Illinois Welfare Rights Org'n v. Trainor

• Decision Date: 29 September 1977
• Docket Number: No. 73 C 2437.,73 C 2437.
• Citation: 438 F. Supp. 269
• Parties: ILLINOIS WELFARE RIGHTS ORGANIZATION, an Ill. unincorporated association, the Chicago Welfare Rights Organization, an Ill. not-for-profit corporation, Rosie Newsome, Effie Black, on behalf of themselves and their minor children, and on behalf of all others similarly situated, Plaintiffs, v. James L. TRAINOR, Director, Illinois Department of Public Aid, and the Illinois Department of Public Aid, a governmental agency, Defendants.
• Court: U.S. District Court — Northern District of Illinois

438 F. Supp. 269

ILLINOIS WELFARE RIGHTS ORGANIZATION, an Ill. unincorporated association, the Chicago Welfare Rights Organization, an Ill. not-for-profit corporation, Rosie Newsome, Effie Black, on behalf of themselves and their minor children, and on behalf of all others similarly situated, Plaintiffs, v. James L. TRAINOR, Director, Illinois Department of Public Aid, and the Illinois Department of Public Aid, a governmental agency, Defendants.

No. 73 C 2437.

United States District Court, N. D. Illinois, E. D.

September 29, 1977.

COPYRIGHT MATERIAL OMITTED

Kenneth K. Howell, Robert E. Lehrer, James D. Weill, Legal Assistance Foundation of Chicago, Chicago, Ill., for plaintiffs.

William J. Scott, Atty. Gen., State of Illinois, Thomas P. Sullivan, Theodore R. Tetzlaff, Gregory G. Wille, Jenner & Block, Chicago, Ill., for defendants.

MEMORANDUM OPINION

FLAUM, District Judge:

This action involves important issues concerning the operation of the Illinois Aid to Families with Dependent Children (AFDC) public assistance program. Plaintiffs, including several individuals and several welfare rights organizations, are challenging the manner by which the Illinois Department of Public Aid (IDPA) changed the method for determining eligibility and payment levels for AFDC benefits from a complex and individualized system to a simpler, consolidated flat-grant procedure.

Plaintiffs' complaint is divided into two counts. Count I alleges that the IDPA violated Title IV of the Social Security Act of 1935, as amended, 42 U.S.C. §§ 601 et seq., when it instituted its Consolidated Standard Plan (CSP) in October, 1973. In particular, plaintiffs contend that section 402(a)(23) of the Act, 42 U.S.C. § 602(a)(23), was violated because the "standard of need" for AFDC recipients which existed under the prior, individualized system was unlawfully "obscured" in several respects by the creation of the CSP. Count II alleges that the 1973 CSP violated the equal protection clause of the fourteenth amendment to the United States Constitution. The complaint seeks declaratory and injunctive relief.

Presently before the court are the parties' renewed crossmotions for summary judgment on the issue of liability on Count I of plaintiffs' complaint.¹ However, before this court addresses plaintiffs' various challenges to defendants' actions, and defendants' responses thereto, the court must set forth the basic legal structure of the federal AFDC program, as well as the history and present nature of the Illinois AFDC scheme.

I. The Aid to Families with Dependent Children Program

As the Supreme Court stated in King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968):

The AFDC program is based on a scheme of cooperative federalism... It is financed largely by the Federal Government, on a matching funds basis, and is administered by the States. States are not required to participate in the program, but those which desire to take advantage of the substantial federal funds available for distribution to needy children are required to submit an AFDC plan for the approval of the Secretary of Health, Education, and Welfare ... The plan must conform with several requirements of the Social Security Act and with rules and regulations promulgated by H.E.W.

Id. at 316-17, 88 S.Ct. at 2133. The purpose of the AFDC program is to provide cash payments and social services to "needy dependent children and the parents or relatives with whom they are living ...." 42 U.S.C. § 601.

In the leading case of Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970), the Supreme Court delineated the manner in which a state is to determine the amount of cash payments to an eligible AFDC recipient.

There are two basic factors that enter into the determination of what AFDC benefits will be paid. First, it is necessary to establish a "standard of need," a yardstick for measuring who is eligible for public assistance. Second, it must be decided how much assistance will be given, that is, what "level of benefits" will be paid.

