prepared shall be in the form attached hereto and marked Exhibit ‘‘B”’. A copy of the forms so prepared shall be forwarded by each insurance carrier and self-insured employer to the Bureau and to plaintiffs’ counsel no later than thirty (30) days after the date of the notice of the proposed clas$ action settlement. (c) Any member of the plaintiff class identified by an insurance carrier or self-insured employer on a form it prepares in compliance with paragraph 10(b), but not identified by the Bureau on the list it prepares in compliance with paragraph 10(a), shall be entitled to receive all of the benefits conferred by the Decree. 119a Joint Motion and Proposed Consent Decree. 11. The Special Supersedeas Hearings referred to in paragraph 9 supra shall be conducted in accordance with the provisions of the Special Rules of Administrative Practice and Procedure Before Referees set forth at 34 Pa. Code $§131.31-131.33 (hereafter, ““Rules’’). 12. The Bureau shall provide written notice of the Special Supersedeas Hearings referred to in paragraph 9 supra to each member of the plaintiff and defendant class entitled to participate in such a hearing. The content of that notice shall be in the form attached hereto and marked Exhibit ‘‘C’’. 13. The Bureau shall notify in writing all other claimants subject to a termination petition filed on or before February 1, 1984, and on which there has not yet been rendered a referee’s decision on the merits, that they have the right to request a supersedeas hearing if they contend in writing that their benefits were terminated under the automatic supersedeas procedure of section 413(a). The content of that notice shall be in the form attached hereto and marked Exhibit ‘“‘D’’. Any such claimant shall thereafter be provided with a Special Supersedeas Hearing on the same terms and conditions as provided all other plaintiff members under section V of the Decree. 14. If no decision has been rendered by the referee assigned the Special Supersedeas Hearing by the seventh day following the expiration of the prescribed sixty (60) day period, then the payment of compensation benefits shal! be resumed only prospectively commencing the day following the expiration of the foregoing sixty-seven (67) day period, by the insurance carrier or self-insured employer which filed the termination petition; provided, 120a Joint Motion and Proposed Consent Decree. however, that the payment of benefits need not be resumed prospectively if the referee finds in writing within the aforesaid sixty-seven (67) day period that. the delay in conducting the Special Supersedeas Hearing or rendering a decision thereon was attributable to acts or omissions of the claimant or claimant’s counsel of record; provided further, that at any time after the automatic resumption of benefits pursuant to the expiration of the aforementioned sixty-seven (67) day period, the Referee may order a temporary suspension of benefits when a Referee finds a delay either in rendering a decision on the merits or holding the Special Supersedeas Hearing is attributable to the acts or omissions of claimant or claimant’s counsel of record; provided further, that no legal actions of any nature shall be instituted against the Commonwealth of Pennsylvania, its officials and employees, by any named or class party hereto, and no sanctions imposed against the Commonwealth, its officials and employees, in the event that any of the Special Supersedeas Hearings are not held within the prescribed sixty (60) day period; and provided further that the Commonwealth, its officials and employees, do not waive any defense or immunity under law. VI. PROVISIONS COMMON TO ALL SPECIAL SUPERSEDEAS HEARINGS 15. In ruling on the supersedeas issue, the referee shall decide, in accordance with the applicable Rules: (a) whether the claimant is entitled to any immediate payment of benefits of any nature; and (b) the period or periods during which the claimant is so entitled, whether retrospectively or 12la Joint Motion and Proposed Consent Decree. prospectively, or both, including dates or weeks of entitlement during any such period or periods. 16. The decision of the referee on the supersedeas issue shall not be appealable as provided in the fourth paragraph of Section 413(a) of the Act. 77 P.S. $774. 17. Statutory interest as provided by section 406.1 of The Pennsylvania Workmen’s Compensation Act, Pa. Stat. Ann. tit. 77, $717.1 (Purdon Supp. 1982) shall be paid to all members of the plaintiff class determined by a referee to be entitled to receive a retroactive award of compensation. 18. For purposes of any Special Supersedeas Hearing required to be held under the terms of this Decree, the referee presently assigned the pending termination petition shall schedule and conduct the supersedeas hearing and render a decision on the supersedeas, except when temporary transfers are necessary to accommodate the illness or other unavailability of a referee or a disproportionately heavy caseload. 