-
USCA1 Opinion
June 10, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________
No. 92-1764
JENNA SKIDGEL, ET AL.,
Plaintiff, Appellee,
v.
MAINE DEPARTMENT OF HUMAN SERVICES,
Defendant, Appellee.
v.
LOUIS W. SULLIVAN,
Defendant, Appelllant.
No. 92-1824
JENNA SKIDGEL, ET AL.,
Plaintiffs, Appellees,
v.
MAINE DEPARTMENT OF HUMAN SERVICES
ROLLIN IVES,
Defendants, Appellants.
____________
ERRATA SHEET
The opinion of this court issued on June 3, 1993, is amended
as follows:
Page 5, footnote 5, line 5: Change "principle" to
"principal".
Page 6, footnote 7, line 2: Change "principle" to
"principal".
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-1764
JENNA SKIDGEL, ET AL.,
Plaintiff, Appellee,
v.
MAINE DEPARTMENT OF HUMAN SERVICES,
Defendant, Appellee.
v.
LOUIS W. SULLIVAN,
Defendant, Appellant.
No. 92-1824
JENNA SKIDGEL, ET AL.,
Plaintiffs, Appellees,
v.
MAINE DEPARTMENT OF HUMAN SERVICES
ROLLIN IVES,
Defendants, Appellants.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
____________________
[Hon. Brock Hornby, U.S. District Judge]
___________________
____________________
Before
Torruella, Circuit Judge,
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Bownes, Senior Circuit Judge,
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and Stahl, Circuit Judge.
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____________________
Marina E. Thibeau, Assistant Attorney General, and Michael E.
__________________ ___________
Carpenter, Attorney General, on brief for defendant-appellant Rollin
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Ives, Commissioner, Maine Department of Human Services.
John F. Daly, Appellate Staff, Civil Division, Department of
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Justice, with whom Stuart M. Gerson, Assistant Attorney General, and
________________
Richard S. Cohen, United States Attorney, and Robert S. Greenspan,
_________________ ____________________
were on brief for third-party defendant-appellant Louis W. Sullivan,
Secretary of Health and Human Services.
Frank D'Alessandro, with whom James Crotteau, Patricia Ender, and
__________________ ______________ ______________
Pine Tree Legal Assistance, were on brief for plaintiffs-appellees.
__________________________
____________________
June 3, 1993
____________________
BOWNES, Senior Circuit Judge. The Secretary of the
BOWNES, Senior Circuit Judge.
____________________
Department of Health and Human Services (HHS) and the Maine
Department of Human Services (DHS) appeal a decision of the
district court invalidating and enjoining the enforcement of
certain regulations and policies regarding Aid to Families
with Dependent Children (AFDC), upon finding that they
conflicted with the plain language of the Social Security
Act, 42 U.S.C. 601 et seq.
__ ___
At issue is the application of two distinct
provisions of the Social Security Act, 42 U.S.C.
602(a)(38), covering the composition of the AFDC filing
unit,1 and 42 U.S.C. 607 (b)(1)(B)(iv), covering the
____________________
1. 42 U.S.C. 602(a)(38) provides, in pertinent part, that,
in making the determination under paragraph (7)
with respect to a dependent child and applying
paragraph (8), the State agency shall (except as
otherwise provided in this part) include--
(A) any parent of such child, and
(B) any brother or sister of such child, if
such brother or sister meets the conditions
described in clauses (1) and (2) of section 606(a)
of this title or in section 607(a) of this title,
if such parent, brother, or sister is living in the
same home as the dependent child, and any income of
or available for such parent, brother, or sister
shall be included in making such determination . .
. [.]
We refer to the AFDC filing unit as the family filing unit,
and to this provision of the statute as the family filing
rule.
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2
deduction of unemployment compensation from an AFDC
payment,2 to a particular situation. That situation occurs
where the principal wage-earner in a two-parent household
becomes unemployed, and the household includes both at least
one child common to the two parents and at least one child
who is the stepchild of the principal earner. The
stepchild[ren] of the principal earner receive AFDC, pursuant
to 42 U.S.C. 606(a), because they are deprived of parental
support due to the continuous absence from the home, death or
incapacity of a parent.3 Prior to the unemployment of the
____________________
2. 42 U.S.C. 607(b)(1)(B)(iv) provides,
for the reduction of the aid to families with
dependent children otherwise payable to any child
or relative specified in subsection (a) of this
section by the amount of any unemployment
compensation that such child's parent described in
subparagraph (A)(i) receives under an unemployment
compensation law of a State or of the United States
. . . [.]
3. 42 U.S.C. 606(a) provides:
The term "dependent child" means a needy child (1)
who has been deprived of parental support or care
by reason of the death, continued absence from the
home (other than absence occasioned solely by
reason of the performance of active duty in the
uniformed services of the United States), or
physical or mental incapacity of a parent, and who
is living with his father, mother, grandfather,
grandmother, brother, sister, stepfather,
stepmother, stepbrother, stepsister, uncle, aunt,
first cousin, nephew, or niece, in a place of
residence maintained by one or more of such
relatives as his or their own home, and (2) who is
(A) under the age of eighteen, or (B) at the option
of the State, under the age of nineteen and a full-
time student in a secondary school (or in the
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3
principal earner, neither the principal earner nor the
child[ren] common to both parents are included in the family
filing unit.
Pursuant to HHS/DHS policy and regulations, once
the principal earner becomes unemployed, the family filing
rule requires that the principal earner and the child[ren]
common to both parents be included in the filing unit, as
well.4 Such inclusion is required because the child[ren]
are considered dependent under a separate provision of the
statute, 42 U.S.C. 607(a), due to the unemployment of the
____________________
equivalent level of vocational or technical
training), if, before he attains age nineteen, he
may reasonably be expected to complete the program
of such secondary school (or such training)[.]
4. The Secretary's interpretation of the family filing rule
has been embodied in regulations and official transmissions.
See 45 C.F.R. 206.10(a)(1)(vii) which provides, in part,
___
that,
in order for the family to be eligible, an
application with respect to a dependent child must
also include, if living in the same household and
otherwise eligible for assistance:
(A) Any natural or adoptive parent, or stepparent
(in the case of States with laws of general
applicability); and
(B) Any blood-related or adoptive brother or
sister.
. . .
See also SSA Transmittal 86-1 at 9 (Jan. 12, 1986) (on two-
___ ____
step process whereby application of family filing rule must
precede determination of need).
-4-
4
parent who is the principal earner.5 According to the
Secretary's interpretation of the family filing rule, the
common child[ren] now meet "the conditions described in . . .
607(a)." 42 U.S.C. 602(a)(38).
In the case of the plaintiff class,6 the
unemployment compensation received by the principal earner is
then subtracted from the AFDC benefit payable to the newly-
composed family filing unit. Pursuant to 45 C.F.R.
233.20(a)(3)(ii) (B), unemployment compensation is not
considered as income and does not figure into the calculation
of need, but is deducted from the AFDC payment after the
____________________
5. 42 U.S.C. 607(a) provides:
The term "dependent child" shall, notwithstanding
section 606(a) of this title, include a needy child
who meets the requirements of section 606(a)(2) of
this title, who has been deprived of parental
support or care by reason of the unemployment (as
determined in accordance with standards prescribed
by the Secretary) of the parent who is the
principal earner, and who is living with any of the
relatives specified in section 606(a)(1) of this
title in a place of residence maintained by one or
more of such relatives as his (or their) home.
6. The class was certified as follows:
All households in the State of Maine who are
recipients of AFDC benefits as of November 16,
1990, or who will apply for AFDC benefits on or
after November 16, 1990, and whose household
composition includes at least two adults and two
children where at least one child is the child of
one but not both of the adults in the household and
at least one child is the child of both adults in
the household and where the adult who is not the
parent of the first child receives unemployment
benefits.
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5
amount of that payment has been established.7 This special
treatment of unemployment compensation is the Secretary's
interpretation and implementation of 42 U.S.C.
607(b)(1)(B)(iv). The practical result of the HHS/DHS
policies is a reduction of the AFDC payment going to families
in the plaintiff class.8
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7. 45 C.F.R. 233.20(a)(3)(ii)(B) provides:
In determining financial eligibility and the amount
of the assistance payment all remaining income
(except unemployment compensation received by an
unemployed principal earner) and, except for AFDC,
all resources may be considered in relation to
either the State's need standard or the State's
payment standard. Unemployment compensation
received by an unemployed principal earner shall be
considered only by subtracting it from the amount
of the assistance payment after the payment has
been determined under the State's payment method[.]
8. The operation of these policies can be illustrated by
taking the case of one of the plaintiffs, Deborah Blake. Ms.
Blake and her husband live with their mutual child, Shawn
Blake, and Ms. Blake's two children, James and Courtney
Morton. While Mr. Blake was employed, the family received
AFDC for Ms. Blake's children, James and Courtney Morton, who
met the definition of dependent children provided in 606(a)
of the statute. At that time, the family filing rule
required that the two dependent children, James and
Courtney, and their parent, Ms. Blake, be included in the
filing unit. The rule did not require the inclusion of
either Shawn Blake, because he was not considered a dependent
child, or Mr. Blake, because he was not the parent of an
AFDC-eligible child. A portion of Mr. Blake's income was,
however, deemed available to the filing unit, pursuant to the
stepparent deeming rule, explained infra Part I, Section A.
_____
Before the unemployment of Mr. Blake, the family received
$453.00 each month in AFDC, and Mr. Blake earned $697.00 a
month.
Once Mr. Blake became unemployed, the family filing rule
required the inclusion of both Shawn (who then met the
definition of a dependent child in 607(a)) and his parent,
Mr. Blake. Because unemployment compensation is disregarded
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6
Plaintiffs brought this action against defendant
Rollin Ives, Commissioner of the Maine Department of Human
Services, arguing that the State was violating federal
statutory standards in determining the amount of AFDC
payments going to members of their class. Ives filed a
third-party complaint against Louis Sullivan, Secretary of
the United States Department of Health and Human Services.
The case went to the district court on a stipulated record.
In a memorandum decision, the district court ruled
in favor of the plaintiffs on the grounds that the HHS/DHS
interpretations of both the family filing rule, 42 U.S.C.
602(a)(38), and the provision regarding unemployment
compensation, 42 U.S.C. 607(b)(1)(B)(iv), impermissibly
conflicted with the plain meaning of the statute. See
___
Skidgel v. Ives, No. 90-0209-B, slip op. (D. Me. Jan. 2,
_______ ____
1992) [hereinafter Memorandum Decision]. The district court
read the family filing rule to require that children defined
as dependent under 607(a) be determined financially "needy"
before they could be included in the filing unit. See id. at
___ __
____________________
in the determination of need, the new filing unit initially
met the criteria for the maximum AFDC payment for a family of
five, $685.00. Pursuant to regulations interpreting
607(b)(1)(B) (iv), the State then subtracted the amount of
unemployment compensation received by Mr. Blake, $498.80,
from the maximum AFDC payment of $685.00, to arrive at an
AFDC payment of $186.00. Although the total level of
government income going to the family increased following Mr.
Blake's unemployment, the AFDC payment decreased
considerably.
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7
7. The district court also determined that
607(b)(1)(B)(iv), by its express terms, applies only to
children eligible under 607(a), and does not reach children
eligible under 606(a). See id. at 4-5. On March 23, the
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court issued a final judgment enjoining the enforcement of
the implicated HHS/DHS policies and regulations. See Skidgel
___ _______
v. Ives, No. 90-0209-B-H, slip op. (D. Me. Mar. 23, 1992)
____
(final judgment).
Plaintiffs/appellees urge us to affirm the district
court's decision. Defendants/appellants argue that the
district court's reading of 42 U.S.C. 602(a)(38)
contravenes the very purpose of the rule, and draws an
artificial distinction between 606(a) children and 607(a)
children. As a result of the district court's holding,
non-needy children who meet the definition of a dependent
child provided in 607(a) are not compulsorily included in
the family filing unit. By contrast, the weight of federal
authority requires non-needy children who meet the definition
of a dependent child provided in 606(a) to be so included.
See discussion infra Part II, Section A 3. With respect to
___ _____
the district court's reading of 607(b)(1)(B)(iv), it is
defendants' position that the court failed to consider
textual ambiguity and ultimately neglected to reconcile its
reading with the family filing rule, 42 U.S.C. 602(a)(38).
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8
For the reasons that follow, we reverse the decision of the
district court.
I.
I.
Statutory and Regulatory Scheme
Statutory and Regulatory Scheme
_______________________________
AFDC is a cooperative federal-state program
authorized by Title IV-A of the Social Security Act, 42
U.S.C. 601 et seq. The AFDC program provides cash
__ ___
assistance to certain needy families with dependent children.
The program is administered by the states in accordance with
the Social Security Act and the regulations and directives of
the Secretary of HHS. We begin with a brief explanation of
the implicated statutory provisions and the regulations and
policies which implement them.
A. Determination of Financial Need
A. Determination of Financial Need
__ _______________________________
In addition to meeting other eligibility
requirements, families receiving AFDC must be financially
needy. The main statutory provision covering need is 42
U.S.C. 602(a)(7), which provides guidelines to state
agencies for assessing the resources available to a family
unit. In the paragraph which follows, 42 U.S.C. 602(a)(8),
Congress sets forth criteria for certain income that may be
disregarded in the determination of need. The family filing
rule, 42 U.S.C. 602(a)(38), establishes the individuals
whose resources must be considered in determining need in
accordance with 42 U.S.C. 602(a)(7) and (8).
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9
Financial eligibility is determined by comparing a
family unit's countable income (i.e., income remaining after
disregards allowed by law) to the standard of need adopted by
the State. The standard of need is "the amount deemed
necessary by the State to maintain a hypothetical family at a
subsistence level." Shea v. Vialpando, 416 U.S. 251, 253
____ _________
(1974). States assign a standard according to the size of
the unit applying for AFDC. In 1990 in Maine the standard of
need for a family of four was $819.00. An AFDC payment in
Maine is calculated by subtracting a family unit's countable
income, other than unemployment compensation received by a
principal earner, from the standard of need established for
the relevant family size. States are not, however, required
to provide families with the full standard of need. In
Maine, the maximum AFDC payment is a fixed percentage (69.4%)
of the standard of need. Maine permits families to fill the
"gap" between the need standard and the maximum payment
standard without penalty. In other words, families with
countable income below the need standard, but above the level
of payment paid by the State, may still receive the maximum
payment from the State. This gap has practical ramifications
in the instant case because of the operation of the
stepparent deeming rule, codified at 42 U.S.C. 602(a)(31).
In the case of the plaintiff class, prior to the unemployment
of the principal earner the family filing unit did not
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10
include either the principal earner or the half-siblings who
were not then dependent children for the purposes of the
statute. See 42 U.S.C. 602(a)(38). A portion of the
___
stepparent's income was, however, "deemed" available to the
unit, pursuant to the stepparent deeming rule. For many in
the plaintiff class, the income deemed available fell within
the gap permitted by the State, so that when the principal
earners were employed, the AFDC benefit to the unit eligible
under 606(a) either was not affected or was only marginally
affected by the deemed income.
