KNEBEL v. HEIN
Legal provision: Equal Protection
Argument of Stephen L. Urbanczyk
Chief Justice Warren E. Burger: We’ll hear arguments next in 75-1261, Secretary of Agriculture against Hein and the related case.
Mr. Urbanczyk, you may proceed whenever you’re ready.
Mr. Stephen L. Urbanczyk: Mr. Chief Justice and may it please the Court.
These consolidated appeals are taken by the Secretary of Agriculture and the Commissioner for the Iowa State Department of Social Services and an order of the three-judge District Court from the Southern District of Iowa.
That order enjoins on constitutional and statutory grounds, parallel state and federal regulations, that have bearing upon the amount of benefits appellees may receive under the Food Stamp Act.
We’ve described the operation of the food stamp program in our opening brief.
It is necessary here only to reiterate that benefits are provided under the food stamp program by permitting eligible households to purchase an allotment of food stamps for less than their face value and that the amount of the discount is a function of the household’s income.
Congress provided explicitly that the income of the household was to be the eligibility criterion for participation in the food stamp program, as well as the standard for determining what amount the household is required to pay for an allotment of food stamps.
Justice Potter Stewart: Household or householder?
Mr. Stephen L. Urbanczyk: Household.
Justice Potter Stewart: Household?
Mr. Stephen L. Urbanczyk: Yes, Mr. Justice Stewart.
Yes, when you [Voice Overlap] yes.
Justice Potter Stewart: Total picture?
Mr. Stephen L. Urbanczyk: Right.
Congress, however, left to the Secretary the task of defining income.
Income is not defined in the Act.
The Secretary has to find income in regulations that are set out in the appendix to our opening brief.
This case principally concerns the reasonableness of one of those regulations, as well as the regulation of the State of Iowa that is similar since the states are required to conform their administration of the food stamp program in conformity with the Secretary standards.
Now, let me describe the Secretary’s regulations briefly and explain how they where applied to the appellee class in this case.
In general, the Secretary has provided that all money’s received shall be included in income.
There are few exceptions.
For example, for items of income that are none recurring or extraordinary, but otherwise, all moneys received are generally included to income.
Now, included within the Secretary’s definition explicitly are payments received from federal assistance programs that where not specifically exempted by Congress.
Appellees in this case are individuals who receive such assistance in the form of an allowance that the State of Iowa provides to welfare recipients that are attending a work and training program.
That state program is federally funded under Title 20 of the Social Security Act.
Now, the regulation under which, the appellees receive this allowance provides for a sick monthly $60.00 flat allowance for full time trainees and it was $44.00 to the time this lawsuit was instituted.
Part time trainees receive a somewhat different type of grant.
They are provided a travel allowance for actual expenses computed on a rate per mile basis up to a maximum allowable amount to $45.00 a month.
These allowances like all other forms of government assistance, not specifically exempted by Congress were included in the Secretary’s regulatory definition of income.
The Secretary’s regulations also allowed the certain expenses are allowable as deductions from income.
In part pertinent here, the Secretary allows an itemized deduction for tuition and other mandatory educational fees and a standardized monthly 10% deduction of all travel allowances or $30.00 whichever is less to cover incidental expenses.
But the Secretary expressly has disallowed an itemized deduction for the commutation or other incidental expenses incurred by one who is attending school or attending the training program.
Now, I hasten to point out that the Secretary has not singled out students or trainees or special treatment in this regard.
No individual, be a student, a worker or whatever is allowed an itemized deduction for transportation costs.
Indeed, if you’ll take a glance at the regulations, I think you will conclude that ordinary household expenses such as transportation cost generally are not deductible under the Secretary’s regulations.
Justice Thurgood Marshall: The transportation for get an education and not household, isn’t it?
[Voice overlap] household expense?
Mr. Stephen L. Urbanczyk: Mr. Justice Marshall --
Justice Thurgood Marshall: Deprived from household too?
Mr. Stephen L. Urbanczyk: Transportation expenses, whether they are incurred by one into trying to attend a vocational training program, I think under the Secretary’s regulations are not treated any differently from transportation expenses incurred by other households in the pursuit of equally important endeavors like work or some other.
Justice Thurgood Marshall: Well why do you draw the line between tuition and travel?
Mr. Stephen L. Urbanczyk: Tuition and travel I think is a form of expense incurred by students that does not have a counterpart in the ordinary household budget.
Justice Thurgood Marshall: Of course not.
Mr. Stephen L. Urbanczyk: That’s correct.
But I believe Mr. Justice Marshall that the Secretary --
Justice Thurgood Marshall: I’m not talking about household, I’m talking about schooling.
You can get tuition but you can’t get the transportation and if you don’t get to transportation, you can't use the tuition, am I right?
Mr. Stephen L. Urbanczyk: If you -- I’m sorry.
Justice Thurgood Marshall: If you can’t get the transportation, if you can’t get to the school, you don’t need tuition.
Mr. Stephen L. Urbanczyk: That’s correct.
Justice Thurgood Marshall: So, you’ll get credit for tuition providing you get there, but you can’t get credit for -- on your --
Mr. Stephen L. Urbanczyk: That’s right, and I think the whole point of allowing the tuition though is that it is a form of expense incurred by students.
It doesn’t have a counterpart or is not comparable to other kinds of expenses that households ordinarily incur such as transportation cost or other forms of commuting to --
Justice Thurgood Marshall: But why is education limited by household?
Mr. Stephen L. Urbanczyk: I’m not sure Mr. Justice Marshall that it -- but I understand what you are getting out.
I’m not sure that the focus here is on household expenses.
Justice Thurgood Marshall: It’s on household income, is it not?
Mr. Stephen L. Urbanczyk: It is on household income.
Justice Thurgood Marshall: Well, the normal person is not on the list, pays his tuition to college.
You don’t put that in your household money.
Mr. Stephen L. Urbanczyk: Well, it would be included under the Secretary’s regulation as income --
Justice Thurgood Marshall: Not the secretary but I mean anybody other than the Secretary that would draw line like that?
Mr. Stephen L. Urbanczyk: Well, I think that it does accord with the common sense understanding of the term income.
