Bliek v. Palmer

• Decision Date: 01 February 1996
• Docket Number: No. C 93-4083.,C 93-4083.
• Citation: 916 F. Supp. 1475
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Evelyn BLIEK and Tish Eberline, individually and on behalf of all other persons similarly situated, Plaintiffs, v. Charles PALMER, in his Official Capacity as the Director of the Department of Human Services, and Charles H. Sweeney, In His Capacity as the Director of the Iowa Department of Inspections and Appeals, Defendants.

916 F. Supp. 1475

Evelyn BLIEK and Tish Eberline, individually and on behalf of all other persons similarly situated, Plaintiffs, v. Charles PALMER, in his Official Capacity as the Director of the Department of Human Services, and Charles H. Sweeney, In His Capacity as the Director of the Iowa Department of Inspections and Appeals, Defendants.

No. C 93-4083.

United States District Court, N.D. Iowa, Western Division.

February 1, 1996.

COPYRIGHT MATERIAL OMITTED

Joseph G. Basque, Martin Ozga of Legal Services Corporation, Iowa, Des Moines, Iowa, and Linda Cooper of HELP Legal Assistance, Davenport, Iowa, for plaintiffs.

Assistant Iowa Attorney General Barbara E.B. Galloway, Des Moines, Iowa, for defendants.

MEMORANDUM OPINION AND ORDER REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT

BENNETT, District Judge.

                                                     TABLE OF CONTENTS
                  I. INTRODUCTION AND BACKGROUND .............................. 1478
                 II. STANDARDS FOR SUMMARY JUDGMENT ........................... 1479
                III. FINDINGS OF FACT ......................................... 1481
                 IV. CONCLUSIONS OF LAW ....................................... 1482
                     A. Background on the Food Stamp Act of 1964 .............. 1482
                

                  B. Standard of Review .................................................. 1483
                  C. Waiver Authority .................................................... 1484
                  D. Adequacy of the Notice as to Settlement, Adjustment, Compromise, and
                      Denial ............................................................. 1485
                     1. The Due Process analysis ......................................... 1485
                     2. An appropriate interest .......................................... 1486
                     3. What process is due? ............................................. 1486
                        a. The Mathews test .............................................. 1487
                            i. The private interest ...................................... 1488
                           ii. Risks of erroneous deprivation ............................ 1489
                          iii. The governmental interest ................................. 1490
                        b. Balancing of the Mathews factors .............................. 1490
                  E. Equitable Estoppel .................................................. 1492
                  F. Permanent Injunction ................................................ 1493
                V. CONCLUSION ............................................................ 1493
                

At its core this class action litigation raises an important and novel federal constitutional question concerning the rights of some Iowa recipients of benefits under this nation's food stamp program: Does due process require State of Iowa officials instituting collection of food stamp overpayments pursuant to the Food Stamp Act of 1964 to give notice to class members of their statutory rights to request a settlement, adjustment, compromise, denial, or waiver of all or part of overpayments received solely as a result of agency error? Surprisingly, no federal court appears to have addressed this precise issue.

I. INTRODUCTION AND BACKGROUND

Plaintiffs Evelyn Bliek and Tish Eberline filed their complaint in this matter on September 28, 1993, pursuant to 42 U.S.C. § 1983, seeking injunctive and declaratory relief from Defendants' actions to collect food stamp overpayments that have resulted from agency error. In Count I, Plaintiffs assert that Defendants, State of Iowa officials who are in charge of various aspects of the federal Food Stamp Program, 7 U.S.C. § 2011 et seq., violated the Due Process Clause of the Fourteenth Amendment when they sought to collect food stamp overpayments attributable to administrative error without first providing notice of an alleged right to request a waiver of the overpayment. In Count II, Plaintiffs contend that Defendants should be equitably estopped from attempting to collect food stamp overpayments that have occurred as a result of agency error and through no fault of Plaintiffs. On February 6, 1995, a class was certified in this matter.¹

