Wicks v. Colvin , 573 F. App'x 803 ( 2014 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT August 11, 2014
Elisabeth A. Shumaker
Clerk of Court
JEANETTE A. WICKS,
Plaintiff-Appellant,
v. No. 13-1542
(D.C. No. 1:12-CV-01510-RBJ)
CAROLYN W. COLVIN, Acting (D. Colo.)
Commissioner of Social Security,
Defendant-Appellee.
ORDER AND JUDGMENT*
Before TYMKOVICH, HOLMES, and McHUGH, Circuit Judges.
Jeanette A. Wicks, proceeding pro se, appeals the district court’s judgment
affirming the Social Security Commissioner’s application of the Government Pension
Offset (“GPO”) provision of the Social Security Act (the Act) to reduce the amount
of Ms. Wicks’ social security survivor’s benefit throughout her lifetime. Exercising
jurisdiction under 28 U.S.C. § 1291 and 42 U.S.C. § 405(g), we affirm.
*
The parties have not requested oral argument. Having examined the briefs and
appellate record, the panel concludes that oral argument would not materially assist
the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G).
Accordingly, the case is ordered submitted without oral argument. This order and
judgment is not binding precedent, except under the doctrines of law of the case, res
judicata, and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
I. Background
For many years, Ms. Wicks worked for various state and local organizations
covered by the Public Employees’ Retirement Association of Colorado (“PERA”).
During this PERA-covered employment, Ms. Wicks was exempt from paying Social
Security taxes.
In March 1996, after leaving PERA-covered employment, Ms. Wicks received
a lump sum payment of her PERA retirement benefits in the amount of $22,144.08,
which included Ms. Wicks’ contributions and matched contributions from her
employers. Ms. Wicks later returned to PERA-covered employment for several
years. In January 2006, she received a second lump sum payment from PERA for
$4,440.82, which also included matched employer contributions.
Ms. Wicks began receiving a social security retirement insurance benefit (SSI
retirement benefit) in March 2006. The Social Security Administration (the Agency)
did not reduce Ms. Wicks’ SSI retirement benefit to reflect the PERA lump sum
payments. In June 2009, following the death of her former husband, Ms. Wicks
applied for a social security survivor’s benefit. At that time, the Agency informed
Ms. Wicks that the GPO applied and her survivor’s benefit would be reduced by the
prorated amount of the PERA lump sum pension payments.1 After an unsuccessful
1
The Agency also informed Ms. Wicks that her separate social security
retirement benefit should have been reduced based upon the Windfall Elimination
Provision (WEP) of the Act. Because Ms. Wicks has not challenged the Agency’s
(continued)
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request for reconsideration, Ms. Wicks sought a hearing before an Administrative
Law Judge (“ALJ”). At that hearing in July 2011, Ms. Wicks waived her right to
representation and testified on her own behalf. Ms. Wicks’ efforts were successful,
in part.
A. The ALJ’s Decision
The ALJ determined that the GPO provision applied to Ms. Wicks’ survivor’s
benefit, but only with respect to the January 2006 lump sum payment. In reaching
his conclusion, the ALJ first prorated the two lump sum pension payments to a
monthly value and then calculated their extinguishment dates according to actuarial
tables in the Agency’s Program Operations Manual System (“POMS”). For example,
because Ms. Wicks was 55 at the time of the March 1996 lump sum payment, the
ALJ adopted the actuarial value of 140.9 to prorate that payment. See POMS GN
02608.400(D)(3)(b). Specifically, the ALJ divided the $22,144.08 received in the
1996 lump sum by that 140.9 figure to arrive at the monthly value of the March 1996
PERA benefit. In addition to using the actuarial value to prorate the lump sum
payments to a monthly value, the ALJ used it to calculate the date upon which the
lump sum amount would be extinguished. Assuming that the “end of the prorated
period for the first lump sum, as indicated by the actuarial charts, is 140.9 months
after receipt, or December 1, 2007,” Admin. R. at 25 (emphasis added), the ALJ
application of the WEP on appeal, we do not address that issue in our recitation of
the facts or analysis.
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concluded the March 1996 lump sum payment “was deemed extinguished” before
Ms. Wicks became entitled to survivor’s benefits in June 2009. See id. at 25-26.
Next, the ALJ determined that the POMS guidelines were ambiguous as to
whether the GPO applied when the prorated period ended before the entitlement to
benefits commenced. He therefore, resolved the ambiguity in favor of Ms. Wicks
and held the March 1996 lump sum payment was not subject to the GPO. In contrast,
because the January 2006 lump sum payment was not extinguished prior to
Ms. Wicks’ entitlement to survivor’s benefits, the ALJ concluded it was subject to
the GPO throughout Ms. Wicks’ lifetime.
B. The Appeals Council Decision
Concerned that the ALJ’s decision may include an error of law, the Social
Security Appeals Council notified Ms. Wicks that it was reviewing the decision on its
own motion. See 20 C.F.R. § 404.969(a); id. § 404.970(a)(2). The Appeals Council
disagreed with the ALJ’s conclusion that the GPO did not apply to the March 1996
lump sum payment. It explained that where the relevant pension plan does not
specify the payment period, Agency policy is to prorate the lump sum as if it were to
be received monthly over a lifetime, which results in a corresponding lifetime
reduction of the individual’s monthly survivor’s benefit. See 20 C.F.R.
§ 404.408a(a); POMS GN 02608.400(A); see also POMS GN 02608.400(D)(3)(b).
Accordingly, the Appeals Council ordered that Ms. Wicks’ monthly benefits be
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recalculated. It did not address, and, therefore, did not disturb the ALJ’s finding
regarding application of the GPO to the January 2006 lump sum pension payment.
Ms. Wicks sought judicial review of the Appeals Council’s decision, and the
district court affirmed. See Williams v. Bowen, 844 F.2d 748, 749 (10th Cir. 1988)
(holding that Appeals Council’s decision is the Commissioner’s final decision);
20 C.F.R. § 404.981. She now appeals.
II. Discussion
A. Standard of Review
“We review the Commissioner’s decision to determine whether the factual
findings are supported by substantial evidence in the record and whether the correct
legal standards were applied.” Watkins v. Barnhart, 350 F.3d 1297, 1299 (10th Cir.
2003). “Substantial evidence is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion. It requires more than a scintilla, but less
than a preponderance.” Lax v. Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007) (internal
citation and quotation marks omitted). “[W]e will not reweigh the evidence or
substitute our judgment for the Commissioner’s.” Id. (internal quotation marks
omitted).
Because Ms. Wicks proceeds pro se, we liberally construe her filings.
See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). We will not, however,
serve as her advocate. See id.-5-
B. Analysis
As best we can discern, Ms. Wicks raises the following challenges to the
Commissioner’s decision: (1) the Appeals Council erred in determining that the
March 1996 prorated lump sum payment did not have a finite ending date after which
the GPO would no longer reduce her survivor’s benefit; (2) the Agency acted
contrary to its Congressional authority in adopting rules allowing the reduction of
social security benefits throughout the beneficiary’s lifetime based on lump sum
retirement payments from non-covered sources; and (3) the Agency violated her
federal constitutional rights to due process and equal protection. Addressing these
issues in turn, we first conclude that because the PERA retirement plan did not
identify a specific payment period, the Agency correctly imposed the GPO for as
long as Ms. Wicks is entitled to the benefit—her lifetime. Next, we hold the Agency
acted within the authority delegated to it by Congress in adopting rules governing the
lifetime application of the GPO to lump sum retirement payments made for
unspecified time periods. Finally, we reject Ms. Wicks’ constitutional claims.
1. Duration of the GPO
The GPO reduces the monthly Social Security benefits, including the
survivor’s benefit, of an individual who is also entitled to a government pension
based on non-covered employment. See 42 U.S.C. § 402(k)(5)(A); 20 C.F.R.
§ 404.408a(a). Non-covered employment is employment during which the worker’s
wages are exempt from Social Security taxes. See Stroup v. Barnhart, 327 F.3d
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1258, 1259 (11th Cir. 2003). Because Ms. Wicks did not pay social security taxes on
the wages received from her government employers, the PERA lump sum payments
are based on non-covered employment.
Therefore, the GPO applies and reduces Ms. Wicks’ monthly survivor’s
benefit by “two-thirds of the amount of any monthly periodic benefit” payable based
on non-covered earnings. See 42 U.S.C. § 402(k)(5)(A); see also 20 C.F.R.
§ 404.408a(d). The Act defines “Periodic benefit” to include “a benefit payable in a
lump sum if it is a commutation of, or a substitute for, periodic payments.”
42 U.S.C. § 402(k)(5)(C). There is no dispute that the lump sum PERA payments
were a commutation of or substitute for periodic pension payments, and, thus, a
periodic pension benefit under the Act. The Act, together with the Agency
regulations and guidelines, provides instruction on converting the lump sum periodic
benefit into a monthly periodic benefit for purposes of the GPO.
