Mary LeBLANC, Plaintiff and Respondent, v. DIRECTOR, DEPT. OF SOCIAL WELFARE, State of California, Defendant and Appellant.
Respondent Mary LeBlanc applied for benefits under the Aid to Needy Disabled (ATD) program. The medical review team approved respondent's application in December 1969 and classified her as a group 2 recipient.1 Respondent was found unable to function either as a jobholder or as a homemaker. Medical experts diagnosed respondent as suffering from numerous physical or psychiatric disorders including involuntary depressive reaction, hypertension, bronchitis, ulcer, rhinitis. In 1971, the state medical review team, reviewing statements of two physicians who had examined respondent determined that she was capable of employment and her benefits under ATD were terminated.
Respondent filed a petition for writ of mandate. The trial court granted respondent's writ, holding ‘that the decision . . . is not supported by substantial evidence and that petitioner's disability is established by substantial evidence, thus establishing said disability as a matter of law.’ The Director of the Department of Social Welfare appeals from the judgment.
The parties have argued at length regarding the proper standard of judicial review in a mandamus proceeding to set aside a decision terminating welfare assistance. Appellant claims that the state's public assistance programs will not be in conformity with federal requirements if an independent judicial review of administrative decisions were authorized. States which elect to receive federal aid for their public assistance programs must comply with the directives and reasonable regulations of the Department of Health, Education and Welfare (hereinafter HEW). (42 U.S.C., § 1352; Arizona St. Dept. of Pub. W. v. Department of Health, E. & W., 449 F.2d 456, 460–461, cert. den. 405 U.S. 919, 92 S.Ct. 945, 30 L.Ed.2d 789; Pearson v. State Social Welfare Board, 54 Cal.2d 184, 215, 5 Cal.Rptr. 553, 353 P.2d 33.) ‘The California acts were adopted or amended for the purpose of operating in harmony with the federal system with a view to obtaining federal assistance in providing such aid to needy persons . . .’ (Pearson v. State Social Welfare Board, supra, 54 Cal.2d at p. 214, 5 Cal.Rptr. at p. 571, 353 P.2d at p. 51; see Welf. & Inst.Code, §§ 10600, 10609).
The federal statute requires the state to establish a single state agency to administer the program of aid to the permanently and totally disabled (ATD). (42 U.S.C., § 1352, subd. (a)(3).) While the legislative history behind section 1352 is inconclusive, HEW has ruled, pursuant to its statutory authority (42 U.S.C., § 1302), that the single state agency requirement precludes a de novo review of an administrative determination of entitlement to aid. 45 C.F.R., section 205.100, subdivision (b)(2) provides: ‘In the event that any rules and regulations or decisions of the single State agency are subject to review, clearance, or other action by other offices or agencies of the State government, the requisite authority of the single State agency would not be impaired.’ Subdivision (b)(3) of that section provides that ‘. . . other State or local agencies or offices . . . must not have authority to review, change, or disapprove any administrative decision of a single State agency, or otherwise substitute the judgment for that of the agency as to the application of policies, rules, and regulations promulgated by the State agency.’ The regulations have been construed to prohibit an independent judicial review of findings made by the state agency. Paragraph 2300, part II of the HEW, Handbook of Public Assistance Administration provides: ‘The State agency is also subject to judicial procedures but they must be such that the functions of the ‘single [s]tate agency,’ as the administrative body, are not impaired. The finding of facts regarding eligibility, for example, is an administrative function. The courts may properly hold that the State agency has incorrectly applied the law to the facts, or that its findings are arbitrary, capricious, or unreasonable, or are based on insufficient evidence. However, the determination of facts regarding eligibility is a function of the administrative agency and when the evidence is not complete, the State agency is responsible for developing additional evidence and further findings. In such situations, the case is returned to the State agency through a remand by the court.'
