UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 93-1254
CHRISTINE STOWELL, ET AL.,
Plaintiffs, Appellants,
v.
SECRETARY OF HEALTH AND HUMAN SERVICES,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
Before
Selya, Cyr and Boudin, Circuit Judges.
Patrick Ende, with whom Jack Comart and Pine Tree Legal
Assistance were on brief, for appellants.
Robin S. Rosenbaum, Attorney, Civil Division, U.S.
Department of Justice, with whom Stuart Schiffer, Acting
Assistant Attorney General, Jay P. McCloskey, United States
Attorney, and Barbara C. Biddle, Attorney, U.S. Department of
Justice, were on brief, for appellee.
Christopher C. Leighton, Deputy Attorney General, with whom
Michael E. Carpenter, Attorney General, and Thomas D. Warren,
Deputy Attorney General, were on brief for State of Maine, amicus
curiae.
September 10, 1993
SELYA, Circuit Judge. Although this appeal presents an
SELYA, Circuit Judge.
issue of first impression that requires us to navigate a complex
maze of statutes and regulations, its resolution turns on the
interpretation of two words in common usage. We hold, as did the
court below, that the Secretary of Health and Human Services (the
Secretary) permissibly concluded that the term "payment levels"
as used in 42 U.S.C. 1396a(c)(1) (1988) refers to baseline
payments received under the Aid to Families with Dependent
Children (AFDC) program. Consequently, we affirm.
I. BACKGROUND
AFDC is a voluntary, cooperative federal-state social
service program paid for by both sovereigns but administered
largely by the states. See 42 U.S.C. 601-615 (1988 & Supp.
III 1991); see also Doucette v. Ives, 947 F.2d 21, 23-24 (1st
Cir. 1991) (describing interactive nature of AFDC program). For
heuristic purposes, we limit our discussion of this intricate
program to the particular problem around which this case
revolves.
Through AFDC, poor families receive a monthly stipend
(the basic AFDC grant). The amount of the stipend varies from
state to state and also varies according to family size. If a
family unit has some other income, say, child support payments,
most states deem this money to offset the guaranteed AFDC stipend
pro tanto. Under such a regime, a dollar is subtracted from the
family's basic AFDC grant for every dollar of supplemental income
received. See, e.g., Hassan v. Bradley, 818 F. Supp. 1174, 1176
2
& n.4 (N.D. Ill. 1993) (describing methodology and identifying
states which employ it).
A few states, Maine among them, take a less
conventional approach to supplemental income. Up to a point,
Maine permits a family to receive such income without offsetting
it against the basic AFDC grant. Only when the family's
aggregate income reaches a designated level a level that Maine
calls the "standard of need" does Maine begin to shrink the
basic AFDC grant in proportion to the marginal amount of
supplemental income received. In the bureaucratic idiom, this
phenomenon is known as "gap filling" because no offsets are made
until the family's supplemental income has filled the gap between
the stipendiary amount of the basic AFDC grant and the (somewhat
higher) standard-of-need amount. Even then, the offset is
limited to the excess of familial receipts over the standard of
need. See Doucette, 947 F.2d at 23-24.
In 1991, Maine, faced with burgeoning budgetary woes,
narrowed this gap by upgrading basic AFDC grants while
simultaneously downgrading standards of need. This revision took
effect on April 1, 1992 (after the district court lifted a
temporary stay). As a result, AFDC-eligible families with
relatively high amounts of supplemental income receive lower
payments than before and families with little or no supplemental
income receive higher payments than before. More specifically,
because child support payments are collected by the state and
then transmitted to AFDC recipients as supplemental income, see
3
42 U.S.C. 602(a)(2) (1988), Maine's reduction in the standard
of need meant that certain AFDC-eligible families would receive
lower overall payments from the state than they would have
received prior to May 1, 1988.1 After the changes became
effective, the Secretary continued to authorize Medicaid funding
for Maine.
