I-5-4-69.Martinez v. Astrue

Last Update: 5/27/11 (Transmittal I-5-469)

Table of Contents
I Purpose
II Background
III Definition of the Class
IV Implementation of the Court Order
V Processing of Cases
VI Public Law 111-115
VII Inquiries
Attachment 1 Final Order Approving Settlement; Filed with the United States District Court for the Northern District of California on October 15, 2008 and Approved by the Court on September 24, 2009.
Attachment 2 Form HA-505 “Transmittal by Office of Disability Adjudication and Review”

Issued: May 27, 2011

I. Purpose

This Temporary Instruction advises Office of Disability Adjudication and Review (ODAR) adjudicators of the final order entered by the United States District Court for the Northern District of California on September 24, 2009 approving the parties' settlement agreement in the Martinez v. Astrue class action. The Martinez class action concerned the agency's policy and procedures for not paying claimants and beneficiaries and not selecting individuals to serve as representative payees, based on their status as fugitive felons (also referred to as fleeing felons).

The settlement agreement requires the agency to change its processing of certain fugitive felon non-payment actions and non-selections (representative payees) effective April 1, 2009. However, the settlement does not apply to processing title II, title VIII, or title XVI payments or selecting representative payee actions for cases involving outstanding parole or probation violation warrants (e.g. National Crime Information Center (NCIC) Uniform Offense Classification Codes (offense codes) 5011, 5012, 8101, and 8102).[1]

II. Background

On October 15, 2008, plaintiffs filed Martinez v. Astrue, a putative nationwide class action lawsuit against Michael J. Astrue in his official capacity as Commissioner of Social Security, in the United States District Court for the Northern District of California. The plaintiffs alleged that SSA's policy of denying or suspending benefits to persons on the basis of an outstanding felony arrest warrant and not permitting persons with outstanding felony arrest warrants to serve as representative payees violated the Social Security Act and the agency's regulations.

On September 24, 2009, the District Court approved a nationwide class action settlement agreement in Martinez v. Astrue. Under the settlement, SSA agreed to change its policy, effective April 1, 2009, regarding the types of felony arrest warrants used to prohibit payment of Retirement, Survivors, and Disability Insurance (RSDI), Supplemental Security Income (SSI) benefits, and Special Veterans Benefits (SVB). It also changed the type of felony arrest warrants that preclude selecting an individual to serve as a representative payee.

SSA may also now consider applications to serve as representative payees from individuals who have an unsatisfied felony arrest warrant for other felony offense codes, although SSA still considers warrant information as one of several factors in deciding whether a person is suitable to serve as a representative payee.

This settlement does not apply to agency policy and procedure regarding nonpayment or non-selection of individuals with unsatisfied warrants for an alleged violation of probation or parole (NCIC codes 5011, 5012, 8101, and 8102). The Martinez settlement is limited to individuals with fugitive felon status and does not include parole or probation violators who were not included in the Martinez settlement.

Accordingly, effective April 1, 2009, SSA limited its policy to suspend or deny benefits based on outstanding felony arrest warrants to those warrants involving the crimes of:

  • escape from custody (NCIC offense code 4901);

  • flight to avoid prosecution or confinement (NCIC offense code 4902); and

  • flight-escape (NCIC offense code 4999).

Also, effective April 1, 2009, SSA prohibited individuals who have felony warrants with the same NCIC offense codes (4901, 4902, or 4999) from serving as representative payees. In addition, SSA began using all warrant information to determine an individual's suitability to serve as a representative payee when the individual has a felony warrant with other NCIC offense codes.

In addition to the policy change, the settlement also provides two types of retroactive relief for certain class members whose benefits were suspended or denied under the former fugitive felon policy. See Section IVA and B below for more detailed explanation of the two subgroups of class members eligible for retroactive relief.

III. Definition of the Class

Settlement class members include beneficiaries or recipients nationwide whose RSDI, SSI, or SVB benefits have been suspended or denied for “fleeing to avoid prosecution or custody or confinement after conviction” of a felony, or who are not permitted to serve as representative payees for RSDI, SSI, or SVB benefits for this same reason.

The settlement class does not include individuals who have already received, as of September 24, 2009, a final Federal court disposition regarding payment or nonpayment of benefits due to fugitive felon status.

IV. Implementation of the Court Order

SSA is implementing the Martinez settlement retroactive relief in a progressive, orderly manner. Many aspects of the Martinez settlement retroactive relief were automated. See the following for more information about the Martinez settlement: GN 02613.860, GN 02613.865, GN 02613.870, GN 02613.875, and GN 02613.885.

The settlement agreement provides no retroactive relief for class members who were not selected to serve as representative payees under the previous policy. The settlement agreement provides retroactive relief to two broad categories of class members who were not paid benefits due to fugitive felon status—the post-2006 class members and the pre-2007 class members. Some individuals with more than one non-payment or denial may fall within both categories.

A. . Post-2006 class members

Post-2006 class members are all class members for whom SSA made an initial suspension, initial denial, or administrative appeal denial on or after January 1, 2007, based on an outstanding felony arrest warrant unless the determination was based on an outstanding felony arrest warrant with an NCIC offense code of 4901, 4902, or 4999. This group includes any class members with a pending administrative claim challenging any such suspension or denial as of August 11, 2008.

1. Title II

Most post-2006 class members who are RSDI beneficiaries were sent an informational notice (see sample notice—GN 02613.867A) in December 2009 informing them of the post-2006 settlement terms. After this notice was issued, an automated systems operation resumed benefits (back to the first month of fugitive felon suspension) to beneficiaries who are or were in fugitive felon suspension (LAF: S9, HRFST: FUGFEL on the Master Beneficiary Record (MBR)) in January 2007 or later. Some exceptions may have required manual program service center (PSC) action. For information about such exceptions, see GN 02613.870B.

