Moriarty v. Colvin

• Citation: 806 F.3d 664
• Decision Date: 20 November 2015
• Docket Number: No. 15–1165.,15–1165.
• Parties: Marshall T. MORIARTY, esq., individually and on behalf of all others similarly situated, Plaintiff, Appellant, v. Carolyn W. COLVIN, Acting Commissioner, Social Security Administration, Defendant, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

806 F.3d 664

Marshall T. MORIARTY, esq., individually and on behalf of all others similarly situated, Plaintiff, Appellant,

v.Carolyn W. COLVIN, Acting Commissioner, Social Security Administration, Defendant, Appellee.

No. 15–1165.

United States Court of Appeals, First Circuit.

Nov. 20, 2015.

Richard I. Greenbergfor appellant.

Karen L. Goodwin, Assistant United States Attorney, with whom Carmen M. Ortiz, United States Attorney, and Hugh Dun Rappaport, Assistant Regional Counsel, Social Security Administration, were on brief, for appellee.

Opinion

LYNCH, Circuit Judge.

As an incentive to attorneys to bring Supplemental Security Income (SSI) claims, the Commissioner of the Social Security Administration (SSA), for more than a decade, has paid directly to qualified attorneys a fee of no more than twenty-five percent of the successful recovery of past-due benefits to clients. See42 U.S.C. § 1383(d)(2)(B). When the federal government administers state supplementary payments for the state, that amount of state payments is included in “past-due benefits.” See20 C.F.R. § 416.1503. But when the state chooses to administer its own payments, the state amounts are not included as “past-due benefits” for the purpose of attorney compensation. See id.

So when Massachusetts chose in 2012 to administer its own benefits, rather than rely on federal administration of its supplementary payments as it had done in the past, that had the effect of reducing the fees paid to attorneys representing Massachusetts SSI claimants. The attorney here argues that the Commissioner cannot exclude state-administered state supplementary payments from the amount included in “past-due benefits.” Giving deference to the agency, as we must, we conclude the Commissioner can do so.

We may and do make the assumption that we have federal appellate jurisdiction. We affirm the district court's order granting summary judgment to the Commissioner.

I.

Attorney Marshall Moriarty represented a client in a claim for SSI benefits before the SSA in 2012. Moriarty and his client had entered into an agreement in June 2012, providing that, subject to the SSA's approval, “if SSA favorably decides the claim(s),” Moriarty would receive “a fee equal to the lesser of 25% or the maximum allowable fee that, as of the date of this agreement, is $6000.00.”

In 2013, Moriarty's client received a partially favorable decision, in which the SSA granted him $16,699.02 in federal and federally-administered state back payments. This amount included federal SSI payments the client was owed from November 2010 through April 2013 as well as Massachusetts state supplementary payments from November 2010 through March 2012—the time period during which Massachusetts's state supplementary payments¹were federally administered. However, in April 2012, Massachusetts changed its practice and began administering its own program of supplementary payments. At that point, such payments were no longer included in the SSA's calculation of back payments for purposes of payments to attorneys.

Upon learning that the SSA attorney's fee award did not include twenty-five percent of the Massachusetts state-administered state supplementary payments, Moriarty wrote a letter to the SSA seeking $324.85 in additional fees. The SSA Office of the Regional Counsel e-mailed Moriarty informing him that “past-due benefits are calculated only [on] the basis of federally administered benefits and do not include state supplementation unless federally administered.”

The Commissioner's position is that Moriarty's attorney's fee award can be based only on the $16,699.02 granted by the SSA, and so it cannot include a percentage of the Massachusetts state-administered state supplementary payments from April 2012 through April 2013. If Massachusetts had continued its prior practice of having the federal government administer the program, then Moriarty would have gotten twenty-five percent of the total state and federal payments. Because Massachusetts changed its practice, the Commissioner says that not only will Moriarty not receive the same amount of attorney's fees but he is also forbidden to seek the shortfall.

In August 2013, Moriarty filed a Complaint for Declaratory Relief and Petition for Writ of Mandamus in the federal district court. The parties cross-moved for summary judgment. On December 31, 2014, the district court entered judgment in favor of the Commissioner. Moriarty v. Colvin,76 F.Supp.3d 261, 268 (D.Mass.2014). This appeal followed.

II.

