RICHARDSON v. BELCHER
Legal provision: Equal Protection
Argument of Richard B. Stone
Chief Justice Warren E. Burger: We will hear arguments next in number 53, Richardson against Belcher.
Before you proceed Mr. Stone, it appears to me that we could announce for council in number 5040, the Mayer against Chicago.
It is very unlikely that the case will be reached today and if you wish to be excused until tomorrow morning at 10:00, you maybe.
Mr. Stone, you may proceed.
Mr. Richard B. Stone: Thank you, Mr. Chief Justice, and may it please the Court.
This case which is on direct appeal from the United States District Court from the Southern District of West Virginia is in a somewhat unusual posture and that a Single Judge District Court has declared unconstitutional Section 224, the Social Security Act.
In the more normal instance of course, an adjudication that a Federal Statute is unconstitutional, would originate and direct appeal would be taken from a Pre-judge Court.
This Court has held; however in a closely similar context in Flemming v. Nestor reported at 363 U.S. and in other cases as well.
That a Pre-judge Court is not mandatory under 28 U.S.C 2282, when an action based on the alleged unconstitutionality of the Federal Statute, does not seek to enjoin the operation of statutory scheme, but merely to acquire the payment of some benefit afforded by that scheme and the Court has invariably retained direct appeals in these circumstances and no question has been raised by other side as to jurisdiction, and I take it that there is none.
In this case, the provision in question, Section 224 of the Social Security Act, provides that Social Security Disability Benefits, which caused by roughly to lost earnings resulting from the claimant’s disability must be reduced according to a fairly complex formula by virtue of the recipient’s simultaneous receipt of periodic Workman’s Compensation benefits under a state of Federal Workman’s Compensation Plan, in the ordinary case, of course, it is the state plan.
The offset provision only applies for purposes relevant here.
If the total of the claimant’s Social Security Disability Benefits and his Workman’s Compensation Benefits exceed 80% of his average monthly earnings and that is gross earnings without taking into account tax computations acquired to injury.
Unknown Speaker: (Inaudible).
Mr. Richard B. Stone: Excuse me.
Unknown Speaker: (Inaudible)
Mr. Richard B. Stone: Yeah, the average monthly earning is computed on a five year period.
And, benefits are only reduced in so far as they exceed 80% of those earnings, and of course, the actual effect for anyone whose tax status put him -- causes him pay income tax, in excess of 20% of his gross salary, actually comes out even with the 80%, comes out with more and take home pay that he had acquired through his injury.
The appellee in this case Mr. Belcher became disabled in 1968 and was awarded at $330 a month in Social Security and Disability Benefits without regard to any Workman’s Compensation, and the Secretary had no notice of his receipt of Workman’s Compensation at that time and that award was made in October of 1968.
Three months later, the Department of Health, Education and Welfare, notified Mr. Belcher that his Federal benefits would be reduced by a $104 a month because of his simultaneous receipt of $203 per month in State Workman’s Compensation Benefits.
The scheme is quite simple, without the offset, Mr. Belcher would have received a total of $534 in Social Security and Workman’s Compensation Benefits which would have been a 100% of his prior gross earnings, and as a result of the offset, his benefits total to $430 or exactly 80% of his average prior earnings.
Mr. Belcher requested a hearing to challenge the reduction of his Federal benefits and the hearing was held before a Hearing Examiner at which appellee was represented by an Attorney, who I believe represents him here in this Court today.
The Hearing Examiner upheld the reduction and this ruling became in the normal course of HEW Administrator rulings, the final decision of the secretary of HEW.
I believe he then brought suit in the United States District Court under Section 405 or 42 U.S.C. 405G to reveal (somebody coughed) the Secretary’s administrative decision.
And I take it that at no point in the court below or in the administrative process has appellee denied in any aspect of the factual or legal basis which underlay the Secretary’s determination that Section 224 applied to him and precisely the manner in which HEW applied it.
Nor has appellee raised any question whatsoever as to the procedural rights, such as an evidentiary hearing which has been fully afforded to him.
His sole contention and the sole ground of decision in the District Court below was that it is unconstitutional, as a substantive matter for Congress to reduce Social Security Disability Benefits by virtue of Workman’s Compensation Benefits.
In upholding appellee’s claim, the Court below stands alone and it odds with eight other District Courts, at least eight other District Courts that have routinely ruled on this question and with their recent decision of the 6th circuit Court of Appeals, which has upheld the constitutionality of Section 224.
Now, the Court arrived at its decision that Section 224 is unconstitutional on essentially two grounds.
The first of these grounds, I believe, can be dealt with rather briefly and I think it reflects a misconception of certain decisions of this court which are to be pretty readily apparent here.
