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Ernest A. Cost v. Social Security Administration

March 15, 2011

ERNEST A. COST, PLAINTIFF,
v.
SOCIAL SECURITY ADMINISTRATION, DEFENDANT.



The opinion of the court was delivered by: Richard W. Roberts United States District Judge

MEMORANDUM OPINION AND ORDER

Pro se plaintiff Ernest Cost brings a claim against the Social Security Administration ("SSA") under the Social Security Act ("Act"), 42 U.S.C. §§ 301 et seq., seeking judicial review of the SSA's determination of his retirement insurance benefits on the ground that the SSA improperly applied the windfall elimination provision to reduce his benefits. SSA has filed a motion to dismiss, arguing that Cost has failed to exhaust his administrative remedies. Because SSA has not provided sufficient evidence that Cost did not request an administrative hearing, SSA's motion to dismiss, converted to one for summary judgment, will be denied. The parties will be ordered to show cause in writing why the case should not be remanded to the SSA so that the parties can avail themselves of the full administrative review process.

BACKGROUND

In August 2005, Cost applied for Retirement Insurance Benefits under Title II of the Act. (Compl. ¶ 1; Def.'s Mem. in Supp. of Mot. to Dismiss ("Def.'s Mem."), Decl. of Howard Kelly

¶ 3(a).) SSA sent him an initial determination, stating that he would receive benefits of $335 per month. (Compl. ¶ 3, Ex. 3.) Cost sought reconsideration, asserting his entitlement to nearly double the determined monthly benefit. (Id. ¶¶ 3-4, Ex. 4.) On July 10, 2007, SSA issued a reconsideration determination, stating that the initial determination subjected Cost's benefits to the "windfall elimination provision," correctly reducing Cost's benefits. (Id. ¶ 5, Ex. 5.) Cost alleges that he mailed a request for a hearing application form to the SSA on August 22, 2007. (Id. ¶ 6, Ex. 6.) He further alleges that after SSA responded to his letter by faxing him the form, he mailed the completed form to the SSA on September 2, 2007 and has not since received a response. (Compl. ¶ 7; Pl.'s Opp'n to Def.'s Mot. to Dismiss ("Pl.'s Opp'n"), Ex. at 5-7.*fn1 ) SSA's computer records do not show that SSA received Cost's request for a hearing. (Def.'s Mem. at 4, Decl. of Howard Kelly ¶ 3(c) ("The computerized records of the Office of Disability Adjudication and Review do not show that a request for a hearing was filed or received [.]"), Ex. 3.) After receiving no response from the SSA, Cost filed suit on December 24, 2008, alleging that the SSA erred by applying the windfall elimination provision.

DISCUSSION

A plaintiff may seek judicial review in a district court of a final decision of the Commissioner of Social Security. 42 U.S.C. § 405(g). The Social Security Act does not define the term "final decision," but it empowers the Commissioner of Social Security to set out the procedures for obtaining a final decision through regulations. See 42 U.S.C. § 405(a); Weinberger v. Salfi, 422 U.S. 749, 766 (1975). When a claimant applies for social security benefits, the Commissioner makes an initial determination as to the claimant's entitlement. 20 C.F.R. § 404.902. If the claimant is dissatisfied with the initial determination, he may seek reconsideration by filing a written request within sixty days. 20 C.F.R. §§ 404.907, 404.909(a)(1). The reconsideration determination is binding unless a claimant requests a hearing before an administrative law judge ("ALJ") within sixty days of receiving notice of the reconsideration determination.*fn2 20 C.F.R. §§ 404.921(a), 404.933(b)(1). If the claimant is dissatisfied with the ALJ's hearing decision, he may request review by the SSA's Appeals Council within sixty days of receiving notice of the hearing decision. 20 C.F.R. §§ 404.967, 204.968(a)(1). A claimant may seek an extension out of time of any of these deadlines by showing good cause in writing. 20 C.F.R. §§ 404.909(b), 404.933(c), 404.968(b). The Appeals Council's decision is considered final, and a claimant may seek judicial review of that decision in district court. 20 C.F.R. § 404.981; Califano v. Sanders, 430 U.S. 99, 101-02 (1977). SSA has filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that Cost failed to exhaust his administrative remedies because he filed his complaint before receiving a hearing decision from an ALJ or review by the Appeals Council. (Def.'s Mem. at 3.)