A special message automatically updates to the MBR for all affected records, “MARTINEZ COURT CASE – POST 2006 RELIEF APPLIES.”

2. Title XVI

Post-2006 class members who are SSI recipients were included in the March 2010 redetermination (RZ) release with a selection date of April 1, 2010, and loaded into Stars and Stripes the Next Generation (SSTNG). Field offices (FOs) were instructed to contact these class members in order to conduct a RZ prior to resuming payment (back to the first month of fugitive felon suspension). FOs were instructed to include special language in the RZ appointment letter that explained the potential relief under the Martinez settlement. For more information, see GN 02613.875A.3. Some denied cases may require a medical determination before determining payment eligibility.

For post-2006 class members not identified in March 2010, we will furnish the same relief after the pre-2007 relief systems run.

B. Pre-2007 class members

Once the agency provides relief to the post-2006 class members, SSA will identify pre-2007 class members potentially eligible for relief.

Pre-2007 class members are all class members for whom SSA made an initial suspension or initial denial based on an outstanding felony arrest warrant unless the determination was based on an outstanding felony arrest warrant with an NCIC offense of code of 4901, 4902, or 4999, on or after January 1, 2000, but before January 1, 2007, and who did not obtain an administrative appeal denial on or after January 1, 2007. This group includes certain class members who did not have a pending administrative claim on August 11, 2008 appealing such a suspension or denial.

1. Title II

On April 14, 2010, the agency sent pre-2007 class members who were RSDI beneficiaries an informational notice (see GN 02613.869A. and B.) explaining that we would remove any remaining fugitive felon overpayment balance as part of Pre-2007 relief. After releasing the notice, SSA forwarded the fugitive felon overpayment cases to the PSCs to cancel or remove any remaining fugitive felon overpayments for the pre-2007 period.

In addition, the notice informed class members that if they were in fugitive felon suspension on April 1, 2009 (and the felony offense code on the active warrant was other than 4901, 4902, or 4999), they could request reinstatement of monthly benefits. Protective filing retroactive to April 1, 2009 applies to the reinstatement of benefits if the beneficiary contacted the agency within six months of the date of the notice.

2. Title XVI

On September 10, 2010, the agency identified pre-2007 class members who were SSI recipients and sent them an informational notice (see GN 02613.880F) explaining the pre-2007 relief. After releasing the notice, SSA forwarded the SSI fugitive felon overpayment cases to the servicing FOs to identify, cancel, or remove any remaining fugitive felon overpayment balance for the pre-2007 period.

In addition, the informational notice informed class members that if they were in fugitive felon suspension (PSY: N25 on the Supplemental Security Income Display (SSID)) on April 1, 2009 or were denied benefits (and the felony offense code on the active warrant was other than 4901, 4902, or 4999), they could file a new application. If the recipient contacts SSA within six months of the date of the pre-2007 informational notice, SSA will establish a protective filing date retroactive to April 1, 2009.

C. Benefits for settlement class members

Information related to scheduled payment of benefits for class members can be found at: http://www.ssa.gov/martinezsettlement/

V. Processing of Cases

A. Hearing Level

As a result of the Martinez settlement, favorable action on one or more of the following issues is possible for a case that may be pending at the Hearing Level:

  • Whether the claimant's benefits were properly suspended based on his or her fugitive felon status,

  • Whether the claimant incurred an overpayment as a result of untimely imposition of the suspension for fugitive felon status, and/or

  • Whether the recovery of such an overpayment was not waived due to fugitive felon status.

1. Handling Title II Martinez Class Member Cases

The Hearing Office will remand the case to the PSC to process in accordance with the scheduled settlement relief, in accordance with 20 CFR 404.948.

  • Notify the claimant that his or her case will be remanded to the PSC for scheduled Martinez relief.

  • Hold the case for 10 days, in case the claimant objects in accordance with 20 CFR 404.948.

  • If the claimant does not object, forward the case to the PSC. Be sure to identify the case as a Martinez settlement case. Sample language is provided below in A.4.

  • Also place an alert in the Alert and Message section in eView to notify the PSC that the case is a Martinez settlement case.

  • If the claimant objects to the remand, schedule the case for an ALJ hearing.

2. Handling Title XVI Martinez Class Member Cases with Only Fugitive Felon Issue – Administrative Dismissal/Referral to Field Office for Revised Determination

For cases that meet all of the following criteria:

  • the case is Title XVI;

  • the claimant is a Martinez class member who is due post-2006 relief (see GN 02613.860B.3 for a description of that relief); and

  • the only issue(s) on appeal to the Hearing Office is: the individual's fugitive felon status; the fact of an overpayment due to fugitive felon status; and/or the denial of a waiver of an overpayment resulting from fugitive felon status.

The Hearing Office will remand the case to the FO to process in accordance with the scheduled settlement relief, in accordance with 20 CFR 416.1448.

  • Notify the claimant that his or her case will be remanded to the local FO for scheduled Martinez relief.

  • Hold the case for 10 days, in case the claimant objects in accordance with 20 CFR 416.1448.

  • If the claimant does not object, forward the case to the local FO. They will then process the required Martinez relief (see GN 02613.875 E.2.b.). Be sure to identify the case as a Martinez settlement case. Sample language is provided below in A.4.

  • If the claimant objects to the remand, schedule the case for an ALJ hearing.