19. In all pending pre-February 2, 1984 automatic supersedeas cases in which the evidentiary record has been closed, a Special Supersedeas Hearing is not required to be held, provided however, that if a decision on the merits of the termination petition has not been rendered within seven (7) days following the expiration of the sixty (60) day period after the court’s final approval of the Decree, the payment of benefits shall be resumed only prospectively by the insurance carrier or self- insured employer which filed the termination petition in which an automatic supersedeas was taken; provided, further, that the payment of benefits need not be 122a Joint Motion and Proposed Consent Decree. resumed prospectively if the referee finds in writing within the aforesaid sixty-seven (67) day period that the delay in rendering a decision on the merits was attributable to acts or omissions of the claimant or claimant’s counsel of record; provided further that at any time after the automatic resumption of benefits pursuant to the expiration of the aforementioned sixty-seven (67) day period, the Referee may order a _ temporary suspension of benefits where a Referee finds a delay in rendering a decision on the merits is attributable to acts or omissions of the claimant or claimant’s counsel; and provided, further, that no legal actions of any nature shall be instituted against the Commonwealth of Pennsylvania, its officials and employees, by any named or class party hereto, and no sanctions imposed against the Commonwealth, its officials and employees, in the event that a Referee has not issued a final decision in any closed case subject to this paragraph within the prescribed sixty (60) day period; provided further that the Commonwealth, its officials and employees, do not waive any defense or immunity under law. The Bureau shall direct all referees that issuing a final decision on the merits in closed cases subject to this paragraph has priority over issuing decisions in all other cases, except decisions on supersedeas issues. 123a Joint Motion and Proposed Consent Decree. VII. IDENTIFICATION OF PLAINTIFF CLASS MEMBERS WHOSE’ BENEFITS’ WERE TERMINATED UNDER THE AUTOMATIC SUPERSEDEAS PROVISIONS OF SECTION 413(a) AS A RESULT OF PETITIONS FILED AFTER FEBRUARY 1, 1984 20. Within thirty (30) days following the notice of the proposed class action settlement, each named and class defendant, insurance carrier, and self-insured employer that has terminated the workers’ compensation benefits of an individual under the automatic supersedeas provision of section 413(a) as a result of a termination petition filed with the Bureau after February 1, 1984 based upon a medical affidavit or an allegation of return to work shall conduct a review of all its pertinent files and records and shall prepare a form for all such claimants so terminated. The form shall be in the form attached hereto and marked Exhibit “‘E’’. Copies of each such form shall be transmitted to the Bureau and plaintiffs’ counsel within thirty (30) days of the date of the notice of the proposed class action settlement and shall be updated periodically to reflect any additional automatic supersedeas invoked following the date the forms are submitted until the date of the order terminating the couct’s jurisdiction. 21. Within thirty (30) days following the court’s tentative approval of the Decree, the Bureau shall conduct a review of all its pertinent files and records and shall prepare a list of all plaintiff class members whose benefits were terminated under the automatic supersedeas provisions of section 413(a) as a result of termination petitions filed on or after February 2, 1984. 124a Joint Motion and Proposed Consent Decree. A copy of the list so developed shall be promptly transmitted to plaintiffs’ counsel. The list shall contain, at a minimum, the name, address and social security number of the claimant, the identity of the insurance carrier or self-insured employer that filed the termination petition, the rate of weekly (or other) compensation benefits, the date the termination petition was filed, and an indication as to whether there was attached to the petition a physician’s affidavit of recovery or whether the petition contained an allegation that the claimant returned to work at pre-injury or greater wages. VILL REPORTING REQUIREMENTS 22. At the same time the Bureau transmits to the parties and counsel of record in the pending proceedings before the referee copies of the Special Supersedeas Hearing notices, it shall forward a copy of each such notice to counsel for plaintiffs herein. 