Although the revisions did not ruffle federal feathers,
they prompted the instant suit. Seeking declaratory and
injunctive relief, 5 U.S.C. 702 (1988), plaintiff-appellant
Christine Stowell accused the Secretary of violating a
maintenance-of-effort provision contained in the Medicare
Catastrophic Coverage Act of 1988, Pub. L. No. 100-360, 102 Stat.
683.2 That provision, codified at 42 U.S.C. 1396a(c)(1)
1A concrete example may help to illuminate the effect of the
revisions. On May 1, 1988, a single mother with two dependent
children would have received a basic AFDC grant of $416. Had the
family unit also received $157 in child support payments, it
would have retained the entire amount ($573 per month). While
Maine's revisions boosted the same family's basic AFDC grant to
$453 per month, the concomitant lowering of the standard of need,
given the assumptions in our hypothetical, would have required an
offset of all supplemental income over $100 per month, or $57.
The net effect, then, would have been to cap the family's total
monthly receipts at $553 ($20 per month less than the family
would have retained under the earlier regime). On the other
hand, if our hypothetical family had no supplemental income, the
revisions would have increased its receipts by $37 per month (the
amount by which Maine hiked the basic AFDC grant).
In constructing this example, we have excluded any
reference to the $50 "pass-through" payment described in 42
U.S.C. 657(b)(1) (1988), which was unaffected by the revisions
in question.
2Stowell also attempted to sue the state. That suit has
gone by the boards as a result of our holding that the
maintenance-of-effort provision imposed a duty only on the
Secretary. See Stowell v. Ives, 976 F.2d 65, 71 (1st Cir. 1992).
4
(1988), directs the Secretary not to approve any state's Medicaid
plan if the state's AFDC program sets "payment levels" lower than
those in effect on May 1, 1988. Refined to bare essence,
Stowell's position has consistently been that the maintenance-of-
effort provision prohibits the Secretary from approving state
Medicaid plans if the state's AFDC payment levels are lower than
those in effect on May 1, 1988; that the total amount of money
Stowell and persons similarly situated currently receive from
Maine is lower than the amount they would have received under the
earlier (pre-May 1, 1988) rules; that, nonetheless, the Secretary
did not refuse to fund Maine's Medicaid plan; and that,
therefore, the Secretary violated the maintenance-of-effort
provision.
The case proceeded as a class action3 and the parties
submitted it on a stipulated record. The district court asked a
magistrate judge for a report and recommendation. Reasoning that
Maine had not, in fact, reduced its payment levels below those in
3The plaintiff class comprises:
All families in the State of Maine who would
be eligible for AFDC benefits and/or
supplemental payments under 42 U.S.C
602(a)(28) [providing for payment of child
support collected by the state] under the
AFDC payment levels in effect in Maine on May
1, 1988 and who would receive a smaller total
AFDC plus supplemental 602(a)(28) payment
under the AFDC payment levels proposed to be
effective April 1, 1992 than they would have
received under the May 1, 1988 payment
levels.
Stowell v. Sullivan, 812 F. Supp. 264, 266 n.3 (D. Me. 1993).
5
effect on May 1, 1988, the magistrate recommended that the court
enter judgment for the Secretary. See Stowell v. Sullivan, 812
F. Supp. 264, 266-71 (D. Me. 1993) (reproducing magistrate's
report). On de novo review, the court adopted the
recommendation. See id. at 265-66. Plaintiffs appeal.
II. ANALYSIS
The issue is whether the Secretary's continued funding
of Maine's Medicaid plan, despite the state's decision to lower
its standard of need, violates the maintenance-of-effort
provision.4 We have repeatedly urged that, when a nisi prius
court handles a matter appropriately and articulates a sound
basis for its ruling, "a reviewing tribunal should hesitate to
wax longiloquent simply to hear its own words resonate." In re
San Juan Dupont Plaza Hotel Fire Litig., 989 F.2d 36, 38 (1st
Cir. 1993). Because we are in substantial agreement with
Magistrate Judge Cohen's thoughtful disquisition, see Stowell v.