NOTE:

The Martinez settlement is limited to individuals with fugitive felon status and does not include parole or probation violators who were not included in the Martinez settlement.

3. Handling of Fugitive Felon Cases with Additional Medical Issue

Any fugitive felon case involving an appeal of a medical issue, for which the Hearing Office properly has jurisdiction to adjudicate, will remain with the Hearing Office for a determination on that issue, even if the individual may also be due relief under the Martinez settlement (see GN 02613.875 E.1).

4. Language for Remand Order

Use the following language to remand cases to the field office/program service center:

“I remand the case pursuant to 20 CFR §§ 404.948(c) and/or 416.1448(c), to the appropriate field office/ program service center to process the claim in accordance with the Martinez settlement. The claimant is not considered a fugitive felon according to our agency definition and a possibility of a fully favorable determination exists.”

B. Appeals Council

As a result of the Martinez settlement, favorable action on one or more of the following issues is possible for a request for review case that may be pending at the Appeals Council:

  • Whether the claimant's benefits were properly suspended based on his or her fugitive felon status,

  • Whether the claimant incurred an overpayment as a result of untimely imposition of the suspension for fugitive felon status, and/or

  • Whether the recovery of such an overpayment was not waived due to fugitive felon status.

1. Handling Title XVI Martinez Class Member Cases with Only Fugitive Felon Issue – Administrative Dismissal/Referral to Field Office for Revised Determination

  1. For cases that meet all of the following criteria:

    • the case is Title XVI;

    • the claimant is a Martinez class member who is due post-2006 relief (see GN 02613.860B.3 for a description of that relief); and

    • the only issue(s) on appeal to the Council is: the individual's fugitive felon status; the fact of an overpayment due to fugitive felon status; and/or the denial of a waiver of an overpayment resulting from fugitive felon status;

    the Appeals Council will issue an order vacating the unfavorable decision issued by the ALJ and return the case to the local FO. The local FO will then process the required Martinez relief (see GN 02613.875 E.2.b.).

    NOTE:

    The Martinez settlement is limited to individuals with fugitive felon status and does not include parole or probation violators who were not included in the Martinez settlement.

  2. If a case meets the criteria specified above, the Appeals Council will take the following action:

    1. Issue an order vacating the unfavorable decision issued by the Administrative Law Judge and administratively dismiss (ADDI) the request for review, citing the Martinez settlement and the right to a revised determination.

    2. Refer the case to the local FO to implement the relief required by the Martinez settlement which includes appeal rights in accordance with 20 CFR 416.1448(c)(1).

    3. Return the case to the local FO via form HA-505 “Transmittal by Office of Disability Adjudication and Review,” an example of which is in Attachment 2.

    4. Assign the Class Action Case Characteristic “MART” in ARPS.

The Appeals Council is using an administrative dismissal and referral procedure rather than remanding the claim to the Administrative Law Judge to remand to the FO, in order to expedite the relief for Martinez class members.

2. Handling of Fugitive Felon Cases with Additional Non-Medical Issues – Partial Administrative Dismissal

If the Appeals Council has a request for review on a case involving an individual's fugitive felon status, the fact of an overpayment due to fugitive felon status, and/or the denial of a waiver of an overpayment resulting from fugitive felon status, in addition to other non-medical issue(s) that the Appeals Council properly has jurisdiction to adjudicate, the Council will separate the fugitive felon issue from the other non-medical issues in the case.

The claimant is entitled to a new revised determination on the fugitive felon suspension, overpayment or denial of overpayment waiver due to fugitive felon status. Therefore, we will bifurcate the issues and follow the procedures in B.1. above with respect to the fugitive felon issue(s), but proceed with our action on the other issues in the case.

3. Handling of Fugitive Felon Cases with Additional Medical Issue

Any fugitive felon case involving an appeal of a medical issue for which the Appeals Council properly has jurisdiction to adjudicate, will remain with the Appeals Council for a determination on that issue, even if the individual may also be due relief under the Martinez settlement (see GN 02613.875 E.1).

C. Results of ODAR Actions

Upon receipt of the case from the Hearing Offices or the Appeals Council, the FO or PSC will evaluate the case under the Martinez settlement provisions and issue a revised reconsideration determination. Vacating the Administrative Law Judge's decision renders it no longer the final decision of the Commissioner and subject to revision, as pertinent.

VI. Public Law 111-115

On December 15, 2009, President Obama signed H.R. 4218, the “No Social Security Benefits for Prisoners Act of 2009,” which became Public Law 111-115.

As a result, the Social Security Act now prohibits paying any retroactive Title II or Title XVI benefits to beneficiaries or terminated beneficiaries while they are:

  • Prisoners (for Title XVI, see SI 02310.070C.1; for Title II, see GN 02607.025D, GN 02607.350A, GN 02607.310A, and GN 02607.330A.3),

  • Fugitive felons (as defined in GN 02613.860B1), or

  • Probation or parole violators (i.e., the arrest warrant offense code is 5011, 5012, 8101, or 8102).

This prohibition also applies to retroactive payments due to members of the Martinez court settlement until they are no longer prisoners, fugitive felons, or probation or parole violators (as defined above).

The Act's provision is effective with respect to payments that SSA pays beginning on or after December 15, 2009.

A. Title II Cases

If during case development, the claimant is identified as a prisoner, fugitive felon, or probation or parole violator:

  • Continue development and document the case file with the information, and

  • Flag the case with “Probation or Parole Violator Development Needed,” “Fugitive Felon Development Needed,” or “Prisoner Development Needed,” as appropriate.

