Elliott v. Weinberger, 75-C-360.
| Decision Date | 30 March 1977 |
| Docket Number | No. 75-C-360.,75-C-360. |
| Citation | 429 F. Supp. 414 |
| Parties | Rosie ELLIOTT et al., Plaintiffs, v. Caspar W. WEINBERGER, Individually and as Secretary, United States Department of Health, Education and Welfare, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Alexandra L. Waeffler and Steven H. Steinglass, Milwaukee Legal Services, Inc., Milwaukee, Wis., for plaintiffs.
Leah M. Lampone, Asst. U.S. Atty., Milwaukee, Wis., for federal defendants.
Ward L. Johnson, Asst. Atty. Gen., Madison, Wis., Earl G. Buehler, Atty., Div. of Family Services, State of Wis., Madison, Wis., for Wilbur J. Schmidt.
Merwin W. Kaye, Director Food and Nutrition Div., Office of Gen. Counsel, U.S. Dept. of Agriculture, Washington, D.C., for Earl L. Butz.
Robert V. Varnum, Atty., Dept. of HEW, Social Security Div., Washington, D.C., for HEW.
This case presents a question arising under the Food Stamp Act and its relation to the Social Security Act. The complaint requests a review of a decision by the Secretary of Health, Education and Welfare that Wisconsin was eligible to cash out food stamps in January of 1974. Failing to attain satisfaction on that review the plaintiffs request a review of the Secretary's decision to terminate the state's cash out status on a prospective basis only in July of 1975. The plaintiffs contend that the United States is liable to them for either lost Social Security benefits or lost food stamp benefits because of those determinations.
The background for this suit involves a complicated statutory scheme as well as a set of involved facts.
On October 30, 1972, Congress passed P.L. 92-603 which created the Supplemental Security Income (SSI) Program. The new program was to become effective on January 1, 1974 and would replace the old state-federal programs of public assistance — Aid to Blind, Aid to Permanently and Totally Disabled, and Old Age Assistance. The SSI provided a guaranteed basic floor of income and in addition provided that the states could supplement the federal payments in any amount they choose. The states could, also, at their option, enter into an agreement with the Secretary of HEW whereby the federal government would administer, at federal expense, the states' supplementation.
There are several provisions in the act which are designed to encourage state supplementation. Section 401, the "hold harmless" provision is one. Under § 401, if the state elects to supplement, the federal government will assume the cost of any supplementation in excess of the state's share of the P.A. expenditures but only up to a certain level. That level is called the Adjusted Payment Level and is defined as the amount a totally indigent P.A. recipient received in January of 1972. APL figures had to be developed for each state.
The initial SSI program envisioned that no recipient of such funds would receive food stamps. Prior to the program becoming effective the provision relating to food stamps was amended twice. The final amendment, P.L. 93-233, § 8 allowed food stamp eligibility for all SSI recipients except those who reside in states where the optional state supplementation was found by the Secretary of HEW to have been specifically raised to include the bonus value of food stamps. The formula by which the Secretary was to make that determination is found in § 8(c).
(c) . . . the level of state supplementary payment under section 1616(a) shall be found by the Secretary to have been specifically increased so as to include the bonus value of food stamps (1) only if, prior to October 1, 1973, the State has entered into an agreement with the Secretary or taken other positive steps which demonstrate its intention to provide supplementary payments under section 1616(a) at a level which is at least equal to the maximum level which can be determined under section 401(b)(1) of the Social Security Amendments of 1972 the APL and which is such that the limitations on state fiscal liability under section 401 hold harmless does result in a reduction in the amount which would otherwise be payable to the Secretary by the State, and (2) only with respect to such months as the State may, at its option, elect.
This amendment passed Congress on December 31, 1973, the day before the program became effective.
This amendment was by its term to be provisional only and last only for the remainder of fiscal year 1974. Subsequently on July 8, 1974 the amendment was extended to cover fiscal year 1975.
The State of Wisconsin began developing figures for its APL as early as December of 1972. An agreement was reached by the State and the Social Security Administration as to the applicable APL's. The figures were based on a statistical sample of the state's caseload and was considered as provisional figures only.
