Table of Contents
| I |
Purpose |
| II |
Background |
| III |
Guiding Principles |
| IV |
Definition of Class |
| V |
Processing and Adjudication |
| VI |
Inquiries |
| Attachment 1 |
- Jones v. Shalala Order Filed With the Clerk of the District Court on May 10, 1994 |
| Attachment 2 |
- POMS SI 02005.006, Exception to Transitional Computation Procedures for Ninth Circuit Cases, Dated November 1994 |
| Attachment 3 |
- Route Slip for Current Claim(s) at OHA |
| Attachment 4 |
- Route Slip for Class Member Inquiry and Evidence |
ISSUED: May 5, 1995
I. Purpose
This Temporary Instruction (TI) is being issued to provide OHA
adjudicators with instructions for implementing the relief ordered by the
district court in the Jones v. Shalala class
action. Jones involves the Secretary's
application of the retrospective monthly accounting (RMA) method of
calculating Supplemental Security Income (SSI) payments for the first
three months of eligibility or reeligibility in nonrecurring income fact
situations. This instruction also incorporates into HALLEX the
substance of the Associate Commissioner's July 28, 1994 memorandum.
Adjudicators throughout the country must be familiar with this TI because
Jones class members who now reside outside of the
Ninth Circuit (Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana,
Nevada, Northern Mariana Islands, Oregon and Washington) must have their
cases processed in accordance with the requirements of the court
order.
II. Background
The RMA statute of the Social Security Act (the Act) contains an exception
(codified as 42 U.S.C. § 1382(c)(2)), which operates prospectively
and provides that, for the first month of eligibility or reeligibility
(and the second month if the Secretary chooses), the Secretary will
determine SSI benefit amounts on the basis of the income of the individual
(and on the basis of the income of the eligible spouse of the individual,
if any) and other relevant circumstances in such month(s). An additional
exception to the RMA provision (codified at 42 U.S.C. §
1382(c)(4)(A)) provides, in part, that if the Secretary determines that
“reliable information” is currently available with respect to
the income and other circumstances of an individual for a particular
month, the benefit amount of the individual for such month may be
determined on the basis of such information. As applied in accordance with
the regulation at
20 CFR §
416.420(b) and the Program Operations Manual System (POMS)
instructions at §§ SI 02005.060 through SI 02005.065, the RMA
method sometimes results in the triple deduction of one-time,
nonrecurring income received during the first month of SSI eligibility or
reeligibility.
On April 3, 1992, plaintiffs filed a complaint in the United States
District Court for the Eastern District of California challenging the
Secretary's regulation and policy implementing the RMA method of
calculating SSI payments for recipients who had received nonrecurring
income in the first month of eligibility or reeligibility. On December 23,
1992, the court certified a class of all SSI recipients who resided in or
had resided in the Ninth Circuit and who had or would have their SSI
eligibility or benefit amount for any month determined pursuant to the
Secretary's policy under the RMA provisions. Class membership is further
restricted to individuals who receive nonrecurring income during the first
month of eligibility or reeligibility.¹ Even though the court
certified a class, it granted the Secretary's cross-motion for summary
judgment because it concluded that neither the plain language of the
statute nor Congress' intent unambiguously requires the Secretary to
consider the nonrecurring nature of income as a relevant circumstance.
The district court also concluded that the challenged regulation and
policies are not arbitrary, capricious or manifestly contrary to the
statute.
On September 23, 1993, the United States Court of Appeals for the Ninth
Circuit reversed the district court's grant of the Secretary's
cross-motion for summary judgment. The court of appeals held that the
Secretary's “triple-deduction” violates the Act because it
does not take into account the nonrecurring nature of income received in
the first month of eligibility as a relevant circumstance. The court of
appeals stated that it need not review the Secretary's interpretation of
the Act under the “arbitrary and capricious” standard because
the congressional intent underlying the Act is clear and unambiguous.
Therefore, the court of appeals held that, in keeping with the
humanitarian purpose of the Act, the Secretary must deduct nonrecurring
income only once. Jones v. Shalala, 5 F.3d 447
(9th Cir. 1993).
On May 9, 1994, the district court signed an order that the parties
negotiated to implement the Ninth Circuit's decision and the order was
filed with the clerk of the court on May 10 (Attachment 1).
¹ In the subsequent negotiated settlement that the district court
approved and filed with the clerk of the court on May 10, 1994, the
parties redefined the class definition so that it would be consistent with
a separate, unpublished September 23, 1993 circuit court memorandum that
affirmed the district court's certification and scope of the class.
