March 3, 2009
G. & S.B.-P., APPELLANTS,
NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF FAMILY DEVELOPMENT, AND HUNTERDON COUNTY BOARD OF SOCIAL SERVICES, RESPONDENTS.
On appeal from a Final Decision of the Department of Human Services, Division of Family Development, Docket No. S410506.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 4, 2009
Before Judges Cuff and Baxter.
Claimants, G.B.-P. and S.B.-P.,*fn1 appeal from a March 20, 2008 final decision of the New Jersey Department of Human Services, Division of Family Development (DHS), accepting an Administrative Law Judge's (ALJ) determination that the monthly internet service fee claimants sought to deduct from their income to increase the amount of their food stamp (FS) benefits was not an allowable medical cost.*fn2 We affirm.
Claimant sustained severe brain trauma from a 2002 cerebral aneurism, and consequently suffers from impaired memory, confusion, attention deficits, anxiety, balance problems, and insomnia. She copes with those problems by using a computer purchased for her by the Traumatic Brain Injury Fund. She uses both her computer, and the internet service to which the computer is connected, to communicate with her state agency case managers, medical professionals, state brain injury associations and a brain injury support group. She also uses an internet-based instant-messaging service to receive biofeedback therapy from a doctor located in Brick Township, a considerable distance away from her home in Hunterdon County. In addition, claimant uses an online calendar to remind her of essential tasks, such as medical appointments and taking her medicine, and sends out as many as fifty e-mails each day related to her illness. Claimant's doctor described her need for access to internet service as "imperative."
The purpose of the FS program is "to promote the general welfare and to safeguard the health and well being of the population by raising the levels of nutrition among low-income households." N.J.A.C. 10:87-1.1. Individuals enrolled in the FS program are permitted to deduct medical costs, including costs of medical equipment, from their income for the purpose of calculating the specific amount of FS benefits that the household will receive. The applicable regulation provides:
(i) The following items are allowable medical costs:
Prescription drugs when prescribed by a licensed practitioner authorized under State law and other over-the-counter medication (including insulin) when approved by a licensed practitioner or other qualified health professional; in addition, costs of medical supplies, sick-room equipment (including rental) or other prescribed equipment are deductible[.] [N.J.A.C. 10:87-5.10(a)(3)(i)(3) (emphasis added).]
Interpretation of the term "costs of . . . other prescribed equipment," as set forth in N.J.A.C. 10:87-5.10(a)(i)(3), is the sole issue on appeal.
In May 2007, during a periodic reverification of claimant's FS benefits, she attempted to treat her monthly internet service fee as a medical expense and deduct it from her household income. Had Hunterdon County Board of Social Services (HCBSS) agreed to treat claimant's internet service fee in such a fashion, claimant's monthly FS benefits would have been increased. On July 30, 2007, HCBSS notified claimant that although she would continue to receive FS benefits, the dollar amount of those benefits would not be increased because internet service is not deductible as a medical cost under N.J.A.C. 10:87-5.10(a)(3)(i)(3). Claimant's request for a hearing was transmitted to the Office of Administrative Law (OAL), which set the matter down for an evidentiary hearing before an ALJ.
During that hearing, HCBSS explained why it had refused to treat claimant's internet service fee as a medical cost. HCBSS also provided an e-mail response it had received from Ellen Thaler, Program Specialist, United States Department of Agriculture (USDA). Thaler explained that if a physician declares a "telephone aid/internet connection" medically necessary, the medical deduction would "apply to the actual installation and monthly costs directly associated with the system." Thaler further explained that the "medical deduction applies to fees associated with the actual device, not the monthly telephone (or in this case internet) service." Claimant's testimony included a description of her illness and an explanation of her need for an internet connection.
In his February 20, 2008 decision, the ALJ agreed with HCBSS that claimant's monthly internet service cost is not deductible as a medical cost under N.J.A.C. 10:87-5.10(a)(3)(i)(3). Although the ALJ did not dispute claimant's "need for internet service," he explained that N.J.A.C. 10:87-5.10(a)(3)(i)(3) only "concerns costs for prescribed equipment," and concluded that claimant's internet services "do not fall within the language of 'prescribed equipment' and are, therefore, not an allowed medical cost." Shortly thereafter, DHS adopted the ALJ's decision, and affirmed his findings and conclusions. On appeal, claimant argues that the agency's final decision is "clear error" that misinterprets and misapplies the regulation.
"Appellate courts ordinarily accord deference to final agency actions, reversing those actions if they are 'arbitrary, capricious or unreasonable or [if the action] is not supported by substantial credible evidence in the record as a whole.'" N.J. Soc'y for the Prevention of Cruelty to Animals v. N.J. Dep't of Agric., 196 N.J. 366, 384-85 (2008) (citation omitted). Furthermore, a strong presumption of reasonableness attaches to the action of an administrative agency. In re Tax Credit Application of Pennrose Props., Inc., 346 N.J. Super. 479, 486 (App. Div. 2002).
