Dutton v. Dept. of Social Welfare

Dutton v. Dept. of Social Welfare  (97-222); 168 Vt. 281; 721 A.2d 109

[Filed 11-Sep-1998]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                            No. 97-222


Dorothy Dutton, June Messier                 Supreme Court
& Lester Brown
                                             On Appeal from
     v.                                      Human Services Board

Department of Social Welfare                 February Term, 1998


Theodore C. Kramer, Chair

       William Dysart, Vermont Legal Aid, Inc., Burlington for
  Plaintiffs-Appellants.

       Donelle Smith Staley, Assistant Attorney General, and Christopher L.
  White, Law Clerk (On the Brief), Waterbury, for Defendant-Appellee.


PRESENT:  Amestoy, C.J., Morse, Johnson and Skoglund, JJ., and Wesley,
          Supr. J., Specially Assigned.


       JOHNSON, J.  Petitioners appeal from Human Services Board Fair Hearing
  decisions denying their applications for fuel assistance.  Petitioners
  argue (1) that the definition of household in the Vermont Home Heating Fuel
  Assistance regulations is inconsistent with the definition found in the
  federal Low-Income Home Energy Assistance Act, 42 U.S.C. §§ 8621-8629, and
  (2) that this inconsistency results in the denial or reduction of fuel
  assistance to certain households in violation of the federal act.  We agree
  and reverse the orders of the Human Services Board.

       Petitioners are two elderly homeowners and a boarder, each of whom
  resides in a house in which a boarder rents a separate room.  In each case,
  the boarder either prepares his meals or eats with the rest of the
  household in a common kitchen and dining area.  The boarders do not make
  separate payments for heating fuel, rather, heat is furnished by the
  landlord and its cost is included in the rent.  Petitioners separately
  applied to the Department of Social Welfare (DSW) for supplemental fuel
  assistance and their applications were denied.  Petitioner Dutton's

 

  application was denied because she did not provide information regarding
  the income and assets of her son who rents a room in her house.  Petitioner
  Messier was refused fuel assistance because he failed to provide
  information about the income and resources of the individual to whom he
  rents a room.  Petitioner Brown was refused fuel assistance because he
  failed to provide information about the income and resources of the owners
  of the house in which he rents a room.  Petitioners appealed the denial of
  their applications to the Human Services Board, arguing that the State
  regulation defining a fuel "household" is inconsistent with the definition
  in the federal act.  The appeals were consolidated by agreement of the
  parties, and the Board affirmed DSW's denial of fuel assistance.

       The Low-Income Home Energy Assistance Act establishes a federal
  program providing block grants to states to help low-income households
  defray the cost of their home energy. Participating states are authorized
  to design their own plans to administer and distribute the block-grant
  funds, and the federal act expressly delegates to states the authority to
  define "the eligibility requirements to be used by the State for each type
  of assistance to be provided."  Id. § 8624(c)(1)(A).  Under the Department
  of Health and Human Services regulations, "the States are primarily
  responsible for interpreting the governing statutory provisions."  45
  C.F.R. § 96.50(e) (1997).  Thus, under the federal act, states may craft
  their own fuel-assistance plans "so long as minimal requirements
  established under the Act are met."  Rodriguez v. Cuomo, 953 F.2d 33, 34
  (2d. Cir. 1992).

       The federal act defines a fuel household as "any individual or group
  of individuals who are living together as one economic unit for whom
  residential energy is customarily purchased in common or who make
  undesignated payments for energy in the form of rent."  42 U.S.C. §
  8622(4).  The concept of a fuel "household" plays a crucial role in the
  federal statutory scheme because it determines whose income and assets are
  considered when determining if the household meets the threshold
  requirements to be eligible for assistance.  See id. § 8624(b)(2). Other
  minimum requirements are similarly linked to the concept of a fuel
  household.

 

  Participating states must agree to "provide that the highest level of
  assistance will be furnished to those households which have the lowest
  incomes and the highest energy costs or needs in relation to income."  Id.
  § 8624(b)(5).  States may not condition assistance on whether the household
  owns or rents the residence, rather, they must agree to "treat owners and
  renters equitably."  Id. § 8624(b)(8).

