Mattern v. Mathews

• Decision Date: 07 March 1977
• Docket Number: Civ. A. No. 72-2522.
• Citation: 427 F. Supp. 1318
• Parties: Arlene MATTERN, on behalf of herself and all others similarly situated, v. F. David MATHEWS, Secretary of Health, Education and Welfare.
• Court: U.S. District Court — Eastern District of Pennsylvania

427 F. Supp. 1318

Arlene MATTERN, on behalf of herself and all others similarly situated, v. F. David MATHEWS, Secretary of Health, Education and Welfare.

Civ. A. No. 72-2522.

United States District Court, E. D. Pennsylvania.

March 7, 1977.

Alan Linder, Central Pa. Legal Services, Lancaster, Pa., for plaintiff.

David W. Marston, U. S. Atty., Philadelphia, Pa., for defendant.

OPINION AND ORDER

HISTORY AND CONTENTIONS

TROUTMAN, District Judge.

This action, as originally filed in this Court, challenged the procedure utilized by the Secretary of Health, Education and Welfare the Secretary pursuant to Section 204 of the Social Security Act the Act, to adjust or reduce social security benefits in order to recoup an alleged overpayment. Specifically, plaintiff, on behalf of herself and others similarly situated, sought injunctive and declaratory relief, requiring the Secretary to conduct an evidentiary hearing prior to adjusting or reducing social security benefits to which plaintiff is entitled under Title II of the Act. 42 U.S.C. § 401 et seq. Plaintiff challenged the failure to provide an oral hearing prior to the recoupment of an alleged overpayment on the grounds that it is contrary to the purpose of the Act and violative of the Fourteenth Amendment to the Constitution. Before the Court were (1) defendant's motion to dismiss the complaint for lack of jurisdiction, (2) plaintiff's motion for a class action determination, (3) plaintiff's motion to convene a three-judge court, and (4) cross-motions for summary judgment.

This Court, in its opinion filed April 30, 1974, held that the Secretary of Health, Education and Welfare was constitutionally required to provide notice and opportunity for an oral evidentiary hearing, prior to the suspension of social security benefits to recover an overpayment. Mattern v. Weinberger, 377 F.Supp. 906 (E.D.Pa.1974). The Third Circuit Court of Appeals essentially affirmed this holding, subject to certain exceptions.¹ Mattern v. Weinberger, 519 F.2d 150 (3rd Cir. 1975). The Secretary filed a petition for a writ of certiorari with the Supreme Court (U.S. S.Ct., No. 75-649), which petition was acted upon on May 24, 1976. 425 U.S. 987, 96 S.Ct. 2196, 48 L.Ed.2d 812 (1976). The Supreme Court vacated the appellate decision and remanded for reconsideration in light of the decision in Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). The Third Circuit Court of Appeals, by order of July 23, 1976, remanded the action to this Court for reconsideration in accordance with the Supreme Court's directive.

It is defendant's contention that the Eldridge decision is dispositive of the procedural due process issues in this litigation and requires reversal of this Court's prior opinion. Defendant further contends that Eldridge, in conjunction with the opinion in Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975), "impacts" on the jurisdiction of this Court.

The plaintiff contends otherwise. Preliminarily, plaintiff concedes that this Court has no federal question jurisdiction under 28 U.S.C. § 1331. She properly interprets Salfi as holding (prior to Eldridge) that the only avenue open for judicial review is under 42 U.S.C. § 405(g).² The defendant has contended throughout that our jurisdiction is so limited. Plaintiff further contends, however, that in Eldridge the Court modified the jurisdictional holding of Salfi. We quote as follows from plaintiff's brief:

"The Court stated that the exhaustion requirement contained two elements, one which could be `waived' by the Secretary and one which could not be waived. 96 S.Ct. 899. The non-waivable, `jurisdictional' element was the requirement that a claim be `presented' to the Secretary for purposes of a final decision to enable federal court review. The waivable element was the requirement of `exhaustion' of the Secretary's administrative remedies. 96 S.Ct. 899. These elements are satisfied in the case at bar.

"In Eldridge, the Court held that the plaintiff's claim had been presented to the Secretary through the filing of an application for benefits, and by presenting claims to the district office and Regional offices of the Social Security Administration. Furthermore, Mr. Eldridge had answered a state agency questionnaire regarding his continuing disability and he had written and sent a letter in response to the Secretary's tentative determination that his disability had ceased, contesting the Secretary's action, which claim the Secretary had denied. 96 S.Ct. 900. Similarly, Mrs. Mattern has presented her benefit claim to the Secretary to satisfy the jurisdictional requirements of Eldridge.

