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USCA1 Opinion

June 10, 1993

UNITED STATES COURT OF APPEALS


FOR THE FIRST CIRCUIT
____________

No. 92-1764
JENNA SKIDGEL, ET AL.,
Plaintiff, Appellee,
v.
MAINE DEPARTMENT OF HUMAN SERVICES,
Defendant, Appellee.
v.
LOUIS W. SULLIVAN,
Defendant, Appelllant.

No. 92-1824
JENNA SKIDGEL, ET AL.,
Plaintiffs, Appellees,
v.
MAINE DEPARTMENT OF HUMAN SERVICES
ROLLIN IVES,
Defendants, Appellants.
____________
ERRATA SHEET

The opinion of this court issued on June 3, 1993, is amended


as follows:
Page

5,

footnote

5,

line

5:

Change

"principle"

to

"principal".
Page 6,
"principal".

footnote

7,

line

2:

Change

"principle"

UNITED STATES COURT OF APPEALS


FOR THE FIRST CIRCUIT
____________________
No. 92-1764
JENNA SKIDGEL, ET AL.,
Plaintiff, Appellee,
v.
MAINE DEPARTMENT OF HUMAN SERVICES,
Defendant, Appellee.
v.
LOUIS W. SULLIVAN,
Defendant, Appellant.
No. 92-1824
JENNA SKIDGEL, ET AL.,
Plaintiffs, Appellees,
v.
MAINE DEPARTMENT OF HUMAN SERVICES
ROLLIN IVES,
Defendants, Appellants.

to

____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
____________________
[Hon. Brock Hornby, U.S. District Judge]
___________________
____________________
Before
Torruella, Circuit Judge,
_____________
Bownes, Senior Circuit Judge,
____________________
and Stahl, Circuit Judge.
_____________
____________________

Marina E. Thibeau, Assistant Attorney General, and Michael


__________________
________
Carpenter, Attorney General, on brief for defendant-appellant Rol
_________
Ives, Commissioner, Maine Department of Human Services.
John F. Daly, Appellate Staff, Civil Division, Department
_____________
Justice, with whom Stuart M. Gerson, Assistant Attorney General,
________________
Richard S. Cohen, United States Attorney, and Robert S. Greensp
_________________
__________________
were on brief for third-party defendant-appellant Louis W. Sulliv
Secretary of Health and Human Services.

Frank D'Alessandro, with whom James Crotteau, Patricia Ender,


__________________
______________ ______________
Pine Tree Legal Assistance, were on brief for plaintiffs-appellees.

__________________________
____________________
June 3, 1993
____________________

BOWNES, Senior Circuit Judge.


BOWNES, Senior Circuit Judge.
____________________
Department of Health
Department of Human
district

Dependent

conflicted

Services (DHS) appeal a

At
provisions

the Maine

decision of the

regarding Aid to

(AFDC),

upon

plain language

finding

of the

Families
that

they

Social Security

601 et seq.
__ ___
issue

of

the

602(a)(38), covering
and

and policies

Children

with the

Act, 42 U.S.C.

unit,1

and Human Services (HHS) and

court invalidating and enjoining the enforcement of

certain regulations
with

The Secretary of the

42

is

the

Social
the

U.S.C.

application
Security

composition
607

of
Act,

of

the

(b)(1)(B)(iv),

two
42

distinct
U.S.C.

AFDC

filing

covering

the

____________________
1.

42 U.S.C.

602(a)(38) provides, in pertinent part, that,

in making the determination under paragraph (7)


with respect to a dependent child and applying
paragraph (8), the State agency shall (except as
otherwise provided in this part) include-(A) any parent of such child, and
(B) any brother or sister of such child, if
such brother or
sister meets the
conditions

described in clauses (1) and (2) of section 606(a)


of this title or in section 607(a) of this title,
if such parent, brother, or sister is living in the
same home as the dependent child, and any income of
or available for such parent, brother, or sister
shall be included in making such determination . .
. [.]
We refer to the AFDC filing unit as the family filing unit,
and to this provision of the statute as the family filing
rule.
-22

deduction

of

payment,2 to
where

unemployment

a particular situation.

the principal

wage-earner

becomes unemployed, and the


one child common
who

is

compensation

the

of

an

AFDC

That situation occurs

in a

two-parent household

household includes both at least

to the two parents

stepchild

from

the

and at least
principal

one child

earner.

The

stepchild[ren] of the principal earner receive AFDC, pursuant


to

42 U.S.C.

606(a), because they are deprived of parental

support due to the continuous absence from the home, death or


incapacity

of a parent.3

Prior to the

____________________
2.

42 U.S.C.

607(b)(1)(B)(iv) provides,

unemployment of the

for the reduction of the aid to families with


dependent children otherwise payable to any child
or relative specified in subsection (a) of this
section
by the
amount
of any
unemployment
compensation that such child's parent described in
subparagraph (A)(i) receives under an unemployment
compensation law of a State or of the United States
. . . [.]
3.

42 U.S.C.

606(a) provides:

The term "dependent child" means a needy child (1)


who has been deprived of parental support or care
by reason of the death, continued absence from the
home (other than absence occasioned solely by
reason of the performance of active duty in the
uniformed services of the United
States), or
physical or mental incapacity of a parent, and who
is living with his father, mother, grandfather,
grandmother,
brother,
sister,
stepfather,
stepmother, stepbrother, stepsister, uncle, aunt,
first cousin, nephew, or niece, in a place of
residence maintained
by one or more of such
relatives as his or their own home, and (2) who is
(A) under the age of eighteen, or (B) at the option
of the State, under the age of nineteen and a fulltime student in a secondary school (or in the
-33

principal

earner,

child[ren]

neither

the

principal

earner

nor

the

common to both parents are included in the family

filing unit.
Pursuant

to HHS/DHS

policy and

regulations, once

the principal

earner becomes

rule requires

that the

unemployed, the family

principal earner and

common to both

parents be

well.4

inclusion is required

Such

are considered

included in the

dependent under

statute, 42 U.S.C.

