Rehearing and Rehearing In Banc Denied November 17, 1971.
DUNIWAY, Circuit Judge:
Following a hearing, the Secretary of Health, Education and Welfare (the Secretary), acting through the Administrator of Social and Rehabilitation Service (the Administrator), determined that certain public-assistance plans of the State of Arizona failed to conform to requirements imposed by federal law and regulations. The Secretary ordered that federal financial support for the affected Arizona public-assistance programs be discontinued for the duration of the nonconformities. In No. 71-1177, Arizona petitions this court for review of the Secretary's final decision, under 42 U.S.C. § 1316(a). Several organizations representing welfare recipients had participated in the hearing as intervenors. Those organizations seek to intervene as respondents in No. 71-1177. In addition, in No. 71-1250 intervenors
A. The Statutory Scheme.
Pursuant to the Social Security Act (the Act), the federal government provides grants-in-aid to states that administer programs for supplying assistance to specified categories of needy individuals and families. Four such programs are involved here: (1) Old-Age Assistance (OAA) under Title I of the Act, 42 U.S.C. §§ 301-306; (2) Aid to Families with Dependent Children (AFDC) and Child Welfare Services (CWS) under Title IV, 42 U.S.C. §§ 601-610, 620-626; (3) Aid to the Blind (AB) under Title X, 42 U.S.C. §§ 1201-1206; and (4) Aid to the Permanently and Totally Disabled (APTD) under Title XIV, 42 U.S.C. §§ 1351-1355.
States choosing to receive these grants-in-aid are required to formulate plans for administering the assistance programs. The states have free rein in designing many aspects of the plans, such as establishing criteria for need and setting the level of benefits to be paid. The Act, however, prescribes certain requirements with which all state plans must comply. See 42 U.S.C. §§ 302(a), 602(a), 1202(a), 1352(a). State plans must be approved by the Secretary before they can be implemented. The Secretary cannot approve any plan unless it meets the specified requirements and, in addition, does not impose as a condition of eligibility for assistance under
Once approved, a state's plan is subject to continuing scrutiny by the Secretary to ensure its continuing conformity to the federally imposed requirements and its continuing freedom from the federally proscribed conditions, both on the face of the plan and in its administration. 42 U.S.C. §§ 304, 604(a), 1204, 1354. Should the Secretary call into question the continuing conformity of the plan or of its administration to federal requirements, he must provide reasonable notice and opportunity for hearing to the state agency administering the plan. If, following a conformity hearing, the Secretary determines that the plan or its administration no longer meets federal requirements, he must terminate further federal payments to the state program until the non-compliance is cured.
Finally, if a state is dissatisfied with the Secretary's final decision, it may file a petition for review of the decision in the appropriate court of appeals. 42 U.S.C. § 1316(a).
B. The Background of This Case.
1. Administrative proceedings.
On July 8, 1970, the Secretary of Health, Education and Welfare, acting through the Administrator, notified the Commissioner of the Arizona State Department of Public Welfare that a hearing would be held on August 18, 1970, to determine whether four of Arizona's public assistance plans (OAA; AFDC and CWS; AB; and APTD) were in conformity with federal requirements and, if not, whether federal grants-in-aid to those programs should be terminated. The Administrator's notice specified four issues to be considered at the hearing, and noted that HEW and Arizona officials had been unable to reach agreement on those issues after extensive negotiations.
The conformity hearing was governed by HEW regulations promulgated on July 29, 1970. 45 C.F.R. Part 213 (originally promulgated in 35 Fed.Reg. 12180).
2. Proceedings before this court.
On February 8, 1971, Arizona filed with this court its petition in No. 71-1177 to review the Secretary's final decision, and also a motion to stay enforcement and execution of the Secretary's termination order pending this court's decision. On February 18, HEW filed a motion agreeing with Arizona's request for a stay, provided that this court would order expedited briefing and argument. On February 22, we granted the stay and ordered the case expedited. On March 5, intervenors moved for leave to intervene in No. 71-1177, and this court granted that motion on March 22, "without prejudice to the right of the Department of Health, Education and Welfare to seek to limit intervenors to the issues presented by the review of the Arizona State Department of Public Welfare."
The petition for review in No. 71-1250 was filed by intervenors on February 22, 1971. It requested (1) review of that part of the Secretary's final decision denying them permission to raise additional issues at the conformity hearing and (2) permission to be heard as respondents on those issues raised by Arizona's petition for review in No. 71-1177. Arizona moved to dismiss intervenors' petition, and on March 10 this court ordered that the ruling on Arizona's motion to dismiss be reserved for the panel hearing the case on the merits. Point (2), however, has already been effectively disposed of by this court's order of March 22 in No. 71-1177, permitting intervenors to respond in that case. Accordingly, the only question left open under Arizona's motion to dismiss relates to point (1) of intervenors' petition.
