Reser v. Califano
| Decision Date | 28 March 1979 |
| Docket Number | No. 77 4266 CV C.,77 4266 CV C. |
| Parties | Phyllis RESER et al. v. Joseph A. CALIFANO, Jr., et al. |
| Court | U.S. District Court — Western District of Missouri |
Richard Huber, Edwin H. Steinmann, Jr., Support Enforcement Unit, Div. of Family Services, Jefferson City, Mo., for plaintiffs.
Judith M. Strong, Asst. U. S. Atty., Kansas City, Mo., for defendants.
This is an action for declaratory and injunctive relief to require defendants to make available federal financial participation funds under Title IV-D of the Social Security Act, as amended, 42 U.S.C. § 651 et seq., to reimburse plaintiffs for expenditures on electronic data processing equipment and other office equipment in the offices of the circuit clerks of the 43 judicial circuits of the State of Missouri. Title IV-D was enacted for the purpose of "enforcing the support obligations owed by absent parents to their children, locating absent parents, establishing paternity, and obtaining child support." 42 U.S.C. § 651. The program contemplates federal financial assistance to state agencies implementing the child support enforcement program in their respective states. 42 U.S.C. § 655.
Plaintiffs are the Director of the Missouri Division of Family Services, the agency charged with such implementation, and Jackson County, Missouri, a body corporate and political subdivision of the State of Missouri. It is plaintiffs' contention that Title IV-D mandates federal reimbursement of "necessary expenditures" incurred in the offices of the circuit clerks for the implementation of the child support enforcement program, including expenditures for office furniture and equipment and electronic data processing equipment. Defendants' position is that federal financial participation is not available for such expenditures and is precluded by the regulations implementing the IV-D legislation, 45 C.F.R. § 304.21(b).1
Both parties move for summary judgment; defendants, in the alternative, also move to dismiss for failure to exhaust administrative remedies. As the parties have stipulated to all relevant facts and further stipulated that no issues of fact remain to be litigated, the case is in a posture for summary judgment. Fed.R.Civ.P. 56.
1. On February 11, 1977, the Regional Representative of defendants' Office of Child Support Enforcement issued a policy statement regarding the availability of federal reimbursement to courts and employees of courts for performance of child support enforcement activities under Title IV-D. The statement explained that federal reimbursement was available to a court only for certain expenditures for service of process and court filing fees, 45 C.F.R. § 304.21(b)(1), and for compensation of individuals employed by a court and performing the functions specified in 45 C.F.R. § 304.20(b)(2)-(8). The statement went on to say that 45 C.F.R. § 304.21(b) precluded reimbursement for any other court or judicial costs.
2. In a letter of July 18, 1977, plaintiff Reser asked defendants' Regional Representative whether federal financial participation would be available for the purchase of desks and typewriters to be used in Title IV-D activities in the Office of the Circuit Clerk of Jackson County, Missouri.
3. The reply of defendants' Regional Representative, on July 21, 1977, was that federal financial participation was not available under the limitation of 45 C.F.R. § 304.21(b)(3): "No other court or judicial costs are subject to Federal financial participation."
4. In a letter of July 25, 1977, plaintiff Reser asked whether federal financial participation was available for the purchase of electronic data processing equipment by a county for use by court personnel in implementing the Title IV-D child support enforcement program. Plaintiff Reser submitted an opinion of the Jackson County Counselor that title to such equipment would be in the county and not in the court, which would use the equipment on a time-sharing basis. Defendants' representative advised that the issue was not yet resolved, but that clarification was being sought from the central office.
5. On August 8, 1977, defendants' Regional Representative asked defendant Louis B. Hayes, Deputy Director of the Office of Child Support Enforcement whether federal financial would be available for expansion of the electronic data processing system used by the Circuit Court of Jackson County, Missouri.
6. On August 8, 1977, Defendant Hayes advised defendants' Regional Representative that federal funds were not available for that purpose due to the limitation in 45 C.F.R. § 304.21(b). Hayes further advised that the ultimate ownership of any computer system used by a court would reside in the political entity funding the court's operations, and that therefore the state of title of the computer system used by the court in Jackson County was irrelevant to a determination of federal financial participation.
7. By letter of September 8, 1977, defendants' Regional Representative informed plaintiff Reser that federal funds were not available under Title IV-D for the electronic data processing system of the Circuit Court of Jackson County. The reason given was the limitation contained in 45 C.F.R. § 304.21(b).
8. The defendant Secretary estimates the federal funds to which each state is entitled each calendar quarter through the submission by each state agency of a "State Agency Expenditure Projection-Quarterly Projection by Program" and a quarterly statement of expenditures made for past periods. Payments are made to each state based on this estimate.
9. As of August 7, 1978, none of the quarterly expenditure projections submitted by the State of Missouri have requested federal financial participation for costs of office equipment or electronic data processing equipment for the courts of Jackson County.
10. The State of New Jersey has claimed federal financial participation for expenses similar to those that were the subjects of plaintiffs' inquiries discussed above. New Jersey requested reimbursement for such expenses for the last two quarters of 1976 and for each quarter of 1977. Reimbursement was disallowed based on defendants' interpretation of the limitations in 45 C.F.R. § 304.21(b). New Jersey sought reconsideration of the disallowances pursuant to defendants' disallowance and reconsideration procedures in effect at the time of disallowance. As of August 7, 1978, no rulings on these requests had been made.
Defendants move to dismiss on the ground that plaintiffs have failed to exhaust their administrative remedies. The parties stipulate that plaintiffs have not requested federal funds for the expense items in question in the quarterly expenditure projections required by 45 C.F.R. § 301.15, have not had such a request disallowed, and have not requested reconsideration of the disallowance by utilizing the reconsideration procedures provided in 45 C.F.R. § 201.14 and 45 C.F.R. Part 16 (the Grant Appeals Process). Defendants thus argue that there has been neither an initial nor a final agency decision on federal financial participation for office equipment and electronic data processing equipment. Defendants contend that the Court has not been presented with a justiciable controversy and therefore has no jurisdiction and should dismiss. See Myers v. Bethlehem Ship-Building Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938).
Whether administrative remedies must be exhausted before judicial review is sought is a matter within the discretion of the courts. NLRB v. Marine & Shipbuilding Workers Local 22, 391 U.S. 418, 426 n.8, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968). It has been held repeatedly that the exhaustion of administrative remedies is not a prerequisite to judicial review if resort to the administrative remedy would amount to a futile act. Porter County Chapter of the Izaak Walton League of America, Inc. v. Costle, 571 F.2d 359 (7th Cir.), cert. denied, ___ U.S. ___, 99 S.Ct. 115, 58 L.Ed.2d 130 (1978); Seepe v. Department of the Navy, 518 F.2d 760 (6th Cir. 1975); Ogletree v. McNamara, 449 F.2d 93 (6th Cir. 1971). See City Bank Farmers Trust Co. v. Schnader, 291 U.S. 24, 54 S.Ct. 259, 78 L.Ed. 628 (1934). After a careful consideration of the stipulated facts, this Court is convinced that resort by plaintiffs to further administrative procedures would be futile and would serve only to delay the ultimate determination of the issue presented by this suit. Defendants' position regarding federal funding for administrative costs incurred by courts implementing the Title IV-D program has been made clear by the regulation promulgated by the defendant Secretary, 45 C.F.R. § 304.21(b), and by defendants' memoranda interpreting that regulation in response to plaintiff Reser's inquiries. Plaintiffs have been informed by defendants, after defendants secured a ruling from their central office, that federal financial participation is not available for the items in question. To require plaintiffs to follow the administrative request and reconsideration process at this stage, when the controversy concerns only a legal issue, would not serve the purposes underlying the doctrine requiring exhaustion of administrative remedies or the purposes of Title IV-D. The position of the disallowance and request for reconsideration of the State of New Jersey for similar equipment, stipulated by the parties, is further indication that defendants' position regarding these items is clear, and that resort to administrative processes by plaintiffs would be unavailing. Accordingly, the Court finds that it has been presented with a justiciable question and that defendants' motion to dismiss for failure to exhaust administrative remedies should be denied.
Section 455 of the Social Security Act, as amended, 42...
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