Connally v. Commissioner, Social Security Administration

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

BRIAN A. C. §

§

Plaintiff, §

§

V . § No. 3:21-cv-710-BN

§

KILOLO KIJAKAZI, ACTING §

COMMISSIONER OF SOCIAL '

SECURITY ADMINISTRATION, §

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Defendant. §

MEMORANDUM OPINION AND ORDER

Plaintiff Brian A. C. seeks a writ of mandamus to compel adjudication of his

request for waiver of overpayment of disability insurance benefits under Title II and

judicial review of a final adverse decision denying his claim for supplemental security

income payments under Title XVI.

For the reasons explained below, the hearing decision is affirmed in part and

reversed in part.

Background

Plaintiff filed his first applications for disability insurance benefits and

supplemental security income (“SSI”) on October 24, 2007. See Dkt. No. 16-1

(Administrative Record (“AR”)) at 134. His date last insured had expired the previous

year. See id. at 107. The Commissioner denied the applications on October 25, 2007.

See id. at 134. Because of the denial’s res judicata effect, see 20 C.F.R. § 404.957(c)(1),

Plaintiff effectively forfeited his eligibility for disability insurance benefits.

But the Commissioner accepted applications for both SSI and disability

insurance benefits on March 10, 2014. See id. at 133, 134. After a hearing on the

merits, Administrative Law Judge (“ALJ”) Raymond J. Malloy issued a favorable

decision awarding both applications on March 16, 2016, see id. at 95, 106, and

Plaintiff soon began receiving disability insurance benefits, see id. at 409.

Unlike Title II applicants, claimants seeking SSI benefits must show limited

income and resources. See 42 U.S.C. § 1382(a)(1)(A)–(B) (2020); 20 C.F.R. § 416.1100.

Consequently, many claimants who are approved for SSI and disability insurance

benefits find that the disability insurance benefit payments end up disqualifying

them from receiving SSI. That was the case here.

On April 16, 2016, Plaintiff’s SSI claim was denied for “excess resources.” Dkt.

No. 16-1 at 15. Plaintiff did not appeal the denial of SSI benefits.

ALJ Malloy apparently discovered his error in awarding disability insurance

benefits and issued an amended decision on May 18, 2016. The only change was the

ALJ’s revision of the onset date of disability from January 1, 2005, to October 26,

2007, which was one day after the initial denial of disability insurance benefits. See

id. at 107, 109. This had the effect of approving SSI benefits and denying disability

insurance benefits. The ALJ found that Plaintiff had been disabled since October 26,

2007, and instructed the Commissioner to advise Plaintiff of the non-disability

requirements for SSI and, if Plaintiff was eligible, the amounts and dates for which

payments would be made. See id. at 110. Plaintiff unsuccessfully appealed and the

amended decision became final. See id. at 417.

The Commissioner then demanded Plaintiff repay $48,930.90 in disability

insurance benefits it previously sent him in error. See id. at 427.

Plaintiff filed his third application for SSI on February 29, 2018. See id. at 241,

415. He also requested a waiver of the recovery of the $48,930.90 overpayment of

disability insurance payments. See id. at 415. Although the administrative record

does not include Plaintiff’s waiver request, the Commissioner acknowledged receipt

of the waiver request, which it denied on September 21, 2018. See id. at 430. On

October 16, 2018, the Commissioner again denied the waiver request and informed

Plaintiff of his right to request a hearing before an ALJ. See id. at 432.

On November 7, 2018, Plaintiff requested a hearing before an ALJ regarding

the overpayment. See id. at 434, 436. The parties agreed that the request for hearing

on waiver of the overpayment would be consolidated with the hearing on denial of

SSI. See Dkt. No. 19 at 9; Dkt. No. 20 at 1 n.1.

But the notice of hearing stated that the ALJ would consider only the February

20, 2018, application for SSI. It did not mention the request for an overpayment

waiver. See Dkt. No. 16-1 at 194. At the February 24, 2020, hearing, ALJ Mark

Mendola was unaware of the waiver request and knew only of the SSI application.

See id. at 44-45, 47-48. He questioned whether he had jurisdiction to hear the

overpayment request and, if he did, observed there was insufficient evidence in the

record for him to evaluate the merits. He asked Plaintiff to submit any documents

necessary to establish his jurisdiction and regarding the merits of the overpayment

request. See id. at 48, 50. He then proceeded to hear only the SSI issue stated in the

notice of hearing, see id. at 51, and he issued an unfavorable decision denying

Plaintiff’s SSI application, see id. at 12, 34.

