BATTERTON v. FRANCIS
Legal provision: Aid to Families with Dependent Children (AFDC--provisions of the Social Security Act)
Argument of Joel J. Rabin
Chief Justice Warren E. Burger: We will hear arguments next in 1181 Batterton against Francis.
Mr. Rabin, I think you may proceed.
Mr. Joel J. Rabin: Thank you, Mister Chief Justice.
May it please the Court.
This litigation began only six years ago and it has been before the court on two previous occasions.
Despite its complex course through the Federal Judicial system, there is only one clear cut issue, now facing the court this time.
And, that is whether the present version of the regulation of the Secretary of Health Education and Welfare, 45 CFR, 233-100A1 is valid under the grant of rule making authority containing Section 407A of the Social Security Act.
So, what we are arguing today is an Administrative Law case.
One concerning the proper scope of agency rule making.
By its petition for certiorari, Maryland seeks reversal of an order by a Three-Judge District Court, affirmed by the Court of Appeals for the Fourth Circuits denying Maryland’s motion to vacate an injunction previously entered by the District Court.
That denial was based on holding that the HW regulation was invalid under Section 407A.
Before stating the facts, it might be helpful to briefly outline the statutory framework.
The AFDC-UF Program, unlike the regular AFDC Program, authorizes benefits to two parent households, where the need or deprivation of the children in the family arise from the unemployment of the father.
Program was first enacted in 1961 as the Unemployed Parent Program and covered need or deprivation arising from the unemployment of either parent.
In its original form Section 407, provided for coverage of children, who are needy as a result of the unemployment of a parent “As define by the State.”
In 1968, substantial amendments were made in program and the language of Section 407 was changed from unemployment as defined by the State to “Unemployment” as determined in accordance with standards prescribed by the Secretary.
After passage of these amendments, HEW prescribed the predecessor version of 233-100A1, which mandated an hours work criterion for State definitions of unemployment.
All persons who work less than 30 hours per week.
The regulation also permitted coverage per persons who work up to 35 hours per week.
That was the regulation which was in effect when this litigation began in 1971.
The claimants in this case, all applied for Maryland AFDC-UF benefits, after applying for and being denied, Maryland unemployment compensation benefits.
Claimant Robert Francis, a laboratory technician, was denied unemployment insurance because he was participating in a strike which resulted in a work stoppage at his plant.
Claimant Edward Wright, who intervened in the Francis case, was disqualified because he was fired from his job as a carpenter for excessive absenteeism in the Maryland Unemployment Insurance Agency determined at that time, the constituted gross misconduct.
Claimant Barry Bethea(ph), who files a separate action, which was consolidated with Francis case, on appeal was disqualified from unemployment conversion, when it was determined that he had voluntarily left his job as a truck driver delivery man without a good cause.
All these claimants were then denied AFDC-UF benefits in Maryland pursuing to Maryland’s Social Service Regulation, 702091082, which provides that a grant may not be paid for AFDCE which it is Maryland label for AFDC-UF “To meet need due to being disqualified for unemployment insurance.”
The Three Judges District Court which was convened in the Francis case determined in its first decision which we described in our brief as Francis I, that this Maryland regulation did not violate the Equal Protection Clause, as claimants had alleged, but that it did violate the predecessor version of 233-100A1.
In a courts’ view, that regulation did not permits States to consider any factors other than hours worked in determining unemployment.
As a result, the District Courts subsequently enjoined enforcement of the Maryland Regulation.
When that injunction was appealed by the State to this court, the Solicitor General advised the Court, that HEW had always interpreted the statue and its own regulation to permit other State eligibility factors such as contained in the Maryland Rule.
However, since HEW had decided to amend its regulation to expressly permit regulations such as that of Maryland, the Solicitor General recommended Summary Affirmance, and this Court took that action.
Thereafter HEW did amend the regulation as the Solicitor General had indicated and the regulation now requires that States pay benefits to those persons who work less than 100 hours per month except that States are permitted to deny benefits to persons engaged in a labor dispute or engaged in conduct resulting or which would result in disqualification under the States Unemployment Compensation Laws.
After that Regulation was amended in that manner; Maryland filed a motion to resolve injunction in Francis I, but the District Court in Francis II decision held that the Maryland Regulation was still invalid on the ground that the amended HEW Regulation now violated Section 407A.
The decision in Francis II not to vacate the previously entered injunction was based on a theory that Section 407, relates to unemployment of a father.
And a father, who was discharge of the cause is unemployed, and HEW by regulation cannot permit States to deny benefits to person who would fall within this ordinary meaning of the term.
With regard to persons out of work as a result of a labor dispute, the District Court held the amended regulations do not establish any standards for the States.