Sullivan, 812 F. Supp. at 266-71, we invoke this principle and
confine ourselves to a few decurtate observations.
First: Whenever a court is charged with statutory
First:
interpretation, the text of the statute must be its starting
point. See Estate of Cowart v. Nicklos Drilling Co., 112 S. Ct.
2589, 2594 (1992). Here, however, the statutory language does
4The Secretary also argues that, even if the term "payment
levels" is given the expansive reading that appellants suggest,
the federal government's obligation to intervene would not arise
unless and until Maine sought approval of amendments to its
Medicaid plan. We need not consider this contention and,
consequently, take no view of it.
6
not directly answer the question posed. It provides that:
the Secretary shall not approve any State
plan for medical assistance if
(1) The State has in effect, under
its [AFDC plan], payment levels
that are less than the payment
levels in effect under such plan on
May 1, 1988.
42 U.S.C. 1396a(c)(1). The term "payment levels," which is not
defined elsewhere in the statute, could, as the Secretary claims,
refer to the stipendiary amounts of basic AFDC grants; it could
also, as appellants claim, refer to total income, that is, grant
amounts plus supplemental income actually received. Given two
plausible alternatives, and recognizing that the universe of
interpretive possibilities may extend beyond them, we think the
statute contains an undeniable ambiguity.
Appellants resist this conclusion. Pointing out that,
in certain other contexts, Congress referred to the basic AFDC
grant as the "payment standard," 42 U.S.C. 602(h) (1988), they
argue that the term "payment levels" must mean something else.
This argument founders. It is apodictic that Congress may choose
to give a single phrase different meanings in different parts of
the same statute. See Atlantic Cleaners & Dyers, Inc. v. United
States, 286 U.S. 427, 433 (1932); Greenwood Trust Co. v.
Massachusetts, 971 F.2d 818, 830 n.10 (1st Cir. 1992), cert.
denied, 113 S. Ct. 974 (1993). It is a natural corollary of this
truism that Congress, in its wisdom, may choose to express the
same idea in many different ways. Cf., e.g., Cowart, 112 S. Ct.
at 2596 (stating that Congress's eschewal of a term of art used
7
elsewhere in the same statute, in favor of a more descriptive
term, does not necessarily mean that the two terms bear different
meanings). Any other interpretive rule would defy human nature
and ignore common practice. Courts should go very slowly in
assigning talismanic importance to particular words or phrases
absent some cogent evidence of legislative intent.
Second: Appellants' attempt to score a touchdown by a
Second:
selective perusal of legislative history puts no points on the
board. The centerpiece of this effort is a passage evincing a
congressional purpose "to assure that the resources [for
Medicaid-related coverage of certain persons] are not diverted
from the [AFDC] program." House Conf. Rep. No. 661, 100th Cong.,
2d Sess. 145, 256, reprinted in 1988 U.S.C.C.A.N. 923, 1034. But
this language does not help to resolve the statute's linguistic
ambiguity in appellants' favor.
For one thing, the passage, like the statute itself,
leaves unaddressed the question whether Congress's underlying
concern lay with all payments affecting the AFDC program or only
with the stipendiary amounts of basic AFDC grants and an
ambiguous statute cannot be demystified by resort to equally
ambiguous legislative history. For another thing, to the extent,
if at all, that the quoted passage indicates a broad
congressional purpose to provide AFDC recipients with a fixed
safety net, we think it cuts against appellants' construction of
the term "payment levels." Because supplemental income is
contingent on a nearly infinite variety of circumstances,
8
appellants' definition would at most guarantee AFDC recipients a
hypothetical sum; the Secretary's reading, on the other hand,
secures a fixed payment floor.