Provisions of the HEW, Handbook of Public Assistance Administration have the force and effect of law (Like v. Carter, 448 F.2d 798, 803, cert. den. 405 U.S. 1045, 92 S.Ct. 1309, 31 L.Ed.2d 588; see also Rodriquez v. Swank, 318 F.Supp. 289, 295, affirmed 403 U.S. 901, 91 S.Ct. 2202, 29 L.Ed.2d 677; Pearson v. State Social Welfare Board, supra, 54 Cal.2d at p. 215, 5 Cal.Rptr. 553, 353 P.2d 33 [Handbook relied on in decision]) except to the extent that they are inconsistent with the federal statutes (see Townsend v. Swank, 404 U.S. 282, 286, 92 S.Ct. 502, 30 L.Ed.2d 448; King v. Smith, 392 U.S. 309, 333, fn. 34, 88 S.Ct. 2128, 20 L.Ed.2d 1118; Zunino v. Carleson, 33 Cal.App.3d 36, 42, 108 Cal.Rptr. 769). The court may also take judicial notice2 that HEW will regard the authorization of independent judicial review as inconsistent with federal regulations. Failure to comply with federal requirements may lead to protracted litigation with and sanctions by, the HEW. (See Arizona St. Dept. of Pub. W. v. Department of Health, E. & W., supra, 449 F.2d at p. 461.)3 Although the ATD program has been taken over by the federal government as of January 1, 1974 (see 42 U.S.C., §§ 1352, 1381 et seq.), the single state agency requirement remains in full force in the Aid To Families With Dependent Children program. (42 U.S.C., § 602, subd. (a)(3); Welf. & Inst.Code, § 11200 et seq.) Thus, if we were to hold that a de novo judicial review is available under Welfare and Institutions Code section 10962 and Code of Civil Procedure section 1094.5, the conformity problem would also arise as to that program. It is therefore of vital importance to avert a conflict between federal and state law.
Respondent claims that certain congressional hearings evince a legislative purpose to allow states to define the scope of judicial review in administering public assistance programs. (See House Ways and Means Committee, Hearings on HR 4120 (1935) 74th Congress, 1st Session, pp. 152–154.) However, the passage only suggests that Congress had intended to defer to state standards of judicial review in unemployment insurance cases. In the absence of any legislative intent to the contrary, it must be assumed that the regulations promulgated by HEW are valid.
Aside from the conformity problems which would be raised if a de novo review were authorized, respondent has not shown that she has vested rights to continuing assistance.
The rule requiring an independent judicial review of findings made by an administrative agency is based on the constitutional doctrine of separation of powers. (Cal.Const., art. III, § 3, art. VI, § 1; Bixby v. Pierno, 4 Cal.3d 130, 141, 93 Cal.Rptr. 234, 481 P.2d 242; Strumsky v. San Diego County Employees Retirement Assn., 11 Cal.3d 28, 35–37, 112 Cal.Rptr. 805, 520 P.2d 29.) Since the Department of Social Welfare is a statewide agency of legislative creation (see Bertch v. Social Welfare Dept., 45 Cal.2d 524, 529, 289 P.2d 485), the independent judgment rule controls if a decision of the department affects a fundamentally vested right. (Bixby v. Pierno, supra, 4 Cal.3d at p. 144, 93 Cal.Rptr. 234, 481 P.2d 242; Strumsky v. San Diego County Employees Retirement Assn., supra, 11 Cal.3d at p. 34, 112 Cal.Rptr. 805, 520 P.2d 29.)
Although it has been held that a welfare applicant does not have vested rights to aid (see County of Contra Costa v. Social Welfare Board, 199 Cal.App.2d 468, 469, 473, 18 Cal.Rptr. 573), that conclusion has been questioned in a recent case. In Taylor v. Martin, 28 Cal.App.3d 1057, 105 Cal.Rptr. 211, the court suggested that the independent judgment rule would apply in a case involving termination of payments. (28 Cal.App.3d at p. 1059, 105 Cal.Rptr. 211 [dictum].) There is no basis for asserting, however, that a recipient to aid necessarily has any greater rights to assistance than an applicant. While holders of licenses, as opposed to applicants, have been held to possess vested rights (compare Drummey v. State Board of Funeral Directors, 13 Cal.2d 75, 87 P.2d 848, with McDonough v. Goodcell, 13 Cal.2d 741, 91 P.2d 1035), these cases have been rationalized on the ground that ‘[c]ourts are relatively ill-equipped to determine whether an individual would be qualified . . . to practice a particular profession or trade.’ (Bixby v. Pierno, supra, 4 Cal.3d at p. 146, 93 Cal.Rptr. at p. 245, 481 P.2d at p. 253.) Since no special expertise is required to determine a person's entitlement to public assistance, it would be unwise to extend the rationale of the licensing cases to the present case.
