Moriarty v. Colvin

• Decision Date: 31 December 2014
• Docket Number: Civil Action No. 13–30157–KPN.
• Citation: 76 F.Supp.3d 261
• Parties: Marshall T. MORIARTY, individually and on behalf of all others similarly situated, Plaintiff v. Carolyn W. COLVIN, Commissioner of Social Security, Defendant.
• Court: U.S. District Court — District of Massachusetts

76 F.Supp.3d 261

Marshall T. MORIARTY, individually and on behalf of all others similarly situated, Plaintiff

v.Carolyn W. COLVIN, Commissioner of Social Security, Defendant.

Civil Action No. 13–30157–KPN.

United States District Court, D. Massachusetts.

Signed Dec. 31, 2014.

Richard I. Greenberg, Richard Greenberg, Springfield, MA, for Plaintiff.

Karen L. Goodwin, United States Attorney's Office, Springfield, MA, for Defendant.

MEMORANDUM AND ORDER WITH REGARD TO CROSS–MOTIONS FOR SUMMARY JUDGMENT (Document Nos. 17 and 20)

NEIMAN, United States Magistrate Judge.

Marshall T. Moriarty (“Plaintiff”) brings this action asserting that, as an attorney who represented a successful benefits claimant, he is entitled to an additional attorney's fee by way of mandamus relief pursuant to 28 U.S.C. §§ 1331 and 1361. In short, Plaintiff maintains that since June 1, 2012, the defendant Commissioner of the Social Security Administration (“Commissioner”) does not—but is required to—include the Massachusetts state supplement when calculating attorneys' fees in Supplemental Security Income (“SSI”) benefits cases. As might be expected, the Commissioner disagrees. The parties, however, have agreed to consent to the jurisdiction of this court. See 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73.

Presently, the parties cross-move for summary judgment, with Plaintiff arguing that the statute is unambiguous and should be resolved in his favor, while the Commissioner contends that the court ought to defer to her interpretation of the governing statute. For the following reasons, the court will allow the Commissioner's motion and, in doing so, deny Plaintiff's motion for summary judgment.

I. Background

A. State Benefits Under The SSI Program

The Social Security Administration (“SSA”) administers two comprehensive disability programs: SSI and Social Security Disability Insurance (“SSDI”). The SSDI program arose out of the 1935 Social Security Act and provides benefits to insured disabled individuals regardless of financial need. See 42 U.S.C. §§ 403, 423. The SSI program, in contrast, came into effect in 1974, heralding the first occasion on which the federal government administered disability benefits to uninsured needy individuals by combining a patchwork of programs which had been administered on the state level and jointly funded by the state and federal government, viz., Old–Age Assistance, Aid to the Blind, and Aid to the Permanently and Totally Disabled. See Constance v. Secretary of Health and Human Servs., 672 F.2d 990, 991 (1st Cir.1982) (discussing background of SSI program).

Since the states' treatment of these adult categories of welfare benefits had not been uniform, Congress provided a mechanism within the SSI amendments which permitted states to supplement the federal benefit as they saw fit to “reflect the varying costs of living.” Bouchard v. Secretary of Health and Human Servs., 583 F.Supp. 944, 947 (D.Mass.1984). Many states have taken advantage of this so-called optional state supplementation, although others have been satisfied with the federal benefit alone.¹ See Sue C. Hawkins, “SSI: Characteristics of Persons Receiving Federally Administered State Supplementation Only,” 46 Soc. Sec. Bul. 4, 3 (April 1983).

Congress also preferred that states agree to the federal administration of their supplemental benefits, reasoning that to do so would “avoid unnecessary duplication of administrative costs, would permit the states to take advantage of improved methods and procedures ... and would tend to foster national uniformity in the operation of assistance programs.” Bouchard, 583 F.Supp. at 947 (quoting H.R.Rep. No. 92–231, 92d Cong.2d Sess., reprinted in 1972 U.S.C.C.A.N. 4989, 5185). To that end, Congress offered states the option of low-cost administration of state benefits in exchange for a state's agreement that its supplement would be “subject to any rules, regulations and provisions which the Secretary found necessary to achieve the efficient and effective administration of both programs.” Id. at 947 (citing 42 U.S.C. § 1382e(b)(2) ); see also H.R.Rep. 92–231, at 5187 (“By entering into agreements of their supplemental payments, States will be losing all administrative control over the operation of those benefits.”).

States that administer their own supplements, in contrast, need only comply with 42 U.S.C. § 1382e(e), which requires them to (1) enforce standards in nursing and group homes where a significant number of SSI recipients reside; (2) provide such information to the public on a yearly basis; (3) certify compliance with these requirements with the Commissioner; and (4) reduce supplementary payments to institutions that do not meet the standards. See also 20 C.F.R. § 416.2005(c) (“If the State chooses to administer such payment itself, it may establish its own criteria for determining eligibility requirements as well as the amounts.”). Again, some states initially opted for federal administration, while others chose to administer their own benefits, if any. See Hawkins at 4. In April of 2012, Massachusetts, which had previously opted to have its state supplements federally administered, switched those supplements to state administration. As will be seen, that switch came in the midst of the retroactive award period for Plaintiff's client.

