Petition for Writ of Certiorari — National Taxpayers Union v. Social Security Administration

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Text

Supreme Court, U.S.

/ FILED

OL=-484 007 99094

In 6) he

F THE CLERK

OFF IG

Supreme Court of the Cite States

NATIONAL TAXPAYERS UNION,

Petitioner,

UNITED STATES SOCIAL

SECURITY ADMINSTRATION

and KATHY A. BULLER,

Inspector General, in her Official Capacity,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Michael E. Geltner

Counsel of Record

GELTNER & ASSOCIATES, P.C.

Number 10 E Street, S.E.

Washington, D.C. 20003

(202) 547-1136

Counsel for Petitioner

THE LEX GROUP®© @ One Massachusetts Ave., NW ¢@ Suite 670 ¢ Washington, DC 20001

(202) 789-2400 ¢ Fax: (202) 789-1911 ¢ www.thelexgroupdc.com

l. Ouestion Presented

Whether the Court should grant a writ of

certiorari to resolve a conflict among the Circuits on

whether this Court’s decision in Thunder Basin Coal

Co. v. Reich, 510 U.S. 200 (1994) (“Thunder Basin”)

closes the district court doors to pre-enforcement

judicial review of colorable claims of First Amendment

unconstitutionality of an administrative agency’s

enabling statute, as the Fourth Circuit, joining the First,

Sixth and Eighth Circuits, held in this case, or leaves

the door open so long as there is no final agency order

ripe for Court of Appeals review, as the Second, Third,

Seventh, Ninth, Tenth and District of Columbia

Circuits have held.

I. Parties and Corporate Disclosure Statement

The Petitioner is National Taxpayers Union

(“NTU”), a_ not-for-profit Delaware corporation

qualified as a charity under 26 U.S.C. § 501(c). It is not

: wi a publicly held corporation, nor is any part of it owned

by one, and there is no other interested party. The

Respondents are the United States Social Security

Administration (“SSA”), an agency of the United States

of America, and its inspector general, Kathy A. Buller,

sued in her official capacity.

ill

Table of Contents

Page

I. OO FI wisiteisenictcicrdiolesesacsteenataesere i

II. Parties and Corporate Disclosure

I siteiidssisatinsslsianlacnisniinecvnaiindamaaeed li

ee initiinctitctnsisicciic enemas ili

Re Oe Fi aesiiisiishittitininhtaitcee ee v

Ill. Citation to Official and Unofficial Reports ......... 1

IV. Basis for Supreme Court Jurisdiction .................. 1

V. I Ti I isa sicstlanicsinrtesiddaaicinsatearniiesanant 1

FE. —- SARE CE I CR ie iisiitdntcenrecnnscenices 1

A. Jurisdiction in United States

Ie CE aia siscciesaiventetaticlecaiien 1

B PRUE cuhiccnenwnbiitetaceaneieaenniaaek 2

1. The Statutes Summarized.............. Z

r 3 NTU’s Survey/Solicitation............. 3

3. EPIIICE CEE BOE icessecisicessensinseciins 4

b. The District Court

III cossiunctenassitidedsnameeabe 4

4. The Fourth Circuit .0..0.0000.0000ccccccc. 5

a. BERD PDO oa cnsccacecsossscesessscees .)

b. The Fourth Circuit

SPIIIINON cisnsstaconniaehitvsotncanasncesas 6

VII. Reasons for Granting the WTit ..............c000000000.-.. 7

A. Inter-Circuit Conflict ...0.0000.ccccccccccccceceeeeees 7

B The First Amendment .0.0.....0.0...ccccccccceeeee. 10

Vee. “SORGRIDIR icc 11

Appendix

Table of Authorities

Page(s)

Cases:

Abbott Laboratories v. Gardner,

ee Se NE iididcniitincniniieeasiistntcenssnescinsitibnis 8,9

Action for Children’s Television v. F.C.C.,

FF PS AME (D.C, Cie, TGFB) cnccccccsscsccesesccosees 5, 6,7

Board of Trustees v. Fox,

ae A I csnsccisnhivinctinlecalccicitlaanasabeesiniiacsoeal 11

Commodity Trend Service, Inc. v. C.F.T.C.,

149 F.3d 679 (7 Cir. 1998),

later opinion following same rule,

EN 7

Cook v. Pan American World Airways, Inc.,

FEE ek Ne. CD cactentassiscnintenateanseninnnennin 7

Crist v. Leippe,

Be ek Oe CO OE, Ti iarecencennescnssccsncscscnccisneeses 7

Czerkies v. U.S. Dep’t of Labor,

Fa en I le RI cccssccsssiencisosesesneciniionss 7,9

Eastern Bridge L.L.C. v. Chao,

re Ga I ai encscsctsahntanccinsnincnrincesasticiion 7

Great Plains Coop v. C.F.T.C.,

re 3 ae RCE 7

——— ey

vi |

Illinois ex rel Madigan v. |

Telemarketing Associates,

ey Ne ID pi niirnnsinencenscinaesncniitlionansasiniiaia 4,10

Johnson v. Robison,

GE TED, Fae CRI eeneccintanstnsnscnssciaccenensenvacsesansenntans 9

Kreschollek v. Southern Stevedoring Co.,

FO Bk Be ae, TD ivsiccsessnecssnncscancrnssssaceccesene 7

Mace v. Skinner,

34 F.3d 854 (9™ Cir. 1996) ........c.csccrcscersceccsccscesssense 7

Marchiano v. N.A.S.D.,

134 F. Supp. 2d 90 (D.D.C. 2001)... 5

Merritt v. Shuttle, Inc.,

245 F.3d 182 (248 Cir. 2001) .........-ccesssscersersencsaressees 7

Reich v. Manganas Painting Co.,

104 F.3d 801 (6% Cir. 1997) ...........ccccccsscersersreeesonnes 7

Rilev v. Nat'l Fed’n of the Blind,

ABT US, TO CFD wrcrsitcinnisccnnsccnts snsctissninnesisnatoninensés 10

Rocky Mountain Radar, Inc. v. F.C.C.,

i PREG Te Le AB | NEON 7-8

Ryan v. Bentsen,

12 F.3d 245 (D.C. Cir. 1993) .......ccccccscecsesarsncnerenesees 6

Schaumburg v. Citizens fora

Better Environment,

me CeO. 4,10

PND. ee a ae =

Vil

Thunder Basin Coal Co. v. Reich,

OE IPOD wlicintnksasasinnasiinianastacenccicendas passim

Time Warner Entertainment Co. v. F.C.C.,

FD Pe Fae CAPR. COR. TDG) vc scsiccscsssccceasnninsans > 67

Weinberger v. Salfi,

ee PG FP IE eintanctinshslseciontsnsannscenmncesanensontids 6,9

Constitutional Provision:

I a a ad i, 10

Statutes:

i ic ah te i

LE ck Le: | aaa ae OnE 1

ST oh | Oe eae aU ee Oa 1,4

42 U.S.C. § 1320a-7a..... | LEP R yO SOPRA ARO oe PROT ONO DY passim

MUTI OT I asics cesecnsostsacatio 2

PLE Tok [1 ea een nm 2

BOUT GUAM FE nics csscssckcsssescscscscssnsenesanon 2,10

TT gL. Coke eR Te passim

Rule:

Fed. R. Civ. P.12(b)(L) ccccccssssssssscssssssssese Gee. 4

Vill

Other Authorities:

Mine Safety Act ...............c0csccscscsssscsrsnsorsssssesssssssenssesseraees 6,8

National Labor Relations Acct...........................ccccsessscsssenes 8

Ill. Citation to Official and Unofficial Reports

The decision of the United States Court of

Appeals for the Fourth Circuit which this petition seeks

to have the Court review is officially reported at 376 F.

3d 239. It is unofficially reported at Unemployment

Ins. Rep. (CCH) P17, 252B; 2004 U.S. App. LEXIS 14614.

It is reprinted at App. 1A. The District Court opinion is

not reported. It is reprinted at App. 6A.

IV. Basis for Supreme Court Jurisdiction

The decision of the Court of Appeals was filed

July 15, 2004. This Court has jurisdiction to review the

Court of Appeals decision by Writ of Certiorari under

28 U.S.C. § 1254(1).

V. Statutes in Issue

The statutes in issue are the Civil Monetary

Penalty Law (“CMPL”), 42 U.S.C. § 1320a-7a,

reproduced in the Appendix (due to its length) at 26A,

and Section 1140 of the Social Security Act, 42 U.S.C. §

1320b-10, reproduced in the Appendix at 52A.

VI. Statement of the Case

A. Jurisdiction in United States District

Court

Jurisdiction was based on general federal

question jurisdiction, 28 U.S.C. § 1331. The decision on

review, in holding pre-enforcement review barred by

Thunder Basin, supra, sustained the District Court's

grant of a Rule 12(b)(1) motion asserting it lacked

subject matter jurisdiction.