Those people that receive a scholarship for example are better off than people who incur tuition expenses, but don’t receive any scholarship.
I think a scholarship for example, his income in every meaningful sense of that term.
Justice Thurgood Marshall: But suppose the government said “everybody have the lowest certain income, we will give you all of your tuition, all of your books and everything else, provided you get there on your own.”
Would that be okay?
Mr. Stephen L. Urbanczyk: Well, certainly, that would be alright and the --
Justice Thurgood Marshall: Because that’s what you done?
That’s what you done?
Mr. Stephen L. Urbanczyk: Well, I don’t think so. Unless there’s --
Justice Thurgood Marshall: You get there on your own.
We never give any credit for that.
Mr. Stephen L. Urbanczyk: When you say credit, the point I’m trying to make I think is that the Secretary has a uniform and general approach to deductions from income as opposed to inclusions from income.
I think it’s very important that we keep those two regulatory provisions analytically distinct from one another.
The appellees in this case received -- all received the training allowance.
I think the question then is or initially is regardless of how its spent is that reasonably included within the income of these recipients.
Then, we must confront the fact or the reasonable assumption since the record is not clear that the appellees spent some or all of their -- of this allowance on transportation.
And then the question is whether the Secretary is required by the Act or the constitution to permit an itemized deduction for such transportation costs.
I think the issue in this case really focuses upon the second of those two questions.
As I mentioned in our reply -- as we mentioned in our reply brief, I think there is now little or no dispute.
I maybe wrong that the Secretary’s inclusion of this allowance was reasonable.
As I pointed out, the inclusion of the allowance, separate and apart from how it is spent, accords with the common understanding of income.
It is income in every sense of the word.
Those who receive the allowance are better off by its amount than otherwise similarly situated individuals who do not receive the allowance.
Indeed, the District Court focused on the deduction provision, not the inclusion provision, and it was the state and federal regulation that denied a/or disallowed and itemized deduction that was expressly invalidated by the court.
Justice William H. Rehnquist: Do you have any idea Mr. Urbanczyk why the District Court, after having found on the statutory grounds that the regulation wasn’t authorized, and went to decide the constitutional questions?
Mr. Stephen L. Urbanczyk: Well, I don’t have a exact idea.
I assume that as the parties in this case have stated that the issues upon which the statutory and the constitutional issues turn are very similar in this case.
They are interwoven and the whole concept of reasonableness which is the appropriate inquiry in the statutory issue also bears upon the constitutional issue.
But, I’m not exactly sure why the court proceeded on.
What I note in this -- in the Court’s first opinion, the opinion that was vacated by this Court in the first instance when the federal regulation was amended expressly did not rely upon constitutional grounds, but only on the statutory ground.
Now, this lawsuit as I said, I think focuses upon the allowance of the reasonableness of the Secretary’s disallowance of an itemized deduction.
I think the reasonableness of that regulation rests upon two general propositions.
One, the disallowance of ordinary expenses such as transportation costs is fully consistent with the Act and is an effective and efficient method of administering the food stamp program.
The second proposition, assuming that that general approach to transportation cost is reasonable, is that there is nothing in the Act or the constitution which requires the Secretary to treat appellees' training costs, any differently from the analogous expenditures and other households.
With the first of these propositions, I think we can start with the Act itself.
As I mentioned, Congress provided explicitly that it was income that was to determine the amount that a household is required to pay for food stamps.
The Congress provided explicitly that the amount of the household be required to pay is a reasonable investment, but in no event more than 30% of household income.
Now, that left 70% of household income that the Congress anticipated would be used for the households other non-food expenses.
And thus it seems plainly consistent as a general matter for the Secretary to disallow itemized deductions for non-food expenses.
I know by the way that the food stamp program in this regard is different from other programs such as AFDC for example, which seems to be based on actually available income.
It’s not actually available income that is to key here whereas I pointed out it’s Congress anticipated that much of the income would not be actually available for food or would be not considered as part of the -- but nonetheless would be considered in the Secretary’s determination of income.
I think an income standard in addition to being consistent with the Act is also an effective and efficient to way of administering the food stamp program.
We have described this at length in our brief and I use the terms effective and efficient purposely here because those are the exact terms that Congress used in instructing the Secretary on how to administer the food stamp program.
An income standard, again as we describe in our brief is certainly more effective and efficient than a standard which requires the Secretary to determine each month the amount of food or the amount of household income actually available for food.
That is the standard which requires the Secretary to allow a deduction for all expenses that reduced food purchasing power and it seems to be the approach that is implicit in much of what District Court said in this case.
Transportation costs are a prime candidate for disallowance under these general principles that I have talked about.
Transportation costs are incurred by many households in the pursuit of a wide variety of endeavors.
At the same time such costs are -- could be reasonably expected to vary widely among households and to depend to a large extent on personal consumption choices.
For these reasons, it seems especially appropriate that the -- for the Secretary to simply let these expenses fall where they lie and to disallow an itemized deduction for such transportation costs.
Appellees in their brief did not appear to express serious disagreement with the forgoing.
They do not suggest that non-food expenses generally or even commutation costs should be deducted from household income.
Instead, the principle burden of appellees brief appears to be that their transportation cost should be treated differently.
But as I stated earlier, I think the second proposition under which the reasonableness of the Secretary’s regulation rests is that there was nothing in the Act and certainly nothing in the constitution which requires the Secretary to treat these transportation costs indifferently.
Certainly, a concept of food purchasing power which so occupied the District Court in this case does not sustain that distinction.
Appellee Karen Hein, we know from the record traveled from Muscatine to Davenport, Iowa to attend a training program.
But certainly, there was nothing in the concept of food purchasing power which required that she -- those expenses be treated any differently than similarly situated individual who travels from Muscatine to Davenport because the only job available to them is there, or a person who travels from Muscatine to Davenport to attend a training program without the aid of an allowance.
The District Court, however, found that the -- a subsidiary purpose of the Act was to encourage education and as an alternative ground of holding -- it held that the regulation was invalid to that subsidiary purpose.
But in this respect, the court read the Act for far more than it was worth in this regard.
The regulation -- the provision that the Secretary relies upon or that the court relied upon does nothing more than require as a criterion for eligibility that able bodied individuals be either employed, be ready and willing to find employment, to be a mother or caretaker of children or be a student.
