BOWEN v. GILLIARD
Legal provision: Aid to Families with Dependent Children (AFDC--provisions of the Social Security Act)
Argument of Albert G. Lauber, Jr.
Chief Justice Rehnquist: We will hear arguments next in two consolidated cases, No. 86-509, Bowen against Gilliard, and No. 86-564, Flaherty against Gilliard.
Mr. Flauber, you may proceed whenever you're ready.
Mr. Lauber: Mr. Chief Justice, and may it please the Court:
The question here involves the validity of an amendment to the AFDC program that Congress enacted in 1984, a provision I shall refer to as the standard filing unit provision.
This amendment was one of many budget cutting steps that Congress took in that year, and it was designed to close what Congress viewed as a loophole in the AFDC eligibility scheme.
Under prior law, a family applying for AFDC could try to maximize its AFDC grant by excluding from the filing unit certain family members, typically children who had other sources of income, such as Social Security benefits, child support, or accountable earnings from employment.
This enabled the family to get the maximum AFDC grant for the members in the unit, plus keep all of the other income of the members who were left out of the unit.
In 1984 Congress decided to eliminate this benefit maximizing option by enacting the provision challenged here.
It requires that when a family applies for AFDC, all members of the family who live together must be included in the filing unit, and that the income of all those family members must be added up to figure out how needy the family is for public assistance.
Congress based this amendment on the belief that family members who live near the poverty level and who live together tend to share their income and expenses; and that therefore the most reliable index of the family's need for public assistance was the total income of the family members.
Thus, rather than simply cutting AFDC to families across the board, Congress sought to target the benefit cuts in 1984 to those families that were, because of the members separate income, less needy.
Now, appellees, of course, have no constitutional right to a permanently fixed level of AFDC benefits, and they therefore recognize that they could not bring a constitutional challenge to a decision by Congress simply to cut benefit levels without more.
What they argue, therefore, is that Congress did not really cut AFDC benefits here, but rather took property away from the children who are required to be newly included in the filing unit.
Appellees focus on child support income, and especially on the assignment provision enacted in 1975 which requires a mother who applies for AFDC to assign to the state any right to support that she or her child may have.
This provision was designed to improve collection of delinquent child support by transferring the burden of collection from the abandoned mother to the state with its greater enforcement resources.
Now, the assignment provision by itself works no hardship on the family, because for every dollar of support assigned to the state, one dollar of AFDC comes back to the family.
Moreover, a family that assigns child support also receives an extra $50 a month from the state by virtue of the child support disregard provision.
Unknown Speaker: Well, it comes back to the family... you say it works no hardship; it works no hardship on the family.
Mr. Lauber: That's right.
Unknown Speaker: But one of the contentions here is that it does work a hardship on the child for whom the support is destined.
Mr. Lauber: That's right.
That's appellee's theory, that the effect of the assignment provision is to take the property of the child--
Unknown Speaker: And give it to the family.
Mr. Lauber: --and transmute that into AFDC and give it to the whole family.
Unknown Speaker: That's right.
Now why is that wrong?
Mr. Lauber: Why is their theory wrong?
Well, we think their theory, their taking theory, is wrong for several reasons.
First of all, the premise of their theory--
Unknown Speaker: xxx taking.
Let's not get into the refinement of takings.
Is it... is the substance of what happens wrong?
Under... can... can a mother who receives AFDC in theory distribute it among her children anyway she wants?
Could she continue to give... let's say she gets... she has $250 support payment for Joey.
Could she get $300 from AFDC and decide, I'm going to spend $200 of this on Joey?
Mr. Lauber: --She could.
She is required to spend the money in the best interests of all her children, and she could decide that--
Unknown Speaker: She's required to spend it in the best interest of all her children?
Mr. Lauber: --I think the AFDC program also imposes obligations on mothers with respect to how they spend it.
Unknown Speaker: But she's not giving $200 to Joey because she thinks that's in the best interest of all her children.
It assuredly isn't.
She wished she could spread that among all the children.
But she figures this $200 is Joey's.
Mr. Lauber: It could be Joey, she thinks, is more needy than other children.
Unknown Speaker: No, that's not the reason.
In fact, given her druthers, she'd distribute it evenly among all of them, as I think any mother would.
But she figures she is getting this $200 from her ex-husband for Joey, and that's been converted into an AFDC payment; she is going to continue to spend $200 on Joey, even though in her view that's not in the best interest of all the children.
Would that violate the AFDC rules?
Mr. Lauber: I don't think it would.
It would depend on what the other children needed.
I mean, the way the mother spends the AFDC money--
Unknown Speaker: It would depend on what the other children needed.
So if the other children needed more, and she continued to give $200 to Joey, that would violate AFDC?
Mr. Lauber: --With all probability, the money, the $200, would be going to pay things that are common expenses, like rent, utilities, gas and light.
Unknown Speaker: I know, but just take my hypothetical.
That's not the case.
She gives the 200 bucks to Joey.
Mr. Lauber: I can't say that would absolutely violate the AFDC law.
I don't think it's clear.
Unknown Speaker: It could?
Mr. Lauber: --on the family situation.
Unknown Speaker: It isn't clear that she can do that without violating the AFDC law?
Mr. Lauber: It is clear that some use of that money could violate the AFDC reasons governing the duties of the custodial parent.
And I don't think you can say without knowing all the facts of the case.
Unknown Speaker: Mr. Lauber, tell us again, now if a child support payment has been ordered for one of the children in the family and not the others, in the amount of let's say $200 a month, not all of the $200 a month that must be assigned to the state would come back to the family, would it?
Mr. Lauber: No, all of it would come back to the family, plus $50 extra.
Unknown Speaker: Oh, that wasn't my understanding at all.
I thought the $50 came out of the child support payment, and was only paid if the child support payment were made.
Mr. Lauber: The $200 comes to the family in a different form.