If the ODAR decision is favorable, the PSCs will develop the prisoner, fugitive felon, or probation or parole violator information under current policy prior to releasing payment.

B. Title XVI Cases

If during case development, the claimant is identified as a prisoner, fugitive felon, or probation or parole violator:

  • Continue development and immediately alert the FO via email so it can take appropriate action under current policy, and

  • Flag the case with “Probation or Parole Violator Development Needed,” “Fugitive Felon Development Needed,” or “Prisoner Development Needed,” as appropriate.

If the ODAR decision is favorable, the FOs will develop the prisoner, fugitive felon, or probation or parole violator information before releasing payment.

VII. Inquiries

Direct all program-related and technical questions to the appropriate Regional Office (RO) support staff. RO support staff may refer questions or unresolved issues to their Headquarters' contacts in the Office of the Chief Administrative Law Judge.

Attachment 1. Final Order Approving Settlement; Filed with the United States District Court for the Northern District of California on October 15, 2008 and Approved by the Court on September 24, 2009.

DAVID H. FRY (SBN 189276)
David.Fry@mto.com
MARK R. CONRAD (SBN 255667)
Mark.Conrad@mto.com
JEREMY S. KROGER (SBN 258956)

Jeremy.Kroger@mto.com
Munger, Tolles & Olson LLP

560 Mission Street, 27th Floor
San Francisco, CA 94105-2907
T: (415) 512-4000 / F: (415) 512-4077

GERALD A. McINTYRE (SBN 181746)
gmcintyre@nsclc.org
National Senior Citizens Law Center
3435 Wilshire Blvd., Suite 2860
Los Angeles, CA 90010-1938
T: (213) 674-2900 / F: (213) 639-0934

ANNA RICH (SBN 230195)
arich@nsclc.org
KEVIN PRINDIVILLE (SBN 235835)
kprindiville@nsclc.org
National Senior Citizens Law Center
1330 Broadway, Suite 525
Oakland, CA 94612
T: (510) 663-1055 / F: (510) 663-1051

EMILIA SICILIA
esicilia@urbanjustice.org
JENNIFER PARISH
jparish@urbanjustice.org
Urban Justice Center
123 William Street, 16th Fl.
New York, NY 10038
T: (646) 602-5668 / F: (212) 533-4598

Christopher A. Douglas (SBN 239556)
cdouglas@legalaidsmc.org
M. Stacey Hawver (SBN 146012)
mshawver@legalaidsmc.org
Legal Aid Society of San Mateo County
521 East 5th Avenue
San Mateo, CA 94402
T: (650) 558-0915 / F: (650) 558-0673

MARILYN HOLLE (SBN 61530)
marilyn.holle@disabilityrightsca.org
Disability Rights California
3580 Wilshire Blvd. Suite 902
Los Angeles, CA 90010-2522
T: (213) 427-8747 / F: (213) 427-8767

Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OAKLAND DIVISION

ROSA MARTINEZ, JIMMY HOWARD, ROBERTA DOBBS, BRENT RODERICK, SHARON ROZIER, and JOSEPH SUTRYNOWICZ, on behalf of themselves and all others similarly situated,

Plaintiffs,

vs.

MICHAEL J. ASTRUE, Commissioner of Social Security, in his official capacity,

Defendant.

CASE NO. 08-CV-4735 CW

STIPULATION OF SETTLEMENT
Date:             August 11, 2009
Time:             2:00 p.m.
Dept:             Courtroom 2, 4th Floor

The Hon. Claudia Wilken

JOSEPH P. RUSSONIELLO (SBN 44332)
United States Attorney
JOANN M. SWANSON (SBN 88143)
Chief, Civil Division
VICTORIA R. CARRADERO (SBN 217885)
Assistant United States Attorney
ANDREW Y.S. CHENG (SBN 164613)
Assistant United States Attorney
MICHAEL T. PYLE (SBN 172954)
Assistant United States Attorney
450 Golden Gate Avenue, 9th Floor
San Francisco, California 94102-3495
Telephone: (415) 436-6813
Facsimile: (415) 436-6748
Email: Andrew.Cheng@usdoj.gov
Email: Victoria.Carradero@usdoj.gov

Attorneys for Federal Defendant

RECITALS

WHEREAS, on October 15, 2008, Plaintiffs Rosa Martinez and Jimmy Howard filed this putative class action lawsuit against Defendant Michael J. Astrue, in his official capacity as Commissioner of Social Security;

WHEREAS an Amended Complaint was filed on December 12, 2008 adding Plaintiffs Roberta Dobbs, Brent Roderick, Sharon Rozier, and Joseph Sutrynowicz;

WHEREAS Plaintiffs allege that Defendant's policy of denying or suspending benefits to persons on the basis of an outstanding felony arrest warrant and not permitting persons with outstanding felony arrest warrants to serve as representative payees violates the Social Security Administration's governing statutes and regulations;

WHEREAS Defendant denies Plaintiffs' allegations, denies all liability with respect to the Action, and denies that it committed any violation of law;

WHEREAS the Parties desire to resolve amicably all the claims raised in the above-captioned action without admission of liability in order to avoid the substantial expense, inconvenience, and distraction of protracted litigation;

WHEREAS the Parties have conducted discussions and arm's length negotiations with Defendant's Counsel with respect to a compromise and settlement of the Action with a view to settling the issues in dispute and furnishing relief consistent with the interests of the Named Plaintiffs and the Class;

WHEREAS the Parties (1) have concluded that the terms and conditions of this Stipulation of Settlement are fair, reasonable and in the best interests of the Named Plaintiffs and the Class; (2) have agreed that the Released Parties should be released from the Released Claims pursuant to the terms and provisions of this Stipulation of Settlement; (3) and have agreed to the dismissal of the Action with prejudice, after considering the substantial benefits that the Named Plaintiffs and the Class will receive from settlement of the Action, the risks of litigation, and the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation of Settlement;

NOW THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Named Plaintiffs and Defendant, through their respective attorneys, subject to approval by the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the benefits flowing to the Parties from the Settlement Agreement, that all Released Claims shall be compromised, settled, forever released, barred and dismissed, with prejudice, upon and subject to the following terms and conditions.

