State of Kansas v. United States

F I L E D
United States Court of Appeals
Tenth Circuit

JUN 1 2000
PUBLISH
PATRICK FISHER
UNITED STATES COURT OF APPEALS Clerk
TENTH CIRCUIT

STATE OF KANSAS,

Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA;
No. 98-3341
DEPARTMENT OF HEALTH AND
HUMAN SERVICES; DONNA
SHALALA, in her official capacity as
secretary of Health and Human
Services,

Defendants-Appellees,

Appeal from the United States District Court
for the District of Kansas
(D.C. No. 97-4256-RDR)

Stephen R. McAllister (Carla J. Stovall, Kansas Attorney General, John W.
Campbell, Senior Deputy Attorney General, and M. J. Willoughby, Assistant
Attorney General, on the briefs), Topeka, Kansas, for Plaintiff-Appellant.

Michael S. Raab, Attorney, Appellate Staff (Mark B. Stern, Attorney, Appellate
Staff, with him on the brief), Washington, D.C., for Defendants-Appellees.

Before SEYMOUR, Chief Judge, MCKAY, Senior Circuit Judge, and EBEL,
Circuit Judge.

SEYMOUR, Chief Judge.
 Kansas brought this action for declaratory and injunctive relief in response

to changes in child support enforcement policy brought about by Title III of the

Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA).

Pub. L. No. 104-193, 110 Stat. 2105 (1996). The district court granted the United

States’ motion to dismiss for failure to state a claim, and Kansas appeals. We

review this decision de novo, see Morse v. Regents of the Univ. of Colorado, 154

F.3d 1124, 1126 (10th Cir. 1998) (grant of motion to dismiss); United States v.

Bolton, 68 F.3d 396, 398 (10th Cir. 1995) (determination of federal statute’s

constitutionality), and affirm.

I

The PRWORA, also known as “welfare reform,” made sweeping changes in

social policy relating to low-income people. It replaced the Aid to Families with

Dependent Children (AFDC) program with the Temporary Assistance to Needy

Families (TANF) program. The new program consists of federal block grants that

are distributed to states, which then use the money to provide cash assistance and

other supportive services to low-income families within their borders. Although

this funding structure gives the states greater flexibility in designing their own

public assistance programs, they are required to work toward program goals,

-2-
satisfy a maintenance-of-effort requirement for the expenditure of state funds, and

abide by federal regulations.

Title III of the PRWORA amended the Child Support Enforcement Program

(IV-D), 1 which provides federal money to assist states in collecting child support

from absent parents. See 42 U.S.C. §§ 651-669. State IV-D programs must

currently provide child support services to all cases in which the custodial parent

either receives temporary assistance under TANF or Medicaid, or requests IV-D

assistance. 2

The PRWORA imposes greater federal oversight and control over the

states’ participation in the IV-D program in an effort to increase efficiency in

child support enforcement, particularly in interstate case, through information

sharing, mass case processing, and uniformity. Among other things, the states

must establish a Case Registry which contains all child support orders within the

state, see id. § 653a, and a Directory of New Hires, see id. § 654a. These

databases are regularly matched against one another and against a Federal Case

1
The Child Support Enforcement Program is commonly called IV-D because of its
location in Subchapter IV, Part D of the Social Security Act.
2
Although originally focused on AFDC families, amendments to the program in
1984 established the requirement that states provide assistance in obtaining
support for all children for whom such support is requested. See Child Support
Enforcement Amendments of 1984, H.R. C ONF . R EP . N O . 98-925, at 29 (1984),
reprinted in 1984 U.S.C.C.A.N. 2447.

-3-
Registry and National Directory of New Hires, which function as part of the

existing Federal Parent Locator Service. See id. § 653.

The PRWORA also requires states to adopt the Uniform Interstate Family

Support Act. See id. § 666(f). This act, which has been passed by the legislatures

of all fifty states, allows state agencies to send income-withholding orders across

state lines directly to employers. In addition, the PRWORA requires states to

pass laws facilitating genetic testing and paternity establishment, see id. §

666(a)(5), and authorizing state child support agencies to take expedited

enforcement action against non-paying noncustodial parents, see id. § 666(c).

