WASHINGTON DEPT. OF SOCIAL & HEALTH SERVICES v. GUARDIANSHIP OF KEFFELER
The State of Washington, through its Department of Social and Health Services, provides foster care to certain children. It also receives and manages Social Security benefits, which it uses to cover its costs, for many of those children. Such beneficiary children filed suit, alleging that the Department's use of their benefits to reimburse itself for the foster care costs violated the "anti-attachment" provision of Title II of the Social Security Act, which protects certain benefits from "execution, levy, attachment, garnishment, or other legal process." The trial court enjoined the Department from continuing to charge its foster care costs against Social Security benefits and ordered restitution of previous reimbursement transfers. The Washington Supreme Court ultimately affirmed the trial court's holding that the Department's practices violated the anti-attachment provision.
Does the State of Washington's use of foster childrens' Social Security benefits to reimburse itself for some of its expenditures violate the provision of the Social Security Act that protects benefits from "execution, levy, attachment, garnishment, or other legal process?"
Legal provision: Social Security, as amended, including Social Security Disability Benefits Reform Act, but excluding Medicare, Medicaid, Supplemental Security Income, and Aid to Families with Dependent Children
No. In a unanimous opinion delivered by Justice David H. Souter, the Court held that the state's use of the Social Security benefits to reimburse itself does not violate the Social Security Act's anti-attachment provision. The Court reasoned that the Department's effort to become a representative payee and its use of Social Security benefits did not amount to employing an "execution, levy, attachment, garnishment, or other legal process" within the meaning of the provision. The Court also noted that a ruing adverse to the state could disadvantage children in foster care.
Argument of Christine O. Gregoire
Justice Stevens: We will hear argument in No. 01-1420, Washington State Department of Social Services against the Guardianship Estate of Daniel Keffeler.
Justice Kennedy: General... is it Gregoire or Gregory?
Mr. Gregoire: Gregoire.
Justice Kennedy: Gregoire.
Mr. Gregoire: Justice Stevens, and may it please the Court:
The question presented in this case is whether a representative payee, appointed by the commissioner of Social Security, violates the anti-alienation provision of 42 U.S.C., section 407(a), when it uses Social Security benefits to pay for the beneficiary's current maintenance.
The plain text of section 407(a) answers this question, and the answer is no.
Section 407(a) provides that benefits are not subject to execution, levy, attachment, garnishment, or other legal process.
The department here does not use compulsory legal process to obtain benefits.
Instead, the department is appointed representative payee by the commissioner, pursuant to 42 U.S.C., section 405(j), and as payee, the department is under the supervision of the commissioner and uses the benefits to pay for the current maintenance of the beneficiary in accordance with the Social Security regulations.
In short, when looking at the statutes as a whole, 407(a) does not prohibit that which is expressly authorized by 405(j).
The purpose of 407(a) is to ensure that Social Security benefits are available to pay the beneficiary's current maintenance by preventing creditors from taking those benefits.
Legal process, as referenced in 407(a), is the means by which a court, agency, or official authorized by... by law compels compliance with its demands.
It is compulsory legal process.
Here there is no legal process.
The representative payee here stands in the shoes of the beneficiary, sharing in the cost of care, consistent with the Social Security regulations.
Justice Kennedy: Can a set-off ever be legal process?
Suppose there were a tax indebtedness by the beneficiary.
Could the State just under... assuming that its set-off principles allowed it, could the State simply take some of the beneficiary's money from the Social Security and set it off against the tax debt?
Mr. Gregoire: If... the violation of 407(a) comes in... comes into play when there's a legal process that actually attaches to those Social Security benefits.
Justice Kennedy: So you would say there's no 407 violation in that event.
Mr. Gregoire: Correct.
Justice Scalia: Although I presume there would be a cause of action against the State for... for not behaving properly as the... what... what is the... the--
Mr. Gregoire: Representative payee?
Justice Scalia: --As the representative payee within that--
Mr. Gregoire: I believe that's true, Justice Scalia.
The questions that have been presented here by... by the respondents are 405(j) questions as to whether the representative payee acted accordingly within their purview.
Here there is full compliance with the Social Security regulations.
In this particular instance, the department is duly recognized as a representative payee subject to supervision, having to submit constant reports and annual reports and accounting system, and there are audits that have been performed on the department.
It is acting in accordance with 405(j) as rep payee.
Justice Scalia: --And why... why is 405(j) not at issue here?
Mr. Gregoire: Well--
Justice Scalia: Because those points are raised, of course, in the... in your opponent's brief.
Mr. Gregoire: --Yes, Your Honor, but if you... if you look at the complaint in this particular case by... by the respondent, if you look at the certification of the class that's present here, if you look at the holding below, in every instance the question presented is whether a representative payee duly appointed can use the benefits for the cost of care of the beneficiary.
We think the plain text of 407(a) says the answer is there is no violation whatsoever.
Justice Ginsburg: General Gregoire, I'd like to just find out if... let's say we accept your argument this is not a 407 case, and then the question is put, but there are alleged misappropriations here.
For example, there's some suggestion of double dipping and there's some other things which may or may not be right.
I don't know that there is such a thing as a right of any individual to go after the representative payee.
I thought that was something within the Social Security regs.
I thought I heard you say, oh, yes, but that's not a 407 claim.
That would be a 405 claim.
And I was not aware that there is such a thing apart from the administrative process.
Is there some right to sue eventually in court under 405?
Mr. Gregoire: What the Social Security Act provides is one of two things.
It can be done by the commissioner by the removal of the representative payee if they have violated.
It can be done by a court.
But the remedy, if... even if done by a court, is back to the commissioner to remove the representative payee and appoint one that would act in... in accordance with the regulations.
Here, while there are allegations--
Justice Scalia: And who... who can invoke the court's assistance?
Mr. Gregoire: --An individual, the... the beneficiary could.
Justice Scalia: --The beneficiary can?
Mr. Gregoire: Yes.
But here, all of those allegations, one, are not contained within the holding below, but most importantly, there is no record to find any violation of 405(j) in this case whatsoever.
To the contrary.
The department here has acted absolutely consistent with the Social--
Justice Stevens: May I ask you this question related to that?
Do you agree with the position asserted in the dissent, with the State court?
Mr. Gregoire: --We... we do not, Your Honor.
We believe the... the dissent is wrong on... on two bases.
One, the... the court below suggested that there was some use of... of benefits for past debt--
Justice Stevens: Right.
Mr. Gregoire: --when in fact there... that is not the case here and there is no finding to that effect by the lower court.
Justice Stevens: No finding.
Were there allegations to that effect?
Mr. Gregoire: Only after the... the remand and... and the supplemental brief that was submitted in the State supreme court.
