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Court Decides if Case Against Social Services can be a Class Action

 

This Article 78 proceeding raises the questions whether (1) the County Commissioner of Social Services has discretion as a matter of policy and without regard to the facts of the particular case to refuse a special grant to an aid to dependent children recipient who claims that she and the children are destitute because cash has been stolen from her and (2) whether the proceeding can be maintained as a class action.

The petition alleges that petitioner is the mother of four children, that she receives public assistance in the category of Aid to Dependent Children, that on July 31, 1971 she received a check issued by the Department of Social Services in the amount of $398.00 which she cashed at the bank where she spent $3.00, putting the remaining $395.00 in an envelope in her pocketbook, that she went to the laundromat and then back to the bank and when she sought to pay for the purchases then made could not find the envelope or the money, that she reported her loss to the Department of Social Services and the police, that she was told by the Department that nothing could be done, that its failure to act on petitioner’s request results from its policy of refusing to give emergency aid or to duplicate stolen checks, that without the issuance of a duplicate grant of $395.00, petitioner and her children face exhaustion of their food supply and eviction from their rented home.

CPLR 7804(e) directs that ‘The body or officer shall file with the answer a certified transcript of the record of the proceedings under consideration, unless such a transcript has already been filed with the clerk of the court. The respondent shall also serve and submit with the answer affidavits or other written proof showing such evidentiary facts as shall entitle him to a trial of any issue of fact.’ Despite those explicit and mandatory provisions and despite the fact that Article 78 procedure ‘is exactly analogous to summary judgment’, respondent has contented himself with serving an answer denying some allegations, denying others on information and belief, and raising four affirmative defenses, but has filed neither transcript nor answering affidavit.

Although the petition raises the broader question whether there was in fact a loss or theft, it is evident from petitioner’s brief and particularly from the arguments advanced in relation to the class action issue, that the question which petitioner seeks to have determined is the narrower one stated at the beginning of this decision:–whether respondent has discretion as a matter of policy and without regard to the facts to refuse a special grant.

The limitation by petitioner’s brief to the narrower question has important bearing on whether the proceeding may be maintained as a class action. So limited, the issue becomes not whether respondent has determined on substantial evidence that petitioner and her children are not destitute or that no loss or theft occurred, but whether respondent’s refusal as a matter of policy to consider the facts is impermissible under governing statutes and regulations.

Furthermore, a judgment in favor of all members of the class (persons denied a special grant by reason of respondent’s policy refusal to consider their requests on the facts) ‘could not, of course, prejudice the interests of any members of the class’,

The strongest arguments against sanctioning a class action in this case are (1) that Article 78 proceedings are intended to be summary in nature and should not, therefore, be encumbered with the additional policy considerations which the classification device involves, and (2) that in light of the doctrine of Stare decisis no benefit will be derived from a class action judgment in this case. There may be Article 78 proceedings in which, because of the urgency of the situation at hand and the difficulty of fairly protecting the interest of nonparty members of the class, a court may as a matter of discretion reject class treatment of the proceeding.
While ‘stare decisis furnishes almost the same advantages as a class action’, Weinstein, Revision of Procedure: Some Problems in Class Actions, 9 Buffalo L.R. 433, 446, there is an important difference: ‘* * * the Stare decisis doctrine is an elastic one allowing the litigant to challenge the soundness of an outstanding decision whereas, under the doctrine of Res judicata, the decision is binding even though it is plainly wrong’, It is precisely this difference which impels petitioner’s having brought this proceeding as a class action. Petitioner’s supporting affidavit and brief state that the problem is a continuing one and that respondent continues to litigate the issue despite decisions adverse to his policy. Respondent has not controverted those statements.

The issues before the Court present a classic case for abstention. It is for the state courts, in the first instance, to pass on the program which the New York Department of Social Services has formulated as the best means of disbursing its large but finite funds.’

