Elawyers Elawyers
Ohio| Change

Kenneth Benjamin v. United States, 18-20185 (2019)

Court: Court of Appeals for the Fifth Circuit Number: 18-20185 Visitors: 25
Filed: Jul. 25, 2019
Latest Update: Mar. 03, 2020
Summary: Case: 18-20185 Document: 00515050196 Page: 1 Date Filed: 07/25/2019 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 18-20185 FILED July 25, 2019 Lyle W. Cayce In the Matter of KENNETH WAYNE BENJAMIN, Clerk Debtor KENNETH WAYNE BENJAMIN, Appellant v. UNITED STATES OF AMERICA, SOCIAL SECURITY ADMINISTRATION, Appellee Appeal from the United States District Court for the Southern District of Texas Before CLEMENT, GRAVES, and OLDHAM, Circui
More
     Case: 18-20185     Document: 00515050196   Page: 1   Date Filed: 07/25/2019




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                               United States Court of Appeals
                                                                        Fifth Circuit


                                 No. 18-20185
                                                                      FILED
                                                                  July 25, 2019
                                                                 Lyle W. Cayce
In the Matter of KENNETH WAYNE BENJAMIN,                              Clerk

             Debtor

KENNETH WAYNE BENJAMIN,

             Appellant

v.

UNITED STATES OF AMERICA, SOCIAL SECURITY ADMINISTRATION,

             Appellee




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


Before CLEMENT, GRAVES, and OLDHAM, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
      We withdraw our prior opinion, 
924 F.3d 180
, and substitute the
following:
      The question presented is whether 42 U.S.C. § 405(h)—which states that
no claim arising under the Social Security Act can be brought under 28 U.S.C.
§§ 1331 and 1346—also bars bankruptcy courts from exercising their
jurisdiction under § 1334 to hear Social Security claims. The district court
answered yes, relying on the recodification canon to read into § 405(h) a bar on
    Case: 18-20185   Document: 00515050196     Page: 2   Date Filed: 07/25/2019



                                No. 18-20185
§ 1334 jurisdiction. But because we follow § 405(h)’s plain text, we answer no
and reverse.
                                      I.
      Kenneth Benjamin was the designated beneficiary of his sister’s
disability benefits. In September 2013, the Social Security Administration
(“SSA”) notified Benjamin that it had become aware of his sister’s return to
work. The SSA determined that her benefits had expired in April 2012. But
because it did not sever her disability check until September 2013, the SSA
would recoup the overpayment, which totaled $19,286.90. Benjamin and his
sister requested reconsideration of the overpayment determination and a
waiver of overpayment.
      Under 20 C.F.R. § 404.506(b), the SSA should not have begun collecting
the overpayment until after it had considered Benjamin’s waiver request,
which it did not do until July 2016. Nonetheless, in August 2014, the SSA sent
Benjamin a letter (his sister had died the month before) informing him that it
would withhold his full social-security check until the overpayment was
recovered. Four days later, Benjamin reached an agreement with the SSA to
withhold only $536 a month from him. The SSA recovered roughly $6,000 from
Benjamin in this way until September 2015, when, for reasons unknown, it
abruptly stopped withholding the money.
      Eventually, in July 2016, the SSA turned to Benjamin’s request for a
waiver of the overpayment, which it denied. Benjamin asked for a personal
conference with the SSA to reconsider its decision. After the conference, the
SSA again ruled against Benjamin. Benjamin filed a timely appeal to an
administrative law judge. The appeal has yet to be decided.
      After it denied his waiver request, the SSA resumed withholding $536 a
month from Benjamin’s social-security check. The burden soon became too
much: In May 2017, Benjamin filed for Chapter 7 bankruptcy. He then lodged
                                      2
     Case: 18-20185      Document: 00515050196         Page: 3    Date Filed: 07/25/2019



