Brown v. McMahon
| Decision Date | 11 October 1989 |
| Docket Number | No. Civ. S-87-1581 RAR.,Civ. S-87-1581 RAR. |
| Citation | 722 F. Supp. 1573 |
| Court | U.S. District Court — Eastern District of California |
| Parties | Cheryl BROWN; Jeanette Hamilton, proceeding by and through her guardian ad litem, Martha Liebisch, individually, and on behalf of all similarly situated persons, Plaintiffs, v. Linda McMAHON, Director, California Department of Social Services, Defendant and Third-Party Plaintiff, v. Otis R. BOWEN, M.D., Secretary U.S. Department of Health and Human Services, Third-Party Defendant. |
Curtis Child, Brian Paddock and Karen Wells, Legal Services of Northern California, Inc., Sacramento, Cal., Jeanne Molineaux, Redwood Legal Assistance, Ukiah, Cal., and Mark Greenberg and Richard Rothschild, Western Center on Law & Poverty, Inc., Los Angeles, Cal., for plaintiffs.
Mark St. Angelo, Asst. U.S. Atty., and Eileen Ceranowski, Deputy Atty. Gen., Sacramento, Cal., for defendants.
On November 9, 1987, plaintiffs, recipients of Aid to Families with Dependent Children (hereinafter "AFDC"), had cause to file the above-entitled action as a class action for declaratory and injunctive relief. In essence, the complaint challenges the California Department of Social Services policy with regard to its calculation of AFDC benefit levels. See 42 U.S.C. § 601-676 (1982 & Supp. V 1987). Specifically, the action raises the issue of whether under the Federal Deficit Reduction Act of 1984 (DEFRA), Pub.L. No. 98-369, 98 Stat. 494 (1984), tit. 2, social security benefits to children of disabled wage earners should be considered "child support" for purposes of applying the fifty dollar ($50.00) "disregard" provision, codified at 42 U.S.C. § 602(a)(8)(A)(vi).
The procedural history of this action is as follows: after the filing of the original complaint, defendant Linda McMahon, Director of the California Department of Social Services, filed a third-party complaint against Otis R. Bowen, M.D., then Secretary of the United States Department of Health and Human Services. A stipulation and order granting class certification was filed July 22, 1988. Thereafter, on July 29, 1988, plaintiffs filed a motion for summary judgment. On August 15, 1988, third-party defendant filed a cross-motion for summary judgment. Pursuant to those motions, the parties presented oral arguments to the court after which the case was taken under submission.
The AFDC program was established by Congress to provide aid to children who are needy because of a parent's death, absence or incapacity. 42 U.S.C. § 606(a). Participation by the states in the AFDC program is optional, but if a state elects to participate it must abide by federal law in the administration of its AFDC program. See Bowen v. Gilliard, 483 U.S. 587, 589 n. 1, 107 S.Ct. 3008, 3011 n. 1, 97 L.Ed.2d 485 (1987); Townsend v. Swank, 404 U.S. 282, 290-291, 92 S.Ct. 502, 507-08, 30 L.Ed.2d 448 (1971). The amount of assistance provided to families with dependent children, (otherwise known as "family units" or "assistance units"), is determined through a state standard of need. In this regard, federal law requires that participating states consider all income and resources available to the needy family unit before making the need determination. 42 U.S.C. § 602(a)(7). Thus, as a general rule, any income received by a family unit seeking AFDC benefits is taken into account and such income reduces dollar for dollar a family unit's benefit level. However, as described more fully infra, under the current law, portions of certain types of income are "disregarded" or not counted as family income when the state is making its need determination. 42 U.S.C. § 602(a)(8)(A).
Once the state makes its need determination, a benefit award is calculated and AFDC payments are made to the family unit. In order to obtain benefit awards, AFDC applicants are required, inter alia, to assign to the state (1) all rights they have to collect child support payments and (2) all rights to other support payments from any other person including non-custodial parents. 42 U.S.C. § 602(a)(26)(A). The state then collects the child support payments from the non-custodial parent or other person obligated to support the AFDC applicant. See 42 U.S.C. § 651.
