Suarez v. Commissioner of Social Security Administration , 140 F. Supp. 3d 94 ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
HUGO ABSALON SUAREZ, )
)
Plaintiff, )
)
v. ) No. 13-cv-0778 (KBJ)
)
CAROLYN W. COLVIN, )
)
Defendant. )
)
MEMORANDUM OPINION
In February of 2005, the Social Security Administration (“SSA”) learned that
Plaintiff Hugo Absalon Suarez, a recipient of Social Security benefits, had been
deported to his native Mexico following a period of incarceration for gun and alien
transportation convictions. By statute, Plaintiff’s conviction of a gun possession
offense and his subsequent deportation automatically disqualified him from receiving
Social Security retirement benefits, see 42 U.S.C. § 402(n); 8 U.S.C. § 1227(a)(2)(C);
consequently, after receiving notice of Plaintiff’s deportation, the SSA terminated his
benefits (e.g., social security payments and Medicare health insurance). Plaintiff has
filed the instant lawsuit pro se, seeking to challenge the SSA’s termination of his
retirement benefits without a pre-termination hearing, and he has also launched a series
of attacks through the administrative process. First, Plaintiff unsuccessfully sought
relief directly from the SSA; then, he appealed to an administrative law judge (“ALJ”),
and presently, his appeal of the most recent ALJ decision rejecting the pre-termination
hearing argument is pending before the Appeals Council of the Office of Disability
Adjudication and Review (“Appeals Council”).
Before this Court at present is Defendant’s motion to dismiss the instant
complaint for failure to exhaust administrative remedies. (ECF No. 6.) This Court
referred this matter to a Magistrate Judge for full case management, and that judge
recommended that Defendant’s motion be denied, and that the case be permitted to
proceed, on the grounds that it would be futile to require exhaustion of remedies under
the circumstances presented here. (ECF No. 15.) Defendant filed a timely objection to
the Report and Recommendation, arguing that exhaustion should not be excused (ECF
No. 16), to which Plaintiff filed a response (ECF No. 19.)
On September 30, 2015, this Court issued an Order that declined to accept the
recommendation of the Magistrate Judge. (See ECF No. 20.) This Memorandum
Opinion explains the reasons for that order. In sum, after a thorough review of the
Report and Recommendation, the parties’ briefs, the record, and established case law,
this Court finds that the requirements for waiving the prudential exhaustion requirement
have not been satisfied in this case. Accordingly, and as explained fully below,
Defendant’s motion to dismiss the complaint has been GRANTED, and Plaintiff’s case
has been DISMISSED for lack of exhaustion.
I. BACKGROUND
In October of 1998, Plaintiff, a Mexican national who had been legally residing
in the United States for a number of years, was arrested on a number of felony charges
and subsequently pled guilty to transporting an alien within the United States, in
violation of 8 U.S.C. §§ 1324(a)(1)(A)(ii) and (a)(1)(A)(II), and possessing a firearm as
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a felon, in violation of 18 U.S.C. § 922(g)(1). See United States v. Absalon, 210 F.3d
369, 2000 WL 294449, at *1 (5th Cir. 2000) (table) (affirming Plaintiff’s “guilty-plea
convictions and sentences for transporting an alien within the United States and being a
felon in possession of a firearm”). (See also Compl., ECF No. 1, at 1; Ex. XXVIII to
Compl., Sentence Monitoring Computation Data (“Sentence & Detainer Rpt.”), ECF
No. 1-4, at 45.) 1 At the time of his imprisonment, Plaintiff was collecting Social
Security retirement benefits, and he continued to do so until the spring of 1999, when
the SSA learned that he was incarcerated and suspended his benefits. (Ex. XV to
Compl., Order of Appeals Council Remanding Case to ALJ (Feb. 26, 2010) (“Remand
Order”), ECF No. 1-1, at 38.) Notably, the SSA maintains that it overpaid Plaintiff by
approximately $2,803 in retirement benefits during this period (Remand Order at 38),
because the law prohibits payment of Social Security benefits to incarcerated
individuals, see 42 U.S.C. § 402(x)(1)(A),
Plaintiff claims that the SSA informed him that he could request reinstatement of
his benefits upon his release from prison by visiting a local Social Security Office. (Ex.
