Petition — Miller v. Dilda

( Bupreme Gourt, U. ai |

FILED

f

|

¢9-1576 APR 8 1980 |

RICHAEL RUDAK, JR., CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OcTOBER TERM, 1979

JEFFREY C. MILLER, Acting Director, Illinois Department of

Public Aid and Successor in Office to ARTHUR F. QUERN,

Petitioner,

v.

MARY DILDA and MARGARET PFROMMER, individually and on

behalf of all others similarly situated, et al,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF

APPEALS FOR THE SEVENTH CIRCUIT

ALEXANDER G. TEITZ

Office of General Counsel

Illinois Department of Public Aid

316 South Second Street

Springfield, Illinois 62762

(217) 782-1233

Attorney for Petitioner

Davip A. RAKOV

General Counsel

DavipD E. PETERSON

Staff Attorney

Illinois Department of Public Aid

316 South Second Street

Springfield, Illinois 62762

(217) 782-1233

Of Counsel

Printed by Authority of the State of Illinois—4-80-65

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QUESTIONS PRESENTED FOR REVIEW. .................

CONSTITUTIONAL PROVISIONS AND REGU-

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The Form of Notice at Issue in the Case at Bar

Contains all the Elements that the Supreme

Court has Determined Necessary for Con-

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The Court of Appeals’ Finding of Constitutional

Insufficiency Ignores the Supreme Court’s Cri-

teria and Is Based Exclusively on Opinions of the

Court of Appeals of the Seventh Circuit, All of

Which Evade the Supreme Court’s Criteria. .........

The Failure to Follow Supreme Court Precedent,

When Repeated to the Detriment of a State,

Raises Issues Concerning the Necessity of Su-

preme Court Review Which Transcend the Facts

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APPENDICES:

A.

B.

“Memorandum Opinion and Order” of the

United States District Court dated July 28, 1978.

“Defendant’s Report to the Court” with at-

tached DPA Form 157 (R-1-77), filed August

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*“Motion to Approve Defendant’s Proposed No-

tice” with attached Proposed Manual page, filed

Ce od coskcvascoccececcssees

Order of the United States District Court dated

Ce aicccunnctseevscces

Plaintiff's ““Motion to Vacate Order Approving

Form Notice Submitted by Defendants and

Memorandum in Support Thereof”, filed Febru-

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Order of the United States District Court dated

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Decision of the United States Court of Appeals

for the Seventh Circuit decided January 17, 1980

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QUESTIONS PRESENTED FOR REVIEW..................

CONSTITUTIONAL PROVISIONS AND REGU-

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The Form of Notice at Issue in the Case at Bar

Contains all the Elements that the Supreme

Court has Determined Necessary for Con-

Stituenema) GOTNCOON, foe. vets dis ce Aesksihedewinis

The Court of Appeals’ Finding of Constitutional

Insufficiency Ignores the Supreme Court’s Cri-

teria and Is Based Exclusively on Opinions of the

Court of Appeals of the Seventh Circuit, All of

Which Evade the Supreme Court’s Criteria..........

The Failure to Follow Supreme Court Precedent,

When Repeated to the Detriment of a State,

Raises Issues Concerning the Necessity of Su-

preme Court Review Which Transcend the Facts

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APPENDICES:

A.

B.

“Memorandum Opinion and Order” of the

United States District Court dated July 28, 1978.

“Defendant’s Report to the Court” with at-

tached DPA Form 157 (R-1-77), filed August

AE + SAPRRICRIR RCIS PRR Rice ci era paper oo ce eR

‘**Motion to Approve Defendant’s Proposed No-

tice” with attached Proposed Manual page, filed

CREE Tae BTN MockcescevndabasiduenserdnchSnseanssdeadtiocstnnes

Order of the United States District Court dated

POCIUISINIIO: F FF ii cet chtnacticendcdbinstbienseGikenin

Plaintiff's ““Motion to Vacate Order Approving

Form Notice Submitted by Defendants and

Memorandum in Support Thereof”, filed Febru-

OO 2, COs crete so AS Bit didcctiincine

Order of the United States District Court dated

gs BS ER |. 5, SRR EES Sey Seema atrn Ae CR See

Decision of the United States Court of Appeals

for the Seventh Circuit decided January 17, 1980

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States Court of Appeals for the Seventh Circuit was issued

January 17, 1980 and is included herein as Appendix G. The

opinion of the Seventh Circuit is reported at 612 F.2d 1055.

JURISDICTION

The decision of the United States Court of Appeals for the

Seventh Circuit was entered January 17, 1980. This Petition for

a Writ of Certiorari is filed within,90 days of the date of the

entry of that decision. The Court’s jurisdiction is invoked under

Title 28 U.S.C. § 1254(1).

QUESTIONS PRESENTED FOR REVIEW

1. Can a Court of Appeals require a State to follow a

standard of procedural due process which is stricter than and in

conflict with the standard established by the Supreme Court of

the United States?

2. Can the Due Process clause of the United States

Constitution be legitimately used by a Court of Appeals as a

means for requiring a specific wording of notice to a welfare

recipient?

3. When a Court of Appeals repeatedly disobeys Supreme

Court directives to the detriment of a State, should the criteria

for granting a Certiorari petition be less stringent than in a

situation where the disobedience was an isolated incident?

CONSTITUTIONAL PROVISIONS AND

REGULATIONS INVOLVED

Section | of the Fourteenth Amendment to the United

States Constitution.

“All persons born or naturalized in the United States. and

subject to the jurisdiction thereof. are citizens of the United

3

States and of the State wherein they reside. No State shall

make or enforce any law which shall abridge the privileges

and immunities of citizens of the United States; nor shall

any State deprive any person of life, liberty, or property,

without due process of law; nor deny to any person within

its jurisdiction the equal protection of the laws.”

45 CFR § 205.10(a)(4)(i)(B).

“In cases of intended action to discontinue, terminate,

suspend or reduce assistance: (i) The State or local agency

shall give timely and adequate notice... Under this

requirement. . . (B) ‘Adequate’ means a written notice that

includes a statement of what action the agency intends to

take, the reasons for the intended agency action, the

specific regulations supporting such action, explanation of

the individual’s right to request an evidentiary hearing (if

provided) and a State agency hearing, and the circum-

stances under which assistance is continued if a hearing is

requested.”

STATEMENT OF THE CASE

Petitioner Miller, as Acting Director of the Illinois Depart-

ment of Public Aid’ administers the Aid to Families with

Dependent Children Program for Illinois pursuant to 42 U.S.C.

§ 601 et seg. Federal Regulations relating to the program. 45

C.F.R. § 205.10(a)(4)(1)(B), require that, prior to reduction

or termination of benefits, a recipient must be given notice of

the contemplated action and of the right to request an adminis-

trative due process hearing.

1 Arthur F. Quern (Defendant below) resigned as the Director

of the Illinois Department of Public Aid, effective September 1, 1979.

Jeffrey C. Miller has been appointed as Acting Director of the Illinois

Department of Public Aid. Supreme Court Rule 48(3) provides that

under such circumstances Jeffrey C. Miller should be automatically

substituted as a party.

4

Respondents (plaintiffs below) brought a class action in

the United States District Court on the basis that Petitioner's

notices of reduction and termination lacked sufficient detail to

satisfy statutory, regulatory, and constitutional requirements.

The form of notice then being employed by Petitioner gave

as a reason for reduction “The Resource Consultant has re-

budgeted your income and the appropriate change has been

made.” The notice did not include the calculations which

Petitioner used in redetermining the amount of respondent’s

assistance.

