Curtis Secures Historic Victory in Puerto Rico Equal Protection Case

The United States District Court for the District of Puerto Rico has issued a decision in favor of Curtis client and Puerto Rico resident, Jose Luis Vaello Madero, in a case with historic significance for the constitutional rights of Puerto Rico residents.

Acting on a pro bono basis, Mr. Vaello Madero’s defense team was led by litigation and arbitration group partner Hermann Ferré and associates Juan Perla, Robert Groot and Joshua Hershman. Mr. Ferré describes the ruling as “a major breakthrough in the federal courts’ approach to Puerto Rico,” and added, “we are pleased with the outcome we achieved for our client, and we hope that this decision is a step towards achieving truly equal treatment for Puerto Rico residents.”

The case arose from an overpayment claim brought by the United States against Mr. Vaello Madero, alleging that he was required to return payments he had received through the Supplemental Security Income (SSI) disability benefits program after he moved from New York State to Puerto Rico, a territory of the United States that has been excluded from the SSI program under the Social Security Act.

The Curtis defense team successfully invoked the equal protection component of the Fifth Amendment to the United States Constitution to attack the Social Security Act’s exclusion of Puerto Rico from the SSI program, a statutory provision that has survived prior constitutional challenges based on a series of racially-motivated Supreme Court decisions from the early 1900s known as the “Insular Cases.”

Judge Gustavo Gelpí agreed that Puerto Ricans – who are U.S. citizens by birthright – cannot be subjected to disparate treatment outside the ordinary bounds of the Fifth Amendment simply because they reside in a territory, rather than one of the constituent States. That decision is a significant step towards granting Puerto Rico residents the same constitutional protections that are enjoyed by persons residing elsewhere in the United States.

Case Summary: What was at stake?

In August 2017, the United States filed suit against Mr. Vaello Madero, seeking to recover more than $28,000 in SSI benefits he had received while residing in Puerto Rico. Previously, Mr. Vaello Madero was living in New York when he began receiving SSI disability benefits on the basis of severe health problems that left him unable to support himself. He moved to Puerto Rico in 2013 to better care for his ailing wife. He was not aware that his move made him ineligible to continue receiving SSI benefits, and he did not notify the Social Security Administration of his move.

Upon applying for retirement benefits in 2016, Mr. Vaello Madero informed the Social Security Administration of his new address in Puerto Rico. The Social Security Administration then terminated his SSI disability benefits on the grounds that Puerto Rico residents are statutorily excluded from participating in the SSI program. About a year later, the Government brought a civil action to collect the alleged overpayments, arguing that, by moving to Puerto Rico, Mr. Vaello Madero became ineligible to receive any further SSI payments and therefore was required to return the funds paid to him between 2013 and 2016. The basis for this argument was that Congress may exclude otherwise-eligible applicants residing in Puerto Rico, such as Mr. Vaello Madero, from the SSI program because Puerto Rico is a territory of the United States rather than a constituent State.

The Curtis defense team took on the case pro bono and argued that the exclusion of Puerto Rico from the SSI program violates the right of Puerto Rico residents to equal protection under the Fifth Amendment to the United States Constitution because it impermissibly discriminates against a historically disadvantaged and politically powerless “discrete and insular minority.”

Judge Gelpí, ruling in favor of Mr. Vaello Madero, found that Congress “cannot demean and brand said United States citizen while in Puerto Rico with a stigma of inferior citizenship to that of his brethren nationwide.”

The case is United States v. Vaello Madero, 17-cv-02133 (GAG).