Opinion
NO. 01-20-00302-CV
09-30-2021
Chenedra MCCLELLAND, Appellant v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION, Appellee
Brenda Willett, Timothy David Craig, Lone Star Legal Aid, 4414 E. Pilar Street, P.O. Box 63-1070, Nacogdoches, TX 75965, for Appellant. Ken Paxton, Attorney General of Texas, Kara Holsinger, Cole Hutchison, Office of the Attorney General of Texas, P.O. Box 12548, Capitol Station, Austin, Texas 78711-2548, for Appellee.
Brenda Willett, Timothy David Craig, Lone Star Legal Aid, 4414 E. Pilar Street, P.O. Box 63-1070, Nacogdoches, TX 75965, for Appellant.
Ken Paxton, Attorney General of Texas, Kara Holsinger, Cole Hutchison, Office of the Attorney General of Texas, P.O. Box 12548, Capitol Station, Austin, Texas 78711-2548, for Appellee.
Panel consists of Justices Kelly, Landau, and Hightower.
OPINION
Sarah Beth Landau, Justice
This is an administrative appeal of the Texas Health and Human Services Commission's decision to deny Chenedra McClelland's application for food assistance.
McClelland is a single mother of an eight-year-old disabled child. She works part-time during her daughter's school day. She applied for Supplemental Nutrition Assistance Program (SNAP) benefits. While most SNAP applicants must work or seek employment training as a condition for benefits, McClelland applied as a work-exempt applicant, relying on the federal statute that exempts from the benefit program's work requirements and related penalties any caregiver "with responsibility for the care of ... an incapacitated person." 7 U.S.C. § 2015(d)(2)(B). HHSC denied her application. After unsuccessfully pursuing administrative review, McClelland sought judicial review and filed this appeal.
McClelland organizes her appellate challenges into eight issues. HHSC rejects the presentation and reframes her issues into three points. Either way, the question is whether the discretion afforded HHSC in its administration of the federal benefits program allows what HHSC did here, which was to foreclose any possibility of McClelland being granted SNAP benefits as a work-exempt applicant because HHSC limits the exemption to only those caregivers who are completely unable to work. McClelland works part-time.
Because of HHSC's process and procedures, as well as McClelland's application history, McClelland's only recourse was to agree to be bound by work requirements and related penalties or face automatic, administrative denial of benefits.
McClelland argues that the controlling federal statutes—including those that prohibit the states from adding eligibility requirements and those that prohibit the states from imposing work requirements and penalties on exempt caregivers of incapacitated household members—leave HHSC no discretion to structure her application process to foreclose any possibility of obtaining benefits as a work-exempt applicant.
We agree with McClelland that HHSC has abused its discretion by basing its decision on a legally impermissible factor. Because we have concluded that HHSC acted arbitrarily, we reverse the trial court's judgment and render judgment remanding the matter to HHSC for additional consideration of McClelland's application and any updates to the application that might have become necessary given the length of time that has passed since her original application was reviewed.
Background
The facts are undisputed. Chenedra McClelland is the sole caregiver of her disabled, eight-year-old daughter. She works 21 hours per week while her daughter is in school. Her daughter receives Supplemental Security Income (SSI) benefits because of her disability. To help with the cost of food for her family, McClelland applied for SNAP benefits in April 2018.
SNAP benefits provide food assistance to low-income families. The SNAP program places certain requirements on its recipients for access to food assistance. One of those is a work requirement. 7 U.S.C. § 2015(d)(1)(A). Under Subsection (d)(1), SNAP recipients must work full-time or engage in detailed job-search and employment-training (E&T) activities. Id. Not everyone is subject to these requirements though. Id. § 2015(d)(2). A "person who otherwise would be required to comply" with Subsection (d)(1) work requirements, "shall be exempt from such requirements if he or she is," among other possibilities, "a parent or other member of a household with responsibility for the care of a dependent child under age six or of an incapacitated person." Id. § 2015(d)(2)(B) ; see 7 C.F.R. § 273.7(b)(1)(iv). Subsection (d)(2) does not define "incapacitated person." Nor does it elaborate on the phrase "with responsibility for the care of."
McClelland applied as a work-exempt applicant because she is the sole caregiver for her disabled daughter, and, during the application process, she informed HHSC that her daughter had been approved for other federal benefits and receives Supplemental Security Income, as evidence of her incapacity.