I to Compl., E-mail from Hugo Absalon Suarez to Erika Webber, Consular Assistant
(Mar. 8, 2005), ECF No. 1-1, at 2.) However, when Plaintiff was released from prison
on December 23, 2004, prison authorities immediately turned him over to the U.S.
Immigration and Naturalization Service (“INS”) pursuant to a deportation detainer that
was issued as a result of Plaintiff’s gun conviction. (Compl. at 3; Sentence & Detainer
1
Page numbers herein refer to those that the Court’s electronic case filing system automatically
assigns.
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Rpt.) INS then immediately deported Plaintiff to Mexico. (Compl. at 3; Sentence &
Detainer Rpt.)
When the SSA learned of Plaintiff’s deportation in February of 2005, it invoked
42 U.S.C. § 402(n), which bars payment of benefits to certain deportees, including
those convicted of weapons offenses, and terminated Plaintiff’s previously-suspended
benefits. (Ex. XXIV to Compl., ALJ Decision (Aug. 2, 2011), ECF No. 1-4, at 33–34.)
Although the SSA did not hold a pre-termination hearing, it did afford Plaintiff the
opportunity to object in writing to the termination decision. (Ex. III to Compl., Ltr.
from Carolyn L. Simmons, Assoc. Comm’r for Cent. Operations, to Hugo Absalon
(Sept. 6, 2005), ECF No. 1-1, at 5.) In February of 2006, Plaintiff requested that the
SSA reconsider its termination of his benefits, and on March 28, 2006, the SSA upheld
its decision. (Ex. II to Compl., Request for Reconsid., ECF No. 1-1 at 4; Ex. VI to
Compl., Ltr. from Carolyn L. Simmons, Assoc. Comm’r for Cent. Operations, to Hugo
Absalon (Mar. 28, 2006), ECF No. 1-1, at 16.)
By letter dated April 23, 2006, Plaintiff expressed his “disagree[ment] with the
decision” on his request for reconsideration regarding termination of his benefits, and
asked for a hearing before an ALJ. (Ex. VIII to Compl., Ltr. from Hugo Absalon
Suarez to SSA (April 23, 2006), ECF No. 1-1, at 19.) The ALJ granted Plaintiff’s
hearing request, which also included potential consideration of the SSA’s claim that
Plaintiff had been previously overpaid, but Plaintiff ultimately could not attend the
scheduled hearing because he was unable to obtain a visa to reenter the United States.
(Remand Order at 39.) When Plaintiff did not appear at the scheduled hearing, the ALJ
dismissed Plaintiff’s case on the grounds that Plaintiff had “admitted to not living in the
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United States and was[,] therefore, no longer eligible to receive benefits.” (Id. (internal
quotation marks omitted).) On appeal, the Appeals Council vacated this initial ALJ
decision, finding that it was procedurally improper due to the ALJ’s seeming failure to
reach the merits of Plaintiff’s benefits termination claim and the fact that the ALJ did
not undertake to address the overpayment question at all. (See id. at 39–40 (remanding
the matter to the ALJ for “additional development and further consideration[,]” and
commanding the ALJ to “issue a decision based on the evidence of record regarding
whether the [SSA] properly ceased [Plaintiff’s] benefits due to deportation and
concerning the issue of overpayment”).
On remand, the ALJ attempted to schedule a supplemental hearing, but Plaintiff
was again unable to attend because of his visa situation. (Ex. XXIII to Compl., Ltr.
from Hugo Absalon to SSA (Apr. 26, 2011), ECF No. 1-4, at 25–26.) As such, and at
Plaintiff’s request, the ALJ issued “a decision on-the-record” without a hearing (see
id.), in which the judge made two findings: first, that Plaintiff was not liable for the
overpayment of Social Security benefits to him that had occurred because of the lag
between when he was incarcerated in October of 1998 and when the SSA learned of his
incarceration, and second, that the complete termination of all retirement benefits based
on Plaintiff’s deportation was consistent with the law. (ALJ Decision at 33–34.)
