Green v. Obledo
| Decision Date | 18 December 1979 |
| Citation | 99 Cal.App.3d 928,160 Cal.Rptr. 791 |
| Parties | Elizabeth GREEN et al., Plaintiffs, Respondents and Cross-Appellants, v. Mario OBLEDO, Secretary of the Health and Welfare Agency et al., Defendants, Appellants and Cross-Respondents. Civ. 17652. |
| Court | California Court of Appeals Court of Appeals |
Evelle J. Younger and George Deukmejian, Attys. Gen., John J. Klee, Jr., Asst. Atty. Gen., and Thomas E. Warriner, Floyd D. Shimomura and Richard M. Skinner, Deputy Attys. Gen., for defendants, appellants and cross-respondents.
Andrea J. Saltzman, Thomas W. Pulliam, Jr., Mary K. Gillespie, San Francisco Neighborhood Legal Assistance Foundation, Contra
Costa Legal Services Foundation, David J. Rapport, California Indian Legal Services, San Francisco, for plaintiffs, respondents and cross-appellants.
Mario Obledo, Secretary of the California Health and Welfare Agency, and Marion J. Woods, Director of the State Department of Benefit Payments (hereafter Department), appeal from a judgment granting a peremptory writ of mandate to petitioners, Elizabeth Green and Neva Fingers (hereafter plaintiffs); the judgment essentially invalidates a welfare departmental regulation (EAS 44-113.241(d)), which establishes certain eligibility and assistance standards, and certifies the action as a class action for all present and future recipients whose grants in aid are affected by the regulation. The plaintiffs have cross-appealed.
The essential facts are undisputed. Plaintiffs Green and Fingers are each recipients in the California Aid to Families with Dependent Children program (AFDC). California participates in the Aid to Families with Department Children program (AFDC) which is partially funded by the federal government. (42 U.S.C. § 602 et seq.; Welf. & Inst.Code, § 11200 et seq.) The relationship between the federal government and the states in programs established under the Social Security Act requires that participating states conform to federal regulations as a condition of continued receipt of federal funds. (King v. Smith (1968) 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118.) In determining eligibility for the amount of an AFDC grant, federal law requires the state to ". . . take into consideration any . . . income and resources of any child or relative claiming aid . . . or of any other individual (living in the same home as such child and relative) whose needs the State determines should be considered in determining the need of the child or relative claiming such aid, . . ." (42 U.S.C. § 602(a)(7).) There are other exemptions and deductions from income which are allowed in certain cases but which are not applicable in the factual context here presented. (See 42 U.S.C. § 602(a)(8).) The amount of aid to which a recipient is entitled is computed by subtracting nonexempt income from a schedule of maximum aid payments. (Welf. & Inst.Code, § 11450; Conover v. Hall (1974) 11 Cal.3d 842, 847, 114 Cal.Rptr. 642, 523 P.2d 682.) In determining the amount of a recipient's nonexempt income federal law also requires the state to consider ". . . any expenses reasonably attributable to the earning of any such income." (42 U.S.C. § 602(a)(7).)
Prior to institution of this proceeding and as an outgrowth of the 1971 Welfare Reform Act, the Department of Benefit Payments enacted Eligibility and Assistance Standards Regulation 44-113.23. 1 It provided certain work-expense deductions to be used in determining an applicant's eligibility for AFDC grants. Those work-related expenses are (1) tax withholding, social security, compulsory retirement, unemployment and disability insurance contributions (EAS 44-113.231(a)), (2) child care expenses (44-113.231(b)), (3) cost of food, clothing, and incidentals required by the employment (44-113.231(c)), (4) expenses of transportation to and from work not to exceed the amount of public transportation calculated at 12 cents per mile (44-113.231(d)), (5) the cost of transportation to call on customers, calculated at 12 cents a mile (44-113.232(a)), (6) the reasonable and necessary cost of tools, materials, and licenses required for employment (44-113.232(b)), (7) the cost of union dues or employee association dues when required for employment (44-113.232(c)), and (8) the cost of self-employed persons necessary to the production of income (44-113.233).
