Gilliard v. Craig

331 F. Supp. 587, 1971 U.S. Dist. LEXIS 12926

• Court: District Court, W.D. North Carolina
• Decided: June 10, 1971
• Docket: Civ. A. 2660
• Status: Published

Opinions

MEMORANDUM OF DECISION AND ORDER

Before CRAVEN, Circuit Judge, JONES, Chief District Judge and MCMILLAN, District Judge.

McMILLAN, District Judge:

PRELIMINARY STATEMENT

This case was heard in Charlotte on November 5, 1970, before a three-judge court. The plaintiffs, individually and for the class of themselves and others similarly situated, seek declaratory and injunctive relief from policies and actions of the defendants which reduce benefits available to plaintiffs under the Social Security Act, Title 42, U.S.C., Section 601, et seq., and which policies and actions plaintiffs say violate the Social Security Act and the equal protection clause and the due process clause of the Fourteenth Amendment.

THE CLASS

Plaintiffs sue individually and as members of a class of persons who have been or may be subject to reduction of AFDC (Aid to Families with Dependent Children) benefits based upon unconstitutional or illegal claim of credit by administering agencies for outside income and other resources available to some but not all of a family group. The action is properly maintainable as a class action.

THE FACTS

The plaintiffs are Beaty Mae Gilliard; her seven children including Samuel Davis, Jr.; and Samuel Odell Davis. Samuel Odell Davis is the father of Samuel Davis, Jr., the youngest child, born in November, 1969, but is not the father of any of the other children. On April 6, 1970, Samuel Davis, Jr. was legitimatized in a proceeding conducted under North Carolina General Statutes, Section 49-10, with the result that his father became legally obligated to provide for his support.

Before Samuel Davis, Jr., was born, Beaty Mae Gilliard and her other six children were receiving financial benefits under the AFDC program, which was established by subchapter 4 of the Social Security Act of 1935, as amended, 42 U.S.C., Section 601, et seq. This program is jointly funded by federal, state and local governments. It is administered statewide in North Carolina by the North Carolina Board of Social Services and the North Carolina Commissioner of Social Services and is administered in Mecklenburg County by the Mecklenburg County Department of Social Services.

Before the birth of Samuel Davis, Jr., the amount of benefits the Gilliards were receiving under the AFDC program was about $217 per month. After Samuel Davis, Jr. was born, he was added to the family group of beneficiaries, and the family’s allowance was increased from about $217 a month to about $227 a month.

However, Samuel Davis, Sr. began making regular payments of $43.33 per month ($10 per week) to support Samuel Davis, Jr., and when the defendants learned this, they reduced the monthly AFDC payments by $43.33, effective in March, 1970, and since that time the AFDC payments have been only $184 a month instead of the former $227.

Appeal to the State Commissioner produced an affirmance of the decision to reduce the Gilliard’s benefits. This exhausts state administrative remedies. Exhaustion of state judicial remedies is not required. Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); 68 Columbia Law Review, 1201 (1968).

Defendants say that the payments by Samuel Davis, Sr. are a resource available to the family and that the full amount of such payments should be deducted from benefits otherwise payable. Plaintiffs contend that the payments to young Davis are available to him alone; that they are his property, not his mother’s and not the property of the family at large; and that the action of the defendants in charging the entire $43.33 against the AFDC allowance is discriminatory against all plaintiffs, both under the due process and equal protection clauses of the Fourteenth Amendment to the Constitution, and as a matter of proper interpretation of the federal statutes and the state regulations.

THE STATUTES AND REGULATIONS

The federal statute which regulates the distribution of benefits is 42 U.S.C., Section 602(a) (7), which reads:

“A State plan for aid and services to needy families with children must * * * (7) * * * provide that the State agency shall, in determining need, take into consideration any other income and resources of any child or relative claiming aid to families with dependent children, or of any other individual (living in the same home as such child and relative) whose needs the State determines should be considered in determining the need of the child or relative claiming such aid, as well as any expenses reasonably attributable to the earning of any such income; * * (Emphasis added.)

The statewide regulations on which the defendants based their ruling are Section 301 of the North Carolina Public Assistance Manual, which says that

“In AFDC, the budget is to include all eligible children in the home * * *” (Emphasis added)

and Section 320 of the Manual, providing that

“* * * all income and any other resources immediately and regularly available must be taken into consideration.” (Emphasis added.)