                                      No. 18-20185
an adversarial proceeding against the SSA in bankruptcy court. He alleged
that the SSA collected $6,000 from him illegally and in violation of its own
regulations. He demanded repayment in full. He also demanded the return of
the $536 collected from him in May due to the collection’s proximity to his
bankruptcy filing. 1
       The SSA moved to dismiss Benjamin’s claims for lack of subject matter
jurisdiction, claiming Benjamin had alleged only regulatory violations, which
must first be exhausted through the administrative-appeal process. Even if the
court had jurisdiction, the SSA contended that the claims should be dismissed
under Rule 12(b)(6). The bankruptcy court granted the SSA’s motion to dismiss
for “the reasons stated in the [m]otion.” Benjamin appealed to the district
court, which affirmed on jurisdictional grounds. This appeal followed. The sole
issue is whether the bankruptcy court had jurisdiction to hear Benjamin’s
claims.
                                            II.
       Whether subject matter jurisdiction exists over a given claim is a
question we review de novo. Family Rehab., Inc. v. Azar, 
886 F.3d 496
, 500 (5th
Cir. 2018). Benjamin has the burden of establishing jurisdiction. 
Id. As this
case is at the Rule 12(b)(1) stage, he need only “allege a plausible set of facts
establishing jurisdiction.” 
Id. (quotation omitted).



       1 In his original complaint and throughout his many amended complaints, Benjamin
alleged other violations and eventually requested over $150,000 in additional relief, citing
injuries such as emotional distress. On appeal, however, Benjamin challenges only the
dismissal of the claims related to the $6,000 withheld from 2014 through 2015 and the $536
withheld in May 2017. His failure to adequately argue the other claims in his brief renders
them abandoned. See, e.g., DeLoach v. Bryan, 144 F. App’x 377, 378 (5th Cir. 2005) (per
curiam).
                                             3
     Case: 18-20185       Document: 00515050196          Page: 4     Date Filed: 07/25/2019



                                       No. 18-20185
                                             III.
       Under 42 U.S.C. § 405(h), federal courts’ ability to hear claims arising
under the Social Security Act is largely curtailed:
       [1] The findings and decision of the Commissioner of Social
       Security after a hearing shall be binding upon all individuals who
       were parties to such hearing. [2] No findings of fact or decision of
       the Commissioner of Social Security shall be reviewed by any
       person, tribunal, or governmental agency except as [provided in
       § 405(g)]. [3] No action against the United States, the
       Commissioner of Social Security, or any officer or employee thereof
       shall be brought under section 1331 or 1346 of Title 28 to recover
       on any claim arising under [Title II of the Social Security Act]. 2
       The Supreme Court has held that § 405(h) “purports to make exclusive
the judicial review method set forth in § 405(g)” for claims falling within its
scope. Shalala v. Ill. Council on Long Term Care, Inc., 
529 U.S. 1
, 10 (2000). It
does so by two means (though the means are listed in inverse order). The third
sentence strips district courts of the most obvious sources of federal jurisdiction
for any claims arising under Title II of the Social Security Act. The second
sentence then channels a certain class of those claims into § 405(g), which, in
turn, grants jurisdiction to district courts to review final agency decisions made
after a hearing. 3 42 U.S.C. § 405(g).
       The question before us is whether § 405(h)’s third sentence bars
bankruptcy courts from relying on their general bankruptcy jurisdictional
grant found at 28 U.S.C. § 1334(b) to hear Benjamin’s claims. The district court
answered yes to this question. We disagree.




       2 “Title II contains the old-age, survivors, and disability insurance programs codified
at 42 U.S.C. § 401 et seq.” Weinberger v. Salfi, 
422 U.S. 749
, 760 n.7 (1975).
       3 Ordinarily, this means that a plaintiff must run the gauntlet of the SSA’s four-level-

review process, which culminates in a decision from the Appeals Council. See generally 20
C.F.R. § 404.900 (describing the administrative process).
                                              4
     Case: 18-20185       Document: 00515050196         Page: 5     Date Filed: 07/25/2019



