Teral Champion v. Donna E. Shalala, Department of Health and Human Services Charles M. Palmer, Director of Iowa Department of Human Services

33 F.3d 963, 1994 U.S. App. LEXIS 23094, 1994 WL 460822
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 26, 1994
Docket93-3967
StatusPublished
Cited by11 cases

This text of 33 F.3d 963 (Teral Champion v. Donna E. Shalala, Department of Health and Human Services Charles M. Palmer, Director of Iowa Department of Human Services) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Teral Champion v. Donna E. Shalala, Department of Health and Human Services Charles M. Palmer, Director of Iowa Department of Human Services, 33 F.3d 963, 1994 U.S. App. LEXIS 23094, 1994 WL 460822 (8th Cir. 1994).

Opinions

[965]*965BOWMAN, Circuit Judge.

Teral Champion, seeking relief for herself and others similarly situated, brought this class-action suit against the Secretary of the United States Department of Health and Human Services (HHS) and the Director of the Iowa Department of Human Services (IDHS) 1 challenging as arbitrary and capricious the $1500 automobile-resource exemption set by the Secretary for recipients of Aid to Families with Dependant Children (AFDC). On cross-motions for summary judgment, the District Court2 granted judgment for the defendants on all issues. Champion appeals, and we affirm.

I.

The AFDC program is a cooperative federal-state program established by Congress in 1935 with the purpose of providing “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, 1749, 40 L.Ed.2d 120 (1974). A principal goal of the program is “to help such parents or relatives to attain or retain capability for the maximum self-support and personal independence consistent with the maintenance of continuing parental care and protection.” 42 U.S.C. § 601 (1988), quoted in Vialpando, 416 U.S. at 253, 94 S.Ct. at 1749.

In 1955, the Secretary began to impose upon the states income and resource limitations for AFDC recipients. With the passage of the Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, 95 Stat. 357 (1981) (OBRA), Congress for the first time statutorily limited allowable resources under the AFDC program. The OBRA amendments to the AFDC program reduced the amount of resources allowed an AFDC recipient to $1000 per family. At the same time, Congress delegated authority to the Secretary3 to exclude from this amount “so much of the family member’s ownership interest in one automobile as does not exceed such amount as the Secretary may prescribe.” 42 U.S.C. § 602(a)(7)(B)(i) (Supp. IV 1992) (emphasis added). The Senate report accompanying the legislation explained that

[t]he committee believes that the present regulatory limit allows AFDC to be provided in situations in which families have resources upon which they could reasonably be expected to draw.... The committee agreed to limit the value of resources to assure that aid would be restricted to those most in need.

S.Rep. No. 139, 97th Cong., 1st Sess. 503 (1981), reprinted in 1981 U.S.C.C.A.N. 396, 769-70. By regulation promulgated in 1982, the Secretary set the automobile-resource exemption at $1500, relying on a 1979 survey of Food Stamp recipients. 45 C.F.R. 233.-20(a)(3)(i)(B)(2) (1993). Any amount of equity that exceeds the $1500 limit is counted toward the general $1000 resource limitation established by statute.

Champion, the mother of a minor child, applied for and was granted AFDC benefits from May to December 1991. In December 1991, the IDHS terminated Champion’s benefits after realizing that Champion’s ownership interest in her 1988 Mazda sedan exceeded the $1500 limit, and that this excess ownership interest pushed her over the $1000 resource limitation, making her ineligible for AFDC benefits. Champion, who works two jobs and who, as a resident of rural Iowa, relies on her automobile for transportation to her jobs, brought suit challenging the rule, arguing that it was promulgated in violation of the Administrative Procedure Act and is arbitrary and capricious. 5 U.S.C. § 706 (1988). She requested declaratory, injunc-tive, and monetary relief. Rejecting Cham[966]*966pion’s arguments, the District Court granted summary judgment for the defendants.

Champion then filed this timely appeal, renewing the arguments she made to the District Court. We review de novo a grant of summary judgment. As the parties agree that this case involves no disputed issues of material fact, summary judgment properly is awarded the party entitled to judgment as a matter of law. Pentel v. City of Mendota Heights, 13 F.3d 1261, 1263 (8th Cir.1994).

II.

Champion argues that the Secretary’s use of the 1979 Food Stamp survey to determine the appropriate automobile-resource exemption for the AFDC program resulted in an arbitrary and capricious rule because the data was not relevant to the AFDC population. She further contends that the resulting rule is contrary to AFDC’s explicit statutory goal of aiding recipients in achieving maximum self-support and personal independence. The government counters by noting that in OBRA Congress granted the Secretary broad discretion in establishing the automobile-resource exemption and that the purpose of OBRA, the specific enabling statute, was to reduce federal spending and restrict AFDC benefits only to those most in need. Thus, the government argues that the Secretary’s reliance on the Food Stamp survey was reasonable and that the rule fully comports with the statutory goals.

Our review of agency actions now is a familiar one. First, if Congress has addressed directly the precise issue at hand, the agency must execute Congress’s directives. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). However,

[i]f Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative 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. Because here Congress expressly has delegated to the Secretary the power to establish the amount of the automobile exemption, 42 U.S.C. § 602(a)(7)(B)®, deference to the Secretary’s decision is “particularly important,” and we will strike the regulation only if the Secretary’s decision is unreasonable, Emerson v. Steffen, 959 F.2d 119, 121 (8th Cir.1992).

A.

Although the Food Stamp survey is not a completely accurate reflection of the AFDC population, we have no basis for saying that the Secretary’s use of it was unreasonable. The survey collected data on household assets and incomes from a nationwide, statistically valid sample of 11,300 households. According to Paul Bordes, the HHS official responsible for providing analytical support for the regulation writing process, in 1981 no AFDC study existed that included information on automobile equity, but the population of Food Stamp recipients extensively overlaps that of AFDC recipients.

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33 F.3d 963, 1994 U.S. App. LEXIS 23094, 1994 WL 460822, Counsel Stack Legal Research, https://law.counselstack.com/opinion/teral-champion-v-donna-e-shalala-department-of-health-and-human-services-ca8-1994.