Hagans v. Wyman

MULLIGAN, Circuit Judge:

On February 10, 1972 the plaintiffs commenced this action in the United States District Court, Eastern District of New York, for themselves and their infant children and as representatives of those who are recipients of public assistance in New York under the cooperative federal-state Aid to Families with Dependent Children Program (AFDC), 42 U.S.C. § 601 et seq. The plaintiffs sought a declaration that section 352.-7(g)(6) of Title 18 of the New York Code of Rules and Regulations (NYCRR), under which an advance allowance to a recipient to prevent eviction for nonpayment of rent could be deducted from subsequent grants over a six-month period, was unconstitutional under the Fourteenth Amendment’s Equal Protection Clause and contrary to the provisions of the Social Security Act (§§ 402(a)(7) and (a)(10), 42 U.S.C. §§ 602(a)(7) and' (a)(10)), as well as the regulations promulgated thereunder, 45 C.F.R. § 233.-20(a).¹ In a memorandum of decision and order filed March 3, 1972, the court, Mishler, C. J., held that the constitutional claim was sufficiently substantial to confer pendent jurisdiction over the statutory claim, and that the regulation in issue contravened the Social Security Act as well as the regulations thereunder. On appeal, this court remanded for the reasons set forth in our opinion Hagans v. Wyman, 462 F.2d 928 (2d Cir. 1972). After reconsideration, Chief Judge Mishler rendered a judgment on October 19, 1972 identical to that previously entered which enjoined the defendants from recouping advance allowances made to the plaintiffs.

A second appeal was taken to this court, Hagans v. Wyman, 471 F.2d 347 (2d Cir. 1973), where we held that the plaintiffs had not presented a substantial constitutional claim since the regulation rested upon a rational basis. Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970). We further held that the statutory claim could not be sustained under the theory of pendent jurisdiction. The matter was remanded with instructions to dismiss for lack of jurisdiction. The Supreme Court granted certiorari, Hagans v. Lavine, 412 U.S. 938, 93 S.Ct. 2784, 37 L.Ed.2d 396 (1973).² The Court held that the constitutional claim was not totally frivolous or insubstantial and was sufficient to confer jurisdiction on the district court over both the constitutional and statutory claims; the statutory claim was to be tried first and by a single judge. The Court remanded the case to this court. Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974). In subsequent orders this court vacated its judgment as well as the judgment of the court below and finally on February 25, 1975 directed the district court to reconsider the issues on the merits in light of the amendments to the regulation in issue. Chief Judge Mishler, who had twice found section 352.7(g)(7)³ void, again found the amended regulation to contravene the AFDC program as set forth in the Social Security Act and its regulations. His opinion and judgment of July 28, 1975 enjoined the defendants from attempting to recoup advance payments. This court on September 2, 1975 stayed the judgment of the district court pending a determination of this appeal by the defendants.

When this court remanded this case on February 25, 1975 to reconsider the issues in light of the amendments to the applicable regulations, we did not intend to foreclose consideration of the issue of mootness. It may well be that counsel and the court below considered that we had predetermined the mootness issue since there is no discussion of the question in the opinion now under review.

On September 24, 1974, the State of New York amended section 352.7(g)(7) to provide as follows:

For a recipient of public assistance who is being evicted for nonpayment of rent for which a grant has been previously issued, an advance allowance may be provided upon request to prevent eviction or to re-house the family. Such an allowance may be provided only where the recipient has made a request in writing for such an allowance, and has also requested in writing that his grant be reduced in equal amounts over the next six months to repay the amount of the advance allowance. When there is a rent advance for more than one month, or more than one rent advance in a 12-month period, subsequent grants for rent shall be provided as restricted payments in accordance with Part 381 of this Title.

Moreover, on December 2, 1974 HEW issued Program Instruction APA-PI-75-11,⁴ implementing 45 C.F.R. § 233.-20(a)(12), which in substance permits voluntary recoupment where state procedures assure that the consent of the AFDC recipient thereto is in fact obtained freely and without coercion. None of the named plaintiffs or the class certified below were subject to this amended procedure at the time the action was commenced or indeed when it was considered by the Supreme Court or this court in its prior decisions.