It doesn't come qua child support; it comes qua AFDC benefits.
But they get the same $200 from a different source, as it were.
Plus, if the state actually collects the child support, they get $50 more.
So the bottom line is, they have $250, although it comes from a different place, rather than $200 if they just got the child support.
Unknown Speaker: I thought the $50 was never given back to the family unless the parent ordered to pay the support in fact paid the support?
Mr. Lauber: That's correct.
But of course, if the parent doesn't pay, and there had been no assignment, the family would have gotten nothing whatsoever.
If the parent doesn't pay, at least they get the $200 in AFDC benefit by virtue of the assignment.
Unknown Speaker: Well, they get AFDC benefits.
It may not be that $200.
Mr. Lauber: It would be $200 of it--
Unknown Speaker: And indeed, the amount of money received by, or attributed, in AFDC to the child for whom the support payment was made is less than the $200.
Mr. Lauber: --That's correct.
The child's pro rata share, as it were--
Unknown Speaker: I mean, if you look at the child's pro rata share, it's substantially less than the $200 for whom the support has been ordered?
Mr. Lauber: --That's right.
If you look at--
Unknown Speaker: And the whole basis of the father's support obligation in that example would be his obligation to that child that he fathered, is that not so?
Mr. Lauber: --Well, that raises a question under state law.
And this is the first reason we--
Unknown Speaker: Well, isn't that correct, that when state courts order child support, that they are ordering it on the basis of the father's obligation to the child he fathered?
Mr. Lauber: --That's correct.
The father's obligation to pay support runs to his child, and the amount he pays is determined both by the child's need, his ability to pay, his wealth--
Unknown Speaker: Isn't under state law, in this case, didn't the mother have an obligation to spend the child support only on the one child.
Mr. Lauber: --We think that's not correct.
That's what the other side contends.
Unknown Speaker: What if it were?
Mr. Lauber: If the mother had an obligation to pay it only--
Unknown Speaker: To use the child support that's given her for this child to spend it on that child; for the benefit of that child.
Mr. Lauber: --Well, for the benefit of the child is different from giving him the cash.
Unknown Speaker: All right--
Mr. Lauber: And here, the state law clearly permits the mother to assign child support in order to get AFDC for the entire family.
So it's clear that here state law does permit the mother, in the best interests of that child to support... to assign the support money to the state.
Unknown Speaker: --Not only permits it; it seems to require it--
Mr. Lauber: It does require it, in fact, that's right.
Unknown Speaker: --But Mr. Lauber, you could certainly have situations where a local state judge awards child support on the theory, for example, that a particular child needs orthodontic treatment, and orders child support in an amount to cover that.
Mr. Lauber: Well, that would--
Unknown Speaker: And the father felt obligated to pay it for that purpose.
Now if AFDC law requires that all of that be assigned to the state, and it isn't all then available for that child, why shouldn't the father be able to go back to state court and say, look what the federal government has done, judge?
Now, reduce my child support, because what I'm paying is going to the family, not Johnny, who needed the orthodontic treatment.
Mr. Lauber: --Well, that raises a question about how the support is paid.
The AFDC statute permits states to either include or exclude in-kind payments from income for purposes of AFDC eligibility.
Now if the father... in the support decree it said the father would pay the dentist bills himself, that would... rather than pay money to the mother, have her pay the bills, that would be treated, I think by North Carolina, as an in-kind payment that wouldn't count.
Unknown Speaker: Well, I thought we had examples in this record where North Carolina brought charges against fathers for making some in-kind contributions of diapers and so forth.
Mr. Lauber: Well, let me co-counsel respond to that.
I don't know all the North Carolina cases.
But I believe North Carolina has exercised the option not to count in-kind payments as income.
So the key thing under North Carolina law is whether the money comes in cash to the mother, to use at her discretion.
If it does not, if it comes in kind, or if it is paid to a third party by the parent, that would not count as income.
Unknown Speaker: Mr. Lauber, may I just follow up on Justice O'Connor's example of the orthodontic special need of one child for whom the support money is designated?
Supposing it's not done in kind, but is just the reason the judge fixed the support amount at that amount.
And then it goes through the AFDC and comes back to the mother.
Would it violate the AFDC rules for the mother to use the money for the purpose intended by the judge, in other words, giving a disproportionate share to the child for whom the support money was paid?
Mr. Lauber: I don't believe it would.
I think it would depend on how the... what the judge keyed the money to.
If he keyed it to--
Unknown Speaker: Well, it would depend on what the need of the other children were.
It would depend on what the need of the other children was.
Say there were three children.
They all had the same orthodontic problem.
And they'd like to spend money on all three, but the money is there because of the orthodontic problem of the child of the father providing the money.
Could the mother, without violating AFDC rules, prefer one of the three children who is the source of the money?
Mr. Lauber: --I think for something very quasi-optional or a cosmetic thing like that, she probably could prefer one child over another, as any mother could in deciding which kid is going to have braces.
Unknown Speaker: Even though the three have the same needs?
That's my assumption: the three have the same needs, but the need of one is what produced the money.
And that would not violate AFDC?
Mr. Lauber: I think a mother always has the option of deciding how you are going to allocate a fixed... a small fixed pot of money.
But beyond the AFDC--
Unknown Speaker: Your answer is, it would not violate AFDC law?
Mr. Lauber: --I don't believe it would for orthodontics.
Unknown Speaker: Mr. Lauber--
--Well, for anything.
Would it for anything?
Maybe we've picked a bad--
Mr. Lauber: --It would depend on the need.
If it were kind of a critical life-threatening need, it would be a different judgment.
Unknown Speaker: --Well, of all three, three critical life-threatening needs, but the source of the money is because of the support for the one.
Could the mother... would it... is there an AFDC rule that the mother must treat the needy children equally, despite the fact that one of them produces the money?
Mr. Lauber: I don't think there's any rule that she has to treat them absolutely equally.
