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Lauth v. State, Dept. of Health & Social Services (11/9/00) sp-5327
Lauth v. State, Dept. of Health & Social Services (11/9/00) sp-5327
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DONNA LAUTH, )
) Supreme Court No. S-9096
Appellant, )
) Superior Court No.
v. ) 1JU-98-499 CI
)
STATE OF ALASKA, DEPARTMENT ) O P I N I O N
OF HEALTH AND SOCIAL SERVICES,)
DIVISION OF PUBLIC ASSISTANCE,)
)
Appellee. ) [No. 5327 - November 9, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, First Judicial District, Juneau,
Michael A. Thompson, Judge.
Appearances: Mark Regan, Jennifer Beardsley,
Alaska Legal Services Corporation, Juneau, Robert K. Hickerson,
Alaska Legal Services, Anchorage, for Appellant. Shannon O'Fallon,
Assistant Attorney General, Bruce M. Botelho, Attorney General,
Juneau, for Appellees.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, and Bryner, Justices. [Carpeneti,
Justice, not participating.]
MATTHEWS, Chief Justice.
I. INTRODUCTION
In 1996 the legislature created the Alaska Temporary
Assistance Program (ATAP) to provide welfare benefits to needy
children and their families. Donna Lauth is an ATAP applicant
whose application for benefits was denied because she did not have
"physical custody" of her children as defined in the ATAP
regulations. Lauth appeals that denial, asserting that the
regulatory definition is arbitrary, unreasonable, and inconsistent
with the governing statutes. She further asserts that the state's
method for determining physical custody violates equal protection
because it treats families where only one parent applies for ATAP
benefits differently than families where both parents apply.
Because the regulatory definition of "physical custody"
is a reasonable interpretation of the governing statutes and
because the state's practice of distinguishing between children
with different levels of need is warranted by this difference, we
affirm the superior court's dismissal of Lauth's claims.
II. FACTS AND PROCEEDINGS
A. The Alaska Temporary Assistance Program
In 1996 the Alaska Legislature created ATAP as part of
its comprehensive efforts at welfare reform. [Fn. 1] ATAP replaces
the now-defunct federal program Aid to Families with Dependent
Children. [Fn. 2] The Division of Public Assistance ("the agency")
has broad statutory authority to "adopt regulations and take action
to implement, interpret, and administer" the new state program.
[Fn. 3]
ATAP provides "assistance for basic living expenses and
self-sufficiency services to needy children and their families."
[Fn. 4] Applicants must apply directly to the Division of Public
Assistance for ATAP benefits. In order to qualify for ATAP
benefits, the parent must have "physical custody of one or more .
. . dependent children." [Fn. 5]
The regulations regard "physical custody" to exist where
a child is "living in the home of a caretaker relative." [Fn. 6]
Two different provisions describe how the agency should determine
whether a dependent child is "living in the home of a caretaker
relative." But these provisions differ in important respects. 7
Alaska Administrative Code (AAC) 45.225(b) states:
When determining if a child is living in
the home of a caretaker relative, the division shall consider the
location of the child to be the primary determining factor. Except
in the case of a temporary absence of the child or caretaker
relative from the usual place of residence, the child's home is the
place where the child resides more than half of the time in a
month.
In contrast, 7 AAC 45.225(d) states:
[W]hen two caretaker relatives, living
together or apart, claim ATAP benefits for the same child, the
division shall determine which relative is exercising the primary
responsibility for the care and control of the child. In
determining which of the two caretaker relatives the child is
actually living with, the division shall consider the following:
(1) whose home the child is living in;
(2) how long the child will probably
remain in that home;
(3) what percentage of the month the
child will be in the separate home of each of the two caretaker
relatives;
(4) who will provide the majority of the
child's guidance, discipline, and physical and financial needs; and
(5) the nature and frequency of the
contacts made with the child by the relative who is absent from the
child's current place of residence.
