Opinion
1:16-CV-00393 (TWD)
11-14-2016
ALENE M. DINGMAN, Plaintiff, v. SOCIAL SECURITY ADMINISTRATION, Defendant.
APPEARANCES: ALENE M. DINGMAN Plaintiff pro se P.O. Box 4374 Queensbury, New York 12804 HON. RICHARD S. HARTUNIAN United States Attorney for the Northern District of New York Counsel for Defendant Room 218 James T. Foley U.S. Courthouse Albany, New York 12207 OFFICE OF GENERAL COUNSEL Social Security Administration 26 Federal Plaza, Room 3904 New York, New York 10278 EMILY FISHMAN, ESQ. Special Assistant United States Attorney STEPHEN P. CONTE, ESQ. Chief Counsel, Region II
APPEARANCES: ALENE M. DINGMAN
Plaintiff pro se
P.O. Box 4374
Queensbury, New York 12804 HON. RICHARD S. HARTUNIAN
United States Attorney for the
Northern District of New York
Counsel for Defendant
Room 218
James T. Foley U.S. Courthouse
Albany, New York 12207 OFFICE OF GENERAL COUNSEL
Social Security Administration
26 Federal Plaza, Room 3904
New York, New York 10278 EMILY FISHMAN, ESQ.
Special Assistant United States Attorney STEPHEN P. CONTE, ESQ.
Chief Counsel, Region II THÉRÈSE WILEY DANCKS, United States Magistrate Judge DECISION AND ORDER
I. INTRODUCTION
Plaintiff Alene Dingman ("Dingman") has commenced this action against Defendant, Acting Commissioner of the Social Security Administration ("SSA") Carolyn Colvin ("Commissioner') under the Social Security Act, 42 U.S.C. § 405(g). In her complaint, Plaintiff seeks a determination that she was entitled to Title II disability benefits during the time for which an overpayment was assessed; that the overpayment was waived by the SSA; and that she is entitled to the return of $1,341.00 in Federal income tax refunds taken by the Treasury Department in 2015 and 2016 as partial repayment of the overpayment. (See Dkt. Nos. 1 and 11.) Plaintiff has filed a voluntary consent to the jurisdiction of a Magistrate Judge in accordance with 28 U.S.C. § 636(c), Federal Rule of Civil Procedure 73, N.D.N.Y. Local Rule 72.2(b) and General Order 18. (Dkt. No. 10.)
Dingman erroneously commenced this action as a civil rights lawsuit brought pursuant to 42 U.S.C. § 1983. (Dkt. No. 1.) On initial review, the Court construed the case as one brought under 42 U.S.C. § 405(g). (Dkt. No. 12.)
Plaintiff's complaint (Dkt. No. 1) and her supplement to the complaint (Dkt. No. 11) have been deemed together to be the operative pleading in the case and are referred to herein collectively as "complaint." (Dkt. No. 12.)
References to documents cited herein are to paragraph numbers included in the document where specifically indicated and otherwise to the page numbers assigned by the Court's CM/ECF electronic docketing system.
The Commissioner has moved to dismiss Plaintiff's complaint for lack of subject matter jurisdiction. (Dkt. No. 13.) In response to the Commissioner's motion, Plaintiff has submitted a single page in the form of a notice of motion asking that the case not be dismissed and that the Court find that there was no overpayment because she was entitled to disability benefits, and that she is entitled to return of the Federal income tax refunds taken from her in 2015 and 2016. (Dkt. No. 15.) For the reasons discussed below, the Commissioner's motion to dismiss the complaint for lack of subject matter jurisdiction is granted.