The District Court ruled that the particular notice was

constitutionally deficient because it did not contain an ex-

planation of how and why the grant was recomputed and that

therefore the recipient lacked a basis for determining the

propriety of the reduction and the need to seek administrative

appeal. Petitioner was enjoined from using such notices as a

basis for grant reductions until notices were furnished that the

Court deemed adequate. Appendix A.

Petitioner subsequently submitted to the Court examples of

notices which contained additional explanation of the reasons

for reduction and contained certain dollar amounts relevant to

the individual cases. Appendices B and C. After examination,

the District Court approved the form of notice suggested by

Petitioner. Appendix D. Respondents moved that the District

Court vacate its order and enter an order requiring a notice

designed by Respondents. Appendix E. This motion by

Respondents was denied by the District Court. Appendix F.

Relying exclusively on constitutional decisions it had itself

made in previous welfare cases, the Court of Appeals for the

Seventh Circuit reversed the lower court ruling, and stated that

Respondents form of notice would satisfy due process require-

ments. Appendix G.

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REASONS FOR GRANTING THE WRIT

The Court of Appeals for the Seventh Circuit has imposed

upon the State of Illinois a requirement that neither statute nor

Supreme Court decision deem necessary. To the contrary, in

the name of its own interpretation of the Due Process clause,

the Seventh Circuit has rejected a finding directly concerning

the Due Process clause made by the Supreme Court in Goldberg

v. Kelly, 397 U.S. 254 (1970). It has attempted to force the

State to do that which the Supreme Court has ruled is not

required under the Constitution.

This encroachment of the State’s powers is not an isolated

action. Rather it is part of a pattern of cases issued by the

Court of Appeals for the Seventh Circuit. In these cases,

constraints of that appellate court’s choosing have been im-

posed upon the state, all in the name of an artificial reading of

the Due Process clause, directly antithetical to the explicit

finding of Goldberg on the same subject matter. These findings

are based upon private judicial preference, couched as Con-

stitutional] necessity.

These invasions of the State’s reserved powers are espe-

cially insidious because of their individual incremental appear-

ance. Each pseudo-constitutional burden placed upon the State

could, in itself, be deemed not of sufficient moment to require

this Honorable Court to grant a Certiorari petition in order to

rectify the incursion. The act of the Seventh Circuit in the case

at bar, however, shows the culmination of this pseudo-

constitutional interference, building upon its own past pseudo-

constitutional cases. A pattern and practice has now been

explicitly demonstrated, operating directly in contravention of

Supreme Court precedent, invading powers and choices con-

stituuionally reserved to the State.

THE FORM OF NOTICE AT ISSUE IN THE CASE AT

BAR, CONTAINS ALL THE ELEMENTS THAT THE SU-

PREME COURT HAS DETERMINED NECESSARY FOR

CONSTITUTIONAL SUFFICIENCY.

Goldberg v. Kelly, 397 U.S. 254 (1970) clearly established

the constitutional principle that, prior to discontinuance of

welfare benefits. an opportunity to be heard must be afforded

the recipient. Goldberg also explicitly passed upon the con-

stitutionality of certain procedural elements inexorably inter-

twined with that requirement for a pre-termination hearing.

The Court particularly addressed as a matter of constitutional

law the manner in which the recipient was informed by the

state welfare agency of his nght to a pre-termination hearing:

Nor do we see any constitutional deficiency in the content

or form of the notice. New York employs both a letter and

a personal conference with a caseworker to inform a

recipient of the precise questions raised about his contin-

ued eligibility. Evidently the recipient is told the legal and

factual bases for the Department’s doubts. This com-

bination is probably the most effective method of commu-

nicating with recipients.

Id. at 268.

In the case at bar, the state welfare agency had designed a

notice system employing the Department’s “Form 157.” On this

form the recipient is told that his benefits are going to be

reduced (or ended ), that he has an opportunity for a personal

conference with a representative of his local office and that he

may appeal. In the system proposed, for cases involving

terminations of benefits resulting from increased Social Security

benefits or increased earned income, the following text is to be

inserted after the word “REASON”:

‘Because your increased income from Social Security

Benefits (new amount $ ), your income now

exceeds your income maintenance needs”.

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“Because of your increased earned income (new gross

amount before deductions $ ), your income now

exceeds your income maintenance needs.”

The form also showed the new amount of benefit after the

reduction.2

This form of notice is on all fours with the form of notice

that the Goldberg court found to be constitutionally sufficient. It

gives a clear reason for reduction or termination; it provides

opportunity for caseworker conference; it describes the proce-

dures for appealing.

A recent case deciding the issue of notice is Memphis Light,

Gas & Water Division v. Craft, 436 U.S. 1 (1978), where this

Court held that a municipal utility deprived certain customers

with a disputed utility bill of an interest in property without due

process of law by terminating their service without appropriate

notice and opportunity for the availability of an administrative

procedure for protesting the threatened termination. This case

illustrates the constitutional requirements for a notice in a

deprivation situation similar to Goldberg.

As in Goldberg the Court discussed that utilities were “a

necessity of modern life” Jd. at 18, and that no exception from

due process requirements was justified. There must be “an

avenue of redress” Jd. at 13, such as an appeal procedure

available to the aggrieved person. The Court found that the

utility had not provided an adequate avenue of redress, stating

that:

{The utility’s] notification procedure, while adequate to

inform the plaintiffs of the threat of termination of service.

2 The language used for reductions after the word “REASON” is:

“Your increased income from Social Security Benefits, (new

amount $ ) is being applied to your needs.”

“Your increased earned income (new gross amount before

deductions $ ) is being applied to your needs.”

8

was not “reasonably calculated” to inform them of “an

opportunity to present their objections” to their bills.

{Quoting Mullane Central Hanover Trust Co., 339 US.

306, 314 (1950). }

Id. at 14.

The Court said “we agree with the Court of appeals that due

process requires the provision of an opportunity for the presen-

tation to a designated employee of a customer's complaint .. .”

Id. at 16. And again, “The opportunity for a meeting with a

responsible employee empowered to resolve the dispute could

be afforded well in advance of the scheduled date of termina-

tion”. Jd. at 18.

The contrast to the notice in the case at bar is extreme.

Here the Notice originally sent to the Plaintiffs gave them all

the Memphis Light Court would have asked and more. The

DPA 157 states that the reduction in benefits “wi// not be taken

if you can show that it is wrong. You may meet with a

representative from your local office to question this action ...

If you wish such a meeting. contact your caseworker. Whether

or not you have such a meeting. you will still have the right to

appeal the intended action’. And most clearly stated is the

Right to Appeal and be given a hearing. And if the appeal is

within 10 days assistance will not be reduced until a decision is

made on the appeal after the hearing.

The most stringent due process standards yet established

by this court are those found in Goldberg. The notice given in

the case at bar clearly met those standards and indeed went

well beyond those standards in informing the recipient of the

action taken affecting his public assistance benefits and his right

to appeal.

9

THE COURT OF APPEALS FINDING OF CON-

STITUTIONAL INSUFFICIENCY IGNORES THE SU-

PREME COURT’S CRITERIA AND IS BASED EX-

CLUSIVELY ON SEVENTH CIRCUIT OPINIONS, ALL

OF WHICH EVADE THE SUPREME COURT CRITERIA.

