Appendix — Batterton v. Francis

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Supreme Court, UM |

75-1181 kiteD i.

@5-1182 ' f5i9 we |

IN THE

Supreme Court of the United States

OcTOBER TERM, 1975

Nos.

RICHARD A. BATTERTON, etc., ET AL., Petitioners,

ROBERT FRANCIS, etc., et AL., Respondents.

RICHARD A. BATTERTON, erc., er AL., Petitioners,

Vv.

BARRY BETHEA, etc., eT At., Respondents.

THE CHAMBER OF COMMERCE OF THE UNITED

STATES OF AMERICA, Petitioner,

ROBERT FRANCIS. et AL., Respondents.

APPLICATIONS FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CouRT OF APPEALS

For THE FOURTH CIRCUIT

PETITIONERS’ JOINT APPENDIX

a ee

GERARD C. SMETANA, FRANCIS B. BURCH,

WituiAM H. DuRoss, III, Attorney General of Maryland,

BorovskYy, SMETANA, EHRLICH One South Calvert Street,

& KRONENBERG, Baltimore, Maryland 21202,

2011 Eye Street, N.W., 383-3718

Suite 800 JoeL J. RABIN,

Washington, D. C. 20006, Assistant Attorney General,

Attorneys for Petitioner Tyeopore LosIN,

in No. Assistant Attorney General,

1100 North Eutaw Street,

Baltimore, Maryland 21201,

383-3508,

Attorneys for Petitioners.

in No.

The Daily Record Co., Baltimore, Md. 21202 >=

TABLE OF CONTENTS

Opinion of District Court in Francis v. Davidson

340 F. Supp 351 (Francis-J), filed January 28,

RRS LE Sa RE See RO, ORNS A Oe

Memorandum and Order of District Court, dated

RSE ISTE Ste oa

Memorandum and Order of District Court, filed

EP ISTERED SD a Ie TE

Transcript of Oral Opinion of District Court,

RRS on ome

Order of District Court, filed March 6, 1972 .....

Memorandum for the United States as Amicus

Curiae by the Solicitor General, August, 1972

Order of Affirmance by the Supreme Court 409

U.S. 904, October 16, 1972 ..................cccc000000..

Letter Opinion of District Court, December 10,

SEP cevdisstiillasintenattingiticstatiiiicteiesadbssdinitsanisidhietiambias

Memorandum Amicus Curiae of the Department

of Health, Education, and Welfare, February

RR ES SRT FIO

Opinion of the District Court in Francis uv.

Davidson, 379 F. Supp. 78 (Francis-IJ, of

RE SE Sar Leonel BTM. aoe

Opinion of the District Court in Bethea v. Mason,

384 F. Supp. 1274, filed November 27, 1974

Judgment Bethea v. Mason, filed December 12,

PUY alates libata pabiniited issn Mii

Order of dismissal by the Supreme Court, Mason,

etc., et al. v. Francis, 419 U.S. 1042, filed

SU Th <a Nd

PAGE

6la-2

Opinion by Court of Appeals F.2d, Francis v.

Mason, Bethea v. Batterton, decided Sep-

et TE TI | sisi ninsctnnintamiennstemeenteneenseomecss

Order of Supreme Court Extending Time to File

Petition for Writ of Certiorari, in Batterton v.

Francis, No. A-468, dated November 20, 1975

Order Extending Time to File Petition for Writ of

Certiorari, in Chamber of Commerce uv.

Francis, No. A-508, dated December 4, 1975

Judgment in case No. 74-1991, 74-1992, dated

Bamptermmbeeh BB, 19TG ..ccccccccoccesccesecsevsseccsccsccoseesees

Order granting Chamber of Commerce interven-

tion in Civil No. 71-853-K, dated January 31,

TE LIES SS TOL SEE ne eae aN Oe

Court of Appeals opinion, decided June 20, 1973

affirming denial of Chamber of Commerce's

intervention motion in Francis 1. .............00+

Pre-Hearing Memorandum of Chamber of Com-

merce in Civil No. 71-853-K ......... a. +

Motion for Intervention on Behalf of the

Chamber of Commerce ............cc::ecccceeeeeeeeeeeeees

Transcript of Proceedings in Francis II dated

April 26, 1974 (2 pages) ........cccccserreeeereeeeenees

Notice of Proposed Rule Making, 40 Fed. Reg.

33461, (August 8, 1975) ........ccccccsserreerecereeenees

Amendment to 223.100(a), 38 Fed. Reg. 18549

RRe BD. TIIID . cictinsentecivctpeerccssetcesszrencnesctenenignsese

Various Relevant Statutory Provisions (portions

of Social Security, Food Stamps, Railway

Retirement, and National Labor Relations

MA ii cpnictinidiicinniipeiltiddebinmesitigbaiinngnaccsatinres

PAGE

100a

104a

105a

106a

IN THE

Supreme Court of the United States

OCTOBER TERM, 1975

Nos.

RICHARD A. BATTERTON, erc., eT AL., Petitioners,

Vv.

ROBERT FRANCIS, etc., er Au., Respondents.

RICHARD A. BATTERTON, evc., et AL., Petitioners,

BARRY BETHEA, ervc., et Au., Respondents.

THE CHAMBER OF COMMERCE OF THE UNITED

STATES OF AMERICA, Petitioner,

ROBERT FRANCIS, et At., Respondents.

APPLICATIONS FOR A WRIT OF CERTIORARI TO THE

UNITED States Court or APPEALS

FOR THE FourtH CirRcuIT

PETITIONERS’ JOINT APPENDIX

In The United States District Court,

‘3 For The District of Maryland

Civil No. 71-853-K.

t F is, individually and on behalf of his

pecs tePrte yor x Ney Robert J. Francis, et al.

=! : idson, Secretary, Department of Employ-

et Bas oes Services, and Raleigh C. Hobson,

Director, Social Services Administration.

t of Health, Education & Welfare, the U. S.

yt i pee wean the Maryland State Chamber

of Commerce, and the Chamber of Commerce

of Metropolitan Baltimore, Amici Curiae.

January 28, 1972

Frank A. Kaufman, District Judge.

This case involves constitutional and other issues

arising in connection with the administration of the

AFDC-E program. Plaintiffs are fathers, who, on

' -E (sometimes known as AFDC-UF, the UF

eae oon loyed fathers v. the E for employment or

employed) is the a4 commonly-used reference label for a

program established by the Congress in 1961 pursuant >

U.S.C. § 607, providing aid for children in a family in whic

the father is unemployed. Prior to the enactment of that

statute, there had been in existence a program known as

AFDC pursuant to 42 U.S.C. §§ 601-606 under which aid was

made available for children in families in which the father

was absent from the home, incapacitated or dead. See King v.

Smith, 392 US. 309, 88 S. Ct. 2128, 20 L. Ed. 2d 1118 (1968).

That program was continued in effect after the establishment

of the AFDC-E program. Since 1961, the two programs ae

run side by side. Both depend upon a combination of —

and state funds and are administered by the states under

behalf of themselves and others similarly situated,

allege that benefits under that program have been

denied to their respective children by the Department of

Employment and Social Services of the State of

Maryland under Rule 200.X.A. (2) of that Department,’

in violation of (a) 42 U.S.C. §607' and 45 C.F.R.

§ 233.100(a),* and (b) the Fourteenth Amendment of the

Federal Constitution. Defendants, named in their

individual and representative capacities, are, respec-

tively, the Secretary of the Maryland Department of

Employment and Social Services and the Director of the

Maryland Social Services Administration, a division of

that Department.° HEW has submitted its views with

regard to the issues in this case, pursuant to the request

of this Court addressed to that agency in accordance

with the strong policy suggestion stated by the Supreme

Court of the United States in Rosado v. Wyman, 397

U.S. 397, 90 S. Ct. 1207, 25 L. Ed. 2d 442 (1970).° The

regulations promulgated by the Department of Health,

Education and Welfare (HEW) pursuant to statutory author-

ity delegated to HEW by the Congress.

The history of AFDC is discussed in Dandridge v.

Williams, 397 U.S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970),

and in Rosado v. Wyman, 397 U.S. 397, 90 S. Ct. 1207, 25 L.

Ed. 2d 442 (1970). All states participate in AFDC. The history

of AFDC-E is set forth in Macias v. Finch, 324 F. Supp. 1252

(N.D. Calif. 1970). Twenty-two states and the District of

Columbia presenily participate in AFDC-E.

* See n. 14 infra.

* See n. 10 infra.

* See n. 12 infra.

* During the pendency of this case, Raleigh C. Hobson

resigned as the Director of the Social Services Administra-

tion and his replacement, Dr. Irene Olson, automatically

became a party defendant herein in his place and stead

pursuant to Federal Civil Rule 25(d)(i).

® Whenever possible the district courts should obtain the

views of HEW in those cases where it has not set forth its

views, either in a regulation or published opinion, or in cases

where there is a real doubt as to how the Department’s

standards apply to the particular state regulation or pro-

gram.

Rosado v. Wyman, supra at 407-408, 90 S. Ct. at 1215

(footnote omitted).

United States Chamber of Commerce and the Chamber

of Commerce of Metropolitan Baltimore were permitted

to file amicus briefs and to take part in oral argument.’

Robert Francis, one of the two original plaintiffs in

this case, became out of work on July 1, 1971 when the

union, of which he was a member, called a strike at the

plant at which he was working. The other original

plaintiff, Franklin Wilkens, was discharged from his

employment on June 22, 1971 because of gross miscon-

duct. Wilkens subsequently obtained new employment

and withdrew his compiaint herein. At the time of

Wilkens’ withdrawal, Edward Wright was granted

leave to become a plaintiff herein.* Wright’s employer

discharged him on May 12, 1971 for alleged gross

misconduct (excessive absenteeism). Both Francis and

Wright (as well as Wilkens during the period he was out

of work) applied for and were denied AFDC-E benefits

by the Department of Social Services of the City of

Baltimore. Wright is still out of work. Francis went

back to work on September 10, 1971 when the strike

which had been called by his union ended.

In the 1961 legislation originating the AFDC-E

program, the term “dependent child” was defined in 42

U.S.C. §607(a), Pub. L. No. 87-31, §407, 75 Stat. 75

(1961), to include “a needy child” under the age of

7 The United States Chamber of Commerce, which sought

leave to intervene herein as a party under Federal Civil Rule

24(b), was given the opportunity, both in written and oral

argument, to present its contentions inst the background

of proffered facts which the national Chamber stated it stood

seady to prove if permitted to intervene as a party. In this

opinion, this Court assumes, arguendo only, the correctness

of those proffered facts, and for that reason, without

determining whether such intervention would, in the words

of Rule 24(b), unduly delay or prejudice the adjudication of

the rights of the original parties,” concludes that there is no

reason to permit the same and accordingly hereby denies the

said application to intervene.

8 The two original rgemays Wilkens and Francis, as well

as the plaintiff Wright, were permitted to proceed in forma

pauperis after filing affidavits indicating their lack of-funds

and property.

eighteen “who has been deprived of parental support or

care by reason of the unemployment (as defined by the

State)” of a parent, and who is living with any of his

relatives “in a place of residence maintained by one or

more of such relatives as his (or their) own home.”

(Emphasis added). In 1968, Congress enacted extensive

amendments and, inter alia, replaced the word “parent”

_ with the word “father,” replaced the above italicized

parenthetical words with the words “as determined in

accordance with standards prescribed by the Secre-

cl and added 42 U.S.C. §607(b), providing as

ollows:

The provisions of subsection (a) of this section

shall be applicable to a State if the State’s plan

approved under section 602 of this title—®

(1) requires the payment of aid to families with

dependent children with respect to a dependent

nar as defined in subsection (a) of this section

when—

(A) such child’s father has not been employed (as

determined in accordancé with standards pres-

cribed by the Secretary) for at least 30 days prior to

the receipt of such aid. [Emphasis added.]!°

® 42 U.S.C. §602 provides that each state shall have the

right to submit its own plan for the administration of its

AFDC-E program, provided same meets the standards of the

statute. Congress is not required to provide funds to a'state

without such a program. King v. Smith, supra; Carroll v.

Finch, 326 F. Supp. 891 (D. Alaska 1971); Woolfolk v. Brown,

325 F. Supp. 1162, 1170-1171 (E.D. Va. 1971); Cooper v.

Laupheimer, 316 F. Supp. 264, 268 (E.D. Pa. 1970). Nor is a

state required to have an AFDC-E program. Henry v. Betit,

323 F. Supp. 418 (D. Alaska 1971).

All references in this opinion to the “Secretary” are to the

Secretary of HEW, except to the extent that there is specific

reference to the Secretary of the Department of Employment

and Social Services of the State of Maryland.

10 42 U.S.C. § 607, in its entirety, as amended in 1968 and

as tly in force and effect, is set forth in Appendix A. In

addition to the amendments enacted by the Congress in 1968,

certain other amendments, not material herein, have been

made to 42 U.S.C. §607 since the inception of the AFDC-E

program.

—

After the 1968 statutory amendments by the Con ’

the Secretary of HEW promulgated, as 45 FR.

§ 233.100(a), a regulation, providing, inter alia, that “[i}f

a State wishes to provide AFDC for children of

unemployed fathers, the State plan * * * must, except

as specified in paragraph (b) of this section!! * * *

fiInclude a definition of an unemployed father * * *

[and] shall include any father who is employed less

than 30 hours a week, * * *12

'! The exceptions set forth in (b) are not material herein.

'? Effective October 1, 1971, the Secretary amended the

regulation to substitute “100 hours a month” for “30 hours a

week.” 36 Fed. Reg. July 21, 1971.

That regulation also requires that any such plan shall

provide for payments only if the “father has been unem-

ployed for at least 30 days prior to the receipt of such aid

and only if the “father has not without good cause, within

such 30-day period prior to the receipt of such aid, refused a

bona fide offer of employment or training for employment

and only if the “father (a) has six or more quarters of work

o's (The regulation states that “[a] ‘quarter of work’ with

respect to any individual means a period * * * in which he

received earned income of not less than $50 a within

any 13-calendar-quarter period ending within 1 year prior to

the application sd such aid, or (b) — — l-year meee

received unemployment compensation under an unemploy-

ment coins law of a State or of the United States, or

was qualified * * * for such compensation under the State’s

unemployment compensation law.” The regulation further

provides that “{ajn ee pose be fey aod eee

unemployment compensation un e 8 unemploy-

ment pre bemnedior ms law if he would have been eligible to

receive such benefits upon filing Mgr y or he performed

work not covered by such law which, if it had been covered,

would (together with any covered work he rmed) have

made him 1 ampee to receive such ts upon

application.” The regulation specifically calls for ‘the

of * * * aid * * * lif, and for as long as, such child’s father is

not currently registered with the public employment offices in

the State, and [w]ith respect to any week for which such

child’s father receives unemployment compensation under an

unemployment compensation law of a State or of the United

States.”

45 C.F.R. §233.100(a), 34 Fed. Reg. 1146 (1969), as

continuously in force and effect since 1969, is set forth in

Appendix B.

Section 6 of Maryland’s Unemployment Insurance

Law, Md. Ann. Code art. 95A, § 6 (1969 Repl. Vol.), sets

forth certain disqualifications for benefits and provides,

inter alia, that an individual shall be disqualified for

benefits when he is discharged for “gross misconduct”

(section 6(b)), and when the Executive Director finds

that “his unemployment is due to a stoppage of work,

other than a lockout, which exists because of a labor

dispute * * * [emphasis added ].”’!3

Rule 200.X.A. of the Social Services Administration,

Department of Employment and Social Services, of the

State of Maryland, denies AFDC-E aid if the father is

“disqualified for unemployment insurance.’”’!4

[1, 2] Plaintiffs, on behalf of themselves and others

similarly situated, seek injunctive and declaratory relief

as well as damages in the form of the payment of

pursuant to Rule 200.X.A."5 Because injunctive relief is

sought, inter alia, restraining state officials “from the

enforcement, operation and execution of a statewide

regulation on the ground of its unconstitutionality,”

King v. Smith, 392 U.S. 309 n. 3, 88 S. Ct. 2128, 2130, n.

3, 20 L. Ed. 2d 1118 (1969), and because those

allegations of unconstitutionality are not so frivolous or

13 Md. Ann. Code art. 95A, §6 is set forth in Appendix C.

‘* Rule 200.X.A. provides, in rt, as follows: .

A grant may not be paid foes GPA or AFDC-E:

* *

* * * *

2. To meet need due to being disqualified for unemploy-

ment insurance.

‘8 While exhaustion is not required in actions brought

under 42 U.S.C. nang and 28 U.S.C. § 1343, “where the

constitutional enge is sufficiently substantial, as here, to

require the convening of a three-judge court,” King v. Smith,

supra at 312 n..4, 88 S. Ct. at 2131 n. 4, plaintiffs herein have

in fact exhausted their state administrative remedies.

Plaintiffs assert jurisdiction in this case pursuant to

28 U.S.C. § 1343(3)'6 and (4),!7 which are jurisdictional

counterparts of 42 U.S.C. §1983,'* the violation of -

which is alleged by plaintiffs. In a concurring opinion

in Hague v. C.I.0., 307 U.S. 496, 59 S. Ct. 954, 83 L. Ed.

1423 (1939), Mr. Justice Stone wrote (at 531, 59 S. Ct. at

971) that section 1343(3) applied “whenever the right or

immunity is one of personal liberty, not dependent for

its existence upon the infringement of property rights.”

In Weddle v. Director, Patuxent Institution, 436 F.2d

342, 343 (4th Cir. 1970), Judge Winter, noting his

acceptance of Judge Friendly’s analysis in Eisen v.

