Faircloth v. Family Independence Agency
Faircloth v. Family Independence Agency
Opinion of the Court
In this action challenging the standard for considering applications for state disability assistance program (SDA) benefits during fiscal years 1991-92 and 1992-93, defendants appeal by right the order granting plaintiffs supplemental relief. The trial court found defendants’ policy regarding sda eligibility invalid because it constituted a rule that should have been promulgated under the Administrative Procedures Act (APA), MCL 24.201 et seq.-, MSA 3.560(101) et seq. It also determined that defendants’ policy violated the plain meaning of the appropriations acts for fiscal years 1991-92 and 1992-93, 1991 PA 111 and 1992 PA 168. We hold that the policy regarding sda eligibility was an interpretive statement that need not have been promulgated as a rule under the APA and that defendants correctly construed the language of the appropriations acts. We therefore reverse and remand for entry of judgment for defendants.
1. underlying facts and procedural history
The state provided welfare benefits under a general assistance program (ga) administered by the Department of Social Services
1991 PA 111, § 805 provided in pertinent part as follows:
(1) The department of social services shall operate a state disability assistance program. Persons eligible for this program shall include needy persons 18 years of age or older, or emancipated minors, who meet 1 or more of the following requirements:
(a) A recipient of supplemental security income, social security, or medical assistance due to disability.
(b) A person who is medically diagnosed as incapacitated and unavailable for work for at least 90 days.
(c) A resident of adult foster care, home for the aged, county infirmary or substance abuse treatment center.
(d) A person receiving 30-day postresidential substance abuse treatment.
(e) A person diagnosed as having acquired immune-deficiency syndrome or acquired immune-deficiency syndrome related complex.
(f) A person receiving special education services through the local intermediate school district.
(g) A pregnant woman.
(h) A caretaker of a disabled person as defined in subsections (a), (b), (e), or (f) above.
Contemporaneous with the legislative action, defendants developed a policy for determining eligibility under subsection 805(1) (b). The policy provided as follows under the heading “Standard for Determining Disability”:
Clients are medically eligible for State Disability Assistance if they are medically eligible for ma [medical assistance] based on disability or blindness or if they have a physical and/or mental impairment or combination of*397 impairments which prevents the performance of any remunerative work for 90 days or more.
The policy further defined the term “work” as “[a]ny work or work activity usually done for remuneration.” Defendants continued the policy during fiscal year 1992-93 because the Legislature included identical language in subsection 805(l)(b) of that year’s appropriations act. 1992 PA 168, subsection 805(l)(b). The Legislature, however, modified the language of subsection 805(l)(b) for fiscal year 1993-94 to provide benefits for “[a] person with a physical or mental impairment other than substance abuse which meets federal ssi disability standards, except that the minimum duration of the disability shall be 90 days.” 1993 PA 186, subsection 805(l)(b). Accordingly, defendants discontinued the policy for determining disability under subsection 805(l)(b).
In February 1992, in response to defendants’ implementation of the policy, plaintiffs, former recipients of assistance under the GA program, commenced this action seeking certification of a class action and declaratory and injunctive relief. Plaintiffs alleged that defendants’ policy was invalid because the internal criteria for determining eligibility under subsection 805(l)(b) was not promulgated as a rule under the APA and the policy excluded applicants who fell within the scope of subsection 805(l)(b). The trial court subsequently denied, without prejudice, plaintiffs’ motion to certify a class.
Defendants and plaintiffs filed cross-motions for summary disposition of plaintiffs’ claims under MCR 2.116(C)(10) in March 1993. The trial court granted partial summary disposition for plaintiffs on June 8,
The policy for determining eligibility for sda benefits — • and this is a finding of the Court — is a rule, and should have been promulgated as a rule under the Michigan Administrative Procedures Act.
The interpretive statement exception has been narrowly construed by the courts, and requires that a statement be merely be [sic] explanatory.
This policy goes beyond explanatory. It essentially eliminated the medically diagnosed requirement altogether and went on to offer a restricted definition of incapacitated, as an impairment which prevents the performance of any remunerative work for 90 days or more. The plain meaning of incapacitated would certainly encompass more than this.
The policy in question had the full force and effect of law, and was used to determine whether a person was eligible for sda benefits.
The preferred method of policy making is through the process of promulgation of rules. This policy clearly affected the status quo, and those affected by it should have been given an opportunity to be heard.
The Court also finds that the argument that this is somehow an exception to the Administrative Procedures Act because it falls underneath the — a broad boilerplate language of the Social Services Act, is also not adopted by the Court.
