Perkins v. SSA
MEMORANDUM OPINION & ORDER: Defendant's Motion to Dismiss, transformed into a Motion for Summary Judgment (DE 30 ), is GRANTED. The parties shall advise Court by no later than January 3, 2017 whether they wish to have the issues addressed in this Memorandum Opinion and Order rendered final for the purposes of appeal although other claims remain pending at this time. Signed by Judge Joseph M. Hood on 12/16/2016. (TDA)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION at PIKEVILLE
JOHN LEE PERKINS,
CAROLYN COLVIN, Acting
Commissioner of Social
Civil Case No. 16-cv-35-JMH
MEMORANDUM OPINION & ORDER
Commissioner’s Motion to Dismiss [DE 30] Counts I, II, III, IV,
V and VI of Plaintiff’s Amended Complaint pursuant to Fed. R.
Civ. P. 12(b)(6) for failure to state a claim.
filed a Response [DE 42], stating his objections to the Motion,
and the Acting Commissioner has filed a Reply [DE 44] in further
support of her Motion.
The Court provided notice to the parties
judgment in part and provided the parties time to respond [DE 48
transformation, the matter is now ripe for review.
there are no disputes regarding the material facts, and because
resolution of the legal issues favor the defendant, for all of
the reasons stated below, the Acting Commissioner’s Motion will
As the Court has previously recounted in its decision on
Plaintiff’s Motion for Preliminary Injunction [DE 46], Plaintiff
Perkins resides in Pike County, Kentucky.
On September 27,
2006, Plaintiff filed applications for benefits under Title II
“SSI”) of the Social Security Act, claiming disability since
September 30, 2005, as a result of Meniere’s disease, a disorder
of the inner ear causing such symptoms as vertigo, pain, and
After his claims were initially denied, Perkins
obtained the assistance of attorney Eric C. Conn in prosecuting
his application. Perkins submitted new evidence and requested a
Daugherty found that Perkins had been disabled since September
30, 2005, based in part on the examination and report of Dr.
underwent a continuing disability review by another physician
who concluded that he was still disabled.
[See DE 13-1, PageID
Conn, Huffnagle, and Daugherty have since been implicated
in a scheme to defraud the Social Security Administration, which
scheme is the basis for the present controversy.
General had discovered reason to believe that Conn or his firm
submitted pre-completed “template” residual functional capacity
concerning this scheme, the United States alleges that Daugherty
assigned Conn’s cases to himself and solicited falsified medical
evidence from Conn so that he could issue favorable on-therecord decisions without hearings.1 For his part, Conn allegedly
reports to doctors, including Huffnagle, who signed them without
amendment. After an award of benefits to his client, the United
States alleges that Conn received fees from the Social Security
Administration and withdrew cash from business account to make
payments to Daugherty.
This scheme was the subject of an investigation by the
Social Security Administration’s Office of the Inspector General
(“OIG”), which spanned the years from 2007 to 2015. The OIG sent
On April 1, 2016, a federal grand jury returned an indictment in this
district against Eric Conn, David Daugherty, and Alfred Adkins containing 18
substantive counts, as well as several forfeiture counts. [See Lexington
Criminal Action No. 5: 16-00022-DCR.] That case remains pending at this time,
with a trial scheduled in 2017.
U.S.C. § 1320a-8(1), advising that it had reason to believe
fraud was involved in 1,787 applications, all involving Conn.
The initial referral was made with no adverse action to be taken
against the applicants until further notice. Further notice came
on May 12, 2015, when the OIG notified the Commissioner that it
administrative processing of the redeterminations of the 1,787
individuals whose names were previously provided by OIG to [the
agency] on July 2, 2014.”
Via letters sent six days later and
captioned “Notice of Appeals Council Action," the Commissioner
informed those individuals, including Perkins, that the agency
was required to redetermine their benefits under sections 205(u)
and 1631(e)(7) of the Act, 42 U.S.C. §§ 405(u), 1383(e)(7), in
light of the OIG’s notification.2
Perkins’s case was then remanded to a new ALJ for a new
hearing, and he was permitted to submit further evidence to the
As in its decision on Plaintiff’s Motion for Preliminary Injunction, the
Court adopts and incorporates the detailed description of this process, how
it came to be, and how it was applied in the matters which were allegedly
part and parcel of the Conn scheme from Section I of Judge Reeves’ October 6,
2016, Memorandum Opinion and Order in Carter v. Comm’r of Soc. Sec., Civil
Action No. 0:16-cv-00017-DCR, DE 24 at 3-6 (E.D. Ky.), and Griffith v. Comm’r
of Soc. Sec., Civil Action No. 7:16-cv-00101-DCR, DE 34 at 3-6 (E.D. Ky.),
and from Section I(a) and (b) of his subsequent November 15, 2016, decision
on the Motions to Dismiss, transformed into Motions for Summary Judgment, in
a series of cases including Carter and Griffith, Civil Actions No. 0:16-017DCR, 0:16-061-DCR, 7:16-051-DCR, 7:16-059-DCR, 7:16-068-DCR, 7:16-075-DCR,
7:16-101-DCR, and 7:16-153-DCR, from across the Eastern District of Kentucky,
dated. Notably, Perkins has not challenged Congressional authority to
legislate the redetermination process or, for that matter, to define what
evidence may be considered during the consideration of an application for
benefits under the Social Security Act.
ALJ prior to the new hearing.