HHSC required McClelland to submit Form H-1836-B as part of her application. HHSC characterizes Form H-1836-B as a "verification form." The form is not to be filled out by the applicant. It is, instead, filled out by a licensed physician. The only information the form requests, and therefore, the only information it could be said to verify, is (a) the "disabling diagnosis" of the household member under the applicant's care and (b) the level to which the caregiver is able to work, with three available options: (1) able to work full-time, (2) able to work part-time, and (3) "unable to work." That second portion of Form H-1836-B is reproduced below:
Testimony from an HHSC representative confirmed that HHSC would only process McClelland's application for SNAP benefits as a work-exempt applicant if the form were submitted with the "unable to work" option checked. Any other answer would automatically disqualify McClelland from exemption from work requirements and open the possibility that any previously imposed penalties would attach to her current application and jeopardize its approval on administrative grounds. Such penalties do not attach to exempt applicants.
The representative confirmed that a penalty had attached to McClelland's file, meaning that, because her part-time employment status prevented a finding that she is "unable to work," she would be administratively denied benefits. The only option to prevent automatic administrative denial would be to submit Form H-1808. Form H-1808 is used by applicants to agree to be subject to all work requirements and penalties in the employment and training program, without regard to federal exemption. The HHSC representative confirmed in her testimony that the only way for McClelland to avoid denial of benefits, given her part-time employment, was to agree to be bound by the very work requirements she claimed exemption from. Once subjected to the work requirements, McClelland could petition for relief but would have to establish "good cause" for relief, which could be denied.
HHSC mandated this application process even though McClelland's status as the sole caregiver of a disabled child, she contends, exempted her from work program requirements, including the penalties HHSC allowed to attach to McClelland's application. As outlined by HHSC, the application process has five steps, none of which apply the federal work exemption to a part-time worker:
HHSC confirmed that, if McClelland's application had been processed as a work-exempt application, due to her child's disability and her status as the child's sole caregiver, McClelland never would have been penalized with the work requirements, meaning that she would not have faced an administrative denial or a requirement that she agree to full-time work to get benefits. But, because HHSC would not process her as a work-exempt applicant unless she was found to be "unable to work," the penalty became unavoidable and attached.
Because she could never be deemed "unable to work" given that she worked part-time during her disabled daughter's school day, McClelland did not submit a qualifying H-1836-B form. HHSC denied her application, citing two bases. First, she had not submitted a qualifying Form H-1836-B. Second, she had not submitted Form H-1808, by which she needed to have agreed to have a work-requirement imposed on her to remove the work-related penalty that otherwise would require administrative denial of benefits.
McClelland appealed the denial. The hearing transcript is in the record. The Hearing Officer confirmed that HHSC requires a person with a disabled household member to submit Form H-1836-B and requires that the physician select option 3—that the person is unable to work—before an applicant will be determined exempt from work requirements and processed as a work-exempt applicant. According to the HHSC representative, D. Migl, the "doctor has to tell us that she is required in the home."
The Hearing Officer asked Migl if HHSC's position is consistent with the United States Code and the Texas Administrative Code. Migl could not confirm that it is. She could confirm that HHSC representatives follow "the policy that is given to us," referring to the agency's Handbook, which requires Form H-1836-B and an "unable to work" finding for exemption from the work program, but she could not also confirm that the HHSC policy complies with federal and state law.
The Hearing Officer sustained the denial of SNAP benefits, and that ruling was later administratively affirmed. McClelland has appealed the ruling, and her appeal has been transferred to this Court.
Standard of Review
We first list the standard of review that normally applies in agency-denial cases such as this one. But this case also raises issues of statutory construction, agency deference in construing statutes, and the standard for arbitrary agency action. Accordingly, we detail those standards as well.
Substantial evidence
Generally, this type of appeal invokes the substantial-evidence standard of review. TEX. GOV'T CODE §§ 531.019(g), 2001.174 ; Poole v. Karnack Indep. Sch. Dist. , 344 S.W.3d 440, 443 (Tex. App.—Austin 2011, no pet.). Under that standard, we presume that the HHSC order is supported by substantial evidence, and McClelland has the burden to prove otherwise. See Tex. Health Facilities Comm'n v. Charter Med.–Dall., Inc. , 665 S.W.2d 446, 453 (Tex. 1984) ; Poole , 344 S.W.3d at 443. An agency decision is supported by substantial evidence if reasonable minds could have reached the same conclusion. Tex. State Bd. of Dental Exam'rs v. Sizemore , 759 S.W.2d 114, 116 (Tex. 1988) ; Poole , 344 S.W.3d at 443. The question under a substantial-evidence review is not whether the agency reached the correct conclusion, but, rather, whether some reasonable basis exists in the record to support the agency's action. State v. Pub. Util. Comm'n , 883 S.W.2d 190, 204 (Tex. 1994).
Statutory construction
We review issues of statutory construction de novo. Wood Grp. Prod'n Servs. v. Malta , 930 F.3d 733, 736 (5th Cir. 2019) ; Tex. Lottery Comm'n v. First State Bank of DeQueen , 325 S.W.3d 628, 635 (Tex. 2010). Our primary objective in construing statutes is to give effect to Congress's intent. United States v. Scrimgeour , 636 F.2d 1019, 1022 (5th Cir. 1981) ; see Tex. Lottery Comm'n , 325 S.W.3d at 635. "A basic canon of statutory construction is that words should be interpreted as taking their ordinary and plain meaning." Scrimgeour , 636 F.2d at 1022 ; see City of Rockwall v. Hughes , 246 S.W.3d 621, 625 (Tex. 2008) ; Fresh Coat, Inc. v. K–2, Inc. , 318 S.W.3d 893, 901 (Tex. 2010) ("Presuming that lawmakers intended what they enacted, we begin with the statute's text, relying whenever possible on the plain meaning of the words chosen.") (citations omitted). Further, we consider the statute in its entirety and presume Congress intended every part to add meaning without superfluous text. Tex. Educ. Agency v. U.S. Dep't of Educ. , 908 F.3d 127, 133 (5th Cir. 2018) ; see City of Rockwall , 246 S.W.3d at 626.
Agency deference to statutory interpretation
Central to this dispute is a governmental agency's construction of a statute it is charged with administering. As stated, the construction of a statute is a question of law we review de novo. Wood Grp. Prod'n Servs. , 930 F.3d at 736 ; Tex. Lottery Comm'n , 325 S.W.3d at 635. But courts grant some deference to an agency's interpretation of a statute if it is charged with enforcing that statute, so long as its interpretation is reasonable and does not conflict with the statute's language. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (stating two-part test for deference to agency construction of statute); R.R. Comm'n of Tex. v. Tex. Citizens for a Safe Future and Clean Water , 336 S.W.3d 619, 624 (Tex. 2011). Agency deference is tempered in two ways. First, there is no deference if the language of the statute is unambiguous. Fiess v. State Farm Lloyds , 202 S.W.3d 744, 747 (Tex. 2006). Unambiguous language is given its plain meaning even if the agency suggests another meaning. Id. An "agency's opinion cannot change plain language." Id. Second, "the agency's construction must be reasonable." Id. at 747–48
Arbitrariness
An agency decision may be reversed as arbitrary and capricious, independent of whether there is substantial evidence in the record, if its decision constitutes a clear abuse of discretion. Pub. Util. Comm'n , 883 S.W.2d at 201. An agency abuses its discretion if its decision is "devoid of any guiding principles of law." Deloitte & Touche LLP v. Fourteenth Ct. App. , 951 S.W.2d 394, 396 (Tex. 1997). More specifically,
[a]n agency's decision is arbitrary or results from an abuse of discretion if the agency: (1) failed to consider a factor the legislature directs it to consider; (2) considers an irrelevant factor; or (3) weighs only relevant factors that the legislature directs it to consider but still reaches a completely unreasonable result.
City of El Paso v. Public Util. Comm'n of Tex. , 883 S.W.2d 179, 184 (Tex. 1994).
Applicable Statutes and Guides
Below are the federal and state statutes and guides that inform our resolution of this appeal.
The federal supplemental nutrition program establishes eligibility requirements
SNAP is a federal program enacted by Congress to "safeguard the health and well-being of the Nation's population by raising levels of nutrition among low-income households." 7 U.S.C. § 2011. The law established a supplemental nutrition program. Id. SNAP benefits have federal eligibility requirements. Id. § 2014(b). This ensures uniformity in eligibility standards across the country.
In Texas, as in other states, the program is operated by a state agency, which must apply the federal eligibility requirements. Under the federal law, "no State agency shall impose any other standards of eligibility as a condition for participating in the program." Id.
The work mandate and exemptions from its requirements
The federal benefits program imposes work requirements for any physically and mentally fit individual over the age of 15 and under the age of 60, with exceptions. Id. § 2015(d)(1)(A). The work requirements can be met by participating in a job-search and employment-training (E&T) program established by statute. Id. § 2015(d)(1)(A)(ii). These work requirements are set out in Subsection (d)(1). See id. § 2015(d)(1).
