UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK
November 21, 1980
DISABLED IN ACTION OF METROPOLITAN NEW YORK, INC. and R.A.M., on behalf of their members, and Selim Heffes and Bertha Hook, individually and on behalf of all others similarly situated, Plaintiffs,
Stanley BREZENOFF, in his capacity as Commissioner of Social Services of the City of New York, Barbara Blum, in her capacity as Commissioner of the New York State Department of Social Services, and Robert Berglund, in his capacity as Secretary of the United States Department of Agriculture, Defendants
The opinion of the court was delivered by: OWEN
Plaintiffs, two public interest organizations suing on behalf of their members and two individual food stamp recipients suing individually and on behalf of all New York City residents who are receiving food stamps, seek a preliminary injunction enjoining defendants Stanley Brezenoff, Commissioner of the New York City Human Resources Administration, Barbara Blum, Commissioner of the New York State Department of Social Services, and Robert Berglund, Secretary of the United States Department of Agriculture (the "Secretary"), from putting into effect certain emergency procedural regulations promulgated by the Secretary, applicable only to New York City, and designed to combat multi-million dollar fraud losses occurring in the food stamp program in New York City.
The plaintiffs allege that the Secretary's new regulations were issued in violation of (1) the federal Food Stamp Act, 7 U.S.C. § 2026(b), (2) the federal Administrative Procedure Act (the "APA"), 5 U.S.C. § 553, (3) the due process clauses of the fifth and fourteenth amendments, and (4) the New York State Administrative Procedure Act, N.Y.Ad.Pro.Law § 100 et seq. (McKinney). After extensive oral argument on such short notice that defendants had no time to prepare and submit papers in opposition, I conclude that plaintiffs have failed to meet their burden of showing
(a) irreparable harm and (b) either (1) likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting preliminary relief.
Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Co., 604 F.2d 755, 758 (2d Cir. 1979).
The food stamp program, in broad outline, operates as follows. Upon the demonstration of an entitlement, one is given a card with one's identification number. Thereafter, each month, there is mailed
to each recipient a document called an "ATP."
ATPs are mailed on a staggered system throughout the month, but it is intended that each recipient will receive his particular ATP on approximately the same day of each month. Under the procedure in effect until December 1, 1980, with exceptions not relevant here, each recipient has the balance of the month to present the ATP at a bank or other authorized agency in exchange for the food stamps themselves, which can then be presented to grocery stores for food. An ATP claimed to be lost or stolen can be replaced, at an appropriate office, by the mere giving of an affidavit reciting such fact, leaving the agency in a poor posture to pursue or prosecute false claims.
The new procedure
provides two changes, one flowing from the effect of the other. A limitation is now established of eight days within which to redeem any given ATP for stamps; the said eight day period printed on the face of the ATP commences with the date when the agency expects the ATP to arrive at the recipient's residence, given the date of mailing and normal mail service. After the eight days the ATP will not be honored. If an ATP has merely been allowed to lapse by the recipient not redeeming it within the eight days, it may be exchanged for a new one. Thus, the recipient does not lose his entitlement. However, if it is claimed to have been lost or stolen, the recipient must wait four days beyond the anticipated arrival date before requesting a replacement at a local office. The agency may further wait five business days before considering issuance of a duplicate ATP. This will permit a new computer retrieval system to determine if the ATP was in fact negotiated or not. If the original ATP has not been redeemed, a replacement will be issued. On the other hand, if it has been negotiated, the claimant must go to a central office in Manhattan (fare provided by HRA) where, by that time, there will be a photocopy of the negotiated ATP. There the identification number put on the ATP by the party negotiating it, as well as the signature, will be compared to the recipient's number and signature. If neither the number nor the signature match, the ATP is replaced. However, if either the signature or the identification number are that of the entitled recipient, replacement will be denied with the right to appropriate fair hearing thereafter.
It is this simple procedural device, i. e., shortening the life of the original ATP and establishing a clearance time after its negotiable life to enable the agency to check any earlier surrendered ATP with the signature and number of the recipient, which will, in the Secretary's opinion, substantially reduce the 1.2 million dollars per month presently paid out for ATPs that have in fact been cashed and are thereafter falsely reported as lost or stolen.
The plaintiffs' principal complaint is over the eight day period of life for the forthcoming ATPs. They argue, and probably not without some truth, that on occasion mail is late, that the health of a recipient on a given day or week may preclude his going out to redeem the ATP, or that the homemaker provided in some instances by the New York City Department of Social Services to disabled recipients may not come in at the proper time to redeem the recipient's ATP.
