SANDRA GARDEBRING, COMMISSIONER OF THE MINNESOTA DEPARTMENT OF HUMAN SERVICES, PETITIONER v. KATHRYN JENKINS No. 86-978 In the Supreme Court of the United States October Term, 1987 On Writ Of Certiorari To The United States Court Of Appeals For The Eighth Circuit Brief For The United States As Amicus Curiae Supporting Petitioner TABLE OF CONTENTS Question Presented Interest of the United States Regulatory provision involved Statement Summary of argument Argument: The Secretary's regulation does not require states to provide detailed written notice of the operation of the lump-sum rule to AFDC beneficiaries Conclusion REGULATORY PROVISION INVOLVED 45 C.F.R. 206.10(a)(2)(i) provides as follows: Applicants shall be informed about the eligibility requirements and their rights and obligations under the program. Under this requirement individuals are given information in written form, and orally as appropriate, about coverage, conditions of eligibility, scope of the program, and related services available, and the rights and responsibilities of applicants for and recipients of assistance. Specifically developed bulletins or pamphlets explaining the rules regarding eligibility and appeals in simple, understandable terms are publicized and available in quantity. QUESTION PRESENTED The United States will address the following question: Whether 45 C.F.R. 206.10(a)(2)(i) requires a state to provide advance written notice to applicants for and recipients of benefits under the Aid to Families with Dependent Children program concerning the mechanics and effects of the so-called "lump-sum" rule of 42 U.S.C. (Supp. III) 602(a)(17). Interest Of The United States The Aid to Families With Dependent Children (AFDC) program is a cooperative federal-state assistance program which offers financial assistance to needy dependent children and the persons who care for them. States participating in the AFDC program have discretion to determine the amount of assistance provided, but the states must comply with requirements imposed by the Act and by the Secretary of Health and Human Services. 42 U.S.C. (Supp. III) 602(a). This case presents two questions involving the interpretation of the Secretary's regulations: whether 45 C.F.R. 206.10(a)(2)(i) requires a state to provide advance written notice to applicants for and recipients of benefits under the AFDC program concerning the mechanics and effects of the so-called "lump-sum" rule of 42 U.S.C. (Supp. III) 602(a)(17); and whether the failure to provide advance written notice to such persons precludes a state from enforcing the statutory recoupment obligations of the AFDC. The Secretary has a substantial interest in ensuring that these questions are resolved in a manner that furthers the purposes of the AFDC program. At the Court's invitation, the United States filed an amicus brief at the petition stage of this case in which we argued that the decision below misconstrued the Secretary's regulations. STATEMENT 1. The Aid to Families with Dependent Children program, Title IV of the Social Security Act, 42 U.S.C. (& Supp. III) 601 et seq., establishes a cooperative federal-state assistance program. Participating states provide financial support to needy dependent children and the persons who care for them; in return, the federal government partially reimburses the states for the expenses they thereby incur. The goal of this undertaking is to "encourag(e) the care of dependent children in their own homes * * * and to help (those children's) parents or relatives to attain or retain capability for the maximum self-support and personal independence consistent with the maintenance of continuing parental care and protection * * *." 42 U.S.C. 601; Shea v. Vialpando, 416 U.S. 251, 253 (1974). States participate in the AFDC program at their option, and at present all states have chosen to do so. As a requirement of participation, each state must establish and administer an assistance plan that conforms with the requirements set forth in the statute and with the implementing rules and regulations promulgated by the Secretary of Health and Human Services. See 42 U.S.C. (Supp. III) 602(a); see generally 45 C.F.R. 201.0 et seq. These provisions require each state to establish a state-wide standard of need, "which is the amount deemed necessary by the State to maintain a hypothetical family at a subsistence level." Shea v. Vialpando, 416 U.S. at 253. Each state also must specify "how much assistance will be given, that is, what 'level of benefits' will be paid." Rosado v. Wyman, 397 U.S. 397, 408 (1970). Furthermore, the state also must distinguish between a family's "resources" and its "income." If in a given month a family's "resources" or its "income" exceeds predetermined limits, which are set by the state subject to federally prescribed maximums, the family is ineligible to receive AFDC benefits for that month. See 42 U.S.C. (Supp. III) 602(a)(7)(B), (17), and (18); 45 C.F.R. 233.20(a)(3)(i)(B). Prior to 1981, federal law required states to treat all "income" or "resources" received in one month as "resources" in succeeding months until the money was spent. See Lukhard v. Reed, No. 85-1358 (Apr. 22, 1987), slip op. 2 (plurality opinion). The application of this rule where a family received a non-recurring lump-sum payment, such as a gift or a retroactive Social Security payment, had an anomalous effect. Because the payment would usually increase the family's "income" above the prescribed limits in the month