157 F.3d 179 (3rd Cir. 1998), 97-1893, Maldonado v. Houstoun

Docket Nº:97-1893.
Citation:157 F.3d 179
Party Name:Edwin MALDONADO; Maria Delores Maldonado, individually and as next friends of Ana Maldonado, Pablo Maldonado, Edwin Maldonado, Rey Maldonado, Yesenia Maldonado, and Jose Maldonado, and on behalf of all others similarly situated; Maria Ortiz; Michael Ortiz, individually and as next friends of Julie Ortiz, Michael Ortiz, and Angelica Ortiz, and on be
Case Date:September 09, 1998
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 179

157 F.3d 179 (3rd Cir. 1998)

Edwin MALDONADO; Maria Delores Maldonado, individually and

as next friends of Ana Maldonado, Pablo Maldonado, Edwin

Maldonado, Rey Maldonado, Yesenia Maldonado, and Jose

Maldonado, and on behalf of all others similarly situated;

Maria Ortiz; Michael Ortiz, individually and as next

friends of Julie Ortiz, Michael Ortiz, and Angelica Ortiz,

and on behalf of all other similarly situated; Kensington

Welfare Rights Union; Philadelphia Welfare Rights

Organization, on behalf of themselves and their members;

Traveler's Aid Society of Philadelphia, individually and on

behalf of its clients,


Feather O. HOUSTOUN, Secretary of the Pennsylvania

Department of Public Welfare; Don Jose Stovall, Executive

Director of the Philadelphia Board of Assistance, both in

their official capacities, Appellants.

No. 97-1893.

United States Court of Appeals, Third Circuit

September 9, 1998

Argued July 21, 1998.

Page 180

[Copyrighted Material Omitted]

Page 181

John G. Knorr, III (Argued), Office of Attorney General of Pennsylvania, Department of Justice, Harrisburg, PA, for Appellant.

Susan Frietsche (Argued), Women's Law Project, Philadelphia, PA, for Appellee.

Before: STAPLETON, ROSENN, Circuit Judges, and RESTANI, Judge, United States Court of International Trade. [*]


ROSENN, Circuit Judge.

This appeal presents a significant constitutional question implicating an aspect of Pennsylvania's recent amendment to its public assistance benefits legislation. Pennsylvania made the change during a recent wave of federal and state welfare reform legislation which swept the nation calling for a reduction in overall welfare expenditures. Specifically, we must decide the constitutionality of § 9(5)(ii) of Pennsylvania's Act 35 of 1996. See Pa. Stat. Ann., tit. 62, § 432(5)(ii). It mandates that an eligible family arriving in Pennsylvania from another state shall, during its first twelve months of bona fide residence, receive as cash benefits the lesser of: (1) the benefit level available to similarly

Page 182

situated Pennsylvania residents of twelve months or more, or (2) the benefit level the family would have been eligible to receive in their prior state had they not moved to Pennsylvania.

In 1997, several months after the passage of this legislation, Maria and Edwin Maldonado and their six minor children migrated to Pennsylvania from Puerto Rico. They became eligible for public assistance benefits but were informed that the cash benefits allowance available to them would be substantially lower than the benefits provided to similarly situated long-term Pennsylvania residents. 1

Shortly thereafter, the Maldonados and several organizations that represent their interests (collectively, the "Maldonados"), instituted a class action against Feather O. Houstoun, Pennsylvania's Secretary of Public Welfare, and Don Jose Stovall, Executive Director of the Philadelphia Board of Assistance, both in their official capacities (collectively, the "Commonwealth"), in the United States District Court for the Eastern District of Pennsylvania. The Maldonados sued pursuant to 42 U.S.C. § 1983, seeking declaratory and injunctive relief, claiming that Pennsylvania's two-tier welfare scheme violates their constitutional rights to travel, to equal protection, and to non-discriminatory treatment under the Privileges and Immunities Clause. The district court held that the scheme did not appear to be supported by a rational basis, and thus likely violated the Fourteenth Amendment's Equal Protection Clause. Therefore, the court preliminarily enjoined enforcement of the two-tier scheme and certified the class, with the Maldonados as class representatives. The Commonwealth timely appealed the injunction. We affirm, although our analysis differs.


The relevant facts of this case are for the most part undisputed. In May 1996, after several attempts to pass similar measures failed throughout the early 1990s, Pennsylvania, as part of the state's broad-scale welfare reform, enacted Section 9(5)(ii), governing public assistance benefits to eligible families that have resided in Pennsylvania for less than one year. Section 9(5)(ii) provides that during the first twelve months of residence in Pennsylvania, an eligible family's cash assistance benefits are limited to the lesser of (1) the benefit level that family would have received in its prior state of residence, or (2) the benefit level available to otherwise similarly situated long-term Pennsylvania residents. 2 Because Pennsylvania grants larger cash benefits than 40 other states, under this two-tier scheme, a typical eligible family moving to Pennsylvania would lose anywhere from over 60%, to as little as 2%, of their cash benefits for the first twelve months that they reside in the state.

