Jeffries et al v. Swank
Filing
33
MEMORANDUM Opinion and Order. Signed by the Honorable Ruben Castillo on 9/30/2016. Mailed notice. (pk,)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
VIRGINIA JEFFRIES, et al.
Plaintiffs,
v.
HAROLD O. SWANK,
Defendant.
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No. 70 C 3196
Chief Judge Rubén Castillo
MEMORANDUM OPINION AND ORDER
Mark Hyzy (“Hyzy”), proceeding pro se, brings this motion to intervene in this case
pursuant to Federal Rule of Civil Procedure 24, seeking enforcement of a permanent injunction
in this case and recovery of penalty payments that he alleges the Illinois Department of Human
Services (“the Department”) owes to him. (R. 4, Mot. to Intervene.) In its response to the motion
to intervene, the Department includes a motion to dismiss several counts of Hyzy’s proposed
complaint under Federal Rule of Civil Procedure 12(b)(6). For the reasons stated below, Hyzy’s
motion is granted and the Department’s motion to dismiss is granted in part and denied in part.
RELEVANT FACTS
This case began more than 45 years ago, when Virginia Jeffries filed an action under 42
U.S.C. § 1983, on behalf of a class seeking declaratory and injunctive relief. Jeffries v. Swank,
337 F. Supp. 1062, 1064 (N.D. Ill. 1971). The class consisted of recipients and applicants for
public assistance under the Social Security Act who had not received final decisions on
administrative hearings by the Illinois Department of Public Aid within 60 days of their request
for a hearing. 1 Id. In 1972, the district judge entered an order requiring the Department to take
administrative action within those 60 days unless the applicant had requested a delay in the
hearing. (R. 5, Hyzy’s Mem., Ex. B.) Two years later, the court modified the order to allow the
Department 90 days to take action, following a change in the Social Security Act. (Id., Ex. C.) In
1975, the court required the Department to issue a $100 payment to any applicant if the 90-day
deadline was not met, as well as an additional $100 payment for each additional 30 days that
elapsed after the 90-day deadline. (Id., Ex. D.) The Department was required to submit monthly
reports detailing how many applicants were not receiving administrative decisions within 90
days and the total delays in their cases, a practice which continued until 1984. (Id., Ex. B; id. Ex.
C.) From 1984 until Hyzy filed his motion to intervene, there were no filings or proceedings in
this long-settled case. 2 (R. 1, Docket.)
Hyzy was hospitalized for an illness in September 2013 and was later sent to a nursing
home in October 2013. (R. 22, Compl. in Intervention ¶ 6.) After being discharged, Hyzy fell at
home and was again sent to a hospital and nursing home. (Id.) At this time, Hyzy had neither
health insurance nor any income. (Id. ¶ 7.) Over a period of about 16 months, Hyzy filed five
applications for Medicaid benefits. (See id.) His first two applications were granted, although
issues later arose leading Hyzy to appeal them. (R. 5, Hyzy’s Mem. at 2.) His other three
applications were initially denied. (R. 22, Compl. in Intervention at 4, t.1.)
Hyzy requested appeals in each of these five applications. (Id. ¶ 8.) The hearings for his
first four applications were consolidated and held by telephone on May 19, 2015, while the fifth
1
The Illinois Department of Human Services is the successor agency to the Illinois Department of Public
Aid. (R. 16, Def.’s Resp. at 1 n.1.) For simplicity’s sake, the Court will treat these two agencies as the
same party and refer to both as “the Department.”
2
The record does not reflect why the Department stopped filing reports in 1984 or why the original
plaintiffs did not challenge this cessation. However, none of the orders in this case’s history placed an
expiration date of any sort on the 1972 permanent injunction or closed or dismissed the case.
2
hearing was held on October 20, 2015. (Id. at 5, t.2; R. 5, Hyzy’s Mem. at 2-3.) The period of
delay between Hyzy filing these appeals and the dates of the hearings ranged between 138 and
363 days. (R. 22, Compl. in Intervention at 5, t.2.) The precise events of the May 19 hearings are
unclear based on Hyzy’s account, but he alleges that he was sworn in, gave testimony, and
prevailed on one of his claims. (Id. ¶ 13.) For reasons not reflected in the present record, Hyzy
allegedly withdrew his appeals during these hearings. 3 (R. 22, Compl. in Intervention ¶ 13; R.
16-2 ¶ 2.) After he withdrew his appeals, the Department refused to pay him any penalty
payments for the delays preceding the hearings. (R. 22, Compl. in Intervention ¶ 13.) The fifth
appeal was decided in Hyzy’s favor, and the Department issued a $200 penalty payment to him
on January 28, 2016. (R. 16-2 at 9-10; R. 16-3 at 2.) Although the delay between Hyzy filing his
appeal and the final administrative decision totaled 209 days, the Department alleges that 81
days of this time resulted from Hyzy’s own request for an extension. (R. 16-2 at 3.)