Subsection (d)(2) provides that a "person who otherwise would be required to comply with the requirements of paragraph (1) of this subsection shall be exempt from such requirements if he or she is," among other things, "a parent or other member of a household with responsibility for the care of a dependent child under age six or of an incapacitated person." Id. § 2015(d)(2)(B); see 7 C.F.R. § 273.7(b)(1)(iv). The statute does not define the term "incapacitated person" or the phrase "with responsibility for the care of."
Texas statute prohibits imposing penalties on exempt applicants
A Texas statute defines an "exempt recipient" of SNAP benefits as "an individual who is ... not required to participate in SNAP E&T [work] services, as set forth in 7 U.S.C. § 2015(d)(2), and shall not be sanctioned for failure to cooperate with SNAP E&T [work] requirements ...." 40 TEX. ADMIN. CODE § 813.2(2).
Federal delegation to the states
State administration of the federal SNAP program includes "certification of applicant households." 7 C.F.R. § 271.4(a)(1). The individual states are responsible "for screening each work registrant to determine whether or not it is appropriate, based on the State agency's criteria, to refer the individual to an E & T [work] program." Id. § 273.7(c)(2).
The federal statute explicitly leaves some determinations to the state agencies to resolve as it relates to Subsection (d)(1) work requirements. 7 U.S.C. § 2015(d)(1)(D)(iii). These include: (1) the meaning of any term contained in the (d)(1) work requirements provisions; (2) the procedure for determining compliance with (d)(1) work requirements; and (3) whether an individual is in compliance with a (d)(1) work. Id. § 2015(d)(1)(D)(iii)(I). We note that the federal statute's grant of deference to the states to make these determinations specifically refers to § 2015(d)(1)(A) —where the work requirements are established—not § 2015(d)(2) —where the exemption is established. Id. § 2015(d)(1)(D)(iii)(I).
The Federal Exemption Statute Unambiguously Does Not Require a Caregiver to be Completely Unable to Work
The primary canon of statutory construction is that words are given their plain meaning and a statute is unambiguous if a clear meaning exists. Tex. Natural Res. Conservation Comm'n v. Lakeshore Util. Co. , 164 S.W.3d 368, 378 (Tex. 2005) ("Our primary objective in construing [a statute] is to ascertain and give effect to the Legislature's intent by first looking at the statute's plain and common meaning."). Courts must presume that a legislature "says in a statute what it means and means in a statute what it says." Conn. Nat'l Bank v. Germain , 503 U.S. 249, 253, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992). "When the words of a statute are unambiguous, then, this first canon is also the last: judicial inquiry is complete." Id. at 254, 112 S.Ct. 1146.
Subsection (d)(2) states that a "person who otherwise would be required to comply with the requirements of [the Subsection (d)(1) work requirement] shall be exempt from such requirements if he or she is ... (B) a parent ... with responsibility for the care of a dependent child under age six or of an incapacitated person." Id. § 2015(d)(2)(B). The two terms that are the focus of this appeal are "incapacitated person" and "responsible for the care of." There is no statutory definition for either. Nor have the parties or this Court found any cases construing the terms.
Black's Law Dictionary defines "incapacitated person" as "[s]omeone who is impaired by an intoxicant, by mental illness or deficiency, or by physical illness or disability to the extent that personal decision-making is impossible." Incapacitated Person , BLACK'S LAW DICTIONARY (11th ed. 2019). It defines "responsible" as "[h]aving a duty to be in charge of something or to look after someone or something < responsible for the children>," among other things. Responsible , BLACK'S LAW DICTIONARY (11th ed. 2019). And it defines "care," with a reference to family law, as the "provision of physical or psychological comfort to another, esp. an ailing spouse, child, or parent." Care , BLACK'S LAW DICTIONARY (11th ed. 2019).
The Subsection (d)(2) exemption applies equally to a person caring for an incapacitated person as one caring for a child under the age of six. Both exemptions are included in the same subsection without differentiation. 7 U.S.C. § 2015(d)(2)(B). And the exemptions apply to a person "who otherwise would be required to comply with" work requirements. Id. § 2015(d)(2).
A related state statute defines an "exempt recipient" of SNAP benefits as an individual who is exempted under Subsection (d)(2) and who "shall not be sanctioned for failure to cooperate with SNAP E&T [work] requirements ...." 40 TEX. ADMIN. CODE § 813.2(2).
Combined, these statutory provisions unambiguously establish that a parent who has primarily responsibility for providing physical care for an incapacitated household member is fully exempted from being assigned work requirements and that the state agency is prohibited from sanctioning this category of applicant with work-program penalties. These provisions do not further require that the caregiver be completely unable to work.
