Wilson v. Secretary of Health and Human Services

• Decision Date: 08 March 1982
• Docket Number: No. 81-1188,81-1188
• Parties: Helen A. WILSON, as Representative Payee for Roland D. Wilson, Social Security # 004-54-7227, on behalf of herself and all others similarly situated, Plaintiff, Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

Page 673

671 F.2d 673

Helen A. WILSON, as Representative Payee for Roland D.

Wilson, Social Security # 004-54-7227, on behalf

of herself and all others similarly

situated, Plaintiff, Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant, Appellee.

No. 81-1188.

United States Court of Appeals, First Circuit.

Argued Nov. 4, 1981.

Decided March 8, 1982.

James R. Crotteau, Machias, Me., with whom Hugh Calkins, Portland, Me., was on brief, for plaintiff, appellant.

Robert J. Triba, Asst. Regional Atty., Boston, Mass., with whom Richard S. Cohen, U. S. Atty., and William H. Browder, Jr., Asst. U. S. Atty., Portland, Me., were on brief, for defendant, appellee.

Before COFFIN, Chief Judge, DAVIS, ^* Judge, and BREYER, Circuit Judge.

BREYER, Circuit Judge.

Appellant, Helen Wilson, filed a district court action attacking the reduction of her social security benefits. She claimed that the regulation authorizing the reduction was outside the agency's statutory powers. The district court dismissed her action (and denied her request for class certification) because she had not properly exhausted her agency remedies (i.e., there was no "final" agency decision to review) and because, in any event, the agency had decided not to reduce her benefits, making this action moot. We affirm the district court's decision.

I

Helen Wilson is a recipient of Supplemental Security Income (SSI) benefits under Title XVI of the Social Security Act, 42 U.S.C. § 1381 et seq. Her son Roland also applied for SSI in November 1977. He was granted benefits and a "representative payee" was appointed for him in accordance with the statute, 42 U.S.C. § 1383(a)(2), ¹ and the appropriate regulation, 20 C.F.R. § 416.601(a). That regulation provides:

When it appears to the Administration that the interests of a recipient of payments under Title XVI of the Act would be served thereby, certification of payment may be made by the Administration, ... to a relative or some other person (including an appropriate public or private agency) selected by the Administration as the 'representative payee' of the recipient.

In April 1978 Roland moved to live with his mother, Helen, and she was substituted as his representative payee. About a year later, Helen received a "Notice of Overpayment," indicating that she was to be held personally liable for an overpayment of $446.01 to Roland because she had failed to report his income from work the previous summer. The Bangor District Office, which sent this notice to Helen, evidently followed the provisions of the Claims Manual in determining liability:

The representative payee is personally liable for repayment to the extent that (i) the incorrect payments were not used for the support and maintenance of the recipient or (ii) the representative payee is at fault in connection with the overpayment.

C.M. § 5595.2(d)(2)(B), based on 20 C.F.R. §§ 416.551-416.553. Helen Wilson was also informed in clear language on this same notice that she could either (1) request that the repayment be waived because she was not at fault and could not afford repayment or (2) request reconsideration of the decision.

On April 27, 1979, Helen wrote to the Social Security Administration requesting that the payments be waived. Sometime before May 7, she sought and received representation from the Pine Tree Legal Assistance Office in Maine.

Subsequently, on May 10, 1979, Helen received a "Notice of Action to Recover Overpayment" reducing the amount sought to $173.47. ² The Notice reported that the Secretary had determined that Helen was at fault in connection with the overpayment and that therefore repayment could not be waived:

We have found that you must be held liable for repayment of the $173.47. You completed a review form for Roland's SSI in 7/78. You did not report that he was working, even though he started work in 6/78. That part of the overpayment was caused by your failure to report that Roland was working and must be repaid.

Helen was also told that, beginning in June, $25 per month would be withheld from her own SSI payments until the total of $173.47 was recovered. In this same notice the agency asked her to contact the office if she disagreed with the rate of recovery. It added she could request reconsideration (the first step in the internal agency review) within 60 days and that if she wanted to have her payments continued pending appeal she must request reconsideration within 10 days.