Hyzy filed his motion to intervene on September 3, 2015. (R. 4, Mot. to Intervene.) In
March 2016, the Department filed a response opposing Hyzy’s motion. (R. 16, Def.’s Resp.) The
Department argued that Hyzy’s claims were moot, as he voluntarily withdrew his first four
appeals and was allegedly paid appropriately for the delay of his fifth appeal. (Id. at 3-5.)
Further, the Department argued that Hyzy’s motion to intervene should be denied as he had not
provided a pleading to support his motion in accordance with Federal Rule of Civil Procedure
24(c). (Id. at 5-6.) In his reply, Hyzy argued that the Department was required to pay him for
hearing delays even if he later withdrew those appeals, and thus withdrawing the appeals did not
3
The Court is puzzled by Hyzy’s claim that he both prevailed on one of the four May 19 appeals and yet
also withdrew all four during the hearing. Hyzy states that this successful claim was confirmed in a notice
approving Medicaid coverage dated September 15, 2015. (Id. ¶ 15 n.3.) He has not included this notice
with any of his filings, however, and the Department claims that it issued a notice of withdrawal that
served as the final administrative decision in this appeal. (R 16-2 at 7.) While this factual peculiarity
could become relevant at a later stage in this litigation, the Court need not settle this issue for purposes of
ruling on the present motion.
3
moot his case. (R. 17, Hyzy’s Reply at 3.) He also contested whether he had been paid enough
for the delay on his fifth appeal. (Id. at 4-5.) Hyzy acknowledged his failure to provide a Rule
24(c) pleading, but requested that the Court allow him to cure his inadvertent and good-faith
error. (Id. at 6-7.)
On April 1, 2016, the Jeffries class (“the Class”) filed its response to Hyzy’s motion to
intervene through its original counsel. (R., Original Pls.’ Reply 18.) The Class argued that the
Department’s response suggested an incorrect reading of the orders in the underlying Jeffries
litigation. (Id. at 4.) Under the Class’s interpretation, the Jeffries permanent injunction requires
that the $100 penalty payment is due as soon as the Department has gone beyond the 90-day time
limit, regardless of whether the appeal is withdrawn. (Id. at 5.) The Class raised concerns that the
Department may be encouraging applicants to withdraw their appeals without informing them of
the Department’s policy. (Id.) The Class requested that this Court enter and continue Hyzy’s
motion and require the Department to submit a report detailing those cases in which appeals
were not decided within 90 days, those cases in which appeals were withdrawn after the 90-day
period, and those cases in which the penalty payments were issued in accordance with the
Jeffries permanent injunction. (Id. at 5-6.)
On May 26, 2016, this Court issued an order granting Hyzy leave to file a Rule 24(c)
pleading setting forth any claims on which Hyzy seeks to proceed. (R. 21, Order at 1-2.) The
Court also required the Department and the Class to respond, including information regarding the
Department’s current policies governing hearing delays. (Id. at 2.)
Hyzy, still proceeding pro se, filed his proposed pleading on June 16, 2016. (R. 22,
Compl. in Intervention.) Although it is at times unclear, Hyzy’s proposed complaint seeks relief
on several grounds. First, Hyzy seeks relief under 42 U.S.C. § 1983, alleging that the
4
Department’s failure to hold his hearings within 90 days infringed his due process and equal
protection rights, as well as the Supremacy Clause of the U.S. Constitution and the Social
Security Act and its relevant regulations. (Id. ¶¶ 20-33.) He also brings several claims based on
the Department’s alleged violations of the Jeffries orders by failing to hold his hearings within
90 days, failing to implement a favorable decision within 90 days, failing to pay him the penalty
payments for those delays, and improperly calculating the delay in his fifth appeal. (Id. ¶¶ 4581.)
The Department’s response, filed July 29, 2016, argues that most of Hyzy’s claims are
unavailing and that any remaining claims do not entitle him to intervene in the present case. (R.
26, Def.’s Suppl. Resp.) First, the Department argues that Counts 2 and 3 of the proposed
complaint, which assert claims based upon “the Applicant’s rights under the Supremacy Clause,”
(R. 22, Compl. in Intervention ¶¶ 33, 38), fail because the Supremacy Clause does not grant any
individual rights, (R. 26, Def.’s Suppl. Resp. at 2). Second, the Department claims that all counts
based on alleged violations of the Jeffries orders will be mooted by the Department’s voluntary
payment to Hyzy of the amount that he calculates is due to him. (Id. at 2-4.) The Department is
careful to clarify that this offer to compensate Hyzy is not an admission that he is entitled to
these payments, but it asserts that its offer to make the requested payments removes any personal
stake that Hyzy has in the litigation. (Id. at 4.) Third, the Department argues that Hyzy has no
basis to intervene in the present case because he does not seek to change the underlying Jeffries
orders and the Department’s offer to pay moots his individual claims. (Id. at 5-7.) The
Department’s response also describes the application process for benefits covered by the Jeffries
orders, noting in particular that:
The Department has and continues to pay appellants under the Jeffries
Orders where appropriate. The Department pays an appellant where there is a
5
payable Final Administrative Decision issued. The Department considers a
payable Final Administrative Decision to be one where a Hearing Officer
conducts and completes a hearing concerning an assistance appeal, and writes a
recommended decision which is subsequently adopted by the Secretary of DHS.
