Appendix — Califano v. Yamasaki

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DEC 4 1978

APPENDIX

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ae ee

In the Supreme Court of the United State

OCTOBER TERM, 1978

No. 77-1511

JOSEPH A. CALIFANO, SECRETARY OF HEALTH,

EDUCATION, AND WELFARE,

Petitioner

—_—

EVELYN ELLIOTT, ET AL.

JOSEPH A. CALIFANO, SECRETARY OF HEALTH,

EDUCATION, AND WELFARE,

Petitioner

—

FANNIE BUFFINGTON, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI FILED APRIL 21, 1978

CERTIORARI GRANTED OCTOBER 2, 1978

ee eee

In the Supreme Court of the United States

OCTOBER TERM, 1978

No. 77-1511

JOSEPH A. CALIFANO, JR., SECRETARY OF HEALTH,

EDUCATION, AND WELFARE,

Petitioner

—.—

EVELYN ELLIOTT, ET AL.

JOSEPH A. CALIFANO, JR., SECRETARY OF HEALTH,

EDUCATION, AND WELFARE,

Petitioner

—.—

FANNIE BUFFINGTON, ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

INDEX

Page

Califano v. Elliott

r a iets 1

t q ꝓ = en ree Ween 11

c n 26

/ / ·⸗·⸗·⸗··⸗ / . e e 29

Plaintiffs’ Motion for Determination of Class Action 33

rr OT ee ee 35

Pre-trial Order Delineating Clas

ii INDEX

Page

r . 39

Dr . SDE I Ce NO a 42

October 2, 1978 Order allowing certiorari ............................... 43

Affidavit of Carl Yamasaki .......................... 3 44

Affidavit of Nancy Yamasaki and Exhibit A thereto 46

. occ cecesccereneetecescosensinatientbidnibichansant 50

I... se creiarennninminicenisilinteinnoniantia 52

eee 54

Affidavit of Jordan A. Sia — 56

DD e 58 & 73

May 2, 1973 Affidavit of James E. Forbuun ss 87

Letter of October 2, 1972, from HEW to Mr. Silva .................. 97

Letter of February 8, 1972, from HEW to Isabelle Ortiz 99

Letter of March 8, 1972, from HEW to Mr. Vaquilar ......... 101

Letter of November 24, 1972, from HEW to Mr. Vaquilar... 103

Letter of February 2, 1973, from HEW to Mr. Vaquilar ........ 105

Letter of January 8, 1973, from HEW to Mrs. Yamasaki ...... 107

Affidavit of Umeyuki Taniguchi ................................................ 108

Affidavit of Hiroko Shimabu uro 111

Letter of December 4, 1972, from HEW to Mr. Shimabukuro. 114

Affidavit of Lorraine Robinson ................................. b 117

Findings of Fact and Conclusions of LaW-W-,]Ʒßn,. 120

Defendants’ Answers to Plaintiffs Interrogatorieees 135

Califano v. Buffington

r eet idan ageteeenimiannnniteunpetaneaie 180

Complaint, with Exhibits A through CG:2!?!): 188

ccc — 213

Motion to Declare Class Action e 220

Order Granting Class Action 221

Plaintiffs’ Interrogatories to Defendant, with Exhibits A, E.

1 A —T—T—TbTbTPTPPTbT—TbTbTb—b——c 223

Letter of April 8, 1974, from HEW to Mrs. Biner 249

Affidavit of James E. Forbun- ggg 252

Order Modifying Definition of Class _.......................... 259

INDEX

Order of Summary Judgment

Notice of Appeal

„„er

Affidavits of Mrs. Buffington and Mrs. Bi i

Motion for Summary Judgment ee

—ͤ—ͤ—M—

— —ũ——6m — 2 —

—— —ů 2——ùſ)c 43232 232

— —ä—ä6ä—j ͤ ͤ ͤ ũ ũ 3 —

DOCKET ENTRIES

DATE FILINGS—PROCEEDINGS

1974

Apr8 FILED CERT TRANSC OF RECORD ON APPEAL

IN SIX VOLUMES: VOL I thru III, PLEADINGS ORIG

ONLY; VOLS IV thru VI, REPORTER’S TRANSC

ORG & 1 COPY; FILED ORIG EXHIBITS IN LPS

Apr 8 DOCKETED CAUSE AND ENTERED APPEAR-

ANCES OF COUNSEL USA

Apr 11 Appellant's Brief Due May 21, 1974 ra-

Apr 15 Filed applts' motion for stay pending appeal (panel

4/29/74). ty

Apr 22 FILED TWO ADD’L COPIES OF THE RECORD,

VOLS. I. II. & III. no fee th

Apr 22 Filed aples’ memorandum opposition to aplts’ mo-

tion for stay pending appeal. (to O’Fallon) cs

May 1 Filed apits’ supplemental memorandum in support of

motion for stay. (to O’Fallon) cs

May 6 Filed order (E & G) denying applts motion for stay.

May 20 Filed applt's motion for ext of time to file brief (C).

May 24 Filed order (C) granting aplt an ext of 21 days to

and including June 11, 1974 to file brief. jr

June 13 Filed aplt's motion for leave to file typewritten brief

to (C) with copy of typewritten brief. jr

June 18 Filed order (C) granting aplts leave to file type

written brief. jr

June 18 Filed appellants typewritten copy of brief. gb

June 20 FILED 25 APPELLANTS BRIEFS (6/11/74) jr

(1)

DATE FILINGS—PROCEEDINGS

1974

July 11 Filed aples’ motion for an ext of time to file brief to

(C). jr

July 16 Filed order (C) aples’ brief due August 12, 1974. jr

July 24 Filed the Committee for the Rights of the Disabled

(“CRD”) motion for leave to file brief as amicus curiae

on behalf of aples, to (McAvoy). jr

July 24 Filed aples’ (Angel Hurtado & Helen Pritt, etc.)

motion to intervene to (McAvoy). jr With brief of inter-

venor applicants.

July 25 Recvd intervenor’s (Angel R. Hurtado) affidavit,

returned for certificate of service. jr

Aug 6 Filed Intervenor’s Affidavit. (McAvoy)

Aug 13 FILED 25 APPELLEES BRIEFS (Aug 9 1974) tj

Aug 16 Filed order (K & Cy) denying motion of (A.

Hurtado & H. Pritt) for leave to intervene; further

ordered, Committee for the Rights of the Disabled is

granted leave to file a brief as amicus curiae; and the

brief shall be filed within 7 days of the date this order

is entered. jr

Aug 23 Filed Orig & 24 briefs of Amicus Curiae (Committee

for the rights of the disabled) on behalf of aples. (Aug.

23,1974) tj

Aug 26 Filed aplt's motion for an ext of time to file closing

brief to (C). jr

Aug 28 Filed order (C) granting aplt an ext of time to and

including September 9, 1974 to file closing brief. jr

Sept 11 Filed aplts’ motion for leave to file reply brief in

typewritten form pending reproduction to (M). jr

Sep 17 Filed Order (M) granting aplts leave to file type-

written copy of brief pending reproduction. cs

DATE FILINGS—PROCEEDINGS

1974

Sept 18 Filed 25 copies Aplt’s reply briefs. (Sept. 9, 1974)

Nov 8 Filed aplt's motion for leave to consolidate +74-1611

with an undocketed appeal Buffington & Biner vs. Wein-

berger to (C). jr

Nov 26 Filed Order (Goodwin & Sneed) granting leave to

consolidate appeal with 74-3118 for purposes of consid-

eration & oral argument; further Ordered aplts’ brief in

74-3118 shall be filed on or before December 16, 1974;

Aples’ brief shall be filed on or before January 6, 1975 &

Aplts’ reply brief shall be filed on or before January 16,

1975. The Clerk shall calendar the cases for oral argu-

ment in San Francisco during the week of February 14,

1975. Aples’ application for stay pending appeal in 74-

3118 is hereby denied. cs

Dec 5 Filed, in 74-3118, order (Sneed) amending in the last

paragraph court’s order entered 11/26/74: upon due con-

sideration, aplt’s application for a stay pending appeal

in 74-3118 is hereby denied. jr

Dec 6 Rec'd, in 74-3118 aple counsel’s letter eliminating

Robert J. LeClair as attorney of record. jr

Dec 13 Filed, in 74-3118, aplt’s motion for leave to file brief

in typewritten form and to supplement record references

to (C) with copy of brief. jr

Dec 24 Filed, in 74-3118, order (C) granting aplt leave to

file brief in typewritten form and to supplement record

references. jr CALENDARD 2-10-75 S.F.

1975

Jan 7 Filed in 74-3118, ORIG & 24 APPELLEE’S BRIEF

(1-6-75) (to panel) sj

Jan 8 RECEIVED IN (74-3118), ORIG & 24 APPEL-

LANT’S BRIEF (12-12-75) sj

DATE FILINGS—PROCEEDINGS

1975

Jan 13 Filed, in 74-3118, motion & order (Br) directing

clerk to file the brief. jr

Jan 18 FILED IN 74-3118 25 APPELLANTS BRIEF

(12/12/74). Panel. cl

Jan 20 Filed in 74-3118 aplt’s motion for leave to file reply

brief in typewritten form. To panel w/ copy of brief. cl

Jan 22 Received aple’s letter requesting thirty minutes ad-

ditional time for argument. To panel. cl

Jan 23 Filed, in 74-3118, order (Br) granting aplt leave to

file reply brief in typewritten form. jr

Jan 23 Rec'd additional citations for apels in 74-3118 to

(panel). jr

Jan 23 FILED 4 APPELLANTS REPLY BRIEFS (1/16/

75). cl (TYPEWRITTEN)

Jan 29 FILED 25 APPELLANTS REPLY BRIEFS (1/16/

75). To panel. cl

Feb 3 Rec'd aples’ (Elliott, et al) additional citations to

(panel). jr

Feb 3 Rec'd aples’ (Buffington, et al) additional citations

to (panel). jr

Feb 4 Pursuant to instructions from the court; Clerk's letter

advising counsel request for add’l time for oral argument

has been denied. gb

Feb 10 Argued & submitted to Br. T, CJJ; & S. Williams,

DJ.

Feb 10 Filed in 74-3118 aple’s additional authority. To

panel. cl

Feb 25 Recvd government counsel’s letter re add’l informa-

tion requested during court session. (to Panel) cs

DATE FILINGS—PROCEEDINGS

1975

Apr 24 Rec'd in 74-3118, aplt’s letter of additional citations

to (panel). jr

June 13 Reed in 74-3118, aple’s letter of June 11, 1975 re

recent decisions by CA, 3rd Cir. (panel) ec

Jun 30 Rec'd in 74-3118, aplt’s letter of additional citations

to (panel). jr

Sept 18 Rec’d aplt’s letter of Sept 16 re decision by CA, 7th

Cir. in Fisher, etc v. Secy of HEW, et al. (panel) ec

Sept 26 Rec'd, in 74-3118, aplts’ letter of additional citations

to (panel). jr

Oct 1 ORDERED OPINION (S. WILLIAMS) FILED &

JUDG TO BE FILED & ENTD

Oct 1 Filed opinion—Affirmed in part, reversed in part, and

the cases are remanded.

Oct 1 Filed & Entered Judgment. jr

Oct 13 Pursuant to instructions from Judge Browning, man-

date not to be issued until further order of the court. jc

Oct 30 Filed appellees’ motion & affidavit for ext of time to

file Petition for Rehearing and for suggestion for re-

hearing en banc. panel

Oct 30 Rec'd an orig. & 24 Petition for Rehearing and Sug-

gestion of the appropriateness of rehearing en banc.

(panel) ec

Nov 10 Filed Order (Br) to file petition for rehearing. (all

active judges)

Nov 20 Filed order (Melfi for the Court) defendants-Appel-

lants are requested to file a response to the petition for

rehearing. jr

Dec 18 Filed appellants’ opposition to appellees’ Petition for

DATE - FILINGS—PROCEEDINGS

1976

March 4 Received Supreme Court notice that petition for

certiorari was filed on February 27, 1976, assigned num-

ber 75-1234. wdt

Mar 15 Filed Appellees’ motion for an order requiring the

parties to submit supplemental briefs. (panel) ec

Mar 22 Rec’d from appellees letter dated March 15, 1976,

re typo errors in motion for an order requiring parties

to submit supp. briefs. (panel) ec

Mar 22 Filed Appellant’s opposition to appellees’ motion for

order requiring the parties to submit supp. briefs, etc.

(panel) ec

Mar 30 Filed order (S. Williams) directing the parties to

submit add’l briefs on the impact, if any, of the recent

Supreme Court decision in Eldridge v. Weinberger, rr

U.S.L.W., 4224 (February 24, 1976). Aplts’ brief shall

be filed within 30 days of the date of this order & the

brief for aples shall be filed within 30 days of their re-

ceipt of aplts’ brief. (Aplts brief due 4/29/76) jc

Apr 22 Filed Appellants’ motion for ext of time to file sup-

plemental brief. (panel) ec

May 3 Filed order (S. Williams) granting aplts an ext of

time to file supplemental brief to and including May 24,

1976. -dmf-

May 26 Filed Appellants’ motion for ext of time to file supp.

brief. (panel) ec

June 1 Rec'd from Stanley E. Levin, Esq., letter dated May

27, 1976 re: aplts’ motion for ext of time for filing supp.

brief. (panel) ec

June 29 Filed order of Judge Spencer Williams granting

appellants’ motion for a thirty-day extension to June 23,

1976 to file their suDDi mental brief. wat

DATE FILINGS—PROCEEDINGS

1976

June 25 Filed aplts’ motion for a 7-day ext of time in which

to file supp. brief. to Judge S. Williams. ec

July 1 Filed aplts’ motion for a 28-day ext of time in which

to file supp. brief. to Judge Williams, S. ec

Jul2 Filed order (S. Williams) granting aplts a 7-day ext of

time to file supplemental brief, to and including June 30,

1976. -dmf-

July 6 Filed, as of June 24, 1976, copy of Supreme court

order granting certiorari. To panel. wat

July 6 CASE RE-OPENED JS 34 prepared

July 6 Filed, as of June 24, 1976, certified copy of Supreme

Court order remanding this case and No. 74-3118 to this

court pursuant to Mathews v. Eldridge, filed in the Su-

preme Court on February 24, 1976. To panel. wdt

Jul 9 Filed order (Williams) granting aplts an ext of time

of 28 days in which to file their supplemental! brief; brief

due July 28, 1976. -dmf-

Jul 30 Filed aplts' motion for a 14-day ext of time in which

to file supplemental brief. (S. Williams) ec

Aug 9 Filed order (Br) granting appellants’ motion for a

14-day ext of time, to and including August 11, 1976. -pb-

Aug 13 Filed Aplts’ motion for leave to file their brief

(Supp.) in typewritten form pending repro. panel

w/brief ec

Aug 30 Rec'd 25 Aplt's supplemental briefs (8/11/76) (mo-

tion for leave to file supp. brief in typewritten form,

urder submission) -pb-

Sept 7 Filed aples’ motion for ext of time in which to file

responsive supp. brief. (panel) ec

DATE FILINGS—PROCEEDINGS

1976

Sept 13 Filed order (S. Wms.) granting aples 30 days ext

(from Sept 10) of time in which to file responsive supp.

brief. (Due Oct 10, 1976) ec

Sep 15 Filed, as of Sept 13, order (S. Williams) granting

aplts’ leave to file supplemental brief in typewritten form.

-dmf-

Oct 11 Filed aples’ (Buffington & Biner) motion for ext of

time in which to file responsive supplemental brief. (Br,

T., S. Williams)

Oct. 18 Filed order (S. Williams) granting aples’ (Buffing-

ton, Biner, etc) an ext of 30 days, to and including No-

vember 11, 1976 to file their responsive brief. jr

Nov 12 Filed appellees’ motion for ext of time in which to

file their resporsive supplemental brief. (panel) ec

Nov 15 Filed order (S. Williams) granting aplees an ext

of time of 30 days to file responsive supplemental brief.

(due December 10, 1976) -dmf-

Dec 8 Filed motion & order (S Williams) Upon due consid-

eration of the motion of aples, it is hereby ORDERED

that the aples’ are granted an ext of time of 7 days, to

and including Dec. 17, 1976, in which to file their respon-

sive brief. -fn-

Dec 9 Filed order (T) upon consideration of the motion of

appellees for a 7-day ext of ‘ime, it is hereby ordered

that the aforesaid motion is granted. -dmf-

Dec 17 Filed orig. & 25 copies Aples’ (Elliott, Molina, Buf-

fington & Biner) supplemental briefs. (12/16/76) -pb

to panel

DATE FILINGS—PROCEEDINGS

1977

Mar 17 Filed appellees’ motion for oral argument on aples’

petition for rehearing & the pending reconsideration of

the original decision required by the order of remand.

(panel) ec

Mar 28 Filed aplts’ (USA, et al) response to aples’ motion

for oral argument. panel ec

July 1 Filed order (Br, T & S Williams) aples’ motion for

oral argument is denied. jr

July 1 ORDERED OPINION (WILLIAMS) FILED &

JUDG TO BE FILED & ENTD

July 1 Filed opinion—The judgments of the D.C.s are

affirmed in part and reversed in part, and the cases are

remanded.

July 1 Filed & Entd Judgment. -fn- J-34

Jul 13 Filed aplts’ motion for ext of time in which to file

petition for hearing. (panel) ec

Aug 4 Filed, as of July 28, order (SPENCER WILLIAMS)

On consideration of aplts for a 30 days ext of time in

which to file their petition for rehearing and suggestion

for rehearing en banc, it is hereby ORDERED that the

motion is GRANTED. (Petition due 8-14-77.) -fn-

Aug 17 Filed aplts’ motion for ext of time in which to file

Petition for rehearing. (panel) ec

Aug 24 Rec'd 25 copies Aplts’ petition for rehearing and

suggestion for rehearing en banc. 8-23 be (panel)

Aug 27 Filed, as of 8/25/77, order (Br) on consideration

of the motion of aplts for a 10 day ext of time in which

to file their petition for rehearing and suggestion for re-

hearing en banc, it is hereby ORDERED that the afore-

said motion is GRANTED. jr

Aug 27 Filed, as of 8/25/77, 25 Aplts’ Petition for Rehear-

ing and Suggestion for Rehearing En Banc to (All Active

Judges). jr 8/23/77

DATE FILINGS—PROCEEDINGS

1977

Dec 16 Filed, as of Dec. 15, order (BR & T, CJJ & WIL-

LIAMS, DJ) The petition for rehearing is denied and

the suggestion for in banc rehearing is rejected. -fn-

1978

Jan3 MANDATE ISSUED

Jan 17 Returned to D.C. Vols 1 thru 3 Originals and R/T’s

Vols 4 thru 6 ORIGINALS and 1 ENVELOPE OF Ex-

HIBITS m

Mar 10 Reed SC Ltr. extending time for to file pet. for cert.

to & incl. 4-14-78. Th.

Apr 10 Reed SC ltr extending time for filing pet for cert to

and incl. 4-21-78. Th

Apr 27 Reed SC notice of filing on 4/21/78 petition for cer-

tiorari, assigned 4 77-1511. Th

Apr 27 Reed 3 copies of Aplts' petition for writ of certiorari.

Oct 5 Filed certified copy of Supreme Court order granting

certiorari on October 2, 1978. (panel) pn

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No.

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

COMPLAINT

1. This is a class action seeking declaratory and in-

junctive relief to secure rights and privileges established

by Title II of the Social Security Act, 42 U.S.C. Section

401, et seg., and guaranteed by the Due Process Clause

of the Fifth Amendment to the United States Constitu-

tion. This action specifically seeks to declare illegal and

unconstitutional the procedure used by Defendants’ So-

cial Security Administration to adjust, terminate or sus-

pend Title II benefits to Plaintiffs and all other persons

similarly situated without giving notice of the grounds

upon which said adjustments or suspensions are pro-

posed or the opportunity for Plaintiffs to be heard prior

to the time a decision is made to make such adjust-

ments or suspensions. This action further seeks an in-

junction ordering Defendants to refrain from adjust-

ing or suspending Title II payments (in order to recoup

alleged prior overpayments) to Plaintiffs and all others

similarly situated unless they are given notice of the

grounds upon which said adjustments or suspensions are

proposed and the opportunity for a hearing consistent

with Due Process of Law prior to the time a decision is

made to make such adjustments or suspensions.

2. Jurisdiction is conferred upon this Court by 28

U.S.C. Sections 1331 and 1361. Declaratory relief is

sought pursuant to 28 U.S.C. Sections 2201 and 2202.

3. Plaintiff EVELYN ELLIOTT is a sixty-four-year-

old cancer patient who resides in Honolulu, Hawaii.

4. Plaintiff ELLIOTT became eligible for old age bene-

fits (OASDI) in August, 1970 and received same until

May, 1972.

5. Plaintiff ELLIOTT also became eligible for dis-

ability benefits from April 20, 1970, which she received

from May, 1970 through April 1972, at which time said

benefits were terminated without a prior hearing.

6. Plaintiff BENITO MOLINA is a resident of

Makaha, Hawaii.

7. Plaintiff MOLINA was born in the Philippine

Islands in 1896, and has received old age security bene-

fits (OASDI) since 1962. He is seventy-six (76) years

old. :

8. Plaintiff MOLINA’s benefits were terminated as of

June, 1972 without notice as to the reason for such

termination and without opportunity for a prior hearing.

III

9. Plaintiffs ELLIOTT and MOLINA bring this ac-

tion on their own behalf and on behalf of all other per-

sons similarly situated pursuant to Federal Rules of Civil

Procedure Rule 23(a) and (b) (2).

10. The class is composed of all social security old

age disability insurance (OASDI) recipients who are

being or who will be subjected to adjustment, suspension,

or termination of their social security benefits pursuant

to 42 U.S.C. Section 404(a) and (b) without adequate

prior notice of the grounds for such action and without

a prior hearing on disputed issues relating to such action.

11. The persons in the class referred to are so nu-

merous that joinder of all members is impractical. There

are questions of law and fact common to all members

of the class.

12. The prosecution of separate actions by individual

members of each class would create a risk of inconsistent

or varying adjudications with respect to individual mem-

bers of the class which would establish incompatible

standards of conduct for the party opposing the class.

13. The party opposing the class has acted on grounds

generally applicable to the class, thereby making ap-

propriate final injunctive relief and corresponding de-

claratory relief with respect to the class as a whole.

14. he representative Plaintiffs will fairly and ade-

quately protect the interests of the class.

15. Defendant ELLIOT L. RICHARDSON, in his ca-

pacity as duly appointed Secretary of the United States

Department of Health, Education and Welfare, is charged

with the administration and supervision of the provisions

of Title II of the Social Security Act (hereinafter re-

ferred to as the Act“), 42 U.S.C. Section 401 et seg., and

in particular with Title II of the Act, 42 U.S.C. Sections

223 and 423, relating to disability benefits, and Sections

202 and 402, relating to old age assistance.

16. Defendant SUNG DAI SEU, in his capacity as

Pacific Area Manager, Social Security Administration,

is charged with the administration of the Social Security

Administration rules and regulations mentioned in para-

graph 15 above in the Pacific Region, including the State

of Hawaii.

FIRST CLAIM FOR RELIEF

A. Plaintiff ELLIOTT

17. Plaintiff ELLIOTT, at all times mentioned here-

in, was eligible to receive old age benefits under the cri-

teria set forth in the Act. She received said old age

benefits in the amount of $156.00 from August, 1970

until they were suspended in June, 1972.

18. In January, 1971, Plaintiff ELLIOTT contracted

multiple meyloma, a severe and virulent form of bone

cancer. She was operated upon in January, 1971 and

thereby became eligible for social security disability bene-

fits. She was released from the hospital in March, 1971,

and is currently receiving chemotherapy treatments. She

experiences pain and has extreme difficulty walking and

standing. Plaintiff ELLIOTT applied for disability in-

surance payments in May, 1971 and received OASDI

benefits of $197 per month until they were suspended in

June, 1972.

19. In early May, 1972, one Mr. Robert Wendell, an

agent of Defendants, came to MRS. ELLIOTT’s house.

Since Plaintiff ELLIOTT was not at home, said Wind-

ham left a copy of a letter from the Honolulu District

Office of the Social Security Administration (hereinafter,

“District Office“ with MRS. ELLIOTT’s sister-in-law

and roommate, Mrs. B. Langlois. Said letter apparently

informed Plaintiff ELLIOTT that her social security

benefits would be totally suspended from June, 1972 to

November, 1972 to recover an alleged overpayment of

$1,092.70. No reasons or specifications were given as to

the reason for recovery or basis for computing the over-

payment. (Plaintiff has no copy of the letter; nor does

the District Office. A request for a copy of the letter

has been made by Plaintiff’s attorney. See Affidavit and

Letter of Peter A. Lee appended as Exhibits A and A-1

hereto. )

20. Since Plaintiff ELLIOTT derives her primary

support from social security benefits, on or about June

27, 1972, without consulting her attorney, she wrote a

letter to the District Office explaining the difficulties she

was having meeting living expenses, requesting an ad-

justment or explanation of the overpayment, and request-

ing an adjustment of her monthly check of $50.00. She

anticipated severe difficulties in being able to survive if

her primary source of income were completely cut off.

Said letter, of which she did not keep a copy, was for-

warded by the District Office to the Baltimore office of

the Social Security Administration on or about June

30, 1972. The District Office did not keep a copy of said

letter.

21. Plaintiff ELLIOTT did not receive her checks for

June, July, and August, 1972, and has been forced to

apply for welfare.

22. On or about August 4, 1972, MRS. ELLIOTT,

through her attorney, filed at the Honolulu District Office

a Request for Reconsideration, Request for a Hearing,

— —

Refund Questionnaire, and Without Fault“ Question

naire. (Copies appended as Exhibts B through E here-

to.) A Social Security Counsel informed her attorney

that the aforementioned forms would be processed in

Baltimore, a three to six week process, before a decision

could be made to schedule a hearing in Honolulu. A

further delay of several months could result before a

decision is rendered in a local hearing. (See Affidavit

of Peter A. Lee appended as Exhibit A hereto.)

23. During the week of August 7, 1972, Plaintiff

ELLIOTT received a check for approximately $442.00

from the Social Security Administration, apparently in

response to her letter of June 27, 1972, mentioned in

paragraph 20 above. Said check ostensibly returns to

her the June, July, and August payments, less $50 per

month.

24. Plaintiff ELLIOTT still, however, believes that she

was “without fault” in receiving any overpayment, and

that Defendants have illegally deprived her of her right-

ful benefits

25. Plaintiff ELLIOTT states, in the forms mentioned

in paragraph 22, a) that she believed she was entitled

to the social security checks she received, b) that her

sole sources of income were her social security checks for

old age and/or disability benefits, e) that her current

sole source of income is public welfare amounting to

about $200 per month. Said welfare assistance is ex-

pected to be reduced to less than $100 in subsequent

months, since the first payment included retroactive

benefits.

B. Plaintiff MOLINA

26. Plaintiff MOLINA arrived in the Islands from

the Philippines in 1921 to work on the sugar and pine-

apple plantations. He married a Hawaii resident in

1946 and became a United States citizen in 1953. MR.

MOLINA has paid for social security insurance in the

course of the forty years he has worked in the Islands.

27. In 1962, Plaintiff MOLINA became eligible to re-

ceive social security old age benefits (OASDI). He re-

ceived said benefits until they were terminated in June,

1972.

28. Although Plaintiff MOLINA has lived and worked

in the Islands for many years, he does not communicate

or understand English well, and needs an interpreter.

29. In late May, 1972, a Social Security Administra-

tion District Office employee asked MR. MOLINA or his

immediate family about a woman MR. MOLINA had

allegedly married in the Philippines prior to his arrival

in Hawaii. MR. MOLINA admitted that there might

have been such a marriage 56 years ago, but that he had

never seen nor heard of his alleged wife since he left the

Philippines. Nevertheless, he agreed to start divorce or

annulment proceedings, although he could not and still

does not understand why the Social Security Administra-

tion is interested in the matter.

30. In June, 1972, Plaintiff MOLINA did not receive

his monthly social security check. Upon inquiry at the

District Office (Waipahu), he was informed that, pend-

ing clarification of his marital status and/or his obtain-

ing a decree of divorce or annulment, his social security

benefits were suspended or terminated for an indefinite

period.

31. Plaintiff MOLINA had been receiving $163 per

month for OASDI. He has not received a check for June,

July, and August.

32. Employees at Defendants’ Waipahu District Office

have not attempted to communicate to Plaintiff MOLINA

in Tagalog, his native language.

33. Plaintiff MOLINA depends entirely on his social

security check plus $31 per month from a part-time job

for his monthly income for a total monthly income of

approximately $194.00. Since his OASDI benefits have

been terminated, he has been forced to live on a welfare

check of $75. His total monthly income is now about

$106., a net reduction of $88. He cannot live decently

on this sum.

34. Plaintiffs’ benefits were terminated by Defendants

and their agents pursuant to 42 U.S.C. Section 404 (a)

which provides in part that under certain circumstances

“proper adjustment or recover shall be made” whenever

there is an overpayment of social security benefits.

35. Section 204(b) of the Social Security Act, Title

II. provides that “no recoupment of overpayments” of

Title II benefits shall be taken pursuant to 42 U.S.C.

Section 404(a) from any person who is “without fault”

if such recovery “would defeat the purpose” of Title II

or “would be against equity and good conscience.”

36. 20 C.F.R. Section 404.508, a regulation promul-

gated by the Secretary to enforce the Social Security

Act provides in pertinent part as follows:

Adjustment of recovery will defeat the purposes of

Title II in (but is not limited to) —— where

the person from whom recovery is sought needs

substantially all of his current income (including

Social Security monthly benefits) to meet current

ordinary and necessary living expenses.

37. Pursuant to 42 U.S.C. Sections 404(a) and (b)

and regulations promulgated pursuant thereto, Defend-

ants and their agents have made ex parte determinations:

(a) That Plaintiff ELLIOTT has received an overpay-

ment of social security benefits amounting to $1,092.70;

(b) That said alleged overpayment should be recouped

by terminating Plaintiff's social security benefits for the

months of May, June, July, August, September, and

(e) That Plaintiff ELLIOTT is either

1) “At fault” within the meaning of 42 U.S.C. Sec-

tion 404(b) in receiving overpayment; or,

2) “Without fault” within the meaning of 42 U.S.C

Section 404 (b). * Te

(d) That if Plaintiff ELLIOTT was “without fault”

within the meaning of 42 U.S.C. Section 404(b), the

suspension of her social security benefits by Defendants

would not defeat the purpose of Title II of the Act or

be against equity and conscience.

(e) That Plaintiff ST OLINA is ineligible for further

OASDI benefits pending his annulment or divorce.

(f) That Plaintiff MOLINA’s benefits have been ter-

minated as of June, 1972 for an indefinite period of

time.

(g) That Plaintiff MOLINA is either “at fault” or

“without fault” for receipt of unauthorized benefits with-

in the meaning of 42 U.S.C. Section 404(b).

(h) That if Plaintiff MOLINA is “without fault“, sus-

pension of his benefits will not defeat the purposes of

Title II of the Act or be against equity and good

conscience.

38. Defendants have never given either Plaintiff EL-

LIOTT or Plaintiff MOLINA notice of the grounds for

the immediately aforementioned determinations. Nor

have they granted either Plaintiff the opportunity to be

heard and to contest the above determinations before de-

priving them of social security (OASDI) benefits.

39. Defendants’ summary, ex parte action “adjusting”

Plaintiffs’ benefits without notice or prior hearing on the

issues of overpayment, fault, hardship, equity and good

conscience violates the clear mandate of 42 U.S.C. Section

404(a) and (b).

40. By reason of their precipitous and ill-considered

actions, Defendants have caused Plaintiffs and all other

persons similarly situated extreme hardship, irreparable

injury, suffering, and anxiety. Because Plaintiff EL-

LIOTT in particular suffers from a severe and debiliat-

ing form of cancer, Defendants have appreciably in-

creased the chances of her demise by depriving her or

threatening to deprive her of the necessities of life such as

adequate food, clothing, medical care, and shelter. Plain-

tiffs and all other persons similarly situated have suffered

and will continue to suffer severe and irreparable in-

jury to their health and well-being as a result of such

summary, ex parte “adjustments” of their Title II

OASDI payments by Defendants until the statute and

procedures described above are declared illegal or un-

constitutional and their enforcement and execution in

said illegal manner is enjoined by the Court.

