Jimenez v. Weinberger

¶3STEVENS, Circuit Judge.

¶4This appeal is a sequel to Jimenez v. Weinberger, 417 U.S. 628, 94 S.Ct. 2496, 41 L.Ed.2d 363, in which the Supreme Court held unconstitutional the portion of the Social Security Act which had provided the basis for the Secretary’s denial of plaintiffs’ application for benefits. On remand, the district court granted relief to the plaintiffs and to *692other similarly situated applicants. The Secretary has appealed, questioning (1) whether the district court had the power to certify the case as. a class action after a decision on the merits, and (2) if so, whether the award of retroactive relief to the unnamed plaintiffs was proper. Because of the novelty and importance of the issues, we recite the procedural history of the case in some detail.

¶5I

¶6Plaintiffs are the illegitimate children of a disabled wage earner. On August 21, 1969, their father, acting on their behalf, applied for insurance benefits under the Social Security Act. Because plaintiffs were born after the onset of their father’s disability, § 216(h)(3)(B) of the Act, 42 U.S.C. § 416(h)(3)(B), required the Secretary to deny their application.1 They exhausted their administrative remedies; on June 15, 1971, which was less than 60 days after the final adverse decision of the Secretary, they commenced this action, invoking the jurisdiction of the federal court under 42 U.S.C. § 405(g).2

¶7The complaint sought both individual and class relief.

¶8The class allegations met the requirements of subparagraph (b)(2) of Fed.R. Civ. 23 rather than subparagraph (b)(3).3*693Plaintiffs prayed for a judgment deciar-. ing the statutory exclusion unconstitutional, enjoining the Secretary from denying benefits to plaintiffs or to any other members of the class, and for such other relief as might be appropriate.

¶9The Secretary’s answer admitted the facts alleged in the complaint, averred that the statute foreclosed relief, and denied that the case was appropriately brought as a class action. No separate motion directed at the question whether the case should be certified as a class action was filed by either party. The Secretary moved for summary judgment, contending (1) that the case should not be treated as a class action, and (2) that he should prevail on the merits. The plaintiffs filed a cross motion for summary judgment, arguing the converse of both issues. Thereafter, in May 1972 plaintiffs filed a motion to convene a three-judge court pursuant to 28 U.S.C. § 2282.4

¶10The three-judge court was appointed and proceeded to decide the merits, apparently without giving any consideration to the class action issue. In their opinion sustaining the constitutionality of the statute, the majority said nothing about the class action; Jimenez v. Richardson, 353 F.Supp. 1356 (N.D.Ill.1973). In his dissent, however, Circuit Judge Fairchild stated that he would have enjoined enforcement of the statutory exclusion as applied to the unnamed plaintiffs “and others similarly situated.” Id. at 1363.

¶11Plaintiffs appealed directly to the Supreme Court pursuant to 28 U.S.C. § 1253. By accepting jurisdiction, that Court implicitly decided that the three-judge court was properly convened,5 and also, again implicitly, that the district court had the power to grant injunctive relief in an action brought under § 405(g) of the Social Security Act.6 The only question formally presented by plaintiffs’ appeal was whether the statute was constitutional; at the end of their brief, however, plaintiffs “submitted that the case should be remanded to the district court for consideration of proper relief with respect to restitution for members of the plaintiffs’ class.”7

¶12On June 19, 1974, the Supreme Court reversed on the merits, vacated the judgment of the district court, and remanded the case “to provide appellants an opportunity, consistent with this opinion, to establish their claim of eligibility as ‘children’ of the claimant under the Social Security Act.” 417 U.S. at 637-638, 94 5. Ct. at 2502. Neither the opinion of the Chief Justice for the Court, nor the dissent of Mr. Justice Rehnquist, made any reference to the class action issue. After the mandate issued, plaintiffs moved for the entry of an order reconvening the three-judge court, certifying the case as a class action, and granting relief to the named as well as the unnamed plaintiffs. The Secretary opposed that motion and filed his own motion for remand to the agency for a final determination of the eligibility of the named plaintiffs. *694After those motions had been briefed, the plaintiffs filed a separate motion for a ruling on the named plaintiffs’ right to relief without further administrative proceedings. Without addressing any other pending issue, on October 21, 1974, the single district judge remanded the case to the Secretary for final disposition within three weeks. The Secretary then found that plaintiffs were eligible for benefits and so advised the district court.

