Batterton v. Francis

• Decision Date: 20 June 1977
• Docket Number: No. 75-1181,75-1181
• Citation: 97 S.Ct. 2399,53 L.Ed.2d 448,432 U.S. 416
• Parties: Richard A. BATTERTON, etc., et al., Petitioners, v. Robert FRANCIS, etc., et al
• Court: U.S. Supreme Court

432 U.S. 416

97 S.Ct. 2399

53 L.Ed.2d 448

Richard A. BATTERTON, etc., et al., Petitioners,

v Robert FRANCIS, etc., et al.

No. 75-1181.

Argued April 19, 1977.

Decided June 20, 1977.

Syllabus

Section 407(a) of the Social Security Act delegates to the Secretary of Health, Education, and Welfare the power to prescribe "standards" for determining what constitutes "unemployment" for purposes of eligibility for benefits under the Aid to Families with Dependent Children-Unemployed Fathers (AFDC-UF) program. Pursuant to § 407(a), the Secretary promulgated a regulation authorizing participating States, within their discretion, to exclude from the definition of an unemployed father one "whose unemployment results from participation in a labor dispute or who is unemployed by reason of conduct or circumstances which result or would result in disqualification for unemployment compensation under the State's unemployment compensation law." In class actions on behalf of families who were denied AFDC-UF benefits under a state rule because the fathers' unemployment resulted from discharges for misconduct, involvement in a strike, or voluntarily quitting their jobs, the courts below held the federal regulation invalid as exceeding the Secretary's statutory authority. Held : The regulation is a proper exercise of the Secretary's statutory authority and is reasonable. Pp. 424-432.

(a) Since the statute expressly delegated to the Secretary the power to prescribe standards for determining what constitutes "unemployment" for purposes of AFDC-UF eligibility, a reviewing court is not free to set aside the regulation simply because it would have interpreted the statute in a different manner from the Secretary, but only if the Secretary exceeded his statutory authority or the regulation is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Pp. 424-426.

(b) By allowing the States to exclude persons who would be disqualified under the State's unemployment compensation law, the Secretary has incorporated a well-known and widely applied standard for "unemployment," and exclusion of individuals who are out of work as a result of their own conduct and thus disqualified from state unemployment compensation is consistent with the goal of AFDC-UF, namely, to aid the families of the involuntarily unemployed. Pp. 426-429.

(c) The power to prescribe "standards" for determining what constitutes "unemployment" gives the Secretary sufficient flexibility to recognize local options in determining AFDC-UF eligibility, including the option of denying unemployment compensation benefits to participants in a labor dispute. While the congressional purpose was to promote greater uniformity in the application of the AFDC-UF program, such goal can be met without imposing identical standards on each State, and hence the Secretary's approach does not defeat the statute's purpose. Pp. 429-432.

529 F.2d 514 and 515, reversed.

Joel J. Rabin, Baltimore, Md., for petitioners.

C. Christopher Brown, Baltimore, Md., for respondents.

Mr. Justice BLACKMUN delivered the opinion of the Court.

This case concerns the validity of 45 CFR § 233.100(a)(1) (1976),¹ a regulation promulgated by the Secretary of Health, Education, and Welfare (HEW) pursuant to a delegation of rulemaking authority in § 407(a) of the Social Security Act, 42 U.S.C. § 607(a).² The issue is whether the regulation is a proper exercise of the Secretary's statutory authority.

I

The statute is contained in the Social Security Act's Title IV, which has to do primarily with Aid to Families with Dependent Children (AFDC). The AFDC program was established by the Act in 1935 to provide welfare payments where children are needy because of the death, absence, or incapacity of a parent. 42 U.S.C. § 606(a). The original conception of AFDC was to allow widows and divorced mothers to care for their children at home without having to go to work, thus eliminating the practice of removing needy children in situations of that kind to institutions. See Burns v. Alcala 420 U.S. 575, 581-582, 95 S.Ct. 1180, 1184-1185, 43 L.Ed.2d 469 (1975). AFDC was not originally designed to assist children who are needy simply because the family breadwinner is unable to find work; it was contemplated that other programs would alleviate that problem by attacking unemployment directly. See Carleson v. Remillard, 406 U.S. 598, 603, 92 S.Ct. 1932, 1935, 32 L.Ed.2d 352 (1972); King v. Smith, 392 U.S. 309, 313, 327-329, 88 S.Ct. 2128, 2131, 2138-2139, 20 L.Ed.2d 1118 (1968). Other parts of the Act encouraged the establishment of state unemployment compensation programs, primarily through tax incentives, but the federal role in these programs is not so great as in AFDC. See Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 97 S.Ct. 1898, 52 L.Ed.2d 513 (1977).

