MD. DEPT. OF HUMAN RESOURCES v. US DEPT. OF AG., Civ. No. HM85-2734.

• Decision Date: 02 August 1985
• Docket Number: Civ. No. HM85-2734.
• Citation: 617 F. Supp. 408
• Parties: MARYLAND DEPARTMENT OF HUMAN RESOURCES and Ruth Massinga, Secretary and Linda Walter and (Individually and on Behalf of All Others Similarly Situated) v. UNITED STATES DEPARTMENT OF AGRICULTURE and John R. Block, Secretary.
• Court: U.S. District Court — District of Maryland

617 F. Supp. 408

MARYLAND DEPARTMENT OF HUMAN RESOURCES and Ruth Massinga, Secretary and Linda Walter and (Individually and on Behalf of All Others Similarly Situated) v. UNITED STATES DEPARTMENT OF AGRICULTURE and John R. Block, Secretary.

Civ. No. HM85-2734.

United States District Court, D. Maryland.

August 2, 1985.

Stephen H. Sachs, Atty. Gen. of Md., Nancy B. Shuger, Mark J. Davis, Ralph S. Tyler, Asst. Attys. Gen., Baltimore, Md., for State plaintiffs.

Peter M.D. Martin, Dennis W. Carroll, Stuart R. Cohen, Legal Aid Bureau, Inc., Baltimore, Md., for Recipient plaintiffs.

Surell Brady, Renee M. Wohlenhaus, Trial Attys., Dept. of Justice, Washington, D.C., Juliet A. Eurich, Asst. U.S. Atty., Dist. of Md., Baltimore, Md., Debra Byers, Elizabeth Allaben, Patrick Gardner, Office of Gen. Counsel, Dept. of Agriculture, Washington, D.C., for defendant.

MEMORANDUM AND ORDER

HERBERT F. MURRAY, District Judge.

Plaintiffs Maryland Department of Human Resources and Ruth Massinga, Secretary, and Linda Walter, individually and on behalf of all others similarly situated, filed the instant action against defendants United States Department of Agriculture and John R. Block, Secretary, on June 25, 1985. The Verified Complaint for Preliminary and Permanent Injunctive and Declaratory Relief charges that "defendants' decision to deny Maryland's request to exclude from food stamp income payments designated by the State legislature for energy assistance is arbitrary, capricious and not in accordance with law because the decision violates the terms of defendants' own regulations, 7 C.F.R. § 273.9(c)(11)(i) (A)-(E), and the statute governing the Food Stamp Program, 7 U.S.C. § 2014(d)(11). See 5 U.S.C. § 706(2)(A). Under this statutory scheme, a State which documents that energy assistance is for the purpose of meeting the home energy needs of public assistance recipients is entitled to exclude these payments from food stamp income. It was unlawful for defendants to deny Maryland the opportunity to assist the State's food stamp recipients in the manner allowed by governing law." Complaint, paragraph 43 at pp. 13-14. As relief, plaintiffs request the following:

"1. That the court determine as soon as practicable that this action be maintained as a class action under F.R.Civ.P., 23(b)(2).

2. That the court issue a declaratory judgment granting Maryland permission to exclude from income in calculating the Food Stamp allotments of the recipient plaintiff and the class she seeks to represent, the public assistance grant increase designated by the General Assembly of Maryland for energy assistance, effective July 1, 1985.

3. That the court issue a preliminary and permanent injunction prohibiting defendants, pursuant to their illegal decision, from imposing any fiscal sanctions or other penalties upon Maryland or from otherwise reducing any funds for administrative costs, which normally would be paid to Maryland in the usual course of defendants' financial participation in Maryland's Food Stamp Program.

4. That, during the pendency of these proceedings, the court issue such interim orders as may be necessary to prevent defendants from imposing fiscal sanctions or other penalties upon Maryland or from otherwise reducing funds for administrative costs which normally would be paid to Maryland in the usual course of defendants' financial participation in the State's Food Stamp Program;

5. That the court issue a permanent injunction preventing defendants, pursuant to their illegal decision, from prohibiting Maryland from implementing a policy which excludes from the food stamp income of the individual plaintiff and the class she seeks to represent, the grant increase that the General Assembly of Maryland authorized such recipients to receive, beginning in July 1985, for energy assistance.

6. That the court retain jurisdiction to grant such other relief, including fees and costs, as is fair and just." Complaint, pp. 14-15.

The State Plaintiffs' Motion for Preliminary Injunction is now before the court. See F.R.Civ.P. 65(a). The court held a hearing on the pending motion on Wednesday, July 31, 1984. Having considered the oral as well as the written evidence submitted by both parties, the court is now prepared to rule.

