Crawford v. Janklow

• Decision Date: 18 February 1983
• Docket Number: Civ. No. 82-3078.
• Citation: 557 F. Supp. 1146
• Parties: Jacqueline A. CRAWFORD and Nancy L. Emerson, on behalf of themselves and all others similarly situated, Plaintiffs, v. William JANKLOW, Governor of the State of South Dakota, and James Ellenbecker, Secretary of the South Dakota Department of Social Services, and the Agents, Employees, and Successors of the above, Defendants.
• Court: U.S. District Court — District of South Dakota

557 F. Supp. 1146

Jacqueline A. CRAWFORD and Nancy L. Emerson, on behalf of themselves and all others similarly situated, Plaintiffs, v. William JANKLOW, Governor of the State of South Dakota, and James Ellenbecker, Secretary of the South Dakota Department of Social Services, and the Agents, Employees, and Successors of the above, Defendants.

Civ. No. 82-3078.

United States District Court, D. South Dakota, C.D.

February 18, 1983.

Mark Falk, Black Hills Legal Services, Inc., Rapid City, S.D., for plaintiffs.

Mark V. Meierhenry, Atty. Gen., Janice Godtland, Asst. Atty. Gen., Pierre, S.D., Brent A. Wilbur, Sp. Asst. Atty. Gen., Pierre, S.D., for defendants.

MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

Named plaintiffs are residents of the State of South Dakota who receive home energy assistance through their participation in the low income housing program defined in 42 U.S.C. § 1437f, commonly called the Section 8 housing program. They have sued the Governor of South Dakota and the Secretary of the South Dakota Department of Social Services for the categorical exclusion of named plaintiffs and of persons similarly situated from participation in the State's Low Income Energy Assistance Program (LIEAP), funded and defined by Congress in 42 U.S.C. §§ 8621-8629. Jurisdiction is predicated upon 28 U.S.C. §§ 1331 and 1343(3).

Class status has been granted to plaintiffs in this suit by order of this Court at the end of a hearing concerning the grant of a preliminary injunction on February 4, 1983. Rule 23(c)(1) Fed.R.Civ.P. The State's LIEAP plan, as discussed below, categorically excludes from participation all persons who live in subsidized or public housing. The class certified comprises all persons excluded from participation in South Dakota's LIEAP program by the State's regulation. Plaintiffs have demonstrated that there are some 3,600 persons in South Dakota living in Section 8 subsidized housing alone. The class therefore meets the numerosity prerequisite of Rule 23(a)(1). Since the State's LIEAP plan categorically excludes persons living in subsidized or public housing, there are questions of law or fact common to the class. Rule 23(a)(2). Representative plaintiffs each live in Section 8 subsidized housing in South Dakota and have been denied LIEAP funds. They are, therefore, typically situated within the class they seek to represent. Rule 23(a)(3). Finally, the named plaintiffs have secured representation by the Black Hills Legal Services, Inc., and have demonstrated that they will fairly and adequately protect class interests. Rule 23(a)(4). Finally, the State's actions toward persons living in subsidized or public housing are applicable to all class members generally. Injunctive relief would affect all class members equally. Therefore, this action is maintainable as a class action. Rule 23(b)(2).

This Court is no stranger to the Low Income Energy Assistance Program. See Naegle v. Department of Social Services, 525 F.Supp. 1030 (D.S.D.1981); Eiserman v. Department of Social Services, No. 81-3031, slip op. (D.S.D. Oct. 16, 1981); Grueschow v. Harris, 492 F.Supp. 419 (D.S.D.), aff'd 633 F.2d 1264 (8th Cir.1980). Previous cases before this Court differ significantly from the case at bar, because they were predicated upon law in effect prior to the watershed date of August 13, 1981, the date of passage of the Omnibus Budget Reconciliation Act (OBRA). Representing "a victory for those seeking to minimize federal involvement in the disbursement of social service funds," South Eastern Human Development Corp. v. Schweiker, 687 F.2d 1150 (8th Cir.1982), OBRA reduced significantly federal regulations that conditioned the state's ability to allocate federal monies granted to them. The LIEAP program presently before this Court was funded by the OBRA enactment. Rather than answering to federal regulations, the State's plan must now merely meet the mandates of the congressional statute. These mandates are few and broadly sketched, but the parties agree the issue here is whether South Dakota's LIEAP program meets the prerequisites of 42 U.S.C. § 8624(b)(5):

The chief executive of each State shall certify that the State agrees to —

(5) provide, in a manner consistent with the efficient and timely payment of benefits, that the highest level of assistance will be furnished to those households which have the lowest incomes and the highest energy costs in relation to income, taking into account family size.

