Harris v. Heckler

• Decision Date: 18 November 1983
• Docket Number: Civ. No. 83-4023.
• Citation: 576 F. Supp. 915
• Parties: Essie Mae HARRIS, individually and on behalf of all others similarly situated, Plaintiffs, v. Margaret M. HECKLER, as Secretary of the United States Department of Health and Human Services, George J. Albanese, individually and in his capacity as Commissioner of New Jersey Department of Human Services, and Audrey M. Harris, individually and in her capacity as Acting Director of the Division of Public Welfare, New Jersey Department of Human Services, Defendants.
• Court: U.S. District Court — District of New Jersey

576 F. Supp. 915

Essie Mae HARRIS, individually and on behalf of all others similarly situated, Plaintiffs, v. Margaret M. HECKLER, as Secretary of the United States Department of Health and Human Services, George J. Albanese, individually and in his capacity as Commissioner of New Jersey Department of Human Services, and Audrey M. Harris, individually and in her capacity as Acting Director of the Division of Public Welfare, New Jersey Department of Human Services, Defendants.

Civ. No. 83-4023.

United States District Court, D. New Jersey.

November 18, 1983.

Legal Services of New Jersey, Inc. by Stephen M. Latimer, Alfred N. Donnarumma, New Brunswick, N.J., Richard S. Semel, Hackensack, N.J., for plaintiffs.

James H. Cooper, Asst. U.S. Atty., Newark, N.J., Dorothy Donnelly, Deputy Atty. Gen., State of N.J., Trenton, N.J., for defendants.

LACEY, District Judge.

INTRODUCTION

Plaintiffs are former recipients of Aid to Families with Dependent Children ("AFDC") benefits. They challenge the "lump sum rule," under which they were declared ineligible for benefits for a period of time. Defendants administer the AFDC program on the state and federal levels.

The underlying facts are undisputed. Plaintiffs move for a preliminary injunction requiring defendants to pay them AFDC benefits pending the outcome of this suit. (I have already denied their application for a temporary restraining order.) Defendants move for summary judgment. In the meanwhile, plaintiffs have cross-moved for summary judgment and class certification.

I have bypassed the preliminary injunction stage and addressed the summary judgment question directly. Because I could not decide defendant's motion without settling the law of the case, and because the legal issues have been sufficiently aired, this decision disposes of plaintiff's summary judgment motion as well. I will decide the class certification motion upon proper briefing and oral argument.

While on AFDC, each plaintiff came into a sum of money following the death of a relative. Under the lump sum rule, each was declared ineligible for further benefits for a specified period. The period was calculated by dividing the amount of the lump sum by the amount of plaintiffs' monthly grant. The rule thus treats lump sums as the equivalent of future AFDC aid. Each plaintiff, however, has spent the lump sum long before the ineligibility period has run out. Defendants, in accordance with the lump sum rule, denied the application of plaintiff Harris for further aid. It appears likely that plaintiff T.E. will have a similar experience.

Were it not for the rule, plaintiffs would probably qualify for AFDC, as they did in the past. Destitute and in need of assistance, they challenge the lump sum rule on the following grounds:

(1) That it rightfully applies only to AFDC recipients with earned income, and was therefore wrongly applied to them; and

(2) That it creates an unconstitutional irrebuttable presumption of continuing ineligibility.¹

In essence, they seek to have their reapplications judged by the same needs test applied to all other applications for AFDC.

A. Essie Mae Harris

Essie Mae Harris was collecting AFDC benefits of $372 per month in October 1981. She used that grant, as well as food stamps and Medicaid, to provide for herself and her daughter. After the death of her nephew, she received an insurance check for $11,568.36. On November 1, 1981 defendants terminated her AFDC benefits until April 1985 under the lump sum rule. Her food stamps and Medicaid eligibility were also cancelled.

By March 1983 the insurance money was gone. Harris had, and has, no other income or assets, so she reapplied for AFDC benefits. Defendants again found her ineligible until April 1985. She appealed. The state Administrative Law Judge reviewed her expenditures. He found that she had spent the money on food, shelter and clothing; indeed her basic living expenses amounted to $17,123, about $5400 in excess of the lump sum. The state Division of Public Welfare rejected the ALJ's recommendation that she be reinstated.

Harris and her daughter are now destitute. Harris suffers from high blood pressure, asthma, and arthritis, but cannot afford medical care for herself or her daughter. The daughter had a part-time job during the summer, but has now returned to high school. She lacks adequate clothing for the coming winter. The family survives on food stamps (restored in June 1983) and the charity of friends, which is rapidly being exhausted.

B. "T.E."

T.E. received an AFDC grant of $414 per month and a food stamp grant of $154 per month until June 1983. She then received a check for $5329.91 from the estate of her deceased father. She refunded her July AFDC and food stamp payments. Shortly afterward defendants terminated her AFDC benefits until August 1984 under the lump sum rule. She appealed, and the state ALJ recommended reinstatement. Given defendants' adherence to the lump sum rule, reinstatement appears extremely unlikely.

T.E. has spent her small inheritance on family essentials. These included furniture, payments on loans and back tax bills, rent, food, clothing, and medically required air conditioners. She and her husband are unemployed, with no outside sources of income or savings. They have requested assistance from local charities for their food bills. They are now threatened with placement of their two children, aged 12 and 14, with the state Division of Youth and Family Services.

DISCUSSION

I. Earned Income and the Lump Sum Rule

A. The Issue

Plaintiff challenges the federal regulation setting forth the lump sum rule:

When the AFDC assistance unit's income, after applying applicable disregards, exceeds the State need standard for the family because of receipt of nonrecurring lump sum income, the family will be ineligible for aid for the full number of months derived by dividing the sum of the lump sum income and other income by the monthly need standard for a family of that size. Any income remaining from this calculation is income in the first month following the period of ineligibility.

45 C.F.R. § 233.20(a)(3)(ii)(D) (1982). This regulation, and the parallel state regulation,² apply to all AFDC recipients; the regulations refer only to "a recipient," "the family," or "the AFDC assistance unit." Plaintiffs argue that the regulations are invalid because the authorizing statute meant to apply the lump sum rule only to recipients with earned income. Plaintiffs have no earned income, and thus aver that a properly drafted regulation would not apply to them.

The federal statute giving rise to the challenged regulations limits the applicability of the lump sum rule to "a person specified in paragraph 8(A)(i) or 8(A)(ii)." 42 U.S.C. § 602(a)(17) (Supp. V 1981).³ Defendants argue that paragraphs 8(A)(i) and (ii) "specify" the entire range of AFDC applicants; plaintiffs argue that those paragraphs specify only recipients with earned income, rendering the regulations fatally overbroad.

The issue, then, is whether paragraphs 8(A)(i) and (ii) specify only those recipients with earned income. Under those paragraphs, a state plan must:

8(A) provide that, with respect to any month, in making the determination of need under paragraph (7), the State agency —

(i) shall disregard all of the earned income of each dependent child receiving aid to families with dependent children who is (as determined by the State in accordance with standards prescribed by the Secretary) a full-time student or a part-time student who is not a full-time employee attending a school, college, or university, or a course of vocational or technical training designed to fit him for gainful employment;

(ii) shall disregard from the earned income of any child or relative applying for or receiving aid to families with dependent children, or of any other individual (living in the same house as such relative and child) whose needs are taken into account in making such determination, the first $75 of total of such earned income for such month (or such lesser amount as the Secretary may prescribe in the case of an individual not engaged in full-time employment or not employed throughout the month) ....

42 U.S.C. § 602(a)(8)(A) (Supp. V 1981). Thus 8(A)(i) and (ii) provide for "earned income disregards," so called. Certain earned income is excluded from the determination of need, doubtless in order to encourage work by allowing applicants to keep part of what they earn.

Defendants argue that 8(A)(i) and (ii) specify all AFDC recipients. The paragraphs mention, for example, "each dependent child receiving aid," and "any child or relative applying for or receiving" AFDC. Therefore, the argument runs, all applicants are "specified" in the paragraphs, even if they have no earned income to which the disregard provisions could apply. Plaintiffs counter that the paragraphs specify only those persons to whom the "earned income disregard" provisions actually apply.⁴

B. Persons Specified in Paragraph 8(A)(i) or 8(A)(ii)

In construing § 602(a)(8)(A)(i) & (ii), "our starting point must be the language employed by Congress." American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982), quoting Reiter v. Sonotone Corp., 442 U.S. 330, 337, 99 S.Ct. 2326, 2330, 60 L.Ed.2d 931 (1979); Mountain Brook Orchards v. Marshall, 640 F.2d 454, 456 (3d Cir.1981). Absent any contrary indication, I must take the words used to have their ordinary meaning. Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980); Richards v. United States, 369 U.S. 1, 9, 82 S.Ct. 585, 590, 7 L.Ed.2d 492 (1962).

The only definitional issue is the meaning of the word "specified" in § 602(a)(17). Even a court denying a preliminary injunction on this issue conceded that "in common parlance, the word `specify' contains some connotation of restriction." Clark v. Harder, 577 F.Supp. 1085, 1087 (...