filing

the child[ren]
filing unit,

as

because the child[ren]

a separate provision

of the

607(a), due to the unemployment

of the

____________________
equivalent
level
of vocational
or technical
training), if, before he attains age nineteen, he
may reasonably be expected to complete the program
of such secondary school (or such training)[.]
4. The Secretary's interpretation of the family filing rule
has been embodied in regulations and official transmissions.
See 45 C.F.R.
206.10(a)(1)(vii) which provides, in part,
___
that,
in order for the
family to be eligible, an
application with respect to a dependent child must
also include, if living in the same household and
otherwise eligible for assistance:
(A) Any natural or adoptive parent, or stepparent
(in the case of States with laws of general
applicability); and
(B)
Any
sister.
. . .

blood-related

or

adoptive

brother

or

See also SSA Transmittal 86-1 at 9 (Jan. 12, 1986) (on two___ ____
step process whereby application of family filing rule must
precede determination of need).
-44

parent

who

is

the principal

Secretary's interpretation

of

earner.5

According to

the

the family

filing rule,

the

common child[ren] now meet "the conditions described in . . .


607(a)."

42 U.S.C.
In

the

602(a)(38).

case

of

the

plaintiff

class,6

the

unemployment compensation received by the principal earner is


then

subtracted from the AFDC

composed

family

233.20(a)(3)(ii)

filing
(B),

unit.

benefit payable to the newlyPursuant

unemployment

to 45

compensation

C.F.R.
is

not

considered as income and does not figure into the calculation


of

need, but

is deducted

from the

AFDC payment

after the

____________________
5.

42 U.S.C.

607(a) provides:

The term "dependent child" shall, notwithstanding


section 606(a) of this title, include a needy child
who meets the requirements of section 606(a)(2) of
this title, who has been deprived of parental
support or care by reason of the unemployment (as
determined in accordance with standards prescribed
by the Secretary) of
the parent who is the
principal earner, and who is living with any of the
relatives specified in section 606(a)(1) of this
title in a place of residence maintained by one or
more of such relatives as his (or their) home.
6.

The class was certified as follows:


All households in the State of Maine who are
recipients of AFDC benefits as of November 16,
1990, or who will apply for AFDC benefits on or

after November 16, 1990, and


whose household
composition includes at least two adults and two
children where at least one child is the child of
one but not both of the adults in the household and
at least one child is the child of both adults in
the household and where the adult who is not the
parent of the first child receives unemployment
benefits.
-55

amount of that payment


treatment of

has been established.7

unemployment

interpretation

and

607(b)(1)(B)(iv).

compensation is

implementation
The

practical

of
result

This special

the
42
of

Secretary's
U.S.C.
the

HHS/DHS

policies is a reduction of the AFDC payment going to families


in the plaintiff class.8
____________________
7.

45 C.F.R.

233.20(a)(3)(ii)(B) provides:

In determining financial eligibility and the amount


of the assistance payment all remaining income
(except unemployment compensation received by an
unemployed principal earner) and, except for AFDC,
all resources may be considered in relation to
either the State's need standard or the State's
payment
standard.
Unemployment
compensation
received by an unemployed principal earner shall be
considered only by subtracting it from the amount
of the assistance payment after the payment has
been determined under the State's payment method[.]

8. The operation of these policies can be illustrated by


taking the case of one of the plaintiffs, Deborah Blake. Ms.
Blake and her husband live with their mutual child, Shawn
Blake, and Ms. Blake's two children, James and Courtney
Morton. While Mr. Blake was employed, the family received
AFDC for Ms. Blake's children, James and Courtney Morton, who
met the definition of dependent children provided in
606(a)
of the statute.
At that time, the family filing rule
required that
the
two dependent children, James and
Courtney, and their parent, Ms. Blake, be included in the
filing unit.
The rule did not require the inclusion of
either Shawn Blake, because he was not considered a dependent
child, or Mr. Blake, because he was not the parent of an
AFDC-eligible child.
A portion of Mr. Blake's income was,
however, deemed available to the filing unit, pursuant to the
stepparent deeming rule, explained infra Part I, Section A.
_____
Before the unemployment of Mr. Blake, the family received
$453.00 each month in AFDC, and Mr. Blake earned $697.00 a
month.
Once Mr. Blake became unemployed, the family filing rule
required the inclusion of both Shawn (who then met the
definition of a dependent child in
607(a)) and his parent,
Mr. Blake. Because unemployment compensation is disregarded
-66

Plaintiffs
Rollin Ives,
Services,

payments

that

standards
going

third-party

this action

Commissioner of

arguing

statutory

brought

the Maine Department

the

in

to members

against defendant

State

was

violating

determining

the

of their

class.

complaint against

amount

Louis Sullivan,

Ives

of Human
federal
of

AFDC

filed a

Secretary of

the United

States Department

of Health and

Human Services.

The case went to the district court on a stipulated record.


In a memorandum decision, the district
in

favor of the plaintiffs

interpretations of both
602(a)(38),
compensation,
conflicted
Skidgel
_______

and

the

42

U.S.C.

with

v. Ives,
____

on the grounds

that the HHS/DHS

the family filing rule, 42


provision

the plain

U.S.C.

regarding

unemployment

607(b)(1)(B)(iv),

impermissibly

meaning

No. 90-0209-B,

of

the statute.

slip op.

1992) [hereinafter Memorandum Decision].


read the family filing rule to require
as dependent under

court ruled

The

(D. Me.

See
___
Jan. 2,

district court

that children defined

607(a) be determined financially "needy"

before they could be included in the filing unit.

