There have been two recent developments in the ongoing litigation regarding the application of the Supplemental Security Income (“SSI”) program to residents of Puerto Rico. On March 1, the Supreme Court of the United States granted a Petition for Certiorari in the case of United States v. Vaello-Madero. Second, on February 24, the U.S. Department of Justice (“DOJ”) filed a Reply Brief in its appeal to the Court of Appeals for the First Circuit in the case of Peña-Martinez v. U.S. Department of Health and Human Services.
In Vaello-Madero, the U.S. District Court for Puerto Rico found, among other things, that excluding the plaintiff from the SSI program solely because he lived in Puerto Rico violated the equal protection component of the Fifth Amendment’s Due Process Clause. The U.S. government appealed to the Court of Appeals for the First Circuit, which upheld the lower court’s ruling but applying a different legal analysis. The federal government then filed a Petition for Certiorari with the Supreme Court, which as we stated above, was recently granted. The question for review before the Supreme Court is:
“Whether Congress violated the equal-protection component of the due process clause of the Fifth Amendment by establishing Supplemental Security Income — a program that provides benefits to needy aged, blind and disabled individuals — in the 50 states and the District of Columbia, and in the Northern Mariana Islands pursuant to a negotiated covenant, but not extending it to Puerto Rico.”
In Peña-Martinez, nine plaintiffs, all residents of Puerto Rico, challenged on constitutional grounds their exclusion from the SSI; the Supplemental Nutrition Assistance Program (“SNAP”); and the Medicare Part D Low-Income Subsidy program (“LIS”). Specifically, the Plaintiffs argued that their exclusion from those welfare programs solely because they live in Puerto Rico violated the equal protection component of the Fifth Amendment’s Due Process Clause. Judge Young from Massachusetts, sitting in San Juan, agreed with the plaintiffs. The U.S. federal government then filed an appeal with the Court of Appeals for the First Circuit and submitted its Opening Brief on January 5, 2021, and its Reply Brief on February 24, 2021.
The federal government’s arguments in both cases, Vaello-Madero and Peña-Martinez, are essentially the same. First, under the Territory Clause of the Constitution, U.S. Const. art. IV, § 3, cl. 2, Congress may treat Puerto Rico differently from other States so long as there is a rational basis for its actions.
Second, in the cases of Califano v. Gautier Torres (1978) and Harris v. Rosario (1980), the Supreme Court had already found three valid rationales for denying SSI benefits (in Califano) and Aid to Families with Dependent Children (“AFDC”) benefits (in Harris) to residents of Puerto Rico, based solely on the fact of their residence in Puerto Rico. These three factors are:
- Residents of Puerto Rico are generally exempt from paying the personal federal income tax;
- The cost of extending these programs to Puerto Rico would be very high; and
- Fully granting these benefits in Puerto Rico might disrupt the island’s economy.
However, the court in Vaello-Madero found that:
- The income tax rationale is inadequate because the beneficiaries of these programs are, by definition, low-income people who generally do not pay income tax no matter where they live.
- The high cost of providing these benefits to residents of Puerto Rico also failed the rational basis test because: “Facing budgetary constraints, Congress could have spread out benefit reductions equally or it could have excluded any slice of the population — so why pick residents of Puerto Rico? Wanting to cut costs cannot explain who gets cut.”
- Finally, the Vaello-Madero court analyzed the “economic disruption” argument even though the government had not raised it at the district court level. In essence, the government’s argument in Califano and Harris was that “extending these benefit programs may have an especially adverse impact on labor incentives on the island.”
- However, the First Circuit found that “the economic disruption theory cannot rationally explain the categorical exclusion of residents of Puerto Rico from these particular programs. That is so, in part, because these programs all provide uniform benefits nationwide no matter the local poverty rate or other economic variations.”
In Peña-Martinez, Judge Young used the holding in Vaello-Madero as the basis to analyze the same three arguments — which were raised yet again by the federal government to justify the disparate treatment of the residents of Puerto Rico — to determine that excluding residents of Puerto Rico from the SSI, SNAP, and LIS programs solely on their status as residents of Puerto Rico violated the equal protection component of the Fifth Amendment’s Due Process Clause.
It is disappointing, then, to read the following statement from the U.S. government’s Opening Brief in its appeal of Peña-Martinez:
In April 2020, this Court held that the exclusion of Puerto Rico resident Jose Luis Vaello-Madero from SSI benefits violated equal protection principles. United States v. Vaello-Madero, 956 F.3d 12 (1st Cir. 2020). With respect, the government continues to believe that Vaello-Madero was incorrectly decided, and the government has petitioned for certiorari to the Supreme Court with respect to that judgment. See Pet. for Certiorari, United States v. Vaello-Madero, No. 20-303 (U.S. Sept. 4, 2020). The government acknowledges, however, that—absent action from the Supreme Court or en banc review from this Court—Vaello-Madero remains binding precedent on this Court. The government nevertheless raises these arguments on appeal in order to preserve them for further review and in defense of SNAP and the Low-Income Subsidy Benefit. (p. 11-12).
Furthermore, given campaign promises made by then-candidate Biden, it is even more disheartening that the government of the United States continues to argue in its Reply Brief, filed eight days ago, that “Congress’s decision to exclude Puerto Rico residents from SSI, SNAP, and Medicare Part D Low-Income Subsidy benefits is constitutional” (p. 1), and that “the Supreme Court has held that differential treatment of residents of Puerto Rico in federal benefits programs does not violate equal-protection principles. This ends the inquiry. (p.4)”
We strongly urge the Biden-Harris administration to fulfill its campaign promise to end this shameful treatment of residents of Puerto Rico and withdraw both its Petition for Certiorari in Vaello-Madero and its appeal of Peña Martinez in the Court of Appeals for the First Circuit.
In addition, we call on Congress to end this disparate and unfair treatment of the residents of U.S. territories. Territorial-state distinctions may have made sense a century ago, but their existence today only serves to perpetuate disgraceful stereotypes and to maintain the status of territorial residents as members of a rejected caste, separate and unequal from the rest of the country.