United States v. Vaello Madero

The U.S. Constitution’s Territory Clause states that Congress may “make  all needful Rules and Regulations respecting the Territory . . .  belonging to the United States.”  In exercising its broad authority,  Congress has maintained different federal tax and benefits programs for  residents of the Territories than for residents of the states. For  example, residents of Puerto Rico are typically exempt from most federal  income, gift, estate, and excise taxes but not every federal benefits  program extends to residents of Puerto Rico. Supplemental Security  Income (SSI) applies only to residents of the 50 states and the District  of Columbia, 42 U. S. C. 1382c(a)(1)(B)(i).

Madero received SSI benefits while a resident of New York. He moved to  Puerto Rico, where he was no longer eligible to receive those benefits.  Unaware of Madero’s new residence, the government continued to pay him  SSI benefits but eventually sued to recover more than $28,000. Madero  argued that Congress’s exclusion of residents of Puerto Rico from the  SSI program violated the equal-protection component of the Fifth  Amendment’s Due Process Clause. The district court and the First Circuit  agreed.

The Supreme Court reversed. The Constitution does not require Congress  to extend SSI benefits to residents of Puerto Rico. The Court applied  the deferential rational-basis test. Congress’s decision to exempt  Puerto Rico’s residents from most federal income, gift, estate, and  excise taxes supplies a rational basis for distinguishing residents of  Puerto Rico from residents of the states for purposes of the SSI  benefits program.