The waters were subsequently and unfortunately muddied when, on April 9, Arizona filed a second motion to dismiss intervenors' petition in No. 71-1250.
The flurry of motions in these expedited cases has produced an unfortunate amount of confusion and an apparent contradiction between our March 22 order in No. 71-1177 and our April 26 order in No. 71-1250. To alleviate the confusion, we now grant HEW's motion to vacate our April 26 order in No. 71-1250. To remove any lingering doubts, we affirm our order of March 22, permitting intervention in No. 71-1177. Consequently, we need only dispose of Arizona's motion to dismiss intervenors' petition in No. 71-1250.
C. This Court's jurisdiction to Entertain the Petition for Review in No. 71-1250.
Intervenors' petition for review of that part of the Secretary's final decision denying their request to raise additional issues at the conformity hearing. Arizona's second motion to dismiss asserts that we lack jurisdiction to entertain the petition under 42 U.S.C. § 1316 (a). We agree.
Section 1316(a) states, in relevant part:
Thus Congress has conferred on this court jurisdiction to entertain petitions for review of the Secretary's decisions following conformity hearings under the Social Security Act. The express grant of jurisdiction is made in section 1316 (a) (5), which does not expressly limit our jurisdiction to petitions filed by certain parties. However, subsection (5) is a part of § 1316, and subsection (3) supplies the context for subsection (5), and subsection (3) provides only for states
The legislative history of section 1316 shows that Congress intended to confer jurisdiction only where the petition for review is filed by the state. The purpose of the section was to permit aggrieved states, for the first time, "to receive a judicial determination of their disagreement with the Department [of HEW]" on the issue of nonconformity. 111 Cong.Rec. 2714 (1965) (remarks of Representative Curtis). See also Hearings on H.R. 6675, Before the Senate Finance Comm., 89th Cong., 1st Sess., Part I, at 215 (1965) (statement of the Secretary of HEW); H.R.Rep.No.213, 89th Cong., 1st Sess., at p. 131 (1965); 111 Cong.Rec. 3066 (1965) (remarks of Senator Javits).
The courts of appeal are not courts of general jurisdiction; they have only the jurisdiction specifically conferred upon them by acts of Congress. American Federation of Labor v. N. L. R. B., 1940, 308 U.S. 401, 404, 60 S.Ct. 300, 84 L.Ed. 347; Turkel v. F. D. A., 6 Cir., 1964, 334 F.2d 844, 846; 9 Moore's Federal Practice ¶ 110.01, at 47 (2d ed. 1970); cf. American Power & Light Co. v. S. E. C., 1945, 325 U.S. 385, 389-390, 65 S.Ct. 1254, 89 L.Ed. 1683. Section 1316(a) confers upon us jurisdiction to entertain only petitions for review of the Secretary's final decisions that are filed by states. We therefore have no jurisdiction to entertain intervenors' petition in No. 71-1250, unless intervenors can demonstrate that jurisdiction is conferred on us by another source.
Intervenors attempt such a demonstration. Asserting that, as organizations of welfare recipients, they have suffered a "legal wrong" by the Administrator's denial of their request to broaden the scope of the conformity hearing, 5 U.S.C. § 702, intervenors argue that they have standing to seek judicial review and that they are therefore entitled to review in this court. Their argument is faulty. Admittedly the concept of standing is multifaceted and often ill-defined, see, e. g., Tigar, Judicial Power, the "Political Question Doctrine," and Foreign Relations, 17 U.C. L.A.L.Rev. 1135, 1138-39 n. 11 (1970), but it has never been extended so far as to defeat the jurisdictional limitations placed upon this court by Congress. The elemental distinction between a litigant's standing and an appellate court's jurisdictional limitations is fatal to intervenors' argument. Intervenors rely extensively on National Welfare Rights Organization v. Finch, 1970, 139 U.S. App.D.C. 46, 429 F.2d 725, to buttress
At oral argument the question arose whether the Administrative Procedure Act, 5 U.S.C. § 703, taken together with 42 U.S.C. § 1316(a), confers jurisdiction upon this court.
Arizona's motion to dismiss the petition for review in No. 71-1250 must be granted.
