Court Opinion

ID: 8966067
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:04:51.164141+00
Date Added: 2024-06-11T17:10:19.267473
License: Public Domain

ERVIN, Circuit Judge,
dissenting:
The resolution of this case requires the court to determine if Virginia’s transfer of assets rule is contrary to federal law. For the reasons explained in the majority panel opinion at 830 F.2d 1283 (CA4 1987), I remain convinced that Virginia’s rule im-permissibly denies public assistance to children that Congress intended to benefit from AFDC funds. Because the reasons for my disagreement on the merits have been amply stated, I write here only to note my concerns with the analysis adopted by the majority today. My concerns involve the fundamentals of how this court should interpret congressional action and how this court should treat its own precedents.
Today the majority concludes that Virginia’s AFDC transfer of assets rule does not violate the availability principle. Just five years ago, however, this court concluded that a substantially identical transfer of assets rule did violate the availability principle. In Randall v. Lukhard, 709 F.2d 257 (CA4 1983), relevant holdings adopted on rehearing en banc, 729 F.2d 966 (CA4 1984), cert. denied, 469 U.S. 872, 105 S.Ct. 222, 83 L.Ed.2d 152 (1984), this court considered “challenges to the Virginia Medicaid program’s former and current ‘transfer of assets’ eligibility rules, as applied to Medicaid applicants and recipients from April 24,1978.” Randall, 709 F.2d at 259. Virginia’s former rule was made part of the state’s Medicaid Plan in 1972. Plain*1089tiffs in that case brought suit in 1980 seeking, inter alia, a declaration that the rule was inconsistent with the Social Security Act. Shortly thereafter, however, Congress enacted the Boren-Long Amendment to the Social Security Act (Pub.L. No. 96-611, § 5, 94 Stat. 3567 (1980), codified at 42 U.S.C. §§ 1382b(c) and 1396a(j)), which explicitly authorized states to adopt transfer of assets rules for Medicaid eligibility. Virginia consequently amended its former rule in 1981 to conform to the requirements of the Boren-Long Amendment. See Randall, 709 F.2d at 261-62, 265-66.
The Randall court unambiguously held that Virginia’s use of transfer of assets' eligibility rules prior to the enactment of the Boren-Long Amendment was contrary to federal law. The court stated that Virginia’s former rule violated the availability principle “by including resources no longer ‘actually available’ to the applicant or recipient. It is apparent that resources that were previously irrevocably transferred to another person, regardless of the amount of compensation received, simply are no longer actually available.” Randall, 709 F.2d at 263-64 (footnote omitted). Virginia’s post-Boren-Long rule was subsequently upheld by this court on rehearing en banc. Randall v. Lukhard, 729 F.2d 257 (CA4 1984).
The issues raised by Virginia’s AFDC rule are substantially identical to those raised by Virginia’s pre-Boren-Long Medicaid rule. Astonishingly, though, the majority chooses to completely ignore Randall. As a result, today’s decision and Randall are patently inconsistent. It makes no sense for this court to hold that resources which are not “actually available” if an individual applies for Medicare become “actually available” if that person applies for AFDC. Unless good reason exists for distinguishing between the present case and Randall this court’s prior decision should either control this case or Randall should be overruled. I can think of no better way to produce “an unpredictable patchwork of federal court decisions based on the availability principle” (supra, at 1087), a result which the majority professes to abhor, than for this court to fail to follow its own controlling precedents.
Along with the majority’s disregard of precedent, the court’s interpretation of congressional silence is equally troubling. The only salient difference between today’s case and Randall is that in the latter case, Congress had explicitly authorized transfer of assets rules for Medicaid after 1980. Incredibly, the majority relies on the Boren-Long Amendment as evidence of Congressional “receptivity” to transfer of assets rules generally. Supra, at 1084. Such reliance is mistaken. The Boren-Long Amendment is only applicable to Medicaid and Supplemental Security Income Programs. The fact that Congress has authorized transfer of assets rules in one public assistance program is not evidence that. Congress approves or endorses the use of such rules in other programs. Quite to the contrary, explicit congressional approval in one context makes congressional silence in a closely related context all the more meaningful. The Boren-Long Amendment indicates that Congress is aware of the potential benefits and detriments of transfer of assets rules and has decided to permit the use of such rules in situations where it thinks appropriate. The decision today in essence broadens the Boren-Long Amendment to cover the AFDC program, a result which the 96th Congress clearly chose not to enact.
Indeed the Supreme Court recently criticized attempts to read congressional silence in the AFDC context as tacit authorization for policies expressly authorized in other federal aid programs. In Lukhard v. Reed, 481 U.S. 368, 107 S.Ct. 1807, 95 L.Ed.2d 328 (1987), the Court considered whether personal injury awards were to be considered as income in determining AFDC eligibility. The Court flatly rejected the respondent’s argument that since personal injury awards were expressly excluded from eligibility determinations in other benefits programs, such awards should be excluded under AFDC. “[T]he fact that Congress was silent in the AFDC statute but has elsewhere been explicit when it wished to exclude personal injury awards from in*1090come tends to refute rather than support a legislative intent to exclude them from AFDC computations.” Reed, 481 U.S. at 376, 107 S.Ct. at 1812, 95 L.Ed.2d at 337 (footnote omitted).
