Craig v. Finch, 28096.

• Decision Date: 24 April 1970
• Docket Number: No. 28096.,28096.
• Parties: Lillian R. CRAIG, a feme sole, on behalf of Michael A. Kelly, Plaintiff-Appellee, v. Robert H. FINCH, Secretary of Health, Education and Welfare, successor to Wilbur J. Cohen and John W. Gardner, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

425 F.2d 1005 (1970)

Lillian R. CRAIG, a feme sole, on behalf of Michael A. Kelly, Plaintiff-Appellee, v. Robert H. FINCH, Secretary of Health, Education and Welfare, successor to Wilbur J. Cohen and John W. Gardner, Defendant-Appellant.

No. 28096.

United States Court of Appeals, Fifth Circuit.

April 24, 1970.

Eldon B. Mahon, U. S. Atty., Dallas, Tex., Kathryn H. Baldwin, Robert M. Heier, Patricia S. Baptiste, Attys., Dept. of Justice, Washington, D. C., for defendant-appellant.

Bernard Cohen, Mabel Spellman Barber, Dallas, Tex., for plaintiff-appellee.

Before THORNBERRY, DYER and CLARK, Circuit Judges.

DYER, Circuit Judge.

This action was brought by Mrs. Lillian R. Craig under 42 U.S.C.A. § 405 (g) of the Social Security Act to review a decision of the Secretary of Health, Education and Welfare which denied child benefits under the Act to Mrs. Craig's adopted son, Michael Kelly. The District Court reversed the Secretary's decision and awarded benefits.

The only question presented in the case is a construction of the phrase "legally adopted" as it appears in 42 U.S.C.A. § 402(d) (9) (B) of the Act. The District Court construed the phrase to mean "a factually existing and continuing parent-child relationship within the specified limitation period created without a view toward economic gain," i. e., an in loco parentis relationship. Even though the case is factually appealing in favor of an award, we are forced to disagree with the District Court's construction of the phrase. We conclude that "legally adopted" as used in Section 402(d) (9) (B) means an adoption pursuant to formal statutorily-authorized proceedings. We therefore reverse the judgment awarding child benefits to Michael.¹

Mrs. Craig applied for old-age benefits under the Social Security Act, 42 U.S. C.A. § 401 et seq., in December, 1961. The benefits were awarded, retroactive to December, 1960.

In November, 1966, she filed application for child benefits on behalf of Michael Kelly, claiming he was entitled to them as her adopted child. The facts relied upon to support this claim are that Michael was born to unwed parents in 1959. At the time of his birth Michael's mother was serving a prison sentence in a Texas penitentiary. She continued to serve this sentence for several years after his birth.² Michael's father is Mrs. Craig's grandson. Michael remained in the hospital where he was born for about six weeks and was then released to Mrs. Craig's custody. He has been residing with her ever since under her sole support. In February, 1965, Mrs. Craig consulted an attorney concerning the possibility of adopting Michael formally. In July, 1966, she filed a petition in the Juvenile Court of Dallas County, Texas, for the purpose of adopting Michael. That court rendered a final decree of adoption on October 13, 1966.

Based upon these facts the hearing examiner awarded benefits, concluding that the legal adoption requirement of § 402 (d) (9) (B) was satisfied by an equitable adoption which he found to exist and which was recognized under state law. Reviewing the case sua sponte the Appeals Council reversed on the ground that an equitable adoption does not satisfy the "legally adopted" requirement. This became the Secretary's determination. The District Court agreed that an equitable adoption was insufficient, but held that the existing in loco parentis relationship met the requirement of a legal adoption.

Title 42 U.S.C.A. § 402(d) (1) provides that every "child" (within Section 416(e) of the Act)³ of an individual entitled to old-age benefits is entitled to child benefits if he is "dependent" upon such person. There are thus two main requirements before child benefits can be awarded: the person receiving the benefits must have the status of a "child" and he must be a "dependent". The status of a "child" is determined by § 416. Under § 416(h) (2) (A), one who is not actually the child of a wage earner will nevertheless occupy that status for purposes of the Act if intestate personal property of the wage earner would devolve upon him under the applicable state law (see footnote 3, supra), which is Texas law in this instance since Mrs. Craig was domiciled in Texas when she filed her application for old-age benefits. The Secretary has not contested the findings below that Mrs. Craig equitably adopted Michael and that such adoption would be sufficient under Texas law for Mrs. Craig's intestate property to devolve upon Michael. We therefore assume, without deciding, that Michael is a "child" within § 416(h) (2) (A).

Whether one is a "dependent" or not is determined by § 402(d).⁴ If, at the time the wage earner originally filed for old age benefits, a child is the natural born or adopted child of the wage earner, the child is deemed a "dependent" under § 402(d) (3). There is no requirement under § 402(d) (3) of a "legal" adoption. The Secretary concedes that by virtue of § 402(d) (3) an equitable adoption (at least if recognized under state law) would suffice to make a child a "dependent" if the equitable adoption occurred before the wage earner filed application for old-age benefits. Thus, if Michael had been equitably adopted by Mrs. Craig before December, 1961, when she applied for benefits for herself, he would be a "dependent" and entitled to his own benefits.

However, in this case Michael was equitably adopted after Mrs. Craig became entitled to her benefits in December, 1961.⁵ Under § 402(d) (9) he is deemed not to be a dependent unless he is the natural child or step child of Mrs. Craig or was "legally adopted" by her within two years after she became entitled to old-age benefits or prior to August, 1966.⁶

The issue is thus clearly framed. If either the equitable adoption (which occurred before August, 1966) or the admittedly existing in loco parentis relationship between Mrs. Craig and Michael constitutes legal adoption within § 402 (d) (9) (B), then Michael qualifies as a "dependent" and is entitled to child benefits. If, on the other hand, "legally adopted" in that section means pursuant to formal, statutorily-authorized proceedings, Michael is not a "dependent" because his formal adoption decree was not entered until October, 1966, several months after the August, 1966, deadline.

The guiding principle of statutory construction is, of course, to ascertain the legislative intent. E. g., United States v. Bowman, 3 Cir. 1966, 358 F.2d 421; City of Newark v. United States, 3 Cir. 1958, 254 F.2d 93; see Hattaway v. United States, 5 Cir. 1962, 304 F.2d 5. There are several indications in the language of the statute itself which show an intent that "legally adopted" as used in § 402(d) (9) (B) contemplates formal state statutory adoption proceedings.

First, the word "adoption" or "adopts" appears in several places throughout the statute without a qualifying or modifying word as, for example, in § 402(d) (3) which is discussed above. It is true that in defining who is a "child" within § 416(e) Congress used the term "legally adopted" and that it there is not limited to a formal procedure. However, § 416 (h) (2) (A) modifies the phrase as there used to include anyone upon whom intestate personal property would devolve under the applicable state law. It is significant that there are no such clauses modifying "legally adopted" in § 402(d) (9) where it is used to determine only the question of dependency.

Second, after providing that a child must be "legally adopted" in order to be a "dependent", § 402(d) (9) (B) adds two additional requirements: (i) the child must have been receiving at least one-half his support from the individual it is claimed he is dependent upon at the time that individual filed his application for benefits, and (ii) either "proceedings for such adoption of the child" must have been instituted by the month in which the individual filed his application for benefits, or the child must have been living with the individual in that month. (Emphasis added.) (See footnote 4 where these subsections are set out in full). Michael met these additional requirements because he was receiving all his support from Mrs. Craig and was living with her. But the language "proceedings for such adoption" appearing in § 402(d) (9) (B) (ii) shows that Congress had in mind earlier in § 402(d) (9) (B) when it used the phrase "legally adopted" something more than a mere relationship having legal efficacy under state law.

Identical language appears in § 402 (d) (8) which provides that an after-adopted child of a person receiving disability benefits is not deemed to be a dependent for purposes of receiving benefits himself unless he was "legally adopted" within a two year period after the wage earner became entitled to disability benefits and "proceedings for such adoption of the child had been instituted by such individual in or before the month in which began the period of disability * * *." (Emphasis added.) The legislative history to § 402(d) (8) shows that Congress intentionally chose the word "proceedings" to indicate that a legal adoption within that section is one consummated by a formal procedure authorized by state law:

Such proceedings for the adoption of the child are not intended to be limited merely to court proceedings, but also include proceedings and arrangements with licensed adopting agencies or other qualified persons. Sen.Rep.No. 1856, 86th Cong., 2d Sess. (1960); 2 U.S.Code Cong. & Ad.News, p. 3643 (1960).

The emphasis in the plain language of §§ 402(d) (8) and (d) (9), and in the legislative history of § 402(d) (8), upon which the dependency conditions of § 402 (d) (9) are modeled, see Sen.Rep.No.404 89th Cong. 1st Sess. (1965); 1 U.S.Code Cong. & Ad.News, pp. 2048-49 (1965), is that the legal adoption must be accomplished by "proceedings" recognized by law. In other words, Congress was concerned with something more than a relationship having legal efficacy under state law; it was concerned with the manner in which that...