author: COFFRIN, Chief Judge.

text:
    Alan CROWE and Karen Crowe individually, and on Behalf of their minor child, Sonja Crowe v. Margaret M. HECKLER, Secretary of Health and Human Services, and Martha A. McSteen, Acting Commissioner of Social Security.
    Civ. A. No. 85-130.
    United States District Court, D. Vermont.
    July 8, 1985.
    Order July 11, 1985.
    Dixie Henry, Vermont Development Disabilities Project, Burlington, Vt., for plaintiffs.

      Robert J. Triba, Asst. Regional Atty., Department of Health and Human Services, Boston, Mass., and George Terwilliger, Asst. U.S. Atty., D. Vt., Burlington, Vt., for defendants.
   OPINION AND ORDER

COFFRIN, Chief Judge.

Plaintiff Alan Crowe, his wife, Karen, and daughter, Sonja, have filed this action against Defendants Margaret Heckler and Martha A. McSteen, alleging that Defendants have wrongfully withheld the payment of interim dependent benefits pending the redetermination of Alan Crowe’s disability status pursuant to the Social Security Disability Benefits Reform Act of 1984 (the Act). Defendant Heckler has moved to dismiss for lack of subject matter jurisdiction, or, in the alternative, for summary judgment. Plaintiff has filed a memorandum in opposition. Oral argument has been waived by the parties. For the reasons set forth below, Defendant’s motions are DENIED.

Facts

On October 23, 1979, Alan Crowe filed an application for disability insurance benefits. He was determined to be disabled and commenced receiving disability payments for the period of his disability, beginning September 30, 1977. Crowe’s claim was later reviewed pursuant to the continuing disability investigation process, and it was determined that his disability had ceased. Crowe then requested a hearing before an ALJ which was heard on March 29, 1983. Following the hearing, the AU concluded, in a decision dated June 21, 1983, that Crowe’s disability had ceased, based on an analysis of the then current disability criteria (and without application of the medical improvement standard). At the time his benefits were terminated, only Crowe himself had received benefits and no dependents were receiving benefits on his account. When the Appeals Council refused to review his claim on August 17, 1983, its decision became the final decision of the Secretary.

Crowe timely appealed the final decision of the Secretary to this Court, claiming that his disability benefits had been improperly terminated because of the Secretary’s failure to apply a medical improvement standard. Before argument was scheduled, but after both parties had briefed the issue, Pub.L. 98-460 was signed into law in October, 1984, requiring that the case be remanded to the Secretary for a redetermination and that Crowe be given the opportunity to elect to receive benefits pending such redetermination. On October 31, 1984, the Hon. Franklin S. Billings, Jr., remanded the case to the Secretary.

In December 1984, two months after the remand, Crowe filed an election under section 2(e) of the Reform Act to receive interim benefits for himself and anyone qualified on his social security record pending a redetermination of the termination of his disability benefits. In June, 1983, Crowe had married his wife, Karen, and his child, Sonja, was born in May 1984. Under the Act, a wife of a disabled claimant may receive dependent benefits after one year of marriage.

In January, 1985, an issue arose as to the eligibility of his wife and child to receive dependent benefits pursuant to the remand. Plaintiffs’ counsel contacted the U.S. Attorney for clarification regarding payment of dependent benefits pending remand. On January 22, 1985, the Montpelier, Vermont, Social Security District Office called Crowe and informed him that his benefits would be reinstated and that his wife and child were also eligible for benefits and would be paid.

During the months January, February and March, 1985, Crowe, as well as his wife and child, received benefits. In April, however, Crowe was paid benefits but his wife and daughter were not. The reason that benefits were not paid to the wife and daughter, according to the Social Security District Office, was a change in policy based on new instructions received by telephone. At that time plaintiffs’ counsel was informed that it was the position of the Social Security Administration (the SSA) that no notice to Crowe was required when the dependent’s benefit checks were stopped because they were paid due to an administrative error.

Plaintiffs then filed an action in this court seeking the restoration of benefits to Karen and Sonja. At a hearing held on May 10, 1985, on the issue of interim relief, the parties stipulated that Defendant would pay benefits to Karen and Sonja Crowe for the months of March and April, although the SSA in no way conceded Plaintiffs’ claims of entitlement. Karen and Sonja were issued benefit checks for March and April, 1985. By letter dated May 18, 1985, the SSA sent Plaintiffs written notice of termination of the benefits for Karen and Sonja Crowe indicating therein that it was also paying the May benefits. The notice stated that the benefits may have been paid in error. It also advised Plaintiffs of their right to request reconsideration of the decision.

Defendant has moved to dismiss for lack of subject matter jurisdiction due to Plaintiffs’ failure to exhaust the administrative remedies now available to them. Alternatively, they have moved for summary judgment, claiming that Karen and Sonja have no legal right under the SSA to the benefits they seek. Plaintiffs have filed an opposing memorandum.

Discussion

In their complaint Plaintiffs assert that this court has jurisdiction pursuant to 28 U.S.C. § 1331 (federal question) and/or 28 U.S.C. § 1361 (mandamus). We do not address these claims as we are satisfied under the circumstances of this case that we have jurisdiction under 42 U.S.C. § 405(g).

I. Jurisdiction under 1$ U.S.C. § 405(g)

Under section 405(g), a claimant may seek judicial review after a “final decision” has been rendered by the Secretary. The “final decision” requirement has been held to consist of two elements: 1) the nonwaivable requirement that a claim for benefits has been presented to the Secretary and 2) a waivable requirement that the claimant has exhausted his administrative remedies. Mathews v. Eldridge, 424 U.S. 319, 328-30, 96 S.Ct. 893, 899-900, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 764-65, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522 (1975); City of New York v. Heckler, 742 F.2d 729, 734 (2d Cir.1984).

Since Plaintiffs clearly have satisfied the presentment requirement, our analysis will focus on whether Plaintiffs have satisfied the exhaustion requirement.

Defendant contends that Plaintiffs have not exhausted their administrative remedies because Karen and Sonja Crowe can appeal this decision through appropriate SSA channels as indicated by the termination notice of May 18, 1985. Although we agree with Defendant that Plaintiffs have not exhausted the administrative procedures available to them, we think that the facts of this case warrant a conclusion that waiver of the exhaustion requirement is appropriate.

The exhaustion requirement may be waived, either by the Secretary, Weinberger v. Salfi, supra, 422 U.S. at 766-67, 95 S.Ct. at 2467, or in appropriate circumstances, by the courts, Mathews v. Diaz, 426 U.S. 67, 76-77, 96 S.Ct. 1883, 1889-90, 48 L.Ed.2d 478 (1975). The Supreme Court has approved judicial waiver where plaintiffs legal claims are collateral to the demand for benefits, where exhaustion would be a futile gesture, or where the harm suffered in the interim would be irreparable in the sense that no post hoc relief would be adequate. City of New York, supra, at 736, comparing Mathews v. Eldridge, supra (exhaustion waived) with Heckler v. Ringer, supra, (1984); 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984) (exhaustion not waived).

Because the Court failed to state whether each of the factors — futility, collaterality, and irreparable harm — must be present before a court may waive the exhaustion requirement, the Second Circuit, in the absence of clear guidance has adopted the position that “no one factor is critical.” City of New York, supra, at 736, citing Smith v. Schweiker, 709 F.2d 777, 780 (2d Cir.1983). The Second Circuit’s approach is to “balanc[e] the competing considerations to arrive at a just result under the circumstances presented.” Id. We think that the adoption of the Second Circuit approach indicates waiver of exhaustion in this case because Plaintiffs have shown both that their claim is collateral to Plaintiff Alan Crowe’s claim for benefits and that they would suffer irreparable harm in a way that cannot be remedied by the later payment of benefits.

A. Collaterality

The Defendant contends that Plaintiffs claims are not collateral to Plaintiff Alan Crowe’s claim for benefits, but are clearly claims for benefits. Therefore, they contend that judicial waiver of exhaustion in this instance is inappropriate.

We disagree. Plaintiffs are not requesting this court to rule on the claimant’s underlying claim for benefits. Rather, they raise an unrelated question— whether Congress intended by Pub.L. 98-460 that dependents of disabled workers, not on the rolls at the time the disabled workers’ benefits were terminated by the Secretary after she applied an improper standard, should, nevertheless, qualify for interim dependent benefits pending outcome of the disabled workers’ underlying claims. Plaintiffs’ request concerns the proper criteria and procedure for administering benefits pending the redetermination of Alan Crowe’s disability status. Plaintiffs claim that this court’s acceptance of jurisdiction over this matter would not involve it, in any way, with the determination of Alan Crowe’s underlying claim. Moreover, they argue that, should Karen and Sonja prevail on the issue of interim dependent benefits, the Secretary would still be at liberty to terminate the payments upon a later finding that Alan Crowe is not disabled.

