Miller v. Ives

• Decision Date: 20 November 1991
• Docket Number: Civ. No. 89-0213-B-H.
• Citation: 780 F. Supp. 49
• Court: U.S. District Court — District of Maine
• Parties: Inez MILLER, Plaintiff, v. H. Rollin IVES, Commissioner, Maine Department of Human Services, in his official capacity, Defendant and Third-Party Plaintiff, v. Louis W. SULLIVAN, M.D., Secretary, United States Department of Health & Human Services, in his official capacity, Third-Party Defendant.

780 F. Supp. 49

Inez MILLER, Plaintiff, v. H. Rollin IVES, Commissioner, Maine Department of Human Services, in his official capacity, Defendant and Third-Party Plaintiff, v. Louis W. SULLIVAN, M.D., Secretary, United States Department of Health & Human Services, in his official capacity, Third-Party Defendant.

Civ. No. 89-0213-B-H.

United States District Court, D. Maine.

November 20, 1991.

Martha A. Grant, Legal Services for the Elderly, Presque Isle, Me., for plaintiff.

Marina E. Thibeau, Asst. Atty. Gen., Augusta, Me., for defendant and third-party plaintiff.

Mark S. Ledford, Social Security Div., Dept. of Health & Human Services, Baltimore, Md., for third-party defendant.

MEMORANDUM DECISION

HORNBY, District Judge.

The issue in this case is whether a Social Security Administration regulation is consistent with a federal statute defining eligibility for Supplemental Security Income ("SSI") benefits. Because Maine provides Medicaid on the basis of the federal standard, interpretation of Maine Medicaid regulations is also involved. The case is presented for judgment on a stipulated record following rulings by a federal administrative law judge and a state hearing officer. The plaintiff has exhausted her administrative remedies.

In the case of aged applicants, Congress limits SSI benefits to those who have less than a specific dollar amount of resources, 42 U.S.C. § 1382(a)(1). In counting the dollar value of an applicant's resources, Congress has instructed that "property which, as determined in accordance with and subject to limitations prescribed by the Secretary, is so essential to the means of self-support of such individual ... as to warrant its exclusion" is not to be considered. 42 U.S.C. § 1382b(a)(3).¹ The Secretary of Health & Human Services has therefore promulgated a regulation, 20 C.F.R. § 416.1220, governing the determination of when property is essential to self-support and setting limits on the amount that can be excluded. According to the regulations, "liquid" resources used in a trade or business that is essential to an applicant's self-support are not counted. But when an applicant has liquid resources that are not used in a trade or business, they are counted and may disqualify her for SSI benefits. In this case, applicant Inez Miller had a certificate of deposit of $5,000 and a checking account balance of $1,440. As a result, she was found disqualified for Medicaid and SSI benefits even though her certificate of deposit generated monthly interest payments of about $32 thereby contributing, she argued, to her self-support. Miller contends that both the federal and state regulations are contrary to federal law.

The parties devote a large portion of their briefs to debating the standard of review for various types of regulations. The award of SSI benefits, however, is an area where Congress has directed the Secretary to promulgate interpretive regulations, and the Supreme Court has made clear that if Congress has been silent or ambiguous on the specific issue (as it obviously has been here), "`the question for the court is whether the agency's answer is based on a permissible construction of the statute,' ... that is, whether the agency's construction is `rational and consistent with the statute,'" Sullivan v. Everhart, 494 U.S. 83, 89, 110 S.Ct. 960, 964, 108 L.Ed.2d 72 (1990), quoting Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) and NLRB v. Food & Commercial Workers, 484 U.S. 112, 108 S.Ct. 413, 98 L.Ed.2d 429 (1987) (citations omitted). Put another way, "since the Social Security Act expressly grants the Secretary rulemaking power ... `"our review is limited to determining whether the regulations promulgated exceeded the Secretary's statutory authority and whether they are arbitrary and capricious."'" Sullivan v. Zebley, 493 U.S. 521, 528, 110 S.Ct. 885, 890, 107 L.Ed.2d 967 (1990), quoting Bowen v. Yuckert, 482 U.S. 137, 107 S.Ct. 2287, 96 L.Ed.2d 119 (1987), in turn quoting Heckler v. Campbell, 461 U.S. 458, 103 S.Ct. 1952, 76 L.Ed.2d 66 (1983); Maine Ass'n of Interdependent Neighborhoods v. Commissioner, 946 F.2d 4, 6 (1st Cir.1991).

Under this standard of review, I conclude that the Secretary's regulation as applied to Miller is valid. The statute sets out a framework in which an applicant's resources are to be tallied. If they exceed a certain sum, the applicant is disqualified. Section 1382b provides that in tallying resources, the agency shall exclude (1) a home, (2) household goods, personal effects and a car, (3) the value of burial space, (4) other "property" essential to an individual's self-support, (5) resources of an individual who is blind or disabled but who has a plan for achieving self-support; and so forth. In light of the sequence of the categories preceding it, it would not be unreasonable to think that Congress, in excluding "other property" from the tally, was referring to physical property such as tools of a trade, a farm or woodlot, etc., rather than currency, bank accounts, certificates of deposit and the like.² If that is a correct interpretation, it would be the end of the matter for Miller's argument. But, in elaborating on what is to be excluded under this category, the Secretary has specified: "Liquid resources other than those used as part of a trade or business are not property essential to self-support." 42 C.F.R. § 416.1220. Although this statement still clearly requires that Miller's certificate of deposit be counted (thereby disqualifying her), the negative implication of the statement — that liquid resources used in a trade or business will not be counted against the applicant — furnishes the basis for Miller's argument challenging the regulation. She contends that the distinction is irrational and that Congress effectively excluded liquid resources regardless of whether they generate only interest income to an individual investor or a return in a trade or business so long as either can be deemed essential to self-support.

I conclude that the Secretary's decision to exclude liquid resources used in a trade or business does not invalidate the Secretary's general rule that liquid resources will be counted in considering whether an applicant qualifies, and that the latter is consistent with the statute. After all, the statute is designed to allow an assessment of what resources an applicant has. If an applicant could avoid having her resources counted simply by putting them in an...