B. Attorneys' Fees Under the SSI Program

As initially enacted in 1974, the SSI program did not provide for the direct payment of fees to attorneys who successfully represented claimants. See Bowen v. Galbreath, 485 U.S. 74, 79, 108 S.Ct. 892, 99 L.Ed.2d 68 (1988) ; H.R. 92–231 (1971) (withholding fees from past-due benefits due claimants “would be contrary to the purpose of the program”). In contrast, the SSDI program had authorized attorney fee withholding as of 1965 for successful court adjudications and, as of 1968, for successful administrative appeals. See Pub.L. No. 89–97, § 332, 79 Stat. 286, 403 (1965); P.L. 90–248, § 173, 81 Stat. 821, 877 (1967). This administrative withholding was facilitated by an amendment to 42 U.S.C. § 406(a) which required the Commissioner to fix a twenty-five percent fee (subject to a cap) and to certify that amount for payment out of retroactive benefits otherwise due a prevailing claimant.

Although Congress initially incorporated “almost every other provision of § 406 ” into the SSI program, it left out the provisions which authorized “judicial withholding and administrative withholding.” Bowen, 485 U.S. at 77, 108 S.Ct. 892. “The Secretary could set maximum fees for representation before the agency, but there was no provision for payment directly to the attorney.” Reid v. Heckler, 735 F.2d 757, 761 (3rd Cir.1984), abrogated on other grounds by Bowen v. Galbreath, 485 U.S. 74, 108 S.Ct. 892, 99 L.Ed.2d 68 (1988).

These policies remained in effect until 2004 when Congress authorized fee withholding and direct payment to prevailing attorneys in SSI cases as well. See Social Security Protection Act of 2004, Pub. L. No. 108–203 § 302, 118 Stat. 494, 519–21 (“SSPA”) (made permanent in the Social Security Disability Applicants' Access to Professional Representation Act of 2010, Pub. L. No. 111–142, 124 Stat. 38 –40). In pertinent part, the SSPA incorporated the remaining provisions of section 406 into the SSI program and, in addition, inserted a new subparagraph B into 42 U.S.C. § 1383(d)(2)(B), which provided that the Commissioner “shall pay [in essence, 25 percent] out of such past-due benefits to [a prevailing] attorney.” P.L. 108–203, § 302, 118 Stat. 494, 520. The purpose of the SSPA, in effect, was to incentivize attorneys by way of direct payment rather than provide them the maximum amount of fees. See H.R.Rep. 108–46, 108th Cong., 1st Sess., at 43 (2003), 2004 U.S.C.C.A.N. 472, 494 (purpose of attorney fee withholding change in the SSPA is to guarantee payment so that “more attorneys would be willing to represent claimants”); Detson v. Schweiker, 788 F.2d 372, 376 (6th Cir.1986) (“[T]he primary financial incentive provided by [42 U.S.C.] § 406 is not the amount of attorney's fees but is the direct payment of fees.... [T]his financial incentive is unaffected by the Secretary's method of calculating the withholding amount.”) (citing Burnett v. Heckler, 756 F.2d 621, 626 (8th Cir.1985) ).

When making these changes, Congress did not specify whether and to what extent state supplements were to be included as “past-due benefits.” The Commissioner, however, has interpreted “past-due benefits” to “includ[e] any Federally administered State payments” but to exclude state-administered payments. 20 C.F.R. § 416.1503 ; see also Program Operations Manual System (“POMS”) GN 03920.031(B)(1), 2005 WL 724563 (July 17, 2012) (past-due benefits include “the total amount of Federal and Federally administered State payments”). Consequently, in claims arising in supplementing states, the SSA pays prevailing attorneys more of the total SSI retroactive award when it administers the state supplement than it pays when the state itself administers that supplement. For example, if a claimant's retroactive SSI award of $20,000 was comprised of $18,000 in federal funds and $2,000 in state supplemental funds, counsel for the claimant would be due $5,000 (25% of the total) if the state supplement was administered federally, but only $4,500 if the state supplement was administered by the state; that $4,500 would represent 25% of the federally administered $18,000 only, even though the claimant would also be receiving $2,000 in retroactive state supplements. That difference is the nub of the issue presently before the court.

C. Facts of this Case

On May 6, 2013, Plaintiff, an attorney who had represented Fernando Cantres (“Cantres”) in a partially favorable SSI adjudication, received a fee award of $4,079.26, which amount was twenty-five percent of Cantres's past-due federal and federally-administered state supplemental benefits (less an administrative charge unrelated to the legal issues at...