Eastman, 421 F.2d 560 (2d Cir. 1960), held that

“{wjhere, as here, the infringement is one solely of

property rights, § 1331 is the applicable jurisdictional

statute, and jurisdiction may be sustained only upon

16 28 U.S.C. § 1343(3) and (4) provides:

The district courts shall have original jurisdiction of

any civil action authorized by law to be commenced by

any person:

* * * * * *

(3) To redress the deprivation, under color of any State

law, statute, ordinance, regulation, custom or usage, of

any right, privilege or immunity secured by the Constitu-

tion of the United States or by any Act of Congress

providing for equal rights of citizens or of all persons

within the jurisdiction of the United States;

(4) To recover damages or to secure equitable or other

relief under any Act of Congress providing for the

protection of civil rights, including the right to vote.

17 See n. 20 infra.

8 42 U.S.C. § 1983 provides:

Every person who, under color of any statute,

ordinance, regulation, custom, or usage, of any State or

Territory, subjects, or causes to be subjected, any citizen

of the United States or other person within the

jurisdiction thereof to the deprivation of any rights,

privileges, or immunities secured by the Constitution

and laws, shall be liable to the party injured in an action

at law, suit in equity, or other proper proceeding for

satisfaction of the amount in controversy requirement

{footnote omitted].”%* See alsc Garren rg City of

ee North Carolina, 439 F.2d 140 (4th Cir.

_In King v. Smith, supra, the Supreme Court declared

invalid as inconsistent with certain provisions of the

Social Security Act, Alabama’s “substitute father”

“the statutory route” followed by the majority of the

Court, Mr. Chief Justice Warren, for the majority, wrote

(at 313 n. 3, 88 S. Ct. at 2131):

We intimate no views as to whether and under

what circumstances suits challenging state AFDC

Provisions only on the ground that they are

inconsistent with the federal statute may be

brought in federal courts.

In Eisen v. Eastman, supra, 421 F.2d at 564, Judge

visit her on weekends.”

In Rosado v. Wyman, 397 U.S. 397, 90 S. Ct. 1207, 25

L. Ed. 2d 442 (1970), in which a New York statute was

held to have defined a standard of need for AFDC

yments in violation of the federal statutory standard,

Mr. Justice Harlan (at 405 n. 7, 90 S. Ct. at 1214) did not

~* In Weddle, an inmate in an institution all custodial

officers had taken several items of his sesvaunl poenauee

10a

reach the issue posed by Mt. Justice Stone’s formula in

Hague, stating:

Since we conclude that the District Court

properly exercised its pendent jurisdiction, we have

no occasion to consider whether, as urged by

petitioners, this statutory claim satisfies the

$10,000 amount-in-controversy requirement of the

general federal jurisdiction provision, 28 U.S.C.

§ 1331, or whether it could be maintained under 28

U.S.C. §1343(3), which contains no amount-in-

controversy limitation, as an action “[t]o 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. . . .” See King v. Smith, 392 U.S., at 312 n.

3, [88 S. Ct. 2128, 20 L. Ed. 2d 1118] see generally

‘ Note, Federal Judicial Review of State Welfare

‘ Practices, 67 Col. L. Rev. 84 (1967).

On the same day as Rosado was decided, the Supreme

Court in Dandridge v. Williams, 397 U.S. 471, 90 S. Ct.

1153, 25 L. Ed. 2d 491 (1970), held valid and non-

violative of equal protection principles Maryland’s

placing of a dollar limit per month upon AFDC grants

without regard to need or to size of family. In so doing,

while the Supreme Court reversed the three-judge

district court’s contrary determination on the merits, it

took no issue with the district court’s holding that

“(jurisdiction is properly invoked under Civil Rights

Act, 28 U.S.C.A. §1343(3) and (4), and 42 U.S.C.A.

§ 1983 * * *.” Williams v. Dandridge, 297 F. Supp. 450,

453 (D. Md, 1968). Earlier in Lewis v. Martin, 397 U.S.

552, 90 S. Ct. 1282, 25 L. Ed. 2d 561 (1970), the Su e

Court held a California welfare ion invalid upon

statutory grounds without indicating any doubts as to

the existence of jurisdiction. And earlier, in a per

curiam opinion in Shapiro v. Solman, 396 U.S. 5, 90 S.

Ct. 25, 24 L. Ed. 2d 5 (1969), the Supreme Court affirmed

a three-judge district court opinion, 300 F. Supp. 409 (D.

Conn., 1969), in which a Connecticut welfare practice

was invalidated upon statutory grounds and in which

section 1343(3) jurisdiction held to exist. Most

recently, in Townsend v. Swank, 404 U.S. 92 S. Ct.

lla

502, 30 L. Ed. 2d 448 (1971), reversing the judgment

below for defendants in Alexander v. Swank, 314 F.

Supp. 1082 (D. Ill. 1971), the wiT-ri Court, in

consideri a challenge under 42 U.S.C. §1983 to

Illinois’ AFDC program on the grounds that the latter

was inconsistent with federal law and this void under

the Supremacy Clause, and was also violative of equal

protection principles, raised no question concerning the

assumption of jurisdiction by the court below and

reversed on the ground that the Illinois statute and

regulation conflicted with federal law and were invalid

under the Supremacy Clause. Mr. Justice Brennar

wrote that the Court therefore did not reach the equal

protection issue (92 S. Ct. at p. 508). However, he did

note (at p. 508 of 92 S. Ct.) that “we think there is a

serious question whether the Illinois classification can

withstand the strictures of the Equal Protection

Clause.” Concurring, Mr. Chief Justice Burger stressed

that in his opinion the ey omy tery inquiry in we bine

should be simply whether the State has indeed adhered

to the provisions [of the federal statute] and is

accordingly entitled to utilize federal funds in support

of its program. Cf. Rosado v. W , 397 U.S. 397, 420

90 bg — 1207, 25 L. Ed. 2d 442] (1970).” (at p. 508 of 92

In Tichon v. Harder, 438 F.2d 1396 (2d Cir. 1971),

Judge Anderson, in a case involving i e of a

=e wegen employee of Connecticut’s ent of

elfare, wrote (at 1399): “It is apparent, however, as

Eisen recognized, that some classes of cases are not

readily characterized as involvi either rights of

personal liberty or rights but take on charac-

teristics of both. Cases ing the procedures used

in a di fro blic emp ent are such a

Circuit held (at 1402) that

i bsence of a clear, immediate and substantial

impact on the employee’s reputation which effectively

such facts does seem to tip the scales

towards the personal liberty side of the equation and to cause

Beg (3) jurisdiction to be present. Birnbaum v. Trussell, 371

12a

involved” (footnote omitted), and also commented (at

1400) that “unlike welfare recipients, who exist at a

bare subsistence level, it cannot be said that an

employee’s rights to the profits from his job entail ‘some

sort of right to exist in society.’ Johnson v. Harder, 438

F.2d 7 (2 Cir. 1971).”

Johnson v. Harder, supra, involved a challenge to

Connecticut’s action in reducing AFDC payments to a

mother with ten children by the amount of Old Age,

Survivors and Disability Insurance benefits payable to

two of the children because of the death of their father.

Writing (438 F.2d at 12) that “{s}ince welfare cases by

their very nature involve people at a bare subsistence

level, disputes over the correct amounts payable are

treated not merely as involving property rights, but

some sort of right to exist in society, a personal right

junder the Stone formula” (footnote omitted), and

, distinguished McCall v. Shapiro, 416 F.2d 246 (2d Cir.

1969), in which a Connecticut welfare regulation was

challenged on appeal only upon statutory grounds and

in which section 1343 jurisdiction was held lacking,

Judge Smith, for himself and Chief Judge Lumbard and

Judge Anderson, held (438 F.2d at 12) that “so long as a

colorable constitutional claim has been raised, jurisdic-

tion will properly lie.” Holding the constitutional claim

before it not to be insubstantial, the Court in Johnson v.

Harder, supra, filed after the Supreme Court’s opinion

in Dandridge v. Williams, supra, held the constitutional

(equal protection and due process) claims before it not

“to be insubstantial in the light of the recent Supreme

Court AFDC cases” (438 F.2d at 13).

Just a few days ago, in Russo v. Kirby, 453 F.2d 458

(2d Cir. 1971), Judge Hays, writing for himself and

Judges Moore and Mulligan, in a class action case in

which the district court had granted a ray vrs

injunction on the ground that the New York Social

Services Law’s provision prohibiting the granting of

welfare benefits to strikers infringed federal rights of

the plaintiff-claimants, reversed the judgment of the

district court below holding that no individual claim of

any one plaintiff exceeded $10,000, that aggregation of

claims was impermissible under Snyder v. Harris, 394

13a

U.S. 332, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969), that “no

colorable constitutional claim is presented,” citing

Dandridge v. Williams, supra, as dispositive of the

equal protection contention, and that accordingly no

federal jurisdiction existed under 28 U.S.C. § 1343 or

under 28 U.S.C. § 1337.19

Less than two years earlier, Judge Hays, concurring

specially in a three-judge district court case, in

McClellan v. Shapiro, 315 F. Supp. 484, 494 (D. Conn.

1970), ex similar views in stating his disagree-

ment with the majority’s assumption of jurisdiction in a

suit challenging the validity of Connecticut’s definition

of a “dependent child” in its AFDC program. Judge

Blumenfeld, for the majority, held the Connecticut

statute to be valid, after first determining at the

threshold, in disagreement with Judge Hays, that

jurisdiction was present under the authority of Judge

Friendly’s suggested reading of King v. Smith, supra, in

Eisen v. Eastman, supra.

In Roberge v. Philbrook, 313 F..Supp. 608 (D. Vt.

1970), Judge Leddy, after reviewing in epth, inter alia,

Rosado v. Wyman, King v. Smith, Eisen v. Eastman, as

well as numerous other federal court opinions rendered

in jurisdictions outside the Second Circuit, held section

1343(3) jurisdiction to be present in a welfare case. In

Henry v. Betit, 323 F. Supp. 418 (D. Alaska 1971), the

Court, after referring to King v. Smith, Dandridge v.

Williams, Eisen v. man, McCall v. Shapiro, and

McClellan v. _—— also concluded that it had

jurisdiction. In ition, see Caulder v. Durham

Housing Authority, 433 F.2d 998 (4th Cir. 1970), in

which the Fourth Circuit, in a post-Weddle opinion

in connection with a procedural due process

attack upon certain replevin procedures.

198 See n. 20 infra.

l4a

[3, 4] While it is the understatement of the new year

1972 to say that the matter is not free of doubt, this

Court, in the absence of any clear guidance from the

Supreme Court or from the Fourth Circuit, adopts the

approach followed in Johnson v. Harder, supra, and

holds that the alleged deprivation of AFDC-E benefits

in this case constitutes ai: allegation of infringement of

personal liberties and that the constitutional equal

protection contentions advanced by plaintiffs herein,

while rejected, are not frivolous. “{WJhether the com-

plaint states a cause of action on which relief could be

granted * * * must be decided after and not before the

court has assumed jurisdiction over the controversy,”

Bell v. Hood, 327 U.S. 678, 682, 66 S. Ct. 773, 776, 90 L.

Ed. 939. (1946). Once having assumed jurisdiction

because of the constitutional challenge, this Court

believes that whether or not jurisdiction would other-

wise exist, it should continue to assert its jurisdiction

and proceed to resolve the issues herein involving

_ federal statutes and federal regulations. The views

stated by Mr. Justice Harlan in Rosado v. Wyman,

supra, 397 U.S. at 402-403 and 422-423, 90 S. Ct. 1207, 25

L. Ed. 2d 442, and by Mr. Chief Justice Warren in King

v. Smith, supra, would appear so to teach.2°

20 This Court thus finds it unnecessary to determine if

jurisdiction also exists in this case under 28 U.S.C. § 1343(4),

or whether the Hague-Eisen-Weddle distinction applies in

connection with § 1343(4) as well as § 1343(3). For opinions in

which those two subsections have been, on the one hand,

seemingly considered as one, and, on the other hand, as

constituting separate jurisdictional bases, see, e. g., Dale v.

Hahn, 440 F.2d 633, 641 (2d Cir. 1971); Eisen v. Eastman, 421

F.2d at 562 n. 2; McCall v. Shapiro, supra; Roberge v.

Philbrook, 313 F. Supp. at 614-615 n. 7. Nor does this Court

reach the question of whether jurisdiction is present herein

under 28 U.S.C. § 1337 which provides:

The district courts shall have original jurisdiction of

_any civil action or proceeding arising under any Act of

Congress regulating commerce or protecting trade and

commerce against restraints and monopolies.

In Russo v. Kirby, supra, Judge Hays held jurisdiction under

§ 1337 did not attach because the case did not arise “directly”

under federal law. Cf. Barlow v. Marriott Corporation, 328 F.

15a

II.

[5, 6] Originally, in their complaint, plaintiffs asked

is Court to permit this proceeding to take place as a

class action under Federal Civil Rule 23(a) and (b) (2).

During oral argument, counsel for plaintiffs stated

agreement with a position sugg by this Court,

namely, that if this Court should determine that it has

nu power to award damages in this case, there would be

no need to form a c!=ss herein. Nevertheless, there may

be reason to form t..: class herein. in order to avoid the

possibility of mootness in view of the fact that the

plaintiff Francis has returned to work (see p. 355 supra).

See Doremus v. Board of Education, 342 U.S. 429, 72 S.

Ct. 394, 96 L. Ed. 475 (1952); and Troy State University

v. Dickey, 402 F.2d 515 (5th Cir. 1968). See also SEC v.

Medical Committee for Human Rights, 404 U.S. a

S. Ct. 577, 30 L. Ed. 2d 560 (1972); Barrows v. Jackson,

346 US. 249, 257 n. 3, 73 S. Ct. 1031, 97 L. Ed. 1586

(1953); Smith v. Board of Education, 365 F.2d 770, 776

(8th Cir. 1966). While this Court recognizes that the

. . . ‘

principles of mootness, see

ITT Lamp Division v. Minter, 435 F.2d 989, 991 (ist

Cir.), cert. denied, 402 U.S. 933, 91 S. Ct. 1526, 28 L.

2d 868 (1971), reh. denied, 404 U.S. 874, 92 S. Ct. 27

L. Ed. 2d 120; Jenkins v. United Gas Corp., 400 F.

(5th Cir. 1968), i

rather i

Rule 23(b) (2), by determines that this action

be maintained as a class action on behalf

separate subclasses, namely, (1) those who have i

unsuccessfully for AFDC-E benefits and have

involved in a labor dispute and (2) those who have also

Seek

RIES

has this Court found any cases other than Russo in which

plaintiffs have a state welfare statute or

tion as violative of rights allegedly created by

statutes or tions and in which jurisdiction has been

suggested § 1337.

16a

so applied and have been so denied because they have

been discharged by their respective previous employers

for misconduct. In so determining, this Court finds that

each of the said two classes is so numerous that joinder

of all members is impractical; there are questions of law

and fact common to the members of each of the said

two classes; the claims of the respective parties herein

are typical of the claims of all members of the class to

which those representatives respectively belong; the

representative parties will fairly and adequately protect

the interests of the class; and counsel for the named

plaintiffs have most diligently and competently repres-

ented the interests of the members of the two sub-

classes. Because the classes are designated pursuant to

Rule 23(b) (2), no notice is stauioas ‘er Rule 23(c) (2).

ile, in some instances, notice to each member of the

class may be required in order to avoid violation of due

process principles, in this case, this Court, under the

' circumstances, holds that notice need not be given to

each member of the two classes. If any retroactive

payments are required (see the discussion at p. 371,

infra), this Court has confidence that the federal and

Maryland authorities will take appropriate steps to

inform all persons entitled to such benefits of their

rights thereto. For a discussion of notice requirements

in class suits pursuant to Federal Rule 23, see, on the

one hand, Johnson v. Georgia Highway Express, Inc.,

417 F.2d 1122 (5th Cir. 1969); Northern Natural Gas Co.

v. Grounds, 292 F. Supp. 619, 636 (D. Kan. 1968), as

contrasted with Eisen v. Carlisle and Jaccuelin, 391

F.2d 555 (2d Cir. 1968). See also 3B J. Moore, Federal

Practice, 92355 at 1152-53 (2d ed. 1969), favoring the

views expressed in the first two cases that notice in a

Rule 23(b) (2) case is not always required.

—_— —

(7, 8] In Dandridge v. Williams, supra, 397 U.S. at

478, 90 S. Ct. at 1158, 25 L. Ed. 2d 491, Mr. Justice

Stewart wrote:

*** In King v. Smith, supra, we stressed the

State’s “undisputed power,” under these provisions

of the Social ity Act, “to set the level of

benefits and the standard of need.” Id. at 334. [20

L. Ed. 2d at 1135] * * * We described the AFDC

17a

enterprise as “a scheme of cooperative federalism”,

id. at 316 [20 L. Ed. 2d at 1125] * * *, and noted

carefully that “{tJhere is no question that states

have considerable latitude in allocating their

resources, since each State is free to set its

own standard of need and to determine the level of

benefits by the amount of funds it devotes to the

program.” Id. at 318-319 [20 L. Ed. 2d at 1126]* * *.

Those comments would seem to apply with equal force

to the AFDC-E program. In Dandridge, Mr. Justice

Stewart, pas for a unanimous Court and holding

that Maryland’s administrative practice which imposed

an ro ga limit on the total amount of money any one

family unit might receive under the AFDC program, did

not violate the Equal Protection Clause and was not in

— with any provision of the Social Security Act,

O wrote:

In the area of economics and social welfare, a

State does not violate the Equal Protection Clause

merely because the classifications made by its laws

are imperfect. If the classification has some

“reasonable basis,” it does not offend the Constitu-

tion simply because the classification “is not made

with mathematical nicety or because in practice it

ee iieay some inequality.” * * * [at 485, 90 S. Ct.

at 1

We do not decide today that the Maryland

regulation is wise, that it best fulfills the relevant

social and economic objectives that Maryland

might ideally espouse, or that a more just and

humane system could not be devised. Conflicting

claims of morality and intelligence are raised by

opponents and proponents of almost every mea-

sure, certainly including the one before us. But the

intractable economic, social, and even philosophi-

cal problems presented by public welfare assist-

ance are not the business of this Court. The

Constitution may impose certain proced safe-

guards upon of welfare administration.

