author: ORRICK, District Judge.

text:
    Raymon and Joann LYNCH, et al., Plaintiffs, v. Peter RANK, Director of the Department of Health Services of the State of California, et al., Defendants. Peter RANK, Director of the State Department of Health Services, et al., Defendants and Third Party Plaintiffs, v. Margaret HECKLER, Secretary of Health and Human Services, et al., Third Party Defendants.
    No. C-83-2340 WHO.
    United States District Court, N.D. California.
    March 9, 1984.

      Daniel Brzovic, Bet Tzedek Legal Services, Los Angeles, Cal., Evelyn R. Frank, Legal Aid Society of Alameda County, Oakland, Cal., for plaintiffs.
    John K. Van De Kamp, Atty. Gen., Charlton G. Holland, Catherine M. Van Aken, Deputy Attys. Gen., San Francisco, Cal., for defendant Rank.
    Joseph Russoniello, U.S. Atty., John F. Barg, Asst. U.S. Atty., Northern Dist. of Cal.,- San Francisco, Cal., for third party defendant Heckler.
   OPINION AND ORDER

ORRICK, District Judge.

The Pickle Amendment to the Social Security Act, 42 U.S.C. § 1396a(note), was designed “to insure that an increase intended to benefit the aged and disabled would not have inadvertent harmful effects.” S.Rep. No. 94-1265, 94th Cong., 2d Sess. 28 (1976), reprinted in 1976 U.S.Code Cong. & Ad.News 5997, 6022. Congress intended the Amendment to nullify the detrimental effect of social security cost-of-living increases on certain recipients’ eligibility for Medicaid benefits; such increases raised the recipient’s countable income level beyond the qualifying limit for Supplemental Security Income (“SSI”) payments. Loss of SSI eligibility, in turn, caused such an individual to lose his or her qualification for Medicaid. This loss of Medicaid eligibility is a far greater financial burden than the small cost-of-living increase can offset.

Plaintiffs, a class of California residents, charge that the Director of the Department of Health Services of the State of California (the “State”) and the Secretary of Health and Human Services (the “Secretary”) have incorrectly applied the Amendment by invoking it only when it appears that a recipient lost his or her right to SSI “solely” because of a social security cost-of-living increase. Plaintiffs take the position that the Pickle Amendment applies a “but for” test, that is, if one would still be entitled to SSI benefits but for the Social Security cost-of-living increase, then one would qualify under the Amendment for continued Medicaid benefits. Plaintiffs thus seek a judgment compelling the State and the Secretary to adopt the “but for” test. Plaintiffs also seek certification of a nationwide class of plaintiffs and a mandatory injunction against the Secretary. For the reasons set forth below, the Court finds for the plaintiffs.

I

A

This case involves the interaction of three federal programs, the SSI program, 42 U.S.C. § 1381 et seq., the Old Age Survivors and Disability Income Program (“OASDI” or “Social Security”), 42 U.S.C. § 401 et seq., and Medicaid, 42 U.S.C. § 1396 et seq. SSI aids the aged, blind, and disabled poor by paying each covered person enough money to bring his or her income up to a federally-established minimum level. That minimum income may be set at a higher level if an individual state is willing to pay additional cost. See 42 U.S.C. § 1382e.

OASDI payments, commonly known as “social security,” are primarily an insurance program. The size of payments to retired workers or their survivors depends in part on how much the worker and his or her employer have contributed to the system. Annual cost-of-living increases are made to recipients. See 42 U.S.C. § 415(i).

Finally, Medicaid is a federal program that reimburses states for providing medical care to those who cannot afford it. If a person is qualified for and receives SSI, he or she is denominated a “categorically needy” person and is, in a majority of states, automatically entitled to Medicaid, with no cost to the recipient. 42 U.S.C. § 1396a(a)(10). Those poor who do not receive SSI still receive Medicaid payments in some states, including California, but only after they have paid out each month enough of their own funds for medical expenses to bring their remaining income below the SSI qualification limit. This group of persons who must pay a share of their medical costs before receiving Medicaid are denominated “medically needy” recipients; the requirement that they spend a certain amount of their own income for medical needs is called a “spend down” or a “share of cost” provision.

Some SSI recipients also receive OASDI, or social security benefits, albeit in amounts low enough that they continue to meet the income eligibility criteria for the SSI program. As OASDI recipients, they receive an annual social security cost-of-living increase. The annual increase may raise the recipient’s income above the SSI limit, disqualifying him or her from further SSI benefits.

Before enactment of the Pickle Amendment, an SSI recipient who became ineligible for SSI benefits also lost his or her categorically needy Medicaid benefits. In states that do not provide Medicaid to the medically needy, the consequence was total ineligibility for medical assistance. In states participating in the medically needy program, the recipient could continue to obtain medical assistance, but only after meeting a monthly “spend down” or “share of cost” requirement.

The social security cost-of-living increases were, therefore, producing drastic consequences. The slight advantage of higher social security benefits was far outweighed by the loss of Medicaid coverage. In response, Congress enacted the Pickle Amendment to

“protect individuals * * * by providing that no recipient of Federal benefits or State supplementary payments under the SSI program would lose eligibility for medicaid as the result of the operation of the cost-of-living benefit increase provision in Title II [OASDI]. The purpose of the Amendment is to insure that an increase intended to benefit the aged and disabled would not have inadvertent harmful effects.”

S.Rep. No. 94-1265, 94th Cong., 2d Sess. 28 (1976), reprinted, in 1976 U.S.Code Cong. & Ad.News 6022.

The Pickle Amendment achieves this goal by excluding social security cost-of-living increases from countable income in the determination of Medicaid eligibility. For example, if the federally-established monthly income level for SSI were $500, an individual with a monthly OASDI income of $490 and no other income would receive $10 in SSI and would be automatically entitled to Medicaid because he or she was categorically needy. If that individual then received a $20 cost-of-living increase in OAS-DI benefits, he or she would no longer qualify for SSI because his or her income would now be over the $500 limit. The Pickle Amendment, however, would require that the cost-of-living increase not be included in the determination of Medicaid eligibility; thus, a qualified individual would continue to receive Medicaid as if he or she were still an SSI recipient.

The Secretary, however, has interpreted the Pickle Amendment in a restrictive manner. Using what is referred to as the “solely” test, the Secretary decreed that OASDI cost-of-living increases would be excluded in calculating Medicaid eligibility only when such increases were the sole cause of the loss of SSI eligibility. The “solely” test is codified at 42 C.F.R. § 435.-135 (1981). Those persons whose loss of SSI eligibility was triggered by some other increase in income, but who would, nevertheless, remain eligible for SSI but for the OASDI cost-of-living increase, do not receive Medicaid assistance as categorically needy persons under the Secretary’s interpretation of the Pickle Amendment.

Intended beneficiaries of the Amendment challenged this restrictive interpretation in Massachusetts, naming the Secretary and the Massachusetts Commissioner of Public Welfare as defendants. The district court certified a statewide class of plaintiffs and agreed that the “solely” test did not reflect the intent of Congress or the language of the statute. Ciampa v. Schweiker, 511 F.Supp. 670 (D.Mass.1981). On appeal, the First Circuit affirmed, sub nom. Ciampa v. Secretary of Health and Human Services, 687 F.2d 518 (1st Cir.1982). Relying on the unambiguous language of the statute itself, the court unanimously concluded: “The relevant words * * * are ‘except for.’ These words suggest a mechanical ‘but for’ test; they do not suggest the type of ‘causal’ requirement that the government has imported into its regulations.” Id. at 524.

The Secretary followed the Ciampa court’s directive in Massachusetts, but continued to enforce its regulation requiring the “solely” test in all other states. Plain- • tiffs then filed this action in San Francisco Superior Court, challenging California’s use of the “solely” test, as well as other aspects of the Pickle Amendment not at issue in this motion. The State removed the case to this Court and named the Secretary as a third-party defendant. Plaintiffs filed an amended complaint, naming the Secretary as a defendant and seeking relief on behalf of a nationwide class of those persons to whom the “solely” test denies Medicaid eligibility.

B

The problem caused by OASDI cost-of-living increases is best illustrated by surveying the plight of several members of the plaintiff class. Raymon Lynch, 52 years old, is disabled due to two ruptured disks, high blood pressure, and a nervous condition. He receives social security benefits of $563 per month. His wife, plaintiff Joann Lynch, is also disabled and receives OASDI monthly benefits of $239. Their combined benefits support a family of four, which includes their sixteen year old daughter, and their eleven year old granddaughter. Until July 1977, Raymon Lynch also received SSI and, accordingly, received Medicaid without a share of cost. In October 1982, the Lynches were notified by the State (which was applying the solely test for Pickle eligibility) that they would in the future have to pay a monthly share of their medical bills in order to receive further Medicaid payments.

Plaintiff Ellen Beezy, who is 32 years old, is paralyzed on her right side. She began receiving social security disability benefits in 1978, at which time she also qualified for and received SSI payments. Her SSI benefits ended in February 1979, as a result of which she was forced to pay a share of cost before receiving Medicaid. In 1979 that share was $36 per month; in 1980 it was $49 per month; it continued to increase to $86 per month in 1981, and $194 per month in 1982. Her current monthly social security benefits amount to $545. Ms. Beezy would still be eligible for SSI if OASDI cost-of-living increases were not counted in her income. Under the “but for” interpretation of the Pickle Amendment, therefore, she would not have to pay a share of cost before receiving Medicaid benefits.