But there... in this particular case, what happens, by way of clarification, is when the State of Washington gets a lump sum check for an individual whose SSI, Social Security Title XVI application has been pending, they will then use that check to pay current maintenance for those months for which the child was deemed eligible for SSI and was receiving foster care up to a maximum of 6 months.
That is considered current maintenance, not past maintenance.
We think the... the concurring opinion was confused by that.
Secondly, the concurring opinion says, you--
Justice Scalia: Excuse me.
Why... why do you say it is considered current and not past?
You... you just decide 6 months is a reasonable currency criterion?
Mr. Gregoire: --No.
Justice Scalia: Or is it a regulation or what?
Mr. Gregoire: It is.
It is, Your Honor.
Justice Scalia, what the Social Security regulations put in place with respect to Title XVI benefits, SSI, that anything beyond 6 months by Social Security itself is put into an account and allowed to accumulate interest.
It cannot be used for the current maintenance of the child.
And the second basis... Justice Stevens, the second basis that we think was wrong in... in the concurring opinion is where she finds that you have to look at the extras for the child first, over and above current maintenance, and that we submit to you is in... contrary to the Federal regulations themselves, 20 C.F.R. 404.2040, which expressly provides that you look first to the current maintenance.
That's the very purpose behind both Title II and Title XVI, first to the current maintenance, and then you guess... within the broad discretion accorded a representative payee, you may look to see if there are extras to which those monies could be spent.
Here, the Department of Social and Health Services uses the benefits for both, and the record verifies that.
But let me bring to the Court's attention what we're talking about here.
We're talking about children who arrive in the State's custody through a juvenile court proceeding, having been abandoned, abused, or neglected.
They are subject to the jurisdiction of the juvenile court, and then those children are assessed by an individual service plan as to what their needs are.
And what happens when that assessment takes place is their needs are being met by the department.
In fact, the average payment for foster care for a SSI child is $1,776.
The average amount that an SSI benefit would be is something short of $500.
And the base foster care amount is something short of $500.
The fact is the special needs of these children are being met so their lives can be turned around, they can go back out and be productive members of society--
Justice Kennedy: Well, I... I think we're all interested in the needs of the children.
In some cases, though, I take it that the... that the Social Security payments are being applied to reimburse the State for something the child would get for free anyway.
Mr. Gregoire: --We don't submit, Your Honor... we think that's wrong.
The fact that these children are... are getting foster care doesn't mean it's free.
In fact, the expectation of both Social Security--
Justice Kennedy: Well, I mean free in the sense that the State would pay for it anyway.
Mr. Gregoire: --Your Honor, there is an expectation in State law and an expectation in the Social Security Act that... that what this money is to be used for is the current maintenance of the child.
What would be the difference if we were to submit that it's free in the home of a parent?
A parent surely... and under Washington State law... absolutely is obligated to pay for the child's care and maintenance.
Are we then to suggest that anytime a child in the home of a parent gets SSA or SSI, it can't be used for current maintenance because the parent has to use their own funds for that purpose?
Justice Kennedy: Well, but we're talking about the... the State has a certain... has assumed a certain obligation and made certain payments.
And in the event the representative payee is someone other than the State, the State is going to pay... pay those benefits and... and the SSI will be available for other purposes.
So it's... it's not necessarily always in the best interest for the child.
Mr. Gregoire: But, Justice Kennedy, that would be... that would be the case with a parent.
A parent is obligated to pay for the current maintenance of the child.
Does that mean they can never use their SSA or SSI benefit for the child for the current maintenance of the child?
We think not.
Consistent with the very purpose of the Social Security Act, is... these monies are to ensure that that child gets a minimum income to pay for their current maintenance.
The State shouldn't be treated any different here than a parent would be treated.
Justice Ginsburg: General Gregoire, can I ask you about the person who started all this?
As I understand it, the... the grandmother that the State was trying to displace as representative payee refused to pay anything for the child's current maintenance.
She was putting it away in a kitty for the child's college education.
And I suppose her theory was the State is going to pick up the tab anyway, so I think the best use for these Social Security benefits is to put them in a bank account so one day he can go to college.
Is... and I understand there were two attempts to replace her because she was not spending the money on current maintenance.
When the... when the social service agency is not the representative payee but a relative who doesn't have custody is, is there any means of getting those Social Security benefits used for the current maintenance?
Mr. Gregoire: Not by legal process, Justice Ginsburg, which was a lesson learned by the grandmother, Wanda Pierce, in this case.
The department wrongfully attempted to get at the Social Security benefits by legal process.
That's why there is no appeal of the specific Danny Keffeler case.
Justice Breyer: Why is it wrong?
I mean, this money is there to pay for the child's care and maintenance.
If the grandmother won't pay it, why couldn't the State go to HHS and say, appoint us?
Mr. Gregoire: Well, you--
Justice Breyer: Why wouldn't they do it?
Mr. Gregoire: --You could.
The issue is a 405(j) issue.
The issue is whether that person should be paying for the current maintenance of the child.
Justice Breyer: Why shouldn't they?
Mr. Gregoire: They should.
But what happened in this particular case is Washington State has a specific statutory provision that says if the child has a guardian, the State cannot go in there and then ask to be representative payee.
So there's a violation of State law.
Justice Breyer: Oh, I see.
So there's a particular... a particular State law--
Mr. Gregoire: Correct.
Justice Breyer: --that stopped that.
Mr. Gregoire: Correct.
Justice Breyer: Okay.
Justice Ginsburg: --Is that the basis on which the ALJ ruled?
I thought that was within the Social Security structure.
Mr. Gregoire: The ALJ in the case of Danny Keffeler said that there was no finding that she had wrongfully used the benefits, but went on to suggest at the end that the State hadn't done anything like submit a bill to her showing an expectation that she was responsible to provide for the benefit and care of this child.
Justice Ginsburg: But that wasn't under State law, was it?
That was... that was a Federal--
Mr. Gregoire: That's correct, Justice Ginsburg.
The point being--
Justice Breyer: --Then that's what creates the problem because if you have a State law and the grandmother just says, no, I'm not going to pay this money, which I would have thought was earmarked for that purpose, pretty much, and they won't do it, and then you say, okay, appoint us, and the State says, no, we... we cannot appoint ourselves, and then you say to the grandmother, well, pay us, well, then you really are a creditor in respect to that.
Mr. Gregoire: --Well... and specifically what happened in the case of Danny Keffeler, when the State attempted legal process against Wanda Pierce, that was wrong.
That was a violation of 407(a)--
Justice Breyer: And you're in an anomalous situation, aren't you?
I mean, here... here you have... if you... if you... you're a creditor in respect to the grandmother who won't pay.
I... I don't quite see how to work it out.
