Case Name in Social Security Case - Unavailable

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
DIEU VAN LE, )
)
Plaintiff, )
)
vs. )
)
KILOLO KIJAKAZI, Acting Commissioner, )
Social Security Administration, )
) No. 3:21-cv -0021-HRH
Defendant. )
_______________________________________)
O R D E R
Motion to Dismiss1
Defendant Kilolo Kijakazi, Acting Commissioner of the Social Security Admini-
stration, moves to dismiss all claims in plaintiff’s complaint. Plaintiff Dieu Van Le has
not filed an opposition. Oral argument was not requested and is not deemed necessary.
Background
Plaintiff Dieu Van Le applied to the Social Security Administration (SSA) for
Supplemental Security Income (SSI) and Disability Insurance Benefits (DIB) in 1996.2
SSA awarded him both types of benefits.3 He received SSI payments from December
1Docket No. 21.
2Affidavit of Renee Hall at 2, ¶ 4, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
3Id.
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1996 through March 1997 and has not received SSI benefits since March 1997.4 He
began to receive DIB payments in February 1997.5
Plaintiff was incarcerated on February 24, 2008, and convicted on July 24, 2008.6
He was released from prison on August 22, 2017, but re-confined on September 11, 2017,
and convicted on September 26, 2017.7 He was released on July 12, 2019.8
Despite his imprisonment, plaintiff continued to receive DIB until June 2012,
when SSA learned that he was incarcerated.9 On August 14, 2012, SSA sent him a notice
informing him that he became ineligible for benefits in July 2008 because he was at that
time imprisoned for conviction of a crime.10 The notice also informed plaintiff that he
had incurred an overpayment of $52,569.00 for his receipt of benefits during this period
of ineligibility.11
The State of Alaska filed criminal charges against plaintiff related to his fraudulent
receipt of the overpaid SSA funds.12 Based on these charges, plaintiff entered into a plea
4Id.
5Id.
6Id. at 2, ¶ 5.
7Id.
8Id. at 2-3, ¶ 5.
9Id. at 3, ¶ 6.
10Affidavit of Renee Hall at 3, ¶ 7, August 2012 Notice at 7, Exhibit 1, Motion to
Dismiss, Docket No. 21-1.
11Affidavit of Renee Hall at 3, ¶ 7, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
12Affidavit of Renee Hall at 4, ¶ 10, Judgment and Order of Commitment/Proba-
tion at 31, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
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agreement with the State.13 On September 24, 2018, he pleaded guilty to one count of
second-degree theft, a felony under Alaska law,14 and was ordered to pay restitution to the
SSA in the amount of $50,533.00.15 He was “required to have $350 per month garnished
by the Social Security Administration from his monthly Supplemental Security Income
(“SSI”) checks during his period of probation.”16
On September 3, 2019, SSA sent plaintiff a notice informing him that his benefits
could not be paid as they would be withheld in their entirety, beginning in September
2019, in order to recover the overpayment.17 In November 2019, plaintiff submitted a
“Request for Reconsideration” to the SSA in which he asked that only $350.00 per month
be withheld from his benefit payments.18 In February 2020, SSA sent plaintiff a notice
informing him that it was dismissing his request for reconsideration, and in April 2020,
SSA sent plaintiff another notice stating that it was withholding the entirety of Le’s
benefits until his overpayment was satisfied.19
13Affidavit of Renee Hall at 4, ¶ 10, Judgment and Order of Commitment/Proba-
tion at 31-37, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
14Alaska Statute § 11.46.130(c).
15Affidavit of Renee Hall at 4, ¶ 10, Restitution Judgment at 30, Judgment and
Order of Commitment/Probation at 31-37, Exhibit 1, Motion to Dismiss, Docket No.
21-1.
16Affidavit of Renee Hall at 4, ¶ 10, Judgment and Order of Commitment/Proba-
tion at 35, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
17September 2019 SSA Letter to Le at 42, Exhibit 1, Motion to Dismiss, Docket
No. 21-1.
18Affidavit of Renee Hall at 5, ¶ 13, Request for Reconsideration at 45-46,
Exhibit 1, Motion to Dismiss, Docket No. 21-1.
19Affidavit of Renee Hall at 5, ¶¶ 14-15, February 2020 SSA Letter to Le at 47,
April 2020 SSA Letter to Le at 49, Exhibit 1, Motion to Dismiss, Docket No. 21-1.
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Plaintiff now seeks review of the Commissioner’s decision to withhold the entirety
of his benefits “to recover an overpayment on his record.”20 He believes that the Com-
missioner should withhold only $350.00 per month for application “to any overpayment,”
the amount “agreed to” in his 2018 Alaska criminal case.21 He contends that the Commis-
sioner breached this “agreement.”22 Additionally, plaintiff asserts that the Commissioner
denied him due process because the Commissioner has not responded to his claim that he
is owed back payment of DIB benefits for a seven-year period, from July 2012 to July
2019.23
Discussion
By his complaint, plaintiff seeks “review of social security disability income deci-
sions.”24 Jurisdiction is asserted on the basis 42 U.S.C. § 405(g).25 Prior to defendants’
appearance,26 the court entered its standard social security scheduling order which called
upon defendants to serve and file a certified copy of the agency record and established a
briefing schedule.27 Defendants sought and were granted extensions of time to respond to
20Complaint at 2, 5, ¶¶ 3, 11, Docket No 1.
