Rosado v. Wyman , 414 F.2d 170 ( 1969 )

HAYS, Circuit Judge:

Defendants-appellants, the New York Commissioner of Social Services and the New York Department of Social Services appeal from an order and a judgment of the United States District Court for the Eastern District of New York granting a preliminary injunction, 304 F.Supp. 1354 (1969), and a permanent injunction,F.Supp.-(1969), against enforcement of Section 131-a of the New York Social Services Law, McKinney’s Consol. Laws, c. 55.¹

An appeal by plaintiffs-appellees from a related decision of a three-judge court has been consolidated with the appeals referred to in the preceding paragraph.

I.

Plaintiffs-appellees in this class action are welfare recipients residing in New York City and in Nassau County. They receive payments pursuant to the Aid to Families with Dependent Children program (AFDC) of the Social Security Act, 42 U.S.C. §§ 601-610 (1964, Supp. IV 1965-68). Under this program, in which all states participate, the federal government provides funds to the states on the condition that the plans for use of the funds meet various federal requirements. 42 U.S.C. § 602(a) and (b) (1964, Supp. IV 1965-68). The states and their subdivisions also provide funds and each state administers its own program.

Appellees raised two principal claims in their complaint. The first was that Section 131-a violated Section 602(a) (23) of the Social Security Act² as amended in 1967 by reducing the amount of the AFDC benefits paid to them. The second claim, made by those appellees who are residents of Nassau County, was that Section 131-a violated the equal protection clause of the Fourteenth Amendment by providing for lower payments to AFDC recipients in Nassau County than to those in New York City, although the cost of living is substantially the same in both areas.

A three-judge district court was constituted under 28 U.S.C. § 2281 (1964) to hear the constitutional claim.

While the action was pending before the three-judge court, Section 131-a was amended to permit the Commissioner of Social Services to increase scheduled payments for areas outside New York City up to a maximum no higher than the levels for New York City, upon his determination that the total cost of the items included in the schedule for such an area exceeds the amount provided in the schedule.^{2 3} The three-judge court ruled that this amendment mooted the equal protection claim of the Nassau County recipients, by making it possible for their payments to be increased to the level provided for New York City recipients if the cost of living in Nassau County made such an increase appropriate. It concluded that “any attack on the newly adopted subdivision would not be ripe for adjudication by this Court until there has been an opportunity for action by state officials and until the matter comes before this Court in an appropriate proceeding.” The three-judge court also held that the mooting of the constitutional claim made “academic” the question of whether it might have decided the statutory claim in the exercise of its pendent jurisdiction. It then ordered itself dissolved and remanded the case to Judge Weinstein “for such further proceedings as are appropriate.” 304 F.Supp. 1354, 1356 (1969). The same day Judge Weinstein issued an order temporarily restraining action under Section 131-a. Four days later he issued a preliminary injunction and denied appellants’ motion to stay the injunction. On May 21 this court granted appellants’ motion for a preference for their appeal from the order granting the preliminary injunction and denied appellants’ motion for a stay without prejudice to renewal at the argument of the appeal. The appeal was argued on June 4, at which time the motion was renewed, and on June 11 this court stayed the injunction pending the disposition of the appeal. On June 16 this court denied ap-pellees’ motion to vacate the stay and denied appellants’ motion to stay proceedings in the district court until the decision on the appeal from the preliminary injunction. The next day appellees appealed to the United States Supreme Court from the order of dissolution of the three-judge court. The appeal was accompanied by a petition for certiorari before judgment to this court and a motion to expedite Supreme Court consideration of the case. On June 18, while the appeal was still pending in the Supreme Court, the district court granted summary judgment for appellees and issued a permanent injunction. The same day appellants filed a notice of appeal to this court from the issuance of the permanent injunction. On June 19 this court granted appellants’ motion to stay the permanent injunction and it also granted appellants’ motion to consolidate the appeal from the permanent injunction with the appeal from the temporary injunction. On June 24 the Supreme Court dismissed for want of jurisdiction the appeal from the dissolution of the three-judge court on the ground that the order was properly appealable to this court. The Supreme Court also refused to grant certiorari before judgment and denied appellees’ motions to expedite review and to vacate the stays ordered by this court. 395 U.S. 826, 89 S.Ct. 2134, 23 L.Ed.2d 739. Appellees thereupon appealed to this court from the order dissolving the three-judge court, and that appeal was consolidated with the appeals from the injunctions.