Plaintiff filed a request for review, see id. at 238-40, which the Appeals Council

denied on January 21, 2021, see id. at 1, making the ALJ’s decision final. The Appeals

Council also addressed the overpayment issue.

You asked us to review the denial of your request for waiver of

overpayment. The Administrative Law Judge did not make a decision

regarding this issue. We are sending your request to the Administrative

Law Judge for action. The Administrative Law Judge will write you and

your representative about the action taken on your request for a

hearing. A copy of our memorandum to the Administrative Law Judge

is enclosed.

Id. at 3. The memorandum to ALJ Mendola directed him establish a record and issue

a decision on the overpayment issue:

The claimant filed a Title XVI application for Supplemental Security

Income in February 2018. The question before you was whether the

claimant was disabled based on this application. The Notice of hearing

explained that the hearing will resolve medical issues under Title XVI.

Although the representative asked you to consolidate the overpayment

issue, there was no requirement for you to do so. Therefore, the Appeals

Council concludes that you properly adjudicated the Title XVI claim

before you.

We are asking you to establish a record relating to the claimant’s request

for overpayment; determine if the request for hearing on the

overpayment was timely filed; and as warranted, schedule a hearing and

issue a decision regarding the issue of the claimant’s overpayment.

Id. at 6 (record citations omitted).

Plaintiff’s attorney notified ALJ Mendola of the memorandum more than once

but has not heard back from the ALJ. See id. at 11, 14. The Administration’s attorney

informed Plaintiff’s attorney that after inquiry she was informed “[t]he Judge looked

at it and does not see anything before him to make a decision on.” Id. at 7.

Plaintiff then filed this action in Federal Court. Plaintiff (1) seeks a writ of

mandamus to compel the Commissioner to adjudicate his request for waiver of the

overpayment of disability insurance benefits and (2) challenges the Agency’s failure

to apply the medical improvement standard when it denied SSI benefits for a non-

medical reason after Plaintiff previously had been found disabled.

Legal Standards and Analysis

I. Plaintiff is entitled to mandamus relief on the overpayment waiver request.

Plaintiff cites the Mandamus Act, 28 U.S.C. § 1361, and the Administrative

Procedure Act, 5 U.S.C. § 706(1), as grounds for the Court’s exercise of jurisdiction

over his waiver request.

The Administrative Procedures Act (“APA”) provides that “[a] person

suffering a legal wrong because of agency action, or adversely affected

or aggrieved by agency action within the meaning of a relevant statute,

is entitled to judicial review thereof.” 5 U.S.C. § 702. This includes

judicial review to “compel agency action unlawfully withheld or

unreasonably delayed.” Id. § 706(1). See also Brock v. Pierce County, 476

U.S. 253, 260 n. 7, 106 S. Ct. 1834, 1839 n. 7, 90 L. Ed.2d 248 (1986)

(noting that APA permits district court to compel agency action); United

States v. Popovich, 820 F.2d 134, 137 (5th Cir.), cert. denied, 484 U.S.

976, 108 S. Ct. 487, 98 L. Ed. 2d 485 (1987) (same). The APA, standing

alone, does not provide a basis for the exercise of subject matter

jurisdiction. Califano v. Sanders, 430 U.S. 99, 107, 97 S. Ct. 980, 985, 51

L. Ed. 2d 192 (1977). However, a federal district court has jurisdiction

over “all civil actions arising under the Constitution, laws, or treaties of

the United States.” 28 U.S.C. § 1331. This statute, in combination with

the APA, vests the court with jurisdiction to compel agency action that

is unreasonably delayed or withheld. Sierra Club v. Glickman, 156 F.3d

606, 617 (5th Cir.1998) (holding that suit to compel agency action could

be brought under APA); see also Hu v. Reno, 2000 WL 425174 at *1 (N.D.

Tex. Apr. 18, 2000); Yu v. Brown, 36 F. Supp. 2d 922, 933 (D.N.M.1999);

Sze v. INS, 1997 WL 446236 (N.D. Cal. July 24, 1997); Fraga v. Smith,

607 F. Supp. 517, 521 (D.Or.1985).

Felicia W. v. Berryhill, No. 3:17-cv-2649-D-BN, 2018 WL 3321254, at *5 (N.D. Tex.

June 13, 2018) (quoting Alkenani v. Barrows, 356 F. Supp. 2d 652, 656 (N.D. Tex.

2005).

