Bowen v. Gilliard Flaherty v. Gilliard, Nos. 86-509

• Court: United States Supreme Court
• Writing for the Court: STEVENS
• Citation: 107 S.Ct. 3008,97 L.Ed.2d 485,483 U.S. 587
• Parties: Otis R. BOWEN, Secretary of Health and Human Services, Petitioner, v. Beaty Mae GILLIARD et al. David T. FLAHERTY, Secretary, North Carolina Department of Human Resources, et al., Appellants, v. Beaty Mae GILLIARD et al
• Docket Number: 86-564,Nos. 86-509
• Decision Date: 25 June 1987

483 U.S. 587 107 S.Ct. 3008 97 L.Ed.2d 485 Otis R. BOWEN, Secretary of Health and Human Services, Petitioner,

v.

Beaty Mae GILLIARD et al. David T. FLAHERTY, Secretary, North Carolina Department of Human Resources, et al., Appellants, v. Beaty Mae GILLIARD et al.

Nos. 86-509, 86-564. Argued April 22, 1987. Decided June 25, 1987. Syllabus

In 1975, federal statutes governing the Aid to Families with Dependent Children (AFDC) program required, as a condition of eligibility, that applicants for assistance assign to the State any right to receive child support payments for any family member included in the family unit, but a recipient of aid (the amount of which is determined by the number and income of persons in the family unit) could exclude a child for whom support payments were being made from the family unit if it was financially advantageous to do so, even though the child continued to live with the family. The Deficit Reduction Act of 1984 (DEFRA) amended the AFDC program to require families to include in the filing unit all children living in the same home, including those for whom support payments were being received. Under a separate amendment, the first $50 per month of child support collected by the State must be remitted to the family and not counted as income in determining its benefit level. Thus, if the assigned support exceeded $50 plus the difference in the benefit level resulting from adding the child to the family unit, the family would suffer financially as compared with its total income prior to the amendment. In a class action, the Federal District Court held that North Carolina's implementing regulations were in conformance with the statute, but that the 1984 statutory scheme violated the Due Process Clause of the Fifth Amendment and its equal protection component, as well as the Takings Clause of that Amendment.

Held:

1. The statutory scheme does not violate Fifth Amendment due process and equal protection principles. The DEFRA amendment rationally serves both Congress' goal of decreasing federal expenditures, and the Government's separate interest in distributing benefits among competing needy families in a fair way. It was also rational for Congress to adjust the AFDC program to reflect the fact that support money generally provides significant benefits for entire family units. There is no

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merit to the view that some form of "heightened scrutiny" must be applied because the amendment interferes with a family's fundamental right to live in the type of family unit it chooses by intruding on choices concerning family living arrangements. The appropriate standard of review here is whether Congress had a "rational basis" for its decision. Cf. Lyng v. Castillo, 477 U.S. 635, 106 S.Ct. 2727, 91 L.Ed.2d 527. Pp. 598-603.

2. The DEFRA amendment does not violate the Fifth Amendment's Takings Clause. The family members other than the supported child have no claim, since they have no protected property rights to continued AFDC benefits at the same level as before the amendment. Nor does the simple inclusion of the support income in the benefit calculation have any legal effect on the supported child's right to have it used for his or her benefit. The argument that the requirement that an AFDC applicant must assign the support payments to the State, which then, in effect, remits the amount collected to the custodial parent as part of the AFDC payment to be used for the benefit of the entire family, modifies the child's interest in the use of the money so dramatically that it constitutes a taking of the child's property is refuted by three pertinent factors. First, there is no such substantial "economic impact" on the child's right to have support funds used for his or her exclusive benefit as to constitute a "taking." Second, the child holds no vested protectable expectation that the parent will continue to receive identical support payments on the child's behalf, and that the child will enjoy the same rights with respect to them. Third, the character of the governmental action militates against a finding that the State or Federal Governments unconstitutionally take property through the AFDC program. Pp. 603-609.

633 F.Supp. 1529 (1986), reversed.

STEVENS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, POWELL, O'CONNOR, and SCALIA, JJ., joined. BRENNAN, J., filed a dissenting opinion, in which MARSHALL, J., joined, post, p. ----. BLACKMUN, J., filed a dissenting opinion, post, p. ----.

Albert G. Lauber, Jr., Washington, D.C., for appellant in No. 86-509.