A portion of a regulation similar in principle is subsection 1(B) (8) of Section 2321 of the North Carolina Department of Social Services Welfare Program Manual:

“Support Payments — In AFDC cases where the parent who has deserted or abandoned the family and has been located, or where the parent is separated from the familly, the monthly amount that the court orders him/her to pay is to be entered in the budget as a resource.

“a. If the payments are not made in accordance with the court order, the amount must be eliminated from the budget as a resource or reduced to the amount actually being contributed by the parent.”

In a case (Long v. Commissioner, Case No. 8053) arising in Forsyth County, North Carolina, the Commissioner ruled on October 30, 1970, ostensibly upon the authority of subsection 1(B) (8) of Section 2321, that the amount of the support payments received by “one of [the] children” of an AFDC family pursuant to a court order was properly deducted by the County Department from the family’s AFDC grant.

Apparently overlooked by the defendants in the Forsyth County case and in the case at bar was the main or parent paragraph of subsection 1(B) of Section 2321 of the Manual, which since July 1, 1969, has provided in pertinent part, as a statewide regulation, that: contributed to the family; and net cash derived from wages; net income from rental of rooms or real estate; net farm income; or net income from other sources * * (Emphasis added.)

“* * -x- ajj cash income regularly available to the family must be considered in determining resources. This includes but is not limited to: amounts received from OASDI (verified), V.A., Workmen’s Compensation, etc., dividends earned from savings, stocks, bonds, insurance policies, and other investments; cash regularly

The natural implication of the emphasized phrase is that for income or contributions to be counted as available in determining resources they should be available to the family and not just to one of its members.

At the time the defendants made their ruling in the Gilliard case in March of 1970, there was apparently no federal regulation which expressly controls this situation. However, on the 25th day of September, 1970, in a nationwide directive (Exhibit P) to affected state agencies, the Department of Health, Education and Welfare ruled that in the future, if one child of a group receiving AFDC payments should become also entitled to other federal aid under the Old Age Survivors and Disability Insurance (OASDI) provisions of the Act, the additional payment to or for the child should be counted as a resource available only to that child. This federal ruling does not decide the issue presented on the particular facts of this case, but it does embrace the principle contended for by the plaintiffs — the principle that assets belonging to one potential member of the group of beneficiaries may not be treated as assets available to the entire group.

JURISDICTION

The complaint alleges a cause of action cognizable under 42 U.S.C., Section 1983 ¹ and within the jurisdiction of a district court under 28 U.S.C., Section 1343.² Since the complaint also seeks injunction restraining state officials and agencies from enforcing or carrying out statewide statutes and regulations upon grounds of uneonstitutionality of the statutes and regulations, the case was heard by a three-judge court under 28 U.S.C., Section 2281.³

The defendants contend, however, citing Stinson v. Finch, 317 F.Supp. 581 (3-J. Court, N.D.Ga., 1970), that because 42 U.S.C., Section 602(a) (7) requires agencies administering state AFDC plans to take into consideration “other income and resources of any child” in the home, in determining the need “of the child,” the actions of the defendants are under color of federal rather than state law; that no cause of action is stated under Section 1983; and that this court does not have jurisdiction under Section 1343.

We are unable to agree with this contention. To begin with, as a matter of statutory interpretation, it is highly doubtful that Section 602(a) (7) requires or even contemplates that the independent resources of one child should be made available to the rest of the household; if Section 602(a) (7) provides a “color” of federal law, its hue is not the one visualized by defendants. In the second place, participation by the state in AFDC is not required but voluntary ; implementation is left to the states; the authority of the defendants is under state statutes (see North Carolina General Statutes, Sections 108-1 to 108-19); and the discrimination under attack is based directly on statewide state regulations. We think there is adequate color of statewide law and regulation to satisfy Sections 1983 and 1343.

The defendants say further that the court does not have jurisdiction over the subject matter because the suit does not challenge the deprivation of a “civil right” of “personal liberty” but only the deprivation of a property right. They rely on Justice Stone’s opinion in Hague v. C.I.O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423 (1939), in which Justice Stone said (at 307 U.S. 531-532, 59 S.Ct. 971):

“* * * [W]henever the right or immunity is one of personal liberty, not dependent for its existence upon the infringement of property rights, there is jurisdiction in the district court under [the Civil Rights Act] *■ -» * «

The defendants also rely on McCall v. Shapiro, 416 F.2d 246 (2nd Cir., 1969), and Eisen v. Eastman, 421 F.2d 560 (2nd Cir., 1969).

