Benavides v. Commissioner of Social Security

Filing 18

MEMORANDUM DECISION & ORDER It is hereby Ordered that Respondent's 9 MOTION to Dismiss is GRANTED. Signed by Judge Ronald E. Bush. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
DISTRICT OF IDAHO
MIGUEL BENAVIDES,

Case No.: 1:13-cv-00365-REB

Petitioner,

MEMORANDUM DECISION AND
ORDER RE: RESPONDENT’S
MOTION TO DISMISS

vs.
CAROLYN W. COLVIN, Acting Commissioner of
Social Security,

(Docket No. 9)

Respondent.

Now pending before the Court is Respondent’s Motion to Dismiss (Docket No. 9).
Having carefully considered the record and otherwise being fully advised, the Court enters the
following Memorandum Decision and Order:
I. BACKGROUND
Petitioner seeks judicial review of the denial of a claim for benefits under Titles II and
XVI of the Social Security Act. Through its Motion to Dismiss, however, Respondent argues
that Petitioner has failed to exhaust administrative appeal remedies with respect to that claim for
benefits. The relevant factual/procedural background includes:
1.

Petitioner filed applications for a Period of Disability, Disability Insurance

Benefits (Title II) and for Supplemental Security Income payments (Title XVI) on March 31,
2009. See Weigel Decl., ¶ 3(a) (Docket No. 11) (citing Ex. 1 (Docket No. 12)). These cases
were denied by the State Agency on July 13, 2009. See id.
2.

Petitioner’s September 10, 2009 reconsideration request was denied on November

5, 2009. See Weigel Decl., ¶ 3(b) (Docket No. 11) (citing Ex. 2 (Docket No. 12, Att. 1)).

MEMORANDUM DECISION AND ORDER - 1

3.

On November 30, 2009, Petitioner filed a Request for Hearing before an

Administrative Law Judge (“ALJ”). See Weigel Decl., ¶ 3(c) (Docket No. 11) (citing Ex. 3
(Docket No. 12, Att. 2)).
4.

On January 25, 2011, ALJ Lloyd E. Hartford held a hearing in Boise, Idaho, at

which time Petitioner, represented by attorney Josh Decker, appeared and testified. See Ex. 3
(Docket No. 12, Atts. 2-5). A medical expert, Kristy Farnsworth, Ph.D., and a vocational expert,
Anne F. Aastum, also appeared and testified. See id.
5.

On March 31, 2011, the ALJ issued a decision denying Petitioner’s claims,

finding that Petitioner was not disabled within the meaning of the Social Security Act. See
Weigel Decl., ¶ 3(c) (Docket No. 11) (citing Ex. 3 (Docket No. 12, Atts. 2-5)).
6.

On April 20, 2011, Petitioner requested review from the Appeals Council. See

Weigel Decl., ¶ 3(d) (Docket No. 11) (citing Ex. 4 (Docket No. 12, Att. 7)). At this time,
Petitioner was represented by attorney Jessica B. Bublitz. See Ex. 4 (Docket No. 12, Att. 7).
7.

On June 7, 2011, Petitioner filed a subsequent application for benefits. See

Weigel Decl., ¶ 3(e) (Docket No. 11) (citing Ex. 4 (Docket No. 12, Att. 8).
8.

On July 20, 2012, the Appeals Council vacated the March 31, 2011 decision and

remanded the action to an ALJ for further proceedings, in addition to combining Petitioner’s
June 7, 2011 claims into the remanded action. See Weigel Decl., ¶ 3(d) (Docket No. 11) (citing
Ex. 4 (Docket No. 12, Att. 7) (“The claimant filed a subsequent claim for Title II and Title XVI
benefits on June 7, 2011. The Appeals Council’s action with respect to the current claims
renders the subsequent claims duplicate. Therefore, the [ALJ] will associate the claim files and
issue a new decision on the associated claims.”)).

MEMORANDUM DECISION AND ORDER - 2

9.

On July 16, 2013, ALJ Lloyd Hartford held a second hearing in Boise, Idaho, at

which time Petitioner, represented by attorney Jessica Bublitz, appeared and testified. See Ex. 4
(Docket No. 12, Atts. 8-11).1 A medical expert, James R. Bruce, Ph.D., and a vocational expert,
John F. Hurst, also appeared and testified. See id.
10.

On August 9, 2013, the ALJ issued a second decision denying Petitioner’s claims,

finding again that Petitioner was not disabled within the meaning of the Social Security Act. See
Weigel Decl., ¶ 3(e) (Docket No. 11) (citing Ex. 4 (Docket No. 12, Atts. 8-11)). This decision
addressed Petitioner’s June 7, 2011 claims. See Ex. 4 (Docket No. 12, Att. 8) (“In addition, the
undersigned notes that the claimant filed a subsequent claim for title II and Title XVI benefits on
June 7, 2011. Pursuant to the Appeals council’s Remand Order, these subsequent claims have
been associated with the initial claim file, and this decision will address all of the associated
claims.”). Relevant here, the ALJ’s Notice of Decision indicated, inter alia, that:
•

If Petitioner disagreed with the decision, he could “file an appeal with the
Appeals Council” within 60 days, while also providing instructions on how
to file an appeal.

•

If Petitioner filed an appeal, “[t]he Appeals Council will send [him] a notice
telling [him] what it decides to do” and “[i]f the Appeals Council denies [his]
appeal, [the ALJ’s] decision will become the final decision.”

•

If Petitioner did not appeal and the Appeals Council did not review the
decision on its own, the “decision will become final” and can be changed

1

Petitioner submits that, after the Appeals Council’s July 20, 2012 Notice, “[t]he case
was then heard by the ALJ again at a hearing, which took place at the end of 2012, and after that
hearing new evidence was added to the file, so the claimant requested a Supplemental Hearing,
which was then held on May 28, 2013 telephonically.” Opp. to Mot. to Dismiss, p. 2 (Docket
No. 13). While this may be true, Petitioner does not cite to any evidence in the record to support
such statements. Even so, any discrepancy in this respect in this respect is immaterial to the
Court’s resolution of Respondent’s Motion to Dismiss when considering that the product of any
interim hearing(s) is the undisputed August 9, 2013 decision (see infra).
MEMORANDUM DECISION AND ORDER - 3

only under special circumstances” but that “[he] will not have the right to
Federal court review.”
•

If Petitioner disagreed with the decision, “[he] should file an appeal within
60 days.”

Id. (emphasis added).
11.

On August 19, 2013, Petitioner filed a Petition for Review in this Court, claiming

that “[t]his action is an appeal from a final administrative decision denying petitioner’s claim and
commenced within the appropriate time period set forth in the Action of Appeals Council on
Request for Review dated 08/09/2013.” Pet. for Review (Docket No. 1).
12.

On November 27, 2013, Respondent moved to dismiss Petitioner’s claims for

failure to exhaust administrative appeal remedies and, in turn, this Court’s lack of subject-matter
jurisdiction. See Mot. to Dismiss, pp. 1-2 (Docket No. 9). Specifically, Respondent argues that,
because Petitioner did not appeal ALJ’s August 9, 2013 decision to the Appeals Council,
Petitioner did not exhaust his administrative remedies and, as a result, Petitioner’s claims should
be dismissed. See generally Mem. in Supp. of Mot. to Dismiss (Docket No. 9, Att. 1); see also
generally Reply in Supp. of Mot. to Dismiss (Docket No. 14). Petitioner opposes Respondent’s
Motion to Dismiss, arguing that “(1) to further delay this claimant’s ability to have his case
heard in court, after the lengthy amount of years this has taken to even get adjudicated to this
point, would be an abuse of his Constitutional due process of law, and (2) the administrative
remedies have been exhausted, because the Appeals Council already reviewed the case and
issued a decision, outlining what issues the ALJ needed to reconsider.” Opp. to Mot. to Dismiss,
p. 2 (Docket No. 13).

MEMORANDUM DECISION AND ORDER - 4

II. DISCUSSION
Federal courts are courts of limited jurisdiction and can only exercise power as
“authorized by Article III of the Constitution and the statutes enacted by Congress pursuant
thereto.” Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 (1986). Congress, acting
within its constitutional powers, can therefore prescribe the procedures and conditions necessary
for judicial review of administrative orders. See Tacoma v. Taxpayers of Tacoma, 357 U.S. 320,
336 (1958); American Power & Light Co. v. S.E.C., 325 U.S. 385, 389 (1945). Pertinent here,
Congress has done so in Title II of the Social Security Act which limits a federal court’s
jurisdiction to “final decisions” of the Commissioner of Social Security:
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.
42 U.S.C. § 405(g) (emphasis added). Additionally, § 405(h) states: “No findings of fact or
decision of the Commissioner of Social Security shall be reviewed by any person, tribunal or
government agency except as provided herein.” 42 U.S.C. § 405(h). Therefore, a “final
decision” is a jurisdictional prerequisite for judicial review.
Not all agency determinations are final decisions triggering the right of judicial review.
See Califano v. Sanders, 430 U.S. 99, 107-08 (1977). The Social Security Act does not define
which decisions are considered final for purposes of judicial review; rather, it is up to the
Commissioner to establish by regulation what constitutes a “final decision.” See 42 U.S.C.
§ 405(a); see also Weinberger v. Salfi, 422 U.S. 749, 766 (1975). “The statutory scheme is thus
one in which the [Commissioner] may specify such requirements for exhaustion as he deems
serve his own interests in effective and efficient administration.” Weinberger, 422 U.S. at 766.

MEMORANDUM DECISION AND ORDER - 5

This Court lacks jurisdiction to review the merits of Petitioner’s claim because the ALJ’s
August 9, 2013 is not a final decision under 42 U.S.C. § 405(g). Under the Commissioner’s
regulations, a final decision required for judicial review is achieved only by exhaustion of
administrative remedies. In Weinberger, the Supreme Court stated:
Exhaustion is generally required as a matter of preventing premature interference
with agency processes, so that the agency may function efficiently and so that it may
have an opportunity to correct its own errors, to afford the parties and the courts the
benefits of its experience and expertise, and to compile a record which is adequate
for judicial review.
Id. at 765. Applied to the instant case, exhaustion of administrative remedies involves, first, a
hearing before an ALJ, followed by, second, an appeal to, and consideration by, the Appeals
Council. See, e.g., 20 C.F.R. 422.210(a) (“A claimant may obtain judicial review of a decision
by an [ALJ] if the Appeals Council has denied the claimant’s request for review, or of a decision
by the Appeals Council when that is the final decision of the Commissioner.”); see also Bass v.
Social Sec. Admin., 872 F.2d 832, 833 (9th Cir. 1989) (“The decision made following the hearing
does not become the final decision of the Secretary until the claimant requests review by the
Appeals Council, and the Appeals Council either grants or denies review.”) (citations omitted).
That never happened here.
It is true that Petitioner appealed the ALJ’s first, March 31, 2011 decision to the Appeals
Council on April 20, 2011. See supra. However that is not the decision that Petitioner now
challenges and asks this Court to reverse – if it was, and the Appeals Council had either rendered
a decision or denied Petitioner’s request for review, this Court would arguably have jurisdiction
to consider a related petition for review. But the Appeals Council neither issued a decision nor
denied Petitioner’s request for review; instead, on July 20, 2012, it simply vacated the ALJ’s

MEMORANDUM DECISION AND ORDER - 6

March 31, 2011 decision and remanded the action to the ALJ for further proceedings. See supra.
The ALJ then conducted another hearing (absorbing the Appeals Council’s direction that
motivated remand in the first instance), before issuing a second decision on August 9, 2013. See
supra. It is this latter decision that Petitioner expressly seeks to overturn via this action. But
Petitioner never requested review from the Appeals Council as to that, later in time, decision,
choosing instead to file his Petition for Review in this Court on August 19, 2013.2
In filing this action without first requesting review from the Appeals Council, Petitioner
stepped over the requirement to exhaust administrative remedies. Petitioner’s failure to exhaust
administrative remedies prevents this Court from extending subject matter jurisdiction over
Petitioner’s claims. See, e.g., Sims v. Apfel, 530 U.S. 103, 107 (2000) (“If a claimant fails to
request review from the Council, there is no final decision and, as a result, no judicial review in
most cases. In administrative-law parlance, such a claimant may not obtain judicial review
because he has failed to exhaust administrative remedies.”) (internal citations omitted). This
circumstance was expressly laid out before Petitioner within the ALJ’s August 9, 2013 Notice of
Decision, which said that: (1) Petitioner could file an appeal with the Appeals Council; (2) if
Petitioner appealed and the Appeals Council denied his appeal, the ALJ’s decision would

2

Curiously, Petitioner’s Petition for Review states in no uncertain terms that “[t]his
action is an appeal from a final administrative decision denying petitioner’s claim and
commenced within the appropriate time period set forth in the Action of Appeals Council on
Request for Review dated 08/09/2013.” Supra (emphasis added). But there is no such “Action
of Appeals Council on Request for Review dated 08/09/2013” in the record. Indeed, Petitioner’s
briefing in opposition to Respondent’s Motion to Dismiss seems to concede that no such request
for review was ever pursued, arguing instead that no such request was needed in order to exhaust
his administrative remedies prior to filing his Petition for Review. But, if that is Petitioner’s
position, what point is it to reference an apparently non-existent “Action on Appeals Council on
Request for Review dated 08/09/2013" within his Petition for Review. In the Court’s mind, this
oddity raises more questions than answers.
MEMORANDUM DECISION AND ORDER - 7

become the final decision; (3) if Petitioner did not appeal to the Appeals Council, he would not
have the right to judicial review; and (4) if Petitioner disagreed with the ALJ’s decision, he
should file an appeal within 60 days. See supra. Simply put, because Petitioner did not appeal
the ALJ’s August 9, 2013 decision, he did not exhaust his administrative remedies, leaving this
Court without subject matter jurisdiction to consider Petitioner’s Petition for Review. See, e.g.,
Ingram v. Commissioner of Social Sec., 401 Fed. Appx. 234, *1 (9th Cir. 2010) (“The district
court properly dismissed the claims arising under the Social Security Act for lack of subject
matter jurisdiction because Ingram failed to exhaust his administrative remedies before seeking
judicial review); Bass, 872 F.2d at 833 (9th Cir. 1989) (“A claimant’s failure to exhaust the
procedures set forth in the Social Security Act, 42 U.S.C. § 405(g), deprives the district court of
jurisdiction.”). Therefore, Respondent’s Motion to Dismiss is granted.
Although not argued by Petitioner, the Ninth Circuit has adopted a three-part test for
determining whether a particular case merits waiver of the Social Security Act’s exhaustion
requirement. “‘The claim must be (1) collateral to a substantive claim of entitlement
(collaterality), (2) colorable in its showing that denial of relief will cause irreparable harm
(irreparability), and (3) one whose resolution would not serve the purposes of exhaustion
(futility).’” Kildare v. Saenz, 325 F.3d 1078, 1082 (9th Cir. 2003) (quoting Johnson v. Shalala, 2
F.3d 918, 921 (9th Cir. 1993)). It is unfortunate that the course of events described above remove
this case from the possibility of judicial review here, given the length of time that has already
transpired in regard to the ultimate decisions upon Petitioner’s claims. Petitioner argues that
review by this Court is appropriate to avoid further delay and because the “Appeals Council
already reviewed the case and issued a decision” (see supra). Such arguments do not, however,

MEMORANDUM DECISION AND ORDER - 8

satisfy any of the elements needed to set aside the Social Security Act’s exhaustion requirement
as set out in Kildare.
III. ORDER
Based on the foregoing, IT IS HEREBY ORDERED that Respondent’s Motion to
Dismiss is GRANTED.
DATED: June 10, 2015

Honorable Ronald E. Bush
U. S. Magistrate Judge

MEMORANDUM DECISION AND ORDER - 9