Ross et al v. Broxton et al

Filing 20

REPORT AND RECOMMENDATIONS re 8 MOTION to Substitute Party and to Dismiss filed by Carolyn W. Colvin, 9 MOTION to Dismiss for Lack of Jurisdiction filed by Carolyn W. Colvin Signed by: Judge Magistrate Judge Thomas M. DiGirolamo. Signed by Magistrate Judge Thomas M. DiGirolamo on 7/29/2015. (c/m 7/29/2015 aos, Deputy Clerk) Modified on 7/29/2015 (aos, Deputy Clerk).

IN THE UNITED STATES DISTRICT COUnT
Fon THE J)JSTnICT OF MAnYLAND
Southern Division

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DANIEL HUBERT ROSS and
AUDREY DELORIS ROSS,
Plaintiffs,

v.

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

Civil No. DKC 14-2967

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nEI'ORT

AND nECOMMENDATlON

PlaintilTs pro se Daniel Ross and Audrey Ross bring this action against Carolyn W.
Colvin, Acting Commissioner

of Social Security ("Defcndant"

seek judicial review of the Commissioner's
The Commissioner
jurisdiction
Plaintirrs

determinations

do not raise a colorable

undersigned

regarding overpayment

They

of benefits.

now moves to dismiss this matter without prejudice for lack of subject-matter

because Plaintiffs have not exhausted

requirement.

or the "Commissioner").]

ECr NO.9.

constitutional

their administrative
claim

remedies and because

such as to waive the exhaustion

Under Standing Order 2014-01, this matter has been rererred to the

ror pretrial management

and ror proposed findings or fact and recommendations

under 28 U.S.C. ~ 636(b)(l )(B) and L.R. 30 I(5)(b)(ix).

No hearing is necessary.

L.R. 105(6).

] After naming R. Jeffries-Broxton. the Social Security Administration, and Carolyn W. Colvin
"in [her] Individual person and official capacity" as Defendants in Plaintiffs' Complaint (ECr
No. I) and "Supplemental" or "Amended" Complaint (ECr Nos. 3, 4), Plaintiffs concede that the
Commissioner in her oflieial capacity should be the sole derendant in this case. Pis.' Corrected
Opp'n to Mot. to Dismiss 3. ECr No. 14. Thus, it is RECOMMENDED
that Derendants'
Motion to Substitute and/or to Dismiss (ECr NO.8) be GRANTED and that Derendants R.
Jeffries-Broxton, the Social Security Administration, and Carolyn W. Colvin in her individual
capacity be DISMISSED.

For the reasons that follow, it is RECOMMENDED
GRANTED

and that the case be DISMISSED

that the Motion to Dismiss (ECF No.9)

WITHOUT

PREJUDICE

be

under Fed. R. Civ.

12(b)( 1) for lack of subject-matter jurisdiction.
BACKGROUND
On May 18,2011, Plaintiff Daniel Ross filed with the Social Security Administration
"SSA") an initial application for monthly retirement benefits.
15; Osborne Dec\. ~ 5(a) & Ex. A, ECF Nos. 9-2, 9-3.

(the

D.H. Ross Decl. ~ 5(a), ECF No.

In connection

with his application,

Mr.

Ross estimated his anticipated earnings for the year. Osborne Decl. ~ 5(b) & Ex. A, ECF Nos. 92,9_3.2

Mr. Ross also aflirmed that he understood that, if he earned more than certain amounts,

he could be liable for repaying any resulting overpayment

of benefits.

Osborne Decl. ~ 5(b) &

Ex. A, ECF Nos. 9.2, 9-3.
On May 23, 2011, Mr. Ross was awarded

retirement

benefits,

and the SSA again

informed him about certain applicable earnings limits. Osborne Dec\. ~ 5(c) & Ex. 13, ECF Nos.
9-2, 9-4.

Specifically,

the SSA informed Mr. Ross that he could continue to work and still

receive retirement benefits, but that, if he exceeded certain earnings limits, his benefit amounts
would be reduced.

Osborne Dec\. '[5(d) & Ex. 13, ECF Nos. 9-2, 9-4. The SSA also informed

Mr. Ross that, if at any time he anticipated that his earnings would exceed the expected earnings
he denoted on his application
accordingly.

for retirement benefits, he should contact the SSA and inform it

Osborne Dec\. ~ 5(d) & Ex. B, ECF Nos. 9-2, 9-4.