B. Facts

1, The Statutes Summarized

Section 1140! says that no person may use the

words “Social Security” and “Social Security

Administration” in a _ solicitation “or other

communication,” “in a manner which such person

knows or should know would convey, or in a manner

which reasonably could be interpreted as conveying,

the false impression that such item is approved,

endorsed or authorized by the Social Security

Administration...or that such person has some

connection with, or authorization from, the Social

Security Administration...”, and authorizes a civil

monetary penalty of $5,000 for each piece mailed.

CMPL? establishes an administrative process

commencing with an agency charging decision, leading

through an administrative judge hearing and intra-

agency review before SSA and providing for review “of

the proceeding and of the question determined

therein” in a United States Court of Appeals after final

agency order.* Post-final order enforcement is in

United States District Court.#

152A.

226A.

338A, 42 U.S.C. § 1320a-7a(e).

439A-43A, 42 U.S.C. § 1320a-7(f) and (g).

i aah ahaa

2. NTU’s Survey/ Solicitation

NTU is a charitable, non-profit organization

engaged in research, education, »nd public advocacy

concerning issues that it considers important to

American taxpayers. One such issue is the financial

stability of the Social Security program. As part of its

campaign to reform the Social Security program, NTU

distributed a mass mailing comprised of a letter and a

survey. In the letter, NTU argued that the Social

Security program is in dire financial condition and

desperately in need of structural reform. The survey

posed eight questions seeking respondents’ reactions to

the current condition of the Social Security program as

well as NTU’s favored reform, personal investment

accounts. Both the letter and the survey solicited

financial contributions for NTU. The mailing was

marked, “OFFICIAL NATIONAL SURVEY ON

SOCIAL SECURITY COMMISSIONED BY THE

NATIONAL TAXPAYERS UNION FOR THE SOCIAL

SECURITY ADMINISTRATION, WHITE HOUSE

AND CONGRESS OF THE UNITED STATES.” SSA

told NTU that its mailing violated § 1140. SSA

requested that NTU cease distribution of its surveys.

NTU initially indicated that it would change the

design of its mailing to comply with SSA’s demand.

The revised mailing contained the following language:

“OFFICIAL NATIONAL SURVEY ON SOCIAL

SECURITY CONDUCTED BY THE NATIONAL

TAXPAYERS UNION AND COMMISSIONED FOR

THE WHITE HOUSE[,] UNITED STATES HOUSE OF

REPRESENTATIVES [AND] UNITED STATES

SENATE.”

SSA expressed its dissatisfaction with NTU’s

revised mauing and threatened enforcement action.

3. District Court suit

NTU sued SSA in the United States District

Court for the District of Maryland, based upon federal

question jurisdiction. 28 U.S.C. § 1331. NTU alleged,

inter alia, that § 1140 is facially invalid because it is

unconstitutionally overbroad, violating the First

Amendment Overbreadth (“FAO”) doctrine, and that

§1140 is unconstitutional as applied to NTU’s revised

mailing, contending that, as a charitable solicitation,

NTU’s mailing received full First Amendment

protection.°

a. SSA’s Motion

SSA moved to dismiss under Fed. R. Civ. P.

12(b)(1), contending that, under Thunder Basin, the

District Court lacked jurisdiction. NTU cross-moved

for summary judgment.

b. The District Court Decision®

The District Court granted the SSA’s motion to

dismiss the complaint. The court ruled that it lacked

jurisdiction to consider NTU’s _pre-enforcement

challenge to the constitutionality of § 1140. Relying on

5 See Schaumburg v. Citizens for a Better Environment, 444 U.S.

620 (1980); Illinois ex rel Madigan v. Telemarketing Associates, 538

U.S. 600 (2003).

614A.

, pee

Thunder Basin, the District Court held that the

administrative review procedures described in CMPL

are the exclusive means for attacking § 1140 prior to its

actual enforcement against NTU.

4. The Fourth Circuit

a.. The Appeal

NTU appealed to the Fourth Circuit. It argued

that this case was unlike Thunder Basin, because the

legislative history of CMPL and § 1140 was silent on

intent to preclude pre-enforcement review, while the

Thunder Basin court relied on explicit evidence of such

intent. It also argued this case was uniquely unlike

Thunder Basin, because there was no agency final

order, and the _ suit involved a facial

unconstitutionality challenge to SSA’s enabling statute.

NTU relied on District of Columbia Circuit authority

sustaining District Court jurisdiction for pre-

enforcement challenges to an agency’s organic act

when there is no final agency order. NTU pointed out

that SSA had no authority to consider the

7 SSA had told NTU that SSA would commence an enforcement

action, but it had not yet done so.

8 See Time Warner Entertainment Co. v. F.C.C., 93 F. 3d 957 (D.C.

Cir. 1996) (“Time Warner”); Action for Children’s Television v.

F.C.C., 59 F.3d 1249 (D.C. Cir. 1995) (“ACT”). See generally,

Marchiano v. N.AS.D., 134 F. Supp. 2d 90, 93 (D.D.C. 2001)

(explaining D.C. Circuit rule).

constitutional challenge to its statute which NTU was

raising.?

b. The Fourth Circuit

Decision!9

In affirming the District Court, the Fourth

Circuit, in an opinion by Judge Shedd, read Thunder

Basin broadly. It held that, like the Mine Safety Act

involved in Thunder Basin, § 1140 and CMPL “too

‘establishes a detailed structure for reviewing

violations’ of the statute.”!! Although admitting the

legislative history was “scant,” the Court of Appeals

felt it was sufficiently similar to Thunder Basin to bar

pre-enforcement challenges.!12 The court concluded

that, because NTU’s constitutional challenges were

reviewable after the agency process, they could not be

considered by a District Court prior to final order.!° In

a long textual footnote, Judge Shedd - inaccurately and

disingenuously in NTU’s view - tried to distinguish

the D.C. Circuit cases, Time Warner and ACT."* Judge

Wilkinson concurred and stated that § 1140 did not

9 Weinberger v. Salfi, 422 U.S. 749, 765-6 (1975); Ryan v. Bentsen,

12 F.3d 245 (D.C. Cir. 1993).

107A.

1 7A.

12 8A.

13 9A-10A.

1410A-11A, n. 3.

seek “to silence criticism of the operations of a

government program.” !9

Vil. Reasons for Granting the Writ

A. Inter-Circuit Conflict

The Court should grant certiorari to resolve a

conflict which has developed among the Circuits. The

Fourth Circuit takes a broad view of Thunder Basin,

reading it to ban pre-enforcement review whenever the

administrative scheme provides for post-final order

Court of Appeals review jurisdiction, joining the First,

Eastern Bridge L.L.C. v. Chao, 320 F.3d 84 (1% Cir.

2003); Sixth, Reich v. Manganas Painting Co., 104 F.3d

801 (6 Cir. 1997); and Eighth, Great Plains Coop v.

C.F.T.C., 205 F.3d 353 (8 Cir. 2000), Circuits in an

expansive reading of Thunder Basin. By contrast, the

District of Columbia Circuit's position that United

States District Courts have jurisdiction to hear pre-

enforcement non-final-agency-order challenges to an

agency’s enabling statute (as opposed to simple agency

action), see Time Warner and ACT, supra, is joined by

the Second, Merritt v. Shuttle, Inc., 245 F.3d 182 (24

Cir. 2001); Cook v. Pan American World Airways, Inc.,

771 F.2d 635 (24 Cir. 1985); Third, Kreschollek_v.

Southern Stevedoring Co., 78 F.3d 868 (3'4 Cir. 1996);

Seventh, Czerkies v. U.S. Dep’t of Labor, 73 F.3d 1435

(7'® Cir. 1996) (en banc); Commodity Trend Service, Inc.

v. C.E.T.C., 149 F.3d 679 (7 Cir. 1998), later opinion

following same rule, 233 F.3d 981 (7 Cir. 2000); Ninth,

Crist v. Leippe, 138 F.3d 801 (9 Cir. 1998); Mace _v.

Skinner, 34 F.3d 854 (9 Cir. 1994); and Tenth, Rocky

15 12A-13A.

Mountain Radar, Inc. v. F.C.C., 158 F.3d 1118 (10% Cir.

1998), Circuits.

In Abbott Laboratories v. Gardner, 387 U.S. 136

(1967) (“Abbott Laboratories”), this Court sustained

District Court jurisdiction for pre-enforcement review

even though post-enforcement final order Court of

Appeals review was available. This Court phrased the

issue as whether there was express Congressional

intent to prohibit review, placing the burden to

establish such intent on the agency seeking to avoid

pre-enforcement review. 387 U.S. at 139-140. The

Thunder Basin opinion appears to state a less pro-pre-

enforcement review test, stating this Court will “find

that Congress has allocated initial review to an

administrative body where such intent ‘is fairly

discernable in the statutory scheme,’” 510 U‘S. at 207,

and relying on an examination of the statute’s

structure, purpose and legislative history, id., rather

than demanding an express statement of preclusive

purpose, as did Abbott Laboratories. Thunder Basin,

however, did not involve a facial challenge to the

agency's enabling statute, and this Court noted the

unusual question raised by the plaintiff! and the fact

that “petitioner expressly disavows any abstract

challenge to the Mine Act's statutory review scheme.”17

Moreover, the Thunder Basin opinion states that

Abbott Laboratories “is not to the contrary,” and the

Thunder Basin court said it had found legislative

6 The claim was that the agency’s threatened action interfered

with the plaintiff's rights under the National Labor Relations Act.

