Clifford v. Janklow, 84-1149

• Decision Date: 02 May 1984
• Docket Number: No. 84-1149,84-1149
• Citation: 733 F.2d 534
• Parties: Linda CLIFFORD; Melvina Lesmeister and Pam Jones, on behalf of themselves and all others similarly situated, Appellees, v. William JANKLOW, Governor of the State of South Dakota, and James Ellenbecker, Secretary of South Dakota Department of Social Services, and the Agents, Employees and Successors of the above, Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 534

733 F.2d 534

Linda CLIFFORD; Melvina Lesmeister and Pam Jones, on behalf

of themselves and all others similarly situated, Appellees, v. William JANKLOW, Governor of the State of South Dakota, and James Ellenbecker, Secretary of South Dakota Department of

Social Services, and the Agents, Employees and Successors of

the above, Appellants.

No. 84-1149.

United States Court of Appeals,

Eighth Circuit.

Submitted April 5, 1984.

Decided May 2, 1984.

Mark V. Meierhenry, Atty. Gen., Janice Godtland, Asst. Atty. Gen., Dept. of Social Services, Pierre, S.D., for appellants.

Black Hills Legal Services, Inc. by Mark Falk, Stephen C. Hoffman, Rapid City, S.D., for appellees.

Before HEANEY, ROSS and FAGG, Circuit Judges.

HEANEY, Circuit Judge.

Once again we are called upon to determine whether the State of South Dakota's method of distributing federal funds through its Low Income Energy Assistance Program (LIEAP) violates the Low-Income Home Energy Assistance Act of 1981 (LIHEAA), 42 U.S.C. Secs. 8621-8629 (Supp. V 1981). In Crawford v. Janklow, 710 F.2d 1321, 1324 (8th Cir.1983), we affirmed the district court's injunction against the categorical exclusion of subsidized housing residents from South Dakota's LIEAP. For the 1983-84 heating season, the state devised a distribution plan which categorizes subsidized housing residents as "partially vulnerable" to heating costs and reduces their LIEAP grant accordingly. The district court ¹ held this differential treatment of subsidized housing residents violated provisions of the LIHEAA and the equal protection clause. The court ordered the state to pay the same level of benefits to subsidized housing residents as it pays to similarly situated applicants who do not reside in subsidized housing. We affirm.

BACKGROUND

Congress has been providing energy assistance to low income households since 1980. The original Home Energy Assistance Act of 1980 was contained in the Windfall Profit Tax legislation. 42 U.S.C. Secs. 8601-8612 (Supp. IV 1980). The stated purpose of that Act was to help low income households meet the rising costs of home energy. In 1981, Congress repealed the 1980 Act as part of the Omnibus Budget Reconciliation Act and replaced it with a fiscally trimmer version, the LIHEAA, which removed many of the federal regulations that had controlled the distribution of federal energy assistance funds. South Dakota has received block grants under the LIHEAA for the past several years.

For the fiscal year 1983, the state initially categorically excluded people living in subsidized housing from the state LIEAP. The district court struck down the categorical exclusion in Crawford v. Janklow, 557 F.Supp. 1146 (D.S.D.1983), aff'd, 710 F.2d 1321 (8th Cir.1983). The state then devised a "revised plan" for distributing the funds remaining for that year. This revised 1983 plan is similar to the 1984 plan at issue in this case. Both plans involve calculations which result in at most partial LIEAP payments for subsidized housing residents. On August 17, 1983, the district court denied the plaintiffs' objections to the 1983 plan in an order indicating it had no jurisdiction. The plaintiffs appealed and we remanded that case in a separate order filed in conjunction with this opinion, Crawford v. Janklow, 733 F.2d 541 (8th Cir.1984).

The focus of this appeal is South Dakota's LIEAP for the 1984 fiscal year. The 1984 program divides applicants into two classes: those who reside in subsidized housing and those who do not. The state determines the LIEAP benefit level for applicants who do not reside in subsidized housing by applying a "payment matrix" which takes into account income level, region of the state, and type of fuel. The matrix is designed so that a household with an income under $7,500 can receive seventy percent of its estimated heating costs; a household with an income over $7,500 and under $9,800 can receive sixty percent of its estimated heating costs; a household with an income over $9,800 and under $12,800 can receive fifty percent of its estimated heating costs; and a household with an income over $12,800 can receive forty percent of its estimated heating costs. ² The state's plan designates these applicants as "fully vulnerable" to heating costs and they do not need to prove actual heating expenses. ³