II.

We turn first to the issue raised by the appeal from the order of the three-judge court.

Appellees urge that the three-judge court erred in dissolving itself and that we should order it to resume its deliberations.

The court ordered itself dissolved because of the adoption of an amendment to Section 131-a permitting increased payments to AFDC recipients in Nassau County upon a determination by the Commissioner of Social Services that the increases are required in order to reflect actual cost of living. The three-judge court was of the opinion that the issue raised by the Nassau County plaintiffs was mooted by the amendment to Section 131-a and that the issue presented by the amendment itself was not yet ripe for adjudication.

We are persuaded that the court acted correctly. We are confirmed in this view by the fact that, since the dissolution of the three-judge court, the schedule of payments for Nassau County has in fact been increased by reason of the provisions of the amendment to Section 131-a. If corroboration of the opinion of the three-judge court be needed it is provided by this development. Obviously a determination by the court based upon the situation as it existed at the earlier date would have been premature and its decision would have been rendered moot by the provision of the new schedules for Nassau County. The court was right in refusing to act on facts that were fluid and subject to early change. We affirm its order dissolving itself.

III.

Appellants contend that the single district judge erred in exercising jurisdiction to issue a preliminary and a permanent injunction on the basis of the statutory claim after the constitutional claim had become moot and the three-judge court had dissolved itself.

Pendent Jurisdiction

The three-judge court specifically refused to decide whether it could have exercised pendent jurisdiction to rule on the statutory claim after it had determined that the constitutional claim was moot. 304 F.Supp. at 1356 (1969). In remanding the case to the single district judge for “appropriate” action the court did not decide whether he could exercise such jurisdiction.

The single district judge ruled that it was proper for him to assert pendent jurisdiction over the statutory claim. 304 F.Supp. 1356 (1969). We find this conclusion to have been in error.

The assertion of a constitutional claim required the convening of a three-judge district court. 28 U.S.C. § 2281 (1964). That court is the only court which ever had jurisdiction over the constitutional claim. Since the single judge at no time had jurisdiction over the constitutional claim there was never a claim before him to which the statutory claim could have been pendent. If the three-judge court had attempted to give the single judge power to adjudicate the statutory claim, it could not have done so, since with the dissolution of the three-judge court the statutory claim was no longer pendent to any claim at all, much less to any claim over which the single judge could exercise adjudicatory power.

King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968) provides no authority for deciding the pendent statutory claim. There the Court said:

“We intimate no views as to whether and under what circumstances suits challenging state AFDC provisions only on the ground that they are inconsistent with the federal statute may be brought in federal courts.” Id. at 312 n. 3, 88 S.Ct. at 2131.

While the Court in King decided a pendent statutory claim, the constitutional claim to which it was pendent remained viable throughout the litigation. The Court exercised jurisdiction over the pendent statutory claim in order to avoid adjudication of the constitutional issue.

Moreover even if we were to accept the overbroad interpretation of the doctrine of pendent jurisdiction urged upon us by appellees, we would hold in the present case that the district judge’s exercise of such jurisdiction was an abuse of discretion.

In United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), it is clear that there are circumstances in which the exercise of pendent jurisdiction is inappropriate. We believe that it is inappropriate here, where, whatever the technical consequences of enjoining enforcement of Section 131-a may be, the practical effect of an injunction is to order the New York legislature to appropriate more funds for welfare.

A federal court should not assert such power over a state legislature unless there is no possible alternative. Even if the district judge had had discretion, he should have refused to rule on the statutory claim.

In King v. Smith, supra, the relief granted, enjoining the application of the Alabama “man in the house” regulation, did not have the effect of requiring the state legislature to appropriate additional funds. By invalidating the state regulation, the court substantially increased the number of eligible aid recipients but it specifically noted that Alabama was “free * * * to determine the level of benefits by the amount of funds it devotes to the program.” Id. at 318-319, 88 S.Ct. at 2134 (footnote omitted). See Lampton v. Bonin, 299 F.Supp. 336 (E.D.La.1969) (three-judge court).