it was received, and threaten to increase its "resources" to disqualifying levels in succeeding months, this "treatment of (lump-sum) payments ha(d) the perverse effect of encouraging the family to spend such income as quickly as possible in order to retain AFDC eligibility." S. Rep. 97-139, 97th Cong., 1st Sess. 505 (1981) (Budget Committee Report). Thus, instead of promoting AFDC's goal of encouraging AFDC families to budget their money responsibly, this aspect of the law had the opposite effect. To eliminate this anomaly, the Secretary recommended that Congress amend the statute's treatment of lump-sum receipts. Lukhard v. Reed, slip op. 2 (plurality opinion). Specifically, the Secretary proposed that lump-sum income be divided by the family's standard of need and that the family be ineligible for AFDC benefits for the resulting number of months. See ibid. Congress concurred in the Secretary's suggestion, and in August 1981 Congress enacted the Secretary's proposed "lump-sum" rule (and other proposed changes in the AFDC program) into law. See Section 2304 of the Omnibus Budget Reconciliation Act of 1981 (OBRA), Pub. L. No. 97-35, 95 Stat. 845 (codified at 42 U.S.C. (Supp. III) 602(a)(17)). Congress provided that the new lump-sum rule would "become effective on October 1, 1981," unless the Secretary determined that a state's law prohibited compliance with it, in which case the rule would "become effective * * * the first (state legislative session) ending on or after October 1, 1981." OBRA, Section 2321, 95 Stat. 859-860. 2. Petitioner, the Commissioner of the Minnesota Department of Public Welfare, /1/ then sent a letter to all current AFDC recipients in Minnesota informing them that changes would soon be implemented in the federal AFDC requirements (Pet. App. A97-A101). Included in these changes was the treatment of lump-sum payments. The letter stated that under the new law, such payments could render a family temporarily ineligible for AFDC benefits. /2/ It also explained that it was "not intended as a detailed explanation of all the changes," that such explanation should be received "from your financial worker," and that the rule would become effective on October 1, 1981 (id. at A97-A98). Because of a separate piece of litigation, however, petitioner did not actually implement the new lump-sum rule until February 1, 1982 (id. at A4). Respondent, the representative of a class of AFDC recipients in Minnesota who either had been or would be found ineligible for AFDC benefits because of the lump-sum rule, /3/ brought this class action against petitioner in July 1983 (Pet. App. A5). She alleged that the lump-sum rule violated the Social Security Act and the constitutional guarantees of equal protection and due process. Respondent also alleged that petitioner had not provided the plaintiff class with adequate advance notice of the mechanics and operation of the lump-sum rule (ibid.). Petitioner then filed a third-party complaint against the Secretary, demanding that the federal government bear a proportionate share of any liability that arose from its implementation of the lump-sum rule. The district court certified the plaintiff class and granted it partial summary judgment (Pet. App. A5-A8, A27-A59, A61-A77, A79-A81, A83-A94). The court rejected the challenges based on the Social Security Act and the Equal Protection and Due Process Clauses (id. at A5-A6, A40-A47, A51-A57). It agreed, however, with the plaintiff class that, in implementing the lump-sum rule, petitioner had failed to provide the notice required by 45 C.F.R. 206.10(a)(2)(i). /4/ The court found that petitioner "does not advise AFDC applicants of the lump sum rule at the time they apply for benefits," that the "only information provided by (petitioner) to Minnesota AFDC recipients regarding the lump sum policy (was the) * * * September 18, 1981 (letter,)" that this letter "fell short of the requirement (of 45 C.F.R. 206.10(a)(2)(i), that applicants are to be advised of 'conditions of ineligibility,'" that "(n)o class member who applied for AFDC benefits after September 18, 1981 has received any written notice of the lump sum policy," and that "recipients are sometimes not advised of the lump sum rule until (petitioner) sends them a termination of benefits notice" (Pet. App. A48 (emphasis in original)). The court held that the "lack of advance notice makes it essentially impossible for the majority of AFDC recipients to budget their lump sums according to the rigid formula imposed by (petitioner)" (ibid.). As a remedy, the court ordered petitioner to prepare a "thorough explanation of the mechanics of the (lump-sum) rule(,)" to mail that explanation to "all current AFDC recipients," and to "include such an explanation (both) in the information which it provides to all individuals who apply for AFDC benefits" and "in the material that is given to recipients at the time of their periodic six-month reevaluation for benefits" (Pet. App. A57). In addition, the court ordered petitioner to notify those recipients whose benefits had been terminated because of the lump-sum rule that the terminations may have been improper and that, under state law, they could reapply for benefits (ibid.). But it refused to enjoin petitioner from seeking to recover, through a reduction in future payments, AFDC benefits that were paid to respondent during the pendency of her challenge to the lump-sum rule, /5/ on the ground that the Eleventh Amendment barred such relief (id. at A89-A90). 3. On appeal by both petitioner and respondent, /6/ a divided panel of the court of appeals affirmed in part and reversed in part (Pet. App. A1-A25). The majority agreed with the district court that petitioner had failed to comply with the requirements of 45 C.F.R. 206.10(a)(2)(i). But it disagreed with the district court's refusal to enjoin petitioner from seeking to recoup the overpayments made to respondent (Pet. App. A18-A22). a. On the notice issue, the court of appeals rejected petitioner's argument that the requirements of 45 C.F.R. 206.10(a)(2)(i) are satisfied by "informing an AFDC recipient of the lump-sum rule and its operation when the recipient reports receiving or appears likely to receive a lump sum" (Pet. App. A9). The court noted that "(t)he regulation on its face contemplates that in appropriate cases oral notice will be given as a supplement to written notice, not that it represents an alternative to written notice" (ibid.). Moreover, the court said, "(e)ven (if it were) true that oral notice may replace written notice in appropriate cases, * * * the oral notice provided by * * * (petitioner) cannot be considered 'appropriate' notice" (id. at A10). The court reasoned that, "(w)ithout advance notice, an AFDC beneficiary is unlikely to budget a lump sum according to the new rule's rigid formula" (ibid.), and that petitioner's "oral-notice policies do not reasonably assure that an AFDC recipient who gets a lump sum will have advance notice of the rule" (id. at A12). On the latter point, the court noted that "it is not always possible for the recipient or his or her caseworker to anticipate the receipt of a lump sum" and that "(e)ven a highly competent caseworker may wrongly determine that receipt of a lump-sum is not likely, forget to provide() notice of the rule, or be tardy in doing so" (ibid.). The court also rejected petitioner's argument that the September 18, 1981, letter satisfied the requirements of 45 C.F.R. 206.10(a)(2)(i) (Pet. App. A14-A16). The court noted that members of the plaintiff class who were not on the welfare rolls when the letter was transmitted did not receive it or any other written notice of the lump-sum rule, as required by the court's interpretation of 45 C.F.R. 206.10(a)(2)(i) (Pet. App. A14-A15). Moreover, the court found that the letter was "'incomplete and confusing'" (id. at A15), because it did not adequately explain the mechanics of the lump-sum rule and its "inflexible operation" (ibid.) and because the letter did not accurately report the effective date of the lump-sum (id. at A16). Finally, the court rejected petitioner's argument that the district court could not enjoin the recoupment of overpayments made to respondent (Pet. App. A18-A22). The court held that an injunction against the recoupment would not violate the Eleventh Amendment. The court reasoned that, since petitioner had already paid respondent, the remedy would not amount to a retroactive award of damages against the state (id. at A19-A20). The court further held that federal regulations requiring the recovery of overpayments did not bar such an injunction. In the court's view, the payments to respondent could not be considered an "overpayment," because petitioner, having failed to provide adequate notice to respondent of the lump-sum rule, cannot properly invoke that rule against respondent. Id. at A21. "By failing to comply with the notice regulation," the court ruled, "(petitioner) failed to institute a legal change in its eligibility rules" (ibid.). b. Judge Fagg dissented (Pet. App. A23-A25). He stressed that, under the express terms of the OBRA, the lump-sum rule became effective in Minnesota on February 1, 1982 (id. at A23), and that, "(c)onspicuously absent from the (enactment) was any suggestion that(,) in addition to this explicit effectiveness date(,) Congress intended to include the implicit qualification that the implementation of the amendment hinged decisively on the state providing applicants and recipients alike with 'appropriate' advance written notice of the amendment's pending implementation" (id. at A24). Judge Fagg reasoned that 45 C.F.R. 206.10(a)(2)(i) is a "regulation * * * of general applicability" that "was not adopted in direct response to the amendment" and that "does not mandate that implementation of congressionally adopted eligibility requirements be preceded by advance written notice" (Pet. App. A24). In his view, "the regulation simply requires the state to publicize generally in written form, and orally as appropriate, the AFDC program and its availability" (ibid.). SUMMARY OF ARGUMENT The Secretary has established a triparte scheme to provide AFDC beneficiaries with information concerning eligibility requirements and their rights and obligations under the AFDC program. When an individual first applies for AFDC benefits, the Secretary requires that he receive a written statement setting forth the general requirements of the AFDC program. The Secretary's regulations also require the states to establish a system whereby recipients can report events that may affect their eligibility to the state and have the opportunity to ask about the possible consequences of any event. Only if the state decides to terminate or reduce a recipient's benefits does the Secretary require that the individual receive a written notice explaining the action to be taken and the justification for such action. This information dissemination scheme represents a careful balance designed to provide needed information to AFDC applicants and recipients in a useful way while not imposing costly administrative burdens on the states. The decision below changes the Secretary's scheme into one in which AFDC beneficiaries will receive numerous written communications describing sometimes intricate changes in the operation of the program that will often be of no immediate applicability to many of the recipients. This result stems from two errors in the court of appeals' analysis. First, the court misread the regulation, which applies only to applicants, and not to recipients. Second, even as to applicants, Section 206.10(a)(2)(i) requires only that persons be told generally about the program. The regulation does not require (and it does not forbid) that applicants be told about the mechanics of the lump-sum rule. The regulation leaves to the states the determination whether to provide various categories of information in written or oral form. That judgment rests on the Secretary's belief that the states may properly conclude that particular information -- especially about future contingencies -- can most effectively be conveyed by face-to-face communications between caseworkers and program participants. ARGUMENT THE SECRETARY'S REGULATION DOES NOT REQUIRE STATES TO PROVIDE DETAILED WRITTEN NOTICE OF THE OPERATION OF THE LUMP-SUM RULE TO AFDC BENEFICIARIES 1. Congress has authorized the Secretary to promulgate regulations to implement the AFDC program. 42 U.S.C. 1302. Pursuant to this authority, the Secretary has established a three-part scheme for disseminating information about the AFDC program. First, 45 C.F.R. 206.10(a)(2)(i) (emphasis added) provides that "(a)pplicants shall be informed about the eligibility requirements and their rights and obligations under the program." Under this provision, state agencies must provide applicants (see 45 C.F.R. 206.10(b)(1) (defining "applicant")) /7/ with information about the basic operation of the AFDC program. This obligation can be satisfied through the distribution of "bulletins and pamphlets" describing the general eligibility conditions of the AFDC program and the individual's duty to report the occurrence of events that may affect the amount of benefits to which he or she is entitled. See also 45 C.F.R. 206.10(a)(2)(iii) (applicants and recipients must be informed that information regarding eligibility and income will be sought from other agencies). Second, Section 206.10(a)(2)(ii) (emphasis added) provides that "(p)rocedures shall be adopted which are designed to assure that recipients make timely and accurate reports of any change in circumstances which may affect their eligibility or the amount of assistance." Under this provision, state agencies must make available procedures whereby individuals who are receiving AFDC benefits can report events that might affect their eligibility and seek counsel concerning the significance of those events. Finally, Section 205.10(a)(4) provides that, "(i)n cases of intended action to discontinue, terminate, suspend or reduce assistance * * *, (t)he State or local agency shall give timely and adequate notice," including "a written * * * statement of what action the agency intends to take, the reasons for the intended agency action, the specific regulations supporting such action, (and an) explanation of the individual's right to request an evidentiary hearing." Under this regulation, state agencies must provide individualized notice and explanation to any person whose benefits are to be denied, reduced, or terminated. The type of information that the regulation requires a state to provide an individual under the AFDC program therefore depends upon a person's status within the system. An applicant will be informed in writing and orally about the AFDC program and about his basic rights and obligations. A person who is already within the system, upon reporting a change in his circumstances, will be informed by his caseworker about the effect that the change will have upon his eligibility. /8/ Finally, a person who is ruled ineligible to participate in the program, or whose benefits are stopped or reduced, is given a specific written explanation of the reasons for his ineligibility or for the termination or reduction in his benefits. The logic underlying this scheme is readily apparent. Deciding how to disseminate information to individuals in any welfare program necessarily involves the balancing of several considerations. Fairness requires that individuals be given some way to learn about the program and to comply with its requirements. At the same time, legislatures appropriate only limited funds for welfare programs; every dollar spent on administrative matters, such as dissemination of written information, reduces the money available for beneficiaries. Moreover, experience in administering these programs has suggested that complex advance written notice to beneficiaries may often be less effective than timely oral discussion as a means of usefully conveying information about contingencies that may affect benefit eligibility. /9/ Reconciling these interests and considerations is a difficult task for which there is no scientifically prescribed solution. The Secretary has established a scheme that allows states to provide information in a meaningful way at a reasonable cost. In doing so, the Secretary has been careful to preserve considerable flexibility for each state to determine how best to meet these requirements, and to decide whether additional means of disseminating information should be used. Petitioner appears to have complied with the requirements of the Secretary's regulation. /10/ When an individual applies for AFDC benefits in Minnesota, petitioner provides the applicant with pamphlets and information packets describing the individual's basic rights and obligations under the AFDC program (see J.A. 29-31). Moreover, an individual receiving AFDC benefits in Minnesota is assigned to a caseworker who will "orally explain() specific program requirements in detail and inform() clients of all their options and alternatives under the program" (J.A. 118-119 (affidavit of Roger Zimmerman, Program Advisor for the State of Minnesota Department of Human Services Assistance Payments Division); see id. at 114-115 (affidavit of Linda Ady, Supervisor of Policy Development, Assistance Payments Division, Minnesota Department of Human Services); id. at 122 (affidavit of Connie Freed, Principal Financial Worker for Hennepin County)). Petitioner may also periodically provide written materials (such as the September 18, 1981, letter) /11/ to AFDC recipients in Minnesota describing changes in the AFDC program and urging recipients to contact their caseworkers for additional information about those changes (Pet. App. A97-A101). Finally, whenever a person's benefits are to be terminated or reduced, petitioner sends the individual written notice describing the change and the reasons for it (Pet. 10 n.2). The Secretary's regulations require nothing more of petitioner. 2. The courts below therefore erred in concluding that petitioner was required to provide persons such as respondent with advance written notice of the operation of the lump-sum rule. First, the reasoning of the lower courts' opinions erroneously assumes that 45 C.F.R. 206.10(a)(2)(i) applies to recipients and applicants alike. See Pet. App. A12-A14, A48-A51. The text of the regulation, however, makes clear that it applies only to applicants, and the history of the regulation is consistent with that reading of its text. /12/ Another regulation, 45 C.F.R. 206.10(a)(2)(ii), is the one that relates to disseminating additional information to recipients, who have previously received the information furnished to applicants. /13/ That provision, which is quoted in full at page 13, supra, requires states to adopt procedures to assure that recipients make timely and accurate reports of any change in circumstances which may affect their eligibility or the amount of assistance they receive. Manifestly, that provision vests broad discretion in the states concerning the manner and form in which relevant additional information will be furnished to recipients. The clear premise of this provision is that a recipient has a continual obligation to report to his caseworker certain events, such as the receipt of new income or resources that might affect his eligibility to participate in the AFDC program, so that the caseworker can then inform the recipient of the consequences of the event. The states may orally inform a person whose application is approved that he must notify his caseworker when he receives new income or resources, because that money might affect his eligibility for AFDC benefits. The states are free to inform recipients in writing about the operation of the lump-sum rule, but the Secretary has not required the states to implement 45 C.F.R. 206.10(a)(2)(ii) in that manner. While that provision encourages the states to take measures to alert recipients to this obligation, it basically assumes that recipients will learn about changes in the AFDC program directly from their caseworkers. The court of appeals also erred in determining the type of notice that must be given to AFDC applicants. The court affirmed the district court's order requiring petitioner to include a detailed explanation of the operation of the lump-sum rule in the pamphlets that petitioner provides to applicants. The Secretary does not construe his regulation, however, as imposing that type of burden on petitioner. Section 206.10(a)(2)(i) does not require states to provide applicants with advance written notice of the mechanics of any aspect of the AFDC program, including the lump-sum rule. As Judge Fagg noted in his dissent below (Pet. App. A24), the regulation was not adopted in response to the lump-sum rule, it is of general applicability, and it does not require that the implementation of new eligibility requirements be preceded by advance written notice. Rather, 45 C.F.R. 206.10(a)(2)(i) simply requires the state to make known generally in written form, and orally as appropriate, the AFDC program, its availability, and its broad outlines. Contrary to the assertion of the courts below (Pet. App. A10-A11, A48-A51), interpreting the Secretary's regulation in accordance with its plain language does not undermine the ability of AFDC recipients to budget their monies in conformity with the lump-sum rule. Persons who participate in the AFDC program, like all other citizens, are presumed to know the requirements of the law and their obligation to comply with it. See Atkins v. Parker, 472 U.S. 115, 127-131 (1985). Moreover, when an individual is accepted into the AFDC program, he will be informed that certain events, such as the receipt of additional money, can affect his eligibility for benefits and therefore that he should promptly report any change in circumstances to his caseworker. The caseworker can then inform the recipient whether and how a particular change in circumstances (such as the receipt of a lump sum) affects the recipient's benefit eligibility. AFDC recipients who follow these instructions should be capable of budgeting their monies in the manner intended by the lump-sum rule. The result is that AFDC recipients should generally be able to budget their monies in the manner intended by the lump-sum rule unless they ignore the instruction that they promptly report any change in their circumstances to their caseworkers so that the caseworkers can explain the effect of that change to them. /14/ To be sure, as the courts below noted (Pet. App. A10, A12-A13, A48-A51), some AFDC recipients may fail to learn about the requirements of a rule such as the lump-sum rule; others may fail timely to report the receipt of lump sums; and some may deal with caseworkers who fail accurately to inform them of the existence or effect of the lump-sum rule. These are unfortunate cases (not directly addressed by the broad holdings of the courts below). /15/ But a written notice requirement, as a practical matter, would not eliminate these problems. Such notice would of necessity often be furnished far in advance of the occurrence of a relevant change in circumstances, and it would presumably be one of many comparable written explanations of the often intricate provisions of the program. Accordingly, the Secretary has determined (1) that, for the most part, information is most effectively conveyed by face-to-face communications between program participants and caseworkers, and (2) that, except for general information requirements, the cost of advance written notices concerning the operation and effects of particular AFDC rules is too high, and the reliability of written notices to accomplish this purpose too low, to justify requiring all states to send them. The Secretary's judgment that his regulation should not be interpreted to require advance written notice of changes in AFDC program rules that affect eligibility (such as the lump-sum rule) is reasonable. The cost of complying with such a regulation would be very substantial: Congress and the Secretary are continuously adjusting the myriad requirements that can affect eligibility in the AFDC program; the states would therefore be required to expend sizeable sums on printing and mailing letters concerning such changes to AFDC program recipients. Such diversions of the finite funds available for the program from benefits payments to administrative costs must be avoided where possible. Moreover, while the states may find it desirable and appropriate in special circumstances to provide such written notice (in addition to carrying out the ordinary information dissemination requirements), the benefit to AFDC recipients of doing so in all circumstances is questionable. Even if large numbers of recipients would be affected by a particular change in program conditions, which is usually not the case, flooding recipients with notices about every program change would discourage them from reading any of the notices with care to determine whether any particular change affects them. Rather, recipients would be more likely to rely on their caseworkers to inform them of how their eligibility for benefits has been affected by any particular change in their circumstances, which is precisely why the Secretary has not required states to expend limited funds on expensive mailing programs. That judgment -- as to what information his regulations require to be disseminated and how that information is best disseminated -- is entitled to deference from the courts. See Lukhard v. Reed, slip op. 12 (plurality opinion); Lyng v. Payne, No. 84-1984 (June 17, 1986), slip op. 12-13; Atkins v. Parker, 472 U.S. at 127 n.29 ("What judges may consider common sense, sound policy, or good administration, however, is not the standard by which we must evaluate the claim that the notice violated the applicable regulations."); Blum v. Bacon, 457 U.S. 132, 141-142, 145-146 (1982). The decision below errs in failing to accord that deference to the Secretary's interpretation. /16/ CONCLUSION The judgment of the court of appeals should be reversed. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General LAWRENCE G. WALLACE Deputy Solicitor General PAUL J. LARKIN, jr. Assistant to the Solicitor General JOHN F. CORDES ROBERT K. RASMUSSEN Attorneys RONALD E. ROBERTSON General Counsel Department of Health and Human Services AUGUST 1987 /1/ At the time, Leonard Levine was the Commissioner of the Minnesota Department of Public Welfare. Petitioner Sandra Gardebring succeeded Mr. Levine. /2/ The letter explained (Pet. App. A97-A98) that, "(w)hen a family receives lump sum money such as an inheritance, a Social Security back payment, insurance settlement, gift, etc., the money will be deducted from the AFDC grant, whether or not it has already been spent. If the lump-sum added to other family income totals more than the AFDC maximum for that size family, the family will be ineligible for the month in which the lump sum was received (and possibly for a number of following months), whether or not the money is spent before the period of ineligibility has gone by. If the family already received an AFDC grant that month, the grant would be 'recouped' by the welfare agency." /3/ Two other AFDC recipients were putative class representatives when this suit was brought. Neither recipient, however, remains a party to this litigation (Pet. App. A7 n.7). /4/ The regulation also applies to several other programs as they are enforced in the territories of the United States: the Old-Age Assistance (42 U.S.C. (& Supp. III) 301 et seq.), Aid to the Blind (42 U.S.C. (& Supp. III) 1201 et seq.), Aid to the Permanently Disabled (42 U.S.C. (& Supp. III) 1351 et seq.), and Supplemental Security Income for the Aged, Blind, and Disabled programs (42 U.S.C. 1381 note). Otherwise, the regulation applies only to the AFDC program. Any implication in our brief at the petition stage that the regulation has a broader effect is erroneous. /5/ Respondent had been found eligible for AFDC benefits in November 1982 (Pet. App. A88). On October 31, 1983, however, her husband received a disability payment of more than $5,000, which the family immediately spent (ibid.). Respondent reported the lump sum receipt to her caseworker, who informed her that the lump sum receipt rendered her family ineligible for AFDC benefits for six months (ibid.). After respondent's administrative appeals were rejected, petitioner proposed to withhold one percent of her future monthly AFDC benefits until the overpayment was recovered (id. at A89). /6/ The Secretary initially appealed the portion of the district court's order requiring him to pay the federal share of any benefits payable to the class, but subsequently withdrew that appeal (Pet. App. A7 & n.8). /7/ 45 C.F.R. 206.10(b)(1) defines an "applicant" as "a person who has * * * made application for public assistance from the agency administering the program, and whose application has not been terminated." /8/ Changes in numerous circumstances can affect a person's eligibility to participate in the AFDC program or the amount of benefits to which he is entitled. Among these circumstances are the age of the child and whether he is in school, the composition of the family unit (which can be affected by the remarriage of a parent, the birth of a new child, or the departure of an old child), and the employment status of a parent. See generally 45 C.F.R. Pt. 233. /9/ See J.A. 115-116 Affidavit of Linda Ady, Supervisor of Policy Development, Assistance Payments Division, Minnesota Department of Human Services) ("I doubt that the (written) notice (ordered by the district court in this case) is the most effective tool for informing AFDC clients of their rights and options under the program. In my experience, a general notice is not effective because clients are not apt to recall specific program rules until they are directly affected by the rule. * * * I also have concerns about the Department's administrative capability to keep notices up-to-date. Program requirements are constantly in flux. * * * I believe that clients may be worse off if they rely on misinformation than if they are on notice to make prompt inquiries of their financial worker."); id. at 119 (affidavit of Roger Zimmerman, Program Advisor for the State of Minnesota Department of Human Services Assistance Payments Division) ("In my experience as a financial worker and supervisor, I believe that a general notice of the lump sum rule or other specific program requirements will not be effective. Clients can only be expected to understand and remember information which is directly related to their present circumstances. Often times, I have had the experience of explaining program requirements generally to recipients and having them forget when the requirement became relevant to their circumstances."); id. at 121-122 (affidavit of Connie Freed, Principal Financial Worker for Hennepin County) ("In my experience as a financial worker, the lump sum rule is difficult for clients to understand and that the most effective way of communicating the effect of the lump sum rule to clients is to sit down and talk with them about it. In my experience, recipients do not attach the same importance to routine information sheets or notices as they do information specifically geared to their situation. Like most of us, clients tend not to absorb or retain information when it is not directly relevant to their situation. I have discovered that the most effective notice is a person-to-person discussion of all possible ramifications of a specific program requirement at the time the requirement becomes relevant to the client's life. * * * I have often had the experience of explaining a general program requirement to a client and then explaining it over to them again when the requirement became pertinent. Often the client will have misunderstood or forgotten the general requirement in the first place. This is understandable because clients receive so much technical information that the information becomes overwhelming."). /10/ The findings of the courts below do not establish the extent to which the individual members of the class certified by the district court received notice, written or oral, of the duty to inform a caseworker of changed circumstances. The affidavits submitted by petitioner, however, suggest that petitioner carried out that duty, and respondent does not appear to argue to the contrary. /11/ We do not mean to suggest that petitioner was required by the Secretary's regulations to send out this letter, or any other written material, to AFDC recipients. We merely note that the dissemination system that petitioner has described appears to comply with the Secretary's regulations. /12/ See 36 Fed. Reg. 3864 (1971); 43 Fed. Reg. 6949, 6950-6951 (1978); 44 Fed. Reg. 17943 (1979). The original version of what is