Opinion
05 Civ. 8539 (DLC).
August 15, 2006
Michael Joseph J. Barnas New York, NY, For plaintiff.
Leslie A. Ramirez-Fisher United States Attorney's Office Southern District of New York New York, NY, For defendant.
MEMORANDUM OPINION ORDER
Plaintiff Kamla Vaswani ("Vaswani") brings this action to review a decision of the Commissioner of Social Security (the "Commissioner") denying her request that the Social Security Administration ("SSA") waive collection of approximately $6,000 in Supplemental Security Income ("SSI") that Vaswani was allegedly overpaid. The Commissioner moves to dismiss the complaint on the ground that the determination was not a "final decision" within the meaning of the Social Security Act, and the Court therefore lacks jurisdiction over Vaswani's claims. For the following reasons, the Commissioner's motion is denied.
The following facts are taken from the complaint or from documents to which Vaswani refers in her motion papers, except where otherwise noted. Vaswani is a 57-year-old resident of New York City. Because of various medical conditions, including chronic fatigue syndrome, vertigo, and neck pain, she has received SSI benefits on an intermittent basis since 1979. The events at issue here began in September 1986, when plaintiff returned to work after an extended period of unemployment. At some point in 1989, the SSA determined that Vaswani was no longer eligible for SSI benefits and terminated her payments. The SSA also concluded that Vaswani had continued to collect benefits even after her income from gainful employment had rendered her ineligible for the program.
In the complaint, Vaswani states that the period of alleged overpayment ran from August 1987 through January 1989. The Commissioner claims that the period ran from December 1986 through September 1989. The exact dates of the claimed overpayment, however, do not affect the outcome here.
Vaswani again became eligible for SSI benefits on April 30, 1994. In order to recover the overpayment from Vaswani's prior period of disability, the SSA withheld $10,591.00 from Vaswani's benefit payments. This did not cover the entire overpayment, however, and in 1996, the SSA informed Vaswani that she still owed at least $5,975.00. Vaswani made multiple requests over the next 12 months that the SSA waive collection of the overpayment. The SSA made initial denials of her requests, eventually providing her with a personal conference before a claims representative, which Vaswani attended with an attorney. On March 6, 1999, the SSA informed Vaswani by letter that it would not waive collection because the overpayment was partly her fault. The SSA determined that Vaswani "WAS APPRAISED [sic] OF HER REPORTING RESPONSIBILITIES AND SHOULD HAVE NOTIFIED SOCIAL SECURITY THAT SHE HAD RETURNED TO WORK." Vaswani was informed that she could appeal the determination by requesting a hearing before an administrative law judge ("ALJ") within 60 days. Vaswani made no such request.
Vaswani claims that she was informed at another point that the outstanding balance was $6,547.20. And the Commissioner now argues that Vaswani owed $7,382.40. Again, for the purposes of this motion, the precise amount owed is not material.
Nearly four years later, on January 13, 2003, the SSA sent a letter to Vaswani, telling her that her request for a waiver had been denied, and informing her that she was entitled to a personal conference. Vaswani apparently requested such a conference, and on February 4, 2003, the SSA sent Vaswani a second letter, providing her with a conference date and instructing her to bring documentation of her personal finances. After the conference, the SSA again denied Vaswani's request through a letter dated April 9, 2003, which was identical in all respects to the March 6, 1999 letter, except for a $130.20 reduction in the claimed overpayment. This time, however, Vaswani requested a hearing before an ALJ. The hearing was held on February 10, 2004. On April 15, 2004, the ALJ rendered a decision in which the determined that Vaswani was not without fault in receiving the overpayment and was therefore not entitled to a waiver of collection.
It is not at all clear from the face of the documents why the SSA suddenly reinitiated contact with Vaswani after a hiatus of nearly four years, and the Commissioner has provided no such explanation in her motion papers. It would appear, however, that the SSA was either attempting to collect the remaining overpayment directly from Vaswani, who was no longer receiving SSI benefits, or simply made an administrative error and mistakenly sent out a form letter that was applicable to an earlier stage in the proceeding.
Vaswani appealed to the SSA's Appeals Council, which informed her on April 15, 2005 that it intended to vacate the ALJ's decision because Vaswani's request should have been denied on the ground of res judicata, since she had not timely requested a hearing after the March 6, 1999 denial. On June 30, counsel for Vaswani made a submission to the Appeals Counsel arguing thatres judicata should not apply for two reasons: (1) Vaswani was entitled to have the date by which she was required to request a hearing equitably tolled because her various ailments had prevented her from responding to the SSA's letter; and (2) the SSA's actions since 2003 should be construed as having reopened the claim. On July 15, the Appeals Council issued a final order vacating the ALJ's decision and dismissing Vaswani's request for a hearing on the ground of res judicata.
