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October 16, 1972

Lydia AGUAYO et al., Plaintiffs,
Elliot R. RICHARDSON, Secretary of the United States Department of Health, Education and Welfare, et al., Defendants

Bauman, District Judge.

The opinion of the court was delivered by: BAUMAN

BAUMAN, District Judge.

This is an action challenging the approval by the Secretary of the Department of Health, Education and Welfare (HEW) of two project applications submitted by the New York State Department of Social Services. These two projects, the Public Service Work Opportunities Project (PSWOP) and Incentives for Independence (IFI) were finally approved as demonstration projects pursuant to Social Security Act § 1115 (42 U.S.C. § 1315) on June 1, 1972 for implementation starting August 1, 1972. A temporary restraining order, issued on August 4, 1972, prevented this and application has now been made for a preliminary injunction. Plaintiffs also petition for the convening of a three judge court pursuant to 28 U.S.C. §§ 2282 and 2284.

 The PSWOP program has been approved for an initial period of one year and is to be in effect in 14 social service districts throughout the State. It requires every "employable" member of a family receiving welfare assistance under the Aid to Families with Dependent Children (AFDC) program to register with the New York State Employment Service for training and employment. Employability is determined by reference to specific guidelines which exempt certain types of welfare recipients: those already employed, receiving training, or unable to accept employment because of the need to care for dependents. If employable under the guidelines, the recipient would be required to accept referral to a suitable manpower training program, or to employment in the public or private sector depending on his particular qualifications. If the recipient is unsuited for a training program or regular employment, he would be referred to a job specifically established by the PSWOP program. Failure to comply would result in loss of benefits.

 The IFI program, also of one year's duration, is to operate only in three of the 14 areas. Like PSWOP, IFI requires welfare recipients to accept training or employment. PSWOP however, only permits recipients to "work off" their welfare grants. They can earn no more than their weekly welfare stipend. Under IFI, a recipient who receives a job could keep a portion of his earnings without a grant reduction and might thus be able to increase his monthly income. IFI differs from PSWOP in two other major aspects. It includes a "Work Motivation For Youth" program which provides jobs for children of AFDC families who are over 16 and attending school as well as counselling for families whose children are school truancy problems.

 Both of these programs are specifically denoted to be experimental.

 Plaintiffs fall into three categories: recipients of public assistance under AFDC, welfare rights organizations, and the City of New York and its Commissioner of Social Services. Their attack on the PSWOP and IFI programs is twofold. First, they allege that the programs are constitutionally defective because they deny plaintiffs' right to due process and equal protection secured by the Fifth and Fourteenth Amendments of the Constitution. Second, they allege that the programs fail to comply with various requirements of the Social Security Act (42 U.S.C. § 301 et seq.).

 For the reasons stated below, I find the plaintiffs' Constitutional claims to be without substance, and that as a consequence, this Court lacks jurisdiction over the State defendants. Jurisdiction over the Federal defendants pursuant to the provisions of the Administrative Procedure Act is properly invoked.


 At the threshold, one encounters a serious question of standing with respect to two of the three categories of plaintiffs. Although plaintiffs do not address themselves to this question, and defendants do so only briefly, it is the view of the Court that the welfare organizations lack the requisite standing to sue and the City of New York has standing only with respect to the statutory claims.

 The case of Sierra Club v. Morton, 405 U.S. 727, 92 S. Ct. 1361, 31 L. Ed. 2d 636 (1972), seems determinative as to the welfare organizations. In that case, the Sierra Club sought a declaratory judgment and an injunction restraining Federal officials from approving a skiing development in a national forest. The Supreme Court reiterated the test of standing first enunciated in Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970) and Barlow v. Collins, 397 U.S. 159, 90 S. Ct. 832, 25 L. Ed. 2d 192 (1970), i.e., plaintiffs have standing to challenge the action of a Federal administrative agency where such action caused them "injury in fact" and where that alleged injury was to an interest "arguably within the zone of interests to be protected or regulated" by the statute allegedly violated (397 U.S. at 153, 90 S. Ct. 827, 830, 25 L. Ed. 2d 184). In Morton, the Court found no indication that the Sierra Club would be significantly affected by the proposed development and observed that "broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must have himself suffered an injury." 405 U.S. at 738, 92 S. Ct. at 1368.