It did not prescribe standards as the statute provided, since it granted discretion to the States to deny such or to pay such benefits.
The separate District Court decision in the Bethea case, adopted the same reasoning as the Francis II decision did with regard to misconducts.
The Bethea case was the one which involved persons who had voluntarily quitted without a good cause.
The Court there held as in Francis II, with regard to misconduct that such persons were in fact unemployed and under the statute, the Federal Agency had no authority to deny benefits to such persons.
Court of Appeals affirmed those two District Court decisions in a Per curiam decision adopting the reasoning and conclusions and not offering any rationale of its own.
As I indicated earlier, the State believes that the basic issue in this case, is of the scope of HEW’s ruling authority.
We contend that the issue is not whether AFDC-UF benefit should be paid to misconducts, to strikers, or the persons who have voluntarily quit there jobs.
Rather the question is, whether the statute gives HEW the authority to allow States to choose to pay such benefits.
Our position stated very briefly, is that statute constitutes a very broad grant of legislative type of rule making authority, HEW and that the regulation constitutes a reasonable exercise of that authority.
There obviously, can be no question that the language of the statute expressly grants about rule making authority.
We believe that those statutory words fall within the label that the Professor Jaffe and Davis had devised namely, legislative type of rule making.
Other commentators refer to them as prescriptive or substantive rules.
And it is well established, that such rule making is to be given substantial difference by the Courts.
As this Court stated in Citizens to Preserve Overton Park, the ultimate standard of review is a narrow one.
The Court is not empowered to substitute its judgment for that of the agency.
Thus, the HW Regulation, we contend is valid and should be upheld if it is reasonable under the statute even if the Court favors a different result.
Claimants and the District Court avoided the issue of the broad scope of rule making authority containing Section 407 in two ways.
First, as I indicated, they argued that the regulation was invalid because it excluded from the persons’ from programs, certain persons’ who fell within the ordinary meaning of that term.
We would respectfully contend that that reasoning begs the question.
The purpose of the statutory words was to give the rule making authority to HEW and for HEW to give content to the term unemployment.
The term has never been self defining in the statute.
It was not self defining in 1961 and it is not self defining after 1968.
Reliance on a dictionary meaning cannot answer such a question as this court had so recognized in the Burns v. Alcala case which concerned the meaning of the term 'dependent child'.
While the District Court and the claimants choose to rely on the dictionary meaning of the term 'unemployment', of course, they choose to ignore totally, the dictionary meaning of the words in accordance to standards prescribed by the Secretary.
The District Court also avoided the question of the scope of rule making authority contained in 407 by holding with regard to persons’ who had participated in a labor dispute, that the Section mandated a uniform national definition of unemployment.
Therefore, the District Court reasoned that the limited grant of discretion to the States with regard to such persons’ disqualified for participation in labor dispute was improper.
I do want to mention at this point that Maryland agrees with the point raised by the Solicitor General in his memorandum, that the Court does have to get to the question of the validity of the regulation in connection with persons’ participating in a labor dispute because in Maryland, all the claimants and the Maryland rule only operates against persons’ who are disqualified for unemployment insurance.
It so happened that the leading name, plaintiff was a person who was participating in a strike but he was denied benefits because under the Maryland rule, he was disqualified from unemployment insurance.
Chief Justice Warren E. Burger: Now, you have told us that the dictionary meaning of the word unemployment is basically, irrelevant, is that it?
Mr. Joel J. Rabin: We think it is not the test for term.
Chief Justice Warren E. Burger: It is not dispositive.
Mr. Joel J. Rabin: That is correct, Your Honor.
Chief Justice Warren E. Burger: But you would concede, I suppose that it is relevant, if it is said that in looking at the regulations, you have to, they have some rational relationship to the word unemployment.
Mr. Joel J. Rabin: That is correct, Your Honor.
That is correct, and it is our contention that the HEW Regulation and the Maryland rule, they are under – are reasonable under that...
Chief Justice Warren E. Burger: -- in defining the word unemployment.
Mr. Joel J. Rabin: That is correct.
Chief Justice Warren E. Burger: But I just want to be sure you do not say that the statutory phrase is irrelevant.
Mr. Joel J. Rabin: No, we think.
Chief Justice Warren E. Burger: It all depends on what the regulation says.
Mr. Joel J. Rabin: And we would not contend that HEW could not look at the dictionary meaning when it --
Chief Justice Warren E. Burger: Well, you must not look at the ordinary meaning of the word and then defining by regulation, what it means as in giving a precise regulatory definition.
Mr. Joel J. Rabin: That is correct.
The legislative history with regard to Section 407, it has been said out at great length in our brief, claimants brief, the appendix and the decisions below and I will not try to repeat it.
It is true that there are phrases in the committee reports that talked about a national definition of unemployment.