On April 17, 2012, Mr. Ross also applied for child's
Audrey Ross, his disabled daughter.

benefits on behalf of Plaintiff

Osborne Decl. ~ 5(e) & Ex. C, ECF Nos. 9-2, 9-5; D.I\.

Mr. Ross disputes that he estimated his anticipated earnings for the year, alleging that "[a]t no
time did [he] aflirm that [he] would stop work so long as [he] was bodily able and could work in
connection with [his] application." D.H. Ross Decl. ~ 5(b), ECF No. 15.
2

2

I

Ross Decl. ~ 5(e), IOcr No. 15. On April 22, 2012, Ms. Ross was awarded monthly child's
benefits on Mr. Ross's account, with Mr. Ross namcd as her represcntative

payee.

Osborne

Decl. ~ 5(t) & Ex. 0, IOcr Nos. 9-2, 9-6; D.H. Ross Dccl. ~ 5(t), IOcr No. 15.
In Scptember 2012, thc SSA became aware that Mr. Ross's earnings had exceeded the
applicable earnings limits.

Osborne Decl. ~ 5(g), ECr No. 9-2. As a result, on September

18,

2012, the SSA notified Mr. Ross that it had overpaid Mr. Ross and his daughter in light of his
earnings in 2011.

Osborne Decl. ,j5(h) & Ex. 10, ECr Nos. 9-2, 9-7. The SSA also informed

Mr. Ross that he had a right to appeal the overpayment
SSA's notice.

within sixty days of his receipt of the

Osborne Decl. ~ 5(i) & Ex. E, ECr Nos. 9-2, 9-7.

Ross did not appeal the overpayment

According to the SSA, Mr.

(Osborne Decl. ~ 5(i), ECr No. 9-2), although Mr. Ross

asserts that he did so (D.H. Ross Decl. ~ 5(i), IOcr No. 15). The SSA also informed Mr. Ross
that he had a right to request that the SSA waive recovery of the overpayment.

Osborne Decl.

'15UJ & Ex. 10, IOcr Nos. 9-2, 9-7.
On September
overpayment.

Osborne

21, 2012,

Mr. Ross requested

Decl. 'j5(k),

the SSA to waive

recovery

IOcr No. 9-2; D.H. Ross Decl. '15(k),

of the

IOcr No. 15.

According to the SSA, Mr. Ross indicated that he did not intend to submit any documentation

in

support of his request (Osborne Decl. ~ 5(k), IOcr No. 9-2), although Mr. Ross asserts that he
"needed time to drive home, gather the necessary documentation,

[and] return to the Agency;

however, the Agency was rushing all claimants in its oftice to finish and leave so it could close
its doors until the ncxt day for business as it pertained to social security benefits" (D.H. Ross
Decl.

'1 5(k),

IOcr No. 15).

On September 24,2012,
overpayment.

Osborne

the SSA denied Mr. Ross's request for waiver of recovery of his

Decl. ~ 5(/), IOcr No. 9-2; D.H. Ross Decl. ~ 5(1), IOcr No. 15.

3

According to the SSA, Mr. Ross did not appeal the SSA's September 24,2012.
request for a waiver (Osborne Decl.

'1 5(f),

denial of his

ECF No. 9-2), although Mr. Ross asserts that he did

so (D.H. Ross Decl. '15(1), ECF No. 15).
On March 25, 2013, Mr. Ross filed with the SSA another request for waiver of recovery
of his overpayment.

Osborne Decl. '15(m), ECF No. 9-2; D.H. Ross Decl. ~ 5(m), ECF No. 15.

Mr. Ross subsequently scheduled an in-person appointment at the SSA's office in Camp Springs,
Maryland.

Osborne Decl. ~ 5(m), ECF No. 9-2; D.H. Ross Decl. ~ 5(m), ECF No. 15. On April

2, 2013, Mr. Ross met with an SSA representative

and agreed that $170 per month would be

withheld from his monthly retirement benefits to reduce the amount of the overpayment
overpayment

until the

was repaid. Osborne Decl. ~ 5(n) & Ex. F, ECF Nos. 9-2, 9-8.