41. Plaintiffs have no plain, adequate, or speedy

remedy at law and this suit for mandatory and declara-

tory relief is their only means of securing such relief.

WHEREFORE, Plaintiffs pray for relief as herein-

after set forth.

VII

SECOND CLAIM FOR RELIEF

42. Plaintiffs allege and re-allege paragraphs 1

through 41 as if fully set forth herein.

43. Defendants’ peremptory, ex parte action “adjust-

ing“ and suspending Plaintiffs’ social security benefits

without notice or prior hearing violates the Due Process

Clause of the Fifth Amendment to the United States

Constitution in that:

(a) Such actions effectively terminate and withhold

benefits essential to maintain life itself without afford-

ing Plaintiffs and all other persons similarly situated

reasonable and adequate notice and opportunity for a

prior hearing, and;

(b) Such actions fail to afford Plaintiffs and all others

similarly situated with notice of the substance of the evi-

dence upon which the determination to “adjust”, sus-

pend, or terminate payments was made.

44. 42 U.S. C. Section 404 (a), insofar as it permits

Defendants to act as alleged in paragraphs 36 and 37

of this Complaint, deprives Plaintiffs and all other per-

sons similarly situated of rights secured to them under

the Fifth Amendment to the United States Constitution,

and is, to that extent, unconstitutional.

WHEREFORE, Plaintiffs respectfully pray that this

honorable Court:

1) Assume jurisdiction of this case;

2) Declare that this action be maintained as a class

action pursuant to Federal Rules of Civil Procedure,

Rule 23;

3) Enter a temporary restraining order and a pre-

liminary mandatory injunction ordering Defendants to:

(a) Pay to Plaintiff ELLIOTT her regular monthly

disability benefits for the months of June, July, and

August without adjustment in the amount of $624.40, less

$442.00 received, for a total of $150.00;

(b) Continue to pay Plaintiff ELLIOTT’s disability

benefits without adjustment at the rate of $197.47 per

month;

(e) Resume payment of Plaintiff MOLINA’s OASDI

benefits immediately, pending the final outcome of this

action ;

(d) Pay to all members of Plaintiffs’ class whose social

security benefits are currently being adjusted pursuant

to 42 U.S.C. Section 404(a) and (b) their regular

monthly social security benefits, including all back bene-

fits being withheld unlawfully;

(e) Provide Plaintiffs ELLIOTT and MOLINA and all

other persons similarly situated with written notice and

an opportunity for a hearing on the issues of overpay-

ment, fault, hardship, and equity and good conscience

prior to adjusting, reducing or terminating such person’s

benefits.

4) Enter a declaratory judgment pursuant to 28 U.S.C.

Sections 2201 and 2202 and Rule 57 of the Federal Rules

of Civil Procedure, declaring that Defendants’ practice

of making determinations under 42 U.S.C. Section 404

(a) and (b) without notice or prior hearing, violates

the clear mandate of Title II of the Social Security Act,

Sections 204(a) and (b).

5) Enter a declaratory judgment pursuant to 28

U.S.C. Sections 2201 and 2202 and Rule 57 of the Fed-

eral Rules of Civil Procedure, declaring that the De-

fendants’ practice of making determinations under 42

U.S.C. Sections 404(a) and (b) without notice or prior

hearing violates the due process clause of the Fifth

Amendment to the United States Constitution.

6) Issue a permanent mandatory injunction ordering

Defendants, their successors in office, agents and em-

ployees to provide Plaintiffs ELLIOTT and MOLINA

and all other persons similarly situated with written

notice and an opportunity for a hearing on the issue of

overpayment, fault, hardship, and equity and good con-

science prior to adjusting social security old age, and

disability insurance benefits, pursuant to 42 U.S.C. See-

tions 404(a) and (b).

7. Award the Plaintiffs and all other persons similarly

situated such further and alternative relief as the Court

may deem just and equitable.

DATED: Honolulu, Hawaii, August 17, 1972.

/s/ Evelyn Elliott

EVEYLN ELLIOTT

Plaintiff

By /s/ Stanley E. Levin

BENITO MOLINA

Plaintiff

By Stanley E. Levin

His Attorney

/s/ Peter A. Lee

PETER A. LEE

Their Attorney

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU)

STANLEY E. LEVIN, being first duly sworn on oath,

deposes and says that he is the Attorney for the Plaintiff

BENITO MOLINA above named; that he has read the

foregoing Verified Complaint and knows the contents

thereof; and that the matters and statements therein set

forth are true to the best of his knowledge and belief.

/s/ Stanley E. Levin

STANLEY E. LEVIN

Attorney for Plaintiff

BENITO MOLINA

Subscribed and sworn to before me this 17th day of

August, 1972.

/s/ Tomiko Sakai

Notary Public

First Judicial Circuit

State of Hawaii

My commission expires: 11-14-75

STATE OF HAWAII )

ss.

CITY AND COUNTY OF HONOLULU +)

EVELYN ELLIOTT, being first duly sworn on oath,

deposes and says that she is the Plaintiff above named;

that she has read the foregoing Verified Complaint and

knows the contents thereof; and that the matters and

statements therein set forth are true to the best of her

knowledge and belief.

/s/ Evelyn Elliott

EVELYN ELLIOTT

Subscribed and sworn to before me this 17th day of

August, 1972.

/s/ Tomiko Sakai

Notary Public

First Judicial Circuit

State of Hawaii

My commission expires: 11-14-75

EXHIBIT A

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No.

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF PETER A. LEE

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU )

I, PETER A. LEE, being first duly sworn on oath,

depose and say that:

1. I am an attorney licensed to practice in the State

of Hawaii and am the attorney for Plaintiff Elliott in

the above- entitled case;

2. On or about August 4, 1972 I went to the Honolulu

District Office of the Social Security Administration

(hereinafter Administration“) to seek clarification of

the reasons for suspension of Mrs. Elliott’s benefits;

3. A social security counselor, Mr. Mishima, showed

me Mrs. Elliott’s file;

4. Said file contained no copy of the letter sent by

the Administration informing her of any overpayment;

5. However, said file did note that a social security

agent had been sent to Mrs. Elliott’s house to deliver a

copy of a letter from the Administration notifying Mrs.

Elliott that the Administration would try to recoup an

overpayment of $1,092.00;

6. Said Mr. Mishima told me that Mrs. Elliott’s checks

from June through October would be terminated until

the overpayment was fully recouped;

7. Said Mr. Mishima also told me that, should Mrs.

Elliott request a hearing, the following delays would

probably be inevitable:

(a) Two month delay while the Administration’s Balti-

more office decided whether to grant a Request for Re-

consideration ;

(b) A two to three week delay to send Mrs. Elliott’s

file to the Honolulu District Office;

be convened in Honolulu.

8. Said time periods could thus result in up to a four-

month delay before Mrs. Elliott could even receive a

hearing on the basis for the alleged overpayment. A

further delay could result if the hearing officer took the

case under submission ;

9. Said Mr. Mishima could only conjecture as to the

reason recoupment was sought;

10. I was further informed that the Honolulu office

was merely a conduit for Social Security Administration

disability decisions, and that no one in the District

Office would be able to furnish me or Mrs. Elliott with the

exact reason for suspension and recoupment.

11. Since neither I nor Mrs. Elliott has been able

so far to procure a copy of the letter informing her of

recoupment, I wrote to the Baltimore office of the Social

Security Administration on or about August 8, 1972,

requesting a copy of said letter of suspension. Copy of

said letter is appended.

FURTHER affiant sayeth not.

/s/ Peter A. Lee

PETER A. LEE

Subscribed and sworn to before me this 16th day of

August, 1972.

s, (Tllegible}

Notary Public

Fifth Judicial Circuit

State of Hawaii

My commission expires: Oct. 29, 1973

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

[Filed Oct. 19, 1972

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, Individually and in his capacity

as Secretary, United States Department of Health,

Education and Welfare; ET AL., DEFENDANTS

ANSWER

CERTIFICATE OF SERVICE

I hereby certify that a copy of the within was duly

hand delivered to Stanley Levin & Peter A. Lee, attorney

at his last known address on October 19, 1972.

ROBERT K. FUKUDA

United States Attorney

District of Hawaii

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, Individually and in his capacity

as Secretary, United States Department of Health,

Education and Welfare; ET AL., DEFENDANTS

ANSWER

Come now ELLIOT L. RICHARDSON, individually

and in his capacity as Secretary, United States Depart-

ment of Health, Education and Welfare, and SUNG

DAI SEU, individually and in his capacity as Pacific

Area Manager, Social Security Administration, Depart-

ment of Health, Education and Welfare, defendants here-

in, and in answer to the Verified Complaint of the plain-

tiffs filed herein on August 17, 1972 admit, deny and

allege as follows:

1. Defendants admit the allegations set forth in para-

graphs 15 and 16 of the Complaint.

2. Defendants deny the allegations set forth in para-

graphs 11, 12, 13, 14, 39, 40, 41, 43 and 44 of the

Complaint.

3. Defendants have insufficient knowledge or informa-

tion upon which to base a belief as to the truth of the

matters stated in all other paragraphs of the Complaint

and therefore deny the same and put the plaintiffs on

their proof thereof.

WHEREFORE, defendants pray that plaintiffs’ re-

quest for the Court to assume jurisdiction of this case,

and to declare a class action pursuant to the Federal

Rules of Civil Procedure, Rule 23, the entry of a tem-

porary restraining order and preliminary mandatory in-

junct’on, a declaratory judgment, and a permanent man-

datory injunction be denied, and that the plaintiffs’ com-

plaint be dismissed.

DATED: October 19, 1972, at Honolulu, Hawaii.

/s/ Robert K. Fukuda

ROBERT K. FUKUDA

United States Attorney

District of Hawaii

Attorney for Defendants

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, Individually and in his capacity

as Secretary, United States Department of Health,

Education and Welfare; ET AL., DEFENDANTS

AMENDED ANSWER

EDWIN YOURMAN

Assistant General Counsel

PAUL MERLIN

Chief of Litigation

SARAH L. KEMBLE

Attorney

ROBERT K. FUKUDA

United States Attorney

District of Hawaii

Attorneys for Defendants

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, Individually and in his capacity

as Secretary, United States Department of Health,

Education and Welfare; ET AL., DEFENDANTS

AMENDED ANSWER

Come now ELLIOT L. RICHARDSON, individually

and in his capacity as Secretary, United States Depart-

ment of Health, Education and Welfare, and SUNG

DAI SEU, individually and in his capacity as Pacific

Area Manager, Social Security Administration, Depart-

ment of Health, Education and Welfare, defendants

herein, and file this Amended Answer to the Verified

Complaint of the plaintiffs filed herein on August 17,

1972.

1. Defendants have insufficient knowledge or informa-

tion upon which to base a belief as to the truth of the

matters set forth in paragraph 1 of the Complaint, and

therefore deny the same and put the plaintiffs on their

proof thereof.

2. Defendants deny the jurisdictional allegations of

paragraph 2. Defendants affirmatively state that juris-

diction to review a decision of the Secretary arising

under Title II of the Social Security Act is defined by

and limited to 42 U.S.C. 405(g); and that because the

plaintiffs have not exhausted their administrative reme-

dies there is no “final decision” of the Secretary before

this Court as required by that section.

3. Defendants deny the factual allegations of para-

graphs 3 to 8 for lack of knowledge or information suf-

ficient on which to form a belief.

4. Defendants deny the class action allegations of

paragraphs 9 to 14.

5. Defendants admit the allegations of paragraphs

15 and 16.

6. Defendants deny factual allegations of paragraphs

17 to 34 for lack of knowledge or information sufficient

on which to form a belief.

7. Defendants deny the allegations of paragraph 35

to the extent that they sate that the Social Security Act

precludes the Secretary from recouping overpayments

until the Secretary has determined whether or not re-

covery of the overpayment can be waived.

8. Defendants admit the allegations of paragraph 36.

9. Defendants deny the allegations of paragraphs 37

and 38 for lack of knowledge or information sufficient

on which to form a belief.

10. Defendants deny the allegations of paragraph 39.

11. Answering the allegations of paragraph 40, de-

fendants assert that they are conclusions and not state-

ments of fact which require an answer; but if an an-

swer is required defendants deny these allegations.

12. Defendants deny the allegations of paragraphs 41

and 43. Answering the allegations of paragraph 42, de-

fendants reiterate the responses to paragraphs 1 to 41

as set forth herein.

WHEREFORE, defendants pray that plaintiffs’ re-

quest for the Court to assume jurisdiction of this case,

and to declare a class action pursuant to the Federal

Rules of Civil Procedure, Rule 23, the entry of a tem-

porary restraining order and preliminary mandatory in-

junction, a declaratory judgment, and a permanent man-

datory injunction be denied, and that the plaintiffs’ Com-

plaint be dismissed for lack of jurisdiction and failure

to state a claim on which relief can be granted.

DATED: October 25, 1972, at Honolulu, Hawaii.

EDWIN YOURMAN

Assistant General Counsel

DEPARTMENT OF HEALTH,

EDUCATION & WELFARE

PAUL MERLIN

Chief of Litigation

SARAH L. KEMBLE

Attorney

ROBERT K. FUKUDA

United States Attorney

District of Hawaii

By /s/ Robert K. Fukuda

ROBERT K. FUKUDA

United States Attorney

Attorneys for Defendants

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No.

EVELYN ELLIOTT, ET AL., PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

MOTION FOR DETERMINATION OF

CLASS ACTION PURSUANT TO RULES OF

CIVIL PROCEDURE

RULE 23

Plaintiffs, through their undersigned counsel, move

that, pursuant to Federal Rules of Civil Procedure Rule

23(a) and (b) (2), this Court enter an Order determin-

ing that this suit shall be maintained as a class action

on behalf of themselves and all persons similarly situated

who are, have been, or will be affected by the operation

of 42 U.S.C. Section 401 et seg. and regulations promul-

gated pursuant thereto, on the grounds that it appears

from their Complaint and Memorandum of Points and

Authorities on file herein that the requirements of Fed-

eral Rules of Civil Pre edure Rule 23(a), (b) (1), and

(2) are met.

Plaintiffs further move that this Court define the class

as all those persons in the State of Hawaii who receive

old age and disability insurance (OASDI) payments un-

der Title II of the Social Security Act, 42 U.S.C. Section

401 et seg., and who are subject to a summary ex parte

adjustment of said payments without notice or an op-

portunity for a due process hearing prior to such action

affecting their payments.

Plaintiffs further move that this Court order the De-

fendants, their agents and employer, and all persons in

active concert or participation with them, to furnish

Plaintiffs the names of all persons whose disability and

old age social security benefits are now being adjusted,

nded, or terminated by ex parte administrative ac.

ane and further, that Defendants notify said social

security beneficiaries that they are being represented as

a class in the above entitled action, and that, =a

to the granting of a temporary restraining order, pay-

pe of | their disability and old age benefits will be im-

mediately resumed. (A copy of such proposed notice is

appended as Exhibit 1 hereto.)

EVELYN ELLIOTT and

BENITO MOLINA

By /s/ Peter A. Lee

PETER A. LEE

Their Attorney

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

ORDER DETERMINING CLASS

The Court, having examined Plaintiffs’ Verified Com-

plaint, Motion for Determination of Class Action Pur-

suant to Federal Rules of Civil Procedure Rule 23(b)

(2), and Points and Authorities in support thereof, and

it appearing that the requirements of Rule 23 and Rule

23(b) (2) are met, it is hereby

ORDERED that this action be maintained as a class

action ;

IT IS FURTHER ORDERED that Plaintiffs EVELYN

ELLIOTT and BENITO MOLINA be representatives of

the class of all social security old age and disability

benefit recipients resident in the State of Hawaii, who

are being or will be subjected to adjustment of their

social security benefits pursuant to 42 U.S.C. § 404(a)

and (b) without adequate prior notice of the grounds for

such action and without a prior hearing on disputed

issues relating to such actions.

IT IS FURTHER ORDERED that this Order shall

remain in full force and effect until further order of

this Court; and

IT IS FURTHER ORDERED that copies of this Or-

der be immediately served upon Defendants named

herein.

DATED: Honolulu, Hawaii, October 17, 1972.

/s/ Samuel P. King

Judge

United States District Court of

Hawaii

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLioTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFF

v8.

