Opinion
4:23-cv-04082-SLD-JEH
09-28-2023
ROBERT E. NELSON, Plaintiff, v. SOCIAL SECURITY ADMINISTRATION and MICHAEL WYDEL, Defendants.
REPORT AND RECOMMENDATION
JONATHAN E. HAWLEY, U.S. MAGISTRATE JUDGE
Now before the Court is the Defendant's Combined Motion to Dismiss and Memorandum in Support Thereof (Doc. 4). This matter has been referred for a Report and Recommendation. The Motion is fully briefed, and for the reasons stated herein, the Court recommends the Plaintiff's Complaint be dismissed for lack of subject matter jurisdiction.
I
On May 23, 2023, the Acting Commissioner of Social Security removed this case from the Circuit Court for the Thirteenth Judicial Circuit in Bureau County, Illinois to this Court pursuant to 28 U.S.C. § 1442. See 28 U.S.C. § 1442(a)(1) (providing a civil action commenced in State court against or directed to “[t]he United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office” may be removed to federal district court). In his underlying state court form Small Claims Complaint (Doc. 1-1), Plaintiff Robert E. Nelson named Michael Weitl,District Manager in the Social Security field office in Peru, Illinois as the Defendant. The Plaintiff alleged“unlawful suspention [sic] of benefits. This has caused me mental anguish. As of this day I still haven't received past benefits.” (Doc. 1-1 at pg. 4).
The Plaintiff incorrectly spelled the Defendant's name as “Wydel.” See Compl. (Doc. 1-1 at pg. 3) and Notice of Removal (Doc. 1 at pg. 1).
Upon removal, the Acting Commissioner included the Social Security Administration as a defendant in the caption of this case.
When ruling on a motion to dismiss for lack of subject matter jurisdiction, the court accepts as true the well pleaded factual allegations and draws all reasonable inferences in favor of the plaintiff. Center for Dermatology and Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588 (7th Cir. 2014).
II
The Defendant moves to dismiss this case for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). “Motions to dismiss under Rule 12(b)(1) are meant to test the sufficiency of the complaint, not to decide the merits of the case.” Ctr. for Dermatology and Skin Cancer, Ltd. v. Burwell, 770 F.3d 586, 588 (7th Cir. 2014). Where, as here, a factual challenge to subject matter jurisdiction has been made, “the court may look beyond the pleadings and view any evidence submitted to determine if subject matter jurisdiction exists.” Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (“A factual challenge contends that there is in fact no subject matter jurisdiction, even if the pleadings are formally sufficient”) (emphasis in original).
A
The Defendant set forth the following facts taken from exhibits attached to its Motion. The Plaintiff was appointed to be the representative payee for his son's auxiliary Social Security benefits. Dft's MTD, Exh. 1 (Doc. 4-1 at pgs. 1-4). The Plaintiff was arrested and jailed in 2022 which the Social Security Administration (SSA) found out about through the Prisoner Update Processing System (PUPS).Dft's MTD, Exh. 3 Weitl Declaration (Doc. 4-3 at pg. 2). By virtue of the Plaintiff being arrested and in jail at least overnight, the Plaintiff's son's benefits were suspended as the SSA is required to evaluate payee suitability in such cases. Dft's MTD, Exh. 2 (Doc. 4-2 at pgs. 1-4), Exh. 3 (Doc. 4-3 at pg. 2). A claims specialist in the SSA's Peru, Illinois field office reached out to the Plaintiff to evaluate his suitability to continue as his son's payee. Dft's MTD, Exh. 3 (Doc. 4-3 at pg. 2). As part of the process, the claims specialist wanted to speak with the Plaintiff's son and the Plaintiff's ex-wife. Id. The Plaintiff did not initially cooperate in providing contact information for his son and ex-wife, which led to the son's benefits remaining suspended pending the outcome of the suitability determination. Id. Eventually, the Plaintiff called the Peru, Illinois SSA field office with his son who provided a contact number for his mother. Id. A SSA claims specialist contacted the mother and discovered that the mother was the full-time custodial parent and both mother and son had orders of protection which prohibited the Plaintiff from contacting them. Id. Benefits for the son were re-instated with his custodial mother as representative payee. Id. at pg. 3.
Identified as the “United States of America” in its Motion to Dismiss. See Del Raine v. Carlson, 826 F.2d 698, 703 (7th Cir. 1987) (explaining a suit against federal officers in their official capacity is a suit against the United States).
“An individual who is currently incarcerated is not in a position to serve as payee and should be replaced. A recent past period of incarceration is an indicator that a continued payee suitability investigation may be warranted.” Social Security Program Operations Manual System (POMS) GN 00504.103A., https://secure.ssa.gov/poms.nsf/lnx/0200504103 (last visited Sept. 26, 2023).
B
The Defendant understands the Plaintiff's claim to be that the latter has been harmed by having his status as representative payee for his son revoked. The Defendant thus argues that the Plaintiff has no legal right to bring a cause of action contesting his removal as his son's representative payee and thus, in turn, argues the Court lacks jurisdiction over the Plaintiff's claim. The Plaintiff does not dispute the Defendant's understanding, and the Plaintiff's arguments in response to the Motion to Dismiss make clear he indeed challenges the revocation of his status as representative payee for his son. Among other things, the Plaintiff argues that he was wrongfully arrested, he was in jail for approximately one hour, he tried to call the SSA numerous times and left messages, he does “quite well” with budgeting, his ex-wife is terrible with money, his ex-wife violated their court ordered custody papers many times, and the SSA never spoke with him about his arrest and acted on false information. Plf's Resp. (Doc. 10).
Initial determinations that are subject to administrative and judicial review include the determination that payment of Social Security benefits will be made on the beneficiary's behalf to a representative payee (here, the beneficiary is the Plaintiff's son) as well as the determination of who will act as the beneficiary's payee if the SSA determines that representative payment will be made. 20 C.F.R. § 404.902(o), (q); 20 C.F.R. § 416.1402(d). However, administrative actions that are not “initial determinations” and thus not subject to the administrative review process nor subject to judicial review include “[d]enying a request to be made a representative payee.” 20 C.F.R. § 404.903(c); 20 C.F.R. § 416.1403(a)(3).
A court within this circuit stated it plainly: “Neither the Social Security Act nor the regulations promulgated by the Commissioner authorize judicial review of representative-payee determinations, as these are discretionary decisions of the Commissioner.” Jackson v. U.S., No. 07 CV 7216, 2008 WL 4089540, at *4 (N.D. Ill. Aug. 21, 2008) (citing 20 C.F.R. § 404.2050 and 20 C.F.R. § 416.650 which state the discretionary grounds for revoking one's status as a representative payee and citing Sections 404.903 and 416.1403). The Jackson court continued:
Administrative and judicial review of representative payee decisions are only available to beneficiaries who are dissatisfied with the Commissioner's decision, 42 U.S.C. § § 405(j)(1)(E)(i), 1383(a)(2)(xi); 20 C.F.R. § § 404.2030(b), 416.630(b). By analogy, the revocation of certification as a representative payee is also a non-reviewable
discretionary decision because the regulation provides that the list of non-reviewable actions “include[s], but [is] not limited to,” the stated actions. 20 C.F.R. § § 404.903, 416.1403.Id.
Courts elsewhere are in agreement with the Jackson court. See Hunter v. Saul, No. 19-cv-1021, 2020 WL 4275562, at *3 (M.D. Fla. July 8, 2020), R&R adopted by 2020 WL 4261188 (M.D. Fla. July 24, 2020) (“The applicable federal regulation and case law make clear that Hunter cannot challenge the SSA's decision to remove her as payee. Nor can she challenge the SSA's decision to make Sykes payee. Only [the individual awarded benefits] can obtain administrative and judicial review of the decision regarding who will be her payee”); Shipman v. Colvin, No. 13-03929, 2015 WL 4548740, at *4 (D. Md. July 27, 2015) (finding the Commissioner's determination, construed as a denial of a request to be made a representative payee under Section 416.1403(a)(3), was “thus not an ‘initial determination' and is not subject to administrative or judicial review”); and Graves v. Soc. Sec. Admin., No. 12-1208, 2013 WL 4499123, at *2 (W.D. Tenn. Aug. 20, 2013) (explaining the SSA's regulations define “final decision” as “an initial determination that has been pursued through the complete administrative process and which is then subject to judicial review,” whereas “the denial of a request to be made a representative payee is not an initial determination and is not subject to judicial review” and thus the court did not have subject matter jurisdiction where the plaintiff challenged the SSA's decision to deny his request to be a representative payee for his minor child and to reimburse him for back benefits).
The Court finds the reasoning in Jackson, echoed by district courts outside the Seventh Circuit, persuasive and therefore concludes that this Court lacks subject matter jurisdiction over the Plaintiff's claim in this case. See Jackson, 2008 WL 4089540, at *6 (ultimately concluding that there was “no reason to depart from the regulatory scheme set out by Congress and the SSA: federal courts lack subject-matter jurisdiction over representative-payee determinations”).
III
For the reasons stated above, the undersigned recommends that the Defendant's Combined Motion to Dismiss and Memorandum in Support Thereof (Doc. 4) be GRANTED and this case be dismissed with prejudice.
The parties are advised that any objection to this Report and Recommendation must be filed in writing with the Clerk within fourteen (14) days after service of this Report and Recommendation. FED. R. CIV. P. 72(b)(2); 28 U.S.C. § 636(b)(1). Failure to object will constitute a waiver of objections on appeal. Johnson v. Zema Systems Corp., 170 F.3d 734, 739 (7th Cir. 1999); Lorentzen v. Anderson Pest Control, 64 F.3d 327, 330 (7th Cir. 1995).
It is so recommended.