C

This Court entered a preliminary injunction against the State and the Secretary, which, inter alia, enjoined the State from applying the “solely” test in California. The order also required the Secretary to provide full federal participation in Medicaid payments made pursuant to the Court’s order. Plaintiffs now ask that the preliminary injunction be made permanent. Plaintiffs also move for certification of a nationwide class, consisting of all persons, except residents of Massachusetts, who would be eligible for Medicaid benefits under the Pickle Amendment if implemented in accordance with the Ciampa decision. This motion seeks to extend relief to members of the proposed nationwide class who are still subject to the “solely” test only because they live elsewhere than in Massachusetts or California.

II

A

Plaintiffs propose certification of the following nationwide plaintiff class:

“A class of persons, residing in the United States, except for persons residing in Massachusetts, who:
(a) at some time since April 1977 contemporaneously were eligible for (and received) both monthly Title II (OASDI) social security benefits and SSI or SSI/SSP benefits; and
(b) are no longer receiving SSI or SSI/SSP benefits, but are currently entitled to Title II benefits; and
(e) have received Title II cost-of-living increases since the last month of contemporaneous eligibility for both SSI or SSI/SSP and Title II benefits; and
(d) would be eligible for SSI benefits if the amount of their income attributable to such increases and to such increases received by their spouses, if any, referred to in paragraph (c) were disregarded, and
(e) have not received, or will not receive Medicaid benefits.”

In short, the class consists of those persons who are eligible for Medicaid under the “but for” view of the Amendment.

The proposed class meets the requirements of Federal Rules of Civil Procedure 23(a) and 23(b)(2). Rule 23(a) imposes four preliminary requirements for class certification. First, the proposed class must be so numerous that joinder of all members is impracticable. This nationwide class consists of all persons who have lost Medicaid eligibility because of an increase in income, but not as the sole result of an OASDI cost-of-living increase. Plaintiffs have presented evidence of the numbers of persons falling into this category in California. The fact that the number of persons in the class cannot be exactly determined does not preclude class certification, see, e.g., Stenson v. Blum, 476 F.Supp. 1331, 1335 (S.D.N.Y.1979), aff'd without opinion, 628 F.2d 1345 (2d Cir.), cert. denied, 449 U.S. 885, 101 S.Ct. 239, 66 L.Ed.2d 111 (1980); a court may draw a reasonable inference of class size from the facts before it. Westcott v. Califano, 460 F.Supp. 737, 744 (D.Mass.1978), aff'd, 443 U.S. 76, 99 S.Ct. 2655, 61 L.Ed.2d 382 (1979). It is clear that the number of affected persons nationwide must be substantial.

Further, joinder of all plaintiffs is not feasible because of geographic factors, and because members of the class, who are by definition poor and disabled, do not have the economic means to pursue remedies on an individual basis. See, e.g., Jordan v. County of Los Angeles, 669 F.2d 1311, 1319 (9th Cir.1982), vacated on other grounds, 459 U.S. 810, 103 S.Ct. 35, 74 L.Ed.2d 48 (1982); see generally McClure v. Harris, 503 F.Supp. 409, 413 (N.D.Cal.1980).

The second prong of the Rule 23(a) test for class certification is whether the class is united by common questions of law or fact. Fed.R.Civ.P. 23(a)(2). The single issue for decision in this motion is whether the Pickle Amendment is to be applied using a “but for” or a “solely” test. That issue of interpretation is clearly a legal question common to the members of the proposed class, although the actual entitlement to benefits of class members in different states may differ.

The class also meets the third requirement of Rule 23(a) because the claims of the class representatives are typical of the claims of the class. Fed.R.Civ.P. 23(a)(3). “The typicality requirement is designed to assure that the named representative’s interests are aligned with those of the class.” Jordan, supra, 669 F.2d at 1321. Defendants do not suggest that the named representatives are inadequate, but argue that because some states have adopted different standards for implementing Medicaid programs, the named representatives’ claims are not typical. This argument is based on the existence of the so-called “209(b) option” in several states.

Before Congress enacted SSI in 1972, with its automatic grant of Medicaid benefits to SSI recipients, the states individually set income-eligibility limits for Medicaid, typically at much lower income levels than under the SSI program. To dissuade states that were unwilling to assume or unable to afford the costs of providing Medicaid to a larger recipient pool from leaving this voluntary program, Congress established the 209(b) option, which essentially allows a state to set Medicaid eligibility at the levels it used before the implementation of SSI in 1972. Pub.L. No. 92-603 § 209(b), codified at 42 U.S.C. § 1396a(f). Thus, a recipient of SSI who would automatically receive Medicaid in California and the majority of states might not qualify for Medicaid automatically in a 209(b) state. See Schweiker v. Gray Panthers, 453 U.S. 34, 39, 101 S.Ct. 2633, 2638, 69 L.Ed.2d 460 (1981). Such a person would not be absolutely precluded from receiving Medicaid, however, because 209(b) states must

“incorporate a ‘spend down ’ provision. This allows those individuals who would be eligible under the. SSI standards to deduct their incurred medical expenses from their income. This spend-down [enables] * * * needy individuals to become eligible for Medicaid when that part of their incomes in excess of the 1972 standards is consumed by the expenses for medical needs. Pub.L. No. 92-603 § 209(b); 42 U.S.C. § 1396a(f).”

Norman v. St. Clair, 610 F.2d 1228, 1232 (5th Cir.1980). Defendants argue that the claims of class members. in 209(b) states differ from those in states like California, because an individual’s actual entitlement to benefits will depend on whether the state has adopted the 209(b) option.

This argument is unpersuasive. The Pickle Amendment does not command the payment of Medicaid benefits to any particular person; it only requires that people who meet the Amendment’s definition be treated in the same manner as SSI recipients for the purposes of determining their Medicaid eligibility. This conclusion is buttressed by the Department of Health and Human Services own regulations, which require that 209(b) states consider as categorically needy not only SSI recipients, but also Pickle-eligible persons. 42 C.F.R. § 435.330 (1981). Thus, in a 209(b) state, the Pickle-eligible person, like the SSI recipient, is not automatically eligible for Medicaid; instead, both categories of persons may receive Medicaid after complying with the state’s “spend down” provision. It is clear that in all states the issue affecting class members is the same: should the Amendment be implemented using the “but for” or the “solely” test. The claims of class representatives, though not their ultimate entitlements, are typical of the class.

The final prong of the Rule 23(a) test looks to whether the “representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). This requirement is satisfied by demonstrating that the named plaintiffs’ attorneys are “qualified, experienced, and’ generally capable to conduct the litigation and that the named representative’s interests [are] not * * * antagonistic to the interests of the class.” Jordan, supra, 669 F.2d at 1323. It was demonstrated above that all class members share a common interest in what test is used to implement the Amendment. No class member’s position is antagonistic to another’s. Plaintiffs’ counsel, moreover, are experienced in class action litigation and in Medicaid law.

To be maintained as a class action, the litigation must also fall within one of the categories described in subsection (b) of Rule 23. This action is clearly maintainable under 23(b)(2), which describes actions wherein:

“the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.”

As demonstrated above, the Secretary’s implementation of the Pickle Amendment applies to the class as a whole; hence, final injunctive relief will be appropriate to remedy the injuries to the class.

B

Finally, the Secretary argues that policy factors weigh against certification of the nationwide class. The Supreme Court has commented on the policies underlying nationwide class action litigation in Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). In that case, the court below had certified a nationwide class of plaintiffs who were OASDI recipients and whose benefits had been or would in the future be reduced without prior notice or an opportunity for a hearing. Id. at 689, 99 S.Ct. at 2551. The Secretary argued to the Supreme Court that such a nationwide class would foreclose “reasoned consideration of the same issues by other federal courts and artificially increase[] the pressure on the docket of this Court by endowing with national importance issues that, if adjudicated in a narrower context, might not require * * * [the Supreme Court’s] immediate attention.” Id. at 701-02, 99 S.Ct. at 2557-58.

The Court agreed in principle with the Secretary’s argument and noted that in some circumstances it would be preferable to allow several courts to pass upon class claims. The Court also found, however, that Rule 23 does not limit the geographic scope of class actions and that a nationwide class could certainly be consistent with “principles of equity jurisprudence.” Id. at 702, 99 S.Ct. at 2558. From this reasoning the Court found:

“[A] federal court when asked to certify a nationwide class should take care to ensure that nationwide relief is indeed appropriate in the case before it, and that certification of such a class would not improperly interfere with the litigation of similar issues in other judicial districts. But we decline to adopt the extreme position that such a class may never be certified. The certification of a nationwide class * * * is committed in the first instance to the discretion of the district court. On the facts of this case we cannot conclude that the District Court * * abused that discretion, especially in light of its sensitivity to ongoing litigation of the same issue in other districts, and the determination that counsel was adequate to represent the class.”

Id. at 702-703, 99 S.Ct. at 2558-59.

Certification of a nationwide class to challenge the Secretary’s implementation of the Pickle Amendment is particularly appropriate under the standards and policies enunciated in Califano v. Yamasaki. Although judgment in favor of this class will foreclose litigation of the issue in other districts and circuits, this issue has previously been fully litigated and appealed in the First Circuit. Further, this Court’s issuance of a preliminary injunction in favor of the statewide class is already on appeal to the Ninth Circuit. Therefore, should the case eventually be presented to the Supreme Court, that Court will have the benefit of two circuit opinions on this fairly complex legal issue.

