Liberty Alliance of the Blind v. Califano

• Decision Date: 06 December 1977
• Docket Number: Nos. 77-1010 and 77-1011,No. 77-1010,No. 77-1011,77-1010,77-1011,s. 77-1010 and 77-1011
• Citation: 568 F.2d 333
• Parties: LIBERTY ALLIANCE OF THE BLIND, Lillian Carney, John Coleman, Oliver Ewell, Emma Jenkins, Lillian Luksa, Ernestine Lyons, Dennie McNeil, Maude and Benjamin Pratt and Caterine Sullivan, on behalf of themselves and all others similarly situated, Appellants in, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Appellant in, and Frank S. Beal, Secretary of the Pennsylvania Department of Public Welfare.
• Court: U.S. Court of Appeals — Third Circuit

Page 333

568 F.2d 333

LIBERTY ALLIANCE OF THE BLIND, Lillian Carney, John Coleman Oliver Ewell, Emma Jenkins, Lillian Luksa, Ernestine Lyons Dennie McNeil, Maude and Benjamin Pratt and Caterine Sullivan, on behalf of themselves and all others similarly situated, Appellants in No. 77-1010, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Appellant in No. 77-1011 and Frank S. Beal, Secretary of the Pennsylvania Department of Public Welfare.

Nos. 77-1010 and 77-1011.

United States Court of Appeals Third Circuit.

Argued Oct. 4, 1977.

Decided Dec. 6, 1977.

Linda M. Bernstein, Community Legal Services, Inc., Philadelphia, Pa., for appellants in 77-1010 and as cross-appellees in 77-1011.

Barbara L. Babcock, Acting Asst. Atty. Gen., David W. Marston, U. S. Atty., Randolph W. Gaines, Chief of Litigation, Washington, D. C., Linda L. Cromwell, Dept. of Health, Ed. and Welfare, Baltimore, Md., for appellee in 77-1010 and as cross-appellant in 77-1011.

Before GIBBONS and WEIS, Circuit Judges, and MEANOR, ^* District Judge.

OPINION OF THE COURT

GIBBONS, Circuit Judge.

Plaintiffs, ten blind Pennsylvania recipients of Supplemental Security Income benefits and Liberty Alliance of the Blind (Liberty Alliance), an organization of blind persons dedicated to improving the economic and social status of the blind, appeal from a final decision of the District Court dismissing their case against the Secretary of Health, Education and Welfare and denying class action certification. The Secretary cross-appeals from a final order of the District Court granting summary judgment in favor of one blind plaintiff, Lillian Carney.

At issue in both appeals is the proper interpretation of § 1611(h) of the Social Security Act Amendments of 1972, Pub.L. No. 92-603, tit. III, § 301, which provides that, in determining the amount of Supplemental Security Income benefits for blind persons, there shall be disregarded the greater of either the amount that could have been disregarded under the former state plan or the amount which would be disregarded under the relevant provisions of the Supplemental Security Income program. The District Court agreed with the plaintiffs that in addition to those forms of income specifically directed to be disregarded under the prior Pennsylvania plan, § 1611(h) mandates that the Secretary disregard income which, because of the state plan's assessment of basic, special, and spousal needs, would have been excluded from the computation of benefits under the state plan. However, the District Court declined to order that this interpretation be applied to all Pennsylvania blind recipients of Supplemental Security Income benefits because, except for Carney, the plaintiffs had not, when the suit was filed, exhausted administrative remedies. Liberty Alliance contends that, although the precise computation of benefits would vary among the individual claimants, the legal issue of the interpretation of § 1611(h) is common to all blind claimants in Pennsylvania and, thus, the Court should have afforded class action relief in order to obviate the necessity for multiple administrative and judicial proceedings litigating the identical issue. The Secretary urges, first, that the District Court misconstrued § 1611(h) in Carney's case and, second, that even if the Court's construction is accepted, that ruling cannot benefit any other claimant because the rule requiring exhaustion of administrative remedies bars class relief even as to a question of law. We affirm the District Court's interpretation of § 1611(h), but reverse its decision that the failure of each individual claimant to exhaust administrative remedies barred class relief. Therefore, we remand the case to the District Court for a determination of the appropriateness of permitting the case to proceed as a class action.