A case which is [disposed] of in any other manner (for instance, a withdrawal by
the appellant), is not considered by the Department to be subject to a Jeffries
payment.
(Id. at 11.) The Department also notes that there is not “a separate enforcement mechanism that
an appellant may use to contest Jeffries payments,” though “an appellant may pursue judicial
review of any Final Administrative Decision through the Circuit Courts” of Illinois. (Id. at 12.)
Hyzy filed a reply responding to these arguments on August 10, 2016. (R. 28, Hyzy’s
Reply.) Hyzy’s reply to the Supremacy Clause argument is unclear, but appears to follow two
principle lines of argument. First, he seems to argue that because the Department acted “under
color of state law” in failing to hold his hearings on time, its actions violate the Supremacy
Clause by failing to comport with the Social Security Act’s 90-day requirement. (Id. at 2.)
Second, he argues that the district court already decided that failing to hold hearings violated the
Supremacy Clause in the original Jeffries litigation, and thus issue preclusion bars its relitigation.
(Id. at 2-3 (citing Jeffries, 337 F. Supp. at 1065).) Regarding the Department’s argument that his
claims are moot, Hyzy replies that he has rejected its settlement offer and no further negotiations
are underway. (Id. at 3.) He notes that the U.S. Supreme Court held in Campbell-Ewald Co. v.
Gomez, 136 S. Ct. 663 (2016), that a rejected settlement offer does not moot a plaintiff’s case,
and he further observes that the Department’s settlement offer understates his requested actual
damages and ignores his requested compensatory and punitive damages. (Id. at 3-4.) Finally, he
contends that intervention is appropriate because he intends to enforce the Jeffries orders as a
third-party beneficiary and seek the appropriate compensation under the orders and through his
other causes of action based on the same body of law. (Id. at 7-9.)
6
The Class filed a response on August 16, 2016, in which it supports Hyzy’s intervention
in the case. (R. 30, Original Pls.’ Suppl. Resp. at 3.) Even if Hyzy’s claims were found to be
moot or his motion to intervene were denied, the Class argues that it would retain an interest in
ensuring that the Department continues to comply with the Jeffries orders. (Id.) Accordingly, the
Class asks this Court to determine whether the Jeffries permanent injunction allows the
Department to avoid paying the $100 per month penalty if applicants withdraw their appeals and,
if so, what notice must be given to the applicants to ensure that the withdrawal is knowing and
voluntary. (Id. at 4.) The Class argues that the permanent injunction requires that the payment is
due as soon as the Department has exceeded the 90-day time limit and that, even if the
Department’s interpretation prevails, applicants must receive written notice of their rights under
Jeffries and of the consequences of withdrawal. (Id. at 5, 7-8.)
LEGAL STANDARD
Rule 24 provides two possible paths for intervention, intervention of right and permissive
intervention, that may be pursued by a timely motion. FED. R. CIV. P. 24. “The timeliness
requirement forces interested non-parties to seek to intervene promptly so as not to upset the
progress made toward resolving a dispute.” Grochocinski v. Mayer Brown Rowe & Maw, LLP,
719 F.3d 785, 797 (7th Cir. 2013). Courts should consider four factors to determine whether a
motion is timely: “(1) the length of time the intervenor knew or should have known of his
interest in the case; (2) the prejudice caused to the original parties by the delay; (3) the prejudice
to the intervenor if the motion is denied; (4) any other unusual circumstances.” Id. at 797-98
(citation omitted). The determination whether a motion is timely is “committed to the sound
discretion of the district judge” and “is made under the totality of the circumstances.” South v.
Rowe, 759 F.2d 610, 612 (7th Cir. 1985).
7
Under Rule 24(a)(2), a court must allow intervention of right to any movant who “claims
an interest relating to the property or transaction that is the subject of the action, and is so
situated that disposing of the action may as a practical matter impair or impede the movant’s
ability to protect its interest, unless existing parties adequately represent that interest.” FED. R.
CIV. P. 24(a)(2). Under Rule 24(b), a court may, in its discretion, allow a movant to intervene if
he “has a claim or defense that shares with the main action a common question of law or fact” if
it will not “unduly delay or prejudice the adjudication of the original parties’ rights.” FED. R.
CIV. P. 24(b). The Court must bear in mind that because Hyzy is proceeding pro se, his filings
are entitled to liberal construction. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
ANALYSIS
I.
Motion to Dismiss
In addition to opposing Hyzy’s motion to intervene, the Department also challenges
several of the counts of his proposed pleading. The Department argues that Counts 5-8 are moot
and that Counts 2 and 3, seeking relief under 42 U.S.C. § 1983 for violations of the Supremacy
Clause, are facially deficient. (R. 26, Def.’s Suppl. Resp. at 2-4.)
