Beno v. Shalala

Decision Date01 July 1993
Docket NumberNo. Civ. S-92-2135-DFL.,Civ. S-92-2135-DFL.
Citation853 F. Supp. 1195
CourtU.S. District Court — Eastern District of California
PartiesDeanna BENO, Susan Wiseman, Jody Baker, et al., on behalf of themselves and all others similarly situated, Plaintiffs, v. Donna SHALALA, Secretary of the United States Department of Health and Human Services, et al., Defendants.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Mary Grad, Asst. U.S. Atty., Theodore Garelis, California State Attorney General's Office, Sacramento, CA, Sheila M. Lieber, U.S. Dept. of Justice, Civ. Div., Washington, DC, for defendants.

Melinda R. Bird, Clare Pastore, Western Center on Law & Poverty, Los Angeles, CA, for plaintiffs.

MEMORANDUM OF DECISION AND ORDER

LEVI, District Judge.

On December 1, 1992, the State of California began a five-year experimental project modifying welfare benefits provided under the Aid to Families with Dependent Children ("AFDC") program.1 The project, known as the Assistance Payments Demonstration Project (the "Demonstration Project" or the "Project"), has two primary components. The first element, central to this order, is the work incentive program, which couples a 1.3% decrease in benefit levels with the waiver of certain federal AFDC rules that limit the amount of income a recipient can earn without a corresponding reduction in benefits. Cal.Welf. & Inst.Code § 11450.01(b). The second element is a one year residency requirement which limits benefits to an AFDC applicant not residing in California during the prior year to the level of benefits the applicant would have received in the state of prior residence. Id. § 11450.03(a).

The residency component of the Demonstration Project was the subject of prior litigation in this court. See Green v. Anderson, 811 F.Supp. 516 (E.D.Cal.1993). By order filed January 28, 1993, the court preliminarily enjoined application of the durational residency requirement in section 11450.03(a) and the validity of that section is not now at issue.

The work incentive portion of the Demonstration Project does not comply with several requirements of the Social Security Act governing the provision of public assistance benefits. Accordingly, California requested that the Secretary of the United States Department of Health and Human Services approve waivers of those requirements under 42 U.S.C. § 1315(a). On October 28, 1992, the Secretary granted three waivers2 necessary to implement the work incentive portion of the Demonstration Project: (1) a waiver of certain rules limiting the work hours and earned income of some AFDC recipients;3 (2) a waiver of the requirement of uniform statewide benefits to permit the State to establish, for research purposes, a control group exempt from the benefit cut and work incentives; and (3) a waiver of the "maintenance of effort" requirement that conditions federal approval of state medicaid plans on the state's maintenance of benefit levels at or above the levels existing on May 1, 1988.4 The 1.3% benefit cut places AFDC benefits below the May 1988 floor, hence the State's request for waiver of this requirement.

Plaintiffs are California AFDC recipients subject to the grant reduction and residency requirement.5 They challenge the Demonstration Project's benefit cut and the Secretary's grant of waivers on a number of different grounds. First, plaintiffs argue that it was arbitrary and capricious of the Secretary to grant waivers for the Demonstration Project because the waivers permit statewide application of the Project when only 10,000 AFDC recipients from four counties will be studied, and because the waivers permit application of the benefit cut to those unable to work. Second, plaintiffs argue that the Demonstration Project and associated waivers violate the safeguards for human research subjects provided in section 211 of the Department of Health and Human Services 1992-1993 Appropriations Act, Pub.L. No. 102-394, 106 Stat. 1792 (1992). Plaintiffs contend that the benefit cut poses a danger to the well-being of AFDC recipients and therefore requires their written, informed consent. Third, plaintiffs argue that the benefit cut and work incentive aspects of the Project discriminate against those disabled AFDC recipients who are unable to work in violation of section 12132 of the Americans with Disabilities Act of 1990 ("ADA"), 42 U.S.C. §§ 12101-12213 (1991). Finally, plaintiffs contend that the Demonstration Project and waivers violate the requirements for work-related programs specified in 42 U.S.C. § 684(a).6

Plaintiffs now move for a preliminary injunction invalidating the waivers necessary to implement the 1.3% benefit cut, and enjoining the State's application of that cut to AFDC families headed by disabled adults. Plaintiffs also seek to enjoin the expenditure of federal funds on the Project. The Secretary moves to dismiss all claims against her, primarily on the basis that her decisions concerning the Demonstration Project are not subject to judicial review. Both motions were heard on April 9, 1993. For the reasons stated below, the court finds that the Secretary's decision is subject to review but that plaintiffs are not likely to succeed on the merits as to any of their claims.

I. Review of the Secretary's Waivers
A. Is the Secretary's Decision Subject to Review?

The Social Security Act grants discretion to the Secretary to waive certain of the Act's requirements. Under 42 U.S.C. § 1315(a), the Secretary may waive a state's compliance:

In the case of any experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives of ... Part A or D of subchapter IV of this chapter, in a State or States—
(1) the Secretary may waive compliance with any of the requirements of section ... 1396a of this title, as the case may be, to the extent and for the period he finds necessary to enable such State or States to carry out such project....

