Conrad v. Colvin

Filing 41

MEMORANDUM OPINION AND ORDER. Defendants Motion to Dismiss or Stay against Plaintiff Kenneth E. Conrad (Conrad v. Colvin, Civil No. 14-336 (DWF/HB), Doc. No. 32 ) is GRANTED IN PART and DENIED IN PART AS MOOT as follows: Defendants Motion to Dismi ss is GRANTED and Defendants Motion to Stay is DENIED AS MOOT. Plaintiff Kenneth E. Conrads Complaint (Conrad v. Colvin, Civil No. 14-336 (DWF/HB), Doc. No. 1 ) is DISMISSED WITH PREJUDICE. Defendants Motion to Dismiss or Stay against Plaintiff Vi ncent H. Babler (Babler v. Colvin, Civil No. 14-338 (DWF/HB), Doc. No. 32 ) is GRANTED IN PART and DENIED IN PART AS MOOT as follows: Defendants Motion to Dismiss is GRANTED and Defendants Motion to Stay is DENIED AS MOOT. Plaintiff Vincent H. Bab lers Complaint (Babler v. Colvin, Civil No. 14-338 (DWF/HB), Doc. No. 1 ) is DISMISSED WITH PREJUDICE. Defendants Motion to Dismiss or Stay against Plaintiff Conrad W. Krabbenhoft (Krabbenhoft v. Colvin, Civil No. 14-483 (DWF/HB), Doc. No. 33 ) is GRANTED IN PART and DENIED IN PART AS MOOT as follows: Defendants Motion to Dismiss is GRANTED and Defendants Motion to Stay is DENIED AS MOOT. Plaintiff Conrad W. Krabbenhofts Complaint (Krabbenhoft v. Colvin, Civil No. 14-483 (DWF/HB), Doc. No. 1 ) is DISMISSED WITH PREJUDICE. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion.) Signed by Judge Donovan W. Frank on 07/07/2015. Associated Cases: 0:14-cv-00336-DWF-HB, 0:14-cv-00338-DWF-HB, 0:14-cv-00483-DWF-HB(RLB)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Kenneth E. Conrad,
Plaintiff,
v.

Civil No. 14-336 (DWF/HB)

Carolyn W. Colvin,
Acting Commissioner of
Social Security,
Defendant.
______________________________

MEMORANDUM
OPINION AND ORDER

Vincent H. Babler,
Plaintiff,
v.

Civil No. 14-338 (DWF/HB)

Carolyn W. Colvin,
Acting Commissioner of
Social Security,
Defendant.
______________________________
Conrad W. Krabbenhoft,
Plaintiff,
v.
Carolyn W. Colvin,
Acting Commissioner of
Social Security,
Defendant.
______________________________

Civil No. 14-483 (DWF/HB)

INTRODUCTION
The above-entitled matters are before the Court on the following motions brought
by Defendant Carolyn Colvin, Acting Commissioner of the Social Security
Administration (“Defendant”): (1) Motion to Dismiss or Stay against Plaintiff
Kenneth E. Conrad (“Conrad”) (Conrad v. Colvin, Civil No. 14-336 (DWF/HB), Doc.
No. 32); (2) Motion to Dismiss or Stay against Plaintiff Vincent H. Babler (“Babler”)
(Babler v. Colvin, Civil No. 14-338 (DWF/HB), Doc. No. 32); and (3) Motion to Dismiss
or Stay against Plaintiff Conrad W. Krabbenhoft (“Krabbenhoft”) (Krabbenhoft v.
Colvin, Civil No. 14-483 (DWF/HB), Doc. No. 33). 1 For the reasons set forth below,
Defendant’s three motions are granted in part and denied in part as moot.
BACKGROUND
Plaintiffs are retired dual-status North Dakota Air National Guard
(“National Guard”) technicians. (Conrad, Civil No. 14-336 (DWF/HB), Doc. No. 1
(“Conrad Compl.”) ¶ VI; Babler, Civil No. 14-338 (DWF/HB), Doc. No. 1 (“Babler
Compl.”) ¶ VI; Krabbenhoft, Civil No. 14-483 (DWF/HB), Doc. No. 1 (“Krabbenhoft
Compl.”) ¶ VI.) Plaintiff Conrad was employed as a dual-status technician with the
National Guard between 1963 and 1993. (Conrad Compl. ¶ VI.) Plaintiff Babler was
employed as a dual-status technician with the National Guard between 1980 and 1994.
(Babler Compl. ¶ VI.) Plaintiff Krabbenhoft was employed as a dual-status technician
with the National Guard for “many years” until 1995. (Krabbenhoft Compl. ¶ VI.)
1

