United States District Court, N.D. West Virginia
SUSAN L. BAILEY, Plaintiff,
NANCY A. BERRYHILL, Acting Commissioner of Social Security, Defendant.
REPORT AND RECOMMENDATION
W. TRUMBLE UNITED STATES MAGISTRATE JUDGE.
case arises from a civil monetary penalty imposed on
Plaintiff Susan L. Bailey (“Plaintiff”) for the
overpayment of social security benefits. After the penalty
was imposed, Plaintiff challenged the Social Security
Administration's (“the SSA”) attempt to
collect that debt by withholding her social security
benefits. After proceeding through the administrative
process, a United States Administrative Law Judge (“the
ALJ”) concluded that Plaintiff was at fault for the
overpayment of benefits, and she was not entitled to have the
recovery of said overpayment waived. Now, Plaintiff seeks
judicial review of the ALJ's decision. Because the
ALJ's decision is supported by substantial evidence, the
undersigned recommends that Plaintiff's Motion for
Summary Judgment be denied and Defendant's Motion for
Summary Judgment be granted.
FACTS & PROCEDURAL HISTORY
February 2010 to January 2012, Plaintiff also received $15,
526.00 in social security insurance (“SSI”) on
behalf of a minor, T.C., serving as his representative payee.
R. 241. But T.C. was removed from Plaintiff's custody in
February 2010 and transferred to the legal (and physical)
custody of Columbiana County Jobs and Family Services
(“Columbiana”). R. 241. Although Plaintiff
returned the January 2012 SSI payment, the other $15, 526.00
was not saved or paid forward to Columbiana. R. 241.
Office of the Inspector General (“OIG”) conducted
an investigation and determined that Plaintiff improperly
converted twenty-three of T.C.'s SSI payments for her own
use. R. 215. Then, in June 2013, OIG notified her that it
would impose a penalty of $47, 000.00 and an assessment in
lieu of damages of only $15, 526.00 against her, rather than
the maximum penalty of $115, 000.00 and the maximum
assessment in lieu of damages of $31, 052.00. R. 215-16; 241.
The letter enclosed a financial disclosure form for Plaintiff
to complete and return to OIG at the requested address. R.
215-16. In addition, the letter said that it would forward
the matter to the Counsel to the Inspector General for a
final determination, if they did not hear from Plaintiff in
thirty days. R. 216.
Plaintiff completed and returned the financial disclosure
form as requested, R. 212, she did not otherwise contact OIG
within thirty days. Later that year, in September 2013, OIG
again notified Plaintiff that it would impose a penalty of
$47, 000.00 and an assessment in lieu of damages of only $15,
526.00 against her, for a total civil monetary penalty of
$62, 526.00. R. 211-13. In that letter, OIG informed
Plaintiff of her right to contest the civil monetary penalty
and assessment, by sending a written request for a hearing to
the U.S. Department of Health and Human Services
(“DHHS”) within sixty days. R. 213. And, the
letter warned: “If you do not request a hearing
within the 60-day period, the proposed civil monetary penalty
and assessment will be imposed upon you. You will have no
right to an administrative appeal after that
time.” R. 213 (emphasis in original). Despite
those specific instructions, Plaintiff attempted to contest
the civil monetary penalty by speaking with her local Social
Security office and reaching out to OIG by telephone and
letter dated October 7, 2013. R. 223, 225. That letter was
sent to Counsel to the Inspector General in New York, New
York, not DHHS. R. 225.
February 2014, the SSA informed Plaintiff that it had been
notified of OIG's civil monetary penalty of $62, 526.00,
and it would withhold her social security benefits to collect
the debt. R. 218-20. The next month, Plaintiff filed a
request for reconsideration of the SSA's decision to
collect OIG's civil monetary penalty by withholding her
benefits. R. 221-25. That request was denied. R. 229-31.
Plaintiff then requested a hearing before an Administrative
Law Judge (“ALJ”). R. 232. That hearing was held
in September 2015. R. 297-309. Three months later, the ALJ
issued his decision, R. 13-17, concluding that Plaintiff was
at fault for the overpayment of benefits and, therefore, she
was not entitled to have the recovery of the overpayment
waived, R. 16-17. In June 2017, the Appeals Council denied
Plaintiff's request to review the ALJ's decision,
making the ALJ's decision the final decision of the
Commissioner. R. 4-7.
than two months later, Plaintiff, through counsel, Dean G.
Makricostas, Esq., filed a Complaint in this Court to obtain
judicial review of the Commissioner's final decision
pursuant to Section 205(g) of the Social Security Act, as
amended, 42 U.S.C. § 405(g) (2015). Compl., ECF No. 1.
In November, the Commissioner, through counsel Helen Campbell
Altmeyer, Assistant United States Attorney, filed her Answer
and the Administrative Record. Answer, ECF No. 5; Admin. R.,
ECF No. 6. Plaintiff and the Commissioner filed their Motions
for Summary Judgment in January 2018, and March 2018,
respectively. Pl.'s Br., ECF No. 12; Def.'s Mot.
Summ. J., ECF No. 15. Plaintiff filed a response to the
Commissioner's motion one week later. Pl.'s Resp. to
Def.'s Mot. Summ. J., ECF No. 19. According to Plaintiff,
she repaid approximately $42, 142.50 to the SSA to date. ECF
No. 12 at 5.
matter is now before the undersigned United States Magistrate
Judge for a Report and Recommendation to the District Judge
pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule of
Civil Procedure 9.02(a). Having reviewed the parties'
motions and the administrative record, the undersigned now
issues the following Report and Recommendation.
ADMINISTRATIVE LAW JUDGE'S DECISION
the ALJ concluded that Plaintiff was overpaid benefits in the
amount of $69, 686.00 from March 2010 to April 2012. R. 16.
In support, the ALJ emphasized that Plaintiff did not contest
that she was, in fact, overpaid benefits, and, instead,
argued that she was entitled to have the recovery of said
benefits waived because she was not at fault for the
overpayment. R. 16. Second, the ALJ concluded that Plaintiff
was at fault for the overpayment of benefits because she
failed to report her 2011 and 2012 employment, which had an
effect on her retirement insurance benefits, and continued to
receive SSI benefits on behalf of T.C., and convert them for
her own use, even though he had been removed from her custody
in February 2010. R. 16-17. Third, the ALJ concluded that
Plaintiff was not entitled to have the recovery of the
overpaid benefits waived. R. 17.