405 A.2d 230 (Me. 1979), Thiboutot v. State

Citation:405 A.2d 230
Opinion Judge:GODFREY,
Party Name:Joline THIBOUTOT et al. v. STATE of Maine et al.
Attorney:Sewall & Mittel by Robert E. Mittel (orally), Portland, for plaintiffs. James E. Smith, Asst. Atty. Gen. (orally), Augusta, for defendants.
Case Date:August 31, 1979
Court:Supreme Judicial Court of Maine

Page 230

405 A.2d 230 (Me. 1979)

Joline THIBOUTOT et al.


STATE of Maine et al.

Supreme Judicial Court of Maine.

August 31, 1979

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[Copyrighted Material Omitted]

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Sewall & Mittel by Robert E. Mittel (orally), Portland, for plaintiffs.

James E. Smith, Asst. Atty. Gen. (orally), Augusta, for defendants.


GODFREY, Justice.

The family of Lionel and Joline Thiboutot included eight children: four by both Lionel and Joline, one by Joline but not Lionel, and three by Lionel but not Joline. In November, 1975, Lionel Thiboutot was notified by the Maine Department of Human Services of a reduction in AFDC benefits which the Department deemed required by a change of federal regulations. The change was essentially as follows: In computing the available income of Lionel in order to determine the amount of AFDC benefits allowed for Lionel's three children of whom Joline was not the mother, the Department would no longer subtract that portion of Lionel's income which went to the support of the four children of both Lionel and Joline (those children not being eligible for AFDC benefits), although Lionel was required by law to support those children and in fact did support them.

The Thiboutots pursued their administrative remedies in an effort to get the Department to revise its ruling. A final adverse decision was rendered by the Commissioner on March 18, 1976. From that decision the Thiboutots filed a timely appeal under Rule 80B, M.R.Civ.P., alleging that the Commissioner's decision was in violation of state and federal welfare statutes. Both the State of Maine and David Smith, as Commissioner of the Maine Department of Human Services, were named as defendants.

On January 7, 1977, an amended complaint was filed seeking class relief as well as relief for the Thiboutots. The amended complaint, brought pursuant to 42 U.S.C. § 1983 as well as Rule 80B, alleged violation of the Social Security Act, 42 U.S.C. § 602(a)(7), and pertinent federal regulations. A motion for class action certification was filed on February 16, 1977, and granted on June 28, 1977.

A motion for a separate trial on the issue of liability was granted on June 17, 1977. On July 15, 1977, judgment was entered for the Thiboutots on the merits. Defendants were enjoined from enforcing the challenged regulation and ordered to adopt new regulations, notify all members of the Thiboutots' class of the new regulations, and pay benefits prospectively to eligible persons in the class. The trial court reserved decision on retroactivity of relief and on the right to an award of attorney's fees.

Defendants complied with the order. On February 27, 1978, final judgment was entered ordering retroactive benefits for the Thiboutots but denying plaintiffs' motions for retroactive benefits for the class and for attorney's fees. From this judgment plaintiffs appeal. The defendants have not cross-appealed. We sustain plaintiffs' appeal on the issue of attorney's fees.

  1. Retroactive Benefits

    The appellant seeks to have the defendant State of Maine adjudicated liable to pay money to the members of the class in the form of retroactive AFDC benefits. The sovereign immunity of the State of Maine precludes such a judgment unless the

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    state has given its consent to be sued. Drake v. Smith, Me., 390 A.2d 541 (1978).

    The Maine Legislature has not enacted any law manifesting consent that the state be subject to suit for retroactive AFDC benefits. Section 3741 of title 22 (Supp.1965-78) provides only as follows:

    "The department is authorized to administer and operate a program of aid to dependent children within the Federal Social Security Act and any amendments and additions thereto."

    Drake v. Smith, supra, makes clear that the Legislature's authorization of the state's participation with the federal government in a cooperative welfare program, such as aid to families with dependent children, does not itself constitute an implied waiver of sovereign immunity. Id. at 545.

    Appellant contends, however, that waiver of the state's sovereign immunity may be found in the promulgation of certain regulations by the Department of Human Services which, in appellant's view, mandate the payment of retroactive AFDC benefits to the class. We disagree with appellant's interpretation of those regulations.

