Turnbull v. Berryhill

• Decision Date: 29 September 2020
• Docket Number: Civil Action No. 16-1750 (TJK)
• Parties: William TURNBULL et al., Plaintiffs, v. Nancy BERRYHILL et al., Defendants.
• Court: U.S. District Court — District of Columbia

490 F.Supp.3d 132

William TURNBULL et al., Plaintiffs,

v.Nancy BERRYHILL et al., Defendants.

Civil Action No. 16-1750 (TJK)

United States District Court, District of Columbia.

Signed September 29, 2020

Jonathan Mark Bruce, Law Office of Jonathan Bruce, LLC, Olathe, KS, Aaron M. Bernay, Pro Hac Vice, Joseph J. Dehner, Pro Hac Vice, Frost Brown Todd LLC, Cincinnati, OH, Darren A. Craig, Pro Hac Vice, Hewitt Law & Mediation LLC, Indianapolis, IN, for Plaintiffs.

Johnny Hillary Walker, III, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendants.

MEMORANDUM OPINION

TIMOTHY J. KELLY, United States District Judge

Plaintiffs are a group of dual citizens and lawful permanent residents of the United States who at some point also worked in a foreign country. As a result, they are eligible for retirement benefits under both the Social Security Act and that foreign country's laws. And because of that eligibility, the Social Security Administration applied (or, for one plaintiff, allegedly will apply) the Windfall Elimination Provision to their Social Security benefits, thereby reducing them. Plaintiffs allege that applying the WEP to their benefits is unlawful, and they seek to represent a class of similarly-situated beneficiaries. Defendants have moved to dismiss for failure to exhaust and improper venue, or in the alternative, for summary judgment. For the reasons explained below, the Court will grant Defendants’ motion.

I. Background

A. Statutory and Regulatory Background

The Social Security Act, 42 U.S.C. § 401 et seq. , entitles certain persons to retirement benefits. One limitation on those benefits is the Windfall Elimination Provision (WEP), "which reduces the benefits received by certain individuals who also receive pensions for work that did not require them to pay social security taxes." Hawrelak v. Colvin , 667 F. App'x 161, 162 (7th Cir. 2016) ; see also 20 C.F.R. § 404.213. As relevant here, the WEP reduces the Social Security benefits of those who receive foreign pensions because they worked in another country. 20 C.F.R. § 404.213(a)(3). Not all foreign pensions trigger the WEP; only those that are "from private employers" or "from social insurance systems that base benefits on earnings but not on residence or citizenship." Id.

The Social Security Administration (SSA) applies the WEP according to the Program Operations Manual System (POMS), an internal guidance document for SSA employees. See Hall v. Sebelius , 689 F. Supp. 2d 10, 15–16 (D.D.C. 2009). The POMS sets out various policies relating to the WEP, including how to calculate the reduction, POMS GN 00307.290 ; when a totalization agreement changes that calculation,¹ POMS RS 00605.386 ; and exceptions to the WEP, POMS RS 00605.362. The POMS also identifies six countries whose pension systems are partly earnings-based and partly residence-based, such that only part of those pensions should factor into a beneficiary's WEP reduction. See POMS GN 00307.290 (C)(6) (noting that Canada, Sweden, Norway, Finland, the Netherlands, and Switzerland have these hybrid systems).

If a beneficiary believes that the SSA miscalculated her WEP reduction, she may challenge that calculation through an administrative review process. See Ryan v. Bentsen , 12 F.3d 245, 247 (D.C. Cir. 1993). That process has four steps: (1) an initial determination; (2) reconsideration; (3) a hearing before an administrative law judge; and (4) Appeals Council review. 20 C.F.R. § 404.900(a)(1)–(4). After those steps are complete—that is, once a dissatisfied claimant has exhausted the administrative review process—that person may seek review in federal court. Id. § 404.900(a)(5). The judicial review provision of the Social Security Act, 42 U.S.C. § 405(g), has both "jurisdictional and non-jurisdictional exhaustion components." Cost v. Social Security Administration , 770 F. Supp. 2d 45, 48 (D.D.C. 2011). "The requirement that a plaintiff must first present his claim to the agency is jurisdictional and cannot be waived, while the requirement that the plaintiff must complete the agency review process is non-jurisdictional and may be waived." Id. In other words, the Court has no jurisdiction under 42 U.S.C. § 405(g) unless "a claim for benefits [has] been presented to the" SSA, but the Court can waive exhaustion of the administrative process for equitable reasons. Mathews v. Eldridge , 424 U.S. 319, 328, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).

