Ruppert v. Secretary of US Dept. of Health

• Decision Date: 09 October 1987
• Docket Number: CV 84-1253,CV 86-0603 to CV 86-0605 and CV 86-2084.,CV 84-3610,CV 85-2660,CV 84-2635,CV 85-2661 to CV 85-2666,CV 85-3379,CV 83-4512,CV 82-2678,No. CV 81-3479,CV 83-0998,CV 84-0361,CV 81-3479
• Citation: 671 F. Supp. 151
• Parties: Mary RUPPERT, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Angela MAURO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Alan GREEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Cheryl KARNETT, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Jocelyn HILL, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendant. Anthony DeFEO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Thomas FERGUSON, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Edward and Rose FAICCO, Plaintiffs, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et ano., Defendant. Margaret MORMORIS, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Olga WHITE, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Lawrence PODELL, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Matthew STONE, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Victoria SHAW, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Steven ZIMMERMAN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Sue CHAITEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Beulah and Bertie HARRIS, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Jeffrey KILMNICK, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Peter LO BRUTTO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Jacqueline FERGUSON, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant. Aaron GREEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.
• Court: U.S. District Court — Eastern District of New York

671 F. Supp. 151

Mary RUPPERT, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Angela MAURO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Alan GREEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Cheryl KARNETT, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Jocelyn HILL, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendant.

Anthony DeFEO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Thomas FERGUSON, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Edward and Rose FAICCO, Plaintiffs, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et ano., Defendant.

Margaret MORMORIS, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Olga WHITE, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Lawrence PODELL, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Matthew STONE, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Victoria SHAW, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Steven ZIMMERMAN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Sue CHAITEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Beulah and Bertie HARRIS, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Jeffrey KILMNICK, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Peter LO BRUTTO, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Jacqueline FERGUSON, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Aaron GREEN, Plaintiff, v. SECRETARY OF the UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

Nos. CV 81-3479, CV 82-2678, CV 83-0998, CV 83-4512, CV 84-0361, CV 84-1253, CV 84-2635, CV 84-3610, CV 85-2660, CV 85-2661 to CV 85-2666, CV 85-3379, CV 86-0603 to CV 86-0605 and CV 86-2084.

United States District Court, E.D. New York.

October 9, 1987.

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Robert, Huber & Lerner by Charles Robert, Hempstead, N.Y., for plaintiffs.

Andrew J. Maloney, U.S. Atty. by Peter Ginsberg, Asst. U.S. Atty., Brooklyn, N.Y., for defendant Secretary of the U.S. Dept. of Health and Human Services.

Robert Abrams, New York State Atty. Gen. by Mary Fisher Bernet, Asst. Atty. Gen., New York City, for defendant Com'r. of the N.Y. State Dept. of Social Services.

Martin Bradley Ashare, Suffolk County Atty. by Theodore D. Sklar, First Deputy Co. Atty., Hauppauge, N.Y., for defendant Com'r. of the Suffolk County Dept. of Social Services.

MEMORANDUM AND ORDER

WEXLER, District Judge.

I. INTRODUCTION

Beginning in 1981, attorney Charles Robert has filed on behalf of a number of plaintiffs a series of purportedly related actions challenging various decisions and procedures of the Secretary of the United States Department of Health and Human Services ("Secretary") regarding the awarding and calculation of benefits under the Supplemental Security Income program ("SSI"), which Congress enacted as Title XVI of the Social Security Act, 42 U.S.C. §§ 301-1397e, as a means of providing financial assistance to aged, blind, and disabled persons whose income and resources are below certain minimums. 42 U.S.C. §§ 1381-1383c. In a decision dated July 16, 1985 and amended July 17, 1985, then-District Judge Frank X. Altimari, inter alia, denied a motion to consolidate the actions pending at that time, dismissed in whole or in part several of the counts contained in the various complaints, and ordered that the cases were to proceed as separate actions and that those cases in which the claims of two or more plaintiffs were joined were to be severed for all purposes.¹ On July 17, 1985 and again on December 27, 1985, Magistrate David F. Jordan ordered each of the plaintiffs to file an amended complaint consistent with Judge Altimari's rulings.

