State, Department of Health & Social Services, Division of Public Assistance v. Gross
347 P.3d 116
Alaska2015Background
- Lester Gross applied in December 2011 for federal SSI and Alaska state interim assistance (IA) while his SSI claim was pending; he claimed a serious mental disorder.
- Alaska pays interim assistance to SSI applicants and seeks federal reimbursement for payments made to applicants ultimately found eligible for SSI; AS 47.25.455 requires the Department to pay at least $280/month while SSI eligibility is being determined.
- Department regulation 7 AAC 40.180 directs the Department to determine IA eligibility based on whether an applicant is "likely to be found disabled by the Social Security Administration," and references the SSA listings (step three) among considerations.
- The Department’s adjudicator applied the five-step SSA disability framework and denied IA at step five, concluding Gross could perform other work in the national economy; no vocational expert (VE) testimony was presented at the administrative hearing.
- The hearing officer found the Department failed to meet the step-five burden (no VE or proof of job numbers) and awarded IA; the deputy commissioner reversed, ruling 7 AAC 40.180 incorporates only SSA steps 1–3 for IA determinations.
- The superior court reversed the deputy commissioner, holding the Department must apply all five SSA steps in IA determinations; the state appealed and the Alaska Supreme Court granted review.
Issues
| Issue | Gross’s Argument | Department’s Argument | Held |
|---|---|---|---|
| Whether AS 47.25.455 requires the Department to apply the full five-step SSA disability analysis when determining eligibility for state interim assistance | IA eligibility must track the SSA disability determination process, including steps 4–5 and the burden-shifting at step 5 (so applicants disabled at step 5 should get IA) | The statute and regulation permit a narrower test; 7 AAC 40.180 may incorporate only SSA steps 1–3 and need not replicate procedural burdens (e.g., VE testimony) | Court: Department may not exclude the entire class of applicants who would be found disabled only at SSA step 5; regulation as interpreted to omit steps 4–5 is inconsistent with AS 47.25.455 |
| Whether the Department must carry SSA’s step-five procedural burdens (proof other work exists; VE testimony) when deciding IA | Department must satisfy the practical requirements to avoid excluding SSI-eligible applicants; failure to present VE may render denial unsupported | Department need not replicate all procedural aspects of SSA step 5 to satisfy statute | Court: Department need not exactly replicate SSA procedures, but cannot adopt an interpretation that inevitably excludes step-5 SSI beneficiaries from IA; how to satisfy statute is remanded to Department |
| Standard of review for agency interpretation of regulation governing IA | (Gross) Court should apply independent/substitution-of-judgment review because question is statutory interpretation | (Department) Defer under reasonable-basis review because eligibility determinations implicate agency expertise and policy | Court: Substitution-of-judgment applies; agency gets little deference to new interpretation given lack of longstanding practice |
| Remedy / disposition | Remand for IA award to Gross if criteria met under correct standard | Remand for Department to reapply IA criteria consistent with statute | Court: Affirm in part, reverse in part, and remand to Department for proceedings consistent with opinion |
Key Cases Cited
- Moore v. Beirne, 714 P.2d 1284 (Alaska 1986) (interpreting Alaska IA statute and holding IA continues until final federal decision)
- State v. Okuley, 214 P.3d 247 (Alaska 2009) (administrative procedure issues bearing on Department regulations)
- Bowen v. Yuckert, 482 U.S. 137 (U.S. 1987) (SSA disability framework and burden principles)
- Marathon Oil Co. v. State, 254 P.3d 1078 (Alaska 2011) (discussing standards of deference to agency statutory interpretations)