When a parent fails to pay child support, the PRWORA requires states to revoke

passports, suspend professional and other licenses, place liens on property, and

notify consumer credit reporting agencies, see id. §§ 652(k), 666(a)(1)-(4), (6)-

(7), (16).

Significantly, states are not required to participate in the IV-D program. A

state that elects to receive the federal block grant under the TANF program,

however, must operate a child support enforcement program that meets IV-D’s

requirements. If a state’s child support enforcement program fails to conform to

the requirements of IV-D, the state risks the denial of both its IV-D child support

enforcement funding and its TANF funding. The parties do not dispute that in

fiscal year 1996, Kansas received $29.3 million in IV-D money from the federal

-4-
government, and $101.9 million in TANF funding. These federal funds provide

66% of Kansas’ IV-D program operating costs, and 80% of the expenditures

relating to its computerized data systems. See id. § 655(a)(2)(C), (3)(B).

II

Kansas argues that the amended IV-D program requirements are too

onerous and expensive, necessitate too much manpower, and encroach upon its

ability to determine its own laws. Because of the amount of money at stake,

Kansas contends it is being coerced into implementing the program requirements

in violation of two provisions of the United States Constitution, specifically the

Spending Clause of Article 1, ' 8 and the Tenth Amendment. 3
These claims are

essentially mirror images of each other: if the authority to act has been delegated

by the Constitution to Congress, then it may act pursuant to Article I; if not, the

power has been reserved to the states by the Tenth Amendment. See New York v.

United States , 505 U.S. 144, 156 (1992). Because the legislation at issue was

3
Under the Tenth Amendment, “[t]he powers not delegated to the United States by
the Constitution, nor prohibited by it to the States, are reserved to the States
respectively, or to the people.” U.S. C ONST . amend. X. The Spending Clause
provides that “[t]he Congress shall have Power To lay and collect Taxes, Duties,
Imposts and Excises, to pay the Debts and provide for the common Defence and
general Welfare of the United States; . . .” U.S. C ONST . art. I, § 8, cl. 1.

-5-
enacted pursuant to Congress’ spending power, we will address the issue as

arising under the Spending Clause.

A. Spending Clause Challenges Generally

Congress’ spending power enables it “to further broad policy objectives by

conditioning receipt of federal moneys upon compliance by the recipient with

federal statutory and administrative directives.” Fullilove v. Klutznick , 448 U.S.

448, 474 (1980). The most instructive case on the Spending Clause issue is South

Dakota v. Dole , 483 U.S. 203 (1987), in which the Supreme Court upheld a

legislative provision directing the Secretary of Transportation to withhold federal

highway money from states refusing to raise their legal drinking age to 21.

The Court in Dole recognized four general restrictions on Congress’

exercise of power under the Spending Clause. First, Congress’ object must be in

pursuit of “the general welfare.” Id. at 207. In considering whether an

expenditure falls into this category, courts should defer substantially to the

judgment of Congress. See, e.g., Helvering v. Davis, 301 U.S. 619, 640-41

(1937). Second, if Congress desires to place conditions on the state’s receipt of

federal funds, it must do so unambiguously so that states know the consequences

of their decision to participate. See Dole , 483 U.S. at 207. Third, the conditions

must be related to the federal interest in the particular program. See id. The

required degree of this relationship is one of reasonableness or minimum

-6-
rationality. See New York , 505 U.S. at 167 (conditions must “bear some

relationship to the purpose of the federal spending”); id. at 172 (conditions

imposed are “reasonably related to the purpose of the expenditure”). Fourth,

there can be no independent constitutional bar to the conditions. See Dole , 483

U.S. at 208. The Tenth Amendment itself does not act as a constitutional bar;

rather, the fourth restriction stands for the more general proposition that Congress

may not induce the states to engage in activities that would themselves be

unconstitutional. See id. at 210.

