NEWTON v. COMMISSIONER OF SOCIAL SECURITY
Filing
13
OPINION. Signed by Judge Renee Marie Bumb on 3/29/2019. (tf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
FLOYD DOUGLAS NEWTON,
Plaintiff,
Civil No. 18-751(RMB)
v.
COMMISSIONER OF SOCIAL
SECURITY,
OPINION
Defendant.
APPEARANCES:
POLONSKY & POLONSKY
By: Alan Polonsky, Esq.
512 S. White Horse Pike
Audubon, New Jersey 08106
Counsel for Plaintiff Floyd Douglas Newton
REHM, BENNETT, MOORE, REHM & OCKANDER
ATTORNEYS AT LAW P.C., L.L.O.
By: Roger D. Moore, Esq.
3701 Union Drive, Suite 200
Lincoln, Nebraska 68516
Counsel for Plaintiff Floyd Douglas Newton
SOCIAL SECURITY ADMINISTRATION
OFFICE OF THE GENERAL COUNSEL
By: Eda Giusti, Special Assistant United States Attorney
300 Spring Garden Street, Sixth Floor
Philadelphia, Pennsylvania 19123
Counsel for Defendant Commissioner of Social Security
RENÉE MARIE BUMB, United States District Judge:
This matter comes before the Court upon an appeal by
Plaintiff Floyd Douglas Newton (“Plaintiff”) of the final
determination of the Commissioner of Social Security
(“Commissioner”), which found that Plaintiff’s Retirement
Insurance Benefits should be reduced in accordance with the
Social Security Act’s Windfall Elimination Provision (“WEP”), 42
U.S.C. § 415(a)(7).
The Commissioner found that Plaintiff, a
former Army National Guard “Dual-Status Technician,” was
simultaneously receiving pension benefits from non-covered
employment and that he did not qualify for the WEP’s “uniform
services” exception.
Plaintiff timely pursued and exhausted his
administrative remedies available before the Commissioner and
the case is ripe for review under 42 U.S.C. § 405(g). Because
this Court finds that the Commissioner’s interpretation of the
statute and regulations is both correct and reasonable, the
Commissioner’s decision will be AFFIRMED.
I.
BACKGROUND & PROCEDURAL HISTORY
The material facts in this case are not in dispute.
From
1972 to 2013, Plaintiff was a member of the United States Army
Reserve. From 1980 to 2013, Plaintiff was employed as a “DualStatus Technician” (“DST”) in the Army National Guard.
As
suggested by the “dual-status” designation, DSTs are considered
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both civilian federal employees and military members of the
National Guard.
As a condition of employment, Plaintiff was
required to maintain his military grade and membership in the
New Jersey Army National Guard, which meant that he was also
required to participate in weekend training drills and wear his
uniform while performing duties as a DST, including while
performing work as a civilian technician. [See Record of
Proceedings (“R.P”), at 17].
However, Plaintiff was paid as a
federal civil service employee and qualified for a pension
through the Civil Service Retirement System (“CSRS”). [Id.] As
such, his position was considered “non-covered employment” and
Social Security taxes were not withheld from his paycheck. [Id.]
In July 2013, Plaintiff reached the mandatory retirement
age (60 years old) for the New Jersey Army National Guard.
Due
to his “dual-status” designation, Plaintiff was no longer able
to maintain his federal civil service position as result of his
honorable discharge from the military. [R.P., at 17].
Plaintiff
receives two forms of retirement pay based on his service as a
DST with the National Guard: (1) a pension paid by the Defense
Finance an Accounting Service; and (2) an annuity paid by the
Office of Personnel Management under the CSRS. [See R.P., at 3335].
On June 2, 2015, Plaintiff submitted a Title II application
for Social Security Retirement Insurance Benefits. [R.P., at 213
27]. In a letter, dated June 12, 2015, the Social Security
Administration (“SSA”) notified Plaintiff that he qualified for
retirement benefits, but that his benefits were subject to a
reduction under the WEP. [See R.P., at 28-30].
On June 19,
2015, Plaintiff requested a reconsideration of the SSA’s initial
determination. [R.P., at 46].
