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October 31, 1978

Luvinia ALEXANDER, for herself and as guardian ad litum for Sharifa Alexander, Sylvia Bey, for herself and as guardian ad litum for Trustin Bey, Irene Burkett, for herself and as guardian ad litum for Robert Burkett, Andrea Carey, for herself and as guardian ad litum for Leslie Bonita Rex, Sheila Mitchell, for herself and as guardian ad litum for Tamika Mitchell, Elizabeth Truitt, for herself and as guardian ad litum for Leon Truitt
Louis POLK, M.D., Acting Director of the Philadelphia Department of Health, Individually and in his official capacity, Pearl Pitt, M.D., WIC Coordinator Division of Maternal and Child Health, Philadelphia Department of Health, Individually and in her official capacity, David Soricelli, D.D.S., Director of Community Health Services, Individually and in his official capacity, Christine Kniszley, M.D., Director of Maternal and Child Health Programs, Individually and in her official capacity, Barry Dickman, Administrator of the WIC Program, Individually and in his official capacity, Jack Burkhardt, Administrator of the Division of Maternal and Child Health of the Philadelphia Department of Health, Individually and in his official capacity, the Department of Health of the City of Philadelphia

The opinion of the court was delivered by: LUONGO

This action challenges the administration of the Supplemental Food Program for Women, Infants, and Children (WIC), 42 U.S.C. § 1786 (Supp. V 1975), by the Philadelphia Department of Public Health (City). The plaintiffs are six women whose children had been participants in the Philadelphia WIC program. They allege that the City wrongfully terminated their children's benefits in violation of the statute, the regulations promulgated thereunder, and the Constitution. In addition to injunctive and declaratory relief, the plaintiffs pray for punitive damages in excess of $ 10,000 against each of the named defendants, including the city agency and its director, the administrator and the coordinator of the City's WIC program, the director and the administrator of the Division of Maternal and Child Health, and the director of the Community Health Services.

Before me is plaintiffs' motion for a preliminary injunction. Following a hearing on August 8, 1978, plaintiffs and the City entered into a stipulation which might have effectively disposed of plaintiffs' complaint except that the agreement reached by the immediate parties was contingent upon modification of an existing contract between the City and the Pennsylvania Department of Health (Department). As the City and the Department failed to reach a satisfactory accord, the hearing resumed on September 5. For the reasons stated below, I will deny the motion for preliminary injunction.

 Congress enacted the special supplemental food program in 1972 as an amendment to the Child Nutrition Act of 1966. Pub.L.No. 92-433, § 9, 86 Stat. 729-31 (1972) (current version at 42 U.S.C. § 1786 (Supp. V 1975)) (amending 42 U.S.C. § 1771 Et seq. (1970)). *fn1" Recognizing that a substantial number of pregnant women, infants, and young children faced a special health risk because of inadequate nutrition, Congress sought to ameliorate that risk by providing free nutritious foods to supplement the diets of program participants. 42 U.S.C. § 1786(a) (Supp. V 1975). Entirely federally-funded, the WIC program is administered by the Food and Nutrition Service nS of the United States Department of Agriculture (USDA). Id. § 1786(b); 7 C.F.R. §§ 246.1(a), .3(a) (1978). The legislation empowers the Secretary of Agriculture to make cash grants to the health agencies of states choosing to participate. The state, in turn, contracts with local agencies in areas with needy populations to effectuate the delivery of program benefits to eligible recipients. 42 U.S.C. § 1786(b) (Supp. V 1975); 7 C.F.R. §§ 246.1(b), .3, .4 (1978). Prospective participants must reside in the area or belong to the population served by the local agency, must meet the income criteria set by the state agency, and must be determined to be in nutritional need by a competent professional authority. *fn2" 42 U.S.C. § 1786(b)(1), (e) (Supp. V 1975); 7 C.F.R. § 246.7(a)(2), (b) (1978). In order to provide the local agencies with an equitable and effective means of distributing the allocated funds, 42 Fed.Reg. 43205, 43208 (1977), the regulations enumerate six categories of nutritional need, in descending order of priority, *fn3" to be implemented when a program reaches its maximum participation level. 7 C.F.R. § 246.7(b)(2)(ii) (1978).

