Glasgold v. Secretary of Health and Human Services

• Decision Date: 07 January 1982
• Docket Number: No. 77 C 1363.,77 C 1363.
• Citation: 558 F. Supp. 129
• Parties: Minnie GLASGOLD, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

558 F. Supp. 129

Minnie GLASGOLD, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES et al., Defendants.

No. 77 C 1363.^*

United States District Court, E.D. New York.

January 7, 1982.

COPYRIGHT MATERIAL OMITTED

Nassau County Law Services Committee, Inc., Robert & Schneider, Hempstead, N.Y., for plaintiffs.

Edward R. Korman, U.S. Atty., E.D.N.Y. by Jo Davis, Asst. U.S. Atty., Brooklyn, N.Y., for Federal defendants.

Robert Abrams, Atty. Gen., State of N.Y. by Stephen Jacoby, Asst. Atty. Gen., New York City, for New York State defendants.

Edward G. McCabe, County Atty. of Nassau County, Mineola, N.Y., for County defendants.

GEORGE C. PRATT, District Judge.

I. INTRODUCTION

By commencing a series of individual actions over a period of several years, plaintiffs have launched a wholesale attack on the federal, state and county governments' calculation of benefits under the Supplemental Security Income Program. Plaintiffs advance federal and New York State constitutional and statutory challenges to the program, and further contend that the program is not administered in accordance with the statutory framework.

At the heart of plaintiffs' case is the effect of "in-kind" income on the amount of their benefits. Plaintiffs contend that the concept of "in-kind" income has no place in the calculation of Supplemental Security Income Program benefits; defendants respond that the controlling statutes warrant, and in fact compel, a reduction in benefits to take into account "in-kind" income. Each side contends that the controlling statutory criteria and the legislative history support its interpretation of the same subject matter.

In addition to their substantive contentions, plaintiffs move for varied procedural relief, with a resulting interaction among procedural and substantive issues. The federal, state and county defendants and proposed defendants oppose plaintiffs' motions and cross-move to dismiss or for summary judgment.

After a preliminary discussion of the statutory framework attacked by plaintiffs, the court will address the particular motions now pending.

II. SSI PROGRAM

A. Federal Program

Plaintiffs are recipients under the Supplemental Security Income (SSI) program, a federal program designed to provide financial assistance to the aged, blind and disabled whose income and resources are below the statutory minimums. 42 U.S.C. § 1381 et seq. SSI went into effect on January 1, 1974 and replaced a myriad of partially funded federal programs previously administered by the participating states. See, e.g., former Title 6 of New York State Social Services Law, amended by 1974 N.Y. Laws ch. 1080 § 28 (amended effective January 1, 1974 to coincide with new federal program.)

Pursuant to Congress' objective of standardizing treatment of SSI recipients nationwide, H.R.Rep. No. 92-231, 92d Cong., 2d Sess. (1972), reprinted in 1972 U.S.Code Cong. & Ad.News 4989, federal criteria govern eligibility for the program. 42 U.S.C. § 1382-1382f. The SSI program does not consider individual circumstances or needs; rather, SSI is a "flat grant" program designed to provide for all eligible recipients a national level of minimum income.

Different categories for eligibility and grant level are established depending upon whether a recipient lives alone, lives with an eligible spouse, 42 U.S.C. § 1382, or lives in the household of another, § 1382a(a)(2).¹ Once an individual is found to be eligible for SSI, his or her flat grant maximum amount is subject to a reduction, in the amount of any available income not otherwise excludable under the SSI rules, § 1382(b). "Income" for SSI purposes (hereinafter, countable income) is defined expansively, as including both earned income, § 1382a(a)(1), and unearned income, § 1382a(a)(2). Unearned income is defined as including "support and maintenance furnished in cash or kind". § 1382a(a)(2)(A).

If a recipient is "living in another person's household and receiving support and maintenance in kind from such person", his or her grant is automatically reduced by one-third "in lieu of including such support and maintenance in the unearned income of such individual". § 1382a(a)(2)(A). This so-called automatic one-third reduction rule applies only if several factors are present;² otherwise a "presumed value" rule applies. After the countable income is calculated, either actually or by the one-third reduction rule, the recipient's grant is reduced accordingly.

