Property, Welfare Benefits and Due
Phil Rutherford
Process
Bill Reynolds

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“The American Dream”
• American ideals of individualism and opportunity
– Rebellion from monarchy and patrimony
– Fate is not predetermined, you can go as far as your hard work will bring you
– “Rags to riches” in one lifetime; immigrants’ children can run the country
• Sotomayor (mother and father PR immigrants); Obama
(father was Kenyan); 40 percent of fortune 500 companies founded by immigrants or children of immigrants (Apple,
Oracle, Clorox, Boeing, Disney, etc)

•
– WW1 – orphans and widows lack substantive ability to provide for themselves
– Great Depression – 25 percent unemployment
– Hundreds of thousands of homeless Americans
– FDR creates the New Deal – Social reform at the federal government level – creates

• ADC – provided
for state
dollars to supplement singles and widowed mothers pension programs
– States, as they were footing the bill, were given considerable discretion on eligibility
• “Suitable homes,” excluding
“undesirables” (never married, AA women and children)

• Participation by the states was made voluntary and in 1939 eight states had no ADC program.
• A provision that required the programs to pay a "reasonable subsistence compatible with decency and health" was removed.
• Most of the federal oversight, which would have promised equal treatment to applicants regardless of race or marital status, was removed.
• Administration of the program was transferred from the Children's
Bureau to the Social Security Administration, which lacked the
Children's Bureau's commitment to poor children and their mothers.
• The initial appropriation for the program was reduced from $120 to
$25 million

• After WW2, so many widowed mothers were eligible for welfare benefits, they were removed from the program and administered benefits through the military
– This removed the “worthy” mothers and left undesirables
• Additionally, women who worked during WW2 were staying in workforce, erasing societal impressions that women could not support themselves

In the 1950s, 13 states moved to exclude children from the program on the basis of birth status
(children born out of wedlock).

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• 1960s see a dramatic increase in welfare benefit applications
– Migration of African-American families from the South
• Shapiro v. Thompson (1969) - the Court found unconstitutional state regulations that required families to live in state for a certain time period before becoming eligible for AFDC.
– Court decisions ending “unfit home” and “undesirable family” exclusions
• King v. Smith (1968) - challenged an Alabama regulation allowing for AFDC termination if a recipient "cohabitated" with a man
– Legal Aid programs assisting in applications

• The Plaintiffs’ Attorneys:
– In 1967, lawyers at Mobilization for Youth Legal Unit, along with the Center for Social Welfare Policy and Law, sued the city and state of New York challenging welfare terminations.
• David Diamond was the primary lawyer who prepared and filed the lawsuit for the MFY
• Lee Albert became the lead attorney in the case working with the Center
– The Center and the National Welfare Rights Organization, another national public interest law agency, were at odds
• Two former MFW attorneys, Peter Sitkin and Steve
Antler, had filed a similar case in California, with what the
MFW believed were inferior facts

• MFW decided to sue George Wyman, the New York
State welfare commissioner, and Jack Goldberg, the
New York City welfare commissioner, in NY state court
• After the lawsuit was filed, but before it was decided,
New York State changed its termination policy, threatening the suit
– NYS now allowed an informal conference prior to termination
– NYC, feeling this was too cost-prohibitive, began a “paper review” process, in which the recipient could submit evidence
– Under both options, a full hearing was available after benefits were terminated.

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– (1) There is due process protection in welfare benefit termination
– (2) New York State’s termination procedure was constitutional, but
– (3) New York City’s paper review was unconstitutional.

• New York City appealed to the Supreme Court, and New York State dropped from the case
– Cert was granted on October 13, 1969
– New York City’s brief was 9 pages; the plaintiff’s was
74
• The lawyers for the Plaintiffs were not confident about their chances
• Dropped the “right to live” argument in favor of the
“property right” argument, but not without much debate
– The United States government weighed in on the side of New York City

•
– The MFW nominated
Archibald Cox to give the oral arguments.
– The Center, and Lee
Albert, wanted Lee
Albert to argue.
– Albert would win out
Lee Albert Oral Argument

 There are two basic requirements for due process to be satisfied re deprivation of welfare benefits
 Timely and adequate notice of termination with reasons; and
 Effective opportunity to participate in hearing prior to termination
 Failure to provide something akin to adjudicative hearing prior to termination of benefits violated due process
 It was the only time, before or since, that the Court has held that due process requires an evidentiary hearing prior to a temporary deprivation.
 It was emphasized there that welfare assistance is given to persons on the very margin of subsistence

• Timely and adequate notice
• Oral presentation of evidence
• Oral presentation of arguments
• Disclosure of opposing evidence
• Right to an impartial decision maker
• Confrontation of any adverse witnesses
• Cross-examination of adverse witnesses
• Right to retain attorney or representative
• Decision based on the record of the hearing
• Statement of reasons and evidence supporting the decision

Video 1 http://www.youtube.com/watch?v=HJa8ixBGVrQ
Video 2 http://www.youtube.com/watch?v=KU-VpgpE3uw

America’s Entitlement Culture
There are two basic types of welfare programs:
1.
“Categorical Programs” – designed for people who meet certain requirements (i.e. blind, disabled, poor, etc.)
2.
“Universal Programs” – available to those in the wage-labor force when they reach a certain age.

