Fontanez v. United States Social Security Administration ( 2020 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
FERNANDO FONTANEZ,
Plaintiff,
v.
Civil Action No. 17-2844 (RDM)
U.S. SOCIAL SECURITY
ADMINISTRATION,
Defendant.
MEMORANDUM OPINION AND ORDER
Sometimes, the Social Security Administration (“SSA”) pays someone too much money.
Receiving a too-large check from the agency is not like drawing the “bank error in your favor”
card in Monopoly. Under the Social Security Act (“Act”), the beneficiary must repay the
government for any money received beyond what was owed. See 42 U.S.C. § 404(a)(1)(A). But
the SSA cannot recover overpayments if the beneficiary was not at fault for the error and
recovery would defeat the purposes of the Act—for instance, because the beneficiary cannot
afford to repay the sums received in error. Id. § 404(b). And fair is fair. If the SSA instead pays
someone too little, then it must correct the underpayment by sending the beneficiary a larger
payment to make up the difference. Id. § 404(a)(1)(B).
Plaintiff Fernando Fontanez has received disability benefits from the SSA since 1988.
Over the years, he has received both underpayments and overpayments. After a long and
complicated administrative process, in 2017 an Administrative Law Judge (“ALJ”) issued a
“fully favorable” decision in Plaintiff’s case. The ALJ determined that Plaintiff had been
overpaid tens of thousands of dollars, but the ALJ waived recovery of the overpayments. But, as
far as Plaintiff was concerned, that decision did not go far enough, and he filed an administrative
appeal and then filed this lawsuit, alleging that the SSA owes him money. Now pending before
the Court are the SSA’s motion to dismiss, Dkt. 28, and Plaintiff’s motion for judgment of
reversal, Dkt. 27.
For the reasons that follow, the Court will DENY the SSA’s motion to dismiss and will
DENY without prejudice Plaintiff’s motion for judgment of reversal. The Court, acting sua
sponte, will also DISMISS Plaintiff’s claims for damages, which the Act does not permit.
I. BACKGROUND
The following history is drawn from Plaintiff’s complaint and from the voluminous
administrative record, which the Court must consult to determine whether it has subject-matter
jurisdiction. See Phoenix Consulting Inc. v. Republic of Angola, 216 F.3d 36, 40 (D.C. Cir.
2000). Although neither the complaint nor the administrative record is a picture of clarity, the
Court has done its best (without any assistance from the SSA, which inexplicably failed to
respond to Plaintiff’s motion for judgment of reversal) to piece together the events that led to this
litigation.
A. Statutory and Regulatory Background
Plaintiff began receiving Old-Age, Survivors, and Disability Insurance benefits in March
1988, when the SSA deemed him disabled with a personality disorder. Dkt. 15 at 16. Over the
ensuing decades, Plaintiff received both overpayments and underpayments from the SSA. Id. at
16–17. That is, during certain periods, the SSA paid Plaintiff more than the amount to which he
was legally entitled, and, at other times, it paid him less than he was owed. Id.; see also 20
C.F.R. § 404.501(a) (defining “overpayment” and “underpayment”).
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The Social Security Act and its implementing regulations address over- and
underpayments. If the SSA determines that it has paid a beneficiary “more or less than the
correct amount,” then it must adjust or recover payments to balance the ledger. 42 U.S.C. §
404(a). In the case of an overpayment, the Act gives the SSA several options for recovering the
beneficiary’s debt to the government, including by decreasing future benefit payments. Id. §
404(a)(1)(A); see Califano v. Yamasaki, 442 U.S. 682, 684–85 (1979) (explaining that the Act
“permits the Secretary to recoup . . . erroneous overpayments by decreasing future payments to
which the overpaid person is entitled”); see also 20 C.F.R. § 422.402(b) (defining “debt”). The
agency may not recoup the overpayment, however, if the beneficiary is “without fault” and
“adjustment or recovery would defeat the purpose” of the Act or “would be against equity and
good conscience.” 42 U.S.C. § 404(b)(1); Califano, 442 U.S. at 685. In the case of an
underpayment, the SSA is required to “make payment of the balance of the amount due such
underpaid person.” 42 U.S.C. § 404(a)(1)(B)(i). If a beneficiary has been both overpaid and
underpaid, SSA regulations provide for “netting” the errors to determine whether, on balance, the
beneficiary is owed or owes money. 20 CFR § 404.504; Sullivan v. Everhart, 494 U.S. 83, 87
(1990). Pursuant to the netting regulations, a beneficiary cannot recover for underpayments
unless the amount of the underpayment exceeds that of any overpayment. Sullivan, 494 U.S. at87–88.
B. Factual and Procedural Background
With that statutory framework in mind, the Court turns to the convoluted factual and
procedural history of the overpayments and underpayments in Plaintiff’s case. From April 1997
to August 1998, Plaintiff continued to receive benefits while gainfully employed, resulting in
overpayments, and from July 2000 to February 2001, Plaintiff continued to receive payments
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while incarcerated, resulting in additional overpayments. Dkt. 15 at 19; Dkt. 15-4 at 10; but see
Dkt. 15 at 55–56 (listing conflicting dates for Plaintiff’s periods of gainful employment and
incarceration). In 2001, the SSA informed Plaintiff that he had been overpaid $24,911, Dkt. 15-4
at 10, and Plaintiff requested a waiver on May 17, 2001, Dkt. 15 at 43–50. Plaintiff argued that
he was not at fault because he had notified the SSA of his employment and because he was
unable to repay the debt. Id. He asked that the agency accept his “sincere apology.” Id. at 50.
On July 20, 2001, the SSA denied Plaintiff’s waiver request, finding that he was at fault for not
notifying the agency of his employment and incarceration. Id. at 51–57. On July 21, 2001,
rather than appeal that decision, Plaintiff agreed to repay these overpayments by accepting a $50
per month reduction from his SSA benefit checks. Id. at 58–59; see also Dkt. 15-4 at 10.
Several years later, the SSA underpaid Plaintiff. On December 14, 2004, the SSA
determined that Plaintiff’s disability had ceased. Dkt. 15 at 16. But the agency later reopened
his case and, on November 30, 2007, an ALJ overturned the December 2004 decision. Dkt. 15-2
at 64–67. The ALJ decided that Plaintiff was “entitled to a continuing period of disability” based
on schizophrenia, bipolar disorder, anxiety/PTSD disorder, and polysubstance dependence, “as if
disability had not previously been ceased.” Id. at 67; Dkt. 15 at 16. In a letter dated January 30,
2008, the SSA wrote that it would restart Plaintiff’s benefits. Dkt. 15 at 74–76. Then, in a letter
dated March 23, 2008, the agency confusingly informed Plaintiff both that he would “soon
receive a check for $25,200.00 because [the SSA] had withheld money from [his] benefits” but
also that the SSA would “withhold money from [his] checks to collect the overpayment of
$25,200.00,” with $50 per month being withheld for 504 months. Dkt. 15-2 at 68. In a letter
dated the very next day, March 24, 2008, the SSA wrote to Plaintiff clarifying that he had
received payments to his bank account of $20,349.50 and $25,200, “representing all retroactive
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benefits due,” and that his regular monthly payments going forward would continue to have $50
deducted to recover the previous overpayments. Id. at 71; see also Dkt. 15-4 at 74 (referencing
these two payments totaling $45,549.50 made in January 2008). In the current dispute, Plaintiff
repeatedly (and confusingly) refers to these payments as adding up to $48,000, although it is
clear from context to which payments he is referring. See, e.g., Dkt. 15-3 at 59 (referencing “the
$20,000 + $25,000 = $48,000 payment” and distinguishing it from a separate $40,000 lump sum
that Plaintiff claims he never received).