¶13On November 15, 1974, the single district judge entered two orders. In the first, he declared the relevant portion of the statute null and void and ordered the Secretary to pay benefits to the plaintiffs for the period after August 21, 1969, the date of their original application. In the second order, the court directed the Secretary to give notice of the resultant change in the statute

to all those applicants for Social Security benefits who have been denied benefits solely by reason of the provisions of the Act now declared unconstitutional, together with an explanation of how they should proceed in order to obtain the benefits[.]

¶14He further ordered the Secretary

to provide benefits to all those denied benefits since the date of the filing of this action solely by reason of that portion of the Act declared unconstitutional. Such benefits shall cover the period from which said persons would originally have been entitled but for the provisions invalidated herein, and payment of said benefits and ongoing monthly benefits to all eligible persons shall begin forthwith[.]

¶15In support of a motion for reconsideration, which was denied, and a motion for stay pending appeal, which was granted in part, the Secretary added certain factual matter to the record. There are about 7,000 members of the class; their aggregate claims amount to about $5,000,000. Although the Secretary challenges the court’s power to order retroactive relief to the unnamed members of the class, he represents that he is now paying them benefits for the period after the date of the Supreme Court decision on June 19, 1974, and that he has paid the named plaintiffs back to the date of their original application, as ordered by the district court. The amount in dispute therefore includes claims which were denied by the Secretary after the litigation commenced on June 15, 1971, and which accrued prior to June 19, 1974.

¶16II

¶17The Supreme Court’s recent decision in Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), reminds us to confront at the outset the question whether the district court had jurisdiction of the class aspects of this litigation.8

¶18 As the Court held in Salfi, 42 U.S.C. § 405(g) is the only statute authorizing the district court to grant relief from a denial of benefits under the Social Security Act. The language of the statute confers authority to affirm, modify or reverse a decision of the Secretary, but contains no suggestion that a reviewing court is empowered to enter an injunctive decree whose operation reaches beyond the particular applicants before the Court. 95 S.Ct. 2457, note 8. Nevertheless, as we have already noted, the Court’s acceptance of appellate jurisdiction in this very case was a holding, albeit unarticulated, that such jurisdiction does exist. Moreover, if the Court did not believe a class action could ever be maintained under the Social Security Act, there would have been no need to analyze the shortcomings of the particular class which Salfi represented. Unquestionably § 405(g) conferred jurisdiction on the district court to hear a timely claim by each individual member of the class; we think Rule 23 provides a procedure by which such power may be *695exercised in a single appropriate proceeding. Unnamed, as well as named, plaintiffs are “applicants before the court” in a properly maintained class action. •

¶19In the Salfi case, the Court held that § 405(g) did not provide jurisdiction over the claims of the unnamed members of the class because they had not satisfied one of the three statutory requirements for judicial review of an adverse decision by the Secretary,9 specifically, the requirement of a final decision by the Secretary. The complaint was deficient because it did not contain any allegation that those plaintiffs had “even filed an application with the Secretary, much less that he had rendered any decision, final or otherwise, review of which [was] sought.”

¶20In this case, although the complaint is somewhat ambiguous, the order of the district court overcomes this objection because it limits the class to “applicants” who have been denied benefits solely by reason of the invalid provisions of the Act. By definition, therefore, in this case the class is limited to persons satisfying the requirement of a final decision by the Secretary.10 It is, however, not

¶21*696equally clear that the unnamed plaintiffs in this case satisfied the second statutory requirement for judicial review, namely, the timely commencement of a civil action.

¶22Timeliness was not an issue in Salfi because the Secretary had waived any question of limitations. No such waiver can be found in this record.11 The question which is therefore presented is whether the timely filing of suit by the named plaintiffs satisfied the 60 day statute of limitations requirement for the entire class. The question appears to have been answered by American Pipe and Construction Co. v. Utah, 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713, but a possibly critical difference between that case and this must be identified.

¶23The holding in American Pipe was that the pendency of a complaint seeking relief for the class tolled the statute of limitations applicable to the claims of the unnamed plaintiffs for the period prior to the entry of the district court’s order refusing to certify the case as a class action. See 414 U.S. at 543-545, 552-553, 94 S.Ct. 756. Immediately after that order was entered, and before the statute ran, the unnamed parties had filed motions to intervene. The denial of those motions was reversed by the Supreme Court. No appeal was taken from the adverse ruling on the certification question itself.12 We cannot, therefore, be' positive that an appeal from such an order would continue to toll the statute.

