Johnson v. Cohen

• Decision Date: 28 September 1987
• Docket Number: 86-1107 and 86-1149,Nos. 86-1101,s. 86-1101
• Citation: 836 F.2d 798
• Parties: JOHNSON, Natasha, on behalf of herself and her minor children and all other similarly situated persons, Appellant in 86-1149, v. COHEN, Walter, Individually and in his official capacity as Secretary of the Pennsylvania Department of Public Welfare, Stovall, Don Jose, Individually and in his official capacity as Executive Director of the Philadelphia County Board of Assistance, Appellants in 86-1107, Heckler, Margaret M., Individually and in her official capacity as Secretary of the United States Department of Health and Human Services. Appeal of Margaret M. HECKLER, Secretary of the United States Department of Health and Human Services, Appellant in 86-1101. . Submitted pursuant to Third Circuit Rule 12(6)(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 798

836 F.2d 798

JOHNSON, Natasha, on behalf of herself and her minor children and all other similarly situated persons Appellant in 86-1149, v. COHEN, Walter, Individually and in his official capacity as Secretary of the Pennsylvania Department of Public Welfare Stovall, Don Jose, Individually and in his official capacity as Executive Director of the Philadelphia County Board of Assistance, Appellants in 86-1107 Heckler, Margaret M., Individually and in her official capacity as Secretary of the United States Department of Health and Human Services Appeal of Margaret M. HECKLER, Secretary of the United States Department of Health and Human Services, Appellant in 86-1101.

Nos. 86-1101, 86-1107 and 86-1149.

United States Court of Appeals, Third Circuit.

Submitted pursuant to Third Circuit Rule 12(6)(a)

Sept. 28, 1987.

Decided Dec. 31, 1987.

William Kanter, Carlene V. McIntyre, U.S. Dept. of Justice, Civil Div., Appellate Staff, Washington, D.C., for Federal appellant/cross-appellee.

John O.J. Shellenberger, Deputy Atty. Gen., Philadelphia, Pa., for State appellants/cross-appellees.

Deborah Harris, Community Legal Services, Inc., Amy E. Hirsch, Community Legal Services, Inc., Philadelphia, Pa., for appellees/cross-appellants.

Before GIBBONS, Chief Judge, and HIGGINBOTHAM, Circuit Judge, and COWEN, District Judge. ^*

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

The initial issue presented for review on this appeal concerned the constitutionality of Title IV-A of the Social Security Act, 42 U.S.C. Secs. 601-615 (1982 & Supp.1987) ("AFDC"), as amended by Sec. 2640(a) of the Deficit Reduction Act of 1984, P.L. 98-369, 98 Stat. 494, 1145 ("DEFRA"). More specifically, the question raised was whether the district court correctly held that Secs. 602(a)(38) and 602(a)(26) of the AFDC, which had been applied by appellants to require the assignment of child support payments received by each dependent child to the Pennsylvania Department of Public Welfare ("DPW") as a condition precedent to the receipt of AFDC benefits by the family, required a prior hearing in each case to determine whether the support payments were being used for the exclusive benefit of the child, and thus not properly considered "family" income.

Subsequent to the filing of this appeal, the substantive issue that it raises was dispositively resolved by the United States Supreme Court in Bowen v. Gilliard, --- U.S. ----, 107 S.Ct. 3008, 97 L.Ed.2d 485 (1987), discussed below at III. What remains for our consideration before we may properly conclude this appeal, however, is the challenge to our jurisdiction raised by the appellees/cross-appellants. They assert that exclusive jurisdiction over appellants' claim rested with the Supreme Court pursuant to 28 U.S.C. Sec. 1252 (1982), and therefore that this appeal should be dismissed. ¹ After consideration of this contention, we conclude that our jurisdiction over this appeal is proper pursuant to 28 U.S.C. Sec. 1291 (1982), and therefore we will adjudicate this appeal on its merits. In accordance with Bowen v. Gilliard, we will reverse the district court's decision to the extent that it precludes enforcement of the statute, and vacate the injunction that the district court ordered. Also, in light of Bowen v. Gilliard, we will reject the contentions raised on the cross-appeal and affirm that part of the district court's decision that upheld the constitutionality of the statute.

I.

The AFDC benefits program was designed by Congress to be implemented under a collaborative state and federal effort. Federal funds are made available to states that satisfactorily devise plans that fulfill the requirements of Title IV-A. See 42 U.S.C. Sec. 602(b). AFDC benefits are implemented by each state in accordance with the state's regulations, and regulations promulgated by the Secretary of Health and Human Services ("the Secretary").

