Hendrick v. N.H. Dep't of Health & Human Servs.

• Citation: 145 A.3d 1055,169 N.H. 252
• Decision Date: 02 August 2016
• Docket Number: No. 2015-0442,2015-0442
• Parties: Carrie HENDRICK & a. v. NEW HAMPSHIRE DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Court: Supreme Court of New Hampshire

169 N.H. 252
145 A.3d 1055

Carrie HENDRICK & a.
v.
NEW HAMPSHIRE DEPARTMENT OF HEALTH AND HUMAN SERVICES

No. 2015-0442

Supreme Court of New Hampshire.

Argued: January 13, 2016
Opinion Issued: August 2, 2016

145 A.3d 1057

New Hampshire Legal Assistance, of Concord and Portsmouth (Ruth D. Heintz and Kay E. Drought on the brief, and Ms. Heintz orally), for the plaintiffs.

Joseph A. Foster, attorney general (MaryBeth L. Misluk, attorney, and Lynmarie Cusack, assistant attorney general, on the brief, and Ms. Misluk orally), for the defendant.

United States Department of Justice, of Washington, D.C. (Jeffrey E. Sandberg, attorney, on the brief), and United States Attorney's Office, of Concord (T. David Plourde, chief, civil division, on the brief), as amicus curiae.

Disability Rights Center—NH, of Concord (C. Adrienne Mallinson on the brief), for the Disability Rights Center—NH, the New Hampshire Association of Special Education Administrators, and the National Disability Rights Network, as amici curiae.

DALIANIS, C.J.

169 N.H. 254

The plaintiffs, Carrie Hendrick and Jamie Birmingham, appeal an order of the Superior Court (Smukler, J.) granting summary judgment to the defendant, the New Hampshire Department of Health and Human Services (DHHS). We reverse and remand.

145 A.3d 1058

I. Legal Framework

The issue before us is the constitutionality of New Hampshire Administrative Rules, He-W 654.04(c). The rule requires DHHS to include a child's federal Supplemental Security Income (SSI) in the calculation of a family's eligibility for benefits under the federal Temporary Assistance for Needy Families program (TANF), as administered by the State's Financial Assistance to Needy Families program (FANF). We hold that the rule violates the Supremacy Clause of the United States Constitution. See U.S. CONST. art. VI, cl. 2. For context, we provide a brief overview of the applicable federal and state statutes and regulations.

A. Federal Law

1. SSI

The SSI program, codified as Title XVI of the Social Security Act, is a needs-based federal assistance program that sets a "guaranteed minimum

169 N.H. 255

income level" for individuals "who have attained age 65" or who "are blind or disabled." Sullivan v. Zebley, 493 U.S. 521, 524, 110 S.Ct. 885, 107 L.Ed.2d 967 (1990) (quotations omitted); see 42 U.S.C. § 1381 (2012). SSI payments are funded by the federal government and administered by the Social Security Administration (SSA). See 42 U.S.C. § 1383 (2012 & Supp. II 2014).

For a child to be eligible for SSI payments, the child must be blind or disabled and have limited income and resources. See 42 U.S.C. § 1382(a)(1) (2012). A child is "disabled" if he or she has a "physical or mental impairment" that results in "marked and severe functional limitations," and which can be expected either to result in death or to last continuously for at least one year. 42 U.S.C. § 1382c(a)(3)(C)(i) (2012). The requirement that the child have limited income and resources is met when the child has less than a certain amount in assets, 20 C.F.R. § 416.1205(a), (c) (2015), and "countable income" below the federal financial benefit rate, 20 C.F.R. §§ 416.1110 - 416.1182 (2015).

For SSI beneficiaries who are unable to manage their own payments "due to a mental or physical condition or due to their youth," the beneficiary's payments are directed to a third-party "representative payee." 20 C.F.R. § 416.601(b) (2015) ; see 42 U.S.C. § 1383(a)(2)(A)(ii)(I) (2012). The statute directs the representative payee to use SSI funds "for the use and benefit" of the child. 42 U.S.C. § 1383(a)(2)(A)(ii)(I). A representative payee who "converts such payment, or any part thereof, to a use other than for the use and benefit of" the child commits "misuse of benefits." 42 U.S.C. § 1383(a)(2)(A)(iv) (2012). A representative payee who commits "misuse of benefits" is subject to a range of civil and criminal penalties. See, e.g., 42 U.S.C. § 1383a(a)(4) (2012) (fine and/or imprisonment of up to 5 years); id. § 1383(a)(2)(H)(i) (2012) (restitution); id. § 1383a(b) (2012) (same).

