SSR 80-34c: SECTION 1631(b) (42 U.S.C. 1383(b)) SUPPLEMENTAL SECURITY INCOME -- DISPOSITION OF UNDERPAYMENT

20 CFR 416.542(b)

SSR 80-34c

Smith v. Califano, 597 F.2d 152 (1979) (CERT.-DENIED (12/3/79))

CHOY, Circuit Judge:

Jeanine R. Smith, as successor in interest to Rosette V. Guidet, appeals

from the district court's granting of summary judgment in favor of the

Secretary of Health, Education and Welfare (the Secretary). We affirm.

I. Statement of the Case

The parties are agreed on the essential facts. Ms. Smith's grandmother,

Rosette V. Guidet, was born in 1895. She was widowed and suffered from a

sight limitation and amputated leg. On January 1, 1974, Mrs. Guidet was

placed in a board and care facility by Smith's husband with the assistance

of the Sacramento County Welfare Department. Though it was understood that

the costs of care would be paid by public assistance

programs, [1] Mr. Smith signed

the admissions agreement, providing for payment of $250 a month in

advance.

In late January and early February, Mrs. Guidet completed the necessary

applications for supplemental security income under Title XVI of the

Social Security Act (the Act), 42 U.S.C. § 1381. Mrs. Guidet died on March

6, 1974, before the Social Security Administration (SSA) completed its

processing of her application. Without completing an eligibility

determination, [2] the SSA denied

payment to Ms. Smith or her successors because:

Section 1631(b) of the Social Security Act provides that money due a

supplemental security income recipient who dies may be paid only to the

deceased individual's surviving husband or wife who was also a

supplemental security income recipient in the month the deceased

individual died. If there is no such surviving husband or wife, the

payments due the deceased recipient cannot be made to anyone.

[1] Upon appeal, an administrative law judge (ALJ) concluded that Mrs.

Guidet's benefits for January and February should be paid either to the

health facility or "to another appropriate representative payee." The ALJ

wrote:

recipient in the month the deceased

individual died. If there is no such surviving husband or wife, the

payments due the deceased recipient cannot be made to anyone.

[1] Upon appeal, an administrative law judge (ALJ) concluded that Mrs.

Guidet's benefits for January and February should be paid either to the

health facility or "to another appropriate representative payee." The ALJ

wrote:

The Appeals Council of HEW on its own motion reviewed the ALJ's decision.

Rejecting the ALJ's conclusion, the Appeals Council wrote:

Ms. Smith then sought review of the Appeals Council's decision in the

district court. [3] Noting that

the health facility had not yet received payment, Ms. Smith asked that the

district court reverse the Appeals Council's decision as legally

erroneous, invalidate those regulations that she asserted were

inconsistent with a proper reading of the Act, direct the Secretary to pay

Mrs. Guidet's benefits "to an appropriate representative payee," and award

costs and attorneys' fees. On cross motions for summary judgment the

district court granted the Secretary's motion and denied Ms. Smith's

motion. [4]

II. Interpretation of § 1631

[2] The parties agree that the payment involved in the present dispute

constitutes an underpayment under the Act. Section 1631(b) of the Act, 42

U.S.C. § 1383(b), provides in part:

Whenever the Secretary finds that more or less than the correct amount of

benefits has been paid with respect to any individual, proper adjustment

or recovery shall . . . be made by appropriate adjustments in future

payments to such individual or by recovery from or payment to such

individual or his eligible spouse (or by recovery from the estate of

either) . . . .

b), provides in part:

Whenever the Secretary finds that more or less than the correct amount of

benefits has been paid with respect to any individual, proper adjustment

or recovery shall . . . be made by appropriate adjustments in future

payments to such individual or by recovery from or payment to such

individual or his eligible spouse (or by recovery from the estate of

either) . . . .

(Emphasis added). The Secretary argues that this provision and the

regulations adopted

thereunder [5] prevent his making

posthumous underpayments to anyone except an eligible spouse. See 40 Fed. Reg. 47762 (1975); 39 Fed. Reg. 2012 (1974). Ms. Smith counters

that subsection (b) does not proscribe payment to appropriate

"representative payees." We believe that the Secretary's interpretation is

correct.