Catherine C. McLamb, Raleigh, N.C., for appellants in No. 86-564.

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Jane R. Wettach, Winston-Salem, N.C., for appellees.

Justice STEVENS delivered the opinion of the Court.

As part of its major effort to reduce the federal deficit through the Deficit Reduction Act of 1984, 98 Stat. 494, Congress amended the statute authorizing Federal Aid to Families with Dependent Children (AFDC) ¹ to require that a family's eligibility for benefits must take into account, with certain specified exceptions, the income of all parents, brothers, and sisters living in the same home.² The principal

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question presented in this litigation is whether that requirement violates the Fifth Amendment to the United States Constitution when it is applied to require a family wishing to receive AFDC benefits to include within its unit a child for whom child support payments are being made by a noncustodial parent.

I

This litigation began in 1970. At that time the federal statute did not require that all parents and siblings be included in an AFDC filing unit. Thus, for example, if a teenage child had significant income of her own, perhaps from wages or perhaps in support payments from an absent parent, the other members of her family could exclude her from the filing unit in order to avoid disqualifying the entire family from benefits or reducing its level of benefits. Beaty Mae Gilliard, one of the named class members in the 1970 suit,³ began receiving public assistance from North Car-

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olina under AFDC in 1962. In February 1970, after her seventh child was born, the State automatically included him in the filing unit, thereby increasing the family's monthly allotment from $217 to $227 to reflect the difference between the benefit for a family of seven and the benefit for a family of eight. Gilliard was, however, also receiving $43.33 each month in child support from the baby's father. When a formal parental support order was entered in April 1970, the State credited the support payments against her account and reduced her monthly benefit to $184. Gilliard sued, contending that she had a statutory right to exclude her seventh child from the unit and thus to continue to receive the $217 benefit for a family of seven and also to retain the $43.33 paid by her youngest child's father. A three-judge District Court agreed with her reading of the statute and entered an order requiring the State to reinstate her benefits at the $217 level and to reimburse her for the improper credits of $43 per month. Gilliard v. Craig, 331 F.Supp. 587 (WDNC 1971). The District Court also granted classwide relief. We affirmed that judgment. 409 U.S. 807, 93 S.Ct. 39, 34 L.Ed.2d 66 (1972). No constitutional question was decided at that time.

Congress amended the AFDC program in 1975 to require, as a condition of eligibility, that applicants for assistance must assign to the State any right to receive child support payments for any member of the family included in the filing unit.⁴ In response, North Carolina amended its laws to pro-

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vide that the acceptance of public assistance on behalf of a dependent child would constitute an assignment of any right to support for that child. See N.C.Gen.Stat. § 110-137 (Supp.1985). These amendments, however, did not harm recipients like Gilliard because they did not affect the right to define the family unit covered by an application and thereby to exclude children with independent income, such as a child for whom support payments were being made.

In 1983, the Secretary of Health and Human Services proposed certain amendments to the Social Security Act to "assure that limited Federal and State resources are spent as effectively as possible." Letter of 25 May 1983, to the Honorable George Bush, President of the Senate, App. 168-169 (hereinafter Heckler Letter). One of the Secretary's proposals was "to establish uniform rules on the family members who must file together for AFDC, and the situations in which income must be counted. In general, the parents, sisters, and brothers living together with a dependent child must all be included; the option of excluding a sibling with income, for example, would no longer be available." Ibid. The Secretary stressed that the improvements would result in an AFDC allocation program that "much more realistically reflects the actual home situation." Id., at 169.

The Secretary's proposal was not enacted in 1983, but one of the provisions in the Deficit Reduction Act of 1984 (DEFRA) established a standard filing unit for the AFDC program. The Senate Finance Committee estimated that the change would save $455 million during the next three fiscal years. S. Print No. 98-169, p. 980 (1984) (hereinafter Senate Print). It explained the purpose of the amendment

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in language that removes any possible ambiguity in the relevant text of the statute: ⁵

"Present Law

"There is no requirement in present law that parents and all siblings be included in the AFDC filing unit. Families applying for assistance may exclude from the filing unit certain family members who have income which might reduce the family benefit. For example, a family might choose to exclude a child who is receiving social security or child support payments, if the payments would reduce the family's benefits by an amount greater than the amount...