DEFINITIONS

“Action” means the litigation in the United States District Court, Northern District of California, Case No. 08-CV-4735 CW.

The “Benefit Programs” means, collectively, the SSI, SVB, and OASDI benefit programs under the Social Security Act.

“Class Counsel” or “Plaintiffs' Counsel” means: the National Senior Citizens Law Center; Munger, Tolles & Olson, LLP; the Urban Justice Center; Disability Rights California; and the Legal Aid Society of San Mateo County.

The “Class” or “Class Members” means: for purposes of this settlement only, a Plaintiff class pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure, comprising: All persons whose SSI, SVB, or OASDI benefits have been suspended or denied, or who have been notified of a proposed suspension or denial of such benefits, for “fleeing to avoid prosecution or custody or confinement after conviction” for a felony or who are not permitted to serve as Representative Payees for SSI, SVB or OASDI benefits for “fleeing to avoid prosecution or custody or confinement after conviction” for a felony. The class shall not include, and this settlement shall not apply to, any individual who has received a final federal court disposition regarding payment or nonpayment of benefits due to fugitive felon status.

“Court” means the United States District Court for the Northern District of California.

“Defendant” or “the Commissioner” means Michael J. Astrue, the Commissioner of Social Security, in his official capacity.

“Effective Date” means 61 days from the Court's entry of an order granting final approval of the settlement terms or after which the time to file any appeal has concluded and any and all objections have been resolved and appeals have been exhausted, whichever is later.

“Final Approval Date” means the date upon which the Court enters an order granting final approval of this Settlement Agreement, after having determined that it is adequate, fair, reasonable, equitable, and just to the Class as a whole after a hearing on the fairness of the settlement.

“Lead Class Counsel” or “Lead Plaintiffs' Counsel” means Gerald McIntyre of the National Senior Citizens Law Center.

“Named Plaintiffs” refers to Rosa Martinez, Jimmy Howard, Roberta Dobbs, Brent Roderick, Sharon Rozier, and Joseph Sutrynowicz.

“National Crime Information Center (NCIC) codes” refer to the offense codes categorizing felony arrest warrants on the FBI's national database.

“OASDI” means Old Age, Survivors, and Disability Insurance, under Title II of the Social Security Act.

“Overpayment” means a determination made by the Commissioner that a program beneficiary has received more than the correct benefit payment due because of a benefit suspension based on an outstanding felony arrest warrant, unless the suspension was based on a warrant with a NCIC felony offense code of 4901 (Escape), 4902 (Flight to avoid prosecution, confinement), or 4999 (Flight-Escape).

“Parties” refers to the Named Plaintiffs, the Class, and Defendant.

“Plaintiffs” refers to the Named Plaintiffs, acting on their own behalf and on behalf of all Class Members.

“Post- 2006 Class Members” means all Class Members for whom SSA made an initial suspension, initial denial, or administrative appeal denial on or after January 1, 2007 based on an outstanding felony arrest warrant unless the determination was based on an outstanding felony arrest warrant with a NCIC code of 4901, 4902, or 4999; or with a pending administrative claim challenging any such suspension or denial as of August 11, 2008.

“Pre-2007 Class Members” means all Class Members for whom SSA made an initial suspension or initial denial based on an outstanding felony arrest warrant unless the determination was based on an outstanding felony arrest warrant with a NCIC code of 4901, 4902, or 4999, on or after January 1, 2000, but before January 1, 2007, and who did not obtain an administrative appeal denial on or after January 1, 2007; or who did not have a pending administrative claim on August 11, 2008 appealing such a suspension or denial.

“Preliminary Approval Date” means the date upon which the Court enters the Order attached as Exhibit A preliminarily approving this Settlement Agreement, and setting a fairness hearing.

“Released Claims” means any and all claims asserted in the First Amended Complaint by and/or on behalf of the Class Members, and claims related to the subject matter of this litigation that could have been asserted in the First Amended Complaint.

“Released Parties” means Defendant, his predecessors, successors, departments, agencies, past or present agents, employees and contractors.

“Releasing Parties” means Plaintiffs, the Class and the Class Members, on behalf of themselves, their heirs, executors, administrators, representatives, attorneys, successors, assigns, agents, affiliates, and partners, and any Persons they represent. Nothing in this definition shall be interpreted to contravene 42 U.S.C. § 407 prohibiting transfer or assignment of claims or benefits.

“Representative Payee” means an individual who has been selected or appointed to receive payments on behalf of any beneficiary of the Benefit Programs pursuant to 42 U.S.C. §§ 405(j), 1007(d), or 1383(a).

“SSA” means the Social Security Administration.

“Settlement Agreement,” “Settlement,” or “Agreement” means this Stipulation of Settlement, including the attached exhibits.

“SSI” means Supplemental Security Income under Title XVI of the Social Security Act.

“SVB” means Special Veterans Benefits under Title VIII of the Social Security Act.

