Court Opinion

ID: 9487237
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:11:36.894184+00
Date Added: 2024-06-11T17:52:09.816469
License: Public Domain

HEANEY, Senior Circuit Judge,
dissenting.
I respectfully dissent. I would hold that 45 C.F.R. 233.20(a)(3)(i)(B)(2), which limits the automobile exemption for an AFDC recipient to $1,500 ownership interest in an automobile, is arbitrary and capricious in light of the failure by the Health and Human Services Secretary to take into account the effects of inflation since the regulation went into effect in 1982. This view is consistent with decisions reached by three district courts. See Lamberton v. Shalala, 857 F.Supp. 1349 (D.Ariz.1994); Brown v. Shalala, No. C-92-184-L, 1993 WL 742661 (D.N.H. July 21, 1993), appeal filed, No. 93-2369 (1st Cir. Dec. 23, 1993); Hazard v. Sullivan, 827 F.Supp. 1348 (M.D.Tenn.1993), appeal filed sub nom. Hazard v. Shalala, No. 93-6214 (6th Cir. Sept. 17, 1993).1
In particular I am convinced by the approach and reasoning of Hazard v. Sullivan, which identified the core issue as “the extent to which the federal government may circumscribe one of its means-tested programs in order to save funds and still maintain a rational relation to the purpose of the program.” 827 F.Supp. at 1350. That court focused on the Secretary’s specific proffered explanation for the $1,500 limit and concluded that it no longer provided a rational basis for the regulation.
The Secretary offered the following explanation when adopting the $1,500 limit:
We chose $1,500 as the maximum equity value for an automobile on the basis of a Spring 1979 survey of food stamp recipients. Data from that survey suggest that 96 percent of all food stamp recipients who own cars had equity value in them of $1,500 or less. In that the Federal maximum limit should be set within the range of the vast majority of current recipients and given that the food stamp population *969tends to be, on average, more affluent than AFDC recipients, this limit appears reasonable and supportable.
47 Fed.Reg. 5648, 5657 (1982), cited in Hazard, 827 F.Supp. at 1352 (emphasis added). The majority notes that the 1979 survey indicated that the $1,500 limit would affect only three percent of Food Stamp recipients, and presumably fewer AFDC recipients, and therefore concludes that the $1,500 limit strikes a reasonable balance between Congress’s mandates to reduce federal spending while providing assistance to families in need. Even if the three percent figure were accurate in 1979, however, the percentage of AFDC recipients affected by the limit today would surely be higher given the level of inflation of automobile costs in the intervening fifteen years.
The Secretary chose the figure of $1,500 because the data indicated that this amount would have a negligible effect in terms of destroying current recipients’ eligibility for AFDC. Athough Congress certainly may specify cuts in federal assistance programs that have the effect of making fewer families eligible for a particular program — as indeed Congress did when it reduced by half the amount of resources a family could possess and still be eligible for AFDC — Congress expressly delegated to the Secretary the task of fixing the amount of the automobile equity exemption, and the Secretary’s stated rationale was to choose an exemption amount at which relatively few otherwise eligible families would be eliminated from the program due to their ownership of an automobile. The government argues that the Secretary’s statement reflects only a concern about maintaining the eligibility of then-current AFDC recipients so that large numbers of families would not be terminated abruptly. I disagree with such a narrow interpretation and conclude that the regulation fixing the $1,500 exemption, absent any adjustment for inflation, is no longer supported by the Secretary’s stated rationale and therefore is arbitrary and capricious.
The fact that Congress did not mandate periodic review of the automobile exemption amount does not change my conclusion. As the Hazard court pointed out,
[fjirst, congressional silence on the need for review of the effects of inflation does not necessarily equal a bar to such review. Second, the Secretary himself rendered this silence unimportant by promulgating a rationale for the regulation that implied sensitivity to changing financial conditions. Even if the Secretary generally has no affirmative duty to review regulations in the absence of congressional direction to do so, where a regulation’s rationality is dependent on current socioeconomic conditions periodic review is essential to preserve that rationality.
827 F.Supp. at 1353 (citations omitted).
In my view, this regulation no longer has a rational basis, and I would hold it invalid.

. In addition to these cases on appeal to the First and Sixth Circuits, there is an appeal pending in the Ninth Circuit from a decision holding the regulation valid. See Gamboa v. Rubin, No. 92-00397, 1993 WL 738386 (D.Haw. Nov. 4, 1993), appeal filed, No. 94-15302 (9th Cir. Jan. 26, 1994). The only circuit to reach the issue has also concluded that the regulation is valid. See Falin v. Sullivan, 776 F.Supp. 1097 (E.D.Va. 1991), aff'd per curiam, 6 F.3d 207 (4th Cir. *9691993), cert. denied,-U.S.-, 114 S.Ct. 1551, 128 L.Ed.2d 200 (1994).