Plaintiff appealed the latter part of the ALJ’s decision to the Appeals Council on
August 2, 2011, asserting that the SSA had denied him due process by terminating his
benefits without providing him a pre-termination opportunity to be heard. (Ex. XXV to
Compl., Notice of Appeal, ECF No. 1-4, at 37–39.)
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On May 29, 2013—while his administrative appeal was still pending (see Compl.
at 15)—Plaintiff filed the instant pro se complaint, in which he reasserts that the SSA
denied him due process of law with respect to the termination of his retirement benefits.
On July 24, 2013, Defendant filed a motion to dismiss for lack of subject matter
jurisdiction arguing that Plaintiff’s complaint should be dismissed because of the
ongoing administrative appeal. (Def.’s Mot. to Dismiss for Lack of Subject Matter
Jurisdiction, ECF No. 6.)
As mentioned above, this Court referred the entire case for full case management
to a Magistrate Judge, and the Magistrate Judge subsequently issued a Report and
Recommendation that recommended that Defendant’s exhaustion-related motion to
dismiss be denied on the basis of futility. (See R. & R., ECF No. 15, at 11–12.) To
support this conclusion, the Report and Recommendation referenced a written “Notice”
that the Appeals Council sent to Plaintiff the day after the complaint in the instant case
was filed, in which the Council notified Plaintiff of its decision to review the ALJ’s
ruling based on a number of factors and stated that it was providing notice of its “plan”
to reverse the ALJ’s ruling in part. (Id. at 11; Ex. 3 to Decl. of Patrick J. Herbst
(“Appeals Council Notice”), ECF No. 6-2, at 19 (explaining the Council’s view that the
ALJ’s “decision finding that you are ‘not without fault’ in causing the overpayment”
was erroneous and should be reversed, but that the Council also intended to “affirm the
Administrative Law Judge’s findings that the Social Security Administration was
correct in ceasing your benefits”). The Notice also informed Plaintiff that he had the
opportunity to “send us more evidence or a statement about the facts and the law in
your case within 30 days of the date of this letter.” (Appeals Council Notice at 19.)
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Pointing to this letter, the Magistrate Judge’s Report and Recommendation maintained
that “[t]he record supports a finding that requiring Plaintiff to await the decision of the
Appeals Council would be futile” (R. & R. at 11), both because the Council had already
indicated the outcome of Plaintiff’s appeal in its written notice (id.) and also because
eight months had elapsed since the Council sent the notice and it still had not issued a
final decision (id. at 12).
Defendant timely filed with this Court an objection to the Report and
Recommendation (see Def.’s Objs. to R. & R., ECF No. 16), to which Plaintiff
responded (see Pl.’s Resp. to [] Objs., ECF No. 19). The Magistrate Judge’s Report and
Recommendation, all of the parties’ filings related to Defendant’s motion are now
before this Court, and the Court has reviewed the matter de novo. Means v. District of
Columbia, 999 F. Supp. 2d 128, 132 (D.D.C. 2013).
II. LEGAL STANDARDS
As a general matter, federal courts have jurisdiction to review cases arising
under Title II of the Social Security Act after a “final decision of the Commissioner of
Social Security made after a hearing[.]” 42 U.S.C. § 405(g). The applicable
regulations specify four administrative review levels through which a claim for social
security benefits must pass—initial determination, reconsideration, ALJ hearing, and
Appeals Council review—before any decision is deemed “final.” 20 C.F.R.
§ 404.900(a)(1-5). It is undisputed that Plaintiff here has passed through the first three
administrative levels, but not the fourth, as the Appeals Council has yet to issue a final
decision on Plaintiff’s appeal of the ALJ’s ruling.