Equity also favors certification of the class. The plaintiffs in this action are by definition poor and disabled. They are represented by several public interest law groups that are consuming considerable amounts of their limited resources to litigate this case. If this Court issued a judgment in favor of California plaintiffs only, it seems quite likely that the Secretary will do as she did in Massachusetts and limit the effect of that judgment to this state; therefore, other plaintiffs and public interest groups in other forums will be forced to throw their efforts and resources into relitigating the issue. This is not an efficient use of the courts, nor is it equitable to pit plaintiffs against the far greater resources of the federal government in a state-by-state battle over implementation of the Amendment. Under these circumstances, this Court finds that it is appropriate to certify the proposed nationwide class.

Ill

The parties agree that there are no issues of material fact for decision and that the question before the Court is purely one of statutory interpretation. Therefore, summary judgment is appropriate at this time. Fed.R.Civ.P. 56.

In granting the California plaintiffs’ earlier motion for a preliminary injunction, this Court adopted the persuasive reasoning of Ciampa, supra. The Ciampa court described the Pickle Amendment by virtue of its three basic features:

“1) It applies to persons who were eligible for (and received) SSI, and who were entitled to receive OASDI, during some month after April 1977; 2) It provides these persons with the Medicaid benefits that an SSI beneficiary would receive, but it does not provide any other SSI benefits; 3) It provides these benefits for ‘any month after June 1977’ as to which ‘such individual would be (or could become) eligible’ for SSI benefits ‘except for amounts of income * * * attributable to increases’ in OASDI (which increases have occurred since the most recent month satisfying the first condition above).”

Id., 687 F.2d at 523. The Ciampa court then rejected the government’s advocacy of the “solely” test because the statute’s clear language establishes a “but for” test.

The key language in the statute is the phrase “except for,” which is used to explain that OASDI cost-of-living increases will be excluded from the calculation of Medicaid eligibility. The Ciampa court found the “except for” language to mean that the statute requires only “but for” causation. These words simply indicate that a person is to be treated like an SSI recipient if he or she would remain eligible for SSI if the OASDI cost-of-living increase were ignored in counting his or her income. The court found that “[w]here a statute’s scope is narrow, its language precise, and its application foreseeably mechanical, it would take a strong showing of ‘rare and exceptional circumstances’ to convince us that it should not be applied as written.” Id. at 524, quoting Howe v. Smith, 452 U.S. 473, 483, 101 S.Ct. 2468, 2475, 69 L.Ed.2d 171 (1981).

Neither the Secretary nor the State has advanced before this Court any argument in support of the “solely” test that was not considered by the First Circuit. The language of the statute, convoluted though it is, clearly provides that eligibility is to be tested simply by disregarding OASDI cost-of-living increases; the statute says nothing about taking into account whether SSI has been lost solely as a result of such an increase. This Court, therefore, grants partial summary judgment on behalf of the plaintiff nationwide class.

The Secretary argues that granting the relief plaintiffs request on behalf of a nationwide class will subject this Court to the burden of determining how each state should implement the “but for” test within its own welfare system. Although the Court would indeed be reluctant to face such an Augean task, it is not required by this case. In interpreting the statute, the Court addresses only the statute and the regulations promulgated by the Secretary pursuant to it. If a class member in a state outside California objects to his or her state’s implementation of new and correct federal regulations, that matter is for adjudication in the courts of that person’s state, not here. The only determinations made by this Court are, first, that the Pickle Amendment must be applied using a “but for” test; second, that the Secretary must refrain from using the “solely” test, and must correct all appropriate federal regulations in accordance with this interpretation; and third, that the Secretary must notify each state of the proper interpretation of the Amendment and of the new regulations.

IV

Accordingly,

IT IS HEREBY ORDERED that:

1. The proposed nationwide class of plaintiffs, described in Section II A above, is certified under Rule 23(a) and (b)(2).

2. Partial summary judgment is granted on behalf of this class on their claim that the Pickle Amendment requires the use of a “but for” test.

3. The language and intent of the Pickle Amendment requires states participating in the Medicaid program to provide Medicaid benefits to persons eligible under the Amendment in the same manner that such benefits are provided to SSI recipients.

4. The regulation set forth in 42 C.'F.R. § 435.135 is void and of no effect to the extent that it permits or requires states to deny Medicaid benefits under the Pickle Amendment to class members on the ground that they did not become ineligible for SSI as a direct result of, or “solely” because of, an OASDI cost-of-living increase.

5. Defendant Secretary, together with her agents, employees, and representatives, their successors in interest, and all persons acting in concert or participating with them, are hereby perpetually enjoined and restrained from permitting or requiring any state to deny Medicaid benefits to persons otherwise entitled thereto under the Pickle Amendment, on the basis of the “solely” test presently codified at 42 C.F.R. § 435.135.

6. The State of California is hereby perpetually enjoined and restrained from using the “solely” test, and from failing or refusing to provide Medicaid benefits to the members of the California class, certified by this Court’s order of July 12, 1983.

7. Within thirty days of the filing of this Opinion and Order, defendant Secretary shall file and serve a plan, stating how she intends to notify those states participating in the Medicaid program of the terms of this Order. In the event that plaintiffs have any objections to said plan, the parties shall forthwith meet and attempt to resolve these objections. Plaintiffs may seek relief from this Court with respect to said plan upon properly noticed motion.

      . Under Title XVI of the Social Security Act, states may supplement SSI benefits with state supplementary payments ("SSP"). California has chosen to do so; therefore, welfare benefits paid to aged, blind, and disabled persons under Title XVI in California are referred to as “SSI/SSP.” Such state supplementary payments are excluded from the determination of the recipient’s income qualification for SSI. See 42 U.S.C. § 1382e.

      . The interaction of the state and federal governments in the administration and financing of the Medicaid program is described generally in Norman v. St. Clair, 610 F.2d 1228, 1230-31 (5th Cir.1980).

      . This automatic entitlement to Medicaid for SSI recipients is the rule in all but fourteen states. States that have elected the "209(b)” option may set Medicaid eligibility limits according to the eligibility limit established by the individual state in 1972, before the enactment of the SSI statute. See discussion of the 209(b) option in Section II A.

      . Ciampa v. Secretary of Health and Human Services, 687 F.2d 518, 521 (1st Cir.1982):
      "[B]oth the OASDI and SSI payment levels rise each year to take account of inflation. The OASDI payment (which is wholly federal) and the federal component of the SSI 'minimum' rise by exactly the same percentage. 42 U.S.C. §§ 415(i), 1382f. * * *
      How was it possible for a OASDI increase to result in a loss of SSI? One explanation lies in the fact that the state components of SSI were not indexed to inflation as were the federal component and OASDI. Thus, while the federal part of SSI was required to rise as rapidly as OASDI, the state part was not. An OASDI increase could therefore raise a recipient's outside Income above the less rapidly rising SSI ‘minimum’ in his stale."

      . Such persons may continue to receive Medicaid as "medically needy” persons after spending enough of their income on medical expenses to bring their income level below the SSI limit. See discussion of the medically needy program in Section I A.

      . The parties stipulated to certification of a statewide plaintiff class, defined as California residents meeting all of the following criteria:
      All California residents who:
      (a) at some time since April 1977, contemporaneously received both monthly Title II (OASDI) social security benefits and SSI/SSP benefits; and
      (b) are no longer receiving SSI/SSP benefits; but are currently entitled to Title II benefits; and
      (c) have received, or will receive, Title II cost-of-living increases since the last month of contemporaneous eligibility for both SSI/SSP and Title II benefits;
      (d) would be eligible for SSI benefits if the amount of their income attributable to the increases referred to in subparagraph (c) were disregarded; and
      (e) have not received, or will not receive Medi-Cal benefits without a share of cost.

      . See declaration of Raymon Lynch, filed May 23, 1983. The representatives of the California plaintiff class filed detailed declarations describing their eligibility histories. They also filed charts showing how their eligibility for Medicaid would be calculated under the "but for” test. See Appendix I in support of plaintiffs' motion for preliminary injunction, filed May 23, 1983. A portion of that Appendix is summarized below.

        Calculations Showing Plaintiffs’ Eligibility for Medicaid Under _the Pickle Amendment
      Plaintiffs Raymon and Joann Lynch:
      $563.00 Title II benefits of Raymon Lynch
      -230.25 Title II increases (7/77-7/82)
      $332.75 Countable Title II benefit
      $239.00 Title II benefit of Joann Lynch
      — 137.00 Title II increases since July 1977
      $102.00 Countable Title II benefit
      $102.00
      { 333.00
      435.00 Net Income
      — 20.00 Any income deduction (20 C.F.R. § 416.1124(c)(10))
      $415.00 Net Countable Income
      $451.00 SSI/SSP Maximum Grant
      -415.00
      $ 36.00 SSI/SSP Grant, but for Title II Income

      . See declaration of Ellen Beezy, filed May 23, 1983. Ms. Beezy's eligibility for Medicaid under the Pickle Amendment would be calculated as follows:
      $545.00 Title II benefit
      -182.00 Title II increases (7/79-7/82)
      $363,00 Countable Title II Income
      - 20,00
      $343.00 Countable Income
      $451.00 SSI/SSP Maximum Grant
      —343.00 Countable Income
      $108.00 SSI/SSP Grant, but for Title II increases

        See Appendix I in support of plaintiffs’ motion for preliminary injunction, filed May 23, 1983, at 4.

      . Plaintiffs produced evidence that in California approximately 5,980 people lost SSI benefits in September 1978, as a result of a decrease in the State's contribution to the SSI/SSP grant level; another 4,592 people lost SSI benefits in January 1981 after a similar State decrease. See supplemental declaration of Frank, July 1, 1983, ¶ 6 A, B. These people became ineligible for SSI for a reason other than an OASDI cost-of-living increase, and so under the solely test were not protected by the Pickle Amendment. While these statistics reflect events in California only, they do indicate the numbers of persons potentially affected by the Secretary’s interpretation of the Amendment.

