Schmidt v. State

• Decision Date: 13 November 1998
• Docket Number: No. S-97-302,S-97-302
• Citation: 255 Neb. 551,586 N.W.2d 148
• Parties: Jean SCHMIDT, as guardian and next best friend of Patricia Schmidt, a minor child, Appellant, v. STATE of Nebraska, Department of Social Services, Appellee.
• Court: Nebraska Supreme Court

Page 148

586 N.W.2d 148

255 Neb. 551

Jean SCHMIDT, as guardian and next best friend of Patricia Schmidt, a minor child, Appellant, v. STATE of Nebraska, Department of Social Services, Appellee.

No. S-97-302.

Supreme Court of Nebraska.

Nov. 13, 1998.

Syllabus by the Court

1. Jurisdiction: Appeal and Error. Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it.

2. Administrative Law: Statutes: Appeal and Error. To the extent the interpretation of statutes and regulations is involved, questions of law are presented, in connection with which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

3. Jurisdiction: Appeal and Error. Notwithstanding whether or not the parties raise the issue of jurisdiction, an appellate court has a duty to raise and determine the issue of jurisdiction sua sponte.

4. Administrative Law: Appeal and Error. Regarding administrative procedure related to an agency hearing, the applicable rules are those that were in effect at the time of the request for the agency hearing and when the hearing was held.

5. Administrative Law: Final Orders: Appeal and Error. The Department of Social Services director's finding and order after a hearing must be the final agency decision.

6. Administrative Law: Appeal and Error. Every applicant for any program 7. Administrative Law: Federal Acts: Adoption: States: Appeal and Error. Federal statutes and federal regulations governing title IV-E of the Social Security Act adoption assistance program require the states to provide an opportunity for a fair hearing before the state agency that administers the program.

that the Department of Social Services administers has the right to appeal any action, inaction, or failure to act with reasonable promptness with regard to assistance or services to the department's director for a fair hearing.

8. Administrative Law. Department of Social Services regulations do not provide the department the authority to initially determine eligibility at a hearing before the department's director.

9. Administrative Law: Federal Acts: Adoption. Department of Social Services regulations and federal law do not provide the department the authority to simultaneously make both an initial and a final determination of an applicant's eligibility for adoption assistance under title IV-E of the Social Security Act.

10. Administrative Law. Properly adopted and filed agency regulations have the effect of statutory law.

11. Administrative Law. Regulations bind the agency that promulgated them just as they bind individual citizens, even if the adoption of the regulations was discretionary.

12. Administrative Law: Waiver. Regulations governing procedure are just as binding upon both the agency which enacts them and the public, and the agency does not, as a general rule, have the discretion to waive, suspend, or disregard, in a particular case, a validly adopted rule so long as such rule remains in force.

13. Administrative Law. To be valid, an action of an agency must conform to its rules which are in effect at the time the action is taken. However, if a rule is but an aid to help the agency in its decision, rather than one that confers a procedural benefit upon a party, then the agency's action may depart from that rule.

14. Jurisdiction: Appeal and Error. When a lower court does not gain jurisdiction over the case before it, an appellate court also lacks the jurisdiction to review the merits of the claim.

Robert R. Otte and Joseph E. Dation, of Morrow, Poppe, Otte, Watermeier & Phillips, P.C., Lincoln, for appellant.

Don Stenberg, Attorney General, and Royce N. Harper, Lincoln, for appellee.

WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

CONNOLLY, Justice.

The appellant, Jean Schmidt, and her husband, Richard Schmidt, adopted a child, Patricia Schmidt, without applying for government adoption assistance. Seven years after the adoption was finalized, the appellant, on behalf of the child, requested appellee, the then Nebraska Department of Social Services (DSS), to find the child eligible for federal adoption assistance, due to her medical conditions. The DSS acting director, Gerry Oligmueller (the director), determined the child was not eligible for assistance and denied an agency review of his decision. The appellant filed an appeal with the Lancaster County District Court, which upheld DSS' denial of eligibility. The appellant timely appealed. We find that DSS' denial was invalid for failure to comply with statutory and regulatory procedure and that the district court and this court lack jurisdiction to review the merits of the appellant's claims. As a result, we vacate the district court's order and remand the cause with directions to dismiss.

