Mallette v. Arlington Cnty Emplo ( 1996 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LILA M. MALLETTE,
Plaintiff-Appellant,
v.
ARLINGTON COUNTY EMPLOYEES'
No. 94-2298
SUPPLEMENTAL RETIREMENT
SYSTEM II; ARLINGTON COUNTY
BOARD OF SUPERVISORS,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CA-94-870-A)
Argued: November 1, 1995
Decided: August 1, 1996
Before ERVIN and WILKINS, Circuit Judges, and MICHAEL,
Senior United States District Judge for the Western District of
Virginia, sitting by designation.
_________________________________________________________________
Reversed and remanded by published opinion. Judge Ervin wrote the
opinion, in which Judge Wilkins and Senior Judge Michael joined.
_________________________________________________________________
COUNSEL
ARGUED: Robert Dean Weiss, Fairfax, Virginia, for Appellant.
Andrew Ray McRoberts, Assistant County Attorney, Arlington, Vir-
ginia, for Appellees. ON BRIEF: Barbara S. Drake, County Attor-
ney, Arlington, Virginia, for Appellees.
_________________________________________________________________
OPINION
ERVIN, Circuit Judge:
After Arlington County denied her application for service-related
disability retirement benefits, Lila Mallette brought this action under
42 U.S.C. § 1983, claiming that the County violated her constitutional
right to due process by failing to provide adequate notice. The district
court granted the County's motion for summary judgment, reasoning
that Mallette had no "property interest" entitling her to due process,
and that, in any event, she had received all the process she was due.
We disagree. We find that the County ordinance endowed Mallette
with a legitimate claim of entitlement to the benefits, and thus she had
a property interest in her application protected by the Due Process
Clause. We further find that significant issues of material fact remain
regarding whether Mallette received the minimum procedural safe-
guards compelled by the Constitution. Accordingly, we reverse and
remand.
I.
In reviewing the district court's grant of summary judgment, we
consider the evidence in the light most favorable to the appellant.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,
587-88 (1986).
Lila Mallette suffers from spina bifida and, as a result, has a history
of severe and debilitating back pain. In 1978, a major surgery greatly
improved Mallette's condition, eliminating much of her pain and
allowing her to engage in most normal activities with the help of a
cane.
After the successful surgery, Mallette undertook various types of
volunteer work for Arlington County. In 1981, she volunteered at the
Arlington County Visitor's Center, where she later applied for part-
2
time employment. At the time she applied, Mallette informed the
County of her medical history and passed a pre-employment physical
examination. The County initially hired Mallette in a part-time posi-
tion. About eight months later, Mallette became the full-time Coordi-
nator of the Visitor's Center and a member of the County's employee
retirement plan--the Arlington County Employees' Supplemental
Retirement System II.
In 1983, Mallette was injured in an auto accident while on duty.
After that accident, Mallette experienced renewed pain and weakness,
requiring her to spend most of her non-working time lying down.
Later the same year, as part of her duties, Mallette went on a strenu-
ous week-long bus tour of County tourist sites. After the bus trip her
condition drastically worsened, forcing her to stop working com-
pletely and barring her from most activities. She now spends nearly
all of her time lying down and must take narcotic pain medications.
According to her physician, Mallette's condition has permanently
incapacitated her and prevents her from working.
After her re-injuries in 1983, Mallette applied for worker's com-
pensation benefits, which she received until 1993. In March 1993,
near the end of the 500-week statutory maximum for payment of
worker's compensation benefits, the County Personnel Department
sent a letter informing Mallette that her payments would cease on
June 6, 1993. However, the letter stated that "[t]he Retirement System
will begin paying you effective June 7, 1993." The letter further
instructed Mallette to contact the Retirement Office"for additional
information regarding your retirement benefits." According to Mal-
lette, conversations with County employees led her to believe that the
County would convert her worker's compensation benefits to service-
related retirement benefits as a matter of course.
On March 17, 1993, Mallette submitted an application for service-
connected disability retirement benefits to the County Board of
Supervisors. On May 28, 1993, a physician for the Retirement Sys-
tem, William A. Hanff, examined Mallette and concluded that she
was permanently disabled and was eligible for service-connected dis-
ability retirement benefits. Dr. Hanff gave Mallette a copy of his
report, which stated that she "should be permanently retired on job
connected disability."
