State of SD, Dept. of Social Services v. Madigan
| Decision Date | 12 May 1993 |
| Docket Number | 91-3022.,Civ. No. 91-3009 |
| Citation | 824 F. Supp. 1469 |
| Parties | STATE OF SOUTH DAKOTA, DEPARTMENT OF SOCIAL SERVICES, Plaintiff, v. Edward R. MADIGAN, Secretary of the Department of Agriculture; the Department of Agriculture; Betty Jo Nelson, Administrator of the Food and Nutrition Service; and the Food and Nutrition Service, Defendants. Sharon Long CROW; David Genia, Sr.; and Janet Kampshoff, Plaintiffs, v. Edward R. MADIGAN, Secretary of the Department of Agriculture, Defendant. |
| Court | U.S. District Court — District of South Dakota |
Mark W. Barnett, Atty. Gen., State of SD, Ronald D. Campbell, William J. Nevin, Karen E. Cremer, Dept. of Social Services, Pierre, SD, for State of SD, Dept. of Social Services.
Krista Helen Clark, Dakota Plains Legal Services, Mission, SD, for plaintiffs Long Crow, Genia & Kampshoff.
Thomas S. Williamson, Jr., Christina A. Spaulding, Covington & Burling, Washington, DC, David L. Zuercher, Asst. U.S. Atty., Pierre, SD, Brian Wolfman, Alan B. Morrison, Public Citizen Litigation Group, John Koch, U.S. Dept. of Agr., Victoria J. Rosenthal, Dept. of Justice, Thomas M. Gerson, Thomas Millet, U.S. Dept. of Justice, Washington, DC, for federal defendants Madigan and Dept. of Agr.
INDEX Page
I. Statutory Background 1471
A. Food Stamp Act 1471
B. Housing Act 1472
II. Factual Background 1473
III. Discussion 1474
A. Standard of Review 1474
B. The Energy Assistance Exclusion 1475
1. Plain Meaning 1475
2. Legislative History 1476
C. Review of the Secretary's Policy 1477
1. UR's Defray Both Energy and Non-energy Costs Which May
Be Separated From Each Other 1477
2. Secretary Applies Exclusion to LIHEAP Benefits 1477
3. Secretary's Policy Frustrates Congressional Policy 1478
4. Even With Due Deference, Secretary's Policy is Impermissible 1478
D. The Housing and Community Development Reauthorization Act 1478
IV. Conclusion 1479
These cases have been consolidated for disposition because they raise common questions of law and fact. The court exercises jurisdiction over this consolidated action pursuant to 28 U.S.C. § 1331. Plaintiffs challenge defendants' policy of including utility reimbursements, provided to certain low-income persons by the Department of Housing and Urban Development, as income when calculating eligibility for the receipt of food stamps. The parties to this consolidated action filed cross motions for summary judgment.1 Summary judgment properly disposes of this action since no genuine issue exists as to any material fact, and judgment may be granted as a matter of law. FED.R.CIV.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
Plaintiffs claim that the Secretary's policy of including utility reimbursements as income in the calculation of food stamp benefits violates certain sections of the Food Stamp Act, 7 U.S.C. §§ 2014(d)(1) and 2014(d)(11) (Supp.1992). Additionally, individual plaintiffs Long Crow, Genia, and Kampshoff argue that the Secretary's policy violates their Due Process rights under the Fifth Amendment to the United States Constitution. Defendants maintain that this policy violates neither federal laws nor the Constitution. In considering these cross motions for summary judgment, the court first reviews the statutory background of the relevant federal benefit programs.
The Food Stamp Act of 1977, 7 U.S.C. §§ 2011 et seq., created a "federally funded, state administered program to supplement the food purchasing power of eligible individuals." West v. Bowen, 879 F.2d 1122, 1124 (3d Cir.1989). Congress declared that the purposes of the food stamp program are "to promote the general welfare, to safeguard the health and well-being of the Nation's population by raising levels of nutrition among low-income households." 7 U.S.C. § 2011 (1985). Because "the limited food purchasing power of low-income households contributes to hunger and malnutrition," id.; Congress initiated the food stamp program to "permit low-income households to obtain a more nutritious diet through normal channels of trade by increasing food purchasing power for all eligible households." Id.