Under Title XVI of the Social Security Act, 42 U.S.C. §§ 1381–1383f, the SSA administers SSI to eligible “individuals who have attained age 65 or are blind or disabled.” Id.§§ 1381, 1381a. States may choose to supplement federal SSI benefits with optional state supplementary payments. See Bouchard v. Sec'y of Health & Human Servs.,

583 F.Supp. 944, 947 (D.Mass.1984)(citing 42 U.S.C. § 1382e); 20 C.F.R. § 416.2001. Massachusetts has chosen to do so. States providing these supplementary payments can administer the payments on their own or enter into an agreement with the Commissioner under which the Commissioner makes supplementary payments on the state's behalf. See42 U.S.C. § 1382e(a)-(b). States that administer their own supplementary payments “may establish [their] own criteria for determining eligibility requirements as well as the amounts.” 20 C.F.R. § 416.2005(c).

When states choose to have the federal government administer the state supplementary payments, the federal government “assume[s] complete control” over the administration of the payments. Bouchard,583 F.Supp. at 947. These states then reimburse the federal government for the state portion of the payments disbursed and pay an administrative fee. See42 U.S.C. § 1382e(d)(1). To be clear, the states do not hold separate hearings whether or not they use the federal government to administer their supplementary payments. See106 Mass.Code Regs. § 327.120. The Commissioner's determination of eligibility for SSI benefits automatically qualifies the claimant for the state supplement. See id.The majority of states administer their own supplementary payments.²Some states do not provide supplementary payments at all.

As originally enacted, the SSI program did not authorize the withholding of SSI benefits from the claimant's award to pay the claimant's attorney his or her fees in successful adjudications. See Bowen v. Galbreath,485 U.S. 74, 79, 108 S.Ct. 892, 99 L.Ed.2d 68 (1988). However, in 2004, the Social Security Protection Act added a subparagraph to 42 U.S.C. § 1383(d)(2), providing that when a claimant is awarded past-due benefits, “the Commissioner of Social Security shall pay out of such past-due benefits to such attorney” the attorney's fees, subject to certain limitations. Pub.L. No. 108–203, § 302(a)(4), 118 Stat. 493, 520 (2004); see42 U.S.C. §§ 406(a)(2), 1383(d)(2)(B). Since 2007, the Commissioner has interpreted “past-due benefits” under the SSI program as “including any Federally administered State payments,” but not including supplementary payments administered by the state. Temporary Extension of Attorney Fee Payment System to Title XVI, 72 Fed.Reg. 16,720, 16,725 (Apr. 5, 2007)(codified at 20 C.F.R. § 416.1503); see alsoSSA Program Operations Manual System GN 03920.031(B)(1) (2012) (“In a title XVI only claim, ‘past-due benefits' are the total amount of Federal and Federally administered State payments accumulated to the claimant and his or her spouse ... because of a decision favorable to the claimant....”). Accordingly, a percentage of state supplementary payments is not included as part of the attorney's fees the SSA awards in states that administer their own supplementary payments. It is this percentage of the Massachusetts state-administered state supplementary payments that Moriarty seeks.

III.

We address the Commissioner's argument that we lack subject matter jurisdiction to decide this case.³Under 28 U.S.C. § 1331, federal courts have jurisdiction to review agency action. See Califano v. Sanders,430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). However, two statutes may potentially withdraw jurisdiction: (1) 42 U.S.C. § 405(h), which provides: “No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331or 1346 of title 28to recover on any claim arising under this subchapter.”; and (2) 42 U.S.C. § 406(a)(3)(C), which provides: “The decision of the administrative law judge or other person conducting the review [of the amount which would otherwise be the maximum attorney's fee] shall not be subject to further review.”

The answer to the jurisdictional question is not clear. However, resolving this case on the merits by affirming the grant of summary judgment has the same consequences as concluding that we do not have jurisdiction. Because the jurisdictional question is a question of statutory jurisdiction, not Article III jurisdiction, see Parella v. Ret. Bd. of R.I. Emps.' Ret. Sys.,173 F.3d 46, 54 (1st Cir.1999), “we believe that this is a case in which we may—and should—bypass the jurisdictional question.” Royal Siam Corp. v. Chertoff,484 F.3d 139, 143 (1st Cir.2007); see also Global NAPs, Inc. v. Verizon New England, Inc.,706 F.3d 8, 12–13 (1st Cir.2013)(explaining that “[w]hen confronted with non-constitutional challenges to jurisdiction,” id.at 12–13, and the “case readily can be resolved in favor of [the party challenging jurisdiction,] ... we may ‘decline to decide the jurisdictional issues ...,’ ” id.at 13(quoting Restoration Pres. Masonry, Inc. v. Grove Eur., Ltd.,325 F.3d 54, 59 (1st Cir.2003))). The Commissioner agrees we have the authority to do so.

IV.

“We review an appeal from a grant of summary judgment de novo.” FDIC v. Estrada–Rivera,722 F.3d 50, 52 (1st Cir.2013).

Because we are reviewing an agency's interpretation of its governing statute, we apply the principles of Chevron, U.S.A., Inc. v. Natural Resources Defense...