Able bodied individuals in any of those categories are equally eligible under the food stamp program and the Act appears to be neutral with respect to those expenses.
There thus appears to be nothing in that provision which supports a favoring of transportation, training transportation expenses over say the training transportation -- the transportation expenses of a worker.
Chief Justice Warren E. Burger: Suppose the employer of an individual allowed $50.00 a month to any employee in the one city who attended extension courses of the university 25 miles away, and that was the standard allowance to employees.
Would that be treated by the Internal Revenue Service as income for tax purposes?
Mr. Stephen L. Urbanczyk: They have to give a legal opinion on that -- regarding that matters since it's a while that I took tax, but I believe I would be, yes.
Chief Justice Warren E. Burger: Well, is it not a reasonable analogy?
Mr. Stephen L. Urbanczyk: Well, I think it is.
I think that the Secretary’s definition of income does resemble the tax code's definition of income.
Although, there are some exemptions as I pointed out for extraordinary and non-recurring items --
Chief Justice Warren E. Burger: This could be quite different from an automobile allowance of 10 cents a mile or flat amount for the purposes for carrying on the daily occupation of the employee.
Mr. Stephen L. Urbanczyk: I believe that is correct.
Yes, that would be a specialized kind of expense.
Although I should point out that part time trainees under the Iowa program do receive an allowance designated as a travel allowance.
It’s our position that, again, you must analyze the inclusion of that allowance and the allowance for and the question of whether there should be deduction from that allowance as analytically separate questions.
These regulations as we have shown I think or as we have tried to show are consistent under the Act -- with the Act are reasonable, and therefore, should be sustained under the Food Stamp Act as well as the Due Process Clause.
We, therefore, respectfully submit that the judgment of the District Court should be reversed.
Mr. Chief Justice, I would like to reserve the remainder of my time, if I may.
Chief Justice Warren E. Burger: Very well.
Argument of Lorna Lawhead Williams
Ms Lorna Lawhead Williams: Mr. Chief Justice and may it please the Court.
I’m Lorna Williams.
I’m one of the Assistant Attorney General for the State of Iowa and there is a little irony in this particular lawsuit for the reason that the very people that Iowa would like to help under this modification of the regulation prevents them from doing so because they are trying to protect the rights of the trainees in Iowa’s individual program.
It means that first, they are not unlimited sources to go upon, but Iowa is proud that it is high in giving ADC benefits, 8th or 11th depending on how you figure it from the top on ADC.
Iowa has this individual training program which most states don’t have.
It’s had the program since 1969.
It can continue to provide this kind of thing for the people in Iowa or anyone who comes there and can qualify and it is not limited to a bread and butter course.
It even offers a Bachelor of Arts degree if someone is in need and eligible to do that kind of work.
The particular regulation here in the retroactive aspect is particularly harsh on Iowa.
For here, Iowa all these years has been passing on to the beneficiaries, the trainees, the amount of money you’d thought it would take in administrative time and cost.
They’ve already passed the saving on and instead of making a day-by-day calculation of how much did each food stamp and individual trainee for that course spend for commuting, it just gave them across the board allowance.
That’s not unlike the way the WIN program treats the people there also.
The WIN people get a $30.00 a month allowance unaccountable no restrictions on it, plus $1.00 for lunch a day, $1.00 for travel a day whether it's used or not, so that it's about the same in both programs, there’s approximately $60.00 or $69.00 in Iowa in our training program too, $60.00 that's available to this people, they can save it if they want to.
They can move to the location of their school if they want to, none of their rights or benefits will be taken away from them.
They can -- perhaps they can use it even on household items if they need to.
Maybe they move to the college campus and the rent's going to be $10.00 a month more just because they move to Davenport.
There is no nothing that in that Title 19, or excuse me Title 20 program which is where Iowa gets part -- its funds for its individual training program that says it cannot be used on that because it’s beyond the expectation of ordinary household item.
Music schools are included in that thing even.
The WIN program, there is one checking that is required of our people who administer that program also.
They must check at the school to see if someone was intent -- in attendance, but they do not make the people say “Oh, I skipped lunch today and used the dollar for something else or I hitch to ride to school and saved the dollar.”
They have the right to that if they want to.
They don’t have to account for the money and it could very well discourage people from coming into the food stamp program if they had to account for of how much money they are going to get, how they spend it.
Same way, it could hurt our trainees if they had to.
'We don’t require of them and yet now, except this law, this regulation as set out by the court, the modification to the regulation would so require so the people may then become discouraged and not want to come into either program.
The trainees that add to our area 11 school right there in Encony came to our state house and complained because they felt as though they have been singled out by having to have them be checked at the schools to their school attendance, days in attendance.
Iowa doesn’t really -- Iowa wants to help the people and not hinder them and it’s not uncommon now for people in one program to be recipients and beneficiaries in another welfare program and one should not curtail the activities of the other.
The federal court under the Eleventh Amendment really shouldn’t be spending Iowa’s money that way.
When Iowa has determined, it would rather give it to the beneficiaries and have given to them.
And now to be called back and spend, we figured 3,400 who have gone through our program since complaint has been filed to review month by month, every single food stamp calculation, recalculate it, month by month.
It would take one person Your Honors at eight hours a day if you average it, once you’ve identify him, it take eight -- between 10 and 13 years, one stamp person.
If we have to go back now, to carry out the court order, if it took an average of eight to identify the people, locate them, have them go from their records or recollections because food stamp the law says you have to verify everything.
So, it’s the -- they placed upon the State of Iowa an almost impossible burden to say nothing of the amount of money that would have to be spent on step time to do it at the expense of the very people in the class for bringing the action against the State of Iowa.
I notice, you asked the question a while ago as to why the court went ahead and gave its opinion on the constitutional questions and it’s kind of interesting.
The federal government, once we got them into the court, took over in the trial at the Lower Court, but the briefs of the appellee in both the first trial before it was remanded and in this trial had contained the constitutional questions and it could well be that the -- it could well be that court wasn’t quite so sure that about why it should have put it on the statutory basis.
It to me, it really think -- I really think that Congress in no way intended to encourage the people in the food stamp program to go into education nor to intend to discourage.
