News and Press Releases
March 11, 2026
PWDF Has Reached Another Unprecedented Settlement with the Social Security Administration (SSA) in a Case Alleging Discrimination Against a Psychiatrically Disabled (Schizophrenia) Individual Under Section 504 of the Rehabilitation Act of 1973
Unlike the ADA, Section 504 applies to federal agencies. In Nicolas Ibarra v. SSA Commissioner, Case No. 3:23-CV-01037 after 3 years of litigation the parties have filed a settlement agreement (SA) in U.S. District Court. The SSA has historically, since 1978 when Congress applied Section 504 to the federal government and through the present, fought these cases which allege unequal program access, especially for severe psychiatric disabilities as in the Davis/Doe cases, settled after five years of litigation. See infra.
Plaintiff Ibarra argued that the SSA continually, over the course of years, discriminated against him by failing to effectively communicate for meaningful program access which is the legal standard. He was falsely accused of owning $1 million of real estate in Mexico after being found medically disabled based on lifelong schizophrenia on January 24, 2020. A SSA field office bounced him out on the street where he stayed in shelters, and was involuntary committed to psychiatric hospital wards three times in nearly 2 years until November 2021 when a US ALJ found that he did not own any real estate and was eligible for his SSI benefit checks. The SSA field office would not permit his right to a reconsidered determination; and his mother who stated he was “confused and had no documents of ownership” of any real estate was herself falsely accused of confirming his “confession” to owning the property in Mexico. His impairments include chronic acute schizophrenia, cognitive challenges, and anxiety. The same ALJ decision (attached) wherein a psychiatrist testified as an expert set forth numerous communication limitations was not read by the SSA field office charged with interviewing him to determine non-medical income and resource eligibility criteria.
The settlement agreement affords some reasonable accommodations so Plaintiff can have equal, meaningful access to the SSA’s disability programs under Title XVI (SSI) of the Social Security Act.
“This is a second major step for human and civil rights for people who have psychiatric disabilities,” says PWDF’s Legal Director and Lead Counsel, Steven Bruce. Bruce also notes, “There have been numerous cases on behalf of people with physical disabilities, but this is one the first times, as a result of legal action, that a federal agency has agreed to provide reasonable accommodations to individuals with a psychosis to allow equal, meaningful program access. Hopefully, this case will have a greater impact beyond Nicolas, bringing awareness to the issue and ideally paving the way for millions of other mentally disabled Americans to actually receive reasonable accommodations since PWDF’s 2012 cases (See Terrence Davis v. Michael Astrue, Case No. 3:06-CV-6108 and John Doe v. Michael Astrue, Case No. 3:09-CV-980) for meaningful access to which they are entitled under the law.”
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Settlement Agreement_March 5 2026