United States Court of Appeals, Second Circuit.: No. 9, Docket 81-6257
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Scribd Government DocsUnited States Court of Appeals, Second Circuit.: No. 9, Docket 81-6257
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Frederick RIVERS, by his mother and natural guardian, Ellen
RIVERS, Elizabeth McBride, Gloria Saeed, Margaret Demasi,
and Larry Capp, on behalf of themselves and all others
similarly situated, Plaintiffs-Appellants,
Rita Carlson, Alicia Garcia, Ossie Van Osten and Margaret
Haines, on behalf of themselves and all others
similarly situated,
Plaintiffs-Intervenors-Appellants,
v.
Richard SCHWEIKER, individually and as Secretary of
Health
and Human Services of the United States, William Driver,
individually and as Commissioner of the Social Security
Administration, Defendants-Appellants,
Barbara Blum, individually and as Commissioner of the New
York State Department of Social Services, and James
Krauskopf, individually and as Administrator of the Human
Resources Administration of the City of New York,
Defendants-Appellees.
No. 9, Docket 81-6257.
United States Court of Appeals,
Second Circuit.
Argued Sept. 20, 1982.
Decided Nov. 4, 1982.
Jeffrey Abrandt, The Legal Aid Society, Staten Island Neighborhood
Office, Staten Island, N. Y. (Kalman Finkel, Joan F. Mangones, Arthur J.
Fried, Kathleen A. Masters, David Goldfarb, New York City, The Legal
Aid Society, of counsel), for plaintiffs-appellants.
Marion R. Buchbinder, Asst. Atty. Gen., State of N. Y., New York City
(Robert Abrams, Atty. Gen. of the State of N. Y., George D. Zuckerman,
Asst. Sol. Gen., State of N. Y., New York City, of counsel), for defendantappellee Blum.
Michael S. Adler, New York City (Frederick A. O. Schwarz, Jr., Corp.
Counsel, Leonard Koerner, Carolyn E. Demarest, New York City, of
counsel), for defendant-appellee Krauskopf.
Before LUMBARD, MESKILL and CARDAMONE, Circuit Judges.
MESKILL, Circuit Judge:
Plaintiffs and intervenors, on behalf of themselves and all other Supplemental
Social Security Income (SSI) recipients who applied for or received cash public
assistance payments from the Human Resources Administration of the City of
New York (City defendant) and the New York State Department of Social
Services (State defendant) while awaiting approval of their application for SSI
benefits from the United States Department of Health and Human Services
(Federal defendant), appeal from so much of the judgment of the United States
District Court for the Southern District of New York, Duffy, J., as denied in
part plaintiffs' motion for summary judgment and granted in part the
defendants' motion for summary judgment. Jurisdiction is asserted under 28
U.S.C. Secs. 1331 and 1343(3) (1976). The opinion of the district court is
reported at 523 F.Supp. 783 (S.D.N.Y.1981).
The plaintiff class is comprised of elderly, blind, or disabled persons who have
been found eligible on the basis of their income and resources to receive SSI
benefits under 42 U.S.C. Secs. 1381-1383c (1976 and Supp.1982). Because the
determination of SSI eligibility by the Federal defendant often takes more than
one year, many states, including the State defendant, have voluntarily agreed to
provide cash assistance payments to individuals during the period between the
filing of an SSI application and the receipt of initial SSI benefits. Fearful that
states would not provide interim relief without some guarantee of
reimbursement, Congress in 1974 provided a mechanism called the Interim
Cash Reimbursement Program (IAR), 42 U.S.C. Sec. 1383(g) (Supp.1982),
whereby states could recoup interim assistance benefits paid to SSI applicants.
To take advantage of the IAR, a state must (1) enter into a formal
reimbursement agreement with the Federal defendant, and (2) obtain written
authorization from the individual applying for SSI benefits permitting the
Federal defendant to withhold the individual's initial SSI check and pay to the
state an amount sufficient to reimburse for interim assistance provided the
individual, 42 U.S.C. Sec. 1383(g)(1) (Supp.1982).
The plaintiffs filed suit in 1979 alleging that the defendants in implementing
the IAR violated provisions of the Social Security Act and violated the
plaintiffs' due process rights secured by the Fifth and Fourteenth Amendments.
The plaintiffs demanded prospective and retrospective relief.
The plaintiffs' complaint alleged first that the defendants failed to comply with
those portions of the statutes, regulations, and reimbursement agreement that
require notice to be sent to interim assistance recipients detailing the disposition
of their initial SSI benefit check;1 in some cases notice was never sent, in others
notice was deficient in that it failed to provide a detailed accounting of what the
City defendant had retained as reimbursement. Although the City defendant
implemented in 1979 a new notice procedure which satisfied the plaintiffs as
well as the district court, the plaintiffs demanded that satisfactory notice be
provided retroactively to those interim assistance applicants who received
inadequate notice between 1974 and 1979. The district court denied the
plaintiffs' request for an injunction commanding retroactive notice:
5 benefits of retroactive notice at this date are outweighed by the State's interest
The
in promoting the efficient administration of the refund program to all members of
the class in the future. Those recipients who doubt the accuracy of the defendants'
reimbursement computations, including those who received no notice, may request a
fair hearing.
6
523 F.Supp. at 788.
The plaintiffs' complaint also alleged that the City defendant failed to comply
with those portions of the statutes, regulations, and reimbursement agreement
that required the City defendant to pay to interim assistance recipients within
ten working days of receipt of the initial SSI benefit check an amount equal to
the excess of the SSI payment over the reimbursement amount. See 42 U.S.C.
