United States Court of Appeals, Fourth Circuit
United States Court of Appeals, Fourth Circuit
3d 316
PER CURIAM.
The Governor of South Carolina appeals the grant of summary judgment to the
Secretary of the United States Department of Health and Human Services in the
State's action seeking injunctive and declaratory relief from conditions imposed
for federal funding of the Temporary Assistance to Needy Families (TANF)
program.
South Carolina challenges the district court finding that Congress acted within
its Spending Clause authority when it conditioned States' receipt of federal
funds under the child support enforcement program and the TANF program on
compliance with the requirement that States develop and maintain automated
child support enforcement systems and that such a condition was not so
coercive as to violate the Tenth Amendment. The State further alleges the
district court erred when it found that the Secretary did not have the discretion
to amend the statutory penalty structure for a State's noncompliance with the
child support systems requirements. In addition, South Carolina contends the
court erred in finding that the State could not invoke the protections of the Due
Process Clause. After considering the parties' briefs and the record, and
following oral argument, we affirm substantially on the reasoning of the district
court.
I.
3
Without an approved state plan, a State may lose federal funding under both
Title IV-D (child support enforcement) and Title IV-A (TANF). See 42 U.S.C.
II.
6
Consistent with its Spending Power, Congress may attach conditions on the
receipt of federal funds. See South Dakota v. Dole, 483 U.S. 203, 206, 107 S.Ct.
2793, 97 L.Ed.2d 171 (1987). The Spending Power is not unlimited, of course,
and the Supreme Court has recognized four general limitations: spending must
be in pursuit of the general welfare; any attached conditions must be
unambiguous; conditions must also be related to a federal interest; and, the
obligations imposed by Congress may not violate any independent
constitutional provisions. See Dole, 483 U.S. at 207-08, 107 S.Ct. 2793.
The district court found that "Congress made a considered judgment that the
American people would benefit significantly from the enhanced enforcement of
child-support decrees and the diminution of the number of parents who are able
to avoid their obligations simply by moving across local or state lines." Hodges,
121 F.Supp.2d at 873. Thus, like the district court, we are satisfied that
Congress acted in the general welfare when it enacted the child support
enforcement programs and the associated funding conditions under Title IV-D.
South Carolina's contention that the Title IV-D conditions are ambiguous is
without merit. The statute expressly provides that compliance with the
automated system and SDU requirements is a condition of approval of a state
plan. See 42 U.S.C. 654(16), (24)(27)A. We agree with the district court that
the clear and unequivocal statement of the required conditions in the statute
enabled South Carolina to "exercise [her] choice knowingly, cognizant of the
consequences of [her] participation." See Dole, 483 U.S. at 207, 107 S.Ct. 2793
(citations omitted).
10
A third limitation on the Spending Power requires that conditions "bear some
relationship to the purpose of the federal spending." New York v. United States,
505 U.S. 144, 167, 112 S.Ct. 2408, 120 L.Ed.2d 120 (1992) (citing Dole, 483
U.S. at 207-08, n. 3, 107 S.Ct. 2793). Here, there is a complementary
relationship between efficient child support enforcement and the broader goals
of providing assistance to needy families through the TANF program.
Establishing paternity and collecting child support may enable families to
reduce their dependence on the welfare system, and both programs are intended
to reduce the incidence of poverty among children and families. The Supreme
Court has recognized that Congress intended these linkages between child
support programs and the TANF program. See Sullivan v. Stroop, 496 U.S. 478,
484, 110 S.Ct. 2499, 110 L.Ed.2d 438 (1990) (concluding Congress intended
the two programs to "operate together closely to provide uniform levels of
support for children of equal need").1
11
South Carolina does not contend that the Title IV-D conditions violate the
fourth limitation on the Spending Power that the conditions violate any
independent Constitutional prohibition, rather it raises a Tenth Amendment2
challenge. As we have recently reconfirmed, "the Tenth Amendment itself does
not act as a constitutional bar to Congress's spending power; rather, the fourth
restriction on Congress's spending power stands for the more general
proposition that Congress may not induce the states to engage in activities that
would themselves be unconstitutional." James Island Pub. Serv. Dist. v. City of
Charleston, 249 F.3d 323, 327 (4th Cir. 2001) (citing Kansas v. United States,
214 F.3d 1196, 1199 (10th Cir.2000)) (italics in original). We therefore next
consider South Carolina's Tenth Amendment argument, not as a limitation
related to the Spending Clause, but as an independent constitutional challenge.