B. Donna Lauth's Application for ATAP Benefits
Donna Lauth and John Hasty have two young daughters.
During the time relevant to this appeal, Lauth and Hasty shared
custody of the girls pursuant to a temporary custody order. The
girls stayed with Lauth during the day six days out of seven and
stayed with Hasty during the evenings, at night, and one weekend
day. Lauth was responsible for cooking the girls breakfast, fixing
them lunch, putting them down for their naps, getting their snacks,
and taking care of them until Hasty picked them up at around 6:00
p.m. Hasty was responsible for getting the girls dinner, giving
them baths, and putting them to bed.
On October 27, 1997, Lauth applied for ATAP benefits
because she was allegedly not working and needed the assistance to
provide a home for the girls. [Fn. 7] Hasty did not apply for
benefits.
Pursuant to 7 AAC 45.225(b), the eligibility worker
assigned to Lauth's case calculated the number of hours in a month
that the children spent with each parent. Because Lauth had the
children for slightly fewer hours during the month than Hasty, the
worker denied Lauth's application. Lauth requested a hearing.
At the hearing, Lauth argued that an hour-by-hour
accounting of the children's time did not fairly represent who
actually took care of the children's needs. She argued that in
joint custody situations such as hers, the agency should use the
multi-factor test in 7 AAC 45.225(d), which required a more careful
scrutiny of the actual caretaking arrangements.
The hearing officer agreed and applied the subsection
.225(d) factors to Lauth's custody arrangement. The hearing
officer found that the children physically spent sixty percent of
the time with their father but that Lauth provided sixty percent of
the "guidance, discipline, and physical and financial needs" of the
children. She also found that the other three factors did not
favor either parent. Balancing the factors together, the hearing
officer concluded that Lauth and Hasty were exactly fifty percent
responsible for the children. The hearing officer then denied
Lauth's claim because she had failed to show by a preponderance of
the evidence that she was the primary caretaker of the children.
Lauth appealed to the director of the agency, arguing
that the hearing officer had not weighed the factors properly and
that she was the children's primary caretaker. The director
concluded that the denial was appropriate but that the hearing
officer had used the wrong standard. The director explained that
the multi-factor subsection .225(d) test addressed situations where
there were competing ATAP claims from two caretaker relatives. In
situations such as this one, where only one parent applies, the
"governing regulation" is subsection .225(b) which requires an
hour-by-hour count of the children's custody time. The director
therefore concluded that because Lauth did not have the children
for more than fifty percent of the month, she was not entitled to
ATAP benefits.
Lauth appealed the director's final agency decision to
the superior court. [Fn. 8] Lauth once again argued that she was
entitled to ATAP benefits because she provided the majority of care
to the children. She argued that determining eligibility for ATAP
benefits based on a rigid hour-by-hour custody count was irrational
and inconsistent with the governing statutes. In a footnote, she
also asserted that the state agency's policy of applying subsection
.225(d) to families where both parents are applying for benefits
and subsection .225(b) to families where only one parent is
applying for benefits violates equal protection.
The state responded that the agency had broad statutory
authority to implement, interpret, and administer the ATAP program
and that its regulations and actions were reasonable. The state
justified the agency's decision to rely on subsection .225(b)
rather than subsection .225(d) by arguing that
[t]o the extent division staff can avoid
having to make these subjective determinations, it should . . . .
Thus, it is only where you have two people competing for benefits
that a strict evaluation of where the children spend the most time
may not be enough. However, the situation at hand is not one where
two parents are vying for benefits and thus that regulation
[.225(d)] is not applicable.
The state did not otherwise respond to Lauth's equal protection
challenge.
Reviewing the ATAP regulations under a deferential
standard, the superior court held that the regulations were
reasonable and not arbitrary. The court also found that Lauth had
not met the burden of demonstrating a constitutional violation.
The court therefore affirmed the agency's denial of benefits to
Lauth.