¶24In this case we have no doubt that the filing of the complaint tolled the statute at least until the date of the three-judge district court decision on the merits. If that decision had expressly refused to certify the case as a class action, we think the tolling would have continued if the plaintiffs had appealed from such a ruling, but probably would not have continued if they had acquiesced. Therefore, if the district court’s failure to address the class action issue is construed as an adverse ruling, the plaintiffs’ failure to raise that issue on appeal to the Supreme Court would defeat the unnamed plaintiffs’ claims.

¶25On the other hand, if we construe the first decision on the merits as simply failing to rule upon the class issue, consistently with the analysis in American Pipe, the class claims continued to pend and the statute of limitations did not run.13 For three reasons we think this is *697the proper conclusion to reach in this case. First, one of the purposes of a statute of limitations is to afford a defendant fair notice of potential liability; the applications actually filed by the class members provided such notice to the Secretary. Second, since by hypothesis the plaintiffs’ claims were denied solely for an impermissible reason, we think it appropriate to resolve a close question in their favor. And third, the most realistic interpretation of the action of the three-judge court is that the majority simply saw no need to rule on the class issue in view of its holding on the merits.14

¶26We therefore hold that the district court acquired jurisdiction of the class action when the complaint was filed, and that the claims were not thereafter barred by limitations. The question we must now consider is whether the failure to comply with Rule 23 deprived the district court of the power to grant class relief.

¶27Ill

¶28Rule 23(c)(1) provides:

(1) As soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional, and may be altered or amended before the decision on the merits.

¶29Unlike other provisions of Rule 23 which differentiate between class actions brought under subparagraphs (b)(1) and (2) and those brought under subparagraph (b)(3), this requirement is applicable to all class actions.

¶30The rule unquestionably allows the district judge to exercise his discretion in deciding upon the earliest “practicable” time to determine whether the case is to be processed as a class action; but the text certainly implies, even if it does not state expressly, that such a decision should be made in advance of the ruling on the merits. For the explicit permission to alter or amend a certification order before decision on the merits plainly implies disapproval of such alteration or amendment thereafter. On the other hand, that degree of flexibility permitted before the merits are decided also indicates that in some cases the final certification need not be made until the moment the merits are decided.

¶31From an examination of the remainder of Rule 23, it is fair to infer that the timing of the certification may well be different in (b)(3) cases than in (b)(1) or (b)(2) cases. For in the (b)(3) situation it is imperative that the class members be identified early enough to enable notice to be sent to them which in turn will give them a meaningful opportunity to request exclusion from the class.15 Com-*698meriting on this provision, which in terms applies only to (b)(3) classes, the Court stated in American Pipe:

Not until the existence and limits of the class have been established and notice of membership has been sent does a class member have any duty to take note of the suit or to exercise any responsibility with respect to it in order to profit from the eventual outcome of the case. . . 414 U.S. at 552, 94 S.Ct. at 765.

¶32In that situation the class determination enables the parties to assess the contours of any potential settlement and identifies the parties who will be bound by the judgment regardless of how the case is later decided. It avoids the kind of “one-way intervention” that would be “strikingly unfair” in some cases16 and that the Supreme Court has plainly identified as a principal concern of the draftsmen of the amended rule.17

¶33But in the portions of the rule referring to (b)(1) and (b)(2) class actions, the notice requirement and the language describing the form of the judgment are significantly different. The rule does not mandate advance notice to the absent class members in all such cases; the rule does not provide that they be given an opportunity to request exclusion from the class;18 and the language of subparagraph (c)(3) would seem to permit the entry of a single order determining both the merits and the identity of the members of the class.19 Certainly there is nothing in the rule expressly depriving the district court of power to enter such an order.