On the contrary, the Strumsky case underscores the need to look behind the form of adverse administrative decisions in determining whether a vested right is at stake. In Strumsky, the petitioner was an unsuccessful applicant for a service-connected death allowance (11 Cal.3d at pp. 32–34, 112 Cal.Rptr. 805, 520 P.2d 29.) The Supreme Court nonetheless concluded that the petitioner had a vested statutory right to an allowance upon the death of her husband, regardless of whether it was service-connected or not (11 Cal.3d at pp. 45–46, 112 Cal.Rptr. 805, 520 P.2d 29.). The court did not deem it significant that she was a mere applicant for the allowance (cf. dissenting opinion of Justice Burke, 11 Cal.3d at p. 55, 112 Cal.Rptr. 805, 520 P.2d 29). The Strumsky case, therefore, suggests that the peculiar form of an administrative decision does not necessarily determine whether a vested right is affected. The fact that respondent had been receiving aid prior to the adverse agency decisions does not require the conclusion that she was divested of a vested right.
The courts have not defined the term ‘vested rights' in any meaningful sense. In Bertch v. Social Welfare Dept., supra, 45 Cal.2d at p. 529, 289 P.2d 485, a vested right was defined as ‘an existing valuable privilege.’ In Adoption of Graham, 58 Cal.2d 899, 905, 27 Cal.Rptr. 163, 377 P.2d 275, the court stated that the term was used to designate a right which had become so fixed that it was not subject to be divested without the consent of the owner. In Bixby v. Pierno, supra, 4 Cal.3d at page 146, 93 Cal.Rptr. 234, 481 P.2d 242, a vested right was defined as one which was ‘already possessed by the individual.’ None of these definitions provides any formula for determining whether a vested right exists in a given case. In the last analysis, it is fair to say that a vested right is simply an interest which the state sees fit to recognize and protect according to the peculiar circumstances of the case. (See Miller v. McKenna, 23 Cal.2d 774, 783, 147 P.2d 531; cf. Bixby v. Pierno, supra, 4 Cal.3d at p. 144, 93 Cal.Rptr. 234, 481 P.2d 242.) In every case in which vested rights are claimed, therefore, the courts must identify the source of the claimed right and determine whether that interest is worthy of special protection.
Vested rights may be acquired by contract (see Reed v. City Council of City of Roseville, 60 Cal.App.2d 628, 636, 141 P.2d 459; cf. Bixby v. Pierno, supra, 4 Cal.3d at pp. 147–148, 93 Cal.Rptr. 234, 481 P.2d 242), by statute (Strumsky v. San Diego Employees Retirement Assn., supra, 11 Cal.3d at p. 33, 112 Cal.Rptr. 805, 520 P.2d 29), by professional licenses (Laisne v. Cal. St. Bd. of Optometry, 19 Cal.2d 831, 835, 123 P.2d 457), or by the laws of property (see Temescal Water Co. v. Dept. of Public Works, 44 Cal.2d 90, 280 P.2d 1). In the present case, the extent to which a right to continuing assistance is vested depends on the statutory provisions governing the ATD program. (Cf. Goldberg v. Kelly, 397 U.S. 254, 262, 90 S.Ct. 1011, 25 L.Ed.2d 287; Biffle v. Social Welfare Board, 104 Cal.App.2d 446, 452, 231 P.2d 869.)