B. State Programs

In addition to the federal portion of the SSI payment, the statute allows the states to supplement the federal grant. In fact, the federal statute encourages state supplementation by providing that the Secretary of Health & Human Services will administer the state supplement in conjunction with the federal grant. § 1382e(b). The New York State legislature has authorized the state department of social services to contract with the federal secretary for administration of the New York supplementation programs. New York Social Services Law § 211 (McKinney Cum.Supp.1980-1981), and the federal and state authorities have entered into such an agreement. See agreement between secretary and state annexed to Bushart aff.

The federal statutory scheme contemplates two distinct state supplementation programs, optional and mandatory. The optional state supplementation (OSS), provided for in 42 U.S.C. § 1382e and enacted by New York in § 209 of the Social Services Law, increases a recipient's income level to the New York State minimum level, which is higher than the federal level. The federal and state defendants interpret the governing statutes to mean that the same eligibility and grant level criteria are used for OSS as apply to the federal SSI payment.³ A recipient's federal countable income (FCI), including unearned in-kind income, is considered to be income available to the OSS recipient. New York Social Services Law § 208(6), (8); § 209(1)(a), (b). The result is a reduction in a New York recipient's total federal SSI/OSS grant in an amount equal to the FCI.

In addition to OSS, any "grandfathered" SSI recipient, i.e. one who formerly was a recipient under a pre-SSI state-run program, is entitled to a mandatory state supplement (MSS) so that the total grant a "grandfathered" recipient receives is at least equal to the amount to which the recipient would have been entitled under the state programs in effect prior to the effective date of SSI, January 1, 1974. Renegotiation Amendments of 1973, Pub.L. No. 93-66, § 212(a)(3)(A), 87 Stat. 152 (1973). Thus, a "grandfathered" recipient is entitled to the greater of MSS or OSS.

A significant difference between SSI and the former New York State public assistance programs is in their handling of the concept of countable income, which, as discussed above, reduces the SSI grant by the amount of any earned or unearned income. In-kind income, including food or shelter, that a recipient receives from non-SSI sources must be included in FCI, even though such income was not included as countable income under the rules governing the former state programs (state countable income, or SCI). Because New York's 1973 public assistance grants were not lowered to take into account in-kind income, New York must pay a "grandfathered" SSI recipient the amount attributable to any in-kind income that results in a lesser grant than the recipient received in 1973. New York's MSS provision so provides, § 210, as does the secretary's implementing regulation, 20 CFR § 416.2050 (1981).

In summary, the SSI program as it operates in New York provides for three types of grants:

1. The federal SSI payment, calculated by deducting a recipient's FCI (including federal in-kind income rules) from the federal minimum income level;

2. OSS, calculated by deducting a recipient's federal minimum income level from his or her New York State's minimum income level; and

3. MSS, applicable only to grandfathered SSI recipients, and calculated as the difference between a recipient's federal SSI payment (using FCI standards) and the amount to which the individual would have been entitled under the state program as of December, 1973 (using SCI standards).

III. CONTENTIONS OF THE PARTIES

Plaintiffs attack numerous features of the SSI program. They contend that the federal statute is unconstitutional, either as written or as applied; that the regulations do not accurately implement the statute and thus produce unintended and unconstitutional results; that New York State's optional supplementation program violates the federal and state constitutions as written or as applied; and that plaintiffs' rights to privacy are violated by certain policies instituted by defendants in policing the SSI program.

Plaintiffs, in effect, ask the court to review the entire structure of the SSI program, at least as administered in New York, and to either invalidate or reinterpret numerous key components of the federal and state statutes and regulations.

Plaintiffs' advance substantive arguments in support of the procedural relief they are seeking. They move to consolidate all of the pending cases; to serve and file an amended consolidated complaint; to add additional federal, state, and county defendants; to allow additional individuals to intervene as party plaintiffs; and to certify a class composed of all aged, blind and disabled persons who have resided in New York at any time after January 1, 1974. The procedural relief is sought by plaintiffs to enable them to advance their common arguments in one lawsuit, thereby conserving the court's and the parties' resources and, in general, furthering policies of judicial economy.

The individual suits themselves present procedural problems, in that some plaintiffs have not exhausted their administrative remedies. Defendants have moved to remand some of the individual suits because of admitted errors in the calculations of benefits and to remand others based on the lack of exhaustion. Plaintiffs...