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According to the Supreme Court, “[e]xhaustion is generally required as a matter
of preventing premature 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.” Weinberger v. Salfi, 422 U.S.
749, 765 (1975). Moreover, “[t]he Supreme Court has construed 42 U.S.C. § 405(g) as
having jurisdictional and non-jurisdictional exhaustion components”; that is, “[t]he
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.” Cost v. Soc. Sec. Admin., 770
F. Supp. 2d 45, 48-49 (D.D.C. 2011) (citations omitted), aff’d, No. 11-5132, 2011 WL
6759544 (D.C. Cir. Dec. 2, 2011). Thus, a motion to dismiss the complaint for failure
to complete agency review is properly brought as one under Rule 12(b)(6), in contrast
to a motion for dismiss for failure to present a claim in the first instance. See, e.g.,
Cost, 770 F. Supp. 2d at 49 (construing the agency’s motion to dismiss “as one under
Rule 12(b)(6) for failure to state a claim” where the agency alleged that the claimant
“did not exhaust the non-jurisdictional requirements”).
To survive such a Rule 12(b)(6) motion, “a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation
omitted). And although exhaustion is typically an affirmative defense, “it may be
invoked in a Rule 12(b)(6) motion if the complaint somehow reveals the exhaustion
defense on its face.” Thompson v. Drug Enf’t Admin., 492 F.3d 428, 438 (D.C. Cir.
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2007); see also, e.g., UDC Chairs Chapter, Am. Ass’n of Univ. Professors v. Bd. of
Trustees of Univ. of D.C., 56 F.3d 1469, 1476 (D.C. Cir. 1995) (affirming dismissal of
complaint for failure to exhaust where complaint contained “no basis for concluding
that resort to the grievance procedures would have been futile”).
With respect to waiver of a non-jurisdictional exhaustion requirement such as the
one in section 405(g), it is well-established that the exhaustion mandate “may be
waived in only the most exceptional circumstances.” Commc’ns Workers of Am. v.
AT&T, 40 F.3d 426, 432 (D.C. Cir. 1994) (internal quotation marks and citation
omitted). Consequently, the established grounds for waiving the exhaustion
requirement are few and far between—courts have held that waiver is appropriate only
if the issue raised in the lawsuit is entirely collateral to the matter on appeal; or if the
plaintiffs demonstrate that they face irreparable injury if the exhaustion requirement is
enforced against them; or if it would be futile to require administrative exhaustion. See
Barbour v. Soc. Sec. Admin., No. 12cv1049, 2012 WL 2572777, at *1 (D.D.C. June 26,
2012); see also Triad at Jeffersonville I, LLC v. Leavitt, 563 F. Supp. 2d 1, 16 (D.D.C.
2008) (citing Bowen v. City of New York, 476 U.S. 467, 483–85 (1986)). Furthermore,
to invoke the futility ground for waiver successfully, the plaintiff must show that the
agency “evidenced a strong stand on the issue in question and an unwillingness to
reconsider the issue.” Randolph-Sheppard Vendors of Am. v. Weinberger, 795 F.2d 90,
106 (D.C. Cir. 1986) (citations omitted).
III. ANALYSIS
As explained, the Report and Recommendation in this matter concluded that “the
circumstances presented [in Plaintiff’s complaint] justify waiver of the exhaustion
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requirement [because] requiring Plaintiff to await the decision of the Appeals Council
would be futile.” (R. & R. at 11.) In its Objection, the SSA points out that “the R&R
did not address whether all three of the conditions for waiving exhaustion of
administrative remedies are satisfied in this case[]” (Def.’s Obj. at 1), and with respect
to the futility analysis in particular, the SAA asserts that, not only has the Appeals
Council not yet made its final decision in Plaintiff’s case, there are likely to be
additional administrative processes to come, given the Council’s stated intention to
reverse the ALJ’s decision with respect to the overpayment issue, which will probably
be followed by a remand of the case (id. at 4). The SAA’s written objection also
maintains that Plaintiff is partially responsible for the delay in deciding his appeal
because the Appeals Council “paused its proceedings [after Plaintiff filed this suit] to
avoid any potential conflict with this court’s action.” (Id. at 5.)
