Slaughter v. Levine

• Decision Date: 02 April 1985
• Docket Number: Civ. No. 4-83-579.
• Parties: Sharon SLAUGHTER, Helen Stewart and Kathryn Jenkins, Plaintiffs, v. Leonard LEVINE, in his capacity as Commissioner of the Minnesota Department of Public Welfare, Defendant and Third Party Plaintiff, v. Margaret HECKLER, in her capacity as Secretary, United States Department of Health and Human Services, Third Party Defendant.
• Court: U.S. District Court — District of Minnesota

605 F. Supp. 1242

Sharon SLAUGHTER, Helen Stewart and Kathryn Jenkins, Plaintiffs, v. Leonard LEVINE, in his capacity as Commissioner of the Minnesota Department of Public Welfare, Defendant and Third Party Plaintiff, v. Margaret HECKLER, in her capacity as Secretary, United States Department of Health and Human Services, Third Party Defendant.

Civ. No. 4-83-579.

United States District Court, D. Minnesota, Fourth Division.

April 2, 1985.

COPYRIGHT MATERIAL OMITTED

Mary Grau, Legal Aid Society of Minneapolis, Inc., Minneapolis, Minn., for plaintiffs.

Hubert H. Humphrey, III, Atty. Gen., State of Minn., and Vicki Sleeper, Sp. Asst. Atty. Gen., St. Paul, Minn., for defendant and third party plaintiff.

James M. Rosenbaum, U.S. Atty., and Mary L. Egan, Asst. U.S. Atty., Minneapolis, Minn., Donna Morros Weinstein, Regional Atty., Dept. of Health and Human Services, Chicago, Ill., and Lewis K. Wise, Wendy Kloner, Civ. Div., Dept. of Justice, Washington, D.C., for third party defendant.

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendant's motion pursuant to Federal Rules of Civil Procedure 59(a) and 60(b) to reconsider the Court's Memorandum and Order of December 10, 1984.

FACTS

Plaintiffs in the instant action are recipients of Aid to Families with Dependent Children (AFDC) benefits who live in Minnesota. Plaintiffs brought this action on behalf of themselves and others similarly situated challenging the defendant Minnesota Department of Public Welfare's (DPW) policy regarding the receipt of lump sum income by AFDC recipients. Defendant's policy requires AFDC recipients who receive lump sum income to budget the sum for a predetermined number of months, during which time the recipient is ineligible for benefits.¹ In a Memorandum and Order dated December 10, 1984, the Court certified a class of plaintiffs² and ruled on cross motions for summary judgment which had been brought by the parties. The Court rejected plaintiffs' argument that defendant's lump sum policy violated the Social Security Act, 42 U.S.C. § 602(a)(7), or the due process or equal protection clauses of the Constitution. The Court did, however, hold that the failure to provide adequate written notice to plaintiffs of the lump sum policy constituted a violation of the federal notice regulation, 45 C.F.R. § 206.10(a)(2)(i). In order to remedy this violation, the Court ordered the defendant to prepare a written notice explaining the lump sum policy, and to send this notice to all current AFDC recipients and all applicants for AFDC benefits. Finally, the Court held that the defendant must give those members of the class whose benefits were terminated in violation of the regulation an opportunity to apply for corrective payments.

Defendant now moves the Court to reconsider its Memorandum and Order of December 10, 1984, pursuant to Fed.R.Civ.P. 59(a) and 60(b). Defendant raises a number of arguments in this motion. First, defendant contends that named plaintiff Kathryn Jenkins does not have standing to raise the notice issue. Second, defendant argues that oral notice of the lump sum rule, supplemented by written notice, would be preferable to the written notice ordered by the Court. In the alternative, defendant requests that the Court approve the proposed written notice which it has submitted to the Court. Third, defendant argues that the "notice relief" ordered by the Court, which would give class members the opportunity to apply to the defendant for corrective payments, violates the eleventh amendment. Finally, the defendant requests that the Court order the third party defendant Margaret Heckler, Secretary of the United States Department of Health and Human Services, to pay federal financial participation for any AFDC benefits paid to class members in accordance with the Court's December 10, 1984 Order.