3
On June 26, 1993, the System's Board of Trustees notified Mallette
that it would "consider [her] disability application at its next meet-
ing," to be held July 1, 1993. The notice "requested" Mallette's pres-
ence and "encouraged" her to attend. Approximately 125 pages of
medical and administrative records, generated over the ten years of
Mallette's worker's compensation case, accompanied the notice. Also
enclosed was a copy of Dr. Hanff's report, recommending that Mal-
lette receive service-related disability benefits. 1
Mallette appeared at the hearing unrepresented by counsel. Before
the 8:00 a.m. proceeding began, Retirement Administrator Irwin
Mazin handed Mallette a copy of a revised medical report by Dr.
Hanff, dated June 29, 1993. The new report indicated that, after a tele-
phone conversation with Mazin, Dr. Hanff reversed his earlier conclu-
sion and instead recommended that the Board deny Mallette's
service-related claim. Dr. Hanff stated that it was not medically cer-
tain that the automobile accident was the "sole reason for her to be
on job-connected disability without any pre-existing condition."
Mallette submitted a written statement at the hearing.2 The parties
_________________________________________________________________
1 The County claims that it also enclosed a copy of the recommendation
of the Retirement Administrator, Irwin Mazin, that the Board of Trustees
deny Mallette's application. Oddly, that document was dated July 1,
1993. In addition, the Administrator's recommendation purported to be
based upon the evaluation of the Medical Examining Board physician--
who had still recommended approval at that point--and upon informa-
tion furnished by Mallette--who had not yet been heard. An identical
copy of the document was apparently mailed to Mallette after July 1,
1993, for the purpose of notifying her of the adverse action taken at the
hearing. For summary judgment purposes, we accept Mallette's assertion
that she did not receive a copy of Mazin's recommendation prior to the
hearing.
2 Mallette submitted a long, rambling statement which appears to be
largely aimed at refuting information contained in her worker's compen-
sation medical records. In the course of her statement, Mallette offered
to supply any information to assist the Board in"making its decision."
She stated that she "had no idea there would be any problem with [her]
retirement" and asked if she applied "for the wrong kind of retirement."
She stated that she had not yet consulted an attorney but would "if neces-
sary" and that she would "fight for her rights." The parties dispute
whether that language necessarily indicates that Mallette had actual
notice of the nature of the hearing.
4
dispute whether she also testified. Mallette contends that the Board
gave her no opportunity to question Dr. Hanff or the System Adminis-
trator. She did not request time to present additional evidence or wit-
nesses.
After the hearing, the Board of the Retirement System denied Mal-
lette's claim for service-connected disability retirement benefits. The
Board found that her accident was not the "sole reason" for her dis-
ability in view of her preexisting disability.
Mallette unsuccessfully sought administrative redress, then filed an
action in the District Court seeking a declaration, injunctive relief,
and other remedies under § 1983, based on due process and equal pro-
tection. She later withdrew the equal protection claim. The district
court granted the County's motion for summary judgment. It ruled
that Mallette had no property interest entitling her to procedural due
process. And it further found that, even if due process applied, Mal-
lette had received all protections due because she was notified of and
attended the hearing.
II.
The Due Process Clause of the Fourteenth Amendment reduces
unfair or mistaken deprivations of individual interests by command-
ing states to provide persons in jeopardy of loss with certain proce-
dural safeguards. It is by now axiomatic that the language of the Due
Process Clause--"nor shall any State deprive any person of life, lib-
erty, or property, without due process of law. . . ."--calls for two sep-
arate inquiries in evaluating an alleged procedural due process
violation. First, did the plaintiff lose something that fits into one of
the three protected categories: life, liberty, or property? Board of
Regents v. Roth, 408 U.S. 564, 569 (1972). And, if so, did the plaintiff
receive the minimum measure of procedural protection warranted
under the circumstances? Logan v. Zimmerman Brush Co., 455 U.S.
422, 428 (1982). We conclude that the Arlington County Retirement
System afforded Mallette a property interest in her right to apply for
disability retirement benefits, triggering procedural due process pro-
tection. We further conclude that Mallette raised genuine issues of
material fact regarding whether the County deprived her of her prop-
erty interest without meaningful notice and an opportunity to be heard
5
--the minimum procedural safeguards guaranteed by the Constitu-
tion.
A.
Mallette is entitled to procedural due process only if she holds a
constitutionally protected property interest in the disability retirement
benefits. Roth, 408 U.S. at 569. The Supreme Court provided the most
frequently relied-upon definition of "property interest" in Board of
Regents v. Roth:
To have a property interest in a benefit, a person clearly
must have more than an abstract need or desire for it. He
must have more than a unilateral expectation of it. He must,
instead, have a legitimate claim of entitlement to it.
