Opinion
Civil No. 20-1444 (FAB)
2023-01-12
Emanuel RIVERA-FUENTES, et al., Plaintiffs, v. Kilolo KIJAKAZI, Acting Commissioner of the Social Security Administration, et al., Defendants.
Isabel Abislaiman-Quilez, San Juan, PR, for Plaintiffs. Daniel C. Luecke, Daniel Riess, United States Department of Justice, Civil Division, Torts Branch, Constitutional & Specialized Torts Section, Washington, DC, Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendants Andrew Saul, Nancy A. Berryhill. Daniel Riess, U.S. Department of Justice, Civil Division, Washington, DC, Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendant United States Social Security Administration. Daniel Riess, U.S. Department of Justice, Civil Division, Washington, DC, for Defendant John Doe.
Isabel Abislaiman-Quilez, San Juan, PR, for Plaintiffs. Daniel C. Luecke, Daniel Riess, United States Department of Justice, Civil Division, Torts Branch, Constitutional & Specialized Torts Section, Washington, DC, Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendants Andrew Saul, Nancy A. Berryhill. Daniel Riess, U.S. Department of Justice, Civil Division, Washington, DC, Enrique Silva-Aviles, United States Attorneys Office District of Puerto Rico, San Juan, PR, for Defendant United States Social Security Administration. Daniel Riess, U.S. Department of Justice, Civil Division, Washington, DC, for Defendant John Doe.
OPINION AND ORDER
BESOSA, District Judge.
Before the Court is plaintiff Emanuel Rivera-Fuentes ("Rivera-Fuentes")'s motion for leave to file a second amended complaint. (Docket No. 34.) Defendants Kilolo Kijakazi (the acting Commissioner of the Social Security Administration), the United States Social Security Administration, Andrew Saul, and Nancy Berryhill (collectively, "defendants"), oppose Rivera-Fuentes' motion, arguing that the proposed complaint fails to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)"). See Docket No. 36. For the reasons set forth below, Rivera-Fuentes' motion to file a second amended complaint is DENIED.
I. Background
The proposed second amended complaint invokes United States v. Vaello-Madero, 956 F.3d 12 (1st Cir. 2020). The Supreme Court recently overturned this case, however, placing the viability of this action jeopardy. See United States v. Vaello Madero, 596 U.S. 159, 142 S. Ct. 1539, 212 L.Ed.2d 496 (2022).
Rivera-Fuentes is a United States citizen, living in Puerto Rico. See Docket No. 1, at pp. 4-5. He suffers from several physical and mental health conditions. Id. Rivera-Fuentes' father, Abraham Rivera-Berríos ("Rivera-Berríos"), serves as his caretaker. Id. at pp. 11, 13.
On May 6, 2019, Rivera-Berríos requested Supplemental Security Income for Aged, Blind, and Disabled ("Supplemental Security Income benefits") from the Social Security Administration ("SSA") on behalf of Rivera-Fuentes pursuant to 42 U.S.C. § 1382 ("section 1382"). Id. at p. 11. The SSA denied his request, stating that this statute does not apply to Puerto Rico residents.
This and several other attempts to acquire Supplemental Security Income benefits prompted Rivera-Fuentes to file a class action on behalf of himself and several others similarly situated (hereinafter, "plaintiffs"), against the Social Security Administration and several others, in their official and individual capacities on August 26, 2020. See Docket No. 1; citing United States v. Vaello-Madero, 956 F.3d 12 (1st Cir. 2020). The plaintiffs argue that section 1382 violates the Fifth Amendment of the United States constitution by excluding Puerto Rico from its definition of "United States." See Docket No. 1.
The other plaintiffs in the class action suit are as follows: Gladys Fuentes-Lozada, Rose Katherine Ruiz-Minguela, Alexander Jodinskas-Miguela [sic], Irimary Domenech-Piñeiro, Noriana Morales-Rodríguez, Maritza Frasqueri-Berríos, Ángel Chinea-Rivera, Wilfredo Rodríguez-Rodríguez, Celia Enid Laureano-Salgado, Juan Rivera-Rodríguez, Maira Ivette Colón-Ortiz, and all others similarly situated. All of these plaintiffs have been denied Supplemental Security Income benefits because they reside in Puerto Rico. See generally Docket Nos. 30 and 34, Ex. 1.