On January 7, 2014, Mr. Ross filed with the SSA another request for waiver of recovery
of the overpayment.
On September

Osborne Decl. ~ 5(0), ECF No. 9-2; D.H. Ross Decl. ~ 5(0). ECF No. 15.

19,2014,

Plaintiffs filed a Complaint in this Court.

24, 2014, the SSA denied Mr. Ross's
Osborne

request

ECF No. I. On September

for waiver of recovery

of the overpayment.

Decl. ~ 5(p) & Ex. G, ECF Nos. 9-2, 9-9; D.H. Ross Decl. ~ 5(p), ECF No. 15.

According to the SSA, Mr. Ross did not appeal this denial (Osborne Dec!. ~ 5(q), ECF No. 9-2),
although Mr. Ross asserts that he did so (D.H. Ross Decl. '15(q), ECF No. 15).
On October 27,2014,
4. The Commissioner

Plaintiffs supplemented

seeks to dismiss Plaintiffs'

or amended their Complaint.
Amended Complaint

jurisdiction

administrative

In response, Plaintiffs filed an Opposition (ECF No. 12)

ECF NO.9.

and a corrected Opposition (ECF No. 14).

4

of Plaintiffs'

under Fed. R. Civ. 1'.

12(b)( I) for lack of subject-matter
remedies.

because

ECF Nos. 3,

failure

to exhaust

STANDARD OF REVIEW
Motions to dismiss for lack of subject-matter jurisdiction
J2(b)(I).

are governed by Fed. R. Civ. P.

The plaintiff bears the burden of proving that subject-matter

jurisdiction

properly

exists in the federal court. See Evans v. B.F. Perkins Co .. a Div. of Standex Int 'I Corp., 166 F.3d
642, 64 7 (4th Cir. 1999).
pleadings"

to help determine

Fredericksburg
Emns,

In a 12(b)( I) motion, the court "may consider evidence outside the
over the case before it.

Richmond.

& Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991); see also

166 F.3d at 647.

jurisdictional

whether it has jurisdiction

The court should grant the 12(b)(I)

motion "only if the material

facts are not in dispute and the moving party is entitled to prevail as a matter of

law." Richmond, 945 F.2d at 768; see Gilbert v. Freshbikes, LLC, 32 F. Supp. 3d 594, 599 (D.
Md. 2014); Fletcher

I'.

Soc. Sec. Admin., Civil Action No. DKC 09-1188, 2010 WL 147800, at

*2 (D. Md. Jan. II, 20 I0).

DISCUSSION
Defendant maintains that Plaintiffs'
matter jurisdiction
administrative
contends
jurisdiction

under

remedies.

that Plaintiffs'

Fed. R. Civ.

Complaint

P. 12(b)( I) because

Plaintiffs

Def.'s Mem. Supp. Mot. Dismiss 5-8, ECF NO.9-I.
constitutional

and do not obviate the exhaustion

for lack of subjectfailed

to exhaust

Defendant further

claims asserted in an attempt to create subject-matter

fail because these claims are inextricably

Plaintiffs' constitutional

must be dismissed

requirement.

intertwined with their claim for benefits

Ill. at 9-10.

Defendant

and "liberty interest" arguments arc meritless.

Dismiss 5, ECF No. 17.

5

also maintains

that

Def.'s Reply Supp. Mot.

A.

Administrative

Review Process

The general federal-question
subject-matter

S 405(h).

jurisdiction

jurisdiction

statute, 28 U.S.c.

S

for an action challenging a decision of the Commissioner,

and instead has allowed such jurisdiction

only after the Commissioner

Chong Su Yi v. Soc. Sec. Admin, _ F. Supp. 3d _'

final decision.

after any final decision of the Commissioner

42 U.S.c.

has rendered a

Civil Action No. TDC-14-

S 405(g)

WL 224947, at *3 (D. Md. Jan. 14,2015); see 42 U.S.c.

