Everett v. Schramm

772 F.2d 1114
CourtCourt of Appeals for the Third Circuit
DecidedSeptember 6, 1985
DocketNos. 84-5449, 84-5490
StatusPublished
Cited by24 cases

This text of 772 F.2d 1114 (Everett v. Schramm) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Everett v. Schramm, 772 F.2d 1114 (3d Cir. 1985).

Opinion

OPINION OF THE COURT

A. LEON HIGGINBOTHAM, Jr., Circuit Judge.

Karen Everett and Marion Mickens (“plaintiffs”) brought this class action alleging illegalities in the administration of the State of Delaware’s Aid to Families With Dependent Children (“AFDC”) program. Defendants Patricia Schramm and Charles Hayward were sued in their official capacities as, respectively, Secretary of the Delaware Department of Health and Social Services (“the Department”) and Director of the Department’s Division of Economic Services. The district court, 587 F.Supp. 228 (D.C.Del.1984), found for the plaintiffs and granted declaratory and in-junctive relief with respect to certain AFDC calculations made between October 1, 1981 and December 31, 1983. With respect to calculations since January 1, 1984, the district court found for defendants. Plaintiffs appealed and defendants cross-appealed. For the reasons that follow, we will affirm.

I.

AFDC was one of four categorical assistance programs created by the Social Security Act of 1935, § 401 et seq., 49 Stat. 620, 627 (1936). Though AFDC has frequently been amended over the years, the program’s basic structure — an early example of cooperative federalism — has remained constant. Under the program, financially needy households that include dependent children receive monetary payments from the state. The payments are funded jointly by the state and federal governments. To be eligible for federal matching funds, a state must adopt a plan for aid and services to needy families in conformity with 42 U.S.C. § 602.

States must set two standards for the program: the standard of need and the payment level. The standard of need is a set of amounts each state considers adequate to provide for the subsistence needs of households of various sizes. It is “a dollar figure set by each State reflecting the amount deemed necessary to provide for essential needs, such as food, clothing, and shelter.” See Quern v. Mandley, 436 U.S. 725, 737, 98 S.Ct. 2068, 2075, 56 L.Ed.2d 658 (1978). While a 1968 amendment to the federal law required that the standard of need be adjusted by July 1, 1969 to reflect increases in the cost of living, 42 U.S.C. § 602(a)(23), Alvarado v. Schmidt, 317 F.Supp. 1027, 1038-39 (W.D.Wis.1970), it does not mandate any adjustment to account for inflation that has occurred thereafter, New Jersey Welfare Rights Organization v. Cahill, 483 F.2d 723, 726 (3d Cir.1973), nor does it specify which household expenses must be included in the calculation. Metcalf v. Trainor, 472 F.Supp. 576, 586 (N.D.Ill.1979). The payment levels, in contrast, are the amounts the state actually pays to eligible households. The amounts paid vary with the number of household members and the amount of the household’s other income. “Congress has always left to the States a great deal of discretion” as to both the standard of need and the level of benefits to be paid. Rosado v. Wyman, 397 U.S. 397, 408, 90 S.Ct. 1207, 1216, 25 L.Ed.2d 442 (1970). And, until quite recently, AFDC mandated no particular relationship between the two figures; states were free to pay any level of benefits without regard to the standard of need. Johnson v. Likins, 568 F.2d 79, 82 (8th Cir.1977).

The standard of need took on greater significance with the enactment of the Omnibus Budget Reconciliation Act of 1981 (“OBRA”), Pub.L. No. 97-35, §§ 2302, 2306, 95 Stat. 357, 845-46 (1982), which [1116]*1116became effective October 1, 1981. First, OBRA declared any household whose gross income exceeded 150 percent of the state’s standard of need ineligible for AFDC benefits. 42 U.S.C. § 602(a)(18). Second, OBRA required the states to assume that stepparents contribute a certain part of their income to the household for the purpose of calculating the amount of household income to be subtracted from the payment level. 42 U.S.C. § 602(a)(31). The amount assumed to be contributed by the stepparent is calculated by subtracting from the stepparent’s income a sum that includes an amount equal to the state’s standard of need for a household consisting of the stepparent and his or her actual dependents.

The effects of the statutory changes wrought by OBRA are well-illustrated in the cases of the named plaintiffs. In January 1983, Karen Everett was receiving AFDC payments of $197 per month for herself and her infant child. At that time she took a part-time job with an expected average gross monthly income of $400. Shortly thereafter, she was notified that her AFDC payments would be terminated because her income exceeded 150 percent of what Delaware contends was its standard of need for a family of two.1 In February 1983, when Marion Mickens married Charles Mickens, she was receiving an AFDC grant of $266 per month for herself and her two children. Mr. Mickens had a gross income at that time of approximately $400 per month. Calculations required by § 602(a)(31) were done to determine how much of this stepparent’s income would be assumed to be available to Mrs. Mickens and her children. The amount of Mr. Mick-ens’ income disregarded was equal to what Delaware contended was its standard of need for a family of two — $197.2 Enough was left and assumed to be available to Mrs. Mickens and her children that her benefits were terminated.

On April 15, 1983, Everett and Mickens filed this lawsuit seeking declaratory and injunctive relief on behalf of a class consisting of all Delaware AFDC recipients and applicants who were or would be denied benefits due to the state’s application of OBRA’s “150 percent” and “stepparent income” rules. They argued that Delaware had violated federal and state law by using its then-current AFDC payment level, rather than its actual (and allegedly much higher) standard of need, in making the calculations required under OBRA. There was no dispute that Delaware complied with the terms of 42 U.S.C. § 602(a)(23) by conducting a cost of living study in 1968 and establishing standard of need in accordance with the results.3 Plaintiffs’ principal contention was that under Del.Code Ann. tit. 31, § 509 (1974), as enacted in 19714 Delaware’s 1968 standard of need had subsequently been subject to annual adjustments for increases in the Consumer [1117]*1117Price Index.5 Defendants, however, contended that the only statutory provisions defining its standard of need were Del. Code Ann. tit. 31, § 502(8)6 and § 503(d)7

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Everett v. Schramm
772 F.2d 1114 (Third Circuit, 1985)

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Bluebook (online)
772 F.2d 1114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/everett-v-schramm-ca3-1985.