Opinion ID: 1203073
Heading Depth: 3
Heading Rank: 2

Heading: C.G.A.'s Appeal[12]

Text: C.G.A. raises two preliminary arguments to overturn the superior court's order which provided that the state is authorized, as representative payee, to use C.G.A.'s social security benefits to pay for his institutional care provided by the state. First, C.G.A. asserts that DHSS has no authority to expend these funds for reimbursement purposes, and hence such spending constitutes an abuse of agency power. Second, C.G.A. contends that the state is preempted by federal law from spending C.G.A.'s funds to reimburse itself for institutional care furnished to C.G.A. We conclude that statutory authority exists for the state to be designated C.G.A.'s representative payee, and that, as payee, the state can devote C.G.A.'s benefit funds to authorized expenditures. However, we conclude that the question whether the state may apply C.G.A.'s SSA benefits towards the cost of his care at McLaughlin should, under the doctrine of primary jurisdiction, be submitted to the Social Security Agency for initial determination.
C.G.A. argues that [n]o state statute or regulation authorizes [DHSS] to utilize C.G.A.'s social security benefits to pay for the cost of his institutionalization. However, AS 47.10.230(b) states, in part, The department may pay the costs of maintenance which are necessary to assure adequate care of the child, and may accept funds from the federal government that are granted to assist in carrying out the purposes of this chapter, or that are paid under contract entered into with a federal department or agency. This statute allows DHSS to accept funds from the federal government. Under the terms of the statute, DHSS's use of these funds must comport with federal law. As C.G.A. concedes, federal statutes and regulations allow states to act as payee for social security beneficiaries. See 20 C.F.R. § 404.2021(b)(7) (1990). [13] Given the clarity and specificity of AS 47.10.230(b) and 20 C.F.R. § 404.2021(b)(7), we find no merit to C.G.A.'s argument that DHSS may only proceed pursuant to regulations adopted under the Administrative Procedure Act. Under the terms of AS 47.10.230(b), however, DHSS may only make such use of C.G.A.'s funds as authorized by federal law. [14]
The superior court's order of May 1989 provides that [t]he state may use these funds to pay for [C.G.A.'s] institutional and other care. C.G.A. argues that this portion of the order is preempted by section 407 because his funds are being spent in a manner contrary to his wishes. He contends that the state may not seize his benefits even if [it] were selected as his payee. In other words, C.G.A. seems to argue that any use of his funds by the state is preempted, even though there have been no formal attachment proceedings. We reject this argument. Social security regulations allow a state to become a representative payee. 20 C.F.R. § 404.2021(b)(7). The regulations also allow representative payees to use some or all of the benefits to pay for appropriate institutional care. [15] The regulations do not require that the representative payee consult with the beneficiary before spending the funds. Thus, so long as the state agency performs its duties as representative payee and spends the funds only on authorized expenses, it would not violate the prohibition on attachment found in section 407(a)'s ban on attachment.
We have previously determined that both federal and state law allow the state to become the representative payee for C.G.A. and allow the state to spend his social security survivor's benefits on any expense authorized by federal law. We must now address the question whether federal law authorizes the state to spend C.G.A.'s funds on his care at McLaughlin. C.G.A. argues that 42 U.S.C. § 407(a) precludes DHSS from seizing his social security benefits over his objection, even under circumstances where DHSS acts as his representative payee. C.G.A. further argues that while 20 C.F.R. § 404.2040 provides that benefits may be used for maintenance and institutional care, the regulations do not address the question of whether a court may compel payment of benefits to a state agency for the costs of incarceration over the beneficiary's objection. [16] In opposition the state argues that the cost of institutional care is reimbursable, regardless of the type of institution, because the component of maintenance is separable from the component of detention. Whether the state can obtain reimbursement for incarceration costs from C.G.A.'s social security benefits is a question which we believe should initially be determined by the Social Security Agency. [17] Thus, while retaining jurisdiction over the issue, we conclude that the parties should be afforded the opportunity to obtain an initial determination of this question from the Social Security Agency. Our decision to afford the parties an opportunity to obtain an initial decision from the Social Security Agency rests upon application of the doctrine of primary jurisdiction. [18] As noted by Professor Davis: Primary jurisdiction is a doctrine of common law, wholly court-made, that is designed to guide a court in determining whether and when it should refrain from or postpone the exercise of its own jurisdiction so that an agency may first answer some question presented. [19] G & A Contractors, Inc. v. Greenhouse, Inc., 517 P.2d 1379, 1382, 1383 (Alaska 1974) contains the following discussion of the doctrine of primary jurisdiction: The legal theory which forms the touchstone of appellants' arguments is founded on the administrative law doctrine of primary jurisdiction. We are instructed by Professor Davis that the doctrine of primary jurisdiction deals with the question of whether a court or an administrative agency should make the initial decision on a given issue. 3 K. Davis, Administrative Law Treatise § 19.01 at 2 (1958). Its purpose is to help a court decide whether it should refrain from exercising its jurisdiction until after the agency has determined some question or an aspect of some question arising in the proceedings before the court. The operational concept underlying the doctrine is the need for an orderly and reasonable coordination of the work of agencies and courts. Whatever the agency's expertise, opines Davis, the court should not act on a subject peculiarly within the agency's specialized field without first taking into account what the agency has to offer. Otherwise, litigants who are subject to the agency's continuous regulation may become victims of uncoordinated and conflicting requirements. This, of course, is hardly to say that the courts must in each and every case defer to an agency determination. For implicit in the concept of orderly and reasonable coordination is the requirement that the question of deferring to agency expertise be decided with reference to the unique facts of each case. [20] (Footnote omitted.) In accordance with the foregoing, we conclude that the particular circumstances in the instant case require that the issue in controversy be referred to the Social Security Agency for initial determination. [21]