GARDEBRING v. JENKINS
Legal provision: Aid to Families with Dependent Children (AFDC--provisions of the Social Security Act)
ORAL ARGUMENT BY JOHN L. KIRWIN, ESQ. ON BEHALF OF PETITIONER
Chief Justice William H. Rehnquist: Mr. Kirwin, you may proceed whenever you are ready.
Mr. Kirwin: Thank you, Mr. Chief Justice, and may it please the Court.
This case is here on certiorari to the Eighth Circuit Court of Appeals.
The case involves Minnesota's operation of the AFDC program.
There are two issues raised by this case.
First, does an applicant publicity regulation of the Secretary of Health and Human Services require a state to single out one of the myriad eligibility requirements of the AFDC program?
And require a state to give repeated, detailed, written notice of that one requirement to all applicants and recipients?
Minnesota and the Secretary argue that the Secretary's regulations requires states to generally publicize the AFDC program and its eligibility requirements to applicants.
The second issue is equally significant to Minnesota and to other states.
Can a court apply an information regulation of the Secretary in a way that effectively modifies Congress' eligibility requirements?
Can the court require the state to pay AFDC benefits to a person who is without dispute ineligible to receive those benefits under Congress' eligibility statute?
A divided panel of the Eighth Circuit required the state to pay such benefits to an ineligible person.
And enjoined the state from recovering over-payments made to that ineligible person even though Congress had expressly required states to recover all AFDC over-payments.
The Eighth Circuit essentially read the Secretary's information regulation as modifying the statutory eligibility requirement.
And also the statutory recoupment requirement.
The Secretary doesn't interpret his own regulation in that way and the regulation couldn't be interpreted to modify the statutory requirements.
That would be beyond the Secretary's authority.
The specific eligibility requirement involved in this case is the 1981 lump-sum statute.
As the Court will recall from the Lukhard case, which was decided last term, the lump-sum statute provides that when an AFDC family receives an amount of non-recurring income greater than its monthly AFDC grant, the family will be ineligible for AFDC for one or more months, depending on the size of the lump-sum payment and the amount of the monthly grant.
Immediately after the passage of the lump-sum statute, which was part of the Omnibus Budge Reconciliation Act of 1981, Minnesota distributed a letter to all persons who were receiving AFDC in Minnesota at that time.
The letter told them about certain of the OBRA changes.
Now, there were many, many OBRA changes to the AFDC program and Minnesota's letter picked out 19 of the changes that Minnesota thought were the most important.
One of those was the lump-sum statute.
Minnesota sent that letter simply to assist its AFDC recipients and Minnesota had never had the understanding under the federal regulation that it was required to provide advance publicity to recipients that Congress had changed eligibility requirements.
Apart from the 1981 letter, Minnesota's general program of providing information to applicants and recipients is accomplished primarily in two ways.
First, Minnesota provides a pamphlet for AFDC applicants which provides general information about eligibility requirements and other aspects of the AFDC program.
The pamphlet includes descriptions of those eligibility requirements which apply to every AFDC applicant and recipient and which form the framework of the AFDC program.
The pamphlet provides specific information regarding the eligibility requirements which relate to age of children, statutory reason for deprivation of parental support, the two different kinds of income limits, the resource limits of the program, the requirements to participate in work programs and in recovery of child support.
And the pamphlet tells applicants that it does not cover all the AFDC rules, that those rules change and that applicants should consult with their caseworkers concerning the more specific requirements of the AFDC program.
Second, in addition to this pamphlet, Minnesota provides a caseworker to each applicant and recipient to consult with that person concerning the specifics of the AFDC program.
Now, in addition to those information sources, every applicant and recipient knows, based on their participation in the program, on their completion of the application forms and other periodic forms on which they have to report in minute detail their income and resources and family living situations, applicants and recipients know that almost any change in their financial situation affects their AFDC eligibility.
As a general matter, the Secretary and the state have determined, based on their experience in operating the AFDC program, that a lengthy written explanation of eligibility requirements is less helpful to applicants or recipients than an individualized oral discussion at a time when the eligibility requirement is meaningful to the recipient.
In 1984, two and a half years after the OBRA changes became effective, the named Plaintiff, Kathryn Jenkins, intervened in a pending Federal Court lawsuit.
And Jenkins claimed that Minnesota was required to give specific, detailed, periodic, written notice to every applicant and recipient concerning only one requirement of the AFDC program, the lump-sum statute; a statute which affects really a small percentage of the recipients in the AFDC program.
The lower courts agreed with Jenkins' argument and they ordered the state to provide that kind of notice.
And the court held that Minnesota's 1981 letter which included an explanation of the lump sum statute, and which Jenkins had received, hadn't been specific enough in describing the lump-sum statute.
Unidentified Justice: Who was the District Judge, MacLaughlin?
Mr. Kirwin: It was Judge McLaughlin Justice Blackman.
The lower court, we believe, seriously misconstrued the Secretary's regulation.
What does the regulation require?
This is not a regulation that requires detailed notice of every eligibility requirement or even of any specific eligibility requirement.
The regulation says that applicants shall be given information in writing and orally as appropriate about various aspects of the program.
In addition to eligibility requirements, the state has to describe program coverage, scope of the program, other services available, appeal rights, and other rights and responsibilities.
And the regulation requires that the state provide simple pamphlets or bulletins containing information about the program.
The state and the Secretary agree with Judge Fagg's interpretation of the regulation.
Judge Fagg who dissented in the Court of Appeals, said that the regulations simply requires the state to publicize generally in written form and orally as appropriate the AFDC program and its availability.
The 8th Circuit tried to turn the regulation into something completely different from that.
The lower court held that the regulation requires notice of a specific eligibility requirement that the lower court felt was a particularly important requirement.
The court held that the regulation requires that information be provided to applicants despite the fact that the regulation only... excuse me... to recipients despite the fact that the regulation talks only of applicants and it required that the notice be given periodically.
The Court held that the notice must include a detailed description of the mechanics of an eligibility rule, including examples of the rules operation.
None of those requirements is based on any standard contained in the regulation.
The Court simply constructed those requirements on its own.
Under the 8th Circuit's decision, a state can never know, until after the fact, whether it is given enough information or whether it has effectively implemented a provision of the AFDC program.
The 8th Circuit singled out this one eligibility requirement for this type of notice.
The lower Court's decision can be read to require that kind of notice about every eligibility requirement, although it is not completely clear.
That would be virtually impossible to do and even if it could be done, it would be virtually useless to applicants or recipients to overwhelm them with that volume of information.
The Plaintiffs argue that while the lower Court didn't require this type of notice concerning every eligibility requirement, but that the lower Court's decision is not necessarily limited to the lump-sum statute either.
That there may be other eligibility requirements, as yet unidentified, about which the state has to give that kind of notice.
But when you look at what happened in this case, it is easy to understand why those kinds of gray areas make the situation so administratively unworkable for Minnesota and the other states.
In 1981, there was nothing in the regulation or in any interpretation of the Secretary which would have informed Minnesota that it was even required by law to distribute the informational letter or that it was required to single out one provision of the AFDC program, the lump-sum statute, for specialized treatment in that letter.
And in its AFDC pamphlet, Minnesota had no way of knowing, based on the language of the Federal Regulation or any interpretation of the Secretary, that even though not every eligibility requirement had to be described, the lump-sum statute did have to be described and in great detail.
Under the 8th Circuit's decision, a state has to guess about what information is required, and about which eligibility requirements have to be described.
And if a state predicts wrong, if a Federal Court later disagrees with the state's considered judgment, based on its experience, then the state's implementation of the eligibility requirement is set aside for the past months, or even years, as occurred in this case.
Even if the 8th Circuit was correct in its holding that Minnesota was required to provide more information, the Court's remedy here was certainly improper.
Because Kathryn Jenkins had appealed the termination of her benefits, she received continued benefits during that appeal process and when the appeal was resolved, the county agency notified Jenkins that it would recoup the overpayment that had been made to her by withholding one percent of her monthly AFDC grant.
The 8th Circuit enjoined Minnesota from recouping the overpayment made to Jenkins.
The Court said that since Minnesota had not provided enough information concerning this lump-sum statute, the state had not effectively implemented the statute.
And that Jenkins was not subject to the statute, subject to the eligibility condition established by Congress.
The lower Court ordered that Jenkins was entitled to receive and to retain AFDC benefits, even though Congress had expressly said otherwise.
In the lump-sum statute, of course, Congress had said that when an AFDC recipient received a certain amount of income, the recipient would be ineligible for a fixed period of time.
And Congress did not provide that if the state did not provide advance information concerning the requirement, that it did not become effective and that people weren't subject to it.
And in another of the 1981 OBRA changes, Congress said that if any recipient received more benefits than he or she was entitled to receive, the state was required to recoup that overpayment of benefits.
Unidentified Justice: Mr. Kirwin, is the only named Plaintiff in this action with standing to assert the notice issue, Kathryn Jenkins?
Mr. Kirwin: That is correct, Justice O'Connor.
The Plaintiffs have conceded that and the lower Court found that.
Unidentified Justice: And a letter was given to Ms. Jenkins when, September?
Mr. Kirwin: In September of 1981.
Unidentified Justice: Of 1981?
Mr. Kirwin: Yes, Your Honor.
Unidentified Justice: Which made reference to this lump-sum change?
Mr. Kirwin: It did, Justice O'Connor.
In fact, it included quite a bit of information about the lump-sum statute.
Unidentified Justice: And it is your position that that did constitute written notice, if written notice was required?
Mr. Kirwin: If written notice was required.
In addition to that--
Unidentified Justice: In your responses to interrogatories, in the proceedings below, did you acknowledge that written notice was required to recipients, as well as applicants?
Mr. Kirwin: --Your Honor, I am not certain if that statement would have been made in answer to interrogatories.
Unidentified Justice: The respondents, I thought, said that was the case.
That the responses to interrogatories made no distinction between the notice required to applicants and to recipients.
Mr. Kirwin: Justice O'Connor, I think that what respondents were referring to, was the answers to interrogatories by the Secretary.
Unidentified Justice: I see.
Mr. Kirwin: I would--
Unidentified Justice: Well, you don't answer questions of law in interrogatories anyway, do you?
Mr. Kirwin: --Your Honor, I believe that a party can be asked to state its position concerning legal issues in interrogatories.
Unidentified Justice: And was that what was done here?
Mr. Kirwin: Interrogatories were served on the Secretary and the Secretary's responses, we believe, were quite confusing.
In fact, the two lower Courts disagreed on which side the Secretary was on, on this issue.
The Secretary agrees in this case, though, that his information regulation that we have been talking about doesn't provide that if information isn't given, the eligibility conditions won't be applied.
This Court has recognized in a number of cases that courts can't order the benefits be paid out contrary to the conditions set by Congress for the receipt of those benefits, to remedy mistakes made by government agents.
Even where government agents have provided mis-information, as in FCIC v. Merrill or Schweiker v. Hansen, this Court nonetheless, has said that Congress has established the conditions upon which those monies can be paid out.
An administrative mistake simply doesn't create an entitlement to benefits where a person doesn't meet Congress' eligibility requirements.
That doesn't mean that a Court is without any authority to remedy a state's failure to comply with an information regulation if that kind of obligation exists here.
Certainly the Court could enjoin the state to provide the required information in the future.
But this Court has never gone so far as to order that the benefits be provided to a person who doesn't meet those substantive eligibility requirements.
We believe that the lower Court both misapplied the Secretary's information regulation and that it granted a remedy which was expressly precluded by Federal Law and we ask this Court to reverse the decision of the 8th Circuit.