As an initial matter, this Court disagrees with the SSA’s suggestion that there is
a conjunctive, three-factor test for waiver of the exhaustion requirement as a matter of
law. (See Def.’s Obj. at 1; see also id. at 3 (asserting that “[a] court may waive the
requirement to exhaust administrative remedies if three conditions are satisfied”
(citation omitted).) It appears that there are “several types of exceptions to the
exhaustion requirement” rather than a three-pronged waiver test, 33 Charles Alan
Wright & Charles H. Koch, Jr., Fed. Prac. & Proc. Judicial Review § 8398 (1st ed.),
and, indeed, scores of cases have considered whether or not to waive the exhaustion
requirement on the basis of an assertion of futility alone. See, e.g., Petit v. U.S. Dep’t
of Educ., 578 F. Supp. 2d 145, 152 (D.D.C. 2008) (“[B]ecause ultimate denial of the
plaintiffs’ sought-after relief is certain, the plaintiffs may bring suit notwithstanding
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their failure to exhaust their administrative remedies[.]” (internal citation omitted));
Callicotte v. Carlucci, 698 F. Supp. 944, 948 (D.D.C. 1988) (denying motion to dismiss
for failure to exhaust where resort to administrative remedies would have been futile).
Nevertheless, this Court agrees with the SSA that Plaintiff has failed to allege any
possible basis for waiver, and thus has not satisfied the applicable standards for waiving
non-jurisdictional exhaustion.
First of all, this Court sees nothing in the complaint (or in the Report and
Recommendation for that matter) that addresses whether the issue raised in the lawsuit
is collateral to the matter the agency is considering. See Duggan v. Bowen, 691 F.
Supp. 1487, 1507–08 (D.D.C. 1988) (“Plaintiffs challenge of HHS [] policy presents a
legal issue ‘substantially collateral’ to the right of members of the class to receive home
health care benefits and consequently meets the standard for waiver of the exhaustion
requirement.”). Apparently this is no mere oversight; as the Report and
Recommendation acknowledges, the challenge that Plaintiff makes in the instant lawsuit
raises precisely the same legal issues regarding “the agency’s failure to conduct a [pre-
termination] hearing” that Plaintiff asked the agency to reconsider. (R. & R. at 11.)
The Magistrate Judge was also correct to conclude that the complaint’s
allegations regarding Plaintiff’s age and medical condition are insufficient to “meet the
demanding standard for demonstrating irreparable harm.” (R. & R.at 12 n.6 (citing
Beattie v. Astrue, 845 F. Supp. 2d 184, 193–93 (D.D.C. 2012)).) And there is more:
insofar as the law quite clearly cuts against Plaintiff on the underlying merits of his pre-
termination hearing claim, this Court finds that Plaintiff cannot demonstrate that the
Court’s failure to waive the exhaustion requirement will injure him at all, much less
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irreparably. 2 Put another way, Plaintiff has not offered—and this Court has not found—
any authority for the proposition that a court’s refusal to lift a procedural bar that
otherwise prevents a plaintiff from advancing a patently meritless claim harms that
plaintiff in any respect.