See Part IV., below, for the precise class definition.
III. Guiding Principles
The May 10 relief order specifically invalidates and enjoins the Secretary
from applying 20
CFR § 416.420(b), POMS §§ SI 02005.060 through SI
02005.065 and “any other written or oral directives, guidelines,
memoranda, etc.” having such effect in the Ninth Circuit.
The order, in part, required or requires the Secretary to:
redetermine the monthly SSI benefits and, within 15 working days after
entry of the order, certify payment for the two remaining named
plaintiffs;
within 20 working days after entry of the order, issue a teletype, which
will apply to class member claims that are pending at any stage of the
administrative process (“award letter, initial decisions,
reconsideration, Administrative Law Judge, Appeals Council”),
explaining that the policy, regulation and POMS instruction at issue have
been enjoined in the Ninth Circuit;
within 240 days from the date that the order is issued, identify class
members and issue retroactive benefits; and
allow individuals who are not identified by the Secretary as potential
class members to self-identify.
IV. Definition of Class
The May 10, 1994 district court order redefines the class as:
All SSI recipients [who are past or present Ninth Circuit
residents] who have had their benefit amount for SSI for any month
determined pursuant to defendants' policy of retrospective monthly
accounting (RMA) and, as a consequence of such determination, who have
had nonrecurring income in their first month of eligibility or
reeligibility used as the basis for their SSI benefit computation for the
first three months of eligibility or reeligibility, and who either:
received a final decision . . . [on or after January 29, 1992, and
before April 4, 1992]; or
had a request for administrative review pending [on or after January
29, 1992, and before April 4, 1992]; or
received a decision notice at some level of the administrative process
(i.e., award letter, initial decision, reconsideration, or Administrative
Law Judge decision) [on or after January 29, 1992, and before April 4,
1992], and whose period of limitations for timely seeking further
administrative review therefore had not expired at the time the complaint
was lodged;
and all [SSI recipients] . . . who received an award letter,
initial determination or other notice of decision after [April 3,
1992] . . . , who have had nonrecurring income in their first month
of eligibility or reeligibility used as the basis for their SSI benefit
computation for the first three months of eligibility or
reeligibility.
The certified class also includes individuals who receive a notice of
overpayment on or after January 29, 1992 (sixty-five days prior to the
filing of the complaint), because of the Secretary's method of considering
nonrecurring income and calculating benefits for the first three months
of eligibility or reeligibility. This includes individuals who had
overpayment appeals pending as of January 29, 1992.
V. Processing and Adjudication
On June 9, 1994, the Office of Supplemental Security Income (OSSI) issued
teletype instructions in compliance with ¶ 7 of the court order.
Final POMS instructions were published in November 1994 (Attachment 2).
These technical instructions involve the modification of SSI payment
calculation procedures that are generally performed at the SSA field
office (FO) level. The FOs have been provided with special computer
software for performing RMA payment calculations.
OSSI developed computer specifications to generate a list of potential
class members and forwarded class member alerts only to affected FOs.
The identification and recalculation aspects of the
Jones relief will typically not occur at the OHA
level of adjudication. However, infrequent instances may occur at the OHA
level, e.g., when a claimant has self-identified as a
Jones class member in an appeal of an overpayment
determination, which will require an ALJ or the Appeals Council to
forward a class member claim to an appropriate FO for a recalculation of
SSI payments pursuant to Jones. In such
instances, after ensuring that any necessary OHA-level adjudication has
been completed, OHA adjudicators should forward any claims which have
been identified as meeting the Jones class
member criteria to the appropriate FO for the immediate application of
the policy set forth in POMS
SI
02005.006 (see Attachment 2). Similarly, if an individual contacts
OHA regarding Jones class relief and OHA
determines that the individual does not have an OHA-level claim pending,
OHA personnel should take a statement from the claimant, and any evidence
that the claimant offers in support of his or her statement, and refer
the matter to the appropriate FO (see Attachment 4). Adjudicators should
consider the class member's current place of residence as a basis for
selecting the appropriate FO.
VI. Inquiries
Hearing Office personnel should direct any questions to their Regional
Office. Regional Office personnel should contact the Division of Field
Practices and Procedures in the Office of the Chief Administrative Law
Judge at (703) 305-0022. Headquarters personnel should direct questions to
the Division of Litigation Analysis and Implementation at 305-0708.
[Date Filed 05/10/1994]
CURTIS L. CHILD, No. 123880
BRIAN PATRICK LAWLOR, No. 137550
LEGAL
SERVICE OF NORTHERN CALIFORNIA, INC.