And, if there are no questions, I will reserve the remainder of my time for rebuttal.
Chief Justice William H. Rehnquist: Thank you, Mr. Kirwin, we will hear now, from you, Mr. Larkin.
ORAL ARGUMENT OF PAUL J. LARKIN, JR., ESQ., ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE IN SUPPORT OF PETITIONER
Mr. Larkin: Thank you, Mr. Chief Justice and may it please the Court?
Congress has not imposed any notification requirements on the Secretaries or on the states, in order to implement the AFDC program.
The Secretary has therefore been required to determine what types of notice the state should be required to give and whether the notices should be uniform throughout the nation.
In undertaking that responsibility, the Secretary's scheme has three parts.
First, applicants, that is a person defined by the regulations who has submitted an application and whose application has not been terminated, must be given information about the basic outlines of the program.
Second, a recipient must be told to inform his or her caseworker about changes in circumstances, so that the caseworker can counsel that person about the effect, if any, those changes in circumstances may have.
Third, applicants and recipients must be given written information explaining why an application was rejected or benefits have been terminated.
The Secretary's scheme leaves considerable discretion to the states, because the circumstances under which the different AFDC programs are implemented, as well as the factors that are relevant to each person will vary from state-to-state and from person-to-person.
There is no reason to believe that the situation under which the AFDC program is implemented, in Minnesota is the same as what it is implemented like in New York City.
There are a variety of different factors that can vary from place-to-place or from person-to-person.
The amount of income or resources that individuals may have, whether individuals are receiving income or resources from some other type of social service program, the number of caseworkers in a community, the caseload those people may have, the ability of a client to reach a caseworker's office to discuss matters with him personally, and the ability of people in a particular locality to understand written or spoken english.
Because these matters can vary greatly from state-to-state, the Federal Government las left the states considerable latitude in deciding how best to implement the information requirements of the AFDC program.
The states, in turn, have to make two judgments.
First, advance written notice to beneficiaries, may not be the most effective way of providing information about the operation of the program.
And face-to-face counseling, counseling over the telephone, or other types of circumstances like that may be far more appropriate.
Some states may decide that the best way to to communicate information to someone is after a person has been accepted into the program, to have that person come in for counseling and at that time, have that person told about a variety of different general obligations and also be told that they should report changes in circumstances to a caseworker.
In other circumstances, a state may decide that written information is better.
And different people can differ as to what is reasonable.
Here, for example, the affidavits submitted by the caseworkers and other personnel who administer the AFDC program in Minnesota, which affidavits are reprinted in the Joint Appendix, indicate that the affiants believed in their experience, the best way to communicate the effect of the program to a person was to tell a person before or after, for example, a lump-sum had been received, about how that may or may not affect his circumstances.
Not every one of the different rules, including the lump-sum rule, will affect every person who participates in the program.
The lump-sum rule is, itself, a contingency certain events have to occur before it affects anyone.
In addition, there is evidence in the record, submitted in one of the affidavits by Petitioner's state officials that at least in one county, that is described as being average in size, somewhere between only one and five percent of the people in the program are affected by the lump-sum rule.
It may also be that not everyone who receives a lump-sum will necessarily have their income reduced as a result.
There may be other circumstances that occurred during the same period.
For example, there may be the unfortunate circumstance that medical expenses might need to be incurred.
The result is, that whether or not a person receives a lump sum, can itself not necessarily affect the eligibility or continued eligibility determination.
In addition, states are entitled to take into account the fact that advance written notice might be costly and every dollar spent on the implementation of the program is a dollar that can't be paid out to beneficiaries.
Unidentified Justice: Mr. Larkin, can I backup for a second?
You described three different categories of notice that you say the Secretary under its regulations must give.
One is applicants about the basic information and the second was recipients were told to contact their caseworker and third, is the statement of reasons when there is an adverse action.
As to the first, which you referred only to applicants, that you are referring are you not, to the regulation which the interrogatory answer that I think Justice O'Connor referred to earlier, described as referring to applicants and recipients.
Mr. Larkin: Let me address that now.
Unidentified Justice: I think it is 206.10(a)(ii).
Mr. Larkin: Right.
There are two answers to interrogatories that are relevant here.
One shows up at Page A-89, and the other is at Page 90 and 91 of the Joint Appendix.
Unidentified Justice: What were the pages again?
Mr. Larkin: I am sorry.
The first one was 89 and 90 to 91.
The second answer we say, states a considerable latitude and are not required to publicize the lump-sum rule in specially developed pamphlets or bulletins.
That is the same phrase that shows up in the subsection I regulation that is at issue in this case.
Unidentified Justice: This is A-89, you say?
Mr. Larkin: Yes, in the Joint Appendix.
No, well, the one I just read was from 90 to 91.
Unidentified Justice: Which of those, just to help?
I have in front of me the red brief at Page 18, which quotes one of these, which is 18 and 19 of the red brief.
I gather that is the one at 89, isn't it?
Mr. Larkin: Yes, that is the one on the prior page.
Unidentified Justice: Okay, I am sorry.
Mr. Larkin: The one at 90 to 91 says, for the subsection I regulation which is at issue here, does not require a state to publicize the lump-sum rule or any other eligibility requirements in specifically developed pamphlets or bulletins.
The term, specifically pamphlets or bulletins, is the term that also shows up in the regulations, subsection I.
Now, at the prior page, I think the problem that resulted was that the answer attempted to answer a question by referring to two regulations, at the very outset of the answer at Page 89, it refers to Federal Regulations at subsection I and 2, so that it is talking about applicants and recipients.
So, I think later on, when the statement says, this would generally include advising applicants and recipients of their obligation, if there is a drafting error it occurred because the sentence was read in light of a completer question.
But it is not the Secretary's position that you have to provide applicants with written information about the lump-sum rule.
Unidentified Justice: I see.
And is it I that refers to applicants and II that refers to recipients, is that how it works?
Mr. Larkin: Yes.
Unidentified Justice: I see.
Mr. Larkin: Then the reasons, those I have explained.
Not every applicant will, of course, be accepted.
And what the Secretary would like is to have people given information about the basic outlines of the program.
And what the Secretary also wants to be sure is that the material is simple and understandable and is therefore, readily accessible to people.
The Secretary, I don't think, would believe that sending a copy of all the Federal statutes and regulations and Social Security action transmittals and state materials, which would in a way, I suppose, arguably satisfy a literal requirement of the rule, which is what the Eighth Circuit has, the way the Eighth Circuit has read it, would be very helpful to people.
After all, the material should be simple and understandable, because the ability of people to contact their caseworkers may differ.
The basic assumption of the system here, is that a person will be able, working with his or her caseworker, to understand how the system affects that person.
The Secretary has felt that it believes that it is not prudent to require that all different types of written material be provided to everyone in the program.
The regulation, itself, subsection I, on which the Court of Appeals relied only applies to applicants.
And even in that respect, we don't believe that applicants should be flooded with a variety of materials.
The Secretary's regulation, we believe, is designed to, or the whole scheme is designed to afford people notice about how this system works, to help them understand what happens when they receive new income.
Giving them a variety of notice in written form may be damaging, because they may not understand how it works.
Unless the Court has any further questions?
Chief Justice William H. Rehnquist: Thank you, Mr. Larkin.
I will hear now from you, Ms. Davison.
ORAL ARGUMENT BY LAURIE N. DAVISON, ESQ. ON BEHALF OF RESPONDENTS
Mr. Davison: Thank you Mr. Chief Justice and may it please the Court.
The question before this Court is whether the District Court and the Court of Appeals properly applied a Federal Regulation which requires that certain information be provided in written form.
And the regulation explicitly requires that information about conditions of eligibility and the responsibilities of applicants and recipients of assistance be included in that information.
Now, the Minnesota Welfare Department does provide certain information in written form.
These are the two pamphlets that are in the Joint Appendix, which are given by the Welfare Department to everyone who applies for AFDC.
If the Commissioner had added one or two sentences about the lump-sum rule in 1981, or 1982, or 1983, or 1984, we would not be here today.
But for some unknown reason, the Commissioner chose not to say a word about the lump-sum rule, in any written information given to anyone who applied for AFDC between October of 1981, when the lump-sum statute went into effect and July of 1985, when the Commissioner complied with the District Court's order requiring that an explanation of the lump-sum rule be provided.
Unidentified Justice: Of course, the particular plaintiff here, if she had contacted her caseworker, as she was supposed to, would have presumably been advised of the rule by her caseworker.
Mr. Davison: Ms. Jenkins, Your Honor, did tell the Welfare Department that she was expecting a lump-sum either from Social Security Disability Benefits, or Workers' Compensation Benefits.
The record is clear on that point and at no point--
Unidentified Justice: I thought that the record was clear that she did not report the lump-sum payment to her caseworker as she was supposed to.
Mr. Davison: --No, Your Honor, I think that is not correct.
What the record indicates is that she got the lump-sum on October 31, 1983, and she was never told that she had to call her worker before she spent it.
She was told in writing, in this pamphlet, that what she had to do was to report it in writing on the 8th of the following month, by the 8th of the following month and she did that.
The problem for Ms. Jenkins is that because she was facing a mortgage foreclosure, she spent the money, she paid her mortgage before calling her worker.
But it is also--
Unidentified Justice: I thought she... the family also received $16,000 in a workmens' compensation lump-sum benefit which was never reported?
Mr. Davison: --Your Honor, that is part of what the Commissioner is claiming and it is part of an attempt by the state to paint Ms. Jenkins as a cheat and that is simply not supported by the record.
It is true that she received a lump-sum payment in December of 1981, or January of 1982, when she was a recipient of the AFDC benefits.
But she says that she did report it.
Unidentified Justice: So you say that is in dispute.
In any event, was there some letter sent in 1981, dated September 18, 1981, that made some mention of the lump-sum rule?
Mr. Davison: Yes, there was, Your Honor.
Unidentified Justice: And Ms. Jenkins received that?
Mr. Davison: Ms. Jenkins presumably received that, but she--
Unidentified Justice: So she did get something other than what was in that pamphlet?
Mr. Davison: --She got something when she was a recipient, Your Honor, in 1981.
Unidentified Justice: Right.
Mr. Davison: She was not a recipient for some eight months in 1982.
She reapplied, she was an applicant for AFDC benefits in November of 1982, and when she applied for those benefits in 1982 she, like all the other people who applied for benefits, after the lump-sum statute went into effect, got no information about the lump-sum statute.
Now, the other thing about Ms. Jenkins is that after getting the September 1981 letter which did mention the lump sum statute, she got a lump-sum and when she... and then went off assistance because her husband's workmens' compensation made the family ineligible for welfare.
When she reapplied for AFDC benefits in November of 1982, she was asked to verify how that lump-sum, the 1981-1982 lump-sum was spent, she provided that verification and she was found eligible.
That lump-sum, despite that September 1981 notice was treated under the prior lump-sum statute.
And so she had every reason to believe that the rule was as it had been in the past... that she could receive lump-sum income, spend it, report it, verify the expenses and then that lump-sum would have no effect on her future eligibility for assistance.
But the key is that she was an applicant in 1982 and was given no information about that.
Unidentified Justice: Ms. Davison, can I interrupt you right there, because there is one fact I am a little puzzled about.
She was a re-applicant was she, in November of 1982, having been off the rolls for how long?
Mr. Davison: She had been off the rolls for eight months.
Unidentified Justice: Well, then was she a recipient in September of 1981?
