On May 26, 2011, General Assistance recipients in Alameda County won a significant legal victory which will protect thousands of GA recipients throughout California from becoming homeless due to an illegal county policy. In an eloquent, unanimous opinion, in Cleary v. Alameda County the California Court of Appeal invalidated Alameda County’s W-9 policy which drastically cut GA grants if the recipients’ landlords did not file W-9 tax forms. If landlords did not file these forms, the County would deny recipients the housing portion of their aid, leaving them, through no fault of their own, $105 per month or $3.50 per day on which to survive.
Alameda County claimed it was obligated under federal tax law to report rent payments it made to GA recipients’ landlords from the recipients’ GA stipends even though it had been diverting a portion of GA recipients’ rent directly to their landlords for 20 years without making these reports. In January 2009, when the County suddenly announced its W-9 policy The Public Interest Law Project (PILP) and Bay Area Legal Aid (BALA) asked that the County drop this unlawful and inhumane policy, and when it refused, filed suit. While the case was pending, the County revised its policy many times, eventually branding it as one of ‘in kind aid’ and promising to offer shelter beds to GA recipients whom it forced into homelessness. Nearly a year after the suit was filed, and on the eve of trial, the County procured an opinion letter from the I.R.S. that it had the right to demand landlords’ W-9s. But PILP argued that the I.R.S. letter should be given little weight, and that in any event, any tax reporting obligation could not justify slashing recipients’ aid based upon the conduct of their landlords.
On December 23, 2009, calling the grant cut “cruel,” the Honorable Frank Roesch of the Alameda County Superior Court issued a writ of mandate, ordering the County to abandon its W-9 grant cut. The court found that no tax reporting obligation actually existed and the County had obtained its I.R.S. opinion letter based upon sworn representations that were “untrue,” and agreed with the petitioners’ argument that even if a reporting obligation had existed, the federal tax laws cannot override a county’s obligations under the California welfare statutes to provide last resort assistance. The County appealed.
The Court of Appeal affirmed the trial court’s decision, agreeing that even if a tax reporting obligation existed, which it did not, “the County may not voluntarily implement a policy which conflicts with the mandates of the general assistance law.” Furthermore, the Court said, “a policy which fosters homelessness is inimical to the very purpose of GA legislation.”
Cleary has statewide importance. Many other counties reduce or even deny GA recipients’ aid if their landlords do not supply their Social Security Numbers. With the publication of Cleary, they will presumably abandon these unlawful policies. More broadly, the decision reemphasizes that GA must be administered humanely, and declares that a policy that forces people who have homes to become homeless in order to receive any housing aid is inhumane and violates state law.
Paul Hastings Janofsky and Walker LLP joined PILP and Bay Legal after judgment was entered in the Trial Court, and provided invaluable wisdom on the appeal brief. Five long-time friends of PILP, Legal Services of Northern California, Coalition of California Welfare Rights Organizations, Homeless Action Center, Asian Law Alliance, and the California Tax Reform Association, joined in two very effective amicus briefs. The amicus briefs were drafted by attorneys at Shearman & Sterling LLP and Dechert LLP. All of the amici, Western Center on Law and Poverty, Legal Aid Society of Orange County, CRLA and others joined in letters requesting publication of the decision, and the request was granted on June 17, 2011.