When an individual’s pension is paid in a lump sum, the Act provides that it
“shall be allocated on a basis equivalent to a monthly benefit (as determined by the
Commissioner . . .).” Id.; see also 20 C.F.R. § 404.408a(a) (“If the government
pension is not paid monthly or is paid in a lump-sum, we will determine how much
the pension would be if it were paid monthly and then reduce the monthly Social
Security benefit accordingly.”). The regulations further explain, “[t]he number of
years covered by a lump-sum payment, and thus the period when the Social Security
benefit will be reduced,” varies depending on the terms of the particular pension
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plan. 20 C.F.R. § 404.408a(a). The terms of the pension plan dictate the duration of
the reduction when they clearly indicate the lump sum payment is for a specified
period. Id. When the payment period is not identified in the pension plan, however,
the Agency will determine the reduction period on an individual basis. Id.The method of determining the reduction period for a lump sum payment, and
arriving at a monthly amount on an individual basis, is explained in the Agency’s
POMS guidelines.2 POMS GN 02608.400(D)(3) provides that “[w]hen the entire
pension is paid in a lump sum, the amount may represent a specified period of time or
a ‘lifetime.’” Where, as here, the pension-paying agency – i.e. PERA – does not
itself prorate the lump sum to establish a monthly amount for GPO purposes, the
Agency prorates it in accordance with its POMS guidelines. See id. In such
circumstances, POMS GN 02608.400(D)(3)(b) directs that the lump sum be prorated
in the same manner as a lump sum representing payments for a “lifetime.” The
method for converting a “lifetime” lump sum payment to a monthly amount is to
divide the lump sum amount by an “actuarial value,” as identified in the POMS table
that corresponds to the worker’s age on the date of the lump sum award. See id. And
because the lump sum is prorated monthly over a lifetime, the individual’s monthly
2
“The [agency’s] policy guidelines are provided in the [POMS], which is a set
of policies issued by the [agency] ‘to be used in processing claims.’” Ramey v.
Reinertson, 268 F.3d 955, 964 (10th Cir. 2001) (quoting McNamar v. Apfel, 172 F.3d
764, 766 (10th Cir. 1999)). The POMS represents the agency’s own interpretation of
its regulations and the statutes governing its operations. See Lopes v. Dep’t of Soc.
Servs., 696 F.3d 180, 186 (2d Cir. 2012). The POMS are entitled to deference unless
they are arbitrary, capricious, or contrary to law. McNamar, 172 F.3d at 766.
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survivor’s benefit is also reduced throughout her life. See POMS GN 02608.400(A)
(providing that lump sum payments made for unspecified periods be “prorated as
though it is received monthly over a lifetime”). See also POMS GN
02608.400(D)(3)(b). The Agency’s application of the GPO to Ms. Wicks’ survivor’s
benefit throughout her lifetime is consistent with these guidelines.3
The Appeals Council’s application of the relevant statute, regulations, and
POMS provisions was not arbitrary, capricious, or contrary to law and we therefore
defer to the Agency’s interpretation. See McNamar v. Apfel, 172 F.3d 764, 766
(10th Cir. 1999). The Appeals Council applied the correct legal standards and its
decision is supported by substantial evidence.4 Consequently, we do not disturb its
decision.
3
In support of her contrary position, Ms. Wicks relies on Section (C)(5) of
POMS RS 00605.360, entitled “WEP Applicability,” which in its current version
provides that WEP application ends “when . . . the proration of a lump sum payment
based on a specified period ends.” A prior version relied on by Ms. Wicks states that
WEP application ends “when . . . the proration of lump sum payment ends.” See
Dist. Ct. R. at 21. Here, the PERA lump sum payments were not based on a specified
period.
4
The same analysis applies to the January 2006 lump sum pension payment,
which the Appeals Council did not address, and by its silence did not disturb. Like
the March 1996 lump sum payment, PERA did not specify that the January 2006
payment represented a specified period of time. The January 2006 lump sum
payment is therefore prorated as if paid over a lifetime, which results in a
corresponding lifetime reduction of Ms. Wicks’ monthly survivor’s benefit.
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2. Congressional Authority
Ms. Wicks next challenges the Agency’s adoption of the pertinent POMS
provisions, arguing that the Commissioner has not “been given congressional
authority to by-pass congress and the President and rewrite the statu[t]es.”5 Aplt.
Opening Br. at 4. While we agree with Ms. Wicks’ general premise, we are not
convinced the Agency has exceeded its authority. Congress delegated to the
Commissioner full power and authority to make regulations and establish procedures,
not inconsistent with the Social Security Act, which are necessary to implement the
provisions of the Act. See 42 U.S.C. § 405(a). In applying the GPO to periodic
benefits paid on other than a monthly basis – i.e., a lump sum payment – the Act
provides that such a periodic benefit “shall be allocated on a basis equivalent to a
monthly benefit (as determined by the Commissioner of Social Security).”
