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Dillon v. Berryhill

United States District Court, S.D. West Virginia, Huntington Division

March 28, 2017

BARRY J. DILLON, Plaintiff,
v.
NANCY A. BERRYHILL, Acting Commissioner of the Social Security Administration, Defendant.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. CHAMBERS, CHIEF JUDGE

         Pending before the Court is Defendant's Partial Motion to Dismiss (ECF No. 5) for failure to state a claim under Federal Rule 12(b)(6).[1] The matter has been fully briefed, and the issue is now ripe for review. For the following reasons, the Court GRANTS Defendant's Partial Motion to Dismiss (ECF No. 5).

         I. Background

         Plaintiff brought this suit to challenge the Social Security Administration's (SSA) redetermination process that resulted in an Administrative Law Judge (ALJ) terminating Plaintiff's disability benefits.[2] The Office of the Inspector General (OIG) investigated Attorney Eric C. Conn for fraudulent activity in over one thousand social security cases. Def.'s Br. in Supp., ECF No. 6, at 5. The OIG reported that it had reason to believe that Conn and his law firm submitted pre-completed template medical forms from Bradley Adkins, Ph.D., Srinivas Ammisetty, M.D., Frederic Huffnagle, M.D., and David P. Herr, D.O. to ALJ David Daugherty for approval. Id. at 5-6. Upon receiving the OIG referral, the Social Security Act (the Act) mandates the SSA to redetermine the cases suspected of containing fraud or similar fault. Id. The SSA must disregard any evidence from the allegedly fraudulent sources when conducting the redetermination. Id.

         Plaintiff hired Conn to represent Plaintiff when he applied for disability benefits. Id. Plaintiff allegedly suffers from diverticulitis, high blood pressure, ulcerative colitis, permanent colostomy, arthritis, hearing loss, and headaches. Id. at ¶ 6. In March of 2009, ALJ Daugherty issued Plaintiff a favorable decision on his disability application. Id. at ¶ 16. In June of 2015, however, Plaintiff received a letter from the SSA suspending his benefits because “there was reason to believe fraud was involved in certain cases including evidence from M.D., Frederic Huffnagle.” Id. at ¶ 17. Following the statutory mandate, the SSA excluded Huffnagle's reports from Plaintiff's file upon review. Def.'s Br. in Supp., ECF No. 6, at 6. Plaintiff appeared for a video hearing on redetermination in front of a new ALJ in December of 2015. Id. Subsequently, Plaintiff received a Notice of Appeals Council Action that confirmed the ALJ's decision that Plaintiff's file contained insufficient evidence to support disability. Pl.'s Compl., ECF No. 1, at ¶ 18. The SSA terminated Plaintiff's benefits, which prompted this litigation.

         Plaintiff filed suit on May 11, 2016 in federal court to seek a declaratory judgment that Defendant violated the Act, the Due Process Clause of the Constitution, the Equal Protection Clause of the Constitution, and the Administrative Procedures Act (APA). Id. at ¶ 28. Alleging violations of the Act, Plaintiff asserts that Defendant failed to immediately redetermine benefits as required and failed to provide Plaintiff an opportunity to rebut the fraudulent determination of Huffnagle's medical evidence. Id. at ¶¶ 32-33. Plaintiff alleges that Defendant violated due process by relying on confidential decisions of fraudulent activity to justify conducting mass hearings for redetermination. Id. at ¶ 42. The Equal Protection Clause argument states that Defendant failed to allege wrongdoing against the Plaintiff and thus cannot take away Plaintiff's social security disability benefits. Id. at ¶¶ 45-46. The arguments for violations of the APA are contained within the due process section, alleging that Defendant did not follow the requisite procedures contained therein. Id. at ¶ 42. Defendant filed a motion to dismiss the constitutional and statutory arguments for failure to state a claim. Defendant interpreted the complaint's prayer for relief to include a substantive cause of action challenging the Commissioner's final decision, which Defendant does not include in the motion to dismiss. Def.'s Partial Mot. to Dismiss, ECF No. 6, at 4 n.3.

         II. Legal Standard

         Federal Rule 8(a) requires a complaint to include “a short and plain statement of the claim … showing entitle[ment] to relief.” Fed.R.Civ.P. 8(a)(2). To overcome a motion to dismiss under Federal Rule 12(b)(6), a complaint must also be plausible. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 546 (2007). This standard requires a plaintiff to set forth the “grounds” for an “entitle[ment] to relief” that is more than mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (internal quotations and citations omitted). A complaint must contain “sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citation omitted). Facial plausibility exists when a claim contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted).

         Accepting the factual allegations in the complaint as true (even when doubtful), the allegations “must be enough to raise a right to relief above the speculative level ….” Twombly, 550 U.S. at 555 (citations omitted). If the allegations in the complaint, assuming their truth, do “not raise a claim of entitlement to relief, this basic deficiency should … be exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. at 558 (internal quotations and citations omitted). Finally, “[a]lthough for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678 (internal quotations and citation omitted).

         III. Discussion

         The Court recently issued a Memorandum Opinion and Order in a similar case addressing the constitutionality and legality of the redetermination process. See Robertson v. Berryhill, Civ. No. 3:16-3846, ECF No. 40 (S.D. W.Va.). Rather than repeat the full analysis here, the Court directs the parties to the opinion granting the Commissioner's motion to dismiss in that case.[3] As this case asserts many of the same legal issues as discussed in Robertson, the Court adopts and incorporates the analysis of the Robertson Order here. Plaintiff additionally alleges that a declaratory judgment should be issued for legal reasons not raised in Robertson, including due process failures for not providing particularized or sufficient notice and causing a representational crisis, equal protection concerns, and APA allegations construed to allege failures in notice and comment rulemaking. The Court will address each of these additional arguments in turn.

         a. Due Process Allegations

          Plaintiff's due process allegations address the SSA's alleged failure to provide particularized notice to Plaintiff with an individual explanation as to why redetermination was necessary. Pl.'s Compl., ECF No. 1, at ¶ 40. Defendant challenges this allegation because the SSA provided Plaintiff with notices to inform him of the redetermination process, the OIG's finding that there was reason to believe fraud was involved in acquiring Plaintiff's benefits, and the subsequent events to follow in redetermining his benefits. Def.'s Br. in Supp., ECF No. 6, at 12; see also Pl.'s Compl., ECF No. 1, at ¶¶ 6 (appearing at redetermination hearing), 17 (notice of reason to believe fraud was involved with Huffnagle's reports), and 18 (denial of benefits without evidence from Huffnagle). Plaintiff failed to respond to Defendant's arguments in his Response. See Hayes v. D.C., 923 F.Supp.2d 44, 49 (D.D.C. 2013) (finding that a court can consider an argument conceded if not addressed in dispositive motion response).

         The Court finds that Defendant's notice to Plaintiff satisfied the requirements of the Act and afforded Plaintiff due process. Although the letters sent to affected claimants are identical, each letter includes the necessary information: reason for redetermination, doctors involved in the fraudulent scheme, statutory mandate for redetermination process, and steps involved in the redetermination process. See Notice of Appeals Council Action, ECF No. 5-4.[4] The letters follow the notice requirements stated in 42 U.S.C. ยง 405(s), and the Court is not aware of other ...


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