I-5-4-47.Medellin v. Shalala
|Definition of the Medellin Class|
|Processing and Adjudication of Medellin Claims|
|Teletype Instruction IT-67-91; Issued December 16, 1991|
|Medellin v. Shalala Partial Consent Judgment; Dated December 16, 1993|
|Example: Notice of Important Information — No Relief (Other Reason)|
|Example: Notice of Important Information — No Relief to Survivor (Other Reason)|
|Example: Notice to Deny Request for Payment of Underpayment — (Respondent Not an Eligible Survivor)|
|Example: Notice of Change of Payment — No Current Eligibility|
|Example: Notice of Underpayment Due a Survivor|
|Example: Notice of Important Information — No Relief (FO Determines No Loan Exists)|
|Example: Notice of Important Information — No Relief to Survivor (FO Determines No Loan Exists)|
ISSUED: May 5, 1995
This Temporary Instruction (TI) sets forth procedures for implementing the parties' December 1, 1993 partial consent judgment that was approved by the United States District Court for the Western District of Missouri on December 16, 1993, in Medellin v. Shalala.
Adjudicators throughout the country must be familiar with this TI because class members who now reside outside of the State of Missouri must have their cases processed in accordance with the requirements of the Medellin consent judgment.
On September 10, 1990, plaintiffs filed a statewide class action in Missouri challenging the Secretary's loan policy that restricted the definition of “loan” in 20 CFR § 416.1103(f) to transactions that involved an exchange of money and resulted in treating advances of food or shelter as income for Supplemental Security Income (SSI) purposes.
On December 16, 1991, following adverse decisions in the Fifth and Ninth Circuits in Hickman v. Bowen, 803 F.2d 1377 (5th Cir. 1986) and Ceguerra v. Secretary, 933 F.2d 735 (9th Cir. 1991), SSA announced a policy reinterpretation, through teletype instruction IT-67-91, effective December 17, 1991, that permitted bona fide loans of food or shelter to be treated in the same manner as cash loans (i.e., disregarded) when computing SSI eligibility and benefit amounts (Attachment 1). IT-67-91 noted the applicability of the one-year timeframe for reopening prior determinations or decisions based on this change of position.
On June 10, 1992, the district court certified a class in Medellin consisting of: 1) all SSI applicants or recipients who resided in Missouri at the time their SSI applications were denied, or at the time their SSI benefits were reduced or terminated, between July 12, 1990, and December 31, 1991, because the Secretary counted as income in-kind support and maintenance (IKSM) that the applicant or recipient was obligated to repay under a loan agreement; and, 2) all SSI applicants and recipients who resided in Missouri during the period July 12, 1990, to September 10, 1990, and were either appealing or could have appealed a determination or decision that resulted in or upheld a denial, reduction or termination of SSI benefits that occurred because the Secretary counted as income IKSM that the applicant or recipient was obligated to repay under a loan agreement while a resident of Missouri.
On September 8, 1992, SSA published Social Security Ruling (SSR) 92-8p to provide a uniform national policy interpretation on the treatment of advances of IKSM and to further implement the December 1991 policy change.
On December 18, 1992, the district court issued an order granting plaintiffs' motion for summary judgment and revising its class certification order to address the effect of the Secretary's policy change on the merits of potential class member claims. The court found that the Secretary's former loan policy was invalid but that the Secretary's change in position had rendered plaintiffs' action moot with respect to inclusion of those individuals who had “pending or available administrative claims” as of December 16, 1991. However, the court also found that those individuals with “lapsed claims,” i.e., those individuals whose SSI benefits had been denied, reduced or terminated and who failed to exhaust fully the available administrative remedies and/or seek judicial review prior to December 16, 1991, were improperly excluded from the class because they would be unable to benefit from the Secretary's change in policy. Thus, the court modified the class definition set forth in its order of June 10, 1992, concluding that waiver of exhaustion of administrative remedies was appropriate regardless of whether the individual had presented a timely § 405(g) action. The court concluded that November 10, 1986, the date on which the Fifth Circuit invalidated the Secretary's former loan policy in Hickman, was a reasonable opening date for the class because the Hickman decision should have put the Secretary on notice that the validity of its former policy was in question.
On February 11, 1993, the court denied the Secretary's motion to alter or amend the order of December 18, 1992. The Secretary filed a timely notice of appeal in the United States Court of Appeals for the Eighth Circuit with respect to the inclusion of “lapsed claims” in the class definition but did not appeal the inclusion of live claims. The merits of plaintiffs' complaint was no longer at issue because of the Secretary's December 1991 change of position. The parties signed a partial consent judgment on December 1, 1993, for the purpose of proceeding with implementation of relief for those individuals with live claims.
On December 16, 1993, the district court approved the parties' partial consent judgment (Attachment 2). The partial consent judgment requires that the Secretary apply the new loan policy to all individuals who meet the class definition set forth in the district court's June 10, 1992 order; however, individuals with “lapsed claims,” i.e., those individuals who failed to fully exhaust the available administrative remedies and/or seek judicial review between November 11, 1986, and July 11, 1990, who were added to the class by the district court's order of December 18, 1992, were excluded from relief under the partial consent judgment.