See 510 U.S. at 206.

17510 US. at 218, n. 22.

history in Abbott Laboratories of a design to allow pre-

enforcement review. 510 U.S. at 212. -

The Fourth Circuit, in this case, as well as the

First, Sixth and Eighth Circuits, all point to Thunder

Basin as establishing an unbreachable wall whenever

post-final order Court of Appeals review is available.

By contrast, the Circuits following the District of

Columbia Circuit approach really do reconcile Thunder

Basin with Abbott. Laboratories, allowing _pre-

enforcement review unless there is demonstrable intent

to preclude it or the issue is a run of the mill claim

“cloaked in constitutional terms.” Czerkies, supra, 73

F.3d at 1443.

This split in the Circuits is an important one;

establishing the proper approach courts must use in

analyzing government door-closing arguments will

resolve a large number of cases, and, while each Court

of Appeals decision discusses the specific statutory

administrative scheme - as did this Court in Abbott

Laboratories and Thunder Basin and the Fourth Circuit

in this case - the cited cases from the split Circuits

reveal a fundamental difference in how to approach the

door-closing argument. As Judge Posner noted in

Czerkies, supra, “[e]ach statute must stand on its own

two feet, but each is informed by the presumption.

already mentioned against slamming the judicial door

in the face of constitutional claims.” 73 F.3d at 1441.

Moreover, the District of Columbia Circuit rule

recognizes that agencies cannot declare their enabling

statutes unconstitutional, see Weinberger v. Salfi, supra;

Johnson _v. Robison, 415 U.S. 361 (1974), while the

Fourth Circuit discounts this rule and ignores the

crucial fact that, because of the rule, the provisions of

CMPL that the court of appeals “shall have jurisdiction

of the proceeding and of the question determined

therein...” 42 U.S.C. § 1320a-7a(e) (third sentence),'®

may render the enabling statute unconstitutionality

claim unreviewable (because not a “question

determined therein” [i.e., before SSA]) if the District

Court door is closed.

B. The First Amendment

Of course, the District Court door should be

open only if the constitutional attack on the agency's

enabling act is colorable. Judge Wilkinson’s Fourth

Circuit concurrence suggests this is not the case,

because the statute does not seek to “silence criticism”

of government and merely forbids “impersonation.”

However, NTU is a charity, and charitable solicitations

receive full First Amendment protection and are

punishable only for actual fraud and deception.

Illinois ex_rel_ Madigan v. Telemarketing Associates,

supra, 538 U.S. 600, 617-621; Riley v. Nat'l Fed‘n of the

Blind, 487 U.S. 781 (1998); Schaumburg v. Citizens fora

Better Environment, supra. By contrast, § 1140 reaches

not only actual fraud but also negligence (“should

know would convey” a false impression of government

approval) and strict liability with no fault (“in a

manner which reasonably could be interpreted or

construed as conveying” the false impression). While

trying to serve the goal of protecting seniors against

swindlers, Congress overreached. Moreover, § 1140

reaches not only solicitations, but also any “circular,

book, pamphlet, or other communication, or a play,

18 38A.

motion picture, broadcast, telecast, or other production”

(emphasis supplied).!? The honest writer, as weli as

the swindler, must worry about § 1140. For that

reason, the overbreadth is so “substantial” as to invoke

the FAO doctrine. See Board of Trustees v. Fox, 492

U.S. 469, 482-4 (1989).

VIII. Conclusion

This is an important case; the Fourth Circuit has

expanded an already disturbing trend to overread

Thunder Basin in the three other Circuits - in

contradistinction to the sensible approach of the D.C.

Circuit and five others - to denigrate an important

constitutional claim which may evade judicial review.

For that reason, the Court should grant the writ.

Respectfully submitted,

/s/ Michael E. Geltner

Michael E. Geltner, Esq.

Geltner & Associates, P.C.

Number 10 E Street, S.E.

Washington, D.C. 20003

(202) 547-1136

Attorney for Petitioner

National Taxpayers Union

19 S2A.

Appendix

Table Of Contents

Appendix Page

Opinion of

The United States Court of Appeals

For the Fourth Circuit

COME FURY TD, BIG seicssssinnnctscssestasnaiosesnssxasarasinne la

Memorandum of

The Honorable William M. Nickerson

Re: Granting Defendants’ Motion for

Summary Judgment; Dismissing Complaint

entered September 3, 200G..........0.:0...0sseassasesncere 14a

Be Ee as nics serena ansaeindaseeshananiceatineeatind 26a

OeRt Se a aie 52a

NATIONAL TAXPAYERS UNION, Plaintiff-

Appellant, v. UNITED STATES SOCIAL SECURITY

ADMINISTRATION; KATHY A. BULLER, in her

official capacity as Chief Counsel to the Inspector

General of the United States Social Security

Administration, Defendants-Appellees.

No. 03-2232

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

376 F.3d 239; 2004 U.S App. LEXIS 14614;

Unemployment Ins. Rep. (CCH) P17,252B

May 7, 2004, Argued

July 15, 2004, Decided

[ENTERED: July 15, 2004]

PRIOR HISTORY: [**1] Appeal from the United States

District Court for the District of Maryland, at

Baltimore. (CA-02-3949-WMN-1). William M.

Nickerson, Senior District Judge.

DISPOSITION: Affirmed.

LexisNexis(R) Headnotes

COUNSEL: ARGUED: Michael Edward Geltner,

GELTNER & ASSOCIATES, Washington, D.C., for

Appellant.

Tara Leigh Grove, Appellate Staff, Civil Division,

UNITED STATES DEPARTMENT OF JUSTICE,

Washington, D.C., for Appellees.

ON BRIEF: Peter D. Keisler, Assistant Attorney

General, UNITED STATES DEPARTMENT OF

JUSTICE, Washington, D.C.; Thomas M. DiBiagio,

United States Attorney, OFFICE OF THE UNITED

STATES ATTORNEY, Baltimore, Maryland; Mark B.

Stern, Appellate Staff, Civil Division, UNITED STATES

DEPARTMENT OF JUSTICE, Washington, D.C., for

Appellees.

JUDGES: Before WILKINSON, LUTTIG, and SHEDD,

Circuit Judges. Judge Shedd wrote the opinion, in

which Judge Luttig joined. Judge Wilkinson wrote a

concurring opinion.

OPINIONBY: Shedd

OPINION: [*240] SHEDD, Circuit Judge:

This appeal presents the question whether the

National Taxpayers Union may challenge the

constitutionality of § 1140 of the Social Security Act, 42

U.S.C. § 1320b-10, in federal district court before the

Social Security Administration undertakes [**2]

administrative proceedings to enforce that provision

against NTU. We hold that it may not. Under Thunder

Basin Coal Co. v. Reich, 510 U.S. 200, 127 L. Ed. 2d 29, 114

S. Ct. 771 (1994), the district court lacks jurisdiction

over NTU's pre-enforcement challenge to the statute.

The National Taxpayers Union ("NTU") is a non-

profit organization engaged in research, education, and

public advocacy concerning issues that it considers

important to American taxpayers. One such issue is the

financial stability of the Social Security program. As

part of its campaign to reform the Social Security

program, NTU distributed a mass mailing comprised

of a letter and a survey. In the letter, NTU argued that

the Social Security program is in a dire financial

condition and desperately in need of structural reform.

The survey posed eight questions seeking respondents'

reactions to the current condition of the Social Security

program as well as NTU's favored reform, personal

investment accounts. Both the letter and the survey

solicited financial contributions for NTU. The mailing

was marked, “OFFICIAL NATIONAL SURVEY ON

SOCIAL SECURITY COMMISSIONED BY THE

NATIONAL TAXPAYERS UNION FOR THE SOCIAL

SECURITY [**3] ADMINISTRATION, WHITE HOUSE

AND CONGRESS OF THE UNITED STATES.” The

enclosed survey was titled, “OFFICIAL SURVEY ON

SOCIAL SECURITY.”

[*241] The Social Security Administration

(“SSA”) advised NTU that its mailing violated § 1140

of the Social Security Act. Section 1140 prohibits the use

of the words “Social Security” or certain related words

in connection with any advertisement, solicitation, or

other communication in a manner that conveys or

could reasonably be construed as conveying the false

impression that such advertisement or solicitation is

approved, endorsed, or authorized by the SSA or other

government agencies. 42 U.S.C. § 1320b-10(a)(1). The

SSA requested that NTU cease distribution of its

surveys.

NTU initially indicated that it would change the

design of its mailing to comply with the statute. The

revised mailing contained the following language:

“OFFICIAL NATIONAL SURVEY ON SOCIAL

SECURITY CONDUCTED BY THE NATIONAL

TAXPAYERS UNION AND COMMISSIONED FOR

THE WHITE HOUSE[,] UNITED STATES HOUSE OF

REPRESENTATIVES [AND] UNITED STATES

SENATE” The survey title, “OFFICIAL SURVEY ON

SOCIAL SECURITY,” remained unchanged.

After the SSA expressed its [**4] dissatisfaction

with NTU's” revised mailing and_ threatened

enforcement action, NTU filed this lawsuit against the

SSA in the district court. NTU alleged that § 1140 is

facially invalid because it is unconstitutionally

overbroad; § 1140 is unconstitutional as applied to

NTU's revised mailing, which contains only legitimate,

truthful representations; and the SSA’s threat of

enforcement amounts to a prior restraint of protected

speech.

The district court granted the SSA's motion to

dismiss the complaint. First, the court ruled that it

lacked jurisdiction to consider NTU's pre-enforcement

challenge to the constitutionality of § 1140. Relying on

Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 127 L. Ed.

2d 29, 114 S. Ct. 771 (1994), the district court held that

the administrative review procedures described in the

relevant statutes are the exclusive means for attacking

§ 1140 prior to its actual enforcement against NTU. The

district court then dismissed NTU's prior restraint

claim on the ground that the SSA's threatening

enforcement action through administrative procedures

was not so burdensome as to amount to a prior

restraint. This appeal followed. nl

nl On appeal, NTU argues only that the

district court erred by _ dismissing _ its

constitutional challenge to § 1140. NTU does not

seek to revive its prior restraint claim, and we

do not address that claim here.

II.

We review de novo the district court's dismissal

of NTU's complaint for lack of subject-matter

jurisdiction. See Columbia Gas Transmission Corp. v.

Drain, 237 F.3d 366, 369 (4th Cir. 2001). “In cases

involving delayed judicial review of final agency

actions, we shall find that Congress has allocated initial

review to an administrative body where such intent is

‘fairly discernible in the statutory scheme.'” Thunder

Basin, 510 U.S. at 207 (quoting Block v. Community

Nutrition Inst., 467 U.S. 340, 351, 81 L. Ed. 2d 270, 104 S.

Ct. 2450 (1984)). In determining whether Congress

intended to preclude initial judicial review in this

instance, we consider “the statute’s language, structure,

and purpose, its legislative history, and whether the

claims can be afforded meaningful judicial review.” Id.

The Supreme Court held in Thunder Basin that a

district court lacks subject-matter [*242] jurisdiction to

entertain pre-enforcement challenges to the Mine

Safety and Health Amendments Act of 1977, 30 U.S.C.

§ 801 et seq. (“Mine Act”). 510 U.S. at 202, 208. First, the

Court noted that the statute “establishes [**6] a

detailed structure for reviewing violations of any

mandatory health or safety standard, rule, order, or

regulation promulgated under the Act.” Id at 207.

Under the Mine Act, a mine operator can challenge an

adverse agency order before an administrative .law

judge, whose decision is reviewable by the Mine Safety

and Health Review Commission. If the mine operator

is dissatisfied with the Commission's ruling, it can

challenge that ruling in the appropriate court of

appeals, which has exclusive jurisdiction over such

cases. Id. at 207-08. Moreover, while the Mine Act

expressly authorizes district court jurisdiction over

actions by the Secretary of Labor to enjoin habitual

violations, it does not confer jurisdiction over actions

by mine operators complaining about agency actions. Id

at 209.

Second, the Court concluded that the legislative

history of the Mine Act suggests that “Congress

intended to direct ordinary challenges under the Mine

Act to a single review process.” Id. at 211. This

legislative history indicated that “enforcement was

hobbled by a cumbersome review process” under the

predecessor statute [**7] and that Congress expressly

rejected a proposal for de novo review of agency actions

in the district courts. Id.

Third, the Court concluded that the claims

asserted in the complaint fell within the class of claims

that Congress intended to be adjudicated within the

review process described by the statute. Thunder Basin,

° ieee ”

510 U.S. at 212. Thunder Basin's statutory claims fell

squarely within the agency's expertise, and _ its

constitutional due process claim could be decided by

the Commission. Id. at 214-15. In any event, the Court

noted that Thunder Basin's statutory and constitutional

claims could be “meaningfully addressed in the court

of appeals.” Id. at 215.

The statutory scheme at issue here resembles the

Mine Act scheme in all relevant respects, and it too

“establishes a detailed structure for reviewing

violations” of the statute. Thunder Basin, 510 U.S. at 207.

Section 1140 authorizes the SSA to impose civil

monetary penalties of up to $ 5,000 (or $ 25,000 in the

case of a broadcast or telecast) per violation against any

person who misuses the phrase “Social Security” in

violation of the statute. [**8] 42 U.S.C. § 1320b-10(b), (d).

Section 1140 further provides a detailed procedure for

assessment and review of such penalties. Id. § 1320b-

10(c)(1) (incorporating most of the provisions of 42

U.S.C. § 1320a-7(a), which governs civil monetary

penalties with respect to other violations concerning

Social Security).

Under this procedure, the SSA may initiate an

enforcement action within six years of the alleged

violation by serving notice of such action as required

by the Federal Rules of Civil Procedure. 42 U.S.C. §

1320a-7a(c)(1). The alleged violator is guaranteed an

opportunity to be heard, with the right to be

represented by counsel and the right to present and

cross-examine witnesses. Id. § 1320a-7a(c)(2). Any party

aggrieved by the ruling of the agency may petition the

appropriate court of appeals to review that ruling;

upon the filing of the record, the jurisdiction of the

court of appeals is exclusive. Id. § 1320a-7a(e).

[*243] Like the Mine Act, the statute here makes

no distinction between pre-enforcement and_ post-

enforcement claims. See Thunder Basin, 510 U.S. at 208-

09. [**9] Also like the Mine Act, the statute here

specifically authorizes district courts to exercise

jurisdiction over certain actions brought by the agency

but not by private parties. 42 U.S.C. § 1320b-10(c)(2); 42

U.S.C. § 1320a-7a(k). Thus, the text and structure of §

1140 indicate Congress' intention that challenges to that

statute be adjudicated, at least initially, in the

administrative review process. Cf. Sturm, Ruger & Co.,

Inc. v. Chao, 353 U.S. App. D.C. 245, 300 F.3d 867, 873

(D.C. Cir. 2002) (OSHA); Great Plains Coop v. CFTC, 205

F.3d 353, 355 (8th Cir. 2000) (Commodity Exchange

Act); Northeast Erectors Ass'n of BTE4 v. Secretary of

Labor, 62 F.3d 37, 39-40 (1st Cir. 1995) (OSHA).

The Court in Thunder Basin consulted the

legislative history of the Mine Act to confirm the

conclusion it drew from the text and structure of the

statute. n2 Although there is scant legislative history to

consider specifically with respect to the substance of §

1140, the legislative history underlying the civil

monetary penalties provision (incorporated by § 1140)

shows that Congress [**10] specifically rejected a

proposal allowing alleged violators to challenge final

agency actions in trials de novo in district court. See Pub.

L. No. 97-35, § 2105 (codified at 42 U.S.C. § 1320a-/a);

H.R. Conf. Rep. No. 97-208, at 950 (1981), reprinted in

1981 U.S.C.C.A.N. 1010, 1312. This legislative history is

similar to that in Thunder Basin and likewise suggests

that Congress intended pre-enforcement challenges to

§ 1140 to be adjudicated in the first instance by the

administrative agency rather than the district courts.

See 510 U.S. at 211.

n2 In no way did the Court suggest, as

NTU now argues, that the legislative history

stands on equal footing with the text and

structure of the statute or that specific legislative

history is necessary to conclude that Congress

intended to preclude initial judicial review. The

Court concluded from the text and structure of

the Mine Act that Congress intended to preclude

initial judicial resolution of Thunder Basin's

claims; the legislative history merely “confirmed

this interpretation” of the statute. Thunder Basin,

510 US. at 207-09.

[**11]

We further conclude that the claims asserted in

this case are “of the type Congress intended to be

reviewed within this statutory structure.” Thunder

Basin, 510 U.S. at 212. The Court in Thunder Basin noted

that it might be appropriate to bypass administrative

review in cases involving “claims considered ‘wholly

collateral’ to a statute's review provisions and outside

the agency's expertise, particularly where a finding of

preclusion could foreclose all meaningful judicial

review” Id. at 212-13 (internal citations omitted). Such

is not the case here.