0370,2015

1331, does not establish

("Any individual,

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

decision .... ").

within

sixty days

after the mailing

Thus, plaintiffs must cxhaust all administrative

claim in federal courl.

to him of notice
remedies

of such

before bringing

a

Yi, 2015 WL 224947, at *3 (citing Heckler v. Ringer, 466 U.S. 602, 617,

104 S. CI. 2013, 2023 (1984); Weinberger v. Salji, 422 U.S. 749, 763-64, 95 S. CI. 2457, 246566 (1975); Hopewell Nursing Home, Inc. v. Heckler, 784 F.2d 554, 557 (4th Cir. 1986»; see

Bowen v. Yucker!, 482 U.S. 137,142,107

S. CI. 2287, 2291-92 (1987).

A final decision by the Commissioner
process established by the SSA.
416.1400(a)(5».
to benefits.
satisfied

reconsideration.
a hearing

initial

SS 404.900(a)(I),

determination,

Id. (citing 20 C.F.R.

before an AU

416.1400(a)(3)).
Council.

At the first step, an initial determination

the

he

pursue

SS 404.900(a)(2),

Fourth and finally, the claimant

SS 404.900(a)(4),

6

is made about a claimant's

416.1400(a)(I)).

may

to review the decision.

Ill. (citing 20 C.F.R.

review

Yi, 2015 WL 224947, at *3 (citing 20 C.F.R. SS 404.900(a)(5),

Id. (citing 20 C.F.R.

with

is reached alter a four-step administrative

the

If the claimant

second

416.1400(a)(2)).

entitlement

step

and

is not
ask

for

The third step involves

Ill. (citing 20 C.F.R.

SS 404.900(a)(3).

may request a review before the Appeals
416.1400(a)(4».

"Once the claimant

has

exhausted these administrative

remedies, he may seek review in federal district court."

Yuckerl,

482 U.S. at 142, 107 S. Ct. at 2291; see Salji, 422 U.S. at 763-64, 95 S. Ct. at 2465-66 (noting
that final decision is requirement

for judicial review); Roberson v. Barnharl, 314 F. Supp. 2d

505. 507-08 (D. Md. 2003).
In Grice v. Colvin, _

F. Supp. 3d _,

No. GJH-14-1082,

2015 WL 1517243, at *1-3 (D.

Md. Mar. 31, 2015), this Court reviewed the SSA's authority to collect overpayments
U.S.c.

under 42

~ 404(a)( I). As the Court noted in Grice, the SSA's ability to recoup overpayments

is

limited by 42 U .S.c. ~ 404(b), which provides that "therc shall be no adjustment of payments to,
or recovery by the United States from, any person who is without fault if such adjustment
recovery would defeat the purpose of this subchapter
conscience."

or

or would be against equity and good

Once the SSA determines that an overpayment

was made, the SSA must send to

the allegedly ovcrpaid individual written notice as set forth in 20 C.F.R. ~ 404.502a.

Grice. 2015

WL 1517243, at *2 (citing 20 C.F.R. ~ 404.502a).
After receiving notice of the initial determination,
the right to request reconsideration
reconsideration
overpayment,

request

must

of the overpayment

be made

within

decision.

3

See 20 C.r-.R. ~ 404.907.

sixty days of the initial

determination

A
of

but the time may be extended for good cause if; for instance, the individual never

received notice of the initial overpayment decision.
overpaid individual requests reconsideration,
notice of its dccision.
reconsideration

the allegedly overpaid individual has

See id. ~~ 404.909, 404.911.

If the allegedly

then the SSA will review the case and issue written

See id. ~~ 404.913,404.922.

If the individual does not agree with the

decision, then he or she can requcst a hearing before an AU.

See id. ~ 404.921.

If the individual is appealing an initial determination denying his or her request for waiver of
adjustment or recovery of an overpayment under 20 C.r-.R. ~ 404.506, then the individual may
be heard before an AU. 20 C.F.R. ~ 404.907.

3

7

After the hearing, the AU will issue a decision on the issue, which can be appealed to the SSA's
Appeals Council.

See id. ~ 404.955. The Appeals Council can decide to review the case or deny

the request for review.

See id. Once the Appeals Council has denied the request for review or

reviewed the case and issued a decision, the allegedly overpaid individual can file an action in a
federal district court within sixty days of the decision.

See id. ~ 404.981; see also Grice, 2015

WL 1517243, at *2.
Instead of or in addition to reconsideration,
SSA to waive the overpayment.

