Bouchard v. Secretary of Health and Human Services

• Decision Date: 19 September 1984
• Docket Number: 80-0319-F.,Civ. A. No. 78-0632-F
• Citation: 604 F. Supp. 171
• Parties: Katherine BOUCHARD, et al., Plaintiffs, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant. Lillian PINNEX, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — District of Massachusetts

604 F. Supp. 171

Katherine BOUCHARD, et al., Plaintiffs, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

Lillian PINNEX, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.

Civ. A. Nos. 78-0632-F, 80-0319-F.

United States District Court, D. Massachusetts.

September 19, 1984.

Mary Ellen McCarthy, Western Mass Legal Services Inc., Holyoke, Mass., for plaintiffs.

Joseph J. McGovern, Asst. U.S. Atty., Boston, Mass., for defendant.

MEMORANDUM

FREEDMAN, District Judge.

On April 2, 1984, the Court issued a Memorandum and Order in two consolidated cases in which it held the Secretary of Health and Human Services ("Secretary") incorrectly computed the optional state supplementary payment distributed under the Supplemental Security Income ("SSI") Program, Title XVI of the Social Security Act, 42 U.S.C. §§ 1381 et seq., when income is "deemed" from an ineligible spouse to a categorically eligible individual. Bouchard v. Secretary of Health & Human Services, 583 F.Supp. 944 (D.Mass.1984). The plaintiffs sought an order reversing the final decision in each of their individual claims, as well as a similar order running to the entire class, and declaratory and injunctive relief. The Court declared the Secretary's method of calculation erroneous at law, and declaratory and injunctive relief issued as to future benefits. The claims of two named plaintiffs, whom the Court assumed were still receiving benefits as members of a "mixed" couple, were reversed and remanded to the Secretary for recalculation of future state supplementary payments due them. However, the claims of the remaining named plaintiffs who were no longer receiving benefits as members of "mixed" couples under the program were not remanded, and retroactive class relief was denied, in accordance with the principles set forth in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971).

The plaintiffs now move the Court to alter or amend the judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. Sidney-Vinstein v. A-H Robins Co., 697 F.2d 880 (9th Cir.1983); Parks v. "Mr. Ford," 68 F.R.D. 305 (D.Penn. 1975). The motion requests the Court to alter its judgment denying recalculation of past benefits due both named plaintiffs and class members, and to amend it to require the Secretary to notify all class members of their right to have present benefits recalculated in compliance with the Court's decision. In light of the arguments raised by plaintiffs in two memoranda submitted in support of the motion, the judgment will be altered to reverse and remand the claims of certain unnamed plaintiffs to whom underpayments are due, and to compel notice to all class members of the right to recalculation of benefits, both past and present.

The Named Plaintiffs

The named plaintiffs in these two consolidated cases have all received an unfavorable final decision of the Secretary. Bouchard v. Secretary, 583 F.Supp. at 946. Therefore, all have exhausted the administrative remedies available to them and have properly sought judicial review. 42 U.S.C. § 405(g). Katherine Bouchard and John Svoboda currently have income which exceeds the couple limits for benefits without regard to the computations at issue and thus no longer receive payments under the Social Security program. Midas Turgeon is now deceased, but his widow is currently a recipient under the program. George Stephens, Carolyn Barry and Lillian Pinnex are now receiving benefits as members of eligible couples, and Adolph DeDeurwaerder, recently widowed, now receives payments as an eligible individual.¹ Therefore, none of the named plaintiffs benefited from the prospective relief awarded.

In Chevron Oil Co. v. Huson, 404 U.S. at 97, 92 S.Ct. at 350, the Supreme Court directed that a new rule of law should not be applied retroactively where a court found that three factors weighed against it. In the first factor, non-retroactivity is advised where a new principle of law overrules past precedent or where an issue of first impression has not been clearly foreshadowed. Id. at 106, 92 S.Ct. at 355. The Court concluded that the principle of law defined in its memorandum was not clearly foreshadowed and thus weighed against retroactive application. Bouchard v. Secretary, 583 F.Supp. at 955. Plaintiffs argue this finding is erroneous, but I have not altered my opinion. Cf. Simpson v. Director, Office Workers Compensation Programs, et al., 681 F.2d 81 (1st Cir.1982) (it remains for the court to determine whether recent decision weighs for or against retroactivity). I therefore continue to adhere to the original finding that the first Chevron factor weighs against a discretionary retroactive application of the Court's decision. However, plaintiffs raise an argument which tempers the effect of the above finding and weighs in favor of remanding certain cases to the Secretary for recalculation.