The Department of Health, Education and Welfare is now engaged in a study of the relationship between Section 602(a) (23) and Section 131-a. HEW, with its acknowledged expertise in the field of social security, is far better equipped than the federal courts to review an alleged inconsistency between a complex state statutory scheme for payments in behalf of dependent children and an ambiguous amendment to the Social Security Act. The district court, even if it had power to act on the pendent claim, should have declined to do so, at least until HEW had completed its consideration of the matter.

Section 1331

The district judge also found that he had jurisdiction to decide the statutory claim under 28 U.S.C. § 1331 (1964) which provides for jurisdiction over federal questions where “the matter in controversy exceeds the sum or value of $10,000 * * *."

The district judge properly held that the claims of the members of the class may not be aggregated to satisfy the $10,000 requirement. See Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969). He also correctly ruled that “the monetary loss to each of the plaintiffs does not approach $10,000.” 304 F.Supp. at 1363. But after finding that appellees could not obtain jurisdiction by showing direct damage of $10,000, the district judge decided that the “indirect, damage” they might sustain as a result, of their reduced payments was sufficient to satisfy the $10,000 requirement. “Indirect damage” is too speculative to create jurisdiction under Section 1331.

“It is firmly settled law that cases involving rights not capable, of valuation in money may not be heard in federal courts where •'the applicable jurisdictional statute requires that the matter in controversy exceed a certain number of dollars. The rule was laid down in Barry v. Mercein, 46 U.S. (5 How.) 103, 12 L.Ed. 70 (1847), a child custody case. The ‘right to the custody, care, and society’ of a child, the court noted, ‘is evidently utterly incapable of being reduced to any pecuniary standard of value, as it rises superior to money considerations.’ 46 U.S. at 120. Since the statute permitted appeals only in those cases where the ‘matter in dispute exceeds the sum or value of two thousand dollars,’ the court concluded that it was without jurisdiction:

‘The words of the act of Congress are plain and unambiguous * * *. There are no words in the law, which by any just interpretation can be held to * * * authorize us to take cognizance of eases to which no test of money value can be applied.’ 46 U.S. at 120.

Subsequent decisions have followed this reasoning. See Kurtz v. Moffitt, 115 U.S. 487, 498, 6 S.Ct. 148 29 L.Ed. 458 (1885); First Nat. Bank of Youngstown v. Hughes, 106 U.S. 523, 1 S.Ct. 489, 27 L.Ed. 268 (1882); Giancana v. Johnson, 335 F.2d 366 (7th Cir. 1964), cert denied, 379 U.S. 1001, 85 S.Ct. 718, 13 L.Ed. 702 (1965); Carroll v. Somervell, 116 F.2d 918 (2d Cir. 1941); United States ex rel. Curtiss v. Haviland, 297 F. 431 (2d Cir. 1924); 1 Moore, Federal Practice ¶ 0.92[5] (2d ed. 1964).”

Boyd v. Clark, 287 F.Supp. 561, 564 (S.D.N.Y.1968), (three-judge court), aff’d on another issue, 393 U.S. 316, 89 S.Ct. 553, 21 L.Ed.2d 511 (1969) (footnotes omitted).

Section 1343

Appellees argue on two grounds that jurisdiction over the statutory claim exists under 28 U.S.C. §§ 1343(3) and (4) (1964). Having found that jurisdiction existed under the doctrine of pendent jurisdiction and under Section 1331, the district judge did not rule on this issue.

Sections 1343(3) and (4) provide:

“The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:

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(3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States;

(4) To recover damages or to secure equitable or other relief under any Act of Congress providing for the protection of civil rights, including the right to vote.”

The first contention of appellees is that their claim under the AFDC provisions creates a cause of action under 42 U.S.C. § 1983 (1964), for which jurisdiction is conferred by Sections 1343(3) and (4). Section 1983 states:

“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”

The complaint, properly read, does not allege the “deprivation of any rights, privileges, or immunities secured by the Constitution and laws” of the United States. The burden of the complaint is that New York’s Statute, Section 131-a, is not in conformity with the requirements of Section 602(a) (23) of the federal statutes and that therefore New York is not entitled to receive federal grants under the AFDC program. Plaintiffs have no rights under federal law to any particular level of AFDC payments or, indeed, to any payments at all. See People of State of New York v. Galamison, 342 F.2d 255 (2d Cir.), cert. denied, 380 U.S. 977, 85 S.Ct. 1342, 14 L.Ed.2d 272 (1965); Bradford Audio Corp. v. Pious, 392 F.2d 67 (2d Cir. 1968).

Moreover, it is clear that the defendant Department of Social Services for the State of New York is not a “person” within the meaning of Section 1983. See Monroe v. Pape, 365 U.S. 167, 187-192, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); Clark v. Washington, 366 F.2d 678, 681 (9th Cir. 1966); Williford v. People of California, 352 F.2d 474 (9th Cir. 1965). Since the suit here constitutes an attack on a state statute, and not on action taken under it, the plaintiffs’ complaint is against the state and not against the Commissioner as an individual. He too is therefore not within the scope of Section 1983.

Appellees’ second contention is that the Social Security Act, which contains the AFDC provisions, is a law providing for “equal rights” so that jurisdiction exists under Section 1343(3) independently of the existence of any claim under the Civil Rights Act. Section 602 (a) (23) is not designed to secure “equal rights” for purposes of Section 1343(3).

IV.

Although we are persuaded that the district judge had no power to adjudicate this action, we turn to a brief discussion of the merits, since our decision does not rest solely on jurisdictional grounds.

Under the AFDC provisions in effect prior to the enactment of Section 602(a) (23),⁴ the states, in order to receive grants under the federal program, were required to set a standard of need under which recipients qualified for payments, but they were not required to pay the full standard and in practice many of them did not. See King v. Smith, supra, 392 U.S. at 318-319, 334, 88 S.Ct. 2128. As originally proposed, Section 602(a) (23) would have required each state to pay its full standard of need and to adjust that standard annually in accordance with changes in the cost of living. H.R. 5710, § 202, 90th Cong., 1st Sess. (1967). In the statute as finally adopted both the provision requiring the states to pay their full standard of need and the provision requiring an annual cost of living adjustment in that standard were eliminated.

Section 602(a) (2) now provides:

Ҥ 602(a) A State plan for aid and services to needy families with children must * * *

(23) provide that by July 1, 1969, the amounts used by the State to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established, and any máximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted.”

The appellees contend that the mandated cost of living adjustment requires that all states which, prior to the amendment, were paying benefits equal to their full standard of need must continue to pay their full standard adjusted to reflect the cost of living as of July 1, 1969. In effect, they argue that § 602(a) (23) sets a floor under state AFDC benefits, freezing them at their previous level plus the cost of living adjustment.

We believe that Section 602(a) (23) was not intended to have anything like this broad a scope. We read it as making two far less dramatic changes in the law. First, it requires each state to make an adjustment in its standard of need by July 1, 1969, to reflect changes in the cost of living, but does not require any state to pay its standard of need, nor to increase its AFDC payments or to refrain from decreasing them. The second change required by the statute was not intended to affect New York at all. It refers to a practice employed in many states, not including New York, of imposing a maximum on the amount of aid a family may receive, regardless of its size.⁵ The statute requires that family maximums of the type imposed by these states are to be adjusted by July 1, 1969, to reflect changes in the cost of living.

Our construction of Section 602(a) (23) finds support in the rejection by Congress of the much more stringent bill originally proposed. That rejection demonstrated an intent not to impose controls on the levels of benefits set by the states. The Congressional action was entirely consistent with the traditional federal policy of granting the states complete freedom in setting the level of benefits. See King v. Smith, supra, 392 U.S. at 318-19, 334, 88 S.Ct. 2128.

The Conference Report on Section 213 of the bill, which contained' the version of Section 602(a) (23) that was enacted, indicates the correctness of a narrow interpretation. In discussing the portion of the pre-Conference version of Section 213 that dealt with certain non-AFDC recipients, the Report states that the Section would have required “each state to adjust its standards for determining need, the extent of its aid or assistance, and the maximum amount of the aid or assistance payable,” and thus mandated an increase in aid. However, in explaining the portion of Section 213 that, except for a change from an annual cost of living adjustment to a single such adjustment, became Section 602(a) (23), the Report states only that the bill would require each state to “adjust its standards so as to reflect current living costs and make proportionate adjustments in any maximums on the amount of aid.” Conf.Rep. No. 1030, 90th Cong., 1st Sess. (1967,) reprinted in [1967] U.S. Code Cong. and Admin. News, pp. 3179, 3208-3209. The absence of any statement that the portion of Section 213 relating to AFDC payments was intended to effect an adjustment in “the extent of [each state’s] aid or assistance” is significant in view of the fact that the immediately preceding discussion of the portion of Section 213 relating to other kinds of assistance refers specifically to such an adjustment in “the extent of * * * aid.”