Pennsylvania's legislation received considerable reassurance when several months later, in August 1996, Congress passed landmark welfare reform legislation known as the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ("PRWORA"), 42 U.S.C. §§ 601, et seq. The PRWORA dramatically changed the climate for welfare programs in this country and encouraged states to adopt restrictive cash benefit programs of the type contained in Pennsylvania's Act 35 for those relocating from another state. Among other things, the PRWORA changed the basic funding format for state Temporary Assistance to Needy Families ("TANF ") 3 plans to awards of block grants, expressly terminating the prior program's entitlement nature. Especially relevant to

Page 183

this appeal is Section 604(c) of the PRWORA, which explicitly authorized two-tier cash benefits provisions like that enacted by Pennsylvania. Section 604(c) authorized states to treat new residents differently than longer-term residents.

Prior to May 1997, Plaintiff Edwin Maldonado worked as a mechanic in Puerto Rico and supported his family with his salary plus government-provided nutritional and medical assistance. In May 1997, Maldonado's job ended. He and his wife both had health problems, and therefore in May 1997, they and their six children moved from Puerto Rico to Philadelphia, Pennsylvania, where Mr. Maldonado was born and spent part of his childhood, to seek better health care.

Shortly after establishing residence in Pennsylvania, the Maldonados applied for TANF benefits. The Pennsylvania Department of Public Welfare ("DPW") approved their application and also certified that both Mr. and Mrs. Maldonado temporarily were unable to work. Under Pennsylvania's revised welfare scheme, the Maldonados qualified for monthly cash benefits of $304, the amount they would have received in their prior place of residence, Puerto Rico, $720 in food stamps and medical benefits paid by the state of $1,483.60, plus a one-time grant of $213 to defray job-search expenses. 4 Had the Maldonados been residents of Pennsylvania for at least twelve months, they would have been eligible for cash benefits of $836 per month instead of the $304 in benefits that they actually received, a reduction of almost 64%.

As a result of the DPW's benefits decision, the Maldonados sued the Commonwealth on June 19, 1997, seeking a temporary restraining order (TRO) and declaratory and injunctive relief. They claimed that Pennsylvania's two-tier durational residency structure violated their fundamental right to travel, their rights under the Equal Protection Clause of the Fourteenth Amendment, and their rights under the Privileges and Immunities Clause of Article IV and the Fourteenth Amendment.

After denying the plaintiffs' motion for a TRO, the court held a two-day hearing on the application for a preliminary injunction. On October 6, 1997, after considering the memoranda, transcripts, exhibits, and other evidence contained in the sizeable and well-developed record, the district court certified the class and preliminarily enjoined enforcement of Pennsylvania's two-tier durational residency requirement. The court, applying rational basis Equal Protection analysis, held the law irrational. It found that the class members were likely to succeed on the merits of their constitutional claim that the class would suffer irreparable harm absent the injunction, rejected the Commonwealth's fiscal harm arguments, and found that the public interest would be best served by granting the injunction. 5

The Commonwealth timely appealed. The district court placed the action in civil suspense pending resolution of this appeal. 6


On appeal, when considering the district court's grant of a preliminary injunction, we review the court's legal conclusions de novo, its findings of fact for clear error, and its ultimate decision to grant or deny the preliminary injunction for an abuse of discretion. See, e.g., Anderson v. Davila, 125 F.3d 148, 159 (3d Cir.1997); New Jersey Hosp. Ass'n v. Waldman, 73 F.3d 509, 512 (3d Cir.1995). Because this appeal presents solely legal questions pertaining to the constitutionality of Section 9(5)(ii) of Pennsylvania's welfare act, our review is plenary. Ordinarily, limited review is appropriate at the preliminary injunction stage of a constitutional

Page 184

challenge to a state statute, but since the issue is legal and the facts are well established, we "need not abstain from addressing the constitutional issue." Thornburgh v. American College of Obst. and Gyn., 476 U.S. 747, 756, 106 S.Ct. 2169, 90 L.Ed.2d 779 (1986).


The Commonwealth succinctly frames the appellate issue in these words: "Whether Pennsylvania violates the Constitution by providing that, for one year after their arrival in Pennsylvania, applicants for certain welfare benefits may receive only the amount they would have received in their state of prior residence." Thus, we are called upon only to determine the constitutionality of the state...

To continue reading