dcl9647.htm

Litigation Report 9/96

DC-96-47

October 8, 1996

TO ALL STATE IV-D DIRECTORS

Dear Colleague:

Attached please find OCSE's litigation report that we hope to issue periodically to help keep Central Office, the Regional Offices, and IV-D Directors abreast of cases involving title IV-D of the Social Security Act.

These reports will focus on Federal cases in which the Federal government is a party to the lawsuit, or that may be of particular interest to child support practitioners.

Sincerely,

David Gray Ross

Deputy Director

Office of Child Support

Enforcement

Attachment

cc: Regional Program Mangers

Several years ago OCSE issued a periodic "litigation report" to help keep staff abreast of cases involving Title IV-D of the Social Security Act. The litigation report will focus on Federal cases in which the Federal government is a party to the lawsuit, or other cases that may be of particular note to IV-D practitioners, except that these updates will not include audit-related cases and/or those at the Departmental Appeals Board level.

ATTN: Federal Child Support Program Specialist and Regional Counsel: your input is needed and appreciated. We would like to tailor future issues to your needs. Please send comments/suggestions to: Susan Notar, e-mail: snotar@acf.hhs.gov

fax: (202) 401-5559.

PENDING CASES

Blessing v. Freestone, On May 13, 1996, the U.S. Supreme Court granted certiorari to hear an appeal of the Ninth Circuit Federal Court of Appeals brought by Linda J. Blessing, Director of the Arizona Department of Economic Security, successor to Charles E. Cowan, who held that position at the earlier stages of this litigation.

In Freestone v. Cowan, 68 F.3d 1141 (9th Cir. 1995), the Ninth Circuit reversed the decision of the district court and held that 42 U.S.C. 1983 could be used to enforce rights under Title IV-D of the Social Security Act. Section 1983 authorizes suits by individuals against those "acting under color of State law," for violations of Federal law and the U.S. Constitution. In Freestone, parents brought a class action suit pursuant to both 42 U.S.C. õ 1983 and Title IV-D, claiming that Arizona's

child support enforcement administration systematically failed to furnish them with federally mandated services, including locating obligors, establishing paternity, and making $50 pass-through payments due families. In its petition for certiorari, Arizona requested the Supreme Court to grant review in the case because of the conflicting decisions in other Federal circuits. Both the Sixth and Eleventh Federal Circuits have refused to allow private õ 1983 actions to enforce Title IV-D see Wehunt v. Ledbetter, 875 F.2d 1558 (11th Cir. 1989), cert. denied sub. nom., Brown v. Ledbetter, 494 U.S. 1027 (1990); and Carelli v. Howser, 923 F.2d 1208 (6th Cir. 1991); while the First, and Eighth Circuits have allowed private causes of action against State officials, see Albiston v. Maine Comm'r of Human Svs., 7 F.3d 258 (1st Cir. 1993); and Howe v. Ellenbecker, 8 F.3d 1258 (8th Cir. 1993). What is particularly interesting about the Court granting cert. in this case, is that it already denied cert. to another child support case involving 42 USC 1983, McClaran v. Davis, 909 S.W. 2d 412 (Tenn. 1995), rev. denied, US (April 1, 1996). In McClaran, the Court denied review of a Tennessee Supreme Court decision, holding that individual plaintiffs have a private cause of action under 42 USC 1983 to enforce their rights to child support services undertitle IV-D of the Social Security Act, when the State violates its obligations to them under title IV-D. The Tennessee Supreme Court held that such a cause of action exists even when the State is in "substantial compliance" with title IV-D.

The new term of the Supreme Court begins in October. To date, at least thirty five States have joined an amicus brief supporting Arizona's position in the lawsuit.

Lockwood et al. v. Wessman and Shalala,

Christine Lockwood and Agnes Vondall filed this class action suit against Henry Wessman, Executive Director of the North Dakota Department of Human Services, and Donna Shalala, Secretary of the U.S. Department of Health and Human Services, in late 1993. They brought suit on behalf of their children and all North Dakota recipients of AFDC and their children, or applicants for non-AFDC child support services from North Dakota whose noncustodial parents reside on native American reservations. The plaintiffs alleged that the defendants failed to comply with Title IV-D of the Social Security Act, by refusing to provide them child support services in cases in which the noncustodial parent resides on North Dakota Indian reservations, despite the availability of tribal courts. The plaintiffs claimed that the defendants violated their rights to equal protection by not pursuing noncustodial parents residing on reservations. They alleged further that the Federal defendants did not oversee North Dakota's operation of its child support system.

In April, 1995, a settlement conference was held, but no agreement was reached. During discovery, interrogatories were sent to, and completed by, the Federal defendants.

On March 11, 1996, the State moved for summary judgment. It acknowledged that the child support needs on North Dakota Indian reservations are not being met adequately, but claimed that because of the sovereign status of Indian tribes, the relief that can be ordered should be limited to that of Howe v. Ellenbecker, 774 F.Supp. 1224 (D.S.D. 1991); 796 F.Supp. 1276 (D.S.D. 1992); aff'd, 8 F.3d 1258 (8th Cir. 1993), cert. den. (1994).

Howe involved facts similar to Lockwood. Plaintiffs brought a class action suit under 42 U.S.C. õ 1983 against the Secretary of the South Dakota Department of Social Services, the Program Administrator of the South Dakota Office of Child Support Enforcement, and the Secretary of the Department of Health and Human Services, claiming that the State made no attempt to establish paternity or enforce support because the fathers lived on reservations. In March, 1992, the Federal District Court ordered that the State must use every "reasonable effort" to negotiate a cooperative agreement or purchase of service agreement in South Dakota. The Court ordered the Federal government to help the State co-author a letter to each tribe advising it of the benefits of the IV-D program and details about the program and proposing a meeting to describe the program and answer any questions the tribes may have about it.

The plaintiffs filed a brief in opposition to the State's motion for summary judgment. The plaintiffs argued that the remedy in Howe has been ineffective in South Dakota. They called for an evidentiary hearing for the Court to determine the appropriate remedies it should order.

Buffington v. Alaska, (No. A96-087-CIV). In March, 1996, the plaintiffs brought a 42 U.S.C. 1983 class action suit against Steve Henigson, ACF Administrator RO X, Glenda Straube, Director, Alaska Child Support Enforcement Division, Wilson Condon, Commissioner, Alaska Department of Revenue individually and in their official capacities. The plaintiffs claimed that Alaska's practice of collecting interest on out of State child support orders, violated their rights to due process and equal protection under both the Federal and State Constitutions. The plaintiffs requested a permanent injunction of the State practice, and a monetary award of $50,000.

Doe v. Gallant, (Mass. 1996), In November 1995, HHS approved Massachusetts' request to waive Federal cooperation requirements. When HHS approved the waiver Massachusetts also implemented a new paternity establishment requirement. Under its new paternity policy, custodial parents had to provide specific, verifiable information about the father, including his full name and Social Security number, or his full name and at least two of the following pieces of information: 1) date of birth, 2) address, 3) telephone number, 4) employer's name and address, 5) the names of both of his parents, or 6) the make, model, and license number of his motor vehicle. If the custodial parent could not provide the information, Federal sanctions applied, including loss of public assistance benefits. In March 1996, plaintiffs filed suit to enjoin the State from using its new paternity policy, and in April 1996, a State court entered a preliminary injunction against Massachusetts from using the new procedure.

Smyth v. Carter, 168 F.R.D. 28 (D.C. W.D. Va. 1996). HHS approved Virginia's waiver request to impose a one-month full-family sanction in July, 1995. HHS did not specifically approve a waiver for Virginia to change its cooperation standard, but Virginia approved a new paternity policy in July of 1995 as well. Under its new policy, public assistance recipients had to cooperate in establishing paternity and child support by providing the father's name, and three pieces of identifying information such as his 1) Social Security number, 2) race, 3) date of birth, 4)vehicle license plate and number. Virginia allowed public assistance recipients to claim the good cause exception, but required those alleging that they'd been raped to verify their allegation through a medical or police report. Victoria Smyth and Patricia Montgomery (pseudonyms), claimed that the Virginia Department of Social Services (VDSS) denied or reduced their AFDC benefits because the agency deemed them "noncooperative" for failing to identify their children's father. The women alleged that their failure to provide VDSS with the information it sought wasjustified because they did not know, and could not learn, the identity of the fathers. The two women brought suit against Clarence Carter in his official capacity as Commissioner of the VDSS, and administrator of the AFDC program. Plaintiffs moved for a preliminary injunction to enjoin the defendant from denying benefits to AFDC applicants or recipients who neither know nor can ascertain paternity. They claimed the Virginia policy violated õ 401 of the Social Security Act (42 U.S.C. õ 601 et seq.) regarding cooperation, and the Equal Protection Clause of the Fourteenth Amendment.

The U.S. District Court for the Western District of Virginia granted the preliminary injunction. It reasoned that the plaintiffs and their children would suffer irreparable injury by losing benefits under the AFDC program. The court further opined that Virginia ignored the relevant Federal regulation, 45 CFR õ 232.12(b) by not accepting the women's "attestation" that they did not know the father's identity, which, under the regulation, is supposed to create a presumption of cooperation that may be overcome by a showing that the attestations were false, a showing the State did not make. The court did not reach the plaintiff's Equal Protection Claim given its finding that plaintiffs would be likely to prevail on their statutory claim.

HOLDINGS

Child Support Recovery Act

During the past year, two Federal District Courts have examined the constitutionality of the Child Support Recovery Act (18 USC 228), and upheld it, see U.S. v. New Hampshire, 892 F. Supp. 1327 (DC Kan. 1995); U.S. v. Sage, 906 F. Supp. (DC Conn. 1995); while three others have found it unconstitutional see U.S. v. Musari, 894 F. Supp. 1360 (D.C. Ariz. 1995); U.S. v. Schroeder, 894 F. Supp. 360 (D.C. Ariz. 1995); U.S. v. Parker. The CSRA makes it a Federal crime for a parent to willfully fail to pay child support that is a year old or $5,000 overdue for a child who lives in another State.

In U.S. v. Sage, the U.S. District Court for the District of Connecticut held that the Child Support Recovery Act (CSRA) is constitutional, not an improper exercise of Congress' commerce power. The court reasoned that the CSRA fell within activities that have a "substantial relation to interstate commerce" and one which Congress could properly regulate under the Commerce Clause of the U.S. Constitution. The court noted that interstate child support cases are responsible for an estimated $14 billion in uncollected child support, and there is a rational basis for the conclusion that nonpayment of past due support obligations substantially affects interstate commerce.

In U.S. v. Musari, 894 F. Supp. 1360 (D.C. Ariz. 1995), the U.S. District Court for the District of Arizona held that the law is an unconstitutional exercise of Congress' authority under the commerce clause. It reasoned that collecting past-due support affects "non-commercial" activity, and rejected the government's argument thatthere is a sufficient nexus with interstate commerce because the act requires the obligor and the child to live in different States. See also U.S. v. Schroeder, 894 F. Supp. 360 (D.C. Ariz. 1995). In U.S. v. Parker, the U.S. District Court for the Eastern District of Pennsylvania concurred with the above cases, noting that while nonpayment of child support where the obligor and dependent child live in different States does have an interstate component, it has no commercial component. The court therefore struck down the law as violative of the Commerce Clause.

Last August, President Clinton issued a statement criticizing the Schroeder and Musari decisions. He said:

On July 26, 1995, the United States District Court for the District of Arizona struck down the Child Support Recovery Act as an unconstitutional exercise of congressional power. I respectfully disagree with this decision. I asked the Justice Department to review this case and the department has filed a motion asking the court to consider its decision.

The Child Support Recovery Act gives us the power to punish deadbeat parents who cross State lines to avoid paying child support. It is essential for federal law enforcement to have this authority because the States cannot bring these criminal to justice--especially the "hard core" group of parents who flagrantly move from State to State to evade their obligations.

A child should be able to expect the most basic support from those who chose to bring that child into the world. Parental responsibility does not end at the State line. The taxpayers of America should be able to expect that the burden of caring for these children will be placed on the shoulders of the parents--where it rightfully belongs.

Native American--Jurisdiction Arizona v. Zaman, 22 FLR 1239 (April 2, 1996). Arizona sought to establish paternity and child support for Sahira, a child eligible to be enrolled as a member of the Navajo Nation. While the mother, Barbara Wilson, is a member of the Nation, the alleged father, Akhtar Zaman, is not. At the time of the trial, Sahira lived with her mother in Window Rock, Arizona, which is located within the Navajo Nation's boundaries. The alleged father moved for the Superior Court to dismiss the case, alleging that it lacked subject matter jurisdiction to hear it. The Superior Court denied his motion, determined that Zaman was the father, and set a monthly child support award. Zaman appealed the decision of the Superior Court, arguing that the Superior Court's action infringes on the right of the Navajo Nation to make and live by its own laws.

On appeal, the Arizona Court of Appeals reversed the finding of the Superior Court, holding that the State's action to establish paternity and obtain child support infringed on the Nation's right to make and live by its own laws. The Court of Appeals noted that the Indian Civil rights Act (25 U.S.C. 1301), required States wishing to assume jurisdiction over Indian tribes to first obtainthe tribes' consent. Arizona did not. The Navajo Nation has historically been treated as a Sovereign entity. On the reservation it has the right of self-government and the ability to adjudicate civil actions occurring within the reservation in its tribal courts. The court reasoned that both the child and the mother are Navajo, and Ms. Wilson's and Mr. Zaman's relationship took place on the reservation. The court also noted that Ms. Wilson did not receive public assistance, so that the State did not have "significant" or "substantial" contacts with the State outside the boundaries of the reservation.

Gray v. Comm'r of Rev., 442 Mass. 666 (1996). In June, 1993, Georgette Vogel, applied for child support services for her son Jerry who was born in 1979. The Massachusetts Department of Revenue ("department") filed a paternity establishment action against Kevin Royce Gray. In December, 1993, a Probate Court judge held that Gray is Jerry's father, and that he owed $17,160 in past due child support. The judge ordered Gray to pay $110 per week in current support and $25 per week toward the arrears, through wage withholding. In March, 1994, the department notified Gray that, if he did not pay the arrears in full within thirty days, it would attach a lien to his property, despite the fact that Gray regularly paid his court-ordered amount. In February and March, 1994, the department sent notices of assessment to Gray. On April 13th, 1994, a new law took effect in Massachusetts, regarding seizure of amounts to satisfy unpaid child support. On April 22, 1994, the department seized $100 from his bank account, and $5,187 from his individual retirement account (IRA). Mr. Gray then moved to hold the department in contempt, and obtain both his assets and declaratory relief. The case was reported to the appeals court, and the Massachusetts Supreme Court then transferred it to its jurisdiction.

Mr. Gray challenged the levy and seizure on several grounds. He argued first that because the notices of levy were sent before the amendment's effective date, the unamended version of the Massachusetts law applied, while conversely, the department claimed that because the amendments were in effect when the seizure took place, the amended version applied.

The Supreme Court of Massachusetts ruled in favor of the State on this point. It relied upon case law holding that civil statutes regulating practice, procedure, or evidence, as opposed to substantive rights, may be applied to pending actions, and therefore, it was appropriate to use the amended version of the statute.

