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Bauer v. Commissioner of Social Security

United States District Court, M.D. Florida, Fort Myers Division

April 20, 2018

CHARLES W. BAUER, Plaintiff,



         This matter is before the Court on consideration of the Magistrate Judge's Sealed Report and Recommendation (Doc. #40), filed December 22, 2016, recommending that the Commissioner's Opposed Motion to Dismiss Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure (Doc. #19) be granted and the case be dismissed for lack of subject matter jurisdiction. Plaintiff Charles W. Bauer (plaintiff or Bauer), proceeding pro se, filed Objections (Doc. #43) on April 5, 2017.

         Plaintiff Charles W. Bauer (plaintiff or claimant) applied for and began receiving early retirement benefits from the Social Security Administration (the SSA). There has never been any question about plaintiff's eligibility for such benefits. Almost twelve years later, plaintiff became convinced that the amount of his retirement benefits was improperly computed, and asked the SSA to correct the computation, pay the correct monthly amount, and pay past-due benefits. Plaintiff ultimately was given an administrative hearing before an Administrative Law Judge (ALJ), who agreed that plaintiff's retirement benefits were improperly computed. (Doc. #19-1, Exh. 1.) The SSA Appeals Council disagreed, retroactively dismissed plaintiff's request for a hearing as untimely, and deemed the ALJ's decision to have “no effect.” (Doc. #19-1, Exh. 4.)

         Plaintiff challenges the Appeals Council's decision in federal district court. The Commissioner of Social Security (the Commissioner) asserts that the SSA has never made a “final decision” after a hearing, as required by 42 U.S.C. § 405(g), and therefore a district court lacks subject matter jurisdiction. The magistrate judge agreed with the Commissioner, and recommends dismissal of the case for lack of subject matter jurisdiction.

         For the reasons set forth below, the Court accepts much of the Report and Recommendation, but declines to accept the magistrate judge's finding that the court lacks subject matter jurisdiction. The motion to dismiss is denied because the record establishes that federal district court does have subject matter jurisdiction in this case.


         The Court adopts the “Factual and Procedural Background” portion of the Report and Recommendation. (Doc. #40, pp. 5-12.) In sum:

Plaintiff served four years of active duty in the United States Air Force and then thirty-three years as a military reservist, dual status air technician for the Air National Guard. Plaintiff's employment was thus under the control of the United States Department of Defense from January 1969 through June 1995, when he was honorably discharged from his position as a military reservist.

         In 2001, plaintiff applied for early old age retirement benefits at the age of sixty-two. It is undisputed that plaintiff was eligible for these retirement benefits. The SSA computed plaintiff's retirement benefits utilizing the Windfall Elimination Provision (WEP), 42 U.S.C. § 415(7)(A), which reduces Social Security retirement benefits when a claimant simultaneously receives both SSA benefits and a pension based on employment not covered by Social Security.[1] Plaintiff voiced no objections to the computation of the benefits, although plaintiff now asserts that the SSA failed to provide him with constitutionally adequate notice that his retirement benefits were being reduced by the WEP.

         In 2012, plaintiff was informed by a non-official source that he was exempt from the WEP formula because of his prior employment as a military reservist, dual status technician with the Air National Guard. Later in 2012, plaintiff contacted the local Social Security office in Fort Myers, Florida and the SSA office in Birmingham, Alabama in order to have the computation of his retirement benefits corrected. On November 6, 2012, plaintiff completed a Request For Reconsideration form which had been sent to him by the Birmingham SSA office, requesting an additional increase of his social security benefits based upon his active duty and National Guard service. On May 6, 2013, plaintiff went to the Fort Myers SSA office for a review of his Request For Reconsideration, and learned that his Social Security file had been destroyed by the SSA. The SSA provided only a “Military Service & Windfall Elimination Input” printout as its file. The SSA refused to remove the WEP deduction from the calculation of plaintiff's retirement benefits.