The First Circuit Court of Appeals affirmed the District Court's decision, holding that "[when] establishing a rational basis for the exclusion of Puerto Rico residents from SSI coverage, such exclusion of Puerto Rico is declared invalid." Vaello-Madero, 956 F.3d at 32.
A. Procedural Background
On November 20, 2020, the defendants filed a motion to stay this proceeding pending the Supreme Court's ruling in United States v. Vaello Madero, 596 U.S. 159, 142 S. Ct. 1539, 212 L.Ed.2d 496 (2022). See Docket No. 22. The Court granted this motion on November 23, 2020. See Docket No. 23. More than a year later, on March 17, 2022, the plaintiffs filed an amended complaint. See Docket No. 30. A month later, the Supreme Court reversed the First Circuit Court of Appeals' decision. See Vaello Madero, 142 S. Ct. 1539. On May 13, 2022, the plaintiffs filed a motion for leave to file a second amended complaint. See Docket No. 34. The proposed second amended complaint sets forth the same arguments as the first amended complaint, with the exception of an additional claim alleging that section 1382 and defendants' actions violate the Privileges and Immunities Clause of the United States Constitution ("Privileges and Immunities Clause"). Id.
The plaintiffs also seek reversal of the Insular cases. See Balzac v. Porto Rico, 258 U.S. 298, 42 S.Ct. 343, 66 L.Ed. 627 (1922); Downes v. Bidwell, 182 U.S. 244, 21 S.Ct. 770, 45 L.Ed. 1088 (1901); De Lima v. Bidwell, 182 U.S. 1, 21 S.Ct. 743, 45 L.Ed. 1041 (1901). Because this claim is only made to "reserve the argument at this time," (Docket No. 34 at 4, n. 3), the Court need not and will not address this issue.
The defendants filed an opposition on May 27, 2022, asserting that the Supreme Court's ruling in Vaello Madero foreclosed the plaintiffs' causes of action. See Docket No. 36, at p. 4. On May 31, 2022, the plaintiffs responded to the defendants' opposition, alleging that their claims are viable because, among other reasons, they are grounded on different statutes than those addressed in Vaello Madero. See Docket No. 43, at p. 1.
The defendants also claim that this action is premature, citing the stay of litigation. Id. at 4. Because this stay was lifted on May 31, 2022, however, the defendants' argument is moot.
II. Applicable Legal Standards
A. Futility Review
Pursuant to Federal Rule of Civil Procedure 15(a)(2) ("Rule 15(a)(2)"), a court "should freely give leave" to amend a complaint "when justice so requires." Fed. R.Civ.P. 15(a)(2). "This does not mean [. . .] that a trial court must mindlessly grant every request for leave to amend." Calderón-Sierra v. Wilmington Trust Co., 715 F.3d 14, 19 (1st Cir. 2013) (citing Aponte-Torres v. Univ. of Puerto Rico, 445 F.3d 50, 58 (1st Cir. 2006)). For example, "[a] district court may deny leave to amend when the request is characterized by 'undue delay, bad faith, futility, [or] the absence of due diligence on the movant's part'." Id. (emphasis added) (citing Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006)); see Aponte-Torres, 445 F.3d at 58 ("When a proffered amendment comes too late, would be an exercise in futility, or otherwise would serve no useful purpose, the district court need not allow it.") (citation omitted); Nikitine v. Wilmington Tr. Co., 715 F.3d 388, 390 (1st Cir. 2013) ("[A] district court may deny leave to amend when the request is characterized by 'undue delay, bad faith, futility, [or] the absence of due diligence on the movant's part.") (citation omitted).
