McElrath v. Califano, 78-1849

• Decision Date: 01 February 1980
• Docket Number: No. 78-1849,78-1849
• Citation: 615 F.2d 434
• Parties: Doris McELRATH, Individually and on behalf of her minor children, Denogya and Darryl, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, and Arthur F. Quern, Director of the Illinois Department of Public Aid, Defendants- Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 434

615 F.2d 434

Doris McELRATH, Individually and on behalf of her minor children, Denogya and Darryl, and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, and Arthur F. Quern, Director of the Illinois Department of Public Aid Defendants- Appellees.

No. 78-1849.

United States Court of Appeals Seventh Circuit.

Argued Feb. 21, 1979.

Decided Jan. 25, 1980.

As Amended Feb. 1, 1980.

Dennis Frick (Law Student), Mandel Legal Aid Clinic, Chicago, Ill., for plaintiffs-appellants.

Jean M. Golden, Sp. Asst. Atty. Gen., Chicago, Ill., Michael F. Hertz, Appellate Sec., Civil Div., Dept. of Justice, Washington, D. C., for defendants-appellees.

Before PELL and BAUER, Circuit Judges, and NOLAND, District Judge. ^*

BAUER, Circuit Judge.

Plaintiffs-appellants Doris McElrath, etc., et al., appeal from the order entered by the district court dismissing their complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief could be granted. Appellants' complaint challenged, inter alia, the validity of federal and state regulations requiring all members of a family, including unemployed children, to obtain and furnish social security account numbers to the Illinois Department of Public Aid as a condition of eligibility for financial assistance under the federal-state program of Aid to Families with Dependent Children. The district court held that both the federal and state regulations were consistent with and authorized by the Social Security Act, and further determined that the challenged regulations did not violate the Privacy Act of 1974 or the appellants' constitutional rights. We affirm.

I

The Aid to Families with Dependent Children (AFDC) program, Title IV-A of the Social Security Act of 1935, as amended, 42 U.S.C. §§ 601 to 611, is a public assistance program of federal and state cooperation providing financial aid to needy dependent children and the parents or relatives with whom they reside. Pursuant to the Social Security Act and the AFDC program, the Secretary of Health, Education and Welfare is granted authority to approve the federal share of expenditures under state plans to dependent children and their caretaker relatives. Accordingly, states electing to participate in the AFDC program must submit for approval by the Secretary a plan which meets all requirements of the Act as set forth in 42 U.S.C. § 602(a) and the concomitant implementing federal regulations and policies. 42 U.S.C. § 602(b); 45 C.F.R. § 201.2. These requirements encompass Congressional directives as to basic eligibility criteria, including the needs, income and resources of the recipients, as well as certain operational measures designed to assure the effective and efficient administration of the AFDC program. If the proposed state plan meets all applicable federal requirements, the Secretary must approve it, and the state applicant becomes eligible for substantial federal contributions for state expenditures made under the plan. 42 U.S.C. § 602(b).

In 1974, Congress amended the Social Security Act by adding Section 402(a)(25) to the state plan requirements for the AFDC program. This section provides that:

A State plan for aid and services to needy families with children must . . . (25) provide (A) that, as a condition of eligibility under the plan, each applicant for or recipient of aid shall furnish to the State agency his social security account number (or numbers, if he has more than one such number), and (B) that such State agency shall utilize such account numbers, in addition to any other means of identification it may determine to employ in the administration of such plan.

42 U.S.C. § 602(a)(25). In connection with his duties under the Act, the Secretary promulgated a regulation which gave effect to Section 602(a)(25) of the federal statute. This regulation requires that as a condition of eligibility applicants for or recipients of aid must furnish to the appropriate state or local agency a social security account number and apply for such number if one has not been issued. 45 C.F.R. § 232.10. The regulation further defines the terms "applicant" and "recipient" to include "the caretaker relative, the children, and any other individual whose needs are considered in determining the amount of assistance." 45 C.F.R. § 232.10(f). ¹ In order to comply with the requirements of the federal statute and regulations, the State of Illinois adopted a similar regulation requiring disclosure of social security account numbers as a condition of eligibility for financial assistance under the Illinois AFDC program. Illinois Department of Public Aid AFDC Man. PO-465. ² Although the state regulations contain no express definition of the terms "applicant" or "recipient," the state authorities have utilized the definition embodied in the federal regulation. 45 C.F.R. § 232.10(f).