Additional overpayments followed. After awarding Plaintiff retroactive benefits for the
period between 2004 and 2007, the SSA later determined that from May 2005 to August 2005,
February 2006 to September 2006, and January 2007 to April 2008, Plaintiff had been a fugitive
felon, rendering him ineligible for benefits during those periods and thus transforming the lump
sums he received as compensation for underpayments into alleged overpayments. Dkt. 15 at 19;
see also Dkt. 15-4 at 61 (slightly different dates). In addition, from March 2009 to June 2009
and November 2010 to December 2010, Plaintiff was institutionalized in a mental facility but
continued to receive payments, resulting in further overpayments. Dkt. 15 at 19; Dkt. 15-3 at 13;
Dkt. 15-4 at 80. The SSA sent Plaintiff several notices regarding overpayments, with varying
assertions about how much Plaintiff owed. Plaintiff frequently sought waivers of overpayment
recovery and filed multiple requests for reconsideration. Plaintiff’s various requests for relief
and the agency’s corresponding denials and notices of how much he owed form a long and
tortuous road.
After the SSA assessed Plaintiff with overpayments based on outstanding warrants,
Plaintiff filed a request for a waiver on September 8, 2008. Dkt. 15 at 16, 90–97. Before
considering that request, the SSA informed Plaintiff on February 25, 2009 that it had overpaid
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him $2,780 for the period between August 2008 and January 2009, in addition to an
overpayment of $14,649.50 (for which a hearing was pending) and a previous overpayment of
$25,150 (toward which he was already paying $50 per month). Dkt. 15-2 at 77. The letter
instructed him to repay the money to the SSA within 30 days. Id. On March 6, 2009, Plaintiff
submitted another request for waiver of recovery of the overpayments. Dkt. 15-1 at 2–9. On
March 21, 2009, the SSA wrote to Plaintiff provisionally denying his request for waiver
(although the letter did not specify which request it purported to deny) and setting a hearing,
known as a personal conference, for April 9, 2009. Id. at 22. The administrative record does not
indicate whether Plaintiff attended that conference.
The SSA sent Plaintiff another letter on May 6, 2009, informing him that he had been
overpaid by $75,743.70. Id. at 24. Less than two months later, on July 2, 2009, the SSA
informed Plaintiff that he now owed $98,159.30 and that the agency would start withholding his
entire monthly payment (through 2013) to recoup the overpayment. Id. at 30. On July 14, 2009,
Plaintiff filed both a request for reconsideration of the SSA’s determination that he owed
$98,000, id. at 32–33, and another request for waiver, id. at 34–41. Shortly thereafter, on August
4, 2009, the SSA told Plaintiff that his balance was down to $96,895.30, perhaps because the
agency had withheld a monthly payment and counted it against his debt. Id. at 42. In the same
August 4, 2009 letter, the SSA concluded that it had no basis for reversing the denial of
Plaintiff’s waiver request because he had not attended a personal conference on August 6, 2009,
a date that was still in the future at the time the letter was sent. Id.
On August 21, 2009, Plaintiff filed a request for a hearing with an ALJ. Id. at 43. In a
letter dated the same day, the SSA notified Plaintiff that it had determined that he was not
without fault for overpayments because he knew or should have known he was receiving
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duplicate checks and benefits in the wrong amount; as best the Court can discern, this is the first
and only reference to duplicate checks in the extensive record before the Court. Id. at 45. On
September 16, 2009, the SSA confirmed receipt of Plaintiff’s request for a hearing with an ALJ.
Id. at 47–48.
On March 13, 2010, the SSA informed Plaintiff that his overpayment balance had grown
to $107,581.30. Dkt. 15-2 at 81. But then several weeks after that, on May 3, 2010, the SSA
notified Plaintiff that the “[b]alance” he “owe[d]” was only $22,774.80. Id. at 80. On May 4,
2010, Plaintiff filed yet another request for waiver. Id. at 41–48. And in a handwritten letter
bearing the same date, Plaintiff explained that he missed a hearing on March 3, 2010, because he
did not receive notice of the hearing date. Id. at 49–51. In a letter dated June 11, 2010, the SSA
notified Plaintiff that a hearing was set in his case for July 22, 2010. Id. at 31–34. But then in a
letter dated July 23, 2010, the agency explained that Plaintiff’s request for a hearing was
“dismiss[ed]” because he had not appeared at the hearing scheduled for the previous day. Id. at
83–87.
The SSA next informed Plaintiff that he owed the agency $24,659.30 as of August 16,
2010, which the agency would recoup by withholding $25 per month for the next 986 months.
Id. at 75. On January 18, 2011, the SSA told him that he owed $15,469.00, which covered a
period of institutionalization and “include[d his] prior overpayment.” Dkt. 15-3 at 13. On May
31, 2011, Plaintiff requested a review of the hearing decision. Id. at 5 (arguing that Plaintiff did
not owe $40,000 because he never received that money). In a letter dated July 16, 2011, the SSA
told Plaintiff that he now owed $88,129.80. Dkt. 15-2 at 88; Dkt. 15-5 at 3.
On July 22, 2011, Plaintiff filed another request for reconsideration, Dkt. 15-2 at 93,
which the SSA denied on January 11, 2012, id. at 94. In denying the request, the agency
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explained that the record showed that Plaintiff had received overpayments of $107,581.30 and
that this amount had been reduced through withholdings to $86,855.80. Id. The large
outstanding balance was, in part, because the payments of $20,349.50 and $25,200, which the
ALJ had ordered in 2007 to compensate Plaintiff for underpayments, were now being treated as
overpayments. The SSA explained:
On 02/06/2008 and 03/23/08, you were sent two notices that we made two
payments of $20,349.50 and $25,200.00 into your bank account. Both of the
payments were not back-pay awards because we found out that you had a
warrant that was issued by [the] Wisconsin Department of Community
Corrections on 4/28/2005. The warrant was closed on 08/26/2008 when you
surrendered yourself. By law, you should not [have] receive[d] Social Security
benefits when you [were] in the prison, [were] a fugitive, or have [a] criminal
warrant against you. However, we had released the two payments to you before
we found out about your warrant.
Id. Because Plaintiff was a fugitive for the entire period from April 28, 2005 to August 26, 2008,
the SSA concluded that he should not have received payments during that time.