Welfare and Institutions Code section 13502 provides: ‘All aid granted under the provisions of this chapter is granted and held subject to the provisions of any law hereafter enacted amending, repealing, or supplementing in whole or in part the provisions of this chapter, and subject to the rules and regulations of the department. No recipient under this chapter shall have any claim for compensation or otherwise because his aid is affected in any way by any such amending, repealing, or supplemental act, or by any such rule or regulation or by any addition, amendment, or repeal of such rules and regulations.’ Welfare and Institutions Code section 13750 provides: ‘The county, at any time when it appears to its satisfaction after investigation, that a person is receiving aid to which he is not entitled, or receiving aid in a greater or lesser amount than he should receive, may cancel, suspend, revoke, increase, or decrease such aid as the case may warrant under the terms of this chapter and the rules and regulations made thereunder.’
Taken together, the two statutes indicate that the Legislature had not intended to confer vested rights to future assistance to recipients. Respondent could not seriously contend, for example, that she has vested rights to future assistance from the state notwithstanding the repeal of the state ATD program. (Cf. County of Los Angeles v. Jessup, 11 Cal.2d 273, 282, 78 P.2d 1131; Cox v. State Social Welfare Board, 193 Cal.App.2d 708, 718, 14 Cal.Rptr. 776; Kelley v. State Board of Social Welfare, 82 Cal.App.2d 627, 632, 186 P.2d 429.) Indeed, the state statutory scheme would not conform to the federal act if it permitted recipients to acquire vested rights to future aid, since periodic review of a recipient's eligibility is required under federal law. (See 42 U.S.C., § 1355, subd. 4; 45 C.F.R., § 233.80, subd. (a)(2).) Bearing in mind that the California acts were adopted for the purpose of operating in harmony with the federal system (Pearson v. State Social Welfare Board, supra, 54 Cal.2d at p. 214, 5 Cal.Rptr. 553, 353 P.2d 33), we conclude that respondent possesses no vested rights to future assistance. Hence, the trial judge acted correctly in applying the substantial evidence rule.
Respondent urges this court to promulgate a standard of review which would require trial courts to examine whether an administrative decision is supported by the weight of the evidence. However attractive this theory might be in the field of scholarly debate (see 4 Davis, Administrative Law Treatise, § 29.07, p. 153), it is not the law in California. Under Code of Civil Procedure section 1094.5, the courts cannot reweigh the evidence (So. Cal. Jockey Club v. Cal. etc. Racing Bd., 36 Cal.2d 167, 175, 223 P.2d 1; Johnson Rancho County Water Dist. v. State Water Rights Board, 235 Cal.App.2d 863, 866, 45 Cal.Rptr. 589), unless the independent judgment test applies. (See Merrill v. Department of Motor Vehicles, 71 Cal.2d 907, 914, 80 Cal.Rptr. 89, 458 P.2d 33; see also Bixby v. Pierno, supra, 4 Cal.3d at p. 143, fn. 10, 93 Cal.Rptr. 234, 481 P.2d 242.) In applying the substantial evidence test, the courts may consider only the evidence supporting the administrative decision and disregard the rest. (Thompson v. City of Long Beach, 41 Cal.2d 235, 241, 259 P.2d 649; American Federation of Teachers v. San Lorenzo Etc. Sch. Dist., 276 Cal.App.2d 132, 135, 80 Cal.Rptr. 758.)
The director's decision was not supported by substantial evidence. Mrs. LeBlanc was originally declared eligible for ATD benefits on the basis of three medical reports. Dr. John Weaver found that Mrs. LeBlanc was suffering from chronic allergic rhinitis, sinusitis, hypertension, bronchitis, ulcers and exogenous obesity. He anticipated ‘little if any change in these conditions, all of which are chronic.’ Dr. Weaver agreed with the diagnosis of Mrs. LeBlanc's personal physician, Dr. Thyberg, who also determined that her condition was unlikely to change. Dr. Thyberg recommended allowing disability status. He found that Mrs. LeBlanc could not do much housework because of her allergy to dust, that she was educationally unprepared for other jobs, and that severe hypertension precluded heavy physical labor or occupations subjecting her to great stress. Dr. Ervin Markus made similar findings and concluded that ‘we should consider her as disabled as she has been in the past.’
