Stowell v. Secretary of Health and Human Services

• Decision Date: 03 August 1993
• Docket Number: No. 93-1254,93-1254
• Citation: 3 F.3d 539
• Parties: , Medicare&Medicaid Gu 41,784 Christine STOWELL, et al., Plaintiffs, Appellants, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 539

3 F.3d 539

42 Soc.Sec.Rep.Ser. 176, Medicare&Medicaid Gu 41,784

Christine STOWELL, et al., Plaintiffs, Appellants, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee.

No. 93-1254.

United States Court of Appeals First Circuit.

Heard Aug. 3, 1993.

Decided Sept. 10, 1993.

Patrick Ende, with whom Jack Comart and Pine Tree Legal Assistance, Augusta, ME, were on brief, for appellants.

Robin S. Rosenbaum, Atty., Civ. Div., U.S. Dept. of Justice, with whom Stuart Schiffer, Acting Asst. Atty. Gen., Washington, DC, Jay P. McCloskey, U.S. Atty., Bangor, ME, and Barbara C. Biddle, Atty., U.S. Dept. of Justice, Washington, DC, were on brief, for appellee.

Christopher C. Leighton, Deputy Atty. Gen., with whom Michael E. Carpenter, Atty. Gen., and Thomas D. Warren, Deputy Atty. Gen., Augusta, ME, were on brief, for amicus curiae State of Maine.

Before SELYA, CYR and BOUDIN, Circuit Judges.

SELYA, Circuit Judge.

Although this appeal presents an issue of first impression that requires us to navigate a complex maze of statutes and regulations, its resolution turns on the interpretation of two words in common usage. We hold, as did the court below, that the Secretary of Health and Human Services (the Secretary) permissibly concluded that the term "payment levels" as used in 42 U.S.C. Sec. 1396a(c)(1) (1988) refers to baseline payments received under the Aid to Families with Dependent Children (AFDC) program. Consequently, we affirm.

I. BACKGROUND

AFDC is a voluntary, cooperative federal-state social service program paid for by both sovereigns but administered largely by the states. See 42 U.S.C. Secs. 601-615 (1988 & Supp. III 1991); see also Doucette v. Ives, 947 F.2d 21, 23-24 (1st Cir.1991) (describing interactive nature of AFDC program). For heuristic purposes, we limit our discussion of this intricate program to the particular problem around which this case revolves.

Through AFDC, poor families receive a monthly stipend (the basic AFDC grant). The amount of the stipend varies from state to state and also varies according to family size. If a family unit has some other income, say, child support payments, most states deem this money to offset the guaranteed AFDC stipend pro tanto. Under such a regime, a dollar is subtracted from the family's basic AFDC grant for every dollar of supplemental income received. See, e.g., Hassan v. Bradley, 818 F.Supp. 1174, 1176 & n. 4 (N.D.Ill.1993) (describing methodology and identifying states which employ it).

A few states, Maine among them, take a less conventional approach to supplemental income. Up to a point, Maine permits a family to receive such income without offsetting it against the basic AFDC grant. Only when the family's aggregate income reaches a designated level--a level that Maine calls the "standard of need"--does Maine begin to shrink the basic AFDC grant in proportion to the marginal amount of supplemental income received. In the bureaucratic idiom, this phenomenon is known as "gap filling" because no offsets are made until the family's supplemental income has filled the gap between the stipendiary amount of the basic AFDC grant and the (somewhat higher) standard-of-need amount. Even then, the offset is limited to the excess of familial receipts over the standard of need. See Doucette, 947 F.2d at 23-24.

In 1991, Maine, faced with burgeoning budgetary woes, narrowed this gap by upgrading basic AFDC grants while simultaneously downgrading standards of need. This revision took effect on April 1, 1992 (after the district court lifted a temporary stay). As a result, AFDC-eligible families with relatively high amounts of supplemental income receive lower payments than before and families with little or no supplemental income receive higher payments than before. More specifically, because child support payments are collected by the state and then transmitted to AFDC recipients as supplemental income, see 42 U.S.C. Sec. 602(a)(2) (1988), Maine's reduction in the standard of need meant that certain AFDC-eligible families would receive lower overall payments from the state than they would have received prior to May 1, 1988. ¹ After the changes became effective, the Secretary continued to authorize Medicaid funding for Maine.