AGREEMENT

ARTICLE I

APRIL 1, 2009 POLICY CHANGE

1.1 Effective April 1, 2009, SSA suspends/denies benefits/payments to Class Members using the current policy and procedure only for three categories of NCIC Uniform Offense Classification Codes as follows: Escape (4901); Flight to avoid (prosecution, confinement, etc.) (4902); and Flight-Escape (4999). SSA's policy is set forth in Policy Instruction EM-09025. See Exhibit B.

1.2 Effective April 1, 2009, SSA applies the policy in paragraph 1.1 when considering a person's request to serve as a Representative Payee. However, SSA may use all warrant information in determining an individual's suitability to serve as a Representative Payee. See Exhibit C.

ARTICLE II

RELIEF TO POST-2006 CLASS MEMBERS

2.1 SSA shall provide relief to all Post-2006 Class Members consistent with the following provisions.

2.2 SSA shall identify and remove overpayments resulting from initial suspensions, initial denials, or administrative appeal denials SSA made on or after January 1, 2007 based on an outstanding felony arrest warrant unless based on a warrant with NCIC codes of 4901, 4902, or 4999 for any period of suspension prior to January 1, 2007 back to the first month of suspension. SSA will repay any sums already collected pursuant to the overpayment determination.

2.3 SSA will reinstate benefit payments for any periods of suspension subject to a redetermination of non-medical eligibility criteria. Normal redetermination procedures will apply. Close out procedures consistent with the guidance in existing POMS will apply. SSA may conduct continuing disability reviews (CDRs) pursuant to generally applicable SSA policies after benefits/payments have been reinstated.

2.4 SSA may need to reopen a previously denied claim to assess medical and non-medical eligibility criteria, except that where a medical determination of disability has already been made, the medical determination shall not be reopened except pursuant to generally applicable SSA policies. Normal determination of non-medical eligibility criteria will apply.

2.5 Except as stated herein, all payments to Post-2006, Class Members are subject to regular payment, nonpayment, and reduced payment provisions of the Social Security Act.

2.6 Following the Effective Date, SSA shall contact the Post-2006 Class Members through individual notices mailed to the last known address on SSA records. SSA shall bear the cost of this notice. The notices generally shall advise that SSA's policy regarding outstanding felony arrest warrants has changed and that the individuals may be entitled to or eligible for benefits or payments for applicable periods of suspension or non-payment.

ARTICLE III

RELIEF TO PRE-2007 CLASS MEMBERS

3.1 SSA shall provide relief to all Pre-2007 Class Members consistent with the following provisions.

3.2 SSA shall cease to collect overpayments of any previous benefit payments made to Pre-2007 Class Members and shall remove any remaining balance. Nothing in this paragraph shall be read to require SSA to reimburse Pre-2007 Class Members for any benefit payments that the Pre-2007 Class Members have already repaid to the SSA, unless the individual meets the conditions required by SSA regulations for reopening a claim.

3.3 Except as stated herein, all payments to Pre-2007 Class Members are subject to regular payment, nonpayment, and reduced payment provisions of the Social Security Act.

3.4 Following the Effective Date, SSA shall send individual notices, mailed to the most recent address in SSA's records, to each Pre-2007 Class Member who is not receiving benefits as of April 1, 2009 on the basis that they have an outstanding felony arrest warrant other than three categories of NCIC codes of 4901, 4902, and/or 4999. SSA shall bear the cost of this one-time notice and will not conduct any follow-up address search or mailing. The notice will inform the individual that SSA suspends or denies benefits/payments using the current policy and procedure only for three categories of NCIC codes 4901, 4902 and/or 4999. The notice will state that, if the individual thinks he/she may be eligible for benefits/payments, he/she may contact SSA through the 1-800 telephone number to schedule an appointment for prospective reinstatement of Title II benefits or to file a new application for Title II (if required), Title VIII, or Title XVI benefits. Unless an individual covered by Article II also has a separate suspension or denial in the period January 1, 2000 through December 31, 2006 for an outstanding felony arrest warrant except for warrants with codes of 4901, 4902, and/or 4999, the individual would not receive the notice covered in this paragraph.

3.5 If a Pre-2007 Class Member contacts SSA to make an appointment within six months of the date on the notice mailed pursuant to the preceding paragraph, that individual shall receive a “protective filing date” of April 1, 2009, for any subsequent application for benefits or request for reinstatement—i.e., SSA will treat that individual's application or request as if it had been filed on April 1, 2009.

ARTICLE IV

PUBLICATION

4.1 Immediately following the Final Approval Date, SSA shall publicize the terms of this Agreement consistent with the following provisions.

4.2 SSA shall post a news item on its official, public website, www.socialsecurity.gov, that will summarize the key provisions of this Agreement, including the provisions set forth in ARTICLE I, ARTICLE II, and ARTICLE III.

4.3 SSA shall revise the “fugitive felon” webpage, located at www.ssa.gov/oig/investigations/fugitivefelon/fugitivefelon.htm, to reflect the changes in policy set forth in this Agreement.

4.4 SSA shall publish a Social Security Ruling in the Federal Register. The Ruling shall explain how SSA will implement the fleeing felon provisions under the terms of this Agreement. The Ruling shall also be made available on SSA's website, www.socialsecurity.gov.

ARTICLE V

TIMEFRAMES FOR IMPLEMENTATION

5.1 On June 12, 2009, SSA developed implementation plans to set forth all anticipated timeframes for implementing the terms of this Agreement. The timeframes set forth by SSA reflect due diligence in implementation. Should the court substantively alter the terms of the this Settlement Agreement such that SSA's implementation plans must be amended, and SSA agrees to the amendment, SSA will have an additional 60 business days from the Final Approval Date to submit final implementation plans.