 In Pennsylvania, the Department is the agency charged with state-wide administration of the WIC program, and the City, by virtue of its contract with the Department, dispenses benefits locally. N.T. 16-17 (Aug. 8, 1978); *fn4" Defendants' Exhibit No. 2. The City operates its program as an adjunct to a health care program and utilizes both its own district health centers and, by subcontract, independent health facilities. N.T. 109 (Aug. 8, 1978); N.T. 26 (Sept. 5, 1978). *fn5" A potential WIC recipient *fn6" undergoes a health assessment by a competent professional authority, *fn7" who evaluates the applicant's nutritional status and makes the determination of eligibility. N.T. 110 (Aug. 8, 1978); N.T. 57-59 (Sept. 5, 1978). The certified WIC recipient then receives a prescription *fn8" for the appropriate food package. *fn9" N.T. 110 (Aug. 8, 1978). The prescription is in the form of a voucher, to which is attached a check drawn on the Commonwealth's account. N.T. 111 (Aug. 8, 1978); Defendants' Exhibit No. 5. The recipient designates, from the list of vendors who have agreed with the City to supply the required foods at a specific price, the grocery store at which she will exchange the voucher for the food prescribed. N.T. 110-12 (Aug. 8, 1978). The recipient has thirty days from issuance to cash in the voucher, and the vendor then has sixty days *fn10" from the expiration date of the voucher to present the check for payment. 7 C.F.R. § 247.10(d)(3) (1978). The checks paid in a given month are reported through the state's data processing system to the Department, which relays that information to the local agency. N.T. 17-19 (Aug. 8, 1978).

 The contract between the City and the Department limits the City's WIC program food expenditures to $ 300,000 per month, with a ceiling of $ 2,700,000 for the short fiscal year, which ran from October 1, 1977 to June 30, 1978. *fn11" Defendants' Exhibit No. 2, P 1, at 1; Id. P 20, at 6. In addition, the contract imposes a limit on the City's administrative costs; reimbursement for these expenses is based on the number of food vouchers issued and is limited to approximately 12% Of the food costs. *fn12" Id. P 19, at 6. The contract recommends a monthly caseload of 15,000 recipients, with the caveat that should program participation reach caseload without maximum expenditure, the agency should accommodate more people up to the budgetary limit. Id. P 2, at 1. The City's contract with the independent health care facilities tracks the City's contract with the Department with respect to duration and provides for reimbursement of the facilities' actual personnel expenses up to a maximum of 8% Of the value of food vouchers issued during the monthly reporting period. *fn13" Defendants' Exhibit No. 3, P 9, at 3; Id. P 3, at 2.

 In November 1977, the City conducted a head count of program participants, which revealed that the City's caseload was approximately 19,000. N.T. 117 (Aug. 8, 1978); N.T. 11 (Sept. 5, 1978). Fearing that its budget would be exhausted before the end of the contract period, the City decided to implement the priority system. N.T. 117, 120-24, 137-38 (Aug. 8, 1978). In a memo dated December 20, 1977, addressed to the district health directors and nursing and clerical supervisors, Dr. Pearl Pitt, the City WIC coordinator, directed not only that certification of postpartum women and children who had reached age four be discontinued but also that these categories of recipients be removed from the program. Defendants' Exhibit No. 8. On December 30, 1977, Dr. Pitt similarly instructed the directors of the independent health care facilities to remove from the program postpartum women and children over four years of age with no medical problems; she also limited the permissible caseload of each facility. Defendants' Exhibit No. 9 to 19. When those WIC recipients designated for removal next appeared to obtain their vouchers, they were informed that they were to be removed from the program; they were, however, issued a food prescription at that time. N.T. 64 (Sept. 5, 1978). The City concedes that at the time of removal, plaintiffs received neither written notice of the reasons for the action nor an opportunity for a hearing. N.T. 13, 149 (Aug. 8, 1978).

 Plaintiffs challenge the City's implementation of the priority system on several grounds. First, they allege that the categorical removals deprived plaintiffs of their right under section 1786(e) to have their eligibility individually determined by a competent professional authority. Second, they argue that the City's action contravenes the regulations promulgated by the FNS under section 1786 in several respects. They contend that the City was powerless, absent an express directive from the state, to implement the priority system; that the City program was not at maximum capacity and circumstances did not thus necessitate the City's action; and finally, that the manner of implementation, specifically, the removal of the four-year-old children, created a priority within a priority that is inconsistent with the regulations. They also contend that the regulations require the City to provide not only written notice prior to the termination of benefits, stating the reasons therefor and advising of the availability of a hearing, but also a pretermination evidentiary hearing. Third, plaintiffs allege that the City's action implicates the due process clause of the fourteenth amendment. They argue that the across-the-board removal of four-year-olds creates an irrebuttable presumption and that the City's failure both to afford an individualized determination and to implement the fair hearing procedure outlined in the regulations deprives plaintiffs of a protected interest without due process. They seek to preliminarily enjoin the defendants' continued adherence to the priorities system as well as the continued denial of the notice and fair hearing requirements.

 I. Subject Matter Jurisdiction

 Plaintiffs allege 28 U.S.C. §§ 1331, 1343(3)-(4), and 1337 (1976) as their jurisdictional bases. In their answer, defendants assert as an affirmative defense the lack of subject matter jurisdiction with respect to each jurisdictional allegation. I must therefore address the question of subject matter jurisdiction before proceeding to the merits of plaintiffs' motion for preliminary injunction.

 Section 1331

 To ground jurisdiction on 28 U.S.C. § 1331(a) (1976), plaintiffs must meet a two-pronged test: the matter in controversy must arise under the Constitution, laws, or treaties of the United States and the value of the claim must exceed $ 10,000. For section 1331 purposes, a case "arises under" if "the complaint seeks a remedy expressly granted by a federal law or if it requires the construction of a federal statute (or the Constitution) or a distinctive policy of a federal statute requires the application of federal legal principles for its disposition." Lindy v. Lynn, 501 F.2d 1367, 1369 (3d Cir. 1974). Plaintiffs' complaint satisfies this standard on several points. Their allegation that defendants have categorically terminated the benefits of statutorily-defined eligible recipients without notice or the opportunity for a hearing raises the question whether plaintiffs' interest rises to the level of a constitutionally-protected entitlement. This clearly implicates the procedural due process guarantee of the fourteenth amendment. They also allege that defendants' action contravenes section 1786, which secures to plaintiffs the right to have their eligibility for the WIC program individually determined by a competent professional authority. Finally, they assert that defendants ignored the fair hearing procedures outlined in the regulations authorized by and issued pursuant to section 17 of the Child Nutrition Act, 42 U.S.C. § 1786 (Supp. V 1975).

 Although the availability of an implied remedy both under the fourteenth amendment and under the Child Nutrition Act is questionable, that hurdle does not prevent this court from assuming jurisdiction over the controversy. As the courts have often and emphatically reiterated, the question whether a court has subject matter jurisdiction differs analytically from the question whether plaintiff has stated a viable cause of action. E. g., Bell v. Hood, 327 U.S. 678, 682-83, 66 S. Ct. 773, 90 L. Ed. 939 (1946); Mahone v. Waddle, 564 F.2d 1018, 1022 (3d Cir. 1977); Payne v. Government of the District of Columbia, 182 U.S.App.D.C. 188, 193-95, 559 F.2d 809, 814-16 (1977); See Santora v. Civil Service Commission, City of New York, 443 F. Supp. 25, 28-29 (S.D.N.Y.1977); Cave v. Beame, 433 F. Supp. 172, 174-76 (E.D.N.Y.1977); Cf. Pitrone v. Mercadante, 572 F.2d 98, 100 (3d Cir. 1978), Cert. denied, 439 F.2d 98, 99 S. Ct. 99, 58 L. Ed. 2d 120 (1978). The latter is a question of law, which must be decided after the court assumes jurisdiction and which calls for judgment on the merits. Bell v. Hood, supra, 327 U.S. at 682, 66 S. Ct. 773. The former, however, requires an examination of the allegations in the complaint to determine if construction of the Constitution or federal laws will dictate the plaintiff's right to recover. If the federal Constitution or laws directly impact upon the plaintiff's claim and the complaint appears to be neither "immaterial and made solely for the purpose of obtaining jurisdiction" nor "wholly insubstantial and frivolous," the district court acquires jurisdiction under section 1331(a). Bell v. Hood, supra, 327 U.S. at 682-83, 66 S. Ct. at 776. Plaintiffs' complaint meets that standard.

 In addition, although not pleaded specifically as a source of section 1331 jurisdiction, 42 U.S.C. § 1983 (1970) provides yet another peg for federal question jurisdiction. By its terms, section 1983 not only subsumes plaintiffs' constitutional and statutory claims but also supplies the remedial vehicle for their vindication. *fn14" See National Land & Investment Co. v. Specter, 428 F.2d 91, 98-100 (3d Cir. 1970). Furthermore, inasmuch as Monell v. New York City Department of Social Services, 436 U.S. 658, 690 - 695, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), has redefined "person(s)" amenable to suit under section 1983 to encompass local governmental units and agencies implementing official policy, all of the named plaintiffs in this action, the City included, *fn15" come within the ambit of the court's jurisdiction.

 The foregoing discussion demonstrates that plaintiffs' complaint fully satisfies the first prong of the test for federal question jurisdiction. Compliance with the amount-in-controversy requirement, however, poses a much closer and more difficult question that is not as easily resolved. Plaintiffs here contrive to meet the jurisdictional minimum by praying only for punitive damages in excess of $ 10,000 against each of the seven named defendants. Normally, a plaintiff's allegation of damages will suffice if it is made in good faith and unless it appears to a legal certainty that the claim is really for less than the jurisdictional minimum. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S. Ct. 586, 82 L. Ed. 845 (1938), Quoted in Mt. Healthy City School District Board of Education v. Doyle, 429 U.S. 274, 276, 97 S. Ct. 568, 50 L. Ed. 2d 471 (1977); Accord, Lister v. Commissioners Court, Navarro County, 5 ...

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