SSR 74-27c: SECTIONS 205(g), 228(a) and (e) (42 U.S.C. 405(g), 428(a), and 428(e)). -- SPECIAL AGE 72 PAYMENTS -- APPLICATION AND RESIDENCE REQUIREMENTS -- CONSTITUTIONALLY AS TO PUERTO RICAN RESIDENTS

20 CFR 404.374(a)

SSR 74-27c

Ramon Murga v. Secretary, U.S.D.C., D. of P.R., Civ. No. 351-70 (12/30/71) (CCH, U.I.R., Fed. Para. 16,524)

Where plaintiff, in challenging constitutionality of inapplicability of special age 72 payment provision in section 228 of the Social Security Act to Puerto Rican residents, failed to file application for such payment, held, plaintiff not entitled to relief since (1) filing of application is prerequisite to entitlement to all benefits under title II of Social Security Act; and (2) Congressional restriction of such special payment to residents of 50 States and District of Columbia does not raise constitutional question since U.S. Constitution does not extend to Commonwealth of Puerto Rico. Domestic laws of the United States and constitutional guarantees operate in Commonwealth only insofar as Congress intends for them to do so.

CANCIO, Chief Judge: In the case the plaintiff challenges the constitutionality of Section 228 of the Social Security Act, 42 U.S.C. 428, as it is applicable to residents of the Commonwealth of Puerto Rico. The defendant has filed a motion to dismiss the action. Upon filing of memoranda of law by both parties the court is fully advised on the premises and as much as I would like to be wrong, I cannot grant the remedy sought in this case. The applicable law does not allow me to act differently and therefore defendant's motion to dismiss is ruled to be well taken.

The law applicable to this case is the following:

Section 228 of the Act, 42 U.S.C. 428 which in its pertinent parts reads:

"(1) has attained the age of 72.

"(2)(A) attained such age before 1968, or (B) has not less than 3 quarters of coverage, whenever acquired, for each calendar year elapsing after 1966 and before the year in which he attained such age.

"(3) is a resident of the United States (as defined in subsection (c)), and is (A) a citizen of the United States or (B) an alien lawfully admitted for permanent residence who has resided in the United States (as defined in section 210(i)) continuously during the 5 years immediately preceding the month in which he files application under this section, and

"(4) has filed application for benefits under this section, shall (subject to the limitations in this section) be entitled to a benefit under this section for each month beginning with the first month after September 1966 in which he becomes so entitled to such benefits and ending with the month preceding the month in which he dies. No application under this section which is filed by an individual more than 3 months before the first month in which he meets the requirements of paragraph (1), (2), and (3) shall be accepted as an application for purposes of this section.

* * * * * * *

"(e) The benefit to which any individual is entitled under this section for any month shall not be paid if, during such month, such individual is not a resident of the United States. For purposes of this subsection, the term 'United States' means the 50 States and the District of Columbia." (Emphasis supplied.)

Section 205(g) of the Social Security Act, 42 U.S.C. 405(g), which sets for the scope of judicial review in Title II matters reads in pertinent part as follows:

"Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow. * * * As part of his answer the Secretary shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based. The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary with or without remanding the cause for a rehearing. The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive * * *. (Emphasis supplied.)

Jurisdiction of the court thus set out in section 205(g) is limited thereto and made exclusive by section 205(h) of the Act, 42 U.S.C. 405(h) as follows:

"* * * No findings of fact, or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 41 of Title 28 (the section defining the jurisdiction of the Federal Courts which has been superseded by section 1331 et al. of new Title 28 U.S.C.) to recover on any claim arising under this subchapter." (Emphasis supplied.)

The failure of the plaintiff to allege that he filed an application with the Social Security Administration for benefits under section 228 supra will necessarily preclude a claim thereunder. Section 228(a)(4), supra requires the filing of an "application for benefits under this section."

The filing of an application is a prerequisite requirement to establish entitlement to benefits under Title II of the Social Security Act. Ewing v. Risher, 176 F.2d 641 (10 Cir., 1949); Coy v. Folsom, 228 F.2d 276 (3 Cir., 1955); Ray v. Gardner, 387 F.2d 162 (4 Cir., 1967); McNally v. Flemming, 183 F.Supp. 309 (D. N.J., 1960); Flamm v. Ribicoff, 203 F.Supp. 507 (S.D.N.Y., 1961).

