Beckman v. Rominger, C94-0233.
| Decision Date | 28 June 1995 |
| Docket Number | No. C94-0233.,C94-0233. |
| Citation | 891 F. Supp. 1322 |
| Parties | Jeffrey D. BECKMAN, Plaintiff, v. Richard ROMINGER, as Acting Secretary of the United States Department of Agriculture, Charles Palmer, as Director of the Iowa Department of Human Services, Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
Martin Ozga of Legal Services Corp. of Iowa, Des Moines, IA, Jeffrey L. Harris of Legal Services Corp. of Iowa, Cedar Rapids, IA, for plaintiff.
Barbara E.B. Galloway, Asst. Atty. Gen., Des Moines, IA, and Larrence Kudej, Asst. U.S. Atty., Cedar Rapids, IA, and Martha E. Rubio and Thomas W. Millet, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, for defendants.
This matter comes before the court pursuant to defendants' February 15, 1995 motion to dismiss (docket number 11). Plaintiff filed a resistance to the motion on March 8, 1995. On March 21, 1995, the parties consented to proceed before the undersigned United States Magistrate Judge for any and all proceedings in this case pursuant to 28 U.S.C. § 636(c). The motion is granted.
Plaintiff Jeffrey D. Beckman filed an application for food stamps on March 25, 1994 under the Food Stamp Act ("Act"), 7 U.S.C. § 2011 et seq. At that time, plaintiff owned a 1993 Nissan Sentra with a fair market value of $8,450.00. As of April 26, 1994, plaintiff owed approximately $7,818.30 on the car. Pursuant to 7 U.S.C. § 2014(g)(2) and 7 C.F.R. § 273.8(h) of the Food Stamp Act, the Iowa Department of Human Services (IDHS)1 counted the fair market value of plaintiff's automobile in excess of $4,500 (equaling $3,950) as a household financial resource. Because that amount exceeded the $2,000 limit2 on allowable financial resources, plaintiff's application was denied by IDHS on April 6, 1994.
Plaintiff appealed that determination and a hearing was held before an Administrative Law Judge (ALJ) on May 26, 1994. At the hearing, plaintiff argued that IDHS's use of the fair market value of his automobile as part of his allowable household financial resources was contrary to the provisions of § 2014(g). Specifically, plaintiff argued that the fair market value of his automobile should have been excluded entirely as an "inaccessible resource" under § 2014(g)(5) because he only has a small equity interest in the vehicle. On June 27, 1994, the ALJ issued a proposed decision rejecting plaintiff's argument and affirming the denial of plaintiff's application for food stamps. Finally, on August 17, 1994, the director of IDHS, Charles Palmer, adopted the ALJ's proposed decision as the final decision of the IDHS. Plaintiff then filed the instant complaint seeking declaratory and injunctive relief asserting that the defendants violated the provisions of 7 U.S.C. § 2014(g)(5) by failing to consider his automobile as an "inaccessible resource."
Defendants argue that the plain language and legislative history of 7 U.S.C. § 2014(g) show that the "inaccessible resource" provision does not apply to licensed automobiles such as the plaintiff's Nissan Sentra. Defendants further argue that even if the plain language does not mandate that nonexempt licensed vehicles be included in the plaintiff's household financial resources, the Secretary's interpretation of § 2014(g) is reasonable and therefore is entitled to substantial deference. Plaintiff asserts that the Secretary's interpretation of § 2014(g)(5) regarding the application and scope of the "inaccessible resource rule", as set forth in Administrative Notice A-24-92, is void as violative of the rulemaking provisions of the Administrative Procedures Act, 5 U.S.C. § 553, because it was issued without the requisite notice and comment period. Therefore, plaintiff asserts that the Secretary's "interpretation" of § 2014(g)(5) is not entitled to judicial deference.