Federal courts are to invoke jurisdiction to compel agency action only when the

circumstances clearly require judicial intervention.

Much like mandamus relief [under 28 U.S.C. § 1361], such relief under

the APA is considered an extraordinary measure. See, e.g., Chromcraft

Corp. v. E.E.O.C., 465 F.2d 745, 747 (5th Cir. 1972) (explaining that Ҥ

706 ... requires ... a showing of prejudice before agency action can be set

aside for its lack of punctuality.”).

Because compelling agency action is an extraordinary remedy

regardless of the statute from which the remedy derives, relief is

appropriate, and jurisdiction lies, only when the plaintiff can establish

“a clear right to the relief sought, a clear duty by the defendant to do the

particular act, and that no other adequate remedy is available.”

Newsome v. E.E.O.C., 301 F.3d 227, 231 (5th Cir. 2002). The duty owed

must be plainly defined, nondiscretionary, and free from doubt, and the

act must be purely ministerial. See Dunn-McCampbell Royalty Interest,

Inc. v. National Park Service, 112 F.3d 1283, 1288 (5th Cir. 1997).

Id. (quoting Alsharqawi, v. Gonzales, No. 3:06-cv-1165-N, 2007 WL 1346667, at *2-3

(N.D. Tex. Mar. 14, 2007)).

Plaintiff has established jurisdiction because he has shown (1) a clear right to

have his request for waiver of overpayment of disability insurance benefits

adjudicated (and within a reasonable time), (2) a clear duty by the Commissioner to

do so, and (3) that no other adequate remedy exists. See id.

First, Plaintiff has established a clear right to relief. “To present a clear and

certain right to relief, [a plaintiff] must establish a prima facie case that [the

defendants] have failed to adjudicate his applications within a reasonable time, and

show that no other remedy exists.” Id. (citing Yu, 36 F. Supp. 2d at 932).

An overpaid individual has a right to request that recovery of any overpayment

in disability insurance benefits from him be waived, see 20 C.F.R. § 404.522(c), and

to request a hearing before an ALJ on an initial decision denying an adjustment or

recovery of an overpayment, see 20 C.F.R. § 404.930(a)(6), (a)(7). After the request for

hearing is filed, the Deputy Commissioner has a non-discretionary duty to appoint

an ALJ to conduct the hearing. See 20 C.F.R. § 404.929.

Plaintiff's Complaint alleges that he filed a request for waiver of the

overpayment of disability insurance benefits on February 19, 2018. He requested a

hearing on the waiver request on March 27, 2019. On January 21, 2021, the Appeals

Council appointed an ALJ to establish a record on the waiver issue, determine

whether the request for waiver was timely filed and, if so, to conduct a hearing and

issue written findings determining whether a waiver can be granted. The

Commissioner acknowledges the ALJ has not yet done so but argues the Court does

not have mandamus jurisdiction because the ALJ has not yet denied the request for

a hearing.

The Commissioner has a duty to adjudicate Plaintiff's request for waiver of the

overpayment of disability insurance benefits within a reasonable time. Although

Plaintiff points to no particular time period in which the Commissioner was required

to act, under Section 555(b) of the APA described above, “when Congress fails to

specify ‘a time by which an adjudication should be made, ... the necessary implication

[is that] adjudication must occur within a reasonable time.’” Felicia W., 2018 WL

3321254, at *7 (quoting Alsharqawi, 2007 WL 1346667, at *4 (quoting Yu, 36 F. Supp.

2d at 932)).

Without explanation from the Commissioner for the four-year delay in

adjudicating Plaintiff's request for waiver of the overpayment of disability insurance,

the Court concludes that the length of time Plaintiff’s waiver request has been

pending is unreasonable.

Second, Plaintiff has established that the Commissioner had a clear duty to

adjudicate his request for waiver of the overpayments.

An overpaid individual has a right to request a waiver of the overpayment, see

20 C.F.R. § 404.522(c ), and a hearing before an ALJ on the denial of waiver, see 20

C.F.R. § 404.930(a)(6), (a)(7). When an overpaid individual is dissatisfied with the

denial of a request for a waiver of an overpayment, the Commissioner will appoint an

ALJ to conduct a hearing. See 20 C.F.R. § 404.929. After the hearing, the ALJ will

issue written findings and determine whether the overpayment waiver request can

be granted. See 20 C.F.R. § 404.523(a), (b).