42 U.S.C. § 1315(a) (emphasis added). Plaintiffs claim that the waivers permitting California to implement the Demonstration Project and benefit cut do not comply with the requirements of section 1315(a) and thus may be invalidated as arbitrary and capricious under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706. In addition to contesting this assertion on its merits, the Secretary argues that her decision to grant waivers is "committed to agency discretion" and so is not subject to judicial review.

Sections 701-706 of the APA govern judicial review of agency action. 5 U.S.C. §§ 701-706. Section 702 generally provides a right of review to any person "adversely affected or aggrieved" by agency action. However, "to the extent that an agency action is committed to agency discretion by law," the APA precludes judicial review. 5 U.S.C. § 701(a)(2). The Secretary argues that section 1315 does just this. Because the section is drafted in subjective terms—according to the Secretary's judgment and the Secretary's finding—as opposed to objective criteria, the Secretary is of the view that the decision to grant a waiver is committed to agency discretion and thus unreviewable under the APA. To prevail on this point, the Secretary must overcome the "strong presumption that Congress intends judicial review of administrative action." Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670, 106 S.Ct. 2133, 2136, 90 L.Ed.2d 623 (1986).

Agency decisionmaking has been found unreviewable under section 701(a)(2) in limited circumstances. An agency's exercise of its discretion not to prosecute or begin enforcement proceedings is unreviewable because such decisions involve "a complicated balancing of a number of factors which are peculiarly within the agency's expertise" and because "review is not to be had if the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion." Heckler v. Chaney, 470 U.S. 821, 830, 105 S.Ct. 1649, 1655, 84 L.Ed.2d 714 (1985); see Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 820, 28 L.Ed.2d 136 (1971) (section 701(a)(2) applies in "rare instances where statutes are drawn in such broad terms that in a given case there is no law to apply"). An agency's decision as to how to budget funds from a lump-sum appropriation "is another administrative decision traditionally regarded as committed to agency discretion." Lincoln v. Vigil, ___ U.S. ___, ___, 113 S.Ct. 2024, 2031, 124 L.Ed.2d 101 (1993). A lump-sum appropriation evinces a congressional purpose to give the agency maximum flexibility and discretion while the allocation of such resources involves numerous competing demands which the agency is better suited to resolve than the courts. Id. 113 S.Ct. at 2031-32. Finally, the decision by the Director of Central Intelligence to terminate an employee is not reviewable under the APA. Webster v. Doe, 486 U.S. 592, 601, 108 S.Ct. 2047, 2052, 100 L.Ed.2d 632 (1988). This decision, affecting the national security, concerns "an area of executive action `in which courts have long been hesitant to intrude.'" Lincoln, ___ U.S. at ___, 113 S.Ct. at 2031 (quoting Franklin v. Massachusetts, ___ U.S. ___, ___, 112 S.Ct. 2767, 2785, 120 L.Ed.2d 636 (1992) (Stevens, J., concurring in part and concurring in judgment)). Moreover, the particular statutory provision at issue "fairly exudes deference to the Director" by vesting the decision to terminate in the Director's judgment as opposed to some objective standard. Webster, 486 U.S. at 600, 108 S.Ct. at 2052 ("Section 102(c) allows termination of an Agency employee whenever the Director `shall deem such termination necessary or advisable in the interest of the United States,' not simply when the dismissal is necessary or advisable to those interests."). The Webster Court relied as well on the overall structure of the...

To continue reading

Request your trial
4 cases
  • CK v. Shalala, Civ. A. No. 93-5354 (NHP).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • 4 Mayo 1995
    ...discretion to the Secretary to exempt States from such an all-encompassing series of statutory requirements." Beno v. Shalala, 853 F.Supp. 1195, 1205 (E.D.Cal.1993), rev'd on other grounds, 30 F.3d 1057. Indeed, while the Secretary contends that § 1315(a) waivers are one of the rare instanc......
  • Beno v. Shalala, 93-16411
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 13 Julio 1994
    ...Children ("AFDC"), appeal the denial of their request for a preliminary injunction enjoining California's public benefits experiment, 853 F.Supp. 1195. Plaintiffs object to a state-wide benefits cut enacted as part of an experimental work-incentive project and challenge the Secretary of Hea......
  • C.K. v. New Jersey Dept. of Health and Human Services, 95-5454
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • 9 Agosto 1996
    ...assure that needy families obtain education, training and employment." C.K. v. Shalala, 883 F.Supp. at 1012 (quoting Beno v. Shalala, 853 F.Supp. 1195, 1215 (E.D.Cal.1993)). We agree with the district court's assessment of this issue and find no need to alter this part of its 4. Family Plan......
  • Trico Industries, Inc. v. Travelers Indem. Co.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
    • 28 Abril 1994

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT