Lukhard v. Reed

481 U. S. 368

April 22, 1987

A federal program (AFDC) provided financial assistance to needy families, and allowed individual states to set many of the standards governing when families would get that assistance. In setting those standards, the states had to consider a family’s “income” and “resources.” Virginia said that a personal injury award would count as “income.” Whether such a classification was valid under federal statutes and regulations was the issue posed by this case.

The Supreme Court ruled 5-4 that Virginia’s classification of injury awards as income was permissible. Scalia wrote for the plurality, and began by pointing out that income can easily be interpreted to mean ‘any monetary gain.’ While other federal programs to help the needy did not treat injury awards as income, the HHS Secretary, who was responsible for overseeing the AFDC, seemed to approve of such an expansive definition of the word. Scalia also rejected the claim that personal injury awards, since they compensated for lost well-being, should be more properly classified as a “resource.” He found that physical well-being itself was not a resource within the AFDC’s contemplation.

Blackmun concurred in judgment. He felt the interpretation of the HHS should be given deference, and did not see the need to reach any other arguments. Powell, joined by Brennan, Marshall, and O’Connor, dissented. Citing a bunch of tax cases and rules, he made a good argument that income should not be understood to cover injury awards. He also stressed that injury awards are primarily intended to restore, not to provide monetary gain. In practice, he concluded, the majority’s rule had a verifiable harsh effect on hard up families.

Based on the Chevron deference that Blackmun found so critical, I have to say that the majority’s position was legally stronger. Nonetheless, this is one of those cases where concern for compassion and substantive justice should perhaps have outweighed the need to follow the Chevron rule. I only say this because Powell’s dissent is quite legally persuasive in several respects. Were the law clear, compassion could have no role, but in an especially close case, I can’t say its wrong for those sorts of considerations to tip the scales.

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