The opinion of the court was delivered by: PIERCE
Plaintiffs in this action have moved this Court for a preliminary injunction and for an order determining that this action may properly be maintained as a class action pursuant to Rule 23, Fed. R. Civ. P. This suit is brought by recipients of public assistance benefits in the federally-aided program of Aid to Families with Dependent Children (AFDC).
The defendants are George K. Wyman, the Commissioner of Social Services of the State of New York, and Jule Sugarman, the Commissioner of Social Services of the City of New York. The plaintiffs assert two claims, one constitutional and the other statutory. The constitutional claim is that defendants have reduced plaintiffs' public assistance benefits without a hearing, or without a hearing sufficient to meet the requirements of the Due Process Clause. The statutory claim is that defendants have failed to implement the federal regulation governing fair hearings upon termination, suspension or reduction of assistance, 45 C.F.R. § 205.10, 36 Fed. Reg. 3034 (1971). Ultimately, plaintiffs seek a declaratory judgment, a permanent injunction, restitution of moneys wrongfully withheld, as well as compensatory and punitive damages to the named plaintiffs and the members of their class. At this stage, the only questions before the Court are whether to issue an order determining that this is a proper class action and whether to issue a preliminary injunction.
The three named plaintiffs in the case are Maria Almenares, Cresencia Garcia, and Janet Rodriguez. Plaintiff Almenares had been receiving an AFDC grant of $120.50 bi-monthly. In a letter dated July 12, 1971, she was informed that her bi-monthly grant would be reduced to $6.35 effective July 16, 1971. The reasons given were that her landlord had stated that she had not paid rent for part of May, or for June and July. On this ground her rent allowance was subtracted. In addition, her grant was further reduced because she was allegedly receiving $25 a week as support money from her husband. As to the rent, Mrs. Almenares contends that she continued to have an obligation to pay rent, but that she was withholding rent money pursuant to Section 755, N.Y. Real Property Actions and Proceedings (McKinney's Consol. Laws, c. 81, 1963). She also asserts that, but for two $25.00 weekly payments, she had not been receiving support money from her husband. Prior to the actual reduction, Mrs. Almenares was not granted a hearing in which to raise her contentions.
Plaintiff Garcia received notice, dated April 14, 1971, stating that her grant would be reduced as of May 16, 1971, from $117 bi-monthly to $93.60 bi-monthly. The reason for the reduction was that Mrs. Garcia had allegedly endorsed checks which she had claimed were not received. The reduction actually took effect beginning May 1, 1971 and a review was not held until July 9, 1971. The decision upon review was adverse to Mrs. Garcia, but she claims that the nature of the review itself did not afford her due process.
The last named plaintiff, Janet Rodriguez, received notice in the beginning of July advising her that her assistance would be suspended because she had been "working for some time." A later notice stated that her grant would be reduced to $27.45 bi-monthly. Although plaintiff attests that she had not been working and she requested a review to contest the grounds for the reduction, no review was afforded as of the date of the filing of this suit. The reduction took effect, however, as of her check for the first half of August.
The New York City Department of Social Services relies, in each of these cases, on its alleged compliance with 18 N.Y.C.R.R. § 351.26 (1971),
the fair hearing rule promulgated by the State, as well as Procedure No. 71-21, the City's fair hearing rule. Procedure No. 71-21 delineates eight situations in which assistance may be curtailed without a prior hearing.
As to each of the named plaintiffs, the City defendant relies on subsection (g):
"Discontinuance of assistance or reduction of client's budget is mandated by law." For example, as to plaintiff Rodriguez the City states that since a Department regulation requires that income from a job must be deducted from welfare assistance, Mrs. Rodriguez' grant was properly reduced without a prior hearing. The City states that Mrs. Rodriguez' employment was "verified by Alexander's Department Store," and although this plaintiff attests that she did not hold such a job, the City concludes that there was "no question of fact" and the reduction was thus mandated by law. Defendant Wyman's position with regard to these plaintiffs is that the State regulation, 18 N.Y.C.R.R. § 351.26, is not challenged on constitutional grounds and that the State has no duty to supervise the local agency's practices with regard to pretermination hearings.