B. Procedural Background

Plaintiffs are several dozen dual citizens and lawful permanent residents of the United States. ECF No. 23 ("Second Am. Compl.") ¶¶ 2–35. They sued in August 2016 and filed the operative Second Amended Complaint in April 2017. ECF No. 23. They challenge the SSA's application of the WEP to their benefits because they receive foreign pensions. Id. ¶¶ 49–57. Specifically, they allege that the SSA has an internal, undisclosed policy of applying the WEP to beneficiaries who receive pensions from 24 countries—in violation of the Social Security Act, its regulations, and international agreements between the United States and those countries. Id. ¶¶ 42–53.

Most Plaintiffs live in the United States. See id. ¶¶ 2–34. Four do not specify their residence. Id. ¶¶ 28–31. And two live outside the United States. Id. ¶¶ 4, 35. Collectively, they allege that they receive or qualify for foreign pensions from the United Kingdom, the Netherlands, Switzerland, Canada, Belgium, Norway, Germany, and Greece.² Id. ¶¶ 2–35. They seek to represent all persons similarly situated, defined as those who receive foreign pensions from any of twenty-four specified countries and believe the WEP has been erroneously applied to their Social Security benefits. Id. ¶¶ 50–51.

With one exception, Plaintiffs allege that they have complied with the jurisdictional exhaustion requirement in 42 U.S.C. § 405(g) by filing claims for benefits from the SSA. Second Am. Compl. ¶ 104. They admit that when they filed the complaint, they had not exhausted administrative remedies, but they argue that the Court should excuse their failure to do so.³ Id. ¶¶ 106–108; ECF No. 25 ("Pls.’ Opp.") at 10–27. One plaintiff, Alain Merkel, had not presented a claim to the SSA at the time of Defendants’ motion because he had not yet claimed benefits. Second Am. Compl. ¶ 34.

Pending before the Court is Defendants’ motion to dismiss the complaint for lack of jurisdiction and improper venue, or, in the alternative, for summary judgment. See ECF No. 24.

II. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(3), a defendant may move to dismiss an action for improper venue. "In considering a Rule 12(b)(3) motion, the Court ‘accepts the plaintiff's well-pled factual allegations regarding venue as true, draws all reasonable inferences from those allegations in the plaintiff's favor, and resolves any factual conflicts in the plaintiff's favor.’ " Jalloh v. Underwood , 300 F. Supp. 3d 151, 154 (D.D.C. 2018) (quoting Pendleton v. Mukasey , 552 F. Supp. 2d 14, 17 (D.D.C. 2008) ). But it is the plaintiff's burden to show that venue is proper in her chosen forum. Id.

Under Federal Rule of Civil Procedure 56, a court must grant summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Summary judgment is appropriately granted when, viewing the evidence in the light most favorable to the non-movants and drawing all reasonable inferences accordingly, no reasonable jury could reach a verdict in their favor." Lopez v. Council on Am.-Islamic Relations Action Network, Inc. , 826 F.3d 492, 496 (D.C. Cir. 2016).⁴

III. Analysis

In urging dismissal or summary judgment, Defendants make essentially three arguments: (1) Plaintiffs failed to exhaust their administrative remedies under § 405(g), no exception to the non-jurisdictional exhaustion requirement applies, and no other statute enables the Court to hear Plaintiffs’ case; (2) Plaintiffs lack standing to challenge how the SSA applies the WEP to claimants who receive pensions from countries from which Plaintiffs do not receive pensions; and (3) the District of Columbia is an improper venue for all but the claims of two plaintiffs. See ECF No. 24-2 ("Defs.’ Mot.") at 1. As explained below, the Court agrees with Defendants, will dismiss for improper venue the claims brought by all plaintiffs except two, and grant summary judgment for failure to exhaust on those remaining.⁵

A. Venue

The Social Security Act specifies where venue is proper for actions arising under it. 42 U.S.C. § 405(g). "Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the District of Columbia." Id. Defendants argue that Plaintiffs have not met their burden to show that venue is proper as to all but two plaintiffs, Anthony Jones and Evangelos Pezas. Jones and Pezas allege that they reside abroad, but all other plaintiffs allege that they reside in the United States outside this District.⁶ In response, Plaintiffs do not dispute Defendants’ characterization of Plaintiffs’ residencies, but argue that an exception to § 405(g) applies to claims such as theirs which are "collateral to any claim for benefits," such that the general venue statute, 28 U.S.C. § 1391, applies. Vencor Nursing Ctrs., L.P. v. Shalala , 63 F. Supp. 2d 1, 6 (D.D.C. 1999) ; see Pls.’ Opp. at 30.

The Court cannot agree with Plaintiffs. The Vencor court held, with little analysis, that because the Supreme Court had recognized a collaterality exception to § 405(g) ’s exhaustion requirement in Mathews v. Eldridge , 424 U.S. 319, 329–31, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976), § 405(g) as a whole did not apply to any collateral claim. 63 F. Supp. 2d at 6 ("In...