Under the food stamp program, eligible households receive coupons to purchase food from approved retail food stores. 7 U.S.C. § 2013(a) (Supp.1992). A household's eligibility to receive these coupons, or "food stamps," is determined by calculating the income resources available to the household. 7 U.S.C. § 2014 (Supp.1992). "The calculation of food stamp benefits is based on ... the relative levels of household income: the lower the income level, the more food stamps the household is entitled to receive and vice versa." Baum v. Yeutter, 750 F.Supp. 845, 847 (N.D.Ohio 1990) rev'd, 979 F.2d 438 (6th Cir.1992); see also, 7 U.S.C. § 2017(a) (Supp. 1992); and West, 879 F.2d at 1124. In calculating food stamp benefits, Congress defined household income broadly to "include all income from whatever source." 7 U.S.C. § 2014(d) (Supp.1992); see also 7 C.F.R. 273.9(b) (1992). Yet, Congress also lessened the impact of this sweeping definition of income by creating several exceptions to it. These statutory exclusions from income include, among others:
7 U.S.C. § 2014(d).
The standards for applying these income exclusions are fixed by the Secretary's issued regulations. Susan v. Scales, CA No. S91-65M, slip op. at 3 ; see generally, 7 C.F.R. § 273.9. State agencies bear the responsibility for applying these regulations by determining which households are eligible to receive food stamps, calculating the eligible households' allotments, and issuing the food stamp coupons. 7 U.S.C. § 2020 (1985 & Supp.1992). However, the state agencies do not bear the brunt of the administrative costs, since "the federal government pays for the full cost of food stamp benefits, its own administrative costs and at least 50% of eligible state administrative expenses." Massachusetts v. Lyng, 893 F.2d 424, 425 (1st Cir.1990); 7 U.S.C. § 2025(a) (Supp.1992). Thus, in their administration of the food stamp program, the states must comply with uniform, national standards for determining eligibility set by the Secretary. 7 U.S.C. §§ 2013(c) and 2014(b) (1985 & Supp.1992). "The Food Stamp Act grants the Secretary of Agriculture broad discretion to issue regulations necessary for the food stamp program's efficient administration and to define income and resource eligibility standards." Susan, slip op. at 3 (). In this consolidated action, plaintiffs challenge the Secretary's policy of refusing to apply the Food Stamp Act's exclusions from income, specifically 7 U.S.C. § 2014(d)(1) & (11), to utility reimbursements disbursed under the Housing Act.
42 U.S.C. § 1437 (Supp.1992). The Housing Act authorizes Public Housing Authorities (PHA's)2 to administer and operate housing assistance programs under contract with HUD. Id.
Pursuant to the goals of the Housing Act, the low-income tenant of a PHA pays no more than thirty percent (30%) of his monthly adjusted income to rent his unit. 42 U.S.C. § 1437a(a)(1) (1990 & Supp.1992); 24 C.F.R. § 913.107 (1992). This thirty percent ceiling is referred to as the "total tenant payment." 24 C.F.R. §§ 905.102 and 905.325(a) (1992). If the amount of the monthly rent exceeds the total tenant payment, HUD pays the difference between the rent and the total tenant payment to the PHA. 42 U.S.C. § 1437f(c) (Supp.1992). For these low-income tenants, "rent" means not only payment for shelter, but also includes "utilities and all maintenance and management charges." Id.3 Tenants of the PHA's, therefore, pay no more than 30% of their monthly income for both rent and utilities.
The amount that HUD allots to the tenants for their monthly utility expenses is the "utility allowance." 24 C.F.R. §§ 905.885, 965.470 and 965.476 (1992). Rather than tailoring the utility allowance to each individual unit, the local housing authority determines a community-wide average utility allowance. 24 C.F.R....
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