In Goldberg Versus Kelly, at 397 U.S., this Court held it when the Administrators of a State Welfare Program, in that case it was the Aid to Dependent Children program, determined that a particular recipient no longer qualifies for benefits under the statutory standards governing that program, those benefits that cannot be cut off until the recipient has been given some sort of an evidentiary hearing.
This Court reasoned in Goldberg that a welfare recipient in the ADC Program has at least, a sufficient right whether you call it a property right or whatever you call it, in those benefits, so that it violates standard notions or procedural due process to cut off those benefits summarily without any kind of a proceeding.
Justice William J. Brennan: Both have claimed the -- (Inaudible)
Mr. Richard B. Stone: No.
Justice William J. Brennan: Of course, any deficiency on the procedure process?
Mr. Richard B. Stone: No, no claim whatsoever, Mr. Justice Brennan.
It maybe said, I suppose that Goldberg, what Goldberg did was put to a final rest.
A theory that really the Government had not attempted to make in a welfare context for sometime, that those benefits are really a privilege rather that a right and if that automatically cuts off any procedural difficulty in simply taking them away.
And I think, that that document has been laid to rest and those extractions happily are not issue here.
However, this District Court through a process that is not entirely elaborated and which is somewhat mystical to me, reasons on the basis of Goldberg and Kelly that Congress cannot build into the statutory formula for computing Social Security Disability Benefits, which it analogizes to welfare benefits.
Any circumstances which would reduce the maximum allowable benefit.
Now, without going into the applicability of Goldberg and Kelly to Social Security Programs, a question which we assume be before this Court in which Certiorari was granted yesterday, I gather.
I think, it is safe to say that Goldberg and Kelly which dealt entirely with procedural rights are not in question here, but in no way implies a limitation on the legislative authority to device a reasonable substantive formula for determining the proper amount of Social Security Benefits owed to any claimant.
In other words, from Goldberg and Kelly which is applied to this case, I suppose, might preclude HEW from cutting off the claimant’s benefits without a hearing.
It is very, very long steps to the notion that that claimant has a vested interest in the maximum amount of benefit which statute ever even potentially afforded to him or the notion that Congress can attach no other qualifications to the statutory standard which governs the amount of benefits owing to the claimant.
Justice Thurgood Marshall: (Inaudible) HEW could not do anything to that?
Assuming they had a hearing, they had lawyers and they had everything else they could not do anything.
But just what they did, is they did it.
Mr. Richard B. Stone: That is right.
That is right Mr. Justice Marshall.
This is the statutory standard and it is the statutory standard which Mr. Belcher brings to question here and I wish the District Judge ruled.
As a matter of fact here it shows in the record that this hearing process was, I suppose, essentially a little useless since the ground that was being claimed was the unconstitutionally of the statute and the Hearing Examiner noted several times that you do not seem to bring in the question anything about your applicability to the statute.
Now, it is interesting to know, just put this in perspective, that when disability benefits were first introduced into the Social Security Program in 1956, recipients were required to offset the full amount of Workman’s Compensation Benefits regardless of whether the total of Disability and Workman’s Compensation exceeded any specified limit.
That provision was temporarily repealed in 1958 and then reenacted in 1965 with the current proviso that the benefits will not be reduced unless the total of the two types of programs equals 80% of prior earnings, and I --
Unknown Speaker: Mr. Stone, why do you think there was this variation in Congressional treatment?
Mr. Richard B. Stone: Their legislative history --
Unknown Speaker: We talked about --
Mr. Richard B. Stone: Yes, we talked -- .
Unknown Speaker: We talk in frequency here, behind the repeal that why was it put back?
Mr. Richard B. Stone: It was repealed in 1958, essentially because there was a testimony in legislative hearings to the effect that there really were not that many instances of duplication.
I have pointed out that the Workman’s Compensation program is very much expanded since then.
It was thought that the offset was somewhat experimental when it was passed in 1956.
In 1958, Congress was persuaded in some way that there simply were not enough instances of duplication to (Inaudible) to go through the administrative difficulty of enforcing these offset provisions.
Now, between 1958 and 1965, there were volumes, and volumes of testimony to which we refer in our brief to the effect that in fact there was a serious amount of duplication that state Workman’s Compensation Coverage had grown by leaps and bounce, and that this duplication was posing a serious problem both from the point of view of purposes of the Social Security Act which I shall discuss shortly and from --
Unknown Speaker: Was there Mr. Stone increase in state Workman’s Compensation Benefits over that period?
Mr. Richard B. Stone: An increase in the number of the amount of state coverage and as well in the amount of benefits provided.
Now, I think, it is also worth noting that, though I think it is quite clear that Congress did not have to do so.