                                       No. 18-20185
                                             A.
       The third sentence of § 405(h) states that “[n]o action against the United
States, the Commissioner of Social Security, or any officer or employee thereof
shall be brought under section 1331 or 1346 of Title 28 to recover on any claim
arising under [Title II of the Social Security Act].” Benjamin would have us
read that sentence for what it says: as a bar on jurisdiction under §§ 1331 and
1346 4—but not under § 1334. The SSA, in contrast, asks us to interpret the
sentence as barring § 1334 jurisdiction as well. This is the position the district
court adopted, and it is a position that has garnered the support of the Third,
Seventh, Eighth, and Eleventh Circuits. Only the Ninth Circuit has adopted
Benjamin’s reading.
       The Seventh Circuit was the first court to read § 405(h)’s third sentence
as including a hidden jurisdictional bar. In Bodimetric Health Services Inc. v.
Aetna Life & Casualty, the court considered whether the third sentence
stripped courts of their § 1332 diversity jurisdiction to hear claims arising
under the Medicare Act. 5 
903 F.2d 480
, 488–90 (7th Cir. 1990). The court began
by reviewing the history of § 405(h). 
Id. at 488.
As originally enacted in 1939,
it barred all actions brought under 28 U.S.C. § 41, which at the time contained
virtually all the jurisdictional grants to the federal courts—including the
diversity grant—now scattered throughout Title 28. 
Id. (citing Social
Security
Act Amendments of 1939, Pub. L. No. 76-379, § 205(h), 53 Stat. 1360, 1371
(1939)). 6 In 1976, the Office of Law Revision Counsel revised § 405(h) to its




       4  These provisions grant federal courts subject matter jurisdiction over federal
questions and certain cases in which the United States is a defendant. See 28 U.S.C. §§ 1331,
1346.
       5 Section 405(h) is made applicable to the Medicare Act by 42 U.S.C. § 1395ii.
       6 The Social Security Act Amendments of 1939 barred actions under “section 24 of the

Judicial Code of the United States.” Pub. L. No. 76-379, § 205(h), 53 Stat. 1360, 1371 (1939).
But section 24 was codified at 28 U.S.C. § 41. See id.; 28 U.S.C. § 41 (1940).
                                              5
    Case: 18-20185     Document: 00515050196      Page: 6     Date Filed: 07/25/2019



                                  No. 18-20185
current form, and in 1984, Congress adopted the revised language by passing
the Deficit Reduction Act (“DRA”). 
Id. at 488–89
(citing Pub. L. No. 98-369,
§ 2663(a)(4)(D), 98 Stat. 494, 1162 (1984)). The revision was in a section
entitled “Technical Corrections.” 
Id. at 489
(quoting 98 Stat. at 1156). In a
neighboring section, Congress instructed that none of the technical changes
“shall be construed as changing or affecting any right, liability, status, or
interpretation which existed (under the provisions of law involved) before
[their effective] date.” 
Id. (quoting 98
Stat. at 1171–72).
      This language, the Seventh Circuit said, clearly expressed Congress’s
“intent not to alter the substantive scope of section 405(h). Because the
previous version of section 405(h) precluded judicial review of diversity actions,
so too must newly revised section 405(h) bar these actions.” 
Id. The Third
and
Eighth Circuits adopted the Seventh Circuit’s reasoning to reach the same
conclusion. See Nichole Med. Equip. & Supply, Inc. v. TriCenturion, Inc., 
694 F.3d 340
, 346–47 (3d Cir. 2012); Midland Psychiatric Assocs., Inc. v. United
States, 
145 F.3d 1000
, 1004 (8th Cir. 1998).
      In In re Bayou Shores SNF, LLC, the Eleventh Circuit built on this body
of caselaw by deciding that § 405(h)’s third sentence barred bankruptcy
jurisdiction under § 1334. 
828 F.3d 1297
, 1314 (11th Cir. 2016). It too relied on
Bodimetric to hold that “the 1984 amendments to § 405(h) were a codification
and not a substantive change.” 
Id. at 1314.
The court argued that its conclusion
was supported by the recodification canon, which states that “when
legislatures codify the law, courts should presume that no substantive change
was intended absent a clear indication otherwise.” 
Id. In applying
this canon
to § 405(h), it reasoned that the Office of Law Revision Counsel must have
made an error by not including the full range of jurisdictional grants listed
under the prior version. 
Id. at 1319.
It was not concerned that “Congress
enacted the error into positive law.” 
Id. There was
no evidence, the court said,
                                        6
     Case: 18-20185       Document: 00515050196          Page: 7     Date Filed: 07/25/2019