There has... there's a range of reasonableness.
Unknown Speaker: Gathering from your answer to Justice Stevens and Justice Scalia earlier, is there a fairly elaborate AFDC code of how the mother shall distribute the money to these various children?
Mr. Lauber: No, there is not.
The whole point of it is, let the mother act like a mother, and any other mother, and decide how best to use this money for her children.
And beyond the AFDC, there is also Medicaid assistance available.
Unknown Speaker: Mr. Lauber, I'll give you an easier question that I think will make it even clearer.
It isn't they all three have the same orthodontic need.
Two of them need food, and she gets back the money from AFDC.
Could she use it for the orthodontic purpose for which it was originally contributed by the husband instead of buying food for the other two?
Mr. Lauber: I think she probably could not.
I think it would be real hard to justify that.
But in the case of orthodonture, I'd like to point out again that the Medicaid is available to all the children in the filing unit automatically.
That's one benefit a child receives by virtue of the assignment, is that he then qualifies for Medicaid immediately, and that could well cover some of these medical expenses.
Let me get back to the Constitution.
There has to be some kind of constitutional problem with the statute, or it cannot be declared invalid.
And as I point out, the first problem with the other side's theory is, under state law, a child does not really have an absolute property right to child support.
What he has is a right to have the money used in his best interest.
State law permits, and indeed, requires the assignment of support to get AFDC for the family.
And state law therefore contemplates that it can be in the child's best interest to have his support money assigned to get AFDC for the family.
Unknown Speaker: Well, there may be individual examples where it isn't in the child's best interest, though.
Mr. Lauber: It's possible--
Unknown Speaker: And there certainly are examples in this record where the burden of this arrangement has been so great that it has caused families to split up, and send children to live with someone else, so that they can have the benefit of that child's support.
That's a pretty heavy burden, isn't it?
Mr. Lauber: --But that would follow from any decision by Congress to include the... any kind... wouldn't have to supporting him... any kind of income of a child, in determining the need of the family.
If the child earned money working at MacDonald's, and he lived with the family, that money would be included as family income, and it might be better to him to live with his father, and have it not be included.
But I think it's inevitable if you have a family-based grant, as AFDC is, you've got to look at the income of the people who live in the family to see how needy the family is.
And it could be that that would give an incentive, an economic incentive, for people to live in another way.
But that's an inevitable consequence of this family grant provision Congress has set up.
The second reason we think their taking theory doesn't work is that the participation in the AFDC program is entirely voluntary.
If the mother does not want to assign child support, she need not take part in the AFDC program.
It is simply one of the many conditions for eligibility for getting public benefits.
Unknown Speaker: But they're not arguing that it's being taken from the mother.
It's being taken from the child.
It's not voluntary on the part of the child.
The mother says, I'm going to chuck in your child support in order to get more money for the family as a whole.
Mr. Lauber: The Congress has made the family unit the applicant.
Unknown Speaker: Well, that's very nice, but it doesn't say anything about whether it's a taking from the child or not.
Mr. Lauber: But if the child doesn't want to have his support assigned, he can tell his mother and she cannot assign the support.
I mean, the children depend on their... monetarily depend on their mother to make decisions in their best interest.
Unknown Speaker: So you say... you suggest that if the child had a guardian, secured a guardian ad litem, talked to his or her uncle and said, mother is giving away my child support, let's sue her, do you think they could an injunction against her signing that?
They say, this is mine.
My father is giving it to my mother for me, and she is breaching her trust.
Mr. Lauber: We think under state law they couldn't get that injunction, because it's not the child's absolute property.
The mother has to use it in his best interest, and she can convince--
Unknown Speaker: So this case really then turns on the state law?
Mr. Lauber: --I think ultimately it does.
Unknown Speaker: And if... if we thought that... that this payment belonged to the child, then there must be a taking.
Mr. Lauber: No, that doesn't follow.
You have to have... first--
Unknown Speaker: All right.
What must there be, then?
Mr. Lauber: --Well, first there's got to be property to be taken.
Unknown Speaker: Yes?
Mr. Lauber: Okay, then beyond that, you have to consider that going into the program is entirely voluntary to begin with.
Unknown Speaker: Well, the child say, I'm involuntary.
I don't want any part of the program.
I'm going... the law makes my mother put me in, but I don't want my mother to do it.
That's part of the case.
Mr. Lauber: But if the child is wrong, and the mother in his best interest--
Unknown Speaker: What do you mean wrong?
How can... if under the state law it's his money, and he doesn't want any part of the program--
Mr. Lauber: --Well, if you're right about that, then she could be enjoined from going into the program.
Unknown Speaker: --All right.
And how about a taking?
Mr. Lauber: Well, there would be no taking if she weren't in the program.
Unknown Speaker: All right, so you say--
Mr. Lauber: Well, the point is, if he really has property--
Unknown Speaker: --You say that the remedy is the injunction?
Mr. Lauber: --Right.
If he really has property and she... but state law permits her to assign it, so it's hard to see how--
Unknown Speaker: The guardian ad litem didn't come along until six months afterwards.
So he gets an injunction but he wants back pay; I mean he wants to get the support back.
And it's a taking, there's been a taking.
Mr. Lauber: --Well, I don't--
Unknown Speaker: I mean, that seems to me what the case is all about.
Mr. Lauber: --Well, if there is... if the child does have property such as you describe--
Unknown Speaker: There isn't any case at all unless the child has some property under the state law.
Mr. Lauber: --Well, that's the first problem with their argument.
But there are other problems beyond that as we showed in our brief.
Argument of Catherine C. McLamb
Chief Justice Rehnquist: Thank you, Mr. Lauber.
We will hear now from you, Ms. McLamb.
Mr. McLamb: Mr. Chief Justice, and may it please the Court:
The State of North Carolina administers its AFDC program in conformity with Federal law as explained by the Solicitor General and as stated in the briefs for the Appellant.
