Montes v. Saul

502 F.Supp.3d 832

Olga MONTES, Plaintiff,

v.Andrew A. SAUL,¹ Commissioner of Social Security, Defendant.

19cv3039 (DF)

United States District Court, S.D. New York.

Signed November 23, 2020

Lewis Bart Insler, Law Office of Lewis B. Insler, Asheville, NC, for Plaintiff.

Amanda Frances Parsels, Elizabeth J. Kim, Office of the United States Attorney, New York, NY, for Defendant.

MEMORANDUM AND ORDER

DEBRA FREEMAN, United States Magistrate Judge:

In this Social Security action, which is before this Court on consent pursuant to 28 U.S.C. § 636(c), plaintiff Olga Montes ("Plaintiff") seeks review of the final decision of SSA Commissioner Andrew A. Saul ("Defendant" or the "Commissioner") (see supra , at n.1), denying Plaintiff Social Security Disability Insurance ("SSDI") benefits and Supplemental Security Income ("SSI") benefits under the Social Security Act (the "Act"), on the ground that, for the relevant period, Plaintiff's impairments did not constitute a disability under the Act. Currently before the Court is Plaintiff's motion, made pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, for judgment on the pleadings, wherein she requests that the case be remanded for a new hearing before a properly appointed ALJ, or, alternatively, for the Court to reverse the Commissioner's decision and award her benefits. (Dkt. 18.)² Also before the Court is Defendant's cross-motion, made pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, for judgment on the pleadings affirming the Commissioner's decision. (Dkt. 25.) For the reasons set forth below, Plaintiff's motion (Dkt. 18) is granted to the extent it seeks remand for further administrative proceedings. Defendant's cross-motion (Dkt. 25) is denied.

BACKGROUND

A. Administrative History ³

Plaintiff filed an application for SSDI benefits on November 13, 2015 and for SSI benefits on December 16, 2015, alleging that she became disabled as of November 4, 2015, as a result of her conditions of severe cervical spinal stenosis, anxiety, depression, chronic migraines, and arthritis. (R. at 192-201, 239.) After her claim was initially denied on January 12, 2016, Plaintiff requested a hearing before an administrative law judge ("ALJ"). (Id. at 127-36.) On December 21, 2017, Plaintiff, represented by counsel, testified at a hearing held before ALJ Vincent Cascio (the "Hearing"). (Id. at 60-95.) At the Hearing, the ALJ also heard testimony from Ray Berger, a vocational expert. (Id. at 85-91.)

In a decision issued on April 11, 2018 (id. at 32-58), ALJ Cascio found that, although Plaintiff suffered from the severe impairments of "status post cervical fusion surgery with hardware," "degenerative changes in the lumbar spine," migraine headaches, major depressive disorder, generalized anxiety disorder, and panic disorder with agoraphobia (id. at 38), along with the nonsevere impairments of asthma and obesity (id. at 38-39), Plaintiff's impairments did not meet or equal the criteria of any impairment listed as disabling in the relevant regulations (id. at 39). The ALJ further found that Plaintiff had the residual functional capacity ("RFC") to perform sedentary work with certain limitations, and that, as jobs allowing for such limitations were available in sufficient numbers in the national economy, Plaintiff was not disabled under the Act. (Id. at 41, 52.) Following the ALJ's decision, Plaintiff sought to appeal to the Appeals Council, submitting reasons why she disagreed with the ALJ's decision, along with supplemental medical evidence. (Id. at 8-31.) On June 18, 2018, the Appeals Council notified Plaintiff that it had received her request for review (id. at 6-7), and, on February 21, 2019, it denied that request, finding that Plaintiff's reasons for seeking review did not provide a basis for changing the ALJ's decision (id. at 1-5). Thereafter, the ALJ's decision became the final decision of the Commissioner.

B. The Current Action and Pending Motions

Represented by counsel, Plaintiff timely filed the Complaint in this action on April 5, 2019, challenging the decision of the Commissioner denying her SSDI and SSI benefits. (See Complaint, dated Apr. 5, 2019 ("Compl.") (Dkt. 1).) In her Complaint, Plaintiff claimed that, under the Supreme Court's recent decision Lucia v. S.E.C., ––– U.S. ––––, 138 S. Ct. 2044, 201 L.Ed.2d 464 (2018) (" Lucia "), the ALJ who had determined her claim was not properly appointed at the time the Hearing was held or when his decision was rendered, and, thus, the matter should be remanded for a new hearing before a properly appointed ALJ. (Compl. ¶ 5.) In addition, Plaintiff maintained that she was entitled to receive both SSDI and SSI benefits due to her disability, and that the ALJ's decision, as affirmed by the Appeals Council, was legally erroneous and not supported by substantial evidence. (Id. ¶ 4.)

