Finch v. Weinberger, Civ. A. No. 75-592.

• Decision Date: 22 September 1975
• Docket Number: Civ. A. No. 75-592.
• Citation: 407 F. Supp. 34
• Parties: Glenda FINCH et al., Plaintiffs-Intervenors, v. Caspar W. WEINBERGER, in his official capacity as Secretary of the United States Department of Health, Education and Welfare, and T. M. Parham, in his official capacity as acting Commissioner of the Georgia Department of Human Resources.
• Court: U.S. District Court — Northern District of Georgia

407 F. Supp. 34

Glenda FINCH et al., Plaintiffs-Intervenors, v. Caspar W. WEINBERGER, in his official capacity as Secretary of the United States Department of Health, Education and Welfare, and T. M. Parham, in his official capacity as acting Commissioner of the Georgia Department of Human Resources.

Civ. A. No. 75-592.

United States District Court, N. D. Georgia, Atlanta Division.

September 22, 1975.

COPYRIGHT MATERIAL OMITTED

David A. Webster, Myron N. Kramer, Hugh F. O'Donnell, Atlanta Legal Aid Society Inc., Atlanta, Ga., for plaintiffs.

Arthur K. Bolton, Atty. Gen., Stephen L. Cotter, Deputy Asst. Atty. Gen., for T. M. Parham.

John W. Stokes, U. S. Atty., Julian M. Longley, Jr., Asst. U. S. Atty., Carl H. Harper, Reg. Atty., Alvin Jaffe, Asst. Reg. Atty., Dept. of HEW, Atlanta, Ga., for Caspar W. Weinberger.

Before BELL, Circuit Judge, and O'KELLEY and FREEMAN, District Judges.

ORDER

RICHARD C. FREEMAN, District Judge.

This is an action brought by former recipients of benefits under the Georgia Aid to Families with Dependent Children (AFDC) Program, for declaratory and injunctive relief regarding termination of those benefits. Jurisdiction is alleged under 5 U.S.C. §§ 701-06; 28 U.S.C. §§ 1331, 1361; and 42 U.S.C. § 1983. Defendants are state and federal officials responsible for general supervision and implementation of the federal and state regulatory and statutory scheme in issue. Petitions for intervention have been filed by three additional plaintiffs, and the original named plaintiffs have also filed a motion for certification of this action as a class action.

The gravamen of the instant action concerns the provisions of the Georgia AFDC program which, when applied to persons in plaintiff's putative class, compel termination of AFDC payments on receipt of unemployment benefits. The named plaintiffs were formerly employed in the private sector of the economy; however they are no longer so employed. Both of the named plaintiffs earned in excess of $300.00 per month salary, and, while employed, received AFDC benefits of $73.00 per month in the case of plaintiff Finch, and $85.00 per month in the case of plaintiff Cash. Although the parties have not introduced appropriate evidence on this matter, plaintiffs were apparently deemed entitled to AFDC benefits because of application of certain deductions and credits provided by the Social Security Act. It appears that absent these deductions, plaintiffs' incomes would have exceeded the minimum standard of need set as a threshold for entitlement to AFDC benefits. The parties have stipulated that this threshold is $192.59 for plaintiff Finch and $160.92 for plaintiff Cash.

Since the amount of unemployment compensation received by plaintiffs also exceeds the relevant threshold amounts, their AFDC benefits have been terminated, because as interpreted and applied by defendants, the regulatory scheme does not authorize deductions for expenses incurred in seeking employment, see 42 U.S.C. § 602(a)(7),¹ and because unemployment compensation is not subject to an "income disregard" provision otherwise applicable as a credit against "earned income" in determining AFDC eligibility. See 42 U.S.C. § 602(a)(8).² If plaintiffs were allowed to deduct the expenses of seeking employment from the amount of unemployment compensation received, and if the income disregard provision were deemed applicable to receipt of unemployment compensation, plaintiffs would apparently qualify for receipt of AFDC benefits. Conversely, allowance of the work seeking expense deduction, in and of itself, would not render the named plaintiffs eligible for AFDC; however, one of the intervenors would apparently qualify for AFDC on the basis of allowing work-seeking expenses alone.

Plaintiffs' legal contentions are cogently summarized by defendant Parham as follows:

Plaintiffs allege that 42 U.S.C. § 602(a)(7) requires the State to deduct expenses allegedly incurred in seeking employment from income derived from unemployment compensation. Alternatively, if the Court does not find statutory authority for such deductions, Plaintiffs assert that denial of such work-seeking expenses is in violation of the Equal Protection Clauses of the Constitution of the United States. (Presumably Plaintiffs are referring to the Equal Protection Clause of the Fourteenth Amendment and the Due Process Clause of the Fifth Amendment.) Also, Plaintiffs claim the earned income disregard established by 42 U.S.C. § 602(a)(8) should be applied to income derived from unemployment compensation benefits paid for the lack of employment. Alternatively, if the Court finds no statutory authority for application of the earned income disregard to money derived from unemployment compensation, the Plaintiffs assert that disallowance of this work incentive bonus also violates the Equal Protection Clauses of the Constitution of the United States. (emphasis in original).

