Malloy v. EichlerMalloy v. Eichler
OPINION OF THE COURT
This is a consolidated appeal from the judgments in two separate class actions, Malloy v. Eichler,
I.
In Malloy, plaintiffs filed a proposed class action against the Delaware state officials responsible for administering and for supervising the administration of the Medicaid program in Delaware [“Delaware state defendants”]. Plaintiffs asked the court to enjoin Delaware’s practice of terminating Medicaid benefits for Delaware children and their caretaker relatives who would have been eligible for AFDC but for section 2640 of DEFRA. The District Court granted the Delaware state defendants’ motion to add the Secretary as a necessary party defendant. The court then entered an order and a declaratory judgment holding that the Secretary’s “practice or policy of deeming the income of siblings or grandparents to individual Medicaid applicants or recipients pursuant to § 2640(a) of DEFRA ... violates Medicaid law now codified at
In Rosado, plaintiffs filed a proposed class action directly against the Secretary and against Geoffrey S. Perselay, the Acting Commissioner of the New Jersey Department of Human Services, as the officials responsible for administering the New Jersey AFDC and Medicaid programs. Unlike the plaintiffs in Malloy, plaintiffs in Rosado challenged the constitutionality of § 2640 of DEFRA as well as its application to Medicaid eligibility. The Supreme Court upheld the constitutionality of § 2640 in Bowen v. Gilliard, — U.S. -,
II.
The Medicaid program was established under Title XIX of the Social Security Act,
Participating states must provide assistance to all individuals specified as “categorically needy.”
III.
The Secretary argues that Congress’ amendment of the AFDC program to treat sibling income as available to all members of a family receiving AFDC should control family income determinations for Medicaid eligibility as well. Understanding the Secretary’s contentions thus requires an understanding of the AFDC eligibility requirements. Like Medicaid, AFDC is funded cooperatively by the federal and state governments, with states administering the program locally and complying with federal requirements in return for federal funding. AFDC is available to dependent children in households where one parent is absent or is physically or mentally incapacitated.
A family applies for AFDC as a family “filing unit.” To qualify for assistance, a filing unit must meet specified standards of financial need.
Among other changes in AFDC eligibility requirements, Section 2640 of DEFRA amended § 402(a)(38) of the Social Security Act,
“A State plan for aid and services to needy families with children must—
“(38) provide that in making the determination under paragraph (7) with respect to a dependent child and applying paragraph (8), the State agency shall (except as otherwise provided in this part) include—
“(A) any parent of such child, and
“(B) any brother or sister of such child, such brother or sister meets the conditions described in clauses (1) and (2) ofsection 606(a) of this title, if such parent, brother, or sister living in the same home as the defendent child and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 405(j) of this title, in the case benefits provided under subchapter II of this chapter)____”
State AFDC officials now automatically treat Social Security benefits or child support benefits received on behalf of one child, as well any grandparent income in three-generation households including a minor parent, as available to the whole family. As a result, many families no longer
The Secretary argues that his official interpretation of section 2640 — that its inclusion of sibling and grandparent income in an applicant’s resources extends to Medicaid eligibility decisions — was issued pursuant to Congress’s broad delegation of authority to him to determine the amount of income available to Medicaid applicants. Appellant’s Brief at 9-13. However, in our review, we must determine whether the Secretary properly construed the scope of his statutory authority in making his decision. See Citizens to Preserve Overton Park, Inc. v. Volpe,
IY.
The Secretary argues that his interpretation of Medicaid eligibility is consistent with the intent of Congress. Specifically, he argues that his interpretation does not contradict
The Secretary’s position has been uniformly rejected in the eighteen circuit and district courts which have considered it. See Georgia Department of Medical Assistance v. Bowen,
The Secretary argues that the decisions in Rosado and Malloy are wrong as a matter of law, because his interpretation accords with the language of
V. The Relevance of Legislative History.
Where the language of the statute is clear, only “the most extraordinary showing of contrary intentions” justify altering the plain meaning of a statute. Garcia v. United States,
A. The Language of the Statute is Plain and Unambiguous.
The plain language of the statute states the Secretary may set standards for Medicaid eligibility provided that these standards
(B) provide for taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient and ...
(D) do not take into account the financial responsibility of any individual for any applicant or recipient of assistance under the plan unless such applicant or recipient is such individual’s spouse or such individual’s child who is under age 21 or ... is blind or permanently and totally disabled
Your committee believes it is proper to expect spouses to support each other and parents to be held accountable for the support of their minor children____ Such requirements for support may reasonably include the payment by such relative, if able, for medical care. Beyond such degree of relationship, however, requirements imposed are often destructive and harmful to the relationships among members of the family group.
H.R.Rep. No. 213, 89th Cong., 1st Sess. 68 (1965). Neither the plain language of the statute nor its legislative history suggests that this provision would nonetheless hold minor children accountable for the medical care of their half-siblings, or grandparents for their grandchildren’s care.