¶34This consideration of the text of the rule leads us to three conclusions, none of which is decisive in this case. First, we are persuaded that the order ultimately entered by the district court on November 15, 1974, which purports simultaneously to define the class and to *699adjudicate the merits, would have been an acceptable judgment if it had been entered promptly after the action was commenced. Second, we do not think that mere delay in the entry of an otherwise acceptable order — assuming no resultant prejudice — would deprive the court of the power to enter such order even though the delay was inconsistent with the command to act “as soon as practicable.” Third, in this case when the three-judge district court entered its original order on the merits, it plainly did not comply with Rule 23. Not only did it fail to reach the class issue as soon as practicable, as required by subparagraph (c)(1), but its judgment also omitted the description of the class members as required by subparagraph (c)(3).20 These preliminary conclusions lead us to the question whether the court’s power simultaneously to decided the merits and to certify the case, as a class action survived the entry of the original erroneous judgment and the subsequent appeal.

¶35We have concluded that mere delay in making a class certification, even though contrary to the mandate to act as soon as practicable, does not deprive the district court of the power to enter an otherwise proper order. Nor do we believe that the entry of an erroneous judgment, subsequently vacated on appeal, necessarily terminated the court’s power to entertain a class action. In this case the delay was aggravated by the error, but, if we can confine inquiry to the question whether the court had power to grant class relief after the Supreme Court had decided the merits, we are satisfied that such power survived the violation of the rule. Cf. Sprogis v. United Air Lines, 444 F.2d 1194, 1201-1202 (7th Cir. 1971).21 We hold therefore that the district court did not exceed its jurisdiction by granting relief to the class on November 15, 1974. It may nevertheless have been reversible error to grant such relief at that time. We turn to that question.

¶36IV

¶37We start by noting that the prerequisites to a class action described in Rule 23(a) are clearly met in this case and that the allegations of the complaint satisfy the terms of subparagraph (b)(2). We have no doubt that a timely decision of the issue would have resulted in a certification that the case could be maintained as a class action.22

¶38It is also clear that reversal would almost certainly be required if this were a class action maintained under subdivision (b)(3) of the rule. We read the Supreme Court’s recent opinions in Eisen,23and *700American Pipe24 as rather plainly requiring that conclusion. But in Eisen the court carefully noted that it was there concerned only with the notice requirement applicable to class actions under subdivision (b)(3), a requirement which is inapplicable to class actions for injunctive or declaratory relief under subdivision (b)(2).25 That note implies that it may be appropriate to examine the reasons for the rule before interpreting it as mandating automatic reversal in a (b)(1) or (b)(2) case.

¶39The rule is largely concerned with the problem of one-way intervention. If unnamed members of the class may await the outcome on the merits before deciding whether to be excluded from the class, they will receive the benefits of a favorable judgment but not the burden of being bound by an unfavorable judgment. The precedential effect of the adverse judgment in the class action would be a hurdle to overcome, but not necessarily an insurmountable obstacle because the same issue might bt appraised differently in a different forum. Moreover, successive suits by different members of the class would defeat the purpose of the rule to eliminate the judicial waste involved in processing repetitious litigation of the same issue. There is also a risk that the failure to certify may result in a dismissal of an entire case if the claim of the named plaintiff should become moot.26 Finally, the failure to certify may make it impossible for the parties to conduct meaningful settlement negotiations because of uncertainty with respect to both the magnitude of the contingent liability and the burdens of going forward with a trial. Without doubt, orderly class action procedure mandates compliance with subparagraph (c)(1)-

¶40On the other hand, procedural error does not warrant reversal unless it affects the substantial rights of the parties. 28 U.S.C. § 2111. If our holding on the statute of limitations issue is correct, all of the unnamed members of the plaintiff class still retain their right to bring an independent action for the relief already ordered by the district court. And if we are correct in our holding that a class action may be brought to enforce claims arising under the Social Security Act, a reversal of the class aspect of the district court order would no doubt be followed immediately by a new class action to be brought by a different named plaintiff. At least there would be no *701legal objection to such an action. We know of no defense which the Secretary could raise in such a proceeding that was not available in the district court in this case after the remand by the Supreme Court, or which was not argued before us on this appeal. As a practical matter, it is difficult to identify any substantial rights of the parties that are likely to be affected by the difference between class relief in this case and class relief in a case that would presumably be filed tomorrow if this one were to be reversed. All that appears to be at stake is the possibility that the Secretary may benefit from a combination of past illegal acts and a possible future lack of diligence by potential new class representatives.

¶41The policies of avoiding multiple litigation, and providing an effective mechanism for the enforcement of relatively small claims, favor affirmance. On the other hand, the policy underlying the doctrine of mutuality of estoppel and the policy of encouraging the settlement of class actions favor strict adherence to Rule 23’s procedural requirements. But these policies carry less than their usual weight in this case.