The Court addresses all three motions by a single Order as Plaintiffs raise the same
allegations and are represented by the same counsel in these separately-captioned cases.
2

As a condition of their employment with the National Guard, Plaintiffs allege that
they were required to be members of the military, wear a military uniform, and perform
in unit training assemblies. (Conrad Compl. ¶ VI; Babler Compl. ¶ VI; Krabbenhoft
Compl. ¶ VI.)
Following their retirement from the National Guard, Plaintiffs applied for and
received social security retirement benefits (“SS benefits”) from the Social Security
Administration (“SSA”). (Conrad Compl. ¶ VII; Babler Compl. ¶ VII; Krabbenhoft
Compl. ¶ VII.) In 1999, Plaintiff Babler applied for SS benefits and received an initial
determination from the SSA regarding his SS benefits. (Babler Compl. ¶ VII.) In 2000,
Plaintiff Conrad applied for SS benefits and received an initial determination from the
SSA regarding his SS benefits. (Conrad Compl. ¶ VII.) In 2004, Plaintiff Krabbenhoft
applied for SS benefits and received an initial determination from the SSA regarding his
SS benefits. (Krabbenhoft Compl. ¶ VII.)
Plaintiffs allege that their SS benefits were reduced by the Windfall Elimination
Provision (“WEP”) of the Social Security Act (“SS Act”) as they were also receiving a
Civil Service Retirement System (“CSRS”) pension, which is administered by the Office
of Personnel Management (“OPM”). (Conrad Compl. ¶ VII; Babler Compl. ¶ VII;
Krabbenhoft Compl. ¶ VII.) Plaintiffs allege that when their SS benefits were reduced by
the WEP, they were not informed by the SSA of the WEP exemption for individuals
whose CSRS pension was “based wholly on service as a member of a uniformed
service.” (Conrad Compl. ¶¶ IX-X; Babler Compl. ¶¶ IX-X; Krabbenhoft Compl.
¶¶ IX-X.) Plaintiffs do not dispute that they never appealed the SSA’s initial
3

determination to reduce their SS benefits by the WEP. (See generally Conrad Compl.;
Babler Compl.; Krabbenhoft Compl.)
On February 3, 2011, the Eighth Circuit Court of Appeals issued a decision in
Peterson v. Astrue, 633 F.3d 633 (8th Cir. 2011), which held that dual-status technicians
employed by the Air National Guard are members of a uniformed service and are exempt
from the WEP. (Conrad Compl. ¶ XI; Babler Compl. ¶ XI; Krabbenhoft Compl. ¶ XI.)
The SSA did not appeal the Eighth Circuit’s decision. (Conrad Compl. ¶ XI; Babler
Compl. ¶ XI; Krabbenhoft Compl. ¶ XI.)
Following the Eighth Circuit’s decision in Peterson, the SSA issued
Acquiescence Ruling (“AR”) 12-1(8), 77 Fed. Reg. 51, 842, indicating that it would
apply the Peterson decision only to dual-status technicians who reside within the
Eighth Circuit and only to those dual-status technicians who first applied for SS benefits
and had the WEP applied to their benefits on or after February 3, 2011, the date of the
Peterson decision. (Conrad Compl. ¶ XII; Babler Compl. ¶ XII; Krabbenhoft Compl.
¶ XII.) AR 12-1(8) states, in relevant part, as follows:
[W]hen we received this precedential Court of Appeals’ decision and
determined that an AR might be required, we began to identify those
persons within the circuit who might be subject to readjudication if we
subsequently issued an AR. Because we have determined that an AR is
required and are publishing this AR, we will send a notice to those
individuals we have identified. In the notice, we will provide information
about the AR and their right to request readjudication under the AR.
...
Social Security old-age or disability applicants and beneficiaries who
receive a CSRS pension based on noncovered work as dual status
National Guard technicians, and who are permanent legal residents of a
state within the Eighth Circuit, should have their Social Security benefits
4