See id. at
___ __

____________________
in the determination of need, the new filing unit initially
met the criteria for the maximum AFDC payment for a family of
five, $685.00.
Pursuant to regulations interpreting
607(b)(1)(B) (iv), the State then subtracted the amount of
unemployment compensation received by Mr. Blake, $498.80,
from the maximum AFDC payment of $685.00, to arrive at an
AFDC payment of $186.00.
Although the total level of
government income going to the family increased following Mr.
Blake's
unemployment,
the
AFDC
payment
decreased
considerably.
-77

7.

The

district

607(b)(1)(B)(iv),

court

by

its

children eligible under


eligible under
court issued

express

determined
terms,

applies only

See id. at 4-5.


___ __

On

to

judgment enjoining the

March 23, the


enforcement of

the implicated HHS/DHS policies and regulations.


v. Ives, No.
____

that

607(a), and does not reach children

606(a).
a final

also

90-0209-B-H, slip

op. (D. Me.

See Skidgel
___ _______

Mar. 23,

1992)

(final judgment).
Plaintiffs/appellees urge us to affirm the district
court's

decision.

district

court's

contravenes

the

Defendants/appellants
reading

of

very purpose

42
of

artificial distinction between


children.
non-needy

As

result of

children who

child provided

in

the family filing unit.

that

U.S.C.
the

the

the

602(a)(38)

rule, and

draws

606(a) children and

meet the

607(a)

argue

district court's

an

607(a)
holding,

definition of

a dependent

are not compulsorily

included in

By contrast, the weight

of federal

authority requires non-needy children who meet the definition


of a dependent child

provided in

See discussion infra Part II,


___
_____
the

district court's

606(a) to be so included.

Section A 3.

reading of

With respect

607(b)(1)(B)(iv),

to

it is

defendants'
textual

position

that

the

court

ambiguity and ultimately

failed

to

consider

neglected to reconcile its

reading with the family filing rule, 42 U.S.C.

602(a)(38).

-88

For the reasons that

follow, we reverse the decision

of the

district court.
I.
I.
Statutory and Regulatory Scheme
Statutory and Regulatory Scheme
_______________________________
AFDC
authorized
U.S.C.

is

by Title
601

cooperative

IV-A

et seq.
__ ___

of the
The

federal-state
Social

AFDC

program

Security Act,

program

42

provides cash

assistance to certain needy families with dependent children.


The program

is administered by the states in accordance with

the Social Security Act and the regulations and directives of


the Secretary of

HHS.

We begin with a

the implicated statutory provisions

brief explanation of

and the regulations

and

policies which implement them.


A.
A.
__

Determination of Financial Need


Determination of Financial Need
_______________________________
In

requirements,
needy.

The

U.S.C.

to

families

meeting

other

receiving AFDC

main statutory

602(a)(7),

agencies for
unit.

addition

which

assessing the

must

be financially

provision covering
provides

U.S.C.

criteria for certain income

602(a)(38),

resources must

42

state

a family
602(a)(8),

that may be

The family

establishes the

be considered

accordance with 42 U.S.C.

to

resources available to

disregarded in the determination of need.


rule, 42

need is

guidelines

In the paragraph which follows, 42 U.S.C.

Congress sets forth

whose

eligibility

filing

individuals

in determining

need in

602(a)(7) and (8).

-99

Financial

eligibility is determined by comparing a

family unit's countable income (i.e., income

remaining after

disregards allowed by law) to the standard of need adopted by

the

State.

The

standard of

need

is "the

amount

deemed

necessary by the State to maintain a hypothetical family at a


subsistence level."
(1974).

Shea v.
____

States assign a

a family of four

Maine is calculated by
income,

other than

principal earner,

provide

253

the size of

In 1990 in Maine the standard of


was $819.00.

An

AFDC payment in

subtracting a family unit's countable

unemployment compensation received


from the standard of

the relevant family size.


to

U.S. 251,

standard according to

the unit applying for AFDC.


need for

Vialpando, 416
_________

need established for

States are not, however,

families with

the full

by a

standard

required

of need.

In

Maine, the maximum AFDC payment is a fixed percentage (69.4%)


of the standard
"gap"

between

standard

of need.

Maine permits families to fill the

the need

standard

without penalty.

and

the maximum

In other

payment

words, families

with

countable income below the need standard, but above the level
of payment paid by

the State, may still receive

payment from the State.


in

the

instant

case

the maximum

This gap has practical ramifications


because

stepparent deeming rule, codified

of

the

operation

at 42 U.S.C.

of

the

602(a)(31).

In the case of the plaintiff class, prior to the unemployment


of the

principal

earner

the family

-1010

filing

unit

did

not

include either the principal


were

not then

statute.

See
___

dependent children
42 U.S.C.

unit, pursuant to the

for

the purposes

602(a)(38).

stepparent's income was,

portion of

stepparent deeming rule.

the

to the

For

many in

income deemed available fell within

gap permitted by the

State, so that

when the principal

earners were employed, the AFDC benefit to


under

of the

however, "deemed" available

the plaintiff class, the


the

earner or the half-siblings who

the unit eligible

606(a) either was not affected or was only marginally

affected by the deemed income.


B.
B.
__

Unemployment Compensation and


607
Unemployment Compensation and
607
___________________________________
The

categories

current

of

AFDC

"dependent

statute

children":

provides
those

for

defined

two
in

606(a), who are deprived due to the continuous absence, death


or incapacity of a parent, and those defined in

607(a), who

are deprived due to the unemployment of the parent who is the


principal earner.

As originally enacted, AFDC was limited to

the category of children defined in


Congress expanded
because

of

the program

a parent's

so-called AFDC-UP program

606(a).

In the 1960's,

to include children

unemployment.

At

deprived

that time,

the

(unemployed parent, earlier called

AFDC-UF, for

unemployed father) was available

families who

were not receiving unemployment

Philbrook
_________

v.

Philbrook,
_________

Glodgett,
________

the

421

Supreme

U.S.

Court

707,

decided,

only to those
benefits.

See
___

711

(1975).

In

in

essence,

that

-1111

parents had

the choice

compensation or
the

Philbrook
_________

assure

that

of applying either

for AFDC.
decision,

unemployed

See
___

for unemployment

id. at 719.
__

Congress
parents

amended
would

In response to
the

seek

statute to
and

obtain

unemployment compensation first, and that AFDC payments would


be

used

levels."

only

to

"supplement

UC

benefits

up to

AFDC-UF

See H.R. CONF. REP. NO. 1745, 94th Cong., 2d


___

Sess.

28 (1976), reprinted in 1976 U.S.C.C.A.N. 5997, 6048-49.


_________ __
1976

amendment

607(b)(1)(B)(iii)

was
and

the

predecessor

(iv).

See

Pub.

to

the
L.

current

No. 94-566,

The

___
507(a)(2), 90
U.S.C.
C.
C.
__

Stat. 2688

(1976) (originally codified

at 42

607(b)(2)(C) and (D) (1976)).

The Family Filing Rule


The Family Filing Rule
______________________
Prior to 1984, families

could

choose to

unit if

1983,

exclude household

those members

family's

applying for AFDC lawfully

had resources

members from

the filing

that would reduce

benefit or make the family ineligible for AFDC.

the

Secretary

of

establish uniform rules on

HHS

proposed

an

amendment

the family members who

the
In
"`to

must file

together for AFDC, and the situations in which income must be


counted.'"
(citing

Bowen v.
_____

Gillard,
_______

U.S. 587,

592

(1986)

Letter of 25 May 1983, to the Honorable George Bush,

President of the Senate).


Act of

483

1984, Pub. L.

As part of the

No. 98-369, (DEFRA),

the AFDC program by adopting the

-1212

Deficit Reduction
Congress amended

family filing rule.

See 98
___

Stat.

1145

(1984)(codified,

602(a)(38)).

as

amended, at

42

U.S.C.

The legislative purpose behind the enactment of

the rule, as reported by the Senate Finance Committee, was as


follows:
"`Present Law
"`There is no requirement in the present law that
parents and all siblings be included in the AFDC
filing unit. Families applying for assistance may
exclude from the filing unit certain family members
who have income which might reduce the family
benefit.
For example, a family might choose to
exclude a child who is receiving social security or
child support payments, if the payments would
reduce the family's benefits by an amount greater
than the amount payable on behalf of the child.
. . .
"`Explanation of Provision
"`The provision approved by the Committee would
require States to include in the filing unit the
parents and all dependent minor siblings (except SSI
recipients and any stepbrothers and stepsisters)
living with a child who applies for or receives AFDC
. . . .
"`This change will end the present practice whereby
families exclude members with income in order to
maximize family benefits, and will ensure that the
income of the family members who live together and
share expenses is recognized and counted as
available to the family as a whole.'"
Bowen,
_____
980

483 U.S. at 593-94 (quoting from S. Print No. 98-169,

(1984)).

inclusion

Thus,

in the

the

amendment

family filing

sought to

unit of

compel

dependent children

living in the same home as the child receiving AFDC.


was

enacted,

inclusion of

the

family

606(a)

filing

rule

the

required

children, children who

When it
only

the

were deprived

-1313

due

to

the continuous

parent.

As part

amended

of the

602(a)(38)

1883(b)(2)(A)

entitled, "Technical
Programs,"

the

to

include
607(a).
of the

Report

of 1986,

children

who

Act).

Under a

AFDC and

accompanying

death of a

of a

Congress
meet

the

2085, 2917
subsection

Child Support
the

amendment

distinction between children deprived

the absence, incapacity or

deprived due to the

death

See 100 Stat.


___

Corrections to

Senate

explained that no

incapacity or

Tax Reform Act

to

conditions described in
(1986)

absence,

due

parent, and those

unemployment of a parent,

was intended.

S. REP. NO. 313, 99th Cong., 2d Sess. 1074 (1986).9


II.
II.
Analysis
Analysis
________
The issues involved in this case are purely ones of
statutory construction.

Our review is,

therefore, de novo.

United States v. M.I.M., 932 F.2d 1016, 1019 (1st Cir. 1991).
_____________
______

See
___

generally Commonwealth of Mass. v. Lyng,


_________ ______________________
____

428

(1st Cir.

1990) (questions

of law

893 F.2d 424,

decided by

a trial

court are not binding on the reviewing court).


A.
A.
__

The Family Filing Rule


The Family Filing Rule
______________________

____________________
9.

The Senate Report provides, in part, that,


no such distinction between these two categories
was intended, and this provision will clarify that,
in a State that provides AFDC on the basis of the
unemployment
of a
parent, siblings
who are
dependent for that reason must be included in the
AFDC unit.

Id.
___
-1414

1.
1.
__

Background
Background
__________

We

begin

by

addressing

family filing rule, 42 U.S.C.

the

application of

the

602(a)(38), to the plaintiff

class.

The rule provides that in making the determinations

of

with respect

need

to

dependent child,

states

must

include
sister

any parent of a
if

described
section

such

brother

in clauses
607(a)."

dependent child and


or sister

(1) and

Id.
__

"meets

(2) of

Plaintiffs

any brother or
the

conditions

section 606(a)
challenge

the

or in
State's

practice of including the child common to both parents in the


family

filing

unit

because,

under

the

Secretary's

interpretation, the child meets the conditions described in


607(a).

We

must

determine

what

referred

to

the

"conditions

Congress meant

described" in

particular, whether Congress intended to


a condition that must be met
in the filing unit.
the family
dependent
none

it

607(a);

in

incorporate need as

before a child may be

included

Although several courts have interpreted

filing rule with


under

when

respect to children

606(a), the

rule as

defined as

originally enacted,

has specifically interpreted the rule with respect to

607(a) children.

See discussion infra Part II, Section A 3.


___
_____

The district court held that the family filing rule


requires the inclusion of children who meet the definition of
dependent found in
determined

607(a) only if such children

to be needy.

In so holding,

-1515

are first

the district court

recognized the abundance


inclusion

of

children

without such a
Decision

at

of federal authority requiring


defined

as dependent

prior determination of need.


7

n.11.

The

district

placement

sections of

of

606(a)

the
and

word "needy"
607(a).

Both

606(a)

See Memorandum
___

court's

distinguishing between these categories of


on the

in

the

reason

for

children centered
in

the

sections

respective
begin

by

stating that "the term `dependent child' means a needy child"


who

meets

607(a).

certain

conditions.

The essence of the

42

U.S.C.

606(a) and

district court's distinction was

that, because the word "needy" appears before clauses (1) and
(2) in

606(a),10 it is not to be

determination

under

filing unit rule


those clauses.

607(a).11
basis

for

and
The

606 (a) for the reason that the family

refers only to the


In

appears within the


clauses,

considered in making the

607

(a), by contrast,

the word

needy

section which is not broken into numbered

the family

filing

placement of

what the

conditions specified in

rule

simply references

the word "needy"

district court

found

was the

to be

sole

the plain

meaning of the rule.


____________________
10.

See supra note 3.


___ _____
`dependent child' means

The
a

statute
needy child

begins, "[t]he
(1)

who

term

has been

deprived of parental support . . . [.]"


11.

See supra note 5.


Section 607(a) has no demarcated
___ _____
clauses, and simply begins, "[t]he term `dependent child'
shall, notwithstanding section 606(a) of this title, include
a needy child who has been deprived of parental support . . .
."
-1616

Our inquiry does not end with


word "needy"

We examine

the

place in

the

statutory

scheme and in light of its statutory purpose.

See
___

Conroy v.
______

Aniskoff, 61 U.S.L.W.
________

family

1993)

in

filing

(No.

statute
statutory

607(a) of

the placement of the

rule

91-1353)

in the

(citations omitted));

basis of

of

its

4301, 4302 (U.S.


the "`cardinal

rule

March 31,
that

whole'" and that "the meaning of

plain or

not,

depends

upon context."

Evans v. Commissioner, Maine Dep't. of


______________________________________

Human Servs., 933 F.2d 1,


_____________
the

context

(noting

is to be read as a
language,

the statute.

5 (1st Cir.

the language

context of its structure

of the

1991) (concluding on

statute as

and in the light of

read in

the

its purposes).

Cf. St. Luke's Hosp. v. Secretary of Health and Human Servs.,


__ ________________
____________________________________
810

F.2d

325, 331

analysis after
A thorough
we

(1st

Cir.

1987) (applying

an initial, literal reading

analysis is especially warranted

are charged

with

interpreting a

statute which has been

detailed

of the statute).
where, as here,

complex and

technical

amended over time and which

contains

elaborate, internal cross-references.


As

we

explain

below,

we

think

that

the

term

"conditions described" in the family filing rule is ambiguous


with respect to children defined as dependent under
When

we

find

considerable

such

ambiguity

weight to

agency charged

the

in

607(a).

statute,

we

interpretation rendered

with administering that statute.

give
by the

See Evans,
___ _____

-1717

933

F.2d at

context of
its

7.

Our

examination

of the

language in

the

its place in the statutory scheme and in light of

statutory

purpose

interpretation of

convinces

us

602(a) (38)(B) is

that

the Secretary's

not only permissible,

but fully consonant with


U.S.A., Inc.
____________
837,

See Chevron
___ _______

v. Natural Resources Defense Council, 467 U.S.


__________________________________

843 (1984) (explaining that

ambiguous with
for

the will of Congress.

if a statute

respect to the issue

the court is

is silent or

presented, the question

whether the agency's answer

is based on a

permissible construction of the statute).

2.
2.
__

Ambiguity
Ambiguity
_________

The district court assumed


term "conditions
listed in

that Congress meant the

described" to incorporate all

of the terms

the cross-referenced section, 607(a),

include the term "needy."


appears in

607(a),

Although the

it does

not

and thus to

term "needy" plainly

necessarily follow

that

Congress intended for that term to be a "condition described"


for the purpose of

602(a)(38).

Section 607(a) and

606(a)

function in the statutory scheme to define the two categories


of

"dependent

children"

who

may

Regardless of which categorical


or family may

receive AFDC

financially needy.

be

eligible

AFDC.

definition is used, no child

unless that child

The family filing

-1818

for

or family

rule has a

is

different

function in the statutory


pursuant

to which need

scheme; that of defining


is be determined

This function is apparent


itself,

which

under

the unit
602(a)(7).

from the plain terms of

begins: "in

making

the rule,

the determination

under

paragraph (7) . . . a State agency shall include . . . ."


discussed supra in Part
_____

I Section A, need for

As

AFDC purposes

is not a fixed condition; its assessment depends on a variety


of factors.
among

the

To assume that Congress intended to include need


"conditions described"

family filing

for

the

rule--which, by its plain

to the assessment

purpose of

the

terms, exists prior

of need and as a basis

for the definition

of need--is not the most sensible reading of the rule.


We find that it is
rule which conditions

not clear from the face

Congress intended to include

referred to the "conditions described" in


the abstract,

it

might

be reasonable

607(a).
to

presume

of the
when it
While in
that

reference to the "conditions described" in a cross-referenced


section

refers to

all descriptive

section, such a reading


including "needy" as a
court's

terms contained

in that

is problematic in this context.

By

"condition[] described," the district

interpretation does

not properly

account for,

and

reads circularity into, the facially-evident

function of the

family filing rule.