HHSC Did Not Have Discretion to Add Eligibility Requirements; Doing so Abused its Discretion
Federal law does not allow the states to revise SNAP eligibility requirements. 7 U.S.C. § 2014(b) ; Harrington v. Blum , 483 F. Supp. 1015, 1019 (S.D. N.Y. 1979) (stating that "States must use the federal eligibility standards in determining eligibility for food stamps" and "State or local policies or practice inconsistent with federal statutes or regulations are invalid."). The rejection of an applicant on nonfederal criteria is an abuse of discretion. City of El Paso , 883 S.W.2d at 184 (stating that "agency's decision is arbitrary or results from an abuse of discretion if the agency ... considers an irrelevant factor" outside those factors established in federal standard); see Harrington , 483 F. Supp. at 1020–21 (having determined that New York added criteria for food stamps beyond federal standard, holding that state restrictions violated federal law).
Nonetheless, HHSC's application process and its use of Form H-1836-B only permits an applicant to be eligible for work-program exemption if that applicant is found to be completely "unable to work" due to her care obligations. This adds an eligibility requirement beyond the federal standard.
HHSC first argues that it has authority to structure the application process this way, which funnels all caregivers who are able to work even a small amount as work-mandated applicants unable to access the federally mandated exemption process.
We agree that federal regulations grant the states responsibility for "screening each work registrant to determine whether or not it is appropriate, based on the State agency's criteria, to refer the individual to an E & T [work] program." 7 C.F.R. § 273.7(c)(2). But that same section states that work registrants are subject to these work requirements only if "not otherwise exempted." Id. § 273.7(e). Exemption is a federally set standard that each state must accept. See 7 U.S.C. § 2015. The concept of deference cannot relieve a state agency of complying with federally mandated provisions. See Abbeville Gen. Hosp. v. Ramsey , 3 F.3d 797, 804 (5th Cir. 1993) (stating that general principles of federalism "do not permit states to be final arbiters of their compliance with federal law). Texas's own Administrative Code recognizes that the federal standard must control. See 40 TEX. ADMIN. CODE § 813.2(2) (defining exempted individual as one who meets the criteria in 7 U.S.C. § 2015(d)(2) ).
We further agree that the federal statute delegates to the states the authority to determine whether a person is in compliance with work requirements, determine compliance with work requirements, and define terms found in Subsection (d)(1)’s work requirements. 7 U.S.C. § 2015(d)(1)(D)(iii)(I). But, at every turn, that deference arises within Subsection (d)(1), which imposes work requirements, not Subsection (d)(2), which establishes an exemption that the states are required to follow. See id.
Section 2015(d)(2) exempts a caregiver who is responsible for the care of an incapacitated person. HHSC was aware that McClelland's daughter had already been determined to be disabled because she had been approved for SSI benefits. Yet it insisted on either a designation of "unable to work" on Form H-1836-B or McClelland's acceptance of work requirements through Form H-1808. Neither path allowed for a merits-based review of whether McClelland met the description of an exempt applicant under Subsection (d)(2) outside the reach of work-related penalties.
HHSC's procedures removed McClelland's access to Subsection (d)(2) exemption by imposing work requirements that the SNAP beneficiary would then have to request good-cause relief from. But Subsection (d)(2) states that an applicant that meets its description is not subject to work requirements or penalties. Id. § 2015(d)(2). HHSC does not have the authority to disregard this mandate.
HHSC argues next that it has not added eligibility requirements because an applicant may end up at the same place: approved for benefits and relieved of work requirements. HHSC asserts that a qualifying SNAP applicant who is a parent of a disabled person but does not have a Form H-1836-B statement of inability to work could be approved for SNAP benefits subject to work requirements and then, "[o]nce enrolled in E&T," the SNAP recipient could apply for "good cause" relief from the assigned work requirement. One statutorily recognized basis for good-cause relief is "caring for a physically or mentally disabled household member who requires the recipient's presence in the home." 40 TEX. ADMIN. CODE § 813.13(b)(3) (revised in unrelated ways, effective October 26, 2020, see 2020 Tx. Reg. Text 560711 (NS)).
HHSC's position appears to be that blocking SNAP applicants with part-time employment from Subsection (d)(2) exemption cannot be an abuse of discretion if it leaves open at least a sliver of path to benefits relieved of work requirements. McClelland could not be approved for Subsection (d)(2) exemption as a part-time employee, but she could submit Form H-1836-B and Form H-1808, agree to be bound by work requirements, apply for good-cause relief, and possibly be granted SNAP benefits without work requirements. HHSC argues it is "well within its statutory authority" to require applicants like McClelland to use Form H-1808 "to re-establish SNAP eligibility." There are at least four problems with this logic.