An individual's

shows that he or she is without

an allegedly overpaid individual can ask the
overpayment

can be waived if the individual

fault in causing the overpayment

and that "adjustment

or

recovery would either defeat the purpose of title II of the Act ... or be against equity and good
conscience."

20 C.F.R. ~ 404.506(c).

If waiver of the overpayment

will decide if a waiver may be approved.
of the information and documentation

is requested, then the SSA

See id. Ifwaiver cannot be approved simply on review

provided to the SSA, the individual is then notified that a

file review and a personal conference will take place. See id. During the personal conference,
the individual and his or her representative
regulations with the decisionmaker."

can review the "claims file and applicable

See id. ~ 404.506(d).

law and

After the personal conference,

SSA will issue a written decision that specifies the "findings of fact and conclusions

the

in support

of the decision to approve or deny waiver" and advises the individual of the right to appeal the
decision.

See id. ~ 404.506(g).

If the individual docs not appear for the conference,

will make a decision on the waiver request based on the written evidence.

the SSA

See id. ~ 404.506(h).

If the waiver request is denied without a conference. the individual can request reconsideration
of the decision.

See id. 130th the denial of the waiver request after a personal conference and the

8

decision on reconsideration

can be appealed to an AU.

See id. 9404.930(a).

After that, the

appeals process is the same process described above. Grice, 2015 WL 1517243, at *2.
B.

Plaintiffs

Did Not Exhaust Administrative

Here, the SSA's determination
monthly

benefit

administrative

to withhold

to recover an overpayment

Remedies
less than the full amount of a claimant's

is not an initial determination

review process and thus is not subject to judicial review.

To the extent that Plaintiffs challenge
benefits, this administrative

the SSA's withholding

subject

to the

20 C.F.R. 9404.903(e).

of a portion of their monthly

action is not an initial determination

subject to judicial review.

See

Taylor v. Soc. Sec., NO.4: 12-CV-39, 2013 WL 1098145, at *4 (E.D. Va. Feb. 4, 2013) ("Without
an 'initial determination'
by the Commissioner
to 42 U.S.c.

by the SSA under 20 C.F.R. 9404.902,

there can be no 'final decision'

that would allow this Court to exercise subject-matter jurisdiction

9405(g)."),

report and recommendation adopted, No. 4:12CV39,

pursuant
2013 WL

afJ'd mem. per curiam, 528 r. App'x 375 (4th Cir. 2013).

1098103 (E.D. Va. Mar. 14,2013),
Thus. the Court lacks subject-matter

jurisdiction

to review the amount to be withheld

from

Plaintiffs' benefits to repay the overpayment.
Alternatively,

if Plaintiffs

existence of any overpayment

are challenging

SSA's initial determinations

determinations

of their benefits or whether an overpayment

repaid to the SSA, these determinations
review process. See 20 c.r.R.

the SSA's

are initial determinations

regarding

of benefits must be

subject to the administrative

9 404.902(j), (k). Assuming that Mr. Ross did, in fact, appeal the
denying his requests for waiver of recovery of the overpayment,

however, there is no evidence that he obtained a final decision of the Commissioner
exhaustion

of administrative

the

remedies pursuant to 42 U.S.c.

subject-matter jurisdiction.

9

9405(g).

through

The Court thus lacks

C.

Plaintiffs

Do Not Assert a Colorable

Constitutional

constitutional

to the Merits

[under 42 U,S.CO S 405(g)] may be waived if the

"[T]he requirement of a 'final decision'
plaintiff asserts a 'colorable'

Claim Collateral

claim that is 'collateral'

to the merits," however.

Varondani v. Bowen, 824 F.2d 307, 310 (4th Cir. 1987) (citing Mathews v. Eldridge, 424 U.S.
319,330-31.
collateral

96 S. Ct. 893, 900-01 (1976)).

to the substantive

"The constitutional

claim ... must be entirely

claim for benefits, such as claims challenging

the system-wide

failure to follow applicable regulations or claims seeking to invalidate a rule used to determine
eligibility

Yi, 2015 WL 224947, at *4 (citing cases).

for benefits."

collateral if it is not essentially a claim for benefits."

"A plaintiff's

claim is

Johnson v. Shalala, 2 F.3d 918, 921 (9th

Cir. 1993). Further. exhaustion is not "to be excused whenever a claimant alleges an irregularity
in the agency proceedings."
2032 (1986).

