Bell v. Massinga

• Decision Date: 14 November 1983
• Docket Number: No. 83-1227,83-1227
• Parties: Carolyn BELL and Maryland Welfare Rights Organization (Individually and on behalf of all others similarly situated), Appellants, v. Ruth MASSINGA, Secretary, Maryland Department of Human Resources (Individually and in his official capacity) and Richard S. Schweiker, Secretary of the United States Department of Health and Human Services (In his official capacity), Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 131

721 F.2d 131

Carolyn BELL and Maryland Welfare Rights Organization

(Individually and on behalf of all others

similarly situated), Appellants, v. Ruth MASSINGA, Secretary, Maryland Department of Human

Resources (Individually and in his official capacity) and

Richard S. Schweiker, Secretary of the United States

Department of Health and Human Services (In his official

capacity), Appellees.

No. 83-1227.

United States Court of Appeals, Fourth Circuit.

Argued Aug. 29, 1983.

Decided Nov. 14, 1983.

Myrna A. Butkovitz, Baltimore, Md. (Peter M.D. Martin, Dennis W. Carroll, Administrative Law Center, Legal Aid Bureau, Inc., Baltimore, Md., on brief), for appellants.

Nancy B. Shuger, Asst. Atty. Gen., Baltimore, Md. (Stephen H. Sachs, Atty. Gen., Baltimore, Md., on brief), for appellee Maryland.

Javier A. Arrastia, Asst. Regional Atty., Philadelphia, Pa. (Diane C. Moskal, Regional Atty., Dept. of Health and Human Services, Philadelphia, Pa., J. Frederick Motz, U.S. Atty., Glenda G. Gordon, Asst. U.S. Atty., Baltimore, Md., on brief), for appellee Margaret M. Heckler, Secretary, U.S. Dept. of Health and Human Services.

Before WINTER, Chief Judge, MURNAGHAN, Circuit Judge, and BUTZNER, Senior Circuit Judge.

HARRISON L. WINTER, Chief Judge:

The issue which this appeal presents has brought about conflicting answers by the two courts of appeals and the several district courts that have addressed it. The issue is whether, since enactment of Secs. 2301 and 2302 of the Omnibus Budget Reconciliation Act (OBRA), Pub.L. 97-35, 95 Stat. 843-45 (1981) (codified at 42 U.S.C. Secs. 602(a)(7) and (8)), in determining eligibility and benefits under the Aid to Families With Dependent Children (AFDC) program, ¹ mandatorily withheld taxes (federal, state and local income taxes, and Federal Insurance Contribution Act taxes) are to be treated as income available to an AFDC family with an employed member. How the question is answered in this case will determine the eligibility for benefits or the amount of benefits for as many as 3,000 AFDC families in the district from which the appeal is taken and an undetermined number of such families in other districts of this circuit.

This case arose by a class action in the district court charging that the Secretary of the Maryland Department of Human Resources and the United States Secretary of Health and Human Services are acting illegally when they determine AFDC eligibility and benefits on the basis of income before taxes, except to the extent that such taxes may be included in a statutory "disregard" of $75.00 per month. The district court held that they were not, and we affirm.

I.

The opinion of the district court is reported as Bell v. Hettleman, 558 F.Supp. 386 (D.Md.1983). It sets forth the facts and specific legal issues. As the opinion carefully recites, the statutes and regulations for determining eligibility and benefits for AFDC families have been amended from time to time since their inception in 1939. We are concerned with the 1981 OBRA amendments codified as 42 U.S.C. Secs. 602(a)(7) and (8). The pertinent portions are set forth below. ²

It is a fact that there has been "an uninterrupted, consistent interpretation stretching over forty years" of the terms "any other income" and "resources" as they appear in Sec. 602(a)(7). James v. O'Bannon, 715 F.2d 794, 801 (3 Cir.1983) (quoting Turner v. Prod, 707 F.2d 1109 (9 Cir.1983)). Briefly stated, the regulations which were promulgated in 1969 and readopted virtually unchanged after the enactment of OBRA expressed this interpretation by providing that "available" net income and resources are to be considered in determining need and benefits and "income and resources are considered available both when actually available and when the applicant has the legal ability to make such sum available for support and maintenance." See 45 C.F.R. Sec. 233.20(a)(3)(ii)(D), as amended by 47 Fed.Reg. 5648, 5675 (Feb. 5, 1982).

Principally on the basis of this long-standing construction, the Ninth Circuit in Turner held that "income" as used in Sec. 602(a)(7) meant income after mandatorily withheld taxes, i.e., take-home pay, and the beginning point for determining AFDC eligibility and benefits was thus income after taxes and not gross income. The Third Circuit in James held to the contrary. It concluded that the legislative history of OBRA made it clear that it was the intent of Congress in enacting OBRA that henceforth gross income was to be the starting point for determining AFDC eligibility and benefits and that taxes and other employment-related expenses were to be disregarded only to the extent that they met the requirements of Sec. 602(a)(8), i.e., were within the $75 "disregard."

II.

Both courts of appeals, as well as the district court from which this appeal was taken, have exhaustively and thoroughly considered all of the arguments pro and con for the various conclusions that they reached. We can add nothing new to the discussion. Nor can we resolve the conflict between the two circuits. Certainly it is beyond our function as judges to express any views with regard to the social desirability of the policy determinations made by Congress when it enacted OBRA. Confining ourselves to the legal issues, we can only say that, after careful study and deliberate thought, we find ourselves in agreement with the views of the Third Circuit and the district court.

We affirm the judgment of the district court for the reasons advanced by them.

AFFIRMED.

1 Succinctly stated, the AFDC program is a federal-state public...