We believe a mootness issue has been created, not because of the lapse of the six-month recoupment period (which may be capable of repetition, yet evading review, Sosna v. Iowa, 419 U.S. 393, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975)), but rather because of the change in the regulations, both state and federal, which now permit voluntary recoupment. Allee v. Medrano, 416 U.S. 802, 818, 94 S.Ct. 2191, 40 L.Ed.2d 566 (1974); Dunn v. Blumstein, 405 U.S. 330, 333 n. 2, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Hall v. Beals, 396 U.S. 45, 48, 90 S.Ct. 200, 24 L.Ed.2d 214 (1969).

Since that issue has not been considered below, we believe it is appropriate that we remand for further consideration. Indiana Employment Division v. Burney, 409 U.S. 540, 93 S.Ct. 883, 35 L.Ed.2d 62 (1973). The issue can be avoided if the court below permits the intervention of an AFDC recipient who is subject to the existing recoupment procedures.

We further note our disagreement with the holding below that all members of the existing class have perforce been coerced because their indigency compels their request for the shelter grant and their concomitant consent to recoupment. It may well be that some AFDC recipients are perfectly willing to avoid dispossession and accept the interest-free advance and consequent recoupment over the six-month period. We note that the record before us gives no indication of what procedures, other than a writing, the state or any particular welfare district may have adopted in order to insure that there is no coercion. We make a point of this not only because it is in our view essential to a decision on the merits but also because it becomes important in determining the basis of possible intervention. As the Supreme Court recently pointed out in Sosna v. Iowa, supra, 419 U.S. at 403 n. 13, 95 S.Ct. 553, the class must be sufficiently “homogeneous” to satisfy Fed.R. Civ.P. 23. The Sosna Court cited Phillips v. Klassen, 163 U.S.App.D.C. 360, 502 F.2d 362, 365-67, cert. denied, 419 U.S. 996, 95 S.Ct. 309, 42 L.Ed.2d 269 (1974) which pointed out that class members may exist whose interests are in fact antagonistic to those ostensibly representative and cannot properly be bound to an adjudication taken in their names. These issues in our view are properly to be determined by the court below after hearing the parties. Therefore, we vacate the judgment and remand for further proceedings consistent with this opinion.⁵

1 . Congress gave the Secretary of Health, Education and Welfare (HEW) the power to promulgate rules and regulations in furtheranee- of the Social Security Act. 42 U.S.C. § 1302.

2 . Mr. Lavine had become the New York Commissioner of Social Services on May 1, 1972 in place of Mr. Wyman, and was substituted in the Supreme Court proceedings as a respondent.

3 . The regulation was originally numbered § 352.7(g)(6) but on December 10, 1971 was renumbered § 352.7(g)(7).

4 . The instruction reads in pertinent part:

The Federal regulation on recoupment of Overpayments places conditions on, and limits the involuntary reduction of future assistance payments to recover prior overpayments. The reduction of future grants to recover overpayment from any cause, with the recipient’s permission, is not prohibited by the regulation. However, any State that provides for voluntary reductions should have procedures to assure that the recipient’s permission is, in fact, obtained freely and without coercion.

(emphasis in original).

5 . The appeal here is potentially flawed by the mootness question as well as by our inability on the record before us to determine whether or not any plaintiff has been in fact coerced since none has been shown to be subject to the new procedures provided by the amended regulation. While maintaining that there is no mootness issue here counsel for the plaintiffs nonetheless by letter dated October 20, 1975 also stated “we respectfully urge that should this Court entertain any doubt about the continuing nature of this case, the Supreme Court decisions make it clear that the appropriate course of action for the appellate court is to remand the case to the trial court for a consideration of the mootness question (citing cases).” We agree that we cannot now meaningfully assess the issues in this appeal on the present record and hence the remand. Fusari v. Steinberg, 419 U.S. 379, 387, 95 S.Ct. 533, 42 L.Ed.2d 521 (1975). While our dissenting brother notes the protracted litigation here, we think prudence as well as a proper regard for the concept of justiciability dictates this course. Festina lente!