The sockdolager is that the quoted passage, read in
context, is counteracted by other items in the legislative
history, including those that stress the importance of continued
flexibility. Congress prized flexibility because it "allows each
state to establish its own need and payment standards for
assistance." S. Rep. No. 377, 100th Cong., 2d Sess. 1, 49,
reprinted in 1988 U.S.C.C.A.N. 2776, 2826. Certainly, the
Secretary's rendition of "payment levels" enhances a state's
flexibility while appellants' version detracts from it. See
infra pp. 13-14. This jousting between archival excerpts drives
home the point that "reviewing legislative history is like
looking over the crowd at a party and picking out one's friends."
Patricia J. Wald, Some Observations on the Use of Legislative
History in the 1981 Supreme Court Term, 68 Iowa L. Rev. 195, 214
(1983) (quoting Leventhal, J.). In this instance, both sides
have unearthed congenial acquaintances. The net result, however,
is that evidence gleaned from the legislative history does not
tell a straightforward tale and, therefore, does not resolve the
ambiguity with which we are concerned.5
5By discussing the House Conference Report excerpt, we do
not mean to imply that Maine has diverted resources from the AFDC
program to the Medicaid program. There is no such evidence in
the record. Thus, appellants' reading of the legislative
history, even if we were to credit it, would not necessarily
carry the day. See, e.g., Babbitt v. Michigan, 778 F. Supp. 941,
947 (W.D. Mich. 1991).
9
Third: When a statute is silent with respect to a
Third:
specific question, courts frequently afford deference to a
plausible construction offered by the agency charged with
administering it. See National R.R. Passenger Corp. v. Boston &
Me. Corp., 112 S. Ct. 1394, 1401 (1992) (stating that "[i]f the
agency interpretation is not in conflict with the plain language
of the statute, deference is due"); Chevron U.S.A., Inc. v. NRDC,
Inc., 467 U.S. 837, 843 (1984); Massachusetts Dep't of Educ. v.
United States Dep't of Educ., 837 F.2d 536, 541 (1st Cir. 1988).
Here, the agency that the Secretary heads, the Department of
Health and Human Services (HHS), is entrusted with administering
both the Medicaid and AFDC statutes. Since HHS interprets the
maintenance-of-effort provision to refer only to the basic AFDC
grant, Chevron principles pose a formidable barrier in
appellants' path.
In an endeavor to skirt this barrier, appellants
suggest that deference would be inappropriate here because HHS
has not maintained a consistent position. The suggestion is
factually unfounded and legally unpersuasive.
We begin by examining the facts. Although the agency's
position has shifted in some respects over the years, it has not
waffled with regard to the meaning of "payment levels." HHS's
first public elucidation of the point appears in a 1989
publication informing state officials that "if you make
adjustments to your [AFDC] payment levels which do not result in
lower payment amounts being made to families with no countable
10
income, you are considered to meet the Medicaid Maintenance of
Effort Requirements." State Medicaid Manual 3205 (May 1989).
In subsequent commentaries, HHS made plain that this reference
was intended to include only those families which received no
income over and above the basic AFDC grant. We see no
inconsistency between this original interpretation, roughly
contemporaneous with the statute's enactment, and the agency's
current views.
Appellants' legal theory rests on an equally shaky
foundation. Agencies "must be given ample latitude to adapt
[their] rules and policies to the demands of changing
circumstances." Rust v. Sullivan, 111 S. Ct. 1759, 1769 (1991)
(citations and internal quotation marks omitted). An important
corollary of this rule is that an agency's position may evolve
over a period of time without automatically forfeiting all claims
to judicial deference. And, moreover, an agency interpretation
that represents a modification of, or even a sharp departure
from, a prior interpretation does not necessarily eliminate the
expertise-related reasons for judicial deference. See id.;
Chevron, 467 U.S. at 862-64. Thus, an explained modification of
an agency interpretation ordinarily retains its entitlement to
whatever deference may be due. See Rust, 111 S. Ct. at 1769
(collecting cases). So it is here.6
6To be sure, in this case the agency claims that its
position has been consistent throughout. It is too much to
expect that even bureaucrats a species renowned for mastery of
the fissilingual can explicate the reasons underlying a change
that was never made. Regardless, HHS has explained, cogently and
11
Next, appellants try to skirt the Chevron barrier by
taking a different path. They asseverate that HHS's view merits
little deference because determining this particular statute's
meaning involves primarily judicial, as opposed to
administrative, skills. The attempted end run fails.