On January 20, 2012, Plaintiff filed both another request for reconsideration, specifically
contesting the SSA’s conclusion that the two back payments should be treated as overpayments,
Dkt. 15-2 at 99, and a request for a hearing, Dkt. 15-3 at 2. In a followup letter, Plaintiff argued
that he was in jail on the day the original hearing had been scheduled and was thus unable to
attend. Id. at 8. The SSA Appeals Council confirmed that Plaintiff was incarcerated at the time
of his scheduled hearing, which it found to be a “good reason” for not appearing that merited
“another opportunity for a hearing,” and, accordingly, the SSA remanded the case to an ALJ for
a hearing. Id. at 9–11. The new hearing was initially scheduled for July 8, 2013, id. at 27, but
was rescheduled for November 1, 2013, so that the agency could gather more records, id. at 42.
On the appointed date, Plaintiff appeared pro se before Administrative Law Judge David
Skidmore. Dkt. 15-5 at 17, 20. The “issue to be determined” at the hearing was “whether there
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ha[d] been an incorrect payment of benefits, and if so, for what month(s), and whether
adjustment or recovery of the incorrect payment [should] be waived.” Id. at 17. The ALJ issued
his “partially favorable” decision on February 21, 2014. Id. at 13–20. The issue for adjudication
was captioned as a claim for “Overpayment and Underpayment of Disability Benefits.” Id. at 16.
ALJ Skidmore noted that Plaintiff “testified that he was owed $40,000 in back payment” and that
he “repeatedly claimed he was underpaid $40,000.” Id. at 18. But the ALJ determined that the
record did not “show any underpayment due.” Id. at 19. The ALJ found that “the detailed
statement of paid versus payable” contained in the January 11, 2012 letter to Plaintiff “indicates
clearly that[,] as of” that date, Plaintiff had been “overpaid $86,855.80.” Id. at 18–19.
But the decision was partially favorable because, as the ALJ explained, the SSA had
decided to adhere to the Second Circuit’s decision in Clark v. Astrue, 602 F.3d 140 (2010),
which required the agency to refrain from assessing overpayments “for periods during which a
beneficiary is subject to a probation or parole violation warrants.” Dkt. 15-5 at 19. Applying
this rule, the ALJ concluded that Plaintiff’s overpayment balance should be reduced for the
periods when he was considered a fugitive felon, but the ALJ did not do the math to determine
how much Plaintiff still owed after that adjustment. Id. at 19–20. Finally, the ALJ determined
that Plaintiff was not without fault for the remaining overpayments because he knew or should
have known that he was not due the payments he received while working or incarcerated. Id. at
19. As evidence that Plaintiff was not “mentally incapable” of notifying the SSA “regarding his
work or imprisonments,” the ALJ noted that the letters Plaintiff had submitted showed “excellent
handwriting” and were “well written and clearly convey[ed the] ideas that he [was] not overpaid
and [that] an underpayment [was] due [to] him.” Id. The ALJ therefore determined that the
overpayments should not be waived. Id. at 20.
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Plaintiff appealed ALJ Skidmore’s decision to the SSA Appeals Council. Dkt. 15-4 at 3–
4. In his handwritten appeal, Plaintiff included several references to the $40,000 the he claimed
the SSA owed him but that he allegedly never received. Id. On September 30, 2016, the
Appeals Council vacated and remanded the ALJ’s 2014 decision. Id. at 7–11. The Appeals
Council directed the ALJ on remand to make specific findings as to “each discrete period of non-
entitlement, the basis for the non-entitlement, and the resulting overpayment amount.” Id. at 9.
The Appeals Council also acknowledged that the SSA’s notices to Plaintiff had provided
“significantly different amounts” of overpayment; noted “the complexity of multiple
overpayments periods, the history of lump sum payments, and the existence of previously
adjudicated overpayments;” and encouraged the ALJ to seek “assistance from the payment
center” if necessary. Id. at 9–10. In addition, the Appeals Council clarified that Plaintiff’s
overpayments related to employment activity had already been adjudicated and were no longer at
issue, id. at 11, and it directed the ALJ to determine the specific periods and amounts of Clark
relief to which Plaintiff was entitled and to make findings as to whether waiver of the
overpayments should be granted, id. at 9. Finally, with respect to wavier, the Appeals Council
directed the ALJ to rely on relevant evidence (including medical evidence), rather than Plaintiff’s
good handwriting, to determine Plaintiff’s “ability to comprehend and comply with his reporting
obligations.” Id. at 9.
On remand, Plaintiff again appeared pro se before ALJ Skidmore. Dkt. 15 at 16. This
time, the ALJ issued a “fully favorable” decision. Id. at 13. First, the ALJ determined that
Plaintiff had been overpaid $85,305.80 and clarified that Plaintiff had been overpaid (1) from
April 1997 to August 1998 when he was gainfully employed; (2) from July 2000 to February
2001, when he was incarcerated; (3) from May 2005 to August 2005, February 2006 to
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September 2006, and January 2007 to April 2008, during which times he was a “fugitive felon;”
and (4) from March 2009 to June 2009 and from November 2010 to December 2010, when he
was confined to a mental health facility. Id. at 19. Next, the ALJ considered whether, and to
what extent, Plaintiff was entitled to relief based on the Clark decision. Dkt. 15 at 19–20. He
concluded that after October 24, 2006, which is the date on which the Clark decision became
effective, Plaintiff had been improperly assessed with $26,277.10 in overpayments while he was
subject to warrants for violations of probation or parole. Id. The ALJ deducted that amount
from Plaintiff’s overpayment total, leaving a remaining balance of $59,028.70. Id. at 22. Finally,
the ALJ decided to waive recovery of the remaining overpayments. Id. at 20–22. He determined
that Plaintiff was not at fault for the overpayments because “[e]ven a most cursory review of this
particularly voluminous record demands notice that [Plaintiff] has received benefits for almost
three decades due to mental impairments which are inconsistent with the ability to comply with
the reporting requirements at issue in this appeal.” Id. at 20. And he also determined that
recovery would defeat the purposes of the Act because Plaintiff’s rent was about to increase,
after which his monthly expenses would exceed his monthly income. Id. at 21–22. ALJ
Skidmore, accordingly, determined that Plaintiff was “not liable for [the] remaining balance of . .
. $59,028.70.” Id. at 22. Finally, the ALJ concluded that “[b]ecause there [was] no indication”
that Plaintiff had not received “all benefits owed to him,” and because Plaintiff “was able to
repay the overpayment, regardless of fault, through August 2, 2017, no underpayment ha[d]
occurred.” Id.
Plaintiff again appealed, sending a series of letters and emails to the Appeals Council. Id.
at 28. Plaintiff requested that the SSA pay him the money that the ALJ determined was
incorrectly treated as an overpayment, in violation of the Clark decision. Id. at 30. He argued
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that the ALJ’s decision on remand was “illegal,” id. at 32, and again argued that the ALJ had
incorrectly counted the back pay that Plaintiff received in 2008, which the SSA first treated as
compensation for an underpayment and later treated as an overpayment, id. at 32, 34 (alleging
that “the ALJ took my $48,000 SSA award back pay and cited it was an overpayment.”). He
requested that the $50 per month that SSA had previously withheld from his monthly benefit
checks be repaid to him by increasing his future checks by $50. Id. at 30–31. And he repeatedly
argued that he should not have to repay $40,000 because he never received it. Id. at 32–33.