We do not believe that this case is controlled by Hague, McCall and Eism. In four cases decided after Hague [King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970); and Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970)] the Supreme Court has found jurisdiction on jurisdictional facts not materially different from the facts before this court. Although the Supreme Court did not in those cases expressly consider the “property right” language of Justice Stone, it can not be assumed that these decisions were entered in ignorance or unintended disregard of Hague v. C.I.O.

Moreover, some recent decisions have recognized a reasonable interpretation of Justice Stone’s opinion which would support jurisdiction in welfare cases where plaintiffs allege deprivation of benefits vital to their subsistence. In Eisen, for example, Circuit Judge Friendly observed that King v. Smith, although it disregards Justice Stone’s comment in Hague, arguably falls within Hague because the defendants in Eisen had infringed upon Mrs. Smith’s off-springs’ “ * * * ‘liberty’ to grow up with financial aid for their subsistence * * *” (421 F.2d 560 at 564); and in Taylor v. New York City Transit Authority, 309 F.Supp. 785, at 789 (E.D. N.Y., 1970), affirmed 433 F.2d 665 (2nd Cir., 1970). Judge Weinstein, in applying Justice Stone’s formulation to the context of an employment discharge case, said:

“Certainly it cannot seriously be contended that a man’s liberty is not diminished when he is denied the option of remaining in a government job vital to his own and his family’s sustenance. Life is a predicate for the exercise of the freedom to speak protected in Hague.”

See also, Lynch v. Household Finance Corporation, 318 F.Supp. 1111 (D.Conn., 1970); Weddle v. Director, Patuxent Institution, 436 F.2d 342 (4th Cir., 1970); Roberts v. Harder, 320 F.Supp. 1313 (D.Conn., 1970); Campagnuolo v. Harder, 319 F.Supp. 414 (D.Conn., 1970); Russo v. Shapiro, 309 F.Supp. 385 (D. Conn., 1969); Johnson v. Harder, 438 F.2d 7 (2nd Cir., 1971).

It takes little imagination to see that the maximum amount of each monthly AFDC payment is vital to the subsistence of Mrs. Gilliard and her children. If Judge Friendly’s as-yet dimly described principle states a constitutional right, it obviously applies to eight people living in the 1970’s inflation on $227 a month.

Therefore, either under King v. Smith and other recent decisions of the Supreme Court, or under the theory that in this nation children have a right to subsistence and that infringement upon that right is a deprivation of personal liberty, we conclude that a cause of action is properly alleged under Section 1983 and that there is jurisdiction under section 1343.

Since this court’s jurisdiction to decide the substantial constitutional issues presented in this case is properly invoked, we think it appropriate on the basis of United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968), and Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970), to exercise pendent jurisdiction over any non-constitutional issues of interpretation of statutes or regulations which the action may present. These issues are also appropriately before the three-judge court. Florida Lime and Avocado Growers, Inc. v. Jacobsen, 362 U.S. 73, 80 S.Ct. 568, 4 L.Ed.2d 568 (1960), 67 Columbia Law Review 84, at 108-109.

THE MERITS OF THE CASE

Having fought through the procedural and jurisdictional questions, and a lengthy set of Social Security and Welfare regulations, we find the ultimate merits of the case to be relatively uncomplicated. They are viewed by us as follows:

(a) All plaintiffs are threatened by the defendants’ action. — Mrs. Gilliard’s gross funds available to support six children are reduced by $43 a month. Her problems of existence, already difficult, become more complicated. She faces the Hobson’s choice of applying Davis’s contribution to benefit only Samuel Davis, Jr., or of improperly using some or all of Davis’s contribution for the benefit of herself and the other children. The original six children, already on a “bare minimum” program, must either exist on less, or become beneficiaries of the contribution of Samuel Davis, Sr., which he and his son have the right to expect will go to support only Samuel Davis, Jr. The daily necessity for such decision puts a moral and legal burden on Mrs. Gilliard to add to her obvious economic burden; the creation of such a burden is an unfair discrimination.