408 U.S. at 577. Although clothed in due process protection by the
Constitution, "property interests" are the creatures of independent
positive law. As the Court explained, property rights
are created and their dimensions are defined by existing
rules or understandings that stem from an independent
source such as state law--rules or understandings that
secure certain benefits and that support claims of entitlement
to those benefits.
Id. Thus, to decide whether Mallette has a property interest protected
by the Fourteenth Amendment, we must look for an independent
source of a "claim of entitlement." We find such a source in the
Arlington County Code.
Virginia law establishes a retirement system for the benefit of state,
county, and local employees, but permits certain localities to provide
their own retirement plans. Va. Code Ann. § 51.1-800 et seq. (Michie
1994 & Supp. 1995). State law mandates, however, that localities
choosing to opt out of the state employee retirement system pay no
less than two-thirds of the state benefits. Id. § 51.1-800(A). Arlington
County has opted out of the state system, and the County Board of
Supervisors administers its own retirement program--the County
6
Employees' Supplemental Retirement System II ("the System").
Arlington, Va. Code § 46-1 et seq. (Supp. 1994). The System offers
membership to Arlington County's full-time employees, who contrib-
ute through salary deductions. Id. § 46-32. It provides several types
of retirement benefits, including service-connected disability benefits.
The County Code provides that "any member . . . may at any time
prior to his normal retirement date retire on account of service-
connected disability that is not due to the employee's willful miscon-
duct." Id. § 46-41(a). The ordinance directs payment of benefits once
a medical examining board has certified that the disability (1) is per-
manent; (2) incapacitates the employee for his or her duties; and (3)
resulted from an accident or injury that occurred in the actual perfor-
mance of a duty. Id. Employees with a pre-employment disability are
eligible for service-connected disability benefits, but only if the board
finds that the employee "would have been entitled to a service-
connected disability allowance notwithstanding the pre-employment
disability." Id. § 46-41. Any member meeting these conditions "shall
receive" a percentage of his or her average final compensation upon
retirement. Id. § 46-42.
Justice O'Connor summarized the law governing the existence of
a statutory entitlement in Board of Pardons v. Allen:
The Roth decision teaches that a mere expectation of a
benefit--even if that expectation is supported by consistent
government practice--is not sufficient to create an interest
protected by procedural due process. Instead, the statute at
issue must create an entitlement to the benefit before proce-
dural due process rights are triggered. In my view, the dis-
tinction between an "entitlement" and a mere"expectancy"
must necessarily depend on the degree to which the
decision-makers' discretion is constrained by law. An indi-
vidual simply has nothing more than a mere hope of receiv-
ing a benefit unless the decision to confer that benefit is in
a real sense channeled by law. Because the crucial inquiry
in determining the creation of a protected interest is whether
a statutory entitlement is created, it cannot be sufficient
merely to point to the existence of some "standard." Instead,
to give rise to a protected liberty interest, the statute must
7
act to limit meaningfully the discretion of the decision-
makers.
482 U.S. 369, 382 (1987) (O'Connor, J., dissenting) (emphasis in
original).
Accordingly, our focus must center on the degree of discretion
afforded to the Retirement System's decisionmakers. The Arlington
Code narrows the substantive range of the Board's decisionmaking to
the application of certain particularized eligibility criteria. Once an
employee meets those particularized standards, the Code does not
allow administrators the discretion not to award benefits, or to apply
additional or alternate eligibility criteria. Arlington's ordinance
speaks to its officials in compulsory terms: qualifying members "shall
receive" benefits. That mandatory language creates a "legitimate
claim of entitlement" in employees who meet the System's standards.
Compare Daniels v. Woodbury County, 742 F.2d 1128, 1132 (8th Cir.
1984) (mandatory language in Iowa general relief statute creates a
"legitimate claim of entitlement and expectancy of benefits in persons
who claim to meet the eligibility requirements") (citations and inter-
nal quotations omitted), and Griffeth v. Detrich , 603 F.2d 118, 121
(9th Cir. 1979), cert. denied sub nom. Peer v. Griffeth, 445 U.S. 970
(1980) (state code using mandatory language requiring localities to
provide general relief, combined with county regulations providing
detailed, objective eligibility criteria, restrict the discretion of intake
eligibility workers and create legitimate expectations of receipt in
those who meet those standards), with Jacobs Visconsi & Jacobs Co.
v. City of Lawrence, Kansas, 927 F.2d 1111, 1116 (10th Cir. 1991)
("[S]tate law's requirement that zoning decisions be reasonable . . .