5.2 If SSA needs to make a significant adjustment to the June 12, 2009, implementation plan either due to changes required by ¶ 5.1 of this agreement or due to currently unknown facts or unanticipated circumstances (including changes in the fairness hearing date or the effective date of the settlement), SSA will notify Lead Class Counsel and explain the facts or circumstances. Upon receipt of any such notice and explanation, Lead Class Counsel may notify SSA of any concerns about the adjustment and the parties will seek to resolve these concerns amicably. If, in Lead Class Counsel's view, SSA does not adequately respond to the concerns, Lead Class Counsel will follow the dispute resolution procedures described in Article X.

ARTICLE VI

INQUIRIES, COMMENTING, AND REPORTING

6.1 SSA shall designate an individual who will serve as a point of contact for Lead Class Counsel. Said individual will act in good faith to address any inquiries from Lead Class Counsel related to the implementation of this Agreement.

6.2 SSA shall provide to Lead Class Counsel an advance copy of any draft POMS instructions, Emergency Messages, and the one-time draft notices (stipulated in paragraphs 2.6 and 3.4) to Class Members issued in implementation of this Settlement Agreement. Lead Class Counsel will provide comments, if any, to SSA, within two business days of receiving the drafts. SSA is not obligated to respond to Lead Class Counsel's comments or to incorporate those comments into any POMS instructions, Emergency Messages, or notices that it issues.

6.3 The SSA shall provide Lead Class Counsel with notification of:

  1. the dates that the SSA begins and substantially completes each phase of the implementation plan developed by the SSA pursuant to ARTICLE V of this Settlement Agreement; and

  2. the aggregate number of notices sent to individuals pursuant to ARTICLE II and ARTICLE III of this Agreement.

ARTICLE VII

ENTIRE AGREEMENT

7.1 The terms of this Settlement Agreement and any exhibits thereto are the exclusive and full agreement of the Parties with respect to all claims for relief and attorneys' fees and costs as set forth in this Settlement Agreement and in the First Amended Class Action Complaint. No representations or inducements or promises to compromise this action or enter into this Settlement Agreement have been made, other than those recited or referenced in this Settlement Agreement.

7.2 This Settlement Agreement is not intended to change, modify, or revise SSA's or the Office of Inspector General's implementation of sections 202(x)(3)(C) and 1611(e)(5)(A) of the Social Security Act with regard to the disclosure of information to federal, state or local law enforcement.

ARTICLE VIII

APPROVAL

8.1 This Settlement Agreement is expressly conditioned upon its approval by the Court.

8.2 The terms of this Settlement Agreement are adequate, fair, reasonable, equitable and just.

ARTICLE IX

FINAL JUDGEMENT

9.1 If, after the fairness hearing, the Court approves this Settlement Agreement as adequate, fair, reasonable, equitable and just, the Court shall direct the entry of an order dismissing this action with prejudice, pursuant to the terms of this Settlement Agreement and Fed. R. Civ. P. 41(a)(2), except that the Court shall retain jurisdiction for the limited purposes described in ARTICLE X of this Settlement Agreement. The Court's order shall incorporate the terms of the Settlement Agreement.

ARTICLE X

CONTINUING JURSIDICTION

10.1 The Court will retain jurisdiction over this matter for the purposes of (a) enforcing the provisions of the Settlement Agreement in the event that one of the Parties claims (after following this Agreement's dispute resolution procedures) that there has been a breach of the Settlement Agreement; (b) modifying the Settlement Agreement if jointly requested by the Parties pursuant to ARTICLE XI and (c) entering any other order authorized by the Settlement Agreement. Both Class Counsel and Defendant's counsel will make good faith efforts to amicably resolve issues with regard to the Agreement. If the parties are not able to resolve matters, they will engage in good faith mediation discussions before a magistrate judge designated by the court (the parties' preference is Magistrate Judge Edward Chen), prior to seeking enforcement pursuant to this Article.

ARTICLE XI

MODIFICATION

11.1 At any time while the Court retains jurisdiction over this matter as described in ARTICLE X, Plaintiffs and Defendant may jointly agree to modify this Settlement Agreement. Any request for modification must be in writing, signed by both Class Counsel and Defendant's counsel, and is subject to approval by the Court.

ARTICLE XII

CHANGE IN CONTROLLING LAW

12.1 A change in controlling law, e.g., an amendment to the Social Security Act that is inconsistent with the terms of this Agreement, shall supersede the terms of this Agreement.

ARTICLE XIII

RELEASE

13.1 This Settlement Agreement fully and finally resolves all claims asserted in the First Amended Complaint filed by Plaintiffs on December 12, 2008, any and all claims related to the subject matter of this litigation that could have been asserted in the First Amended Complaint. Effective upon the Final Approval Date and subject to the terms of ARTICLE VIII and ARTICLE IX above, the Releasing Parties shall be deemed to have, and by operation of the final judgment shall have, fully, finally and forever released, relinquished, discharged, and dismissed with prejudice the Released Parties of and from any and all of the Released Claims, and the Releasing Parties shall forever be barred and enjoined from bringing or prosecuting any Released Claim against any of the Released Parties. Nothing contained herein shall release the Commissioner or SSA of any obligations arising under this Settlement Agreement.

ARTICLE XIV

NO ADMISSION

14.1 This Settlement Agreement does not constitute an admission by the Defendant of any pattern or practice that violates or fails to comply with applicable law governing the matters alleged in this action.