Goldberg v. Kelly 397 U 8. 254 [90 S. Ct. 1011, 25 L.

18a

Ed. 2d 287] [1970]. But the Constitution does not

empower this Court to second-guess state officials

charged with the difficult responsibility of allocat-

ing limited public welfare funds among the

myriad of potential recipients. [citations omitted ]

[at 487, 90 S. Ct. at 1162].

See also Richardson v. Belcher, 404 U.S. 78, 92 S. Ct.

254, 30 L. Ed. 2d 231 (November 22, 1971).

In this case, plaintiffs urge that Maryland’s Rule

200.X.A.(2) discriminates without rational basis against

certain children. whose fathers happen to be out of work

use of their own misconduct which justified their

discharge by their employer, or because of a labor

dispute. Plaintiffs stress the need to focus upon the

welfare of each child and to disregard other factors

determinations of the type underlying the two applica-

tions of Maryland Rule 200.X.A.(2) which are chal-

lenged herein, and that it is not up to the courts to

the state and local Chambers of Commerce, as amici

herein, urge this Court to hold the Maryland Rule,

denying AFDC-E benefits to children of fathers out of

work because of involvement in labor disputes, valid

we em ee ee

19a

ITT Lamp Division v. Minter, 435 F.2d 989 (ist Cir.),

cert. denied, 402 U.S. 933, 91 S. Ct. 1526, 28 L. Ed. 2d

868 (1971), pet. for reh. denied 404 U.S. 874, 92 S. Ct. 27,

30 L. Ed. 2d 120, in which the Massachusetts AFDC-E

program, which permits aid to fathers out of work

use of involvement in labor disputes, was held not

in conflict with any federal statutes. HEW, in its

constitutionally permitted to follow both of the two

Maryland practices under attack in this case, or

practices contrary and opposite thereto. This Court

believes that the HEW position is sound.

rational bases exist for Maryland’s sition denying

AFDC-E benefits to children of fathers who are out of

22 The State of Maryland, in a meriorandum filed in this

case, has set forth the following “separate, although

somewhat related, bases upon which the Rule may

justified:”

1. To harmonize the State’s unemployment compensa-

tion program and its AFCD-E program, both such

the Social Act.

”, To discourage cence ol unemployment and there-

by to promote employment in te

largest measure of neutrality in collective

and strikes, so as not to incur the risk of y

20a

protection challenge to Maryland’s denial of benefits to

such fathers must be rejected.

Nor has the Congress, by the enactment of labor laws

having national scope, in any way, by the terms of

those statutes or otherwise, indicated that those laws or

the policies underlying them are intended to control the

resolution of those opposing viewpoints of social

welfare which underlie the differences between the

Maryland and the contrary rules relating to the grant

or denial of -E benefits to those out of work

use of involvement in labor disputes. In Minter, 435

F.2d at 992-993, Judge Coffin has written:

* * * Where Congress has not clearly manifested

‘Its purpose to exclude state action which takes the

form of exercise of its historic police powers, such

State action will not be invalidated under the

Supremacy Clause, “in the absence of persuasive

reasons”, Florida Lime & Avocado Growers, Inc. v.

Paul, 373 U.S. 132, 142 [83 S. Ct. 1210, 10 L. Ed. 2d

248] (1963), or unless the administration of the

| State law “palpably infringes” upon the federal

policy. Southern Pac. Co. vy. Arizona ex rel.

Sullivan, 325 U.S. 761, 766 (65 S. Ct. 1515, 89 L. Ed.

1915] (1945). See also Head v. New Mexico Bd. of

Examiners, 374 U.S. 424 [83 S. Ct. 1759, 10 L. Ed.

2d 983] (1963); Buck v. California, 343 U.S. 99 [72 8S.

Ct. 502, 96 L. Ed. 775] (1952). [Footnote omitted. ]

Judge Coffin’s statement, written in the context of

labor disputes, would seem equally applicable with

regard to the attack under the Supremacy Clause upon

Maryland is the only state” which “conditions eligibility for

AFDC-UF [see n. 1 supra] on eligibility for unemployment

compensation,” but that the questionnaire HEW has ad-

such restrictions, and there is, therefore, at least a possibility

that similar provisions exist in other state AFDC-UF plans.”

The State of Maryland has furnished information to this

Court which may indicate that at least one other state may

not permit strikers to register for the retaining and/or

or oF foe which is a condition precedent to the grant of

AFDC-E benefits.

2la

Maryland’s denial of aid to children of fathers dis-

charged from their last employment because of miscon-

duct. And the reasons which require rejection of the

equal protection challenge upon denial of aid in

misconduct. Accordingly, the constitutional challenge

stated by plaintiffs is rejected, in toto.23

Plaintiffs also contend that the Maryland Rule is in

conflict with the federal statute and the HEW regula-

*° Having so disposed of the consitutional attack, this

three-judge court could dissolve itself and return the question

with regard to the non-constitutional issues, this three-judge

court, in view of the importance of the issues set forth herein,

p ae lve itself and to reach, as a three-

0 v. Wyman, 397 U.S. supra at 403, 90 S. Ct. at 1213,

Mr. Justice Harlan, approving the dissolution of a three-

. e district court where a constitutional claim had been

moot, wrote

Y Even had the constitutional claim not been

moot, most appropriate course may well

have been to remand to e single district judge for

judge court have nomi three of the members of this three-

federal regulation, other than

not apply to fathe

olvement in a labor

fications in a state’s

state violating federal]

uirements.

been out of work because

3 i infra, 45

“if a State wishes to

employed fathers the

lude a definition of an

hildren of un

must * * * [iInc

can reasonably

h an anomaly

phen a sae ny

under Mary s

ngress or the Secretary

y event, Maryland, b

m the benefici

23a

under the state’s AFDC-E program, on the ground that

the father of the needy child is unemployed because his

i e from employment was due to his own

misconduct. Such a father is clearly not employed.

Consequently, Maryland Rule 200X.A. (2), insofar as it

attempts to transplant, within the framework of

Maryland’s AFDC-E program, the disqualification

requirements of sections 6(b) and/or (c) of the Maryland

Unemployment Compensaticn law, is violative of

urge upon this Court that HEW’s approval of the

Maryland Rule in question is presumptively valid since

(1) the Congress delegated broad rule-making powers to

W in connection with administering the program, (2)

W, in promulgating its regulation, left great leeway

for each state to determine many details in its own .

plan,?5 and (3) HEW approved the Maryland Rule. It is

true that such approval is entitled to considerable

; i , 380

US. 1, 4, 16 and ff, 85 S. Ct. 792, 13 L. Ed. 24 616

absence of any co ional intent in connection with

disqualification for E benefits because of discharge for

misconduct.

24a

the Congress has delegated policy-making to the

(4th Cir. 1969); Hammond v. Lenfest, F.2d 705 (2d

Cir. 1968). Cf. Townsend v. Swank, supra. That is

particularly true where the regulation uses unambigu-

ous, mandatory language. A man out of work because

he was discharged for cause by his employer is

unemployed. There can be no two ways about that

conclusion. Accordingly, this Court holds that the

disqualification in Maryland’s Rule 200.X.A. (2) of

fathers who were discharged because of gross miscon-

duct or as a disciplinary measure, is in conflict with 45

C.F.R. §233.100(a) and that the said Maryland Rule is

invalid insofar as that disqualification is concerned.

The wording of 45 C.F.R. 233.100(a) also requires a

similar holding with canal i

disputes. While the legislative history of 42 U.S.C. § 607

throws little light on the subject,” it is contended that

the provisions of the statute,” which indicate the

plaintiff cis did apply for a new job and did agree

to take part in the required training.”*

*° See Appendix D.

77 See Appendix A.

25a

[13-15] In King v. Smith, supra, the Supreme Court

analyzed the purposes of the AFDC program and

concluded that the Alabama regulation, which, the

State of Alabama contended, was intended to discour-

age immorality and illegitimacy and also to avoid

unfairly penalizing families where an official marital

relationship existed, was inconsistent with the statute

on the ground that Congress intended to include in the

category of the word “parent” a person who had a legal

obligation to support the child in question. With regard

to the immorality point, the Supreme Court, 392 U.S. at

324-325, 88 S. Ct. at 2137, stated that federal public

welfare policy “now rests on a basis considerably more

sophisticated and enlightened than the ‘worthy person’

concept of earlier times. * * * In sum, Congress has

determined that immorality and illegitimacy should be

dealt with through rehabilitative measures... .” Thus,

the Supreme Court, in King v. Smith, found that the

justifications which the State of Alabama offered were

Bureau of Labor Statistics classifies persons out of work

use of involvement in labor disputes as “employed

persons’ rather than “unemployed: persons.” However, it

must be noted that the Bureau classifies some persons who

might well be thought by the average person to be

unemployed, as neither “employed” nor “unemployed,” but

rather in the “not in the labor force grouping.” An example is

persons who are “voluntarily idle.” See Handbook of Labor

Statistics (1970), U. S. “eo of Labor, Bureau of Labor

Statistics Technical Notes, Current Population imo .1

& 2. Thus, the Bureau’s classifications are not too h ptul in

the context of this case where it is necessary to decide if

claimants for AFDC-E benefits are either employed or

unemployed. Under the National Labor. Relations Act, a

striker continues to have rights to his job and to his employee

status. 29 U.S.C. § 152(3). See also NLRB v. Mackay Radio &

Teleg. Co., 304 U.S. 333, so ny S. Ct. 904, 82 L. Ed. 1381

26a

incompatible with the federal eae pe. In

this case, the State of Maryland, and the Chambers of

Commerce, particularly the national Chamber of

Commerce, strenuously urge this Court to hold that the

Congress has clearly indicated, through its labor

legislation, and in other ways that it did not intend to

lend governmental support to those out of work because

of labor disputes and that therefore the word “unem-

ployment,” as used in the statute and defined in the

regulation by HEW, should be read to exclude such

rsons. The difficulty with that approach is that it is a

oe strap one because there is little or nothing in the

legislative history, or in the words of the statute itself,

or in the words of the regulation, or indeed in the advice

received by this Court from HEW, to indicate whether

the word “unemployment,” as used in the statute and

amplified in the regulation, was or was not intended to

. include such persons. Perhaps it is in recognition of

that fact that HEW would have us go both ways and

say that the Congress empowered HEW to leave to each

participating state — and that HEW in turn by its

regulation has left to each state — the determination of

whether the word “unemployment,” in the context of a

state’s own AFDC-E peng, includes or excludes such

persons. In support of that view, it is to be noted that

when Congress removed the parenthetical words “as

defined by the State,” and substituted the words “as

determined in accordance with standards prescribed by

the Secretary,” Congress did not simply substitute the

words “as determined by the Secretary.” Thus, Con-

gress used words which did not mandatorily require the

Secretary to require each state to adopt the same

meaning of the word “employment” but instead merely

authorized the Secretary to prescribe a national

meaning if the Secre so desired. In so doing, this

Court agrees that the Congress empowered the Secre-

tary, by oo mpey to require each participating state

(1) to include or (2) to exclude from its respective AFDC-

E program those out of work because of involvement in

labor iy Soy or (3) to leave that decision to each state.

A quick look at 45 C.F.R. § 233.100(a) (1) (ii) reveals a

specific instance in which each state is given the power

27a

of definition by the Secretary.2** Thus, the Secre

demonstrated that he knew exactly how to state er

when he desired to leave a matter to the discretion of

each state. By contrast, the language of 45 C.F .R.

§ 233.100(a) (1) @) is crystal clear, ie., “* * * the State

considered by the industry to-be full time for the job,

whichever is less * * *” (Emphasis added). The

presence of those words renders the Secretary’s regula-

tion incapable of being construed in more than one of

the three ways left open to the Secretary by the

Congress. A father who is not working at all because of

his involvement in a labor dispute is a father who “is

employed less than 30 hours a week” and less than

three quarters of his industry’s average. Whether the

word “unemployment” covers or does not cover persons

out of work because of labor disputes, the 5

acting under the authority delegated to him by the

Congress, mandatorily, by the unequivocal words of his

own regulation, required that ea state’s plan must

include all fathers, who otherwise qualify, who are

employed less than a given number of hours. In order

otherwise to qualify, such a father must not have

available to him from his own resources or other

sources including strike benefits assets or income which

place him outside of the needy category. Further, he

must register for other work and for retraining and

ay and participate in both in good faith. Considered

in their sum total, the statute and the regulations

provide safeguards to ensure that only needy fathers

who are willing to be retrained if necessary, and to

engage in other employment, can qualify for benefits

which are made available primarily to help the children

of such fathers. In Townsend v. Swank, supra, in which

the Supreme Court held invalid that part of Illinois’

AFDC program under which certain needy dependent

children attending high school or vocational school

288 See Appendix B.

28a

were eligible for benefits, but those attending college or

university were not, Mr. Justice Brennan (at p. 505 of 92

S. Ct.) wrote:

ity Act or its legislative history, a state eligibility

standard that excludes persons eligible for assist-

ance under federal AFDC standards violates the

Social Security Act and is therefore invalid under

the Supremacy Clause. We recognize that regula-

tions of the Department of Health, Education, and

Welfare seem to imply that States may to some

extent vary eligibility requirements from federal

standards. However, the principle which accords

substantial weight to interpretation of a statute by

the department entrusted with its administration is

inapplicable insofar as those regulations are

inconsistent with the requirement of § 402(a) (10)

that aid be furnished “to ail eligible individuals.”

(Emphasis supplied.) King v. Smith, 392 US. at

333 n. 34. [88 S. Ct. 2128 20 L. Ed. 2a 1118]

[Footnote omitted.]

The following paraphrase of Mr. Justice Brennan’s last-

quoted sentence controls this case as to those involved

in labor disputes: The principle which accords substan-

tial weight to an agency’s interpretation of its own

regulation is inapplicable insofar as that interpretation

Is Inconsistent with the requirements (in this case,

mandatory requirements) of its own regulation validly

promulgated under authority delegated to it by the

Congress.29 The Secretary could have authorized

ef to wpe od og a ee oe those out of

work because of labor disputes. t, by regulation, the

Secretary mandatorily required the opposite, and

having so done, he may not ignore his own regulation.

Accordingly, this Court holds that Maryland’s Rule

200.X.A. (2), insofar as it denies AFDC-E benefits to

9 See also Heffner v. United States, supra; United States

ex rel. Brooks v. Clifford, supra; Hammond v. Lenfest, supra.

29a

disputes, conflicts with the federal regulatory require-

ments promulgated by the Secretary, and that the

plaintiff Francis and others similarly situated are

entitled to relief herein.

[16] It follows from our conclusion that Maryland’s

program, insofar as Maryland fails to afford AFDC-E

relief where fathers are out of work because of gross

misconduct on because of involvement in labor dis-

putes, is incompatible with federal regulatory require-

ments, and that the plaintiff Wright and others

similarly situated and the plaintiff Francis and others

similarly situated “are entitled to declaratory relief and

an appropriate injunction by [this Court] against the

payment of federal monies” in contravention of this

Court’s holding here, “should the State not develop a

conforming plan within a reasonable period of time,”

Rosado v. Wyman, 397 U.S. supra at 420, 90 S. Ct. at

1222 (emphasis by Mr. Justice Harlan). This Court,

having confidence that, if this Court’s holdings herein

become final, the State of Maryland will conform its

plan, effective as of the date of the filing of this opinion

and as required by this Court’s declaration of the law

herein, finds it unnecessary, at this time, to enjoin or

otherwise issue any order to respondents herein.2%

Maryland is required to disperse whatever public

funds are available for AFDC-E benefits in accordance

with this opinion. Rosado v. Wyman, supra.* See

298 The said obligations of the State of Maryland here-

under with regard to the labor involvement issue will of

course be different if, forthwith, after the filing of this

opinion, the Secretary of HEW amends 45 C.F.R. § 233.100(a)

in accordance with the discretionary authority conferred

upon him by, and within the confines of, 42 U.S.C. § 607 as

construed in this opinion.

1222) wrote:

We have considered and rejected the argument that a

federal court is without power to review state welfare

provisions or prohibit the use of federal funds by the

States in view of the fact that Congress has lodged in the

30a

Henry v. Betit, 323 F. Supp. 418, 421 (D. Alaska 1971);

Dews v. Henry, 297 F. Supp. 587-592 (D. Ariz. 1969). But

there remains the question of whether the plaintiff

Wright and the plaintiff Francis and others respectively

similarly situated are entitled to be paid AFDC-E

benefits not only prospectively from and after the date

of the filing of this opinion, but retroactively. In

Westberry v. Fisher, 309 F. Supp. 12 (D. Maine 1970),

upon remand by a three-judge court to him as a single

judge for determination of damage claims, Judge

Gignoux was faced with a claim for retroactive AFDC

benefits withheld during the period from the date of the

filing of the complaint by the plaintiffs in that case, in

which a class was established under Federal Civil Rule

for noncompliance with statutory requirements. We are

most reluctant to assume Congress has closed the

avenue of effective judicial review to those individuals

136 [87 S. Ct. 1507, 18 L. Ed 2d 681] (1967); Association of

Data Processing Service Organizations v. Camp, 397

U.S. 150, [90 S. Ct. 827, 25 L. Ed. 2d 184] (1970); Barlow

v. Collins, 397 U.S. 159 [90 S. Ct. 832, 25 L. Ed. 2d 192]

(1970). We adhere to King v. Smith, 392 U.S. 309 [88 S.

