Com. of Pa., Dept. of Public Welfare v. U.S.

• Decision Date: 27 January 2006
• Docket Number: No. 2:04-CV-00742.,2:04-CV-00742.
• Parties: COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, Plaintiff, v. UNITED STATES OF AMERICA; and, Department of Health and Human Services, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

411 F.Supp.2d 586

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, Plaintiff, v. UNITED STATES OF AMERICA; and, Department of Health and Human Services, Defendants.

No. 2:04-CV-00742.

United States District Court, W.D. Pennsylvania.

January 27, 2006.

COPYRIGHT MATERIAL OMITTED

Jason W. Manne, Department of Public Welfare, Office of General Counsel, Pittsburgh, PA, for Plaintiff.

Jessica Lieber Smolar, United States Attorney's Office, Pittsburgh, PA, Sheila Lieber, Department of Justice, Marcia Sowles, United States Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

MCVERRY, District Judge.

Before the Court for disposition are the DEFENDANTS' MOTION TO DISMISS ("Motion to Dismiss") filed by defendants United States of America and United States Department of Health and Human Services (collectively referred to herein as "HHS") on August 4, 2004 and PLAINTIFF'S MOTION FOR SUMMARY JUDGEMENT ("Motion for Summary Judgment") filed by plaintiff Commonwealth of Pennsylvania Department of Public Welfare ("PADPW") on October 20, 2004.¹ HHS filed the Administrative Record on August 4, 2004; PADPW filed a Summary Judgment Appendix with its Motion for Summary Judgment.

After considering the parties' filings, the administrative record, summary judgment appendix and the relevant statutory and case law, the Court will grant the Motion for Summary Judgment filed by PADPW and deny the Motion to Dismiss filed by HHS.

I. INTRODUCTION

This case requires the Court to review a decision by HHS to disapprove an amendment to Pennsylvania's Title IV-E state plan proposed by PADPW. The proposed amendment would have altered the eligibility standards for Pennsylvania's Aid to Families with Dependent Children — Foster Care program ("AFDC-FC"). After HHS notified PADPW of its decision not to approve the plan amendment and without further administrative review, PADPW filed a COMPLAINT in this Court on May 18, 2004 pursuant to 5 U.S.C. § 704. PADPW alleged that HHS's decision was arbitrary, capricious, and otherwise invalid under 5 U.S.C. § 706(2).²

II. FACTUAL HISTORY

The facts in this case are not disputed. Pennsylvania established its AFDC-FC program under Title IV-E of the Social Security Act. See 42 U.S.C. § 670 et. seq. Title IV-E requires participating states to have a state plan for foster care and adoption assistance approved by the Secretary of HHS. 42 U.S.C. § 671. On October 1, 2003, PADPW submitted to HHS a proposed amendment to its state AFDC-FC program; the proposed amendment would have altered the eligibility criteria for AFDC-FC. AFDC-FC benefits cover "the cost of food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child and reasonable travel to the child's home for visitation." 42 U.S.C. § 675(4)(A). Because of foster children's special needs, the amount of money provided to foster children in the form of AFDC-FC benefits has been considerably more generous than that provided under AFDC and now TANF.³ California Department of Social Services v. Thompson, 321 F.3d 835, 841(9th Cir.2003) (citing Miller v. Youakim, 440 U.S. 125, 143, 99 S.Ct. 957, 59 L.Ed.2d 194 (1979)).

42 U.S.C. § 672(a) sets forth the requirements that a state plan must have in place for receipt of AFDC-FC benefits. One requirement included in section 672(a) is that a child have been removed from the home of her parent or legal guardian. Removal can either occur as a result of a "judicial determination to the effect that continuation therein would be contrary to the welfare of such child" or by voluntary placement agreement "entered into by the child's parent or legal guardian." 42 U.S.C. § 672(a). Removal is, therefore, a legal action that is distinct from physical removal from the home. The Court will refer to the home from which a child is legally removed as the "Removal Home." Section 672(a) also includes the requirement that a child satisfy the requirements of the old AFDC program at the time of legal removal.⁴

PADPW proposed an amendment to its state plan such that "a child need not be eligible under [AFDC in the Removal Home], but need only have been eligible for AFDC in the home of any specified relative (including that of an interim caretaker) within six months of the date a voluntary placement agreement was signed or in which removal proceedings were initiated." Administrative Record at 1. In other words, although the state plan had previously provided that AFDC qualification was evaluated exclusively in the Removal Home, PADPW proposed that a child could receive AFDC-FC benefits if she would have qualified for AFDC in the home of a relative where the child was temporarily residing at the time of removal. For ease, the Court will refer to this latter arrangement as "Temporary Relative Housing".⁵