I would like to make two points to this Court.
First, the District Court below found an unconstitutional taking based upon its erroneous interpretarion of North Carolina law regarding child support.
Secondly, the court committed a fundamental error in ordering retroactive benefits in this case.
Unknown Speaker: Do we have to disagree with the District Court's... or with the court's construction of North Carolina for you to prevail?
Mr. McLamb: No.
I don't believe there is a taking in this case because this is a voluntary decision; this is an eligibility requirement.
You don't really get to the taking of property.
It's a voluntary decision on the mother's part.
Unknown Speaker: What's the error... what's the error in North Carolina law that--
Mr. McLamb: In... Judge McMillan found that because these children lived together, and they must apply for AFDC as a family unit, and therefore, by law, assignment... there must be an assignment of child support rights.
He found that certain property interests were taken.
But the property interest--
Unknown Speaker: --Of the child?
Mr. McLamb: --Of the child.
The property interest he explained in his opinion was that child support is an exclusive property right in North Carolina.
The other right that I could glean from the opinion is that he says that the child has an absolute exclusive right to enforce the obligation of the custodial parent; and in this case, I'm just going to use mother, that's a little easier, to enforce the--
Unknown Speaker: Will we have to change that interpretation that the judge made of North Carolina law?
Mr. McLamb: --What I would like to show you is, that is an erroneous interpretation.
It is not correct.
Unknown Speaker: We normally of course accept the interpretation of the lower Federal court on matters of state law, don't we?
Mr. McLamb: You should, unless it is... I would not think that this Court would accept the interpretation of state law if it is clearly shown to be incorrect, and that is what I would like to show you today.
Unknown Speaker: And your opposition will show us just to the contrary.
Mr. McLamb: They will attempt to do the exact opposite.
The second property right that Judge McMillan found was taken was, as he described it, the exclusive right of the child to enforce the obligation of the parent to spend child support money only on that child.
What our... this is simply not the law of North Carolina.
What our statutes read is that child support is ordered, the primary obligation is placed upon the mother and the father.
Child support is ordered to meet the reasonable needs of the child.
Then child support is paid to the custodial parent for the benefit of the child.
In North Carolina, the child does have the right to enforce the obligation of the mother to use child support for his or her benefit.
North Carolina has, by statute, passed... passed a law that deems the assignment of child support rights, the obligation to receive support, upon the acceptance of public assistance.
This is a statute that has been enacted in North Carolina.
The rationale of Judge McMillan below--
Unknown Speaker: Maybe that statute was a taking?
Mr. McLamb: --It was not so considered by the legislature of North Carolina, nor the courts of North Carolina, which has considered... which has passed upon this statute.
And I would say that this is an area of family law in North Carolina.
The rationale of--
Unknown Speaker: How did the court below deal with that particular statute?
Mr. McLamb: --The court below ignored it.
It was not mentioned in his opinion.
It was raised--
Unknown Speaker: But you had raised that with the court?
Mr. McLamb: --Pardon?
Unknown Speaker: You had argued and presented to the court--
Mr. McLamb: This was raised to the court below.
The briefs are in the record, the docket that has been sent to you, on page 32 of the appellees' memorandum for motion for further relief.
This was filed May 30th, 1985.
This very statute, the provision... this is contained in Chapter 110 of the North Carolina general statutes.
This was brought to the court's attention.
In order to reach his opinion of this exclusive property right, you have to ignore that statute because--
Unknown Speaker: --You think that whatever... any property right the child might have had was modified by that statute, or it just couldn't have come about in the face of that statute?
Mr. McLamb: --You have to read the North Carolina child support law in conjunction with the statutes.
These statutes have to be read together.
Judge McMillan's rationale--
Unknown Speaker: Which one prevails?
I mean how do you read them together?
Mr. McLamb: --There is no statute in North Carolina that says, child support is an exclusive property right of the child.
North Carolina law places primary emphasis on the obligation of a parent to support his child.
That is the right that the child has, is to enforce that obligation.
Reading the statutes again, the child has the right--
Unknown Speaker: Well, would the mother be breaking the child support law if she received child support and just didn't spend it on the child?
Mr. McLamb: --And didn't... that would be that the mother was not spending the money for the benefit of the child.
This is, to me, another fundamental error in Judge McMillan's opinion.
Unknown Speaker: Well, what if the mother took the money and spent it on another child, all of it on another child, that she thought needed it more?
Mr. McLamb: She is breaking... in that case, she is breaking her fiduciary to that child, if this... if she is leaving her child--
Unknown Speaker: But she... you think if she was receiving child support and she wasn't on AFDC at all, she just received $250 a month, and she just split it three ways among her three children.
Mr. McLamb: --And this was her only income?
Unknown Speaker: No, this was child support income.
Mr. McLamb: In your hypothetical, is that the only income that is coming into that family, is $250 child support for one child?
In that case, the mother... it would be within the mother's discretion... these are not easy decisions, but it would be within the mother's discretion to determine what is the best interest of that child.
She receives child support under our statutes.
The statute does not read, child support shall be received to be spent to benefit that child.
Child support is received for the custodial parent to be used for the minor child's benefit.
Unknown Speaker: And so she can use it for the benefit of all of her children?
Mr. McLamb: It would be a decision that would be within the discretion of the mother.
Unknown Speaker: Yes or no?
The answer is yes, I suppose.
Mr. McLamb: The answer is yes if she, within her discretion, determines that that would best benefit her child.
That, to me, is a fundamental problem with Judge McMillan's analysis in this case, because he is undermining well established law in North Carolina that the custodial parent has great flexibility in determining what is in the best interest.
A parent may not profit at the expense of her child.
If this is determined to be the case, an action may be brought on the child's behalf in order to compel the mother to act in his best interest.
Unknown Speaker: Well, what if the mother believes that it isn't at all in the best interests of the child for whom the support is paid that her other children are going to starve to death if she doesn't use that money?
Mr. McLamb: Then that is her choice.
Participation in the AFDC program is a voluntary decision.
This is within the discretion of the mother, once again.
If she decides that it is not in that child's best interest that it... for whatever reason, she decides that Johnny should have every bit of that money, no matter what, she has a voluntary decision that she can make that she will not participate--
Unknown Speaker: And starve to death?
Mr. McLamb: --This is a decision that she can make.
It is a hard decision.
I am not saying that these decisions are easy decisions.
But these are decisions that are within the discretion of the parent and authorized under North Carolina law.
Unknown Speaker: Thank You Ms. McLamb.
Ms. Wettach, we'll hear from you now.
Mr. McLamb: You will be able to make your entire argument.
The Court won't rise to lunch until this case is submitted.
Argument of Jane R. Wettach
Mr. Wettach: Mr. Chief Justice, and may it please the court:
The actual, palpable, financial loss to the plaintiff children in this case is quite apparent from the evidence.
The two daughters of Joyce Miles, for example, lost $95 every month of their child support.
Similar amounts of money were lost every month by other children in this case.
I think it would be helpful if we just walked through an example of how this practice actually works in North Carolina at this time.
For example, Joyce Miles has five children.
Two of them, the oldest two, are of a different father.
The three younger ones, they have separate fathers.
The two oldest girls are the beneficiaries of a $189 a month child support payment.
It was ordered by the state court judge, who made a decision about the reasonable needs of those children and ordered this father to pay.
Prior to 1984, when the rule was imposed, the mother did not receive AFDC assistance for those children; they were separated from the grant.
She had three younger who were not as fortunate to have a father who chose to support them, and she received $244 in AFDC for those children.
In October of 1984 she received a letter from the State Department of Human Resources, which said, in order to continue receiving AFDC for those children for whom you are getting it, you must add the other children to the grant, and as a part of that, you must make their support available to the state.
The state will take that money, keep the money; it will return $50 because there is now a $50 disregard; and we'll give you AFDC benefits.
Unknown Speaker: And you think prior to that time she was pretty careful to spend... how much was it?
Mr. Wettach: She had $189 to support the two older girls.
Unknown Speaker: And she used to spend that $189 for those two, and how much did she get from AFDC for the other three?
Mr. Wettach: $244 for the other three.
Unknown Speaker: So they got $80 apiece, and the other ones got how much apiece?
Mr. Wettach: $95 apiece.
Unknown Speaker: Do you think she was really careful to make sure that the family's... the child support money she was getting from the husband went to those two children?
Is it a real world we're talking about when we're talking about a mother who has, let's say, five children, one of whom has support money, spending that money... that allotment, on that child?
Is that a real world out there?
I mean, we have these Cinderellas in reverse, one child of five, who has a lot of money, and the other four don't?
Mr. Wettach: Well, in most of these cases, the amounts of money were not significantly different.
In that case, as we said, the difference between $80 and $95 is not a lot, and the evidence in the case that she was spending more money on the children who were the recipients of that child support.
She mentioned that... those were two teenage girls; she tended to spend more money on them.
Unknown Speaker: Because they were teenagers; not because that's where the support money was... the reality that Congress was addressing in this statute is a reality in which a mother spends whatever money she has for all of the children she's taking care of; isn't that right?
Mr. Wettach: --We don't think there's any evidence to show that mothers routinely are violating their court award.
She has a court order.
It tells her that she's got to spend the money in a certain way.
And there's no evidence that nationwide these mothers--
Unknown Speaker: Do you know of any case in which a parent has been sued for spending the money on the wrong children?
I mean, I've never even heard of such a suit.
Mr. Wettach: --I'm not aware of any suit that a mother was actually sued--
Unknown Speaker: And you think that's because everybody is really keeping close track of how much money they're spending on each of their children?
Mr. Wettach: --Actually, I would like to take that back.
There was the case from which the District Court found much of its law of North Carolina, where a father sued the mother for misusing the child support he was spending, and the court said... actually dismissed the case because the father was the wrong party, and said, the child support money belongs to the children.
The father could only bring the suit as next friend.
And implicitly authorized the father to be able to sue for that reason, if there were a substantial misuse of the money by the mother, then I think that would be cognizable under state law, under trust theory.
Unknown Speaker: What about the North Carolina law on the right of the child?
That case that you were just talking about turns around the right of the child, I take it.
Mr. Wettach: Yes.
Unknown Speaker: Is that--
Mr. Wettach: We feel that--
Unknown Speaker: --What about that law?
Mr. Wettach: --We feel that--
Unknown Speaker: Judge McMillan thought there was a property right in the child?
Mr. Wettach: --We feel there is no reason that this Court should depart from the lower court's analysis of North Carolina law.
Unknown Speaker: Well, I know, but what about the... is there some other evidence besides the judge here as to what--
Mr. Wettach: Well, there's certainly... there's all the case law.
Unknown Speaker: --what North Carolina law is?
Mr. Wettach: There's the case law that Judge McMillan of course relied on.
There's also the statutes.
For the benefit of the child is not a particularly difficult concept.
Unknown Speaker: But how do you ignore the state statute permitting the mother to make the assignment?
Mr. Wettach: If... the assignment--
Unknown Speaker: Doesn't that sort of undercut the notion that the child has his or her own right to the money?
Mr. Wettach: --No, I don't think it does.
I think when... when participation in the program vis-a-vis the child who is receiving child support is voluntary, the mother can certainly make the choice that the child support that she is getting is inadequate to meet those needs, and therefore, she would like to apply for AFDC, and the condition of eligibility is that she make this assignment and the state take over the responsibility of collecting that support.
But when this involuntariness becomes a part of it, that changes how that assignment provision works.
Unknown Speaker: Yes, but the state statute permits her to do it, but it doesn't say that when she is... if she would choose, because it's not in the best interest of the child not to do it; but she can't make... that's the problem with the Federal law.
It deprives her of being able to voluntarily choose to apply for AFDC for that child, or not apply for AFDC for that child, because the assignment provision would end up not being in the best interest.
The assignment provision doesn't change anything about that... when money is paid, it is paid for the best interests of a particular child.
Your opponent I understood to argue differently, that the North Carolina assignment law supersedes, to the extent it's inconsistent with some of the very strict you've been reciting.
Mr. Wettach: I think that's just incorrect.
When... if the mother... that whole provision of state law was written when it was a voluntary matter to apply for AFDC.
Unknown Speaker: xxx voluntary, isn't it?
She is not forced to apply for AFDC?
Mr. Wettach: She is forced to apply for AFDC for particular children--
Unknown Speaker: By what law is she forced to apply for AFDC?
Mr. Wettach: --As a condition of getting AFDC for some children, she is forced to apply for all children.
Unknown Speaker: Oh, it's a condition.
Mr. Wettach: It's a... right.
She's not... of course, nobody is rounding her up and telling her to apply.
Unknown Speaker: xxx deal with the assignment statute?
Mr. Wettach: Judge McMillan talked at length about the assignment provision and how it is the procedural mechanism by which the state--
Unknown Speaker: Yes, but did he consider it in the process of determining whether the child has a property right?
Mr. Wettach: --He was certainly--
Unknown Speaker: He didn't consider the state law that says if you assign the child support to get AFDC that it's deemed to be for the benefit of the child, did he?
Mr. Wettach: --Well, of course, the assignment law in state law doesn't say, and then it is deemed to be in the benefit of the child.
The assignment provision simply says, if you apply for AFDC, you are deemed to have made an assignment of your child support to the state.
That's all it said.
It doesn't say anything about, for the benefit of the children, or transforming the income from the benefit of one to--
Unknown Speaker: But if that's what the state law says, doesn't that do something to the child's property right?
Mr. Wettach: --I don't see how it would in any sense.
When you assign your money you are allowing the state to take it in, but it gives it back when you are on the grant and you make the decision to... you use the assignment provision almost as a trade.
You will trade in your child support of $50, because $50 isn't adequate to meet a child's needs, so that you can get $100 in AFDC back.
But that... when the figures are different, when they say, assign in $100 and get $50 back, that's a very different sort of situation, and a very different sort of choice.
Unknown Speaker: But isn't it true that you always get at least the amount you assign back, and sometimes plus $50?
You example of $189 of child support and $244 they had before, a total of $400 and something; what did they get after she made the assignment?
Mr. Wettach: They got $280 in AFDC and $50 of the support, so there was a net loss of $95.
Unknown Speaker: So they only got... I see.
Mr. Wettach: So that's where the loss.
And of course, the AFDC hasn't gone done; it is the child support that they--
Unknown Speaker: They always get back more than the child support that they're trading in; but they don't get back more than the would have gotten had they had the child support plus their former AFDC without that child counted in?
Mr. Wettach: --If you look at the whole family as a total family unit, the mathematics work out that way.
Of course, our position is that the constitutional rights belong to the children who own the money for whom it is paid.
Unknown Speaker: I just want to be sure about one thing.
Assume there's child support for just a second, and assume that the $189 was income from working at MacDonald's, and that was it, and we didn't have a child support in this case at all.
Would it still be unconstitutional... program still be unconstitutional to require them to count all the money in one pool.
Mr. Wettach: It depends on whose $189 it is.
Unknown Speaker: It's the teenage daughters.
Two teenage daughters, both work, and they earned $189, and they'd like to spend it on themselves.
But under the new rule, they must count that as part of the family pool, and the result of it is to reduce the total amount they get.
Is that unconstitutional?
Mr. Wettach: I think you would have to look at what the state law says about that type of income.
My recollection is that earned income under common law is to be owned by the parents and at their discretion.
Unknown Speaker: You think that depends as a matter of... on state law whether that program is bad or not?
Mr. Wettach: I think it depends as a matter of state law what the nature of the $189 is.
Now, I think that is a different case than when the mother receives it in a fiduciary and trust capacity.
Unknown Speaker: My bottom line question was, would you challenge the constitutionality of this basic arrangement if the child support were not a part of it, if it just applied to income that the children earned?
Mr. Wettach: Well, that wouldn't be the case.
That would not be the case that is in front of the Court--
Unknown Speaker: Even though it might have precisely the same economic consequences?
Mr. Wettach: --Again, I think you would have to look at the nature of the income that you're talking about.
Unknown Speaker: Well, I don't know anything about state law.
I'm just looking at the economics and the burden on these people who have trouble making ends meet.
It would economically be precisely the same situation.
Why wouldn't it be precisely the same legal situation as a matter of constitutional law?
Mr. Wettach: If in fact what was happening was that money was being taken from a child who had no obligation to support other children, then I think it would be precisely the same legal situation.
If the money is restricted in that way.
Unknown Speaker: Isn't the logic of your position not only that the 1984 amendment is no good, but that the whole... even if a mother voluntarily wants to include a child who is entitled to child support in the AFDC program, because, let's say, the father is in fact not paying it, and she'd rather have the government try to pursue the father, assign it to the government and get back AFDC for it, even that would be invalid, wouldn't it?
Mr. Wettach: Not if--
Unknown Speaker: She's giving away the--
Mr. Wettach: --she's not losing anything for the child.
Unknown Speaker: --Oh, but she's not... when she gets it back, she's not going to just spend it on that child, she's going to have to abide by the AFDC regulations, and spend it on all the children.
But that money should go just to that one child, shouldn't it?
And if the government collects it, it keeps it.
Mr. Wettach: It keeps it all but the first $50 of it, that's correct.