Ct. 2128, 20 L. Ed. 2d 1118] (1968), which implicitly

rejected the argument that the statutory provisions for

HEW review of plans should be read to curtail judicial

relief and held Alabama’s “substitute father” regulation

to be inconsistent with the federal statute. While King

did not advert specifically to the remedial problem, the

unarticulated premise was that the State had alternative

choices of assuming the additional cost of paying

benefits to families with substitute fathers or not using

federal funds to pay welfare benefits according to a plan

that was inconsistent with federal requirements.

3la

liable under section 1983, under the doctrine of Monroe

v. Pape, 365 U.S. 167, 81 S. Ct. 473, 5 L. Ed. 2d 492

(1961), and although Pierson v. Ray, 386 U.S. 547, 554,

87 S. Ct. 1213, 1218, 18 L. Ed. 2d 288 (1967), only goes so

far as to say that Congress, in enacting section 1983,

did not intend “to abolish wholesale all common-law

immunities,” and while the Supreme Court “has not

definitively spoken on the applicabiiity of the doctrine

of governmental immunity” 2! in actions brought under

section 1983 against state administrative officials, this

Court, as did Judge Gignoux, adopts Judge Magruder’s

views as expressed in Cobb v. City of Malden, 202 F.2d

701 (1st Cir. 1953), and in Francis v. Lyman, 216 F.2d

583 (1st Cir. 1954). In the latter case, Judge Magruder

concluded (at 588) that while “it is no defense to the

state officials that they may have acted, not mali-

ciously, but in the good-faith belief that they were

performing their official duty under what they thought

was valid state legislation” where they are dealing with

problems of race discrimi ation, and may therefore be

“said to act at their peril” in such situations, neverthe-

less, in other situations, “it seems to be the tendency of

the decisions to restrict the application of the Civil

Rights Act so as to avoid the appalling inflammation of

delicate state-federal relationships which undoubtedly

would ensue.” See also the citations in Westberry v.

Fisher, 309 F. Supp. supra at 17, of the opinions of other

courts and writers written both before and after the

Supreme Court’s pronouncements in Pierson, which

have followed Judge Magruder’s approach, and the

observation of Professor Davis that J udge Magruder’s

approach “seems likely to control the law of the future.”

3 Davis, Administrative Law § 26.06, pp. 478-479 (1958).

[17] To the extent plaintiffs seek to hold defendants

herein liable for damages under section 1983 in their

official capacities as officers of the State of Maryland,

“such a suit is in actuality one against the State, even

though the State is not named as a defendant.” 2

3: 309 F. Supp. supra at 16.

32 Suits ing injunctions against state officials who are

attempting to enforce state statutes alle; y violative of the

Federal Constitution fall into different classi cations. Griffin

32a

Westberry v. Fisher, supra, 309 F. Supp. at 18, and

cases cited thereat. See also O’Neill v. Early, 208 F.2d

286, 289 (4th Cir. 1953).

[18] Approaching the case as one against the State,

all claims herein for damages must fail. In the first

place, the State is not a person within the meaning of

section 1983. Monroe v. Pape, supra, 365 U.S. at 187-

192, 81 S. Ct. 473, 5 L. Ed. 2d 492; Hewitt v. City of

Jacksonville, 188 F.2d 423 (5th Cir.), cert. denied, 342

U.S. 835, 72 S. Ct. 58, 96 L. Ed 631 (1951); Westberry v.

Fisher, supra, 309 F. Supp. at 18.

[19, 20] In the second place, the Eleventh Amend-

ment*’ not only bars, without the consent of a state, a

federal court suit against that state by citizens of

another state, but also by citizens of its own state.

Great Northern Life Insurance Co. v. Read, 322 U.S. 47,

ol, 64 S. Ct. 873, 88 L. Ed. 1121 (1944); Hans vy.

Louisiana, 134 U.S. 1, 10S. Ct. 504, 33 L. Ed. 842 (1890);

Westberry v. Fisher, supra, 309 F. Supp. at 18. In this

case, the defendants, speaking on behalf of the State of

Maryland, have not only not waived that bar but

indeed vigorously press it. Thus, at the very least, as

Judge Winter wrote in Williams v. Dandridge, 297 F.

Supp. 450, 452 n. 1, 469 (D. Md. 1968), the Eleventh

Amendment does not permit this Court to require the

State of Maryland to appropriate additional money to

pay AFDC-E claims which would have been presented

to and paid by the State of Maryland in years prior to

the current fiscal year but for the disqualifying

v. er School Bd. of Prince Edward Coun , 377 US. 218,

228, 84 . Ct. 1226, 12 L. Ed. 2d 256 (1964): ia R.R. &

Banking Co. v. Redwine, 342 U.S. 299, 304, 72 S. Ct. 321, 96 L.

Ed. 335 (1952); Ex Parte Young, 209 U.S. 123, 28 S. Ct. 441, 52

L. Ed. 714 (1908). See Rosado v. Wyman, supra 397 USS. at

420, 90 S. Ct. 1207, 25 L. Ed. 2d 442.

8 The Eleventh Amendment to the Constitution of the

United States provides:

The Judicial power of the United States shall not be

construed to extend to any suit in law or equity,

commenced or prosecuted against one of the United

33a

provision of Maryland Rule 200.X.A. (2).* Additionally,

this Court holds that the Eleventh Amendment, when

asserted on behaif of the State as it is herein, precludes

this Court from requiring payment of any such claims

which have arisen, during the State’s current fiscal

year which commenced July 1, 1971, prior to the date of

the filing of this opinion.* In so holding, this Court has

scruntinized a number of cases in which monetary

payments by states, relating to the past, have been

required by federal courts. See the cases cited and the

discussion of several of them in Westberry v. Fisher,

309 F. Supp. supra at 15, n. 5, 19, 20 n. 12. See also Doe

v. Swank, 332 F. Supp. 61 (N.D. Ill. 1971); Grubb v.

Sterrett, 315 F. Supp. 990 (N.D. Ind.), aff'd, 400 U.S. 922,

91S. Ct. 187, 27 L. Ed. 2d 182 (1970); Doe v. Harder, 313

F. Supp. 575 (D. Conn.), app. dismissed, 399 U.S. 902, 90

S. Ct. 2202, 26 L. Ed. 2d 557 (1970); Brooks v. Yeatman,

311 F. Supp. 364 (M.D. Tenn. 1970), which have been

decided since Westberry. But in most of these cases, the

Eleventh Amendment problem was apparently either

not raised or not faced. And in.none of them has any

satisfactory reason been advanced for voiding the bar

of the Eleventh Amendment.

Whether retroactive payments are required under any

HEW and/or Maryland regulations dealing with the

subject of “corrected payments,” see Grubb v. Sterrett,

supra, 315 F. Supp. at 995; Westberry v. Fisher, supra,

309 F. Supp. at 20-21; Robinson v. Washington, 302 F.

Supp. 842, 844 (D.D.C. 1968); and Solman v. Shapiro,

300 F. Supp. 409, 416 (D. Conn. 1969), poses a question

which has not been fully briefed or argued in this case.

For that reason and, even more importantly, because

this Court has confidence that if this Court’s holding

herein becomes final, both HEW and the State of

Maryland will take such steps, if any, as are required

by their respective regulations in connection with the

making of retroactive payments, this Court, at this

34 Unless perhaps in connection with regulations of HEW

and/or the State of Maryland as to which this Court

expresses no opinion herein. See the discussion at p. 371 in

the body of this opinion.

35 See n. 34 supra.

34a

time, does not believe it necessary or advisable to state

any position or comment further in connection there-

with, including whether or not the Eleventh Amend-

ment bar has been lowered by any express or implicit

undertaking by Maryland in connection with its

acceptance of federal funds. If further developments

lead any of the parties to believe that they are entitled

to any relief in this Court with regard to the failure of

either HEW and/or any Maryland or local administra-

tive agency to make retroactive payments in accor-

dance with its own regulations, further application for

such relief may be timely made to this Court under such

circumstances.

For the reasons set forth in this opinion, this Court

holds that each of the plaintiffs and others res ively

similarly situated are entitled to prospective relief only,

_but that, at least at this time, no decree or order would

appear necessary to effectuate that prospective relief.*®

It is so decreed and ordered.

APPENDIX A

42 U.S.C. §607, as amended in 1968, provides:

§607. Dependent children of unemployed fathers;

definition

(a) The term “dependent child” shall, notwithstand-

ing section 606(a) of this title, include a needy child who

meets the requirements of section 606(a) (2) of this title,

who has been deprived of parental support or care by

reason of the umemployment (as determined in accord-

ance with standards prescribed by the Secretary) of

his father, and who is living with any of the relatives

specified in section 606(a) (1) of this title in a place of

residence maintained by one or more of such relatives

as his (or their) own home.

(b) The provisions of subsection (a) of this section

shall be applicable to a State if the State’s plan

approved under section 602 of this title—

36 See the discussion at p. 369 n. 30 supra, adopting Mr.

Justice Harlan’s approach in Rosado v. Wyman, supra.

35a

(1) requires the payment of aid to families with

dependent children with respect to a devendent child as

defined in subsection (a) of this section when—

(A) such child’s father has not been employed (as

determined in accordance with standards prescribed by

a tary) for at least 30 days prior to the receipt of

such aid,

(B) such father has not without good cause, within

such period (of not less than 30 days) as may be

prescribed by the Secretary, refused a bona fide offer of

employment or training for employment, and

defined in subsection (d) (1) of this section) in any 13-

calendar-quarter period ending within one year prior to

the application for such aid or (ii) he received unemploy-

ment compensation under an unemployment compensa-

tion law of a State or of the United States, or he was

qualified (within the meaning of subsection (d) (3) of

this section) for unemployment compensation under the

unemployment compensation law of the State, within

one year prior to the application for such aid; and

(2) provides—

(A) for such assurances as will satisfy the Secretary

that fathers of dependent children as defined in

subsection (a) of this section will be referred to the:

Secretary of Labor as provided in section 602(a) (19) of

this title within thirty days after receipt of aid with

respect to such children;

(B) for entering into cooperative arrangements with

the State agency responsible for administering or

supervising the administration of vocational education

in the State, designed to assure maximum utilization of

available public vocational education services and

facilities in the State in order to encourage the

—- of individuals capable of being retrained;

children to any child or relative specified in subsection

(a) of this section—

36a

(i) if, and for so long as, such child’s father is not

currently registered with the public employment offices

in the State, and ,

(ii) with respect to any week for which such child’s

father receives unemployment compensation under an

unemployment compensation law of a State or of the

United States.

section, expenditures pursuant to this section shall be

excluded from aid to families with dependent children

(A) where such expenditures are made under the plan

with respect to any dependent child as defined in

subsection (a) of this section, (i) for any part of the 30-

day period referred to in subparagraph (A) of subsection

(b) (1) of this section, or (ii) for any period prior to the

time when the father satisfies subparagraph (B) of such

subsection, and (B) if, and for as long as, no action is

taken (after the 30-day period referred to in subpara-

graph (A) of subsection (b) (2) of this section), under the

- program therein specified to refer such father to the

> sad of Labor pursuant to section 602(a) (19) of this

title.

(d) For purposes of this section—

(1) the term “quarter of work” with respect to any

individual means a calendar quarter in which such

individual received earned income of not less than $50

(or which is a “quarter of coverage” as defined in

section 443(a) (2) of this title), or in which such

individual participated in a community work and

training program under section 609 of this title or any

work and training program subject to the limitations in

section 609 of this title or the work incentive program

established under part C;

(2) the term “calendar quarter” means a period of 3

consecutive caléhdar months ending on March 31, June

30, September 30, or December 31; and

(3) an individual shall be deemed qualified for

unemployment compensation under the State’s unem-

ployment compensation law if—

37a

(A) he would have been eligible to receive such

unemployment compensation upon filing application,

(B) he performed work not covered under such law

and such work, if it had been covered, would (together

with any covered work he performed) have made him

eligible to receive such unemployment compensation

upon filing application.

APPENDIX B

45 C.F.R. §233.100(a), as promulgated in 1969,

provides:

§ 233.100 Dependent children of unemployed fathers.

(a) Requirements for State Plans. If a State wishes to

provide AFDC for children of unemployed fathers, the

State plan under Title I[V—Part A of the Social Security

Act must, except as specified in paragraph (b) of this

section:

(1) Include a definition of an. unemployed father

(i) Which shall include any father who is employed

less than 30 hours a week, or less than three fourths of

the number of hours considered by the industry to be

full time for the job, whichever is less, and

(ii) Which may include any father who is cinployed

less than 35 hours a week, or less than the number of

hours considered by the industry to be full time for the

job, whichever is less.

(2) Include a definition of a dependent child which

shall include any child of an unemployed father (as

defined by the State pursuant to subparagraph (1) of

this paragraph) who would be, except for the fact that

his parent is not dead, absent from the home, or

incapacitated, a dependent child under the State’s plan

approved under section 402 of the Act.

(3) Provide for payment of aid with respect to any

dependent child (as defined by the State pursuant to

su ph (2) of this paragraph) when the condi-

tions set forth in subdivisions (i) (ii), and (iii) of this

subparagraph are met:

38a

(i) His father has been unemployed for at least 30

days prior to the receipt of such aid.

(ii) Such father has not without good cause, within

such 30-day period prior to the receipt of such aid,

refused a bona fide offer of employment or training for

employment. Before it is determined that a father has

refused a bona fide offer of employment or training for

employment without good cause, the agency must make

a determination that such an offer was actually made.

(In the case of offers of employment made through the

public employment or manpower agencies, the determi-

nation as to whether the offer was bona fide, or whether

there was good cause to refuse it, will be made by that

office or agency.) The father must be given an

opportunity to explain why such offer was not accepted.

ne a with respect to the following factors must be

resolved:

(a) That there was a definite offer of employment at

wages meeting any applicable minimum wage require-

ment and which. are customary for such work in the

community;

(b) Any questions as to the father’s inability to

engage in such employment for physical reasons or

because he has no way to get to or from the particular

job; and

risks to health. safety, or lack of workman’s compensa-

tion protection.

(iii) Such father (a) has six or more quarters of work

(as defined in subdivision (iv) of this subparagraph),

within any 13-calendar-quarter period ending within 1

such 1-year period, received unemployment compensa-

tion under an unemployment compensation law of a

State or of the United States, or was qualified under the

terms of subdivision (v) of this subparagraph) for such

compensation under the State’s unemployment compen-

sation law.

(iv) A “quarter of work” with respect to any individ-

ual means a period (of 3 consecutive calendar months

—— ad

39a

ending on March 31, June 30, September 30, or

December 31) in which he received earned income of not

less than $50 (or which is a Me sey yer of coverage” as

defined in section 213(a) (2) of the Act), or in which he

participated in a “eo Re work and training pro-

gram under section 409 of the Act or any other work

and training program subject to the limitations in such

section 409, or the work incentive program established

under part C of title IV of the Act.

it had been covered, would (together with any covered

work he performed) have made him eligible to receive

such benefits upon filing application.

(4) Provide for entering into cooperative arrange-

ments with the State agency responsible for administer-

ing or supervising the administration of vocational

education to assure maximum utilization of available

ublic vocational education services and facilities in the

State to encourage the retraining of individuals capable

of being retrained.

(5) Provide for the denial of such aid to any such

dependent child or the relative specified in section

406(a) (1) of the Act with whom such child is living,

(i) If, and for as long as, such child’s father is not

nay, eoaiatered with the public employment offices

in the State, and |

(ii) With respect to any week for which such child’s

father receives unemployment compensation under an

unemployment compensation law of a State or of the

United States.

(6) Provide that within 30 days after the receipt of aid

with respect to such children, such unemployed fathers

will be referred for participation ma Gn fh eg om

Program, as provided in section a e

d the samuiaih

40a

(7) Provide, where application for aid with respect to

a dependent child (as defined by the State pursuant to

subparagraph (2) of this paragraph) is made within 6

months after the effective date of the modification of

the State plan in accordance with the provisions in

subparagraphs (1) through (6) of this paragraph, that

the father of such child will be considered to have met

the requirements of subparagraph (3) (iii) of this

paragraph if he met such requirements at any time

after April 1961 and prior to the date of such

- application.

(8) Provide, if the approved State plan in effect prior

to January 1, 1968, including aid with respect to

dependent children of unemployed parents, that for

purposes of subparagraph (7) of this paragraph an

individual who received such aid under such plan for

the last month ending before the effective date of the

modification referred to in subparagraph (7) of this

section will be considered to have filed application for

aid under the plan as modified on the day after such

effective date.

APPENDIX C

Md. Ann. Code art. 95A, §6 provides, in part:

§6. Disqualification for benefits.

An individual shall be disqualified for benefits—

(a) Voluntarily leaving work. * * *

(b) Gross misconduct.—For any week in which his

unemployment is due to his having been discharged for

gross misconduct connected with his work, if so found

by the Executive Director. Such disqualification shall

continue until such individual has become reemployed

and has earnings therein equal to at least ten (10) times

his weekly benefit amount. For the purposes of this

article, the term “gross misconduct” shall include

ST em me ~

a .

4la -

sure, * * *

(d) Failure to apply for or accept work; determination

of suitable work, * * *

(e) Sto page of work because of labor disputes.—For

any week with respect to which the Executive Director

finds that his unemrnioyment is due to a stoppage of

work, other than a iockout, which exists because of a

labor dispute at the factory, establishment, or other

premises at which he is or was last employed, provided

that this subsection shall not apply if it is shown to the

satisfaction of the Executive Director that—

_ (1) He is not ag ge in or financing or directly

interested in the labor dispute which caused the

stoppage of work; and

(2) He does not belong to a grade or class of workers

of which, immediately before the commencement of the

stoppage, there were members employed at the premises

in separate departments of the same premises, each

such department shall, for the purposes of this

subsection, be deemed to be a separate factory,

establishment, or other premises.

