Source: http://openjurist.org/617/f2d/163
Timestamp: 2014-11-26 14:22:01
Document Index: 531352995

Matched Legal Cases: ['§ 1983', 'art, 28', '§ 1343', '§ 602', '§ 233', '§ 602']

617 F2d 163 Oldham v. J Ehrlich H | OpenJurist
617 F. 2d 163 - Oldham v. J Ehrlich H	Home617 f2d 163 oldham v. j ehrlich h
617 F2d 163 Oldham v. J Ehrlich H 617 F.2d 163
Dianne OLDHAM, on behalf of herself, her minor children, andall other persons similarly situated, Appellants,andAnnie Dillard, on behalf of herself, her minor children, andall other persons similarly situated, Intervening Appellants,v.Eldin J. EHRLICH, Individually and in his capacity asDirector of the Nebraska State Department of Public Welfare;and Alan H. Ihms, Individually and in his capacity asAssistant Director of the Nebraska State Department ofPublic Welfare, Appellees.
No. 79-1938.
Submitted March 5, 1980.Decided March 12, 1980.
John B. Milligan, Lincoln, Neb., for appellant.
Paul L. Douglas, Atty. Gen. and Royce N. Harper, Asst. Atty. Gen., Lincoln, Neb., for appellee.
Invoking 42 U.S.C. § 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343, welfare recipients challenged a Nebraska regulation on the basis that it conflicted with the Social Security Act and violated the Due Process Clause. The district court1 ultimately held that although the regulation was invalid on both statutory and constitutional grounds, the defendants Nebraska welfare officials had not enforced it in bad faith and therefore were not liable for compensatory or punitive damages. The court further held that the plaintiffs were entitled to an award of attorneys' fees, but limited the award to a nominal amount because plaintiffs' attorneys worked for a legal aid organization.
The principal issues on appeal are (1) whether the district court had jurisdiction, and if so, (2) whether the district court's attorneys' fee award was proper. Although we conclude the court had jurisdiction, we hold it abused its discretion in awarding only a token attorneys' fee.
Plaintiffs were recipients of Aid to Families with Dependent Children (AFDC). Their eligibility for AFDC benefits depended on their financial need, which was determined by a calculation of their income and resources. See generally 42 U.S.C. § 602(a)(7).
In January 1969, the Department of Health, Education and Welfare (HEW) issued a regulation specifying that, in the calculation of income and resources, "only such net income as is actually available for current use on a regular basis will be considered and only currently available resources will be considered." National Welfare Rights Organization v. Mathews, 174 U.S.App.D.C. 410, 420, 533 F.2d 637, 647 (D.C.Cir.1976) (quoting 45 C.F.R. § 233.20(a)(3)(ii)(c) (1974)). The Nebraska State Department of Public Welfare (the department) issued a similar regulation. Under this regulation, only the welfare recipient's equity in his automobile was considered as an available resource.
In March 1975, however, HEW issued a new regulation, which specified that the retail market value of a recipient's automobile, rather than his equity in it, must be considered as an available resource. On October 1, 1975, the department followed HEW's lead and implemented its own retail market value regulation.
As a result of the new regulation, the department revalued the resources attributable to plaintiffs' automobiles and notified them that their benefits would be suspended.2 Plaintiffs, with the assistance of legal aid attorneys,3 then sued for equitable relief, compensatory and punitive damages, costs, and attorneys' fees.
On November 1, 1976, the department rescinded the offending regulation and reverted to valuing automobiles on the basis of the amount of owner's equity. This action mooted plaintiffs' claim for equitable relief but left alive their claim for damages.
In January 1977, the court granted the plaintiffs' motion, under Fed.R.Civ.P. 37(a), to compel production of all departmental documents that recorded communications between the department and HEW concerning the retail market value regulation. The court reserved its ruling on plaintiffs' request for the expenses and attorneys' fees incurred in connection with the motion.
In January 1979, the district court issued its first ruling on the question of damages. The court held that the department's regulation was both statutorily and constitutionally invalid. The statutory holding followed from National Welfare Rights Organization v. Mathews, supra, 533 F.2d at 647, which, in striking down the HEW regulation on which the Nebraska regulation was modeled, held that "availability is required by the statute (42 U.S.C. § 602(a)(7))" and that it was improper for HEW to contend "that because the property itself is available, gross market value (and not the equity) is available." That contention was "contrary to fiscal realities." Id.
The constitutional holding followed from Vlandis v. Kline, 412 U.S. 441, 452, 93 S.Ct. 2230, 2236, 37 L.Ed.2d 63 (1973), which struck down a state university's policy of subjecting a student to a higher, nonresident tuition rate if he had been living outside the state at the time he applied for admission to college. The Supreme Court held that the Due Process Clause forbade the state universityto deny an individual the resident rates on the basis of a permanent and irrebuttable presumption of nonresidence, when that presumption is not necessarily or universally true in fact, and when the State has reasonable alternative means of making the crucial determination.
Id. at 452, 93 S.Ct. at 2236. The district court invoked Vlandis to rule that
(t)he defendants' promulgation and enforcement of the regulation here created a conclusive and irrebuttable presumptio