It did, in fact, restrict the offset provision contained in Section 224, the persons whose injuries occurred after the date of statute and thus who had not come to rely upon a receipt of a certain amount of income which will then be later on lowered.
Appellee's injury occurred in 1968 and so that in order to attack the application of Section 224 to this case, he must argue as I suppose he does, and either that the original Section 224 was unconstitutional and its inclusion of an offset provision or that the temporary repeal of that provision in some way forever precluded Congress from restoring an offset or from reducing the maximum allowable benefit with respect to an individual claimant.
I think, that it is not an exaggeration and it does not need much elaboration to say that the holding of the Court below on this point, that Congress cannot in effect include an offset provision in this kind of statute or reduce benefits which are theoretically and potentially in the statute, would throw into chaos, a great number of the Social Security and Welfare Programs enforced today virtually, all of which by necessity compute their benefits in terms of offsets and reductions which are geared to the legislative view of need and which are designed to provide the most effective distribution of limited funds.
Justice Harry A. Blackmun: Well on that theory why would not Congress have an offset for any kind of private return?
Mr. Richard B. Stone: Well, that is what I am, exactly what I am getting into now, Mr. Justice Blackmun.
The second ground which the District Court relied upon in which the appellant's raise to invalidate Section 224 is based upon the claim, that Section 224 discriminates invidiously between the Workman’s Compensation, recipients of Workman’s Compensation Benefits whose Social Security Disability Benefits maybe reduced in certain circumstances and recipients of any other type of relief such as Tort recovery and private insurance policy whose Social Security Disability Benefits are not thereby reduced.
Now, with respect to this argument, which I suppose is really the key argument in the case, I would like the outset to reiterate to very well known and related equal protection concepts which have been repeatedly affirmed by this Court and which are quite clearly at -- I would even say, perhaps are classically applicable to the circumstances of this case.
One of these is the concept that legislative reform such as Congress had in mind in the offset provision Section 224, is not invidiously discriminatory merely because it is not going far enough.
In other words, even if the reasons which Congress had in mind when it formulated the offset provision such as to avoid excessive benefits and encourage the rehabilitation of workers, even if those reasons are equally applicable to recipients of other kinds of other kinds of disability recovery and I will show shortly that Congress did not believe that they were equally applicable.
Congress is failure to acquire the offset of these other benefits, it is not by itself wherein the Section 224 unconstitutional.
This Court, I suppose, the classic statement of that was Williams v. The Optical Company in which a 348 U.S. in which the Court said that the reform may take one step at a time addressing itself based the problem which seems most acute to the legislative mind.
And in this case, the legislative history which we had referred to a link in our brief shows, I think, clearly that the problem which was most acute in Congress’s mind was, in fact, the high percentage of disability recipients whose simultaneous Workman’s Compensation Benefits brought their combined receipts from those two sources, well above, their pre-injury salaries and incomes.
And I suggest it is natural enough that Congress would have focused primarily on Workman’s Compensation, since these programs have really become very, very wide spread are now in operation in all states and jurisdiction for the United States and in many States are in fact compulsory.
Justice Thurgood Marshall: The argument that, this man has casualty insurance?
Mr. Richard B. Stone: Well, that the --
Justice Thurgood Marshall: He would --
Mr. Richard B. Stone: He has casualty insurance or indeed receipts from any kind of program other than a Workman’s Compensation program.
He will get them both and I am about to explain but --
Justice Thurgood Marshall: (Inaudible)
Mr. Richard B. Stone: I am just about to read out that, Mr. Justice Marshall, I would read the bulk of the rest of my argument about that.
Just to bear remind the second, and this is perhaps the most important concept applicable in this area, all together, it is that, in a context which does not involved what this Court has called Fundamental Constitutional Rights and a context in which the classification is not a suspect in any grounds, for example, of race or religion which I clearly take it -- no one claims what this classification is.
In that context, a statutory classification is not invalid merely because it is rough or imperfect in some respect, but only if that classification cannot be rationally justified on any ground, whatsoever.
This Court has quite reasonably applied that in notion to the area of social welfare in Dandridge v. Williams decided at 397 U.S. and of course in Flemming v. Nestor at 363 U.S., in Dandridge, the Court held valid under the equal protection clause a statutory scheme which promised eligibility for assistance under the Aid to Dependent Children program on the basis of the number of dependent children but then set a maximum amount of benefit that could be recovered regardless of the number of children, and I submit that this place in which the provision, the offset provision, in question is not even applicable unless the very standard of need which Congress has defined which is 80% of prior earnings has been met, is considerably easier to decide really on both of the grounds raised by the appellees in the Court below than is Dandridge and Williams and it is far easy to decide than that in Flemming and Nestor.
