Gilbert v. Berryhill

          JUDGE JAMES G. CARR

          INTERIM REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE

          GEORGE J. LIMBERT, UNITED STATES MAGISTRATE JUDGE

         This matter is before the undersigned on a motion to dismiss Plaintiff's Appointments Clause Claim filed by Defendant Nancy A. Berryhill, Acting Commissioner of Social Security (“Defendant”) on November 30, 2018. ECF Dkt. #12. On December 27, 2018, Plaintiff Vickie Gilbert (“Plaintiff”) filed a response to the motion. ECF Dkt. #13. On February 5, 2019, Defendant filed a reply brief. ECF Dkt. #14.

         For the following reasons, the undersigned RECOMMENDS that the Court GRANT Defendant's motion to dismiss Plaintiff's Appointments Clause Claim (ECF Dkt. #12) and DISMISS this claim from Plaintiff's complaint.

         I. FACTUAL AND PROCEDURAL HISTORY

         On September 5, 2018, Plaintiff, through counsel, filed a complaint in this Court indicating that on or about July 21, 2015, she filed a claim for a period of disability and disability insurance benefits (“DIB”) under Title II of the Social Security Act. ECF Dkt. #1 at 1. She avers that she appeared before an Administrative Law Judge (“ALJ”) on January 12, 2018 for a hearing and the ALJ issued a decision on May 30, 2018 denying her application for DIB. Id. Plaintiff further avers that she filed a timely request for review of the ALJ's decision before the Appeals Council and the Appeals Council denied her request on July 26, 2018, which made the ALJ's decision the final decision of Defendant. Id.

         Plaintiff advances two claims in her complaint. ECF Dkt. #1. The first claim alleges that the ALJ who issued the May 30, 2018 decision in her social security case was not properly appointed pursuant to the Appointments Clause of the United States Constitution in Article 2, Section 2, Clause 2. ECF Dkt. #12 at 2. She further alleges that substantial evidence is lacking for the ALJ's decision that she was not disabled under the Social Security Act. Id. Defendant's instant motion to dismiss challenges only the Appointments Clause claim of Plaintiff's complaint. ECF Dkt. #12 at 10.

         II. LAW AND ANALYSIS

         In Defendant's motion to dismiss, she contends that because Plaintiff never presented her Appointments Clause claim to the ALJ or the Appeals Council, she has forfeited the right to bring such a claim before this Court. ECF Dkt. #12 at 2. Plaintiff counters that issue exhaustion is not required in Social Security cases and even if it were, it would have been futile to raise this claim at the administrative level because the Social Security Administration issued an Emergency Message informing the ALJs that they could not discuss or make findings related to Appointments Clause challenges because such challenges were outside the scope of adjudication. ECF Dkt. #13 at 5-8.

         The undersigned recommends that the Court GRANT Defendant's motion to dismiss because Plaintiff has forfeited her right to raise the Appointments Clause claim before this Court. In Lucia v. Securities and Exchange Commission, the United States Supreme Court (“USSC”) held that the appointment of ALJs by the Securities and Exchange Commission (“SEC”) to preside over adversarial hearings violated the Appointments Clause of the United States Constitution because the ALJs were appointed by SEC staff members and not by the SEC itself, or by the President, or a court of law. - - U.S. - -, 138 S.Ct. 2044, 2053, 201 L.Ed.2d 464 (2018). The USSC explained that the Appointments Clause “lays out the permissible methods of appointing ‘Officers of the United States,' which is only by the President, a court of law, or a head of department.” Id. at 2049, 2051. The USSC held that the appropriate remedy for this Appointments Clause violation was a new hearing before an ALJ who was properly appointed. Id. at 2055.

         Social security claimants have sought to apply Lucia to their cases in order to challenge the authority of social security ALJs. In a case very similar to the one at bar, United States Magistrate Judge Knepp of this District issued a Report and Recommendation that the District Court find that Wreede forfeited her Appointments Clause challenge to the ALJ because she had failed to make this challenge during her administrative proceedings. Wreede v. Comm'r of Soc. Sec., No. 3:19cv164, 2019 WL 1324024, at *21-22 (N.D. Ohio, Mar. 25, 2019)(Report and Recommendation adopted, with no objections to Appointments Clause recommendation). Judge Carr of this District adopted Magistrate Judge Knepp's Report and Recommendation and affirmed the decision of the Social Security Commissioner. Id.