The phrase "exhaustion of remedies" refers to two distinct legal concepts. Non-jurisdictional exhaustion "is a judicially created doctrine requiring parties who seek to challenge agency action to exhaust available administrative remedies before bringing their case to court." Avocados Plus Inc. v. Veneman, 370 F.3d 1243, 1247 (D.C. Cir. 2004); see also Salfi, 422 U.S. at 765 (justifying non-jurisdictional exhaustion as preventing C.F.R. §§ 404.923, 404.924(d). Cost is challenging not the constitutionality of the windfall elimination provision but rather the provision's applicability to him. (See Compl. ¶ 3.) Thus, he was not entitled to expedited review.

"interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review"). Jurisdictional exhaustion, on the other hand, entails Congress predicating judicial review on a litigant's initial resort to the administrative process. Id.; cf. Arbaugh v. Y & H Corp., 546 U.S. 500, 516 (2006) ("[W]hen Congress does not rank a statutory limitation on [the statute's] coverage as jurisdictional, courts should treat the restriction as non-jurisdictional in character."). A court may exercise its discretion to excuse compliance with a non-jurisdictional requirement, but not with a jurisdictional requirement. Triad at Jeffersonville I, LLC v. Leavitt, 563 F. Supp. 2d 1, 16 (D.D.C. 2008).

The Supreme Court has construed 42 U.S.C. § 405(g) as having jurisdictional and non-jurisdictional exhaustion components. The requirement that a plaintiff must first present his claim to the agency is jurisdictional and cannot be waived, while the requirement that the plaintiff must complete the agency review process is non-jurisdictional and may be waived. See Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 23 (2000) (noting that "individual hardship may be mitigated . . . through excusing a number of the steps in the agency process, though not the step of presentment of the matter to the agency"); Bowen v. City of New York, 476 U.S. 467, 483 (1986) ("'The waivable element is the requirement that the administrative remedies prescribed by the Secretary be exhausted. The non-waivable element is the requirement that a claim for benefits shall have been presented to the Secretary.'" (quoting Mathews v. Eldridge, 424 U.S. 319, 328 (1976))). A motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction is inappropriate where a defendant claims that a plaintiff failed to comply with only the non-jurisdictional exhaustion requirement. See Hall v. Sebelius, 689 F. Supp. 2d 10, 22 (D.D.C. 2009) (noting that "dismissal under Rule 12(b)(1) for failure to exhaust is inappropriate . . . inasmuch as requirements for exhaustion as specified by the Social Security Act can be tolled or waived due to equitable considerations"). SSA argues that Cost did not exhaust the non-jurisdictional requirements that his claim be heard by an ALJ and that he receive a decision from the Appeals Council. (Def.'s Mem. at 3.) Therefore, its motion to dismiss will be construed as one under Rule 12(b)(6) for failure to state a claim.

When "matters outside the pleadings are presented to and not excluded by the court" on a Rule 12(b)(6) motion, "the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d). A motion may be treated as one for summary judgment even if the parties have not been provided with notice or an opportunity for discovery if they have had a reasonable opportunity to contest the matters outside the pleadings such that they are not taken by surprise. See Highland Renovation Corp. v. Hanover Ins. Group, 620 F. Supp. 2d 79, 82 (D.D.C. 2009). Because both parties have cited documents or provided evidence outside the pleadings with respect to the issue of exhaustion, the motion will be treated as one for summary judgment under Rule 56. See Augustus v. Locke, 699 F. Supp. 2d 65, 69 n.3 (D.D.C. 2010) (converting motion to dismiss for failure to exhaust administrative remedies to a motion for summary judgment).

Summary judgment may be granted when the moving party demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). In considering a motion for summary judgment, a court is to draw all justifiable inferences from the evidence in favor of the non-movant. Cruz-Packer v. Dist. of Columbia, 539 F. Supp. 2d 181, 189 (D.D.C. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). The relevant inquiry "is the threshold inquiry of determining whether there is the need for a trial ---- whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Liberty Lobby, 477 U.S. at 250. A genuine issue exists where the "evidence is such that a reasonable jury could return a verdict for the non-moving party[,]" as opposed to where the evidence is "so one-sided that one party must prevail as a matter of law." Id. at 248, 252.

SSA contends that it did not receive Cost's hearing request because he mailed it to the wrong address. (Def.'s Mem. at 4.) Cost addressed his August 22, 2007 letter asking for a form HA-501-U5 ---- the ...


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