Parker v. Berryhill

Filing 25

OPINION AND ORDER granting 20 Motion for Leave to Amend Complaint. Plaintiff is DIRECTED to filed the amended complaint within two business days of the entry of this Order. Signed by Magistrate Judge Robert J. Krask on 10/22/18. (bpet, )

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA

Newport News Division

DIANE S. PARKER,

Plaintiff,
V.

ACTION NO. 4:17cvl43

NANCY A. BERRYHILL,

Acting Commissioner of
Social Security,
Defendant.

OPINION AND ORDER

This matter is before the Court on plaintiffs motion for leave to amend the complaint
appealing the denial of her disability benefits to raise the argument that the administrative law
judge who presided over her hearing was not hired consistent with the Appointments Clause of
the United States Constitution. ECF No. 20. This argument is premised upon the Supreme
Court case of Lucia v. SEC, 138 S. Ct. 2044 (2018), decided on June 21, 2018. ECF No. 21 at 1-

2. For the reasons that follow, plaintiffs motion for leave to amend is GRANTED.

On December 15, 2017, plaintiff filed a complaint appealing the decision of the

Commissioner of the Social Security Administration ("SSA") denying her application for
disability insurance benefits ("DIB") and supplemental security income benefits ("SSI"). ECF

No. 3. Plaintiff alleged that the Appeals Council for the SSA denied her request to review the
decision of the administrative law judge ("ALJ"), which stands as the final decision of the
defendant.

Id. at 2-3.

Plaintiff further alleged that the ALJ decision is unsupported by

substantial evidence. Id. at 3. Defendant filed an answer on March 9, 2018. ECF No. 8. In

compliance with the Court's order, the parties filed cross motions for summary judgment

addressing whether substantial evidence in the record supports the decision of the ALJ, which
were fully briefed on May 26,2018. ECF Nos. 11,15-19.

On September 25, 2018, plaintiff filed a motion for leave to amend the complaint, with a
memorandum in support and a proposed amended complaint attached. ECF Nos. 20, 22. In

addition to the argument that the decision of the ALJ is not supported by substantial evidence,
plaintiff alleges the defendant's decision to deny her benefits "is unconstitutional and void

because the agency's disability determination of this case violates the Appointments Clause and
constitutional removal requirements." ECF No. 20-1 at 2. This allegation is premised upon the
holding in Lucia that ALJs for the Securities and Exchange Commission are '"Officers' under
the Appointments Clause and cannot preside over hearings unless they are hired consistent with
the Appointments Clause." ECF No. 22 at 2-3. Defendant filed an opposition to the motion for
leave to amend the complaint on October 4, 2018. ECF No. 23. Defendant asserts granting

leave to file the proposed amended complaint would be futile, because plaintiff "forfeited any
claim based upon the Appointments Clause by failing to raise it during the administrative
process." Id. at 4. Plaintiff filed a reply on October 9,2018. ECF No. 24.

Federal Rule of Civil Procedure 15(a) provides that the "court should freely give leave [to

amend] when justice so requires." Fed. R. Civ. P. 15(a). Leave to amend should be given
"unless 'the amendment would be prejudicial to the opposing party, there has been bad faith on
the part of the moving party, or the amendment would have been futile.'" Steinburg v.
Chesterfield Cnty. Planning Comm'n, 527 F.3d 377, 390 (4th Cir. 2008) (quotingv.
Harvey, 438 F.3d 404, 426 (4th Cir. 2m6))\ see Foman v. Davis, 371 U.S. 178, 182 (1962)

(explaining that leave to amend may be denied for "undue delay, bad faith or dilatory motive on
2

the part ofthe movant, repeated failure to cure deficiencies by amendments previously allowed,

undue prejudice to the opposing party by virtue of allowance of the amendment, futility of
amendment, etc."). An amendment is futile when it "is clearly insufficient or frivolous on its
face." Johnson v. Oroweat Foods Co., 785 F.2d 503, 510 (4th Cir. 1986); Wilkins v. Wells

Fargo Bank N.A., 320 F.R.D. 125, 127 (E.D. Va. 2017). A motion to amend a complaint should
be denied as futile if it is apparent that "the proposed amendments could not withstand a motion
to dismiss." Perkins v. UnitedStates, 55 F.3d 910, 917 (4th Cir. 1995). "To survive a motion to

dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
quotations omitted).

The issue of whether applicants seeking Social Security benefits waive any claim based

upon the Appointments Clause by failing to raise it during the administrative process is only
starting to work its way through the courts. The issue has not been addressed by the Fourth
Circuit, and is far from resolved. As a resuU, plaintiffs proposed amended complaint plausibly
alleges facts that could support a claim, and the amendment is not "clearly insufficient or

frivolous." The Court finds that allowing the amendment would not be futile. The Court will
address defendant's waiver argument following full briefing by the parties.

Accordingly,

plaintiffs motion for leave to amend the complaint is GRANTED and plaintiffis DIRECTED
to file the amended complaint within two business days of the entry of this Order.

The Court further DIRECTS counsel for the parties to schedule a telephone conference
with the undersigned by contacting the magistrate courtroom deputies at [phone].

The Clerk is DIRECTED to mail copies of this Order to all counsel of record.

Robert J. Krask

United States Magistrate Judge
Robert J. Krask

UNITED STATES MAGISTRATE JUDGE

Norfolk, Virginia
October 22, 2018