Id. § 402(k)(5)(C) (emphasis added). Accordingly, Congress has given the
Commissioner the express authority to administer the GPO in a manner determined
by the Commissioner.
Our review of the Agency’s “interpretation of a statute or regulation it
administers is highly deferential.” McNamar, 172 F.3d at 766. The Agency has
adopted guidelines for the application of the GPO in situations where the period
covered by a lump sum payment is unspecified by the pension plan. Nothing in those
5
We interpret Ms. Wicks’ references to “statutes” to mean the applicable POMS
provisions.
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guidelines directly contradicts the terms of the Act. Nor are we convinced that the
Commissioner has applied the GPO in a manner that is arbitrary, capricious, or
contrary to law. As a result, we reject Ms. Wicks’ argument that the Agency
exceeded its authority or acted contrary to law in applying the GPO.
3. Due Process and Discrimination Claims
Finally, Ms. Wicks complains that her constitutional rights have been violated
in two respects. First she asserts she was denied her right to due process because the
Appeals Council failed to respond promptly to her requests for extensions of time,
failed to provide her with requested information, fabricated facts, and denied her the
opportunity to appear before the Appeals Council. Second, she raises an equal
protection claim, arguing that the GPO provision treats government retirees
discriminatorily in comparison with private retirees.
Ms. Wicks’ complaints do not constitute a denial of due process. “[D]ue
process requires notice and a meaningful opportunity to be heard.” Standard Indus.,
Inc. v. Aquila, Inc. (In re C.W. Mining Co.), 625 F.3d 1240, 1244 (10th Cir. 2010).
Ms. Wicks appeared and had an opportunity to be heard before the ALJ. When the
Appeals Council notified Ms. Wicks of its intent to review the ALJ’s decision, it
further advised her that she could provide additional evidence and request to be
present for oral argument. Although the Appeals Council ultimately denied her
request to appear and argue, it acted within its discretion in doing so. See 20 C.F.R.
§ 404.976(c). Ms. Wicks was permitted to argue and to submit written materials to
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the ALJ and that record was available to the Appeals Council. Thus, the decision to
limit her participation at the Appeals Council to the submission of written materials
was not a deprivation of Ms. Wicks’ opportunity to be heard. Having considered the
substance of Ms. Wicks’ other complaints we are convinced they also do not rise to
the level of a due process violation.6
Finally, Ms. Wicks appears to raise an equal protection claim, arguing that the
GPO did not “equalize” government retirees and private retirees and instead
discriminated against retirees, like Ms. Wicks, who did not pay social security taxes.
In particular, she claims that if the GPO remains in effect after the full amount of the
lump sum payments has been extinguished through reductions in her social security
benefits, she will receive a reduction in benefits greater than the PERA retirement
benefits she received based on non-covered employment. This result, she claims,
treats government retirees less favorably than private retirees. Reviewing
Ms. Wicks’ claim de novo, see White v. Colorado, 157 F.3d 1226, 1232 (10th Cir.
1998), we conclude the GPO provision does not violate the Equal Protection Clause.
6
Ms. Wicks argues that the Appeals Council failed to consider new evidence
that she submitted to it for its review of the ALJ’s decision. The Appeals Council’s
decision stated that “[n]o comments or additional evidence have been received.”
Admin. R. at 7. The Appeals Council must consider evidence submitted with a
request for review if the evidence is new, material, and relates to a period on or
before the date of the ALJ’s decision. Threet v. Barnhart, 353 F.3d 1185, 1191
(10th Cir. 2003); 20 C.F.R. § 404.970(b). Failure to consider such evidence is
grounds for remand. See Threet, 353 F.3d at 1191. Reviewing the evidence de novo,
see id., we conclude the evidence is not new or material and thus, there is no cause
for remand.
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Government retirees who have not contributed to the social security fund are not
similarly situated to private retirees who have paid social security taxes on their
wages. Unlike employees subject to social security taxes, Ms. Wicks had the benefit
of the present value of that money. Under these circumstances, the Agency decision
to treat retirees from non-covered employment, like Ms. Wicks, differently than
private retirees is not discriminatory.
III. Conclusion
The Agency applied the GPO to the March 1996 lump sum PERA retirement
benefit according to its guidelines, which were adopted pursuant to the authority
delegated to the Agency by Congress. Ms. Wicks has not suffered a deprivation of
her constitutional rights to due process or equal protection. Accordingly, the
judgment of the district court is affirmed.
Entered for the Court
Carolyn B. McHugh
Circuit Judge
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