America’s Entitlement Culture
• In the 1960’s “entitlement” payment accounted for just under 1/3 of government payouts.
• In 2010, these payments accounted for about 2/3 of all federal spending.
• In 2010, there were more American's receiving disability checks from the government than were working for an U.S. manufacturer
• “There has been a slow shift in the
American mindset from citizen, to consumer, to ward of the state.”

America’s Entitlement Culture
What are some factors that contribute to this mindset?
1. Excessive executive compensation and severance packages which destroy accountability (if you mess up – you still get a ton of money to leave)
2. Politicians using their positions of power to make more money (perks, speaking engagements, endorsements, book deals etc.)
3. Existing corruption in current systems (because other people are taking excessively from the system, I’m going to get my cut as well!)
4. Public employee union benefits (pay, free healthcare, generous pensions, etc) – taxpayers are floating the states costs
5. Excessive Government spending with no perceived consequences
6. Perception of others wealth compared to the reality of your own situation
(television, celebrities, etc.)

America’s Entitlement Culture
Acknowledging that everyone contributes to the entitlement culture is the best way of addressing it…

“[T]he Court today holds that it would violate Due
Process of the Fourteenth Amendment to stop paying those people weekly or monthly allowances unless the government first affords them a full evidentiary hearing even though welfare officials are persuaded that the recipients are not rightfully entitled to receive a penny under the law…”
- Justice Hugo Black, Goldberg v. Kelly

Why did Justice Black Dissent?
1. The Court overstepped its purpose as an interpretive body of government when the majority effectively used its power to legislative.
2. The majority was hindering the government’s ability to fight against welfare fraud thus creating unnecessary economic waste.
3. Placing more bureaucracy on the poor did not solve their problems

Although the Court affirmed that statutory entitlements were protected by due process because they created a property interest for the beneficiary, the considerations given to the
form and amount of process necessary to terminate benefits underwent several changes post Goldberg.
The majority held in Goldberg that termination hearings did not need to take the form of a trial (or quasi-trial) but implemented procedures that looked similar. Later a judicial 3-prong balancing test was established where judges were asked to:
1. Identify the property interest that will be affected by the action.
2. Identify the risks of erroneously depriving a beneficiary under the current system and weigh the benefits, if any, of implementing new procedural safeguards.
3. Identify the government’s interest and consider how additional or substitute procedures will affect fiscal and administrative resources

“The Due Process Clause Means Something More Than Accuracy” – Jerry
Mashaw
Regardless of the exact methodology courts use, due process advocates encouraged them to be mindful of the interest or liberties at stake. Due process is concerned with more than accuracy, it is concerned with:
• Individual dignity
• Equal application of the law
• Legitimizing government regulations
The fear of the “slippery slope” ensured that some of the effects of Goldberg were relatively short-lived. If due process in the form a “fair-hearing” was required to terminate welfare benefits, what else would due process have to be applied to? The
Due Process Revolution helped reign in the reach of Goldberg. The 3-prong approach articulated in XXXXXX was subsequently narrowed when courts began focusing on rooted legal traditions instead of procedural checklist.

From the 1930s to 1970 court ruling during the Civil Rights Movement struck down many of the laws that disqualified individuals thus creating new categories of people eligible for benefits (able bodied adults, and two-parent families)
In the Mid 1990’s, states began significant work-related reform initiatives, a process that was accelerated by the passage of the Personal Responsibility and Work
Opportunity Act in 1996.
The War on Poverty created an expensive welfare system that encouraged dependence and discouraged employment

The Personal Responsibility and Work Opportunity Act of 1996 (PRWORA)
• The bill was signed into law on August 22, 1996 and represented a fundamental shift in federal assistance to the poor
• The bill added a workforce development component that was seen as a
“reassertion of America’s work ethic.”
• Notions of the “deserving” and “undeserving” poor
• Attitudes towards women had changed (single mothers were encouraged to be more like their non-poor counterparts.)
• People thought that the poor were becoming too dependent on public assistance and lacked incentive to seek employment

Goldberg highlighted for the court that due process has costs as well as benefits. Goldberg also reminded the court of its role in ensuring fair and just outcomes.
Academics criticize Goldberg for not doing enough. Some Say
1. Goldberg didn’t go far enough
2. Goldberg harmed social service workers in their ability to do their job by undermining their authority
3. Goldberg did not restrain administrative rulemaking in a way that was beneficial to recipients
Although not perfect, Goldberg set the tone for the due process conversation. It asks us to consider the resources of each party to the litigation, the potential for risk or harm to each party, and the adequacy of current or substitute procedures when terminating benefits

1 st “Causes of action are not fixed concepts”
2 nd “Just outcomes depend on adequate process and offers a framework for what constitute due process” “Goldberg is a part of a series of cases that resulted in a “due process” revolution that obligated administrative agencies to follow a format made familiar by the courts.”
3 rd “Goldberg is a part of a series of cases that resulted in a “due process” revolution that obligated administrative agencies to follow a format made familiar by the courts.”
4 th The disagreement between the majority dissent highlight a debate in American law; the role of the courts and the legislature in articulating rights, establishing remedies, and assessing the values, costs, and benefits of both.
5 th The problem of creating a uniform body of rules and regulations while addressing the specific needs of the individual