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December 9, 1999


The opinion of the court was delivered by: Schwartz, District Judge.


This action was filed by plaintiffs, on behalf of themselves and all others similarly situated, on June 25, 1999. Plaintiffs seek class certification and injunctive relief with respect to various practices of defendants, New York State ("State") officials whose agencies are involved in the disbursement of benefits under certain social services programs. The case is before the Court on defendants' motion to dismiss. For the reasons set forth below, the motion is GRANTED in part and DENIED in part.


I. Statutory and Regulatory Schemes At Issue

At issue in this action are three statutory schemes that provide for financial assistance for low income individuals or households: (A) the Food Stamp program; (B) the Medicaid program; and (C) the Cash Assistance Programs.

A. Food Stamp Program

"The Food Stamp Act establishes a federally funded, state-administered program that provides nutritional assistance to eligible households." See Bliek v. Palmer, 102 F.3d 1472, 1474 (8th Cir. 1997); 7 U.S.C. § 2013(a). The purpose of this program is "to safeguard the health and well-being of the Nation's population by raising levels of nutrition among low-income households." 7 U.S.C. § 2011; see also 7 C.F.R. § 271.1. Under the program, "eligible households receive food stamp coupons that can be redeemed for food items at retail stores participating in the program." Bliek, 102 F.3d at 1474 (citing 7 U.S.C. § 2013(a)). The Department of Agriculture has promulgated various regulations with respect to the program, but the responsibility for administering the program itself has been delegated to state agencies, "and thus the state agencies make the individual eligibility determinations and actually distribute the food stamps to the eligible households." Bliek, 102 F.3d at 1474 (citing 7 C.F.R. § 271.4(a)).

Federal regulations provide that a household that is "aggrieved by any action of the State agency which affects the participation of the household" in the Food Stamps Program "may request a `fair hearing.'" Jackson v. Jackson, 857 F.2d 951, 953 (4th Cir. 1988) (citing 7 C.F.R. § 273.15(a)). The process provided by such "fair hearings" is regulated by 7 C.F.R. § 273. For example, the state agency administering the program must (i) make certain information accessible to the recipient; (ii) give the recipient an opportunity to be heard, bring witnesses, and cross-examine state witnesses; and (iii) insure that the eventual decision is based on the record and identifies supporting evidence. See 7 C.F.R. § 273.15(i)(1), 273.15(p)(1), 273.15(p)(2), 273.15(p)(3)(4) & (6), and 273.15(q)(1) & (2).

B. Medicaid Program

The Medicaid program, established pursuant to Title XIX of the Social Security Act, establishes a joint federal and state cost-sharing system to provide necessary medical services to indigent persons who otherwise would be unable to afford such care. See Pinnacle Nursing Home v. Axelrod, 928 F.2d 1306, 1309 (2d Cir. 1991); 42 U.S.C. § 1396 et seq. Participation in the program is optional, but once a state does elect to participate, it must abide by certain requirements imposed by the relevant statutes and regulations promulgated thereunder. See Pinnacle, 928 F.2d at 1309. New York State law has designated the New York State Department of Health as the government agency responsible for administering the Medicaid program. See N.Y.Soc.Serv.Law § 363-(a)(1).

As is the case with the Food Stamps program, regulations promulgated with respect to the Medicaid program provide that recipients of Medicaid have the right to a fair hearing whenever the state agency "takes action to suspend, terminate, or reduce" services or eligibility. See 42 C.F.R. § 431.200. Federal regulations provide requirements with respect to fair hearings in the Medicaid program that are similar to those required in the Food Stamp program. See, e.g., 42 C.F.R. § 431.206, 431.22, 431.242, 431.244.

C. The Cash Assistance Programs

New York State provides cash assistance to low income individuals by means of, inter alia, two state programs: "Family Assistance which is available to pregnant women and families with a minor child, and Safety Net Assistance, which is available to childless adults." See Reynolds v. Giuliani, 35 F. Supp.2d 331, 334 (S.D.N.Y. 1999) (citing N.Y. Social Services Law §§ 158 and 349.) New York law provides that recipients "may appeal to the department from decisions of social services officials . . . [and t]he department shall review the case and give such person an opportunity for a fair hearing thereon." N YSoc.Serv.Law § 22(1). New York State regulations provide standards applicable at these hearings, which are similar to the federal standards set forth above with respect to Food Stamp hearings. See 18 N.Y.C.R.R. pt. 358.

II. Parties

The named plaintiffs ("plaintiffs") are all individuals who were previously receiving benefits under one or more of the aforementioned social services programs, but whose benefits have been terminated. (Amended Class Action Complaint ("Compl.") ¶¶ 4-19.) Plaintiffs were each denied benefits after statutory "fair hearings" that they contend were not sufficient to comply with applicable statutory and constitutional law.

Defendant Brian J. Wing is the Commissioner of the New York State Office of Temporary and Disability Assistance ("OTDA"). (Compl. ¶ 20.) Wing is responsible for, inter alia, the administration of the State's Food Stamp program, Family Assistance Program, Safety Net Program, and, in part, the State's Medicaid program. (Compl. ¶ 20.) Defendant Antonia Novello is the Commissioner of the New York State Department of Health ("DOH"). (Compl. ¶ 21.) She is primarily responsible for, inter alia, the administration of the State's Medicaid program. (Compl. ¶ 21.) James M. McGowan is the Commissioner of the New York State Department of Labor ("DOL"). (Compl. ¶ 22.) He is responsible for the operation of the DOL, as well as for overseeing the welfare-to-work programs for public assistance applicants and recipients. (Compl. ¶ 22.)

III. Facts Common to the Class

The following facts are alleged in the complaint. The City of New York ("City") participates in the disbursement of funds under State social services programs. Recipients of public assistance, food stamps, or medicaid from the City must periodically attend appointments with City employees in order to accomplish a variety of purposes, such as verifying the recipients' eligibility for benefits and evaluating whether a recipient should participate in particular employment programs. (Compl. ¶¶ 56, 57.) Failure to attend one of these appointments will cause the relevant City agency to initiate a procedure to discontinue or reduce the recipient's benefits. (Compl. ¶ 58.) The appropriate City agency is supposed to mail recipients appointment notices for most, if not all, of these appointments. (Compl. ¶ 59.)

If the City agency determines that a recipient has failed to report to a required appointment, the City, before taking action against the recipient, is required to provide the recipient with a notice of intent to terminate or reduce benefits. The notice of intent to terminate is accompanied by an explanation of the recipient's rights (i) to a fair hearing in order to contest the City agency's proposed action, and (ii) to have benefits continue pending the hearing decision. (Compl. ¶¶ 59,60.) Among the issues that may be raised at a fair hearing are whether the recipient failed to receive any of the notices that the City welfare agency is required to mail (the "Notices"). (Compl. ¶ 61.) Hearings are conducted by State hearing officers who also serve as finders of fact. (Compl. ¶ 63.)

IV. Procedural History

This action was filed on June 25, 1999. Plaintiffs, all of whom have had their benefits altered after fair hearings conducted by persons under the control of defendants, contend that the fair hearings provided to them were deficient. Plaintiffs contend that defendants systematically fail to provide recipients with fair hearings that comply with the requirements set forth in (i) federal and state statutory law; and (ii) the Due Process Clause of the Fourteenth Amendment. Defendants move to dismiss pursuant to, inter alia, Federal Rule of Civil Procedure ("Fed. R.Civ.P.") 12(b)(6).


Under Fed.R.Civ.P. 12(b)(6), the Court may dismiss an action when a plaintiff's complaint fails to state a claim on which relief can be granted. Dismissal is inappropriate, however, unless "it appears beyond a doubt that [plaintiffs] can prove no set of facts that would entitle [them] to relief." Staron v. McDonald's Corp., 51 F.3d 353, 355 (2d Cir. 1995) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In deciding a 12(b)(6) motion, the court must view the complaint in the light most favorable to the plaintiffs and accept the plaintiffs' factual allegations as true. See Branham v. Meachum, 77 F.3d 626, 628 (2d Cir. 1996); Staron, 51 F.3d at 355.


A plaintiff is not required to exhaust state remedies before commencing an action pursuant to 42 U.S.C. § 1983. See Patsy v. Board of Regents, 457 U.S. 496, 516, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982). However, defendants contend that because plaintiffs could commence an Article 78 proceeding in the New York State courts in order to challenge the findings of the fair hearing officers contested in this action, this Court cannot find that the state has violated plaintiffs' rights to due process. Defendants cite to the Second Circuit cases of Marino v. Ameruso, 837 F.2d 45 (2d Cir. 1988) and Campo v. New York City Employees' Retirement Sys., 843 F.2d 96 (2d Cir. 1988) in support of this argument. The Court, however, disagrees with defendants, and concludes that Marino and Campo are distinguishable from the present action.

In Marino, the plaintiff "alleged that he was deprived of a property interest in his job as a New York City traffic enforcement agent without procedural due process when an Administrative Law Judge ("ALJ") failed to strike the testimony of a witness at an administrative hearing." Marino, 837 F.2d at 46. The Second Circuit, assuming for the purposes of the appeal that the ALJ had made an error of constitutional magnitude, found that the availability of a post-deprivation remedy for the alleged deprivation prevented relief under § 1983. Id. at 47. The Marino court noted that

  [t]he Supreme Court has clearly distinguished between
  a claim that an established state procedure does not
  afford procedural due process and a claim that a
  property right was lost because of a random and
  unauthorized act by a state actor. In the latter
  case, the existence of an adequate postdeprivation
  state remedy for the loss affords due process.

Id. at 47 (emphasis added). Because the plaintiff in Marino was not entitled to pre-deprivation relief, the availability of a postdeprivation Article 78 proceeding was sufficient to comport with due process and to correct any constitutional errors committed by the ALJ at the administrative hearing. See id.

Here, for the purposes of analyzing whether the availability of a State Article 78 proceeding requires the dismissal of this action, we will assume as the court did in Marino that the fair hearings as implemented by defendants were constitutionally defective. Plaintiffs in this action, however, allege that (i) the hearings conducted by defendants, pursuant to an established state procedure, do not comply with the relevant statutes or afford plaintiffs due process, (ii) that pre-deprivation hearings are required, and (iii) that state pre-deprivation relief is inadequate. This action is therefore distinguishable from Marino, where the court found that the complaint alleged only inadequate post-termination relief because it did not allege that "an established state procedure does not afford procedural due process." Marino, 837 F.2d at 46. Here, where plaintiffs do assert that the established state process of conducting fair hearings denies them due process, and allege that they are entitled to certain pre-deprivation remedies under federal constitutional and statutory law, the availability of adequate post-deprivation relief is not relevant, and plaintiffs' claims may proceed.

Nor does the decision in Campo change this result. Although the Court in Campo dismissed the ยง 1983 action on the grounds that the plaintiff had access to an Article 78 proceeding, Campo also involved a case where insufficient post-deprivation relief was alleged. See Campo, 843 F.2d at 100 (stating ...

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