Young v. Harder

• Decision Date: 26 June 1973
• Docket Number: Civ. A. No. W-5044.
• Citation: 361 F. Supp. 64
• Parties: Leonard YOUNG and Betty J. Young, husband and wife, individually, on behalf of their minor children and all persons similarly situated, v. Robert HARDER, Director, et al.
• Court: U.S. District Court — District of Kansas

361 F. Supp. 64

Leonard YOUNG and Betty J. Young, husband and wife, individually, on behalf of their minor children and all persons similarly situated, v. Robert HARDER, Director, et al.

Civ. A. No. W-5044.

United States District Court, D. Kansas.

June 26, 1973.

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R. Michael Jennings, Stephen J. Blaylock, Legal Aid Society Neighborhood, Wichita, Kan., Jerry G. Elliott, Robert E. Shields, Wichita, Kan., for plaintiffs.

Charles V. Hamm, Woody D. Smith, Bruce A. Roby, Legal Division, State Dept. of Social Welfare, Topeka, Kan., for Robert C. Harder, State Dept. of Social Welfare & the State Bd. of Social Welfare.

Kenneth F. Beck, Wichita, Kan., for Marvin Rosene, Dir., Sedgwick Co., and others.

ORDER

THEIS, District Judge.

This class action arises from the interplay and alleged conflict between the Uniform Relocation Assistance and Real Properties Acquisition Policies Act of 1970 (hereinafter referred to as "Uniform Relocation Act"), 42 U.S.C.A. § 4621 et seq., the Social Security Act of 1935, as amended, 42 U.S.C.A. § 601 et seq., and the Kansas State Board of Social Welfare's "value of moderate home" rule, Kansas Public Assistance Manual, Items 2233 and 2441.1, adopted pursuant to K.S.A. § 39-708. Plaintiffs seek a declaratory judgment that the "value of moderate home" rule is contrary to the provisions of the Uniform Relocation Act and the Social Security Act of 1935, and is unconstitutional because, as administered, it denies plaintiffs equal protection of the law. Plaintiffs, in addition, seek appropriate injunctive relief. Jurisdiction is founded on 28 U.S. C.A. §§ 1331, 1343(3), 2201.

FACTUAL BACKGROUND AND CLAIMS OF THE PARTIES

In 1970, the Uniform Relocation Act was enacted by Congress in order to "establish a uniform policy for the fair and equitable treatment of persons displaced as a result of federally assisted programs in order that such persons shall not suffer disproportionate injuries as a result of programs designed for the benefit of the public as a whole." In 1971, the individual plaintiffs owned and occupied a home at 2331 Fairview, Wichita, Kansas. This address was within the boundaries of an area designated for voluntary rehabilitation by the Wichita Urban Renewal Agency. Plaintiffs made application in July, 1971, for a grant to rehabilitate their home—however, upon inspection by the Urban Renewal Agency it was determined that restoration was economically unfeasible and the agency offered to purchase plaintiffs' home for $6,930.00. Subsequently, plaintiffs purchased another home at 1844 South Broadway for a total purchase price of $18,500.00. Since this residence qualified as a replacement dwelling under the Uniform Relocation Act, plaintiffs became eligible for a replacement housing payment, which was determined on the basis of federally approved criteria to be $11,880.13. The Wichita Relocation Agency required plaintiffs to apply the net replacement housing payment on the down payment of their replacement home. Plaintiffs presently have an equity of $11,600.00 in their home at 1844 South Broadway.

Throughout this period the plaintiffs were receiving an Aid to Dependent Children entitlement of $115.00 per month. This payment, together with a $286.00 per month Social Security Disability Insurance benefit constituted plaintiffs' monthly income. Plaintiffs' household includes four children and one grandchild, making a total of seven. On April 20, 1972, the County Welfare Board denied plaintiffs' application for approval of their purchase of a replacement dwelling for the reason that the value of their equity would exceed the "moderate home value" rule. The "moderate home value" rule provides that a client's home will be considered a resource in determining need when the equity exceeds by $750.00 the maximum value determined by the County Board. The Sedgwick County Board of Social Welfare has determined the value of a moderate home to be $7,500.00. The County Board's decision was sustained by the Kansas State Board of Social Welfare. As a result, plaintiffs' welfare entitlement to a cash grant and medical care terminated on January 31, 1973.

Premised on their belief that the "value of moderate home" rule is antagonistic to the purpose of the Uniform Relocation Act and the Social Security Act of 1935, as well as violative of the Fourteenth Amendment, plaintiffs advance four claims. First, they claim Section 216 of the Uniform Relocation Act, 42 U.S.C.A. § 4636, requires defendants to disregard the equity which plaintiffs have in their home to the extent the value of the equity equals the amount of their replacement housing payment. Section 216 of the Uniform Relocation Act, provides as follows:

"No payment received under this subchapter shall be considered as income for the purposes of Title 26; or for the purposes of determining the eligibility or the extent of eligibility of any person for assistance under the Social Security Act or any other Federal law."

Pursuant to this mandate, the Secretary of Health, Education and Welfare promulgated 45 C.F.R. § 233.20 (a)(4)(ii)(a), which provides that in determining need and the amount of assistance payment for A.F.D.C., any payment under the Uniform Relocation Act shall be disregarded. This regulation has been interpreted by officials in the Department of Health, Education and Welfare as requiring that the replacement home, as well as the payment, may not be considered as a resource for purposes of determining eligibility. On the other hand, both the Sedgwick County Board of Social Welfare and the Kansas Board of Social Welfare, take the position that although the payment cannot be considered as income or a resource, once the payment is applied to the purchase of a dwelling, the equity which the client has in that dwelling must be considered in determining the client's continuing eligibility. Plaintiffs contend the defendants' interpretation of the "value of moderate home" rule to require inclusion of an equity obtained by application of the Uniform Relocation Act payments in determining their eligibility for assistance, is contrary to the Uniform Relocation Act and the regulations of the Secretary of Health, Education and Welfare and, therefore, under the supremacy clause, must be declared invalid. See Carleson, Director, Department of Social Welfare v. Remillard, 406 U.S. 598, 92 S.Ct. 1932, 32 L.Ed.2d 352 (1972); Townsend v. Swank, 404 U.S. 282, 92 S. Ct. 502, 30 L.Ed.2d 448 (1971).

Second, plaintiffs claim defendants' denial of public assistance constitutes an invidious discrimination against recipients of replacement housing payments. By including an equity obtained by using payments received under the Uniform Relocation Act in determining eligibility, the defendants force plaintiffs to spend part or all of their replacement housing payment on necessities other than a replacement home. They assert this discrimination bears no reasonable relationship to any legitimate state purpose and denies them equal protection of the law.

In their third claim, plaintiffs invoke Section 402(a) of the Social Security Act, 42 U.S.C.A. § 602(a) and Part II, § 4300 of the U. S. Department of Health, Education and Welfare Handbook on Public Assistance Administration, which together require equal treatment of persons in like situations and uniform application of specific eligibility factors. They claim the procedure or scheme by which the moderate home value rule is administered denies them uniform treatment. Each county welfare board is authorized to determine the value of a moderate home under guidelines contained in the Kansas Public Assistance Manual, Items 2233, et seq. In Sedgwick County, the value of a moderate home has been determined to be $7,500.00, whereas in Shawnee County, the value has been set at $12,500.00. According to plaintiffs, such differences as this are not reasonably based on objective differences in cost or any other geographical difference rationally related to the provisions and purposes of the Social Security Act, and are therefore contrary to the Social Security Act.

Plaintiffs' fourth claim reiterates the foregoing, and further states the intercounty variance is without a rational basis, and since it bears no reasonable relationship to a legitimate state interest, it constitutes an invidious discrimination against public assistance applicants residing in Sedgwick County, and denies them equal protection of the law.

Defendants have yet to respond to plaintiffs' claims and instead have interposed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim. Plaintiffs, in addition to resisting defendants' motion, seek issuance of a preliminary injunction. Having carefully reviewed the materials and authorities, the Court finds the defendants' motion to dismiss should be denied and plaintiffs' application for a preliminary injunction granted.

JURISDICTION

With respect to their claim that the "value of a moderate home" rule conflicts with federal statutes, plaintiffs assert jurisdiction exists under 28 U.S.C. A. § 1331, 28 U.S.C.A. § 1343(3), and under the doctrine of pendent jurisdiction. In order for jurisdiction to lie under 28 U.S.C.A. § 1331, it must be shown, first, that the matter in controversy exceeds the value of $10,000.00, and second, the action arises under the Constitution, laws, or treaties of the United States. Defendants assert that plaintiffs' first claim fails to present a federal question, nor does the value in controversy exceed $10,000.00.

Since plaintiffs' first claim rests principally on provisions of the Uniform Relocation Act, the Court perceives, as a preliminary matter, the question of whether plaintiffs have any rights under this statute which they can vindicate in this action. The mere fact that neither the statute nor the regulations adopted pursuant thereto explicitly...