Wynn v. Harris, 78-2151

• Decision Date: 24 July 1980
• Docket Number: 79-2767.,No. 78-2151,78-2151
• Citation: 494 F. Supp. 878
• Parties: Azzie WYNN, Plaintiff, v. Patricia Roberts HARRIS, Defendant. Scott WILSON and Savannah Wilson, Plaintiffs, v. Patricia Roberts HARRIS, Defendant.
• Court: U.S. District Court — Western District of Tennessee

494 F. Supp. 878

Azzie WYNN, Plaintiff, v. Patricia Roberts HARRIS, Defendant.

Scott WILSON and Savannah Wilson, Plaintiffs, v. Patricia Roberts HARRIS, Defendant.

Nos. 78-2151, 79-2767.

United States District Court, W. D. Tennessee, W. D.

July 24, 1980.

Donald A. Donati, Wanda S. Donati, Memphis Area Legal Services, Inc., Memphis, Tenn., for plaintiffs.

Lewis K. Wise, Shalom Brilliant, U. S. Dept. of Justice, Washington, D. C., Arthur S. Kahn, Asst. U. S. Atty., Memphis, Tenn., for defendant.

ORDER

WELLFORD, District Judge.

Plaintiffs in Wilson, husband and wife, are recipients of Supplemental Security Income (SSI) benefits. They live in a home owned by their children at no cost to themselves beyond upkeep expenses. Although plaintiffs originally contributed $1,000 to the purchase of the home, their children pay the monthly mortgage installments of $106.00, including taxes. Pursuant to 20 C.F.R. § 416.1125(d), defendant reduced the Wilsons' SSI benefits based on their alleged receipt of in-kind support and maintenance benefits amounting to the difference between the amount of rent paid by plaintiffs and the current rental value of their housing.

Plaintiffs now challenge the validity of § 416.1125, asserting that it is inconsistent with the Social Security Act and arbitrary and capricious. They additionally challenge the application of the regulation in this case as unsupported by substantial evidence. This action, which seeks declaratory and injunctive relief, was brought as a class suit, but plaintiffs have indicated that they do not intend to seek class certification.

Plaintiff in Wynn brought a similar action attacking § 416.1125. By Order of April 20, 1979, the Court held that jurisdiction was lacking as to Wynn's statutory and procedural claims because no final administrative determination had been made with respect to them. The Court exercised jurisdiction only over plaintiff's constitutional claim and certified a limited class as to this issue.

In an Order of November 28, 1979, the Court consolidated these cases. In addition, plaintiff Wynn was allowed to dismiss as to her own claims without prejudice in order to seek further administrative review. Plaintiffs in this "headless" class action now seek decertification without prejudice. In the absence of opposition to this motion, the Court has orally instructed defendant to prepare and submit an order of decertification.

Both parties in Wilson have now filed motions for summary judgment. The issues raised by these motions are whether § 416.1125(d) is a valid regulatory provision and whether the deduction made in this case was supported by substantial evidence. The Court has determined that the regulation is valid and was properly applied in this case.

Plaintiffs assert that the regulation in question is inconsistent with 42 U.S.C. § 1382a, which defines income for purposes of measuring an individual's entitlement to SSI benefits and provides for a reduction of benefits in cases in which an individual receives income "in-kind." Plaintiffs contend that the difference between the amount paid by a recipient for an in-kind maintenance item and its current market value does not constitute a benefit to the recipient.

In evaluating plaintiffs' claim that defendant has exceeded her statutory authority, the Court's task is to determine whether the regulation challenged is "reasonably related to the purposes of the enabling legislation." Mourning v. Family Publishing Services, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1661, 36 L.Ed.2d 318 (1973).

The SSI program, which was added to the Social Security Act by the Social Security Amendments of 1972, 42 U.S.C. §§ 1381 et seq., purports to provide benefits to certain individuals who are aged, blind, or disabled and whose income is below specified levels. See 42 U.S.C. §§ 1382(a), 1382(c).

Section 1382(b) prescribes the flat amount payment standard for benefits and further provides that benefits are to be reduced by the amount of income received by an individual recipient. "Income" is defined by § 1382a as both earned and unearned income and includes "support and maintenance furnished in cash or kind." Subsection (a)(2)(A) provides for a reduction in benefits in the case in which a recipient lives in the household of another and receives support and maintenance in kind from that person. In such a case, the statute creates a presumption concerning the value of such support and maintenance and prescribes that the individual's benefits shall be reduced by one-third in lieu of including the value of the support in the individual's unearned income.

The statute does not specifically address the present case in which plaintiffs live in their owned household but, at least according to defendant, receive support and maintenance from another. In this situation, 20 C.F.R. § 416.1125(d) creates a presumption that the maximum value of the support and maintenance is equal to one-third of the SSI payment standard. This presumption will be applied unless the individual establishes that the current market value of the support, less any payment the recipient makes for it, is lower than the presumed value.

The regulation was promulgated following notice and comment rulemaking pursuant to 42 U.S.C. § 1302, which directs the Secretary to "make and publish such rules and regulations, not inconsistent with this Act, as may be necessary to the efficient administration of the functions" with which she is charged.

In the Court's view, the regulation in question is reasonably related to a basic aim of the SSI program, which is to pay benefits only to the extent that an individual's basic subsistence needs are not provided from other sources. See 3 U.S.Code Cong. & Admin.News, pp. 5135-56 (1972); S.Rep....