“A motion to dismiss pursuant to Rule 12(b)(6) challenges the viability of a complaint by
arguing that it fails to state a claim upon which relief may be granted.” Firestone Fin. Corp. v.
Meyer, 796 F.3d 822, 825 (7th Cir. 2015) (alterations and citation omitted). To survive a motion
to dismiss, “a complaint must contain sufficient factual matter . . . ‘to state a claim to relief that
is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. Under this standard, the Court must accept the factual
8
allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff.
Kubiak v. City of Chi., 810 F.3d 476, 480-81 (7th Cir. 2016). However, the Court “need not
accept as true any legal assertions or recital of the elements of a cause of action supported by
mere conclusory statements.” Vesely v. Armslist LLC, 762 F.3d 661, 664-65 (7th Cir.
2014) (citation and internal quotation marks omitted).
In deciding a Rule 12(b)(6) motion, the Court may consider the complaint itself, as well
as “documents that are attached to the complaint, documents that are central to the complaint and
are referred to in it, and information that is properly subject to judicial notice.” Williamson v.
Curran, 714 F.3d 432, 436 (7th Cir. 2013) (citation omitted). Courts may take judicial notice of
public court records without converting the motion to dismiss into a motion for summary
judgment. See White v. Keely, 814 F.3d 883, 885 n.2 (7th Cir. 2016).
A.
Mootness
In its supplemental response, the Department states that “[w]hile the Department believes
that a contest exists with respect to this matter, it has decided to voluntarily remit payment to
Hyzy in the amount of $3,200, which Hyzy has calculated in his Complaint as the remaining
amount allegedly owing to him.” (R. 26, Def.’s Suppl. Resp. at 4.) It argues that because the
Jeffries orders fix the amount allegedly owed to him, its payment of this sum “either moots, or
alternatively, removes the controversy from Hyzy’s suit, at least with respect to the counts
founded on Jeffries.” (Id.) Hyzy responds that he has already rejected this settlement offer, and
that under Gomez, rejected settlement offers do not moot a plaintiff’s case. (R. 28, Hyzy’s Reply
at 3.) Hyzy also disputes both the Department’s calculation of the amount he is still allegedly
owed under the Jeffries orders and the Department’s failure to substantively address his claims
for compensatory and punitive damages. (R. 28, Hyzy’s Reply at 4.)
9
Based on the record before this Court at this time, Hyzy’s Counts 5-8 are not moot under
Gomez. In relevant part, the U.S. Supreme Court held in Gomez that “an unaccepted settlement
offer or offer of judgment does not moot a plaintiff’s case.” Gomez, 136 S. Ct. at 672. Following
“basic principles of contract law,” the Supreme Court found that even a settlement offer for full
statutory damages, “once rejected, ha[s] no continuing efficacy” because the plaintiff “gained no
entitlement to the relief [the defendant] previously offered.” Id. at 671. “In short, with no
settlement offer still operative, the parties remain[] adverse; both retain[] the same stake in the
litigation they had at the outset.” Id. at 670-71. The Supreme Court explicitly reserved judgment
on “whether the result would be different if a defendant deposits the full amount of the plaintiff’s
individual claim in an account payable to the plaintiff, and the court then enters judgment for the
plaintiff in that amount.” Id. at 672. Several courts have already found that such action does
moot claims for damages. See, e.g., Gray v. Kern, 143 F. Supp. 3d 363, 367 (D. Md. 2016) (“[A]
measure which makes absolutely clear that the defendant will pay the complete relief the plaintiff
can recover and that the plaintiff will be able to receive that relief will moot the issue in
controversy.”); Leyse v. Lifetime Entertainment Svcs., LLC, --- F. Supp. 3d ---, 2016 WL
1253607, at *2 (S.D.N.Y. Mar. 17, 2016) (“[O]nce the defendant has furnished full relief, there
is no basis for the plaintiff to object to the entry of judgment in its favor. A plaintiff has no
entitlement to an admission of liability[.]”); see also Fauley v. Royal Canin U.S.A., Inc., 143 F.
Supp. 3d 763, 765 (N.D. Ill. 2016) (noting the Supreme Court’s “refusal, in [Gomez], to ‘place
the defendant in the driver’s seat’ of the litigation with a ‘gambit’ designed to ‘avoid a potential
adverse decision, one that could expose it to damages a thousand-fold larger than’ the payment it
proposes to make in plaintiff’s favor” (quoting Gomez, 136 S. Ct. at 672)).
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There is currently no evidence in the record indicating that the Department has actually
provided Hyzy with the relief he seeks, however, so this Court need not take sides on this
currently unresolved question of law. For the same reason, the Court need not decide at this time
whether Hyzy’s request that this Court enjoin the Department to follow the allegedly violated
Jeffries orders would preserve a controversy as to one or more of these claims even in the event
of full payment. (R. 22, Compl. in Intervention at 15.) Because the Department’s settlement offer
was rejected, Hyzy’s Counts 5-8 are not currently moot under Gomez.