1. Sibling deeming.
The Secretary’s attempt to reconcile his interpretation with this statute is unconvincing. The Secretary argues that the effect of these provisions was fundamentally changed when Congress enacted
A change in statutory language does not necessarily make money actually available
2. Grandparent deeming.
Similar logic explains why grandparent deeming also conflicts with subsection (a)(17)(D) of the Medicaid statute. The Secretary has admitted that grandparent deeming from outside the assistance unit is contrary to (a)(17)(D) and so impermissible. Appellant’s Brief at 25-26. Since the plaintiff classes did not provide examples of Medicaid recipients or applicants denied Medicaid as a result of grandparent deeming, we will treat this as a party admission that grandparent deeming from outside the assistance unit is impermissible. However, grandparent deeming does occur under the Secretary’s interpretation of
The plain meaning of the statute discussed above is particularly likely to express Congressional intent since Congress might have chosen to treat sibling income as part of a common pool in the AFDC context, but not with regard to Medicaid, because of the sharply different nature of the needs served by each program. Food, heat and shelter costs, the stuff of ADFC, are more communal goods than is medical care. A gallon of milk is cheaper per glass than a quart; up to a point, dollars spent on rent can shelter one child or several. Medical care, by contrast, is an individual good: a doctor’s visit, an injection of penicillin, can only cure one patient. Thus, given Congress’s clear expression of its intent that income should not be presumed available to others in the Medicaid context outside the parent-child and spousal relationships, and the significantly different nature of the goods and services involved, the Secretary’s argument that Congress’s expression of its intent in the AFDC context means that “the rules changed” for Medicaid is unconvincing.
B. The Secretary’s Arguments That the Statute is Ambiguous.
The Secretary’s argument that subsection (17)(D) is ambiguous rests on his misleadingly erroneous characterization of the relation of Medicaid eligibility as determined by or “derivative” of AFDC eligibility. Appellant’s Brief at 15-16, 22. Because, the Secretary argues, Medicaid eligibility is derivative of AFDC eligibility, “the lack of explicit reference to Medicaid and the general, long-established linkage be
1. The Relationship Between AFDC and Medicaid Eligibility.
Medicaid eligibility is not “derivative” of, or perfectly coextensive with, AFDC eligibility — as the Secretary’s own regulation shows. The Secretary has promulgated a regulation stating that “[t]he agency must provide Medicaid to individuals who would be eligible for AFDC except for an eligibility requirement used for that program that is specifically prohibited under Title 19 [the title of the Social Security Act concerning Medicaid].” 42 C.F.R. 435.113 (1982). Since DEFRA, sibling deeming is such an eligibility requirement — permissible under AFDC law, explicitly forbidden by Title XIX. The very existence of the Secretary’s own regulation acknowledges that AFDC eligibility requirements do not define eligibility for Medicaid. Moreover, in December 1987, as part of the Omnibus Budget Reconciliation Act, Congress enacted legislation providing Medicaid coverage for pregnant women and some children. This legislation explicitly provides that AFDC eligibility requirements shall not apply to determine the eligibility for this program. In discussing this legislation, the House Budget Committee observed that
[The] AFDC [program features] policies [which] are referred to as stepparent, grandparent and sibling ‘deeming,’ respectively, because the income of these family members is conclusively presumed to be available to the child____ These AFDC stepparent, grandparent and sibling deeming rules do not apply, and have never applied, to determinations of eligibility for Medicaid, however. Medicaid law and regulation have long limited ‘deeming,’ or the attribution of financial responsibility of other family members, to two specific circumstances: spouses are responsible to their spouses, and parents are responsible to their minor children____ The two Federal Circuit Courts of Appeals and the 8 Federal District Courts that have ruled on this issue to date have all concluded, quite correctly, that [the Secretary] is in error.
H.R.Rep. No. 391, 100th Cong., 1st Sess. 446-47, reprinted in 1987 U.S.Code Cong. & Admin.News 2313-1, 2313-266, 2313-267. Whatever the value of these statements as evidence of the correctness of the other court decisions, the Committee’s observations, and the program that it interprets, do indicate that Medicaid eligibility requirements at least in some instances differ from those for AFDC.
