SSR 73-17c: SECTION 218(t) (42 U.S. 418(t)). -- STATE AND LOCAL COVERAGE -- STATUS OF JAIL COOKS OF ALLEN AND VIGO COUNTIES -- INDIANA

20 CFR 404.1275

SSR 73-17c

State of Indiana v. Finch , U.S.D.C., S.D. Ind., No. IP

67-C-57 (6/2/72)

STECKLER, District Judge :

This action was instituted by the State of Indiana against the Secretary

of Health, Education and Welfare for a re-determination, pursuant to

Section 218(t) of the Social Security Act, 42 U.S.C. § 418(t), of the

correctness of an assessment made by the Secretary against the State of

Indiana. The assessment was based upon a finding by the Secretary that

four cooks working in the jails of Allen and Vigo Counties, Indiana, were

employees of the counties and covered for Social Security purposes by an

agreement, pursuant to Section 218 of the Act, 42 U.S.C. § 418, between

the State and the Secretary.

The State took the position that the cooks were employees of the county

sheriffs in their personal capacity and not employees of the counties.

The questions presented were, whether as a matter of law the State had

the right to go behind the Secretary's determination, and if so, whether

in determining the employment relationship between the cooks and the

counties, or the cooks and the county sheriffs, the State would have the

right to have a trial by jury in resolving the issues of fact.

The Court concluded that the State was entitled to a judicial review of

the Secretary's determination of whether the cooks were employees of the

counties, and further, that it was entitled to a jury trial for resolution

of the factual issues, or that if the Court elected, it could have the

benefit of an advisory jury verdict.

The case was assigned for jury trial and tried to completion.

The facts as brought out by the evidence were substantially

undisputed.

The services of the cooks involved were engaged by the county sheriffs of

Allen and Vigo Counties to prepare meals for the prisoners in their

charge.

the factual issues, or that if the Court elected, it could have the

benefit of an advisory jury verdict.

The case was assigned for jury trial and tried to completion.

The facts as brought out by the evidence were substantially

undisputed.

The services of the cooks involved were engaged by the county sheriffs of

Allen and Vigo Counties to prepare meals for the prisoners in their

charge.

Two of the cooks worked full-time and were paid regular salaries, and two

of them worked as substitutes and were paid salaries. In each instance the

food was prepared in the county jail with the use of cooking utensils and

other equipment furnished by the county. Each of the cooks were supervised

in the performance of her work by the sheriff or his wife. The food

prepared was either supplied or paid for by the sheriff. Both the cooks'

salaries and the cost of the food were paid out of funds provided by the

county to the sheriff for the feeding of prisoners. The funds were kept in

a bank account in the sheriff's name as sheriff. These funds were referred

to as "meal money," and were computed on the basis of a fixed amount per

meal per prisoner, determined by the State Auditor pursuant to IC 1971,

17-3-12-1, Ind. Ann. Stat. § 49-1323 (Burns Repl. 1964). The cooks were

not listed on any county pay roll, although each jail was regularly

examined and inspected by county and state officials.

It was undisputed that the cooks were employees and not independent

contractors.

omputed on the basis of a fixed amount per

meal per prisoner, determined by the State Auditor pursuant to IC 1971,

17-3-12-1, Ind. Ann. Stat. § 49-1323 (Burns Repl. 1964). The cooks were

not listed on any county pay roll, although each jail was regularly

examined and inspected by county and state officials.

It was undisputed that the cooks were employees and not independent

contractors.

At the close of the State's evidence, and again at the close of all the

evidence, the Secretary moved for a directed verdict. Pursuant to Fed. R.

Civ. P. 50(b), the Court reversed ruling on the legal questions raised by

the motion and submitted the case to the jury on special interrogatories

pursuant to Fed. R. Civ. P. 49. At the same time that Court announced that

the issues of fact would be submitted to the jury, the Court granted

counsel for the defendant thirty (30) days from the return of a verdict

within which to submit a brief on the questions of law raised by the

motion if the jury should find for the State and against the position

taken by the Secretary.

Four interrogatories were submitted to the jury for answer, and their

special verdict, in substance, was that the cooks were employees of the

respective sheriffs in their personal capacities as individuals and not in

their official capacity as county sheriffs.

The case is now before the Court for the determination of the legal

questions raised by the defendant's motion for directed verdict presented

at the close of all the evidence.

for answer, and their

special verdict, in substance, was that the cooks were employees of the

respective sheriffs in their personal capacities as individuals and not in

their official capacity as county sheriffs.

The case is now before the Court for the determination of the legal

questions raised by the defendant's motion for directed verdict presented

at the close of all the evidence.

Notwithstanding the special verdict of the jury, the issues now before

the Court are whether the cooks, as a matter of fact, and in law, were

employees of the county, or whether they were employees of the respective

sheriffs in their personal capacity; and further, whether the Secretary's

determination that the cooks were employees of the county, and thus

covered for Social Security purposes by the agreement between the State

and the Secretary, is subject to re-determination by judicial review.

The review of administrative agency decisions is limited in scope by

certain settled principles of administrative law, and generally the

judicial function is exhausted when there is found to be a rational basis

for the conclusions approved by the administrative body. See Moog

Industries, Inc. v. F.T.C. , 355 U.S. 411 (1957); Swift and Co. v.

United States , 316 U.S. 216 (1941); Rochester Telephone Corp. v.

United States , 307 U.S. 125 (1939).

Plaintiff asserts that this case is not one of normal judicial review of

an agency decision where the Court's inquiry is limited to determining

whether there was a "rational basis" for the agency decision. Plaintiff

urges that it is entitled to a trial de novo and therefore the

Court should give no special weight to the Secretary's decision on the

facts.

ed States , 307 U.S. 125 (1939).

Plaintiff asserts that this case is not one of normal judicial review of

an agency decision where the Court's inquiry is limited to determining

whether there was a "rational basis" for the agency decision. Plaintiff

urges that it is entitled to a trial de novo and therefore the

Court should give no special weight to the Secretary's decision on the

facts.

Plaintiff bases its argument exclusively on the language of Sections

418(t) and 405(g) of Title 42. The former provides for "redetermination"

of an assessment made by the Secretary of Health, Education and Welfare at

the insistence of a state. The latter provides for "review" of a decision

of the Secretary in the case of an individual claimant, and states that

"the findings of the Secretary as to any fact, if supported by substantial

evidence, shall be conclusive . . . ." Plaintiff concludes that the

failure of Section 418(t) to make any mention of giving special weight to

the Secretary's findings indicates that it was the intent of Congress that

where the agency deals with an individual, its decision on the facts is to

receive conclusive weight; however, where the agency deals with one of the

states, its decision on the facts receives no greater weight than that of

the state.

Notwithstanding plaintiff's contentions, nowhere in Section 418(t) are

the words "trial de novo " used. The text of Section 418(s)

provides, in its pertinent part:

A trial de novo would make the review by the Secretary superfluous

and would require this Court to duplicate the function of the

administrative agency. To grant such a trial would also ignore the mandate

of Section 218(i) of the Act, 42 U.S.C. § 418(i), which provides:

Furthermore, a de novo trial would impair the uniform nationwide

application of the Social Security Act by promoting potentially different

results as to each of the fifty states under Section 218 of the Act, 42

U.S.C. § 418.

ate the function of the

administrative agency. To grant such a trial would also ignore the mandate

of Section 218(i) of the Act, 42 U.S.C. § 418(i), which provides:

Furthermore, a de novo trial would impair the uniform nationwide

application of the Social Security Act by promoting potentially different

results as to each of the fifty states under Section 218 of the Act, 42

U.S.C. § 418.

When faced with problems of statutory construction, the courts generally

show great deference to the interpretation given the statute by the agency

charged with its administration and require that the agency decision be

sustained if reasonable. See Udall v. Tallman , 380 U.S. 1 (1964); F.H.A. v. The Darlington, Inc. , 358 U.S. 84 (1958); Universal

Battery Company v. United States , 281 U.S. 580 (1929); Commonwealth

of Kentucky, etc. v. Hobby, et al. , 209 F.2d 300 (D.C. Cir. 1954).

There appears to be no authority as to whether the above rule would be

applicable to agency interpretation of Section 218(t) of the Social

Security Act. However, in the absence of any statutory language

specifically providing for trial de novo , the Court will apply the

general rule to Section 218(t). Therefore, the judicial function of this

Court will be limited to determining whether the Secretary's finding that

the cooks were employees of the county was reasonable, and if so, the

motion for directed verdict must be sustained. In reaching this decision

it will be necessary to make a statutory analysis both of the pertinent

sections of the Social Security Act and of the Indiana statutes pertaining

to the sheriff's office and the keeping of the prisoners in his

custody.

Plaintiff contends that the sheriff is not an agent of the county for the

purpose of feeding prisoners; that he is both conservator of the peace and

keeper of the jail, but in discharging his duty of feeding prisoners as

keeper of the jail, he acts as an independent contractor and not as an

employee of the county.

to the sheriff's office and the keeping of the prisoners in his

custody.

Plaintiff contends that the sheriff is not an agent of the county for the

purpose of feeding prisoners; that he is both conservator of the peace and

keeper of the jail, but in discharging his duty of feeding prisoners as

keeper of the jail, he acts as an independent contractor and not as an

employee of the county.

The plaintiff bases this theory on "common law indicia." However, this

case does not turn on common law indicia. The issue here is whether under

the Social Security Act, a federal statute, the sheriff is an employee of

the county. Section 218(b)(3) of the Act, 42 U.S.C. § 418(b)(3) reads:

"The term 'employee' includes an officer of a State or political

subdivision." Further, Paragraph (a)(2) of Section 218 of the contract

between the State of Indiana and the Federal Security Administrator, which

is the basic document for Social Security coverage of Indiana state and

municipal employees, contains this same definition. In Indiana the sheriff

is an officer of the county in which he is elected. See Ind. Const. Art.

VI § 2, 11. Although the "common law indicia" may indicate otherwise, for

the purposes of this case, the sheriff himself is an employee of the

county.

County jails in Indiana are required by State law to be established by

the county commissioners, at the expense of the county. IC 1971, 11-5-1-1,

Ind. Ann. Stat. § 13-1001 (Burns Repl. 1956) provides:

Indiana sheriffs are required by law to keep the jail and the prisoners

therein, and to provide proper food and fuel for the prisoners. IC 1971,

11-5-1-3, Ind. Ann. Stat. § 13-1004 (Burns Repl. 1956) provides:

iana are required by State law to be established by

the county commissioners, at the expense of the county. IC 1971, 11-5-1-1,

Ind. Ann. Stat. § 13-1001 (Burns Repl. 1956) provides:

Indiana sheriffs are required by law to keep the jail and the prisoners

therein, and to provide proper food and fuel for the prisoners. IC 1971,

11-5-1-3, Ind. Ann. Stat. § 13-1004 (Burns Repl. 1956) provides:

The sheriff is expressly authorized by Indiana law to appoint such

assistants as may be necessary for the discharge of the duties imposed by

statute upon him. Therefore the sheriffs herein had the right to employ

cooks for the jails over which they were the statutory jailors. In this

regard IC 1971 13-3-71-2, Ind. Ann. Stat. § 49-1002 (Burns Repl. 1964),

provides:

The money to pay the cooks herein was expressly included in the money

which Vigo and Allen Counties provided as required by Indiana law to pay

for prisoners' meals. IC 1971, 17-3-12-1, Ind. Ann. Stat. § 49-1323 (Burns

Repl. 1964), states:

Applying the pertinent provisions of Federal and State law to the instant

case, the Court concludes that the Secretary's decision was correct. The

cooks were employed by the sheriffs of Allen and Vigo Counties in the

course of performance of their duties as keepers of the county jails. The

sheriffs were employees of the county pursuant to Section 218 of the

agreement between the State of Indiana and the Secretary. It follows that

the cooks were themselves the employees of the respective counties for the

purposes of Section 218 of the Act, 42 U.S.C. § 418, and the agreement

between the State and the Secretary.

In view of the foregoing, the Court concludes that the motion for

directed verdict should be, and it is, hereby granted.