On the other hand, it is also true that other reports talks about the statute as authorizing a national definition or in sometimes it is the same report that uses the phrase, a national definition.
And it is also true that those reports at some points used the actual statutory words namely, as determined in accordance with standards prescribed by HEW.
It would have been very easy for the Congress to mandate a national definition with regard to a uniform national definition.
All they would have to in 1968, would have been to substitute the word 'Secretary' for the word 'State' in the statute.
This fact was recognized by the District Court in its Francis I decision but and that decision points out Congress chose instead to use new words which did not mandatorily require the Secretary to require each state to adopt the same of the word, unemployment but instead merely authorize the Secretary to prescribe a national meaning if the Secretary so desires.
The many statements as to the intent of the 1968 change must be considered in connection with the actual words used in the statute.
This court has recognized, the most persuasive evidence for the purpose of a statute is the words by which the legislature chooses to give expression to its wishes.
We think that when one considers the legislative history behind the 1968 amendments and looks at the words of the statute themselves, it is clear that Congress contemplated that the Secretary of HEW was free to allow the States limited discretion to vary the coverage in response to their different needs and policies.
Thus, under the broad authority granted by the Section, the federally prescribed standards could take the form of a national definition but they could also grant the States some discretion in some specific areas as in fact the regulation has done.
Assuming that to be the case, HEW's regulations still must meet the test of reasonableness under the statute or the courts must set it aside.
We think, it is clear that 233-100A1 does meet that test in connection with the purposes of the AFDC-UF Program as set out a statute and the legislative history.
When the program was first adopted, President Kennedy indicated that it was intended for unemployed workers and he gave the example of a person who had exhausted his unemployment compensation.
We have quoted at length in our brief from the statements by Congressman Burns, one of the co-sponsors of the original legislation, which makes clear that Congress did not intend that the program provide benefits to persons who are voluntarily unemployed.
And as originally adopted in 1961 and as amended in 1968, Congress made clear that the program was intended to provide assistance to persons and in connection with employment not covered by the existing Unemployment Compensation Program, that the program was not designed to substitute for that already existing nationwide program.
Furthermore, as amended the program is very similar in operation on unemployment compensation and that it is an Income Maintenance Program, designed to assist those who are unemployed not as result of their own conduct.
In light of the similarity of these purposes, namely the persons who are involuntarily unemployed, we think it is clearly not unreasonable to attempt by regulation or to permit by regulation, a State to harmonize the operation of these two Income Maintenance Programs.
Namely, not to pay benefits under one scheme for conduct which results in a disqualification under the other.
We note that the District Court in dismissing the claimants constitutional claim, recognized this harmonization purpose as a rational basis for the regulation.
The court upheld the argument that the rationalization of these two programs which are both part of the scheme of cooperative Federalism described by this court in the King case established by the Social Security Act was a proper rational basis although the District Court did not necessarily agree with that basis.
It is certainly not unreasonable to grant States limited discretion contained in 233-100A1.
In one of the Public Assistance Programs created by the Social Security Act; when the statute permits such a grant of limited discretion.
Now, the basic purpose of the statute is to extend assistance to a group of needy persons and this is true of all the public assistance programs.
By making partial Federal reimbursement available to those States which need certain substitute Federal requirements.
Now, unlike the other Public Assistance Programs, 24 states have not joined the AFDC-UF program.
Although, as indicated in our brief, three states have joined in the last two years and one state has dropped out of the program.
As shown by the Solicitor General’s memorandum, a significant number of States, nine, if you count and include Maryland, have restrictions -- actually there is more than nine because the Solicitor General classified eight states with regard to cause and eight states with regards to strikers, so the total number of states who might be interested in this type of a restriction would be greater than nine.
It is difficult for Maryland to see how the prohibition against such state discretion will encourage the general purpose of the program, of the statute through state participation in this program which is designed to assist needy, laid-off workers and unemployed through no fault of their own.
We think that perhaps the best proof, of the reasonableness of the grant of discretion found on the regulation is the approach taken by the Federal Government itself in connection.
Justice Potter Stewart: It seems the statute does not introduce that element that you just mentioned, though no fault of their own.
The neediest people maybe children in the homes of unemployed people who are unemployed because of fault of their own.
Mr. Joel J. Rabin: You are correct Mr. Justice Stewart that it does not use that phrase.
Justice Potter Stewart: What?
Mr. Joel J. Rabin: The statute, but it does not, in other ways may clear that persons who through their own conduct are not active, for example, not actively seeking employment are not entitled to benefits.
Chief Justice Warren E. Burger: There are other forms of welfare benefits to take care of the needy children, needy people besides just the ones we are talking about here.