Subsequent legislative action also recommends proper respect for congressional silence. The 100th Congress recently reexamined state transfer of assets rules when it enacted the Medicare Catastrophic Coverage Act of 1988. Pub.L. No. 100-360, § 303, 102 Stat. 683 (1988). This current law restricts state agency discretion by exempting certain categories of assets and by promulgating a new, national rule for Medicaid Programs. See H.R.Rep. No. 105(11), 100th Cong., 2nd Sess. 73, reprinted in 1988 U.S.Code Cong. & Admin.News 803, 857, 896 (“[T]he Committee bill replaces the current law option with a uniform national policy, mandatory on all the States, that is specific to Medicaid eligibility and that reasonably relates the value of the resource improperly transferred to the period of denial of eligibility.”). Contrary to the majority’s assertion that “[t]he best evidence of congressional intent suggests that transfer of assets rules are consistent with federal AFDC policy” {supra, at 1084), the Medicare Catastrophic Coverage Act and the Boren-Long Amendment demonstrate that such rules are a subject of close Congressional attention and will be authorized and revised as Congress, rather than the states or the courts, sees fit.
Ignoring the dictates of precedent and Congressional silence, the majority instead relies upon deference to state administrative action to explain today’s decision. The majority explains that in deciding the legality of Virginia’s AFDC rule we are “to presume that state initiatives are valid in the absence of a clear statement of congressional disapproval....” Dublino [New York State Dep’t of Social Services v. Dublino, 413 U.S. 405, 93 S.Ct. 2507, 37 L.Ed.2d 688 (1973) ], “requires that we ask whether there has been a ‘clear manifestation’ of congressional intent to forbid a state transfer of assets rule such as that before us here.” Supra, at 1084. I cannot agree with the application of Dublino to the present situation. In that case Justice Powell, speaking for the Court, explained repeatedly that the narrow issue before the Court was “whether that part of the Social Security Act known as the Federal Work Incentive Program (WIN) preempts the provisions of the New York Social Welfare Law commonly referred to as the New York Work Rules.” Dublino, 413 U.S. at 407, 93 S.Ct. at 2509 (emphasis added).
It is undisputed that this case does not involve a preemption issue. Thus the unusually great degree of caution which is warranted in preemption cases in order to avoid superseding “the exercise of the power of the state” (Dublino, 413 U.S. at 413, 93 S.Ct. at 2512, quoting Schwartz v. Texas, 344 U.S. 199, 202-203, 73 S.Ct. 232, 97 L.Ed. 231 (1952)), is not warranted here. The sole question here is whether or not Virginia’s administrative action contravenes limitations which the state voluntarily submitted to by choosing to participate in the AFDC program.
Today’s case differs from Dublino in another very important respect. In reading Dublino one cannot help but realize that the Supreme Court’s deferential stance toward the New York work rules at issue derived in part from the nature of those rules. New York’s work rules, while enforced through eligibility requirements, in no way altered the method for determining an AFDC applicant’s available income or resources. Virginia’s transfer of assets rule, on the other hand, is directed solely to redefining the resources to which the state will look in determining eligibility. While the AFDC program has always vested in state administrators great discretion in determining the levels of need and the amount of assistance under each state program (see, e.g., Lukhard v. Reed, 481 U.S. at 371, 107 S.Ct. at 1810, 95 L.Ed.2d at 333), the definition of income and resources which states must consider in determining eligibility has primarily been a federal prerogative.
Dublino is only one of many Supreme Court opinions that have dealt with the validity of state AFDC rules and a review of these other cases reveals that our highest court does not generally approach such *1091issues by presuming, as the majority does here, the validity of the state rule in question. For example, in King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968), the court declared Alabama’s “man-in-the-house” rule invalid. Far from presuming the validity of that rule, the court stated that “[t]he question for decision is whether Congress could have intended that a man was to be regarded as a child’s parent” merely because of his cohabitation with the child’s mother. King, 392 U.S. at 329, 88 S.Ct. at 2139 (emphasis added). Similarly, in Heckler v. Turner, 470 U.S. 184, 105 S.Ct. 1138, 84 L.Ed.2d 138 (1985), the court looked to congressional intent, rather than relying on deference to state administrators, in ruling that tax withhold-ings must be considered as available income rather than as an employment related expense in determining AFDC eligibility.
While courts should, in appropriate circumstances, defer to administrative decision makers, the merits of this case require closer scrutiny. Let us not forget the real needs of those who Congress intended to benefit from AFDC funds — the children of our country who struggle against daily suffering born of poverty. Bearing in mind their plight, it is easy to understand why Congress has never given states the option to deny public assistance to children because of the foolishness of their elders. When a Medicaid recipient fraudulently transfers an asset, he or she will bear the consequences of a loss of eligibility. But when a parent fraudulently transfers a car or a mobile home, children who had no say in the transaction are, by the operation of Virginia’s rule, left without the assistance that Congress intended for them. Such a result is not entitled to a presumption of validity premised on administrative deference. The legality of such a result must be premised, if at all, on careful attention to precedent and Congressional intent.
For these reasons, and those previously articulated in the panel opinion at 830 F.2d 1283 (CA4 1987), I must respectfully dissent.
I am authorized to state that WINTER, Chief Judge, and PHILLIPS, Circuit Judge and SPROUSE, Circuit Judge, join in this dissent.