Lauth now appeals.
III. STANDARD OF REVIEW
This appeal challenges the validity and constitutionality
of an administrative regulation. We exercise our independent
judgment in determining the validity of an administrative
regulation and in interpreting the underlying statute. [Fn. 9] But
we will not substitute our judgment for that of the agency with
regards to the efficacy or wisdom of the regulation. [Fn. 10] "We
limit our review of an administrative regulation to: (1) whether
the regulation is reasonable and not arbitrary; and (2) whether the
regulation is consistent with the statute and reasonably necessary
to its purposes." [Fn. 11] We review an agency's interpretation of
its own regulation under the reasonable basis standard, deferring
to the interpretation unless it is "plainly erroneous and
inconsistent with the regulation." [Fn. 12]
Lauth's constitutional challenge raises questions of law
which we review de novo, adopting "the rule of law that is most
persuasive in light of precedent, reason, and policy." [Fn. 13] We
similarly apply our independent judgment when determining whether
an issue has been waived below due to inadequate briefing. [Fn. 14]
IV. DISCUSSION
A. The Regulatory Definition of "Physical Custody" Is
Reasonable, Not Arbitrary, and Consistent with the Governing
Statutes.
1. The agency adopted the AFDC standard.
Under the now defunct AFDC program, a needy parent who
shared custody of dependent children with a non-needy parent had to
show that the children "lived with" the needy parent and were
"deprived of parental support and care" from the other parent. [Fn.
15] The Alaska AFDC manual translated these eligibility criteria
into a determination of how many days in a month each parent had
custody of the children. The needy parent had to have custody of
the children for more than fifty percent of the month in order to
be eligible for AFDC benefits.
The new ATAP statute does not define an applicant's
eligibility in terms of "deprivation" or "living with." Instead,
it simply conditions an applicant's eligibility on his or her
"physical custody" of the dependent children. [Fn. 16] Yet despite
the difference in terminology between the two statutes, the agency
adopted the AFDC methodology directly into the administration of
the new program, describing "physical custody" in terms of the
amount of days in the month each parent has custody. [Fn. 17]
Thus, in order to qualify for ATAP benefits, the applicant parent
who shares custody with a non-applicant parent must demonstrate
that the applicant parent has custody of the children more than
fifty percent of the time.
2. The agency's regulation is not arbitrary.
Lauth argues that the agency's regulation is arbitrary
and unreasonable because it represents the agency "cutting and
pasting" the old standard into the new program without any
deliberation or careful thought. She further argues that this
court should use a de novo review because there is very little
evidence that the agency used its expertise when it imported the
AFDC standard verbatim into the new program.
But an agency does not need to directly invoke its
expertise to trigger a deferential review. At times, an agency's
expertise in adopting a particular regulation may be implicit
rather than explicit. Here, the legislature has granted the agency
broad authority to "implement, interpret, and administer the
provisions of [the ATAP statute]." [Fn. 18] The agency chose to
interpret the term "physical custody" in terms of the custody time
-- sometimes determined by an hour-by-hour count -- that the
applicant parent has. This appears to be a reasonable
interpretation of the term and we see no reason to assume that the
agency adopted it arbitrarily, without any careful consideration or
thought.
Moreover, there is no particular reason why the agency
should be barred from borrowing methods from AFDC. Although AFDC
was repealed, it was not repealed on the basis of its eligibility
criteria. AFDC was repealed because Congress intended to reform
the welfare system, creating more work incentives and granting the
states greater freedom in designing and implementing their welfare
systems. [Fn. 19] Moreover, AFDC was repealed by Congress, not by
the Alaska Legislature. The ATAP program is the first time that
the Alaska Legislature has enacted a comprehensive welfare statute.
The legislature's use of the word "physical custody" rather than
"deprivation" or "living with" is therefore less significant than
if the AFDC statute had been a state statute repealed by this
legislature. Thus there is no particular reason to assume that by
using the word "physical custody," the legislature intended to
prohibit the agency from re-adopting the AFDC eligibility
standards.