      . Plaintiffs’ counsel have acted as lead or co-counsel, for example, in Beltran v. Myers, 451 U.S. 625, 101 S.Ct. 1961, 68 L.Ed.2d 495 (1981), on remand, 701 F.2d 91 (9th Cir.1982), cert. denied sub nom. Rank v. Beltran, 462 U.S. 1134, 103 S.Ct. 3115, 77 L.Ed.2d 1369 (1983) (statewide class action challenging state Medicaid rule as violative of federal law); Schweiker v. Gray Panthers, 453 U.S. 34, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981) (challenge by nationwide organizations seeking to invalidate federal regulations alleged to violate the Medicaid statute); Shannon v. United States Civil Service Commission, 444 F.Supp. 354 (N.D.Cal.1977), modified, 621 F.2d 1030 (9th Cir.1980). Defendants have not challenged the adequacy of representation of the class by the class attorneys.

      . The Supreme Court has recently reaffirmed this policy in United States v. Mendoza, 464 U.S. 154, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984). The Court held that nonmutual collateral estoppel does not apply against the government, reasoning in part that such a bar to the relitigation of legal issues "would substantially thwart the development of important questions of law by freezing the first final decision rendered on a particular legal issue.” Id. 464 U.S. at-, 104 S.Ct. at 572.


source: Caselaw Access Project

author: BRIMMER, District Judge.

license: Public Domain

text:
    Charles S. EVERTS, M.D., Plaintiff, v. BOARD OF TRUSTEES OF SOUTH LINCOLN HOSPITAL DISTRICT, a hospital district organized pursuant to § 35-2-401, et seq., W.S.1977, namely Anthony Vehar, Dave Harvey, Martha Bertot, Ken Ferrin, David Kominsky, D.D.S., and Duane Ackerman, in their official capacities as members of the Board of Trustees, and Clair Morrison, individually and in his capacity as Administrator of the South Lincoln Hospital, Defendants.
    No. C84-0210-B.
    United States District Court, D. Wyoming.
    March 21, 1985.

      James E. Fitzgerald, of James E. Fitzgerald, P.C., and Sheila J. Barton, Cheyenne, Wyo., for plaintiff.
    Dan B. Riggs, and Jeffrey J. Gonda, of Lonabaugh & Riggs, Sheridan, Wyo., for defendant Morrison.
    David D. Uchner, and Nick Kalokathis, of Lathrop & Uchner, P.C., Cheyenne, Wyo., for remaining defendants.
   ORDER ON POSTTRIAL MOTIONS

BRIMMER, District Judge.

This matter came on regularly for hearing before the Court. The Court has carefully reviewed the pleadings, considered the arguments of counsel, and being fully advised in the premises, FINDS and ORDERS as follows:

Defendants’ Motions for Judgment Notwithstanding the Verdict will be denied because they have failed to establish grounds to disturb the jury’s verdict in this matter.

Defendant South Lincoln Hospital District alleged, during the course of the final pretrial conference, that plaintiff could not recover treble damages from a local government entity under Section 4 of the Clayton Act, 15 U.S.C.A. § 15 (West Supp. 1984), or alternatively it urged the Court to exercise its discretion under the Local Government Antitrust Act of 1984, Pub.L. No. 98-544, 98 Stat. 2750 (10-24-84) not to award such remedy. The Court deferred ruling upon this issue until the verdict was received. After the jury returned a verdict awarding damages under plaintiff’s antitrust theories, the Court notified counsel, and requested briefs be submitted upon this issue prior to the entry of judgment upon the jury’s verdict.

The nature and scope of immunities for local government entities from liability under 15 U.S.C.A. § 15 (West Supp.1984) is an area lacking in clarity. The provisions were initially enacted in conjunction with the Sherman Antitrust Act, Ch. 647 § 7, 26 Stat. 209, 210 (1890). Such provision stated:

Any person who shall be injured in his business or property by reason of anything forbidden or declared to be unlawful by this act may sue therefore ... and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorneys fee.

Section 8 of the Sherman Act, Ch. 647 § 8, 26 Stat. 209, 210 (1890) defined the terms “person” or “persons” as used in the Act, stating:

That the word “person” or “persons” shall ... include corporations and associations existing under or authorized by ... the laws of any state____

The provisions of § 7 of the Sherman Act were reenacted without modification four years later. Ch. 349 § 77, 28 Stat. 509, 570 (1894).

Subsequently the Congress adopted the Clayton Antitrust Act, Ch. 323, §§ 1-26 38 Stat. 730-740 (1914). Section 1 of that Act defines the terms “person” or “persons” like the definition in § 8 of the Sherman Act. Section 4 of the Clayton Act contained civil action provisions parallel to those contained in the original Sherman Act. However, it also provided remedies for any violation of “the antitrust laws” rather than limiting its effect to a specific enactment. The Clayton Act provision caused the Sherman Act provision to be unnecessary, and the Sherman Act provision was subsequently repealed. Pub.L. No. 84-137, 69 Stat. 282, 283 (1955). The Congress has twice amended Section 4 of the Clayton Act since that time to add provisions permitting the recovery of prejudgment interest under certain circumstances, but the operative language cited above was not substantially affected, and remains in effect today. Pub.L. No. 96-349, § 4(a)(1), 94 Stat. 1154, 1156 (1980); Pub.L. No. 97-393, 96 Stat. 1964 (1982).

Noticeably absent from the legislative history of these enactments is any specific reference to the potential liability of the local government entities for treble damages. Until recently many felt local government entities were immune from suit under such provisions. The specific applicability of these provisions to such entities apparently was not a matter of concern to the drafters. The United States Supreme Court, in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943) held that regulatory conduct of an officer of the State of California was not susceptible to antitrust suit, stating:

We find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a State or its officers or agents from activities directed by its legislature ... The Sherman Act makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state____ There is no suggestion of a purpose to restrain state action in the Act’s legislative history____

317 U.S. at pp. 350-351, 63 S.Ct. at p. 313. However, the Court went on to indicate that conduct of a state or local government agency undertaken in a proprietary capacity as a competitor in the market, rather than in a regulatory or administrative capacity, may be subject to suit under the Federal antitrust laws. Id. at pp. 351-352, 63 S.Ct. at pp. 313-314.

Twenty-five years later the Court addressed the issue left undecided in Parker v. Brown concerning potential liability of local government entities under the Federal antitrust laws in City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978). There the Court rejected the argument that local government entities enjoyed immunity from antitrust liability under the Parker v. Brown doctrine. It held that local government entities were subject to suit under Section 4 of the Clayton Act. The Court refused to address the issue of what remedies are available in private actions brought such provision against local government entities, stating:

“[The fact that local government entities may be subject to suit under the Federal antitrust laws does not] necessarily require the conclusion that remedies appropriate to redress violations by private corporations would be equally appropriate for municipalities; nor need we decide any question of remedy in this case.” (footnote omitted)

435 U.S. p. 402, 98 S.Ct. at p. 1131. The Court also stated:

The question of remedy can arise only if the District Court, on the Court of Appeals remand, determines that petitioners’ activities are prohibited by the antitrust laws.

Id. pp. 402-403, n. 22, 98 S.Ct. at p. 1131, n. 22.

The dissenting opinions noted that the language of Section 4 of the Clayton Act by use of “shall recover” is mandatory on its face, and leaves no room for maneuver to avoid the inherent result of the Court’s decision, to subject local government entities to the risk of incurring liability for treble damages under the federal antitrust laws. Id., pp. 440-441 and n. 30, 98 S.Ct. at pp. 1150-1151 and n. 30 (Stewart, J. dissenting), and pp. 441-443 and n. 2, 98 S.Ct. at pp. 1151-1152 and n. 2 (Blackmun, J. dissenting). The Court thus determined that a local government entity may be subjected to suit under Section 4 of the Clayton Act, and that the language of that provision provides the Court with no discretion to award only actual damages, or to refuse to award damages altogether.

This issue was again presented to the Court in Community Communications Co., Inc. v. City of Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982), which held that the municipal defendant could be subjected to an injunctive action under the Clayton Act notwithstanding the existence of a “Home Rule” statute enacted by the State of Colorado. Again, the Court refused to address the issue of remedies recoverable in an action against a local government entity, stating:

... we hold today only that the Parker v. Brown exemption was no bar on the District Court’s grant of injunctive relief. This case’s preliminary posture makes it unnecessary to consider other issues regarding the applicability of the antitrust laws in the context of suits by private litigants against governmental defendants____ Moreover, as in City of Lafayette, supra [435 U.S.] at 401-402 [98 S.Ct. at 1130-1131] we do not confront the issue of remedies appropriate against municipal officials.

However, the dissenting opinion in City of Boulder once again noted the difficulty presented by the mandatory language of Section 4 of the Clayton Act, stating:

It will take a considerable feat of judicial gymnastics to conclude that municipalities are not subject to treble damages to compensate any person “injured in his business or property.”

455 U.S. at p. 64 n. 2, 102 S.Ct. at p. 848 n. 2 (Rehnquist, J. dissenting, joined by O’Conner, J. and Burger, C.J.).

No subsequent cases in point have apparently been decided by the Supreme Court, and the Court has never squarely decided that local government entities may be subjected to liability for treble damages under the Federal antitrust laws. The only published opinion in point is Grason Electric Co. v. Sacramento Municipal Utility Dist., 526 F.Supp. 276 (E.D.Cal.1981), where on a motion to strike, the municipal defendant requested the Court to limit the plaintiff’s recovery to injunctive relief and to hold that municipal defendants are not subject to liability for treble damages under the Federal antitrust laws in light of the decision in City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981). The Court refused to do so, stating:

The defendant’s request ... amounts to nothing less than a request to amend Section 4 of the Clayton Act. In essence the Defendant invites the Court to read “shall” as “may”. This invitation the Court must decline.
... The Court is bound by the mandatory language of Section 4, and by the fact that Section 4 is framed in terms of injured party rather than in terms of the injuring party.
... Although the discussion in City of Newport clearly has relevance to the contention urged by the defendant herein, it is not controlling. In City of Newport, the United States Supreme Court noted that Congress, in enacting 42 U.S.C. § 1983, intended to codify certain aspects of the common law as it then existed. A thorough and scholarly review of the common law established beyond preadventure that punitive damages were not recoverable from a municipality at common law. Accordingly, 42 U.S.C. § 1983 could not be read as authorizing punitive damages against a municipality.
No such room for maneuver exists with respect to the Clayton Act. Section 4 implicitly mandates the award of treble damages without respect to the status or identity of the wrongdoer. This Court is without the power to rewrite Section 4 of the Clayton Act.

Substantial policy reasons tempt the Court to hold that treble damages may not be awarded under the Federal antitrust laws against a local government entity. These concerns were eloquently addressed by the Supreme Court in City of Newport v. Fact Concerts, Inc., supra, 453 U.S. at 263-264, 101 S.Ct. at 2757-2758. The legislative history accompanying the Local Government Antitrust Act, discussed below, indicates that the Congress never intended to subject local government entities to treble damage actions under the Federal antitrust laws. However, it having been determined that such entities are subject to private suits under Section 4 of the Clayton Act, this Court cannot avoid the mandatory language of that provision. The Court must hold that local government entities are subject to treble damage liability under 15 U.S.C.A. § 15 (West Supp.1984).

The question remains whether or not this Court should apply retroactively the provisions of the Local Government Antitrust Act of 1984, cited above. The original bills in Congress which ultimately led to the enactment of this law, were introduced in response to the Supreme Court’s holdings in City of Lafayette, supra, and City of Boulder, supra. Both decisions were construed by the members of Congress and by other interested parties, as potentially subjecting local government entities to enormous liability for treble damages. While the legislative history recognizes the fact that the Supreme Court has never held that the treble damage provisions apply to such entities, still the statutory language left the courts no alternative but to impose treble damages when liability was established. See generally, 130 Cong.Rec. H12, 185-H12, 188 (10-11-1984); H.R.Rep. No. 965, 98th Cong., 2d Sess. 10-12, (1984), U.S.Code Cong. & Admin.News 1984, p. 4602. The relevant operative language states “Sec. 3.(a) No damages, interest on damages, costs or attorneys fees may be recovered under section 4 ... of the Clayton Act (15 U.S.C. 15 ...) from any local government ...”. The bill was signed into law on October 24, 1984, and took effect retroactively to thirty days prior to the date of enactment, but, generally applies only prospectively. Subsection 3(b) states:

Subsection (a) shall not apply to cases commenced before the effective date of this Act unless the defendant establishes and the Court determines, in light of all the circumstances, including the stage of the litigation and the availability of alternative relief under the Clayton Act, that it would be inequitable not to apply this subsection to a pending case ...

Plaintiff filed this action 127 days prior to the effective date of the 1984 statute. Approximately 144 days after the effective date of the statute, the jury returned a verdict determining that defendant South Lincoln Hospital District violated the Sherman Act, and awarded $25,000 in actual damages. Plaintiff did not seek reinstatement, and injunctive relief under the Clayton Act will not remedy the challenged conduct.

The inquiry cannot end there, though, because the drafters clearly intended the courts to considered all relevant factors pertaining to the equities presented in any given case. See generally H.R.Rep. No. 965, supra; S.Rep. No. 593, 98th Cong., 2d Sess. (1984); H.R.Rep. No. 1158, 98th Cong., 2d Sess. (1984); 130 Cong.Rec. H8622-H8624, S13,574-S13,575, and H12,175-H12,189 (1984); Presidential Statement, 40 Weekly Comp.Pres.Doc. 43 (Oct. 24, 1984). By its express terms Section 3(b) seems to permit the Court only to apply the limiting provisions of Section 3(a), as written, to pending cases under appropriate circumstances, thereby restricting the plaintiff’s recovery to injunctive relief. The degree of discretion granted the Courts to fashion an appropriate remedy in a given case is not discussed in detail in the Act, or in its legislative history. However, an enlightening colloquy appeared in the Record between Representative Erlenborn and Representative Sawyer, concerning the provisions of Subsection 3(b), as follows:

Mr. Erlenborn ... Can the gentlemen tell me, does that mean that the Court can look at the judgment which might be a judgment including treble damages and say: Well, that is too much, that would be too much of a burden. That would be inequitable.
But if it is only actual damages it would be equitable, and the Court would have the authority to change the judgment to make‘it equitable, or would the court be able to reject or not to reject or not to reject just on the basis of the judgment as it stands?
Mr. Sawyer. The intention clearly was, when you get into an equitable thing, it gives the court the broad chancery powers of a court to do anything, including down to just converting it into injunctive relief or some other relief, but that was what was clearly intended by that and we came into full agreement with the Senate on the language that should go into the report ... 130 Cong. Rec. H12.185.

The initial bill introduced in the House, H. R. 6027, 98th Cong., 2d Sess. (1984) was to fully retroactive, except as to the provisions in the Clayton Act .for costs and attorneys fees. See H.R.Rep. No. 965, supra. The reason for that provision was that several cases had been filed against local government entities following the Supreme Court’s decisions in City of Lafayette, supra, and City of Boulder, supra. Id. The Senate bill, S.1578, 98th Cong., 2d Sess. (1984), contained the retroactivity provisions ultimately adopted by Congress. It constituted a compromise between competing interests of local government entities in avoiding treble damage liability and the interests of plaintiffs in obtaining redress after filing suits in reliance upon the then-current provisions of the Clayton Act, as construed by the Supreme Court. See S.Rep. No. 593, supra. The balance of equities between those competing interests should determine the ultimate outcome under Section 3(b).

Plaintiff filed this suit in reliance upon the current state of the law. The jury determined that he' suffered actual damages in the amount of $25,000.00 as a result of defendant South Lincoln Hospital District’s conduct in violation of the Federal antitrust laws. In equity, plaintiff should be permitted to recover that amount, and the local government entity should be required to pay such damages suffered as a result of its wrongful conduct. Cf., City of Newport v. Fact Concerts, Inc., supra, 453 U.S. 259-260, 101 S.Ct. 2755-2756.

However, the Court believes, under the circumstances presented in this case, that it would be inequitable not to apply the provisions of the 1984 Act, to the extent they permit the Court to fashion a remedy permitting an award of actual damages and to deny a request for the punitive trebled portion of damages. Trebled damages, when viewed in conjunction with the jury’s award of $64,000.00 against the same defendant for breach of contract, and the cost to such defendant in defending this suit, as well as a potential award of attorneys fees award under federal laws, could potentially endanger the financial viability of such defendant. More importantly, any award of treble damages would have to be paid out of tax revenues. It would have the effect of punishing the very taxpayers such remedy was designed to protect, while conversely having only doubtful deterrent effect upon the members of the Board of Trustees who caused such defendant to undertake the unlawful conduct. Cf., City of Newport v. Fact Concerts, Inc., supra, 453 U.S. 260-263, 101 S.Ct. 2756-2757. Since an award of actual damages, costs, and fees will fully compensate plaintiff for losses sustained as a result of such conduct the Court believes the equities favor defendant South Lincoln Hospital District. Only actual damages, costs, and fees will be awarded, pursuant to the provisions of Section 3(b) of the 1984 Local Government Antitrust Act.

      . Plaintiff may be entitled to recover attorneys fees against all defendants herein except defendant David Kominsky, under either 42 U.S.C. § 1983 or 15 U.S.C. § 15.


author: MARY LOU ROBINSON, District Judge.

text:
    Cecilia GARZA, Plaintiff, v. DEAF SMITH COUNTY, Defendant.
    Civ. A. No. CA-2-81-42.
    United States District Court, N.D. Texas, Amarillo Division.
    May 24, 1984.
    Consent Decree March 18, 1985.

      Debra Smith, Texas Rural Legal Aid, Hereford, Tex., Joe K. Crews, Law Offices of James C. Barber, Dallas, Tex., for plaintiff.
    A.W. SoRelle III, Janet L. King, Underwood Law Firm, Amarillo, Tex., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

MARY LOU ROBINSON, District Judge.

Introduction

This employment discrimination lawsuit was originally filed by Abel Villarreal, alleging violations of Title VII of the Civil Rights Act of 1964 [42 U.S.C. § 2000e et seq. ], 42 U.S.C. § 1981, and 42 U.S.C. § 1983. Cecilia Garza subsequently intervened.

On October 25, 1983, the Court held a hearing on Plaintiffs’ Motion for Class Certification. On November 8, 1983, the Court cértified a class under Fed.R.Civ.P. 23(b)(2) consisting of:

All Hispanics who, since March 6, 1979 have applied for and been denied employment with Deaf Smith County.

Since the original plaintiff, Abel Villarreal, did not possess the same interest and had not suffered the same injury as had the members of the certified class, his claims were severed, pursuant to Fed.R. Civ.P. 21, and assigned Civil Action No. 2-84-22. That action is still pending.