B. Unemployment Compensation and 607
B. Unemployment Compensation and 607
__ ___________________________________
The current AFDC statute provides for two
categories of "dependent children": those defined in
606(a), who are deprived due to the continuous absence, death
or incapacity of a parent, and those defined in 607(a), who
are deprived due to the unemployment of the parent who is the
principal earner. As originally enacted, AFDC was limited to
the category of children defined in 606(a). In the 1960's,
Congress expanded the program to include children deprived
because of a parent's unemployment. At that time, the
so-called AFDC-UP program (unemployed parent, earlier called
AFDC-UF, for unemployed father) was available only to those
families who were not receiving unemployment benefits. See
___
Philbrook v. Glodgett, 421 U.S. 707, 711 (1975). In
_________ ________
Philbrook, the Supreme Court decided, in essence, that
_________
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11
parents had the choice of applying either for unemployment
compensation or for AFDC. See id. at 719. In response to
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the Philbrook decision, Congress amended the statute to
_________
assure that unemployed parents would seek and obtain
unemployment compensation first, and that AFDC payments would
be used only to "supplement UC benefits up to AFDC-UF
levels." See H.R. CONF. REP. NO. 1745, 94th Cong., 2d Sess.
___
28 (1976), reprinted in 1976 U.S.C.C.A.N. 5997, 6048-49. The
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1976 amendment was the predecessor to the current
607(b)(1)(B)(iii) and (iv). See Pub. L. No. 94-566,
___
507(a)(2), 90 Stat. 2688 (1976) (originally codified at 42
U.S.C. 607(b)(2)(C) and (D) (1976)).
C. The Family Filing Rule
C. The Family Filing Rule
__ ______________________
Prior to 1984, families applying for AFDC lawfully
could choose to exclude household members from the filing
unit if those members had resources that would reduce the
family's benefit or make the family ineligible for AFDC. In
1983, the Secretary of HHS proposed an amendment "`to
establish uniform rules on the family members who must file
together for AFDC, and the situations in which income must be
counted.'" Bowen v. Gillard, 483 U.S. 587, 592 (1986)
_____ _______
(citing Letter of 25 May 1983, to the Honorable George Bush,
President of the Senate). As part of the Deficit Reduction
Act of 1984, Pub. L. No. 98-369, (DEFRA), Congress amended
the AFDC program by adopting the family filing rule. See 98
___
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12
Stat. 1145 (1984)(codified, as amended, at 42 U.S.C.
602(a)(38)). The legislative purpose behind the enactment of
the rule, as reported by the Senate Finance Committee, was as
follows:
"`Present Law
"`There is no requirement in the present law that
parents and all siblings be included in the AFDC
filing unit. Families applying for assistance may
exclude from the filing unit certain family members
who have income which might reduce the family
benefit. For example, a family might choose to
exclude a child who is receiving social security or
child support payments, if the payments would
reduce the family's benefits by an amount greater
than the amount payable on behalf of the child.
. . .
"`Explanation of Provision
"`The provision approved by the Committee would
require States to include in the filing unit the
parents and all dependent minor siblings (except SSI
recipients and any stepbrothers and stepsisters)
living with a child who applies for or receives AFDC
. . . .
"`This change will end the present practice whereby
families exclude members with income in order to
maximize family benefits, and will ensure that the
income of the family members who live together and
share expenses is recognized and counted as
available to the family as a whole.'"
Bowen, 483 U.S. at 593-94 (quoting from S. Print No. 98-169,
_____
980 (1984)). Thus, the amendment sought to compel the
inclusion in the family filing unit of dependent children
living in the same home as the child receiving AFDC. When it
was enacted, the family filing rule required only the
inclusion of 606(a) children, children who were deprived
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due to the continuous absence, incapacity or death of a
parent. As part of the Tax Reform Act of 1986, Congress
amended 602(a)(38) to include children who meet the
conditions described in 607(a). See 100 Stat. 2085, 2917
___
(1986) ( 1883(b)(2)(A) of the Act). Under a subsection
entitled, "Technical Corrections to AFDC and Child Support
Programs," the Senate Report accompanying the amendment
explained that no distinction between children deprived due
to the absence, incapacity or death of a parent, and those
deprived due to the unemployment of a parent, was intended.
S. REP. NO. 313, 99th Cong., 2d Sess. 1074 (1986).9
II.
II.
Analysis
Analysis
________
The issues involved in this case are purely ones of
statutory construction. Our review is, therefore, de novo.
United States v. M.I.M., 932 F.2d 1016, 1019 (1st Cir. 1991).
_____________ ______
See generally Commonwealth of Mass. v. Lyng, 893 F.2d 424,
___ _________ ______________________ ____
428 (1st Cir. 1990) (questions of law decided by a trial
court are not binding on the reviewing court).
A. The Family Filing Rule
A. The Family Filing Rule
__ ______________________
____________________
9. The Senate Report provides, in part, that,
no such distinction between these two categories
was intended, and this provision will clarify that,
in a State that provides AFDC on the basis of the
unemployment of a parent, siblings who are
dependent for that reason must be included in the
AFDC unit.
Id.
___
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14
1. Background
1. Background
__ __________
We begin by addressing the application of the
family filing rule, 42 U.S.C. 602(a)(38), to the plaintiff
class. The rule provides that in making the determinations
of need with respect to a dependent child, states must
include any parent of a dependent child and any brother or
sister if such brother or sister "meets the conditions
described in clauses (1) and (2) of section 606(a) or in
section 607(a)." Id. Plaintiffs challenge the State's
__
practice of including the child common to both parents in the
family filing unit because, under the Secretary's
interpretation, the child meets the conditions described in
607(a). We must determine what Congress meant when it
referred to the "conditions described" in 607(a); in
particular, whether Congress intended to incorporate need as
a condition that must be met before a child may be included
in the filing unit. Although several courts have interpreted
the family filing rule with respect to children defined as
dependent under 606(a), the rule as originally enacted,
none has specifically interpreted the rule with respect to
607(a) children. See discussion infra Part II, Section A 3.
