People With Disabilities Foundation v. Colvin

MOTION to Dismiss for Lack of Jurisdiction

N.D. Cal.August 12, 2016

Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BRIAN J. STRETCH, CSBN 163973 United States Attorney SARA WINSLOW (DCBN 457643) Chief, Civil Division ANN MARIE REDING, CSBN 226864 Assistant United States Attorney U.S. Attorney’s Office 450 Golden Gate Avenue, Box 36055 San Francisco, CA 94102 Telephone: (415) 436-6813 Fax: (415) 436-6748 Email: annie.reding@usdoj.gov Attorneys for Defendant UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA PEOPLE WITH DISABILITIES, INC., Plaintiffs, v. CAROLYN COLVIN, Acting Commissioner of Social Security, Defendant. Case No. 3:15-cv-02570-HSG DEFENDANT’S NOTICE OF MOTION AND MOTION TO DISMISS SECOND AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES Date: October 6, 2016 Time: 2:00 p.m. Courtroom 15, 18th Floor Hon. Haywood S. Gilliam Jr. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 1 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS TABLE OF AUTHORITIES ...................................................................................................................... ii NOTICE OF MOTION AND MOTION TO DISMISS ..............................................................................1 MEMORANDUM OF POINTS AND AUTHORITIES .............................................................................2 I. INTRODUCTION ...........................................................................................................................2 II. ISSUES TO BE DECIDED .............................................................................................................4 III. STATEMENT OF THE FACTS .....................................................................................................4 A. Background on Representative Fees and SSA’s Direct Payment Process. ..........................4 B. Plaintiff’s Factual Allegations .............................................................................................9 IV. ARGUMENT .................................................................................................................................13 A. Legal Standards for a Motion to Dismiss. .........................................................................13 1. Rule 12(b)(1) Lack of Subject Matter Jurisdiction ................................................13 2. Rule 12(b)(6) Failure to State a Claim. ..................................................................14 B. The Court Lacks Subject Matter Jurisdiction Over Plaintiff’s Claims ..............................15 1. The Doctrine of Sovereign Immunity Bars Plaintiff’s Suit to Recover Representative Fees from SSA ..............................................................................15 2. Plaintiff Has Not Alleged a Colorable Due Process Claim as Required for Federal Question Jurisdiction ...........................................................................17 3. Plaintiff Cannot Establish Jurisdiction Under the Administrative Procedure Act.........................................................................................................18 4. Plaintiff Cannot Establish Jurisdiction Under the Mandamus Statute. ..................19 C. Plaintiff Fails to State a Claim for Relief Under the Theories Alleged .............................20 1. Plaintiff Cannot Pursue a Separate Cause of Action for Declaratory Relief ......................................................................................................................20 2. Plaintiff Has Failed to Allege a Cognizable Due Process Claim ...........................22 V. CONCLUSION ..............................................................................................................................25 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 2 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES CASES Arbaugh v. Y & H Corp., 546 U.S. 500 (2006) ........................................................................................................................... 17 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ........................................................................................................................... 14 Bd. of Regents of State Colls. v. Roth, 408 U.S. 564 (1972) ........................................................................................................................... 22 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2009) ............................................................................................................................. 9 Binder & Binder P.C. v. Handel (In re Handel), 570 F.3d 140 (3rd Cir. 2009) ............................................................................................................. 15 Binder & Binder v. Colvin, 818 F.3d 66 (2nd Cir. 2016)............................................................................................................... 15 Binder & Binder, P.C. v. Colvin, 55 F. Supp. 3d 439 (E.D.N.Y. 2014) ................................................................................................. 16 Binder & Binder, P.C. v. Colvin, No. 13 CV 432 (DRH), 2014 WL 6632713 (E.D.N.Y. Nov. 21, 2014) ............................................ 17 Brownell v. Ketcham Wire & Mfg. Co., 211 F. 2d 121 (9th Cir. 1954) ............................................................................................................ 20 Buchanan v. Apfel, 249 F.3d 485 (6th Cir. 2001) ............................................................................................................. 23 Califano v. Sanders, 430 U.S. 99 (1977) ............................................................................................................................. 18 Carpenter v. Mineta, 432 F.3d 1029 (9th Cir. 2005) ........................................................................................................... 25 Cohn Law Firm v. Astrue, 968 F. Supp. 2d 884 (W.D. Tenn. 2013)............................................................................................ 20 Copaken v. Secretary of Health, Educ. & Welfare, 590 F.2d 729 (8th Cir. 1979) ............................................................................................................. 25 Countrywide Home Loans, Inc. v. Mortg. Guar. Ins. Corp., 642 F.3d 849 (9th Cir. 2011) ............................................................................................................. 20 Dep’t of Army v. Blue Fox., Inc., 525 U.S. 255 (1999) ........................................................................................................................... 15 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 3 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dunn & Black, P.S., v. United States, 492 F.3d 1084 (9th Cir. 2007) ........................................................................................................... 15 Erikson v. United States, 67 F.3d 858 (1995) ............................................................................................................................. 22 Fiedler v. Clark, 714 F.2d 77 (9th Cir. 1983) ............................................................................................................... 20 Gustavson v. Wrigley Sales Co., No. 12-cv-01861-LHK, 2014 WL 60197 n.2 (N.D. Cal. Jan. 7, 2014) ............................................. 14 Hansen Beverage Co. v. Innovation Ventures, LLC, No. 08-1166, 2009 WL 6597891 (S.D. Cal. Dec. 23, 2009) ............................................................. 14 Hardisty v. Astrue, 592 F.3d 1072 (9th Cir. 2010) ........................................................................................................... 15 Heckler v. Ringer, 466 U.S. 602 (1989) ........................................................................................................................... 19 Holloman v. Watt, 708 F.2d, 1399 (9th Cir. 1983) .......................................................................................................... 13 Kildare v. Saena, 325 F.3d 1078 (9th Cir. 2003) ........................................................................................................... 19 Lee v. City of Los Angeles, 350 F.3d 668 (9th Cir. 2001) .............................................................................................................. 14 Lockwood v. Comm’r of Social Sec., 616 F.3d 1068 (9th Cir. 2010) ............................................................................................................. 6 MacDonald v. Weinberger, 512 F .2d 144 (9th Cir.1975) ............................................................................................................. 16 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (9th Cir. 2008) ........................................................................................................... 14 Mathews v. Eldridge, 424 U.S. 319 (1976) ........................................................................................................................... 23 Mayen v. Bank of Am. N.A., No. 14-CV-03757-JST, 2015 WL 179541 (N.D. Cal. Jan. 14, 2015) ............................................... 21 McCarthy v. United States, 850 F.2d 558 (9th Cir. 1988) ....................................................................................................... 13, 15 Montanez v. Shalala, No. C 99-2602 SI, 2000 WL 424191 (N.D. Cal. Apr. 10, 2000) ....................................................... 15 Moyer v. Dir., Office of Worker’s Comp. Programs, 124 F.3d 1378 (10th Cir. 1997) ......................................................................................................... 23 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 4 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Norton v. S. Utah Wilderness Alliance, 542 U.S. 55 (2004) ............................................................................................................................. 18 Pit River Home & Agric. Co-op Assoc. v. United States, 30 F.3d 1088 (9th Cir. 1994) ............................................................................................................. 19 Pittman v. Sullivan, 911 F.2d 42 (8th Cir. 1990) ............................................................................................................... 15 Power v. Barnhart, 292 F.3d 781 (D.C. Cir. 2002) ........................................................................................................... 20 Rattlesnake Coal. v. E.P.A., 509 F.3d 1095 (9th Cir. 2007) ........................................................................................................... 13 Ruckelshaus v. Sierra Club, 463 U.S. 680 (1983) ........................................................................................................................... 15 S. Cal. Gas Co., 209 F.2d 380 (9th Cir. 1953) ............................................................................................................. 14 Schilling v. Rogers, 363 U.S. 666 (1960) ........................................................................................................................... 20 Shaw v. Hahn, 56 F.3d 1128 (9th Cir. 1995) ............................................................................................................. 14 Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950) ........................................................................................................................... 21 Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005) ........................................................................................................................... 22 United States v. Nordic Vill., Inc., 503 U.S. 30 (1992) ............................................................................................................................. 15 Warre v. Comm’r of Social Sec., 439 F. 3d 1001 (9th Cir. 2006) ............................................................................................................ 6 Weisbrod v. Sullivan, 875 F.2d 526 (5th Cir. 1989) ............................................................................................................. 23 STATUTES 26 U.S.C. § 501(c)(3) .................................................................................................................................. 9 28 U.S.C. § 1331 ....................................................................................................................................... 17 28 U.S.C. § 1361 ....................................................................................................................................... 19 28 U.S.C. § 2201 ....................................................................................................................................... 20 42 U.S.C. § 405(a) ...................................................................................................................................... 4 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 5 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG iv 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42 U.S.C. § 406 .................................................................................................................................. passim RULES Fed. R. Civ. P. 12(b)(1)............................................................................................................................. 13 Fed. R. Civ. P. 12(b)(6)............................................................................................................................. 