D. Intervenor D.N.A.'s Attempt to Raise the Administrator's Denial in No. 71-1177.
By our order of March 22, 1971, intervenors were permitted to participate in the review in No. 71-1177, "without prejudice to the right of the Department of Health, Education and Welfare to seek to limit intervenors to the issues presented by the review of the Arizona State Department of Public Welfare." In its brief in No. 71-1177, intervenor D.N.A. argues that the Administrator improperly denied its request to raise additional issues at the conformity hearing
The critical portion of D.N.A.'s motion to intervene in No. 71-1177 reads as follows:
Were we to grant D.N.A.'s request to intervene as a party-petitioner with respect to that issue, we would be letting in the back door precisely what we have already said should not enter the front door and precisely what Congress has said does not belong in the house at all. Nor would it be proper to permit D.N.A. to introduce its controverted issue in its capacity as party-respondent, a capacity already granted by our March 22 order. Respondents respond; they do not raise issues not raised by the petitioner.
The Department of HEW has exercised its right "to seek to limit intervenors to the issues presented by the review of the Arizona State Department of Public Welfare." We limit intervention in No. 71-1177 to those issues raised by Arizona.
E. Arizona's Petition for Review in No. 71-1177.
The Administrator ruled adversely to Arizona with respect to each of the four issues considered at the conformity hearing; Arizona disputes those rulings. In addition, Arizona claims that it was denied procedural fairness during the conformity hearing in various ways. We treat these points seriatim.
1. Arizona's Residence Requirements.
All public-assistance programs administered by the Arizona State Department of Public Welfare are subject to the provisions of Arizona Rev.Stat. § 46-209, which states:
These provisions have been incorporated in Arizona's plans for programs administering OAA, AFDC, AB, and APTD assistance.
At the time of the conformity hearing, the following interim HEW regulation was in effect:
The interim regulation applies to State plans for administering OAA, AFDC, AB, and APTD assistance. Id. It has since been replaced by a substantially identical permanent regulation. 45 C.F. R. § 233.40 (promulgated by 35 Fed.Reg. 17719 (1970)).
The HEW regulation and Arizona's automatic-termination provision are obviously inconsistent. The regulation states that any recipient must remain eligible for continued assistance despite his temporary absence from the state, so long as he has an "intent to return when the purposes of the absence have been accomplished." The Arizona requirement states that absence for 90 days by itself terminates eligibility, and that after 90 days any "intent to return" is entirely immaterial to continued eligibility, even though the recipient can prove that he had all along intended to return.
The interim HEW regulation and its successor purport to be authorized by 42 U.S.C. § 1302, which states:
This section grants the Secretary "broad rule-making powers." Thorpe v. Housing Authority, 1969, 393 U.S. 268, 277 n. 28, 89 S.Ct. 518, 21 L.Ed.2d 474, which may extend to the promulgation of requirements binding on states in adopting or administering public-assistance plans. See King v. Smith, 1968, 392 U.S. 309, 317, 319 n. 16, 88 S.Ct. 2128, 20 L.Ed.2d 1118; cf. Lewis v. Martin, 1970, 397 U.S. 552, 556, 559, 90 S.Ct. 1282, 25 L.Ed.2d 561. Arizona argues, however, that the Secretary's rule-making power does not extend to the regulation involved here, because the latter is inconsistent with the Social Security Act.
We find no inconsistency between these provisions and the regulation. Although sections 302(b), 602(b), 1202(b), and 1352(b) limit the residency requirements that a state plan may permissibly impose,
Arizona's reliance on the fact that the Secretary promulgated this regulation in response to Shapiro v. Thompson, supra, is misplaced. That the regulation was responsive to Shapiro is correct. See 34 Fed.Reg. 8715 (1969). It is also correct, as Arizona notes, that the regulation is sufficiently broad to invalidate not only state residence requirements of the sort struck down in Shapiro, but also quite distinguishable residence requirements, such as Arizona's here.
Arizona cites Wyman v. James, 1971 400 U.S. 309, 91 S.Ct. 381, 27 L.Ed.2d 408, for the proposition that "the U.S. Supreme Court has recognized the permissibility of eligibility requirements not expressly authorized by the Act." If Arizona means to suggest that some such eligibility requirements are permissible, we agree; if Arizona means that all are permissible then Arizona is wrong. The Supreme Court has never approved state eligibility requirements that conflict with the Act or with valid federal regulations issued pursuant to the Act, nor has any other federal court. The state provisions attacked in Wyman v. James were not alleged to conflict with the Act or with its implementing regulations; a constitutional challenge was made. The Court upheld the state provisions because, as limited by valid HEW regulations, the state provisions did not entail unconstitutional state action. See Wyman v. James, supra, 400 U.S. at 319, n. 6, and 321, 91 S.Ct. 381 (alternative holding).
The Secretary's determination that the Arizona provisions automatically terminating welfare eligibility following a 90-day absence are not in conformity with valid federal requirements must be affirmed.
