MEMORANDUM OPINION AND ORDER
JOHN LEWIS SMITH, Jr., District Judge.
Plaintiffs challenge the federal food stamp program policy of refusing to issue retroactive stamps to eligible households wrongly denied stamps due to administrative errors. The federal food stamp program has had a turbulent history. Retroactive benefits have been alternately denied by two administrative instructions and reinstated by a statutory amendment, administrative regulations, and finally by a federal court order.
Plaintiffs ask that this issue be finally resolved by permanently enjoining the federal policy and declaring it unconstitutional.
Plaintiffs act for themselves and for the class of impoverished persons who, having won "fair hearing" determinations that stamps were wrongly withheld, have been consistently denied retroactive benefits pursuant to Food and Nutrition Instruction 732-14, Sec. V-D. In each case, deprivation of food subsidies for periods of several months denied plaintiff households nutritionally adequate diets and/or forced them to incur substantial debt from attempting to afford both adequate food and household necessities. These consequences persist despite plaintiffs' reinstatement to the food stamp roles, leaving some households with a malnourished child and others forced to use money intended for food to repay a burgeoning debt. This cause is certified as a class action, having met the requirements of Rule 23, Federal Rules of Civil Procedure, and being further warranted by the need for the federal defendants to implement a uniform policy nationwide.
After a hearing on the motion for injunctive and declaratory relief and opposition thereto, and consideration of plaintiffs' motion for summary judgment, the Court enters the following order and memorandum opinion which shall constitute final findings of fact and conclusions of law.
The irreparable harm to the plaintiff class is conceded by both parties to this action, and the only remaining issues are whether plaintiffs have a right to be made whole and, if so, who bears that responsibility.
On the latter point, the government argues that the states are responsible for paying for retroactive stamps and because of the failure to join them as indispensable parties this action should be dismissed under Rule 19, Federal Rules of Civil Procedure. The gravamen of this argument is that the states, as exclusive administrators of the program, assume the costs of administrative expenses, one of which is retroactive stamps. The government makes the additional argument that any other arrangement would be inconvenient since local errors can only be investigated locally. The Court finds, however, that joinder is not warranted. The states fail to meet the standard for indispensability set in Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S. Ct. 733, 19 L. Ed. 2d 936 (1968), i.e., that the action can not proceed without the states and still provide the relief due without impairing the interest of those absent. The present action merely adjudicates the rights of plaintiffs vis a vis the federal defendants, and requests only rescission of a federal policy. Further, a decree for relief can obviously be drafted so as to protect any interest the states might have. In any event, the argument for joinder assumes the strength of the government's case on the merits, i.e., that the states are liable for retroactive stamps. However, the Court holds that the federal defendants are liable for retroactive relief due the affected class. The most persuasive support for this holding is the fact that the Food Stamp Act shows a congressional intent to have program benefits paid by the federal government and a portion of the administrative expenses paid by the states. (7 U.S.C. §§ 2023(d), 2024, 2025) The District Court in Tindall v. Hardin, 337 F. Supp. 563, recognized this intention in the program's operation:
The coupons are accepted at face value by grocery concerns approved to participate in the plan, and are eventually redeemed at face value by the federal government.
There is little merit to the argument that retroactive stamps are an administrative cost, since it is quite clear that they represent a budgeted expenditure inadvertently saved through administrative error. Further, making forward adjustments would eliminate defendants' concern over a potential black market developing from the windfall of stamps issued retroactively.
The federal policy of denying retroactive benefits violates the purposes of the Food Stamp Act,
and its grant of a fair hearing to those aggrieved by government action. 7 U.S.C. § 2019(e)(6). Plaintiffs' statutory entitlement cannot be denied without due process. Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970). Clearly, the sham hearing provided, one which plaintiffs cannot win, falls far short of fifth amendment requirements.