 In National Welfare Rights Organization v. Wyman, 304 F. Supp. 1346 (E.D.N.Y.1968), Judge Weinstein ruled that two welfare organizations were without standing to contest certain amendments to New York's Social Services Law because there was no showing of any injury to the organizations as distinct from the possible diminution of welfare benefits to its membership. That is the case here as well.

 The City of New York and its Commissioner of Social Services lack the standing to raise constitutional claims. The identical question arose in City of New York v. Richardson, 71 Civ. 802 (S.D.N.Y.1972), a case in which New York City sought to enjoin enforcement of the welfare provisions of the Social Security Act. Judge McLean held that a city, which is a political subdivision of a State, could not challenge the validity of a State statute on Fourteenth Amendment grounds, relying on Williams v. Mayor and City Council of Baltimore, 289 U.S. 36, 53 S. Ct. 431, 77 L. Ed. 1015 (1933), the leading case on this question. Williams states: "A municipal corporation, created by a state for the better ordering of government, has no privileges or immunities under the Federal Constitution which it may invoke in opposition to the will of its creator." (289 U.S. at 40, 53 S. Ct. at 432). I concur with Judge McLean in finding continued vitality in the reasoning of Williams and find that it binds the City of New York and its Commissioner of Social Services here.

 The City of New York does, however, have standing to challenge the Secretary's approval under the provisions of the Administrative Procedure Act, 5 U.S.C. § 701 et seq. 5 U.S.C. § 702 provides: "A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." Whether this statute permits municipal corporations to challenge agency action was implicitly determined in Scenic Hudson Preservation Conference v. Federal Power Commission, 354 F.2d 608 (2d Cir. 1965), which held, inter alia, that certain New York towns had standing to obtain review of an FPC decision to build a hydroelectric project. The Court there noted that the towns were "aggrieved parties" because the project's transmission lines would cause a decrease in the proprietary value of publicly held land, reduce tax revenues collected from privately held land, and interfere with long range community planning. See also, Road Review League, Town of Bedford v. Boyd, 270 F. Supp. 650 (S.D.N.Y.1967), holding that a town had standing to challenge an administrative determination regarding the placement of highways.

 Counsel for the City complains that the programs will involve it in additional expense of about $2.6 million. *fn1" Seen in relation to a total budget of over $8.6 billion and approximately 1 1/4 million people on the relief rolls the argument is almost trifling. *fn2" One would think the City would enthusiastically endorse a responsible experiment calculated to enrich the lives of its citizens by taking them off relief and putting them to self respecting work. However, in view of the alleged administrative burden and possible financial loss which New York City claims it will incur, I conclude that it is a "person aggrieved" within the meaning of 5 U.S.C. § 702 and may raise statutory claims.


 Plaintiffs allege jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337; pursuant to 5 U.S.C. § 701 as to the Federal defendants, and pursuant to 28 U.S.C. § 1343(3) as to the State defendants. For the following reasons the Court holds that it is without jurisdiction over the State defendants, and is possessed of jurisdiction as to the Federal defendants pursuant to 5 U.S.C. § 701 only.

 Before reaching this question however, it is necessary to consider plaintiffs' Constitutional arguments. All of these contentions are insubstantial and thus the ultimate thrust of the attack on the programs is reduced to construction of the appropriate statutes.

 Plaintiffs make three Constitutional claims. The first is to be found in the fifth and sixth claims of their complaint which charge that the implementation of the PSWOP and IFI programs in 14 social services districts in the State affects only one quarter of the State's welfare recipients. This, they argue, constitutes invidious discrimination in violation of the Fifth and Fourteenth Amendments' guarantee of equal protection. The recent case of Dandridge v. Williams, 397 U.S. 471, 90 S. Ct. 1153, 25 L. Ed. 2d 491 (1970), is a direct answer. It involved a suit by AFDC recipients to enjoin application of a Maryland maximum grant regulation as inconsistent with the Social Security Act and the Equal Protection Clause. The Supreme Court disposed of the equal protection argument as follows: "In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some 'reasonable basis,' it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequality.'" (397 U.S. at 485, 90 S. Ct. at 1161). See also, Jefferson v. Hackney, 406 U.S. 535, 92 S. Ct. 1724, 32 L. Ed. 2d 285 (1972).