computed using the normal [primary insurance amount (“PIA”)], rather
than the WEP PIA described in 42 U.S.C. 415(a)(7) of the Act.
(Conrad Compl. ¶ XII; Babler Compl. ¶ XII; Krabbenhoft Compl. ¶ XII.)
In letters dated December 28, 2012, the SSA notified Plaintiffs that the SSA “may
be able to increase” their SS benefits based on the Peterson decision, if certain elements
were satisfied. (Conrad Compl. ¶ XIII; Babler Compl. ¶ XIII; Krabbenhoft Compl.
¶ XIII.) Specifically, the notice stated that “[w]e will make a new decision about
payment of your Social Security benefits only if: [y]ou request a review; and [w]e decide
that the Peterson v. Astrue ruling could change our prior decision.” (Conrad Compl.
¶ XIII; Babler Compl. ¶ XIII; Krabbenhoft Compl. ¶ XIII.)
On February 27, 2013, within sixty days of receipt of the December 28, 2012
notice, Plaintiffs each filed a Request for Reconsideration with the SSA. (Conrad Compl.
¶ XIV; Babler Compl. ¶ XIV; Krabbenhoft Compl. ¶ XIV.) On April 7, 2013, the SSA
issued a Notice of Dismissal to Plaintiff Babler, stating, in relevant part, as follows:
We sent you a letter on June 11, 1999 to tell you about our decision. The
letter explained you had up to 60 days from the date you received the letter
to review the decision. You asked for review on February 28, 2013. This
is after the 60-day time limit.
(Babler Compl. ¶ XIV.) On April 27, 2013, the SSA issued a Notice of Dismissal to
Plaintiff Conrad, stating, in relevant part, as follows:
We are writing to you about your request for a review of your Social
Security claim. We have to deny your request because you waited for more
than 60 days to ask for a review, and you did not have a good reason for the
delay. We sent you a letter on May 1, 2000 to tell you about our decision.
The letter explained you had up to 60 days from the date you received the
letter to ask us to review the decision. You asked for a review on
February 25, 2013. This is after the 60-day time limit.
5

(Conrad Compl. ¶ XIV.) On April 28, 2013, the SSA issued a Notice of Dismissal to
Plaintiff Krabbenhoft, stating, in relevant part, as follows:
We sent you a letter on May 15, 2004 to tell you about our decision. The
letter explained that you had up to 60 days from the date you received the
letter to ask us to review the decision. You asked for review on
February 21 (sic), 2013. This is after the 60-day time limit.
(Krabbenhoft Compl. ¶ XIV.)
In May 2013, Plaintiffs each requested a hearing by an Administrative Law Judge
(“ALJ”), appealing the dismissal of their Request for Reconsideration. (Conrad Compl.
¶ XV; Babler Compl. ¶ XV; Krabbenhoft Compl. ¶ XV.) In June 2013, the ALJ issued
an Order of Dismissal of Plaintiffs’ respective requests for a hearing, dismissing the
requests on the grounds that Plaintiffs failed to file an appeal contesting the application of
the WEP within sixty days of their initial receipt of their SS benefits. (Conrad Compl.
¶ XV; Babler Compl. ¶ XV; Krabbenhoft Compl. ¶ XV.)
In June 2013, Plaintiffs each filed a Request for Review with the Appeals Council,
requesting review of the ALJ’s dismissal of their requests for a hearing. (Conrad Compl.
¶ XVI; Babler Compl. ¶ XVI; Krabbenhoft Compl. ¶ XVI.) In December 2013, the
Appeals Council issued its decision denying Plaintiffs Conrad and Babler’s requests for
review of the ALJ’s dismissal determinations. (Conrad Compl. ¶ XVI; Babler Compl.
¶ XVI.) In February 2014, the Appeals Council issued its decision denying Plaintiff
Krabbenhoft’s request for review of the ALJ’s dismissal determination. (Krabbenhoft
Compl. ¶ XVI.)

6

In February 2014, Plaintiffs Conrad, Babler, and Krabbenhoft each filed a
Complaint against Defendant in separate actions in federal court, requesting that the
Court “reverse the Decision of the Defendant, or, in the alternative, remand the case for
further administrative proceedings.” (Conrad Compl. at 7; Babler Compl. at 7;
Krabbenhoft Compl. At 7.) In their Complaints, Plaintiffs claim that the Appeals
Council’s decisions denying their requests for review are “not supported by substantial
evidence and [are] contrary to law.” (Conrad Compl. ¶ XVIII; Babler Compl.
¶ XVIII; Krabbenhoft Compl. ¶ XVIII.)
Defendant now moves to dismiss, or, alternatively, to stay Plaintiffs’ claims in
their entirety in all three cases. (Conrad, Civil No. 14-336 (DWF/HB), Doc. No. 32;
Babler, Civil No. 14-338 (DWF/HB), Doc. No. 32; Krabbenhoft, Civil No. 14-483
(DWF/HB), Doc. No. 33.)
DISCUSSION
I.

