Dockstader v. Miller

• Decision Date: 07 October 1983
• Docket Number: No. 82-1199,82-1199
• Citation: 719 F.2d 327
• Parties: Mahala DOCKSTADER, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. G. William MILLER, Secretary of the United States Department of the Treasury; the United States Department of the Treasury; Richard S. Schweiker, Secretary of the United States Department of Health and Human Services; and the United States Department of Health and Human Services, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 327

719 F.2d 327

3 Soc.Sec.Rep.Ser. 132

Mahala DOCKSTADER, on behalf of herself and all others similarly situated, Plaintiff-Appellant, v. G. William MILLER, Secretary of the United States Department of the Treasury; the United States Department of the Treasury; Richard S. Schweiker, Secretary of the United States Department of Health and Human Services; and the United States Department of Health and Human Services Defendants-Appellees.

No. 82-1199.

United States Court of Appeals Tenth Circuit.

Oct. 7, 1983.

Rehearing Denied Nov. 14, 1983.

Lucy Billings, Community Action for Legal Services, Inc., New York City (Eileen P. Sweeney, Nat. Senior Citizens Law Center, Washington, D.C., and Alfred J. Chiplin, Jr., Nat. Senior Citizens Law Center, Los Angeles, Cal., with her on brief), for plaintiff-appellant.

Gabriel Depass, Dept. of Health and Human Services, Baltimore, Md. (Kenneth Schmalzback, Dept. of Treasury, J. Paul McGrath, Asst. Atty. Gen., Robert S. Greenspan, Dept. of Justice, Washington, D.C., Brent D. Ward, U.S. Atty., Laurence J. Leigh, Asst. U.S. Atty., Salt Lake City, Utah, Randolph W. Gaines, Deputy Asst. Gen. Counsel, for Litigation, and A. George Lowe, Dept. of Health and Human Services, Baltimore, Md., with him on brief), for defendants-appellees.

Before BARRETT, McKAY and LOGAN, Circuit Judges.

BARRETT, Circuit Judge.

Mahala Dockstader, on behalf of herself and all those similarly situated, brought this class action challenging the procedures by which the Social Security Administration (SSA) and the Department of the Treasury (Treasury) reclaimed certain erroneously paid social security benefits. The district court granted summary judgment in favor of SSA and Treasury and Mrs. Dockstader brought this appeal.

In 1968, Mahala Dockstader filed for and was found to be entitled to social security old-age insurance benefits. In 1972, her husband, Lawrence Dockstader, filed for and began receiving social security old-age insurance benefits. Both Mahala and Lawrence continued to receive their separate benefits through June of 1976. In April of 1976, Lawrence and Mahala entered into an agreement with the Walker Bank and Trust Company of Salt Lake City, Utah. The agreement provided that the net amount of their individual monthly social security benefits would be deposited directly into their joint account with the Walker Bank. ¹ The reverse side of the agreement, Treasury Authorization Form 1199, provided that the agreement would be canceled upon the death of any payee or beneficiary of the payments. The agreement was in effect and the Dockstaders were receiving their payments by direct deposit into their joint account in June of 1976.

On June 25, 1976, Lawrence Dockstader died. On June 30, Mahala notified the SSA of Lawrence's death and filed an application for widow's benefits. In August of 1976, Mahala transferred ownership of her bank account to herself and her son. On October 14, 1976, SSA notified Mahala that she was entitled to combined widow's and retirement insurance benefits. On February 8, 1977, SSA first made an entry of termination of Lawrence's retirement benefits by reason of his death. It is unknown why no entry was made until this time, but because of the delay, SSA continued to certify payments to Lawrence through February of 1977. The Walker Bank continued to credit the erroneously certified payments to Mahala's account, even after she transferred ownership of the account.

On May 26, 1977, SSA forwarded a standard form to Treasury, requesting it to reclaim the erroneously certified benefits. Pursuant to 31 C.F.R. parts 209, 210, and 240, Treasury contacted Walker Bank and requested a refund of $1675.10 in erroneous payments. Walker Bank returned to Treasury $1,435.80, and at the same time debited the account belonging to Mahala and her son. SSA and Treasury did not give Mahala any notice prior to the time her account was debited, nor was she given the opportunity to request waiver of recovery of the erroneous payments.

Mahala Dockstader commenced this suit on behalf of herself and all other similarly situated persons. ² She never contended that she was entitled to the erroneous payments in the first instance; rather, she argued that the recovery procedures utilized here violated section 204 of the Social Security Act, 42 U.S.C. Sec. 404, and its implementing regulations in 20 C.F.R. part 404, Section 207 of the Social Security Act, 42 U.S.C. Sec. 407, and the Fifth Amendment to the United States Constitution. Mahala asserted that federal jurisdiction existed under 42 U.S.C. Sec. 405(g), 28 U.S.C. Sec. 1331(a), and 28 U.S.C. Sec. 1361. The district court concluded that jurisdiction existed only under 28 U.S.C. Sec. 1361, the mandamus statute. Both parties moved for summary judgment. The court concluded that a mandamus order was improper since SSA and Treasury did not owe Mahala a duty under 42 U.S.C. Sec. 404(a). Accordingly, the court granted their motion for summary judgment. Mahala then filed a motion to alter judgment, claiming that the court had failed to consider her claims under the Fifth Amendment and 42 U.S.C. Sec. 407. The trial court filed a memorandum decision and order in which it addressed Mahala's contentions. Her motion to alter judgment was denied.

On appeal, Mahala contends that: (1) she was entitled to the procedural protections provided by 42 U.S.C. Sec. 404 and its implementing regulations; (2) the regulations and policies of SSA involved it directly in the debiting so that the procedural due process clause of the Fifth Amendment was implicated; and (3) SSA's involvement was sufficient that it violated the nonalienation of social security benefits provision of 42 U.S.C. Sec. 407. The first issue we must consider, however, is whether the district court had jurisdiction to hear this case.

I.

In 42 U.S.C. Sec. 405(h), the Social Security Act provides that 42 U.S.C. Sec. 405(g) establishes the exclusive jurisdictional basis for a suit seeking "to recover on any claim arising under" the Act. The district court, however, based its jurisdiction on the mandamus statute, 28 U.S.C. Sec. 1361. The Supreme Court has yet to determine whether mandamus jurisdiction is appropriate to review SSA procedures. See Califano v. Yamasaki, 442 U.S. 682, 698, 99 S.Ct. 2545, 2556, 61 L.Ed.2d 176 (1979); Norton v. Mathews, 427 U.S. 524, 529-30, 96 S.Ct. 2771, 2774-75, 49 L.Ed.2d 672 (1976); Hadley Memorial Hospital, Inc. v. Schweiker, 689 F.2d 905, 912 (10th Cir.1982). Recently, however, the Supreme Court granted certiorari in a case which presents that issue. Heckler v. Ringer, --- U.S. ----, 103 S.Ct. 3535, 77 L.Ed.2d 1386 (1983). In Ringer, the Ninth Circuit ruled that when the plaintiff is simply asking a court to require SSA to provide procedural safeguards, without addressing any substantive right to benefits, mandamus jurisdiction is proper:

the language [in 42 U.S.C. Sec. 405(h) ] prohibiting reliance on the federal question or mandamus provisions for any action "to recover on a claim arising under" the Act only applied to actual claims for benefits. We noted that "when suit is brought simply to vindicate an interest in procedural regularity, there is no statutory bar."

Ringer v. Schweiker, 697 F.2d 1291, 1293-94 (9th Cir.1982) (quoting Daniel H. Freeman Memorial Hospital v. Schweiker, 656 F.2d 473, 476 (9th Cir.1981)). Accord Powderly v. Schweiker, 704 F.2d 1092, 1095 (9th Cir.1983); Humana of South Carolina, Inc. v. Califano, 590 F.2d 1070, 1080 (D.C.Cir.1978); White v. Mathews, 559 F.2d 852, 856 (2d Cir.1977), cert. denied, 435 U.S. 908, 98 S.Ct. 1458, 55 L.Ed.2d 500 (1978).

We are persuaded by the distinction the Ringer court and other courts have drawn between suits seeking to establish a right to benefits and suits requesting that SSA provide a procedure through which the right to benefits can be contested. Here, Mahala Dockstader has never claimed that she was entitled to the benefits erroneously credited to her bank account; she contends only that she had statutory and constitutional rights to notice and a hearing before the benefits were removed from her account. Accordingly, under the rationale of Ringer, we hold that the district court had mandamus jurisdiction to hear this case.

II.

Mahala argues that under 42 U.S.C. Sec. 404 and its implementing regulations she was entitled to notice and an opportunity to request waiver of recovery of the erroneous payments. The district court rejected that argument on the grounds that sections 404(a) and (b) and their regulations apply only to the named payees of social security benefits. The court concluded that one who converts to his or her own use benefits intended for another person is not entitled to the procedural protections of the statute and regulations, irrespective of the person's good faith. We must determine, therefore, whether the erroneous payments here were "overpayments" within the meaning of sections 404(a) and (b).

The pertinent provisions of the statute state:

(a) Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, as follows:

(1) With respect to payment to a person of more than the correct amount, the Secretary shall decrease any payment under this subchapter to which such overpaid person is entitled, or shall require such overpaid person or his estate to refund the amount in excess of the correct amount, or shall decrease any payment under this subchapter payable to his estate or to any other person on the basis of the wages and self-employment income which were the basis of the payments to such overpaid person, or shall apply any combination of the foregoing.

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(b) In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by...