In this proceeding plaintiffs do not contend the defendants exceeded their authority by adopting the questioned regulation (EAS 44-113.241) as an implementing tool in the AFDC program; they do contend, however, that the regulation, as adopted, conflicts with federal and state statutory regulations which require allowance for work-related expenses, and is therefore void. The trial court refused to consider the challenge to the entire regulation and limited the proceeding to the transportation portion of the regulation (EAS 44-113.241(d)), as each plaintiff has only asserted facts related to transportation costs which allegedly affect her welfare grant. It is not contended that EAS 44-113.241(a), (b), and (c), relating to cost of food, clothing, withholding taxes, and child care expenses were involved or affected the grants of either plaintiff.
The issues framed by the parties, when distilled to their essence, require resolution of the following questions:
(1) Does EAS 44-113.241(d) conflict with federal and state welfare statutes? (2) Did the court err by limiting the scope of its consideration to a challenge of the regulations to transportation expense only? (3) Did the court err by certifying the action as a class action limited to present and future AFDC recipients? In addition, the Department contends the one year statute of limitations embodied in Welfare and Institutions Code section 10951 is a bar to the action and questions the applicability of administrative mandamus (Code Civ.Proc., § 1094.5) as a means of reviewing the action of the Department.
On October 23, 1975, the plaintiffs instituted this challenge to the regulations. Factually, the petition was framed in three causes of action, the first in administrative mandamus. Green alleged that in October 1974, she had been receiving benefits under the AFDC program for herself, Donald Parshall and their child. Pursuant to EAS 44-113.241(d) they were allowed a deduction of $10.08 for transportation costs to and from work (84 miles at 12 cents per mile). Green also sought to deduct a $105 transmission repair bill incurred during that month; the Department refused to allow that deduction.
In a second cause of action, Green and Fingers sought to establish a class action in ordinary mandate (Code Civ.Proc., § 1085) for themselves and all persons similarly situated as AFDC recipients affected by the regulations. The third cause of action, also a class action, was essentially identical to the second except that it also sought declaratory relief.
Fingers alleged that she drove 306 miles to and from work in July of 1975 and was allowed a deduction of $36.96 from her earned income as a work-related transportation expense. She also alleged that in August she drove 112 miles and was allowed a deduction of $13.44 for work-related transportation. Her additional claim of monthly automobile expense ($71.25 car payment, $25 insurance payment, and $2 registration and license fees) was denied.
At a "fair hearing" (Welf. & Inst.Code, § 10950 et seq.) the denial of Green's claim for the transmission repair deduction was upheld.
On October 6, 1976, the trial court granted class certification of the second and third causes of action. The court found that the allowance of a per mile deduction actually fixed a maximum limit on the allowable travel expense reasonably attributable to the earning of income, and therefore violated the provisions of 42 U.S.C. section 602(a)(7) and was therefore invalid.
The court also granted plaintiff Green relief in the administrative mandamus proceeding and directed that the fair hearing decision of February 19, 1975, be set aside. On August 23, 1977, the court recertified the class action and limited the class to those recipients receiving present and prospective grants. In its amended judgment the court ruled that by establishing a per mile standard allowance for work-incurred travel expenses (EAS 44-113.241(d)) a maximum limit was effectively imposed in violation of 42 U.S.C. section 602(a) (7). It also determined that the regulation violated Welfare and Institutions Code section 11008 by denying work-related transportation expense deductions permitted by federal law and had been authorized by prior California regulations. The trial court limited its decision to the transportation expense provisions of the regulations only and did not consider or decide the efficacy or applicability of any of the other regulations enacted in connection with the Welfare Reform Act of 1971.
Plaintiffs, by their cross-appeal, contend the limitation of the proceeding to one challenging EAS 44-113.241(d) only (cost of work-related transportation) was error. They assert they are "interested persons" within the language of Government Code section 11440 entitled to challenge the regulation in its entirety. That section provides that an "interested party" may use the declaratory relief procedure of the Code of Civil Procedure to obtain a judicial determination of the validity of a regulation adopted by a state agency; however, an actual controversy over the regulation must be involved. Such controversy may be implied without specific allegation or proof of its existence. However, in such a challenge to a regulation, the plaintiff must be shown to be directly affected or in clear peril of financial or other serious loss. (Sperry & Hutchinson Co. v. Cal. State Bd. of Pharmacy (1966) 241 Cal.App.2d 229, 233, 50 Cal.Rptr. 489; Chas. L. Harney, Inc. v. Contractors' Bd. (1952) 39...
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