(b) Inclusion of Samuel Davis, Jr. in the “class” against the will of his parents violates the Social Security Act. ■ — The obvious intent of Sections 601, et seq. of the Social Security Act is to provide assistance only to needy children. In particular, see Sections 601, 602(a) (7), and 606(a). See also, King v. Smith, 392 U.S. at pages 319-320, 88 S.Ct. 2128, standards of need are determined by the states (Sections 601 and 602(a) (7), note 14, King v. Smith, supra. The state-determined need of Samuel Davis, Jr. is $11.50 a month (Section 2310, North Carolina Department of Social Services Welfare Programs Manual), 86% of which AFDC would provide. The child’s income is $43.33 a month. He is therefore ineligible for AFDC and his inclusion in the Gilliards’ AFDC budget (at least, in the absence of parental consent) is violative of the Social Security Act.

(c) The inclusion of support payments belonging to Samuel Davis, Jr. as a resource available to the entire family works an unlawful appropriation of the funds of both father and son, and violates the intent and meaning of the federal statute and the North Carolina regulations themselves. — As previously noted, the North Carolina Department of Social Services Welfare Programs Manual, Section 1(B) of Section 2321, does not require assimilation of resources available only to individual members of the family, but requires simply that income and contributions regularly available “to the family” be considered. The defendants appear to have overlooked this, their own regulation, in deciding the Gilliard case. They also appear to have overlooked the limitations of 42 U. S.C., Section 602(a) (7) which, as we read it, authorizes state agencies administering the plan to consider resources of a child in determining the needs of the child, but does not require nor authorize that the resources available only to a child living in the home should be treated as resources available to the family at large.

(d) The defendants improperly presumed that the support payments by Samuel O. Davis were available to the family at large. — -Recent decisions have made it clear that those administering aid to dependent children may not presume the availability to an AFDC family of the income of a “man in the house” or a man assuming the role of spouse or a stepfather owing no legal duty of support. King v. Smith, 392 U.S. 309, 88 S.Ct. 2128 (1968); Lewis v. Martin, 397 U.S. 552, 90 S.Ct. 1282, 25 L.Ed.2d 561 (1970); Solman v. Shapiro, 300 F.Supp. 409 (D.Conn., 1969) (affirmed 396 U.S. 5, 90 S.Ct. 25, 24 L.Ed.2d 5 (1969)). If the income of an individual with no legal duty of support is not available to the family, then on like principle the contribution to the support of Samuel Davis, Jr. by one having no legal duty to support the rest of the family can not be considered a resource available to that family.

CONCLUSION

Both under the most rational interpretation of 42 U.S.C., Section 602(a) (7), and under the State’s own regulations, it is improper to include as family resources support payments belonging individually to Samuel Davis, Jr. Samuel Davis, Jr. is not a proper member of the group because he is not a “needy” child under the Social Security Act. The Gilliards, absent some relevant change in their family status since the evidence was taken, are entitled to a restoration of the payments at the rate of approximately $217 a month, retroactive to March, 1970, when the reduction originally took place. The defendants may not under the law reduce or continue to withhold the payment of AFDC benefits to members of the Gilliard family or any others of the class represented by the Gilliard family because of the presumed availability to an AFDC family of support payments which belong to one or more but not all of the members of that family.

NOTE: This decision, substantially arrived at earlier this year, has been reconsidered and reheard in view of Harris v. Younger, et al.; the court finds that the Younger cases are inapplicable to the situation presented here and do not indicate any change in the decision above outlined.

1 . 42 U.S.C., Section 1983: “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen, of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the ■ party injured in an action at law, suit in equity, or other proper proceeding for redress.”

2 . 28 U.S.C., Section 1343(3), (4) : “The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person: * * (3) To redress the deprivation, under col- or of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States; (4) To recover damages or to secure equitable or other relief under any Act of Congress providing for the protection of civil rights, including the right to vote.”

3 . 28 U.S.C., Section 2281: “An interlocutory or permanent injunction restraining the enforcement, operation or execution of any State statute by restraining the action of any officer of such State in tiie enforcement or execution of such statute or of an order made by an administrative board or commission acting under State statutes, shall not be granted by any district court or judge thereof upon the ground of the unconstitutionality of such statute unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title.”