Cotton v. Mansour

• Decision Date: 11 April 1986
• Docket Number: No. 85-CV-40068-FL.,85-CV-40068-FL.
• Citation: 634 F. Supp. 1094
• Parties: Patricia COTTON, on behalf of herself and all other persons similarly situated, Plaintiff, v. Agnes M. MANSOUR, personally and in her official capacity as Director of the Michigan Department of Social Services, Defendant.
• Court: U.S. District Court — Western District of Michigan

634 F. Supp. 1094

Patricia COTTON, on behalf of herself and all other persons similarly situated, Plaintiff, v. Agnes M. MANSOUR, personally and in her official capacity as Director of the Michigan Department of Social Services, Defendant.

No. 85-CV-40068-FL.

United States District Court, E.D. Michigan, S.D. At Flint.

April 11, 1986.

Terri L. Stangl, Legal Services of Eastern Mich., Flint, Mich., for plaintiff.

Erica Weiss Marsden, Asst. Atty. Gen., Lansing, Mich., for defendant.

MEMORANDUM OPINION AND ORDER

NEWBLATT, District Judge.

Before the Court are the parties' Cross Motions for Summary Judgment. Plaintiff, a recipient of Aid to Families with Dependent Children (AFDC) and food stamps under the Food Stamp Program, brought this action for declaratory and injunctive relief to enforce her entitlement to food stamps. More specifically, plaintiff requests a declaratory judgment holding that defendant's prior policy of calculation was unlawful, that defendant be ordered to provide plaintiff wrongfully-withheld food stamps and that defendant be ordered to issue notice of underpayment and notice of the administrative mechanisms through which claimant's eligibility will be calculated.

I FACTS

In early 1984, plaintiff moved into a new apartment and to receive her AFDC grant for shelter, she gave her landlord a shelter verification form which he failed to return to the Michigan Department of Social Services, (MDSS) until March 1984. Thus, plaintiff did not receive her February AFDC grant until May 1984. This was just the beginning of plaintiff's problems because when MDSC calculated plaintiff's July, 1984 food stamps allowance, it counted this retroactive shelter allowance as extra income thereby reducing her July food stamps allowance. Although her February rent was to be paid with this allowance, the MDSC considered it available for food. MDSS claimed its method of calculation was correct because it considered the shelter allowance to be a corrective payment under 7 C.F.R. § 273.21(j)(1)(vii)(B).

The Food Stamp Act, 7 U.S.C. § 2011 et seq. was enacted by Congress to provide federal funds to "permit low-income households to obtain a more nutritious diet through normal channels of trade by increasing food purchasing power ..." Food stamps, as well as other welfare benefits, are a legal right and statutory entitlement. Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). Administration of food stamp programs is handled by a state agency of each state which participates in the program. 7 U.S.C. § 2020. In Michigan, MDSS administers the program and is bound by federal statute and regulations.

Food stamp eligibility is based on household income. 7 U.S.C. § 2012(e), 7 C.F.R. § 273.1(a). Certain income is exempt, 7 C.F.R. § 273.9(c), and MDSS deducts a variety of expenses including shelter expenses. Food stamp allotment for a particular month is based on the remaining income of a month two months prior. Starting in 1981, the federal government made changes requiring states to more promptly increase a family's AFDC grant when need increased, 42 U.S.C. § 602(a)(14)(B), so that by 1983 corrective payments could be issued in the same month needed. 48 F.R. § 54955. (Plaintiff's Ex. D). As a result, the Department of Agriculture amended food stamp regulations so that corrective payments were to be counted prospectively or retrospectively depending on what they were for. 7 C.F.R. § 273.21(j)(i)(vii)(B).¹

A comment accompanying this regulation indicated that retroactive payments intended to meet the needs in one or more previous months must be excluded as income pursuant to 7 C.F.R. § 273.9(c)(8). A memorandum issued in August 1984 by the Food and Nutrition Service (FNS) reaffirmed this in that "amounts AFDC benefits restored for prior months is disregarded as a non-recurring lump-sum payment regardless of the source of the payment." (Def. Ex. A-1) Although this memorandum was issued in August, MDSS did not change its policy² until December 1984 nor did it notify food stamp recipients that they could request an administrative hearing. Defendant responded to plaintiff's written inquiry that it would not issue such a notice because:

a) It believed its method of budgeting prior to August 1984 was authorized by FNS, and

b) It believed that the delay between August 28, 1984 and December 1, 1984 was a reasonable time for the state to change its policy to be consistent with the FNS memo.

