Stanley v. Berryhill

Filing 44

MEMORANDUM OPINION AND ORDER 1) Adopting in part Report and Recommendations re 40 Report and Recommendation. 2) Granting defendant's 17 Motion to Dismiss (Written Opinion). Signed by Chief Judge John R. Tunheim on March 29, 2017. (DML) cc: Ellen Elizabeth Packenham Stanley. Modified text on 3/29/2017 (lmb).

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
ELLEN ELIZABETH PACKENHAM
STANLEY and ELLEN ELIZABETH
PACKENHAM STANLEY, as
Representative Payee for M.J.S.,
Plaintiffs,
v.

Civil No. 16-275 (JRT/KMM)

MEMORANDUM OPINION AND
ORDER ON REPORT AND
RECOMMENDATION OF THE
MAGISTRATE JUDGE

NANCY A. BERRYHILL, Acting
Commissioner of Social Security, 1
Defendant.
Ellen Elizabeth Packenham Stanley, 1530 Thomas Lake Pointe Road #217,
Eagan, MN 55122, pro se.
Craig R. Baune, Assistant United States Attorney, UNITED STATES
ATTORNEY’S OFFICE, 600 United States Courthouse, 300 South
Fourth Street, Minneapolis, MN 55415, for defendant.

This case arises from a series of adjustments made by the Social Security
Administration (“SSA”) to social security benefits allegedly owed to Plaintiff Ellen
Elizabeth Packenham Stanley.

Stanley filed an Amended Complaint pursuant to the

Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2671 et seq., alleging the SSA
negligently reduced Stanley’s social security benefits. United States Magistrate Judge
Katherine Menendez issued a Report and Recommendation (“R&R”) on January 17,
1

Nancy A. Berryhill became Acting Commissioner of Social Security on January 23,
2017 and is automatically substituted for Carolyn W. Colvin as Defendant in this action pursuant
to Rule 25(d) of the Federal Rules of Civil Procedure.

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2017, recommending dismissal of Stanley’s Complaint for lack of subject matter
jurisdiction. Stanley filed timely objections, arguing the government waived sovereign
immunity in the FTCA and, therefore, the FTCA supplies the Court with jurisdiction.
Because the Court lacks subject matter jurisdiction over this action, the Court will
overrule Stanley’s objections, adopt the R&R, in part, and dismiss Stanley’s Amended
Complaint without prejudice.

BACKGROUND
From approximately May through July 2014, Stanley allegedly suffered a decrease
in social security benefits because SSA employees improperly input an equity settlement
into the “earnings” category in the SSA computer system. (Am. Compl. ¶¶ 7, 9, May 12,
2016, Docket No. 8.) According to Stanley, the SSA improperly reduced her social
security benefits from $411 to $1 a month. (Id. ¶ 7.) Stanley asserts she contacted the
SSA numerous times regarding the reduction in benefits, but “was ignored and was not
given the proper paperwork and/or interview.” (Id. ¶ 8.) Stanley alleges the SSA’s
negligence caused:

her “household to become financially unstable”; eviction from

Stanley’s home; the death of Stanley’s dog; and both “physical[] and psychological[]”
pain to Stanley and her son M.J.S. 2 (Id. ¶¶ 7, 10.)

2

The Court recognizes Ellen Elizabeth Packenham Stanley is not an attorney and, as
such, could not bring this action on behalf of her child M.J.S., who was a minor at the time
Stanley filed this case. See Buckley v. Dowdle, No. 08-1005, 2009 WL 750122, at *1 (8th Cir.
2009) (citing Myers v. Loudoun Cty. Pub. Sch., 418 F.3d 395, 401 (4th Cir. 2005)). Nevertheless,
because the Court will dismiss Stanley’s Amended Complaint for lack of subject matter
jurisdiction, the Court does not separately analyze this issue.