B.
Supremacy Clause
The Department argues that Hyzy does not allege any violation of the Supremacy Clause
and thus his Counts 2 and 3 fail to state a claim. The Supremacy Clause does not provide any
federal rights itself, but only accords federal rights priority when they come into conflict with
state laws. (R. 26, Def.’s Suppl. Resp. at 2.) Because Hyzy does not allege that any state laws
conflict with any of his federal rights, the Department argues that his Supremacy Clause claims
under Section 1983 cannot proceed. (Id.) Hyzy responds that the district court held that the
original plaintiffs stated a claim under Section 1983 for a violation of the Supremacy Clause in
this case’s earlier history. (R. 28, Hyzy’s Reply at 2 (citing Jeffries, 337 F. Supp. at 1065).) He
further argues that the district court in this case’s earlier iteration decided the Supremacy Clause
issue, meaning that issue preclusion bars the Department from challenging this claim. (Id.)
This case’s earlier history notwithstanding, Hyzy does not allege any facts supporting a
claim for violations of the Supremacy Clause. The Supremacy Clause does not confer a private
right of action for individual plaintiffs like Hyzy. Armstrong v. Exceptional Child Ctr., Inc., 135
S. Ct. 1378, 1383 (2015) (observing that the Supremacy Clause “certainly does not create a cause
of action”). Further, although Hyzy is correct that the earlier course of litigation in this case
11
involved a Supremacy Clause issue, this was based upon the conflict between the then-existent
Illinois statute providing the Department with as much time as it needed to dispose of claims in
contravention of the Social Security Act’s more categorical time limit for holding hearings. See
Jeffries, 337 F. Supp. at 1064-65. The Court found this statute to be invalid to the extent that it
was inconsistent with the Social Security Act. (R. 5, Hyzy’s Mem., Ex. B.) In the present case,
however, the Department does not operate under this statute or any other state law that is
inconsistent with federal law. Instead, Hyzy takes issue with the Department’s interpretation and
application of the Jeffries orders themselves. The Department’s conduct, while allegedly
inconsistent with the requirements of the Social Security Act as interpreted in the Jeffries orders,
is based in policy stemming from those orders. Because the Supremacy Clause itself is “not a
source of any federal rights” and only “secure[s] federal rights by according them priority
whenever they come in conflict with state law,” a case such as this one where there is no
challenged state law does not implicate the Supremacy Clause. Planned Parenthood of Ind., Inc.
v. Comm’r of Ind. State Dep’t of Health, 699 F.3d 962, 982 (7th Cir. 2012) (citations omitted).
Because Hyzy does not allege the existence of any state law inconsistent with the Social Security
Act but only a Department policy at odds with the permanent injunction issued in the earlier
history of this case, Hyzy’s Counts 2 and 3 fail to state a plausible claim for relief. Accordingly,
these counts are dismissed.
II.
Motion to Intervene
The Court finds that Hyzy’s motion to intervene was timely and that he is entitled to
intervene as a matter of right at the post-judgment stage to enforce the permanent injunction.
Further, even if he did not have the right to intervene under Rule 24(a), the Court would exercise
its discretion in permitting him to intervene under Rule 24(b).
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A.
Timeliness
Although no party directly challenges whether Hyzy’s motion was filed in a timely
manner, the Court must determine whether it meets this threshold requirement. In his motion,
Hyzy alleges that he first became aware of the Jeffries orders in December 2014 through a
posting on the Illinois Legal Aid website describing the case and its requirement of penalty
payments for delayed hearings, though it did not provide the orders themselves. (R. 5, Hyzy’s
Mem. at 5.) After his hearings on May 19, 2015, Hyzy claims that he awaited his Jeffries
payments, and that when they did not arrive he inquired with the Department about them. (Id.
¶ 4.) Learning on July 20, 2015, that the Department would not issue penalty payments to him,
Hyzy filed an Illinois Freedom of Information Act request for copies of the Jeffries orders on
July 29, 2015, and received them on August 5, 2015. (Id.) He filed his motion to intervene in this
Court on September 3, 2015. (R. 4, Mot. to Intervene.)
The Court finds that Hyzy filed his motion to intervene in a timely manner. First, the
Court observes that, although Hyzy was vaguely aware of the Jeffries orders since December
2014, he filed his motion within two months of becoming aware that the Department would not
issue Jeffries payments to him and within one month of receiving and reviewing the Jeffries
orders themselves. The Court finds that the delay between Hyzy’s knowledge that he had an
interest in this case and his actual filing was negligible. The original parties here will suffer no
prejudice from the delay, as this case has been dormant for over thirty years, and Hyzy’s
intervention would not upset any litigation in progress. Because he does not seek to rewrite the
Jeffries orders, there is no risk that his post-judgment enforcement of the permanent injunction
will negatively impact the interests of the original parties. Compare People Who Care v.
