Fliegler v. Commissioner of Social Security ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
12-16-2004
Fliegler v. Comm Social Security
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-1305
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-1305
IRVING FLIEGLER,
Appellant
v.
COMMISSIONER OF SOCIAL SECURITY
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
D.C. Civil No. 02-cv-02644
District Judge: The Honorable Faith S. Hochberg
Submitted Under Third Circuit LAR 34.1(a)
November 2, 2004
Before: ALITO, BARRY, and FUENTES, Circuit Judges
(Opinion Filed: December 16, 2004)
OPINION
BARRY, Circuit Judge
The primary issue raised in this appeal is whether Irving Fliegler, who seeks Social
Security retirement benefits, is entitled to a statutory exemption from the Windfall
Elimination Provisions (“WEP”) of the Social Security Act (“the Act”). Specifically,
Fliegler challenges the Commissioner’s determination that neither 1973 nor 1996 could
be counted toward his years of covered employment and, thus, that he was unable to
establish his entitlement to the WEP exemption. The District Court determined that the
Commissioner’s factual findings were supported by substantial evidence in the record, see
42 U.S.C. § 405(g), and concluded that Fliegler’s retirement benefits were subject to the
WEP. In addition, the District Court rejected Fliegler’s argument that he was denied due
process in the proceedings before the ALJ. W e have jurisdiction pursuant to 28 U.S.C. §
1291. While we exercise plenary review of the legal issues presented, we are bound by
the Commissioner’s factual findings so long as they are supported by substantial evidence
in the record. See Sykes v. Apfel, 228 F.3d 259, 262 (3d Cir. 2000). We will affirm.
I. Background
Because we write only for the parties, our discussion of the record is limited to
those facts bearing directly on our disposition of this appeal. In 1997, Fliegler retired
from private employment and applied for retirement insurance benefits (“RIB”) under the
Act. Given that Fliegler also receives an annual pension from the federal government
based on his former service as an Administrative Law Judge, his RIB would normally be
subject to offset under the WEP. Fliegler contended, however, that he had 30 years of
covered employment in the private sector, thereby entitling him to a statutory exemption
from the WEP.
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After a series of administrative proceedings, the Commissioner determined that
Fliegler had demonstrated only 29 years of covered employment and that he was not
exempt from the WEP. In particular, the Commissioner rejected Fliegler’s argument that
1973 and 1996 could be counted as years of covered employment. As noted above,
Fliegler unsuccessfully challenged this decision in the District Court, and also
unsuccessfully claimed that he was denied due process during the proceedings before the
ALJ.
II. Applicability of the WEP
The parties agree that Fliegler established 29 years of covered employment. The
only dispute is whether he qualified for a year of covered employment in either 1973 or
1996. If so, his RIB would be fully exempt from the W EP offset. See 42 U.S.C. §
415(a)(7)(D); 20 C.F.R. § 404.213(e)(5). We will consider the two disputed years in turn.
A. 1973
In order for 1973 to qualify as a year of covered employment for WEP purposes,
Fliegler was required to show a minimum of $2700 in covered earnings. See 20 C.F.R. §
404, Subpt. C, App. IV. Fliegler admits that he earned only $1716 from covered self-
employment in 1973. He cannot, therefore, count 1973 as a year of covered
employment.1
1
The District Court should not have addressed Flieger’s arguments concerning quarters
of coverage given that the only relevant figure for purposes of applying the WEP is the
number of years of coverage. See 20 C.F.R. § 404.213(d). Quarters of coverage are
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B. 1996With respect to 1996, the question is whether the $465 paid to Fliegler by the
Woolworth Corp. on January 6, 1997 should be credited as part of his wages for 1996. If
the answer is yes, the parties agree that 1996 qualifies as a year of covered employment.
As the Commissioner noted, the definition of “wages” that Fliegler proposes is not
relevant here. By its own terms, the provision Fliegler cites, 42 U.S.C. § 403(f)(5)(A),
applies only in the narrow context of calculating deductions for work under subsection
(b).2 There is no reason to conclude that Congress intended the § 403(f) definition of
wages to apply to any other interpretive issues arising under the SSA, particularly because
the SSA includes a general definition of the term “wages.” See 42 U.S.C. § 409.
Unfortunately, § 409 fails to address the question of whether an employee’s wages
should be credited to the year in which they accrue or to the year in which they are paid.
Corresponding regulations, however, establish that “[w]ages are received by an employee
at the time they are [actually or constructively] paid by the employer to the employee.”
20 C.F.R. § 404.1042. This regulation, which serves to fill a gap in the statutory
definition of wages, does not appear to be an unreasonable construction of § 409, and is
counted in determining an individual’s insured status under the Social Security program.
See 20 C.F.R. § 404, Subpt. B (“Insured Status and Quarters of Coverage”). Fliegler’s
insured status is not in dispute.
2
Specifically, § 403(b) establishes a deduction from an individual’s benefits when that
individual’s earnings in a given month exceed a certain amount.
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therefore entitled to Chevron deference.3 See Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. 837 (1984).
Fliegler does not dispute the fact that he was not actually paid the $465 in 1996.
Instead, his position is that he was constructively paid in 1996. Under the rule established
in § 404.1042(b), constructive payment occurs when wages are “credited to the account
of, or set aside for, an employee so that they may be drawn upon by the employee at any
time although not then actually received.” Viewing the entire record, there was
substantial evidence to support the Commissioner’s factual determination that Woolworth
did not maintain a policy permitting employees to draw upon their wages prior to
receiving their paychecks or that Fliegler’s wages had been set aside for him. For this
reason, Fliegler’s reliance on LaBonne is misguided, see LaBonne v. Heckler, 580 F.
Supp. 558, 560-561 (D. Minn. 1984) (“[W]ages would have been paid to LaBonne earlier
[than the date he received his paycheck] had he so requested.”), and Fliegler cannot
establish constructive payment.
3
Both parties, as well as the District Court, cite to the definition of “earnings” found at
20 C.F.R. § 404.429. Subsection (a) of that regulation, however, makes clear that its
application is limited to Subpart E of § 404, which is entitled “Deductions; Reductions;
and Nonpayments of Benefits.” The regulation implementing the WEP, 20 C.F.R. §
404.213, is located in Subpart C of § 404, and therefore it unclear whether § 404.429 is
even relevant to this case. This issue need not be addressed, however, because §
404.429(c) expressly adopts the definition of wages found in Subpart K, which includes §
404.1042.
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III. Due Process
Fliegler also argues that his due process rights were violated because he was not
given an adequate opportunity to cross-examine certain key witnesses. We disagree. The
ALJ’s October 26, 2000 letter advised Fliegler, among other things, of his right to either
“submit written questions” to adverse witnesses or to “request a supplemental hearing” at
which he would be allowed to conduct “such oral questioning of [those] witnesses as may
be required for a full and true disclosure of the facts.” App. at 163-64. In his response,
Fliegler declined to avail himself of either option, instead complaining that his due
process rights had not been respected with reference to interrogatories of those witnesses,
and requesting that the ALJ render a decision. Id. at 165. Because Fliegler waived his
right to confront those witnesses, his due process claim is without merit.
IV. Conclusion
For the reasons set forth above, the order of the District Court will be AFFIRMED.
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