BACKGROUND

The child was born on September 16, 1986. Two months later, she was treated for first- and second-degree burns on her inner thighs at St. Joseph Hospital in Omaha, Nebraska. She was released into foster care after being treated, and the Douglas County Separate Juvenile Court made the child a ward of DSS. On September 1, 1987, both of the child's birth parents relinquished their parental In October 1987, NCHS placed the child with the appellant and her husband. Medical information the appellant received regarding the child's background was basically limited to her measurements at birth, dates she learned to sit and crawl, and the fact that "[the child] does get a rash from disposable diapers." The appellant was told at placement that the child "seemed hyperactive," but representatives of NCHS told her the condition would improve with a stable environment. The child's hyperactive condition appeared to improve between the time of placement and the time the adoption was finalized. No one from either NCHS or DSS informed the appellant about existing federal or state adoption assistance programs prior to the adoption's being finalized, and the appellant was not independently aware of the assistance programs. The appellant did not apply for any government assistance prior to finalization of the adoption.

rights. On the same day, the juvenile court placed the child in the custody of the Nebraska Children's Home Society (NCHS) and relieved DSS of all responsibility.

The child's behavioral development was slow. Her allergies, hyperactivity, and behavioral problems led the appellant to quit her full-time job in 1991 to care full time for the child. The child was diagnosed with reactive attachment disorder in 1992. She received 2 months of inpatient therapy and continues to receive therapy for that disorder. She was diagnosed with a seizure disorder in 1992, which continues to cause her sleep difficulties. She was diagnosed with attention deficit hyperactivity disorder in 1993. The appellant stated that by May 1995, the expenses incurred caring for the child depleted her and her husband's assets. The appellant stated that they cannot afford to enroll the child in the special school that the child's therapists have recommended.

By September 1994, the appellant confirmed through St. Joseph Hospital records, DSS records, and NCHS personnel that the child was likely neglected and possibly abused by her biological mother, that her biological mother admitted to consuming alcohol during the first trimester of pregnancy, and that her biological mother had been diagnosed with residual schizophrenia. Medical sources in the record state that the child is about 10 times more likely than a member of the general population to develop schizophrenia in her adolescence or adulthood because of her biological mother's schizophrenia.

In a letter to DSS dated May 9, 1995, the appellant requested "a fair hearing to determine [the child's] eligibility for Title IV-E adoption assistance." Title IV-E of the Social Security Act is a federal adoption assistance program administered in Nebraska by DSS. See 42 U.S.C. § 670 et seq. (1994); Neb.Rev.Stat. § 43-117.01 (Reissue 1993). DSS scheduled a hearing and docketed it as "In the Matter of the Appeal of Richard and Jean Schmidt, on Behalf of Patricia Schmidt."

At the hearing, DSS asserted that the appellant could not receive assistance because (1) state law and DSS regulations provided for assistance only for children who were wards of DSS at the time adoption was finalized, which the child was not; (2) DSS regulations required the adoption assistance agreement be completed before the adoption was finalized; and (3) DSS regulations required an assessment at the time of adoption of whether the child was a hard-to-place child with special needs. The appellant contended that (1) state law and DSS regulations in 1988 that restricted benefits to wards of DSS were in violation of federal law and (2) even though she and her husband did not apply for adoption assistance before the adoption was finalized, extenuating circumstances exist to permit consideration of the child's eligibility, specifically, because they were not informed of the adoption assistance program prior to the adoption and because they were not told about the child's and her biological mother's medical histories.

In his order, the director held that the child was not eligible for title IV-E adoption assistance because (1) she was not a ward of DSS when her adoption was finalized, as required by 474 Neb. Admin. Code, ch. 5, § 023.07 (1983) and (2) nothing in the record indicated that at the time of adoption, the child had a handicapping condition requiring a subsidy. The director further held that "there are no extenuating circumstances in The appellant filed a proceeding in the district court for Lancaster County, demanding reversal of the director's order. The district court upheld the director's order. The district court held, inter alia, that (1) the child was never made a ward of the State of...