Mr. Joel J. Rabin: Well, that is correct, if you are talking about the medical assistance, in addressing this --
Chief Justice Warren E. Burger: But this is AFDC-UF?
Mr. Joel J. Rabin: Right.
We think, the legislative history shows that the program was not designed to assist those who are voluntarily unemployed.
Chief Justice Warren E. Burger: This was designed to assist children.
Mr. Joel J. Rabin: That is correct.
Chief Justice Warren E. Burger: Is it not?
Mr. Joel J. Rabin: That is right.
And we do not content, it is not Maryland's position that the states that have chosen not to adopt the restrictions that Maryland has chosen are doing something illegal.
Chief Justice Warren E. Burger: No, I understand that
Mr. Joel J. Rabin: But.Mr.
Chief Justice Warren E. Burger: The question is whether this regulation is permissible.
Mr. Joel J. Rabin: That is correct, and we think that, when you look at total statutory framework, there is a requirement for job registration.
There is a denial of benefits for refusal to accept a suitable job offer.
Chief Justice Warren E. Burger: This is statutory or?
Mr. Joel J. Rabin: These are all statutory and they are contained in Section 407.
We think taking those requirements with the legislative history, it seems clear that the thrust of the program was to help those who are involuntarily unemployed.
Chief Justice Warren E. Burger: The states are not compelled to participate in this program.
Mr. Joel J. Rabin: That is correct, Your Honor and 24 states had not participated although, a few have, because of the recent economic conditions in last few years, three have joined the program.
Chief Justice Warren E. Burger: So, then no states the families and the children of those families in these circumstances depend upon other.
Mr. Joel J. Rabin: That is correct, Your Honor.
They receive no assistance of this type at all and it is our contention that is reasonable for the Secretary of HEW to look at what he can do to encourage those states to participate in the program in prescribing his regulations and that is we think, in fact, supports this particular regulation, which gives states the choice.
It is does not mandate to make the payments and it does not prohibit that they make the payments.
Chief Justice Warren E. Burger: And the flexibility to permit variations from state to state were contemplated by Congress to take into account different forms of industry and occupation among other things, were they not?
Mr. Joel J. Rabin: We think so.
We think that this court made clear under Dublino decision, that in connection with the welfare cases, the Welfare Programs, the Courts are to get considerable attitude to the differing state interests, so that the programs can be developed in a flexible manner to meet the needs in particular States.
The Congress is clearly aware of the issue of coverage of strikers in this particular program.
That is shown by colloquia between Congressman Mills and Dominic, which is cited in claimants brief, so Congress knew, when this program was originally adopted in 1961, that it was not mandating or not prohibiting, in fact the colloquia goes to the effect, the Congressman Mills indicates that if states chose, they could make the payments to strikers.
We think that, as I was saying, the example by the Federal Government in connection with the state administered Unemployment Compensation Program, we think is a good example of the reasonableness of the Secretary’s Regulation.
Congress has been aware for years and the Federal Agencies have been aware for years, to the fact that a few states, pay unemployment compensation benefits to strikers and many states do not pay unemployment compensation to strikers.
However, with regard to that particular program, which is administered by the states and it is financed through state taxes, Congress has decided to leave that discretion to the states.
We think that that approach is no less reasonable when taken by the administrator of a program who is charged with broad authority to implement and supervise the program.
No less reasonable than it is, when it is taken by the Congress.
Claimants contend that the HEW Regulation is invalid under the state eligibility decisions by this court in recent years in the welfare field, including the most recent formulation in Burns v. Alcala; the 1975 decision, I referred to previously concerning whether unborn children are necessarily covered under the AFDC program.
However, contrary to their contention, it's our view that that decision really supports the validity of the HEW regulation.
In Burns, the Court stated that a participating state may not deny aid to persons who come within the statute.
In the absence of a clear intent that the Congress meant the coverage to be optional.
Well, there is such an indication in this case.
It is right in the statute.
Congress provided that the Secretary of Health Education and Welfare had the option to extend or restrict the coverage of the statute and also to grant a limited discretion to the states.
We think that even more appropriate in support of the HEW Regulation is the reasoning of the Dublino decision to which I referred to previously.
We also think that the Louis v. Martin case which upheld HEW broad rule making authority with regard to the AFDC Program supports this case.
We think that the decision by this Court recently enabled behind which upheld the regulation by the Secretary of Agriculture also supports the regulation.
That decision cautioned the courts to defer to the informed experience and the judgment of responsible administrative agencies, even if they might favor a different result.
The decision below interpret the statutory language, unemployment as determined in accordance with standards prescribed by the Secretary, which is an expressed grant of very broad rule making authority, to mandate coverage for persons’ disqualified from unemployment compensation because they were fired for misconduct or because they voluntarily quit their jobs.
And also, to bar any grant of discretion to the states as to payment to the strikers.
