North Coast Coalition v. Woods

• Decision Date: 01 October 1980
• Citation: 110 Cal.App.3d 800,168 Cal.Rptr. 95
• Court: California Court of Appeals Court of Appeals
• Parties: NORTH COAST COALITION et al., Plaintiffs and Respondents, v. Marion J. WOODS et al., Defendants and Appellants. Civ. 48930.

Page 95

168 Cal.Rptr. 95

110 Cal.App.3d 800

NORTH COAST COALITION et al., Plaintiffs and Respondents, v. Marion J. WOODS et al., Defendants and Appellants.

Civ. 48930.

Court of Appeal, First District, Division 4, California.

Oct. 1, 1980.

Rehearing Denied October 31, 1980.

George Deukmejian, Atty. Gen. of the State of California, John J. Klee, Jr., Deputy Atty. Gen., San Francisco, for defendants and appellants.

Thomas B. Mason, Mary Ann Villwock, David Lowe, Ukiah, John E. McDermott, Mary S. Burdick, Alan Rader, Marilyn Katz, Los Angeles, for plaintiffs and respondents.

CHRISTIAN, Associate Justice.

The Department of Social Services and Marion J. Woods as its director appeal from an order granting a preliminary injunction which forbids enforcement of certain welfare regulations and requires appellants to provide the individual respondents and members of the represented class with benefit payments to which they would be entitled but for the operation of the regulations.

Respondents Diana Lotspeich, Stormie Harrington, Joyce Crouch and Katherine Kulmi receive public assistance under the Aid to Families with Dependent Children (AFDC) program, a cooperative federal-state program financed with federal and state funds. (42 U.S.C. § 601 et seq.; Welf. & Inst.Code, § 11200 et seq.; see King v. Smith (1968) 392 U.S. 309, 316-317, 88 S.Ct. 2128, 2132-33, 20 L.Ed.2d 1118.) In June and July of 1979, each received notice from the Mendocino County Department of Public Services that her AFDC grant would be reduced due to receipt of income from an unrelated adult male (UAM) residing in her household. The department stated that this action was required by specified welfare regulations, including section 44-133 of the Eligibility and Assistance Standards (Manual of Policies and Procedures, State of California Health & Welfare Agency, Department of Benefit Payments (hereinafter EAS)).

If an unrelated adult male resides with a woman receiving an AFDC grant, he is required by Welfare and Institutions Code section 11351.5 to make a financial contribution to the AFDC family unit "which shall not be less than it would cost him to provide himself with an independent living arrangement." ¹ The Eligibility and Assistance Standards require the AFDC mother to report the amount of financial payments made by the UAM for his own share of living expenses (EAS § 43-107.51). Portions of these payments are treated as a contribution, i. e., income, to the AFDC family. The amount of this contribution is determined, as provided by EAS § 44.113.5, by reducing the amount of payments by the UAM for his own living expenses by (1) the AFDC food allowance for one person, (2) $5 for utilities and household operations, and (3) any increase in housing costs caused by the UAM's presence. ² A subsection of the regulation cited by the Department of Social Services in its notice to the individual respondents that their AFDC grants would be reduced (EAS § 44-133.5) provides that the net amount remaining after this calculation, plus any additional contributions made by the UAM to the AFDC family, is treated as net income to the family. ³ The AFDC grant is reduced concomitantly. (EAS §§ 44-101, 44-315.413.) The present litigation challenges the validity of EAS section 44-113.5 and EAS section 44-133.7, upon which the proposed reductions in the individual respondents' AFDC grants were based.

Appellants contend that after the trial court granted the preliminary injunction the Department of Social Services, in hearings requested by the four individual respondents, rendered decisions in favor of three of the four, so that those three have not been adversely affected by the challenged regulations. Appellants also argue that respondent North Coast Coalition has not alleged that it or any of its members is adversely affected by the regulations. The issue, however, is insignificant because, as appellants concede, one of the individual respondents, Joyce Crouch, remains affected by the regulations, so that the present controversy is not moot. Even if the case were moot, it "poses an issue of broad public interest that is likely to recur" and would therefore be subject to review on this appeal despite its mootness. (In re William M. (1970) 3 Cal.3d 16, 23, 89 Cal.Rptr. 33, 37, 473 P.2d 737, 741.)

Respondents contend that it is inappropriate for this court to determine the merits of their claim that the challenged regulations are invalid. They argue that appellate review of the order granting the preliminary injunction is limited to a determination whether the trial court abused its discretion when it determined the probability that respondents would prevail on the merits of the action. Appellants contend that this court may determine the validity of the challenged actions on this appeal because the case presents solely a question of law.

Several courts have held that an appellate court cannot determine the merits of an action on appeal from an order granting or denying a preliminary injunction. (See, e. g., Socialist Workers etc. Committee v. Brown (1975) 53 Cal.App.3d 879, 889, 125 Cal.Rptr. 915; Paul v. Allied Dairymen, Inc. (1962) 209 Cal.App.2d 112, 121, 25 Cal.Rptr. 595.) Other courts have reviewed the merits in such cases without expressly determining whether they were authorized to do so. (See, e. g., District Election etc. Committee v. O'Connor (1978) 78 Cal.App.3d 261, 144 Cal.Rptr. 442; 7978 Corporation v. Pitchess (1974) 41 Cal.App.3d 42, 115 Cal.Rptr. 746.) An early California decision on the point held: "It accords with the theory of our system, that the Supreme Court shall have the benefit of the judgment of the District Court at the final hearing below, and, except in a clear case, we ought not to anticipate the final judgment of the District Court by our action on appeal from the order granting the preliminary injunction." (Patterson v. Board of Supervisors (1875) 50 Cal. 344, 345; emphasis added.)

The present case is "clear," and thus a determination on the merits is appropriate, because no fact questions are presented. The issue of the validity of the challenged regulations is solely one of law, and this court is in as good a position to resolve the issue now as the trial court would be after determination of this appeal. In an identical procedural setting, the California Supreme Court recently held that a city ordinance precluding more than five unrelated persons from residing together violated California's constitutional right of privacy (art. I, § 1); the case had reached the court on appeal from an order granting a preliminary injunction compelling the appellants to comply with the ordinance. (City of Santa Barbara v. Adamson (1980) 27 Cal.3d 123, 164 Cal.Rptr. 539, 610 P.2d 436.) The court did not expressly state that a determination of the validity of the ordinance was within the scope of its review but, as here, a determination on the merits of the action was clearly appropriate because no fact questions were to be resolved. (Compare Transcentury Properties, Inc. v. State of California (1974) 41 Cal.App.3d 835, 844, 116 Cal.Rptr. 487 (review of merits on appeal from order granting preliminary injunction inappropriate because claim involved mixed questions of law and fact, involving possibility of conflicting inferences).) A determination of the validity of the challenged regulations is thus within the scope of review on this appeal, and will be the law of the case. (City of L. A. v. L. A. Bldg. etc. Council (1952) 109 Cal.App.2d 81, 84, 240 P.2d 16 (appeal from judgment making preliminary injunction permanent; prior review of merits on appeal from order granting preliminary injunction was law of the case).)

To participate in the AFDC program, a state must formulate a plan for aid and services which fulfils conditions specified by federal statute. (42 U.S.C., § 602.) One of these conditions is that the state plan must "provide that the State agency shall, in determining need, take into consideration any other income and resources of any child or relative claiming aid to families with dependent children . . . ." (42 U.S.C., § 602(a)(7).) Federal regulation implementing this directive precludes a reduction in assistance payments (or a finding of ineligibility for assistance) on the basis of availability of income unless there is proof of actual contribution: "In establishing financial eligibility and the amount of the assistance payment, only such net income as is actually available for current use on a regular basis will be considered . . . ." (45 C.F.R., § 233.90(a)(1).) ⁴ This regulation embodies holdings in Lewis v. Martin (1970) 397 U.S. 552, 90 S.Ct. 1282, 25 L.Ed.2d 561; and King v. Smith, supra, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118. Thus a state may not reduce assistance payments on the basis of assumed availability of income from a UAM residing in a household receiving AFDC grants; there must be proof of actual contribution by the UAM to the child or relative claiming assistance under the AFDC program. (45 C.F.R., § 233.90(a)(1).)

The challenged regulations impermissibly operate to assume actual contribution by the UAM by reducing his declared contribution to the family unit to meet his own living expenses by an assumed amount of his own living expenses. Pursuant to EAS section 44-113.5, this assumed amount consists of (1) a set food allowance, (2) $5 for utilities and other household expenses, and (3) any increase in housing costs caused by the UAM's presence. EAS 44-133.7 provides for treatment of the reduced contribution ("the net amount of the contribution") as income to the family. However, the amount of living expenses presumed pursuant to EAS 44-113.5 may differ from the UAM's actual living costs (e. g., the UAM may spend more on food than the set food allowance). Federal law requires that these actual costs, rather than assumed costs, be used in the computation of income made available to the AFDC...