I think that appellees in the court below raised a number of interesting questions with respect to what Mr. Justice Marshall has just asked, a number of interesting questions with respect to the wisdom of Congress's decision to apply Section 224 to recipients of Workman’s Compensation only.
But I think that their arguments have in no way casted out upon the constitutionality of Section 224 because the offended funded legislative history in this area shows that Congress indeed had a perfectly plausible, even if debatable rationale for singling out duplicating benefits arising from Workman’s Compensation Programs.
Justice William J. Brennan: (Inaudible) that kind of suggest and the attention to these other things (Inaudible).
Mr. Richard B. Stone: What it shows, Mr. Justice Brennan, it shows like reference to, some reference to these other problems and we have decided those in our brief.
Its primary focus was on the Workman’s Compensation problem and -- but I think it is important to note that the reasons why it especially wanted to avoid duplication in the Workman’s Compensation area are not applicable to these other areas.
So, that Congress did focus on certain specific reasons which would not have been applicable to other areas.
At every stage of the history of this provision, Congress considered volumes of testimony to the effect that if excessive duplication of benefits were allowed, many States would eliminate or seriously curtail the coverage of their Workman’s Compensation Programs, and the reason for this is that the states will inevitably want to avoid excessive duplication, and to encourage rehabilitation.
And that theory would not be true with the disable workers themselves.
It is perfectly natural that the disabled workers themselves are perfectly happy to get better benefits after their injury than before.
They are not going to have any particular interest in rehabilitation, really, only the state administering a state run program is going to be watching after that interest, so that alternative roots to Federal coverage will really only be cut off in areas which are governed by the states.
Chief Justice Warren E. Burger: Mr. Stone, if this decision withstand as it is now.
Is it conceivable that the one responsive of the States might be to just adopt this type of a statute in the Workman’s Compensation Programs and require the deduction of any amount to receive some Social Security?
Mr. Richard B. Stone: It is possible that they could do that, Mr. Chief Justice, the regulations incidentally, the HEW regulations quite fairly provide for that circumstance.
There are one or two states which already do that and in those circumstances, the benefits are not offset State Workman’s Compensation Benefits are not offset if the State itself has an offset provision geared to the Federal Program.
Otherwise, you will get involved in an endless round about arguments that will have no conclusion and I guess Congress just took it upon itself and then HEW took it upon itself to foreclose that possibility.
Chief Justice Warren E. Burger: It certainly illogical thing, if this sort of thing was very widespread to the states under the financial pressure, they would rather have deduction the other way.
Mr. Richard B. Stone: Well, that is right.
Chief Justice Warren E. Burger: (Inaudible) decided about (voice overlap).
Mr. Richard B. Stone: That is right.
I would add another rationale which we illustrated in our brief is that the Congress has really from the inception of the Social Security Program attempted not to discourage potential claimants from procuring the protection through private means such as insurance.
It appears that this consideration, the interest in maintaining other alternative methods to Federal protection has really outweighed Congress's interest with respect to private insurance Tort recovery and so on has outweighed Congress’s interest in awarding duplicating benefits.
Indeed, if you take as the overall rationale which I think comes quite naturally out of the legislative history, that everything Congress has done in this area has reflected an interest in encouraging the maintenance of non-Federal sources of this recovery with this interest in mind the decision to acquire offset in the case of Workman’s Compensation recoveries but not in other cases, it seems sensible enough even if its conclusions are arguable.
Justice Thurgood Marshall: If you straight down, the statute of Congress might very well equalize it by saying we will deduct everything?
Mr. Richard B. Stone: I am not sure whether they would say that we would deduct everything or that the offset provision would simply be eliminated and they would cover everything which will have the most unfortunate effect in many ways, or whether simply they would reduce benefits across the board in some way.
It is very speculative is to what they would do.
There are many of the other rationales in support of Section 224 and several of which are developed by the Sixth Circuit in the Lofty and Richardson case decided at 440 at the second to which I would further quote many of those are quite interesting suggestions of possible rationales I have focused here, and we have focused primarily in our brief on those rationales which were quite clearly before Congress when it considered the statute, not that it is necessary to support the statute in this area purely in the basis of actually considered rationale.
Justice Byron R. White: What was the, originally the purpose of expanding Social Security to cover the disability benefits?
Mr. Richard B. Stone: Well, I do not entirely know the answer to that Mr. Justice White, but what I have been able to gather this occurred in a time in which there was not as widespread of coverage in the Workman’s Compensation claims before, it was part of the ongoing (voice overlap).
Justice Byron R. White: And they were too low?
Mr. Richard B. Stone: Yes, and they were too low and it was part of the ongoing Federal Social Security Program to cover as many areas of hard core need as the Federal Government (voice overlap).
Justice Byron R. White: But it was shortcoming in other areas which prompted it in the first place.
