Milsap v. Social Security Administration

Filing 16

ORDER granting without prejudice 10 Defendant's Motion to Dismiss for Lack of Jurisdiction. The Clerk of the Court is directed to close this case. Signed by Judge James A Teilborg on 5/31/11.(DMT)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Andrew Nelson Milsap, Plaintiff, 10 11 vs. 12 Social Security Administration, 13 Defendant. 14 ) ) ) ) ) ) ) ) ) ) ) ) No. CV 10-1757-PHX-JAT ORDER 15 16 17 Pending before the Court is Defendant’s Motion to Dismiss pursuant to Rule 12(b)(1) 18 of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. (Dkt. 10.) 19 Plaintiff has responded to the motion (Dkt. 13), and Defendant has filed a reply (Dkt. 14). 20 After the motion was fully briefed, Plaintiff filed a sur-reply entitled Plaintiff’s Reply to 21 Defendant’s Reply.1 (Dkt. 15.) For the reasons set forth below, the Court will dismiss 22 Plaintiff’s complaint for lack of subject matter jurisdiction. 23 // 24 25 26 27 28 1 Neither the federal rules, nor the local rules permit the filing of a sur-reply. Because Plaintiff did not have leave to file the sur-reply, the Court cannot consider the additional facts and arguments raised in the sur-reply for purposes of deciding this Motion to Dismiss. See In re Graham, 210 F.3d 382, 382 (9th Cir. 2000) (citing King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987) (holding pro se litigants to the same procedural rules binding on represented parties). 1 I. Background 2 On February 15, 2010, Plaintiff received a letter from the Social Security 3 Administration (the “SSA”) informing Plaintiff that his Social Security benefits would be 4 withheld pending review by the SSA. (Dkt. 10-1.) Plaintiff was instructed that if he 5 disagreed with the SSA’s decision, he had the right to appeal in writing and would be asked 6 to sign form SSA-561-U2 (“Request for Reconsideration”). (Id.) On March 6, 2010, 7 Plaintiff received the follow-up letter from the SSA that informed the him that the SSA 8 would not pay Plaintiff all of the Social Security benefits withheld, because Plaintiff was 9 overpaid Supplemental Security Income (“SSI”) from July 2003 through April 2010. (Dkt. 10 10-1, 13.) The SSA sought to recover the overpayment by reducing Plaintiff’s Social 11 Security benefits. (Dkt. 10 at pp. 1–2.) The letter instructed Plaintiff that: (1) he could ask 12 the SSA to review its finding that Plaintiff owed money; (2) he could request a waiver of the 13 collection of the overpayment by completing form SSA-632 (“Request for Waiver of 14 Recovery or Change in Repayment Rate”); and/or (3) he could appeal the SSA’s decision in 15 writing by signing a form SSA-561-U2 (“Request for Reconsideration”). (Dkt. 10-1, 13.) 16 On August 18, 2010, Plaintiff filed a complaint in district court alleging that the SSA 17 took all of Plaintiff’s Social Security benefits by failing to award Plaintiff $24,700.00 in back 18 pay from the period of June 2003 to February 2010. (Dkt. 1.) 19 As permitted by the March 6, 2010 letter, Plaintiff requested a waiver of the collection 20 of the overpayment from the SSA. (Dkt. 10 at p. 2.) On October 20, 2010, the SSA sent a 21 letter to Plaintiff that informed him of the SSA’s decision not to waive the overpayment of 22 benefits. (Dkt. 10-5.) The letter provided Plaintiff with a time to review his file, November 23 1, 2010, and scheduled Plaintiff for a “personal conference” on November 5, 2010. (Dkt. 10- 24 5.) Following the personal conference, the SSA sent Plaintiff a letter on December 1, 2010, 25 containing the SSA’s initial decision regarding the waiver request. (Dkt. 13, 14-1.) The SSA 26 denied the waiver and stated that Plaintiff would have to pay back the SSI overpayment, 27 because Plaintiff failed to timely report prior casino winnings. (Id.) According to the letter, 28 if Plaintiff disagreed with the decision, he had the right to appeal by filling out form SSA-2- 1 561-U2 (“Request for Reconsideration”). (Id.) 2 On January 18, 2011, Defendant filed the pending motion to dismiss. (Dkt. 10.) 