is insufficient to confer upon the applicant a legitimate claim of enti-
tlement."); Mahone v. Addicks Utility Dist. of Harris County, 836
F.2d 921, 930-31 (5th Cir. 1988) (finding no property interest in prop-
erty owner's application for annexation by a municipal utility district
where the authorizing statute simply set out a guiding policy to
inform the district's otherwise broad discretion); Davis v. Ball Memo-
rial Hosp. Ass'n, 640 F.2d 30, 38 (7th Cir. 1980) (indigent patients
had no property right because regulations contemplated that eligible
applicants might exceed resources and did not mandate assistance
when eligibility was found); and Jacobson v. Hannifin, 627 F.2d 177,
180 (9th Cir. 1980) ("A property interest may be created if ``proce-
8
dural' requirements are intended to operate as a significant substan-
tive restriction on the basis for an agency's actions," but the Nevada
Gaming Act creates no such interest in a gaming license because it
grants to Nevada Gaming Commission "full and absolute power to
deny any application for any cause [it] deemed reasonable.").
Supreme Court decisions addressing the existence of statutorily cre-
ated "liberty interests provide a close analogy. 3 Compare Hewitt v.
Helms, 459 U.S. 460, 472 (1983) (examining a state statute and its
implementing regulations governing an inmate's confinement to
administrative segregation, and finding that "the repeated use of
explicitly mandatory language in connection with requiring specific
substantive predicates demands a conclusion that the State has created
a protected liberty interest"), with Olim v. Wakinekona, 461 U.S. 238,
249 (1983) (holding that interstate transfers of federal prison inmates
did not implicate a protected liberty interest where no "particularized
standards or criteria guide[d] the State's decisionmakers," but deci-
sionmakers were given "unfettered" discretion to transfer inmates for
"any constitutionally permissible reason or for no reason at all") (cita-
tions and internal quotations omitted).
The statutory claim of entitlement in this case is bolstered by the
nature of the benefit at stake. The right to payment of disability retire-
ment benefits arises by virtue of past labor services and past contribu-
tions to a disability fund. Member employees, who contribute their
earnings to the system, reasonably expect that accrued benefits will
be waiting if they need them and qualify for them. As a member of
the class of persons the Retirement System was intended to protect
and benefit, Mallette has more than an abstract desire for the benefits.
If she can make a prima facie case of eligibility, she has a property
interest in those benefits and an accompanying right to be heard. See
Ressler v. Pierce, 692 F.2d 1212, 1215 (9th Cir. 1982) (applicant had
"a constitutionally protected ``property' interest in [HUD rent subsi-
dies] by virtue of her membership in a class of individuals whom the
[ ] program was intended to benefit").
_________________________________________________________________
3 The Supreme Court recently abandoned this approach in the context
of regulations governing prison administration. Sandin v. Conner, 132 L.
Ed. 2d 418, 429, 30 (1995). However, the Court reaffirmed its vitality "in
the ordinary task of construing a statute defining rights and remedies
available to the general public." Id. at 428.
9
We find that the Arlington Code vests county employees who meet
its eligibility requirements with a right to receive disability retirement
benefits when they suffer work-related disabilities. Having estab-
lished that right, the County cannot deny benefits to employees with-
out fair procedures. We join other courts that have accorded federal
constitutional protection to disability retirement benefits. E.g.,
Ostlund v. Bobb, 825 F.2d 1371, 1373 (9th Cir. 1987), cert. denied,
486 U.S. 1033 (1988) (California Government Code"clearly gives
city police officers a vested right to disability retirement if they suffer
a work-related disability," creating a property interest in those bene-
fits and an accompanying right to a hearing concerning entitlement);
Basciano v. Herkimer, 605 F.2d 605, 609 (2d Cir. 1978), cert. denied,
442 U.S. 929 (1979) (accident disability retirement benefits under
New York City's Employees' Retirement System protected by due
process); cf. Mathews v. Eldridge, 424 U.S. 319, 332 (1976) (Social
Security disability benefits protected by due process).
Arlington County makes two arguments against the existence of a
property interest here. First, it argues that, because Mallette may not
receive benefits unless she meets the eligibility requirements, and
because the Board determined that Mallette did not meet those
requirements, Mallette has no property interest in the benefits. That
argument confuses the right to receive a benefit with the right to fair
decision-making before the benefit is denied. See Bennett v. Tucker,
827 F.2d 63, 73 (7th Cir. 1987) ("A state may not deprive an individ-
ual of his or her property interest without due process, and then
defend against a due process claim by asserting that the individual no
longer has a property interest."). Under the County's approach, any
adverse decision on the merits would insulate it from the obligation
to provide due process. Conversely, no employee could have a prop-
erty interest triggering due process unless the agency had already
awarded them the benefit--a convenient result for the County--but
one that conflicts with the law. The Supreme Court has explained that
a person may hold a property interest in a benefit even before it has
been determined that she is, in fact, eligible for the benefit.