About one month later, on June 12, Helen requested reconsideration. The agency granted her a "case review." ³ On June 18, 1979, the agency sent her a "Notice of Reconsideration" affirming the prior decision. Two days later, she requested a hearing before an Administrative Law Judge (ALJ), the next step in the internal agency review.

Helen's hearing before the ALJ took place on October 16, 1979. Her counsel, for the first time, began to make various due process and statutory claims, attacking the adequacy of the notice and hearing in the procedure for recoupment and also claiming that the statute did not permit recovery of overpayments from a representative payee at all. The ALJ was obviously somewhat surprised by these arguments as up to now all of the District Office decisions had merely considered whether Helen was or was not at fault for the overpayment. He therefore remanded the case to the District Office (Bangor) for consideration of the new questions presented by Helen's counsel.

On February 14, 1980, apparently before the District Office took any further action, Helen's counsel filed a complaint in the district court, raising three claims: (1) that appellant's constitutional due process rights had been violated because of inadequate notice of, and opportunity for, a recoupment hearing, (2) that the appellant's rights under the Social Security Act, 42 U.S.C. § 1383(b) had been violated by the same failure, and (3) that recovery of any overpayment under 42 U.S.C. § 1383(b) may only be had from a recipient, his or her eligible spouse, or the estate of either, not from a representative payee-even if the representative payee is at fault. ⁴ On April 2, 1980, appellant moved for certification of a class of "all recipients of benefits under Title XVI of the Social Security Act who reside within the District of Maine; who have been, or will be, charged with an overpayment of such benefits; who have requested or will request waiver or reconsideration of such overpayment; who have not been, or will not be, provided with adequate notice of their rights or adequate opportunity for a hearing before recoupment of such overpayment." This class was for the purposes of the appellant's first two claims only. On April 30 the appellee objected to the motion for class certification and on May 14, 1980, moved to dismiss the complaint for lack of subject matter jurisdiction. On December 18, 1980, the appellant moved for certification of a different class of representative payees: "All representative payees for recipients of benefits under Title XVI of the Social Security Act who reside within the District of Maine; who have been or will be charged with an overpayment on the recipient's account; who have not been or will not be determined to have used the payment for purposes other than the recipient's needs; who have been or will be threatened with recovery of the overpayment; and who have requested or will request that the overpayment not be recovered from them." This class was for the purposes of the third claim only.

In the meantime, on the administrative side of the proceedings, the District Office in Bangor had an oral conference with appellant's counsel sometime in April, focusing on the new claims. No oral decision was rendered at that time, but in December Helen Wilson received a call from the Auburn District Office, in which she was told that her liability had been cancelled, ⁵ and she would receive a refund of the money already withheld.

Thus, by the time of the hearing on the motion to dismiss and the motions for class certification before Judge Gignoux on January 15, 1981, appellant had received a full refund of her SSI payments. The district court granted the Secretary's motion to dismiss on the grounds that there had been no exhaustion of remedies and hence there was no jurisdiction under either the Social Security Act, 42 U.S.C. § 405(g), or the federal mandamus provisions, 28 U.S.C. § 1361. The district court also noted that the appellant's claim was moot, and that as her claim was moot her motion for class certification must also be denied on the grounds that she no longer represented the class in question.

The appellant raises on appeal only one of the three claims for relief presented below: that under the terms of the statute the Secretary may not attempt to recover overpayments from representative payees. With regard to this claim only she argues that (1) jurisdiction is proper under § 405(g), (2) that mandamus jurisdiction is appropriate under § 1361, and (3) that the matter is not moot.

II

The federal district court's jurisdiction over appellant's statutory claim is governed by 42 U.S.C. § 405(g), which states that an "individual, after any final decision of the Secretary made after a hearing, ... may obtain review of such decision" in a federal court. This specific statutory grant of jurisdiction is the only avenue that Congress has provided for review of a decision denying social security benefits. Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). And, the "final decision" required to invoke this jurisdiction has been authoritatively interpreted to mean "that the administrative remedies provided by the Secretary be exhausted." Mathews v. Eldridge, 424 U.S. 319, 328, 96 S.Ct. 893, 899, 47 L.Ed.2d 18 (1976). It is undisputed that the appellant had not exhausted her administrative remedies before filing this suit. As to the statutory issue, she had a right to a hearing before an...