Having found the existence of a protected property interest, the Court must now address whether the members of the plaintiff class are being denied due process in the manner in which they have been or will be deprived of that property interest. Due process in this case consists of adequate notice and opportunity to be heard prior to termination.
Plaintiffs make two claims.
Plaintiffs contend first that for those recipients who did take an appeal, termination of benefits prior to a final determination of status constitutes a violation of due process. Defendant admits that the procedure adopted permits a 30-day gap in the appeal process when benefits will already have ceased. This is a clear violation of the mandate of Goldberg v. Kelly. The Supreme Court stated in Goldberg: "the crucial factor in this context -- a factor not present in the case of . . . virtually anyone else whose governmental entitlements are ended -- is that termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits." 397 U.S. at 264, 90 S. Ct. at 1018. The requirement of a pre-termination hearing necessarily includes a final decision in the hearing process. Indeed, Act 75 contemplates continued benefits pending appeal. Section 9 of the Act provides that "if the appellant is already receiving assistance and requests a fair hearing within the timely notice period, assistance shall not be terminated until a decision is rendered in the hearing." Accordingly, the Court finds that it was a violation of due process to terminate those recipients who had appealed the administrative determination that they were transitionally needy prior to a final decision in the type of hearing required by the Goldberg case.
Plaintiffs' second claim is that the letters sent to the class members to advise them of the change in their status did not provide an adequate notice under constitutional standards.
"An elementary and fundamental requirement of due process . . . is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Bank and Trust Co., 339 U.S. 306, 314, 70 S. Ct. 652, 657, 94 L. Ed. 865 (1950). See also, Greene v. Lindsey, 456 U.S. 444, 102 S. Ct. 1874, 72 L. Ed. 2d 249 (1982).
Each class member in this case received a copy of a form letter, Exhibit P-1, p. 17, stating as to each recipient the date and amount of the last check to be received.
This letter informed the recipient that he or she had been determined to be transitionally needy, that benefits would terminate on the date specified, and that there was a right to appeal and request a hearing. The letter was clear on those points.
The letter also stated that the chronically needy were entitled to continue receiving General Assistance so long as they met the categories of eligibility for continuation of benefits as a chronically needy individual. Act 75 provides for eight specific categories of chronically needy persons but the letter states only that "chronically needy persons are those who because of age, physical or mental handicap or other limited circumstances are less likely to be able to provide for themselves without public assistance."
In determining the constitutional sufficiency of the letter sent by DPW and whether a more detailed notice was necessary, the Court is required to consider and balance three different factors.
First, the private interest 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 fiscal and administrative burdens that the additional or substitute procedural requirements would entail.
Mathews v. Eldridge, 424 U.S. 319, 334-35, 96 S. Ct. 893, 902-03, 47 L. Ed. 2d 18 (1976).
1. The Private Interest
There can be no question that the private interest in this case, the continued receipt of welfare payments, is substantial. Under Act 75 a person is only entitled to receive unlimited benefits if he or she is chronically needy. Thus, the class members have a substantial interest in the correct determination of whether they are chronically or transitionally needy. Their interest necessarily includes having full and adequate information about the criteria for eligibility so they can make an informed decision on whether to appeal the determination that they are only transitionally and not chronically needy.
2. The Additional Safeguard Sought and the Risk of Erroneous Deprivation
The additional safeguard sought by the class is a notice that sets forth clearly the eight specific categories of chronically needy recipients. This information would provide plaintiffs with the opportunity to make an informed choice about whether an appeal should be taken. Each category is specific and its definition not always obvious from the descriptive term "chronically needy."
For example, the letter sent to the class provides that one may be considered chronically needy because of age, but it does not state what age. The age specified in the statute is 45 years. A person reading this letter might well assume the age limit was 65 and therefore if they were between 45 and 65, might not realize the importance to them of taking an appeal. Other categories, such as the one for treatment in an alcohol or drug abuse program, the caretaker exception and a complicated provision involving periods of employment and unemployment compensation benefits also are not readily apparent from the face of the notice and the recipient might not realize that he or she was eligible for continued benefits.
With regard to the risk of erroneous deprivation, the testimony at the hearing established that DPW does maintain in its files some information relevant to whether or not a recipient should be categorized as chronically rather than transitionally needy. This is particularly true for this class because DPW began to keep logs of those persons who became eligible for General Assistance after the passage of Act 75. But this does not necessarily mean that the information in DPW's file is complete and fully accurate. As the Court said in Goldberg v. Kelly, there is always a possibility of "honest error or irritable misjudgment," 397 U.S. at 266, which would go uncorrected unless the recipient is aware of the basis of the error and the grounds for appeal.
3. The Government Interest
The government has asserted no interest in not providing a more complete notice of the categories of chronically needy.
Indeed, they have prepared a more detailed notice entitled "New General Assistance Eligibility Requirements," of Exhibit P-1, p. 19, for the information of DPW personnel which was sent to and posted at some local offices. A form of this notice is under consideration for those persons on assistance prior to April 8 and grandfathered until December 31. The only interest claimed by the Commonwealth is the administrative burden and cost of having to send out additional notices, and to pay class members additional benefits in the meantime. This is considered with regard to the appropriate form of relief.
4. The Balance
After considering all the above factors, the court has concluded that plaintiff is likely to prevail on its claim that the notice provided to the class was constitutionally inadequate. Sending out an adequate informative notice in the first place would have cost the state little or practically nothing and the benefits of such a notice in providing a meaningful opportunity for a hearing are extremely weighty. Although the letter sent was clear that benefits are being eliminated and the recipients could have contacted their caseworkers to find the reasons therefor, in these circumstances the burden should not have been placed on the recipients to do so. Vargas v. Trainor, 508 F.2d 485, 489-90 (7th Cir.1974), cert. denied, 420 U.S. 1008, 95 S. Ct. 1454, 43 L. Ed. 2d 767 (1975); Phila. Welfare Rights Org. v. O'Bannon, 525 F. Supp. 1055, 1060-61 (E.D.Pa.1981).
Accordingly, because there was no notice specifying the circumstances under which the class could have continued to receive welfare benefits, the form letter was constitutionally defective as an inadequate notice. O'Bannon, supra; Vargas, supra. See also Finberg v. Sullivan, 634 F.2d 50 (3d Cir. 1980) (in garnishment action, failure of notice to inform debtor of exemption under federal law for social security benefits was a violation of due process); Banks v. Trainor, 525 F.2d 837 (7th Cir. 1975), cert. denied, 424 U.S. 978, 96 S. Ct. 1484, 47 L. Ed. 2d 748 (1976) (because notices did not inform recipients of factors relevant in determining net food stamp income, the plaintiff class could not inform caseworkers of expenditures properly considered). Cf. Jackson v. O'Bannon, CCH Medicare and Medicaid Guide, para. 31,108 (E.D.Pa.1980) (notice inadequate where it tended to obscure rather than disclose the proposed action). But see, Phila. Welfare Rights Org. v. O'Bannon, 517 F. Supp. 501 (E.D.Pa.1981), aff'd, 681 F.2d 808 (1982) (notice contained all information required by federal and state regulation).
B. Threat of Irreparable Injury
Plaintiff class having established the likelihood of succeeding on the merits of its claim that class members were deprived of the continued receipt of benefits without adequate notice and hearing, there can be no question that class members will suffer irreparable injury pending the litigation if injunctive relief is not granted. As stated in Goldberg v. Kelly, "by hypothesis, a welfare recipient is destitute, without funds or assets." 397 U.S. at 261, 90 S. Ct. at 1016, quoting from Kelly v. Wyman, 294 F. Supp. 893, 899 (S.D.N.Y.1968); his need for benefits has been characterized as a "brutal need." See also, id. 397 U.S. at 264, 90 S. Ct. at 1018 (termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits).
C. The Interest of Other Persons Involved and the Public Interest
There are two classes of persons other than members of plaintiff class that the Court must consider in deciding the appropriateness of injunctive relief. The first is chronically needy recipients and recipients of Aid to Families with Dependent Children. It has been argued that their rights are implicated because Section 20 of the Act provides that:
(a) On July 1, 1982, the Department of Public Welfare shall raise general assistance and aid to families with dependent children allowances for assistance units of three or more persons by an average of at least five percent.