There's going to be an anomaly no matter what you do.
You're a creditor in respect to the grandmother, so you can't force the parents to pay.
And you can't go and ask HHS to appoint you because of the State law.
And then there you are in those instances where you did manage to get yourself appointed, and you're now trying to reach a different result than would be there in the other cases.
Mr. Gregoire: --But Justice Breyer, the remedy is the State could go to the Social Security Administration and ask them to consider an alternative representative payee for the child in this case because Wanda Pierce was not providing for the current maintenance of the child as we believe she should.
Justice Ginsburg: And she might have if she had to care for the child.
If she... if the representative payee... if the child is in the custody of the representative payee, then the representative payee has to pay for the child.
Mr. Gregoire: --Under State law, we believe the representative payee should pay for the current maintenance of the child whether in the custody of that individual or not.
The remedy, however, is not by legal process 407(a), but the remedy is 405(j) process by going to the Social Security Administration and asking--
Justice Ginsburg: Which gives it... there's no role for the State court in that.
Mr. Gregoire: --Correct.
Justice Ginsburg: In that 405(j) process.
It's all Federal.
Mr. Gregoire: That's correct.
And with that--
Justice Souter: And under 405(j), when you go to the Social Security Administration, its options are what?
Mr. Gregoire: --To remove that individual as a representative payee and appoint another.
Justice Souter: Put you in.
Mr. Gregoire: If... unless we have a State law, as I indicated in the specific case of Danny Keffeler, would not allow us because she was named guardian.
That's correct, Your Honor.
With that, I would like to reserve my remaining time for rebuttal.
Justice Stevens: Very well.
Argument of Patricia A. Millett
Ms Millett: Justice Stevens, and may it please the Court:
There is no question that the use of Social Security benefits to pay for current maintenance needs by a beneficiary or by a parent as representative payee is permitted under the Social Security Act.
There is no reason that the identical use of funds would suddenly become a prohibited alienation of Social Security benefits just because it's done by a State as representative payee.
The anti-alienation provision of the Social Security Act prohibits the use of judicial processes or similar coercive processes to divert funds away from meeting the needs of a beneficiary.
But there's nothing in the text or the purpose of the anti-alienation provision that supports the Washington Supreme Court's conclusion that it prohibits particular types of payments and expenditures of funds that the representative payee provision of the statute specifically permits.
And that is because... it's very important to understand that when a State serves as a representative payee, it does not receive funds, and it does not spend funds as an interposing claimant or creditor.
Instead, under the Social Security program, it steps into the shoes of the beneficiary.
It cannot act unilaterally.
It has to be appointed by the commissioner and, once appointed, must act pursuant to the commissioner's direction, supervision, and control.
Justice O'Connor: Is... is the issue of whether there was compliance with section 405(j) properly before us, do you think?
Ms Millett: No, it is not, Justice O'Connor.
The question presented is limited to the violation of the anti-alienation provision 407(a).
The complaint in this case is limited to 407(a).
If you look at the joint appendix, page 118, specifically the... the claim for relief, the aforesaid actions violate 42 U.S.C. 407, no allegation of violating 405.
And there would be no basis, I don't think, for the class action.
The class action allegations were based on this general rule of the 407 violation.
If there's particular allegations of misuse in particular cases for particular children, that would be a misuse claim.
It should first be brought to the Social Security Administration.
Justice O'Connor: Do... do beneficiaries of SSI funds have a Federal right that they can enforce through a section 1983 action to have the representative payee act in their best interests?
Ms Millett: What they would do is bring... bring a complaint.
If you're... if you're a beneficiary and you're dissatisfied with the way your payee is spending your money--
Justice O'Connor: Right.
Ms Millett: --then you can bring a complaint with the Social Security--
Justice O'Connor: Would there be alternatively some lawsuit open--
Ms Millett: --They... I think--
Justice O'Connor: --under 1983?
Ms Millett: --I'm not sure whether under 1983, but you could bring certainly a State law conversion out... suit against someone if you thought that they were misapplying your funds.
And... and I assume you're talking about 1983 because we're talking about the State as--
Justice O'Connor: Right.
Ms Millett: --payee, but the vast majority of representative payees are private individuals.
Justice Kennedy: Does... does the State have any set-off rights that private entities don't?
Suppose a private person were the representative payee.
Do they have the same sort of set-off rights for other debts as the State does?
Ms Millett: Neither... make sure I understand what you're talking about by set-off.
But neither private nor State officials would have the right to set off money against... on... on their own unilaterally to--
Justice Kennedy: Well, I'm just talking about 407 now.
I'm just talking about 407.
Because the attorney general indicated that the State could, so far as 407 is concerned, set off a tax debt.
Ms Millett: --I didn't understand that to be her... her response.
But if... but, first of all, you have to ask how you come into possession.
To undertake an offset, you somehow have to be in possession of the Social Security check, and the State and private people would not come into possession of that check unless they're appointed as a representative payee.
Justice Kennedy: I'm assuming there... my... my question is whether... what I'm trying to explore is whether the State has some special advantages that other representative payees might not in the area of being... of being allowed to make certain set-offs to take certain funds.
Because if that's so, then it sounds more like legal process.
That was the--
Ms Millett: I'm sorry.
I misunderstood your question.
I didn't know that they had been appointed representative payee.
Once you are a representative payee, the State and a private payee are in the same position in that when it comes to reimbursing yourself for past debts, as opposed to meeting current maintenance needs, the... you... you are subject to the Social Security Administration's rules.
They have specific POMS and regulations on payment of past debts and--
Justice Kennedy: --In other words, the State of Washington is not relying here on any special statutory authority for set-offs that's applicable only to a State.
Ms Millett: --No, it is not.
What's important to understand here... and I think one of the premises for respondents' position is some confusion about the difference between current maintenance and past debts.
Past debts are defined both in a POMS, the... the interpretive manual done by the Social Security Administration, but also in the regulations on page 216 of the petition appendix, 402.2040(d), when it talks about claims of creditors to be paid by a representative payee.
It... the limitation is on claims that arise prior to the first month for which you become entitled to benefits.
That's what a past debt is.
It would be reimbursed by a payee.
Any debts that arise after you start receiving benefits are current maintenance costs.
So if I get a benefit check for January but for administrative reasons the State does not pay my bills for that month until March, that's not a reimbursement.
That is payment of current maintenance by the January check for January costs.
Justice Stevens: May I... may I ask you a question about mechanics here?
Just the facts are a little hard for me to understand at times.
As I understand it, many of these children are in foster homes and the foster parents are paid by the State.
Is the State agency that pays the foster parents the same agency that receives the Federal check?
Ms Millett: Yes, it is.
