Court Opinion

ID: 9468489
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:16:13.040826+00
Date Added: 2024-06-11T17:40:53.448749
License: Public Domain

SWYGERT, Circuit Judge,
dissenting.
This is an appeal from an order of the district court vacating its previous approval of a consent decree pursuant to Fed.R. Civ.P. 60(b), on grounds of voidness and misrepresentation. I would reverse and remand the case for further proceedings consistent with this opinion.
I
This complaint was initiated by nine named plaintiffs on behalf of themselves and other similarly situated individuals1 alleging that the Community Services Administration (CSA) unlawfully administered the 1979 Crisis Intervention Program (CIP), which provided for emergency assistance in payment of fuel bills to poor and elderly people pursuant to section 222(a)(5) of the Economic Opportunity Act of 1964, 42 U.S.C. § 2809(a)(5), as amended by Pub.L. No.95-568, 92 Stat. 2425 (1978). The complaint sought mandamus and injunctive and declaratory relief. A regulation promulgated by CSA required applicants to produce a notice to disconnect, 45 C.F.R. § 1061.53-3(c), as amended by 44 Fed.Reg. 4481 (1979); the district court held the regulation unlawful because it was contrary to the statute and congressional intent.2
On September 26, 1979, plaintiffs filed motions for a temporary restraining order and a preliminary injunction to restrain CSA from returning unobligated funds from the 1979 CIP to the Treasury.3 The district court granted the temporary restraining order, which was continued for ten days and thereafter indefinitely by agreement of the parties.
Plaintiffs then moved for partial summary judgment. At a hearing on January 4, 1980, Judge Grady indicated that he intended to grant the motion, and that the next step would be to certify a class. Defendants’ counsel then suggested that the parties try to reach a settlement, and the case was continued for that purpose.
On April 25, 1980, the parties presented the district court with a copy of the final settlement, which was the product of approximately three months of negotiations.4 Counsel for both parties recommended that the district court approve the settlement, which provided that the named plaintiffs each receive $250.00 and that the remaining unspent funds from the 1979 CIP be used to fund other CSA programs that were designed to reduce the impact of high energy costs upon the poor and elderly.5 The district judge reviewed the proposed settlement, then signed and entered the consent decree.
*684On August 20,1980, the Wall Street Journal published an article in which the settlement order entered in this case was criticized as collusive and contrary to congressional intent. On September 16, 1980, Senator Paul Laxalt wrote to defendant Rios, stating that “our adversary system of justice may have been compromised by the settlement in the case.” Senator Laxalt ordered CSA to stop disbursing funds pursuant to the consent decree until he had an opportunity to look into the matter further. The letter indicates that a copy was sent to Judge Grady.
According to its motion to intervene, Capital Legal Foundation, acting on behalf of Senators Laxalt, Orin Hatch, and Edward Zorinsky “pursued its inquiry into the propriety of the Order with Judge John F. Grady’s office.” Judge Grady, acting sua sponte, then scheduled a status hearing for October 6, 1980 because “[i]t has come to our attention that questions have been raised as to whether the [consent decree] in this case dated April 25, 1980, may provide for the funding of programs which Congress did not intend to be funded in this matter.” Counsel for both parties were requested to appear, and Capital was given notice of the hearing.6
At the October 6 status hearing, Capital filed a motion to intervene and a motion to vacate the consent decree. The district judge denied the motion to intervene, but stated that he was “inclined to vacate the judgment order”; counsel for CSA agreed to halt further disbursement of funds while the parties briefed the question of the propriety of vacating the judgment.
On October 29, 1980, the district court entered an order vacating the consent decree pursuant to Rule 60(b)7 on grounds of voidness and misrepresentation. The court concluded that since the ease between named plaintiffs and defendants was settled by payment to plaintiffs of all that they were entitled to, and since no class was certified, then no case or controversy remained and the court therefore had no jurisdiction to approve the settlement. The court also questioned whether the court had the authority to enter the settlement order, and whether the expenditures provided for in the consent decree were consistent with congressional intent. The court further stated that counsel for both parties misled the judge by not disclosing relevant information regarding congressional intent and by not informing the court that without a court order the statute required that any unspent CIP funds be returned to the Treasury.
Plaintiffs appeal from the district court’s order of October 29 vacating the consent decree. Plaintiffs contend on appeal that the April 25 judgment was not void, that the parties did not mislead the court, that ex parte communication between Capital and Judge Grady’s chambers violated due process and separation of powers, and that the trial court erred in denying class certification.
II
A. Jurisdiction
