Opinion
IP 00-0988-C-M/S
May 15, 2001
Jacquelyn B. Suess, Indiana Civil Liberties Union Indianapolis, IN.
Laureanne Nordstrom Office of the Atty General Indiana Government Center South, Indianapolis, IN.
ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT
This matter is before the Court on the Cross Motions for Summary Judgment of Plaintiff Ivy Mason, on her own behalf and on behalf of those similarly situated ("Mason"), and Defendants Peter Sybinski, in his official capacity as Secretary of the Indiana Family and Social Services Administration, and Janet Corson, in her official capacity as Director of the Division of Mental Health. Richmond State Hospital ("RSH") is Mason's representative payee for Social Security benefits. Mason filed this lawsuit challenging RSH's practice of deducting a portion of her Social Security benefits without her consent to pay for the costs of her maintenance. Mason claims RSH's actions violated the "anti-assignment" provision of the Social Security Act, which is found at 42 U.S.C. § 407. She also claims that RSH violated her right to procedural due process under the Fourteenth Amendment, and took her property without just compensation in violation of the Fifth Amendment. The State denies that representative payees are required to obtain beneficiaries' consent before using such benefits for their maintenance. The parties have submitted fully-briefed motions that are ripe for resolution.
I. FACTUAL AND PROCEDURAL BACKGROUND A. INDIANA'S SYSTEM OF MENTAL HEALTH CARE
Mason represents a class of individuals defined as "all past, present and future mentally impaired recipients of Social Security benefits in Indiana who are institutionalized in an Indiana state mental health institution." Indiana operates six mental health hospitals: RSH, Madison State Hospital, Evansville State Hospital, Evansville Children's State Hospital, Logansport State Hospital, and Carter State Hospital. Indiana also operates two developmental disability centers: a Muscatatuck center and a Fort Wayne center. Kent Farr Dep. at 5.
Although Mason does not discuss it, the Court assumes that all class members had representative payees for their Social Security benefits.
Because plaintiffs have sued the defendants in their official capacities, they are in effect suing the State of Indiana. Therefore, the Court will refer to the "State" as the defendant in this matter.
In Indiana, a resident is entitled to care and maintenance in a state institution if he or she is legally admitted to the state institution. Thus, individuals lawfully admitted to state mental hospitals and developmental disability centers are entitled to care and maintenance in those institutions, regardless of their ability to pay. Id.; Farr Dep. at 33, 40.
B. THE SOCIAL SECURITY ADMINISTRATION'S ABILITY TO APPOINT A REPRESENTATIVE PAYEE FOR THE RECEIPT OF BENEFITS
The Social Security Administration ("SSA") decides whether it should appoint a representative payee, and it will do so if it determines that a beneficiary is not able to manage or direct the management of benefit payments in his or her interest. Farr Dep. at 7; 20 C.F.R. § 404. 2001 (2000). The SSA has regulations and policies with respect to the duties and responsibilities of representative payees. 20 C.F.R. § 404. 2035 (2000). One of those regulations provides, in pertinent part, that a representative payee generally has the responsibility to use the payments he or she receives only for the use and benefit of the beneficiary in a manner and for the purposes he or she determines to be in the best interests of the beneficiary. Id. The SSA considers payments to have been used for the "use and benefit" of the beneficiary if they are used for the beneficiary's current maintenance. 20 C.F.R. § 404. 2040 (2000). If a beneficiary is receiving care in a federal, state, or private institution because of mental or physical incapacity, "current maintenance" includes the customary charges made by the institution, as well as expenditures for those items which will aid in the beneficiary's recovery or release from the institution or expenses for personal needs which will improve the beneficiary's conditions while in the institution. Id.
C. THE STATE OF INDIANA AS A REPRESENTATIVE PAYEE
The SSA sometimes appoints Indiana state hospitals as the representative payees for Social Security recipients who are institutionalized in hospitals. Farr Dep. at 17-18. The SSA provides notices to representative payees that Social Security benefits of recipients must be used for the benefit and care of the recipients. Id. at 36-37. The SSA also provides notice to the recipients that a representative payee has been appointed, and informs such individuals of the right to appeal such appointment under Social Security procedures. Id. at 15-16.
Once a state hospital is appointed as a representative payee for an institutionalized Social Security recipient, the hospital places the recipient's benefits into a trust account. Id. at 14, 18. It appears that from that trust account spending money is paid out to recipients and at least a portion of the remainder is applied to institutional maintenance costs. Id. at 14. Institutionalized Social Security recipients do not assign their Social Security benefits to be used for cost of their care, treatment, or maintenance in a state hospital; rather, portions of such benefits are simply deducted from their trust account to pay for such costs. Id. at 37-40.
Before Social Security benefits of institutionalized individuals are placed into a trust account, the state hospitals inform such individuals that they are liable for the cost of their care in the hospital and verbally inform them that their Social Security benefits may be used to pay for that cost. Farr Dep. at 24.
Upon recipients' admissions or soon thereafter, Indiana mental health institutions routinely require them to sign a state form entitled "Notification of Liability for Cost of Care and Treatment." Id. at 30, 32; Farr Dep. Ex. A. The State never informs institutionalized Social Security recipients, verbally or in writing, that they are not required to use their Social Security benefits to pay for the cost of their care, maintenance, and treatment in the state hospital. Farr Dep. at 27, 41-42. Nor does the State inform such recipients that they will be given treatment, care, and maintenance in the state hospital even if they do not use their Social Security benefits to pay for the cost of such care, treatment, and maintenance. Complaint ¶ 42; Affidavit ¶ 12; Farr Dep. at 41. The State never obtains written consent from institutionalized Social Security recipients or their representative payees to allow the State to apply such recipients' Social Security benefits to the cost of their care, treatment, and maintenance in the state hospital. Farr Dep. at 37-38, 42.
D. MASON'S COMMITMENTS TO STATE HOSPITALS
Mason is a mentally disabled individual who has been periodically involuntarily committed to RSH from July 7, 1992, to January 14, 1993; October 4, 1994, to June 18, 1999; and December 4, 1999, to present. Complaint ¶ 31. The SSA sent Mason a statement notifying her that it had decided she needed someone to manage her benefits and that it would send her benefits to a representative payee. Farr Dep. at Ex. F. The SSA also notified her that it was the duty of the representative payee to use her benefits for her interests, and that it had chosen RSH to be her representative payee. Id. Mason signed the statement on December 20, 1999. Id.
On January 29, 1998, Mason was awarded Social Security survivor's benefits retroactive to June 1989 as the survivor of her deceased father. Complaint ¶ 36; Mason Aff. ¶ 6. SSA informed Mason that, in addition to on-going monthly Social Security benefits in the amount of $618, she would also be receiving a check for $34,408.73 for the Social Security benefits she was owed from June 1989 through April 1999. Complaint ¶ 37. On May 30, 2000, SSA informed Mason and RSH that $25,942.73 of the $34,408.73 back payment to her should be applied to her outstanding RSH bill for her care and treatment. Complaint ¶ 38.
Upon her October 4, 1994, and December 4, 1999, commitments to RSH, Mason was required to sign a "Notification of Liability for Cost of Care and Treatment" in which she acknowledged that she would be liable for the cost of her care and maintenance at RSH under Indiana law. Complaint ¶ 32 and Attachment A; Farr Dep. at 33. RSH has already applied some portions of Mason's monthly Social Security benefits to her bill for her care and maintenance at RSH. Complaint ¶ 39. Although Mason signed the Notification of Liability for Cost of Care and Treatment at RSH, she never signed any document consenting to the use of her Social Security benefits for payment for such care and treatment. Complaint ¶ 41; Mason Aff. ¶ 11; Farr Dep. at 56-57. RSH never advised Mason that she would be treated regardless of whether she consented to the payment of her bill with her Social Security benefits, that any consent to such payment was revocable, or that her Social Security benefits were not subject to legal process. Complaint ¶ 42; Mason Aff. ¶ 12; Farr Dep. at 54-55.
The daily charge for cost of care at RSH was $239 as of August 1, 1998, for a monthly rate of approximately $7,170. As a representative payee, the State deducts a percentage of that monthly rate (which apparently amounts to about $518) from a patient's trust account for current maintenance charges. Farr Dep. at Ex. E.
II. STANDARDS A. SUMMARY JUDGMENT STANDARDS
As stated by the Supreme Court, summary judgment is not a disfavored procedural shortcut, but rather is an integral part of the federal rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see United Ass'n of Black Landscapers v. City of Milwaukee, 916 F.2d 1261, 1267-68 (7th Cir. 1990), cert. denied, 111 S.Ct. 1317 (1991). Motions for summary judgment are governed by Rule 56(c) of the Federal Rules of Civil Procedure, which provides in relevant part:
The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
Once a party has made a properly-supported motion for summary judgment, the opposing party may not simply rest upon the pleadings but must instead submit evidentiary materials which "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). A genuine issue of material fact exists whenever "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The nonmoving party bears the burden of demonstrating that such a genuine issue of material fact exists. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 997 (7th Cir. 1996), cert. denied, 520 U.S. 1116 (1997). It is not the duty of the court to scour the record in search of evidence to defeat a motion for summary judgment; rather, the nonmoving party bears the responsibility of identifying the evidence upon which he relies. Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560, 562 (7th Cir. 1996). When the moving party has met the standard of Rule 56, summary judgment is mandatory. Celotex, 477 U.S. at 322-23; Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992).
In evaluating a motion for summary judgment, a court should draw all reasonable inferences from undisputed facts in favor of the nonmoving party and should view the disputed evidence in the light most favorable to the nonmoving party. Estate of Cole v. Fromm, 94 F.3d 254, 257 (7th Cir. 1996), cert. denied, 519 U.S. 1109 (1997). The mere existence of a factual dispute, by itself, is not sufficient to bar summary judgment. Only factual disputes that might affect the outcome of the suit in light of the substantive law will preclude summary judgment. Anderson, 477 U.S. at 248; JPM Inc. v. John Deere Indus. Equip. Co., 94 F.3d 270, 273 (7th Cir. 1996). Irrelevant or unnecessary facts do not deter summary judgment — even when in dispute. Clifton v. Schafer, 969 F.2d 278, 281 (7th Cir. 1992). "If the nonmoving party fails to establish the existence of an element essential to his case, one on which he would bear the burden of proof at trial, summary judgment must be granted to the moving party." Ortiz v. John O. Butler Co., 94 F.3d 1121, 1124 (7th Cir. 1996), cert. denied, 519 U.S. 1115 (1997).
B. THE SOCIAL SECURITY ACT
The benefits of the Social Security Act were intended to provide "the claimant and those dependent upon him, as the wage earner, with protection against the economic hardship occasioned by the loss of wages resulting by reason of death, disability or retirement of the wage earner." Kelbach v. Harris, 634 F.2d 1304, 1309 (10th Cir. 1980), citing Califano v. Boles, 443 U.S. 282 (1980); Califano v. Jobst, 434 U.S. 47 (1977); Califano v. Goldfarb, 430 U.S. 199 (1977); Matthews v. DeCastro, 429 U.S. 181 (1976). Toward that end, the Act provides that such benefits will be protected from legal process.
Specifically, the Act provides that:
The right of any person to any future payment under this subchapter will not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.42 U.S.C. § 407. The Act's regulations provide that payment of benefits may be remitted to a representative payee, who must "use the payments he . . . receives only for the use and benefit of the beneficiary in a manner . . . he . . . determines, under the guidelines in this subpart, to be in the best interests of the beneficiary." 20 C.F.R. § 404. 2035(a) (2000). The regulations further provide that "for the use and benefit of the beneficiary" includes the use for the "beneficiary's current maintenance." 20 C.F.R. § 404. 2040(a) (2000). If the beneficiary is institutionalized "because of mental . . . incapacity, current maintenance includes the customary charges made by the institution . . . or expenses for the personal needs which will improve the beneficiary's conditions while in the institution." Id. at § 404. 2040(b) (2000). With these standards in mind, the Court will now address the parties' arguments.
III. DISCUSSION A. DID RSH VIOLATE § 407?
There is no dispute that RSH, as representative payee of Mason, deducted a percentage of her Social Security benefits to pay for the cost of her maintenance. Mason concedes that SSA was authorized to appoint RSH as a representative payee to receive her Social Security benefits. She claims, however, that RSH's practice of deducting such benefits violates the "anti-assignment" provision of the Social Security Act. Again, that provision provides that:
The right of any person to any future payment under this subchapter will not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.42 U.S.C. § 407. The exemption from legal process created by this section seeks "to protect social security beneficiaries and their dependents from the claims of creditors." Kriegbaum v. Katz, 909 F.2d 70, 73 (2nd Cir. 1990), citing Fetterusso v. State of New York, 898 F.2d 322, 327 (2nd Cir. 1990).
Moreover, the Supreme Court has found that the language of this section is all inclusive and that it "imposes a broad bar against the use of any legal process to reach all Social Security benefits." Philpott v. Essex County Welfare Board, 409 U.S. 413, 417 (1973).
In Philpott, an individual named Wilkes applied for assistance from one of New Jersey's welfare agencies, the Essex County Welfare Board. In exchange for receiving assistance, Wilkes was required to sign a reimbursement agreement, which had the effect of a judgment and allowed the Board to obtain reimbursement out of subsequently discovered or obtained assets. Id. at 414-415. After receiving assistance from the Board, Wilkes later was awarded lump-sum retroactive disability benefits under the Social Security Act. When Wilkes declined to repay his interim assistance, the Board sued to reach the bank account into which Wilkes had deposited his benefits check. Id. The State argued that Wilkes' state benefits should have been reduced by the amount of federal benefits he received. The Court, relying upon § 407, found "no reason to base an implied exemption from § 407 on that ground. We see no reason why a State, performing its statutory duty to take care of the needy, should be in a preferred position as compared with any other creditor." Id. at 416. Accord, Bennett v. Arkansas, 485 U.S. 395, 397 (1988) ("Section 407(a) unambiguously rules out any attempt to attach Social Security benefits.").
The Seventh Circuit has also weighed in on the issue, finding that § 407 prohibited the State of Illinois from applying Social Security benefits to patients' maintenance costs without first obtaining their consent. In Tidwell v. Schweiker, 677 F.2d 560 (7th Cir. 1982), cert. denied, 461 U.S. 905 (1983), the plaintiffs challenged the statutory and regulatory scheme providing for the payment of Social Security disability benefits to institutionalized mental patients. Plaintiffs' disability benefits were subject to seizure in the following manner: If a patient entering an Illinois institution was determined to be competent, he or she was asked to sign a form (Form 623) that allowed the state to accumulate disability benefits and other assets in a trust fund. Id. at 563. When the assets in the fund reached $400, the state could use the surplus to pay the support costs incurred by the patient at the institution. The form did not inform the patients, however, that they would be cared for regardless of whether they signed the form, that the agreement was revocable at any time, or that the agreement covered Social Security disability benefits, which were not otherwise subject to legal process. Id.
The Seventh Circuit found that although the form was revocable, it still remained a transfer or assignment while it was in effect, which violated § 407. Id. at 567-568. In addition, the Court was not convinced that it was voluntary because nowhere on the form did it state that a patient would be treated regardless of whether he signed the form or that the agreement was revocable:
Unless a patient in a DMH institution is advised that he will receive treatment regardless of whether he signs Form 623, that Form 623 is revocable, and that the form covers Social Security benefits not subject to legal process, it cannot be said that Form 623 is voluntary or that the patient retains enough control to remove the agreement from the ambit of section 407."
Id. at 567-568. Accord, Crawford v. Gould, 56 F.3d 1162, 1167 (9th Cir. 1995) (noting that a state "can apply a patients' Social Security benefits to the cost of institutionalized care only if the patient has provided consent. Absent consent a state has no valid means of obtaining an institutionalized person's Social Security benefits.").
It is undisputed that RSH did not obtain Mason's consent before deducting her benefits to pay her maintenance costs, nor did it notify her that she was entitled to treatment even if she did not use her benefits in such a manner. Both parties agree, however, that the SSA has the authority to appoint a representative payee if it determines that the beneficiary is not able to manage or direct the management of benefit payments in his or her interest. 20 C.F.R. § 404. 2001 (2000). The SSA may appoint a representative payee, for example, where it has information that the beneficiary is legally incompetent or mentally incapable of managing benefit payments. 20 C.F.R. § 404. 2010 (2000). In this case, that is exactly what happened.
After determining that Mason was unable to manage her benefits, the SSA appointed RSH as her representative payee. Whenever the SSA intends to make a representative payment and to name a payee, it notifies the beneficiary or the individual acting on his or her behalf of its proposed action. 20 C.F.R. § 404. 2030 (2000). The SSA notifies the beneficiary that it plans to name a representative payee and who that payee will be. It also asks the beneficiary to contact it if he or she objects to either proposed action.
The beneficiary also has an opportunity to request a reconsideration of the SSA's determinations. 20 C.F.R. § 404. 2030 (2000). Mason does not dispute that she received such notice.
As Mason's representative payee, RSH had the responsibility to use the payments it received only for the use and benefit of Mason and in a manner and for the purposes it determined to be in Mason's best interests. 20 C.F.R. § 404. 2035 (2000). The SSA considers the payments it certifies to RSH to have been used for the "use and benefit" of Mason if they are used for her current maintenance, which includes the customary charges made by RSH. 20 C.F.R. § 404. 2040(a)(b) (2000). That is what RSH did in Mason's case — it deducted a percentage of her benefits and applied it to her current maintenance costs.
Mason does not challenge SSA's appointment of RSH as her representative payee. Nor does she challenge RSH's ability to use her benefits the cost of her maintenance. Instead, relying upon Tidwell, she claims that before using the benefits for such purpose, RSH was required to get her consent. Because it failed to do so, Mason contends that the State has violated § 407.
1. Did RSH Subject Mason's Benefits To "Other Legal Process?"
The State initially argues that Mason has not shown that RSH executed, levied, attached, garnished, or otherwise subjected her Social Security benefits to legal process, which is all that § 407 prohibits.
Mason disagrees, claiming that RSH's practice of deducting her benefits without her consent amounts to "other legal process." Mason relies upon Crawford, 56 F.3d at 1162, for the proposition that "other legal process" applies to actions beyond simply the judicial process. See Mason's Reply Brief at 13, n. 1. In Crawford, however, the plaintiffs were patients in psychiatric hospitals, but they did not have representative payees. The State of California asked patients to sign a form that authorized it to deposit their money, including Social Security benefits, into a deposit fund. The form also gave the hospital trust officer authority to make withdrawals from the patients' accounts. Id. at 1163-1164. If a patient refused to sign the authorization form, the State still followed the deposit and withdrawal procedures. It would simply provide nonconsenting patients with a "Notice of Intended Withdrawal," which informed them of the amount the hospital would be withdrawing monthly from the trust account. Id. at 1164. At least five of the six named plaintiffs had either refused to sign the authorization or had subsequently revoked their authorization.
The State of California argued that the term "other legal process" contained in § 407 encompassed only judicial process. The Ninth Circuit disagreed, noting that its conclusion that "other legal process" included the procedure California was using to deduct Social Security benefits was consistent with the purpose of § 407:
The nonassignment provision was not designed to preclude use of only the judicial process to obtain Social Security benefits. Rather, § 407(a) is designed `to protect social security beneficiaries and their dependents from the claims of creditors.' Fetteruso v. New York, 898 F.2d 322, 327 (2nd Cir. 1990). The cramped reading of § 407 California urges would enable the state to obtain Social Security benefits through procedures that afford less protection than judicial process affords.
Id. at 1166. As already discussed, the Tidwell court similarly found that the State of Illinois' practice of deducting benefits from competent patients without getting their consent fell within the ambit of § 407. Tidwell, 677 F.2d at 567-568.
The Court agrees that "other legal process" goes beyond the traditional legal or judicial process. Otherwise, as the Ninth Circuit pointed out, states may be able to obtain benefits through procedures that afford less protection than that which is found in the judicial process. But the Court is not persuaded that in cases where the SSA has appointed a state as a representative payee, that state's decision to apply benefits to the cost of a beneficiary's current maintenance amounts to "other legal process." Otherwise, the federal regulations permitting RSH to be a representative payee and allowing it to reimburse itself for the cost of current maintenance would make no sense. See King v. Schafer, 940 F.2d 1182, 1185 (8th Cir. 1991), cert. denied sub nom., Crytes v. Schafer, 502 U.S. 1095 (1992) ("Section 407 was not intended to outlaw a procedure expressly authorized by the Social Security Administration's own regulations."). Mason's circumstances are different from those involved in Crawford and Tidwell, where the states were extracting benefits from unwilling, competent beneficiaries. Here, RSH is Mason's representative payee, and is charged with the obligation of using her benefits in her best interests. In so doing, RSH determined that it should apply a portion of her benefits to pay for her maintenance, an act that is fully authorized by the SSA's regulations. The Court concludes that RSH's action was not "other legal process" as contemplated by § 407. Although Mason's claim fails on that basis alone, the Court will also address the parties' other arguments with respect to whether Tidwell required RSH to get Mason's consent before using her benefits to pay for her maintenance.
Both Philpott and Bennett are also distinguishable because in both cases, states were attempting to reach benefits in ways expressly prohibited by § 407. King, 940 F.2d at 1185. In Philpott, the Supreme Court held that a state could not file suit to reach such benefits. In Bennett, a case involving prisoners, the Court held that there was no implied exception to § 407 that would allow a state to attach such benefits simply because it had provided care and maintenance. Id. In Mason's case, RSH has not filed suit nor attempted to attach her benefits.
2. Should Tidwell Apply To Mason's Case?
The State argues that Tidwell is distinguishable because in that case the State of Illinois was not a representative payee for the patients who signed the Form 623 at issue. This argument has some merit. In Tidwell, the Seventh Circuit held that Form 623, which was used only for beneficiaries who were determined to have been competent, violated § 407 because the State did not obtain the beneficiaries' voluntary consent before applying their Social Security benefits to the cost of their maintenance. Mason contends that the same rule should apply here, where the State is a representative payee.The reasoning of Tidwell, however, is not necessarily applicable to Mason's situation because the SSA has already determined that she is incapable of managing her benefits. In other words, after an opportunity to be heard thereon, the SSA found that Mason is unable to make logical and reasonable decisions with respect to the use of her benefits. In situations like Mason's, the SSA has developed a procedure whereby it appoints a representative payee to make those decisions for the beneficiary. In this case, that happens to be RSH. The SSA notified Mason that it was going to appoint RSH, and gave her an opportunity to object to the appointment, which she apparently did not do. Now that it is the representative payee of Mason, RSH is charged with the responsibility of using her benefits in a manner and for the purposes it deems to be in her best interests. The SSA, through its regulations, has authorized representative payees like RSH to use such benefits for maintenance, including the customary charges of an institution where a beneficiary is receiving care because of a physical or mental capacity.
The Court is not inclined to extend the holding of Tidwell to situations where the SSA has appointed a representative payee. It would make no sense to require the State to obtain consent from an individual who has already been deemed incapable of managing his or her own benefits. The Court presumes that one who is incapable of managing his or her benefits would likewise be unable to reasonably determine whether such benefits should be used for his or her maintenance. Moreover, in those cases where the beneficiary is mentally incapacitated, it is doubtful that the State would ever be able to obtain "voluntary" consent. As a result, the Court concludes that RSH, as representative payee of Mason, was not required to obtain Mason's voluntary consent before using a portion of her Social Security benefits to pay for the costs of her maintenance.
B. MASON'S CONSTITUTIONAL CLAIMS
Mason also claims that the loss of control over the use of her benefits amounts to a taking without just compensation in violation of the Fifth Amendment, and violates her right to due process under the Fourteenth Amendment. The Court will briefly address those claims.
The Fifth Amendment prohibits governmental taking of private property "for public use without just compensation." To state a claim of a taking in violation of the Fifth Amendment, Mason must first show she possessed a recognized property interest which may be protected. Winters v. Mowery, 836 F. Supp. 1419, 1424 (S.D.Ind. 1993), citing Penn Central Transportation Co. v. New York City, 438 U.S. 104, 124-25 (1978). Assuming Mason had a property interest in her Social Security benefits, she would also need to establish that there was a "taking." Winters, 836 F. Supp. at 1426. The Supreme Court has identified several factors for determining whether a taking has occurred: (1) "the economic impact of the regulation on the claimant;" (2) "the extent to which the regulation has interfered with distinct investment-backed expectations;" and (3) "the character of the governmental action" — whether the interference with property can be "characterized as a physical invasion by government" or whether the interference "arises from some public program adjusting the benefits and burdens of economic life to promote the common good." Penn Central, 438 U.S. at 124-125. The government may impose regulations to adjust rights and economic interests among people for the public good, as long as the government does not force "some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." See Armstrong v. United States, 364 U.S. 40, 49 (1960).
In this case, the State is not the one that caused Mason to lose control of her benefits. Instead, it was the SSA that determined she was no longer capable of making decisions regarding her benefits. As a result, the SSA appointed RSH as a representative payee, stripping Mason of the right to control her benefits. If Mason had any objection to losing her right to control her benefits, the time for voicing her concern was when the SSA appointed RSH as her representative payee. Now that she no longer possesses that right, she cannot complain that the State — as a representative payee looking out for her best interests — is somehow "taking" her benefits by applying them to the cost of her maintenance. In addition, even if the State had "taken" Mason's property, the Court is persuaded that she received just compensation. Indeed, the State has provided her meals, shelter, and medical care for years. This is sufficient compensation in return for the use of her benefits. Because there is no evidence RSH or the State took any of Mason's property without just compensation, her claim fails as a matter of law.
Mason's due process claim fares no better. In procedural due process claims, "the deprivation by state action of a constitutionally protected interest in `life, liberty, or property' is not in itself unconstitutional; what is unconstitutional is the deprivation of such an interest without due process of law." Brokaw v. Mercer County, 235 F.3d 1000, 1020 (7th Cir. 2000), citing Doe by Nelson v. Milwaukee County, 903 F.2d 499, 502 (7th Cir. 1990). Thus, the Court must conduct a two-part analysis: (1) whether the State deprived Mason of a protected liberty or property interest, and (2) if so, what process was due. Id. Again, it was not the State that deprived Mason of her ability to control her benefits. Instead, it was the SSA that eliminated that right when it appointed RSH as her representative payee. The SSA provided Mason with notice of the appointment and gave her an opportunity to object. Mason also had the right to request a reconsideration of the decision. She did neither. The Court concludes that Mason was provided with ample opportunity to protect her right to control the use of her benefits, and that the State did not deny her rights to procedural due process. See King, 940 F.2d at 1186 ("Labelling the Department a preferred creditor is something of a misnomer at any rate. For one thing, under federal regulations, the patients receive notice of and may object to the Department's appointment as representative payee. 20 C.F.R. § 404. 2030 (1991). Thus, the patients have, in effect, the ability to safeguard their own benefits."). The State is also entitled to summary judgment on Masons' procedural due process claim.
IV. CONCLUSION
Plaintiffs have failed to present sufficient evidence from which the Court could find a genuine issue of material fact on their claims that the State violated the "anti-assignment" provision of the Social Security Act, found at 42 U.S.C. § 407. Plaintiffs have also failed to present evidence from which the Court could find a genuine issue of material fact on their claims that the State violated their rights to procedural due process and took their property without just compensation. Accordingly, the Court GRANTS the State's Motion for Summary Judgment on all claims and DENIES Plaintiffs' Motion for Summary Judgment.
IT IS SO ORDERED.