         On May 20, 2013, plaintiff wrote the SSA National Headquarters requesting a change in his benefits to remove the WEP deduction. For the first time, plaintiff made reference to an untitled Eighth Circuit case. On June 6, 2013, the SSA National Headquarters acknowledged plaintiff's request to remove the WEP offset of his benefits based on Petersen v. Astrue[2], and remanded his case back to the Fort Myers Office for assistance in filing a written request for a benefit change.

         On June 10, 2013, plaintiff completed and returned a “Statement of Claimant or Other Person” form requesting a review of the WEP reduction of benefits, asserting that as a military reservist the WEP deduction was inapplicable to his retirement benefits pursuant to Policy #RS00605.383 (of the Commissioner's Program Operations Manual System [POMS]) and requesting that his benefits be corrected.

         An August 28, 2013, letter from the SSA denied plaintiff's request to correct his benefits. The SSA stated that it had made plaintiff's benefits calculation decision prior to the Eighth Circuit decision in Petersen v. Astrue[3], plaintiff was not living in any of the States within the Eighth Circuit, the SSA would not change its prior decision, and the earlier SSA decision “remains the final decision of the agency in your case.” The letter attached a copy of the Acquiescence Ruling 12-X(8). (Doc. #37-13, Exh. K.)

         On September 27, 2013, plaintiff filed a Request For Hearing by an Administrative Law Judge. Plaintiff asserted that pursuant to 42 U.S.C. § 415(a)(7)(D) he was exempt from the WEP. On January 9, 2014, the SSA granted the request for a hearing before an Administrative Law Judge.

         On January 28, 2015, plaintiff was given an administrative hearing before Administrative Law Judge Maria C. Northington (ALJ), and plaintiff and his wife presented various evidence and arguments. On March 10, 2015, the ALJ issued a fully favorable decision to plaintiff. The ALJ stated that the only issue was whether plaintiff's benefits were incorrectly calculated. The ALJ found that while Petersen did not apply to plaintiff's case, plaintiff's retirement benefits had been improperly reduced by the WEP because the WEP did not apply to plaintiff.

         Plaintiff's favorable decision did not last long. On March 30, 2015, an assistant regional commissioner opined that the ALJ's decision was “contrary to the law and regulations.” (Doc. #19-1, Exh. 2.) On May 6, 2015, the Appeals Council sent plaintiff a Notice of Appeals Council Action in which it informed plaintiff it was reviewing the decision of the ALJ because it found an error of law. The Appeals Council stated that it planned to vacate the ALJ decision and dismiss the request for a hearing filed on September 30, 2013. The Appeals Council stated that it had determined that the ALJ correctly determined that Petersen did not apply to plaintiff's case, and therefore the ALJ could not reopen the case since the time period for reopening had passed, citing 20 C.F.R. § 404.988. The Appeals Council also found that the ALJ was not substantively correct because the WEP did apply to plaintiff's benefits, and found that the ALJ should therefore have dismissed the case pursuant to 20 C.F.R. § 404.903(o). Plaintiff was advised he had thirty days to submit more evidence or a statement of facts and law, and to request an appearance before the Appeals Council. The Appeals Council would make its ultimate decision at the end of those time periods. (Doc. #19-1, Exh. 4.)

         Plaintiff thereafter filed requests for appearance and memoranda of law, but on June 9, 2015, the Appeals Council denied the requests for appearance. Plaintiff filed additional information, as allowed by the Appeals Council.

         On September 25, 2015 the Appeals Council entered an Order Of Appeals Council from which plaintiff seeks judicial review. The Appeals Council held that the ALJ correctly found that Petersen did not apply to plaintiff, “in which case, the [ALJ] could not reopen this case, as the time period for reopening had past [sic].” Additionally, the Appeals Council found that the ALJ decision was not substantively correct because the WEP did apply to plaintiff, and therefore procedurally the ALJ should have dismissed the case because “an action denying a request to readjudicate a claim and apply an Acquiescence Ruling is not an initial determination subject to judicial review.” The Appeals Council found that it could dismiss the hearing request for any reason the ALJ could have, and therefore the Appeals Council retroactively dismissed the request for hearing filed on September 30, 2013. The ...

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