# Appendix — Rosado v. Wyman

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0170%3A01

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1970
- **Citation:** 397 U.S. 397

## Text

SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1969
No. 540

JULIA ROSADO, ET AL.,

Petitioners,
- against -
| GEORGE K. WYMAN, ETC., ET AL.,
Respondents.

ON WRIT OF CERTIORARI TO THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT

| TABLE OF CONTENTS

A. Relevant Docket Entries ...............--005- 1
B. Complaint (Document No.1) .............005: 6

C. Order to Show Cause (Document No. 3)........... 25
D. Notice of Defendnats’ Motion to Convene Three

| Judge Court (Document No. 6)..............-5: 26

E. Telegram from Judge Weinstein to Hon. Robert
Finch, Secretary, Health, Education & Welfare
Gheenneh Fb GD awk vk eo nan hones wane cece 27

F. Telegram from Judge Weinstein to Hon. John
Mitchell, Attorney General (Document No. 9)....... 28

mE ANE? SAORI, DAES ALOE IES

(ii)
. Notice of Defendants’ Motion to Join Additional
ert res eee eee 29
. Letter from U.S. Attorney to Judge Weinstein
CI ee Noa WEN AS bk oe so de oes 30

. Revised Memorandum and Order of Judge Wein-
stein on Standing and Necessary Party (Original
Ss WI Us Son a bu 6 c's 8 66.0454 was 31

. Transcript of Proceedings of April 23, 1969 Before
Judge Weinstein (Testimony of Mitchell Ginsberg

and Jack Goldberg) (Document No.61) ........--- 37
. Letter from Judge Weinstein to Chief Judge
Lumbard (Document No. 20) ..............--- 71

. Memorandum and Order of Judge Weinstein
Convening a Three Judge Court and Issuing a

Temporary Restraining Order (Document No. 21) ... 72
. Temporary Restraining Order Pending Determina-

tion by Three Judge Court (Document No. 19) ..... 78
. Designation of Three Judge Court by Chief Judge

Lumbard (Document No. 22) ...........-2-4-- 79
. Defendants’ Answer (Document No. 28)........... 81

. Notice of Defendants’ Motion for Summary Judg-
ment and Statement Pursuant to Rule 9(g)
KS re eS Ce ee eee ee eee 86

. Affidavit of George W. Chesbro in Support of

Defendants’ Motion for Summary Judgment (and

Exhibits A, C, F, G, I, J, K Thereto) (Document

ke Perr ey errr re eco eT Cee 87

. Notice of Plaintiffs’ Motion for Summary Judgment
and Statement Pursuant to Rule 9(g) (Document
= BAe Tree ye or eye eee eee eee 120

. Tables III, IV, V from “Welfare in Long Island”
(Long Island Association of Commerce and

Industry) (Document No. 36) .........---+-+5- 125
. Defendants’ Supplemental Statement Pursuant to
Rule 9(g) (Document No. 38) ........----+505- 128

. Letter from Lee A. Albert to Judges Moore, Mishler
and Weinstein (Document No. 51)

BB.

cc.

DD.

EE.

FF.

See R A A

(iii)
Letter from Philip Weinberg to Judge Weinstein
(Document No. 42) ....-.--eeseee ee eerreecee 132
Memorandum and Order of Three Judge Court
Dissolving Itself (Document No. 43) .-.---------- 133

Temporary Restraining Order (Document No. 45)
and Order Granting Preliminary Injunction by '
Judge Weinstein (Document No. 58) ...---------> 137

Letter from George K. Wyman to James Callison ... - - 139
Letter from Lee A. Albert to Judges Moore
Mishler and Weinstein enclosing letter from

George K. Wyman to James Callison with
enclosure (Document No. 73) ..-----++--e++e00> 142

Revised Memorandum of Judge Weinstein Granting
Preliminary Injunction and Summary Judgment

(Original Document Nos. 57, 78) ---------+++7°° 167
Order by Judge Weinstein Granting Permanent
Injunction (Document No. 79) ..-.---+----++-07° 214

Opinion of United States Court of Appeals for the
Second Circuit Vacating Preliminary and Perma-
nent Injunctions, Reversing Summary Judgment
and Affirming Dissolution of Three Judge Court

(Document Nos. 65, 66, 67, [Court of Appeals])...-. 215
Judgment of Court of Appeals for the Second
Circuit (Document No. 68 [Court of Appeals]) ....- 259

Oral Argument of Lee A. Albert on Respond-

ents’ Motion to Convene a Three-Judge Court

on April 18, 1969 Before Judge Weinstein

(Document No. 59)...----2+eseecer etree 260

Transcript of Proceedings of April 23, 1969
Before Judge Weinstein (Testimony of Joseph
H. Louchheim) (Document No. 61) ...---++++++: 272

l
APPENDIX

A. RELEVANT DOCKET ENTRIES

1969, April 9th: Complaint filed. Summons issued.

1969, April 10th: By Weinstein, J. Order To Show Cause
filed with proof of service thereon why a preliminary in-
junction should not be granted enjoining defendant Wyman,
etc., from taking any steps toward implementing and from
putting into effect the system of “maximum monthly grants”
and schedules of need prescribed by N.Y. Social Services
Law Sec. 131-a, etc. (returnable April 15, 1969 at 10:00 A.M.)

1969, April 15th: Motion and memorandum of law filed,
to convene three-judge court. 4/15/69

1969, April 15th: Before Weinstein, J. — Motion for prelim-
inary injunction etc. adjd to Apr. 18, 1969 at 2:00 P.M.

1969, April 15th: By Weinstein, J. — copy of telegraphic
message sent to Hon. Robert Finch, Secty H.E. — & W.
Washington, D.C. re: preliminary hearing set for 2:00 P.M.
Friday, April 18, 1969, filed.

1969, April 15th: By Weinstein, J. — Copy of telegraphic
message sent to Hon. John Mitchell, Atty Gen., Washington,
D.C. re: preliminary hearing set for 2:00 P.M. April 18, 1969
filed.

1969, April 18th: Before Weinstein, J. — Hearing on motion
to convene three-judge Court — Court grants leave to defts
to move to implead U.S.A. as a party deft — if papers are
served no later than 5:00 P.M. April 21, 1969. Hearing
continued to April 23, 1969 at 2:00 P.M.

1969, April 23rd: Before Weinstein, J. — Hearing on mo-
tion for preliminary injunction etc. resumed — Motion to
dismiss as to National Welfare Organization and City-Wide
Co-ordinating Commission for lack of standing — Case now
to be captioned Rosado v. George K. Wyman — Motion
granted — Motion by State of New York to bring in the
Health Welfare and Education as a party deft — Motion

2

denied — Hearing continued to April 24, 1969 at 12:00
Noon.

1969, April 23rd: By Weinstein, J. - Memorandum & Or-
der filed (Standing of Organizations) Defts’ motion to dis-
miss as to the two Organizational pltffs for lack of standing
is granted. The Clerk is directed to strike the National
Welfare Rights Organization and Citywide Coordinating
Committee of Welfare Organizations from the caption of
this case. Henceforth, this case should be referred to as
Rosado, et al. v. Wyman, et al. 69-C-355. So ordered. (See
opinion & order)

1969, April 23rd: By Weinstein, J. - Memorandum & Or-
der (Necessary party) filed. Decision rendered, Defts’ mo-
tion to join H.E.W. as a necessary and indispensable party
is denied. So Ordered. (See memo and Order)

1969, April 24th: Before Weinstein, J. — Hearing on pre-

liminary injunction etc. Findings of fact were read into

record by the Court — and renders its decision — Temporary
restraining order granted — and granting motion for 3 judge

Court — Temporary restraining order in effect until 3 Judge

Court convenes — Court will file findings of fact and order
— Hearing concluded.

1969, April 24th: By Weinstein, J. -Temporary Restrain-
ing Order filed. It is ordered that, pending hearing and de- |
termination by a statutory three-judge court deft Wyman
etc. are hereby restrained etc.

1969, April 24th: Copy of letter to Judge Lumbard from
Judge Weinstein dated April 24th, 1969 re: recommend-
ing appointment of a three-judge Court. filed.

1969, April 24th: By Weinstein, J. - Memorandum & Or-
der — Three-Judge Court and Temporary restraining order.
filed. Decision rendered, the defts’ motion for the conven-
ing of a three-judge court and pltffs’ motion for temporary
restraining order are granted. Defts and pltffs are advised
to have their papers seeking summary judgment and all
other relief served and filed on April 29, 1969. The parties

a

]
'

——a ee ee enw 8 aM eee —_ Von

3

are granted until May 2, 1969 to submit reply papers
and briefs. All undecided motions will be referred to the
three-judge court. SO ORDERED. (P/C mailed to attys)

1969, April 25th: By Lumbard, Ch Judge U.S. Court of
Appeals, designating Hon. Jack B. Weinstein, to hear and
determine said cause: Hon. Leonard P. Moore, Hon. Jacob
Mishler. SO ORDERED. (P/C mailed to attys) (copy of
order sent of Judge Mishler, Judge Weinstein, and mailed
to Judge Moore)

1969, April 25th: Motion filed to join additional party.

1969, April 28th: Letter to Judge Weinstein, from U.S.
Dept. of Justice, dated April 23, 1969 filed.

1969, April 30th: Motion filed pursuant to Rule 56, and
defts’ memorandum of law for summary judgment in favor
of defts etc.

1969, April 30th: Answer of defts filed.

1969, April 30th: Motion and pltffs’ memorandum filed
pursuant to Rule 56, for summary judgment in favor of
pitffs and for a permanent injunction etc.

1969, May 2nd: Supplemental statement as to material facts
filed.

1969, May 2nd: Before Moore, C.J. — Mishler, J. — Wein-
stein, J. — Hearing on motion for summary judgment held.
Motion argued — Decision reserved.

1969, May 12th: By L. P. Moore, C. J. — Mishler, J. -
Weinstein, J. — Memorandum & Order filed. It is ordered
that the three-judge court heretofore convened be and is
dissolved and that the matter be and is remanded to the
single judge to whom the complaint was originally presented
for such further proceedings as are appropriate. SO
ORDERED. (See memo & order)(P/C mailed to attys)

1969, May 12th: By Weinstein, J. - Memorandum & Order
filed. The three-judge court in this action has been dissolved

etc. Since the order issued on April 24, 1969, etc. is no
longer in force, a new temporary restraining order in iden-

4

tical terms will be issued pursuant to Rule 65 etc. So or-
dered. (See memo and order) (P/C mailed to attys)
1969, May 12th: By Weinstein, J. — Temporary Restrain-
ing Order filed, etc.

1969, May 1Sth: Copy of letter to Hon. L. P. Moore,
Mishler, J. Weinstein, J., from Center on Social Welfare by
Lee A. Albert dated May 6, 1969.

1969, May 1Sth: By Weinstein, J. — Memorandum & Or-
der filed, for decision on summary judgment & temporary
injunction. Parties will submit proposed orders for a pre-
liminary injunction by 4:30 P.M. on Fri. May 16, 1969.
(See memo and order)

1969, May |l6th: By Weinstein, J. Order filed pursuant to
this Court’s Order & Memo of May 15, 1969 the temporary
restraining order is incorporated in and shall be a prelimi-
nary injunction adopted pursuant to Rule 65 preliminary
injunction is effective until final decision on the merits of
this case. Pitff shall file security in the sum of $1,000.00.
Defts motion for a stay of this preliminary injunction is
denied (see order attached on file of May 12, 1969) (P/C
mailed to attys)

1969, May 19th: Notice of Appeal filed

1969, June 18th: State administrative materials promulgated
pursuant to section 13l-a submitted by pltffs on June 10,
1969 filed.

