Cabinet for Human Resources, Com. of Ky. v. Northern Kentucky Welfare Rights Ass'n
| Decision Date | 30 March 1992 |
| Docket Number | No. 91-5122,91-5122 |
| Citation | 954 F.2d 1179 |
| Parties | CABINET FOR HUMAN RESOURCES, COMMONWEALTH OF KENTUCKY, Plaintiff-Appellant, v. NORTHERN KENTUCKY WELFARE RIGHTS ASSOCIATION, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Suggestion for Rehearing En Banc
March 30, 1992.
Maria T. Geisler (argued & briefed), Cabinet for Human Resources, Com. of Ky., Sandra E. Downs (briefed), Frankfort, Ky., for plaintiff-appellant.
Carl J. Melcher (argued), Northern Kentucky Legal Aid Soc., Inc., Covington, Ky., Anthony G. Martin (briefed), Kentucky Legal Services Program, Lexington, Ky., for Northern Kentucky Welfare Rights Assn., Diane Mills and Salina Murdock.
Before MERRITT, Chief Judge, KENNEDY, Circuit Judge, and McRAE, Senior District Judge. *
This case raises questions concerning the availability of federal judicial review for claims under the Low Income Home Energy Assistance Act of 1981, 42 U.S.C. §§ 8621-8629. The Act authorizes a program of federal-state block grants to assist eligible households in meeting the costs of home energy and requires a set of state administrative remedies for aggrieved tenants. 1 The Commonwealth of Kentucky applied for and received funds through the program and established a scheme of administrative relief. Kentucky adopted the "Model Plan" offered by the federal Department of Health and Human Services for distributing the energy subsidies and designated the state Cabinet for Human Resources as the agency to implement the Plan.
Anticipating a legal challenge to its method of calculating an eligible household's subsidy level under the Act, the Cabinet filed suit in District Court seeking declaratory relief that the Kentucky Plan conformed to the requirements of the Act. The complaint named as defendant the Secretary of Health and Human Services, Dr. Louis W. Sullivan. The Northern Kentucky Welfare Association ("the Association") entered the suit on the side of the defendant. Under the Kentucky Plan, the Association claimed, the Commonwealth unlawfully discriminated against tenants of publicly subsidized housing when calculating a household's subsidy level. The Association did not seek to exhaust state administrative remedies, but filed a class counterclaim seeking declaratory and injunctive relief. The federal defendant was dismissed from the action leaving only the Cabinet as plaintiff and the Association as defendant and counter claimant.
The District Court granted declaratory relief in favor of the Association and enjoined the Cabinet from using the amount of energy costs allowed tenants in public housing as a factor in calculating the amount of benefits allocated to eligible families. We now dissolve the injunction and dismiss this action because we find that the Act implies no private right of action prior to exhausting state administrative remedies and that the Act creates no independent rights enforceable in federal court under 42 U.S.C. § 1983.
The Low Income Home Energy Assistance Program created by the Act is a voluntary federal-state grant program. The Act authorizes the Secretary of HHS to grant funds to states to assist low income households in meeting the costs of home energy, but does not create an entitlement program. States receive a lump sum to be distributed to eligible households. Unlike entitlement programs, once that sum is depleted no more subsidies will be awarded regardless of an applicant's eligibility or need.
To receive program funds, a state must submit to the Secretary an application that contains a plan detailing the manner in which the state will distribute grant funds. 42 U.S.C. § 8624(c)(1). The language of the Act does not use the customary "shall" language of entitlement laws that is generally recognized to mandate certain behavior. Instead, the Act requires a state applicant to give "assurances," § 8624(a), or to "certify," § 8624(b), that it will use its allotted funds for purposes specified. The Act also requires the Secretary to make a model state plan format available to the states that each state may use to prepare its application. § 8624(c)(3). The states must conduct public hearings with respect to their proposed distribution of funds, § 8624(a)(2), and also make each plan and any substantial revisions available to the public for inspection and comment. § 8624(c)(2).