2. Disregard of earned income for AFDC.
Title IV of the Social Security Act governs federal grants-in-aid to state programs for assistance to needy families with children — the Aid to Families with Dependent Children program (AFDC). 42 U.S.C. §§ 601-610. To obtain federal approval, a state AFDC plan must satisfy an elaborate set of requirements. Inter alia, the state plan must, with specified exceptions,
42 U.S.C. § 602(a) (7). The exceptions require that certain "other income and resources" not be taken into consideration by the state — i. e., that they be disregarded. In particular, a state plan must provide that the state agency administering the plan
42 U.S.C. § 602(a) (8) (A).
The Secretary has promulgated regulations elaborating on the AFDC income-disregard provision, 45 C.F.R. § 233.20 (a) (11), as well as on income-disregard provisions of other assistance programs under the Act, 45 C.F.R. §§ 233.20(a) (4)-(10).
What we have said already about the Secretary's broad rulemaking power under 42 U.S.C. § 1302 applies equally here. The Secretary is beyond any doubt empowered to promulgate uniform regulations governing the complexities of income-disregard accounting. The regulation here in question implements section 402(a) (8) (A) of the Act (42 U.S.C. § 602(a) (8) (A)); it is reasonable on its face.
Arizona suggests that the Secretary's income-disregard regulation infringes the state's "undisputed power to set the level of benefits and the standard of need," King v. Smith, supra, 392 U.S. at 334, 88 S.Ct. at 2142, and that it ignores the mandatory "recognition that the federal law gives each State great latitude in dispensing its available funds," Dandridge v. Williams, 1970, 397 U.S. 471, 478, 90 S.Ct. 1153, 1158, 25 L. Ed.2d 491. The "power" and "latitude" possessed by the state are circumscribed by the scope of valid and applicable federal statutes and regulations. Within that circumscription the states are free to tailor their assistance programs as they deem best. They may not, however, contravene valid federal requirements except at pain of losing their federal grants-in-aid, King v. Smith, supra, 392 U.S. at 333 n. 24, 88 S.Ct. 2128, 20 L.Ed. 2d 1118; see Oklahoma v. United States Civil Service Comm'n, 1947, 330 U.S. 127, 143, 144, 67 S.Ct. 544, 91 L.Ed. 794. Moreover, the income-disregard provision here in question does not reduce Arizona's "great latitude in dispensing its available funds." It merely requires Arizona to make the calculations on the
The Secretary's determination that the method used by Arizona to calculate AFDC income disregard is not in conformity with valid federal requirements must be affirmed.
3. State-level advisory committee for AFDC and CWS.
45 C.F.R. § 220.1. One such requirement, and the one disputed by Arizona, is the following:
45 C.F.R. § 220.4(a).
Arizona claims, once again, that the Secretary has exceeded his rule-making authority under 42 U.S.C. § 1302 in promulgating the regulation requiring an AFDC-CWS advisory council. Arizona's claim is two-fold: first, that the requirement is "inconsistent with the intended purpose of the Social Security Act," and second, that it is not "necessary to the efficient administration of the functions" with which the Secretary is charged under the Act.
Arizona's initial argument that the requirement is inconsistent with the Act is based upon 42 U.S.C. § 602(a) (3), which states that:
Arizona contends that the advisory committee would be de facto a second agency, in addition to the state's own properly designated public-assistance agency, resulting in more than "a single State agency" administering the state plan.
The contention holds no water. As the Administrator's decision notes, "the committee's role is purely advisory and entails none of the administrative functions which fall within the province of the single State agency which is required by Section 402(a) (3) [42 U.S.C. § 602(a) (3)]." With or without the advisory committee, the responsibility for making the actual administrative decisions and for implementing them rests in a single set of hands — those of the state agency. The Secretary's regulation requires the advisory committee to "have adequate opportunity for meaningful participation in policy development and program administration, including the furtherance of recipient participation in the program of the agency." 45 C.F.R. § 220.4(a) (1). But this requirement does not relieve the state agency of any of its administrative authority or responsibility; it merely requires the agency to solicit and consider the advisory committee's views as a part of the agency's own decision-making process. The decisions themselves remain with the agency.
Arizona argues that the Secretary's regulation is inconsistent with the Act in another way. Arizona notes that certain provisions of the Act expressly require the creation of various advisory bodies. 42 U.S.C. §§ 622(a) (1) (C) (ii), 1314(a), 1314(f).
