Smith v. Berryhill, Case No. C17-647 RAJ

MATTHEW DAVID SMITH, Claimant, v. NANCY A. BERRYHILL,Acting Commissioner of Social Security, Defendant.

Case No. C17-647 RAJ

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA

February 20, 2018

ORDER DENYING COMMISSIONER'S MOTION TO DISMISS AND DIRECTING ANSWER BE FILED

The Commissioner filed the instant motion under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Dkt. 5. The Commissioner included matters outside the pleadings, namely the Declaration of Nancy Chung, that the Court found necessary to consider prior to ruling on the motion.¹ Mr. Smith submitted rebutting evidence outside the pleadings in the form of records and his declaration. The Commissioner had an opportunity to reply to Mr. Smith's response. As such, the Court finds the parties have had a reasonableopportunity to present all the material that is pertinent to the motion.

The Commissioner contends that the Court lacks jurisdiction to review Administrative Law Judge (ALJ) Ilene Sloan's order of dismissal because Mr. Smith failed to exhaust his administrative remedies and has not presented a colorable constitutional claim of due process violations. See Dkt. 5-1 at 22-25.

For the reasons set forth below, the Court denies the Commissioner's motion.

BACKGROUND

Mr. Smith filed for disability insurance and supplemental security income benefits on October 16, 2013. Dkt. 5-1 at 2. The Social Security Administration denied his application initially on March 3, 2014. Dkt. 5-1 at 3.

On April 3, 2014, Mr. Smith filed a Request for Hearing, stating that he has schizophrenia, bipolar disorder, and attention deficit disorder. Dkt. 5-1 at 5. At the time, Mr. Smith was living at a homeless shelter on Highland Avenue in Shreveport, Louisiana. Smith Decl., Dkt. 12-5 at 1. He lived at the Highland Avenue address "for two or three months," which suggests that, at the latest, he stopped living there by early July 2014. Id. When Mr. Smith "was discharged [he] was told that [he] could not come back." Id. After that, Mr. Smith was homeless for an unspecified period of time, and spent time in various homeless shelters and medical facilities in Shreveport and in Arkansas. Id. at 2.

On September 17, 2014, the Administration mailed a Notice of Hearing to Mr. Smith at the Highland Avenue address, advising him of a hearing scheduled for December 8. Dkt. 5-1 at 22. The notice contained "a reminder that failing to appear at his scheduled hearing without good cause could result in dismissal of the claimant's request for hearing." Id. The notice also requested Mr. Smith return an enclosed Acknowledgement of Receipt form. Id. TheAcknowledgement of Receipt form was not returned. Id.

Fifteen days after the notice was mailed, on October 2, Mr. Smith was admitted to the University of Arkansas for Medical Sciences, where treatment notes state that he reported he "was at [Recovery Centers of Arkansas] for the past two weeks...." Dkt. 12-4 at 14.

On October 17, Mr. Smith went to an Administration field office in Little Rock, Arkansas, where he remembers an employee telling him that he "would need to wait until April 2015 until [he] heard about [his] hearing." Dkt. 12-5 at 2.

On November 24, the Administration mailed a Notice of Hearing Reminder to the Highland Avenue address. Dkt. 5-1 at 22. The reminder notice again warned Mr. Smith that failing to appear at the time and place of his hearing without good cause could result in dismissal of his request for hearing. Dkt. 12-1 at 90. The reminder notice included another Acknowledgement of Receipt form with a request to return it and, again, it was not returned. Dkt. 5-1 at 22.

Mr. Smith did not appear at the hearing on December 8. Dkt. 5-1 at 23. On December 10, a Notice to Show Cause for Failure to Appear was mailed to the Highland Avenue address. Dkt. 5-1 at 12. On December 17, this notice was returned as undeliverable. Dkt. 5-1 at 12. "All reasonable efforts, including a check of new telephone listings," failed to locate Mr. Smith. Dkt. 5-1 at 12. On January 16, 2015, ALJ Charles Lindsay dismissed Mr. Smith's April 2014 hearing request for failure to appear. Dkt. 5-1 at 11-12.

On April 2, 2015, Mr. Smith, who had moved to Washington in early 2015, filed a Request for Review of Hearing Decision/Order. Dkt. 12-5 at 2; Dkt. 5-1 at 13. He wrote "I'm still disabled and am Homeless and didn't get a notice." Dkt. 5-1 at 13. Although Mr. Smith's request was not timely filed, on October 23, 2015, the Appeals Council found that "good cause isshown for late filing[,]" citing 20 C.F.R. §§ 404.911 and 416.1411, and granted the request for review. Dkt. 5-1 at 17. The Appeals Council did not identify on what grounds it found good cause for late filing, but the regulations cited gave examples of "circumstances where good cause may exist[,]" including "any physical, mental, educational, or linguistic limitations" that prevented the claimant from filing timely or when the claimant "did not receive notice of the determination or decision." 20 C.F.R. §§ 404.911(a)(4), (b)(7); 416.1411(a)(4), (b)(7).