The Act's directives for state administration of the subsidy program are general in nature. The Act establishes an eligibility scheme in terms of household income levels. Participating states are to distribute funds to eligible households so that the highest level of assistance is given to households with the lowest incomes and the highest costs in relation to income. § 8624(b)(5). The Act does not prescribe a method of calculating actual benefits, but to receive funds a state must assure the Secretary that it will not distinguish between those households already receiving other public welfare benefits and those low income households that do not receive other benefits. § 8624(b)(8). The Act also states that subsidies received through the grant program should not be considered income or resources of the recipient for any purpose under state or federal law. § 8624(f)(1).
The language in the Act, though not conclusive, indicates that Congress intended to minimize federal involvement in the administration of the subsidy program. For example, § 8624(b) states that the "Secretary [of HHS] may not prescribe the manner in which the States will comply" with the central, substantive provisions of the Act. Although conditions attach to the receipt of grant funds and the Secretary must approve the initial disbursement of grant funds to qualifying states, the Act envisions a very limited federal role in the actual distribution of the funds to eligible recipients.
This general overriding proposition of limited federal involvement is an important feature of the energy subsidy program. It is against this backdrop that we must evaluate the role Congress intended for the federal courts in enforcing a state's compliance with the conditions set forth in the Act.
The dispute in the present case concerns Kentucky's method of calculating a household's energy costs in order to determine its subsidy level. The Association claims that the calculation of individual benefits under the Cabinet's Plan violates certain provisions of the Act. The Association represents members who are residents of subsidized public housing. The two individually named claimants, Diane Mills and Salina Murdock, are members of the Association's leadership committee. In its class action challenge to the Cabinet's administration of the energy subsidy program, the Association claims that Kentucky's method for calculating benefit levels unlawfully uses the amount of energy costs allowed tenants in public housing, fails to treat owners and renters equitably, and does not provide the highest benefits to applicants with the lowest incomes and highest costs in relation to income.
The District Court determined that by considering these other energy subsidies, the Cabinet violated § 8624(f)(1), which states that home energy assistance payments or allowances under the Act should not be considered income or resources of the household for any purpose under federal or state law. The District Court accepted the Association's argument that the state may not reduce energy payments under the Act when the claimant is also receiving an energy subsidy as a part of the claimant's monthly public housing assistance. Finding this issue to be dispositive, the Court did not rule on the Association's other claims.
The District Court relied on the Eighth Circuit's decision in Clifford v. Janklow, 733 F.2d 534 (8th Cir.1984). In Clifford, the Court found that § 8624(f)(1) 2 "clearly prohibits the states from reducing a household's entitlement to other forms of public assistance based on its receipt of [federal funds under the energy subsidy program]" and that it also "evinces Congress's intent to prevent the states from achieving the same net effect by the opposite method, ... reducing the [federal energy subsidy] grant based on the applicant's receipt of other forms of public assistance." Id. at 537.
The Cabinet argues that the District Court's holding was inappropriate because no private right of action is implied in the Act and because the Act creates no substantive rights enforceable under 42 U.S.C. § 1983. The Association asserts that its members do have an implied private right of action under the Act and asserts that the Act creates substantive rights in eligible recipients that are enforceable under § 1983. The District Court's order does not discuss the basis for finding that the Association has a private right of action against the Cabinet, but proceeds directly to the merits of the case. We presume that the Court adopted by reference the conclusion of the Eighth Circuit in Crawford v. Janklow, 733 F.2d 541 (8th Cir.1984), a predecessor to Clifford in which the Court found support for implying a private right of action under the Act and for the existence of rights enforceable under § 1983. We are unpersuaded by the Eighth Circuit's reasoning in Crawford. We disagree that the Act authorizes a private right of action prior to exhausting state administrative remedies. We also disagree that the Act creates rights enforceable under § 1983. We thus find it unnecessary to reach the merits of the question as to whether Kentucky's method of distributing federal funds under the Plan violates the Act.
The Act does not expressly provide for a private right of action. Claimants may state a federal claim only if they have an implied private right of action under the Act or if they have a cause of action under 42 U.S.C. § 1983.
When determining whether there is an implied right of action under a federal statute,...
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