RESPONDENT: Houston Welfare Rights Org.
LOCATION: C and P Telephone Baltimore Headquarters
DOCKET NO.: 77-719
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Fifth Circuit
CITATION: 441 US 600 (1979)
ARGUED: Oct 02, 1978
DECIDED: May 14, 1979
David H. Young - argued, for petitioners in No. 77-719; with him on the brief were John L
Jeffrey J. Skarda - argued, for respondents in No. 77-719; with him on the briefs were Henry A
Stephen Skillman - argued, for respondents in No. 77-5324; with him on the brief were John J
Theodore A. Gardner - argued and filed briefs for petitioner in No. 77-5324
Facts of the case
Media for Chapman v. Houston Welfare Rights Org.
Audio Transcription for Oral Argument - October 02, 1978 in Chapman v. Houston Welfare Rights Org.
Warren E. Burger:
We'll hear arguments next in 719, Chapman against the Houston Welfare Rights Organization.
Mr. Young, I think you may proceed whenever you're ready.
David H. Young:
Thank you Mr. Chief Justice, may it please the Court.
The dispute in this case arises as a result of a March 1st, 1973 conversion that the State of Texas Department of -- what was then known as Department of Public Welfare made in the methods and procedures that it used to calculate a standard of need in Aid to Families with Dependent Children program.
States are permitted by Section 601 in Title 42 that Section 401 of the Social Security Act to define the standard of need that they will utilize in the AFDC program and this Court has frequently stated and restated ever since King against Smith that states have that latitude.
Before, the March 1st, 1973 conversion, the state's method of determining an individual's need for AFDC went through the four steps.
First, a maximum standard of need was established which is not in dispute.
Second, a personal needs allowance, a shelter allowance and a utilities allowance were combined that portion is in dispute.
Third, they percentage reduction factor was applied and fourth, the amount of any none exempt income was deducted from the -- what was referred to this has recognized needs which was a product to those first three steps.
Much of that, of course was outlined in your prior decision in Jefferson against Hackney.
The problem arises because of one step that Texas went through with regard to the shelter and utilities allowances that it allowed to be included in the standard of need that were being perforation.
The method that Texas used was to count the number of individuals in the household without regard whether they were eligible or not.
And then subtract the appropriate per capita share for those people who were determined to be ineligible.
After March 1st, 1973, Texas has conversion provided for a flat grant system.
There's essentially no longer any dispute in this case that Texas can have a flat grants that other states can have a flat grants.
The shelter and utilities figures that Texas used and that from which this lawsuit comes were consolidated with the personal needs figure and average.
Neither the consolidation per se nor the averaging is an issue what the state did under the new system was say that you get so many dollars per eligible recipient rather than the former method of taking all the individuals in the household and then backing out a per capita share for those who were determined to be ineligible.
I think simply so I characterized the new method is just simple addition you add up the numbers for the eligible people there whereas before you added up numbers for everyone and then back out a share for the ineligible and that's the perforation.
It's important --
Byron R. White:
What practical difference in that change?
David H. Young:
I hope to demonstrate there is no practical difference.
But it has been widely assumed that there is and that is enlarged part of basis for the Fifth Circuit's decision and I'm seeking an overturn.
It is important in that regard to keep perforation and economies of scale is separate questions.
There's no dispute that the state can utilize economy's scale in establishing its need standards.
Economy's of scale by the way is not a justification for perforation despite the contention that occasionally occurs that economy's scale is just another way of saying the state assumes the availability of income and runs contrary to everything the Court has said since King against Smith.
In the District Court, respondents file suit against the new system saying, one, that it violated Section 602 (a) (23) or the cost of living increase requirement of the Social Security Act to use a flat grant.
The flat grant being what I described is just a simple addition of the average numbers rather than the former method of establishing a figure for individual needs.
And also alleged that the state's new system violated 602 (a) (7) which is the provision that requires the states to deduct available income.
606 (b) which has to do is whether or not the states can make restrictive payments and which we say is not an issue here and 602 (a) (23) which is the cost of living requirement.
They said that by including the prorated members will obscured the standard of need and therefore do not give a true cost of living raises required by 602 (a) (23).