In support of their motion for preliminary injunction, plaintiffs Maryland Department of Human Resources and Ruth Massinga hereinafter State plaintiffs contend that the balance-of-hardship weighs in their favor. Specifically, the State plaintiffs contend that they will suffer irreparable injury if they cannot continue implementing an exclusion policy free from fiscal sanctions and penalties. They argue that the likelihood of irreparable harm to the plaintiffs without an injunction is greater than the likelihood of harm to the defendants with an injunction. Moreover, State plaintiffs argue that they are likely to succeed on the merits because the defendants' decision to deny plaintiffs' exclusion request was arbitrary and capricious. Finally, State plaintiffs argue that the public interest weighs in favor of granting preliminary relief. State plaintiffs therefore request the court to enter a preliminary injunction to preserve the status quo because they face irreparable injury without such relief beginning August 1, 1985 until the merits are determined for following an exclusion policy without defendants' approval and without freedom from fiscal sanctions and administrative penalties.

The class of recipients of both AFDC welfare and Food Stamp benefits also have filed a memorandum in support of the State plaintiffs' Motion for Preliminary Injunction. The recipient plaintiffs argue that the State plaintiffs' motion should be granted because denial of such motion would result in the reduction of food stamp benefits for approximately 180,000 Maryland residents, and any loss of food stamps would cause great hardships to recipient families and individuals and interfere with their ability to subsist. In addition, recipient plaintiffs also claim that the State plaintiffs' probability of success on the merits is very likely given that the objective facts and legislative materials indicate that the Maryland legislature passed the July 1985 increase as a direct result of evidence of the high cost of energy in Maryland and not as a sham. Recipient plaintiffs therefore request the court to grant the preliminary injunction.

In opposition to State plaintiffs' Motion for Preliminary Injunction, defendants argue that "the preliminary injunction requested by Maryland may not be entered in this case, however, because the Food Stamp Act, 7 U.S.C. § 2020(g) precludes such relief. Second, the State of Maryland has altered the status quo without authority, in fact with the Secretary's specific disapproval, the status quo to be protected here is the status before Maryland implemented a disapproved charge in calculation of food stamp households' income. In such circumstance, equity precluded the Court from granting Maryland's motion. Third, the elements of the preliminary injunction test have not been met by Maryland in this case"; that is, the preliminary injunction requested would disrupt and not preserve the status quo, Maryland has shown no irreparable injury, Maryland has little likelihood of success on the merits, and the public interest favors denial of the preliminary injunction. Defendants therefore request that plaintiffs' motion for preliminary injunction be denied.

Before analyzing the law applicable to the case at bar, the court will first examine the facts giving rise to the instant action.

A. FACTUAL BACKGROUND

Plaintiffs Maryland Department of Human Resources (DHR) and Secretary Massinga have submitted Proposed Findings of Fact and Conclusions of Law in the instant case. The court has reviewed all the evidence submitted and believes that plaintiffs' Proposed Findings of Fact adequately and fairly represent the facts in this case. The court, therefore, has determined to adopt plaintiffs' Proposed Findings of Fact with few exceptions. The court's factual findings are thus set forth below adopting plaintiffs' Proposed Findings of Fact.

1. Plaintiffs Maryland Department of Human Resources (DHR) and Secretary Ruth Massinga administer the Food Stamp Program in Maryland.

2. Defendants United States Department of Agriculture (USDA) and Secretary John R. Block administer the Food Stamp Program nationwide.

3. The State plaintiffs participate in the State-Federal Food Stamp Program and are reimbursed by defendants for 50% of the State's administrative costs in operating the program. Defendants pay 100% of benefits for program recipients.

4. The facts which gave rise to this suit are as follows:

a. In its 1985 session, the General Assembly of Maryland enacted a budget bill which was signed into law by the Governor. Section 33.09.00.01 of the bill is a grant increase of $17 million for persons receiving Aid to Families with Dependent Children (AFDC) and General Public Assistance (GPA) effective in State Fiscal Year 1986, which began July 1, 1985. The bill specifically states that the General Assembly passed this grant increase for the purpose of helping public assistance recipients in Maryland to meet their home heating needs.

b. Consistent with this legislative mandate to implement the energy grant increase by July 1, 1985, the State plaintiffs determined that the most administratively efficient manner to accomplish this purpose in accordance with applicable law was to begin to pay the energy assistance grant increase to public assistance recipients effectively July 1, 1985. Affidavit of Ruth Massinga, ¶ 2.

c. On April 17, 1985, plaintiff Massinga submitted a written request, with supporting documentation, to defendants for permission to exclude, beginning July 1, 1985, from income in the Food Stamp Program the grant increase designated by the Maryland legislature for energy assistance payments. Plaintiff Massinga requested...