Campbell v. Apfel

Opinion by Judge WALLACE; Dissent by Judge ALDISERT.

WALLACE, Circuit Judge:

Cody Campbell appeals from a denial of benefits as an alleged surviving child of deceased wage earner Lowell E. Schmidt, under Title II of the Social Security Act (Act). 42 U.S.C. § 402(d). The district court exercised jurisdiction to review this case pursuant to 42 U.S.C. § 405(g), and affirmed the decision of the Commissioner of Social Security (Commissioner) denying Campbell’s claim for benefits. Campbell timely appealed, and we have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.

I

The district court’s order upholding the Commissioner’s denial of benefits is reviewed de novo. Jamerson v. Chater, 112 F.3d 1064, 1066 (9th Cir.1997) (Jamerson ). The Commissioner’s decision is upheld so long as it is free of legal error and supported by substantial evidence. Smolen v. Chater, 80 F.3d 1273, 1279 (9th Cir.1996).

Campbell was born on March 22, 1985, in Salem, Oregon, and has always resided in Oregon. His mother is LaRae Lopez, and his father is alleged to be Schmidt, even though no name is listed on the birth certificate as father.

In California, the Humboldt County District Attorney filed a proceeding on behalf of Campbell to determine paternity on August 12, 1985. Schmidt denied paternity, and a hearing was held in September 1986 to determine whether he should pay temporary child support. According to DNA evidence presented at this hearing, there was a 98.14 percent probability that Schmidt was Campbell’s natural father. Nonetheless, the California court denied the request for temporary child support. No further proceedings were held, and all evidence shows that Schmidt continued to deny parentage until his death on June 9, 1990.

On September 18,1991, Campbell filed a claim for Child’s Insurance Benefits under the Act on the account of Schmidt. The claim was denied, and Campbell requested a hearing before an administrative law judge (ALJ). The ALJ also denied the claim, which became a final decision of the Commissioner when the Appeals Council denied Campbell’s request for review. After the district court affirmed, this appeal was filed.

II

The Act provides benefits to the child of an insured wage earner if the child was dependent upon the wage earner at the time of death. 42 U.S.C. § 402(d)(1). A child whose parents were never married *892may establish dependency for the purpose of receiving benefits if during his life the insured either: (1) acknowledged paternity in writing, (2) was decreed by a court to be the parent, or (3) was ordered to contribute to the child’s support due to his paternity. 20 C.F.R. § 404.355(c). Dependency may also be found if the insured had been living with the child or contributing to the child’s support at the time of death. 42 U.S.C. § 402(d)(3). Campbell concedes that he does not quality for benefits based on this statute and regulation.

In the alternative, to determine whether a claimant is the child of a deceased insured wage earner, the Commissioner is instructed to “apply such law as would be applied in determining the devolution of intestate personal property by the court of the State ... in which [the insured] was domiciled at the time of his death.” Id. § 416(h)(2)(A). Schmidt died domiciled in California; thus, California intestacy laws govern whether Campbell may receive surviving child benefits.

Relevant to establishing a parental relationship for purposes of intestate succession, the California Probate Code, at the time of Schmidt’s death, provided:

[The parental] relationship may not be established by an action under ... the Civil Code unless either (A) a court order was entered during the father’s lifetime declaring paternity or (B) paternity is established by clear and convincing evidence that the father has openly and notoriously held out the child as his own.

Cal. Prob.Code § 6408 (repealed); see also 20 C.F.R. § 404.354(b) (stating that the Commissioner will look to the laws in place at the time of the insured’s death). Campbell concedes that he cannot establish a parenDchild relationship based on the requirements of the California statute. He argues, however, that the requirement to apply California law refers to the whole law of California, including the conflict of laws principles that might point to application of Oregon intestacy laws.

Neither the district court nor the agency decisions made a specific determination regarding the conflict of laws argument presented by Campbell. Rather than deciding whether or not conflict of laws principles apply, the ALJ concluded that “[t]here is no showing that either the State of California or the State of Oregon would find that a parental relationship existed based on the record.” The district court also avoided the conflict of laws issue by assuming without deciding that Oregon law applies, and it concluded that Campbell still would not recover insurance benefits.

We hold that application of 42 U.S.C. § 416(h)(2)(A) in determining parental status for purposes of receiving social security benefits does not entail complex conflict of laws analysis. Rather, determining parental status is as simple as it appears to be on the face of the statute — we must merely look to the intestacy laws of the state “in which [the insured] was domiciled at the time of his death,” 42 U.S.C. § 416(h)(2)(A), in this case, California.

This holding comports with the relevant regulations interpreting the statute, which read in part:

You may be eligible for benefits as the insured’s natural child if ... [y]ou could inherit the insured’s personal property as his or her natural child under State inheritance laws as described in § 404.354.

20 C.F.R. § 404.355(a) (emphasis added). The cross-referenced regulation, 20 C.F.R. § 404.354(b), reads:

Use of State laws. To decide your relationship to the insured, ... [i]f the insured is deceased we look to the laws that were in effect at the time the insured worker died in the State where the insured had his or her permanent home.

Applying the statute and regulations to the case at hand is straightforward. Schmidt died domiciled in California; thus, we must look to the “laws that were in effect [in *893California] at the time [Schmidt] died.” Id. These “laws” are the “State inheritance laws.” 20 C.F.R. § 404.355(a).