On October 17, 1979, plaintiffs filed a motion for class certification. The district court approved the proposed consent decree, which compromised the claims of both named plaintiffs and absent putative class members, on April 25, 1980, prior to taking any action on the motion to certify. Then on October 29, 1980, the court entered an order vacating the settlement approval of April 25 on grounds of voidness and misrep*685resentation under rule 60(b). In that order, the motion to certify was denied. The court reasoned that since no class had been certified, the only parties to the dispute were the named plaintiffs and defendants, so when the named plaintiffs settled their claims, no case or controversy existed among any of the parties. I disagree.8
The Fourth Circuit held in a recent case that “before a District Court may consider or approve a voluntary pre-certification settlement of an action begun as a class action, it is not compelled to undertake the laborious process of arriving at a certification determination under 23(c)(1) . . . . ” Shelton v. Pargo, Inc., 582 F.2d 1298, 1314 (4th Cir. 1978). The court stated, however, that prior to approving a settlement, the trial court must hold a hearing to determine what claims are being settled, and whether absent putative class members would be prejudiced by the proposed settlement. “If, as a result of such hearing, the court is clearly satisfied that there has been no abuse of the class action device and no prejudice to absent putative class members, it may approve the settlement and dismissal without going through with a certification determination ... . ” Id.9
I would therefore reverse the trial court’s determination that the court lacked jurisdiction to approve the settlement compromising the claims of both the named plaintiffs and absent putative class members. Although I recognize that in most cases the class certification issue should be addressed by the district court prior to approval of a settlement and dismissal, see Susman v. Lincoln American Corp., 587 F.2d 866, 870 (7th Cir. 1978), the absence of a certification determination does not deprive the court of jurisdiction to approve a proposed settlement in a putative class action. Further, not only does the court have jurisdiction to approve a proposed settlement prior to certification, it has a duty to do so when the claims of the putative class are being compromised. See Wallican v. Waterloo Community School District, 80 F.R.D. 492, 493 (N.D.Iowa 1978) (“Rule 23’s general purpose and its underlying policies .. . indicate that a . . . dismissal should be subject to court review . . . even prior to certification”). See also McArthur v. Southern Airways, Inc., 556 F.2d 298, 302-03 (5th Cir. 1977); Magana v. Platzer Shipyard, Inc., 74 F.R.D. 61, 66 (S.D.Tex.1977).
B. Notice and Hearing
The majority concludes that the settlement violated the due process clause because notice of the proposed settlement should have been given to absent putative class members. Fed.R.Civ.P. 23(e) provides:
A class action shall not be dismissed or compromised without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.
The notice requirement of Rule 23(e) does not apply when certification has been denied. Pearson v. Ecological Science Corp., 522 F.2d 171, 177 (5th Cir. 1978), cert. denied, 425 U.S. 912, 96 S.Ct. 1508, 47 L.Ed.2d 762 (1976). Most courts to consider the issue, however, have held that the notice requirement does apply when parties propose to dismiss or settle prior to a decision on the certification motion. E. g., McAr*686thur v. Southern Airways, Inc., 556 F.2d 298, 303 (5th Cir. 1977); Wallican v. Waterloo Community School District, 80 F.R.D. 492, 493 (N.D.Iowa 1978); Magana v. Platzer Shipyard, Inc., 74 F.R.D. 61, 66 (S.D.Tex. 1977); Duncan v. Goodyear Tire & Rubber Co., 66 F.R.D. 615, 616 (E.D.Wis.1975); Rotzenburg v. Neenah Joint School District, 64 F.R.D. 181, 182 (E.D.Wis.1974); Muntz v. Ohio Screw Products, 61 F.R.D. 396, 398 (N.D.Ohio 1973); Rothman v. Gould, 52 F.R.D. 494, 496 (S.D.N.Y.1971); Yaffe v. Detroit Steel Corp., 50 F.R.D. 481, 483 (N.D.Ill.1970); Philadelphia Electric Co. v. Anaconda American Brass Co., 42 F.R.D. 324, 328 (E.D.Pa.1967). The court in Shelton v. Pargo, supra, held that “in the pre-certification settlement of an action begun as a class action, a District Court is not automatically obligated to order notice to all putative class members under the terms of 23(e),” 582 F.2d at 1315, but may, “in its discretion, if it concludes that the ‘fair conduct of the action’ requires it, order notice to absent putative class members,” id. at 1314.
I agree with the majority’s holding that while 23(e) notice is not always required when a district court is considering pre-certification settlement, principles of due process and Rule 23(e) compel such notice in the case at bar. Here, the consent decree compromised the claims of both the named plaintiffs and absent putative class members. See Philadelphia Electric Co., supra, 42 F.R.D. at 327.10 Although putative class members may not have been technically bound by the settlement, their interests were affected by it as a practical matter because the settlement exhausted the unspent funds from the 1979 CIP. They should therefore be given notice and an opportunity to object.