___ _____
The district court held that the family filing rule
requires the inclusion of children who meet the definition of
dependent found in 607(a) only if such children are first
determined to be needy. In so holding, the district court
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15
recognized the abundance of federal authority requiring the
inclusion of children defined as dependent in 606(a)
without such a prior determination of need. See Memorandum
___
Decision at 7 n.11. The district court's reason for
distinguishing between these categories of children centered
on the placement of the word "needy" in the respective
sections of 606(a) and 607(a). Both sections begin by
stating that "the term `dependent child' means a needy child"
who meets certain conditions. 42 U.S.C. 606(a) and
607(a). The essence of the district court's distinction was
that, because the word "needy" appears before clauses (1) and
(2) in 606(a),10 it is not to be considered in making the
determination under 606 (a) for the reason that the family
filing unit rule refers only to the conditions specified in
those clauses. In 607 (a), by contrast, the word needy
appears within the section which is not broken into numbered
clauses, and the family filing rule simply references
607(a).11 The placement of the word "needy" was the sole
basis for what the district court found to be the plain
meaning of the rule.
____________________
10. See supra note 3. The statute begins, "[t]he term
___ _____
`dependent child' means a needy child (1) who has been
deprived of parental support . . . [.]"
11. See supra note 5. Section 607(a) has no demarcated
___ _____
clauses, and simply begins, "[t]he term `dependent child'
shall, notwithstanding section 606(a) of this title, include
a needy child who has been deprived of parental support . . .
."
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16
Our inquiry does not end with the placement of the
word "needy" in 607(a) of the statute. We examine the
family filing rule in the context of its place in the
statutory scheme and in light of its statutory purpose. See
___
Conroy v. Aniskoff, 61 U.S.L.W. 4301, 4302 (U.S. March 31,
______ ________
1993) (No. 91-1353) (noting the "`cardinal rule that a
statute is to be read as a whole'" and that "the meaning of
statutory language, plain or not, depends upon context."
(citations omitted)); Evans v. Commissioner, Maine Dep't. of
______________________________________
Human Servs., 933 F.2d 1, 5 (1st Cir. 1991) (concluding on
_____________
the basis of the language of the statute as read in the
context of its structure and in the light of its purposes).
Cf. St. Luke's Hosp. v. Secretary of Health and Human Servs.,
__ ________________ ____________________________________
810 F.2d 325, 331 (1st Cir. 1987) (applying a detailed
analysis after an initial, literal reading of the statute).
A thorough analysis is especially warranted where, as here,
we are charged with interpreting a complex and technical
statute which has been amended over time and which contains
elaborate, internal cross-references.
As we explain below, we think that the term
"conditions described" in the family filing rule is ambiguous
with respect to children defined as dependent under 607(a).
When we find such ambiguity in a statute, we give
considerable weight to the interpretation rendered by the
agency charged with administering that statute. See Evans,
___ _____
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17
933 F.2d at 7. Our examination of the language in the
context of its place in the statutory scheme and in light of
its statutory purpose convinces us that the Secretary's
interpretation of 602(a) (38)(B) is not only permissible,
but fully consonant with the will of Congress. See Chevron
___ _______
U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S.
____________ __________________________________
837, 843 (1984) (explaining that if a statute is silent or
ambiguous with respect to the issue presented, the question
for the court is whether the agency's answer is based on a
permissible construction of the statute).
2. Ambiguity
2. Ambiguity
__ _________
The district court assumed that Congress meant the
term "conditions described" to incorporate all of the terms
listed in the cross-referenced section, 607(a), and thus to
include the term "needy." Although the term "needy" plainly
appears in 607(a), it does not necessarily follow that
Congress intended for that term to be a "condition described"
for the purpose of 602(a)(38). Section 607(a) and 606(a)
function in the statutory scheme to define the two categories
of "dependent children" who may be eligible for AFDC.
Regardless of which categorical definition is used, no child
or family may receive AFDC unless that child or family is
financially needy. The family filing rule has a different
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18
function in the statutory scheme; that of defining the unit
pursuant to which need is be determined under 602(a)(7).
This function is apparent from the plain terms of the rule,
itself, which begins: "in making the determination under
paragraph (7) . . . a State agency shall include . . . ." As
discussed supra in Part I Section A, need for AFDC purposes
_____
is not a fixed condition; its assessment depends on a variety
of factors. To assume that Congress intended to include need
among the "conditions described" for the purpose of the
family filing rule--which, by its plain terms, exists prior
to the assessment of need and as a basis for the definition
of need--is not the most sensible reading of the rule.
We find that it is not clear from the face of the
rule which conditions Congress intended to include when it
referred to the "conditions described" in 607(a). While in
the abstract, it might be reasonable to presume that a
reference to the "conditions described" in a cross-referenced
section refers to all descriptive terms contained in that
section, such a reading is problematic in this context. By
including "needy" as a "condition[] described," the district
court's interpretation does not properly account for, and
reads circularity into, the facially-evident function of the
family filing rule.
