Jamieson v. Weinberger

• Decision Date: 17 June 1974
• Docket Number: Civ. A. No. 73-585.
• Citation: 379 F. Supp. 28
• Parties: Mae JAMIESON, on behalf of herself and all others similarly situated v. Caspar WEINBERGER, Individually and as Secretary of Health, Education and Welfare.
• Court: U.S. District Court — Eastern District of Pennsylvania

379 F. Supp. 28

Mae JAMIESON, on behalf of herself and all others similarly situated v. Caspar WEINBERGER, Individually and as Secretary of Health, Education and Welfare.

Civ. A. No. 73-585.

United States District Court, E. D. Pennsylvania.

June 17, 1974.

Jonathan M. Stein, Community Legal Services, Inc., Philadelphia, Pa., for plaintiff.

Robert E. J. Curran, U. S. Atty., Paul E. Holl, Asst. U. S. Atty., Philadelphia, Pa., for defendant.

MEMORANDUM OPINION

BECHTLE, District Judge.

This case is before the Court on defendant's motion to dismiss for lack of jurisdiction or, in the alternative, for summary judgment. Plaintiff, Mae Jamieson, instituted a purported class action alleging that she was denied due process¹ because she was not provided an oral hearing prior to the imposition of a $20 downward adjustment of her monthly widow's benefits of $118.40 that has been, and continues to be, payable under Title II of the Social Security Act. The adjustment was made to recoup an erroneously issued $592 (five times $118.40) check, which she does not dispute having received. She asserts the hearing is necessary prior to any adjustment so that she may show that she was without fault in causing the issuance of the check and that it would be against the purpose of Title II of the Act for the Secretary of Health, Education and Welfare ("HEW") to recoup the overpayment from her benefits.

From the information in an affidavit of a deputy director of the Social Security Administration, we obtain the following facts: In July of 1962, plaintiff was issued a check for $255, constituting the lump sum death benefit payment toward the burial expenses of her deceased husband who died fully insured under the Act. Almost six years later, she applied for widow's disability benefits on June 24, 1968, based on her deceased husband's wage record. This application was denied October 9, 1968. Since she did not seek further review of that determination, the Secretary sent her claims folder to the Federal records center for storage.

On July 8, 1971, she applied for monthly old-age survivor's insurance benefits on her deceased husband's wage record and elected to receive reduced widow's benefits beginning with the month she attained age 60. Approval of the application was delayed until December 5, 1971, pending location of her original claims folder for disability benefits which contained proof of marriage to her deceased husband. At that time, the Secretary determined that she was entitled to benefits at the rate of $118.40 a month.

Before two checks (one for $236.80 representing a monthly benefit payment of $118.40 for October, the month she attained age 60, and November; the other for $118.40 for the month of December) were mailed to her on January 5, 1972, and negotiated two days later, plaintiff visited the district office on December 5, 1971, and inquired about the processing of her July 8, 1971, application; because she had not up to that time received any monthly checks. In response to her inquiry, the district office requested her to file a second application. She did so on January 24, 1972, without informing the district office that she had been notified that her first application for widow's benefits had been approved and that she had received the two checks totalling $355.20, representing benefit payments for the last three months of 1971 in response to her July, 1971, application. She also failed to advise the district office that she had cashed these two checks on January 7, 1972. Still later, she received a check of $118.40 for monthly benefits on February 3 and again on March 3, 1972, due her on the first application.

On March 24, 1972, several days after being notified that her second application (the one that was filed January 24, 1972) for widow's benefits had been approved and that the rate was $118.40 per month, she was mailed a check for $592. This check covered payments of $118.40 believed by the Administration to be due her for the five-month period from October of 1971 through February of 1972. Since she had previously received and negotiated checks of $118.40, or a multiple thereof, for those five months, the $592 check represented duplicate payments for those months. The Administration became aware of the error from its own records, and discontinued issuing any more checks to plaintiff pursuant to the January 24, 1972, application. However, monthly payments under the July 8, 1971, application were kept current on the original rate without reduction.

