Hurley v. Secretary of Health & Human Services , 676 F.2d 1095 ( 1982 )

ORDER

Upon consideration of plaintiff-appellants’ motion for injunctive relief pending disposition of this appeal on the merits, the Court concludes, after review of the record and briefs and after oral argument held on March 23, 1982, that appellants have made a sufficient showing of likelihood of success on appeal, irreparable injury, injury to the public interest and the absence of an adequate remedy at law to require the Court to grant in part the relief requested pending appeal.

We conclude that the notice in question heretofore provided by the state of Ohio in connection with the modification or termination of Aid to Families with Dependent Children benefits under the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35) violates Section 205.10(a)(5) of the regulations of the Department of Health and Human Services, Social Security Administration, effective October 1, 1981, 46 Fed.Reg. No. 182, p. 46762 (Sept. 21, 1981), which regulation provides as follows:

An opportunity for a hearing shall be granted to any applicant who requests a hearing because his or her claim for financial assistance is denied . . . and to any recipient who is aggrieved by any agency action resulting in . . . reduction ... or termination of assistance .... The hearing need not be granted when either State or Federal law requires automatic grant adjustments for classes of recipients unless the reason for an individual appeal is incorrect grant computation.

The notice heretofore sent by the state of Ohio is inadequate under this regulation because it does not make clear that an applicant has a right to a hearing upon request where “the reason” for the request is a claim of “incorrect grant computation.” The notice states “you cannot have a hearing unless you can show that the new law has been incorrectly applied . . . . ” The applicable regulation quoted above required that such “a hearing shall be granted” upon request where the reason given for the request is a claim of incorrect grant computation.

The notice heretofore provided by the state of Ohio also states that the applicant “may,” rather than “will,” continue to receive previous benefits pending a hearing. The regulation governing payments pending a hearing contains mandatory language as follows:

If the recipient requests a hearing [within 10 days]: (i) Assistance shall not be suspended, reduced, discontinued or terminated .. . until a decision is rendered after a hearing, unless: (A) A determination is made at the hearing that the sole issue is one of State or Federal law or policy, or change in State or Federal law and not one of incorrect grant computation; . . . ., 45 C.F.R. § 205.-10(a)(6) (1980).

Accordingly, it is ORDERED that defendant-appellees promptly correct the aforesaid deficiencies in the notice heretofore given to persons receiving AFDC benefits by mailing or otherwise delivering a new notice in compliance. with the provisions of section 205.10 quoted above.

The Court declines to enter an order at this time on the present record requiring the state to pay or continue any particular level of AFDC benefits pending the mailing of such notices or the conduct of hearings pursuant to section 205.10. We remand the case to the District Court for a determination concerning additional remedies, including the question of the appropriateness of continuing previous AFDC benefit payments pending the mailing of the aforesaid notices and the conduct of hearings. The record before us is inadequate to assess the need for additional remedies, the equities of the case or the likely consequences to AFDC recipients or the state of an order requiring the continuation of previous benefits. For example, we do not know the time frame involved for completion of the adjustment process or the amount of- additional monies that the state would have to pay under a continuation order (the state speculates that it would amount to approximately $8,000,000 a month but plaintiffs apparently contest this figure) or how much recipients would be obligated to pay back to the state upon completion of the adjustment process (there is some indication in the record that 80% or more of the adjustments are correct and that these recipients would have to pay back any overage accrued as a result of continuation of previous benefit levels). Neither do we know whether there are less intrusive, less costly or fairer methods of preserving the status quo.

Accordingly, the decision of the District Court finding the aforesaid notice to be valid under federal law is reversed and the case remanded to the District Court for a prompt hearing and further proceedings consistent with this order.