We just said you just don’t have to come to work, you don’t have to -- you can get your food stamps without going to work or without applying or trying to get a job if you are bona fide student and I think that’s all what they did.
I think there was indifference to the Iowa’s program which most states don’t have.
Iowa’s program and some of the other federal programs; there were 14 in Iowa within the last few years, I listed them, I couldn’t believe it had been 14 training programs in Iowa.
But anyhow, I think it was indifference to those training programs, all of which give unrestricted allowance, just as an incentive for people to take the program, that the Secretary while included them, then gave across the broad disallowance.
He said, we don’t -- we just take off 10%, some of you don’t spend one penny of it, some of you may spend all of it, but we'll take 10, just 10% for everyone and the people somehow including Ms. Hein was able to manage to buy her total food stamps.
So, maybe she had to buy all $12.00 a month for her schooling.
Think of our children who have student loans, who payback the whole thing, tuition and all.
I mean --
Justice John Paul Stevens: Mr. Williams, I thought your opponent said that she was not able to buy all her food stamps after the case?
Ms Lorna Lawhead Williams: In his third brief, he attaches her own affidavit where’s that -- all through, she’s talking about she had to buy the food stamps by paying $12.00 more.
She paid $56.00, $58.00 more.
Justice John Paul Stevens: Didn’t she say that she couldn’t afford the $12.00 and therefore, she got the lesser quota of food stamps?
Ms Lorna Lawhead Williams: No, Your Honor.
This is what I point out in my reply brief.
In her affidavit, she said that she was buying the stamps, but it cost her more money.
In their arguments to the court and in their brief here, they talk about it just cost her more money.
But where, except in one place in the briefs cited the Attorney stipulation which said if she was called to testify and he attached it to the Attorney for --Ms. Hein attached it to his brief and it appears at page 26, it appears -- the affidavit of Ms. Hein appears at -- in the appellant’s brief, appellee’s brief at page affidavit at page 1b and there she says --
Chief Justice Warren E. Burger: What is that again?
Ms Lorna Lawhead Williams: At page 1b Your Honor.
It says that she has been getting $44.00 for necessary commuting.
She says that she -- and she’s been paying food stamps $58.00.
So, she was able to go ahead and pay her food stamps.
Now in the stipulation, she -- signed by her Attorney, it says that if she had been called to testify that she would testify that she had to buy her a lot of food stamps coupons, but she really did.
She was able somehow to make do with what she had in order to get the amount of food stamps to which she was entitled.
She got a full allotment and I see, I’m running into time of my co-counsel.
And if there --
Chief Justice Warren E. Burger: It happened until the red light goes on.
Ms Lorna Lawhead Williams: But Your Honor, I want to save my little time for rebuttal for both of us.
Unless there other questions.
Chief Justice Warren E. Burger: Mr. Bartels?
Argument of Robert Bartels
Mr. Robert Bartels: Mr. Chief Justice and may it please the Court.
As the appellants have indicated, the District Court did decide this case on both statutory and constitutional grounds.
But I think as perhaps both of us have agreed that this Court need not reach the constitutional issues, and I would therefore like to focus my own remarks on the statutory issues in the case.
I think it is fair to say that the statutory and constitutional issues are interwoven, although I think they stand independently of one another.
Justice Byron R. White: Of course, if the District Court hadn’t reached the constitutional ground, the case wouldn’t be here at all, isn’t it?
Mr. Robert Bartels: Well Your Honor, I think --
Justice Byron R. White: Well, it will be in the Court of Appeals?
Mr. Robert Bartels: Your Honor, I think that would have been an interesting issue.
This Court has in the past I believe taken appeals from the three-judge courts in which the grounds where purely statutory and I believe there’s been some dictum.
I believe in Hagens versus Levine, Your Honor, that that would be permissible if it where decided by three-judges, but I think that under 1253, there would have been question whether this was a case that had to be decided by three-judges, and it would have been --
Chief Justice Warren E. Burger: [Voice Overlap] send those cases back to the protective appeal to you or require them to go to the Court of Appeals?
Mr. Robert Bartels: Your Honor, I’m not aware of the court’s normal practice.
I believe though that in Doe v. Connecticut, the court did take a case such as this.
But in any event, I think the fact that the constitutional issues were addressed, removes that particular problem in this case which I think probably the reason the District Court did that was more or less as a matter of judicial economy that it would present to this Court all of the issues for disposition of the case so that if the Court disagree with it on these statutory issues, there would be no need for a second remand in the case.
I think Mr. Urbanczyk has described adequately the operation of the food stamp program and the importance in the program of the concept that income -- appellee Hein’s case in effect illustrates the importance of income because her training allowance was included in income, her food stamp benefits correspondingly were decreased.
Now, the District Court’s order in this case enjoined the appellants from including in income for food stamp purposes, any allowances received for necessary commuting in connection with individual education and training plans.
Now, this decision was proper on two separate statutory grounds.
First, although the Secretary clearly does --
Justice John Paul Stevens: Mr. Bartels, before you get into the explanation of it, I’d like to get one thing sorted out in my own mind.
Your client received $220.00 in the AFDC, $28.75 rent allowance and $44.00 training allowance, so $272.75 --
Mr. Robert Bartels: That’s correct Your Honor.
Justice John Paul Stevens: Supposing she had a next door neighbor who worked as a -- did household work of some kind and earned $272.75, and also took training at the university to become a nurse just did everything else exactly the same except her income was from private sources rather than public sources.
Under the District Court’s order, do you understand that there would be a differential between those two people and what food stamps they might receive?
Mr. Robert Bartels: That’s correct, Your Honor.
And I think the reason for that, although they would appear to be some inequality there, the real inequality is in the Title 20 program that the one neighbor was not getting the assistance.
Now, the difference here is that the neighbors, I understand that has $44.00 earned income as opposed to --
Justice John Paul Stevens: She just has a net of $272.75.
Mr. Robert Bartels: Right.
All of her income is earned income.
Now, what that means is that she legitimately has the choice of how to spend that money.
She may choose to spend it on educational commuting, but she --
Justice John Paul Stevens: But she decided to go to school just like your client is?