In effect, they say that HEW has no broad authority with regard to that first category.
And with regard to the second category, HEW must either mandate payments on a nationwide basis or prohibit payments on a national basis.
We respectfully contend that that is not a reasonable interpretation of the statutory language or of the legislature history.
It is now and the Solicitor General have demonstrated the regulations which HEW has promulgated under the statutory words, we think is a reasonable regulation in the Maryland Regulation which authorizes it are valid and the decision below should be reversed.
I would like to reserve the remainder of my time, thank you.
Chief Justice Warren E. Burger: Very well.
Argument of C. Christopher Brown
Mr. C. Christopher Brown: Mr. Chief Justice, may it please the Court.
This case basically involves a question, whether or not, the Secretary of HEW has followed the power that he was given by Congress in a specific statute 42 USC Section 607.
The statute reads and as it is pertinent to this case, in defining who can get this certain kind of welfare benefit for families who do have children.
That it must go to needy children whose “Father's unemployment as determined in accordance with standards prescribed by the Secretary and so forth and so on with other pre-conditions.”
So, we are talking about unemployment in accordance with standards prescribed by the Secretary.
The Secretary in attempting to define unemployment has done so in various ways.
First of all, the Secretary has defined unemployment in terms of hours worked, which we have no quarrel with whatsoever.
That is the most common sensible way in which to define whether or not a person is unemployed or not.
There may be other ways and maybe, whether or not, he has a contractual duty or right with respect to an employer.
It could also perhaps be defined with respect to the rights that he has, seniority rights perhaps to an old job, very many aspects of what an employee might have to expect in a specific case.
But the Secretary of HEW has not defined the term unemployment in that way, instead the Secretary has basically defined the term, by the legal consequences of the way in which a person lost his last job.
So in addition, to defining unemployment in terms of hours worked, the Secretary also allows the States at their option if they so choose the definition of unemployment which turns on two things: one, whether or not that person is eligible for unemployment insurance and secondly, whether or not that person has been involved in a labor dispute.
It is our contention, Your Honors, that the latter definitions or attempted definitions by HEW are null and void as all the judges that have heard this case thus far, have found.
As a prelude, I would like to say that, we agree with the state.
The issue in this case is that part of the HEW regulation dealing with giving the states the power to disqualify people from AFDC-UF, this Welfare Program who have in turn been disqualified by those states for unemployment insurance.
I do not think, the Solicitor General does not think and the state that has considered it does not think, that we are talking about that part of the HEW’s statute dealing with striker disqualification.
The state has not acted on that basis.
It merely disqualifies people who are disqualified in turn for unemployment insurance.
As a consequence, I cannot see how this case or controversy before this court on that second part of the HEW’s statute dealing with striker disqualification.
Chief Justice Warren E. Burger: Is your quarrel with the mechanism or with the substance of it?
Mr. C. Christopher Brown: I am not--.
Chief Justice Warren E. Burger: Suppose the State of Maryland had enacted its eligibility qualifications in precisely the same terms but in a separate statute or regulation.
I am trying to get at just -- the focus of your objection to it.
Mr. C. Christopher Brown: Objection to the definition itself or my objection to what is that issue on this case?
I was saying that the
Chief Justice Warren E. Burger: The two are quite similar.
Mr. C. Christopher Brown: Well, I do not think that issue in this case is part of the HEW regulation dealing with strikers, per se.
Labor disputes per se.
I think, and Maryland conceded and Solicitor General states that -- what is that issue here is that portion of the regulation, the HEW Regulation, which deals with disqualification from unemployment benefits.
Now, it so happens that Maryland unlike other States, few other states in (Inaudible) tends to also disqualify strikers from unemployment insurance.
So, in that sense it is relevant but it is very indirectly irrelevant.
Now, the case seemingly can be resolved without specifically asking the question of whether the Secretary has the power to define unemployment in terms of people who are involved in labor disputes, who are not involved in labor disputes.
It seems to be two separate different kinds of questions.
I cannot see another party seem to come up with a way to see, how there can be a case of controversy with respect to the labor dispute portion.
We all admit to there is with respect to the unemployment insurance disqualification, of course, I have said that along.
Our major controversy, Your Honors, with the Secretary’s definition allowing states to disqualify people, if they in turn have been disqualified from employment insurance is this.
The statute gives the Secretary, the power to define unemployment not the way in which you lost your last job.
A person can be unemployed now, for various different reasons that brought him in to that position.
Unemployment in the common sensible term means, your status right now.
Do you have a job?
Do not you have a job?
Are you getting money?
Are you not getting money?
Chief Justice Warren E. Burger: But the statute in question was enacted to give the Secretary authority to make rules relating to supplementing state unemployment compensation plans, was it not?
