are not protected funds and that legal sanctions may ensue if the recipient fails to make reimbursement from that particular check. We believe that this practice constitutes an implied threat of legal process and, accordingly, we declare it illegal and invalid.
B. The GA Program
With respect to recoupment of GA benefits awarded pending receipt of SSI funds, plaintiffs allege virtually the same statutory conflicts with the Social Security Act as those they alleged with regard to AFDC reimbursement. The arguments have been slightly modified, however, to reflect the importance of the Interim Assistance Reimbursement Program, codified as Section 1383(g) of Title 42 of the United States Code. Congress enacted the IAR Program in 1974 to insure that states would retain the incentive to provide interim public assistance to SSI applicants.
The program permits states to enter into an agreement with the Secretary of HEW pursuant to which the Secretary will, upon receipt of written authorization from an SSI applicant, forward that individual's lump sum SSI check to the state. The written authorization used by the Pennsylvania DPW is a PA 176S form, and it is undisputed that this form, when signed by the GA applicant, acts as an assignment of his SSI benefits to the Department (to the extent of the amount of interim assistance received). Plaintiffs argue first that the IAR Program authorizes voluntary assignments only, and therefore signing of the PA 176S form cannot be made a condition of eligibility for assistance.
1. The PA 176S Form May Be Used as a Condition of Eligibility For Assistance
In support of their argument that Section 1383(g)(1) only permits states to secure "voluntary" assignments, plaintiffs point out that Congress could have simply allowed the Social Security Administration to mail the recipients' SSI checks directly to the state welfare department without the necessity of "written authorizations" from the recipients, but it chose not to enact such a provision. While this point is a fair observation, it is not dispositive, for there is no evidence that Congress ever considered such alternative language. A better way to ascertain Congress' intent, we submit, is to examine the legislative history of the statute. The House Subcommittee charged with responsibility for the IAR program said, in making the program permanent, that Congress feared states would abandon awards of interim assistance if they had no device to obtain reimbursement from the initial lump sum SSI check before the recipients spent the overpayments.
In our view, this legislative history shows congressional awareness of the impracticality of direct recipient reimbursement after Philpott and a desire to provide states with a workable mechanism for recouping interim assistance awarded pending receipt of delayed SSI benefits. Requiring GA applicants to assign the SSI overpayment as a condition of eligibility for assistance is fully consistent with both this objective and other provisions of the Social Security Act. See Charleston v. Wohlgemuth, 332 F. Supp. 1175 (E.D.Pa.1971). For these reasons, we reject plaintiff's assertion that the GA assignments are unlawful under Section 1383(g)(1).
2. Legal Process
Similarly, we find no merit in plaintiff's contention that the department uses prohibited "legal process" when it collects reimbursement from GA recipients who have signed the PA 176K form instead of the PA 176S assignment form. In these circumstances, it is only inadvertent caseworker error which causes the wrong form to be signed, the initial lump sum SSI check to be forwarded directly to the GA recipient rather than to the Department, and collection to proceed on face-to-face basis. Above, we have stated that the Department does not use proscribed legal process when it instructs AFDC recipients that the PA 176 K forms are legally binding, but fails to disclose that the agreements are unenforceable against SSI proceeds as a result of the Philpott decision.
The same reasoning applies here. Moreover, unlike AFDC reimbursement, GA reimbursement is specifically authorized by the statutory exception set forth in Section 1383(g)(1). To hold that the state would lose its right to be reimbursed merely because the established procedure for signing the PA 176S assignment form was not followed is inconsistent with Congress' legislative intent. Lynn v. Com., Dept. of Public Welfare, 37 Pa.Cmwlth. 590, 391 A.2d 1093, 1094 (1978).
We do not conclude that the Department may use any means necessary to recoup its interim assistance from GA clients. A showing of a widespread pattern or practice of coercion or intimidation during the collection process would warrant relief in favor of plaintiffs. But here no such showing has been made. The affidavits submitted by plaintiffs indicate that sporadic abuses have occurred, but we cannot conclude on the basis of this evidence alone that the Department has been engaged in a pattern or practice of misconduct. Accordingly, we find no conflicts between the DPW's GA reimbursement efforts and the Social Security Act, and we turn to a consideration of plaintiffs' state law claims.