1969, June 18th: Before Weinstein, J. — Hearing on mo-
tion for summary judgment held and concluded — Court’s
oral findings of fact and conclusions of law — Motion for
summary judgment granted to plitffs — Enjoins defts from
implementation of Sec. 13la of the Social Service Law as
amended — Denied defts’ motion for a stay of permanent
injunction — Order on oral decision and findings of fact as
modified orally to take effect immediately — Court denied
the stay in all respects upon application by defts. Pitffs to
submit an order for signature at 4:30 P.M. in accordance
with Judge's decision — Court directed defts to file a notice

_ — soiiaeenenieneannaenaial
5

of appeal before 4:30 P.M. (June 18, 1969) in accordance
with defts objections in the judge’s findings.

1969, June 18th: By Weinstein, J. — Memorandum & Or-
der filed. Pitffs’ motion for summary judgment is granted.
SO ORDERED. (See opinion and order) (P/C mailed to
attys)

1969, June 18th: By Weinstein, J. — Order Filed, that deft
Wyman, his successors in office, etc., are hereby enjoined
from implementing or utilizing said Sec. 131-a and, pursuant
thereto, from denying, reducing or discontinuing any ben-
efits in the form of either regular recurring grants or special
grants now available to receipents of Aid to Families with
Dependent Children in New York (including the quarterly
“flat grant” in New York City and special grants through-
out the State). This order shall take effect immediately.

1969, June 18th: By Weinstein, J. — This order is stayed
until 4:00 P.M. on June 19, 1969. SO ORDERED. (Order
endorsed at foot of above order ) (P/C mailed to attys)

6

B. COMPLAINT (Document No. 1)
UNITED STATES DISTRICT COURT
Eastern District of New York

National Welfare Rights Organization, Citywide Coordinat-
ing Committee of Welfare Organizations, and Julia Rosado,
Lydia Hernandez, Majorie Miley, Sophia Abrom, Ruby
Gathers, Louise Lowman, Eula Mae King, Cathryn Folk,
Annie Lou Phillips, and Majorie Duffy, individually, on
behalf of their minor children, and on behalf of all other
persons similarly situated, Plaintiffs,

- against - 69 Civ 355
George K. Wyman, individually and in his capacity as Com-
missioner of Social Services for the State of New York, and

the Department of Social Services for the State of New

York, Defendants.
I

Plaintifis on behalf of themselves and all other persons
similarly situated seek to have this court declare invalid
reductions in the amounts of public assistance grants man-
dated by New York Social Services Law § 131, as amended
Laws Ch. 184, March 31, 1969, and § 131-a, added Laws Ch.
184, March 31, 1969 (set forth in Exhibit A herein), and
to enjoin said reductions, on the ground that such redue-
tions are inconsonant with the Social Security et, 42
U.S.C. §§ 301 et seq. and the regulations promulgated
thereunder,

In addition, plaintiffs seek a declaration that the afore-
said Sections 131 and 131-a are in violation of the Four-
teenth Amendment to the Constitution of the United States
insofar as said sections have the effect of Cenving equal
protection of the law.

II

Preurtmary STaTeMENT

On March 29, 1969 the Legislature of the State of New
Yerk enacted § 13l-a which reduces by significant amounts
the *‘standards of need’’ and actual erants to be paid to
public assistance recipients in New York, as hereinafter
more fully set forth. Such reductions were made pursuant

—— —— ————

7

Complaint (Document No. 1).

to express legislative findings in the Act of a ‘spiraling
rise of publie assistance rolls and the expenditures there-
fer,’’ the ‘‘economie concern of the people of the State of
New York,’’ and the necessity for the legislature to set
“*the costs of delivering the needs of public assistance re-
cipients in the respective social services districts of the
states.’’ Law Ch. 184, §1, Mareh 31, 1969.

The aforesaid standards and maximum grants will be
fully impemented on July 1, 1969. On the same date, ad-
justments upwards of standards and grant maximums,
based upon the rise in the cost of living, are required to
become fully operative under Section 402(a)(23) of the
Social Security Act, 42 U.S.C. §602(a)(23) [hereinafter
sometimes referred to as Section 402(a)(23)]. This fed-
eral law, which was enacted January 2, 1968, requires that
the standards and maximums then in effect be increased by
July 1, 1969 while the New York statute requires the op-
posite result. .

The New York Act is in direct conflict with the require- .
ments of federal law, denies recipients of public assistance
in New York .the protections and entitlements afforded
them by federal law, and causes serious and irreparable
harm to said recipients. Moreover, as hereinafter more
fully set forth, the New York requirements unreasonably
and irrationally limit standards and maximuns of grants
to recipients who reside in Nassau County and elsewhere
outside of New York City to levels significantly lower than
those applicable to recipients who reside in New York City
despite similarity in living costs. The latter distinctions
violate federal statutory requirements mandating uniform
standards of need and maximum grants throughout the
state, set forth hereinafter and, additionally, the Equal
Protection Clause.

8
Complaint (Document No. 1).

lll

JURISDICTION

The jurisdiction of the Court is based upon:
(a) 28 U.S.C. $y 1331, 1337 and 1343.

(b) 28 U.S. C. $$ 2201 and 2202.

(c) 42 U.S.C. §§ 1983 and 19s8.

(d) United States Constitution, Article VI and the
Fourteenth Amendment.

The amount in controversy, exclusive of interests and
costs, exceeds $10,000,

IV

STATEMENT OF CLAIM

1, Pursuant to the Social Security Act of 1935, 42 U.S.C.
§) JUL et seq., New York cooperates with the Federal Gov-
ernment in providing public welfare assistance to needy
persons under a New York ‘‘state plan,’’ consisting of
state statutes and regulations and approved by the United
States Department of Health, Education and Welfare. In
order to participate in said program New York must com-
ply with all pertinent federal statutes and regulations.

2. Pursuant to the state plan, eligible individuals re-
ceive regular recurring semi-monthly or monthly checks
for food, rent and other items of basie subsistence.

3. Prior to September 1968, all recipients in New York
State were also eligible for ‘‘special needs’? grants to pro-
vide for lacking. deteriorated or outgrown items of furni-
ture, clothing, kitchen supplies, and other items. The

= ee ee

es seston

9
Complaint (Document No. 1).

provision for such grants recognized that the ‘‘regular and
_ recurring’’ grant did not provide sufficient monies to recipi-
ents to permit them to purchase or replace the needed
items which were the subject of the ‘‘special needs’’
grants.

4. Among other things, the ‘special needs’’ grants pro-
vided monies for the purpose of:

(a) Supplying families with an amount for home fur-
nishing and clothing consistent with a minimal standard
of health and decency at the time a family began receiving
public assistance and from time to time thereafter.

-(b) Replacing essential items of home furnishings and
clothing as they became worn out, unsafe, or a hazard to
health.

(c) Providing for telephones for those persons demon-
strating medical or other necessity, special dict require-
ments pursuant to doctor’s orders, restaurant meals for
those unable to cook at home, travel for welfare and medi-
eal business, layette for newborn infants, job-hunting
expenses, school fees, burial:expenses, and so forth.

5. On August 27, 1968, as the result of a substantial in-
crease in special needs grants in New York City because of
proper payments for legitimate needs, the City effectuated
under the guise of a ‘‘demonstration project,’’ a substantial
reduction in its expenditures and in the amounts paid to
many needy families by eliminating all special needs grants
for clothing and household furnishings and providing in-
stead a ‘‘special flat quarterly grant’’ totaling $100 per
year per recipient allegedly to cover the cost of such items.
Said ‘‘special flat quarterly grant’’ is an addition to the
“regular and recurring’’ grant. Recipients continued to
remain eligible for grants for the.items of special need
enumerated in paragraph (4)(c) above.

10

Complaint (Document No. 1).

6. The so-called ‘*special flat quarterly grant’? at no
time applied to persons residing in counties of New York
State other than those constituting the City of New York.
Recipients outside of New York City continued to be
eligible for all special needs grants. Thus plaintiffs herein
Duffy and Phillips continued to receive grants for special
needs under existing § 131 of the Social Services Law.

7. On or about March 29, 1969, the New York State
Legislature, which had previously authorized the State
Department of Social Serviees to establish grant levels,
adopted Social Services Law § 131-a and set its own stand-
ards of need and maximum grants, exclusive of rent and
fuel, for persons living in New York City as follows:

Number of persons in Household
For each
additional
One Two Three Four Five Six Seven person

70 $116 $162 $208 $254 $297 $340 $43

and the following standards of need and maximum grants
for recipients outside of New York City:

Number of persons in Household
For each
additional
One Two Three Four Five Six Seven _ person

$60 $101 $142 $183 $224 $257 $290 $33

As the result of this enactment, the amount for which
plaintiffs qualified under law are substantially reduced, as
is demonstrated in the tabulation set forth subsequently
herein. These reduced ‘‘maximum monthly grants’ will
become effective July 1, 1969, and the New York State

:
)
|
|

ees same eten

1]
Complaint (Document No. 1).

Department of Social Services.is now taking the appro-
priate administrative steps to allow for effective and com-
plete implementation throughout the State by July 1, 1969

8. By adopting Section 131-a, the Legislature lowered
the standards and significantly reduced the grants avail-
able to recipients in the following way, among others:

(a) Cost of living increments which had been added to
the ‘‘regular and reeurring’”’ grants subsequent to the en-
actment of Section 402(a) (23) in January, 1968 are wiped
out for nunerous families, and the families reduced below
standards existing in July 1967.

(b) The ‘‘special flat quarterly grant” for New York
City residents is abolished.

(c) All ‘special needs’’ grants for recipients living any-
where in New York State are eliminated.

(d) Recipients living in certain places outside the City
of New York, such as Plaintiffs Duffy and Phillips who
reside in Nassau County and who presently receive ‘‘regu-
lar and recurring’? grants equal to those living in New
York City because of equally high or higher living costs,
are even further reduced in the standards and grants.

9(a) On January 2, 1968, the Social Security Act was
amended by the addition of Section 402(a)(23), which in
its entirety requires that the States:

‘provide that by July 1, 1969, the amounts used by the

State to deten ine the needs of individuals will have
been adjusted \ reflect fully changes in living costs

since such amounts were established, and any maxi-
mums that the State imposes on the amount of aid paid
to families will have been proportionately adjusted.”’

si

12 |

Complaint (Document No. 1).

(b) The United States Department of Health, Educa- \
tion and Welfare has adopted the following regulation
pursuant to Section 402(a) (23):

‘“‘In the AFDC plan, provide that by July 1, 1969,
the State’s standard of assistance for the AFDC pro-
gram will have been adjusted to reflect fully changes ‘
in living costs since such standards were established,
and any maximums that the State imposes on the
amount of aid paid to families will have been propor-
tionately adjusted. In such adjustment a consolida-
tion of the standard (i.e., combining of items) may
not result in a reduction in the content of the stand-
ard. In the event the State is not able to meet need
in full under the adjusted standard, the State may
make ratable reductions in accordance with subpara-
grap (5) (viti) of this paragraph. Nevertheless, if
a State maintains a system of dollar maximums, these
maximums must be proportionately adjusted in rela-
tion to the updated standards.’’ 45 C.F.R. -§ 233.20(a)
(2) (ii), 34 Fed. Reg. 1394 (1969).

(ec) Section 402(a) (23) imposes two discrete obligations
on the states and contemplates a necessary two-step opera-
tion by the States to bring about the mandated results
on July 1, 1969. (1) The States shall take the necessary
steps so that standards of need ‘‘will have been’? adjusted
to reflect fully changes in living costs. (2) ‘maximums
that the state imposes on the amount of aid paid .
will have been proportionately adjusted.’? Recognizing.
that an adjustment in standards of need in light of changes
in cost of living necessarily requires study and analysis
of changes in living costs and that the adjusted standard
resulting from such study and analysis requires state legis-
lative change and substantial administrative adjustment.
Congress provided the period from January 1968 to July

13

Complaint (Document No. 1).

1969. Congress therefore mandated immediate prepara-
tion of adjustments in the standards used to determine
need so that by July 1, 1969, the amounts -paid to families
with dependent children would reflect fully changes in
living costs since the state standard had last been adjusted
prior to January 2, 1968, when Section 402(a) (23) became
law.