Unknown Speaker: So that would be bad too, wouldn't it?
And so would including in the AFDC the earnings of... well, the earnings of a child that he earns all on his own, and he has no obligation to support any other children.
Mr. Wettach: That's a difficult example, because those are not counted for AFDC purposes anyway because--
Unknown Speaker: They're not counted.
Well, just take the child support where the mother wants to assign it to the government; you couldn't do that?
Mr. Wettach: --If it were in... if it were in the best interests of that child, because it was only coming in, say, once every six months, then spread out, she's probably not violating any duty she has.
Unknown Speaker: Oh, I see; one-fifth of something is better than a hundred percent of nothing.
I guess that would be right, if she wasn't collecting a thing.
Mr. Wettach, let me ask you a pragmatic question.
Do you know of any case in North Carolina where all of this has driven the more fortunate child out of the home to live elsewhere?
Mr. Wettach: Yes, Justice Blackmun, there is an example of that exact situation among the five named parties that are the moving parties in this case, where a child has received--
Unknown Speaker: Well, I thought there were, but I haven't heard it mentioned all morning.
Mr. Wettach: --In the Medland family, there was a child, and she was entitled to $200... her father was paying $200 worth of child support for her, and her mother and father decided, between the two of them, that she should move out of the house, because otherwise she would have to be included in the grant, and her standard of living would go down, and they did not wish that to occur.
Unknown Speaker: --Or if a guardian ad litem came into the picture, he might well take that position?
Mr. Wettach: Indeed.
And we think that's a very serious consequence of the regulation, that that--
Unknown Speaker: Where did the child move to?
Did she move with her father, or to somewhere else?
Mr. Wettach: --In that particular case, she moved with her father.
And of course, it could have been in any number of situations.
Unknown Speaker: Ms. Wettach, I suppose in your view we would have to make a case-by-case determination of how child support payments were used in each household to know whether the Federal provision could be applied or not?
Mr. Wettach: It seems that it would make more sense for the Court and the Congress to determine... to make a presumption that people were obeying their court orders, in the absence of some evidence to the contrary.
I mean, the presumption makes sense that people obey the law, as opposed to, that people don't obey the law.
And if... now, of course, under AFDC law, there is an inquiry in every single case of every single applicant about what money they have in the household, and where it is.
They send in a monthly report every month, and they have to describe these things.
Of course, if there were money being spent, then there may well be accounting for that money, and that's the way it would be... really under current law, there would be that situation, where if she were actually making income available, it would be counted.
Unknown Speaker: Ms. Wettach, wouldn't you say that one of the... one of the benefits that a child could receive, and one of the purposes for which a mother may use... or a father may use the child's support money is to enable the child to live with brothers and sisters?
I mean, let's assume... let's assume a mother is getting support money for one child, and she has a couple of other children, she says, I want this child to be brought up with his brothers and sisters.
In order to do that, rather than sending the other children away to the poor house or somewhere, I'm going to have to spend some of this support money for them.
Wouldn't you think that that would be considered spending that money for the benefit of the child?
Mr. Wettach: There may be individual circumstances where that might be the case.
As a general rule, though--
Unknown Speaker: Wouldn't that be every circumstance in which the mother decides to trade in the support... the support money for AFDC benefits, which will be slightly more than the support money and enable her to keep the family together.
Can't that be considered to be in the benefit of the child who was entitled to the support money, even if he doesn't get dollar for dollar what he used to?
He's getting his brothers and sisters?
Mr. Wettach: --There may well be some benefits there, and there may well be circumstances.
But to say as a matter of law, which we have here, that the mother must make that choice is the difficulty with it.
Unknown Speaker: That's a different question, though.
That's not the takings question.
That's the question of whether there is excessive coercion on a fundamental right or something of that sort.
But as to whether there has been a taking or not, can't you say that indeed the mother has traded in for value the child's support money?
She has gotten back for it the company of the brothers and sisters?
Mr. Wettach: Again, that may be--
Unknown Speaker: The family unit as a whole.
Mr. Wettach: --that would have to be made on an individual basis as to what is in the best interest.
And perhaps somebody could prove to a court... a state court in a... in a hearing on it that it was or it wasn't in the best interest of that particular child.
But on its face, to take money from one child and spend it on the other child takes away from the state... state court order that says, this $200 is to be used for a particular child; it takes away from the father's expectation that he will support his children, and not be expected to offset expenditures made by the AFDC program for other children to whom he is unrelated.
And that disruption is a significant problem.
Unknown Speaker: I don't know.
I just expect that if I had before me a suit involving an allegation that support money wasn't being spent entirely for the child for whom it was destined by the mother, and that she was using some of it to buy bare necessities for the other children just to keep the family together, I doubt that I'd find that mother to be in violation of her trust obligation.
Mr. Wettach: But that may be because there... she's being put under this unconstitutional condition that she has to do that.
And maybe given an unconstitutional condition on this program, once decisions about what's in the best interest, may have to be different.
But should the government be putting her in the position of having to make that choice?
Unknown Speaker: xxx though.
That's not the takings point.
Mr. Wettach: Well, it certainly--
Unknown Speaker: I think I'm right about that.
That is your separate point.
Mr. Wettach: --That is a separate... that's right.
And it's another theory of liability for the government.
Unknown Speaker: Ms. Wettach, have you found examples of state court judges who have reduced child support orders because of the impact of this program on the use of the money for the child for whom support was originally ordered?
Mr. Wettach: Yes, Justice O'Connor, there was one which was cited in our brief that we were aware of because it was local, and the state... it was a situation where the father was providing a certain amount of support, and he went in and said, look, this is what's happening and what happened in that case is, the state judge ordered that the family be severed for AFDC purpose, and he ordered the county to continue to pay AFDC for the other children, and allowed the father to make in-kind payments to off... so that they wouldn't be counted.
And there was another situation that was presented by this case where the father was paying $200 a month voluntarily without a court order.