In the case at bar, the Court of Appeals for the Seventh

Circuit, rejected the approval of the notice by the trial court and

stated:

“On the basis of Vargas and Banks, the notice approved by

the district court is insufficient. Though it states the

ultimate reason for the reduction or cancellation of benefits,

the notice fails to provide the recipient with a breakdown

of income and allowable deductions. It is readily apparent

from this notice that, without these calculations, plaintiffs

have little protection against errors committed by the

Department in determining the amount of their grants.

Appendix G, at 23-24a (emphasis added ).

Although the comrt admitted that the reason for reduction is in

the notice, it added elements it believed ought to be in the

notice. The opinion cites no Supreme Court precedent, but only

two opinions: Vargas v. Trainor 508 F 2d 837 (7th Cir. 1975),

and Banks \. Trainor, 525 F. 2d 837 (7th Cir. 1975), cert.

denied, 424 U.S. 978 (1976). It is not mere coincidence that

these two cited case are the Seventh Circuit's own cases.

In fact, what is most relevant in the Seventh Circuit's

opinion below is that neither Goldberg nor other Supreme Court

authority is cited. Ignored was the Goldberg finding that a

notice system was constitutionally satisfactory which was com-

prised of “a letter and a personal conference with a caseworker

to inform a recipient of the precise questions raised about his

continued eligibility.” Goldberg v. Kelly, 397 U.S. at 268.

10

The Seventh Circuit ignored this Supreme Court finding,

preferring its own Vargas and Banks rulings. But Vargas and

Banks likewise ignore this aspect of Goldberg although they

claim to follow Goldberg.

In Vargas, the Seventh Circuit stated that the state welfare

agency failed to give the reason for the reduction of benefits.

On such a basis the case would be compatible with Goldberg.

But Vargas would thus nor be relevant in regard to the case at

bar where the reason for reduction is supplied explicitly.

In Banks, the Seventh Circuit used its holding in Vargas to

evade Goldberg. The state welfare agency had sent notice of

benefit reductions to recipients with the following reason for

and detail concerning the proposed benefit reduction:

Because of a requirement in Section 271.3 of the regu-

lations issued by the Food and Nutrition Service of the

United States Department of Agriculture (7 C.F.R. Section

271.3) the determination of how much you must pay for

food stamps is going to be based upon your income.

Illinois has been calculating your payment level for food

stamps using a method that related to the amount of your

grant. The change to this ‘income method’ will take place

starting with the month of July, 1975.

This change in method of calculation will result in your

receiving less “bonus value” from the Food Stamp Prog-

ram than you previously received (this ‘bonus value’ is the

difference between the value of the food stamps and the

amount you have to pay for them). The difference

between the way your food stamp benefits would have

been calculated under the old method and under the

‘income method’ is shown on the enclosed card as follows:

( The notice then showed a facsimile of the enclosed

card. showing income. old bonus value, and new

bonus value. and offered by mail an itemized compu-

tauion. )

i De at mace we a

1]

The Seventh Circuit then cited Vargas not for the proposi-

tion that a reason was omitted. but as constitutional precedent

for a Seventh Circuit-invented standard of requisite detail:

The notices sent to this class did not contain a breakdown

of income and deductions so that the recipients could

determine the accuracy of the computations... Both Gold-

berg and Vargas require detailed notice of adverse action

as a protection against agency error and arbitrariness.

Banks v. Trainor, 525 F.2d at 842

Vargas, even if valid for the proposition that failure to include a

reason voids the notice, is not valid nor precedential concerning

the requisite detail for any particular notice. Vargas, in fact,

because it ruled no reason existed, never talked of what detail it

imagined necessary. Goldberg spoke not of “detailed notice”,

but of “an adequate notice detailing the reasons for a proposed

termination and an effective opportunity to defend by con-

fronting any adverse witnesses and by presenting his own

arguments and evidence orally.” Goldberg v. Kelly, 397 U.S. at

267. 268.

In stating that Goldberg required a “detailed notice” Banks

allowed itself to avoid that balancing of interests that Goldberg

itself employed. And when the Goldberg court balanced those

interests, it stated

We recognize. too. that both welfare authorities and

recipients have an interest in relatively speedy resolution of

questions of eligibility, that they are used to dealing with

one another informally, and that some welfare depart-

ments have very burdensome caseloads. These consid-

erations justify the limitation of the pretermination hearing

to minimum procedural safeguards, adapted to the particu-

lar characteristics of welfare recipients, and to the limited

nature of the controversies to be resolved. We wish to add

that we. no less than the dissenters, recognize the impor-

tance of not imposing upon the States or the Federal

12

Government in this developing field of law any procedural

requirements beyond those demanded by rudimentary due

process.

Goldberg v. Kelly, 397 U.S. at 267

The result of the Goldberg balancing was the finding of

constitutional sufficiency where a letter was sent showing a

reason for reduction and opportunity was given to talk with a

caseworker. The Supreme Court recognized that the

fundamental protection was the hearing process itself and that

the “notice” was just that: a notification of the reason for

reduction so that the recipient could decide if he wished to avail

himself of his appeal rights.

Both in Banks and the case at bar, the Seventh Circuit

sought to elevate specific elements of factual statement

(“breakdown of income and deductions”) to the level of

constitutional issues. It totally lost sight of Goldberg’s basic

teaching that the hearing is the basic constitutional safeguard:

the notice merely informs the client of the reason for (not the

explicit details of) the action and describes appeal rights. The

reasoning of Goldberg has been lost in the dross of detail.

THE FAILURE TO FOLLOW SUPREME COURT

PRECEDENT, WHEN REPEATED TO THE DETRIMENT

OF A STATE, RAISES ISSUES CONCERNING NECESSI-

TY OF SUPREME COURT REVIEW WHICH TRAN-

SCEND THE FACTS OF AN INDIVIDUAL CASE.

This Petitioner attempted to have this Honorable Court

review the Banks decision but its Petition for a Writ of

Certiorari was denied. As an individual, isolated action, this

Honorable Court evidently felt Banks to be an individual case

of insufficient import to merit review. The decision in the case

13

at bar, however, shows that the Seventh Circuit is following a

pattern and practice of depriving the State of rights, not just an

isolated abberation.

Faced with th: notice in the case at bar which clearly

satisfies the Goldberg requirements, the Seventh Circuit stated:

Though it states the ultimate reason for the reduction or

cancellation of benefits, the notice fails to provide the

recipient with a breakdown of income and allowable

reductions. Appendix G, at 23-24a.

The Seventh Circuit thus concluded, based on Banks and

Vargas, that the notice deprived the recipients of the Seventh

Circuit version of Due Process of Law.

The Seventh Circuit has built its own due process require-

ments, ignoring (and contraverting ) those enunciated in Gold-

berg. It has shown that it intends continually to perpetrate this

incursion of the State’s powers by repeating and enlarging its

constitutionally abberational incursion.

It is most significant here that the District Court, which had

the duty of fashioning a remedy, thought that the proposal of

the petitioner cured any constitutional violation. ‘The Court of

Appeals not only told him he was wrong in approving the State

agency’s form of notice, but instructed him on the exact piece of

paper to use, a clear infringement of the power of a state agency

to run its own affairs as long as it does not violate the law.

This Court pointed this out clearly in Rizzo v. Goode, 423

U.S. 361 (1976), when it spoke of:

... the well-established rule that the Government has

traditionally been granted the widest latitude in the ‘dis-

patch of its own internal affairs’... [quoting Sampson v.

Murray, 415 U.S. 61, 83 (1974) ]

Id. at 378, 379.