Bowen v. City of New York, 476 U.S. 467, 485, 106 S. Ct. 2022,

In other words, a claim is not "collateral"

premature judicial intervention,
claimant's

to the merits, and thus does not support

if it alleges mere deviation from the applicable regulations in the

particular administrative

proceeding.

lei. at 484, 106 S. Ct. at 2032; Varondani, 824

F.2d at 312.
In addition,
frivolous,'''

"laJ claim is colorable

if it is not 'wholly

insubstantial,

immaterial,

or

Cassim v. BOll'en, 824 F.2d 791, 795 (9th Cir. 1987) (quoting Boellcher v. Sec'y of

Health & Human Servs., 759 F.2d 719, 722 (9th Cir. 1985)).

In other words, a constitutional

claim should be dismissed if it clearly appears to be immaterial and made solely for the purpose
of obtaining jurisdiction

or is wholly insubstantial or frivolous.

Bell v. Hood, 327 U.S. 678, 682-

83,66 S. Ct. 773, 776 (1946); Holloway v. Sclnveiker, 724 1'.2d 1102, 1105 (4th Cir. 1984). The
"exhaustion
collateral'

requirement
to a substantivc

of section 405(g) does not apply to a due process claim 'entirely
claim, if the plaintiff has raised 'at least a colorable

10

claim'

that

erroncous deprivation

prior to exhaustion of administrative

that could not be rccompcnsed."

Ram

1'.

remedies would harm him in a way

Heckler, 792 F.2d 444, 446 (4th Cir. 1986) (quoting

Eldridge, 424 U.S. at 330-31, 96 S. Ct. at 900-01).

A plaintiff"bears

the burden of proving that

his claims of infringed liberty and property arc colorable; othcrwise there can be no claim of
inadcquate due proccss."

Kuel'lJell'. Heckler, 797 F.2d 858, 863 (10th Cir. 1986).

In their Complaint,

Plaintiffs alleged constitutional

and Thirtccnth Amendmcnts.
or "Amcndcd"

Compl.

'i'l

violations of the First, Fourth, Fifth,

1-2, 16, 19, 21. ECF No. I. Plaintiffs' "Supplcmcntal"

Complaint states, howcver, that Mr. Ross

claims hc has a liberty interest in his right-to-work and continucd cmployment as
a U.S. citizcn without incidents or badgcs of slavcry prohibitcd by the Thirtcenth
Amcndmcnt and asserts two substantivc-due-process
claims: that the [SSA]
infringed upon his fundamental rights to the freedom of lifc, liberty, property, and
thc pursuit of happiness to work and continuc employment evcn after having
earned and applied for social security rctirement benefits.
DH Ross' second
substantivc-duc-proccss
amendment
claims that the [S SA] violated his
[]substantive due process right to pursue his career as a productive tax-paying
law-abiding citizcn.
Am. Compl. at 3, ECF NO.4. Further,
[i]n their amcnded complaint, plaintiffs allege that thc [SSA] deprived them of
threc constitutionally recognizcd intcrests without any proccss: (I) a property
intcrest in DH Ross' continucd employmcnt as a U.S. citizcn; (2) a property
intcrest in thc social security tax on his carnings and the contract interest in the
bcnefits that justify the tax; and (3) a legitimatc cxpcctation to lawfully earn any
amount of moncy they can without arbitrary govcrnmental action, or interfcrcncc,
so long as they pay their fair sharc of taxes, pursuant to thc Thirteenth
Amendmcnt's prohibition.
Id. at 4; see Pis.' Corrcctcd Opp'n to Mot. to Dismiss 13-14, ECF No. 14.
Plaintiffs'
restricting

"challengc

[Plaintiffs']

of thc [SSA's]

libcrty and property interest" arguably

Compl. at I, ECF NO.4.
constitutionality

to thc unconstititutionality

policy and practicc

raises a collateral

The Court should find, howevcr, that Plaintiffs'

Am.

challenge to "the

of the [SSA's] policy and practicc with rcspect to the ovcrpaymcnt
II

claim.

itself' (id. at

2), even iI' a collateral claim, is not colorable because it is frivolous and made solely for the
purpose of obtaining jurisdiction.
Amendmcnts

"[W]hile the Due Process Clause of the Fifth and Fourteenth

protects the right to engage in the occupation

interest, that protection is not absolute."
(D.N .M. 2013).

of one's

choosing

as a liberty

United States v. Hopkins, 927 F. Supp. 2d I 120, 1175

Further, ,.[s]ocial security benefits are noncontractual

benefits under a social

welfare system and Congress has reserved the right to modify the scheme of benefits."

Davis v.

Bowen, 825 F.2d 799, 800 (4th Cir. 1987) (citing Flemming v. Nestor, 363 U.S. 603, 61 1,80 S.
Ct. 1367, 1373 (1960)).
Security benefits.
suspension

Thus, there is no constitutionally

protected property interest in Social

Nestor, 363 U.S. at 61 I, 80 S. Ct. at 1373; see Davis, 825 F.2d at 801 (blanket

of prisoner's

Social Security

retirement

benefits

under 42 U.S.c.

S 402(x)

"is

consistent with the statutory grant of discretion and rationally promotes the legitimate underlying
congressional

policy goal of conserving scarce social security resources where a prisoner's

economic needs are provided from other public sources").
constitutional

basic

Because Plaintiffs assert no colorable

claims that would waive the requirement of exhaustion of administrative

remedies,

thc Court should dismiss Plaintiffs' Amended Complaint under Fed. R. Civ. P. 12(b)(I) for lack
of subject-matter jurisdiction"

Waiver of the exhaustion requirement alternatively requires the additional elements of
irreparable harm to the claimants and futility of exhaustion. See Hyall v. Heckler, 807 F.2d 376,
378 (4th Cir. 1986) ("[Elxhaustion of administrative remedies may be excused if the claim is
collateral to the claim for benefits, the claimants would be irreparably harmed, and relief is
consistent with policies underlying the exhaustion requirement."); see also McDonald v. Centra,
Inc., 946 F.2d 1059, 1063 (4th Cir. 1991) ("Thcre are several exceptions to the requirement that
parties exhaust administrative remedies before seeking refuge in federal courts. These include
those instances where (I) the dispute is a matter of statutory construction; (2) the utilization of
administrative procedures would cause irreparable injury; and (3) the resort to administrative
procedures would be futile.").
Plaintiffs fail to demonstrate that requiring them to exhaust
administrative remedies would irreparably harm them, however. Further, requiring Plaintiffs to
exhaust administrative remedies in this case would serve the policies underlying exhaustion "in
order to establish a detailed factual record and permit the agency to apply its expertise." Bass v.

4

12

RECOMMENDATION
For the reasons set forth above, it is respectfully recommended

as follows:

(I) The Court GRANT Defendants'

Motion to Substitute andlor to Dismiss (ECF No.8);

(2) The Court GRANT Defendant's

Motion to Dismiss (ECF No.9);

(3) The

Court

"Amended"

DISMISS

WITHOUT

PREJUDICE

Plaintiffs'

"Supplemental"

or

Complaint (ECF Nos. 3, 4); and

(4) The Court CLOSE this case.
NOTICE TO PARTIES
Any objeetions

to this Report and Recommendation

seventeen days of the date of this Report and Reeommendation
and L.R. 301(5)(b).
recommendations

/lOVO

under Fed. R. Civ. 1'. 6(d), 72(b),

Failure to file written objections to the proposed findings, conclusions,
of the Magistrate Judge contained

days after the date of this Report and Recommendation
de

must be served and filed within

review of the determinations

and

in the foregoing report within seventeen
may result in the waiver of any right to a

contained in the report, and such failure shall bar you from

challenging on appeal the findings and conclusions

accepted and adopted by the District Judge,

except upon grounds of plain error.

1st
Thomas M. DiGirolamo
United States Magistrate Judge

Date: July 29,2015

Soc. Sec. Admin., 872 F.2d 832, 833 (9th Cir. 1989) (per curiam).
Plaintiffs' pursuit of
administrative remedies thus would not be futile. In any event, the regulations provide for an
expedited appeals process by which a claimant may proceed to federal court without first
completing the administrative review process. 20 C.F.R. ~~ 404.900(a)(6), 404.923-.928.
It
does not appear from the record that Plaintiffs complied with this process before filing their
Complaint.
13