Appendix — Rosado v. Wyman

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‘ Office-Supreme ‘Court, U,

wPREMe COURT. UB 8 = - _. FILED

SUN 17 1965

IN THE

Supreme Cour of the United Staff § DAS, cent

: - OCTOBER TERM, _—

i ; - as 1 5 3 3981540

- JuLIA Rosado, Ya: Hiernanpez, Masorm Mitey, Sopuia Aprom, RUBY |

ER Mae Kina, CATHRYN FoLg, Annie Lov °

ividually, on behalf of their minor chil:

dren, and on behalf of all other persons rly situated,

fis Petitioners-Appellants,

—vegainst— ie

as

Grorer K. Wrens individually and in his capacity as Comitissioner of Social

Services for the State of New York, and the Di DEPARTMENT OF ee SERVICES

FOR THE STATE or New. YORK,

—— se aera Respondents-Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

: EASTERN DISTRICT OF NEW YORK

*

_ APPENDIX TO PETITION FOR CERTIORARI, MOTION TO

EXPEDITE AND JURISDICTIONAL STATEMENT

Cant Ronin | ' Leg A. ALBERT

JAMEs SPITZER aa 7 * Center on Social Welfare

Davip DRASCHLER - We and Law ma

Scholarship, Education and 401 West 117 Street

Defense Fund, Inc. New York, New York 10027

164 Madison Avenue . 280-4112

- New York, New York 10016 Henry A, FREEDMAN

' SYLvia ANN Law .

Berr. NEUBORNE = Rosert P. Borsopy ©

_ New York Civil Liberties Union. - Of Counsel

156 Fifth Avenue | ; See :

New York, New York 10010. ‘Martin Garsus

: _ Roger Baldwin Foundation of the

: _ American Civil Liberties Union

‘“ “aoe ' 156 Fifth Avenue .

: “i New pests New York 10012 ;

>

. . 7.

Lat

INDEX TO APPENDIX

PAGE

‘APPENDIX:

A.

_ Stein, District Judge, dated April 23° 1969 Deny-

Memorandum and Order of —— Jack B. Wein-

ing Defendants’ Motion to Join HEW as a Nec- |

+ . essary Party Defendant ‘ave la.

> Memorandum anit thea of Hon. Jack B. Wein-

stein, District Judge, dated April 24, 1969 -Con-

_ vening a Three-Judge Court and Issuing a Tem-

porary Restraining Order . 4a

Memorandum and Order of Three-Judge District

Court dated May 12, 1969 Dissolving Itself ....’......... 10a

Opinion in Support of the issuance of a Prelimi-

nary Injunction of Hon. Jack B.. Weinstein, Dis-

trict Judge, dated May 15, 1969 .............. 1 14a

Order of Hon. Jack B. Weinstein, District Judge,

dated May 16, 1969 ; | 64a

Order of United States Court of Appeals for the

Second Circuit, of June 11, 1969 Staying the In-

junction siccindesiendeieai inebdesaienachieaimniaipeie 66a

APPENDICES

A

‘ | la °° *

APPENDIX A

Memorandum and Order of Hon. es. Weinstein,

District Judge, dated “April 23, 1969 Denying

Defendants’ Motion to Join HEW as a

Necessary Party Defendant

This i is a class action brought by ton recipients ‘of welfare

assistance under the Aid to Families With Dependent

Children Program (AFDC) to declare invalid and enjoin

the implementation of the recently:enacted amendment to —

New York’s Social Services Law which allegedly cuts sub-

stantially the level of welfare payments throughout the

state as of July 1, 1969. N. Y. Soe. Serv. §131-a added

by Laws Ch. 184, March 31, 1969. The defendants -have

moved pursuant to Rule 19 of the Federal Rules of Civil

Procedure to join the Department of Health, Education and

Welfare (H.E.W.).as a necessary and indispensable party.

For the reasons stated below, the motion is denied.

A necessary siti is defined by Rule 19(a) as:

A person ... (1) in [whose] : . . absence complete

relief cannot be accorded among those already parties, ~ -

or (2) [who] . .. claim[s] an interest relating to the

‘subject of the action and is so situated that the dis-

position of the action in his absence may (i) as a prac-

tical matter impair or impede his ability to protect

that interest or (ii). leave any of the persons already

parties subject to a substantial risk of incurring doubt,.

multiple, or otherwise inconsistent obligations by rea-

son of his claimed interest.

H.E.W. does not fall within clause (1) of Rule 19(a).

This Court would not “be obliged to grant partial or ‘hollow’

ence ee Silents geese aia tig CRP Tia inte aS ali Sani bh Eg 60 BA TED ctw 0 te EE ne ee -,

/

2a

rather than complete’ relief to the parties before” it.in the

-’ absence of H.E.W. Advisory Committee Notes to Rule 19.

Plaintiffs are seeking to invalidate section 13l-a so that

the present welfare law will remain in effect; they do not

seek to cut-off federal funds. Such a remedy is an appro-

priate one and can be granted in the absence of H.E.W.

See, e.g., King v. Smith, 392 U.S. 309 (1968); Westberry

v. Fisher, 37 U.S.L.Week 2573 (D. Me. 1969); Williams. v.

Danridge, —— F. Supp. —— (D. Md. 1969) ; cf. Note, Fed-

eral Judicial Review of State Welfare Practices, 67 Colum. |

L. Rev. 84, 117 (1967). H.ELW. has not been a party in

the recent challenges to-staté welfare laws. See, e.g., Sha-

piro v. Thompson, —— U.S. ——, 37 U.S.L.Week 4333

(1969) ; King v. Smith, 392 U.S. 309 (1968); Westberry v.

Fisher, 37 U.S.L.Week 2573 (D..Mé. 1969); Williams v.

Danridge, —— F. Supp. —— (D. Md. 1969). Although a

state has the option of withdrawing from the AFDC pro-

gram, it cannot be said t6 have exercised the option by

the passage of a statute inconsistent with federal law in

the absence of an express statement of withdrawal by the

state legislature. See, e.g., King v. Smith, 392 U.S. 309

(1968). '

To require plaintiffs to proceed against H.E.W. would

put them in the untenable position of being forced to seek

a cut-off of all welfare payments in order to challenge a

law on the ground that it provides for inadequate payments.

Such a rule would only serve to insulate -state welfare

laws from judicial review by deterring potential —

from challenging them in the courts.

H.E.W. does not fall within clause (2) of Rule 19(a).

While it does have an arguable interest in the subject

* matter of this litigation since it is required to review each

state plan to determine whether the _ complies with

fou - se sii eae ere Snatch

3a

federal standards, H.E.W.’s absence wiil not, “as a prac-.

tical matter,” impair its ability to protect that interest or

expose any of the existing parties to double or inconsistent

liability...

H.E.W. has strenuously opposed the motion to join it

as a party. Its interests can be adequately protected, and

its position made known to the Court, by the filing of an

amicus brief. See Lampton v. Bonin, Civ. No. 68-2092, See. ~

E (E.D. La., complaint filed November 14, 1968) (H.E.W.

requested to file amicus brief); Jefferson v. Hackney,

CA-3012-B (N.D. Tex., complaint filed February 12, 1969)

(same). Any negotiations H.E.W. is currently conducting

with New York State can continue while this action is

progressing. :

. Defendants’ motion to join H.E.W. as a necessary and 7

indispensable party is denied. |

: | aA ;

So ordered. |

Dated: Brooklyn, New York

April 23, 1969

Jack B. WEINsrTEIn .

U.S.D.J. '

de

APPENDIX B

Memorandum and Order of Hon. Jack B. Weinstein,

District Judge,.dated April 24, 1969 Convening a

. Three-Judge Court and Issuing a Temporary

| Restraining Order

This is a ” ae pare to‘ declare invalid section 131-a

of the New/York Social Services Law, effective July 1st

of this year, fixing maximum benefits for certain classes of

- welfare recipients in the state. Plaintiffs, residents of

Nassau County and the City of New York who are pres-

ently receiving welfare benefits which will be substantially

reduced under the new law, have moved for a temporary

restraining order. Defendants have moved for the can- ©

vening of a three-judge court. For the reasons stated

below, both motions are granted. |

Plaintiffs allege that the New York statute violates the

Equal Protection Clause of the Fourteenth Amendment

of the United States Constitution and the Social Security

Act of 1935, as amended, and the regulations of the United

States Department of Health, Education and Welfare, con-

ditioning receipt of federal aid and its use by the states

in their welfare programs. In brief, it is the contention

of plaintiffs that federal law requires New York State,

if it is to participate in the federal welfare reimbursement

program, to take into account increases in the cost of living

in computing new benefit levels; that the new state statute

violates federal standards by arbitrarily decreasing the

sums permitted to be paid to welfare recipients and by

arbitrarily discriminating against Nassau County residents

in reducing their payments substantially below those avail-

able ‘to New York City residents without any basis in cost-

‘ eee

5a

of-living differentials ; and that the new state law, if it

becomes operative, will cause severe and irreparable sais

to plaintiffs and their infant charges.

’ At this preliminary stage of the litigation it is important

to note that plaintiffs are not contending that federal law

or regulations require the states to provide any welfare

_benefits. The power of the legislature to determine how

the state’s resources should be allocated through the levy-

ing of taxes and the appropriations of state monies is-not |

being: challenged. Rather, it. is plaintiffs’ position that’

when a state chooses ‘to participate in the federal welfare

program and receives federal appropriations, it must com-

ply with valid federal conditions. | |

_ We first address ourselves to the question of a three-

judge court. The way the issues have been framed by the

parties, they can he broken down into two questions: first,

whether a three-judge court is required to hear plaintiffs’

equal protection*claim and, second, if a three-judge court

would be required, whether it should be convened now or

whether a single judge- should first decide the ne

cost-of-living claim.

A three-judge court is necessary to heap plaintiffs’ equal

protection argument. It is clear that it raises a substantial

federal question. The Supreme. Court’s opinion in Shapiro

v. Thompson, —— U.S. , 37.U.S.L.W. 4333 (1969), de-

. cided this past Monday, establishes that the Equal Protec-

tion Clause has wide application in the welfare area and

suggests that the purpose of conserving funds may not, in

and of itself, support grossly dissimilar treatment between

similarly situated individuals.

Plaintiffs allege that the classification of New y York City

residents separate and apart from non-City residents—

particularly those in Nassau County—is ‘an invidious dis-

a ene . pts fd

5 Se ee ee ee

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6a

crimination. It is contended that the distinction is not

based on need since the cost-of-living for welfare recipients

in Nassau ‘County is equal to, or higher than, that in New ©

York City. Under the present law Nassau County~ is

grouped with New York City in determining the schedule

of payments. Under the proposed law it is grouped with

counties outside the City; as a result, welfare payments

will be substantially lower than those for New York City

residents. The differences are, it is argued, so far out-

of-line with cost-of-living differences between the City and

County as to constitute an irrational, invidious and uncon-

stitutional discrimination. We cannot, on the record before

us, say that this claim is frivolous.

The two arguments that plaintiffs present against con-

vening a three-judge court on this issue are not persuasive.

The fact that they are seeking a declaratory judgment

rather than injunctive relief, in the circumstances of this

case, is merely a semantical, not a practical, difference. A

declaratory judgment would have an effeet identical to an

injunction. In their complaint plaintiffs ask for “such

other relief” as is appropriate and ‘the Court will have the

power to grant an injunction. That one may be required

is suggested by the fact that plaintiffs are now secking a

temporary restraining order.

The contention of plaintiffs that, so far as Nassau resi-

‘dents ‘are concerned, a statewide statute is not. under at-

tack, is without merit. Challenged is the state’s entire plan

for setting levels of welfare payments. Plaintiffs’ attack,

-if fully successful, may have an effect on welfare recipients

in every county in the state.

_ The second question is whether this Court should refrain

from convening a three-judge court until it decides the

a

7a

statutory cost-of-living issue. Plaintiffs’ argument that

_ this is a separate and independent claim and that the statu-

tory issue should be decided first, in an attempt to avoid

reaching the constitutional issue, is normally persuasive.

In this case, however, all parties agree that time is of the

essence. Were the Court to decide the statutory claim first

— and decide it against plaintiffs, a three-judge court would

then need to be convened. The delay a ' costly to

all concerned.

A three-judge court appears to be the appropriate vehicle

for speedily resolving all the issues in this case so that

uncertainty may be eliminated as soon as possible. A direct

appeal to the Supreme Court would lie from a three-judge

determination. That Court can move quite expeditiously

_ in matters of this sort, particularly with regard to a stay.

