The opinion
THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:24-cv-00041-MR
KAREN KLYMAN, )
)
Plaintiff, )
)
vs. )
)
MARTIN O’MALLEY, )
Commissioner of Social Security, ) O R D E R
)
and )
)
XAVIER BECERRA, Secretary, U.S. )
Department of Health and Human )
Services, )
)
Defendants. )
________________________________ )
THIS MATTER is before the Court on the Defendants’ Motion to
Dismiss Plaintiff’s Complaint or, in the Alternative, for Summary Judgment.
[Doc. 42].
I. FACTUAL AND PROCEDURAL BACKGROUND
On September 1, 2023, the Plaintiff Karen Klyman (“Plaintiff”) initiated
this action by filing an “Emergency Motion for Immediate Payment,” later
construed as the Plaintiff’s Complaint, in the United States District Court for
the Eastern District of Pennsylvania (“EDPA”). [Doc. 2]. The Plaintiff filed
this action against the Acting Commissioner of Social Security and the
Secretary of the Department of Health and Human Services (collectively,
“Defendants”), asking the Court to strike a Stop Notice sent by the Social
Security Administration (“SSA”) as unconstitutional and to order immediate
emergency payment. [Id. at 8].
On January 8, 2024, the Defendants filed a Motion to Dismiss for
failure to state a claim. [Doc. 19]. On January 19, 2024, the Plaintiff filed a
Motion to Show Cause Why Sanctions Should Not Issue [Doc. 24], and a
Motion for a Temporary Restraining Order and Preliminary Injunction [Doc.
25]. The EDPA denied both of the Plaintiff’s motions. [Docs. 26, 28].
The EDPA then denied the Defendants’ Motion to Dismiss without
prejudice and entered an Order transferring the matter to this Court. [Doc.
33]. The Plaintiff appealed the EDPA’s Order transferring the matter to this
Court to the Third Circuit Court of Appeals. [Doc. 36 at 1]. This Court
stayed the action pending resolution of the Plaintiff’s appeal. On May 31,
2024, the Third Circuit dismissed the Plaintiff’s appeal for lack of appellate
jurisdiction. [Doc. 38 at 1]. This Court subsequently lifted the stay. [Doc.
39].
On August 26, 2024, the Defendants filed the present Motion to
Dismiss the Plaintiff’s Complaint or, in the Alternative, for Summary
Judgment in this Court, arguing that the Plaintiff has failed to exhaust her
administrative remedies. [Doc. 42]. In support of their motion, the
Defendants filed Declarations from Loretta Collier, a Social Insurance
Specialist at the Center for Disability and Program Support for the SSA
[Doc. 43-1: Collier Decl. at 1], and Cristina Prelle, the Executive Director of
the Medicare Operations Division and an Administrative Appeals Judge on
the Medicare Appeals Council at the Departmental Appeals Board [Doc.
43-2: Prelle Decl. at 1]. These Declarations detail the nature of the
Plaintiff’s Social Security benefits as well as the timeline of the Plaintiff’s
case as it has moved through the administrative process.
On August 28, 2024, this Court entered an Order in accordance with
Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), advising the Plaintiff of
her right to respond to the Defendants’ Motion to Dismiss and of the
requirements for filing a response to the Defendants’ alternative summary
judgment motion. [Doc. 44]. On October 21, 2024, in light of the
devastation caused by Tropical Storm Helene, the Court issued a sua
sponte Order granting the Plaintiff fourteen additional days to respond to
the Defendants’ motion. [Doc. 46]. The Plaintiff has not responded, and
the time to do so has expired. These matters are ripe for disposition.
II. STANDARD OF REVIEW
To survive a Rule 12(b)(6) motion to dismiss, “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)
(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A
claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. The purpose of
Rule 12(b)(6) “is to test the sufficiency of a complaint and not to resolve
contests surrounding the facts, the merits of a claim, or the applicability of
defenses.” Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir.
2006) (citation and internal quotation marks omitted). When deciding a
motion to dismiss under Rule 12(b)(6), a court “must accept as true all of
the factual allegations contained in the complaint,” and must “draw all
reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du
Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir.
2011) (citations and internal quotation marks omitted). The Court need not,
however, accept unsupported legal allegations, see Revene v. Charles
Cnty. Comm’rs, 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions
couched as factual allegations, Papasan v. Allain, 478 U.S. 265, 286
(1986), or conclusory factual allegations devoid of any reference to actual
events, United Black Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th
Cir. 1979).
Here, the Defendants move to dismiss the Plaintiff’s Complaint for
failure to exhaust under Rule 12(b)(6) and, alternatively, for summary
judgment. If the Court considers materials outside the pleadings, the Court
must treat a motion to dismiss as one for summary judgment. Fed. R. Civ.
P. 12(d). On a motion to dismiss, however, the Court may consider
documents attached to the motion if those documents “are integral to the
complaint and authentic.” Philips v. Pitt Cnty. Mem’l Hosp., 572 F.3d 176,
180 (4th Cir. 2009) (citation omitted).
III. DISCUSSION
Federal district courts have jurisdiction to review Social Security
determinations pursuant to 42 U.S.C. § 405(g), which provides:
Any individual, after any final decision of the
Commissioner of Social Security made after a
hearing to which he was a party . . . 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. Such
action shall be brought in the district court of the
United States for the judicial district in which the
plaintiff resides, or has his principal place of
business . . . .
