Yee-Litt v. Richardson

• Decision Date: 17 January 1973
• Docket Number: No. C-71-2286 OJC.,C-71-2286 OJC.
• Citation: 353 F. Supp. 996
• Parties: Joyce YEE-LITT et al., Plaintiffs, v. Elliot L. RICHARDSON et al., Defendants.
• Court: U.S. District Court — Northern District of California

353 F. Supp. 996

Joyce YEE-LITT et al., Plaintiffs, v. Elliot L. RICHARDSON et al., Defendants.

No. C-71-2286 OJC.

United States District Court, N. D. California.

January 17, 1973.

Armando M. Menocal III, Christopher N. May, San Francisco Neighborhood Legal Assistance Foundation, San Francisco, Cal., for plaintiffs.

James L. Browning, Jr., U. S. Atty., Richard F. Locke, Asst. U. S. Atty., Evelle Younger, Atty. Gen. of Cal., David J. Bowie, Deputy Atty. Gen., San Francisco, Cal., for defendants.

Before HAMLIN, Circuit Judge, and EAST and CARTER, District Judges.

MEMORANDUM AND ORDER

OLIVER J. CARTER, District Judge.

Plaintiffs filed this action to declare unconstitutional and to enjoin federal and state regulations which permit the summary termination of welfare benefits prior to a hearing. The Federal Defendant is Elliot L. Richardson, the then Secretary of the United States Department of Health, Education and Welfare, responsible for the administration of the Social Security Act's categorical assistance programs. The State Defendant is Robert B. Carleson, Director of the California State Department of Social Welfare, the agency which administers California's categorical assistance programs. Jurisdiction for this Court is based on 28 U.S.C. §§ 2281, 2284. This action is also brought under 28 U.S.C. §§ 1343(3) and (4), 28 U.S.C. §§ 2201 and 2202, 42 U.S. C. § 1983, and the Fifth and Fourteenth Amendments to the United States Constitution.

Plaintiffs have brought this action on behalf of themselves and all other California recipients under the categorical assistance programs of the Social Security Act, and all persons whose assistance under these programs has been reduced or terminated pending appeal since September 3, 1971, notwithstanding their timely request for a fair hearing. The Court finds that this class is so numerous that joinder of all members is impracticable. All members of the class are governed by the same California regulations and statutes and therefore are treated in a similar manner by the State defendants. The Court further finds on the basis of the hearings heretofore held, that the representative parties herein will fairly and adequately protect the interest of the class. Accordingly, the Court concludes that this action is properly maintainable as a class action for the purpose of securing injunctive relief. F.R.Civ.P. 23(a) and 23(b)(2).

The California regulations being challenged, Title 22 Cal.Admin.Code § 22-022.3 issued pursuant to California's Welfare and Institutions Code Section 10553, permit the reduction or termination of welfare benefits prior to a hearing. Whenever the Chief Referee¹ determines that the recipient's appeal only raises issues of policy and no issue of fact or judgment in the individual's case, aid is not paid pending the fair hearing. Plaintiffs also challenge the federal regulation, 45 C.F.R. § 210.10(a)5, which allows the State to implement this fact-policy system of distinguishing among timely appeals. Plaintiffs' contention is that whenever a timely appeal is made, minimum standards of due process require a hearing prior to reduction or termination of benefits. The hearing must meet the minimum due process standard as explained in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970).

The plaintiffs have set forth three theories as basis for the relief they seek. The first theory is that due process requires an opportunity for a hearing in all cases prior to termination or reduction of welfare benefits. Plaintiffs next contend that requiring a welfare recipient to plead facts on appeal places an unfair burden on a class of people unable to sustain that burden thereby depriving them of their right to a hearing. And finally, plaintiffs argue that the fact-policy distinction is so vague and lacking in standards that arbitrary decisions by the Chief Referee are commonplace thereby depriving recipients of a hearing in violation of their due process rights. In reply, the State contends that there is no constitutional right to a prior hearing in all cases and that the alleged pleading burden and alleged arbitrary decisions have been remedied by recently implemented state regulations.