Based on these figures the state entered an agreement which provided for state supplementation up to the provisional APL of $216 for an individual. The federal income floor was $130 and the state supplement was $86. The parties recognized that the APL's would be audited and readjusted if necessary.
Since § 8, providing for food stamp eligibility had been passed on December 31, 1973, the Secretary was required to determine if any of the states were eligible to "cash-out" food stamps. A decision that Wisconsin was eligible was made based on the APL of $216 and the state's express intent to supplement to that level. Wisconsin was offered the option to cash-out food stamps on January 16, 1974. The election to cash-out was made on January 18, 1974 and food stamps were discontinued in the state. The effect of the election was to maintain the APL of $216 rather than to lower it by the bonus value of food stamps since only in cash-out states could the APL figure include the bonus value.
During the spring of 1974, Wisconsin conducted a 100 percent survey of the APL figures. These figures were audited by HEW and were incorporated into the agreement between the state and the SSA for fiscal year 1975. The new APL figures were considerably higher; $272.91 for an individual. These figures remained provisional also, pending final review by the Secretary, and were transmitted to HEW by the state on the same day that Congress extended the cash-out provision to fiscal year 1975.
On September 6, 1974 an exit conference on HEW's audit of Wisconsin's revised APL figures was conducted. The auditing agents confirmed the state's figures. On September 26, 1974 the Secretary of HEW recertified the cash-out status of Wisconsin to the Secretary of the Agriculture.
Questions became apparent as to the controlling APL figures for FY 1975, and the retroactive effect if the Secretary approved the higher APL figures. Wisconsin's cash-out status was also in doubt since it appeared that it was no longer eligible for that status.
The state on November 27, 1974 acted to increase the payment level to an individual to $228. At the same time, a vote was made to end cash out status and to reinstate the Food Stamp Program for SSI recipients. On February 3, 1975 a request was made of HEW to determine the cash out status of Wisconsin. When no decision was made, the State conveyed its desire to elect not to cash out food stamps on April 22, 1975. The election also included a request that the cash out status be terminated as of July 1, 1974.
On July 2, 1975 the Secretary communicated his decision to terminate Wisconsin's cash out status to be effective Sept. 1, 1975. This Court has previously ruled that the termination is to be effective as of July 2, 1975.
The plaintiffs' contentions boil down to this, between the dates January 1, 1974 through July 2, 1975, they were entitled to either food stamps or supplemental SSI payments up to the APL of $272.91, they have received neither. The plaintiffs can only recover if they can show that the Secretary's decisions to grant cash out status initially was improper and can be set aside or his decision not to retroactively terminate that status was improper and can be set aside.
The initial hurdle which the plaintiffs must cross is the objection that the remaining claims in this action are barred by the Eleventh Amendment or the doctrine of sovereign immunity.
The defendants have argued that the Eleventh Amendment is applicable to this case under the following argument.
The SSI Program guarantees through federal payments a basic level of income for all the aged, blind, and disabled in the nation. In addition to this basic level the states may, at their option, supplement the federal payments in any amount they choose.
The payment of state supplementation, even under federal administration, however, is still ultimately a state responsibility. The Secretary of Health, Education and Welfare, in administering the state supplementation, only makes payments to beneficiaries in a state at a level and to those categories specified in the supplementation agreement with the state. A change in the categories or payment levels can only be made pursuant to a modification of the state's agreement with the Secretary. The state, in other words, supplements only if it chooses; and it sets the level at which supplementation will be paid, and it decides what categories will receive supplementation. Finally, the state is fiscally responsible under the law for reimbursing the Secretary for supplementary payments made on its behalf.
The argument then concludes that the relief requested for retroactive payments of state supplementary benefits is a prayer for the retroactive payment of funds that are a state responsibility.
This argument ignores the realities of the situation. If retroactive payments of SSI benefits or retroactive food stamp benefits would be ordered by this Court it is the federal government and not the state that would bear the cost of such relief: the SSI benefits because Wisconsin...
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