A person's interest in a benefit is a "property" interest for
due process purposes if there are such rules or mutually
explicit understandings that support his claim of entitlement
to the benefit and that he may invoke at a hearing.
10
Perry v. Sindermann, 408 U.S. 593, 601 (1972) (emphasis added). By
the same token, "[t]he right to be heard does not depend upon an
advance showing that one will surely prevail at the hearing." Fuentes
v. Shevin, 407 U.S. 67, 87 (1972). In Goldberg v. Kelly, the Court
held that welfare claimants "had a claim of entitlement to welfare
payments that was grounded in the statute defining eligibility for
them," and thus had a right to due process, even though "[t]he recipi-
ents had not yet shown that they were, in fact, within the statutory
terms of eligibility." Roth, 408 U.S. at 577 (citing Goldberg v. Kelly,
397 U.S. 254 (1969)). Just as the plaintiffs in Goldberg were not
required to show that they would prevail on the merits before they
were entitled to due process, Mallette need not prove that her injury
meets County standards to rightfully claim a modicum of procedural
fairness. We hold that Mallette has a property interest in her potential
eligibility for disability retirement benefits, whether or not she ulti-
mately prevails on the merits.4
Second, the County argues that, because Mallette had not yet
received disability benefits, but was merely an applicant, she could
not have a property interest in the benefits. Whether an applicant for
benefits is entitled to the same process as a recipient whose benefits
are revoked is a thread expressly left loose by the Supreme Court. See
Lyng v. Payne, 476 U.S. 926, 942 (1986) (acknowledging that the
Court has "never held that applicants for benefits, as distinct from
those already receiving them, have a legitimate claim of entitlement
protected by the Due Process Clause of the Fifth or Fourteenth
Amendment," but leaving question unresolved); Walters v. National
Ass'n of Radiation Survivors, 473 U.S. 305, 320 n.8 (1985) (noting
that the Court has never decided whether applicants for benefits have
the same claim of entitlement as recipients, but deciding the case on
other grounds); Gregory v. Town of Pittsfield , 470 U.S. 1018, 1021
(1985) ("[o]ne would think that where state law creates an entitlement
to general assistance based on certain substantive conditions, there
_________________________________________________________________
4 Because we find that the authorizing ordinance created a property
interest, we need not address Mallette's argument, relying on Perry v.
Sinderman, 408 U.S. 593 (1972), that the County's written and oral rep-
resentations, together with its history of worker's compensation pay-
ments, generated a "mutually explicit understanding" justifying her claim
of entitlement.
11
similarly results a property interest that warrants at least some proce-
dural safeguards. Although this Court has never addressed the issue
whether applicants for general assistance have a protected property
interest, the weight of authority among lower courts is [that they
have].") (O'Connor, J., dissenting from denial of certiorari) (citations
omitted); Peer v. Griffeth, 445 U.S. 970-71 (1980) (Rehnquist, J., dis-
senting from denial of certiorari) (questioning Ninth Circuit's ruling
that Goldberg's protection of terminated recipients of welfare benefits
applies equally to applicants for those benefits).
But while the Court has not spoken to whether applicants have the
same procedural rights as recipients, its jurisprudence militates
against a facile rule denying due process to all applicants. In
Greenholtz v. Inmates of Nebraska Penal & Correctional Complex,
the Court agreed with inmate applicants for parole that the structure
and language of the Nebraska parole statute created a "legitimate
expectation of release absent the requisite finding that one of the justi-
fications for deferral exists." 442 U.S. 1, 12 (1979). Older cases con-
cerning state bar applications also suggest that a desired plum need
not be already in hand before warranting the shelter of the Due Pro-
cess Clause. E.g., Willner v. Committee on Character & Fitness, 373
U.S. 96, 102 (1963) ("[T]he requirements of due process must be met
before a State can exclude a person from practicing law."); Schware
v. Board of Bar Examiners, 353 U.S. 232, 239 (1957) (under the Due
Process Clause, "officers of a state cannot exclude [a bar] applicant
when there is no basis for their finding that he fails to meet [its admis-
sion] standards"); Goldsmith v. United States Bd. of Tax Appeals, 270
U.S. 117, 123 (1926) (applicant for admission to practice before
Board of Tax Appeals entitled to notice and hearing).