I. THE SECRETARY'S APPEAL IN LILLIAN CARNEY'S CASE

Under Title X of the Social Security Act of 1935 ¹ the Federal Government assumed responsibility for helping the states to provide public assistance payments to the needy blind by providing matching funds for approved assistance plans. The Act required the states, in determining the need for assistance, to consider the income and resources of the claimants. Because some states, including Pennsylvania, rendered assistance to blind persons who already had some minimum income and resources, these states did not initially qualify for federal matching funds. In a major revision of the Act, the Social Security Act Amendments of 1950, ² Congress addressed that issue. Senate Report No. 1669 ³ on the bill which became the 1950 Amendments Act states:

Under title X of the Social Security Act the States are required, in determining the need for assistance, to take into consideration the income and resources of claimants of aid to the blind. Your committee believes this requirement stifles incentive and discourages the needy blind from becoming self-supporting and that therefore it should be replaced by a requirement that would assist blind individuals in becoming useful and productive members of their communities. Accordingly, the committee-approved bill would require all States administering federally approved aid to the blind programs to disregard earned income up to $50 per month of claimants of aid to the blind beginning July 1, 1952. The exemption of earnings would be discretionary with each State prior to that date so the State legislatures will be afforded an opportunity to make any necessary changes in their aid to the blind laws to conform to the new requirement.

Aid to the needy blind, in the judgment of your committee, is not in the same category with assistance programs for other needy individuals. Opportunities for gainful employment for blind individuals are limited and their necessary expenditures are increased by the need for special books, for special medical treatment in some cases, and for guide service and readers. As with concessions and special provisions for the blind in other laws, the exemption of earnings up to $50 per month is not regarded by your committee as a precedent for similar treatment for individuals who are not blind.

In recognition of blind persons' special needs, the 1950 Amendments Act embodied the policy of treating them differently from other public assistance beneficiaries. The Act qualified the standard requirement "that the State agency shall, in determining need, take into consideration any other income and resources of the individual claiming aid" with the proviso "except that, in making such determination, the State agency shall disregard the first $50 per month of earned income." ⁴ Thus the concept of disregarding income and resources of blind persons, which did not appear in other public assistance programs, was introduced into the Social Security Act. The formula for such disregards was changed over the years. Its last version appears in 42 U.S.C. § 1202(a)(8). ⁵

(a) A state plan for aid to the blind must . . . (8) provide that the State Agency shall, in determining need, take into consideration any other income and resources of the individual claiming aid to the blind, as well as any expenses reasonably attributable to the earning of any such income, except that, in making such determination, the State Agency (A) shall disregard the first $85 per month of earned income, plus one-half of earned income in excess of $85 per month, (B) shall, for a period not in excess of twelve months, and may, for a period not in excess of thirty-six months, disregard such additional amounts of other income and resources, in the case of an individual who has a plan for achieving self-support approved by the State Agency, as may be necessary for the fulfillment of such plan, and (C) may, before disregarding the amounts referred to in clauses (A) and (B), disregard not more than $7.50 of any income . . . .

As this statutory subsection indicates, in the years 1972-1974 the Title X public assistance program for blind persons recognized both mandatory and optional disregards of income and resources.

When, in 1950, Congress was considering the concept of special disregards of income and resources of publicly assisted blind persons, Pennsylvania was not a participant in the Title X program. Senate Report No. 1669 discusses the Pennsylvania problem:

Pennsylvania has been negotiating for some time with the Social Security Administration to arrive at a basis by which it could develop a plan for aid to the blind that could be approved as conforming to the requirements of the Social Security Act. To help in solving the issue which has stood in the way of accepting the plan proposed by Pennsylvania and to facilitate formulation of acceptable plans by other States that do not at the present time have approved plans, the bill would amend title X. The bill would provide that, for an interim period, the Federal Security Administrator shall approve a plan of such State for aid to the blind, even though it does not meet the requirement in title X of the act, as amended, relating to the determination of need and consideration of resources, if the plan meets all other requirements. The amendment would provide, however, that Federal participation shall be available only with respect to expenditures which would be approvable under the requirements of title X, clause (8), section 1002(a) of the act, as amended by the bill. This amendment would be effective only for the period October 1, 1950, to June 30, 1953. Your committee believes that this period of time will enable the States concerned to amend their laws and develop aid-to-blind plans that conform in all respects with the requirements of title X.

The source of Pennsylvania's problem apparently was that its plan was more generous in disregarding income and resources of blind persons than was the Federal Government's. Section 344(a) of Pub.L. No. 81-734, ch. 809, 64 Stat. 554, provided for Pennsylvania's program...