(b) If the department is prevented by court order from implementing the provisions of Section 10 of this amendatory act, the provisions of this section shall be suspended and shall not take effect until the provisions of Section 10 are implemented.
The Court finds that the provisions of Section 20(b) would not apply to the relief requested of the Court Relief, if granted, will not prevent implementation of Section 10. To the contrary, any relief provided by the Court will only mandate that the implementation of Act 75 by DPW be done in a manner that comports with the Constitution as well as with the expressed will of the Legislature that recipients continue to receive benefits pending a final decision on their claims.
The second class of persons whose interests are implicated here includes both DPW and the general public, interests of which are identical. Both share the same interest in conserving public funds by preventing ineligible persons from receiving welfare moneys to which they may not be entitled. They further share an interest in the administrative costs and burdens, if DPW is ordered to send new notices, to reinstate class members who were terminated without adequate notice and hearing and to continue the benefits of such persons until a final decision is made if they appeal. But DPW and the public also share an interest in seeing that those recipients rightfully entitled to continued welfare benefits under Act 75 receive them. That interest can best be insured through adequate notice and opportunity for hearing.
The Court has carefully considered and balanced the four factors described above. Plaintiffs have demonstrated a likelihood of success on the merits, and the dangers of irreparable harm. These factors outweigh the interests asserted by DPW and therefore the Court concludes that some injunctive relief is required.
The Court is mindful that the administrative burden of injunctive relief on the state will be heavy. The Court heard detailed testimony about the process through which cases are opened and closed and what is involved in reinstating benefits to those already terminated. With this in mind, the Court has carefully tailored the relief that will be granted.
In formulating relief, two groups of recipients must be considered. The first group consists of persons whose names have already been computer programmed for termination. This group includes both persons whose benefits have already ceased and those whose benefits will cease within two weeks after the date of entry in the computer. This entire group has in effect been "administratively terminated." The second group consists of persons who have been identified for termination as transitionally needy but who have not yet been programmed for termination on the computer.
Both the above groups are entitled to constitutionally adequate notice. The recipients' interest in receiving such notice, together with their interest in a meaningful opportunity for a hearing outweighs the administrative burden of sending out additional notices and providing the additional hearings that may be requested as a result. Therefore, promptly hereafter defendants shall send all class members notices that comply with constitutional requirements in specifying the eight categories of chronically needy individuals who are entitled to receive continued welfare benefits. This notice shall further provide that the recipient has a right to appeal within 10 days of the issuance of the notice and that if an appeal is taken, benefits will continue pending a final administrative decision in the hearing process.
Those recipients who have not yet been administratively terminated may not be terminated until they have received adequate notice and an opportunity for hearing. Although continuing the benefits of these recipients for this limited time period will be a monetary burden on the state, the due process rights at stake here outweigh the cost. DPW can resolve the matter expeditiously by providing prompt notice and hearings to these recipients. See, Goldberg, supra at 266.
Those recipients who have already been administratively terminated have an equally strong interest in having their benefits continued pending receipt of adequate notices, but the burden on the state to reinstate their benefits
is much greater. In order to reinstate benefits to those persons who were terminated, DPW must reopen their case by reprogramming its computer. The testimony established that this would involve a large amount of computer time and impede timely implementation of constitutionally adequate notice to the class as a whole.
The administrative burden is particularly onerous because benefits for some recipients would be reinstated for no more than twenty-five days.
Because of the short period of time involved and the administrative burden of reinstating benefits, the Court finds that the balance of equities favors not reinstating all those administratively terminated regardless of right or intention to appeal. Accordingly, those recipients whose benefits have already been administratively terminated must receive constitutionally adequate notice of their termination,
but they need not be reinstated unless and until they file a notice of appeal. In that event, their benefits must be reinstated by DPW pending a final administrative decision.
III. FINAL INJUNCTIVE RELIEF
At a conference following the grant of plaintiff's motion for preliminary injunctive relief, the parties agreed that it was unnecessary to create any further record on plaintiff's motion for permanent injunctive relief.
Accordingly, the trial on the merits was deemed advanced and consolidated with the hearing on the preliminary injunction and is deemed permanent and a final disposition on the merits of this matter.