13
Rockford Bd. of Educ., 68 F.3d 172, 176-77 (7th Cir. 1995) (finding intervention untimely when
the original parties would be prejudiced because they “have been formulating remedial
programs, and funding for these programs, literally for years”), with South, 759 F.2d at 612
(finding intervention timely when the original parties were not prejudiced by intervenor’s intent
to enforce consent decree and intervenor only recently learned his rights were impacted).
Further, Hyzy would suffer prejudice if he were not allowed to intervene. Even if Hyzy
could file a new suit in his own name, the Seventh Circuit has found “significant” prejudice
where a third-party beneficiary of a consent decree sought intervention even though he could
pursue individual actions, noting that “such a suit would be costly” and “would result in further
delays.” South, 759 F.2d at 612 n.2; see also City of Chi. v. Fed. Emergency Mgmt. Agency, 660
F.3d 980, 985 (7th Cir. 2011) (“[T]he possibility that the would-be intervenor if refused
intervention might have an opportunity in the future to litigate his claim has been held not to be
an automatic bar to intervention.”). Finally, the Court finds that unusual circumstances support
intervention in this case, including the efficiency of potentially avoiding a multiplicity of suits
based on differing interpretations of the Jeffries orders. See South, 759 F.2d at 612-13 (“[I]t was
appropriate for the district judge to consider as an ‘unusual circumstance’ the desirability of
avoiding a multiplicity of lawsuits.”).
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The fact that this case is 46 years old and has not been active since 1984, while unusual,
does not itself affect the determination of Hyzy’s timeliness. 4 “The timeliness factor is
essentially a reasonableness inquiry, requiring potential intervenors to be reasonably diligent in
learning of a suit that might affect their rights, and upon learning of such a suit, to act to
intervene reasonably promptly.” People Who Care, 68 F.3d at 175. At least one court in this
District has previously allowed intervention in a long-disposed case where the requirements
under Rule 24 are otherwise met. See Green v. Sielaff, No. 71 C 1403, 1992 WL 175511 (N.D.
Ill. July 23, 1992) (granting motion to intervene in a case filed in 1970 when a 1976 permanent
injunction was allegedly contradicted by a 1987 regulation). For these reasons, the Court finds
that Hyzy’s motion was timely for purposes of Rule 24.
B.
Intervention of Right
Even if his motion is timely, to intervene as a matter of right Hyzy still must show that he
meets all the requirements of Rule 24(a)(2). Sokaogon Chippewa Cmty. v. Babbit, 214 F.3d 941,
946 (7th Cir. 2000) (“Intervention of right will not be allowed unless all requirements of the Rule
are met.”). In short, he must establish that he claims an interest relating to the property or
transaction that is the subject of the action, that the disposition of the action may as a practical
4
In addition, this Court still has jurisdiction to enforce the permanent injunction in this case despite its
unusual age. While no party briefed the issue, this Court must sua sponte satisfy itself that it has
jurisdiction. Evergreen Square of Cudahy v. Wis. Housing & Econ. Dev. Auth., 776 F.3d 463 (7th Cir.
2015) (“[F]ederal courts are obligated to inquire into the existence of jurisdiction sua sponte[.]”). The
permanent injunction itself states that “[t]his Court shall retain continuing jurisdiction over this cause for
all purposes,” and neither the injunction nor any subsequent order in the case set an expiration date. (R. 5,
Hyzy’s Mem., Ex. B.) This Court does not lack jurisdiction to enforce the order simply because many
years have passed. See Fla. Ass’n for Retarded Citizens, Inc. v. Bush, 246 F.3d 1296, 1298 (11th Cir.
2001) (“[T]he age of the case . . . does not provide a basis for declining to enforce an existing order of the
court. Although not all injunctions operate in perpetuity, a district court shall enforce an injunction until
either the injunction expires or the court determines that the injunction should be modified or
dissolved.”).
15
matter impair or impede his ability to protect his interest, and that the existing parties are not
adequate representatives of his interests. See id. at 945-46.
The Department only explicitly challenges whether Hyzy’s interests would be impaired
by the disposition of this case. (R. 26, Def.’s Suppl. Resp. at 5.) It argues that, because Hyzy
does not seek to amend the Jeffries orders and could bring his claims under another lawsuit, his
interests are unaffected by the ability to intervene in this action. (Id. at 5-6.) Hyzy responds that
the Jeffries orders determine his right to relief, that the earlier stages of this litigation settled
questions of fact and law central to his claims, and that all of his claims fall within the scope of
the Jeffries orders. (R. 28, Hyzy’s Reply at 7-8.)
