decided: July 24, 1979.
MEDORA, CLAIRE; COPEN, ERNA; HENRICH, DOROTHY; AND ALL OTHERS SIMILARLY SITUATED,
COLAUTTI, ALDO, INDIVIDUALLY AND IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF PUBLIC WELFARE; MARTINO, SAMUEL R., INDIVIDUALLY AND IN HIS CAPACITY AS EXECUTIVE DIRECTOR OF THE LANCASTER COUNTY BOARD OF ASSISTANCE; LINK, SUSAN, INDIVIDUALLY AND IN HER CAPACITY AS CASEWORKER FOR THE LANCASTER COUNTY BOARD OF ASSISTANCE, ALDO COLAUTTI AND SAMUEL R. MARTINO, APPELLANTS
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA; D.C. Civil No. 78-1549
Before Seitz, Chief Judge, and Hunter and Garth, Circuit Judges.
Opinion OF THE COURT
1. The Pennsylvania Department of Public Welfare (DPW) seeks review of a district court order which enjoins the application of a DPW regulation*fn1 to appellees and others similarly situated. Because the challenged regulation establishes a classification which contravenes the equal protection clause, the district court order will be affirmed.
2. Pennsylvania provides general assistance welfare benefits to "all of its needy and distressed" citizens.*fn2 DPW administers the benefit program and is authorized to promulgate rules and regulations which are consistent with the program's goals.*fn3 The federal government administers a program of Supplemental Security Income benefits (SSI) which aids the blind, aged and disabled. The SSI need criteria are stricter in practice than are those which govern the Pennsylvania general assistance program.*fn4
3. The challenged regulation, P.A.E.M. § 297.1(e),*fn5 provides that the blind, aged, or disabled must apply for federal SSI benefits prior to applying for state general assistance benefits. It further provides that if a person is found Not to be blind, aged, or disabled (and hence unqualified for SSI) that person may then apply for general assistance. However, if the person is found to be blind, aged, or disabled, yet ineligible for SSI for some other reason (such as income or resources over the maximum limits) that person is Barred from applying for general assistance, Even if the person Would still qualify as needy under the applicable general assistance criteria. Thus, P.A.E.M. § 297.1(e) bars all aged, blind, or disabled persons from receiving general assistance, including those who are in fact needy under the Pennsylvania welfare code yet ineligible for benefits under the federal program. "The incongruity arises that if (such persons) were less disadvantaged (i. e. not blind, not aged, not disabled) they would be eligible for (general assistance), but since they are more disadvantaged they are not (eligible for general assistance)". Medora v. Colautti, No. 78-1549, slip op. at 2 (E.D.Pa. Aug. 4, 1978).
4. All of the appellees were denied SSI benefits for reasons unrelated to their recognized disabilities*fn6 and were subsequently declared ineligible for general assistance because of that denial. The district court concluded, "It is undisputed that if plaintiffs were not disabled and therefore not required to apply for federal support, they would be eligible for the state assistance." Id.
5. The district court found that the regulation promulgated by DPW was arbitrary, capricious and an abuse of discretion and that it frustrated the purpose of Pennsylvania's welfare statute. The court concluded that in applying the regulation and denying appellees benefits which the legislature intended they receive, DPW had violated the due process rights of the appellees. While we will affirm the district court's order, we need not reach the due process issue, since we hold that the DPW regulation establishes a classification which contravenes the equal protection clause.*fn7
6. Under traditional equal protection analysis, we ask whether the challenged classification*fn8 is rationally related to a legitimate governmental interest. United States Department of Agriculture v. Moreno, 413 U.S. 528, 533, 93 S. Ct. 2821, 37 L. Ed. 2d 782 (1973). The articulated purpose of the statute is to provide "assistance to all of (the State's) needy and distressed." Pa.Stat.Ann. tit. 62, § 401 (Purdon 1968). The statute does not establish any eligibility criterion other than need; if anything it exhibits a special solicitude for the disabled. See note 3 Supra. The challenged DPW classification, however distinguishes between the non-disabled needy and the disabled needy, providing aid to the former and denying it to the latter. See note 4 Supra. A classification such as this one "must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relationship to the object of the legislation, so that all persons similarly circumstanced shall be treated alike." Reed v. Reed, 404 U.S. 71, 76, 92 S. Ct. 251, 254, 30 L. Ed. 2d 225 (1971), Quoting Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S. Ct. 560, 64 L. Ed. 989 (1920). We hold that P.A.E.M. § 297.1(e) falls far short of this standard. It ignores the common denominator of need, and creates a classification that bears no relation to the legislatively declared purpose of the general assistance program. Indeed, by excluding some persons from general assistance despite their undisputed qualification as needy, the challenged regulation actually frustrates the object of Pennsylvania's welfare statute.
7. The classification would still withstand equal protection scrutiny if it rationally furthered some legitimate governmental interest other than that specifically stated in the Pennsylvania legislature's declaration of intent. United States Department of Agriculture v. Moreno, 413 U.S. 528, 534, 93 S. Ct. 2821, 37 L. Ed. 2d 782 (1973); Williams v. Wohlgemuth, 366 F. Supp. 541, 547 (W.D.Pa. 1973), Aff'd. 416 U.S. 901, 94 S. Ct. 1604, 40 L. Ed. 2d 106 (1974). This is a two-part test: the government interest must be legitimate And the challenged classification must be rationally related to the furtherance of that interest.
8. DPW advances three governmental interests to which it claims the challenged regulation is rationally related. First, the regulation avoids the administrative inconvenience of the state having to assess independently a disabled person's need where the federal government has already made a determination. Second, the regulation encourages parties who may be eligible for SSI benefits to apply for them, with the result that state funds are preserved. Third, the regulation establishes a two-tiered system, which leaves to the federal government the task of supporting blind, aged and disabled citizens and allows DPW to provide for the remaining needy. It is by no means obvious that the cumulative weight of these goals is sufficient to make out a legitimate government interest.*fn9 We need not decide the question, however, since even if the three governmental interests presented by DPW are legitimate the challenged regulation fails rationally to further those interests.
9. First, in regard to the claim of administrative convenience, since the state and federal governments administer programs with different eligibility criteria, it is irrational to allow a decision based on the stricter federal law to control a decision which is supposed to be based on the more generous state code. DPW must independently assess need because it has independently (and differently) defined need. By incorporating the SSI decisions as its own, DPW is in the wholly unreasonable position of declaring disabled persons to be not needy under the Pennsylvania need criteria, while declaring identically situated nondisabled persons to be needy under exactly the same need criteria.
10. The second governmental interest is in promoting the "exhaustion" of federal sources of aid. While it may be rational for the state to require potential beneficiaries of general assistance to first apply for federal aid, once a person has applied for federal benefits and they have been denied, the goal of promoting exhaustion of federal sources of aid has been achieved. The rule challenged here, that the blind, aged or disabled needy who have applied for federal funds and been refused Will still be denied state funds, is not even triggered until it is clear that no federal aid will be available to the applicant. The rule bears absolutely no relation to encouraging the exhaustion of federal funds. Of course, any rule that withholds aid from qualified applicants preserves state funds. But the state must do more than claim that denying aid to qualified persons saves money, for "the saving of welfare costs cannot justify an otherwise invidious classification." Shapiro v. Thompson, 394 U.S. 618, 633, 89 S. Ct. 1322, 1330, 22 L. Ed. 2d 600 (1969).
11. We turn to the final justification for P.A.E.M. § 297.1(e), that it will further the establishment of a two-tiered federal-state welfare system. The standard we have applied in our equal protection analysis has been determined by reference to the nature of the right affected by the classification and the identity of the class burdened by the classification. In this case the right affected is not fundamental and the class burdened is not suspect.*fn10
12. Nevertheless, while receipt of welfare benefits may not be a fundamental right, it is an important right. Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970). When a state undertakes to provide welfare benefits for the needy, some degree of imprecision and inequality in the allocation of benefits may be tolerated; such discrepancies are seen as the practical cost of large-scale economic and social welfare programs. Dandridge v. Williams, 397 U.S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970). But as discrepant treatment becomes purposeful, and if it involves denial of all aid rather than allocation of amounts of aid, the courts will more closely examine the rationality of the underlying classification.*fn11 Weber v. Aetna Casualty & Surety Co., 406 U.S. 164, 172, 92 S. Ct. 1400, 31 L. Ed. 2d 768 (1972). Close examination of rationality protects the rights of both the state and the burdened class members, and is appropriate in this case.*fn12
13. Pennsylvania has recognized the importance of welfare and has undertaken to provide for "all of its needy." Having assumed this obligation, the state must discharge it fairly. Pennsylvania also wishes to distinguish between federal and state aid programs. If the state acts to realize this goal, it must do so rationally. The requirement that general assistance applicants who may be eligible for SSI must first apply for SSI is a rational means of attaining the state's twin objectives. It assures that the needy will receive aid, and that the aid will be provided by the appropriate governmental source. The further requirement that those denied SSI will Still be denied general assistance does not rationally serve those objectives because it operates to deny aid to the admittedly needy yet adds nothing to the federal-state distinction that has not already been achieved by the exhaustion rule. We cannot say that this is a rational means to further a governmental interest,*fn13 especially when less brutal but equally effective means of achieving its goals are available to the state.*fn14
14. We hold that P.A.E.M. § 297.1(e) discriminates among similarly situated persons and does not rationally further any legitimate governmental interests. Accordingly, the order of the district court enjoining the application of the regulation to appellee Henrich and all other similarly situated persons, will be affirmed.