Mr. Richard B. Stone: That is my understanding and those shortcomings have to some extent been alleviated in recent years though I suppose that it is not the point where Federal coverage is no longer necessary, at least Congress is not (voice overlap).
Justice Byron R. White: In any event under the present law of Social Security will bring them up to some proper percentage of their --
Mr. Richard B. Stone: Of their prior earnings and in fact it is pretty close to their entire take home 80% of gross.
In conclusion, I believe that we have established that the only real questions raised by appellees and by the court below are not as to whether Section 224 is constitutional but simply is to whether it is the wisest scheme which Congress could have adopted.
If that is debatable, I think it is quite wise scheme in fact.
In any event that issue is not to before this court and for that reason, I believe that the judgment below should be reversed.
Chief Justice Warren E. Burger: Mr. Harris.
Argument of John Charles Harris
Mr. John Charles Harris: Mr. Chief Justice and may I please the Court, the District Court interpreting Goldberg versus Kelly has determined the welfare was a property right, and therefore protected by Due Property Clause, however to distinguish between welfare and Social Security was illogical, and grossly inequitable, and further they held that Section 224, of the Social Security Act arbitrarily discriminated between the disabled worker and other disabled persons.
Therefore violating the Due Process Clause of the Fifth and the Fourteenth Amendment.
In addition to this, the District Court also stated that the Workman’s Compensation Law and the State of West Virginia is very unique in so far as this is a voluntary law where the employer and the employee voluntarily go into this particular act and go into the act, and therefore as such, the Highest Court in the State of West Virginia has held that this is an integral part of the contract between the employer and employee and the act of receiving benefits or not receiving benefits under the Social Security Act and in this particular case, Mr. Belcher his payments were reduced in violation of his contract with his employer as covered under the Compensation Act of the State of West Virginia.
Unknown Speaker: Does the worker have the option anytime when he decided to sue or do you get the Worker’s Compensation?
Mr. John Charles Harris: Now, once the election is made, he looses his right to sue.
He looses his (voice overlap).
Unknown Speaker: When does he elect, when he goes to work?
Mr. John Charles Harris: When he goes -- actually, in most cases -- here in this particular case there was a union election.
But otherwise, I presumed the burden is on the employer to accept the Workman’s Compensation Law and then posting a notice to the employees and that I am under the law, and therefore if you work for me you are waiving your common law right.
Justice Byron R. White: The compensation payments are from a private insurance or from a State fund?
Mr. John Charles Harris: It is a State fund.
But the contributions come from the employers.
It is not public funds.
It is the administered as a trust fund with the money coming from the employers.
Justice Byron R. White: So, you are saying I take for granted that there are no state cost in this situation.
Mr. John Charles Harris: No State cost.
Justice Byron R. White: Except as it might come in directly by need of additional welfare payments or something but no direct State cost.
Mr. John Charles Harris: No, it is a fund administered by the funds that are received from the employer and each employer pays a premium if you want to call it that,on the payroll that he pays to his employees.
Very similar to the other states that they have an insurance policy, their rate is applied to the amount of payroll and they pay the -- and that's the basis of their insurance, payment to the insurance company.
Chief Justice Warren E. Burger: Mr. Harris, since the employee from what you have just said, apparently makes no contribution, pays nothing does that distinguish it from private insurance for which the employee would have to do with paying out his own funds?
Mr. John Charles Harris: Yes, it does.
It does differentiate between a private insurance for which he would pay the premium.
But it does not differentiate from other States where the employer pays the premium on the Workman’s Compensation insurance.
In other states in -- there are only six States that have state funds.
The other 44 states do have insurance.
For insurance, the employer buys insurance, pays forth fully and this covers the employee in the event of industrial accident.
The Appellant contends that the Goldberg which is the basis of the decision in a District Court strictly applied to a procedure requirement and further it contended the discrimination was justified -- justifying the discrimination against disabled workers as compared to other disabled people.
So this was justified, so otherwise it would not weaken Workman’s Compensation Laws.
And quite to contrary it is true, as pointed out by Mr. Chief Justice here, that the states are and will in the future reduce their Workman’s Compensation Benefits and therefore weaken the law to enable less money from them and more money from the Federal Government in the form of the Social Security Laws.
Unknown Speaker: Tell me, why would the States do that?
If it does not cost the State anything?
Mr. John Charles Harris: I would say that the State is subject to the same pressures from employers, from the organizations, I am noticing in the brief here, most of the opposition to the repeal of this Section 224 came from the National Association of Manufacturers.
It came from that the Chamber of Commerce and I think, the same thing could apply in a particular State where a National Association Manufacturer’s, Chambers of Commerce other employers could pressure the legislators to reduce the amount of payment for disability on the Social Security and in fact save them the expense.