Mr. Gray also challenged the seizure of his property on separation of powers grounds. He alleged that the probate court's ability to levy on an obligor's property to recover unpaid past due support is among the inherent powers of the probate court that may not be legislatively curtailed by allowing the department to exercise this power. He further claimed that the department's seizure of funds represented an unconstitutional executive modification of a judicial order because the probate court had already ordered Mr. Gray to pay $25 a week toward his child support arrears. The Massachusetts Supreme Court did not agree. It noted that the circumstances of the case did not demonstrate that thepower to levy for child support is vital to the power of the Probate court, or to its ability to decide cases. On Mr. Gray's second separation of powers argument, the court relied upon case precedent and a policy interpretation of a Massachusetts statute to hold that the department's action did not infringe on the powers of the judiciary.

Mr. Gray also claimed that he was denied due process. The court noted the elements of due process provided Mr. Gray: a trial was held at which a judge determined the amount of Gray's arrears before the seizure of the assets took place; the State provided him with notices of levy and assessment; and Mr. Gray used the post deprivation proceeding to challenge the seizure.

Pennsylvania v. U.S. Dept. of Health and Human Svs., No. 94-3692 (3d Cir. 1996).

In 1990 Pennsylvania enacted a law imposing a $5.00 judicial computerization fee (JCP) on all initial court filings. The fee was to provide a funding source for computerizing Pennsylvania's court system. This system did not include the computerization of the child support system.

In 1993, Secretary Shalala, U.S. Department of Health and Human Services (HHS), notified Pennsylvania that she would treat the fees collected on child support cases as "program income", and she notified Pennsylvania that she would disallow $102,241 in claims Pennsylvania made for Federal funding under the IV-D program. The Secretary relied on 42 U.S.C. õ 655(a)(1), for the authority when States determine the amount the IV-D agency spent during a quarter, they must exclude an amount equal to the total of any fees collected or income resulting from services provided under the State plan.

Pennsylvania appealed the Secretary's disallowance to the HHS Appeals Board. The State argued that the funds were not program income, and were not used to computerize family court cases. The State also challenged the Appeals Board's authority to decide the appeal, and it alleged that the Board members were appointed in violation of the Appointments Clause of the U.S. Constitution.

The Appeals Board rejected the State's arguments. It held that the JCP fee were charged as initial filing fees in IV-D cases, and generated by IV-D services. It assessed an additional disallowance of $28,861 in Federal funding.

Pennsylvania next filed a complaint with the United States District Court for the Western District of Pennsylvania, seeking judicial review of the Appeals Board's decision upholding the disallowances in Federal funding. The State also sought declaratory and injunctive relief alleging that the members of the Appeals Board had been appointed in violation of both the Appointments Clause of the U.S. Constitution, and Federal civil service rules, and a remand to the Appeals Board for it to consider a PIQ that Pennsylvania recently discovered. The district court granted summary judgment for HHS on all counts.

Pennsylvania appealed the district court's decision to the United States Court of Appeals for the Third Circuit.

The Third Circuit affirmed the district court's holding. Itopined that the appointment of the members of the Appeals Board violated neither the Appointments Clause of the Constitution, nor the Federal Services Rules, because the members are "inferior officers" for the purposes of the Administrative Procedures Act, and within the appointment power of the Secretary. The third circuit also held that the JCP fees are program income. It analyzed both the relevant statute 42 U.S.C. õ 655(a)(1), and regulation 45 CFR õ 304.50(a), and noted that under both, sums that would not have been raised without a State's IV-D services constitute "program income" not subject to Federal financial participation. The court noted that the fees Pennsylvania collects $5 from either the obligee requesting IV-D service, or the obligor when the child support case is filed with a court, should still be treated as program income even though the State does not use the funds in the IV-D program. It denied the State's request for a remand to the Appeals Board, noting that the new evidence the State referred to, OCSE-PIQ-88-5, was not new evidence, but public information that the State did not discover in its initial research.