10a

On appeal, NTU asserts only constitutional

claims, attacking the substantive provision of § 1140 -

the prohibition against certain uses of the phrase

“Social Security” - as a violation of the First Amendment

on its face and as applied. Although “adjudication of

the constitutionality of congressional enactments has

generally been thought beyond the jurisdiction of

administrative agencies,” the Court in Thunder Basin

noted that “this rule is not mandatory” and concluded

that a district court does not have jurisdiction to

entertain an initial challenge to the constitutionality of

the Mine Act. [**12] Id at 215. The Court seems to have

rested its conclusion on the fact that the plaintiff's

constitutional claim could be meaningfully addressed

by the court of appeals in due course. Id. In this case,

even if the [*244] administrative agency elects not to

decide the constitutional claims presented by NTIS,

this court can do so at the appropriate time. See Shalala

v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 23-

24, 146 L. Ed. 2d 1, 120 S. Ct. 1084 (2000) (citing Thunder

Basin for the proposition that a court reviewing an

agency determination “has adequate authority to

resolve any statutory or constitutional contention that

the agency does not, or cannot, decide”); Virginia v.

United States, 74 F.3d 517, 523 (4th Cir. 1996) (citing

Thunder Basin for the proposition that “there is simply

no impediment to the adjudication of constitutional

issues through petitions for direct review of final

agency action in the circuit courts”). n3

n3 This is not a case in which the plaintiff

challenges the validity of the agency's enabling

statute in an action wholly independent of the

agency's enforcement of a substantive provision.

lla

See, e.g, Time Warner Entm't Co., L.P. v. FCC, 320

U.S. App. D.C 294, 93 F.3d 957 (D.C. Cir. 1996)

(noting that the plaintiffs challenge to certain

statutory provisions was “entirely independent

of any agency proceedings, whether actual or

prospective”). Rather, NTU brought this action

in anticipation of imminent enforcement

proceedings, and its arguments amount to

defenses to enforcement of § 1140. Nor is this a

case in which permitting the constitutional

challenge in district court would be consistent

with other statutory provisions authorizing suits

in district court. See, e.g., Action for Children's

Television v. FCC, 313 U.S. App. D.C. 261, 59 F.3d

1249 (D.C. Cir. 1995) (permitting the plaintiff to

_ bypass administrative review where the relevant

statute authorized suits in district court to

collect on a forfeiture order, such that the

plaintiffs challenging the constitutionality of the

forfeiture statute in defense against such a

collection action was entirely consistent with the

statutory scheme). NTU's challenge is aimed at

the substantive provision of § 1140 - the

prohibition against certain uses of the phrase

“Social Security” - not the SSA's authority to

impose civil monetary penalties for violation of

that provision. In sum, NTU's complaint

represents an impermissible attempt to evade

the administrative review scheme established by

Congress. Cf. Thunder Basin, 510 U.S. at 216;

AFGE v. Loy, 367 F.3d 932, 936 (D.C. Cir. 2004);

Sturm, Ruger, 300 F.3d at 876; Great Plains Coop,

205 F.3d at 354-55; Northeast Erectors, 62 F.3d at

40.

"135i

“The limitation imposed here is channeling of

initial review through the administrative process, not

exclusion of judicial supervision.” Eastern Bridge, LLC v.

Chao, 320 F.3d 84, 90 (Ist Cir. 2003). NTU's

constitutional claims are of the type Congress intended

to be adjudicated in the statutory review process, and

that process will give NTU a meaningful opportunity

to litigate its constitutional challenge to § 1140.

Accordingly, we conclude that NTU's claims must be

adjudicated initially under the administrative review

scheme established by Congress in the statute.

II.

Because the administrative review procedures

available here are nearly indistinguishable from those

at issue in Thunder Basin, and because the claims

asserted here are of the type Congress intended to be

adjudicated, at least initially, through the

administrative review scheme, the district court

properly ruled that it lacked subject-matter jurisdiction

over this case. The decision of the district court is

therefore

AFFIRMED.

CONCURBY: WILKINSON

CONCUR: WILKINSON, Circuit Judge, concurring:

We do not have before us a pre-enforcement

challenge to a statute that seeks to silence criticism of

13a

[**14] the operation of a government program. All that

is at issue is a Statute that forbids the impersonation of

a federal agency by a private organization bent on

sowing confusion among beneficiaries of a program

and thereby thwarting the purposes it was intended to

serve. In this context, Congress had unquestionable

authority to adopt the administrative procedures that it

did. Compare Mathews v. [*245] Eldridge, 424 U.S. 319,

331 n. 11, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976)

(emphasizing that the “nature of the claim being

asserted and the consequences of deferment of judicial

review’ will often bear on whether district court

jurisdiction is proper prior to final agency disposition).

I am thus happy to concur in Judge Shedd's fine

opinion.

l4a

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

NATIONAL TAXPAYER

UNION

Vv. ; Civil Action

- WMN-02-3949

UNITED STATES

SOCIAL SECURITY

ADMINISTRATION, et al.

[ENTERED: September 3, 2003]

MEMORANDUM

Plaintiff filed this action challenging the

constitutionality of § 1140 of the Social Security Act, 42

U.S.C. § 1320b-10, a statute that limits the use of certain

federal agency names and programs in solicitations

and other communications. In the Complaint, Plaintiff

asserts that § 1140 is unconstitutional on its face (Count

I) and as applied (Count II), and also argues that the

Social Security Administration's Office of the Inspector

General’s (OIG’s) request for pre-publication

submissions of Plaintiff's mailings, coupled with the

threat of significant civil penalties, constitutes a prior

restraint of speech (Count III). Defendants have filed a

motion to dismiss the complaint Pursuant to Rule

12(b)(1) and Rule 12(b)(6) of the Federal Rules of Civil

Procedure. Paper No. 5. Defendants argue that this

Court lacks jurisdiction over Plaintiff's pre-

enforcement challenge to the statute, and _ that

Plaintiffs prior restraint count fails to state a claim

upon which relief can be granted. Upon review of the

15a

pleadings and the applicable case law, the Court finds

that no hearing is required and that Defendants’

motion should be granted.!

I. FACTUAL BACKGROUND

Plaintiff describes itself as an “organization

which engages in grassroots education, research and

lobbying on issues of importance to taxpayers in the

United States.” Complaint at § 1. One of its current

areas of activity is the reform of the Social Security

system. As part of Plaintiff's efforts in that regard, it

began mailing, in early 2002, surveys about various

aspects of the Social Security system. These surveys

also solicited funds. Plaintiff's mailings were sent out

in envelopes marked, “OFFICIAL NATIONAL

SURVEY ON SOCIAL SECURITY COMMISSIONED

BY THE NATIONAL TAXPAYERS UNION FOR THE

SOCIAL SECURITY ADMINISTRATION, WHITE

HOUSE AND CONGRESS OF THE UNITED STATES.”

The surveys inside the envelope repeated that these

were “OFFICIAL SURVEY(S) ON SOCIAL

SECURITY.”

On April 3, 2002, the OIG sent Plaintiff a notice

that it had determined that this survey violated § 1140

of the Social Security Act. Section 1140 prohibits the

use of the words “Social Security” or related words,

acronyms, emblems and symbols in connection with

1 Plaintiff has also filed a cross motion for partial summary

judgment, arguing that it is entitled to judgment as a matter of law

as to Counts I and II of the Complaint. Paper No. 11. Because the

Court finds that it lacks subject matter jurisdiction over those

claims, Plaintiff's motion will be denied as moot.

125 1 ety Tp 2

l6a

any advertisement, solicitation or other communication

“in a manner which such person knows or should

know would convey, or in a manner which reasonably

could be interpreted or construed as conveying, the

false impression that such item is approved, enforced

or authorized by the Social Security Administration.”

42 U.S.C. § 1320b-10(a). The OIG’s letter requested that

Plaintiff cease such prohibited use.

Plaintiff responded on April 12, 2002, indicating

that it would voluntarily change the design of its

survey and solicitation to comply with the statute. In

September 2002, however, the OIG received another

copy of a survey distributed by Plaintiff that, in the

OIG’s view, contained essentially the same violative

language. The OIG sent Plaintiff another letter

informing that it found the revised survey still in

violation of § 1140, and requested written confirmation

that Plaintiff would voluntarily comply with the

statute. The letter also stated that if such confirmation

were not received within 10 days, the OIG would

commence a formal enforcement action. Plaintiff

responded with a letter stating that it viewed § 1140

unconstitutional as applied, and that it would not

provide a written confirmation of compliance. Shortly

thereafter, Plaintiff filed the instant suit.

Il. DISCUSSION

A. Jurisdiction over Pre-enforcement

Challenges

Section 1140 authorizes the SSA to impose civil

monetary penalties on those that violate its provisions.

1 Shi Ak NLR AAD GA ROSY ALERTS RNY Mea a Sa NER ON et ROM OTE! eA ER ROR ME ESTE EO

17a

If the violation involves printed material, each

violation is subject to a penalty of up to $5,000. In the

case of mass mailings, each individual piece of mail can

be considered a separate violation. 42 U.S.C. § 1320b-

10(b). Enforcement of these provisions is through the

OIG. 42 U.S.C. § 1320b(d).

The statute, in conjunction with _ its

implementing regulations, see 20 C.F.R. §§ 498.100-

498.224, also provides a comprehensive administrative

process for the assessment of penalties, and the review

of those assessments. Briefly summarized, this process

provides the alleged violator, or “respondent,” with

notice, the opportunity for a full evidentiary hearing

before an Administrative Law Judge, the right to

appeal the ALJ's decision to the Departmental Appeals

Board of the United States Department of Health and

Human Services, and ultimately, the right to appeal

any final adverse penalty determination to the federal

courts of appeals.

