Appendix — Snell v. Wyman

ee etree eee

13

APPENDIX A

Judgment of the United States District Court,

Southern District of New York

The defendants having brought on a motion pursuant to

Rule 56 of the Federal Rules of Civil Procedure for sum-

mary judgment and said motion having come on to be

heard before the Honorable Marvin E. Frankel, the Honor-

able Irving R. Kaufman, and the Honorable Charles M.

Metzner, and the Court thereafter on February 29, 1968

having handed down its opinion granting said motion, it is

ORDERED, ADJUDGED, AND DECREED that the defendant,

George K. Wyman, as Commissioner, New York State De-

partment of Social Services has judgment against the

. plaintiffs, Geraldine Snell, Miriam Ramos, Juan Malave,

Helen Marley-and Robert Whaley dismissing the action.

Dated: New York, New York,

March 14, 1968.

Irvine R. Kaurman,

Circuit Judge.

Marvin E. FRAnkKEL,

District Judge.

_ Cuakies M. Metzyer,

‘District Judge.

14

APPENDIX B

Majority Opinion of the District Court

FRANKEL, D.J.:

The welfare laws and administrative regulations of New

-York State contain provisions, more particularly described

below, whichgimpose upon welfare recipients an obligation

to repay tne cost of assistance benefits out of specified

kinds of assets. The plaintiffs, who have received and are

receiving various forms of welfare payments, brought this

suit for declaratory and injunctive relief, urging that such

provisions are invalid and unenforceable on one or more

- of several federal constitutional grotnnds. Predicating

federal jurisdiction upon 42 U. S. C. $1983 and 28 U.S. C.

§§1331(a), 1343(3) and (4), 2201 and 2202, plaintiffs moved

for the convening of a three-judge court. under 28 U. S. C.

_A2281. The motion was granted. Thereafter, plaintiffs took

some depositions, and the parties entered into two stipula-

tions. The result of these steps is a record which, in the

view of the court as well as the litigants, adequately poses

the constitutional issues upon undisputed facts. Both sides

have moved for summary judgment. For the reasons here-

after stated, the court will grant defendants’ motion and

dismiss the complaint.

I.

The problems of the Plaintiffs: which brought them to

the welfare authorities and then to this court—problems |

which cannot fail to evoke profound sympathy from fellow

humans, whether or not they warrant revision of New York

~~ Jaw by federal judges—may be summarized as follows:

Pe ee

15.

Plaintiff Geraldine Snell is thirty-three years old, di-

vorced, mother of four children ranging from four to seven-

teen years of age. She owns an equitable interest, worth

about $900. as of September 1, 1967, in a three-room co-

operative apartment where she and her children reside.

She has a regular, part-time clerical job at which she

earns net wages of some $32 per week. Pursuant to court

order, she receives $25 weekly from her first husband to-

ward the support of the children. Her second husband,

from whom she was divorced in 1966, contributes nothing

for her support or the children’s. Since September 1965

(financed by state and ptivate scholarship funds), she has

been enrolled in a course of full-time college study, sched-

uled for completion in June of 1969, after which she hopes

to pursue a teaching career. —

In February of 1967, Mrs. Snell applied and was found

eligible for benefits under the state program of Aid to

Families with Dependent Children (AFDC).* She receives

currently what is described in the papers as “a complete,

regular budget allowance.”

‘The program is one encouraged and financed in substantial

part by grants-in-aid from the federal government authorized by

42 U.S. C. §601-09 (1964), as amended (Supp. 1967), “[f]or the

purpose of encouraging the care of dependent children in their

own homes or inthe homes of relatives * * * to help maintain and

strengthen family life and to help such parents or relatives to

attain or retain capability for the maximum self-support * * *.”

42 U. S. C. §601. To receive federal funds under the AFDC

categorical assistance program, New York State was required to

submit a “state plan” for approval by the Secretary of Health, —

Education and Welfare, 42 U. S. C. §§601-2. It appears that the

State of New York has complied with this requirement, and there

is no indication that the Secretary has disapproved the state plan

' in any relevant respect. AFDC grants are dispensed according to

minimum standards of eligibility and administration set by the

Social Security Act and by state statutes that determine the level

of need and. otherwise define the classes of eligible families. See

N. Y. Social Services Law §343 et seq. |

Riv Mabie erick eet Me RSS

ssl

16

Purporting to act under sections 104’ and 360° of the

New York Social Services Law and accompanying regula-

2Ҥ104. Recovery from a person discovered to have property

“J. A public welfare official niay bring action, or proceeding

against a person discovered to have real or personal property,

or against the estate or the executors, admitiistrators and suc-

cessors in interest of a person who dies leaving real or personal

property, if sueh person, or any one for whose support he is or

was liable, received assistance and care during the preceding

_ten years, and shall be entitled to recover up to the value of

~ such property the cost of such assistance or care, Any public

assistance or care reeeived by such person shall constitute an

implied contract. No claim of a public welfare official against

the estate or the executors, administrators and successors in

interest of a person who dies leaving real or personal property,

shall be barred or defeated, in whole or in part, by any lack

. of sufficiency of ability om the part of ‘such person during

the period assistance and care were received. .

“Nor shall the claim asserted by a public welf are official against

any person under this section be impaired, impeded, barred

or defeated, in whole or in part, on the grounds that another

person or persons may also have been liable to. contribute.

“In all claims of the. public welfare official made under this

section the public: welfare official shall be deemed a preferred

creditor. Fie ata

“2 No right of action shall accrue against an infant by rea-

son of. the ‘assistance or care granted to him unless at the

time it was granted the infant was possessed. of money and

property in excess of his reasonable requirements as described

in section one hundréd one.”

3Ҥ360. Real property of legally responsible relatwes; deeds

‘and mortgages may be required

“]. The ownership of real property by an applicant or appli-

cants, recipient or recipients who is or are legally responsible

relatives of -the child, children, minor or minors: for whose

benefit the application is made or the aid’ is granted, whether

such ownership be individual or joint as tenants in common,

tehants by the entirety or joint ,tenants, shall not preclude

the granting of aid to dependent children or the continuance

thereof if he or they are without the necessary funds to main-

tain himself or themselves and such child, children, minor or

.

17

tions,‘ New York welfare officials took from Mrs. Snell a

“Pledge Agreement” and “Assignment of Procéeds of

Sale” relating to her cooperative apartment. Under the -

terms of these instruments, Mrs. Snell has obligatéd herself

to repay the cost of all public assistance and care currently

wiinors. The public welfare official may, however, require as

a condition to the granting of aid or the continuance thereof, .

that he be given a deed of or a mortgage on such property in

accordance with the provisions of section one hundred six.

“2. Ilowever, while the property covered by the deed or mort-

gage is occupied, in whole or in part, by the responsible rela-

tive who gave such deed or mortgage to the public wetfare

official or, during his minority, by a child or minor for whose -

benefit the aid was granted the public welfare official shall not

sell the property or assign or enforce the mortgage without

the written consent of the department; and, when the property

is occupied by such child or minor, such consent shall not be

given unless it appears’ reasonably certain that the sale or

other disposition of the property will not materially adversely

affect the welfare of such child or minor during his minority.

' “3. The net amount recovered by the public welfare’ depart-.-

ment from such property, less any expenditures approved by

the department for the burial of the relative, the child or

minor who dies while in receipt of aid under this title, shall

be used.to repay the. public welfare district, the state and the

federal government their proportionate share of: the cost of

aid to dependent children granted. The state and federal’

share shall be paid by the public welfare district to the state

and the manner and amount of such payment shall be deter-

mined in accordance with the regulations of the department. .

“4. If any balance remains it\shall belong to the estate of the

° legally responsible relative op’ relatives, and the public welfare

district shall forthwith credft the same accordingly, and, pro- .

vided they claim it within four years thereafter, pay it to the

- persons entitled thereto. If not so claimed within four years

it shall- be deemed abandoned property and be paid to the

state comptroller pursuant to section thirteen hundred five of

the abandoned property law.

“0. The proceeds or moneys due the United States shall be paid

dr reported in such manner and at such times as the federal

security agency or other authorized federal agency may di-

rect.” ve (footnote 4 on following page)

18

being supplied to her and cher children, the obligation being.

secured by her interest in the cooperative apartment and

the Commissioner of Welfare being empowered (subject: to

authority from the State Welfare Department, Social Ser-

vieos Law §360(2), supra note 3) to sell the apartment and

apply the proceeds to his claim: for assistance furnished,

According to the terms of seetion 860(2), supra note 3,

the mortgage may not be enforeed or assigned without the .

written consent of the State Department of Social Services

while the apartment is oecupied by Mrs, Snell and her chil-

dren, and, further, “such consent shall hot be given unless

it appears reasonably certain that the sale: will not ma-

terially adversely affect the welfare” of the Snell children,

Plaintiff Miriam Ramos is the nineteen-year-old: mother —

of three children, all under the age of three, who are de-

pendent’ upon her alone for support. Her husband is in

jail. Since 1963 Mrs. Ramos has been a recipient of AFDC

benfits. On February 6, 1967, Mrs. Ramos and her oldest

child were injured in an automobile accident. Three months

later she was, requested, as a condition to her continued

receipt of public assistance, to execute an “Assignment of

ugh

Sai NR eRe NES Haak DDS GTN el he

PO ETT Fete oe

Pye een Ts

‘“Eligibility for ADC shall be detetmined for each applicant

in accordance with the policies and procedures generally applicable —

in publie assistance. This determination shall include considera-

tion of each. of the following factors of eligibility: financial need,

age, welfare of child or minor, residence within the State, living

arrangements, relationship of child to relative, and deprivation

of parental support or care. Where there is-emergent need and

a presumption of categorical eligibility the preinvestigation grant .

procedure shall be followed.

“(a) Financial need. Financial need shall be determined in —

accordance with approved standards of assistance. A public

welfare official may in his discretion require the assignment

of real property or other resources of an applicant or recipient

who is a parent of the child or minor for whose benefit an

ADC grant.is made. Refusal by the applicant to assign shall

constitute ineligibility for public assistance.” New York Dept. ”

of Social Services Reg. §18-369.2.

.

OEE EAT ON aw

19

Proceeds of Lawsuit,” a document which. assigns (to the

extent of assistance received) to the Department of Social

Services the proceeds of any personal injury claim arising

out of. the accident. The assignment was taken pursuant

to the genéral obligation set out in N. Y. Social Services

Law $104," and the more specific authority of §104-a.° -

"See note 2 supra,

*Ҥ104-a. Liens for public assistance and care on claims and

suits for personal injuries.