On September 25, 2017, the Appeals Council denied Plaintiff’s request for review,
explaining that the arguments he presented “do not provide a basis for changing the
Administrative Law Judge’s decision.” Id. at 24. The Appeals Council acknowledged Plaintiff’s
requests for “immediate refund of all Clark relief money [he was] due, an immediate refund of
all money collected/recovered with respect to the overpayments, and payment of back pay of
$40,000 [he] never received after winning [his] case.” Id. The Appeals Council noted that the
ALJ’s favorable decision had waived recovery of overpayments while finding no underpayments
and that Plaintiff’s “case is currently pending at the payment center for effectuation of the
favorable hearing decision.” Id. (It was unclear from the Appeals Council’s decision, however,
what further action from the payment center would be necessary, given that the ALJ had decided
that Plaintiff and the SSA did not owe each other any money.) The Appeals Council further
noted that, pursuant to a favorable ALJ decision in 2007, the SSA had “initially withheld
$25,200 from [Plaintiff’s] retroactive benefits and sent [Plaintiff] a payment of $20,349.50” but
later sent “a payment of $25,200, the amount previously withheld from [his] retroactive
benefits.” Id. The Appeals Council therefore affirmed the ALJ, which, as the decision
explained, “means that the Administrative Law Judge’s decision is the final decision of the
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Commissioner of Social Security” in Plaintiff’s case. Id. at 25. Plaintiff subsequently sent the
Appeals Council a request to reopen his case. Id. at 11.
On December 18, 2017, Plaintiff filed this lawsuit. Dkt. 1. He alleges that the SSA’s
decision should be reversed because: (1) the SSA owes him payment of $26,277.10 in Clark
money, which he alleges should not be used to offset any debts or other overpayments, id. at 4
(Compl. ¶ 6); (2) the SSA did not overpay him by $40,000 because he never received that
money, id. (Compl. ¶ 11); (3) the SSA did not overpay him by $48,000, because he was owed
that money as compensation for a past underpayment, id.; and (4) the SSA must pay him back
for any repayments he made toward the alleged overpayments, at a rate of $50 per month, id. at 5
(Compl. ¶ 14). Plaintiff also seeks compensatory and punitive damages. Id. (Compl. ¶ 13).
In a letter dated January 5, 2018, the Appeals Council responded to Plaintiff’s request to
reopen his case. It wrote that Plaintiff is not entitled to $26,277.10 in Clark relief because that
amount “represents benefits already paid to [Plaintiff] during the periods of erroneous suspension
from 2005 to 2008.” Dkt. 15 at 11. The Appeals Council also extended the time for Plaintiff to
file a civil action to 60 days from his receipt of the letter. Id. at 12. On July 29, 2018, the SSA
sent Plaintiff a letter stating that he had been underpaid $20,840 for the period between March
2018 and June 2018. Dkt. 28 at 9 (Ex. A). The logic by which the letter arrives at that
underpayment figure is difficult to parse. The letter merely states that the SSA paid Plaintiff
“$432,573.90 for March 2018 through June 2018” but “should have paid [him] $453,413.90” for
that period, resulting in an underpayment of $20,840. Id.
On October 17, 2018, Plaintiff moved for judgment of reversal, relying on the same
arguments made in his complaint. Dkt. 27. Rather than respond to that motion or file a motion
for judgment of affirmance, the SSA moved to dismiss, arguing that Plaintiff failed to exhaust
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administrative remedies before filing his lawsuit. Dkt. 28. Plaintiff filed a response, Dkt. 30,
and the SSA replied, Dkt. 31.
II. ANALYSIS
A. Motion to Dismiss
The SSA moves to dismiss the complaint for lack of subject-matter jurisdiction. Dkt. 28
at 1. It argues that “there is no indication that [Plaintiff] raised the issues identified in his
Complaint or Motion for Judgment of Reversal to the Appeals Council;” that the ALJ’s decision
focused on other issues; and that the agency thus “has not had an opportunity to address
Plaintiff’s claim that it still owes him money.” Id. at 3. The SSA further notes that Plaintiff filed
his lawsuit while his case “was pending at SSA’s payment service center for effectuation of ALJ
Skidmore’s favorable decision.” Id. at 5. The SSA then portrays the letter that the agency sent
Plaintiff on July 29, 2018, regarding an underpayment of $20,840, as effectuating ALJ
Skidmore’s decision. Id. at 2. Accordingly, in the agency’s view, “Plaintiff has not exhausted
his administrative remedies regarding the amount the [SSA] owes him” and “has not obtained a
judicially reviewable ‘final decision after a hearing’ on the matter of [the] SSA payments
allegedly owed to him.” Id. at 5.
The Social Security Act’s mandate that a claimant exhaust administrative remedies
comprises two components, a jurisdictional presentment requirement and a non-jurisdictional
exhaustion requirement. See Calderon v. Berryhill, No. 17-494, 2019 WL 95565 (RDM), at *3
(D.D.C. Jan. 3, 2019) (“Calderon I”). The Act provides that “[a]ny individual, after any final
decision of the Commissioner of Social Security made after a hearing . . . may obtain a review of
such decision by a civil action commenced within sixty days after the mailing to him of notice of
such decision or within such further time as the Commissioner of Social Security may allow.”
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42 U.S.C. § 405(g). Another provision of the Act, moreover, makes clear that Section 405(g)
constitutes the exclusive grant of jurisdiction for courts to review the SSA’s decisions. 42
U.S.C. § 405(h) (“No findings of fact or decision of the Commission . . . shall be reviewed by
any person, tribunal, or governmental agency except as herein provided” and “[n]o action against
the United States, the Commissioner of Social Security, or any officer or employee thereof shall
be brought under section 1331 or 1346 of [T]itle 28 to recover on any claim arising under” Title
II of the Social Security Act); see also Am. Hosp. Ass’n v. Azar, 895 F.3d 822, 825 (D.C. Cir.
2018). Although the statute leaves little doubt that Plaintiff’s sole recourse lies in an action
brought pursuant to Section 405(g), the question whether the statutory exhaustion requirement is
jurisdictional has generated substantial litigation. See Shands Jacksonville Med. Ctr. v. Azar,
366 F. Supp.3d 32, 55 (D.D.C. 2018).
Relying on the plain language of the statute, the SSA argues that Section 405(g) “‘clearly
limits judicial review to a particular type of agency action’”—namely, a “final decision” at the
end of the SSA’s “four-step administrative review process.” Dkt. 28 at 4–5 (quoting Califano v.
Sanders, 430 U.S. 99, 108 (1977)). The SSA is correct that, “[o]n its face[,] [Section] 405(g)
thus bars judicial review of any denial of a claim of disability benefits until after a ‘final
decision’ by the Secretary after a ‘hearing.’” Mathews v. Eldridge, 424 U.S. 319, 328 (1976).