Defendants seek dismissal of the plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. In considering a motion to dismiss under Rule 12(b)(6), the court must assume that all facts alleged in the plaintiff's complaint are true, and must liberally construe those allegations. "A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Thus, it is only in the "unusual case" where the complaint on its face reveals some insuperable bar to relief that a dismissal under Rule 12(b)(6) is warranted. Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir.1982). Nevertheless, such motions "can serve a useful purpose in disposing of legal issues with the minimum of time and expense to the interested parties." Hiland Dairy, Inc. v. Kroger Co., 402 F.2d 968, 973 (8th Cir.1968), cert. denied, 395 U.S. 961, 89 S.Ct. 2096, 23 L.Ed.2d 748 (1969).
The sole issue in this case involves the interrelationship of two specific provisions of the Food Stamp Act governing household financial resources: 7 U.S.C. § 2014(g)(2) and 7 U.S.C. § 2014(g)(5).3 Section 2014(g)(2) specifically addresses the treatment of licensed vehicles as part of a household's financial resources and provides that:
The Secretary shall, in prescribing inclusions in, and exclusions from, financial resources, ... include in financial resources ... any licensed vehicle (other than one used to produce earned income or that is necessary for transportation of a physically disabled household member ...) used for household transportation or used to obtain or continue employment to the extent that the fair market value of any such vehicle exceeds a level set by the Secretary, which shall be $4,500 through August 31, 1994, ...
7 U.S.C. § 2014(g)(2). Thus, under § 2014(g)(2), a household must include the fair market value of any nonexempt vehicle in excess of $4,500 as an available financial resource when determining eligibility under the Act. See 7 C.F.R. § 273.8(h)(6).
However, in 1990, Congress enacted the "inaccessible resource" provision of 7 U.S.C. § 2014(g)(5) to exempt from inclusion in an applicant's financial resources any resource that the household would be unable to sell for any significant return. Specifically, 7 U.S.C. § 2014(g)(5), as amended in 1991, provides that:
The Secretary shall promulgate rules by which State agencies shall develop standards for identifying kinds of resources that, as a practical matter, the household is unlikely to be able to sell for any significant return because the household's interest is relatively slight or because the cost of selling the household's interest would be relatively great. Resources so identified shall be excluded as inaccessible resources. A resource shall be so identified if its sale or other disposition is unlikely to produce any significant amount of funds for the support of the household....
7 U.S.C. § 2014(g)(5).
In the present case, plaintiff argues that because he only has a small equity value in his automobile, his automobile should be considered an "inaccessible resource" under § 2104(g)(5) since "its sale or other disposition is unlikely to produce any significant amount of funds for the support of the household." Defendants assert that § 2014(g)(2) specifically governs the evaluation of licensed vehicles as a household resource and that the general "inaccessible resource" provision was not intended to apply to licensed vehicles.
The Supreme Court has set forth a two-step procedure for analyzing an administrative agency's statutory construction and interpretation. In Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Court stated that:
when a court reviews an agency's construction of a statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has spoken directly to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (citations omitted).
As required by the two-step analysis in Chevron, the court must first determine whether Congress explicitly intended the "inaccessible resource" provision in § 2014(g)(5) to apply to licensed vehicles not excluded from household resources under § 2014(g)(2). Nowhere in the provisions of the Food Stamp Act or its legislative history has Congress directly addressed the precise issue of whether § 2014(g)(5) applies to licensed vehicles. Indeed, other courts addressing the issue have similarly been unable to discern an express Congressional intent from the statute itself or its legislative history. See e.g., Alexander v. North Carolina Department of Human Resources, 116 N.C.App. 15, 446 S.E.2d 847, 851 (1994) (...
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...Bizzell v. Espy, No. LR-C-94-267 (E.D.Ark.1995) (same); Butler v. Miller, No. 93-40187 (E.D.Mich.1994) (same); Beckman v. Rominger, 891 F.Supp. 1322 (N.D.Iowa 1995) (same); Alexander v. North Carolina Department of Human Resources, 116 N.C.App. 15, 446 S.E.2d 847 (1994) (same). But see Vale......