The type of notice to be given is a matter left to the discretion of the district court, “subject only to the broad ‘reasonableness’ standards imposed by due process.” Grunin v. International House of Pancakes, 513 F.2d 114, 121 (8th Cir.), cert. denied, 423 U.S. 864, 96 S.Ct. 124, 46 L.Ed.2d 93 (1975). Due process requires that the notice given be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). Without expressing an opinion as to what type of notice would be required in the instant case, I note that while the Supreme Court has held that “individual notice must be provided to those class members who are identifiable through reasonable effort,” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 175, 94 S.Ct. 2140, 2151, 40 L.Ed.2d 732 (1974), it has also stated that “[tjhis Court has not hesitated to approve of resort to publication ... in cases where it is not reasonably possible or practicable to give more adequate warning.” Mullane, supra, 339 U.S. at 317, 70 S.Ct. at 658.11
C. Certification
Although I would hold that certification prior to approval of a proposed settlement is not a jurisdictional prerequisite, I also believe that the district court’s denial of certification on October 29 was an abuse of discretion. I would therefore remand the case to the district court for reconsideration of the certification issue.
While “[t]he trial court has broad discretion in determining whether to allow a class action to be maintained,” In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1129 n. 38 (7th Cir. 1979), cert. denied, 444 U.S. 870, 100 S.Ct. *687146, 62 L.Ed.2d 95 (1980), that discretion is limited by the principle that “Rule 23 must be liberally interpreted.” King v. Kansas City Southern Industries, Inc., 519 F.2d 20, 25 (7th Cir. 1975). The policy that “favor[s] maintenance of class actions ... is especially strong in instances where denial of class status would effectively terminate further litigation . . . . ” Id. at 26.
I believe that the putative class defined in the complaint, see note 1 supra, met all of the prerequisites for certification imposed by Rule 23(a) and (b)(2).12 As defendants conceded both in the trial court and in their brief on this appeal, the requirements of Fed.R.Civ.P. 23(a) are met:
(1) since CIP was a nationwide program designed to help thousands of people, the persons affected by the challenged regulations were too numerous to make their joinder practicable;
(2) the question whether the regulations were valid was common to all putative class members;
(3) the claims of the plaintiffs-applicants were typical of the claims of the putative class members; and
(4) the representative parties appeared willing to pursue the litigation vigorously-
In addition, defendants stated that “the putative class [meets] the requirements of Rule 23(b)(2), because CSA applied its regulations to the putative class generally. If these regulations were invalid, CSA would have an obligation to the entire putative class to remedy its error.” 13
Policy considerations weigh heavily in favor of certification in the case at bar. If classwide relief is denied, it is highly unlikely that the persons injured by CSA’s illegal regulation will receive any relief. Because each putative class member would be entitled to a maximum of only $250.00, individual suits by those persons would be impractical. Further, if the judgment vacating the consent decree is affirmed, the unspent funds from the 1979 CIP will be returned to the Treasury, thus exhausting the funds *688which would have been available to provide the relief necessitated by the invalid regulation.
The majority notes that there is an argument that the inclusion in the class of persons “discouraged [by the invalid regulation] from applying for assistance” renders the class too ill-defined for certification because identification of class members depends on each individual’s state of mind, and cites a line of cases, holding that a class including “chilled” applicants cannot be certified, e. g., De Bremaecker v. Short, 433 F.2d 733, 734 (5th Cir. 1970); Capaci v. Katz & Besthoff, Inc., 72 F.R.D. 71, 78 (E.D.La. 1976); Miller v. Krawczyk, 414 F.Supp. 998, 1000 (E.D.Wis.1976). There is, however, a second line of authority that supports the proposition that a class may include “chilled” plaintiffs. Yaffe v. Powers, 454 F.2d 1362, 1365-66 (1st Cir. 1972) (class maintainable under Rule 23(b)(2)); Carpenter v. Davis, 424 F.2d 257, 260 (5th Cir. 1970).
The majority lists several problems that it believes would be encountered by the district court in attempting to identify class members in the instant case. First, the majority notes that identifying those who qualify for CIP aid “by no means is an easy or inexpensive task,” see p. 669 supra. That is hardly an insurmountable obstacle, because CSA in administering the program had to identify applicants who qualified for aid.
The majority characterizes as “Sisyphean” the job of identifying those qualified persons who were discouraged from applying for assistance. Although I agree with the majority that such a procedure would be a burden on the court, I believe that in certain cases considerations of justice require courts to undertake those tasks;14 I would find this to be such a case. Further, the problem could be alleviated by giving notice by publication, see p. 686, supra, and by approving the settlement decree which provides for a “fluid” recovery, see maj. op. at 675.15