3.
3.
__

Case Law and Legislative History


Case Law and Legislative History
________________________________

-1919

Our examination of

the case

law interpreting

the

family filing rule as originally enacted, and the legislative


history

behind Congress'

607(a),

leads

interpretation

us

to

amendment

conclude that

is erroneous

and to

of the

rule

the

district

to add
court's

uphold

the Secretary's

examining the language in

context entails

policy.
Part of
reviewing
filing

the

rule to

case law

which

compel the

defined as dependent under


have

has

interpreted the

inclusion of
606(a).

family

non-needy children

Overwhelmingly, courts

rejected the argument that a child must be needy before

that child is to be included

in the family filing unit.

See
___

Gorrie v. Bowen, 809 F.2d


______
_____
also
____

508, 513-16 (8th Cir. 1987).

See
___

Bradley v. Austin, 841 F.2d 1288, 1294 (6th Cir. 1988);


_______
______

Creaton
_______

v.

Bowen, 826
_____

F.2d 6

(9th

Cir. 1987);

Ledbetter, 821 F.2d 1507, 1513 (11th Cir. 1987).


_________
Court,

in

a case

upholding

family

filing rule,

citing

to clear

the

593 n.5.

The Court

argument in

intent

children in the family filing

unit.

to

the

a footnote,

include

non-needy

See Bowen, 483 U.S.


___ _____

commented that construing

require the inclusion of

The Supreme

constitutionality of

dismissed the

legislative

Oliver v.
______

the rule

at
to

only needy children was "completely

inconsistent with the intent of

Congress as explained in the

Secretary's request for legislation, in the Senate Print, and


in the Conference Report as well."

Id.
__

Rather than pursuing

-2020

its own analysis, the Court noted

its satisfaction with that

performed
Supp.

by the district court

1529,

reference

1548

to the

family

1986),

Eighth Circuit's

F.2d at 513-516.
The

(W.D.N.Y.

and

Kirk, 633 F.
____

made

decision in

favorable
Gorrie, 809
______

See Bowen, 483 U.S. at 587 n.5.


___ _____

express purpose

filing

in Gillard v.
_______

rule,

as

behind the

apparent

in

enactment of
the

Senate

the
Print

referenced by the Supreme Court and cited and discussed supra


_____
in

Part I,

families
i.e.,

Section C,

could exclude

children who

was to
children

were not

family filing unit. See


___

change the
who had

practice whereby
other

resources,

independently needy,

Bowen, 483 U.S. at 599


_____

from the

(noting that

the purpose of the rule is to "deny [] a family the right


exclude

a supported

child

legislative history formed


court's

reading of

from the

filing

the cornerstone

the family

unit").
of the

filing rule

inclusion of non-needy children in

to

to
This

district

require the

Gillard, 633 F. Supp.


_______

at

1546.
It

is true that in Gorrie, the other case cited by


______

the Supreme Court,


606(a) and

the court

began with the

was initially persuaded

language of

by the placement

word "needy" outside the numbered clauses.

of the

The court did not

rest its conclusion solely on this reading, however, but went


on to do a detailed, contextual analysis of the family filing
rule.

The

detailed

analysis

corroborated

that

court's

-2121

initial
needy

reading of the rule to require the inclusion of nonchildren in the family

filing unit.

See Gorrie, 809


___ ______

F.2d at 513-16.
Unlike the

court in Gorrie, the


______

the instant case stopped with its


court did not go
term might have
Had

the

purpose

it
of

reading of

in the

context of the

court

would

have

continued to

perform

discovered

that the

rule, and

its

scheme, were not

served by

its reading.

Court, we conclude that the

function

The

meaning that

family filing

the

rule to

607(a).

on to consider the particular

district

analysis,

district court in

rule.

detailed

legislative

in the
Like the

statutory
Supreme

real problem with construing the

require the exclusion of non-needy

children is that

such a construction flies in the face of Congressional intent


to end the practice of excluding non-needy children
filing unit.

We

are not persuaded by the

from the

truncated reading

of

the district court,

but proceed to

court's correct concern that


from

address the district

607(a) is drafted differently

606(a).
The

word

"needy" appears

in

607(a), and

the

family filing rule references the entire section, whereas the


"needy"
refers

is offset
to

in

clauses

606(a) and

that do

not

the family

contain

filing rule

that

term.

The

question is what effect to give to that difference, given the


function of the

rule in the

statutory scheme, its

purpose,

-2222

and the
other

manner in which

the rule has been

words, was Congress'

interpreted.

In

cross-reference to a previously-

drafted section of the statute in which the criterion of need


is not set

off in a

referenced section, a
need as one

of the

607(a) children?
First,

separate clause but appears


clear signal of its

within the

intent to include

"conditions described" as

applied to

We do not think so.


to

the

extent

exclusion of non-needy children

that

the

issue

is

the

from the family filing unit,

the same analysis of legislative purpose used with respect to


606(a) children
previously-

cited

applies to
Senate

this case.
Print

Moreover, in

accompanying

the

the
DEFRA

amendment, the Congress made clear who the exceptions to


family filing rule were
require the inclusion of
SSI recipients and
Section

to be.

Namely, the

provision would

all dependent minor children except

stepchildren.

C (citing S. Print

the family filing unit

the

See
___

Bowen, supra Part


_____ _____

No. 98-169 at

980).

rule was intended to be

I,

Otherwise,
an inclusive

rule, inclusive especially of non-needy siblings.

amendment
eligible

Second,

the

of 42

U.S.C.

under

Congressional
602(a)(38),

607(a), unambiguously

history

to include

See S. REP.
___

and accompanying text.

the

children

expresses Congress'

intention not to distinguish between children


the two sections.

behind

eligible under

NO. 313 at 1074, supra note 9


_____

Congress, having omitted a reference

-2323

to

607(a)

intended

children in

to

create

no

the original rule,


such

stated that

it

distinction between

children

eligible under

606(a) and children eligible under

607(a).