3. Case Law and Legislative History
3. Case Law and Legislative History
__ ________________________________
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Our examination of the case law interpreting the
family filing rule as originally enacted, and the legislative
history behind Congress' amendment of the rule to add
607(a), leads us to conclude that the district court's
interpretation is erroneous and to uphold the Secretary's
policy.
Part of examining the language in context entails
reviewing the case law which has interpreted the family
filing rule to compel the inclusion of non-needy children
defined as dependent under 606(a). Overwhelmingly, courts
have rejected the argument that a child must be needy before
that child is to be included in the family filing unit. See
___
Gorrie v. Bowen, 809 F.2d 508, 513-16 (8th Cir. 1987). See
______ _____ ___
also Bradley v. Austin, 841 F.2d 1288, 1294 (6th Cir. 1988);
____ _______ ______
Creaton v. Bowen, 826 F.2d 6 (9th Cir. 1987); Oliver v.
_______ _____ ______
Ledbetter, 821 F.2d 1507, 1513 (11th Cir. 1987). The Supreme
_________
Court, in a case upholding the constitutionality of the
family filing rule, dismissed the argument in a footnote,
citing to clear legislative intent to include non-needy
children in the family filing unit. See Bowen, 483 U.S. at
___ _____
593 n.5. The Court commented that construing the rule to
require the inclusion of only needy children was "completely
inconsistent with the intent of Congress as explained in the
Secretary's request for legislation, in the Senate Print, and
in the Conference Report as well." Id. Rather than pursuing
__
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its own analysis, the Court noted its satisfaction with that
performed by the district court in Gillard v. Kirk, 633 F.
_______ ____
Supp. 1529, 1548 (W.D.N.Y. 1986), and made favorable
reference to the Eighth Circuit's decision in Gorrie, 809
______
F.2d at 513-516. See Bowen, 483 U.S. at 587 n.5.
___ _____
The express purpose behind the enactment of the
family filing rule, as apparent in the Senate Print
referenced by the Supreme Court and cited and discussed supra
_____
in Part I, Section C, was to change the practice whereby
families could exclude children who had other resources,
i.e., children who were not independently needy, from the
family filing unit. See Bowen, 483 U.S. at 599 (noting that
___ _____
the purpose of the rule is to "deny [] a family the right to
exclude a supported child from the filing unit"). This
legislative history formed the cornerstone of the district
court's reading of the family filing rule to require the
inclusion of non-needy children in Gillard, 633 F. Supp. at
_______
1546.
It is true that in Gorrie, the other case cited by
______
the Supreme Court, the court began with the language of
606(a) and was initially persuaded by the placement of the
word "needy" outside the numbered clauses. The court did not
rest its conclusion solely on this reading, however, but went
on to do a detailed, contextual analysis of the family filing
rule. The detailed analysis corroborated that court's
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initial reading of the rule to require the inclusion of non-
needy children in the family filing unit. See Gorrie, 809
___ ______
F.2d at 513-16.
Unlike the court in Gorrie, the district court in
______
the instant case stopped with its reading of 607(a). The
court did not go on to consider the particular meaning that
term might have in the context of the family filing rule.
Had the district court continued to perform a detailed
analysis, it would have discovered that the legislative
purpose of the rule, and its function in the statutory
scheme, were not served by its reading. Like the Supreme
Court, we conclude that the real problem with construing the
rule to require the exclusion of non-needy children is that
such a construction flies in the face of Congressional intent
to end the practice of excluding non-needy children from the
filing unit. We are not persuaded by the truncated reading
of the district court, but proceed to address the district
court's correct concern that 607(a) is drafted differently
from 606(a).
The word "needy" appears in 607(a), and the
family filing rule references the entire section, whereas the
"needy" is offset in 606(a) and the family filing rule
refers to clauses that do not contain that term. The
question is what effect to give to that difference, given the
function of the rule in the statutory scheme, its purpose,
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and the manner in which the rule has been interpreted. In
other words, was Congress' cross-reference to a previously-
drafted section of the statute in which the criterion of need
is not set off in a separate clause but appears within the
referenced section, a clear signal of its intent to include
need as one of the "conditions described" as applied to
607(a) children? We do not think so.
First, to the extent that the issue is the
exclusion of non-needy children from the family filing unit,
the same analysis of legislative purpose used with respect to
606(a) children applies to this case. Moreover, in the
previously- cited Senate Print accompanying the DEFRA
amendment, the Congress made clear who the exceptions to the
family filing rule were to be. Namely, the provision would
require the inclusion of all dependent minor children except
SSI recipients and stepchildren. See Bowen, supra Part I,
___ _____ _____
Section C (citing S. Print No. 98-169 at 980). Otherwise,
the family filing unit rule was intended to be an inclusive
rule, inclusive especially of non-needy siblings.
Second, the Congressional history behind the
amendment of 42 U.S.C. 602(a)(38), to include children
eligible under 607(a), unambiguously expresses Congress'
intention not to distinguish between children eligible under
the two sections. See S. REP. NO. 313 at 1074, supra note 9
___ _____
and accompanying text. Congress, having omitted a reference
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to 607(a) children in the original rule, stated that it
intended to create no such distinction between children
eligible under 606(a) and children eligible under 607(a).