Should it subsequently be determined that a three-judge

court was not required, the single judge’s decision, as part

of that three-judge court, would become the opinion of

the Court. :

We turn now to the pene of whether a temporary :

~ restraining order should be granted anieetad - convening

of a three-judge court. :

Extensive briefing, argument, affidavits of the individual

plaintiffs, and experts’ testimony in Court requires a find-

ing at this preliminary stage of the litigation that plaintiffs

have a substantial probability of establishing the validity

of their claims and the right to the remedies they seek,

both provisionally’ and permanently. These findings, it

should be emphasized, are not findings on the merits of

the action.

Both sides have indicated that prejudice will result

should section 13l-a be declared invalid after administra- ©

SEER Ee

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nae me eee

~~~ «tive action has been taken which would. prevent the state

from keeping the present system in effect on July 1st.

Plaintiffs’ testimony supports a. provisional finding that

the new statute will cause welfare recipients to lose funds

required to keep them at the level of bare subsistence. The |

state’s witness testified that, on the one hand, many recipi-

ents will receive higher payments under the new system

and, ‘should the state commence payments under section

-131-a, the state will not be able to obtain reimbursement

if the section is struck down. On the other hand, he stated,

it will reimburse ee whose payments were illegally re-

duced.

The sums involved are large. It is estimated that pay-

ments under the new system will—be approximately

$10,000,000. a month less than under the old. And in some

cases reductions to welfare recipients run in the order

of 20%. Thus, both the state and many welfare recipients

may be irreparably harmed if payments made under the

new statute are ultimately determined to be illegal.

Witnesses for both sides indicated, that it would take

between six to eight weeks to change from one system to

the other. The state’s testimony indicated that it was

possible to prepare for the new system under section

~131-a while being able to remain in a position to continue

the present system should that be required. This could be ~-

done, state experts believe, by presérving the present elec-

tronic data processing tapes (or by making: a copy of

them), while making new tapes in planning for the new

system. Since the plaintiffs’ witness indicated that the

City intends to proceed by modifying the present tapes,

it is important that the state take steps for their dipuabi a-

tion.

ACRES PR LATE aR a lA GRE NTE PODS Bi ci INDIE 0 0204 8S Gn mst REET deh ane ee Sat

9a

Accordingly, the Court is signing and filing a temporary

restraining order today and is writing to the Chief<d udge

of this Circuit notifying him of this determination that_a

‘hree-judge court ought to be convened pursuant to sec-

tion 2284 of title 28 of the United States Code. The Court

is striking from the plaintiffs’ proposed order references

to announcements to welfare recipients. The Court can

rely upon the good sense of all welfare officials to try to

minimize .the anxiety of welfare clients.

The twenty day period to answer expires on April 29,

1969. Because of the necessity for speed, this time will

not be extended. Defendants and plaintiffs are advised to

have their papers seeking summary judgment and all other

relief served and filed on April 29, 1969. The parties are

granted until May 2, 1969 to submit reply papers and

briefs. All undecided motions will be referred to the three-

judge court. -

‘So ordered. ©

Dated: Brooklyn, New York

| April 24, 1969

¢

Jack B. WEINSTEIN

U.S.D.J.

APPENDIX C

Memorandum and Order of: Three-Judge District Court -

dated May 12, 1969, Dissolving Itself

Per Curiam °.

A three-judge court was properly eanvened in this case

when plaintiffs challenged the constitutionality of section

131-a of the New York Social Services Law. Chapter 184

of. the Laws of 1969, adopted March 31, 1969, effective

July 1, 1969. It is contended by plaintiffs that the provi-

sion constitutes an irrational and invidious discrimination

against residents of Nassau County because the schedules

_ of payments under. the Aid to Dependent Children pro-

visions were some 15% less for Nassau County residents

than for residents of the City of New York even though

the cost of living for those families receiving aid to de-

pendent children was not lower in Nassau County than in

New York City.

_ Following designation of iteanhors of the three-judge |

court by the Chief Judge of this Circuit, all parties filed

motions for summary judgment with supporting affidavits

-on April 30, 1969. On the same day that motions for sum-

mary judgment were submitted, a bill'to repeal subdivision

4 of section 131-a of the New York Social Services Law

and to provide a new subdivision 4 was introduced i in the

Legislature. )

Subdivision 4 of section 131- a, as originally adopted,

provided for a method of reduction. of monthly grants and

allowances in areas outside’ the City of New York but not ©

- for their increase. The new subdivision 4 provides that

See Oa le Beg. Si eb eo ke SS Nee aa oe iat a

lla

the Commissioner of Social Services of. the State of New

York may promulgate schedules of monthly grants and

allowances .in individual districts “for greater or lesser

amounts” than those established under section 131-a to re-_

flect costs of living “but not to exceed the maximums pre-

scribed” for residents of the City of New York. In addition,

the new subdivision 4 also permits local social services

officials, “with the approval of the appropriate local legis-

lative body,” to “make application to the department” of

Social Services “for the promulgation of a schedule pur-

suant” to this new subdivision. The new ‘subdivision reads |

as follows: : .

4. Provided it accords with federal requirements, the —

regulations of the department shall provide that the

commissioner, with respect to any social services dis-

trict to which subdivision three applies, may promul-

gate a schedule of monthly grants and allowances for |

greater or lesser amounts than established by the regu-

lations of. the department applicable to such district,

= but not to exceed the maximums prescribed by sub- .

division two, for all items of need exclusive of shelter

and fuel for heating, if it is established that in such

district the total cost of the items included in :the

schedule applicable to such district actually is more

or less, as the case may be, than the cost thereof re-

flected in such schedule. A social services official may, .

with.the approval of the appropriate local legislative |

- body, make application to the department for the pro-

eee: ofa ‘schedule pursuant to this. subdivision.

This bill was sidapeea on May 2, 1969 by the Legislature

after a message of necessity “— the Governot eliminated eats

@

the need for following legislative procedures which might ./*>,

delay its passage. See New York State Constitution, Art, 3 ~’

_§14. The Governor signed the bill on- May 9, 1969 and,

according to its terms, it takes effect on July 1, 1969, as

did the original subdivision 4.

Pursuant to this new subdivision 4, the Commissioner

of Social Services of the State of New York may—either

on his own motion or after an application by a local Social

Services ‘Officer with the consent of the local legislative

- body or upon the petition of an aggrieved party, pursuant

to Article 78 of the New Yerk Civil Practice Law and

Rules—provide schedules for monthly payments in all parts

of the state which reflect differences in cost of living.

Under the circumstances it is apparent that the consti-

tutional issue posed is .no longer justiciable. The constitu-

tional attack on the provision as originally adopted has

heen rendered moot and any attack on the newly adopted

~ subdivision would ‘not be ripe’ for adjudication by this

Court: until there has been an opportunity for action by |

- state officials and until the matter comes before: this Court

in an appropriate proceeding. We need. not consider the |

now academic question of whether the three-judge court

might, in the exercise of its pendent jurisdiction, have de-

cided the alleged statutory issue either before it considered |

the alleged constitutional issue or after it decided the ae

constitutional issue against the plaintiffs. Cf. King v. |

Smith, 392 U.S. 309, 312, n. 3 (1968). Under the circum-

-. stances of this case there i is no reason for continuing the

- three-judge court. |

It is ordered that the three-judge court. heretofore con-

vened be and is dissolved-and that the matter be and is’

remanded to the single judge to whom the complaint was

«

‘

188

originally presented for such further proceedings as are, _

appropriate. See Peterson v. Clark, 285 F. Supp. 698, 700

(N.D. Calif. 1968}; cf. International Ladies’ G. W. B+

Donnelly. Garment Co., 304 U.S. 2438 (1938).

So ordered.

Dated: Brooklyn, New York

7 12, 1969

/s/ LEOWARD P. Moors 5 ae '

Leonard P. Moore, Judge, -

United States Court of Appeals

. . /s/ JacoB Misuse Co a

( e ~ Jacob Mishler, Judge,

United States District Court,

Eastern District of New York.

/s/ Jack B. WEtNstEIn !

Jack B. Weinstein, Judge,

, United States District Court, °

_. « Eastern District of New York

. ‘

14a _

APPENDIX. D

Opinion in Support of the Issuance of a Preliminary

Injunction of Hon. Jack B. Weinstein, District

Judge, Dated May 15, 1969

Plaintiffs allege that section 131-a of the New York Social

Services Law, effective July 1st of this year (ch. 184, L.

1969) is void because it conflicts with section 402(a) (23)

of the Social Security Act of 1935, as amended in 1968,

providing Federal Aid to Families with Dependent Chil-

dren (AFDC). See 42 U.S.C. $§ 601, 602; 45 C.F-R. § 233.20

(a) (2) (i); 34 Fed. Reg. 1394 (1966). Their contention ‘is

that section 402(a)(23) requires New York State, if it is

to participate in. the relevant: federal welfare reimburse-

ment program, to take into account increases in the cost

of living in computing new benefit lev els; that the new

State statute violates federal standards ‘by decreasing ‘the

sums to be paid to many welfare recipients and that the

new state law, if -it becomes operative, will cause severe

_ and irreparable harm to plaintiffs and their infant charges.

Both plaintiffs and defendants have moved for summary

judgment. In addition, plaintiffs have moved for a pre-

liminary injunction to. enjoin the defendants from in-

stituting changes pursuant to section 131-a until this litiga-

tion can be decided on’ the merits.

The test for granting summary judgment is whether there

exists “any ‘genuine issue as to any material fact.’

F. R. Civ. P. 56(c); see, F. R. Civ. P. 56(e).” Waldron

v. Cities Service Co.,861 F. 2d 671, 672 (2d Cir. 1966), aff'd

sub nam. First National Bank of Arizona v. Cities Service

Co., 391 U.S. 253 (1968). The test for granting a pre-

liminary injunction is whether plaintiffs have made “a

Sinem atheetie': GB

a

15a

clear showing of probable success and probable irreparable

injury.” Clairol Incorporated v. Gillette Company, 389 F.

2d 264, 265 (2d Cir. 1968). See F. R. Civ. P. 65.

For the reasons stated below, it is clear that plaintiffs

have a substantial claim with a high likelihood of prevail-

_ ing on the merits and that they will probably suffer irrepar-

- able damage unless a preliminary injunction is granted.

Accordingly, such an injunction will issue.

There are still a number of unresolved questions of fact;

the statistical and other data underlying this dispute ane

not yet been developed with clarity sufficient to warrant

granting summary judgment: Pursuant to Rule 56(f) of

the Rules of Civil Procedure this Court orders “a continu- ’

“ance to permit affidavits to be obtained or depositions to :

be had” or testimony and exhibits to be presented.

Because of the importance of this matter we assume that

defendants will wish to take an immediate interlocutory |

appeal pursuant to section 1292(a)(1) of title 28 of the

United States Code from the order granting the preliminary

injunction. In order to render as much assistance as

possible to the Court of Appeals and to the parties, should

an appeal be taken, we have set out below the posture of

the case in more detail than is ordinarily warranted in

disposing of preliminary applications. It should be em-

phasized that the conclusions are tentative only, are made

‘only for the purpose of deciding the motions before us,

and do not determine the merits of the case.

oe

eee

I. JURISDICTION .

Plaintiff's complaint challenges section’ 131-a on two

main grounds: first, denial of.equal protection of the laws

-because residents of Nassau County are discriminated °

against by payment schedules substantially below those for

the City of New York; and, second, conflict with a federal

.

PPE Oe Pee? entry ee -_ —— anus

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16a

statute. A three-judge court was required to be convened -

because plaintiffs’ equal protection claim raised a: sub-

stantial federal constitutional question with respect to

the applicability of a state-wide statute. 28 U.S.C. § 2281.

See, e.g., King v. Smith, 392 U.S. 309, 312, n. 3 (1968);

Florida Lime and Avocado Growers, Inc. v. Jacobsen, 362

U.S. 73 (1960) ; Kramer vy. Union Free School Dist. No. 15, .

379 F. 2d 491 (2d Cir. 1967). See also Shapiro v. Thomp-

son, —— sha S. —— (1969); Westberry v. Fisher, —— F.

Supp. » 37 U.S.L.W. 2573 (D. Me. 1969); Williams v.

Dandridge, citar Pe Supp. —— (D. Md. 1969); Lampton

v. Bonin, —— F. Supp. (i.D. La. 1969).

After the three-judge court was convened the legisla-

ture adopted an amendment to section 13l-a which ren-