Upon Judge Altimari's appointment to the Second Circuit Court of Appeals, these cases, which have informally come to be known as "the Ruppert cases", were assigned to this Judge, as have been many of the additional lawsuits Robert has filed on behalf of plaintiffs assertedly aggrieved by the Secretary's actions concerning the SSI program subsequent to Judge Altimari and Magistrate Jordan's orders. This Judge then referred each of the Ruppert cases before him to Magistrate Jordan for a report and recommendation as to its appropriate disposition. The Court will now consider the proper resolution of those cases as to which Magistrate Jordan has issued a report and recommendation and the time which the parties had to file any objections to the Magistrate's recommendation has elapsed.

II. STATUTORY AND REGULATORY FRAMEWORK

The common thread linking the Ruppert cases is the question of the plaintiffs' entitlement to SSI or state supplementary assistance benefits. More specifically, although the fact patterns presented by each of the individual actions vary to a greater or lesser extent, a central issue common to the cases is the question of calculation of the "income" or "resources" available to the claimant. Accordingly, before turning to the parties' arguments regarding these cases in general and the specific factual circumstances each individual case involves, the Court will briefly outline the comprehensive statutory and regulatory scheme that controls its decisions in these lawsuits.

Eligibility for SSI benefits is governed by both an individual's living situation and his available income and resources. When it established the SSI program, Congress set up different categories for eligibility based upon, among other things, whether the recipient does or does not have a spouse also eligible for SSI benefits and whether he or she lives alone or in the household of another. 42 U.S.C. §§ 1382, 1382a(a)(2); see also, e.g., 42 U.S.C. § 1382(e). The amount of benefits to which eligible individuals would otherwise be entitled, which depends upon the category into which a given individual falls, is reduced by the amount of any available income not otherwise excludable under the Social Security Act and the regulations the Secretary has promulgated under that statute. 42 U.S.C. §§ 1382(b), 1382a; 20 C.F.R. §§ 416.410-.435.

The Social Security Act characterizes "income" for SSI purposes rather expansively, declaring the term to include both earned and unearned income. While the statute limits "earned income" to wages, net earnings from self-employment, certain refunds of federal income taxes, certain advance payments by employers, and remuneration received for services performed in a sheltered workshop or work activities center, 42 U.S.C. § 1382a(a)(1), it defines "unearned income" as "all other income," including support and maintenance furnished in cash or kind, annuity, pension, retirement, or disability benefits, prizes and awards, a portion of the proceeds of any life insurance policy, gifts, support and alimony payments, and inheritances, and rents, dividends, interest, and royalties, 42 U.S.C. § 1382a(a)(2). The Secretary's regulations describe income as "the receipt by an individual of any property or service which he can apply, either directly or by sale or conversion, to meeting his basic needs," and state, "Income is anything you receive in cash or in kind that you can use to meet your needs for food, clothing, or shelter. In-kind income is not cash, but is actually food, clothing, or shelter, or something you can use to get one of these." The regulations go on to specify what constitutes earned and unearned income, and set forth how "countable income" is calculated. 20 C.F.R. §§ 416.120(c)(2), 416.1102, 416.1110-.1124. The Social Security Act and regulations also exclude various items from income for SSI purposes, such as certain earned income of students, state public assistance payments, child support payments, and medical care and services. 42 U.S.C. § 1382a(b); 20 C.F.R. §§ 416.1103, 416.1112, 416.1124.

The regulations also exclude loan proceeds from income countable for SSI purposes. 20 C.F.R. § 416.1103(f). This exclusion is particularly relevant to the litigation at bar since the Secretary's final decision in many of the Ruppert cases turned on the question of whether certain arrangements between the claimants and other persons demonstrated the existence of bona fide loans. Social Security Ruling ("SSR") 78-26, which is binding on the Secretary and the Social Security Administration ("SSA"),² defines a loan as:

an advance of money from lender to borrower where borrower has to repay, with or without interest. This applies to any commercial as well as noncommercial loan (between relatives, friends or others) that is recognized as enforceable under State law. The loan agreement may be oral or written, as long as it is enforceable under State law.

....

Where money is given and accepted on any understanding between parties, other than it is to be repaid by the receiver of the money, there is no loan involved for SSI purposes. Such money could be a gift, support payments, etc., and must be treated accordingly (i.e., as provided in rules applicable to such items).

The Ruling places on claimants the burden of proving the bona fide nature of an asserted loan agreement.³

"Resources," although not explicitly defined in the Social Security Act, is defined by the...