“1. If a recipient of public assistance and care shall have a

right of action, suit, claim, counterclaim or demand against

another on account of any personal injuries. suffered by such

recipient, then the publie welfare official for the public welfare

distri€t providing such assistance and care shall have a lien

for such amount as may be fixed by the public welfare official

not execeding, however, the total amount of such assistance

and care furnished by such public welfare official on and

after the date when such injuries were incurred.

“The welfare commissioner shall endeavor to ascertain whether

such person, firm or corporation alleged to be responsible for

such injuries is insured with a liability insurance company,

as ‘the case may be, and the name thereof.

*- @ * * e

“10. The. provisions of this section shall not be deemed to

adversely effect the right of a public welfare official who has

taken an assignment of the proceeds of any such right of

action, suit, claim, counterclaim or demand, to.recover under

such assignment the total amount of assistance and caré for

which such assignment was made. -

%

.

“12. The provisions of this séction to the contrary notwith-

standing, the public welfare official may in his discretion ©

release to the injured person an amount not to exceed the

cost of two years’ maintenance from the lien herein created.

“This section. shall not apply to any claim or award which is

or may be allowed pursuant to the provisions of the work-

men’s compensation law or the volunteer firemen’s benefit

law.”

f continued on following page)

20 a

The third plaintiff, Juan Malave, is the father of eight

minor children. He earns $86 weekly and is the-sole sup-

port of his wife and family. Prior,to 1967 Mr. Malave had

received AFDC benefits for brief periods, in 1955 and 1965.

However, in March, 1967, he suffered personal injuries on

The assignment technique is: more specifically authorized by

Policies Governing the Administration of Public Assistance, City

of New York, Department of Welfare §184:

“When a recipient er any member of the family receiving pub-

lic assistance sustains or has sustained a personal injury, the.

Department shall determine whether legal action has been or

ean be instituted. The potential proceeds of a personal injury

action or death claim are subject to the following :

“a. Protective Action. The potential proceeds of the recip-

ient’s action shall be subject to protective action through

’ an assignment. When an assignment of the’ proceeds of

a recipient’s personal injury or death claim is taken by

the Department, any monies becoming available are sub-

ject to the Department's claim to the extent of the ‘net

proceeds.

- “b, Disposition of Funds on Recovery or. Setilement. Upon

a recovery or settlement, the recipient may pay, out of

the gross proceeds, an amount sufficient to meet the at-

torney’s fees, medical costs related to the injuries, hos-

pital liens and all other expenses and disbursements inci-

‘dent to the injury. The net proceeds are applied towards

the repayment of public assistance granted. The De-

* partment may permit the recipient to retain, out of the

net proceeds, an amount equal to two years’ budget needs

computed: on a public assistance basis disregarding any

income.

“The decision to authorize the release of funds equal to

two years’ budget needs requires special approval.

“When the release -of such funds would be inadvisable,

, or when fraud or concealment of assets has occurred,

the Department reserves the right to refuse the release

. - of all or part of the two years’ seas needs, subject’

to special approval.

-“Funds secured through recovery or settlement of a per-

sonal injury action may be used, in appropriate cases, to

establish burial reserves * * * .” ;

21

_the premises of the public housing project wheré he lives,

and was unable to continue working; for several months

_ the family received emergency AFDC assistance and dis-

ability insurance checks. In March, 1967, plaintiff Malave

. received $400 from the New York City Housing Authority ~—

as compensation for his injuries. These funds have been

exhausted in providing necessities for the family..

The New York recovery provisions have been applied to

Mr. Malave in the following ways: by requiring the en-

dorsement over to the Department of Social Services of .

one of three disability insurance checks ; and by asserting

on June 13, 1967, a “Notice of Lien” in the amount of

$420.29 for assistance furnished since the ‘accident and -

after the receipt of the Notice. The same provisions in-

- voked against plaintiff Ramos were the claimed authority

in the case of Mr. Malave.'

Plaintiff Helen Marley is a sixty-eight year old chamber-

maid who has worked for the YWCA since 1954. She cur-

rently earns $30 for a twenty-hour work week and supports

- herself solely on this salary and Social Security benefits

_totalling $86 a month. Her only asset is a $600 bank ac-

count. . a

In 1943 Miss Marley ‘ii ‘ll with cancer, and from

1945 to 1954 she was sustained on public assistance total-

ling $4,000. During this time of sickness and despondency,

she assigned to the Department of Social Services. an in-

surance. policy on her life. With the help. of a cousin Miss

Marley finished paying the premiums on this policy in 1967.

However, the insurance company will not release the pro-

ceeds of the policy to plaintiff Marley because of the prior

assignment to the Department of Sociat- Services. The

er

7 See note 6 supra.

At SE ‘ _- .

le ae ae AWB: GA tho fe: sey. ee ”

~~

22

statutory authority for the public welfare offeinis netion is

section 105 of the Social Services [nw 7 :

Robert Whaley ina twenty Kix yore old welfare recipient

who lost his right leg in an hecident on n New. York City

subway platform on July ot, 166. Prior to this miafor

tune plaintiff Whaley earned him living neon free lance

photographer, a career whieh he hope to resume, Kleven

months after the accident, on June ae 1967, Meo Whaley

applied for assixtance in the form of Aid te the: Perma

nently and Totally Disabled (APTD)” Asa condition to

granting this aid, the Department requested and received,

pursuant to section LO4-a,'" an « Aanigninent oft Proeeeds of

Lawsuit,” which imposes the obligation to repay assistance

out of the eventual personal injury recovery, if any, thet.

plaintiff receives. |

7 * “9105. Claims on msurance

“If a person, who has received public assiatanee or care, shall

die leaving insurance, and the estate of the asaured ia riamed

as beneficiary, ‘or no beneficiary ix named, the publie welfare

official shall be entitled to a preferred claim to be paid put

of such insurance to the amount. of the cost of such assistance

and care, and for funeral expenses not to exceed two hin-

dred fifty dollars. [f the insured leaves a widow or minor

children who are, or are liable to become, piiblic charges, the

public welfare official may, in his diseretion, waive hia claim

to such insurance or any part thereof to which he would

otherwise be entitled.”

' ¥APTD is a categorical assistance program operating in the,

same federal-state type of partnership as that described in note

lL relating to AFD(¢. Federal authorization for the program is

found in 42 U. S. C. §§1351-55 (1964), as amended. (Supp. 1967),

one purpose being to enable “each State to furnish financial aa-

sistance * * * to needy individuals eighteen years of age and older

who are permanently and totally disabled” and to encourage each

State “to furnish rehabilitation and other services to help such

individuals attain or retain capability for self-support or self-

ae 42 U. S. C. $1351. New York has elected to. join

the program pursuant to N. Y. Social Services Law §300 e¢ seq.

© See supra note-6. *

4

yi

Voy nebdition tor the Po neprertnny Taela, whieh are not in dia.

DUE PINT Titve nldieod: aome deposition testimony

Henectipe Min Upen ae peed al “oonmtitutional fret"

vonabating, at tonal dn Tyee tenaine, of ON puert judlginents

Hominid that thie New York repayanent reajiire

Went ee onerotiay cleat enietive ol morale, and, generally,

RU HORA TVe Th Chel lipniet on efoetive rehabilitation ras to,

he arbitrary med ieentional Sueh foatinony emannaten

Matty from Miae Warharn Louis, a aoeial work conmult.

Wnt nnd De Charles Crosser, nasiatant professor at the

New York University Sehool of Social Services, both exten.

RIVOlY experienced: in working with and for poor people.

Among other tings, these experts wiate that assignments

Of life inanraAnee policies deprive: welfare recipients of an

Mffeetive avmbol of sino nnd aecomplishinents that

hore is rimilnr aymbolie import in the family home or

apartment; Chat aadignments of personal injury claims

brood “tremendous resentments nnd that, in general, “any

social work purpose ino the reeovery provisions in quite

boyond * * * comprehension.” Moreover, these witnesses

testify, enforeoment of the recovery requirements tends to

eause return to the welfare rolls of people who might other-

Wise postpone or avoid auch renewed dependence,

Also in the reeord are depositions of the defendant Com-

nissionérs-—both of whom, as the court may notice, have

careers of recognized distinction for scholarship, and active

service in the field of social work." “Both Commissioners

™ Considering the subject matter and where we ‘sit, it may be

permissible, too, that we acknowledge an awareness of the sensi-

tive and imaginative efforts with which Commissioner Ginsberg

has been seeking to attack the basic needs of welfare “clients”

not least the need for self-respect and independence through pro-

ductive work. See, e.g., N. Y. Times, Jan.. 28, 1968, p. 1, col. 2;

td., Jan. 15, 1968, p. 1, col. 4.

24

acknowledged that there are imperfections in existing wel

fare programa, and indientod them concern bo nook improve

ments, Commissioner Ginsberg reaflirmed his) published

view that welfare mountanee ahoukd be (thongh it tny net

be by either theestate or Forleral legisintire) viewed “ns nt

ceontitlonent and aright rather thangs a handout Neither

found the recovery requirements significant, deterrents fo

secking welfare benefith though Commissioner Qinsherg

listed a variety of reasons (pride, resentment of investiga

tive procedtires, ete.) why eligible people fil fo npply.

Commissioner Wyman exprossed the view that the New

York repayment requirements, as they are administered and

linjted, have no adverse effect upon the desire fo. become

self-supporting, Asked tf the provisions affirmatively pro

mote this desire, Commissioner Ginsberg said:

“LT don't know that they do basieally, You have, of

coursy, a dual responsibility.

“One is to the eblient and the other is to the seiiinanhin

bility’ef the appropriate use of the public funds,

| think this provision goes to the second objective.”

oo *

o

m1 [I.

. Before stating and ruling upon plaintiffs’ contentions, if

will be useful to note the dimensions and the context of our

problem, On the facts before us, recipients of assistance

under the programs involved are subject to three forms os

repay ment obligation: 5

(1) Alien on interests they own in real property—

specifically, Mrs. Snell’s interest -in her cooperative

apartment. —

(2) A lien on potential or actual recoveries for per-

sonal injuries—illustrated here in the cases of plain-

tiffs Ramos, Malave, and Whaley.

ony

2h

(3) An nssignment of the interest of an insured recip.

ent in Vile insnrinee policies, evidently under New

York Novinl Serviews Law Q106, whieh allows for re.

rovers of welfare assistance payments from such poli

vies i enaes where “the estate of the ABRIL is naire

He henefeinny or ne benefeiney is mained” the siibjeet

Of complaint by. plaintitt Marley, . 7 -

| While S104 of the New York Social Services Law (note Z,

Sep) Appenra on ita Taee to nithorize public welfare offi.

