White Horse v. Heckler

• Decision Date: 25 October 1985
• Docket Number: Civ. No. 85-3006.
• Citation: White Horse v. Heckler, 627 F.Supp. 848 (D. S.D. 1985)
• Parties: Lavina WHITE HORSE, Suella High Elk, Yvonne Garreaux, and Susan Chiu, on behalf of themselves, their children and all others similarly situated, Plaintiffs, v. Margaret HECKLER, as Secretary of the Department of Health and Human Services; and James W. Ellenbecker, as Secretary of the South Dakota Department of Social Services, Defendants.
• Court: U.S. District Court — District of South Dakota

627 F. Supp. 848

Lavina WHITE HORSE, Suella High Elk, Yvonne Garreaux, and Susan Chiu, on behalf of themselves, their children and all others similarly situated, Plaintiffs, v. Margaret HECKLER, as Secretary of the Department of Health and Human Services; and James W. Ellenbecker, as Secretary of the South Dakota Department of Social Services, Defendants.

Civ. No. 85-3006.

United States District Court, D. South Dakota, C.D.

March 29, 1985.

Supplemental Memorandum Opinion October 25, 1985.

David W. Curtis, Yvette Hall War Bonnett, Billie Jones, Albert C. Jones, Dakota Plains Legal Services, Mission, S.D., for plaintiffs.

Janice Godtland, Asst. Atty. Gen., Dept. of Social Services, Pierre, S.D., for defendant James W. Ellenbecker, Secretary, South Dakota Dept. of Social Services.

Robert A. Mandel, Asst. U.S. Atty., Pierre, S.D., Ronald S. Luedemann, Regional Atty., Thomas A. Nelson, Jr., Deputy Regional Atty., Dept. of Health & Human Services, Denver, Colo., for defendant Margaret Heckler.

CASE SUMMARY

DONALD J. PORTER, Chief Judge.

Named plaintiffs are residents of the State of South Dakota who receive Aid to Families with Dependent Children (AFDC). 42 U.S.C. §§ 601 et. seq. They bring this action as representative members of a class comprised of all South Dakota households that have had their AFDC grants terminated, decreased, or have been denied AFDC benefits as a result of state and federal regulations promulgated under Section 2640 of the Deficit Reduction Act of 1984, Pub.L. No. 98-369, 98 Stat. 494, 1145 (to be codified as amendments to 42 U.S.C. §§ 602(a) and 657(b)). Jurisdiction is predicated upon 28 U.S.C. §§ 1331 and 1343(3) and (4).

Section 2640 requires that an AFDC assistance unit now be comprised of all coresident, minor full and half-siblings and that calculations of the unit's AFDC eligibility and level of assistance include any income already available to such sibling. Formerly, a family could choose to exclude certain children from the assistance unit and thereby exclude consideration of their income in the eligibility and grant amount determinations. Defendants have interpreted Section 2640 as mandating inclusion of the assistance unit's new members' Old Age, Survivors, and Disability Insurance (OASDI), 42 U.S.C. §§ 401 et seq., and child support income in the AFDC calculations, and have promulgated regulations to that effect. Plaintiffs challenge these regulations on the grounds that they are inconsistent with the Social Security Act and state domestic relations law as well as being constitutionally infirm. Plaintiffs seek declaratory and injunctive relief.

On February 22, 1985, this Court conditionally granted plaintiffs' motion for certification as a class action and entered a temporary restraining order enjoining defendant Department of Social Services from implementing Section 2640 so as to reduce or terminate AFDC benefits during the month of March, 1985. The necessity of expeditious handling of this action prompted the Court to set a March 18, 1985 trial date and to order that simultaneous trial briefs be submitted five days prior to trial. Plaintiffs and both defendants submitted briefs and all parties were represented at trial. The Department of Health and Human Services (HHS), however, relying on the literal language of Federal Rule of Civil Procedure 12(a), has not yet answered the complaint and would not agree to the stipulation of facts agreed to by the plaintiffs and the Department of Social Services.¹ Although this Court originally intended to decide whether or not both preliminary and permanent injunctive relief should be granted, federal defendant's failure to file a responsive pleading compels the Court to confine its decision to plaintiffs' motion for a preliminary injunction.

FACTUAL SUMMARY

As previously related, plaintiffs and defendant Department of Social Services executed a stipulation of facts on the date of trial. Although not signed by a representative of federal defendant, counsel for the HHS admitted there was very little factual dispute in this case. Transcript of Trial at 9. Further, counsel for the federal defendant had no objection to the Court's considering the stipulation as the undisputed facts for purposes of plaintiffs' preliminary injunction motion. Transcript of Trial at 15. This being the case, the Court recites the following factual summary.