Although one can argue that Plaintiffs’ claims are somewhat intertwined with Alan Crowe’s claim for benefits, the fact that they are not “wholly” collateral, see e.g., Mathews v. Eldridge, supra, (constitutional issue raised was entirely collateral to underlying claim for benefits), however, does not mean that judicial waiver is necessarily precluded. The Second Circuit has held that where a plaintiff’s claim is “substantially collateral to [his] entitlement to benefits,” waiver is appropriate. City of New York, supra, at 737 (although plaintiff’s claim that Secretary unlawfully failed to assess each claimant’s residual functional capacity on an individual basis was not “wholly” collateral to plaintiff’s claim for benefits, court held that judicial waiver was, nevertheless, appropriate because claim was “substantially” collateral).

Although Plaintiffs have not raised a constitutional claim wholly collateral to Alan Crowe’s claim for benefits, we think that Karen and Sonja’s claim for interim dependent benefits — which is a separate issue regarding the statutory interpretation of Pub.L. 98-460 — is substantially collateral to the underlying claim for benefits.

The Supreme Court has made a clear pronouncement that exhaustion requirements, when possible, should “be construed so as not to cause crucial collateral claims to be lost and potentially irreparable injuries to be suffered.” Mathews v. Eldridge, supra, 424 U.S. at 331 n. 11, 96 S.Ct. at 901 n. 11. We think that Karen and Sonja’s claims are substantially collateral and crucial to their immediate health and welfare. Accordingly, we find that judicial waiver of the exhaustion requirement is appropriate.

B. Irreparable Harm

We turn next to Plaintiffs’ assertion that requiring them to exhaust the recently offered administrative remedies would cause them irreparable harm which could not be adequately remedied with post hoc relief. Plaintiffs contend that waiver of exhaustion is appropriate in this circumstance because claimant, Alan Crowe, remains allegedly disabled and that, without interim dependent benefits, the family has insufficient means. Testifying that he has no other income; no stocks, bonds, or real estate, Crowe claims that his family has suffered extreme financial hardship since Karen and Sonja’s benefit checks stopped coming. Id., at 11 26. We think that requiring Karen and Sonja to exhaust their administrative remedies would cause them irreparable harm because they are presently in dire financial straits. In addition, at the time of the hearing on May 10, 1985, Karen was pregnant and expecting a child the following month. According to an affidavit which she filed at that time, the family financial circumstances caused her to be nervous and anxious. She was particularly concerned about how the family would manage when the second child was bom. Although not so stated in the affidavit her worries no doubt would be compounded by the birth of the new child because the infant plaintiff, Sonja, would be only a year old at that time.

In Mathews v. Eldridge, supra, at 331, 96 S.Ct. at 900, the Supreme Court held that judicial waiver of the exhaustion requirement was appropriate where a claimant whose disability benefits were terminated “ha[d] raised at least a colorable claim that because of his physical condition and dependency upon the disability benefits, an erroneous termination would damage him in a way not recompensable through retroactive payments.” Other courts, when confronted with motions for preliminary injunctions, have also determined that retroactive payments do not make disability claimants whole because such individuals are frequently in dire financial circumstances. Leschniok v. Heckler, 713 F.2d 520, 524 (9th Cir.1983); Caswell v. Califano, 583 F.2d 9, 14 (1st Cir.1978); Dixon v. Heckler, 589 F.Supp. 1494, 1509 (S.D.N.Y.). Cf. City of New York v. Heckler, supra (wrongful denials of disability benefits to persons with severe mental illnesses constituted irreparable harm which retroactive benefits could not recompense for their injury). In a similar vein, we think that, in the instant case, Plaintiffs’ dependency on the benefits, together with the fact that retroactive payments could not remedy the harm suffered by them, indicates that judicial waiver of the exhaustion requirement is warranted.

Another example of a situation where judicial waiver was proper is presented in Jones v. Califano, 576 F.2d 12, 20-21 (2d Cir.1978). Jones was a class action in which the Second Circuit noted the urgency of claimants’ predicament where they alleged that the Secretary’s resolution of conflicting federal assistance statutes resulted in their receipt of deficient disability benefits:

For poor and disabled people, time is a precious commodity even when the amounts involved are small. To require each claimant to pursue his individual administrative remedy is to vindicate no legitimate agency interest when the only disputed issue is one of statutory construction.

Id., at 20-21. Likewise, we think that, in a stalemate over the construction of the Act, as presented in the instant case, the scale tips toward waiver of the exhaustion requirement, especially in view of the fact that Plaintiffs’ are needy and would suffer irreparable harm if they were forced to exhaust their administrative remedies.

Plaintiffs situation is clearly distinguishable from those cases in which courts have determined that claimants have suffered no irreparable harm. In Bartlett v. Schweiker, 719 F.2d 1059, 1061-62 (10th Cir.1983), the court held that recipients of disability benefits whose benefits were terminated failed to show irreparable harm where they asserted no allegations as to elements of irreparable harm and where they failed to make a showing of irreparable harm in response to defendant’s motion to dismiss. Here, Alan Crowe’s Affidavit demonstrates that Plaintiffs are suffering severe financial hardship and that they are unable to meet their daily needs.

In Smith v. Schweiker, supra, the court refused to waive the exhaustion requirement where a class of claimants, whose disability benefits had been terminated, would not suffer irreparable harm if forced to exhaust administrative remedies. At the hearing on this issue, the court observed that both the named plaintiffs and the intervenors were receiving benefits and were eligible to make claims for past losses, and also that future class claimants could receive continuing benefits pending the outcome of the appeal. In the instant case, however, Plaintiffs have only received dependent benefits for the period January to May, 1985, and the Defendant, contends that she has no duty to pay further dependent benefits pending the outcome of Alan Crowe’s disability claim. Moreover, the fact that Plaintiffs can make claims for past losses does not diminish the severity of their potential injury. Poor families, such as Plaintiffs, require money in-hand to satisfy their immediate personal and medical needs. Even if Alan Crowe’s underlying claim is ultimately resolved in his favor, Plaintiffs do not have the luxury of postponing the receipt of interim dependent benefits until they can make claims for past losses.

We think that the Plaintiffs have clearly demonstrated that they may suffer irreparable harm if forced to exhaust their administrative remedies. Therefore, we think waiver of exhaustion is appropriate.

Having balanced the competing considerations, as required by City of New York, supra, and having found two grounds for which waiver is appropriate — collaterally and irreparable harm — we find we have subject matter jurisdiction over this action. Defendants’ motion to dismiss is denied.

IV. Defendant’s Motion For Summary Judgment

Plaintiffs assert that Congress provided that claimants, whose disability benefits were terminated by the Secretary as a result of the Secretary’s application of an improper standard, may elect to receive interim benefits while the Secretary conducts a proper redetermination. Pub.L. 98-460. Section 2(e) of this law mandates that the Secretary pay interim benefits upon a claimant’s election:

Any individual whose case is remanded to the Secretary ... may elect ... to have payments made ... [sjuch payments (if elected) — (1) shall be made at least until an initial redetermination is made by the Secretary; and (2) shall begin with the payment for the month in which such individual makes such an election.

(emphasis added). Plaintiffs claim that the right of a claimant whose case has been remanded pursuant to the Act to receive the interim payments arises when he or she elects to receive them. Thus, Plaintiffs assert, if, upon a claimant’s election, he or she has a spouse and child who satisfy the eligibility requirements, then all three are entitled to the interim payments even though the claimant had no dependents at the time of termination.

As support for this interpretation, Plaintiff points to Section 2(e)’s reference to 42 U.S.C. § 423(g). Section 2(e) of the new law states that the claimant’s election of benefits must be in accordance with Section 223(g) [42 U.S.C. § 423(g)], That section provides that an individual “may elect any other benefits under this subchapter based on such individual’s wages and self-employment income ...” 42 U.S.C. § 423(g)(1)(C). (emphasis supplied). Since such “other benefits” include payments to the wife and minor dependent children of a disabled worker, 42 U.S.C. § 402(b) and (d), and since the dependent benefits flow directly from the wage earner’s entitlement to benefits, 20 CFR 404.330 et seq.; 404.350 et seq., Plaintiffs claim that their right to dependent benefits is clear.

The Defendant, on the other hand, claims that Karen and Sonja Crowe are not entitled to receive the interim payments because they were not dependents on Alan Crowe’s account in June, 1983 — the month Mr. Crowe’s disability benefits were terminated. The Secretary hinges her argument on the statutory language of 42 U.S.C. § 423(g). She contends that, in order to make an election to have benefits “continué] for an additional period,” (emphasis added) an individual must have been receiving benefits prior to the election. Further, she asserts that, “there is nothing in the language of the Reform Act which would allow payments of interim benefits to new applicants prior to a determination that the wage earner is in fact disabled. Defendant’s Memorandum, at 15, (emphasis in original).