Id. at 408, 90 S.Ct. at 1216. The "standard of need" referred to above consists of "the minimum subsistence level ... determined by computing the cost of items considered necessary for subsistence." Alvarado v. Schmidt, 317 F.Supp. 1027, 1032 (W.D.Wis.1970). The states have been granted broad discretion in both the determination of the items which constitute the standard of need as well as the percentage of the standard of need which will actually be paid. Rosado v. Wyman, supra, 397 U.S. at 408, 90 S.Ct. 1207. Thus, in northern states, an individual state might include a winter coat in its computation of what is necessary for "minimal substance," while a southern state might exclude such an item. Moreover, while some states, such as Illinois, claim to pay 100 percent of its standard of need to eligible AFDC recipients, other states pay varying fractions of the standard of need they establish. Accordingly, it is entirely proper under the federal AFDC program to have 50 different standards of need as well as 50 different actual payment levels in relation to each standard of need.

Although the states have a wide berth in administering their respective AFDC programs, as stated above there are several important limitations placed upon them by the Social Security Act. For purposes of the present action, the key provision is section 402(a)(23), which provides:

The States shall provide that by July 1, 1969, the amounts used by the States to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established, and any maximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted.

42 U.S.C. § 602(a)(23).

In Rosado v. Wyman, supra, the Supreme Court interpreted the mandate of section 402(a)(23). After recognizing that Congress provided little legislative history to aid the Court in construing the statute, 397 U.S. at 412, 90 S.Ct. 1207, the Court delineated what it determined the purposes of the statute to be:

We think two broad purposes may be ascribed to § 402(a)(23): First, to require States to face up realistically to the magnitude of the public assistance requirement and lay bare the extent to which their programs fall short of fulfilling actual need; second, to prod the States to apportion their payments on a more equitable basis. Consistent with this interpretation of § 402(a)(23), a State may, after recomputing its standard of need, pare down payments to accommodate budgetary realities by reducing the percent of benefits paid or switching to a percent reduction system, but it may not obscure the actual standard of need.

Id. at 412-13, 90 S.Ct. at 1218. Thus, in interpreting section 402(a)(23), the Supreme Court held that the "standard of need" established by a state for its AFDC program could not be altered or reduced even though the states had the power to vary their payment levels as they saw fit. In effect, what section 402(a)(23) mandated was "honesty" on the part of the administrators of state AFDC programs requiring them to inform the public to what extent the state was failing to meet the subsistence needs of its citizens in relation to the standard of need established by the state itself. See Roselli v. Affleck, 508 F.2d 1277, 1279 (1st Cir. 1974). As the Court stated:

Section 402(a)(23) invalidates any state program that substantially alters the standard of need in such a way that it is less than it was prior to the enactment of § 402(a)(23), unless a State can demonstrate that the items formerly included no longer constitute part of the reality of existence for the majority of welfare recipients. . . . Providing all factors in the old equation are accounted for and fairly priced and providing the consolidation on a statistical basis reflects a fair averaging, a State may, of course, consistently with § 402(a)(23) redefine its method for determining need.

397 U.S. at 419, 90 S.Ct. at 1221. Accordingly, in analyzing whether the strictures of section 402(a)(23) have been violated the courts must compare the standard of need before and after any change in a state's AFDC program.

II. The Illinois AFDC Program

A. Pre-1973

Under the IDPA's procedures prior to 1973, an individual AFDC recipient family's total "budgeted need" (the amount the family received) was computed by determining which of a large number of "needs" should be ascribed to the family and by totaling the dollar figures the IDPA paid for each of such needs. A large majority of AFDC families had computed, as part of their total budgeted need, certain items designated "basic needs" including food, clothing, shelter, etc. There were also "special needs," items which some families needed under specific circumstances as defined by IDPA. Among the "special needs" were items such as moving expenses, transportation expenses, special diets, etc.

Each basic and special need offered by IDPA fell into one of three categories as to the manner in which it was budgeted. First, "standard allowance" needs were uniform amounts for all similarly situated families, regardless of the actual cost of the item to the family. These "standard allowances" included clothing, food, household supplies and personal essentials. For example, food for an adult in a family of two was budgeted at $29.75 regardless of the actual price of food paid by the adult. Second, "paid as incurred" needs were defined as budgeted and paid on an "actual cost" basis, subject to a reasonableness standard. Such items included transportation expenses. And third, "maximum" allowance needs were defined as budgeted and paid as incurred up to a fixed maximum. An example of a "maximum" allowance was IDPA's budgeting of and payment of rent.

The sum of the "basic" and "special" needs for which the AFDC unit was determined eligible by IDPA constituted the family's "budgeted need."² If the family ...