That Congress labeled the amendment a "[t]echnical
[c]orrection[]" further underscores its intention against
substantively different treatment of these categories of
children. In sum, we ascertain no basis for a finding that
Congress intended to treat these categories of children in a
substantively different manner, permitting the exclusion of
non-needy children eligible under 607(a), but compelling
the inclusion of such children eligible under 606(a).12
In overturning the finding of the district court,
we note that this matter of statutory construction is made
difficult by the patchwork manner in which the AFDC statute
has been enacted. We deal with a statute, and a section
within a statute, which has been amended frequently, and
which is not rewritten in its entirety with each amendment.
____________________
12. Plaintiffs note that the legislative history of the Tax
Reform Act, which amended the family filing rule to include
607(a) children, refers to the required inclusion of
dependent children. From Congress' use of the word
dependent, plaintiffs conclude that Congress meant to require
the inclusion of only needy 607(a) children. The
legislative history of the DEFRA amendment which created the
original family filing rule covering 606(a) children,
however, similarly refers to the compelled inclusion of
dependent children. As we have explained, the compelled
inclusion of 606(a) children has been upheld by other
federal courts. Plaintiffs' argument, without more, does
nothing to advance a reasonable basis for treating 607(a)
children differently from 606(a) children.
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As we observed in Sweeney v. Murray, 732 F.2d 1022, 1024-25,
_______ ______
1027(1st Cir. 1984), with regard to a different subsection of
the AFDC statute, the provision at issue in this case is
anything but elegantly drafted, but its legislative directive
is comparatively clear. We hold that the Secretary's policy
of requiring the inclusion of non-needy 607(a) children in
the filing unit resonates with the legislative purpose of the
rule and upholds its integrity in the statutory scheme.
B. The Reduction of AFDC by Unemployment Compensation
B. The Reduction of AFDC by Unemployment Compensation
__ __________________________________________________
The final issue is more difficult. The district
court held that the HHS/DHS practice of reducing AFDC
payments by the amount of the stepparents' unemployment
conflicted with the plain meaning of 42 U.S.C.
607(b)(1)(B)(iv). Once again, the district court anchored
its conclusion in what it characterized as plain meaning, and
ended its inquiry there. The court determined that
607(b)(1)(B)(iv) authorized the reduction only of the income
"`payable to [a] child . . . specified in [ 607(a)].'"
Memorandum Decision at 5. Thus, only the AFDC payments going
to children eligible under 607(a) would be reduced by the
unemployment compensation received by the principal earner.
Defendants point to two problems with the district
court's interpretation. First, the court ignored that
607(b)(1)(B)(iv) of the statute actually compels the
reduction of the AFDC payment otherwise payable to "a child
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or relative specified" in 607(a). The word "relative"
__ ________
creates an ambiguity in the statute which the court failed to
apprehend. Second, once this language is placed in the
context of the larger statutory scheme, the district court's
reading cannot be reconciled with the family filing rule.
For the reasons that follow, we conclude that deference to
the Secretary is proper in this instance.
We first examine the meaning of the word "relative"
in 607(b)(1)(B)(iv). That section directs attention to a
child or relative specified in 607(a). Turning to
607(a), one sees that the reference encompasses relatives
specified in 606(a)(1) -- a "father, mother, grandfather,
grandmother, brother, sister, stepfather, stepmother,
stepbrother, stepsister, uncle, aunt, first cousin, nephew,
or niece." 42 U.S.C. 606(a). Defendants argue that a
plausible interpretation of 607(b)(1)(B)(iv) is that it
directs the deduction of unemployment compensation from AFDC
payable to any 607(a) child, or to any listed, co-resident
relative of that child. Plaintiffs offer a strong contrary
argument that the relatives listed in 606(a)(1) are
intended to represent only the caretaker relatives of the
dependent child. Whether for the purposes of
607(b)(1)(B)(iv), Congress meant to provide a list of
co-resident relatives or to limit its reference to caretaker
relatives is, arguably, ambiguous. As we explained supra,
_____
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when we find ambiguity we give deference to the considered
interpretation of the Secretary. See Evans, 933 F.2d at 7.
___ _____
Even were we to agree with plaintiffs' argument as
to the meaning of the word "relative," we would still
encounter the problem of conflict with the later-enacted
family filing rule when we place 607(B)(1)(B)(iv) into the
context of the statutory scheme. As we have held, the family
filing rule applies to 607(a) children. The rule
establishes a uniform system whereby need is calculated on
the basis of the collective needs of the household. Adopting
the plaintiffs' reading of 607(b)(1)(B)(iv) would lead to
the anomalous practice of assessing need collectively, and
then splintering the family unit at the point of determining
the proper AFDC payment. To assess need based on one
picture, and arrive at benefits based on another, is
unworkable and undercuts the policy behind the family filing
rule. See Bowen, supra Part I Section C (citing S. Print No.
___ _____ _____
98-169 at 980) (noting that one purpose of the rule is to
"ensure that the income of family members that live together
and share expenses is recognized and counted available to the
family as a whole").