For a better understanding of the significance of what transpired later, it may be helpful to set forth the pertinent provisions of two subdivisions of sections of the Act. Section 204(a)(1) commands the Secretary to make proper adjustment or recovery where an overpayment has been made, except from "any person who is without fault if such adjustment or recovery would defeat the purpose" of Title II of the Act "or would be against equity and good conscience." Regarding notice and opportunity to be heard, § 205(b) provides that upon request by an applicant or other interested potential beneficiary who makes a showing in writing that his or her rights may be prejudiced by a decision of the Secretary, he "shall give such applicant and such other individual reasonable notice and opportunity for a hearing with respect to such decision. . . . Any such request with respect to such a decision must be filed within such period after such decision as may be prescribed in regulations . . ., except that the period so prescribed may be not less than six months after notice of such decision is mailed to the individual making such request . . ." (Emphasis supplied.) This subsection further authorizes the Secretary on his own motion to hold such hearing as he may deem necessary or proper in the execution of the Act. The Secretary concedes that the Act does not expressly prevent him from holding a hearing prior to decision. There is no dispute that the regulations of the Secretary do not provide for a preadjustment hearing.

In July of 1972, plaintiff was notified by a hand-delivered letter of the overpayment determination and that if she believed that the Secretary's decision was incorrect, she could request that her case be reexamined but that such request must be made not later than six months of the notice. The letter also stated that, beginning with the month of October, 1972, and ending with the month of February, 1973, her monthly benefit checks would be withheld to cover the overpayment. The letter provided:

"Under social security law, any overpayment must be withheld from benefits or paid back unless both of the following are true:

1. The overpayment wasn't your fault in any way and you cashed the check(s) because you thought they were correct, and

2. You couldn't meet your necessary living expenses if you had to pay back the overpayment or have it withheld from your social security benefits; or it would be unfair for some other reason."

The letter also advised her that if she met both of the above conditions to call, write or visit any Social Security office within 30 days from receipt of the letter and that, if they did not hear from her within that time, the Administration would withhold her checks for the mentioned five months in keeping with their preliminary decision.

On October 10, 1972, plaintiff again visited the district office and filled out a "Without Fault" questionnaire in support of her request that recovery of the overpayment be waived by the Administration. She was notified by letter dated January 31, 1973, that her request for waiver had been denied; but because of her financial situation, the $592 amount would be recovered at a less drastic rate than formerly proposed, but over a longer period. This was to be done by merely adjusting her monthly benefits downward by $20 per month and that she could ask for a reconsideration of her case within six months and submit any additional available evidence in support of waiver on the part of the Administration. The $20 amount was thereafter withheld from her February and March, 1973, checks.

On March 15, 1973, she brought the action now before us. The gist of her complaint is that the Administration's downward adjustment of her monthly benefits without adequate prior notice of the reason for it and an opportunity for a prior oral hearing violated her right to due process of law. She seeks to have such practices declared unconstitutional and to enjoin the defendant from engaging in them. She also asks the Court to issue an order "restoring to the status quo . . . all benefits currently suspended, terminated or reduced to all OASDI beneficiaries who failed to be afforded opportunity for a prior oral evidentiary hearing."

Accompanying the complaint is a motion for convening a Three-Judge Court. The basis for the motion is that plaintiff seeks to restrain the defendants from the enforcement, operation, and ex-execution of the Act insofar as such Act permits termination, suspension, or reduction of benefits without the opportunity for a prior hearing on disputed issues of fact as required by the Fifth Amendment to the Constitution.

Asserting that the matter in controversy exceeds the value of $10,000, exclusive of interest and cost, and arises under the Fifth Amendment and the Social Security Act, plaintiff invokes the jurisdiction of this Court under 28 U.S. C. § 1331(a), the general Federal question provision of the Judicial Code; and also § 1343(4), for relief under any Act of Congress providing for the protection of civil rights. Should the Court conclude that the matter in controversy does not exceed $10,000, then jurisdiction is sought under 28 U.S.C. § 1337 concerning actions arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies; § 1346(a)(2), the Tucker Act; and § 1361, regarding actions in the nature of mandamus to compel an...