Perkins attended his new hearing
on November 15, 2015, with counsel and cobbled together some
medical records, mostly for the period after July 6, 2007.
December 29, 2015, disregarding Dr. Huffnagle’s report and the
Perkins then submitted his case to the Appeals
January 28, 2016. The denial constitutes final agency action,
U.S.C. § 405(g) on March 25, 2016.
In his Complaint, Plaintiff challenged the merits of the
failure to bring a timely action and violating Plaintiff’s due
[DE 1 at PageID #3.] The Court has already
denied Plaintiff’s Motion for Preliminary Injunction, and now
relief on the undisputed facts.
The Acting Commissioner argues
that Perkins cannot demonstrate, as a matter of law, that he was
denied the process that he was due under the Fifth Amendment to
the United States Constitution by the Acting Commissioner when
his matter was subjected to determination in spite of the fact
that the Acting Commissioner has never disclosed what evidence
proves that there was, in fact, reason to believe that fraud was
involved in the original award of benefits to him in 2007 and
notwithstanding the fact that he has not had an opportunity to
challenge the credibility of this evidence.
however, that he was not provided the required opportunity to
challenge the allegations of fraud as a matter of law because
the Appeals Council’s May 18, 2015 notice which commenced his
redetermination process “summarily accepted the allegation that
‘there was reason to believe fraud was involved.’”
PageID # 95.]
He argues that, while he has no right to a full
Mathews v. Eldridge, 424 U.S. 319 (1976), he should have an
opportunity to challenge the conclusion that there was reason to
believe that fraud was involved in obtaining his initial award
Procedures Act (“APA”), 5 U.S.C. § 556(d)-(e), and the Social
Security Act, 42 U.S.C. § 405(b), nor that there has been a
violation of the APA, 5 U.S.C. § 554(d), because the Appeals
supervision or direction of an employee or agent engaged in the
agency,” i.e., the Office of Inspector General.
Commissioner also argues, as a matter of law, that they agency
did not fail to “immediately” redetermine his entitlement to or
that fraud or similar fault was involved in the application” for
initial complaints regarding the alleged fraud that triggered
The Court has carefully considered the arguments of the
parties, all of which were also raised by the parties in Carter
v. Colvin, Civil Action No. 0:16-cv-00017-DCR, and Griffith v.
Colvin, Civil Action No. 7:16-cv-00101-DCR, as well as the other
cases considered by Judge Reeves, Civil Action No. 0: 16-061DCR, 7:16-051-DCR, 7: 16-059-DCR, 7: 16-068-DCR, 7: 16-075-DCR,
and 7:16-153-DCR, and concludes that judgment is warranted in
favor of the Acting Commissioner on these claims as a matter of
Reeves’s conclusion and the reasons for his decision in the
cases referenced above.
Accordingly, the undersigned adopts and
incorporates the reasoning articulated in sections II, III(a)(i)
and (ii), III(b), III(c), and III(d) of Judge Reeves’ November
15, 2016, opinion as his own, without restating that reasoning
in its entirety here.
The remainder of this Memorandum Opinion
and Order will deal with the undersigned’s additional thoughts
on the matter.
No one disputes that, apart from the general allegations
against Conn, Daugherty, Adkins and Huffnagle, Perkins has not
It is also true that Perkins has not yet had an
opportunity to directly rebut the assertion there is reason to
However, the decision to revoke Perkins’s benefits did not hinge
on the fraud allegation.
Rather, the revocation was premised on
the lack of sufficient evidence to support the initial benefits
Thus, because Perkins was given a full opportunity to
supplement and/or develop new evidence to substitute for the
fraud), he was not denied due process.
Neither did the Acting
Commissioner wrongfully deny Perkins the process provided by the
reopening procedures of the Social Security Act since the matter
was properly addressed under the procedures for reconsideration.
Finally, the Court is not persuaded that the Acting Commissioner
Administrative Procedures Act.
The Court would make one additional point:
decide what evidence is or what evidence may be considered is
In the undersigned’s mind, the Congressional
ability to exclude consideration of evidence for which
is reason to believe that fraud or similar fault was involved in
the providing of such evidence[,]” 42 U.S.C. § 205(u)(1)(B),
disability by pneumoconiosis with respect to a living miner’s
claim for benefits under the Black Lung Benefits Act under 30
U.S.C. § 921(c)(1)(4) or, for that matter, the ability to define
irrelevant evidence in Federal Rules of Evidence 401 and 402
authority to make legislation regarding what evidence may be
considered in evaluating a claim under the Social Security Act
or during a reconsideration of a claim by the agency, but his
argument comes terribly close to conflating legislative concerns
The undersigned believes that the analysis that it
has adopted and incorporated here draws the distinction more
finally and in keeping with the due process obligations of the
United States Constitution and statutes applicable to cases like
the one at bar.
It seems that, in the absence of some evidence in the form
of testimony about any disabling limitations experienced as a
result of Meniere’s disease in a hearing before an ALJ, which
one might expect from the claimant’s own testimony or other
witnesses, Plaintiff has a difficult job ahead of him on the
remaining issue in this case.
That said, whether the Acting
Commissioner was left with substantial evidence to support her
decision on reconsideration of Perkins’s claim is a matter for
Dismiss, transformed into a Motion for Summary Judgment [DE 30],
The parties shall advise the Court by no later than
January 3, 2017 whether they wish to have the issues addressed
in this Memorandum Opinion and Order rendered final for the
purposes of appeal although other claims remain pending at this
This the 16th day of December, 2016.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?