 It is beyond reasonable dispute that the classification here at issue has a rational basis. The programs which the plaintiffs allege to be discriminatory are experimental projects of limited duration. New York State, in cooperation with the Federal government, has undertaken them to gain experience bearing on whether they should ultimately be applied throughout the State. It is not a matter of a State capriciously requiring some welfare recipients to work and exempting others. The classifications created for the experiment are neither arbitrary nor intended to be permanent. The districts clearly were selected in order to provide an adequate sampling of welfare recipients of various ethnic backgrounds as well as those from urban, suburban and rural areas and, seen in this light, seem eminently reasonable.

 Plaintiffs' second Constitutional argument is that standards and defined procedures to be followed in the operation of the project are so utterly lacking as to be violative of the Due Process Clause of the Fifth and Fourteenth Amendments. They argue that the only standards provided are "tried and true catch words like 'good cause', 'adequacy', and 'suitability'" and that the individual case worker is left with virtually unfettered discretion. However, the materials submitted by the Department of Social Services in support of the PSWOP and IFI proposals contain a detailed list of the factors that are intended to guide administrative decisions. The criteria of employability, set out in the margin, *fn3" are as precise as might reasonably be required and further specificity would, it seems to me, impose insuperable burdens upon draftsmen and administrators alike.

 Plaintiffs' final Constitutional attack depends upon an assumption that the PSWOP and IFI programs fail to provide a pretermination hearing as mandated by Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970). However, the Social Services Department of New York State pursuant to 18 N.Y.C.R.R. § 385.1 et seq. has committed itself *fn4" to providing a hearing as to any PSWOP or IFI decision that might affect a recipient's right to receive public assistance. This would seem to insure a hearing to anyone challenging a determination of employability or a particular job assignment. Under the programs a recipient would continue to receive his grant whether or not he reported to his job assignment until the outcome of the hearing is decided -- a provision seemingly designed to comply with the Goldberg standard. See also, Dublino v. New York State Department of Social Services, 348 F. Supp. 290 (W.D.N.Y.1972).

 Accordingly, plaintiffs' Constitutional arguments seem so insubstantial as to require that I deny their motion to convene a three-judge court pursuant to 28 U.S.C. §§ 2282 and 2284.


 Plaintiffs argue that the Court has jurisdiction over both State and Federal defendants pursuant to 28 U.S.C. §§ 1331 *fn5" and 1337. *fn6" The invocation of § 1337 is clearly frivolous. The Social Security Act is not an act "regulating commerce or protecting trade and commerce against restraints and monopolies" as Chief Judge Friendly noted in Almenares v. Wyman, 453 F.2d 1075 at 1082 (2d Cir. 1971), cert. denied 405 U.S. 944, 92 S. Ct. 962, 30 L. Ed. 2d 815 (1972). Nor does this Court possess jurisdiction under 28 U.S.C. § 1331, the statute which provides for general "arising under" jurisdiction. None of the plaintiffs alleges an individual financial loss of $10,000 and Snyder v. Harris, 394 U.S. 332, 89 S. Ct. 1053, 22 L. Ed. 2d 319 (1969), precludes the aggregation of claims.

 Plaintiffs further contend that 28 U.S.C. § 1343 *fn7" confers jurisdiction over the State defendants. Although this question has not yet been finally resolved by the Supreme Court, this Circuit has held in Almenares v. Wyman, supra, that a substantial Constitutional claim is essential for jurisdiction under § 1343(3) because the Social Security Act is not an "Act * * * providing for equal rights of citizens." Statutory claims do not suffice. As indicated, I regard the Constitutional claims in the instant case as insubstantial and I therefore hold that no jurisdiction attaches to the State defendants pursuant to § 1343.


 Jurisdiction over the Federal defendants does exist under 5 U.S.C. § 701 et seq., providing for judicial review of the actions of Federal agencies. The issue before this Court then is whether the Secretary's determination, under 42 U.S.C. § 1315, that the PSWOP and IFI programs were likely to promote the objectives of Title IV-A of the Social Security Act was erroneous. The scope of judicial review of the Secretary's action is defined in 5 U.S.C. § 706. In essence, the statute requires this Court to determine whether the Secretary's action was "arbitrary, capricious, an abuse of discretion", "contrary to constitutional right", or "in excess of statutory jurisdiction." The Supreme Court has recently set the standards lower courts must apply in making such determinations, "To make this finding, the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment . . . . Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971).