First, it is inconsistent with the plain language of the federal and state statutes. Subsection (d)(2) states that its exemption applies to a person "who otherwise would be required to comply with" work requirements. 7 U.S.C. § 2015(d)(2). Forcing applicants into work requirements and leaving it to them to seek good-cause relief contravenes the clear terms of the (d)(2) exemption: caregivers who are responsible for the care of an incapacitated person are exempt from work requirements altogether. Id. The Texas statute defines an "exempt recipient" of SNAP benefits as an individual who satisfies the (d)(2) language and, as such, "shall not be sanctioned for failure to cooperate with SNAP E&T [work] requirements ...." 40 TEX. ADMIN. CODE § 813.2(2). And Section 813.13(a) states that the "good cause" relief provision applies only to those "who are required to participate in SNAP E&T [work] services." Id. § 813.13(a).
Second, without a qualifying H-1836-B form, an applicant with a pending work-related penalty, like McClelland, is limited to one of two outcomes: administrative denial of SNAP benefits or assumption of work requirements through Form H-1808. There is no route to Subsection (d)(2) exemption for caring for an incapacitated household member. This cements HHSC's use of Form H-1836-B as a litmus test for Subsection (d)(2) exemption and an eligibility requirement.
Third, once an applicant is placed in the work program, she is subject to work obligations and penalties with only a possibility of getting good-cause relief. This is not equivalent to receiving a (d)(2) exemption that fully insulates a SNAP applicant and recipient from work program requirements and penalties. Further, if HHSC has interpreted the phrase "with responsibility for the care of ... an incapacitated person" to mean that the caregiver's responsibilities prevent them from working at all, it is difficult to see how that same applicant could meet the good-cause standard that the care of the disabled household member "requires the recipient's presence in the home." Compare 7 U.S.C. § 2015(d)(2)(B), with 40 TEX. ADMIN. CODE § 813.13(b)(3).
McClelland's job filled 21 hours of the time that her daughter was in school each week, which averages to just over 4 hours each school day. Assuming a typical 7½–hour school day and taking into consideration commuting time, McClelland had only a couple hours each day while her daughter was in school that she was not actively working or going to or from work. To the extent imposed work obligations exceeded those few hours each day, they would cut into her time caring for her child before and after school. Being forced to work when the federal exemption dictates that a caregiver responsible for the care of an incapacitated person need not work is not ending up at the same place as being granted a (d)(2) exemption. These are extra requirements HHSC is placing on her to be eligible for SNAP benefits that go beyond the federal standard.
These extra requirements come from a system of penalties that apply only to work-mandated SNAP beneficiaries. Processing McClelland as a work-mandated applicant unless she is completely unable to work triggered a penalty that would not have existed had she been determined exempt under Subsection (d)(2) without ever entering the work-mandate system. 7 U.S.C. § 2015(d)(2) ; see 40 TEX. ADMIN. CODE § 813.2(2) (defining exempt recipient as individual who meets requirements of 7 U.S.C. § 2015(d)(2) and who "shall not be sanctioned for failure to cooperate with SNAP E&T requirements").
Fourth, even if McClelland arguably could end up in the same place by accepting work requirements and then obtaining relief from them, it remains true that the switch to default assignment of work requirements unless one is "unable to work" is an HHSC-imposed, extra criterion that exceeds the federal standard and is, therefore, without authority. 7 U.S.C. § 2014(b).
HHSC had no discretion to add eligibility requirements; its use of Form H-1836-B impermissibly added a requirement for participation in the SNAP benefits program for a part-time employee who has primary responsibility for an incapacitated household member.
Having rejected HHSC's argument that its alternate path to relief from work requirements is functionally the same as a (d)(2) exemption and, thus, does not alter the eligibility requirements, we conclude that HHSC has acted arbitrarily because it is an abuse of discretion to add an eligibility requirement beyond the federal standards. See Tex. Dep't of Ins. v. State Farm Lloyds , 260 S.W.3d 233, 245 (Tex. App.—Austin 2008, no pet.) (affirming reversal of agency order because it relied on several factors to support agency action and at least one of those factors was legally irrelevant); Harrington , 483 F. Supp. at 1020–21 (holding that agency illegally denied food assistance by imposing eligibility criteria beyond federal standard).