The Chevron doctrine often requires different degrees
of deference in different situations. See Sierra Club v. Larson,
F.2d , (1st Cir. 1993) [No. 92-2227, slip op. at 17-
18]. Although the need for deference diminishes as issues become
more law-bound and less moored to administrative expertise, see,
e.g., United States v. 29 Cartons of * * * an Article of Food,
987 F.2d 33, 38 (1st Cir. 1993) (collecting cases), this case is
not removed from the realm of specialized administrative
knowledge. When Congress commanded the Secretary to ensure that
"payment levels" were maintained, it left open the question of
how that term might be defined in a manner that would best
promote efficient, fair administration of two complicated social
service programs. The agency, in filling this lacuna, relied on
its lengthy experience with the statutes involved. See AFDC
Information Memorandum (August 5, 1992). Courts should not
cavalierly discount the value of agency expertise painstakingly
garnered in the administration, over time, of programs of
remarkable intricacy. See, e.g., La Casa Del Convaleciente v.
in detail, why it believes its current interpretation of the
ambiguous phrase is sound. No more is exigible. See Rust, 111
S. Ct. at 1769; Motor Vehicle Mfrs. Ass'n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 42 (1983).
12
Sullivan, 965 F.2d 1175, 1178 (1st Cir. 1992) (suggesting that
deference to agency expertise is particularly appropriate in the
complex field of Medicare); Wilcox v. Ives, 864 F.2d 915, 926-27
(1st Cir. 1988) (Breyer, J., concurring) (suggesting that
deference is appropriate where an agency has, through its daily
experience in administering a statute, gained a firm
understanding of the relation of a given provision to the statute
as a whole); see also Friedman v. Berger, 547 F.2d 724, 727 n.7
(2d Cir. 1976) (Friendly, J.) (stating that the Social Security
Act, of which AFDC and Medicaid are a part, is "almost
unintelligible to the uninitiated"), cert. denied, 430 U.S. 984
(1977).
Fourth: Our last point is, in actuality, a subset of
Fourth:
our third point. In this instance, reading the phrase "payment
levels" as encompassing only the stipendiary amounts of basic
AFDC grants preserves the program's flexibility and facilitates
its administration. Hence, the cardinal reason why deference is
due is because the agency's interpretation of the disputed term
is not only linguistically plausible but also eminently sensible.
See 29 Cartons, 987 F.2d at 38 (explaining that the true measure
of a court's willingness to defer may depend, in the final
analysis, on the persuasiveness of the agency's interpretation,
given all the attendant circumstances); Mass. Dep't of Educ., 837
F.2d at 541 (similar).
States have traditionally been afforded a broad measure
of discretion in implementing the AFDC program. See Jefferson v.
