Ryan v. Shea

• Decision Date: 30 October 1975
• Docket Number: Nos. 74-1517,75-1095,s. 74-1517
• Citation: 525 F.2d 268
• Parties: Joanne D. RYAN et al, Plaintiffs-Appellees, v. Con. F. SHEA, Executive Director of the Colorado Department of Social Services, et al, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 268

525 F.2d 268

Joanne D. RYAN et al, Plaintiffs-Appellees, v. Con. F. SHEA, Executive Director of the Colorado Department

of Social Services, et al, Defendants-Appellants.

Nos. 74-1517, 75-1095.

United States Court of Appeals, Tenth Circuit.

Argued May 1, 1975.

Decided Oct. 30, 1975.

Brian Jeffrey, Colorado Rural Legal Services, and John R. Holland, Southwest Valley Legal Services, Denver, Colo. (Jon S. Nicholls and Tucker K Trautman, Legal Aid Society of Metropolitan Denver, Carolyn Lievers, East Denver Legal Services, and Betty L. Nordwid, Arapahoe County Legal Services, Denver, Colo., on the briefs), for plaintiffs-appellees.

Harry R. Silver, Atty., Dept. of Justice (Carla A. Hills, Asst. Atty. Gen., James L. Treece, U.S. Atty., Robert K. Kopp and David M. Cohen, Attys., Dept of Justice, on the briefs), for defendants-appellants.

Before HILL, SETH and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

This is a class action brought on behalf of individuals who began receiving Aid to the Needy Disabled benefits from the State of Colorado after July 1973, and were thereafter determined to be ineligible for benefits under the federal Supplemental Security Income program which supplanted Colorado's program for the needy disabled in January 1974. The district court entered a preliminary injunction which, among other things, enjoined the federal defendants from withholding benefits to the individual plaintiffs, and the members of the class, until they were given notice and an opportunity for an evidentiary hearing prior to any termination of such benefits. This preliminary injunction was later made permanent. In these two appeals which have been consolidated the federal defendants now appeal both the granting of the preliminary injunction and the order making such injunction permanent. ¹

In October 1972 Congress repealed the categorical assistance program (Title XIV of the Social Security Act) of federal grants to state-administered disability assistance programs. At the same time Congress established in Title XVI of the Social Security Act a program identified as Supplemental Security Income for Aged, Blind and Disabled (SSI) which was to become effective in January 1974. Under this program the federal government was to administer the program and it assumed the burden of providing benefits to those needy persons who were disabled as defined in the Act.

As a part of the definition of disability, Congress included a "grandfather" clause whereby persons receiving disability benefits from a state program as of December 1973 would be conclusively presumed to meet federal standards. We would note parenthetically that this particular provision suggests that the federal program was in one sense, at least, a continuation of the old federal-state program. In any event, as indicated, in Colorado the state plan was called Aid to the Needy Disabled (AND).

Because of the conduct of certain states where persons of doubtful disability status were being switched from state welfare rolls to state disability rolls in anticipation of the federal take-over in January 1974, Congress, on December 31, 1973, modified the aforesaid grandfather clause to provide that in order to qualify for federal payments not only must the individual have received benefits in December 1973, but must also have received such state benefits for at least one month prior to July 1973. 42 U.S.C. Sec. 1382c(a)(3)(E).

As indicated, then, on January 1, 1974, the federal government for all practical purposes took over the payments of benefits to the needy disabled. Those individuals who were receiving AND benefits from the State of Colorado as of December 1973, and who had also received AND benefits for at least one month prior to July 1, 1973, were conclusively presumed to meet federal standards and commenced to receive SSI benefits. The instant case is concerned with those individuals who were receiving state AND benefits in December 1973, but who had commenced receiving state AND benefits after July 1973.