Where different provisions of the same statutory
scheme are in tension, a court should make every effort to
construe such provisions so as to achieve consistency and
harmony. See Atwell v. Merit Systems Protection Bd., 670
___ ______ _____________________________
-27-
27
F.2d 272, 286 (D.C. Cir. 1981) (provisions should, wherever
possible, be construed to achieve consistency); Citizens to
___________
Save Spenser County v. EPA, 600 F.2d 844, 871 (D.C. Cir.
____________________ ___
1979) (duty to achieve harmonization of conflicting
provisions). To the extent that the issue is one that has
the potential for undermining the policy behind the family
filing rule, we believe that the Secretary is in the best
position to resolve the conflict. See Chevron, 467 U.S. at
___ _______
844 (1984) (citing United States v. Shimer, 367 U.S. 374,
_____________ ______
382, 383 (1961), for the proposition that the principle of
deference to administrative interpretations is followed
whenever a decision as to the meaning of a statute involves
reconciling conflicting policies). Our conclusion is
buttressed by the fact that the Secretary was involved in
proposing and drafting the family filing rule. See Gorrie,
___ ______
809 F.2d at 514 (noting the Secretary's involvement in
proposing the legislation for the purpose of establishing
rules about who must file together for AFDC); Bowen, 483 U.S.
_____
at 592, 593 n.5 (same); St. Luke's Hosp., 810 F.2d at 331
________________
(counseling deference where the Secretary was present at the
statute's creation and thus is likely to be in a better
position to know the intent of the enacting Congress).
Finally, we observe, as did the district court,
that it is not at all clear that Congress has addressed the
precise issue presented; namely, the application of these
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distinct statutory provisions to the particular situation of
families composed of both 606(a) and 607(a) children. In
Chevron, the Supreme Court explained that in construing a
_______
statute courts should first seek to ascertain "whether
Congress has directly spoken to the precise question at
issue." Chevron, 467 U.S. at 842. Although we do not take
_______
the command to mean that Congress must anticipate all of the
possible scenarios that might arise under a statute, we
believe that this is a case in which deference to the
interpretation of the Secretary is especially warranted. As
we explained in St. Luke's Hosp., 810 F.2d at 331, "[a]n
_________________
implied delegation of a law-declaring function is especially
likely where, as here, the question is interstitial, involves
the everyday administration of the statute, implicates no
special judicial expertise, and is unlikely to affect broad
areas of the law." Cf. Drysdale v. Spirito, 689 F.2d 252,
__ ________ _______
261 (1st Cir. 1982) (counseling deference where the issue is
interstitial, and "imbued with administrative history and
complexity").
The factors of ambiguity in a statute, conflicting
statutory provisions, and a complex, interstitial question
arising in the daily administration of the statute--all
counsel deference to the Secretary. We must only assess
whether the Secretary's interpretation is permissible. We
find that the Secretary's policy harmonizes the two statutory
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provisions, while doing violence to neither individually.
The Secretary sensibly applies the family filing rule. In
reading 607(b)(1)(B)(iv) to require the deduction of
unemployment compensation from the AFDC payment, the
Secretary reasonably effectuates the will of Congress to
treat AFDC as a supplement to unemployment compensation,
rather than treating the two as alternative forms of
assistance.
At oral argument, both parties highlighted
inequities resulting from the respective interpretations of
the district court and the Secretary. Under the district
court's reading, families which contain both 607(a)
children and 606(a) children receive a greater AFDC benefit
than that received by families who are composed entirely of
606(a) children or entirely of 607(a) children. Defendants
pointed out that, by carving out two units, the district
court effectively permits one unit to receive the maximum
payment of AFDC, while the other one receives the maximum
payment of unemployment compensation. Plaintiffs emphasized
that under the Secretary's reading, families composed of both
606(a) and 607(a) children receive less AFDC than
families composed only of 606(a) children. Once AFDC is
characterized in the light of its statutory purpose as a
supplement to unemployment income, however, it is apparent
that the total income going to families with both categories
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of children is no less than that going to a 606(a) family
composed of the same number of persons.
We recognize the hardship visited on families in
the plaintiff class, whose life circumstances changed
dramatically following the unemployment of the principal
earner. The income going to the family unit was reduced by
the onset of unemployment, and then was further diminished by
reduction of the AFDC payment in the amount of unemployment
compensation received. The impact on the families in the
plaintiff class of the HHS/DHS policies is exacerbated by the
way in which Maine treats the gap between the standard of
need and the maximum AFDC payment. See discussion supra Part
___ _____
I, Section A. Maine's policy permitted many families prior
to the unemployment of the principal earner to attain the
maximum AFDC payment because the amount of countable income
earned by the principal earner fell within the gap. See id.
___ __
Maine's treatment of the gap, however, generally permits more
families to live at a higher level of subsistence, and has
not been challenged by the plaintiff class.
In the end, we must acknowledge that the Congress,
HHS and DHS are charged with the difficult task of allocating
limited funds across a range of needy families. Overall, we
believe that the practical implications of the Secretary's
reading of the statute, when viewed allocationally, are more
equitable than those flowing from the construction given by
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the district court. The decision of the district court is
Reversed. No costs.
Reversed. No costs.
________ ________
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Document Info
Docket Number： 92-1764
Filed Date： 6/10/1993
Precedential Status： Precedential
Modified Date： 9/21/2015