Fair v. Shalala

37 F.3d 1466, 1994 WL 590086
CourtCourt of Appeals for the Eleventh Circuit
DecidedNovember 14, 1994
DocketNo. 93-3329
StatusPublished
Cited by22 cases

This text of 37 F.3d 1466 (Fair v. Shalala) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fair v. Shalala, 37 F.3d 1466, 1994 WL 590086 (11th Cir. 1994).

Opinion

BLACK, Circuit Judge:

Defendant-Appellant, Donna Shalala, Secretary, Department of Health and Human Services (Secretary), appeals the district court’s order granting summary judgment in favor of the plaintiff class, declaring Social Security Ruling 82-31 (SSR 82-31) a violation of the Social Security Act, and enjoining application of SSR 82-31 to the plaintiff class.1 SSR 82-31 expresses the Secretary’s determination that Veteran’s Administration (VA) benefits paid to a veteran for the support of a dependent living with the veteran will be treated as unearned income to the. dependent for purposes of determining the dependent’s eligibility for and amount of Supplemental Security Income (SSI) benefits. The district court found that the Secretary’s interpretation, as stated in SSR 82-31, was not entitled to deference and was inconsistent with the statute and regulations. The Secretary asserts that her interpretation is entitled to deference because it is reasonable and is consistent with the language of the statute, the legislative history of the statute, and the governing precedent of several circuits. We agree that the Secretary’s interpretation is entitled to deference and therefore we reverse.

I. BACKGROUND

The Secretary provides benefits to eligible aged, blind, and disabled individuals through the SSI program. 42 U.S.C. § 1381a. The SSI program, however, is intended to provide only a subsistence level income. If the potential recipient has other sources of income, the SSI benefits are provided as a supplement to bring the individual’s monthly income up to the statutorily defined amount. A potential SSI recipient who has other sources of income must deduct the other income from the SSI statutory base amount to determine both eligibility for and the amount of SSI benefits. 42 U.S.C. §§ 1382, 1382a.

The VA provides benefits to disabled veterans in the form' of statutorily mandated monthly payments. The payment to a disabled veteran who is “living with or reasonably contributing to the support of’ a dependent may be augmented to provide for the support of the dependent (the augmented portion). 38 U.S.C. § 1521(e).

Prior to November 1981, the Secretary considered all VA benefits, including any augmented portion, as unearned income to [1468]*1468the veteran and counted the benefits in determining the veteran’s eligibility for and amount of SSL This interpretation was challenged in the courts and several circuit courts found that the augmented portion was not income to the veteran and could not be counted in determining the veteran’s eligibility for SSI. See, e.g., Whaley v. Schweiker, 663 F.2d 871 (9th Cir.1981); Tsosie v. Califano, 651 F.2d 719 (10th Cir.1981). In response to the circuit court decisions, the Secretary adopted a new policy — the augmented portion would be considered unearned income to the dependent for SSI purposes and would be counted in determining the dependent’s eligibility for SSI. The new policy was issued in the form of an interpretive ruling, SSR 82-31, and has been proposed as a new regulation.

Plaintiff class representative Olean Fair began receiving SSI benefits in 1986. In 1989, the Social Security Administration notified Fair that she had been overpaid because she had failed to include the augmented portion of her husband’s VA benefits in her income. Fair challenged the decision in the district court, which referred the case to a magistrate judge. Fair was certified as the class representative for “all [SSI] recipients residing in the territorial jurisdiction of the Eleventh Circuit whose benefits have been or will be reduced or terminated because their spouses’ need based [VA] disability pensions include an augmented portion.” Fair v. Sullivan, No. 90-1263-CIV-T-22A (M.D.Fla. Oct. 13, 1992).

The plaintiff class filed a motion for summary judgment asking the court to find that SSR 82-31 is void and that the augmented portion of VA benefits is not countable income to the dependent in determining the dependent’s SSI benefits. In response, the Secretary asked the court to deny the motion for summary judgment and to affirm the Secretary’s determination that the augmented portion is countable to the dependent. The magistrate judge determined that SSR 82-31 was “inconsistent and not in accordance with the law.” The district court adopted the magistrate judge’s report and recommendation, declared SSR 82-31 a violation of the Social Security Act, and enjoined the Secretary from applying SSR 82-31 to any member of the plaintiff class. The Secretary’s motion for reconsideration was denied and the Secretary filed this appeal.

II. ANALYSIS

At the time the district court entered its order, only two circuit courts had addressed the validity of SSR 82-31. The Ninth Circuit determined that the Secretary’s interpretation was not required by the decision in Whaley, was not consistent with SSI regulations, and was not entitled to deference. Paxton v. Secretary of Health and Human Services, 856 F.2d 1352, 1356-57 (9th Cir.1988). The Secretary had argued, in Paxton, that the interpretation in SSR 82-31 was required by the court’s determination, in Whaley, that the augmented portion could not count as income to the veteran. Id. The Ninth Circuit, however, determined that “the Secretary’s logical deduction from our holding in Whaley is flawed [because] [t]he calculation of income for SSI purposes is not a zero-sum mathematical problem in which all forms of public assistance must be used to reduce some family member’s SSI benefits.” Id. The Ninth Circuit held that SSR 82-31 was “not in accordance with law” and was not valid. Id. at 1359 (citations omitted).

The Fourth Circuit, on the other hand, held that the Secretary’s interpretation was entitled to deference because, while not “compelled by the statute’s language, ... it represents a reasonable interpretation of an ambiguous provision.” Kennedy v. Shalala, 995 F.2d 28, 29 (4th Cir.1993). The court determined that the Secretary reasonably interpreted the augmented portion as “constructively received” by the dependent. Id. at 29-30. The court further found that SSR 82-31 was supported by “the judiciary’s response to [the Secretary’s] earlier practice,” id. at 31 (referring to the decisions in Whaley and Tsosie), and was consistent with SSI regulations,2 id. at 31-32. The court upheld the validity of SSR 82-31.

Since the district court issued its order, three other circuits have issued opinions ad[1469]*1469dressing the validity of SSR 82-31. All three followed, the lead of the Fourth Circuit and held that the Secretary’s interpretation was reasonable and therefore entitled to deference.3

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37 F.3d 1466, 1994 WL 590086, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fair-v-shalala-ca11-1994.