DISCUSSION

A. Standing of named plaintiff Kathryn Jenkins

The Court allowed named plaintiff Kathryn Jenkins to intervene in this litigation on September 21, 1984, at the hearing on the parties' cross motions for summary judgment, pursuant to Fed.R.Civ.P. 24(b). Counsel for plaintiffs conceded at this hearing that the remaining named plaintiff, Helen Stewart, did not have standing to raise the regulatory and constitutional notice claims,³ and indicated that plaintiff Jenkins' intervention was designed to preserve those claims. The defendant requested an opportunity to conduct limited discovery regarding plaintiff Jenkins. The Court ordered that defendant could conduct discovery regarding Jenkins until November 15, 1984. Subsequent to the hearing, defendant served interrogatories on both Jenkins and the third party defendant. The defendant also reviewed Jenkins' welfare files, which were in the custody of Hennepin County. It is on the basis of this discovery that defendant argues that plaintiff Jenkins does not have standing to raise the notice claims on behalf of the class.

Plaintiff Jenkins applied and was found eligible for AFDC benefits in Hennepin County in November of 1982. Plaintiff's husband, who was disabled as a result of a job-related accident, had workers' compensation and social security disability claims pending at the time of the AFDC application. Plaintiff has stated in an affidavit that she advised the AFDC caseworker of these pending claims, but that she was not informed of the lump sum formula used by defendant. Plaintiff's husband received a lump sum of $5,752 on October 31, 1983. According to plaintiff's affidavit, she never received notice of the lump sum rule prior to this date. Plaintiff reported the receipt of her lump sum to Hennepin County welfare authorities on November 2, 1983; by that time, plaintiff's family had spent the entire sum on, among other things, overdue mortgage payments and car repair bills. In her affidavit, plaintiff stated that it was during a conversation with her caseworker on November 2, 1983 that she was first advised of her budgeting responsibilities under the lump sum rule.

Defendant claims that evidence obtained during discovery establishes that plaintiff Jenkins did receive notice of the lump sum rule prior to the time she received and spent the lump sum in October and November of 1983. Plaintiff was an AFDC recipient in September of 1981, when the defendant sent a letter dated September 18 to all recipients which included the following information about the lump sum rule⁴:

Lump Sum Money: When a family receives lump sum money such as an inheritance, a Social Security back payment, insurance settlement, gift, etc., the money will be deducted from the AFDC grant, whether or not it has already been spent. If the lump-sum added to other family income totals more than the AFDC maximum for that size family, the family will be ineligible for the month in which the lump sum was received (and possibly for a number of following months), whether or not the money is spent before the period of ineligibility has gone by. If the family already received an AFDC grant that month, the grant would be "recouped" by the welfare agency.

Defendant contends that plaintiff Jenkins lacks standing to raise the notice claims on behalf of the class because she received this letter. Plaintiff has submitted an affidavit in which she states that she does not remember receiving this letter.

The Court finds that plaintiff Jenkins has standing to raise the notice claims on behalf of the class, notwithstanding the fact that she may have received the September 18, 1981 letter. The Court's decision rests on two grounds. First, the description of the defendant's lump sum policy which was contained in the September 18 letter was simply inadequate. As the Court noted in its initial Memorandum and Order, "this letter merely told recipients that receipt of a lump sum may `possibly' affect their eligibility, without detailing the lump sum formula or its inflexible application...." Memorandum and Order of December 10, 1984 at 34-35; 598 F.Supp. at 1050. The defendant's letter contained neither a coherent explanation of the lump sum formula nor examples of its application. The Court finds that the letter's description of the lump sum policy is both incomplete and confusing. The fact that plaintiff Jenkins received this letter therefore does not mean that she lacks standing to raise the class notice claims.

The second ground for the Court's determination that plaintiff Jenkins has standing is that Jenkins received a lump sum subsequent to the September 18, 1981 letter which was not treated by defendant in a manner consistent with the explanation in the letter. Defendant stated in the letter that the new lump sum policy, along with a number of other changes in AFDC policy, would take effect on October 1, 1981. As a result of litigation, however, the defendant was enjoined from implementing the new lump sum policy until February of 1982. Minnesota Recipients Alliance v. Noot, 527 F.Supp. 140 (D.Minn. 1981). Individuals who received lump sum income during the period between October of 1981 and February of 1982 were evaluated under the old policy, despite what the September, 1981 letter indicated. Therefore, the lump sum was treated as income in the month received and as a resource thereafter. Plaintiff Jenkins' husband received a partial workers' compensation settlement in December, 1981 and January, 1982 that was treated in this manner. Defendant did not calculate a period of ineligibility for plaintiff as a result of this lump sum. Rather, when plaintiff reapplied for benefits in November of 1982 after her family had exhausted the lump sum, she was found eligible after providing receipts which demonstrated how the lump sum had been spent.

Plaintiff Jenkins, like other individuals who received lump sum income during the period from October, 1981 to February, 1982, could only assume that the original policy regarding lump sums was still in effect, in light of the fact that her...