Sec. 1383(g)(4)(A) (1976), 20 C.F.R. Sec. 416.1910(b) (1982). The district
court denied plaintiffs' request for an injunction commanding the City
defendant to remit to the recipient the entire SSI balloon check in the event the
check is not processed within the statutory ten-day period. But the district court
did grant "plaintiffs' motion for order [sic] requiring the defendants to process
the plaintiffs' SSI benefit checks and forward the excess over the
reimbursement amount to the plaintiffs within the statutory period." 523
F.Supp. at 789 (emphasis added).
A denial of injunctive relief cannot be overturned unless the plaintiffs here can
demonstrate that the district court abused its discretion. Kaynard v. Mego
Corp., 633 F.2d 1026, 1030 (2d Cir.1980); S.E.C. v. Bausch & Lomb, Inc., 565
F.2d 8, 18 (2d Cir.1977). An abuse of discretion in this context requires the
absence of a reasonable basis for the district court's decision. 565 F.2d at 18.
9
* The plaintiffs complain that the district court improperly denied their demand
for an injunction commanding the defendants to provide adequate retroactive
notice. But the plaintiffs offer no support for the proposition that a past
violation of due process2 or a past statutory violation requires retroactive relief.
Thus, plaintiffs are left to demonstrate that the district court abused its
discretion. Although plaintiffs have mustered some evidence of present adverse
effects from the past defective notice, they have not demonstrated that the wide
discretion afforded the district court was abused.
10
A federal court "in wielding equity power, ... must weigh competing claims and
determine where a preponderance of the equities lies." Rothstein v. Wyman,
467 F.2d 226, 234 (2d Cir.1972), cert. denied, 411 U.S. 921, 93 S.Ct. 1552, 36
L.Ed.2d 315 reh'g denied, 411 U.S. 988, 93 S.Ct. 2276, 36 L.Ed.2d 966 (1973).
Social benefit programs, including the IAR, are dependent upon the
cooperative efforts of federal, state, and local government. See id. at 232. In
Rothstein v. Wyman, this Court balanced the equities and concluded that the
public interest involved outweighed the private interest:
11
On the balancing issue, appellants argue not only that the administrative costs
involved in the carrying out the court's order will be out of proportion to the
benefits conferred, but will also impose additional strains upon an
administrative mechanism already overburdened by the daily task of coping
with the substantial demands of welfare administration. They also point out that
retroactive payments will go to persons no longer on the welfare rolls, thereby
preventing already inadequate state funds from being channeled to the persons
whose needs are immediate and urgent.
12
We are not insensitive to the special incremental value of money to persons
living at subsistence levels. At the same time, however, we cannot be sure that
the persons from whom funds were withheld in 1969 have a present compelling
need for them, or that it is provident, given existing deprivations which might
be relieved, to order the expenditure of scarce funds as compensation for past
suffering which, however deplorable, cannot be undone.
13
Id. at 234. The reasoning in Rothstein is applicable to the present case. The
defendants argue that providing retroactive notice would be an exercise in
futility which would adversely affect the processing of current applications. We
agree.
II
14
Appellants claim that the district court erred in denying their request for an
injunction compelling the defendants to remit to the recipient the entire initial
SSI benefit check in the event it is not processed within ten working days. This
claim is premised upon two arguments. First, members of the plaintiff class
suffer great harm when deprived of benefits. They face possible eviction from
their homes and loss of the basic necessities of life. Second, plaintiffs argue that
the initial SSI balloon check is an entitlement, the property of the recipient,
which the City defendant cannot retain beyond ten days. Plaintiffs characterize
the City defendant's access to the check as a limited privilege granted by
statute. Thus, once the ten-day statutory period expires, the City defendant is
without legal authority to retain the check.
15
The district court found that "[w]hether or not the [City defendant] is able to
reimburse itself within the ten day period, it must comply with the law and
forward the SSI check to the individual upon the expiration of ten working
days." 523 F.Supp. at 789 (footnote omitted). Accordingly, the district court
enjoined the defendants to "process the plaintiffs' SSI benefit checks and
forward the excess over the reimbursement amount to the plaintiffs within the
statutory period." Id. (emphasis added). The plaintiffs' complaint is that the
district court should have gone one step further and ordered the defendants to
hand over the entire SSI check after ten days.
16
Appellants have failed to demonstrate that the district court abused its discretion
in fashioning the appropriate relief. In conjunction with the relief granted, the
district court established a system for monitoring the defendants' compliance
with the court's orders. As the defendants point out, the plaintiffs retain a
remedy under Rule 70 of the Federal Rules of Civil Procedure should the City
defendant fail to process SSI benefit checks within ten days. Rule 70 is
designed to preclude recalcitrant parties from frustrating court orders and
permits the court upon application of a party to divest title in property within
the jurisdiction of the court and vest it in others. The plaintiffs' complaint is not
that relief was not granted, but that the relief could have been fashioned in a
more effective way. Clearly the form of relief granted is within the discretion
of the district court and cannot be overturned unless it is without reasonable
basis. There was a reasonable basis for the relief granted here. The district
court's rulings are therefore affirmed.
An SSI recipient's initial SSI benefit check is a "balloon check" which includes
benefits retroactive to the date eligibility was determined
The district court did not decide the constitutionality of the alleged deficient
notice or whether it violated 42 U.S.C. Sec. 1383(g)(4) (1976). The district
court did note that "[w]ith only the minimal information contained in the
original notice form, it indeed may have been difficult for the plaintiffs--poor
people who are aged, blind or disabled--to determine whether the figures were
accurate or to effectively challenge the defendants' computations at a hearing
before the agency." 523 F.Supp. at 787