13
Hackney, 406 U.S. 535, 539-41 (1972). The murky language of 42
U.S.C. 1396a(c)(1) cannot readily be interpreted as a signal
that Congress meant to scrap this tradition. Cf., e.g., Rosado
v. Wyman, 397 U.S. 397, 414 n.17 (1970) ("An extensive alteration
in the basic underlying structure of an established program is
not to be inferred from ambiguous language that is not clarified
by legislative history."). Appellants' construction that the
maintenance-of-effort provision is triggered whenever any family
unit receives fewer total dollars in a given month than it would
have received that month under the set of computational rules
that were in effect on May 1, 1988 runs at cross purposes to
this deep-seated discretion by inhibiting a state's ability to
reorder its priorities. For example, reading the term "payment
levels" as appellants prefer would preclude a state from
distributing AFDC funds according to a new formula, although the
state maintained (or, perhaps, even increased) its aggregate AFDC
expenditures.7 In contrast, interpreting the term "payment
levels" as referring only to basic AFDC grants, as the Secretary
urges, provides all recipients a protective floor while still
permitting states to implement changes that more efficiently
allocate scarce resources. There is every reason to believe that
this latter route, which preserves the discretion traditionally
7The case at bar illustrates the point. Although Maine
reduced the amount of outside income a person may receive before
AFDC payments will be offset partially to save money, it also had
another purpose: increasing the benefits available to more needy
AFDC recipients, i.e., those who receive basic AFDC grants but
have little or no supplemental income.
14
available to the states in implementing the AFDC program and
maximizes state flexibility, is a far closer approximation of
congressional intent. See S. Rep. No. 377, 100th Cong., 2d Sess.
49, reprinted in 1988 U.S.C.C.A.N. 2776, 2826 (referring to the
incidence of state flexibility in connection with need and
payment standards).
Nor is this the only straw in the interpretive breeze.
We can safely assume that Congress, in enacting the statute,
preferred administrative efficiency to administrative clutter.
See Dion v. Commissioner, Me. Dep't of Human Servs., 933 F.2d 13,
17 (1st Cir. 1991) (discussing congressional interest in an
administratively streamlined procedure for food stamp
recipients). This, too, cuts in favor of the Secretary for the
Secretary's interpretation is administratively more workable than
appellants' interpretation. If the term "payment levels" means
basic AFDC grant amounts, both state and federal administrators
can tell quite easily whether a proposed change in a state's plan
activates the maintenance-of-effort provision. If, on the other
hand, the term means all payments made to all AFDC recipients, it
prescribes a much more complicated, highly individualized
calculation. Because the Secretary's reading of the statute
ensures that a significant portion of the finite funds available
for AFDC and Medicaid go to needy recipients rather than to the
costs of administrative implementation, it jibes more neatly with
Congress's likely intent.
III. CONCLUSION
15
We need go no further.8 When, as now, the case is
debatable, the key phrase in the statute is patently ambiguous,
the legislative history is unilluminating, the subject matter is
somewhat technical, and the indications are that Congress wanted
to take advantage of agency expertise, a plausible interpretation
of the disputed term, expressed with clarity by the agency
charged with the statute's administration, necessarily carries
great weight. To clinch matters, the agency's interpretation of
the phrase "payment levels" in the statute sub judice also helps
to maintain traditional programmatic goals and to promote the
public interest in efficient implementation of the affected
programs. We hold, therefore, consistent with the Secretary's
view, that the allusion in 42 U.S.C. 1396a(c)(1) to "payment
levels" refers only to the stipendiary amounts of basic AFDC
grants and not, as appellants have argued, to total monies
actually received by each AFDC family. Accordingly, the judgment
below will be
Affirmed.
8We do not tarry over appellants' assertion that
administrative interpretations and statutory provisions in other
fields treat certain supplemental income in the same fashion as
basic AFDC grants. In the first place, these interpretations,
all of which deal with program administration, are analytically
distinct and, therefore, inapposite. See Stowell v. Sullivan,
812 F. Supp. at 270-71 (discussing identical proffer). In the
second place, this is a zero-sum game; the Secretary has produced
a counter-list of interpretations and provisions which treat
supplemental income and basic AFDC grants differently. Compare,
e.g., 51 Fed. Reg. 29,223, 29,224 (1986) (declaring supplemental
payments to be AFDC expenditures for purposes of matching federal
funds) with, e.g., Winslow v. Commissioner, Me. Dept. of Human
Servs., 795 F. Supp. 47, 49-50 (D. Me. 1992) (upholding
Secretary's determination that supplemental payments are not AFDC
payments for purposes of computing Medicaid income levels).
16