       Vermont's fuel-assistance program, governed by 33 V.S.A. §§ 2601-2609,
  creates a trust fund from which fuel-assistance payments are distributed. 
  See 33 V.S.A. § 2603(a).  The Secretary of the Agency of Human Services is
  directed by statute to establish household income and asset eligibility
  requirements for participation in the program, see id. § 2604(a), and to
  adopt regulations governing the calculation of a household's fuel costs,
  see id. § 2604(b).

       The Vermont program's regulations define a fuel household as "one or
  more persons residing in a living unit who share a primary heating source,
  regardless of . . . the cost-sharing arrangement for living and heating
  expenses among those people, or whether secondary heating sources are
  shared, or the relationship of each person to other persons in the living
  unit." Welfare Assistance Manual (WAM) § 2901.1(4), 5 Code of Vermont Rules
  13170006-3 (1997). The regulations also require consideration of the income
  and assets of "all Fuel Program household members sharing a primary heating
  source."  Id. § 2904, 5 Code of Vermont Rules 13170006-6.  A primary
  heating source is "the fuel from which a household derives the largest
  portion of its heat. . . . [and] is considered to be shared unless the
  primary fuel supplier can identify for billing purposes discrete user
  groups within the living unit."  Id. § 2901.1(3), 5 Code of Vermont Rules
  13170006-3.  Thus, in contrast to the federal act, which focuses on the
  economic relationship between individuals or separate families, DSW's
  definition of an eligible household focuses on the heating source and to
  whom the fuel supplier sends a bill.

       The Human Services Board determined, pursuant to these regulations,
  that the homeowners and boarders in each of the three cases at bar were
  part of the same fuel household because they resided in the same living
  unit and shared a primary heating source.  Accordingly,

 

  the Board concluded petitioners were required to include the income and
  assets of both the homeowners and the boarder in their applications for
  fuel assistance.  The Board also concluded that because petitioners failed
  to include this information, their applications were properly denied.

       DSW contends that our review of the Board's interpretation of the
  federal act is limited. It argues that we have reviewed state
  administrative agency interpretations of federal statutes under the same
  standard employed by federal courts when reviewing federal agencies'
  interpretations of statutes.  See, e.g., Shedrick, 158 Vt. at 545-46, 613 A.2d  at 694 (reviewing DSW interpretation of food stamp act under federal
  standard); St. Amour v. Department of Social Welfare, 158 Vt. 77, 81, 605 A.2d 1340, 1342 (same).  It is true that where a statute is silent as to a
  specific issue, we will defer to an agency's interpretation provided that
  it "is based on a permissible construction of the statute."  St. Amour, 158
  Vt. at 81, 605 A.2d  at 1342 (quoting Chevron U.S.A. v. Natural Resources
  Defense Council, 467 U.S. 837, 843 (1984)) (internal quotation marks
  omitted).  DSW urges that deference is even more appropriate in this case
  because the federal government has granted the State broad powers to
  administer its fuel assistance programs, and the Vermont Legislature has,
  in turn, delegated this authority to DSW. In light of this express
  delegation, DSW asserts that we should not disturb the Board's
  interpretation of the federal act "absent a compelling indication of
  error," citing In re Professional Nurses Inc., 164 Vt. 529, 532, 671 A.2d 1289, 1293 (1996) (stating standard of review for decisions within an
  agency's particular area of expertise).  We disagree.

       We recognize that "[s]tates are primarily responsible for interpreting
  the governing statutory provisions" of block grant programs.  45 C.F.R. §
  96.50(e).  Nonetheless, interpreting the definition of "household" utilized
  by Congress is not a matter of interstitial rulemaking by an agency to
  implement its interpretation of the statute.  Instead, Congress expressly
  provided a federal definition that delineates the minimum requirements
  governing the State's use of the federal grants.  Therefore, determining
  whether the federal and state definitions are consistent

 

  "is a matter that requires statutory interpretation -- the exclusive
  province of the courts." Rodriguez, 953 F.2d  at 39 (holding that
  interpreting a minimal requirement under the federal Low-Income Home Energy
  Assistance Act is a matter for courts). 