2. The Meaning of Silence in Statutory Interpretation.
As noted above, based on his erroneous argument that AFDC eligibility requirements always determine those of Medicaid, the Secretary also argues that Congress’s failure to mention Medicaid in an amendment to the AFDC statute creates a statutory ambiguity. Congressional silence does not connote ambiguity in this case. The relevant maxim of statutory construction is expressio unius exclusio alterius, that is, “the expression of one thing is the exclusion of another,” and may imply an intent to exclude all others. Therefore, if Congress chose explicitly to amend the AFDC requirements, the appropriate inference is that it chose to amend only those, not others. Moreover, the position for which that the Secretary argues amounts to sub silentio repeal of subsection (17)(D)’s prohibition on deeming outside the spousal and parent-minor child relationships. We must assume that Congress was aware of subsection (17)(D) when it enacted the AFDC amendments, see Cannon v. University of Chicago,
VI. The Legislative History Cited By the Secretary.
Since subsection (17)(D) is clear and unambiguous, we analyze the legislative history adduced by the Secretary solely for the “extraordinary evidence of contrary intentions” necessary to support an interpretation contrary to the plain language of the statute. The legislative history stressed by the Secretary consists principally of nonspecific references to Medicaid savings, several of them from the legislative histories of other statutes, and a general observation that Congress enacted DEFRA as part of an attempt to reduce the federal budget deficit. Contrary to the Secretary’s assertion that courts have ignored these references, several courts have considered them, but found them unpersuasive. See, e.g., Vance v. Hegstrom,
Even the Secretary’s “best” legislative argument rests on a strained interpretation of the statute involved. The Secretary invokes Congress’s 1984 amendments to the CSEA to “demonstrate that Congress assumed families losing AFDC eligibility due to the counting of sibling income would lose Medicaid as well.
The language of the House Conference Report that the Secretary quotes is consistent with the interpretation that we have outlined above. The report simply states that “[w]hen a family loses eligibility for AFDC as the result of child support collections, it also loses categorical eligibility for medicaid____ the States must continue to provide medicaid benefits for 4 calendar months____” H.R.Conf.Rep. No. 925, 98th Cong., 2d Sess. 55, reprinted in 1984 U.S. Code Cong. & Admin.News 2397, 2447, 2473. Nowhere does this language explicitly state that the consequence of receiving child support for one child is the loss of Medicaid coverage for others. Congress need not have had this problem in mind. As discussed above, the Medicaid statute specifically prohibits considering the income of a sibling available to an applicant, whereas it does not prohibit the consideration of a parent’s resources, represented by the support sent specifically for the child-applicant in question, in evaluating an applicant’s eligibility. Since a child therefore
The Secretary next points to vague and confusing references to Medicaid savings in estimates of the fiscal impact of AFDC legislation. Firstly, the Senate Finance Committee noted that the Administration is proposing “several changes” in AFDC. They predicted that “[s]ince Medicaid eligibility is linked to eligibility for AFDC, Medicaid savings are also anticipated.” Staff of Senate Comm, on Finance 98th Cong., 2d Sess., Staff Data and Materials for the Fiscal Year 1985, Finance Committee Report Under the Congressional Budget Act 61 (Comm.Print 1984). It is unclear which of the several proposals the Finance Committee intended. For example, one of the AFDC proposals would have made minor parents ineligible for AFDC unless they resided with their own parents), or unless their parents were dead or would jeopardize the health and safety of the minor or her children). The prior practice had permitted any minor parent to apply for AFDC on behalf of her child regardless of where she was living. The new practice would reduce the number of AFDC recipients, assuming that some minor parents continue to be unwilling to live with their own parents and so lose AFDC eligibility. Loss of AFDC eligibility means loss of Medicaid eligibility in many states, unless the AFDC loss is the consequence of an eligibility requirement like sibling deeming specifically forbidden under the Medicaid program. By contrast, requirements that parents support and provide medical care for their minor children (though not their grandchildren) are explicitly permissible under the Medicaid statute. 42 U.S.C. 1396a(a)(17)(D). Thus, this different provision, one of the several, would almost certainly produce Medicaid savings. Since the Senate Finance Committee did not specify which proposal it had in mind, or how exactly the savings would occur, this reference to savings is only ambiguous evidence that the Senate expected the change in the AFDC eligibility requirements to produce Medicaid savings.
The Secretary then cites the comments of the Congressional Budget Office as evidence that the CBO and the Senate
Much of the other legislative history that both sides cite is either from noncontempo-raneous Congresses or consists of references from the legislative histories of other laws. See e.g., Appellees’ Brief at 9; Appellant’s Brief at 20 n. 4. The Supreme Court has noted that “the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.” Waterman S.S. Corp. v. United States,
The language of the Medicaid statute is clear, unambiguous, and contrary to the Secretary’s interpretation. The Secretary has failed to produce any legislative history indicating that Congress wished to repeal or amend this statute. Accordingly, the Secretary’s interpretation exceeded his delegated authority, and its effects were properly enjoined by the district courts. The judgments of the district courts will be affirmed.
Notes
. The Secretary cites this as evidence that the House, Senate and CBO were all in agreement. This statement harbors a further error. The House Ways and Means committee print quoted by the Secretary merely summarizes "Administration estimates" and Administration predictions before moving on to the conflicting estimates and predictions of the Congressional Budget Office. The House did not endorse the Administration’s estimates in this document any more than it endorsed the CBO’s. At best, the paragraph indicates that the CBO and the Administration both expected section 2640 to have fiscal impact — but disagreed diametrically in the Medicaid context as to whether it would lower Medicaid costs or raise them.