IV. Plaintiffs' State Law Claims
Plaintiffs predicate their state law claims on the Department's own regulations and the pronouncement of the Pennsylvania State Courts that reimbursement from delayed Social Security benefits may be collected only through "fair means". The seminal authority for each of plaintiffs' contentions is Good v. Wohlgemuth, 15 Pa.Cmwlth. 524, 327 A.2d 397 (1974). There, the Pennsylvania Commonwealth Court held that a DPW caseworker violated Department regulations governing the collection of reimbursement by contacting a recipient and leading her to the bank in order to cash her SSI check. Noting that the regulations prohibit caseworkers from actively participating in the collection practice,
the Court ordered a refund of the monies that were improperly obtained. Good, 327 A.2d at 400-02.
A footnote in the Good opinion planted the seeds of the "fair means" test. In note 3, the Court remarked that it did not interpret Philpott to preclude reimbursement from SSI benefits so long as collection was achieved by "fair means other than legal process." Good, 327 A.2d at 399 n.3. Although the Court articulated no guidelines for distinguishing "fair" or "unfair" collection practices, later decisions invalidated reimbursements in which the department failed to disclose Philpott rights and misled recipients of delayed Social Security benefits other than SSI into believing that they had a legal obligation to make repayment from these benefits where no such obligation existed. See St. Clair v. Department of Public Welfare, 29 Pa.Cmwlth. 150, 370 A.2d 751 (1977) and Wohlgemuth v. Armacost, 18 Pa.Cmwlth. 394, 336 A.2d 455 (1975). Plaintiffs request us to follow these precedents and require the department to inform SSI recipients of all their legal rights, including not only Philpott immunity, but also the availability of free legal assistance.
In light of recent Pennsylvania State Court decisions, we cannot grant plaintiffs' request. The Supreme Court of Pennsylvania in Tunnicliff, 396 A.2d at 1171-73, ruled that the "fair means" standard is not violated by mere failure to disclose Philpott and its impact. Accord : Lynn, 37 Pa.Cmwlth. 590, 391 A.2d 1093. Noting that the Good decision was based upon unauthorized caseworker participation in the collection process, the Court implicitly suggested that only affirmative misconduct would offend its notion of "fair means."
Tunnicliff, 396 A.2d at 1171 n.6.
On the factual record now before us, we find only one instance of repeated affirmative misconduct by DPW employees. As mentioned above, the affidavits submitted by plaintiffs show that caseworkers routinely direct SSI recipients not to cash their lump sum SSI checks and to turn over those checks to the Department. The Department's regulations specifically assign primary responsibility for collection of reimbursement claims to the Claims Settlement Division; caseworkers are authorized only to accept a payment if offered by the debtor/claimant.
As Good makes clear, Pennsylvania law prohibits DPW caseworkers from taking an active role in the collection process. For this reason, we declare the aforesaid practice unlawful and invalid under Pennsylvania law as well as under section 407.
V. Plaintiffs' Equal Protection and Due Process Claims
There remain plaintiffs' constitutional claims. Plaintiffs argue first that the Department denies them equal protection of the laws when it seeks reimbursement for interim assistance from them, but not from individuals who receive OASDI benefits under Title II of the Social Security Act.
It is clear that in the field of social welfare law differential classifications should be upheld if they are rationally related to a proper end. See Dandridge v. Williams, 397 U.S. 471, 485-87, 90 S. Ct. 1153, 1161-62, 25 L. Ed. 2d 491, 501-02 (1970). Defendants maintain that their policy of seeking reimbursement from SSI recipients, but not from OASDI recipients, prevents double dipping into state funds and conserves the pool of public assistance money available for all needy individuals. Defendants point out that SSI is a "welfare" program financed by general tax revenues from both the state and the federal governments while OASDI is in the nature of a "retirement" program and is financed partly from the recipients own past contributions. According to defendants, Congress did not intend to provide a windfall to SSI recipients by allowing duplicate assistance payments from both the state and federal coffers.
Exercising minimal scrutiny, as we must, we believe this differential treatment is legally permissible. The goal of the state policy is to permit only one resort to state assistance funds for all individuals at the time they are in need. Avoiding duplicate assistance payments is a legitimate state concern indeed, one recognized by Congress when it enacted the Interim Assistance Reimbursement program and the DPW's policy of seeking reimbursement from SSI, but not OASDI, recipients rationally serves this end.
Furthermore, we find no constitutional violation in the failure of the Department to inform plaintiffs of the Philpott decision or of the availability of free legal services during the collection process. Philpott itself was narrowly predicated on statutory grounds. The decision merely held that under section 407 state welfare departments could not use legal process to attach delayed social security benefits. Put most concisely, plaintiffs' argument is that the state government has an affirmative constitutional duty to advise them of this statutory right.
We recognize that plaintiffs receive low incomes and may possess little formal education, rendering them particularly susceptible to overbearing credit practices. See, e.g., Swarb v. Lennox, 314 F. Supp. 1091 (E.D.Pa.1970), aff'd, 405 U.S. 191, 92 S. Ct. 767, 31 L. Ed. 2d 138 (1972). Undoubtedly, Congress shared this perception when it enacted section 407. But we have not found, and plaintiffs have not cited, any precedent for imposing on the state a constitutional obligation to inform these debtor/claimants that, as a creditor, the state may not resort to legal process to collect the valid debt. Nor is the state under an affirmative duty to advise plaintiffs of the availability of free legal services as part of the collection process. Consequently, we conclude that the DPW's reimbursement policies do not offend fundamental fairness or substantive due process.
Plaintiffs' final constitutional claim concerns procedural due process. Plaintiffs contend that they do not receive an adequate opportunity for a hearing to challenge their liability for and the amount of the Department's SSI reimbursement claim against them. Under Department regulations, SSI recipients are entitled to a hearing to contest the computation of the DPW's reimbursement claim. 55 Pa.Code § 275.1(a)(4)(i)(F). It is undisputed, however, that AFDC recipients never receive notice of this right. General Stipulations, No. 26. GA recipients are notified of their right to request a departmental hearing either by accompanying notice, if the DPW sends them a refund check after deducting the amount of interim assistance, or by letter if no refund is due; but the hearing always occurs after collection.
The constitutional safeguard of procedural due process protects individuals from erroneous deprivation of their interests by governmental action. In the case of AFDC reimbursement, however, the state may not and does not use legal process to compel repayment. Thus, the decision to make repayment and the extent of repayment are determined by the individual recipient, not government compulsion. If the individual disagrees with the state's computation of its reimbursement claim, he always has the option to withhold the SSI proceeds.
Plaintiffs have cited no authority for the proposition that in this setting the recipients are legally entitled to notice of a hearing, and our independent research reveals no such precedent. Moreover, if the AFDC recipients were notified by CS agents that they had a right to a hearing to contest their liability, they might feel that the state could resort to this same mechanism to enforce reimbursement, thereby construing the notice as involving legal process and causing the very harm of which plaintiffs complain.
Unlike AFDC recipients, GA recipients do not receive their full checks directly from SSA, but rather receive from DPW only the balance due after the state deducts its claim. GA recipients are provided notice of and an opportunity for a fair hearing. Nevertheless, plaintiffs argue that this hearing should occur prior to collection of reimbursement.
In Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 47 L. Ed. 2d 18, 33 (1976), the Supreme Court reasoned that identification of the specific dictates of due process generally requires consideration of three distinct factors: "First, the private interest that will be affected by the official actions; second, the risk of erroneous deprivation of such interest through the procedures used, and probable value, if any, of additional safeguards; . . . and finally, the government's interest in the fiscal and administrative burdens that the additional or substitute procedure would entail."
If a pre-collection hearing were provided for GA recipients, the recipients would be forced to wait an even longer period of time for receipt of their refund. This result would follow because the initial lump sum SSI check is sent directly to DPW, rather than to the individual. Balancing the factors identified by the Supreme Court in Mathews v. Eldridge, we conclude that the post-collection hearing currently provided for GA recipients satisfies the dictates of procedural due process.
After careful consideration of the plaintiffs' claims, we have found only one of defendants' reimbursement practices to be unlawful, the active involvement of caseworkers in the collection process in contravention of section 407 and DPW regulations. Plaintiffs have requested not only monetary damages, but also declaratory, injunctive and notice relief.
In view of the sovereign immunity granted to the states by the Eleventh Amendment to the United States Constitution, we cannot fashion a retroactive award which would require the payment of funds from the Pennsylvania state treasury.
Edelman v. Jordan, 415 U.S. 651, 94 S. Ct. 1347, 39 L. Ed. 2d 662 (1974); Quern v. Jordan, 440 U.S. 332, 99 S. Ct. 1139, 59 L. Ed. 2d 358 (1979). Hence, we may not order the restitution of SSI benefits wrongfully collected by DPW. Moreover, since we believe the state will respect a declaratory judgment issued by this court, we see no need for injunctive or notice relief.