Eisenberg v. US Social Security Administration

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Leeland E. Eisenberg
v. 	Case No. 17-cv-122-JL
Nancy A. Berryhill, Acting
Commissioner, Social
Security Administration
REPORT AND RECOMMENDATION
Pro se plaintiff Leeland Eisenberg initially brought this
action in New Hampshire Circuit Court, seeking to recover
$659.70 that he believes the Social Security Administration
(“SSA”) improperly withheld from him in September 2016. 	SSA
removed the matter to this court and moved to dismiss on the
basis that Eisenberg did not exhaust his administrative
remedies. 	Eisenberg objected to that motion and filed a cross
motion for summary judgment. 	Both motions were referred to the
undersigned magistrate judge for proposed findings of fact and a
recommendation as to disposition.
On October 20, 2017, the undersigned issued a Report and
Recommendation concluding that the court lacked subject-matter
jurisdiction over Eisenberg’s claim. 	Rather than dismiss the
action, however, the court recommended that it be remanded back
to the New Hampshire Circuit Court. 	The court further
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recommended that both the motion to dismiss and cross motion for
summary judgment be denied as moot.
SSA now moves for reconsideration, arguing that the court
erred in recommending that this matter be remanded. 1 	Concluding
that its previous Report and Recommendation was based on an
error of law, the court recommends that SSA’s motion
reconsideration be granted. 	The court further recommends, for
the reasons stated below, that the district judge grant SSA’s
motion to dismiss.
A. 	Motion for Reconsideration
Reconsideration is “an extraordinary remedy which should be
used sparingly.” Palmer v. Champion Mtg., 465 F.3d 24, 30 (1st
Cir. 2006) (citation and internal quotation marks omitted).
Reconsideration is appropriate “only in a limited number of
circumstances: if the moving party presents newly discovered
evidence, if there has been an intervening change in the law, or
if the movant can demonstrate that the original decision was
based on a manifest error of law or was clearly unjust.” 	United
States v. Allen, 573 F.3d 42, 53 (1st Cir. 2009).
1 Styled an objection, the district judge construed SSA’s
filing as a motion for reconsideration and referred it to the
undersigned for consideration. 	See Nov. 20, 2017 Endorsed
Order.
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SSA argues that this court’s earlier Report and
Recommendation was based on a manifest error of law.
Specifically, SSA contends that this court has an independent
basis for jurisdiction over this action under 28 U.S.C. § 1442,
which allows “[t]he United States or any agency thereof or any
officer (or any person acting under that officer) of the United
States or any agency thereof, in an official or individual
capacity” to remove to federal court any action commenced in
state court. 	Id. § 1442(a)(1). 	SSA further argues that it has
raised a sovereign immunity defense, and that such defenses,
when raised by the United States government, must be heard in a
federal forum. 	Finally, SSA contends that federal courts have
exclusive jurisdiction to review federal agency action. 	Thus,
SSA argues that the New Hampshire Circuit Court “has no
jurisdiction to decide any issue in this case.” 	Doc. no. 11 at
5.
The court concludes, largely for the reasons stated in
SSA’s motion, that the New Hampshire Circuit Court does not have
jurisdiction to hear this action. 	Thus, the court erred in
recommending that this matter be remanded to that court for
disposition. 	This does not end the court’s inquiry, however, as
the court still must determine whether it lacks jurisdiction
over this matter based on the derivative jurisdiction doctrine.
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Under that doctrine, “[w]here the state court lacks jurisdiction
of the subject matter or of the parties, the federal court
acquires none, although in a suit originally brought in a
federal court it would have had jurisdiction.” 	State of Minn.
v. United States, 305 U.S. 382, 389 (1939).
Congress has expressly abrogated the derivative
jurisdiction doctrine for cases removed under 28 U.S.C. § 1441.
See id. § 1441(f). 	But courts have found, particularly in the
wake of the 2002 amendment to that section, that the doctrine
still applies to cases removed under § 1442. 	See, e.g., Scallop
Shell Nursing & Rehab. v. Gaffett, No. 13-cv-471 ML, 2013 WL
5592736, at *5 (D.R.I. Oct. 10, 2013) (citing cases); 14 Charles
A. Wright, et al., Federal Practice and Procedure, § 3655 (4th
ed.) (“The amendments to Section 1441, eliminating the
derivative jurisdiction bar, left Section 1442 untouched.”).
Thus, before the court may consider SSA’s motion to dismiss, it
must first determine under which of these provisions SSA removed
this matter.