Plaintiffs allege that, among other grounds, the jurisdiction of the Court is founded upon 42 U.S.C. § 1983 (1970) and 28 U.S.C. § 1343(3)(1970). In welfare cases such as this one, jurisdiction under § 1343(3) will properly lie so long as a colorable constitutional claim is raised. Lewis v. Martin, 397 U.S. 552, 90 S. Ct. 1282, 25 L. Ed. 2d 561 (1970); Dandridge v. Williams, 397 U.S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970); Rosado v. Wyman, 397 U.S. 397, 90 S. Ct. 1207, 25 L. Ed. 2d 442 (1970); King v. Smith, 392 U.S. 309, 88 S. Ct. 2128, 20 L. Ed. 2d 1118 (1968); Campagnuolo v. Harder, 440 F.2d 1225 (2d Cir. 1971); Johnson v. Harder, 438 F.2d 7 (2d Cir. 1971). The Court finds that the facts as set forth present a colorable constitutional claim under the Due Process requirements for pretermination hearings which the Supreme Court established in Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970). Although Goldberg is distinguishable from the present case in that it involved terminations, rather than reductions, of welfare benefits the constitutional claim is colorable nonetheless. In fact, it would appear that the logic of Goldberg would extend to reductions of welfare benefits,
as for example, in the case of Mrs. Almenares where the reduction was so substantial as to create a situation not unlike complete termination. Thus, the Court finds that a colorable constitutional claim was presented and jurisdiction in this case is properly founded upon 28 U.S.C. § 1343(3).
Defendant Wyman seeks to avoid the effect of this determination by asserting that the constitutional claim presented by plaintiffs is based on the local agency's, rather than the State's, actions. Further, defendant Wyman denies an affirmative duty to supervise the local agency's hearing procedures. The plaintiffs assert that defendant Wyman is implicated on the constitutional claim against the City because defendant Sugarman is merely an agent of the State. For purposes of determining this application for a preliminary injunction, the Court finds that under the New York statute defendant Wyman is responsible for supervising defendant Sugarman's conduct and, therefore, the constitutional claim asserted against the City states a claim against the State, as well. The State Department of Social Services is charged with supervising local welfare departments and their officials, N.Y. Social Services Law, § 20(2)(b), (3)(a), (3)(f) (McKinney's Consol. Laws, c. 55, 1966). The State Commissioner is specifically required to exercise general supervision over the local agencies, N.Y. Social Services Law, § 34(3)(d), (e) (McKinney 1966). Furthermore, the Social Security Act requires a State plan to provide for the establishment of a single State agency to administer, or to supervise the administration of the assistance program. 42 U.S.C. §§ 602(a)(3), 1382(a)(3) (1970.) In conclusion, both the State and the federal statutory schemes set forth defendant Wyman's responsibility for defendant Sugarman's conduct and procedures. Plaintiffs have stated a colorable constitutional claim against both defendants and jurisdiction is found to exist as to defendant Wyman, as well as to defendant Sugarman.
Having found that jurisdiction is established under § 1343(3) on the constitutional claim, the Court assumes pendent jurisdiction over the statutory claim. Dandridge v. Williams, 397 U.S. 471, 475-476, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970); Wyman v. Rothstein, 398 U.S. 275, 90 S. Ct. 1582, 26 L. Ed. 2d 218 (1970) (per curiam); Wilczynski v. Harder, 323 F. Supp. 509, 514 (D. Conn. 1971); Solman v. Shapiro, 300 F. Supp. 409 (D. Conn. 1969), aff'd mem., 396 U.S. 5, 90 S. Ct. 25, 24 L. Ed. 2d 5 (1969).
II. ADMINISTRATIVE REMEDIES
Defendant Wyman has further argued that the Court should decline to exercise its jurisdiction in this case so as to allow the Department of Health, Education and Welfare (HEW) to resolve the regulatory conflict with the State. Specifically, the State suggests that judicial review would only be available following a conformity hearing pursuant to 42 U.S.C. § 1316 (1970). The Supreme Court rejected this argument in Rosado v. Wyman, 397 U.S. 397, 406, 90 S. Ct. 1207, 1215, 25 L. Ed. 2d 442 (1969), noting that "HEW has no procedures whereby welfare recipients may trigger and participate in the Department's review of state welfare programs."
Defendant Wyman seeks to distinguish the present situation from the one before the Court in Rosado by citing a recent decision in which welfare recipients were granted the right to intervene in an HEW conformity hearing. National Welfare Rights Organization v. Finch, 139 U.S. App. D.C. 46, 429 F.2d 725 (1970). Regulations issued by HEW subsequent to that decision confirm that welfare recipients may now participate in hearings, if they demonstrate a requisite interest in the proceedings. 45 C.F.R. § 213.15 (1971). This regulation cures part of the difficulty which the Court noted in Rosado, namely, welfare recipients may now participate in HEW's review of State welfare programs. However, the other part of the problem considered in Rosado remains unremedied. It is still not possible for welfare recipients to "trigger" HEW's review procedure. Perhaps a different case would be presented if HEW had initiated a conformity hearing in this State and it only remained for plaintiffs to file a petition to participate. This is not, however, the situation before the Court. A conformity hearing has not ...