Mr. C. Christopher Brown: Your Honor, I remember nothing in the legislative history which has that concept.
Chief Justice Warren E. Burger: In other words, you do not think that any of this statutory language or can be related to disqualifications in state plans by virtue of the fact that the Federal Legislation had in mind the State Plan?
Mr. C. Christopher Brown: State Welfare plan or Unemployment Insurance.
Chief Justice Warren E. Burger: No, State Unemployment Compensation Plan.
Mr. C. Christopher Brown: The Act did have in mind, the State Unemployment Compensation Plans to very large extent.
Chief Justice Warren E. Burger: Well, mention those.
Mr. C. Christopher Brown: Five or six times in this specific Section of the act.
Chief Justice Warren E. Burger: Well, as you are aware and as I am sure your opponents are aware, that typical State Unemployment Compensation Plan provides four or five disqualifications and that serve in the kind of labor dispute type that you have been talking about.
Mr. C. Christopher Brown: That is correct.
Chief Justice Warren E. Burger: Is it not at least inferable that Congress, when they used the term 'unemployment' was using it in the term, in the sense that unemployment is that term be used to be define eligibility for State Unemployment Compensation?
Mr. C. Christopher Brown: Well, that is possible explanation.
There is not one word in the legislative history that I have found.
Chief Justice Warren E. Burger: If that is possible explanations.
It is not that enough for the Secretary to go forward on and promulgate a regulation?
Mr. C. Christopher Brown: I do to think so, Your Honor, because it is such unusual explanation.
Unemployment is the first thing that pops to my mind in trying to define an unemployed person, is not to define the legal consequences that he may be suffering from another benefit program.
That does not necessarily -- let us take this case, for example, a person who is allegedly committed misconduct in the job and therefore is now out of work.
The Secretary in essence is trying to make that person who has no employer, who has no money, and who is out of work, somehow not be unemployed.
Seems to me, the Secretary is standing the definition on his head.
Now, you can do that in certain situations, certain acts, for instance, the NLRA which has been talked about here.
It defines employee in ways in which the common person would not really define employee.
And there are many statutes which do that but there is no indications whatsoever in this case that the Congress intended the Secretary to come up with a term of art kind of definition, as opposed to the common sensible definition of what an unemployed person is.
And indeed, if there is any hint to be had from how the Congress interrelated this program into the unemployment insurance schemes that went on in the private state, in each state, it would be I think, that it did not intend to disqualify this sub class of people.
Otherwise, they would have said so.
Chief Justice Warren E. Burger: Why did they authorize the Secretary, then to make regulations defining the term?
Mr. C. Christopher Brown: It is my guess, Your Honor that the primary motivation was the legislative history shows, for example, Arizona at one point in time had 16 families in this program, neighboring Utah or Colorado, I forgot which, had 1,200 or 1,600 something like that.
Each state has its own different terms.
Congress wanted to unify things.
Legislative history is replete with comment about a national uniform standard across the Country.
Chief Justice Warren E. Burger: Do you mean that in an absolute sense?
Mr. C. Christopher Brown: I am sure, not in an absolute sense but in a much better sense than what existed at that point of time.
Chief Justice Warren E. Burger: The Congress wanted to have it; absolutely uniform that would have done all the defining itself would it not?
Mr. C. Christopher Brown: That would have one way of accomplish the task.
My guess is this.
Chief Justice Warren E. Burger: But they very carefully refrained from doing that and explained that they wanted to leave the States, some flexibility?
Mr. C. Christopher Brown: Well, not that they wanted to leave the states flexibility but they wanted to leave the definition of unemployment to the Secretary, who would be in better position to define, normally we would think, what unemployment actually means and my guess is that they would want the Secretary to define in terms of hours, as the Secretary originally did.
The Secretary has come up with his new way of defining unemployment as a result of this lawsuit.
This is the way to go around this, the earlier victory, plaintiffs had in this lawsuit.
But my guess would be, Congress said “Secretary, you pick the hour number” And the Secretaries had two different – originally it was 30 hours a week, now it is 100 hours a month which is the cut off limit.
If you work more than no AFDC, you are not unemployed.
Congress most rationally could have thought, let the Secretary pick the hour amount or perhaps let the Secretary define in another ways in terms of existing contract with an employer, amount of money to person earns as opposed to amount of hours of person works.
There are many other ways to do it.
There is no indication in the legislative history whatsoever, that Congress contemplates the Secretary doing this.
If anything, a Congressman Mills at one point in the legislative history has said in response to a question asked on the floor and Mills, of course is the sort of the father of this legislation.
He said that labor -- that strikers could be given AFDC-UF benefits.
If the States so desired, this was back in the days when the States had full definitional ability and Federal Government, HEW did not.