Although the revisions did not ruffle federal feathers, they prompted the instant suit. Seeking declaratory and injunctive relief, 5 U.S.C. Sec. 702 (1988), plaintiff-appellant Christine Stowell accused the Secretary of violating a maintenance-of-effort provision contained in the Medicare Catastrophic Coverage Act of 1988, Pub.L. No. 100-360, 102 Stat. 683. ² That provision, codified at 42 U.S.C. Sec. 1396a(c)(1) (1988), directs the Secretary not to approve any state's Medicaid plan if the state's AFDC program sets "payment levels" lower than those in effect on May 1, 1988. Refined to bare essence, Stowell's position has consistently been that the maintenance-of-effort provision prohibits the Secretary from approving state Medicaid plans if the state's AFDC payment levels are lower than those in effect on May 1, 1988; that the total amount of money Stowell and persons similarly situated currently receive from Maine is lower than the amount they would have received under the earlier (pre-May 1, 1988) rules; that, nonetheless, the Secretary did not refuse to fund Maine's Medicaid plan; and that, therefore, the Secretary violated the maintenance-of-effort provision.

The case proceeded as a class action ³ and the parties submitted it on a stipulated record. The district court asked a magistrate judge for a report and recommendation. Reasoning that Maine had not, in fact, reduced its payment levels below those in effect on May 1, 1988, the magistrate recommended that the court enter judgment for the Secretary. See Stowell v. Sullivan, 812 F.Supp. 264, 266-71 (D.Me.1993) (reproducing magistrate's report). On de novo review the court adopted the recommendation. See id. at 265-66. Plaintiffs appeal.

II. ANALYSIS

The issue is whether the Secretary's continued funding of Maine's Medicaid plan, despite the state's decision to lower its standard of need, violates the maintenance-of-effort provision. ⁴ We have repeatedly urged that, when a nisi prius court handles a matter appropriately and articulates a sound basis for its ruling, "a reviewing tribunal should hesitate to wax longiloquent simply to hear its own words resonate." In re San Juan Dupont Plaza Hotel Fire Litig., 989 F.2d 36, 38 (1st Cir.1993). Because we are in substantial agreement with Magistrate Judge Cohen's thoughtful disquisition, see Stowell v. Sullivan, 812 F.Supp. at 266-71, we invoke this principle and confine ourselves to a few decurtate observations.

First: Whenever a court is charged with statutory interpretation, the text of the statute must be its starting point. See Estate of Cowart v. Nicklos Drilling Co., --- U.S. ----, ----, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992). Here, however, the statutory language does not directly answer the question posed. It provides that:

the Secretary shall not approve any State plan for medical assistance if--

(1) The State has in effect, under its [AFDC plan], payment levels that are less than the payment levels in effect under such plan on May 1, 1988.

42 U.S.C. Sec. 1396a(c)(1). The term "payment levels," which is not defined elsewhere in the statute, could, as the Secretary claims, refer to the stipendiary amounts of basic AFDC grants; it could also, as appellants claim, refer to total income, that is, grant amounts plus supplemental income actually received. Given two plausible alternatives, and recognizing that the universe of interpretive possibilities may extend beyond them, we think the statute contains an undeniable ambiguity.

Appellants resist this conclusion. Pointing out that, in certain other contexts, Congress referred to the basic AFDC grant as the "payment standard," 42 U.S.C. Sec. 602(h) (1988), they argue that the term "payment levels" must mean something else. This argument founders. It is apodictic that Congress may choose to give a single phrase different meanings in different parts of the same statute. See Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433, 52 S.Ct. 607, 609, 76 L.Ed. 1204 (1932); Greenwood Trust Co. v. Massachusetts, 971 F.2d 818, 830 n. 10 (1st Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 974, 122 L.Ed.2d 129 (1993). It is a natural corollary of this truism that Congress, in its wisdom, may choose to express the same idea in many different ways. Cf., e.g., Cowart, --- U.S. at ----, 112 S.Ct. at 2596 (stating that Congress's eschewal of a term of art used elsewhere in the same statute, in favor of a more descriptive term, does not necessarily mean that the two terms bear different meanings). Any other interpretive rule would defy human nature and ignore common practice. Courts should go very slowly in assigning talismanic importance to particular words or phrases absent some cogent evidence of legislative intent.

Second: Appellants' attempt to score a touchdown by a selective perusal of legislative history puts no points on the board. The centerpiece of this effort is a passage evincing a congressional purpose "to assure that the resources [for Medicaid-related coverage of certain persons] are not diverted from the [AFDC] program." House Conf.Rep. No. 661, 100th Cong., 2d Sess. 145, 256, reprinted in 1988 U.S.C.C.A.N. 803, 923, 1034. But this language does not help to resolve the statute's linguistic ambiguity in appellants' favor.

For one thing, the passage, like the statute itself, leaves unaddressed the question whether Congress's underlying concern lay with all payments affecting the AFDC program or only with the stipendiary amounts of basic AFDC grants--and an ambiguous statute cannot be demystified by resort to equally ambiguous legislative history. For another thing, to the extent, if at all, that the quoted passage indicates a broad...