C.K. v. Shalala, No. 95-5454 (3rd Cir. Aug. 9, 1996), 1996 WL 448123 (3rd Cir. (N.J.)).
The Third Circuit has unanimously affirmed the district court's decision upholding the validity of a New Jersey policy denying an AFDC grant increase for a child born to an AFDC recipient. In 1992 HHS had approved a waiver to allow the state to adopt the policy, known as the child exclusion or family cap. The court upheld HHS's approval of the waiver in an opinion that is extremely deferential to the agency. It rejected appellants' arguments that the approval 1) was arbitrary and capricious because the HHS Secretary had failed to explain adequately how the waiver satisfied the requirements of section 1115 (a) of the Social Security Act, 42 U.S.C. 1315 (a); and 2) exceeded the Secretary's authority under 1115. The court relied heavily on the 2nd Circuit's 1973 decision in Aguayo v. Richardson, 473 F.2d 1090, in concluding that the record before the Secretary sufficed for her consideration of the relevant factors and declining to require the Secretary to refute objections made to the waiver. The court noted that the Secretary had considerable material before her on the harms of the policy but gave the Secretary the "benefit of the doubt" in concluding that she had considered the objections. It also rejected the claims that the waiver exceeded the Secretary's authority insofar as it was unreasonably broad, failed to include exceptions, and was not likely to yield useful information. The court held that HHS did not violate 42 U.S.C. 3515b relating to protection of human subjects, agreeing with HHS that the 1115 review included a review of danger pursuant to 3515b. and noting it was satisfied that the Secretary had engaged in such review. As to claims that HHS violated regulations governing experimentation involving pregnant women and fetuses, the court deferred to HHS's "implicit" judgment that the policy did not involve pregnant women or fetuses and noted that it would reach such a conclusion independently. The court rejected claims that the policy violated various provisions of the Social Security Act and related regulations that were not waived, notably 42 U.S.C. 602 (a)(10). It said the policy was similar to the family maximum upheld in Dandridge v. Williams. To the extent that some families receive no benefits at all because the excluded child is the only child living with the caretaker, the court found that 602 (a)(10) was covered by the Secretary's general waiver of 602 (a) and that (a)(10) is waivable. The court rejected federal equal protection and due process claims and adopted the district court's analysis of these claims. CH #49,517.