Thus, in Ewing v. Risher, supra, the court pointed out that "rights" under Title II of the Social Security Act are "creative rights" unknown to the common law and that only upon compliance with the conditions prescribed by Congress can an individual be entitled to its benefits. One of the conditions (indicated above) is the "filing of an application." The court accordingly concluded that there could be no entitlement to benefits where the prescribed condition of filing of an application had not been met. In referring to the particular section under which the claim in that case was filed and which like section 228 required as a condition of entitlement the filing of an application, the court said (p. 644):

"The language of the pertinent part of Section 402(g) is clear, positive, and mandatory. It provides that: 'No payment shall be made * * * unless application therefore shall have been filed * * * prior to the expiration of two years after the date of the death of such insured individual.'

"Filing the application within the statutory time was a necessary incident of the right conferred by the act, and failing to comply therewith extinguished appellee's right to the lump-sum benefits."

And as to the remedial nature of the Act, the court further stated (p. 644):

"It is true that the statute is a remedial one and should be liberally administered to effectuate the congressional purpose, but the congressional purpose must be ascertained from the clear language of the act. While a liberal interpretation should be indulged, such a policy does not warrant adopting a construction inconsistent with the clear wording of the act in order to prevent loss to a claimant resulting from failure to file an application as required by the act." (Emphasis supplied.)

Similarly, in Ray v. Gardner, supra, the court held in pertinent part as follows:

"In 1958, Ray, the claimant, filed an application for a period of disability pursuant to § 216(f) of the Social Security Act. At that time Ray was less than fifty years old and the only benefit to which he was entitled was the elimination of the period of disability from his earnings records. The statute was amended in 1960 to permit persons under fifty years of age to receive monthly disability benefits, but only upon an application for such benefits filed in or after the month in which the amendment was enacted.

"At a hearing in December 1960 the claimant was informed of the amendment of the Act, and he testified that promptly thereafter he filed a claim for disability benefits. His testimony was corroborated in part by his wife who said that she collected certain papers for his use in that connection. The records of the Social Security Administration contain no indication of the filing of any such claim until September 1964.

"Meanwhile, there was an administrative denial of the 1958 claim for a period of disability. The District Court affirmed the administrative determination, and Ray appealed to this Court. We remanded the case to the Secretary for further proceedings.

"On remand, the Secretary awarded the claimant a period of disability since 1960 and monthly disability benefits from September 1963, the latter award being based upon the 1964 application. This was done on the basis of a finding that the claimant had filed no claim for disability benefits before the September 1964 claim.

"We think the District Court properly accepted the administrative finding that no claim for disability benefits had been filed before the 1964 claim. The fact that no such claim was to be found in the records of the Social Security Administration and there was no notation or record of the receipt or filing of any such claim, if not conclusive, furnish substantial evidence in support of the finding. The factfinder was not bound to accept the self-serving testimony of the claimant and his wife, otherwise unsubstantiated, to the contrary.

"When there is substantial support in the record for the administrative finding, it must be accepted by the courts." (Emphasis supplied.)

And it is further clear, assuming, arguendo, that where benefits are otherwise payable under section 228 if an application is filed therefore, still, benefits are effective beginning only with the month in which all conditions contained therein have been met. Thus a claimant filing an application for benefits under section 228 "shall * * * be entitled to a benefit under this section for each month beginning with the first month after September 1966 in which he becomes entitled to such benefits * * *." (Emphasis supplied.) Consequently, inasmuch as entitlement cannot be established until a claimant files an application, benefits under section 228 are not payable retroactively for any period prior to the filing of an application and the plaintiff's claim for accrued benefits alleged to be owing to him on this base alone would be precluded. Comparably, in Borysuk v. Ewing, 96 F.Supp. 779 (D.C. N.J., 1951), it was held that an applicant cannot become entitled to benefits until he has filed an application therefore and that when it is filed, retroactivity obtains only as expressly provided by the Act.

"It is clear that Congress intended that an application would be a condition precedent to the right to benefits under the Act, and an applicant, until an application has been filed, would be entitled only to the retroactive period of three months (the period then prescribed) given to the applicant by the statute on filing of the delayed application." 96 F.Supp. at page 781.

Compare, too, Craig v. Finch, 416 F.2d 721 (5 Cir., 1969), cert. den. 397 U.S. 953 (1970); Meadows v. Cohen, 409 F.2d 750 (5 Cir., 1969); Sangster v. Gardner, 374 F.2d 498 (6 Cir., 1967).

Thus, aside from other factors pertinent to a claim for benefits under section 228 of the Act, the plaintiff does not have a viable claim for benefits in the absence of having filed an application therefor.

