Estey v. COMMISSIONER, MAINE DEPT. OF HUMAN SERV.

• Decision Date: 17 February 1993
• Docket Number: Civ. No. 92-67-B.
• Citation: 814 F. Supp. 152
• Parties: Debra J. ESTEY, et. al., Plaintiffs, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, Defendant, and Edward Madigan, in his official capacity as Secretary, U.S. Department of Agriculture, Defendant-Intervenor.
• Court: U.S. District Court — District of Maine

814 F. Supp. 152

Debra J. ESTEY, et. al., Plaintiffs, v. COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES, Defendant and Edward Madigan, in his official capacity as Secretary, U.S. Department of Agriculture, Defendant-Intervenor.

Civ. No. 92-67-B.

United States District Court, D. Maine.

February 17, 1993.

Nancy Torresen, Asst. U.S. Atty., Bangor, ME, Peter D. Coffman, Dept. of Justice, Federal Programs Branch, Washington, DC, for defendant-intervenor Madigan.

Marina E. Thibeau, Asst. Atty. Gen., Augusta, ME, for defendant Com'r, Maine Dept. of Human Services.

Frank D'Alessandro, Pine Tree Legal Assistance, Presque Isle, ME, for plaintiffs.

ORDER AND MEMORANDUM OF OPINION

BRODY, District Judge.

This matter is before the Court on Cross-Motions for Judgment on a Stipulated Record. At issue is whether Defendants violated the Food Stamp Act of 1977, as amended, 7 U.S.C. § 2011 et seq., by including Housing and Urban Development ("HUD") and Farmers Home Administration ("FmHA") utility reimbursements received by Plaintiffs as income when calculating Plaintiffs' food stamp benefits. Specifically, Plaintiffs allege that the reimbursements they receive qualify as "energy assistance" and should therefore be excluded from the food stamp income calculation pursuant to 7 U.S.C. § 2014(d)(11). Because the Court finds that HUD and FmHA utility reimbursements do not qualify as "energy assistance," Defendants' policy of crediting such payments toward income in food stamp determinations does not violate the Food Stamp Act. Therefore, judgment on the stipulated record is GRANTED for Defendants.

I. BACKGROUND

A. Procedural and Factual History

The named plaintiffs in this class action suit are Debra Estey and Felix St. Peter. Plaintiff Estey lives in housing owned by a private individual and funded in part by loans from the FmHA, a component agency of the Department of Agriculture. Plaintiff St. Peter lives in a privately owned housing unit participating in the HUD Section 8 Housing Assistance Program. 42 U.S.C. § 1437f.

Plaintiff Estey filed an Amended Class Action Complaint against the Commissioner of the Maine Department of Human Services in Maine Superior Court on or about October 9, 1991. Defendant Commissioner of the Maine Department of Human Services is responsible for administering the food stamp program in compliance with federal laws and regulations. Edward Madigan, then Secretary of the United States Department of Agriculture, filed a Motion to Intervene which was granted on March 11, 1992. As Secretary, Defendant-Intervenor Madigan was responsible for establishing guidelines for the administration of the food stamp program and developed the policy now under review. Madigan removed the case to this Court on April 16, 1992.

As presently constituted, Plaintiffs' Complaint asserts claims for relief under 42 U.S.C. § 1983, 5 M.R.S.A. §§ 11001-11007, and 5 U.S.C. § 706.

On July 1, 1992, the Court granted Plaintiffs' Motion for Class Certification. The certified class consists of the following:

All the persons in the State of Maine who will receive or who have received FmHA and/or HUD utility allowance payments anytime since March 1, 1990 and whose food stamp benefits were or will be wrongfully terminated, reduced, or denied because of the defendant's policy of refusing to exclude FmHA and/or HUD utility allowance payments from "income" when determining food stamp eligibility and benefits.

See Pls.Mot.Class Certification, May 22, 1992.

Both Plaintiff and Defendant-Intervenor Madigan filed Motions for Summary Judgment on November 13, 1992. Defendant Commissioner of the Maine Department of Human Services joined in Madigan's Motion. On December 28, 1992, the parties agreed to convert their Cross-Motions for Summary Judgment to Cross-Motions for Judgment on a Stipulated Record.

B. The Food Stamp Act

The food stamp program was developed by Congress in 1964. Its mission is "to promote the general welfare, to safeguard the health and well-being of the Nation's population by raising levels of nutrition among low-income households." 7 U.S.C. § 2011 (1988). The Act establishes a federally-funded, state-administered program to supplement the purchasing power of low-income households. Susan v. Scales, Civ. No. S91-65M, slip op. at 2 (N.D.Ind. May 18, 1992). The food stamp program is a "needs based" program. Eligible households receive an allotment of coupons that may be used exclusively to purchase food from retail stores. 7 U.S.C. § 2013. Eligibility and benefits are determined by calculating the income resources available to a household and comparing those resources to a national standard developed for the program by the Department of Agriculture. 7 U.S.C. § 2014. The lower the income, the greater the benefits awarded under the program.

The Food Stamp Act presently defines household income to include "all income from whatever source." 7 U.S.C. § 2014(d). Sixteen specific exclusions and several deductions, however, are set forth in the Act. 7 U.S.C. § 2014(d) and (e). The exception at issue here excludes from the income calculation "any payments or allowances made for the purpose of providing energy assistance (A) under any Federal law, or (B) under any State or local laws designated by the State or local body authorizing such payments or allowances as energy assistance...." 7 U.S.C. § 2014(d)(11).

Participating states administer the food stamp program pursuant to federal guidelines set forth in 7 U.S.C. § 2020. Under the program, final determinations on eligibility and the amount of food stamps issued are made by the states pursuant to regulations set forth by the Secretary of Agriculture. The federal government pays up to 50% of the states' administrative costs. 7 U.S.C. § 2025(a). The State of Maine has elected to participate in the program under 22 M.R.S.A. § 3104.

C. HUD and FmHA Public Housing Assistance

Plaintiffs are the recipients of HUD and/or FmHA housing assistance. Because the relevant features of the two housing assistance programs are similar, they are addressed in tandem.

Publicly assisted housing under HUD and FmHA can be either privately or publicly owned. Each individual unit is assigned an "approved shelter cost." The approved shelter cost represents the basic rent for the unit plus a "utility allowance" to help defray utility costs. 24 C.F.R. §§ 813.107, 813.102, 965.470; 7 C.F.R. Pt. 1930, Subpt. C, Exh. E-II. The utility allowance is based on a community-wide standard, not on actual individual consumption.

As recipients of HUD or FmHA housing subsidies, Plaintiffs pay rent totaling thirty percent of their adjusted household income. This rental payment is called the "monthly tenant contribution" or "total tenant payment." While the tenant contribution is payable toward the approved shelter cost, it may be offset by the utility allowance.

The FmHA utility allowance considers expenses such as heating, air conditioning, cooking, electrical lighting, refrigeration, water heating, water and sewer services, and trash collection. 7 C.F.R. Pt. 1944, Subpt. E, Exh. A-5. The HUD utility allowance covers electricity, gas, heating fuel, water and sewer services, and trash and garbage collection. 24 C.F.R. § 965.472. Because the utility allowance is based on an approximation of a tenant's utility expenses, the tenant's actual utility costs may be less than or exceed the utility allowance.

The owner of the housing unit may meter the units as a whole and pay the utilities, or meter the units individually and have the tenants pay the utility companies directly. In both instances, the utility allowance is payable to the owner.

When utilities are individually metered and paid for by the tenant, the owner credits the utility allowance against the tenant's monthly contribution. Usually, the tenant contribution exceeds the utility allowance. When this happens, the owner credits the utility allowance against the tenant contribution and the tenant pays only the difference. 7 C.F.R. Part 1930, Subpart C, Exhibit E-II.E. When the tenant's adjusted household income is very low, the tenant contribution (thirty percent of the adjusted income) is very small. In this event, the utility allowance may exceed the tenant contribution. When the utility allowance exceeds the tenant contribution, the owner must remit to the tenant the amount by which the utility allowance exceeds the tenant contribution. This is called a "utility reimbursement" and it may be used in whatever way the tenant deems appropriate. There is no requirement that it be spent for utilities. Mitchell v. Block, Civ. No. 82-3297-3, slip op. at 6-7 (D.S.C. June 22, 1982).

The Secretary of Agriculture generally excludes utility allowances from household income when making food stamp eligibility or benefit determinations. Utility allowances are excluded from income when utility expenses are initially paid by the owner. They are also excluded when utilities are paid directly by residents whose tenant contributions exceed the utility allowance. The Secretary does not, however, exclude from income utility reimbursements that are paid to individually metered tenants whose utility allowance exceeds their tenant contribution. The Secretary's inclusion of utility reimbursements in food stamp income calculations has lowered Plaintiffs' food stamp benefits.

II. DISCUSSION

A. The Chevron Test

Plaintiffs assert that utility reimbursements should be excluded from income in calculating food stamp allotments. They argue that utility reimbursements fall within the definition of "energy assistance" and should, therefore, be excluded from income under the Food Stamp Act.

As set forth above, § 2014(d) of the Food Stamp Act states that "household income for purposes of the food stamp program shall include all income from whatever source." A number of specific exceptions are included. Section 2014(d)(11) excludes, in relevant part, "any payments or allowances made...