dered the equal protection claim moot. Accordingly, the

Court dissolved itself and remanded the case “to the single

judge to whom the complaint was originally presented for

such further proceedings as are appropriate.” Rosado v:

| 1.D.N.Y. 1969).

At the outset we must confront the question of our juris-

. diction to. decide the federal statutory claim. Cf. King v.

Smith, 392 U.S. 309, 312, n. 3 (1968). There are a number

of independent bases for concluding that jurisdiction exists. |

A: Pendent Jurisdiction

Once its. jurisdiction has been properly invoked, a fed-

eral district court acquires pendent jurisdiction to de-

_ eide all related claims, including those involving federal

and state statutory questions, arising out of the same trans-

action or dispute. See, e.g., United Mine Workers v.

Gibbs, 383 U:S7715 (1966) ; Hurn v. Oursler, 289 U.S. 238

(1933) ; Gulickson v. Forest, 290 F. Supp. 457, 464 (E.D.

N.Y. 1968). The district court has power to decide the .

pendent claim even if it does not reach the issue which pro-

vided the basis for the court’s jurisdiction or even if it first

17a

decides the jurisdiction-founding issue against the plain-

tiffs. See, e.g., King v. Smith, 392 U.S. 309 (1968) ; United

Mine Workers v. Gibbs, 383 U.S. 715 (1966) ; Siler v. Lows-

ville € Nashville R. Co., 213 U.S. 175 (1909) ; Gulickson vy.

Forest, 290 F. Supp. 457, 464 (E.D.N.Y. 1968). |

In the present case, it is clear that at the time the

three-judge court was convened jurisdiction existed pur-

suant to section 1343(3) of title 28 and sections 1983 and

1988 of. title 28 of the United States Code. These provi-

sions grant original jurisdiction to the federal district

courts, without respect to the amount in controversy, over

cases where it is claimed that a right under the United

States Constitution is being violated. The three-judge

court, in its per curiam opinion, noted that it. had been

- “properly convened” (Rosado v. Wyman, F. Supp.

»— (E.D.N.Y. 1969) ), thereby impliedly ruling that a

substantial federal question had been raised. See, e.g.,

; Swift & Co. v. Wickham, 382 U.S. 111, 115 (4965) (“no such

court [three-judge court] is called for when the alleged con-

stitutional claim is insubstantial”); Kramer v. Union Free

School Dist. No. 15, 379 F. 2d 491 (2d Cir. 1967). There

is no doubt that under the liberal test recently enunciated

‘by the Supreme Court in United: Mine Workers y. Gibbs,

383 .U.S. 715 (1966), the cause of action based on the

Social Security Act would be considered pendent to the

equal protection claim.

- « The question posed is whether this Court has been

- divested of pendent jurisdiction because the federal con-

stitutional-claim was rendered moot after the three-judge

court convened and heard argument on motions by all par-

_ties for summary judgment. This question must be an-

swered in the negative.

Once pendent jurisdiction attaches, a federal court has

the power to decide the entire case. Where the claim which

I ECL PTE OR

Fo Rae iD RM}

Ss

\

18a

t

provided the basis. for its jurisdiction has been disposed

of. prior to trial, however, courts have in the exercise of

discretion, tended to voluntarily abstain from deciding

pendent questions. See United Mine Workers vy. Gibbs, 383

U.S. 715, 726 (1966) (Certainly, if the federal claims aré

dismissed before trial, even though not insubstantial in a

jurisdictional sense, the state claims should be dismissed

as. well”); Wham-O Mfg. Co. v. Paradise Mfg. Co., 327 F.

2d 748, 752-54 (9th Cir. 1964); Strachman v. Palmer, 177

F. 2d 427, 431 (1st Cir. 1949) (concurring opinion) ; Note,

~ The Evolution and Scope of the Doctrine of Pendent Juris-

diction in the Federal Courts, 62: Colum. L. Rev. 1018, 1025

(1967) ; cf. Clairol Incorporated vy. Gillette Company, 389.

F. 2d 264, 267-268 (2d Cir. 1969) (jurisdiction over unfair

competition claim despite concession of lack of valid trade-

mark registration); Rogers v. Valentine, 37 F.R.D. 231

(S.D.N.Y. 1964) (after summary judgment granted on fed-

eral claim, jurisdiction retained over pendent non-federal ©

claim).

The rationale for this doctrine of restraint in the exer-

cise of pendent jurisdiction is that a federal court should

seek to avoid “[nJeedless decisions of state law’:

Needless decisions of state law should be avoided both

as a matter of comity and to promote justice between

the parties, by procuring for them a surer-footed read-

ing of applicable law. United Mine Workers v. Gibbs,

363 U.S. 715, 726 (1966).

See also Wham-O-Mfg. Co. v. Paradise Mfg. Co., 327 F. 2d

748, 753 (9th Cir. 1964); Strachman v. Palmer, 177 F. 2d

. 427, 431, 433 (1st Cir. 1949) (concurring opinion). Accord-

~ingly, applying what has been referred to as “the intro-

duction of evidence test,” some federal courts “hold that

when a federal claim is dismissed on the pleadings, the

19a

court should not retain a related nonfederal elaina absent

an independent basis for federal jurisdiction.” Note, The. |

Evolution and Scope of the Doctrine of Pendent Juris-

diction in the Federal Courts, 62 Colum. L. Rev. 1018, 1025

(1962) (emphasis in original).

_ Application of this rule would be slay inappropriate,

wasteful of judicial energy and dangerous te the litigants in

a case such as the one before us. The pendent claim does

not involve-state law alone, but poses crucial and important

questions of federal statutory law. It vitally affects a na-

tional program designed to protect the fundamental rights.

-of children to the sustenance and stable family life which

will enable them to develop into full members of our society

capable of exercising their rights and responsibilities under

the United States Constitution and it involves the expendi-

ture of billions of dollars of federal monies. The courts in

the federal system are in at least as good_a position as

state courts to adjudicate this question of federal law. Nor

ean this be described as a petty or unimportant contro-

versy of the kind Congress sought to exclude from the

federal courts.

We do not mean to suggest that the New York State

courts would be more. likely to fall into error or to show

hostility toward federal law than would a federal court.

We are only now deciding whether it is appropriate for a

federal eourt to divest itself of jurisdiction of a pénding

case. |

Factors to be taken into account in deciding this ques-

tion include “judicial economy, convenience, and fairness

to litigants.” ” United Mine Workers v. Gibbs, 383.U.8, 715,

726 (1966). These criteria provide justification for the

doctrine of pendent jurisdiction generally; they compel

retention of jurisdiction in the instant case. oe

)

COAT CRE TO ROLY wre ate,

.

MURR ae, yt

By

RSI RENE Ree grenniNriep seus oi,

20a

A speedy determination of this litigation is highly de-

sirable. From the point of view of the plaintiffs, an un-

necessary reduction of their benefits may reduce their in-

come below subsistence level, causing grievous harm. From

the state’s vantage point, an unnecessary extension of any

temporary. restraining order preventing institution of the

new reduced benefits would, according to the testimony of

a Deputy Commissioner in the State Department of Social

Services, result in a loss to the state of up to ten million

dollars a month. Dismissal, under the abstention doctrine,

would require plaintiffs to commence a new-suit in the

state courts. Resulting loss of time would make it impos-

sible to decide the issues before administrative arrange-

ments must be made to implement the new state statute

by its effective date—July 1, 1969. .

Furthermore, the parties have already presented sub-

stantial testimony, affidavits and briefs to the Court. The

expenditure of time by the litigants and the Court would

be, to a large extent, wasted were all these materials to

be offered anew in a state court.

Having found that pendent jurisdiction exists, we need

- not reach the question whether administrative remedies

must be exhausted in a suit challenging a state AFDC pro-

- vision solely on statutory grounds. See King v. Smith, 392

U.S. 309, 312 n. 4 (1968) ; Rosado v. Wyman, —— F. Supp.

(E.D.N.Y. 1969) (HEW not necessary party) ; cf. Note,

Federal Judicial Review of State Welfare Practices, 67

Colum. L. Rev. 84, 91-92 (1967 ) (inadequacy of federal .

administrative forum).

B. Federal Question Jurisdiction

Jurisdiction also rests on section 1331 of title 28 of the

United States Code. This section grants the district courts

jurisdiction over. all civil actions arising under “the Con-

2la

stitution, laws, or treaties of the United States” provided

that “the matter in controversy exceeds the sum or value

~ of $10,000.”

There is no doubt.that the first requirement is met s since

plaintiffs allege that the challenged state statute violates -

section 402(a) (23) of the Social Security Act. Defendants —~

contend, however, that the ear inkiaee | does not involve

-more than $10,000...

The test for determining the amount in controversy

relies heavily upon plaintiffs’ good faith and the certifica-

tion of lawyers pursuant to Rule 11 of the Federal Rules

of Civil Procedure that there is “ground to support” the -

pleadings. It has been described 7, the Supreme Court

as follows:

The rule governing.dismissal for want of jurisdiction

in cases brought in federal court is that, unless the -

law gives-a different rule, the sum claimed by the

plaintiff controls if the claim is apparently made in ©

good faith. It must appear to.a legal certainty that

the claim is. really for less than the jurisdictional

amount to justify dismissal. St. Paul Mercury In-

demnity Co. v. Red Cab Co., 303 U.S. 288, 288 (1938).

See also Horten v. Liberty Mutual Ins. Co., 367 U.S. 348, “”

393 (1960). Where, as here, the plaintiffs in apparent good

faith allege that more than $10,000 is in controversy, courts -

are most reluctant to sustain a challenge to jurisdiction.

See Wright, Federal Courts 94-95 (1963).

In determining whether this test has been satisfied ‘in

a class action of this kind, the claims of the individual

plaintiffs or individual members, of the class may. not be

aggregated. Snydgr v. Harris, U.S: , 37 U.S.L.W.

4262 (1969). Cohpare 1 Moore, Federal Practice { 0.91[1]

at p. 827 (2f/ed. 1964) wath Wright, Federal Courts 100

22a

(1963). Nevertheless, for purposes of jurisdiction in this

case, each family may be considered as a unit an@the claims

of each member of a Single AFDC family can.be combined

because the federal statutory program relied upon by plain-

' tiffs is designed to protect the family as a. unit.

If we only look to the impending reductions in welfare

payments that any: family in the class may suffer, the

monetary loss to each of the plaintiffs does not approach

$10,000. Yearly welfare payments may not be multiplied

~ by a number of years in the future to make up the $10,000

requirement because it is too speculative to assume that

any particular plaintiff will remain on welfare (or that .

' the program will remain unchanged. |

While the direct damage to each member of the class. does

not suffice, the indirect damage to each plaintiff and his

charges may be very high. There is before this Court

uncontradicted evidence, by testimony and affidavits, that

members of the class are at or below a bare subsistence ©

level. Under such circumstances, a reduction in welfare

benefits putting their income substantially’ below that.

. threshold may threaten injuries to their children’s physical

and mental development far greater than the mere mone-

tary loss in benefits. Cf. Brown v. Board of Education,

347 U.S. 483, 494 (1954) (psychological. damage resulting

from improper schooling). Deprivations during garly years

may irreversibly retard mental and physical development

and have an adverse impact on personality.

Without intimating that the position of: these plaintiffs

is at all comparable, the possibility of a serious injury

resulting from a comparatively minor deprivation may be

more clearly seen if we look at the situation of a Biafran

child. A few cents a day is enough to prevent starvation

or permanent maiming of such a child; several dollars a

year might mean the difference between a healthy life and

\ — stasis A ne didnt a Me ae

23a

a stunted life or death. Certainly, to such a child, the ques-

tion whether $10 in foodstuffs should be granted or with-

held over a period of a year inv olves the monetary vem

of a human life. ;

We need not go outside the record in this case to con-

sider general literature and Congressional hearings on the

_ grave and permanent harm, particularly to the children in-

volved, that might result from a reduction in welfare pay-

ments. Typical of the material before this cant are some

of the affidavits quoted below.

A Professor of Pediatrics and ‘Attending Pivuclon ina

ghetto hospital with “a great many patients who are. re- j

cipients” of public assistance swears that many of them . :

“have marginal nutritional status;” that “a decrease in

the amount of assistance which these individuals receive

for the purchase of food would create a deficiency in their

diets and could lead to clinical. malnutrition ;” that “mal-

_. nutrition tends to retard the physical and mental growth”

of children and “may greatly diminish the ability of the

individual to learn;” that this deficiency “will remain with

~e the individual for life;” that children born of “under-

tieurished mothers” have a substantially increased tendency |

to premature birth’ with “greater incidence of infant mor-_

tality ang an increased likelihood of mental and neuro-

‘logical damage ;” and that elimination of special diets and

other assistance by reductions such as those proposed by

the statute in question will cause damage “td individual

recipients . . . so great as to be incalculable.” |

A Senior Social Worker at a Medical Center swears that