We cannot accept this reasoning. The maxim expressio unius "is a product of `logic and common sense,'" 2 Sutherland on Statutory Construction § 4916, at 415 (3d ed. Horack, 1943), and is properly applied only when the result to which its application leads is itself logical and sensible. K. Llewellyn, The Common Law Tradition: Deciding Appeals, at page 521, (1960); cf. id. at 526 (paired maxims no. 20). Neither logic nor common sense supports applying the maxim here. The Social Security Act comprehends a complex aggregation of enactments, amendments, and repeals ranging over a period of 36 years. More than most statutes, the Act was and is responsive to the changing landscape of American society; its beneficent purposes would be stultified by rigidly attributing to each Congressional attempt to improve the Act's responsiveness a concomitant Congressional intent not to permit further administrative improvements by those charged with the Act's implementation. See 2 Sutherland on Statutory Construction, supra, § 4917, at 421; 3 id. § 6604, at 287-288. Thus, this is another one of those instances in which "too much is claimed for" the maxim, United States v. Barnes, 1912, 222 U.S. 513, 519, 32 S.Ct. 117, 56 L.Ed. 291, and we decline to apply it here. We conclude that the Act's express provision for the creation of certain other advisory bodies is in no way inconsistent with the creation of the AFDC-CWS advisory committee by administrative regulation.
The advisory-committee requirement provides just such a method. That the Secretary in fact found the advisory committee "to be necessary for the proper and efficient operation of" state AFDC-CWS plans appears from his Interim Policy Statement No. 8, 33 Fed. Reg. 10234-35 (1968). That he was entitled to so find follows from his responsibility for administering the various Social Security programs, and from his reasonable discretion in fulfilling that responsibility under 42 U.S.C. §§ 1302 and 602(a) (5). It also follows from the fact, as pointed out in the Administrator's decision, that
Whether the advisory-committee requirement is in fact "necessary for the proper and efficient administration of the [state's] plan" — and Arizona asserts it is not — is not the question before us. The question is rather whether the Secretary found that it was necessary, and whether that finding was reasonable. He did, and it was.
Finally, we note Arizona's claim that the advisory-committee requirement "makes a sham of the State's power to create its own offices in derogation of the Tenth Amendment and violates the spirit of cooperative federalism upon which the entire welfare program is grounded." The claim is frivolous. On the question of constitutionality, see Oklahoma v. United States Civil Service Commission, supra, 330 U.S. at 142-144, 67 S.Ct. 544, which is directly in point. See also Sperry v. Florida, 1963, 373 U.S. 379, 403, 83 S.Ct. 1322, 10 L.Ed. 2d 428. And compare the preamble to the Social Security Act (49 Stat. 620) with U.S.Const. art. 1, § 8, cl. 1 ("to provide for the general welfare"). On the question of "cooperative federalism," which is of course no talisman,
The Secretary's determination that in failing to create an AFDC-CWS advisory-committee, Arizona has contravened valid federal requirements must be affirmed.
4. Arizona's legal-custody requirement for AFDC.
Arizona's plan for administering AFDC assistance contains the following provision:
Arizona State Dep't of Public Welfare, Assistance Payments Manual § 3-401.3, ¶ 3. The questions involving this provision to be resolved at the conformity hearing were:
The hearing examiner's Recommended Findings concerning these two questions are, in their entirety, as follows:
The Administrator declined to follow the Recommended Finding.
It is clear from the Administrator's analysis and conclusion that he found Arizona's legal-custody provision out of conformity with 42 U.S.C. § 602(a) (10) only because he found it in violation of the "doctrine of equitable treatment."
We decline to answer these questions as posed. Instead, we hold that Arizona's legal-custody provision is in direct conflict with the requirements of 42 U.S.C. § 602(a) (10), even without the intermediation of the equitable-treatment doctrine. Section 602(a) (10) requires "* * * that aid to families with dependent children shall be furnished * * * to all eligible individuals * * *."
The purposes of AFDC programs are set out in 42 U.S.C. § 601:
42 U.S.C. § 606 defines the terms used in the AFDC provisions of the Act. It contains the following definitions:
Thus, a "needy child * * * who has been deprived of parental support or care" is just as much a "dependent child" within the meaning of the Act when he lives with a relative as when he lives with a parent. 42 U.S.C. § 606(a). A "famil[y] with dependent children" is just as much a "family" within the meaning of the Act when it consists of the child and a relative other than a parent as when it consists of the child and a parent. Id. §§ 601, 606(b). And a relative qualifies as a "relative with whom any dependent child is living" within the meaning of the Act whenever his or her relationship to the child is one of those specified and the child is actually living with him or her. Id. § 606(c). A similar symmetry between "parents" and "relatives" inheres in the Act's purposes. "[T]he care of dependent children" is to be equally encouraged whether the dependent child lives with a parent or a relative. Id. § 601. "[F]amily life" is to be "maintain[ed] and strengthen[ed]" just as much when a dependent child lives with a relative as when he lives with a parent. Id.
