363 U.S. 603 (1960), 54, Flemming v. Nestor

Docket Nº:No. 54
Citation:363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435
Party Name:Flemming v. Nestor
Case Date:June 20, 1960
Court:United States Supreme Court

Page 603

363 U.S. 603 (1960)

80 S.Ct. 1367, 4 L.Ed.2d 1435




No. 54

United States Supreme Court

June 20, 1960

Argued February 24, 1960




Section 202 (n) of the Social Security Act, as amended, provides for the termination of old-age benefits payable to an alien who, after the date of its enactment (September 1, 1954), is deported under § 241 (a) of the Immigration and Nationality Act on any one of certain grounds specified in § 202(n). Appellee, an alien who had become eligible for old-age benefits in 1955, was deported in 1956, pursuant to § 241(a) of the Immigration and Nationality Act, for having been a member of the Communist Party from 1933 to 1939. Since this was one of the grounds specified in § 202(n), his old-age benefits were terminated shortly thereafter. He commenced this action in a single-judge District Court, under § 205(g) of the Social Security Act, to secure judicial review of that administrative decision. The District Court held that § 202(n) deprived appellee of an accrued property right and, therefore, violated the Due Process Clause of the Fifth Amendment.


1. Although this action drew into question the constitutionality of § 202(n), it did not involve an injunction or otherwise interdict the operation of the statutory scheme; 28 U.S.C. § 2282, forbidding the issuance of an injunction restraining the enforcement, operation or execution of an Act of Congress for repugnance to the Constitution, except by a three-judge District Court, was not applicable; and jurisdiction over the action was properly exercised by the single-judge District Court. Pp. 606-608.

2. A person covered by the Social Security Act has not such a right in old-age benefit payments as would make every defeasance of "accrued" interests violative of the Due Process Clause of the Fifth Amendment. Pp. 608-611.

(a) The noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. Pp. 608-610.

(b) To engraft upon the Social Security System a concept of "accrued property rights" would deprive it of the flexibility and

Page 604

boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act. Pp. 610-611.

3. Section 202(n) of the Act cannot be condemned as so lacking in rational justification as to offend due process. Pp. 611-612.

4. Termination of appellee's benefits under § 202(n) does not amount to punishing him without a trial, in violation of Art. III, §2, Ch 3, of the Constitution or the Sixth Amendment; nor is § 202(n) a bill of attainder or ex post facto law, since its purpose is not punitive. Pp. 612-621.

169 F.Supp. 922, reversed.

HARLAN, J., lead opinion

MR. JUSTICE HARLAN delivered the opinion of the Court.

From a decision of the District Court for the District of Columbia holding § 202(n) of the Social Security Act (68 Stat. 1083, as amended, 42 U.S.C. § 402(n)) unconstitutional, the Secretary of Health, Education, and Welfare takes this direct appeal pursuant to 28 U.S.C. § 1252. The challenged section, set forth in full in the margin,1 provides [80 S.Ct. 1370] for the termination of old-age, survivor,

Page 605

and disability insurance benefits payable to, or in certain cases in respect of, an alien individual who, after September 1, 1954 (the date of enactment of the section), is deported under § 241(a) of the Immigration and Nationality Act (8 U.S.C. § 1251(a)) on any one of certain grounds specified in § 202(n).

Appellee, an alien, immigrated to this country from Bulgaria in 1913, and became eligible for old-age benefits in November, 1955. In July, 1956, he was deported pursuant to § 241(a)(6)(C)(i) of the Immigration and Nationality Act for having been a member of the Communist Party from 1933 to 1939. This being one of the benefit-termination deportation grounds specified in § 202(n), appellee's benefits were terminated soon thereafter, and notice of the termination was given to his wife,

Page 606

who had remained in this country.2 Upon his failure to obtain administrative reversal of the decision, appellee commenced this action in the District Court, pursuant to § 205(g) of the Social Security Act (53 Stat. 1370, as amended 42 U.S.C. § 405(g)), to secure judicial review.3 On cross-motions for summary judgment, the District Court ruled for appellee, holding § 202(n) unconstitutional under the Due Process Clause of the Fifth Amendment in that it deprived appellee of an accrued property right. 169 F.Supp. 922. The Secretary prosecuted an appeal to this Court, and, subject to a jurisdictional question hereinafter discussed, we set the case down for plenary hearing. 360 U.S. 915.

The preliminary jurisdictional question is whether 28 U.S.C. § 2282, is applicable, and therefore required that the case be heard below before three judges, rather than by a single judge, as it was. Section 2282 forbids the issuance, except by a three-judge District Court, of

Page 607


interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution. . . .

Neither party requested a three-judge court below, and in this Court both parties argue the inapplicability of § 2282. If the provision applies, we cannot reach the merits, but must vacate the judgment below and remand the case for consideration by a three-judge District Court. See Federal Housing Administration v. The Darlington, Inc., 352 U.S. 977.

Under the decisions of this Court, this § 205(g) action could, and did, draw in question the constitutionality of § 202(n). See, e.g., Anniston Mfg. Co. v. Davis, 301 U.S. 337, 345-346. However, the action did no more. It did not [80 S.Ct. 1371] seek affirmatively to interdict the operation of a statutory scheme. A judgment for appellee would not put the operation of a federal statute under the restraint of an equity decree; indeed, apart from its effect under the doctrine of stare decisis, it would have no other result than to require the payment of appellee's benefits. In these circumstances, we think that what was said in Garment Workers' Union v. Donnelly Garment Co., 304 U.S. 243, where this Court dealt with an analogous situation, is controlling here:

[The predecessor of § 2282] does not provide for a case where the validity of an act of Congress is merely drawn in question, albeit that question be decided, but only for a case where there is an application for an interlocutory or permanent injunction to restrain the enforcement of an act of Congress. . . . Had Congress intended the provision . . . , for three judges and direct appeal, to apply whenever a question of the validity of an act of Congress became involved, Congress would naturally have used the familiar phrase "drawn in question." . . .

Id. at page 250.

Page 608

We hold that jurisdiction over the action was properly exercised by the District Court, and therefore reach the merits.


We think that the District Court erred in holding that § 202(n) deprived appellee of an "accrued property right." 169 F.Supp. at 934. Appellee's right to Social Security benefits cannot properly be considered to have been of that order.

The general purposes underlying the Social Security Act were expounded by Mr. Justice Cardozo in Helvering v. Davis, 301 U.S. 619, 640- 645. The issue here, however, requires some inquiry into the statutory scheme by which those purposes are sought to be achieved. Payments under the Act are based upon the wage earner's record of earnings in employment or self-employment covered by the Act, and take the form of old-age insurance and disability insurance benefits inuring to the wage earner (known as the "primary beneficiary"), and of benefits, including survivor benefits, payable to named dependents ("secondary beneficiaries") of a wage-earner. Broadly speaking, eligibility for benefits depends on satisfying statutory conditions as to (1) employment in covered employment or self-employment (see § 210(a), 42 U.S.C. § 410(a)); (2) the requisite number of "quarters of coverage" -- i.e., three-month periods during which not less than a stated sum was earned -- the number depending generally on age (see §§ 213-215, 42 U.S.C. §§ 413-415); and (3) attainment of the retirement age (see § 216(a), 42 U.S.C. § 416(a)). § 202(a), 42 U.S.C. § 402(a).4 Entitlement to benefits once gained

Page 609

is partially or totally lost if the beneficiary earns more than a stated annual sum, unless he or she is at least 72 years old. § 203(b, e), 42 U.S.C. § 403(b, e). Of special importance in this case is the fact that eligibility for benefits, and the amount of such benefits, do not in any true sense depend on contribution to the program through the payment of taxes, but rather on the earnings record of the primary beneficiary.

[80 S.Ct. 1372] The program is financed through a payroll tax levied on employees in covered employment, and on their employers. The tax rate, which is a fixed percentage of the first $4,800 of employee annual income, is set at a scale which will increase from year to year, presumably to keep pace with rising benefit costs. I.R.C. of 1954, §§ 3101, 3111, 3121(a). The tax proceeds are paid into the Treasury "as internal revenue collections," I.R.C., § 3501, and each year an amount equal to the proceeds is appropriated to a Trust Fund, from which benefits and the expenses of the program are paid. § 201, 42 U.S.C. § 401. It was evidently contemplated that receipts would greatly exceed disbursements in the early years of operation of the system, and surplus funds are invested in government obligations, and the income returned to the...

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