The majority points out that Judge Grady was aware of the problem of identifying class members in the case at bar. Nevertheless, in Grieg v. Olivarez, No. 78 C 1646 (Sept. 1, 1978), which concerned the Emergency Energy Assistance Program, the predecessor to the CIP, Judge Grady certified a class very similar to the one described in the complaint in this case:
(a) The sub-class for all low income persons otherwise eligible for participation in the EEAP who were denied EEAP assistance without written notice or opportunity for written appeal, or were denied the opportunity to submit written applications.
(b) The sub-class of all low income persons aged 60 and over living alone in households of no more than two persons whose household income is between 125 per cent and 150 per cent of CSA Poverty Guidelines and who were otherwise eligible for EEAP assistance but were denied such assistance due to income or who were discouraged from applying.
Id., mem. op. at 12 (emphasis added). The problem of identifying “chilled” applicants was the same in both cases, yet the district court granted certification in Grieg but denied it here.
*689Not only would I hold that the denial of certification was an abuse of discretion on the merits, I also believe that the procedure followed by the district court in determining the certification question was inadequate. No hearing was ever held on the issue of certification, and only defendant briefed the question in the district court. “Maintainability [of a class action] may be determined by the court on the pleadings, if sufficient facts are set forth, but ordinarily the determination should be predicated on more information than the pleadings will provide.” Weathers v. Peters Realty Corp., 499 F.2d 1197, 1200 (6th Cir. 1974) (citation omitted). Although an evidentiary hearing on class certification is not required, it is certainly favored and would have been valuable in this case, given the close questions of manageability and identification at issue. See Jones v. Diamond, 519 F.2d 1090, 1098 (5th Cir. 1975); Huff v. N. D. Cass Co., 485 F.2d 710, 713 (5th Cir. 1973).
Ill
The district court stated in its October 29 order that “there was no lawful basis for the [settlement] order,” and that therefore “the order [was] in reality an unjustified substitution of judicial fiat for legislative action in regard to the disposition of the money,” and that the relief granted in the consent decree was “only arguably related” to congressional intent.16 I disagree with the district court, and would find that clear statutory authority to enter the consent decree exists and that the expenditures provided for in the consent decree were consistent with congressional purpose.
A. Statutory Authority
31 U.S.C. § 200(d) provides:
No appropriation or fund which is limited for obligation purposes to a definite period of time shall be available for expenditure after the expiration of such period except for liquidation of amounts obligated in accord with subsection (a) of this section. ...
Subsection (a) provides that funds are obligated by, inter alia, “a liability which may result from pending litigation brought under authority of law.” 31 U.S.C. § 200(a)(6) (1976). Further, “a District Court is enabled ... to order funds to be held available, beyond a statutory lapse, if equity so requires.” National Association of Neighborhood Health Centers, Inc. v. Mathews, 551 F.2d 321, 338 (D.C.Cir.1976). Accord, National Association of Regional Councils v. Costle, 564 F.2d 583, 588 (D.C.Cir.1977).
In Neighborhood Health Centers, supra, the court of appeals for the District of Columbia Circuit considered issues similar to those presented in the case at bar. Plaintiffs’ complaint alleged that the Department of Health, Education and Welfare illegally administered the 1970 amendments to the Hill-Burton Act. The district court found certain violations that basically stemmed from HEW’s approval of grants to some state plans that did not conform with the statute. The district court ordered HEW to recover the funds illegally granted. HEW then promulgated a remedial plan, which provided that states had to give priority to those applicants who have been denied funds under the previous unlawful administration of the statute. Plaintiffs objected to some aspects of the remedial plan, but the district court overruled these objections. The court of appeals affirmed, and directed HEW to continue operation of the remedial plan. 551 F.2d at 339.
In the case at bar, I agree with the majority’s conclusion, see p. 662 n.15 supra, that the district court had the authority to enter the temporary restraining order preventing the return of unobligated funds from the 1979 CIP to the Treasury. I would further hold that the court had equitable power to approve the settlement to remedy CSA’s unlawful administration of the 1979 CIP. I therefore believe that the district court erred in vacating the April 25 settlement order on the ground that there was no lawful basis for the court’s entry of that order.
*690B. Congressional Intent
The district court stated in its October 29 order that “the various expenditures required by the consent order were only arguably related to the Congressional purpose.” I believe that the relief provided for in the consent decree is consistent with congressional intent, which should be broadly construed in the context of remedying past unlawful administration of the appropriated funds.