Administrative regulations are presumed to be valid. [Fn.
20] The agency's definition of physical custody need not be the
best definition, it merely needs to be reasonable and not
arbitrary. This regulation qualifies.
3. The regulation is consistent with the governing
statutes.
Lauth argues that the agency's requirement that the
applicant parent have physical custody more than fifty percent of
the month is inconsistent with the general preference for "equal
access" shared custody expressed in the custody statutes. She
points out that under AS 25.20.070, interim custody is supposed to
be as equal as possible:
Unless it is shown to be detrimental to
the welfare of the child, the child shall have, to the greatest
degree practical, equal access to both parents during the time that
the court considers an award of [permanent] custody.
Under 7 AAC 45.225, a needy parent who complies with this statute
and shares exactly equal custody time with the non-needy parent is
ineligible for benefits because she does not have the children more
than fifty percent of the time.
But the regulation is not necessarily inconsistent with
AS 25.20.070. The statute's caveat -- "the greatest degree
practical" -- implicitly recognizes that it is often impossible for
parents to have access that is exactly equal. One parent will
usually have slightly more custody than the other. These slight
incremental custody differences may be unimportant in the custody
perspective, but they acquire significance in the ATAP program.
The agency needs to create certain criteria to distinguish between
competing applicants and to ensure that the benefits are
distributed only to caretakers for needy children who fit the
eligibility requirements.
Lauth argues that the agency should have interpreted the
term "physical custody" to mean simply "joint physical custody."
Under this interpretation, a parent who applies alone for benefits
is entitled to the benefits if she has "joint physical custody,"
regardless of the fact that her joint custody may be fifty percent
or even a little under. Lauth argues that the agency should only
do a custody time count when both parents apply for benefits and
the agency must find criteria for paying one rather than the other.
Moreover, even then, the custody count should only be one factor
among many in determining which among the competing parents is the
actual primary caregiver of the children.
While Lauth's interpretation may be reasonable, that does
not mean that the regulation in place is invalid. [Fn. 21] Here,
the regulation is a reasonable definition of the term "physical
custody" and is not inconsistent with the custody statutes. Thus
we uphold the regulation.
B. The State's Policy of Applying Different Eligibility
Criteria to the Determination of "Physical Custody" Depending on
Whether One or Both Parents Apply Does Not Violate Equal
Protection.
Article I, section 1 of the Alaska Constitution provides
that "all persons are equal and entitled to equal rights,
opportunities and protection under the law." [Fn. 22] Lauth argues
that this clause is violated by the agency's regulation because it
irrationally distinguishes between a poor parent where only one
parent applies for benefits (and physical custody is tested by the
strict, greater than fifty percent rule of subsection .225(b)) and
a poor parent where both parents apply for benefits (when the more
flexible test of subsection .225(d) is applied). Lauth contends
that whether or not the other parent also applies for benefits is
a mere fortuity and different tests of physical custody should not
depend on this fortuity.
The state argues that Lauth does not have an equal
protection claim because she is not similarly situated with the
class of applicants that receive different treatment. The state
relies on Rutter v. State, [Fn. 23] in which we held that the basis
of any equal protection claim is that similarly situated persons
are being treated differently. The state points out that AS
47.27.005(1) requires the agency to provide ATAP benefits to "needychildren and their families," and it is the children's needs, not
the parents', which determine ATAP eligibility. The state argues
that children who have one economically secure parent who is
providing for their care at least fifty percent of the time are not
needy children and thus are different from children who have no
economically secure parents and who are living in poverty 100
percent of the time.