CASPAR WEINBERGER, Individually and in his capacity as

Secretary, United States Department of Health, Edu-

cation, and Welfare; and SuNG Dal Segvu, Individually

and in his capacity as Pacific Area Manager, Social

Security Administration, Department of Health, Edu-

cation and Welfare, DEFENDANTS

PRE-TRIAL ORDER

The Court, having considered the arguments and rep-

resentations of counsel at the hearing on defendants’

Motion To Set Aside the Court’s Preliminary Injunction

of April 3, 1973 or, In the Alternative, For a Stay of

the Preliminary Injunction of May 7, 1973 and at the

pre-trial conference held on May 10, 1973, and being

fully advised in the premises,

IT IS HEREBY ORDERED that Caspar Weinberger

be, and hereby is, substituted for the defendant, Elliot

L. Richardson pursuant to the provisions of Rule 25 of

the Federal Rules of Civil Procedure; and

IT IS FURTHER ORDERED that the Court’s prelimi-

nary injunction of April 3, 1973, by, and hereby is, stayed

pending a final determination on the merits of this ac-

tion; and

IT IS FURTHER ORDERED that this action be main-

tained as a class action and that the class consists of two

sub-classes. The first sub-class will consist of all Social

Security old age recipients, resident in the State of

Hawaii who are being or will be subjected to recoupment

of their overpayments of Social Security benefits, pur-

suant to 42 U.S.C. S 404 (a) and (b), which overpayment

is based upon an annual earnings report submitted by

the beneficiary reporting earnings in excess of levels

contained in 42 U.S.C. § 403 (b) and (f) requiring deduc-

tions of monthly benefits for the requisite month of work

activity. Plaintiffs Silva and Vaquilar and Ortiz are

proper representatives of the above-described class. The

second sub-class will consist of all Social Security old age

and disability recipients, resident in the State of Hawaii,

who are being or will be subjected to recoupment of over-

payments of their social security benefits pursuant to 42

U.S.C. 8404 (a) and (b) for any reason whatsoever,

other than for overpayments based upon annual earnings

report as described in the above-mentioned first sub-class.

Plaintiffs Elliott, Gaines and Yamasaki are proper repre-

sentatives of the above-mentioned second sub-class;

IT IS FURTHER ORDERED that all other plaintiffs

and/or intervenors be, and hereby are, dismissed from

this action, without prejudice as to their further rights

under Title II of the Social Security Act; and

IT IS FURTHER ORDERED that this Order shall

remain in full force and effect until further order of

this Court.

DATED: May 11, 1973, at Honolulu, Hawaii.

/s/ Samuel P. King

United States District Judge

for the District of Hawaii

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT, ET AL., "LAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANT

PRELIMINARY INJUNCTION

This matter having come on to be heard before this

Court on February 23, 1973, on Defendants’ Motion for

Extension of Time and Plaintiffs’ Motion for Temporary

Restraining Order and Memorandum in Support thereof,

and, the Court having previously entered an Order De-

termining Class pursuant to Rule 23 of the Federal Rules

of Civil Procedure; and, it appearing to the Court that:

(a) Defendant Richardson, individually and in his

capacity as duly appointed Secretary, Department of

Health, Education and Welfare, and Defendant Seu, in-

dividually and in his capacity as Pacific Area Manager,

Social Security Administration, have adjusted, suspended,

or terminated the old age and disability social security

benefits of Plaintiffs and the class which they represent

without affording said persons notice of reasons for such

summary action, nor opportunity for a prior hearing;

(b) Immediate and irreparable injury, loss, and dam-

age have resulted and will result to Plaintiffs and their

class before this matter can be decided on its merits;

(e) Defendants will not suffer undue injury as a re-

sult of this Order;

(d) Plaintiffs have raised serious and substantial stat-

utory and constitutional questions on the validity of the

procedure used by Defendants to adjust payments of

OASDI benefits under Title II of the Social Security Act;

IT IS HEREBY ORDERED that Defendant Richard-

son, his successor, his agents and employees at the Social

Security Administration’s Payment Centers, and all per-

sons in active concert or participation with them are

restrained and enjoined from adjusting, terminating, or

suspending social security old age and disability benefits

accruing to Plaintiffs and their class without notice and

an opportunity for a hearing before any adjustment is

effectuated ;

IT IS FURTHER ORDERED that Defendant Richard-

son, his successor, his agents and employees at the Social

Security Administration’s Payment Centers, and all per-

sons in active concert or participation with them restore

any and all money withheld since June 22, 1972, without

notice and a prior hearing, from Plaintiffs UMEYUKI

TANIGUCHI, CARL YAMASAKI, NANCY YAMA-

SAKI, HIROKO SHIMABUKURO, LORRAINE ROBIN-

SON, ISABELLE ORTIZ, JOHN V. VAQUILAR, RAY-

MOND GAINES, and JORDAN A. SILVA pending the

holding of a pre-adjustment hearing in each of their

individual cases;

IT IS FURTHER ORDERED that Defendant Richard-

son, his successor, his agents and employees at the Social

Security Administration’s Payment Centers, and all per-

sons in active concert or participation with them continue

to pay said Plaintiffs and the members of their class

their full benefits, at their pre-adjustment levels until

the members of said class have been afforded an oppor-

tunity for a prior hearing, and until there is made a

final determination of the issues in the above-entitled

case ;

IT IS FURTHER ORDERED that Defendant Richard-

son, his successor, his agents and employees at the Social

Security Administration’s Payment Centers, and all per-

sons in active concert or participation with them shall

effectuate this Order by withholding the mailing of any

letter or notice of downward adjustment of benefits, and

otherwise processing downward adjustments, to any re-

cipient of Title II Social Security benefits: (1) who is a

member of the class herein; and (2) whose address con-

tains a State of Hawaii zip code designation (96700 et

seq. and 96800 et seq.) ;

IT IS FURTHER ORDERED that this Order shall

remain in full force and effect until modified by further

order of this court, and;

IT IS FURTHER ORDERED that copies of this

Order be immediately served upon: (1) the Defendants,

Richardson or his successor, and Seu, individually and in

their duly appointed capacities as, respectively, Secretary,

United States Department of Health, Education and Wel-

fare, and Pacific Area Manager, Social Security Admin-

istration; and (2) the supervising officials of all Social

Security Administration Payment Centers.

THIS ORDER SHALL TAKE EFFECT on and after

April 16, 1973.

DATED: Honolulu, Hawaii, April 3, 1973.

/s/ Samuel P. King

Judge

United States District Court

District of Hawaii

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil Action No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, ET AL.,

PLAINTIFFS

CASPAR W. WEIN BEROER, Individually and in his capacity

as Secretary, United States Department of Health,

Education and Welfare, ET AL., DEFENDANTS

NOTICE OF APPEAL

Notice is hereby given that defendants hereby appeal

to the United States Court of Appeals for the Ninth

Cireuit from the order granting judgment in favor of

plaintiffs entered in this action on the 19th day of Febru-

ary, 1974.

/s/ Harold M. Fong

HAROLD M. FONG

United States Attorney

SUPREME COURT OF THE UNITED STATES

No. 77-1511

JOSEPH A. CALIFANO, SECRETARY OF HEALTH,

EDUCALIUN AND WELFARE, PETITIONER

EVELYN ELLIOTT, ET AL.

ORDER ALLOWING CERTIORARI

Filed October 2, 1978

The petition herein for a writ of certiorari to the

United States Court of Appeals for the Ninth Circuit is

granted.

44 45

EXHIBIT M 1 bie the officials at the District Office have not

inform im of either the right o i i

IN THE UNITED STATES DISTRICT COURT out a Without Fault NT

DISTRICT OF HAWAII consideration.

8. That he does not know why the Administration i

Civil No. 72-3629 | recouping his benefits or what the substance of poy al.

| leged “processing error“ is.

[Filed Jan. 9, 1973] Further affiant sayeth naught.

EVELYN ELLIOTT, ET AL., PLAINTIFFS

vs.

/s/ Carl Yamasaki

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS Cam. Ya *

| Subscribed and sworn to before me

AFFIDAVIT OF CARL YAMASAKI this 22nd day of December, 1972.

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU) /s/ Tomiko Sahai

Notary Public

CARL YAMASAKI, being first duly sworn on oath, First Judicial Circuit

deposes and says: State of Hawaii

1. That he resides at Kukui Housing, Honolulu, Ha- |

waii, with his wife and child. My commission expires: 11-14-75

2. That he is thirty-one years old.

3. That he has been receiving social security disability

insurance (OASDI) since approximately June 1969 as

a consequence of a disability incurred in 1964.

4. That he currently receives approximately $99.00

per month in OASDI benefits.

5. That on or about October 2, 1972, he received a

letter from the Social Security Administration informing

him that beginning January 1973 the Administration

would begin to recoup a $207.90 overpayment assessed

as the result of a “processing error.”

6. That he contacted the District Office, pursuant to

said letter, and submitted evidence showing that he is no

longer receiving Workmen’s Compensation.

EXHIBIT L

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

[Filed Jan. 9, 1973

EVELYN ELLIOTT, ET AL., PLAINTIFFS

vs.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF NANCY YAMASAKI

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF IJONOLULU )

NANCY YAMASAKI, being first duly sworn on oath,

deposes and says:

1. That she resides at Kukui Gardens, 1351 Aala

Street, #201, Honolulu, Hawaii, with her husband, child,

mother.

ee That she is married to Carl K. Yamasaki, whose

affidavit is also being submitted herewith. _ *

3. That her husband, Carl K. Yamasaki, is receiving

Social Security Disability benefits, of which she also re-

i statutory share.

3 That on = about October 2, 1972, she received a

letter from the Administration informing her that due

to a “processing error,” an overpayment of $207.90 had

occurred. (Copy of letter attached as Exhibit A)

5. That her monthly benefits of $10.60 would be with-

held from January 1973 through October 1973.

6. That in compliance with the instructions on said

letter, she went to the District Office in Honolulu within

thirty days of October 2, 1972.

7. That she attempted to get clarification from Dis-

trict Office officials about the reasons for the recoupment,

and about what evidence she had to submit to prevent a

recoupment.

8. That the District Office worker told her only that

the District Office would write to Baltimore to request

clarification on to request adjustment of the recoupment.

9. That at no time was she instructed by the District

Office as to what evidence or information she should

bring forward to stop the recoupment.

10. That the letter from the Administration states

in the last sentence that “Unless we hear from you with-

in 30 days, we shall withhold benefits as indicated above.”

11. That she assumes that the District Office wrote

to Baltimore as she was promised (in paragraph 8

supra).

12. That as of this date, she has not heard anything

further from the Administration and does not know

whether her benefits will be recouped, but assumes that

they will be, beginning January 1973.

13. That recoupment will work a severe burden on

herself, her husband, and her family.

Further affiant sayeth naught.

8, Nancy Yamasaki

NANCY YAMASAKI

Subscribed and sworn to before me this 28th day of

December, 1972.

/s/ Tomiki Sakai

Notary Public

First Judicial Cireuit —

State of Hawaii

My commission expires: 11-14-75

EXHIBIT “A”

[SEAL]

DEPARTMENT OF

HEALTH, EDUCATION, AND WELFARE

SOCIAL SECURITY ADMINISTRATION

Baltimore, Maryland 21241

October 2, 1972

BUREAU OF

REFER TO: DISABILITY INSURANCE

DI:BP:E

576-38-2979 HB2

Mrs. Nancy Yamashki:

Apt 201

1351 Aala St

Honolulu HI 96817

Dear Mrs. Yamashki:

Our records show you received $207.90 more in social

security benefits than you should have. Due to a proces-

sing error, you were paid $40.30 for February through

August 1972, instead of $10.60 for that period of time.

As a result, you were overpaid the above amount.

If you believe that this determination is not correct, you

may request that your case be reexamined. If you want

this reconsideration, you must request it not later than

6 months from the date of this notice. You may make

any such request through any social security office. If

additional evidence is available, you should submit it with

your request.

To recover ne overpayment, we shall withhold your

benefits begining with the check you would normally

receive in January 1973. The next check that you will

receive after the full overpayment has been withheld will

be for $19.80. It will be sent to you about November 3,

1973. Thereafter, your regular monthly benefits of $20.70

will be resumed.

— ——

Under social security law, any overpayment must be

withheld from benefits or paid back unless both of the

following are true:

1. The overpayment wasn’t your fault in any way and

you cashed the check(s) because

were correct, and 3 Ge

2. You couldn’t meet your necessary livin i

g expenses if

you had to pay back the overpayment or have it with-

held from your social security benefits; or i

unfair for some other — ; or it would be

To decide whether repayment would cause you financial

hardship, we shall need a statement of a assets —

monthly income and expenses. g

If you think you meet both conditions or if withholdi

the entire amount of your monthly benefit will cause —

financial hardship, call, write, or visit any social security

office within 30 days from the receipt of this letter.

Please take this letter with you if you visit the office.

Unless we hear from you within 30 d ,

hold benefits as indicated above. cays, we shall with-

Sincerely yours,

/s/ C. C. Hall

C. C. HALL

Assistant Director

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

[Filed Jan. 9, 1973

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF JOHN V. VAQUILAR

STATE OF HAWAII )

ss.

CITY AND COUNTY OF HONOLULU )

JOHN V. VAQUILAR, being first duly sworn on oath,

deposes and says:

1. That he resides at 1421 Alapai Street, Apartment

G, Honolulu, Hawaii.

2. That he was born on June 24, 1903 and is 69 years

old.

3. That he first became eligible for social security old

age benefits in 1966.

4. That until July 1972 he had been receiving ap-

proximately $161.00.

5. That in April 1972 he was informed by a letter

from the Social Security Administration that he was

liable to the Administration for an overpayment of ap-

proximately $909.90 due to an Administrative error.

6. That if in fact said overpayment occurred, he was

without fault as to any error.

7. That he in fact believed said $909.90 to be due to

him for back benefits.

8. That said letter informed him of his right to come

forward within 30 days to contest the said overpayment,

or to make an adjusted repayment.

9. That he went to the Honolulu District Office and

arranged to repay the said $909.90 at $80 per month.

10. That he did not fill out the “Without Fault” Ques-

a — 4 — * informed that a finding of lack

of fault might enable him to

—— escape recoupment alto-

11. That he feared that if he did not agree to

back the money on an adjusted basis, hi wuld

be completely suspended. *

12. That he depends upon his OASDI benefits for the

— and livelihood of his wife and eleven year old

Further affiant sayeth naught.

s, John V. Vaquilar

JOHN V. VAQUILAR

Subscribed -nd sworn to bef. i

mber, 1972. ore me this 19th day of

s, Tomiki Sakai

Notary Public

First Judicial Circuit

State of Hawaii

My commission expires: 11-14-75

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

[Filed Jan. 9, 1973]

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF RAYMOND GAINES

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU )

RAYMOND GAINES, being first duly sworn on oath,

deposes and says:

1. That he resides at 143-A Prospect Street, Hono-

lulu, Hawaii.

2. That he is sixty-two years old and is and has been

eligible for social security old age benefits of $125.00

since December 1971.

3. That in October 1972, his check for $125.00 did

not arrive, nor has any money from social security been

forthcoming since October 1972.

4. That on or about November 16, 1972, he contacted

the Honolulu District Office, which called Baltimore,

Maryland, to clarify the reasons for terminating his

benefits.

5. That said District Office told him that he might be

receiving a check in December.

6. That prior to termination of his check he has

never received no notification by letter or personal visita-

tion informing him of the reasons for termination, if any,

nor has he been given an opportunity for a hearing as to

any issue concerning termination of his benefits.

Further affiant sayeth naught.

s, Raymond Gaines

RAYMOND GAINES

Subscribed and sworn to before me this 26th

Dec., 1972. *

/8/ Gladys L. Kim

Notary Publie

First Judicial Circuit

State of Hawaii

My commission expires: 11-26-75

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

[Filed Jan. 11, 1973]

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF ISABELLE ORTIZ

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU )

ISABELLE ORTIZ, being first duly sworn on oath,

deposes and says:

1. That she resides at 84-937 Hana Street, Waianae,

Hawaii.

2. That she is sixty-six years old and has been and

is eligible to receive social security old age benefits

(OASDI).

3. That she first became eligible to receive OASDI in

May 1971 when she became sixty-five years old.

4. That in May 1971 she retired from her job at Pearl

Harbor Naval Base and began receiving OASDI bene-

fits of $70.40 beginning in June 1971.

5. That in approximately February 1972, she received

a letter from the Social Security Administration stating

that an overpayment had been made, and that she owed

the Administration $492.80 for an overpayment.