14

A related problem was before this Court more recently in

Vermont Yankee Nuclear Power v. Natural Resources Defense

Council, Inc., 435 U.S. 519 (1978). This court held that the

Court of Appeals should not have required the Atomic Energy

Commission in federal agency rule-making to grant additional

procedural rights which the Commission was not required to do

by law and chose not to do in the exercise of its discretion. The

Court of Appeals was told it should “not stray beyond the

judicial province to explore the procedural format or to impose

upon the agency its own notion of which procedures are ‘best’

or most likely to further some vague, undefined public good.”

Id. at 549.

In its zeal to dominate where it should not tread, the Court

of Appeals for the Seventh Circuit also violated the principle

that statutory issues must be considered prior to reaching

constitutional issues. The second sentence of the opinion is:

Because the notice fails to meet the demands of procedural

due process, we reverse. Appendix G, at 20a.

The Court of Appeals later states that plaintiffs contended that

under certain federal regulations and the Due Process Clause,’

the notice approved by the District Court was infirm. The

regulations themselves are relegated to citation in a footnote

(n.2) and their applicability to the notice not even considered.

This Court in New York City Transit Authority v. Beazer

440 U.S. 568 (1979) after stating that “The Court of Appeals

did not even reach the Title VII issue’’, went on to say:

We do not condone this departure from settled federal

practice. “If there is one doctrine more deeply rooted than

any other in the process of constitutional adjudication, it is

that we ought not to pass on questions of constitutionality

... unless such adjudication is unavoidable.” Spector

Motor Co. v. McLaughlin, 323 U.S. 101, 105. Before

deciding the constitutional question, it was incumbent on

those courts to consider whether the statutory grounds

might be depositive ...

Id. at 582. See also Youakim v. Miller, 425 U.S. 231 (1976).

15

The Seventh Circuit feels free to decide not merely what the law

is but what it feels the law ought to be. Its opinion in the

instant case concludes:

Finally, we believe that the risk of erroneous calculations

by the Department far outweighs the increased burden on

the administration which, the Department contends, will

occur if the budgeting calculations are included in the

notice sent to plaintiffs. Due Process can be satisfied by

simply photocopying the work papers and enclosing them

with the notice approved by the district court. The expense

involved in fulfilling plaintiff's request, moreover, is trivial.

Appendix G, at 24a.

This gratuitous expression of what the Seventh Circuit would

prefer as state procedures reflects a fundamental misunder-

standing of the role of the circuit courts. It is up to the state

welfare agency to design, within constitutional and statutory

limitations, the most efficient procedures for its work.

We ... recognize the importance of not imposing on the

States ... in this developing field of law any procedural

requirements beyond those demanded by rudimentary due

process.

Goldberg v. Kelly, 397 U.S. at 267

The Seventh Circuit takes a different view. If Plaintiffs suggest

a procedure, and if procedural burdens imposed by that

suggested procedure are “trivial” in its eyes, the Seventh Circuit

finds that procedure constitutionally necessary.

Unless and until this Honorable Court grants a Petition for

a Writ of Certiorari to review this form of circuit court

intervention through pseudo-constitutional construction, the

Seventh Circuit is apparently going to continue its pattern and

practice of invading the powers of decision-making and privi-

leges constitutionally left to State action.

16

CONCLUSION

This Court has clearly established the principle that a

welfare recipient must have the opportunity to make a reasoned

decision concerning the advisability of seeking administrative

appeal prior to benefit reduction. But this Court has also clearly

stated that the State should not be unduly burdened procedu-

rally in administering welfare programs. The Court of Appeals

below has chosen not to abide by the latter principle and has

repeatedly so chosen. Each individual case is an invasion of the

state’s powers, but, from an exterior viewpoint, an invasion of

only moderate magnitude. The Court of Appeals thus could

deem itself immune from review on Certiorari. Petitioner

submits, however, that particularly because the Court of Ap-

peals is repeating its invasions of state power, this Honorable

Court ought to recognize the cumulative import, of these

repetitive erroneous incursions upon state powers and grant

review.

For the reasons above, Petitioner prays that this Honorable

Court grant this Petition for a Writ of Certiorari.

Respectfully Submitted,

ALEXANDER G. TEITZ

Office of General Counsel

Illinois Department of Public Aid

316 South Second Street

Springfield, Illinois 62762

(217) 782-1233

Attorney for Petitioner

Davipb A. RAKOV

General Counsel

DavipD E. PETERSON

Staff Attorney

Illinois Department of Public Aid

316 South Second Street

Springfield, Illinois 62762

(217) 782-1233

Of Counsel

APPENDIX

APPENDIX A

UNITED STATES DISTRICT COURT, NORTHERN

DISTRICT OF ILLINOIS

EASTERN DIVISION

Name of Presiding Judge, Honorable Frank J. MCGARR

Cause No. 77 C 115 Date 7/28/78

Title of Cause MARY DILDA and MARGARET PROM-

MER, individually and on behalf of all others

similarly situated v. ARTHUR F. QUERN,

Director, Illinois Dept. of Public Aid

Brief Statement The rules of this court require counsel to

of Motion furnish the names of all parties entitled to

notice of the entry of an order and the names

and addresses of their attorneys. Please do

this immediately below (separate lists may be

appended ).

Names and

Addresses of

moving counsel

Representing

Names and

Addresses of

other counsel

entitled to

notice and names

of parties they

represent. Reserve space below for notations by minute clerk

Pursuant to memorandum opinion and order

entered this day, plaintiffs motion for partial

summary judgment as to Count I of the

second amended complaint is granted. De-

fendant’s motion for partial summary judg-

ment is denied. Defendant given thirty days

to furnish to the plaintiff and file with the

court a form of notice which adequately

details the factual basis and reason for the

reduction, etc. Defendant is enjoined from

terminating or reducing benefits to the plain-

tiff class without furnishing the plaintiff class

with notice deemed adequate by the

court. —DRAFT

Hand this memorandum to the Clerk.

Counsel will not rise to address the Court until motion has been

called.

2a

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MARY DILDA and MARGARET |

PROMMER, individually and on

behalf of all others similarly situ-

ated,

Plaintiffs, = No. 77.C.115

v.

ARTHUR F. QUERN, Director, II-

linois Department of Public Aid,

Defendant. |

MEMORANDUM OPINION AND ORDER

Plaintiff Mary Dilda, individually and on behalf of all

others similarly situated, seeks declaratory and injunctive relief

against the Director of the Illinois Department of Public Aid for

reducing her AFDC benefits through “re-budgeting” her in-*

come without notifying the plaintiff of the method by which the

revised budget was calculated. Plaintiff contends that this

action is in violation of the notice provisions of Title IV-A of the

Social Security Act (42 U.S.C. §§ 601, et seg.), its implement-

ing regulations and the due process clause of the Fourteenth

Amendment to the United States Constitution. The plaintiff

class consists of all recipients of assistance from IDPA under

Title IV of the Social Security Act whose benefits have been

reduced because of rebudgeting by the IDPA without any

explanation of how the revised budget was catculated. This

case is now before the court on cross motions for partial

summary judgment as to Count I of plaintiff's second amended

complaint.

3a

The uncontroverted facts are these. AFDC grants are

computed from an individualized calculation of family size,

income, expenses and deductions for each recipient. The

plaintiff is an AFDC recipient whose benefits were reduced by

the IDPA. The form notice provided to the plaintiff stated the

reason for the reduction as “The Resource Consultant has re-

budgeted your income and the appropriate change has been

made.” The notice did not include the calculations which the

IDPA used in redetermining plaintiff's grant.