Implicit in the state's argument is the assumption that
in a situation where there is shared custody and both parents are
poor and economically eligible to receive public assistance, both
will normally apply. This assumption seems reasonable. Thus,
subsection .225(b) normally speaks to situations in which one
parent is economically eligible for benefits and the other is not,
whereas subsection .225(d) addresses situations in which both
parents are economically eligible for benefits. It is, therefore,
not a mere fortuity when only one parent applies for benefits,
rather it is because the non-applying parent is ordinarily not
economically eligible to receive benefits.
We agree with the state that children with one
economically secure parent who is providing for their care at least
fifty percent of the time are not similarly situated with children
having both parents economically eligible for benefits. We
therefore agree with the state that no viable equal protection case
has been established by Lauth.
In so concluding we recognize, as we did in Shepherd v.
State, Dep't of Fish and Game, that finding
two classes are not similarly situated
necessarily implies that the different legal treatment of the two
classes is justified by the differences between the two classes.
Such a conclusion reflects in shorthand the analysis traditionally
used in our equal protection jurisprudence. We have generally used
this abbreviated analysis only in clear cases . . . .[ [Fn. 24]]
Here, as in Shepherd, we regard this as a clear case. The
difference in treatment between the two categories is amply
justified by the difference in economic circumstances explained
above.
V. CONCLUSION
For the foregoing reasons, the judgment of the superior
court is AFFIRMED.
FOOTNOTES
Footnote 1:
See AS 47.27.005 et seq.
Footnote 2:
See 42 U.S.C. sec. 604 et seq. (repealed in 1996 by Pub. L.
104-193).
Footnote 3:
See AS 47.27.005(8) (stating that the division shall "adopt
regulations and take action to implement, interpret, and administer
the provisions of [the ATAP statute].").
Footnote 4:
AS 47.27.005(1).
Footnote 5:
AS 47.27.010(1); see also AS 47.27.020(a).
Footnote 6:
See 7 Alaska Administrative Code (AAC) 45.210(4); 7 AAC
45.225(a).
Footnote 7:
Lauth had previously applied for ATAP benefits on October 6,
1997. Her application was denied because she did not have housing
or visitation rights at that time.
Footnote 8:
Originally, Lauth filed suit in superior court to obtain a
preliminary injunction to require the agency to provide her with
benefits. But, in the meantime, she had obtained slightly more
custody hours with the girls. The Division of Public Assistance
calculated the new custody hours and determined that Lauth was now
eligible for ATAP. Lauth then withdrew her request for the
injunction and converted her complaint into an administrative
appeal of the director's decision regarding the still disputed
months of October 1997 to March 1998.
Footnote 9:
See Board of Trade, Inc. v. State, Dep't of Labor, Wage & Hour
Admin., 968 P.2d 86, 89 (Alaska 1998).
Footnote 10:
See id.
Footnote 11:
Id.
Footnote 12:
Id.
Footnote 13:
Wilkerson v. State, Dep't of Health and Social Servs., Div. of
Family and Youth Servs., 993 P.2d 1018, 1021 (Alaska 1999) (quoting
Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979)).
Footnote 14:
See id.
Footnote 15:
See 42 U.S.C. sec. 606(a)-(b).
Footnote 16:
AS 47.27.010.
Footnote 17:
See 7 AAC 45.225.
Footnote 18:
AS 47.27.005(8).
Footnote 19:
See Pub. L. No. 104-193, 110 Stat. 2105.
Footnote 20:
See Church v. State, Dep't of Rev., 973 P.2d 1125, 1128 n.3
(Alaska 1999).
Footnote 21:
See Board of Trade, Inc. v. State, Dep't of Labor, Wage Hour
Admin., 968 P.2d 86, 89 (Alaska 1998).
Footnote 22:
On appeal, Lauth's equal protection claims rely exclusively on
the Alaska Constitution. She does not invoke the federal
constitution.
Footnote 23:
963 P.2d 1007, 1013 (Alaska 1998).
Footnote 24:
897 P.2d 33, 44 n.12 (Alaska 1995) (citations omitted).