That

Congress

labeled

[c]orrection[]"

further

the

amendment

underscores

different

children.

sum, we ascertain no basis

of these

non-needy children

we note that

this matter of

difficult by the
has

within

a statute,

We deal
which

which is not rewritten in

exclusion of
compelling

606(a).12

of the district

court,

statutory construction is

patchwork manner in which

been enacted.

children in a

607(a), but

the inclusion of such children eligible under


In overturning the finding

with a

has been

of

for a finding that

manner, permitting the

eligible under

against

categories

Congress intended to treat these categories of


substantively different

"[t]echnical

its intention

substantively
In

treatment

made

the AFDC statute

statute, and

a section

amended frequently,

its entirety with each

and

amendment.

____________________
12. Plaintiffs note that the legislative history of the Tax
Reform Act, which amended the family filing rule to include
607(a) children, refers to
the required inclusion
of
dependent children.
From Congress' use
of the word
dependent, plaintiffs conclude that Congress meant to require
the inclusion of only needy
607(a) children.
The
legislative history of the DEFRA amendment which created the
original family filing rule covering
606(a) children,
however, similarly refers to the compelled inclusion of
dependent children.
As we have explained, the compelled
inclusion of
606(a) children has been upheld by other
federal courts.
Plaintiffs' argument, without more, does
nothing to advance a reasonable basis for treating
607(a)
children differently from
606(a) children.
-24-

24

As we observed

in Sweeney v. Murray, 732 F.2d 1022, 1024-25,


_______
______

1027(1st Cir. 1984), with regard to a different subsection of


the

AFDC statute,

the provision

at issue

in this

case is

anything but elegantly drafted, but its legislative directive


is comparatively clear.

We

hold that the Secretary's policy

of requiring the inclusion of non-needy

607(a)

children in

the filing unit resonates with the legislative purpose of the


rule and upholds its integrity in the statutory scheme.
B.
B.
__

The Reduction of AFDC by Unemployment Compensation


The Reduction of AFDC by Unemployment Compensation
__________________________________________________
The final

court

held

payments

that

by the

conflicted

with

607(b)(1)(B)(iv).

issue is

more difficult.

the

HHS/DHS

amount

of

the

plain

practice

the

of

reducing

stepparents'
meaning

Once again,

The district

of

the district

AFDC

unemployment
42

U.S.C.

court anchored

its conclusion in what it characterized as plain meaning, and


ended

its

inquiry there.

The

court

determined

607(b)(1)(B)(iv) authorized the reduction only of the


"`payable

to

[a]

child .

specified

that
income

in [ 607(a)].'"

Memorandum Decision at 5.

Thus, only the AFDC payments going

to children eligible under

607(a) would be reduced

by the

unemployment compensation received by the principal earner.


Defendants point to two problems
court's

interpretation.

607(b)(1)(B)(iv)
reduction

of

First,
the

the

statute

of the AFDC payment

with the district

court

ignored

actually

that

compels

the

otherwise payable to "a child

-2525

or
__

relative
________

specified" in

607(a).

The

word "relative"

creates an ambiguity in the statute which the court failed to


apprehend.

Second,

once

context of the larger

this language

is

placed in

the

statutory scheme, the district court's

reading

cannot be

reconciled with

For the

reasons that follow,

the family

filing rule.

we conclude that

deference to

the Secretary is proper in this instance.


We first examine the meaning of the word "relative"
in
child

607(b)(1)(B)(iv).
or relative

That section directs attention to

specified

in

607(a).

Turning

to

607(a), one

sees that

specified in

the

reference encompasses

606(a)(1) -- a

grandmother,

brother,

"father, mother, grandfather,

sister,

stepfather,

stepbrother,

stepsister, uncle, aunt,

or

42 U.S.C.

niece."

606(a).

plausible interpretation

of

relatives

stepmother,

first cousin, nephew,

Defendants argue

607(b)(1)(B)(iv)

that a

is that

directs the deduction of unemployment compensation from


payable

to any

argument

that

intended

to represent

the

child.

607(b)(1)(B)(iv),

Plaintiffs offer a

relatives

listed

only the
Whether

Congress

co-resident relatives or to
relatives is,

AFDC

607(a) child, or to any listed, co-resident

relative of that child.

dependent

it

strong contrary

in

606(a)(1)

caretaker relatives
for

meant

the
to

purposes

provide

are

of the
of
list

of

limit its reference to caretaker

arguably, ambiguous.

As we

explained supra,
_____

-2626

when we find

ambiguity we give

interpretation of the Secretary.

deference to the

considered

See Evans, 933 F.2d at 7.

___ _____
Even were we to
to

the

meaning

of

the

problem

encounter

agree with plaintiffs' argument as

the

word

"relative,"

of conflict

family filing rule when we place


context of the statutory scheme.
filing

rule

applies

establishes a

to

would still

the later-enacted

607(B)(1)(B)(iv)

children.

The

whereby need is

the anomalous

reading of

607(b)(1)(B)(iv)

practice of

proper

picture,

AFDC

and

assessing need collectively,

payment.

arrive

To

at

assess

benefits

unworkable and undercuts the


rule.

Adopting

would lead to

then splintering the family unit at the point of


the

rule

calculated on

the basis of the collective needs of the household.


the plaintiffs'

into the

As we have held, the family

607(a)

uniform system

with

we

need

based

and

determining
based on

on

one

another,

is

policy behind the family filing

See Bowen, supra Part I Section C (citing S. Print No.