Since the rates are based on experience and the more injuries, the more loses, the more the employer will pay for his contribution to the Social Security or to Workman’s Compensation.
Now, Flemming versus Nestor which was decided in 1960 upheld the refusal of Social Security Benefits to a deportee and then went on to say that this is not to say, however, the Congress may exercise it's power to modify the statutory scheme, free of all Constitutional restrain.
The interest of a covered employee under the Act is a sufficient substance to fall within protection from arbitrary, Government action afforded by Due Process Clause.
Of course mentioning this particular case of Nestor, I said such is not the case here, the fact that the beneficiary is resident abroad, in a case of the deportee, a presumably permanent residence can be of obvious relevance to the question of eligibility.
And this was a decision in Nestor.
Nestor said held that Congress could not arbitrarily change the scheme of Social Security.
In a same particular -- .
Unknown Speaker: (Inaudible) if he moves abroad.
Mr. John Charles Harris: If he moves abroad. But the this -- .
Unknown Speaker: (Inaudible)that part, is this correct and confirmed?
Mr. John Charles Harris: This is a question of eligibility as to when he was eligible.
This particular -- the--
Unknown Speaker: (Inaudible).
Mr. John Charles Harris: I believe the Court based the decision on what it means eligible.
Unknown Speaker: (Inaudible) simply robs off his benefits.
What we have involved here a reduction?
Mr. John Charles Harris: This is true, he did lose his benefits but the Court didn't rule he was ineligible in this particular case the man is eligible.
In 1965, when he has under the act, they did reduce his benefits.
But in this particular -- in the same decision, they quoted Senator George when this original Social Security Act was put into being and he says it comports better than any substitute we have discovered with the American concept that free men want to earn their security and not ask for dollars.
That is what as a matter of right, of earned right is far better than the gratuity.
Social Security is not a hand out, it is not a charity, it is not really -- it is an earned right based on the contributions and earnings of the individual.
As an earned right, the individual is eligible to receive his benefit, and dignity and self respect.
Now, although Goldberg versus Kelly spelled procedure requirements, the decision lasted on Due Process Clause of the Constitution and in doing so made welfare a property right that could not be deprived without Due Process of Law.
Now, in this particular case, the argument from the Appellant is that we must go back and get our Due Process of Law.
Unknown Speaker: (Inaudible).
Mr. John Charles Harris: Well, as the Constitution would say a property right, in the case of Flemming, it was liberty without Due Process of Law and Flemming went to the United States or to the Supreme Court of Virginia, and when they came here, they were not looking for more procedure, they are looking for a wedding license.
In this Court, they (voice overlap) wedding license.
Justice Thurgood Marshall: What do you want here?
Mr. John Charles Harris: We are looking--
Justice Thurgood Marshall: Do you want to hear it?
Do you want to hear in to your party?
Mr. John Charles Harris: No, we are not looking for a procedure.
I believe, procedure is gone, we are attacking or we are asking for an affirmation of the opinion of the District Court which says that this particular Section 224 of the Social Security Act is unconstitutional.
Justice Thurgood Marshall: So do you deny a Due Process?
Mr. John Charles Harris: Not on the basis of Due Process.
On a basis that this was a property right protected by the constitution.
Justice Thurgood Marshall: Was the Goldberg due process?
Mr. John Charles Harris: Goldberg was due process, but I was pointing (voice overlap).
Justice Thurgood Marshall: Now the only point is, are you arguing due process, that is all I am asking.
Mr. John Charles Harris: Well, I mean both.
Justice Thurgood Marshall: But what is the Due Process for?
Mr. John Charles Harris: A Due Process is that sometimes procedure would not give you your answer.
You can be deprived, you can carry all the procedure you want.
Justice Thurgood Marshall: Well, exactly, what were you deprived down here?
Mr. John Charles Harris: You mean, as far as you --
Justice Thurgood Marshall: (voice overlap) that Due Process.
Mr. John Charles Harris: I believe as a point in Flemming case, that they had exercised, they have all the Due Process they could get.
All we have to do is Court, but still they did not get what they wanted.
Justice Thurgood Marshall: (voice overlap) for a marriage license here, are you?
Mr. John Charles Harris: No, I am not looking for marriage license but I am saying that a Due Process is not necessarily a procedure or a hearing.
We are looking for protection of rights.
If we go back to the District Court for a hearing on this, as to whether he should loose his property right, we then determine whether he would be properly rehabilitated if he does not get the full amount of his workman’s compensation.
Or, whether we can assist him of a Workman’s Compensation.
These are the factors of the Government relies on as the purpose for the 224 of the Act.
