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Martin Harry v. Carolyn Colvin, Acting Cmsnr, 15-50567 (2016)

Court: Court of Appeals for the Fifth Circuit Number: 15-50567 Visitors: 9
Filed: Apr. 14, 2016
Latest Update: Mar. 02, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 15-50567 United States Court of Appeals Summary Calendar Fifth Circuit FILED March 10, 2016 MARTIN A. HARRY, Lyle W. Cayce Clerk Plaintiff - Appellant v. CAROLYN W. COLVIN, ACTING COMMISSIONER OF SOCIAL SECURITY, Defendant - Appellee Appeal from the United States District Court for the Western District of Texas Before JOLLY, DENNIS, and PRADO, Circuit Judges. PER CURIAM: Martin A. Harry, an attorney, appeals the district court’s jud
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        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT


                               No. 15-50567                    United States Court of Appeals
                             Summary Calendar                           Fifth Circuit

                                                                      FILED
                                                                March 10, 2016
MARTIN A. HARRY,                                                 Lyle W. Cayce
                                                                      Clerk
            Plaintiff - Appellant

v.

CAROLYN W. COLVIN, ACTING COMMISSIONER OF SOCIAL
SECURITY,

            Defendant - Appellee




                Appeal from the United States District Court
                     for the Western District of Texas


Before JOLLY, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:
      Martin A. Harry, an attorney, appeals the district court’s judgment
denying his Fifth Amendment due process claims (“takings claims”) against
the Social Security Administration (“SSA”). Before the district court, Harry
alleged two separate takings of his property by the SSA without due process of
law. First, Harry alleged a taking by the SSA through its request that he
return overpaid attorney’s fees. Next, Harry alleged a taking by the SSA of his
livelihood by disqualifying him from representing clients before the SSA. The
district court held that Harry was given adequate opportunities to contest the
SSA’s alleged takings, both at a hearing before an Administrative Law Judge
                                     No. 15-50567
(“ALJ”) and an appeal of the ALJ’s decision to the Appeals Council (“AC”).
Finding no error, we AFFIRM.
                                            I.
      Martin A. Harry is licensed in the State of Texas and has represented
social security claimants for over 17 years.                Harry entered into fee
arrangements to represent three clients, “B.F.”, “A.B.”, and “J.B.”.                Each
arrangement satisfied the pertinent requirements of the Social Security Act.
Harry won favorable decisions for all three clients before the SSA for which he
was compensated by the SSA. After the SSA remitted payment, it discovered
that through its own fault or omission each of Harry’s clients had been
overpaid. 1 Based on its overpayment, the SSA also determined that it had
overpaid Harry.       The SSA issued separate letters to Harry requesting
reimbursement of the overages corresponding to each of the clients’ cases; and,
each letter ended with the same warning:
      Failure to comply in a timely manner will require us to refer the
      matter to the Office of General Counsel’s Representative Conduct
      and Civil Rights Division for consideration of a potential fee
      collecting violation under 20 C.F.R. 404.1740(c), which may
      warrant proceedings of suspension or disqualification under 20
      C.F.R. 404.1745.
      After years of attempting to collect the alleged overpayments to Harry,
the SSA followed through on its warnings, and referred the three cases to the
SSA’s Office of General Counsel (“OGC”).            The OGC, in turn, sent Harry
separate letters that corresponded to each of the clients’ cases, the gist of which
allowed Harry four options: 1) return the excess payment; 2) provide the SSA
with evidence of a prior repayment of the excess payment; 3) provide
documentation that the SSA’s records were incorrect; or 4) remain in violation



      1  Although each client’s case provided a unique circumstance for the SSA’s
miscalculation and overpayment of benefits, those details are not relevant to this appeal.
                                            2
                                    No. 15-50567
of   SSA    regulations     and     face    administrative    sanctions—including
disqualification from representing clients before the SSA. When Harry did not
remit payment, the OGC instituted sanctions proceedings against Harry.
      At a sanctions hearing, the ALJ determined that the SSA had proved
that Harry “was in violation of the fee retention provisions of the regulations,”
and that “disqualification” was the “only available sanction for each count.”
Therefore, “pursuant to 20 CFR 404.1745(b), 404.1770(a)(3)(iii), 416.1545(b),
and 416.1570(a)(3)(iii),” Harry was “DISQUALIFIED from acting as a
representative     of   claimants    in    dealing   with    the   Social   Security
Administration.” Harry appealed, and the Appeals Council affirmed the ALJ’s
decision to disqualify him from representing clients before the SSA.
      Harry then appealed the AC’s decision to the district court. Recognizing
the exclusive jurisdiction of the SSA to review administrative actions
regarding both claimant-representative fees and disciplinary hearings, the
district court reviewed only Harry’s constitutional due process claims. The
district court held that because Harry had received “adequate due process
throughout [his] disputes regarding fees for representing J.B., B.F., and A.B.,
[as well as] his sanctions hearing and appeal”, his due process rights were
constitutionally satisfied. Harry appealed to this Court.
                                           II.
      We review a district court’s “bench trial conclusions of law de novo, and
findings of fact for clear error.” Williams v. Kaufman Cty., 
352 F.3d 994
, 1001
(5th Cir. 2003).    Furthermore, because the Social Security Act precludes
judicial review of administrative actions regarding: 1) claimant-representative
fees, see 42 U.S.C. §§ 405(g) and (h); and, 2) whether an attorney may represent
clients before the SSA, see 42 U.S.C. § 406, we, like the district court, will
review only Harry’s due process claims.