23. At the same time the Bureau transmits to the parties and counsel of record in the pending proceedings before the referee the supersedeas decisions required by this Decree, it shall forward a copy of each such decision to counsel for plaintiffs herein. 24. Within thirty (30) days of the date of circulation of each supersedeas decision required by this Decree, each named and ciass defendant insurance carrier and self-insured employer shall file with the Bureau and transmit to plaintiffs’ counsel a certificate verifying its compliance with the referee’s supersedeas decision. The certificate so required shall be in the form attached hereto and marked Exhibit “F’’. 125a Joint Motion and Proposed Consent Decree. 25. Within thirty (30) days of the date required to resume the payment of benefits for the failure of a referee to issue a timely supersedeas decision required by this Decree, each named and class defendant insurance carrier and self-insured employer shall file with the Bureau and transmit to plaintiffs’ counsel a certificate verifying that the payment of benefits has been resumed. The certificate so required shall be in the form attached hereto and marked Exhibit “G”’. IX. ATTORNEYS’ FEES AND COSTS 26. Plaintiffs’ counsel is entitled to a reasonable award of attorneys’ fees and costs for all services and costs reasonably and necessarily incurred in the prosecution of this litigation in accordance with the provisions of the Attorneys Fees Awards Act of 1976, 42 U.S.C. §1988, as amended. Counsel for plaintiffs shall prepare a schedule of fees and costs so incurred, in accordance with the lodestar method of calculation, and without multipliers, and shall submit the schedule to a committee of counsel selected by named defendants. It is the intent of the parties to amicably negotiate reasonable fees and costs for plaintiffs’ counsel, and only if agreement is not achieved shall resort to the court be invoked. 27. The fees and costs awarded to plaintiffs’ counsel under paragraph 26 of the Decree shall be paid proportionately by each named and class insurance carrier and_ self-insured employer member of the defendant class including S.W.I.F. The liability so incurred shall be paid by each such named defendant and defendant class member in accordance with the method ‘ 126a Joint Motion and Proposed Consent Decree. and in the exact proportion used by the Bureau in its assessment for the Workmen’s Compensation Administration Fund in the year 1983. The Bureau shall send a written Notice of Assessment to all members of the defendant class promptly after the court’s approval of the fees and costs advising them of their individual liabilities under section IX of the Decree. The named and intervening defendants shall be obligated to pay their individual share of plaintiffs’ fees and costs within thirty (30) days of the court’s final approval of the plaintiffs’ fees and costs. All other insurance carriers and self- insured employers shall be obligated to pay their individual share of the plaintiffs’ counsel fees and costs by check or draft made payable to Community Legal Services, Inc. within thirty (30) days of the date of the Bureau’s Notice of Assessment, said payment to be transmitted to the Bureau which, in turn, shall transmit the payments so received directly tu plaintiffs’ counsel no later than fifteen (15) days thereafter. ai 28. The plaintiffs’ fees and costs agreed to or awarded by the court under this section of the Decree shall not include services incurred or costs associated with any future enforcement or contempt activity necessitated on plaintiffs’ behalf as a result of any violations of this Decree by any named or class defendant. Nor shall the plaintiffs’ fees and costs agreed to or awarded by the court under this section include any sums incurred with respect to any appeals filed from the court’s approval of the Decree, or with respect to the litigation associated with the severed claims to remedial relief requested by plaintiffs under paragraph 3 of the Decree. 127a Joint Motion and Proposed Consent Decree. X. MISCELLANEQUS PROVISIONS 29. No named party or its counsel shall in any way solicit or otherwise encourage objection to this Decree on the part of any class member or any other person. 30. If after notice and hearing, the Decree agreed upon by the parties is disapproved by the court, all parties shall retain their right to exercise their usual rights of appeal. 