Cine fo recover “fhe eost of % * “nssistince and care” from

my “realor personal property” of the recipient (subject

fon TO venr limitations period), authoritative regulations

aubatantially limit (his power, Notably, if is provided hy

rewilation, and anequivonlly represented to this court, that

ho Beh recovery miny he sought from wages Or salaries

Oor From: property aequired with such earnings.” This re-

afriefion, owe hind nothing more before ns, contd probably

be taken ax an authoritative confinement of the statutory

"No referral, [for -recovery purposes| shall be made if the

Hewly acquired assets consmint wolely of income from employment.”

Polietes Governing the Administration of Public Arniatance, City

Mf Now York Department of Welfare (reissued August 1, 1963)

$189,

The uncontradicted deposition textimony of the defendant State

Commissioner (at) pp. 11, 25) and 27) reports that the policy

exempting carnings is xiute-wide, There is no dispute between

the parties on this subject. . In any event, we have only City —

people before ux. And none of these plaintiffs claims that his

earnings have been or will be pursued for recovery. Compare

note 27, infra. Judge Kaufman mentions, however, that plaintiff

Marley may conccivably have used earnings to pay her insurance

premiums. That could be, but she has not said so here nor has

she indicated to the administrative officials that the exemption

‘of earnings should ‘inure to her ‘benefit. to any degree. We per-

ceive no reason in this state of affairs why a three-judge court

should explore further a conceivable violation of a regulation

which Mrs. Marley reither asserts nor has mentioned to the of-

ficials bound by that regulation. ;

26

power, cf. Phyle v. Duffy, 334 U. S. 431, 441 (1948) ;

Gerende v. Election Board, 341 U.,S. 56 (1951), discussed

in Whitehill v. Elkins, U. S. —— (1967), 36 U.S. L. W.

4006 (Nov. 7, 1967), and would probably be enforceable

against the welfare authorities in’ any event, Yellin v.

United States, 374 U.S. 109, 121 (1963) ; Service v. Dulles,

354 U. S. 363, 379-80 (1957) ; Accardi v. Shaughnessy, 347

U. S. 260 (1954) ; Bridgés v. Wixon, 326 U. 8. 135, 153

(1945). Moreover, we have no plaintiff before us from

whom recovery has been sought out of the fruits of gainful

employment and no suggestion 1 in the record that the regula-

tion and representations denying any such practice are not —

accurate reflections of the facts. Accordingly, whether or

not it makes a constitutional difference, it is worth mention-

ing that none of the provisions plaintiffs attack have any

deterrent or giscouraging effect upon the incentives of

welfare recipients to improve their lot by seeking and

engaging in productive employment.

To complete this brief sketch of our context, it may well

be of at least some ¢onstitutional significance (as we note

again below) that provisions for repayment by persons who

receive welfare assistance are containé? in the laws of some

thirty-two states.’* And the only decisions on the subject

disclosed by our research have rejected constitutional at-

tacks generally similar to those mounted by plaintiffs in

this case. Lalic v. Chicago, Burlington & Quincy R.R., 263

F. Supp. 987 (N. D. Ill. 1967); Newland v. Child, 73 Idaho

183 See Leland v. Oregon, 343 U. S. 790, 798 (1952) ; ; and see™

Characteristics of State Public Assistance Plans Under the Social

Security Act, Public Assistance Report No. 50 (U. S. Dept. of

‘Health, Education and Welfare 1964 ed.). The cited Report

shows. laws of this kind for 34 States. Since its issuance, however,

two States (Michigan and West Virginia) have repealed their

statutes.

27

530, 254 P. 2d 1066 (1953) ; Beck v. Buena Park Hotel Corp., °

30 Ill. 2d 343, 196°N. E. 2d 686 (1964); Donoho v. O’Con-

nell’s, Inc., 18 Ill. 2d 432, 164 N. E, 2d 52 (1960); Dimke v.

Finke, 209 Minn. 29; 295 N. W. 75 (1940) ; Wallberg v. Utah

Public Welfare Comm’r, 115 Utah 242, 203 P. 2d 935

(1949).

ITI.

While plaintiffs’ briefs are neither terse nor tightly: or-

ganized, their constitutional arguments appear ultimately

to fall under three headings: first, that the state recovery _

provisions deny the due process guaranteed by the Four-

teenth Amendment; second, that they deny the equal protec-

tion of the laws required by that Amendment; and, third,

that, they conflict with federal social security legislation,

thus contravening the Supremacy Clause of Article VI,

Clause 2. We consider the arguments in the order stated.

Due Process

1. Alleged irrationality of the legislative judgment

The repayment provisions are said by plaintiffs to be

arbitrary, oppressive, and irrational. . This is so, they say,

4 We are not unaware of the burgeoning problems of bringing

legal services to the poor and exploring such relatively untrodden

areas as the one here in question. Nor do we suppose that the

few precedents “in point” can be taken as dispositive on subjects

like this. It would be helpful, nevertheless, when it is proposed

to break new constitutional ground, to have briefs which at least.

mention the pertinent learning already in the books.

** Before dealing with the merits, defendants urge that this

is a case for application of the somewhat diminished doctrine of

“abstention.” But there appear to be no valid grounds for ab-

staining, and we have had, since the briefs were filed, controlling

authority that compels rejection of this course. See Damico v.

California, -—— U. 8. (1967), 36 U. S. L. W. 3254.

28

because the State, by this requirement, defeats ‘its own

stated objective of seeking to make welfare recipients pro-

ductive and self- supporting. Further, they argue, by: de-

manding liens upon small property interests or contingent

rights to recover for personal injuries, the statutes “tend

to frustrate desire for human dignity and independence.”

Citing their deposition witnesses expert in the field of

social work, they urge that the assignment of real property

interests “is disastrous from a social work point of view.”

More broadly, it is argued, the effort to reach forms of prop- -

erty other than realty has similar consequences of affront-

ing human dignity and impeding the objective of rehabili-

tation. Plaintiffs denounce as trivial and insufficient what

they find to be the “only conceivable rationale” of _

recovery provisions—"to attempt te save the state money.”

The objective cannot justify the hurt, they say, and-is not

really served in any case because the amounts recovered |

are minuscule in comparison with the total of welfare ex-

penditures."* Among the vicious consequences of the State’s

recovery demands, plaintiffs report, is the refusal of people

eligible for welfare benefits to apply for them becayse they

are unwilling to have liens put upon their real property,

insurance policies, or personal injury claims.

We do not stop to analyze these arguments in particular

detail. We note only by the way some patent difficulties in

the things plaintiffs say: (1) Their major thesis that the

State has undercut its own statutory objective of rehabili-

tation is hardly a point going to federal due process.

(2) If it mattered, we might doubt the standing of persons

accepting assistance-to complain that ‘i unidentified

16 For 1966, the briefs tell us, recoveries » cinpanted only to some

$5,000,000 as against state welfare expenditures of about

$1.200,000,000.

he etn lal ir Bt ca EE 2

29

people refuse welfare payments because of the conditions

plaintiffs question. (3) There is no point in ‘dwelling upon

the repeated suggestion that personal injury recoveries are

designed to make: people “whole,” so that exactions from

~ such funds deny due process by making them less than

_ “whole.” It s€ems -sufficient to say that the Constitution

we are supposed to expound gives us no authority to follow

the figurative trails of metaphors like this.”

-— Apart from such passing observations, we assume that

‘rational men could agree fully with plaintiffs’ view that the

painful consequences of the recovery statutes outweigh the

measurable benefits the State seeks from them. - We also

accept without questioning the view of the scholar who testi-

fied in his deposition that “any soeial work purpose in the

recovery provisions is quite beyond [his] comprehension.” —

The plain flaw that none the less destroys plaintiffs’ thesis —

is that it is brought to the wrong forum. Plaintiffs’ com-

plaints might move us to vote for changes if we sat as

state legislators. But they do not approach the showing of.

irrationality or arbitrariness warranting exercise of the - -

limited veto power of the federal judiciary under the Four-

teenth Amendment. ‘

_ Against plaintiffs’ views, as defendants point out, there

are arguments of policy which can scarcely be dismissed

as frivolous, whether or not we would find them convincing

if the judgments of policy were for us. The State is en-

titled, they note, to consider relative need and available

resources in distributing its limited welfare funds. Even

Consider the applicant who has no assets except $500,000

recovered to make him “whole” in a personal injury suit. Would

anyone suppose a welfare department must, or could, declare

him eligible? For. constitutional purposes, the. hypothetical ques-

tion of eligibility is not different from the question of personal

injury claims as sources of potential recovery. ;

0

“trivial” recoveries like $5,000,000 need not be deemed be-

neath notice. Whether they are correct or not, legislators

could plausibly judge that a sense of obligation to con-

tribute or repay if possible serves some function relevant

to the concern for human dignity. Moreover, the objectives

of rehabilitation and self-support are not seriously impeded

af all; by exempting earnings, the statutes, as they are.

administered, leave wholly unfettered the desire and search

for independence through gainful work.

We sketch these countervailing points for the single pur-

pose of indicating what seems plain to us—that we could

hold the statutes unconstitutional only if we were invested

by the “convenient vagueness” of the Due Process Clause’®

with a power, long since denied us, to invalidate state laws

“because they may. be unwise, improvident or out of har-

mony with a particular school of thought.” Williamson v.

Lee Optical Co., 348 U. S. 483, 488 (1955); see also Nebbia

"vy. New York, 291 U. S.-502, 537-38 (1934); Olsen v. Ne-

braska, 313 U. 8. 236, 246-47 (1941); Qweenside Hills Co. v..

Sazl, 328 U. S. 80, 82-83 (1946) ; Day-Brite Lighting, Inc. v.

. Missouri, 342 U.S. 421, 423 (1952); Seagram & Sons v.

Hostetter, 384 U. S. 35, 47-48 (1966). To be sure, cases like

those just cited reflect mainly the recognition of our highest

Court during the fast thirty years or so that it does not sit

as final arbiter of state social policies affecting matters of

business and ‘industrial regulation. (Note, however, the

claims of personal “liberty” involved in Ferguson v.