But, as the Supreme Court held in Mathews, the “final decision” requirement “consists of two
elements, only one of which is purely ‘jurisdictional’ in the sense that it cannot be ‘waived’ by
the Secretary in a particular case.” Id. “The nonwaivable element is the requirement that a claim
for benefits shall have been presented to the Secretary” because, “[a]bsent such a claim[,] there
can be no ‘decision’ of any type.” Id. In contrast, “[t]he waivable element is the requirement
that the administrative remedies prescribed by the Secretary be exhausted.” Id.15
Exactly what the Mathews Court meant by this has generated disagreement over the past
forty years. Shortly after the Mathews decision, for example, the Supreme Court stressed that
Mathews involved a constitutional challenge, and the Court thus read the decision as an
application of the “principle that when constitutional questions are in issue, the availability of
judicial review is presumed,” and a statutory scheme should not be construed to foreclose review
“unless Congress’s intent to do so is manifested by clear and convincing evidence.” Califano,
430 U.S. at 109 (internal quotation marks omitted). Later, the Supreme Court read Mathews to
stand more broadly for the proposition that “[Section] 405(g) consists of a nonwaivable”
presentment requirement “and a waivable requirement that the” claimant fully pursue “the
administrative remedies prescribed by the Secretary.” Heckler v. Ringer, 466 U.S. 602, 617
(1984). The Court read Mathews to the same effect more recently in Shalala v. Illinois Council
on Long Term Care, Inc., 529 U.S. 1, 15 (2000).
The meaning of “presentment” has also generated some uncertainty. Harking back to the
original explanation in Mathews that “presentment” is required because, “[a]bsent . . . a claim[,]
there can be no ‘decision’ of any type,” 424 U.S. at 328, the D.C. Circuit explained in National
Kidney Patients Association v. Sullivan that the “presentment” requirement arises from
“[Section] 405(g)’s requirement of ‘some decision by the Secretary,’” even if that decision is not
the final word in the administrative process. 958 F.2d 1127, 1131 (D.C. Cir. 1992) (quoting
Mathews, 424 U.S. at 328). As the D.C. Circuit noted, the Mathews Court found that the
presentment requirement was satisfied, “for example, on the basis of the claimants’ having
presented their claims to the local Social Security office and on appeal to the regional office.”
Id. (emphasis added). Other decisions, however, do not—at least explicitly—limit the
“presentment” requirement to circumstances in which there has been “some decision by the
16
Secretary.” See, e.g., Ryan v. Bentsen, 12 F.3d 245, 247 (D.C. Cir. 1993); Cost v. Soc. Sec.
Admin., 770 F. Supp. 2d 45, 48–49 (D.D.C. 2011), aff’d, No. 11-5132, 2011 WL 6759544 (D.C.
Cir. Dec. 2, 2011); see also Belmonte v. Colvin, No. 16-1077-APM, 2016 WL 6584476, at *1
(D.D.C. Nov. 7, 2016); Suarez v. Colvin, 140 F. Supp. 3d 94, 99 (D.D.C. 2015); Nat’l Ass’n for
Home Care & Hospice, Inc. v. Burwell, 77 F. Supp. 3d 103, 109 (D.D.C. 2015).
1. Presentment
Here, as in Calderon, the Court need not pick a side in the debate over whether Section
405(g), as construed in Mathews and its progeny, imposes a jurisdictional “presentment” or
jurisdictional “presentment-plus-initial-decision” requirement. See Calderon I, 2019 WL 95565,
at *4; see also Calderon v. Berryhill, No. 17-494 (RDM), 2019 WL 4575605, at *3 (D.D.C.
Sept. 20, 2019) (“Calderon II”). Under either approach, Plaintiff has readily satisfied Section
405(g)’s presentment requirement, and the SSA’s motion to dismiss under Rule 12(b)(1) is
without merit. Because Plaintiff is proceeding pro se, the Court must construe his complaint
liberally, see Erickson v. Pardus, 551 U.S. 89, 94 (2007), and the complaint can be read to allege
that the ALJ incorrectly treated the $26,277.10 in Clark relief to which Plaintiff was entitled as
an offset. Dkt 1. It was an error to offset that amount against two alleged overpayments
because, according to Plaintiff, (1) he never received $40,000 that the SSA treated as an
overpayment, and (2) the $48,000 that he did receive was to correct an underpayment—that is, it
was not an overpayment at all. Id. As a result, according to the complaint, the SSA should have
paid Plaintiff the full $26,277.10 of Clark relief, without any offset. Id. That argument may or
may not have merit, but there is no doubt that Plaintiff presented it (repeatedly) to the SSA, and
the agency’s arguments to the contrary strain credulity.
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To start, there is no doubt that Plaintiff presented the argument that his Clark relief
should be paid to him rather than used to offset any purported overpayments. In his appeal of
ALJ Skidmore’s initial 2014 decision, Plaintiff wrote that he was “also asking for all [his]
monies due under award ‘Clark v. Astrue’ be awarded to [him] in full—approx. $50,000.” Dkt.
15-5 at 27; see also id. at 29 (again asking, in follow-up letter to the Appeals Council, to be paid
money due under Clark). Plaintiff again raised this argument when appealing the ALJ’s
favorable decision in 2017. Dkt. 15 at 30 (seeking “immediate return of all ‘Clark v. Astrue’
relief monies due”). Nor did the SSA ignore these arguments. In his 2017 decision, for
example, ALJ Skidmore decided that Plaintiff’s Clark relief should be used to reduce his
overpayment, rather than to effect a refund to Plaintiff. Id. at 19–20. Similarly, in declining to
disturb the ALJ’s decision, the Appeals Council referenced Plaintiff’s request for “immediate
refund of all Clark relief money you are due.” Id. at 24.
Plaintiff also raised the arguments on which he predicates his claim that no offset was in
order. He argued repeatedly, almost incessantly, that the SSA’s overpayment calculations were
too high because he never received the $40,000 payment. See, e.g., Dkt. 15-2 at 51 (stating in a
letter regarding a hearing request that he does not owe $40,000 because it was stolen); id. at 62–
63 (complaining, on a form acknowledging a hearing date in 2010, that $40,000 went missing
from his bank and requesting subpoenas to SSA and the bank); Dkt. 15-3 at 5 (requesting review
of a hearing decision in 2011 “[b]ecause $40,000.00 of this overpayment was never received by
me . . . [s]o I feel that I am not overpaid this amount”); Dkt. 15-3 at 8 (complaining of never
receiving $40,000); id. at 59 (including arguments about the missing $40,000 in a 2013 letter to
ALJ Skidmore); Dkt. 15-4 at 3 (arguing to the Appeals Council in 2014 that he never received
$40,000); Dkt. 15 at 33 (arguing to the Appeals Council in a 2017 email that there was no
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overpayment at all in Plaintiff’s case because, in part, he never received $40,000). That Plaintiff
made his argument about never receiving a $40,000 payment to the agency is beyond dispute.