Plaintiff Lavina White Horse is the mother of seven children and the grandmother of one child, all of whom reside with her. Four of plaintiffs' children are the offspring of a now deceased individual who was "insured" as defined by the Social Security Act, 42 U.S.C. § 414(a), at the time of his death. As the deceased insured's "survivors", plaintiff's four children collectively receive a monthly OASDI check for $456. Plaintiff, as representative payee for the benefit of her four children, receives the monthly check, and, according to the stipulated facts, completely exhausts the OASDI money in the support of these four children.

Plaintiff is also the mother of three other children. For herself and these three children, plaintiff receives a monthly, AFDC check in the amount of $371. Prior to October 1, 1984, (the date Section 2640 of the Deficit Reduction Act of 1984 went into effect), plaintiff's four children receiving OASDI benefits were not included in any AFDC assistance unit. Because these four children were not AFDC recipients, their Social Security income was not included in determining the needs of plaintiff and her other three children.

As a result of the federal and state regulations at issue here which implement the HHS interpretation of Section 2640, plaintiff's AFDC assistance level was cut to $83 per month. The reason for this decrease being the inclusion of the OASDI recipients' $456 per month income in determining the need of the entire household. Similarly, named plaintiffs High Elk and Garreaux are the mothers of children some of whom are receiving OASDI income, some of whom are not. All the children, according to the Deficit Reduction Act, must now be included in the plaintiffs' respective AFDC assistance units. Under the new regulations implementing the Act, and as occurred in the case of Lavina White Horse, inclusion of OASDI-recipient children in their AFDC assistance units has caused significant decreases in the amount of plaintiffs High Elk and Garreaux's AFDC assistance.

The circumstances leading to plaintiff Susan Chiu becoming a named plaintiff in this action, however, are somewhat different than the other three named plaintiffs. Plaintiff Chiu is the mother of two minor children who reside with her. One child, pursuant to a Pennsylvania state court order, is the beneficiary of $205 of child support paid monthly to plaintiff. Plaintiff and her other child previously constituted an AFDC assistance unit entitled to $286 per month. However, this AFDC grant was terminated when plaintiff, in violation of the regulations at issue in this case, refused to include her child support-recipient child in the assistance unit.

DISCUSSION

AFDC is a joint federal and state benefit program established by the Social Security Act, and designed to provide financial assistance to needy children and the parents and caretaker relatives who live with them. Categorical federal grants are available to a state provided the state submits and has approved by the Secretary of HHS a plan which defines AFDC eligibility criteria and meets the requirements of 42 U.S.C. § 602(a) and its implementing regulations. Section 2640 of the Deficit Reduction Act of 1984 amends Section 602(a) by requiring that in determining the needs of an applicant child, the state responsible for administering the AFDC program include:

(A) any parent of such child, and

(B) any brother or sister of such child, if such brother or sister meets the conditions described in clauses (1) and (2) of section 604(a), if such parent, brother, or sister is living in the same home as the dependent child, and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 205(j), in the case of benefits provided under Title II)....

Deficit Reduction Act of 1984, § 2640, Pub.L. No. 98-369, 98 Stat. 494, 1145 (to be codified as 42 U.S.C. 602(a)(38)).

Prior to the Deficit Reduction Act of 1984, as illustrated by the case histories of the named plaintiffs in this action, family members living together were not required to file for AFDC benefits as a unit. A parent filing for a dependent child could choose to include or exclude himself or other potentially eligible children from the assistance unit. Under the provisions governing inclusion of income prior to the Deficit Reduction Act income of a family member was counted only if the family member was also a member of the AFDC assistance unit.

The Deficit Reduction Act was signed into law on July 18, 1984. Defendant HHS published in the Federal Register on September 10, 1984 regulations implementing its interpretation of the Deficit Reduction Act. Interim Final Rules, Aid to Families with Dependent Children, 49 Fed.Reg. 35, 586 (to be codified at 45 C.F.R. §§ 205-06, 232-34, 238-40). The regulations, which went into effect October 1, 1984, mandate the inclusion of all income and resources,² received by persons included in the assistance unit as income to the assistance unit, notwithstanding legal restrictions on the use of that income.

Consistent with the regulations promulgated by the HHS defendant South Dakota Department of Social Services amended its regulations with the following provision:

67:12:05:57. Benefits to children and adults derived from government sources. All benefits derived from governmental sources, such as OASDI, unemployment compensation, worker's compensation, military allotments, and compensations which are actually received by applicants

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