Collins v. Barry

Decision Date19 September 1986
Docket NumberNo. C69-830.,C69-830.
Citation644 F. Supp. 249
PartiesDorothy COLLINS, et al., Plaintiffs, v. Patricia K. BARRY, et al., Defendants.
CourtU.S. District Court — Northern District of Ohio

Robert H. Bonthius, Jr., Carolyn L. Carter, Cleveland, Ohio, for plaintiffs.

Dennis G. Nealon, Asst. Atty. Gen., Columbus, Ohio, for defendants.

BATTISTI, Chief Judge.

On January 22, 1971, an order was entered which prohibited the state and county public welfare departments from defining in a certain way the "family unit rule," which defendants employed to determine eligibility and payment levels for the Aid to Families with Dependent Children ("AFDC") program. Under that former state rule, Social Security Old-Age, Survivors, and Disability Insurance ("OASDI") or Title II income of child beneficiaries was treated as income available to the family generally. As a result of this rule, AFDC benefits were denied or paid at reduced levels to the families of which a member was receiving OASDI benefits. Plaintiffs claimed that OASDI benefits were to be used exclusively for the intended beneficiaries, and to do otherwise would be to violate certain fiduciary duties under federal law.

Two questions were raised in plaintiffs' suit: an alleged deprivation of the Fourteenth Amendment right to equal protection of the laws, and the incompatibility of the state procedure with federal social security statutes and regulations. Because of the finding that a conflict between state and federal law existed, there was no need to reach the question of equal protection.1 Depending on which side one takes in the present matter, these two issues once again may or may not exist in this Court. Plaintiffs argue that these two issues do in fact remain; defendants argue that through the Deficit Reduction Act of 1984, the addition of § 402(a)(38) to Title IV of the Social Security Act definitively resolved these issues. Defendants specifically argue that in light of this statutory change, the federal-state conflict underlying the 1971 injunction no longer exists. Accordingly, defendants have moved the Court for relief from the order of January 22, 1971. On the other hand, plaintiffs have requested an order holding defendants in contempt for violation of this order.

The issue to be resolved is whether 42 U.S.C. § 602(a)(38) requires recipients of OASDI benefits to be counted in the "standard filing unit" when determining AFDC benefits. Admittedly, the instant case presents a slight twist insofar as the parties and the Court must deal with an earlier injunction prohibiting what defendants now are doing under the claimed shield of state and federal law. Nevertheless, the issue still remains as to whether the Deficit Reduction Act did indeed bring about the changes which defendants argue, and the answer to this question still requires an examination of § 602(a)(38). Defendants argue that the recent statutory amendments promulgated through the Deficit Reduction Act require this inclusion. Plaintiffs argue that the amendment requires this inclusion only in certain limited circumstances. Good lawyering combined with unclear and ambiguous congressional and executive action have forced a judicial resolution to this rather complex issue.

Arguments from both sides presented to the various district courts which have dealt with this issue have produced well-reasoned opinions but at times irreconcilable results. Upon consideration of these holdings and of the excellent briefing of this issue in the matter now before the Court,2 defendants are hereby adjudged in contempt of this Court for having violated the terms of the final judgment entered in this case on January 22, 1971. Accordingly, the Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. On January 22, 1971, a final order was issued in this matter. The case concerned families in which one or more children received OASDI benefits, provided under Title II of the Social Security Act, paid to them through a parent acting as their fiduciary (then called "trustee," now called "representative payee"). The Director of the Ohio Department of Public Welfare (now the Ohio Department of Human Services) had promulgated and was then enforcing a "family unit rule," Ohio Public Assistance Manual ("OPAM") § 452.1, which was utilized to determine eligibility and payment levels in the AFDC program. Under the rule, the OASDI income of child beneficiaries was treated as income available to the family (i.e., parents and half-siblings) generally. As a result of this rule, AFDC benefits were denied or paid at reduced levels to needy children in the family unit who themselves did not receive OASDI benefits.

2. The Court held that the family unit rule conflicted with the language and spirit of the social security laws. The rule violated specifically 42 U.S.C. §§ 402(d) and 408(e), which entitled OASDI child beneficiaries to receive OASDI benefits in their own right and which obligate their representative payee to devote the benefits to their use and benefit or face prosecution. The rule also violated the AFDC availability principle enunciated in Lewis v. Martin, 397 U.S. 552, 90 S.Ct. 1282, 25 L.Ed.2d 561 (1970) (holding that income of stepfathers or certain non-legally obligated men could not be assumed to be available to needy children under 42 U.S.C. § 602(a)(7)), by treating OASDI benefits of non-legally obligated children as available to the needy children in the family unit. The family unit rule further had the untoward effect of forcing the representative payee to violate her fiduciary relationship with the OASDI beneficiaries by using OASDI benefits to support the needy children in the family.

3. Accordingly, the Court permanently enjoined defendants "from enforcing Section 452.1 of the Ohio Public Assistance Manual as it now reads, so as to include as `available family income' any income which under the terms of the Social Security laws and regulations is not available to the family generally but is restricted to the use and benefit of a named beneficiary." Order, Jan. 22, 1971, at 6. This permanent injunction ran in favor of the plaintiff class, which consisted of all Ohio families in which there are both needy children and children receiving OASDI benefits.

4. On July 18, 1984, Congress passed the Deficit Reduction Act of 1984, part of which amended Title IV of the Social Security Act (the AFDC program) by adding a new paragraph (38) to § 402(a). Codified at 42 U.S.C. § 602(a)(38), the new paragraph provides:

(a) A state plan for aid and services to needy families with children must
* * * * * *
(38) provide that in making the determination under paragraph (7) with respect to a dependent child and applying paragraph (8), the State agency shall (except as otherwise provided in this part) include—
(A) any parent of such child, and
(B) any brother or sister of such child, if such brother or sister meets the conditions described in clauses (1) and (2) of section 406(a) 42 U.S.C. § 606(a), if such parent, brother, or sister is living in the same home as the dependent child, and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 205(j) 42 U.S.C. § 405(j) in the case of benefits provided under title II).

5. On September 10, 1984, the United States Department of Health and Human Services promulgated a regulation interpreting 42 U.S.C. § 602(a)(38). See 49 Fed. Reg. 35586 et seq. Codified at 45 C.F.R. § 206.10(a)(1)(vii), the regulation, which became effective October 1, 1984, provides:

For AFDC only, in order for the family to be eligible, an application with respect to a dependent child must also include, if living in the same household and otherwise eligible for assistance:
(A) Any natural or adoptive parent, or stepparent (in the case of States with laws of general applicability); and
(B) Any blood-related or adoptive brother or sister.

6. Effective October 1, 1984, the Ohio Department of Human Services adopted an AFDC "standard filing unit rule" interpreting this federal regulation. A consequence of this rule's enforcement is the defendants' adoption of a policy whereby OASDI benefits of a child paid through a representative payee are treated as income available to the family generally when determining AFDC eligibility and payment level for the entire family. Before plaintiffs' filing of their Motion to Show Cause, defendants did not seek any order from this Court to modify in any way the order of January 22, 1971, despite their conduct which, by their own admission, was contrary to the terms of that order. See Defendants' Motion for Relief from Judgment 12.

7. Defendant Patricia K. Barry, currently Director of the Ohio Department of Human Services, is responsible for the administration of the ADC program in Ohio and promulgated OPAM § 4501 and Ohio Administrative Code ("OAC") § 5101:1-21-011, known as "the standard filing unit rule."

8. Plaintiff Marquittius Bearden is a class member affected adversely by the new standard filing unit rule and brings this contempt action by and through her grandmother, Daisy Bearden.

9. Daisy Bearden is the grandmother of Marquittius and Marquittius' half-sister, Latonya Bearden. Latonya and Marquittius (ages 15 and 11, respectively) are daughters of Linda Bearden, Daisy Bearden's daughter, but by different fathers.

10. Until November 1985, Daisy Bearden received AFDC benefits for both Latonya and Marquittius. That month Latonya began to receive OASDI benefits because her father had died. Daisy Bearden received these payments as Latonya's representative payee. Marquittius does not receive OASDI benefits because she had a different father.

11. Due to the operation of the standard filing unit rule, Marquittius was denied AFDC benefits because of the OASDI benefits paid to her half-sister, Latonya, through Daisy Bearden,...

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4 cases
  • Elam v. Barry
    • United States
    • U.S. District Court — Southern District of Ohio
    • 18 December 1986
    ...is therefore DENIED. Standard Filing Unit Rule The Court is persuaded by the decision of the Northern District of Ohio in Collins v. Barry, 644 F.Supp. 249 (N.D.O.1986). In the context of reviewing a motion for issuance of a contempt order for violation of a 1971 injunction, Chief Judge Bat......
  • Calamia v. City of New York
    • United States
    • U.S. Court of Appeals — Second Circuit
    • 22 June 1989
    ... Page 1025 ... 879 F.2d 1025 ... Barry CALAMIA, Plaintiff-Appellee, ... The CITY OF NEW YORK, the Police Department of the City of ... New York, and Kevin Sutton, individually and as ... ...
  • Collins on Behalf of Collins v. Barry, s. 86-4024
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • 21 March 1988
    ...Director in contempt of its January 22, 1971, injunction. The Director's motion for relief from judgment was denied. Collins v. Barry, 644 F.Supp. 249 (N.D. Ohio 1986). On September 30, 1986, the Director filed a notice of appeal and a motion to stay enforcement of the order pending appeal ......
  • Graham v. City of Charlotte
    • United States
    • U.S. District Court — Western District of North Carolina
    • 19 September 1986

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