Court Opinion

ID: 8916765
Source: CourtListenerOpinion
Date Created: 2022-11-27 05:25:43.830626+00
Date Added: 2024-06-11T17:09:03.766868
License: Public Domain

KEITH, Circuit Judge,
dissenting.
I respectfully dissent. I believe the majority’s position is inconsistent with the remedial purpose of the food stamp program. The majority opinion reflects a surprising misunderstanding of basic agency principles and is unduly formalistic in its definition of “specially earmarked”.
The critical question, as the majority has pointed out, is whether a “grantor” has “specifically earmarked” portions of Ms. Shaffer’s Basic Education Opportunity Grant (BEOG) for educational purposes. 7 C.F.R. § 273.9(c)(5)(iv). The majority has concluded that the BEOG grant money is not excludable from income for food stamp purposes because neither the “grantor” nor the “specially earmarked” conditions has been met in the instant case. I disagree.
The majority reasons that “a school can be a grantor for earmarking purposes when it possesses discretionary authority enabling it to place restrictions on the use of grant or fellowship funds. It is only when the school has been delegated such broad authority that the school can place restrictions on the use of funds that are more limiting than those imposed by the originator of the funds. Only then can the institution be considered an agent of the originator of the funds for the purpose of earmarking. An institution does not become a grantor simply by carrying out ministerial administrative tasks at the direction of the owner of the funds.” Ante at 817.
*821This reasoning is faulty. To suggest, as the majority has, that a school can only acquire agency status where it can “place restrictions on the use of funds that are more limiting than those imposed by the originator” is to ignore well-settled agency principles. “The right to control the agent is fundamental to the existence of an agency relationship”. NLRB v. Local No. 64, Falls Cities District Council of Carpenters, 497 F.2d 1335, 1336 (6th Cir.1974). Indeed, the very purpose of an agent is to “carry out the ministerial administrative tasks at the direction” of the principal. Id.; Thropp v. Bache Halsey Stuart Shields, Inc., 650 F.2d 817, 819-20 (6th Cir.1981); Southern Pacific Transportation Co. v. Continental Shippers Ass’n Inc., 642 F.2d 236, 238 (8th Cir.1981); Restatement (Second) of Agency § I-
Owens College, therefore, is an agent of the grantor, the Department of Education. The Department of Education has delegated to Owens College the authority to act within its regulations to make individual determinations of student qualification for grants. Moreover, it has required Owens College to perform these earmarking functions according to its regulations. This is the essence of an agency relationship. Turano v. Department of Human Services, 90 N.J. 538, 449 A.2d 1 (N.J.1982) was correctly decided. A college is a “grantor” within the meaning of 7 C.F.R. § 273.9(c)(5)(iv) where the government has delegated most of the administrative functions to the college, advanced a lump sum grant for distribution, and relied upon the college to determine the amount distributed to individual students. Id. at 5-6.
Finally, the evidence of earmarking contained in this record is sufficiently specific to satisfy the “specially earmarked” criteria of 7 C.F.R. § 273.9(c)(5)(iv). The special earmarking provided by an affidavit and a student budget itemizing the tuition, books, travel, and the various elements of personal expenses as defined by Owens College is sufficiently specific to satisfy the regulations.