Federal court abstention is a mark of respect for the position of state courts in our federal-state system, not a Sword of Damocles to be held over the head of the state judge to whom the issue at hand is then presented, and any argument in the latter vein is wholly improper.
Turning now to the merits of the proceeding, the court notes first that respondent’s reliance upon chapter 184 of the Laws of 1969 was rejected by the Appellate Division in a case. Moreover, since the Borders decision the flat grant system established by chapter 184 has been revised by the legislature as a result of the Supreme Court’s decision in another case where it was made clear that while a state may use its Own funds in any way it chooses providing it violates no provision of the Constitution, it is a federal question whether a state program for expenditure of Federal monies conforms to the requirements of the Social Security Act. [67 Misc.2d 695] Reacting to that decision, the New York legislature amended both the flat grant provisions of Social Services Law § 131–a and the declaration of standards in Social Services Law § 131, the latter by the affirmative direction, in subd. 3, that
The legislature hereby declares its intent to make provision for the state to meet all necessary federal requirements under the social security act and therefore revises appropriate sections of the social services law by this act to carry out such intent.

It is, thus, clear that New York’s legislature has opted to conform to the federal system. The validity and interpretation of any rule of the State Board of Social Welfare, regulation of the Department of Social Services or policy of the County Commissioner of Social Services is, therefore, governed by the Constitution of the United States, the Social Security Act and regulations of the United States Department of Health, Education and Welfare adopted under that Act, the New York State Constitution and the Social Services Law. Indeed the State Department of Social Services has expressly so recognized in 18 NYCRR § 352.2(c) quoted above, which authorizes the making of a duplicate grant ‘because the cash has been lost or stolen’ but states that such duplicate allowance is not reimbursable by the State. In summary, respondent’s policies must conform to federal standards even though it be wholly county funds that are expended, because the legislature has authority under the State Constitution to mandate such expenditures upon the county and has declared the eligibility for public assistance must conform to applicable federal requirements.

Viewed in this context, neither respondent’s stated policy nor the state’s effort to define the ’emergency assistance’ provided for in Social Services Law § 350–j so as to exclude ‘destitution * * * due to loss, theft or diversion of a grant already made’ can be sustained.
Section 350–j provides in pertinent part as follows: 1. Any inconsistent provisions of this chapter or of any other law notwithstanding, 1 so long as federal aid is available therefor, a social services district shall provide emergency assistance as herein defined to persons eligible, including migrant workers with families; 2. The term ’emergency assistance’ means aid, care and services furnished for a period not in excess of thirty days in any twelve month period, in the case of a needy child under the age of twenty-one who is living with a person related to him by blood, marriage or adoption who is eligible to receive aid to dependent children on his behalf pursuant to provisions of this chapter and the rules of the board and regulations of the department; 3. Emergency assistance to needy families with children shall be provided in accordance with the rules of the board and regulations of the department for children who are without available resources, and when such assistance is necessary to avoid destitution or to provide them with living arrangements in a home, and such destitution or such need did not arise because such children or relatives refused without good cause to accept employment or training for employment.

It follows that 18 NYCRR § 372.2(e) insofar as it seeks to exclude from eligibility for emergency assistance those whose destitution arises through theft or loss is invalid, and that since Social Services Law § 350–j mandates emergency assistance by the county in all destitution cases, respondent’s policy of denying such emergency assistance as a matter of discretion and without reference to the facts is likewise invalid. It is, therefore, unnecessary to consider petitioner’s further argument that § 352.2(c) of the Regulations which permits duplication of a lost or stolen grant, is not merely permissive but mandatory. If it be assumed that that provision is simply permissive in cases not involving destitution, it is nonetheless true that in cases involving destitution respondent must perform the duty enjoined upon him by Social Services Law § 350–j and consider such applications for emergency assistance on their facts.
Though as noted above, respondent has served no answering affidavit, summary judgment simply directing issuance of $395.00 in emergency assistance should not be granted since the facts concerning the claimed loss or theft are exclusively within petitioner’s knowledge. Rather than direct a trial of the factual issue which respondent should have determined in the first instance, the court will, following a procedure akin to that suggested in a case, direct that respondent, within five days after service upon him of a copy of the judgment to be entered hereon, pay to petitioner $395.00 in emergency assistance subject, however, to respondent’s right to reimburse himself for such payment out of future sums payable to petitioner should it be determined by respondent after consideration of the facts (and be affirmed on fair hearing and on Article 78 review if sought by petitioner that destitution within the meaning of Social Services Law § 35–j and 18 NYCRR § 372.2 as above limited has not been established.

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