now 45 C.F.R. 206.10(a)(2) referred only to applicants and did not refer to recipients at all. 36 Fed. Reg. 3864 (1971). The regulation was amended in 1978 to include "(a)pplicants and all individuals who inquire about the program" (43 Fed. Reg. 6951) in order "to ensure that State and local agencies furnish information * * * about the financial assistance and medical assistance programs" to "all persons, whether they are actual or potential applicants or merely persons seeking information" (id. at 6949). This amendment was repealed in 1979 (see 44 Fed. Reg. 17943), but it shows that the Secretary intended that the regulation not encompass recipients. /13/ Relying on one of the Secretary's answers to interrogatories in district court, the court of appeals suggested (Pet. App. A10 n.10) that the Secretary has construed 45 C.F.R. 206.10(a)(2)(i) to require advance written notice to AFDC recipients of the lump-sum rule's operation and effect. The court of appeals, however, misread the Secretary's answers. As we pointed out in our amicus brief at the petition stage (at 13 n.7), the Secretary stated that "(a) State has considerable latitude in the development of procedures it shall adopt to ensure effective administration of the AFDC program" and that "(p)rovisions at 45 C.F.R. Section 206.10(a)(2)(i) do not require a State to publicize the lump sum rule * * *" (J.A. 90-91). Thus, while he advised that "45 C.F.R. Section 206.10(a)(2)(i) and (ii) require a State agency to inform AFDC applicants and recipients about eligibility requirements," including "generally advising applicants and recipients of their obligation to report receipt of lump sum income, the operation of the lump sum rule, and (its) effect on eligibility for assistance" (J.A. 89 (emphasis added)), the Secretary also stated that it is "not until a State takes action to terminate, discontinue, suspend or reduce assistance (that it is) * * * required to give timely and adequate written notice of the specific adverse action" and the reason for it (ibid.). /14/ The court below erred in suggesting (Pet. App. A13-A14) that it should not defer to the Secretary's interpretation both because the Secretary had explained his regulations in the context of litigation and because that explanation "conflicts with the plain language of the rule, and would deprive the rule of much of its significance in this context." The Secretary's interpretation of his own regulation is entitled to deference, whether or not it is articulated in the course of litigation. See Lukhard v. Reed, slip op. 9, 12 (plurality opinion); United States v. Morton, 467 U.S. 822, 835-836 n.21 (1984). Moreover, as discussed in text, the Secretary's interpretation is consistent with the language of the regulation and gives equal significance to the regulation in the context of the lump-sum rule as in any other context. /15/ As a legal matter, these individuals are still presumed to know the requirements of the law and to be able to budget their receipts in conformity with those requirements. Atkins v. Parker, 472 U.S. at 127-131 (welfare recipients are presumed to know the requirements of the law); see Heckler v. Community Health Services, 467 U.S. 51, 63-66 (1984) (the government cannot be estopped by its agents' failure to advise persons accurately of a law's existence or effect); Schweiker v. Hansen, 450 U.S. 785, 789-790 (1981) (same). The statute allows a state to recalculate the ineligibility period for persons in three situations: where an event occurs during a month of ineligibility that, had the family been receiving benefits, would have changed the amount of aid payable that month (such as where the state standard of need increases); where the income has become unavailable because of reasons beyond the family's control (such as theft); and where the family incurs medical expenses. See 42 U.S.C. (Supp. III) 602(a)(17). This case does not present a question whether a caseworker's error fits within the second of these situations. The Secretary, however, takes the position that caseworker error does not amount to a circumstance beyond the control of a recipient. /16/ The Court need not reach any other issue if it agrees with our submission that the judgment below should be reversed on the ground that 45 C.F.R. 206.10(a)(2)(i) does not require applicants and recipients to receive advance written notice of the mechanics of the lump-sum rule. We also agree, however, with the dissenting judge in the court of appeals (Pet. App. A23-A25 (Fagg, J.)) that the majority erred in concluding that 45 C.F.R. 206.10(a)(2)(i) requires notice of the operation of the lump-sum rule as a condition of the effectiveness of that rule. The text of 45 C.F.R. 206.10(a)(2)(i) does not purport to modify either the OBRA provision establishing an effective date for the lump-sum rule or the statute and regulation requiring a state to recoup overpayments, 42 U.S.C. (Supp. III) 602(a)(22) and 45 C.F.R. 233.20(a)(13). Whether the state may be enjoined on any other ground from recouping overpayments from persons prejudiced by incorrect or inadequate advice from their caseworkers was not considered by either court below, and this Court ordinarily would not address that question in the first instance. See, e.g., NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 163-164 (1975). But cf. Atkins v. Parker, 472 U.S. at 127-131 (due process does not require specific notice to food stamp recipients about statutory changes in benefits).