Act, and request this Court to assume pendent jurisdiction of state law claims of plaintiff arising out of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. 73 P.S. § 201-1, et seq.
Plaintiffs have filed a motion for an order certifying two sub-classes of indigent persons residing in Allegheny, Beaver, Butler and Lawrence Counties. One sub-class consists of all persons who have already been sued by PHEAA. The other consists of persons who have incurred a guaranteed student loan obligation, whose obligation has been declared to be in default, but against whom no suit has as yet been filed.
An application to intervene in the action was filed by plaintiffs' counsel on behalf of Donna and Raymond Mareno in January of 1979. Intervenors filed a complaint challenging confession of judgment procedures used to cause entry of judgment on a purported student loan obligation in a distant forum. Intervenors sought permanent injunctive and declaratory relief from PHEAA's conduct on essentially the same legal theories as original plaintiffs. The application to intervene was granted by this Court.
By Opinion and Order dated February 21, 1980, in the instant case, this Court requested information relevant to defining "low income individuals" for purposes of class certification. Having received such information from the parties, the Court is now in a proper posture to pass upon plaintiffs' motion for class certification, plaintiffs' motion for summary judgment and defendants' motion for summary judgment.
A detailed discussion of all criteria relevant to class certification can be found in the February 21, 1980 Opinion in the case sub judice. This Court found all requirements necessary for class certification to be present except for an adequate definition of "low income individual." Upon consideration of suggested standards for an appropriate definition of "low income individual", the Court adopts the guidelines used to establish eligibility for entitlement to social services under Title 20 of the Social Security Act, 42 U.S.C. § 1397, et seq. This standard establishes 40% of the median income of Pennsylvania citizens as the outer boundary. Any individual with less than 40% of the median income of Pennsylvania citizens would qualify as a low income individual. This is consonant with legal representation of the class by the Neighborhood Legal Services since legal service clients are screened under the same standards.
PHEAA suggests that it will have a problem with identification of low income individuals under this standard because information concerning both family size and family income is not available to it. PHEAA therefore contends that it will be unable to determine whether or not a potential defendant is a member of the class. The concern of PHEAA, while well founded, is easily remedied. The agency should send a questionnaire by certified mail to the potential defendant requesting information on the defendant's family size and family income. Along with the questionnaire, a general explanation of the purpose for requesting such data can also be enclosed. When the data is returned, PHEAA will then be able to determine whether or not the defendant qualifies as a class member. If no response is received within a reasonable time, PHEAA would then be free to institute suit in Harrisburg.
In accordance with the foregoing procedures, this action will be certified as a class action with two sub-classes. Plaintiffs Phillips, McGaffick and Mareno will represent the members of one sub-class, defined as all low income residents of Allegheny, Beaver, Butler or Lawrence Counties who have been sued by defendant PHEAA in Dauphin County, Pennsylvania. Plaintiff Greeley will represent the members of the second sub-class, defined as all low income residents of Allegheny, Beaver, Butler or Lawrence Counties who will be sued by PHEAA in Dauphin County, Pennsylvania. For purposes of both sub-classes, low income residents are persons with incomes below 40% of the median income for Pennsylvania residents of similar family size.
MOTIONS FOR SUMMARY JUDGMENT
Insofar as plaintiffs' complaint seeks to prevent the collection of monies for attorneys' fees unless the promissory note executed by the debtor expressly authorizes such recovery, there is really very little in dispute. Both parties agree that PHEAA has requested attorneys' fees from defaulting students where such fees are not explicitly authorized by the loan agreement. Both parties also agree that any such awards for attorneys' fees would be improper. PHEAA, however, contends that an injunction is unnecessary because it has discontinued the practice and will not attempt to collect monies for attorneys' fees where sought in complaints previously filed. To insure fruition of PHEAA's good intentions, the Court will nonetheless enter an injunction prohibiting the collection of attorneys' fees except where specifically authorized by the loan agreement. PHEAA is thus required to do no more than that which it intends. The only remaining concern, therefore, is the propriety of instituting all lawsuits in Harrisburg.
Plaintiffs' primary legal theory in attacking the filing of all lawsuits in Harrisburg is grounded upon 42 U.S.C. § 1983. Section 1983 provides as follows:
"Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any state or territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress."