Therefore, the Court grants summary disposition to the Plaintiffs on Counts 12, 17, 18, and 21, finding that the definition as applied was violative of the Michigan Administrative Procedures Act and also in violation of the authorizing statute.
The court took under advisement the issue whether to grant further relief, but certified its declaratory rulings as “final” for purposes of appeal.
The trial court took the motion under advisement after a hearing in July 1995. Nine months later, the court ruled that it would use its general power to fashion a specific remedy to enforce its declaratory judgment. Noting that defendants had not developed an alternate standard for determining disability, the court directed that they use the SSI standard because it was the only “coherent” standard, it reasonably effectuated the Legislature’s intent, and defendants had expertise in using it. Next, the court recognized that personal notice to all rejected applicants was impractical, but concluded that defendants could provide reasonable notice through the mass media and the inclusion of written materials in food stamp mailings. Therefore, the court ordered that defendants (1) include written notices and application forms in food stamp mailings during August 1996, (2) air public service announcements in the top seven television markets not less than five times in prime time during the
Defendants moved for reconsideration, requesting that the court amend its order to allow them to send a preapplication to all food stamp recipients in a separate mailing, which applicants could then present to the Family Independence Agency (fta) for a full application. Defendants further requested that the court reconsider the method of providing notice because radio and television stations would not agree to air the public service announcements during the court-ordered period and some television stations would not sell air time for the announcements. The court denied defendants’ motion for reconsideration, but extended the period for defendants to notify rejected applicants and redetermine eligibility and shifted the public service announcements to the first two weeks of November 1996. This Court, however, stayed further proceedings pending resolution of this appeal.
n. JURISDICTION
We reject plaintiffs’ initial contention that this Court lacks jurisdiction over the trial court’s June 8, 1994, order granting partial summary disposition because defendants did not timely claim an appeal from that order. The trial court certified its order granting partial summary disposition as a “final judg
m. THE APA
Defendants argue that the trial court erred in finding their policy invalid because it was not promulgated as a rule under the apa. We agree. We review this question of law de novo. Watson v Bureau of
The fia is subject to the rule-promulgation requirements of the apa.
[A] “rule” is: (1) “an agency regulation, statement, standard, policy, ruling, or instruction of general applicability,” (2) “that implements or applies law enforced or administered by the agency, or that prescribes the organization, procedure, or practice of the agency . . . .”
The statute further provides, however, that a “rule” does not include, among other enumerated exceptions, “[a] form with instructions, an interpretive statement, a guideline, an informational pamphlet, or other material that in itself does not have the force and effect of law but is merely explanatory.” MCL 24.207(h); MSA 3.560(107)(h).
We conclude that defendants’ policy was an interpretive statement, not a rule subject to the promulgation requirements of the APA, because it merely explained the language of the appropriations acts. We reject plaintiffs’ argument that the policy constituted a rule because it altered the status quo and substantially affected the rights of the general public.
Before 1991, the Legislature appropriated monies to fund a GA program administered by the DSS in accordance with DSS rules and procedures. MCL 400.14; MSA 16.414, MCL 400.18; MSA 16.418. The Legislature did not dictate who was eligible for the program. See, e.g., 1990 PA 200. In funding the SDA program, how
Plaintiffs further mistakenly argue that defendants were required to promulgate their policy as a rule because it conflicted with the provision of the appropriations acts that it purportedly explained. Even assuming, arguendo, that the policy is more restiic
An interpretation not supported by the enabling act is an invalid interpretation, not a rule. Otherwise, “wrong” interpretive statements might become rules with the force of law on the false premise that they were promulgated in accordance with the apa procedures. “[B]ecause a reviewing court disagrees with an agency interpretation does not render it legislative.”
Therefore, we conclude that that trial court erred in holding that defendants’ policy was invalid because it was not promulgated as a rule under the apa.
rv. SUBSECTION 805(1)(B) OF THE APPROPRIATIONS ACTS
Defendants next argue that the trial court erred in determining that their policy conflicted with the language of the appropriations acts. We agree. This Court reviews questions of law, including statutory interpretation, de novo. Watson, supra at 644. Although it remains our responsibility to determine the meaning of the statute, we give “appropriate deference” to the agency’s interpretation. See General Motors Corp, supra, 93 Mich App 373-374. This Court ordinarily defers to the construction of a statute by the agency charged with applying it unless the interpretation is “clearly wrong.” Jones-Jennings v Hutzel Hosp (On Remand), 223 Mich App 94, 105; 565 NW2d 680 (1997).
