Ferris v. Comm'r of Soc. Sec.
| Decision Date | 08 September 2020 |
| Docket Number | CIVIL ACTION NO. 3:18-CV-00769-RSE |
| Parties | MARK FERRIS PLAINTIFF v. COMMISSIONER OF SOCIAL SECURITY Andrew Saul DEFENDANT |
| Court | U.S. District Court — Western District of Kentucky |
Plaintiff, Mark Ferris ("Ferris"), seeks judicial review under 42 U.S.C. § 405(g) of a final adverse decision by Defendant, Commissioner of Social Security ("Commissioner"), to reduce the amount of his retirement insurance benefit in accordance with Section 215 of the Social Security Act, otherwise known as the "Windfall Elimination Provision." See generally (DN 1); see also (DN 20). Both Ferris (DN 20-2) and the Commissioner (DN 23) filed a Fact and Law Summary. Fully briefed, this matter is ripe for adjudication.
Pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73, the parties voluntarily consented to the undersigned United States Magistrate Judge conducting all further proceedings in this case, including issuance of a memorandum opinion and entry of judgment, with direct review by the Sixth Circuit Court of Appeals in the event an appeal is filed. (DN 18). For the reasons set forth herein, the final decision of the Commissioner is AFFIRMED, and Ferris' Motion for Summary Judgment (DN 20) is DENIED.
Ferris was employed as a dual status technician with the Kentucky Air National Guard from March 2, 1975 until April 12, 2007. Tr. 76. As a dual status technician, Ferris was required to retain membership in the National Guard. Id. If Ferris separated from the National Guard, he would have lost his position as a dual status technician. Id. Ferris served as a member in the National Guard from 1978 to 2007. Tr. 28.
Congress created the position of dual status technician under the National Guard Technician Act of 1968. Pub. L. No. 90-486, § 2(1), 82 Stat. 755, 755-56 (codified at 32 U.S.C. § 709). By statute, a National Guard dual status technician "is a Federal civilian employee" who "is assigned to a civilian position as a technician" while maintaining membership in the National Guard. 10 U.S.C. § 10216(a)(1); see also 32 U.S.C. § 709(e) (). These technicians are responsible for "the organizing, administering, instructing, or training of the National Guard" or "the maintenance and repair of supplies issued to the National Guard or the armed forces." 32 U.S.C. § 709(a)(1)-(2); accord 10 U.S.C. § 10216(a)(1)(C). The job also requires that dual status technicians satisfy various military-service requirements, including participating in inactive-duty training, wearing a uniform, complying with military standards of conduct, meeting physical requirements, and they must be available for active deployment. See Perpich v. Department of Defense, 496 U.S. 334, 348 (1990) ().
Dual status technicians hired before 1984 do not pay Social Security taxes on wages they earn as a dual status technician. See Petersen v. Astrue, 633 F.3d 633, 634 (8th Cir. 2011). Additionally, dual status technicians hired before 1984 qualify for a civil service pension under the Civil Service Retirement System ("CSRS"). Id. The CSRS pension is based upon civil service wages that were exempt from Social Security taxes. Id.
In June 2008, Ferris started receiving a pension from the Office of Personnel Management ("OPM") under the CSRS. Tr. 32; see also (DN 20-1 at p. 5). He also receives another pension from the Defense Financing and Accounting Service related to his National Guard membership. (Id.).
In August 2014, Ferris applied for and subsequently received retirement insurance benefits under Title II of the Social Security Act. Tr. 15-17. In January 2015, however, after learning from the OPM that Ferris was also receiving a pension under the CSRS, the Commissioner recalculated Ferris' benefit payment applying the "Windfall Elimination Provision" ("WEP"). Tr. 20-21. The Commissioner determined that Ferris was overpaid $1,547.00 prior to its knowledge of his Civil Service annuity, and Ferris' monthly Social Security retirement benefit payment was reduced from $820.00 to $468.90. Tr. 17, 24-25.
Ferris filed a Request for Reconsideration on April 8, 2015. Tr. 29-30. On April 27, 2015, the Commissioner denied Ferris' request and affirmed its initial determination to apply the WEP to his benefit calculation. Tr. 31-33. Ferris then requested a hearing before an Administrative Law Judge ("ALJ"). Tr. 34. ALJ Daniel A. Traver conducted a hearing on September 19, 2016. Tr. 92-104. On January 31, 2017, the ALJ issued a decision upholding the Commissioner's calculation and declining to apply the uniformed services exception to the WEP. Tr. 12-14. In his decision,the ALJ concluded that he could not grant Ferris the relief he sought because the ALJ was bound by AR 12-1(8), and Ferris did not qualify for an exception to the WEP under that ruling because he resided in Kentucky, outside the Eighth Circuit. Tr. 14.
Ferris requested the Appeals Council review the ALJ's decision. Tr. 7-8. On September 28, 2018, the Appeals Council denied Ferris' request to review the ALJ decision, making the ALJ decision the final decision of the Commissioner subject to judicial review under 42 U.S.C. § 405(g). Tr. 3.
On November 20, 2018, Ferris filed his Complaint and initiated the instant action for judicial review. (DN 1). The Commissioner subsequently filed its Fact and Law Summary, (DN 23), as well as a Motion to hold this case in abeyance and stay all proceedings pending the Sixth Circuit's decision in David Babcock v. Commissioner of Social Security, Case No. 19-1687. See (DN 24). In support of its Motion, the Commissioner explained that the issue in Babcock, whether Plaintiff-Appellant's service as a dual status military technician constitutes "service as a member of a uniformed service" for purposes of the Windfall Elimination Provision Exception in 42 U.S.C. §415, was akin to Ferris' claim to the extent that the forthcoming decision in Babcock could effectively decide the merits of this case. (Id.); see also ECF No. 8 ("Civil Appeal Statement of Parties and Issues"), Babcock v. Commissioner of Social Security, Case No. 19-1687 (6th Cir.). Because the Sixth Circuit's decision in Babcock had the potential to be completely dispositive of this action, the undersigned determined that judicial economy favored a limited delay in awaiting the Babcock decision. (DN 26). The Court stayed this matter pending a written opinion on the merits in Babcock v. Commissioner of Social Security, Case No. 19-1687.
On May 11, 2020, the Sixth Circuit issued an opinion in Babcock. Babcock v. Soc. Sec. Comm'r, 959 F.3d 210 (6th Cir. 2020). The Sixth Circuit affirmed the decision from the WesternDistrict of Michigan, and held that retirement benefits associated with work as a dual status technician for the National Guard did not constitute "payment based wholly on service as a member of a uniformed service." Id. It held "that the uniformed services exception does not apply to Babcock's CSRS pension," and thus his CSRS pension payment was subject to the Windfall Elimination Provision. Id.
The "Windfall Elimination Provision" ("WEP") reduces the benefits received by certain individuals who also receive pensions for work that did not require them to pay social security taxes. See 42 U.S.C. § 415(a)(7); Petersen, 633 F.3d at 634. "'The WEP was enacted in 1983 to eliminate the unintended benefits windfall that occurs when workers who split their career between covered employment (required to pay Social Security taxes) and non-covered employment (exempt from Social Security taxes).'" Parker v. Colvin, 640 Fed. App'x 726, 728 (10th Cir. 2016) (quoting Petersen, 633 F.3d at 634); see also Holmes v. Commissioner, No. 96-4088, 1997 WL 570398, at *2 (6th Cir. Sept. 11, 1997) ().
The WEP directed the Social Security Administration to apply a modified formula for determining an individual's Social Security retirement benefit, when the individual received a pension based upon non-covered employment. 42 U.S.C. § 415(a)(7)(A). The modified formula would operate to reduce the Social Security retirement benefit of a person who received a pension based upon non-covered employment. 42 U.S.C. § 415(a)(7)(B).
There are several exceptions to the WEP. One such exception, the uniformed services exception set forth at 42 U.S.C. § 415(a)(7)(A)(III), is relevant here. The uniformed services exception states that pension payments derived from non-covered employment are not subject to the WEP if the payments are "based wholly on service as a member of a uniformed service (as defined in [42 U.S.C. § 410(m)])." 42 U.S.C. § 415(a)(7)(A)(III). Section 410(m) provides that a "[m]ember of a uniformed service" includes, among others, "any person appointed, enlisted, or inducted in a component of the . . . Army . . . (including a reserve component as defined in [38 U.S.C. § 101(27)])." And "reserve component" is defined to include the "Army National Guard of the United States." 38 U.S.C. § 101(27)(F).
The function of this court is to determine whether the Commissioner's final decision is supported by substantial evidence and...
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