14 REGULATIONS 20 C.F.R. § 416.1500 .................................................................................................................................. 5 20 C.F.R. § 404.1700 .................................................................................................................................. 5 20 C.F.R. § 404.1703 .................................................................................................................. 3, 5, 21, 23 20 C.F.R. § 404.1720 ......................................................................................................................... passim 20 C.F.R. § 404.1725 ......................................................................................................................... passim 20 C.F.R. § 404.1726(b) ............................................................................................................................. 5 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 6 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO DISMISS PLEASE TAKE NOTICE that on October 6, 2016, at 2:00 p.m. in Courtroom 15 of the United States District Court, Northern District of California, located at 450 Golden Gate Avenue, 18th Floor, San Francisco, California, defendant Carolyn Colvin, Acting Commissioner of Social Security (“Defendant” or “SSA”), through her attorneys of record, will and hereby does move pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure for dismissal of the second amended complaint (“SAC”) in this action by plaintiff People With Disabilities Foundation (“Plaintiff” or “PWDF”). The doctrine of sovereign immunity bars this suit to compel SSA to pay attorneys’ fees directly to the Plaintiff and, accordingly, this Court lacks subject matter jurisdiction over Plaintiff’s claims. The SAC also fails to state a claim as a matter of law. Plaintiff’s declaratory relief claim must be dismissed because it is not a cause of action but rather a form of equitable relief that must be premised on valid standalone claim, which does not exist here. To the extent Plaintiff seeks a writ of mandamus, even though PWDF alleges only mandamus jurisdiction and not a standalone cause of action, any such claim fails for being based on the erroneous assumption that the SSA is obligated to pay representatives’ fees, that the administrative review procedures in 42 U.S.C. § 406(a)(3) are applicable to Plaintiff’s claims, and that Plaintiff has no other adequate remedies. Plaintiff has similarly failed to state a due process claim since it does not have a protectable property interest in any specific amount of representative fees, Plaintiff received notice and an opportunity to respond when SSA revised fee determinations, and the process for administrative review of fee determinations, as set forth in public agency policy, provides notice and an opportunity for representatives to be heard. This motion is based upon this Notice of Motion and Motion to Dismiss, the attached Memorandum of Points and Authorities, the concurrently filed Request for Judicial Notice, and all pleadings and papers on file in this case. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 7 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION PWDF’s SAC alleges that SSA failed to abide by Section 206(a)(3) of the Social Security Act (“the Act”), 42 U.S.C. § 406(a)(3), concerning the administrative review of the fee that a representative may collect under a fee agreement for successfully representing a claimant before the SSA. In particular, PWDF contends that the agency made fee determinations after the permissible time period for administrative review and did not provide notice and an opportunity to object pursuant to section 406(a)(3)(A). Plaintiff’s SAC alleges a cause of action for declaratory relief and a due process claim. There is no basis to award Plaintiff any of its requested relief. As a preliminary matter, under the doctrine of sovereign immunity, the United States has no liability for the payment of attorney’s fees absent express waiver. It is well established that 42 U.S.C. § 406 is not a waiver of sovereign immunity but rather contemplates payment of representative fees by the claimant, out of past-due benefits, rather than by the government. Although Plaintiff’s first cause of action is couched as a claim for declaratory relief, PWDF is demanding the payment of representative fees as a remedy. In its due process claim, Plaintiff similarly asserts its entitlement to the payment of fees by the SSA. Accordingly, the Court should dismiss this action, with prejudice, for lack of subject matter jurisdiction under the doctrine of sovereign immunity. Even assuming this Court has jurisdiction to hear Plaintiff’s case, the SAC fails to state a claim upon which relief can be granted. Plaintiff bases its claims on alleged violations of the administrative review procedures in 42 U.S.C. § 406(a)(3), which permit a claimant, representative, or adjudicator who decided the claim to request a modification of the maximum fee awarded under an approved fee agreement. Any such request must be made in writing within fifteen days of receiving notice of the award, and the claimant, representative, and adjudicator receive notice and an opportunity to submit information relevant to the request. 42 U.S.C. § 406(a)(3)(A). Plaintiff does not allege that any such request was made by the claimant, Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 8 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 representative, or adjudicator who decided the claims for any of the individuals identified in the SAC, and section 406(a)(3) is inapplicable. Instead, for most of the named claimants, Plaintiff alleges that SSA made partial payments of representative fees after PWDF attorneys represented the claimants before the agency. A representative may request a fee for successfully representing a claimant before the SSA. See 42 U.S.C. § 406. Under implementing regulations, only individuals may be appointed as representatives and, therefore, the regulations only provide for payment to individuals, not to entities like Plaintiff. See, e.g., 20 C.F.R. §§ 404.1703, 404.1705(a), 404.1720(a) 404.1730(a). Once SSA approves a fee, the representative may collect the fee from the claimant or the representative may receive his fee directly out of the benefits due to the claimant (“past-due benefits”), if the representative is eligible for SSA’s direct payment process. See 20 C.F.R. § 404.1720(b)(4). However, the direct payment of fees is optional and available only to representatives who have completed the necessary administrative steps. Where, as in this case, representatives have not complied with all requirements necessary for direct payment of fees, they must obtain their fees from the claimants. The regulations, policies, and procedures concerning the direct payment of fees are publicly available, belying Plaintiff’s boilerplate contentions about lack of notice. For a small number of claimants, Plaintiff takes issue with the agency’s decision to revise or rescind fee authorizations that SSA later determined were incorrect. The documents Plaintiff purports to rely upon, however, reveal that PWDF attorneys received notice of the agency’s actions and an opportunity to appeal or to obtain authorization of representative fees through the fee petition process. PWDF also does not have a protectable property interest in any specific amount of representative fees and the SSA’s processes for review of fee determinations, as set forth in public agency policy, provide representatives with notice and an opportunity to be heard. Plaintiff therefore fails to state a claim under any of its theories. The SAC does not state a due process claim because SSA provided PWDF representatives with all process due regarding the agency’s direct payment procedures and its fee determinations. Plaintiff has not alleged a Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 9 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 valid standalone claim as required to obtain declaratory relief because 42 U.S.C. § 406(a)(3) is inapplicable to Plaintiff’s claims and it has failed to state a due process claim. To the extent Plaintiff seeks a writ of mandamus, even though PWDF alleges only mandamus jurisdiction and not a standalone cause of action, any such claim fails for being based on the erroneous assumptions that the SSA is obligated to pay representative fees, that the administrative review procedures in 42 U.S.C. § 406(a)(3) are applicable to Plaintiff’s claims, and that Plaintiff has no other adequate remedies. SSA therefore respectfully requests that this Court dismiss the instant action for lack of subject matter jurisdiction or, alternatively, for failure to state a claim upon which relief can be granted. II. ISSUES TO BE DECIDED 1. Whether Plaintiff’s SAC must be dismissed because it has failed to identify any waiver of sovereign immunity such that it may bring this action against Defendant. 2. Whether Plaintiff’s SAC must be dismissed because PWDF has failed to establish any basis for this Court’s subject matter jurisdiction. 3. Whether Plaintiff’s SAC fails to state a claim on which relief can be granted. III. STATEMENT OF THE FACTS A. Background on Representative Fees and SSA’s Direct Payment Process. The Social Security Act and implementing regulations1 contemplate the payment of fees to appointed representatives who successfully represent claimants before the agency.2 Pursuant to Section 206(a) of the Act, if SSA makes a determination favorable to the claimant, the agency will “fix … a reasonable fee to compensate such attorney for the services performed by him in 1 Pursuant to the Act, the Commissioner of Social Security has full power and authority to make rules and regulations and to establish procedures that are necessary or appropriate to carry out the provisions of the Act. See 42 U.S.C. § 405(a). 2 A representative may be an attorney or a non-attorney, provided the individual has the necessary qualifications. 42 U.S.C. 406 (a)(1). Because Plaintiff’s allegations concern attorney representatives, this Motion focuses on the statutory provisions, regulations, and guidance applicable to attorneys representing claimants. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 10 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 connection with such claim.” 42 U.S.C. § 406(a)(1). The regulations further explain that SSA will pay the authorized fee in whole or in part “directly to the attorney . . . out of the [claimant’s] past-due benefits.” 20 C.F.R. § 404.1720(b)(4); see also 42 U.S.C. § 406(a)(4) (requiring agency to certify payment of the authorized fee “to such attorney” out of the claimant’s past-due benefits).3 Fees are only authorized to appointed representatives and, under SSA regulations, only an individual can be appointed as a representative. See 20 C.F.R. §§ 404.1703 (“Representative means an attorney who meets all of the requirements of § 404.1705(a) ….”), 404.1705(a) (a claimant may appoint as his representative “any attorney in good standing” who satisfies the requirements set forth in the regulation), 404.1720(a) (“A representative may charge and receive a fee” as provided in subpart (b) of the regulation). An appointed representative may request a fee for successful representation of a claimant either by filing a fee agreement before the agency decides the claim or by petitioning for a fee after the representation has ended. 42 U.S.C. § 406(a)(1)-(2); C.F.R. §§ 404.1720, 404.1725, 404.1730. The agency reviews the representative’s fee request and either authorizes a fee amount or advises the representative of any deficiencies or exceptions. See 42 U.S.C. § 406(a)(2)(A); 20 C.F.R. §§ 404.1720, 404.1725, 404.1730. If a fee agreement is approved, the fee specified in the agreement is the maximum fee that the representative may collect. 42 U.S.C. § 406(a)(2)(A). Where a fee agreement does not comport with the Act, agency regulations, or guidance, a representative may petition for a fee under 20 C.F.R. § 404.1725. See 42 U.S.C. § 406(a)(1). For fee petitions, the agency will fix a reasonable fee for the representative’s services in connection with the claim. 42 U.S.C. § 406(a)(1); 20 C.F.R. § 404.1726(b). The Act establishes an administrative review process for the fees awarded under fee agreements. See 42 U.S.C. § 406(a)(3). The agency’s review processes are set forth more fully in 3 The regulations governing representation of parties under Title II (Disability Insurance Benefits) of the Act are substantively identical to the provisions governing representation of parties under Title XVI (Supplemental Security Income). Compare 20 C.F.R. § 404.1700 et seq. with 20 C.F.R. § 416.1500 et seq. This brief will therefore cite only the relevant Title II provisions and incorporates by reference the counterpart provisions in Title XVI. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 11 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Hearing Appeals Litigation and Law Manual (“HALLEX”), a publicly available manual of agency policies and procedures.4 For example, a representative, claimant, or the adjudicator who decided the case may request modification of the maximum fee amount authorized under an approved fee agreement. 42 U.S.C. § 406(a)(3)(A); HALLEX I-1-2-44.5 Any such request must be made in writing within fifteen days of receiving notice of the award, and all parties are given notice of the request and an opportunity to submit relevant information. 