Skidgel v. Maine Dept. of Human Services
| Decision Date | 10 December 1992 |
| Docket Number | 92-1824,Nos. 92-1764,s. 92-1764 |
| Citation | 994 F.2d 930 |
| Parties | Jenna SKIDGEL, et al., Plaintiffs, Appellees, v. MAINE DEPARTMENT OF HUMAN SERVICES, Defendant, Appellee. v. Louis W. SULLIVAN, Defendant, Appellant. Jenna SKIDGEL, et al., Plaintiffs, Appellees, v. MAINE DEPARTMENT OF HUMAN SERVICES, Rollin Ives, Defendants, Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Marina E. Thibeau, Asst. Atty. Gen., and Michael E. Carpenter, Atty. Gen., on brief, for defendant-appellant Rollin Ives, Com'r, ME Dept. of Human Services.
John F. Daly, Appellate Staff, Civ. Div., Dept. of Justice, with whom Stuart M. Gerson, Asst. Atty. Gen., and Richard S. Cohen, U.S. Atty., and Robert S. Greenspan, were on brief, for third-party defendant-appellant Louis W. Sullivan, Secretary of Health and Human Services.
Frank D'Alessandro, with whom James Crotteau, Patricia Ender, and Pine Tree Legal Assistance, were on brief, for plaintiffs-appellees.
Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, and STAHL, Circuit Judge.
The Secretary of the Department of Health and Human Services (HHS) and the Maine Department of Human Services (DHS) appeal a decision of the district court invalidating and enjoining the enforcement of certain regulations and policies regarding Aid to Families with Dependent Children (AFDC), upon finding that they conflicted with the plain language of the Social Security Act, 42 U.S.C. § 601 et seq.
At issue is the application of two distinct provisions of the Social Security Act, 42 U.S.C. § 602(a)(38), covering the composition of the AFDC filing unit, 1 and 42 U.S.C. § 607(b)(1)(B)(iv), covering the deduction of unemployment compensation from an AFDC payment, 2 to a particular situation. That situation occurs where the principal wage-earner in a two-parent household becomes unemployed, and the household includes both at least one child common to the two parents and at least one child who is the stepchild of the principal earner. The stepchild[ren] of the principal earner receive AFDC, pursuant to 42 U.S.C. § 606(a), because they are deprived of parental support due to the continuous absence from the home, death or incapacity of a parent. 3 Prior to the unemployment of the principal earner, neither the principal earner nor the child[ren] common to both parents are included in the family filing unit.
Pursuant to HHS/DHS policy and regulations, once the principal earner becomes unemployed, the family filing rule requires that the principal earner and the child[ren] common to both parents be included in the filing unit, as well. 4 Such inclusion is required because the child[ren] are considered dependent under a separate provision of the statute, 42 U.S.C. § 607(a), due to the unemployment of the parent who is the principal earner. 5 According to the Secretary's interpretation of the family filing rule, the common child[ren] now meet "the conditions described in ... § 607(a)." 42 U.S.C. § 602(a)(38).
In the case of the plaintiff class, 6 the unemployment compensation received by the principal earner is then subtracted from the AFDC benefit payable to the newly-composed family filing unit. Pursuant to 45 C.F.R. § 233.20(a)(3)(ii)(B), unemployment compensation is not considered as income and does not figure into the calculation of need, but is deducted from the AFDC payment after the amount of that payment has been established. 7 This special treatment of unemployment compensation is the Secretary's interpretation and implementation of 42 U.S.C. § 607(b)(1)(B)(iv). The practical result of the HHS/DHS policies is a reduction of the AFDC payment going to families in the plaintiff class. 8
Plaintiffs brought this action against defendant Rollin Ives, Commissioner of the Maine Department of Human Services, arguing that the State was violating federal statutory standards in determining the amount of AFDC payments going to members of their class. Ives filed a third-party complaint against Louis Sullivan, Secretary of the United States Department of Health and Human Services. The case went to the district court on a stipulated record.
In a memorandum decision, the district court ruled in favor of the plaintiffs on the grounds that the HHS/DHS interpretations of both the family filing rule, 42 U.S.C. § 602(a)(38), and the provision regarding unemployment compensation, 42 U.S.C. § 607(b)(1)(B)(iv), impermissibly conflicted with the plain meaning of the statute. See Skidgel v. Ives, No. 90-0209-B, slip op. (D.Me. Jan. 2, 1992) [hereinafter Memorandum Decision]. The district court read the family filing rule to require that children defined as dependent under § 607(a) be determined financially "needy" before they could be included in the filing unit. See id. at 7. The district court also determined that § 607(b)(1)(B)(iv), by its express terms, applies only to children eligible under § 607(a) and does not reach children eligible under § 606(a). See id. at 4-5. On March 23, the court issued a final judgment enjoining the enforcement of the implicated HHS/DHS policies and regulations. See Skidgel v. Ives, No. 90-0209-B-H, slip op. (D.Me. Mar. 23, 1992) (final judgment).
Plaintiffs/appellees urge us to affirm the district court's decision. Defendants/appellants argue that the district court's reading of 42 U.S.C. § 602(a)(38) contravenes the very purpose of the rule, and draws an artificial distinction between § 606(a) children and § 607(a) children. As a result of the district court's holding, non-needy children who meet the definition of a dependent child provided in § 607(a) are not compulsorily included in the family filing unit. By contrast, the weight of federal authority requires non-needy children who meet the definition of a dependent child provided in § 606(a) to be so included. See discussion infra Part II, Section A 3. With respect to the district court's reading of § 607(b)(1)(B)(iv), it is defendants' position that the court failed to consider textual ambiguity and ultimately neglected to reconcile its reading with the family filing rule, 42 U.S.C. § 602(a)(38). For the reasons that follow, we reverse the decision of the district court.
AFDC is a cooperative federal-state program authorized by Title IV-A of the Social Security Act, 42 U.S.C. § 601 et seq. The AFDC program provides cash assistance to certain needy families with dependent children. The program is administered by the states in accordance with the Social Security Act and the regulations and directives of the Secretary of HHS. We begin with a brief explanation of the implicated statutory provisions and the regulations and policies which implement them.
In addition to meeting other eligibility requirements, families receiving AFDC must be financially needy. The main statutory provision covering need is 42 U.S.C. § 602(a)(7), which provides guidelines to state agencies for assessing the resources available to a family unit. In the paragraph which follows, 42 U.S.C. § 602(a)(8), Congress sets forth criteria for certain income that may be disregarded in the determination of need. The family filing rule, 42 U.S.C. § 602(a)(38), establishes the individuals whose resources must be considered in determining need in accordance with 42 U.S.C. §§ 602(a)(7) and (8).
Financial eligibility is determined by comparing a family unit's countable income (i.e., income remaining after disregards allowed by law) to the standard of need adopted by the State. The standard of need is "the amount deemed necessary by the State to maintain a hypothetical family at a subsistence level." Shea v. Vialpando, 416 U.S. 251, 253, 94 S.Ct. 1746, 1750, 40 L.Ed.2d 120 (1974). States assign a standard according to the size of the unit applying for AFDC. In 1990 in Maine the standard of need for a family of four was $819.00. An AFDC payment in Maine is calculated by subtracting a family unit's countable income, other than unemployment compensation received by a principal earner, from the standard of need established for the relevant family size. States are not, however, required to provide families with the full standard of need. In Maine, the maximum AFDC payment is a fixed percentage (69.4%) of the standard of need. Maine permits families to fill the "gap" between the need standard and the maximum payment standard without penalty. In other words, families with countable income below the need standard, but above the level of payment paid by the State, may still receive the maximum payment from the State. This gap has practical ramifications in the instant case because of the operation of the stepparent deeming rule, codified at 42 U.S.C. § 602(a)(31). In the case of the plaintiff class, prior to the unemployment of the principal earner the family filing unit did not include either the principal earner or the half-siblings who were not then dependent children for the purposes of the statute. See 42 U.S.C. § 602(a)(38). A portion of the stepparent's income was, however, "deemed" available to the unit, pursuant to the stepparent deeming rule. For many in the plaintiff class, the income deemed available fell within the gap permitted by the State, so that when the principal earners were employed, the AFDC benefit to the unit eligible under § 606(a) either was not affected or was only marginally affected by the deemed income.
The current AFDC statute provides for two categories of "dependent children": those defined in § 606(a), who are deprived due to the continuous absence, death or incapacity of a parent, and those defined in § 607(a), who are deprived due to the unemployment of the parent who is the principal earner. As originally enacted, AFDC was limited to the category of children defined in § 606(a). In the 1960's, Congress expanded the program to include children deprived because...
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