Plaintiffs seek a declaratory judgment regarding the above alleged violations, together with permanent injunctive relief "enjoining the Defendants from terminating AFDC benefits to Plaintiffs or any member of Plaintiffs' class without first applying the . . . income disregard and work-expense deduction allowances to income derived from unemployment compensation . . ."³

In addition to the aforementioned motions for intervention and for certification of the action as a class action, defendant Weinberger has filed a motion to dismiss for lack of subject matter jurisdiction. Although normal procedure might require a ruling on the preliminary procedural motions before reaching the merits of the jurisdictional arguments, in light of the present posture of this case, some discussion of defendant Weinberger's motion is warranted. Moreover, although the parties have not argued that this action is not properly before a three-judge court, some attention should be devoted to this rather unsettled matter.

SUBJECT MATTER JURISDICTION

The question of subject matter jurisdiction is intertwined with the question of the propriety of convening a three-judge court to consider this matter. This court clearly has jurisdiction over the state defendant under 28 U.S.C. § 1343 and 42 U.S.C. § 1983, and defendant Parham does not contend otherwise. Jurisdiction over defendant Weinberger has been extensively briefed by the parties, pursuant to the directions of the court at the hearing of this matter conducted on May 27, 1975. Defendant Weinberger contends that this court is without jurisdiction under 28 U.S.C. § 1343(3) and 42 U.S.C. § 1983 because he was not acting under color of state law. Similarly, he contends that jurisdiction may not be predicated on 28 U.S.C. § 1343(4) because the Social Security Act is not an act of Congress providing for protection of civil rights. He further contends that there is no jurisdiction under 28 U.S.C. § 1331 because the Fifth Amendment does not contain an equal protection clause, because the federal claim is insubstantial, and because plaintiffs may not satisfy the $10,000.00 jurisdictional amount.⁴ Finally defendant contends that jurisdiction may not be asserted under the Administrative Procedure Act, 5 U.S.C. § 701 et seq., since that act is not a grant of federal jurisdiction, and that jurisdiction under 28 U.S.C. § 1361 is also improper, since "challenges to H.E. W.'s interpretation of the Social Security Act have not been found to be actions in the nature of mandamus . . .."

Of course, 28 U.S.C. § 1331 provides a recognized source for federal jurisdiction in Social Security Act cases, but federal question cases require a $10,000.00 jurisdictional amount. See Weinberger v. Wiesenfeld, supra at 641, 95 S.Ct. at 1230. See also Winningham v. United States Department of Housing and Urban Development, 512 F.2d 617, 620 n. 6 (5th Cir. 1975). Plaintiffs have introduced no evidence whatsoever regarding this matter, and otherwise appear to have abandoned § 1331 as a viable jurisdictional basis for suit. In fact, plaintiffs do not seek recovery of retroactive AFDC benefits, probably in recognition that recovery of such benefits would be barred by sovereign immunity concepts. Adams v. Harden, 493 F.2d 21 (5th Cir. 1974). On the other hand, plaintiffs strenuously argue that jurisdiction is proper in this case under concepts of pendent jurisdiction, under 28 U.S.C. § 1361, under 28 U.S.C. § 1337 and under 5 U.S.C. § 701 et seq. With respect to § 1361 jurisdiction and § 1337 jurisdiction, both parties have briefed and reached varying conclusions regarding the effect of the ruling in the Winningham case on this matter. Although plaintiffs' arguments are thorough and well-reasoned, this court has concluded that the Winningham ruling does not constitute a "narrow exception" to the applicability of mandamus type relief in actions involving constitutional claims. On the contrary, the Winningham ruling indicates that the federal courts in this jurisdiction should be reluctant to utilize § 1361 as a viable jurisdictional basis for compelling agency officials to recognize a "clear duty" to conclude that the federal statutes under which they are operating are unconstitutional. Id. at 620-21. Conversely, Winningham does tend to support plaintiffs' assertion that jurisdiction in this action may be predicated on § 1337; however, it is evident that the determination of whether a particular federal scheme should be classified as an act regulating commerce must be determined on a case by case basis. Id. at 622. This question presents an interesting academic argument; however, like plaintiffs' arguments founded on jurisdiction under the Administrative Procedure Act, 5 U.S.C. § 701 et seq., this is a question which, in the circumstances of this case, may be more properly left to academicians.⁵

A few years ago, one court, in considering jurisdictional problems in an AFDC case stated the following: "It is the understatement of the new year 1972 to say that the matter is...