The SSA also addressed this argument in its decisions. In his 2014 decision, ALJ
Skidmore began the “summary of the evidence” section by noting that, at the hearing, Plaintiff
“testified that he was owed $40,000 in back payment.” Dkt. 15-5 at 18. But based on the
“detailed statement of paid versus payable” from one of the SSA’s prior letters to Plaintiff, the
ALJ concluded that Plaintiff was overpaid $86,855.80 and that no underpayment was due. Id. at
18–19. In his 2017 decision, ALJ Skidmore did not explicitly mention the $40,000 payment, but
he again found that Plaintiff had not been underpaid. Dkt. 15 at 22. And in its September 25,
2017 denial of Plaintiff’s request for review, the Appeals Council noted that Plaintiff sought
“payment of back pay of $40,000 [he] never received after winning [his] case” but agreed with
the ALJ that Plaintiff had not been underpaid. Id. at 24.
The same is true with respect to the $48,000 payment, which Plaintiff has consistently
maintained was not an overpayment but, rather, was a payment made to correct a previous
underpayment. He argues in the complaint that the SSA’s calculation that it overpaid him
$85,305.80 was erroneous because it mistakenly included the (approximately) $48,000 that
Plaintiff received in 2008 to correct an underpayment in his case. Dkt. 1 at 4 (Compl. ¶ 11). The
SSA actually paid Plaintiff $45,549.50 to correct the underpayment. Dkt. 15-2 at 71. Although
Plaintiff’s math is fuzzy, he makes clear that his statements about $48,000 refer to these same
2008 payments. Dkt. 15-3 at 59 (distinguishing in a 2013 filing with ALJ Skidmore between the
$40,000 Plaintiff alleges he never received and the separate “$20,000 + $25,000 = $48,000
payment”).
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Although Plaintiff did not always mention the $48,000 figure (or the correct amount of
$45,549.50), he argued throughout the agency process that the SSA’s overpayment calculations
incorrectly included the back payments he received in 2008. See, e.g., Dkt. 15-1 at 35
(contending in a 2009 request for waiver that it “appears overpayment partially was my back
payment awarded on 11/07 by administrative law judge”); Dkt. 51-2 at 99 (asserting in a 2012
request for reconsideration that the alleged overpayment was actually “back payment from
winning [Plaintiff’s disability] case”); Dkt 15-3 at 2 (arguing on a 2012 hearing request form that
the alleged overpayment is instead a “back payment” that is “legal”); Dkt. 15 at 32 (arguing to
the Appeals Council in 2017 that the ALJ’s decision was “illegal” because the overpayment
amount “is indeed the actual award monies granted” to Plaintiff as “three years back pay”).
Despite his imprecision, Plaintiff unambiguously maintained that ALJ Skidmore’s overpayment
calculation was incorrect because it included the money Plaintiff received in 2008 to correct a
previous underpayment.
The SSA necessarily considered this issue in evaluating whether the agency had overpaid
Plaintiff and whether that overpayment should be waived. In his 2017 decision, ALJ Skidmore
determined that Plaintiff had been overpaid $85,305.80; that “there is no indication the claimant
has not received all benefits owed to him;” and that “no underpayment has occurred.” Dkt. 15 at
22. In declining to review the ALJ’s decision, the Appeals Council included a paragraph
discussing the payments of $20,349.50 and $25,200 that Plaintiff received in 2008 but credited
the ALJ’s determination that, all told, Plainitff had been overpaid $85,305.80. Id. at 24.
Finally, albeit less frequently, Plaintiff argued before the SSA that he was entitled to a
refund of the money that the SSA had previously withheld from his disability checks. In his
appeal of the ALJ’s 2017 decision, for example, Plaintiff sought “immediate return of all monies
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paid by this writer in back payments as I was not at fault.” Dkt. 15 at 29. The ALJ, moreover,
found that “there [was] no indication [that] the claimant ha[d] not received all benefits owed to
him.” Id. at 22. In its letter affirming that decision, the Appeals Council noted that Plaintiff
sought an “immediate refund of all money collected/recovered with respect to the overpayments”
but noted that the ALJ “found that [Plaintiff] [was] not underpaid.” Id. at 24.
The Court is, accordingly, persuaded that Plaintiff presented the claim that he asserts in
this case to the SSA, as required by the Act. The SSA’s argument to the contrary cannot be
squared with even a cursory review of the extensive administrative record.
2. Exhaustion
The SSA’s alternative argument that this action is premature because Plaintiff filed suit
when his claim was still “pending at SSA’s payment service center for effectuation of ALJ
Skidmore’s favorable decision,” Dkt. 28 at 5, does not challenge whether Plaintiff presented his
claim, but rather whether he exhausted all of his administrative remedies, which raises, at most, a
non-jurisdictional exhaustion defense. A waivable, non-jurisdictional exhaustion requirement,
however, constitutes an affirmative defense, and, thus, in the usual course is not best resolved at
the motion to dismiss stage, where the complaint need not—and often does not—offer the detail
necessary to decide whether the defense is meritorious. See Calderon II, 2019 WL 4575605, at
*3–4.
In Jones v. Bock, 549 U.S. 199 (2007), the Supreme Court clarified that, when exhaustion
is non-jurisdictional, plaintiffs “are not required to specially plead or demonstrate exhaustion in
their complaints.” 549 U.S. at 216. A plaintiff raising a claim under Section 405(g), therefore,
need plead and prove only the jurisdictional “presentment” requirement; to the extent the failure
to exhaust is just an affirmative defense, the plaintiff is “free to omit” it from his complaint, Kim
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v. United States, 632 F.3d 713, 719 (D.C. Cir. 2011); see also Bowden v. United States, 106 F.3d
433, 437 (D.C. Cir. 1997) (holding that “the defendant bears the burden of pleading and proving”
exhaustion when it is an affirmative defense). To be sure, “even when failure to exhaust is
treated as 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. DEA, 492 F.3d 428, 438
(D.C. Cir. 2007). But that is not the case here. To the contrary, Plaintiff’s complaint includes
little reference to the procedural history of his administrative claim. Dkt. 1. Beyond that
procedural roadblock, even if the Court were to consider the SSA’s contention that Plaintiff has
yet to fully exhaust his claim because it remains “pending at SSA’s payment service center for
effectuation of ALJ Skidmore’s favorable decision,” Dkt. 28 at 5, more would be required for the
agency to meet its burden. For one thing, considerable tension exists between the SSA’s
contention that Plaintiff never raised a claim for payment of the $26,277.10 of Clark relief,
without any offset, and its suggestion that the payment service center is still deciding whether to
make such a repayment. And, even more to the point, nothing in either ALJ Skidmore’s or the
Appeals Council’s decision suggests that the SSA had more to decide with respect to the issue
Plaintiff now presses. The SSA may have evidence to the contrary, but it has yet to offer that
evidence to the Court, nor could it have properly done so in support of a motion to dismiss based
on a non-jurisdictional exhaustion defense.
B. Compensatory and Punitive Damages
Plaintiff asserts a claim for compensatory and punitive damages. Dkt 1 at 5 (Compl. ¶
13). Although the SSA did not address this claim in its motion to dismiss, the Court has “an
independent obligation to determine whether subject-matter jurisdiction exists, even in the
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absence of a challenge from any party,” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006). The
Court will therefore consider whether it has jurisdiction over Plaintiff’s claim for damages.