Subsequent to certification, Cecilia Garza’s sister, Rosa Garza, twice moved to intervene. For different reasons, each motion to intervene was denied.

On April 30, 1984, the Court held a Phase I trial on the issue of liability. This constitutes the Court’s Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

Cecilia Garza

1. Plaintiff Cecilia Garza is an Hispanic female citizen of the United States and a resident of Hereford, Deaf Smith County, Texas.

2. On January 8, 1982, the following classified ad appeared in The Hereford Brand:

Secretary for typing and bookkeeping. Contact Eva at Sheriff’s office for application and interview. Equal Opportunity Employer.

3. In response to the ad, Ms. Garza went to the Deaf Smith County Sheriff’s Office and told the woman who came to assist her that she was there to apply for the job that was advertised in the newspaper. She did not ask for Eva as instructed in the ad.

4. The woman in the sheriff’s office took Ms. Garza’s name and telephone number, and told her that she would be contacted. Ms. Garza left. She never received any telephone call or other contact from the sheriff’s office.

5. A few days later, Ms. Garza saw the same ad appear again in the newspaper. She returned to the Sheriff’s Office and asked about the status of her application. She was told that the job had been filled. The person who had been hired was white.

6. Ms. Garza subsequently filed a charge of discrimination with the United States Equal Employment Opportunity Commission and was later issued a right-to-sue notice.

Deaf Smith County

7. Defendant Deaf Smith County is a political subdivision of the State of Texas. Its authority is derived from the Texas Constitution and from state laws.

8. The County performs a variety of functions, including enforcing state laws within its boundaries, assessing and collecting taxes, conducting general and special elections, providing necessary court facilities, keeping real property and other official records, constructing and maintaining county roads and bridges, and providing library services.

9. Each county function is directed by elected or appointed county officials whose duties are established by law. Many functions relating to the general operation of the county are supervised by the Commissioner’s Court. For other functions, an elected official may be directly responsible to state officials.

10. The Commissioner’s Court of Deaf Smith County is comprised of the County Judge and one commissioner from each of four precincts.

11. Each of the four precincts, the County Judge’s office, and several other county departments have their own supervisory personnel and operate, by and large, independently of each other.

12. Neither the County nor any of its departments, through mid-1983, had any written policy or procedures regarding hiring of new employees or any written job descriptions. All hiring was solely at the discretion of each department head. The County had no person in charge of hiring.

13. From at least 1964 through mid-1983, all of the County’s officials' and department heads were white. In approximately August, 1983, an Hispanic Sheriff was appointed.

Statistical Analysis of Hiring

14. Both Plaintiff’s and Defendant’s statistical experts are in agreement on a key feature of this case: when viewed in the aggregate, the success rate of Hispanic applicants to Deaf Smith County’s various offices and departments is 2.7 plus standard deviations less than expected for the 1979-84 period.

15. Where the statistical experts diverge is whether the County’s hiring should be viewed on a department-by-department basis or in the aggregate. Broken down by department for the 1979-84 period, only three departments — Building Maintenance, Social Services, and the Sheriffs Office — reflect Hispanic success rates more than 2 standard deviations less than expected. Together, these three departments accounted for approximately one-third (50 of 151) of the new hires during the 1979-84 statistical period. The County contends that when the remaining 101 hires are distributed over the remaining 15 departments, the statistics reflect no adversity against Hispanics for the five-year statistical period (January 1, 1979, to March 31, 1984).

16. The County also contends that when the success rate of Hispanic applicants for particular job categories is compared to the 1980 census data showing the distribution of relevant skills among the Hispanic population of Deaf Smith County, no statistically significant adverse impact on Hispanics appears. (The labor market analysis.)

CONCLUSIONS OF LAW

Jurisdiction

1. This Court has jurisdiction under 28 U.S.C. § 1343 and 42 U.S.C. § 2000e-5(f)(3).

Class Claims

2. Plaintiffs have brought this action under the disparate treatment theory of recovery. Under the disparate treatment theory, the Title VII plaintiff must prove the existence of a pattern and practice of race discrimination. Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977). To succeed in a disparate treatment case, a plaintiff must “prove more than the mere occurrence of isolated or ‘accidental’ or sporadic discriminatory acts.” Id. at 336 & n. 16, 97 S.Ct. at 1855 & n. 16. She must “establish by a preponderance of the evidence that racial discrimination was the [County’s] standard operating procedure — the regular rather than the unusual practice.” Id. In a disparate treatment case discriminatory intent must be established by either direct or circumstantial evidence. Id. at 335 n. 15, 97 S.Ct. at 1854 n. 15; Wheeler v. City of Columbus, 686 F.2d 1144, 1150 (5th Cir.1982).

3. Since the County’s hiring decisions rely on subjective selection criteria, it is appropriate to analyze them under the disparate treatment theory. Pegues v. Mississippi State Employment Service, 699 F.2d 760, 765 (5th Cir.), cert. denied, — U.S. -, 104 S.Ct. 482, 78 L.Ed.2d 679 (1983); Pouncy v. Prudential Ins. Co., 668 F.2d 795 (5th Cir.1982).

4. Under the disparate treatment analysis, a Title VII plaintiff may establish a prima facie case of disparate treatment using statistics alone if the statistics show a “gross disparity” in the treatment of applicants based on discriminatory factors such as race. Hazelwood School District v. United States, 433 U.S. 299, 307-08, 97 S.Ct. 2736, 2741, 53 L.Ed.2d 768 (1977); Carroll v. Sears Roebuck & Co., 708 F.2d 183, 190 (5th Cir.1983). Gross statistical disparities, standing alone, may justify an inference of discriminatory motive. Id. However, if the statistical disparity shown by the plaintiff’s evidence is insufficient alone to establish a prima facie case of disparate treatment, a Title VII plaintiff “may get over his or her hurdle by combining statistics with historical, individual, or circumstantial evidence.” Payne v. Travenol Laboratories, 673 F.2d 798, 827 (5th Cir.), cert. denied, 459 U.S. 1038, 103 S.Ct. 451, 74 L.Ed.2d 605 (1982); Carroll, 708 F.2d at 190. In order to rebut a prima facie case of disparate treatment, the defendant must discredit the plaintiff’s evidence or provide a nondiscriminatory explanation for the apparently discriminatory result. Id.

5. For purposes of this case, a disparity in the number of Hispanic applicants hired is statistically significant if the difference between the expected number of Hispanic applicants hired exceeds the actual number by more than two or three standard deviations. See Castaneda v. Partida, 430 U.S. 482, 496-97 n. 17, 97 S.Ct. 1272, 1281 n. 17, 51 L.Ed.2d 498 (1977); Hazelwood, 433 U.S. at 311 n. 17, 97 S.Ct. at 2743 n. 17.

6. The first difficulty in interpreting the statistics in this case is whether the County is correct in its assertion that its various departments should be viewed individually. The Fifth Circuit considered an analogous situation in Wheeler v. City of Columbus, 686 F.2d 1144, 1151 (5th Cir.1982). There, the district court, sua sponte, had divided the City into 23 departments for purposes of analyzing the employment discrimination claims. The Fifth Circuit faulted this procedure, noting that “[n]either Wheeler nor the City had attached any significance at trial to these twenty-three job classifications, which had been created by the City only for payroll purposes.” Id. In remanding the case, the Fifth Circuit stated that “the district court should ascertain whether some of [the job] classifications belong in bona fide departments and also consider the statistics in those classifications as part of Wheeler’s overall prima facie case.” Id. at 1152. Here, the County has attached significance to its various departments and Plaintiffs have not introduced any evidence suggesting that the departments are not in fact bona fide.

7. The County’s assertion that its various departments operate independently of each other with respect to hiring is bolstered by the applicable state law. Tex. Rev.Civ.Stat.Ann. art. 3902 provides, in relevant part, that “in no case shall the Commissioner’s Court or any member thereof attempt to influence the appointment of any person as deputy, assistant, or clerk in any office.” Texas courts have consistently found that county commissioner’s courts do not have any power over who is selected to assist in county offices. See, e.g., Renfro v. Shropshire, 566 S.W.2d 688 (Tex.Civ.App.—Eastland 1978, writ ref’d n.r.e.); Tarrant County v. Smith, 81 S.W.2d 537 (Tex.Civ.App.—Fort Worth 1935, writ ref’d); Neeper v. Stewart, 66 S.W.2d 812 (Tex.Civ.App.—Eastland 1933, writ ref’d).

8. The Court concludes that there is “substantial hiring autonomy” in each department and that the County’s hiring practices should be analyzed on a department-by-department basis. Nonetheless, the hiring statistics for all the departments may be considered in the aggregate for purposes of establishing Plaintiffs’ prima facie case. Wheeler, 686 F.2d at 1152-53.

9. The Court finds that Plaintiffs’ applicant flow analysis, as exemplified by Plaintiff’s Exhibits 6-8, is persuasive and establishes a sufficiently gross disparity to justify an inference of discriminatory motive, thus establishing Plaintiffs’ prima facie case.

10. The County’s principal attack on Plaintiff’s statistical case consists of Dr. Lewin’s labor market comparison. By comparing required job skills with 1980 census data regarding the distribution of these skills among the Hispanics of Deaf Smith County, Dr. Lewin concludes that the County’s hiring practices have no adverse impact on Hispanics. This approach is consistent with the Supreme Court’s requirement that “the relevant labor pool be tailored to eliminate those whose exclusion from the positions in issue could be attributed to want of the requisite skills.” Rivera v. City of Wichita Falls, 665 F.2d 531, 540 (5th Cir.1982).