As far as we can tell, every lower federal court that has considered
the issue has rejected the "application/revocation" distinction. For
example, the Ninth Circuit reversed a district court's finding of no
property interest based on an applicant-recipient distinction. Griffeth
v. Detrich, 603 F.2d 118, 120-122 9th Cir. 1979). It ruled that the
proper inquiry was to review the language of the authorizing legisla-
tion to learn the extent to which it restricted the discretion of decision-
makers. Id. at 122. The Eighth Circuit followed Griffeth in refusing
to distinguish applicants for county public assistance. Daniels v.
Woodbury County, 742 F.2d 1128 (8th Cir. 1984). The court judged
12
the applicant/recipient distinction to "oversimplif[y]" the proper anal-
ysis: whether the language of the state or local law has vested a legiti-
mate claim of entitlement in the plaintiff. Id. at 1132. See also
National Ass'n of Radiation Survivors v. Derwinski , 994 F.2d 583,
588 (9th Cir. 1992), cert. denied 114 S. Ct. 634 (1993) ("[T]he district
court correctly concluded that both applicants for and recipients of
SCDD benefits possess a constitutionally protected interest in those
benefits."); Haitian Refugee Ctr., Inc. v. Nelson, 872 F.2d 1555, 1562
(11th Cir. 1989) (finding an entitlement interest exists in the right to
apply for Special Agricultural Worker status), aff'd sub. nom. McNary
v. Haitian Refugee Ctr, Inc., 498 U.S. 479 (1991); Holbrook v. Pitt,
643 F.2d 1261, 1278 n.35 (7th Cir. 1981) ("Applicants who have met
the objective eligibility criteria of a wide variety of governmental pro-
grams have been held to be entitled to protection under the due pro-
cess clause."); Kelly v. Railroad Retirement Bd., 625 F.2d 486, 490
(3d Cir. 1980) ("[D]ue process must attach to the process of determin-
ing ineligibility, whether at the outset or after receipt of benefits.");
Wright v. Califano, 587 F.2d 345, 354 (7th Cir. 1978) ("[D]enials do
not necessarily deserve less due process than terminations."); Raper
v. Lucy, 488 F.2d 748, 752 (1st Cir. 1973) (due process protection of
the liberty interest in the right to operate a motor vehicle applies
equally to drivers' license application proceedings and suspension
proceedings); Colson ex rel. of Colson v. Sillman, 852 F. Supp. 1183,
1190 (W.D.N.Y. 1992), rev'd on other grounds, 35 F.3d 106 (2nd
Cir. 1994) ("For purposes of assessing whether there is a property
interest in [Erie County Physically Handicapped Children's Program]
benefits implicating due process protection, the fact that plaintiffs are
applicants for benefits rather than current recipients is not determina-
tive."); National Ass'n of Radiation Survivors v. Walters, 589 F.
Supp. 1302, 1312 (N.D. Cal. 1984), rev'd on other grounds, 473 U.S.
305 (1985) ("Applicants for [veterans' Service-Connected Death and
Disability] benefits, as distinct from recipients threatened with total
or partial termination, also have a property interest in the receipt of
those benefits."); Harris v. Lukhard, 547 F. Supp. 1015, 1027 (W.D.
Va. 1982) ("The Social Security Act and Virginia's implementing
"regulations create a legitimate entitlement and expectancy in Medic-
aid benefits for applicants who claim to meet the eligibility require-
ments."); Davis v. United States, 415 F. Supp. 1086, 1091 (D. Kan.
1976) ("Although [an applicant] . . . has[not] yet been administra-
13
tively adjudged entitled to receive benefits . . .[he] nonetheless pos-
sesses a property interest of sufficient magnitude to invoke" due
process protection because the regulations' objective standards
"create a legitimate expectancy that an individual application will not
be denied" in the absence of a factual determination of non-
eligibility.); Shaw v. Weinberger, 395 F. Supp. 268, 270 (W.D.N.C.