When Congress appropriated the money for CSA for fiscal year 1979, Pub.L. No. 95-824, 92 Stat. 1603 (1978), it did not place any limitations on CSA’s administration of the funds beyond the restrictions contained in the Economic Opportunity Act as amended. The provision of the Act relevant to the program at issue here provides:
A program to be known as “Emergency Energy Conservation Services” designed to enable low-income individuals and families, including the elderly and the near poor, to participate in energy conservation programs designed to lessen the impact of the high cost of energy on such individuals and families and to reduce individual and family energy consumption. The Director is authorized to provide financial and other assistance for programs and activities, including, but not limited to, an energy conservation and education program; winterization of old or substandard dwellings, improved space conditioning, and insulation; emergency loans, grants, and revolving funds to install energy conservation technologies and to deal with increased housing expenses relating to the energy crisis; alternative fuel supplies, special fuel voucher or stamp programs; alternative transportation activities designed to save fuel and assure continued access to training, education, and employment; appropriate outreach efforts; furnishing personnel to act as coordinators, providing legal or technical assistance, or otherwise representing the interests of the poor in efforts relating to the energy crisis; nutrition, health, and other supportive services in emergency cases; and evaluation of programs and activities under this paragraph.
42 U.S.C. § 2809(a)(5) (Supp. Ill 1979). This broad grant of authority clearly encompasses the type of expenditures required by the consent decree.
In the Supplemental Appropriations Act of 1978, Pub.L. No. 95-240, 92 Stat. 112 (1977), Congress appropriated $200,000,000 for the “Community Services Program” under CSA. A report from the Senate Appropriations Committee stated:
The Committee recommends $200,000,-000 for grants to low-income households to alleviate the burden of extraordinarily high residential heating costs during a winter emergency.
* * # * * *
The Committee directs that these funds be used only on a contingency basis when there is a clear and demonstrated energy emergency.
S.Rep. No. 95-564, 95th Cong., 1st Sess. (1977). Such statements in congressional reports, however, are not legally binding on government agencies, according to an opinion of the Comptroller General:
Congress has recognized that in most instances it is desirable to maintain executive flexibility to shift around funds within a particularly lump-sum appropriation account so that agencies can make necessary adjustments for “unforeseen developments, changing requirements, incorrect price estimates, wage-rate adjustments, changes in the international situation and legislation enacted subsequent to appropriations.”
Accordingly, it is our view that when Congress merely appropriates lump sum amounts without statutorily restricting what can be done with those funds, a clear inference arises that it does not intend to impose legally binding restrictions, and indicia in committee reports and other legislative history as to how the funds should or are expected to be spent do not establish any legal requirements on Federal agencies.
55 Comp.Gen. 318, 318-19 (1975) (emphasis added). See also American Community *691Builders, Inc. v. Commissioner, 301 F.2d 7, 13 (7th Cir. 1962) (“Resort to legislative history has a place in judicial construction of statutes only when resort thereto is necessary to resolve a patent ambiguity in the language of the statute.”); United States v. United States Steel Corp., 482 F.2d 439 (7th Cir.) cert. denied, 414 U.S. 909, 94 S.Ct. 229, 38 L.Ed.2d 147 (1973). No statements indicating an intent to restrict CSA’s use of funds for “crisis” situations were contained in the bill appropriating funds for CSA for fiscal year 1979, Pub.L. No. 95-482, 92 Stat. 1603 (1978), nor in the congressional reports accompanying that bill.17 I therefore believe that the expenditures provided for in the consent decree are consistent with the congressional purpose as expressed in 42 U.S.C. § 2809(a)(5) (Supp. Ill 1979).
IV
Another ground upon which the district court relied in vacating the consent decree pursuant to Rule 60(b) was misrepresentation. In its order of October 29, the court stated:
I believe that the parties, both by what they said and by what they did, misled me both as to the facts and the law. I believe they were aware, as I was not, that the various expenditures required by (he consent order were only arguably related to the Congressional purpose and that the order was a bootstraps method of accomplishing those expenditures. Counsel imposed upon the court by failing to make a full, disclosure of all relevant considerations.
Simer v. Olivarez, No. 79-C-3960, mem. op. at 9 (Oct. 29, 1980). The court also said that counsel failed to inform the court that without a court order, the unobligated funds had to be returned to the Treasury. I agree with the majority’s holding that the record before us does not support the district court’s conclusion.
V
Plaintiffs contend that ex parte communication between Capital Legal Foundation, acting on behalf of Senators Laxalt, Hatch, and Zorinsky, violated due process. They further contend that ex parte contacts between the Senators and the court, and between the Senators and Rios, the director of CSA, violated the principle of separation of powers.