Defendants filed a motion for summary judgment asserting that they have not violated the Due Process Clause because the Secretary of Agriculture has never delegated waiver authority to state agencies administering the Food Stamp Program. Second, Defendants assert that the granting of estoppel in such a case would nullify Congress's express intent that state agencies collect food stamp overpayments due to agency error. See 7 U.S.C. §§ 2022(b)(2)(B) & 2025(a). Plaintiffs have resisted Defendants' motion and filed their own motion for summary judgment in which they contend that the Secretary of Agriculture has delegated that office's power of waiver to the states in 7 C.F.R. § 271.4(b), and therefore, Defendants' failure to notify Plaintiffs of this right was violative of due process. Plaintiffs further assert that the doctrine of equitable estoppel is applicable here and that Defendants should be equitably estopped from attempting to collect overpayments that have occurred as a result of agency error.

A hearing on the cross-motions for summary judgment was held on October 26, 1995. At the hearing Plaintiffs were represented by Joseph G. Basque and Martin Ozga of Legal Services Corporation of Iowa, Des Moines, Iowa. Defendants were represented by Assistant Iowa Attorney General Barbara E.B. Galloway, Des Moines, Iowa.

At the hearing, Plaintiffs were understood by the court to argue that not only were Plaintiffs contending that they were not informed by Defendants of their asserted right to request a waiver of all or part of their food stamp overpayments, but also that they were not informed of their asserted right to request that Defendants employ their authority to settle, adjust, compromise, or deny all or part of their food stamp overpayments. This discrepancy between what Plaintiffs pled and what they argued was the result of their using the term "waiver" in its generic sense, rather than in the statutory sense of the term as found in 7 C.F.R. § 271.4(b). As a result, following the hearing, the court granted Plaintiffs ten days in which to file a motion to amend their complaint in this matter to reflect the claims raised at the hearing. Defendants were then to have seven days after any motion to amend was filed in which to submit a resistance to the motion to amend. The court further ordered that should the court grant a motion to amend the complaint, the parties would be afforded the opportunity to submit, at their discretion, supplemental memoranda of law within seven days of the date that an amended complaint was filed. Plaintiffs did indeed file a motion to amend the complaint in this matter, which was granted by Chief United States Magistrate Judge John Jarvey on December 8, 1995.

Plaintiffs' amended complaint in this matter pursuant to 42 U.S.C. § 1983, filed on December 8, 1995, seeks injunctive and declaratory relief from Defendants' actions to collect food stamp overpayments that have resulted from agency error. In Count I of their amended complaint, Plaintiffs assert that Defendants violated the Due Process Clause of the Fourteenth Amendment when they sought to collect food stamp overpayments resulting from administrative error without first providing notice of an alleged right to request a settlement, adjustment, compromise, denial, or waiver of all or part of their food stamp overpayments. In Count II, Plaintiffs contend that Defendants should be equitably estopped from attempting to collect food stamp overpayments that have occurred as a result of agency error and through no fault of Plaintiffs. On January 2, 1996, Defendants filed an answer to the amended complaint. Although given the opportunity to do so, neither party has submitted a supplemental brief. This matter is now fully submitted.

II. STANDARDS FOR SUMMARY JUDGMENT

The Eighth Circuit Court of Appeals recognizes "that summary judgment is a drastic remedy and must be exercised with extreme care to prevent taking genuine issues of fact away from juries." Wabun-Inini v. Sessions, 900 F.2d 1234, 1238 (8th Cir.1990). On the other hand, the Federal Rules of Civil Procedure have authorized for nearly 60 years "motions for summary judgment upon proper showings of the lack of a genuine, triable issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Thus, "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'" Wabun-Inini, 900 F.2d at 1238 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Hartnagel v. Norman, 953 F.2d 394, 396 (8th Cir.1992).

The standard for granting summary judgment is well established. Rule 56 of the Federal Rules of Civil Procedure states in pertinent part:

Rule 56. Summary Judgment

(a) For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party's favor upon all or any part thereof.

(b) For Defending Party. A party against whom a claim ... is asserted ... may, at any time, move for summary judgment in the party's favor as to all or any part thereof.

(c) Motions and Proceedings Thereon.... The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(a), (b) & (c) (emphasis added); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23,...