The plaintiff further alleges that the Constitution of the United States extends to the Commonwealth of Puerto Rico as it does to the 50 States and District of Columbia of the United States. This is not so.

In discussing whether the constitutional right to trial by jury operates for United States citizens in a proceeding of a judicial nature conducted by the United States in a foreign country, the Supreme Court in 1891 states in Ross v. McIntyre, 140 U.S. 453 that "By the Constitution, a government is ordained and established 'for the United States of America' and not for countries outside their limits," and that constitutional guarantees apply only to citizens and others within the United States, or who are brought here for trial for alleged offenses committed elsewhere, and not to residents or temporary sojourners abroad." (Emphasis supplied.) Only by specific legislation of Congress will domestic laws and constitutional guarantees be extended as exterritorially, Blackmer v. U.S., 284 U.S. 421 (1932); Publ v. U.S., 376 F.2d 194 (10 Cir., 1967). When Congress does intend its domestic law to operate in foreign countries, this is effected on the ground that the sovereign has inherent jurisdiction over its citizenship wherever they may be. Steele v. Bulova, 344 P.S. 280 (1952.)

Although the Commonwealth of Puerto Rico is not a foreign nation, nevertheless it does not have the status of a State of the United States to which the Constitution extends by its own force. By reason of its status as a Commonwealth, domestic laws of the United States and constitutional guarantees operate only insofar as the Congress intends for it to do so. This was explicitly held by the Supreme Court Balzac v. People of Puerto Rico, 258 U.S. 298 (1922), in which the Court followed its prior holding as to the Philippine Islands (then a territory of the United States) in Dorr v. U.S., 195 U.S. 138 (1904). Similarly, this court's jurisdiction rests, not as an Article III Court under the Constitution, but as a court created by virtue of the power given to Congress by Article IV, section 3, cl. 2 of the Constitution to make all needful rules and regulations respecting territory belonging to the United States. Munoz v. Porto Rico Ry. Light and Power Co., 83 F. 262 (1 Cir., 1936).

Under the Organic Act of 1917, 39 Stat. 951, citizens of Puerto Rico became citizens of the United States, and were thereby enabled to move into the continental United States and become residents of any State and there to enjoy every right of any other citizen of the United States, civil, social and political. Nevertheless, the Organic Act did not incorporate Puerto Rico into the Union as a State to which the Constitution by its own force is extended. Thus at page 309 in Balzac, the court stated:

"In Porto Rico, however, the Porto Rican cannot insist upon the right of trial by jury, 'except as his own representatives in his legislature shall confer it on him. The citizen of the United States living in Porto Rico cannot there enjoy a right of trial by jury under the Federal Constitution, any more than the Porto Rican. It is locality that is determinative of the application of the Constitution, in such matters as judicial procedure, and not the status of the people who live in it." (Emphasis supplied.)

In like manner, section 228 supra, confers benefits on all who meet its conditions for entitlement providing that they reside in one of the 50 States of the District of Columbia. This provision applies equally to all citizens of the United States, whether or not they be of Puerto Rican origin; a citizen from the continental United States who takes up residence in the Commonwealth of Puerto Rico will not receive benefits under section 228 just as other residents of Puerto Rico are precluded.

With regard to the plaintiff's assertion that since section 228 applies to residents of the continental United States, it must apply equally to residents of Puerto Rico, let it be said that in Downes v. Bidwell, 182 U.S. 244, 21 S.Ct. 770 (1901), the Supreme Court passed upon the territorial status of Puerto Rico while deciding a comparable question: whether Puerto Rico comes under the Internal Revenue Laws of the continental United States absent explicit enactment of the Congress. In holding that duties may be imposed on imports from Puerto Rico into the continental United States (similar to imports from a foreign country), the Supreme Court reviewed the history of plenary congressional power over acquired territories of the United States beginning with the Louisiana purchase. The Court concluded:

"That the power over the territories is vested in Congress without limitation, and that this power has been considered the foundation upon which the territorial governments rest, was also asserted by Chief Justice Marshall in M'Culloch v. Maryland, 4 Wheat. 316, 422, 4 L.ed. 579, 605, and in United States v. Gratiot, 14 Pet. 526, 10 L.ed. 573. So, too, in Church of Jesus Christ of L.D.S. v. United States, 136 U.S. 1, 34 L.ed. 478, 10 Sup. Ct. Rep. 792, in holding that Congress had power to repeal the charter of the church. Mr. Justice Bradley used the following forceful language: 'The power of Congress over the territories of the United States is general and plenary, arising from and incidental to the right to acquire the territory itself, and from the power given by the Constitution to make all needful rules and regulations respecting the territory or other property belonging to the United States.' It would be absurd to hold that the United States has power to acquire territory, and no power to govern it when acquired. * * *" (Emphasis supplied.) 21 S.Ct. at p. 779. [Footnote omitted.]

