While sure to be overshadowed by cases like Dobbs and Bruen, the Supreme Court has issued two recent decisions that could have an impact on Social Security cases: United States v. Vaello Madero and West Virginia, et al., v. Environmental Protection Agency. Our social security case attorney details further.

Vaello Madero has the more straightforward application to Social Security. In that case, a resident of New York, Jose Luis Vaello Madero, was receiving SSI payments and relocated to Puerto Rico. Congress has long excluded Puerto Rican residents from receiving SSI. Vaello Madero did not update his address, and he continued to receive SSI payments. As he approached age 62, he applied for Title II benefits (presumably early retirement), and once the Social Security Administration learned where he now lived, they shut off his SSI payments and ordered him to pay back nearly $30,000 in what they considered overpayments—money that should not have been, but was, paid to him in the past. Vaello Madero challenged this, arguing that excluding benefits to a U.S. citizen simply because he lived in Puerto Rico versus any of the fifty states or the District of Columbia violated his due process rights.

The district court agreed with Vaello Madero and entered judgment in his favor. The United States Court of Appeals for the First Circuit agreed with the district court, holding that the exclusion of SSI-eligible residents of Puerto Rico was “not rationally related to a legitimate government interest.” The Supreme Court reversed in an 8-1 opinion written by Justice Kavanaugh, who pointed to differences in how Puerto Rican residents were taxed as providing a sufficient rational basis for excluding those residents from SSI.

Justice Sotomayor’s sole dissent earned a good deal of attention. Among her arguments, she said that SSI established a direct relationship between recipients and the federal government rather than the state-by-state programs that had existed before; that SSI recipients, by definition, paid very little if anything in taxes, so a distinction between SSI-eligible Puerto Rican residents and SSI-eligible residents of other states was artificial; and that allowing the discrimination to stand could justify Congressional exclusion of citizens from safety net programs if they resided in states that did not pay income taxes.

The Majority's Outcome on This Social Security Case the top of multiple social security cards

There were also two opinions by justices concurring with the majority’s outcome. The first, by Justice Thomas, advanced an extreme originalist interpretation of the Constitution to argue that the Fifth Amendment’s equal protection component, applying to the federal government, should not be treated as the same as the equal protection component of the Fourteenth Amendment, applying to the states, despite past precedent. Justice Gorsuch wrote what I found to be the far more interesting concurrence. He said that he felt they had to make the decision they did based on current statutory and constitutional law, but he said that law was based on racist and outdated doctrines emerging from the Insular Cases in the wake of the Spanish-American War and the establishment of colonial territories of the United States. He welcomed the opportunity to overturn the Insular Cases in a case that specifically challenged their validity, concluding, “Our fellow Americans in Puerto Rico deserve no less.”

What makes Justice Gorsuch’s opinion so interesting is that it invites another opportunity to attack the discrimination in SSI payments—and the discrimination made in a variety of legal matters that separate Puerto Rican residents from residents of the states. While the law has remained the same, this concurrence suggests that there could be a change down the line if the right arguments were raised. Still, this concurrence was not joined by any other justice, so it is unclear how the others might rule in such a matter.

In contrast to the above, West Virginia v. EPA does not directly bear on Social Security but could have much larger ripple effects down the line. Chief Justice Roberts wrote the opinion for a 6-3 court, split between the conservative majority and the liberal minority.

Speak With a Social Security Attorney Today

Obama Administration Interpreting Part of the CAA

The background is a little complicated, but to try to put it simply: the Obama administration broadly interpreted part of the Clean Air Act to allow the EPA to regulate carbon emissions from coal-powered plants, encouraging a shift to cleaner energy, as part of the Clean Power Plan. Several states sought to end the new regulations, leading eventually to the Supreme Court preventing the rule from taking effect in 2016. Before the case could be heard on the merits, Trump entered office, and his administration ultimately repealed the rule in 2019. Despite the lack of regulatory action, coal power generation has continued to decline, hitting a 42-year low in the same year that the Trump administration formally repealed the Obama-era plan. Nonetheless, further litigation followed, as states supporting the original Clean Power Plan lined up on one side and states supporting the Affordable Clean Energy Rule that replaced it lined up on the other side. The Court of Appeals for the District of Columbia Circuit decided that the EPA had misconstrued the Clean Air Act in its reasoning behind the repeal of the Clean Power Plan and that the EPA’s new Affordable Clean Energy Rule was arbitrary and capricious. This decision came on January 19, 2021, the day before President Biden’s inauguration. The appeal that would ultimately be considered by the Supreme Court then followed, but a month after the Court of Appeals decision, the EPA asked the appellate court to hold off on vacating the repeal of the Clean Power Plan while the agency decided whether to create a new rule, and the court agreed to do so.

All that means that the Supreme Court was considering an administrative rule that had never gone into effect, that had been repealed by a prior administration, and that had not (yet) been adopted by the current administration. And this was happening even while coal power usage continued on a downward trend without the regulation. Understandably then, the court first addressed whether there was even an “actual controversy” to resolve. This was resolved by determining that the Court of Appeals’ judgment would have brought back the Clean Power Plan, which required regulation by the states, who were in turn the “injured” parties. Even though the EPA had held off on bringing back the Clean Power Plan when it could have done so, “voluntary cessation does not moot a case” unless it was “absolutely clear” that the government was not going to restart the rule or a similar rule once the litigation had been resolved.