515 - 12th Street
Sacramento,
California 95814
Telephone (916) 444-6760
KIM SAVAGE, No.
114144
NATIONAL SENIOR CITIZEN LAW CENTER
777 South Figuaroa,
Suite 4230
Los Angeles, California 90017
Telephone (213)
236-3890)
Attorneys for Plaintiffs
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICE OF CALIFORNIA
This action for declaratory and injunctive
relief challenges the validity of a policy set forth in a portion of a
regulation, 20
C.F.R. § 416.420(b), and an internal policy manual, POMS
§§ 02005.060-065, by which the defendants count nonrecurring
income received only in the first month of eligibility or reeligibility
to determine the first months of eligibility for Supplemental Security
Income (“SSI”) benefits.
In a September 23, 1993 opinion, the Ninth
Circuit Court of Appeals reversed a grant of summary judgment in favor of
defendants and entered summary judgment for plaintiffs.
Jones v. Shalala, 5 F.3d 447, 452 (9th Cir.
1993). In a separate unpublished memorandum on the same date, the Ninth
Circuit affirmed this court's certification of a class action and the
scope of that class.
The Court having considered an appropriate
remedy for implementation of the Ninth Circuit's opinion.
IT IS HEREBY ORDERED, ADJUDGED AND
DECREED:
The class certified pursuant to Rule 23 of the Federal Rules of Civil
Procedure in this Court's Order of December 23, 19921, with
plaintiffs Mark Jones and Orlando Corona as the class
representatives2, is defined as:
All SSI recipients who reside or have resided in the Ninth Judicial
Circuit of the United States who have had their benefit amount for SSI for
any month determined pursuant to defendants' policy of retrospective
monthly accounting (RMA) and, as a consequence of such determination, who
have had nonrecurring income in their first month of eligibility or
reeligibility used as the basis for the first three months of eligibility
or reeligibility, and who either;
(1) received a final decision from defendants within sixty-five
days3 prior to the lodging of plaintiffs' complaint on April
3, 19924, or
(2) had a request for administrative review within sixty-five days prior
to the lodging of plaintiffs' complaint; or
(3) received a decision notice at some level of the administrative process
(i.e., award letter, initial decision, reconsideration, or Administrative
Law Judge decision) within sixty-five days prior to the lodging of
plaintiffs' complaint, and whose period of limitations for timely seeking
further administrative review therefore had not expired at the time the
complaint was lodged;
and all SSI recipients who reside or have resided in the Ninth Judicial
Circuit of the United States who received an award letter, initial
determination or other notice of decision after the lodging of plaintiffs'
complaint on April 3, 1992, who have had nonrecurring income in their
first month of eligibility or reeligibility used as the basis for their
SSI benefit computation for the first three months of eligibility or
reeligibility.
Consistent with the court's definition of
the class, the class-wide relief set forth in this order shall include all
persons residing in the Ninth Judicial Circuit of the United States who
have had their SSI eligibility or benefit amount in the first three months
of eligibility or reeligibility based on the receipt of nonrecurring
income in the first month of eligibility or reeligibility, and who (1)
received a final decision from the Secretary or a decision notice at some
level of the administrative process (i.e., award letter, initial decision
reconsideration, or Administrative Law Judge decision) on or after January
29, 1992, or (2) had an application for SSI benefits or a request for
administrative review pending but not acted upon on or after January 29,
1992. The class-wide relief shall also include all persons who were
residing in the Ninth Judicial Circuit of the United States who were
assessed an overpayment of SSI benefits based on defendants' failure to
initially count in the first three months of eligibility or reeligibility
the nonrecurring income a recipient received in the first month of
eligibility or reeligibility and who received a notice of overpayment on
or after January 29, 1992 or who had an administrative review pending
challenging such overpayment as of January 29, 1992.
Defendants' policy of counting nonrecurring income received in only the
first month of eligibility or reeligibiltiy as income in each of the first
three months of eligibility or reeligibility for purposes of determining
benefit amount under the SSI program, 42 U.S.C. §§ 1361 et
seq. is declared invalid and unenforceable in the Ninth Circuit as in
violation of the SSI statute.
Section 416.420(b) of Title 20 of the Code of Federal Regulations, POMS
§§ 02005.060-.065 and any other written or oral directives,
guidelines, memoranda, etc., of the Social Security Administration, to the
extent that they permit the counting of nonrecurring income received in
the first month of eligibility or reeligibility in more than one month to
determine amount of SSI benefits, are declared invalid and unenforceable
in the Ninth Circuit as in violation of the SSI statute.
