Heinemann v. Social Security Administration et al

MOTION to Dismiss for Lack of Jurisdiction

D. Me.January 20, 2017

1 UNITED STATES DISTRICT COURT DISTRICT OF MAINE THEODORE HEINEMANN, ) Plaintiff, ) ) Civil No. 1:16-cv-00460-DBH v. ) ) SOCIAL SECURITY ADMINISTRATION, ) et al., ) Defendants. ) January 20, 2017 DEFENDANT SOCIAL SECURITY ADMINISTRATION’S MOTION TO DISMISS Defendant Social Security Administration (“SSA”) moves that the Court dismiss this action pursuant to the Social Security Act, 42 U.S.C. § 405(g) for failure to exhaust administrative remedies. In support of this Motion, SSA refers the court to the attached Memorandum In Support of Motion to Dismiss. Therefore, SSA respectfully requests that the Court dismiss Plaintiff’s action for failure to exhaust administrative remedies. Respectfully submitted, THOMAS E. DELAHANTY II United States Attorney /s/ Christopher L. Potter Special Assistant U.S. Attorney Social Security Administration Office of the General Counsel JFK Federal Building, Room 625 Boston, MA 02203 (617)-565-1853 christopher.L.potter@ssa.gov Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 1 of 8 PageID #: 86 1 UNITED STATES DISTRICT COURT DISTRICT OF MAINE THEODORE HEINEMANN, ) Plaintiff, ) ) Civil No. 1:16-cv-00460-DBH v. ) ) SOCIAL SECURITY ADMINISTRATION, ) et al., ) Defendants. ) January 20, 2017 DEFENDANT SOCIAL SECURITY ADMINISTRATION’S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS This Court should dismiss this action because plaintiff has failed to exhaust his administrative remedies under the Social Security Act (“Act”) in regards to his challenge to the withholding of retroactive payments under Title II of the Act. I. Background Plaintiff received Supplemental Security Income (“SSI”) disability benefits under Title XVI of the Act from February 2007 through December 2012. Declaration of Carol A. Rozen (“Declaration”) (attached) ¶ 7. Plaintiff has submitted a copy of an SSA notice dated September 12, 2016 stating that he received Title XVI SSI payments through February 2013 (Doc. 7 at 2), but that statement was incorrect; SSA has since confirmed that plaintiff received his last Title XVI SSI payment in December 2012. Declaration ¶¶ 7, 17.1 He became ineligible for Title XVI SSI payments in January 2013 due to exceeding the Title XVI SSI income limit. Id. ¶ 12; see 20 C.F.R. § 416.202(c) (providing that claimants whose income exceeds a certain level are not eligible for Title XVI SSI payments). 1 SSA is submitting a copy of the September 12, 2016 notice as an exhibit to this motion. This copy is unaltered from the original except that the first five digits of each Social Security number have been redacted. Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 2 of 8 PageID #: 87 2 In May 2009, plaintiff began receiving Title II disability benefits under his own Social Security number (ending in 4720). Declaration ¶ 10(c). He remains eligible for such benefits. Id. ¶ 8. In June 2012, plaintiff applied for Title II childhood disability benefits (“CDB”) on his father’s record (Social Security number ending in 0565). Id. ¶ 11(a).2 SSA gave that application a protective filing date of October 2007, the date plaintiff’s father became eligible for Title II retirement benefits. Id. ¶ 11(b). In December 2012, SSA found that plaintiff became eligible for such benefits in October 2007. Id. ¶ 11(d), (e). His first recurring Title II CDB monthly payment was for December 2012, although that payment was not issued until January 2013. Id. ¶ 11(d). In February 2013, in addition to receiving his regular monthly Title II CDB payment, he received a retroactive Title II CDB payment pertaining to the period of October 2007 through November 2012. See id. ¶ 11(e); Doc. 7 at 2. He remains eligible for Title II CDB payments. Declaration ¶ 8. Plaintiff would have received $21,553.18 more than he actually received in retroactive Title II CDB payments pertaining to the period of October 2007 through November 2012, but for the fact that he was receiving Title XVI SSI payments during that period. See id. ¶¶ 9, 11(f); Doc. 7 at 2. SSA’s “Title II windfall offset computation” provided that that amount was required to be paid to SSA’s Title XVI SSI trust fund. See id. In other words, plaintiff would have received $21,553.18 less in Title XVI SSI payments during that period than he actually received if his Title II CDB had been paid to him during that period, since claimants whose income exceeds a certain level are not eligible for Title XVI SSI payments. See id. 2 “Eligibility for Child’s [sic] Disability Benefits adds the requirement that the disability must have begun before claimant attained the age of 22.” Lincourt v. Colvin, No. 13-cv-343-SM, 2014 WL 4725453, at *2 (D.N.H. Sept. 23, 2014) (citing 42 U.S.C. § 402(d)(1)(B)). Such benefits are based on the earnings of the claimant’s parent(s). 42 U.S.C. § 402(d)(1), (d)(2). Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 3 of 8 PageID #: 88 3 On September 12, 2016, SSA sent plaintiff a notice explaining the withholding described above. Doc. 7 at 2-3. Plaintiff then sent SSA a letter, also dated September 12, 2016, in which he requested reconsideration of SSA’s September 12, 2016 notice, asserting that he is due the amount of $21,553.18 that went to repay the Title XVI SSI trust fund. Declaration ¶ 19. Plaintiff’s reconsideration request is still pending before SSA. Id. ¶ 20. Additionally, plaintiff’s Title II benefits are in current payment status. Id. ¶ 21. As this Court has recognized, plaintiff’s pleadings in the instant civil action, “construed liberally, assert[] a clam that the SSA should obtain reimbursement for the overpayment from [plaintiff’s mother] Ms. [Joan Logan] Bowen and not through the withholding of Plaintiff’s benefits.” Doc. 12 at 8. That is the sole surviving claim in this civil action. See Doc. 12 at 12; Doc. 13. However, contrary to what plaintiff indicated in his pleadings in this civil action, plaintiff does not have any active overpayments on his record, and there has been no reduction of his monthly benefit amount to recoup any overpayment. Declaration ¶ 22. II. Argument: This Court has no jurisdiction to hear plaintiff’s complaint regarding the withholding of Title II benefits because he has not exhausted his administrative remedies. The United States decides when it may be sued: “It is elementary that ‘[t]he United States, as sovereign, is immune from suit save as it consents to be sued . . ., and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.’” United States v. Mitchell, 445 U.S. 535, 538 (1980) (alteration and omission in original) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)). Under this principle, Congress must consent to suit in order for the United States to be sued. Block v. North Dakota, 461 U.S. 273, 287 (1983). Moreover, Congress is constitutionally empowered to prescribe the procedures and conditions Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 4 of 8 PageID #: 89 4 for judicial review of administrative orders. City of Tacoma v. Taxpayers of Tacoma, 357 U.S. 320, 336 (1958). Congress prescribed the procedures and conditions for the judicial review of final decisions made by the Commissioner of Social Security on claims under Title II and Title XVI of the Act in 42 U.S.C. §§ 405(g) and 405(h), which state in relevant part: (g) Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow. (h) The findings and decision of the Commissioner of Social Security after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Commissioner of Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner of Social Security or any officer of employee thereof shall be brought under section 1331 or 1346 of title 28, United States Code, to recover on any claim arising under this title. Thus, the only civil action an individual may bring on any claim arising under Title II or Title XVI of the Act is an action to review the final decision of the Commissioner. See Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 10 (2000) (explaining that § 405(h) makes exclusive the judicial review procedure set forth in § 405(g) and “plainly bars” federal question jurisdiction under 28 U.S.C. § 1331 “irrespective of whether the individual challenges the agency’s denial on evidentiary, rule-related, statutory, constitutional, or other legal grounds”). As previously explained, plaintiff is mistaken in asserting that he has any active overpayment on his record. Compare, e.g., Doc. 12 at 8 with Declaration ¶ 22. Nevertheless, assuming arguendo that the September 12, 2016 SSA notice that plaintiff challenges is an initial SSA determination for purposes of 20 C.F.R. § 404.902, that initial determination would have to Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 5 of 8 PageID #: 90 5 proceed through the entire administrative process, see 20 C.F.R. § 404.900(a)3, before it would be final for purposes of 42 U.S.C. § 405(g) jurisdiction. Specifically, the initial determination would have to undergo a reconsideration determination, 20 C.F.R. § 404.907, a hearing before an administrative law judge, 20 C.F.R. § 404.929, and consideration by SSA’s Appeals Council, 20 C.F.R. § 404.967.4 Under the Social Security regulations, a claimant receives a final decision subject to judicial review under 42 U.S.C. § 405(g) only if he exhausts this administrative review process and receives either (1) a decision by the Appeals Council, or (2) notice from the Appeals Council that it is denying his request for review. 20 C.F.R. § 404.981. Stated differently, only after exhausting these remedies may the claimant seek judicial review in federal court. Sims v. Apfel, 530 U.S. 103, 107 (2000) (“If a claimant fails to request review from the [Appeals] Council, there is no final decision and, as a result, no judicial review in most cases.”); Strong v. Soc. Sec. Admin. Comm’r, No. 10-00427, 2011 WL 534042, at *3 (D. Me. Jan. 26, 2011) (“The administrative review process is not complete until a claimant who is dissatisfied with a reconsideration determination has had a hearing before an administrative law judge.”), aff’d, 2011 WL 534048 (D. Me. Feb. 15, 2011). Plaintiff must “plead and prove that she has exhausted all available administrative remedies and [is] appealing to this court from adverse final agency action.” Bourgoin v. Unicredit Grp., No. 11-00120, 2011 WL 2224844, at *2 (D. Me. May 18, 2011), aff’d, 2011 WL 2222178 (D. Me. June 7, 2011); see also Reedom v. Soc. Sec. Admin. Comm’r, No. 13-00308, 2013 WL 5960861, at *1 (D. Me. Nov. 7, 2013). 3 Parallel regulations pertaining to claims under Title XVI appear at 20 C.F.R. §§ 416.1400 et seq. 4 Moreover, if the September 12, 2016 SSA notice that plaintiff challenges is not an initial determination under 20 C.F.R. § 404.902, then it is not subject to further administrative review or judicial review. 20 C.F.R. § 404.903. Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 6 of 8 PageID #: 91 6 Since plaintiff has not received a final decision from SSA regarding the withholding and alleged overpayment that he wishes to challenge in this Court, he “may not obtain judicial review because he has failed to exhaust administrative remedies.” See Sims, 530 U.S. at 107; see also Strong, 2011 WL 534042, at *3 (dismissing case because there had been no administrative hearing and, thus, there was no final decision ripe for judicial review). Thus, this Court should dismiss this case with prejudice for failure to exhaust administrative remedies. For these reasons, SSA respectfully requests that this Court dismiss Plaintiff’s action in its entirety. Respectfully submitted, THOMAS E. DELAHANTY II United States Attorney /s/ Christopher L. Potter Special Assistant U.S. Attorney Social Security Administration Office of the General Counsel JFK Federal Building, Room 625 Boston, MA 02203 (617)-565-1853 christopher.L.potter@ssa.gov Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 7 of 8 PageID #: 92 7 CERTIFICATE OF SERVICE I hereby certify that on January 20, 2017, I electronically filed the foregoing Motion to Dismiss, memorandum in support, and associated exhibits with the Clerk of Court using the CM/ECF system. I further certify that a copy of those documents will be sent on January 20, 2017, by U.S. Mail, to the following non-ECF participants: Theodore Heinemann P.O. Box 51760 Boston, MA 02205 /s/ Christopher L. Potter Special Assistant U.S. Attorney Social Security Administration Office of the General Counsel JFK Federal Building, Room 625 Boston, MA 02203 (617)-565-1853 christopher.L.potter@ssa.gov Case 1:16-cv-00460-DBH Document 28 Filed 01/20/17 Page 8 of 8 PageID #: 93 I'\, SEcu <> '1 q§/~ \ 1111111 ~/ IYJs TRI' SOCIAL SECURITY Regional Office Center of Programs Support 19th Floor - John F. Kennedy Federal Building Boston, Massachusetts 02203 I, Carol A. Rozen, hereby declare and state the following: 1. That I am an employee of the United States Social Security Administration and I work in its Boston, Massachusetts Regional Office; 2. That I have been with the agency for 26 years and I am currently the Director of the Center for Programs Support in the Social Security Administration' s Regional Office in Boston, Massachusetts; 3. That I am in a position to review certain records established and simultaneously maintained by the Social Security Administration in its system of program records and in its computerized system of program records; 4. That the following information was obtained through queries of the Social Security Administration's computerized system of program records and that an agency employee pursuant to my supervision and oversight performed the query; 5. That the information is gathered and maintained in the regular course of business of the agency in discharging its responsibilities and administering the programs under the Social Security Act; 6. That according to our records, Social Security Number (SSN) 4 720 is assigned to Theodore Hedley Heinemann; 7. That according to our records, Mr. Heinemann was eligible for Supplemental Security Income (SSI) from February 2007 through December 2012. Mr. Heinemann did not receive any SSI payments after December 2012. 8. That according to our records, Mr. Heinemann is dually entitled to Title II disability benefits on his own record and Title II childhood disability benefits (CDB) on his father ' s record. (Father is Theodore Paul Heinemann, claim number -0565Cl). 9. That due to the Mr. Heinemann' s receipt of SSI payments prior to his receipt of Title II benefits for the same period, he was subject to the Title II windfall offset computation. The Title II windfall offset is a reduction of the retroactive Title II benefits by the amount of SSI benefits that would not have been due if we had paid the Title II income on time. Case 1:16-cv-00460-DBH Document 28-1 Filed 01/20/17 Page 1 of 3 PageID #: 94 10. That according to our records, the following applies to the Title II disability benefits on Mr. Heinemann' s own record, SSN -4720: a) He filed for benefits in February 2007; b) His disability was approved at the appeal level; c) His claim was adjudicated in the April 2009 computation month. His first monthly recurring payment was issued in May 2009 for April 2009. d) His entitlement began in February 2006. His retroactive payment to the entitlement date was released in June 2009, less the amount of SSI payments he already received through the Title II windfall offset computation. e) The amount repaid to the SSI trust fund through windfall offset was $15 ,152.68. 11. That according to our records, the following applies to the Title II CDB benefits on Mr. Heinemann's father' s record, SSN -0565Cl: a) He filed for benefits in June 2012; b) The field office gave Mr. Heinemann a protective filing date of October 2007. This was the date his father became eligible for Title II retirement benefits. c) His disability under CDB rules was approved at the initial level; d) His claim was adjudicated in the December 2012 computation month. His first monthly recurring payment was issued in January 2013 for December 2012. e) His entitlement began in October 2007. His retroactive payment to the entitlement date was released in February 2013, less the amount of SSI payments he already received through the Title II windfall offset computation. f) The amount repaid to the SSI trust fund through windfall offset was $21 ,553.18. 12. That Mr. Heinemann' s receipt of Title II disability and CDB benefits in January 2013 caused him to be ineligible for SSI payments effective January 2013 due to exceeding the SSI income limit. 13. That Mr. Heinemann received an informational notice on September 12, 2016 from the office of jurisdiction of both of his Title II benefits, the Great Lakes Program Service Center (GLPSC) in Chicago, Illinois. 14. That the notice from GLPSC informed him that we withheld $21 ,553.18 of his CDB benefits to repay the SSI trust fund because of the windfall offset provision. 15. That Mr. Heinemann is not actually due $21 ,553.18 as he already received this in the form of SSI payments. 16. That the notice sent to Mr. Heinemann was erroneously issued, as the windfall offset occurred in February 2013. Case 1:16-cv-00460-DBH Document 28-1 Filed 01/20/17 Page 2 of 3 PageID #: 95 17. That the notice from GLPSC incorrectly states that we paid Mr. Heinemann SSI benefits through February 2013. He received his last SSI payment in December 2012 and he has not been eligible for SSI payments since. 18. That Mr. Heinemann filed a reconsideration dated September 12, 2016, in response to the informational notice, stating that he is rightfully due the amount of $21,553.18 that went to repay the SSI trust fund. 19. That GLPSC received Mr. Heinemann's request for reconsideration on September 27, 2016. 20. That Mr. Heinemann' s reconsideration is still pending in the GLPSC. 21. That according to our records, Mr. Heinemann' s Title II benefits are in current payment status. 22. That according to our records, Mr. Heinemann does not have any active overpayments on his record and there is no reduction of his monthly benefit amount to repay an overpayment. I, the undersigned, hereby certify that this record is being disclosed pursuant to 20 C.F.R § 401 .100 - §401.190. I further certify that the information provided is true and accurate. Executed on January 19, 2017 Carol A. Rozen, Direc~ Case 1:16-cv-00460-DBH Document 28-1 Filed 01/20/17 Page 3 of 3 PageID #: 96 M4 cb/O 1 Social Security Administration Retirement, Survivors, and Disability Insurance Important Information THEODORE HEINEMANN 1476 HAMMOND ST APT 330 BANGOR ME 04401/5714-5714 Great Lakes Program Service Center 600 West Madison Street Chicago, Illinois 60661-2474 Date: September 12, 2016 Claim Number: -0565 Cl We are writing to give you new information about the child's benefits which you receive on this Social Security record. In an earlier letter, we told you we were withholding your Social Security benefits for October 2007 through November 2012. We did this because we thought we might have to reduce your Social Security benefits if you also received Supplemental Security Income (SSI) money for this period. Now we are writing to let you know that we cannot pay you all of the Social Security benefits we withheld. This is because you received SSI money for February 2007 through February 2013. When you receive SSI money for a month, and later you receive Social Security benefits, we sometimes have to reduce your Social Security benefits. We do this to make sure that your total SSI and Social Security monthly payment is not more than it would have been if the Social Security benefits had been paid on time. Allowing for your Social Security benefits, we should have paid you $21,553.18 less in SSI money. Because of this, we are reducing your Social Security benefits by $21,553.18. • The next check you receive will be for $1,034.00, which is the money you are due through August 2016. • After that, you will receive $1,034.00 on or about the third of each month. SEE NEXT PAGE Case 1:16-cv-00460-DBH Document 28-2 Filed 01/20/17 Page 1 of 2 PageID #: 97 -0565 Cl Page 2 Suspect Social Security Fraud? Please visit http://oig.ssa.gov/r or call the Inspector General's Fraud Hotline at 1-800-269-0271 (TTY 1-866-501-2101). If You Have Questions We invite you to visit our website at www.socialsecurity.gov on the Internet to find general information about Social Security. If you have any specific questions, you may call us toll-free at 1-800-772-1213, or call your local Social Security office at 1-877-405-1448. We can answer most questions over the phone. If you are deaf or hard of hearing, you may call our TTY number, 1-800-325-0778. You can also write or visit any Social Security office. The office that serves your area is located at: SOCIAL SECURITY ROOM 10307 202 HARLOW ST BANGOR,ME 04401-4919 If you do call or visit an office, please have this letter with you. It will help us answer your questions. Also, if you plan to visit an office, you may call ahead to make an appointment. This will help us serve you more quickly when you arrive at the office. Case 1:16-cv-00460-DBH Document 28-2 Filed 01/20/17 Page 2 of 2 PageID #: 98