21Id. at 5-8, ¶¶ 11-12, 14-15, 17-18.
22Id. at 7-8, ¶ 17.
23Id. at 7-8, ¶¶ 16, 19.
24Docket No. 1.
25Complaint at 2, ¶ 3, Docket No. 1.
26Docket No. 7.
27Docket No. 6.
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plaintiff’s complaint.28 Defendants’ response was then due on or before September 23,
2021. On September 23, 2021, defendants moved to dismiss plaintiff’s complaint pursu-
ant to Rule 12(b)(6), Federal Rules of Civil Procedure.29
Defendants’ motion is supported by the declaration of Renee Hall, social security
specialist, and by various documents, namely letters from the SSA to plaintiff and to his
attorney, plaintiff’s criminal and restitution judgments from his 2018 Alaska criminal
case, and plaintiff’s Request for Reconsideration.
“To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain suffi-
cient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Zixiang Li v. Kerry, 710 F.3d 995, 999 (9th Cir. 2013) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)). “A claim is facially plausible ‘when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.’” Id. (quoting Iqbal, 556 U.S. at 678). “The plausibil-
ity standard requires more than the sheer possibility or conceivability that a defendant has
acted unlawfully.” Id. “Where a complaint pleads facts that are merely consistent with a
defendant’s liability, it stops short of the line between possibility and plausibility of
entitlement to relief.” Id. (quoting Iqbal, 556 U.S. at 678). “[T]he complaint must
provide ‘more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do.’” In re Rigel Pharm., Inc. Sec. Litig., 697 F.3d 869, 875 (9th
Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “In evaluat-
28Docket Nos. 9, 12, and 19.
29Defendants state that they move for relief pursuant to “Federal Rule of
Evidence 12(b)(6).” The court assumes that this is a typographical error. No such
evidentiary rule exists and the relief defendants seek is described at Civil Rule 12(b)(6).
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ing a Rule 12(b)(6) motion, the court accepts the complaint’s well-pleaded factual allega-
tions as true and draws all reasonable inferences in the light most favorable to the plain-
tiff.” Adams v. U.S. Forest Serv., 671 F.3d 1138, 1142-43 (9th Cir. 2012). “However,
the trial court does not have to accept as true conclusory allegations in a complaint or
legal claims asserted in the form of factual allegations.” In re Tracht Gut, LLC, 836 F.3d
1146, 1150 (9th Cir. 2016).
In deciding defendants’ motion to dismiss, the court relies primarily upon the
allegations of plaintiff’s complaint and defendants’ memorandum of law supporting its
motion to dismiss.
In his complaint, plaintiff does not contest the basis for defendants’ withholding
his DIB payments. Rather, plaintiff’s primary complaint is that defendants refused to
limit their recapture of DIB payments, to which he was not entitled during his incarcera-
tion, to $350.00 per month. Defendants contend that plaintiff’s complaint must be dis-
missed, first because what plaintiff requests by way of relief is a statutory impossibility.30
Second, defendants contend that plaintiff’s breach of contract claim must be dismissed
because neither defendants nor any of its authorized agents were a party to plaintiff’s
agreement with the State of Alaska.31 Third, defendants argue that no due process viola-
tion occurred when the plaintiff did not receive back benefits while he was incarcerated
because he “was statutorily ineligible for any social security benefits by nature of his
conviction and incarceration.”32
30Motion to Dismiss, Docket No. 21 at 2.
31Id.
32Id.
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For the reasons set out below, the court concludes that the claims made in plain-
tiff’s complaint are not plausible.
Title 20, Section 404.502, of the Code of Federal Regulations provides that if the
SSA determines that an individual has been overpaid the proper amount of DIB benefits,
then the agency will make adjustments against that person’s monthly benefits in order to
recover the overpayment. If withholding the entirety of a person’s benefits would deprive
the person of income needed for normal and necessary living expenses, then the agency
may withhold less than the entirety of that person’s benefit each month. 20 C.F.R.
§ 404.502(c)(1). But if the individual’s “intentional false statement or representation, or
willful concealment of, or deliberate failure to furnish, material information” caused the
overpayment, then the method of recovery set forth at subsection (c)(1) is unavailable;
“no benefit for any month and no lump sum is payable to such individual . . . until an
amount equal to the amount of overpayment has been withheld or refunded.” 20 C.F.R.
§ 404.502(a)(1), (c)(2).
In his complaint, plaintiff concedes important material facts, including that he
incurred an overpayment of DIB benefits and the amount thereof, and that the SSA can
properly withhold certain of his DIB payments to recoup the overpayment. Defendants
argue that because plaintiff does not contest that he received his DIB benefits fraudu-
lently, he fails to show that the SSA can statutorily withhold less than his full monthly
benefits in order to recover the overpayment.33 While plaintiff alleges that the SSA
should withhold less than his full monthly payment, he pleads no facts which could lead
the court to conclude that the SSA is statutorily permitted to withhold less than his full
33Motion to Dismiss at 7-8, Docket No. 21.