For support, the Secretary relies on an unwritten policy of the Social Security Agency, and an internal SSA Program Operations Manual (POMS Manual). Prior to the issuance of the termination notice to Karen and Sonja, the Defendant terminated the interim dependent benefits after being informed by the Baltimore Regional Office that there existed an unwritten policy which was to be drafted into regulation, prohibiting the release of interim benefits to individuals not on the rolls at the time of the claimant’s termination. The Secretary asserts that her actions are authorized by this unwritten policy. Defendant also claims that the SSA practice of holding back the processing of “apparently eligible” dependents, such as Karen and Sonja Crowe, until the determination of Alan Crowe’s entitlement to disability benefits is authorized by an internal agency manual— the POMS Manual. POMS A00402.240D, Defendant’s Attachment 3, at 3. With regard to the Secretary’s first contention, an “unwritten policy” has no binding legal effect until it is drafted into regulation. With regard to her second assertion, Plaintiffs correctly point out that the POMS Manual is not a regulation and has no legal effect. Schweiker v. Hansen, 450 U.S. 785, 789, 101 S.Ct. 1468, 1471, 67 L.Ed.2d 685 (1981).

Although neither the Second Circuit, nor the legislative history of the Act has specifically addressed the issue of whether those dependents who become dependents after the Secretary’s decision, but prior to the end of the claimant’s eligibility for continued payments, see 20 C.F.R. §§ 404.330 et seq., 404.350 et seq., may receive interim dependent benefits, we think that the intent of Congress, in enacting the provision for election of benefits pending appeal, is reasonably clear.

The legislative history of the Social Security Disability Benefits Reform Act of 1984, Pub.L. 98-460, emphasizes that the Act is for the purpose of reforming the system. 1984 U.S.Code Cong. & Admin. News, 90th Cong.2d Sess. 4, at 3039. After observing that “[t]he disability insurance program has attracted substantial Congressional attention over the last two years, primarily because of the numbers of beneficiaries whose benefits have been terminated,” the House Ways and Means Committee stated that it “believes that the process over the last several years has resulted in erroneous termination of benefits for at least some people.” Id. One of the stated purposes of the bill is, “to clarify statutory guidelines for the determination process to insure that no beneficiary loses eligibility for benefits as a result of careless or arbitrary decision-making by the Federal government.” Id. Another stated purpose of the bill is, “to provide a humane and understandable application and appeal process for disability applicants and beneficiaries appealing termination of their benefits. Id. (emphasis supplied).

The new Reform Act provides on a “permanent basis” for the continuation of benefits during appeal in all CDI (continuing disability investigations) cases through the decision of the AU. Id. at 3055. The reason for the continuation of benefits is that the committee believes that “providing for continuation of payments during appeal helps considerably to ease the severe financial and emotional hardships that would other wise be suffered by disabled persons.” Id. Although the legislative history does not include a clear statement about benefits to dependents of disabled workers, it seems that, from the spirit behind the legislation’s continuation of benefits to disabled workers and from Section 2(e)’s requirement that benefits be administered in conjunction with section 423(g), it can be implied that the benefits flowing from a disabled worker to his dependents were meant to be awarded pending redetermination. Plaintiffs claim that Congress has presumptively reaffirmed Mr. Crowe’s entitlement until the Secretary applies the proper legal standard.

We agree. The fact that Congress has decided to let terminated disabled workers receive interim benefits pending redetermination indicates that Congress did not want to place the financial hardship resulting from the Secretary’s mistake on people who, after going through protracted Social Security determinations, hearings, redeterminations and appeals, had been determined to be disabled. It is important to recognize that this Reform Act is not aimed at initial disability applicants, but individuals who were at one time determined to be disabled. In remarks made from the Senate floor prior to passage of the Act, Senator Sasser expressed his concern for the plight of the terminated claimants and his hope that passage of the Act will help alleviate their situation:

It was really administrative folly which precipitated these wholesale terminations and the cruel injustices that were worked on literally thousands of disabled Americans. It is hoped that [Pub.L. 48-960] albeit long overdue will redress these injustices.

130 Cong.Rec. 11,452 (1984).

Had the Secretary not applied an improper standard in the first place, then Alan Crowe would still be regarded as a disabled worker and, as soon as his wife and child satisfied the eligibility requirements, they would have been added to the rolls. Thus, for example, a wife has to be married to the claimant for one year before she is entitled to benefits, her rights would have vested in June 1984, one year after they had married. If claimant’s status as disabled had not been terminated in June, 1983, then his wife would have been eligible for benefits in June, 1984 — which is six months before Mr. Crowe applied for interim benefits. If at some time in the future the SSA finds that Mr. Crowe is still disabled, it will have to pay retroactive benefits to Karen Crowe, starting from June, 1984.

Bearing in mind the spirit of the new legislation, we turn back to the task of interpreting the statutory language. Under the new statute it is clear that Alan Crowe, whose benefits were terminated, may receive interim benefits pending appeal, or, as the statute reads, may have his benefits continued. We think that implicit in the word “benefits” is the notion of entitlement. As we read the statute, Alan Crowe may continue to receive those benefits to which he is entitled. As referred to above, section 2(e) of the Act — the election of benefits provision — states that such election must be in accordance with 42 U.S.C. § 423(g). That provision, in turn, states that an individual “may elect any other benefits under this Act based on such individual’s wages and self-employment income.” 42 U.S.C. § 423(g)(1). Other benefits which flow from the disabled worker’s entitlement to benefits include payments to the wife and minor dependent children of a disabled worker who satisfy the conditions provided in 42 U.S.C. § 402(b) and (d). Viewed in this way, Karen and Sonja Crowe are not “new” applicants as the Secretary contends, but are dependents of Alan Crowe whose benefits flow from Alan Crowe’s status as a disabled worker. Since, at the time of the election, Alan and Karen Crowe had been married one year (as required by 20 C.F.R. § 404.330) and had a child, Sonja, who met the conditions in 20 C.F.R. § 404.350, we conclude that Karen and Sonja are entitled to the payment of interim dependent benefits.

We think it is reasonably clear that Congress did not want to place the enormous financial strain resulting from the Secretary’s application of the wrong standard on the families of disabled workers. Certainly, Congress did not want to make their plight worse. Were we to hold otherwise, Alan Crowe’s monthly disability check of $588 would be used to feed, clothe and house at least three, possibly four persons, instead of one. That result would be unfair and inconsistent with the spirit of the Act. Prior to the passage of the Act Senator Levin addressed his colleagues in the Senate, urging them to vote for its passage. In speaking about the problems with the disability program, he lamented that “[i]t has been so poorly administered, with no thought to our basic rules of reason, fairness, and compassion.” 130 Cong.Rec. 11, 460 (1984). We think that Congress intended that the new Act be administered with reason, fairness, and compassion. Accordingly, we deny the Secretary’s motion for summary judgment.

Since there is no pending motion for summary judgment for plaintiffs, no judgment may be entered for them at this time. However, in view of the disposition of Defendant’s summary judgment motion a trial in this matter is not indicated. Summary judgment will be entered for the Plaintiffs if requested by them by appropriate motion. Such judgment will direct the Secretary to pay interim dependent benefits to the plaintiffs from June, 1985, until she makes an initial redetermination of Alan Crowe’s eligibility for disabled workers’ benefits.

Conclusion

Defendant’s Motion to Dismiss is DENIED. Defendant’s Motion for Summary Judgment is DENIED.

ORDER

Plaintiffs’ Motion for Summary Judgment is granted. The Secretary shall pay interim dependent benefits to the plaintiffs from June, 1985, until she makes an initial redetermination of Alan Crowe’s eligibility for disabled workers’ benefits. The Clerk of Court shall enter judgment for the plaintiffs in accordance with this Order.

      . Under 42 U.S.C. § 425(a) (1983) the Secretary is authorized to terminate a claimant’s disability benefits upon evidence that the disability has "ceased." The Secretary's interpretation of the statute has been that benefits may be terminated based only on substantial evidence that the claimant is not currently disabled, without regard to whether there has been medical improvement in the claimant’s condition. The Secretary s view is inconsistent with case law in this circuit as well as in the majority of others. De Leon v. Secretary of HHS, 734 F.2d 930 (2d Cir.1984); Kuzmin v. Schweiker, 714 F.2d 1233 (3d Cir.1983); Simpson v. Schweiker, 691 F.2d 966 (11th Cir.1982); Weber v. Harris, 640 F.2d 176 (8th Cir.1981); Cassiday v. Schweiker, 663 F.2d 745 (7th Cir.1981); Hayes v. Secretary of Health, Education and Welfare, 656 F.2d 204 (6th Cir.1981); Finnegan v. Matthews, 641 F.2d 1340 (9th Cir.1981); Miranda v. Secretary of Health, Education and Welfare, 514 F.2d 996 (1st Cir.1975); Rivas v. Weinberger, 475 F.2d 255 (5th Cir.1973). Both the statute and the regulations promulgated thereunder suggest that a comparative standard should be used in deciding whether to terminate an individual’s benefits, i.e., comparing the claimant's condition at the time of review with his condition at the time benefits were initially granted. Thus, these circuits have held that once a claimant has established that he is disabled, his disability status will not be terminated absent evidence of medical improvement.