The sole issue before the court is whether the notice

received by the plaintiff is adequate under Title IV of the Social

Seéurity Act, its implementing regulations and the due process

clause of the Fourteenth Amendment. Due process requires

that the recipient have “timely and adequate notice detailing

the reasons” for the proposed change. Goldberg v. Kelly, 397

U.S. 254, 267-268, 90 S.Ct. 1011, 1020, 25 L.Ed. 287 (1970).

Notice of adverse action should be sufficiently detailed to

protect the recipient from agency arbitrariness and error.

Vargas v. Trainor, 508 F.2d 485, 490 (7th Cir. 1974). The

notice should provide a “breakdown of income and deductions

so that the recipients could determine the accuracy of the

computations”. Banks vy. Trainor, 525 F.2d 837, 842 (1975).

The notice furnished the plaintiff in this case is con-

stitutionally deficient. Because the notice does not include an

explanation of how and why the plaintiffs AFDC grant was

recomputed, the plaintiff has no basis to determine the pro-

priety of the reduction and the need to appeal. The notice thus

does not furnish the factual basis for and the reasons behind the

decision as required by due’ process.

Accordingly, plaintiffs motion for partial summary judg-

ment as to Count I of the second amended complaint is granted.

Defendant’s motion for partial summary judgment is denied.

Defendant is given thirty days to furnish to the plaintiff and file

with the court a form of notice which adequately details the

4a

factual basis and reason for the reduction. The notice should

include a calculation of how the IDPA computes the plaintiff's

AFDC grant and how and why this computation has been

altered to cause the reduction in benefits. Defendant is further

enjoined from terminating or reducing benefits to the plaintiff

class without furnishing the plaintiff class with notice deemed

adequate by the court.

ENTER:

/s/ FRANK J. MCGARR

United States District Judge

DATED: July 28, 1978

Sa

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

5

MARY DILDA, et al.,

Plaintiff,

f No. 77 C 115

v.

ARTHUR F. QUERN, et al.,

Defendant. J

DEFENDANT'S REPORT TO THE COURT

This Court has ordered Defendant to furnish to the Court a

form of Notice, to be used in cases of reductions or cancella-

tions of assistance benefits because of “rebudgeting”, which

adequately provides notice of the basis and reason for the

Department’s action. The notice sent to the named plaintiff in

this case violated even the Defendant’s prior policy due to the

“reason” for the changes inserted by the caseworker. Defen-

dent's solution to this problem is to remove the caseworker’s

discretion in drafting a written reason for the DPA 157 Notice

of Change form. The Department is presently compiling a list

of specific particularized form sentences for use in the “Reason”

section of the form, DPA 157. These form sentences would

require the caseworker to indicate the type of income that was

increased as well as the new income amount which was

budgeted resulting in the cancellation or reduction in assistance.

There are a variety of different types of income which are

budgeted—Social Security, Private Pension, State Pension,

Earnings. Below are examples of ine form: sentences that would

be used with 1) increased social security benefits and 2)

increased earned income, both for cancellations and reductions.

6a

Cancellations

“Because your increased income from Social Security

Benefits (new amount $ ), your income now exceeds

your income maintenance needs”.

“Because of your increased earned income (new gross

amount before deductions $ ), your income now

exceeds your income maintenance needs.”

Reductions

“Your increased income from Social Security Benefits,

(new amount $ ) is being applied to your needs.”

““Your increased earned income (new gross amount before

deductions $ ) is being applied to your needs.”

These are merely examples of language being developed

for such situations. Other language will be developed for other

types of income. While the exact language may be modified

before formal submission to the Court, the substance of what is

contained in these sentences should be adequate under the

Court’s Memorandum Opinion and Order. A formal submis-

sion of the Department’s proposed policy revisions will be

made upon counsel’s return from vacation.

Respectfully submitted,

/s/ WILLIAM J. Scott

"DATE OF NOTICE

Cat Co/Dist Grp Basic

*FECHA DE WNOTIFICACION Cat Co/Dist Grp ee

Mailing Address Eraer Case Neme/Address i Differera from Mailing Neme/Address

Dwrecodén Posts! Uene si ef Nombre/Direccién de! caso es Gifererte si Nombre /Direccién

To:

A:

Ad - REDUCED under

Beginning in your assistance benefits will be: PEBAJADOS Senaes:

Empezando en . 8us beneficios de syude publica serén. DISCONTINUED _— under the

AFDC INCLUDING MEDICAL

William J. Scott

Attorney General of Illinois

James C. O’CONNELL

Special Assistant

Attorney General

(Of Counsel )

Suite Three Hundred

130 North Franklin

Chicago, IL 60606

793-2380

GA INCLUDING MEDICAL FOOD STAMP PROGRAM

AFOC INCLUYENDO MEDICO GA INCLUYENDO MEDICO PROGRAMA DE SELLOS DE COMIDA

MANG PROGRAM 4ABD INCLUDING MEDICAL RRA PROGRAM

PROGRAMA DE MANG AABD INCLUYENDO MEDICO PROGRAMA DE RRA

SOCIAL SERVICES (specify) OTHER

SERVICIOS SOCIALES (especifique) CO) OTRO

if reduced, your monthly assistance benefits will change es shown below.

S: rebajados sus beneficios mensusies de syude publica cambierén como sigue

New Check Amount New Food Stamp Amounts: Purchase requirement $

Nueva Cantidad Nueve Centids de Selios de Comide Usted Pags

Bonus amount &

Cantidad de Bono

Coupon ailotment £

Tote! de Selios

New Service Amount

Nueva Cantidad de Servicios

REASON

RAZON

Per Policy Statement Conteined in:

Cite de Pélize Contenide en

Local Office Administrator

Categorical Assistance or Genera! Assistance

Menua! Topic

Asistencie de Categoria o Asistencie Genera!

Tépico del Manual

Food Stemp Manual Chapter or Food Stamp 0.8. No

Capitulo de! Manus! de Selios de Comida o Boletin Oficial No

Administrador de ie Oficina Local

Local Office Address Star p

Direccién de la Oficina Loca!

SEE OTHER SIDE FOR IMPORTANT INFORMATION

VEA EL REVERSO PARA INFORMACION IMPORTANTE

DPA 157 (R-1-77)

8a

i ji i iti 4 ect with a representative from your loca!

This action wil! not be taken if you can show that it is wrong You maym '

office to question this action. This meeting would be informa! and you may present information or evidence. You

may be represented by the person(s) of your choice. if you wish such &@ meeting, contact your caseworker.

Whether or not you have such 8 meeting, you will still have the right to appeal the intended action.

i usted puede demostrar que es errénea. Usted puede reunirse con un representante

pape pestis onan eB decisién. Esta reunién seré informal y usted podré presentar ae rate

© evidencia. Usted puede ser representado por una persona o personas que usted escoja. Si usted dee ta

reunion, pongase en contacto con su trabajador. Aunque usted tenga o no tenga esta reunién, usted todavia

tendré el derecho de apelar la decisién que se piensa tomar en su Caso.

igibili i i i i immediately apply for

ligibility for Food Stamps as 8 public assistance household is terminated, you may im

what -b Stamps. If your Medical Assistance is being discontinued as 8 result of your assistance

grant being discontinued, you may apply for MANG (Medica! Assistance-No Grant).

ibili i ubli inada, usted puede aplicar

su elegibilidad para Sellos de Comida como un hogar de ayuda publica es termi

nto 2 para los Sellos de Comida como un hogar que no recibe ayuda publica. Si su Ayuda ce “

descontinuada porque su caso de ayuda publica es descontinuado, usted puede aplicar para MANG (Ayu

Médica-Sin Cheque).