This court must "give due deference to the views and regulations of an administrative agency charged with the responsibility of implementing legislative determinations." Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987). "Regulations are subject to the same rules of construction as a statute, should be interpreted in accordance with the plain meaning of their language, and in the manner that makes sense when read in the context of the entire regulation." Czar, Inc. v. Heath, 398 N.J. Super. 133, 138 (App. Div.) (quoting Medford Convalescent v. Div. of Med. Assistance, 218 N.J. Super. 1, 5 (App. Div. 1985)) (internal citations omitted), certif. granted, 195 N.J. 414 (2008).
Claimant argues that her computer meets the regulatory definition of "prescribed equipment," and that the relevant regulation, which uses the plural form of "costs" rather than "cost," should be interpreted to cover derivative costs of "prescribed equipment," such as her internet service fees. In contrast, the agency argues that "because the plain language of N.J.A.C. 10:87-5.10(a)(3)(i)(3) does not allow the deduction of monthly internet service fees as a medical expense, DFD's March 20, 2008 final agency decision should be affirmed."
A review of the relevant language of that subsection demonstrates the reasonableness of the agency's conclusion that claimant's monthly internet service fees associated with the use of her computer are not deductible. By adopting the ALJ's decision, DHS held that the plain meaning of the term "costs of . . . other prescribed equipment" does not include the internet service costs associated with claimant's computer. DHS argues, and we agree, that a plain reading of the phrase "costs of . . . other prescribed equipment" includes expenditures associated with the actual prescribed equipment.
Such expenditures would include the purchase and installation of the computer and of any necessary peripherals, as well as expenditures for any repair costs. So viewed, internet service is not an equipment cost. Thus, a plain reading of the regulation supports the agency's interpretation. We note that the agency's conclusion is bolstered by the interpretive advice received from the U.S. Department of Agriculture, which is its funding agency. DHS was entitled to rely on that advice.
DHS's conclusion receives additional support when the language of the regulation at issue here, N.J.A.C. 10:87-5.10(a)(3)(i)(3), is compared to the language of N.J.A.C. 10:87-5.10(a)(7)(i)(3), which is a FS regulation that governs the deductibility of telephone fees as part of a recipient's "shelter costs." Unlike the regulation under review in this appeal, N.J.A.C. 10:87-5.10(a)(7)(i)(3) carves out separate deductions for "the basic service fee, 911 fee, subscriber line charge, universal service fee, relay center surcharge, wire maintenance fee, plus tax, for one telephone[.]" Plainly, this latter regulation spells out a separate deduction for a telephone and the costs necessary for a telephone to actually operate. In contrast, N.J.A.C. 10:87-5.10(a)(3)(i)(3) is devoid of any separate deduction that would apply to costs such as the monthly internet service fees that permit the computer to actually operate. Thus, the agency has interpreted the regulation in a manner that makes sense when read in the context of the entire regulatory scheme. Czar, Inc., supra, 398 N.J. Super. at 138.
Moreover, claimant has failed to rebut the presumption that the agency acted reasonably. She argues that because the regulation uses the term "costs" rather than "cost," a deduction "is not available just for the cost of the 'prescribed equipment,' but also for other additional costs." In support of this argument, claimant relies on Stransky v. Cummins Engine, 51 F.3d 1329, 1335 (7th Cir. 1995), where the United States Court of Appeals for the Seventh Circuit interpreted the term "coming down on their cost curves." The Seventh Circuit held that the plural term "cost curves," which had been used in the defendant's press release, could have included derivative costs, including labor, marketing, and warranty costs. Ibid.
Stransky is not persuasive authority in the context of the present appeal. Unlike the instant matter, Stransky did not involve the interpretation of an administrative regulation. Instead, Stransky involved the Seventh Circuit's de novo review of a United States District Court's decision to dismiss the claimant's complaint pursuant to F.R.C.P. 12(b)(6). Id. at 1330. Under such a standard, the Seventh Circuit was obliged to accept well-pled facts as true, making all reasonable inferences in favor of the non-movant claimant. Ibid. In interpreting the ambiguous wording at issue, the Seventh Circuit held that "on a motion to dismiss [the court] should make all reasonable inferences in favor of [non-movant claimant] and should not resolve the interpretation of the press release against [non-movant claimant]." Id. at 1335.
The Seventh Circuit's reasoning is not persuasive in the context of this appeal because there, unlike the present appeal, the court was obliged to view the language at issue in a light favorable to the claimant. Ibid. Here, in our review of agency action, the scales tilt differently. We are obliged to view the agency's interpretation of its regulation with deference, and afford a presumption of reasonableness to the agency's final determination. Barone, supra, 210 N.J. Super. at 285. When construing a regulation, we are not obliged to construe it in claimant's favor, as the Seventh Circuit was required to do in Stransky.