Mr. Robert Bartels: Your Honor --
Justice John Paul Stevens: What different choices does she have having made that decision?
Mr. Robert Bartels: Well You Honor, if I may persist with that, the crucial factor here is the choice that she has not to take the education.
If she were to choose let’s say to spend that $44.00 on normal household expenses, she would still get the same amount of income.
Her total income and food stamp allowance would not be affected.
However, if a person in Ms. Hein’s situation decides to divert the $44.00 away from educational expenses, she is going to lose it, and that the Secretary here has correctly pointed out physically --
Justice John Paul Stevens: Supposing she has able to hitch hike to work?
Mr. Robert Bartels: Well Your Honor, I suppose that then we’re talking about was the $44.00 allowance was really necessary and then, it wouldn’t covered by the District Court’s order.
Then we’ve got the administrators of the individual education training plans who happen to be the same as the administrators of the food stamp program in Iowa.
In the rather peculiar position of sort of giving away this $44.00 to someone who doesn’t need it and Your Honor that would mean that they’re expecting that that money would be divertable to normal living costs that are covered by AFDC, and that would be indirect contravention of 42 U.S.C. 1397 C2H which says that the benefits under Title 20 may not be used for the same sorts of things that are covered by AFDC.
Justice Potter Stewart: But isn’t true or have I misapprehended the situation Mr. Bartels that this is a lump some monthly payment for which no accounting of any kind need be made?
Mr. Robert Bartels: That’s not clear at all from the record, and I frankly have not been able to determine whether Ms. Hein was on a full time or part time plan, but I think, it’s really not particularly important either way here Your Honor.
On the record of this case --
Justice Potter Stewart: Well the Secretary had said for example that if your client had moved to the campus where her only transportation was walking, she would still get the allowance, you disagree with that?
Mr. Robert Bartels: Well You Honor, I’m not sure in Ms. Hein’s case.
Clearly, that would --
Justice Potter Stewart: Not the general program [Voice Overlap]
Mr. Robert Bartels: Alright, with regard to the general program Your Honor, we have to talk about two groups; part time trainees and full time trainees.
Part time trainees receive a mileage allowance so that if such a recipient move from Muscatine to Davenport, the travel allowance would go down, and that person would only receive of that amount money that really was for necessary commuting.
Now, the full time --
Justice Potter Stewart: Part time (Inaudible) for a part time --
Mr. Robert Bartels: It’s called a participant trainee in a part time individual education training program.
Justice Potter Stewart: But, if they where full time?
Mr. Robert Bartels: Okay, now a somewhat more complex problem.
It seems to me that there is absolutely no problem with the District Court’s rationale or order with regard to these part time students.
Now, with regard to the full time students, it is more complex.
What would happen here is that -- I think the order is not perfectly clear what would happen with a full time student who let’s say moved to Davenport.
If we assume that not all of the $44.00 or $60.00 a month was needed for educational travel and it seems to me there are two possibilities under the order.
One is that the order doesn’t apply at all because the allowance is not for necessary travel expenses.
Justice Potter Stewart: Whose order, this District Court order?
Mr. Robert Bartels: That’s right Your Honor.
Now, I think that it could be interpret --
Justice Potter Stewart: But other program, she still get the money, would she not?
Mr. Robert Bartels: Well, that’s right Your Honor.
But the --
Justice Potter Stewart: If she were full time trainee?
Mr. Robert Bartels: That’s right Your Honor.
But the District Court’s order is if it were interpreted in that way would allow the reduction of food stamp [Voice Overlap]
Justice Potter Stewart: District Court didn’t make any such distinction, did it?
Mr. Robert Bartels: No Your Honor.
It [Voice Overlap] it was not all, it was never presented as a distinction in the District Court, and that’s I think perhaps why it doesn’t cover very clearly.
Now, I think that under the District Court’s rationale and under a fair interpretation what ought to happen here is that there should be a determination of what portion of the $60.00 a month really was for necessary educational commuting expenses.
And, that portion would not be included on income.
Now, that does require that system were adopted, that one require --
Justice Potter Stewart: That’ll be some state of nightmare, wouldn’t it?
Mr. Robert Bartels: No Your Honor, I don’t believe it would be that at all.
First of all, one could adopt exactly the same system that the appellant’s have already adopted with regard to part time students, namely use mileage as the measure.
Secondly Your Honor, this is no more difficult a task in accounting for child care expenses which are deducted out in fact under the administrative regulations.
And finally Your Honor --
Justice John Paul Stevens: [Voice Overlap] care on so much for child or is it actual money spent?
Mr. Robert Bartels: Your Honor, I believe it’s the actual charge by the vendor of the so to speak of the child care.
The other thing that frankly, I neglected to point out in the briefing that may have some impact on this administrative convenience argument is that all participants in individual education and training programs in Iowa are AFDC recipients.
Now, with regard to such recipients, federal regulations require that income from loans and grants not be included in AFDC income for purposes for determining eligibility and levels of benefits to the extent that those grants are not usable for current living costs and that is essentially the identical determination of necessity.
So, we are not talking about any additional burden here.
I might add Your Honor that in terms of the State of Iowa’s purported interest here in this administrative convenience, the statute under which this program is authorized in Iowa itself requires that in determining the need for public assistance that the expenses and so on related to the individual education training programs be taken into account.
So again, Iowa itself has indicated that these kind of consideration ought to be taken into account, that’s Iowa Code Section 249 C.11.
Justice Lewis F. Powell: Mr. Bartels, we come back a minute to the $44.00 allowance.
Was that tailor made for this particular appellee on the basis of her distance from the school?
Mr. Robert Bartels: Your Honor, I don’t believe that probably was.
I really can’t tell it.
It was not tailor made in the sense that there was clearly a maximum amount.
It could not have been tailor made above $44.00.
Justice Lewis F. Powell: But if she had had a friend who lived half the distance who applied for the same program and the other facts where the same, would the $44.00 had been allotted to friends also?
Mr. Robert Bartels: If the friend were in a full time training program, yes Your Honor, the friend would also have received $44.00.
Now, again really the record does not reflect, it was never raised as a question and the materials that I have outside the record are sort of conflicting on whether Ms. Hein was regarded as a full time or a part time student.