The statute authorizes the SSA to implement regulations in administering the SSI program, 42 U.S.C. § 405(a) (2012), including prescribing "the meaning of the term ‘use and benefit’ for purposes" of preventing misuse of benefits, id. § 1383(a)(2)(A)(iv) (2012). The SSA has promulgated "[d]etailed regulations govern[ing] a representative payee's use of [SSI] benefits." Washington State Dept. of Social and Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 376, 123 S.Ct. 1017, 154 L.Ed.2d 972 (2003). A representative payee who receives SSI funds on behalf of a disabled child must "[u]se the benefits received on [the child's] behalf only for [the child's] use and benefit in a manner and for the purposes [the representative payee] determines ... to be in

145 A.3d 1059

[the child's] best interests." 20 C.F.R. § 416.635(a) (2015). SSI funds that "are used for the [child's] current maintenance" are considered to "have been used for the use and benefit of the [child]." 20 C.F.R. § 416.640(a) (2015). "Current maintenance includes costs incurred in obtaining

169 N.H. 256

food, shelter, clothing, medical care and personal comfort items." Id. In addition, the representative payee must "[e]nsure that [the child is] receiving treatment to the extent considered medically necessary and available for the condition that was the basis for providing benefits if [the child is] under age 18." 20 C.F.R. § 416.635(g) (2015) (citation omitted). Any funds not spent on the child's current maintenance must be "conserved or invested on behalf of the [child]." 20 C.F.R. § 416.645(a) (2015). Representative payees are required to submit an annual accounting to the SSA informing the agency how much of the SSI benefit was spent on the beneficiary's care and support, and how much was saved. 20 C.F.R. § 416.665 (2015).

2. TANF

The TANF program, codified as Title IV-A of the Social Security Act, provides federal block-grant funding to states to create public assistance programs that offer, among other things, cash assistance to needy families with children. 42 U.S.C. §§ 601 - 629m (2012 & Supp. II 2014). Congress enacted TANF in 1996 to replace the Aid to Families with Dependent Children program (AFDC). See Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, 110 Stat. 2105 (1996). "Unlike AFDC, TANF is not an open-ended entitlement program." Arizona v. Shalala, 121 F.Supp.2d 40, 45 (D.D.C. 2000).

Under TANF, each participating state designs its own public assistance program. See 42 U.S.C. § 602 (2012). A state TANF program should advance four goals: (1) providing assistance to needy families "so that children may be cared for in their own homes"; (2) ending the dependence of needy parents on government benefits "by promoting job preparation, work, and marriage"; (3) preventing and reducing the number of out-of-wedlock pregnancies; and (4) encouraging "the formation and maintenance of two-parent families." Id. § 601(a)(1)-(4) (2012). A state may use its federal block-grant funds "in any manner that is reasonably calculated to accomplish" those purposes. Id. § 604(a)(1) (2012). States are directed to "set forth objective criteria for the delivery of benefits and the determination of eligibility and for fair and equitable treatment." Id. § 602(a)(1)(B)(iii) (2012).

B. New Hampshire Law—FANF

New Hampshire uses its federal TANF block grant to operate several public assistance programs, including a program to provide cash assistance to families with dependent children, through the State's FANF program. See RSA 167:77 - :93 (2014 & Supp. 2015) ; N.H. Admin. Rules, He-W 601.04(g).

169 N.H. 257

To determine eligibility for FANF assistance, DHHS first determines the "assistance group," which is the group of individuals who live together and who are considered as a unit in making FANF eligibility determinations. See RSA 167:79, II (2014). The statute provides, in pertinent part:

The following persons shall be included in the assistance group, unless such person receives foster care or adoption assistance, if living in the same household or temporarily absent from the household: any dependent child and all minor blood-related, step, or adoptive brothers and sisters, and all natural, step, or adoptive parents of such children,

145 A.3d 1060

including cohabitating adults who share a minor child. In the case of a minor parent, the assistance unit may also include all natural, step, or adoptive parents of the minor parent and all minor blood-related, step or adoptive brothers and sisters.

Id. DHHS has issued rules that further define the "[a]ssistance group" as "the individuals living together ... whose needs, income and/or resources are considered and combined together when determining eligibility or the amount of...