In construing a statute, our purpose is to ascertain the reasonable meaning of the specific language of the statute. Cf. Gross v General Motors Corp, 448 Mich 147, 158-159; 528 NW2d 707 (1995); Mahrle v Danke, 216 Mich App 343, 348; 549 NW2d 56 (1996); see, generally, Scalia, A Matter of Interpretation: Federal Courts & the Law (Princeton, NJ: Princeton University Press, 1997), pp 23-25. Judicial construction is not permitted where the plain and ordinary meaning of the statutory language is clear. Ruff v Isaac, 226 Mich App 1, 8; 573 NW2d 55 (1997); Watson, supra at 644.
In this case, the trial court erred in concluding that defendants’ policy violated the plain meaning of the appropriations acts. Defendants’ policy interpreted 1991 PA 111, subsection 805(l)(b) and 1992 PA 168, subsection 805(l)(b), which provided that a “person who [was] medically diagnosed as incapacitated and unavailable for work for at least 90 days” was eligible to receive sda benefits. Defendants’ policy explained this language under the heading “Standard for Determining Disability”:
Clients are medically eligible for State Disability Assistance if they are medically eligible for ma based on disability or blindness or if they have a physical and/or mental impairment or combination of impairments which prevents the performance of any remunerative work for 90 days or more.
The policy further defined the term “work” as “[a]ny work or work activity usually done for remuneration.” We reject plaintiffs’ argument that since a person who receives ssi, social security, or medical assis
We likewise reject plaintiffs’ contention that the remaining subsections of subsection 805(1) of the appropriations acts evince the Legislature’s intent that subsection 805(l)(b) encompass applicants who are capable of performing some work, but cannot meet
We also decline to construe the instant statutory language as creating a “significantly” or “substantially” incapacitated standard where the Legislature did not employ that language. It is well established that “[w]e eschew the insertion of words in statutes unless necessary to give intelligible meaning or to prevent absurdity, without regard to our own estimate of the wisdom of the legislation.” Great Lakes Steel Corp v Employment Security Comm, 6 Mich App 656, 661-662; 150 NW2d 547 (1967), aff’d 381 Mich 249 (1968). Here, the Legislature has used these very adverbs in other statutes to signify something less than a total- or complete-impairment standard. See, e.g., MCL 257.39a; MSA 9.1839(1) (defining “permanent handicap” for purposes of the Michigan Vehicle Code), MCL 330.2001a(5); MSA 14.800(1001a)(5) (defining “mental illness” for purposes of chapter 10 of the Mental Health Code), MCL 440.2608(1); MSA 19.2608(1) (governing a buyer’s right to revoke his acceptance of nonconforming goods under the Uniform Commercial Code), and MCL 257.1403(3)(a);
We further decline plaintiffs’ invitation to follow the federal courts’ construction of the Social Security Act when determining the reasonable meaning of the Michigan sda provision. As plaintiffs correctly note, this Court, like the federal courts, would hold invalid agency rules that impose higher standards for disability than set forth in the act. See Sullivan v Zebley, 493 US 521; 110 S Ct 885; 107 L Ed 2d 967 (1990). Unlike the appropriations acts involved in this case, however, the Social Security Act explicitly grants SSI benefits to people who are unable to engage in “any substantial gainful activity.” The act also mandates the consideration of vocational factors. 42 USC 1382c(a)(3). Like Congress in drafting the Social Security Act, our Legislature has evinced its intent that a determination of disability or incapacitation include the consideration of vocational factors by expressly so providing within the language of a statute. For instance, in the Worker’s Disability Compensation Act, the Legislature defined the term “disability” as a “limitation of an employee’s wage earning capacity in work suitable to his or her qualifications and training resulting from a personal injury or work related disease.” MCL 418.301(4); MSA 17.237(301)(4). This Court has also held that the Legislature signaled its intent to consider vocational fac
Thus, the trial court erred in holding that defendants’ policy violated the plain meaning of the appropriations acts. Importantly, it is not for the courts to debate the wisdom or public policy of this legislation. Nummer v Dep’t of Treasury, 448 Mich 534, 553, n 22; 533 NW2d 250 (1995); see Ready-Power Co v Dearborn, 336 Mich 519, 525; 58 NW2d 904 (1953). We do not do so here. Our function is to construe the language of the appropriations acts as it exists, not to legislate. Morgan v Taylor, 434 Mich 180, 192; 451 NW2d 852 (1990). Giving the terms “incapacitated,” “unavailable,” and “work” their common meanings, subsection 805(l)(b) does not take into account vocational factors such as age, education, and previous work experience. As such, an applicant’s capacity to work for purposes of subsection 805(l)(b) is not measured by a minimum number of hours that he is able to sustain work activity or a minimum remunerative standard. Accordingly, defendants correctly interpreted subsection 805(l)(b) as requiring an inability to perform any work.
Even if we concluded that the language of the appropriations acts was ambiguous, we would defer to the agency’s interpretation because the Legislature approved defendants’ policy for determining eligibility under 1991 PA 111, subsection 805(l)(b) when it enacted 1992 PA 168, subsection 805(l)(b), which contained the identical language contained in 1991 PA 111, subsection 805(l)(b). While plaintiffs correctly note that a failed attempt to amend a statute is ordinarily not evidence of legislative approval of an agency’s construction, see Rogers v Detroit, 457 Mich 125, 162-164; 579 NW2d 840 (1998) (Taylor, J. dissenting), the Legislature is presumed to know of the agency’s construction of a statute and adopts such a construction when it reenacts the language so construed. See Canterbury Health Care, Inc v Dep’t of Treasury, 220 Mich App 23, 30; 558 NW2d 444 (1996). Welfare legislation presents an unusual application of these principles because the Legislature must reestablish the SDA program each year by appropriating funds for the program in a line item of the FLA budget. See Saxon v Dep’t of Social Services, 191 Mich App 689, 699-700; 479 NW2d 361 (1991). Thus, the Legislature’s inclusion of the same language in subsection 805(l)(b) of 1992 PA 168 was not a failed attempt to amend an act, but, rather, constituted the reenactment of the language construed by defendants as requiring that a claimant be incapable of any remunerative work.
Plaintiffs mistakenly argue that the Legislature’s decision to modify subsection 805(l)(b) and mandate the use of the SSI standard during fiscal year 1993-94, 1993 PA 186, signaled the disapproval of defendants’
In light of our determination that the trial court erred in declaring defendants’ policy invalid, we do not address defendants’ remaining arguments.
Reversed and remanded. We do not retain jurisdiction.
In 1995, the Legislature abolished the dss effective March 28, 1996, and transferred its duties to the newly created Family Independence Agency. MCL 400.1 et seq.; MSA 16.401 et seq.
The Michigan Supreme Court amended the court rule to eliminate this procedure in May 1995, effective July 1995. The current version of MCR 2.604 only permits certification of an otherwise nonfinal order as a final order in receivership and other similar actions.
Defendants improperly rely on Comrn’r of Ins v Advisory Board of the Michigan State Accident Fund, 173 Mich App 566; 434 NW2d 433 (1988), for the proposition that they may either appeal by right from an order certified as final or wait until the final judgment to challenge that order. This Court has repudiated the Accident Fund interpretation of this Court’s jurisdiction under MCR 7.203. Adams v Perry Furniture Co (On Remand), 198 Mich App 1, 8; 497 NW2d 514 (1993); Klco v Dynamic Training Corp, 192 Mich App 39, 41; 480 NW2d 596 (1991).
MCL 400.6(1); MSA 16.406(1) grants the fía the power to promulgate “rules necessary or desirable for the administration of programs under [the Social Welfare Act].” Under MCL 400.1b(l); MSA 16.401(2)(1), the annual appropriations acts involved in this case are considered “as a time-limited addendum to th[e] act.” Therefore, the ha and its predecessor, the dss, had the power to promulgate rules to administer the sda program.
We reject defendants’ contention that under Blank v Dep’t of Corrections, 222 Mich App 385, 392; 564 NW2d 130 (1997), lv gtd 459 Mich 878 (1998), the trial court erred in concluding that they violated the apa In Blank, supra at 392-401, this Court held that §§ 45 and 46 of the apa, MCL 24.245; MSA 3.560(145), MCL 24.246; MSA 3.560(146), requiring legislative approval for agency rules, are unconstitutional. This Court, however, found the remaining portion of the apa enforceable because §§45 and 46 could be severed from the apa without interfering with the valid object of the act. Blank, supra at 401-402. In this case, defendants did not comply with any of the requirements for promulgating rules, not merely the provisions held unconstitutional in Blank. Accordingly, Blank is not controlling. In the event defendants’ policy constituted a rule, it is invalid for failure to comply with those apa rule-promulgation procedures that survived Blank. See Clonlara, Inc v State Bd of Ed, 442 Mich 230, 239; 501 NW2d 88 (1993).