                                     I.

       Petitioners first argue that, to the extent the definition of a fuel
  household in the Vermont program's regulations categorically includes
  boarders in the same fuel household as the homeowners, it is inconsistent
  with the definition in the federal act.  DSW contends that the Vermont
  program's definition of household is consistent with the federal
  definition.(FN1)  DSW argues that the phrase "any individual or group of
  individuals who are living together as one economic unit for whom
  residential energy is customarily purchased in common" in the federal act
  in fact means "all persons who share a common heating source."
  
       In support of its argument, DSW points out that prior to amendment,
  the federal act defined household as "all individuals who occupy a housing
  unit."  Pub. L. No. 97-35 § 2603(2)(A), 95 Stat. 893, 894 (1981).  The
  unamended version of the statute also mandated that "1 or more rooms shall
  be treated as a housing unit when occupied as a separate living quarters." 
  Id. § 2603(2)(B).  DSW claims that this definition permitted several
  persons living in the same house to receive fuel-assistance benefits
  individually even though the homeowner or the person holding the lease was
  the sole person responsible for paying the heating bill for the entire
  unit.  This result, DSW argues, was inconsistent with the federal objective
  of providing the greatest benefits to those most in need in that it did not
  reflect the "economic reality that the income of all persons sharing a
  common heating source may be made available to contribute toward payment of
  a common household's utility bills."  DSW contends that

 

  Congress redefined household to remedy the situation, intending the new
  definition to include all persons who share a common heating source.  We
  cannot agree with this interpretation.

       DSW's interpretation of the statute would render the term "economic
  unit" meaningless and is therefore "contrary to the `presumption against
  construing a statute as containing superfluous or meaningless words.'" 
  Marbley v. Bane, 57 F.3d 224, 230 (2d Cir. 1995) (quoting United States v.
  Blasius, 397 F.2d 203, 207 n.9 (2d Cir. 1968)); see also United States v.
  Plaza Health Lab., 3 F.3d 643, 646 (2d Cir. 1993) ("It is elemental that
  congress does not add unnecessary words to statutes."); Butts v. City of
  New York Dep't of Hous. Preservation & Dev., 990 F.2d 1397, 1408 (2d Cir.
  1998) ("[I]t is the duty of reviewing courts to give effect to every clause
  and word of a statute where possible.").  The language of the statute
  indicates that Congress intended to distinguish between people "living
  together as one economic unit" and sharing heating facilities, and people
  merely residing at the same address and sharing heating facilities.  See
  Shedrick v. Dep't of Social Welfare, 158 Vt. 541, 546, 613 A.2d 692, 694
  (1992) ("[W]e will not construe [a] statute to render a clear distinction
  meaningless.").

       More importantly, we reject DSW's assertion that it is an "economic
  reality" that the income of all persons sharing a common heating source is
  available to contribute to the cost of the heating fuel.  Indeed, the
  gravamen of petitioners' complaint is that they do not have access to the
  income and assets of the other persons sharing their heating source.  DSW
  urges the Court to effectively adopt this assumption of "economic reality"
  as an irrebuttable presumption.  This we decline to do.

       We therefore agree with the petitioners that the plain meaning of the
  phrase "living together as one economic unit" implies that the individuals
  must depend on one another for financial support.  Although Congress did
  not define the term "economic unit" in the statute, this is not the first
  time that Congress has employed the term in the social welfare context. 
  Before 1977, a household for purposes of the food stamp program was defined
  as a group of people who are "living as one economic unit sharing common
  cooking facilities and for whom food is

 

  customarily purchased in common."  Knowles v. Butz, 358 F. Supp. 228, 231
  (N.D. Cal. 1973) (quoting 7 U.S.C. § 2012(e)).  In Knowles, a federal
  district court, relying on the definition of "economic unit" provided in
  the accompanying regulations, rejected the contention that all persons who
  shared a living unit and the associated expenses met the statutory
  definition of "household."  The regulations stated that, "[e]conomic unit
  means that the common living expenses are shared from the income and
  resources of all members and that the basic needs of all members are
  provided without regard to their ability or willingness to contribute." 
  Food and Nutrition Service Instruction 732-1, § III(D)(2)(b), quoted in
  Knowles, 358 F. Supp.  at 231. We agree that this definition is "a full and
  fair attempt to interpret in a commonsense manner what Congress probably
  meant by the term."  Knowles, 358 F. Supp.  at 231; see also Robinson v.
  Block, 869 F.2d 202, 211 (3d Cir. 1989) (term "economic unit" takes into
  account the "'common living expenses' of all members of a group of
  people").  We therefore conclude that this definition of economic unit is
  implicit in the federal definition of "household."

       We note that the available legislative history supports this
  construction to the exclusion of DSW's interpretation.  The Senate sponsor
  of the amendment explained that the definition of household needed to be
  changed because "[t]he definition that is now in the Low Income Home Energy
  Act does not adequately address the needs of low-income owners who have
  lodgers living in their homes.  There was no intent of Congress to exclude
  these persons and this amendment would cover them by [re]defining household
  . . . ."  127 Cong. Rec. 26,234 (1981). Thus, the amendment appears to
  address precisely the difficulties faced by petitioners.  The adoption of
  the revised definition of "household" indicates that Congress did not
  intend low-income homeowners to be excluded from the fuel program merely
  because they had lodgers living in their homes.  Although we do not regard
  the sponsor's statement as conclusive of congressional intent, it
  buttresses our conclusion that homeowners and the lodgers living in their
  homes are not per se members of the same fuel household.

 

                                     II.


       We also agree with petitioners' claim that the Vermont program's
  definition of "household" results in a violation of the federal requirement
  that the state plan "provide that the highest level of assistance will be
  furnished to those households which have the lowest incomes and the highest
  energy costs or needs in relation to income."  42 U.S.C. § 8624(b)(5).  For
  purposes of determining a household's eligibility for fuel assistance, the
  Vermont program's regulations result in the automatic inclusion of the
  income and assets of all those living at the same residence and sharing a
  primary heating unit regardless of the relationship between them or their
  cost-sharing arrangements.  See WAM § 2901.1(4), 5 Code of Vermont Rules
  13170006-3.  The cases at bar are illustrative.  The Vermont program's
  regulations include the boarder in the same household as the others living
  within the dwelling unit even though, except for the rental payments, the
  income and assets of the boarder may not be available to meet the fuel
  costs of the remaining household members.  Because the State has improperly
  defined "economic unit," it cannot determine which households have the
  "lowest incomes and the highest energy costs in relation to income." 
  Without this information, it cannot demonstrate compliance with this
  federal requirement.  In the absence of sufficient information to determine
  which households are neediest, a program violates the federal Low-Income
  Home Energy Assistance Act.  See Mitchell v. Hayt, No. 88-CV-382, slip op.
  at 20-21 (N.D.N.Y. Dec. 16, 1988) (fuel-assistance program definition of
  household that automatically included the income of all persons occupying
  dwelling unit violated 42 U.S.C. § 8624(d)(5)).  The State's plan must seek
  to achieve this goal not for households as defined by the State, but for
  households as defined by Congress.  Cf. In re Brisson, ___ Vt. ___, ___,
  702 A.2d 405, 407 (1997) (state medicaid regulations must achieve federal,
  not state purpose).

 


       Reversed and remanded for further proceedings in accordance with this
  opinion.


                                 FOR THE COURT:



                              _______________________________________
                              Associate Justice



--------------------------------------------------------------------------------
                                  Footnotes


FN1.    DSW also notes that the state regulations are consistent with
  the state statute creating Vermont's fuel program.  Assuming, arguendo,
  that DSW is correct, we fail to see how it is significant.  Petitioners do
  not argue that the state regulations are inconsistent with the state
  statute, but that they violate the federal statute.  If the state
  regulations are in conflict with federal law, the fact that they are
  consistent with state law would not remedy this problem.