On April 28, 1994, the Eighth Circuit reversed the district court's order of December 18, 1992, with respect to inclusion of individuals with lapsed claims in the Medellin class. By this action, the partial consent judgment became descriptive of the full scope of relief available in the Medellin class action.
III. Guiding Principles
Under Medellin, the Secretary will make a new eligibility determination for persons who: 1) respond to notice informing them of the opportunity for review; and 2) are determined to be class members under the partial consent judgment after screening (see Part V. (Preadjudication Actions) below). The Mid-America Program Service Center (MAMPSC) or the SSA field office (FO) (i.e., district office or branch office) servicing the claimant's residence, as appropriate, will screen cases to determine class membership.
The FO will make a new eligibility determination at the reconsideration level regardless of the final level at which the case was previously decided. Individuals who receive adverse determinations will have full appeal rights (i.e., Administrative Law Judge (ALJ) hearing, Appeals Council and judicial review). Generally, the partial consent judgment does not require any change in OHA's adjudicatory policies because, since December 16, 1991, OHA adjudicators have been excluding bona fide loans based on advances of food or shelter in computing SSI eligibility and benefit amounts. However, under the partial consent judgment, the Secretary will recognize and accept as determinative and final any prior decision of the Secretary at any administrative level that there did exist a bona fide loan based on the advance of food or shelter and honor that determination without further inquiry.
IV. Definition of the Medellin Class
Except as noted below, for purposes of implementing the December 16, 1993 partial consent judgment, Medellin class members include all SSI applicants and recipients who, between July 12, 1990, and December 31, 1991, inclusive, resided in Missouri and received a determination or decision at any administrative level (initial, reconsideration, ALJ hearing or Appeals Council review) that denied their SSI applications or reduced or terminated their SSI benefits because SSA counted as income IKSM that the applicant or recipient was obligated to repay under a loan agreement. Medellin class members also include all past or present residents of Missouri who, between July 12, 1990, and September 10, 1990, inclusive, were appealing or could have appealed a determination or decision that resulted in or upheld a denial, reduction or termination of SSI benefits that occurred because SSA counted as income IKSM that the applicant or recipient was obligated to repay under a loan agreement while a resident of Missouri.
A person is not a class member under the partial consent judgment in Medellin if
(1) the individual is a former resident of Missouri and received a determination or decision between July 12, 1990, and December 31, 1991, inclusive, but the individual was not a resident of Missouri at the time the determination or decision was issued; or
(2) the individual's income (after excluding bona fide loans of food or shelter) or resources preclude SSI eligibility or additional payment.
Class membership is not precluded by a prior decision that became final prior to the class timeframe and reduced an individual's SSI benefits based on the receipt of IKSM even though the individual alleged that the support was made pursuant to a loan of food or shelter. Subsequent applications decided within the class timeframe would still be subject to relief consideration.
V. Preadjudication Actions
On March 30, 1994, SSA began sending notices to all potential class members in Medellin as identified by computer run. The notice included a reply form and a postage-paid return envelope addressed to the MAMPSC. Individuals had/have 60 days from the date of receipt of the notice to contact SSA by completing and returning the reply form, by telephone, in writing or in person to request that SSA readjudicate their claims under the terms of the partial consent judgment. Receipt of notice is presumed to have occurred 5 days after the date on the notice, unless the individual can show it was not received within the 5-day period.
All untimely responses are sent to the respondent's servicing FO to develop good cause for the untimely response. Good cause determinations are based on the standards in 20 CFR § 416.1411 and SSR 91-5p. If good cause is not established, the field office sends the appropriate notice.
B. Identifying Medellin Class Members Entitled to Relief
1. MAMPSC Responsibilities
Upon receipt of a reply form, MAMPSC obtained an SSID query for the respondent. MAMPSC did not routinely obtain the claim folder. MAMPSC attempted to telephone each respondent, briefly explain the Medellin case and ask each respondent if he or she considered the food or shelter received to be the basis for a loan. If the respondent did not allege a loan, MAMPSC documented the allegation on a report of contact and issued a notice (see Part V. B. 3. below) advising the respondent that he or she is not a class member under the Medellin court case. MAMPSC forwarded the case information and a copy of the notice to the servicing FO.
If a respondent alleged a loan based on an advance of food or shelter, or if a questionable situation arose, MAMPSC advised the respondent that the local FO would contact him or her for further information. MAMPSC documented the discussion on a report of contact and forwarded the case information to the servicing FO for further development.
If MAMPSC was unable to contact a respondent by telephone, it forwarded the case information to the servicing FO for further action.
MAMPSC's involvement in implementation concluded in 1994 after screening and processing most of the original responses. Any remaining responder case are being handled by the servicing FO.