In its notice of removal, SSA invokes both § 1441 and §
1442(a)(1). 	See doc. no. 1 ¶ 3. 2 	Other courts have concluded
2 The motion for reconsideration primarily focuses on §
1442(a)(1), but does note in a footnote that “[t]he removal
notice cited 28 U.S.C. § 1441 because the district courts have
exclusive jurisdiction to review the [SSA] Commissioner’s
decisions . . . .” Doc. no. 11 at 1 n. 1.
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that when there is an independent basis for removal under each
provision, the derivative jurisdiction doctrine does not apply.
See, e.g., Bloch v. Exec. Office of the President, 164 F. Supp.
3d 841, 854 (E.D. Va 2016), reconsideration denied sub nom.
Bloch v. Exec. Office of President, No. 1:15-cv-1146, 2016 WL
8224913 (E.D. Va. Mar. 10, 2016) (“Because defendants removed
Count IV, in part, based on § 1441(a), § 1441(f) confers subject
matter jurisdiction.”). 	Here, SSA had an independent basis to
remove this action under § 1441 based on this court’s federal-
question jurisdiction. 	Such jurisdiction extends to “all civil
actions arising under the Constitution, laws, or treaties of the
United States.” 	28 U.S.C. § 1331. 	Because Eisenberg’s claims
are predicated on his interest in obtaining benefits to which he
contends he is entitled under the Social Security Act (the
“Act”), they “arise under” that act. 	See Justiniano v. Soc.
Sec. Admin., 876 F.3d 14, 22 (1st Cir. 2017). 3 	The court may
therefore consider SSA’s motion to dismiss on the merits.
3 The Supreme Court has held that the Act “precludes
federal-question jurisdiction in an action challenging denial of
claimed benefits in an action challenging denial of claimed
benefits” and that “[t]he only avenue for judicial review is 42
U.S.C. § 405(g), which requires exhaustion of the administrative
remedies provided under the Act as a jurisdictional
prerequisite.” 	Mathews v. Eldridge, 424 U.S. 319, 327 (1976).
The court is unaware of any precedent construing this holding to
mean that a Social Security claim cannot be removed under § 1441
unless exhaustion has occurred. 	Indeed, as noted above, the
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SSA’s motion for reconsideration (doc. no. 11) should
accordingly be granted in full.
B. 	Motion to Dismiss
SSA moves to dismiss this action pursuant to Federal Rule
of Civil Procedure 12(b)(1) for lack of subject-matter
jurisdiction. 	In considering such a motion, the court accepts
as true all well-pleaded factual allegations in the complaint
and draws all reasonable inferences therefrom in the plaintiff’s
favor. 	See Reddy v. Foster, 845 F.3d 493, 497 (1st Cir. 2017).
The court may also consider other materials and evidence in the
record “whether or not the facts therein are consistent with
those alleged in the complaint.” 	Id. 	When subject-matter
jurisdiction is challenged, the party invoking jurisdiction has
First Circuit has suggested that claims “arise under” the Act,
such that a court can reach the exhaustion issue, when a
plaintiff seeks to recover benefits to which he believes he is
entitled under the Act. 	See Justiniano, 876 F.3d at 22. 	But
regardless of whether exhaustion is a prerequisite to removal
under § 1441, the results would be the same here if Eisenberg
failed to exhaust his administrative remedies. 	If exhaustion is
not a prerequisite to removal under § 1441, then the court would
lack subject-matter jurisdiction based on Eisenberg’s failure to
exhaust. 	If exhaustion is a prerequisite, then this case could
only be removed under § 1442, leaving this court without
subject-matter jurisdiction based on the derivative jurisdiction
doctrine. 	Either way, if Eisenberg has failed to exhaust his
administrative remedies, then this case must be dismissed for
lack of subject-matter jurisdiction.
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the burden of showing that it exists. 	Acosta–Ramirez v. Banco
Popular de P.R., 712 F.3d 14, 20 (1st Cir. 2013).
SSA contends that Eisenberg has failed to exhaust his
administrative remedies. 	Specifically, SSA contends that its
decision to suspend Eisenberg’s September 2016 Supplementary
Social Security Income (“SSI”) did not constitute a final
decision of the Commissioner that is reviewable by this court.
It is well established that exhaustion is typically a
jurisdictional prerequisite to judicial review under the Act.
See Mathews v. Eldridge, 424 U.S. 319, 327 (1976) (“The only
avenue for judicial review [under the Social Security Act] is 42
U.S.C. s 405(g), which requires exhaustion of the administrative
remedies provided under the Act as a jurisdictional
prerequisite.”). 	The Act provides that “[a]ny individual, after
any final decision of the Commissioner of Social Security to
which he was a party, . . . may obtain a review of that
decision” in a federal district court. 	42 U.S.C. § 405(g).
