Title: Bourne v. Dept. of Social Welfare

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 89-113


Betty Bourne                                 Supreme Court

     v.                                      On Appeal from
                                             Human Services Board
Department of Social Welfare
                                             October Term, 1990



Alayne Rabow, Pamela Kraynak, Alan B. George, William Farrell and Isabel R.
 Childs, board members

Robert A. Clark, Vermont Legal Aid, Inc., Rutland, for plaintiff-appellee

Jeffrey L. Amestoy, Attorney General, Montpelier, and Donna Watts, Assistant
  Attorney General, and James Gratton, Law Clerk (On the Brief), Waterbury,
  for defendant-appellant


PRESENT:  Allen, C.J. and Gibson, J., and Peck, J. (Ret.) and Martin, Sup.
          J., Specially Assigned



     GIBSON, J.   The Department of Social Welfare appeals from a Human
Services Board ruling in favor of petitioner Betty Bourne.  We reverse.
     In May of 1988, petitioner met a Department fraud investigator to
discuss allegations that her failure to report some "household income" on
her food stamps application constituted an intentional food stamp program
violation.  At the end of the meeting, petitioner executed a waiver of her
right to a hearing on the merits of the alleged violation.  Based upon the
waiver, the Department disqualified petitioner from receiving food stamps
for a six-month period.  Because petitioner was no longer receiving food
stamps, the disqualification period was postponed until petitioner again
became eligible and applied for benefits.  Implementation of the penalty is
still pending.
     Shortly after the disqualification decision was issued, petitioner
attempted to rescind her waiver.  When the Department denied the request,
she petitioned the Board for relief.  The Board reversed the Department's
refusal to allow rescission of the waiver, holding that (1) it had juris-
diction, and (2) a waiver can be revoked any time before the disqualifi-
cation period takes effect, provided the Department is not prejudiced.  The
determinative issue on appeal is whether the Board had jurisdiction. (FN1)
     The governing regulation, 7 C.F.R. { 273.16(f)(2)(ii), provides:
            (ii) No further administrative appeal procedure exists
          after an individual waives his/her right to an adminis-
          trative disqualification hearing and a disqualification
          penalty has been imposed.  The disqualification penalty
          cannot be changed by a subsequent fair hearing decision.
          The household member, however[,] is entitled to seek
          relief in a court having appropriate jurisdiction.  The
          period of disqualification may be subject to stay by a
          court of appropriate jurisdiction or other injunctive
          remedy.
The parties disagree about when a penalty is "imposed": the Department
argues that it occurs when the disqualification decision is issued, whereas
petitioner contends that it occurs when the disqualification period begins
-- that is, when food stamps are actually withheld from an individual who
has applied and is otherwise eligible for them.
     It is significant that { 273.16(f)(2)(ii) does not use the phrase
"disqualification period."  Instead, it provides that no further adminis-
trative appeal lies after the waiver is executed and the penalty imposed.
In contrast, the regulation consistently uses the phrase "disqualification
period" to mean the time period when the penalty is implemented.  See id., {
273.16(f)(2)(i)-(iv). (FN2) For example, the regulation provides that the dis-
qualification period shall be postponed when the recipient is no longer
receiving benefits until the individual again applies and is eligible.  Id.,
{ 273.16(f)(2)(iii).  This distinction in language implies that the time
when the penalty is imposed is not identical to the disqualification
period.  We conclude that the better construction is that a penalty is
"imposed" within the meaning of { 273.16(f)(2)(ii) when a waiver has been
executed and the disqualification decision is issued.  Contrary to
petitioner's contention, our conclusion does not leave her without a remedy;
after imposition of the penalty, an individual seeking relief is directed to
an "appropriate court," see id., { 273.16(f)(2)(ii), which, in Vermont, is
the superior court.
     Section 273.16(f)(2)(ii) clearly establishes that no administrative
appeal procedure is available after the disqualification penalty is imposed.
In the instant case, the Department's decision to disqualify petitioner from
receiving food stamps was issued before petitioner applied to the Board for
relief.  Accordingly, we hold that the Board did not have jurisdiction.
Although we therefore do not reach the merits, we are constrained to add
that the Department's forms are at best confusing and, in different circum-
stances, might well violate petitioner's due process rights. (FN3)
     Reversed.



                                        FOR THE COURT:



                                        ________________________________
                                        Associate Justice



FN1.    In concluding that it had jurisdiction, the Board relied on 3 V.S.A
{ 3091(a), providing in pertinent part:
       An applicant for or a recipient of assistance . . . from . . .
     the department of social welfare . . . may file a request for fair
     hearing with the human services board.  An opportunity for a fair
     hearing will be granted to any individual requesting a hearing
     because his or her claim for assistance, benefits or services is
     denied, . . . or because the individual is aggrieved by any other
     agency action affecting his or her receipt of assistance, benefits
     or services. . . .
As the Board recognized, 7 C.F.R. { 273.16(f)(2)(ii) preempts { 3091(a) to
the extent the two are in conflict. See Trustees of the Diocese of Vermont
v. State, 145 Vt. 510, 514,