Moore v. Colautti

• Decision Date: 04 December 1979
• Docket Number: Civ. A. No. 75-1314,75-2395.
• Citation: 483 F. Supp. 357
• Parties: Carrie MOORE et al. v. Aldo COLAUTTI et al. Lorraine TILFORD et al. v. Aldo COLAUTTI et al. Carmen Torres, Ruby Washington, Intervening Plaintiffs.
• Court: U.S. District Court — Eastern District of Pennsylvania

483 F. Supp. 357

Carrie MOORE et al. v. Aldo COLAUTTI et al.

Lorraine TILFORD et al. v. Aldo COLAUTTI et al.

Carmen Torres, Ruby Washington, Intervening Plaintiffs.

Civ. A. Nos. 75-1314, 75-2395.

United States District Court, E. D. Pennsylvania.

November 19, 1979.

As Amended December 4, 1979.

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Richard A. Katz, Stanley Griffith, York, Pa., Community Legal Services, Inc., Walter Walkenhorst, Philadelphia, Pa., for plaintiffs.

Stanley I. Slipakoff, Asst. Atty. Gen., Hubert B. Barnes, Deputy Atty. Gen., Dept. of Justice, Harrisburg, Pa., Linda M. Gunn, Asst. Atty. Gen., Dept. of Public Welfare, Harrisburg, Pa., for defendants.

Gregory Paulson, Alan Linder, Susan Wood, Central Pennsylvania Legal Services, Lancaster, Pa., Jonathan M. Stein and Richard Weishaupt, Community Legal Services, Philadelphia, Pa., for intervening plaintiff Carmen Torres.

Lehigh Valley Legal Services, Mark I. Weinstein, Jeffrey L. Gilbert, Harold J. Funt, Allentown, Pa., for intervening plaintiff, Ruby Washington.

MEMORANDUM

CLIFFORD SCOTT GREEN, District Judge.

These consolidated actions are brought pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 2201 and 2202 to invalidate and enjoin the policies and practices of the Pennsylvania Department of Public Welfare in obtaining reimbursement from individuals who received state-administered public assistance pending awards of federal Supplemental Security Income benefits. Defendants are state officials employed by the Department of Public Welfare. The plaintiff class consists of recipients of state General Assistance (GA) benefits and recipients of Aid to Families with Dependent Children (AFDC) benefits who are eligible for benefits under the SSI program, 42 U.S.C. § 1381 et seq., and who have been or will be subject to the Department's policies and practices to obtain reimbursement from SSI benefits for assistance granted pending receipt of SSI awards. Jurisdiction is alleged pursuant to 28 U.S.C. §§ 1331, 1343(3) and (4). Plaintiffs request not only monetary damages, but also declaratory, injunctive and notice relief.

Oral argument on cross-motions for summary judgment was held on March 7, 1979, and the parties then agreed that the factual record, which includes extensive stipulations, was complete and that a final hearing would be unnecessary. Accordingly, the actions were submitted to the Court either for summary judgment or for judgment on the merits as a nonjury case stated.

For the reasons stated hereinafter, we deny the cross-motions for summary judgment and we award partial declaratory relief in favor of the plaintiffs. We deny plaintiffs' request for monetary damages and injunctive relief.¹

I. Facts and Procedural History

These consolidated lawsuits present a case of first impression in the federal courts regarding state recoupment of public assistance from federally awarded SSI benefits.² The Moore action was filed in the Eastern District of Pennsylvania on May 8, 1975, and the Tilford action was filed in the Middle District of Pennsylvania in June 1975. Shortly thereafter the Tilford case was transferred to the Eastern District and, on September 29, 1975, the cases were consolidated before this Court. After consolidation, several persons requested the right to intervene as plaintiffs, and all intervention motions were granted.³ In addition, on May 5, 1978, the Court approved the parties' stipulation for a class action and after review accepted their definition of the proposed class.

The plaintiffs have previously filed motions for preliminary injunction and the defendants have previously filed motions to dismiss. By agreement of the parties we deferred ruling on these motions, as set forth in our Order of September 29, 1975. The parties then engaged in discovery proceedings and stipulated to facts for summary judgment. Two documents embody these stipulations. The first document is entitled "General Stipulations", and it describes the official policies and practices of the Department regarding reimbursement of public assistance from SSI benefits. The second document is entitled "Individual Stipulations", and it sets forth areas of agreement concerning the Department's collection actions as to the original plaintiffs and the intervening plaintiffs.