14.2 This Settlement Agreement, whether or not executed, and any proceedings taken pursuant to it (a) shall not be construed to waive, reduce or otherwise diminish the authority of the Defendant to enforce the laws of the United States against Class Members notwithstanding the terms of this Stipulation, consistent with the Constitution and laws of the United States; (b) shall not be offered or received against the Defendant as evidence of, or construed as or deemed to be evidence of, any presumption, concession, or admission by the Defendant of the truth of any fact alleged by the Plaintiffs or the validity of any claim that had been or could have been asserted in the Action or in any litigation, or the deficiency of any defense that has been or could have been asserted in the Action, or of any liability, negligence, fault, or wrongdoing of the Defendant; or any admission by the Defendant of any violations of, or failure to comply with, the Constitution, laws or regulations; (c) shall not be offered or received against the Defendant as evidence of a presumption, concession, or admission of any liability, negligence, fault, or wrongdoing; and (d) shall not be in any way referred to for any other reason as against any of the Parties in any other civil, criminal, or administrative action or proceeding, other than such proceedings as may be necessary to effectuate the provisions of this Settlement Agreement; provided, however, that if this Settlement Agreement is approved by the Court, Defendant may refer to it and rely upon it to effectuate the liability protection granted it hereunder.

ARTICLE XV

PAYMENT OF FEES AND COSTS TO CLASS COUNSEL

15.1 As part of this Settlement Agreement, Defendant agrees to pay to Class Counsel the sum of Four Hundred Eighty Three Thousand Dollars ($483,000.00) in full satisfaction of all attorneys' fees, costs, and expenses for any and all claims Plaintiffs have asserted or could have asserted in this litigation. No further attorneys' fees or costs will be paid for any actions taken by Class Counsel (or any individual plaintiff's counsel) after March 30, 2009. Unless otherwise agreed to in writing by the Parties, this amount shall be payable as follows:

  • National Senior Citizens Law Center

$225,000

  • Munger, Tolles & Olson LLP

$141,000

  • Urban Justice Center

$70,000

  • Disability Rights California

$35,000

  • Legal Aid Society of San Mateo

$12,000

15.2 These amounts shall be transmitted by way of an Electronic Funds Transfer in accordance with instructions to be provided to SSA by each of the entities listed in Paragraph 15.1 above. Class Counsel will promptly and fully cooperate with required forms and information necessary for SSA to process payment.

15.3 Defendant will use best efforts to arrange for the transfer of these funds within thirty days (30) days following the Effective Date. Defendant shall notify Lead Plaintiffs' Counsel in writing if Defendant learns that there will be a delay beyond this period.

ARTICLE XVI

ADDITIONAL PROVISIONS

16.1 All of the exhibits attached hereto are hereby incorporated by reference as though fully set forth herein.

16.2 The headings herein are used for the purpose of convenience only and are not intended to have legal effect.

16.3 The waiver by one party of any breach of this Settlement Agreement by any other party shall not be deemed a waiver of any other prior or subsequent breach of this Settlement Agreement.

16.4 This Settlement Agreement may be executed in one or more counterparts. All executed counterparts and each of them shall be deemed to be one and the same instrument provided that counsel for the parties to this Settlement Agreement shall exchange among themselves original signed counterparts.

16.5 This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of the parties hereto. Nothing in this provision shall be interpreted to contravene 42 U.S.C. § 407 prohibiting transfer or assignment of claims or benefits.

16.6 This Settlement Agreement shall not be construed more strictly against one party than another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one of the parties, it being recognized by the parties that this Stipulation is the result of arm's length negotiations between the parties and that all parties have contributed substantially and materially to the preparation of this Stipulation.

16.7 All counsel and any other person executing this Settlement Agreement and any of the exhibits hereto, or any related settlement documents, warrant and represent that they have the full authority to do so and that they have the authority to take appropriate action required or permitted to be taken pursuant to the Settlement Agreement to effectuate its terms.

16.8 Class Counsel and Defendant's Counsel agree to cooperate fully with one another in seeking preliminary approval from the Court of the Settlement Agreement and to promptly agree upon and execute all such other documentation as may be reasonably required to obtain final approval of the Settlement Agreement.

16.9 Class Counsel agree not to encourage any Class Member, non-profit agency, individual or attorney to challenge the Settlement Agreement or interfere with the process of obtaining preliminary or final approval of the Settlement Agreement from the Court.

DATED: August 14, 2009

National Senior Citizens Law Center
Attorneys for Plaintiffs, on behalf of Plaintiffs
and all Plaintiffs' Counsel

By:
GERALD A. McINTYRE
DATED: August 14, 2009

UNITED STATES ATTORNEY
JOSEPH P. RUSSONIELLO
Attorney for Defendant

By:
VICTORIA R. CARRADERO
ASSISTANT UNITED STATES ATTORNEY

Attachment 2. Form HA-505 “Transmittal by Office of Disability Adjudication and Review”

TRANSMITTAL BY OFFICE OF

DISABILITY ADJUDICATION AND REVIEW

DATE:

TO:

Social Security Administration

ATTENTION: OFFICE MANAGER

  

FROM:

Office of Appellate Operations

RSI/SSI Branch

BY

(Claimant's Name and SSN)

Name xxx-xx-xxxx

  

(Wage Earner)(Leave blank if same as above)

  

ATTACHMENT(S): SSI File

MARTINEZ SETTLEMENT CASE

  

The Appeals Council vacated the Administrative Law Judge's decision of [date] because, based upon the settlement in Martinez, a favorable revised reconsidered determination is possible.

Please review the case and issue a revised reconsidered determination. The notice of such determination should provide the claimant with the right to a hearing.