3 According to Defendant, Plaintiff has not appealed the denial of the waiver request, nor has 4 Plaintiff appealed the other decisions of the SSA. (Dkt. 14.). The SSA does not have a 5 record of any “Requests for Reconsideration” filed by Plaintiff. (Id.) Although Plaintiff 6 argues that Defendant has ignored his requests for hearings or appeals, Plaintiff did not 7 provide evidence that he appealed the SSA’s decisions in the manner set forth in the letters.2 8 II. Legal Standard 9 Defendant argues that the district court does not have subject matter jurisdiction to 10 hear Plaintiff’s complaint because Plaintiff has failed to exhaust his administrative remedies. 11 Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, dismissal is appropriate 12 when the court lacks subject matter jurisdiction over a claim. Fed.R.Civ.P. 12(b)(1). When 13 considering a motion to dismiss pursuant to Rule 12(b)(1), the district court may review any 14 evidence to resolve factual disputes concerning the existence of jurisdiction. McCarthy v. 15 United States, 850 F.2d 558, 560 (9th Cir. 1988) (citing Land v. Dollar, 330 U.S. 731, 735 16 n.4 (1947) (“[W]hen a question of the District Court’s jurisdiction is raised . . . the court may 17 inquire by affidavits or otherwise, into the facts as they exist.”)). “The party asserting 18 jurisdiction has the burden of proving all jurisdictional facts.” Indus. Tectonics, Inc. v. Aero 19 Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990) (citing McNutt v. Gen. Motors Acceptance Corp., 20 298 U.S. 178, 189 (1936)). 21 III. Exhaustion Requirement 22 The United States and its agencies, including the SSA, are immune from suit absent 23 a waiver. Fed. Deposit Ins. Corp. v. Meyer, 510 U.S. 471, 475 (1994) (“Absent a waiver, 24 25 26 27 28 2 Plaintiff attached numerous documents to his response. The documents are all dated prior to December 1, 2010, the date of the denial of Plaintiff’s waiver request. Although Plaintiff has written notes in the margins of letters from the SSA, Plaintiff has provided no evidence that he has submitted form SSA-561-U2 (“Request for Reconsideration”), as required by the SSA to appeal a decision. -3- 1 sovereign immunity shields the Federal Government and its agencies from suit.”). 2 “Sovereign immunity is jurisdictional in nature.” Meyer, 510 U.S. at 475. “It is axiomatic 3 that the United States may not be sued without its consent and that the existence of consent 4 is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983). 5 “Where a statute creates a right and provides a special remedy, that remedy is exclusive.” 6 United States v. Babcock, 250 U.S. 328, 331 (1919). 7 The Social Security Act (the “SSA”) provides the sole avenue for judicial review for 8 recovery on any claim arising under the Act. See 42 U.S.C. § 405(h).3 The remedy provision 9 in Section 405(g) provides: 13 Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business. 14 42 U.S.C. § 405(g) (emphasis added). For claims arising under the Act, judicial review is 15 permitted only in accordance with Section 405(g). 10 11 12 16 Judicial review is permitted only once a “final decision” by the Commissioner of 17 Social Security has been made after a hearing to which the plaintiff was a party. Id. Because 18 the term “final decision” is undefined in the Act, the SSA has authority to give meaning to 19 20 3 Section 405(h) provides: 21 22 23 24 25 The findings and decision of the Commissioner of Social Security after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Commissioner of Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter. 26 27 28 42 U.S.C. § 405(h) (emphasis added). Section 405(h) limits the remedies available to an individual challenging the lawfulness of the SSA’s decision to deny Social Security benefits. Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 10 (2000). -4- 1 the term through regulations. Sims v. Apfel, 530 U.S. 103, 106 (2000) (citing 42 U.S.C. § 2 405(a) and Weinberger v. Salfi, 422 U.S. 749, 766 (1975)). 3 The first step in the administrative review process is an initial determination, which 4 is binding unless a claimant requests reconsideration of the initial determination. 