The U.S. Supreme Court case Washington State Department of Social and Health Services v. Guardianship Estate of Danny Keffeler, 2002, revolved around the issue of whether federal law prohibits a state from reimbursing itself for foster care maintenance costs by taking funds that the Social Security Administration (SSA) pays to foster children. The court held that neither the Social Security Act nor SSA regulations prohibit states from using these benefits in this way. The plaintiffs argued that such use violated their property rights under federal law but failed to identify any specific statutory or regulatory provision supporting their claim. Therefore, it was ruled that there is no violation as long as the state agency acts only as a representative payee and uses social security benefits for purposes defined by Congress - including support and medical expenses.

In the dissenting opinion for Washington State Department of Social and Health Services v. Guardianship Estate of Danny Keffeler, Justice Stevens argued that federal law does not preempt state law in this case. He contended that the majority misinterpreted the Social Security Act's anti-alienation provision, which he believed was intended to protect beneficiaries from third parties rather than from state agencies acting on their behalf. Furthermore, he disagreed with the majority's interpretation of 42 U.S.C §407(a), arguing it should be read as a prohibition against legal processes initiated by creditors seeking to attach or garnish social security benefits - not as a blanket ban preventing states from managing funds for incapable beneficiaries' best interests. Therefore, according to Justice Stevens, Washington’s practice did not violate federal laws because they were acting within their capacity as representative payees and using these funds appropriately for care and maintenance expenses.