Kansas does not seriously argue that the IV-D conditions in the PRWORA

violate the four restrictions outlined in Dole . The first two restrictions are easily

dispensed with. As the district court noted in its opinion below, the “general

welfare” test is substantially deferential to Congress, and can clearly be met here. 4

4
In its brief to this court, Kansas tries to downplay the seriousness of the problem
of unpaid child support, perhaps in an attempt to argue that the general welfare
requirement is not met. Kansas makes numerous references to “the perceived
need to crack down on the elusive and rumored population of ‘deadbeat dads’”
“believed to be running from state to state,” and the “rare” “so-called dead-beat
dads allegedly fleeing from State to State,” Plaintiff’s Br. at 8, 10, 19, 29. These
characterizations do nothing to advance Kansas’ argument.

Congress made clear that non-payment of child support, particularly in interstate
cases, is a widespread problem which has significant deleterious effects on
children, particularly those in low-income families. The changes in IV-D’s
requirements were made in response to the widespread belief that the system of
pursuing child support across state lines was “far too sluggish to be effective” and
“universally regarded as broken.” H.R. R EP . No. 104-651, at 1405, reprinted in
1996 U.S.C.C.A.N. 2183, 2464. For example, Congress found that in 1992 only

-7-
And although contending that some of the requirements associated with the

computerized database are vague, Kansas fails to assert that the alleged ambiguity

resulted in its inability to exercise its choice to accept the funds knowingly and

“cognizant of the consequences of . . . participation,” as required by Dole . Id. at

207 (citing Pennhurst State Sch. & Hosp. v. Halderman , 451 U.S. 1, 17 (1981)).

The PRWORA unambiguously attaches its many conditions to the TANF and IV-

D funds, and Kansas does not claim it accepted the money without knowledge of

those conditions.

Regarding the third Dole requirement, under which the conditions must be

related to the federal interest in the program, Kansas asserts that the IV-D

conditions are not sufficiently related to the larger TANF program. This

contention is based on Justice O’Connor’s dissent in Dole , in which she argued

for a closer correlation between the funding condition and the federal interest,

stating that the drinking age condition was “far too over and under-inclusive” in

addressing the problem of drunk driving. Id. at 214-15, 218 (O’Connor, J.,

54% of single-parent families with children had a child support order established
and, of that 54%, only about one-half received the full amount due. 42 U.S.C. §
601 note. Only 18% of the cases enforced through the public child support
enforcement system resulted in a collection. Id. Interstate cases represent almost
30% of all child support orders, yet yield only 10% of collections. See H.R. R EP .
No. 104-651, at 1405, reprinted in 1996 U.S.C.C.A.N. 2183, 2464. While
lawyers may legitimately debate the application of the laws which address the
non-payment of child support, no one is served by denying the existence of the
problem.

-8-
dissenting). The majority in Dole , however, endorsed a much less demanding test

and determined that the drinking age condition was reasonably related to the

highway program because of the connection between the drinking age and

highway fatalities.

The TANF program, which provides financial support for low-income

families, is clearly related to the IV-D program and its requirements, which assist

low-income families in collecting child support from absent parents. See H.R.

Rep. No. 104-651, at 1410 (1996), reprinted in, 1996 U.S.C.C.A.N. 2183, 2469

(noting IV-D complements the TANF program because establishing paternity and

collecting child support may enable families to reduce dependence on the welfare

system). Indeed, child support enforcement was conceived of as a related

component of the AFDC system. See S. Rep. No. 93-1356 (1974), reprinted in,

1974 U.S.C.C.A.N. 8133, 8145-48 (discussing the interrelationship between the

welfare system and non-support of children by absent parents). It is no

coincidence that the AFDC/TANF and the child support programs are both set

forth in the same subchapter of the Social Security Act, which bears the heading

“Grants to States for Aid and Services to Needy Families with Children and for

Child-Welfare Services.” 5

As stated previously, child support enforcement falls under Subchapter IV, Part
5

D of the statute. The TANF program is contained in Subchapter IV, Part A.