Now, I think in all, but two States, strikers are ineligible for unemployment insurance.
It would be very strange if Congressman Mills felt that unemployment insurance disqualificants could not get these program benefits, that he would say something like that about strikers.
It is totally inconsistent.
Another thing which was very inconsistent with here, is that the act mentions unemployment insurance five or six different times.
There is one section of the act talks about how it interrelates with the AFDC program and for example, if you are receiving unemployment insurance, you could not get this program.
Congress has recently amended that act to slightly change Glodgett v. Philbrook case, a couple of years ago, but still they talk about unemployment insurance, time and time again in the statute, but they do not say what the state is trying to get this court to say, namely, that Congress intended to those who cannot get unemployment insurance, a fortiori then could not get this Welfare Program.
Unknown Speaker: Well, that is your overstating.
Not that Congress intended that those who do not get unemployment insurance could not get this welfare, but whether or not a state was permitted to so determine?
Mr. C. Christopher Brown: I think that is correct.
Unknown Speaker: Whether they are -- more accurately whether the Secretary was --
Mr. C. Christopher Brown: Whether the Secretary is permitted to give to the State
Unknown Speaker: Put in a definition that would permit the States that their option to --.
Mr. C. Christopher Brown: That is correct; I see nothing in the legislative history which points in that direction.
Another thing which points against that direction is this very significant concern, if you acquainted yourself with legislative history, you would see its various parts --legislative history almost says nothing in this case but one thing that it does say is that we want uniform national definitions set by the Secretary.
We want the Secretary to say what you can do States and what you cannot do.
What the Secretary has done in this case in essence to say that if you want to, you do not have to but if you want to, you can disqualify people who cannot get unemployment insurance.
Now, each state has its own different system of unemployment insurance.
This book, a publication by the US Department of Labor talks about all the differences in all of the state programs on unemployment insurance.
If the state is correct and the Secretary probably can allow states to exclude people who cannot get unemployment insurance compensation.
You are going to have a different AFDC-UF program in every single state, almost by definition.
We think that would be the case because each state has different unemployment insurance system.
And then also, the states do not necessarily have to disqualify people who cannot get unemployment insurance.
The Secretary gives them the option of doing that or not doing that.
It is sort of confusing, the secretary is allowing us to define these people as unemployed, if we want to or as not unemployed, if a state, for instance, does not want to.
It cannot have it both ways.
Its got to be one way, its got to be the other way.
I think that is one of the problems.
If the Secretary would not be in as much danger in terms of invalidity of the regulation, if he had said it has to be this ,states you do this, you do this, you do this, and you do this and that is what you have to do.
Secretary of for various reasons, I think tried to play both ways and a person in this category, these people in this class, they are unemployed or they are unemployed, But they cannot be both ways.
Another aspect of which, I think, makes it very, I think it is reasonable to assume, that the kind of people who get AFDC-UF, this class of people here, are in many ways very different from the class of people who get unemployment insurance.
And as a consequence, it is not at all unusual for Congress to allow the children of these parents to get this kind of benefit, whereas they will allow the states to disqualify their parents from getting unemployment insurance.
Now, there are two different kinds of programs, they are very much interrelated, but this Welfare Program primarily is for children.
You cannot get this kind of welfare, unless you have a child.
On the other hand, unemployment insurance is for parents.
It is fact that you have children, do not have children really makes very little difference as to what kind of benefit amount you can get.
Unemployment insurance is for parents, AFDC is for children basically.
Unemployment insurance gives money based upon employers’ contributions, welfare.
AFDC gives it based upon tax revenues.
I can very well see, a rational Congress saying “If this man committed misconduct, his employer should not have to pay his keep on employment insurance, for 13 weeks or 26 weeks or whatever, after he has been kicked off the job.”
That makes sense.
Welfare Program, that is for children, incidentally, also Welfare Programs have very few fault concepts in them.
Normally speaking, we do not try to blame the child for something his father did.
It maybe, that the fathers in this case are bad fathers, because they did not handle their work job in a correct fashion.
But typically, the Welfare Programs in this Country and the Federal Programs specifically have not been concerned with fault in that sense.
Unemployment Insurance programs have that --
Justice Potter Stewart: Well, is it not true that unemployment insurance programs are not based upon proof of need.
Mr. C. Christopher Brown: That is correct.
Justice Potter Stewart: The person is eligible, if he is unemployed, no matter if he has some million dollars in stock market.
Mr. C. Christopher Brown: That is absolutely correct.
Justice Potter Stewart: Because Welfare Programs are based upon need, alone upon need.
Mr. C. Christopher Brown: That is true, that is true, Mr. Justice Stewart.
Chief Justice Warren E. Burger: Did not we hold in the Java (ph) case that it is a partial substitute for the earnings that have determined in --.
