Belles v. Schweiker

• Decision Date: 04 November 1983
• Docket Number: No. 82-2194,82-2194
• Citation: 720 F.2d 509
• Parties: Rachel BELLES, Individually and on behalf of all others similarly situated, Appellant, v. Richard SCHWEIKER, Individually and in his capacity as Secretary, Department of Health and Human Services, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 509

720 F.2d 509

3 Soc.Sec.Rep.Ser. 176

Rachel BELLES, Individually and on behalf of all others similarly situated, Appellant, v. Richard SCHWEIKER, Individually and in his capacity as Secretary, Department of Health and Human Services, Appellee.

No. 82-2194.

United States Court of Appeals,

Eighth Circuit.

Submitted May 20, 1983.

Decided Nov. 4, 1983.

Martin Ozga, Legal Services Corp. of Iowa, Des Moines, Iowa, for appellant.

Richard C. Turner, U.S. Atty., Robert C. Dopf, Asst. U.S. Atty., S.D. Iowa, Des Moines, Iowa, for appellee; Paul P. Cacioppo, Regional Atty., Kenneth J. Cain, Atty., Dept. of Health and Human Services, Kansas City, Mo., of counsel.

Before ROSS, ARNOLD and JOHN R. GIBSON, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Rachel Belles brought this class action against the Secretary of the Department of Health and Human Services claiming that she was denied notice and hearing of alleged Title II overpayments, an opportunity to contest the overpayments or to request waiver of the overpayments, and an opportunity for a recoupment hearing. Her claim arises from the electronic deposit of funds in her account in the amount of $1,205.40 after her husband's death. The district court denied certification of a class, and held that plaintiff's claim was moot. Belles claims that the court erred in so holding. The Secretary argues that the district court lacked subject matter jurisdiction over the action. We conclude that the court had jurisdiction, that the action was not moot, and remand to the district court for further proceedings.

The facts are not in dispute and are succinctly set forth in the district court's order:

Plaintiff is a 75-year-old recipient of social security widow's benefits and social security retirement benefits. Prior to his death, plaintiff's husband was receiving social security disability benefits deposited directly in his and plaintiff's joint checking account with the Jasper County Savings Bank by means of an electronic funds transfer (EFT). Plaintiff's husband died on April 24, 1972, and plaintiff notified the Social Security Administration of his death and began receiving widow's benefits. The Department of Treasury, however, continued to make credit payments in his name for benefits to the Jasper County Savings Bank. The bank correctly returned the erroneous payments for April 1979 through July 1979. However, the bank failed to return the erroneous payments for August 1979 through October 1979, crediting plaintiff's account for these payments in the amount of $1,205.40.

On December 2, 1980, the Social Security Administration, having discovered the erroneous payments, requested the Department of Treasury to stop payment for August, September and October 1979.

On December 5, 1980, the Jasper County Savings Bank sent a letter to plaintiff informing her that it had received a letter requesting remittance of the erroneously made payments. On December 22, 1980, plaintiff requested a waiver of the overpayment with the Social Security Administration.

On December 29, 1980, the Des Moines, Iowa, Social Security Administration District Office wrote the Social Security Administration Program Service Center in Philadelphia, Pennsylvania (hereinafter the Service Center), requesting information on the status of the waiver. Robert A. Gross, Jr., Acting Director of Operations, responded on January 19, 1981, stating:

In accordance with [Claims Manual] 5500.3, incorrect EFT payment are not subject to section 204 and waiver or reconsideration provisions do not apply. [Plaintiff] will soon be advised of subsequent adjustment to recover the incorrect EFT payment of $1205.40 which represents check issued to the [plaintiff's husband] after his death for 8/79, 9/79 & 10/79.

Plaintiff was notified of the benefit reduction on February 11, 1981, and her March through June, 1981, widow's and retirement benefit checks were reduced $118.00 each month.

Plaintiff filed this action on June 18, 1981.

On July 25, 1981, and on August 6, 1981, the Service Center wrote plaintiff stating that a check for $472.00 would be mailed to her as a refund of the amounts previously withheld from her benefits. Belles received a refund of the withheld amounts on August 9, 1981.

I.

The Secretary argues that the district court had no subject matter jurisdiction to hear this case. The district court, based on Ellis v. Blum, 643 F.2d 68, 78-82 (2d Cir.1981), held that it had subject matter jurisdiction over plaintiff's complaint under 28 U.S.C. Sec. 1361 and Belles argues that the district court correctly so held. We agree.

In Ellis the plaintiff sued the Secretary of the United States Department of Health, Education & Welfare, among others, for termination or threatening to terminate disability benefits without prior adequate written notice. The plaintiff contended that the defendant's inadequate pretermination notice violated the due process clauses of the Fifth and Fourteenth Amendments and the Social Security Act. The Ellis court held that the district court had jurisdiction over the Secretary under 28 U.S.C. Sec. 1361. ¹

As was contended by the defendants in Ellis, the Secretary argues that Sec. 205(h) of the Social Security Act, 42 U.S.C. Sec. 405(h), precludes assertion of Sec. 1361 jurisdiction. According to the Secretary, Sec. 205(g) of the Social Security Act, 42 U.S.C. Sec. 405(g), is the exclusive jurisdictional basis for suit under the Social Security Act, and Belles did not meet the jurisdictional prerequisites to suit set forth therein. ² In support of his argument, the Secretary relies primarily on the United States Supreme Court decision in Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). Neither Salfi nor the other Supreme Court cases cited by the Secretary, Califano v. Sanders, 430 U.S. 99, 109, 97 S.Ct. 980, 986, 51 L.Ed.2d 192 (1977), and Mathews v. Eldridge, 424 U.S. 319, 327, 96 S.Ct. 893, 899, 47 L.Ed.2d 18 (1976), are controlling in this case. In all of these cases the Supreme Court left open the question of whether Sec. 1361 jurisdiction was available. Dockstader v. Schweiker, 719 F.2d 327 at 329 (10th Cir.1983).

In Salfi the Supreme Court interpreted Sec. 405(h) to require that claims for benefits be asserted only through 42 U.S.C. Sec. 405(g). 422 U.S. at 756-57, 95 S.Ct. at 2462-2463. Belles' claims in this case are similar to those in Ellis, supra, inasmuch as they raise essentially a procedural challenge, a right to the protections of 42 U.S.C. Sec. 404(b) as interpreted in Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). A decision favorable to Belles would not entitle her to benefits, but would instead give her a right to notice and a prerecoupment hearing. Accordingly, Sec. 405(h) ³ is not controlling. See Dockstader, supra, 719 F.2d at 329-330; Dietsch v. Schweiker, 700 F.2d 865, 868 (2d Cir.1983); Elliott v. Weinberger, 564 F.2d 1219, 1226 (2d Cir.1977), rev'd in part on other grounds sub nom. Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979); Ryan v. Shea, 525 F.2d 268, 272 (10th Cir.1975).

The Secretary argues, however, that 42 U.S.C. Sec. 405(h) precludes judicial review of any matter arising under the Social Security Act. But in Salfi the Supreme Court indicated that the proper interpretation of statutes limiting judicial review of agency actions is a strict one, excluding only those matters expressly addressed by the statute. 422 U.S. at 761-762, 95 S.Ct. at 2464-2465; see Elliott, supra, 564 F.2d at 1227 n. 11. While the language of Sec. 405(h) precludes judicial action "to recover on any claim arising under this subchapter," it does not address the question of due process. Unless the question sought to be litigated is within the express language of the limiting statute, there is no basis for concluding that Congress sought to limit or preclude judicial review. ⁴ We conclude, therefore, that in cases like the present one, which involve claims essentially procedural in nature, Sec. 405(h) presents no obstacle to mandamus jurisdiction.

As this court held in St. Louis University v. Blue Cross Hospital Service, 537 F.2d 283 (8th Cir.1976), cert. denied sub nom. Faith Hospital Assoc. v. Blue Cross Hospital Service, Inc., 429 U.S. 977, 97 S.Ct. 484, 50 L.Ed.2d 584 (1976), even Sec. 1331 jurisdiction is not precluded by Sec. 405(h) where the claim involved is procedural. ⁵ In distinguishing Salfi and holding that Sec. 405(h) did not preclude jurisdiction under Sec. 1331, we observed that the appellant's due process claim would not affect the substantive question of entitlement to benefits. St. Louis University, supra, 537 F.2d at 292.

It is also argued that mandamus jurisdiction is improper in this case because the defendant has no clear duty to act under 42 U.S.C. Sec. 404(b). However, determining whether the defendant has a duty under 42 U.S.C. Sec. 404(b) would entail an analysis of the merits of appellant's whole case.

In resolving whether mandamus jurisdiction is available, the "allegations of the complaint, unless patently frivolous, are taken as true to avoid tackling the merits under the ruse of assessing jurisdiction." Carpet, Linoleum & Resilient Tile v. Brown, 656 F.2d 564, 567 (10th Cir.1981); Jones v. Alexander, 609 F.2d 778, 781 (5th Cir.1980), cert. denied, 449 U.S. 832, 101 S.Ct. 100, 66 L.Ed.2d 37 (1980); see also Howard v. Hodgson, 490 F.2d 1194, 1195 (8th Cir.1974). Belles alleges that she is entitled to certain rights under 42 U.S.C. Sec. 404(b) and that the Secretary has a clear duty to apply the provisions of 42 U.S.C. Sec. 404(b) to her. Taking Belles' allegations at face value, we conclude that the trial court was correct in finding that it had jurisdiction under Sec. 1361. ⁶

II.

The district court, relying on Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982), held that...