31. Except as a self-insured employer in meeting its obligations, if any, under the assessment provisions of Section 443(b) of The Workmen’s Compensation Act, the Commonwealth of Pennsylvania shall not make any payments or reimbursements from general revenues to the Workmen’s Compensation Supersedeas Fund. XI. NOTICES 32. Notice of the court’s tentative approval of the Decree, a copy of the Decree and a summary of the Decree’s provisions shall be transmitted through the Bureau to each named and class defendant insurance carrier and self-insured employer, as well as to each member of the plaintiff class whose worker’s compensation benefits have been or may have been terminated under the automatic supersedeas procedure of section 413(a) and for whom there has not yet been rendered a decision by a referee on the merits of the termination petition. These notice packages shall advise the members of the plaintiff and defendant classes of their right to file timely written objections to the Consent Decree and to be heard at a “fairness hearing” to be conducted by the court in accordance with Rule 23(e) of the Federal Rules of Civil Procedure. The notice ne 128a Joint Moiion and Proposed Consent Decree. to the members of the plaintiff class shall be in the form attached hereto and marked Exhibit ‘‘H’’. The notice to the members of the defendant class shall be in the form attached hereto and marked Exhibit ‘“J”’. 33. Any costs incident to providing notices to the plaintiff and defendant classes shall be paid by each named defendant and defendant class member in accordance with the method specified for allocation of plaintiffs’ fees and costs described in paragraph 27. XII. RETENTION OF JURISDICTION 34. The court shall retain continuing jurisdiction over this action in order to insure compliance by all parties with the terms and provisions of the Consent Decree. That jurisdiction shall terminate, either upon the court’s own motion, or upon motion of any party, at such time as the court concludes that the rights and remedies accorded by the Decree have been satisfied. HAROLD I. GOODMAN HAROLD I. GOODMAN Counsel for Class Plaintiffs Community Legal Services, Inc. Sylvania House Juniper and Locust Streets Philadelphia, Pennsylvania 19107 LeRoy S. Zimmerman Attorney General By: DEBRA K. WALLET DEBRA K. WALLET Deputy Attorney General 129a Joint Motion and Proposed Consent Decree. LOWELL A. REED, JR. LOWELL A. REED, JR. PATRICIA A. MATTERN Counsel for Bituminous Casualty Corp. Rawie & Henderson 211 South Broad Street, 15th FI. Philadelphia, Pennsylvania 19107 CHRISTOPHER J. PAKURIS CHRISTOPHER J. PAKURIS Counsel for Pennsylvania Manufacturers’ Association Insurance Co. 925 Chestnut Street Philadelphia, Pennsylvania 19107 ROBERT G. HANNA, JR. ROBERT G. HANNA, JR. Counsel for American Mutual Liability Insurance Company 1515 Locust Street, 10th Floor Philadelphia, Pennsylvania 19102 ROBERT H. NOTTALL MICHAEL CHURCHHILL ROBERT H. NOTTALL Counsel for School District of Philadelphia _p School District of Philadelphia Legal Department, Room 605B 21st and the Parkway Philadelphia, Pennsylvania 19103 130a Joint Motion and Proposed Consent Decree. WILLIAM C. STEPPACHER WILLIAM C. STEPPACHER Acting Deputy Chief Counsel State Workmen's Insurance Fund Department of Labor and Industry 100 Lackawanna Avenue Scranton, Pennsylvania 18503 JOSEPH R. THOMPSON JOSEPH R. THOMPSON Counsel for Liberty Mutual Liability Insurance Company 410 Public Ledger Building 6th and Chestnut Streets Philadelphia, Pennsylvania 19106 - l3la Order (Preliminary Approval) IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. &; ; RICHARD BAKSALARY, WILLIAM JONES, MORRIS TUCKER, and CHARLES SAMUEL Individually and on behalf of all others similarly situated, Plaintiffs, V. PAUL J. SMITH, C. JOHN URLING, JR., WILLIAM J. SHEPPARD, GRACE M. SLOAN, THE STATE WORKMEN’S INSURANCE FUND, PENNSYLVANIA MANUFACTURERS ' ASSOCIATION INSURANCE COMPANY, AMERICAN MUTUAL LIABILITY INSURANCE COMPANY, THE SCHOOL DISTRICT OF PHILADELPHIA, BITUMINOUS CASUALTY CORPORATION, and all other insurance carriers and/or self-insured employers similarly situated, Defendants. Filed May 14, 1984. ENTERED: 5-15-84. 132a Order (Preliminary Approval). ORDER On April 27, 1984, the parties jointly moved for preliminary approval of a consent decree and for approve! of transmission of notice of the settlement to members of the plaintiff and defendant classes. Upon consideration of that motion, the memorandum in support thereof, and the proposed consent decree, the court determined that it could not preliminarily approve the consent decree as drafted. However, the court determined that it could preliminarily approve the proposed consent decree if paragraph 2, on page 6 of the proposed decree, were amended to read: “It is specifically understood by and among the parties that the Decree (as distinct from the various opinions of the Court in this matter) shall not have any, precedential impact in any litigation save this one.” On the afternoon of May 8, 1984, Judge ‘Pollak held a telephone conversation with Patricia Mattern, Esq., Debra Wallet, Esq., and Harold Goodman, Esq. Ms. Mattern represented that she and Lowell Reed, Esq., who both represent Bituminous Casualty Corporation, had been able to contact all counsel other than counsel for the State Workmen’s Insurance Fund and Ms. Mattern further represented that she had authority to act on all private defendants’ behalf. Judge Pollak explained the court’s suggested amendment at that conference. On May 10, Ms. Mattern, Ms. Wallet, and Mr. Goodman contacted Judge Pollak’s chambers to represent that all parties, including SWIF, had agreed to the amendment of paragraph 2. —" —— ee 133a Order (Preliminary Approval). Accordingly, IT IS ORDERED that: 1. The proposed consent decree, amended as described below, is preliminarily APPROVED since it appears to be, at this stage of the proceedings, a fair, adequate, and reasonable resolution of the litigation. This approval extends to the proposed Consent Decree as filed on April 27, 1984, with paragraph 2 amended to read: “It is specifically understood by and among the parties that the Decree (as distinct from the various opinions of the Court in this matter) shall not have aay precedential impact in any litigation save this one.” 2. Transmittal of notice of the Decree by the Bureau of Workers’ Compensation to members of the plaintiff and defendant classes is APPROVED. The form and content of the respective class notices, as set forth in exhibits H and J to the Decree, with appropriate insertions of dates, are also APPROVED. 3. The Bureau of Workers’ Compensation (‘‘Bureau’’) - shall transmit the proposed Consent Decree as amended and class notices to members of the plaintiff and defendant classes by regular mail as promptly as possible, and in any event no later than ten (10) days after the date of the entry of this Order. The Bureau shall file with the Clerk of Court a notarized affidavit, with copies served on counsel of record, attesting to the transmission of these documents to members of the plaintiff and defendant classes. 4. Written objections, if any, to the proposed Decree and the plaintiffs’ proposed resolution of the unsettled issue, identified in paragraph 3 of the Decree, if any, must be filed with the Clerk of Court within thirty (30) days of the date of this Order, i.e., on or before June 13, 134a Order (Preliminary Approval). 1984. Any such filings should briefly but clearly state the basis for the objection presented. 5. The court will hold a fairness hearing on June 18, 1984 (i.e., thirty-five days after the date of this Order) at 8:45 a.m., in Courtroom 13B to consider whether to grant final approval to the proposed Decree, and to consider the resolution of the unsettled issue identified in paragraph 3 of the Decree. At this hearing, any member of the plaintiff or defendant class, or the class member's counsel, who has filed a timely written objection to the Decree, may present to the court the basis for any such objection, or such other comments as the court may deem to be relevant and material to its consideration whether to grant final approval to the Decree and to its resolution of the unsettled issue identified in paragraph 3 of the Decree. 6. Counsel for the moving parties to the Joint Motion may respond at the fairness hearing to any objections or comments presented to the Decree. Further, these counsel shall be permitted to file written responses, to the extent deemed necessary and at such time as determined by the Court, to the objections and/or comments raised by any class member at the fairness hearing. \ ARLIN M. ADAMS ARLIN M. ADAMS, Circuit Judge CLIFFORD SCOTT GREEN CLIFFORD SCOTT GREEN, District Judge LOUIS H. POLLAK LOUIS H. POLLAK, District Judge May 14, 1984 135a Appearance (Objecting Defendants) Dated June 6, 1984 SWARTZ, CAMPBELL & DETWEILER BY: R. D. Harburg, Esquire Identification No. 03966 17th Floor, Land Title Building Philadelphia, Pa. 19110 (215) 564-5190 Attorney For IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania Civil Action No. 76-429. RICHARD BAKSALARY et al., v. PAUL J. SMITH et al. Filed June 6, 1984; MICHAEL E. KUNZ, Clerk. By (Illegible) Dep. Clerk. ENTRY OF APPEARANCE TO THE CLERK OF COURT: | Kindly enter our appearance on behalf of some and several of the members of defendant class, in the above captioned action, who are neither named nor have previously intervened, including Aetna Fire Underwriters Insurance Company, Aetna Insurance Company, Argonaut Insurance Company, B P Oil Company, Inc., 136a Appearance (Objecting Defendants) Dated June 6, 1984. Bankers Standard Insurance Company, The Budd Company, Century Indemnity Company, CIGNA Insurance Company, Commercial Union Insurance Company (American Employers Insurance Company, The Employers Fire Insurance Company, and The Northern Assurance Company of America), Firemans Fund Insurance Company (American Automobile Insurance Company of Illinois, Associated Indemnity Corp. and Firemans Fund Insurance Company of Wisconsin), Harleysville Mutual Insurance Company, Indemnity Insurance Company of North America, Insurance Company of North America, Ohio Casualty Group of Insurance Companies, Pacific Employers Insurance Company, Reliance Insurance Company, (Planet Insurance Company and United Pacific Insurance Company), Royal Insurance Company and Wausau Insurance Companies, in order to preserve objections to the entire constitutional determination by the Court in its Opinion, dated February 1, 1984, and desiring to now comment on the proposed settlement encompassed in Consent Decree. R. D. HARBURG R. D. HARBURG, Esquire SWARTZ, CAMPBELL & DETWEILER 137a Statement/Objections (Objecting Defendants) SWARTZ, CAMPBELL & DETWEILER By: R. D. Harburg, Esquire Identification No. 03966 FILED 17th Floor, Land Title Building JUN 06 1984 Philadelphia, Pa. 19110 Michael E. Kunz, Clerk (215)564-5190 By (Illegible) Dep. Clerk IN THE UNITED STATES DISTRICT COURT For the Eastern District of Pennsylvania RICHARD BAKSALARY, et ai., v. PAUL J. SMITH, et ai. Civil Action No. 76-429. STATEMENT/OBJECTIONS R. D. Harburg, Esquire, and with him Swartz, Campbell & Detweiler, Esquires, as counsel to and for some and several of the members of defendant class who are neither named nor have previously intervened including Aetna Fire Underwriters Insurance Company, Aetna Insurance Company, Argonaut’ Insurance Company, B P Oil Company, Inc., Bankers Standard Insurance Company, The Budd Company, Century Indemnity Company, CIGNA Insurance Company, Commercial Union Insurance Company (American Employers Insurance Company, The Employers Fire Insurance Company and The Northern Assurance 138a Statement/Objections (Objecting Defendants). Company of America), Firemans Fund _ Insurance Company (American Automobile Insurance Company of Illinois, Associated Indemnity Corp. and Firemans Fund Insurance Company of Wisconsin), Harleysville Mutual Insurance Company, Indemnity Insurance Company of North America, Insurance Company of North America, Ohio Casualty Group of Insurance Companies, Pacific Employers Insurance Company, Reliance Insurance Company (Planet Insurance Company and United Pacific Insurance Company), Royal Insurance Company and Wausau Insurance Companies, in order to preserve objections to the entire constitutional determination by the Court in its Opinion, dated February 1, 1984, and desiring to now comment on the proposed settlement encompassed in Consent Decree, files the instant written statement in the form of Objections pursuant to Paragraph 4 of the Order of Court dated May 14, 1984 and ‘‘Settlement Procedure”’ as set forth in Article I of Exhibit ‘“J”’. I. PRE-FEBRUARY 2, 1984 AUTOMATIC SUPERSEDEAS The procedure set forth for injunctive relief for pre- February 2, 1984 automatic supersedeas in Article V of the proposed Consent Decree is unduly complicated, burdensome and unnecessary. It is suggestec, and indeed urged that the same or substantially similar result can be accomplished in far simpler and more expeditious manner without the need of monitoring by counsel for plaintiff or retention of jurisdiction by the Court. ak FO ee ae ee ae es Ee eee « - Seats ante inte. aed 139a Statement/Objections (Objecting Defendants). Rather than provide for ‘Special Supersedeas Hearings’’, this Court could simply order that in any case pending before a Hearing Referee, where automatic supersedeas has been effected on the basis of physician's affidavit of full recovery, then, with both parties having the right to present evidence bearing on the supersedeas issue, at the next regularly scheduled hearing, but in no event more than 90 days from this Court’s final Order, the Referee (who, within that time, ordinarily would have held a regular hearing on almost every case assigned to him anyhow), shall determine whether any such supersedeas is or is not to remain in effect. The Referee’s order can be made on a form similar to the one already in use for Request for Supersedeas, and any ruling of ineffectiveness of a particular supersedeas could then result in reinstatement of benefits due with statutory interest, and continuing payment of compensation benefits as would have been required absent takingof automatic supersedeas in the first instance. \ II. POST-FEBRUARY 1, 1984 AUTOMATIC SUPERSEDEAS Declaring in paragraph 3. of Article II of the proposed Consent Decree that it “does not resolve” the issue of post-February 1, 1984 automatic supersedeas, and reserving this for “‘litigated judgment’’ is inexplicable, improvident and unfair. If, after eight years of litigation, the named parties . have arrived at a proposed settlement which the Court has preliminarily approved, it seems inexplicable that such settlement should except petitions filed