Rochester v. Baganz

• Citation: 365 F. Supp. 179
• Decision Date: 01 October 1973
• Docket Number: Civ. A. No. 4265.
• Parties: Aldine ROCHESTER, Individually and on behalf of her minor child; Rose Gibson, Individually and on behalf of her seven minor children; Individually and on behalf of all others similarly situated, Plaintiffs, v. Herbert M. BAGANZ, Secretary of Health and Social Services, Individually and in his official capacity; and Jack B. White, Director of Social Services, Individually and in his official capacity, Defendants, Third Party Plaintiffs, v. Elliot L. RICHARDSON, United States Secretary of Health, Education and Welfare and John D. Twiname, Administrator, Social and Rehabilitation Service, United States Department of Health, Education and Welfare, Third Party Defendants.
• Court: U.S. District Court — District of Delaware

365 F. Supp. 179

Aldine ROCHESTER, Individually and on behalf of her minor child; Rose Gibson, Individually and on behalf of her seven minor children; Individually and on behalf of all others similarly situated, Plaintiffs, v. Herbert M. BAGANZ, Secretary of Health and Social Services, Individually and in his official capacity; and Jack B. White, Director of Social Services, Individually and in his official capacity, Defendants, Third Party Plaintiffs, v. Elliot L. RICHARDSON, United States Secretary of Health, Education and Welfare and John D. Twiname, Administrator, Social and Rehabilitation Service, United States Department of Health, Education and Welfare, Third Party Defendants.

Civ. A. No. 4265.

United States District Court, D. Delaware.

October 1, 1973.

John H. McDonald, Asst. U. S. Atty. and Ralph F. Keil, U. S. Atty., Wilmington, Del., and Susan Engelman, Dept. of Justice, Washington, D. C., for third party defendants.

Peter M. Siegel, Community Legal Aid Society, Inc., Wilmington, Del., for plaintiffs.

Kent Walker, State Sol., Wilmington, Del., for defendants, third party plaintiffs.

OPINION

STEEL, Judge:

The nature of this action is described in this Court's Opinion of January 14, 1972:

"Plaintiffs are eligible for public assistance under the Aid to Families with Dependent Children Program (AFDC). This program was established by the Social Security Act of 1935, 42 U.S.C. § 601, et seq. and has been adopted in Delaware. 31 Del.C. § 321 et seq. The defendants initially were Albert L. Ingram, Jr., Secretary of the Delaware Department of Health and Social Services, 31 Del.C. § 109, who had management and supervisory responsibilities of that Department, and John Hiland, the Director of the Division of Social Services in Delaware. They were each sued in their official and individual capacities.¹ On October 27, 1971, as a result of conferences among defendants and Governor Peterson, it was determined that public assistance payments under AFDC to plaintiffs and other members of the class on whose behalf the action has been brought footnote omitted should be reduced by 11.7 per cent, effective November 1, 1971, below the amounts theretofore paid to them under the same conditions of eligibility."

This course of action was adopted because the state authorities concluded for the first time that a continuation of the assistance payments at the rates originally determined would exhaust the funds then available for the purpose several months prior to the expiration of the fiscal year for which they had been appropriated.

The plaintiffs' suit purported to confer federal jurisdiction under 28 U.S.C. § 1343, to redress alleged civil rights violations under 42 U.S.C. § 1983.² The suit originally attacked the legality of the reduction in benefits as having been taken without providing plaintiffs with prior notice as allegedly required by federal regulations, the State Public Assistance Manual and the Due Process clause of the Fourteenth Amendment of the United States Constitution.

Plaintiffs' application for a preliminary injunction and a direction by the Court that defendants issue supplemental checks for the 11.7 per cent reduction was denied for the reasons stated in the Opinion of January 14, 1972. Subsequently, largely for the same reasons, the action was dismissed pursuant to an Opinion dated April 18, 1972.

The earlier decisions of this Court dealt, inter alia, with 45 C.F.R. § 205.10(a)(5), promulgated under the Social Security Act, § 401, 42 U.S.C. § 601. This required that state or local agencies give timely and adequate notice to welfare recipients when they proposed to take action to terminate, suspend or reduce assistance under the Aid to Families with Dependent Children Program (AFDC) and the parallel provisions of the Delaware Public Assistance Manual. This Court concluded, however, that § 205.10(a)(5) did not apply to an across-the-board percentage reduction by a state agency when taken to keep expenditures under the program within the limits of the available state funds appropriated for the purpose. The Court of Appeals reversed this decision in Rochester v. Baganz, 479 F.2d 603 (3rd Cir. 1973) and held that the District Court had erred in construing the notice provision in 45 C.F.R. § 205.10 to be inapplicable to across-the-board reductions. It directed that further proceedings be taken by this Court to determine the appropriate relief plaintiffs should receive, a subject to which the Court of Appeals declined to address itself.