6. That she contacted the Waipahu Branch Office, but

could not get any information about the reasons for said

recoupment.

7. That she depends upon her OASDI benefits for

survival.

— ee eT ee

_ 8. That neither the Branch Office nor the said letter

informed her of her rights to come forward with evi-

dence, her right to waiver of fault, or her right to have

a reconsideration.

9. That, as a consequence of the said recoupment, her

benefits were cut off completely from M

October, 1972. 8 arch through

Further affiant sayeth naught.

/8/ Isabelle Ortiz

ISABELLE ORTIZ

Subscribed and sworn to before me this 2

December, 1972. «„

/s/ [Illegible]

Notary Public

First Judicial Circuit

State of Hawaii

My commission expires: 12-2-74

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF HAWAII

Civil No. 72-3629

Filed Feb. 15, 1973

EVELYN ELLIOTT, ET AL., PLAINTIFFS

v8.

ELLIOT L. RICHARDSON, ET AL., DEFENDANTS

AFFIDAVIT OF JORDAN A. SILVA

STATE OF HAWAII )

) ss.

CITY AND COUNTY OF HONOLULU )

JORDAN A. SILVA, being first duly sworn on oath,

deposes and says:

1. That he resides at 3366 Keanu Street, Honolulu,

Hawaii.

2. That he was born on February 22, 1902, and is

seventy years old.

3. That he first became eligible to receive social se-

curity old age benefits in 1964.

4. That until June 1972 he was receiving approxi-

mately $99 per month.

5. That in June 1972 his social security old age bene-

fits were cut off without notice or opportunity for a

hearing.

6. That he called the District Office and was informed

that social security administration was probably trying

to recoup an overpayment, that said overpayment may

have occurred because he allegedly earned more than

$1680 in 1971, and that his checks would be continued

after about two months.

7. That his social security checks have never been re-

sumed, and he has been deprived of benefits continuously

since June 1972.

8. That there is an issue of fact as to how much in-

come he actually earned in 1971-1972.

9. That said letter of recoupment stated that his bene-

fits would be suspended until the alleged overpayment is

recovered by the Administration.

10. That his benefits will be suspended for approxi-

mately sixteen months.

11. That although he has a part-time job as a janitor

at the Bank of Hawaii, he does not know whether he will

be able to work much longer.

12. That he depends upon his social security old age

benefits to help support himself and his wife.

Further affiant sayeth naught.

/s/ Jordan A. Silva

JORDAN A. SILVA

Subseribed and sworn to before me this 14th day of

February, 1972.

8, Tomiki Sakai

Notary Public

First Judicial Circuit

State of Hawaii

My commission expires: 11-14-75

111 ˙ w W W tii iii ail

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3639

EVELYN ELLIOTT, BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

ELLIOT L. RICHARDSON, Secretary Department of

Health, Education, and Welfare, DEFENDANT

AFFIDAVID OF BERNARD POPICK

BALTIMORE COUNTY )

) ss

STATE OF MARYLAND )

I, Bernard Popick, being duly sworn, depose and say as

follows:

1) I am the Director of the Bureau of Disability In-

surance of the Social Security Administration, Depart-

ment of Health, Education, and Welfare.

2) The Bureau of Disability Insurance is located in

Baltimore, Maryland. It provides direction for the na-

tionwide administration of the disability insurance pro-

gram. It is charged with the responsibility of review-

ing initial disability determinations made by State

Agencies, making reconsideration determinations on dis-

ability claims which have been initially disallowed, main-

taining disability claims and benefit accounts and related

processing controls, and certifying disability benefit pay-

ments. The Bureau of Disability Insurance also makes

overpayment determinations in disability cases and in

such cases determines whether recovery of an overpay-

ment should be waived pursuant to 42 U.S.C. 404(b).

3) In connection with my official duties I have custody

of the claims folder of the plaintiff, Evelyn Elliott,

(hereinafter referred to as the plaintiff), pertaining to

her claim for disability insurance benefits, based on her

social security earnings record. The plaintiff’s disability

claims folder also contains pertinent data on the plain-

tiff’s claim for retirement insurance benefits. My ex-

amination of this folder reveals the following.

4) On May 25, 1970 the plaintiff filed an application

for reduced retirement insurance benefits payable be-

ginning at age 62 pursuant to 42 U.S.C. 402(a). On or

about June 15, 1970 the Administration awarded the

plaintiff retirement insurance benefits at the rate of

$141.40 a month, effective beginning in August 1970,

the month the plaintiff attained age 62. The monthly

benefit rate was later increased to $156.10, effective in

January 1971, due to legislation raising the monthly

benefit amount. |

5) Subsequently, on April 20, 1971, the plaintiff filed

an application for disability benefits payable under 42

U.S.C. section 423. The Administration awarded dis-

ability insurance benefits to the plaintiff on July 13, 1971.

This award was effective beginning with the month of

May 1970, based on a finding that disability had com-

menced on October 30, 1969.“ The plaintiff’s disability

benefit rate was $179.40 a month from May, 1970 through

December 1970. It was increased to $197.40 a month

effective in January 1971, due to legislation increasing

the monthly benefit amount.

6) Section 202(k) (4) of the Social Security Act, 42

U.S.C. 402(k) (4), provides that any individual who is

entitled for any month to both a retirement insurance

benefit and a disability benefit shall be entitled only to

the larger of such benefits for such month, except that,

if such individual so elects, he shall instead be entitled

to only the smaller of such benefits for such month. Un-

der this section the plaintiff Evelyn Elliott, having been

simultaneously entitled to both retirement insurance bene-

fits and disability benefits for months beginning with

August 1970, was entitled to receive only the larger of

142 U.S.C. 423(a)(1) provides that entitlement to disability

insurance benefits begins six full months after the onset of dis-

ability.

Pinan

the two benefits, i.e., the disability benefit, for all months

in which the simultaneous entitlement continued.

7) The Administration advised the plaintiff of the

award of disability benefits in a letter to her dated

August 13, 1971. This letter informed the plaintiff of the

amount of the monthly disability benefit, and further

advised her:

“This disability benefit replaces the monthly retire-

ment benefit you were previously receiving. Your

next monthly check will include all disability bene-

fits due you less the payments you have already re-

ceived. Thereafter, you will receive your regular

monthly payments.”

8) On August 12, 1971 the Administration sent the

plaintiff a check for $1,214.70. This check, which was

the “next monthly check” referred to in the letter quoted

in the previous paragraph, represented back disability

benefits due for the months of May 1970 through August

1971 ($3,014.40) minus the total amount of the retire-

ment insurance benefits which the plaintiff had received

for the months of August 1970 through July 1971

$1,799.70). This was consistent with 42 U.S.C. 402(k)

(4), permitting payment of only the disability benefit

for months during which the plaintiff was entitled to both

retirement insurance benefits and disability insurance

benefits.

9) A record in the claims folder dated August 3, 1971

indicates that as of that date the Administration was

aware of the plaintiff’s simultaneous entitlement to both

retirement insurance benefits and disability insurance

benefits, and that on that date the Administration’s op-

erating personnel were directed to terminate payments

of retirement insurance benefits, consistent with 42 U.S.C.

402 (k) (4). However, apparently due to an error, ter-

2 It appears that the Administration was aware of the simultan-

eous entitlement despite the fact that on her disability application

of April 20, 1971 the plaintiff incorrectly answered: “No” to the

question: “Have you (or has someone on your behalf) ever filed an

application for a period of disability or social security benefits

before?”

mination of retirement insurance benefits was not ef-

fectuated at this time, and payment of retirement insur-

ance benefits continued for the months of August 1971

through February 1972.

10) In March 1972 the Administration discovered

through a “systems alert” that is, a computed generated

message designed for this purpose, that the termination

action attempted on August 3, 1971 had not been ef-

fectuated. The Administration then examined the claims

folder of the plaintiff and noted that she had received

retirement benefit payments in addition to her disability

benefits for the months of August 1971 through Feb-

ruary 1972. The Administration therefore determined

that the plaintiff had been overpaid for seven months at

$156.10 a month, totalling $1,092.70.

11) On March 13, 1972 the Administration stopped

payment of the plaintiff’s retirement benefits beginning

with the month of March 1972.“ Payment of disability

benefits was not stopped at this time.

12) On or about March 16, 1972 the Administration’s

Bureau of Disability Insurance forwarded to the Social

Security District Office in Honolulu a letter to the plain-

tiff, and directed that the District Office personally de-

liver it to the plaintiff. This letter advised the plaintiff

that her disability benefits would be withheld to recoup

the overpayment of retirement benefits in the amount of

$1,092.70. This letter stated in full as follows:

“Our records show you received $1,092.70 more in

social security benefits than you should have. This

amount represents retirement insurance benefits paid

to you for August 1971 through February 1972 at

$156.10 per month. No retirement insurance bene-

fits were payable to you after July 1971 as you be-

came entitled to disability payments.

If you believe that this determination is not correct,

you may request that your case be reexamined. If

This action was effective in April 1972, that is, April was the

first month that retirement benefits were not actually paid. Social

Security benefits for which an individual is entitled in a given

month are actually payable in the following month.

you want this reconsideration, you must request it

not later than 6 months from the date of this notice.

You may make any such request through any social

security office. If additional evidence is available,

you should submit it with your request.

To recover the overpayment, we shall withhold your

benefits beginning with the check you would normally

receive in June 1972. The next check that you will

receive after the full overpayment has been with-

held will be for $91.70. It will be sent to you about

Nov. 3, 1972. Thereafter, your regular monthly

benefits of $197.40 will be resumed.

Under social security law, any overpayment must

be withheld from benefits or paid back unless both

of the following are true:

1. The overpayment wasn’t your fault in any

way and you cashed the check(s) because you

thought they were correct, and

2. You couldn’t meet your necessary living ex-

penses if you had to pay back the overpayment

or have it withheld from your social security

benefits; or it would be unfair for some other

reason.

To decide whether repayment would cause you finan-

cial hardship, we shall need a statement of your

assets, and monthly income, and expenses. If you

think you meet both conditions, call, write, or visit

any social security office within 30 days from the

receipt of this letter. Please take this letter with you

if you visit the office. Unless we hear from you

within 30 days, we shall withhold benefits as indi-

cated above.” (Emphasis original)

13) Administrative records in the claim folder indi-

cate that the letter referred to in the preceding para-

graph was personally delivered to the plaintiff’s home on

April 28, 1972. The record also reflects that since the

plaintiff was not home at the time, the letter was left

with the plaintiff’s sister-in-law.

14) On May 24, 1972, the Bureau of Disability Insur-

ance mailed the plaintiff another letter again advising

her that her disability benefits would be withheld for

the months of May 1972 through September 1972 and

part of October 1972 to recover the overpayment of

$1092.70.

15) The Administration’s action to recover the over-

payment to the plaintiff was effective in June 1972; that

is, the first disability insurance payment to be withheld

to recover the overpayment was the payment which would

normally have been received on or about June 3, 1972.

16) In a letter to the Administration dated June 27,

1972 the plaintiff stated in part: “I am sorry about the

misunderstanding and error which gave me an overpay-

ment on my social security. I wish to repay the overage

sic!.“ The plaintiff then stated in this letter that

withholding her entire benefit check would cause her

hardship. She requested the Administration to withhold

$50.00 a month rather than the entire benefit check.

17) Administration records show that on July 3, 1972

Mr. Stan Levin, an attorney representing the plaintiff,

contacted the Honolulu District Office concerning the Ad-

ministration’s overpayment action in the plaintiff’s case.

At that time Mr. Levin requested that benefit payments

to the plaintiff be resumed immediately; however no

request for waiver or reconsideration was filed at that

time. Mr. Levin was given the appropriate forms (the

“Refund Questionnaire” and the “ ‘Without Fault’ Ques-

tionnaire”) for supplying the information to establish a

basis for waiver of recovery of the overpayment. Mr.

Levin apparently advised Administration personnel at

that time that he would arrange to have the plaintiff

— these forms and would mail them to the District

ce.

18) On or about August 4, 1972 the plaintiff requested

reconsideration of the Administration’s overpayment de-

termination. She stated as her reason for this request:

“I merely received notification that there had been an

overpayment of disability benefits. I do not know why

there had been an overpayment and have never had a

chance to find out why. I would like to have a hearing

on this matter.” In addition on August 4, 1972 the

plaintiff requested that the Administration waive recov-

ery of the overpayment. In support of the request for

waiver the plaintiff filed a Without Fault’ Question-

naire” and a “Refund Questionnaire” explaining her

financial status. In the “ ‘Without Fault’ Questionnaire”

the plaintiff stated that she accepted the full payment

of both disability insurance benefits and retirement in-

surance benefits because she believed she was entitled to

both payments. Also on August 4, 1972, the plaintiff re-

quested an evidentiary hearing on the overpayment de-

termination to be conducted by an administrative law

judge pursuant to 20 C.F.R. 404.917. She stated as her

reason for this request: “I have never hd a chance to

dispute the cutoff of my benefits and do lieve that

my whole check (or even part of it) be taken

pending a hearing. I think Soc. Sec. has the burden of

proving I am not entitled to benefits.”

19) The claims folder contains a letter dated Au-

gust 9, 1972, received in the Honolulu District Office

August 10, 1972, from Peter A. Lee of the Legal Aid

Society of Hawaii. In this letter Mr. Lee stated that the

plaintiff had received a letter on April 28, 1972 hand-

delivered by an agent of the Social Security Administra-

tion, advising her of the Administration’s intent to recoup

an alleged overpayment. Mr. Lee’s letter further stated

that the plaintiff had apparently lost the letter which had

been delivered to her on April 28, and requested the Ad-

ministration to send him a copy of the letter.

20) In a written notice to the plaintiff dated Ar-

gust 10, 1972 the Administration advised the plaintiff

that in accordance with her request for partial rather

than full withholding of her disability benefits, only

$50.00 a month would be withheld from benefits due for

the months of May 1972 through January 1974. This

notice further advised the plaintiff that $42.70 would be

withheld from the benefit due for February 1974; and

that effective with the benefit payable for the month

of March 1974, her regular monthly benefit of $197.40

would be resumed. This notice also advised the plaintiff

that she would shortly be sent a check for $442.20, rep-

resenting benefits due her through July, 1972—i.e., that

the May, June, and July benefits which previously had

been fully withheld were being reinstated minus $50.00

withheld for each of those months. ($197.40—$50.00 for

three months).

21) On or about August 10, 1972 the Administration

issued the plaintiff a check for $442.20, in accordance

with its notice to her of August 10, 1972.

22) The plaintiff filed this civil action on August 17,

1972, before the Administration could act on her request

for waiver or recovery of the overpayment. At a hearing

before this court on August 25, 1972, it was agreed that

the Secretary would reinstate all social security disability

benefits which had been withheld from the plaintiff to

recoup the overpayment, and that the Secretary would

continue to pay the plaintiff her full disability benefits as

they come due, without further recoupment, pending the

— | ag mae of this civil action.

) On August 29, 1972, pursuant to the agreement

described in the preceding paragraph, the Administration

reinstated to the plaintiff all disability benefits which had

been withheld for the months of May 1972 through Au-

gust 1972 to recoup the overpayment to the plaintiff.

Accordingly the Administration at that time issued to the

plaintiff a check for $200.00 (4 x $50.00) covering this

amount. The Administration has resumed payment of

the plaintiff’s full monthly disability benefits as they

come due,* and will continue to make such payments

pending the court’s disposition of this civil action. Ad-

ministrative action on the plaintiff’s request for recon-

sideration and a hearing have been deferred pending this

Department’s preparation of the defense of this civil

action and the court’s disposition of this matter.

24) On January 14, 1971 the Commissioner of the

Social Security Administration approved a policy whereby

in any case where Title II social security benefits are

»The full amount of the monthly disability benefit bein id to

the plaintiff is now $236.90. The benefit amount has been A ned

due to recent amendments to the Social Security Act.

withheld to recover an overpayment the beneficiary must

be advised (at the time he is notified of the Administra-

tion’s action) of his right to request reconsideration by

the Administration of overpayment determination and of

the provisions of the Act (42 U.S.C. 404(b)) providing

for waiver of recovery of the overpayment in certain

specified cases. This policy is also now set forth in the

Social Security Regulations: 20 C.F.R. sections 404.502a

and 404.907 (37 Federal Register, May 25, 1972). In

May 1971 this policy was incorporated into section

5503(a) of the Social Security Claims Manual, which

contains instructions to operating personnel as to the

processing of social security claims. The pertinent portion

of Claims Manual section 5503(a) reads as follows:

“When it is determined that an incorrect payment has

been made, the person liable should be notified in

writing (see § 5508 for sample letters). The notice

will inform the person of:

“(1) The incorrect payment made, how, and when it

occurred. (If the overpayment resulted from the

entitlement of another beneficiary, the adversely

affected individual(s) must be informed of the name,

relationship to the WE, and basis for entitlement of

the new beneficiary. )

“(2) The right to request reconsideration of the

overpayment determination.