Here, in its second denial of Plaintiff’s request for a waiver of the overpayment,

the Commissioner informed Plaintiff of his right to request the denial be reviewed by

an ALJ. The Appeals Council appointed ALJ Mendola and instructed him to establish

a record on Plaintiff’s request for a waiver of the overpayment of disability insurance

benefits, determine whether the request for hearing was timely filed, and, if so, to

schedule a hearing and issue a written decision regarding the overpayment issue. See

Dkt. No. 16-1 at 6. The Commissioner implicitly concedes that it had a non-

discretionary duty to adjudicate Plaintiff’s request for a waiver of the overpayment of

disability insurance benefits as it does not challenge these but simply responds the

ALJ has not done so yet.

Third, Plaintiff has established that no other adequate remedy exists.

Although the Social Security Act provides the channels a claimant must navigate to

obtain social security benefits and allows a claimant to obtain judicial review of “any

final decision of the Commissioner,” 42 U.S.C. § 405(g), the Act provides no recourse

to an applicant stuck in limbo due to the Commissioner's failure to promptly

adjudicate applications. See Felicia W., 2018 WL 3321254, at *7; Cf. Alsharqawi, 2007

WL 1346667, at *5 (describing a similar process in the context of applications for

adjustment of citizenship status). Under the APA, the only recourse for such an

applicant is in the courts. See 5 U.S.C. § 706(1). “Therefore, ... neither the [Social

Security Act] nor the APA afford applicants any means ‘other than resort to this

Court[ ] to challenge this alleged agency malfeasance.’” Id.; see generally Family

Rehab., Inc. v. Azar, 886 F.3d 496, 505-06 (5th Cir. 2018) (explaining that where “a

plaintiff seeks to compel an officer ... to perform an allegedly nondiscretionary duty

owed to the plaintiff,” the plaintiff is not required to exhaust her administrative

remedies, and that, “for such requests, mandamus is plainly the appropriate means

for relief” (cleaned up).

Because Plaintiff has established a clear duty by the Commissioner to

adjudicate Plaintiff's request for a waiver of the overpayment of disability insurance

benefits within a reasonable time, Plaintiff's clear right to receive that decision within

a reasonable time, and that no other adequate remedy is available, Plaintiff has

carried his burden and established that jurisdiction is proper under the APA and 28

U.S.C. § 1331 and is entitled to mandamus relief.

II. There was no duty to apply the medical improvement standard.

Plaintiff contends the Commissioner erred by denying his SSI application for

non-medical reasons, after it had previously determined he was medically qualified

to receive SSI benefits, without first applying the medical improvement standard.

Judicial review in social security cases is limited to determining whether the

Commissioner’s decision is supported by substantial evidence on the record as a

whole and whether the Commissioner applied the proper legal standards to evaluate

the evidence. See 42 U.S.C. § 405(g); Copeland v. Colvin, 771 F.3d 920, 923 (5th Cir.

2014); Ripley v. Chater, 67 F.3d 552, 555 (5th Cir. 1995). Substantial evidence is

“more than a mere scintilla. It means such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S.

389, 401 (1971); accord Copeland, 771 F.3d at 923. The Commissioner, rather than

the courts, must resolve conflicts in the evidence, including weighing conflicting

testimony and determining witnesses’ credibility, and the Court does not try the

issues de novo. See Martinez v. Chater, 64 F.3d 172, 174 (5th Cir. 1995); Greenspan

v. Shalala, 38 F.3d 232, 237 (5th Cir. 1994). This Court may not reweigh the evidence

or substitute its judgment for the Commissioner’s but must scrutinize the entire

record to ascertain whether substantial evidence supports the hearing decision. See

Copeland, 771 F.3d at 923; Hollis v. Bowen, 837 F.2d 1378, 1383 (5th Cir. 1988). The

Court “may affirm only on the grounds that the Commissioner stated for [the]

decision.” Copeland, 771 F.3d at 923.

“In order to qualify for disability insurance benefits or [supplemental security

income], a claimant must suffer from a disability.” Id. (citing 42 U.S.C. § 423(d)(1)(A)).

A disabled worker is entitled to monthly social security benefits if certain conditions

are met. See 42 U.S.C. § 423(a).

When an individual is receiving SSI, the Commissioner will conduct periodic

reviews to determine whether that individual continues to meet the requirements of

the law. See 20 C.F.R. § 516.990. The Commissioner may terminate disability benefits

if substantial evidence shows that: (1) “there has been any medical improvement in

the individual's impairment or combination of impairments (other than medical

improvement which is not related to the individual's ability to work);” and (2) “the

individual is now able to engage in substantial gainful activity.” 42 U.S.C. § 423(f)(1).