42 U.S.C. § 405(g) (emphasis added). “By requiring a final decision of the
Commissioner as a condition for judicial review, § 405(g) effectively
mandates exhaustion of administrative remedies as a prerequisite for filing
suit.” L.N.P. v. Kijakazi, 64 F.4th 577, 583 (4th Cir. 2023) (emphasis
added).
Specifically, claimants must proceed through a four-step process
before seeking review in a federal court. Smith v. Berryhill, 587 U.S. 471,
475–76 (2019).
First, the claimant must seek an initial determination
as to his eligibility. Second, the claimant must seek
reconsideration of the initial determination. Third,
the claimant must request a hearing, which is
conducted by an ALJ. Fourth, the claimant must
seek review of the ALJ’s decision by the Appeals
Council. See 20 CFR § 416.1400. If a claimant has
proceeded through all four steps on the merits, all
agree, § 405(g) entitles him to judicial review in
federal district court.
Id. at 476.
Under exceptional circumstances, a court may excuse the exhaustion
requirement. Bowen v. City of New York, 476 U.S. 467, 483 (1986). As the
Fourth Circuit has explained:
The Supreme Court has identified three conditions
that permit a court to excuse compliance with
§ 405(g), namely, when (1) the claims are collateral
to the claims for benefits; (2) the claimants would be
irreparably injured were the exhaustion requirement
enforced against them; and (3) the purposes of
exhaustion would not be served by requiring it, as
exhaustion would be futile.
L.N.P., 64 F.4th at 584 (quoting Bowen, 476 U.S. at 483–85 (internal
quotation marks and alterations omitted)). All three conditions must be
satisfied for a court to excuse exhaustion. Id. at 586–87.
Here, the Plaintiff did not exhaust administrative remedies before
filing suit. In her Complaint, the Plaintiff acknowledges that she was
“bypass[ing]” the SSA and “ask[ing] a court for relief.” [Doc. 2 at 5]. The
Plaintiff further acknowledges that she initiated an appeal with the SSA in
2018 and requested a hearing by an Administrative Law Judge in 2019, but
there had been “no progress since that time.” [Id. at 7]. She alleges that
her “experience with the” SSA would “make any appeal with [it] seem . . .
futile,” and explained that pursuing an appeal was not “attractive.” [Id. at 7–
8].
The Defendants seek dismissal by asserting the affirmative defense
of failure to exhaust administrative remedies. [Doc. 43 at 9]. In support of
their Motion to Dismiss, the Defendants reference the Declarations of
Loretta Collier and Cristina Prelle that were filed as exhibits to the
Defendants’ motion.1 [Docs. 43-1 and 43-2]. The Collier Declaration
details the timeline of the Plaintiff’s case as it has moved through the
administrative process [Doc. 43-1: Collier Decl.], and both Declarations
confirm that the Plaintiff failed to exhaust administrative remedies before
filing her Complaint in the EDPA [Doc. 43-1: Collier Decl. at 4; Doc. 43-2:
Prelle Decl. at 2].2 Nothing in the Declarations conflicts with the allegations
in the Plaintiff’s Complaint, and the Plaintiff has not disputed the
authenticity of the Declarations or the accuracy of the statements alleged
therein regarding the state of her benefits and of the record.
Furthermore, the Plaintiff’s allegations are not sufficient to excuse
exhaustion. The Plaintiff’s claim is not collateral to a claim for benefits;
rather, her claim is one for benefits. Additionally, the Plaintiff has not
properly alleged that she would be irreparably injured if required to meet
the exhaustion requirements. Instead, the Plaintiff alleges economic injury,
which is “not the kind of equitable condition for which courts have excused
exhaustion of the administrative process.” L.N.P., 64 F.4th at 588. Finally,
the fact that the Plaintiff’s claim continued through the administrative
1 Because these Declarations are integral to the defense raised in the Defendants’
motion and distills information from documents that are not disputed, they are
sufficiently incorporated by reference, and are properly considered here. See Philips,
572 F.3d at 180.
2 The Court notes that during the pendency of this matter, the Medicare Appeals Council
issued an Order declining to review the Plaintiff’s case. [Doc. 45-1].
process after she filed her Complaint demonstrates that properly
exhausting administrative remedies would not have been futile.
Accordingly, the Court will grant the Defendants’ motion.
IV. CONCLUSION
For the foregoing reasons, this Court finds that the Plaintiff had not
exhausted her administrative remedies when she commenced this litigation
as required by 42 U.S.C. § 405(g). Therefore, this Court cannot review the
Plaintiff's claim on the merits. As such, the Court will dismiss the Plaintiff's
claim without prejudice to the Plaintiff refiling upon full exhaustion of her
administrative remedies.
ORDER
IT IS THEREFORE ORDERED that the Defendants’ Motion to
Dismiss Plaintiff's Complaint or, in the Alternative, for Summary Judgment
[Doc. 42] is GRANTED.
IT IS FURTHER ORDERED that the Plaintiffs Complaint [Doc. 2] is
DISMISSED WITHOUT PREJUDICE.
IT IS SO ORDERED. Signed: January 17, 2025
Ct ey
Chief United States District Judge AS