There are two different units within... it's the department... in Washington, it's the Department of Social and Human Services that--
Justice Stevens: And the second question I had... there's a lot of discussion in the briefs about something called sweeping, which I don't understand.
Would you tell me what it is?
Ms Millett: --Well, I'm afraid it may have different meanings depending on whom you ask the question to.
But as... as it's discussed by the Court here, the... our understanding is that it... it is this confusion about reimbursement and current maintenance.
What Washington was doing was it would get a check in May that would be a lump sum payment for February, March, April, and May.
And it would go back and apply February's... the... the percentage of that lump sum check that was for February to the February expenses, March to the March expenses.
That is the account sweeping that's talked about in the Court here and that's all that the record talks about.
That is not impermissible.
That is, under our view, the use of... use of this... proper use of these benefits for current maintenance.
The fact that for accounting reasons it happens 4 months later doesn't change anything.
Justice Scalia: What if it happens--
Justice Stevens: --What if it happens 7 months--
Justice Scalia: --even 6 months later?
Justice Stevens: --7 months--
Justice Scalia: --Yes.
Is there a 6-month cutoff on that?
Ms Millett: --With respect to the SSI, the Title XVI benefits, there is... there was after October 1996, and that's why there's some confusion because this case spanned that bridge.
But as of October--
Justice Scalia: It's a little complicated, doesn't it?
Ms Millett: --There's a lot of complicated things here.
But the... but... but for that reason, the fact the commissioner has been administering this program and the representative payee's program since it started in 1939 and it has recognized and endorsed the practice of all 50 States having foster care agencies doing this as not violating the anti-alienation provision is, I think, very important to keep in mind and that adopting the definition of anti-alienation provision, using that to police allegations of misuse under the representative payee system would be very confounding and confusing to the system.
Justice Stevens: May I ask you one question I asked the attorney general too?
Do you also disagree with the analysis in the dissenting opinion?
Ms Millett: Yes, for... for two reasons.
Justice Stevens: The same reasons she gave.
Ms Millett: Well, yes, I think it has again the confusion about past reimbursements which could still be for current maintenance and the payment of past debts.
But the other thing that the Washington Supreme Court's concurring dissenting opinion did was it said you could... you could pay for maintenance, but first you have to pay for special needs.
That gets it exactly upside down.
The... there's much concern here about the best interest... the best interest test here, but the best interest is a regulatory test designed to implement the purpose of these benefits.
And the purpose of these benefits in the case of Danny Keffeler, Title II benefits, is just to replace the income stream of the lost parent.
That parent is legally obliged to pay child support to the State of Washington.
All Washington is doing is what his mother would have been legally obligated to do under... under State law with that same income.
So it's consistent with the purpose of these benefits to use them for what they're doing.
The SSI benefits are minimum income, establish a minimum floor.
All that Washington has said is when the Federal Government--
Justice Stevens: But, of course, there's... there's a statutory restriction on what the... when the money comes from the Federal Government that does not apply when the money comes from the family.
Ms Millett: --On?
Justice Stevens: 407.
Ms Millett: That's right.
But it's important... it's important to understand the limited role of 407.
It said you can't come get these benefits, but it doesn't mean that... that debts and obligations to pay can't arise and that you can't enforce, against the parents who may have other income, child support through other mechanisms.
You just can't come after, through a legal process, the Social Security benefits.
Thank you, Justice Stevens.
Justice Stevens: Thank you very much.
Argument of Teresa W. Roseborough
Mr. Roseborough: Justice Stevens, and may it please the Court:
I think the Court's questions have hit on the key issues here, and I'd like to point out what I believe to be the errors in the State of Washington and the United States' analysis in this case.
I agree with Ms. Millett that the Social Security benefits that the State receives as representative payee on behalf of these children indeed belong to the children.
And in its role as representative payee, the State essentially steps into their shoes to use the benefits to serve their best interests.
The regulation-mandated transfer from a State trust fund account, which is the account in which the State deposits the children's funds when they are received, to the State treasury occurs in the State of Washington because of the operation of the State statute and two regulations, one superseding the other, that mandate that the State shall use those benefits to reimburse its previously advanced costs of care.
There's a singular exception in the regulations that permits a State to advance costs of care to a Social Security disability recipient and then later seek reimbursement out of the paid disability benefits for that care, and that is found at 42 U.S.C., section 1383(g)(1).
That provision specifically provides an exception to the operation of section 407(a), and provides that where appropriate agreements are in place between the State and the commissioner of Social Security and between the State and the individual, that a State may advance costs of care in the period between the application for benefits and the date on which benefits are received and then seek reimbursement out of the Social Security funds for that period of interim assistance.
Apart from that exception, the use of Social Security benefits to reimburse previously avanced costs of care or public assistance is the payment of a debt within the meaning of the Social Security regulations.
Justice Ginsburg: Ms. Roseborough, I want to make sure that I understand what you're saying because it seems to me you're telling us the Social... the food and shelter and clothing must be provided to the child today and tomorrow and the next day.
So the State is paying for that immediately, directly.
The Social Security check for that month comes in a little later.
It comes in a month later.
If I understand what you're saying correctly, when the State takes the check which it gets in March for services rendered in January, it cannot use the... that check to pay itself back for services it rendered in... in January.
Is that what you're saying?
Mr. Roseborough: Yes, Your Honor.
It cannot use that check to pay itself back for services rendered in March or January without complying with the Social Security rules and regulations applicable to the authority to pay a debt.
Justice Scalia: Why isn't the same thing true of the guardian who's been appointed the... the designated beneficiary?
When a guardian gets money, the... the guardian reimburses himself for past expenses.
Is that also the payment of a past debt?
Mr. Roseborough: It absolutely would be the payment of a debt... past debt, and it would be subject to the same restrictions.
Justice Breyer: Why isn't the same thing when you have an EZ pass if you go through the tolls?
One of the kids buys an EZ pass and unfortunately it shows up on his credit card a month later.
Mr. Roseborough: Then the representative payee, having in its possession funds belonging to that child, makes a determination whether or not that is a debt that should be paid in the best interest of the child or not.
Justice Breyer: But if they had to put up a deposit, for example, the State couldn't pay for the EZ pass.
Mr. Roseborough: The State could pay for it if they had, in their possession, Social Security benefits that made that an appropriate expenditure of the funds.
Justice Ginsburg: In their possession.
And let's skip EZ pass and go back to a parent who has custody of her child.
Unknown Speaker: [Laughter]
Justice Ginsburg: A parent has custody of her child.
She pays for that child's food, clothing, and shelter in January.
She gets the check from Social Security in March.
So you're telling me that she cannot use that March check to reimburse herself for money that she spent in January.
