Haire v. Saul

• Decision Date: 13 August 2020
• Docket Number: CIVIL ACTION NO. 4:19-CV-00096-HBB
• Parties: LEWIS REID HAIRE PLAINTIFF v. ANDREW SAUL, COMMISSIONER SOCIAL SECURITY ADMINISTRATION DEFENDANT
• Court: U.S. District Court — Western District of Kentucky

LEWIS REID HAIRE PLAINTIFF v. ANDREW SAUL, COMMISSIONER SOCIAL SECURITY ADMINISTRATION DEFENDANT

CIVIL ACTION NO. 4:19-CV-00096-HBB

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY OWENSBORO DIVISION

August 13, 2020

MEMORANDUM OPINION AND ORDER

Plaintiff Lewis Reid Haire filed a complaint seeking judicial review of the final decision of Defendant Andrew Saul, Commissioner of the Social Security Administration (DN 1). The Commissioner moved to dismiss Haire's Complaint pursuant to Fed. R. Civ. P. 12(b)(1) for lack subject matter jurisdiction under 42 U.S.C. § 405(g) (DN 12). Haire filed a memorandum in response (DN 21). The Commissioner filed a reply memorandum (DN 22). For the reasons that follow, the Commissioner's Motion to Dismiss (DN 12) is GRANTED and the Complaint is DISMISSED.

Pursuant to 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73, the parties have 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 23).

BACKGROUND

On February 22, 2016, Haire filed an application for Old-Age (Retirement) Insurance Benefits (RIB) under Title II of the Social Security Act (DN 14-1 PageID # 54).¹ In a March 3, 2016 Notice of Award, the Social Security Administration ("Agency") determined that Haire was entitled to monthly RIB beginning August 2015 (Id.). The Notice of Award failed to mention that the Windfall Elimination Provision (WEP) applied to Haire's benefits (Id. PageID # 54, 60-62). But the rates provided in the Notice of Award reflected the reduction based on WEP (Id.).

On April 15, 2016, Haire filed a request for reconsideration contesting the Agency's application of WEP to offset his RIB monthly payments based on his receipt of a federal government pension awarded under the Civil Service Retirement System (CSRS) (Id. PageID # 55, 64). Haire explained that a judge assigned the entire CSRS pension to his ex-spouse as alimony in the dissolution of their marriage (Id.).

On May 31, 2016, the Agency dismissed Haire's request for reconsideration because he did not provide new evidence that would change the initial determination that WEP applied (Id. PageID # 55, 67). The Agency explained that the judicial decision Haire submitted showed the judge only awarded one half of the CSRS pension to his ex-wife (Id.). Further, the Agency noted that legally Haire receives the entire pension and half of it is deducted to satisfy a legal obligation he owes to his ex-wife (Id.). Therefore, reasoned the Agency, the reduction of Haire's payment under WEP is correct and proper (Id.).

On July 5, 2016, Haire filed a request for a hearing to dispute application of WEP to his payments (Id. PageID # 55, 69). By letter dated July 13, 2016, the Agency returned Haire's request for a hearing because the Agency had dismissed his request for reconsideration (Id. PageID # 55, 72). On July 19, 2016, Haire requested reconsideration and included new evidence (Id. PageID # 55, 74-79). The new evidence was a copy of the state court order awarding Haire's divorced spouse his full CSRS monthly benefit (Id.). The Agency's Program Service Center in Birmingham, Alabama, forwarded Haire's hearing request along with all other correspondence to the Office of Hearings Operations in Paducah, Kentucky (Id. PageID # 55-56).

Following a hearing, Administrative Law Judge Marci P. Eaton ("ALJ") issued a fully favorable decision on March 12, 2018 (Id. PageID # 56, 82-89). Specifically, the ALJ found that Haire became entitled to receive Social Security benefits on August 1, 2015 (Id. PageID # 88). Further, the ALJ determined that during the period of entitlement to Social Security benefits, Haire did not receive a pension based on noncovered employment which requires his Social Security benefits to be calculated in accordance with WEP (Id.). The ALJ concluded that Haire's Social Security benefits should not be calculated in accordance with the requirements of WEP (Id. PageID # 89).

On May 2, 2018, the Agency issued a Notice of Change in Benefits informing Haire that the Agency removed the WEP offset from RIB monthly benefits (Id. PageID # 56, 91-93). The Agency paid Haire additional benefits because of the removal of the offset (Id.).

On January 3, 2019, the Agency received a WEP alert from the Office of Personal Management (OPM) regarding Haire's CSRS pension (Id. PageID # 56, 95). The Agency used the evidence to reimpose WEP to Haire's RIB monthly benefits beginning December 2018 (Id. PageID # 56, 95, 97-99).

On March 26, 2019, the Agency issued a Notice of Change in Benefits advising Haire that it had reduced his RIB monthly payment by applying WEP beginning December 2018 (Id. PageID # 56, 97-99). The Agency explained WEP and that Haire receives a pension-his CSRS pension-based on work not covered by Social Security taxes (Id.). The Notice advised Haire of his right to request reconsideration of this determination (Id.). On the same date, Haire filed a request for reconsideration (Id. PageID # 56, 101-02).

On April 18, 2019, the Assistant Regional Commissioner, Processing Center Operations, for the Southeastern Program Service Center of the Agency, issued a memorandum addressed to the Office of Disability Adjudication & Review (Id. PageID # 56-57, 104-07). The Agency explained that the ALJ's decision required review because imposition of WEP was correct based on the Agency's policy and procedure (Id.).

On July 9, 2019, the Agency issued a Notice of Change in Benefits advising Haire that the Agency had reduced his RIB monthly payment by applying WEP beginning with his date of entitlement, August 2015 (Id. PageID # 57, 109-12). The Agency demonstrated an overpayment of $17,633.00 to Haire from August 2014 through May 2019 (Id.). The Notice advised Haire that if he disagreed with the overpayment determination he could request reconsideration and requestwaiver of recovery of the overpayment (Id.). On July 15, 2019, Haire filed a request for reconsideration (Id. PageID # 57, 114). Haire did not supply any new evidence in support of his position (Id.).

Meanwhile, on August 7, 2019, Haire filed his complaint before this Court (DN 1). On August 23, 2019, the Appeals Council issued a Notice advising Haire that it had reopened the ALJ's decision dated March 12, 2018, and planned to revise the decision because it is contrary to the law and Agency policy (DN 14-2 PageID #151-56).² The Appeals Council indicated that Haire's benefits are subject to calculation under the Windfall Elimination Provision in Section 215(a)(7)(A) of the Social Security Act and 20 C.F.R. §§ 404.213 and 404.243 (Id.). In pertinent part, the Notice explained:

We acknowledge that in an Order dated August 4, 2006, the Hancock Kentucky Circuit Court directed that one-half of your gross monthly annuity under CSRS be awarded to your former wife as a division of marital property until May 1, 2011, and beginning on June 1, 2011, she was to receive the entire monthly CSRS annuity (Exhibit 10, page 5). In the decision dated March 12, 2019, the Administrative Law Judge stated that, "[t]herefore, the claimant's entitlement to CSRS benefits ceased June 1, 2011" (Decision, page 3). This conclusion is contrary to the law and our policy. Section 215(a)(7)(A) of the Act applies to an individual who first becomes eligible after 1985 for a monthly periodic payment. As described above, POMS RS 00605.360 defines "eligible" as when an individual meets all requirements for the pension except for stopping work or filing an application. You stated that you became eligible for CSRS benefits in 1997. The Circuit Court Order acknowledged your eligibility and entitlement to CSRS retirement benefits at least as of August 4, 2006. The Administrative Law Judge's decision erroneously conflates the legal definition of"eligibility" for and "entitlement" to this non-covered pension with your actual receipt of monthly annuity payments. Although your CSRS pension benefits are payable to your ex-wife by judicial order to satisfy your legal obligations to her under your divorce settlement, you are nonetheless still eligible for monthly periodic payments based on employer and/or employee contributions and based on eligibility factors such as age, length of service or earnings. As a result, the Windfall Elimination Provision is applicable to your retirement benefits.

In applying the Windfall Elimination Provision and considering the amount of non-covered monthly pension, POMS RS 00605.364C directs that the Agency determined that gross monthly pension amount payable before reductions, including an assignment of pensions (e.g., spouse's share of pension). Our policy directs that the provision is applicable if you are eligible and entitled to benefits, and we must consider the amount payable before reductions, including any assignment of pension benefits to your former spouse. Thus, even though your pension benefits have been assigned by judicial order to your former spouse to satisfy your marital property division obligations, the Windfall Elimination Provision is still applicable. Your circumstances do not fall within any statutory or regulatory exceptions to the required computation of benefits based on eligibility for the pension based on your non-covered employment. Thus, the Windfall Elimination Provision applies to your Retirement Insurance benefits, and the Administrative Law Judge's findings to the contrary are erroneous.

Accordingly, absent additional evidence or compelling legal argument, we plan to issue an unfavorable decision finding that your Retirement Insurance Benefits are subject to calculation under the Windfall Elimination Provision.

(Id. PageID # 153-54). The Appeals Council advised Haire that he may submit argument, submit additional evidence, and may request an appearance before the Appeals Council ...