United States District Court, District of Columbia
MEMORANDUM OPINION RE DOCUMENT NO. 12
RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE
in Part Defendants' Motion to Dismiss
Social Security Administration applies a provision of federal
law to reduce the Social Security benefits of individuals who
also receive pension benefits from a foreign government. For
years, Steven Rosell and Frances Michener were among those
affected by this reduction. Believing it to be unlawful, they
brought this putative class action against the agency and its
Commissioner on behalf of individuals whose benefits have
been similarly lowered. But as the Court will explain below,
venue is improper in this district under the Social Security
Act. The Court therefore grants Defendants' motion to
dismiss in part and transfers the case to the appropriate
forum, the Northern District of California.
brief way of background, Title II of the Social Security Act,
42 U.S.C. §§ 401-34, “provides old-age,
survivor, and disability benefits to insured individuals
irrespective of financial need.” Bowen v.
Galbreath, 485 U.S. 74, 75 (1988). To support payment of
those benefits, many workers in the United States are taxed.
“The expectation is that, having contributed to the
national economy while actively employed, those workers will
later become eligible beneficiaries” of the Social
Security system, rather than supporters of it. Eshel v.
Comm'r of IRS, 831 F.3d 512, 514 (D.C. Cir. 2016).
Certain jobs are exempt from Social Security taxes, however.
“This non-covered employment is often federal
employment that, prior to 1984, was exempt from Social
Security taxes because federal employees contributed to the
federal civil service pension which was ‘designed to
take the place both of social security and a private pension
plan for workers who remain[ed] in [federal] employment
throughout their careers.” Petersen v. Astrue,
633 F.3d 633, 634 (8th Cir. 2011) (second alteration in
original) (quoting H.R. Rep. No. 98-25, at 22 (1983)).
the existence of non-covered employment, the Social Security
Act contains a “windfall elimination provision”
(“WEP”), see 42 U.S.C. § 415(a)(7),
which “seeks to preserve the progressive nature of the
Social Security system by ensuring that the formula [the
Social Security Administration] uses to calculate benefits
does not advantage high-income workers who split their
careers between covered and non-covered employment over those
who paid Social Security taxes for their entire careers,
” Hawrelak v. Colvin, 667 Fed.Appx. 161, 162
(7th Cir. 2016). To accomplish that goal, the WEP
“reduces the benefits received by certain individuals
who also receive pensions for work that did not require them
to pay social security taxes.” Id. Thus, with
respect to the above-mentioned pre-1984 federal employees,
the WEP requires that benefits be calculated under a modified
formula that accounts for their civil service pension
benefits. See Petersen, 633 F.3d at 635.
is potentially relevant to other individuals too, though. The
claims in this case result from its application to
individuals who, in addition to Social Security benefits,
also receive pension benefits from a foreign government based
on work performed in that foreign county. Plaintiff Frances
Michener originally brought the case with her husband, Steven
Rosell, but after Rosell passed away, she was substituted as
the sole Plaintiff, proceeding both in her individual
capacity and as executor of her late husband's estate.
See Order Granting Mot. to Substitute, ECF No. 20.
Rosell worked in Canada from 1976 to 1990 and in the United
States from 1990 to 2012, so from 2013 until his death, he
received benefits from both the Canada Pension Plan and the
U.S. Social Security system. See Compl. ¶¶
1, 25-26, ECF No. 1. Michener, meanwhile, received a spousal
benefit based on her husband's Social Security
entitlement. Id. ¶ 2.
Social Security Administration, however, consistently reduced
Rosell's and Michener's benefit awards under the WEP
to account for Rosell's Canadian pension. Id.
¶¶ 1-2. Michener's complaint raises three
challenges to those reductions. Count One alleges that the
reductions violate the terms of the WEP itself; Count Two
claims that the reductions violate the Social Security
Administration's implementing regulations; and Count
Three claims that the reductions violate a bilateral
agreement between the United States and Canada that governs
the payment of pension benefits. See Id.
¶¶ 53-67. Michener also asks that the Court certify
a class of all individuals whose Social Security benefits or
spousal benefits have been similarly reduced under the WEP
based on receipt of pension benefits from another country
with which the United States has entered into a bilateral
agreement like the one with Canada. See Mem. Supp.
Mot. to Certify Class at 8, ECF No. 9.
Social Security Administration's response is that
Michener's complaint should be dismissed for improper
venue. This objection is grounded in two provisions of the
Social Security Act. The first, 42 U.S.C. § 405(h),
states that “[n]o action against the United States, the
Commissioner of Social Security, or any officer or employee
thereof shall be brought under [28 U.S.C. §§ 1331
or 1346] to recover on any claim arising under this
subchapter.” This provision thus “precludes
federal-question jurisdiction in an action challenging [the]
denial of claimed [Social Security] benefits.”
Mathews v. Eldridge, 424 U.S. 319, 327 (1976). And
it means that the “sole avenue for judicial
review” in such a case is the Social Security Act's
specific judicial review provision, 42 U.S.C. § 405(g).