At the time this action was instituted, appellant Doris McElrath had two minor children and was receiving AFDC benefits in the amount of $261.00 per month. Pursuant to the 1974 amendments to the AFDC program and the applicable federal and state regulations, the Illinois Department of Public Aid (IDPA) requested Mrs. McElrath to obtain social security account numbers for her children and to disclose the numbers to the state agency. Mrs. McElrath refused to comply with this request. The IDPA then notified Mrs. McElrath that her AFDC benefits would be discontinued due to her failure to furnish the agency with social security account numbers for her minor children. Mrs. McElrath was subsequently afforded an administrative hearing by the IDPA, after which the final decision was made to terminate Mrs. McElrath's AFDC grant.

In September 1977, the McElraths filed the present action challenging the federal and state defendants' regulations that made the continued receipt of the AFDC benefits contingent upon supplying social security account numbers for all family members. The McElraths alleged that these regulations were inconsistent with and not authorized by the AFDC statute, and violated their constitutional rights to privacy and to equal protection of the law. The McElraths further alleged that the defendants violated Section 7 of the Privacy Act of 1974, 5 U.S.C. § 552a note, by requiring disclosure of social security account numbers without informing the AFDC recipients of the purpose for which the numbers were being required and by denying governmental benefits for failure to disclose their social security account numbers. Finally, the McElraths alleged that the defendants had violated 42 U.S.C. §§ 606(f) and 602(a)(10) by failing to provide protective payments of AFDC benefits to eligible children solely because a parent had refused to furnish the dependent child's social security account number.

On September 28, 1977, the district court denied the McElraths' motion for a preliminary injunction and granted the Secretary's motion for dismissal, or in the alternative, for summary judgment. The court continued the entry of judgment in favor of the Secretary until the disclosure of purpose issue under the Privacy Act was resolved.

In its Memorandum Opinion and Order, the district court recognized that the merits of the case turned on whether the terms "applicant for or recipient of aid," who were required by 42 U.S.C. § 602(a)(25) to furnish social security account numbers, included AFDC-benefitted children. The court noted that in the area of statutory construction great deference was to be accorded the interpretation given a statute by the agency charged with its administration. The court also reviewed numerous other provisions of the AFDC authorizing statute and concluded that the Secretary's determination that the term recipients included AFDC-benefitted children was reasonable. Finally, in its first opinion, the district court held that defendants had not violated Section 7(a) of the Privacy Act because the disclosure was required by federal statute, an exception to the prohibition of conditioning eligibility for governmental benefits on disclosure of social security account numbers.

In its later opinion the district court reconfirmed its holding that the defendants had not violated Section 7(a) of the Privacy Act. In this connection, the court considered plaintiff's contention that the defendants had violated Section 7(b) of the Privacy Act by failing to inform AFDC recipients of the intended use of their social security account numbers. The court regarded this failure as a mere technical violation which would be rectified by the notice the IDPA proposed to send out. ³

Upon resolving these issues, the district court denied plaintiffs' motion for injunctive relief, and entered judgment granting the Secretary's motion to dismiss the action. From this adverse judgment, the McElraths have appealed to this Court.

II

The appellants' principal contention on appeal is that the federal and state regulations requiring dependent children to acquire and submit social security account numbers as a condition of eligibility for AFDC benefits are statutorily invalid as being inconsistent with and not authorized by the Social Security Act. We find the arguments advanced in support of this contention to be without merit and hold that the challenged regulations constitute a legitimate condition of eligibility mandated by the Congress under the Social Security Act. Accord, Chambers v. Klein, 419 F.Supp. 569 (D.N.J.1976), aff'd mem., 564 F.2d 89 (3d Cir. 1977); Green v. Philbrook, 576 F.2d 440 (2d Cir. 1978); Arthur v. Department of Social and Health Services, 19 Wash.App. 542, 576 P.2d 921 (1978). We therefore conclude that the district court properly dismissed the appellants' statutory invalidity allegations for failure to state a claim upon which relief could be granted.

The appellants' statutory claim is predicated on...