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In July 2015, Stanley filed a claim for damages with the SSA alleging SSA
employees negligently decreased her social security benefits in violation of the FTCA. 3
(Decl. of Lucinda E. Davis (“Davis Decl.”) ¶ 3 & Ex. 1, Aug. 9, 2016, Docket No. 21.)
On August 13, 2015, the SSA denied Stanley’s claim. (Id., Ex. 2 at 1.) The SSA found
Stanley failed to submit evidence showing “a negligent act or omission of a federal
employee acting within the scope of his or her employment caused [Stanley’s] injury.”
(Id.) The SSA further advised Stanley of its position that the FTCA did not permit claims
related to benefits calculations against the SSA. (Id. (citing 42 U.S.C. § 405(h)).) The
SSA informed Stanley that the proper procedure for appealing this determination was to
“fil[e] suit in the appropriate United States District Court within six (6) months.” 4 (Id.)

3

The government’s submissions also indicate Stanley filed an initial request for
reconsideration and request for waiver regarding the benefits calculation in April 2014. (Decl. of
Cristina Prelle (“Prelle Decl.”), Ex. 1 at 4, Aug. 9, 2016, Docket No. 20.) In September 2014,
the SSA denied the request for reconsideration on the calculation of “her mother’s benefits” and
Stanley filed a request for a hearing before an Administrative Law Judge (“ALJ”). (Id.) The
ALJ issued two decisions regarding this issue, in October 2015 and December 2015 respectively,
both finding Stanley’s mother’s benefits were properly calculated and dismissing the request for
reconsideration on the basis of res judicata. (Id. at 7; Prelle Decl., Ex. 2 at 8.) The record
indicates Stanley requested review of the ALJ’s decisions with the Appeals Council, (Prelle
Decl. ¶ 3(c)), and that this administrative matter is still pending (R&R at 3 (noting the
administrative matter was pending as of November 18, 2016)).
4

Stanley correctly points out that, contrary to the findings in the R&R, the SSA did not
advise Stanley of her right to appeal the FTCA claim to the Appeals Council. (See Pl.’s Obj. to
R&R at 2-3, Jan. 27, 2017, Docket No. 41 (citing Davis Decl., Ex. 2).) In fact, the SSA directly
informed Stanley any appeal should be filed “in the appropriate United States District Court.”
(Davis Decl., Ex. 2; see also Davis Decl. ¶ 4 (“I . . . advised [] Stanley of her right to appeal
SSA’s decision in the appropriate United States District Court”).) Therefore, on the record
before the Court, Stanley appears to have exhausted her administrative remedies on this claim.
See 28 U.S.C. § 2675(a) (requiring the claimant to first “present[] the claim to the appropriate
Federal agency” and the claim be “finally denied by the agency in writing”). But the Court need
not decide the issue because the Court adopts the recommendation of the Magistrate Judge that
(Footnote continued on next page.)

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Stanley filed the Amended Complaint on May 12, 2016, alleging the SSA
negligently reduced Stanley’s social security benefits in violation of the FTCA. 5
(See Am. Compl. at 11.)

Stanley’s Amended Complaint set forth allegations

substantially similar to the claim Stanley asserted before the SSA in July 2015. (See
Davis Decl., Ex. 1 at 3-5.) The government moved to dismiss the Amended Complaint,
arguing the Court lacks subject matter jurisdiction. (Def.’s Mot. to Dismiss, Aug. 9,
2016, Docket No. 17.) The Magistrate Judge issued an R&R recommending the Court
grant the government’s motion to dismiss for lack of subject matter jurisdiction. (R&R at
7, Jan. 17, 2017, Docket No. 40.) Stanley filed timely objections to the R&R, arguing the
Magistrate Judge erred in finding the Court lacks subject matter jurisdiction over this
matter.

____________________________________
(Footnote continued.)

the Court lacks subject matter jurisdiction. The Court does, nonetheless, reject the R&R’s
findings of fact to the extent they assert “the SSA informed . . . Stanley of her right to appeal [the
August 13, 2015] decision to the SSA’s Appeals Council” (R&R at 2-3 (citing Davis Decl.,
Ex. 2)), and the conclusion that dismissal would be proper for failure to exhaust, (see R&R at 7
n.5).
5

The Court adopts the Magistrate Judge’s recommendation to construe Stanley’s
allegations under the Federal Tort Claims Act as if properly filed against the United States. (See
R&R at 4 n.3, Jan. 17, 2017, Docket No. 40); see also Stone v. Harry, 364 F.3d 912, 915 (8th Cir.
2004) (“When we say that a pro se complaint should be given liberal construction, we mean that
if the essence of an allegation is discernible . . . then the district court should construe the
complaint in a way that permits the layperson’s claim to be considered within the proper legal
framework.”).

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DISCUSSION
I.

STANDARD OF REVIEW
After a magistrate judge files an R&R, a party may file “specific written

objections to the proposed findings and recommendations.” Fed. R. Civ. P. 72(b)(2);
accord D. Minn. LR 72.2(b)(1). “The objections should specify the portions of the
magistrate judge’s report and recommendation to which objections are made and provide
a basis for those objections.” Montgomery v. Compass Airlines, LLC, 98 F. Supp. 3d
1012, 1017 (D. Minn. 2015) (quoting Mayer v. Walvatne, No. 07-1958, 2008 WL
4527774, at *2 (D. Minn. Sept. 28, 2008)). On a dispositive motion, the Court reviews
“properly objected to” portions of an R&R de novo. Fed. R. Civ. P. 72(b)(3); accord
D. Minn. LR 72.2(b)(3).
Here, the government moves to dismiss Stanley’s Amended Complaint pursuant to
Fed. R. Civ. P. 12(b)(1). A Rule 12(b)(1) motion challenges the Court’s subject matter
jurisdiction and requires the Court to examine whether it has authority to decide the
claims. Uland v. City of Winsted, 570 F. Supp. 2d 1114, 1117 (D. Minn. 2008). In
resolving a motion to dismiss under Rule 12(b)(1) based on a “facial” attack, 6 “all of the
factual allegations concerning jurisdiction are presumed to be true and the motion is
successful if the plaintiff fails to allege an element necessary for subject matter
jurisdiction.” Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). “In other words, in a
6

Neither Stanley nor the government object to the Magistrate Judge’s recommendation
that the government’s motion is a “facial” attack – “the government argues that regardless of the
truth of the fact in . . . Stanley’s complaint, the Court lacks . . . subject matter jurisdiction.”
(R&R at 3.)

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facial challenge, the court ‘determine[s] whether the asserted jurisdictional basis is
patently meritless by looking to the face of the complaint, and drawing all reasonable
inferences in favor of the plaintiff.’” Montgomery, 98 F. Supp. 3d at 1017 (quoting
Biscanin v. Merrill Lynch & Co., 407 F.3d 905, 907 (8th Cir. 2005)).

II.

SUBJECT MATTER JURISDICTION
Stanley primarily challenges the R&R’s recommendation that the Court lacks

subject matter jurisdiction over this action. Specifically, Stanley challenges the R&R’s
conclusion that the Court lacks subject matter jurisdiction because the exclusive remedy
provision in the Social Security Act – 42 U.S.C. § 405(h) – “precludes pursuing tort
claims via the FTCA.” (R&R at 5; see also Pl.’s Obj. to R&R at 4, Jan. 27, 2017, Docket
No. 41 (arguing section 405(h) does not bar an “action for tortfeasance”).)
Absent an express waiver by the government, sovereign immunity protects the
United States and its agents from suit. United States v. Shaw, 309 U.S. 495, 500-01
(1940); United States v. Kearns, 177 F.3d 706, 709 (8th Cir. 1999). A district court lacks
jurisdiction to hear a case against the United States or its agents unless sovereign
immunity has been expressly waived. F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994)
(“Absent a waiver, sovereign immunity shields the Federal Government and its agencies
from suit.”). In some circumstances, the FTCA acts as such a waiver. Hart v. United
States, 630 F.3d 1085, 1088 (8th Cir. 2011) (quoting Riley v. United States, 486 F.3d
1030, 1032 (8th Cir. 2007)). In those circumstances, the FTCA permits the United States
and its agents to be sued “in the same matter and to the same extent as a private

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individual under like circumstances” for torts committed by government employees
during the scope of their employment. 28 U.S.C. §§ 2672, 2674.
But the FTCA does not provide for an unlimited waiver of sovereign immunity in
all tort-related claims. As relevant to this case, the FTCA cannot generally be used as a
back door to circumvent an exclusive remedy provision in another statute that narrows
the relief an individual can obtain for actions by the United States or its agents. Am.
Postal Workers Union, AFL-CIO v. U.S. Postal Serv., 940 F.2d 704, 708 (D.C. Cir. 1991)
(holding a plaintiff cannot use the FTCA to circumvent an “elaborate remedial system
that has been constructed step by step, with careful attention to conflicting policy
considerations”); Paul v. United States, 929 F.2d 1202, 1204 (7th Cir. 1991) (“The FTCA
is not a back door to review . . . the administrative decision”); cf. Stencel Aero Eng’g
Corp. v. United States, 431 U.S. 666, 673 (1977) (quoting Laird v. Nelms, 406 U.S. 797,
802 (1972)) (discussing FTCA and Veterans’ Benefits Act).
Here, the Social Security Act provides an exclusive remedy for claims related to
SSA employees’ alleged mistakes in calculating an individual’s benefits. See 42 U.S.C.
§ 405(g); see also Laird v. Ramirez, 884 F. Supp. 1265, 1279 (N.D. Iowa 1995) (noting
section 405(h) “makes [section] 405(g) the exclusive remedy”). Section 405(h) provides
that “[n]o action against the United States, the Commissioner of Social Security, or any
officer or employee thereof shall be brought . . . to recover on any claim arising under”
the Social Security Act’s provisions related to the determination and administration of
old-age, survivors, and disability insurance benefits. (Emphasis added.)

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The Eighth Circuit has held the “aris[es] under” language in section 405(h) applies
to claims for negligent determination and administration of social security benefits, thus
precluding liability under the FTCA. See Goings v. United States, 287 F. App’x 543, 543
(8th Cir. 2008) (per curiam) (holding section 405(h) precluded an FTCA claim when the
claims required the district court to review an administrative decision to determine
whether Goings was entitled to disability benefits); Tallman v. Reagan, 846 F.2d 494,
495 (8th Cir. 1988) (noting section 405(h) precludes “FTCA action for damages caused by
negligently tardy processing of cost reports” (citing Marin v. HEW, Health Care Fin.
Agency, 769 F.2d 590, 592 (9th Cir. 1985))); (see also R&R at 5-6 (listing cases)).
Here, Stanley’s claim plainly arises under the Social Security Act.

All of

Stanley’s alleged injuries stem from conduct related to the calculation and administration
of her social security benefits. Thus, Stanley’s claim under the FTCA would improperly
be used as “a back door” to circumvent the remedial scheme set forth in section 405(g),
in direct contradiction of section 405(h). See Paul, 929 F.2d at 1204. Further, Stanley’s
claim would require the Court to relitigate the SSA’s benefits award, which is further
evidence the claim “aris[es] under” the Social Security Act. See Goings, 287 F. App’x at
543; see also Jarrett v. United States, 874 F.2d 201, 204 (4th Cir. 1989) (holding a claim
arises under the Social Security Act when it requires “relitigation of the denial of social
security benefits”).
For these reasons, the Court finds Stanley’s claim “aris[es] under” the Social
Security Act and is subject to the exclusive remedies set forth in section 405(g). Thus,
the Court lacks subject matter jurisdiction over Stanley’s Amended Complaint under the
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FTCA and will dismiss the Amended Complaint without prejudice, which means that the
Complaint may be refiled if done in a proper manner according to law.

ORDER
Based on the foregoing, and all the files, records, and proceedings herein, the
Court OVERRULES Stanley’s objections [Docket No. 41] and ADOPTS in part and
REJECTS in part the Report and Recommendation of the Magistrate Judge dated
January 17, 2017 [Docket No. 40] as set forth above. Accordingly, IT IS HEREBY
ORDERED that:
1.

The government’s Motion to Dismiss [Docket No. 17] is GRANTED.

2.

This case is DISMISSED without prejudice.

LET JUDGMENT BE ENTERED ACCORDINGLY.

DATED: March 29, 2017
at Minneapolis, Minnesota.

____s/
____
JOHN R. TUNHEIM
Chief Judge
United States District Court

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