The Deficit Reduction Act of 1984 added three provisions to the AFDC program which affect the instant litigation. First, a "mandatory filing unit" provision requires that the income of all members of the assistance unit be included in calculating the total income of the assistance unit. 42 U.S.C. § 602(a)(38). Prior to the Deficit Reduction Act families seeking AFDC benefits could exclude from the assistance unit a family member receiving income (such as child support or social security benefits) whose income would reduce the total amount of the assistance unit's AFDC benefit award. The mandatory family unit requirement put an end to the practice of excluding family members with income in order to maximize family benefits and ensure that the income of all family members who live together and share expenses is recognized and counted as available to the family unit as a whole.
Secondly, the Deficit Reduction Act's "pass through" provision requires the state to pass through to the assistance unit the first $50.00 of support collected each month from non-custodial parents (or other persons obligated to support the AFDC applicant) without decreasing the amount of the assistance unit's AFDC benefit award. 42 U.S.C. § 657(b)(1). The pass through provision provides in relevant part:
42 U.S.C. § 657(b)(1).
Finally the Deficit Reduction Act's "child support disregard" provision, specifically at issue in the instant action, provides that in making the need determination for an assistance unit, the state:
shall disregard the first $50 of any child support payments received in such month with respect to the dependent child or children in any family applying for or receiving aid to families with dependent children (including support payments collected and paid to the family under section 657(b) of this title); ...
42 U.S.C. § 602(a)(8)(A)(vi) (emphasis added).
The parenthetical reference to the "pass through" provision of 42 U.S.C. § 657(b) makes it clear that the words "any child support payments" are to include that child support collected by the state each month from non-custodial parents or other persons obligated to support the AFDC applicant and passed through or paid to the assistance unit pursuant to § 657(b), as well as other types of child support. Thus, the legal issue before the court is whether those "other types" of child support payments include support payments received by a child in the form of social security child's insurance benefits under title II of the Social Security Act.1
Pursuant to title II of the Social Security Act, social security child's insurance benefits are paid to children whose parents are disabled, aged, or deceased wage earners. 42 U.S.C. § 402(d) (1982 & Supp. V 1987). Child's insurance benefits are attributable to the work effort of parent and are used exclusively for the support and maintenance of that parent's child or children. The AFDC program mandates that states treat a child's social security insurance benefits as income or resources of a member of the assistance unit when making the need determination for AFDC purposes. 42 U.S.C. § 602(a)(7)(A). However, assignment to the state or other transfer of social security benefits paid under title II is expressly prohibited. 42 U.S.C. § 407(a) (Supp. V 1987).
The Secretary has never specifically defined the terms "child support payments" within the meaning of the child support disregard provision, § 602(a)(8)(A)(vi). However, the regulations implementing the provisions of the DEFRA, published on September 10, 1984, 49 Fed.Reg. 35,586, 35,604 (see 45 C.F.R. §§ 232.20(a), 302.51(b)(1) (1988)), lend support to the Secretary's present litigation posture that § 602(a)(8)(A)(vi) mandates a $50.00 disregard only in circumstances where child support payments have been assigned to the state and are considered "collected" by the state under § 657(b).2
The State of California, in accordance with these federal regulations and the Secretary's interpretation of § 602(a)(8)(A)(vi), does not consider social security child's insurance benefits to be "child support payments" within the meaning of the child support disregard provision. Consequently, the state does not disregard the first $50.00 of child support payments in making the need determination for an assistance unit when the source of the support payments are title II social security child's insurance benefits.
As previously indicated, plaintiffs bring this action to challenge the Secretary's interpretation of § 602(a)(8)(A)(vi), the child support disregard provision. Plaintiffs contend that the words "any child support payments" include support payments received by a child in the form of child's insurance benefits pursuant to title II of the Social Security Act.
In interpreting the meaning of the DEFRA's child support disregard provision, 42 U.S.C. § 602(a)(8)(A)(vi), the court first attempts to determine congressional intent, employing traditional tools of statutory construction. N.L.R.B. v. United Food & Com'l Wkrs. Union, 484 U.S. 112, 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987); see also I.N.S. v. Cardoza-Fonseca, 480 U.S. 421, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987). If congressional intent can be determined, that intention is the law and the Secretary's...
To continue reading
Request your trial