A. Due Process
Ex parte communication between the Senators and the district court occurred first when on September 16, 1980, Senator Laxalt wrote a letter to Rios expressing the concern that “our adversary system of justice may have been compromised by the settlement in the case,” and asking Rios to stop further disbursement of the funds by CSA. The face of that letter indicates that a copy was sent to Judge Grady, but counsel for plaintiffs did not learn of the letter until after the consent decree was vacated. Then Capital, according to their motion to intervene in this appeal, “pursued its inquiry into the propriety of the Order with Judge John F. Grady’s office.” Capital further stated that Judge Grady scheduled the status hearing of October 6, 1980 “[a]s a result of Capital’s inquiries.” Plaintiffs’ counsel were not notified that counsel for Capital would appear at the status hearing, nor were they served prior to hearing with the motions 18 filed by Capital on the day of the hearing.19
*692“[E]x parte communications shadow the impartiality, or at least the appearance of impartiality, of any judicial proceeding” and “may, in some circumstances, constitute a deprivation of due process of law.” Grieco v. Meachum, 533 F.2d 713, 719 (1st Cir. 1976). The ex parte communication in the case at bar was highly improper, and it appears likely that the district judge would not have called the status hearing but for the concerns raised by Capital in the ex parte communications. Nevertheless, “[i]n the absence of any showing that the [ex parte communications] infected the fact-finder’s determination of the issues at trial, . . . the challenged practice [does] not violate . . . due process of law.” Grieco, supra, 533 F.2d at 719.
The majority concludes that, because plaintiffs had an opportunity to present their views on Capital’s motion to vacate, the litigants were not prejudiced by the contacts. Although the majority characterized the ex parte contacts as “extremely troubling,” they merely admonished Capital to improve its conduct of litigation in the future.
I believe that Capital’s ex parte contacts and failure to serve all parties with copies of motions were blatantly inappropriate and violated principles of due process. It is axiomatic that the fair conduct of litigation requires that no party (or prospective intervenor) have contacts regarding the merits of a pending case with the judge or his staff absent notice to the other litigants and an opportunity for them to appear and be heard. The parties in this case were not afforded such an opportunity until well after a copy of Senator Laxalt’s letter had gone to Judge Grady and Capital had had contacts with the judge’s staff.
My examination of the record leads me to conclude that these ex parte contacts were prejudicial. First, as I noted previously, it is doubtful that the district judge would have reopened the case in the absence of those contacts. Second, plaintiffs’ counsel had no notice that Capital would appear at the hearing, nor did they have copies of Capital’s motions to intervene and to vacate the settlement. Although plaintiffs had an opportunity to respond to those motions later in writing, the lack of notice prior to the hearing surely put them at some disadvantage in their arguments at the status hearing. Because these ex parte contacts were obviously unethical, I would find that the due process clause was violated; therefore, I would find that the order vacating the settlement decree is void and I would remand the case for reconsideration of certification and notice.
B. Separation of Powers
As plaintiffs note, the Supreme Court has enunciated a threshold test for determining when an act of one branch of Government violates the doctrine of separation of powers:
[I]n determining whether [an act of one branch] disrupts the proper balance between the coordinate branches, the proper inquiry focuses on the extent to which it prevents [another branch] from accomplishing its constitutionally assigned functions.
Nixon v. Administrator of General Services, 433 U.S. 425, 443, 97 S.Ct. 2777, 2790, 53 L.Ed.2d 867 (1977). As noted previously, while I would characterize the ex parte communication here, especially the letter from Senator Laxalt and Capital’s contacts with Judge Grady’s chambers prior to the October status hearing, as clearly improper, I cannot conclude that those contacts hindered or prevented the district court from carrying out its duties. I would therefore hold that no violation of the principle of separation of powers occurred. Nevertheless, I must state that as a general principle, ex parte communication from members of Congress to the judiciary regarding legislation at issue in pending litigation not only endangers the independence of the judiciary *693but also has a tendency to undermine the fundamental doctrine of separation of powers.
I would also find that the communication between Senator Laxalt and defendant Rios did not violate the separation-of-powers doctrine. Defendant Rios, as director of CSA, had counsel to advise him regarding this case. I therefore think it unlikely that the letter from Senator Laxalt hindered him from performing his legal duties.
For the reasons stated, I would reverse the district court’s order vacating the consent decree and remand the case for further proceedings.

