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DAVID H. FRY (SBN 189276)
GERALD A. McINTYRE (SBN 181746)
ANNA RICH (SBN 230195)
Attorneys for Plaintiffs
ADDITIONAL COUNSEL LISTED ON NEXT PAGE
UNITED STATES DISTRICT COURT
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)
MARILYN HOLLE (SBN 61530)
Attorneys for Plaintiffs
JOSEPH P. RUSSONIELLO (SBN 44332)
Attorneys for Federal Defendant
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.
“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.
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.
|Page 7||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.
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.
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.
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.
|Page 9|| 6.3 The SSA shall provide Lead Class Counsel with notification of:
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.
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.
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.
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.
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.
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.
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
|Page 12||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.
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:
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.
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.