Plaintiff invokes the Court’s jurisdiction under both 42 U.S.C. § 405 and 28 U.S.C. §
1331, the statute conferring federal question jurisdiction. Dkt. 1 at 2 (Compl. ¶ 1). Although
Section 405 confers jurisdiction on federal courts to review final actions of the SSA, it
simultaneously bars suits premised on 28 U.S.C. § 1331. See 42 U.S.C. § 405(h) (“No action
against the United States, the Commissioner of Social Security, or any officer or employee
thereof shall be brought under section 1331 . . . of title 28 to recover on any claim arising under
[Title II of the Act].”). As a result, Plaintiff’s assertion of subject-matter jurisdiction rises or
falls based on Section 405(g), and, to the extent he seeks damages (as opposed to declaratory or
injunctive relief), his argument falls.
The authority granted to the federal courts by Section 405(g) is circumscribed. The
statute declares: “The court shall have power to enter, upon the pleadings and transcript of the
record, a judgment affirming, modifying, or reversing the decision of the Commissioner of
Social Security, with or without remanding the cause for a rehearing.” 42 U.S.C. § 405(g). The
statute, which is the sole source of the Court’s jurisdiction, says nothing about the award of
damages. Moreover, and even beyond that decisive infirmity with Plaintiff’s damages claim, he
has failed to identify any applicable waiver of sovereign immunity. It is settled beyond question
“that the United States may not be sued without its consent and that the existence of consent is a
prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983).
Even when the United States does waive its immunity, the Court must still “strictly
construe[]” the waiver “in terms of its scope, in favor of the sovereign,” and, “[t]o sustain a claim
that the Government is liable for awards of monetary damages, the waiver of sovereign
23
immunity must extend unambiguously to such monetary claims.” Lane v. Peña, 518 U.S. 187,
192 (1996). Here, nothing in Section 405(g) waives the sovereign immunity of the United States
with respect to claims for damages, see, e.g., De Lao v. Califano, 560 F.2d 1384, 1391 (9th Cir.
1977); Robinson v. Sec’y of Health & Human Servs., No. 89-1199, 1989 WL 109432, at *1 (6th
Cir. Sept. 22, 1989); Nzongola v. Astrue, 863 F. Supp. 2d 25, 28 (D.D.C. 2012); Lloyd v. Shalala,
No. 92 Civ. 9454 (JSM), 1993 WL 299291, at *1 (S.D.N.Y. Aug. 4, 1993), and Plaintiff fails to
identify any other waiver of sovereign immunity for damage claims relating to the adjudication
of social security benefits.
The Court therefore lacks jurisdiction to adjudicate Plaintiff’s claim for damages and
will, accordingly, dismiss that claim.
C. Motion for Judgment of Reversal
This, then, leaves Plaintiff’s motion for judgment of reversal. Dkt. 27. In seeking
affirmative relief, Plaintiff once again argues (1) that ALJ Skidmore “contradict[ed his] fully
favorable decision” and “seize[d] Plaintiff’s Clark v. Astrue monies,” id. at 2; (2) that Plaintiff
never received an additional lump sum of $40,000, id.; (3) that “$48,000 is not an overpayment”
because it was Plaintiff’s “original award,” id.; and (4) that the SSA should repay Plaintiff the
money it had previously withheld to offset overpayments, id. at 3. Complicating the Court’s
consideration of this motion is the fact that the SSA did not respond to it, at least not on the
merits. The SSA’s motion for judgment of affirmance was due December 14, 2018. See Minute
Order (October 5, 2018). But the agency never responded, opting instead to file its motion to
dismiss on December 13, 2018. Because the SSA failed to respond to Plaintiff’s motion for
judgment of reversal, the Court must treat Plaintiff’s uncontested evidence, insofar as he presents
any, as true for purposes of resolving the pending motion. See Fed. R. Civ. P. 56(e)(2); see also
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Winston & Strawn, LLP v. McLean, 843 F.3d 503, 507 (D.C. Cir. 2016); Local Civ. R. 7(h)(1).
At the same time, the Court must resolve any legal questions posed by Plaintiff’s motion without
the benefit of briefing from the SSA. See Winston & Strawn, LLP, 843 F.3d at 507.
As a general rule, the SSA’s benefits decisions are entitled to substantial deference. See
Cunningham v. Heckler, 764 F.2d 911, 915 (D.C. Cir. 1985) (describing the “narrow” scope of
judicial review in “cases involving disability determinations under the Social Security Act”).
The Court must affirm the agency’s decision if it is based on “substantial evidence.” Biestek v.
Berryhill, 139 S. Ct. 1148, 1154 (2019) (explaining that “the threshold for such evidentiary
sufficiency is not high”). Substantial evidence is “‘such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.’” Butler v. Barnhart, 353 F.3d 992, 999 (D.C.
Cir. 2004) (quoting Richardson v. Perales, 402 U.S. 389, 401 (1971)). The test requires “more
than a scintilla, but can be satisfied by something less than a preponderance of the evidence.” Id.(internal quotation marks omitted). But even though the standard is deferential, the Court “must
carefully scrutinize the entire record.” Id.The substantial evidence standard applies to review of both SSA overpayment and
underpayment decisions. McCarthy v. Apfel, 221 F.3d 1119, 1125 (9th Cir. 2000). Although the
D.C. Circuit has not ruled on which party bears the burden of establishing the fact and amount of
overpayments, those circuits that have considered the question have held that the burden falls on
the SSA. See id. at 1124; see also Cannuni ex rel. Cannuni v. Schweiker, 740 F.2d 260, 263 (3d
Cir. 1984); United States v. Smith, 482 F.2d 1120, 1124 (8th Cir. 1973).
Applying these rules to this case presents the Court with something of a Gordian knot.
The Court’s review under the substantial evidence standard must be deferential . . . but for
proving overpayments, the burden rests on the agency . . . and the agency did not file a response
25
to Plaintiff’s motion for judgment of reversal . . . and the Court must consequently treat
Plaintiff’s uncontested assertions of fact as true. Two considerations, however, provide a path
forward: first, the only relevant facts before the Court are those contained in the administrative
record, and, second, social security cases, like this one, require courts to scrutinize the
administrative record to determine whether the agency’s decision was based on substantial
evidence. With those considerations in mind, the Court can cut the Gordian knot.
To determine the amount of Plaintiff’s outstanding overpayments, the 2017 ALJ decision
started by identifying the specific periods during which Plaintiff was overpaid because he was
incarcerated, institutionalized, or a fugitive. Dkt. 15 at 19. The ALJ then consulted Plaintiff’s
Master Beneficiary Record, which sets out Plaintiff’s periods of suspension and shows a partial
recovery balance of $62,505.80 and another partial recovery balance of $22,800.00, for a total
overpayment of $85,305.80. Dkt. 15-6 at 75, 78. Pursuant to Clark, the ALJ reduced Plaintiff’s
overpayment balance by $26,277.10 for the periods when Plaintiff had been incorrectly deemed
ineligible for benefits based on warrants for violation of probation or parole, leaving a remaining
total of $59,028.70. Dkt. 15 at 19–20. But because Plaintiff was not at fault for the overpayment
and because he could not afford to pay the money back, the ALJ waived recovery of the
overpayment. Id. at 20–22. Finally, the ALJ concluded that “[b]ecause there is no indication the
claimant has not received all benefits owed to him, and because the claimant was able to repay
the overpayment, regardless of fault, through August 2, 2017, no underpayment ha[d] occurred.”