Turning to the merits of the case, Justice Roberts pointed to a tradition of interpreting statutes that sought to determine whether Congress actually meant to give the power an agency later said it had. He further pointed to decisions largely from the 2000s and more recently were “extraordinary cases” provided a “reason to hesitate” before saying that Congress meant to give so much power to an agency; such cases involved an agency exerting a broad authority where there was great “economic and political significance.” Operating under this perceived “major questions” doctrine, he found “every reason to ‘hesitate before concluding that Congress’ meant to confer on EPA the authority it claims.” He said that the court could not ignore that the EPA’s Clean Power Plan and its underlying statutory interpretation “conveniently enabled it to enact a program that, long after the dangers posed by greenhouse gas emissions ‘had become well known, Congress considered and rejected multiple times.” Even though the regulations posed by the EPA “may be a sensible ‘solution to the crisis of the day,’” it was “not plausible” to the majority of the court “that Congress gave EPA the authority to adopt on its own such a regulatory scheme.”

The Clean Power Plan Scope the social security office sign in indiana

Justice Gorsuch wrote a concurring opinion that was joined by Justice Alito. They attempted to articulate a lengthier tradition to support the “major questions” doctrine defined in the majority opinion, while also expressing concern over “the explosive growth of the administrative state since 1970.” Justice Gorsuch provided several examples where he thought the “major question” doctrine should apply, including where an agency “seeks to regulate ‘a significant portion of the American economy’” or where it “requires ‘billions of dollars in spending by private persons or entities.”

Lastly, Justice Kagan wrote a dissent joined by Justices Breyer and Sotomayor, declaring that the majority “strips the [EPA] of the power Congress gave it to respond to ‘the most pressing environmental challenge of our time.’” The dissent offered a different statutory interpretation that would justify the scope of the Clean Power Plan, showing if nothing else that statutory interpretation is hardly an objective test with a single, obvious outcome in most cases. Justice Kagan even distinguished precedent cited by the majority, describing it as only normal statutory interpretation, rather than a growing development of a “major questions” doctrine. She wrote that the “eyebrow-raise is indeed a consistent presence in these cases, responding to something the Court found anomalous—looked at from Congress’s point of view—in a particular agency’s exercise of authority. In each case, the Court thought, the agency had strayed out of its lane, to an area where it had neither expertise nor experience.” In a particularly scathing passage at the end of her dissent, she said, “The current Court is textualist only when being so suited it. When that method would frustrate broader goals, special canons like the ‘major questions doctrine’ magically appear as get-out-of-text-free cards. Today, one of those broader goals makes itself clear: Prevent agencies from doing important work, even though that is what Congress directed. That anti-administrative-state stance shows up in the majority opinion, and it suffuses the concurrence.”

That all said, this case has a huge impact on future environmental policy. It obviously has an immediate effect on what the EPA can do. What does this have to do with Social Security? The Court is signaling that a conservative intellectual movement opposed to the abstract concept of an “administrative state” is gaining ground and will continue to do so with the majority-conservative justices. Delegation by Congress to administrative agencies is important and necessary in our contemporary society and economy, though. As Blake Emerson, an administrative law professor at the UCLA School of Law, said in a Marketplace interview before the decision came out, Congress does not “have the expertise to make really fine-grained decisions about what is the best way to prevent fraud in the securities market or what is the best way to reduce the impact of climate change. Those sorts of decisions are super-technical and complex, and they change a lot over time.” He guessed that agencies now “might think twice about taking really aggressive actions to enforce fair and efficient markets, to protect consumers against dangerous products, to protect the environment, in order to preserve what they can of their regulatory authority.”

The Summary Within the Social Security Administration 

The Social Security Administration is, of course, part of this idea of the “administrative state.” It is an executive agency acting with delegated authority from Congress, which was granted by statute. It has created a number of regulations, rules, policy interpretations, and internal operations manuals to guide the massive bureaucracy required to administer Social Security retirement, survivors and disability insurance benefits, and Supplemental Security Income payments. These regulations go so far as to define the types of physical, mental, and non-exertional impairments that can meet the disability program requirements without consideration of vocational factors, as well as the specific evidence needed to establish not only the impairments but the level of severity they determine is needed. It’s unlikely that the Supreme Court was thinking about the Social Security Administration when shutting down a perceived overreach by the EPA. But such a widescale program, even when operating within the expertise and experience of the agency, might run into “hesitance” from the Court in future considerations of whether to allow regulations to stay in effect where they have great “economic and political significance”—which could almost certainly be applied to an agency whose actions affect the lives of every American in some way. Given that conservative politicians and think tanks have often discussed “reforming” or, often more accurately, dismantling the Social Security system, it is not a stretch to imagine West Virginia v. EPA being used as a basis to target any number of the agency’s regulations.

It is virtually impossible to determine at this stage just how real a threat this is. And at the end of the day, core elements of the program’s structure are determined by statute, so it is not as though Social Security would just disappear. But there is certainly the possibility for chaos if any number of elements of the Code of Federal Regulations were to be attacked. Court decisions on administrative actions aren’t typically going to stay limited to the specific action involved, or even the specific agency involved. The Supreme Court’s 2020 decision in Seila Law LLC v. Consumer Financial Protection ultimately lead to the President’s ability to remove the Commissioner of Social Security at will, as a real-world example of how this plays out.

In short, West Virginia v. EPA might give anyone working for, with, or against an administrative agency some “hesitation” when considering what might come next.

Request a Free Consultation

Start a Live Chat  
Post A Comment