The state's plan designates residents of subsidized or public housing as "partially vulnerable" to heating costs because their shelter subsidies take into account heating expenses. The district court focused on housing subsidized under 42 U.S.C. Sec. 1437f (1976 & Supp. V 1981) (as amended), or "Section 8" housing, as illustrative. Section 8 residents pay up to thirty percent of their adjusted gross income for shelter costs including rent, electricity, heat, water and trash collection. The administering agency must figure average utility costs per subsidized unit in order to determine the total shelter costs for a subsidized household. These estimated utility costs, or "utility allowances," are not payments made to the Section 8 housing resident. Rather, the utility allowance, plus the contract rent, minus the family's contribution To determine a Section 8 housing resident's level of LIEAP benefits, the 1984 program isolates the amount designated for heat in the monthly utility allowance and multiplies that amount by twelve to arrive at a total heat allowance for the year. If this total exceeds the LIEAP benefit level for a similarly situated household, the Section 8 household is not entitled to LIEAP benefits. Ineligibility for LIEAP funds also makes the household ineligible for Energy Crisis Intervention Program funds. If the yearly Section 8 heating allowance is less than the LIEAP benefit level for a similarly situated household, the Section 8 household is entitled to the difference.

totals the government's subsidy on any given subsidized housing unit. In cases where the family pays utility costs to an outside supplier, that payment is deducted from their family contribution to assure they do not pay over thirty percent of their income for shelter. See U.S. Department of Housing and Urban Development Handbook 7420.7 Secs. 11-1--11-2 (1980) (incorporated by reference in the affidavit of Darlys Baum).

On December 7, 1983, South Dakota subsidized housing residents filed a class action challenging the state's 1984 LIEAP. The district court certified the class on December 23, 1983, and held a trial on the merits on January 10 and 11, 1984. The court expedited disposition of the case because the plaintiffs were seeking funds for the current heating season. By an order dated January 16, 1984, the court held the current LIEAP violated the LIHEAA provisions, 42 U.S.C. Secs. 8624(b)(5), 8624(b)(8) & 8624(f), and denied the plaintiff class equal protection. The court ordered the state to make full LIEAP payments to all class members who had applied for benefits in the current season. The state filed a motion for a stay in the district court on January 24, 1984. That court denied the stay on January 27, 1984. The state subsequently applied to this Court for a stay of the district court's order which was denied on February 9, 1984. This appeal followed.

DISCUSSION

We will not reach the constitutional issues raised by this appeal because the statutory grounds relied on by the district court are a sufficient basis for affirming its order. See Blum v. Bacon, 457 U.S. 132, 137-138, 102 S.Ct. 2355, 2359-2360, 72 L.Ed.2d 728 (1982); Crawford v. Janklow, supra, 710 F.2d at 1324. Although the state's revised plan has a surface appeal of rationality, we agree that it runs contrary to certain provisions of the LIHEAA. The district court found the state's LIEAP violated section 8624(b)(8) as well as sections 8624(f) and 8624(b)(5); we find it sufficient to affirm on our reading of these latter two sections.

A. 42 U.S.C. Sec. 8624(f)

The district court held the state's plan violated section 8624(f) of the LIHEAA. That section provides:

(f) Payments or assistance not to be deemed income or resources for any purpose under Federal or State Law

Notwithstanding any other provision of law, the amount of any home energy assistance payments or allowances provided to an eligible household under this subchapter shall not be considered income or resources of such household (or any member thereof) for any purpose under any Federal or State law, including any law relating to taxation, food stamps, public assistance, or welfare programs.

42 U.S.C. Sec. 8624(f) (Supp. V 1981).

This provision clearly prohibits the states from reducing a household's entitlement to other forms of public assistance based on its receipt of LIHEAA funds. See Schmiege v. Secretary of Agriculture, 693 F.2d 55, 56 (8th Cir.1982) (per curiam). The question presented here is whether the provision also evinces Congress's intent to prevent the states from achieving the same net effect by the opposite method, that is, reducing the LIHEAA grant based on the applicant's receipt of other forms of public assistance.

The LIHEAA specifically targets public assistance recipients as well as low income families for energy assistance. Section 8624(b)(2)(A) directs the states to make payments to households receiving: aid to families with dependent children (AFDC), supplemental security income (SSI), food stamps, and other veterans and survivor pension programs. All of these programs in some form or another take into account shelter costs because they are subsistence programs, designed to meet only the recipient's basic needs. Thus, for example, in South Dakota an AFDC family may receive a $163 maximum monthly shelter allowance. Of that amount, $120 is designated for rent and $43 is designated for utilities. Twenty-nine dollars of the utility allowance is the standard allowance for heat. S.D.Admin.R. 67:12:06:12(3) (1983). Multiplying this "heat allowance" by twelve yields an annual heat subsidy of $348. Like the Section...