The defendants allege that the amendments in the proposed second amended complaint are futile because they fail to state claims upon which relief could be granted. See Docket No. 36. The First Circuit Court of Appeals has stated that " '[f]utility' means that the complaint, as amended, would fail to state a claim upon which relief could be granted." Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996) (citing 3 Moore's Federal Practice ¶ 15.08[4], at 15-80 (2d ed. 1993)) (additional citation omitted). When reviewing a motion to amend a complaint for futility, the district court applies the Rule 12(b)(6) standard of review. Id. Accordingly, "there is no practical difference, in terms of review, between a denial of a motion to amend based on futility and the grant of a motion to dismiss for failure to state a claim." Id.
Although the review process for futility mirrors that of the review process of a motion to dismiss, "the appropriateness vel non of a district court decision denying a motion to amend on the ground of futility depends, in the first instance, on the posture of the case." Hatch v. Dep't. for Children, Youth & Their Families, 274 F.3d 12, 19 (1st Cir. 2001). The First Circuit Court of Appeals explains:
If leave to amend is sought before discovery is complete and neither party has moved for summary judgment, the accuracy of the "futility" label is gauged by reference to the liberal criteria of Federal Rule of Civil Procedure 12(b)(6). In this situation, amendment is not deemed futile as long as the proposed amended complaint sets forth a general scenario which, if proven, would entitle the Plaintiffs to relief against the defendant on some cognizable theory. If, however, leave to amend is not sought until after discovery has closed and a summary judgment motion has been docketed, the proposed amendment must not only be theoretically viable, but also solidly grounded in the record. In that type of situation, an amendment is properly classified as futile unless the allegations of the proposed amended complaint are supported by substantial evidence.Id. (citations omitted).
The more liberal standard of review applies to the posture of this case. Here, the plaintiffs moved to amend their complaint on May 13, 2022, and no motion for summary judgment has been filed by any party. In fact, this action has not progressed beyond the pleading phase. Therefore, the motion to amend is timely, and the Rule 12(b)(6) standard of review is applicable.
B. Motion to Dismiss Standard
Pursuant to Rule 12(b)(6), a complaint should be dismissed where a plaintiff does not "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is plausible on its face if it "raises a right to relief above the speculative level," Bell Atl. Corp, 550 U.S. at 570, 127 S.Ct. 1955, by pleading enough "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged," Ashcroft, 129 S.Ct. at 1949. The court will accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in plaintiffs' favor. Id.; see also Correa-Martínez v. Arrillaga-Beléndez, 903 F.2d 49, 51 (1st Cir. 1990), but it will not "accept as true a legal conclusion couched as factual allegation," Bell Atl. Corp., 550 U.S. at 570, 127 S.Ct. 1955 (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)).
III. Discussion
Plaintiffs contend that Vaello Madero does not make their claim futile because, although both cases invoke the Fifth Amendment of the United States Constitution, the plaintiffs' proposed second amended complaint also raises a Privileges and Immunities claim. The Supreme Court analyzed Vaello Madero, however, pursuant to the Territorial Clause of the United States Constitution. The defendants, therefore, argue that "the various miscellaneous paragraphs that [the plaintiffs seek] to insert [in their proposed amended complaint] do not state a claim upon which relief can be granted." See Docket No. 36, at p. 4. The Court agrees with the defendants.
Much like the plaintiffs' claims in this case, the Supreme Court in Vaello Madero addressed "whether the equal-protection component of the Fifth Amendment's Due Process Clause requires Congress to make Supplemental Security Income benefits available to residents of Puerto Rico to the same extent that Congress makes those benefits available to residents of the States." Id. at 1541. The Supreme Court held that "Congress may distinguish the Territories from the States in tax and benefits programs such as Supplemental Security Income, so long as Congress has a rational basis for doing so." Id. at 1542-43. Puerto Rico's tax status supplies a rational basis for distinguishing residents of Puerto Rico from residents of the States for purposes of the Supplemental Security Income benefits programs. Pursuant to the rational basis standard of review, "[i]n devising tax and benefits programs, it is reasonable for Congress to take account of the general balance of benefits to and burdens on the residents of Puerto Rico." Id. at 1543.