In Thunder Basin Coal Co. v. Reich, 510 U.S. 200

(1994), the Supreme Court set out the standard for

determining whether a district court could assume

jurisdiction over a pre-enforcement challenge to an

agency’s action where a statutory administrative

procedure had been established. The Court instructed:

[i]In cases involving delayed judicial

review of agency actions, we shall find

that Congress has allocated initial review

to an administrative body where such

intent is “fairly discernible in the

statutory scheme.” Whether a statute is

18a

intended to preclude initial judicial

review is determined from the statute's

language, structure, and purpose, its

legislative history, and whether the

claims can be afforded meaningful

review.

510 U.S. at 207 (quoting Block v. Community Nutrition

Institute, 467 U.S. 340, 351 (1984)).

Thunder Basin arose out of a coal mine

operator’s challenge to the actions of a federal Mine

Safety and Health Administration (MSHA) official,

who had instructed the operator to post certain

information in accordance with regulations

promulgated under the Federal Mine Safety and

Health Amendments Act of 1977. Rather than waiting

for the MSHA to issue a citation, and then challenging

the agency’s action through the administrative

procedure provided for in the Act, the mine operator

sought injunctive relief in a federal district court. The

district court issued a preliminary injunction, but the

Tenth Circuit Court of Appeals reversed that decision,

concluding that the district court was without

jurisdiction. The Supreme Court affirmed the decision

of the Tenth Circuit, holding that “the statutory review

scheme in the Federal Mine Safety and Health

Amendments Act of 1977 prevents a district court from

exercising subject matter jurisdiction over a pre-

enforcement challenge to the Act.” Id. at 202.

Applying its test for determining Congress’

intent, the Supreme Court first noted that the Mine Act

“establishe[d] a detailed structure for reviewing

———

19a

violations of any mandatory health or safety standard,

rule, order, or regulation promulgated under the Act.”

Id. at 207 (internal quotations omitted). The Court

pointed to several factors in support of this argument.

The Mine Act specified a time period of thirty days

_during which a mine operator could challenge any

citation, directed that all challenges be heard by an

ALJ, established the Federal Mine Safety and Health

Review Commission (FMSHRC) to review the ALJ's

decisions, invested the sole power to impose penalties

for violations of the Act in the FMSHRC, and granted

mine operators the right to appeal adverse FMSHRC

rulings to the appropriate federal court of appeals. Id.

at 207-08. Moreover, the Court noted that the Act did

not “distinguish between preenforcement and

postenforcement challenges, but applie[d] to all

violations of the Act and its regulations.” Id. at 208-09.

Significantly, the Mine Act expressly authorized

district court jurisdiction in only two instances--both of

which could be initiated only by the agency, not by a

mine operator. Id. at 209.

The Court also looked to the legislative history

of the Mine Act to support its holding that initial

judicial review of the agency’s action in the district

court was precluded. In particular, the Court observed

that the Mine Act attempted to correct a system in

which civil penalties for safety violations in United

States mines “were not always mandatory and were

too low to compel compliance, and enforcement was

hobbled by a cumbersome review process. Congress

expressed particular concern that under the previous

Coal Act, mine operators could contest civil-penalty

assessments de novo in federal district court once the

20a

administrative review process was complete, thereby

seriously hampering the collection of civil penalties.”

Id. at 209-10 (internal quotations omitted). The Court

concluded that the legislative history was “persuasive

evidence that Congress intended to direct ordinary

challenges under the Mine Act.to a single review

process.” Id. at 211.

Finally, the Court concluded that the plaintiff's

claims could be afforded “meaningful review” through

the administrative process established under the Mine

Act, for plaintiffs claims were within the scope of the

statute’s review provisions and the agency's expertise,

and they could be meaningfully addressed by the

Court of Appeals. See id. at 212-15.

Applying this same three part test to the

provisions of § 1140, and the regulatory scheme

promulgated thereunder, this Court concludes that it is

without jurisdiction to hear Plaintiff's pre-enforcement

challenges to the statute. First, the Court finds that the

language, structure, and purpose of § 1140 support a

holding that the administrative process is the exclusive

remedy for claims challenging the statute. The review

scheme established for the enforcement of § 1140 is

very similar to that considered in Thunder Basin. Both

statutes: specify the time and procedures for contesting

an agency enforcement action, refer all such contests to

an ALJ for an evidentiary hearing; and, grant an appeal

of any adverse rulings, first to a designated

intermediate body, and then to a federal circuit court

appeals. Furthermore, § 1140, like the Mine Act,

authorizes original actions in the district courts in a

finite number of situations, but only to be initiated by

LTA ALLE TS eS ee

SF SATHANA TOD De it aed ee

21a

—

the agency, and not by the respondent. See 42 U.S.C. §

1320a-7a(k) and 1320b-10(c)(2)

The legislative history of § 1140, while

somewhat scant, is also consistent with a congressional

intent to limit judicial review of § 1140 violations to the

review of final determinations in the courts of appeals.

This legislation was passed to address a pattern of

deceptive advertising that was targeted to senior

citizens. Advertisers produced mailings that were

designed so that they appeared to be official notices

from the federal government in order to lure seniors

into making (and paying for) useless calls to “1-900"

telephone numbers, or into paying for services that

could be accomplished for free or at a minimal cost by

dealing directly with the SSA. See Committee on

House Ways and Means, Subcommittees on Oversight

and on Social Security, Deceptive Solicitations (Comm.

Print 1992) at 3-5. Congress concluded that these

practices not only harmed vulnerable senior citizens,

but also “potentially interfere[] with the ability of the

Government to effectively correspond with the public

and increase[] the likelihood that true Government

mailings will be destroyed without being opened.” Id.

at 5.

In 1994, § 1140 was amended to remedy what

-was perceived as weaknesses in its enforcement

provisions. An annual $10,000 cap on penalties was

eliminated in response to concerns that a $10,000

penalty “did not serve as_an adequate deterrent to

groups who can take in millions of dollars each year by

engaging in deceptive practices.” H.R. Rep. No. 103-

506, 1034 Cong. 24 Sess. 71 (1994), reprinted in 1994

— a

U.S.C.C.A.N. 1494, 1524. The amendment also repealed

a requirement that the Department of Health and

Human Services obtain a formal declination from the

Department of Justice before pursuing penalties under

§ 1140. Congress found that this requirement had

unnecessarily delayed the assessment of penalties. Id.

at 1525.

The Court also concludes that Plaintiff's claims

are “of the type Congress intended to be reviewed

within this statutory structure,” and can be afforded

meaningful review through that process. Thunder

Basin, 510 US. at 212. In similar contexts, courts have

consistently held that both “as applied,” as well as

“facial” constitutional pre-enforcement challenges

must be resolved through the administrative process,

with judicial review only in the circuit courts. See

Thunder Basin; Sturm, Ruger & Co. v Chao, 300 F.3d

867 (2002) (holding that district court had no subject

matter jurisdiction over Fourth Amendment privacy

interest challenge to data collection initiative of

Occupational Safety and Health Administration, and

that plaintiff must pursue claim through administrative

review process prescribed by Occupational Safety and

Health Act); Virginia v. United States, 74 F.3d 517 (4"

Cir. 1996) (holding that the plaintiff could not evade

the judicial review provision of the Clean Air Act by

casting its complaint as a constitutional attack on the

Act itself); Southern Pines Assoc. v. United States, 912

F.2d 713, 717 (4% Cir. 1990) (affirming district court's

dismissal of pre-enforcement due process challenge to

the Clean Water Act); General Electric Co. v. Whitman,

257 FSupp.2d 8, 28 (D.D.C. 2003) (observing that

“whether a statute precludes or delays judicial review

23a

of a particular claim should not turn on some artificial

or clever distinction put forth by the party attempting

evade the statute’s judicial review limitation - whether

constitutional versus statutory, facial versus as-applied,

or procedural versus substantive”). Here, Plaintiff

makes no claim that it would be precluded from

raising its constitutional challenges before the

appropriate circuit court.

In arguing that it should be afforded pre-

enforcement judicial review, Plaintiff relies primarily

on the Supreme Court decision Abbott Laboratories v.

Gardner, 387 U.S. 136 (1967). In Abbott, The Supreme

Court did hold that statutory review of certain

provisions of the Food, Drug, and Cosmetic Act did not

preclude district court jurisdiction over a _ pre-

enforcement challenge to regulations promulgated

under separate provisions of that act. It did so,

however, only after finding that the presence of a

statutory savings clause and the statute’s legislative

history demonstrated, “rather conclusively that the

specific review provisions were designed to give an

additional remedy and not to cut down more

traditional channels of review.” 387 U.S. at 142.

Although Plaintiff identifies Abbott Laboratories as the

“seminal case” in the area of pre-enforcement

challenges, it offers no argument as to how § 1140

might be similar to the statute at issue in that decision.?