The intent of the statute and regulations is not only clear, but logical. As indicated in the above regulation, the “we” who will “look to the [state] law” is a representative of the Commissioner. There is no requirement that this person be legally trained or have mastered the complex conflict of laws cases. It thus makes sense, as the statute clearly states, that the representatives of the Commissioner will look at the California law of intestate succession and make a ruling. That is what happened here.3

A subsequent event shows our interpretation is correct. On October 28, 1998, amendments were published in the Federal Register affecting these regulations. As these amendments did not become effective until November 27, 1998, they do not directly apply to this case. The language in the new regulations, however, does reinforce a construction of the statute that excludes conflict of laws analysis and further indicates that the view of the Commissioner in this regard has not changed.

Section 404.355(b) of the new regulations reads: “If the insured is deceased, we look to the laws of the State where the insured had his or her permanent home when he or she died.” This language nearly mirrors the current regulations as quoted above. Furthermore, in the supplementary information to the new regulations it reads:

When determining the relationship of a child born out of wedlock to a deceased insured person under section 216(h)(2)(A), we have always looked to the law that was in effect in the insured’s State of domicile at the time he or she died.

63 Fed.Reg. 57,591 (1998).

It is well established that we defer to an agency’s reasonable interpretation of its statutes and regulations. Jamerson, 112 F.3d at 1066; see also Watson Land Co. v. Commissioner, 799 F.2d 571, 579 (9th Cir.1986) (“[Legislative regulations, if consistent with statutory authorization, adopted pursuant to proper procedure, and reasonable, have the force of law.”). The agency has interpreted the state law to be applied as the state inheritance laws. As this is a reasonable interpretation of subsection 416(h)(2)(A) to which we owe deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 845, 104 S.Ct. 2778, 81 L.Ed.2d 694 *894(1984), the regulations implementing this interpretation are controlling.

Campbell nevertheless argues that such a construction of the statute conflicts with Moorehead, v. Bowen, 784 F.2d 978 (9th Cir.1986) {Moorehead). Moorehead relies on Wickware v. Session, 538 S.W.2d 466, 470 (Tex.Civ.App.1976) ('Wickware), for its outcome. To understand Moorehead, Wickware needs to be analyzed.

In Wickware, two children were born in California out of wedlock. Subsequent to an acknowledgment of paternity, a suit was filed in the California state court resulting in legitimation pursuant to California law. After the father’s death, a suit was filed in Texas state court to secure the father’s property. The issue was whether the Texas court should give full faith and credit to the California judgment and, in doing so, apply conflict of laws analysis. Texas intestacy law did not become relevant to this inquiry.

Though the court in Moorehead made passing reference to the regulations at issue in this case, see Moorehead, 784 F.2d at 979 n. 1, it did not address the reasonableness of those regulations for purposes of Chevron. Indeed, the regulations are absent from Moorehead’s analysis and serve no purpose to the holding. Moore-head merely interpreted Wickware to require courts to look to Texas eonfliet-of-laws principles to determine the legitimacy of a child living outside of Texas. Because the reasonableness of the regulations was not before it, the court had no occasion to address, as we do here, whether the agency’s regulations require the Commissioner to look only to the intestacy laws of the state of the decedent to determine a child’s legitimacy, and whether that requirement meets the Chevron standard. Thus, as it interprets Texas conflict-of-laws principles only, Moorehead is not relevant to the issues before us.

Ill

As previously stated, Campbell concedes that he cannot meet the requirements of the relevant California statute. Thus, he asks us to ignore Supreme Court precedent and hold that statutes such as this violate the equal protection clause of the Constitution. In Lalli v. Lalli, 439 U.S. 259, 99 S.Ct. 518, 58 L.Ed.2d 503 (1978), the Supreme Court upheld a similar, but even more restrictive, New York statute.

Following the Supreme Court’s decision in Lalli, the California Court of Appeal upheld a constitutional challenge to section 6408. Estate of Sanders, 2 Cal.App.4th 462, 3 Cal.Rptr.2d 536 (1992). Campbell correctly points out that we are not bound by the state court decision. However, the state court’s analysis is correct. Relying on Lalli, the state court properly held that, “requiring a court order establishing paternity to be issued during the father’s lifetime is substantially related to the state interest the statute was intended to promote.” Id. at 545, 2 Cal.App.4th 462.

AFFIRMED.

. The dissent argues that the Commissioner should have looked to California conflict-of-laws principles and applied a governmental interest analysis to determine whether Cáli-fornia or Oregon’s interest predominates. A conflict-of-laws/governmental interest approach is not only beyond the agency’s expertise and contrary to its regulations, it is also such an inherently indeterminate and manipulable doctrine that it is unlikely to foster a predictable system for distributing social security benefits under these circumstances. See generally Stewart E. Sterk, The Marginal Relevance of Choice of Law Theory, 142 U. Penn. L.Rev. 949 (1994). The dissent believes that California courts would find that Oregon’s interest here predominates over California’s, but one could easily reach the opposite conclusion. California courts might well decide that California’s interest in upholding its system of intestate succession outweighs Oregon’s interest in having children such a Cody Campbell inherit from a California decedent's estate. A California child in Campbell’s posi-lion would not be entitled to any assets of the decedent’s estate, and nothing in California case law suggests that the courts would treat Campbell more favorably just because he lives out of state. California's policy is to exclude children like Campbell who have not met its requirements for establishing the decedent's paternity, and there is no reason to believe that California courts would give less weight to this policy merely because an out-of-state child is involved. We disagree with the dissent that the proper test is how California would dispose of social security benefits, over which it has no authority and, hence, no legitimate interest of any sort.

Ultimately, the approach suggested by the dissent suffers from the ubiquitous flaw in all governmental interest analyses: it offers no general principles to assist our determination of which state has the more compelling interest, and we are left with only our personal predilections as a guide. This is hardly the kind of decision that can be routinely made by administrative law judges.