Id. at 22. Each step in the ALJ’s reasoning finds support in the record.
Plaintiff’s arguments, at least without further substantiation, do not cast serious doubts on
the soundness of the ALJ’s logic. Plaintiff first argues that the $26,277.10 of Clark relief should
be paid to him, rather than used to reduce his overpayment. Dkt. 27 at 1. He seems to
26
misapprehend the nature of the ALJ’s Clark analysis. The ALJ did not find that Plaintiff had
been underpaid $26,277.10. Rather, he determined that Plaintiff had already been paid the
$26,277.10 and that those past payments were not overpayments because Plaintiff remained
eligible for benefits while subject to warrants for probation or parole violations. Dkt. 15 at 19–
20. Following this logic, Plaintiff is not entitled to receive the $26,277.10 payment because he
has already received it; the ALJ simply found that the $26,277.10 was not an overpayment,
which would have required that Plaintiff repay the amount to the SSA.
Next, Plaintiff argues that the total overpayment amount of $85,305.80 is “false” because
he never received $40,000 and because the payments he received in 2008 totaling $48,000 were
not overpayments but, instead, were issued to correct previous underpayments. Dkt. 27 at 2. As
to the $40,000, there is no evidence in the existing record, aside from Plaintiff’s own,
unsupported assertions, that Plaintiff was ever due a $40,000 check or, even if he were due such
a check, that he did not receive it. To the extent Plaintiff claims that the $40,000 was stolen from
his bank account by a third-party, perhaps including “anti-government factions,” Dkt. 27 at 3, a
social security appeal is not the proper mechanism for investigating or prosecuting such a crime.
In any event, there is no indication in the record that the ALJ included this $40,000 in his
calculations in reaching the total of $85,305.80.
As to the $48,000 (really $45,549.50), the existing record indicates that Plaintiff received
that money in 2008 as compensation for what the agency believed at the time were past
underpayments, but that the SSA later discovered Plaintiff should not have been paid (some or
all of) that money, because he was actually ineligible for benefits during the relevant time period.
Tracking the $45,549.50 through the administrative process, based on the record before the
Court, is not easy. First, an ALJ in November 2007 determined that Plaintiff had been underpaid
27
$45,549.50 for three years when the SSA incorrectly deemed him no longer disabled and stopped
paying his benefits. Dkt. 15-2 at 64–67; Dkt. 15-2 at 71. Once the agency paid Plaintiff the
$45,549.50 in 2008, that money stopped being an underpayment and simply became a payment,
part of the total benefits that Plaintiff had received. The SSA later determined, however, that at
least some portion of those back payments to Plaintiff was issued in error, because outstanding
warrants for his arrest rendered him ineligible for benefits during the period when the SSA had
originally determined he was underpaid. Dkt. 15-2 at 94. Because the ALJ did not explicitly
mention the $45,549.50 figure in explaining his tabulation of Plaintiff’s overpayments, the
record is unclear with respect to what portion of that money he counted as an overpayment. The
Court’s best reading of the ALJ’s decision suggests that the ALJ counted at least some of
Plaintiff’s back pay award of $45,549.50 as part of the overall overpayment, because the ALJ
determined that Plaintiff was ineligible for benefits as a fugitive felon during date ranges—from
May 2005 to August 2005; February 2006 to September 2006; and January 2007 to April 2008—
that coincide with the period of time from 2004 to 2007 originally covered by the back
payments. Dkt. 15 at 19. But nothing precludes the SSA, either legally or logically, from
determining that it had overpaid Plaintiff in the process of compensating him for what it had
previously thought was an underpayment. The ALJ carefully explains exactly when Plaintiff
received benefits despite being ineligible for them, and his calculation of Plaintiff’s overpayment
therefore appears to be supported by substantial evidence.
That said, the letter that Plaintiff received on July 29, 2018 notifying him that he had
been underpaid $20,840, Dkt. 28 at 9 (Ex. A), does give the Court some pause in reviewing the
ALJ’s 2017 finding that Plaintiff had not been underpaid. Given the size of Plaintiff’s monthly
checks, it would not be possible for that $20,840 underpayment to have accrued within the year
28
between the ALJ’s decision and the letter from the payment processing center. Thus, there
appears to be some tension between the ALJ’s decision and the July 29, 2018 letter. But because
Plaintiff does not raise any argument based on the letter in his motion for judgment of reversal
and because it is difficult for the Court to parse the apparent conflict between the documents
without further briefing from the parties, the Court cannot conclude on the present record that the
ALJ’s overpayment calculation is unsupported by substantial evidence.
Finally, Plaintiff argues that, given the ALJ’s “favorable” decision, he is entitled to a
refund for the withholdings that the SSA had made from his benefits to recover his
overpayments. Dkt. 27 at 3. It is not entirely clear to which withholdings Plaintiff is referring.
If he means the $50 per month that the SSA began withholding from his payments (with his
agreement) in 2001 to recover overpayments made during periods when Plaintiff was employed
or incarcerated between 1997 and 2001, see Dkt. 15 at 58–59, those issues were fully adjudicated
in a prior agency proceeding, and that previous decision of the SSA is not before the Court. If,
instead, Plaintiff seeks repayment of benefits that were withheld during a more recent period of
suspension, it is at least possible that he might have a claim, but his motion for judgment of
reversal is too vague for the Court to determine whether Plaintiff may have been underpaid at
some point in the past 20 years. For these reasons, the Court is unpersuaded that the ALJ’s
decision, which is the final decision of the SSA in Plaintiff’s case, is unsupported by substantial
evidence.
CONCLUSION
For the foregoing reasons, the SSA’s motion to dismiss, Dkt. 28, is DENIED. The
Court, acting sua sponte, DISMISSES Plaintiff’s claims seeking monetary damages against the
29
SSA. Finally, Plaintiff’s motion for judgment of reversal, Dkt. 27, is hereby DENIED without
prejudice.
That does not end this case. Because the SSA never filed a motion for judgment of
affirmance, the Court cannot enter judgment in the agency’s favor at this point in the litigation.
And, conversely, because Plaintiff is proceeding pro se and because the SSA never responded to
his motion for judgment of reversal, the Court will grant him an opportunity to renew his motion.
The Court will, accordingly, hold a telephonic scheduling conference on October 15, 2020 at 2
p.m. to address next steps in this proceeding. The deputy clerk will provide the parties with the
telephone number and access code to use for the scheduling conference.
SO ORDERED
/s/ Randolph D. Moss
RANDOLPH D. MOSS
United States District Judge
Date: September 16, 2020
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