For further information concerning the nearest legal! services available to you in this matter, you may cal!

the following telephone number in your area:

(a) ie Cook County, within Chicago: 663-4190 or 922-5625

(b) in Cook County, outside of Chicago: 263-2285

(c) outside of Cook County (toll free): 1-800-642-5581

Para mas informacién acerca de los servicios legales més cercanos disponsibies 8 usted, usted puede lamar

al siguiente numero de teléfono en su area:

“es en el Condado de Cook, en Chicago: 489-0765 © 922-5625

(b) en el Condado de Cook, fuera de Chicago’ 263-2285

(c) fuera del Condado de Cook (sin cargos): 1-800-642-5581

YOU HAVE THE RIGHT TO APPEAL THIS DECISION

At any time, within 60 days following the *“DATE OF NOTICE”, you have the right to appeal this —

and be given a fair hearing Such an appeal must be in writing and filed with the — a ”

represent yourself at this hearing or you may be represented by anyone else, such as a a = .

friend. Your local office will provide you with an appeal form and will help you fill it out if you wish. _—

appeal in writing within 10 days of the *"DATE OF NOTICE”, your assistance and/or food stamps wi

continued at the present level until a decision is made on your appeal after the hearing

USTED TIENE EL DERECHO DE APELAR ESTA DECISION

En cualquier momento, dentro de 60 dias después de * “FECHA DE NOTIFICACION”™, usted tiene el derecho

de apelar la decisién y de que se le dé una vista imparcial. Tal apelacién tiene que ser por escrito y ser

registrada con el Departamento. Usted puede representarse personaimente en esta vista o puede ser

representado por otra persona tal como su abogado, familiar, o amigo Su oficina local le proveera la forma

de apelacién y le ayudaré a lienaria si usted lo desea Si usted apela por escrito dentro de los 10 dias de la

- “FECHA DE NOTIFICACION”, su ayuda publica y/o sellos de comida serén continuados a! mismo nivel

hasta que se haga la decisién después de la vista

9a

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

—_—

my >

MARY DILDA, et al., )

Plaintiffs,

ey ‘ No. 77 C 115

ARTHUR F. QUERN,

Defendant. |

MOTION TO APPROVE DEFENDANT'S

PROPOSED NOTICE

NOW COMES the Defendant, ARTHUR F. QUERN, by

and through his attorney, WILLIAM J. SCOTT, Attorney

General of the State of Illinois, and moves this Honorable

Court to approve defendant’s proposed Manual Release provi-

sions and in support states:

1. This Court’s order of July 28, 1978, required defendant

to file its revised policy and pertaining to notice of the reasons

for reduction suspension or termination of AFDC grants due to

increase in income.

2. On August 30, 1978, defendant filed with this Court and

with plaintiffs a proposed “reasons” to be inserted on defend-

ant’s DPA 157, Notice of Change.

3. Attached hereto is defendant’s draft Manual Release

modifying PR-230 of the AFDC Manual which defendant

intends to publish in final form upon this Court’s approval.

WHEREFORE, defendant respectfully requests this Court

approve the draft Manual Release and the “reasons” to be

inserted thereon previously filed with the court.

Respectfully submitted,

/s/ WILLIAM J. Scott

William J. Scott

Attorney General

State of Illinois

JaMES C. O’CONNELL

Special Assistant Attorney

General (Of Counsel )

130 North Franklin, Suite 300

Chicago, IL 60606 793-2380

230

10a

RIGHTS AND RESPONSIBILITIES

NOTICE TO CLIENT

230.1

230.2

Application for financial assistance—Form DPA

360, Notice of Decision on Application for As-

sistance Grant, will be completed as a central

action by Data Process and immediately sent to

an applicant when a decision has been made to

approve or deny financial assistance.

Application for medical assistance—Form DPA

458, Notice of Decision on Application for

medical Assistance, is to be completed by the

local office in full and immediately sent to an

applicant when a decision has been made to

approve or deny medical assistance.

Application for foster care—Form DPA 860,

Notice Regarding Assistance for Child Placed in

Foster Care, is to be completed by the AFDC-F

office and immediately sent to an applicant

when a decision has been made to approve or

deny foster care assistance.

Form DPA 157, Notice of Change, is to be

completed in full and sent to a recipient when a

decision has been made to reduce, suspend or

terminate the assistance grant.

When the reduction, suspension or termination

is due to budgeting increased income, the fol-

lowing reasons are to be used on the DPA 157,

as applicable:

REDUCTIONS

“Your increased unearned income from

(new amount—$ ) is being applied to

your needs.”

“Your increased earned income (new net

amount after deductions—$ ) is being

applied to your needs.”

CANCELLATIONS

“Because of your increased unearned income

from (new amount—$ ) your

income now exceeds your income maintenance

needs.”

230.3

230.4

“Because of your increased earned income (new

gross amount before deductions—$ ),

your income now exceeds your income mainte-

nance needs.”

When unearned income is budgeted, the type of

income (such as Social Security Benefits) should

be included in the appropriate blank.

Form DPA 157 is to be completed in full and

sent to a service client when a decision has been

made to reduce, suspend or terminate service

payments.

12a

APPENDIX D

UNITED STATES DISTRICT COURT, NORTHERN

DISTRICT OF ILLINOIS

EASTERN DIVISION

Name of Presiding Judge, Honorable FRANK J. MCGARR

Cause No. 77 C 115 Date 11/27/78

MARY DILDA, et al. v. ARTHUR F. QUERN,

Title of Cause The rules of this court require counsel to furnish the

names of all parties entitled to notice of the entry of

an order and the names and addresses of their

. attorneys. Please do this immediately below (sepa-

> ema rate lists may be appended ).

Names and

Addresses of

moving counsel

Representing

Names and

Addresses of

other counsel

entitled to

notice and names

of parties they

represent. Reserve space below for notations by minute clerk

Pretrial conference held. Pursuant to an order of

court requiring the defendant to file its revised

policy and notice of the reasons for reduction,

suspension, or termination of AFDC grants due to

increase in income, the defendants have presented a

proposed form of notice of change (DPA 157),

examples of form sentences to be used in the

instances of the various reasons for cancellations or

reductions, and a draft of a manual revision modi-

fying PR-230 of the AFDC manual, which defend-

ant intends to publish.

The court approves the notice, form sentences, and

manual revision as presented, with the exception

that the language in the manual revision Paragraph

230.2 under “Reductions” is modified so that the

second sentence thereunder reads, “Your increased

earned income (new net amount after deductions-

$ ) is being applied to your needs.

The revised policies are ordered to be published

and in effect on or before December 30, 1978.

Cause set for Status Report on January 4, 1979, at

10 a.m. Exhibits attached.

Hand this memorandum to the Clerk.

Counsel will not rise to address the Court until motion has been

called.