The Court finds the Department’s argument unconvincing. In part, this is because the
Department neglects the essence of Hyzy’s claim. The Department puts much emphasis on how
Hyzy does not wish to amend the Jeffries orders and suggest that he thus does not have an
interest in the disposition of this case; however, the true disagreement between the parties here
relates to the meaning of the Jeffries orders. Hyzy contends that the orders require a payment for
a delayed hearing regardless of what happens at that hearing, (R. 28, Hyzy’s Reply at 6), while
the Department’s position is that it only must pay applicants with delayed hearings when their
hearings lead to a decision adopted by the Department’s Secretary, (R. 26, Def.’s Suppl. Resp. at
11). If Hyzy is correct about what the Jeffries orders stand for, then he may be entitled to the
penalty payments he was not given, as well as various other damages under alternative causes of
action based on the Department’s failure to pay him. If the Jeffries orders permit the Department
to deny penalty payments when appeals are withdrawn at the hearing, as the Department
interprets them, then Hyzy likely would not be entitled to any damages at all. What the orders in
this case mean, and how far they stretch, is precisely the threshold issue for any of Hyzy’s
16
claims, whether he brings them in this case or in a separate suit. 5 Accordingly, the Court finds
that Hyzy has an interest in enforcing the post-judgment permanent injunction in this case and
that the disposition of this case may impair his ability to protect that interest. See Meridian
Homes Corp. v. Nicholas W. Prassas & Co., 683 F.2d 201, 204 (7th Cir. 1982) (“The existence
of ‘impairment’ depends on whether the decision of a legal question involved in the action would
as a practical matter foreclose rights of the proposed intervenors in a subsequent proceeding.”).
Additionally, the Seventh Circuit has previously permitted intervention of right in
circumstances very similar to the present case. In South v. Rowe, 759 F.2d 610, Illinois state
prison officials entered into a consent decree to settle litigation with a former prisoner, requiring
among other things that the Sheridan Correctional Center provide access to and certain materials
in its prison law library. Id. at 611. Two years later, one day before the expiration of the district
court’s jurisdiction for the purpose of enforcing the consent decree, another prisoner filed a
motion to intervene. Id. This prisoner, Radick, alleged that the prison had not been complying
with the consent decree in various ways, so he sought to enforce the decree and extend the
court’s jurisdiction over it. Id. at 611-12. The Seventh Circuit found that “Radick, as a current
inmate-user of the library, was an intended third-party beneficiary of the consent decree.” Id. at
612. Because the original plaintiff was no longer an inmate when the decree was negotiated, “the
only explanation for the decree’s continued regulation of the library was to benefit current and
future inmates who could avail themselves of the decree’s enforcement provisions as third-party
beneficiaries.” Id. The court found that this fact satisfied the interest and impairment
5
Hyzy is clear that he only seeks enforcement of the Jeffries orders and not to amend or overturn them.
(R. 22, Compl. in Intervention at 14-16.) Because Hyzy only seeks such forward-looking relief, the Court
treats his motion as a motion to intervene for a limited purpose, namely to enforce the post-judgment
permanent injunction. See, e.g., Revelis v. Napolitano, 844 F. Supp. 2d 915, 926 (N.D. Ill. 2012) (granting
motion to intervene for a limited purpose). The Court will not reopen those issues decided in the
underlying litigation.
17
requirements of Rule 24(a)(2), and that Radick’s interests were not adequately represented by
existing parties because the original plaintiff was “no longer an inmate with an incentive to
monitor and enforce the decree.” Id.
The present case is on all fours with South. Hyzy is an intended third-party beneficiary of
the Jeffries orders. Although it is difficult to be sure whether all of the original Jeffries plaintiffs
had received their hearings by the time the original injunction was ordered, this Court supervised
the Department’s compliance with the permanent injunction for approximately 12 years after it
was entered. (See R. 1, Docket.) The Department was responsible for filing reports detailing how
many delayed hearings were pending until August 1984, long after the original plaintiffs had
received their hearings and appropriate penalty payments. (See id. at 22.) Further, when the
penalty payments were imposed in 1975, the order specifically provided for each recipient
“whose appeal the defendants are or first become in violation . . . of this Decree after May 5,
1975.” (R. 5, Hyzy’s Mem., Ex. D.) Just as in South, the only explanation for the Court’s
continued regulation of the Department’s practices was to benefit current and future applicants
who could rely on the permanent injunction’s enforcement of the Social Security Act’s hearing
deadline. As an intended third-party beneficiary arguing that the Department is not complying
with the Jeffries orders, Hyzy satisfies the interest and impairment requirements of Rule
24(a)(2). And just as in South, the original plaintiffs are no longer monitoring and enforcing the
decree, so Hyzy’s interests are not being adequately represented by the existing parties. 6
6
Counsel for the original plaintiffs has filed two briefs in response to Hyzy’s motion. (See R. 18; R. 30.)
However, the original plaintiffs themselves are no longer involved in this case, and counsel for the
original plaintiffs appears to have learned of the Department’s alleged violations of the Jeffries orders
through receiving notice of this motion to intervene. While the Court commends counsel for responding
on behalf of the original class, the Court finds no indication that any original plaintiff has any interest in
the present enforcement of this permanent injunction.