In its analysis, the Supreme Court cites Califano v. Gautier Torres, 435 U.S. 1, 98 S.Ct. 906, 55 L.Ed.2d 65 (1978) (holding that denial of Supplemental Security Income benefits to people during the time they reside in Puerto Rico does not violate their constitutional right to interstate travel) and Harris v. Rosario, 446 U.S. 651, 100 S.Ct. 1929, 64 L.Ed.2d 587 (1980) (holding that denial of Aid to Families with Dependent Children program (AFDC) benefits to Puerto Rico residents does not violate the Fifth Amendment of the United States Constitution).
Puerto Rico residents are "typically exempt from most federal income, gift, estate, and excise taxes." Vaello Madero 142 S.Ct. at 1542. Although, they do "pay Social Security, Medicare, and unemployment taxes." Id.
The plaintiffs contend that the Supreme Court failed to analyze federal tax payment on an individual scale, rendering its analysis incomplete. See Docket No. 34, at pp. 4-5. This argument has no bearing on the outcome of the Court's decision because, as the Supreme Court specifically stated in Vaello Madero, "Congress need not conduct a dollar-to-dollar comparison of how its tax and benefits programs apply in the States as compared to Territories, either at the individual or collective level. Congress need only have a rational basis for its tax and benefits programs." Id. (emphasis added) (citations omitted).
The plaintiffs also attempt to avoid dismissal by equating their case to Supreme Court of Va. v. Friedman, 487 U.S. 59, 64, 108 S.Ct. 2260, 101 L.Ed.2d 56 (1988), where the Supreme Court "held that the residency requirement violated the Privileges and Immunities Clause." See Docket No. 43, at 7. This argument is, however, unavailing in this case.
Friedman is distinguishable, however, because there the Supreme Court discussed the Privileges and Immunities Clause in a different context than in this case. The issue in Friedman concerned the constitutionality of the residency requirement that the Virginia Supreme Court had in place for lawyers admitted to the Virginia Bar "on motion." 487 U.S. at 61, 108 S.Ct. 2260. Even so, the Friedman court recognized that the Privileges and Immunities Clause is not all encompassing. Id. at 67, 108 S.Ct. 2260; citing United Bldg. & Constr. Trades Council, 465 U.S. 208, 222, 104 S.Ct. 1020, 79 L.Ed.2d 249 (1984), the Supreme Court explained that "[t]he [Privileges and Immunities] Clause does not preclude disparity in treatment where substantial reasons exist for the discrimination and the degree of discrimination bears a close relation to such reasons." Friedman, 487 U.S. at 67, 108 S.Ct. 2260. This reasoning is precisely what the Supreme Court utilized in Vaello Madero.
Plaintiffs also urge the Court to take judicial notice of the ruling in Peña Martínez v. U.S. Department of Health and Human Services, 478 F.Supp.3d 155 (D.P.R. 2020). See Docket No. 43, at 6. This case, however, was reversed and "remanded to the district court with instructions to dismiss the case," in light of Vaello Madero. See Martínez v. United States Department of Health and Human Services, No. 20-1946, 2022 WL 4489163, at *1 (1st Cir. May 16, 2022). Accordingly, the Court will not entertain Plaintiffs' arguments relating to this case.
This action pertains to a federal statute that provides federal income benefits to United States citizens with disabilities, so long as certain requirements are met. Residency within the continental United States, or within the Northern Mariana Islands, is one of those requirements. The Supreme Court has repeatedly held that Congress's plenary powers grant it "substantial discretion over how to structure federal tax and benefits programs for residents of the Territories." Vaello Madero, 142 S. Ct. at 1544, including denying Puerto Rico residents Supplemental Security Income benefits.
Northern Mariana Islands residents were later included as eligible participants of the Supplemental Security Income benefits program, pursuant to 48 U.S.C.A. § 1801.
This Court will not deviate from authoritative precedent. For this reason, the plaintiffs' case is futile for failure to state valid claims upon which relief could be granted. Their motion for leave to file a second amended complaint is DENIED.
IV. Conclusion
For the reasons set forth above, the plaintiffs' motion for leave to file a second amended complaint is DENIED.
This case is DISMISSED with prejudice. Judgment shall be entered accordingly.
IT IS SO ORDERED.