Vanscoter v. Bowen, C86-1568WD.

• Decision Date: 08 February 1989
• Docket Number: No. C86-1568WD.,C86-1568WD.
• Citation: 706 F. Supp. 1432
• Parties: Pearl Jane VANSCOTER, Lori Arndt, Doris Munroe and Barbara Wilson, individually and on behalf of all others similarly situated, Plaintiffs, v. Otis R. BOWEN, Secretary of the United States Department of Health and Human Services, and Jule Sugarman, Secretary, State of Washington Department of Social and Health Services, Defendants.
• Court: U.S. District Court — Western District of Washington

706 F. Supp. 1432

Pearl Jane VANSCOTER, Lori Arndt, Doris Munroe and Barbara Wilson, individually and on behalf of all others similarly situated, Plaintiffs, v. Otis R. BOWEN, Secretary of the United States Department of Health and Human Services, and Jule Sugarman, Secretary, State of Washington Department of Social and Health Services, Defendants.

No. C86-1568WD.

United States District Court, W.D. Washington.

July 14, 1988.

On Order to Vacate or Amend February 8, 1989.

COPYRIGHT MATERIAL OMITTED

Thomas E. Ashton III, Evergreen Legal Services, Bellingham, Wash., Deborah Perluss, Evergreen Legal Services, Seattle, Wash., and Joyce Brekke, Evergreen Legal Services, Vancouver, Wash., for plaintiffs.

Dan Radin, Christine L. Currie, Asst. Attys. Gen., Office of the Atty. Gen., Seattle, Wash., for defendant Sugarman.

Robert E. Keith, Asst. U.S. Atty., Office of Gen. Counsel, Washington, D.C., for defendant Bowen.

ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

DWYER, District Judge.

Plaintiffs in this class action have moved for summary judgment declaring (1) that 42 U.S.C. § 657(b)(1) requires the state to "pass through" $50 to the plaintiffs and class members for each month of child support collected by the state while they receive income maintenance payments, and that 45 C.F.R. §§ 302.51(a) and (b) violate this requirement; (2) that 45 C.F.R. §§ 302.51(a) and (b) violate the equal protection guarantees of the Fifth and Fourteenth Amendments; and (3) that due process requires that the plaintiffs and class members be given timely and adequate notice when support payments are collected by the state. Injunctive relief is sought.

Defendants Bowen and Sugarman have filed cross-motions for summary judgment determining that the federal regulation and its state counterpart are consistent with federal law and the United States Constitution.

Having read and considered the motions and all materials submitted in support of and in opposition to them, and having heard oral argument of counsel, the court now finds and rules as follows:

I. BACKGROUND

Plaintiffs are low-income single parents of minor children who receive Aid to Families with Dependent Children ("AFDC").¹ Defendant Bowen is the Secretary of the United States Department of Health and Human Services ("HHS"); defendant Sugarman is the Secretary of the Washington State Department of Social and Health Services ("DSHS"). These agencies administer the AFCD program at the national and state levels.

As a condition of receiving AFDC, the plaintiffs and class members must assign to the State of Washington their right to collect child support. 42 U.S.C. § 602(a)(26)(A). The state Office of Support Enforcement ("OSE"), administered by defendant Sugarman, is required to enforce support obligations for the children. 42 U.S.C. § 651 et seq.² Each plaintiff and class member is entitled to receive the first $50 of child support collected by OSE, 42 U.S.C. § 657(b)(1), without it affecting the recipient's monthly AFDC benefit determination. 42 U.S.C. § 602(a)(8)(A)(vi).

HHS has promulgated a regulation interpreting 42 U.S.C. § 657(b)(1) to require the state to distribute the first $50 of child support collected only when the payment is received by OSE in the month in which it is due. 45 C.F.R. § 302.51(b).³ No pass-through distribution is made if support payments for prior months are received by OSE.⁴ The date of receipt by OSE is determinative. 45 C.F.R. § 302.51(a).⁵

Plaintiffs argue that the challenged regulation unlawfully penalizes them and their children because of circumstances beyond their control. For example, an absent parent may pay support promptly through wage assignment, but the employer may not forward the payments promptly to OSE. Or, due to a postal delay, a payment timely made may not be received by OSE until the following month. In neither case will the AFDC recipient get a pass-through payment, even though both the custodial and the absent parent have cooperated in support enforcement. Plaintiffs further argue that delays by OSE in establishing individual support enforcement plans unfairly penalize the recipients.

Plaintiffs claim that 42 U.S.C. § 657(b)(1) entitles them and the class members to receive up to $50 of each support payment received by OSE whether or not it is collected in the month in which it is due. They contend that 45 C.F.R. §§ 302.51(a) and (b) violate the plain meaning of the Social Security Act and frustrate the intent of Congress that children benefit whenever child support is collected. They argue also that the regulation violates equal protection guarantees. In addition, plaintiffs claim that the state defendant's failure to provide notice of the amount of support collected, and of how it is distributed, denies them and the class members due process of law.

II. DISCUSSION

A. Statutory Claim

A court reviewing an agency's interpretation of a statute must give effect to the intent of Congress if it is unambiguously expressed. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). Congress has provided in 42 U.S.C. § 657(b)(1), added to title IV-D of the Social Security Act as part of the Deficit Reduction Act of 1984 (DEFRA), Pub.L. 98-369, 98 Stat. 494, that

the first $50 of such amounts as are collected periodically which represent monthly support payments shall be paid to the family without affecting its eligibility for assistance or decreasing any amount otherwise payable as assistance to such family during such month.

The express language of Section 657(b)(1) — "such amounts as are collected periodically which represent monthly support payments"—entitles AFDC recipients to a $50 pass-through as to each support payment collected. Nothing in the wording of the section would limit pass-throughs to those collected in the month in which they fall due. Every court that has decided the issue to date has held that 45 C.F.R. § 302.51 violates the plain meaning of 42 U.S.C. § 657(b)(1) to the extent that it prohibits the state from passing through more than $50 in a month when it collects child support payments for more than one month. Wilcox, et al. v. Ives, 676 F.Supp. 355 (D.Me.1987), appeal pending (1st Cir. No. 88-1371, filed April 25, 1988); Beasley v. Harris, 671 F.Supp. 911 (D.Conn.1987); Humble v. Department of Public Aid, 165 Ill.App.3d 624, 116 Ill.Dec. 509, 519 N.E.2d 99 (1988).

Defendants urge the court to read Section 657(b)(1) in conjunction with 42 U.S. C. § 602(a)(8)(A)(vi), enacted at the same time. Section 602(a)(8)(A)(vi) provides that the state agency making the AFDC benefit determination

shall disregard the first $50 of any child support payments received in such month with respect to the dependent child or children in any family applying for or receiving aid to families with dependent children (including support payments collected and paid to the family under section 657(b) of this title).

The disregard allowed under Section 602(a)(8)(A)(vi), defendants say, is limited to $50 for each month in which one or more child support payments are received. They contend that this indicates Congress's intent to limit Section 657(b)(1) in the same way.

However, nothing in Section 602(a)(8)(A)(vi) compels the result urged by defendants. Even if the section were read to mean that only $50 per month in pass-throughs could be disregarded for AFDC purposes, that would not be a reason to ignore the clear statutory mandate of Section 657(b)(1), which requires that $50 be passed through out of each support payment collected.

Moreover, the language of Section 602(a)(8)(A)(vi) does not establish a congressional intent to allow only one disregard if several pass-throughs are received in one month. HHS has recognized this. In its June 9, 1988, amendment to 45 C.F.R. § 302.51(a), HHS permits multiple disregards of pass-throughs made to an AFDC recipient in one month if each support payment was timely made to a legally accountable public entity. 53 F.R. at 21644. This demonstrates that Section 602(a)(8)(A)(vi) does not limit the disregards to one $50 item per month; a fortiori, it cannot be read to limit pass-through entitlements under the clear language of Section 657(b)(1).

The federal defendant has argued in a supplemental brief that two recent House and Senate committee reports concerning bills pending in Congress support the HHS interpretation. The House bill (H.R. 1720) would amend 42 U.S.C. § 657(b)(1) by providing for pass-throughs including "the first $50 of ... a payment received in one month which was due for a prior month if it was timely made when due by the absent parent." The Senate bill (S. 1511) would amend the same section by providing for pass-throughs including "the first $50 of payments for each prior month received in that month which were made by the absent parent in the month when due...." The Senate committee report includes the following statement:

The Committee believes that this is essentially a clarifying amendment that reflects the original intent; however, the Committee is aware that differences of interpretation may exist. The Committee does not intend that an inference should be drawn from the enactment of this provision or its effective date as to the meaning of the law as previously in effect.

The House committee report includes the following statement:

The bill would clarify that the family is to receive the disregard whenever the absent parent makes a timely payment and without regard to the time it takes State agencies to process the payment.

A careful review of the proposed amendments now pending in Congress, and the committee reports, shows that they do not support defendant's position for the following reasons: (1) The Senate report says that the committee does not intend that any inference should be drawn from the proposed enactment as to the meaning of the law as it now stands; (2) it could as easily...