— Skrupa, 372 U.S. 726, 729-32 (1963); Fay v. New York, 332

-U. S. 261, 281, 294-96 (1947); Jacobson v. Massachusetts,

~ 197.U. S. 11, 28, 30-33 (1905).) And, it is said, the subject .

= welfare administration, where the primitive needs of

18 Hough, Due Process of a en 30 Harv. L. Rev. 218

(1919).

31.

desperate people are at stake, is altogether different. There.

is a difference, certainly, but not a consfitutional one—not.

any that commissions us to tell those the people elect how

they should resolve competing values of the kind here in

question.”*-

It is appropriate from tines to time to appreciate the full

measure and continued vitality of what Mr. Justice Holmes’

meant when he said:: “The Fourteenth -Amendment does

not enact Mr. Herbert Spencer’s Social Statics.” Lochner

v. New York, 198 U. S. 45, 75 (1905) (dissenting). Now.

that his dissenting thought has won the day, we ought not

to trivialize the achievement by viewing it only as the in-

‘terment of Spencer’s social doctrines. The principle ap-

plies to the social philosophers that most of us, including

judges, find more persuasive than Spencer. If we were

free to enforce what we may modestly deem our more en-

lightened view, we might seriously consider the changes

plaintiffs propose. But we have no such power, and it is

better in the end for everyone that this is so.

We were reminded only the other day, though the con-

_text-was different, of the basic principle: “The purpose of

1° There is no question, of course, that state action respecting

welfare is as subject to -the Fourteenth Amendment as other

exertions of state power. This decision is not rested upon any

suggestion that welfare assistance is a “privilege” rather than a

“right” and therefore outside the purview of the Due Process

and Equal Protection Clauses. Cf. Sherbert, v. Verner, 374 U. 8.

. 898, 404-06 (1963); Flemming v. Nestor, 363 U. S. 603, 608-11

(1960) ; Schware v. Board of Bar Examimers, 353 U? S8.-232, 239

n. 5 (1957) ; Gonzales v. Freeman, 334 F. 2d 570, 574 (D. C. Cir.

1964). See also O'Neill, Unconstitutional Conditions : Welfare

Benefits With Strings Attached, 54 Calif. L. Rev. 443 (1966).

Our point is the narrower one that the limited’ right of sub-

stantive due process insures only against capriciousness reaching

a level of irrationality, not against judgments of policy that may

be unwise or even “harsh” in their balancing of competing in-

terests. .

32

the Constitution and the Bill of Rights, unlike the more

recent models promoting a welfare state, was to take gov-

ernment off the backs cf people.” Schneider v. Smith,

U. S. —— (1968), 36 U. S. Law. Week 4131, 4133. The -

principle counsels that it is not for federal judges to be

“liberal”: or “conservative” in advancing and ordering

-measures which undoubtedly relate to. basic matters of hu-

man decency ‘and welfare. The constricted test in this

forum is one of minimal rationality. By that test it plaintiffs’

due process argument must fail.

2. The charge of vagueness

There is a suggestion in plaintiffs’ brief, somewhat ob-

scurely expressed, that the New York recovery provisions |

deny due procéss because of the ovérbreadth with which

they are drawn. The “vagueness” is said to inhere in the

grant of discretion by which public welfare officials “may”

demand assignments, enforce liens, or institute recovery

actions. See N. ¥. Social Services Law, §§104, 104-a, 105,

and 360, notes 2, 3, 6; and 8 supra. It is not altogether clear

_ whether the argument is meant as a proposed extension of

the void-for-vagueness doctrine as it applies to problems

of free expression, e.g., Kunz v. New York, 340 U.-S. 290,

_ 293-94 (1951) and criminal liability, e.g., Lanzetta v. New

Jersey, 306 U. S. 451 (1939), or whether the claim relates

to a supposed excess in delegating power to administrators.

On either formulation, the position is not sound,

The problem of “delegation,” so denominated, may be

put quickly to one side. The separation-of-powers prin-

ciple, however pervasive it may be in American govern-

ments, is not in itself. énforceable against the States as a

matter of federal constitutional law. See Sweees Y Ve New

Hampshire, 354 U.S. 234, 255 (1957).

33

Viewed as a-charge that the state statutes are fatally

“vague and standardless,” Giaccio v. Pennsylvania, 382

U. S. 399, 402 (1966), plaintiffs’ theory fares no better. To

begin with, it is not the case that the public welfare officials —

are left at large in enforcing the recovery provisions. The

statutory complex reveals pertinent criteria,” including

notably the mandate in Social Services Law §131(1) that

the responsible officials must, “whenever possible, admin-

“ister such care, treatment, and service as may restore * * *

[needy] persons to a condition of self-support or. self-care

*** ” This guideline would appear, at least in part, to.

account for the significant exemption, by administrative

regulation, for employment earnings.

Apart from the fact that the statutory subject matter —

provides explicit and. implicit considerations to channel the

exercise of discretion, plaintiffs’ attack upon the existence

. of such leeway suggests an essentially absurd alternative

of mandatory enforcement. Would they, or anyone, be bet-

- ter off if the statutes said welfare officials “must” rather

than “may” insist upon recovery in every case?” The

rhetorical question calls to mind the numerous and in-

_escapable areas. where decisions on the invocation of en-

forcement powers must be and are confided to discretion

—for example,.in pardoning, prosecuting, and sentencing.

20Cf State v. Griffiths, 152 Conn. 48, 57, 203 A. 2d 144, 149

(1964), upholding discretion of welfare commissioner to deter-

- mine financial ability of certain relatives to contribute support.

The Court found adequate standards woven through the rest of

the chapter relating to AFDC. -

22 We do not suggest, obviously, that such an unqualified direc-

tive would be the only possible biternative to the grant of dis-

eretionary power as it stands. It would be, however, a permis-

sible alternative under the view we take of the state legislative

power. ag

34

r

To argue, as plaintiffs do, that the very existence of such

\_ latitude offends the Federal Constitution is to suggest a

\ fantastic judicial power to stop the States from governing.

\ Cf, eg., Oyler v. Boles,368 U. S. 448, 454-56 (1962); Wil-

\liams-v. New York, 337 U. S. 241 (1949); Moog Industries,

Inc. v. F. T. C., 355 U. 8, 411, 413°(1958) ; Gross v. Bishop,

. 3877 F. 2d 492, 494 (8th Cir. 1967); Moss v. Hornig, 314

F. 2d 89 (2d Cir. 1963) ; United States v. Shaughnessy, 180

F.2d 489, 491 (2d Cir. 1950).” .

This is not to say, of course, that the power to mitigate

the law’s literal exactions is beyond constitutional scrutiny.

Arbitrary or invidious application in any area may trans-—

gress the bounds of fundamental fairness and equality set

by the Fourteenth Amendment. Cf.,’e.g., Accardi v. Shaugh-

: nessy, 347 U. S. 260, 268 (1954) ; Continental Baking Co. v.

Woodring, 286 U. S. 352, 367-68 (1932)5 Corporation Com-

mission v. Lowe, 281 U. S. 431, 438 (1930); Yick Wo v~

Hopkins, 118 U. S..356, 366 (1886) ; Gross v. Bishop, supra,

377 F. 2d at 495. But there is no showing by plaintiffs of

capriciousness or irrational discrimination in the applica-

tion of the recovery provistegs, either generally or, more

importantly, to plaintiffs themselves. Urging that the

statutes be erased sweepingly on their face, plaintiffs ignore

the fact that the discretion conferred upon administrators

: is subject to test and check both in administrative “fair

hearings,” N. Y. Social Services Law §§304(4) (APTD) and

72 Compare with the provisions here in question Section 204 of

the Social Security Act, 49 Stat. 624, as amended January 2, 1968, —

53 Stat. 1368, 42 U. S. C. §404, which provides for recovery of

overpayments and states in subsection (b): “In any case -in

_ which more than the correct amount of payment has been made,

there shall be no adjustment of payments to, or recovery by the

United States from, any person who is without fault if such ad-

justment or recovery would defeat the purpose of this title’ or

would be against equity and good conscience.”

35

353(2) (AFDC), and on judicial review under N. Y. CPLR

Article 78. Cf. Laackman v. McManus, 43 Mise. 2d 382, 251

N. Y. S. 2d 191 (Sup. Ct. 1964) ; Greenwood v. Taylor, 270

App. Div. 849, 60 N. Y. S. 2d 452, rearg. denied, 270 App.

-* Div. 1024, 63 N. Y. S. 2d 216 (1946). And see Bourjois Inc.

v. Chapman, 301 U. S. 183, 189 (1937) ; American Power

Co. v. S. E. C., 329 U. 8. 90, 105 (1946).

Plaintiffs are wrong in believing that this is a case appro-

priate for holding statutes invalid on their face. This is

not a situation, like that most familiarly encountered under

the First Amendment, where the very existence of the enact-

ment serves to “chill” or otherwise impair the exercise of ©

protected freedoms. E.g., Thornhill v. Alabama, 310 U. S.

88, 98 (1940) ; NAACP v. Button, 371 U. S. 415 (1963). In

_ other contexts, even where criminal liability is in issue, the

adequacy of the statutory message is normally to be ap-

praised “not only in terms of the statute ‘on its face’ but -

also in the light of the conduct to which it is applied.”

United States v. National Dairy Corp., 372 U. 8. 29, 36

(1963). That restraining principle applies a fortvori to the

statutes here in question. .

Equal Protection

Considerations similar to those just canvassed apply to

this branch of plaintiffs’ argument.

Plaintiffs list several “discriminations” which result; in

their view, in a denial of equal protection:

(1) That'the State supphes many benefits for which X

does not seek repayment—Medicaid, public educa-

tion, free milk, /museums, ete.

36°

(2) That the State discriminates between those who have

' property andé'those who do not.

_ (3) That the State makes arbitrary and indefensible dis-

tinctions when it puts liens on personal injury claims

_ but-exempts from such burdens workmen’s compen-

sation awards and benefits paid under the Volunteer

Firemen’s Benefit Law.

There is no “logic” in such distinctions, plaintiffs say. But

neither the inapposite appeal to “logic” not any ground of

constitutional law supports their view.