Mr. Davison: She was a recipient in September of 1981.
Unidentified Justice: So she got the September letter?
Mr. Davison: She got the September letter.
Unidentified Justice: So the fact then, I mean if that were adequate and I know you dispute that, but if that were adequate then she would be on notice of at least the contents of that letter.
Mr. Davison: She was on notice in September of 1981.
Unidentified Justice: Right.
Mr. Davison: But then she got a lump-sum that was treated not under the old lump-sum rule, it was not treated under the new lump-sum statute.
Unidentified Justice: When did she get that?
Mr. Davison: In September of 1981 she got the September letter.
Unidentified Justice: Right.
Mr. Davison: And in either December of 1981 or January of 1982 she got a lump-sum that was treated when she reapplied in November of 1982, eight months later, it was treated, that previous lump-sum was treated as income in the month received and a resource thereafter that did not affect her future eligibility for AFDC.
Unidentified Justice: That was because the program did not go into effect until February of 1982?
Mr. Davison: Exactly, exactly and the state did nothing to tell--
Unidentified Justice: But she did have notice that lump-sums were a matter of special interest to the agency.
Mr. Davison: --For years the program has required--
Unidentified Justice: I understand what it was, but she did have a duty to report lump-sums.
Mr. Davison: --And she did.
She reported her lump-sum on a timely basis.
Unidentified Justice: She reported the second lump-sum--
Mr. Davison: The first lump-sum is not at issue.
The reason that there is a... Justice O'Connor asked about whether, about the $16,000 lump-sum payment, and there is no finding of fact by the District Court on whether or not she reported that lump-sum because it was not relevant to this case.
She was a new applicant in November of 1982, and got no information about the lump-sum rule.
Unidentified Justice: --Well, I don't understand.
On the one hand you seem to be telling me that November 1892 her lump-sum was explained to her and it had been treated under the old rule and therefore, she had a right to rely on it and now you seem to be saying that she did not know anything about it.
Mr. Davison: --She did not know anything about the new rule.
She was not told that the law had changed.
Unidentified Justice: Well, she had been told in September of 1981, though, she had gotten that letter.
Mr. Davison: She was told in September of 1981 that the law had changed.
Unidentified Justice: Right.
Mr. Davison: That letter also said that this is based on current information and we may change our minds.
Unidentified Justice: Well?
Mr. Davison: But she was told in November of 1981 that there was some change but her experience after receiving that letter told her and would have told anyone that you could spend your lump-sum income on debts, report it, verify it, and you would be eligible--
Unidentified Justice: Now, is the only lump-sum that she received that is relevant, the one that she received between the receipt of the letter and the time she reapplied?
Mr. Davison: --No.
She received a lump-sum in October of 1983, a year after she applied for benefits.
Unidentified Justice: And was that lump-sum reported?
Mr. Davison: It was reported, it was reported two days after she received it.
She was told in writing--
Unidentified Justice: But she already spent it.
Mr. Davison: --she had eight days, she had 10 days to report it, or eight days to... excuse me, or she had until eight days into the following month to report it.
Unidentified Justice: And the problem was that she had already spent it in those two days, that is right, I remember it now.
Mr. Davison: Exactly.
And the Welfare Department knew that she was expecting a workers' compensation check or a Social Security disability check and yet, even with that knowledge, they told her nothing about her obligations under the statute to budget and use that money to pay for her family's ordinary living expenses.
What the District Court did here is to say to the Commissioner, Commissioner you violated the regulation, correct that violation.
That was the sum total of the burden imposed by the District Court and affirmed by the Court of Appeals.
And I want to make it very clear what this case is not about.
The Court did not enjoin implementation of the lump-sum statute.
The Court did not hold that any class member was eligible for benefits because they did not get an explanation from some statute.
We are not arguing that an explanation of the statute was a condition precedent to the application of the lump-sum statute.
That is not our position.
Unidentified Justice: Ms. Davison, your opponent says that the District Court in the Eighth Circuit required payments to be made to your clients which were contrary to the Congressional authorization.
What is your response to that?
Mr. Davison: That is not correct, Your Honor, that is not what the Court required.
Kathryn Jenkins got AFDC benefits during her period of ineligibility.
Not because of anything that the District Court did, but because she filed an administrative appeal and Federal Regulations require that you get continued benefits pending an administrative appeal decision.
What the District Court did, or what the Court of Appeals did, was conclude that there had been a violation of law, there had been a violation of the regulation that required an explanation of the lump-sum statute.
And that given that violation, the Court had the authority to fashion a remedy for Kathryn Jenkins and the remedy that was fashioned was an injunction against the state recovering a $5,000 overpayment.
Unidentified Justice: Even though it was clearly an overpayment under the Act of Congress?
Mr. Davison: That is right.
It was an overpayment.
Unidentified Justice: What authority did the Eighth Circuit cite for that proposition?
What of our cases?
Mr. Davison: The Eighth Circuit did not make clear, Judge Arnold did not make clear the basis for that order.
To the extent that the opinion suggests that the basis for that equitable order is that the statute did not take effect and we disavow that position.
It is our position that the Court has traditional equitable powers to fashion remedy when there has been a violation of law, and there was a violation of law in this case.
That there is no statute that--
Unidentified Justice: There was a violation of the regulation, as you contend.
Mr. Davison: --The regulation, that is right.
There is nothing, there is no statute which deprives the Court of the equitable power to fashion a remedy and the Court properly exercised its discretion in fashioning the remedy.
Unidentified Justice: Ms. Davison, the statute not only deprived her of eligibility but there is also an explicit provision in the statute requiring recoupment of overpayments, isn't there?
The Court, in effect, fashioned a remedy that overrode that provision.
Mr. Davison: There is, Your Honor, a statute which governs the relationship between the State and the Federal Government.
It says that if a state wants to get federal funds in the administration of its AFDC program, that the State must have in its state plan a provision that overpayments will be recovered.