That an applicant might have a path to undoing an improperly imposed requirement does not negate the arbitrariness of the agency's action in imposing work requirements that undermine the federal exemption in the first place. See id. at 1020 ("In light of the illegality of the criteria used, the fact that a rejected public assistance applicant may reapply for emergency food stamps at a Food Stamp Center is irrelevant."). The possibility of good-cause relief from work requirements after agreeing to these terms is not the same result as initial exemption from all work requirements. See id.
Comparing the requirements on a parent caregiver of an incapacitated person versus a child under the age of six further demonstrates the arbitrariness of the "unable to work" requirement. Under accepted tenets of statutory construction, when a legislative body gives two items equivalent placement within the same statutory scheme, the courts presume the legislature intended them to share equal treatment. See FDA v. Brown & Williamson Tobacco Corp. , 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) ("It is a ‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’ ") (quoting Davis v. Mich. Dep't of Treasury , 489 U.S. 803, 809, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989) ); Coleman v. Coleman , 170 S.W.3d 231, 238 (Tex. App.—Dallas 2005, pet. denied) ("We look to the overall structure of the statute to ascertain legislative intent.").
Section 2015(d)(2)(B) exempts two categories of caregivers from SNAP work requirements: those who care for a dependent child under the age of six and those who care for an incapacitated person. They appear in the same exemption subsection. 7 U.S.C. § 2015(d)(2)(B). There is no indication in the structure of the statute that they should receive disparate treatment or have disparate criteria for exemption. Yet, it appears here that only the caregiver of the incapacitated person has to meet the "unable to work" requirement for initial exemption from work requirements, while the caregiver of a child under the age of six does not. There is no statutory framework or structural basis for this difference. Both categories of caregivers are exempted under the same statutory provision with no differentiation made in the federal statutory language—the only eligibility criteria that may legally be applied. Id. § 2015(d)(2).
Nonetheless, HSSC imposes an additional criterion on the caregiver of the incapacitated person—that the caregiver be unable to work, as certified by a physician—or they are categorized as a work-mandated applicant, unlike the caregiver of a young child. This disparate treatment of similarly exempted individuals, with extra state-imposed criteria on one category, is arbitrary. See Harrington , 483 F. Supp. at 1020.
The arbitrary denial of benefits is subject to reversal.
HHSC May Not Characterize its Denial of McClelland's Application as a Non-Substantive Rejection to Avoid Reversal
HHSC argues that McClelland's failure to return verification forms led to a non-substantive denial of benefits, foreclosing our review of its substantive approval processes for arbitrariness.
A state agency acts arbitrarily if it ignores evidence in support of a legally relevant factor for eligibility. Harrington , 483 F. Supp. at 1021 (stating that agency decision may be found to be arbitrary if legally relevant factors were not considered). It is undisputed that McClelland provided HHSC evidence that her daughter is disabled and that McClelland—a single mother—is her sole provider and caregiver. To avoid a finding of arbitrariness, HHSC was required to consider this evidence. See City of El Paso , 883 S.W.2d at 184 (stating that "agency's decision is arbitrary" if the agency "failed to consider a factor the legislature directs it to consider").
HHSC argues it was relieved of doing so because McClelland's application was denied on non-substantive grounds only: she simply did not return "verification forms."
We cannot agree that HHSC provided McClelland a path to a substantive review that she eschewed, causing a non-substantive denial of benefits. According to HHSC's representative's testimony, if the physician does not mark "unable to work," then the Subsection (d)(2) exemption must be denied and the applicant is considered "mandatory" for work requirements. On this testimony, as the earlier flowchart shows, an applicant who works part-time has no path to Subsection (d)(2) exemption. Form H-1836-B dictates the outcome of HHSC's exemption determination. If an applicant cannot get a qualifying answer on that form, then the applicant is subjected to work requirements and penalties. And, if the applicant has pending work-related penalties already attached to their file—as McClelland did—then the applicant is administratively denied benefits altogether, unless she agrees to being subject to work requirements, using Form H-1808.
In this context, these forms cannot be characterized as non-substantive verification forms. The forms create a scenario in which only one answer allows exemption and all others result in work requirements or automatic administrative denial. The forms establish an eligibility requirement.
Moreover, the Hearing Officer treated Form H-1836-B as a substantive hurdle to exemption, not merely a verification form. The Hearing Officer's eighth finding of fact stated that McClelland submitted evidence of her child's disability but held that it established only that she had a "disabled" child, not that she had an "incapacitated" child. Only Form H-1836-B, with "unable to work" checked, could satisfy that requirement for a Subsection (d)(2) exemption, under the Hearing Officer's evaluation.