      . In an affidavit submitted to the court, in support of Plaintiffs’ application to bring this action in forma pauperis, Alan Crowe states that his disability check in the amount of $588 per month is insufficient to maintain the health and welfare of his family. Affidavit of Alan Crowe, at ¶ 23. His monthly expenditures are as follows:
      Rent $138
      Electricity 40
      Food 200
      Milk 20
      Car Payments 82
      Insurance 43
      Telephone 35
      Cable 10
      Soap, etc. 10
      Diapers 25
      Laundry 10
      Gas 50
      Clothes 40
      $703
      $703

        Id., at ¶ 25.


source: Caselaw Access Project

author: TENNEY, District Judge.

license: Public Domain

text:
    Lisa M. AVAGLIANO, et al., Plaintiffs, v. SUMITOMO SHOJI AMERICA, INC., Defendant. Palma INCHERCHERA, Plaintiff, v. SUMITOMO CORP. OF AMERICA, Defendant.
    Nos. 77 Civ. 5641 (CHT), 82 Civ. 4930 (CHT).
    United States District Court, S.D. New York.
    July 10, 1985.
    Reconsideration Denied Oct. 9,1985.

      Steel & Bellman, P.C., New York City, for plaintiffs Avagliano, et al. and Incherchera; Lewis M. Steel, Gina Novendstern, Richard F. Bellman, of counsel.
    Epstein Becker Borsody & Green, P.C., New York City, for defendant Sumitomo Corp. of America; Ronald M. Green, and Wender Murase & White, New York City, of counsel.
   OPINION

TENNEY, District Judge.

The plaintiffs brought these actions under 42 U.S.C. § 1981 (1982) (“Section 1981”), and Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17 (1982) (“Title VII”) alleging employment discrimination on the part of the defendant, Sumitomo Corporation of America (“Sumitomo”), formerly Sumitomo Shoji America, Inc. The plaintiffs claim that Sumitomo has a practice of hiring only male Japanese citizens to fill positions above the clerical level and that this practice results in discrimination based on sex, national origin, and race. The plaintiffs are seeking both injunctive relief and damages.

The actions in Avagliano and Incherchera were consolidated for the purposes of discovery. In a recent opinion, the Court granted the plaintiffs’ motion for class certification and designated three nationwide classes, consisting of past and present employees of Sumitomo. The Court also directed the parties to brief the issues addressed herein.

Three questions are currently before the Court: (1) Should notice be given to class members at this time? (2) What time limitations apply to the plaintiffs’ Title VII claims? and (3) What statute of limitations applies to the plaintiffs’ Section 1981 claims? These issues are resolved below.

DISCUSSION

I. Notice

The defendant argues that individualized notice and the right to opt out of each class should be given to all potential class members. The plaintiffs agree that notice should be given, but argue that notice concerning the pending action should be posted on bulletin boards in the workplace, and that an opt-out provision should not be included in the notice. The Court agrees with the plaintiffs.

Notice and the right to opt out are not required in this case. Notice to class members is not mandatory where — as here — the class has been certified under Federal Rule of Civil Procedure (“Rule”) 23(b)(2) (“(b)(2)”). See Frost v. Wein berger, 515 F.2d 57, 65 (2d Cir.1975), cert. denied sub nom. Frost v. Mathews, 424 U.S. 958, 96 S.Ct. 1435, 47 L.Ed.2d 364 (1976); Arthur v. Starrett City Assoc., 98 F.R.D. 500, 508 (E.D.N.Y.1983); see generally Newburg on Class Actions, §§ 7992-7992d (1978 and Cum.Supp.1980 and Supp. 1984) (“Newburg”). As long as representation of the class is adequate, due process does not mandate that notice be given to individual class members. See Wetzel v. Liberty Mutual Ins. Co., 508 F.2d 239, 256 (3d Cir.), cert. denied, 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 679 (1975). Further, there is no requirement in a (b)(2) class action that class members be given the right to opt out of the class. See Plummer v. Chemical Bank, 668 F.2d 654, 657 n. 2 (2d Cir.1982); Arthur v. Starrett City, 98 F.R.D. at 508; Wilder v. Bernstein, 499 F.Supp. 980, 993 n. 30 (S.D.N.Y.1980).

Nevertheless, it is within the court’s discretion to direct that notice be given, where appropriate, at any stage in the action. Rule 23(d)(2); see Vulcan Soc’y v. Fire Dep’t, 82 F.R.D. 379, 402 (S.D.N.Y.1979); Women’s Committee for Equal Employment Opportunity v. NBC, Inc., 71 F.R.D. 666, 671 (S.D.N.Y.1976). Although some form of notice may be appropriate in (b)(2) class actions, “experience teaches that such notice may come late in the litigation.” United States v. Allegheny-Ludlum Indus., Inc., 517 F.2d 826, 878 (2d Cir.1975), cert. denied, 425 U.S. 944, 96 S.Ct. 1684, 48 L.Ed.2d 187 (1976).

In order for a class to be certified under (b)(2), the defendant must have acted in a manner alleged to be hostile to the entire group, and the relief sought must be relief that is applicable to the class as a whole. See United States v. Allegheny-Ludlum, 517 F.2d at 878; Wetzel v. Liberty Mutual, 508 F.2d at 250; Practice Commentary to Rule 23(b)(2). “Courts and commentators alike recognize that Rule 23(b)(2) was intended for use in civil rights cases, including employment discrimination litigation.” Newberg, § 7992. Such actions are usually certified under (b)(2) because the plaintiff class is homogeneous, id., and the conduct is challenged on a ground that is applicable to the entire class. See 7A C. Wright and A. Miller, Federal Practice and Procedure § 1775 (1971 and 1984 Supp.) (“Wright and Miller”).

Several factors weigh against providing either individualized notice or the right to opt out. See 7A Wright and Miller, § 1793. First, since the (b)(2) class is a homogeneous one, fair and adequate representation by the named plaintiffs serves to ensure that the interests of all class members are protected. See Kyriazi v. Western Electric Co., 647 F.2d 388, 393 (3d Cir.1981) (quoting Van Gemert v. Boeing Co., 259 F.Supp. 125, 130 (S.D.N.Y.1966)). Second, because it is often difficult to determine the identity of every class member, requiring individualized notification and providing the right to opt out would delay the final resolution of (b)(2) class actions. See Paddison v. Fidelity Bank, 60 F.R.D. 695, 699-700 (E.D.Pa.1973); Advisory Rules Committee Notes on Rule 23(b)(2); “Suits brought by private employees are the cutting edge of the ... sword which Congress has fashioned to fight ... discrimination in employment____ The imposition of notice and the ensuing costs often discourage such suits.” Wetzel v. Liberty Mutual, 508 F.2d at 254; accord, New-berg, § 7992b (Requiring notice in “(b)(2) employment class actions would have the undesirable effect of inhibiting meritorious class litigation in the public interest.”).

In the instant action, the class has been certified as a (b)(2) class, and therefore, notice and the right to opt out are not mandatory. The group is a homogeneous one — made up of past and present female employees alleging discrimination by the defendant — and the class is adequately represented. See 103 F.R.D. 562 at 583 (1984). Therefore, the Court finds that there is no need for individualized notice with the right to opt out at this point in the litigation. Accordingly, the defendant’s request for such notice is denied.

Nevertheless, the defendant’s argument that “notice would serve a number of very valuable purposes” is persuasive. The plaintiffs suggest, and the Court agrees, that a general notice — without an opt out-provision — describing the pending action should be posted on bulletin boards at the defendant’s offices.

Although this type of notice may not reach all potential plaintiffs, particularly those who are no longer employed by the defendant, such notice is sufficient at this stage of the litigation. It will serve to apprise many of the potential class members of the issues involved in the litigation. See Marcera v. Chinlund, 91 F.R.D. 579, 585 (W.D.N.Y.1981). In addition, the defendant has expressed concern that the only information some employees have obtained about this case has been obtained through rumor or gossip. Posting notices will end unfounded speculation concerning the nature of the action. The notice will also facilitate the discovery process since individuals will be able to contact class counsel to determine whether they qualify as members of the class.

The defendant is directed to post a notice for 90 days on the public bulletin boards in all Sumitomo offices, and on all bulletin boards where legal notices or workers’ notices are ordinarily posted. The content of the notice should conform to the specifications set out in the margin. The defendant is ordered to provide the labor required to post the notices, and the plaintiffs are ordered to pay the cost of producing the notices.

II. Title VII Time Limitations

In certifying the various classes in this action, the Court held that the Title VII class in Avagliano “will consist of all past and present female employees of Sumitomo whose employment did not terminate more than 300 days prior to the first [date of filing a complaint with the Equal Employment Opportunity Commission (“EEOC”) ]. The Title VII class in Incherchera will consist of all past and present female employees of Sumitomo whose employment did not terminate more than 300 days prior to the date of filing.” 103 F.R.D. at 578. The question currently before the Court is a discreet one, namely, what dates constitute the first filing dates for the Title VII classes in the case at bar.

A. Avagliano

Both parties agree that in Avagliano Joanne Schneider (“Schneider”) was the first plaintiff to file a complaint with the EEOC, and that her complaint was filed on October 19, 1976. Thus, the Title VII class in Avagliano — Class I — includes all women employed by the defendant on or after December 24, 1975.

The defendant argues, however, that the October 19, 1976 filing date should apply only to the claim of sex discrimination and not to the claim of national origin discrimination. The defendant contends that a separate filing date must be applied to the national origin discrimination claim because the complaint that Schneider filed with the EEOC alleged only sex discrimination, and did not allege discrimination based on national origin.

The plaintiffs argue that Schneider’s EEOC complaint was subsequently amended to include a claim of national origin discrimination and that the amendment relates back to the original complaint. Therefore, the plaintiffs contend that October 19, 1976 constitutes the filing date for both claims. The Court agrees with the plaintiffs.

The Second Circuit has embraced a flexible approach in interpreting Title VII complaints filed with the EEOC. See Silver v. Mohasco Corp., 602 F.2d 1083, 1090 (2d Cir.1979), rev’d on other grounds, 447 U.S. 807, 100 S.Ct. 2486, 65 L.Ed. 532 (1980); Egelston v. State Univ. College, 535 F.2d 752, 755 (2d Cir.1976). See also Hicks v. ABT Assoc., Inc., 572 F.2d 960, 964-65 (3d Cir.1978); Jenkins v. Blue Cross Mutual Hospital Ins., Inc., 538 F.2d 164, 168 (7th Cir.), cert. denied, 429 U.S. 986, 97 S.Ct. 506, 50 L.Ed.2d 598 (1976). A complaint filed with the EEOC may be amended to “amplify allegations made therein [and to allege] additional acts which constitute unlawful practices related to or growing out of the source of the original charge.” 29 C.F.R. § 1601.12 (1984). Such amendments will relate back to the date the original complaint was filed with the EEOC. Id. See also Ostapowicz v. Johnson Bronze Co., 541 F.2d 394, 399 (3d Cir.1976) (“[Additional charges filed during the pendency of the administrative proceedings may fairly be considered explanations of the original charge and growing out of it.”).

In the case at bar, the EEOC was notified that the charges against the defendant included a national origin discrimination claim, and the EEOC had an opportunity to examine that allegation. Less than six months after Schneider filed her complaint, the EEOC received seven complaints from other Sumitomo employees, alleging sex discrimination and national origin discrimination on the part of the defendant. These complaints were filed while the EEOC investigation was still pending. Further, when these complaints were filed, the plaintiffs’ attorney sent a letter to the EEOC stating that these seven cases were companion cases to Schneider’s case, and that the charges pertained to the same employer.

Where the EEOC investigates a matter, considerable weight should be afforded to the construction that the EEOC gives to the complaint filed. See Macklin v. Spector Freight Systems, Inc., 478 F.2d 979, 988 (D.C.Cir.1973); accord Silver v. Mohasco, 602 F.2d at 1090 (“We look not merely to the four corners of the [complaint], but take into account the ‘scope of the EEOC investigation which can reasonably be expected to grow out of the charge of discrimination.’ ” (quoting Smith v. American Pres. Lines, Ltd., 571 F.2d 102, 107 n. 10 (2d Cir.1978)). In this instance, the EEOC consolidated the subsequent complaints filed against Sumitomo with Schneider’s complaint. Thus, the EEOC’s investigation encompassed not only Schneider’s original charge concerning sex discrimination, but also the charge concerning national origin discrimination. Because the claim of national origin discrimination was in fact considered by the EEOC, it is appropriate to treat it as part of the original complaint filed with the EEOC. See Obradovich v. Federal Reserve Bank, 569 F.Supp. 785, 789 (S.D.N.Y.1983); Kahn v. Pepsi Cola Bottling Group, 526 F.Supp. 1268, 1270 (E.D.N.Y.1981); Latino v. Rainbo Bakers, Inc., 358 F.Supp. 870, 872 (D.Col.1973).

The Court concludes that Schneider’s complaint was amended. This conclusion is based on (1) the complaints subsequently filed with the EEOC; (2) the attorney’s letter to the EEOC, and (3) the EEOC’s consolidation of the actions. Because the amendment relates back to the original complaint, October 19, 1976 constitutes the filing date for the entire class in Avagliano.

B. Incherchera

Incherchera’s complaint was filed with the EEOC on February 12, 1982. Accordingly, the Title VII class in Incherchera — Class II — includes women employed by the defendant 300 days prior to that date.

The defendant again argues that the plaintiffs’ claims must be limited to those charges actually specified in the complaint filed with the EEOC — in this instance, national origin and sex discrimination — and that the plaintiffs therefore cannot assert a claim of race discrimination. The Court rejects this argument.

As previously discussed, jurisdiction may be asserted over all claims which can reasonably be expected to evolve out of the specified charge of discrimination. See Silver v. Mohasco, 602 F.2d at 1090; Hicks v. ABT, 572 F.2d at 966; Ostapowicz v. Johnson, 541 F.2d at 399. In the instant case, the allegation of national origin discrimination could reasonably be expected to lead to a claim of racial discrimination. See Kahn v. Pepsi, 526 F.Supp. at 1270 (“[The] allegation in the complaint of race discrimination can be viewed as merely a refinement of the charge of national origin discrimination.”); Dickson v. Mortgage & Trust, Inc., 14 F.E.P. 334, 338 (S.D.Tex.1975) (Race and national origin discrimination “are identical in kind.”).

Essentially, Incherchera’s allegation of race discrimination does no more than clarify the previous allegations of unlawful employment practices. The race discrimination claim pertains to the policy and practice of the defendant identified in the original complaint.

The defendant cannot claim to be unfairly surprised by the allegation of race discrimination since that allegation is of the same type and character as the charge originally made in the EEOC proceeding. See Din v. Long Island Lighting, 463 F.Supp. 654, 660 (E.D.N.Y.1979); accord 6 Wright & Miller, § 1501 (Supp.1984) (“[A]s long as the original complaint provides defendant with adequate notice of the conduct ... upon which plaintiff bases his claim ... it is reasonable to assume that defendant has knowledge of any claim plaintiff might assert ... arising out of the event in dispute.”). Thus, expanding the scope of the litigation to include a claim of race discrimination does not prejudice the defendant, since the defendant had the opportunity to prepare a defense with respect to the challenged conduct. See Din v. Long Island Lighting, 463 F.Supp. at 660; Obradovich, 569 F.Supp. at 789.

For the reasons set forth above, the Court concludes that a claim of race discrimination may be asserted by the Title VII class in Inckerchera, and that February 12, 1982 constitutes the filing date for that class.

III. Section 1981: Time Limitations

The final issue to be resolved is the determination of what statute of limitations should apply to the Section 1981 class in Inckerchera. Congress has not specified a limitations period for Section 1981. The court must therefore refer to the law of the forum state — in this case New York’s law — to determine the applicable statute of limitations. See 42 U.S.C. § 1988 (1982); Stafford v. International Harvester Co., 668 F.2d 142, 151 (2d Cir.1981); Arneil v. Ramsey, 550 F.2d 774, 779-80 (2d Cir.1977).

The limitations period for a federal civil rights action is three years under New York law. See Pauk v. Board of Trustees of CUNY, 654 F.2d 856, 861 (2d Cir.1981), cert. denied, 455 U.S. 1000, 102 S.Ct. 1631, 71 L.Ed.2d 866 (1982); N.Y.Civ.Prac.Law and Rules (“CPLR”) § 214(2) (McKinney 1972). Where, as here, some plaintiffs are not residents of New York, the New York borrowing statute must also be considered in determining the applicable statute of limitations to be applied. See CPLR § 202. The borrowing statute provides:

An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.

The purpose of the borrowing statute is to protect resident defendants, and to discourage forum shopping. See Stafford, 668 F.2d at 151. The statute prevents plaintiffs from bringing an action in New York that would be time-barred in those states where the plaintiffs could otherwise have brought suit. See Sack v. Low, 478 F.2d 360, 365 (2d Cir.1973).

Two methods have developed for determining where a cause of action accrued for the purposes of the borrowing statute: (1) the traditional place-of-injury approach, and (2) the modern conflicts-of-law approach. The New York Court of Appeals has not yet definitively addressed the question of which approach it would adopt in determining where a cause of action accrued for the purposes of the borrowing statute.