Again, insofar as some portion of the $44.00 might not be necessary for the transportation of the friend, and I think under the District Court’s order as fairly interpreted, only that portion that was necessary for commuting would be required to be excludable from this amount of income.
I might add Your Honor that this is essentially the same kind of problem that this Court faced although I don't recall any articulation of the administrative convenience problem in Shea versus Vialpando.
Again, there had to be an individualized determination.
Justice Thurgood Marshall: What’s their actual travel expense?
Mr. Robert Bartels: Pardon?
Justice Thurgood Marshall: What was their actual travel expense, is that in the writing?
Mr. Robert Bartels: No Your Honor, the only indication of it is that the allowance was for necessary commuting and that she did the commuting and from that, the District Court I think properly found that all the money had been spent.
Justice Thurgood Marshall: If she got $40.00 a month and her actual travel expenses were $20.00, would the Secretary be right in not deducting $20.00?
Mr. Robert Bartels: Your Honor, I think that under the District Court's order rationale that it would be proper to not include only $20.00 worth of that.
Now, that doesn’t --
Justice Thurgood Marshall: What’s the difference be in that case -- in this case we don’t know how much she spent?
We don’t even know if she spent anything?
Mr. Robert Bartels: No Your Honor, I think the District Court found that it was all spent and that was a proper inference from the material.
Justice Thurgood Marshall: Where did you get that information from?
Where in the record is that?
Mr. Robert Bartels: Your Honor, it’s in the stipulation paragraph, I guess the easiest way is at paragraph 6 of the stipulation which is on page 24 of the joint appendix.
Justice Thurgood Marshall: 24?
Mr. Robert Bartels: Indicates that the transportation allowance was for necessary commuting expenses in connection with the individual education and training plan, and then paragraph 12 of the same stipulation on the same page --
Justice Thurgood Marshall: Say one stipulation, it doesn’t do that before.
Justice William H. Rehnquist: Mr. Bartels, you said that the problems here are no different than Shea against Vialpando, but we didn’t have the difficulties with the District Court order in Shea v. Vialpando that have we have here, do we?
Mr. Robert Bartels: Well Your Honor, I think that what’s happened here is that the District Court was being very careful to make a narrow -- a very narrow order that didn’t bind in the USTA or the Secretary of Agriculture.
It would certainly be permissible here for the Secretary to respond to this holding by accounting for these expenses.
In order words, doing exactly what was required in Shea versus Vialpando, but the District Court’s order does not require the Secretary to go quite that far and would permit some administratively more convenient system than that.
In other words, assuming that the -- for example that the allowance was necessary on the basis of the administrative judgment made by individual education training plan administrators.
And of course, there is a difference in this case because we’re talking here about allowances and the court’s orders clearly restricted to that, the extent of the allowance.
Justice William H. Rehnquist: But what risk of contempt that the governmental parties face under the kind of order the District Court entered here if they misjudge on some of the things the District Court talked about?
Mr. Robert Bartels: Your Honor, if it’s a matter of misjudgment, I don’t think that they really have any legitimate fear for contempt and they are certainly still the opportunity for them to ask for clarification of the order and one that requires, or this Court could clarify the order and then order be amended.
Chief Justice Warren E. Burger: What if we return to Justice Marshall’s question to you.
The stipulation on page 24 states that she was allowed this amount of money and that she continued going to the classes, it doesn’t give any hint of whether she actually spent it.
If as Justice Marshall suggested, she got a ride everyday from her classmates or a teacher, she’d still get the money without having spending it.
She’d still get the allowance, wouldn’t she?
Mr. Robert Bartels: Your Honor, she would still get the allowance.
There is no evidence on that basis and I think everybody --
Chief Justice Warren E. Burger: No.
But the stipulation doesn’t quite say --
Mr. Robert Bartels: Your Honor, there is -- I think, there maybe a small loop hole there in the allowance.
On the other hand, unless one is an awfully good hitch hiker or has a friend, there are going to be those kinds of expenses associated with commuting that distance, particularly if she has in fact the full time.
Justice Thurgood Marshall: How many days in a week that she goes to school?
Mr. Robert Bartels: Your Honor again, --
Justice Thurgood Marshall: That’s not here.
Mr. Robert Bartels: Records not clear on that, no.
Justice Thurgood Marshall: I’m trying to find out what is in the record that we can use?
Mr. Robert Bartels: Your Honor, I think that the main problem at this point that the Court ought to address is people in the future and it is clear that however Karen Hein was treated and however her expenses, actual expenses broke down that we do have left in this case two basic groups of people, part time IETP students and full time IETP students.
And with regard of the full time ones Your Honor, there is no question but what they would get the allowance, the full $60.00 a month.
Justice William H. Rehnquist: Was this a class action?
Mr. Robert Bartels: Yes Your Honor.
Justice William H. Rehnquist: Well was Mrs. Hein a full time or a part time student?
Mr. Robert Bartels: Your Honor, we don’t know.
Justice William H. Rehnquist: Well, how do we know whether she can represent both full time or part times students if we don’t even know which one she was?
Mr. Robert Bartels: Your Honor, I would think that she can certainly represent the group of people who received these individual education and training allowances.
Justice William H. Rehnquist: But you said a moment ago that you thought part time should be treated differently from full time.
Mr. Robert Bartels: Well Your Honor, it’s really just a matter of sort of the administration and not the theory of the fact.
Justice William H. Rehnquist: But ordinarily, a District Court doesn’t set to decide matters on pure theory.
They’re supposed to decide cases and controversies between concrete litigant.
Mr. Robert Bartels: You Honor, I think that if one assumed that Karen Hein were a full time student here, which seems to be that the assumption that the Secretary wants to make and which I am perfectly willing to accept, then --
Justice Thurgood Marshall: But can we accept here?
Mr. Robert Bartels: Your Honor --
Justice Thurgood Marshall: You can’t come here with a record that you pull out of the thin air.
We are bound by the record in this case because I understand the record, this case doesn’t show whether she was part time or full time.
It doesn’t show when she went to school, how many days she went to school, how far she went?
Mr. Robert Bartels: Your Honor, the stipulation was that it was an allowance for necessary commuting expenses, and the District Court regarded that as sufficient together with the other facts.