-9-
 Finally, Kansas makes a few cursory arguments to the effect that the United

States is requiring it to violate the privacy and procedural due process rights of its

citizens. These claims center around the requirements that the state keep a

directory of new hires, and that it take automatic enforcement action against those

parents found to be in arrears on child support. Neither of these arguments is

developed in the brief, and neither appears to have merit. In fact, Congress has

expressly required participating states to adopt safeguards to protect against the

unauthorized use or disclosure of confidential information handled by a state

child support enforcement agency. See 42 U.S.C. § 654(26). Moreover, the states

are free to adopt other measures to protect the information they receive.

In general, Kansas bears a very heavy burden in seeking to have the

PRWORA declared unconstitutional. There are no recent relevant instances in

which the Supreme Court has invalidated a funding condition. See Oklahoma v.

Schweiker , 655 F.2d 401, 406 (D.C. Cir. 1981) (“Although there may be some

limit to the terms Congress may impose, we have been unable to uncover any

instance in which a court has invalidated a funding condition.”). 6
On the other

6
The Court did strike down a funding condition in United States v. Butler , 297
U.S. 1 (1936), but that case relied on an overly narrow view of Congress’
enumerated powers to determine that Congress had overstepped its authority. The
analysis in Butler has been discredited as flawed and unworkable, and has not
been followed. See, e.g. , Laurence H. Tribe, A MERICAN C ONSTITUTIONAL L AW §
5-b, at 836 (3d ed. 2000) (“[T]he Supreme Court has effectively ignored Butler in
judging the limits of congressional spending power.”).

-10-
hand, there have been many cases in which the Supreme Court has upheld

conditions placed on the receipt of federal funds. See, e.g. , Fullilove , 448 U.S.

448 (upholding the conditioning of federal public works funds on states’

implementation of affirmative action programs for contracting), overruled on

other grounds by Adarand Constructors, Inc. v. Pena , 515 U.S. 200 (1995); Lau

v. Nichols , 414 U.S. 563 (1974) (approving section of 1964 Civil Rights Act

under which schools that practice racial discrimination are excluded from federal

financial assistance); Oklahoma v. United States Civil Serv. Comm’n , 330 U.S.

127 (1947) (upholding decision to remove federal highway funds from Oklahoma

for violations of the Hatch Act, where employee was member of the State

Highway Commission while chairman of state Central Democratic Committee).

Federal courts of appeal have been similarly reluctant to invalidate funding

conditions. For example, in Schweiker , 655 F.2d 401, the D.C. Circuit upheld

Congress’ conditioning of Medicaid funds on state implementation of a provision

in the Supplemental Security Income program. See also California v. United

States , 104 F.3d 1086 (9th Cir. 1997) (upholding conditioning receipt of Medicaid

funds on agreement to provide emergency medical services to illegal aliens);

Padavan v. United States , 82 F.3d 23, 28-29 (2d Cir. 1996) (same); Planned

Parenthood v. Dandoy , 810 F.2d 984 (10th Cir. 1987) (upholding Medicaid

funding condition which required changes in state law regarding the provision of

-11-
family planning advice to minors) (per curiam); New Hampshire v. Marshall , 616

F.2d 240 (1st Cir. 1980) (upholding requirements in the Federal Unemployment

Tax Act).

Virginia v. Riley , 106 F.3d 559 (4th Cir. 1997) (en banc) (per curiam)

(superseded by statute), represents the rare case in which a federal court

invalidated a funding condition. In Riley , the Fourth Circuit found that conditions

in the Individuals with Disabilities Education Act were not sufficiently clear and

unambiguous to satisfy Dole’s second requirement. Specifically, the court

objected to conditions requiring every state to provide a free, appropriate

education to learning disabled students, which the United States Department of

Education later interpreted to apply even where school authorities had expelled a

student for behavioral problems unrelated to the learning disability. Because we

have determined that the conditions at issue in the present case do not violate

Dole’s ambiguity restriction, however, Riley is inapposite.