(f) Pregnancy. * * *

(g) Benefits under law of another state or of the

United States. * * *

(h) Remuneration from pensions. * * *

(i) Dismissal payment or wages in lieu of notice. * * *

42a

APPENDIX D

The following excerpts from the legislative history of

42 U.S.C. §607 would appear relevant:

In his message proposing AFDC-E legislation,

President Kennedy stated:

Under the aid to dependent children program,

needy children are eligible for assistance if their

fathers are deceased, disabled, or family deserters.

In logic and humanity, a child should also be

eligible for assistance if his father is a needy

unemployed worker — for example, a person who

has exhausted unemployment benefits and is not

receiving adequate local assistance. Too many

fathers, unable to Support their families, have

resorted to real or pretended desertion to qualify

their children for help. Many other fathers are

prevented by conscience and love of family from

taking this route, thereby disqualifying their

children under present law.

I recommend that the Congress enact an interim

amendment to the aid to dependent children

Congress on Program for Economic Growth and

Recovery, U.S. Code Cong. & Admin. News 1961,

87th Cong., Ist Sess., p. 1032. ]

During the hearings before the House Committee on

Ways and Means, the following colloquy between Mr.

John W. Tramburg, of the American Public Welfare

Association, and Representative Byrnes, a co-sponsor of

the bill and ranking minority Committee member,

occurred:

Mr. Byrnes. Well, let me put it this way. I would

take it that you do not believe that we should have

a test of suitability of employment as a factor in

determining whether the person is involuntarily

unemployed, when it comes to the relief program?

y tempo i

opened, he should take it. {Hearings on H.R. 3865

before the House Committee on Ways and Means,

87th Cong., Ist Sess., p. 241 (1961).]

When the bill was being debated in the House,

Representative Byrnes stated:

What the legislation does is to add the new

category which says that if the breadwinner is able

to work and if he is involuntarily unemployed and

no work is available, we will treat that family in

the same manner we treat the family when the

breadwinner is dead, absent or incapacitated.

I recognize, and I think the committee recognizes,

that as we move into this ca ory of involuntarily

unemployed people, we do ve an additional

problem, namely, the determination of whether it is

really involuntary unemployment. In the case of

“the disabled breadwinner, you can test that readily.

the case of his absence from the home, you can

test that and determine whether for a fact that

situation exists. The death of the breadwinner is a

certainty. But here we do get the problem of

pat ars i whether, in fact, this person is

involuntarily unemployed and I put the emphasis

If you will look at the Bill on page two, you will

find the additions made by the committee to assure

sense may be more or less voluntarily unemployed

and who are refusing work. I think it is appropriate

that this legislation is enacted on a temporary

44a

basis so that we can see how it is administered by

the States and those in charge of the program with

respect to the determination of whether or not the

people who receive this aid or the families who

receive this aid are in a situation where the

breadwinner is truly, in fact, involuntarily unem-

ployed. I would serve notice on the Department

here and now that if I am around in 1962 when this

program expires, I certainly am going to want and

demand detailed information as to how that as

of the program has been administered. I think they

should be in a position and should recognize now

that the Committee will want to know how this

aspect of the program has been administered and

how it has worked. [107 Cong. Rec. 3528 (daily ed.

March 10, 1961).]

Again, during the House Debate, Congressman

Byrnes referred to the provisions of a section of the bill

which “assure that aid would only go to children of the

involuntarily unemployed * * *.” 107 Cong. Rec. 3528.

But, on the same day during that debate, in answer to

the question of Representative Domonick, Chairman

Mills, of the House Ways and Means Committee, stated

that states could, if they wished, grant AFDC benefits

wee 107 Cong. Rec. 3526 (daily ed. March 10,

1961).

The Report of the Senate Committee on Finance

(87th Cong., Ist Sess., p. 3 (1961) stated:

Your committee’s bill, as does the House-passed bill

requires that a State agency administering the

expanded aid to dependent children program must

enter into cooperative arrangements with the State

agency administering the public employment

offices looking toward the employment of the

unemployed parents of the children receiving aid.

The arrangements which the State public assist-

ance agency will need to have with the employ-

ment service must include provisions for approp-

riate registration for work and periodic

reregistration of the unemployed parent of a child

and for otherwise making maximum utilization of

45a

the job placement services and other services and

facilities of the employment office. The purpose of

this provision is, so far as ible, to secure

employment for the unemploved person in any jobs

that may be available which there is not good

cause for him to refuse as determined by the State.

Your committee believes that an unemployed

individual whose family is receiving aid under this

program should accept any reasonable offer of

employment. Accordingly, the bill would require

that a State plan include provisions to assure that

aid is not provided if, and for as long as, the

unemployed parent refuses without good cause to

accept employment in which he is able to engage.

Considerable latitude would be left to the State in

determining the period during which assistance

would be denied. It is not intended to permanently

isqualify the family during subsequent a

when no offer of employment is availab e. The

state would determine whether the parent had good

cause for refusing an offer of employment.

In 1967, speaking before the Senate Committee on

Finance in connection with the pending amendments,

Mr. Wilbur Cohen, then Under Secretary of HEW and

later to become HEW Secretary, stated:

Well, I would say, Senator, that in view of the fact

that the Federal Government is spending several

billion meee’ 3 on Fs apg funds in _ welfare

program, we should give priority to a total program

of work and making people independent, people

that are on the welfare rolls. That is a cost to the

general taxpayer. These are people who the general

taxpayer is supporting and to the maximum extent

that it is feasible, priority should be given to

helping the States and the localities have a total

rogram in which work is a central part. .. .

i —— on HR 1208, before the Senate Commit-

tee on Finance, 90th Cong., Ist Sess., p. 264 (1967).]

46a

In 1967, when the House Ways and Means Committee

pro what eventually became the amendments to

42 U.S.C. § 607, its report stated with regard thereto:

A major characteristic of the law is the authority

left to the States to define “unemployment.” Your

committee believes that this has worked to the

detriment of the program because of the wide

variation in the definitions used by the States. In

some instances, the definitions have been very

narrow so that only a few people have been helped.

In other States, the definitions have gone beyond

anything that the Congress originally envisioned.

Your committee’s bill is designed to correct this

situation and to make other improvements in the

program.

The overall objective of the amendments proposed

by the Committee is to authorize a Federal

definition of unemployment by the Secretary (but

within certain limits set forth in the legislation), to

tie the program more closely to the work and

training program authorized by the bill, and to

protect only the children of unemployed fathers

who have had a recent attachment to the work

force. With these changes, the committee recom-

mends that the program become a permanent part

of the Social Security Act, still on an optional basis

with the States. [H.R. Rep. No. 544, 90th Cong., Ist

Sess., pp. 107-08 (1967). See also S. Rep. No. 744,

90th Cong., Ist Sess., p. 160 (1967), U.S. Code Cong.

& Admin. News 1967, p. 2834.]

In a July 8, 1969 message to Congress, President

Nixon stated that “a worker who exercises his right to

strike is not involuntarily unemployed” (115 Cong. Rec.

1853 (1969)).

47a

MEMORANDUM AND ORDER

In The United States District Court

For The District of Maryland

Civil No. 71-853-K

2 Robert Francis, etc., et al.

Rita C. Davidson, etc., et all.

Plaintiffs have filed herein, on February 9, 1972, a

Motion for Immediate and Final Injunctive Relief and

also, apparently in connection with said motion,

interrogatories addressed to the defendant Rita C.

Davidson. Counsel have also suggested that the failure

of this Court clearly to grant or deny injunctive relief

might be the cause of confusion if either party desired

to appeal. See Gunn v. University Committee to End

War in Viet Nam, 399 U.S. 383 (1970); Mitchell v.

Davidson, 398 U.S. 42 (1970).

At page 34 of the opinion filed in this Court on

January 28, 1972, the following sentence appears: ~

This Court, having confidence that, if this Court’s

holdings herein become final, the State of Mary-

land will conform its plan, effective as of the date

of the filing of this opinion and as required by this

Court’s declaration of the law herein, finds it

unnecessary, at this time, to enjoin or otherwise

issue any order to respondents herein.

The above-quoted sentence on page 34 is hereby

changed to read as follows, effective as of the date of

this Memorandum and Order:

This Court ‘has confidence that if no appeal is

taken from this Court’s opinion, or, if an appeal is

~ ee es ee re ees -- ewes sees

—— = a —— + — _=

48a

taken, then if this Court’s opinion is affirmed on

appeal, the State of Maryland will conform its

plan, effective as of the date of the filing of this

Court’s opinion, namely, January 28, 1972, as

required by this Court’s declaration of the law

herein, without any injunction being issued by this

Court. Therefore, this Court hereby denies, at this

time, plaintiffs’ request for an injunction herein. .

Cf. Gunn v. University Committee to End War in

Viet Nam, 399 U.S. 383 (1970); Mitchell v. David-

son, 398 U.S. 42 (1970).

The Motion for Immediate and Final Injunctive

Relief, referred to hereinabove, is hereby denied. The

interrogatories addressed to the defendant Rita C.

Davidson, in connection with said motion, need not be

answered by the said defendant. If the State of

Maryland does not forthwith conform its plan at the

expiration of the appeal period, if no appeal is taken, or,

if an appeal is taken, after affirmance on appeal of this

Court’s opinion in this case, in accordance with this

Court’s opinion, the plaintiffs may, at that time,

reapply to this Court for injunctive relief.

It is So Ordered, this 23rd day of February, 1972.

HARRISON L. WINTER,

United States Circuit Judge,

FRANK A. KAUFMAN,

United States District Judge,

JOSEPH H. YouNG,

United States District Judge.

$$ __________+____— ———— ——

49a

MEMORANDUM AND ORDER

(Filed March 1, 1972)

In The United States District Court

For The District of Maryland

Civil No. 71-853-K

Robert Francis, etc., et al.

Rita C. Davidson, etc., et al.

Footnote 15 on page 8 of the opinion filed in this case

on January 28, 1972 is hereby amended, effective as of

the date of January 28, 1972, by striking the period at

the end of that footnote and adding the following

words: “except administrative review. Defendants

concede that the pursuit of administrative review would

have been, and remains as of this date, futile.”

It is So ORDERED, this 1st day of March, 1972.

HARRISON L. WINTER,

United States Circuit Judge,

FRANK A. KAUFMAN,

United States District Judge,

JOSEPH H. YOUNG,

United States District Judge.

50a

ORAL OPINION OF THE COURT

(March 1, 1972)

In The United States District Court

For The District of Maryland

Civil No. 71-853-K

Robert Francis, et al.

Rita C. Davidson, et al.

Defendants.

Joseph H. Young, Associate Judge, U. S. District Court

for the District of land, at 2:40 o’clock p.m.

Appearances

For the Plaintiffs:

C. Christopher Brown and Curtis L. Decker. For the

Defendants:

Judge Kaufman will speak for the Court.

(Judge Kaufman) Gentlemen, I think all the members

of this Court want to compliment counsel in the case for

the way in which the case was presented, and certainly

compliment the State for all the efforts that have been

5la

made to try to take carve of the emergency situations

which have arisen. |

Originally, this Court was informed that counsel on

th sides thought that the emergencies that cropped

up could be taken care of as they came along. However,

we have now been given information by plaintiffs,

embodied in the material submitted by Mr. Brown in

the motion for reconsideration which is before this

Court today and in the several documents which he has

filed within the last twenty-four to forty-eight hours.

Turning to the standards which are set forth in Long

v. Robinson, 432 F.2d 977, particularly at page 979, that

being a Fourth Circuit 1970 opinion written by Judge

Winter, and another opinion, which Judge Winter also

authored, West Virginia Highlands Conservancy vy.

Island Creek Coal Company, 441 F.2d 232, Fourth

Circuit 1971, this Court has come to the conclusion that

the motion of the plaintiffs for immediate injunctive

relief should be granted insofar as the subclass

composed of those who are unemployed because of

discharge for misconduct is concerned.

Similarly, under those standards and for reasons

which will be stated in a m~ment, the motion for

injunctive relief will be granted with regard to the other

subclass, namely, those out of work because of labor

involvement.

However, with regard to that latter subclass, the

injunctive relief which this Court grants today will be

stayed pending appeal.

Insofar as the injunction concerning the subclass of

those who are out of work, because of discharge for

misconduct is concerned, there will be no stay. The

Order of this Court granting the injunction will be

effective immediately as of now.

Long v. Robinson sets forth four standards. As has

been indicated during the colloquy between Judge

Winter and one or more of counsel, those four standards

do not each have to be met in order for injunctive relief

ef Ys granted and in order for any request for a stay to

enied.

52a

Nevertheless, turning to each one of the standards

and considering the problem before this Court in

connection with the subclass which for short-cut

purposes I will call the misconduct subclass, it would

seem that each one of the Long v. Robinson standards

is met in terms of the position advanced today by the

plaintiffs.

First of all, in the opinion of this Court, this Court

believes that the plaintiffs will likely prevail on the

merits of the appeal.

_ Second, the facts which have been presented to us,

incontrovertible facts, facts which the State commenda-

bly in no way disputes and which the State has helped

bring before this Court in a most cooperative manner,

established beyond doubt that irreparable harm will be

— by at least three families if a stay of relief

continues.

Insofar as the State is concerned and the possibility

of substantial harm being incurred, we note the absence

of any figures or data today other than rough estimates

and general estimates.

However, the injunctive relief being granted today is

without prejudice to the State to apply to this Court for

the institution of a stay in connection with the

injunctive relief which we make effective today with

regard to the misconduct class if pending appeal new

facts or new evidence come to the attention of the State

which in the State’s judgment require that an applica-

tion be made for a stay of the injunctive relief which we

are putting in force and effect today.

cates they are currently being put, or at least three

families are being put and there is reason to believe

that other families are in a similar position.

_ With regard to the defendants’ application for an

immediate injunction covering the second subclass, the

53a

subclass composed of those out of work because of labor

involvement, this Court grants the injunction but will

stay the effect of the injunction pending appeal.

That grant of the stay is without prejudice to

plaintiffs’ reapplying to this Court for a removal of that

stay and for an immediate injunction covering that

subclass, should new facts or new evidence come to the

attention of the plaintiffs which cause the plaintiffs to

believe that this Court should be asked to reconsider its

—, of relief with regard to the labor involvement

subclass.

Counsel] are asked to confer and to poaptne an order.

If counsel can agree upon the words of the Order, they

are asked only to present the Order. If not, plaintiffs’

counsel are asked to present the Order, with comments

by counsel for the defendants. That should be done as

quickly as possible.

However, in the meantime, the injunctive relief

granted today, subject to the provisions which I have

orally stated in the last few moments, becomes effective

immediately as of this moment.

(Judge Winter) Judge -Young, do you have any

comments or any additions you want to make?

(Judge Young) No.

(Judge Winter) I have none either, and I concur in

Judge Kaufman’s statement of the Court.

Now, you understand, gentlemen, that we consider

the injunction in effect. As far as formalizing the

injunction, we want you to try to agree on the language.

If you cannot agree on the language, of course then we

will hear you, at least informally, on your disagree-

ments and enter an appropriate Order of our own.

I might add also that Judge Young will not be

available for a period of some days after this afternoon.

However, Judge Kaufman and | expect to be here

continuously and we can sign the Order for the Court.

When you have an Order prepared, may I suggest

that you submit it to Judge Kaufman as the managing

Judge of the Court.

54a

If there is nothing further, gentlemen, we will adjourn

for the day.

Thank you very much. |

(Thereupon, the hearing was concluded.)

ORDER

(Filed March 6, 1972)

In The United States District Court

For The District of Maryland

Civil No. 71-853-K

Robert Francis, et al.,

Plaintiffs,

Rita C. Davidson, et al.,

Defendants.

Upon consideration of Plaintiffs’ Motion To Recon-

sider Denial of Motion For Immediate and Final

Injunctive Relief; Defendants’ response thereto; the

record, pleadings and affidavits in this matter; and the

oral arguments of both parties thereon; and

In accordance with and for the reasons set forth in

our findings and opinion announced in open Court on

the 29th day of February, 1972, which reasons are

incorporated herein by this reference thereto,

This Court finds that Plaintiffs are suffering and will

suffer irreparable injury unless Defendants are perman-

ently enjoined from denying public assistance under the

program of Aid to Families With Dependent Children of

Unemployed Fathers (AFDC-E) to persons who are

55a

eligible for such assistance but for the fact that such

persons are disqualified for Unemployment Insurance

benefits as a result of misconduct in their previous

employment or involvement in a labor dispute.

Whereupon, it is this 6th day of March, 1972, Ordered,

Adjudged and Decreed:

1. That Plaintiffs’ Morion To RECONSIDER etc., and

PLAINTIFFS MoTION FoR IMMEDIATE AND FINAL

INJUNCTIVE RELIEF be and the same hereby are

greated; and

2. That Defendants Rita C. Davidson and Irene

Olson, their successors in office, agents, employees, and

other persons in active concert or participation with

them be and they hereby are PERMANENTLY ENJOINED

AND RESTRAINED from refusing to grant public assist-

ance under the AFDC-E program to persons otherwise

eligible for such assistance but for the fact that such

persons are disqualified for Unemployment Insurance

benefits as a result of misconduct in cheir previous

employment or involvement in a labor dispute; and

3. That, pending an appellate decision on the merits,

the aforegoing injunction is hereby STAYED with respect

to the sub-class of persons disqualified for Unemploy-

ment Insurance benefits due to involvement in a labor

dispute; and

4. That the issuance of the aforesaid Stay is without

prejudice to the right of the Plaintiffs to apply for

reconsideration thereof in the light of new facts or

evidence; and

5. That the denial of a Stray of the aforesaid

injunction with respect to the sub-class of persons

disqualified for Unemployment Insurance benefits by

reason of misconduct is without prejudice to the right of

the Defendants to apply for reconsideration thereof in

the light of new facts or evidence; and

6. That costs be borne by the Defendants.

HARRISON L. WINTER,

United States Circuit Judge,

FRANK A. KAUFMAN,

United States District Judge.