II. BACKGROUND FACTS
Plaintiff filed an application for Social Security disability insurance benefits on November 22, 1995. (Dkt. No. 13-2 at ¶ 3(a).) Although initially denied, Plaintiff was found disabled as of October 2, 1995, at the reconsideration level. Id. The SSA subsequently determined that due to work activity, Plaintiff had been overpaid in the amount of $9,408.50 from July 2000 to January 2001 and March 2001 to July 2001. Id. at 7. Plaintiff's July 31, 2003, request for a waiver of overpayment recovery was denied by the SSA on April 28, 2004, on the grounds that Plaintiff was at fault in causing the overpayment because of her failure to report work activity as she had agreed to do when she applied for benefits in 1995. (Dkt. No. 13-2 at 7-18.) In the letter from SSA advising Plaintiff of the denial of her waiver request, she was advised of her right to seek a hearing before an administrative law judge ("ALJ") within sixty days of receipt of the letter if she disagreed with the determination. Id. at 17-18. Plaintiff thereafter acknowledged the overpayment and agreed to the withholding of $50.00 from her monthly benefit. Id. at 19-28.
On May 18, 2007, the SSA sent Plaintiff a letter informing her of the Agency's intent to find that she had been performing work at substantial gainful activity levels since July 2003 and had therefore not been eligible for benefits since that time. Id. at 29-30. In a follow up letter on June 7, 2007, Plaintiff was notified by the SSA that she had not been eligible for disability insurance benefits since July 2003. Id. at 31-32. In the letter, Plaintiff was advised of her right to appeal the determination in writing within sixty days of receipt of the letter. Id. at 32. The determination resulted in an additional overpayment to Plaintiff and her daughter. Id. at ¶ 3(c).
Plaintiff requested reinstatement of benefits on June 7, 2007, and the request was denied by the SSA by letter of July 19, 2007. Id. at 33-36. Plaintiff was again advised of her right to appeal. Id. at 34. Plaintiff requested reinstatement again on July 30, 2007, and that request was denied in a September 10, 2007, letter from SSA again advising Plaintiff of her right to appeal. Id. at 37-40.
A subsequent request for reinstatement was denied in a February 6, 2008, letter from the SSA in which Plaintiff was advised of her right to appeal. Id. at 41-43. On February 29, 2008, Plaintiff requested reconsideration of her right to benefits on the grounds that she disagreed with the determination made on her claim for disability worker or child benefits because she was disabled due to a back condition and was previously allowed disability due to a personality disorder. (Dkt. No. 32-2 at 44.) The SSA wrote to Plaintiff on August 7, 2008, informing her of the determination that the original decision was correct and in accordance with the law and regulations. Id. at 45-46. Plaintiff was advised in the letter of her right to request an administration hearing before an ALJ within sixty days of receipt of the letter. Id. at 45. Christina Prelle ("Prelle"), Chief of Court Case Preparation and Review Branch 4 of the Office of Appellate Operations, Office of Disability Adjudication and Review, SSA, has stated in her Declaration submitted on the motion, that to the best of her knowledge and belief, based upon information available in the SSA computer systems, Plaintiff did not file an appeal. Id. at ¶ 3(d).
Overpayment in the amount of $30,432.00 present on Plaintiff's daughter's account was waived by the SSA on January 2, 2008. Id. at 47-48; see also ¶ 3(e). By letter of August 6, 2012, the SSA advised Plaintiff that an adjustment of her overpayment had been made reducing the overpayment to $40,778.20. Id. at 49-51. Plaintiff was advised of her right to appeal the determination. Id.
On November 29, 2013, in a Special Determination, the SSA concluded that further collection efforts to recover the $40,778.20 overpayment were futile, and that the debt was not recoverable by normal recovery operations. Id. at 54-55. Plaintiff had been notified previously by the Department of the Treasury on January 3, 2008, and February 1, 2008, that her Social Security benefit payment and other federal payments might be reduced to pay her delinquent debt without further notice. (Dkt. No. 13-2 at 52-53.) On April 22, 2015, and May 11, 2016, the SSA notified Plaintiff that it had received Federal or State payments due her in the amounts if $555.00 and $786.00, respectively, and used them toward the overpayment of her disability income benefit overpayment. Id. at 57, 61. The amounts taken were from Federal income tax refunds due Plaintiff. (Dkt. Nos. 1 at ¶ 5; 11 at 1.)
According to Plaintiff, she applied for and received disability income benefits for a torn meniscus in her knee from November 1995 through March 2008. (Dkt. No. 1 at 5.) After March 2008, when her disability benefits had ended, Plaintiff received notification to pay a lump sum of the benefits back as an overpayment. Id. Plaintiff thereafter went to the SSA office in Queensbury, New York, and met with an office worker who informed her that she was not required to and did not have to pay back any of the overpayment. Id. The office worker told her that the office would waive the total amount of the overpayment, and she would not have to pay any amount. Id.
Plaintiff also contends that she was entitled to benefits during the relevant time period and should not be required to pay back any of the overpayment. Id. In addition, Plaintiff claims that she cannot afford to repay the overpayment due to lack of funds and inadequate income from employment. Id. According to Plaintiff, she was allowed to earn $10,000 a year while collecting disability benefits, and that if she made more than that her benefit payment would be adjusted. Id. Plaintiff claims that her disability benefit ended when the doctor decided her knee was healed. Id.
The relief sought by Plaintiff is a waiver of the overpayment on the grounds that she was entitled to benefits, and reimbursement of the $555.00 and $786.00 taken from her Federal income tax refunds. (Dkt. Nos. 1 at 6; 11 at 1.)
III. ANALYSIS
A. Subject Matter Jurisdiction Over Disability Benefit Claims Arising Under Title II of the SSA
A "case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) [of the Federal Rules of Civil Procedure] when the district court lacks the statutory or constitutional power to adjudicate it." Nike, Inc. v. Already, LLC, 663 F.3d 89, 94 (2d Cir. 2011). The "plaintiff asserting subject matter has the burden of proving by a preponderance of the evidence that it exists." Luckett v. Bure, 290 F.3d 493, 497 (2d Cir. 2002). The court may refer to evidence outside the pleadings in resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
The United States, as sovereign, including its agencies,"is immune from suit save as it consents to be sued . . . and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Testan, 424 U.S. 392, 300 (1976) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)); F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994). "A waiver of the Federal Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign." Lana v. Pena, 518 U.S. 187, 192 (1996).
The Social Security Act ("Act") waives the SSA's sovereign immunity in limited circumstances. As to claims involving Title II disability benefits, federal courts may review "final decisions" of the SSA. See 42 U.S.C. § 405(g) & (h). Section 405(g) of the Act provides that "[a]ny individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party . . . may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such time as the Commissioner allows."
Section 405(h) limits judicial review to the review permitted under § 405(g). It mandates that
No findings of fact or decision of the Commissioner of Social Security shall be reviewed by an person, tribunal, or government agency except as herein provided. No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.42 U.S.C. § 405(h). See Shalala v. Illinois Council on Long Term Care, Inc. 529 U.S. 1, 12 (2000) (restriction against "§ 405(h) applies where the Act provides both standing and the substantive basis for the presentation of a claim . . . ." (citation and internal quotation marks omitted)); Weinberger v. Salfi, 422 U.S. 749, 801 (1975) (it is clear from Sections 405(g) & (h) that "the only civil action permitted to an individual on any claim arising under Title II of the Act is an action to review the final decision of the Secretary made after a hearing" (internal quotation marks omitted)). "Claims for money, claims for other benefits, claims of program eligibility, and claims that contest a sanction or a remedy" are all covered by Sections 405(g) & (h). Shalala, 529 U.S. at 13-14. Challenges to the SSA's determinations regarding the existence of any overpayment of benefits or whether an overpayment of benefits must be repaid are initial determinations subject to the administrative review process. See C.F.R. § 404.902(j), (k) (administrative actions subject to administrative and judicial review include those involving overpayment of benefits); Marks v. United States, No. C07-5679 FDB, 2008 WL 803150, at * 5 (W.D. Wash. March 24, 2008) ("Jurisdiction to consider any claim regarding overpayment and denial of benefits lies exclusively under 42 U.S.C. § 405(g).").
The Court will provide Plaintiff with a copy of the unpublished decision in accordance with the Second Circuit's decision in Lebron v. Sanders, 557 F.3d 76 (2d Cir. 2009) (per curiam).
The purpose of exhaustion of remedies provisions like those in Section 405(g) & (h), which require an administrative hearing and final agency determination before a party can seek judicial review, exist for the dual purposes of protecting administrative agency authority and promoting judicial efficiency. See McCarthy v. Madigan, 503 U.S. 140, 144-45 (1992), superseded by statute on other grounds, Woodford v. Ngo, 548 U.S. 81 (2006). As noted by the Commissioner in her motion papers, the term "final decision of the Commissioner" is not defined in the Act, and "its meaning is left to the [Commissioner] to flesh out by regulation." Weinberger, 422 U.S. at 767. The Commissioner's regulations provide that a claimant must complete an administrative review process to obtain a final decision subject to judicial review. See 20 C.F.R. § 404.900(a); Califano v. Sanders, 430 U.S. 99, 102 (1977) ("The Act and regulations thus create an orderly administrative mechanism, with district court review of the final decision of the [Commissioner].") The administrative mechanism includes at least an initial determination, which in some cases includes a request for consideration, an administrative hearing before an ALJ and a decision, and review by the Appeals Council. See 20 C.F.R. §404.900 et seq.
Under the applicable regulations, a claimant whose benefits are discontinued, has been assessed an overpayment, and/or who seeks waiver of an overpayment, first receives an initial determination. See 20 C.F.R. §§ 404.506(h), 404.902(a). If dissatisfied with the determination, the claimant may request reconsideration, and if the reconsideration determination is unfavorable may request a de novo hearing before an ALJ. See 20 C.F.R. §§ 404.907, 404.929. In some circumstances involving a waiver request, a hearing before an ALJ may directly follow the initial determination. Id., § 404.907.
If a claimant is dissatisfied with the ALJ's decision, she or he may request that the Appeals Council review the decision. 20 C.F.R. § 404.967. The Appeals Council may either deny review, leaving the ALJ's determination as the final decision, or grant the request for review and issue its own decision. Id. In either case, the claimant may then seek judicial review of the Commissioner's decision within sixty days after receiving notice of the Appeals Council action. Id. A claimant receives a "final decision of the Commissioner" only after completion of the full administrative process, and the "final decision" triggers the right to judicial review under Section 405(g). See also 20 C.F.R. § 404.981.
B. Exhaustion of Administrative Remedies Regarding Plaintiff's Claim
The Commissioner has properly construed Plaintiff's complaint as asserting three related claims: (1) that she was entitled to disability benefits during the periods at issue and should, therefore not be considered to have been overpaid (Dkt. Nos. 1 at 2-3, 5-6; 11 at 1); (2) that the SSA waived the overpayment shortly after March 2008, and the Court should do likewise, id.; and (3) that by extension of the foregoing, the SSA was not entitled to withhold $550.00 in 2015 and $786.00 in 2016 from her Federal income tax returns to recover the overpayment, and the amounts should be returned to her. (Dkt. Nos. 1 at 5-6; 11 at 1.)
The Prelle Declaration and documentation submitted by the Commissioner on her motion to dismiss establish that Plaintiff did not receive final decisions by the Commissioner on any of the three claims prior to commencement of this action. (Dkt. No. 13-2 at 1-64.) Plaintiff has made no claim or submitted any evidence to the contrary. (See Dkt. Nos. 1, 11, 15.)
1. Claim of Entitlement to Disability Benefits During the Time Period at Issue
There is no evidence indicating that plaintiff filed a request for reconsideration after she was sent notices of the denial of her reinstatement requests on July 19 and September 10, 2007, and advised of her right to file such a request. (Dkt. No. 13-2 at ¶ 3(d) and 33-40.) Plaintiff did request reconsideration of the denial of a subsequent request for reinstatement of benefits sent on February 6, 2008. Id. at ¶ 3(d) and 41-43. However, although the SSA's August 7, 2008, notice of reconsideration advising Plaintiff that its original finding that she was not entitled to disability benefits, also advised Plaintiff that her next step in the administrative process was an appeal to an ALJ, there is no evidence she undertook an appeal, nor does she claim to have done so. (Dkt. No. 13-2 at ¶ 13(d) and 45-46.)
Because there is no evidence that Plaintiff took the administrative steps that would have resulted in a final decision on the issue of whether she was entitled to disability benefits during the period at issue that was then subject to judicial review, the Court finds that the District Court lacks subject matter jurisdiction over the claim.
2. Entitlement to Waiver
Plaintiff claims that the overpayment should be waived because an SSA office worker in Queensbury, New York advised her that it had been waived some time after March 2008. (Dkt. No. 1 at ¶¶ 4-5.) The only favorable waiver that could be located in Plaintiff's SSA records is the January 2, 2008, notice of waiver in the amount of $30,432.00 on Plaintiff's daughter's record. (Dkt. No. 13-2 at 47-48.) There is no evidence of any ALJ or Appeals Council decision on an unfavorable waiver determination that would render the determination final for purposes of judicial review. Id. at ¶ 3(b) and 7-8, 17-18, 21-28. Furthermore, while Plaintiff may have mistakenly believed the overpayment had been waived based upon her conversation with an SSA office worker sometime after March 2008, SSA subsequently sent her a notice of the amount of her overpayment with notice of her right to request reconsideration on August 6, 2012. Id. at ¶ 3(f) and 49-51. There is no evidence that Plaintiff ever utilized the administrative process.
The Commissioner points out in her Memorandum of Law that the November 29, 2013, Special Determination that Plaintiff's debt was uncollectible through normal recovery efforts, did not constitute a waiver of overpayment. (Dkt. Nos. 13-1 at 10; 13-2 at ¶ 3(h) and 54-56.) --------
Given the foregoing, the Court finds that Plaintiff failed to take the administrative steps that would have resulted in a final decision on the issue of whether she was entitled to a waiver which was then subject to judicial review. Therefore, the District Court lacks subject matter jurisdiction over the claim.
3. Return of the $555.00 and $786.00 Payments
The SSA is authorized to request that the Department of the Treasury offset income tax refunds due taxpayers who have an outstanding overpayment. See 31 U.S.C. § 3720A; 20 C.F.R. §§ 404.520-404.526; Dkt. No. 13-2 at 52-53. The Commissioner's regulations provide that a finding by the SSA that it can collect an overpayment by Federal income tax offset in not an initial determination subject to the administrative review process and is not subject to judicial review. See 20 C.F.R. § 404.903(p). Therefore, the Court finds that the District Court also lacks subject matter jurisdiction over Plaintiff's claim for return of the offset amounts.
ACCORDINGLY, it is hereby
ORDERED that the Commissioner's motion to dismiss Plaintiff's complaint for lack of subject matter jurisdiction (Dkt. No. 13) is GRANTED and that Plaintiff's complaint (Dkt. Nos. 1 and 11) be DISMISSED WITH PREJUDICE; and it is hereby
ORDERED that the Clerk provide Plaintiff with a copy of this Decision and Order, along with a copy of the unpublished decision in Marks v. United States, No. C07-5679 FDB, 2008 WL 803150 (W.D. Wash. March 24, 2008) in accordance with the Second Circuit decision in Lebron v. Sanders, 557 F.3d 76 (2d Cir. 2009) (per curiam). Dated: November 14, 2016
Syracuse, New York
/s/_________
Thérèse Wiley Dancks
United States Magistrate Judge