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12/01/89 Children, Et Al., v. Edward Duffy

December 1, 1989

CHILDREN, ET AL., PLAINTIFFS-APPELLANTS

v.

EDWARD DUFFY, DIRECTOR OF ILLINOIS DEPARTMENT OF PUBLIC AID, ET AL., DEFENDANTS-APPELLEES



Before October 1, 1973, the standard of need and grant levels for AFDC families was determined generally on a case-by-case basis. The standard of need for each family was determined by totaling the sum of specified basic needs considered necessary for all recipients (i.e, food, shelter, personal essentials, clothing) and a number of variable special needs under certain circumstances (e.g., special diets for diabetics).

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION VELMA HIGHTOWER et al., Indiv., and on behalf of their

548 N.E.2d 495, 192 Ill. App. 3d 65, 139 Ill. Dec. 110 1989.IL.1857

Appeal from the Circuit Court of Cook County; the Hon. Kenneth L. Gillis and the Hon. Roger J. Kiley, Judges, presiding.

APPELLATE Judges:

PRESIDING JUSTICE EGAN delivered the opinion of the court. QUINLAN* and LaPORTA, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE EGAN

Two groups of plaintiffs, the Hightowers and Toneys, appeal from an order of Judge Roger J. Kiley dismissing their complaint (Hightower complaint); and another group of plaintiffs, the Clarks, appeal from an order of Judge Kenneth L. Gillis dismissing their complaint (Clark complaint). The appeals have been consolidated because they have some issues in common. They concern the rights of public assistance recipients. The principal contention in both complaints was that a plan adopted by the Illinois Department of Public Aid (Department) violates an Illinois statute and the Social Security Act. In only the Clark case was the contention decided on the merits. The Hightower case was dismissed on a procedural ground.

BACKGROUND

The Social Security Act established a Federal-State public assistance program for families with dependent children (AFDC Program). (42 U.S.C. § 601 et seq. (1982).) The Program is based essentially on a scheme of cooperative federalism. The Federal government finances the Program on a matching fund basis. States are not required to participate in the Program. However, those who choose to take advantage of substantial Federal funds available for aid must comply with certain Federal rules and regulations.

Illinois has chosen to participate in the AFDC Program. (Ill. Rev. Stat. 1985, ch. 23, par. 4-1 et seq.) The legislature created several programs of assistance which offer various types of assistance to different groups of people. The Aid to Families with Dependent Children and General Assistance programs are two such programs. The GA program, which is funded solely by the State, provides cash assistance and other services, including limited medical coverage, to families with children who do not qualify for the AFDC program. (Ill. Rev. Stat. 1987, ch. 23, par. 6-1 et seq.) The Department administers both the AFDC and the GA programs. (Ill. Rev. Stat. 1987, ch. 23, par. 12-1 et seq.) In the City of Chicago, the Department administers the GA program, and the State funds 100% of the program. Outside Chicago, local counties or townships administer the GA program; and joint State and local efforts or entirely local efforts fund the program.

Two basic factors account for the amount of financial assistance provided to any eligible AFDC or GA family. The first factor is the "standard of need," which is the minimum level determined by computing the cost of items considered necessary for subsistence. The second factor is the "aid payment" itself, which is the actual amount of financial assistance provided.

As of October 1, 1973, Federal law and Illinois law permitted Illinois to "consolidate" its AFDC standard of need and grant structure. This consolidation resulted in averaging some or all of the sums representing the individually determined needs into the standard of need for all AFDC families. Consequently, the Department instituted the Illinois Consolidated Standard Plan, effective October 1, 1973, which sought to consolidate the AFDC standard and grant structure in accordance with Federal and State law.

As implemented, the consolidated standard of need for AFDC families varied by only three factors: the size of the family, the composition of the family (adult caretaker and child or child only), and the family's county of residence. The State was divided into three county groups: Group I included Cook County and other more populous counties; Group II included less populous counties; and Group III included rural, relatively sparsely populated counties. Under such consolidation, all families of the same size, composition, and residence (with no other countable income) were computed to have the same standard of need and received the same grant. Generally, the amount of an eligible family's grant depended upon a basic payment level for that family minus the amount of the family's countable income (countable for public assistance purposes, such as Social Security benefits). Although neither Federal nor State law required it, the Department paid eligible families 100% of their applicable standard of need. By 1978, the Department had fully adopted the same consolidated standard for families in the State-funded GA program as well.

In October 1981 the Department changed the formula for its AFDC and GA family standards. However, rather than consolidate its existing standards as it did in 1973, the Department utilized an entirely different statistical base and adjusted the family standards of need significantly upwards; but the percentages paid were no longer 100%.

Aid payments continued to vary by the same three factors that were decisive in the previous program's standards: family size, composition, and county of residence. Although the Department's change in formula adjusted family standards of need significantly upward, aid payment levels remained the same. This meant that aid payments for any family became less than or only a percentage of the new higher standard of need for that family. Under this change, the Department paid eligible families of different sizes unequal percentages of the applicable standard of need. For example, the Department granted a four-person (adult and children) family in Cook County (Group I) benefits equalling 62% of its standard (Payment Level = $368; Standard of Need = $593), whereas it granted a two-person (adult and child) family in Cook County benefits equaling approximately 75% of its standard (Payment Level = $250; Standard of Need = $332). The Department granted a four-person (children only) family in Group II benefits equaling 62.2% of its standard (Payment Level = $275; Standard of Need = $442), whereas it granted a two-person (adult and child) family in Group II benefits equalling approximately 72.3% of its standard (Payment Level = $236; Standard of Need = $326). Officials of the Federal Department of Health and Human Services criticized the lack of uniformity in the Illinois payment system.