Like the life of the law generally, the Fourteenth Amend-

ment was not designed as an exercise jn logic. It is ancient

learning by now that a classification meets the equal pro-

tection test “if it is practical, and is not reviewable unless

palpably arbitrary.” Orient Insurance Co. v. Daggs, 172

U. S. 557, 562 (1869). If the classification has “some ‘rea-

sonable basis,” it cannot be held offensive to the Equal

Protection Clause “because it is not made with mathemati-

cal nicety or because in practice it results in some inequal-

ity.” Lindsley y. Natural Carbonic Gas Co., 220 U. 8. 61,

_ 78 (1911). “The problems of government are practical ones

_ and may justify, if they do not reqpire, rough accommoda-

tions—illogical, it may be,,and unscientific.” Metropolis

Theatre Co. v. Chicago, 228 U. S. 61, 69-70 (1913).

Measured against such familiar teachings, plaintiffs’

arguments verge upon (or reach) the frivolous.” It will |

28'The characterization seems fully merited when plaintiffs ar-

rive at ‘their denuncigtion of the distinction between people who ~

do and people who dé not have money or other property. It would

' be difficult to conceive of a more pertinent criterion for welfare

assistance unless or until someone urges (as plaintiffs do not ap-

pear to be urging) that a “means test,’> whatever issues of policy

it may raise, must be outlawed under the Constitution.

Rewcastle

37

_be sufficient to discuss briefly their relatively. plausible con-

tention that‘the exemptions for workmen’s compensation

and volunteer firemen’s awards render invalid the lien upon

personal injury claims.

The special concerns which led to singling out the groupe

| - benefited by workmen’s compensation laws are too well

known by now to warrant restatement here. In a way,

: plaintiffs’ views on this subject are reminiscent of unsuc-

cessful arguments in another era that the laws were invalid

because they excluded from cove~age some classes of work-

ing people. E.g., Middleton v. Texas Power & Light Co.,

249 U. S. 152, 157-60 (1919); New York Central R.R. v.

White, 243 U. S. 188, 208 (1917). However that may be,

there are characteristic features of New York’s Workmen’s

Compensation Law which further the refutation of plain-

tiffs’ position. Section 33 of that Law exempts benefits

“from levy, .execution and attachment or other remedy for

recovery or collection of a debt.” There is no comparable

general exemption for personal injury recoveries. Work-

men’s compensation benefits are generally given in. small,

periodic payments under schedules which exclude the kinds

of uncertain and potentially substantial recoveries in per-

_ sonal injury suits for pain.and suffering.

Equally pertinent details bear mention, without being

essential, on the subject of benefits for volunteer fireman.

The statutes providing such benefits declare and assume a

public debt to volunteer firemen for “service which [they]

render to others without remuneration.” N. Y. Volunteer

Firemen’s Benefit Law §2. In this way, the State under-

takes both to encourage service of this kind and to. recog-

-nize a “moral obligation” upon the community to compen-

sate at least for injury or death incurred in the line of such

duty. See Bauman v. Town of Irondequoit, 204 Misc. 494,

38

500, 122 N. Y. S. 2d.47, 52, aff’d, 282 App. Div. 916, 125

N. Y. S. 2d 250 (1953), aff'd 307 N. Y. 926, 123 N. E. 2d

574 (1954).

The exemptions plaintiffs attack do not approach the

kind of -caprice which could generate serious doabts under

the Equal Protection Clause. We agree with and follow

the views of Justice Schaefer, rejecting for a unanimous

Court essentially the same arguments-under an essentially

similar statutory scheme. Donoho v. O'Connell's, Inc., 18

Ill. 2d 432, 164 N. EB. 2d 52, 55-56 (1960) :

“It is true that the statute does not provide compre-

hensively for a lien upon all potential assets that might

be or become available to a recipient. But tie validity

of legislation does not depend upon comple*e compre-

hensiveness, nor does the constitution require’ that it

conform to an ideal pattern of orderliness. It is enough

if the selection of subjects for inclusion anc exclusion .

rests upon a rational basis. * * * We think that such a

basis exists here.

“The Workmen’s Compensation Act, the Workmen’s

Occupational Diseases Act and the Wrongful Death

- Act fix maximum limits of recovery, regardless of the

extent of the actual loss that was sustained. Payments

_under the Workmen’s Compensation and Occupational

Diseases acts are ordinarily made periodically and

liens upon those payments are forbidden. Ill. Rev.

Stat. 1959, chap. 48, pars. 138.21, 172.56. * * * The

limited recoveries under these statutes do not include

an allowance for pain and suffering, an element of

damage which looms large in personal injury cases. It

is common knowledge that the amounts recovered un-

der these statutes are far smaller than amounts re-

ey in common-law actions. These are’ genuine

/

‘

\

.

~

39

_ differences of situation, which will support legislative

classification. Furthermore, the small amount of the

periodic payments under the Workmen’s Compensa-

tion and Occupational Diseases acts might make

collection a difficult and expensive task, and the legis-

lature could properly act upon this practical considera- -

tion.”

See to similar effect the cases cited at the end of “II,” —

‘supra. a 7 oo

A few words should be added to deal with plaintiffs’ re-

lhance upon recent decisions which have struck down stat-

utes requiring a prior period of state residence as a con-

dition of eligibility for welfare assistance, Thompson v.

Shapiro, 270 F. Supp. 331 (D. Conn. 1967); Green v. De-

partment of Public Welfare, 270 F. Supp. 173 (D. Del.

1967); Smith v. Reynolds, —— F. Supp. —— (E. D. Pa.

1967),* and upon a decision invalidating a state regulation

which made the immoral] conduct of the mother grounds .

for denying AFDC assistance to her children, Smith v.

King, F. Supp. (M.D. Ala. 1967). We do ‘not

presume to question any of these cases, the results of

which are scheduled for early examination by the Supreme

Court.” It is enough to say that they are clearly distin-

guishable from this one. Residence requirements, resulting

in denials of aid as compared with grants conditioned upon

obligations to repay, touch an always delicate subject of

discrimination favoring state residents over non-residents.

** Contra: Harrell v. Board of Commissioners of District of

Columbia, 269 F. Supp. 919 (D. D. C. 1967).

2° Probable jurisdiction has been noted in the cases of Thomp-

son v. Shapiro (No. 813, Jan. 15, 1968) and Smith vy. King (No..

949, Jan. 22, 1968).

40

They have been thought, moreover, by the courts finding

inyalidity, to-trench upon a specifically defined constitu-

tional freedom, the right of interstate travel as it was

_ specifically enforced in Edwards v: California, 314 U. S.

160 (1941). The differences from the situation before us.

are patent. Similarly far removed is the problem presented

by secular commandments that would visit upon children

‘ the sins of their parents. ,

The Supremacy Clause

The Social Security Act contains among its provisions

- for aid to families with dependent children the statement

of a federal purpose to enable recipients of assistance “to

attain or retain capability for * * * maximum self-support

and personal independence * * *.” 42 U.S. C. §601. Simi-

lar language appears in the titles relating to assistance for

the blind and disabled. 42 U. S. C. §§1201, 1351. Plaintiffs

say the New York recovery provisions are in irreconcilable

conflict -with these federal statutes. The argument lacks —

merit. :

As noted already,.New York specifically exempts wages

and salaries frem‘the repayment obligation. The statutes

plaintiffs attack reach only to property already owned or

to acquisitions which have more or less the character of

“windfalls”—at least in the sense that such acquisitions

do not result from purposeful efforts “to attain or retain

capability for self-support or self-care.” 42 U.S. C. §1351.

‘This alone would appéar to refute plaintiffs’ claim of .

inconsistency.” -At any rate, this is certainly not a case

26 This is not to suggest that the State could not reach earnings.

It is merely to say that the. case is easier because the State does

- not undertake to do so. ,

41

where “the repugnance or conflict is so ‘direct and ‘positive’

that the two acts cannot ‘be reconciled or consistently stand

together.’?” Kelly v. Washington, 302 U. S. 1, 10 (1937).

And although it is true that “[l]ocal regulation which

would pass muster under the Due Process Clause might

nonetheless fail to ‘survive other challenges to constitu-

‘ tionality that bring the Supremacy Clause into play,” Bibb

v. Navajo Freight Lines, 359 U. S. 520, 529 (1959), “unless

the state law, in terms or in its practical administration,

conflicts with the Act of Congress, or plainly and palpably

infringes its policy,” Southern Pacific Co. v. Arizona, 325

U.S. 761, 766 (1945), the Supremacy Clause is not violated.

There are other, perhaps more decisive answers to plain-

tiffs’ theory. ‘The federa! statutes say nothing about re-

payment, except to recognize and make provision for at

least some forms’ of recovery from people who have re-

ceived assistance. In providing for computation of grants

to the States, the Social Security Act declares that each

State’s periodic grant is to be “reduced by a.sum equivalent

to the pro rata share to which the United States is equita-

bly entitled, as determined by the Secretary: of Health,

Education, and Welfare, of the net amount recovered dur-

ing any prior quarter. by the State * * *.” 42 U.S. C.

_ §603(b)(2)(AFDC), §1353 (b)(2)(APTD). If these pro-

visions do not positively authorize, they certainly accommo-

date hospitably, the repayment obligations plaintiffs assail.

Plaintiffs cite committee reports referring to the origi-

nals of the foregoing statutes where it was observed that

the States might be collecting back from recipients (or

their estates) and that such recoveries might happen, “for

example, because those persons had been defrauding the

State * * *.” H. R. Rep. No. 65, 74th Cong., Ist Sess. 17

{

; | a

a

(1985); S. Rep. No. 628, 74th Cong., Ist Sess. 29 (1935).

From these items of legislative history, plaintiffs reason

that (a) the “example” of recoveries for fraud was meant

to be exhaustive and (b) the implication is to forbid any

other kind of recoverics, The reasoning is heady but un-

persuasive,

Concluding the thin subject of plaintiffs Supremacy ar-

gument, we reeall the wide prevalonce among the States of

statutes like those in question; the duty of HIEW's Seere-

tary to disapprove, and withhold federal funds from, wn-

lawful state programs, 42 UL S.C. $9804, G04, 1204, 1354;

ef. Smith vi King, K. Supp. (M. D. Ala.

1967) ; and the apparent acquiescence of Congress (inelud-

ing steady appropriations) over the years in state prrange-

“ments which are so common that they must be deemed to

be known at least to the responsible and interested Com-

mittees of the Congress. There. is authoritative weight

both in the practical administrative construction by those

responsible for the federal programs, United States. v.

Republic Stecl Corp., 362 U.S. 482, 490 n. 5 (1960); F. 7. C.

v. Mandel Brothers, 359 UL S. a 391 (1959); F. HH. A. v.