And the Court held that as the Commonwealth of Puerto Rico was not a State of the Union, duties on imports therefrom could be imposed. See also Hoover and Allison Co. v. Evatt, 324 U.S. 652 (1945).

The question here, then, regarding section 228, does not go to whether the plaintiff has been denied Fifth Amendment guarantees, e.g., due process (and equal protection insofar as it may be contained therein) or whether Congress has created a reasonable classification of persons to be paid benefits thereunder, since the Constitution does not extend by its own force to the Commonwealth of Puerto Rico. Cf. Flemming v. Nestor, 363 U.S. 603 (1960); Gruenwald v. Gardner, 390 F.2d 591 (Cir., 1968), cert. den. 393 U.S. 732, 782 (1968); Leeson v. Celebrezze, 225 F.Supp. 528 (E.D. N.Y., 1936). The question in this case is solely one of exercise of congressional plenary power: Whether the Congress has intended the provisions of section 228 to be applicable in the Commonwealth of Puerto Rico. Thus, in American Banana Co. v. United Fruit Co., 213 U.S. 374 (1909) it was held that the Congress did not intend anti-trust legislation to extend to Acts by American Nationals in foreign countries, whereas in People of Puerto Rico v. Shell Co., 302 U.S. 253 (1937) the Supreme Court held that the Sherman Act of 1808 was applicable in Puerto Rico, though later acquired by the United States by Treaty of Paris in 1898, because of the use of the word "territory" in the legislation. See, also, Vermilya Brown Co. v. Cornell, 335 U.S. 337 (1948) wherein the Court held that "possessions" of the United States to which the Wage Hour Act applied included military bases leased in foreign countries.

The history of the various enactments of the provisions contained in Title II of the Social Security Act as regards their applicability to the Commonwealth of Puerto Rico is equally enlightening. Section 1101(a)(2) of the original Social Security Act, P.L. 74-271, enacted August 14, 1935, provided that the term "United States", when used for legislation to apply in geographical areas, was defined to include the States, Alaska, Hawaii and the District of Columbia; the Act, accordingly, did not then extend to Puerto Rico. It was not until 1950 that the Congress extended the provisions of Title II of the Social Security Act to the people of Puerto Rico. Thus section 107 of the Social Security Amendments of 1950 (P.L. 81-734 enacted August 28, 1950) enacted the then existing section 219 of Title II providing for extension of Title II provisions upon a certificate by the Governor of Puerto Rico to the President of the United States that the legislature of Puerto Rico has so resolved its desire therefore by a concurrent resolution. Section 210(i) of the Act, enacted by section 104 of the 1950 Amendments, further defined the term "United States" to include Puerto Rico after the effective date of extension of the Title II provisions to Puerto Rico. And Section 103 of the Social Security Amendments of 1960 (P.L. 86-778, enacted September 13, 1960) revised the definition of section 210(i) of the Act to include Guam and American Samoa within the term "United States" and thus similarly extended the provisions of Title II to those territories of the United States.

It is thus apparent that for more than 35 years since the social security programs were enacted, the provisions thereof have been extended to Puerto Rico only insofar as explicitly enacted by the Congress. The intent of Congress in providing for payment of benefits under section 228 supra is clear; benefits thereunder are limited only to those who reside in the 50 States or District of Columbia. Section 228 of the Act was enacted by section 302(a), P.L. 89-368 enacted March 15, 1966, as an amendment to the Tax Adjustment Act of 1966. In its original form as introduced and passed on the floor of the Senate the amendment was drafted to extend to residents of the United States, as that term was defined in section 210(i) of the Act, and thus included Puerto Rico. Cong. Record, Vol. 112, Part 4, 89th Cong., 2nd Sess., pp. 5289-5301. However, in conference of the two Houses of Congress, the legislation was redrafted in form as presently contained in section 228 of the Act, which, as noted above, limits its applicability to the 50 States and District of Columbia. H.R. Rept. No. 1323, 89th Cong., 2nd Sess.; Cong. Record, Vol. 112, Part 5, pp. 5788-5801.

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