Mr. Roseborough: Whether or not the parent could use this child's Social Security benefit check to pay herself for having advanced care to the child in January is wholly dependent on whether or not that reimbursement would be in the best interest of the child at the time the benefits are received.
Ms. Gregoire and the Government misunderstand the regulations.
They cite to 2040--
Justice Ginsburg: No. I just would like to know if... if... as I see it, the State agency is identically situated with the parent.
They're both providing food, clothing, and shelter now, and they will get the Federal check for that food, clothing, and shelter 2 months later, at least a month later.
And if you're saying that then it... they both... the parent, the social agency... they are debtors... creditors.
They're both creditors because they provided the service already?
Mr. Roseborough: --If they... if they are using the... the obligation under the Social Security laws is not to use the month's benefits--
Justice Ginsburg: So the mother gets the check.
Mr. Roseborough: --in the... for the month for which they are paid.
Justice Ginsburg: The mother gets the check in March.
Mr. Roseborough: Then she must--
Justice Ginsburg: And she cannot use that for services that she has or food, clothing and shelter she has bought for the child in January.
Mr. Roseborough: --She has to make a determination in March at the time she receives the benefits as to what expenditure of benefits is in the best interest of the child.
Let's say in the interim between the use of the funds in January to... to pay for whatever items were paid for in January, the child has suffered some event in February or March that requires the expenditure of those benefits or the child needs a communication device or a prothesis--
Justice Scalia: Or that... or that she wants the child to go to university.
Why... why would it not always be in the best of the interest of the child not to pay back his parents and put it into a... a trust account for future education?
It would always be in the... in the better interest of the child than paying off the past debt to the parent.
Mr. Roseborough: --And that's why the Social Security regulations impose stringent guidelines on representative payees that want to use benefits to pay back for things that happened in the past.
Justice Souter: No, but your theory, it seems to me, is there's a choice here, when you apply the best interest test, between a child with a full stomach and no trust fund and a child with a full stomach and a trust fund.
And you're saying the trust fund always wins.
The parent cannot pay back because it's always in the child's best interest to have the trust fund as well as the full stomach.
Isn't that what you're saying?
Mr. Roseborough: Not necessarily.
In fact, the Social Security regulations point out that in the case of a... of a family unit, that is dependent on the Social Security benefits of the children in that unit, that they... those benefits can be used to promote the stability of the family.
And it may be... well be--
Justice Souter: I don't know... I'm not quite sure how stability works into this, but let's... let's forget the exceptional case for the moment.
Save for that exceptional case, aren't you saying full stomach plus trust fund always wins under the best interest test?
Mr. Roseborough: --If the child has a full stomach and if the--
Justice Souter: Right.
That's the... that's the hypothesis: stomach is full, will be full, trust fund or not.
Best interest says, put the money in the trust fund.
Isn't that your position?
Mr. Roseborough: --Absolutely true.
Justice Breyer: Does it bother you that the Social--
--How would you square that--
Justice Souter: --Go ahead.
Justice Breyer: --know how you square that position with a statute that seems aimed at giving children this money so they can pay for room and board and meet their basic subsistence.
Mr. Roseborough: The question is when do you apply the test of current maintenance and using the benefits at the time they are received to provide directly for the care of the child which is the obligation under the Social Security regulations, and when are the regulations with respect to the payment of past debts invoked.
Now, Ms. Gregoire argues... excuse me... General Gregoire argues that it's not invoked for 6 months, and she is relying on the provisions of the code related to certain lump sum benefits that provide additional protection to those benefits.
Solicitor Millett says the same thing relying on section 24(d).
But they are mistaken that... one illustration of their mistake is found in the Social Security Administration's audit of Contra County, California, where the OIG found that that county was using Social Security benefits to reimburse itself for care provided before the benefits were actually received--
Justice Breyer: You've lost me a long time ago because I have a sort of basic question.
It seems to me if a mother or somebody in the family who is the recipient of this extra money coming in from the SSI can use it, has the right to use it to pay a bill that the child ran up for some food or from shelter or, for that matter, EZ pass or tuition... and I... I gather they have at least the right to do that if they want to pay those bills.
Mr. Roseborough: --Not if they want to.
They have the right--
Justice Breyer: They think it's the right thing to do, and so they... yes, they think it's--
Mr. Roseborough: --They think it's in the best interest of the child.
Justice Breyer: --Well, all right.
Let's... let's imagine that doing what you think is right for the child is in the child's best interest.
And therefore you do the right thing which is to pay the bills for food, shelter, tuition, and whatever that the child ran up.
Now, assuming that that's okay, why can't the State do exactly the same thing?
Mr. Roseborough: The State can do exactly the same thing as long as it applies the same test.
As long as it looks at whether or not the use of the benefits to reimburse the debt is the--
Justice Breyer: Okay.
Now I got your point.
--that is the best interest of the child.
Unknown Speaker: Your point is neither the one nor the other can pay... has the right under the statute or under the... to pay these past debts for food, for example.
Justice Breyer: And now my question would be they're the agency.
They know what Congress had in mind.
A naive reading would say Congress had in mind pay these bills for food and shelter, but they know it.
They're the experts.
They know their own regs, and they come in and tell you your reading of this is totally wrong.
Of course, Congress wanted guardians, whether they're States or not States, to pay bills for food and shelter for this child who has no parents.
Now, they say, of course, they wanted that.
There's nothing in the statute that says clearly to the contrary.
So they win.
Now, what's your response?
Mr. Roseborough: One, the Social Security Administration has consistently, prior to its pleadings in this case at least, made the exact same demarcation that we are arguing here.
The Social Security Administration has said that once a benefit payment is received, you look backwards at every debt that occurred prior to that date and judge whether or not that debt can be paid on the basis of whether or not the current and foreseeable needs of the beneficiary have been met and whether or not it's in the best interest of the beneficiary to pay that debt.
As to going forward--
Justice O'Connor: Well, doesn't... doesn't the statute basically leave it to the commissioner to... to evaluate whether a representative payee is acting in the best interest of the child?
Mr. Roseborough: --It does ask the--
Justice O'Connor: And we have a representative of that commissioner here before us today saying that under the statutory and regulatory scheme, that payments such as these for foster care are in the best interests of the child.
Why should we strain to find otherwise--
Mr. Roseborough: --Because the--
Justice O'Connor: --and... and upset what's going on all across the country?
I think your position is troubling for that reason.
Mr. Roseborough: --If I may first respond that factually it's not true that this is what's going on throughout the country.
The facts of the various cases that we know about, through cases that have occurred in the various States, illustrate that they take very different or use very different procedures with respect to the funds.
And we only know of Washington that has a process that compels the State administrator to ignore their obligation to evaluate the best interests of the child at the time the benefit is received and instead make a determination that all of the benefits should be used to pay past debts to reimburse public assistance that was expended without regard to the eligibility of the child for Social Security benefits.