Motion to Dismiss Without Prejudice or Stay
Defendant argues that this Court should dismiss without prejudice or stay the

present actions pending the appeal of Mitchael, et al. v. Social Security Administration,
Civ. No. 4:13-305, 2014 WL 4662369 (E.D. Ark. Sept. 16, 2014), appeal docketed,
No. 14-3220 (8th Cir. Sept. 26, 2014), under the “first-filed rule.”
The “first-filed rule” establishes that in cases of concurrent jurisdiction, “the first
court in which jurisdiction attaches has priority to hear the case.” Nw. Airlines, Inc. v.
Am. Airlines, Inc., 989 F.2d 1002, 1005 (8th Cir. 1993). The purpose of the first-filed
rule is to conserve judicial resources and avoid conflicting rulings. Keymer v. Mgmt.
7

Recruiters Int’l, Inc., 169 F.3d 501, 503 n.2 (8th Cir. 1999); Nw. Airlines, 989 F.2d
at 1006; see also Merial Ltd. v. Cipla Ltd., 681 F.3d 1283, 1299 (Fed. Cir. 2012) (“The
‘first-to-file’ rule is a doctrine of federal comity, intended to avoid conflicting decisions
and promote judicial efficiency, that generally favors pursuing only the first-filed action
when multiple lawsuits involving the same claims are filed in different jurisdictions.”).
“The first-filed rule is not intended to be rigid, mechanical, or inflexible[,] but is to be
applied in a manner best serving the interests of justice.” Nw. Airlines, 989 F.2d at 1005
(quotations and citation omitted); see also Boatmen’s First Nat’l Bank of Kan. City v.
Kan. Pub. Emps. Ret. Sys., 57 F.3d 638, 641 (8th Cir. 1995) (citing exceptions to the
rule). The prevailing standard is that in the absence of compelling circumstances, the
first-filed rule should apply. Orthmann v. Apple River Campground, Inc., 765 F.2d 119,
120 (8th Cir. 1985) (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Haydu, 675
F.2d 1169, 1174 (11th Cir. 1982)). In applying the first-filed rule, courts have the
discretion to dismiss, stay, or transfer the later-filed action. See Futurewei Techs., Inc. v.
Acacia Research Corp., 737 F.3d 704, 708 (Fed. Cir. 2013); Anheuser-Busch, Inc. v.
Supreme Int’l Corp., 167 F.3d 417, 419 (8th Cir. 1999).
Here, there is no dispute that the Mitchael lawsuit was filed before the present
lawsuits. (Compare Mitchael, Civ. No. 4:13-305, Doc. No. 1 (“Mitchael Compl.”) (filed
on May 21, 2013), with Conrad Compl. (filed on February 6, 2014), Babler
Compl. (same), and Krabbenhoft Compl. (filed on February 20, 2014).) The Court,
however, must consider the similarity of the parties and issues presented in these three

8

lawsuits and the Mitchael lawsuit. See Watson v. Homecomings Fin., LLC, Civ.
No. 09-859, 2009 WL 3517837, at *2 (D. Minn. Oct. 23, 2009).
Defendant argues that the claims articulated in the present lawsuits are essentially
identical to and duplicative of the Mitchael lawsuit. Specifically, Defendant contends
that the parties and issues presented here substantially mirror the parties and issues in
Mitchael. Defendant asserts that while the named plaintiffs are different, Plaintiffs in the
present lawsuits are likely members of the Mitchael putative class. Defendant notes that,
like Plaintiffs in the present cases, the plaintiffs in Mitchael are former National Guard
dual-status technicians who permanently reside within the Eighth Circuit; had their
SS benefits calculated pursuant to the WEP before Peterson was decided; and allegedly
failed to timely seek administrative and district court review of their SS benefit
determinations. Defendant further asserts that, like Plaintiffs in the present lawsuits, the
plaintiffs in Mitchael seek to have their benefits readjudicated retroactively in light of
Peterson. In addition, Defendant asserts that the present cases and the Mitchael case
were all brought against the same government agency—the SSA. Accordingly,
Defendant contends that, with Mitchael now on appeal, the essence of Plaintiffs’ claims
in the present cases will effectively be adjudicated by the Eighth Circuit. Therefore,
Defendant argues that the Court should dismiss these cases without prejudice or grant
stays pending resolution of the Mitchael appeal in order to conserve judicial resources,
avoid inconsistent rulings, and reduce uncertainty.
Plaintiffs, on the other hand, assert that their claims are broader than those
articulated in the Mitchael lawsuit. In particular, Plaintiffs assert that, unlike Mitchael,
9