The medical reports relied upon by the director do not support his determination that Mrs. LeBlanc was no longer disabled. On the contrary, Dr. Brereton confirmed that Mrs. LeBlanc was suffering from anxiety, hypertension, asthma, functional gastrointestinal complaints, and obesity. He opined that her condition was probably static. She was unable to perform hard labor, and it was questionable whether she could perform housework. Dr. Brereton concluded that she needed continuing medical care. Dr. Greaves, a psychiatrist, found Mrs. LeBlanc a very dependent personality who continues to experience anxiety. There is nothing in either report which indicates that her condition had improved. It is true that a social information report had stated that ‘[Mrs. LeBlanc] does not appear to be disabled.’ However, that report was not competent evidence of her lack of disability since it was not prepared by a physician.
Appellant also claims that Mrs. LeBlanc was not entitled to benefits because she was able to perform certain household tasks. While this ground was not relied upon in the administrative proceedings, the court may nonetheless consider any theory which would support the director's determination. (See Bank of Italy v. Johnson, 200 Cal. 1, 28, 251 P. 784.)
Mrs. LeBlanc had admitted that she was able to shop for food, place supplies on shelves, prepare meals, wash dishes, change bed linen and vacuum. However, the ability to perform some household functions does not render a claimant any less entitled to ATD benefits if he is precluded from engaging in any gainful occupation. (Zunino v. Carleson, supra, 33 Cal.App.3d 36, 43, 108 Cal.Rptr. 769.) The uncontradicted evidence shows that Mrs. LeBlanc is unable to perform heavy labor or all household functions and educationally unprepared for other jobs. Hence the director's claim that Mrs. LeBlanc is capable of gainful employment is not supported by substantial evidence.
Lastly, it must be determined whether Mrs. LeBlanc is entitled to attorney fees on appeal. Such fees are recoverable only when authorized by statute or contract. (5 Cal.Jur.3d, Appellate Review, § 599, p. 321.)
Section 10962 of the Welfare and Institutions Code provides for the award of attorney fees on appeal where an applicant or recipient of public welfare seeks review of an agency decision by mandamus and obtains a decision in his favor. (Trout v. Carleson, 37 Cal.App.3d 337, 343, 112 Cal.Rptr. 282; Roberts v. Brian, 30 Cal.App.3d 427, 430, 106 Cal.Rptr. 360.)
That respondent's attorney is not a private counsel but counsel for the Legal Aid Society of Alameda County is without significance. In Trout v. Carleson, supra, 37 Cal.App.3d at page 343, 112 Cal.Rptr. at page 286, the court held that ‘[f]or that reason we conclude the legislative intent does not bar an award of attorney fees to a successful claimant under Welfare and Institutions Code sctions 13500 to 13701, where the claimant is represented by an attorney who, if acting in his private capacity, would be entitled to compensation, although in fact the attorney is the salaried employee of a corporation which furnishes his services without cost to the client, and the client has agreed to donate the amount awarded to that corporation.’ (Accord, Horn v. Swoap, 41 Cal.App.3d 375, 383–384, 116 Cal.Rptr. 113.)
The judgment is affirmed and the trial court is directed after remittitur is filed, to hear an application for attorney's fees for services rendered on appeal and fix the reasonable sum thereof.
1. Apparently a group 2 recipient's case is subject to automatic review.
2. Evidence Code section 452, subdivision (c); Pearson v. State Social Welfare Board, supra, 54 Cal.2d at pp. 205–210, 5 Cal.Rptr. 553, 333 P.2d 33.
3. Indeed, it would ultimately be an exercise in futility to rule, contrary to the federal regulations, that Welfare and Institutions Code section 10962 permits a de novo review of administrative decisions. Welfare and Institutions Code section 11003 provides that if HEW rules that any section of the code ‘cannot be given effect without causing the state's plan to be out of conformity with federal requirements, the section shall become inoperative to the extent that it is not in conformity with federal requirements.’
CALDECOTT, Presiding Justice.
RATTIGAN and CHRISTIAN, JJ., concur.