___ _____ _____

98-169

at 980) (noting

that one purpose

"ensure that the income of family

of the rule

is to

members that live together

and share expenses is recognized and counted available to the


family as a whole").
Where
scheme
construe
harmony.

different provisions

are in tension, a
such provisions
See Atwell
___ ______

of the

same statutory

court should make

every effort to

so as

consistency and

to achieve

v. Merit Systems Protection Bd.,


_____________________________

-2727

670

F.2d 272,

286 (D.C. Cir. 1981)

possible,

be construed to

Save Spenser County


____________________
1979)

(duty

provisions).

to
To

the potential

v. EPA,
___
achieve

382, 383 (1961),


to

reconciling

the fact

issue is one

to the meaning of a
policies).

809

at

proposing

(noting the

the legislation

for

best

U.S. at
U.S. 374,

is

of

followed

statute involves

Our

conclusion

Secretary was

and drafting the family filing


514

in the

that the principle

interpretations

that the

that has
the family

v. Shimer, 367
______

proposing
F.2d

conflicting

See Chevron, 467


___ _______

for the proposition

conflicting

buttressed by

of

the Secretary is

conflict.

administrative

(D.C. Cir.

the policy behind

United States
_____________

whenever a decision as

844, 871

harmonization

believe that

(1984) (citing

deference

600 F.2d

the extent that the

position to resolve the


844

achieve consistency); Citizens to


___________

for undermining

filing rule, we

(provisions should, wherever

rule.

is

involved in
See Gorrie,
___ ______

Secretary's

involvement

in

the purpose

of establishing

rules about who must file together for AFDC); Bowen, 483 U.S.
_____
at 592, 593

n.5 (same);

St. Luke's Hosp.,


________________

(counseling deference where the


statute's

creation

and thus

810 F.2d at

331

Secretary was present at the


is likely

to

be in

a better

position to know the intent of the enacting Congress).


Finally, we
that it is not at
precise issue

observe,

as did

the district

all clear that Congress has

presented; namely,

the

court,

addressed the

application of

these

-2828

distinct statutory provisions to the


families composed of both
Chevron,
_______

the Supreme

statute

courts

Congress

has

issue."
the

606(a) and

607(a) children.

Court explained

should

first

directly spoken

Chevron,
_______

particular situation of

seek
to

467 U.S. at 842.

that in
to

the

construing a

ascertain

"whether

precise question

Although

In

at

we do not take

command to mean that Congress must anticipate all of the

possible

scenarios

that might

arise

under

a statute,

we

believe

that

this

is a

case

interpretation of the Secretary


we

explained in

in

which

is especially warranted.

St. Luke's Hosp., 810


_________________

implied delegation

deference to

F.2d at

the
As

331, "[a]n

of a law-declaring function is especially

likely where, as here, the question is interstitial, involves


the

everyday administration

special judicial
areas of the

of the

statute, implicates

expertise, and is unlikely

law."

Cf. Drysdale
__ ________

to affect broad

v. Spirito, 689
_______

261 (1st Cir. 1982) (counseling deference where


interstitial,

and "imbued

with

no

F.2d 252,

the issue is

administrative history

and

complexity").
The factors of ambiguity
statutory

provisions, and

arising

in

counsel

deference to

whether the

the

daily

in a statute, conflicting

a complex,

interstitial question

administration of
the Secretary.

We

Secretary's interpretation is

the

statute--all

must only

assess

permissible.

We

find that the Secretary's policy harmonizes the two statutory

-2929

provisions,
The

while

doing violence

Secretary sensibly applies

reading

607(b)(1)(B)(iv)

unemployment
Secretary

compensation

reasonably

treat

AFDC as

rather

than

to

the family filing

to

require

from

the

effectuates

supplement

treating

neither individually.

the

the
AFDC

the will

as

In

deduction

of

payment,

the

of

to unemployment
two

rule.

Congress to
compensation,

alternative

forms

of

assistance.
At

oral

argument,

inequities resulting from


the district
court's

court and

reading,

children and

both

parties

highlighted

the respective interpretations


the Secretary.

families

which

Under the

contain

of

district

both

607(a)

606(a) children receive a greater AFDC benefit

than that received by families who are composed entirely of


606(a) children or entirely of
pointed
court

out that,

607(a) children.

by carving

effectively permits
while the

out two

one unit

units,

Defendants
the district

to receive

the maximum

other one receives

the maximum

payment

of AFDC,

payment

of unemployment compensation.

Plaintiffs emphasized

that under the Secretary's reading, families composed of both


606(a)
families

and

607(a) children

composed only of

receive

606(a) children.

characterized

in the

supplement to

unemployment income, however,

that the total

less

light of

its statutory

AFDC

than

Once AFDC is
purpose as
it is

apparent

income going to families with both categories

-3030

of

children is no less than that

going to a

606(a) family

composed of the same number of persons.


We recognize
the

plaintiff

dramatically
earner.

class,
following

The income

the hardship visited


whose
the

life

on families

circumstances

unemployment

of

in

changed

the principal

going to the family unit was

reduced by

the onset of unemployment, and then was further diminished by


reduction of the AFDC payment
compensation

received.

in the amount of

The impact

unemployment

on the families

in the

plaintiff class of the HHS/DHS policies is exacerbated by the


way in which

Maine treats

the gap between

need and the maximum AFDC payment.


I, Section
to the

A.

maximum AFDC
earned by the

of

See discussion supra Part


___
_____

Maine's policy permitted

unemployment of

the standard

the principal

payment because the amount

many families prior


earner to

attain the

of countable income

principal earner fell within the gap.

See id.
___ __

Maine's treatment of the gap, however, generally permits more


families

to live at a

higher level of

subsistence, and has

not been challenged by the plaintiff class.


In the end, we

must acknowledge that the Congress,

HHS and DHS are charged with the difficult task of allocating
limited funds
believe

across a range of needy

that the practical

reading of the statute,


equitable than

families. Overall, we

implications of

the Secretary's

when viewed allocationally, are more

those flowing from the

construction given by

-3131

the

district court.

Reversed.
Reversed.
________

No costs.
No costs.
________

The

decision of the

district court is

-3232