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Where a statute provides a choice between one option or another, the court will respect a state agency's decision.



Petitioners applied for Medicaid with the Suffolk County Department of Social Services ("DSS"). Both federal and state Medicaid statutes prescribe ineligibility periods for individuals who make transfers of assets for below-market value. In pertinent part, the state provision, Social Services Law § 366(5)(d)(4), reads: "[t]he period of ineligibility shall begin with the first day of the first month during or after which assets have been transferred for less than fair market value." After hearings, the county DSS fixed Petitioners' periods of ineligibility to start on the first day of the first month after the transfers.

Petitioners brought administrative challenges, and the state DSS sustained the county DSS. Petitioners then brought an Article 78 proceeding, arguing that the statute required the DSS to commence ineligibility on the first day during, not after, the month in which the transfer took place. The supreme court ruled for Petitioners and ordered that the agency calculate the ineligibility period from the month of the transfer. The Appellate Division affirmed. The Court of Appeals reversed and dismissed Petitioners' complaints.



Whether a Medicaid statute specifying that an ineligibility period should begin on "the first day of the first month during or after" a below-market value transfer allows the Department of Social Services to choose to begin the period in the month after the transfer.


Yes. The court's role in interpreting statutes is to give effect to legislative intent. The use of the disjunctive "or" gives plain-language support for such an interpretation and an alternative interpretation would render another section of the statute meaningless. This interpretation is reinforced by the fact that a previous version of statute did not use the disjunctive.


Cases Cited by the Court

Other Sources Cited by the Court


State of the Law Before Brown

The Health Care Financing Administration's State Medicaid Manual gives states the option of starting the ineligibility period either during or after the month of the transfer. H.C.F.A. State Medicaid Manual § 3257 at 3-3-109.7. A previous version of the statute started the ineligibility period "with the month in which such resources were transferred," and the 1993 amendment changed the language to "during or after." 42 U.S.C. § 1396p (1994). The House Conference Report on the amendment, however, describes the current "period of delay" as beginning "with the first month during which the assets were disposed of." H.R. Rep. No. 103-213 (1993). In Golf v. N.Y. State Dept. of Soc. Servs., the Court of Appeals respected an agency's discretion in choosing one of two alternatives when the statute's plain meaning implicitly permitted either reading. Golf v. N.Y. State Dept. of Soc. Servs., 91 N.Y.2d 656 (N.Y. 1998). In that case, the statute left a critical term undefined.

Effect of Brown on Current Law

In Brown, the Court of Appeals found this to be a simple case of statutory construction. The court's role in such cases is to give effect to the will of the Legislature. The statute at issue allows the commencement date to begin on the first day of the month a transfer occurs or on the first day of the month after the transfer occurs. The court held that the use of "or" is enough in itself to demonstrate the legislature's intent. The court, however, also looked to the fact that a previous version of the statute started the ineligibility period only on the first day of the month in which funds were transferred.

The Court of Appeals held that when a statute explicitly grants more than one permissible alternative to an agency, a court should interpret the statute to allow the agency to choose either alternative. The "plain meaning" of the relevant federal and state statutes provides that the ineligibility periods for Medicaid may be calculated on "the first month during or after which assets have been transferred for less than fair market value." 42 U.S.C. § 1396p(c)(1)(D); Social Services Law section 366(5)(d)(4) (emphasis added). Thus, the Department of Social Services may measure a Medicaid applicant's ineligibility period beginning with either the month during the below-market asset transfer or the month after such transfer.

Unanswered Questions

One issue the court did not resolve is whether it would respect a state agency's choice of an alternative statutory interpretation if such a reading conflicted with another section of the statute or rendered it meaningless. Although not addressed, this situation could serve as a limit on an agency's discretion with respect to statutory interpretation. Furthermore, if an agency's statutory interpretation provided for an absurd result, would the court overrule such an interpretation? The court in NatÁl Ctr. For Mfg. Sciences, Inc. v. City of Ann Arbor, 563 N.W.2d 65 (Mich. App. 1997) held that it would respect a party's reliance upon the plain meaning of statutory language unless it provided for an absurd result. The next question to ask would be what degree of absurdity would provoke the court to overrule an agency's statutory interpretation.

Survey of the Law in Other Jurisdictions

Jurisdictions in Maine, Pennsylvania, Florida, and Michigan have addressed the issue of whether to rely upon the plain meaning of the disjunctive "or" in a particular statute. Bureau of Employee Relations v. Maine Labor Relations, 611 A.2d 59 (Me. 1992) (holding that as a general rule, the use of "or" in a statute indicates that those alternatives should be treated separately); Forty -fourth Borough v. Kozich, 669 A.2d 469 (Pa. Commw. 1995) (holding that the use of the word "or" in an employee reduction statute containing the phrase "of the police or fire force" required the borough to apply the force reduction formula to fire fighters when reducing the employees of that department or to police officers when reducing its police force); DM v. State, 712 So.2d 1204 (Fla. Dist. Ct. App. 1998) (holding that the word "or" in the statute rendering it unlawful "to solicit, induce, entice, or procure another to commit prostitution, lewdness, or assignation" fails to support the argument that a charge of enticing to lewdness is not a crime pursuant to the statute in the case where the prosecution has not established proof of prostitution); NatÁl Ctr. For Mfg. Sciences, 563 N.W.2d 65 (holding that when interpreting a statute, a party should rely upon the plain meaning of "or" unless an absurd outcome would result).

Prepared by:

  • Suchir Batra '01
  • Bill Hawkins '00
  • Deanne Lew '01
  • Sheila Peluso '01
  • Evan Williford '01