Zeien v. Palmer, 90-2744
| Decision Date | 10 March 1992 |
| Docket Number | No. 90-2744,90-2744 |
| Citation | 955 F.2d 506 |
| Parties | Jane ZEIEN, individually and on Behalf of others similarly situated, Appellant, v. Charles M. PALMER, Acting Director of Iowa Department of Human Services, Appellee, v. Louis W. SULLIVAN, M.D., in his official capacity as Commissioner, United States Department of Health and Human Services, Appellee. |
| Court | U.S. Court of Appeals — Eighth Circuit |
John S. Allen, Iowa City, Iowa, argued (Thomas A. Krause, Des Moines, Iowa, and Seth Levy, Denise Lisio and Bruce Nestor, Iowa City, Iowa, on brief), for appellant.
Madeline Nesse, Washington, D.C., argued (Gene W. Shepard, U.S. Atty. and John Beamer, Asst. U.S. Atty., Des Moines, Iowa, appeared on brief), for appellee Louis W. Sullivan.
Daniel W. Hart, Des Moines, Iowa, argued (Bonnie J. Campbell, Atty. Gen. and Gordon E. Allen, Deputy Atty. Gen., appeared on brief), for appellee Charles M. Palmer.
Before LAY, * Chief Judge, and HEANEY and BRIGHT, Senior Circuit Judges.
Jane Zeien brought this action on behalf of herself and others similarly situated under 42 U.S.C. § 1983 and title IV-A of the Social Security Act, 42 U.S.C. §§ 601-617 (1988). She challenges the Iowa Department of Human Services' (IDHS) policy of canceling a family's Aid to Families with Dependent Children (AFDC) benefits based on the receipt in a single month of a child support payment that exceeds the state's standard of need for AFDC. Zeien claims that the Social Security Act and federal AFDC regulations require IDHS to make a best estimate of the likelihood that child support payments will continue before terminating AFDC benefits. The district court found that IDHS need not estimate the likelihood of child support continuing before terminating AFDC benefits, but that it must make a corrective payment in the first month of AFDC ineligibility if anticipated child support is not received. Zeien appeals from that portion of the district court's order which concludes that the IDHS termination policy comports with the Social Security Act and regulations. We affirm.
Zeien, the divorced mother of four minor children, began receiving AFDC benefits of $490 per month in June 1987. Court orders entered on August 3 and December 1, 1987 required Zeien's ex-husband to pay her child support of $320 per month, increasing to $600 per month in March 1988. As required by the Social Security Act and regulations for AFDC eligibility, Zeien assigned her right to child support to the State of Iowa. See 42 U.S.C. § 602(a)(26)(A) (1988); 45 C.F.R. § 232.11(a)(1) (1990).
Zeien's ex-husband made the following child support payments to the Collection Services Center (CSC), a branch of IDHS:
Date Amount
August 1987 $ 0
September 1987 0
October 1987 750
November 1987 600
December 1987 390
January 1988 80
February 1988 0
March 1988 0
April 1988 1,040
May"November 1988 0
Zeien's AFDC benefits were canceled for September 1987. 1 She reapplied and again received AFDC benefits for the months of January through May 1988. Based on the child support payment of $1,040 in April 1988, IDHS canceled Zeien's AFDC benefits effective June 1, 1988. 2
Zeien's ex-husband failed to make child support payments in May and June 1988. Zeien reapplied for AFDC on June 9, 1988, and again began receiving benefits on July 1, 1988. She received no child support, AFDC grant, or corrective payment for June 1988, and therefore had no income with which to support her family during that month.
Zeien brought this action against Charles M. Palmer, director of IDHS, alleging that the cancellation of AFDC benefits based on a presumption that child support payments will continue following a single payment violates the Social Security Act and federal AFDC regulations. Zeien sought declaratory and injunctive relief, class certification, and an order requiring IDHS to notify class members of the possibility of monetary relief through state administrative channels. Palmer brought a third-party complaint against Louis W. Sullivan, Secretary of Health and Human Services (HHS), claiming that IDHS' policy resulted from its compliance with regulations promulgated by HHS. Palmer sought an order requiring HHS to provide federal financial participation in any AFDC paid pursuant to a judgment for Zeien, and enjoining HHS from penalizing IDHS for noncompliance with the Social Security Act for any AFDC paid pursuant to such a judgment.
The district court held that HHS regulations require cancellation of AFDC in the second month after receipt of a support payment exceeding the AFDC need standard without a best estimate of the likelihood of support payments continuing. The court found that the regulations were reasonable and were the product of a permissible construction of the Social Security Act by HHS. The court also held, however, that 42 U.S.C. § 602(a)(22) requires IDHS to make corrective payments for months of AFDC ineligibility when anticipated child support payments are not received. The court entered a declaratory judgment to this effect and enjoined IDHS from continuing its policy of refusing to make corrective payments. The court certified a class of all Iowa residents whose AFDC benefits were terminated after January 13, 1987 due to a child support payment, or whose AFDC benefits will be terminated in the future due to such payments. The court ordered IDHS to notify class members of their right to corrective payments for months of AFDC ineligibility in which anticipated support payments did not materialize.
Zeien claims on appeal that the district court erred in concluding that the Social Security Act and HHS regulations do not require IDHS to make a best estimate of the likelihood of child support payments continuing before terminating AFDC benefits. The district court adopted the interpretation of the statute and regulations advanced by HHS as a third-party defendant. Zeien's argument therefore impliedly suggests either that HHS has misinterpreted its own regulations or that it has promulgated regulations inconsistent with the Social Security Act.
The Supreme Court articulated the standard by which we review an agency's interpretation of the statute the agency administers in Chevron, U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984):
First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.... If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, ... as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute....
Id. at 842-43, 104 S.Ct. at 2781-82 (footnotes omitted). If Congress authorizes an agency to promulgate regulations to fill statutory gaps, such regulations "are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Id. at 843-44, 104 S.Ct. at 2782.
Congress created the AFDC program "to provide financial assistance to needy dependent children and the parents or relatives who live with and care for them." Shea v. Vialpando, 416 U.S. 251, 253, 94 S.Ct. 1746, 1750, 40 L.Ed.2d 120 (1974). The Social Security Act restricts eligibility for AFDC to only the neediest families, excluding any family whose combined assets exceed $1,000 in value. See 42 U.S.C. § 602(a)(7)(B) (1988). 3 States choosing to participate in the program receive reimbursement from the federal government for a percentage of the funds they expend. See 42 U.S.C. § 603 (1988); Heckler v. Turner, 470 U.S. 184, 189, 105 S.Ct. 1138, 1141, 84 L.Ed.2d 138 (1985). Participating states, in return, must administer their AFDC programs according to state plans that conform to applicable federal statutes and regulations. See 42 U.S.C. § 602 (1988); Turner, 470 U.S. at 189, 105 S.Ct. at 1141.
The Social Security Act requires each state participant in the AFDC program to implement a plan designed to maximize the collection of child support payments from absent parents. See 42 U.S.C. § 602(a)(27) (1988); see also 42 U.S.C. §§ 651-669 (1988) (Child Support Enforcement Act). One purpose of this requirement is to reduce welfare costs by increasing child support collections. See S.Rep. No. 1356, 93d Cong., 2d Sess. 13-14, reprinted in 1974 U.S.Code Cong. & Admin.News 8133, 8145-46 (). To this end, each state AFDC plan must require AFDC recipients to assign to the state their rights to child support as a condition of eligibility for aid. See 42 U.S.C. § 602(a)(26)(A) (1988). Child support payments ordinarily are made directly to the state child support collection agency, which distributes them according to a formula set forth in the statute and regulations. See 42 U.S.C. § 657 (1988); 45 C.F.R. § 302.51(b) (1990).
The Social Security Act also requires the state AFDC agency to consider all income and resources of all members of a recipient family in determining the need for aid. See 42 U.S.C. § 602(a)(7) (1988). The Act authorizes a monthly income reporting and retrospective budgeting system to determine eligibility and need for aid. See 42 U.S.C. § 602(a)(13)(A)(i) (1988) (...
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