Defendants Donna Shalala, Secretary of the Department of Health and Human
Services, and Shirley Chater, Commissioner of the Social Security
Administration, their successors in office, their agents, employees and
all persons acting in concert with them are enjoined in the Ninth Circuit
from using nonrecurring income received in the first month of SSI
eligibility or reeligibility to determine any more than one month's
benefit in the first three month's of eligibility.
Defendants Donna Shalala, Secretary of the Department of Health and Human
Services, and Shirley Chater, Commissioner of the Social Security
Administration, their successors in office, their agents, employees and
all persons acting in concert with them are enjoined in the Ninth Circuit
from applying 20
C.F.R. § 416.420(b), POMS §§ SI 02005.060-.068 and
any other written or oral directives, guidelines, memoranda, etc., that
require or permit the counting of nonrecurring income received in the
first month of SSI eligibility or reeligibility for any more than one
month in the first three months of eligibility or reeligibility.
Defendants' decision upholding the reduction of benefits of plaintiffs
Mark Jones, Ira B. Johnson and Orlando Corona, in the first three months
of their eligibility or reeligibility which resulted from counting as
income any nonrecurring income received in their first month of
eligibility or reeligibility is hereby reversed and defendants are ordered
to:
Redetermine the monthly SSI benefits for plaintiffs Jones and Corona for
any period after January 29, 1992 in which nonrecurring income was counted
more than once as income in determining their benefit amounts for the
first three months of reeligibility;
Within fifteen (15) working days after entry of this order, certify
payment to plaintiffs Jones and Corona of any retroactive monthly SSI
benefits to which they are entitled under this order.
Not later than twenty (20) working days from the date this order is
entered, defendants are further ordered to send by teletype or other
overnight means of communication to all appropriate others, divisions,
levels, departments, district offices, etc., of the Social Security
Administration directives (after giving plaintiffs' counsel an opportunity
to review the directive) explaining that the policy, regulation and POMS
described above have been enjoined, and ordering:
That the determination of the amount of SSI benefits for all class members
shall, beginning immediately, be affected without counting nonrecurring
income received in the first month of eligibility or reeligibility as
income for determining eligibility or benefit amount in any more than one
month in the first three months of eligibility or reeligibility.
The immediate application of the policy set forth in the teletype to the
claims of any class members which are presently pending at any stage of
the administrative process (i.e. award letter, initial decisions,
reconsideration, Administrative Law Judge, Appeals Council).
Defendants are ordered, as expeditiously as possible, but in no event
later than the timelines set forth in this paragraph, to:
No later than 240 days from the date this order is issued. prepare and run
a computer program that will generate a list of all potential class
members and issue payment to all class members for the retroactive SSI
benefits they are due under this order.
Issue a notice advising the recipient that the payment in subparagraph (c)
of this paragraph is being paid pursuant to the court case of
Jones v. Shalala which enjoins the defendant from
counting nonrecurring income received in the first month of eligibility
or reeligibility in any more than one month and orders the repayment of
benefits. The notice shall also include:
an explanation of the payment amount;
a statement that the determination is an initial determination and a
description of the procedure the recipient can use to appeal the
determination;
statement that if the recipient does not understand the notice that s/he
can contact a local Social Security Office or legal aid program for
assistance.
a one-line statement in the Spanish language stating that if a translation
of the notice is necessary SSA should be contacted for assistance.
Before the computer program used to identify all potential class members
described in subparagraph (a) of this paragraph is created, plaintiffs'
counsel will be provided a description of the group of individuals whose
records will be examined in making this computer identification.
Plaintiffs' counsel shall be given an opportunity to comment upon the
description provided to ensure that all class members will be identified
by the computer run.
For any identified class members who are no longer recipients of SSI
benefits, to use all good faith efforts to determine their whereabouts
except where the agency knows when the person has died. Such good faith
efforts shall include, but are not limited to, a requirement that
defendants, in seeking to provide the benefits owed, shall utilize the
last address known to SSA and mail a notice to that address advising the
class member of the retroactive benefits owing and an instruction on how
they may be claimed. The notice shall be in the same substantial form as
the notice required in subparagraph (b) and provide that a claim should be
made within 60 days. In order to provide relief to individuals who do not
claim their benefits promptly, defendant will develop procedures which,
for two years and six months from the date of this order, will provide for
a review of computer records of SSI benefit applicants who indicate that
they previously received SSI benefits for some past period when they
apply. If the computer records indicate that these applicants are entitled
to relief under this order the relief will be provided at the time of the
new application. Payments pursuant to this subparagraph need not be made
within the 240 days otherwise required by subparagraph (a) but must be
otherwise paid promptly.
