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Draughon v. Social Security Administration

United States District Court, E.D. North Carolina, Southern Division

June 1, 2018

TONY F. DRAUGHON, Plaintiff/Claimant,



         This matter is before the court on Defendant's Motion to Dismiss [DE-15] for failure to state a claim upon which relief can be granted. Claimant responded to Defendant's motion [DE-18], and the time for filing a reply has expired. Accordingly, the pending motions are ripe for adjudication. For the following reasons, the court recommends that Defendant's motion to dismiss be allowed.


         On August 28, 2017, Claimant initiated this action against Defendant, alleging that he was denied "an appeal to have new evidence reviewed to obtain Social Security benefits." Compl. [DE-1] at 2. On January 10, 2018, in lieu of filing an answer to the complaint, Defendant filed the instant motion to dismiss [DE-15], and Claimant responded on January 24, 2018 [DE-18].

         Claimant filed an application for supplemental security benefits ("SSI") on September 18, 2013, alleging disability beginning July 20, 2013. ALJ Decision [DE-16-1] at 8. His claim was allowed on November 13, 2015, and he was awarded $488.67 in monthly payments, as well as $13, 510.11 in back payments. Chung Decl. [DE-16-1] at 2-3. On December 2, 2015, Claimant filed a request for reconsideration of the determination of his monthly benefit amount, which was denied on December 28, 2015. Id. at 3. Plaintiff filed a request for a hearing on January 25, 2016, and an unfavorable hearing decision was issued by an Administrative Law Judge ("ALJ") on June 7, 2017. Id. On July 11, 2017, Claimant filed a Request for Review of Hearing Decision, and the request is still pending before the Appeals Council.[1] Id.


         Defendant does not specify under what provision of the Federal Rules of Civil Procedure it seeks to dismiss Claimant's claim. However, based on Defendant's reliance on 42 U.S.C. § 405(g), the provision conferring jurisdiction to the federal courts upon the exhaustion of the administrative process, the court presumes it intends to pursue dismissal under Rule 12(b)(1). A Rule 12(b)(1) motion challenges the court's subject matter jurisdiction, and the plaintiff bears the burden of proving that federal jurisdiction exists when challenged by a defendant. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). "Such a motion may attack the existence of subject matter jurisdiction in fact, apart from the complaint." Cape Fear River Watch, Inc. v. Duke Energy Progress, Inc., No. 7:13-CV-200-FL, 2014 WL 2573052, at *5 (E.D. N.C. 2014) (citing Adams, 697 F.2d at 1219). In that instance, "the district court is to regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). The standard of review, however, is the same as with a motion for summary judgment. Thus, "the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists. The moving party should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Id. (internal citations omitted).

         III. ANALYSIS

         Defendant has moved to dismiss Claimant's complaint for failure to state a claim upon which relief can be granted on the basis that Plaintiff has failed to exhaust his administrative remedies in accordance with 42 U.S.C. § 405(g), the statute governing the social security benefits appeal process. This court agrees.

         In order for the court to exercise jurisdiction over a decision of the Commissioner, that decision must be considered the Commissioner's "final decision." See 42 U.S.C. § 405(g)[2]("Any individual, after any final decision of the Commissioner . .. made after a hearing . . . may obtain a review of such decision by a civil action .. . .") (emphasis added); see also Mathews v. Eldridge, 424 U.S. 319, 327 (1976) (explaining "the only avenue for judicial review [of the denial of social security benefits] ¶ 42 U.S.C. § 405(g), which requires exhaustion of the administrative remedies provided under the Social Security Act as a jurisdiction prerequisite"). To obtain a judicially reviewable "final decision" regarding entitlement to SSI, the claimant must complete an administrative process. 20 C.F.R. § 416.1400(a); see generally Califano v. Sanders, 430 U.S. 99, 101 (1977) (articulating general procedures). The administrative process consists of four steps: (1) initial determination, (2) reconsideration, (3) hearing before an administrative law judge ("ALJ"), and (4) Appeals Council review. Id. § 4l6.l4OO(a)(l-4). Proceeding through these stages exhausts the claimant's administrative remedies. Only upon completion of these steps may the claimant then seek judicial review by filing an action in a federal district court. Id. § 416.1400(a)(5). Throughout the administrative review process, the onus is on the claimant to request the next administrative step. Id. § 4l6.l4OO(a)(l-4).

         Here, the undisputed evidence before the court shows that Plaintiff has initiated the administrative review process before the SSA, but the process is not yet completed. In particular, exhibits submitted by Defendant indicate the first three steps of the administrative process have been completed. Chung Decl. [DE-16-1] ¶ 3(a) (stating after Claimant's claims were granted initially, Claimant filed a request for reconsideration, which was subsequently denied, and then Claimant timely sought a hearing before the ALJ). Claimant also timely requested a review of the ALJ's decision by the Appeals Council. Id. ¶ 3(b). However, Claimant's request is currently pending before the Appeals Council, and therefore, a judicially reviewable final decision has not yet been rendered. Id; see also 20 C.F.R. § 416.1481 (explaining a claimant may file an action in Federal district court within 60 days after the date he receives either a notice from the Appeals Council denying a request for review or a decision issued by the Appeals Council). Accordingly, Claimant has failed to carry his burden in demonstrating that the court has subject matter jurisdiction pursuant to 42 U.S.C. § 405(g). See Mathews, 424 U.S. at 327 (holding that the exhaustion of administrative remedies provided for by the Social Security Act is a "jurisdictional prerequisite" for judicial review by a district court).

         Claimant's failure to exhaust administrative remedies should not be excused in this case. See Bowen v. City of New York, 476 U.S. 467, 481-85 (1986). Such a failure may be excused when (1) the claim is collateral to the claim for benefits; (2) the claimant would be irreparably harmed; and (3) relief is consistent with the policies underlying the exhaustion requirement. Hyatt v. Heckler, 807 F.2d 376, 378 (4th Cir. 1986) (citing Bowen, 476 U.S. at 481-85). A failure to exhaust administrative remedies may also be excused where "the plaintiff asserts a 'colorable' constitutional claim that is 'collateral' to the merits." Varandani v. Bowen, 824 F.2d 307, 310 (4th Cir. 1987) (citing Mathews, 424 U.S. at 330-31). Here, Claimant argued the case should not be dismissed because he felt his "case has been mishandled through the Fayetteville, NC office and the Eastern District office in Raleigh, NC" and that he requests "the opportunity to i show that pertinent evidence that would have benefitted [his] case was not given proper consideration." PL's Opp'n [DE-18]. This is insufficient and Claimant has made no allegations from which the court may conclude an exception to the exhaustion requirement applies. The claim is not collateral to, but directly challenges the benefit award, and Claimant will have an opportunity to challenge the Commissioner's decision once it is final. See 42 U.S.C. § 405(g). Finally, Claimant has not alleged a constitutional claim. Accordingly, it is recommended that Claimant's case be dismissed for failure to exhaust the administrative process as required by 42 U.S.C. § 405(g).

         IV. ...

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