11. The Fifth Circuit has commented that:

A prima facie case may ... be shown without evidence of qualifications where the inference of discrimination is supported by a compelling level of minority underrepresentation in a sizeable workforce. In such a case, the burden of proving lack of qualifications is on the [employer].

Id. at 541 n. 16; United States v. Hayes International Corp., 456 F.2d 112, 120 (5th Cir.1972). Plaintiffs assert that the census data is inaccurate because the census substantially undercounts Hispanics and because the census statistics analyzing the population by job skill included in each skill category only people actually employed in those skill categories. People qualified for, but not employed in, such positions were omitted from the statistics quantifying the proportion of the population eligible for the type of employment in question. In considering identical objections in another Title VII case, the Fifth Circuit stated:

These are not insignificant defects. The Plaintiffs did not, however, produce any other, more reliable, statistics on the number and qualifications of Mexican-Americans in either the state or national labor markets.

Rivera, 665 F.2d at 544 n. 19. The Court finds that the County’s census statistics are probative of the distribution of job skills among Hispanics in Deaf Smith County.

12. The Court is not persuaded that Dr. Lewin’s labor market analysis constitutes an adequate nondiscriminatory explanation of the County’s apparently discriminatory hiring practices for three reasons. One, Dr. Lewin made no effort to correlate his labor market analysis with the skills actually required by the jobs. He based his analysis on Plaintiff’s expert’s disaggregation of applicant flow data into EEO-1 categories. (Plaintiff’s Class Certification Hearing Exhibit 13-E). This breakdown into EEO-1 categories, however, was guesswork based upon job titles. Plaintiff’s expert did not draw upon any material reflecting what job skills were actually required. Class Certification Hearing Tr. at 98-99.

13. Two, the County did not introduce any evidence on either a job-by-job or department-by-department basis as to what skills were actually required of persons hired by the County during the five-year statistical period. Without such evidence, the Court is unable to conclude that the jobs at issue here involve skills not generally possessed or readily acquired by the general population. See Hazelwood, 433 U.S. at 308 n. 13, 97n S.Ct. at 2742 n. 13; Boykin v. Georgia-Pacific, 706 F.2d 1384, 1392-93 (5th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 999, 79 L.Ed.2d 231 (1984).

14. Three, several of the County’s departments encompass jobs which plainly involve skills generally possessed or readily acquired by the general population, e.g., building maintenance and road and bridge work.

15. The County also asserts that an applicant flow analysis in this case is inherently biased because the percentage of Hispanic applicants to the County greatly exceed the percentage of Hispanics in the County’s general population. The County attributes this disproportion to the higher Hispanic unemployment rate. The Court rejects this argument for two reasons. One, the County’s suggestion that its Hispanic applicant pool has been bloated by the Hispanic unemployment rate is sheer speculation. The County introduced no evidence of the percentage of its Hispanics applicants who were unemployed at the time they applied or of the relative proportion of unemployed Hispanics and non-Hispanics applying.

16. Two, the argument only has force if it suggests that the distribution of relevant job skills is different in the Hispanic and non-Hispanic applicant pools, i.e., that the higher Hispanic unemployment rate has produced a large number of unskilled, unqualified Hispanic applicants. No such evidence was introduced.

17. The Court finds that the hiring policies and practices at issue in this case were of sufficient frequency and duration as to warrant a finding that the Commissioner’s Court knew that these policies and practices were customary among County employees making hiring decisions. See Bennett v. City of Slidell, 728 F.2d 762, 768 (5th Cir.1984) (en banc).

18. The Court finds that Defendant Deaf Smith County discriminated against the class on the basis of race and national origin in violation of Title VII and 42 U.S.C. §§ 1981 and 1983 in hiring for the following departments: Sheriff’s, Social Services, Building Maintenance, and County Commissioner Precinct No. 3.

Garza’s Individual Claim

19. To establish her individual claim, analyzed as a disparate treatment violation, Ms. Garza must show: (1) membership in a minority group; (2) an application for an open job for which she was qualified; (3) rejection; and (4) the County hired a non-minority for the job. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); Page v. U.S. Industries, 726 F.2d 1038, 1055 (5th Cir.1984).

20. Ms. Garza is a member of the minority group of Hispanics. For the reasons indicated in the Class Certification Order of Nov. 8, 1983, pp. 3-4 (“Garza as an Applicant”), the Court concludes that she applied for an open job in the Sheriffs Department of Deaf Smith County. (Not mentioned in that Order, although significant, is Eva McKnight’s insistence that there were Hispanic applicants for the job, even though the County was unable to produce a single written application bearing an Hispanic surname. Class Certification Hearing Tr. at 168-70.) She was not hired for the job and the County hired a non-minority to fill the position.

21. The remaining element of Ms. Garza’s prima facie case is whether she was qualified for the job she applied for. She “is not required to prove that [s]he was the most qualified applicant for the position, but only that [her] background was such that [she] was at least presumptively qualified for the job [she] sought.” Wright v. Western Electric, 664 F.2d 959, 964 (5th Cir.1981) (emphasis in original); East v. Romine, Inc., 518 F.2d 332, 338 (5th Cir.1975). Although some circuits have held that a summary refusal to consider an applicant is dispositive on the question of qualifications, see Ostroff v. Employment Exchange, 683 F.2d 302, 304 (9th Cir.1982); Nanty v. Barrows Co., 660 F.2d 1327, 1332 (9th Cir.1981); EEOC v. Ford Motor Co., 645 F.2d 183, 188 n. 3 & 198-99 (4th Cir.1981), rev’d on other grounds, 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982), the Fifth Circuit has suggested that such a refusal is only evidence that a preferred nondiscriminatory reason is pretextual. Wheeler, 686 F.2d at 1153-54.

22. The Court finds that Ms. Garza was qualified for the position for which she applied. She had previous training in typing, shorthand and bookkeeping, and had worked as a secretary on several previous occasions. The County has not presented any evidence that qualifications other than those encompassed by the generic term “secretary” were required for this job. As noted before, there were no written job descriptions. Ms. Garza’s background certainly made her at least presumptively qualified.

23. Once the plaintiff establishes a prima facie case, the defendant must show nondiscriminatory reasons for its employment decision. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 254-56, 101 S.Ct. 1089, 1094-95, 67 L.Ed.2d 207 (1981).

24. The single nondiscriminatory reason advanced by the County is that Ms. Garza never applied for the job. The Court finds this reason pretextual because (1) Ms. Garza applied for the job, (2) the County summarily refused to follow up on her application, (3) the County had no written applications from any of the Hispanic applicants for the job, and (4) the statistical evidence shows a pervasive pattern of discriminatory hiring practices by the County.

25. The Court finds that the hiring policies and practices at issue in this case were of sufficient frequency and duration as to warrant a finding that the County Sheriff knew that these policies and practices were customary among Sheriff’s department employees making hiring decisions. See Bennett, 728 F.2d at 765 n. 1 & 768.

26. The Court finds that Defendant Deaf Smith County discriminated against Plaintiff Cecilia Garza on the basis of race and national origin in violation of Title VII and 42 U.S.C. §§ 1981 & 1983.

Further Proceedings

27. The Court’s findings in favor of Plaintiff bring this case into Stage II. See Boykin, 706 F.2d at 1394; James v. Stockham Valves & Fittings Co., 559 F.2d 310, 354-59 (5th Cir.1977), cert. denied, 434 U.S. 1034, 98 S.Ct. 767, 54 L.Ed.2d 781 (1978); Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437, 443-44 (5th Cir.1974), cert. denied, 419 U.S. 1033, 95 S.Ct. 515, 42 L.Ed.2d 308 (1974).

28. Each party is directed to submit a statement of what further proceedings are believed necessary and a proposed remedial decree by Monday, June 25, 1984. With regard to a proposed remedial decree, since counsel for the respective parties, because of their particularized knowledge about the case, are always in a far better position than the Court to evaluate and accommodate the parties’ respective interests, the Court urges the Plaintiffs and the County to reach some agreement on the form of the remedial decree. While the Court recognizes that the County has vigorously contested its liability, agreement may be reached on the form of a remedial decree without any agreement on, or waiver of a party’s right to contest, the propriety on entering such a decree. As the Supreme Court has said, “[i]n enacting Title VII, Congress expressed a strong preference for encouraging voluntary settlement.” Carson v. American Brands, 450 U.S. 79, 88 n. 14, 101 S.Ct. 993, 998 n. 14, 67 L.Ed.2d 59 (1981).

It is so ORDERED.

CONSENT DECREE

Plaintiff Cecilia Garza, on behalf of herself and all others similarly situated, filed a complaint alleging discrimination in employment by Defendant Deaf Smith County-

After a class certification hearing the Court certified a class consisting of:

All Hispanies who, since March 6, 1979, have applied for and been denied employment with Deaf Smith County.

The Court then conducted a Phase 1 trial on the issues of liability and found that Defendant had discriminated against the class on the basis of race and national origin in violation of Title VII and 42 U.S.C. §§ 1981 and 1983 in hiring in the following departments: Sheriff’s, Social Services, Building Maintenance, and County Commissioner Precinct No. 3; and that Deaf Smith County had also discriminated against Cecilia Garza on the basis of race and national origin in violation of Title VII and 42 U.S.C. §§ 1981 and 1983.

Notification of the class action was published and mailed to class members. Adequate notice was given to all members of the class certified by the Court.

Approximately 64 individuals filed Proof of Claim Forms in response to the notice. These 64 individuals constitute the “Claimants”.

Defendant filed an appeal of the Court’s Orders.

Subsequent to the foregoing, Plaintiff and Defendant, by their respective attorneys, arrived at a proposed compromise and settlement of this action. The settlement and compromise is evidenced by the Stipulation of Compromise and Agreement dated January 25, 1985 (the “Settlement Agreement”), and by this Consent Decree to which they have agreed.

In their Settlement Agreement, the Plaintiff and Defendant have each consented to the entry of this Consent Decree without this Consent Decree constituting any evidence of an admission with respect to any issue of fact or law in this action.

On January 28,1985, the Court tentatively approved the Settlement Agreement between Plaintiff and Defendant as being fair, adequate and reasonable. That tentative approval was subject to notification to the Claimants and the Court’s consideration of any objections. That notice was mailed to the Claimants on or about February 8, 1985.

Written objections to the settlement were required to be filed with the clerk of the Court on or before March 8, 1985. There was one (1) written objection filed. A hearing on objections to the settlement and on attorney’s fees was held on March 18,1985. At that hearing, all Claimants were given an opportunity to be heard.

The Court has fully considered this matter and, as a result of the foregoing and other hearings, is fully advised with respect to this matter.

NOW, THEREFORE, upon the consent of Plaintiff and Defendant, it is hereby ORDERED, ADJUDGED AND DECREED as follows:

I.

This Court has jurisdiction over the subject matter of this case, and of the Plaintiff and Defendant.

II.

The terms of the Settlement Agreement are hereby adjudged as fair, reasonable and adequate. Accordingly, the Settlement Agreement is hereby approved pursuant to Fed.R.Civ.P. 23(e).

III.

The provisions of this Consent Decree shall apply to Plaintiff, Claimants, the class certified by this Court and Defendant, and to each of their employees, agents, servants and attorneys, and all persons in active concert or participation with them.

IV.

INJUNCTIVE RELIEF AND AFFIRMATIVE ACTION

1. Defendant Deaf Smith County, its officers, agents, employees, attorneys and all those acting in active concert or participation with it, are permanently enjoined and restrained from discriminating against Hispanics on the basis of race and/or national origin in any hiring decisions for the following departments: Sheriffs, Social Services, Building Maintenance, and County Commissioner Precinct No. 3 (hereinafter collectively the “Four Departments”).

2. Job openings not filled by lateral transfer or promotion from within each of the Four Departments, shall be filled only after:

(a) a notice of such opening is posted on a designated bulletin board in the Deaf Smith County Courthouse, and
(b) the job opening is advertised in the Hereford Brand by publication on at least three (3) separate days. All notices for job opening shall specify:
(i) the name and office of the person from whom applications are to be obtained,
(ii) the name and the office of the person to whom completed applications are to be returned, and
(iii) the deadline for filing an application.

3. Whenever a person is given an application for a job opening in one of the Four Departments that person shall receive at that time:

(a) a written description of the job’s requirements and duties,
(b) a written description of any specific job qualifications,
(c) if applicable, a written description of the necessary testing procedure setting forth:
(i) type of test required,
(ii) the administering entity,
(iii) the street address of the administering entity,
(iv) the name and telephone number of a contact person at the administering entity.

4. Deaf Smith County shall not use employee selection procedures for initial employment in any of the Four Departments in question unless such procedures have been validated in accordance with the Equal Employment Opportunity Commission’s Uniform Guidelines on Employee Selection Procedures, 29 C.F.R. § 1607, or unless the County, with specific selection procedures, can show that such procedures have no disparate effect on Hispanies. The County shall have ninety (90) days from the date of this decree to conduct a review of all hiring procedures in the Four Departments in question before this paragraph shall become operative.

5. Within five (5) working days after an applicant has been selected to fill a job opening, the unsuccessful applicants shall be notified in writing that they were not hired. This notice shall include the following:

Deaf Smith County has been permanently enjoined and restrained by the United States District Court in Amarillo, Texas, from discriminating against Hispanics on the basis of race and/or national origin in any hiring decisions for the following departments: Sheriff’s, Social Services, Building Maintenance, and County Commissioner Precinct No. 3.
If you believe that Deaf Smith County has not hired you because of your race or your national origin, you have the right to file a grievance with the Deaf Smith County Title VII Grievance Committee. To find out the necessary procedures for filing a grievance, contact one of the following:
Deaf Smith County Title VII Grievance Committee
c/o County Judge
Deaf Smith County Courthouse
Hereford, TX
Texas Rural Legal Aid
1406 West Highway 60
Hereford, Texas 79045

6. All records upon which employer selection in the Four Departments is based shall be maintained for a period of five (5) years. An applicant who claims that an employment decision was made in contravention of this Consent Decree, such applicant’s attorney, or counsel for class, may inspect and copy, at their own expense, during normal business hours, after reasonable notice to the County (not less than 48 hours), the records maintained under this paragraph.

7. The County shall adopt hiring goals to be achieved over the next five years designed to increase the Hispanic employment in the Four Departments to a level equal to or above the percentage of Hispanics in the Deaf Smith County work force as shown by the statistics maintained by the Texas Employment Commission.

8. (a) There is hereby created a body to be known as the “Deaf Smith County Title VII Grievance Committee” (hereafter the “Grievance Committee”). The Grievance Committee shall consist of three (3) persons: one designated by the County, one designated by the class counsel, and a third person agreeable to both the class and the County. In the event those persons are unable to agree on a third person, they shall ask the Court to appoint an arbitrator to serve as the third person from a list prepared by the American Arbitration Association. The expenses of the arbitrator shall be borne equally by the grieving applicant and the County.

(b) The purpose of the Grievance Committee shall be to hear complaints regarding racial and/or national origin discrimination in hiring decisions made by the Four Departments and may be used by the County to hear similar complaints for all other departments. The Grievance Committee shall report directly to the Deaf Smith County Commissioner’s Court and such body shall make any final decisions with respect to actions to be taken on the recommendations of the Grievance Committee.

(c) The Grievance Committee’s recommendations shall issue upon majority vote of the Grievance Committee’s members after hearing the evidence of both the grieving applicant and the County. Also upon majority vote, the Grievance Committee shall adopt such rules and procedures as are necessary to effectuate its purpose.

(d) A grieving applicant may appear before the Grievance Committee either in person or through a designated representative, who may or may not be a licensed attorney.

(e) The Grievance Committee shall have the power to subpoena witnesses and documents to further its investigations and shall meet at least monthly to hear any complaints of discrimination.

(f) All persons believing that they have suffered discrimination in violation of this Consent Decree shall first pursue remedies through the Grievance Committee before filing any action, claim or motion in this proceeding in this Court for enforcement, contempt, compliance or violation of the Consent Decree.

BACK PAY

9. Defendant agrees to create a back pay fund for the class to be known as the “Deaf Smith County Class Settlement Fund” (hereafter the “Fund”). The Fund shall consist of a total of Sixty Thousand Dollars and no/100’s ($60,000.0) which shall be deposited at interest for the class upon preliminary approval of the Settlement Agreement by the Court. The parties agree that the screening requirements for class members to qualify for back pay under this agreement will be:

(a) “Proof of Claim” forms must have been filed on or before January 1, 1985;
(b) Claimants must be Hispanic; and
(c) Claimants must have completed a written application for a position in one of the Four Departments during the class period.

The parties agree that the back pay fund described herein shall be distributed in the following manner. A formula will be developed by counsel for the class taking into consideration when claimant applied. Claimants will be paid on a pro rata basis. For example, if there were sixty claimants who applied at the same time, each would receive $1,000.00. If one claimant applied in 1980 and the remaining fifty-nine claimants applied in 1984, the 1980 claimant would receive a sum in excess of $1,000.00, reducing the sums received by the remaining fifty-nine claimants proportionately. However, the total amount paid by defendant out of the Fund to all claimants shall not exceed $60,000.00.

10. Defendant shall pay Plaintiff Cecilia Garza Eight Thousand Five Hundred Dollars ($8,500.00) as settlement of all claims asserted by her against Defendant.

ATTORNEYS’ FEES, EXPENSES AND COSTS

11. After full hearing, the Court finds the amount of $56,500.00 for attorneys’ fees, expenses and costs to be reasonable in light of the standards enunciated in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), and Piambino v. Bailey, 610 F.2d 1306 (5th Cir.1980). Notice has been given to the class of the proposed attorneys’ fees, counsel has offered relevant evidence and was available for cross-examination, and objectors had an opportunity to be heard. The Court has carefully analyzed the motions for attorneys fees filed in this case, the briefs in support and in opposition thereto and the evidence and objections offered at the hearing, and has made an independent evaluation of the reasonableness of the fees.

V.

This Consent Decree constitutes a final adjudication of this action with prejudice between Plaintiff, Claimants, the class members and Defendant. Plaintiff, Claimants and all members of the class and their precedessors and successors, are hereby barred from instituting, maintaining or asserting any claim, demand, right or cause of action against Defendant, arising out of an alleged discriminatory treatment in employment practices.

VI.

There appears to be no just reason for delay in entering this Consent Decree. Consequently, the Court expressly directs the entry of this Consent Decree pursuant to Fed.R.Civ.P. 54(b).

VII.

The Court hereby retains jurisdiction of this cause for the purpose of issuing any additional orders or decrees needed to effectuate, clarify or enforce the full purpose of this Consent Decree. This Consent Decree supercedes the Remedial Decree of September 19, 1984.

VIII.

Entry of this Consent Decree is in the public interest.