That it would -- if this is not in there or weaken the Workman’s Compensation system and it will not unable the worker that say we will work to be rehabilitated.
So, we are looking for due process but we -- a procedure will not benefit us.
We want to protect the rights that are protected under Due Process and a Due Process is the act of Congress, the Congress is taking away from this man, something which he has earned.
And, if were a hearing will not give to do us any good, what we need is an overturn of the statute that takes his property away from him.
Unknown Speaker: What the Social Security have to go based on some estimate or prediction about how the right to the taxes ought to be to maintain a solvent fund and based on how long people normally stay out of work for certain kinds of injuries?
Mr. John Charles Harris: Well, it is very definite.
Unknown Speaker: (Inaudible) Actuarial consideration.
Mr. John Charles Harris: Actuarial it's very, very definitely an actual situation.
Unknown Speaker: But if the prediction is distorted by people staying way from work longer than they normally would because of payments from other sources as if there are some -- is it that not a consideration?
Mr. John Charles Harris: It is a consideration.
Whether it is sufficient consideration is another thing -- there is some other things that could be considered.
Chief Justice Warren E. Burger: But has not this Court says, it does not have to be a perfect classification if it is a rational consultation.
Mr. John Charles Harris: But, is it not discriminatory, if they pick on one smaller section, does not the Trial Court mentioned the Fourteenth Amendment, that people will have protection of the law?
Chief Justice Warren E. Burger: If I understand you virtually to conceive that if deduction were made for every type of benefit privately secured as well as this, you would not have no complain?
Mr. John Charles Harris: I would agree, I believe we can take the point.
Chief Justice Warren E. Burger: The private client they do not pay for this.
Mr. John Charles Harris: They do, the -- if a man is injured and he is eligible for the disability provision for Social Security.
Chief Justice Warren E. Burger: I am speaking of the Workman’s Compensation if he does not pay for the -- the employee if he does not pay for that insurance coverage.
Mr. John Charles Harris: There are other benefits which this man can receive that he does not pay for it, but his Social Security is not reduced.
For instance, the eight payments, if he receives any pension from the Veterans Administration, if he receives a Court settlement.
In some cases, they talked about, maybe, it would suffer from the lingering if he did not receive sufficient amount of money, but if he receives a Court settlement and if he is totally disabled and he receives a court settlement, he could receive up to a half million dollars and still collect that his Disability Provisions of Social Security.
He can get welfare, and these is often the case, that he gets welfare including the dependent children, which he does not pay anything for.
But his Social Security is not reduced.
Now, there is one thing that is very interesting here, Mr. West, my associate gave me a letter.
This was sent to him by -- Department of Health, Education and Welfare and it reads, give Mr. West, according to our records--
Unknown Speaker: Is that in the record?
Mr. John Charles Harris: No, it is not.
This is just--
Chief Justice Warren E. Burger: Then I think we (voice overlap)
Mr. John Charles Harris: I just, it's just an idea of fairness.
I am not--
Chief Justice Warren E. Burger: Well, if it is not in the record (voice overlap) here.
Mr. John Charles Harris: All right, well, anyway, what it says -- I mean, what we are doing in this particular case is saying that the benefits are reduced because of the Workman’s Compensation were the payment to the wife is $70 a month, and to the children $5.10 a month.
The man’s Workman’s Compensation benefits were $25.00 a month or $25.00 a week and he is on welfare, he cannot live otherwise.
In the case of fruit stands, if he gets fruit stands, his benefits are not reduced, he pays nothing for this.
In this particular case, Mr. Belcher was a member of the retirement plan for the United Mine Workers, and at age 55 he is only 53.
At age 55, he could collect the pension, but still his benefits with his Social Security will not be reduced.
If he has investment income, he owns property, and from his property, he is getting rental income, now, this in some way, you might say this will cost him money, but his benefits from social security were not reduced for that, if the relatives give him gifts, if he is supported by others, this does not cost him anything and he gets that.
He gets the no reduction in his Social Security.
If he -- in addition under the Act, he can go to work in a trial basis for up to nine months.
Earn as much as he pleases and the money he makes during those nine months does not reduce his Social Security Disability.
Also, in addition, unless his income is some substantial gainful employment and it usually fixes at $50.00 a month.
During a time he is getting his disability then his payments are not reduced for that income that is not substantial gain from employment.
Now, what I have not mentioned here is a private insurance, if he buys private insurance, private accident health insurance, this is not reduced for that.
Also, in addition, there is one other thing, if he has life insurance and a waiver of premium on it when he is disabled, he pays no more premium which should not effect his dividend to him from the company, the company pays his premium as well.
So this --
Justice Byron R. White: Let me give, let me get one thing straight if the State does not have a State fund, but the employers buy their Workman’s Compensation Insurance from private company and the man is injured and he is collecting Workman’s Compensation under one of those privately insured plan for his employee.
