Facts
- Ephram Nestor, a Bulgarian-born lawful permanent resident, immigrated to the United States in 1913 and worked for many years, paying Social Security taxes for about 19 years.
- Nestor became eligible for Social Security old-age benefits in November 1955 and began receiving monthly payments.
- Congress enacted Social Security Act § 202(n), providing that an alien’s old-age benefits would terminate if, after September 1, 1954, the alien was deported on specified grounds under the Immigration and Nationality Act.
- In July 1956, Nestor was deported based on past Communist Party membership (1933–1939), a ground covered by § 202(n).
- The agency terminated Nestor’s benefits and notified him (and also notified his wife, who remained in the United States).
- Nestor claimed his prior contributions and current receipt of payments gave him an accrued property right that could not be revoked consistently with the Fifth Amendment.
Issues
- Whether a three-judge district court was required because the suit challenged the constitutionality of an Act of Congress.
- Whether termination of Social Security old-age benefits under § 202(n) deprived Nestor of a vested or accrued property right in violation of the Fifth Amendment Due Process Clause.
- Whether § 202(n) was so arbitrary as to violate due process under rational-basis review.
- Whether § 202(n) imposed unconstitutional punishment without trial, or constituted a bill of attainder or ex post facto law.
Decision
- The Supreme Court reversed the district court and upheld § 202(n) as constitutional.
- A three-judge district court was not required because the action sought judicial review of an administrative benefits decision, not an injunction restraining enforcement of a federal statute.
- Social Security old-age benefits are noncontractual statutory benefits; coverage and contributions do not create a vested property right immune from alteration or termination.
- Section 202(n) was not patently arbitrary or utterly lacking in rational justification; Congress could rationally link deportation on specified grounds to termination of benefits.
- Termination of benefits under § 202(n) was not unconstitutional punishment and did not violate prohibitions on bills of attainder or ex post facto laws.
Legal Principles
- Social Security benefits are statutory entitlements rather than contractual or vested property rights; Congress may change eligibility and payment rules.
- Due process permits modification or termination of such benefits so long as the legislation is not patently arbitrary and lacks no rational justification.
- A suit seeking review of an administrative application of a statute does not necessarily trigger three-judge-court procedures reserved for suits seeking to enjoin enforcement of federal statutes.
- A measure that imposes financial detriment does not, without more, constitute punishment for purposes of Article III, the Sixth Amendment, or the Bill of Attainder and Ex Post Facto Clauses.
Conclusion
The Court held that Congress could terminate Social Security old-age benefits for an alien deported on specified grounds without violating the Fifth Amendment, because the benefits are noncontractual statutory entitlements subject to rational-basis review and the termination provision was treated as regulatory rather than punitive.