Under the first method, the cause of action accrues where the injury physically takes place. If the injury is an economic one, then the place of injury is the place where the economic impact is felt. See Arneil, 550 F.2d at 779; Sack, 478 F.2d at 366; Bache Halsey Stuart, Inc. v. Namm, 446 F.Supp. 692, 696-97 (S.D.N.Y.1978). Under the conflicts-of-law, or center-of-gravity, approach, the “contacts” and “interests” of the various states involved are considered and weighed. The law of the state that has the greatest interest in the issue is applied. See State Teachers Retirement Bd. v. Fluor Corp., 500 F.Supp. 278, 288 (S.D.N.Y.1980), rev’d on other grounds, 654 F.2d 843 (2d Cir.1981); Haberman v. Tobin, 466 F.Supp. 447, 449-50 (S.D.N.Y.1979); Natural Resources Corp. v. Royal Resources Corp., 427 F.Supp. 880, 883-84 (S.D.N.Y.1977).

In the case at bar, the plaintiffs contend that the modem conflicts approach should be applied. The plaintiffs argue that under this analysis, the court would find that the cause of action had accrued in New York since the plaintiffs’ claims arise out of a centralized policy emanating from New York.

The Court agrees that the conflicts approach is the better one, since it provides a logical, rather than a mechanical, method for determining where the action accrued. See Haberman, 466 F.Supp. at 450; Natural Resources, 427 F.Supp. at 883-84. The conflicts approach is particularly attractive since it could result in a single limitations period being applied to the entire class, which would facilitate the litigation.

The Second Circuit, however, has indicated that absent a definitive ruling by the New York Court of Appeals, it is “most appropriate for a federal court ... to take a conservative position and apply the traditional place of injury test.” Stafford, 668 F.2d at 149. Accord Lang v. Paine, Webber, Jackson & Curtis, Inc., 582 F.Supp. 1421, 1425 (S.D.N.Y.1984) (“Although some lower courts ... have hypothesized that New York’s highest court would apply the ‘modern’ conflict of laws analysis to the borrowing statute, the Second Circuit ... has consistently held that it would not.” (citations omitted)); Maiden v. Biehl, 582 F.Supp. 1209, 1213 (S.D.N.Y.1984) (“[T]he Second Circuit has made it clear that choice of law principles based on grouping of contacts do not apply to borrowing statute analysis.” (citations omitted)); Freschi v. Grand Coal Venture; 551 F.Supp. 1220, 1225 (S.D.N.Y.1982) (“I consider myself required to apply the traditional ‘place of injury’ test to determine where the cause of action accrued.”).

Accordingly, the place-of-injury test will be applied in the case at bar. As previously indicated, if the injury claimed is an economic one, under this test, the cause of action accrues where the economic impact of the defendant’s conduct is felt. See Industrial Consultants, Inc. v. H.S. Equities, Inc., 646 F.2d 746, 747 (2d Cir.), cert. denied, 454 U.S. 838, 102 S.Ct. 145, 70 L.Ed.2d 120 (1981). In this case, the injury alleged by the plaintiffs is economic. The cause of action accrued, therefore, in the state where the individual plaintiff was employed by the defendant, since that is where the impact of the defendant’s alleged discrimination was felt.

In sum, the limitation periods applicable to the Section 1981 class in Incherchera is dictated by New York law. For plaintiffs who are New York residents, the statute of limitations is three years. For plaintiffs who are nonresidents, the statute of limitations is governed by the borrowing statute and the place-of-injury test. Therefore, the statute of limitations for non-residents is either the three year limitations period of New York, or the limitations period of the accrual state, whichever is shorter.

CONCLUSION

For the reasons set forth above, individualized notice with the right to opt out is not required. Instead, notices conforming to the Court’s instructions are to be posted on public bulletin boards in the defendant’s offices.

The filing date for the entire Title VII class in Avagliano is October 19, 1976. The filing date for the Incherchera Title VII class is February 12, 1982. These classes include past and present female employees of Sumitomo whose employment did not terminate more than 300 days prior to the respective filing dates.

In terms of the Incherchera Section 1981 class, the applicable limitations period is to be determined according to New York law. New York’s three year statute of limitations will be applied to class members working in New York. In the case of class members working outside of New York, either New York’s statute of limitations or the statute of limitations of the accrual state — the state of employment — will be applied, whichever is shorter.

So ordered. .

      . For a more detailed history of these actions, see 457 U.S. 176, 102 S.Ct. 2374, 72 L.Ed.2d 765 (1982), and 103 F.R.D. 562 (S.D.N.Y.1984).

      . See Order filed Mar. 28, 1983, 82 Civ. 4930 (CHT), 77 Civ. 5641 (CHT).

      . See 103 F.R.D. 562 (S.D.N.Y.1984). Class I is the Title VII class in Avagliano; Class II is the Title VII class in Incherchera; and Class III is the Section 1981 class in Incherchera.

      . The defendant argues that the class should be recertified as a Rule 23(b)(3) ("(b)(3)") class. The defendant offers no valid support for this argument, and the argument has no merit. Even if the class were recertified, however, notice and the right to opt out would not be mandatory. “[W]hen class actions are maintainable under both 23(b)(2) and 23(b)(3), ... the general policy is that these suits should be treated as (b)(2) class actions and mandatory notice avoided." Newburg, § 7992a; see Kyriazi v. Western Electric Co., 647 F.2d 388, 393-95 (3d Cir.1981); Wetzel v. Liberty Mutual, 508 F.2d at 252-53.

      . The defendant argues that "Incherchera’s Title VII and section 1981 claims may be hopelessly in conflict with those of various absent class members.” Defendant’s Memorandum of Law, at 50 n. 27. The defendant, however, has misconstrued Incherchera’s claims concerning race and national origin. Incherchera is asserting claims only on behalf of past and present female employees "who are not of Japanese national origin or Japanese racial background.” Plaintiffs Verified Complaint, at 3. Incherchera seeks relief from the defendant’s alleged discrimination based on common characteristics — race and national origin — which Incherchera shares with the class. Because the class is cohesive in this respect, the defendant’s argument fails.
      It should be noted, however, that under § 1981, Incherchera cannot assert claims concerning discrimination based on sex. Section 1981 does not embrace sex discrimination claims. See Payne v. Travenol Labs., Inc., 673 F.2d 798, 815 (5th Cir.), cert. denied, 459 U.S. 1038, 103 S.Ct. 451, 74 L.Ed.2d 605 (1982); Bobo v. ITT, Cont'l Baking Co., 662 F.2d 340, 342 (5th Cir.1981), cert. denied, 456 U.S. 933, 102 S.Ct. 1985, 72 L.Ed.2d 451 (1982).

      . Defendant’s Memorandum of Law, at 46. By contrast, the defendant’s argument that notice should not be given unless an opt-out provision is included is not persuasive.

      . Id.

      . The notice should consist of the language proposed by the plaintiffs, supplemented by the following. An additional paragraph should be included, giving the names of the attorneys representing the defendant or the name of someone who can be contacted if an individual wishes to communicate with the defendant concerning this litigation. Furthermore, the notice must state that class members may respond to the notice, but are not required to do so. The notice should make it clear that class members will not be excluded for failing to respond.

      . For a discussion of the law underlying the applicable limitations period in Title VII actions see 103 F.R.D. 577-78; see also 42 U.S.C. § 2000e-5(c), (e) (1982).

      . Schneider originally filed her complaint with the EEOC on October 8, 1976, and it was deferred to a state agency. The agency referred it back to the EEOC on October 19, 1976, which constitutes the filing date. In Mohasco Corp. v. Silver, 447 U.S. 807, 100 S.Ct. 2486, 65 L.Ed.2d 532 (1980), the Supreme Court held that in a deferral state such as New York, a complaint is deemed to be filed with the EEOC when (1) the state agency refers the complaint back to the EEOC, or

      (2) a period of sixty days has passed from the time the complaint was originally received by the EEOC. The filing date is based on the shorter of the two periods.

      . It is undisputed that Incherchera’s complaint was originally received by the EEOC on January 5, 1982. The record shows that on February 8, 1982 the EEOC deferred to the state agency, and on February 9, 1982 the agency referred the complaint back to the EEOC. The complaint was officially received by the EEOC on February 12, 1982.
      It appears that the defendant was not aware that the complaint was referred back to the EEOC, and consequently the defendant states that the date of filing was March 17, 1982 — sixty days after the complaint was first received by the EEOC. Since the complaint was referred back to the EEOC before the sixty day period ended, the date of filing is the earlier date — February 12, 1982. See Mohasco v. Silver, 447 U.S. at 820, 100 S.Ct. at 2494; see also supra note 10.

        . See supra note 5 for a discussion of this class.

