Spagnolo v. Social Security Administration

Filing 14

ORDER: (1) DENYING PLAINTIFF'S OBJECTIONS TO THE FINDINGS AND RECOMMENDATION 9 AND (2) ADOPTING THE MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION 6 . Signed by JUDGE DAVID ALAN EZRA on 7/19/2011. (afc)CERTIFICAT E OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII

NICK SPAGNOLO,

)
)
Plaintiff,
)
vs.
)
)
UNITED STATES SOCIAL
)
SECURITY ADMINISTRATION, )
)
Defendant.
)
_____________________________ )

CV. NO. 11-00353 DAE-RLP

ORDER: (1) DENYING PLAINTIFF’S OBJECTIONS TO THE FINDINGS AND
RECOMMENDATION AND (2) ADOPTING THE MAGISTRATE JUDGE’S
FINDINGS AND RECOMMENDATION
Pursuant to Local Rule 7.2(d), the Court finds this matter suitable for
disposition without a hearing. After reviewing the motions and the supporting and
opposing memoranda, the Court: (1) DENIES Plaintiff’s Objections to the
Findings and Recommendation (Doc. # 9) and (2) ADOPTS the Magistrate
Judge’s Findings and Recommendation (Doc. # 6).
BACKGROUND
Plaintiff Nick Spagnolo’s (“Plaintiff”) four-page complaint relates to
claims for disability, Social Security Disability, Insurance benefits, and
Supplemental Security Income benefits. (See “Compl.,” Doc. # 1.) Plaintiff first

“seeks to recover damages in the amount of $4,750 as satisfaction in this
complaint.” (Id. ¶ 2.) Plaintiff next claims he is entitled to $75,000 in lost income
“due to the [Social Security Administration’s] failure to initiate and complete an
investigation of unpaid taxes by past employers.” (Id. ¶ 5.) Plaintiff also accuses
Defendant of “refus[ing] assistance and [on two occasions] violating [his] rights
[by] asking security to remove [him] from the local office.” (Id. ¶ 7.) Plaintiff
finally alleges that he has been underpaid in his current Supplemental Security
Income benefits. (Id. ¶ 9.)
Plaintiff’s Application to Proceed Without Payment of Fees
(“Application”) notes that Plaintiff has been unemployed since January 2010.
(“Appl.,” Doc. # 2, at 1.) Plaintiff claims that he receives approximately $380 per
month in life insurance beneficiary payments and approximately $670 per month in
Supplemental Security Income. (Id. at 2.) Plaintiff’s Application also states he has
about $3,000 in a bank account from disability pay for dental repairs. (Id.)
On June 17, 2011, United States Magistrate Judge Richard L. Puglisi
issued a Findings and Recommendation that Plaintiff be given leave to file an
amended Complaint and that his Application to proceed without prepayment of
fees be denied. (See “FR,” Doc. # 6.) Judge Puglisi found that the Complaint
failed to satisfy Federal Rule of Civil Procedure (“Rule”) 8 because Plaintiff “has
2

not alleged facts sufficient to show that he has exhausted his administrative
remedies before seeking judicial review.” (Id. at 4.) Judge Puglisi meticulously
reviewed Plaintiff’s exhibits attached to the Complaint, (id. at 6–7,) and ultimately
concluded that Plaintiff should be granted leave to file an amended complaint
addressing the deficiencies. (Id. at 7–8.) Because Judge Puglisi found the
Complaint wanting, he also recommended that “Plaintiff’s Application be denied
and that Plaintiff be given leave to file another Application if he chooses to file an
amended complaint.” (Id. at 8.) On June 27, 2011, Plaintiff filed his Objections to
the Findings and Recommendation. (“Obj.,” Doc. # 9.)
STANDARD OF REVIEW
Pursuant to 28 U.S.C. § 636(b)(1)(A), a district judge may designate a
magistrate judge to hear and decide a pretrial matter pending before the court. The
decision of the magistrate judge on non-dispositive matters is final. Bhan v. NME
Hosp., Inc., 929 F.2d 1404, 1414 (9th Cir. 1991). However, a district judge may
reconsider a magistrate’s order on these non-dispositive pretrial matters and set
aside that order, or any portion thereof, if it is “clearly erroneous or contrary to
law.” Fed. R. Civ. P. 72(a); 28 U.S.C. § 636(b)(1)(A); LR 74.1; see Rivera v.
NIBCO, Inc., 364 F.3d 1057, 1063 (9th Cir. 2004); see also Osband v. Woodford,
290 F.3d 1036, 1041 (9th Cir. 2002).
3