I am sure that in some instances, the foregoing may on occasion occur causing a particular ATP to lapse. However, one did not get any feeling from the oral argument herein that plaintiffs had any appreciation of the fact that an ATP that had merely lapsed could be immediately renewed by exchanging it at a central office in New York or by surrendering it at the customary local office in any borough, in which case, a replacement would come four days later in the mail.
I note, and it also was clear from the oral argument, that the plaintiffs do not object to the fact that a recipient must wait four days before reporting an ATP lost or stolen.
To attack the eight day life of the ATP albeit renewable, plaintiffs contend that this change is a "substantial" matter which has been promulgated without compliance with the notice and public comment requirements of the APA.
Defendants, on the other hand, argue that the regulations in question are exempted from the APA's public comment requirements under the "emergency" exception to the APA. See Senate Report No. 752, 79th Cong. 1st Sess. at 200 (1945). Section 553(b)(3)(B) of Title 5 provides that notice and a hearing are not required
when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.
In publishing and explaining the new program in the Federal Register, 45 Fed.Reg. 69196 (October 17, 1980) (to be codified at 7 C.F.R. § 282.15), the Secretary found, pursuant to Section 4 of the APA, 5 U.S.C. § 553,
that notice and other public procedures with respect to this emergency final action are impracticable and contrary to the public interest; and good cause is found for making this emergency final action effective less than 30 days after publication of this document in the Federal Register.
In his announcement in the Federal Register and again at oral argument, the Secretary contended "(t)he gravity of New York City's replacement ATP problem necessitates the expeditious implementation of this new system." Id. Further, in the Secretary's view, albeit in another context, the changes in question are not substantial.
I agree with both the need for emergency action as well as the assessment that the changes, certainly in so far as they affect innocent recipients, are not "significant."
Further, it is obvious that the new procedures seem reasonably likely to reduce both the number of replacement ATPs issued each month and, more important, the amount of federal money that is lost through fraud. In the face of the severe problem the Secretary faces in New York City and the reasonable Congressionally authorized program which has been designed to deal with that problem, I conclude that plaintiffs have failed to demonstrate either (1) a likelihood of success on the merits or (2) a balance of hardships tipping decidedly in their favor. Thus, even if plaintiffs' claim that the program violates the APA were to present a serious question going to the merits sufficient to make it a fair ground for litigation, plaintiffs still have failed to sustain the heavy burden required to warrant a preliminary injunction on this ground.
Defendants also contend that in the Food Stamp Act Congress has expressly granted the Secretary the authority to conduct experimental or pilot projects "designed to test program changes that might increase the efficiency of the food stamp program ...." 7 U.S.C. § 2026(b)(1). This experimental program is scheduled to last two years, and the Secretary has invited post hoc public comment on the new procedures and provided for the future possible amendment thereof. See 45 Fed.Reg. 69197 (1980). Thus, preliminarily, and on this record, I find that the program at issue herein is within the Secretary's statutory authority, further making a preliminary injunction unwarranted.
Discussion of the remaining allegations on which plaintiffs attempt to ground their request for preliminary relief is unnecessary. Regardless of the probability of success on the merits or the seriousness of the questions presented in plaintiffs' other causes of action, the plaintiffs have failed to demonstrate that the threat of irreparable harm is sufficiently grave to justify the issuance of a preliminary injunction. See Jack Kahn Music Co., Inc. v. Baldwin Piano & Organ Company, supra, at 761-2 and cases cited.
Whether or not plaintiffs ultimately prevail on the merits, from an examination of the New York City pilot program which they seek to enjoin, I do not believe that plaintiffs will be irreparably injured by the commencement of the proposed experiment. At most, the new regulations will cause those plaintiffs who allow their ATPs to expire to make an extra trip to their local Income Maintenance office to get new ones. Although one cannot tell from this vantage point to what extent such inconvenience will occur, it does not, in my opinion, constitute irreparable harm. Similarly, while those whose ATPs are lost or stolen and subsequently redeemed will have to make an additional trip to the central Fraud Prevention Unit, this inconvenience is also minor, particularly given the fact that transportation expenses are to be paid by the City.
For the foregoing reasons, the preliminary injunction is denied.
Class action certification pursuant to Fed.R.Civ.P. 23(b)(2) is granted, the class to be defined as all New York City residents who are food stamp recipients on or after December 1, 1980.