 After a careful study of the PSWOP and IFI programs, I have concluded that the approval of the Secretary was not erroneous. 42 U.S.C. § 1315 clearly states the consideration that is to guide the Secretary's decision here. The pilot or demonstration project may be approved if in the Secretary's judgment it is likely to assist in promoting the objectives of Title IV-A of the Social Security Act. Among the objectives of the Act, and of the AFDC program in particular, are the strengthening of family life and the attainment of "maximum self-support and personal independence consistent with the maintenance of continuing parental care." (42 U.S.C. § 601). The Secretary obviously had these precise objectives in mind when he approved the PSWOP and IFI programs. They require welfare recipients to work in order to learn the necessary skills so that they may live fuller and more productive lives thereafter. It is not the function of this Court under such circumstances to weigh the conflicting policy considerations that were brought to bear in devising these programs; that was the task of the State and Federal officials who formulated them. The Court's sole function here is to monitor the approval of the Secretary and to determine whether his decision was consistent with the objectives of the AFDC provisions of the Social Security Act. That it obviously is.

 I must, however, advert briefly to plaintiffs' principal statutory argument. They contend that § 1315 forbids the approval of projects which diminish any statutory rights or entitlements established under the Social Security Act. The PSWOP and IFI programs, they argue, effectively diminish such rights and entitlements by forcing upon welfare recipients increased expenses for additional food, clothing and the like while their welfare stipend remains the same. This argument might have some cogency were one to accept plaintiffs' interpretation of § 1315. However, it has no authority either in the language of the statute or in its legislative history. *fn8" That section merely provides that an approved project must be "likely to assist in promoting the objectives of" various titles of the Social Security Act. Obviously, a program which limits or varies certain of the various statutory entitlements may nevertheless further the objectives of the Social Security Act. Among these objectives, as has already been noted, is increasing the independence and self sufficiency of welfare recipients and assisting in their integration into the work force.

 Defendants do not dispute plaintiffs' contention that the PSWOP and IFI programs may slightly increase the weekly expenditures of welfare recipients, although the State Commissioner of Social Services has represented that the cost of transportation, lunch and clothing will be absorbed by the State. They contend that the programs may ultimately lead to the removal of recipients from the welfare rolls and thus serve the objectives of the Social Security Act despite any short term detriment to recipients participating in the projects. It must be remembered here that this is an experimental program of limited duration; a thorough evaluation after the program has run its course should disclose whether it has resulted in an actual, substantial diminution of benefits to welfare recipients.

 Plaintiffs finally contend that the PSWOP and IFI programs are inconsistent with 42 U.S.C. § 602(a)(19), *fn9" the so-called work incentive or WIN program. WIN, administered by the Department of Labor, is a comprehensive manpower services, training and employment program. PSWOP and IFI must be invalid, so the plaintiffs argue, insofar as their requirements conflict with those of WIN. All cases cited by plaintiffs in support of this proposition, *fn10" among them Dublino v. New York State Department of Social Services, 348 F. Supp. 290 (W.D.N.Y.1972), hold that State work programs inconsistent with WIN are invalid because they violate the Supremacy Clause. These cases are obviously inapposite, however, because PSWOP and IFI are not State but Federal programs approved by the Secretary of HEW and the Supremacy Clause is not applicable. The inconsistencies between PSWOP and IFI and § 602(a) (19) are of course covered by the provisions of 42 U.S.C. § 1315 already cited, which permit the Secretary to waive any of the requirements of § 602 in approving a demonstration project. Although plaintiffs argue that there has been no explicit waiver by the Secretary of § 602(a)(19), a fair reading of the "Action Memorandum" approved by the Secretary for the PSWOP program (Federal defendants' Exhibit A) or for the IFI program (Exhibit B) compels the conclusion that § 602(a)(19) is implicitly waived by the Secretary's waiver of § 602(a)(10). The memorandum shows an awareness of the possible inconsistency between the PSWOP program and § 602(a)(19) and the acknowledgment of such inconsistency in itself constitutes a waiver.

 For all of the reasons given above, plaintiffs' motion to convene a three-judge court is hereby denied, and their motion for a preliminary injunction against enforcement of the PSWOP and IFI programs in New York State is hereby denied.

 The above constitute my findings of fact and conclusions of law in accordance with Rule 52(a) Fed.R.Civ.P.

 So ordered.

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