The absence in the legislative history of any support for appellees’ interpretation of the statute as imposing a floor on payments is especially significant in view of the long-standing Congressional practice of not imposing such restrictions on the states. As HEW said of Section 602(a) (23) in the brief it submitted in Lampton v. Bonin, supra, “The Congress could hardly have paid less attention to it.”⁶ It is inconceivable that if this were the far reaching measure serving to reverse a basic national policy which plaintiffs claim it was, it should be adopted without comment from committees and individual members of Congress.

That Section 602(a) (23) was not intended to have the broad effect urged by appellees is further indicated by the fact that it is not even discussed in the “Summary of Social Security Amendments of 1967,” a joint publication of the Senate Committee on Finance and the House Committee on Ways and Means, which was prepared for the use of the two committees by the committee staffs. Similarly the “Summary of Principal Provisions” of the Senate bill contained in the Senate Finance Committee report makes no mention of the provisions that became Section 602(a) (23). S.Rep. No. 744, 90th Cong., 1st Sess. (1967), reprinted in [1967] U.S. Code Cong. and Admin. News, pp. 2834, 2840.

V.

We find that the only obligation imposed on New York by Section 602(a) (23) is that sometime between January 2, 1968, the effective date of Section 602 (a) (23), and July 1, 1969, the deadline imposed by the Section, it must adjust its standards of need to reflect the cost of living. The schedules in Section 131-a are based on prices as of May, 1968. Thus New York has complied with Section 602(a) (23).

The two injunctions are vacated and the decision granting summary judgment for appellees is reversed. The order of the three-judge court dissolving itself is affirmed.

1 . Law of March 30, 1969, ch. 184, § 5 [1969 McKinney’s Session Laws of New York, pp. 215, 217].

Subsections 1-3 of Section 131-a provide:

131-a. Maximum monthly grants and allowances of public assistance

1. Any inconsistent provision of this chapter or other law notwithstanding, social services officials shall provide home relief, veteran assistance, old age assistance, assistance to the blind, aid to tiie disabled and aid to dependent children, to eligible needy persons who constitute or are members of a family household, in monthly or semi-monthly allowances or grants in accordance with standards established by the regulations of the department, but not in excess of the schedules included in this section, less any available income or resources which are not required to be disregarded by other provisions of this chapter. Such schedules shall be deemed to make adequate provision for all items of need in accordance with the provisions of section one hundred thirty-one, exclusive of shelter and fuel for heating, for which two items additional provision shall be made by the social services districts in accordance with the regulations of the department.

2. The following schedule of maximum monthly grants and allowances shall be applicable to the social services district of the city of New York:

Number of Persons in Household

One Two Three Four Five Six Seven

$70 $116 $162 $208 $254 $297 $340

For each additional eligible needy person in the 'household there shall be an additional allowance of forty-three dollars monthly.

3. The following schedule of maximum monthly grants and allowances shall be applicable to all other social services districts:

Number of Persons in Household

One Two Three Four Five Six Seven

$60 $101 $142 $183 $224 $257 $290

For each additional eligible needy person in the household there shall be an additional allowance of thirty-three dollars monthly.

2 . Social Security Amendments of 1967, Pub.L.No. 90-248, § 213(b), 81 Stat. 821, 898 (codified in 42 U.S.C. § 602(a) (23) (Supp. IV 1965-68)).

3 . Law of May 9, 1969, ch. 411, § 1 [1969 McKinney’s Session Laws of New York, pp. 652-53].

4 . See note 2, supra.

5 . Maine, for example, provides $27 per month for each child after the first but permits a family to receive a monthly grant of no more than $250. See Westberry v. Fisher, 297 F.Supp. 1109 (D.Me.1969), where a three-judge district court ruled that the Maine regulation imposing a family maximum violated the equal protection clause of the Fourteenth Amendment. See also Williams v. Dand-ridge, 297 F.Supp. 450 (D.Md.1968, 1969) (three-judge court).

6 . HEW’s brief expresses agreement with our view on the fundamental proposition that Section 602(a) (23) did not mandate increases nor freeze floors, but left the states free to reduce AFDC payments. However, the HEW analysis differs from ours in some respects.