Brinkman v. Rahm, 87-4074

• Decision Date: 19 June 1989
• Docket Number: No. 87-4074,87-4074
• Citation: 878 F.2d 263
• Parties: , Unempl.Ins.Rep. CCH 14710A Richard BRINKMAN, and other persons similarly situated, Plaintiffs-Appellees, v. Karen RAHM, in her official capacity as Secretary of the Washington Department of Social and Health Services; Lyle Quasim, in his official capacity as Director of Division of Mental Health; Darrell Hamilton, M.D., in his official capacity as Superintendent of Western State Hospital; Harold Robb, in his official capacity as Superintendent of Eastern State Hospital; Patricia Quesnel, in her official capacity as Chief of the Office of Financial Recovery; and their successors, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 263

878 F.2d 263

26 Soc.Sec.Rep.Ser. 198, Unempl.Ins.Rep. CCH 14710A

Richard BRINKMAN, and other persons similarly situated, Plaintiffs-Appellees, v. Karen RAHM, in her official capacity as Secretary of the

Washington Department of Social and Health Services; Lyle

Quasim, in his official capacity as Director of Division of

Mental Health; Darrell Hamilton, M.D., in his official

capacity as Superintendent of Western State Hospital;

Harold Robb, in his official capacity as Superintendent of

Eastern State Hospital; Patricia Quesnel, in her official

capacity as Chief of the Office of Financial Recovery; and

their successors, Defendants-Appellants.

No. 87-4074.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Oct. 7, 1988.

Decided June 19, 1989.

Mark C. Barrett, Asst. Atty. Gen., Olympia, Wash., for defendants-appellants.

Michael J. Mirra, Evergreen Legal Services, Seattle, Wash., for plaintiffs-appellees.

Appeal from the United States District Court for the Western District of Washington.

Before SCHROEDER, ALARCON and NORRIS, Circuit Judges.

PER CURIAM:

This is an appeal from the district court's decision that the Social Security Act preempts the state of Washington's procedures for seeking reimbursement from patients involuntarily committed to state hospitals. We affirm.

BACKGROUND

Plaintiffs-appellees are a class of patients involuntarily committed to Washington state mental hospitals. The class is defined as those patients who receive Social Security Old Age Survivor's and Disability Insurance (OASDI) benefits, and for whom the state is not the representative payee. The defendants-appellants are officials of the State of Washington Department of Social and Health Services.

At issue is the state's policy of seizing appellees' OASDI funds in order to reimburse the state for the cost of patient care and maintenance. Under Washington law, patients committed to state mental hospitals are liable to the state for the cost of their commitment. See RCW 71.02.411 et seq. The state collects this debt from the appellees by withdrawing OASDI funds from appellees' accounts at the state hospital accounting offices. Once it is determined that a patient at one of the state hospitals is liable for the costs of his or her hospitalization, the patient is sent a document entitled "Notice and Finding of Responsibility." This notice sets out the liability of the patient for his or her cost of care. It informs the patients that they may appeal the determination of liability by writing to the State Department of Social and Health Services. The notice states that the patient's income from Social Security and other benefits, less a nominal amount, will be applied to their costs of care. The patients receive no other notice that their funds deposited with the hospital accounting office are subject to deductions for the cost of hospitalization, nor are the patients notified when the deductions are actually made.

The Notice and Finding of Responsibility also states that, once the appeal period has expired, the hospital will obtain a superior court judgment for the amount of the debt, and invoke further enforcement proceedings, such as garnishment or attachment, if the debt is not paid. However, the parties stipulated that it was the practice of the Appellees filed suit in federal district court seeking declaratory and injunctive relief against the state's reimbursement procedures. ¹ Appellees contended that the state's reimbursement law conflicts with 42 U.S.C. Sec. 407, which states that Social Security disability benefits shall not be subject "to execution, levy, attachment, garnishment, or other legal process."

hospitals to do neither. Rather, the hospitals' practice, once the Notice and Finding of Responsibility had been sent, was simply to deduct the funds from the patients' hospital accounts without notice.

The district court granted appellees' motion for summary judgment on their claims. The court held that section 407 barred the state from seeking reimbursement from appellees' OASDI funds, and that the state's practice of withdrawing funds from patients' accounts without notice deprived plaintiffs of their property without due process of law. The court issued declaratory and injunctive relief against the challenged practice.

ANALYSIS

At issue is the meaning of the non-assignment provision of the Social Security Act. As amended in 1983, the Act provides as follows:

Sec. 407. Assignment

(a) The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

(b) No other provision of law, enacted before, on, or after the date of the enactment of this section, may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section.

42 U.S.C. Sec. 407 (Supp. I 1983).

The question before us is whether the statute preempts the collection and accounting procedures used by the State of Washington. The district court held that section 407 did preempt the state's procedures, reasoning that "the language of Sec. 407 is plain and unambiguous" in prohibiting the use of legal process to reach Social Security benefits. It further held that the state could not lawfully avoid section 407 by resort to confiscation without benefit of legal process, since such confiscation was a blatant denial of due process of law. We review the district court's conclusions de novo as they present pure questions of law. See San Bernardino Physicians' Services Medical Group, Inc. v. County of San Bernardino, 825 F.2d 1404, 1407 (9th Cir.1987).

The Supreme Court's decision in Bennett v. Arkansas, 485 U.S. 395, 108 S.Ct. 1204, 1205-06, 99 L.Ed.2d 455 (1988), decided after this appeal was taken, controls the question whether section 407 preempts the Washington collection procedures. Appellants conceded as much at oral argument. In Bennett, the Court ruled that section 407 barred a state from collecting reimbursement for prisoner maintenance costs by attaching the Social Security benefits of inmates of the state prisons. The Arkansas Supreme Court had held that there was no conflict between section 407 and the state reimbursement procedures because "the federal statutes contained an implied exception to the exemption from legal process when the state provides for the care and maintenance of a beneficiary of Social Security or...