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 Rules 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 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This action has proceeded before a three-judge district court convened pursuant to 28 U.S.C. § 2281 (repealed).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, suspend, reduce, or otherwise deprive benefits to previously eligible claimants without advance notice and opportunity for a prior evidentiary hearing. . . ." Id.
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 Compensation 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.
On February 14, 1984, counsel for plaintiffs informed Judge Pollak'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, para. 1 (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 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
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.