Rosas ex rel. Perez v. McMahon

945 F.2d 1469
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 4, 1991
DocketNos. 89-15525, 89-15443 and 89-15542
StatusPublished
Cited by2 cases

This text of 945 F.2d 1469 (Rosas ex rel. Perez v. McMahon) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rosas ex rel. Perez v. McMahon, 945 F.2d 1469 (9th Cir. 1991).

Opinion

CANBY, Circuit Judge:

This class action was brought by California welfare recipients whose benefits were [1471]*1471reduced as a result of changes in controlling federal and state statutes. Because of administrative delays in implementing the reductions, many recipients were ultimately subjected not only to a reduction in future monthly benefits, but to recoupment of overpayments received during the period of delay.

The issue in dispute is one of timeliness of notice. The governing federal regulation requires agencies that administer Aid to Families with Dependent Children (AFDC) to mail timely notice of an “intended action” to suspend or reduce assistance “at least 10 days before the date of action, that is, that date upon which the action would become effective.” 45 CFR § 205.-10(a)(4)(i). The notices in this case were mailed after the effective date of reductions in benefit entitlements but at least 10 days before actual reductions in monthly benefit payments to recipients. The district court held that notice had not been timely. 700 F.Supp. 467. We disagree and reverse.1

BACKGROUND

AFDC is a cooperative federal-state program to assist poor children and those who care for them. Benefits are based, in part, on the income available to a child from his or her family. In July 1984, Congress amended the AFDC program to increase the kind of income deemed available to a child. For the first time, a child’s available income included: (1) income from siblings living with the child, and (2) income from a grandparent living with the child and the child’s parent, when that parent was under age 18. See The Deficit Reduction Act of 1984, § 2640(a), P.L. 98-369, 98 Stat. 1145, codified at 42 U.S.C. §§ 602(a)(38) and (39). California enacted these rules into state law on September 26, 1984, and authorized the California Department of Social Services (DSS) to implement the changes “within 120 days.” See Calif. Statutes of 1984, Ch. 1447, § 14, codified at Calif. Welf. and Inst. Code § 11008.14 (West Supp. 1991). When implemented, these statutory changes resulted in the reduction or elimination of benefits for many recipients.

DSS supervises the administration of the AFDC program in California counties and was responsible for implementing the statutory changes in California. See Cal. Welf. & Inst. §§ 10740-10815 (West 1980). In January 1985, DSS informed California counties that the new sibling and grandparent income rules would become effective February 1, 1985. However, DSS did not supply the counties with directions for sending notices to recipients until February 5, 1985 and did not send implementing instructions until February 13, 1985.

The counties gathered information about the incomes of siblings and grandparents living with recipients and then used this information to recalculate benefits. From April 1985 through September 1985, the counties notified some California AFDC recipients that they had been overpaid, pursuant to the changes effective February 1, 1985. The notices also informed the recipients that future benefit checks would be reduced in order to recoup the over-payments.2 In effect, these recipients faced two benefit reductions. First, benefits were reduced to the level required by the new income calculation rules. Second, benefits were reduced further to recoup overpayments that resulted from the retroactive application of those rules as of February 1. The notices were mailed at least ten days before the recipients received reduced benefit checks, but from two to seven months after the effective date of the statutory reduction in benefit entitlements.

AFDC recipients whose benefits were subject to recoupment because of such [1472]*1472overpayments joined in a class action against Linda McMahon, Director of the DSS. Under 42 U.S.C. § 1983, the plaintiffs sought: (1) a declaratory judgment that DSS violated federal regulations and due process by failing to give adequate and timely notice to AFDC recipients before implementing the rule changes and by seeking to collect overpayments assessed as a result of that conduct: (2) a permanent injunction barring DSS from recovering any overpayments assessed for the period between February 1985 and the rate of receipt of adequate notice; (3) a refund of all overpayments already collected; and (4) costs and attorneys’ fees. DSS filed a third party complaint against the Secretary of the United States Department of Health and Human Services (HHS), to protect DSS from adverse federal action in the event that the district court granted relief against DSS.

The district court granted the plaintiffs’ summary judgment motion, and declared that DSS had not mailed timely notices of benefit reductions, in violation of 45 CFR §§ 205.10(a)(4)(i) and (iii).3 The district court interpreted the federal regulations to require “the state to send notice at least ten days before recipients’ entitlement is reduced by a change in the law, regardless of the date when the change is reflected in a recipient’s monthly check.” It also decided that the plaintiffs had received “overpayments,” that DSS must recoup all overpayments pursuant to 42 U.S.C. § 602(a)(22), and that DSS had done so. The district court awarded costs and attorneys’ fees, but no monetary damages, to the plaintiffs.

DISCUSSION4

This appeal turns on what is meant by the federal regulation that requires a state or local agency to mail notice of an “intended action” to reduce assistance “at least 10 days before the date of action, that is, that date upon which the action would become effective.”5 45 CFR § 205.10(a)(4)(i) (emphasis added). DSS and HHS contend that an action to reduce assistance becomes effective when the benefit payment to the recipient is actually reduced. The plaintiffs contend that an action to reduce assistance becomes effective when the substantive law reduces the benefit entitlement, and that notice should accordingly be given prior to that time.

We conclude that DSS and HHS have far the better of the argument. In the first place, the regulation was promulgated by HHS, and the Secretary’s interpretation of his own regulation is controlling unless it is plainly erroneous or is [1473]*1473inconsistent with the regulation’s terms. See Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359, 109 S.Ct. 1835, 1850, 104 L.Ed.2d 351 (1989).

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945 F.2d 1469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rosas-ex-rel-perez-v-mcmahon-ca9-1991.