Finally, turning to the futility ground, it is clear to this Court that Plaintiff has
failed to mount the extraordinarily high hurdle that the D.C. Circuit has erected for
plaintiffs who wish to have the exhaustion requirement excused on this basis. See, e.g.,
Commc’ns Workers, 40 F.3d at 432. Plaintiff’s contention that the SSA improperly
terminated his benefits is currently pending before the Appeals Council, and nowhere in
the complaint does Plaintiff allege any facts showing that the Council will certainly and
inevitably rule against him. See UDC Chairs Chapter, 56 F.3d at 1475 (“The mere
probability of administrative denial of the relief requested does not excuse failure to
pursue administrative remedies, rather [plaintiffs] must show that it is certain that their
claim will be denied.” (alteration in original) (internal quotation marks and citations
omitted)). To the extent that the Report and Recommendation gleans such certainty
from the “Notice” that the Appeals Council issued after Plaintiff filed his lawsuit, that
document is not properly recognized in the context of a motion to dismiss because it is
a matter outside of the parties’ pleadings. See Fed. R. Civ. P. 12(d). And even if this
Court chose to rely on that document (and thereby converted the instant motion to one
for summary judgment), the text of the Notice plainly announces only the Council’s
2
The Social Security Act and its implementing regulations unambiguously require the SSA to suspend
payment of benefits to any alien who is deported following conviction for specific offenses, including
illegal possession of a firearm, see 42 U.S.C. § 402(n); 8 U.S.C. § 1227(a)(2)(C), and suspension of
benefits under this provision is “automatic[.]” Marcello v. Bowen, 803 F.2d 851, 855 (5th Cir. 1986);
see also 42 U.S.C. § 402(n); 20 C.F.R. § 404.464. Thus, despite Plaintiff’s vigorous contentions to the
contrary, a deportee simply does not have any right to an in-person hearing before the SSA terminates
retirement benefits under Section 402(n) of Title 42.
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future intentions, and the Council also specifically indicates its willingness to consider
any additional arguments or evidence that Plaintiff wishes to proffer. (See Appeals
Council Notice at 19.) Thus, properly understood, the Notice does not give rise to a
plausible inference that the Council is inevitably going to rule against Plaintiff. See
Commc’ns Workers, 40 F.3d at 432 (court can excuse exhaustion requirement only
“where resort to administrative remedies would be futile because of the certainty of an
adverse decision”) (internal quotation marks and citation omitted); see also Cost, 770 F.
Supp. 2d at 51 (holding that exhaustion would not be futile where there was no record
evidence that the SSA would be unwilling to reconsider claim on remand).
This Court is also not persuaded, on the facts presented here, that the length of
time that it has taken the Appeals Council to act on Plaintiff’s appeal warrants a futility
finding. To be sure, according to the complaint, the Appeals Council had been
pondering Plaintiff’s claims for a while prior to the filing of the instant lawsuit. (See
Compl. at 15–16.) But a lengthy administrative appeal process, standing alone, is not a
satisfactory reason to excuse exhaustion. See Randolph-Sheppard Vendors of Am., 795
F.2d at 108 (noting that “[t]he usual time and effort required to pursue an administrative
remedy” is insufficient to justify waiving the exhaustion requirement). And as the SSA
points out (Def.’s Obj. at 5), Plaintiff’s filing of the instant lawsuit may have short-
circuited the ongoing administrative process, contributing to the delay about which
Plaintiff complains. Cf. Alexander v. Shalala, No. 93cv3618, 1994 WL 532650, at *1
(E.D. La. Sept. 27, 1994) (noting that the Appeals Council has taken the position that it
cannot rule on request for review where related civil case was pending). Thus, far from
establishing that exhaustion is futile and that Plaintiff’s case should be permitted to
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proceed in federal court, the facts here indicate that this Court’s dismissal of the instant
action will facilitate prompt administrative review, by ensuring that this case no longer
poses any obstacle to the continuation and resolution of the pending administrative
processes.
IV. CONCLUSION
For the reasons stated above, this Court agrees with the SSA that none of the
three established bases for waiver of the exhaustion requirement is satisfied here, and as
a result, the Court has determined that it “should not waive the exhaustion requirement
in this case.” (Def.’s Obj. at 1.) Therefore, as provided in the Order this Court issued
on September 30, 2015, Defendant’s motion for to dismiss has been GRANTED and
Plaintiff’s case has been DISMISSED.
DATE: October 27, 2015 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
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