On September 9, 2019, Plaintiff filed a motion for judgment on the pleadings in her favor, seeking remand of the case for a new hearing before a properly appointed ALJ, or, alternatively, for reversal of the Commissioner's decision and an award of benefits (Dkt. 18), along with a memorandum of law in support (see generally Pl. Mem.). In her memorandum, Plaintiff expands upon the points raised in her Complaint, including that, under Lucia , ALJ Cascio was not a properly appointed official at the time of the Hearing or at the time he issued the decision denying Plaintiff's claims for disability benefits. (See id. , at 1, 13-18.)⁴ Plaintiff explains that, in Lucia , the Supreme Court held that the ALJs of the Securities and Exchange Commission ("SEC") are inferior officers who must be appointed consistently with the Appointments Clause of the United States Constitution, in part "because they hold ‘continuing office[s] established by law’ and exercise ‘significant discretion when carrying out ... important functions.’ " (Id. , at 13 (quoting Lucia , 138 S. Ct. at 2053 ).)⁵ According to Plaintiff, under the reasoning of Lucia , ALJs of the SSA are likewise inferior officers who must be, but, at the relevant time, had not been, appointed consistently with the Appointments Clause. (See id. ) Plaintiff noted that, "[s]ince Lucia , [the] SSA has uniformly conceded that its ALJs ... are inferior officers subject to ... the Constitution's Appointments Clause" (id. ), and that, in the wake of that decision, on July 16, 2018, the Acting Commissioner of Social Security ratified the appointments of the then-sitting ALJs of the SSA and approved those appointments as her own (see id. , at 13-14).⁶ Based on all of this, Plaintiff contends that, in this case, ALJ Cascio's hiring, which occurred prior to July 16, 2018, "was constitutionally defective, as was his decision [on April 11, 2018]; as both came before he was ‘properly’ reappointed." (Id. , at 14.) Plaintiff thus seeks the same remedy awarded in Lucia : she argues that, to cure the error, the case should be remanded for a new hearing before a different ALJ who has been properly appointed under the Constitution. (See id. )

On December 16, 2019, Defendant opposed Plaintiff's motion and filed a cross-motion for judgment on the pleadings in favor of the Commissioner (Dkt. 25), together with a supporting memorandum of law (see Memorandum of Law in Opposition to Plaintiff's Motion for Judgment on the Pleadings and in Support of the Commissioner's Cross-Motion or Judgment on the Pleadings, dated Dec. 16, 2019 ("Def. Mem.") (Dkt. 26)). In opposition to Plaintiff's motion and in support of the cross-motion, Defendant asserts, inter alia , that at no point in the administrative process did Plaintiff ever contend that ALJ Cascio was an inferior officer improperly appointed under the Appointments Clause without authority to decide Plaintiff's claims. (See id. , at 29.) While Defendant does not contest the merits of Plaintiff's Appointments Clause challenge under Lucia (see id. , at 29 n.4 ("Defendant does not argue that SSA ALJs are employees rather than inferior officers")), Defendant nevertheless argues that Plaintiff's failure to raise that issue during the administrative process forfeited such a claim (see id. , at 29-35). In making this argument, Defendant maintains that "requiring a claimant to present an Appointments Clause challenge to the agency to preserve it for judicial review ... draws support from the plain language of SSA's regulations ... [which] ... require a claimant to raise all issues – including constitutional issues – to the agency at the earliest possible juncture." (Id. , at 33 (citing, inter alia , 20 C.F.R. §§ 404.933(a)(2) ; 416.1433(a)(3)).) Moreover, Defendant contends that "the doctrines of forfeiture and waiver serve important efficiency interests, particularly in the context of [the] SSA, which issues hundreds of thousands of decisions each year." (Id. , at 34.) On this point, Defendant asserts that "[r]emanding to [the] SSA thousands of previously decided claims where the claimant failed to raise any challenge to the ALJ's appointment would further burden an already-stressed system." ( Id. ) Stressing that "[the] SSA must ensure that its adjudicative system is both fair and efficient for all claimants, including those waiting for a hearing," Defendant argues that "the Court should apply the Supreme Court's repeated instructions that a litigant must have raised a timely challenge in proceedings before the agency." (Id. , at 34-35 (citing Lucia , 138 S. Ct. at 2055 ; United States v. L.A. Tucker Truck Lines, Inc. , 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952) ).)

In her reply brief, Plaintiff disputes Defendant's contention that her Appointments Clause challenge has been forfeited or waived, arguing instead that (1) it is incorrect to say that a failure to raise an Appointments Clause challenge at the ALJ level forfeits the issue, given that the petitioner in Lucia had also failed to raise that challenge before an ALJ; and (2) more broadly, nothing in the SSA statute, the relevant...