(d) The cost of living in the New York City Metro-
politan area (including Nassau County) has risen 7.7%
from July 1967, the last date prior to January 2, 1968,
when welfare benefits were increased by New York, until
February 1969. Section 131-a effectuates a substantial re-
duction, however, rather than the federally mandated in-
crease.

(e) New York has taken final legislative action in enact-
ment of its annual budget for -the fiscal year 1969-1970
which offends the two federal requirements in Section
402(a) (25). -Ignoring the applicable 7.7% increase in
living costs, New York has redetermined the needs of in-
dividuals downwards during the very period of federal
obligation in which the State must adjust need standards
to reflect fully changes in costs of living. Based upon
this unlawful_redeterminat’on of needs of individuals, New
York has further mandated dollar maximums on _ the
amounts of aid to be paid as of July 1, 1969, when the
federal statute requires that any such maximums will have
been proportionately adjusted to reflect the rise in living
costs. In so doing New York has mandated a result to
obtain on July 1, 1969, flatly contrary to the result speci-
fied in Section 402(a) (23) for that very date.

(f) New York has until now determined on some al-
legedly factual basis the needs of various families and then
paid that family the amount needed, taking into account
other resources of the family such as earned income and

I4
Complaint (Document No. 1).

OASDI benefits. On information and belief, no factual
study or attention to actual necd whatever underlay the
setting of the ‘*maximum monthly grants’? by the legis-
lature, although the statute says that ‘‘such schedules shall
be deemed to make adequate provision for all items of
need.’’ Rather the sole concern of the legislature was the
‘costs of delivering the needs of public assistance ro-
cipients,’’ in light of the “spiraling rise of public assist-
ance rolls and the expenditures therefore... .’? Laws
Ch. 184, §1, March 31, 1969,

10(a) United States Department of Health, Edueation
and Welfare regulation requires that state plans must:

‘*Provide that the standard [of assistance] will be
uniformly applied throughout the State.’? 45 CLF.R.
§ 233.20(a) (2) (iii), 311 Fed. Reg. 1394 (Jan. 29, 1969)
and

‘*Provide that payment will be based on the determi-
nation of the amount of assistance needed and that.
if full individual payments are precluded by maximums
or insufficient funds, adjustments will be made by
methods applied uniformly State-wide.’? 45 C.F.R.
§ 233.20(a)(2) (viii), 311 Fed. Reg. 1894 (Jan. 29,
1969).

(b) The standards of assistance and maximum grants
adopted by the Legislature in Section 131-a do not apply
uniformly, nor are the discriminations in amounts granted
based on any rational consideration of living costs. For
example, the living costs of plaintiffs and their class who
are residents of Nassau County are as high or higher
than those experienced by residents of New York City
and publie assistance grants to them were equal.

11. The current standard of assistance falls far short
of that necessary to maintain health and decency, as all

__ —— PAREN

15

Complaint (Document No. 1).

studies of this field confirm. The individuals and families
on public assistance who now live from hand to mouth
are now being buffeted by spiraling inflation and an in-
crease in the regressive sales tax. The reductions de-
scribed herein threaten profound irreparable injury in
that the reduced grants do not provide plaintiffs and their
class with the amount needed to subsist. This induces re-
cipients to cut back on current expenditures to save
against the decline in assistance grants as costs rise.

12. The reduction in the standard of need will render
ineligible for aid needy persons whose income and other
resources were just below welfare standards and will now
equal or exceed the reduced standard.

13. Unless this Court declares the reduction invalid and
enjoins the implementation thereof, the aforementioned
unlawful result. will obtain on July 1, 1969, and the Legis-
lature will be unable to act in timely fashion to comply
with the requirements of Section _——

V
PLAINTIFFS
1.(a) Plaintiffs are all citizens of the United States and
reside in the State of New York. Plaintiffs bring this ac-
tion, pursuant to Rule 23 of the Federal Rules of Civil
Procedure, on their own behalf and on behalf of all New
York individuals and families similarly aggrieved by the
unlawful reduction of public assistance grants pursuant to
Section 13l-a of the New York Soical Services Law in

violation of the Social Security Act and federal regula-
tions.

(b) Plaintiffs Duffy and Phillips are members of an
additional class of recipients of public assistance residing

16
Complaint (Document No. 1).

in Nassau County, and other urban and suburban counties
Other than those within the City of New York, whose
grants have been reduced below those of persons with
identical need in the City of New York in violation of the
Social Security Act and regulations promulgated there-
under, and the Fourteenth Amendment to the Constitution
of the United States.

(c) Plaintiffs bring this action as a class action because
the questions of fact and law are common to the plaintiffs
and the class they represent, the members of the class are
so numerous as to make joinder of parties impracticable,
the claims of the plaintiffs are typical of the claims of all
members of the class, the plaintiffs fairly and adequately
represent the claims of all the members of the class, the
defendant is acting on grounds generally applicable to
the entire class, the questions of law and fact common to
the class predominate over any questions affecting in-
dividual members, and class action will best provide for a
fair and efficient adjudication of this controversy.

2. The New York City Plaintiffs are presently receiving
regular monthly amounts for AFDC as set forth below and
are prohibited from receiving more than the following
amounts under the challenged statute. All amounts are
exclusive of rent.

Plaintiff Current Monthly Grant Maximum Grant
Under § 131-a
Rosapo $280 $254
HERNANDEZ $218 $162
MILEY $535 $469
ABROM $406 $340
GATHERS $382 $340
LowMAN $396 $383
Kine $482 $426

Fouk $337 $208

17
Complaint (Document No. 1).

3. The Nassau County Plaintiffs are presently receiving
the following amounts exclusive of rent. Needy individuals
in Nassau County presently receive assistance at the same
levels as individuals in New York City. Under the chal-
lenged law these plaintiffs will receive assistance at the
lower rates provided for all recipients residing outside
New York City.

; §131-a § 131-a
Current NY State NY City
Plaintiff Monthly Grant © Maximum Minimum
PHILLIPS $314.40 $224 $254
Durry $563.40 $389 $469

4. Plaintiff National Welfare Rights Organization was
formed in 1967 by recipients of public assistance to enable
them to learn of their rights and entitlements and to or-
ganize and to teach individuals in need of financial assist-
ance how they might go about getting the needed relief.
The membership of NWRO includes more than 30,000
households, and 200 affiliated groups in 70 communities in -
37 states.

5. Plaintiff City Wide Coordinating Committee of Wel-
fare Organizations was formed in 1966 by welfare recipient
for the purpose of assisting all needy individuals to receive
the grants to which they are legally entitled. City-wide is
the coordinating agency for neighborhood welfare organi-
zations in New York City and it has over 4,000 members.

VI
DEFENDANTS

1. ‘The Defendant State Department of Social Services,
under New York Social Services Law § 20, has primary

—7

responsibility for promulgating regulations and instituting
procedures for the administration and distribution of pub-
lie assistance in New York State, in accordance with the
requirements of the federal Social Security Act, the Social
Services Law of New York, and the Constitutions of New
York and the United States.

18

Complaint. (Document No. 1).

2. Defendant George K. Wyman, as Commissioner of
the Department of Social Services of the State of New
York, has primary responsibility for the administration of
that Department in compliance with the law. New York
Social Services Law, § 34.

Vil

As a first cause of action, plaintiffs allege:

1. Section 402(a)(23) of the Social Security Act re-
quires that:

**. . . by July 1, 1969, the amounts used by the State
to determine the needs of individuals will have been
adjusted to reflect fully changes in living costs since
such amounts were established . . .”’

2. By enacting Section 13l-a, New York State has set
standards which are ‘‘deemed to make adequate provisions
for all items of need. In fact this legislation constitutes a
downward revision in standards in direct violation of See-
tion 402(a)(23) and therefore should be declared invalid
and defendants should be enjoined from implementing such
reduction for plaintiffs and members of their class, pur-
suant thereto.

Vill

As a second cause of action, plaintiffs allege:

19
Complaint (Document No. f).

1. Section 402(a)(23) of the Social Security Act pro-
vides that:

. by July 1, 1969, . . . any maximums that the
aie imposes on the amount of aid paid to families
will have been proportionately adjusted [to the cost-
of-living inerease].’’

2. Section 131-a, in adjusting maximums on the amounts
paid to plaintiff families, in accordance with redetermina-
tions of need which reflect anything but ‘‘changes in living
costs,’’ thereby reducing actual benefits paid, is in direct
violation of Section 402(a)(23) and therefore should be
declared invalid and defendants should be enjoined from
implementing such reduction of bencfits pursuant thereto.

‘ Ix
As a third cause of action, plaintiffs allege:

1. The regulations of the Department of Health, Edu-
-eation and Welfare, 45 C.F.R. § 233(a)(2) (ii), 34 Fed.
Reg. 1394 (1969) provide that in making the cost-of-living
adjustment

«| . a consolidation of the standard (i.c., die

of items) may not result in a reduction in the content
of the standard... .”’

2. Section 13l-a constitutes such a forbidden ‘‘reduc-
tion in the content of the standard,’’ in that it eliminates
provision for major items of clothing and furniture which
is now made through special needs grants outside New
York City and the $100 per year ‘‘special flat quarterly
grant’? in New York City. Amounts contained in the reg-
ular recurring grant to provide for the greater expenses
of feeding and clothing older children are also eliminated.

20
Complaint (Document No. 1).

Grants available throughout the State for telephones, spe-
cial diets, expenses incident to employment, age, disability,
pregnancy, education and training, replacement of lost or
stolen checks, moving expenses, rent sceurity, extermina-
tion, ete., are now impermissible.

3. Section 13l-a is indirect violation of the federal reg-
ulation and therefore should be declared invalid and
defendant should be enjoined from implementing a redue-
tion of benefits pursuant thereto.

X

As a fourth cause of action, plaintiffs allege:

1. Section 131-a violates the Social Seeurity Act of 1955
and the regulations made pursuant thereto because it is not
a plan of uniform statewide application in that public
assistance recipients in Nassau County and other non-New
York City areas are singled out for special, unfavorable
and discriminatory treatment.

2. Section 402(a)(1) of the Social Seeurity Act, 42
U.S.C. § 602(a)(1), requires that a state plan ‘‘shall be in
effect in all political sub-divisions of the state, and, if ad-
ministered by them, be mandatory upon them.’’ As in-
terpreted by the Department of Health, Edueation and
Welfare in its ‘‘Handbook of Publie Assistance Admin-
istration’’ (the binding federal regulations of the United
States Department of Health, Education and Welfare),
the statute requires that the plan ‘‘shall . . . provide for
administration in accordance with standards that are
mandatory and equitable throughout the State.’’ Pt. II
§ 4200(1) (1964).

—_ rea OCE ARCMIN SAA ANH

21
Complaint (Document No. 1).

3. On January 29, 1969 the Department of Health, Edu-
eation and Welfare promulgated 45 C.F.R. § 233.20, 34
Fed. Reg. 1394, which provides in pertinent part:

§ 233.20 Need and Amount of Assistance

a) Requirement for State Plans. A State Plan for
OAA, AFDC, AB, APTD OR AABD must, as
specified below:

1. General. Provide that the determination of
need and amount of assistance for all applicants
and recipients will be made on an objective and
equitable basis. .

2. Standards of Assistance. (i) Specify a State-
wide standard, expressed in money amounts, to
be used in determining (a) the need of ap-
plicants and recipients and (b) the amount of
the assistance payment.

(iii) Provide that the standard will be wey
applied throughout the State.

4. Although the legislative findings ona purpose of the
March 29, 1969 Act state that the reductions ‘‘will pro-
mote greater unifurmity and equality of treatment,”’
plaintiffs Phillip and Duffy, both residents of Nassau
County, will receive substantially less public assistance -
_-under Section 13l-a than persons. identically situated but
living within New York City.

