On Appeal From the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 84-4229.
Higginbotham, Becker and Rosenn, Circuit Judges.
This is an action brought on behalf of a class of food stamp and welfare recipients by Cheryl Robinson, a food stamp recipient, and Philadelphia Citizens in Action, a welfare rights advocacy group, challenging the manner in which the defendants, federal and Commonwealth of Pennsylvania officials, have administered certain eligibility and benefit level provisions of the Food Stamp Act of 1964 as amended, 7 U.S.C. §§ 2011-2030 (1982 & Supp. IV 1986) ["the Act"] through various federal and state regulations and agency procedures. Plaintiffs' primary claim arises from defendants' interpretation of the 1981 and 1982 amendments to the Act which provided that "siblings who live together" must be combined into one food stamp household rather than treated as separate households for benefit calculation purposes, 7 U.S.C. § 2012(i)(3).
Plaintiffs complain that the defendants have created an irrebuttable presumption that siblings who live at the same address in fact live together and therefore constitute one household, in violation of the statute. This is a distinction of significance because, due to the economies of scale that may be realized in group purchase and preparation of food, a single household will receive a lower amount of food stamp benefits than will two or more households with the same total number of members as the single household. Plaintiffs also claim that defendants violated their due process rights by failing to send individual notices of eligibility or program requirements to the head of each family that has been combined under the sibling rule into a single food stamp household.
Plaintiffs raise a wholly separate claim arising out of the requirements of 7 C.F.R. § 273.2(d) (1988) (which are, in turn, derived from the verification provisions of the Act, 7 U.S.C. § 2020(e)(2) (1982 & Supp. IV 1986)) that households seeking eligibility for food stamps, Aid to Families with Dependent Children ("AFDC"), and Medical Assistance ("MA"), must cooperate with the state agency, and that certain information provided in the food stamp application must be verified through, inter alia, the use of third-party information or documentation, to establish the accuracy of statements on the application. Plaintiffs complain that the Pennsylvania Department of Public Welfare ("DPW"): (1) engages in a pattern and practice of repeatedly demanding from applicants and recipients information not clearly specified in the benefit application; and (2) denies plaintiffs benefits without offering them alternative means of proving their eligibility when a third party refuses to cooperate, in violation of the Due Process Clause, of 42 U.S.C. § 1983 (1982), and of other federal statutes and regulations.*fn1
The district court granted the defendants' motion to dismiss the third party verification claim, and granted defendants' motions for summary judgment as to the remaining claims. It also denied plaintiffs' motion for class action certification of the sibling rule and third party verification class claims. Finally, the court denied plaintiffs' motion to amend their complaint to add Annie Alvin and Gloria Pope as plaintiffs.
For the reasons that follow, we conclude that the district court erred in its grant of summary judgment as to the sibling rule claims, in granting the motion to dismiss the third party verification claims and in denying leave to amend to permit the addition of Annie Alvin and Gloria Pope as parties; hence we will reverse and remand for further proceedings. In all other respects, including disposition of the notification claim and the motion for class certification, the judgment and orders of the district court will be affirmed.
I. FACTS AND PROCEDURAL HISTORY
In their second amended complaint, plaintiffs proposed two classes of plaintiffs. Class A would consist of Cheryl Robinson, Annie Alvin and Philadelphia Citizens in Action and would raise the sibling household claims. Class B would consist of all of Class A plus Gloria Pope, and would raise the third party verification claims.
1. Plaintiff Cheryl Robinson
Plaintiff Cheryl Robinson, a food stamp recipient, lived with her eleven year-old son in a three- story house owned by her brother.*fn2 Cheryl's sister Margo Robinson and her daughter, also food stamp recipients, eventually moved into the house, although Cheryl apparently had no say in the matter. Over the years, Cheryl and Margo had several serious disagreements, and living in close quarters only seemed to exacerbate the existing tensions between them. When DPW discovered that Cheryl was living in the same house as her sister, she was given notice that unless she appealed, her food stamp benefits would be terminated. Cheryl did not file a timely appeal and her food stamp case was closed.
Cheryl and her sister were then notified by DPW, through the County Assistance Office, that under the federal and state regulations they would have to be included in the same household unit for food stamp purposes. The sisters agreed that Margo's name would be designated as "payment name" for purposes of receiving food stamps for the household. At one point, relations between the sisters became so strained that Cheryl asked her caseworker if she could be designated as payment name. The caseworker suggested that Cheryl find another place to live, apart from her sister.
Soon after the Robinsons were combined into a single household for purposes of receiving food stamps, the local caseworker discovered that Margo's daughter was not living with her, as she had claimed. As a result, Margo's food stamp benefits were terminated, thereby also depriving Cheryl and her son of benefits. Cheryl appealed.
At about the same time, the DPW caseworker began to suspect that Cheryl's brother, Keith Robinson, was living with Cheryl, inasmuch as his driver's license and voter registration card indicated his address as being the same as hers. The caseworker gave Cheryl an opportunity to show that Keith lived elsewhere -- a burden that was hers, see infra at 208 -- and the caseworker also attempted to establish where he lived. Because Cheryl was unable (or unwilling) to provide verification that her brother was living elsewhere, her reapplication for food stamps was denied. Cheryl again appealed. At her hearing, Cheryl testified that she did not want to provide the caseworker with a copy of her brother's voter registration card or driver's license, which listed her mother's address, because she knew that this information was false.
In light of these various problems, the caseworker made two appointments for Cheryl to reapply for benefits in her own name at a different location. Cheryl failed to, or chose not to, make such a reapplication.
On July 13, 1984, DPW's hearing officer denied both of Cheryl's appeals. The hearing officer stated that DPW's "regulations are explicit in providing that in no event is separate household status extended to siblings unless one sibling is elderly or disabled." (emphasis added). After filing this suit for declaratory and injunctive relief, and some seven months after her food stamp benefits were discontinued, Cheryl moved to Michigan; her son remained in Philadelphia. Cheryl also seeks restoration of the benefits allegedly unlawfully denied her.
2. Proposed Plaintiff Annie Alvin
Annie Alvin lived with her daughter in a building owned by the Philadelphia Housing Authority. Her sister Sharon and Sharon's son lived in the same building. The sisters had separate cooking facilities, bedrooms, living rooms, kitchens and telephones, but had common doors and stairs. Until February 1984, the sisters had received separate food stamp allotments. However, in February the DPW terminated Sharon's food stamp benefits and advised Annie that she would receive food stamps for a household that consisted of her family as well as Sharon's.*fn3 Because of this change, Sharon became uncooperative in paying her share of the rent and the utility bills. The friction between them increased to the point where Sharon moved out in September, 1984.
In December 1984, DPW informed Annie that she had received an overpayment of $1,134 in food stamps between April 1, 1983, and February 29, 1984. The basis for this calculation was the "sibling rule": for the period in question, the DPW combined the amount of food stamp benefits received by Annie and Sharon Alvin separately, and then subtracted the amount to which they were entitled as a single household. In December 1984, DPW demanded full repayment, in installments of at least $15 per month. As of this date, the DPW has not pursued collection activities nor reduced Annie's current allotment to recover the alleged past overissuances.*fn4
3. Proposed Plaintiff Gloria Pope
Gloria Pope, the only plaintiff who is solely a member of plaintiffs' proposed Class B, alleges that the DPW's third party verification procedures were unreasonably applied and that errors were made regarding her benefits which caused delay and inconvenience. In 1984, Pope, who had previously received public assistance, reapplied for AFDC, food stamp, and MA benefits. She was given a form PA 253, requesting various kinds of verification. Pope's application was denied, allegedly because of ...