“at existing welfare levels most’ welfare recipients live

in a state of constant anxiety, depression, frustration, and .

_ physical suffering due to. the inadequacy of their welfare

grants” and as a result of the proposed reductions the

“suffering which will result ... will cause irreparable, and

" incalculable, harm.”

“-.

24a

’ A. Certified Social . _Worker with 28 years experience,

employed by the Community Service Society of New York,

Ine., swears that as a result of the reductions, “Serious

unattended health problems will muliiply and proliferate,

chitdren’s ability to achieve in school will be even further

depleted, diets will beat a starvation level as families try

to stretch their grossly inadequate budgets to meet their

_ most-basic needs ... . ;” and that “Family life, already

strained, will be . . ..severely jeopardized.”

- The Chief of Budget Standard Service of the Community

Council of Greater "New York swears that “deprivation

[from the new proposed standard] will result in incal-

culable hardship and misery to the “already severely de-

prived families in our community,”

A Dean of a School of Social Work swears that the pro-

posed reduction will cause “great harm to. the physical,

mental, emotional and moral health of these families.”

A Pyofessor at a medical college and Director of a Neigh-

~ borh gd Health Center swears that “any diminution in

inconge [of the families involved in this litigation] will

worsen an already intolerable situation, resulting in ir-

reparable damage.” .

A Retired Medical Director of the United States Public

Health Service serving as Deputy Director of Obstetrics.

and Gynecology at a ghetto. hospital and Professor at a

college of medicine swears. that “the possible harm afflicted

upon pregnant mothers and newborn children is incaleu-

lable.”

In view of the relatively trivial injuries which result in

recovery of more than $10,000 in this Court, it cannot be

said that under no view of the facts is the amount in

controversy less than $10,000 as to any member of the class.

We do not, of course, in considering this jurisdictional

25a

matter, pass upon, or express any view with respect: to,

the accuracy of the affidavits quoted.

C. Jurisdiction Under 28 U.S.C. § 1343(3)

Plaintiffs also invoke section 1343(3) of title 28 of the

United States Code as a basis for jurisdiction. This pro-

vision grants the district courts original jurisdiction of

any civil action, irrespective of the amount in controversy,

to “redress the deprivation: under color of any State

law ..., of any right privilege or immunity secured by . . .

any Act of Congress providing for equal rights of citizens.”

laintiffs assert that this section, when read with section

1983 of title 42, grants federal courts oa sdiction over

controversies involving substantial individual rights pro-

‘tected by federal welfare statutes. Becausé jurisdiction

to decide the statutory claim of invalidity is clearly founded

both on section 1331 of titlé 28 and upon pendent jurisdic-

tion arising from section 1343(3) of title 28, we need not

_ and do not address ourselves to this position: Cf. King v.

Smith, 392 U.S. 309, 312, n. 3 (1968). Compare Cover,

Establishing Federal Jurisdiction in Actions Brought

to Vindicate Statutory (Federal) Rights When No Viola-

tions of Constitutional Rights Are Alleged, Clearinghouse

Review, February-March, 1969 at p. 5;"Note, Federal Ju-

dicial Review of State Welfare Practices, 67 Colum. L. Rev.

84, 112-14 (1967) with Note, The Proper Scope of the Civil

Rights Acts, 66 Harv. L. Rey. 1285, 1291-93 (1953).

Il. GeneraL NATURE OF FEDERAL-STATE PRoGRAM FOR

Aw -Tto Famities With DEPENDENT CHILDREN .

New York, together with every other state, participates

in the AFDC program established by the Social Security

a ee ©

ey re " s

26a

Act of 1935. Section 401 of the Act provides that the fed-

eral government shall make “payments to States which have

submitted, and had approved by” the federal government

“State plans for aid and services” to “needy children and

the parents or relatives with whom they are living.” These

federal payments are made on a matching fund: basis. Ad-

ministration of the program is entirely in the hands of the

_ States, although each state’s plan must meet the several

requirements of the Social Security Act'and the rules and

regulations promulgated by the United States Department

_ of Health, Education and Welfare (HEW). 42 U.S.C. § 602.

See King v. Smith, 392 U.S. 309 (1968).

Each state participating in AFDC must formulate, in

monetary amounts, a standard of need and provide a level

of benefits based upon this standard. 45 C.F.R. § 233. 20

(a)(2)(i), 34 Fed. Reg. 1394 (1969). Phporationly, the

standard of need is computed by adding the cost of all of

the items deemed to be necessary for subsistence. Those

whose incomes are below the standard of ‘need have a’

budgetary deficit consisting of the difference between their

income and the standard of need, and they are eligible for

welfare assistance.

A state is free to determine the ae and their costs,

to be included in its standard of need. In practice, it may

not include all the necessary items or the prices used may

not reflect true cost. That this is often the ease is evi-

denced by affidavits and supporting memoranda submitted

to the Court establishing that welfare budgets based on

standard of need tend to be below the level which most

studies indicate is necessary for normal daily ftnction-

ing and healthy family life.

_ Were a state paying 100% of its standard of need, the

- amount of the welfare grant to a recipient with no income

27a

would be equal to the standard of need. But, some states’

level of benefits are not determined solely by their own

standard of need. Some states impose a flat maximum on

the amount of the benefit—z.e., no family can receive a

' welfare grant of more than a stated number of dollars, |

an amount which varies according to the size of the family

—even if this sum does: not fully cover the budgetary

deficit indicated by its own computation. Other states

apparently pay only a fixed percentage of need—e.g., if the

standard of need were $100 per month, the state would pay

80% of need and a person without other income would.

_thus receive only $80 per month.

Since “each State is free to set its own standard of need

and to determine the level of benefits” (King v. Smith, 392

U.S. 309, 318-19 (1968) ), the sums paid by different states

to comparable families under the AFDC program vary

considerably. Thus, 29 states pay 100% of what they de-

fine as standard of need, while Mississippi pays only 27%

of its standard of need. The average monthly AFDC pay- .

ment per recipient ranges from a high of $71.75 in New

York to a low of $8.50 in Mississippi, as of June, 1968.

IIl. New Yorx’s Current ProcramM

Up to now New York’s levels of benefits have purportedly

been designed to fully make up budgetary deficits as de-

fined by its standard of need. The New York Department

of Social Services is authorized to establish grant levels

“in accordance with standards of public health in the com-

munity with due regard for variations in cost from time to

time and between localities.” N.Y. Soc. Serv. §131(3).

Pursuant to section 131 of the New York Social Services

Law, the Regulations of the Department of Social Services

establish the “budgetary method” of computing the stand-

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28a

ard of need and levels of payments. 18 N.Y.C.R.R. § 353.1.

“[AJll items of basic maintenance and all items of special

need required by [individual] case circumstances” com-

prise the recipient’s “estimate of regularly recurring need”

and are to be included in the welfare budget: 18 N.Y.C.R.R.

§ 353.1(d). The “recurring cash grant [is] ... the full

budget deficit,”—that is, the excess of “the exthionte of reg-

ularly recurring need” over the recipient’s “available re-

sources” 18 N.Y.C.R.R. §§ 353.1(a), (d) ; 353.3(a). The test -

by which it is determined which persons or families are

eligible for welfare benefits, is defined as follows:

_ An individual or family shall be deemed “in need” when

a budget deficit exists or when the budget surplus is

inadequate to meet one or more non-budgeted special

needs required by the case circumstances and in- |

cluded in the standards of assistance. 18 N.Y.C.R.R.

—-§ 353. ci

New York welfare allowances have consisted of two sep-

arate types of grants. First, the basic, recurring grant. to

cover food, clothing, household supplies, school expenses,

and other items of basic subsistence, exclusive of rent and

fuel for heating which are added to the allowance of the .

recipient on a separate basis. The amount of this grant

varies with the size of the family and the age of the oldest

child (18 N.Y.C.R.R. § 352.4(a), (b)) because older children,

_ particularly growing teenagers, require more in the way

of food and clothing. .

Payments are presently made according tc three sched- -

ules promulgated by the State Commissioner of Welfare.

One of them, set out below, covers the area of New York

City.and nearby counties where most persons receiving aid

reside, |

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29a

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30a

The other two schedules, covering upstate areas, are simi-

lar in form but somewhat lower in amounts.

In May of each year, the Department of Social Services

has conducted a cost-of-living survey. It has adjusted the

standard of need as reflected in ehanging price levels as.

of August of the same year. Since prices have been rising

‘ for some time, the yearly adjustment has required increases’

in the standard of need. Schedules presently in effect are

based on a May, 1968 cost-of-living survey. They were

issued on August 23, 1968 and each local Department of

Social Services was required to implement them within

nine months of August 1, 1968. .

As supplements to the basic grant shown in Schedule

SA-1, above, New York provides what it calls “special

needs” grants. Special needs grants are designed to cover

expenses for extraordinary or non-recurring items such as

major items of clothing and furniture and household sup-

plies (18 N.Y.C.R.R. §§ 352.4(¢), 352.5(j)), medically-

dictated special diets (18 N.Y.C.R.R. § 352.4(b)(7), (8),

(9)), moving expenses (18 N.Y.C.R.R. §352.5(m)), and-

_ expenses incident to education (18 N.Y.C.R.R.. § 352.5(d)).

See also 18 N.Y.C.R.R. §§ 352.4(c) (iv) (layette) ; 352.4(b)

(6)(i) (restaurant allowance for persons unable to pre-

pare meals at home) ; 18 N.Y.C.R.R. 352.5(b), (ce) (ex-

penses incident to employment and securing employment) ;_

352.5 ( g) (child care services) ; 352.5(h) (laundry services) ;

352.5(i) (telephone service when such service is incident to

the production of income, health, or safety); 352.5(p)

(transportation expenses to secure medical care or other

essential verified transportation needs). These. grants are

required because it is recognized that the basic schedules

+

si al

° .

*

- . Bn Ae oe

.

° 3la

”

provide no surplus from which additional needs can be

met.

Pursuant to a “demonstration project” instituted on Au-

gust 27, 1968, New York welfare recipients in the City of ©

_ New York were given a flat cyclical grant of $100 per year;

a family of four, for example, would receive $400 per year.

This flat grant was designed to replace many—but not all—

of the special needs grants and to eliminate the necessity

of the welfare recipient applying for many small individual

items as they were needed.

Affidavits, studies and testimony before the Court agree

that the present schedules, as supplemented by cyclical

grants and special grants, are not in excess of present mini

mum requirements for life at the lowest acceptable level in

' New York. As the Commissioner of the Nassau County

Department of Social Services put it, speaking of the pre-

section 131-a situation, “the present standards.of assistance

provide for life on a level of sustenance, nothing’ more,

and often less.” Or, as the Deputy Commissioner in the

State Department of Social Services testified, AFDC re-

cipients “of necessity have learned to squeeze every penny.”

IV. New Yorx’s New Procram

Section 131-a is intended to substantially alter the welfare

system in New York State beginning in July, 1969. In

place of the présent administratively drawn schedules based

on annually determined costs of living, the size of the

family and the age of the oldest child, it substitutes a sys-

“}

tem of flat grants set by the legislature and varying solely -

with the size of the family. All special grants, including

the $100 flat cyclical grant for New York City residents,

are abolished (except for the special grant for the replace-

a ee

32a

ment of clothing and furniture destroyed by flood or fire).

Two separate schedules of payments are created, one solely

for ‘New York City and the other for the rest of the state.

(The schedule for the rest of the state may be modified ad-

ministratively so long as it does not exceed the schedule for

the City of New York. See Rosado v. Wyman, —— F. Supp.

—— (E.D.N.Y. 1969) (three-judge court) )..

The new schedules were computed by using the average

payments toa family of four as the base and then adding

or subtracting fixed amounts for additionaLor lesser num- -

bers of children in families of different sizes. Set out be-

low is the statutory schedule of maximum grants to resi-

dents in the City of New York:

Number of Persons in H ousehold

One Two Three Four Five - Six Seven

$70 $116 $162 $208 $254 $297 $340

For each additional eligible needy person in the house-

hold there shall be an additional allowance of forty-

‘three dollars monthly.

To these sums is added the cost of rent and fuel. A

lower schedule is provided for areas outside the City.

These schedules, the statute declares, “shall be deemed to

make adequate provision for all items of need.”

The state’s brief describes “the method of establishing

the levels set forth in the schedules contained in the stat-

ute” as follows:

The mean age of the oldest child in each size family

was ascertained. The mean age rather than the median

was used as this produced a more generous result in

most cases. The amount of allowance provided in 1968

33a

for a family of each size in cases where the oldest -

child was of the mean age was then adopted as the

allowance for that size family. Where the mean -age

contained a fraction, the older age was ‘used, ‘again —

working a benefit to the recipient. Thus, for a family

of four, which received amounts ranging from $152.00

‘ to $221.00 (depending upon the age of its oldest child),

_the mean age of such oldest child was found to be

10.09 and, therefore, $191.00, the figure where the old- ©

est child was ten or eleven, was used as a base amount.

To this was added $17.00—the amount necessary to

bring the allowance up to $35.35, the subsistence: level

determined by the United. States Government for New

York City for a family of four, or a monthly allow-

ance of $208.00. The allowance for the remainder of

the state was determined at a differéntial of $25.00 -

fora family of four. As the computations of the De-

partment show, these levels, based on the previous

allowance incliding the cost of living increases of 1968,

will result in. slightly increased benefits to families

with younger children and slightly decreased benefits

_ to those with older children. Memorandum of Law in

Support of Defendants’ Motion ~ Summary Judg-

ment, pp. 9- 10.

It is not yet clear how such a statistically even-handed

technique resulted in even steps of either $43 or $46 as

the size of the. family increased.

Special grants were seemingly not included in these

computations. No attempt was made to average them out .

acfoss the state and then to add that figure to that of the

Basic recurring grant.

ee |

* | 34a

Each of the individual plaintiffs in this action will suffer

substantial cuts ranging up to 20% in their welfare pay-

ments as a result of section 131-a. Set out below is a table

listing the individual plaintiffs, thé number. of dependents |

of each plaintiff, the monthly grant exclusive of rent each

is currently receiving, and the maximum that each will

_ receive. -

: Maximum

' Size of Family ; Current . Under

Plaintiff and: Age of Oldest Child Grant 181-0

Rosado 5 people, oldest child 14 . $280 $254 .

Hernandez 3 people, oldest child16 $218 $162

Miley © 10people, oldest child15 — $535 $469

Abrom + 7 people, oldest child13 $406 $340

_ Gathers 7 people, oldest child 19 $382 $340

Lowman 8 people, oldest child14 $396 — $3883

King 9 people, oldest child 17 $482 $426

Folk. — 4 people, oldest child 16 $337 $208

Phillips 5 people, oldest child 14 $314.40 $224

Duffy 10 people, oldest child 20 $563.40. $389

(Plaintiffs Phillips and Duffy are residents of Nassau

County.. If they resided in New York City, or if the Com-

missioner .of Social Services increases their maximums as

much as the statute permits, their respective maximums

under section 13l-a would be $254 and $469.)

As a result of the abolition of special grants, plaintiff

Abrom, will not receive the following grants now supplied

to her: $15 a month for large sized clothing for her chil- ~ .. -

dren; $15 a month for medically required special diets;

and $5.80 a month for the laundry of diapers. Plaintiff

' Miley will not be able to receive the following special

grants now supplied: $155 a month for a homemaker and

35a

$9 a month for a telephone, both required for medical

reasons; and $80 a month for special diets for herself and

her family. |

While a large percentage of families, particularly tim

living outside the New York City metropolitan area with

young children and with little need for special grants,

- will receive more under the new system than they do at

present, a substantial majority of the AFDC families in

the state will have their payments reduced on July 1, 1969.

_ It is not clear how much the reductions will amount to

inside and outside the city and by size of family.

Most beneficiaries of the AFDC program live in New

York City (657,000 out of a state total of 887,000 was the

- 1968 monthly average). Under subpoena, and based upon

statistics supplied by a State Department of Social Serv-

ices study of July, 1968 and 1969-70 caseload projections,

the Acting Deputy Director of the Bureau of Fiscal Ad.

‘ministration of Social Services of the City of New York

~ has made the following computations of the effect of sec-

tion 13l-a in that City:

The total benefits lost to diate will be $39,142, 768. .

63.5% of the cases will lose while .36.2% gain. The

average annual loss per case will be 343.81 while the

average — is 145. 55.

-

These computations have been controverted by defendants’

testimony indicating that 41.5% of AFDC cases would .

receive increases, 58.1% would receive decreases and .04%

would be unchanged.

Apparently the plaintiffs’ computations include special

and cyclical grants. They do not indicate the effect of

the changes outside the City of New York. The effect of

upstate residents seems to be less severe; approximately

~ ns RS AOR Ne 8 AS NRO ee Sg en

~s

36a

51% suffer cuts, while 49% are afforded increases. Any

. possible gain to upstate residents, who comprise only a’

small percentage of AFDC recipients, probably does not

offset the reductions to City residents of total amount of

aid paid. It is not clear whether this result would be

changed if counties outside New York City took advantage —

of the opportunity afforded by the amendment ‘to section

131-a discussed in the per curiam opinion of the three-

judge court, Rosado v. Wyman, F. Supp. —— (E.D.

N.Y. 1969), and raised their schedules of payments to

New ‘York City levels.

Computations of loss by the parties apparently do net

include allowance for a cost-of-living adjustment which }

‘has heretofore been made administratively each year in -

May. Under section 131-a no cost-of-living adjustment will

be made in 1969 even though it is undisputed that the New

York City: Consumer Price Index has risen at an average

rate of 0.5% per month in the last two years and that the

rate of increase has accelerated since February of. this year.

V. Reasons ror New York’s New Procram

In the state’s view it “was not the case”. that section

13l-a resulted in a “reduction of: standards;” rather, it

contends, section 13l-a was intended to, and did, main-

tain the standard of heed while providing administrative

streamlining. Reply Memorandum for Defendants, pp. 7-8.

Its brief declares : > ; . )

~

the adoption of §131l-a was the fruit of continuous

legislative and departmental study of the problem of

_ maintaining a standard of need during a period of

sharply increasing numbers of recipients, especially

in the ADC program. To avoid a reduction, adminis- -\

trative streamlining and elimination of individual de-

°

37a 7

terminations of eligibility for a plethora of special

grants was regarded as essential. Jbid.

The.adv ‘antages of a system of flat grants to the recipient

are, the state contends,—and the plaintiffs do not dispute

this—substantial :

the flat grant concept, regarded as the most enlightened

and progressive method of public assistance payment,

eliminating the necessity of the welfare recipient ap-

plying for individual items—often a degrading and

time-consuming process—and thereby, enhancing his

dignity, increasing. his ability to budget and self-

respect, and freeing case workers from: bookkeeping

decisions in order to allow them to devote their time

to counseling. of recipients. Memorandum of Law In

Support. of Defendants’ Motion for Summary —_

ment, p. 8.

' There is considerable doubt about the defendants’ sug-

gestion that the new schedules were designed .wholly, or

even primarily, to meet the demands of efficiency. The pro-

posal to convert to a flat gfant system was initiated. by the

New York State Board of Social Welfare. In its report to

‘the Governor in May, 1968 it recommended flat grants

“based” on family size and the age of the oldest child” to

“include food, clothing, personal incidentals, household sup-

plies, school expenses” and the like, with “additional money

amounts” in certain circumstances such as special diets or

moving expenses, which are not common to all recipients.”

Challenge and Response, 4 (May 1968).

This proposed change was not designed to reduce stand-

ards of need or payments. In a letter of Commissioner

‘Wyman to the Governor’s Counsel dated September 13,

‘

CORE EM ay

vier

Ft NS Te ee ee. oe re ae Sn ee? Laas, A oe aie BE an vpaaks Wayepaak. ie:

— tance nasa ro

‘38a

1968, the flat grant system was spelled out in great detail

as Proposal 20, an outline of a proposed bill to provide

establishment of standards of assistance. The schedules

included were those in present section 131, not the reduced,

schedules in section 131-a. Moreover, many special grants

such as those for special clothing and for diet supplements

for pregnant women and medical patients were proyided. .

And there was a provision for annual repricing of schedules .

: _ “whenever the repricing shows an increase ‘or decrease of

2% or more. ” This proposal qwas never introduced in bill

; =‘ form.

' -' The Governor’s Budget, dated January 21, 1969, a not

* indicate any plan for a shift in methods of computing stand-

ards of need. See Executive Budget for the Fiscal Year

April 1, 1969 to. March 31, 1970, 566-67, 571-72, 778-780.

AFDC payments were expected to continue “to increase

principally because of the increasing cost of living and a

continued demand for public assistance recipients for the’

granting of special need items in addition to the basic

subsistence allowances.” Id. at 779. The ‘percentage of

federal aid was expected to decline because of a “freeze”

on the number of children to be aided and restricted par-

ticipation in cases of.aid due to unemployment of a parent.

Ibid. Based upon monthly AFDC averages, the projected

number of recipients for 1968-69 was 917,235 and for 1969-

_ 70 it was 1,095,704. The average budgeted monthly grant

was $74.57 for 1968-69 and $83.37 for. 1969-70. -Id. at 779.

: The total 1969-70 AFDC program cost was projected at

See ee : — $1,096,172,000 ; $440,195,000 was anticipated in federal aid:

i Id. at 778. The estimated cost-of-liying increase for 1969-

70, based upon the system then in force was $5,000,000 and

_ this sum was apparently included in the $1,096,172,000 fig-

am ure. Since the share of the state and of local social-service

EVA,

~

ae

- — on’, -

vs = peeseeen Bove 5

“ s

ah PRL SIRE ce ER MG Ra Se NS acs nt SEE DS aR RRNA CE SES

39a

districts is almost equal (id. at 778), $321,125,000 was

budgeted for. 1969-70 as: the state’s share of the 1969-70

AFDC. program. The total Local Assistance Fund for

State Aid Programs for the Department of Social Services

was budgeted at $1, 040,514,000. Id. at 786. See also Sen.

1689, Ass. 2305 (1969). o®

Beeause, the Governor reported, “necessary expenditures

are expected to outstrip. available funds,” he suggested “a

reduction in the level of recommended budget expendi-

tures by approximately 5 per cent across-the-board.” Ex-

ecutive Budget for the Fiscal Year April 1, 1969-to March

31, 1970, M7. The Local Assistance Fund, including AFDC

contributions by the state, was to_be “limited to 95 per cent

This would have redueed the catego a state aid to ifne

by approximately $16,000,000 and all programs of state

social service local aid would have been — by $52,-

000,000 to $988,000,000. a

It is not clear from the Governor’s proposals whether

bs the total AFDC program cost was intended to be reduced

5% from $1,096,172,000, for a cut of approximately $55,-

000,000, or whether the local social service districts were

expected to. increase their share leaving the total program

is Bain In any event, no one suggested that. the

5% et was anything but a money saving device.

During the legislative session the Governor’s proposed

budget was modified to provide greater aid than the Gov-

ernor had requested for some items but to reduce state

Aid to Dependent Children even further. The budget ’bills

do not show the detailed amounts for each category of

local aid but show a lump sum for all categorical assistance.

Instead of $988,000,000 proposed by the Governor—after

ee ee ee Se ee ha Is ee . - 2 °

ce TR ee ee

02 ae He AIOE athe ‘Bice |

2 nS RM Di Nil Rs Hina ph ER i Ly ae,

‘the 5% cut—$913,000,000 was ‘appropriated. Sen. 1689-A,

Ass. 2305-A (adopted March 29, 1969, ch. 49, L. 1969). This

constituted a reduction of approximately 127% from the

original projected eost. We are informed that departmental x

computations indicate that $297, 441, 000 was the amount in-

tended for the. AFDC program, a saving of $23 684,000 or

about 7% over the Governor’s Budget. When the $5,000, 000

amount in the Governor’s Budget for 1969 cost-of-living

increases is eliminated the reduction is $18,684,000, or about _

6%. Since the state’s share is some 34%, the decrease in

total AFDC payments under the program seems to have °

been at least some $50,000,000.

A further reduction of $42, 000, 000 was made by the sup-

plemental budget,. making the total reduction in local aid

for categorical. assistance some 16% from what the Gov-

ernor’s Budget had estimated as projected costs. Sen. 5692,

Ass. 7205 (adopted May 2, 1969, ch. 340, L. 1969). We are

told by the state that if this sum is not supplied by the

~ federal government “‘the-1970—Legislature would—be—re-

quested to cover the amount in a supplementary budget.”

Defendants have indicated, in a letter to the Court dated

* May 14, 1969, that the $42,000,000 cut in. the Supplemental