. The class was defined in the complaint as: all low income persons otherwise eligible for participation in the 1979 CIP who were denied 1979 CIP assistance by the federal defendants or discouraged from applying for assistance because they were not delinquent in the payment of their fuel bills for 1979.

. The Economic Opportunity Amendments of 1978, § 5(d), 92 Stat. 2427 (1978), provided that “[e]ligibility for any of the programs authorized under this section shall not be based solely on delinquency in payment of fuel bills.” The Conference Report on the amendments contained the same statement, H.R.Rep.No.95-1766, 95th Cong., 2d Sess. 3 (1978).

. The law required CSA to return unspent funds from the 1979 program to the Treasury by September 30, 1979. Pub.L.No.95 — 482, 92 Stat. 1604 (1978).

. Plaintiffs’ counsel initially raised two possible means of resolving the case: either reopening the 1979 CIP or putting the 1979 funds into the 1980 program. Defendants opposed both alternatives, and suggested instead that the estimated $18 million left over from the 1979 program be used to fund other CSA programs that were directed toward reducing the impact of high energy costs upon the poor and the elderly.

. The programs to be funded under the terms of the settlement included a weatherization program to provide weather stripping to homes of low income families, a hypothermia program to provide counseling and clothing to senior citizens at risk from hypothermia, a solarization program to install solar collectors in the homes of low income families, and advocacy programs to provide legal assistance to low income persons involved in disputes with utility companies.

. Plaintiffs’ attorneys state that they were not notified that counsel for Capital would appear, nor were they served with any of the papers filed by Capital in court on the day of the hearing.

. Rule 60(b) provides in relevant part:
On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: . . . (3) fraud .... misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; ... or (6) any other reason justifying relief from the operation of the judgment.. . . This rule does not limit the power of a court to ... set aside a judgment for fraud upon the court. . . .

. See maj. op., p. 668 n.23 supra.

. “[W]hatever uncertainties exist as to the precise status of an action brought as a class action, during the interim between filing and the 23(c)(1) determination by the court, it must be assumed to be a class action for purposes of dismissal or compromise under 23(e) unless and until a contrary determination is made.” Philadelphia Electric Co. v. Anaconda American Brass Co., 42 F.R.D. 324, 326 (E.D.Pa. 1967). Accord, McArthur v. Southern Airways, Inc., 556 F.2d 298, 302 (5th Cir. 1977); Kahan v. Rosentiel, 424 F.2d 161, 169 (3d Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970); Yaffe v. Detroit Steel Corp., 50 F.R.D. 481, 483 (N.D.Ill.1970). See also 3B Moore’s Federal Practice H 23.50, at 23 — 424. Cf. Susman v. Lincoln American Corp., 587 F.2d 866, 870 (7th Cir. 1978) (“when a motion for class certification has been pursued with reasonable diligence and is then pending before the district court, a case does not become moot merely because of the tender to the named plaintiffs of their individual money damages”).