The Darlington, Inc., 358 U.S. 84, 89-90 (1958); McLaren

v. Flesscher, 256 U.S. 477, 481 (1921), and the seeming

acceptance (and support) by the Congress itself of the

~ measures plaintiffs denounce, e.g., ef. Ivanhoe Irrig. Dist.

v. McCracken, 357 U.S. 275, 293 (1958); Fleming v.

Mohawk Co., 351 U. S. 111, 116 (1947); Brooks v. Dewar,

313 U.S. 354, 360 (1941); Alaska Steamship Co. v. United

‘States, 290 E. S. 256, 262 (1933). Against arguments as

tenuous as the ones plaintiffs marshal, such considerations

alene would be sufficient to sustain the state legislation.

«

43

We conclude, in sum, that the complaint is without merit.

Judgment will be entered ordering its dismissal.”’

. Tt is so ordered.

Dated: New York, New. York

~ February 29, 1968

/8/ CHARLES M. METZNER

United States. District Judge

/8/ Marvin K. FRANKEL

United States District Judge

44

me

APPENDIX C

Dissenting Opinion of the District Court

Kaurman, Cw.

I do not dispute several commonplace principles set forth

in the majority opinion. For example, I agree that the

State of New York has the primary responsibility to de-

velop standards for the distribution of the resources allo-

cated to public assistance programs in which it has elected

to participate. I agree also that the state may legitimately

attempt to conserve resources by imposing some obligation

to repay on persons who receive assistance. Nor do-I take

issue with the well established precept that federal courts

sitting in constitutional judgment of state statutes should

be guided by counsels of self-restraint so that “ill starred

adventures of the judiciary [do not] jeopardize its essential

usefulness.” R. Jackson, The Struggle for Judicial Suprem-

acy 321 (1941). My point of difference with the majority

turns on whether the means adopted by the State of New

27~In their complaint plaintiffs asserted their cause as a class

action. We have had no submissions from either side on the

questions to be considered under Fed. R. Civ. P. 23 before de-

termining whether the suit is: properly maintainable as one on

behalf of a class. On the small record as it stands, there is un-

certainty whether plaintiffs. may be deemed adequate represen-

tatives of anyone but themselves. Cf. Hansberry v. Lee, 311 U. S.

32 (1940); Fed. R. Civ. P. 23(a). In the circumstances, since

the complaint is being dismissed, there is no substantial reason

why we should purport to “bind” others, apart from any tem-

porary or permanent effect this decision may have as stare decisis. .

Accordingly, it is recorded that no sufficient grounds have been

shown for deeming this a class suit and that the judgment of

dismissal will “incJude” (in the language of Rule 23) only the

named parties. :

, 4°

York* economically and effectively to further the objectives

of public assistance deprive these recipients of the liberty -

and equality secured to them by the Fourteenth Amend-

ment,

Where the state regulates or interferes with fundamental

aspects of freedom, “precision of regulation must be the

touchstone.” Griswold v. Connecticut, 381 U. S. 479, 498

(1965), quoting NAACP y..Button, 371 U. S. 415, 438

(1963). If a statute or regulation impinges on critical per-

sonal interests, we are required to subject it to closer

scrutiny, and to search with care for adequate justification.

We must ascertain, therefore, whether the restriction is

reasonably related to the public interest the legislature

sought to secure, and if @ could have been as effectively

secured with less abras#e impact on the personal right

involved. Because I believe the scheme designed by New

York does not withstand the requisite inquiry, I disagree

with my brothers. I hasten to add.that I do not dissent

because I believe that it is beyond the power of the state

to devise a rational recovery provision. Instead, I am of

the view that by reuson of the seriousness of the personal

interest involved, the inelegance of the scheme designed,

the ease of correcting it by more discriminating methods,

and the insubstantiality of the interest served, the State of

New York has riot acted with adequate precision. Where

substantial challenge is made.to state regulations imping-

* The plaintiffs before us received public assistance under pro-

grams administered by the Commissioner of Social Services in

New York City and we are thus presented with statutes as ap-

plied in New York City. The policy of exempting savings derived

from accumulated income, quoted by Judge Frankel at note 12

supra, is a directive issued by the Commissioner of Social Services

for the City of New. York. The defendant State Commissioner,

however, has stated that the policy exempting earnings .is state-

wide. ; eas

46

ing upon increasingly important yet largely overlooked

aspects of personal liberty, I believe the federal courts are

obligated to do more than dismiss the-complaint with facile

reference’ to judicial attitudes toward state attempts to

regulate business interests in order to: foster. personal

dignity. .

The recovery obligation as enforced by New York City

fails to meet the test of minimal rationality. It does not

distinguish between true and substantial windfalls that are

unrelated to the capacity to retain self-support and prop-

erty acquired by purposeful effort that is essential to main-

tain whatever level of independence the welfare recipient

has achieved. The policy of exempting accumulated income

from attachment is concededly designed to meet this re-

quired distinction. I would hold, however, that the state

is constitutionally required to go further and to éxempt a

modest interest in real property or insurance and at-least

some part of damages recovered for personal injury. It

may be true that the Constitution does not impose an

. affirmative obligation on the state to create the circum.”

stances mm which people will become independent and self-—

. supporting. But Ido suggest that it does prohibit the State

from placing obstacles in the path of efforts to become

independent of welfare bounty or to maintain the indepen- .

dence already achieved. The social benefit of public assist-

ance would come to naught if this were not so.

If the praperty a welfare recipient is able to acquire by

legitimate means is subject to attachment without regard

to amount, the state thus fails to afford proper scope to.

one’s right to be an independent individual, not compelled

to rely on government for the right to exist. The requisite

precision and discrimination is not unattainable. It may be

achieved by a fixed dollar value exemption, or, with respect

to real estate, by an outright exemption for property used

as a residence.’ And, while we should not concern ourselves

with the precise terms of a valid regulatory scheme, we

cannot ignore significant imperfections engendered by an

indiscriminate obligation to repay the costs of public as-

sistance. To require precision is not, as it is suggested,

to demand that the State equalize the economic condition

of its citizens. It simply serves to restrain the State from

unnecessarily and arbitrarily hindering the personal striv-

ings and ambitions of individuals to escape the inhibiting

embrace of poverty. - >

' Under the recovery provisions, Geraldine Snell’s $900

interest in a cooperative apartment has been assigned to the

Department of Social Services; Miriam Ramos, Juan

Malave and Robert Whaley have been obligated to repay

the full cost of public assistance from potential recoveries

for injuries sustained in accidents; and Helen Marley, who

was dependent on public assistance during a serious illness

from 1945 to 1954, is unable to obtain the proceeds of a

small insurance »olicy because of a prior assignment to the

_Department. — “ . |

It seems to me beyond question that we are dealing here

with a facet of liberty. The federal purpose in providing

aid to dependent children is, it is agreed, intended to afford -

* California, with severiteen other states, imposes no obligation

to repay on welfare recipients. In computing eligibility, the Cali-

fornia statute indicates the form of exemption: that might also be

applied to recovery. Thus Section 11261, Ann. Calif. Code, “Wel-

fare and Institutions” does not permit consideration of personal

property “directly connected with efforts to become self-support-

ing.” Section 11255 permits AFDC recipients to own realty

valued at no more than $5,000. Section 11152 permits a blind,

disabled or aged recipient to retain realty, of any value, “if* it

provides him with a home.” Section 11154 permits a reserve “for

future contingencies” of $2,000 for a married couple on Old Age

Assistance, Aid to the ‘Disabled, or Aid to the Blind programs.

2

=

.

_ recipients the opportunity to “attain or retain capability

"for... self-support and personal independence ... .” 42

U. S. C. §601. The freedom to achieve “self-support and

personal independence” is within the compass of “liberty”

secured by the Fourteenth Amendment against undue re- -

- straint. The word “liberty” cannot be defined with pre-

cision; it “is not a series of isolated points pricked out .

[but] a rational continuum,” Poe v. Ullman, 367 U. S. 497,

. 543 (1961) (Harlan, J. dissenting); Meyer v. Nebraska, |

262 U.S. 390, 399 (1923). Liberty is not “confined to mere

freedom from bodily restraint . : [but] extends to. the

full range of conduct which the individual is free to pursue”

Bolling v. Sharpe, 347 U.S. 497 (1954).

While the precise contours and. boundaries of the term

may be vague, its reach is determined from the traditions .

and history of the land. No principle has firmer -roots in

that tradition than that the security of meager property

interests is an aspect of self-care; that the goals of par-

ticipatory democracy are furthered by an independent and

secure ¢itizenry.? We err if this tradition is forgotten.

. See generally Philbrick, Changing Conceptions of Property

in-Law, 86 U. Pa: L. Rev. 691 (1938) ; Reich, The New

Property, 73 Yale L. J. 733, 771-774 (1964). It is still true

today that “the only dependable foundation of personals.

liberty is the economi¢ security of private property.” W.

Lippmann, ‘The Method of Freedom 101 (1934). And Pro-

fessor Reich has noted that “more than ever the individual

3 Chapter 29 of Magna Carta declared that “No freeman shall

be taken or imprisoned or disseised ‘of his free tenement, liberties, .

or free customs .. . unless by the law of the land.” In The Fed-

eralist No. 10 James Madison recognized, as John Locke had before

him, the connection between liberty-and property. The ae

52-54 (H. C. Lodge ed. 1888).

4

needs to possess, in whatever form, a small but sovereign

island of his-‘own.” Reich, The New Property, 73 Yale L. J. |

* at 774.

~ The majority earatully reminds us that the purpose. of

the Bill of Rights was “to take government off. the backs

of the people.” Supra, p. 17, quoting Schneider v. Smith,

—— U. 8S. —— (1968), 36 U. S. L. W. 4131, 4133. But it is

just that purpose that commands us to require care and

precision from the state when it deals with “matters - of a

human decency and welfare” *(siupra, p. 17)—when the net’.

effect may well be appreciably or unnecessarily to increase

the burden on the individual. “Paradoxical though it may

seem, the most serious threat to freedom in our programs

of public service and public benefits is to the freedom of

the recipient. ... It behooves us to be constantly on our

guard lest, out of zeal to better people’s lot, we impose on

them patterns of beKavior in matters in which, under our

scheme of things, government ought not to meddle.” Will-

cox, Patterns of Social Legislation. Reflections on the Wel-

fare State, 6 J. of Pub. L. 3, 7 (1957).

My brothers also seem to detect a distinction in the New

York scheme between acquisitions “which have more or

less the character of windfalls” and property acquired by

“purposeful efforts to ‘attain or retain capability. for self-

support or self-care’.” “Whatever the constitutional pro-

priety of this distinction, I cannot see that the statutes

before us draw any such line. Nor can dqunderstand how

the majority can apply its assumed distinction since. we

do not know whether Geraldine Snell’s apartment interest

or Helen Marley’s insurance policy were bought solely

with “income from employment”. or not. Surely the Depart-

ment was not concerned with the source of the recipients’

assets when it protected its claim by prior assignment. I

see no reason, therefore, why the burden of raising the

-

ee

50

issue should: be placed on welfare recipients. If.a welfare. :

récipient begins work, extricates himself from weifare, and

accumulates $500 or $1000 in income, as I understand the

recovery provisions applied in New. York City, his obliga-

tion. to repay .will depend.on whether his sav ings are in- .

vested in real property (or insurance), or placed in a bank

account. In the first illustration, the realty is attached, in

‘ _ the latter the bank account is secure—at least until another

Welfare Commissioner determines otherwise. That is not a —

distinction based on the statutory purpose to encourage in-

dependence; and it is not a distinction with rational justifi-

cation th terms of the state’s interest in minimizing public

expenditures.

|: cannot be argued that the statutes distinguish between

property acquired after the period of assistance and that

accumulated while on the rolls. Snell had her apartment

before receiving ‘aid, and she was obliged to assign it as .

a condition to participation in the program.* In any event,

the obligation to repay would attach as firmly if she ac--

quired the’ property within 10. years after receiving aid,

Also, it appears that some premiums on Marley’s poiicy

were paid.after a long illness with cancer and she was no

longer receiving public aid, yet the full proceeds are sub-

ject to the lien-and beyond her dominion.

_ Plaintiffs Ramos and Whaley have pending claims for

personal injury damages arising out of accidents. Each.

has assigned the potential recoveries to the Department of

4It should be noted that there is no question here of conceal-

ment of assets or fraud. The plaintiffs met the standards ef eligi-

‘bility during the period they received assistance, and their ob-

jection is to the obligation imposed to repay costs of assistance

after they regain self-sufficiency. The Department of Social Ser-

vices need not show any fraud or concealment to ‘exercise its

right of recovery. See Hodson v. Bloise, 173 Misc. 69, 16 N. Y. S.

oa 49 (1939) ; In re Beaman’s Estate, 171 Mise. 578, 13 N. Y. 8.

2d 188 bce

51

at

Social Services to repay the eons of assistance. Plaintiff’

-Malave actually received $400 from’ the Housing Authority

as compensatiqn for injuries, and the welfare officials have

. filed a “notice of lien” against these funds. The law pro-

vides all persons access to the courts in order that they

‘might seek compensation for injuries caused by another.

It is surely inadequate to restore a full measure of com-

fort to the victims -of negligent behavior but it is never-

theless the best means yet devised; Whaley’s limb is ex-

changed . for cash, and Ramos’ emmecified damage is

“corrected” with money—the law can do no more. The

money transferred will serve many purposes—not only does

it pay for medical care but it replaces income that _might—

have been earned but for the disability and, however

crudely, it alleviates suffering by offering material aid.

This inept and inexact exchange is described as. “making

whole”. The majority tells us that the Constitution “gives

us no authority to follow the figurative trails of metaphors

like this.” (14) We might not like the trail but it repre-

sents a process with .clear purposes, and once the design

is laid bare it surpasses credulity to deny our authority

to examine the relationship of technique to objective. |

My brothers would have us believe that. for purposes of

constitutional inquiry there is little difference between deny-

ing eligibility for assistance to one with substantial assets |

in hand derived from a tort claim, and recovering assistance

from a former welfare recipient who succeeds in receiving

compensation for injuries. In the first case, however, the

victim has the means of immediate subsistence—a test of -

eligibility ; if the recovery had been $500 instead of $500,000

he might still be eligible for aid. In the second, the at-

tachment of a meager recovery can effectively destroy the

_ means for future subsistence independence as well as re-

52

. move the financial comfort given as compensation for

physical pain. As a result, self-sufficiency may be jeopar-

dized, and return to relief hastened.

I have more regard than the majority for the conten-

tions made to us by the plaintiffs, supported by their ex-

perts, and ‘not refuted by Commissioners Ginsberg ‘and

Wyman. The plaintiffs suggest that ownership of a home

or insurance policy represents’ a symbol of independence

among the poor, that the protective assignments generate

resentment and frustrate social purposes of rehabilitation, _

and that the obligation to repay, with which we are con-

cerned, exerts a deterrent influence that is partly respon-

sible for the fact that one in two eligibles fails to apply

for public assistance. These assertions of the potential

detrimental effects of recovery are consistent with the -

experience and comments of welfare specialists, and the

arguments accord with common understanding.®

- _ °See generally, Cahn &-€ahn, The War on Poverty: A Civilian

- Perspective, 73 Yale L. J. 1317 (1964) ; tenBroek & Wilson, Pub-

' lie Assistance and Social Insurance—A Normative Approach, 1

U. C. L. A. L. Rev. 237 (1954) ; Reich, Individual Rights and So-

cial Welfare: The Emerging Legal Issues, 74 Yale L. J. 1245

(1965) ; Wickenden & Bell, Public Welfare—Time for’ A Change

(1961) ; Wickenden, Memorandum: Poverty -and the Law, The:

Constitutional Rights of Assistance Recipients, March 25, 1965;

Moynihan, The Crisis in Welfare, The Public Interest, p. 3 (Win- -

ter, 1968) ; Advisory .Council on Public Welfare, Report to the

Secretary of Health, Education and Welfare (June, 1966).

We might indicate additional potential dangers adverted to

‘by the expert witnesses. The provisions as constituted add another

influence that promotes family instability, since potential hus-

bands are discouraged from entering a family and risking an

action against their property. Although the purported justifica-

tion for the recovery obligation is one of economy, the net effect

may be to increase the burden on the state by preventing former

recipients from maintaining a position of self-support. The obliga-

tion to hand over tort recoveries to the state inhibits the recipient

from bringing claims under the law that are freely pursued by

non-recipients. Dr. Charles Grosser, a noted expert in Social Ser-

“

In sum, while I do not question the power of the State

through appropriate regulation to recover public assistance’

expenditures, I would declare the statutory scheme with |

‘which we are presented in violation of the Fourteenth:

Amendment. The proper objective of conserving resources

can be achieved by a more ‘discriminating pattern. It is

but a modest burden to impose if we require that the De-

partment’ of Social Services tailor its regulations, so that |

the guide is not the mere availability of some property but

a genuine ability to repay without sacrificing the basic.

incidents of self-support. Such a course of decision would

better serve our. responsibility to secure individual liberty

against purposeless restraint. At the same. time, it in no

"way compromises Justice Brandeis’ suggestion that- “one —

of thé happy incidents of the federal system [is] that a

single courageous State may, if its citizens choose, serve

as a laboratory; and:try novel social and economic experi-

ments without risk to the rest of the country. ” New State

Ice Co. v. Liebmann, 285 U. Ss. 262, 311- (1932) (dissenting).

Especially where the infirmity may be remedied without

new legislation, our mandate to demand more precision

from regulations. that constrain liberty will challenge the.

ingenuity and inventive spirit of the states while ‘ensuring

fuller freedom for all ‘the people.

| Dated ew York, New York

February 29, 1968

/s/ Irvine R. KaurmMan

United States Circuit Judge

vices, tells us that these provisions operate in efféct. to leave recip-

ients in continuous need of assistance, unable to get off the lists

for long, because they are unable to retain a measure of f eelf-sup-

port.

‘54

- “KPPENDIX D

Statutes Involved

Cons. Laws New York Ann, Social Services Law:

§104. Recovery from & person discovered to have

property .

1. A public welfare official may bring action ‘or pro- -

ceeding against a person discovered to have real or

personal property, or against the estate or the execu-

tors, administrators and successors. in interest of a

person who dies leaving rea] or personal property, if.

such person, or any one for whose support he is or was

liable, receiv ed assistance and care during the preced-

ing ten years, and shall be entitled to recover ‘up to -

the value of such property the cost of such assistance i |

or care. Any public assistance or care received by such

person shall constitute an implied contract. No claim

of a public welfare official against the estate of the

executors, administrators and successors in interest of

a person who dies leaving real or personal property,

shall be barred or defeated, in whole or in part, by

any lack of sufficiency of liability on the part of such

person during - the period assistance and care were

rec&¥ved.

Nor shall the: claim inietiodl by a public welfare

offi Gf against any person under this section be im- .

paired, impeded, barred or defeated, in whole or. in

part, on the grounds that another person or persons

may also have been liable to contribute. — .

-

55

: | ,

In all claims of the public welfare official made under

this section the public welfare official shall be deemed

a preferred creditor,

2. No right of action shall accrue ‘against an infant so

by reason of the assistance or care granted to him

unless at the time it was granted the infant was pos-

sessed of money and property in excess of his reason-

able requirements as described in section one hundred

one. . 1.1940, ¢. 619, $10; amended L. 1941, ¢. 82, §7;

L.1953, ¢. 838; 1.1961, ¢. 55; 1.1963, ¢. 509; arin

ce. 573, eff. April 16, 1964,

es §104a. ‘iena for public-assistance and care on claims

) and suits for personal injuries

1: -If a recipient of public assistance and care shall

have a right of action, suit, claim, counterclaim or de- -

mand against another on account of any personal ‘in-

juries suffered by such recipient, then the public wel-

fare official for the public welfare district: providing

such assistance and care shall have a lien for such |

amount as may be fixed by the public welfare official

not exceeding, however, the total amount of such

assistance and care furnished by such public welfare

official on and after the date when such 3 injuries were :

- ineurred.

The welfare commissioner shall endeavor lea ascer-

tain whether such person, firm or corporation alleged

to be responsible for such injuries is insured with a

liability insurance company, as the case may be, and

' the name thereof.

2. No such lien shall be effective, however, unless a

written notice containing the name and address of the

fe sh fet

(awed wecdpiont, the date amd place al the aeeident,

ait he mame vf (he perenne ar oorpobation alleged:

ty be diable fo the dae party for anole injiieies,

Lagether With a betet atatement of Che natiee of the

Vien, The amonnt elated and Chat a tien is elaimoed

Wp The maid Pah of aetion, anit, olaiin, eaniterelaine

ey chert Ww: ihe yrradatins Wwellate ufligial be aerved priate 7

mi) The pavinent af any toneye fo aneh TO party,

Wy Ayiatedod a apon aneh perran, MeN ar eOrpapa

Tan, and las ubecor Chea attorney, UP haewe, adel pon.

AY UWsUhanee aVEpier Whieh hae manied anol person,

firm ov corporahian againat rauely Tiability, A eapy af

the Notice af hen xhall be Matted fo aneh earrion al leonved

twenty days priar to the date on whieh rneli enrrior

makes a payment fo the ingared panty, Maxecept ae

against suvh carrier the effectiveness of “the linn

against any other party shall not be impaired by the

failure to mail the required Nofiee fo xueh earrier. Tn

addition, a trae eapy of such notice shall be served by.

regular mail to the welfare recipient and to his attor

ney, if known, Such mailjng shall be deemed: to he

offective, notwithstanding Any inaccuracy or omission,

if the information contained therein shall be sufficient

to enable those to whom the notice is given ‘to identify

the injured recipient and the occurrence upon Ww hie h

his claim for dams ges is based,

“3. Upon the service of the notice, as pfereanid, the.

local public welfare official shall file a true copy thereof

in the office of the clerk of the county in which his

office is located, and, thereupon the lien of the public

welfare official in the amount therein stated shall attach

to any verdict, decision, decree, judgment, award. or

va

———

57

final wonder in a any Nit, etion or proceeding. in any

court or vdlinipintiative trilamal-of thin. trie rempect-

ings niwh injurier, AR Well va the proeseds of any nettle. .

Ment thereat, and The proveada of any notiloment of

ANY claim or demand ronpootinyg miiehi meen prior to

anit or action,

4, An arnonubea nytier af lien may be werved and

filed by much publie w elfare offleial in the maine manner

and xubject to the Provinionw of thin aeetion Boverning:

the notiee of lien originally nerved and fled purnuant

to thin nection,

‘Sa Such lien may be enforead hy netion against those

alleged to be linble for sueh injuries, an aforesaid, by

the local publie- welfare. official in any court of appro-

priate jurixdiction, nh

6. The aforenaid: lien shall be valid and effective, -

when the notice thereof and the statement are served

and filed ax af oresaid, and shall continue until released:

and discharged by the local public welfare official by an .

instrument in writing and filed in ‘the said county

clerk's office, and no release, payment, discharge or

satisfaction of any such claim, deinand, right of action,

suit or counterclaim shall be valid or effective against

such hen, ;

7. The county clerk - shall, at the expense of the

county, provide a, suitable book with proper index, to

be called the publie welfare lien docket, in which he

‘shall enter the names of the public welfare official and

the recipient, the date and place of the accident and the’

name or names. of-those alleged to. bé liable for such | |

injuries, as aforesaid. -

‘

Clad i si LCT fi Se i he ihe i js itll nie AAR Satie an

&

58

8. The provisions of this section to the contrary not-

withstanding, the lien herein created shall be subject

and subordinate to the lien on the amount recovered by

verdict, report, decision, judgment, award or decree,

settlement or compromise, of any attorney or attor-

neys retained by any such injured person to prosecute

his claim for damages for personal injuries, having

or acquiring by virtue of such retainer a lien on the

cause of action of any such injured person, or on the

verdict, report, decision, judgment, decree made in, or

any settlement or compromise of, any such action or

claim for damages for personal injuries. .

9. The provisions of this section to the contrary

notwithstanding, the lien herein created shall be sub-

ordinate to the lien of any hospital claimed under and ;

to the extent recognized by section one hundred eighty- ‘

nine of the lien law, but only for treatment, care and ~

maintenance given, prior to or in excess of the public

assistance and care granted by the public welfare

official. a, !

10. The provisions of this section shall not be

deemed to adversely affect the right of a public welfare

official who has taken an assignment of the proceeds of

any such right of action, suit, claim, counterclaim or

demand, to recover under such assignment the total

amount of assistance-and care for which such assign-

ment was made.

11. The provisions of this section to the contrary

notwithstanding, the lien herein“created shall not apply

' with respect to any claim or benefits payable to the -

recipients of any form of public assistance or. care,

ae —

part of which is paid for by the government.of the

United States or any agency thereof when, in the

opinion of the commissioner, such lien would jeopardize

the continuation of such federal contribution.

12. ‘The provisions of this section to the contrary >

_ notwithstanding, the public welfare official may in his

discretion release.to the injured person an amount not

to exceed the cost of two years maintenance from the

_lien herein created.

This section shall not apply to any claim or award

which is or may be allowed pursuant to the provisions

of the workmen’s compensation law or the volunteer

firemen’s benefit law. Added L. 1964, «. 382; amended

L.1965, ¢. 271, eff: July 1, 1965.

ca

‘

$105. Ciaim on insurance

If a person, who has received public assistance or

care, shall die leaving insurance, and the estate of the

assured is named as beneficiary, or no beneficiary is

named, the pubUc welfare official shall be entitled to a

preferred claim to be paid out of such i insurance to the’

amount of the cost of such assistance and care, and

for funeral expenses not to exceed two hundred fifty

dollars. If the insured leaves ‘a widow or minor chil-

dren who are, or are liable to -become, public charges,

the public welfare official may, in his discretion, waive

his claim to such insurance or any part thereof to

which he would. otherwise be entitled. 1.1940, ¢. 619,

$10; amended L.1944, ¢. 688; L. 1958, ¢. 772, §1; eff.

July 1, 1958.

60

§360. -Real property of legally rosponsiblo relativos;

deeds and mortgages may bo required

1. The ownership of real property by an applicant

or applicants, recipient. or recipients, who ix or are

legally responsible relatives of the child, children,

minor or minors for whose benefit, the application. is

made or the aid is granted, whether sneh ownership

be individual or joint as donants in common, tenants by

the entirety. or joint tenants, shall not preclude ‘the

granting of aid to dependent children or the eontinu

ance thereof if he or they are without the necessary

funds to uuiintain himself or themselves and sueh

child, children, minor or minors. "Phe public welfare

otticial may, however, require, as a condition to the

xranting of aid or the continuanee thereof, that he be

given a deed of or a mortgage on such property in ae-

cordance with the provisions of seetion one hundred

SIX,

a)

or mortgage Is occupied, in whole or in part, by the

responsible relative who gave such deed or mortgage

to the public welfare oficial or, during his minority,

by a child or minor for whose benefit the aid was

granted the public welfare official shall not sell the

property or assign or enforce the mortgage without

the written consent of the department; and, when the

property is occupied by such child or minor, such con-

sent shall not be given unless it appears reasonably

certain that the sale or other disposition of the prop-

erty will not materially adversely affect the welfare of

such child or minor during his minority.

2. However, while the property-covered by the deed

ssa od ” OIL AOA RA Rh ROR Ca reel

m—~7

a

ps

61

8. The net amount recovered hy the public welfare

departinent from such property, less any expenditures

approved by the department for the burial of the rela-

tive, the child or minor who dies while in receipt of

aid-under this title, shall be used to repay the public

welfare dixtriet, the state and the federal government

their proportionate share of the cost of aid to depen-

dent children granted. The state and federal share

shall be paid by the public welfare district to the state

and the manner and amount of such payment shall be ~

determined in accordance with the regulations of the

departinent.

4d any balance remains it shall belong to the es-

tate of the legally responsible relative or relatives, and

the public welfare district shall forthwith « edit the

sane accordingly, and, provided they claim N within

‘four years thereafter, pay it to the persons entitled

thereto, If not so claimed within four years it shall be

deemed abandoned property and be paid to the state

comptroller pursuant to section thirteen hundred five

of the abandoned property law.

5. The proceeds or moneys due the United States

shall be paid or reported in such manner and at such

tinies as the federal security agency or other author-

ized federal agency may direct. Added L.1951, e. 722;

amended 1.1959, ¢. 803, §3, eff. April 24, 1959.

Ste oe

heaved) prietaied eae ens sities

an epee ence wt " bE

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62

Regulations of the New York State

Department of Social Services

Part 368

Aid to the Aged, Blind or Disabled .

— ‘ *. iP s *

368.2 Determination of initial eligibility.

(a) General principles.

Eligibility for AABD shall be determined for each appli-

eant in accordance with the policies and procedures gener-

ally applicable in public assistance. This, determination

_ shall include consideration of each of the following factors

of eligibility: financial need, residence within the State,

living arrangements, assignment and transfer of property,

ability of legally responsible relatives to contribute. The

determination shall also include documentation of the fac-

_tors of age, blindness or permanent and total disability

where presumptively applicable. Where there is emergent

need and a presumption of eligibility for assistance under

the combined. program, the preinvestigation grant proce-

dure shall be folowed. Where need is only for hospital

care for a person not already in receipt of AABD, financial

heed shall be determined in accordance with standards

applicable to hospital care only.

(b) Financial need. i

‘

(1) Financial need shall be determined in accordance with

the standards of assistance established by the agency as

required by rules of the board [Chapter I of this Title] and

‘ department regulations including the estimate of needs and

the exploration, verification and utilization. of resources.

Financial need may be temporary or of indeterminate dura-

tion, partial or total, and may exist for a single item of

assistance such as medical care only or for any needed com-

63

bination of items. Except for persons in higher education

and training (Social Welfare Law, $321, subd: 2, par. [a])-

when there are resources available to the applicant for as-

signment to the agency and when the public welfare official

has required such assignment, refusal by the applicant to

assign shall constitute Ineligibility for public assistance.

bad ——* . ;

EE: Part 369 ane

Aid to Dependent Children

. ™ bad e e e

369.2 Determination of initial eligibility.

[ Additional statutory authority: Social Welfare Law, §355]

Eligibility for ADC shall be determined for each applicant

in accordance with the policies and procedures generally

applicable in public assistance. This determination shall

include consideration of each of the following factors of

eligibility: financial need, age, welfare of child or minor,

residence within the State, living arrangements, relation-

ship of child to relative, and deprivation of parental sup-

port or care. Where there is emergent need and a presump-

tion of categorical. eligibility the preinvestigation grant

procedure shall be followed. ° :

(a) Financial need.

Financial reed shalt be determined in accordance with. ap-

proved: standards of assistance. A public welfare official

may in his discretion require the assignment of real prop-

erty or other resources of an applicant or recipient who is

a parent of the child or minor for whose benefit an ADC

grant. is made. Refusal by the applicant to assign shall

constitute — for public assistance.