Budget: was taken “from the $297,441,000 figure” for local

AFDC aid. This would mean a total cut of $65,441,000 from

the Governor’s original cost estimate of $321,125,000 for

this item. Such a reduction of 20% in AFDC payments

is so great as to suggest that it represents technical budge- .

tary adjustments rather than reductions in payments to

recipients. The same letter just referred to states:

the budget bureau, which has been working at a break-

neck speed at the end of the legislative session, has not

been able to fully retrieve and prepare the tables on

this amount to indicate whether the difference of :$23,-

a 7s os ‘ a *.

BRE ST ee

pone Gee 4la |

684, 000 over the proposed budget, represents qdminis. .

- trative savings or partial savings from the abolition

of special grants and to what extent it contemplates

an expanded purchase of services program.

Some further explanation seems callé@¥or of how and avhy

the budgets affecting AFDC were Mood.

Timing of legislative action shows the close relation be- =

tween the new AFDC program and budgetary decisions.

Section. 131-a was not introduced until February 18, 1969 —

in the Assembly (Ass. 6620) and March 27, 1969 in the Sen-

ate (Sen. 5419), some time after the Governor’s Budget

Message was delivered on January 21, 1969.’ ‘The amend- .

- ment was adopted on March 29, 1969, the same day as the:

budget. There is good reason to believe, when the budget

is read with section 131- -a, that a cut in the projected cost

of the total AFDC program as well as in the state contribu-

tion was intended. .

_ Since a reduction of_ payments, based on projections,

~ was likely to be required to achieve these budgetary reduc-

tions, since all affidavits and testimony indicate that pay-

ments have not been above the standard of need, and since

New York continues to purport to. pay at 100% of standard’

of need under section 131-a, there is strong support for the -

contention that standards of need were reduced.

Motive and purpose of the legislature may be considered °

in determining what it in fact did. Cf. Williams v. Dand-

ridge, F. Supp. (D. Md. 1969) (maximum grant

regulation motivated by “an inadequate State ,appropria-

tion”). The method by which this reduced appropriation

was to be divided among recipients under section 131-a may

well have permitted a more efficient administrative ‘system.

But there is clearly a ait for the plaintiffs’.

42a

contention that section 13l-a worked a reduction of stand-

ard of payment. ne

Defendants argue that the elimination of the cyclical,

grant and the special grants are not to be considered in

determining whether the standard of payment has been

reduced since they “were over and above New York’s pay-

ment of 100% of its standard of need” and, thus, “totally

gratuitous on the part of the State.” Memorandum of Law

in Support of Defendants’ Motion for Summary Judgment, ©

p. 25. This argument is difficult to credit. The festimony ;

of witnesses for the plaintiffs and the witness for the de-

fendant:- ‘agree that New York does not pay more than is

required for. bare subsistence. Special grants are: not

_ luxuries; they are merely a different method for meeting

family and individual need for bdre necessities. In fact,

New York’s definition of the standard of need prior. to

adoption of section 131-a included items covered by special

—

"An individual or family shall be deemed “in need”

when a budget deficit exists or when the budget sur:

plus is inadequate to meet one or more non-budgeted

special needs retjuired by the case circumstances and

~ included in the standards of assistance. 18 x .Y.C.R.R.

§ 353.1(¢).

See also 18 N:Y.C.R.R. § 353.1(d) (“all items of basic main-

tenance and all items of special need required by case cir-

cumstances” comprise the recipient’ S estimate of regu-

arly recurring need”).

Defendants suggested on argument that the State Com-.

_ missioner of Welfare was considering the adoption of pro-

viding for some of the special grants “on a purchase of ser-

vice basis.” To date we have not been favored with a copy

43a nS

of any such regulations. It is mot clear from the argument

that such regulations will, if adopted, cover cyclical or —

special grants to the same extent as they were covered

prior to adoption of section 131-a:. .-' :

This Court is not, of course, concerned. with justifications

for state budgetary decisions, nor does it sit to discourage .

desirable improvement in the efficiency of state welfare pro- *

grams. The issue before us is whether the system of re-

‘ ducing standards of need and levels of payment embodied _ _

in section 131-a violates federal statutes. We turn now ; to

the relev ant federal provision for an answer to that ques-

tion. neat s .

VI. Feperat Limitations on_Repuctions ——

in. AiD TO DEPENDENT CHILDREN |

A. Seiad

Paragraph 23 of subdivision (a) of section 402 of the

Social Security Act of 1935, as amended (42 U.S.C. $602

( a) (28), requires that each state’s AFDC plan must:

_ provide that by J uly 1, 1969, the amounts used by the

State to determine the needs of individuals will have

been adjusted to reflect fully changes in: living costs —

since such amounts were established, and. any maxi- -

mums that the State imposes on the amount of aid paid .

to families wn have been proportionately apeene.

This provision was effective January 2, 1968.. Pub. L. 90-

248, Title II, § 202(b); 81 Stat. 821. ° 3

Defendants contend that 402(a)(23) should be nar-

rowly construed. They interpret it as- being primarily

aimed at raising a state’s standard of need and as not

controlling a ‘state’s level of benefits to AFDC recipients.

* cas 1 wenden

ee ee ee ee SS ed he.

rely upon the } position gf HEW. as expressed i in its amicus

. brief: filed in pam

- La. 1969) and the fmplementing regulation*of HEW ‘which

would. permit a state to make downward adjustments in.

‘the amount of AFDC payments through the device of

. “ratable reductions”—#.e., percentage reductions applied

~~, to the standard of need. 45 C.F.R.. § 233.20(a) (2) (ii), 34

Fed. Reg. 1394 (1969). We disagree and hold that a

»

44a

In support of this construction of the statute, defendants

v. Bonin, —— F. Supp. (E.D.

broader construction of 402(a)(23) is required by lan-

guage, statutory history and good ‘sense.

Section 402(a) (23) plainly states that both the “amounts

used by the State to determine the needs of individuals”—

i.e., the standard of need—and “any maximums that the

State i imposes on the amount of aid paid:to families’”—i.e.,

the level of benefits—be adjusted “to reflect fully changes

in living costs since such amounts were established. ” The

adjustment contemplated by. 402(a) (23) is undoubtedly a

upward one’in view of the inflationary trend this countr

has experienced over the last two decades. The one judge

who has heretofore considered this question at length has

reached a similar conclusion. Lampton vy. Bonin, —— F.

Supp. (E.D. La. 1969) (dissent, setting out legis-

lative Mater at length; the majority, did not reach the.

question) (“Congress’ intention to compel the states to

. raise ADC payments”). See also Dandridge v. Williams,

—— F. Supp. , —— (D. Md. 1969) (“designed te in-

_ erease benefits to keep pace with living costs”).

This federal provision grew out of an attempt to reform

the inequitable and unsatisfactory aspects of our present

welfare system resulting from the inadequate and widely

varying level of grants among the states. The solution first

' proposed by HEW would have required all states to meet

ie ae A tert RATES SURE at kn eta a ea ewes

e

cA eal

45a

in full their own need standards and to adjust payments

annually so as to maintain payments at the 100% level

despite intervening, inflationary price rises. Congress: put _

off enacting any basic change to allow further study and ~

- consideration of .altérnatives. At the same time, it did take

an interim step, a helding action against further deteriora-

.tion in levels of benefit.

Section 402 (a) (23) embodies that interim wih temporary

solution. It creates a floor under present levels of benefit

‘by prohibiting future cuts in welfare payments: and by

requiring that all states provide at least one increase by -

July 1; 1969 to at least partially compensate for the rise

' in the cost-of-living.

As already. noted, section 402(a) (23) grew out of an

Administration proposal to require all states to pay 100%

-of need and to make annual cost-of-living adjustments be-

ginning July 1, 1969. This proposal was originally em-

bodied in the bill introduced in the House in 1967 at the

request’ of the Administration to’amend the Social Security

Act. Section 202 of H.R. 5710, 90th Cong.,. Ist Sess. The

bill ultimately reported out by the House Ways and Means

Committee and passed by. the House, H. R. 12080, contained

fo such provision.

The Administration renewed its request in the hearings

before the Senate Finance Committee and proposed the.

following amendment-to the House Bill: |

[each state plan must] provide (A) effective July 1

1969, for meeting ... all the need, as determined in

accordance with standards applicable under the plan

- for determining need, of individuals eligible to receive -

aid to families with deperdent’ children .. . and (B),

effective July 1, 1969, for <n annual review of such -

/~ Ree 46a

Ponn and... for wediiing such donde’ to take .

into account ange i in living costs, Hearings Before

the Committee on Finance, U.S. — seth Cong. ¥

ist Sess., on H.R. 12080 at GSS. }

See also Jd. at 716 (statement.of HEW « on its proposed

amendments to H.R. 12080).

Secretary of Health, Education and Welfare J ohn W..

Gardner, in his testimony before the Committee in support

of this amendment, specifically referred to ‘the need to

increase the level of benefits:

The House bill does nothing to improve the level of

State public assistance’ payments.” As. things stand

today, the States are required to set assistance stand-,

ards for needy persons in order to determine eligibility

—but they need not make their assistance payments on

the basis of thése standards. The result is that wélfare

payments are much too low in a good many states. ...

We strongly urge you to.adopt the administration’s

- proposal requiring States to meet need in full as they

determine it in their own State assistance standards,

and to update these standards periodically to keep

pace with changes in the cost of living. Hearings

Before the cansggeanyt on Finance, U.S. Senate, 90th

, at ist ess., on H.R. 12080 at 216.

Sintilar testimony was given by Undersecretary Wilbur

Cohen:

It is this Serieus discrepancy between what the ‘States

themselves determine to be minimal need and the

amounts they will actually pay that has led us to

strongly recommend that States’ be required to meet

needs in full as they determine them, .

“47a

But it is not enough only to require the States to

meet need standards. They must assure’ that these

standards reflect current prices. Hearings Before the’.

. Committee: on Finance, U.S. Senate, 90th ne. . 1st

- Sess., on H:R. 12080 at 259. e.

~.While ane Gusts wd Cohen referred only to state

dollar maximums in the illustration used in their testimony

(id. at. 255-260), it was clear from.their statements and

colloquy with those Senators present that concern was .

being expressed about any method used by the states to.

pay less ‘than was indicated by their standard of need.

Part of the record reads as follows: _ r ,

. Senator Ribicoff. What happens, Mr. ‘Calm with

the people who receive payanate so far below the

' standard? -

' Mr. Cohen. Well, if a State dees ont pay its full

standard, two things can happen. One is, as Senator .

Long indicated, that they may make up the difference

from i income frong social security or earnings so that

they still might idee the standard in those cases where -

. an individual has social security or could work. But,

I might say that out ‘of the 2 million people who are

old-age assistance recipients, ‘the average age being.

75, quite a number of them cannot work, although on

of them’do haye social security benefits. veg

Senator Ribicoff. I know, but you take all that into

account -in“the standards that are being set. What

they are.receiving is not just a question of the amount.

they receive from the welfare agencies. Yeu take’ into

account all.they receive. What happens to the child

or..the adult who receives.so,much less than what you

\

48a

consider or is considered a ‘Proper ; standard? How do

they live?

Mr. Cohen. They have to live on the lesser amount.

Senator Ribicoff. How do they live? -

Mr. Cohen. They have to cut back on their food and

clothing and other needs to live on the amount that

the State gives them. ¥

Senator Ribicoff. Well, is not a study made or do

~ not apg know what happens to these people? I mean

just? what is happening to them? .

Mr. Cohen. Well, I think that the evidence shows—

-T do not have it immediately before me—that many of

these children and these families grow up without

adequate food, without adequate ‘medical care, and

certainly their whole aspirations for improving their .

educational status are stunted, and I think that the

' evidence from the State administrators when you hear

them will bear that conclusion out.

Secretary Gardner. It shows up most clearly, I

think, in the medical data. You will find a higher in-

cidence of just about every kind of medical disorder

and physical handicap in these youngsters—malnutri-

tion and everything else. |

Senator Ribicoff. Well, in looking to ‘the cost to

_ society ultimately, the people who are below standard

eause a greater drain eventually upon what the society

_ has to pay: out in every conceivable way, is. that not

right?

Mr. Cohen. I might add, Senator, just to give you

a figure which I will come to later, that the average