Mr. C. Christopher Brown: In essence, that is what it is.
And in the typical case somebody gets laid off their job, there is a 30 day waiting period in this case incidentally.
You have to wait 30 days before you can apply to this program and most states also require you to go to the unemployment line first to get unemployment compensation.
Once you have gotten that, you can come back try to get AFDC, if you are eligible for it.
There are similar programs but they have significant differences.
Chief Justice Warren E. Burger: But there are limitations even on the unemployment insurance, are there not?
Mr. C. Christopher Brown: There are time limitations.
Chief Justice Warren E. Burger: You must accept, you must report regularly.
You must accept employment if it meets the standards.
Mr. C. Christopher Brown: That is correct.
And those limitations on unemployment insurance are the same in this program also.
The men in this class have to report regularly, have to take jobs if they are offered jobs, and have to in essence, be willing to work.
It is a little bit of legislative history that says “This is not for the involuntarily unemployed.”
I think, the brief points it out quite clearly that in essence what they are saying is “You cannot reject a job, a bona fide job offer and still stay in this program.
If you reject it, there is a 30 day disqualification period.
So, if one of the fathers in this case, Mr. Francis, the striker, for example, if he rejected another job that the state offered him, he will be disqualified from receiving, having his children receive these benefits for 30 days.
Unknown Speaker: But not after that.
Mr. C. Christopher Brown: But not after that, unless he rejects another one.
Unknown Speaker: Unless he does it again
Mr. C. Christopher Brown: Unless, he does it again.
Some argument was made in essence by, I think, the Chamber of Commerce that somebody who is on strike, is in essence rejecting a job.
Well, he may -- let us, even assume that he did reject a job but there is a 30 day waiting period anyway.
So there will be an overlap between the disqualification period and 30 day wait.
If there are no further questions, I have nothing further to suggest.
Chief Justice Warren E. Burger: Very well.
Mr. C. Christopher Brown: Thank you.
Chief Justice Warren E. Burger: Do you have anything further Mr. Rabin?
Rebuttal of Joel J. Rabin
Mr. Joel J. Rabin: Just a few remarks, Mr. Chief Justice.
I should point out to the court that although Solicitor General is correct that the Maryland rule operate on the basis of disqualification of unemployment insurance, it is also true that the reasoning that applies to that part of the regulation would probably have an impact as to the validity of the second part of the HEW Regulation and the disqualification, namely participation in labor dispute, and in fact, if the Court upheld the HEW Regulation, that, I think would dispose of the issue entirely.
There was a pending regulation by HEW, which in light of the Lower Court’s decision proposed mandating payments to persons’ who are disqualified for unemployment compensation, except those persons’ who were participating in a labor dispute but the Secretary chose to hold up action on that regulation pending the outcome of this case.
I do want to indicate my agreement with major trust of Justice Rehnquist’s question and point out that in the legislative history, it is quite clear that Congress was thinking about the unemployment compensation scheme because in fact, President Kennedy in his statement proposing the program, used as an example, a person who had exhausted his unemployment compensation benefits.
It is true that there are certain differences between these two types of programs but it is also true that programs are very interrelated and there is substantial overlap.
For example, there is a substantial work experience requirement in the AFDC-UF Program, which in most cases, under many State Laws would make the person eligible for unemployment insurance.
It is also true that in many states including Maryland, the benefits to receive unemployment compensation are affected by the number of children in your family.
There is what is called a dependency allowance, so I do not think that you can say that the programs are unrelated or that they are totally different.
There are both Income Maintenance Programs designed to assist persons’ who had a substantial connection with the work force and who are now unemployed and it is our contention that their major thrust is to assist those person’s who are unemployed as a result to no fault of their own, involuntarily unemployed as the Java (Ph) decision itself pointed out.
Therefore, we contend, it is reasonable to permit the states to do in this similar program, what the states have already done in the other program, namely, had decided not to encourage or not to at least pay benefits to certain persons for conduct which they considered operates contrary to the basic thrust of the program.
I also want to mention, and I think that the word of art is a good phrase that is used by my colleague, which is exactly what the Congress had in mind when they passed the Statute.
That was why they gave legislative type of rule making authority to the Secretary.
In fact, the rule making authority given to the Secretary in Section 407, it is my understanding, is much broader than the authority that the National Labor Relations Board has under the National Labor Relations Act to define employees.
But the opinions of this court made clear that the he does have broad authority to define the word 'employee' in that scheme and we think that with a much more direct grant of authority in this case, the agency would have even greater authority and even greater difference should be paid to his judgment unless, it is arbitrary and capricious, and beyond the bounds of the regulation.
I have no further remarks unless there are any questions, thank you very much.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.