There are two essential predicates to a cause of action under Section 1983:
1. PHEAA must have acted under color of state law, and
2. Plaintiffs must have been deprived of rights secured to them by the Constitution.
PHEAA's acts occurred under color of state law. PHEAA exists by virtue of an enactment of the Pennsylvania legislature in which it was designated as "a body corporate and politic constituting a public corporation and government instrumentality." 24 P.S. § 5101. Additionally, filing of all lawsuits in Harrisburg by the PHEAA is encouraged as a result of favorable state venue provisions. These factors indicate that PHEAA is acting under color of state law.
The issue of whether or not plaintiffs have been deprived of any rights secured to them by the Constitution is decidedly more complex. Plaintiffs posit two theories in this regard:
1. PHEAA's invocation of the judicial system in a distant forum denies plaintiffs a meaningful opportunity to be heard in violation of the due process clause of the Fourteenth Amendment to the United States Constitution.
2. PHEAA's conduct constitutes tortious activity which violates rights secured to plaintiffs under Section 1983. Plaintiffs' constitutional claims will be considered first.
Plaintiffs' constitutional claims allege that instituting debt collection lawsuits in Harrisburg, Pennsylvania constitutes a denial of an opportunity for plaintiffs, residents of Western Pennsylvania, to defend against the lawsuits. It is thus alleged that in acting in a manner which deprives plaintiffs of a meaningful opportunity for a hearing on PHEAA's claims, PHEAA has deprived plaintiffs of rights secured to them by the due process clause of the Fourteenth Amendment to the United States Constitution.
Access to a judicial forum has seldom been the subject of due process analysis. Guidance, however, can be found in the case of Boddie v. Connecticut, 401 U.S. 371, 91 S. Ct. 780, 28 L. Ed. 2d 113 (1971). Boddie was a class action brought on behalf of all female welfare recipients residing in Connecticut and wishing divorces, but prevented from bringing divorce suits by Connecticut's statutes requiring payment of court fees and costs for service of process as a condition precedent to access to the courts. The plaintiffs sought in the United States District Court for the District of Connecticut a judgment declaring the statutes invalid as applied to the class, and an injunction requiring defendant to permit members of the class to sue for divorce without payment of any fees and costs. A three judge court dismissed the complaint for failure to state a claim. On appeal, the Supreme Court of the United States reversed. In an opinion by Justice Harlan, it was held that a state denies due process of law to indigent persons by refusing to permit them to bring divorce actions except on payment of court fees and service of process costs which they are unable to pay. Boddie at 376-377, 91 S. Ct. at 785 is particularly instructive:
"Thus, although they assert here due process rights as would-be plaintiffs, we think appellants' plight, because resort to the state courts is the only avenue to dissolution of their marriages, is akin to that of defendants faced with exclusion from the only forum effectively empowered to settle their disputes. Resort to the judicial process by these plaintiffs is no more voluntary in a realistic sense than that of the defendant called upon to defend his interests in court. For both groups this process is not only the paramount dispute-settlement technique, but, in fact, the only available one."
Boddie therefore stands for the proposition that access to court is a fundamental prerequisite of due process where such a forum is the only one available for a resolution of the particular dispute.
To be sure, Boddie does not sanction indiscriminate access to all tribunals at all times and under all circumstances. Thus, it is not surprising that the Supreme Court refused to invalidate a filing fee of $ 50 for indigent persons seeking a discharge in bankruptcy. United States v. Kras, 409 U.S. 434, 93 S. Ct. 631, 34 L. Ed. 2d 626 (1973). The Court understandably rejected such a challenge primarily noting that other modes of resolving the problem were open to Kras. Resort to the bankruptcy court, therefore, was not the exclusive path to relief. Similarly, Ortwein v. Schwab, 410 U.S. 656, 93 S. Ct. 1172, 35 L. Ed. 2d 572 (1973) held that indigents did not have unqualified access to appellate review of an administrative determination. Again, the appellate procedure was not the sole means of dispute resolution. In fact, the appellants in Ortwein had the benefit of administrative hearings. The hearings provided a procedure, not conditioned on the payment of any fee, through which to seek redress of their grievances. Kras and Ortwein cannot be fairly read to govern the case sub judice.
Plaintiffs have been involuntarily summoned to defend their interests in a court to which they do not have access. Due process requires that persons forced to settle their claims through the judicial process must be given a meaningful opportunity to be heard. Plaintiffs are being denied any opportunity to be heard by the systematic filing of lawsuits in Harrisburg.
Subsequent to Boddie, the United States Supreme Court set forth a now commonly used three-factor test in Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976) to determine what due process is required in a given situation. The Court stated:
"Our prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interests that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail." 424 U.S. at 335 to 336, 96 S. Ct. at 903.