PADPW's amendment would have expanded the class of children eligible for AFDC-FC benefits in Pennsylvania. PADPW informed HHS that its proposed amendment was in accordance with and intended to "implement in Pennsylvania the decision of the United States Court of Appeals Ninth Circuit decision in the case of State of California Department of Social Services v. Thompson, 321 F.3d 835 (9th Cir.2003)." Id.

On October 28, 2003, David Lett, Regional Administrator of HHS' Administration for Children and Families, Region III, sent a letter to PADPW informing it that he would not approve the plan amendment because it was "not consistent" with the Title IV-E statute and its implementing regulations which required that the AFDC determination could only be based on the removal Home. In addition, the letter advised PADPW that the Thompson decision from the Ninth Circuit that PADPW relied upon "applie[d] only to States within the Ninth Circuit ... Consequently Pennsylvania must continue to determine [T]itle IV-E eligibility in a manner consistent with the Federal statute and regulations ..." Administrative Record at 15.

On November 26, 2003, PADPW contacted HHS and requested reconsideration of the decision. The letter noted that PADPW would seek judicial review if it did not receive a response within thirty days. On January 30, 2004, HHS sent a letter to PADPW in which the Assistant Secretary for Children and Families informed PADPW that reconsideration was not provided for in HHS' regulations but that "a hearing in accordance with 45 CFR part 213" could be pursued. Administrative Record at 16. PADPW instituted this action on May 18, 2004

III. DISCUSSION

A. The Appropriate Standards of Review Under the Federal Rules of Civil Procedure.

HHS requests that this Court dismiss the plaintiff's complaint for failure to state a claim. When deciding a motion filed pursuant to Federal Rule of Civil Procedure 12(b)(6), the Court must view all facts, and reasonable inferences drawn therefrom, in the light most favorable to the non-movant. General Motors Corp. v. New A.C. Chevrolet, Inc., 263 F.3d 296, 325 (3d Cir.2001). Dismissal is appropriate only "if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); see also Lorenz v. CSX Corp., 1 F.3d 1406, 1411 (3d Cir.1993). The Federal Rules of Civil Procedure do not require detailed pleadings of the facts on which a claim is based; instead, they require "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). That statement need merely give the defendant fair notice of the claim and the grounds upon which it rests. Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Notwithstanding this standard, the Court "need not credit a complaint's bald assertions or legal conclusions." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997) (internal quotations omitted).

In light of the minimal notice pleading requirements and because the dispute between the parties presents a disputed question of law not fact, the defendant's Motion to Dismiss must be dismissed. PADPW's Complaint raises an issue of subtle statutory interpretation and implicates issues of deference under Chevron; as a result, PADPW's cause of action will not be dismissed merely on the pleadings.

PADPW seeks summary judgment which is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Belitskus v. Pizzingrilli, 343 F.3d 632, 639 (3d Cir.2003). Summary judgment is inappropriate "if a disputed fact exists which might affect the outcome of the suit under the controlling substantive law." Josey v. John R. Hollingsworth Corp., 996 F.2d 632, 637 (3d Cir.1993) (citation omitted).

The full administrative record of the case has been provided to the Court and made an official part of the record in this proceeding. Although an administrative record is not listed in Rule 56(c) nor is it part of the pleadings, the Court will rely on the administrative record when it proceeds under Rule 56(c) to determine whether summary judgment should be granted. See, Lapid-Laurel, L.L.C. v. Zoning Bd. of Adjustment of Tp. of Scotch Plains, 284 F.3d 442, 451 (3d Cir.2002); U.S. v. Spears, 859 F.2d 284 (3d Cir.1988); Grandison v. Cuyler, 774 F.2d 598 (3d Cir.1985). The parties' motions did not present any disputed facts, as a result, the Court will decide this case as a matter of law.

B. The Appropriate Standard Under the Administrative Procedures Act.

The Administrative Procedures Act (the "Act") governs judicial review of federal agency decisions. 5 U.S.C. § 701 et seq. This Court's review of HHS' decision is governed by section 706(2), which sets the standards of review under the Act. PADPW...