Justice Souter: Well, the representative can be... the representative can be removed if the representative is misappropriating funds or misusing the representative's position at responsibility.
But that has nothing to do with... with the legal process provisions of 407.
Mr. Roseborough: It has to do with that in this sense.
The State argues that section 407(a) doesn't apply to it because it is acting properly as a representative payee.
We contend... and I think we demonstrate in our brief, and the State supreme court in fact held... that Washington was not acting as a properly regulated representative payee within the meaning of section 405(j).
Justice Ginsburg: But that we're... we're told by the Government is none of the State court's business.
I asked that question expressly to find out whether in the Government's view 405 is something that any State court could enforce, and the answer was no. 405 is for... if... if you think the representative payee is not acting properly, you go complain to the Social Security Administration, and it's entirely a Federal law, not any State court that interferes with the representative payee's control.
Mr. Roseborough: I... I believe that her response was that you could bring a State law action, for example, for conversion against the representative payee that failed to administer benefits in accordance with the Social Security Act.
Those Social Security regulations themselves provide that you cannot sue the administration for a representative payee's failure to use the benefits properly, but that you may be able to sue the representative payee themselves.
Justice Kennedy: But... but your answer to my 407 question talked about 405.
I don't... I don't understand that.
Mr. Roseborough: 407(a) clearly prevents a State from using legal process like the administrative regulations here to collect for past expenditures.
Justice Kennedy: Okay.
Why... why is this... why is this legal process?
Mr. Roseborough: It's legal process--
Justice Kennedy: Why is it... why is it something that any representative payee, whether they're a State entity or not, could not do?
Mr. Roseborough: --Because Washington is not making an evaluation that the payment of the debt to itself is in the best interest of the child.
What it is doing is acting pursuant to the compulsion of a regulatory scheme that requires that the first use of the benefits be to reimburse itself.
The Social Security regulations do not state that the use of the benefits to pay current maintenance--
Justice Kennedy: But that's an odd term of the use legal process, unless you're saying any set-off is legal process.
Mr. Roseborough: --A set-off--
Justice Kennedy: Suppose a private entity just sets off an earlier debt against current funds.
That's... that's not legal process in the ordinary sense of the term.
It's a set-off.
Mr. Roseborough: --That would be depending on whether they were doing so by operational law or because of their own volition.
Here the State is clearly acting under what it contended below at least was the volition or the... the obligation of law.
It was saying that the law gave it the right to secure or require the use of these Social Security benefits to pay a specific obligation, that specific obligation being the debt to the State that arose when the State advanced funds for the child's care.
Justice Souter: Well, you're saying that anytime the law provides for action or provides that action will be lawful, that taking that action involves resort to legal process.
Is that your definition?
Mr. Roseborough: I'm saying that anytime the law allows or permits the securing of Social Security benefits to the payment of a specific obligation, that that is legal process or the application of legal process to those benefits in violation of section 407(a).
Justice Souter: But the reasonable word in there I think is securing.
All the State is doing is taking from this account and putting into that account.
And... and I think all the State is doing is saying, under the law, we're able to do that.
The law says we can do that, or at least it doesn't say we can't.
And I think you're saying that whenever the State claims legal authority, it is using legal process within this statute.
Is... is that... isn't that your position?
Mr. Roseborough: No.
My position is that--
Justice Souter: Then I still haven't gotten it.
Mr. Roseborough: --that when the State here acts to transfer the benefits from the trust fund to the State treasury coffers, it does so by presenting a bill, in essence, a statement of account or a statement of expenditures, to the trust fund unit reflecting the past expenditures of the State on behalf of that child.
Essentially it's saying, I have advanced monies for the care of this child and I now want to be paid back out of the child's trust fund unit.
But the obligation of the State, wearing its hat as representative payee of the child, is to make a determination at that point whether that repayment would be in the best interest of the child.
Justice Kennedy: Yes, but you have to go... go on and say what that... why that's legal process.
If the grandmother does it, you would also have to say it is legal process under your view because it's authorized by the common law, I suppose, of the State or maybe by a statutory law.
Suppose you have a statute that says a creditor can set off against an earlier debt money that the creditor receives.
That's not legal process in any... in any usual sense of the term.
Mr. Roseborough: Absolutely it would be, the latter thing that you said, that if a State allowed... if a State statute allowed a set-off against a Social Security benefit to pay a past debt, that would be a violation of section 407(a).
In fact, Federal law provides that even if the United States itself seeks to set off a debt like past due taxes against Social Security benefits, that it has to have a specifically set out in the statutes exception to section 407(a), and that in fact is what exists.
There's a statute that says by express reference to section 407(a) as required by section 407(b) that the United States may set off past due taxes against Social Security benefits.
Absent that statutory authorization or exception to section 407(a), a set-off compelled by law or authorized by law would be within the ambit of legal process or an application of legal process to benefits prohibited by section 407(a).
Justice Souter: Would... would you say the same thing if the State were simply funding the... the cost of food and clothing for the current month and on... on Wednesday it... it paid a bill for groceries and on Thursday it presented this document that allowed the transfer from the trust fund to the... to the State's account?
That too would be legal process?
Mr. Roseborough: That... if it was doing so--
Justice Souter: So the only way the State could do it then, I take it on your theory, is to use the money to pay in advance of its own expenditure a... a fund from which it then could draw under its separate hat to pay the groceries.
Mr. Roseborough: --The presentation of the grocery bill to the representative payee for payment may... and... and the payment that comes as a result of that, may not... may or may not be legal process depending on what it is that authorizes that transaction and whether or not--
Justice Souter: Well, it... it paid the grocery bill on Wednesday, and Thursday it says, we're going to transfer the money to pay the grocery bill.
That's process on... on your theory, isn't it?
Mr. Roseborough: --No, not necessarily.
Justice Kennedy: What's the difference between Wednesday and Thursday and February and March?
Mr. Roseborough: Under my theory, it's clearly a reimbursement.
And as a reimbursement, it then falls under the regulations with respect to reimbursements.
Justice Kennedy: Why isn't it a reimbursement between February and March?
Mr. Roseborough: It is absolutely a reimbursement.
That's exactly what we claim.
Justice Kennedy: Then... then if... if there's legal process for the February/March transfer, there's legal process for the Wednesday/Thursday transfer.
Mr. Roseborough: It's the Wednesday/Thursday process in the hands of a private representative payee not acting under compulsion of law.
Justice Kennedy: I'm... I'm talking about the State.
Mr. Roseborough: There's two--
Justice Kennedy: I'm talking about what we've got here.
