## Facts

- A certified class of New Jersey AFDC recipients challenged New Jersey’s “Family Development Program” (FDP), approved by the Secretary of Health and Human Services under a § 1115 waiver.
- The FDP included a “Family Cap” that generally denied any increase in AFDC cash assistance for additional children born while the family was already receiving AFDC (subject to limited exceptions).
- New Jersey applied for the waiver; in July 1992 the Secretary approved it, allowing statewide implementation.
- Plaintiffs alleged the Family Cap pressured welfare recipients’ reproductive decisions by tying the choice to have another child to the denial of increased subsistence benefits for that child.
- Plaintiffs sued federal and state officials and agencies, asserting constitutional claims (due process and equal protection), statutory claims under the Social Security Act, and Administrative Procedure Act (APA) claims.
- The parties filed cross-motions for summary judgment.

## Issues

1. Whether the Secretary’s approval of New Jersey’s § 1115 waiver for the FDP, including the Family Cap, exceeded statutory authority or was arbitrary and capricious under the APA.
2. Whether the Family Cap violated substantive due process by directly and substantially interfering with the right to procreate.
3. Whether the Family Cap violated equal protection by drawing irrational or impermissible classifications among AFDC families or by burdening poor women on welfare.

## Decision

- Plaintiffs’ motion for summary judgment was denied.
- Defendants’ cross-motions for summary judgment were granted, and the complaint was dismissed.
- The court held the § 1115 waiver approval was within the Secretary’s broad discretion and was not arbitrary, capricious, or contrary to law under the APA.
- The court held the Family Cap did not unconstitutionally burden procreative liberty because it did not directly prohibit or penalize childbirth; it declined to increase benefits.
- The court applied rational basis review to the equal protection claims and upheld the Family Cap as rationally related to legitimate governmental interests.

## Legal Principles

- § 1115 of the Social Security Act gives the Secretary broad discretion to waive AFDC requirements for experimental, pilot, or demonstration projects that the Secretary judges likely to further program objectives.
- Under APA review, courts assess whether the agency considered relevant factors and articulated a rational connection between the record and the decision; courts do not substitute their policy judgment for the agency’s.
- Governmental refusal to subsidize the exercise of a constitutional right is generally distinct from a direct restriction on that right; benefit-allocation rules are not necessarily coercive burdens on fundamental rights.
- Poverty or welfare status is not a suspect classification, and absent a direct burden on a fundamental right, equal protection challenges to welfare benefit rules are reviewed under rational basis.
- Under rational basis review, a welfare policy may be upheld if it is rationally related to legitimate interests such as cost containment, encouraging work, and promoting personal responsibility, without requiring proof of effectiveness.

## Conclusion

The court upheld HHS’s approval of New Jersey’s § 1115 waiver and the Family Cap, concluding the waiver decision satisfied the APA and the program did not violate substantive due process or equal protection because it reflected a permissible benefit-allocation choice rationally related to legitimate governmental objectives.


C.K. v. Shalala, 883 F. Supp. 991 (D.N.J. 1995)