When the benefits were assigned, and he went... and the county brought suit against him, they reduced the amount to $87 a month.
So that in fact, they... when you worked out the figures, he didn't lose that much by being on AFDC, but of course, the father was willing and able to pay much more for his support.
But it wouldn't have mattered.
His child would have stayed at the same standard of living of an AFDC family, regardless of how much the father had paid; and so the support was reduced.
The state has not talked too much about the remedy that was imposed.
But I'd like to say just a few words about that as it is presented by this case.
The state has mentioned in its brief that the remedy was incorrect in this case for a number of reasons.
We think it's quite clear from the procedural posture of this case that there was a violation of an injunction.
The injunction was entered in 1971, and it was clearly... it was to remedy the exact same thing that was going on in 1971 as part of the state program.
At that point it did not have the cloak of Federal authorization as it claims to have now.
But it was in fact--
Unknown Speaker: There's not doubt it has that, it has Federal authorization now, is there?
Mr. Wettach: --It has Federal statutory authorization under their theory of the statute.
Unknown Speaker: I thought your case was purely a constitutional case here, since the passage of the more recent AFDC amendment.
Do you still claim that it's not authorized by statute?
Mr. Wettach: We have in our brief suggested that the statute can be read in a different way which would not cause the constitutional problems that are caused by the application as it's been given by Secretary Bowen.
Unknown Speaker: But the District Court didn't agree with you on that point?
Mr. Wettach: That's correct.
But in this case, there has... there was the same activity by the Welfare Department in 1971.
That activity was enjoined.
And in 1984, it was flouted by the state.
The injunction was simply ignored, and the state made a decision to proceed as it had been before 1971, and before it was enjoined.
The state has argued that the remedy that the lower court ordered, which was to pay back all the child support money that it had taken, and pay back any AFDC benefits which were withheld, or for families that were terminated as a result of this, would violate the Eleventh Amendment.
We think there is no question that it would not violate the Eleventh Amendment for a number of reasons.
First of all, of course, it is--
Unknown Speaker: xxx.
Mr. Wettach: --Yes.
Unknown Speaker: Has this been preserved below, the Eleventh Amendment?
Mr. Wettach: Yes.
Yes, it was argued below, and it was... the theory was rejected by the lower court, and we would ask this Court to affirm on that issue as well.
What had been argued, and is argued here in their briefs, is that the Eleventh Amendment would bar it because this was effectively retroactive benefits.
The error in that position is the language of Edelman v. Jordan, which says that the date for determining prospective and retrospective relief is the date of a court-ordered obligation to act otherwise.
This court order was entered in 1971.
And from then they had to act accordingly.
That was a prospective order, and that was not barred in any way by the Eleventh Amendment.
The state's position appears to be that as soon as it violated the injunction, anything that it didn't pay was transformed into retroactive payments, and therefore, were barred by the Eleventh Amendment.
And we think that that position doesn't make sense, and is not consistent with this court's interpretation of the Eleventh Amendment.
Unknown Speaker: Ms. Wettach, before you leave, what... what would you suggest the Federal Government have done instead?
Assuming that its finding was correct, the legislative finding, that families use all of the money that they get on all of its... on all of their members for the best interests of the whole family group, including money from support payments.
And they... the Federal Government says, we have to... we're... we have to pay out less.
We have to reduce the amount.
It makes sense to us to reduce the amount to those families that have $800 coming in.
And we know as a matter of fact, never mind that theoretically they're supposed to be spent on only two of the children; we know that that family has $800 which is being used for the whole family.
This other family over here only has $200 that's being used for the whole family.
Now, I want the cut to hit the family with the $800 and not the family from the $200.
How could the Federal Government have done it lawfully?
Mr. Wettach: We think it would be quite reasonable for the Federal Government, and constitutional, to have looked at that family, looked at the AFDC recipients, and determined how much their need was actually reduced by the fact that someone else in the household may have been sharing the burden of the joint expenses.
This is particularly set out in our brief when we talk about an economy of scale reduction that could be made in an AFDC payment.
For example, if there... well, there's a chart that talks about, what's the individual's standard of need in a family.
And we all know that that individual goes down as the household gets larger, because you need... if you have an apartment that--
Unknown Speaker: But you wouldn't allow the support payments to be counted in at all?
Mr. Wettach: --It's not that they're counted.
They're not counted at all.
All they're doing is, you recognize that the need of the AFDC recipients is less because they don't have to share the whole... they don't have to pay for... for example, they don't have to pay for all of the rent, or all of the utilities, the shared expenses, because there's someone else with income who is sharing.
So maybe there's a quarter of it that is paid by someone who is not in the unit, so they only have to pay for three-quarters of it.
So their need is a little bit less.
Unknown Speaker: But that's not the reality that Congress has found.
I don't care what your chart is, if you assume in theory that the mother is spending the money for the house which other people use and whatnot.
The reality that Congress perceived was that all the money that comes into the family unit is distributed among all the family members on the basis of how they need it, period.
And Congress wants to take that factor into account.
You just told me that there's no way that Congrss can do that?
Mr. Wettach: No, I think I told you that there is a way that they can do it.
And they can do it in either of the two ways we suggested.
Actually, they can do it by an economy of scale reduction of the AFDC recipients, or they can do it by an individual analysis of what is going on in a family, and if money is actually being transferred, they might count it.
Let's take an example where there are three people in a household.
The child support child gets $100, the other two get $200 in AFDC.
The mother uses all the money the same.
Their need is the same.
To say... then there's no transfer, and that's when Congress can't take it into account.
But to say that these two need a little less because there's a person outside the unit who is also contributing is reasonable, and Congress could cut in that matter.
And we think that's constitutional, and we would have no complaints with that.
If there are no further questions.
Chief Justice Rehnquist: Thank you, Ms. Wettach.
The case is submitted.