Wilcox v. Ives, 88-1371

• Decision Date: 13 September 1988
• Docket Number: No. 88-1371,88-1371
• Parties: Gloria WILCOX, et al., Plaintiffs, Appellees, v. H. Rollin IVES, et al., Defendants, Appellees. Appeal of SECRETARY of HEALTH and HUMAN SERVICES, Defendant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 915

864 F.2d 915

57 USLW 2420

Gloria WILCOX, et al., Plaintiffs, Appellees, v. H. Rollin IVES, et al., Defendants, Appellees Appeal of SECRETARY of HEALTH and HUMAN SERVICES, Defendant.

No. 88-1371.

United States Court of Appeals First Circuit.

Heard Sept. 13, 1988.

Decided Dec. 20, 1988.

As Amended Dec. 20, 1988.

Joyce Elise McCourt, Asst. Regional Counsel, with whom Richard S. Cohen, U.S. Atty., Portland, Me., and David R. Collins, Asst. U.S. Atty., Washington, D.C., were on brief, for defendant.

Thomas H. Kelley with whom Mary Henderson, Pine Tree Legal Assistance, Inc., Robert E. Mittel and Mittel & Hefferan, Portland, Me., were on brief, for plaintiffs, appellees.

Christopher C. Leighton, Asst. Atty. Gen., and James E. Tierney, Atty. Gen., on brief, for defendants, appellees.

Before COFFIN, BOWNES and BREYER, Circuit Judges.

BOWNES, Circuit Judge.

The Secretary of the United States Department of Health and Human Services (HHS) appeals an order of the district court which held that HHS regulation 45 C.F.R. Sec. 302.51 was invalid because it impermissibly contradicted 42 U.S.C. Sec. 657(b)(1) by prohibiting the Maine Department of Human Services (DHS) from making multiple pass-through payments to recipients of Aid To Families With Dependent Children (AFDC) when the state DHS receives two or more child support payments in a given month. We affirm.

I. BACKGROUND

As a condition for receiving AFDC benefits, the recipient must assign his or her right to child support payments to the state DHS. Federal law provides that:

The amounts collected as support by a State ... shall ... be distributed as follows:

(1) 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;

(2) such amounts as are collected periodically which are in excess of any amount paid to the family under paragraph (1) and which represent monthly support payments shall be retained by the State ...

42 U.S.C. Sec. 657(b) (emphasis added).

The dispute between the plaintiffs-appellees (AFDC recipients) and the defendant-appellant (Secretary of HHS) arises from situations where no child support payment is received by the state in one month and a multiple payment is received in another month. The Secretary's position is that the AFDC family should only receive a single $50 pass-through in such situations: no pass-through for the month in which no payment was received, and only one $50 pass-through for the month in which multiple payments were received. The AFDC recipients' position, on the other hand, is that the family is entitled to multiple $50 pass-throughs for the month in which the multiple payments were received by the state.

The HHS federal regulation in effect when the plaintiffs brought their suit, states:

(a) For the purposes of distribution under this section, amounts collected shall be treated first as payment on the required support obligation for the month in which the support was collected and if any amounts are collected which are in excess of such amount, these excess amounts shall be treated as amounts which represent payment on the required support obligation for previous months.... The date of collection shall be the date on which the payment is received by the IV-D agency or the legal entity of the State or political subdivision actually making the collection on behalf of the IV-D agency....

(b) The amounts collected as support by the IV-D agency ... shall be distributed as follows:

(1) Of any amount that is collected in a month which represents payment on the required support obligation for that month, the first $50 of such amount shall be paid to the family.... If the amount collected includes payment on the required support obligation for a previous month or months, the family shall only receive the first $50 of the amount which represents the required support obligation for the month in which the support was collected. ... No payment shall be made to a family under this paragraph for a month in which there is no child support collection.

45 C.F.R. Sec. 302.51 (emphasis added).

Plaintiffs originally filed a complaint against the State DHS in 1985 seeking an order declaring that failure to make multiple pass-through payments violated plaintiffs' rights and an order enjoining the State from failing to make such payments. The State defendant removed to federal district court and filed a third party complaint against HHS. The plaintiffs amended their complaint to add claims against the Secretary, and joined additional plaintiffs to the complaint. Defendants' motions for dismissal and for summary judgment were denied by the district court. Wilcox v. Petit, 649 F.Supp. 685 (D.Me.1986). A subsequent motion for relief from this order was also denied. Wilcox v. Petit, 653 F.Supp. 709 (D.Me.1987). A motion by plaintiffs for class certification was granted. Wilcox v. Petit, 117 F.R.D. 314 (D.Me.1987).