56a

MEMORANDUM FOR THE UNITED ST

AS AMICUS CURIAE ons

In the Supreme Court of the United States

October Term, 1972

No. 71-1447

Rita C. Davidson, et al., Appellants

Robert Francis, et al.

No. 71-1554

Chamber of Commerce of the United States,

. Appellant,

Robert Francis, et al.

On Appeals From

The United States District Court

For The District of Maryland

; This memorandum is filed in res to i

invitation to the Solicitor General Mo file he ree

dum expressing the view of the United States.

‘i QUESTION PRESENTED

ether Maryland Social Services Administrati

seen 200.X.A.2, Raring payment of certain a

nefits both to individ disqualified for unemploy-

ment insurance and to families of such individuale is

57a

valid under Department of Health, Education, and

Welfare Regulation 223.100(a)(1).'

INTRODUCTION AND STATEMENT

This case involves the validity, under regulations

promulgated by the Secretary of Health, Education, and

Welfare, of certain provisions of Maryland’s federally-

assisted program of aid to families with dependent

children of unemployed fathers (“AFDC-UF’’). Federal

payments on behalf of such State programs are

authorized by Section 401 of the Social Security Act, 42

U.S.C. 601. Section 407(a) of that Act defines “depend-

ent child” as including a “needy child * * * who has

been deprived of parental support or care by reason of

the unemployment (as determined in accordance with

standards prescribed by the Secretary) of his father

* * *” and Section 407(b) provides that in order to

qualify for federal assistance, a State AFDC-UF

program must provide payment of aid to any family

with a dependent child when, with limitations not here

relevant, “such child’s father has not been employed (as

determined in accordance with standards prescribed by

the Secretary) for at least 30 days * * *.”

Pursuant to the Secretary’s authority to prescribe

standards for the determination of the definition of

“unemployment” to be used in State AFDC-UF pro-

grams, the following regulation, 45 C.F.R. 233.100(a)(1),

was promulgated:

If a State wishes to provide AFDC for children of

unemployed fathers, the State plan must * * *

[include a definition of an unemployed father

(i) [wJhich shall include any father who is

employed less than 30 hours a week? * * * and

(ii) [wJhich may include any father who is

employed less than 35 hours a week * * *.

\ The Appeal in No. 71-1554 also challenges the district

cot rt’s denial of the motion by the United States Chamber of

Commerce to intervene. We express no opinion on that issue.

2 After this action was instituted, the regulation was

amended to read “* * * less than 100 hours per month * * *”

36 Fed. Reg. 13604 (July 22, 1971).

58a

The purpose of the regulation was to establish a

uniform hours-worked criterion for determining unem-

ployment. Indeed, the wide variation in State hours-

worked criteria was the main reason the Secretary was

given authority in 1968 to prescribe federal standards

under Section 407. See Macias v. Finch, 324 F. Supp.

1252, 1256-1257 (N.D. Cal.). The Secretary had not

intended to do more than set a general hours-worked

standard and had contemplated that the States would

remain free to vary the coverage of their programs, on

the basis of factors other than the number of hours

worked, in accordance with their differing needs and

policies. Thus’it is the = of the Secretary that the

standards prescribed by Regulation 233.100(a)(1) and

by Section 407(b) do not constitute a complete and

exclusive definition of “unemployment” or of “unem-

ployed father.”

Maryland Social Services Administration Rule

200.X.A.2 denies assistance under the Maryland AFDC-

UF program when the father is disqualified for State

unemployment insurance. Under Maryland law, strik-

ers and persons discharged from employment due to

“gross misconduct” are amon mae so disqualified. As

a consequence, the Marylan am excludes from

coverage some persons who ouk ess than 30 hours a

week and satisfy the other coverage requirements of

Section 407(b). The Maryland program, however, does

adopt the federal hours-worked criterion for the purpose

of determining generally whether a person is unem-

ployed. Therefore, the Secretary’s approval of the

Maryland AFDC-UF program was consistent with his

interpretation of Regulation 233.100(a)(1).°

3 Of course, be re of the Maryland program for

purposes of fed assistance does not indicate that the

Secretary deems the exclusion of families of men disqualified

for unemployment insurance to be desirable. To the contrary,

- Secretary has strongly recommended that State AFDC-

a provide the maximum coverage permit-

e Social Security Act and the regulations thereunder.

The Secretary has also concluded, however, that, within

————- limits, this question of coverage is one best left to

e States

59a

This action was instituted after appellees and their

families were denied Maryland AFDC-UF assistance

solely because they were disqualified for State unem-

ployment insurance.‘ The complaint contended that

Rule 200.X.A.2 was invalid under both the Equal

Protection Clause of the Fourteenth Amendment and

the Secretary’s regulation; declaratory and injunctive

relief was requested. A three-judge district court was

convened pursuant to 28 U.S.C. 2281.5 Applying

Dandridge v. Williams, 397 U.S. 471, the court deter-

mined that the exclusionary classifications prescribed

by Rule 200X.A.2 had a reasonable basis and accord-

ingly held that the Rul does not violate appellees’

rights to equal protection.®

In the exercise of its pendent jurisdiction, however,

the court held that Rule 200X.A.2 was invalid under the

Secretary’s regulation. It reasoned that the language of

the regulation could only be read as requiring partici-

pating States to include within the coverage of their

UF programs, without exception, the families of

all fathers who worked less than 30 hours per week and

satisfied the other requirements set fo in Section

407(b). The court determined that appellees were

entitled to prospective relief only and enjoined appel-

lants (in No. 71-1447) from — grant assistance

to persons eligible tor assistance but for the fact that

they are disqualified for unemployment insurance as a

result of their misconduct in previous employment o or

their involvement in a labor strike.’

4 Appellee Francis was disqualified because he was out of

work p ta to a labor dispute; appellee Wright had been

—e from his previous employment for “gross miscon-

uct.”

5 Appellants challenge the jurisdiction of the three-judge

district court, contending that the constitutional claim was

insubstantial. We express no opinion on that contention.

6 We agree with the district court’s decision on the

constitutional issue and believe that it requires no further

discussion in this memorandum.

’ The injunction was stayed pending appeal with respect to

persons disqualified for unemployment insurance by reason

of involvement in a labor we stele.

60a

DISCUSSION

Long-standing principles of regulatory interpretation

and administrative law require that deference be

accorded to the Secretary’s interpretation of his own

regulations. Udall v. Tallman, 380 U.S. 1, 16-18. The

decision below, however, illustrates that there is at least

a legitimate basis for disagreeing with the current

administrative interpretation of Regulation

233.100(a)(1). Therefore, in view of the conflicting

constructions which have been placed on the regulation

and the resulting potential for confusion in other States

about its proper interpretation in these and other

circumstances, the Secretary has determined to amend

the regulation in a manner consistent with his original

intent, in order to clarify its meaning. We are informed

that under the proposed revision the regulation will

expressly permit the States to vary, within limits, the

coverage of their programs on the basis of factors other

than the number of hours worked. This revision should

remove any doubt concerning the validity of Mary-

land’s Rule 200.X.A.2. Such a regulation is clearly

within the authority granted by the basic statute. In

these circumstances, this case does not warrant plenary

review by this Court.

CONCLUSION

For the foregoing reasons, the judgment below shouid

be summarily affirmed.

Respectfully submitted.

ERWIN N. GRISWOLD,

Solicitor General.

August 1972.

6la

Rita C. Davidson, Secretary, Maryland Department o

Employment and Social Services, et al., .

Appellants,

Robert Francis, etc., et al. No. 71-1447.

Appeal from the United States District Court

District of Maryland. oe

Former decision, 408 U.S..920, 92 S. Ct. 2495.

Facts and opinion, D.C., 340 F. Supp. 351.

_ Oct. 16, 1972. Motion of appellees for leave to proceed

in forma pauperis granted. Judgment affirmed.

6la-1l

In the United States District Court

For the District of Maryland

December 10, 1973

C. Christopher Brown, Esq.

Mrs. Diana G. Motz

James P. Garland, Esq.

Rob Ross Hendrickson, Esq.

George Beall, Esq.

Dear Mrs. Motz and Gentlemen:

Re: Francis, et al. v. Davidson, et al.

Civil No. 71-853-K

Judges Winter and Young and I have conferred with

regard to this case and have concluded that, for reasons

set forth by this Court in its opinion filed January 28,

1972, and in the light of the amendments to the

applicable federal regulations, set forth in 38 Fed. Reg.

18549, effective July 12, 1973, the motion of the

defendants to dissolve the injunction previously

granted by this Court should be granted. We are also of

the opinion that the motion for intervention on behalf

of the Chamber of Commerce of the United States

should be granted. Accordingly, we request that counsel

for the defendants and counsel for the proposed

intervenor submit appropriate orders to this Court, with

copies to counsel for plaintiffs, defendants, and the

proposed intervenor, as well as to any other party

which has enjoyed the status of amicus curiae in this

case, on or before December 21, 1973.

Intervention at this time by the Chamber of Com-

merce will not cause any delay in the determination of

the issues currently before this Court. That was not the

situation when intervention was original!y applied for.

6la-2

At that time, intervention would almost certainly have

caused substantial delay.

Very truly yours,

FRANK A. KAUFMAN.

ec: Honorable Harrison L. Winter

Honorable Joseph H. Young

MEMORANDUM AMICUS CURIAE OF THE

DEPARTMENT OF HEALTH, EDUCATION,

AND WELFARE

In the United States District Court

For the District of Maryland

Civil No. 71-853-K

Robert Francis, et al.

Rita C. Davidson, et al.

Introduction

This memorandum is submitted pursuant to the

Court’s request of January 8, 1974.

The Secretary of the United States Department of

Health, Education, and Welfare (hereinafter “the

Secretary”) respectfully states that the defendants’

Motion to Dissolve the Injunction Previously Issued,

62a

filed on September 14, 1973, should be granted by this

Court in that the Secretary’s regulation promulgated at

38 Federal Register 18549 (July 12, 1973) was expressly

promulgated in accordance with the suggestion of this

Court in its prior opinion on this matter and that said

regulation is consistent with the applicable provisions

of the Social Security Act and within the Secretary’s

discretionary authority. Furthermore, the plaintiffs’

Motion for Reconsideration is without. merit and should

in no way affect the dissolution of the Court’s prior

injunction.

This memorandum is directed solely to the issues

arising under the Social Security Act and the imple-

menting HEW regulations. The Secretary expresses no

opinion as to whether the provision of AFDC-E to

individuals participating in a labor dispute is contrary

to federal labor laws and national labor policy.

Statement of the Case

On February 7, 1972, this Court held that Rule

200.X.A.2 of the Social Services Administration, Depart-

ment of Employment and Social Services, of the State

of Maryland, which denied assistance under the

Maryland AFDC-E program when the father was found

disqualified for state unemployment insurance, was

violative of the Secretary of HEW’s regulation promul-

gated at 45 C.F.R. 233.100(a)(1). Under the Maryland

Rule, strikers and persons discharged from employment

as a disciplinary measure or due to “gross misconduct”

are among those so disqualified. Pursuant to that

decision, on March 6, 1972, this Court enjoined the

operation of the Maryland Rule, specifically enjoining

the defendants from “refusing to grant public assist-

ance under the AFDC-E program to persons otherwise

eligible for such assistance but for the fact that such

persons are disqualified for unemployment insurance

benefits as a result of misconduct in their previous

employment or involvement in a labor dispute.” In its

underlying opinion, this Court explained that the basis

for its decision was a determination that the Maryland

Rule “conflicts with the federal regulatory require-

ments” promulgated by the Department of HEW. See

63a

ma uv. Davidson, 340 F. Supp. 351, 368 (D.C. Md.,

In response to HEW’s amicus memorandum filed in

September, 1971, at the invitation of the Court, this

Court stated that:

“The said obligations of the State of Maryland

hereunder with regard to the labor involvement

issue will of course be different if, forthwith, after

the filing of this opinion, the Secretary of HEW

amends 45 C.F.R. § 233.100(a) in accordance with

the discretionary authority conferred upon him by,

and within the confines of, 42 U.S.C. §607 as

construed in this opinion.” 340 F. Supp. at 368-9,

footnote 29a.

Acting expressly on this suggestion, and in

accordance with this Court’s statutory construction

that “Congress used words which did not manda-

torily require each state to adopt the same meaning

of the word ‘employment’. . .,” 340 F. Supp. at 367;

the Secretary of HEW proposed (38 Federal

regulation authorizing states to adopt the Mary-

land age | at issue in this litigation. introduc-

tion to the Secretary’s proposed regulation ex-

pressly stated that it was being considered as a

result of this Court’s prior decision.

Therefore, the basis for this Court’s previously

issued injunction barring implementation of the

Maryland Rule no longer exists and such injunc-

tion should be dissolved.

Applicable Law

42 U.S.C.A. § 607, as amended in 1968, provides

as herein relevant:

§ 607. dent children of unemployed fathers;

definition.

(a) The term “dependent child” shall notwith-

stan section 606(a), include a needy child who

meets the requirements of sec‘ion 606(a)(2), who

has been deprived of parental support or care by

64a

reason of the unemployment (as determined in

accordance with standards prescribed by the

Secretary) of his father, and who is living with any

of the relatives specified in section 606(a)(1) in a

place of residence maintained by one or more of

such relatives as his (or their) own home.

(b) The provisions of subsection (a) shall be

applicable to a State if the State’s plan approved

under section 602—

65a

(1) is employed less than 100 hours a menth,

(ii) exceeds that standard for a particular

month, if his work in intermittent. . eumant abe.

at, the option of the State suck definition need not

include a father whose unemployment results from

participation in a labor dispute or who is unem-

ployed by reason of conduet or circumstances

which result or would reswit in ualification for

(1) requires the payment of aid to families unemployment compensation r the State's

with dependent children with respect to a unemployment compensation law.

dependent child as defined in subsection (a) The land Rule, formerly Social Services Admin-

when— istration Rule 200.X.A.2, which was enjoined as

(A) such child’s father has not been em-

ployed (as determined in accordance with

standards prescribed by the Secretary) for at

least 30 days prior to the receipt of such aid,

violative of the federal regulation previded as follows:

A grant may not be paid from GPA or AFDC-E:

9. 2 weet week Sie 60 Bites Gececltid for

The federal regulation, 45 C.F.R. 233.100(a), 34 Fed. unemployment insurance. (Emphasis supplied.)

Reg. 1146 (Jan. 24, 1969) which was found to be violated Section 6 of Maryland’s Unemployment Insurance

by Maryland Rule 200.X.A.2, provided in pertinent part Law, Md. Anno. Code Art. 95A provides in relevant

that: , part:

If a State wishes to provide AFDC for children of An individual shall be disqualified for benefits—

unemployed fathers, the State plan . . . must [with (>) Gross misconduct. — For any week in whtich

exceptions rot here relevant]: is due to his having been

(1) include a definition of an unemployed father diecharged for erose ncn connected with

(i) which shall include any father who is his work. . . .

employed less than 30 hours a week, or less than

three-fourths of the number of hours considered by

a industry to be full time for the job, whichever is

ess,

That federal regulation, 45 C.F.R. 233.100(a), was

amended, 38 Fed. Reg. 18549, effective July 12, 1973 to |

provide (new language underscored): . ;

If a State wishes to provide AFDC for children of

unemployed fathers, the State plan . . . must [with

exceptions not here relevant]:

(1) include a definition of an employed father.

. Such definition must include any father who:

66a

Argument

I. The Only Basis for the Injunction was the

Finding that the Maryland Rule Violated 45

C.F.R. 233.100.

Plaintiffs’ complaint alleged that Maryland Rule

200.X.A.2. was invalid under the Equal Protection and

Due Process Clauses of the Constitution; Section 407 of

the Social Security Act, 42 U.S.C.A. 607; and the

Secretary’s regulation, 45 C.F.R. 233.100. However, it is

clear that the only ground on which the Court based its

injunction was the conflict that the Court found

between the Maryland Rule and the HEW regulation.

As the Court stated:

“Tt follows from our conclusion that Maryland’s

program, insofar as Maryland fails to afford

AFDC-E relief where fathers are out of work

because of gross misconduct or because of involve-

ment in labor disputes, is incompatible with federal

regulatory requirements. . .” 340 F. Supp. at 368.

Applying Dandridge v. Williams, 397 U.S. 471, this

Court determined that there is a rational basis for the

state’s decision to deny public assistance to those

ineligible for unemployment insurance, and _ that,

therefore, Maryland’s Rule is constitutional.

This Court also overruled plaintiffs’ statutory

claim, specifically with regard to the labor dispute

disqualification and by necessary implication with

regard to the gross misconduct and discharge as a

disciplinary measure disqualification.

As to the labor dispute disqualification, this Court

specifically found that the statute, 42 U.S.C.A. 607,

permitted the Secretary to authorize a labor dispute

disqualification option, but that the federal regulation

then in effect expressly prohibited such an option. 340

F. Supp. at 367-368.

Absent the same prohibitory regulation, the Court

also implied that the federal statute is broad enough to

permit the Secretary to authorize a gross misconduct

and discharge as a disciplinary measure disqualifica-

tion option. The Court stated,

67a

“It is true that such approval [HEW al of

Maryland’s Rule] is entitled to conaiderstle walgha

by this Court, particularly when Congress has

delegated policy-making to the agency.”