42 U.S.C. § 406(a)(3)(A); HALLEX I-1-2-44. A Regional Chief Administrative Law Judge (“RCALJ”) may review the approval or disapproval of a fee agreement after providing the representative, claimant, and the adjudicator with notice of the review and an opportunity to submit relevant information. HALLEX I-1-2-43. The RCALJ may also review whether an ALJ incorrectly approved a fee agreement that does not comport with the Act, agency regulations, or guidance. HALLEX I-1-2-43; HALLEX I-1-2-49. If the RCALJ disapproves a fee agreement, a representative may petition for a fee under 20 C.F.R. § 404.1725. See HALLEX I-1-2-43; HALLEX I-1-2-49. The Act states that “[t]he decision of the administrative law judge or other person conducting the review shall not be subject to further review.” 42 U.S.C. § 406(a)(3)(C). Similarly, the regulations and HALLEX provide for review of the fee authorized under the fee petition process. 20 C.F.R. § 404.1720(d); HALLEX I-1-2-62. Claimants or representatives may request review in writing within thirty days of the date of the fee authorization notice, and all parties are given notice of the request and an opportunity to submit 4 All of the HALLEX provisions concerning representative fees, including administrative review procedures, are available at http://www.ssa.gov/OP_Home/hallex/I-01/I-1-2.html (last visited July 29, 2016). Agency policies set forth in the HALLEX and Program Operations Manual System (“POMS”) do not have the force of law but are persuasive authority. Warre v. Comm’r of Social Sec., 439 F. 3d 1001, 1005 (9th Cir. 2006) (citation omitted); Lockwood v. Comm’r of Social Sec., 616 F.3d 1068, 1073 (9th Cir. 2010). 5 Defendant incorporates by reference its Request for Judicial Notice (“RJN”) dated October 23, 2015 (ECF No. 20-1) and Supplemental RJN dated December 4, 2015 (ECF No. 24- 1) in connection with its Motion to Dismiss Plaintiff’s First Amended Complaint. This Court took judicial notice of the HALLEX and POMS provisions and the IRS Revenue Procedure attached thereto (ECF No. 29 at 4). HALLEX provisions that this Court has not already judicially noticed are attached as Exhibit A to the concurrently-filed RJN. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 12 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 relevant information. HALLEX I-1-2-62. The reviewing official’s “determination is not subject to further review.” 20 C.F.R. § 404.1720(d). Authorized fees may be paid out of claimants’ past-due benefits. See 42 U.S.C. § 406(a)(4); 20 C.F.R. §§ 404.1720, 404.1730. If there are past-due benefits, SSA provides a mechanism to facilitate the direct payment of fees to eligible appointed representatives, less mandatory assessments under 42 U.S.C. § 406(d). Representatives are not required to use the agency’s direct payment process and can obtain authorized fees directly from claimants. It should be emphasized that in either case, fees are paid by the claimants, not SSA. When SSA makes a direct payment of fees, the agency is simply taking the money from the claimant’s past- due benefits and providing it directly to the representative(s). See 42 U.S.C. § 406(a)(4). To utilize SSA’s direct payment service, a representative must comply with certain administrative steps set forth in the agency’s Program Operations Manual System (“POMS”), a publicly available manual of agency policies and procedures.6 In order to be eligible for the agency’s direct payment process, a representative must initially register with SSA by submitting a Form SSA-1699 (Registration for Appointed Representative Services and Direct Payment). POMS GN 03920.017.B.3. This is a one-time registration, unless future updates are needed. A claimant appoints an individual to represent him before the agency by submitting a Form SSA- 1696 (Appointment of Representative) or an equivalent writing. POMS GN 03910.040. The appointed representative must also submit a Form SSA-1695 (Identifying Information for Possible Direct Payment of Authorized Fees) for each case on which he wishes to receive direct payment of the authorized fee. POMS GN 03920.017.B.3. A representative must register with the agency and submit a Form SSA-1695 prior to the date that the SSA issues a favorable decision on a claimant’s application in order to receive direct payment of fees. Id. 6 Resources and guidance for appointed representatives are available on the agencies website: http://www.ssa.gov/representation (last visited July 29, 2016). POMS provisions concerning representation and representative fees are available at https://secure.ssa.gov/apps10/poms.nsf/subchapterlist!openview&restricttocategory=02039 (last visited July 29, 2016). See also footnote 5 (incorporating by reference Defendant’s prior RJN submissions, including the POMS provisions therein). Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 13 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 When multiple representatives (i.e. co-representatives) are appointed to represent a single claimant, each representative must be registered with the agency and submit a Form SSA-1695 for that claimant in order to receive direct payment of fees, even when all co-representatives are members of the same firm or organization. POMS GN 03920.017.B.3. Where a claimant appoints multiple representatives, SSA will allocate an equal share of the total authorized fees to each appointed co-representative on the fee agreement. POMS GN 03940.009.A. If an appointed co-representative on the fee agreement is ineligible for direct payment of fees, such as if he has not complied with the procedures described above, the agency will release his portion of the authorized fees to the claimant and the representative must collect his portion of the fee directly from the claimant. POMS GN 03940.009.B; POMS GN 03920.050 (“SSA will certify direct payment of the share of the authorized fee . . . only to the representative who is eligible for direct payment. SSA will release the balance of the withheld funds to the claimant. Payment of the fee of the representative who is not eligible for direct payment is a matter between the claimant and that representative.”). SSA encourages entities that employ representatives to register with the agency by completing a Form SSA-1694 (Request for Business Entity Taxpayer Information). POMS GN 03910.042.A.3. Then, a representative can indicate his affiliation with the entity by providing its Employer Identification Number (EIN) on the representative’s Form SSA-1699 and Form SSA- 1695. As required under Internal Revenue Service (IRS) regulations, SSA sends an IRS Form 1099-MISC each year to representatives who received direct payment of at least $600 during the calendar year. POMS GN 03920.017.C.1.c; POMS GN 03910.42.A.1. If a representative has indicated an affiliation with an entity in his Forms SSA-1699 and SSA-1695, and that entity has registered with the agency via a Form SSA-1694, the agency will send both the representative and the entity an IRS Form 1099-MISC. POMS GN 03920.017.C.1.d; POMS GN 03910.042.A.3. The agency established this procedure in recognition that some representatives do not personally keep the authorized fees but rather turn them over to their employers. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 14 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Plaintiff’s Factual Allegations7 Plaintiff alleges it is a public, charitable organization that satisfies the requirements for tax exemption under 26 U.S.C. § 501(c)(3). SAC ¶ 17. Plaintiff asserts the agency is seeking to “reduce the Social Security roles” through SSA’s fee payment processes, which allegedly delay the payment of fees. SAC ¶¶ 19-20. Plaintiff alleges that PWDF attorneys successfully represented claimants Dedmon, Donner, Eglip, Golitsyn, Gorton, Ness, Ramirez, Williams, McShane and Velasco before the SSA, and that representative fees were awarded but allegedly not paid. SAC ¶ 22. For claimant Dedmon, Plaintiff alleges it received a portion of the fees awarded for representation by PWDF attorneys. SAC ¶¶ 23-25. Plaintiff states an administrative law judge (“ALJ”) issued a fully favorable decision on May 30, 2014 and approved the claimant’s fee agreement. SAC ¶ 23. An SSA representative allegedly advised PWDF that the full authorized fee could not be paid directly, noting that the claimant’s representatives were not all associated with the claimant’s case or registered with the agency for payment. Id. On June 26, 2014, PWDF attorneys Ms. Harrell and Ms. Yarnykh submitted Forms SSA-1695 to register with the agency. SAC ¶ 24. Plaintiff alleges it was awarded $1,1715.25 under its fee agreement but received a partial payment of $527.25 and is still owed $1,188.00. SAC ¶ 25. Plaintiff similarly alleges it received partial fees in connection with representation of claimant Donner by PWDF attorney Mr. Bruce and an unnamed former PWDF staff attorney. SAC ¶¶ 26-27. Plaintiff alleges an ALJ issued a fully favorable decision and approved the claimant’s fee agreement on August 1, 2012, authorizing $6,000 in fees. SAC ¶ 26. Plaintiff claims the agency paid $3,000 in fees and advised that the balance of the fees must be paid to the former staff attorney individually and requested her social security number. Id. Plaintiff does not 7 To the extent Plaintiff’s SAC asserts legal conclusions or purports to summarize case law or provisions of the United States Code, Omnibus Reconciliation Act, the Act, implementing regulations, IRS Revenue Procedures, or “National Organization of Social Security Claimants’ Representatives” newsletters (SAC ¶¶ 2-16, 19-21, 40), such allegations are not well-pleaded factual allegations and this Court need not accept such assertions as true. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2009). Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 15 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 allege that it provided the information the agency requested to pay the remaining $3,000 in fees. See SAC ¶¶ 26-27. Plaintiff claims that it is owed $3,000 in fees. SAC ¶ 27. Plaintiff also claims it received partial fees in connection with representation of claimant Eglip by PWDF attorneys. SAC ¶ 28-31. Plaintiff alleges that on December 31, 2014, an ALJ approved the claimant’s fee agreement – which had been signed by Mr. Bruce, Ms. Yarnykh, and Ms. Harrell – and authorized $6,000 in fees. SAC ¶ 28. Plaintiff alleges it received $1,909 in fees in April 2015, but the agency advised PWDF that fees for Ms. Harrell’s representation must be paid to her individually or she had to waive her fees since she was no longer with PWDF. SAC ¶ 29. Plaintiff responded that Ms. Yarnykh and Ms. Harrell were never the claimant’s representatives, even though they signed the claimant’s fee agreement. SAC ¶¶ 28, 30. In June 2015, the agency allegedly informed Plaintiff that it had certified for payment fees totaling $4,000 for Mr. Bruce and Ms. Yarnykh, and the remaining $2,000 would be released to the claimant. SAC ¶ 31. Plaintiff asserts that it requested reconsideration of the agency’s determination but does not allege whether or how the agency responded. Id. Plaintiff claims it is owed $4,091 in fees. Id. Plaintiff also alleges it received a portion of the authorized fees in connection with representation of claimant Golitsyn by unidentified PWDF attorneys. SAC ¶¶ 32-37. Plaintiff alleges that an ALJ signed an order authorizing $3,309.50 in fees on April 8, 2014; Plaintiff does not allege that the ALJ approved a fee agreement. SAC ¶ 32. Plaintiff states the claimant did not respond to its requests for payment of the fees. Id. Plaintiff also states that it requested the fees from an SSA district office manager, who allegedly responded that the agency was not authorized to withhold the requested fees or pay the fees to Plaintiff. SAC ¶¶ 33-36. Plaintiff received fees totaling $295.03 in May 2015. SAC ¶ 37. A year and four months after the ALJ authorized the fees, Plaintiff allegedly received an amended authorization for $314.87 in fees. Id. Plaintiff alleges it is owed $3,014.47 in fees. Id. However, in an August 2015 Amended Authorization to Charge and Collect Fee, which was issued a year and four months after the ALJ’s initial fee authorization as alleged (SAC ¶ 37), SSA explained that the fee was being Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 16 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 revised to 25% of the claimant’s past due benefits, less the mandatory processing fee under 42 U.S.C. § 406(d), and stated the determination could be appealed if the representative or the claimant disagreed with the fee. A true and correct copy of the August 12, 2015 letter is attached to the concurrently filed RJN as Exhibit B. Plaintiff does not allege that it appealed the amended authorization. For claimant Gorton, Plaintiff alleges that on October 8, 2014, an ALJ approved the fee agreement signed by Mr. Bruce, Ms. Yarnykh, and a former staff attorney, and authorized $1,589.50 in fees. SAC ¶ 38. On January 6, 2015, an agency representative allegedly told PWDF that the agreement had been approved in error because all appointed representatives did not sign the fee agreement. SAC ¶ 39. A PWDF staff attorney allegedly responded by telling the agency that it must pay fees to Plaintiff, not individual attorneys. SAC ¶ 40. Plaintiff alleges the agency withheld $2,485.25 for representative fees from the claimant’s past-due benefits, after increasing the amount of benefits due to the claimant. Id. Plaintiff alleges that on May 4, 2015, the Acting Assistant Regional Chief ALJ issued a notice rescinding approval