5. The cost of living in Nassau County is as high as in
New York City. The United States Department of Labor
in its statistical analysis of the cost of living makes no
distinction between costs in New York City and neighbor-
ing counties. The same supermarket chains and depart-—
ment stores service both areas and charge substantially

22
Complaint (Docwment No. 1).

the same prices for all items including basic necessities in
both New York City and Nassau County.

6. Defendant Wyman recognized this absence of cost of
living differential in promulgating Section 352.4 of Title
18 of the New York Code, Rules and Regulations which
established identical standards of need for public as-
sistance recipients living in New York City and Nassau
County.

7. On information and belief, there was neither experi-
ence, information or evidence brought before either house
of the New York State legislature or any committee thereof
justifying or warranting a legislative finding that there
was an actual cost of living differential between New York
City and Nassau County.

8. Section 131-a is in direct violation of the federal re-
quirement that standards will be uniformly applied
throughout the State, in that it sets different and lower
standards for residents of Nassau County and elsewhere
without regard to their equal need, and therefore should
be declared invalid and defendants should be enjoined
from implementing a reduction of benefits pursuant
thereto.

XI

As a fifth cause of action, plaintiffs repeat and reallege
the allegations contained in couats one through four hereof
with the same force and effect as if herein fully set
forth, and allege:

1. Section 13l-a has set schedules of grants and
‘‘deem[s]’’ them ‘‘to make adequate provision for all
items of need.’? This was done for the sole purpose of
saving money without regard to the actual cost of living in

$$

—

—-

| ee ee

23

Complaint (Document No. 1).

the State and without consideration of objective studies
which are required by the various federal meat pre-
viously set forth.

2. Section 13l-a is in direct violation of the require-
ments of the Social Security Act and the regulations
adopted thereunder, and therefore should be declared in-
valid and defendants should be enjoined from implement-
ing a reduction of benefits pursuant thereto.

XII

As a further claim for declaratory relief, plaintiffs
Phillips and Duffy, on behalf of all members of their sub-
class residing in Nassau County repeat and reallege the
allegations contained in count four herein with the same
force and effect as if herein fully set forth, and allege:

1. There is no legitimate or rational purpose served by
discriminating against public assistance recipients living
outside of New York City, and more particularly in Nassau
County. |

2. Section 131-a denies plaintiffs Phillips and Duffy and
all members of their sub-class the equa] protection of the
laws in violation of the Fourteenth Amendment and there-
fore should be declared invalid.

XIII

Plaintiffs have no adequate remedy at law. Defendant
will continue to cause, and threaten to cause, irreparable
injury unless enjoined forthwith.

Wuererore, plaintiffs respectfully pray on behalf of
themselves and all others similarly situated, that this
Court:

1. Enter preliminary and permanent injunctions enjoin-
ing the defendant, his successors in office, agents and em-

24
Complaint (Document No. 1).

ployees, and all other persons in active concert an
participation with them, from enforcing or taking any
steps in any way toward implementing, and from putting
into effect, the system of ‘tmaximum monthly grants’
and schedules of need prescribed by New York Social Serv-
iees Law § 13l-a, added by Laws Ch, 184, March 31, 1969,
on the ground that said grants and schedules are in viola-
tion of and inconsistent with the requirements of the
federal Social Security Act and regulations promulgated
thereunder.

2. Enter a declaratory judgment holding that the said
New York Social Services Law § 131-a violates the federal
Social Security Act and regulations promulgated there-
under and is therefore invalid in that it redetermines need
standards downward rather than upward in aecordance
with changes in living costs as required, creates maximums
which decrease rather than increase the amounts paid to
families, and contracts the content of the standard of need,
and sets standards without objective study.

3. Enter a declaratory judgment holding that New York
Social Services Law § 13l-a denies plaintifis residing in
the Greater New York areca but outside the City of New
York rights, privileges and immunities secured by the
fourteenth Amendment to the Constitution of the United
States, the federal Social Security Act and regulations
promulgated thereunder, insofar as the said Section 131-a
reduces benciits for persons in the greater New York City
area but outside the City of New York even further than
for City residents despite the similarity in needs and cost.
of living for the two groups of recipients.

+. Allow plaintiffs their costs herein and grant them
and all other persons similarly situated such additional or
alternative relief as the Court may deem to be just and
appropriate.

* * * * * *

a ttn
25

C. ORDER TO SHOW CAUSE (Document No. 3)

[Title Omitted in Printing]

Let Defendants show cause in Courtroom No. 10 of the
United States Courthouse, 225 Cadman Plaza East, Brooklyn
New York, on the 15th day of April 1969, at 10:00 a.m.
or as soon thereafter as counsel may be heard, why a pre-
liminary injunction should not be granted enjoining defend-
ant Wyman, his successors in office, agents and employees,
and all persons in active concert and participation with
them, from taking any steps toward implementing and from
putting into effect the system of “maximum monthly
grants” and schedules of need prescribed by New York
Social Services Law § 131-a, added by Laws Ch. 184, March
31, 1969, on the ground that implementation of such system
and schedules will result in reduction of benefits in violation

, of Section 402 (a) (23) of the federal Social Security Act,
42 U.S.C. 602 (a) (23), and related sections, and regulations
promulgated thereunder.

Plaintiffs have alleged that they are suffering, and are
threatened with, irreparable injury as the result of the pend-
ing implementation of the said New York Social Services
Law § 13l1-a, in the annexed complaint and affidavits of
Louise Lowman, dated April 6, 1969; Sophia Abrom, dated
April 6, 1969; Anne Lou Phillips, dated April 7, 1969;
Marjorie Duffy, dated April 7, 1969; Eula Mae King, dated
April 8, 1969; Cathryn Folk, dated April 6, 1969; Marjorie
Miley, dated April 6, 1969: Julia Rosado, dated April 7,
1969; and Lydia Hernandez. dated Ageil 7. 1969. It is also
alleged in the anecucd affadewit of Lee A. Albert, an
attorney for plaintiffs. dead Aguil 9 1969. that imme-

Re

or
before Aged 75. 908 am thom thr mucus mm themefits man-
dated by the sdioneauidl) Sect —,.

95

‘Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

1968 cost of living adjustment on which these figures are
based. The following chart shows the anticipated effect of
§131-a on the actual amounts to be received by recipients,
exclusive of rent and fuel:

-Increase Decrease No Change

Slane Yoak City ..... 415% 581% 04%
Other Counties ..... 49% - §1% ape

The schedule of grants, it must be emphasized excludes
rent and fuel, which are allowed separately. These
amounts are, of course, continually increasing and must be
calculated as part of the Department’s total expenditure
of welfare allowances although not reflected in the grants
established by the statute. The following chart démon-
strates average rent increases (Bureau of Labor Statistics
_—

' New York City Buffalo
Sicieane Feb. 1967-Feb. 1968 ...... 2.24% 1.74%

Increase Feb. 1968-Feb. 1969 ...... 3.16% 2.85%

Median rents in New York City have increased from
$74 in 1960 to $85 in 1965 and $96 in 1968, a 13% increase
in the past three years. The average rent for a welfare
family of 4 as of 1968 is $83.90 in New York City, the figure
used in arriving at ~ $20S monthly in the statute. See
p. 7, supra.

In addition to the aeeatiecs grants, rents and fuel, the
Department is in the process of arranging for the absorp-
tion of other expense of welfare recipients, prev iously paid
for through special grants, such as moving, security de-
posits, etc. on a precharge of services basis under which
the local Department will pay outright for these services
over and above the grant to the recipient. This too will
inure to the benefit of the recipient over and above the

96

Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

grants. By letter dated April 16, 1969, HEW, as part of
its administrative proceeding pursuant to 42 USC § 601
to determine whether or not to approve the level of benefits
contained in § 131-a, has requested the Department to pre-
vide information in detail as to numerous facets of the new
statute. A copy of this letter is annexed hereto as Exhibit
ed A de

The Department’s reply to this letter is in the process
of preparation.

Plaintiffs’ contention here that § 131-a is violative of the
requirements of § 602(a)(23) will of necessity be one of
the subjects passed on in the administrative determination
to be made by HEW. It is plain, however, that the adop-
tion of SA-1, 2 and 3 in August, 1968 based on a complete
readjustment on levels of benefits throughout the State in
order to reflect cost of living increases, constituted com-
plete compliance with that statute, and that §131-a main-
tains this level with adjustments made to achieve adminis-
trative simplicity and streamline the process of computing
allowances in order to free employees for counseling duties,
and improve the self-respect of the recipient by ending
the need to request special grants. The Legislative finding
made when $13l-a was enacted (L. 1969, ch. 184, §1),
specifically states:

‘*A uniform schedule of monthly grants and allowances
will promote greater uniformity and equality of treat-
ment of the recipients of public: assistance, meet the
needs of our less fortunate citizens and simplify and
reduce the administrative detail. This will release
caseworkers for the more important task of providing
casework services to restore recipients to the dignity
of self-sufficiency. The legislature therefore finds and
declares that it is necessary and in the best interests
of the people of the state to establish a schedule of

97

Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

maximum monthly grants and allowances of public
assistance for all other local social services districts
in the state, based upon the costs of delivering the
needs of public assistance recipients in the respective
social services districts of the state, and to make other
remedial changes provided for in this chapter.’’

Likewise, the Report of the Joint Legislative Committee To
Revise the Social Welfare Law of New York State (1969
Leg. Doc. 9) specifically referred to the state’s concern
over the size of caseloads of Social Services employees—a
problem, it is anticipated, which will be materially lessened
by reduction in processing which should be possible when
special grants are eliminated.

Section 13l-a (5) explicitly requires annual determina-
tion by the Department of changes in the cost of living and
a report thereof to the Legislature. This is not merely a
one-time requirement for adjustment based on the cost
of living as was provided for by §602(a) (23), but an ex-
press Legislative mandate for determination by the De-
partment and consideration by the Legislature of the cost
of living on an annual basis in order to maintain flexibility
in keeping the amounts of grants keyed to the cost of
living.

Plaintiffs also challenge the distinction in payments as
between New York City welfare recipients and those in
the remainder of the state as violative of the equal pro-
tection clause. Previously the State had been divided into
three categories by counties.* As we have seen, Bureau
of Labor Statistics figures and Department computations
were used to determine the statewide standard. Then
utility costs were computed and the State divided into three

* A few cities and one town constitute separate Social Services
districts.

98

Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

areas based solely on disparities on such costs. This cre-
ated distinctions between essentially similar areas. Thus,
the Cities of Buffalo, Rochester and Syracuse were each
in a different category and recipients therein received dif.
ferent allowances. In reality, levels of publie assistance
varied substantially within the State despite the ap-
parent similarity in allowance levels. The Department’s
1968 figures indicate the following wide variance in real
payments made (exclusive of rent and fuel) :

MontTHLY AVERAGE PayMENTs PER ReEcEIPT

Urban
New York Suburban Upstate Remainder
City Counties Counties of State

ADC $72.28 $69.32 $50.51 $39.07

ADC-Unemployed $72.89 $57.68 $42.40 $34.92
Fathers

Medical Assistance $123.57 $91.55 $69.65 $57.48

Home Relief $43.68 $39.53 $27.54 $20.11

These figures reflect a pattern of substantial higher
amounts received by New York City welfare recipients,
more than double the average received in rural counties in
many categories of public assistance. This results from the
wide variety of practices of local districts regarding special
grants, the greater availability of information in New York
City, greater accessibility of welfare Offices, the recipients’
attitude toward welfare and their degree of organization,
their resultant sophistication and willingness to take advan-
tage of opportunities within the system.

Consequently, when consideration of the standards em-
bodied in §131-a took place, the Legislature determined
to provide a higher standard for New York City to reflect

a a

on

99

‘Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

this real differential, accurately described by the City De-
partment as a function of ‘‘high social cost of living in
the urban center’? (Exh. ‘‘D’’, p. 4).. The Department’s
experience has shown that the results are that New York
City welfare recipients’ actual expenses substantially ex-
ceed those of recipients in the remainder of the State.
This is due to.their higher level of aspiration, greater ex-
pectations, the effects of living in a great metropolitan
center, and the availibility of and need for more recrea-
’ tional facilities than in a suburban or rural environment
where children have more space in which to play. New
York City life, realistically, in the experience of the De-
partment, includes transportation to beaches, museums,
and parks. It includes a higher crime rate which requires
safety locks, greater loss of money and material through
burglaries, as well as higher laundry expenses due to soot
_and the like. ;

Moreover, the Legislature was plainly entitled to con-
sider the sheer number of welfare recipients for New York
City—889,000 out of 1,211,000 in the State* and in ‘the
ADC program 657,000 out of §87,000. It is undeniable
that the City warrants special consideration and the Legis-
lature was simply recognizing this fact. In New York
City per capita welfare expenditures, per total population
amounted to $66.12; the statewide average is $39.12 and,
by comparison Nassau County is $13.83. Not one of the
57 counties outside New York City was above the state-
wide average figure. A chart setting forth these averages
is Exhibit ‘‘H’’, annexed hereto.

The resultant legislative determination was to establish
separate schedules for New York City and for the re-

* 1968 monthly average; Department figures.

100

Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

mairder of the State, in keeping with the traditional legis-
lative distinction between the City and the remainder of
the State exemplified by the Multiple Dwelling Law, nu-
merous provisions of the Code of Criminal Procedure, the
structure of the courts, and others. It was particularly
appropriate where the vast majority of welfare recipients
are within the City and where it would have been difficult
administratively to intelligently draw the line between the
various counties outside the City which would have
matched allowances to the actual cost of living in that
county. It is to be noted that in this State the Bureau of
Labor Statistics cost of living figures are computed only
for New York City and Buffalo.

This statute constituted a legislative method of adopting
current cost of living standards while reducing time and
effort spent in investigation and calculation of individual
amounts of allowances, a process wasteful of time and
money and found by the Department to be degrading to
the recipient, as well as subject to the vagaries of case-
workers, their supervisors and local administrators. The
statute must be viewed in the context of fiscal realities.
New York’s payments to ADC recipients are the highest in
the United States (see chart, Exh. ‘‘I’’, annexed hereto).
New York pays eight times the sum provided by Missis-
sippi and more than double the amount paid by any of the
southeastern or south central states. The proportion of
New York’s population receiving ADC is likewise the high-
est in the country (see chart, Exh. ‘‘J’’) as is the amount
expended per inhabitant for ADC payments (see chart,
Exh. ‘‘K’’). This amount is more than double that of 46
of the 49 other states. The number of people receiving
ADC allowances is also rapidly increasing from year to

101

Affidavit of George W. Chesbro, in Support of Defendants’
Motion for Summary Judgment (Document No. 26).

year. New York City shot from 360,000 to 600,000 between
January, 1966 and July, 1968 (see chart, Exh. ‘‘L’’).*

New York also receives the minimum federal assistance
of 50% of its public assistance, in contrast to many states
which receive as much as 65% under the sliding scale of
federal payments established by 42 USC § 603, which in
eect substantially subsidizes those states paying the
skimpiest allowances (see chart, Exh. ‘‘M’’).

In the light of these statistics, the Legislature was
plainly reasonable in acting to reduce administrative ex-
penditures inherent in the special grant approach and sub-
stitating the simplified flat grant method. This was in full
conformity with applicable federal law and _ plaintiffs’
challenge to the statute must fail.

WuererorE, your deponent respectfully prays that the

~ instant motion for summary judgment in favor of defend-

ants be granted in all respects.

(Sworn to by George W. Chesbro, on April 28, 1969.)

Figure 2, Staff Report to Joint Legislative Committee To Re-
Social Services Law, prepared by Lawrence Podell, Ph. D.,
Professor, Center for Study of Urban Problems, Bernard M.
Baruch College, City University of New York, Nov. 1968.

i.

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Exhibit C
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CHART 2.
: AlO TO FAMILIES WITH CEPENDENT CHILCREN: IMONTHLY COST STANDARD FOR t
BASIC NEEOS OF A FAMILY CONSISTING OF FOUR RECIPIENTS AND AMGUNT PAID
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cost aout DOLLARS
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107
Exhibit F

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108

Exhibit G

April 16, 1969
Re: Chs. 184, 186, 187 of
the 1969 Laws: A. 6935

Mr. George K. Wyman
Commissioner

State Department of Social Services
P. O. Box 1740
Albany, New York 12201

Dear Mr. Wyman:

This is in response to your request for our review of legis-
lation recently enacted in New York State relative to the
Public Assistance and Medical Assistance Programs. We
are addressing ourselves in this communication to what
appear to be the most significant questions raised with
respect to Federal implications, in these measures. We
are continuing our review of this legislation and, if neces-
sary, we will communicate with you further with respect to
any other matters which would appear to merit your care-
ful attention in implementation.

Ch. 184—Section 1 and 5—Maximum Monthly Grants and
Allowances

Our primary question as to these sections relates to their
operation and effect in the AFDC program. As you know,
section 402(a)(23) of the Social Security Act, which be-
came effective January 2, 1968, requires that ‘‘by July 1,
1969, the amounts used by the State to determine the needs
of individuals will have been adjusted to reflect fully
changes in living costs since such amounts were estab-
lished, and any maximums that the State imposes on the
amount of aid paid to families will have been proportion-
ately adjusted.’’ This requirement is reflected in the

I AI

109
Exhibit G.

provisions of SRS Program Regulation 20-7, section °

933.20(a) (2) (11). Section 13l-a of New York’s Social
Services Law as amended establishes schedules of maxi-
mum monthly grants and allowances. This provision will

raise a question of conformity with the Federal require-
ments unless the State can establish the following:

(a) That the State has a need standard in effect in
its AFDC program on July 1, 1969 which has been
adjusted since January 2, 1968 to reflect fully
changes in living costs;

(b) That the maximums mandated by the statute re-
flect the required proportionate adjustment to the
adjusted standard of need;

(c) That payments in the AFDC program will be
based on need or a ratable reduction arrived at by
methods applied uniformly throughout the State.

The statutory maximums are in flat amoucts according to
the number of persons in the household. In order to
evaluate State’s compliance with section 402(a) (23) of the
Social Security Act we will need full information as to
the relationship, if any, between the new maximums and
the methods previously applied in determining the stand-
ard of need (and payment) in New York’s AFDC program.
We will also necd supporting data in your plan materials
for all of the Public Assistance programs demonstrating
that the differentiation in maximums between New York
City and all other areas of the State is not inconsistent
with statewideness requirements. are

We have further noted the provision in section 131-a(4)
that local districts are ta be permitted, with your approval,
to adopt ‘‘a schedule of monthly grants and allowances for
lesser amounts than established by the regulations of the
department, subject to (the maximums) if... (it is estab-

110
Exhibit G.

lished) to the Commissioner that in such district the total
cost of the items required to be provided and reflected in
the schedule, actually is less than the schedule of monthly
grants and allowances established by the regulations of the
department.”’

In this connection, we would call your attention to the
provisions of the above-mentioned Program Regulation
20-7 which require that all State plans for OAA, AFDC,
AB, APTD, or AABD must specify a statewide standard
to be used in determining need and the amount of the
assistance payment which will be uniformly applied
throughout the State. (S233.20(a)(2)(1), (iii)). While
variations in amounts used in determining need and pay-
ments may be justified on the basic of differences in the
cost of living in local areas, this is a factor to be taken into
consideration in establishing the statewide standards which
could then be applied uniformly in all areas with the same
characteristics. Section 13l-a(4), however, would appear
to allow variations based on consideration of conditions
in one locality alone without regard to its relationship to
other localities within the State. Accordingly, unless this
section may be interpreted as permitting you to establish
standards for granting of a local variance which would
allow its application in a manner consistent with uniform
application of a statewide standard, a question of con-
formity with Federal requirements may be presented.

Ch. 184, Section 8—Special Provisions to Avoid Abuse of
Assistance and Care

By virtue of establishment of a presumption that any ap-
plicant for AFDC who entered tne State within one year
prior to the date of application entered the State for the
purpose of receiving public assistance or care, this section
requires any such applicant to prove as a condition to his

_' ment. We recognize that consideration of this question

111
' Exhibit G.

establishment of eligibility that his entry was not for such
purpose. Of course, such provision must be implemented
consistently with the requirement of section 402(b) of the
‘Act that aid must be provided where the family has resided
in the State for one year, irrespective of the purpose of
coming to the State, and aid must be provided with respect
to an otherwise eligible child who has resided in the State
for one year immediately preceding the filing of an ap-
plication regardless of when the applicant relative entered
the State. We would add that any acceptance of this pro-
vision is based on the authorization of durational residence
requirements under the Social Security Act.

You may wish to consider whether the establishment of a
presumption which would require the applicant to prove
that he did not intend to claim assistance at the time he
entered the State is supportable as a reasonable condition
of eligibility. While a condition which excludes from
eligibility those individuals with less than one year’s resi-
dence who have been found to have entered the State with
the intention of claiming assistance might be viewed as
establishing a lesser disqualification than an absolute resi-
dence requirement and therefore as being comprehended
within the statutory authorization of residence require-
ments, the accomplishment of such effect through operation
of a presumption against the applicant introduces an addi-
tional factor which could possibly affect the ultimate
determination as to its reasonableness and equitable treat-
involves a balancing of many factors including the tests
which will be applied in determining the degree and type
of proof required to overcome the presumption, and there-
fore are not suggesting any conclusion on the basis of the
legislative language alone. Rather, we are calling this to
your attention at this time to assure that the fullest possi-

112
Exhibit G.

ble consideration is given to all possible ramifications of
this provision in your planning for its implementation on
May 1. Implementing plan material would have to assure
that that provision can be administered in accordance with
objective standards.

We would also appreciate your advice as to the intent of,
and effect to be given to, the requirement that such an ap-
plicant submit with his application a certificate from the
local employment office stating that such office has no order
for an opening in work of any kind to which such applicant
could properly be referred. If it is intended that the ab-
sence of such certificate would necessarily lead to a denial
of the application, we have some question as to whether
this would constitute a reasonable condition of eligibility,
inasmuch as the existence of job openings does not neces-
sarily mean that the applicant can obtain a job, and has
no need for assistance, Thus, the applicant might well be
unable to produce such a certificate because there are open-
ings to which he or she can be referred and he or she may,
in fact, have pursued such referrals without success. If
the section would require denial in such case, it would
appear to be unreasonable. A similar question would be
raised if the provision would require denial of assistance
where a responsible relative is unable to accept employ-
ment to which he has been referred because of inability to
arrange adequate day care for the children. Similar com-
ments apply to $133(4)(a) as amended by section 4 of
Ch. 184, providing that no assistance shall be given to an
employable person if he fails to file every two weeks a cer-
tifeate that the employment office has no order for an
opening in employment in which he is able to engage.

Furthermore, we assume that the requirement in section
139-a(2) that a determination be made within thirty days
is intended for the protection of the applicant only and that

113
Exhibit G.

it is not intended to and would not have the effect of
placing any time limitation on the applicant’s opportunity
to submit evidence or otherwise take whatever steps are
necessary to prove his intent.

Ch. 184, Section 16—Limitation on Nursing Home Care

This section appears to provide, with respect to the med-
ically needy, that care in nursing homes operated by a
State agency will be provided without limit of days,
whereas care in other nursing homes will be limited to
100 days during any spell of illness, subject to an extension
of 100 days in cases of clear need for extended care. This
provision thus establishes that the amount of nursing home
care provided under the statute is 365 days a year if
needed, A question is raised under section 1902(a) (1)
and (8) of the Social Security Act which requires that as-
sistance provided under the plan shall be furnished to all
eligible individuals in the State who need it. Is there any
assurance that there are sufficient available nursing home
beds in State facilities to accommodate all eligible indi-
viduals who need care beyond 100 (or 200) days? In addi-
tion, a serious question will be presented under section
1902(a) (23),. effective July 1, 1969, which provides that
any individual eligible for medical assistance may obtain
it from any institution qualified to perform the services
required. Where an individual needs year-round nursing
home care, he would not seem to have ‘‘freedom of choice”’
of institution if the State will support the needed care only
in State-operated facilities. ,

‘Furthermore, even if the limitations on nursing home care
were otherwise acceptable we would need information on
the circumstances under which individuals who are med-
ically needy and require care beyond the limited number of
days may qualify as categorically needy. We would need ©

114
Exhibit G.

assurance that individuals who can pay for some but not
all of their nursing home care will be eligible for payment
of the balance after their ‘‘excess’’ income and resources
have been applied.

Ch. 184, Section 16—Determination of the Scope
of Services Available Under Title XIX

In this respect, we would appreciate your verification of
the fact that the changes with respect to the amount,
duration and scope of services will not result in a redue-
tion from the level of care available to the categorically
needy under your assistance plans as in operation prior
to establishment of the Medicaid program. (Sec. 1902(c)
of the Act)

Ch. 184, Section 20—Freezing Rates of Payment
for Hospital and Health-Relatdd Services

A serious question as to the conformity of your Title XIX
plan with Federal requirements is raised by the provisions
of this section, which became effective March 30, 1969,
and which will require that the payment for hospital and
health-related services provided to Title XIX recipients
be made until June 30, 1971 at the rate of payment, estab-
lished pursuant to section 2807 of the Public Health Law,
which was in effect on March 31, 1969. As you know,
section 1902(a)(13)(D) of the Act requires that a State
plan provides for payment of the reasonable cost of in-
patient hospital services. A requirement that payment for
such services be made for over a two-year period at a
fixed rate, not subject to adjustment, which was established
on the basis of costs at the beginning of the period, w ald
clearly restrict the flexibility needed to assure that pay-
ments made are related to costs incurred by the provider.

Furthermore, as is set forth in Program Regulation 40-4,
the State agency is required to relate its payments for

115
Exhibit G.

inpatient hospital services to the principles and stand-
ards applied in determining reasonable cost under fhe
Title XVIII program. (S250.30(b)) There must be pay-
ment of current reasonable costs, using interim payments
and annual retroactive adjustments, or else making cur-
rent payments designed to meet in full the anticipated
current reasonable costs. Accordingly, it appears that pay-
ment at not to exceed a fixed rate, until June 30, 1971,
would raise a question of compliance with the Federal
statutory and regulatory requirements.

Ch. 186, Section 3——AF DC—Provision of Assistance
in Relation to Court Orders for Support

In this connection, we would call your attention to the fact
that this amendment to section 350 of the Social Services
Law, requiring that ‘‘allowances shall not be granted in
whole or in part in anticipation that support payments
required to be made by a parent pursuant to (court) order
_ . , will not be made,’’ will have to be implemented in
a manner consistent with the basic ‘assistance principle
that only income which is actually available to the indi-
vidual may be considered in determining need. As set
forth in Program Regulation 90-7, the State plan for
AFDC must provide that agency policies assure that when
support payments by absent parents have been ordered by
a court, a regular amount of income is available monthly
to meet the determined needs of the mother and children,
whether or not the support payments are received regu-
larly, and the agency does not delay or reduce public as-
sistance payments on the basis of assumed support which
is not actually available. (S233.20(a) (3) (v))

A. 6935—Medicaid Co-Insurance Provision

This provision states that the 80 percent limitation om pry-
ment for medical care and services furnished as # °* al

116

Exhibit G.

assistance to the medically needy is inapplicable only where
the individual’s “expenditures for such medical care and
services (i.e., care included within the Title XIX plan) have
reduced (his) income and resources to the level of eligi-
bility for public assistance.’? (Emphasis supplied). The
acceptability of this provision will be dependent on whether
it may be implemented in a manner consistent with the
basic Federal requirements that consideration of an indi-
vidual’s income for purposes of determining financial
eligibility for medical assistance take into account the
costs incurred for medical insurance premiums and for
necessary medical or remedial care recognized under State
law and not encompassed within the State plan for med-
ical assistance, and that any deductible or cost sharing
may not be imposed to the extent that it would reduce the
individual’s income below the most liberal money payment
standard used by the State, at any time on or after Janu-
ary 1, 1966, as a measure of financial eligibility in any
categorical money payment program. (Social Secu-
rity Act, $1902(a)(i4), (17): Program Regulation 40-7,
$248.21 (a) (1) (ii), (2) (ii))

Sincerely,

JAMES CALLISON
James Callison
Regional Commissioner

117

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120

R. Notice of Plaintiffs’ Motion for Summary
Judgment and Statement Pursuant to Rule
9(g) (Document No. 29)

[Title Omitted in Printing]

Please take notice that the undersigned will bring on for
hearing before this Court at a time and place to be desig-
nated by said Court, plaintiffs’ motion for a summary
judgment pursuant to Rule 56 of the F.R.C.P. and for a
permanent injunction declaring that the schedules of pub-
lic assistance grants contained in Section 13l-a of the New
York Social Services Law (Laws Ch. 184, added March 31,
1969) are null and void, and enjoining the implementation
or enforcement of said new schedules, on the grounds that
said schedules:

(1) violate the requirements of Section 402(a)(23) of the
Social Security Act of 1935, 42 U.S.C. § 602(a)(23), and
regulations promulgated thereunder, in that said schedules:

(a) constitute a downward rather than an upwards re-
vision of needs standards reflecting fully changes in the
cost of living since such standard was last changed prior
to January 2, 1968;

(b) create maximums which decrease rather than in-
crease the amounts paid to families, and

(c) contract the content of the standard of need.
(2) deny plaintiffs and all recipients in Nassau County
(a) the equal protection of the laws and

(b) the right to equitable treatment regardless of loca-
tion of residence in the State secured by the Social Se-
curity Act of 1935, 42 U.S.C. § 602(a)(1), and regula-
tions promulgated thereunder,

in that grant levels are lower in Nassau County than in
New York City for persons whose needs and costs of liv-
ing are the same.

Plaintiffs move upon the complaint, briefs, and affidavits
submitted in this action, their Local Rule 9(g) statement

121

of material facts as to which there is no genuine issue, the
testimony of Commissioners Ginsberg, Goldberg and Louch-
heim before this Court on April 23, 1969, and the arguments
previously made before this Court and to be made in sup-
port of this motion. There is no genuine issue as to any
material fact, and plaintiffs are entitled to judgment as a
matter of law.

Dated: Brooklyn, New York
April 29, 1969

Lee A. Albert

Attorney for Plaintiffs

Center on Social Welfare
Policy and Law

{Title Omitted in Printing]

Plaintiffs submit pursuant to General Rule 9(g) of the
United States District Court for the Eastern District of New
York the following statement of material facts as to which
plaintiffs contend there is no genuine issue to be tried:

1. The grant schedules in Section 131-a of the New
York Social Services Law (added by Laws Ch. 184, March
31, 1969) were derived as follows:

(a) New York City. The mean age of the oldest child
in ADC families of each given size was determined and the
regular recurring grant now available for a family with the
oldest child at the mean age was taken from New York
State Department of Social Services Schedule SA-1, adopted
October 1968. The monthly grant levels set forth in 13l-a
represent the grant for a family of given size with oldest
child of mean size under SA-1, adopted October 1968, plus
$4.25 per person.

(b) All other counties. The same procedure was ap-
plied to Schedule SA-3, adopted October 1968, to deter-
mine the grant for families of various sizes with an oldest
child of the mean age for that family size group. The re-
sult was then “‘smoothed” as follows:

ee

122

No. in family es a a es meek ame

SA-1 Grant for $102 146 185 233 255 306 355 364 413
family with
oldest child
of mean age.

$13l-agrant $101 142 183 224 257 290 323 356 389

2. The amounts paid to New York City AFDC and
T-AFDC recipients in special grants for clothing and furni-
ture, the number of recipients, and the per capita payment
of such grants, according to the office records of the New
York City Department of Social Services, are as follows:

Number of People Total Amount in Monthly Dollar
Receiving ADC-TADC __ Dollars Paid Out Amount/Recipient

July 67 524,868 $1,107,140 $ 2.10
Aug. 67 552,000 2,281,314 4.13
Sept. 67 557,704 4,441,867 7.96
Oct. 67 567,414 4,530,156 7.98
Nov. 67 575,537 4,493,507 7.80
Dec. 67 582,871 4,776,666 8.19
Jan. 68 597,777 3,529,499 5.90
Feb. 68 604,920 2,833,241 4.68
March 68 615,064 3,199,218 5.20
April 68 622,364 5,736,166 9.21
May 68 632,840 8,435,040 13.32
June 68 644,180 10,471,896 16.25
July 68 659,982 10,368,979 15.71
Aug. 68 673,829 9,083,154 13.48

3. The laundry schedules for New York State in effect
on January 2, 1968, as set forth in 18 NYCRR § 352.5(h)
(2) were as follows:

Number in 8 or
household 2 F | 4 5 6 7 more

$3.90 $5.40 $6.95 $8.45 $10.40 $11.90 $13.45

and these are the amounts which were typically supplied to
recipients in New York City for laundry.

4. According to the records of the New York City De
partment of Social Services, the following amounts were
paid to New York City AFDC recipients in January, 1968
for the special needs indicated:

Day care expenses $ 28,153
Moving expenses 204,997
Extra school expenses 15,260
Security expenses 403,671
Accrued utilities 71,553

5. As required by the New York City Handbook for Case
Units in Public Assistance Administration, Sec. II, the follow-
ing monthly amounts are now provided to families with the
special needs indicated in addition to the regular recurring
grant:

$16.00 for an extra adult
10.00 for a blind or disabled person
5.50 for a pregnant woman
5.80 for washing babies’ diapers
8.00 got people who must eat out

6. The standards of assistance in effect in New York
on January 2, 1968 were established on the basis of the
annual cost and price study of the New York Department
of Social Services conducted in May, 1967.

7. Implementation of Section 131-a will result in a sav-
ing of funds by the State as the result of overall lower pay-
ments for public assistance grants.

8. The cost of living for welfare recipients in Nassau
County is equal to or greater than that for welfare recipr
ents in the City of New York.

124

Take notice that said Rule 9(g) provides that all facts
hereinafter set forth “will be deemed to be admitted unless
controverted by the statement required to be served by the
opposing party.”

Dated: Brooklyn, New York
April 29, 1969

/s/ Lee A. Albert
Attorney for Plaintiffs

Carl Rachlin
Attorney for Plaintiffs

125

S. Tables III, IV, V from “Welfare in Long Island”
(Long Island Association of Commerce and Ind-
dustry) (Document No. 36)

Table Ill

Percent of Public Assistance Payments From
Federal Funds, by State, Fiscal Year 1967!

pt) STA

. meee eease goers

— oe -

1: Mississippi
-' Georgia
1: South Carolina

j West Virginia
>! Lowisianas

114 texas
12 \ Arizona
13' New Mexico

+13 North Carolina
‘15

Idaho

. , Virginie
7 + Oklahoma
) Vermont
, Nebraska
Maine

ea | ‘Utah
‘Missouri
2. «North Dakota

39
‘fe : South Dakota
a-

’ Delaware
ij

Ss aed

gee Gs eG @ . cotesesee se e~e>
'

-
id
w

eaeron eperen’ ro)
°

_’wnev

bk ee eevee + Gee sae

1. Sewree: Same as Table 7
2. Includes Guam. Puerto Rico and the Virgin Islands.

ai

aus STATE PERCENT
(23) Indiana t sa.e
\ 27| Noveda So.’
a 4 Wisconsin to.
j 77 iss *
{ : state
:
29, lowe tye
51) Colorado bese
22, Rhode Island 75°.
23 Pennsylvania eS. .t
J+. Oregon ‘ di.s
; Bae §
: ‘ t
135° Wyoming 75).2 4
36. Kansas p Sted
37: Washington 3.9:
38 Ohio 4.63
30 Maryland 49.43
ry Pee
‘40° Illinois 449-3
41‘ Michigan 48.9
142° California 146.6
1534 Massactusetts 340.9
4s" Hawaii j47.8 |
\ ee
'i34 Alaska po7.””
‘45° Montana 40.7 |
417i Connecticut 445. ,
43: New Hampshire 93.7 |
49 New Jersey 41.4
eere a >
ba :
io yon

Nee eee ee

126

TABLE IV

Per Capita Public Assistance Payments from
State and Local Funds, by State, F iscal Year 1967!

WK mK
BANK STATS SAE, o STATE Sara ta
1; california $38.80 '26;, New Ilampshire i$10.03°
2, MOY youK _ "7.36.00, (27) "9 £8.25}
34 Massachusetts ; 25.25; . 23, South Dakota 4 4.20
44 Oklahews , 22.75] {20° Arkansas + D.°§'
. 32 Colorado ; 58.0} 30} Vermont , 953!
"Ss eo C 3 j
© 6} mode tetand =| 19.75; $1. Maine t pesy!
* 72 Washington ‘17.40! ; 32 | New Mexico «: Be BB
, 3? , Minw:sote ~17.28: 133% Utah 6.0%
1 U.S. AVERAGE 15.80", °34* Kentucky - 7.60:
. 9, Conrecticut 15.45% 3s. Alabama : 7.80:
‘ . e

b)

a
ve ow

eee

128

T. Defendants’ Supplemental Statement Pursuant
to Rule 9g) (Document No, 38)

(Title Omitted in Printing]

Defendants controvert plaintiffs’ contention that there
is no genuine issue as to the facts contained in paragraphs
“7" and “8” of plaintiffs’ statement of material facts (Gen-
eral Rule 9g), U.S.D.C., E.D.N.Y.). Defendants agree that
no trial is required as to these contentions.

Dated: New York, New York
May 1, 1969
Louis J. Lefkowitz
Attorney General of the
State of New York
Attorney for Defendants

U. Letter from Lee A. Albert to Judges Moore,
Mishler and Weinstein (Document No. 51)

May 6, 1969

Honorable Leonard P. Moore, Court Justice
Honorable Jacob Mishler, U.S.D.J.
Honorable Jack B. Weinstein, U.S.DJ.
United States Courthouse

Brooklyn, New York

Re: Rosado v. Wyman, Civ. No. 69-355
Dear Honorable Sirs:

This letter is submitted to clarify a misunderstanding
which may result from the closing remarks on Friday of the
State's attorney, in reference to the power of a federal court
to enforce the plan requirements of the Social Security Act.

Federal funds utilized by the states under the ADC pro-
grams are not effected in any way by the submission to
H.E.W. of a change in the plan for the administration of
aid, or even by the submission of an entirely new plan.

Be na ) (emphasis supplied), Purchases of services with direct
payment to vendors, does not comply with the federal
requirements and with HEW regulations designed to pro-
tect the “amounts of aid paid” under the AFDC program.
Sve HEW Handbook of Public Assistance, Part IV, Section
S120 e¢ seg. 48 CFLR, 233.20 (a) (ii), 34 Fed. Reg. 1394
(1969) A state apparently may not claim federal reimburse-
ment for the provision by vendor payments or purchase of
service of “subsistence and other assistance items” normally
included in a standard of need unless the federal statute
and regulations specifically so provide. See 42 U.S.C, §
602 (a) (13) and (14); 45 C.F.R. Parts 220 and 226, 34
Fed. Reg. 1243, 1354 (1969) (child welfare, family plan-
ning and other family services may be purchased; other
services must be provided by the agency itself).

189

[38] The requirement that payments be in cash gives
recognition to the right to freedom of choice and to self-
respect by the recipient of welfare, Thus, the interpreta-
tion of section 406(b) of the Act (42 U.S.C. § 406(b)) in
she HEW Handbook reads as follows:

The provision that assistance shall be in the form of
money payments is one of the several provisions in
the act designed to carry out the basic principle that
assistance comes to needy persons asa right, The
right carries with it the individual's freedom to man-
age his affairs; to decide what use of his assistance
check will best serve his interests; and to make his
purchases through the normal channels of exchange,
enjoying the same rights and discharging the same
responsibilities as do friends, neighbors, and other
members of the community. The Social Security
Administration's interpretation of “money pay-
ments” recognizes that a recipient of assistance does
because he is in need, lose his capacity to select how
not, because he is in need, lose his capacity to select
how, when, and whether each of his needs is to be
met.

B. Legislative History of Section I3l-a

Motive and purpose of the legislature may be considered
in determining what it in fact did. Cf Williams v. Danridge,
__. F, Supp. _. (D. Md. 1969) (maximum grant regu-
lation motivated by “an inadequate State appropriation”).
An examination of the legislative history of section 13 1-a,
read together with the state budget, casts considerable
doubt upon the defendants’ contention that the new sched-
ules were designed wholly, or even primarily, to meet the
demands of efficiency.

[39] The proposal to convert to a flat grant system was
initiated by the New York State Board of Social Welfare.
In its report to the Governor in May, 1968, it recom-
mended flat grants ‘“‘based on family size and the age of the
oldest child” to “include food, clothing, personal inciden-
tals, household supplies, school expenses” and the like,
with “additional money amounts” in certain circumstances
such as special diets or moving expenses, which are not

190

common to all recipients.” Challenge and Response, 4 (May
1968).

This proposed change was not designed to reduce stand-
ards of need or payments. In a letter of Commissioner
Wyman to the Governor's Counsel dated September 13,
1968, the flat grant system was spelled out in great detail.
The schedules included were those in present section 131,
not the reduced schedules in section 131l-a. Moreover,
many special grants such as those for special clothing and
for diet supplements for pregnant women and medical
patients were provided. And there was a provision for an-
nual repricing of schedules “whenever the repricing shows
an increase or decrease of 2% or more.”

This proposal was never introduced in bill form; in its
stead, section 131-2 was substituted. The reason for this
change is revealed by an examination of the labyrinth proc-
ess leading to the adoption of the 1969-70 state budget.

[40] The Governor's proposed budget, dated J anuary
21, 1969, did not indicate any plan for a shift in methods
of computing standards of need. See Executive Budget for
the Fiscal Year April 1, 1969 to March 31, 1970, 566-67,
571-72, 778-780. AFDC payments were expected to con-
tinue “to increase principally because of the increasing cost
of living and a continued demand by public assistance reci-
pients for the granting of special need items in addition to
the basic subsistence allowances.” /d. at 779. The percent-
age of federal aid was expected to decline because of a
“freeze on the number of children to be aided and
restricted participation in cases of aid due to unemployment
of a parent. /bid. Based upon monthly AFDC averages,
the projected number of recipients for 1968-69 was 917,-
235 and for 1969-70 it was 1,095,704. The average bud-
geted monthly grant was $74.57 for 1968-69 and $83.37
for 1969-70. /d. at 779. The total 1969-70 to AFDC pro-
gram cost was projected at $1,096,172,000; $440,195,000
was anticipated in federal aid. /d. at 778. The estimated
cost-of-living increase for 1969-70, based upon the system
then in effect, was $5,000,000 and this sum was apparently

191

included in the $1,096,172,000 figure. Since the share of
the state and of local social service districts is almost equal
(id. at 778, $321,125,000 was budgeted for 1969-70 as
the state’s share of the 1969-70 AFDC [41] program. The
total Local Assistance Fund for State Aid Programs for the
Department of Social Services was budgeted at $1,040,514,-
000—/d. at 786. See also Sen. 1689, Ass. 2305 (1969).

Because “necessary expenditures are expected to out-
strip available funds,” the Governor reported, “a reduction
in the level of recommended budget expenditures by
approximately 5 per cent across-the-board may be required.”
Executive Budget for the Fiscal Year April 1, 1969 to March
31, 1970, M7. The Local Assistance Fund, including AFDC
contributions by the state, was to be “limited to 95 per
cent of the amount of expenditures otherwise estimated
.. . to keep expenditures within available income.” /d.
at 739. This would have reduced the category of state aid
to AFDC by approximately $16,000,000 and all programs
of state social service local aid would have been reduced by
$52,000,000 to $988,000,000.

It is not clear from the Governor’s proposals whether the
total AFDC program cost was intended to be reduced 5%
from $1,096,172,000, for a cut of approximately $55,000,-
000, or whether the local social service districts were expected
to increase their share, leaving the total program cost un-
changed. In any event, no one suggested that the 5% cut
was anything but a money saving device.

[42] During the legislative session the Governor’s pro-
posed budget was modified to provide greater aid than the
Governor had requested for some items but to reduce the
state AFDC appropriation even further. The budget bills
do not show the detailed amounts for each category of local
aid but show a lump sum for all categorical assistance.
Instead of $988,000,000 proposed by the Governor (after
his 5% cut), $913,000,000 was appropriated. Sen. 1689-A,
Ass. 2305-A (adopted March 29, 1969, ch. 49, L. 1969).
This constituted a reduction of approximately 12% from
the original projected cost. We are informed that depart-

192

mental computations indicate that $297,441,000 was the
amount intended for the AFDC program, a saving of
$23,684,000 or about 7% over the Governor’s Budget.
When the $5,000,000 amount in the Governor’s Budget
for 1969 cost-of-living increases is eliminated the reduction
is $18,684,000, or about 6%. Since the state’s share is some
34%, the decrease in total AFDC payments under the pro-
gram seems to have been at least some $50,000,000.

A further reduction of $42,000,000 was made by the
supplemental budget, making the total reduction in local
aid for categorical assistance some 16% from what the Gov-
ernor’s Budget had estimated as projected costs. Sen. [43]
5692, Ass. 7205 (adopted May 2, 1969, ch. 340, L. 1969).
Defendants have indicated, in a letter to the Court dated May
14, 1969, that the $42,000,000 cut in the Supplemental
Budget was taken “from the $297,441 ,000 figure” for local
AFDC aid. We are told by the State that this reduction
was made in contemplation of increased federal aid and
that if this sum is not supplied by the federal government
“the 1970 Legislature would be requested to cover the
amount in a supplementary budget.”

Timing of legislative action shows the close relation be-
tween the new AFDC program and budgetary decisions.
Section 131l-a was not introduced until February 18, 1969
in the Assembly (Ass. 6620) and March 27, 1969 in the
Senate (Sen. 5419), some time after the Governor’s Budget
Message was delivered on January 21, 1969. The amend-
ment was adopted on March 29, 1969, the same day as the
budget. There is good reason to believe, when the budget
is read with section 131-a, that a cut in the projected cost
of the total AFDC program as well as in the state contri-
bution was intended.

Since a reduction of levels of payments, based on projec-
tions, was likely to be required to achieve these budgetary
reductions, since all affidavits and testimony indicate that
payments have not been above the standard of need, and
since New York continues to purport to pay [44] at 100%

193

of standard of need under section 131-a, there is strong
support for the contention that standards of need and levels
of payments were reduced.

This Court is not, of course, concerned with justifications
for state budgetary decisions, nor does it sit to discourage
desirable improvement in the efficiency of state welfare
programs. The issue before us is whether the system of
reducing standards of need and levels of payment embodied
in section 131-a violates federal statutes. We turn now to
the relevant federal provision for an answer to that question.

Vi. FEDERAL LIMITATIONS ON REDUCTIONS
IN AID TO DEPENDENT CHILDREN

A. Purpose

Paragraph 23 of subdivision (a) of section 402 of the
Social Security Act of 1935, as amended (42 U.S.C. 8 602
(a) (23), requires that each state’s AFDC plan must:

provide that by July 1, 1969, the amounts used by
the State to determine the needs of individuals will
have been adjusted to reflect fully changes in living
costs since such amounts were established, and any
maximums that the State imposes on the amount of
aid paid to families will have been proportionately
adjusted.

This provision was effective January 2, 1968. Pub. L. 90-
248 Title II, § 202(b), 81 Stat. 821.

Defendants contend that 402(a)(23) should be [45] nar-
rowly construed. They interpret it as being primarily aimed
raising a state’s standards of need and as not controlling a
state’s levels of benefits to AFDC recipients. In support of
this construction of the statute, defendants rely upon the
position of HEW as expressed in its amicus brief filed in
Lampton v. Bonin, ___ F. Supp. __ (E.D. La. 1969)
and the implementing regulation of HEW which would
permit a state to make downward adjustments in the
amount of AFDC payments through the device of “ratable
reductions” —i.e., percentage reductions applied to the stan-
dard of need. 45 C.F.R. 8 233.20(a) (2)(ii), 34 Fed. Reg.

194

1394 (1969). We disagree and hold that a broader construc-
tion of 402(a)(23) is required by the language, statutory
history and good sense.

Section 402(a)(23) plainly states that both the “‘amounts
used by the State to determine the needs of individuals” —
i.e., the standard of need—and “‘any maximums that the
State imposes on the amount of aid paid to families” —i.e.,
the level of benefits—be adjusted “‘to reflect fully changes
in living costs since such amounts were established.” The
adjustment contemplated by 402(a)(23) is undoubtedly an
upward one in view of the inflationary trend this country
has experienced over the last two decades. The one judge
who has heretofore considered this question [46] at length
has reached a similar conclusion. Lampton v. Bonin, ____ F.
Supp. ____, __ (E.D. La. 1969) (dissent, setting out legis-
lative history at length; the majority did not reach the
question) (““Congress’ intention to compel the states to
raise ADC payments’’). See also Dandridge v. Williams,
___ ~F. Supp. ___, ___ (D. Md. 1969) (“designed to in-
crease benefits to keep pace with living costs’).

This federal provision grew out of an attempt to reform
the inequitable and unsatisfactory aspects of our present
welfare system resulting from the inadequate and widely
varying level of grants among the states. The solution first
proposed by HEW would have required all states to meet
in full their own need standards and to adjust payments
annually so as to maintain payments at the 100% level
despite intervening inflationary price rises. Congress put
off enacting any basic change to allow further study and
consideration of alternatives. At the same time, it did take
an interim step, a holding action against further deteriora-
tion in levels of benefits.

Section 402(a) (23) embodies that interim and tempo-
rary solution. It creates a floor under present levels of
benefits by prohibiting future cuts in welfare payments
and by requiring that ail states provide at least [47] one
increase by July 1, 1969 to at least partially compensate
for the rise in the cost-of-living.

195

As already noted, section 402(a) (23) grew out of an
Administration proposal to require all states to pay 100%
of need and to make annual cost-of-living adjustments be-
ginning July 1, 1969. This proposal was originally embod-
ied in the bill to amend the Social Security Act introduced
in the House in 1967 at the request of the Administration.
Section 202 of H.R. 5710, 90th Cong., lst Sess. The bill
ultimately reported out by the House Ways and Means
Committee and passed by the House, H.R. 12080, contained
no such provision.

The Administration renewed its request in the hearings
before the Senate Finance Committee and proposed the fol-
lowing amendment to the House Bill:

[each state plan must] provide (A) effective July 1,
1969, for meeting . . . all the need, as determined
in accordance with standards applicable under the
plan for determining need, of individuals eligible to
receive aid to families with dependent children . . .
and (B), effective July 1, 1969, for an annual review
of such standards and . . . for updating such stand-
ards to take into account changes in living costs.
Hearings Before the Committee on Finance, U.S.
Senate, 90th Cong., Ist Sess., on H.R. 12080 at 635.

See also Id. at 716 (statement of HEW on its proposed
amendments to H.R. 12080).

[48] Secretary of Health, Education and Welfare John
W. Gardner, in his testimony before the Committee in sup-
port of this amendment, specifically referred to the need
to increase the level of benefits:

The House bill does nothing to improve the level of
State public assistance payments. As things stand
today, the States are required to set assistance stand-
ards for needy persons in order to determine eligi-
bility—but they need not make their assistance pay-
ments on the basis of these standards. The result is
that welfare payments are much too low in a good
many states. ...

196

We strongly urge you to adopt the administration’s
proposal requiring states to meet need in full as
they determine it in their own State assistance stand-
ards, and to update these standards periodically to
keep pace with changes in the cost of living. Hear-
ings Before the Committee on Finance, U.S. Senate,
90th Cong., Ist Sess., on H.R. 12080 at 216.

Similar testimony was given by Undersecretary Wilbur

Cohen:

[49]

It is this serious discrepancy between what the States
themselves determine to be minimal need and the
amounts they will actually pay that has led us to
strongly recommend that States be required to meet
needs in full as they determine them. .. .

But it is not enough only to require the States to
meet need standards. They must assure that these
standards reflect current prices. Hearings Before the
Committee on Finance, U.S. Senate, 90th Cong., Ist
Sess., on H.R. 12080 at 259.

While Messrs Gardner and Cohen referred only to

state dollar maximums in the illustrations used in their tes-
timony (id. at 255-260), it was clear from their statements
and colloquy with those Senators present that concern was
being expressed about any method used by the states to
pay less than was indicated by their standards of need.
Part of the record reads as follows:

SENATOR RIBICOFF: What happens, Mr. Cohen,
with the people who receive payments so far below
the standard?

MR. COHEN: Well, if a State does not pay its full
standard, two things can happen. One is, as Senator
Long indicated, that they may make up the differ-
ence from income from social security or earnings
so that they still might meet the standard in those
cases where an individual has social security or could
work. But, I might say that out of the 2 million
people who are old-age assistance recipients, the
average age being 75, quite a number of them can-

197

not work, although half of them do have social
security beneifits.

SENATOR RIBICOFF: I know, but you take all
that into account in the standards that are being
set. What they are receiving is not just a question
of the amount they receive from the welfare agen-
cies. You take into account all they receive. What
happens to the child or the adult who receives so
much less than what you consider or is considered
a proper standard? How do they live?

SECRETARY GARDNER: It shows up most
amount.

SENATOR RIBICOFF: How do they live?

MR. COHEN: They have to cut back on their
food and clothing and other needs to live on the
amount that the State gives them.

{$0} SENATOR RIBICOFF: Well, is not a study
made or do not you know what happens to these
people? | mean just what is happening to them?

MR. COHEN: Well, I think that the evidence
shows—I do not have it immediately before me—
that many of these children and these families grow
up without adequate food, without adequate medi-
cal care, and certainly their whole aspirations for
improving their educational status are stunted, and
I think that the evidence from the State administra-
tors when you hear them will bear that conclusion
out.

SECRETARY GARDNER: It shows up mnost
clearly, I think, in the medical data. You will find
a higher incidence of just about every kind of medi-
cal disorder and physical handicap in these young-
sters—malnutrition and everything else.

SENATOR RIBICOFF: Well, in looking to the
cost to society ultimately, the people who are below
standard cause a greater drain eventually upon what
the society has to pay out in every conceivable way,
is that not right?

198

SECRETARY GARDNER: No question about
that, Senator.

MR. COHEN: I might add, Senator, just to give

you a figure which I will come to later, that the aver-
age payment per child for the Nation as a whole is
around $36 per month per child. That is the actual
payment, which is a little bit more than $1 per day
per child.
Now, I think, that this is an indication of the
rather low level and inadequacy of payments that
exist in the country as a whole. Some are higher
and some are notably and substantially lower.

Id. at 258-59.

The bill reported out of the Senate Finance Committee,
and passed by the Senate, reflected a compromise on this
issue. The requirement that all states pay full need [51]
was rejected, but the second recommendation—that they be
required to annually ircrease levels of payments to reflect
changes in living costs—was contained in the Senate version.
The bill is practically identical to 402(a) (23) except for a
mandated annual cost-of-living adjustment:

by July 1, 1969, and at least annually thereafter,
the amounts used by the State to determine the
needs of individuals will have been adjusted to
reflect fully changes in living costs since such
amounts were established, and that any maximums
that the State imposes on the amount of aid to fami-
lies will have been proportionately adjusted.

See also Senate Report No. 744, 1967 U.S. Code Cong. &
Admin. News 3133.

In the House-Senate Conference Committee, the require-
ment for annual increases was dropped; only one adjustment
prior to July 1, 1969 was to be required. The Conference
Committee Report explains:

The new section [Senate amendment] also amended
section 402(a) of the Act to require that by July 1,
1969, and annually thereafter, each State . . . must
adjust its standards so as to reflect current living

199

costs and make proportionate adjustments in any
maximums... .

Under the [Conference Committee] agreement, the
new section 402(a) provision (for adjustments to
reflect living costs) would require States to make
only one adjustment before July 1, 1969... . Con-
ference Committee Report No. 1030, 1967 US.
Code Cong. & Admin. News 3209.

[52] The language of the basic requirements of 402(a)
(23) remained virtually unchanged throughout its legislative
evolution. There is no hint from either committee that it
intended to change the purpose of the section as expressed
by Administration spokesmen. Hence, there is no reason
to believe that Congress failed to appreciate the import and
plain meaning of the language in 402(a) (23).

B. Requirements of section 402(a) (23)

1. Adjustment of Standards of Need

Section 402(a)(23) simply requires that all states increase
benefits once to keep pace with living costs. The only sig-
nificant variation in the change required in different states
is the percentage adjustment required, which depends on
when prior to January 2, 1968—the date 402(a) (23)
became law—a state had last repriced its need standards.
The more outdated the prices used to determine need, the
greater the required adjustment.

All items comprising standards of need must be repriced.
While items need not be added, no item previously included
and still required by recipients may be omitted, else the
effect of repricing would be nullified. The content of the
repriced standards must be equivalent to that of the old.
Any consolidation through a combining of items “may
not result in a reduction in the amount of the standard.” 45
C.F.R. § 233.20(a) (2) (ii), 34 Fed. Reg. 1394 (1969).

200

[53] 2. Increase in Levels of Benefits

Section 402(a) (23) by its terms requires every state to
increase its levels of payments by an amount sufficient to
offset the rise in the cost of living. An upward adjustment
of “any maximums that the State imposes on the amount
of aid paid” automatically necessitates an increment in the
amount of such aid.

Defendants contend that this requirement of increased
levels of benefits does not apply to states such as New
year, which have been paying full need or to states which
employ percentage reduction systems. ‘“Maximums,” ac-
cording to defendants, is a word of art in welfare law
jargon which refers solely to dollar maximums and should
be so construed within the meaning of the statute.

This argument is not persuasive. Section 402(a) (23)
speaks of “any maximum,” not just dollar maximums. If
a state pays 100% of need, a standard of need constitutes
both the maximum and the amount of aid paid. Repricing
the standard of need serves, without more, to increase the
level of payments. Both the creation and the reduction of
dollar maximums are equal evasions of the statute.

The invalidity of this leg of defendant's argument can be
illustrated by a hypothetical. The standards of need in
State X and State Y are $200 per month. State X pays
full [54] need, or $200, while State Y imposes a dollar
maximum of $100. The cost of living has risen 10% in
both states. Under defendants’ interpretation of 402(a)
(23), State Y would have to increase its monthly payments
to $110, while State X could lawfully reduce them to
$100, or even $50.

Section 402(a) (23) applies in the same manner to a per-
centage reduction system. The maximum which must be
proportionately adjusted is not, as defendants would have
us believe, the number representing the percentage reduc-
tion but, rather, the dollar figure resulting from the appli-
cation of the percentage to a family’s need as determined
by the state’s standard of need.

201

For example, if a state had a standard of need of $100,
and paid 80% of need, the recipient would receive $80. If
the need standard were now raised to $120 to reflect a rise
in living costs, and the state continued to pay 80%, the
recipient would receive $96. The rise in living costs would
thus be reflected in increased aid to the recipient.

We do not decide whether section 402(a) (23) precludes
a state from converting to a “flat grant system” by averag-
ing out all t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0170%3A01. Public record. Not legal advice.