The threshold of the “clearly erroneous” test is high. See Boskoff v.
Yano, 217 F. Supp. 2d 1077, 1084 (D. Haw. 2001). The magistrate judge’s factual
findings must be accepted unless the court is “left with the definite and firm
conviction that a mistake has been committed.” United States v. Silverman, 861
F.2d 571, 576–66 (9th Cir. 1988). “The reviewing court may not simply substitute
its judgment for that of the deciding court.” Grimes v. City & Cnty. of S.F., 951
F.2d 236, 241 (9th Cir. 1991).
“A decision is ‘contrary to law’ if it applies an incorrect legal standard
or fails to consider an element of the applicable standard.” Na Pali Haweo Cmty.
Ass’n v. Grande, 252 F.R.D. 672, 674 (D. Haw. 2008); see Hunt v. Nat’l
Broadcasting Co., 872 F.2d 289, 292 (9th Cir. 1989) (noting that such failures
constitute abuse of discretion).
DISCUSSION
Pursuant to Rule 8 of the Federal Rules of Civil Procedure, a pleading
that states a claim for relief must contain a “a short plain statement of the grounds
for the court’s jurisdiction” and “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “Each allegation must
be simple, concise, and direct.” Fed. R. Civ. P. 8(d)(1).

4

A complaint must contain more than a “formulaic recitation of the
elements of a cause of action”; it must contain factual allegations sufficient to
“raise a right of relief above the speculative level.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007). “The pleading must contain something more . . . than
. . . a statement of facts that merely creates a suspicion [of] a legally cognizable
right of action.” Id. (citation omitted). The complaint must provide enough
information so that the defendant can respond to the allegations and fashion
meaningful discovery requests. McHenry v. Renne, 84 F.3d 1172, 1178 (9th Cir.
1996). Furthermore, the “complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570).
With respect to Social Security and related benefits “[a]ny individual,
after final decision of the Commissioner of Social Security made after a hearing to
which he was a part . . . may obtain a review of such decision by a civil action
commenced within sixty days after mailing to him notice of such decision . . . .”
See 42 U.S.C. § 405(g). This exhaustion requirement is “‘the sole avenue for
judicial review’ for claims ‘arising under’ the Medicare Act.” Do Sung Uhm v.
Humana, Inc., 620 F.3d 1134, 1140 (9th Cir. 2010) (quoting Heckler v. Ringer,
466 U.S. 602, 614–15 (1984)). The Supreme Court has clarified that “the
5

exhaustion requirement of § 405(g) consists of a non-waivable requirement that a
claim for benefits shall have been presented to the Secretary, and a waivable
requirement that the administrative remedies prescribed by the Secretary be
pursued fully by the claimant. Heckler, 466 U.S. at 617 (quotations and citations
omitted). “Only once the Secretary has issued a ‘final decision’ may the individual
seek judicial review of that determination.” Do Sung Uhm, 620 F.3d at 1140. A
“final decision” is rendered only after the individual has “pressed his claim”
through all levels of administrative review. Heckler, 466 U.S. at 605
Looking at the Complaint before it, the Court cannot conclude that
Judge Puglisi in any way erred. The Complaint simply does not explain which
decision or decisions of the Social Security Administration Plaintiff is challenging.
As Judge Puglisi noted, Plaintiff provided excerpts of three decisions by the Social
Security Administration. One includes a receipt of notice that Plaintiff should
appeal his decision to the Appeals Council. (See Doc. # 1, at 1–19.) Plaintiff does
not, however, plead or allege facts which suggests he so appealed. Plaintiff also
includes a Request for Reconsideration form that he filed with the Social Security
Administration’s Honolulu Office on April 25, 2011. (Id. at 69.) Plaintiff does not
plead or allege facts which illuminate the resolution of the request. Finally,
Plaintiff includes portions of a decision regarding his Supplemental Security
6

Income. (Id. at 70.) As Judge Puglisi found, however, it is not clear whether any
of Plaintiff’s claims are based on this decision.
In his Objections, Plaintiff argues primarily the merits of his claim
rather than focus on the specific issue of whether he sufficiently pled jurisdiction.
(See Obj. ¶¶ 7–15.) Plaintiff complains that Judge Puglisi has misunderstood his
complaint and that he has no outstanding disability claim and that instead he
should receive underpayment because of “virtual theft.” (Id. ¶ 1.) This, however,
bolsters Judge Puglisi’s conclusion—if there is no claim to review, the Court
plainly does not have jurisdiction to hear Plaintiff’s Complaint. Plaintiff argues as
well that “the SSDI reference is sufficient on its face, to satisfy jurisdictional
requirements. The court, again, may not impose this cause of action on the pro se
plaintiff.” (Id. ¶ 16.) It is unclear to the Court what precisely Plaintiff means here,
but as long as Plaintiff seeks to recover from the United States Social Security
Administration he must unambiguously demonstrate that he has exhausted his
administrative remedies.1
The Court also wishes to note that to the extent Plaintiff seeks to
1

Indeed, Plaintiff states specifically in his Objections that “[t]his Complaint
is one for ‘underpayments’ which have not been paid under government
regulations” and cites to 42 U.S.C. § 1382(b), a provision of the Medicare Act.
Plaintiff must therefore demonstrate he has exhausted his administrative remedies
to proceed with this action. See Heckler, 466 U.S. at 617.
7

amend his Complaint via his Objections, he may not do so. (See id. ¶ 1 (“It
appears on the face of the order the Judge has referenced as confusion basically the
entire complaint. Therefore I must respond.”) Only an amended pleading can cure
the Rule 8 defect which Judge Puglisi appropriately identified.2
Having concluded that Judge Puglisi correctly found that the
Complaint did not satisfy Rule 8, the Court further concludes that Judge Puglisi
also correctly denied Plaintiff’s Application. “A district court may deny leave to
proceed in forma pauperis at the outset if it appears from the face of the proposed
complaint that the action is frivolous or without merit.” See Tripati v. First Nat.
Bank & Trust, 821 F.2d 1368, 1370 (9th Cir. 1987). Without satisfying Rule 8’s
jurisdiction requirement, Plaintiff could not hope to succeed on the merits.
Accordingly, the Court finds no error with Judge Puglisi’s Findings and
Recommendation.3

2

Indeed, Plaintiff throughout his Objections assert that his Complaint “has
always been one for civil rights violations.” (See, e.g., Obj. ¶ 15.) If Plaintiff
intends to assert a civil rights violation he must clearly amend his Complaint to
reflect as much.
3

The Court notes that Plaintiff has already accepted Judge Puglisi’s
invitation to file an amended complaint. (See Doc. # 13.) Consistent with Judge
Puglisi’s Findings and Recommendations, Plaintiff may now also file another
application to proceed in forma pauperis.
8

CONCLUSION
For these reasons the Court: (1) DENIES Plaintiff’s Objections to the
Findings and Recommendation (Doc. # 9) and (2) ADOPTS the Magistrate
Judge’s Findings and Recommendation (Doc. # 6).
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, July 19, 2011.

_____________________________
David Alan Ezra
United States District Judge

Spagnolo v. United States Social Security Administration, CV 11-00353 DAERLP; ORDER: (1) DENYING PLAINTIFF’S OBJECTIONS TO THE FINDINGS
AND RECOMMENDATION AND (2) ADOPTING THE MAGISTRATE
JUDGE’S FINDINGS AND RECOMMENDATION

9