Mr. Roseborough: --Acting--
Justice Kennedy: It's legal process when... when we... when we buy the groceries Wednesday and we make the transfer Thursday.
Mr. Roseborough: --Then... but the State of Washington is doing that because it is compelled by statutes and regulations that mandate that it shall use those benefits to reimburse the foster care costs.
If it was not operating... if it was making a choice--
Justice Kennedy: That's true--
Mr. Roseborough: --on Thursday--
Justice Kennedy: --That's true in either instance, isn't it?
Mr. Roseborough: --Not--
Justice Kennedy: I mean, that's... that's a wash, as between February and March and Wednesday and Thursday.
Mr. Roseborough: --That is a wash.
Justice Kennedy: Okay.
Mr. Roseborough: So the question is in both instances on Thursday or a month later, is the use of these benefits to pay for that which has been provided in the past in the best interest of the child.
Justice Kennedy: Okay.
Mr. Roseborough: That--
Justice Kennedy: --then it's... that's why I... I tried to lead to the conclusion... let me try it again... that the only way on your analysis to avoid the implication of legal process would be to set aside funds received from the Social Security Administration in advance for payment for future groceries.
Is that correct?
Mr. Roseborough: --That would be the only way to avoid a reimbursement scenario, would be to use the Social Security benefits first to pay for those things that the child needs.
That would... that would avoid the regulations respecting past debts and reimbursement.
Justice Ginsburg: So you would have no case if you take the Social Security check that you receive in February for January to cover the January period instead of reimbursing the State for what it supplied in January.
It takes that check and puts in the account and says, now, this will cover the March food, clothing, and shelter.
That would be all right, and you wouldn't have any 407--
Mr. Roseborough: And that appears to be what many States do.
For example, it appears from the brief--
Justice Ginsburg: --Even though the check was supposed to be for January and not for April.
Mr. Roseborough: --The check is... the eligibility of the check, if it's an SSA check, is determined by the child survivorship through January.
So that's why it's paid at the end of January.
A disability check, however, is paid at the beginning of the month for which it is intended to be used.
Justice Scalia: So what all this... so what all this litigation will have achieved is just to compel the States to use the current checks that they get for next month instead of for last month.
You... you get maybe a 3-month ride.
I mean, I guess they... they lose 3 months' worth.
But so long as they re-gear up their system so they're paying for next month, all of this will go away.
Mr. Roseborough: They will avoid violation... avoid encroaching or violating section 407(a)--
Justice Scalia: Does that make a lot of sense?
Mr. Roseborough: --It does make a lot of sense because the problems in Washington's administration with accounts, we think, with double dipping, with use of the benefits to pay administrative and programmatic costs instead of to pay for items, food, clothing, shelter, and special needs of the child, could not occur in a system where the Federal benefits were used in the first instance to pay for those things.
Moreover, in Washington--
Unknown Speaker: But why... why--
Mr. Roseborough: --the average payment to a disabled child is less than the guaranteed minimum under Federal law so that this child would at least be assured of the use of the full amount of the Federal benefit to which they are entitled without set-off by the State.
The State could add to it but it cannot, as Washington does, subtract from it.
Justice Souter: --Instead of--
Justice Ginsburg: --Is it not true that... that in the overwhelming number of cases, the Federal benefit is not nearly enough to cover the care of the child, that the... the average SSI payment doesn't make it to cover the monthly needs?
Mr. Roseborough: Nor does the payment that the State makes under its foster care program.
In the... in the case... in the specific case of the State of Washington, the guaranteed minimum payment under Federal Social Security law to an SSI-eligible child averages $715 a month.
The State of Washington pays the... a stipend to the household of that child of some $300 to $400 a month depending on the age of the child.
Justice Ginsburg: But now if we... if we had the new system now where you take the January check and you pay for March or April with it, then the other things that you're complaining about, the double dipping, what you allege... and they may say, no, it's not happening... the proper forum to determine that would be the Social Security Administration.
Wouldn't it be?
Mr. Roseborough: --In this case, the claim was brought under State law against the State of Washington for using the benefits in a way that was inconsistent with Social Security law.
The State of Washington offered as... by way of defense, that it was complying with section 405(j) and that section 407(a) did not apply to it.
But the State law claims for conversion and misuse of the benefits remain and are not dependent on... they're dependent on establishing, as we have, that the State was misusing the benefits, but they're not dependent on the availability of a direct remedy under the Social Security rules.
Justice Ginsburg: There's one... one question that I'd like you to ask because it's really troubling me more than anything else here.
We have a brief from the Children's Defense Fund that says most of these children don't have a Wanda Pierce.
They have no one but the State.
They have no one to make out an application to Social Security Administration.
Were not the State agency operating the way it is operating, there simply would be no benefits, no Social Security, no... no SSI.
There would be that much less available for the care of all these children in the system.
Mr. Roseborough: --This is exactly true that what the State of Washington is doing is using the Federal funds that are intended for the individual benefit of disabled children and children who are SSA recipients to fund the general foster care system.
Justice Ginsburg: I asked you to answer that question.
Is... what the Children's Defense Fund is saying is that because Washington is doing what it is doing... and it is doing it because it's going to get... it's going to get the Federal Government to pay, as these benefits were designed to pay, for the food, clothing, and shelter of the child... that there would be no one to do this and there would be less money in the entire system.
And that's the question I asked you to answer, not another question.
Mr. Roseborough: We believe that States will continue to serve as representative payees even if they're compelled to administer the benefits in a way that is consistent with the Social Security rules.
Justice Ginsburg: What's the basis for that belief?
Mr. Roseborough: The basis for that belief is that the State receives enormous benefit from having available to itself the Federal benefits and being able to expend those benefits in the best interest of the child and to pay for those things that come within the defined needs of the disabled children.
It has no reason to give up that money.
And we don't ask it to.
What we do ask it to do is to administer those funds properly under the Social Security Act and to make a determination, before it uses those funds to fill the State treasury, whether or not or what use of the funds would be in the best interest of the child.
That's exactly what the Social Security Administration has consistently required of representative payees.
In this case where a State had... where a child has already received public assistance, which is in part State and in part federally funded, for a State to use another Federal benefit that the child receives to reimburse the expenditures not only of the State dollars but also of the Federal dollars that were provided to the State under that program for the use of the child is an abuse of the representative payee system.
It is a... and is a disservice to the disabled child.
Social Security disability benefits were intended to provide for the special needs of the disabled child, to assist them in the transition to adulthood, and to provide them some relief from the burdens of their disability.
In the State's concept, as it would use those funds, without any heed to the best interests of the child, no dollar of Social Security benefits received by a disabled child before they reach their 18th birthday would be available to meet those special needs because the State of Washington refuses to acknowledge an obligation under the Social Security laws to determine what expenditure is or is not in the best interest of the child.
