MacNeil v. Berryhill

• Citation: 869 F.3d 109
• Decision Date: 24 August 2017
• Docket Number: No. 16-2189,August Term 2016,16-2189
• Parties: Sharon MACNEIL, on her own behalf and on behalf of her minor children A.T.M. and C.E.M., Plaintiff–Appellant, v. Nancy A. BERRYHILL, Acting Commissioner of Social Security, Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

869 F.3d 109

Sharon MACNEIL, on her own behalf and on behalf of her minor children A.T.M. and C.E.M., Plaintiff–Appellant,

v.Nancy A. BERRYHILL, Acting Commissioner of Social Security, Defendant–Appellee.

No. 16-2189

August Term 2016

United States Court of Appeals, Second Circuit.

Argued: May 2, 2017

Decided: August 24, 2017

Fara Tabatabai (Hagit M. Elul, on the brief), New York, New York, for Plaintiff–Appellant.

Sandra M. Grossfeld (Stephen P. Conte, on the brief), New York, New York, for Grant C. Jaquith, Acting United States Attorney for the Northern District of New York, Syracuse, New York, for Defendant–Appellee.

Before: Walker, Livingston, and Lynch, Circuit Judges.

Judge Lynch concurs in the judgment and in the opinion of the Court and files a separate concurring opinion.

Debra Ann Livingston, Circuit Judge:

Plaintiff–Appellant Sharon MacNeil ("MacNeil") conceived twins via in vitro fertilization eleven years after her husband, the donor spouse, died. After the children—A.T.M. and C.E.M.—were born, MacNeil filed applications for child's survivors' benefits, based on her husband's earnings history, with the Social Security Administration ("SSA"). As relevant here, the SSA has interpreted the governing statute—in an interpretation upheld by the Supreme Court—to treat an individual as a child of the decedent-insured, and thus potentially eligible for survivors' benefits, if that individual would inherit from the decedent under the intestacy law of the state in which the insured was domiciled. An Administrative Law Judge ("ALJ") denied the twins' applications for benefits, concluding that, under the version of the New York law in effect at the time of the decision, children conceived and born after a decedent's death were not entitled to inherit by intestacy.

MacNeil then filed suit in the United States District Court for the Northern District of New York challenging this determination, and the district court affirmed the agency's view. We agree with the district court that, under the applicable provisions of New York's Estates, Powers and Trusts Law ("EPTL") in effect at and prior to the time of the agency's final decision, A.T.M. and C.E.M. were not entitled to inherit from the decedent in intestacy. In the absence of any showing of other grounds for eligibility for child's survivors' benefits under the Social Security Act, we affirm the judgment of the district court.

BACKGROUND

I. Factual Background¹

Sharon and Eric MacNeil were married on October 1, 1994, a year after they graduated from college. Several months into their marriage, Eric was diagnosed with non-Hodgkin's lymphoma

at the age of 23. The couple, knowing that the cancer might be terminal or that treatment might render Eric sterile, decided to bank Eric's sperm. Eric died intestate on May 24, 1996, at age 24. In June 2007, eleven years after Eric's death, Sharon underwent in vitro fertilization using the stored sperm. She gave birth to twins, A.T.M. and C.E.M., on February 14, 2008.

II. Procedural History

On October 8, 2009, MacNeil filed separate applications for child's survivors' benefits for her twins with the SSA, based upon the wage earnings of their deceased father. The SSA denied these applications, and MacNeil then sought a hearing before an ALJ. The only question presented before the ALJ was a legal one: whether A.T.M. and C.E.M. qualified as "child[ren]" under the Social Security Act. The ALJ concluded that, though it was uncontested that the twins were biologically Eric MacNeil's children, they were not entitled to inherit under the applicable provisions of New York intestacy law because they were conceived after Eric's death. As a result, on February 14, 2013, the ALJ issued two separate and identical decisions denying MacNeil's applications for each of her children. The SSA's Appeals Council denied MacNeil's paired petitions for review.

On November 18, 2014, MacNeil filed suit against the Commissioner of the SSA in the United States District Court for the Northern District of New York, seeking review of the agency's final determination under 42 U.S.C. § 405(g). The magistrate judge (Hummel, M.J. ) issued a Report & Recommendation ("R&R") proposing that the SSA's denial of benefits be affirmed. The district court (Sharpe, J. ) adopted the R&R in full and dismissed MacNeil's complaint. On June 24, 2016, MacNeil timely appealed.

DISCUSSION

When reviewing a final decision of the Commissioner in a Social Security benefits case, this Court examines the administrative record de novo to determine, as relevant here, whether the SSA applied the correct legal standard. See Pollard v. Halter , 377 F.3d 183, 188 (2d Cir. 2004) ; see also 42 U.S.C. § 405(g).

