By Juan Carlos Benitez

On April 10, the U.S. Court of Appeals for the First Circuit had the fortitude to issue a unanimous ruling, in the case of United States vs. Jose Luis Vaello-Madero, stating that the Equal Protection section of the Fifth Amendment of the U.S. Constitution does not allow the federal government to exclude Puerto Rico residents from receiving Supplemental Security Income Disability Benefits — benefits that are granted to persons residing in the other fifty states, the District of Colombia, and the Northern Mariana Islands. The logical reasoning of this opinion set up the expectation that, in the near future, the most vulnerable residents of Guam will also be able to avail themselves of SSI while living in Guam.


The facts:

While residing in New York State, Jose Luis Vaello-Madero was afflicted by a severe health condition; the reason why he requested, qualified and began receiving SSI Benefits on June 2012.  A year later, on July 2013, Vaello-Madero moved from New York State to Puerto Rico.  While there, he continued receiving SSI benefits until June 2016, when the Social Security Administration became aware of his new residential location in Puerto Rico.  Immediately, the SSA discontinued to provide SSI Benefits to Vaello-Madero and sent him a “Notice of Plan Action,” stating that this discontinuation of benefits was going to be done retroactively to Aug. 1, 2014. 

The reasoning for this “Notice of Plan of Action” was that the SSI statutory definition of “United States” only included the fifty states, the District of Colombia and the Northern Mariana Islands.  According to the SSA, Vaello-Madero — by living in Puerto Rico had resided more than 30 continuous days outside of the “United States” and automatically resigned his SSI benefits.  A year after this “Notice of Action” and discontinuation of benefits, the SSA filed a collection action against Vaello-Madero in the U.S. District Court of Puerto Rico in order to collect $28,081.00 that the SSA believed he had improperly received wile residing outside of the United States.  Vaello-Madero’s pro bono counsel answered the complaint by raising the affirmative defense that the exclusion of Puerto Rico from the SSI program violated the Equal Protection under quarantines of the Fifth Amendment.

That says, “No Person shall be… deprived of life, liberty, or property, without due process of law….” U.S. Constitution, Amend. V.


Supplemental Security Income:

The purpose of SSI is to provide low income individuals who are older than 65, blind or disabled with additional Social Security Benefits. SSI differs from the Social Security Disability Benefits Program, in that SSI recipients do not need to meet a work credit threshold to qualify for benefits. SSI is purely a means-tested program, so if you meet the age, disability or blindness requirement and earn below the federally mandated income and asset level, you are eligible to receive its benefits. This year SSI benefits equal $525.69 a month in the CNMI and $438.05 in the States.


The court’s Legal Reasoning:

On Feb. 4, 2019, the U.S. District Court for Puerto Rico ruled in favor of Vaello-Madero’s argument and concluded that to “disparately classify United State Citizens residing in Puerto Rico” runs “counter to the very essence and fundamental guarantees of the Constitution itself.” (Vaello-Madero, 356 F. Supp. 3d at 213.) 

On April 10, the U.S. Court of Appeals for the First Circuit Decision unanimously affirmed the conclusion of the District Court, but under a different legal rational. It is this legal rational that makes the ruling so important to the residents of Guam and the other U.S. territories.

The Court of Appeals concluded that following the Insular Case Doctrine set in Califano v. Torres, 435 U.S. 1 and Harris v. Rosario, 446 U.S. 651, the court had to look at the validity of the law under a rational basis test.  However, even under a rational basis test, the exclusion of Puerto Rico from the SSI definition of United States, needed to rationally further some legitimate governmental interest to survive an Equal Protection argument and that there needed to be a close nexus between the underlying policy objectives of the statute and the execution of Puerto Rico from the definition of United States. 

The Court did not view the Insular Cases Doctrine as a carte blanche for all federal direct assistance programs to discriminate against Puerto Rico residents. The court stated in its opinion that, “There still must be a rational justification for the classification. To hold otherwise would “render the rational bases test a nullity and would ‘suspend the operation of the Equal Protection Clause in the field of social welfare law’” as it relates to all U.S. residents who dwell in Puerto Rico.”

The federal government argued that there was a rational nexus for excluding Puerto Rico.

First that under the Territorial Clause of the Constitution, Congress has the power to make all needful rules and regulations respecting the U.S. territories, including exempting the territories or limiting their benefits from federal direct assistance programs. Secondly, Puerto Rican residents do not contribute to the federal treasury, since they do not pay federal income tax and finally that the cost of including Puerto Rico would be high.



The court addressed each of these arguments and concluded that, the federal government had failed to point to, any instance where the federal government had justified the exclusion of a class of people from welfare payments because they did not pay federal income tax. Secondly, Puerto Rico residents contribute more federal taxes than NMI residents, as well as residents of six other states and all of them are included in the SSI definition of United States. Finally, that Congress cannot pursue the objective of saving money by discriminating against suspect individuals or groups.

In plain English, if the intent of Congress was to establish a national program to provide supplemental security income to individuals who attained the age of 65, or are blind or disabled,” as in 42 U.S.C. Sec. 1381, then the 5th amendment did not permit the arbitrary exclusion of individuals who would otherwise qualify for SSI, but for their residency in Puerto Rico. 

“The Categorial Exclusion of otherwise eligible Puerto Rico residents from SSI is not rationally related to a legitimate government interest,” the court said.

Why is this ruling important to Guam?

Up until the decision on Vaello-Madero, most of the recent challenges to the Insular Cases had centered around the Constitutional Right to Travel and the Constitutional Right to Vote. All of them had been unsuccessful. This ruling now opens a new front against the Insular Cases Doctrine when confronting federal direct funding programs that limit or deny equal treatment of territorial residents. Specifically in the case of SSI benefits, if we apply the Vaello-Madero rational bases test, the exclusion of Guam from the definition of United States would be an even bigger violation of the Equal Protection Clause than Puerto Rico’s since, just like Puerto Rico, Guam residents pays more federal income taxes than NMI residents and the economic impact of including Guam is substantially less than the economic impact of including Puerto Rico in the legislation. As stated before, it is not a question of if SSI benefits will become available in Guam, but of when they will become available. I do not see how residents of Guam in the next few months do not start qualifying for SSI benefits; either through a Congressional amendment to the SSI legislation adding Guam and the U.S. Virgin Island to the definition of United States, or via a federal lawsuit at the federal District Court of Guam.  mbj


— Juan Carlos Benitez is the president of the Washington Pacific Economic Development Group, headquartered in Hagatna, Guam. He can be reached at [email protected]