                                           3
                                No. 15-50567
                                     III.
      As earlier noted, Harry contends that the SSA violated his due process
rights by taking his property interest in his attorney’s fees and livelihood
without providing him an adequate hearing for either. Each of these claims
will be addressed in turn.
      First, Harry asserts that because the SSA did not provide an adequate
hearing before requesting the return of the fees, his due process rights were
violated at the time the SSA requested that he remit payment. Thus, Harry
contends that the opportunity to contest the amount of those fees at a later
time before the OGC was defective because: 1) the OGC lacked any authority
to recalculate the fees; and 2) the hearing provided by the OGC would occur
after the SSA had reached its final determination of those fees.
      The record is clear, however, that Harry did not respond to the SSA’s
requests that he return the overpayment. The SSA’s request that he return
the overpaid attorney’s fees certainly did not rise to a deprivation of that
interest or a violation of Harry’s due process rights. The SSA’s only action
against Harry, or his alleged property interest in the unreturned attorneys’
fees at the time, was that the SSA might turn Harry’s case over to the OGC for
further proceedings. There was certainly no formal order, nor was there any
lien created on Harry’s property because he failed to remit his fee. In fact,
Harry went years without acknowledging, much less satisfying, the SSA’s
requests for repayment. Therefore, the SSA did not violate Harry’s due process
rights by failing to provide an adequate hearing at the time of the request for
the overpaid attorney’s fees.
      Next, Harry asserts that because the SSA disqualified him from
representing clients before the SSA, it deprived him of his livelihood without
providing him an adequate hearing.


                                      4
                                  No. 15-50567
      We have recognized that a plaintiff has a property interest in
qualifications that are “essential in the pursuit of a livelihood.” Bell v. Burson,
402 U.S. 535
, 539 (1971). We have not, however, recognized a property interest
in the specific qualification that Harry alleges in this case—the right to
represent clients before the SSA. Nevertheless, we will assume that Harry has
a viable property interest in the right that he alleges.
      No one disputes, however, that the SSA “may, after due notice and
opportunity for hearing, suspend or prohibit from further practice before the
[SSA] any such person, agent, or attorney who refuses to comply with the
[SSA]’s rules and regulations or who violates any provision of this section for
which a penalty is prescribed.” 42 U.S.C. § 406. Furthermore, when the SSA
turns a case over to the OGC, and the OGC seeks to disqualify an attorney
from representing clients before the SSA, the attorney is entitled to a hearing
before an ALJ on the merits of the disqualification. See 20 C.F.R. §§ 404.1765
and 416.1550. The attorney is also afforded an appeal to the AC, which reviews
the ALJ’s determinations.        See 20 C.F.R. §§ 404.1775 and 416.1575.
Additionally, and most importantly, the attorney “may continue to represent
claimants until a final decision [by the AC] is issued.” HALLEX I-1-1-55, 
2013 WL 1280291
, at *1 (March 29, 2013).
      Moreover, neither party contests that the adequacy of the SSA’s hearings
is governed by balancing the factors outlined in the Supreme Court’s decision
in Mathews v. Eldridge, which include: “(1) the private interest that will be
affected by the official action; (2) the risk of an erroneous deprivation of such
interest through the procedures used, and probable value, if any, of additional
procedural safeguards; and (3) the Government’s interest, including the fiscal
and administrative burdens that the additional or substitute procedures would
entail.” Mathews v. Eldridge, 
424 U.S. 319
, 321 (1976).


                                        5
                                       No. 15-50567
       Only assuming that Harry had a protectable interest in representing
clients before the SSA, this interest would certainly be “affected by the official
action” if he was disqualified to do so by the SSA. The first Mathews factor,
thus, favors Harry. Considering the extent of the judicial procedures that the
SSA invokes when reviewing whether an attorney should be disqualified,
however, the other two Mathews factors cut in the SSA’s favor. Specifically,
Harry was afforded a hearing before an ALJ on the merits of his
disqualification; furthermore, the right to appeal before the AC was also
provided. Furthermore, the disqualification proceedings occurred before the
alleged “taking”. In short, the due process provided by the SSA was adequate. 2
                                              IV.
       For these reasons, the judgment of the district court is
                                                                                AFFIRMED.




       2 For the first time on appeal, Harry raises an additional due process claim. Harry
contends that because “[d]eprivation of authorization of fees . . . rendered the retention of
those fees unlawful”, Harry was exposed to “civil fines, criminal punishment, []
administrative sanctions . . . [and] claims by his clients to those fees he retained because the
alleged excess fees had been paid by clients through the SSA from their past-due benefits.”
But, we “will not allow a party to raise an issue for the first time on appeal merely because a
party believes that he might prevail if given the opportunity to try a case again on a different
theory.” Leverette v. Louisville Ladder Co., 
183 F.3d 339
, 342 (5th Cir. 1999) (citations
omitted).
                                               6

Source:  CourtListener

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