Vaswani's counsel protested this decision, believing that the Appeals Council had not reviewed his submission. He resubmitted his papers and also included: (1) medical records pertaining to the underlying merits of the SSA's decision not to waive collection, and (2) an affidavit from Vaswani claiming that she had never received the March 6, 1999 letter informing her of her right to request a hearing. The Appeals Council vacated its July 15 decision and issued a new decision on August 1, rejecting Vaswani's equitable tolling argument and once again vacating the ALJ's ruling on the ground of res judicata.
Vaswani filed this action on October 5, 2005. In her complaint, she argues that the Appeals Council erred in: (1) failing to equitably toll her time to appeal the March 6, 1999 determination, and (2) applying res judicata without considering her argument that the SSA effectively reopened the claim when it sent her the January 13 letter and allowed her to submit new evidence regarding waiver of collection. Defendant moves to dismiss the complaint on the ground that the Court lacks jurisdiction to review either the Appeals Council's application of res judicata to Vaswani's claim or its rejection of Vaswani's request for equitable tolling. As explained below, the Commissioner's motion is denied.
Discussion
The parties agree that the exclusive basis for this Court's jurisdiction is 42 U.S.C. § 405(g), which provides that
Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow.42 U.S.C. § 405(g) (emphasis supplied). The issue here is whether either of the Appeals Council's determinations constitute a "final decision" within the meaning of the section.
A. Equitable Tolling
Pursuant to 20 C.F.R. § 404.933(c), the SSA has discretion to consider an applicant's request for a hearing before an ALJ, even if it is untimely made:
If you have a right to a hearing but do not request one in time, you may ask for more time to make your request. . . . If you show that you had good cause for missing the deadline, the time period will be extended.20 C.F.R. § 404.933(c). As defendant correctly notes, however, determinations made under this section are not final decisions, and therefore cannot be appealed to the United States District Court. See Dietsch v. Schweiker, 700 F.2d 865, 867 (2d Cir. 1983) ("The Appeals Council may also extend the filing time on a showing of good cause, . . . but a refusal to do so, like a dismissal of an untimely request, is not subject to judicial review."). This Court therefore lacks jurisdiction to address Vaswani's claim that the Appeals Council erred in refusing to apply the doctrine of equitable tolling to her request for a hearing.
In any event, Vaswani has abandoned this ground for appeal, having not addressed it in her opposition to the instant motion.
B. Res Judicata
Typically, the Appeals Council's invocation of res judicata in denying a claim is similarly unreviewable. See Byam v. Barnhart, 336 F.3d 172, 179 (2d Cir. 2003) ("As a general rule, federal courts lack jurisdiction to review an administrative decision not to reopen a previous claim for benefits."). As the Supreme Court has recognized,
[A]n interpretation [of the Social Security Act] that would allow a claimant judicial review simply by filing and being denied a petition to reopen his claim would frustrate the congressional purpose, plainly evidenced in [Section 405(g)], to impose a 60-day limitation upon judicial review of the Secretary's final decision on the initial claim for benefits.Califano v. Sanders, 430 U.S. 99, 108 (1977). Therefore, if the ALJ had rejected Vaswani's request because of res judicata, and the Appeals Council had upheld that decision, its determination would not have been reviewable.
Plaintiff's argument that the ALJ could not have appliedres judicata before conducting a hearing is unavailing. The Second Circuit has held that administrative res judicata applies to "adverse determinations which have become final under the regulations." Thompson v. Richardson, 452 F.2d 911, 913 (2d Cir. 1971) (emphasis supplied). There is no indication that a hearing is required. In fact, the Second Circuit's holdings clearly contemplate situations in which res judicata applies in the absence of a hearing. See, e.g., Byam, 336 F.3d at 180 ("The Commissioner's decision not to reopen a prior determination is not a final decision for the purposes of § 405(g), and thus is generally unreviewable even if there was a hearing in the case.") (emphasis supplied).
That is not, however, what happened here. Instead, the ALJ reviewed the entire record, took testimony at a hearing, and rendered a decision on the merits regarding Vaswani's request for a waiver from collection of the overpayment. Under these circumstances, the Second Circuit has held that res judicata cannot later be retroactively applied:
If the Commissioner reviews the entire record and renders a decision on the merits, the earlier decision will be deemed to have been reopened, and any claim of administrative res judicata to have been waived and thus, the claim is subject to judicial review.Byam, 336 F.3d at 180 (citation omitted). The Commissioner argues that the ALJ's actions did not reopen Vaswani's case, since the Appeals Council's ruling "supercede[d]" the ALJ's decision. Because this argument would render meaningless the Second Circuit's holding in Byam that reliance on res judicata is waived by a new administrative decision on the merits, it cannot be credited. This Court therefore has jurisdiction to review the Appeals Council's decision.
Although Byam is directly relevant to the issues at hand, the Government did not cite the decision, much less explain why it should not govern the outcome here.
Conclusion
For the foregoing reasons, the Commissioner's motion to dismiss the complaint is denied.
SO ORDERED.