¶42As the Supreme Court pointed out in Blonder-Tongue v. University Foundation, 402 U.S. 313, 320-327, 91 S.Ct. 1434, 28 L.Ed.2d 788, the doctrine of mutuality of estoppel has been modified significantly in recent years. Under the reasoning of Justice Traynor’s famous opinion in Bernhard v. The Bank of America National Trust and Savings, 9 Cal.2d 807, 122 P.2d 892 (1942), from which the Court quoted with approval in Blonder-Tongue, it is at least doubtful that the Secretary could relitigate the merits of the common question of law raised in this case even if it had not been brought as a class action. Certainly it would be futile for him to do so after the decision of the United States Supreme Court. From the standpoint of the defendant-assuming always that we have properly concluded that the statute of limitations is tolled and that a class action is maintainable — there seems to be little difference between a class determination after the ruling on the merits and a test case brought by an individual litigant followed promptly by a class action if the individual, should prevail.27

¶43If the district court had not committed error when it first addressed the merits, the Secretary would face the same judgment that he now asks us to reverse. Since the applications of the members of the class gave him notice of the magnitude of the contingent liability, and since he must have recognized the substantial character of the constitutional issue raised by plaintiffs,28 he has not been prejudiced by the fact that a correct judgment was not entered at an earlier date.

¶44From the standpoint of the plaintiffs, who have a clear entitlement to insurance benefits for which premiums have been paid by disabled wage earners, it seems to us that there would be greater injustice in permitting the Government to avoid its obligation to provide equal treatment to similarly situated beneficiaries because of a procedural error committed by the district court than in allowing absent members of the class to become formal parties to the judgment long after their doubtful posture in the case should have been clarified.

¶45Similarly, the rule’s purpose to facilitate settlement has little if any application to this case. For the Secretary had an unquestioned obligation to apply the statutory exclusion until such time as it had been authoritatively held unconstitu*702tional. Since the issue on the merits was not one subject to compromise, the concern of Rule 23 with settlement should not control our decision.

¶46In. sum, although we recognize the salutory policy considerations underlying subparagraph (c)(1) and the clear admonition by the Supreme Court to enforce the rule in cases maintained under subparagraph (b)(3) and, no doubt, in most cases maintained under (b)(1) or (b)(2), as well, we are persuaded that the rule contemplates some flexibility in its enforcement and that in this case the district court class determination, although untimely, was not erroneous.

¶47V

¶48Two questions remain. The Secretary argues (1) that the doctrine of sovereign immunity precludes recovery, and (2) that retroactive relief may not be awarded for the period prior to the date of the Supreme Court’s decision holding the statutory exclusion unconstitutional. We think both these arguments are adequately met by § 405(g) of the Act which authorizes each member of the plaintiff class to commence a civil action to recover benefits wrongfully withheld. That section operates as a waiver of sovereign immunity, and since we have held that there has been a timely assertion of the claims of the unnamed, as well as the named, plaintiffs, they are entitled to the benefit of the rule first announced by the Supreme Court in this litigation.

¶49The Secretary nevertheless argues that, on the basis of the test set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296, the Supreme Court’s opinion should have only a prospective application.29

¶50In Chevron Oil, the Court considered whether its earlier decision in Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360, which held that the Outer Continental Shelf Lands Act does not make admiralty law applicable to actions for personal injuries suffered on off-shore platforms, should be applied retroactively so as to bar Huson’s claims. The Court set forth the following test:

In our cases dealing with the nonretroactivity question, we have generally considered three separate factors. First, the decision to be applied non-retroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, see ie. g., Hanover Shoe, Inc. v. United Shoe Machinery Corp., supra, 392 U.S. [481], at 496, 88 S.Ct. [2224], at 2233 [20 L.Ed.2d 1231], or by deciding an issue of first impression whose resolution was not clearly foreshadowed, see, e. g., Allen v. State Board of Elections, supra, 393 U.S. [544], at 572, 89 S.Ct. [817], at 835 [22 L.Ed.2d 1]. Second, it has been stressed that “we must weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation.” Linkletter v. Walker, supra, 381 U.S. [618], at 629, 85 S.Ct. [1731], at 1738 [14 L.Ed.2d 601], Finally, we have weighed the inequity imposed by retroactive application, for “[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the ‘injustice or hardship’ by a holding of nonretroactivity.” Cipriano v. City of Houma, supra, 395 U.S. [701], at 706, 89 S.Ct. [1897], at 1900 [23 L.Ed.2d 647].

¶51404 U.S. at 106-107, 92 S.Ct. at 355.

¶52In Chevron Oil, the Court found that the Rodrigue decision was not only a case of first impression but that it also in fact had overruled clear past precedent. The Court then looked to the purpose which underlay the absorption of state law as federal law in the Lands *703Act, the desire “to aid injured employees by affording them comprehensive and familiar remedies,” and concluded that a retroactive application of Rodrigue would defeat this purpose. Finally, the Court concluded that a retroactive application would produce “substantial inequitable results” in that it would deny Huson his right to a day in court. 404 U.S. at 108, 92 S.Ct. 349.

¶53Applying these factors to the instant case, however, compels us to reach the opposite conclusion; we hold that the class members30 are entitled to the retroactive application of the Supreme Court’s decision.

¶54The Secretary argues correctly that the Jimenez decision established a new principle of law insofar as it was the first Supreme Court ruling on the constitutionality of § 216(h)(3)(B) of the Social Security Act. Prior to that time, although there was substantial disagreement among the lower courts on the validity of the Act’s provisions dealing with illegitimate children,31 the Secretary was bound to administer the Act as written. Thus, the Secretary was required to act under the assumption that this portion was constitutional until ordered to comply with a contrary decision.

¶55Although the first of the Chevron factors suggests a nonretroactive result, the second and third overwhelmingly indicate the correctness of the district court’s award. The Supreme Court’s decision in Jimenez established that the discrimination in § 216(h)(3)(B) against illegitimate children born after the disability of their parent was constitutionally repugnant. Surely a retrospective application of this decision would only further and not retard its operation. For, the Jimenez decision holds, these children have been wrongfully denied these insurance benefits from the date of their applications.

¶56Similarly, we find that the purposes behind the entire children’s insurance benefits program support the award of retroactive benefits in this case. As the Court explained in Jimenez, “the purpose of the contested statutory scheme is to provide support for dependents of a wage earner who has lost his earning power . . ..” 417 U.S. at 633, 94 S.Ct. at 2500. The denial of these benefits by the Secretary necessarily required these plaintiffs and their family to consume other assets in order to attempt to maintain their standard of living. During his working career, plaintiffs’ father paid a portion of his wages into the Social Security program with the reasonable expectation that, if he should ever become disabled, his dependents would receive these insurance benefits. Surely the retrospective payment of such benefits furthers, rather than impedes, the effectuation of the purposes of the statute.

¶57The provisions of the Act itself support our conclusion that retroactive payments further the statutory purpose. For § 204 of the Act, 42 U.S.C. § 404,32/ provides a specific authorization for the-' recovery of underpayments; there is no *704requirement that such denials have been willful; any mistaken denial will give rise to retroactive recovery. Thus, Congress intended that Social Security beneficiaries receive the full and correct amount of their entitlement, even if this requires payments to be made long after the period of entitlement.33

¶58Finally, in applying the third Chevron factor, it is important to note that it is the Secretary who must convince us that a retroactive application of Jimenez would produce “substantial inequitable results.” Thus, unless the balance of the equities clearly tips in the Secretary’s favor, the general rule of retroactivity must be applied. The Secretary has not convinced us that such inequities will result from such an application of Jimenez. On the one hand we have the substantial equities in favor of paying the benefits to the children who were admittedly entitled to them but for the unconstitutional provision in the statute. On the other, the Secretary argues, making such lump sum payments might affect the ability of the Trust Fund to make current payments to individuals who are now eligible for benefits. We find this argument unconvincing. As the Supreme Court said in Jimenez, “[TJhere is no evidence supporting the contention that to allow illegitimates in the classification of appellants to receive benefits would significantly impair the federal Social Security trust fund and necessitate a reduction in the scope of persons benefited by the Act.” 417 U.S. at 633, 94 S.Ct. at 2503.34

¶59Thus, applying the three factors set forth in Chevron Oil, we conclude that the district court did not err in ordering the Secretary to make payments to the class members back to the date of the filing of their original applications for benefits.35 The judgment of the district court is, therefore,

¶60Affirmed.