? Plaintiff also relies on Commodity Trend Service v. Commodity

Futures Trading Comm'n, 233 F.3d 981 (7 Cir. 2000). In

Commodity Trend, however, the issue was ripeness, not statutory

prectusion of district court jurisdiction.

24a

Plaintiff also argues that preclusion in this

instance is inappropriate because “the escalating nature

of the fines which the agency can impose on a per-mail-

piece basis,” is requiring Plaintiff to “self-censor.” Opp.

at 6. The Supreme Court rejected a similar argument in

Thunder Basin, noting that “although the Act's civil

penalties unquestionably may become onerous if

petitioner chooses not to comply, the Secretary's

penalty assessments become final and payable only

after full review by the Commission and _ the

appropriate court of appeals.” 510 US. at 218; see also

Strum, Ruger, 300 F.3d at 252 (noting that one wishing

to challenge the statute can refuse to comply, “draw a

citation from OSHA, and then contest the citation

through the statutory review procedures _ that

ultimately ends in a court of appeals”).

For these reasons, the Court finds that Plaintiff's

facial and as applied constitutional challenges must be

dismissed as this Court has no jurisdiction over those

claims.

B. Prior Restraints of Speech

In moving to dismiss Plaintiff's prior restraint

claim, Defendants again rely on Thunder Basin,

observing that, like Thunder Basin, “this as not a

situation where compliance is so burdensome and the

threat of penalties so potent that a constitutionally

intolerable choice is presented.” Motion at 33. To bring

its mailing into compliance, Defendants have indicated

that Plaintiff would need to do no more than identify

its mailing as “NTU’s Official National Survey on

Social Security,” as opposed to “Official National

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25a

Survey on Social Security.” As to the scope of potential

penalties, Defendants note that while Congress

repealed the $10,000 cap, that repeal certainly does not

mandate the imposition of the maximum penalties

allowed under the statute. Any penalties assessed must

still be reasonable, and the agency is required to take

into account such factors as the nature and

circumstances of the communication, the degree of

culpability, the history of prior offenses, and the

financial condition of the respondent. See 42 U.S.C.

§ 1320a-7a(d). Defendants also note that proposed

penalties do not become final and payable until the

agency makes a final decision, and the regulations

include provisions for a stay of the effective date of any

penalty pending appeal. See 20 U.S.C. § 498.223. In its

meager opposition, Plaintiff does not respond directly

to any of these arguments.

The Court concludes that the complaint does not

state a claim for an unlawful prior restraint of speech.

Il. CONCLUSION

For the reasons stated above, the Court

concludes that Defendants’ motion should be granted,

and the complaint dismissed. A separate order will

issue.

/s/ William M. Nickerson

William M Nickerson

Senior United States District Judge

Dated: September 3, 2003

26a

TITLE 42 > CHAPTER 7 > SUBCHAPTER XI > Part A

> Sec. 1320a-7a.

Sec. 1320a-7a. - Civil monetary penalties

(a) Improperly filed claims

Any person (including an organization, agency,

or other entity, but excluding a beneficiary, as

defined in subsection (i)(5) of this section) that -

(1)

knowingly presents or causes to be presented

to an officer, employee, or agent of the United

States, or of any department or agency thereof,

or of any State agency (as defined in subsection

(i)(1) of this section), a claim (as defined in

subsection (i)(2) of this section) that the

Secretary determines -

(A)

is for a medical or other item or service

that the person knows or should know was

not provided as claimed, including any

person who engages in a pattern or practice

of presenting or causing to be presented a

claim for an item or service that is based on a

code that the person knows or should know

will result in a greater payment to the person

than the code the person knows or should

know is applicable to the item or service

actually provided,

27a

(B)

is for a medical or other item or service

and the person knows or should know the

claim is false or fraudulent,

(C)

is presented for a physician's service (or

an item or service incident to a physician's

service) by a person who knows or should

know that the individual who furnished (or

supervised the furnishing of) the service -

(i)

was not licensed as a physician,

(ii)

was licensed as a physician, but such

license had been obtained through a

misrepresentation of material fact

(including cheating on an examination

required for licensing); or

(iii)

represented to the patient at the time

the service was furnished that the

physician was certified in a medical

specialty by a medical specialty board

when the individual was not so certified,

28a

(D)

is for a medical or other item or service

furnished during a period in which the

person was excluded from the program

under which the claim was made pursuant to

a determination by the Secretary under this

section or under section 1320a-7, 1320c-5,

1320c-9(b) (as in effect on September 2, 1982),

1395y(d) (as in effect on August 18, 1987), or

1395cc(b) of this title or as a result of the

application of the provisions of section

1395u(j)(2) of this title, or

(E)

is for a pattern of medical or other items

or services that a person knows or should

know are not medically necessary;

(2)

knowingly presents or causes to be presented

to any person a request for payment which is in

violation of the terms of

(A)

an assignment under section

1395u(b)(3)(B)(ii) of this title, or

(B)

an agreement with a State agency (or

other requirement of a State plan under

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;

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Sn ad aa ee Pi anyogees

29a

subchapter XIX of this chapter) not to charge

a person for an item or service in excess of

the amount permitted to be charged, or

(C)

an agreement to be a_ participating

physician or supplier under _ section

1395u(h)(1) of this title, or

(D)

an agreement pursuant to _ section

1395cc(a)(1)(G) of this title;

knowingly gives or causes to be given to any

person, with respect to coverage under

subchapter XVIII of this chapter of inpatient

hospital services subject to the provisions of

section 1395ww of this title, information that he

knows or should know is false or misleading,

and that could reasonably be expected to

influence the decision when to discharge such

person or another individual from the hospital;

in the case of a person who is not an

organization, agency, or other entity, is excluded

from participating in a program under

subchapter XVIII of this chapter or a State health

care program in accordance with this subsection

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or under section 1320a-7 of this title and who, at

the time of a violation of this subsection -

(A)

ng ante aE ley Pobre Koma wet

retains a direct or indirect ownership or

control interest in an entity that is

participating in a program under subchapter

XVIII of this chapter or a State health care

program, and who knows or should know of

the action constituting the basis for the

exclusion; or

(B)

is an officer or managing employee (as

defined in section 1320a-5(b) of this title) of

such an entity;

(5)

offers to or transfers remuneration to any

individual eligible for benefits under subchapter

XVIII of this chapter, or under a State health care

program (as defined in section 1320a-7(h) of this

title) that such person knows or should know is

likely to influence such individual to order or

receive from a particular provider, practitioner,

or supplier any item or service for which

payment may be made, in whole or in part,

under subchapter XVIII of this chapter, or a

State health care program (as so defined);

3 ;

atic ON pe nee Se

(6)

arranges or contracts (by employment or

otherwise) with an individual or entity that the

person knows or should know is excluded from

participation in a Federal health care program

(as defined in section 1320a-7b(f) of this title), for

the provision of items or services for which

payment may be made under such a program,

or |

(7)

commits an act described in paragraph (1) or

(2) of section 1320a-7b(b) of this title;

shall be subject, in addition to any other

penalties that may be prescribed by law, to a civil

money penalty of not more than $10,000 for each

item or service (or, in cases under paragraph (3),

$15,000 for each individual with respect to whom

false or misleading information was given; in cases

under paragraph (4), $10,000 for each day the

prohibited relationship occurs; or in cases under

paragraph (7), $50,000 for each such act). In

addition, such a person shall be subject to an

assessment of not more than 3 times the amount

claimed for each such item or service in lieu of

damages sustained by the United States or a State

agency because of such claim (or, in cases under

paragraph (7), damages of not more than 3 times

the total amount of remuneration offered, paid,

solicited, or received, without regard to whether a

portion of such remuneration was offered, paid,

32a

solicited, or received for a lawful purpose). In

addition the Secretary may make a determination in

the same proceeding to exclude the person from

participation in the Federal health care programs

(as defined in section 1320a-7b(f)(1) of this title) and

to direct the appropriate State agency to exclude the

person from participation in any State health care

_ program.

(b) Payments to induce reduction or limitation of

services

RPGS ROLES ARENAS Ite WO FORE 8 Hele Te + me

SPs Steg Bad cM Ade

(1)

If a hospital or a critical access hospital

knowingly makes a payment, directly or

indirectly, to a physician as an inducement to

reduce or limit services provided with respect to

individuals who -

é.

}

(A)

are entitled to benefits under part A or

part B of subchapter XVIII of this chapter or

to medical assistance under a State plan

approved under subchapter XIX of this

chapter, and

(B)

are under the direct care of the physician,

the hospital or a critical access hospital shall be

subject, in addition to any other penalties that may

*, . Ma *

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33a

be prescribed by law, to a civil money penalty of

not more than $2,000 for each such individual with

respect to whom the payment is made.

(2)

Any physician who knowingly accepts

receipt of a payment described in paragraph (1)

shall be subject, in addition to any other

penalties that may be prescribed by law, to a

civil money penalty of not more than $2,000 for

each individual described in such paragraph

with respect to whom the payment is made.

(3)

(A)

Any physician who executes a document

described in subparagraph (B) with respect

to an individual knowing that all of the

requirements referred to in _ such

subparagraph are not met with respect to the

individual shall be subject to a civil monetary

penalty of not more than the greater of -

(i)

$5,000, or

(ii)

three times the amount of the

payments under subchapter XVIII of this

34a

chapter for home health services which

are made pursuant to such certification.

(B)

A document described in ___ this

subparagraph is any document that certifies,

for purposes of subchapter XVIII of this

chapter, that an individual meets the

requirements of section 1395f(a)(2)(C) or

1395n(a)(2)(A) of this title in the case of home

health services furnished to the individual.

General, notice, etc., estoppel, failure to comply with

order or procedure

(1)

The Secretary may initiate a proceeding to

determine whether to impose a civil money

penalty, assessment, or exclusion under

subsection (a) or (b) of this section only as

authorized by the Attorney General pursuant to

procedures agreed upon by them. The Secretary

may not initiate an action under this section

with respect to any claim, request for payment,

or other occurrence described in this section

later than six years after the date the claim was

presented, the request for payment was made,

or the occurrence took place. The Secretary may

initiate an action under this section by serving

notice of the action in any manner authorized by

Rule 4 of the Federal Rules of Civil Procedure.

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Sa a ht RRA T HT ICI A ye

35a

The Secretary shall not make a determination

adverse to any person under subsection (a) or

(b) of this section until the person has been

given written notice and an opportunity for the

determination to be made on the record after a

hearing at which the person is entitled to be

represented by counsel, to present witnesses,

and to cross-examine witnesses against the

person.

(3)

In a proceeding under subsection (a) or (b) of

this section which -

(A)

is against a person who has been

convicted (whether upon a verdict after trial

or upon a plea of guilty or nolo contendere)

of a Federal crime charging fraud or false

statements, and

(B)

involves the same transaction as in the

criminal action,

the person is estopped from denying the

essential elements of the criminal offense.

(4)

36a

The official conducting a hearing under this

section may sanction a person, including any

party or attorney, for failing to comply with an

order or procedure, failing to defend an action,

or other misconduct as would interfere with the

speedy, orderly, or fair conduct of the hearing.

Such sanction shall reasonably relate to the

severity and nature of the failure or misconduct.

Such sanction may include -

(A)

in the case of refusal to provide or permit

discovery, drawing negative factual

inferences or treating such refusal as an

admission by deeming the matter, or certain

facts, to be established,

(B)

prohibiting a party from introducing

certain evidence or otherwise supporting a

particular claim or defense,

(C)

striking pleadings, in whole or in part,

(D)

staying the proceedings,

(E)

dismissal of the action,

(F)

entering a default judgment,

(G)

ordering the party or attorney to pay

attorneys' fees and other costs caused by the

failure or misconduct, and

(H)

refusing to consider any motion or other

action which is not filed in a timely manner.

(d) Amount or scope of penalty, assessment, or

exclusion -

In determining the amount or scope of any

penalty, assessment, or exclusion imposed pursuant

to subsection (a) or (b) of this section, the Secretary

shall take into account -

(1)

the nature of claims and the circumstances

under which they were presented,

(2)

the degree of culpability, history of prior

offenses, and financial condition of the person

presenting the claims, and

(3)

such other matters as justice may require.

(e) Review by courts of appeals

Any person adversely affected by a

determination of the Secretary under this section

may obtain a review of such determination in the

United States Court of Appeals for the circuit in

which the person resides, or in which the claim was

presented, by filing in such court (within sixty days

following the date the person is notified of the

Secretary's determination) a written petition

requesting that the determination be modified or

set aside. A copy of the petition shall be forthwith

transmitted by the clerk of the court to the

Secretary, and thereupon the Secretary shall file in

the Court! the record in the proceeding as provided

in section 2112, of title 28. Upon such filing, the

court shall have jurisdiction of the proceeding and

of the question determined therein, and shall have

the power to make and enter upon the pleadings,

testimony, and proceedings set forth in such record

a decree affirming, modifying, remanding for

further consideration, or setting aside, in whole or

in part, the determination of the Secretary and

enforcing the same to the extent that such order is

Oe a ae ee

39a

affirmed or modified. No objection that has not

been urged before the Secretary shall be considered

by the court, unless the failure or neglect to urge

such objection shall be excused because of

extraordinary circumstances. The findings of the

Secretary with respect to questions of fact, if

supported by substantial evidence on the record

considered as a whole, shall be conclusive. If any

party shall apply to the court for leave to adduce

additional evidence and shall show to the

satisfaction of the court that such additional

evidence is material and that there were reasonable

grounds for the failure to adduce such evidence in

the hearing before the Secretary, the court may

order such additional evidence to be taken before

the Secretary and to be made a part of the record.

The Secretary may modify his findings as to the

facts, or make new findings, by reason of additional

evidence so taken and filed, and he shall file with

the court such modified or new findings, which

findings with respect to questions of fact, if

supported by substantial evidence on the record

considered as a whole, shall be conclusive, and his

recommendations, if any, for the modification or

setting aside of his original order. Upon the filing of

the record with it, the jurisdiction of the court shall

be exclusive and its judgment and decree shall be

final, except that the same shall be subject to review

by the Supreme Court of the United States, as

provided in section 1254 of title 28.

ch Lh OGL NIE Re LEE ODI I Mi intl Pelscel ebibde hatdeakiobes oe uote eae a a

(f) Compromise of penalties and assessments; recovery;

use of funds recovered

40a

Civil money penalties and assessments imposed

under this section may be compromised by the

Secretary and may be recovered in a civil action in

the name of the United States brought in United

States district court for the district where the claim

was presented, or where the claimant resides, as

determined by the Secretary. Amounts recovered

under this section shall be paid to the Secretary and

disposed of as follows:

(1)

(A)

In the case of amounts recovered arising

out of a claim under subchapter XIX of this

chapter, there shall be paid to the State

agency an amount bearing the same

proportion to the total amount recovered as

the State's share of the amount paid by the

State agency for such claim bears to the total

amount paid for such claim.

In the case of amounts recovered arising

out of a claim under an allotment to a State

under subchapter V of this chapter, there

shall be paid to the State agency an amount

equal to three-sevenths of the amount

recovered.

4la

(2)

Such portion of the amounts recovered as is

determined to have been paid out of the trust

funds under sections 1395i and 1395t of this title

shall be repaid to such trust funds.

(3)

With respect to amounts recovered arising

out of a claim under a Federal health care

program (as defined in section 1320a-7b(f) of

this title), the portion of such amounts as is

determined to have been paid by the program

shall be repaid to the program, and the portion

of such amounts attributable to the amounts

recovered under this section by reason of the

amendments made by the Health Insurance

Portability and Accountability Act of 1996 (as

estimated by the Secretary) shall be deposited

into the Federal Hospital Insurance Trust Fund

pursuant to section 1395i(k)(2)(C) of this title.

The remainder of the amounts recovered

shall be deposited as miscellaneous receipts of

the Treasury of the United States.

The amount of such penalty or assessment,

| when finally determined, or the amount agreed

é upon in compromise, may be deducted from any

sum then or later owing by the United States or a

42a

State agency to the person against whom the

penalty or assessment has been assessed.

(g) Finality of determination respecting penalty,

assessment, or exclusion

A determination by the Secretary to impose a

penalty, assessment, or exclusion under subsection

(a) or (b) of this section shall be final upon the

expiration of the sixty-day period referred to in

subsection (e) of this section. Matters that were

raised or that could have been raised in a hearing

before the Secretary or in an appeal pursuant to

subsection (e) of this section may not be raised as a

defense to a civil action by the United States to

collect a penalty, assessment, or exclusion assessed

under this section.

(h) Notification of appropriate entities of finality of

determination

Whenever the Secretary's determination to

impose a penalty, assessment, or exclusion under

subsection (a) or (b) of this section becomes final, he

shall notify the appropriate State or local medical or

professional organization, the appropriate State

agency or agencies administering or supervising the

administration of State health care programs (as

defined in section 1320a-7(h) of this title), and the

appropriate utilization and quality control peer

review organization, and the appropriate State or

local licensing agency or organization (including

the agency specified in section 1395aa(a) and

1396a(a)(33) of this title) that such a penalty,

43a

assessment, or exclusion has become final and the

reasons therefor.

(i) Definitions

For the purposes of this section:

(1)

(2)

(3)

The term "State agency" means the agency

established or designated to administer or

supervise the administration of the State plan

under subchapter XIX of this chapter or

designated to administer the State's program

under subchapter V of this chapter or

subchapter XX of this chapter.

The term "claim" means an application for

payments for items and services under a Federal

health care program (as defined in section

1320a-7b(f) of this title).

The term "item or service" includes

(A)

any particular item, device, medical

supply, or service claimed to have been

provided to a patient and listed in an

itemized claim for payment, and

(4)

44a

(B)

in the case of a claim based on costs, any

entry in the cost report, books of account or