      . See In Re “Agent Orange" Product Liability Litigation, 597 F.Supp. 740, 803 (E.D.N.Y.1984) (citing Burnet v. Grattan, — U.S.-, 104 S.Ct. 2924, 2930, 82 L.Ed.2d 36 (1984)) (The court noted that applying the statute of limitations of each plaintiff’s residence would make it almost impossible to administer the litigation).


author: BOWEN, District Judge.

text:
    Pamela Sue ENGLISH, Individually and as Personal Representative of the Estate of James Harold Burgess, Deceased, and Harold Benjamin Burgess, Individually and as Personal Representative of the Estate of James Harold Burgess, Deceased, Plaintiffs, v. 1ST AUGUSTA LTD., Natubhai Parbhubhai Patel, Arbindbhai Hirabhai Patel, and Bipinbhai Hirabhai Patel, Defendants.
    Civ. A. No. CV184-097.
    United States District Court, S.D. Georgia, Statesboro Division.
    July 10, 1985.

      Austin E. Catts, Robert H. Benfield, Jr., Atlanta, Ga., William R. McCracken, Augusta, Ga., for plaintiffs.
    Ted H. Clarkson, Patricia Warren Booker of Knox & Zacks, P.C., Augusta, Ga., for defendants.
   MEMORANDUM OPINION AND ORDER

BOWEN, District Judge.

Before the Court is the defendants’ motion for summary judgment. Defendants own and operate the Oasis Motor Hotel located in Augusta, Georgia. Plaintiffs have brought this action seeking to hold the defendants legally responsible for the death of plaintiffs’ three-year-old son. The child drowned in the swimming pool at the Oasis while visiting his father who was staying at the hotel. Plaintiffs seek to recover damages for their son’s funeral expenses and for his pain and suffering. They also seek to recover damages for the loss of services of their minor child and for the full value of his life. Additionally, plaintiffs seek punitive damages.

Jurisdiction is based upon diversity of citizenship and is not disputed.

The complaint states twelve specific allegations of negligence. In summary, plaintiffs allege that defendants negligently maintained the pool. As defendants concede, the allegations of negligence are taken as true for purposes of considering the motion for summary judgment. Defendants argue that they are entitled to summary judgment, however, because the plaintiffs were aware of the pool’s defects. According to defendants, “the plaintiffs were aware of the alleged conditions of the premises which they now contend were dangerous, yet the plaintiffs failed to prevent the child from being in a position where he could enter the pool area alone, which failure led to the tragic drowning.” (Defendants’ Brief in Support of Motion for Summary Judgment at 2.) In other words, the defendants’ “summary judgment motion is premised on the failure of the parents to properly supervise and care for their child as required by Georgia law.” (Id. at 7)

Whether or not plaintiffs and defendants were negligent as a matter of fact or law is a matter of dispute. What is clear is that the child was not negligent as a matter of law. A child of three years of age is conclusively presumed to be incapable of contributory negligence. Further, any negligence on the part of the parents is not imputable to the child. See, e.g., Hyde v. Bryant, 114 Ga.App. 535, 537, 151 S.E.2d 925, 926 (1966). See also Ga.Code Ann. § 51-2-l(b) (1982) (“In an action by an infant, the fault of the parent or of custodians selected by the parents is not imputable to the child.”) Therefore, if plaintiffs are barred from recovery, they are barred by their own negligence or assumption of the risk.

Defendants have argued that the plaintiffs were aware of the alleged defective condition in which the pool was maintained. A review of the transcripts of the deposition testimony of the plaintiffs reveals that they were aware, prior to the death of their child, of the conditions at the Oasis Motel which they now contend were unreasonably dangerous. Defendants insist that they are not relying upon a theory of contributory negligence. Rather, defendants argue that the “equal knowledge” of the pool’s defects requires judgment for the defendants as a matter of law.

Knowledge alone, however, will not bar plaintiffs’ recovery. The plaintiffs must have been aware of the danger inherent in the conditions surrounding the pool and not merely aware of the existence of the conditions. Robinson v. Western International Hotels, 170 Ga.App. 812, 814, 318 S.E.2d 235, 237 (1984). Further, although the knowledge a party possesses is an element to consider when determining whether the party was negligent or assumed the risk of injury, that consideration is in most instances for a jury. This Court is unwilling to declare as a matter of law that the plaintiffs’ negligence, if any, was the “proximate cause” of the child’s death or that the plaintiffs assumed the risk of their child’s death. Keating v. Jones Development of Missouri, Inc., 398 F.2d 1011 (5th Cir.1968); Gregory v. Johnson, 249 Ga. 151, 155, 289 S.E.2d 232, 235 (1982); Robinson, 170 Ga.App. at 813, 318 S.E.2d at 237; Housing Authority of Atlanta v. Famble, 170 Ga.App. 509, 511, 317 S.E.2d 853, 857 (1984); Ward v. City of Millen, 162 Ga.App. 148, 150, 290 S.E.2d 342, 344 (1982); Colonial Stores, Inc. v. Donovan, 115 Ga.App. 330, 331-32, 154 S.E.2d 659, 661 (1967); Knowles v. Larue, 102 Ga.App. 350, 116 S.E.2d 248 (1960); Butler v. Sports Haven International, 563 P.2d 1245 (Utah S.Ct. 1977); Kandrach v. Chrisman, 63 Tenn.App. 393, 473 S.W.2d 193, 198 (1971); Lynch v. Motel Enterprises, Inc., 248 S.C. 490, 151 S.E.2d 435, 437 (1966). “Even when evidence in a case is not in conflict, the determination of negligence is ordinarily within the province of the trier of fact because of the peculiarly elusive nature of negligence and the necessity that the trier of fact assess the reasonableness of the conduct under all the circumstances.” Decker v. Gibson Products Co. of Albany, Inc., 679 F.2d 212, 216 (11th Cir.1982).

When Georgia courts have concluded that a plaintiff, who as a licensee or invitee was injured while on defendant’s land, cannot recover from the defendant as a matter of law because the plaintiff knew of the condition or hazard that resulted in his injury, the courts have generally deemed the plaintiff’s actions in the light of his knowledge as an assumption of the risk. See, e.g., Pound v. Augusta National, Inc., 158 Ga.App. 166, 168, 279 S.E.2d 342, 344-45 (1981). Defendants, however, rest their defense on the assertion that plaintiff parents failed to supervise and care properly for their child. Such a defense sounds more in negligence than assumption of risk. Of course, “the defenses of assumption of risk and contributory negligence overlap, and are as intersecting circles, with a considerable area in common, where neither excludes the possibility of the other.” W. Prosser, Handbook of the Law of Torts 441 (4th ed. 1971). Whether defendants choose to base their defense upon a theory that plaintiffs’ negligence caused the death of plaintiffs’ child or upon the theory that plaintiffs assumed the risk of the death of their child or both theories, this Court reiterates its inability to grant summary judgment for the defendants.

The question of parental negligence is for the jury to determine. “It is normally the duty of parents, by their presence or training, to keep young children from going into places of obvious danger.” Augusta Amusements, Inc. v. Powell, 93 Ga. App. 752, 755, 92 S.E.2d 720, 724 (1956).

Parents owe a duty to care for their children who are so young and immature that they cannot care for themselves, and in so doing are bound to exercise such degree of care and prudence to promote their safety as, under all the circumstances, is reasonable and proportionate to the age and intelligence of the children, and to the known dangers, or dangers which might be known by the exercise of due care. In other words, parents are required to exercise that degree of care that a reasonably prudent person would exercise under the same conditions, and it must appear that the parent had some knowledge that the child was frequenting a dangerous area, and failed to warn the child or take other adequate precautions.

57 Am.Jur.2d Negligence § 377 (1971). “[T]he true test of parental negligence vel non is whether in the exercise of ordinary care he should have anticipated that harm would result from the unsupervised activities of the child and whether, if so, he exercised the proper degree of care to guard against this result.” Hill v. Morrison, 160 Ga.App. 151, 286 S.E.2d 467 (1981). “However, parents are not required to do the impossible in earing for their children. They are not required to watch them every minute.” 57 Am.Jur.2d Negligence § 377 (1971). Courts are reluctant to hold as a matter of law that parents are negligent in not keeping constant and unremitting watch and restraint over their children. Atlanta & Charlotte Air-Line Railway v. Gravitt, 93 Ga. 369, 375, 20 S.E. 550, 552 (1893).

Plaintiffs rely heavily upon the case of Gregory v. Johnson, 249 Ga. 151, 289 S.E.2d 232 (1982). “The Gregorys brought a wrongful death action to recover for the death by drowning of their two-year-old child in a swimming pool owned by the Johnsons.” Id. The deceased child was a trespasser. The Supreme Court reversed the grant of summary judgment and adopted the five-part test of Restatement (Second) of Torts, § 339 (1965).

A possessor of land is subject to liability for physical harm to children trespassing thereon caused by an artificial condition upon the land if
(a) the place where the condition exists is one upon which the possessor knows or has reason to know that children are likely to trespass, and
(b) the condition is one of which the possessor knows or has reason to know and which he realizes or should realize will involve an unreasonable risk of death or serious bodily harm to such children, and
(c) the children because of their youth do not discover the condition or realize the risk involved in intermeddling with it or in coming within the area made dangerous by it, and
(d) the utility to the possessor of maintaining the condition and the burden of eliminating the danger are slight as compared with the risk to the children involved, and
(e) the possessor fails to exercise reasonable care to eliminate the danger or otherwise to protect the children.