    Appellant relies on the following provision of the Maine Public Assistance Payments Manual (MPAPM):

    "If the agency's original action is reversed or in any other way modified causing a decision favorable to the claimant, the agency will take immediate steps to insure that within the 60 day period that corrected payments are made retroactively to the date the incorrect action was taken or to the date of application, whichever was later." Maine Public Assistance Payments Manual (MPAPM) ch. I, sec. C, p. 7 (Dec., 1978 Revision). 1

    The regulations contain nothing to suggest that "the claimant" includes other recipients of aid who are in a position similar to that of the claimant but have not made application for review by means of the available administrative and judicial remedies. In the first place, the provision relied on calls for retroactive payments only from the date of claimant's application if that date is later than the date of the incorrect action. Such a provision is not consistent with a purpose of affording full restitutionary relief for correction of the administrative error.

    Furthermore, the context of the quoted language indicates that only persons who seek administrative and judicial review of the reduction in AFDC benefits in this case the Thiboutots themselves may be considered "claimants". On page 1 of Chapter I, Section C, the regulations state:

    "Federal and State law assure that any claimant, or anyone acting responsibly in his behalf, who believes that proper consideration has not been given to all circumstances surrounding his claim for assistance may request a fair hearing."

    The regulations then detail the procedure by which administrative review of an adverse decision by the Department may be obtained. On page 4 of Chapter I, Section C, the regulations continue:

    "The State agency may respond to a series of individual requests for fair hearings by conducting a single group hearing. . . . In all group hearings, whether initiated by the agency or by the claimants, the policies governing fair hearings will be followed."

    Here the term "claimants" is used to refer to those individuals who have requested hearings. Moreover, at the time the present action was brought, the paragraph immediately preceding the language appellants rely on provided as follows:

    "Within 5 days of the decision, a letter will be sent over the Commissioner's signature, advising the claimant of the fair hearing decision and of his right to judicial review under the Maine Rules of Civil Procedures (Sic ) Rule 80B, if he is dissatisfied with the decision. The letter will advise the claimant that if he wishes to take advantage of this right, he must file a petition for review with the Superior

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    Court within 30 days of the receipt of the decision with which he is dissatisfied. 2

    Again "claimant" is used to mean an individual who has actually sought administrative review of an agency decision.

    We conclude that the regulations did not call for the payment of retroactive AFDC benefits to the unnamed members of the class in the present action. The judgment of the Superior Court, awarding retroactive AFDC benefits to the Thiboutots but not to the members of the class, is thus consistent with our interpretation of the departmental regulations, namely, that they require limited retroactive payments only to those who have been "claimants" actually pursuing their rights under the regulations. The promulgation of those regulations cannot be regarded as amounting to a waiver of sovereign immunity for purposes of appellants' action to recover retroactive benefits for all persons in their class.

    Appellants contend that the state may not assert sovereign immunity as a bar to their class action because each member of the class had a property right in correct AFDC payments and thus their property was taken by the state without just compensation. They cite Foss v. Maine Turnpike Auth., Me., 309 A.2d 339 (1973), for the proposition that sovereign immunity is not available to the state to bar a citizen's claim for just compensation arising from a violation of the just-compensation clauses of the federal and state constitutions. U.S. Const. amend. V per amend. XIV; Me.Const. art. I, § 21.

    Despite occasional suggestions that the right to welfare aid should be regarded as a property right, as distinguished from a mere gratuity, E. g., Goldberg v. Kelly, 397 U.S. 254, 262 n. 8, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), 3 not all the rights normally associated with ownership of property are available to recipients under the welfare laws and regulations. For example, the federal welfare regulations themselves impose limits on the extent to which state plans may provide for retroactive corrective payments. Thus the federal requirement that a state plan provide for prompt correction of underpayments is in terms conditioned on the existence in the plan of a provision for recoupment of overpayments. 45 C.F.R. § 233.20(a)(12)(ii). Moreover, in such a state plan, "retroactive corrective payments shall be made only for the 12 months preceding the month in which the underpayment is discovered," 4 45 C.F.R. § 233.20(a)(12)(ii)(A ), and "no retroactive payment need be made where the administrative cost would exceed the amount of the...

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