         In his Report and Recommendation, Magistrate Judge Knepp acknowledged Lucia and its holding that the SEC ALJs were “Officers of the United States” and therefore subject to the Appointments Clause appointment by only the President, courts of law, or heads of departments. 2019 WL 1324024, at *21. However, Magistrate Judge Knepp also highlighted the holding in Lucia that “with respect to Appointments Clause challenges, only ‘one who makes a timely challenge' is entitled to relief.” Id. at *21, quoting Lucia, 138 S.Ct. at 2055 (quoting Ryder v. U.S., 515 U.S. 177, 182-183 (1995). Magistrate Judge Knepp found that, unlike the plaintiff in Lucia who had timely presented an Appointments Clause challenge, Wreede did not make such a challenge at the administrative level and she therefore forfeited her Appointments Clause claim. Wreede, 2019 WL 1324024, at *22. Magistrate Judge Knepp thus recommended that the Court find that Wreede forfeited the Appointments Clause challenge in her social security case and she could not raise it before the Court. Id. He cited to a host of cases holding that even if Lucia's Appointments Clause holding applied to ALJs for the Social Security Administration, “plaintiffs forfeit the issue by failing to raise it during administrative proceedings.” Id., citing e.g. Faulkner v. Comm'r of Soc. Sec., No. 1:17cv1197-STA-egb, 2018 WL 6059403, at *2 (W.D. Tenn. Nov. 19, 2018); Page v. Comm'r of Soc. Sec., 344 F.Supp.3d 902 (E.D. Mich. 2018); Davidson v. Comm'r of Soc. Sec., No. 2:16cv102, 2018 WL 4680327, at *2 (M.D. Tenn. Sept. 28, 2018); Garrison v. Berryhill, No. 1:17-302-FDW, 2018 WL 4924554, at *2 (W.D. N.C. Oct. 10, 2018); Stearns v. Berryhill, No. C17-2031-LTS, 2018 WL 4380984, at *5 (N.D. Iowa Sept. 14, 2018); Trejo v. Berryhill, No. EDCV 17-0879-JPR, 2018 WL 3602380, at *3 n.3 (C.D. Cal. July 25, 2018).

         Additional cases in this Circuit have affirmed such a holding. In Axley v. Commissioner of Social Security Administration, No. 1:18-cv-1106-STA-cgc, 2019 WL 489998 (W.D. Tenn. Feb. 7, 2019), the United States District Court for the Western District of Tennessee denied Axley's motion to remand his social security case based upon the ALJ's lack of authority under the Appointments Clause. The Axley Court relied upon its prior holding in Faulkner, 2018 WL 6059403 (W.D. Tenn. Nov. 19, 2018), in which it denied Faulkner's motion to remand his case because he had failed to show good cause for not raising the Appointments Clause claim at the administrative level. 2019 WL 489998, at *1. The Axley Court held that Axley had failed to identify his Appointments Clause challenge at any step in the social security administrative process and he failed to show good cause for failing to do so. Id. at *3. Similarly here, Plaintiff failed to raise her Appointments Clause challenge concerning the ALJ at the administrative level.

         Axley raised an additional argument in his case that Plaintiff also raises in the instant case. He asserted that his failure to raise the Appointments Clause claim before the ALJ should have been excused because it would have been futile to do. 2019 WL 489998, at *2. Like Plaintiff in the instant case, Axley cited to an Emergency Message issued by the Social Security Administration to ALJs in January of 2018 directing them to merely acknowledge Appointments Clause challenges “[b]ecause SSA lacks the authority to finally decide constitutional issues such as these.” Social Security Administration EM-18003, Important Information Regarding Possible Challenges to the Appointment of Administrative Law Judges in SSA's Administrative Process Id. Axley argued that had he raised this claim before the ALJ, the ALJ would have merely noted the challenge and not have ruled on it because of this emergency message. Id. The Axley Court nevertheless found that “this would at least have preserved the issue.” Id. Similarly in the instant case, “Plaintiff failed to make any noise regarding her Appointments Clause challenge during the administrative proceedings.” Flack v. Comm'r of Soc. Sec., No. 2:18-cv-501, 2018 WL 6011147, at *3 (S.D. Ohio Nov. 16, 2018)(since plaintiff did not raise Appointments Clause challenge before the ALJ or Appeals Council, ...