COM. OF MASS., BY DPW v. Yeutter, Civ. A. No. 89-0789-H.
| Decision Date | 05 February 1991 |
| Docket Number | Civ. A. No. 89-0789-H. |
| Citation | 756 F. Supp. 48 |
| Parties | COMMONWEALTH OF MASSACHUSETTS, by its DEPARTMENT OF PUBLIC WELFARE, Plaintiff, v. Clayton YEUTTER, Secretary of the United States Department of Agriculture, Defendant. |
| Court | U.S. District Court — District of Massachusetts |
Jon Laramore, Asst. Atty. Gen., Boston, Mass., for plaintiff.
Steven Savner, Mass. Law Reform Institute, Melanie Malherbe, Greater Boston Legal Services, Boston, Mass., for Coalition for Basic Human Needs.
Richard Thornburg, Atty. Gen., Sheila Lieber, David M. Souders, Margaret H. Plank, Attys., Dept. of Justice, Civ. Div., Asst. U.S. Atty. Paul Levenson, of counsel, John Daugherty, Rachel H. Bishop, Staff Atty., General Counsel's Office, U.S. Dept. of Agr., Washington, D.C., for defendant.
This action arises out of the review and disapproval by the Secretary of Agriculture (the "Secretary") of the fiscal year 1989 state plan for administration of the Food Stamp Employment and Training ("FSET") Program in the Commonwealth of Massachusetts (the "Commonwealth"). Both parties have filed motions for summary judgment,1 asking this Court to determine whether the Secretary's refusal to grant approval of the Commonwealth's FSET plan was lawful under the applicable provisions of the Food Stamp Act, 7 U.S.C. § 2011, et seq., and the Secretary's regulations.2
The Secretary contends that Congress delegated to him the broad authority to administer the Food Stamp Program and to engage in substantive review of the FSET provisions of state plans. Thus, the Secretary argues, disapproval of the Commonwealth's 1989 plan was lawful upon the Secretary's determination that certain elements of the plan violated both the broad mandates of the Food Stamp Act and the specific regulations governing FSET programs. The Commonwealth maintains that its plan satisfied all applicable legal requirements and, thus, that the plan should have been approved. The thrust of the Commonwealth's oral argument before this Court, however, is that the Secretary failed to follow proper procedure in deciding to disapprove the Commonwealth's 1989 plan and that the Secretary acted arbitrarily by treating the Commonwealth differently throughout the process from all other states whose plans were reviewed.
Congress implemented the Food Stamp Act (the "Act"), 7 U.S.C. § 2011, et seq., to supplement the nutritional needs of low-income households. Food stamps are distributed free of charge to eligible families and may be used to purchase food at certain markets. 7 U.S.C. § 2016(b). The Food and Nutrition Service of the United States Department of Agriculture ("USDA") administers the Food Stamp Program on the federal level, while each participating state designates a state agency to carry out the day-to-day operations of the program on the state level. USDA reimburses the states for 50 percent of the administrative costs of the state program. 7 U.S.C. § 2025(a).
Under the Act all food stamp recipients, unless otherwise exempt,3 between the ages of sixteen and sixty who are physically and mentally fit, must register for employment and participate in an Employment and Training (FSET) Program. 7 U.S.C. § 2015(d)(1). The Act requires each state to design and implement a FSET program, comprised of specific employment and training components, see 7 U.S.C. § 2015(d)(4)(B), to assist food stamp recipients "in gaining skills, training, or experience that will increase their ability to obtain regular employment." 7 U.S.C. § 2015(d)(4)(A). Each year the state must submit for approval by the Secretary a state plan "specifying the manner in which the state's FSET program will be conducted" in the upcoming fiscal year. 7 U.S.C. § 2020(d). The Secretary is authorized to promulgate guidelines and regulations which enforce the requirements set forth in the statute and to withhold funds upon a state's failure to comply. 7 U.S.C. §§ 2013(c), 2015(d)(4)(M).
On August 13, 1987 the Commonwealth submitted for approval its fiscal year 1988 state plan for operation of Massachusetts' FSET program, and the Secretary granted approval of the plan. In December, 1987 and January, 1988 the Northeast Regional Office of the Food and Nutrition Service ("FNS") conducted an on-site review of the operation of the Commonwealth's program. Following visits to three state offices which administered the FSET program, FNS determined that the Commonwealth was not in compliance with statutory and regulatory requirements regarding both mandatory participation by recipients and sanction procedures. FNS notified Massachusetts of its decision and of the potential for administrative penalties being imposed should the Commonwealth fail to take appropriate corrective action. The Commonwealth responded in a letter to USDA, claiming that Massachusetts' program met all legal requirements and disputing the need for corrective action.
On August 11, 1988 FNS issued a formal warning to the Commonwealth. FNS indicated that the Commonwealth faced potential suspension and/or disallowance of federal funds for administration of the Commonwealth's Food Stamp Program due to its failure to comply with the Secretary's regulations, 7 C.F.R. § 273.7(c) and (f). FNS further stated that the Commonwealth would be required to execute appropriate operational changes within thirty days or incur an administrative penalty of $210,000 in federal funds per quarter, retroactive to January, 1988. The Commonwealth was directed to submit an approved plan — one identifying mandatory participants, setting forth procedures for informing mandatory participants of their employment and training obligations, and disqualifying those who failed to comply. Again the Commonwealth insisted that its program met all legal requirements, and it requested that the warning be withdrawn.
On or about the same time that the Commonwealth received FNS' formal warning, the Commonwealth submitted its fiscal year 1989 state plan to the Secretary. The 1989 plan was nearly identical in all respects to the 1988 plan. A series of negotiations and communications then ensued between the Commonwealth and USDA. USDA emphasized that the Commonwealth's 1989 plan would not receive approval unless the Commonwealth incorporated specific amendments into the plan to address the concerns raised in the August warning.4
On October 7, 1988, the Commonwealth, under protest, revised its 1989 plan to satisfy USDA's objections. On October 25, 1988 USDA stated that it was "prepared to approve" the revised plan. However, USDA would grant that approval only upon the condition that the Commonwealth implement the proposed revisions within two weeks. USDA later extended the implementation period to thirty days. The Commonwealth objected to USDA's refusal to approve the plan, as amended, and it challenged the time frame established for implementation. The Commonwealth proposed implementation of all operational changes by March 1, 1989. On January 19, 1989 USDA notified the Commonwealth that the March 1 date was unacceptable. USDA further informed the Commonwealth that the 1989 state plan would not receive retroactive approval.
The Commonwealth finally achieved compliance with USDA's requests on March 20, 1989. The Secretary approved the Commonwealth's plan on June 30, 1989, but USDA refused to reimburse the Commonwealth for $4,390,882 in administrative expenses incurred during the period October 1, 1988 through March 20, 1989, because the Commonwealth was not operating under an approved plan during that period. Since March 20, 1989 the Commonwealth has operated its FSET program in a manner consistent with the provisions of its revised 1989 plan. The Secretary has approved and funded the Commonwealth's 1990 and 1991 plans.
In this action, the Commonwealth challenges the Secretary's conduct in linking approval of the Commonwealth's 1989 plan to the Commonwealth's willingness to undertake, and its ability to implement, corrective measures with respect to its 1988 plan. In particular, the Commonwealth construes the Act as directing the Secretary to consider only "the four corners of the plan" during the approval process. Under the statute, the Commonwealth argues, the Secretary must utilize the administrative penalty process — not the approval process — to redress perceived deficiencies in a state's operation of its FSET program. The Commonwealth asserts, therefore, that the Secretary improperly considered matters relating to the actual operation of the Commonwealth's plan when he required the Commonwealth to implement specific changes in its 1989 plan before granting approval. The Commonwealth further asserts that the Secretary treated Massachusetts differently from other states by requiring full implementation of changes prior to approval and by refusing to grant retroactive approval once implementation was complete.5
In reviewing the Secretary's action, the Court must follow the two-step process set forth in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). See Commonwealth of Massachusetts v. Lyng, 893 F.2d 424, 428 (1st Cir.1990) (). The Court must decide first "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. at 2781. If the meaning of the statute is clear with respect to that question, the Court must enforce the "unambiguously expressed intent of Congress." Id. If, however, the statute does not squarely address the question at issue, the Court must determine whether the Secretary's action "is based on a permissible construction of the statute." Id. at 843, 104 S.Ct. at 2782.
Usually the Court will defer to the Secretary's interpretation of its mandate. Ind...
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