Under the second Chevron test, a court must determine whether retroactivity would enhance or retard the operation of its decision. 404 U.S. at 106, 92 S.Ct. at 355. In the original Memorandum, this Court concluded that ordering recalculation of past benefits for all named plaintiffs and class members would frustrate the Congressional goal of fostering cooperation between the states and the federal government. Bouchard v. Secretary, 583 F.Supp. at 955. However, plaintiffs correctly point out a statutory provision which states:

whenever the Secretary finds that more or less than the correct amount of benefits has been paid with respect to any individual, proper adjustment or recovery shall ... be made by appropriate adjustments in future payments to such individual ... or his eligible spouse.

42 U.S.C. § 1383(b)(1). Congress intended that if less than the correct amount of benefits has been paid, the Secretary would pay the balance due the underpaid individual. If the individual dies before the amount due has been paid to him, ... the amount due would be paid to his eligible spouse, if there is one, and the payment would not be taken into account in determining the spouse's need under the program. Underpayments, however, would not be paid to the estate of a deceased individual since it would not further the objective of meeting the current needs of the individuals.

H.R. No. 231, 92d Cong., 2d Sess., reprinted in 1972 U.S.Code Cong. & Ad.News 4989, 5141. The Secretary incorporated this statutory mandate into a series of regulations. 20 C.F.R. §§ 416.535 through 416.550. Where an individual has applied for benefits and has met all conditions of eligibility, 20 C.F.R. § 416.536, "an underpayment adjustment ... is made where a recipient received less than the correct amount of supplementary security income benefits...." 20 C.F.R. § 416.535. Significantly, the Secretary has defined underpayments quite specifically.

An underpayment can occur only with respect to a period for which a recipient filed an application ... for benefits and met all conditions of eligibility thereof. An underpayment, including any amounts of state supplementary payments which are due and administered by the Social Security Administration, is: (a) nonpayment, where payment for a quarter (or month, where applicable) was due but not made, and (b) payment of less than the amount due for any quarter (or month, where applicable).

20 C.F.R. § 416.536 (emphasis supplied). Thus, Congress and the Secretary herself recognized and provided for "retroactive" payment where benefits, both federal and state, had been denied or reduced because of erroneous calculation by the Secretary.

This Court concluded that the Secretary's method of calculating optional state supplementary SSI payment for a recipient with deemed spousal income was erroneous at law. Bouchard v. Secretary, 583 F.Supp. at 953. The operation of that rule would be enhanced by remanding cases of applicants whose benefits were reduced or denied by virtue of the incorrect calculation. Chevron Oil Co. v. Huson, 404 U.S. at 106, 92 S.Ct. at 355. Additionally, remand would be consistent with the statutory and regulatory provisions directing adjustment for underpayment. Therefore, the second Chevron factor weighs heavily in favor of remanding the claims of the named plaintiffs to the Secretary.

In addition, the number of persons involved and the amounts due them are small. The recalculation of past benefits due, and the payment thereof, will benefit the intended beneficiaries of the federal program and will not unduly burden either the federal administrators or the Commonwealth of Massachusetts. Id. at 107, 92 S.Ct. at 355-356 (court may deny retroactive application of decision where to do so would produce substantial inequitable results). Therefore, this Court shall order reversal and remand for Midas Turgeon, George Stephens, Carolyn Barry, Lillian Pinnex and Adolph DeDeurwaerder, who, by the terms of both statute, 42 U.S.C. § 1383, and regulation, 20 C.F.R. § 416.542, are entitled to receive the underpayments due them. The claims of those named plaintiffs who have neither current eligibility nor a current eligible surviving spouse, namely Katherine Bouchard and John Svaboda shall not be subject to remand.

Class Relief

These same arguments would seem to apply with equal force to the class at large. Certainly, the Court's holding and the explicit statutory provision for adjustment of underpayment would be enhanced if the Secretary were ordered to recalculate benefits for all class members. Further, the equities, despite potentially large numbers of applicants and significant sums of money, must weigh in favor of an order to identify and recalculate benefits for all class members. Bouchard v. Secretary, 583 F.Supp. at 956. Upon reconsideration of the interests at stake, and in light of the data submitted by both parties, I believe that some relief must be extended to the class.

The class, as certified by Order of the Court on January 11, 1982, consists of all...