Following remand the defendants filed a motion for partial summary judgment upon the ground that the Court lacked jurisdiction to grant plaintiffs' claim for retrospective monetary relief against the State of Delaware and upon the further ground that the Eleventh Amendment entitled the defendants to such judgment as a matter of law.

Motion of Third Party Plaintiffs (Defendants) to Vacate Order Dismissing the Third Party Complaint

Prior to the appeal, the third party plaintiffs (defendants) filed a third party complaint against Elliott L. Richardson, the United States Secretary of Health, Education and Welfare, et al., and argued that if the action by plaintiffs against the third party plaintiffs (defendants) should be successful, this would be the direct consequence of the latter's failure to give notice as required by 45 C.F.R. § 205.10(a)(5). From this premise the third party plaintiffs argued that the liability of the third party defendants to the third party plaintiffs should be recognized by the entry of a judgment by this Court declaring that § 205.10(a)(5), the notice regulation, was unauthorized, unenforceable, and in violation of the Social Security Act. By order dated May 15, 1972, this Court granted the motion of the third party defendants to dismiss the third party complaint because the premise on which it was based, namely the possible success by the plaintiffs in the action against the third party plaintiffs (defendants) did not eventuate. No appeal was taken from this order.

Now, the Court of Appeals having reversed the decision of this Court which dismissed the main action, the third party plaintiffs (defendants) have moved under F.R.Civ.P. 60(b)³ to vacate the order of May 15, 1972, dismissing the third party complaint so that this Court may hear the third party complaint on its merits.

The difficulty with the position of the third party plaintiffs is that the Court of Appeals in this very case has held that 45 C.F.R. § 205.10(a)(5) was within the broad rule making authority granted to the Secretary under the Social Security Act and rejected the argument of the third party plaintiffs to the contrary. See 479 F.2d at 606-607. For this reason, this Court in its discretion has decided to deny the Rule 60(b) motion.

Relief to be Granted in the Main Action

At a conference of the parties held subsequent to remand, plaintiffs sought (1) a monetary judgment against the State of Delaware in favor of the class whose November payments had been improperly reduced by 11.7 per cent, the amount of the reduction being estimated to be approximately $40,000, and (2) a declaratory judgment that the advance notice of the proposed reduction was not adequate in that it failed to meet either the timeliness or the form requirements of the regulations. Claims for any other relief were waived.

The jurisdiction of this Court, as alleged in the complaint, purports to rest solely upon the civil rights provisions of the statute, 28 U.S.C. § 1343 and 42 U. S.C. § 1983. (Complaint ¶ 4). The theory that the action is supportable under pendent jurisdiction was advanced for the first time in plaintiffs' brief in support of their motion for a preliminary injunction, and at page 2 of its Opinion of January 14, 1972, this Court asserted, erroneously it now appears, that jurisdiction existed both under the Civil Rights Act and as a matter of pendency. Whether or not in fact pendent jurisdiction existed was discussed neither by this Court nor by the Court of Appeals.

Proper analysis of the jurisdictional question requires that the case be considered (1) insofar as it is directed against the defendants in their official capacities, and (2) against the defendants in their individual capacities.

The Action Against Defendants In Their Official Capacities

As officials of the State of Delaware the defendant Ingram was Secretary of Health and Social Services and the defendant Hiland was Director of Social Services. Inasmuch as plaintiffs seek a money award under § 1983 from these defendants in their official capacities as officers of the state, the suit is in actuality one against the state even though the state is not named as a defendant. Hahn v. Ingram, 362 F.Supp. 982 (D.Del.1973); O'Brien v. Galloway, 362 F.Supp. 901 (D.Del.1973); Francis v. Davidson, 340 F.Supp. 351, 370 (D. Md.) (Three-Judge Court), aff'd 409 U. S. 904, 93 S.Ct. 223, 34 L.Ed.2d 168 (1972); Bennett v. Gravelle, 323 F. Supp. 203, 211 (D.Md.), aff'd 451 F.2d 1011 (4th Cir. 1971), cert. dismissed 407 U.S. 917, 92 S.Ct. 2451, 32 L.Ed.2d 692 (1972); Westberry v. Fisher, 309 F.Supp. 12, 18 (D.Me.1970). The Francis and Westberry cases, like the instant one, involved, inter alia, claims for retroactive payments from the state treasury which allegedly had been wrongfully withheld under the AFDC program by officials of the state. On their face they are squarely applicable to the instant case and require this suit to be regarded as one to recover monies from the treasury of the State of Delaware regardless of whether the funds which plaintiffs seek are designated damages, reimbursements, or contractual payments. In either case the effect on the treasury is the same.

Numerous Third Circuit cases have held that a state is not a "person" who can be sued under the Civil Rights Act. E. g., Meyer v. New Jersey, 460 F.2d 1252 (3rd Cir. 1972); United States ex rel. Foreman v. New Jersey, 449 F.2d 1298 (3rd Cir. 1971); ...