1975) (due process protects applicants for Supplemental Security
Income Program benefits). But see state cases reaching the contrary
conclusion. Gregory v. Pittsfield, 479 A.2d 1304, 1308 (Me. 1984),
cert. denied, 470 U.S. 1018 (1985) ("In Maine a general assistance
applicant has no property interest in benefits until he has been found
qualified and eligible by the local authority . . . . "); Sumpter v. White
Plains Hous. Auth., 278 N.E.2d 892, 894 (N.Y.), cert. denied, 406
U.S. 928 (1972) ("[A] party aggrieved by loss of a pre-existing right
or privilege may enjoy procedural rights not available to one denied
the right or privilege in the first instance."); Zobriscky v. Los Angeles
County, 105 Cal. Rptr. 121, 123 (Cal. Ct. App. 1972) (no "general
requirement for an evidentiary hearing in connection with the denial
of an application for welfare benefits").
The County relies on Eldridge v. Bouchard, 645 F. Supp. 749
(W.D. Va. 1986), aff'd without opinion, 823 F.2d 546 (4th Cir. 1987),
to assert that there can exist no property interest unless a right or priv-
ilege is already being enjoyed. We do not read Eldridge to stand for
such a rule. There, 139 employees of a southwestern division of the
Virginia Department of State Police challenged the payment of a sal-
ary differential to employees in the Northern Virginia area. Id. at 750.
The district court held that the plaintiffs had no property interest in
a salary increase. Id. at 757. Although the court stated that the defen-
dants did not revoke a privilege that the plaintiffs were already receiv-
ing, it did not rest upon that fact in reaching its decision. Id. at 756-
57. The crux of its decision was that the plaintiffs had shown no
source of "entitlement in a salary differential but only a desire to
receive it." Id. Eldridge also importantly differed from this case
because it concerned a class-wide, "legislative-type" policy decision,
rather than a determination of an individual's entitlement to an estab-
lished benefit. When a government makes a decision affecting a class
of people, the Due Process Clause does not require that a state pro-
vide due process to each individual member of the affected group.
14
O'Bannon v. Town Court Nursing Ctr., 447 U.S. 773, 800 (1980)
(Blackmun, J., concurring).
We join our sister courts in rejecting the mechanical and simplistic
applicant/recipient distinction where a statute mandates the payment
of benefits to eligible applicants based on objective, particularized
criteria.5 As explained in Roth, the Supreme Court's procedural due
process jurisprudence focuses on whether statutory provisions create
a right, not whether benefits have been received in the past. 408 U.S.
at 577. The Arlington Retirement System creates in its members a
legitimate expectation of receiving benefits and a consequent right to
be heard. Eligible applicants are no less entitled to that expectation
than are eligible recipients, and the potential consequences of denying
disability benefits are no less potentially dire than those of revoking
them.
B.
Having decided that due process applies to Mallette's application
for benefits, we turn to the question of what process is due. Goss v.
Lopez, 419 U.S. 565, 577 (1975). At a minimum, the Constitution
requires notice and some opportunity to be heard. Joint Anti-Fascist
Refugee Comm. v. McGrath, 341 U.S. 123, 178 (1951). Above that
threshold, due process has no fixed content; it is"flexible and calls
for such procedural protections as the particular situation demands."
Morrissey v. Brewer, 408 U.S. 471, 481 (1972). What process is war-
ranted in a given case depends on the balancing of three factors:
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5 As noted by the Eighth Circuit and others, the applicant/recipient
approach is reminiscent of the discredited wooden distinction between
"rights" and "privileges." Daniels , 742 F.2d at 1132 n.6. But while reject-
ing a rule that applicants are entitled to no process, we recognize that an
applicant sometimes may be due less process than one who already has
been receiving benefits. That is because applications for benefits often
turn on objective factors not productively developed in a hearing, such
as age or length of employment. But where eligibility turns on subjective
factors, an applicant no less than a recipient is entitled to an opportunity
to be heard.
15
First, the private interest that will be affected by the official
action; second, the risk of an erroneous deprivation of such
interest through the procedures used, and the probable value,
if any, of additional or substitute procedural safeguards; and
finally, the Government's interest, including the function
involved and the fiscal and administrative burdens that the
additional or substitute procedural requirement would entail.
Mathews v. Eldridge, 424 U.S. 319, 335 (1976).6
These factors lead us to conclude that Mallette has alleged facts
sufficient to persuade a reasonable factfinder that she was deprived of
the minimum procedural safeguards guaranteed her under the circum-
stances. First, the strength of an incapacitated employee's interest in
retirement disability benefits is self-evident. Second, viewed in the
light most favorable to Mallette, the County's affirmatively mislead-
ing notice resulted in an unacceptable likelihood of error. The County
_________________________________________________________________
6 Additionally, postdeprivation remedies provided by a state are a fac-
tor to be considered when applying the Mathews balancing process:
The constitutional violation actionable under § 1983 is not com-
plete when the deprivation occurs; it is not complete unless and
until the State fails to provide due process. Therefore, to deter-
mine whether a constitutional violation has occurred, it is neces-
sary to ask what process the State provided, and whether it was
constitutionally adequate. This inquiry would examine the proce-
dural safeguards built into the statutory or administrative proce-
dure of effecting the deprivation, and any remedies for erroneous
deprivations provided by statute or tort law.