B. Coercion Theory

In addition to the four categorical restrictions, the Court in Dole articulated

a fifth, indistinct limit on the spending power: “[I]n some circumstances the

financial inducement offered by Congress might be so coercive as to pass the

point at which ‘pressure turns into compulsion.’” Dole , 483 U.S. at 211 (quoting

-12-
Steward Mach. Co. v. Davis , 301 U.S. 548, 590 (1937)). It is this coercion theory

upon which Kansas primarily relies. The crux of Kansas’ argument is that the

size of its IV-D and TANF grants, totalling over $130 million, leaves it no choice

but to accept the PRWORA’s many requirements. In this connection, Kansas

correctly argues that the Court in Dole specifically pointed out that the federal

government there was only threatening to withhold 5% of South Dakota’s federal

highway funds:

When we consider . . . that all South Dakota would lose if she adheres to
her chosen course as to a suitable minimum drinking age is 5% of the funds
otherwise obtainable under specified highway grant programs, the argument
as to coercion is shown to be more rhetoric than fact.

Id.

This passage does not get Kansas far. It is merely an instance in which the

Court acknowledged circumstances not sufficient to constitute coercion. In fact,

the cursory statements in Steward Machine and Dole mark the extent of the

Supreme Court’s discussion of a coercion theory. 7
The Court has never employed

the theory to invalidate a funding condition, and federal courts have been

similarly reluctant to use it. “The coercion theory has been much discussed but

infrequently applied in federal case law, and never in favor of the challenging

7
The Court also acknowledged the coercion theory in passing in College Sav.
Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 119 S. Ct. 2219, 2231
(1999). The Court merely quoted the language from Dole and Steward Machine
but did not have an occasion to apply it.

-13-
party.” Nevada v. Skinner , 884 F.2d 445, 448 (9th Cir. 1989). Most of the

treatment given the theory in the federal courts has been negative.

The boundary between incentive and coercion has never been made clear,

and courts have found no coercion in situations where similarly large amounts of

federal money were at stake. For example, numerous courts have upheld

conditions on Medicaid grants even where the removal of Medicaid funding

would devastate the state’s medical system. In Schweiker , 665 F.2d 401,

Oklahoma argued that the threat of losing all Medicaid funding was so drastic that

it had no choice but to comply in order to prevent the collapse of its medical

system. The D.C. Circuit stated: “[t]he courts are not suited to evaluating

whether the states are faced here with an offer they cannot refuse or merely with a

hard choice. . . . We therefore follow the lead of other courts that have explicitly

declined to enter this thicket when similar funding conditions have been at issue.”

Id. at 414. See also California , 104 F.3d 1086 (conditioning receipt of Medicaid

funds); Padavan , 82 F.3d at 28-29 (same); Planned Parenthood v. Dandoy , 810

F.2d 984 (upholding Medicaid funding condition). But see Virginia v. Riley , 106

F.3d at 561 (noting in dicta that a “substantial constitutional question under the

Tenth Amendment would be presented,” if the provision were not already being

struck down on ambiguity grounds, because it “resembles impermissible

coercion”).

-14-
 In any event, the coercion theory is unclear, suspect, and has little

precedent to support its application. Indeed, in Steward Machine , the first case to

articulate the coercion theory, the Court minimized its force, observing, “to hold

that motive or temptation is equivalent to coercion is to plunge the law in endless

difficulties. The outcome of such a doctrine is the acceptance of a philosophical

determinism by which choice becomes impossible.” 301 U.S. at 589-590. For all

these reasons, we hold that the conditioning of TANF funds on Kansas’

compliance with the requirements contained in IV-D does not present a situation

of impermissible coercion. 8

C. New York and Printz

Kansas devotes a significant portion of its brief to a discussion of two cases

that invalidated acts of Congress, New York v. United States , 505 U.S. 144

(1992), and Printz v. United States , 521 U.S. 898 (1997). Neither of these cases

is persuasive to us because neither concerned legislation passed pursuant to the

Spending Clause.

8
Moreover, IV-D contains a “safety valve” provision which allows states to be
exempted from requirements that will not increase the effectiveness and
efficiency of their CSE programs. See 42 U.S.C. § 666(d). In light of this,
Kansas’ prediction that it will be forced to labor under a cumbersome and
byzantine set of regulations appears to be overstated.