their cases do not involve claims that no avenue for administrative review is available to
them; that Defendant refused to establish a method for initiating such challenges; that, as
result of Defendant’s acquiescence policies, they have been deprived of the ability to
appeal, either administratively or judicially; and that no exhaustion of administrative
procedures is required. In addition, Plaintiffs contend that, unlike the plaintiffs in
Mitchael, they have followed the administrative procedures available to them by seeking
review at each stage of the proceedings following notice advising them of their right to
review under Peterson. Plaintiffs further assert that the remedy sought by Plaintiffs in
the present cases is a remand to the SSA Assistant Commissioner to recalculate their
SS benefits pursuant to what they believe to be the correct application of the law, whereas
the remedies sought by the plaintiffs in Mitchael include an order certifying the proposed
class; compensatory, consequential, and statutory damages; a declaration that the action
of the SSA Commissioner is illegal, null, and void; injunctive relief; back pay; and
attorney fees and costs. As such, Plaintiffs assert that their claims are substantially
different than those in the Mitchael case and that a resolution in Mitchael would not
necessarily resolve the issues in the present cases. Therefore, Plaintiffs argue that the
first-filed rule is inapplicable here and that the Court should deny Defendant’s request to
dismiss or stay their cases.
Consistent with the Court’s remarks at the January 9, 2015 hearing on Defendant’s
motions, the Court declines to dismiss or stay the instant matters based on the first-filed
rule. Although the Mitchael case raises some factual and legal issues that overlap with
those in the present cases, the Court concludes that Defendant’s reliance on the
10

application of the first-filed rule in seeking a dismissal or a stay is misplaced. Assuming,
without deciding, that Plaintiffs’ characterization of their litigation and the Mitchael
litigation is correct, the present actions are not duplicative, second-filed lawsuits to which
the first-filed rule should be applied. See Colo. River Water Conservation Dist. v.
United States, 424 U.S. 800, 817 (1976); Pacesetter Sys., Inc. v. Medtronic, Inc., 678
F.2d 93, 95 (9th Cir. 1982). Contrary to Defendant’s assertions, the Court is not
persuaded that the extent of the overlap between the parties and claims at issue in the
present cases and the Mitchael case is sufficient to invoke the application of the first-filed
rule in these lawsuits. Furthermore, Defendant has not alleged, and there is nothing to
suggest, that Plaintiffs filed the present actions in bad faith or engaged in forum shopping
or a “race to the courthouse,” which the first-filed rule is designed to address. See Selph
v. Nelson, Reabe & Snyder, Inc., 966 F.2d 411, 413 (8th Cir. 1992). Finally, the Court
finds that the interests of justice are best served by allowing the present cases to proceed.
See Nw. Airlines, 989 F.2d at 1005; U.S. Fire Ins. Co. v. Goodyear Tire & Rubber Co.,
920 F.2d 487, 488 (8th Cir. 1990). Accordingly, the Court chooses not to exercise its
discretion to dismiss or stay the present actions under the first-filed rule, and denies
Defendant’s motions to dismiss or stay these actions pending the appeal of the Mitchael
action.
II.

Motion to Dismiss With Prejudice
Defendant alternatively argues that this Court should dismiss the present actions

with prejudice pursuant to Rule 12(b)(1) and Rule 12(b)(6) of the Federal Rules of

11

Civil Procedure. Defendant first seeks dismissal under Rule 12(b)(1) for lack of subject
matter jurisdiction.
To survive a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction, the party asserting jurisdiction has the burden of proving jurisdiction.
VS Ltd. P’ship v. Dep’t of Hous. & Urban Dev., 235 F.3d 1109, 1112 (8th Cir. 2000)
(citation omitted). “Subject matter jurisdiction is a threshold requirement which must be
assured in every federal case.” Kronholm v. Fed. Deposit Ins. Corp., 915 F.2d 1171,
1174 (8th Cir. 1990). A motion to dismiss for lack of subject matter jurisdiction may
challenge a plaintiff’s complaint either on its face or on the factual truthfulness of its
averments. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990) (citations
omitted). When a defendant brings a facial challenge—a challenge that, even if truthful,
the facts alleged in a claim are insufficient to establish jurisdiction—a court reviews the
pleadings alone, and the non-moving party receives the same protections as it would
defending against a motion brought pursuant to Rule 12(b)(6). Id. (citations omitted).
Defendant argues that the Court does not have subject matter jurisdiction, as
Plaintiffs have not exhausted their administrative remedies under 42 U.S.C. § 405(g),
which Plaintiffs invoke to establish jurisdiction. “In order for the district court to have
subject matter jurisdiction under section 405(g), a claimant must have presented a claim
for benefits to the Secretary and exhausted the administrative remedies prescribed by the
Secretary.” Schoolcraft v. Sullivan, 971 F.2d 81, 84-85 (8th Cir. 1992); see also Degnan
v. Burwell, 765 F.3d 805, 808 (8th Cir. 2014) (citation and internal quotation marks
omitted); Titus v. Sullivan, 4 F.3d 590, 592 (8th Cir. 1993) (citation omitted). Here,
12

Plaintiffs do not allege that they sought any administrative review, requested an
administrative hearing, or received a final decision from the SS Commissioner upon
receiving their initial benefit determinations.
Instead, Plaintiffs allege that the Appeals Council’s decision denying Plaintiffs’
requests for review is the final administrative decision in these cases. Plaintiffs allege
that their claims for an adjustment of their SS benefits based upon the WEP exemption
for dual-status technicians were effectively reopened by the AR-12-1(8) and the
December 28, 2012 letters sent to Plaintiffs. In addition, Plaintiffs allege that they
pursued every administrative procedure available to them once they received the
December 28, 2012 notice. Plaintiffs further contend that they would have had no reason
to take any action on the application of the WEP to their SS benefits until they received
the December 28, 2012 notice, and that they acted promptly upon receipt of the notice.
Therefore, Plaintiffs argue that this Court has subject matter jurisdiction over their claims
pursuant to section 405(g).
Defendant, on the other hand, argues that the December 28, 2012 letters noting the
SSA’s acquiescence in Peterson did not effectively reopen Plaintiffs’ SS benefit
determinations. Defendant asserts that, by its own terms, AR 12-1(8) applies to all
determinations or decisions made on or after August 27, 2012. In addition, Defendant
asserts that it is undisputed that the December 28, 2012 letters stated that readjudication
of benefit determinations in accordance with Peterson is only applicable under certain
conditions, including that the SSA made its decision to apply the WEP on or after
February 3, 2011. As such, Defendant argues that because Plaintiffs’ SS benefit
13

determinations were made well before the Peterson decision, neither the SSA’s
AR 12-1(8) nor the December 28, 2012 letters provide grounds for re-opening their
benefit determinations. Defendant further argues that the SSA’s denial of Plaintiffs’
post-Peterson requests to the ALJs and the Appeals Council to reopen their cases is not
subject to administrative or judicial review. Accordingly, Defendant contends that
because Plaintiffs have failed to exhaust their administrative remedies, the Court lacks
subject matter jurisdiction under section 405(g) to review the SSA’s decisions not to
reopen their benefit determinations.
The Court concludes that Plaintiffs have failed to plead facts sufficient to confer
subject matter jurisdiction under section 405(g). First, the Court finds that Plaintiffs’
failure to seek any administrative review upon receiving their initial benefit
determinations prevents Plaintiffs from relying on their undisputed inaction as a basis to
seek judicial review within the meaning of section 405(g). Second, the Court finds that
the AR 12-1(8) and December 2012 letters from the SSA did not effectively reopen
Plaintiffs’ SS benefits claims, and that the Appeals Council’s decisions denying
Plaintiffs’ requests for review in light of the AR 12-1(8) and the December 2012 letters
do not constitute a final administrative decision for purposes of section 405(g). Because
Plaintiffs have invoked this Court’s jurisdiction under section 405(g), and because
Plaintiffs have failed to allege facts sufficient to meet the jurisdictional requirements

14

under section 405(g), the Court must dismiss Plaintiffs’ claims for lack of subject matter
jurisdiction. 2 See Schoolcraft, 971 F.2d at 84-85.
Moreover, even if the Court were to find that subject matter jurisdiction existed in
the present actions, the Court would dismiss the actions under Rule 12(b)(6) for failure to
state a claim upon which relief can be granted. To survive a motion to dismiss under
Rule 12(b)(6), a complaint must contain “enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). Although a
complaint need not contain “detailed factual allegations,” it must contain facts with
enough specificity “to raise a right to relief above the speculative level.” Id. at 555.
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory
statements,” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s]
to raise a reasonable expectation that discovery will reveal evidence of [the claim].”
Twombly, 550 U.S. at 556.
At the heart of Plaintiffs’ claims against Defendant is the allegation that
Defendant’s final decisions in these cases—the Appeals Council’s decisions denying
their requests for review—are not supported by substantial evidence and are contrary to
law, and, therefore, should be reversed or remanded for further administrative
2

To the extent that Plaintiffs seek an exception to the jurisdictional bar of
section 405(g) when “colorable” constitutional claims are at issue, the Court finds such
arguments without merit because, as discussed below, Plaintiffs have failed to allege
colorable constitutional claims. See Califano v. Sanders, 430 U.S. 99, 109 (1977);
Stanley v. Astrue, 298 Fed. Appx. 537, 541 (8th Cir. 2008); Thorbus v. Bowen, 848
F.2d 901, 903 (8th Cir. 1998).
15

proceedings. In their Complaints, Plaintiffs make various allegations as to the manner in
which the SSA handled their cases, which, construed liberally, appear to generally allege
due process and equal protection challenges. 3
With respect to Plaintiffs’ due process claims, Plaintiffs first allege that they were
“never given a fair hearing” because the ALJ denied their requests for a hearing. (Conrad
Compl. ¶ XVIII; Babler Compl. ¶ XVIII; Krabbenhoft Compl. ¶ XVIII.) The Fifth
Amendment’s Due Process Clause prohibits the United States, including its agencies,
from “depriving any person of property without due process of law.” Dusenbery v.
United States, 534 U.S. 161, 167 (2002) (internal quotation marks omitted). “The
procedural component of the Due Process Clause protects property interests created not
by the Constitution but by ‘rules or understandings that stem from an independent source
such as state law.’” Ganley v. Minneapolis Park & Recreation Bd., 491 F.3d 743, 749
(8th Cir. 2007) (internal citations and quotations omitted). “A procedural due process
claim focuses not on the merits of the deprivation, but on whether the [SSA]
circumscribed the deprivation with constitutionally adequate procedures.” Parish v.
Mallinger, 133 F.3d 612, 615 (8th Cir. 1998).
Here, Plaintiffs indisputably failed to exhaust their administrative remedies after
receiving their initial benefit determinations. The SSA’s administrative review process is
comprised of four steps, which include an initial determination, a reconsideration, an
3

Although Plaintiffs do not address their vague due process or equal protection
claims in their opposition briefs, the Court will address the claims nonetheless because
Plaintiffs’ Complaints could be read generously to allege due process and equal
protection violations and because Defendant addresses such claims in its briefs.
16

administrative hearing before an ALJ, and a review by the Appeals Council. 20 C.F.R.
§ 404.900(a). At various phases of this administrative process, claimants may request
extensions of time for good cause. See, e.g., id. §§ 404.909(b), 404.933(c), 404.982.
Despite these administrative remedies, Plaintiffs concede that they did not request the
SSA to reconsider its initial decisions and thus concede that the ALJ and Appeals Council
did not deviate from the SSA’s proper practices and procedures. Although Plaintiffs
vaguely allege that the SSA violated their due process rights by denying them an
administrative hearing and review by the Appeals Council, the undisputed facts are that
the SSA could not provide these avenues to Plaintiffs because they had not timely
requested the SSA to reconsider its initial benefit determinations. As a result, the Court
finds that Plaintiffs have failed to state a claim for a procedural due process violation.
See Twombly, 550 U.S. at 556.
Although Plaintiffs fail to state a procedural due process claim, construing
Plaintiffs’ Complaints liberally, it appears from their allegations that they may also be
intending to allege that the SSA denied them substantive due process. To state a claim
for a substantive due process violation, Plaintiffs must demonstrate that: (1) they had a
fundamental property right arising under the Fourteenth Amendment; (2) the SSA’s
conduct deprived them of that right; and (3) the SSA’s actions were “so ‘arbitrary’ or
‘conscience-shocking’ as to violate due process.” See Ganley, 491 F.3d at 749.
Plaintiffs allege in their Complaints that the SSA acted “unfairly and deceptively”
and “arbitrarily and capriciously” in denying their claims. (Conrad Compl. ¶ XVIII;
Babler Compl. ¶ XVIII; Krabbenhoft Compl. ¶ XVIII.) Notably, however, neither their
17

Complaints or their briefs set forth the basis of these vague and conclusory claims nor
any factual support for their claims. Even assuming that Plaintiffs have a protected
property interest in anticipated SS benefits and that the SSA deprived them of their
property interest, Plaintiffs have stated no facts that support a plausible claim that the
SSA’s actions were so arbitrary or conscience-shocking as to violate due process. In
addition, as discussed below, Plaintiffs have failed to allege that the SSA’s actions have
no rational relationship to a legitimate governmental purpose, and, instead, the Court
finds the SSA’s actions to be rational. See Ganley, 491 F.3d at 749. Therefore, the Court
concludes that Plaintiffs have failed to state a claim for a substantive due process
violation. See Twombly, 550 U.S. at 556.
To the extent that Plaintiffs allege an equal protection claim, such claims must be
brought under the Fifth Amendment, not the Fourteenth Amendment, as the Fourteenth
Amendment applies only to actions by state governments, not federal agencies, such as
the SSA. See Weinberger v. Wiesenfeld, 420 U.S. 636, 638 n.2 (1975). Because
Plaintiffs are not a suspect class and have no fundamental constitutional right to
SS benefits, the challenged action need only be rationally related to a legitimate
government purpose to survive judicial review. See Weinberger v. Salfi, 422 U.S. 749,
771-72 (1975); Christopher Lake Dev. Co. v. St. Louis Cnty., 35 F.3d 1269, 1274 (8th
Cir. 1994) (internal citations and quotation marks omitted). Plaintiffs appear to claim
that they are being treated differently than other National Guard dual-status technicians
who had their SS benefits adjusted by the SSA based on the application of Peterson or
who did not have the WEP applied after the date of the Peterson decision. Defendant
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maintains that there is a rational basis for the distinction because SS benefit
determinations made more than sixty days before the date of Peterson that are not
currently under administrative review are binding and are time-barred under the SSA.
The Court concludes that Plaintiffs’ Complaints fail to contain “enough facts to
state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 545. The Court
finds that Defendant has a rational basis for applying the WEP to Plaintiffs and for
applying the Peterson decision prospectively. To the extent that Plaintiffs object to the
SSA’s method of determining how to apply the Peterson decision to claimants, Plaintiffs
fail to explain why the SSA’s method is unsupported by a rational basis. In addition, as
discussed above, Plaintiffs do not dispute that they did not exhaust the administrative
avenues of relief available to them upon receipt of their benefit determinations and did
not raise the issue regarding the application of the WEP with respect to their benefits in a
timely fashion. Furthermore, courts have long recognized the importance of finality of
benefit determinations in serving both the interest of the claimant and the government.
See Bowen v. City of New York, 476 U.S. 467, 481 (1986). Because the Court finds that a
rational basis exists in distinguishing between individuals who received benefit
determinations more than sixty days before the issuance of the Peterson decision and had
the WEP applied to their claims and those who did not, Plaintiffs’ equal protection claims
cannot survive a motion to dismiss. Therefore, Plaintiffs’ equal protection claims must
be dismissed.
Even liberally construing Plaintiffs’ allegations, the Court determines that
Plaintiffs have failed to state a colorable constitutional claim. See Twombly, 550 U.S.
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at 556. Although the Court understands the frustration and dissatisfaction that Plaintiffs
have experienced throughout the process of appealing the decisions relating to their
benefits, these decisions do not rise to the level of violating their right to due process or
equal protection. As a result, the Court concludes that Plaintiffs have failed to state any
claim for which relief can be granted, and, accordingly, their Complaints must be
dismissed in their entirety.
In sum, because it is apparent to the Court that there is no subject matter
jurisdiction or legal or factual basis for any asserted claim against Defendant, the Court
grants Defendant’s motions to dismiss. Accordingly, Plaintiffs’ Complaints are properly
dismissed with prejudice.
ORDER
Based on the foregoing, and the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1.

Defendant’s Motion to Dismiss or Stay against Plaintiff Kenneth E. Conrad

(Conrad v. Colvin, Civil No. 14-336 (DWF/HB), Doc. No. [32]) is GRANTED IN
PART and DENIED IN PART AS MOOT as follows:
a.
b.
2.

Defendant’s Motion to Dismiss is GRANTED.
Defendant’s Motion to Stay is DENIED AS MOOT.

Plaintiff Kenneth E. Conrad’s Complaint (Conrad v. Colvin, Civil

No. 14-336 (DWF/HB), Doc. No. [1]) is DISMISSED WITH PREJUDICE.

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3.

Defendant’s Motion to Dismiss or Stay against Plaintiff Vincent H. Babler

(Babler v. Colvin, Civil No. 14-338 (DWF/HB), Doc. No. [32]) is GRANTED IN PART
and DENIED IN PART AS MOOT as follows:
a.
b.
4.

Defendant’s Motion to Dismiss is GRANTED.
Defendant’s Motion to Stay is DENIED AS MOOT.

Plaintiff Vincent H. Babler’s Complaint (Babler v. Colvin,

Civil No. 14-338 (DWF/HB), Doc. No. [1]) is DISMISSED WITH PREJUDICE.
5.

Defendant’s Motion to Dismiss or Stay against Plaintiff Conrad W.

Krabbenhoft (Krabbenhoft v. Colvin, Civil No. 14-483 (DWF/HB), Doc. No. [33]) is
GRANTED IN PART and DENIED IN PART AS MOOT as follows:
a.
b.
6.

Defendant’s Motion to Dismiss is GRANTED.
Defendant’s Motion to Stay is DENIED AS MOOT.

Plaintiff Conrad W. Krabbenhoft’s Complaint (Krabbenhoft v. Colvin, Civil

No. 14-483 (DWF/HB), Doc. No. [1]) is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.

Date: July 7, 2015

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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