Zinermon v. Burch, 494 U.S. 113, 126 (1990). Thus, if Virginia law pro-
vided an opportunity for Mallette to seek redress for an erroneous denial
of benefits in state court, the process available to her--both before and
after the denial of benefits--may be adequate to comply with the Due
Process Clause. See Mathews, 424 U.S. at 349 (noting availability of
postdeprivation review in upholding sufficiency of process provided to
recipients of Social Security disability payments prior to termination).
Whether relief from an adverse determination by the System's Board of
Trustees was available to Mallette was neither briefed nor argued by the
parties, except that the County denied her request for reconsideration of
its decision.
16
sent Mallette a letter informing her that her retirement benefits
"would begin" June 7, 1993. Mallette contends that she understood
from conversations with County workers that her application for
retirement benefits was largely a formality, and that her worker's
compensation benefits would be "converted" to retirement as a matter
of course. Most significant, the County furnished Mallette with the
report of its own physician, recommending that her application be
granted. Not until she arrived on the morning of the hearing did Mal-
lette receive Dr. Hanff's revised report. Based on those facts, Mallette
could not have understood the adverse nature of the hearing, could not
have adequately evaluated her need for counsel, and could not have
prepared appropriate rebuttal evidence.7 The risk of an inaccurate and
unfair deprivation mounts when decisionmaking is one-sided.
McGrath, 341 U.S. at 170.
Turning to the third Mathews factor, we cannot find that the
County would have been unduly burdened by providing accurate and
timely notice to Mallette. In fact, the County's own hearing proce-
dures information sheet--which it claims to have provided Mallette--
declares that "[b]y the Friday before the hearing on a disability retire-
ment application, the Administrator, by certified U.S. mail, will send
[the applicant] any documents to be presented to the Board by the
Administrator. . . ." It is undisputed that the County failed to provide
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7 We express no opinion concerning Mallette's ultimate eligibility for
benefits. However, we note that Mallette's inability to adequately chal-
lenge Dr. Hanff's revised report may have resulted in actual error in the
Board's decision. The County ordinance provides that an employee with
a pre-employment disability is eligible for service-connected disability if
the Board finds that the employee "would have been entitled to a service
connected disability allowance notwithstanding the pre-employment
disability." Arlington, Va. Code § 46-27 (emphasis added). In Dr.
Hanff's revised report, he seemingly applied a different standard, stating
that, "with respect to her automobile accident in 1983 being the sole
reason for her to be on job connected disability retirement without any
pre-existing condition cannot be said within a reasonable degree of medi-
cal certainty." (emphasis added). Similarly, the conclusion and recom-
mendation of Irwin Mazin appears to be based on a standard other than
that prescribed by the County Code: "I believe these two incidents could
not be the only cause of her disability." (emphasis in original).
17
to Mallette that measure of process which it had itself determined to
be appropriate.
The County argues that it owed Mallette no more process than she
received: She knew when and where the hearing was held, she
appeared, she submitted a written statement, and she had a chance to
say anything she wanted to say.8 We do not share that formalistic
understanding of meaningful notice. As the Supreme Court has
explained, "[a]n elementary and fundamental requirement of due pro-
cess in any proceeding which is to be accorded finality is notice rea-
sonably calculated, under all the circumstances, to apprise parties of
the pendency of the action and afford them an opportunity to present
their objections." Memphis Light, Gas & Water Div. v. Craft, 436
U.S. 1, 13 (1978) (quoting Mullane v. Central Hanover Trust Co.,
339 U.S. 306, 314 (1950)). Because we find sufficient evidence in the
record to suggest that Mallette did not receive notice "reasonably cal-
culated" to afford her a meaningful opportunity to present her side at
the hearing before the System's Board of Trustees, we remand the
case for further proceedings. On remand, the district court should
apply the Mathews balancing test to evaluate whether the process
accorded Mallette was constitutionally adequate, taking into account,
where appropriate, any avenues of relief that were available to her
under Virginia law.
REVERSED AND REMANDED
_________________________________________________________________
8 The parties dispute whether Mallette testified, and whether she was
given an opportunity to dispute the Administrator's evidence.
18