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State, blind Missourians settle lengthy fight over payments

State, blind Missourians settle lengthy fight over payments

March 1st, 2018 by Associated Press and Bob Watson in Missouri News

Twelve years after it started, the state on Thursday announced it has reached a settlement in the case over Blind Pension Fund payments.

The state's Social Services Department has agreed to pay $21 million from a special settlement fund that's being created — $11,478,681 to compensate eligible blind pensioners for underpayments of their benefits, and $9,521,319 to compensate those pensioners for interest on those underpayments.

"I am pleased an agreement has been reached without having to delay the issue any longer in court," Attorney General Josh Hawley said, in a news release.

Attorney John J. Ammann of St. Louis University's Litigation Clinic said, "The Missouri Council of the Blind and their members are very pleased with the settlement we were able to work out."

Ammann, St. Louis University's McDonnell professor of Justice in American Society, has been involved with the case since the beginning, and helped negotiate the settlement.

He said Hawley and his staff "have been very cooperative. It was clear early in the Hawley administration that they wanted to get this resolved."

He said people shouldn't be critical that Hawley's office appealed an October 2017 ruling by Cole County Presiding Circuit Judge Pat Joyce, since that gave the parties more time to negotiate a settlement.

"It's pretty close to the full amount of our judgment," he explained. "We gave a discount, forgiving some of the interest, in exchange for getting paid faster than they would have had this most recent appeal gone forward."

Last October, Joyce ordered the state to pay $26,312,279 — including pre-judgment and post-judgment interest — in the case that first was filed Feb. 16, 2006.

In that same order, she said the underpayments and interest had totaled $19,672,492, as of June 30, 2012 — the last day of the 2011-12 state business year — but that the ongoing legal battle raised that by nearly $6.4 million.

With the settlement, Ammann said, the state won't have to pay more than $5.3 million in interest charges, but "everybody will get paid back what they're owed — the underpayment. We're just forgiving some of the interest they would have earned from that underpayment."

Both sides scheduled a 1:30 p.m. March 30 hearing with Joyce, so she can approve the proposed settlement.

The legal battle involves payments from a fund established in the 1920s to provide an annual pension for Missouri residents who are blind, have lived in the state at least a year and meet specific eligibility requirements.

"The Blind Pension is not tied to your income," Ammann said. "It is tied to assets — you cannot have more than $20,000 in assets.

"You can have a job and still have income — there's no income limit."

The settlement comes as lawmakers are considering a proposal to reduce the number of people eligible for the benefit — by disqualifying people whose spouses make more than $36,000 annually and those who have driver's licenses.

Officials estimate about 225 people would be affected, saving the state about $938,000 a year.

The Blind Pension currently pays roughly $730 a month to around 3,000 Missourians; Ammann said the current list of recipients is a little larger than that.

The original 2006 lawsuit was filed by the Missouri Council for the Blind and some pensioners who argued they had been underpaid since 1992 — and had spent years trying to get the state to give them what they were owed.

Defendants in the lawsuit have been the state's Family Services Division and the Social Services Department's director.

The appeals court in Kansas City agreed in 2009, sending the case back to Cole County for a determination of the damages.

But, on a second appeal in 2010, the Kansas City court agreed with the state's argument that a statute of limitations required the damages payments to be calculated only for the five years before the lawsuit was filed, or starting in 2001.

In 2015, the appeals court ordered the parties to determine what the annual payments from 1994-2005 were — before the payment formula was changed — as well as the proper amount of payments since 2005 under the new formula.

Ammann said that was intended to determine what really was owed to the pensioners who had been underpaid.

And the underpayments ended in 2010, when the formula was adjusted after the court case had begun.

The March 30 settlement hearing is called a Fairness Hearing.

"In a class-action suit (like this one), people can show up and say they like it (or) say they don't like it," Ammann explained.

"People have the option to opt out under state law," but he doesn't expect that will happen because "it's not the kind of case where an individual lawyer is going to bring an individual case (because) for each individual, it's not a huge amount of money — but spread over several thousand people, it's a lot of money."

He added the state has said it will begin immediately mailing postcards about the proposed settlement to those they think are affected; 7,000 postcards will be sent, including people who received benefits but moved away from Missouri and the estates of those who've died.

"The first checks really won't go out until early 2019," Ammann said, giving the state time to determine who should receive the back payments. "People who currently get the pension don't have to do anything. If they're eligible for the extra money, they'll see the extra money on their account in early 2019.

Those no longer receiving a pension will have to file a claim form.

PREVIOUS COVERAGE: 

JEFFERSON CITY, Mo. (AP) -- Missouri has agreed to pay $21 million to blind state residents who were underpaid from a fund set up to provide a safety net.

The state has agreed to settle a lawsuit filed in 2006 by the Missouri Council of the Blind, which contended that the Missouri Department of Social Services and the Family Support Division miscalculated the amount of monthly payments it sent to blind state residents. The settlement includes $11.4 million toward the underpayments and $9.5 million for interest on those underpayments, Attorney General Josh Hawley announced Thursday.

The Blind Pension Fund was established in the 1920s. As of last month, it paid about 2,900 people about $730 per month, The St. Louis Post-Dispatch reported .

According to the agreement, attorneys for all parties will ask a Cole County judge to approve the settlement during a hearing March 30. If it's approved, payments will begin in early 2019, with some recipients getting monthly increases and others receiving lump sums.

That settlement amount is less than an earlier estimate of $26 million but negotiators wanted to get the payments started after the lengthy court fight, said Denny Huff, president of the Missouri Council of the Blind.

"We really hope that the recipients of the Blind Pension Fund are satisfied with the settlement," Huff said.

State officials also said they were pleased the long court fight is over.

"This issue has been drawn out for over ten years and I am pleased an agreement has been reached without having to delay the issue any longer in court," Hawley said in a statement.

Patrick Luebberging, director of the Family Support Division, said the Department of Social Services "thinks that the settlement agreement represents a reasonable resolution to this long-standing, complex case."

The settlement comes as lawmakers consider legislation that would reduce the number of people eligible for the benefit. It would disqualify people whose spouses make over $36,000 annually and those who have driver's licenses. Officials estimate about 225 people would be affected, saving the state about $938,000 annually.

A House committee approved the bill but it has not been taken up for debate in the full House.