340 F. Supp. at 365. Thus, with regard to the of the

1 ak ats Rule involving fathers who were di ed

because of gross misconduct or as a disciplinary

measure, the Court concluded it was only the “unambig-

uous and mandatory | e” of the then existing

— regulation which pone oll with the Maryland

II. Due to the Amendment of the Federal

of the Marl fis Goals ee ee

o e Sho issolved

Pursuant to F.R.C.P. 60 b (5). ‘

As we have stated, pursuant to 38 Federal Register

18549 (July 12, 1973), 45 C.F.R. 233.100(@) has been

—— so that the states’ definition as to unemployed

ers:

“need not include a father whose employment

results from participation in a labor dispute or who

is unemployed by reason of conduct or circumstan-

ces result or would result in disqualification

for unemployment compensation under the State

unemployment insurance law.”

This change in the tion

ec states to implement Eyer enjoined land

as a matter

of thin New of fact, was as a result

of this Court’ that such action be taken. 340

F. Supp. at 29a.

Due to this action the , the

eee See ge | be

of Rule 60b(5) of the Federal

of Civil Procedure rt be ne matic

Rule 60b(5) allows relief from a judgment where “it is

68a

Supreme Court in a case involving the amendment of

the Railway Labor Act:

“There is . . . no dispute but that a sound judicial

discretion may call for the modification of the

terms of an injunctive decree if the circumstances,

whether of law or fact, obtaining at the time of its

issuance have changed, or new ones have arisen.”

System Federation No. 91, Railway Employees v.

Wright, 364 U.S. 642, 644-645 (1961).

. The Secretary submits that his recent amendment to

45 C.F.R. 233.100(a) which specifically authorizes the

enjoined Maryland Rule, has removed the basis for this

Court’s injunction and therefore the continuation of

said injunction of the Maryland Rule is no longer

equitable. Tobin v. Alma Mills, 172 F.2d 133, 136 (4 Cir.

1951) cert. denied, 343 U.S. 933 (1952); Pennsylvania v

aa & Belmont Bridge Company, 59 U.S. 421

III. Plaintiffs’ Contentions, Previously Rejected

by the Court, Continue to Lack Merit.

As we have previously stated, this Court has already

rejected plaintiffs’ constitutional and statutory claims.

As there has been no factual or legal change therein,

this Court’s prior determination is binding on the

plaintiffs and may not now be relitigated.

Furthermore, plaintiffs’ continuing attack on the

amended HEW regulation ignores the fact that virtu-

ally all of plaintiffs’ arguments were previously made to

this Court and have been expressly or impliedly rejected

by this Court in its prior opinion at 340 F. Su p. 351,

affirmed 409 U.S. 904. In fact, the said Eedlaion,

specifically indicated that a regulation such as the

amended HEW regulation would be appropriate and

would validate the Maryland Rule. 340 F. Supp. at 368,

footnote 29a.

The Supreme Court has stated, “the rule of the law of

the case is a rule of practice, based upon the sound

policy that when an issue is once litigated and decided,

_ that should be the end of the matter.” USA and LCC. v.

Smelting, Refining and Mining Co., 339 U.S. 186. As

69a

h is the case here, this Court’s previously issued

cteusiitiin should be dissolved on the above stated

grounds.

IV. Secre ’s Regulation is Consistent

8 pray 407 of the Social Security Act

and This Court’s Prior Determination on

This Matter.

Assuming, arguendo, that this Court determines that

its prior pe Be and the subsequent amendment of the

HEW regulation are not in and of themselves a

sufficient basis on which to dissolve the injunction

previously granted, but that further consideration is

necessary, the Secretary asserts that the amended

regulation is consistent with both Section 407 of the

Social Security Act and this Court’s prior determination

of this matter.

A. The Extent of the Federal Definition of

Unemployment.

As the Secretary stated in his prior amicus brief,

when Congress first enacted an unemployment segment

to the AFDC program, section 407 of the Social Security

Act expressly referred to “unemployment (as defined by

the State)” [Emphasis supplied]. P.L. 87-31, sec. 1.

However, this section 407 was amended by P.L. 90-248,

section 203(a), effective January 1, 1968 and still in

effect, and now refers to “unemployment (as determined

in accordance with standards prescribed by the Secre-

tary.)” The report of the House Ways and Means

Committee gave the following explanation:

A major characteristic of the law is the authority

left to the States to define “unemployment.” Your

committee believes that this has worked to the

detriment of the program because of the wide

variation in the definitions used by the States. In

some instances, the definitions have been very

narrow so that only a few people have been helped.

In other States, the definitions _ gone he soo

anything that the Congress originally envisioned.

Your committee’s bill is designed to correct this

situation and to make other improvements in the

70a

program. The overall objective of the amendments

proposed by the Committee is to authorize a federal

definition of unemployment by the Secretary (but

within certain limits set forth in the legislation), to

tie the program more closely to the work and

training program authorized by the bil!, and to

protect only the children of unemployed fathers

who have had a recent attachment to the work

force. With these changes, the committee recom-

mends that the program become a permanent part

of the Social Security Act, still on an optional basis

with the States. H.R. Rep. No. 544. 90th Cong., Ist

Sess. 160 (1967).

Thus, there was clearly to be a greater degree of

federal direction with regard to the definition of

unemployment, with consequently greater uniformity

among the states. Nevertheless, the language both of

the Act and the committee reports falls short of

mandating a single, exclusive federal definition.

_ This view was specifically recognized by this Court in

its previous decision on this matter, 340 F. Supp. at 367,

wherein the Court held:

. . . [I]t is to be noted that when Congress removed

the parenthetical words “as determined by the

State,” and substituted the words “as determined

in accordance with standards prescribed by the

Secretary.” Congress did not simply substitute the

words “as determined by the bse

Thus, Con clearly chose words which did not

direct the Secretary to require each state to adopt the

same meaning of the word “unemployment” but instead

merely authorized the Secretary to prescribe standards

circumscribing the states’ determinations of the defini-

tion of “unemployment.”

Furthermore, in their opposition to defendants’

motion to dissolve the injunction, plaintiffs reliance on

the legislative history to support their position that 42

U.S.C.A. §607 requires a single, exclusive federal

definition of “unemployment” is misplaced. First, in

doing this, plaintiffs attempt to equate the amended

language of the statute with the former use of the word

Tla

“defined.” But such a construction of the statute would

render the additional and expanded change in wording

superfluous, and it is an honored principle of statutory

construction that statutes are to be given “such effect

that no clause, sentence or word is rendered superflu-

ous, void, contradictory or insignificant.” Rockbridge v.

Lincoln, 449 F.2d 567, 571 (9th Cir. 1971); Richards v.

United States, 369 U.S. I, I, (1962).

Moreover, plaintiffs are, straining to support their

position through legislative history which this Court

indicated in its prior opinion on several occasions (340

F. Supp. at 365, footnote 25, 366, 367) is essentially

inconclusive. The wording of the statute itself is

contrary to their position. As stated by the Supreme

Court in Gemsco v. Walling, 324 U.S. 244, 260 (1945):

“The plain words and meaning of a statute cannot

be overcome by legislative history which, through

strained processes of deduction from events of

wholly ambiguous significance, may furnish dub-

ious bases for inference in every direction.” Accord:

Ex Parte Collett, 337 U.S. 55, 61 (1949).

B. The Relationship of the Secretary’s Regula-

tion, and therefore the Maryland Rule, to the

Purposes and Provisions of section 407 of

the Social Security Act.

In reaching this point, the next issue to be determined

is whether the angerne dy new lation, setting forth

the standards by which AFDC-E applicants are to be

determined as “unemployed,” is consistent with the

provisions of the statute at 42 U.S.C.A. §607.

The federal regulation provides two options for the

states within the wv ool prescribed by the

for determining the “unemployment” of an otherwise

eligible applicant for AFDC-E. As the regulation states,

“at the option of the State, such definition need not

include a father whose unemployment results from

participation in a labor dispute or who is unemployed

by reason of conduct or circumstances which result or

would result in disqualification for unemployment

compensation under a State’s unemployment compen-

sation law.”

72a

It seems ap nt from this Court’s previously quoted

footnote 29 of its original decision = the Court's own

construction of 42 U.S.C. 607, that this Court believes

that with regard to the labor dispute issue a lation

such as that promulgated by the Secretary on July 12,

1973, is “in accordance with the discretionary authority

conferred upon him (the Secretary) by, and within the

confines of, 42 U.S.C. as construed” by this Court.

In its prior decision, this Court — stated that,

‘The tary could have authorized Maryland to

exclude from AFDC-E benefits those out of work

because of labor disputes.” 340 F. Su p. at 638. The

Court further stated that “in so doing this Court agrees

that the Congress empowered the Secretary, by la-

tions, to require each participating state (1) to include or

(2) to exclude from its respective AFDC-E p

those out of work because of involvement in <—

dis og (3) to leave that decision to each State.” Id.

at 367. Thus, the Secretary has now provided the ovtion

suggested by the Court by amending his regulation to

permit states to choose whether they want to include or

exclude from AFDC-E those needy dependent children

whose fathers are, in fact, unemployed because of

participation in a labor dis ute, an option clearly, in the

view of this Court, autho by the statute.

Based on this very same reasoni it is clear th

HEW also has the authority to nee + Te standards os

determining “unemployment” 80 as to permit states the

option of including needy dependent children or

excluding them from AFDC-E if their fathers are, more

rey disqualified from unemployment insurance.

is the Secretary has also done in the new regulation.

Underlying the Court’s conclusion is its recognitio

that HEW has wide latitude in prescribing standenda

for the definition of “unemployment” provided the

standards are reasonable in light of the provisions and

pampases of the Social Security Act. For, as this Court

as er 4 ae at 340 F. Supp. at 365, Congress has

a . ee rule-ma powers to gi’ in connec-

administering the program. ewise, this

Court has recognized HEW’s authority under the

statute to grant discretion to the states. Id. at 365.

73a

These principles were won yA reaffirmed by the

Supreme Court in the case of New

York State Depart-

ment of Social Services v. Dublino, _ U.S. — , 41

ey 5047, 5052 (June 19, 1973), wherein that Court

stated:

“In interpreting this statute, [the Socia! Security

Act] we must be mindful that ‘the construction of a

statute by those charged with its execution should

be followed unless there are compelling indications

that it is wrong. . . .” Red Lion Broadcasting Co. v.

FCC, 355 U.S. 367, 381 (1969); Dandridge v.

Williams, supra, at 481-482.”

In this case, such indications are wholly absent.

Giving states the option to impose such a restriction

is truly compatible with the provisions of the Social

Security Act relating to AFDC-E. Under section

407(b)\(1)(B) of the Act, 42 U.S.C.A. 607(b)(1(B), and 45

CFR 233.100(a\(3)(ii), the state plan must provide as an

eligibility condition that the father has not without

cause, within 30 days prior to receipt of aid,

refused a bona fide offer of employment or training for

employment. The determination of what constitutes

, cause” and what constitutes a refusal of a bona

fide offer of employment is largely left to the state,

which, on the one hand, m— reasonably determine -

that an individual disqualified for unemployment

insurance because he is a striker is refusing his prior

i oy on a continuing basis without good cause,

within the meaning of the statute. Similar reasoning

would support exclusion from AFDC-F on the basis of

other grounds of disqualification for unemployment

insurance, depending on the specific basis for the

. se and the timing in relation to the receipt

of AFDC-E.

On the other hand, a state may elect to include such

families where neither earnings nor unemployment

benefits are available to meet the family’s basic needs,

without regard to the cause of disbarment from

unemployment insurance benefits. Both schools of

thought have their advocates and both are reasonable.

Thus, leaving the choice to the states is a proper

74a

exercise of the Secretary’s discretion and clearly not

susceptible of being characterized as wrong.

Moreover, there is another reason for providing thi

option. The Act also provides an absolute bar to A .

benefits where the father qualifies for unemployment

insurance, evidencing the congressional concern that

public assistance not impair the integrity of the

unemployment insurance program. us, section

407(b\(2(C) of the Social urity Act, 42 U.S.C.A.

607(b\(2\(C), uires that a state plan preclude pay-

ment of AFDC-E with respect to any week for which the

father receives state or federal unemployment insur-

ance, even if the insurance benefits are inadequate to

meet the family’s need. This is the only circumstance

specified in the public assistance titles of the Social

Security Act in which receipt of benefits under a public

benefits program results in complete ineligibility for

public assistance, further einphasizing the congres-

sional interest in the proper relationship between

AFDC-E and unemployment insuramce. See Burr v.

Smith, 322 F. Supp. 980 (W.D. Wash. 1971). Although

the statute does not similarly require an absolute

exclusion from AFDC-E because the father has been

determined to be disqualified for unemployment com-

pensation, a state may, when given such an option by

the Secretary, reasonably conclude that payment of

public assistance to a father who does not qualify for

employment related income protection will undermine

the pu of the unemployment insurance law. In

fact, this consideration appears to be the basis for

Maryland’s Rule 200.X.A.2, which attempts to avoid the

anomaly of denying AFDC-E to those who receive

unemployment insurance benefits while providing it to

those who are disqualified for unemployment insurance

because of their own acts. This Court has expressed

some skepticism as to this so-called “anomaly,” 340 F.

Supp. at 365, footnote 24. However, based on the Court's

recognition of the s authority to provide the

states with options as to definition of “unemploy-

ment,” as well as the Secretary's broad rule-m

authority, we believe that the fact that this exclusion is

now specifically authorized by the Secretary’s regula-

75a

tion should alleviate this Court’s concern. The test is

not whether this Court agrees with the state’s choice,

but whether the option granted by the Secretary's

4 taper is consistent with the statutory scheme and

falls within the Secretary's authority. We believe that it

C. The Relationship of AFDC-E to Unemploy-

ment Compensation under the Statute.

Plaintiffs contend that, even if HEW has some

authority to grant discretion to the states in defining

the statutory word “unemployment,” the Secretary is

precluded by the statute from granting discretion in the

area of the “relationship of AFDC-E to unemployment

insurance” due to the fact that section 407(b) sets out

the exclusive Congressional scheme as to this relation-

ship. However, as this Court has already ruled that the

statute does permit HEW to grant discretion to the

states, this argument would have merit only if the

statutory language or the legislative history clearly

indicated that there is an exception to this general

delegation of authority for this particular relationship.

In other words, the statute itself or the legislative

ge must clearly show that Con intended to, in

the plaintiffs’ words, “preempt” the field. Plaintiffs

have not demonstrated such an exception.

On the contrary, the Maryland Rule, as now autho-

rized by the Secretary, is consistent with the pattern

established by the Congress under section 407 for the

definition of “unemployment” and it is also consistent

with other provisions of section 407, particularly the

requirement for denial of AFDC-E to individuals

receiving unemployment compensation benefits.

D. The Secretary’s Failure to Define “Unem-

ployment.”

Plaintiffs argue that due to the fact that the HEW

regulation fails to define “unemployment” according to

the American College Dictionary, the Secretary’s

regulation “must be declared null and void and without

legal effect.” Yet, as we have already demonstrated,

and as this Court has recognized, the statutory

76a

l e which we are discussing here established the

AFDCE program as a program w ich provides benefits

to needy children whose father are unemployed as

determined in accordance with standards prescribed by

the Secretary. Thus, the statute itself clearly authorizes

HEW to prescribe only the standards for the states in

choosing a definition of unemployment and not

necessarily to mandate any definition of unemployment

itself. This Court en gery the weakness of this

argument of the plaintiffs at 340 F. Supp. 366, footnote

28, wherein it stated:

“Nor does the usage of the word bene gs. dagl or

similar words in other contexts compel any one

meaning of the word ‘unemployment’ as used in 42

USC 607 or the word ‘employed’ as used in 45 CFR

§233.100(a).

V. The Townsend v. Swank Line of Cases is

Distinguishable from the Present Contro-

versy.

In three major cases, the Supreme Court has ruled

that states cannot exclude from public assistance

coverage a rson who has met the basic federal

definition of eligibility for AFDC. See Townsend v.

Swank, 404 U.S. 282 (1971); Carleson v. Remillard, 406

U.S. 598 (1972) and King v. Smith, 32 U.S. 309 (1968).

Plaintiffs rely heavily on these cases in their

argument, yet all of these cases are clearly distinguish-

a from the present controversy. The Court’s decision

in each of those cases was founded upon the inconsist-

ency of state eligibility requirements with federal ones

specified in the Social Security Act. However, in the

present case, the determination of “unemployment”

status is clearly to be left to the states by the very terms

of the statute determined in accordance with standards

prescribed by the Secretary. In other words, the Act

specifically contemplates state determinations of the

definition of “unemployment” and such a determina-

tion, if in accord with federal standards, is not a

collateral condition imposed by the state. Thus, the

cases on collateral conditions of eligibility are not

applicable here; the present suit deals not with

77a

collateral factors, but with the qualifying definition

itself. The question is not whether a family which is

eligible under the express provisions of the Social

Security Act may be disqualified because of an

additional state-imposed condition; it is whether the

statutorily imposed and state-implemented condition of

unemployment is met.

Plaintiffs’ improper reliance on the Townsend v.

Swank line of cases has resulted in plaintiffs’ use of the

wrong test for determining the validity of the new HEW

regulation. In those cases, the focus was on determining

the validity of state eligibility conditions, and the Court

held that that determination required — “congres-

sional authorization for the exclusion clearly evidenced

from the Social Security Act or its legislative history.”

King v. Smith, 392 U.S., at 333, footnote 34. Here

however, we are dealing with the vulidity of the federal

standard, and the test is whether that standard, as

established by the Secretary’s reg,ulations, is consistent

with the Social Security Act.