after the 140a Statement/Objections (Objecting Defendants). Opinion of Court on February 1, 1984 and prior to the Court’s Declaratory Order of March 15, 1984. It was only as of March 15, 1984 that any of the members of either class were favored with a formal order which, at that time, specifically stated: “Any invocation by any defendant of the automatic supersedeas provision after this date in order to terminate an_ individual’s worker's compensation benefits without prior notice or a pre- termination opportunity to be heard is hereby Declared to be a deprivation of that individual’s property without due process of law’’. (Emphasis supplied) Surely, it was only after March 15, 1984 then, that any class member or their counsel could reasonably have been expected to be subject to any formal prohibition against seeking automatic supersedeas by Petition for Termination based on a physician's affidavit of full recovery. It is therefore urged to be improvident and unfair to suggest that there is either reason or need to treat differently automatic supersedeas taken prior to February 1, 1984, and any of those that may have been taken between February 1, 1984 and March 15, 1984. The procedure suggested above for pre-February 2, 1984 automatic supersedeas would apply equally well and fairly to supersedeas taken between February 1, 1984 and March 15, 1984, and thereby would avoid unnecessarily prolonging already extended litigation, and now drawing into this litigation other members of the class who did not previously have the benefit of participation. tact Te i 14la Statement/Objections (Objecting Defendants). Certainly, preferred disposition would be to treat all cases of automatic supersedeas up to the Court’s Declaratory Order of March 15, 1984 in the same fashion thereby obviating any additional litigation and any alternative procedure that would simply introduce unnecessary elements of expense and confusion. Verification of compliance can of course be perfectly well accomplished by the Pennsylvania Workmen's Compensation Bureau utilizing its own in-place personnel and procedures. Ill. RETURN TO WORK AT PRIOR OR INCREASED EARNINGS As a proposed Order that fails to differentiate between automatic supersedeas taken on the basis of physician’s affidavit of full recovery as against automatic supersedeas on the basis of return to work without loss of earning power in Articles III, IV and V, the Consent Decree is unreasonable, inappropriate and unfair. While it would appear that throughout the proceedings as described of record, the Court has been directing its attention to that portion of Section 413(a) of the Pennsylvania Workmen’s Compensation Act, which deals with automatic supersedeas either on the basis of physician’s affidavit or on the basis of a return to work, still, a reading of the Court’s own Opinion, and in particular Judge Adams’ Concurring Opinion, joined in specifically by Judges Green and Pollak, certainly suggests that the Court’s principal concern lay with the fact that: (Concurring Opinion 2/1/84, P. 5, 8—Emphasis supplied) 2 142a Statement/Objections (Objecting Defendants). ? “First, the statute imposes no requirement of notice to the employee prior to termination’, and “The second deficiency in the Pennsylvania arrangement is that it provides no independent check by state authorities on the termination certification by a physician.” Indeed, in the case referred to and relied upon, Auxier v. Woodward State Hospital-School, 266 N.W.2d 139 (1978) cert. denied., 429 U.S. 830 (1979), the Supreme Court of Iowa in turn “relying on Mathews” (Mathews uv. Eldridge, 424 U.S. 319 (1976)) specifically excepted from its declaration of what due process demands, those cases ‘where the claimant has demonstrated recovery by returning to work”’. (P. 142—Emphasis supplied—as cited by Adams, J. Concurring Opinion 2/1/84. P. 7) Pennsylvania is, of course, a “loss of earnings state”’ such that payment of workmen’s compensation disability benefits is intended only where an employee is, in fact, suffering a loss of earnings by reason of a work connected injury (except for certain “scheduled losses’’). It would therefore be entirely inappropriate, if not to say destructive of the system, to suggest that an employer has any ongoing obligation for payment of compensation benefits once an employee has returned to work at regular wage. Requiring ccatinuing payment of disability benefits to an employee who has resumed employment at equivalent or greater wage would not only make for an absolutely unintended, improvident favoring of the injured employee over one who is not injured, but would, we- suggest, in fact constitute a decidedly more grave {> 143a Statement [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0102%3A2. Public record. Not legal advice.