In a letter, dated November 12,
2015, the SSA affirmed its prior determination that Plaintiff’s
benefits were subject to a reduction under the WEP. [R.P., at
47-51].
On November 19, 2015 Plaintiff requested a hearing
before an Administrative Law Judge (an “ALJ”) regarding the SSA
determination. [R.P., at 62].
On June 14, 2016, Plaintiff’s hearing was held before
Administrative Law Judge Kenneth Bossong.
Although Plaintiff
was informed of his right to representation, he appeared at the
administrative hearing without counsel.
At the hearing,
Plaintiff argued that his benefits should not have been reduced
under the WEP.
In support of this argument, Plaintiff
referenced the Eighth Circuit’s decision in Petersen v. Astrue,
633 F.3d 633 (8th Cir. 2011), which held that National Guard
DSTs qualify for the so-called “uniformed service” exception
under the WEP.
The ALJ explained to Plaintiff that he was bound
to follow the guidance issued by the SSA, which advises that the
Petersen holding should only to be applied to claimants residing
in the Eighth Circuit. See Acquiescence Ruling 12-1(8), 77 Fed.
4
Reg. 51842-01 (Aug. 27, 2012), correction published 77 Fed Reg.
54646-01 (September 5, 2012), effective August 27, 2012
(hereinafter “AR 12-1(8)”); SSA Program Operations Manual System
(“POMS”) – RS 00605.380.
Based upon the promulgated SSA interpretation and guidance,
on August 17, 2017, the ALJ issued a decision affirming the
prior SSA determinations; that is, that Plaintiff was entitled
to retirement benefits, but they would be reduced under the WEP.
On August 22, 2016, Plaintiff requested a review of the ALJ’s
decision by the Appeals Council. [R.P., at 200].
The Appeals
Council denied Plaintiff’s request for review on November 20,
2017, making the ALJ’s decision as the Commissioner’s final
determination. [R.P., at 3].
Plaintiff now seeks this Court’s
review on appeal.
II.
LEGAL STANDARD
When reviewing a final decision of an ALJ with regard to
social security benefits, a court must uphold the ALJ’s factual
decisions if they are supported by “substantial evidence.” Knepp
v. Apfel, 204 F.3d 78, 83 (3d Cir. 2000); 42 U.S.C. §§ 405(g),
1383(c)(3). “Substantial evidence” means “‘more than a mere
scintilla. It means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.’” Richardson
v. Perales, 402 U.S. 389, 401 (1971)(quoting Cons. Edison Co. v.
5
NLRB, 305 U.S. 197, 229 (1938)); Plummer v. Apfel, 186 F.3d 422,
427 (3d Cir. 1999).
In addition to the “substantial evidence” inquiry, the
court must also determine whether the ALJ applied the correct
legal standards. See Friedberg v. Schweiker, 721 F.2d 445, 447
(3d Cir. 1983); Sykes v. Apfel, 228 F.3d 259, 262 (3d Cir.
2000). Our review of legal issues is plenary. Schaudeck v.
Commissioner of Social Security, 181 F.3d 429, 431 (3d Cir.
1999). “Our role is not to impose upon the SSA our own
interpretation of the Social Security legislation. Rather,
because Congress has delegated to the Commissioner the
responsibility for administering the complex programs, we must
defer to her construction as long as it is reasonable and not
arbitrary and capricious.” Sanfilippo v. Barnhart, 325 F.3d 391,
393 (3d Cir. 2003)(citing Wheeler v. Heckler, 787 F.2d 101, 104
(3d Cir. 1986)).
III. DISCUSSION
On Plaintiff’s appeal, the primary issue before this Court
is whether social security benefits for DSTs are subject to
reduction under the WEP.
As correctly explained by the United
States Court of Appeals for the Eleventh Circuit, Congress
enacted the WEP in 1983 “to eliminate the unintended ‘double
dipping’ that accrued to workers who split their careers between
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employment taxed for Social Security benefits (‘covered’) and
employment exempt from Social Security taxes (‘noncovered’).”
Stroup v. Barnhart, 327 F.3d 1258, 1259-60 (11th Cir. 2003).
The non-covered employment considered under the WEP is
often federal employment that, prior to 1984, was exempt from
Social Security taxes because federal employees contributed to
the federal civil service pension which was “designed to take
the place both of social security and a private pension plan for
workers who remain in [federal] employment throughout their
careers.” See Petersen v. Astrue, 633 F.3d 633, 634 (8th Cir.
2011)(citing H.R.Rep. No. 98–25, at 22 (1983), reprinted in 1983
U.S.C.C.A.N. 219, 240).
“Prior to the passage of the WEP, in
calculating a beneficiary's primary insurance amount from the
beneficiary's average monthly earnings, the Social Security
Administration (SSA) did not consider whether the earnings came
from covered or non-covered employment.” Petersen, 633 F.3d at
634-635.
As a result, beneficiaries who split their careers
between covered and non-covered employment received both full
Social Security benefits and whatever pension benefits were
provided by the non-covered employment, during which the
beneficiary had not paid Social Security taxes.
To avoid
“double dipping” in these situations, the WEP was enacted and
requires a calculation of the Social Security benefit under a
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modified formula to account for the beneficiary’s receipt of
alternative (civil service) pension benefits. Id.
At issue in this case is the “uniformed services” exception
to the WEP.
As set forth in 42 U.S.C. ¶ 415(a)(7)(A)(III), the
WEP’s modified formula is not meant to be used to reduce
retirement benefits on the basis of “a monthly periodic payment…
based wholly on service as a member of a uniformed service.” The
term, “member of a uniformed service,” is not defined in the
provision, but rather incorporates definitions from other
sections of the U.S. Code, which encompass members of the Army
National Guard.
It is unsettled whether this language applies
to National Guard DSTs, such as Plaintiff.
Currently, there is
a Circuit split on this issue, with the Eighth Circuit applying
the exception for DSTs, and the Eleventh Circuit holding that
the exception does not apply to DSTs.
For the reasons that
follow, this Court will adopt the holding of the Eleventh
Circuit.
A. National Guard Technician Act of 1968
In 1968, Congress passed the National Guard Technician Act
(“NGTA”), which created National Guard position of “military
technician (dual status).” Pub. L. No. 90-486, § 2(1), 82 Stat.
755, 755-56, codified as 32 U.S.C. § 709.
Under the statute, a
DST is defined as a “Federal civilian employee” who is “assigned
to a civilian position as a technician in the organizing,
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administering, instructing, or training of the Selected Reserve
or in the maintenance and repair of supplies or equipment issues
to the Selected Reserve or the armed forces.” 10 U.S.C. §
10216(a)(1).
The statute specifies that DSTs “shall be authorized and
accounted for as a separate category of civilian employees,” 10
U.S.C. § 10216(a)(2), and is both “an employee of the Department
of the Army ... and an employee of the United States.” 32 U.S.C.
§ 709(e); see also 5 U.S.C. § 5534 (“A Reserve of the armed
forces or member of the National Guard may accept a civilian
office or position under the Government of the United States ...
and he is entitled to receive the pay of that office or position
in addition to pay and allowances as a Reserve or member of the
National Guard.”).
As a required condition of employment, a Dual-Status
Technician must maintain membership in the National Guard and
hold the military grade specified for the position.
Although
DSTs are considered “civilian employees,” they are required to
wear their military uniform “appropriate for the member’s grade
and component of the armed forces” while “performing duties as a
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military technician (dual status).” 10 U.S.C. § 10216(a)(1)(B);
32 U.S.C. § 709(b)(2-4).
B. Interpretation of the Uniformed Services Exception
It is well-settled that “[t]he first step in interpreting a
statute is to determine ‘whether the language at issue has a
plain and unambiguous meaning with regard to the particular
dispute in the case.’” Valansi v. Ashcroft, 278 F.3d 203, 209
(3d Cir. 2002)(quoting Marshak v. Treadwell, 240 F.3d 184, 192
(3d Cir. 2001)(internal citations omitted)). “Where the language
of the statute is clear ... the text of the statute is the end
of the matter.” Steele v. Blackman, 236 F.3d 130, 133 (3d Cir.
2001).
However, if the language of the statute is unclear, we
attempt to discern Congress' intent using the canons of
statutory construction. Ki Se Lee v. Ashcroft, 368 F.3d 218, 222
(3d Cir. 2004)(citing INS v. Cardoza–Fonseca, 480 U.S. 421, 447–
48 (1987)).
If the tools of statutory construction reveal
Congress' intent, that ends the inquiry. United States v.
Cooper, 396 F.3d 308, 311 (3d Cir. 2005), as amended (Feb. 15,
2005)(citing Valansi, 278 F.3d at 208).
If, on the other hand,
the Court is unable to discern Congress' intent using tools of
statutory construction, the Court generally defers to the
governmental agency's reasonable interpretation. See generally,
Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467
U.S. 837, 842–43 (1984). With these principles in mind, this
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Court must first examine the language of the uniformed services
exception to ascertain whether its meaning is plain and
unambiguous.
As set forth in the statute, the uniformed service
exception applies to beneficiaries who receive pension benefits
payments “based wholly on service as a member of a uniformed
service (as defined in section 410(m) of this title) which is
based in whole or in part upon his or her earnings for service
which did not constitute… [covered employment].”
The relevant inquiry in this matter is “what it means to
perform service wholly in one’s capacity as a member of a
uniformed service.” See Martin v. Soc. Sec. Admin., Comm'r, 903
F.3d 1154, 1165 (11th Cir. 2018).
This Court agrees with the
Eleventh Circuit that “wholly” has a plain meaning in this
context, and should be defined as “to the full or entire extent”
or “to the exclusion of other things.” See id. at 1164.
The
Eleventh Circuit explained:
The critical issue is therefore how the word “wholly”
interacts with the nature of the dual status technician
position. By its plain meaning, “wholly” limits the
payments covered by the uniformed services exception: even
if dual status technician employment is essentially
military, it is not subject to the uniformed services
exception if it is not wholly military in nature.
Accounting for all of the features of the dual status
technician role, we find it difficult to conclude that a
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dual status technician wholly performs that role as a
member of the National Guard.
See id. at
1166. (emphasis in original).
This Court
agrees with the reasoning set forth by the Eleventh Circuit.
Accord Kientz v. Berryhill, 2018 WL 4538480, at *2 (D. Kan.
Sept. 21, 2018)(adopting the Eleventh Circuit’s holding from
Martin).
In Petersen, the Eighth Circuit focused on the meaning of
“service as a member of a uniformed service.”
But, as the
Martin court persuasively noted, this analysis did not address
the use of the word “wholly,” which has special meaning in this
context.
Indeed, although DSTs undoubtedly perform a role that
is military in nature, the Third Circuit has previously
acknowledged that the role is not wholly military in nature.
See Willis v. Roche, 256 F. App'x 534, 536 (3d Cir.
2007)(finding that a DST holds a position requiring performance
of both military and civilian job duties)(emphasis added).
It seems that the “dual-status” designation was created for
the explicit purpose of providing DSTs with a federal civil
service pension for civilian work.
In fact, the DST position
was created “[t]o accommodate the civilian interests of these
employees without intruding on the Guard's military and security
needs, and to recognize by statute the special employee status
that had evolved informally ... all Guard technicians, who had
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previously been employees of the states, were declared to be
federal employees, and were thereby afforded the benefits and
rights generally provided for federal employees in the civil
service.” See New Jersey Air Nat. Guard v. Fed. Labor Relations
Auth., 677 F.2d 276, 279 (3d Cir. 1982); DiLuigi v. Kafkalas,
584 F.2d 22, 24 (3d Cir. 1978)(“Both [the] House and Senate
Reports indicate that the technicians were to be treated insofar
as possible like other federal employees covered by the civil
service legislation”).
Ultimately, this Court finds that the WEP’s uniformed
service exception does not apply to DSTs, such as Plaintiff.
Because the language of the statute is clear and unambiguous,
the Court finds no need to perform a Chevron analysis.1
CONCLUSION
For the foregoing reasons, the final determination of the
Commissioner will be AFFIRMED. An Order consistent with this
Opinion shall issue on this date.
DATED: March 29, 2019
s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
1 However, the Court notes that if it were to perform such
analysis, it would also find that the Commissioner applied a
reasonable interpretation of the statute.
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