Ottman v. Fisher

• Citation: 319 A.2d 56
• Court: Supreme Judicial Court of Maine (US)
• Decision Date: 30 April 1974
• Parties: Marie OTTMAN v. Dean FISHER et al.

Page 56

319 A.2d 56

Marie OTTMAN v. Dean FISHER et al.

Supreme Judicial Court of Maine.

April 30, 1974.

Locke, Campbell & Chapman by Harry N. Starbranch, Augusta, for plaintiff.

Robert B. Calkins, Asst. Atty. Gen., Augusta, for defendants.

Before DUFRESNE, C. J., and WEATHERBEE, POMEROY, WERNICK, ARCHIBALD and DELAHANTY, JJ.

POMEROY, Justice.

Mrs. Marie Ottman, appellee herein, assumed actual custody and support of three minor children who were related to her only as first cousins once removed.

Her application for Aid to Families with Dependent Children (AFDC) ¹ was at first granted and later withdrawn by appellant herein. Appeal from such withdrawal was seasonably taken, Rule 80B, Maine Rules of Civil Procedure, being used as the vehicle therefor.

Such appeal was fruitful.

Dean Fisher, Commissioner of Health and Welfare of the State of Maine, then seasonably filed this appeal.

We deny the appeal.

The controversy affords us a view of the curious governmental and administrative procedures which are often spawned when sovereign states and the federal government engage in so-called 'cooperative federalism' for the purposes of extending benefits to the citizenry.

Though not formally named in the litigation which led to this appeal, the real parties in interest here are three young children whose actual custody and support was assumed by appellee and who were the ultimate beneficiaries of the disputed AFDC grant.

The children's mother and father had been divorced.

Custody of the children had been awarded the father.

Appellee took the children into her home and assumed responsibility for their support, when the father was admitted to a mental institution.

The mother's whereabouts is unknown.

On August 23, 1971, the Commissioner determined, after a hearing, that the three children were 'first cousins once removed' of appellee, and that as such appellee qualified as an AFDC recipient on behalf of the children. ²

In this initial decision the Commissioner stated that

'. . . a 'first cousin once-removed' is intended as a proper recipient of a grant for eligible children on the basis that such a person is recognized as being in as close kinship as one designated 'great-great. " ³

The Commissioner added that this interpretation 'would appear to carry out the spirit of the regulation.'

Approximately two months after issuing this decision the Commissioner received a letter from the Commissioner of the Regional Office of HEW, situated in Boston, Mass. In this letter, the Regional Commissioner stated that he had

'. . . reviewed the recommendation of your Department Fair Hearing Officer with respect to the denial of AFDC to a child living with a cousin once removed, on the basis that the degree of relationship required by Section 406(a) of the Social Security Act does not exist.' ⁴

The letter then continued 'first cousins once removed are not relatives for purposes thereof.' (See 406(a) Social Security Act.)

This interpretation was based upon Sec. 3432 of Part IV of the HEW Handbook of Public Assistance, which in turn interpreted 42 U.S.C.A. § 606(a), and from which the language in 45 C.F.R. 233.90, (n 2), was drawn. Since he discerned in these source materials no expansion of the term 'first cousin,' the Regional Commissioner opined that the term includes only first cousins 'as such' and not 'second cousins,' which he equated to 'first cousins once removed.'

As a direct result of the Regional Commissioner's letter, a second 'fair hearing' was held in appellee's case, following which, on January 5, 1972, appellant reversed himself and decided 'that the grant be closed.'

In this latter decision, appellant stated:

'At issue (in the hearing) was whether a first-cousin once removed is a proper payee. Social Security Law specifies who may be a payee. It permits 'great-great' but is silent on 'first cousin once removed.' Originally it had been ruled that, because both these designations are equally near to the grantee, a 'first cousin once removed' was a proper payee. The Regional office of Health, Education and Welfare has overruled this ruling.

The Department must therefore reverse itself.' (Emphasis added)

On appeal to the Superior Court, the presiding Justice remanded to the Commissioner for action not inconsistent with that Court's ruling that

'. . . a first cousin once-removed is in the fifth degree and that a second cousin is in the sixth degree and therefore a first cousin once-removed is not the same as a second cousin. Therefore, by inference, a first cousin includes a first cousin once-removed. 'And finally, it is wholly consistent with the purpose of the statute that a first cousin once-removed be included within the breadth of the statute.'

Without yet considering the correctness of the reasoning in the ruling below, we feel it will be helpful to those charged with administering the AFDC program to examine the propriety of the manner in which the Commissioner revoked appellee's AFDC benefits in the first instance, on the basis of the letter of opinion from the HEW Regional Commissioner.

We are not here concerned with the formal procedural steps which preceded the second 'fair hearing' after which the Commissioner terminated payments. Nor need we consider the quality of the hearing itself, in terms of the procedural rights and safeguards to which appellee, as a welfare recipient, was constitutionally entitled. See Goldberg v. Kelly, supra (n 1); Wheeler v. Montgomery, 397 U.S. 280, 90 S.Ct. 1026, 25 L.Ed.2d 307 (1970). These particular matters were not raised below, nor are they raised here, and we note that appellee's complaint in Superior Court was based solely on the claim that the Commissioner's second decision

'. . . is founded upon a misconception of law and accordingly is arbitrary and capricious and has prejudiced and aggrieved and directly affected the rights of the plaintiff.'

The apparent satisfaction of procedural formalities does not, however, insulate the Commissioner's decision from the challenge that it is 'arbitrary and capricious' for other reasons.

We have held that 'administrative agencies are constitutionally required to adhere to the 'fundamentals of fair play. " In Re Maine Clean Fuels, Inc., Me., 310 A.2d 736, 746 (1973). In addition,

'. . . the minimal requirements of administrative 'fair play,' something less than that demanded of our courts but something more than unfettered administrative action, are to be determined 'from case to case in accordance with differing circumstances. '' Id. at 746. (Citations omitted)

In a similar vein but more specifically, the United States Supreme Court has addressed the relationship of welfare benefits to constitutional guarantees. In Goldberg v. Kelly, supra, wherein the Court focuses upon procedural due process in holding that an evidentiary hearing is required before withdrawal of public assistance payments, Mr. Justice Brennan expressed the view of five Court members that

'Such benefits are a matter of statutory entitlement for persons qualified to receive them. (Footnote omitted) Their termination involves state action that adjudicates important rights. The constitutional challenge cannot be answered by an argument that public assistance benefits are 'a 'privilege' and not a 'right ". Shapiro v. Thompson, 394 U.S. 618, 627 n. 6, 89 S.Ct. 1322, 1327, 22 L.Ed.2d 600, 611 (1969). Relevant constitutional restraints apply as much to the withdrawal of public assistance benefits as to disqualification for unemployment compensation, Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963); or to denial of a tax exemption, Speiser v. Randall, 357 U.S. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958); or to discharge from public employment, Slochower v. Board of Higher Education, 350 U.S 551, 76 S.Ct. 637, 100 L.Ed. 692 (1956).' 397 U.S. 254, 262, 90 S.Ct. 1011, 1017, 25 L.Ed.2d 287, 295-296.

In the case at bar we entertain no doubt that the Commissioner's second ruling on appellee's eligibility for AFDC payments was preordained by the letter from the Regional HEW Office, which the Commissioner apparently regarded as a directive from a superior binding upon him as a subordinate. The Commissioner himself made this clear when he said

'The Regional Office of Health, Education and Welfare has overruled this ruling. The Department must therefore reverse itself.'

We infer from this that the appellant erroneously, though in good faith, felt the issue as to the applicable law was completely closed and that he lacked authority to reexamine the law and exercise his own judgment.

Based upon our conception of the relationship between appellant Commissioner and the Regional HEW Officer, we find that the mere fact that the AFDC payments were terminated solely on the basis of the Regional Commissioner's letter, rendered the 'fair hearing' preceding the termination an empty exercise violative of the 'minimal requirements of administrative 'fair play," In Re Maine Clean Fuels, Inc., supra, and in contravention of the requirements of due process.

The basic purposes of 'fair hearings,' as described in the Public Assistance Payments Manual, appear to be the presentation of evidence for the purpose of facilitating fact-finding, and the provision of an opportunity for a recipient of assistance to present a position, pro se or through counsel, on eligibility questions, agency interpretations of the law, or modification, suspension or discontinuance of assistance payments entirely. Public Assistance Payments Manual, Chap. I, Sec. C, p. 1.

The hearing in question here, by virtue of the circumstances which occasioned its being called, could not have satisfied any of these ends.

Appellee's opportunity to defend her position was no opportunity at all.

The facts and circumstances surrounding her case were already settled when the Fair Hearing Officer was appointed by appellant Commissioner.

The decision on the matter was formulated before...