The provisions quoted above thus make it perfectly clear that the Act views the AFDC eligibility of a relative with whom a child is living exactly the same as the eligibility of the child's parent. If a child is "dependent" and if he lives with either a parent or a relative, then the parent or relative is eligible for AFDC assistance on behalf of the child. The Act no more permits any otherwise eligible category of relatives to be automatically rendered totally ineligible for AFDC assistance, on the basis of conditions not found in the Act, than it permits any category of parents to be. And the Act does not permit the latter. See King v. Smith, supra.
Although the precise question under discussion is, so far as our research has shown, one of first impression, dicta in other cases support our reading of the Act. Referring to 42 U.S.C. §§ 606(a) and (b), one court has noted that
Williams v. Dandridge, D.Md., 1969, 297 F.Supp. 450, 455 (footnote omitted), rev'd on other grounds, 1970, 397 U.S. 471,
Arizona's legal-custody requirement therefore, conflicts with the treatment of relatives' AFDC eligibility required by the Act. It automatically and categorically denies AFDC eligibility to "[a] relative of a natural parent who is an Aid for Dependent Children recipient" unless that relative (or the Arizona State Department of Public Welfare) has legal custody of the child. Thus, suppose a mother has two children, one of whom lives with her, and suppose the mother receives AFDC assistance. If the other child is living with his or her "grandfather, grandmother, brother, sister, * * * uncle, aunt, first cousin, nephew, or niece," 42 U.S.C. § 606(a), that relative cannot receive AFDC on behalf of the child unless the relative (or the Department of Public Welfare) has legal custody of the child. The Act does not countenance a state's imposition of such a condition.
Arizona makes several claims on behalf of its requirement, with none of which we agree. First, Arizona asserts that the requirement is "[i]n strict conformity with the federal Aid to Families with Dependent Children program objectives `to help maintain and strengthen family life,'" because it discourages the splitting-up of parents and children. As we have pointed out, however, a "family" within the meaning of the AFDC provisions of the Act does not comprehend only the child and his parents. A household consisting of the child and his "grandfather, grandmother," etc., is as much a "family" within the meaning of the Act as is a household consisting of the child and his mother or father. See especially 42 U.S.C. §§ 601, 606(b), quoted supra. This point is particularly critical in this case, since, as the evidence showed and as the Administrator pointed out, "a common, if not the predominant cultural pattern among Mexican-Americans and Indians in Arizona is the `extended family.' Under this cultural system, it is common for children to be sent to live for short periods of time with relatives. In order to receive AFDC, however, these relatives would have to undertake the burdensome and costly task of acquiring legal custody, which may invest the resulting situation with a degree of permanence that is unacceptable to everyone concerned." Thus Arizona's legal-custody requirement falls especially heavily on Arizona's Mexican-American and Indian minorities.
Second: Arizona asserts that it has a legitimate interest in conserving its public-assistance funds so that it may assist as many unrelated families to as great an extent as possible. It wishes to encourage dependent children to live in the same household, in order to take advantage of "the greater ability of large families — because of the inherent economies of scale — to accommodate their needs to diminished per capita payments." Dandridge v. Williams, 1970, 397 U.S. 471, 479-480, 90 S.Ct. 1153, 1159. Legitimate though that interest is, it cannot prevail over the requirements of the Act. Arizona's "interest in economically allocating its limited AFDC resources may be protected by its undisputed power to set the level of benefits and the standard of need, and by its taking into account in determining whether a child is needy all actual and regular contributions to his support." King v. Smith, supra, 392 U.S. at 334, 88 S.Ct. at 2142. Arizona may also protect that interest by imposing a fixed upper limit on the total amount of money any one family unit may receive, Dandridge v. Williams, supra, or by paying to each AFDC recipient a fixed percentage of his actual needs, Ward v. Winstead, N.D.Miss., 1970, 314 F.Supp. 1225, 1233, appeal dismissed for untimely filing,
Third: Arizona argues the practical desirability of having children living with adults legally responsible for them, in order "that in case of medical emergency one capable of consenting to treatment, whether the Welfare Department or a relative, will be available," and in order to cure "problems that arise when a child needs permission to marry, authorization to participate in school activities or permission to obtain a [driver's] license." These claimed practical advantages are of questionable significance; certainly nothing in the record suggests that they ought to be given great weight. And in any event, weighty or not, they do not justify deviation from the Act's requirements.
Fourth: Arizona invokes the special interest that a state has in regulating "the marriage and family relationship." But such regulation is not in question here. What is in question is whether Arizona can use federally provided funds in a manner at odds with the conditions specified by Congress for their use.
