Bouchard v. SEC. OF HEALTH & HUMAN SERV.

• Decision Date: 02 April 1984
• Docket Number: Civ. A. No. 78-0632-F,80-0319-F.
• Citation: 583 F. Supp. 944
• Parties: Katherine BOUCHARD, et al., Plaintiffs, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant. Lillian PINNEX, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — District of Massachusetts

583 F. Supp. 944

Katherine BOUCHARD, et al., Plaintiffs, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

Lillian PINNEX, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

Civ. A. Nos. 78-0632-F, 80-0319-F.

United States District Court, D. Massachusetts.

April 2, 1984.

Mary Ellen McCarthy, Western Mass Legal Services Inc., Holyoke, Mass., for Katherine Bouchard, Midas Turgeon, George Stephens, Adolph DeDeurwaerder, John Svoboda, Lottie Sypulski and Carolyn Barry.

Joseph J. McGovern, Boston, Mass., for defendant.

MEMORANDUM

FREEDMAN, District Judge:

I. INTRODUCTION

The plaintiffs, in two cases¹ consolidated for a hearing, challenge the methods used by the Secretary to compute the optional state supplementary payment distributed under Title XVI of the Social Security Act, 42 U.S.C. §§ 1381 et seq., when income is "deemed" from an ineligible spouse to a categorically eligible² individual. The plaintiffs to the class action seek an order reversing the final decision of the Secretary in each of their administrative appeals and a similar order running to the entire class. They also seek declaratory and injunctive relief. For the reasons stated herein, the Court concludes the Secretary incorrectly calculated the amount of the state optional supplementary payment due the plaintiffs and the class which they represent. Accordingly, the motion of the plaintiff class for summary judgment must be granted on the merits of the action and on the requests for prospective declaratory and injunctive relief. However, the prayer for an order to remand all applications to the Secretary for recalculation in accordance with this Memorandum must be denied in part.

II. FACTS

The relevant facts of this case are undisputed. The plaintiffs are all categorically eligible for SSI benefits on the basis of age, blindness or disability. They have all, for various periods of time, lived in the same household with a spouse who did not meet the standards for categorical eligibility of the SSI program. Each had spousal income deemed to them for purposes of determining plaintiffs' financial eligibility for SSI and the amount of benefits. 42 U.S.C. § 1382c(f)(1). Plaintiffs are either ineligible for or receive a smaller state supplementary benefit than they would if their state benefits were calculated in the same manner as is done for purposes of computing their federal benefits.

The eight named plaintiffs all filed timely appeals alleging that the Social Security Administration ("SSA") had improperly calculated the Massachusetts optional state supplement. Because of the similarity of the cases in light of the issue presented, it is unnecessary to recount the details of all the consolidated actions; however, for purposes of illustration, I will set forth the factual and procedural background of two of the plaintiffs represented today.

Katherine Bouchard resides in Pittsfield, Massachusetts. She is categorically eligible for SSI on the basis of disability. Between March 1977 and July 1979, she resided in the same household with her spouse, who was not eligible for SSI. His income was deemed to be available to her in order to determine financial eligibility for SSI. On July 2, 1979, her spouse became eligible for SSI, and she was no longer subject to the provision of the Act. Her administrative appeal was denied by an Administrative Law Judge ("ALJ"). On January 18, 1978, the Appeals Council denied her request for review thereby affirming the ALJ's decision as the final decision of the Secretary.

Plaintiff John Svoboda resides in Northampton, Massachusetts. He is categorically eligible for SSI on the basis of age. Between April 1978 and May 1980, he resided in the same household with his ineligible spouse, whose income was deemed to be available to plaintiff. On May 1980, his spouse became eligible for SSI, and he was no longer subject to the provision of the Act. Svoboda was denied benefits but following a timely appeal, an ALJ entered a decision in his favor. Tr. at 148. The Appeals Council then ruled, in a consolidated case,³ that the method used by the SSA in determining the amount of optional state supplementary benefits payable fully complied with the requirements of the Social Security Act and the implementing regulations.

In sum, therefore, plaintiffs are all eligible for SSI on the basis of age, blindness or disability. All are or have been sharing a household with a spouse who is or was ineligible for SSI benefits. All have been denied benefits, received a reduced amount, or were terminated from coverage under the SSI program. All have timely appealed the rulings through the Appeals Council and received adverse rulings. All are therefore now final decisions of the Secretary, subject to judicial review. 42 U.S.C. § 1383.

On January 11, 1982, the Court certified a class of plaintiffs consisting of all Massachusetts residents who:

1) Have applied to the Secretary for or have received SSI benefits and have been found categorically eligible for SSI benefits;

2) Have resided in the same household with an ineligible spouse whose income is subject to the statutory deeming requirements set out in 42 U.S.C. § 1382c(f)(1);

3) Have Countable Income below the Massachusetts SSI standard for an eligible individual; and

4) Have Countable Income, together with Countable Income of their ineligible spouses, lower than the Massachusetts SSI standard for an eligible couple.

The named plaintiffs, therefore, adequately represent the interests of the class of persons similarly situated.

III. THE SUPPLEMENTAL SECURITY PROGRAM

Supplemental Security Income, Title XVI of the Social Security Act, 42 U.S.C. §§ 1381 et seq., is a federal program of monthly payments to aged, blind or disabled persons who have little or no income and resources. The SSI program was passed on October 30, 1972 and became effective on January 1, 1974. P.L. 92-603. The program replaced the previous state administered Social Security Act income maintenance programs of Aid to the Permanently and Totally Disabled ("APTD"), Old Age Assistance ("OAA"), and Aid to the Blind ("AB"). Id., Title III, § 303(a), Oct. 30, 1972; 86 Stat. 1484, repealing Titles I, X and XVI of the Social Security Act.

Under the previous programs, each state had been free to determine both the level of need and the level of benefits due to applicants. This freedom, plus the fact that each state administered its own program, led to considerable variation among the states as to financial eligibility and degree of disability or blindness required in order to qualify for assistance. Title XVI was enacted, in part, to remedy these variations in eligibility requirements. The federal benefit payment level was to provide a nationally uniform minimum benefit.

The legislature recognized that this national minimum would be higher than the benefit level provided under the old program in some states, but lower than the benefit level which had been in place in other states. Congress therefore authorized states to supplement the federal payment to reflect the varying costs of living among the several states. 42 U.S.C. § 1382e.⁴ States who elected to offer this optional state supplementary payment were permitted to administer the distribution of the payment separately or enter into an agreement with the federal government under which the Secretary would make supplementary payments on behalf of the state. 42 U.S.C. § 1382e(a). These payments would be subject to any rules, regulations and provisions which the Secretary found necessary to achieve the efficient and effective administration of both programs. 42 U.S.C. § 1382e(b)(2).⁵ The Secretary's regulations pertinent to state supplementary payments are set forth in 20 C.F.R., Subpart T §§ 416.2001 et seq. The federal government, therefore, assumed complete control of the administration of optional supplementary payments offered by states who entered into appropriate federal-state agreements. 42 U.S.C. § 1382e(a).

Congress wished to encourage the administration of state supplementary payments by the federal government. Uniform administration would "avoid unnecessary duplication of administrative costs, would permit the states to take advantage of the improved methods and procedures ... and would tend to foster national uniformity in the operation of assistance programs." H.Rep.P.L. 92-603, 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News, 4989, 5185. Federal-state agreements, therefore, were made attractive by incorporating several provisions into the statutory scheme.

First, the amount of the optional state supplement was specifically excluded from the definition of income for the purpose of computing eligibility and amount of federal benefit payment. 42 U.S.C. § 1382e(a). Secondly, the federal government assumed the entire financial burden of administrating the distribution of federal and state payments, requiring states to reimburse the government only the amount actually distributed in the form of payments to needy individuals. 42 U.S.C. § 1382e(d). Finally, the government agreed to a "hold harmless" provision. Congress recognized that:

by entering into agreements for federal administration of their supplemental payments, states will be losing all administrative control over the operation of those benefits. It must be recognized, however, that states may not fully share this confidence and also that patterns of state-to-state migration could result in increased caseloads for a given state even if national caseloads remain stable or decrease.... The statute, therefore, includes a "hold harmless" provision designed to assure the states that their welfare expenditures will not be increased because of the effects of the provisions of this bill....

H.Rep.P.L. 92-603, 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad. News, 4989, 5186-5187.

The "hold harmless" provision, P.L. 92-603 § 401(a)(1), provided that if the annual...