The last minute amendment to the grandfather clause by Congress on December 31, 1973, caused many problems not the least of which was the one cast on those who began receiving disability benefits between July 1, 1973, and December 31, 1973. Prior to the amendment a person receiving such benefits as of December 1973 was conclusively presumed to meet federal standards and thus entitled to SSI benefits. After the amendment a person receiving such benefits as of December 1973 was conclusively presumed to meet federal standards only if he had also been receiving these benefits for at least one month prior to July 1973. The problem facing the Secretary was what to do about those who commenced receiving benefits under a state plan between July and December 1973. In order to avoid possible harshness and to allow time in which to resolve obvious administrative difficulties, the Secretary under existing powers ordered that SSI benefits be paid to all persons who commenced receiving state benefits between July and December 1973 for a period up to three months upon a basis of so-called presumptive disability. 42 U.S.C. Sec. 1383(a)(4)(B). It was apparently the hope, at least, that a determination of eligibility for continued SSI benefits could be made within that three-month period. When it became evident that such was not a sufficient time to process such cases, Congress, recognizing that the abrupt suspension of such benefits could indeed be harsh, provided that pending determination of eligibility under SSI, the Secretary could continue to pay presumptive benefits until the end of 1974. Pub.L.No. 93-256, Sec. 1 (Mar. 18, 1974). The enactment made it clear, however, that once the Secretary determined that a person was not eligible for SSI benefits, the benefits based on presumptive disability would be immediately discontinued.

In Colorado, as elsewhere, the Secretary, in determining whether a person who commenced receiving state AND benefits after July 1, 1973, was eligible for federal SSI benefits, made his determination upon the basis of a paper review of the records maintained under the state's disability assistance program. If the Secretary determined from the paper review that a person was ineligible for federal SSI benefits, the presumptive benefits were terminated, and the individual was not given notice or afforded a hearing before such termination. However, following the initial determination of ineligibility, the individual was afforded an opportunity to a full rehearing on the question of eligibility, which included an evidentiary hearing. The heart of the present controversy is whether the individual plaintiffs, and the class they represent, all of whom commenced receiving state AND benefits after July 1, 1973, were entitled to notice and a hearing before the benefits they were receiving on the basis of presumptive disability could be terminated. Before reaching that issue we would first look at the jurisdictional issue raised by the federal defendant.

I. JURISDICTION

The trial court found jurisdiction against the federal defendants under both 28 U.S.C. Sec. 1361 (Mandamus) and 5 U.S.C. Sec. 702 (Administrative Procedures Act). The federal defendants contend first that the trial court erred in finding subject matter jurisdiction. Counsel in effect concedes that under our relatively recent case of Bard v. Seamans, 507 F.2d 765 (10th Cir.1974), the trial court did have jurisdiction under the Administrative Procedure Act. It is suggested that we now reexamine Bard v. Seamans, and reverse our position on the matter. This we decline to do.

Additionally, it would appear that there is jurisdiction under 28 U.S.C. Sec. 1361. See, for example, Martinez v. Richardson, 472 F.2d 1121 (10th Cir.1973), where it was held that a federal district court had jurisdiction under Sec. 1361 to grant injunctive relief against the Secretary of Health, Education and Welfare in order to prevent the termination of certain home health care benefits provided to the elderly under the Medicare program. See also Knuckles v. Weinberger, 511 F.2d 1221 (9th Cir.1975), where the Ninth Circuit held that a federal district court had jurisdiction under Sec. 1361 to grant mandamus relief and the court there enjoined the ex parte suspension of social security payments without affording proper notice and a prior evidentiary hearing. The foregoing authorities in our view indicate quite clearly that the federal district court in the instant case had jurisdiction under 28 U.S.C. Sec. 1361.

The Secretary has by supplemental brief drawn our attention to the recent case of Weinberger v. Salfi, 422 U.S. 740, 95 S.Ct. 2457, 45 L.Ed.2d 522 announced June 26, 1975. Our reading of that case indicates to us that it does not control the present proceeding. ' Salfi was concerned with the denial of a claim for mother's and child's insurance benefits to surviving wives and stepchildren and it was in such setting that the Supreme Court held that the federal district court did not have jurisdiction under 28 U.S.C. Sec. 1331, though it did have jurisdiction under 42 U.S.C. Sec. 405(g) was the exclusive method of reviewing such decisions of the Secretary. In the instant case we are not concerned with the denial of a claim as such, but with the determination by the Secretary to terminate disability benefits in an allegedly unconstitutional manner, i.e., without notice and hearing.

If the federal district court in the instant case did not have jurisdiction, then the plaintiffs are really without a remedy for their particular problem. Their only recourse would be to demand the evidentiary hearing to which they are entitled after the termination of benefits, and whether they are eventually granted benefits, or finally denied the benefits sought, in either event they would have lost their right to a determination as to whether they are entitled to a continuation of their presumptive...