Rochester v. Ingram

Decision Date14 January 1972
Docket NumberCiv. A. No. 4265.
Citation337 F. Supp. 350
PartiesAldine 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. Albert L. INGRAM, Jr., Secretary of Health and Social Services and John Hiland, Director of Social Services, Defendants.
CourtU.S. District Court — District of Delaware

John S. Grady, Wilmington, Del., for plaintiffs.

Kent Walker, Deputy Atty. Gen., Wilmington, Del., for defendants.


STEEL, District Judge.

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 are Albert L. Ingram, Jr., Secretary of the Delaware Department of Health and Social Services, 31 Del.C. § 109, who has management and supervisory responsibilities of that Department, and John Hiland, the Director of the Division of Social Services in Delaware. 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 brought1 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 suit was brought under the Civil Rights Act, 42 U.S.C. § 1983, and attacks the legality of the reducing action as having been taken without providing plaintiffs with notice as allegedly required by the Federal Regulations, State Public Assistance Manual and the Due Process clause of the Fourteenth Amendment of the United States Constitution. Jurisdiction exists both under 28 U.S.C. § 1343 and pendent jurisdiction. Rosado v. Wyman, 397 U.S. 397, 402-405, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970).

The case is before the Court upon the motion of plaintiffs, filed November 12, 1971, for a preliminary injunction directing defendants to issue supplemental checks to compensate plaintiffs for the 11.7 per cent reduction in November.2 The motion alleges that by reason of the regulatory and constitutional violations plaintiffs and members of their class have suffered and will continue to suffer irreparable harm until they are paid the amounts by which their public assistance checks have been reduced by reason of the defendants' action. The motion is before the Court upon the verified complaint, unverified answer, affidavits, and deposition of A. Roke Lieberman, Assistant Director of Payments of the Delaware Division of Social Services, and has been briefed and argued.

In Bowers v. Columbia General Corporation, 336 F.Supp. 609 (D.Del.1971), Judge Stapleton identified the criteria relevant to the issuance of a preliminary injunction as follows:

When an application for a preliminary injunction is made, the moving party has the burden of showing that he is entitled to the relief sought based upon the following criteria: "(1) irreparable harm to ... the moving party, absent such stay; (2) absence of substantial harm to other interested parties; (3) absence of harm to the public interest; (4) a likelihood that ... the moving party prevail on the merits." Winkleman v. New York Stock Exchange, 445 F.2d 786 (3rd Cir. 1971); Nelson v. Miller, 373 F.2d 474 (3rd Cir. 1967); Babcock v. Local Board No. 5, 321 F. Supp. 1017 (D.Del.1970).3

The nature of the AFDC program is described in King v. Smith, 392 U.S. 309, at pages 313, 316-317, 88 S.Ct. 2128, at pages 2131, 2133, 20 L.Ed.2d 1118 (1968) as follows:

"The AFDC program is one of three major categorical public assistance programs established by the Social Security Act of 1935.... The category singled out for welfare assistance by AFDC is the "dependent child," who is defined in § 406 of the Act, 49 Stat. 629, as amended, 42 U.S.C. § 606 (a) (1964 ed., Supp. II), as an age-qualified "needy child ... who has been deprived of parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a parent, and who is living with" any one of several listed relatives.
* * * * * *
The AFDC program is based on a scheme of cooperative federalism. See generally Advisory Commission Report, supra, at 1-59. It is financed largely by the Federal Government, on a matching fund basis, and is administered by the States. States are not required to participate in the program, but those which desire to take advantage of the substantial federal funds available for distribution to needy children are required to submit an AFDC plan for the approval of the Secretary of Health, Education and Welfare (HEW). 49 Stat. 627 (1935), 42 U.S.C. §§ 601, 602, 603 and 604. See Advisory Commission Report, supra, at 21-23. The plan must conform with several requirements of the Social Security Act and with rules and regulations promulgated by HEW. 49 Stat. 627, as amended, 42 U.S.C. § 602 (1964 ed., Supp. II). See also HEW, Handbook of Public Assistance Administration, pt. IV, §§ 2200, 2300 (hereafter cited as Handbook)."