The class includes AFDC families where (i) the absent parent had child support payments deducted from his wages on time, but his employer forwarded the withheld wages to the Maine DHS late, (ii) the absent parent was out of state and made child support payments to an out-of-state agency on time, but that agency forwarded the payments to the Maine DHS late, (iii) the absent parent made child support payments directly to the Maine DHS on time, but the DHS improperly credited the payments, and (iv) the absent parent made either lump-sum payments or late child support payments directly to the Maine DHS.

The district court's final opinion found for the plaintiffs, holding that the Secretary's regulation Sec. 302.51 prohibiting multiple pass-through payments contradicted the federal statute Sec. 657(b)(1) and was therefore invalid. Wilcox v. Ives, 676 F.Supp. 355 (D.Me.1987). The Secretary then appealed.

II. STATUTORY LANGUAGE

A. 42 U.S.C. Sec. 657(b)(1)

Our initial analysis focuses on the statutory language itself. The relevant provision of the statute states:

[T]he 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....

42 U.S.C. Sec. 657(b)(1) (emphasis added). HHS regulation Sec. 302.51, which limits a state agency to paying only one pass-through payment in a month where multiple child support payments are collected by the home state is inconsistent with this language. A cardinal rule of statutory construction is that the words in a statute must be given their plain, ordinarily understood meaning. E.g. Perrin v. U.S., 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979). For the Secretary's position to be valid, "periodically" would have to be synonymous with "monthly," which is contrary to the plain meaning of the word. Every court that has decided this issue to date has concluded that the Secretary's interpretation of the statute is wrong. The court below reasoned as follows:

An amount which represents a monthly support payment is simply the amount of the monthly support obligation (much as "an amount that represents a year's salary" means the amount that one earns in a year ...). ... [The statute's] use of the term "collected periodically" is clearly intended to provide flexibility that would not be present if the term "collected monthly" were used. Under the interpretation offered by the Secretary in his current motion for reconsideration, "monthly support payments" would have to mean the amount received in a month rather than the amount owed, and the word "periodically" would have to be dropped from the statute and replaced with the word "monthly." This is an unreasonable interpretation of the statute.

Wilcox v. Petit, 653 F.Supp. 709, 710-711 (D.Me.1987) (emphasis added).

In Beasley v. Harris, 671 F.Supp. 911 (D.Conn.1987) the court concluded:

[The Secretary's regulation] is not consistent with either the statutory language or purpose of the Act. ... No exception to the statute [concerning the $50 pass-through] is either expressly or impliedly made for situations where more than one support payment is received in a given month. The statute quite clearly provides an additional measure of support to the AFDC family. It hardly seems consistent with that policy that an AFDC family should be penalized simply because its support payments are not paid or collected in an orderly, sequential manner.... To the extent the regulations ... seek to preclude the making of a second pass-through payment simply because two support payments are collected in the same month, they are in violation of the statute.

Id. at 918-919 (emphasis added).

The Illinois Court of Appeals held that Sec. 657(b)(1)

unambiguously requires that a pass-through payment must be made when a child support payment is received by the State in the month after it is due ... Sec. 657(b)(1) requires that pass-through payments be made on all monthly child support amounts which are collected. The statutory language provides no exception based upon the time the child support payment is received. Moreover, the employment of the phrase "collected periodically" in the statute rather than "collected monthly" is a clear indication that Congress did not intend to establish any such exception.

Humble v. Department of Public Aid, 165 Ill.App.3d 624, 116 Ill.Dec. 509, 512, 519 N.E.2d 99, 102 (1988) (emphasis added).

The district court of the Western District of Washington held:

The express language of Sec. 657(b)(1) ... 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.

Vanscoter v. Bowen, No. C86-1568WD, slip op. at 5 (W.D.Wash. July 15, 1988) (emphasis added). See also ...