When an agency's use of its forms cuts off all routes to substantive review of eligibility and mandates that an applicant face administrative denial, it cannot be dismissed as mere "verification forms" to avoid a judicial determination of arbitrariness.
HHSC's reliance on Form H-1836-B's "unable to work" criterion for Subsection (d)(2) exemption added a requirement not found in the federal statute and was arbitrary. See State Farm Lloyds , 260 S.W.3d at 245 (affirming reversal of agency order because it relied on several factors to support agency action and at least one of those factors was legally irrelevant); Harrington , 483 F. Supp. at 1021 (holding that agency illegally denied food assistance by imposing eligibility criteria beyond the federal standard).
This violated the federal eligibility standards, disregarded the mandate that caregivers who are responsible for the care of an incapacitated person are exempt from all work requirements and penalties, and constituted an arbitrary eligibility process that exceeds HHSC's discretion.
In doing so, HHSC has impermissibly changed the default setting for caregivers like McClelland. Under the federal standard, a caregiver who is responsible for the care of an incapacitated person is fully exempt from work requirements and the imposition of any penalties associated with work requirements. Under the HHSC's approach, if such a caregiver has a part-time job, she is automatically assigned work requirements with associated penalties and sanctions and has to find a way out of their grasp. In the process, she may have to quit her job and reduce her household to no income, accept a full-time job that is incompatible with her care obligations to her incapacitated child, or otherwise assume burdensome work and work-training requirements and then apply for "good cause" relief that may or may not be granted. All the while, under the plain terms of the federal statute, McClelland, who is indisputably the sole provider and caregiver of a disabled child, remains a parent with "responsibility for the care of ... an incapacitated person," as those undefined terms are commonly understood.
Summary
Under HSSC's application process, a person who claims to meet the criteria for exemption under Subsection (d)(2) must submit Form H-1836-B to have her application reviewed as a work-exempt applicant. HSSC describes Form H-1836-B as a verification form, signaling that it uses the form to verify exemption status.
HSSC's representative unequivocally testified that an applicant's work exemption will be denied unless the physician selects the option that the applying caregiver "is unable to work" due to "caring for a disabled family member." The federal exemption statute, though, does not require that a caregiver be completely unable to work. Instead, the federal statute requires only that the caregiver have "responsibility for the care" of the incapacitated person. 7 U.S.C. § 2015(d)(2)(B) ; see 7 C.F.R. § 273.7(b)(1)(iv).
McClelland has a part-time job. As HHSC uses this form, McClelland, and any other part-time worker who applies for SNAP benefits as a work-exempt applicant, is automatically processed as a work-mandated applicant because the only qualifying selection on the form cannot be met. Once an applicant is categorized as a work-required applicant, the application-review process triggers work-related penalties and sanctions, and the applicant must clear the penalties to be eligible for SNAP benefits or face automatic administrative denial.
In this case, a work-related sanction was triggered by McClelland's failure to submit a qualifying H-1836-B statement of inability to work. The proposed method HHSC gave McClelland to clear the sanction was to agree in writing, using Form H-1808, that she was required to work.
At that point, HHSC considered McClelland's application for SNAP benefits as though she were a work-mandated applicant. Her only avenue to be relieved of work requirements was to, first, agree to be bound by them, and, second, show good cause and request that HHSC not enforce the work requirements.
This process changed the default position in a way that imposed work-related sanctions on a caregiver who is responsible for the care of an incapacitated person. The federal statute expressly prohibits state agencies from doing so. 7 U.S.C. § 2014(b). HHSC's process added an exemption-eligibility requirement beyond Section 2015(d)(2)(B) ’s terms—that McClelland be completely unable to work. There is no access to exemption from work requirements without first being subjected to work requirements and then asking to be relieved of them. Reading the statute to allow an additional eligibility requirement contravenes one of the tenets of statutory construction, which is to interpret the statute as a whole and give effect to every part, including the part exempting applicants who are responsible for the care of incapacitated household members from any work requirements or sanctions. See City of San Antonio v. City of Boerne , 111 S.W.3d 22, 25 (Tex. 2003).
Conclusion
Having concluded that HHSC impermissibly imposed additional criteria beyond the applicable federal standard and based its decision on a legally irrelevant factor—inability to work at all due to care obligations—we conclude that HHSC acted arbitrarily and outside its discretion. We reverse the trial court's judgment and render judgment remanding the matter to HHSC for additional consideration of McClelland's application and any updates to the application that might have become necessary given the length of time that has passed since her original application was reviewed. See TEX. R. APP. P. 43.2(c).