First, the language of § 1631(b) is clear on its face. It specifically

limits the Secretary to giving underpayments only to "such individual or

his eligible spouse." By contrast, where Congress intended to allow

payments to other individuals, it specified such allowance, as in

subsection (a)(2) of § 1631. [6] As we wrote in another context, "[t]he language of a statute is the best

and most reliable index of its meaning, and where the language is clear

and unequivocal it is determinative of its construction." Monte Vista

Lodge v. Guardian Life Insurance Co. , 384 F.2d 126, 128 (9th Cir.

1967), cert. denied, 390 U.S. 950, 88 S.Ct. 1041, 19 L.Ed.2d 1142

, as in

subsection (a)(2) of § 1631. [6] As we wrote in another context, "[t]he language of a statute is the best

and most reliable index of its meaning, and where the language is clear

and unequivocal it is determinative of its construction." Monte Vista

Lodge v. Guardian Life Insurance Co. , 384 F.2d 126, 128 (9th Cir.

1967), cert. denied, 390 U.S. 950, 88 S.Ct. 1041, 19 L.Ed.2d 1142

(1968).

Second, the legislative history indicates that Congress intended that

subsection (b) be interpreted in the Secretary's manner. The House Report

said of the provision which became § 1631(b):

H.Rep. No. 231, 92d Cong., 2d Sess., reprinted in [1972] U.S. Code

Cong. & Admin. News 4989, 5141. Later the House Report reiterated that

subsection (b)

Id . at 5326. These comments demonstrate that Congress intended

subsection (b) to operate as the Secretary here contends.

[3, 4] Third, though the courts remain the final interpreters of an act

of Congress, see FMC v. Seatrain Lines, Inc. 411 U.S. 726, 745-46,

93 S.Ct. 1773, 36 L.Ed.2d 620 (1973); Hart v. McLucas , 535 F.2d

516, 520 (9th Cir. 1976), the courts have also repeatedly recognized that

an administrative agency's reasonable interpretation of the statute which

is administers is deserving of considerable respect. See New York

Department of Social Services v. Dublino , 413 U.S. 405, 421, 93 S.Ct.

2507, 37 L.Ed.2d 688 (1973); Udall v. Tallman , 380 U.S. 1, 16-17,

85 S.Ct. 792, 13 L.Ed.2d 616 (1965); White v. United States Civil

Service Commission , 468 F.2d 1357, 1358 (9th Cir.

1972). [7] In the instant case

the Secretary's reasonable reading of the Act is consistent with both the

language of the statute and congressional pronouncements. We are thus most

reluctant to disregard the Secretary's interpretation.

We conclude, as did the Appeals Council, that subsection (b) does not

authorize the disbursement of Mrs. Guidet's aid to a "representative

payee."

Cir.

1972). [7] In the instant case

the Secretary's reasonable reading of the Act is consistent with both the

language of the statute and congressional pronouncements. We are thus most

reluctant to disregard the Secretary's interpretation.

We conclude, as did the Appeals Council, that subsection (b) does not

authorize the disbursement of Mrs. Guidet's aid to a "representative

payee."

[5] Though apparently acknowledging that on its face subsection (b) does

not authorize such payment, Ms. Smith argues that when that subsection is

read in conjunction with other parts of the Social Security Act a

statutory basis for such payment emerges. First, she notes that the ALJ

found that because Title II of the Social Security Act provides for making

underpayments to individuals other than the eligible person's surviving

spouse, "[t]he parts of the statute must be read reasonably together to

accomplish their purpose. The authorization in the one subsection [of

Title II] is meant to be understood in all the other sections [of the Act,

including Title XVI]."

Section 204(a)(2) and (d) of Title II, 42 U.S.C. § 404(a)(2) &(d),

includes very detailed provision for making underpayments to persons other

than a deceased individual's spouse, including to "the legal

representative of the estate of the deceased." § 204(d)(7). But when

Congress wished to incorporate parts of Title II into the newer Title XVI,

it did so explicitly. For example, subsection (d)(1) of § 1631, the very

section with which we are concerned, selectively incorporates into Title

XVI procedures specified in parts of Title II. Moreover, we cannot infer

such incorporation here because the Title II provision for paying "the

legal representative of the estate" conflicts directly with the language

of § 1631(b) and the House Report's statement that "[u]nderpayments . . .

would not be paid to the estate of a deceased since that would not further

the objective of meeting the current needs of individuals."

f Title II. Moreover, we cannot infer

such incorporation here because the Title II provision for paying "the

legal representative of the estate" conflicts directly with the language

of § 1631(b) and the House Report's statement that "[u]nderpayments . . .

would not be paid to the estate of a deceased since that would not further

the objective of meeting the current needs of individuals."