20 C.F.R. 5 § 404.905. If the claimant is dissatisfied with the reconsideration determination, then the 6 third step requires that the claimant proceed to a hearing before an ALJ, and the ALJ’s 7 decision is binding if a claimant does not seek the fourth step of Appeals Council review. 8 Id. §§ 404.955. If the claimant seeks Appeals Council review, the Appeals Council may 9 deny the request, making the ALJ’s decision final, or review the case and make a final 10 decision. Id. §§ 404.967, 404.981. 11 The Appeals Council’s decision, or the ALJ’s decision if the request for review is 12 denied, is binding unless an action for federal district court review is filed within 60 days 13 after receiving notice of the Appeals Council’s action. Id. §§ 404.981, 422.210. Under the 14 regulations, a claimant has exhausted his administrative remedies, and a judicially reviewable 15 final decision is available, only if the claimant completes the administrative review process 16 and receives either an Appeals Council decision or an Appeals Council notice that a request 17 to review the ALJ’s decision has been denied. Id. §§ 404.981, 422.210. “If a claimant fails 18 to request review from the [Appeals] Council, there is no final decision and, as a result, no 19 judicial review in most cases. In administrative-law parlance, such a claimant may not obtain 20 judicial review because he has failed to exhaust administrative remedies.” Sims, 530 U.S. 21 106–07 (citations and footnote omitted). 22 IV. Analysis 23 Plaintiff alleges as a jurisdictional basis for his complaint that the Court has 24 “jurisdiction over said subject matter in accordance with Federal Rules of Civil Procedure 25 and federal law.” (Dkt. 1.) Plaintiff also alleges that the SSA has wrongfully withheld 26 Plaintiff’s Social Security benefits in an amount equal to $24,700.00. (Id.) 27 Plaintiff’s claim concerns the SSA’s decision to withhold Social Security benefits on 28 the grounds of overpayment. Accordingly, Plaintiff’s ability to seek judicial review for his -5- 1 claim clearly is governed by Section 405(g). Defendant argues that Plaintiff has not 2 demonstrated that Plaintiff received a final decision under the Act, which is a prerequisite 3 for the Court’s subject matter jurisdiction. In the context of a Social Security appeal case, 4 federal court jurisdiction depends on whether there was a final decision under Section 405(g). 5 See Matlock v. Sullivan, 908 F.2d 492, 493 (9th Cir. 1990). 6 Plaintiff’s allegations in the Complaint, and arguments and attachments in his 7 response demonstrate that no final decision has been reached regarding the withholding of 8 Plaintiff’s Social Security benefits. Plaintiff requested a waiver of the withholding of the 9 past-due benefit amount, but the waiver was denied pursuant to the December 1, 2010 notice. 10 There is no evidence that Plaintiff further appealed that waiver. Further, there is no evidence 11 that Plaintiff appealed any of the SSA’s decisions regarding the withholding of Plaintiff’s 12 Social Security benefits. The record before the Court does not contain an Appeals Council’s 13 decision or denial of review, or even a completed “Request for Reconsideration” form 14 indicating that Plaintiff has appealed the SSA’s initial determination. 15 Therefore, the Court finds that Plaintiff has failed to exhaust his administrative 16 remedies, because a final decision has not been reached by the SSA. Pursuant to 42 U.S.C. 17 § 405(g) and (h), Plaintiff is not entitled to judicial review of the SSA’s withholding of his 18 Social Security benefits until he has exhausted his administrative remedies. The Court does 19 not have subject matter jurisdiction to hear this matter, and the Complaint must be dismissed 20 pursuant to Defendant’s Rule 12(b)(1) motion. 21 Accordingly, 22 IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss (Dkt. 10) for lack 23 of subject matter jurisdiction is GRANTED without prejudice. The Clerk of the Court is 24 directed to close this case. 25 DATED this 31st day of May, 2011. 26 27 28 -6-

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