Plaintiffs do not argue that defendants’ policy was a “guideline” for purposes of the apa. A guideline is “an agency statement or declaration of policy which the agency intends to follow, which does not have the force or effect of law, and which binds the agency but does not bind any other person.” MCL 24.203(6); MSA 3.560(103)(6). To promulgate a guideline, the agency must provide notice to the joint committee, the Legislative Service Bureau, the Governor and “each person who requested the agency in writing for advanced notice of proposed action which may affect the person,” and provide a sixty-day period for written comment. MCL 24.224(1); MSA 3.560(124)(1). Plaintiffs, however, have abandoned the issue whether defendants’ policy is invalid because it was not promulgated as a guideline by not raising it on appeal. See Phinney v Perlmutter, 222 Mich App 513, 544; 564 NW2d 532 (1997), and Joerger v Gordon Food Service, Inc, 224 Mich App 167, 172; 568 NW2d 365 (1997).
By contrast, this Court applies a three-part test to determine the validity of an agency’s rules. The rules must be within the matter covered by the enabling statute, must comply with the underlying legislative intent, and must not be arbitrary or capricious. Luttrell v Dep’t of Corrections, 421 Mich 93, 100; 365 NW2d 74 (1984); Binsfeld v Dep’t of Natural Resources, 173 Mich App 779, 785-786; 434 NW2d 245 (1988).
The new subsection 805(l)(b) for fiscal year 1993-94 was not technically an amendment because the previous subsection 805(l)(b) expired at the end of fiscal year 1992-93.
Defendants additionally argue that plaintiffs failed to exhaust their administrative remedies before initiating this action and that the trial court erred in granting plaintiffs supplemental relief.
Concurring in Part
{concurring in part and dissenting in part). I join in parts n and in of the majority opinion. I dissent from part iv, however, because I believe that defendants’ interpretation of 1991 PA 111, subsection 805(l)(b) resulted in an unjustifiably restrictive standard of eligibility for disability benefits that was contrary to the intent of the Legislature.
Subsection 805(l)(b) provides that persons eligible for the state disability program include “[a] person who is medically diagnosed as incapacitated and unavailable for work for at least 90 days.” To determine eligibility under this provision, the Department of Social Services (dss) developed the following policy:
Clients are medically eligible for State Disability Assistance if they are medically eligible for ma [medical assistance] based on disability or blindness or if they have a physical and/or mental impairment or combination of impairments which prevents the performance of any remunerative work for 90 days or more.
Defendants defined the term “work” as “[a]ny work or work activity usually done for remuneration.”
General rules of statutory construction provide that if the plain and ordinary language of a statute is clear, judicial construction is neither necessary nor permitted. Meyer Jewelry Co v Johnson, 229 Mich App 177, 180; 581 NW2d 734 (1998). However, if a literal construction of a statute would produce unreasonable and unjust results inconsistent with the purpose of the statute, the court may depart from a literal construction. Rowell v Security Steel Processing Co, 445 Mich 347, 354; 518 NW2d 409 (1994).
Thus, according to defendants, the Legislature intended the following anomaly. Pursuant to 1991 PA 111, subsection 805(l)(a), a recipient of supplemental security income (ssi) is eligible for benefits. A person is disabled for ssi purposes if he is unable to engage in “substantial gainful activity” because of an impairment that lasts for one year or more. 42 USC 1382c(a)(3)(A). However, under 1991 PA 111, subsection 805(l)(b), a person who is disabled for more than ninety days but less than one year can receive benefits only if he is completely unable to perform any amount of work for any amount of compensation.
Furthermore, statutory provisions should be construed in light of other related provisions to carry out the purpose of the Legislature. Farrington v Total Petroleum, Inc, 442 Mich 201, 209; 501 NW2d 76 (1993). The remaining subsections of subsection 805(1) support a broader reading of the disability standard contained in subsection 805(l)(b). 1991 PA 111 authorized benefits for people receiving thirty-day substance-abuse treatment, AIDS sufferers, recipients
In approving defendants’ interpretation of the statute, the majority relies on the fact that the Legislature reenacted § 805 for the 1992-93 fiscal year, 1992 PA 168, despite the fact that the Legislature adopted the SSI standard for the 1993-94 fiscal year, 1993 PA 186. The rules of statutory construction provide that a longstanding, consistent administrative interpretation of a statute by those charged with its execution is entitled to considerable weight and ought not be overruled without cogent reasons. Ludington Service Corp v Acting Comm’r of Ins, 444 Mich 481, 490; 511 NW2d 661 (1994). However, defendants’ interpretation of the legislative provision at issue is not longstanding and is therefore entitled to less weight. Given the realties of the legislative process, I do not find the single reenactment of subsection 805(l)(b) to be a dispositive indicator of the Legislature’s intent.
I would affirm the trial court’s grant of plaintiffs’ motion for summary disposition.
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