In a letter dated December 3 and received December 8, 2015, the Department of Social and Health Services of the State of Washington (DSHS) informed the Administration that Mr. Smith "has moved and he is presently getting his mail at: General Delivery, Bellingham WA 98225." Dkt. 12-1 at 55. The letter described mental health hospitalizations and emergency room visits in October and November at Fairfax Hospital in Everett, Northsound in Sedro Woolley, and St. Joseph in Bellingham, and asked the Administration to request records from those institutions. Id. The letter also stated that Mr. Smith "does not have a SSI attorney at this time." Id. The Administration did not request the records.

On remand from the Appeals Council, ALJ Ilene Sloan dismissed Mr. Smith's hearing request on March 18, 2016. Dkt. 5-1 at 22-25. ALJ Sloan "considered the mailbox rule" to determine that "[p]resumably, the claimant received the Notice of Hearing and Reminder notices that were mailed on September 17, 2014 and November 24, 2014 respectively." Dkt. 5-1 at 24.

The decision also stated that ALJ Sloan "considered the factors set forth in 20 CFR 404.957(b)(2) and 416.1457(b)(2) and finds that there is no good cause for the claimant's failure to appear at the time and place of hearing." Id. The cited regulations require the ALJ, in determining good cause, to "consider any physical, mental, educational, or linguistic limitations" the claimant may have.

On May 3, 2016, Mr. Smith requested review of the dismissal. Dkt. 12-1 at 51, 177. Mr. Smith appears to have obtained counsel around that time. Dkt. 12-1 at 180 (letter from LAW Advocates to Appeals Council dated June 13, 2016). In a declaration dated September 26, 2016, Mr. Smith stated that he was "inpatient" at UAMS Medical Center in Little Rock, Arkansas, in October 2014 and asked the Administration for an extension so he could provide medical records that he expected to receive in mid-October. Dkt. 12-1 at 174-75.

On February 16, 2017, the Appeals Council issued a letter stating it had considered Mr. Smith's September declaration, but denied his request for review. Dkt. 5-1 at 26-27. On April 25, Mr. Smith's counsel requested the denial of review be vacated, submitting evidence that the Highland Avenue address was a homeless shelter, and on May 19, counsel filed medical records from 2014 supporting Mr. Smith's contention that he did not receive hearing notices. Dkt. 12 at 4.

DISCUSSION

A. Due Process

The Court has jurisdiction pursuant to statute to review only a "'final decision of the [Administration] made after a [statutorily mandated] hearing.'" Dexter v. Colvin, 731 F.3d 977, 980 (9th Cir. 2013) (quoting Califano v. Sanders, 430 U.S. 99, 109 (1977)); 42 U.S.C. §405(g). An ALJ's decision whether good cause has been shown, to entertain an untimely hearing request or to reopen an earlier application, is strictly discretionary, not final, and thus is not generally reviewable by a district court. Id. However, a discretionary decision by the Administration that is not a final decision may be subject to an exception where the Commissioner's decision "is challenged on constitutional grounds." Evans v. Chater, 110 F.3d 1480, 1482 (9th Cir. 1997) (citing Sanders, 430 U.S. at 109); 42 U.S.C. § 405(g). This "exception applies to any colorableconstitutional claim of due process violation that implicates a due process right either to a meaningful opportunity to be heard or to seek reconsideration of an adverse benefits determination." Udd v. Massanari, 245 F.3d 1096, 1099 (9th Cir. 2001) (internal quotation marks and citation omitted). A "mere allegation of a due process violation is not a colorable constitutional claim." Klemm v. Astrue, 543 F.3d 1139, 1144 (9th Cir. 2008) (internal quotation marks and citation omitted). "Rather, the claim must be supported by facts sufficient to state a violation of substantive or procedural due process." Id. (internal quotation marks and citation omitted).

The parties agree that there has not been a judicially-reviewable final decision on Mr. Smith's application, and that the Court's jurisdiction to review the ALJ's dismissal of Mr. Smith's request for hearing hinges on whether Mr. Smith alleges a colorable constitutional claim that his due process rights were violated by the ALJ's failure to follow Administration regulations.

Section 404.957 of Title 20 of the Code of Federal Regulations sets forth the conditions under which an ALJ may dismiss a request for hearing for failure to appear. A dismissal is only permitted if the claimant "ha[s] been notified" that failure to appear may result in dismissal and "good cause has not been found by the administrative law judge" for failure to appear. 20 C.F.R. §§ 404.957(b)(1)(i), 416.1457(b)(1)(i). Subsection (b)(2) of the regulations provides that "[i]n determining good cause or good reason under this...