II

Plaintiff contends that MDSS's method of budgeting corrective payments violated federal welfare laws both before and after the August 1984 memo³ and seeks declaratory relief to "declare that defendant's method of budgeting ... supplemental ... payments violates 42 U.S.C. § 1983, the Food Stamp Act and the United States Constitution." (Pl.Comp. ¶ 3). While it is true that when a state administers food stamps in a manner more restrictive than required by federal law that courts have not hesitated to grant declaratory relief, defendant argues that subject matter jurisdiction is lacking because there is no longer a case or controversy as required under Article III, Section 2, clause 1 of the United States Constitution or 28 U.S.C. § 2201. Defendant contends that to the extent that plaintiff requests prospective relief, that issue was moot prior to plaintiff's filing her suit on February 15, 1985 because the MDSS changed its policy on December 1, 1984 to budget non-recurring supplemental assistance payments in the manner sought to be compelled by plaintiff.

The "case or controversy" requirement in Article III prevents federal courts from considering questions which have become moot. St. Pierre v. United States, 319 U.S. 41, 63 S.Ct. 910, 87 L.Ed. 1199 (1943). As defendant points out, the United States Supreme Court in North Carolina v. Rice, 404 U.S. 244, 246, 92 S.Ct. 402, 404, 30 L.Ed.2d 413 (1971) stated:

To be cognizable in a federal court, a suit `must be definite and concrete, touching the legal relations of parties having adverse legal interests...' However, moot questions require no answer... Mootness is a jurisdictional question because the Court `is not empowered to decide moot questions or abstract propositions,'...

Moreover, the "case of actual controversy" requirement in the Declaratory Judgment Act, 28 U.S.C. § 2201, is considered to be the same as that in Article III. Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617 (1937).

To the extent that plaintiff seeks a declaratory judgment and any prospective injunctive relief as to defendant's food stamp allotment budget policies that portion of plaintiff's claims should be dismissed as moot. Plaintiff's claim for retroactive relief, however, is different.

III

Plaintiff requests retroactive relief in the form of unissued food stamps and that defendant be required to notify class members whose stamps were wrongfully withheld. Defendant argues that the Court lacks jurisdiction because of the Eleventh Amendment. The Eleventh Amendment provides a restraint on federal courts exercising jurisdiction over suits brought by individuals against states, including citizens of their own states.⁴ Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). To the extent that state officials are sued (in their official capacities) for retrospective relief, they enjoy Eleventh Amendment protection unless there is an exception. Plaintiff contends that food stamps are entirely financed by federal funds through the United States Department of Agriculture (USDA) and that the only costs to be borne by the state are administrative for which it may not claim immunity.

A.

It is obvious that states cannot claim relief from a retroactive award of food stamps. In Stewart v. Butz, 356 F.Supp. 1345 (W.D.Ky.1973), aff'd 491 F.2d 165, the Sixth Circuit Court of Appeals held that the federal government, not the state, must pay for food stamps wrongfully withheld. The Court upheld the district court's opinion which used the Eleventh Amendment as a reason for holding the federal government liable for wrongfully withheld welfare benefits: "The necessity of `cooperative federalism' in such welfare programs ... precludes the exercise of the equitable powers of a federal district court to order retroactive payments from state monies." Id. at 1352.⁵See also Carter v. Butz, 479 F.2d 1084 (3d Cir.), cert. denied 414 U.S. 1103, 94 S.Ct. 737, 38 L.Ed.2d 559 (1973) ("Under the Food Stamp Act ... the Federal Government pays for benefits... while the state pays for a portion of administrative costs.);⁶Harrington v. Blum, 483 F.Supp. 1015 (1979) aff'd 639 F.2d 768 (2d Cir.1980). (Because states may seek reimbursement from the USDA for retroactive benefits paid, states may be ordered to arrange for the award of retroactive benefits);⁷ and Collins v. Marshall, 507 F.Supp. 83 (W.D.Mo.), rev'd on other grounds sub nom. Collins v. Donovan, 661 F.2d 705 (8th Cir.1981).

Thus, it is concluded that ordering the state to arrange for wrongfully withheld benefits will not, at least to the extent of the food stamps, violate the Eleventh Amendment. In fact, from a review of defendant's brief it appears that defendant has only raised the issue of whether she must provide notice to recipients of their entitlement to additional food stamps and the procedures through which they could process their claim. Moreover, it appears that defendant wrongfully withheld food stamps due to its policy of including supplemental payments from March 1, 1984 to December 1, 1984.

B.

Plaintiff argues that administrative costs associated with notice does not bar plaintiff from receiving retroactive food stamps because these costs are distinguishable from food stamps and the Eleventh Amendment is not involved. Clearly, the administrative costs are distinguishable from food stamps. See above cited cases. See also 7 U.S.C. § 2020(e)(9)(A)(11); 7 C.F.R. § 273.17(b). Moreover, the costs of arranging the...