2040(d) does not provide that a... any payment of a benefit is current maintenance if... as long as it was for food, clothing, or shelter.
It makes a clear demarcation between... and the example in the regulation makes clear... between benefits that are used at the time they are received to provide for care and benefits that are sought to be used for care that was provided before that.
We simply ask that the Court apply the generally applicable Social Security benefit regulations to the State of Washington's use of the funds for reimbursement.
If there are no further questions.
Justice Stevens: Thank you, Ms. Roseborough.
General Gregoire, you have 4 minutes.
Rebuttal of Christine O. Gregoire
Mr. Gregoire: Where is the legal process in this case?
There is in fact none.
The only thing that's being suggested is reimbursement is the legal process.
In the case of Title II benefits, an individual is eligible in January.
Social Security doesn't pay until February.
That has to be construed as reimbursement.
Counsel's interpretation would then turn the entire program on its ear.
The fact of the matter is that is not legal process.
Unknown Speaker: Your definition of legal process is a process that requires judicial involvement?
Mr. Gregoire: --Judicial, quasi-judicial.
If an individual has the authority by law and... who goes out and... and actually implements something that takes the benefits, but it's more than reimbursement as we have--
Justice Kennedy: Well, that's what your adversary has... has stated, that this is pursuant to authority of the law.
That's why it's legal process.
Mr. Gregoire: --We would submit, Justice Kennedy, if you look at Bennett and Philpott, what this Court found in both those cases was legal process was actual in the one case in implementation of a lawsuit; in the other case, the actual attachment.
We have nothing of that nature here.
We have a simple... in answer to your question about is the State asking for special rights, to the contrary.
The State is simply asking not to be disadvantaged, to be treated no different than any other representative payee which was your holding in Philpott.
So the fact of the matter is here we're simply asking to do that which any parent would do in fulfilling his or her responsibilities in caring for a child.
Let me also, if I can, turn to the... the Social Security reimbursement idea of... of using it in the best interests of the child.
What counsel has suggested is the only thing that's in the best interests of the child is extras.
The State of Washington pays thousands of dollars for these children because they come with psychiatric kinds of needs.
We are not paying the minimum.
We are, in fact, paying significant amounts of money.
In the case of one of our randomly selected children, Nacole Blimka, in one month, over $2,000.
In the case of another randomly selected child, Denita Smith, in one month, over $3,000.
And yes, we held the benefits, got no reimbursement whatsoever, to help Denita Smith be reunited with her parent so that her parent could set up a home, pay for the food and the clothing and shelter that was necessary for that child.
The fact of the matter is the State of Washington does exercise discretion which is accorded it, broad discretion in the best interests of the child.
She would simply ask you only extras are in the best interest.
We would submit supplying food, clothing, shelter is always in the best interests of the child and that is what Social Security suggests.
She indicates that her complaint suggests that there is some State law claims.
To the contrary.
The complaint all the way along has suggested a 407 violation.
She further suggests that R.C.W. 74.13.060, the statute in question here, is mandatory.
To the contrary, it is not.
It allows the State discretion to use Social Security benefits for the special needs of a child and to reimburse the State which is precisely what occurs in this particular instance.
I ask you to return to the question presented.
Is there a violation of 407(a) in this case because a duly designated representative payee, supervised by the Social Security Administration, is using the monies for the current maintenance of the child.
The plain reading of 407(a) to that question is no.
With that, we would ask you, respectfully, to reverse the decision of the Washington State Supreme Court.
Justice Stevens: Thank you, General Gregoire.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 01-1420, Washington State Department of Social and Health Services versus Guardianship of estate of Keffeler will be announced by Justice Souter.
Argument of Justice Souter
Mr. Souter: This case comes to us on a writ of certiorari to the Supreme Court of Washington.
The State of Washington through the petitioner Department of Social and Health Services pays for foster care by providing funds to those who in turn support children removed from their parents custody.
The Department also receives and manages two kinds of federal Social Security benefits on behalf of these children and acting as what federal law calls the representative payee or trustee for many of the children as it is permitted to do under the Social Security Act.
Under Washington State Law the Department generally uses a foster child's Social Security benefits to reimburse itself for the funds that has already dispersed to the foster care providers.
The respondents who are beneficiary children for whom the Department serves as representative payee file this class action in State Court alleging that the Department's use of their benefits to reimburse itself violates 42 United States Codes Section 407(a).
That Section the so-called anti-attachment provision of the Social Security Act protects social security benefits from what the law refers to as execution levy attachment garnishment or other legal process.
The State Trial Court agreed with the beneficiaries that the state reimbursement violated that Section and enjoined the Department from continuing to reimburse itself for foster care costs.
The Supreme Court of Washington affirmed concluding that because the Department's reimbursement scheme involved what it called creditor type acts, it involved a form of other legal process prohibited by 407(a).
In an opinion filed today with the Clerk of Court we reverse.
Because the Department's activities do not involved execution levy attachment or garnishment before specific procedures prohibited by 407(a), the case boils down to whether the Department's use of the benefits involves other legal process.
Although the term other legal process is potentially broad, the statute uses the term restrictively for underestablished rules of interpretation, words in the statute are known by the company they keep.
Thus other legal process should be understood to be processed much like execution, levy, attachment, and garnishment and would seem to require at least some quasi-judicial mechanism by which control over the property passes through one person to another in order to secure discharge of a liability.
This definition is confirmed by the Social Security administration's own interpretation.
Applying the definition, it is apparent that the Department's activities do not involve legal process.
The State has no enforceable claim against its foster children and the Department's scheme operates on funds already in the possession and control of the Department held on terms that allow the reimbursement.
The Department's reimbursement method is permitted under the Social Security administration's regulations and its interpretations of those regs to both of which we owe deference.
In the final analysis, the beneficiaries argumented and the State Supreme Court's holding rest on the view that permitting the Department to reimburse itself for cost it would otherwise bare, violates provisions in the Act and the regulations that require a representative payee to use Social Security benefits in the best interest of the beneficiary.
Although it is true that the State could not directly compel any other representative payee to pay benefits over to the State, that fact does not render the Department's reimbursement practice antithetical to the beneficiary's best interest within the meaning of the Act and the regulations.
For instance, under her authority the Commissioner of Social Security has read the open ended term best interest in light of the Act's basic objectives to provide for a minimum level of income.
Thus, she has decided that a representative payee serves the beneficiary's interest by seeing that basic needs are met not by maximizing a trust fund.
For that matter if the beneficiarie's argument prevail many children would actually lose benefits since eligibility for some benefits is lost if resources creep up above a minimum level.
The opinion of the Court is unanimous.