Arizona's AFDC plan does not fulfill the mandatory condition "that aid to families with dependent children shall be furnished with reasonable promptness to all eligible individuals." 42 U.S.C. § 602 (a) (10) (emphasis added).
5. Arizona's attack upon the conformity-hearing process.
Arizona contends that it was denied procedural fairness during the conformity hearing. Recognizing that "[t]he word `person' in the context of the Due Process Clause of the Fifth Amendment cannot, by any reasonable mode of interpretation, be expanded to encompass the States of the Union," South Carolina v. Katzenbach, 1966, 383 U.S. 301, 323, 86 S.Ct. 803, 816, 15 L.Ed.2d 769, Arizona finds a requirement of procedural fairness in other sources. In particular, Arizona claims that the Tenth Amendment "embodies the State's constitutionally nonexplicit fundamental rights that are protected by the Federal Constitution." Arizona also argues that the Ninth Amendment reserves to its citizens "fundamental individual protections not enumerated in" the Constitution, and that Arizona is acting as parens patriae of its citizens in this case; thus, the argument concludes Arizona "is the only one with standing to protect [its citizens'] rights in this unique situation where the damage to individuals arises from unfair treatment of the State as the representative of its people."
Although Arizona may in appropriate situations assert claims as parens patriae on behalf of its citizens, see, e. g., Hawaii v. Standard Oil Co. of
As for Arizona's Tenth Amendment claim, we find Oklahoma v. United States Civil Service Commission, supra, apposite. That case involved a hearing the purpose of which was, like the conformity hearing here, to determine whether the state had adhered to conditions attached to grants of federal funds. See § 12 of the Hatch Act, 54 Stat. 767-770 as amended (now codified at 5 U.S.C. Ch. 15). Responding to Oklahoma's claim that its sovereignty had been violated, the Court noted that
Like Arizona here, Oklahoma was a party to the administrative hearing; unlike Arizona, Oklahoma did not allege specific procedural shortcomings. Notwithstanding this distinction, we think the Oklahoma case refutes Arizona's reliance on the Tenth Amendment. To go further and read the Tenth Amendment as incorporating specific guarantees of procedural fairness would exceed even an expansive reading of the Amendment's proper scope. At very most the Amendment reserves certain powers to the states, cf. Sperry v. Florida, 1963, 373 U.S. 379, 403, 83 S.Ct. 1322, 10 L.Ed.2d 428; it assuredly does not incorporate a Bill of Procedural Rights for the states.
Since Arizona's constitutional objections to the hearing procedures are not tenable, the procedures of which Arizona complains must be upheld if they are properly authorized by statute or regulation.
First: The pre-hearing notice given Arizona specified only the issues to be treated, and did not disclose the nature of the evidence or the identity of the witnesses to be presented. Arizona applied to the Administrator for a continuance in order to be able to discover who and what would be presented by HEW. The application was denied by the hearing examiner. Arizona now contends that only the Administrator is authorized to grant or deny continuances, 45 C.F.R. § 213.12,
Second: The hearing examiner confined himself to taking evidence and ruling on the conformity of Arizona's plans with the Secretary's regulations. He declined to rule on Arizona's contentions that HEW's policies and regulations contravened the Act. Arizona now claims that "[b]y forcing the State into a limited forum that was unable to consider the merits of its case, the Department of Health, Education, and Welfare effectively denied Arizona the opportunity of challenging it, thereby ignoring the fundamental ethic of fair play. * * *" The administrative forum, however, was not limited to the conformity hearing. Before reaching a final decision, the Administrator held a hearing for the sole purpose of permitting Arizona to argue its contentions that the HEW regulations were invalid. Arizona filed extensive briefs in support of those contentions. The Administrator's final decision expressly treated the question of the regulations' validity. Arizona was not denied the opportunity to argue all of its contentions during the administrative proceedings.
Third: Arizona claims that the participation of welfare recipients as intervenors in a conformity hearing is unauthorized by the Act. This amounts to an assertion that 45 C.F.R. § 213.15(b) (1)
Fourth: Arizona seems to argue that because it admitted noncompliance with certain HEW regulations, no evidentiary hearing was necessary, and that holding one denied Arizona procedural fairness. Not only is the argument illogical; its premises are also at odds with Arizona's insistence that it should have been granted a continuance and with Arizona's claim that HEW bore "the burden of showing that [Arizona's] non-compliance based on residency * * is involved in a substantial number of cases." Arizona also asserts that wholly irrelevant testimony was continually admitted into evidence, thereby turning the hearing into "a two-day diatribe covering the full spectrum of conceivable social ills. * * *." Since Arizona does not point to any specific evidence whose improper introduction was prejudicial, we decline to respond to the assertion.
Sixth: Arizona claims that the HEW regulations governing "Practice and Procedure for Hearings to States on Conformity of Public Assistance Plans to Federal Requirements," 45 C.F.R. Part 213, were not adopted in accordance with the notice requirements of 5 U.S.C. § 553, and that they are therefore invalid. Section 553(b) renders the notice requirements inapplicable "when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." In promulgating the conformity-hearing regulations, the Secretary stated:
35 Fed.Reg. 12180 (July 29, 1970). The stated reasons are "good cause" for foregoing notice. Cf. Buckeye Cablevision, Inc. v. F. C. C., 1967, 128 U.S.App.D.C. 262, 387 F.2d 220, 228 n. 34. Indeed, the Secretary obviously acted with Arizona's legitimate interests in mind. The rules were validly promulgated.
In No. 71-1250, the proceeding is dismissed.
In No. 71-1177, the decision is affirmed.
The stay order issued by this court on February 22, 1971, is vacated.
Sections 302(b), 602(b), and 1202(b) impose residence restrictions which are substantially identical.
Id. It is therefore clear that considerable care and reflection, on the part of persons thoroughly experienced in welfare administration, went into designing the method of income disregard, and that as a result the method espoused by Arizona was deliberately abandoned. On that ground alone we would be loath to find the method finally adopted by HEW to be utterly lacking in "common sense." In any event, we think it entirely reasonable for the Secretary to interpret "earned income" in the Acts' disregard provisions, 42 U.S.C. § 602(a) (8) (A), as referring to gross earned income. Nothing in the legislative history negates this broader reading of "earned income," and common usage supports it. See Webster's Third New International Dictionary 714 (1965).
"The State plan must show that the advisory committee will:
(1) Advise the principal policy setting and administrative officials of the [State] agency and have adequate opportunity for meaningful participation in policy development and program administration, including the furtherance of recipient participation in the program of the agency.
(2) Include representatives of other State agencies concerned with services, representatives of professional, civic or other public or private organizations, private citizens interested and experienced in service programs, and recipients of assistance or services or their representatives who shall constitute at least one-third of the membership. Such recipients or their representatives must be selected in a manner that will assure the participation of the recipients in the selection process and that they are representative of recipients of assistance or services.
(3) Be provided such staff assistance from within the agency and such independent technical assistance as are needed to enable it to make effective recommendations.
(4) Be provided with financial arrangements, where necessary, to make possible the participation of recipients in the work of the committee structure."
Arizona does not argue that this reasoning is incorrect. In its only reference to the difference between the hearing examiner and the Administrator with regard to the legal-custody issue, Arizona's brief states:
Obviously, Arizona mistakes the import of the hearing officer's conclusion, treating it as a determination that, as a matter of law, the legal-custody requirement complies with federal requirements. Accepting Arizona's assertion at face value — as an attack on the substance of the Administrator's conclusions — we decline to discuss the merits of the "burden of proof" question.
The doctrine is not expressed in any of the Act's provisions, nor has it been promulgated by regulation. See Note, Welfare's "Condition X", 76 Yale L.J. 1222 (1967). Congress has validated one application of the doctrine by writing the so-called "Flemming ruling" into the Act. Pub.L.No.87-31, § 4, 75 Stat. 77 (1961) (adding 42 U.S.C. § 604(b)). See King v. Smith, supra, 392 U.S. at 322-323, 88 S.Ct. 2128, 20 L.Ed.2d 1118; Note, supra, 76 Yale L.J. at 1224-25. Recognition has occurred during a Congressional debate of "a requirement in the law that requires equal treatment of recipients and uniform administration of a program within a State." 113 Cong.Rec. 23055 (1967) (remarks of Rep. Wilbur Mills during debate on H.R. 12080, 90th Cong., 1st Sess., enacted as the Social Security Amendments of 1967, Pub.L.No.90-248, 81 Stat. 821). The doctrine has apparently been followed in its only judicial test. Arizona v. Ewing, D.D.C., 1953, Civil No. 2008-52 (unreported), remanded with instructions to dismiss for lack of jurisdiction sub nom. Arizona ex rel. Arizona State Board of Public Welfare v. Hobby, 1954, 94 U.S.App. D.C. 170, 221 F.2d 498. At least one court has more recently declined to rule on the doctrine's validity. Russo v. Shapiro, D.Conn., 1969, 309 F.Supp. 385, 389 n. 3.
"213.22 — Authority of Presiding Officer. (a) The presiding officer shall have the duty to conduct a fair hearing, to avoid delay, maintain order, and make a record of all the proceedings. He shall have all powers necessary to accomplish these ends, including, but not limited to, the power to: