Opinion
No. C 11-2691
06-28-2012
CELIA V. MANITSAS, Plaintiff, v. MICHAEL J. ASTRUE, Commissioner of Social Security, Defendant.
ORDER RE PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT AND
DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT
Plaintiff Celia Manitsas ("Manitsas") seeks judicial review of the decision by the Commissioner of Social Security ("the Commissioner") denying her request that the Social Security Administration ("the SSA") waive recovery of overpaid disability insurance benefits. This action is before the court on Manitsas' motion for summary judgment and her alternative motion to remand, as well as the Commissioner's motion for summary judgment. Having read the parties' papers and the administrative record, and having carefully considered their arguments and relevant legal authority, the court hereby DENIES Manitsas' motion, GRANTS the Commissioner's motion, and AFFIRMS the decision of the Administrative Law Judge ("the ALJ").
BACKGROUND
Based on a January 1998 application, Manitsas was awarded disability insurance benefits beginning in February 1997. On June 4, 2006, the SSA notified Manitsas that as a result of her subsequent return to work, it had determined that she had been overpaid $47,613.30 in benefits between January of 2003 and May of 2006. The notice informed Manitsas that she had sixty days to request reconsideration of the overpayment determination. The notice also explained Manitsas' right to request that the SSA waive recovery of overpaid benefits.
In June 2006, Manitsas returned a check in the amount of $1,154.00 to the SSA. The overpayment amount of $47,613.30 was reduced to $46,459.30 by the returned check.
Manitsas did not request reconsideration of the overpayment determination. On July 21, 2006, Manitsas elected instead to request that the SSA waive recovery of the overpayment. On August 14, 2006, Manitsas wrote to the SSA alleging that she tried to cancel her benefits on three separate occasions. She claimed she called "someone in Oakland [and] told the person that [she] was working a little bit at [her] husband's office in order for him to put [her] on the payroll so [they] could get health coverage." A.T. 36. On September 27, 2006, the SSA denied Manitsas' request for waiver, noting Manitsas' inability to verify when she contacted the SSA and with whom she spoke. The SSA determined Manitsas was not "without fault" in causing the overpayment of benefits because she was required to notify the SSA if her earnings exceeded the allowable amount, and she failed to do so.
On December 4, 2006, Manitsas filed an untimely request for a hearing. The SSA found good cause for her untimely request, and on February 20, 2008, Manitsas received a hearing before an ALJ. Manitsas appeared and testified at the hearing.
On December 22, 2008, the ALJ denied Manitsas' request for waiver, finding Manitsas was not "without fault" for the overpayment of benefits because she failed to furnish material information and accepted payments that she knew were incorrect. On April 19, 2011, the Appeals Council denied review of the unfavorable decision, making the ALJ's decision the final decision of the Commissioner. On June 3, 2011, Manitsas filed the instant appeal.
DISCUSSION
A. Legal Standards
1. Overpayment Procedural Options
An overpaid individual has two options once the SSA discovers overpayment. The first option is to request reconsideration of the fact and/or amount of the initial overpayment determination. 20 C.F.R. § 404.502a(f). Upon discovering that an overpayment has occurred, the SSA immediately notifies the overpaid individual of the SSA's initial determination that overpayment exists. 20 C.F.R. §§ 404.502a; 404.902(j). The notified individual then has sixty days to request reconsideration of the fact and/or amount of the initial overpayment determination. 20 C.F.R. § 404.502a(f). If the individual fails to request reconsideration of the initial overpayment determination, the SSA's determination regarding the fact and/or amount of overpayment becomes binding and nonappealable. 20 C.F.R. § 404.905.
The second option is for an overpaid individual to apply for a waiver of recovery, by which an overpayment of benefits may essentially be excused if the individual is deemed to be without fault for the overpayment. See 20 C.F.R. § 404.506(a) ("there shall be no adjustment or recovery in any case where an overpayment under title II has been made to an individual who is without fault if adjustment or recovery would defeat the purpose of title II of the Act, or be against equity and good conscience") (emphasis added). The Act and regulations provide that an overpaid individual has a right to request waiver and show that she is "without fault" in causing the overpayment of benefits. See 20 C.F.R. § 404.502a(e); see also 20 C.F.R. § 404.506(c).
The SSA's notification of overpayment includes instructions about how to apply for waiver of recovery. 20 C.F.R. § 404.502a(e). If an overpaid individual requests waiver within thirty days of receiving a notice of overpayment, recovery will stop until an initial waiver determination is made. 20 C.F.R. § 404.506(b). An initial waiver determination, like other initial determinations made by the SSA, is subject to the administrative review process. See 20 C.F.R. 404.506(h) ("[i]f it appears that the waiver cannot be approved . . . [r]econsideration is then the next step in the appeals process").
The SSA's regulations make it clear that whether overpayment exists and whether overpayment must be repaid are two separate initial determinations. Compare 20 C.F.R. § 404.902(j) with 20 C.F.R. § 404.902(k). As such, each initial determination requires independent review and full exhaustion of administrative remedies prior to seeking judicial review. See 42 U.S.C. § 405(g); see also 20 C.F.R. § 404.900.
2. Exhaustion Requirement
Claims arising out of the Social Security Act ("the Act") can only be brought in federal court in accordance with the judicial prerequisites of 42 U.S.C. § 405(g). See 42 U.S.C. § 405(h) (stating the Act contains an exclusive remedy provision). The remedy provision in Section 405(g) provides:
Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which [s]he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to [her] of notice of such decision. . . .42 U.S.C. § 405(g).
Judicial review is permitted only once a "final decision" by the Commissioner has been made. 42 U.S.C. § 405(g). Although the Act does not define the term "final decision," the SSA has given meaning to the term through regulations. Sims v. Apfel, 530 U.S. 103, 106 (2000) (citing 42 U.S.C. § 405(a); Weinberger v. Salfi, 422 U.S. 749, 766 (1975)).
According to the SSA's regulations, a final decision may only be reached upon completion of the administrative review process. See 20 C.F.R. § 404.900(a)(5). To initiate the administrative review process, a claimant must request reconsideration of an initial determination, otherwise the initial determination is binding. 20 C.F.R. §§ 404.905, 404.900(a)(2). Next, the claimant must request and take part in a hearing before an administrative law judge ("ALJ"). 20 C.F.R. §§ 404.929, 404.900(a)(3). Upon notification of an unfavorable ALJ decision, a claimant must seek the Appeals Council's review of that decision. 20 C.F.R. § 404.955, 404.900(a)(4). If the claimant seeks the Appeals Council's review, the Appeals Council may deny the request, thereby making the ALJ's decision the final decision of the Commissioner. 20 C.F.R. §§ 404.967, 404.981, 404.900(a)(5). Alternatively, the Appeals Council may choose to review the case and issue a decision, which in turn becomes the final decision of the Commissioner. 20 C.F.R. §§ 404.967, 404.981, 404.900(a)(5).
According to the SSA's regulations, a claimant may seek judicial review only after requesting reconsideration of an initial determination and completing each step of the administrative review process. See 20 C.F.R. § 404.900.
B. The Parties' Motions
1. Overview
In this district, pursuant to Civil L.R. 16-5, after the Commissioner files an answer, together with the record below, the briefs in social security appeals are labeled as "motions for summary judgment." However, the briefing requirements and schedule differ from those required by Civil L.R. 7-3 for summary judgment motions filed in typical civil cases. For example, in the court's experience, after the claimant/appellant files her opening motion for summary judgment pursuant to Civil L.R. 16-5, which is akin to an opening brief on appeal, the Commissioner typically files a "cross-motion for summary judgment," which is in actuality an opposition to the claimant's opening brief. Unlike typical civil cases, Civil L.R. 16-5 does not permit the Commissioner an opportunity to file a reply to his cross-motion for summary judgment. Instead, the rule simply permits the claimant to file a reply. In sum, although the local rule labels the briefs in social security appeals "motions for summary judgment," the schedule and number of briefs (three) set forth by Civil L.R. 16-5 provides for appellate-type briefing.
Here, the parties each filed a motion for summary judgment, as anticipated by Civil L.R. 16-5, and Manitsas chose not to file a "reply" to the Commissioner's motion, as permitted by Civil L.R. 16-5. Accordingly, there are only two briefs currently before the court.
At the time the motions were being filed in this case, the court's electronic filing system ("ECF") was undergoing updates and reconfiguration that resulted in ECF automatically generating and providing briefing deadlines when a motion was filed. Unfortunately, the deadlines automatically generated by ECF in association with motions filed in social security appeals were erroneous and not in compliance with Civil L.R. 16-5. The error has since been corrected by the court's automation department. However, when the court became aware of the error in this case, on January 13, 2012, it issued an order clarifying and correcting the briefing schedule so that it was in compliance with Civil L.R. 16-5.
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In the instant case, which concerns an overpayment of benefits, the parties' motions differed somewhat from those filed in a typical social security appeal, which generally involves a claimant's appeal of an ALJ's denial of benefits. Although Manitsas in her motion asserts that she is seeking judicial review of the ALJ's decision denying her request that the SSA waive recovery of overpaid benefits, as discussed below, Manitsas actually challenges the fact and/or amount of overpayment, issues associated with a request for reconsideration - a different challenge than a request for waiver. The Commissioner's motion, unlike Manitsas' motion, focuses on the ALJ's waiver decision. Thus, the two motions essentially concern two different issues: reconsideration and waiver. Because Manitsas failed to file a reply, she did not respond to the Commissioner's waiver arguments as set forth in his motion.
2. Manitsas' Motion
As noted above, in her motion, Manitsas claims to seek judicial review of the ALJ's decision denying her request that the SSA waive recovery of overpaid benefits. However, her entire motion is devoted to arguments that the SSA's initial overpayment determination was incorrect. Manitsas argues that the SSA's demand for recovery of overpaid benefits was based on the misapplication of the Commissioner's regulation on "substantial gainful activity." She further contends that since the SSA's assessment of overpayment was improper, recovery would be contrary to the Act and good conscience, and therefore, overpayment recovery should be waived.
In his motion, discussed in more detail below, the Commissioner correctly notes Manitsas' attempt to conflate the two, separate initial determinations regarding whether overpayment exists and whether overpayment must be repaid. The Commissioner contends that because Manitsas failed to request reconsideration of the overpayment determination, the overpayment determination became binding and is not subject to further administrative or judicial review. See 20 C.F.R. § 404.903(l); see also 20 C.F.R. § 404.905 ("An initial determination is binding unless you request reconsideration within the stated time period, or we revise the initial determination"). Therefore, the Commissioner contends that the only question before this court is whether the ALJ's decision to deny waiver of recovery of overpayment is supported by substantial evidence, an issue the court addresses below in conjunction with its discussion of the Commissioner's motion.
It is clear from the record that Manitsas did not exhaust her administrative remedies with respect to the SSA's determination of overpayment. Upon receiving notification of overpayment, Manitsas had sixty days to request reconsideration of the fact and/or amount of the initial overpayment determination, but failed to do so. See 20 C.F.R. § 404.502a(f); see also A.T. 16-17, 21. Therefore, the Commissioner's overpayment determination became binding and is not subject to this court's review. See 20 C.F.R. § 404.905 ("[a]n initial determination is binding unless you request reconsideration within the stated time period"). Accordingly, the court lacks jurisdiction over the matter. See 42 U.S.C. § 405(g); see also 20 C.F.R. § 404.900.
For this reason, the court DENIES Manitsas' motion for summary judgment and her alternative motion to remand.
3. The Commissioner's Motion
In his motion, the Commissioner acknowledges that Manitsas exhausted her administrative remedies regarding her request for waiver of overpayment, and that the court has subject matter jurisdiction over the waiver request.
The Commissioner argues that the record supports the ALJ's finding that Manitsas was not "without fault" for the overpayment of benefits. The Commissioner notes that Manitsas was required to "furnish information which [she] knew or should have known was material." See 20 C.F.R. § 404.507(b). He contends that the ALJ properly found that Manitsas failed to report changes in her earnings above the allowable limit, and thus, that she knowingly failed to furnish material information. As noted above, Manitsas chose not to file a reply brief in accordance with Civil L.R. 16-5, and therefore has not responded to the arguments in the Commissioner's motion.
Having reviewed the record, the relevant authorities, and the ALJ's decisions, the court concludes that the ALJ's December 22, 2008 decision denying Manitsas' request for waiver was supported by substantial evidence, and that the ALJ applied the correct legal standards. See Holohan v. Massanari, 246 F.3d 1195, 1201 (9th Cir. 2001).
For purposes of a waiver request, an individual is said to be at "fault" for overpayment, if the facts show that the overpayment "resulted from (a) [a]n incorrect statement made by the individual which [she] knew or should have known to be incorrect; or (b) [f]ailure to furnish information which [she] knew or should have known to be material; or (c) . . . acceptance of a payment which [she] either knew or could have been expected to know was incorrect." 20 C.F.R. § 404.507. Additionally, the SSA considers "all pertinent circumstances, including an individual's age and intelligence, and any physical, mental, educational, or linguistic limitation . . . the individual has." 20 C.F.R. § 404.507.
There is substantial evidence to support the ALJ's decision that Manitsas was not "without fault" and that the overpayment resulted from her failure to furnish information that she knew was material. Manitsas claimed that she tried to cancel her benefits on three separate occasions by calling an "800" number and reporting her increased earnings. However, Manitsas was unable to identify when and with whom she spoke, and produced no evidence to support her claim that she notified the SSA. Also, Manitsas did not complete the yearly post-entitlement follow-up forms sent by the SSA, which instructed her to report any material changes, including return to work. The fact that Manitsas accepted the payments despite her awareness that she was no longer due benefits substantially supports the ALJ's conclusion that she was not "without fault" for the overpayment of benefits.
Additionally, the ALJ also properly considered whether any other circumstances, such as age, intelligence, or physical, mental, educational, or linguistic limitations, supported Manitsas' contention that waiver of overpayment was warranted because she was without fault. The ALJ noted that Manitsas, at the time she was determined disabled, was found to be capable of managing her own finances. The ALJ's finding that there was no evidence in the record or at the hearing that showed that Manitsas was incapable of understanding and complying with her reporting responsibilities was supported by substantial evidence.
For these reasons, the court GRANTS the Commissioner's motion for summary judgment, and affirms the ALJ's denial of Manitsas' waiver request.
CONCLUSION
The court DENIES Manitsas' motion for summary judgment and alternative motion to remand, GRANTS the Commissioner's motion for summary judgment, and AFFIRMS the decision of the ALJ.
This order fully adjudicates the motions listed at numbers fourteen and nineteen of the clerk's docket for this case. The clerk shall close the file.
IT IS SO ORDERED.
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PHYLLIS J. HAMILTON
United States District Judge