13a

APPENDIX E

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MARY DILDA, et al., )

Plaintiffs,

v. |} No. 77C 115

JAMES L. TRAINOR, et al.,

Defendants. -

MOTION TO VACATE ORDER APPROVING

FORM NOTICE SUBMITTED BY DEFENDANTS

AND MEMORANDUM IN SUPPORT THEREOF

NATURE OF RELIEF REQUESTED BY PLAINTIFFS

Plaintiffs respectfully request that this Court vacate its

order of November 27, 1978, approving defendants’ proposed

notice and to enter an order requiring the defendants to provide

a notice which would provide a breakdown of income and

deductions so that the recipients could determine the accuracy

of the computations.

l4a

NOTICE PROPOSED BY THE DEFENDANT VIO-

LATES DUE PROCESS IN THAT IT FAILS TO PROVIDE

A BREAKDOWN ON INCOME AND DEDUCTIONS

The notice proposed by defendants would merely state:

DEDUCTIONS

“Your increased earned income from (new net

amount after deductions $ ) is being applied to

your needs.”

“Your increased earned income (new gross amount before

deductions—$ ) is being applied to your needs.”

CANCELLATIONS

“Because of your increased unearned income from

(new amount—$ ) your income now ex-

ceeds your income maintenance needs.”

“Because of your increased earned income (new gross

amount before deductions—$ ), your income

now exceeds your income maintenance needs.”

That notice is inadequate. It is similar to the notice

rejected by the Court in Banks v. Trainor 525 F.2d 837 841,

842 (7th Cir. 1975). The Court held:

Under Goldberg v. Kelly, 397 U.S. 254 and Vargas v.

Trainor 508 F. 2d 485 (7th Cir. 1974) Court denied 420

U.S. 1008 it would appear that the Notice and card sent to

the plaintiff class were deficient.

The Notices sent to the class did not contain a

breakdown of income and deductions so that the recipients

could determine the accuracy of the computations. Since

the Notices do not inform recipients of what factors are

relevant in determining net food stamp income, the plain-

tiff class cannot inform caseworkers of expenditures that

should be used...

Both Goldberg and Vargas require detailed notice of

adverse action as a protectors against agency error and

15a

arbitrariness. Because the calculation of food stamp

benefits under the income method requires an individ-

ualized determination of income, expenses and deductions

for each recipient, due process requires full and adequate

prior written notice.

On May 2, 1977, the Court certified the following class:

All persons who receive assistance from the Illinois

Department of Public Aid under Title IV of the Social

Security Act and who have had their benefits reduced

because of rebudgeting by the Illinois Department of

Public Aid without any explanation of how the revised

budget was calibrated.

On July 28, 1978, this Court entered our order and

memorandum opinion granting plaintiffs partial summary judg-

ment. The opinion states:

The sole issue before the Court is whether the notice

received by the plaintiff is adequate under Title IV of Social

Security Act, its implementing regulations and the due

process clause of the Fourteenth Amendment. Due process

requires that the recipient have “timely and adequate

notice detailing the reasons” for the proposed change.

Goldberg v. Kelly, 397 U.S. 254, 267-268, 90 S. Ct. 1011,

1020, 25 L. Ed. 2d 287 (1970). Notice of adverse action

should be sufficiently detained to protect the recipient from

agency arbitrariness and error. Vargas v. Trainor 508 F. 2d

485, 490 (7th Cir. 1974). The Notice should provide a

‘breakdown of income and deductions so that the recipient

could determine the accuracy of the computations’ Banks v.

Trainor, 525 F. 2d 837, 842 1975) Page 2-3 of Opinion.

[Emphasis added]

The notice submitted by the defendant does not contain a

“breakdown of income and deductions so that the recipients

could determine the accuracy of the computations”. Use of that

notice would be violative of due process.

~~»

l6a

Attached hereto as Exhibit A, is the form used by the

Illinois Department of Public Aid in computing the adjusted net

income from rents in determining adjusted net income. Note

that the form provides a breakdown of deductions for such

items as: principal and interest, tax, water, gas, electricity and

heat.

Attached hereto as Exhibit B is Illinois Department of

Public Aid Form DPA 553B (N-6-74) used in completing the

net adjusted income for earned income. Note that the form

provides a breakdown of deductions for: federal and state

taxes, social security, transportation, lunch, 30, plus 1/3 of

remainder, and other mandatory deduction.

The form proposed by the defendant simply does not

provide a breakdown of deductions. It does not even provide a

figure representing the total sum of the deductions.

The form attached hereto and marked Exhibit A is used by

the Department in each case wherein rental income will cause a

reduction or termination in benefits. The form attached hereto

and marked Exhibit B is used by the Department in each case

where earned income is the basis of a reduction or termination

in benefits.

If the defendant were to provide a copy of appropriate

form used to calculate the reduction together with the proposed

notice, the two together would provide a “breakdown of

income and deductions so that the recipients could determine

the accuracy of the computations”.

Respectfully submitted,

/s/ THOMAS GRIPPANDO

Thomas Grippando

THOMAS GRIPPANDO

Cook COUNTY LEGAL ASSISTANCE FOUNDATION, INC.

Attorney for Plaintiffs

1701 S. First Avenue

Maywood, Illinois 60513

Telephone (312) 343-8630

INTAKE SPECIALIST DATE

# IN ASSIST. UNIT

CAT. CO./DIST. GRP. BASIC

CASE NAME

DETERMINATION OF ELIGIBILITY FOR

EARNED INCOME EXEMPTION

~

fi.

ae

si

it

Department of Public Aid

17a

BUDGET COMPUTATION—AFDC

Social Security

Other ( Mandatory )

Total—

Remainder

Employment Expenses:

A

Transportation

Child Care

Other ( Mandatory )

Remainder

FLAT GRANT AMOUNT

(CIRCLE ONE) DEFICIT OR

—EE

——EE

—E

——

SURPLUS

Computations:

mo/yr

! | Authorization— Regular Submittal Effective

# of days

through

from ( mo/da)

# of days

through

from (mo/da)

mo/yr

| | Disbursing Order

| | Mercury

Amount $

mo/yr

18a

“SCHEDULE B”

Date July 6, 1976

CASE NAME Dilda, Mary CASE NUMBER 4-229-03-

! 511097

Statement of monthly income from rentals and shelter allow-

ance from property located at 1535 N. 33rd Melrose Pk., 60160,

Illinois.

Actual Expenses Monthly Recipient’s Tenant's

Totals = 3 Share = % Share = %

Principal $109.07 $54.54

Interest 163.61

Tax

Water 6.67 4.45 2.22

Gas

Electricity

Heat

Totals $170.28 $114.52 $56.76

Gross Monthly Rental Income— 165.00

Less Expenses for Production of Income 56.76

Net Monthly Rental Income 108.24

Resources Recommendation:

A) Under item 80, Code 108, on the FO-552—make property

allowance of $ . +: also allow utilities based on number

of persons in family.

B) Under item 90, code item 534 = 108.24

NOTE: If there is an increase or decrease in number of units

rented in building. a referral must be made to Resources: Re-

refer to

Resources on 6-77

for Annual Review.

RESOURCES CONSULTANT

19a

APPENDIX F

UNITED STATES DISTRICT COURT,

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

Name of Presiding Judge, Honorable Frank J. McGarr

77 C 115 Date Feb. 21, 1979

Title of Cause Mary Dilda et al. v. James Trainor et al.

Bnet Statement Motion to Vacate Order Approving Form

of Motion Notice Submitted by Defendants and Memo-

randum in Support Thereof

The rules of this court require counsel to

furnish the names of all parties entitled to

notice of the entry of an order and the names

and addresses of their attorneys. Please do

this immediately below (separate lists may be

appended ).

Names and Thomas Grippando

Addresses of — Cook County Legal Assistance

moving counsel Foundation, Inc.