‘payment per child for the Nation as a whole is around —

Secretary Gardner. No enedtion about that, ‘Senator.

49a

$36 per month per child. That is the actual payment, -

which is a little bit more than $1 per day per child.

‘Now, I think, that this is an indication of the rather

low level and inadequacy of payments that exist in

the country as a whole. Some are higher and ‘some

are notably and substantially lower, Jd. at 258-69.

The bill reported out of ‘the. Senate Finance Committee,

and passed by the Senate, reflected a compromise on this

issue. The requirement that all states pay -full need was

rejected, but the second recommendation—that they. be

required to annually increase levels of payments to reflect

changes in living costs was contained in the Senate version.

The: bill is practically identical to 402(a)(23) except for

a mandated annual cost-of-living adjustment:

by July 1, 1969, and at least annually thereafter, the

amounts used by the State to determine the needs of

individuals ‘will -have been adjusted to reflect fully

changes in-living costs since such amounts were: es-

tablished, and that any maximums that the State im-

poses on,the amount of aid to families will have been

sa ihaaaiaiaaied adjusted.

See also Senate Report No. 744, 1967 U. S. Code Cong. &

Admin. News 3133.

In the iiieasip anit osaticeia Committee, the require-

ment for annual increases was dropped; only one adjust-

ment prior to July 1, 1969 was to be required. The Con-

ference Committee Report explains: |

The new section [Senate amendment] also amended

section 402(a) of the Act to require that by July 1

aii acs Se ere Te

50a

1969, and annually thereafter, each State ... must

adjust its standards so as to reflect current living

costs and make proportionate adjustments in any’

- maximums. ;

Under the chide Committee] agreement, the new

section 402(a) provision (for adjustments to reflect -

living costs) would require States to.make only one

adjustment before July 1, 1969 . . . Conference Com-

mittee Report No. 1030, 1967 U. S. Code Cong. &

Admin. News 3209.

The language of the basic requirements of 402(a) (23)

. remained virtually unchanged throughout its legislative

evolution. There is no hint from either committee that it

intended to change the purpose of the section as expressed |

by Administration spokesmen. Hence, there is no reason

to believe that Congress failed to appreciate the import —

and plain meaning of the language in 402(a) (23).

ae : Requirements of section 402(a)(23 )

1. Adjustment of Standard of Need

_ Section 402(a)(23) simply requires that all states. in-

crease benefits once to keep pace with living costs. The

only significant variation in the change required in dif-

ferent states is the percentage adjustment required, which

depends on when, prior to January 2, 1968—the daté 402

(a)(23) became law—a state had last-repriced its need

standard. The more outdated the prices used to determine

need, the greater the required adjustment.

In determining the required adjustment, all items com-

prising the standard of need must be repriced. While

‘items need not be added, no item previously included and

2 ae r

still aia by recipients may be omitted, else the effect

of repricing would be nullified. The content of the re-

priced standard must be equivalent to that of the old. Any

consolidation through a combining of items “may not re-

sult in a reduction in the content of the standard.” 45

C.F.R. § 233.20(a) (2) (ii), 34 Fed. Reg. 1394 (1969).

2. Increase in Level of Benefits

Section 402(a) (23) by its terms requires every state to

increase its level of ‘payments by an amount sufficient to

offset the rise in the cost of living. An upward adjust-

ment of. “any maximums that the State imposes on the

amount of aid paid” automatically. necessitates an incre-

ment in the amount of such aid.

Defendants contend that this requirement of increased

‘level of benefits does not apply to states such as New York, .

- which have been paying full need or to states which em-

ploy percentage reduction systems. “Maximums,” accord-

ing to defendants, is a word of art in welfare law jargon

which refers solely to dollar maximums and should be so

construed within the meaning of the statute. |

This argument is not persuasive. Section 402(a) (23)

speaks of “any maximum,” not just dollar maximums. If

a state pays 100% of need, the standard of need constitutes

both the maximum and the amount of aid paid. Repricing

the standard of need serves, without more, td increase the

level of payments. Both the creation and the reduction of

dollar maximums are equal evasions of the statute.

- The invalidity of this leg of defendant’s argument can

be illustrated by a hypothetical. The standards of need in

State X and State Y are $200 per month. State X pays

full need, or $200, while State Y imposes a dollar maxi-,

mum of $100. The cost of living has risen. 10% in both

Pow ym ts ".

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52a

_ states. Under defendants’ interpretation of 402(a) (23), |

State Y would have to increase its monthly payments to

$110, while State X could lawfully reduce them to $100, or

even $50.

Section 402(a) (23) applies i in the same manner to a per-

centage reduction system. The maximum which must’ be

proportionately adjusted is not, as defendants would have

‘us believe, the number representing the percentage reduc-

tion but, rather, the dollar figure resulting from the applica-

tion of the percentage to a family’s need as determined by

the State’s standard of need. |

For example, if a state had a standard of need of $100,

and ‘paid 80% of need, the recipient would receive $80. If

the need standard were now raised to $120 to reflect a rise _

in living costs, and the state continued to-pay 80%, the

- recipient would receive $96. The rise in living costs would

thus be reflected in increased aid to the recipient.

: C: HEW Implementing Regulation

“The interpretation . . . by those charged with its ad-

ministration must be given great weight by courts faced

with the task of construing the statute.” Zemel v. Rusk,

381 U.S. 1, 11 (1965). But. an administrative interpreta- ~—

: tion is by no means decisive when it departs from the mean-

ing of the language and purpose of the statute; “deference”

is all that is required. Udall v. Tallman, 380 U.S. 1, 16

* (1965) ; United States v.. American Trucking Ass’ns, Inc.,

330 U.S. 534, 543 (1940); Hagar Co. v. Helvering, 308 U:S.

389, 394 (1940). See cases collected in Williams v. Dand-

ridge, F. Supp. ' (D. Md. 1969) (supplemen-

tal opinion). Any HEW regulation or interpretation “in-

consistent with the controlling federal statute” may not

be relied upon to justify-denial of AFDC benefits. K ing V.

58a | oes

Smith, 392 U.S. 309, 333, n. 34, 88 S. Ct.'2128, 2141, n. 34

(1968) ; Williams v. Dandridge, —— F. Supp. ——,

' (D. Md. 1969) (supplemental opinion).

* HEW agrées that the pricing of the need standard must _

be updated and that maximums must be appropriately ad-

justed. If a state has insufficient funds to meet need in”

full under the adjusted standard, however, HEW’ would

‘permit it to pay to recipients only a given ‘percentage of

the adjusted standard of need. Its regulation states that |

a state AFDC plan must:

"provide that by July 1, 1969, the State’s standard of

assistance for the AFDC program will have been ad-

justed to reflect fully changes in living costs since such

standards were established, and any maximums that

- the State imposes on the amount of aid paid.to fami-

"lies will have been proportionately adjusted. In such

' adjustment a consolidation of the standard (i.e., com-

bining of items) may not result in: a reduction’ in the

content of the standard. In the event the State is not

able to meet need in full under the adjusted ‘standard,

the. State may make ratable reductions in accordance

with subparagraph (3)(viii) of this paragraph [ad-

justments must be.uniform statewide]. Nevertheless,

if a State maintains a system of dollar maximums,

these: maximums must be proportionately adjusted in -

relation to the updated standards. 45 C.F.R. § 233.20

(a) (2) (ii), 34 Fed. Reg. 1394 (1969) (emphasis sup-

plied). , canes

Defendants do not contend that section 131-a establishes

_ any ratable percentage reductions of grants applied to the

standard of néed. “Section 131-a,” they insist, “provides

for the full standard of need.” Memorandum of Law in

d4a

Support of Defendants’? Motion for Summary Judgment,

p. 22. New York thus will continue to. purport to pay on

‘ the basis of 100% of its standard of need. Id. at 23. The

validity of the escape route for section 402(a)(23) sup-

-plied by: the ee is thus technically not before a

' Court.

_—-Nevertheless, since this regulation provides the under- ~

lying foundation for defendants’ position and since the

underscored portion of it cannot stand in the face of our

interpretation of 402(a)(23), we feel obligated to briefly

consider the regulation’s validity. Were HEW correct in .

its assertion that 402(a)(23) can be easily circumvented

by a mere technical adjustment of figures and that it does

‘not impair a state’s freedom to set any level of payments

it chooses—so long as the proper verbiage is used in the

state’s statutes—we would be reluctant to seriously con-

sider invalidating section 13l-a. We are, after all, not

playing a legislative word game but dealing with the allo-

cation of tens of millions of dollars in tax receipts and

with the well being of a million New York citizens.

Our analysis of the plain meaning of section 402(a) (23) .

and its legislative history and our construction of “maxi-

mums” within the meaning of the statute are equally rele-

vant here and need not be repeated. Only three additional

points need be made.

First, it seems an exercise in sophistry to infer, as does

HEW, that states are free to do what they will with per-

centage reductions since 402(a)(23) does not specifically

refer to percentage reductions and the percentage figure

itself need not be increased. See Lampton v. Bonin,

F. Supp. , ——~ (E.D. La. 1969) (dissent); majority

did not reach issue). As noted above, the number repre-

senting the percentage reduction is not the maximum to

“55a

- be “proportionately adjusted.” Moreover, since the level of

payments is automatically adjusted so long as the standard _ .

of need is updated and the percentage is kept constant,

Congress’ failure to mention percentage reductions is eas-

ily explainable by the fact that “there simply was no need

’ to-in order to achieve the desired results.” Id. at ——..

Second, to permit ratable reductions in the manner sug-

gested by HEW would nullify the Congressional intent to

increase the’ level of enefits and would render the statute

virtuall* meaningless. A state could avoid increasing pay-

ments by merely lowering the percentage figure or, if it

_ had not been a percentage reduction state, by: adopting a

percentage. Compliance with 402(a) (23) could be ‘secured

by a mere administrative adjustment of numbers without:

effecting any substantive change. States would be able to

set any level of payments whatsoever—the identical posi-

tion they were in prior to the enactment of 402(a) (23).

This is highlighted by the very example put forth by HEW

to illustrate its position: °

The fagt that section 402(a)(23) does not. affect per-

centage reductions allows States to retain consider--

able flexibility as to the amount of their assistance pay-

ments. We return to our example where a State with”

a need standard of $100 paid 80% of need, and the

recipients received $80. Because of a 20% rise in liv-

‘ing costs, the State’ s need standard is raised to $120.

Such a State could now pay 6634 % of need, and the

recipients would still receive $80. Or the Staté could

pay 100% of need, or 80%, or 50%, according to the

available fynds. States which formerly paid 100% of

need might now change and pay a lesser percentage.

States with a system of maximums might in addition

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56a

-” .

computepayments on the basis of a percentage of need.

-HEW Amicus Brief submitted in Lampton v. Bonin,

at page 10 (etnphasis supplied).

“Nullification” rather than “flexibility” is a more apt word.

for such an interpretation. _

Finally, were HEW correct, not only will sialubiane

not be increased as Congress intended, but the implement-

ing regulation, by encouraging states to switch to percent-

age reduction systems, is likely to lead to lower payments.

‘to present welfare recipients. The net result, under a

percentage reduction system, of raising the standard of

need without a concomitant increase in available funds,

is to increase the number of persons eligible for relief

at’ the expense of those already on relief. It is incon-

ceivable that Congress intended the most poverty stricken

members in our society to pay the added cost of those newly

added to the AFDC rolls. In short, we find ‘ourselves in

agreement with Judge Cassibry—the only federal judge

who has heretofore passed on the regulation—when he

wrote that “the HEW interpretation of section 402(a) (23)

~ eannot be accepted for it nullifies the effectivenéss of the

provision .. . and is invalid.” Lampton v. Bonin, supra,

- ice |

We do not decide whether section 402(a)(23) precludes

a state from converting to a “flat grant system” by averag-

ing out all the special grants across the state and then’

adding this figure to that of the basic recurring grant, or

by including all items previously covered by special grants

as part of the regular grant, or by some other technique.

Nor do we now decide whether any flat grant system dis-

criminating against large families or families with older

children would be invalid. But cf. Westberry v. Fisher,

57a

F. Supp. ’ (D.. Me. 1969) (state regulation in-