Heckler v. Ringer, 466 U.S. 602, 615 (1984).
judicial review provision is the second provision relevant
here. It contains two requirements that any plaintiff must
satisfy to bring suit. One is an administrative exhaustion
requirement-part of which is waivable, but part of which is
jurisdictional and nonwaivable. See Eldridge, 424
U.S. at 328; 42 U.S.C. § 405(g) (“Any 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.”). The other is a special venue requirement,
which states that the “action shall be brought in the
district court of the United States for the judicial district
in which the plaintiff resides, or has his principal place of
business, or, if he does not reside or have his principal
place of business within any such judicial district, in the
United States District Court for the District of
Columbia.” 42 U.S.C. § 405(g).
present purposes, there is no dispute that Rosell and
Michener complied with the exhaustion requirement. The venue
requirement, however, poses a potential problem. “[T]he
law is clear that in determining whether venue for a putative
class action is proper, courts are to look only at the
allegations pertaining to the named representatives.”
Murdoch v. Rosenberg & Assocs., LLC, 875
F.Supp.2d 6, 11 (D.D.C. 2012) (quoting Cook v. UBS Fin.
Servs., Inc., No. 05 Civ. 8842(SHS), 2006 WL 760284, at
*6 n.2 (S.D.N.Y. Mar. 21, 2006)). And here, Michener resides
in San Rafael, California, see Compl. ¶ 2,
located in the Northern District of California. For venue to
be proper in this Court, then, Michener must identify some
reason that § 405(g) and § 405(h) do not apply to
is unable to do that. The Supreme Court has construed §
405(h) “quite broadly to include any claims in which
‘both the standing and the substantive basis for the
presentation' of the claims is the Social Security
Act.” Ringer, 466 U.S. at 615 (quoting
Weinberger v. Salfi, 422 U.S. 749, 761 (1975)).
Michener's claims easily fall within that category. As
already noted, Count One is grounded entirely in the WEP,
which is contained within the Social Security Act. Count Two
claims a violation of agency regulations, which were
promulgated under authority granted by the Act. See
20 C.F.R., ch. III, pt. 404, subpt. A (providing that
authority for regulations is various provisions of the Social
Security Act). And even Count Three, the one based on the
bilateral agreement with Canada, falls within §
405(h)'s scope because such international agreements are
themselves products of the Act. See 42 U.S.C. §
433(a) (“The President is authorized . . . to enter
into agreements establishing totalization arrangements
between the social security system established by this
subchapter and the social security system of any foreign
Michener contends that she is not bound by §
405(g)'s venue requirement because she says that these
claims are collateral to any individual benefits
determination. Citing Vencor Nursing Centers, L.P. v.
Shalala, 63 F.Supp.2d 1, 6 (D.D.C. 1999), she argues
that such collateral claims are governed by the general venue
statute, 28 U.S.C. § 1391. But the Court respectfully
disagrees with Vencor Nursing. Critical to that
case's venue holding was its conclusion that §
405(g) did not apply to collateral claims at all and that
jurisdiction over such claims was instead authorized by the
federal-question statute, 28 U.S.C. § 1331. This
reasoning is irreconcilable with the Supreme Court's
decision in Mathews v. Eldridge, though, which makes
clear that the collateral nature of a claim has relevance
only for determining whether the non-jurisdictional component
of § 405(g)'s exhaustion requirement should be
claim at issue in Eldridge was a challenge to the
Social Security benefits termination procedure: the plaintiff
claimed that the due process clause afforded him the right to
an evidentiary hearing before his benefits were terminated.
See 424 U.S. at 325-26. This constitutional
challenge, the Supreme Court held, was “entirely
collateral” to the plaintiff's “substantive
claim of entitlement” under the Social Security Act.
Id. at 330. The plaintiff therefore did not need to
exhaust “the full set of internal-review
procedures” provided by the agency. Id. But in
waiving that part of the exhaustion requirement, the Court
maintained that jurisdiction still existed under §
405(g)-not § 1331. See Id. at 332 (“We
conclude that the denial of Eldridge's request for
benefits constitutes a final decision for purposes of §
405(g) jurisdiction over his constitutional claim.”);
id. at 332 n.12 (“[J]urisdiction in the
District Court was proper under [§] 405(g).”).
jurisdictional conclusion makes complete sense in light of
the fact that § 405(h), again, precludes
federal-question jurisdiction over “any claim arising
under” the Social Security Act-a class of claims that
is “quite broad” and would seem to include
collateral ones. Ringer, 466 U.S. at 615. Thus, in
the words of the Supreme Court, “an exception to
exhaustion” applies to collateral claims-but just an
exception and nothing more. Id. at 618. Indeed,
other than Vencor Nursing and perhaps one additional
outlier, see Libbie Rehabilitation Ctr., Inc. v.
Shalala, 26 F.Supp.2d 128, 130-31 (D.D.C. 1998),
courts appear to have consistently recognized that whether a
claim is collateral has relevance only for ...