12
South Carolina argues that the coercive effect of the Title IV-D conditions run
afoul of the protections of the Tenth Amendment. The Supreme Court has
recognized that the Tenth Amendment may be implicated when the financial
incentives offered by the federal government to the States cross the
impermissible line where "pressure turns into compulsion." See Dole, 483 U.S.
at 211, 107 S.Ct. 2793 (citations omitted). Congress may use its Spending
Power to influence a State's legislative choices by providing incentives for
States to adopt certain policies, but may not compel or coerce a State, or go so
far as to "commandeer the legislative processes of the States by directly
compelling them to enact and enforce a federal regulatory program." See New
York v. United States, 505 U.S. at 161, 112 S.Ct. 2408, but Congress, under the
Commerce Clause, may offer the States a choice of regulation under federal
control or preemption under federal regulation. See Hodel v. Virginia Surface
Mining & Reclamation Ass'n, Inc., 452 U.S. 264, 288, 101 S.Ct. 2352, 69
L.Ed.2d 1 (1981).
13
The district court found that, based on the State's own admission, the alternative
penalty, which South Carolina has now elected, would result in the loss of a
small fraction of the State's TANF funds and that such a proportion was
noncoercive. Given the linkages between child support enforcement and aid to
needy families and the level of the alternative penalty, we agree with the district
court's conclusion that "the Title IV-D conditions are not so overbearing as to
create an unconstitutional compulsion." Hodges, 121 F.Supp.2d at 875.
14
South Carolina next contends that the Secretary of the Department of Health
and Human Services (HHS) has the discretion to deviate from the alternative
penalty structure of Title VI D in order to respond to the peculiar circumstances
that led to South Carolina's noncompliance. Specifically, South Carolina argues
that its inability to comply with the automated system and SDU requirements
was caused by the failure of its prime contractor, Unisys, to deliver on its
contract with the State. South Carolina maintains that because its noncompliance was no fault of its own and its alternative systems are in substantial
compliance with the goals of the statute, the Secretary abused her discretion by
refusing to grant South Carolina an evidentiary hearing and waive or amend the
alternative penalty for noncompliance.
15
We have examined the penalty provisions of the statute and, like the district
court, cannot find the discretion South Carolina envisions. The wording of the
statute is plain. Where the Secretary determines that a state plan would be
disapproved, and where the State has made and continues to make a good faith
effort to comply and has submitted a corrective compliance plan, "the Secretary
shall not disapprove the State plan ... and the Secretary shall reduce the amount
otherwise payable to the State [by the designated alternative penalty]." 42
U.S.C. 655(a)(4)(A)(i)(II) (emphasis added). Again, we agree with the district
court that "[b]y the text of the statute, the legislature has prescribed that the
Secretary shall enforce this penalty." Hodges, 121 F.Supp.2d at 879. Absent
any discretion available to the Secretary to impose a lesser penalty than the
alternative penalty as outlined in the statute, South Carolina's assertion that it is
entitled to an evidentiary hearing must also fail.3
III.
16
For the foregoing reasons, we are of opinion that the Title IV-D provisions are
constitutionally valid under the Spending Clause and the Tenth Amendment
and that the Secretary lacks discretion under Title IV-D to deviate from the
penalty provisions.
17
18
AFFIRMED.
Notes:
1
The Tenth Amendment states: "The 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. Const. amend. X
In the district court, South Carolina asserted a Due Process claim which the
district court denied. The court concluded that the "State cannot invoke the
protections of the Fifth Amendment with claims that [the State] has been
harmed."Hodges, 121 F.Supp.2d at 865. South Carolina does not take issue
with the district court's holding, but rather, on appeal it asserts that the State is
entitled to assert a Due Process claim on behalf of its citizens. Because this
contention was never properly presented to the district court, we do not
consider it now. See McGowan v. Gillenwater, 429 F.2d 586, 587 (4th
Cir.1970).