18
The Department argues that South is distinguishable from the present case, as Radick
intervened “with the purpose of passing the torch on a collective issue” while Hyzy “seeks to
pursue his own purported individual cause of action.” (R. 26, Def.’s Suppl. Resp. at 6.) It
suggests that, because Hyzy seeks his own damages and does not desire to affect the Jeffries
orders, South’s “passing the torch” justification does not apply to Hyzy. (Id.) The Court fails to
see the distinction between these two situations. Just as in South, where Radick sought to require
compliance with the consent decree as it existed, Hyzy seeks to enforce the Jeffries orders even
if he does not mean to change them. The fact that Hyzy also has claims for individual damages
does not preclude him from intervening to enforce the Jeffries orders, but instead it establishes
that he has standing to intervene in the case. See Flying J, Inc. v. Van Hollen, 578 F.3d 569, 57172 (7th Cir. 2009) (discussing relationship between standing and the interest required to
intervene and finding that an intervenor must have a direct interest in the outcome of the suit and
must “be someone whom the law on which his claim is founded was intended to protect”).
Because Hyzy seeks to ensure the Department’s compliance with the Jeffries orders as an
intended third-party beneficiary and his individual claims all rely on establishing that the
Department violated the Jeffries orders in his case, the Court finds that he satisfies Rule
24(a)(2)’s interest and impairment requirements.
Because Hyzy filed a timely motion to intervene, he has an interest in the subject matter
of this case, the disposition of this case threatens to impair his right to relief, and the existing
parties do not adequately represent his interests, he is entitled to intervene in this case at the postjudgment stage under Rule 24(a)(2).
19
C.
Permissive Intervention
Even if Hyzy were not entitled to intervene under Rule 24(a)(2), this Court would permit
him to intervene at the post-judgment stage to enforce the permanent injunction under Rule
24(b)(1)(B). The parties devote very little attention to the question of permissive intervention in
their briefs, 7 but the history of this case and Hyzy’s claims support granting Hyzy permission to
intervene.
Hyzy’s claims share at least one common question of fact with the underlying case here:
Is the Department fully complying with the permanent injunction originally issued in 1972 and
the penalty payments imposed in 1975? The suit brought by the original plaintiffs focused on
different law and facts, mainly whether the Illinois statute conflicted with the Social Security
Act, than Hyzy’s claims, which center on whether the Department complied with the obligations
imposed by the permanent injunction and not the Social Security Act itself. 8 See Jeffries, 337 F.
Supp. at 1064-1066. However, the original suit persisted for approximately nine years following
the court imposing penalty payments for late hearings. (R. 1, Docket.) During this period, the
Court received monthly reports from the Department detailing how many applicants were
suffering delayed hearings. (Id.) Although the initial round of litigation may not have centered on
penalty payments, the greater portion of this case’s duration focused solely on ensuring that the
7
The Department, for instance, provides only one argument against permissive intervention: that Hyzy’s
claims, and thus any common questions of law or fact, are mooted by its settlement offer. (R. 26, Def.’s
Suppl. Resp. at 6-7.) While the question of mootness is addressed in greater detail above, the Department
offers no argument addressing the requirements for permissive intervention set forth in Rule 24(b).
8
The Department’s failure to provide Hyzy with penalty payments, allegedly in violation of the
permanent injunction, establishes the standing that is necessary for intervention in a closed case under
Rule 24(b) pursuant to the law of this Circuit. See Bond v. Utreras, 585 F.3d 1061, 1068-1072 (7th Cir.
2009) (“[W]hen a third party seeks intervention under Rule 24(b) . . . in a case or controversy that is no
longer live . . . the intervenor must meet the standing requirements of Article III in addition to Rule
24(b)’s requirements for permissive intervention.” Id. at 1072.). As he allegedly did not receive payments
in which he personally had a “legally protected interest,” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548
(2016), leading to a concrete economic harm, Hyzy suffered an injury-in-fact that is attributable to the
Department’s conduct and is likely to be redressed by a favorable judicial decision. Id. at 1547-49.
20
Department was holding timely hearings and paying applicants who experienced delays beyond
those permitted by the Social Security Act. Given Hyzy’s intention to enforce the Jeffries orders
and the great effort that was expended in enforcing the Jeffries orders in this case, the Court finds
that his claims share a sufficient nexus with the underlying case to warrant permissive
intervention. Because permitting Hyzy to intervene at the post-judgment stage would also not in
any way delay or prejudice the adjudication of the original parties’ rights, which were
adjudicated and settled more than 40 years ago, the Court would allow Hyzy to intervene under
Rule 24(b) if he did not have the right to intervene under Rule 24(a)(2).
CONCLUSION
For the foregoing reasons, Hyzy’s motion to intervene (R. 4) is GRANTED for the
limited post-judgment purpose of enforcing the Jeffries orders, as set forth in his proposed
pleading. The Department’s motion to dismiss (R. 26) is GRANTED IN PART AND DENIED
IN PART. Counts 2 and 3 of Hyzy’s complaint in intervention (R. 22) are DISMISSED.
ENTERED:
Chief Judge Rubén Castillo
United States District Court
Dated: September 30, 2016
21
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