Faced with limited funds and a number of needy households, the State did not set out to make a total subsidy of anyone's heating bill. Rather it used certain assumptions that would efficiently deliver some help to a large number of households. Essentially, the State created a matrix or formula to calculate amounts disbursed under the LIEAP program. Disbursements are based upon estimated annual fuel bills for a household of 850 square feet with average fuel consumption habits. The State uses a different formula for each kind of heating fuel and also divides the state into four distinct regions, based upon the number of heating degree days. Finally, as household income rises through a series of income brackets, the State decreases, by ten percent at each step, the percentage of each household's estimated annual fuel bill that will be subsidized, from seventy percent to forty percent. The State limits participation in its LIEAP program to households it considers "vulnerable" as defined by A.R. S.D. § 67:15:01:06:

Vulnerable households are those households in which the members meet the following requirements:

(1) Own or rent their homes;

(2) Do not live in subsidized or public housing; and

(3) Are totally responsible for paying their own heating costs directly to a heating supplier or as a portion of rent.

Eligibility for the LIEAP program is defined by the Congress as households in which at least one person receives AFDC funds, supplemental social security money, food stamps or veterans benefits, 42 U.S.C. § 8624(b)(2)(A), or households whose income does not exceed the greater of 150 percent of the poverty level of the State or 60 percent of the State's median income, 42 U.S.C. § 8624(b)(2)(B). In South Dakota, the relevant figure for income eligibility is 150 percent of the poverty level which ranges from $7,020 per annum for a household of one member to $27,810 per annum for a household of ten members. As the LIEAP program is currently being run in South Dakota, 78.7% of the households receiving LIEAP funds from the state have an annual income of under $8,000.

The largest conceptual problem faced by any novice first approaching LIEAP, or any other governmentally funded fuel assistance program, is understanding that the program is not meant to cover a recipient's actual fuel bills. To the extent that subsidies are based on average consumption habits of an average household living in an average sized house, the dollar amount paid to any individual is somewhat arbitrary. In many cases, the LIEAP subsidy will not in fact pay 70% of the recipient's actual heating bills.¹ In some cases, it may pay more. Under the South Dakota LIEAP plan, the figures of 70, 60, 50 or 40 percent serve to locate a recipient on the payment matrix; they do not correspond to the recipient's fuel consumption or fuel bills.

Plaintiffs contest their categorical exclusion from participation in South Dakota's LIEAP program, because households less needy than those contained in plaintiffs class can receive South Dakota's LIEAP funds, while members of plaintiff class cannot receive consideration for funds.² The State defends its exclusion on the basis that the exclusion allows them to spread dollars to the greatest number of needy people. The State concedes that it has created, for LIEAP purposes, a special class of people. It argues, however, that it permissibly excludes this class from participation in LIEAP for a rational purpose. See e.g. Schweiker v. Hogan, ___ U.S. ___, 102 S.Ct. 2597, 73 L.Ed.2d 227 (1982). In pressing its argument, the State compares two households, one living in Section 8 subsidized housing and the other paying the market rate for its housing. If each household has an annual income of $3,000³ and if the State must choose between the two households, the household not receiving a subsidy should receive LIEAP funds.

The simplicity of the State's comparison hides much in the actual effect of its exclusion and in the operation of its plan. Fundamental to the State's comparison is the State's assertion that Section 8 households should be ineligible for LIEAP funds, because Section 8 households uniformly receive a heating subsidy greater than that they might receive from LIEAP. The assertion holds true for households which dwell in larger houses or apartments. It is not true for smaller households. If one were to assume a two-member household living in a one-bedroom subsidized apartment and receiving annually $3,000 income, the inaccuracy of the State's assertion is clear. Regardless of the type of fuel this household might use to heat its home and regardless of the region of the state in which this household might be located, payments under LIEAP, in every case save one, are larger than those made by the Section 8 housing program.⁴

Not only does this analysis reveal a fallacy underlying the State's assumptions in excluding subsidized households, it also reveals a serious legal deficiency in the State's exclusion. The State makes its comparison to justify spreading LIEAP funds to as many people as possible. The congressional statute authorizing and funding LIEAP does not permit a state simply to spread funds as thinly or thickly as it deems useful. Congress has included directions for arranging priorities in the distribution of funds:

... The highest level of assistance will be furnished to those households which have the lowest incomes and the highest energy costs in relation to income, taking into account family

...