Batterton v. Francis

Supreme Court of the United States · 1977 · Corporations

432 U.S. 416 (1977)

Updated August 22, 2026

CorporationsAdministrative lawSocial SecurityAFDC-UFFederal-state programsexpress delegationlegislative regulationsunemployment

Facts

The case concerned the validity of 45 CFR § 233.100(a)(1), a regulation issued by the Secretary of HEW under § 407(a) of the Social Security Act governing AFDC-UF eligibility. The regulation generally required states to treat a father working less than 100 hours per month as unemployed, but allowed a state to exclude a father whose unemployment resulted from participation in a labor dispute or from conduct or circumstances that would disqualify him for state unemployment compensation. Maryland had a rule denying AFDC-UF benefits when need resulted from disqualification for unemployment insurance, affecting classes including fathers discharged for misconduct and fathers out of work because of a strike. The lower courts concluded that the amended federal regulation conflicted with the statute because it treated some jobless fathers as not unemployed and impermissibly left too much discretion to the states.

Issue

Whether the Secretary of HEW, acting under § 407(a) of the Social Security Act, could validly define unemployment for AFDC-UF purposes to allow states to exclude fathers disqualified under state unemployment compensation law and to retain some state options, including exclusion for labor-dispute participation. More specifically, the question was whether 45 CFR § 233.100(a)(1) exceeded the Secretary's statutory authority or was otherwise invalid.

Rule

Where Congress expressly delegates to an agency authority to prescribe standards defining a statutory term, the agency's regulation is entitled to more than mere deference and has legislative effect. A reviewing court may invalidate such a regulation only if the agency exceeded its statutory authority or if the regulation is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; the agency may adopt a definition that reflects recognized concepts of the term and does not defeat the statute's purpose, and the Secretary's standards may permit some state options so long as they adequately promote the statute's goal.

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Congress creates a cooperative family-assistance program for participating states and provides benefits to children deprived of support by a parent's "underemployment, as determined in accordance with standards prescribed by the Secretary." The Secretary issues a regulation excluding parents who work fewer than 90 hours a month if they are out of work because they were suspended for conduct that would disqualify them under state wage-insurance law. A federal judge in Denver thinks the better reading is that anyone working fewer than 90 hours is underemployed.

How should a reviewing court analyze the regulation?

Explanation. Where Congress expressly delegates authority to prescribe standards defining a statutory term, the resulting regulation has legislative effect. A court may not set it aside merely because it would read the statute differently. Review is limited to whether the agency exceeded statutory authority or whether the rule is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.