The following facts are undisputed:

There has been established by the State Treasurer, acting pursuant to 31 Del.C. § 121 (Supp.1968) a Public Welfare Fund and within that fund a separate account for the AFDC public assistance program. The Delaware General Assembly has appropriated $4,150,000 to the account for the "fiscal year July 1, 1971 ending June 30, 1972". 58 Del.Laws, Ch. 182 § 1, pp. 1, 16, approved July 1, 1971. This sum, less $100,000 transferred with the approval of the Director of the Budget to an AFDC training program, is the only money appropriated available for AFDC benefits. This appropriation was made without specifying the percentage of the standard of need at which recipients were to be paid. As a result, the Department of Health and Social Services of Delaware determined, solely on the basis of the amount of funds available, to pay benefits for the months of July, August, September and October 1971 at 60 per cent of the standard of need.

At 60 per cent level of need, $2,192,022 were paid in AFDC benefits during the first third of the fiscal year. This was 54.1 per cent of the total amount of $4,150,000 appropriated for the entire fiscal year.

The level of benefits was therefore reduced, effective November 1971, from 60 to 53 per cent, or approximately 11.7 per cent. The reduction applied to all AFDC recipients in equal degree. Although there were, as there are every month, other adjustments made in individual cases where a change of eligibility had occurred, the 11.7 per cent adjustment was totally unrelated to eligibility for benefits.

On October 27, 1971 notices were sent to plaintiffs and members of their class by the defendant Hiland which read:



October 27, 1971

The Division of Social Services must adjust your assistance grant effective November 1971. This grant adjustment is a policy change necessitated by the limitation of available funds and to correct an error made in September. You have the right to appeal and have a Fair Hearing; you may be represented by legal counsel or anyone of your choice; you have a right to an informal conference with our Division which in no way affects your right to a formal hearing. Contact your worker if you wish to appeal.

John E. Hiland, Jr. Director "

This notice was received by plaintiffs on October 29, 1971.

On November 6, 1971 plaintiffs received their public assistance checks for the month of November which reflected the 11.7 per cent reduction.

The Federal Regulation entitled "Fair Hearings" provides in part, 45 C.F.R. § 205.10(a) (5):4

(5) In cases of any proposed action to terminate, suspend or reduce assistance:
(i) The State or local agency will give timely and adequate advance notice detailing the reasons for the proposed action, Under this requirement:
(a) "Timely" means that the notice is mailed at least 15 days before the action is to be taken.
(b) "Adequate advance notice" means a written notice that includes details of reasons for the proposed agency action, explanation of the individual's right to conference, his right to request a fair hearing and the circumstances under which assistance is continued if a fair hearing is requested.

If section 205.10(a) (5) has application to the 11.7 per cent reduction, obviously it was not complied with. The notice was not given 15 days before action was taken, and in content the notice was defective since it failed to state the circumstances under which assistance would be continued if a fair hearing were requested. Defendants, however, deny the applicability of the regulation to the present reduction.

The purpose of the 15 days notice requirement of the regulation is to enable a welfare recipient to seek an informal agency conference to show, among other things, that "the proposed action is incorrect", section 205.10(a) (5), (ii), and if satisfaction is not obtained, then to request a "fair hearing" within the advance notice period, section 205.10(a) (5), (iii) (a).5 The regulation discloses, at least by implication, that an AFDC recipient is entitled to a hearing only when the reduction is due to "state agency policy" or is "one of fact or judgment relating to the individual case." See section 205.10(a) (5), (iii) (a) (1).

Plaintiffs do not challenge the reduction because of a question of fact or judgment relating to their particular cases. Nor was the reduction made as a result of "state agency policy" within the meaning of section 205.10.

The meaning of "state agency policy" is illuminated by the release of the Federal Social and Rehabilitation Service dated February 13, 1971, which was issued simultaneously with the publication of section 205.10 in...

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