I might add that there was an affidavit that was totally unopposed from Ms. Hein saying that this was reimbursement for necessary commuting expenses and I think certainly, the understanding of the word reimbursement would be that the money was actually expended, and I think the District Court’s findings of that are supported perhaps that the loophole that exist and the stipulation has to be taken care off by the additional record that’s supplied by the affidavit which is on -- begins on page 1b of the appellee's briefs.
Chief Justice Warren E. Burger: This case has already been here once and was sent back to the same three judges who have dealt with it.
Mr. Robert Bartels: Your Honor, I think and in fact, that’s the good point because when it went back down Your Honor, the District Court had made its findings of fact which included the fact that this was for necessary commuting expenses and that in fact, the money was spent.
There was no effort at all by the appellants to dispute that.
There was never any dispute about those findings of fact in the District Court despite ample opportunity to do so, I think that’s --
Chief Justice Warren E. Burger: Who initiated the litigation?
Mr. Robert Bartels: Well Your Honor, the plaintiff did.
Nevertheless Your Honor, I think one with District Court makes a finding that’s supportable by the affidavits and materials in the record that if you disagree with that the time to do it is at the District Court.
Justice Potter Stewart: Mr. Bartels, what precisely is the statutory issue?
The statute doesn’t use the word income, does it?
Mr. Robert Bartels: Yes Your Honor, it does.
Justice Potter Stewart: It says well, except it says -- it authorizes the Secretary to prescribe the amounts of household income and other financial resources, including those liquid and none liquid assets to be used as criteria of eligibility.
It’s no more than an authorizing statute, is that right?
Mr. Robert Bartels: Well Your Honor --
Justice Potter Stewart: Statute doesn’t define the word income is what I mean?
Mr. Robert Bartels: No, it doesn’t, Your Honor.
Although, there are I think clear indications in the entire structure of the Act and its purpose that this must -- because that’s what determines benefits.
Justice Potter Stewart: You are talking about it as preamble or the celibacy 2011?
Mr. Robert Bartels: 2011 is choose the purpose and I think also quite important in terms of showing the connection that Congress saw between income and food purchasing power, Section 2014 (a) says that the program is to be limited to those households whose income and other resources are found to be limiting factor on the ability to purchase --
Justice Potter Stewart: It authorizes the Secretary then in rather broad authorizing language to prescribe the amounts of household income and other financial resources?
Mr. Robert Bartels: That’s correct, Your Honor, and I think --
Justice Potter Stewart: And the precise statutory question then is what --
Mr. Robert Bartels: Whether the Secretary has exceeded his authority or has exercised in terms of I believe, it would be 2013 (c) Your Honor, whether the Secretary has exercised his authority in a manner inconsistent with the Food Stamp Act.
Justice Potter Stewart: The Act reports to give him very broad authority to -- I won’t read it again, prescribe the amount of income, does it not?
Mr. Robert Bartels: There’s no question that the Secretary has very broad authority in that they’re sort of basic purchase price levels that he sets for particular levels of income and so on is almost total extent within the Secretary’s authority.
Justice Potter Stewart: In other words, there cannot be any claim here that the administrative definition of income is contrary to some statutory definition of income because the later doesn’t exist in this statute, is that right?
Mr. Robert Bartels: Your Honor, it’s not directly contrary to any clear definition of income.
It is contrary though I think to the clear intent of the Act that income because it -- the terms level of benefits mustn’t be related to the household’s food purchasing power.
Justice Potter Stewart: And where do you find this conflict?
What language of the statute do you find to be in conflict with the Secretary’s regulation?
Mr. Robert Bartels: Well Your Honor, the language of the statute that indicates that this and the purpose of this Act is to increase food purchasing power in that income is to be related to food purchasing power.
Again, I think 2014 (a) is the clear --
Justice Potter Stewart: Nothing here about food purchasing power, is there?
Mr. Robert Bartels: [Voice Overlap] Your Honor, I believe that the --
Justice Potter Stewart: In concurrence of this lawsuit, but there is nothing and either the statute or the regulation?
Mr. Robert Bartels: No Your Honor, I believe [Voice Overlap] I believe purchasing power is used in 2011, but you’re right that for the most part, it has become a means of speaking about of the ability of a household to purchase food, to make food purchases.
Justice Potter Stewart: For just the 2011, a food stamp program is herein authorized which will permit low income households to purchase a nutritionally adequate diet through normal channels of trade.
Is that, isn’t it?
And your claim is that the Secretary who is --
Mr. Robert Bartels: Your Honor, that the next sentence --
Justice Potter Stewart: -- in the 2014 expressly authorized to prescribe these standards and somehow violated the statute.
That is your claim, that’s the issue?
Mr. Robert Bartels: That is one of the issues, Your Honor.
The other problem in this case is that both of food stamp --
Justice Potter Stewart: Well, the second one is the constitutional issue which the court has already talked about?
Mr. Robert Bartels: No Your Honor, I think the second statutory issue has to do with 2014 (c) in Title 20.
2014 (c) indicates that the Secretary isn't for the operation of the Food Stamp Act and should not act as a disincentive to education.
Now, I think that District Court overstated it by saying that there was to be an encouragement.
Justice Potter Stewart: Yes.
Mr. Robert Bartels: But I think to not provide disincentives is clearly there and that’s very strongly supported by Title 20 which funded the individual education and training program and the allowances involved.
The purpose --
Justice Potter Stewart: That Title 20 is not part of the Food Stamp Act right?
Mr. Robert Bartels: No Your Honor, it’s not.
Justice Potter Stewart: But the claim here, however, is that the Secretary’s regulation violates the statute under or is in conflict with the statute under whose authority he made the regulation?
Mr. Robert Bartels: That’s right Your Honor, and I think we have to look at 2014 (c) --
Justice Potter Stewart: It’s not the claim that violates some other statute that did authorize the --
Mr. Robert Bartels: Your Honor, the District Court found that it violated Food Stamp Act because of the disincentive to education.
But I think, it also is fair to say that the Secretary of Agriculture cannot because he is only the Secretary of Agriculture, violate Title 20 of the Social Security Act or defeat the purposes of Congress that are expressed in that particular Title, particularly when the Food Stamp Act itself indicates a congressional intent that the Food Stamp Act should not operate to be a disincentive to this kind of education.