Medical improvement is defined as “any decrease in the medical severity of [a

claimant's] impairment(s) ... based on improvement in the symptoms, signs, and/or

laboratory findings.” 20 C.F.R. § 404.1594(b)(1). Medical improvement is related to

the ability to work if it results in “an increase in [a claimant's] functional capacity to

do basic work activities.” Id. § 404.1594(b)(3). In determining whether the cessation

of benefits is appropriate, the ALJ must follow an eight-step analysis in which

Commissioner bears the ultimate burden of proof. Id. § 404.1594(f); Griego v.

Sullivan, 940 F.2d 942, 944 (5th Cir. 1991).

Here, the Commissioner denied Plaintiff’s SSI application on procedural

grounds.

On March 16, 2016, ALJ Malloy determined Plaintiff met the medical

requirements to receive SSI. See Dkt. No. 16-1 at 95, 106. Later, in the procedural

history section of his April 14, 2020, decision, ALJ Malloy states that the

Commissioner subsequently dismissed Plaintiff’s SSI claim on April 16, 2016, for

“excess resources.” Id. at 15.

The April 16, 2016 dismissal letter is referred to but not included in the

Administrative Record. Plaintiff attaches his counsel’s copy of it to his brief. See Dkt.

No. 19-1 at 3-5. The Court will consider the letter as a supplemental record because

the Commissioner does not object to it and both parties refer to it in their briefs as if

it were included in the record.

In the April 16, 2016 letter, the Commissioner explains that, although ALJ

Malloy determined Plaintiff met the medical requirements to receive SSI benefits, it

now found that he did not meet the non-medical “rules” and it denied Plaintiff’s SSI

application because Plaintiff did not provide the Commissioner with the information

and evidence it requested. See id. at 3. The Commissioner also informed Plaintiff of

his right to appeal. See id. at 4-5.

In an affidavit included in the record, Plaintiff states that upon inquiry after

he received the April 16, 2016, letter, the Commissioner told him it denied his SSI

application because his disability insurance benefits disqualified him from receiving

SSI, so there was no need to appeal the denial of SSI benefits. See id. at 414. Based

on this representation, Plaintiff did not appeal the denial of SSI benefits, see id., and

declined to cooperate with processing the SSI application, see Dkt. No. 21 at 8.

ALJ Malloy amended his decision on May 28, 2016. By changing the offset date

of disability, the ALJ effectively approved SSI benefits and denied disability

insurance benefits. See Dkt. No. 16-1 at 107, 109. The ALJ found that Plaintiff had

been disabled since October 26, 2007. The ALJ ordered the Commissioner to advise

Plaintiff of the non-medical requirements to receive SSI benefits and, if eligible, the

amounts and dates payments would be made, see Dkt. No. 16-1 at 110, but there is

no evidence in the record that the Commissioner did so. Plaintiff unsuccessfully

appealed and the amended decision is now final.

Plaintiff asserts that the Commissioner must apply the medical improvement

standard when it denies previously awarded SSI benefits. Plaintiff argues that,

despite the prior SSI award in his favor, which had been made final, the ALJ’s April

9, 2020 unfavorable decision effectively determined Plaintiff’s impairments were not

disabling and that the ALJ erred by not applying the medical improvement standard

before terminating his SSI benefits.

The Court disagrees. This is not a situation where Plaintiff was receiving SSI

benefits and the Commissioner conducted a continuance disability review and then

terminated his benefits. Instead, Plaintiff never received SSI benefits. Plaintiff did

not appeal the denial of SSI benefits, and it is too late to do so.

Moreover, although ALJ Malloy reinstated Plaintiff’s SSI award on March 18,

2016, the Commissioner had already denied the SSI award because Plaintiff did not

meet the non-medical requirements, specifically because he failed to provide the

evidence and information it requested. See Dkt. No. 19-1 at 3.

Accordingly, under these facts, the Court finds that the Commissioner was not

required to apply the medical improvement standard before dismissing Plaintiff's SSI

application on non-medical grounds.

Conclusion

The hearing decision is affirmed in part and reversed in part. This case is

remanded to the Commissioner of Social Security to adjudicate Plaintiff's request for

a waiver of the overpayment of disability insurance benefits within a reasonable time.

SO ORDERED.

DATED: August 24, 2022

pels

DAVIDL.HORAN = ———™

UNITED STATES MAGISTRATE JUDGE

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