Finally, we would mention that, in an , the

Supreme Court has recently modified its rulings in the

Townsend line of cases by its decision in New York

State Board of Social Services v. Dublino, supra. As the

Court stated therein with regard to the State of New

York’s so-called Work Rules, which required cooperation

by employable individuals to continue to receive

assistance:

“., the Act allows for complementary state

work incentive programs and prc zedures incident

thereto — even if they became conditions for

continued assistance. Such and proce-

a are = —* et , any more —

other supplemen regulations promulga

within the legitimate sphere of state a a-

tion. See Wyman v. James, 400 U.S. 309 (1971);

Snell v. Wyman, 281 F. Supp. 853, aff'd, 393 U.S.

323 (1969). See also Dandridge v. Williams, supra;

Jefferson Jefferson v. Hackney, supra.”

78a

Conclusion

For the foregoing reasons, the Secretary believes that

the injunction against the Maryland Rule 200.X.A.2

should be dissolved.

GEORGE BEALL,

United States Attorney,

‘Tuomas G. BANJANIN,

Of Counsel: Assistant U.S. Attorney.

STEPHANIE W. NAIporr,

Regional Attorney,

JAMES C, NEWMAN,

Assistant Regional Attorney,

Region III

Office of the General Counsel,

Department of Health, Education,

and Welfare.

CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing Memo-

randum Amicus Curiae of the Department of Health,

Education, and Welfare were mailed postage prepaid to

C. Christopher Brown, ., Legal Aid Bureau, Inc., 341

N. Calvert St., Baltimore, Md. 21202; Joel J. Rabin, a

and Diana G. Motz, Esq., Assistant Attorney’s Gener 4

1100 N. Eutaw St., Baltimore, Md. 21201; Lawrence M.

Cohen, Esq., 111 W. Washington St., Chicago, Illinois

60602; and Rob Ross Hendrickson, Esq., Suite 900, 301

North Charles Street, Baltimore, Md. 21201; attorneys

for defendants and other persons who hay appeared

herein, this 19 day of February, 1974.

GeorGE BEALL

United States Attorney

Tuomas G. BANJANIN

Assistant U.S. Attorney

405 U.S. Court House Bldg.

Baltimore, Md. 21202

Phone: 301/962-4822

79a

In the United States District Court

For The District of Maryland

Civil No. 71-853-K.

June 25, 1974

Robert Francis, etc., et al.

Rita C. Davidson, Secretary, Department of

Employment and Social Services, et al.,

The Chamber of Commerce of the

United States, Intervenor,

Department of Health, Educatipn &

Welfare, Amiciis Curiae. |

Action for injunctive relief against enforcement of

state canihatinas in regard to AFDC benefits. The state

moved to dissolve the injunction. A three-judge District

Court, Frank A. Kaufman, J., held that Maryland

AFDC-E regulation excluding from benefits children of

fathers unemployed because of labor disputes was

invalid.

Motion to dissolve injunction denied.

FRANK A. KAUFMAN, District Judge.

After this Court’s first opinion in this case' was

summarily affirmed by the Supreme Court of the

United States,4 the Secretary of the Department of

Health, Education and Welfare (HEW) promulgated,

effective July 12, 1973, an*amendment to 45 C.F.R.

§ 223.100(a). Prior to that amendrhent, that regulation

provided in part:

1 340 F. Supp. 351 (D. Md. 1972).

2 409 U.S. 904, 93 S. Ct. 223, 34 L. Ed. 2d 168 (1972).

80a

Hoa Sate wishes. (i provide AFDC for children of

unemploy athers, the S * * * must

[with exceptions not Here relevant] * * *:

(1) Include a definition of an unemployed father

(i) Which shall include any father who is

employed less ttrarr30 fiours a week, or less than

three fourths of the number of hours considered by

the industry to be full time for the job, whichever is

less, and

(ii) Which may include any father who is

employed less than 95 hours a week, or less than

the number of hours considered by the industry to

be full time for the job, whichever is less.

After the July 12, 1973 amendment, subsections (i) and

ci) of 45 C.F.R. § 23.100(aX(1) were amended to read as

ollows:

(i) Is employed less than 100 hours a month; or)

(ii) Exceeds that standard for a particular

month, if his work is intermittent and the excess is

of the temporary nature as evidenced by the fact

that he was under the 100-hour standard for the

prior 2 months and is expected to be under the

standard during the next month;

except that, 2 the option of the State, such

definition n not include a father whose unem-

or circumstances whi result or would aa in

— disqualification for unemployment compensation

ander thé State's unemployment compenaa.lon

law.’

3 Before adopting that amendment HEW published on

January 3, 1973 the following notice in 38 Fed. Reg. 49:

Social and Rehabilitation Service

[45 CFR Part 233]

COVERAGE AND CONDITIONS OF ELIGIBILITY IN

FINANCIAL ASSISTANCE PROGRAMS

Dependent Children of Unemployed Fathers

Notice is hereby given that the regulation set forth in

tentative, alternative form below is proposed by the Adminis-

trator, Social and Rehabilitation Service, with the approval

8la

Thereafter, the State of Maryland, citing the July 12,

1973 change in the feder al regulation, moved to dissolve

the injunction this Court issued in accordance with its

of the Secretary. of Health, Education, and Welfare. Both

alternatives would amend § 233.100(a) (1), which provides a

Federal def nition of unemployed father under the AFDC

program in terms of hours of work.

In applying the existing regulation, the Department policy

has been to permit a State, at its option, to use a definition of

unemployed father which imposes additional conditions

relating to the reason for the unemployment, e.g., the State

definition might exclude a father whose unemployment,

results from participation in a labor dispute or who is:

unemployed by reason of conduct or circumstances which

result or would result in disqualification for unemployment

compensation under the State’s unemployment compensation

law. In Davidson v. Francis, the U.S. Supreme Court on

October 16, summarily affirmed the judgment of the district

court which held, in effect, that while the Secretary has broad

authority to define an unemployed father for purposes of

section 407 of the Social Security Act, the existing Federal

regulation provides only an hours-of-work test, and thus

prohibits a State from excluding fathers who meet this test

but are disqualified for unemployment compensation.

Accordingly, the proposed alternative A below would

amend the regulation to make the prior Department policy

explicit, by stating the options which are permitted to the

States in defining an unemployed father. Alternative B, on

the other hand, would amend the regulation to make clear

that the hours-of-work test is intended as the exclusive

definition of unemployed father, so that States may not have

definitions which impose added conditions. This would be a

change in Department policy, but would be consistent with

- way that the existing regulation has been interpreted by

e courts.

Davidson v. Francis attracted broad interest from States,

assistance recipients, and industry and labor groups. The

regulations are proposed in alternative form to give all those

who are interested full information as to the various courses

of action which are being considered.

* * * * - *

ALTERNATIVE A

[Alternative A was adopted word-for-word on July 12, 1973

and is set forth supra in the body of this opinion.]}

82a

earlier opinion.‘ Plaintiffs noted their opposition to the

State’s motion. Subsequently, this Court granted the

motion of the United States Chamber of Commerce to

intervene,® requested and received the written views of

the Secretary of HEW pursuant to Rosado v. Wyman,

397 U.S. 397, 406-407, 90 S. Ct. 1207, 25 L. Ed. 2d 442

(1970), reeeived briefs, and heard oral argument from

the parties and the intervenor.®

ALTERNATIVE B

Section 233.100(a) (1) of Chapter II of Title 45 of the Code of

Federal Regulations is revised to read as follows:

§ 233.100 Dependent children of unemployed fathers.

(a) Requirements for State plans. * * *

(1) Include a definition of an unemployed father which

shall apply only to families determined to be needy in

accordance with the provisions in § 233.20 and shall include

any father who:

(i) Is employed less than 100 hours a month, or

(ii) Exceeds that standard for a particular month, if his

work is intermittent and the excess is of a temporary nature

as evidenced by the fact that he was under the 100-hours

standard for the 2 prior months and is expected to be under

the standard during the next month.

— shall be the exclusive definition of an unemployed

ather.

” * 7. + * 7

{FR Doc. 73-33 Filed 1-2-73; 8:45 am]

‘ In its January 28, 1972 opinion, this Court concluded (340

F. Supp. supra at 371) that injunctive relief was not required.

Subsequently, at the request of the parties, in order to avoid

ambiguity as to the status of this Court’s holding and the

appropriate appellate channel to be utilized in appealing

— this Court granted injunctive relief on March 16,

1972.

5 The intervenor urged the same result as did the State

with regard to those out of work because of a labor dispute

and took no position with regard to those out of work because

of discharge for cause.

6 While no constitutional question was raised by the

State’s motion to dissolve, this three-judge court determined

not to dissolve itself and return the case to a single district

judge, for the same reasons as are set forth in 340 F. Supp.

supra at 364 n. 23.

83a

Discharge for Cause

In its prior opinion’ this Court held invalid Mary-

land’s Rule 200.X.A.(2) which renders ineligible for

AFDC-E aid children of “fathers who were discharged

for gross misconduct or as a disciplinary measure”,

because that rule was in conflict with 45 C.F.R.

§ 233.100(a) as then written. In so doing this Court

wrote:

** * A man out of work because he was dis-

charged for cause by his employer is unemployed.

There can be no two ways about that conclusion.

* * * (Emphasis in original.]

{[1, 2] The conflict between the federal and the

Maryland regulation ended after the former was

amended in July 19/3 to permit each State to render

ineligible for AFDC-E aid children whose fathers were

unemployed by reason of their conduct. The federal

regulation, as so amended, conflicts however with the

provision for aid in. 42 U.S.C. § 607(a) for “a needy child

* * * who has been deprived of parental support or care

by reason of the unemployment (as determined in

accordance with standards prescribed by the Secretary)

of his father * * *.”8 The statute relates to the

unemployment of a father — and a father who is

discharged for cause by his employer is unemployed.

Because the federal regulation is incompatible with the

federal statute, it follows that the Maryland regulation

as of this date is based upon a provision authorized by

an invalid federal regulation, and is thus itself invalid.

Until the Congress amends the statute, no combination

of federal and state regulations may provide that a

father who is unemployed is not unemployed.

Labor Dispute

By way of contrast a person out of work because of a

labor dispute does not necessarily fall within the

definition of “unemployed”. In 1968, the Congress

7 340 F. Supp. supra at 366.

8 (Emphasis supplied.) The statute is set forth in full at 340

F. Supp. supra at 371-373, Appendix and h t si

been amended by the Cnn ™ a eames

84a

enacted an amendment to 42 U.S.C. § 607(b) providing

for the Secretary rather than the State to define

unemployment. Commenting upon that amendment in

its prior opinion, this Court wrote that “* * * the

Congress empowered the Secretary, by regulation, to

require each participating state (1) to include or (2) to

exclude from its respective AFDC-E program those out

of work because of involvement in labor disputes, or (3)

to leave that decision to each state. * * * ” Id. at 367.

Further, in that earlier opinion® this Court concluded

that the Secretary by regulation at that time required

participating States to classify those out of work

because of labor disputes as “unemployed” and held

Maryland’s contrary regulation invalid. As related

supra, the Secretary subsequently amended the federal

regulation. That amendment established no standards

for the States to follow and simply permitted each State

to do as it chose. Thus, the Secretary interpreted this

Court’s opinion as nullifying the 1968 amendment.

Candor requires this Court to state that the language

used by this Court in its earlier opinion in describing

the three alternatives available to the Secretary does —

literally read — permit the amendment promulgated by

the Secretary on July 12, 1973. That language could

have, and from hindsight should have, included as part

of alternative (3) and after the words “to leave that

decision to each state” the additional words “in

accordance with appropriate standards established by

the Secretary”. The need for the inclusion of those

words is strongly supported by the legislative history of

the 1968 statutory amendment which makes it clear

that the Congress, in 1968, no longer was willing to

allow each state to define the word “unemployment” for

itself, but rather desired that national standards be

established by the Secretary. “Section 607 was amended

in 1968 to remove from the states the authority to define

unemployment * * *.” Macias v. Finch, 324 F. Supp.

1252, 1256 (N.D. Cal.), aff'd, 400 U.S. 913, 91 S. Ct. 180,

27 L. Ed. 2d 153 (1970). For example, the Under

Secretary of HEW in 1967, Wilbur Cohen, stated to the

Senate Finance Committee:

® 340 F. Supp. supra at 367-370.

85a

Today, 22 states have programs to assist such

children. But the differences between State pro-

grams are great. States may define unemployment

as narrowly or broadly as they wish, requiring

substantial previous work experience or no work

_ experience.

+. + * + 7 -

* * * [Flor the first time the House Bill would set a

Federal definition of unemployment. We are in

complete agreement that there should be a Federal

definition of unemployment.'°

And the House Report,'! with regard to the bill which

embodied that amending language, explained:

*** Under present [1961] law, the States can

establish programs for families with dependent

children based on the unemployment of a parent

and receive Federal matching. The definition of

- unemployment is left up to the individual States.

Under the bill, Federal matching would be availa-

_ble only for the children of unemployed fathers and

the definition of unemployment would be made by

the Federal Government.

The Secretary, instead of being required to promul-

gate a national definition, was required by the 1972

amendment only to establish national standards within

which the regulations of each of the states were to be

channelized and confined. The July. 12, 1973 federal

regulation contains no standards whatsoever. Accord-

ingly, that federal regulation does not carry out the

intent of the 1968 amendment and is thus invalid.

Accordingly also, the Maryland AFDC-E regulation

excluding those unemployed because of labor disputes

remains invalid.

It follows that the State’s motion to dissolve this

Court’s outstanding injunction in this case must be,

and it hereby is, denied.

10 Parts of statement before the Senate Finance Committee

on August 22, 1967, p. 268.

1! H.R. Rep. No. 544, 90th Cong., 1st Sess. 17 (1967).

86a

In The United States District Court

For the District of Maryland

Civil No. 73-874-H

Nov. 27, 1974

Barry Bethea, Individually and on behalf of his

minor child, Barry Bethea, Jr., Plaintiffs,

David T. Mason, Secretary, Maryland Department of

Employment and Social Services, Defendant.

ALEXANDER HARVEY, II, District Judge:

In Francis v. Davidson, 340 F. mm! 351 (D. Md.),

aff'd 409 U.S. 904, 93 S. Ct. 223, 34 L. Ed. 2d 168 (1972)

(hereinafter Francis JD, a three-iudge court in this

District considered constitutional and other issues

relating to the administration of the AFDC-E program

by the State of Maryland.' The plaintiffs in neis I

were fathers who had been discharged from employ-

ment for misconduct or who had become unemployed

because of a labor dispute. They there brought a class

action seeking declaratory and injunctive relief and

damages, alleging that benefits under the AFDC-E

a oo had been denied to their children by the

aryland Department of Employment and ial

' AFDC-E is the commonly-used label for a program

established by Congress in 1961 Lua to Section 407 of

the Social Security Act, 42 U.S.C. § 607, providing aid for the

children of fathers who are unemployed. The program, which

depends upon a combination of both federal and state funds,

is administered by the various participating states pursuant

to regulations of the Department of Health, Education and

Welfare. The history of te AFDC-E program is discussed

more fully in Francis I, supra, at 354, n. 1.

87a

Services under its Rule 200.X.A.(2)? They alleged that

the Rule violated (1) the Equal Protection Clause of the

Fourteenth Amendment and (2) 42 U.S.C. §607 and

regulations of the De ent of Health, Education and

Welfare (hereinafter HEW).

In Francis I, Judge Kaufman, writing for a unanim-

ous three-judge panel, found first that the Court had

jurisdiction under 28 U.S.C. § 1343(3) because the equal

rotection claim asserted by the plaintiffs was not

volous.* However, apprying the test laid down in

Dandridge v. Williams, S. 471, 90 S. Ct. 1153, 25

L. Ed. 2d 491 (1970), the Court considered the plaintiffs’

equal protection contentions on their merits and

rejected them. Next, the Court concluded that although

it had rejected the constitutional claim, it should

“continue to assert its jurisdiction and proceed to

resolve the issues herein involving federal statutes and

federal regulations.” 340 F. Supp. at 360. Ayam Say

on the pendent statutory claim, the Court in is

held that the State of Maryland could not under Rule

200.X.A.(2) deny AFDC-E benefits to children of fathe

who were unemployed because they had been dis-

charged for misconduct or because they had been

involved in a labor dispute. The Court found that the

* Rule 200.X.A.(2) denies AFDC-E benefits to children of

fathers who are “disqualified for unemployment insurance.”

The Rule provides, in as follows: 2 yen not be

ng disqualified for ens insurance.” d's

Unemployment Insurance Law provides that an vidual

does not qualify for unemployment insurance benefits if he is

discharged for “gross misconduct” or if it is determined that

“his unemployment is due to a stoppage of work, other than a

lockout, which exists because of a labor dispute * * *.”

—_ Code of Maryland, Art. 95A, §§ 6(b) and 6(e) (1969

. Vol.).

_ * The Court found it unnecessary to determine whether

jurisdiction also existed under 28 U.S.C. § 1343(4) or § 1337.

340 F. Supp. at 360, n. 20.

88a

Rule was in conflict with HEW regulations establishing

mandatory standards of eligibility for benefits.‘

After the Supreme Court summarily affirmed the

Francis I opinion, the Secretary of HEW promulgated

an amendment to the HEW regulations in question,

rmitting states to exclude from receiving -E

Someta children of fathers who were unemployed

because of participation in a labor dispute or because

they were disqualified for ~~ compensation

under state law.® The amended HEW regulation had the

effect of resurrecting Rule 200.X.A.(2) which previously

had been invalidated by the Francis I decision.

Accordingly, the Attorney General of Maryland fil

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