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monthly benefit payment under 20 C.F.R. § 404.502(c)(1) and (2). That is, he does not
allege that the withholding of the entirety of his benefits would deprive him of income
needed for normal and necessary living expenses, nor that he was without fault when he
caused the overpayment. The factual allegations underling plaintiff’s claim do not con-
stitute statutorily permissible grounds for the SSA to withhold less than his full monthly
benefit. His complaint therefore lacks “a cognizable legal theory or . . . sufficient facts
alleged under a cognizable legal theory.” William Morris Endeavor Entm’t, LLC v.
Writers Guild of Am.,W., Inc., 432 F. Supp. 3d 1127, 1135 (C.D. Cal. 2020) (citing
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988)). Plaintiff does not
state a plausible claim for relief sufficient to survive a 12(b)(6) motion to dismiss.
Plaintiff’s plea agreement in his 2018 Alaska criminal case does not prevent the
defendants from withholding the entirety of plaintiff’s DIB benefits each month. When
deciding a 12(b)(6) motion to dismiss, the court may “consider materials other than facts
alleged in the complaint and documents that are made a part of the complaint” where “(1)
the authenticity of the materials is not disputed and (2) the plaintiff has alleged the exist-
ence of the materials in the complaint or the complaint ‘necessarily relies’ on the
materials,” or where the matters constitute “matters of public record” subject to judicial
notice. William Morris Endeavor Entm’t, LLC, 432 F. Supp. 3d at 1135. Here, the
authenticity of the judgment of conviction and correlative restitution judgment from
plaintiff’s 2018 Alaska criminal case are not disputed and plaintiff explicitly relies on the
provisions of the “judgment” entered in this case when he quotes from certain provisions
in the judgment of conviction.34 The court may therefore also properly consider these
34See Complaint at 5, 8, ¶¶ 11, 18, Docket No. 1.
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materials. It is clear that defendants were not parties to the State of Alaska criminal pro-
ceedings, nor parties to the plea agreement between the State and plaintiff which gave rise
to plaintiff’s $350.00 per month restitution obligation.
Defendants are probably correct that there is a sovereign immunity problem with
plaintiff’s contract claim. Notwithstanding, plaintiff’s contract claim is also without
merit. Plaintiff’s judgment of conviction contains one provision referencing DIB pay-
ments, which states: plaintiff’s “entry into the present Rule 11 Agreement is based on the
representation made to him that his future Supplemental Security Income checks and/or
Social Security Disability Insurance benefits, or any potential back payment of such bene-
fits, will not be revoked or denied based on his plea in the present matter.”35 However,
the provisions of both the judgments of restitution and conviction regarding garnishment
state that only plaintiff’s SSI payments will be garnished and make no reference to his
DIB payments. In his complaint, plaintiff only seeks review of the SSA’s decision to
withhold the entirety of his DIB payments. Even if defendants were somehow bound by
plaintiff’s plea deal with the State of Alaska, which they are not, plaintiff has alleged no
facts showing that defendants breached any contractual agreement regarding payment of
his DIB benefits. In short, defendants’ decisions made under 20 C.F.R. § 404.502 are not
in any fashion limited by State of Alaska proceedings against the plaintiff.
Plaintiff’s claim that the SSA violated his due process rights is also not plausible.
Plaintiff only briefly alleges that he was denied due process at two points in his com-
plaint. He initially contends that he was “denied due process as required by the Constitu-
35Judgment and Order of Commitment/Probation at 34, Exhibit 1, Motion to
Dismiss, Docket No. 21-1.
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tion of the United States,” without any further explanation.36 Plaintiff later claims that the
SSA’s “failure to address Mr. Le’s claims for back payment was a denial of due process,”
again without any further explanation.37 The court is not required to accept as true plain-
tiff’s unsupported legal conclusions. Iqbal, 556 U.S. at 678-79. Here, it is abundantly
clear from plaintiff’s complaint that there were considerable problems with communica-
tion between plaintiff and SSA personnel. But plaintiff does not explain how or when
some procedure to which he was entitled was violated. Plaintiff has not alleged “suffi-
cient facts . . . under a cognizable legal theory” to defeat a 12(b)(6) motion to dismiss this
claim. William Morris Endeavor Entm’t, LLC, 432 F. Supp. 3d at 1135. Plaintiff’s due
process claim is therefore not plausible.
Conclusion
Defendants’ motion to dismiss plaintiff’s complaint is granted. Leave to amend
was not sought by plaintiff. Moreover, on the present record the court believes any
attempt at amendment would be futile.
DATED at Anchorage, Alaska, this 24th day of November, 2021.
/s/ H. Russel Holland
United States District Judge
36Complaint at 7, ¶ 17, Docket No. 1.
37Id. at 8, ¶ 19.
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