Unidentified Justice: I see.
Mr. Davison: But that statute does not purport either in expressed or implicit terms to limit the traditional equitable powers of the Federal Court.
And as this Court ruled in Heckler v. Day, even the Court in Heckler v. Day found that it was clear from Congressional history that Congress did not want a Court to impose time limits on the Secretary in deciding Social Security benefits, but that the Court, in a footnote said, despite our conclusion, nothing in this decision limits a Federal Court from applying equitable principles in an individual case, to apply time limits in an individual case and to award benefits if the time limits are not kept.
Unidentified Justice: I have tried to think of an analog of some other case I could come up with where the Court has fashioned a remedy that specifically allows somebody to do something which a statute prohibits.
And I can't think of one, can you?
And I did not see any in your brief.
Do you know any other example, where a Court has said, because somebody has violated a regulation or because of some other rule, we are going to say you can ignore the statute?
Mr. Davison: Well, Your Honor, in Goldberg v. Kelly the Court said that there must be a right to a due process hearing before benefits are terminated.
Unidentified Justice: That is a Constitutional problem.
Mr. Davison: That is a Constitutional case, Your Honor.
But nonetheless, some of those people would not have been eligible for benefits and at the time, there was no provision for recovering overpayments when the overpayment was caused not by the client error.
And so, as a matter of fact, what happened in that case is that people who may not have been eligible were awarded benefits.
That is the closest analogy that I can come up with.
There may be other cases, Your Honor, but I am not aware of them.
Unidentified Justice: May I go back for a moment to the... your claim depends on there having been a violation of law by the state administrator, at the time of the second application in November of 1982, by failure to explain the lump-sum requirement.
Would in your view, would it have been satisfactory to explain that requirement orally?
Mr. Davison: No, because the Secretary's regulation says that the information must be provided in writing and orally as appropriate.
If the Secretary--
Unidentified Justice: Well, what it says is in writing about coverage conditions of eligibility, scope of the program, and related services available.
I suppose there is some ambiguity in precisely what detail that information has to be given in.
Mr. Davison: --If there is any ambiguity, Your Honor, it seems to me that it is about what information has to be provided but not whether it has to be in writing or whether it can be simply oral information.
Unidentified Justice: Right.
Mr. Davison: So the question of whether or not it has to be in writing, I think, has to be answered in the affirmative.
It has to be because that is what the Secretary said.
Now, if the Secretary, in his judgment, feels that as a policy matter it is more effective to impart information orally than in writing, the Secretary is free to amend that regulation.
Unidentified Justice: But what if, at the time of the application, your client got a pamphlet was it that--
Mr. Davison: That is right, two pamphlets.
Unidentified Justice: --And they are in the record, I gather?
Mr. Davison: They are in the record, in the Joint Appendix.
Unidentified Justice: And do they mention the lump-sum requirements?
Mr. Davison: Not a word.
Unidentified Justice: No mention of lump-sum?
Mr. Davison: No mention.
Unidentified Justice: But, Ms. Jenkins had received the September 18, 1981 letter which did mention the new rule.
Mr. Davison: That is right, but she got nothing at the time that she was an applicant.
Unidentified Justice: Let's assume... so it would not make any difference in your position if the letter she got when she was a recipient was adequate notice?
Mr. Davison: --That is correct, Your Honor.
Unidentified Justice: So you would say that letter is just irrelevant because she should have had another notice when she reapplied?
Mr. Davison: That letter is totally irrelevant to the claim the Plaintiff and her class as to whether the regulation was violated.
It is not irrelevant to the question of balancing of the equities and fashioning relief to the Plaintiff Jenkins.
It would be appropriate for the Court to have considered the fact that she had gotten this notice, just as it would be appropriate for the Court to consider the fact that she got a lump-sum after that, which was treated under the old rule, not the new rule.
But her rights were violated as an applicant, as were the other class members.
Unidentified Justice: Because she got no notice then?
Mr. Davison: Because she got no notice then, even though the Welfare Department knew that she was anticipating the receipt of a Social Security check or Workers' Compensation check.
Unidentified Justice: May I ask one other question?
In the Joint Appendix at A-29 there is one pamphlet and another one at A-31, are those the two she got?
She got both of those?
Mr. Davison: She got both of those.
Unidentified Justice: Okay.
Mr. Davison: And it is not true as Mr. Kirwin suggested that these pamphlets only explain eligibility which are applicable to everyone on the program.
One of the eligibility requirements explained in the pamphlet, I think it is A-29, is that you, one of the child's parents has to have an illness which lasts at least 30 days.
That is an eligibility requirement for benefits under the AFDC program for families who are incapacitated or one member is incapacitated.
And they are less than 2 percent or about 2 percent of the entire AFDC population on that particular program.
The lump-sum rule is applicable across the board in the same way that this is applicable across the board.
It only affects people who have an incapacitated parent.
The lump-sum rule only affects people who happen to receive lump-sum income.
But it only has direct implication for a relatively small percentage of the AFDC population.
If there is any eligibility condition that has to be explained to people, it is the lump-sum rule.
It is not a case, this is not a case about some abstract interest in information.
When Congress enacted the lump-sum statute, it was for the express purpose of imposing the responsibility on AFDC recipients of budgeting lump-sum income and to use it on ordinary living expenses in lieu of AFDC.
Now, that simply is not going to happen unless people know of that responsibility.
And AFDC recipients even in Minnesota live substantially below the poverty level.
They are bound to be under substantial financial pressure to spend lump-sum income quickly.
And telling them about their responsibilities and about the fact that they are going to be ineligible for AFDC for a number of months, at the time of termination is simply too late.
That may be a month after the family got the lump-sum income.
It is especially unfair to somebody like Kathryn Jenkins and other people who had reason to believe that they could spend lump-sum income on legitimate debts and that it would not affect their future eligibility for assistance.
