State may pay $1.5M in suit over welfare

By Kevin Dayton
Advertiser Capitol Bureau Chief

Former welfare recipient Carl Foytik believed the state owed millions of dollars to thousands of people like him for improperly cutting welfare benefits in the late 1990s.

Carl Foytik calls the lawsuit settlement a moral victory. Gregory Yamamoto • The Honolulu Advertiser

But the bearded and brainy Foytik wasn't satisfied. He urged local lawyers to file a class-action lawsuit over the same issues, and last week the state announced a tentative settlement to repay up to $1.5 million to people like him who were on general assistance welfare from 1996 to 1999.

"Carl is my hero," said lawyer Eric Seitz, who joined the case years ago at Foytik's request. "Carl did this and won this himself, and it's astounding that he did that."

Foytik doesn't stand to gain any money from the new settlement because his own claim was already paid.

Foytik, 57, has since gotten off welfare and enrolled in the University of Hawai'i law school, from which he is scheduled to graduate this spring. He said he isn't entirely satisfied with the settlement, but considers it a moral victory.

"They were paying people $268 a month to live on when there was enough money appropriated to pay them $340," Foytik said. "It's grotesque."

Officials for the state Department of Human Services previously said no back payments were required, and said they reduced the general assistance payments to stretch their budget to be sure the program did not run out of money at the end of the year. Yesterday, Human Services officials referred questions about the settlement to lawyers for the welfare recipients.

Glenn Melchinger, a lawyer who is handling the case for the welfare recipients, said he could not comment on the proposed settlement yesterday because statements about the case must be coordinated between the state attorney general's office and others involved in the matter.

The dispute began when Foytik was living in Hilo in 1996, attending college and living off food stamps, student loans and welfare benefits. He had not worked steadily in many years, and qualified for general assistance welfare after being diagnosed with a temporary psychological disability.

Foytik saw his monthly payment cut from $418 a month to $217, and decided to challenge the reductions. In a long series of carefully prepared filings researched in public law libraries, Foytik made his case and his appeal.

In 1998, the Hawai'i Supreme Court agreed with Foytik that rules adopted by the Department of Human Services to cut general assistance welfare benefits were invalid.

Foytik later went back to court to collect what he was owed when the state was slow to pay, and attempted to organize the players for a class-action suit to have money refunded to others who were on welfare at the time.

The settlement allows back payments of up to $55 per month for each month a person was on general assistance welfare from March 1996 to February 1999, the months that the invalid rules were in effect, according to a memorandum of understanding.

In addition to the $1.5 million to pay claims, the state will also have to pay legal fees of up to $180,000 to the lawyers who represented the welfare recipients, according to the memo. The settlement is subject to approval by Circuit Court Judge Sabrina McKenna, who will consider the matter Monday.

If McKenna approves, the state will advertise the settlement and mail notices to all people who are believed to have claims. It isn't clear how many people might qualify.

Foytik believes the state is repaying about a dime for every dollar the welfare payments were reduced, but said the deal is "better than a rock in your shoe."

"I think it's a little low, but I think it's good to get a settlement," he said. "These are people who can well use a few hundred dollars."

For more information about the proposed settlement, go to the Alston Hunt Floyd & Ing Kihara Action Web site.

Reach Kevin Dayton at kdayton@honoluluadvertiser.com or 525-8070.