On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil Action No. 88-533.
Gibbons, Chief Judge, Hutchinson, Circuit Judge, and Wolin, District Judge.*fn*
HUTCHINSON, Circuit Judge
Appellants Ronald Anderson (Anderson), Paul Jenkins (Jenkins) and James Campbell (Campbell) are fathers who have an obligation to support their children under Pennsylvania law.*fn1 Because Pennsylvania court records showed they were delinquent in meeting their obligations as embodied in state court orders, that state sought to intercept the fathers' federal tax refunds and apply them to their child support delinquencies, pursuant to federal statute and the state's Tax Refund Intercept Program (TRIP). The fathers challenged the state's operation of its tax intercept program in district court on due process grounds. The district court granted summary judgment to appellees John F. White, Jr. (White), Pennsylvania's Secretary of Welfare, and Joan Kravitz (Kravitz), legal coordinator in Delaware County. White and Kravitz are the officials responsible for administering TRIP -- White generally throughout Pennsylvania and Kravitz locally in Delaware County. The fathers appeal, contending that White and Kravitz failed to provide a program that met the due process requirements of notice and fair hearing.
On the notice issue, we conclude that summary judgment against the fathers in favor of both White and Kravitz was proper. On the hearing issue, summary judgment against Anderson and Jenkins in favor of both White and Kravitz was also proper, but it was not proper against Campbell as to appellee Kravitz. Therefore, we will affirm the district court's judgments against Anderson and Jenkins, but we will vacate its judgment and remand with respect to Campbell on the hearing issue. In particular, we hold that the district court should have considered whether Kravitz denied Campbell his due process right to a timely hearing and a timely written decision on the propriety of intercepting his tax refund and applying it against any delinquent child support he might owe.
TRIP is a federal program designed to aid state and local governments in collecting delinquencies from parents who fail to meet state court orders enforcing the parents' state obligations to support their children. State and local governmental units administer the program in cooperation with the United States Internal Revenue Service (IRS). Under TRIP, federal income tax refunds due persons who owe past-due child support can be intercepted by the IRS and ultimately sent instead to the state in which the children live. The state can then apply the refund money against welfare benefits previously paid to the delinquent's children or distribute it to the person who has lawful custody of the children. See 26 U.S.C.A. § 6402(c) (West 1989); 42 U.S.C.A. § 664 (West Supp. 1989); 26 C.F.R. § 301.6402-5 (1988); 45 C.F.R. §§ 302.60, 303.72 (1988). In Pennsylvania, the Bureau of Child Support Enforcement (state bureau), a division of the Department of Public Welfare's (DPW's) Office of Fraud and Abuse Investigation and Recovery, formally administers TRIP.*fn2 White is Secretary of the DPW.
The state bureau has contracted with the Domestic Relations Sections of Pennsylvania's Courts of Common Pleas. Courts of Common Pleas, or their subdivisions, have jurisdiction over child support matters and have territorial jurisdiction over the counties in Pennsylvania. See Pa.R.Civ.P. 1910.1-.4; 42 Pa.Cons.Stat.Ann. §§ 901, 931, 951-952 (Purdon 1981 & Supp. 1989). The Domestic Relations Sections of those courts are responsible for the day-to-day administration of TRIP. Joint Appendix (App.) at A-309-10. Kravitz is the Child Support Offset Coordinator of the Delaware County Domestic Relations Section (local agency) and is responsible for administering TRIP in that county.
TRIP procedures begin when the local agency identifies a parent who is past-due in his or her child support in welfare cases by $150 or more, and in non-welfare cases by $500 or more. 45 C.F.R. § 303.72. The local agency submits the name and social security number of the delinquent parent to the state bureau. It then relays the data to the United States Department of Health and Human Services, Office of Child Support Enforcement (federal office). Id. The federal office then forwards this information to the IRS, and it checks to see whether the parent is entitled to a tax refund. If a tax refund is due, the IRS intercepts the refund and begins the process of having this money refunded to the state. 26 C.F.R. § 301.6402-5. Normally the interception process is not completed until after the parent said to owe support has been given an opportunity to contest that fact in local administrative proceedings. Indeed, the TRIP statute and regulations require that he or she be sent a pre-offset notice before a parent's tax refund is actually intercepted and applied to his or her child support obligation. See 42 U.S.C.A. § 664(a)(3)(A); 42 C.F.R. § 303.72(e). If the parent makes no objection or if the objections are finally dismissed, the tax refund is sent to the local agency for application against the taxpayer's delinquent support obligation.
Under the federal statute and regulations, the pre-offset notice must inform the parent that his or her tax refund may be withheld to pay delinquent court-ordered child support. It must also inform the parent of the right to obtain administrative review through the local agency.*fn3 In Pennsylvania, as elsewhere, the state bureau has the option of sending out its own notice or of permitting the federal office to send a pre-offset notice on the state's behalf. Since it does not have all the necessary addresses, Pennsylvania, like most other states, has chosen to have the federal office send the mandatory pre-offset notice. App. at A-174-75.
The state bureau is not directly involved in the administrative review of TRIP disputes. It has, however, provided instructions and procedural guidelines to the local agencies in DRS Regulatory Memo 1987-18. App. at A-30. These procedures bind the local agencies in conducting the reviews that the federal regulations require, set out at 45 C.F.R. § 303.72(f) and (g). Under the bureau's Regulatory Memo, the local official conducting the review has authority to delete or modify arrearages, and the parent is entitled to a written decision informing him or her of the local agency's decision on review and of the right to seek judicial review of that decision in the Court of Common Pleas. Brief for Appellee White at 8-9.*fn4 The Memo permits administrative review either by informal hearing or correspondence. See App. at A-178. It apparently also gives the local agency power to adopt supplemental procedures on matters it does not cover. See id. at A-296. Kravitz says the local agency in Delaware County has supplemented the Memo's procedural requirements with local practices that currently give a parent the right to inspect the agency's records, submit additional evidence and be represented by counsel. See Brief for Appellee Kravitz at 15. Her evidence on this point is uncontradicted.
If the local agency determines that a modification or deletion is warranted after administrative review, it submits the appropriate information to the state bureau, which in turn forwards it to the federal office. 45 C.F.R. §§ 303.72(d)(2), (f)(3), (g)(4). The federal office then contacts the IRS, and the intercept order is changed. If the individual's tax return has not yet been processed, an intercept will be avoided. If, on the other hand, an inappropriate intercept has already occurred, the refund due to the individual is restored. Id. § 303.72(h)(4).
Anderson, Jenkins and Campbell challenge the notice and hearing procedures for TRIP actions in connection with their tax refunds for calendar year 1987. They each received letters in October, 1987, that stated:
The agency identified above [Delaware County DRS] has determined that you owe past-due child and/or spousal support. Our records show that you owe at least the amount shown below, and this amount will be referred to the Internal Revenue Service (IRS) for collection. Any federal income tax refund to which you may be entitled may be retained in full or partial satisfaction of this obligation.
You have a right to contest our determination that this amount of past-due support is owed. You may request an administrative review by contacting us no later than November 27, 1987 at the address or phone number listed above. If your support order was not issued in our state, we can conduct the review; or, if you would prefer that an administrative review be conducted in the state which issued the order, we will contact that state within 10 days after we receive your request. You will be notified of the time and place of your ...