Ward v. Social Security Administration, Commissioner

IN THE UNITED STATES DISTRICT COURT FOR THE

NOTHERN DISTRICT OF ALABAMA

MIDDLE DIVISION

)

CHARLES HAMILTON WARD, )

)

Claimant, )

)

v. ) CIVIL ACTION NO.

) 4:18-CV-01455-KOB

ANDREW SAUL, )

ACTING COMMISSIONER OF )

SOCIAL SECURITY, )

)

Respondent. )

)

MEMORANDUM OPINION AND ORDER

This Social Security matter comes before the court on the “Commissioner’s Motion to

Dismiss Plaintiff’s Complaint with Supporting Memorandum of Law.” (Doc. 6). The

Commissioner contends that Mr. Ward failed to exhaust his administrative remedies and has no

“final decision . . . made after a hearing” to seek judicial review under 42 U.S.C. § 405(g). Mr.

Ward filed a response arguing that the Appeals Council’s denial of his request for a review of the

ALJ’s dismissal of his request for a hearing is a final decision giving this court subject matter

jurisdiction over this matter. (Doc. 8).

The motion is now ripe for review. For the following reasons, the court finds that it has

subject matter jurisdiction over this matter and will DENY the motion to dismiss (Doc. 6).

I. BACKGROUND

An Administrative Law Judge granted Mr. Ward’s claim for benefits under Title XVI of

the Social Security Act on February 27, 2013 because of his severe back impairments and

generalized anxiety disorder. (Docs. 6 & 8-1). Mr. Ward developed cancer and received radiation

treatments throughout 2015 and 2016. As of August 7, 2018, his cancer was in remission, but

Mr. Ward suffers from a serious left jaw condition caused by his radiation treatments. (Doc. 8-1).

On April 19, 2017, the Social Security Administration concluded that Mr. Ward was no

longer eligible for Title XVI disability benefits after a continuing disability review. (Doc. 6 at 2).

Mr. Ward requested reconsideration, and a Disability Hearing Officer upheld the unfavorable

determination on September 22, 2017 and concluded that Mr. Ward’s disability had ended in

April of 2017. (Id. at 3).

Mr. Ward then requested a hearing before an ALJ on October 4, 2017. Mr. Ward’s

hearing was scheduled for May 1, 2018. The SSA mailed Mr. Ward a Notice of Hearing on

January 18, 2018, and he signed an Acknowledgement of Receipt, indicating his plan to appear

at the hearing. The SSA mailed a second Notice of Hearing to Mr. Ward on February 9, 2018,

and a Reminder Notice on April 4, 2018. (Doc. 6 at 2).

On May 1, 2018, the same day as the scheduled hearing, the ALJ dismissed Mr. Ward’s

request for a hearing “because he did not appear at the hearing and that no good cause had been

established.” (Doc. 6 at 3). Mr. Ward indicated that he planned to attend the hearing without

counsel but missed the ALJ hearing because “[he] got confused on the date.” Mr. Ward also

pointed to his confusion caused by his generalized anxiety disorder to support this explanation.

(Doc. 8-1).

Mr. Ward then filed an appeal to the Appeals Council without counsel and submitted

medical records from January 2018 and a work status report from May 2018. (Doc. 8-1, 8-2 at

2). On July 3, 2018, the Appeals Council denied his request for review and determined the

“additional evidence [did] not relate to the period at issue.” (Doc. 8-2 at 2).1

On September 6, 2018, Mr. Ward filed this civil action in the United States District Court

for the Northern District of Alabama seeking judicial review of the Commissioner’s decision.

(Doc. 1). The Commissioner’s motion to dismiss for lack of jurisdiction followed. (Doc. 6).

II. STANDARD OF REVIEW

The Commissioner presents a factual attack on the court’s subject matter jurisdiction

pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure. Factual attacks “challenge the

existence of subject matter jurisdiction in fact, irrespective of the pleadings,” and the court can

consider matters outside the pleadings. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir.

1990) (quotations omitted). Mr. Ward, as the party invoking the court’s subject matter

jurisdiction, bears the burden of establishing that jurisdiction exists. Taylor v. Appleton, 30 F.3d

1365, 1367 (11th Cir. 1994). If the court determines that it lacks subject matter jurisdiction, the

court must dismiss the claim. See Fed. R. Civ. P. 12(h)(3).

The authority for judicial review of a decision of the Commissioner of Social Security is

set forth and limited by 42 U.S.C. § 405(g). A district court does not have subject matter

jurisdiction over an appeal of the Commissioner’s decision unless the party seeking review has

exhausted his or her administrative remedies as set forth in the Social Security Act. See 42

U.S.C. § 405(g) and (h). Section 405(g) of the Social Security Act states:

Any individual, after any final decision of the Commissioner of Social Security made

after a hearing to which he was a party, irrespective of the amount in controversy, 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.

1 The SSA then notified Mr. Ward that he owed $8,160.00 as an overpayment of Supplemental Security

Income because his disability benefits ended on April 19, 2017. As of July 11, 2018, this payment was

past due. (Doc. 8-3).

42 U.S.C. § 405(g); see also Bello v. Comm’r of Soc. Sec., 460 F. App’x 837, 839 (11th Cir.

2012) (“A district court’s jurisdiction to review claims arising under the Social Security Act is

limited by 42 U.S.C. § 405(g). . . .”) (quoting 42 U.S.C. § 405(g)).

“The term ‘final decision’ is left undefined by the Act and its meaning is to be fleshed out

by the Secretary’s regulations.” Weinberger v. Salfi, 422 U.S. 749, 766 (1975). A claimant

obtains the Commissioner’s “final decision” after completing the four steps of the administrative

review process: (1) initial determination; (2) reconsideration determination; (3) hearing before an

ALJ; and (4) Appeals Council review. See 20 C.F.R. § 404.900(a); Schweiker v. Chilicky, 487

U.S. 412, 424-25 (1988). The review by the Appeals Council is a “normal stage in the

administrative review procedure, available as of right to any party dissatisfied with the hearing

decision or the dismissal of a hearing request.” Bloodsworth v. Heckler, 703 F.2d 1233, 1237

(1983) (citing 20 C.F.R. § 404.967) (emphasis added).

The Appeals Council may deny a claimant’s request or may review the case and decide

the outcome. 20 C.F.R §404.981. If the Appeals Council denies the claimant’s request for

review, the ALJ decision is binding “unless [the claimant] files[s] an action in the Federal

District court, or the decision is revised.” Id. An Appeals Council review determination, “on

whatever grounds, is perceived as the appropriate[ ] final decision from which to take an appeal

to the district court under section 405(g).” Bloodsworth, 703 F.2d at 1237. The Appeals

Council’s decision, “whether it is a determination on the merits or a denial of a request to review,

is binding and final” and appealable to the district court. Id.

III. DISCUSSION

The Commissioner’s assertion that this court lacks subject matter jurisdiction lacks merit.

Mr. Ward exhausted his administrative remedies and received a “final decision” of the

Commissioner regardless of whether he had an ALJ hearing on the merits.

The Commissioner argues that because Mr. Ward did not have a hearing before the ALJ

this court cannot hear this appeal. That argument “makes linguistic but not legal sense.” See

Bloodsworth, 703 F.2d at 1239. Mr. Ward can seek no further administrative review within the

Social Security Administration because he exhausted all his administrative remedies by seeking

Appeals Council review. Yet, under the Commissioner’s argument, Mr. Ward cannot seek

judicial review in this court because he has no “final decision” because he has not exhausted his

administrative remedies—specifically, he did not have a hearing before the ALJ. That argument

lacks logic especially where the ALJ dismissed Mr. Ward’s request for a hearing and the Appeals

Council denied review of that decision.

The very issue on which Mr. Ward seeks judicial review in this court involves the

Appeals Council’s denial of the request to review the ALJ’s dismissal of Mr. Ward’s request for

a hearing after he missed the first hearing. Under the Commissioner’s own regulations, Appeals

Council review is available as of right to any party dissatisfied with the dismissal of a hearing

request. See 20 C.F.R. § 404.967. And the Eleventh Circuit has held that an Appeals Council’s

denial of a request for review on whatever ground is a “final decision” appealable to the district

court. See Bloodsworth, 703 F.2d at 1237. If the court were to accept the Commissioner’s

argument and dismiss Mr. Ward’s case, Mr. Ward would have no recourse in the district court

even though he took the required steps within the SSA and has no avenue for further

administrative review. So the Commissioner’s position that Mr. Ward has no “final decision” to

appeal because he did not have a hearing does not pass muster.

The Supreme Court in Smith v. Berryhill recently addressed the issue of a district court’s

subject matter jurisdiction under 42 U.S.C. § 405(g). 139 S. Ct. 1765 (May 28, 2019). The

Court in Smith held that the Appeals Council’s dismissal of a claimant’s untimely request for a

review of an ALJ’s merit decision after a hearing is a “final decision . . . made after a hearing”

and subject to judicial review. Id. at 1774.2 In finding that judicial review was proper, the

Supreme Court reasoned that the language of the Social Security Act suggests that “Congress

wanted more oversight by the courts in this context rather than less . . . and the statute as a whole

is one that ‘Congress designed to be “unusually protective” of claimants.’” Id. at 1776 (quoting

Bowen v. City of New York, 476 U.S. 467, 480 (1986)). The Court in Smith also indicated that the

claimant’s “entitlement to judicial review is confirmed by the strong presumption that Congress

intends judicial review of administrative action” and that “Congress has not suggested that it

intended for the SSA to be the unreviewable arbiter of whether claimants have complied with

[the SSA’s] procedures.” Id. at 1776-77 (internal quotations and citations omitted).

Although the claimant in Smith had a merits hearing before the ALJ, the Supreme Court

in dicta discussed the “made after a hearing” requirement and indicated that “phrase has been the

subject of some confusion over the years.” The Court stated its “precedents make clear that an

ALJ hearing [on the merits] is not an ironclad prerequisite for judicial review.” Id. (citing

Bowen, 476 U.S. at 484). The Court noted its precedent calls for an “‘intensely practical’

2 Interestingly, the Eleventh Circuit addressed this very issue in 1983 when it decided Bloodsworth, 703 F.2d 1233

and reached the same conclusion that the Supreme Court recently reached in Smith. The Eleventh Circuit’s

opinion over the years was not universally accepted by other Circuits, but the Supreme Court’s decision in Smith

abrogated cases in the Second, Third, Fourth, Fifth, Eighth, Ninth, and Tenth Circuits that had disagreed with the

holding in Bloodsworth.

approach to the applicability of the exhaustion requirement and disapprov[es of a] ‘mechanical

application’ of a set of factors.” Id. (citing Bowen, 476 U.S. at 484). The Court specifically

commented in a footnote that a “different question would be presented by a claimant . . . whose

request for an ALJ hearing was dismissed as untimely and who then appealed that determination

to the Appeals Council before seeking judicial review. While such a claimant would not have

received a ‘hearing’ at all, the Court’s precedents also make clear that a hearing is not always

required.” Smith, 139 S. Ct. at 1777 fn 17. But because that issue was not before the Court, it

specifically stated “we do not address it.” Id. Although dicta, the Supreme Court’s comment in

Smith support this court’s finding that the Appeals Council’s decision in this case was an

appealable final decision despite the lack of an ALJ hearing on the merits.

District courts within the Eleventh Circuit have also held that the hearing requirement is

not determinative of subject matter jurisdiction and, therefore, the absence of a hearing does not

preclude judicial review. See Robinette v.Comm’r of Soc. Sec., No. 6:16-cv-1241-Orl-41DCI,

2018 WL 3583839, at *2 (M.D. Fla. Jul. 26, 2018) (finding that the court had subject matter

jurisdiction over a case because the plaintiff received a final decision from the Commissioner

once the plaintiff sought, and the Appeals Council declined, review of the ALJ’s order

dismissing his request for a hearing); Pizarro v. Comm’r of Soc. Sec., No. 6:12-cv-801-Orl-

37DAB, 2013 WL 869389 (M.D. Fla. Jan. 24, 2013) (finding that the court had jurisdiction to

review the plaintiff’s social security disability appeal, despite the lack of a “final decision… after

a hearing” and the failure to exhaust administrative remedies); see also Brown v. Astrue, No.

1:10-CV-839-JEC-LTW, 2011 WL 13319127 (N.D. Ga. May, 25, 2011) (holding that the court

had jurisdiction to review the ALJ’s decision to dismiss the plaintiff’s request for a hearing). All

of these decisions support the court’s exercise of subject matter jurisdiction to hear this appeal.

The Commissioner argues that the Eleventh Circuit’s decision in Cash v. Barnhart

instructs that this court has no subject matter jurisdiction to decide this appeal. 327 F.3d 1252

(2003). This court disagrees. In Cash, the claimant filed her initial application in 1996, but she

failed to request a hearing before an ALJ after her application was denied initially and on

reconsideration. She also did not appeal the denial of her first application in any way. Then, the

claimant in Cash filed a second application for disability benefits in 1999, again alleging the

same disability onset date as in her first application. Cash, 327 F.3d at 1254.

After the denial of her second application both initially and on reconsideration, the

claimant in Cash requested a hearing before an ALJ. The ALJ construed Cash’s second

application as a motion to reopen her fist claim and expressly denied that request on the basis of

res judicata because the claimant’s request involved “the rights of the same claimant on the same

facts and on the same issues which were decided in the final and binding determination . . . made

on the [first] application.” Id. at 1254.

The Eleventh Circuit held in Cash that because the Commissioner did not reopen the final

decision on the first application, the district court had no jurisdiction under § 405(g) to decide the

appeal. The court in Cash cited 20 C.F.R. § 404.957(c)(1) that provides that the “Commissioner

may dismiss a hearing request and decline to issue a ‘final decision’ if the doctrine of res judicata

applies [because] the Commissioner has made a previous decision about the claimant’s rights on

the same facts and the same issues, and this previous determination has become final.” Cash,

327 F.3d at 1255. Because the Commissioner specifically denied the request to reopen the first

application, the court in Cash found that no “final decision” existed upon which the claimant

could seek judicial review under § 405(g). The factual scenario in Cash in no way applies in the

present case and its holding has no bearing on this court’s decision in this case.

The Appeals Council in this case rendered its final decision when it denied Mr. Ward’s

request for review of the ALJ’s decision to dismiss his request for a hearing. So Mr. Ward can

appeal that decision to the court regardless of whether Mr. Ward had a merits hearing before the

ALJ. Consequently, the court has subject matter jurisdiction over this case under 42 U.S.C. §

405(g).

IV. CONCLUSION

For the reasons discussed above, the court DENIES the Commissioner’s motion to

dismiss. (Doc.6). This appeal will proceed with the issues of whether the ALJ erred in finding

no good cause and dismissing the request for an ALJ hearing and whether the Appeals Council

erred in denying his request for review of the ALJ’s decision.

DONE and ORDERED this 24th day of October, 2019.

____________________________________

KARON OWEN BOWDRE

CHIEF UNITED STATES DISTRICT JUDGE