And the Commissioner agreed, excuse me, the Secretary agreed in answers to interrogatories that the operation of the lump-sum statute had to be explained.
Unidentified Justice: Of course most people don't get explanations of changes in law.
I mean, there have been massive changes in the Internal Revenue Code for example and my friendly revenue agent has not advised me what changes there are going to be.
Now, to be sure, that just applies to matters that are not as crucial as getting subsistence payments, but nonetheless, it is the principle of our law that it is up to you to find out what your entitlements are.
Mr. Davison: But we have here, a Federal Regulation which says that you do tell people about the eligibility conditions, you do tell them what their responsibilities are.
And this is clearly a responsibility.
That is what the Secretary said to Congress and that is what the Secretary said in regulations implemented in the lump-sum statute.
This is a responsibility of caretakers.
Unidentified Justice: Do we have to agree with you that applicant and recipient are one and the same in order to agree with you about the regulation?
Or is part of your claim that she did not get a notice when she was a new applicant is that--
Mr. Davison: That is right.
No, I think you don't have to agree with me that applicants and recipients mean the same thing.
The whole issue about whether the regulation applies to recipients as well as applicants is really a very narrow issue and affects only a very minor part of this case.
The District Court ordered that a explanation of the lump-sum statute be given to people who were then recipients of AFDC because as applicants they had not gotten any information.
That was accomplished in November of 1985 and is moot.
The Court ordered that new applicants be given this explanation at the time of application and the applicant/recipient argument would not affect that relief.
The Court also argued that the explanation be given every six months, at the time of redetermination.
What this whole argument boils down to--
Unidentified Justice: --That does not affect the one remaining named Plaintiff, anyway?
Mr. Davison: --That is right.
I would also like to make clear as to the question about the named Plaintiff and the standing of the named Plaintiff, and her adequacy as a class representative, is that there are other class members.
If she is not an adequate class representative, then the case could have been remanded for the substitution of a different Plaintiff.
So that even if the Court feels that the September 1981 notice affects her standing, then it should have been remanded for someone else to intervene on behalf of the class.
The question of whether or not recipients are entitled to benefits boils down to whether the State is required to send one piece of paper which is already prepared to people who are already getting information at their six month eligibility determination so that it is really a very minor issue in the case.
And since the Commissioner never made this argument to the District Court or to the Court of Appeals, it certainly can be affirmed as an appropriate form of relief.
They never claimed that there was any burden and there certainly isn't any burden.
Now, the Commissioner--
Unidentified Justice: Excuse me, I gather that your point is that the requirement for oral consultation is not adequate because you are not required to contact your caseworker immediately upon receiving the lump-sum payment, is that it?
Mr. Davison: --That is right.
Unidentified Justice: So that between the time you receive it and the 8th of the next month, or 10 days, whichever is longer is that--
Mr. Davison: Whichever is shorter.
Unidentified Justice: --Whichever is shorter, you can blow the whole thing and then it is too late.
Mr. Davison: That is right.
And the first answer, Your Honor, is that the Secretary says it has to be in writing, but I agree with the Secretary's determination because the system works on written communication, that is how it is set up.
And it is not adequate to wait until the information is reported and it is reported in writing by the 8th of the following month.
And then the Welfare Department only has to send a termination notice 10 days before the end of, 10 days before the beginning of the following month.
So, a lot of time can elapse.
And it is also very difficult to reach your financial worker.
Very often the phone is busy and people don't have telephones.
The system, unlike the previous case, which did not reflect the real world, this case does reflect the real world, and in the real world of the Welfare Department, Welfare Administration, it makes sense to require that this information be provided in writing.
The Commissioner complains that the decision of the Court of Appeals left too many unanswered questions about the scope and applicability of this Federal Regulation.
If the Court had written a broad decision trying to anticipate all of the questions that might arise, as to the applicability of the regulation, and answered those questions, then the Commissioner would have a valid basis for complaining that as the Commissioner does complain, that the Court over stepped its judicial bounds, and interfered with the administration of the Welfare Department.
That is not what happened here.
Judge Arnold answered the questions that were raised by the complaint in a reasoned and principled manner and if there are questions that require answers, the answers should be provided by the Secretary.
Unidentified Justice: Let me just ask one other question about the specific violation of the regulation was that you treat the lump-sum as a condition of eligibility that should have been explained, is that right?
The pamphlets are okay on coverage and scope of the program but this one condition of eligibility is not adequately explained or is it that the responsibilities of the recipients are not adequately explained?
Mr. Davison: I think it is both, because the lump-sum rule, unlike the vast majority of other rules, is not only a condition of eligibility but also in order to effectuate Congress' intent, imposes responsibilities on welfare recipients.
And that is one way that the Court of Appeals narrowed its decision and this Court could, too, that not all eligibility requirements impose responsibilities on recipients to take affirmative action.
Unidentified Justice: And here, she knew she had to report but she did not know that she had to report before she spent the money?
Mr. Davison: That is right.
And she did not know, even if she had reported, before she spent the money, she may or may not have been told, right then, what she could do with it.
Unidentified Justice: But it seems to me that your case must depend on the assumption that she would have been told, because then the failure of her to report... I mean telling her the responsibility would not have done any good.
Mr. Davison: What we think she should have been told under the Federal Regulation is, in one sentence as this Court indicated in Lukhard, the lump-sum rule requires that if you receive lump-sum income you will be rendered ineligible for the number of months that it would take you to use the lump-sum spending each month no more than your welfare grant.
That is what she was required under the regulation to be told.
Unidentified Justice: Well, the letter pretty much said that but that it is not in so many words, I realize.
But it made it clear that she could be ineligible for a period of months, which would be a change from the old rule.
Mr. Davison: If they had given her this letter, that letter, in November of 1982, or given that letter to anybody who applied for AFDC benefits, any time between the implementation of the lump-sum statute, we wouldn't be here.