of the fee agreement. SAC ¶ 41. The agency’s May 4, 2015 notice also explained why the fee agreement was disproved and instructed the representative to file a fee petition if he wished to collect a fee for representing the claimant. A true and correct copy of the May 4, 2015 letter is attached to the concurrently filed RJN as Exhibit C. Plaintiff claims it has not received $2,485.25 in fees. Id. Notably, SSA records reflect that Plaintiff submitted a fee petition and received authorization in November 2015 to collect the full fee amount requested, $4,632.50. RJN Ex. D. The notice instructed Plaintiff to look to the claimant for fees, and gave him an opportunity to appeal if he objected to the fee award. Id. Plaintiff does not allege that it appealed the authorization. For claimant Ness, Plaintiff alleges it received partial fees for representation by PWDF attorneys. SAC ¶¶ 43-44. Plaintiff claims the ALJ issued a fully favorable decision and approved the claimant’s fee agreement on November 10, 2013, authorizing $6,000 in fees. SAC ¶ 43. Plaintiff alleges it received $2,955.50 in fees and demanded the agency pay the balance of the Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 17 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fees into PWDF’s operating bank account, not to individual attorneys. SAC ¶ 44. Plaintiff alleges it is owed $3,044.50 in fees. Id. Plaintiff similarly claims it received partial fees for representation of claimant Ramirez. SAC ¶¶ 45-48. Plaintiff alleges that on May 2, 2013, an ALJ issued a fully favorable decision; an ALJ later approved the claimant’s fee agreement – which had been signed by Mr. Bruce and two unidentified PWDF staff attorneys – and authorized $2,993.75 in fees. SAC ¶¶ 46, 48. The agency reportedly advised Plaintiff that authorized fees must be paid to each individual representative who is eligible for direct payment unless the representative waives his fee. SAC ¶ 47. According to Plaintiff, SSA further explained that only Mr. Bruce was eligible for direct payment of fees and, since the other two attorneys had not waived their fees, the agency would directly pay Mr. Bruce’s portion of the authorized fees. Id. A PWDF representative allegedly told SSA that the PWDF attorneys could not waive fees because they had no right to the fees. SAC ¶ 46. Plaintiff alleges it received $1,148.35 in fees but is still owed $2,993.75. SAC ¶ 48. Plaintiff alleges that it has not received fees for representation of claimant Williams by unidentified PWDF attorneys. SAC ¶¶ 49-54. Plaintiff alleges that an ALJ issued a fully favorable decision on September 19, 2013 and authorized $3,727.50 in fees on June 9, 2014. SAC ¶¶ 49-50. Plaintiff does not allege that the ALJ approved a fee agreement. Id. Plaintiff alleges that it requested payment of the fees from the claimant, an SSA district office, and the agency’s Regional Commissioner. SAC ¶¶ 51-53. Plaintiff also states that it contacted an agency employee regarding Plaintiff’s interpretation of POMS GN 3920.055.8 SAC ¶ 54. Plaintiff claims it is owed $3,727.50 in fees. Id. However, the June 9, 2014 authorization specifically advised that the representative must look to the claimant for payment of the authorized fee and explained that the determination could be appealed if he or the claimant disagreed with the fee. A 8 POMS GN 03920.055 (Failure to Withhold Past-due Benefits for Direct Payment to a Representative) sets forth the agency’s procedures when it fails to pay an authorized fee to an eligible representative due to SSA administrative oversight, such as if the agency did not withhold past-due benefits or inadvertently released withheld past-due benefits to the claimant. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 18 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 true and correct copy of the June 9, 2014 letter is attached to the concurrently filed RJN as Exhibit E. Plaintiff alleges that it has not received fees for representation of claimant McShane by unidentified PWDF attorneys. SAC ¶¶ 55-60. Plaintiff alleges that an ALJ issued a fully favorable decision on August 3, 2013 and approved the claimant’s fee agreement. SAC ¶ 55. After the authorized fees were allegedly paid to the wrong representative, Plaintiff submitted a fee petition seeking $6,000, which was approved. SAC ¶¶ 57-58. The agency advised Plaintiff that the payment was still being processed. SAC ¶¶ 58-60.9 Plaintiff also alleges that it has not received fees for representation of claimant Velasco by unidentified PWDF attorneys. SAC ¶¶ 61-63. Plaintiff alleges that an ALJ issued a fully favorable decision on February 26, 2015, but did not approve the fee agreement because it was deficient. SAC ¶ 61. Plaintiff reportedly submitted a fee petition on March 4, 2016 and has not received a notice of approval. SAC ¶ 62. IV. ARGUMENT A. Legal Standards for a Motion to Dismiss. 1. Rule 12(b)(1) Lack of Subject Matter Jurisdiction. Dismissal is appropriate under Rule 12(b)(1) of the Federal Rules of Civil Procedure if a court lacks subject matter jurisdiction over a plaintiff’s claims. Fed. R. Civ. P. 12(b)(1). It is well settled that a court lacks subject matter jurisdiction in any case where an agency of the United States has been sued, unless the plaintiff shows that the United States unequivocally waived sovereign immunity and has consented to be sued. Holloman v. Watt, 708 F.2d, 1399, 1401 (9th Cir. 1983). When considering a Rule 12(b)(1) motion, the court is not restricted to the face of the pleadings but may review evidence as necessary to resolve factual disputes concerning the existence of jurisdiction. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988). “Once 9 Plaintiff submitted a fee petition on March 12, 2014, which the ALJ approved on May 5, 2015. RJN Exs. F, G. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 19 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 challenged, the party asserting subject matter jurisdiction has the burden of proving its existence.” Rattlesnake Coal. v. E.P.A., 509 F.3d 1095, 1102 n.1 (9th Cir. 2007). 2. Rule 12(b)(6) Failure to State a Claim. Dismissal is also appropriate under Rule 12(b)(6) when a plaintiff's complaint fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. A plaintiff must therefore allege facts demonstrating “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Further, a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. The court accepts as true a plaintiff’s well-pleaded factual allegations, and construes all factual inferences in the light most favorable to the plaintiff. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). However, the court is not required to accept unreasonable inferences or assume the truth of legal conclusions cast in the form of factual allegations. Twombly, 550 U.S. at 553-556. On a motion to dismiss, a “court may look beyond the plaintiff’s complaint to matters of public record” without converting the Rule 12(b)(6) motion into one for summary judgment. Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir. 1995). A court may consider undisputed facts subject to judicial notice, including matters of public record, and materials not attached to the complaint “if the documents’ ‘authenticity . . . is not contested’ and ‘the plaintiff’s complaint necessarily relies’ on them.” Lee v. City of Los Angeles, 350 F.3d 668, 688 (9th Cir. 2001) (citation omitted). The court may examine such materials without converting the motion into one for summary judgment. Id.; see also Interstate Nat. Gas. Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir. 1953) (“We may take judicial notice of records and reports of administrative bodies.”); Gustavson v. Wrigley Sales Co., No. 12-cv-01861-LHK, 2014 WL 60197, at *3 n.2 (N.D. Cal. Jan. 7, 2014 (on motion to dismiss, court may take judicial notice of documents Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 20 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 available through government agency website); Hansen Beverage Co. v. Innovation Ventures, LLC, No. 08-1166, 2009 WL 6597891, at *2 (S.D. Cal. Dec. 23, 2009) (same). B. The Court Lacks Subject Matter Jurisdiction Over Plaintiff’s Claims. 1. The Doctrine of Sovereign Immunity Bars Plaintiff’s Suit to Recover Representative Fees from SSA. This Court lacks subject matter jurisdiction over Plaintiff’s suit because its claims are barred by the doctrine of sovereign immunity. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988) (“[W]hether the United States has waived its sovereign immunity against suits for damages is, in the first instance, a question of subject matter jurisdiction.”). Sovereign immunity shields the federal government and its agencies from suit absent consent. Dep’t of Army v. Blue Fox., Inc., 525 U.S. 255, 260 (1999); Dunn & Black, P.S., v. United States, 492 F.3d 1084, 1088 (9th Cir. 2007). Congress can waive sovereign immunity, but any such waiver must be expressed unequivocally and cannot be implied. United States v. Nordic Vill., Inc., 503 U.S. 30, 33 (1992). The United States has no liability for the payment of attorneys’ fees absent the express waiver of sovereign immunity. Ruckelshaus v. Sierra Club, 463 U.S. 680, 685 (1983); Hardisty v. Astrue, 592 F.3d 1072, 1077 (9th Cir. 2010) (rejecting plaintiff’s claim for attorney fees in Social Security case). As many courts have concluded, the Social Security Act’s fee provisions do not waive the agency’s sovereign immunity with respect to claims by attorneys to obtain fees from the SSA. See, e.g., Binder & Binder v. Colvin, 818 F.3d 66, 70-72 (2nd Cir. 2016); Binder & Binder P.C. v. Handel (In re Handel), 570 F.3d 140, 144 (3rd Cir. 2009); Pittman v. Sullivan, 911 F.2d 42, 46 (8th Cir. 1990); Montanez v. Shalala, No. C 99-2602 SI, 2000 WL 424191, at *4 (N.D. Cal. Apr. 10, 2000). For example, in In re Handel, a law firm sued to recover attorneys’ fees from SSA that the agency had authorized but failed to withhold from a claimant’s past due benefits; the firm was unable to collect the fees directly from the claimant because she had filed for bankruptcy. 570 F.3d at 142-43. The Third Circuit held the firm had “no direct recourse against the Commissioner of Social Security for the unpaid amount” of fees. 570 F.3d at 144. In so holding, the court rejected the firm’s assertion that the SSA was “statutorily mandated” to pay the awarded fees. Id. As the court explained, the fee provisions in 42 U.S.C. § 406 “were Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 21 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 developed, in large measure, to eliminate conflicts over fees between claimants and counsel by creating a statutory mechanism for payment as well as a statutory cap on fees.” Id. While the federal government “oversees and regulates the private obligation of the claimant to her counsel” under 42 U.S.C. § 406, the statute “does not create a federal promise to pay counsel independently of the private obligation” and, therefore, “does not represent a waiver of sovereign immunity vis-à-vis attorney’s fees.” Id. at 144-45. Similarly, in Pittman, the Eighth Circuit concluded that a district court lacked authority to order the Department of Health and Human Services (“HHS”), to pay authorized attorneys’ fees to counsel. 911 F.2d at 46.10 Noting that fee awards are not judicially reviewable, the Eighth Circuit found that the district court had “no authority to force the Secretary [of HHS] to comply with an award the court did not issue.” Id. (citation omitted). Further, the Eight Circuit concluded that 42 U.S.C. § 406 “cannot be construed as a waiver of [sovereign] immunity because it contemplates payment of the fee award by the claimant, out of past-due benefits, rather than by the government, out of general funds.” Id. (emphasis in original, internal citation omitted). In Montanez, Plaintiff sought enforcement of an ALJ’s findings concerning her disability benefits and attorney’s fees for representation in SSA administrative proceedings. Regarding the fees, Plaintiff alleged that although her attorney had already been paid $4,000 at the administrative level, the SSA owed the attorney the balance of $2,086.58, computed as 25% of plaintiff’s total recovery minus the $4,000 that he had already received. Judge Illston held that this Court had no subject matter jurisdiction over this matter: “‘[t]he court has no authority to award an attorney’s fee for representation of a claimant before the Secretary, that power being granted by 42 U.S.C. § 406(a) to the Secretary alone.’” Montanez, 2000 WL 424191, at *4 (quoting MacDonald v. Weinberger, 512 F .2d 144, 146 (9th Cir.1975) (internal footnote and citations omitted)). Here, as in Montanez, Plaintiff’s claim for attorney’s fees must be dismissed for lack of subject matter jurisdiction.11 10 At the time that Pittman was decided, HHS administered the disability insurance benefits program. 11 Other courts have also found that sovereign immunity barred attempts to compel the SSA to pay attorney fees. Binder & Binder, P.C. v. Colvin, 55 F. Supp. 3d 439, 443-46 Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 22 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff’s claims for relief – however labeled – all reduce to the same issue: Plaintiff is demanding that the agency pay attorneys’ fees. Through its claim for declaratory relief, Plaintiff complains that “Defendant has not fully paid Plaintiff attorney’s fees to which it is entitled ....,” demands the fees be “paid in full,” and seeks an injunction to compel the same. SAC ¶¶ 65, 68. Plaintiff purports to allege procedural due process violations but its claim reduces to a demand for an award of attorneys’ fees. Id. ¶ 70 (asserting PWDF is “entitled to the specific amount [of fees] designated by contract”). Plaintiff cannot show that its suit to obtain fees falls within an unequivocally expressed waiver of sovereign immunity by Congress and, therefore, it must be dismissed with prejudice. Dunn & Black, P.S., 492 F.3d at 1088. 2. Plaintiff Has Not Alleged a Colorable Due Process Claim as Required for Federal Question Jurisdiction. To invoke jurisdiction under 28 U.S.C. § 1331, a plaintiff must plead a colorable claim “arising under” the Constitution or laws of the United States. Arbaugh v. Y & H Corp., 546 U.S. 500, 513 (2006). Here, Plaintiff claims subject matter jurisdiction is proper because it is challenging the agency’s alleged failure to comply with 42 U.S.C. § 406(a). SAC ¶¶ 8-11. The SAC, however, does not allege facts showing that section 406(a)(3) is applicable to Plaintiff’s claims. The review procedures set forth in section 406(a)(3)(A) only apply when a claimant, representative, or adjudicator who decided the claim requests a modification of the maximum fee awarded under a fee agreement. Plaintiff does not allege that any such request was made here and its invocation of 42 U.S.C. § 406(a)(3) does not provide a colorable basis for federal question jurisdiction. Arbaugh v. Y & H Corp., 546 U.S. at 513 n.10 (claim is not colorable “if it is ‘immaterial and made solely for the purpose of obtaining jurisdiction’”). (E.D.N.Y. 2014) (“Nothing in [42 U.S.C. § 406] unambiguously states that the SSA is directly obligated to pay attorneys’ fees, or that the failure to withhold attorneys’ fees from the claimant opens the SSA to a claim for money damages.”), aff’d, Binder & Binder, 818 F.3d at 70-72; Binder & Binder, P.C. v. Colvin, No. 13 CV 432 (DRH), 2014 WL 6632713, at *3-6 (E.D.N.Y. Nov. 21, 2014) (concluding that Section § 406 “lacks an unequivocally expressed waiver of sovereign immunity, and, consequently, . . . Plaintiff’s action for money damages against the SSA is barred”). Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 23 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. Plaintiff Cannot Establish Jurisdiction Under the Administrative Procedure Act. Plaintiff also errs in asserting jurisdiction is proper under the Administrative Procedure Act (“APA”). SAC ¶¶ 12-14. The APA does not confer jurisdiction on federal courts to review agency actions and, further, Plaintiff has not made any claims under the APA. Califano v. Sanders, 430 U.S. 99, 105 (1977) (“T]he better view is that the APA is not to be interpreted as an implied grant of subject-matter jurisdiction to review agency actions.”). Moreover, Plaintiff has failed to allege a nondiscretionary duty to act by the SSA. Plaintiff’s citation to the Omnibus Budget Reconciliation Act of 1990 and 42 U.S.C. § 406(a)(2) does not address the basic issue, as this Court identified previously (ECF No. 29 at 9:4-12), that nothing in the Social Security Act requires a federal agency to take discrete and specific action as to how the agency pays representative fees.12 Norton v. S. Utah Wilderness Alliance, 542 U.S. 55, 64 (2004) (APA “empowers a court only to compel an agency ‘to perform a ministerial or non-discretionary act,’ or ‘to take action upon a matter, without directing how it shall act.’”). As discussed above, supra Section III(A), representatives may obtain fees pursuant to a fee agreement or a fee petition, and such fees may be obtained through the agency’s direct payment process or from the claimant. Plaintiff also relies on 42 U.S.C. § 406(a)(3) as a basis for jurisdiction under the APA, but such reliance is misplaced because Plaintiff has not alleged that a claimant, representative, or adjudicator requested review of the maximum fee awarded under an approved fee agreement. Because the statute is inapplicable here, section 406(a)(3) did not impose a nondiscretionary duty to act on the agency, as required to invoke the APA. Norton, 542 U.S. at 64 (a claim under the APA “can only proceed where a plaintiff asserts that an agency failed to take a discrete agency action that it is required to take”) (emphasis added). 12 Plaintiff’s assertions that the SSA’s fee payment procedures amount to a “scheme” to discourage attorney representation, its lengthy quotation of Congressional hearing testimony, and its citation to a National Organization of Social Security Claimants’ Representatives newsletter similarly do not establish that this Court has jurisdiction or that Plaintiff has stated a claim under any of its theories. Such allegations do not constitute well-pleaded factual allegations, and this Court need not accept such assertions as true. See Twombly, 550 U.S. at 555. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 24 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. Plaintiff Cannot Establish Jurisdiction Under the Mandamus Statute. To support mandamus jurisdiction, Plaintiff contends the agency did not comply with 42 U.S.C. § 406(a)(3), but Plaintiff has not alleged a mandamus cause of action. SAC ¶ 15. Moreover, Plaintiff’s mandamus allegations do not satisfy the specific requirements necessary to obtain the “drastic” remedy of mandamus. Kildare v. Saena, 325 F.3d 1078, 1085 (9th Cir. 2003). Under the mandamus statute, a court has jurisdiction “to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” 28 U.S.C. § 1361. “Mandamus is an extraordinary remedy and is available to compel a federal official to perform a duty only if: (1) the individual’s claim is clear and certain; (2) the official’s duty is nondiscretionary, ministerial, and so plainly prescribed as to be free from doubt, and (3) no other adequate remedy is available.” Kildare, 325 F.3d at 1085; see also Heckler v. Ringer, 466 U.S. 602, 616 (1989) (“The common-law writ of mandamus, as codified in 28 U.S.C. § 1361, is intended to provide a remedy for a plaintiff only if he has exhausted all other avenues of relief and only if the defendant owes him a clear nondiscretionary duty.”). Since section 406(a)(3) does not apply to Plaintiff’s allegations, as discussed above, PWDF does not have a “clear and certain” claim under that statute, Kildare, 325 F.3d at 1085, and the SSA did not have a “clear nondiscretionary duty” to act, Heckler, 466 U.S. at 616. Moreover, the Mandamus Act’s grant of jurisdiction over mandamus actions does not constitute a waiver of sovereign immunity. Pit River Home & Agric. Co-op Assoc. v. United States, 30 F.3d 1088, 1098 n.5 (9th Cir. 1994). Finally, SSA did not have a nondiscretionary, ministerial, “plainly prescribed” duty to pay fees directly to either Plaintiff or PWDF attorneys, and Plaintiff had other adequate means of obtaining attorney fees. Kildare, 325 F.3d at 1085. As discussed above, PWDF attorneys can obtain authorized fees directly from claimants and do not have to use the agency’s direct payment process. To the extent Plaintiff believes the agency is somehow responsible for paying representative fees when claimants refuse to pay them, such a theory is barred by the doctrine of sovereign immunity as discussed above, supra Section IV(B)(1). Additionally, if a fee agreement Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 25 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 does not comport with agency requirements, a representative may nonetheless petition for a fee under 20 C.F.R. § 404.1725. 42 U.S.C. § 406(a)(1). Plaintiff does not allege that this alternative means of obtaining fees was unavailable or inadequate. See Power v. Barnhart, 292 F.3d 781, 786-88 (D.C. Cir. 2002) (denying petition for writ of mandamus because, although fee agreement was disproved, representative had “an alternative, adequate remedy available to vindicate [attorney’s] statutory interests in this case: the fee petition”). Plaintiff’s conclusory assertions that it “has exhausted all available administrative remedies” and the “Commissioner violated a ‘clear nondiscretionary duty’” (SAC ¶ 15, citations omitted) are therefore in error, and mandamus is unwarranted.13 See id.; Cohn Law Firm v. Astrue, 968 F. Supp. 2d 884, 895-96 (W.D. Tenn. 2013) (where plaintiff failed to take all appropriate steps to receive attorneys’ fees directly from SSA, agency had no duty to pays fees to plaintiff and mandamus relief was unwarranted). C. Plaintiff Fails to State a Claim for Relief Under the Theories Alleged Even assuming the Court has jurisdiction to hear this case, Plaintiff’s causes of action for “declaratory relief” and procedural due process violations must be dismissed for failure to state a claim. SAC ¶¶ 64-71. 1. Plaintiff Cannot Pursue a Separate Cause of Action for Declaratory Relief. Plaintiff’s first cause of action purports to allege a standalone claim for “declaratory relief.” SAC ¶¶ 65-68. Declaratory relief is not a cause of action but rather a form of equitable relief that must be premised on a separate, standalone cause of action. See 28 U.S.C. §§ 2201, 2202; Fiedler v. Clark, 714 F.2d 77, 79 (9th Cir. 1983) (“The Declaratory Judgment Act does not 13 The Declaratory Judgement Act (“DJA”) does not give this Court jurisdiction over this action. The DJA “is not an independent source of federal jurisdiction.” Schilling v. Rogers, 363 U.S. 666, 677 (1960); Countrywide Home Loans, Inc. v. Mortg. Guar. Ins. Corp., 642 F.3d 849, 853 (9th Cir. 2011) (“while the DJA expanded the scope of the federal courts’ remedial powers, it did nothing to alter the courts’ jurisdiction”). Furthermore, it is well established that the DJA does not constitute the United States’ consent to be sued and it cannot be construed as a waiver of sovereign immunity. Brownell v. Ketcham Wire & Mfg. Co., 211 F. 2d 121, 128 (9th Cir. 1954). Because Plaintiff has failed to establish jurisdiction, it has no basis on which to pursue the remedy of declaratory relief. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 26 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provide an independent jurisdictional basis for suits in federal court.... It only permits the district court to adopt a specific remedy when jurisdiction exists.”) (citing Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671–74 (1950)); see also Mayen v. Bank of Am. N.A., No. 14-CV- 03757-JST, 2015 WL 179541, at *5 (N.D. Cal. Jan. 14, 2015). As an initial matter, this cause of action is fundamentally flawed because it assumes that PWDF is entitled to receive fees as an entity. See SAC ¶¶ 65, 68. The agency, however, pays fees out of past due benefits to eligible representatives for services they provide on claims to which they have been appointed, not to entities like Plaintiff. See, e.g., 20 C.F.R. §§ 404.1703, 404.1705(a), 404.1720(a), 404.1730(a). Moreover, Plaintiff appears to be demanding declaratory relief based on alleged violations of the administrative review procedures in 42 U.S.C. § 406(a)(3). SAC ¶¶ 66-67. Section 406(a)(3) permits a claimant, a representative, or the adjudicator who decided the claim to request a modification of the maximum fee awarded under an approved fee agreement. 42 U.S.C. § 406(a)(3)(A). Any such request must be made in writing within fifteen days of receiving notice of the award, and the claimant, representative, and adjudicator receive notice and an opportunity to submit information relevant to the request. Id. Plaintiff does not allege any such request for review was made by the claimant, representative, or adjudicator who issued a favorable decision for any of the claimants in the SAC. Instead, Plaintiff alleges it received partial fees for claimants Dedmon, Donner, Eglip, Ness, Ramirez and Williams, and it is demanding that the agency pay additional fees to PWDF. See SAC ¶¶ 23-31, 43-54. However, to be eligible for direct payment, representatives must comply with certain administrative steps. See POMS GN 03920.017.B.3. Plaintiff’s allegations demonstrate that PWDF attorneys did not comply with the publicly-available policies and procedures for direct payment of fees, see supra Section III(A), but they could still collect authorized fees directly from the claimants.14 The administrative review procedures in section 14 For example, Plaintiff’s allegations show that certain representatives had left PWDF without waiving their portion of the fees, had not provided their social security numbers to the Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 27 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 406(a)(3) are inapplicable to Plaintiff’s complaints that the SSA did not directly pay all fees, particularly where the fee amount was not contested, the representatives could still obtain fees from the claimants, and Plaintiff is improperly demanding that fees be paid to it as an entity. For claimants Golitsyn and Gorton, Plaintiff’s reliance on section 406(a)(3) is similarly misplaced because its allegations show that the agency revised or rescinded fee authorizations that the SSA later determined were incorrect, not that a claimant, representative or adjudicator who decided the claim requested review of the fee awarded under an approved fee agreement. See SAC 37, 41. For claimants McShane and Velasco, Plaintiff alleges only that payment of representative fees is in process, id. ¶¶ 58-60, or pending approval, id. ¶ 62, not that administrative review was requested pursuant to 42 U.S.C. § 406(a)(3). Based on the facts as alleged, the administrative review procedures set forth in section 406(a)(3) are simply inapplicable and cannot support a cause of action for declaratory relief. Plaintiff therefore fails to state a claim for violation of section 406(a)(3), and its cause of action for due process violations similarly fails as discussed infra at Section IV(C)(2). Accordingly, Defendant respectfully requests that this Court dismiss Plaintiff’s purported cause of action for declaratory relief, with prejudice. 2. Plaintiff Has Failed to Allege a Cognizable Due Process Claim. “A due process claim is cognizable only if there is a recognized liberty or property interest at stake.” Erikson v. United States, 67 F.3d 858, 862 (1995) (citation omitted). To have a protectable interest, a person must have “legitimate claim of entitlement to it.” Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). A benefit is not a protected entitlement if “government officials may grant or deny it in their discretion.” Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005). agency, or had not completed documentation necessary for direct payment, demonstrating that those PWDF attorneys were not in fact eligible for direct payment. See SAC ¶¶ 23-31, 43-54. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 28 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff’s claim that the agency violated its procedural due process rights is flawed for several reasons. SAC ¶ 69-71. First, PWDF as an entity does not have a protectable property interest in receiving attorneys’ fees because only representatives may receive fees, and only individuals may be appointed as representatives. See, e.g., 20 C.F.R. §§ 404.1703, 404.1705(a), 404.1720(a), 404.1730(a). Plaintiff’s due process claim should therefore be dismissed because PWDF does not have a cognizable interest in receiving any specific amount of representative fees. Second, even if Plaintiff could receive fees, it does not have a legitimate claim of entitlement to any specific amount of fees since the agency has “broad discretion in the fee fixing area.” Weisbrod v. Sullivan, 875 F.2d 526 (5th Cir. 1989); see Town of Castle Rock, 545 U.S. at 756. Congress gave the agency authority to set “reasonable” fees. 42 U.S.C. § 406(a). Generally, representatives cannot charge or receive fees without the agency’s approval and are not guaranteed a specific amount of fees for the services they provide. 42 U.S.C. § 406(a)(1)-(4); 20 C.F.R. §§ 404.1720 et seq. The implementing regulations further provide that the agency “decide[s] the amount of the fee, if any, a representative may charge or receive.” 20 C.F.R. § 404.1720(b)(2). See Moyer v. Dir., Office of Worker’s Comp. Programs, 124 F.3d 1378, 1379- 80 (10th Cir. 1997) (“[A]n attorney who must seek regulatory approval of the reasonableness of his fee has a property interest only in a reasonable fee, not in the amount specified in a fee contract.”) (citation omitted). Additionally, while 42 U.S.C. § 406(a)(2) provides for approval of fee agreements, the agreements must meet certain conditions and the fee amounts awarded under such agreements can be appealed. 42 U.S.C. §§ 406(a)(2)(A), (a)(3)(A). Plaintiff is therefore not “automatically” entitled to any specific amount of fees, as it claims.15 SAC ¶ 70. 15 Plaintiff’s reliance on Buchanan v. Apfel, 249 F.3d 485, 491-92 (6th Cir. 2001), SAC ¶ 70, is misplaced because the Sixth Circuit declined to reach the issue of whether an attorney had a property interest in representative fees. Instead, the court found the SSA’s fee award procedures were constitutionally sufficient and the attorney’s allegations failed to state a due process claim. Id. Plaintiff’s citation to Mathews v. Eldridge, 424 U.S. 319, 333 (1976), SAC ¶ 70, is even more inapposite because that case concerned a claimant’s due process rights with respect to termination of benefits, not a representative’s right to fees. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 29 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Third, to support its due process claim, Plaintiff also asserts that SSA did not provide notice and an opportunity to respond pursuant section 406. SAC ¶ 71. As stated above, however, the administrative review procedures set forth in 42 U.S.C.§ 406(a)(3) are inapplicable here because PWDF does not allege that a claimant, representative, or adjudicator who decided the claim requested review of the fee awarded under an approved fee agreement for any of the claimants named in the SAC. See SAC ¶¶ 23-63. For Dedmon, Donner, Eglip, Ness, Ramirez and Williams, where Plaintiff alleges partial payment of fees, its allegations show that PWDF attorneys did not comply with all requirements necessary to receive direct payment of fees, but they could still collect authorized fees from the claimants. See SAC ¶¶ 23-31, 43-54. For Golitsyn and Gorton, PWDF attorneys were notified that fees had been authorized in error and they received an opportunity to appeal or to obtain authorization for representative fees through the fee petition process. SAC ¶¶ 37, 41; RJN Exhibits B and C. For McShane and Velasco, Plaintiff’s allegations show only that fee determinations or payments are still pending (SAC ¶¶ 55-63), not that PWDF representatives were deprived of notice or the opportunity to be heard. Finally, Plaintiff’s due process claim is undermined by the fact that the agency has published policies for review of fee determinations, which specifically provide for notice and the opportunity to be heard. For example, a representative, claimant, or the adjudicator who decided the case may request modification of the maximum fee amount authorized under an approved fee agreement. 42 U.S.C. § 406(a)(3)(A); HALLEX I-1-2-44. Any such request must be made in writing within fifteen days of receiving notice of the award, and all parties are given notice of the request and an opportunity to submit relevant information. 42 U.S.C. § 406(a)(3)(A); HALLEX I-1-2-44. A RCALJ may review the approval or disapproval of a fee agreement after providing the representative, claimant, and the adjudicator with notice of the review and an opportunity to submit relevant information. HALLEX I-1-2-43. The RCALJ may also review whether an ALJ incorrectly approved a fee agreement that does not comport with the Act, agency regulations, or guidance, and offer the representative the opportunity to submit a fee petition under 20 C.F.R. Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 30 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 § 404.1725 if the agreement is disapproved. HALLEX I-1-2-43; HALLEX I-1-2-49. For fees authorized under the fee petition process, claimants or representatives may request review in writing within thirty days of the date of the fee authorization notice, and all parties are given notice of the request and an opportunity to submit relevant information. 20 C.F.R. § 404.1720(d); HALLEX I-1-2-62. Representatives who timely object to agency fee determinations therefore receive notice and an adequate opportunity to be heard. Moreover, in the event a fee agreement is disapproved, the representative can petition for a fee under 20 C.F.R. § 404.1725 – an option Plaintiff does not allege its employees, who were the appointed representatives, pursued. Lastly, the Act provides “[t]he decision of the administrative law judge or other person conducting the review shall not be subject to further review.” 42 U.S.C. § 406(a)(3)(C); 20 C.F.R. § 404.1720(d) (“[a]n authorized official of the Social Security Administration who did not take part in the fee determination being questioned will review the determination” and “[t]his determination is not subject to further review.”). PWDF representatives therefore received all process due, and its due process claim should be dismissed. Carpenter v. Mineta, 432 F.3d 1029, 1036 (9th Cir. 2005) (finding no violation of due process where plaintiff had benefit of administrative review, agency reached a final decision, and no further relief was available); Copaken v. Secretary of Health, Educ. & Welfare, 590 F.2d 729, 731-32 (8th Cir. 1979) (upholding dismissal of due process claim, noting determination of fees was a matter “entrusted exclusively to agency discretion”). V. CONCLUSION For the foregoing reasons, SSA respectfully requests that this Court dismiss the instant action for lack of subject matter jurisdiction, with prejudice. In the alternative, Defendant requests that this Court dismiss Plaintiff’s claims for failure to state a claim upon which relief can be granted. Dated: August 12, 2016 Respectfully submitted, BRIAN J. STRETCH United States Attorney /s/ Ann Marie Reding______________ Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 31 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ANN MARIE REDING Assistant United States Attorney Attorneys for Defendant OF COUNSEL TO DEFENDANT: MARGARET BRANICK-ABILLA Assistant Regional Counsel Social Security Administration Case 3:15-cv-02570-HSG Document 34 Filed 08/12/16 Page 32 of 32 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BRIAN J. STRETCH, CSBN 163973 United States Attorney SARA WINSLOW (DCBN 457643) Chief, Civil Division ANN MARIE REDING, CSBN 226864 Assistant United States Attorney U.S. Attorney’s Office 450 Golden Gate Avenue, Box 36055 San Francisco, CA 94102 Telephone: (415) 436-6813 Fax: (415) 436-6748 Email: annie.reding@usdoj.gov Attorneys for Defendant UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA PEOPLE WITH DISABILITIES, INC., Plaintiffs, v. CAROLYN COLVIN, Acting Commissioner of Social Security, Defendant. Case No. 3:15-cv-02570-HSG DEFENDANT’S REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF HER MOTION TO DISMISS SECOND AMENDED COMPLAINT Date: October 6, 2016 Time: 2:00 p.m. Courtroom 15, 18th Floor Hon. Haywood S. Gilliam Jr. Case 3:15-cv-02570-HSG Document 34-1 Filed 08/12/16 Page 1 of 3 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In accordance with the Federal Rule of Evidence 201, Carolyn Colvin, Acting Commissioner of the Social Security Administration (“Defendant”), respectfully requests that this Court take judicial notice of each of the facts below and exhibits accompanying this Supplemental Request for Judicial Notice. Federal Rule of Evidence 201 allows a court to take judicial notice of facts that are “not subject to reasonable dispute in that [they are] either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). A court may take judicial notice of judicial notice of records and reports of administrative bodies. Interstate Nat. Gas Co. v. S. California Gas Co., 209 F.2d 380, 385 (9th Cir. 1953). A court may also “take judicial notice of documents on which allegations in the complaint necessarily rely, even if not expressly referenced in the complaint, provided that the authenticity of those documents is not in dispute.” Tercica, Inc. v. Insmed Inc., No. C 05–5027 SBA, 2006 WL 1626930, at *8 (N.D. Cal. June 9, 2006) (citing In re Autodesk, Inc. Sec. Litig., 132 F.Supp.2d 833, 837–38 (N.D. Cal. 2000)). Accordingly, Defendant asks this Court to take judicial notice of the following: 1. Attached collectively as Exhibit A is a true and correct copy of provisions I-1-2- 44, I-1-2-49, and I-1-2-62 of the Hearing Appeals Litigation and Law Manual (“HALLEX”) concerning representative fees, cited in Defendant’s motion to dismiss. These HALLEX provisions are publically available at https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2.html (last visited Aug. 12, 2016). 2. Attached as Exhibit B is a true and correct copy of the August 12, 2015 Amended Authorization to Charge and Collect Fee letter which was issued to Plaintiff regarding claimant Golitsyn. 3. Attached as Exhibit C is a true and correct copy of a notice dated May 4, 2015, from the Acting Assistant Regional Chief ALJ rescinding approval of the fee agreement in the case of claimant Gorton. The notice also explains why the fee agreement was disproved and Case 3:15-cv-02570-HSG Document 34-1 Filed 08/12/16 Page 2 of 3 Defendant’s Motion to Dismiss SAC Case No. 3:15-cv-02570-HSG 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 instructs the representative to file a fee petition if he wishes to collect a fee for representing the claimant. 4. Attached as Exhibit D is a true and correct copy of a November 2, 2015 notice to Plaintiff regarding claimant Gorton. The notice instructs Plaintiff to look to the claimant for fees, and provided Plaintiff with an opportunity to appeal if he objected to the fee award. 5. Attached as Exhibit E is a true and correct copy of a notice dated June 9, 2014 regarding claimant Williams. The letter specifically advises Plaintiff to look to the claimant for payment of the authorized fee and explains that the determination may be appealed if Plaintiff or the claimant disagrees with the fee. 6. Attached as Exhibit F is a true and correct copy of a fee petition from Plaintiff, dated March 12, 2014, related to claimant McShane. 7. Attached as Exhibit G is a true and correct copy of a notice to Plaintiff, dated May 5, 2015, regarding claimant McShane. Dated: August 12, 2016 Respectfully submitted, BRIAN J. STRETCH United States Attorney /s/ Ann Marie Reding______________ ANN MARIE REDING Assistant United States Attorney Attorneys for Defendant OF COUNSEL TO DEFENDANT: MARGARET BRANICK-ABILLA Assistant Regional Counsel Social Security Administration Case 3:15-cv-02570-HSG Document 34-1 Filed 08/12/16 Page 3 of 3 Exhibit A Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 1 of 39 I-1-2-44. A. 1. NOTE: 2. Administrative Review of the Fee Authorized Under the Fee Agreement Process — Overview Last Update: 1/13/15 (Transmittal I-1-80) Citations: Social Security Act §§ 206(a)(3) and 1631(d)(2)(A) Who May File a Request for Administrative Review of the Fee Authorized Under the Fee Agreement Process When a claimant, affected auxiliary beneficiary (title II), eligible spouse (title XVI), representative, or decision maker disagrees with the fee the Social Security Administration (SSA) authorized based on an approved fee agreement, he or she may request administrative review of the amount of the fee. Claimant, Affected Auxiliary Beneficiary, Eligible Spouse, or Representative Requests Review The claimant, affected auxiliary beneficiary, eligible spouse, and representative have the right to request administrative review of the amount of the fee authorized under the fee agreement process, provided he or she timely files the request. For more information on timeliness, see subsection B below. See subsection D below if the representative files a fee petition within 15 days after receiving SSA's notice of the fee amount authorized under the fee agreement process. Decision Maker Requests Review The decision maker may request administrative review of the amount of the fee authorized under the fee agreement process only when there is evidence showing that: • The representative did not represent the claimant's interest adequately, or • The fee is clearly excessive in light of the services provided. Examples: • The claimant appointed a representative to pursue her claim and signed the fee agreement two months before the representative filed, on the claimant's behalf, a letter of intent to claim benefits. This delay resulted in a loss to the claimant of two months' retroactive benefits. The administrative law judge (ALJ) who approved the fee agreement requested reduction of the amount of the fee because the representative failed to represent the claimant's interest adequately. Page 1 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 2 of 39 B. C. 1. • An ALJ found the claimant entitled to a period of disability and to disability insurance benefits after a hearing at which the claimant was unrepresented. Before the favorable decision was issued but after the hearing, the hearing office received an appointment of representative and a fee agreement specifying a fee of the lesser of 25 percent of past-due benefits or $6,000. The ALJ approved the fee agreement because it met the statutory conditions and no exception applied. However, after reviewing a copy of the claimant's Notice of Award, the ALJ requested a reduction of the fee amount because the authorized fee was clearly excessive for the services involved, which consisted of meeting with the claimant and requesting a copy of the hearing recording. Time Limit for Filing a Request for Administrative Review Sections 206(a)(3)(A) and 1631(d)(2)(A) of the Social Security Act require that the person requesting administrative review do so in writing within 15 days after receiving the notice of the fee amount authorized under the fee agreement process. In the absence of evidence to the contrary, assume receipt within 5 days after the date of the notice. In cases involving a foreign address, assume receipt within 14 days after the date of the notice. Designated Reviewing Official The Commissioner of Social Security (Commissioner) has delegated authority to the following officials to conduct administrative review of the fee amount authorized under the fee agreement process: Hearing Level Individual Requesting Review of the Fee Amount Reviewing Official Claimant, affected auxiliary beneficiary, eligible spouse, or representative ALJ or attorney advisor ALJ or attorney advisor Regional Chief ALJ (RCALJ) who has jurisdiction RCALJ Deputy Chief ALJ or Chief ALJ If the claimant, affected auxiliary beneficiary, eligible spouse, or representative requests administrative review of the fee authorized based on a fee agreement approved by an ALJ or attorney advisor, the ALJ or attorney advisor who issued the favorable decision will conduct the review. If the claimant, affected auxiliary beneficiary, eligible spouse, or representative and the ALJ or attorney advisor, as the decision maker, request administrative review, the reviewing official is: • The RCALJ with jurisdiction over the decision-maker's hearing office, or Page 2 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 3 of 39 NOTE: 2. D. 1. 2. • In cases adjudicated in a National Hearing Center (NHC), the RCALJ with jurisdiction over the hearing office that transferred the case to the NHC. For more information about the NHC, see Hearings, Appeals and Litigation Law (HALLEX) manual I-2-1-58. The RCALJ takes a single action resolving all the issues raised in the requests for administrative review. This applies even if the decision maker requested administrative review and the request was untimely. To avoid inordinate delays, if the ALJ or attorney advisor with jurisdiction over a request for administrative review is unavailable for 30 days or more, the Hearing Office Chief ALJ will review the request and either act on the request for administrative review or delegate that responsibility to another ALJ or attorney advisor. Appeals Council Level Individual Requesting Review of the Fee Amount Reviewing Official Claimant, affected auxiliary beneficiary, eligible spouse, or representative Deputy Chair of the Appeals Council (AC) Administrative appeals judge (AAJ) Deputy Chair of the AC Deputy Chair of the AC Chair of the AC If the claimant, affected auxiliary beneficiary, eligible spouse, representative, or AAJ requests administrative review of the fee authorized based on a fee agreement an AAJ approved, the Deputy Chair of the AC will conduct the review. If more than one of these persons requests review, the Deputy Chair of the AC takes a single action resolving all the issues raised in the requests for administrative review. This applies even if an AAJ requested administrative review and the request was untimely. Preliminary Actions by Reviewing Official Informing the Parties The reviewing official must: • Acknowledge receipt of the request for administrative review; • Notify all other parties of the request, including the decision maker if he or she is not the reviewing official or the party who requested administrative review; and • Afford the other parties 15 days to submit written information responding to the request for administrative review. See HALLEX I-1-2-46 C for guidance on the notice content. Notifying Effectuating Components Page 3 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 4 of 39 3. E. In cases in which SSA has not already made direct payment and released all past-due benefits, the reviewing official must notify the decision-effectuating component(s) that SSA has received a request for administrative review. • For title II claims, the effectuating component is the processing center (PC) as defined in HALLEX I-1-2-2 D. To notify a PC, use the Fax Cover Sheet in HALLEX I-1-2-114 B. • For title XVI claims, the effectuating component is the field office. Notifying a Representative Who Filed a Fee Petition After SSA Authorized a Fee Under the Fee Agreement Process If the representative files a fee petition within 15 days after receiving SSA's notice of the fee amount authorized based on an approved fee agreement and asks for a higher fee than that shown in the notice, the ALJ or attorney advisor who issued the favorable decision, or the Deputy Chair of the AC when the AC issued a favorable decision and an AAJ approved the fee agreement, must advise the representative that: • The request cannot be processed as a fee petition because SSA has already authorized a fee based on the fee agreement and, as provided in section 206(a) of the Social Security Act, the two fee processes are mutually exclusive; and • The fee petition will be deemed a request for administrative review of the fee amount based on an approved fee agreement and not a request for an additional fee under the fee petition process. If the representative files the fee petition after the period for filing a timely request for administrative review has expired, see HALLEX I-1- 2-41 C. Reviewing Official's Action on Review of the Fee Amount The administrative review process provides a mechanism for the Commissioner to redress situations in which the fee authorized under the fee agreement process does not represent reasonable compensation for the services provided in the case. The administrative review process does not compel changes to the fee authorized based on the approved agreement. If the party requesting review filed a timely request and the reviewing official determines the fee agreement meets the statutory requirements for approval (and no exceptions apply), the reviewing official generally will review the amount of the fee authorized under the fee agreement process and either affirm or modify the amount that would otherwise be the maximum fee. The reviewing official will notify the parties and, if applicable, the decision maker as provided in subsection G below. When the decision maker is the party who filed a timely request for administrative review, the reviewing official will not proceed with review of the fee authorized under the fee agreement process unless there is evidence that: • The representative did not represent the claimant's interest adequately or that the fee is clearly excessive for the services provided; or Page 4 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 5 of 39 NOTE: F. 1. a. b. • Another party also filed a timely request for administrative review. For more information about the standard for review when the decision maker is the requesting party, see HALLEX I-1-2-46 B.2.b. If a representative misconduct or violation issue is raised, see HALLEX I-1-1-40 for rules governing the conduct of representatives, HALLEX I-1-1-50 for information on referring an alleged non-fee violation, and HALLEX I-1-2-81 for information on referring an alleged fee-related violation. If fraud or criminal behavior is suspected, see also HALLEX I-1-3-6. Review of the Authorized Fee in Concurrent Titles II and XVI Claims or When There Are One or More Affected Title II Auxiliary Beneficiaries or There Is an Eligible Spouse SSA Has Authorized the Total Fee Under the Fee Agreement Process The reviewing official must consider the total fee for all services when reviewing a request for administrative review of the authorized fee. Concurrent Claims Involving a Common Issue In concurrent claims involving a common issue (e.g., disability), the reviewing official must consider the total fee amount based on the past-due benefits resulting from both the titles II and XVI claims. Title II Claims Involving One or More Auxiliary Beneficiaries In title II claims involving one or more auxiliary beneficiaries, the reviewing official must consider the total fee amount based on the past-due benefits of the primary claimant and any auxiliary beneficiary(ies). Exceptions: The reviewing official will not consider the past-due benefits of the auxiliary beneficiary in either of the following situations. • If an auxiliary beneficiary did not file an application for benefits until after the primary claimant's favorable decision, and the claimant did not mention the auxiliary beneficiary in his or her application, SSA will not attribute the past-due benefits of the auxiliary beneficiary to the services provided by the primary claimant's representative. • If an auxiliary beneficiary appointed his or her own representative, SSA will not use the individually represented auxiliary beneficiary's past-due benefits to authorize the primary claimant's representative's fee under the fee agreement process. Page 5 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 6 of 39 2. 3. For more information, see Program Operations Manual System (POMS) GN 03920.035B. Title XVI Claims Involving an Eligible Spouse In title XVI claims involving an eligible spouse, the reviewing official will consider the fee amount based on the past-due benefits of the claimant and his or her spouse if the spouse's supplemental security income (SSI) benefits increased as a result of the claimant's eligibility or the spouse became eligible for SSI as a result of the claimant's eligibility. Exception: The reviewing official will not consider the past-due benefits of the eligible spouse if the eligible spouse appointed his or her own representative. SSA will not use the individually represented spouse's past-due benefits to authorize the claimant's representative's fee under the fee agreement process. For more information, see POMS GN 03920.036. SSA Has Not Authorized the Total Fee Under the Fee Agreement Process When a party requests administrative review and SSA has not authorized the total fee under the agreement, the reviewing official must: • Ask the effectuating component(s) to authorize a fee as quickly as possible, notify all parties, and send a copy of the fee authorization to the reviewing official; • Notify the parties that the reviewing official cannot work on the request until SSA authorizes the total fee; and • Defer conducting the review until receiving notice of the outstanding fee amount(s). Example: In a concurrent claims case favorably decided at the hearing level, the claimant timely requests administrative review of the title II fee amount, which is less than $6,000. However, the field office has not yet authorized and notified the parties of the title XVI fee. The hearing office staff member contacts the field office and asks for action to set the title XVI fee and to send the ALJ a copy of the fee notice. At the same time, the ALJ informs the claimant and representative in the notice acknowledging receipt of the request for administrative review that she will conduct the review after the field office has authorized the title XVI fee. The hearing office then diaries the request for receipt of the title XVI fee notice. Affected Auxiliary Beneficiary or Eligible Spouse Objects to Sharing in the Fee Payment If an auxiliary beneficiary who did not appoint his or her own representative objects to sharing in the fee payment or alleges that the representative did not represent him or her, the reviewing official will notify the parties that: Page 6 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 7 of 39 G. • The representative in the case provided services that helped establish benefits for other beneficiaries on the record; and • SSA does not modify a fee solely because an auxiliary beneficiary considers unfair his or her sharing in payment of the authorized fee. For more information, see POMS GN 03920.035D and Hopkins v. Cohen, 390 U.S. 530 (1968), reproduced as Social Security Ruling 68- 61c (C.E. 1968). If an eligible spouse who did not appoint his or her own representative, and whose SSI benefits increased or who became eligible for SSI as a result of the claimant's eligibility, objects to sharing in the fee payment or alleges that the representative did not represent him or her, the reviewing official will notify the parties that the claimant's representative provided services that helped establish or increase his or her benefits. For more information, see POMS GN 03920.036B.2. and GN 03920.036C. Notice of Action on Administrative Review The reviewing official must mail a written notice of the action taken on administrative review to: • The claimant, any affected auxiliary beneficiary(ies) (except those who reside with the claimant) or eligible spouse, and the representative, at their last known addresses, and • The decision maker, when he or she requested review or commented on the review. The notice will advise the parties that the determination is not subject to further review. See HALLEX I-1-2-46 C for information on the notice content. Page 7 of 7HALLEX I-1-2-44 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-44.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 8 of 39 I-1-2-49. A. 1. NOTE: ALJ or AAJ Incorrectly Approved Fee Agreement Last Update: 1/13/15 (Transmittal I-1-80) Effectuating Component Actions Referral Procedures Occasionally, an administrative law judge (ALJ) or administrative appeals judge (AAJ) may incorrectly approve a fee agreement when the agreement does not meet the requirements of the Social Security Act or an exception to the fee agreement process applies, as described in the Hearings, Appeals and Litigation Law (HALLEX) manual I-1-2-12. Processing center (PC) and field office (FO) personnel may not reverse a fee agreement decision made by an ALJ or an AAJ. When the PC or FO authorizer responsible for effectuating a favorable hearing or Appeals Council (AC) decision concludes that the ALJ or AAJ incorrectly approved a fee agreement, the authorizer will take the following actions: • Process the claim to payment; • Withhold 25 percent of past-due benefits if the representative is eligible for direct fee payment; • Request an incomplete notice to the claimant, deferring action on the fee agreement; • Prepare a protest memorandum, addressed to the Regional Chief ALJ (RCALJ) if the decision maker was an ALJ or the Deputy Chair of the AC if the decision maker was an AAJ; and • Send the memo with a copy of the ALJ or AC decision, the appointment(s) of representative(s), the fee agreement, the order approving the fee agreement, and any relevant documents, to the RCALJ (for ALJ decisions) or the Attorney Fee Branch (AFB) (for AC decisions). As explained in HALLEX I-1-2-44 C, if an ALJ in a National Hearing Center (NHC) incorrectly approves a fee agreement, the RCALJ that supervises the hearing office that transferred the case to the NHC will handle the administrative review of the fee agreement approval. However, for administrative efficiency reasons, in the Program Operations Manual System (POMS) GN 03940.090D, the PC and FO are instructed to send protest memos to the RCALJ of the region where the claimant is currently residing. While the impact should be minimal, if the receiving RCALJ does not have jurisdiction over the matter, the receiving Page 1 of 2HALLEX I-1-2-49 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-49.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 9 of 39 2. B. office will forward the protest memo to the RCALJ with jurisdiction and notify the PC or FO of the transfer. For detailed information about the PC or FO process for incorrectly approved fee agreements, see POMS GN 03940.025C.4. (title II instructions) or GN 03940.046F (title XVI instructions). If the effectuating component does not receive a response within 45 days, it will: • Follow up with the RCALJ (for ALJ actions) or the AFB (for AC actions), by fax or telephone, and • Diary the claim for another 15 days. Procedures After ODAR Acts on Referral • If the Office of Disability Adjudication and Review (ODAR) reverses the fee agreement determination, the PC or FO will diary the case for receipt of a fee petition and fee authorization from ODAR. • If ODAR affirms the fee agreement determination, the PC will follow standard procedures for processing an approved fee agreement. ODAR Actions If a PC or FO authorizer refers a case to ODAR because he or she believes the ALJ or AAJ incorrectly approved a fee agreement, the following individuals have authority to review the issue: • For hearing level cases, the RCALJ who has jurisdiction over the claimant's servicing hearing office (HO) or, if issued by an NHC ALJ, the RCALJ who has jurisdiction over the HO that transferred the case to the NHC (see the NOTE in subsection A above); or • For AC cases, the Deputy Chair. Within 30 days, the RCALJ or Deputy Chair will review the disputed action to determine whether the agreement meets the provisions in section 206 (a)(2)(A) of the Social Security Act (and is not excepted from the fee agreement process). These procedures are set forth in HALLEX I-1-2-12. If the RCALJ or Deputy Chair concludes the ALJ or AAJ incorrectly approved a fee agreement, he or she will: • Issue an order to the claimant disapproving the fee agreement, advising that if the representative intends to charge and collect a fee, he or she must file a fee petition; • Send a copy of the order disapproving the fee agreement to the representative with a cover letter; and • Send a copy of the corrective action to the respective PC or FO and the ALJ or AAJ who signed the prior order (see HALLEX I-1-2-114 for sample fax cover sheets). Refer to HALLEX I-1-2-112 for sample language for the order disapproving the fee agreement and the cover letter to the representative. If the RCALJ or Deputy Chair affirms the fee agreement approval, he or she will advise the PC or FO by memorandum to process the representative's fee under the fee agreement process. Refer to HALLEX I-1-2-113 for sample language for the memorandum. Page 2 of 2HALLEX I-1-2-49 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-49.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 10 of 39 I-1-2-62. A. B. Fee Petition Administrative Review Requested —Initial Procedures Last Update: 1/28/03 (Transmittal I-1-44) Begin Processing - Initial Support Staff Actions When the request for administrative review is received, the hearing office, regional office or Attorney Fee Branch staff will: 1. date stamp the request; 2. provide the reviewing official with the following: • copy of the decision, • copy of the exhibit list, • copy of the cassette envelope, • copy of the award notice or other benefit information, • fee petition, • fee authorization, and • any other documents or information that might be helpful in performing the administrative review; and 3. forward the request and relevant documents to the reviewing official, if necessary; and notify the processing center responsible for releasing the fee if the representative is an attorney who has requested direct payment. Use the cover sheet at I-1-2-114(B.) to fax this information. This may prevent release of the attorney payment and excess withholding if it has not already occurred. Conduct Administrative Review - Reviewing Official's Actions The Regional Chief Administrative Law Judge (RCALJ), Deputy Chief ALJ, the Chief ALJ, or the Deputy Chair of the Appeals Council, as appropriate, will follow these steps in conducting an administrative review: 1. Determine if: • the inquiry is a request for administrative review under the fee petition process; • the request was filed by a proper party (see I-1-2-63(A.)); • the request was filed within 30 days after the date of the notice of the orginal fee authorization or the requester has established good cause for not filing the request timely (see 20 CFR 404.1720(d) and 416.1520(d) for guidance on evaluating good cause); • the request includes other issues, and if so, who has jurisdiction to process the request; and • the requester sent a copy of the review request to the other parties. If not, send them a copy. Page 1 of 2HALLEX I-1-2-62 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-62.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 11 of 39 2. Acknowledge receipt of the request for administrative review and notify all other parties of the request. Give them 15 days to submit written information responding to the request. (See I-1-2-64 for guidance on sending the acknowledgment letter.) 3. If the request was filed timely (or good cause for late filing is established) by a proper party, review the determination of the fee amount initially authorized and determine whether it was a reasonable fee for the services provided the claimant, based on the factors outlined in I-1-2-57. The reviewing official will either increase, decrease or affirm the fee initally authorized. 4. Issue notice of determination of administrative review. (See I-1-2-65 for information on the determination notice.) Page 2 of 2HALLEX I-1-2-62 8/1/2016https://www.ssa.gov/OP_Home/hallex/I-01/I-1-2-62.html Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 12 of 39 Exhibit B Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 13 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 14 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 15 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 16 of 39 Exhibit C Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 17 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 18 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 19 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 20 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 21 of 39 Exhibit D Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 22 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 23 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 24 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 25 of 39 Exhibit E Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 26 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 27 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 28 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 29 of 39 Exhibit F Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 30 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 31 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 32 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 33 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 34 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 35 of 39 Exhibit G Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 36 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 37 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 38 of 39 Case 3:15-cv-02570-HSG Document 34-2 Filed 08/12/16 Page 39 of 39 [PROPOSED] ORDER GRANTING MTD Case No. 3:15-cv-02570-HSG 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BRIAN J. STRETCH, CSBN 163973 United States Attorney SARA WINSLOW (DCBN 457643) Chief, Civil Division ANN MARIE REDING, CSBN 226864 Assistant United States Attorney U.S. Attorney’s Office 450 Golden Gate Avenue, Box 36055 San Francisco, CA 94102 Telephone: (415) 436-6813 Fax: (415) 436-6748 Email: annie.reding@usdoj.gov Attorneys for Defendant UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA PEOPLE WITH DISABILITIES, INC., Plaintiffs, v. CAROLYN COLVIN, Acting Commissioner of Social Security, Defendant. Case No. 3:15-cv-02570-HSG [PROPOSED] ORDER GRANTING DEFENDANT’S MOTION TO DISMISS Date: October 6, 2016 Time: 2:00 p.m. Courtroom 15, 18th Floor Hon. Haywood S. Gilliam Jr. Case 3:15-cv-02570-HSG Document 34-3 Filed 08/12/16 Page 1 of 2 [PROPOSED] ORDER GRANTING MTD Case No. 3:15-cv-02570-HSG 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREFORE, on October 6, 2016, the Motion to Dismiss People with Disabilities, Inc.’s (“Plaintiff”) Second Amended Complaint filed by defendant Carolyn Colvin, Acting Commissioner of Social Security (“Defendant”) came on for regularly scheduled hearing in Courtroom 15, Honorable Hon. Haywood S. Gilliam Jr., U.S. District Court Judge presiding. Assistant United States Attorney Ann Marie Reding appeared on behalf of Defendant and Steven Bruce appeared on behalf of Plaintiff. Upon consideration of the pleadings, papers, and arguments of counsel, and with good cause shown, IT IS HEREBY ORDERED THAT Defendant’s Motion to Dismiss Plaintiff’s Second Amended Complaint is GRANTED and Plaintiff’s First Amended Complaint is dismissed in its entirety, with prejudice. IT IS SO ORDERED. Date: HAYWOOD S. GILLIAM, JR. United States District Court Judge Case 3:15-cv-02570-HSG Document 34-3 Filed 08/12/16 Page 2 of 2