"As the record herein shows (Appendix, 54a) and as noted by this Court, Mrs. Mattern opposed the Secretary's proposed action to terminate her benefits. 377 F.Supp. at 909. She answered the Secretary's `without fault' questionnaire and submitted a waiver of overpayment request. Appendix, 54a-57a. She also filed a request for a reconsideration determination (Appendix, 63a) which was denied, although the amount of her proposed monthly repayments was thereafter reduced. Appendix, 67a; 519 F.2d at 155.

"While Mrs. Mattern may or may not have `presented' her constitutional claim to the Secretary, such is not required under Eldridge. The Court stated in Eldridge that while the Secretary may have the authority to determine the timing and content of the challenged procedures, the Secretary would not be required `even to consider such a challenge since it is `unrealistic' to expect the Secretary to consider `substantial changes' in the current administrative review system `at the behest of a single aid recipient raising a constitutional challenge in an adjudicatory context'. 96 S.Ct. at 900.

"The Court held that the waivable element of obtaining a final decision of the Secretary by Exhaustion of remedies was also satisfied in Eldridge. The Court noted that the Secretary has the discretion to waive exhaustion requirements either because the `internal needs of the agency are fulfilled' or because the relief sought is `beyond his power to confer'. 96 S.Ct. at 900. However, the Court also noted that in certain circumstances the failure or refusal of the Secretary to waive the exhaustion requirements is not entitled to deference by the courts if `a claimant's interest in having a particular matter resolved promptly is so great that deference to the agency's judgment is inappropriate'. Id. The Court in Eldridge held that such a case had been presented where the claimant's `constitutional challenge was entirely collateral' to the substantive claim of entitlement, and where `full relief cannot be obtained at a post deprivation hearing'. 96 S.Ct. at 901. The Court then found that Mr. Eldridge has raised at least a `colorable claim' that an erroneous termination would not be subsequently recompensable. Id.

"Similarly, in the instant case Mrs. Mattern has not fully exhausted administrative remedies, but has presented a claim which would be futile to pursue through final agency procedures. Certainly, her interest in the prompt resolution of the matter should outweigh deference to agency exhaustion requirements in that her benefits were to be terminated without a hearing. Unquestionably, her constitutional claim is entirely collateral to her claim for benefits, as the purpose of her suit is to obtain procedural due process for all claimants similarly situated. In this regard, the Court noted the `core principle that statutorily created finality requirements, should if possible, be construed so as not to cause crucial collateral claims to be lost and potential irreparable injuries to be suffered. 96 S.Ct. at 901, fn. 11.

"It is submitted that Mrs. Mattern has also satisfied the exhaustion requirements of Salfi, in that the Secretary appears to have waived the exhaustion requirement herein by not having raised a sufficient `challenge' to the allegations of exhaustion in paragraph # 24 of the Complaint herein. Appendix 11a. See Salfi, supra, 95 S.Ct. at 2468. In addition, further exhaustion of administrative remedies herein would be futile and a waste of agency resources. As noted by Justice Rehnquist in Salfi:

"`Plainly these exhaustion purposes have been served once the Secretary satisfies himself that the only issue is the constitutionality of a statutory requirement, a matter which is beyond his jurisdiction to determine, and that the claim is neither otherwise invalid nor cognizable under a different section of the Act. Once a benefit applicant has presented his or her claim at a sufficiently high level of review to satisfy the Secretary's administrative needs, further exhaustion would not merely be futile for the applicant, but would also be a commitment of administrative resources unsupported by any administrative or judicial interest'. Weinberger v. Salfi, 95 S.Ct. at 2467.

"In light of the above, it is clear that Mrs. Mattern has presented her claim to the Secretary and has sufficiently exhausted her administrative remedies for purposes of obtaining a final decision for federal court consideration. Therefore although 42 U.S.C. § 405 was not claimed as a basis of jurisdiction in the Amended Complaint, clearly such basis of jurisdiction exists in this case, and this Court may proceed to decide the merits of this matter."

Thus, plaintiff contends that this Court should now assume jurisdiction under § 405(g), continue jurisdiction under 28 U.S.C. § 1361 and by either avenue afford the plaintiff the relief previously afforded which she continues to seek.

OUR PRIOR DECISION

In our prior decision (377 F.Supp. 906) we denied jurisdiction under 28 U.S.C. § 1331, § 1343(4) and § 1346. We assumed jurisdiction under 28 U.S.C. § 1361. The defendant vigorously argued, at that time, that our jurisdiction was limited to 42 U.S.C. § 405(g) and that the specific language of § 405(h) barred our affording, in this action, the relief sought, for...