Without doubt the landmark decision in the area of welfare hearings is Goldberg v. Kelly, supra. The opinion set out the minimum due process requirements for welfare recipients prior to termination of benefits. The Court said that due process requires a hearing prior to termination when the recipient makes a timely request to be heard. However, the present action raises a point not decided in Goldberg. The welfare recipients in Goldberg challenged the State's determination of factual issues. Accordingly, the Supreme Court made no comment on the rights of welfare recipients whose appeals raised only policy issues. Following the decision in Goldberg, the regulations involved here were implemented inferentially on the assumption that the Supreme Court had approved of pre-hearing terminations where only policy issues were raised.

The defendants have cited several opinions which state in part that evidentiary hearings are needed only where factual contentions are raised. See e. g. Provost v. Betit, 326 F.Supp. 920 (D.Vt. 1971); Russo v. Kirby, 453 F.2d 548 (2 Cir., 1971); Connecticut State Dept. of Public Welfare v. H. E. W. et al., 448 F.2d 209 (2 Cir., 1971). These decisions, although not on point with the facts of this action, support defendants' position that no prior hearing is required by due process where no facts are in dispute.

Prior to convening this three judge Court, a temporary restraining order (T.R.O.) was made by Chief United States District Judge Oliver J. Carter, which prevented any pre-hearing terminations or reductions of welfare recipients who had filed timely appeals. At the first hearing before this Court, the State moved to modify the T.R.O. The State argued that by implementing new regulations—the ones now in issue—they would relieve recipients from the alleged pleading burden. Defendants also contended that the new regulations would give the Chief Referee more information with which to decide whether questions of fact or judgment were raised by the recipient's appeal. Since the Supreme Court had instructed lower courts to allow agencies to solve their problems if possible, this Court agreed to allow implementation of the new regulations. See Richardson v. Wright, 405 U.S. 208, 92 S.Ct. 788, 31 L.Ed.2d 151 (1972). The Court acted because of the close legal question presented concerning the validity of the fact-policy distinction; because the regulations might lift what appeared to be a pleading burden on the welfare recipients and because the regulations might prevent erroneous decisions thereby demonstrating the viability of the fact-policy distinction.

The concept underlying the new regulations is that additional contact by the county worker with the recipient produces more information with which the Chief Referee makes a more informed decision. These regulations have now been in effect since March 16, 1972, pursuant to this Court's order. At the latest hearing, September 28, 1972, argument was heard concerning how the regulations had worked and the effect if any upon plaintiffs' three claims. At the close of the hearing, plaintiffs renewed their motion for a preliminary injunction, the State defendant renewed his motion for summary judgment, and the Federal defendant renewed his motion to dismiss.

Plaintiffs' challenge to the State regulations is that they are per se unconstitutional or alternatively that they are unconstitutional in effect. After reviewing all the briefs, including regular statistical reports on the effect of the new regulations, the Court concludes that the regulations deny welfare recipients due process according to Goldberg v. Kelly, supra. The Court finds that the regulations work to erroneously deny pre-termination hearings to welfare recipients who have raised factual issues on appeal. For the reasons given below, the Court concludes that new regulations would probably not remedy the errors because of the inherent difficulties in using this fact-policy distinction.

Before modifying the T.R.O. the Court was satisfied that the proposed regulations would be as effective as possible. In part the Court was satisfied by the State's assurances that there was no lack of standards in using the fact-policy system, but that there was merely a lack of information for the decision maker. The State also strongly claimed that the regulations would relieve the burden on a recipient to plead facts in his request for a hearing. Because this Court was satisfied that the regulations would work as described, the T.R.O. was modified. Several months after the T.R.O. was modified the effectiveness of these regulations was challenged. On the basis of the information presented at the hearing of September 28, 1972, the Court concludes that the regulations did not work as planned.

In at least two areas recipients were erroneously denied hearings prior to termination or reduction. The first type of erroneous denial can best be classified as mistakes. The Court realizes that no regulatory system can be foolproof; however, any court is constrained to try to minimize mistakes in the welfare area. As the Supreme Court said in Goldberg at page 264 of 397 U.S., at page 1018 of 90 S.Ct., "For qualified recipients, welfare provides the means to obtain essential food, clothing, housing, and medical care. . . . Thus the crucial factor in this context— . . . —is that termination of aid pending resolution of a controversy over eligibility may deprive an eligible recipient of the very means by which to live while he waits." (Footnote and citation omitted) Although the Court does not...