Justice Potter Stewart: You say that’s in the 2014 (c)?
Mr. Robert Bartels: Your Honor, that’s a reference and the students are exempted from the work registration requirement.
The practical effect of that is that you maybe a student in one of these programs and still receive food stamps.
Otherwise, you would not be able to do that unless you happened to be particularly unemployable.
In other words, there was no chance that you would actually find the job through work registration.
Justice John Paul Stevens: Mr. Bartels, is there anything in the statute that would prevent Iowa from terminating the $44.00 allowance?
Mr. Robert Bartels: Your Honor, in Title 20, I don’t believe so and certainly Iowa is perfectly free not to participate in at all.
Justice John Paul Stevens: So and that of course, that wouldn’t raise any question under the Food Stamp Act?
Mr. Robert Bartels: No Your Honor, that would raise a question if there is this training program and there is not sufficient allowances to allow say an AFDC recipient to participate, that might raise a problem under Title 20, but not on the --
Justice Potter Stewart: It’s the Food Stamp Act.
Mr. Robert Bartels: No Your Honor, because in there’s no impact on food purchasing power and there’s no disincentive to education from the Food Stamp Act that then becomes disincentive from Title 20 and certainly the State of Iowa --
Justice John Paul Stevens: What’s you are saying if I understand you, is the more travel allowance she gets, the greater the disincentive because it reduces the food stamp, you know, a percentage of that is taken away from --
Mr. Robert Bartels: No Your Honor.
To the extent that that the allowance exceeds the needs, that maybe taken into account in food stamp calculations and reduce the benefits so that there would be no greater disincentive at the amounts that are above what’s necessary for the educational travel.
It’s only up to the point to which it’s necessary.
Justice Byron R. White: As I understand, there was a stipulation in this case says that $40.00 was necessary for travel in this case?
Mr. Robert Bartels: It’s the stipulation that was for necessary commuting in connection with the individual education and training plan.
Justice Byron R. White: And the District Court accepted that?
That is a fact in the case that the $40.00 was necessary for commuting --?
Mr. Robert Bartels: Your Honor, that’s the way the District Court has read the stipulations and affidavits in this case.
Chief Justice Warren E. Burger: Quite back way though, it wasn’t to find there a stipulation that it was necessary.
The stipulation is that it was granted --
Mr. Robert Bartels: For necessary.
Chief Justice Warren E. Burger: No determination of necessity, except by the administrative decision to grant it which would presuppose that someone had made the decision.
Mr. Robert Bartels: Well Your Honor, I think if we are talking about a full time student, one couldn’t even say that it was for necessary commuting.
I think that the way in which the District Court interpreted that in combination with the rest of the stipulation and the affidavits that were submitted in this case was that the grant was for necessary commuting and that in fact it was all spent to defray those expenses.
Chief Justice Warren E. Burger: In order to sustain your position and the District Court’s position, we have to conclude that the $44.00 that it was either violation of the statute or violation of the constitution for the Secretary to include the $44.00 as one of the financial resources of this recipient, isn’t that right?
Mr. Robert Bartels: That’s correct Your Honor.
At least insofar as the allowance was for necessary commuting.
What the Secretary’s policy in effect as Your Honor is it presumes for every recipient that all of the training related expense allowance is unnecessary for travel and it’s freely available for food and living cost.
That’s just an irrational policy that doesn’t give the recipient any opportunity to challenge or rebut that particular presumption.
Chief Justice Warren E. Burger: Very well.
Mr. Urbanczyk, you have anything in further?
You have just two minutes left.
Rebuttal of Stephen L. Urbanczyk
Mr. Stephen L. Urbanczyk: Thank you Mr. Chief Justice, just a few points.
There is some unclarity in the record in this case.
I think that’s a hazard -- perhaps a hazard of stipulating and having such a short stipulation.
I think this case has been litigated throughout, however, on the assumption that the appellee classes are recipients of both a full time allowance and a part time allowance, recipients of both kinds of allowances, and the Secretary’s position with respect to his regulation is that the regulation is reasonable with respect to both kinds of allowances.
Justice Potter Stewart: And the class as I understand it includes recipients of both kinds?
Mr. Stephen L. Urbanczyk: That has been the understanding as I read it.
With regard to the stipulation about necessary expenses Mr. Justice Stewart, we have dealt with that in our reply brief, footnote on page 2.
I do believe there is some unclarity in the stipulation --
Justice Byron R. White: Oh, I just wanted to get the -- your colleague's view of the stipulation because in his brief, he said the stipulation was that the -- it was stipulated in District Court that the monthly allowance received was for commuting that was necessary.
Mr. Stephen L. Urbanczyk: I believe the District Court read that stipulation as --
Justice Byron R. White: So, you think the District Court construed the stipulation as establishing the fact that the expense was necessary for commuting?
Mr. Stephen L. Urbanczyk: Well, the District Court as a matter of fact, it was necessary.
The District Court found that appellee Hein received this $44.00 and all $44.00 of it was necessary for commuting.
Justice Byron R. White: It was necessary?
Mr. Stephen L. Urbanczyk: I believe that it was on the basis of that stipulation.
There was no other facts that I’m aware off.
Justice Byron R. White: Well wasn’t the Court find it, don’t you?
Mr. Stephen L. Urbanczyk: Well, yes we do accept that.
However I wanted to point it out that the appellee class may not be --
Justice Potter Stewart: Not all.
Mr. Stephen L. Urbanczyk: All the individuals --
Justice Byron R. White: I understand that, but the District Court did find that in this case the $40.00 was necessary?
Mr. Stephen L. Urbanczyk: I believe that is what they found on the basis of rather ambiguous stipulation.
Justice Byron R. White: And you accept that for the purpose of your argument?
Mr. Stephen L. Urbanczyk: Yes of course, yes we do.
I see that my time is up.
I would like to point out simply that we have addressed the Title 20 argument in our reply brief and we respectfully submit that the judgment of the Court be reversed.
Chief Justice Warren E. Burger: Thank you counsel.
The case is submitted.