I

The Social Security Act affords "a monthly benefit for designated surviving family members of a deceased insured wage earner," including children of the deceased. Astrue v. Capato ex rel. B.N.C. , 566 U.S. 541, 132 S.Ct. 2021, 2027, 182 L.Ed.2d 887 (2012) ; see also 42 U.S.C. § 402(d). In a definitional section, the Social Security Act provides that "[i]n determining whether an applicant is the child ... of a fully ... insured individual for purposes of th [e] subchapter [governing, inter alia , survivors' benefits], the Commissioner of Social Security shall apply such law as would be applied in determining the devolution of intestate personal property ... by the courts of the State in which [the decedent insured] was domiciled at the time of his death." 42 U.S.C. § 416(h)(2)(A). Thus, the SSA has explained, an applicant for child's survivors' benefits may qualify if the applicant "could inherit the insured's personal property as his or her natural child under State inheritance laws." 20 C.F.R. § 404.355(a)(1) ; see also Capato , 132 S.Ct. at 2033–34 (upholding the SSA's interpretation as reasonable under Chevron v. NRDC , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)).

Under its internal regulations, the SSA applies the version of state law most beneficial to the applicant, looking to "the version of State law that was in effect at the time the insured died, or any version of State law in effect from the first month for which [the applicant] could be entitled to benefits up until [the] final decision on [the] application." 20 C.F.R. § 404.355(b)(4). In adjudicating the merits of the applications filed on A.T.M. and C.E.M.'s behalf, the ALJ invoked the version of the EPTL in effect at the time of his decision in 2013, and the parties agree that this version of the EPTL properly applies to this case.

II

The parties' arguments on appeal center on two sections of New York's EPTL. Section 4–1.1 provides the general rules for distribution of property "not disposed of by will" via intestacy. See EPTL § 4–1.1 ("The property of a decedent not disposed of by will shall be distributed as provided in this section."). As relevant here, subsection (a) of Section 4–1.1 sets out the basic rules for allocating a decedent's property "[i]f a decedent is survived by" various relatives including the "spouse," "issue," "parents," and "grandparents."² Subsection (b) then states that, in making an intestate distribution, the decedent's half-relatives "shall be treated as if they were [full] relatives." Id. § 4–1.1(b). Similarly, subsection (c), the subsection at the center of the dispute between the parties in this case, also identifies individuals who are appropriately included as members of the class of distributees. This subsection provides that "[d]istributees of the decedent, conceived before his or her death but born alive thereafter, take as if they were born in his or her lifetime." Id. § 4–1.1(c).

The second section, Section 4–1.2, governs the circumstances under which "non-marital children" are considered legitimate issue under the provisions of intestacy law. Under this provision, a "non-marital child is the legitimate child of his mother so that he and his issue inherit from his mother and from his maternal kindred," just as a marital child does. Id. § 4–1.2(a)(1). A non-marital child can also be the legitimate child of his father "so that he and his issue inherit" by the terms of this provision, but only in specified circumstances including, as relevant here, where paternity is "established by clear and convincing evidence," such as "evidence derived from a genetic marker test." Id. § 4–1.2(a)(2)(C)(i).

The agency argues that Section 4–1.1(c), which specifically provides for distribution of an intestate's property to children conceived before the decedent's death who are born thereafter, by implication excludes those children conceived after the decedent's death. MacNeil argues, in contrast, that her twins are entitled to inherit as "non-marital children" under Section 4–1.2 because Eric's biological paternity has been clearly established by genetic testing. In her view, Section 4–1.1(c) does not prevent posthumously conceived children from inheriting via intestacy because the subsection does not expressly state that only distributees conceived before the decedent's death are entitled to inherit. Moreover, she argues, Section 4–1.2, which provides in relevant part that "[a] non-marital child is the legitimate child of his father so that he ... inherit[s] ... if paternity has been established by clear and convincing evidence," such as "evidence derived from a genetic marker test," is applicable by its terms. Id. § 4–1.2(a)(2)(C)(i).

"The starting point of statutory interpretation is, of course, plain meaning." People v. Owusu , 93 N.Y.2d 398, 401, 690 N.Y.S.2d 863, 712 N.E.2d 1228 (1999). "It is well settled that ‘a statute or legislative act is to be construed as a whole, and all parts of an act are to be read and construed together.’ " N.Y. State Psychiatric Ass'n, Inc. v. N.Y. State Dep't of Health , 19 N.Y.3d 17, 23–24, 945 N.Y.S.2d 191, 968 N.E.2d 428 (2012) (quoting N.Y. Stat. § 97 ). Interpretation of one provision of a statute thus "cannot be divorced from its statutory context." In re Avella v....