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April 11, 2009

Judge OKs tentative deal in Social Security suit

By Paul Elias

OAKLAND, Calif. (AP) - The Social Security Administration stopped sending Rosa Martinez her $870 monthly disability check last year because it said Miami police had issued a warrant for her arrest on drug charges.

Trouble was, the federal agency had the wrong Rosa Martinez, and she was plunged into a bureaucratic nightmare that has ensnared tens of thousands of other Social Security recipients.

The law allows officials to suspend payments to anyone fleeing prosecution. But in recent years, its interpretation was expanded to target any recipient whose name showed up in a computer database of outstanding warrants.

A lawsuit filed by Martinez in 2008 alleged the practice improperly barred payments to people who had warrants issued for failure to appear for court hearings and other minor infractions not considered flight from prosecution.

On Tuesday, U.S. District Court Judge Claudia Wilken tentatively approved a settlement requiring the government to pay more than $500 million to provide back benefits to as many as 80,000 people and restore payments to as many as 200,000.

The Social Security Administration also changed its policy so far fewer people will be barred from receiving checks. Only those with warrants specifically addressing flight or escape attempts will have their payments suspended.

U.S. Department of Justice lawyer Victoria Carradero and Social Security Adminsitration lawyer Lucille Meis declined comment outside court. A Social Security Administration spokeswoman didn't return a telephone call.

The settlement effects recipients who lost benefits after Jan. 1, 2007. In addition, people kicked out of the program between 2000 and 2006 will be allowed to apply for reinstatement.

The agency also agreed to pay four nonprofit legal groups involved in the case and the law firm Munger, Tolles & Olson a combined $483,000 in fees and expenses.

The issue stemmed from a law passed by Congress in 1996 designed to prevent fugitives fleeing prosecution from using Social Security disability benefits to help them while on the run.

In 1997, payments to about two dozen recipients were suspended, according to Gerald McIntyre an attorney with the National Senior Citizens Law Center who represents plaintiffs in the lawsuit.

In 2005, the law was expanded to include all recipients of Social Security benefits. The agency began stopping payments to anyone who had any type of felony warrant, whether or not they were attempting to flee prosecution.

Many recipients unknowingly had pending warrants, and many of the documents were decades old, McIntyre said.

"The vast majority of class members were not fleeing at all; many never knew that criminal charges were pending against them, let alone that a warrant had been issued," McIntyre said.

In several instances - such as the Martinez case - recipients with no criminal record who had the unfortunate distinction of having the same last name and date of birth as someone with an outstanding warrant were prohibited from collecting benefits.

Martinez said agency officials wrongly said she couldn't appeal the suspension of her payments - her means of support.

"They said I had to take care of the warrant and made me feel like a criminal," Martinez said.

Judge Wilken set a Sept. 10 deadline for any objections to be filed of the proposed settlement and scheduled another hearing for Sept. 24.

(Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)