Ms. Smith responds next that § 1631(a)(2) indicates the propriety of

payment to a payee other than the eligible individual or his spouse. That

provision reads in part:

Regardless of the proper interpretation of this provision vis-a-vis regular SSI payments, Congress has provided that

underpayments should be distributed in accordance with subsection (b),

specifically dealing with underpayments. And "[f]undamental maxims of

statutory construction require that a specific section be found to qualify

a general section. A specific statutory provision will govern even though

general provisions, if standing alone, would include the same subject." Monte Vista Lodge , 384 F.2d at 129; see Clifford F. MacEvoy Co.

v. United States ex rel. Calvin Tompkins Co. , 332 U.S. 102, 107, 64

S.Ct. 890, 88 L.Ed. 1163 (1944).

Ms. Smith argues finally, and most powerfully, that her construction

better satisfies the general congressional policy underlying Title XVI of

helping the elderly and disabled. She notes that families will be less

willing to assist their aged and disabled relatives if they fear that they

will not obtain reimbursement should their relative pass away before

payment. She also notes that the Secretary's interpretation in essence

"rewards" the Secretary for failing to process claims quickly and

accurately because the Government may avoid paying monies otherwise due

should an eligible individual without an eligible spouse die before

payment (as in this case)

y fear that they

will not obtain reimbursement should their relative pass away before

payment. She also notes that the Secretary's interpretation in essence

"rewards" the Secretary for failing to process claims quickly and

accurately because the Government may avoid paying monies otherwise due

should an eligible individual without an eligible spouse die before

payment (as in this case). Finally, she contends that the Secretary's

interpretation creates an incongruous scheme wherein the Secretary can pay

regular SSI benefits under subsection (a)(2) but not underpayments under

subsection (b) to individuals other than an eligible spouse.

We have a good deal of sympathy for Ms. Smith's policy claims. We are

afraid, however, that in light of the legislative history and language of

§ 1631(b), we must reject her effort to redesign the statute. For as the

Supreme Court has recently written:

National Broiler Marketing Association v. United States , 436 U.S.

816, 827, 98 S.Ct. 2122, 2130, 56 L.Ed.2d 728

(1978). [8]

AFFIRMED.

MERRILL, Circuit Judge, dissenting

[1] In his findings of fact,

adopted by the Appeals Council, the administrative law judge wrote:

[2] The administrative law judge

noted: "Although at the time some questions were unsolved, the present

record does not reflect any reason to deny payment other than the

applicant's death." The Government acknowledges that for purposes of this

appeal, it should be assumed that there was no reason to deny benefits for

January and February other than Mrs. Guidet's death.

[3] The parties correctly assert

that the Appeals Councils decision represented a final administrative

decision appealable in district court under 42 U.S.C. §§ 405(g) and

1383(c). The district court's grant of summary judgment constitutes a

final judgment, appealable to this court under 28 U.S.C. § 1291.

[4] This court has recently

written:

and February other than Mrs. Guidet's death.

[3] The parties correctly assert

that the Appeals Councils decision represented a final administrative

decision appealable in district court under 42 U.S.C. §§ 405(g) and

1383(c). The district court's grant of summary judgment constitutes a

final judgment, appealable to this court under 28 U.S.C. § 1291.

[4] This court has recently

written:

Summary judgment may be granted "'only where there is no genuine issue of

any material fact or where viewing the evidence . . . in the light most

favorable to the adverse party, the movant is clearly entitled to prevail

as a matter of law.'" Caplan v. Roberts , 506 F.2d 1039, 1042 (9th

Cir. 1974). See Fed.R Civ. P.56.

Loya v. Immigration & Naturalization Serv. , 583 F.2d 1110,

1113 (9th Cir. 1978). The parties here have agreed on the material facts,

the dispute involving the proper interpretation of relevant statutes and

regulations. Because the case could thus be resolved as a matter of law,

summary judgment was the proper procedural device.

[5] See note 7 infra .

[6] See page 157 infra .

[7] The Secretary's regulations

are consistent with his interpretation of subsection (b). Section

416.542(b), 20 C.F.R., reads in part:

If the Secretary's regulations conflicted with the proper meaning of the

statute they were intended to implement, they would of course be invalid.

See Townsend v. Swank , 404 U.S. 282, 286, 92 S.Ct. 502, 30 L.Ed.2d

448 (1971); Hart v. McLucas , 535 F.2d 516, 520 (9th Cir. 1976). But

where the regulations are reasonable and reflect the language and policy

underlying the statute, the courts should carefully consider the

regulations in determining the proper interpretation of the statute. See Northern Indiana Pub. Serv. Co. v. Porter County Chapter of Izaak

Walton League of America, Inc. , 423 U.S. 12, 15, 96 S.Ct. 172, 46

L.Ed.2d 156 (1975); Ehlert v. United States , 402 U.S. 99, 105, 91

S.Ct. 1319, 28 L.Ed.2d 625 (1971); Bone v

and policy

underlying the statute, the courts should carefully consider the

regulations in determining the proper interpretation of the statute. See Northern Indiana Pub. Serv. Co. v. Porter County Chapter of Izaak

Walton League of America, Inc. , 423 U.S. 12, 15, 96 S.Ct. 172, 46

L.Ed.2d 156 (1975); Ehlert v. United States , 402 U.S. 99, 105, 91

S.Ct. 1319, 28 L.Ed.2d 625 (1971); Bone v. Hibernia Bank , 493 F.2d

135, 139 (9th Cir. 1974).

Ms. Smith refers to § 416.601, which reads in part:

Ms. Smith contends that § 416.601 applies to § 1631(b) and therefore

payment to either her or the health facility as a "representative payee"

would constitute payment to "such individual" within the meaning of §

1631(b). The Secretary responds that § 416.601 cannot be applied to §

1631(b).

We think the Secretary is correct. To invoke the § 416.601(b) equivalency

rule in the context of § 1631(b) would mean that the Secretary could pay

any "appropriate person." This would in effect abrogate the limits of §

1631(b) that Congress intended to apply to underpayments. Instead,

underpayments would essentially be subject to the same rule as are regular

payments under § 1631(a)(2). That is, payment could be made to such

individual or eligible spouse -- the scheme common to subsections (a)(2)

and (b) -- or to an appropriate other person -- a method statutorily

limited to subsection (a)(2). We cannot disregard congressional intent to

limit underpayments under subsection (b) more than regular payments under

subsection (a)(2).

are regular

payments under § 1631(a)(2). That is, payment could be made to such

individual or eligible spouse -- the scheme common to subsections (a)(2)

and (b) -- or to an appropriate other person -- a method statutorily

limited to subsection (a)(2). We cannot disregard congressional intent to

limit underpayments under subsection (b) more than regular payments under

subsection (a)(2).

This conclusion is reinforced by the language of § 416.601. That language

parallels the language Congress employed in § 1631(a)(2), suggesting that

the Secretary intended the regulation to apply in that context and not in

the different § 1631(b) payment scheme. Finally, we note that the

Secretary's reasonable interpretation of his own regulation should be

accorded great respect by a court interpreting the regulation. See Northern Indiana Pub. Serv. Co. , 423 U.S. at 15, 96 S.Ct. 172; Ehlert , 402 U.S. at 105, 91 S.Ct. 1319; Bone , 493 F.2d at

139. This is particularly so here because Congress gave to the Secretary

the task of implementing congressional intent. § 1631(a)(1), 42 U.S.C. §

1383(a)(1). In sum, we concluded that the Secretary's reading of his

regulations is consistent with and supports the proper reading of § 1631.

[8] In the interpretation of his

regulations the Secretary has recognized the same limitation. In January

of 1974 the Secretary first proposed regulations dealing with

underpayments, writing: "If there is no surviving eligible spouse, no one

can receive the underpayment." 39 Fed. Reg. 2012 (1974). After receiving

comments about the proposed regulations, the Secretary noted: