Justices to Decide if Social Security Can Be Seized

In the latest installment of the baby boomers-reach-retirement-age saga, the Supreme Court said Monday that it would decide whether the government could seize Social Security benefits from individuals who failed to repay decades-old student loans.

At issue is $3.6 billion in student loans that have gone unpaid for more than 10 years.

One federal law says Education Department officials should aggressively try to collect money from those who defaulted on their government-backed loans by garnishing their wages or seeking other sources of money.

But a second law says the government should not take Social Security benefits to repay debts that are more than 10 years old.

Not surprisingly, lower courts are split on which law to follow.

To resolve the dispute, the justices voted to hear the case of James Lockhart, a Washington state man who went to four colleges in the 1980s with the help of federally guaranteed student loans. He became disabled as a result of diabetes and heart disease, and was unemployed in 1991 when he defaulted on nine student loans.

In 2002, Lockhart was living on his Social Security disability benefit of $874 a month. At the same time, he had $80,000 in unpaid student loans.

To repay his debt, the government took $93 a month from his disability benefit. A year later, Lockhart reached age 65 and began receiving an old-age benefit instead of a disability benefit. Now, the government is taking $143 a month.

Under the law, the government can seize 15% of a recipient’s monthly benefit to repay the loans.

The Education Department said the seizures had proved to be an effective means of recovering unpaid students loans. In 2003, the collection effort brought in $400 million from reclaimed Social Security benefits.

Lockhart sued three years ago to block the seizure, but he lost before a federal judge in Seattle and the U.S. 9th Circuit Court of Appeals in San Francisco. Its judges pointed to the education law that encouraged the government to collect on the unpaid loans.

In a different case, the U.S. 8th Circuit Court of Appeals in St. Louis came to the opposite conclusion by pointing to the Debt Collection Act, which bars the government from seizing Social Security benefits to pay debts that are more than 10 years old.

The Public Citizen Litigation Group, a public interest law firm, appealed on Lockhart’s behalf. Its lawyers argued that many people, like Lockhart, had no income other than Social Security, and that Congress did not want agencies to seize the benefits of such individuals.

The high court said it would hear the case of Lockhart vs. U.S. in the fall.

The court also agreed to consider whether a homeowner who tripped over a piece of mail on her front porch could sue the Postal Service.

Barbara Dolan, a Pennsylvania woman, said she hurt her back and wrist in August 2001 when she fell over a stack of letters and packages that her mail carrier left on her porch. She sued the Postal Service, but a judge dismissed the claim, noting that federal law did not allow claims over the “loss, miscarriage or negligent transmission of letters or postal matter.”

In her appeal, Dolan argued that her claim did not involve the mishandling of the mail but negligence in putting the packages on her porch. She also noted that a court in New York had allowed such claims. The justices agreed to take up her case, Dolan vs. U.S. Postal Service, in the fall.

A third case, also set for the fall, will test whether convicted murderers could try to avoid the death penalty by arguing before the sentencing jury that they were not guilty after all.

In the past, the Supreme Court has said the sentencing hearing should focus on whether the defendant deserves to die for the crime, not whether they committed the crime. But the justices have also said defendants have a right to present mitigating evidence to the sentencing jury.

Last year, the Oregon Supreme Court overturned the death sentence for Randy Guzek because he had been barred from telling jurors during the sentencing hearing that witnesses had said he was not at the crime scene when two people were robbed and killed in 1987.

The Supreme Court said it would hear the case of Oregon vs. Guzek to clarify the law.