They did not give that letter to anyone other than people who were then recipients in September of 1981.
They did not give it to her and they did not give it to the 200,000 families who applied for benefits.
This Court doesn't have to judge the adequacy of that letter.
Unidentified Justice: Ms. Davison, suppose that I disagree with you that the Court can give, can prevent the requirement that she give the money back?
Could I nonetheless uphold the rest of the relief that the Court gave?
I mean the, in particular, the mandate that this information be included?
Mr. Davison: Absolutely.
Unidentified Justice: How can I do that though, because who would have had standing?
She certainly does not have standing to get that relief.
That relief does her no good.
She is already, you know, she is not an applicant any more, she is on the program.
Mr. Davison: No, but she was then, and she continues to be a recipient and as I understand standing, it is a threshold question.
Unidentified Justice: Well, the relief has to benefit the individual that is suing and I don't see how this relief, other than the monetary relief does her a bit of good.
Mr. Davison: She is a representative of the class and the class is an ongoing class of people who apply.
Unidentified Justice: But that is the government who came up here, isn't it?
Mr. Davison: The government petitioned for cert, yes.
Unidentified Justice: And they object to more things than just getting the money back.
Mr. Davison: They object--
Unidentified Justice: And aren't they entitled to, even though there is only one party on the other side?
Mr. Davison: --I am not sure I understand your question, Justice White.
There, I think the ongoing relief that was ordered, it is certainly not moot and there is a class--
Unidentified Justice: But the government is entitled to object to that relief?
Mr. Davison: --Absolutely.
Unidentified Justice: And I don't... do you want to defend it or not?
Mr. Davison: To the relief?
Unidentified Justice: Yes.
Mr. Davison: To the relief for the class?
Unidentified Justice: Yes.
Mr. Davison: Absolutely.
To the relief of Kathryn Jenkins, yes, but not on the basis that she was eligible for benefits, rather on the basis that the Court had the equitable power to fashion a remedy and that the exercise of that equitable power was not an abuse of an abuse of discretion.
Unidentified Justice: Thank you, Ms. Davison.
Mr. Kirwin, you have three minutes remaining.
Mr. Kirwin: Thank you, Mr. Chief Justice.
Unidentified Justice: Mr. Kirwin, may I ask you to tell us what written notice was given to applicants for welfare before 1985 about the lump-sum rule, in writing?
Mr. Kirwin: Before 1985, Your Honor, for the period from 1981 to 1985.
Unidentified Justice: Yes, in writing.
Mr. Kirwin: Okay, applicants weren't given any written information concerning the lump-sum rule with this exception: that applicants filled out the application form, filled out the forms for redetermination of eligibility and there are some examples of those in the Joint Appendix.
They are missing $16,000 that was not reported on the forms that called for it.
Those forms specifically listed lump-sum income and so that applicants knew, even though they may not have known precisely how it would be treated, they certainly knew that lump-sum income was something that had some bearing on their AFDC eligibility.
Unidentified Justice: But got no specific written notice about it until as a result of this lawsuit?
You implemented new information?
Mr. Kirwin: That is correct.
No information other than the forms that--
Unidentified Justice: And do you agree that the regulation of the Secretary does require written notice to be given to applicants?
Mr. Kirwin: --Concerning the lump-sum statute?
Unidentified Justice: Concerning the lump-sum rule?
Mr. Kirwin: We very strongly disagree with that, Your Honor.
The Plaintiffs, the Respondents in their brief, concede that the regulation doesn't require that descriptions be given of all eligibility requirements.
They say that and they say that the lower Court did not say that.
But they say that it would be a good idea that there is something special about the lump-sum statute.
The lump-sum statute certainly has an impact on those families that are affected by it.
Other eligibility requirements have an impact on the families that are affected by them.
The important thing is that the Secretary--
Unidentified Justice: So when the Secretary in response to the written interrogatories said that information, in writing, had to be given to applicants about the lump-sum rule and its operation that was wrong, is that right?
Mr. Kirwin: --Your Honor, I don't believe that is what the Secretary said.
Unidentified Justice: Well, that is on Page 89 of the Joint Appendix.
Mr. Kirwin: Well, Mr. Larkin, I think has explained that and I was perhaps too glib before in saying that the answers were confusing.
I think to an extent they were but it was because the Secretary tried to describe obligations under two different regulations at one time.
I would like to make a brief comment about the remedy issue and the limitations on the lower Court's authority to grant a remedy.
I think Respondents are unclear as to what it was that the lower Court said.
I see that my time is up.
Chief Justice William H. Rehnquist: Yes, it has, Mr. Kirwin, thank you.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 86-978, Gardebring against Jenkins will be announced by Justice Stevens.
Argument of Justice Stevens
Mr. Stevens: Under the Federal Statute authorizing aid to families with dependent children the receipt by a family of a large lump sum a non recurring payment, such a settlement of a personal injury case or something like that, will have an adverse effect on the family's eligibility for future payments.
In this case the respondents received such a payment and they used it to pay outstanding bills before they reported the receipt to the case worker or in charge of their case.
Then they learned for the first time that their eligibility for future benefits had been adversely affected.
They participated in a Federal action seeking a restoration of those benefits on the ground that the failure to tell them through an adequate notice of the consequences of receipt of such payment violated a regulation promulgated by the Secretary of Health and Human Services requiring the recipients and applicants for sucg benefits be given adequate information about conditions of eligibility.
The District Court and the Court of Appeals held that there was a violation of the regulation and granted respondents relief.
We have reviewed the case and the majority determined that regulation was not violated and therefore reverse the judgment of the Court of Appeal.
Justice O'Connor has filed an opinion which dissents in part from our conclusion and she has joined by Justice Brennan and partially by Justice Marshall.
Justice Kennedy has not taken any part in the consideration or decision of the case.