valid if “faimilies with a large number of dependent chil-

- dren receive less favorable treatment. under Maine’s

AFDC program than-families with a small number of de-

pendent children’). All we need now decide is that. sec-

tion 402(a)(23) precludes a state from making changes

resulting in either a*reduced standard of need or a maxi-

‘mum on the amount of aid paid. Cf. 45 C.F.R: § 233.20(a)

- (2)(ii), 34 Fed. Reg. 1394 (1968) (consolidation of the

standard of need “may not result in a reduction in the con-

tent of the standard”’).. .

Defendants’ aati, already adverted to, that it may

adopt through administrative regulations-a method of re-

- placing special and cyclical grants by a purchase of service .

method, does not seem to: overcome deficiencies under the

federal program, or render the case unripe ‘for decision.

Section 402(a)(23) is addressed to “the amounts of aid

_ paid” under the AFDC program. Under that program

“aid to families with dependent children means money

payments with respect to... a dependent child or de-

pendent children.” 42 U.S.C. §-606(b) (emphasis sup-

plied). This aid must be adjusted by repricing under the

federal act and not by the purchase of services from ven-

dors. Purchase, with direct payment to vendors, does not

comply with the federal requirements and with HEW

regulations designed to protect the,“amounts of aid paid”

_ under the AFDC program. See HEW Handbook of Pub-

lie Assistance, Part IV, Section ‘5120 et seq.; 45. C.F.R.

233.20(a) (ii), 34 F.R. 1392 (1969). A state apparently may

‘not claim federal reimbursement for the provision by ven-

dor payments or purchase of service of “subsistence and

other assistance items” normally included in standard of

need unless the federal statute and regulations specifically.

es a -

58a

. so-provide. See. 42 U.S.C. §602(a)(13) and (14); 45

C.F.R. Parts 220 and 226 (34 Fed. Reg. January 28, 1969

and January 25, 1969) (child welfare, family planning and

other family services may be purchased; other’ services

must be provided by the agency itself).

The requirement that payments be in cash gives recog-

nition to the right to freedom of choice and to self-respect

by the recipient of welfare. Thus, the interpretation of

section 406(b) of the Act (42 U. S.C. § 406(b) in the HEW

Handbook reads as follows:

_ The provision that assistance shall be in the form of .

_ money payments is one of several provisions in the

act designed to carry out thé basic principle that as-

sistagce comes to needy persons as a right. The right

carries with it the individual’s freedom to manage

his affairs; to decide what yse of his assistance check .

will best service his interestS;\and to make his pur-

chases through the normal channéls of exchange, en-

joying the same rights and discharging the same

responsibilities as do friends, feighbors, and other

members of the community. ‘The Social Securit a

ents

ministration’s interpretation of “money pay

recognizes that a recipient of assistance does not, be-

cause he is in need, lose his capacity to select. how,

when, and whether each of his needs is to be met.

‘

VII. Conciusion

As a participant in the AFDC program, New York may

* not breach “its federally imposed obligation .to furnish

‘aid to families with dependent children * * * with reason-

able promptness to all éligible individuals * * *.’” King

v. Smith, 392 U.S..309, 333 (1968). The state’s plan “must

5a

conform with several requirements of the Social Security

Act.” Id. at 317. One of the federally imposed conditions

-—resulting from enactment of section 402(a) (23)—is ‘that

_ participating states not reduce either standards of need

‘. or levels of: benefit below thd8e in foree on January 2,

1968 as revised to reflect cost-of-living increases betweén

that date and J uly 1, 1969. Any “state law or regulation

inconsistent with stich federal terms and conditions is to

that extent invalid.” Jd. at 333, n. 34; Solman v. Shapiro,

—— F. Supp. —— (D. Conn. 1969); Westberry v. Fisher,

—— F. Supp. —— (D. Me. 1969) (invalidity of maximum

budget regulations) ;;Dews v. Henry, —— F. Supp. ——

‘T), Ariz. 1969) ; Williams v. Dandridge, — F. Supp. - —

(D. Md. 1968).

We do not hold that New York “must appropriate addi-

tional funds to support its participation”.in the AFDC

program. Williams v. Dandridge, —— F.Supp. —— (D.

Md. 1968). We hold only that if it participates it must

comply with federal law.

There is a substantial possibility that section 181-a of

the New York Social Services Law does reduce both stand-

ards of need and levels of payment in violation of federal

law. If this section is declared to be invalid-and irrevers-

ible steps to implement section 13l-a have been taken or

changes on actual payments pursuant to section 13l-a

have been made, irreparable harm to recipients of AFDC

will result. On balance, the probability of harm to plain-

tiffs from a failure to grant a preliminary injunction far

outweighs possible harm to the state in granting one. Ac-

cordingly, the parties will submit proposed orders ‘for -a

preliminary injunction by 4 :30 P.M, on Friday, May 16,

1969. The attorneys for the parties should be present in

chambers at that time .so that arrangements for further

proceedings can be made. .

EY Me rey sary

60a

VIII. Some Questions oF Facr

In preparation for the meeting in chambers, attorneys

should consider the questions of fact listed below and be

prepared to raise any additional issues they desire the

Court to consider. :

L.

What is the total average grant (recurring and spe-

‘cial) per family of each size?

(a) New York City

(b) New York State outside of New York City

- (c) New York State as a wnit

2.

3.

What is the average amount that a Baily of each size

receives in special grants?

(a) New York City |

(by) New York State outside of New York City

(c) New York State as a unit

What is the number of families of each'size receiving

AFDC assistance?

(a) New York City

(b) New York State outside of New York City

(c) New York State as a unit

4. What is the number of families of each size with an

oldest child above the mean for that size family?

(a) New York City

(b) New York State outside of New York City

(c) New York State as a unit

5.

10.

11.

6la

The same question as (4) as regards families of each

size with a child below the mean age.

What is the total number of families receiving in-

creased grants under section 13l-a (taking into ac-

count cyclical and special grants available under

present law)? What is the total dollar amount of the

increases? What is the average increase per family

(breken down into families of each size) ?

(a) New York ‘City

(b) New York State outside of New York City

(c) New York State as a unit

The same question as (6) as regards decreases.

Is it contemplated that any persons presen{ly eligible

as an AFDC recipient will be declared — for ~

‘such aid under section 131-a?

Why do the levels of payments in section 13l-a in-

crease by the same amount ¢ as the size of the family

increases?

What is the number of AFDC recipients in each of the’

‘counties comprising the present SA-1 schedule other

than the five New York City counties?

What effect will the new Food Stamp program have

on AFDC recipients?. Who will be eligible? Will it be

_ applicable throughout New York State?. When will

this information be available?

i a eT

¥ : errr

- .

12.

13.

14.

15.

16.

17.

18.

19.

62a

The same question as (11) as regards the Day Care

_ Center program.

What other programs, if any, are to be initiated or

expanded to meet AFDC needs?. When?

What amounts were appropriated in the budget passed ;

March 29, 1969 for each of the forms of categorical —

aid? |

What amounts were appropriated in the Supplemental

Budget passed May 2, 1969 for each of the forms of

categorical aid? |

How were the figures referred to in questions (14) and °

(15) determined, i.e., what statistical bases were em-_

ployed in reaching the final dollar amounts in each of

these categories?

What is the degree of flexibility available in transfer-

ring funds between different categories of aid adminis-

tered by the Department of Social Services?

What were the total dollar amounts appropriated in

the 1968-69 fiscal year for AFDC in (a) the Local

Assistance Fund Budget adopted in 1968, and (b) all

deficiency budgets adopted in the 1968-69 fiscal year?

Does the difference: of $23,684,000 between the pro-

posed budget and the budget actually adopted as re-

gards the AFDC appropriation represent administra-

tive savings or partial savings from the abolition of

special grants? What figures were used to answer this

question? , 7

20.

21. *

22.

23.

- 68a

What is the explanation for the additional reduction

of $42,000,000 in the AFDC appropriation in the Sup- -

plemental Budget and how will this reduction affect

payments to recipients?

Assuming the $42,000,000 was cut. from the May 2,

1969 Supplemental Budget in contemplation of in- |

creased federal aid: (a) will payments for AFDC con-

tinue at the pre-reduction rate foreseen by the March

29, 1969 budget, or will across-the-board reductions of

’ any type be made, and (b) what will be done if these’ _

increased federal benefits do not come into being?

Is there any legislative history supporting the claim

that the $42,000,000 reduction was in contemplation of.

increased federal benefits and, if so, is there any obli- ©

gation on the part of the New York Legislature to

make up the deficiency if these increased benefits are

not enacted?

What has been the general practice of the N ew York

Legislature when faceel with deficiencies caused by un-

anticipated federal failures to increase payments in

this and other areas?

Has there been any further correspondence between

the state and HEW regarding the AFDC program?

So ordered.

Dated: Brooklyn, New York

May 15, 1969

JacK B. WEINSTEIN

U.S.D.J.

PLE LET LEN IIT fA NIE HN Oy

Cat Kal ht al ONTIIER eng,

SREY Mow mete a

64a

APPENDIX E

Order of Hon. Jack B. Weinstein, District Judge,

dated May 16, 1969

Plaintiffs having moved this Court: pursuant to Rule 65

of the Federal Rules of Civil Procedure for a temporary

restraining order restraining defendant Wyman from im-

‘plementing and putting into effect the system of “maxi-’

mum monthly grants” and schedules of need prescribed -

by New York Social Services Law Section 131l-a, added by

Laws Ch. 184, March 31, 1969, and this motion having been

- considered by this Court: |

-.Upon the -pleadings, affidavits and briefs submitted on

behalf of the parties, the testimony. taken in open court,

and the hearings held to date; and upon the finding by this

Court that (1) substantial questions have been raised by

plaintiffs about the validity of said Section 131-a, insofar

as it effectnates a reduction in the grant levels of public —

assistance, which require further consideration by this

‘Court, and (2) New York, its subdivisions and recipients

of public assistance throughout the State of New York will

suffer irreparable injury if the preparations which are

made for implementation of said reductions will prevent

the continuation of grants at present levels if this Court

finds the reductions inv alid, it is

_ ORDERED, ADJUDGED AND DECREED. THAT, pending adjudica-

tion by this Court of the validity of the reductions in pub-

lic assistance effectuated by said Section 131-a:

1. Defendant Wyman, his successors in office, agents

and employees and all persons in active concert and par-

ticipation with them, including local social services officials

administering the Aid. to Families with Dependent Chil-

65a

dren program under State supervision (insofar as said

officials have actual notice of this injunction), are hereby

restrained from denying, reducing or discontinuing public

assistance benefits pursuant to said Section 131l-a. Bene- »

fits which may not be denied,. reduced or discontinued

under this order include both regular recurring grants and

special grants now available to public assistance appli-

cants and recipients (including the quarterly “flat grant”

in New York City and speciat needs grants throughout the

State). Applieations for’regular and special grants shall |

be processed in the ordinary course. of business without

_ delay or interruption and shall be granted to all persons

eligible under current standards despite any provision to

the contrary in said Section 131-a.

2. The defendant Wyman, his successors in office, agents

and employees, and all persons in active,concert and par-

ticipation with them, including local social services offi-

cials administering the Aid to Families with Dependent

Children program under State supervision (insofar as said

officials have actual notice of this injunction)’ may take

steps to prepare for conversion to the reduced grants on

July 1, 1969, provided. that no such step will prevent con-

tinued and uninterrupted payments under the present sys-

tem or some other valid system if Section 131-a is ulti-

mately, found invalid.

It is also ORDERED, ADJUDGED AND DECREED that this Tem-

porary Restraining Order shall expire ten days after entry

unless renewed by this Court.

Dated: Sabie, 3 New York, ey 12, 1969.

Jack B. ‘Wane,

U.S.D.J.

66a

APPENDIX F

Order of United States Court of Appeals for the |

Second Circuit, of June 11, 1969 Staying the

Injunction

The Attorney General having moved for stay of the pre-

liminary injunction issued by the district court on May 16,

1969, and due deliberation having been had thereon, it is

OrpereD that the said injunction be and, it hereby is

stayed pending disposition of the appeal. Opinions of the

Court will follow in due course.

——_*

/s/ | J. Epwarb LUMBARD

/s/ Pauw R. Hays

I dissent from the grant of the stay of Judge Weinstein’s

order.

/s/ Wirrep FEINBERG

June 11, 1969:

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