-15-
 New York v. United States involved a provision of the Low-Level

Radioactive Waste Policy Act, which was not passed pursuant to Congress’

spending power. 9
The provision required states to either take title to nuclear

waste generated within their borders, or regulate waste disposal according to

Congressional instruction. The Court found that the take-title provision “crossed

the line distinguishing encouragement from coercion,” because it directly

compelled the states to either take action or submit to federal regulation, and did

not offer the option of declining to administer the federal program. Id. at 175,

177. Since neither of the alternatives presented to the states was within

Congress’ authority, the states had no real choice to avoid coercive government

power.

Congress has not held out the threat of exercising its spending power
or its commerce power: it has instead held out the threat, should the
states not regulate according to one federal instruction, of simply
forcing the states to submit to another federal instruction. A choice
between two unconstitutional coercive regulatory techniques is no
choice at all.

Id. at 176.

The circumstances here are clearly distinguishable. The take-title mandate

in New York was coercive because it gave states a “choice” between two

9
Significantly, the Court upheld two other provisions of the Act which were
enacted under the commerce and spending powers. See New York, 505 U.S. at
173, 174.

-16-
unconstitutional alternatives. It was not a condition attached to the receipt of

federal funding. In the present case, the states have a real choice, albeit a hard

one, between accepting the money and the conditions or declining both.

Printz v. United States involved a provision of the Brady Act which

improperly compelled state and local law enforcement officers to execute

background checks for handgun purchasers. In striking down this provision, the

Court held that Congress could not circumvent the prohibition against compelling

states to enact or enforce federal regulatory programs “by conscripting the State’s

officers directly.” Printz , 521 U.S. at 935. Kansas argues that its employees are

being similarly conscripted to administer what amounts to a federal child support

enforcement policy. We are not persuaded.

The Court in Printz distinguished the Brady Act, which was passed

pursuant to Congress’ commerce power, from Spending Clause legislation:

[Some] federal statutes enacted within the past few decades that
require the participation of state or local officials in implementing
federal regulatory schemes . . . are connected to federal funding
measures and can perhaps be more accurately described as conditions
upon the grant of federal funding than as mandates to the States . . . .
For deciding the issue before us here, they are of little relevance.

Id. at 917-18. Moreover, in Printz Congress directly commanded state officers to

enforce a federal program. Here, state employees have to meet federal program

requirements as a condition of receiving federal money under the program. While

the amount of money to be lost through non-compliance is substantial, the

-17-
PRWORA does not directly compel or command state employees to take any

action whatsoever. States are free to refuse to implement the conditions and to

decline the grant money. Both New York and Printz are inapposite to the case at

bar.

III

Kansas has invited us to forge new ground in Spending Clause

jurisprudence by invalidating the child support enforcement conditions Congress

attached to its social welfare funding program. In doing so, it asks that we

expand the concept of “coercion” as it applies to relations between the state and

federal governments, and find a large federal grant accompanied by a set of

conditional requirements to be coercive because of the powerful incentive it

creates for the states to accept it. We decline the invitation. In this context, a

difficult choice remains a choice, and a tempting offer is still but an offer. If

Kansas finds the IV-D requirements so disagreeable, it is ultimately free to reject

both the conditions and the funding, no matter how hard that choice may be. See

Kathleen M. Sullivan, Unconstitutional Conditions , 102 H ARV . L. R EV . 1413,

1428 (May 1989) (discussing the resilience of the argument that “offers of

conditioned benefits expand rather than contract the options of the beneficiary

class, and so present beneficiaries with a free choice”). Put more simply, Kansas’

-18-
options have been increased, not constrained, by the offer of more federal dollars.

The requirements contained in IV-D represent a reasoned attempt by

Congress to ensure that its grant money is used to further the state and federal

interest in assisting needy families, in part through improved child support

enforcement. This is a valid exercise of Congress’ spending power, and the

requirements do not render the PRWORA unconstitutional.

We AFFIRM the judgment of the district court.

-19-