Title IV was amended in 1961 to add § 407. Pub.L. 87-31, § 1, 75 Stat. 75. This section established an experimental program (AFDC-UF) ³ to provide assistance in some cases where the unemployment of a parent causes dependent children to be needy. The States were given broad power to define "unemployment" for purposes of the program and to determine the relationship of this new program to existing state unemployment compensation plans. In 1968 the AFDC-UF program was made permanent, 81 Stat. 882, but the eligibility criteria were modified to withdraw some of the definitional authority delegated to the States. The statute now requires a participating State to provide assistance where a needy child "has been deprived of parental support or care by reason of the unemployment (as determined in accordance with standards prescribed by the Secretary) of his father." 42 U.S.C. § 607(a). See Philbrook v. Glodgett, 421 U.S. 707, 709-711, 95 S.Ct. 1893, 1896-1897, 44 L.Ed.2d 525 (1975).⁴

Both AFDC and AFDC-UF are cooperative ventures of the Federal Government and the States. States that elect to participate in these programs administer them under federal standards and HEW supervision. Funding is provided from state and federal revenues on a matching basis. See, e. g., Shea v. Vialpando, 416 U.S. 251, 253, 94 S.Ct. 1746, 1750, 40 L.Ed.2d 120 (1974); King v. Smith, 392 U.S., at 316, 88 S.Ct., at 2132. Although every State currently participates in AFDC, only about half the States participate in the AFDC-UF program. Dept. of HEW, Public Assistance Statistics, Oct. 1976, table 5, p. 9 (1977).

II

The instant case originated in 1971 as a challenge to Rule 200.X.(A)(2) of the Maryland Department of Employment and Social Services. That Rule denies AFDC-UF benefits to families where the father is out of work for reasons that disqualify him for state unemployment insurance compensation.⁵ The original plaintiffs represented two classes of families with dependent children who were thereby ineligible for AFDC-UF benefits: one where the father had been discharged for misconduct (excessive absenteeism), and the other where the father was out of work because of a strike. The defendants were Maryland officials having responsibility for the administration of public assistance grants in the State. A three-judge United States District Court was convened to consider the claim that Rule 200.X.(A)(2) violated the Equal Protection Clause of the Fourteenth Amendment. The court sustained the constitutionality of the state regulation but went on to hold it invalid because it was contrary to the federal regulation prescribing standards for the determination of unemployment under the AFDC-UF program. Francis v. Davidson, 340 F.Supp. 351 (Md.), summarily aff'd, 409 U.S. 904, 93 S.Ct. 223, 34 L.Ed.2d 168 (1972) (Francis I ). Although HEW did not agree that its regulation was inconsistent with Rule 200.X.(A)(2), the Solicitor General, in his memorandum for the United States as amicus curiae, filed in Francis I at this Court's invitation, 408 U.S. 920, 92 S.Ct. 2495, 33 L.Ed.2d 330 (1972), suggested a summary affirmance in that case in light of the then-forthcoming revision of the HEW regulation.

The HEW regulation, as amended, expressly, authorizes some state discretion in defining unemployment. Generally, it requires the States to consider a person to be unemployed for AFDC-UF purposes if he works less than 100 hours a month, except for intermittent employment, and "except that, at the option of the State, such definition need not include a father whose unemployment results from participation in a labor dispute or who is unemployed by reason of conduct or circumstances which result or would result in disqualification for unemployment compensation under the State's unemployment compensation law." 45 CFR § 233.100(a)(1) (1976). The Secretary had stated that the purpose of this amendment was to nullify the effect of Francis I by making explicit the HEW policy of allowing the States to exclude AFDC-UF participants based on the particular reason that the father was out of work.⁶

After the amended HEW regulation became effective, the defendant Maryland officials moved that the District Court dissolve its earlier injunction issued March 16, 1972, after Francis I had been decided, against enforcement of Rule 200.X.(A)(2). That court recognized that "(t)he conflict between the federal and the Maryland regulation ended after the former was amended," but nevertheless it denied the motion and continued the injunction on the ground that the amended federal regulation now was in conflict with the federal statute. Francis v. Davidson, 379 F.Supp. 78, 81 (Md.1974) (Francis II ). First, with regard to the class of fathers discharged for misconduct, the District Court stated that these people are necessarily "unemployed," within the meaning of the statute, and that any contrary regulation is invalid. Second, the court recognized that it is not clear whether the statutory term "unemployed" includes persons involved in a labor dispute. The court held, however, that the HEW regulation was...