In addition to these two sets of stipulations, the factual record in these actions consists of the following materials: depositions of defendants and defendant's employees, including claims settlement agents and caseworkers; interrogatories and answers thereto; defendants' answers to plaintiff's request for admissions (though these admissions are superceded to the extent that they may contradict the general or individual stipulations); the officially filed complaints of plaintiffs and intervening plaintiffs (no answers were filed by defendants to any of the complaints as defendants rely on the stipulations); affidavits of plaintiffs; affidavits of class members accompanying plaintiff's Motion for Summary Judgment; affidavits attached to defendant's Motion for Summary Judgment; and appendices of exhibits containing pertinent DPW regulations and memoranda, and various departmental forms and documents relating to reimbursement from SSI benefits. The affidavits were submitted by plaintiffs to show that the Department's caseworkers and claims settlement agents engaged in coercive collection practices beyond the official policy and that this activity continues unabated today throughout the entire state.

The record in this lawsuit is now closed, and both parties have requested either summary judgment or judgment on the merits. Before discussing the legal arguments and evidence they marshal, we will briefly describe the public policy problem that pervades the dispute.

The Supplemental Security Income Program (SSI), Title XVI of the Social Security Act, 42 U.S.C. § 1381 et seq., is a federally administered assistance program designed to meet basic subsistence needs of aged, blind and disabled individuals according to uniform eligibility standards and a national base payment level. As with most federal programs, there is a time lag between application for and delivery of the desired service. The General Stipulation states that the delay from the date of application for SSI to the receipt of the first check often exceeds six months. During this interim period, applicants for SSI have, by definition, no means of maintaining themselves. Consequently, they are eligible for and receive Public Assistance from the Pennsylvania Department of Public Welfare.

This cash assistance is channeled through two programs, Aid to Families with Dependent Children (AFDC) and General Assistance (GA), and it continues until the individuals are determined eligible for and receive their first SSI check. That check, however, is not a monthly check. It is a lump sum SSI check which awards benefits retroactively to the month of application. The lump sum SSI check, as well as the monthly SSI checks, include state funds as a supplement to the federal SSI payment level. Thus, individuals who receive both the public assistance grant (either from AFDC or GA) and the lump sum SSI check "double dip" into both state and federal funds. Because the state regards this "double dipping" as unfair to recipients who must live on one check and an unnecessary drain on the limited pool of available public assistance money, it seeks reimbursement from SSI recipients.

Prior to 1976, an additional consideration underlay the Department's reimbursement policy toward individuals who received both AFDC and SSI. At that time all income, including public assistance, was considered by the Social Security Administration in determining eligibility for SSI benefits. In the absence of an official reimbursement policy, interim public assistance benefits received would have resulted in a dollar for dollar reduction in the amount of the SSI grant, depressing that grant well below the subsistence level. Moreover, once the first SSI check arrived, the public assistance would have been terminated. Ultimately, the client would have received almost no SSI and no public assistance and would have again faced a protracted delay in getting the SSI benefits increased.

To forestall this hardship, the Department persuaded the Social Security Administration to treat the public assistance grant as a loan and exclude it in determining SSI eligibility. The Social Security Administration regarded the state assistance as a loan, however, only if the AFDC recipient signed a repayment/reimbursement agreement. Though Congress in 1976 exempted interim assistance based on need as a factor in determining eligibility for and the level of SSI,⁴ the Department continues to use these agreements to obtain reimbursement from individuals who received AFDC, and this constitutes one of the practices that plaintiffs attack.

There is no federal law denying states the right to seek reimbursement of state-administered welfare assistance. The Social Security Act provides, however, that SSI benefits may not be transferred, assigned or reached by legal process. Section 407 of Title 42 of the United States Code reads, in pertinent part:

Section 407. Assignment. The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

Section 407 was specifically incorporated into the statutory provisions pertaining to the SSI program, see 42 U.S.C. § 1383(d)(1), and although it might be thought that the proscription applies only to private and not to governmental creditors, the Supreme Court held squarely in 1973 that state welfare departments also fall within its coverage. Philpott v. Essex County...