. The court in Philadelphia Electric stated that “the proposed settlements must be regarded as attempting to compromise the claims of the class, not just the named plaintiffs. Rule 23(e) clearly applies to this situation; indeed, due process concepts might well be held to require such notice, even in the absence of Rule 23(e).” 42 F.R.D. at 327.

. If this class is certified pursuant to Rule 23(b)(2), the provision of the rule requiring individual notice to class members who can be identified through reasonable effort does not apply. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 n. 14, 94 S.Ct. 2140, 2152 n. 14, 40 L.Ed.2d 732 (1974); Childs v. U. S. Board of Parole, 511 F.2d 1270, 1276 (D.C.Cir.1974).

. Rule 23(a) provides:
One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Rule 23(b) provides:
An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:
He *
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole ....
A class action under 23(b)(2) seeking injunctive or declaratory relief may also include an incidental claim for monetary damages. Society for Individual Rights, Inc. v. Hampton, 528 F.2d 905, 906 (9th Cir. 1975).
I disagree with the majority’s holding, see p. 668 n. 24 supra, that this class suit must be considered a 23(b)(3) rather than a 23(b)(2) action because the relief obtained was monetary in nature. “[A] class action for injunctive relief and damages properly brought under Rule 23(a) and (b)(2) should not be dismissed merely because a subsequent change in policy by the defendant has eliminated the necessity for future injunctive relief, leaving only the question of past damages for determination by the Court.” Arkansas Education Ass’n v. Board of Education, 446 F.2d 763, 768 (8th Cir. 1971) (citations omitted).
In the instant case, plaintiffs requested in the complaint a declaration that the regulation at issue was invalid, an injunction prohibiting CSA from returning the unused funds to the Treasury, and an injunction requiring CSA to extend the deadline to apply for 1979 funds. As defendants conceded in the district court and on this appeal, see p. 687 supra, the relief requested by the putative class made it properly a 23(b)(2) action. A different conclusion is not required by the fact that CSA agreed not to return the funds to the Treasury pending the outcome or by the fact that the settlement called for monetary relief.

. Because I would hold that the instant case is maintainable as a 23(b)(2) class action, there is no need to reach the questions of predominance of common issues of law and fact or manageability as discussed by the majority. See Metropolitan Area Housing Alliance v. Department of Housing & Urban Development, 69 F.R.D. 633, 639 (N.D.I11.1976).

. The Third Circuit, in considering procedural problems such as unmanageability, held that “[o]nce a court is convinced that a plaintiffs claims are of substantial merit, and that the class action device is the most practicable method of vindication, it must not allow encountered procedural difficulties to obviate its responsibility to adjudicate those claims.” Neely v. United States, 546 F.2d 1059, 1071 (3d Cir. 1976).

. I disagree with the majority’s conclusion that a fluid recovery mechanism is inappropriate here. The statute’s purpose, to reduce the impact of high energy costs on low income people including the elderly and near poor, see p. 690 infra, is served by the settlement decree. Further, a fluid recovery is necessary in the instant case, where providing individual recovery would be difficult and procedurally costly but where such a recovery would remedy, at least in part, the wrong suffered by the class members as a result of the invalid regulation. See Bebchick v. Public Utilities Comm’n, 318 F.2d 187, 203 (D.C.Cir.1962) (en banc), cert. denied, 373 U.S. 913, 83 S.Ct. 1304, 10 L.Ed.2d 414 (1963).

. The majority did not reach this issue. See p. 663 n.16 supra.

. Moreover, 42 U.S.C. § 2966 (1976) (Chapter 34 of Title 42) provides explicit authority for CSA to transfer up to twenty percent of appropriated funds to other programs under the Economic Opportunity Act, as amended. 42 U.S.C. § 2966 (1976) provides:
Notwithstanding any limitation on appropriations for any program or activity under this chapter or any Act authorizing appropriations for such program or activity, . . . not exceed 20 per centum ... of the amount appropriated or allocated from any appropriation for the purpose of enabling the Director to carry out any such program or activity under this chapter may be transferred and used by the Director for the purpose of carrying out any other such program or activity under this chapter.

. At the October 6 status hearing, Capital filed a consolidated motion to intervene and motion for relief from the order.

. The failure to include a proof of service was in violation of N.D.I11. Rule 7(b), as the majority notes. See p. 679 n.52 supra.