“This specific statutory grant of jurisdiction is the only
avenue that Congress has provided for review of a decision
denying social security benefits.” 	Wilson v. Sec'y of Health &
Human Servs., 671 F.2d 673, 677 (1st Cir. 1982) (citing
Weinberger v. Salfi, 422 U.S. 749 (1975)). 	“And, the ‘final
decision’ required to invoke this jurisdiction has been
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authoritatively interpreted to mean ‘that the administrative
remedies provided by the Secretary be exhausted.’” 	Id. (quoting
Mathews, 424 U.S. at 328).
SSA has demonstrated that Eisenberg failed to exhaust his
administrative remedies here. 	SSA provides, as attachments to
its motion, two Notices of Planned Action that it provided
Eisenberg with respect to his September 2016 SSI benefits. 	See
doc. no. 3-3 at 1; doc. no. 3-8 at 1. 	Both notices indicate
that Eisenberg had a right to appeal SSA’s decision and provide
information on how to do so. See doc. no. 3-3 at 2-4; doc. no.
3-8 at 2-4. 	But according to the SSA’s Acting Chief of Court
Case Preparation and Review Branch 2 of the Office of Appellate
Operations, Office of Disability Adjudication and Review, whose
declaration SSA attaches, Eisenberg never appealed either
determination. 	Doc. no. 3-9 ¶ 3(a). 	These documents support
the conclusion that Eisenberg never received a final agency
decision that this court may review.
Eisenberg’s arguments in response to SSI’s motion are
unavailing. 	Eisenberg contends that he sent several letters to
the office supervisor/manager of the Social Security
Administration, 70 Commercial Street, Suite 100, Concord, New
Hampshire 03301, seeking informal remedies and actual appeals.
Eisenberg has provided no evidence to support this contention,
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however, and it is inconsistent with the documentation provided
by SSA. 	Additionally, even if the court were to assume the
truth of this assertion, it does not demonstrate that Eisenberg
ever received a final agency decision from SSA. 	Eisenberg’s
remaining arguments go to the merits of his claim, which the
court cannot reach absent subject-matter jurisdiction. 	Thus,
nothing in Eisenberg’s objection undercuts the conclusion that
Eisenberg did not exhaust his claims. 4
In sum, the court concludes that Eisenberg has not
exhausted his administrative remedies. 	As such, this court is
without subject-matter jurisdiction over this action. 	SSA’s
motion to dismiss (doc. no. 3) should accordingly be granted.
4 Though not raised by either party, the court notes that
this is not a case where the judicial waiver of exhaustion is
appropriate. 	In determining whether to waive the exhaustion
requirements, courts consider (1) whether the claim is “entirely
collateral to the claim for benefits that would be the subject
of the administrative appeals process”; (2) whether the
plaintiff has “presented a colorable claim that [he] will be
irreparably harmed absent judicial waiver of exhaustion”; and
(3) “the practical considerations that bear on waiving the
exhaustion requirement.” 	Justiniano, 876 F.3d at 27, 28, 29.
While Eisenberg arguably makes reference to due process in his
objection to the motion to dismiss, his claim is firmly one for
the denial of SSI benefits. 	Similarly, Eisenberg has not
articulated why the suspension of his September 2016 benefits
would cause him irreparable harm. 	And finally, there is no
indication that Eisenberg’s claim presents any of the
circumstances courts typically consider when analyzing the
“practical considerations that bear on waiving the exhaustion
requirement.” 	See id. at 29-31 (discussing some of those
circumstances). 	Thus, there is no cause to waive the exhaustion
requirements in this case.
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Conclusion
For the above-stated reasons, the court recommends that the
district judge grant SSA’s motion for reconsideration (doc. no.
11) and grant SSA’s motion to dismiss (doc. no. 3). 	Any
objections to this Report and Recommendation must be filed
within fourteen days of receipt of this notice. 	See Fed. R.
Civ. P. 72(b)(2). 	The fourteen-day period may be extended upon
motion. 	Failure to file specific written objections to the
Report and Recommendation within the specified time waives the
right to appeal the district court’s order. 	See Santos-Santos
v. Torres-Centeno, 842 F.3d 163, 168 (1st Cir. 2016); Fed. R.
Civ. P. 72(b)(2).
__________________________
Andrea K. Johnstone
United States Magistrate Judge
February 5, 2018
cc: 	Leeland Eisenberg, pro se
Robert J. Rabuck, Esq.
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