To permit any individual who has not been identified as a class member
pursuant to its computer run to make an application for retroactive
benefits pursuant to the order. Within five (5) working days after an
individual presents him or herself with such a claim, defendants will
determine whether the claimant is a class member. If defendants determine
that a claimant who made a claim for retroactive benefits pursuant to this
subparagraph is not a class member, a notice will be sent to the claimant
and class counsel: Curtis L. Child, Legal Services of Northern
California, 515 - 12th Street, Sacramento, California 95814
Attn: Jones Class. Claimants will be
informed that if they disagree with the determination, they may contact
class counsel within 60 days. Class Counsel may, within 60 days of the
date following the notice denying class membership write the Office of
General Counsel, Department of Health and Human Services explaining the
disagreement. Any delay beyond the 60 days may be excused for good cause
if it meets the criteria set forth in
20 C.F.R. §
416.1411. The parties will attempt to resolve the dispute. If they
cannot do so within 90 days after Office of General Counsel received the
written disagreement, Office of General Counsel will send a letter to
class counsel stating that a resolution cannot be reached. Within 45 days
of receipt of the non-resolution letter, defendant will redetermine
benefit amounts and certify payment to the class member along with the
notice required by subparagraph (b).
Before printing the notices described in subparagraphs (b), (d) and (e),
defendants shall send copies to plaintiffs' counsel for review.
No amount due any class member shall be used to offset an existing
unrelated overpayment of benefits.
Within ninety (90) days after entry of this order, and every ninety (90)
days thereafter, defendants shall submit a written report to this court
describing defendant compliance with this order. Said report shall
include, but shall not necessarily be limited to, descriptions of the
following:
All actions taken by the defendants to ensure the implementation of
paragraphs 2 through 6 of this order, including the dates of such
actions,
All actions taken by the defendants to comply with paragraph 7 of this
order, including the date(s) of such actions;
All actions taken by the defendants to comply with paragraph 8 of this
order, including a statement of the total number of individuals paid and
the total amount paid. Notwithstanding this subparagraph, defendants
shall, within 60 days of the close of the implementation period, provide
plaintiffs' counsel with a random sample list of the names, addresses,
telephone numbers and payment amount for at least one out of every fifty
class members to allow plaintiffs' counsel to monitor the distribution of
benefits to class members.
A copy of each report submitted to the court in accordance with this
paragraph shall be served on counsel for plaintiffs.
The court shall retain jurisdiction to enforce this order and, if
necessary, to modify or clarify any of its provisions upon noticed motion
by counsel for either party.
This order supercedes the order filed April
28, 1994.
IT IS SO ORDERED
May 9, 1994
__________________________
Date
_________________________
1 In its December 23, 1992 order this court did not precisely
define the class in this case. Order at 9-10, fn. 10. The following
definition however precisely defines the class consistent with the Ninth
Circuit's memorandum on this issue.
2 The other named plaintiff, Ira B. Johnson, died on April 3,
1993. The retroactive SSI benefits plaintiff Johnson would have been
eligible to receive in this case do not pass to his estate. 42 U.S.C.
§ 1383(b)(1)(1), Smith v. Califano, 597 F.2d 152 (9th Cir. 1979). A
notice of suggestion of death upon the record has been filed by
plaintiffs.
3 The sixty-five days represents sixty days from the date of
notice with an additional five days from the date on the notice for
mailing. January 29, 1992 is the sixty-fifth day before the lodging of
plaintiffs; Complaint. See Cervantes v. Sullivan, 724 F.Supp. 757, 758
n.1, (E.D. Cal. 1989) rev'd on the merits, Cervantes v. Sullivan, 963
F.2d 229 (9th Cir. 1992).
4 The relevant date for the opening of the class is the date
upon which the complaint was initially lodged with the court along with
the petition to proceed in forma pauperis, rather than the date the
complaint was actually filed. Cervantes, 724 F.Supp. at 758 n.2.
OPTIONAL FORM 41 (Rev. 7-76)
*U.S.GPO:1985-0-461-274/20020 Prescribed
by GSA
FPMR (41 CFR) 101-11.206
OPTIONAL FORM 41 (Rev. 7-76)
*U.S.GPO:1985-0-461-274/20020 Prescribed
by GSA
FPMR (41 CFR) 101-11.206