Gregory, 249 Ga. at 154, 289 S.E.2d at 234. The Court concluded that the issues of negligence of the parties was for the jury to decide.

Defendants rely upon the case of Wren v. Harrison, 165 Ga.App. 847, 303 S.E.2d 67 (1983). The case arose from the drowning death of a three-year-old child in a lake. Defendant, who was the child’s uncle and whose home was located on the shore of the lake, had built and maintained a boat dock into the lake but apparently did not own the lake. The Court of Appeals distinguished the Gregory decision stating “that the attractive nuisance theory of recovery does not apply to natural ponds or water hazards, which distinguishes this case from those involving unfenced swimming pools located in areas where uninvited children are known to play.” Id., 165 Ga.App. at 848, 303 S.E.2d at 69. The appellate court held that it was error for the trial court to deny the defendant’s motion for summary judgment, reasoning that the child was a licensee, his parents knew of the conditions of the dock which had no handrails, and that “[sjince the duty of providing a safe playground for a child rests upon his parents, any breach of that duty must be imputed” to the child’s parents who brought the action rather than to the defendant. Id., 165 Ga.App. at 849, 303 S.E.2d at 70.

Presiding Judge Deen, joined by Presiding Judge Quillian, Presiding Judge McMurray and Judge Pope, filed a forceful dissent:

While the majority may correctly survey the historical duty of care imposed upon a landowner as to a licensee, I believe it ignores the recent trend of the law to date culminating in Gregory v. Johnson, 249 Ga. 151 (289 SE2d 232) (1982) overruling Gregory v. Johnson, 159 Ga.App. 320 (283 SE2d 357) (1981). My personal observations in the special concurrence therein did not prevail. The Supreme Court in Gregory followed Section 339 of the Restatement (Second) of Torts and imposed a duty on the landowner to exercise reasonable care to prevent foreseeable injury to trespassing children. Questions of any breach of that duty and any contributory negligence of the parents were designated for jury resolution. The anomalous effect of the majority’s decision here is to impose a lesser duty of care as to a social guest/licensee than the duty owed to a mere trespasser.
“While section 339 is phrased in terms of trespassing children, it is not limited to them. The same principles apply if the child is a licensee or invitee. It would be irrational to impose a higher duty on landowners when the child is a trespasser than when he is a licensee or invitee. Section 343B of the Restatement states that, ‘(i)n any case where a possessor of land would be subject to liability to a child for physical harm caused by a condition on the land if the child were a trespasser, the possessor is subject to liability if the child is a licensee or an invitee.’ While there may be a greater duty owed to licensees or invitees than to trespassers, this section makes it clear that they are entitled to at least as much protection as trespassers.” 34 Mer.L.Rev. 433, 446 (1982). (Emphasis supplied.)
The fact that the doctrine of attractive nuisance was at play in Gregory does not render the case inapposite here; its import is its pronounced consideration of foreseeability and traditional negligence concepts in analyzing a landowner’s duty of care. I note further that both the Supreme Court and this court actually have previously applied such considerations in determining the duty of care to licensees. “ ‘A possessor of land is subject to liability for physical harm caused to licensees by a condition on the land if, but only if, (a) the possessor knows or has reason to know of the condition and should realize ... the danger, and (b) he fails to exercise reasonable care to make the condition safe, or to warn the licensees of the condition and the risk involved, and (c) the licensees do not know or have reason to know of the condition and the risk involved.’ ” Patterson v. Thomas, 118 Ga.App. 326, 328 (163 S.E.2d 331) (1968). The Supreme Court expressly adopted this view in London Iron & Metal Co. v. Abney, 245 Ga. 759 (267 SE2d 214) (1980).
I believe that factual questions existed for jury resolution, regarding the elements of knowledge of the condition and any foreseeable risks created by the condition (as well as any contributory negligence of the parents), and that the trial court properly denied the appellant’s motion for summary judgment. I respectfully dissent.

Id., 165 Ga.App. at 850-51, 303 S.E.2d at 71.

To the extent that the different results reached in the Gregory and Wren cases depended upon the statuses of the children as trespassers or licensees, the Georgia Court of Appeals decision in the case of Housing Authority of Atlanta v. Famble, 170 Ga.App. 509, 317 S.E.2d 853 (1984) erases any such distinction. The appeal arose out of the deaths of two sisters, ages seven and eight, who drowned in an overflowing storm sewer located to the rear of the housing complex where they lived with their mother. On the day the girls died, their mother was away at work. She had left her children in the care of another daughter, age ten, and had asked a next-door neighbor to “ ‘check’ ” on the children.

The appellate court decided that the children were either licensees or trespassers but that the distinction was of no consequence. Presiding Judge Quillian wrote, “Formerly, being a child was not a factor for consideration in determining one’s status as invitee, licensee or trespasser ..., but the blurred distinction between a child’s status as a licensee or trespasser has been virtually obliterated by our Supreme Court's adoption of the Second Restatement of Torts, § 339 (1965)____ Gregory v. Johnson, 249 Ga. 151, 154 (289 S.E.2d 232). Because these conditions are applicable to a child trespasser, certainly a child licensee would be subjected to no stricter standard.” Id., 170 Ga.App. at 526-27, 317 S.E.2d at 868.

In the case presently before the Court, the plaintiffs insist that the child was an invitee while the defendants are adamant that the child was a licensee. In light of the Famble decision, I am not certain the distinction is important. After Famble, the five-part test of Gregory and the Restatement clearly applies to children who are licensees. Certainly a child invitee is owed at least as much protection as that owed a licensee. “The system of rigid categories of trespasser, licensee or invitee, into one of which the plaintiff must be forced to fit, has disturbed some judges, particularly since there are cases which are difficult to dispose of under any of the three specifications.” W. Prosser, at 398.

The Court will not, at least at this stage of the case, determine as a matter of law the status of the deceased child. If, however, the hotel did in fact encourage adults to stay at the hotel by allowing their children to stay for free, then it would seem that the child was an invitee. See Anderson v. Cooper, 214 Ga. 164, 169, 104 S.E.2d 90, 94 (1958). The case of Ricks v. Boatwright, 95 Ga.App. 267, 97 S.E.2d 635 (1957) is distinguishable on its facts. The child in the present case was with his father, not a baby-sitter. “The courts have usually recognized that persons upon the premises of the inn in response to an invitation, either express or implied, for the purpose of visiting or calling upon registered guests at proper times, for lawful purposes, and who remain within the boundaries of their invitation are, or are to be treated as invitees____” Annot. 58 A.L. R.2d 1201, 1203 (1958). Also lending support to a conclusion that the child was an invitee or was to be treated as one is the Georgia “rule that members of a tenant’s family, his guests, servants, employees, or others present at his express or implied invitation, stand in his shoes and are controlled by the rules governing the tenant as to the right of recovery for injuries arising from failure to keep the premises in repair.” See, e.g., Carter v. Brannon, 122 Ga.App. 812, 178 S.E.2d 755 (1970).

The case of Northwestern Mutual Life Insurance Co. v. McGivern, 132 Ga.App. 297, 208 S.E.2d 258 (1974) lends further support to the Court’s denial of the motion for summary judgment. The case arose out of the death of a twelve-year-old boy who drowned in an apartment complex pool. The boy’s parents were seated in chairs in the vicinity of the pool at the time of the drowning. The plaintiff parents alleged that defendant had violated the requirements of a Dekalb County ordinance enumerating safety requirements for swimming pools. The appellate court found no error in the trial court’s denial of defendant’s motion for summary judgment. In the present case, the plaintiffs have similarly alleged that defendants violated safety ordinances adopted by the Board of Health of Richmond County. The ordinances are presumed valid. But see Vinson v. Home Builders Association of Atlanta, 233 Ga. 948, 213 S.E.2d 890 (1975) (where the court ruled that the Dekalb County Board of Health exceeded its authority in enacting swimming pool regulations.) If defendants violated a valid ordinance, its violation would constitute negligence per se. The question of “proximate cause” would still be for the jury to decide. McGivern, 132 Ga.App. at 301, 208 S.E.2d at 262.

The Court reserves ruling on the- question of whether the father’s negligence, if any, is imputable to the mother, but questions the validity of such an assertion in this case. The parents were divorced. The father had visitation rights. The mother was obligated to cooperate and allow the father his visitation rights. Nothing in the present record indicates that the mother had any reason to doubt the father’s fitness as a parent.

The Court has discussed some of the issues of this case perhaps at greater length than necessary to reach its ruling on the summary judgment motion. The discussion is meant to provide some guidance to counsel in the preparation of this case for trial. In conclusion, the Court DENIES defendants’ motion for summary judgment.