Beginning in 1981, the Department adjusted upward both AFDC and GA standards and aid payments for families in accordance with cost of living increases. In addition, the Department allocated these upward adjustments to families in a manner designed to ensure that all families would ultimately be paid equal percentages of their standard of need. As a result, families being paid a lower percentage of their standard of need generally received higher upward grant adjustments than families being paid a higher percentage of their standard of need.

In 1984 the legislature expressly recognized rising energy costs and directed that "[d]uring the first month" that the Department paid grants, which included amounts for energy payments, the amounts of the grants were to "be adjusted to approach more closely a single percentage of the standard of assistance established" by the Department. (Ill. Rev. Stat. 1985, ch. 23, par. 12-4.11.) The next paragraph of that section of the Act was amended to add an additional basis for reduction of payments: "[To] accomplish the adjustment described in the preceding paragraph."

In January 1985 the Department provided a grant increase and simultaneously equalized the percentage of standards for family sizes one through six in Group I and II counties and family sizes one through eight in Group III counties, which represented over 98% of the family case load. This left only larger-sized families and child-only families to be equalized, which, by the Department's estimate, consisted of between 4,000 and 5,000 families.

In May 1986 the Department of Health and Human Services again criticized the Department's plan because of a perceived lack of uniformity and "threatened to declare Illinois in non-compliance with federal law." On January 1, 1987, in response to that criticism, the Department promulgated a rule which established, in effect, two levels for payments: one for those "assistance units" in existence before January 1, 1987, and the other for "assistance units" which would come into existence after January 1. Those in existence before January 1 were to be "grandfathered," that is, were to remain in effect at higher levels than those which would come into existence after January 1. The rule also provided that grandfathered status would be lost by a change in the assistance unit by an addition or deletion of an "assistance unit member" or "if the grandfather case is cancelled," for example, by a family going off assistance altogether.

THE PARTIES

The plaintiffs, Velma and Melvin Hightower and their seven children, had been receiving $649 per month in public assistance since 1986. On February 13, 1987, Velma gave birth to her eighth child. Based on her report that her family had increased, the Department notified her that she had lost her grandfathered status by an increase in her family and reduced her family's payments to $623 per month. The Department upheld the decision to reduce the family's monthly benefits and denied her internal administrative appeal.

The plaintiffs, Linda Toney and her eight minor children, first applied for assistance after January 1, 1987, and, therefore, did not have grandfathered status. She received $167 per month. (She had other countable income.) If she had applied before January 1, she would have received $225 per month. She also filed an administrative appeal; while the appeal was pending, she gave birth to her ninth child. Her award was increased to $199. She claimed that the family should receive the pre-January 1987 amount of $276. On June 25, 1987, after an administrative hearing, the Department upheld the decision to pay the Toney family the lower assistance amount.

The plaintiffs, Janet and Ronald Clark and their six minor children, were receiving $591 per month in 1986 and continued to receive that amount through June 1987. At that time, she and her children moved out of their home. The Department reduced her payments to $534. Under the rates effective before January 1, 1987, she would have received a monthly grant of $556. In September 1987, her husband rejoined the family, and Janet Clark requested that she be restored to the rates in existence before January 1. The Department refused on the ground that her grandfathered status had been cancelled.

To summarize, the Hightowers lost their grandfathered status because their family increased; the Clarks lost their grandfathered status because their family temporarily decreased; and Toney never had grandfathered status.

The defendants are the Illinois Department of Public Aid (Department) and Susan Suter, the present Director of Public Aid, who succeeded Edward Duffy, one of the original defendants.

THE PLEADINGS

On June 12, 1987, Velma Hightower filed an individual complaint for administrative review in the circuit court. On July 24, 1987, she and her husband, Melvin Hightower, were granted leave to file a four-count amended complaint. Counts I, II and III of the amended complaint were class action counts. The named plaintiffs in counts I and II include Velma and Melvin Hightower and their children and Linda Toney and her children; only the Hightowers are named in count III. The plaintiffs sought class-wide declaratory and injunctive relief under the Illinois Public Aid Code (count I), the Social Security Act (count II) and the United States and Illinois Constitutions (count III). Count IV was Hightower's individual claim under the Administrative Review Act. Toney separately filed an individual complaint for administrative review on July 30, 1987. The Toney complaint for administrative review was consolidated with the Hightower amended complaint and assigned to Judge Roger Kiley.

On October 19, 1987, Janet and Ronald Clark and their children filed a two-count complaint. Count I was brought on behalf of a class including AFDC and GA applicants and recipients and alleged a violation of the Illinois Public Aid Code. (Ill. Rev. Stat. 1985, ch. 23, par. 12-4.11.) Count II was brought on behalf of a class including only AFDC applicants and recipients and alleged a violation of the Social Security Act. (42 U.S.C. §§ 602(a)(1), (a)(10) (1982); 45 C.F.R. § 233.1 (1988).) The plaintiffs sought declaratory and injunctive relief under both counts. The Clark case was assigned to Judge Kenneth L. Gillis.

We pause to point out that the class claims of counts I and II of the Hightower complaint are the same class claims as counts I and II of the Clark complaint. The Clark complaint does not contain a ...


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