In 1984 Congress amended the AFDC, consistent with overall budget reductions, by its enactment of DEFRA, and thereby effected broad changes to the administration of social welfare benefits. One section of that act, of particular importance to this appeal, provided that

as a condition of eligibility for aid, each applicant or recipient will be required--

(A) to assign the State any rights to support from any other person such applicant may have (i) in his own behalf or in behalf of any other family member for whom the applicant is applying for or receiving aid, and (ii) which have accrued at the time such assignment is executed ...

42 U.S.C. Sec. 602(a)(26). The statute further provided that

in making the determination [of eligibility] under [this statute] with respect to a dependent child ... the State agency shall ... include--

(A) any parent of such child, and

(B) any brother or sister of such child, ... if such parent, brother or sister is living in the same home as the dependent child,

and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family ...

42 U.S.C. Sec. 602(a)(38). To implement these provisions the Secretary published interim final regulations in 1984. See 45 C.F.R. Sec. 206.10(a) (1986). Those regulations sought to enact what the Secretary interpreted to be the congressional mandate. They provide that

[f]or AFDC only, in order for the family to be eligible, an application with respect to a dependent child must also include, if living in the same household and otherwise eligible for assistance: (A) [a]ny natural or adoptive parent, or stepparent ... and (B) [a]ny blood-related or adoptive brother or sister.

45 C.F.R. Sec. 206.10(a)(1)(vii). ² Prior to the DEFRA amendments and the implementing regulations, the amount of an AFDC family's benefit was calculated exclusive of income that the parent or caretaker received as child support for non-AFDC children. Pursuant to the amendments, any income that a dependent child receives, including child support that by itself sufficiently supports the child for whom it is intended, is deemed "family" income and must be included in the income figure that is used to determine eligibility. ³ Each dependent child is considered as part of the family unit, and it is the size of that unit that is used in the calculation of benefits. Child support income that is not so large that it makes the family unit ineligible for AFDC benefits must be assigned or "deemed" to the DPW before the family can receive any benefits. ⁴

The appellees/cross-appellants, members of a class of parents who receive AFDC benefits, ("parents"), sued to enjoin the enforcement of the statute. They argued that the defendants/appellants, Walter Cohen, the Secretary of the Pennsylvania Department of Public Welfare, and Don Jose Stovall, Executive Director of the Philadelphia County Board of Assistance ("state appellants") and the Secretary had interpreted and applied the statute in a manner that failed to give proper consideration to the circumstances of the significant number of needy families that consist of single parents and children who are not whole-blood siblings. The parents asserted that in many of these families, although one of the dependent children received direct support from the estranged parent, his or her half-brothers and half-sisters were not similarly provided for. The income received by the supported child, they argued, could not appropriately be considered "family" income because it was intended solely for the benefit of one child. They maintained that Pennsylvania law required the caretaker in such circumstances to expend the child support payments exclusively on behalf of the supported child. See 55 Pa.Code Sec. 183.24 (1986); Brief of Appellees/Cross-Appellants at viii (citing Scott v. Commonwealth Department of Public Welfare, 46 Pa.Commw. 403, 406 A.2d 594 (1979) (holding that court orders that specify support for particular child or children are legally restricted to use of named persons and are therefore disregarded in determining eligibility of the assistance unit)); see also Joint-Appendix ("J.App.") at 80 (district court's conclusions of law p 27). The parents further argued that notwithstanding this legal obligation, in many instances the supported child's special needs required that the caretaker spend the payments exclusively for that child's benefit. See J.App. at 120-21; Brief of Appellees/Cross-Appellants at xii; see also J.App. at 53-54 (district court's conclusions of fact paragraphs 42-45).

The parents contended that Sec. 602(a)(38) did not authorize the assignment of child support to the DPW as a condition to the unsupported siblings' eligibility for AFDC, because the AFDC statute expressly excludes "legally unavailable funds" from any benefits calculus. See Brief of Appellees/Cross-Appellants at 2. They cite Heckler v. Turner, 470 U.S. 184, 105 S.Ct. 1138, 84 L.Ed.2d 138 (1985), for the proposition that Sec. 602(a)(7) "prohibits attribution of unavailable income to an applicant or recipient in the AFDC program," see Brief of Appellees/Cross-Appellants at 1-2, ⁵ and argue that pursuant to Pennsylvania law, the term "legally unavailable funds" includes child support payments. Therefore, the parents asserted, Sec. 602(a)(38) could not be construed to require inclusion of these payments because there is no clear expression by Congress demonstrating its intent to condition federal benefits on the usurpation of Pennsylvania law. Finally, the parents argued that the appellants' interpretation of the statute served to stigmatize the supported child by requiring that he or she become an AFDC ward, and more significantly, that the deeming requirement constituted a taking without due process in contravention to the fifth and fourteenth amendments to the Constitution.

The parents brought suit in the United States District Court for the Eastern District of Pennsylvania, seeking to enjoin the...