2. FO Responsibilities
The FO initiates contact with a respondent to explain the Medellin partial consent judgment, and asks each respondent if he or she considers the food or shelter received to be the basis for a loan, when:
MAMPSC is unable to contact a respondent by telephone;
a reply form is returned to the FO rather than to MAMPSC; or
an individual not previously sent a Medellin notice contacts the FO to inquire about potential relief.
The FO contacts a respondent to develop for good cause when a reply is made more than 70 days after the date of the Medellin notice. The FO screens the cases of Medellin respondents to eliminate cases from loan development in which the claimant is deceased and there is no identifiable survivor who could be eligible to receive an SSI underpayment.
3. Notice to Non-Class Members
MAMPSC or the FO sends the appropriate notice (Attachments 3 - 5), modified to fit the circumstances of the case, to any individual who is not a class member under the Medellin partial consent judgment because the individual:
does not allege an advance of food or shelter as the basis for a loan (Attachment 3 or 4);
has income (after excluding bona fide loans based on advances of food or shelter) or resources that preclude SSI eligibility or additional payment (Attachment 3 or 4);
was not a past or present resident of the State of Missouri who received a determination or decision at any administrative level that was issued between July 12, 1990, and December 31, 1991, inclusive (Attachment 3 or 4);
is deceased and there is no survivor who is eligible to receive an SSI underpayment (Attachment 5).
An individual who wishes to challenge a determination that he or she is not eligible for Medellin relief for any reason other than he or she is not a survivor eligible to receive an underpayment may do so only through class counsel, as explained in the notice (Attachments 3 - 4). An individual who wishes to challenge a determination that he or she is not a survivor eligible to receive an underpayment receives an initial determination with the right to request reconsideration (Attachment 5).
VI. Processing and Adjudication of Medellin Claims
A. FO Adjudication of Medellin Claims
The FO will conduct the first Medellin review. The new eligibility determination made by the FO will be a redetermination at the reconsideration level, regardless of the administrative level at which the Medellin claim(s) was previously decided, with full appeal rights (i.e., ALJ hearing, Appeals Council and judicial review). Prior determinations or decisions which had counted as income advances of food or shelter received under a bona fide loan will be reopened and revised, as appropriate.
If the FO determines that a claimant received food or shelter under a bona fide loan agreement, the FO will recompute the claimant's SSI benefits for any month(s) in the retroactive period in which the claimant was charged IKSM, calculate the amount of the underpayment, if any, make systems input and issue the appropriate notice advising the claimant regarding any change in payment and of his or her further appeal rights (Attachments 6 - 7).
If the FO determines that the food or shelter a claimant received was not received pursuant to a bona fide loan agreement, the FO will issue a notice advising the claimant of this determination and of his or her further appeal rights (Attachments 8 - 9).
B. OHA Adjudication of Medellin Claims
The following instruction applies to Medellin readjudication cases in which the claimant requests a hearing or Appeals Council review. OHA should not receive any unadjudicated Medellin claims for possible consolidation with a current claim pending in OHA because the claims generally will not have common issues. Except as otherwise noted in this instruction, hearing offices and OHA Headquarters will process Medellin cases according to all other current practices and procedures including critical case procedures (see HALLEX I-2-1-40 and I-3-1-5), coding, scheduling, developing evidence, routing, etc.
Adjudication of Medellin claims does not take priority over processing critical cases. The Medellin workload should not slow down the processing of such claims.
1. Type of Review and Period to Be Considered
The type of review to be conducted is a redetermination. For initial SSI claims and appeals of determinations on initial claims, adjudicators will apply the December 1991 policy change represented by IT-67-91 beginning with the month of the effective date of filing, even if it precedes July 12, 1990.
For post-eligibility situations, adjudicators will apply the December 1991 policy change represented by IT-67-91 retroactively to the first month covered by the determination that reduced or suspended benefits because SSA counted as income food or shelter that the claimant received under a bona fide loan agreement.
Because Medellin redeterminations are being made pursuant to a court-approved settlement, the ordinary rules of administrative finality (20 CFR §§ 416.1487ff.) do not apply. However, any reopenings and revisions made subsequently on these same cases will be subject to administrative finality, unless the subsequent reopenings are also made pursuant to the partial consent judgment.
2. Loans of IKSM
Medellin does not require any change in OHA's adjudicatory policies because, since December 17, 1991, OHA adjudicators have been excluding bona fide loans of food or shelter in computing SSI eligibility and benefit amounts. However, under the Medellin partial consent judgment, the Secretary will recognize and accept as determinative and final any prior decision of the Secretary, made at any administrative level, that there did exist a bona fide loan, and the Secretary will honor that determination without further inquiry.
3. Class Member is Deceased
If a class member is deceased, the usual survivor and substitute party provisions apply, and the existing procedures for determining distribution of any potential underpayment should be followed.
VII. Case Coding
HO personnel will code prior claims into the Hearing Office Tracking System (HOTS) and the OHA Case Control System (OHA CCS) as “reopenings.”
To identify class member cases in HOTS, HO personnel will code “ME” in the “Class Action” field. No special identification codes will be used in the OHA CCS.
HO 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 contact the Division of Litigation Analysis and Implementation at 305-0708.