Representing 1701 South First Avenue

Maywood, IL 60153

Plaintiffs

Names and

prema evel: James O’Connell

entitled to Special Asst. Attorney General

notice and names!00 North LaSalle

of parties they Chicago IL 60602

represent. _ Reserve space below for notations by minute clerk

Plaintiff's motion to dismiss Count II of com-

plaint as moot is granted. Plaintiffs’ motion

to vacate order approving form notice sub-

mitted by defendants is denied. Final order

has been entered. Cause closed. Status

hearing set for Mar. 7, 1979 is stricken.

Plaintiffs’ have 20 days in which to file motion

for attorneys fees and costs, with reply to be

filed 15 days thereafter. Motion for fees and

costs will be taken under advisement.

Hand this memorandum to the Clerk.

Counsel will not rise to address the Court until motion has been

called.

20a

APPENDIX G

No. 79-1340

IN THE UNITED STATES

COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

5

MARY DILDA, et al., ineeaid tiling hs

Plaintiffs-Appellants, | United States District Court

for the Northern District

v.

>

ARTHUR QUERN, Director, Illinois No. 77-C-115

Department of Public Aid, Seaiks & Meese.

Defendant-Appellee. vadge.

ARGUED NOVEMBER 26, 1979—DECIDED JANUARY 17, 1980

Before SwyGERT, Circuit Judge, WispoM, Senior Circuit

Judge,’ and TONE, Circuit Judge.

Per CurRIAM. The sole issue presented by this appeal is

whether the district court erred in holding that a form of notice

proposed by the Illinois Department of Public Aid adequately

details the basis for a reduction or cancellation of benefits to

persons participating in the Aid to Families with Dependent

Children Program. Because the notice fails to meet the

demands of procedural due process, we reverse.

1The Honorable John Minor Wisdom, United States Senior

Circuit Judge for the Fifth Circuit, sitting by designation.

of Illinois, Eastern Division

2la

This case was brought by a welfare recipient in her own

behalf and for a representative class challenging the practice of

the Illinois Department of Public Aid (“Department”) of

reducing or cancelling benefits under Title IV of the Social

Security Act, 42 U.S.C. §§ 601 ef seg., through “rebudgeting”

without notifying the recipients of the method by which the

revised reduction or cancellation was calculated.

AFDC benefits are determined on the basis of family size

and income, less certain expenses and deductions. Plaintiff

Dilda is an AFDC recipient whose benefits were reduced by the

Department. She was informed of the reduction when the

Department mailed her a form notice which stated: ‘The

Resource Consultant has re-budgeted your income and the

appropriate change has been made.” The calculations which

the Department used in redetermining plaintiffs grant were not

included in the notice.

The district court granted summary judgment in favor of

the plaintiffs, finding the Department’s notice inadequate under

the Due Process Clause for failing to include “‘an explanation of

how and why the plaintiffs AFDC grant was recomputed. .. .”

The Department was ordered to furnish plaintiffs and the court

with a form of notice which provided a “breakdown of income

and deductions so that the recipients could determine the

accuracy of the computations,” citing Banks v. Trainor, 525

F.2d 837, 842 (7th Cir. 1975), cert. denied, 424 U.S. 978

(1976). The district court enjoined the Department from

cancelling or reducing benefits to the class until they received

such notice.

Pursuant to the court’s order the Department filed with the

district court a proposed notice of the reasons for cancellations

or reductions of the AFDC grant. The district court approved

the proposed form of notice, which contains the following

statements.

22a

DEDUCTIONS

Your increased earned income from ___._ (new net

amount after deductions $ ______ ) is being applied to your

needs.

Your increased earned income (new net amount after

deductions—$ ) is being applied to your needs.

CANCELLATIONS

Because of your increased unearned income from

(new amount—$ ) your income now exceeds your

income maintenance needs.

Because of your increased earned income (new gross

amount before deductions—$ ), your income now

exceeds your income maintenance needs.

Nowhere in the notice was a provision made for revealing what

deductions were relied upon by the Department in calculating

the adjusted net amount. Plaintiffs moved to vacate the order

approving the Department’s notice. The motion was denied

and this appeal followed.

I]

Plaintiffs contend that under certain federal regulations?

and the Due Process Clause, the above notice is infirm. They

further contend that the district court, in approving the notice,

disregarded its own memorandum opinion granting plaintiffs

summary judgment.

Plaintiffs argue that the notice sent to recipients should

include the Department’s worksheets which reflect the

rebudgeting calculations so that they will be able to readily

determine if there was an error in the rebudgeting process.? The

worksheet used where excess income is earned contains a

statement of the recipient’s gross monthly earnings and the

allowable deductions. The form calls for completing the flat

245 C.F.R. §205.10(a)(i1)(B) and 45 C.F.R. § 2061.0

(a)(11)(4).

3 The worksheets appear in the Appendix of Plaintiffs at pp. 25-

26.

23a

grant amount and any other grants for special needs. It also

contains a section for the special needs. On the basis of this

information, the caseworker determines the amount of the

grant. A second worksheet is used by the Department to

calculate the amount of the grant where the excess income is

derived from renis received by the recipient. This worksheet

contains a statement of allowable deductions, including princi-

pal. interest, taxes. water, gas, electricity, and heat, and breaks

down the expenses into the recipient-landlord’s share and the

tenant’s share.

The Department maintains that the attachment of the

budget sheets to the notice sent to the class is not required either

by the regulations at issue or by the Due Process Clause.

According to the Department, the form notice which the district

court approved is sufficient notice because it contains “a brief

statement of reasons” for the proposed reduction or cancella-

uon of welfare benefits.

In the context of public assistance benefits, this court held

in Vargas v. Trainor, 508 F.2d 485, 489 (7th Cir. 1974), that

due process requires notice “stating the reasons for the pro-

posed action” be given to the recipient before his benefits can

be reduced or cancelled. Specifically, we found that a notice

which “merely showed the amounts of the components of the

recipient’s grant, as reduced by the proposed action, and did

not state the reasons for that action” failed to meet the

requirements of the Due Process Clause. Jd. at 490. Since the

Vargas decision. this court has held that the failure of state

authorities to provide public assistance recipients with detailed

notice. including “a breakdown of income and deductions so

that the recipients could determine the accuracy of the compu-

tations” may be a denial of due process. Banks v. Trainor, 525

F.2d 837, 842 (7th Cir. 1975). cert. denied, 424 U.S. 978

(1976). On the basis of Vargas and Banks, the notice approved

by the district court is insufficient. Though it states the ulumate

24a

reason for the reduction or cancellation of benefits, the notice

fails to provide the recipient with a breakdown of income and

allowable deductions. It is readily apparent from this notice

that, without these calculations, plaintiffs have little protection

against errors committed by the Department in determining the

amount of their grants. As the court recognized in Vargas:

Unless the welfare recipients are told why their benefits are

being reduced or terminated, many of the mistakes that

will inevitably be made will stand uncorrected, and many

recipients will be unjustly deprived of the means to obtain

the necessities of life.

Vargas, supra, 508 F.2d at 490.

Finally. we believe that the risk of erroneous calculations

by the Department far outweighs the increased burden on the

administration which. the Department contends, will occur if

the budgeting calculations are included in the notice sent to

plaintiffs. Due process can be satisfied by simply photocopying

the work papers and enclosing them with the notice approved

by the district court. The expense involved in fulfilling

plaintiffs” request. moreover, is trivial.

The judgment of the district court is reversed.

A true Copy:

Teste:

Clerk of the United States Court of Appeals

for the Seventh Circuit