“(3) The required recovery.

“(4) The proposed adjustment or the demand for

repayment where adjustment is not possible.

“(5) The waiver provisions of the law (Social Se-

curity Act, secs. 204(b) or 1870(c)).

“(6) The availability of partial adjustment or par-

tial refund.

“(7) The need to notify the DO promptly if he feels

that the circumstances in this case would justify

waiver, partial adjustment, or partial refund.”

Section 5503(a) also provides for personal delivery of

this notice to the beneficiary in all cases where a disabled

beneficiary or any member of his family living in his

household is overpaid, regardless of the number of month-

ly benefits involved. Section 5503 (a) also provides as a

general rule for personal delivery of the notice in non-

disability cases where the overpayment is large (ex-

ceeding equivalent of six months’ benefits) and the bene-

— does not have reason to know about the overpay-

ment.

25) Section 5503 (a) provides (with two exceptions not

pertinent in the case of the plaintiff Evelyn Elliott) that

the Administration must give the beneficiary advance

notice of action to recover an overpayment, and an op-

portunity to contest the correctness of such action. The

pertinent part of 5503(b) is as follows:

“Before we start to adjust the overpayment against

the benefits due a beneficiary, he or his payee will

normally be given reasonable opportunity to contest

the correctness of the determination or to establish

that a basis exists for waiver or partial adjustment.

The notice to the beneficiary will advise him that ad-

justment will be deferred 30 days. However, actual

adjustment may at the discretion of the reviewing

office be extended to a longer period when the facts

in a given case, including but not limited to time

case is being worked, cutoff dates, mailing time, ete.,

indicate that a 30-day period would be inadequate for

consideration of the matter and reply by the bene-

ficiary and reviewing office processing time.”

26) Section 5503 (e) of the Social Security Claims

Manual provides in pertinent part:

“If the person responds raising some question about

the correctness of the determination of overpayment,

or raises a question about recovery, waiver or partial

adjustment, the DO will obtain the necessary evi-

dence and prepare a recommendation to the review-

ing office for disposing of the case. Thus, if the per-

son liable requests reconsideration of the substantive

determination and it appears that the determination

will be affirmed, the DO will develop the possibility

of waiver of adjustment or recovery of the over-

payment at the same time it receives evidence to

resolve the request for reconsideration. This is

necessary since, if the substantive determination is

affirmed the Reconsideration Determination will

cover both issues (§ 8737).

„Where reconsideration of the overpayment determi-

nation, waiver, or partial adjustment development is

initiated, withholding to recoup the overpayment will

be further deferred and payment will be continued

until development has been completed, if the bene-

ficiary is otherwise entitled to benefits. If develop-

ment will not be completed before the expiration of

the 30-day period, the DO will utilize teletype to ad-

vise the reviewing office.” (Empasis original)

The effect of the foregoing provisions of Claims Manual

section 5503(c) when a beneficiary questions the correct-

ness of the overpayment determination, is to delay any

recoupment of an overpayment until there has been a

reconsideration determination of the overpayment de-

termination and an initial determination with respect to

waiver.

27) As demonstrated in paragraph 12, supra, the Ad-

ministration’s notice to the plaintiff complied with the re-

quirements of Claims Manual Section 5503 set forth in

paragraphs 24-26, supra, in every respect except that the

plaintiff was not notified of the possibility of partial ad-

justment. As paragraph 13, supra demonstrates, this

notice was personally delivered to her home on April 28,

1972, which was over 30 days before the Administration

took action to recover the overpayment by withholding

the plaintiff’s disability benefits. The plaintiff was af-

forded the requisite advance notice of the Administra-

tion’s proposed action, and was advised of her right to

reconsideration and to establish that she qualified for

waiver, and was informed that she should contact the

Administration within 30 days if she wished to question

the Administration’s proposed action. However, as shown

in paragraph 16, supra, the plaintiff did not contact the

Administration until June 27, 1972, almost two months

after she received the notice, and almost a month after

the Administration had stopped her benefit payments.

When the plaintiff finally did contact the Administration

on June 27, 1972 she did not protest the overpayment

determination in any manner, nor did she ask for waiver;

on the contrary she stated that she wished to repay the

overpayment. She asked for partial rather than full ad-

justment of her benefit payments. Five weeks later the

Administration granted this request restoring to her all

benefits previously withheld which had exceeded the

partial adjustment requested by the plaintiff. See para-

graphs 20-21. The plaintiff did not request reconsidera-

tion or waiver of recovery of the overpayment until

August 4, 1972. The Administration was continuing to

recoup the overpayment at the rate of only $50 a month,

as requested and authorized by the plaintiff, at the time

this civil action was filed on August 17, 1972.

28) Sections 404.901 et seq. of Social Security Admin-

istration Regulations No. 4, 20 C.F.R. 404.901 et seq. set

forth a four-step administration process including an

initial determination, (section 404.905 of Social Security

Administration Regulations No. 4, 20 C. F. R. 404.905) ; a

reconsidered determination (section 404.914 of Social Se-

curity Administration Regulations No. 4, 20 C. F. R.

404.914) ; an administrative hearing de novo before an

independent administrative law judge (section 404.917

of Social Security Administration Regulations No. 4, 20

C.F.R. 404.917) ; review by the Appeals Council of the

Social Security Administration, (section 404.945 of Social

Security Administration Regulations No. 4, 20 C.F.R..

404.945). After exhaustion of these administrative reme-

dies section 205(g) of the Act, 42 U.S.C. 405(g) pro-

vides for judicial review.

29) Section 205(1) of the Social Security Act, 42

U.S.C. 405(1) authorizes the Secretary to delegate his

powers under Title II as follows:

“The Secretary is authorized to delegate to any mem-

ber, officer, or employee of the Department of Health,

Education, and Welfare designated by him any of

the powers conferred upon him by this section, and

is authorized to be represented by his own attorneys

in any court in any case or proceeding arising under

the provisions of subsection (e).”

30) The Secretary has delegated the responsibility for

administering the social security program under Title Ji

to the Commissioner of the Social Security Administra-

tion. 33 FR 5836, April 16, 1968. This authority may be

redelegated. 33 FR 5837, April 16, 1968.

31) There are six regional Payment Centers of the

Social Security Administration located in New York,

Philadelphia, Chicago, Birmingham, Kansas City, and

San Francisco. The six regional Payment Centers are

charged with the responsibility of rendering initial and

reconsideration determinations in claims for dependents,

retirement, and survivors insurance benefits, determining

continuing eligibility, maintaining claims and benefit ac-

counts and related processing and accounting controls,

and certifying benefit payments. As noted in paragraph

2 above, the Bureau of Disability Insurance in Baltimore

has comparable responsibilities with respect to disability

claims. The Social Security Administration Payment

Centers (including the Bureau of Disability Insurance’s

Payment Center in Baltimore) have over 13,000 em-

ployees and have responsibility for the final adjudication

and certification of benefits totaling over 31 billion dol-

lars a year to approximately 27 million retirement, sur-

vivors and disability beneficiaries. 33 FR 5835, April 16,

1968.

32) The Reconsideration Branch in each of the six re-

gional Payment Centers has responsibility for determi-

ning in retirement, survivors, and dependents claims,

whether an overpayment has been made and whether

waiver would be applicable. Where a disbility claim is

involved, the Division of Continuing Entitlement and the

Division of Benefit Payments in the Bureau of Disability

Insurance’s Payment Center determines whether an over-

payment of disability benefits has been made; the waiver

determination is made by the Bureau of Disability Pay-

ment Center’s Division of Reconsideration. The various

offices are composed of employees specially trained to

handle the issues which arise in these types of cases. The

Payment Centers maintain complete files of legal and

administrative precedents dealing with these questions,

so that each Payment Center has available to it the ma-

terials necessary for proper and expeditious adjudication.

33) In fiscal 1969, 3,195,515 claims for retirement,

dependent, and survivors claims were processed. Of these,

2,951,780 claims were allowed initially and 243,735 were

disallowed. There were 37,867 requests for reconsidera-

tion and of these 24,906 were allowed (mostly on the

basis of newly submitted evidence) and 12,961 were again

disallowed. There were 3,252 requests for hearing.

34) In fiscal 1971, 950,571 disability claims were proc-

essed. Of these, 393,464 were allowed initially and

557,107 were denied initially. There were 127,801 re-

quests for reconsideration processed in disability cases,

and of these claims 48,216 were allowed (mostly on the

basis of newly submitted evidence) and 79,585 were again

denied. There were 39,800 requests for a hearing in

disability cases.

35) In 1969 there were 2,860,287 termination actions

and approximately 320,444 suspension actions were taken

in retirement, dependent and survivors cases. Excluding

terminations for death, attainment of age 18, 22 or 65,

withdrawal of application and entitlement to equal or

larger benefits, the remaining terminations in 1969 were

515,189. In 1971 the Administration made 38,000 initial

determinations that disability had ceased.

36) The Social Security Administration has made the

following estimates with respect to overpayments:

(a) In 1970 there were overpayments in approxi-

mately 1,250,000 cases.

(b) Of these 1,250,000 overpayments there were

requests for reconsideration in approximately 12,000

cases.

(e Of the 12,000 reconsideration determinations

with respect to overpayments there were approxi-

mately 8,250 reversals and approximately 3,750 af-

firmances.

(d) Of the 3,750 reconsideration affirmances with

respect to overpayments there were requests for

hearing in approximately 1,600 cases.

(e) Of the 1,600 cases that went to hearing with

respect to overpayments there were reversals in ap-

proximately 560 cases and affirmances in 1,040 cases.

37) From July 1, 1970 through May 31, 1971 the total

number of overpaid cases in the old-age, survivor’s and

disability insurance program where overpayments could

not be waived and whose accounts were determined by

the Administration to be uncollectable was 22,162. The

total amount of money lost to the Retirement and Sur-

vivor’s Trust Fund and to the Disability Trust Fund that

year due to unrecovered overpayments was $5,784,039.

The Social Security Administration estimates that less

than half of erroneous overpayments are recovered.

/s/ Bernard Popick

BERNARD POPICK,

Director

Subseribed and sworn to before me

this 12th day of December 1972.

/s/ Dorothy H. Lamont

Notary Public

My Commission expires July 1, 1974

—̃ —ꝛͤꝛĩ ͤ ͤ ’ ¶—*—— ã— —

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

ELLIOTT L. RICHARDSON, Individually and in his capacity

as Secretary, United States, Department of Health,

Education, and Welfare; and SUNG DAI Su, Individ-

ually and in his capacity as Pacific Area Manager,

Social Security Administration, Department of Health,

Education, and Welfare, DEFENDANTS

AFFIDAVIT OF BERNARD POPICK

BALTIMORE COUNTY T)

) ss.

STATE OF MARYLAND )

I, Bernard Popick, being duly sworn, depose and say

as follows:

I am the Director of the Bureau of Disability Insur-

ance of the Social Security Administration, Department

of Health, Education, and Welfare, which has the re-

sponsibility for the nationwide administration of the

disability insurance program under Title II of the Social

Security Act. The Bureau of Disability Insurance de-

termines policies applicable to the administration of the

disability program, reviews initial determinations of dis-

ability claims rendered by State Agencies in accordance

with agreements entered into pursuant to 42 U.S.C. 421,

and upon request by the claimant will undertake recon-

sideration determinations of disability claims which have

been initially disallowed. Where a disability beneficiary

or dependent entitled to benefits may have been overpaid,

the Baltimore Disability Payment Center renders de-

terminations regarding overpayments in such cases and

upon request of the beneficiary will determine whether

recovery of an overpayment may be waived pursuant to

section 204(b) of the Social Security Act, 42 U.S.C.

404(b).

In connection with my official duties I have custody

of the claims folders of Raymond Gaines, Umeyuki

Taniguchi, Hiroko Shimabukuro, Carl and Nancy Yama-

saki and Lorraine Robinson, who have filed affidavits with

the court on their behalf. My examination of their fold-

ers reveal the following:

I. Raymond Gaines

(1) Raymond Gaines, born January 6, 1910, initially

filed an application on November 18, 1971, for retire-

ment insurance benefits under section 202(a) of the

Social Security Act, 42 U.S.C. 402(a). Such benefit en-

titlement was established for Mr. Gaines in the amount

of $73.60 monthly effective January 1972 upon his attain-

ment of age 62.

(2) Mr. Gaines thereafter filed an application for dis-

ability insurance benefits on February 25, 1972, alleging

disability from June 6, 1971. On the basis of this appli-

cation he was found entitled to a period of disability

beginning September 15, 1971. Where a beneficiary be-

comes simultaneously entitled to disability benefits and

retirement benefits, pursuant to section 202 (Kk) (4) of

the Act, 42 U.S.C. 402(k) (4), he may be paid only the

larger of the two for any month. Accordingly, Mr.

Gaines was awarded disability insurance benefits of

$104.20 monthly effective April 1972 (following a six

month waiting period after onset of disability pursuant

to section 223 (e) (2) of the Act, 42 U.S.C. 423(c) (2)).

Mr. Gaines’ disability monthly rate was increased to

$125.40 effective September 1972 in accordance with

legislative enactment.

(3) On November 14, 1972, Mr. Gaines’ October 1972

disability benefit check payable on November 3, 1972,

was returned on the basis of an incorrect address. To

decrease the incidence of lost checks and to ensure that

checks are timely received as possible by proper bene-

ficiaries, when a check is returned to the Administration

as undeliverable, the centralized computer system of the

Social Security Administration will automatically suspend

benefit payments pending an investigation to ascertain

the beneficiary’s correct address. Because of the return

of Mr. Gaines’ October check, further payments were so

suspended.

(4) Mr. Gaines contacted the Honolulu Social Security

District Office inquiring of his check payable October

1972. In response to this inquiry, on December 18, 1972,

action was taken to issue an “one check only” payment

of $250.80 to Mr. Gaines in substitution of the checks

payable in October and November 1972. This action

was manually prepared by the Baltimore Disability Pay-

ment Center so that payment could be expedited and that

check was sent to him at his correct address on December

22, 1972. By a manual procedure Mr. Gaines was also

placed on a continuing pay status effective January 1973

and his December 1972 benefit was paid to him by a check

issued on January 3, 1973.

(5) While the manual actions described in paragraph

4 above were being undertaken to respond to plaintiff’s

request that his benefit payments be resumed, on January

4, 1973 the Honolulu, Hawaii District Office submitted

a change of address for the wage earner to the Baltimore

Disability Payment Center which, by machine processing,

automatically generated resumption of Mr. Gaines’ previ-

ously suspended benefits and a check for $376.20 issued

on January 9, 1973 representing benefits for October

through December 1972. Because of such manual and

automatic processing, Mr. Gaines received duplicate

payments for October, November and December 1972

giving rise to an overpayment of $376.20.

(6) The “one check only” payment of $250.80, issued

as a result of manual processing on December 18, 1972,

was returned to the Administration by Mr. Gaines on

February 6, 1973. Because it was not discerned at the

Payment Center that a duplicate payment check was re-

turned rather than a properly issued check being unde-

livered, a similar check was reissued by machine process-

ing on February 8, 1973 to Mr. Gaines’ current address.

Consequently, no part of the overpayment was then re-

covered.

(7) On February 12, 1973, Mr. Gaines was notified

by letter of the overpayment which had been caused by

the duplicate payments. At that time he was also ad-

vised of the proposed recovery of this overpayment and

advised that his future benefit payments would be ad-

justed to recoup the overpayment if he did not respond

to the overpayment determination within 30 days. He

was further advised of his right to seek reconsideration

of the overpayment determination by filing a request

therefor within 6 months, and of his right to receive

consideration for waiver. This letter reads as follows:

Our records show you received $376.20 more in social

security benefits than you should have. You have

received duplicate payments of $125.40 for October

through December 1972.

If you believe that this determination is not correct,

you may request that your case be reexamined. If

you want this reconsideration, you must request it

not later than 6 months from the date of this notice.

You may make any such request through any social

security office. If additional evidence is available,

you should submit it with your request.

To recover the overpayment, we shall withhold your

benefits beginning with the check you would normally

receive in June 1973. The next check you will re-

ceive after the full overpayment has been withheld

will be for $125.40. It will be sent to you about

September 8, 1973. Thereafter, your regular month-

ly benefits of $125.40 will be resumed.

Under social security law, any overpayment must be

withheld from benefits or paid back unless both of

the following are true:

1. The overpayment wasn’t your fault in any way

and you cashed the check(s) because you thought

they were correct, and

2. Lou couldn't meet your necessary living expenses

if vou had to pay back the overpayment or have

it withheld from your social security benefits; or

it would be unfair for some other reason.

To decide whether repayment would cause you finan-

cial hardship, we shall need a statement of your

assets, and monthly income and expenses.

If you think you meet both conditions or if with-

holding the entire amount of your monthly benefit

will cause you financial hardship, call, write, or visit

any social security office within 30 days from the

receipt of this letter. Please take this letter with you

if you visit the office. Unless we hear from you with-

in 30 days, we shall withhold benefits as indicated

above.

(8) Mr. Gaines has not yet responded to the letter of

February 12, 1973, nor requested reconsideration or

waiver and has not submitted additional evidence on his

behalf. Under existing procedures Mr. Gaines’ benefits

are now subject to recoupment of the overpayment as

indicated in the letter set out in paragraph 7. Because

Mr. zaines is now involved in this pending court action,

Mr. Gaines has been continued in payment status with

recoupment of the overpayment deferred.

II. Umeyuki Taniguchi

(1) With respect to an application filed May 29, 1968,

entitlement to a period of disability waseestablished for

Umeyuki Taniguchi beginning April 18, 1968 due to

cervical dise degeneration. He and his family (for whom

applications were also filed) received monthly benefit pay-

ments of $307.20 effective November 1968 (following a

six month waiting period after onset of disability pur-

suant to section 223 (e) (2) of the Act, 42 U.S.C.

423 ( c) ( 2) ). By legislative amendments the total month-

ly disability benefit level to Mr. Taniguchi and his family

increased to $353.70 effective January 1970; increased to

$389.20 effective January 1971; increased to $467.10 ef-

fective September 1972. The increased levels for Mr.

Tanigcuhi and his family have not yet been computed

with respect to the Social Security Amendments of 1972

(P.L. 92-603).

(2) On February 12, 1970 Mr. Taniguchi reported to

the Administration that beginning December 16, 1969

that he had been awarded temporary workmen’s com-

pensation, in connection with his disability, in the sum

of $92.30 weekly ($92.30 x 4.33 — $399.77 monthly).

Section 224 of the Social Security Act, 42 U.S.C. 424,

requires that disability insurance benefits be reduced in

accordance with the formulae contained therein on the

basis of a beneficiary receiving workmen’s compensation

benefits. On March 30, 1970 disability benefit payments

of $353.70 monthly to Mr. Taniguchi and his family were

reduced to $71.40 monthly. Effective January i971 the

monthly disability benefit to Mr. Taniguchi and his fam-

ily increased by $35.50 by legislative enactment raising

the total payable to $106.96 monthly.

(3) On September 8, 1972, the Fireman’s Fund

American Insurance Company reported to the Social Se-

curity Administration that Mr. Taniguchi had been

awarded a final workmen’s compensation settlement of

$25,000 effective June 23, 1972.

(4) On October 24, 1972 Mr. Taniguchi and his family

were sent letters advising that their benefits had not been

properly adjusted since July 1969 in light of Mr. Tani-

guchi having received workmen’s compensation payments

of $92.31 weekly since that time, and which was in-

creased to $103.71 weekly effective July 1972. Upon re-

vision of social security benefit rates payable since July

1969 with respect to Mr. Taniguchi’s receipt of work-

men’s compensation since that time, they had been found

to have been overpaid a total of $572.20 (Mr. Taniguchi

$49.00 and his wife and two children $174.40 each).

They were further advised at that time that an adjust-

ment was made for the correct monthly benefit amount

to be made payable. Recovery of the overpayment which

had occurred would begin with the check that would

otherwise be payable in February 1973. Mr. Taniguchi

and his family were further advised of their appeal

rights of reconsideration, waiver, and a 30 day period

within which to respond and submit evidence so that

benefits would not be withheld for recoupment (Exhibits

A and B).

(5) On December 4, 1972 Mr. Taniguchi furnished a

statement to the Honolulu Social Security District Office

saying: “If I must repay this overpayment ($572.20)

please withhold only $50 a month total from our total

— I need the balance of our family payments to

ive on.”

(6) A further review of Mr. Taniguchi’s claims folder

in February 1973 revealed that an incorrect computation

of his 1962 earnings was made which resulted in an

accrued underpayment since July 1969 totalling $1,542.40.

(7) On March 5, 1973 Mr. Taniguchi was advised by

letter of the underpayment and that he would be sent

a check for $1,542.40 shortly. Revised social security

benefit rates payable in light of such error were also

furnished with regard to which the underpayment was

arrived at. Mr. Taniguchi was advised as follows: “Due

to a processing error, the amount of social security bene-

fits withheld due to your receipt of workmen’s compen-

sation was incorrectly figured. You are due $102.40 for

July through December 1969, $124.80 for January

through December 1970, $142.00 for January 1971

through August 1972, and $179.70 for September 1972

2 on this determination, you are no longer over-

paid.“

III. Hiroko Shimabukuro

(1) With respect to an application filed on June 19,

1963, entitlement to a period of disability was established

for the wage earner, Roy Shimabukuro, on October 18,

1962 due to blindness. The wage earner, wage earner’s

wife Hiroko, and five children, Rick H., Norene R., Gary

R., Mile T., and Rory S., (with respect to applications

filed on their behalf) all became entitled to benefits also

effective May 1963 (following a six month waiting period

after onset of disability pursuant to section 223(c) (2)

of the Act, 42 U.S.C. 423(c) (2).

EE V mä A W W

(2) In April 1965 Rick H. Shimabukuro’s benefits

were terminated because of attainment of age 18. In

August 1969 Gary R. Shimabukuro’s benefits were termi-

nated because he ceased to be a full-time student. Mike

T. Shimabukuro’s benefits terminated in May 1971 be-

cause of attainment of age 18. Norene R. Shimabukuro

ceased to be eligible for benefits in June 1971 when she

attained age 22. Child’s benefits are terminated on the

basis of such post-entitlement events pursuant to section

202(d) of the Act, 42 U.S.C. 402(d).

(3) In September 1972 Mrs. Shimabukuro inquired of

the Social Security Administration whether she should

be receiving her full monthly benefit in view of her work

activities and earnings in 1971. From May 1971 when

less than three dependents of the wage earner had been

receiving benefits it was ascertained that work deductions

could be imposable thereafter.’ On the basis of Mrs.

Shimabukuro presenting information of current work

activity, she was placed in current suspension status ef-

fective October 1972.

(4) At the request of the Honolulu Social Security

District Office, Mrs. Shimabukuro submitted annual re-

ports of work activity for 1970 and 1971 on which she

informed of earnings for 1970 in the amount of $5,702.21

in 1970 and $6,341.24 in 1971; earnings for 1972 were

estimated to be $6,500. On the basis of these reports it

was ascertained that Hiroko Shimabukuro had been over-

paid $709.10 in 1971 and was incorrectly paid $859.30

for the period January 1972 through September 1972.

(5) On November 27, 1972 Mrs. Shimabukuro was

advised by letter explaining the nature of the overpay-

ment as follows:

In most cases where there are less than three entitled depend-

ents, total family benefits would not exceed and then be reduced

to the family maximum payable on the wage earner’s earnings

record in accordance with section 203(a) of the Act, 42 U.S.C.

403 (a). In such cases where more than two dependents are entitled

to benefits and the total family amount is reduced to the family

maximum payable by reduction to each dependent, other dependent

beneficiaries’ benefits on the wage earner’s earnings record may be

increased for a month where one dependent beneficiary has work

deductions thus keeping the family maximum payable intact.

Due to the termination of benefits payable to Mike in

May 1971, the provisions of the Social Security Act

under which you were receiving your full monthly

benefit while working and earning over $140.00 each

month no longer apply. You are entitled to receive

a partial [amount] of $25.40 for May 1971.

Due to the termination of benefits payable to Norene

effective June 1971, you are no longer entitled to

receive any benefits for any month you earn over

$140.00. Since you received $93.40 for June 1971

through August 1972 and $112.10 for September

1972, you have been over paid $709.10 for 1971 and

incorrectly paid $859.30 for January 1972 thr

September 1972. oa us

Final adjustment for 1972 will be made when we

receive your 1972 annual report.

Since Mrs. Shimabukuro was put in current suspension

status in light of present work activity, the notice did not

advise of recoupment of any of the overpayment or seek

refund which was to await Mrs. Shimabukuro’s 1972 an-

nual report to be filed on or before April 15, 1973. Be-

cause no recoupment action or refund was proposed, no

determination had been issued with respect to which she

would have rights of appeal and waiver.

(6) Mrs. Shimabukuro’s entitlement to mother’s insur-

ance benefits terminated effective February 1973, pur-

suant to section 202(b) of the Act, 42 U.S. C. 402(b)

upon her youngest child Rory attaining age 18 and no

longer being entitled to child’s insurance benefits.

( 7) On February 9, 1973 Mrs. Shimabukuro completed

a refund’ and a “without fault” questionnaire in con-

nection with a request that the overpayment be waived.

She stated that she was totally unaware that any over-

payment was being created because she had been receiv-

ing benefits when she began working without deductions

being imposed against her benefits. She inquired of the

Administration regarding continuing receipt of benefits

while working after discussing payments with a friend

in similar circumstances who did not receive such pay-

ments. Additionally, she furnished information pertain-

ing to her income and expenses.

(8) On April 7, 1973, with respect to Mrs. Shima-

bukuro’s request for waiver on grounds that she was

without fault in giving rise to the overpayment and that

recovery would cause hardship, Mrs. Shimabukuro was

informed that the incorrect social security payments of

$1,568.40 were not required to be refunded.

IV. Carl and Nancy Yamasaki

(1) Carl Yamasaki, the wage earner, applied for dis-

ability insurance benefits on October 16, 1968, alleging

disability from June 15, 1966, at age 24, due to a back

injury. Disability was established with an onset date of

June 15, 1966. The wage earner and dependents, his

wife Nancy and his child Stacy (with respect to appli-

cations filed on their behalf) were found entitled to bene-

fits beginning in October 1967, 12 months retroactive to

the month in which the application was filed (the earliest

month for which benefits could be paid in accordance

with section 223(b) of the Act, 42 U.S.C. 423(b)).

(2) Mr. Yamasaki also was awarded workmen’s com-

pensation payments in connection with his disability, re-

ceiving payments totalling $19,460.72 for 253 weeks of

total disability for the period June 1966 to May 1971;

$6,631.59 in permanent partial disability payments be-

ginning in August 1971 ($76.92 weekly) ; and a $2,050.00

lump sum award for disfigurement.

(3) Section 224 of the Social Security Act, 42 U.S.C.

424, requires that disability benefits be reduced in ac-

cordance with the formulae contained therein on the basis

of a beneficiary receiving workmen’s compensation bene-

fits. With respect to such provision, Mr. Yamasaki’s

disability benefit was reduced to $29.70 monthly effective

February 1972 and that of his wife and child $10.60

monthly each. Because of a processing error of the Social

Security Administration, Nancy Yamasaki received

$40.30 monthly from February 1972 through August

1972 and was thus overpaid $207.90 during that period.

—— ——ꝛ— —

—

Payments to Mr. Yamasaki and his child were correctly

made and they have not been overpaid.

(4) On October 2, 1972, Nancy Yamasaki was advised

by letter that she had received an overpayment ot

$207.90. She was informed of her right to request re-

consideration within 6 months and of her right to re-

quest consideration of waiver of the overpayment and

the applicable conditions which must be met before waiver

would apply. She was also informed that withholding

of the overpayment would begin unless she contacted the

8 Security Administration within 30 days (Exhibit

(5) The records of the Social Security Administration

do not reveal that Mrs. Yamasaki responded to the

letter of October 2, 1972 within 30 days as advised there-

in to request reconsideration or consideration for waiver.

On November 10, 1972 the Honolulu District Office, in

an apparent response to an inquiry by the wage earner

requesting information concerning the amount of the

overpayment, requested that the Bureau of Disability

Insurance furnish an explanation of the benefits paid

to the family from March 1972 to the present. On De-

cember 6, 1972 the Bureau of Disability Insurance in-

formed the District Office that incorrect paymerts to Mrs.

Yamasaki had been made of $29.70 for months Febru-

ary through August 1972.

| (6) Because no request for reconsideration or con-

sideration for waiver had been made within the 30 day

period as advised in the notice of October 2, 1972, Mrs.

Yamasaki was further notified by letter of January 8

1973 of withholding of her benefit payments of $20

monthly for December 1972 through September 1973 as

recoupment of the overpayment (Exhibit D).

(7) On January 11, 1978, the Honolulu District Office

was advised by the insurance carrier which paid Mr.

Yamasaki workmen’s compensation payments that such

payments terminated on May 1, 1972, rather than in

August 1972 as previously reported. Full social security

benefit payments without reduction with respect to work-

men's compensation payments could then be made to Mr.

Yamasaki and his family for months May through Au-

gust 1972.

(8) On March 12, 1973, Mr. and Mrs. Yamasaki were

notified that they and their child had become entitled to

full benefit payments effective May 1972. They were

advised a check would issue shortly in the amount of

$1,324.60 and that their total monthly benefit payment

would be $290.60 thereafter ($169.40 to the wage earner,

and $60.60 each to his wife and child). Mr. and Mrs.

Yamasaki were advised of the increased benefit amounts

as follows:

“Your benefits have been increased to $141.10 for

May through August 1972, $169.40 for September

1972 through February 1973. Your wife’s and child’s

benefits have been increased to $50.50 each for May

through August 1972 and $60.60 each for Septem-

ber 1972 through February 1973. We have paid you

the difference of what was paid and what is now

payable. Your child will receive a check shortly in

the amount of $399.00 which represents benefits

May 1972 through February 1973; thereafter, $60.60

will be sent monthly. Due to the increase, your

wife’s overpayment has been adjusted.”

(9) On April 16, 1973 a further communication was

sent to Mrs. Yamasaki as follows: “Due to an error in

processing, Stacy’s monthly benefit for March 1973 was

paid at the old rate. We are expediting additional bene-

fits for March 1973 and you will receive a check shortly

for $39.90. We are sorry for any inconvenience caused

you.

We have also corrected the name and address on the

check for you and your husband that will be paid on

May 3, 1973.”

Upon this action being taken, the wage earner and his

family were all in payment status of their full and cor-

rect benefit amounts.

V. Lorraine Robinson

(1) The wage earner, Alexander Robinson, born Feb-

ruary 28, 1918, filed an application for disability insur-

ance benefits on September 21, 1971, and was determined

to be disabled as of May 15, 1971 due to chronic pul-

monary disease. He and his wife (with respect to an

application filed on her behalf) also became entitled to

benefit payments effective December 1971 (following a

six month waiting period after onset of disability pur-

2 — section 223 (e) (2) of the Act, 42 U.S.C. 423

(2) On November 18, 1971 Mr. Robinson advised the

Social Security Administration that he had a pending

claim for workmen’s compensation and stated: “I under-

stand that if my workmen’s compensation is awarded, I

may have to reimburse the Social Security Administra-

tion my social security money. I agree to do so. I will

notify you of my workmeh’s compensation decision when

it is received.”

(3) An award of entitlement to disability insurance

benefits to Mr. Robinson was established on July 27,

1972 effective December 1971 in the amount of $165.50

monthly, and a check to Mr. Alexander issued in Au-

gust 1972 in the amount of $1,324 for the months De-

cember 1971 through July 1972.

(4) In response to a request of the Bureau of Dis-

ability Insurance on August 28, 1972, the insurance car-

rier advised that Mr. Robinson had been awarded tem-

porary total workmen’s compensation payments of

$112.50 weekly or $112.50 x 4.33 — $487.50 monthly)

for an indefinite period effective May 22, 1972. Section

224 of the Social Security Act, 42 U.S.C. 424, requires

that benefits be reduced in accordance with the formulae

contained therein on the basis of a beneficiary receiving

workmen’s compensation payments. On October 22, 1972,

Mr. Robinson was advised by letter of an overpayment

of — of 8662.00 — of receipt of workmen’s

compensation payments from June through September

1972 resulting in his benefits of $165.50 being reduced

to zero for those months (he was, however, entitled to

the amount of the legislative increase in 1972 of $33.10

to his base benefit rate effective with the month Septem-

ber 1972). The notice of Mr. Robinson on October 22,

1972 further advised of appeal rights to reconsideration,

waiver and a 30 day period within which to respond and

submit evidence so that benefits would not be adjusted for

recoupment (Exhibit E).

(5) Entitlement to benefits for Mrs. Lorraine Robin-

son on Mr. Robinson’s earnings record was established

for the first time on October 16, 1972 and the offset to

her benefits resulting from her — 2

men's compensation payments was app prior to any

payments having been made to her. For the period

December 1971 through May 1972 her benefit rate was

$82.80 monthly and this was reduced to zero for the

period June 1972 through August 1972. Effective Sep-

tember 1972 she could realize a legislative increase to

her base benefit rate in the amount of $16.50 monthly.

(6) On November 9, 1972, Mrs. Robinson was advised

of the initial payment to her in the amount of $529 rep-

resenting benefits of $82.80 for months December 1971

through May 1972 and $16.50 for months September

1972 and October 1972 (Exhibit F). With respect to

such entitlement no suspension or actions have been made

to benefit amounts upon payments being instituted, nor

has Mrs. Robinson been found to have been overpaid.

/s/ Bernard Popick

BERNARD Porick, Director

Bureau of Disability Insurance

Social Security Administration

Subscribed and sworn to before me

this 2nd day of May 1973.

/s/ Mary A. Brennan

MARY A. BRENNAN

Notary Public

My Commission expires June 30, 1974.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

Civil No. 72-3629

EVELYN ELLIOTT and BENITO MOLINA, Individually and

on behalf of all others similarly situated, PLAINTIFFS

ELLIOT L. RICHARDSON, Individually and in his capacity

as Secretary, United States, Department of Health,

Education, and Welfare; and SuNG Dal SEu, Individ-

ually and in his capacity as Pacific Area Manager,

Social Security Administration, Department of Health,

Education, and Welfare, DEFENDANTS

AFFIDAVIT OF JAMES E. FORBUS

BALTIMORE COUNTY )

) ss

STATE OF MARYLAND )

I, James E. Forbus, being duly sworn, depose and say

as follows:

I am the Deputy Director of the Bureau of Retirement

and Survivors Insurance of the Social Security Adminis-

tration, and as such, am responsible for the formulation

of policies and procedures whereby retirement, dependent

and survivors’ claims and related policies as affect dis-

ability claims under Title II of the Social Security Act

are adjudicated. As Deputy Director of the Bureau of

Retirement and Survivors Insurance, I am responsible

also for the supervision of the Payment Centers of the

Social Security Administration in their adjudication of

Title II claims.

In connection with my official duties I have custody of

the claims folders of Jordan A. Silva, Isabelle Ortiz, and

John V. Vaquilar who have filed affidavits with the court

on their behalf. My examination of their folders reveal

the following:

I. Jordan A. Silva

(1) Jordan A. Silva filed an application for retirement

benefits on November 6, 1963 and was awarded benefits

in the amount of $64 monthly effective February 1964

when he became age 62. Periodically benefit levels have

been increased by legislative enactment and are also re-

computed periodically when a beneficiary has additional

earnings posted to his earnings record. Mr. Silva’s pres-

ent monthly benefit is $155.30. Mr. Silva had worked and

had earnings during the years 1964 through 1967 and

his benefits during such years were adjusted with respect

to earnings in excess of statutory levels contained in sec-

tions 203(b) and (f) of the Act, 42 U.S.C. 403(b)

and (f).

(2) A present overpayment to Mr. Silva obtains with

respect to benefits paid for years 1969 through 1971.

Mr. Silva filed an annual report on March 13, 1969 of

earnings for 1968 indicating total earnings in that year

of $2,241.70 and that he earned over $140 per month in

all months; his statement of estimate of earnings for

1969 was $1,680 ($1,680 was the maximum exempt

amount of earnings for which no deductions were imposed

against benefits). Since Mr. Silva had not previously

filed a report of work during 1968 and was accordingly

paid all benefit amounts in that year, he was overpaid

$280 for 1968. That overpayment was adjusted against

benefits that would be payable to him in 1969. Because

he stated he would have no excess earnings for 1969, all

other benefits payable during that year were paid to him.

(3) Mr. Silva did not timely file an end of year an-

nual report in 1970 (on or before April 15, 1970) dis-

closing his actual earnings in 1969. (Because he did not

indicate excess earnings for 1969 in his prior estimate,

benefits were not currently suspended with respect there-

to and a report form was not mailed to him as it would

have if he had properly estimated his earnings and been

put in a current suspension status). At the request of

the Social Security Administration, Mr. Silva filed an

annual report for 1969 on October 22, 1970 disclosing

total earnings of $2,805.35 for 1969, giving rise to an

overpayment of $562 for that year; a penalty of $85.90

was also assessed because of his failure to file an annual

report timely. In the annual report of earnings for

1969 filed on October 22, 1970 Mr. Silva also estimated

his earnings for 1970 to be $2,805, and revealed that

he was working in October 1970; accordingly, benefits

which were paid for October 1970 were not correctly due

and he was overpaid $101.20 for that month. Mr. Silva

was notified of the overpayments and penalty assessment

on November 27, 1970, that benefits were withheld be-

ginning November 1970 to recoup such amounts owed,

and he was therein advised of rights to reconsideration

and consideration for waiver.

(4) Mr. Silva filed a timely end of year report of

earnings for 1970 on February 18, 1971, revealing total

earnings of $3,989.26 instead of $2,805 as he noted in the

October 1970 report. He therefore was overpaid $1,012

for 1970. About this time the Honolulu District Office

coordinated with Mr. Silva’s banker employer who indi-

cated that he worked out a budget for Mr. Silva and sug-

gested that no more than $10 be withheld from Mr.

Silva’s future benefits—otherwise Mr. Silva would again

have to continue working in 1971 at a level of excess

earnings. Mr. Silva’s monthly benefits were thereupon

reinstated beginning April 1971 with an amount of $10

withheld for recoupment p

(5) Mr. Silva did not timely file an end of year an-

nual report of earnings for 1971 (on or before April 15,

1972) disclosing his actual earnings in 1971. At the re-

quest of the Social Security Administration, he submitted

such report on September 5, 1972 revealing total earn-

ings of $3,713.11 for 1971. Because he previously esti-

mated that he would not have excessive earnings in 1971

and all benefits due were paid, he was overpaid $1,433

for that year. He also stated on his report for 1971 an

estimate of earnings of $3,000 for 1972, and this also

indicated he was presently overpaid fer 1972. Mr. Silva

stated thereon: “I was not aware that I had to file any

report.” Benefit payments were suspended effective No-

vember 3, 1972 with the benefit for October 1972. Mr.

Silva was advised by notice on October 2, 1972 of over-

payments for 1971 and 1972 based on his report of

earnings (the amounts of the overpayments advised of

are incorrect because in the machine processing, his

monthly benefit amount paid was considered a full benefit

whereas he in effect received $10 more which was ap-

plied toward recoupment of past overpayments). That

notice did not refer to overpayments prior to 1971. Mr.

Silva was advised of his rights to reconsideration and

waiver (Exhibit A). *

(6) At the request of the Social Security Administra-

tion, Mr. Silva timely filed an end of year annual report

of earnings for 1972 on March 13, 1973 in which he

stated only his 1972 earnings to be “about $3,000”; in-

formation obtained, with the plaintiff’s permission, from

his employer revealed his earnings to be $3,527.26 in

1972. Because Mr. Silva’s benefits in 1972 were sus-

pended for adjustment of past overpayments, he had not

been overpaid for 1972.

(7) An assessment of Mr. Silva’s account reveals

(a) an outstanding overpayment for 1969 of $562

plus $85.90 penalty

(b) outstanding overpayment of $1012 for 1970

(e) an overpayment of $1433 for 1971 which has been

reduced to a current outstanding amount of

$508.10 upon withholding benefit increases to Mr.

Silva and benefit payments to his wife on his

earnings record for whom wife’s benefits became

payable in May 1971, plus $154.40 penalty for

failing to file a timely report for 1971 earnings.

(d) underpayment of $36.60 for 1972.

(e) total outstanding overpayment comes to $2045.50

plus total penalties of $240.30.

(8) Mr. Silva will be further advised of these matters

and will be afforded opportunity for reconsideration and

consideration of waiver.

II. Isabelle Ortez

(1) Isabelle Ortez filed an application for retirement

benefits on October 16, 1970 and entitlement to benefits

was established effective September 1970 when she be-

came age 65. She stated on her application that she

was working full time for the Armed Forces and expected

to have earnings in excess of $140 monthly during the

next three months and estimated her earnings for 1971

to be $3,720. She also agreed to file an annual report of

earnings for each year in which she was under age 72.

(2) Mrs. Ortez was put in deduction status from Sep-

tember through December 1970 with respect to her

monthly benefit amount of $70.40, and continued in de-

duction status. An award notice issued on November 5,

1970 (Exhibit B) and she was furnished therewith a

booklet of Rights and Responsibilities of Beneficiaries

(Exhibit C).

(3) On April 27, 1971 the Honolulu Social Security

District Office received and processed a work notice from

Mrs. Ortez advising that she decreased her work activity

to wages of not more than $140 per month beginning

June 1971 and estimated her total earnings for 1971 to

be $2,500. On the basis of this information, benefits were

paid beginning with the payment for June 1971 and she

was notified on May 27, 1971 of such payments being

instituted. She was further advised that if she did not

stop work as planned, she should notify any social secu-

rity office and that final adjustments in her benefit pay-

ments would be made when she filed her annual report

of earnings (Exhibit D).

(4) Mrs. Ortez filed an end of year annual report of

earnings in January 1972 for 1971 revealing total earn-

ings of $4,316.03 for that year and that she had wages

in excess of $140 monthly in all months of 1971 giving

rise to an overpayment of $492.80. Mrs. Ortez was noti-

fied on February 8, 1972 of the overpayment and adjust-

ment action to be undertaken with respect to subsequent

benefit payments and that benefit payments would be

resumed in October 1972. She also was advised of her

— — reconsideration and consideration of waiver (Ex-

ibit E).

(5) The adjustment action against Mrs. Ortez’ benefit

payments has been completed as indicated in the notice

of February 8, 1972 and benefit payments were resumed

with the payment for September 1972 payable on Octo-

ber 3, 1972. Since that time she has been in full payment

status.

Ill. John V. Vaquilar

(1) John V. Vaquilar filed an application for retire-

ment benefits on November 1, 1966 and entitlement to

benefits was established effective June 1966, the month

he attained age 63.

(2) On March 9, 1967, Mr. Vaquilar filed a timely an-

nual report of earnings for 1966 revealing no excess

earnings for that year and did not furnish an estimate

of earnings for 1967, therefore he was continued in pay-

ment status without suspension.

(3) Mr. Vaquilar did not submit a timely annual re-

port of earnings for 1967 (on or before April 15, 1968).

At the request of the Social Security Administration he

submitted such a report on September 30, 1968, reveal-

ing earnings of $2,828.20 and thereby giving rise to an

overpayment of $441 for 1967; he again failed to furnish

an estimate of earnings for 1968. He was assessed a

penalty of a month’s benefit amount for failing to file a

timely annual report for 1967. Mr. Vaquilar was ad-

vised of the overpayment determination and penalty on

December 11, 1968 and an adjustment action was under-

taken with respect to his benefits for the 1967 over-

payments.

(4) Mr. Vaquilar filed an amended annual report for

1967 on March 27, 1969 advising of total earnings of

$2,822.20 for that year and no work activity during the

period January 1967 through July 1967. Revisions to

the adjustment action were made with respect to the

amended report for 1967.

(5) On March 27, 1969, Mr. Vaquilar timely filed an

annual report of earnings for 1968 revealing earnings

of $7,395 for that year, advising that he did not work

in December 1968, and estimating also that he would

earn $5,000 in 1969. On the basis of this information

he was found to have been overpaid $744.20 for 1968. On

May 8, 1969 Mr. Vaquilar was notified of this overpay-

ment and of a revised overpayment of $367.50 attributa-

ble to 1967 based on his revised report for 1967. A

refund was requested for the total overpayment of

$1,111.70. Mr. Vaquilar was put in a deduction status

with respect to 1969 earnings.

(6) Mr. Vaquilar filed an annual report on Septem-

ber 24, 1971 for earnings in 1969 (because he did not

receive any payments in 1969 this was not subject to the

time limitation requirements for filing). He advised of

earnings of $7,243 in 1969, that he did not work in

January 1969 and that he stopped work effective Octo-

ber 1971. On the basis of this information he was paid

a monthly benefit of $106.30 for January 1969 and

benefits of $157.30 each for October and November 1971;

this was paid by a check in December 1971 in a com-

bined amount of $408.90. Mr. Vaquilar was advised of

this payment on December 16, 1971 and advised of

rights to reconsideration and consideration for waiver.

(7) Mr. Vaquilar was also issued an erroneous check

in December 1971 in the amount of $141.50. He was

notified of the error on January 27, 1972 and that ad-

justment would be made against his benefit payment for

February payable on March 3, 1972. He was also advised

of rights to reconsideration and consideration for waiver

— The adjustment action was thereafter under-

(8) On January 23, 1972 Mr. Vaquilar submitted an

annual report of earnings for 1971 stating his earnings

to be $6,598.12 and that he did not work during Janu-

ary 1971 through September 1971 (the converse of in-

formation contained in his report submitted on Septem-

ber 24, 1971). On the basis of this report Mr. Vaquilar

was paid an additional $909.90 for 1971 and he was ad-

vised of such payment on March 8, 1972. The notice

advised of rights to reconsideration and waiver (Ex-

hibit F).

(9) In response to an inquiry from the Social Security

Administration on April 14, 1972, Mr. Vaquilar sub-

mitted a statement on May 23, 1972 stating he had

made a mistake on his annual report for 1971 and ad-

—

———

vised that he earned in excess of $140 monthly January

through September 1971. He did not request reconsider-

ation or waiver but asked for relief by partial adjust-

ment as follows:

“If you must withhold from my benefit check, then

withhold $80 per month. But I am in need of all

the benefit amount to help support me and wife and

adopted daughter.” (Emphasis original)

(10) On November 24, 1972, Mr. Vaquilar was ad-

vised that recovery of the overpayment would be made

by partial adjustment by withholding $80 monthly from

his benefit payment (Exhibit G).

(11) On December 19, 1972 Mr. Vaquilar, assisted

by an attorney, contacted the Honolulu District Office

and requested reconsideration and waiver consideration.

On January 23, 1972 full benefits were reinstated in

accordance with section 5503.5 of the Claims Manual

(Exhibit H) of the Social Security Administration (op-

erating guide for personnel of the Social Security Admin-

istration) and $80 withheld from Mr. Vaquilar’s benefit

for December 1972 was repaid. Mr. Vaquilar continued

in a full payment status pending reconsideration of the

overpayment determination and consideration for waiver.

Upon conclusion of reconsideration on February 2, 1973,

he was found to be overpaid $909.90 for January 1971

through September 1971 because of work and earnings

in 1971 and that waiver of recovery could not be granted

since Mr. Vaquilar was found not to be without fault in

creating the overpayment. Because of his financial cir-

cumstances it was further determined that partial ad-

justment would be undertaken by withholding $40 from

his full monthly benefit amount of $201.60 effective with

the benefit for February 1973 payable March 3, 1973,

(Exhibit I). Mr. Vaquilar is presently in a payment

status with such adjustment.

/s/ James E. Forbus

JAMES E. FORBUS

Deputy Director

Bureau of Retirement

and Survivors Insurance

Social Security Administration

Subscribed and sworn to before me

this 2nd day of May 1973.

/s/ Mary A. Brennan

Mary A. BRENNAN

Notary Public

My Commission expires June 30, 1974.

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