Mr. John Charles Harris: Right.
Justice Byron R. White: Is his Social Security reduced?
Mr. John Charles Harris: His Social Security will be reduced.
Now, the one thing that is misleading--
Justice Byron R. White: What if he had (Inaudible).
Mr. John Charles Harris: No, it would not.
I mean, these other things that I mention here.
Justice Byron R. White: (Inaudible)
Mr. John Charles Harris: Only Workman’s Compensation.
Now, there is one thing that is misleading, the formula is very involved as to determine just how much the reduction would amount to, but the law says and basically, it would be reduced to 80% of his earnings but not less than zero.
Now, in some cases, it does get down to zero, it gets down close to zero.
In the case here, this person is getting -- it is reduced down to a $1.70 and for the wife and $5.10 for the children.
So, it can be reduced down much lower than the 80%.
Justice Byron R. White: (Inaudible) was in original?
Mr. John Charles Harris: Now, the original eliminate the entire -- but again, so this was repealed.
Alright, one thing one further thing on this is that there is some conversation for some reason given here as that maybe rehabilitation is the reason for this.
That you want to discourage people from malingering or you want them to rehabilitate and become productive again.
This is only paid for disability.
It is not paid for anyone who for his total disability.
Anyone who is not totally disabled does not get any benefits under this particular section of the Act.
Now, to establish whether you are disabled, it requires that you must be -- there must be a medical determinable, physical and mental impairment that can result in death or which has last it or can be expected to last it for a continuous period of not less than 12 months.
So, we are not talking about someone malingering.
Now again to the Act, the Act is going to -- is administered to the extent that any event that this man is malingering, they can -- and imagine under Goldberg and due process of law, give him a hearing, but they can remove his benefits from it, if he is well.
Again, it would be a medical determination, so as far as Workman’s Compensation, it could be malingering because it is not -- it is a temporary basis.
In this particular case under Social Security, it must be a serious injury, or--
Unknown Speaker: Now the Workman’s Compensation (Inaudible)
Mr. John Charles Harris: Yes, it could go on for more than that.
It depends often you get a permanent award.
If a man looses a leg can get, during the time that -- until such time he gets his award, he gets weekly payments and after that, he gets an award of maybe 200 weeks for the lost of a leg.
Unknown Speaker: (Inaudible)
Mr. John Charles Harris: For life, it could go on for life.
The Workman’s Compensation is paid forward by the employer and it is really a purchase of insurance, and if you want to consider it is part of the cost of labor in West Virginia, the Court -- the highest Court of the land ruled that it is a contract, further contract between the employer and the employee.
Therefore, it is part -- in West Virginia, it is part of the income or salary of the employees, so in fact he does paid for it.
He pays for the cost of labor he does pay for his Workman’s Compensation.
Even though the money never passes through him but passes strictly through the funds from the employer.
And again, as far as the -- going back to the Nestor case, we are saying that Congress can not be arbitrary.
If Congress had a specific purpose that was impartially applied to all people who would be disabled, then it would be perfectly -- I would be perfectly agreeable that this is a good law.
But arbitrarily, they are picking on the individual who is working and disable as suppose to the individual who is not working and disabled.
Now I have my own opinion as to where this particular exclusion came into the -- how this particular exclusion came into the Act.
And I think probably in 1956, that someone was delegated with the job of coming up with an Accident or Disability Provision for the compensation for the Social Security Act.
And looking to see where they would find what would be the proper terms to put in there, they picked up Accident and Health Insurance.
I mean in every Accident and Health Policy, there is an exclusion for Workman’s Compensation.
Justice Thurgood Marshall: But Mr. Harris, why did you not get to the legislative history instead of your views of what might have happened?
Mr. John Charles Harris: Well, I do not -- I would -- now I have the legislative history.
The Act was passed in 1956, or this is amendment for the Act.
The only thing I can determine is why would they exclude only Workman’s Compensation?
Chief Justice Warren E. Burger: I think, you have been over that pretty well now Counsel and if you have any more, I would suggest you draw your argument to conclude.
Mr. John Charles Harris: Okay.
Well, there is no plausible rationale for the discrimination between this worker who is injured as a result of unemployment and others who maybe injured otherwise, and therefore can not or not excluded or not reduced or offset by the Workman’s Compensation benefit payments.
Chief Justice Warren E. Burger: Thank you Mr. Harris.
Do you have anything Mr. Stone?
Rebuttal of Richard B. Stone
Mr. Richard B. Stone: Mr. Chief Justice, I have nothing further.
Chief Justice Warren E. Burger: No questions apparently.
Thank you gentleman.
The case is submitted.