                                       No. 18-20185
that Congress had clearly expressed an intention to change decades of social-
security policy and bankruptcy law by enacting the DRA: “[I]f Congress
intended such an important expansion of bankruptcy court jurisdiction to be
enacted in a recodification, one would expect to find some indication in the
statute or legislative history stating as much.” 
Id. The only
circuit to read § 405(h)’s third sentence according to its plain
text is the Ninth Circuit. It has held that § 405(h) “only bars actions under 28
U.S.C. §§ 1331 and 1346; it in no way prohibits an assertion of jurisdiction
under section 1334.” In re Town & Country Home Nursing Servs., Inc., 
963 F.2d 1146
, 1155 (9th Cir. 1991). 7
       We must now take sides in this circuit split. With respect to the majority
of our sister circuits, we reject the non-textual approach exemplified by the
Eleventh Circuit and join the Ninth Circuit in applying the third sentence’s
plain meaning—a meaning that, everyone agrees, does not bar § 1334
jurisdiction.
       While the recodification canon is useful in some instances, it only
applies—as the Eleventh Circuit noted—in the absence of a clear indication
from Congress that it intended to change the law’s substance. See In re Bayou
Shores SNF, 
LLC, 828 F.3d at 1314
. While the Eleventh Circuit could not find
any such indication, it overlooked the most obvious source of congressional
intent—the actual words of § 405(h)’s third sentence. See Hotze v. Burwell, 
784 F.3d 984
, 997 (5th Cir. 2015) (noting that “the best evidence of Congress’s



       7The SSA argues that the Ninth Circuit has retreated from this case. It cites to Kaiser
v. Blue Cross of California for support. 
347 F.3d 1107
(9th Cir. 2003). In Kaiser, the court
held that § 405(h)’s third sentence barred diversity actions under § 1332. 
Id. at 1115.
Interestingly, Kaiser was written by the same judge, sitting by designation, who wrote
Bodimetric. He did not acknowledge the Ninth Circuit’s contrary precedent in Town &
Country. The Ninth Circuit has decided to live with this tension in its precedent, holding that
Town & Country continues to apply to § 1334 while Kaiser applies to § 1332. See Do Sung
Uhm v. Humana, Inc., 
620 F.3d 1134
, 1141 n.11 (9th Cir. 2010).
                                              7
    Case: 18-20185       Document: 00515050196    Page: 8   Date Filed: 07/25/2019



                                  No. 18-20185
intent is the statutory text” (quotation omitted)); see also United Motorcoach
Ass’n v. City of Austin, 
851 F.3d 489
, 492 (5th Cir. 2017). “The new text is the
law, and where it clearly makes a change, that governs. This is so even when
the legislative history . . . expresses the intent to make no change.” A. SCALIA
& B. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS § 40, p. 257
(2012). This principle applies even if the statute has a general accompanying
instruction eschewing any substantive changes: “When the general assertion
of no change is contradicted by an unquestionable change in a specific
provision, the specific will control over the general.” 
Id. at 259.
By failing to
recognize the importance of the third sentence’s words, the Eleventh Circuit
not only misapplied the recodification canon; it also violated another bedrock
canon of statutory interpretation: the expressio unius canon. See 
id. at §
10, p.
107 (“The expression of one thing implies the exclusion of others . . . .”).
      The Supreme Court’s opinion in United States v. Wells is a good example
of how to correctly apply the clear-indication exception to the recodification
canon. 
519 U.S. 482
(1997). Wells confronted the omission of the “materiality”
requirement in Congress’s 1948 recodification of the false-statement crime. 
Id. at 490–98.
The convicted defendants argued that Congress must have made a
mistake by removing the materiality requirement because the Reviser’s Note
stated that the recodification “was without change of substance.” 
Id. at 496–
97. The Court disagreed, saying that the legislative history “does nothing to
muddy the ostensibly unambiguous provision of the statute as enacted by
Congress.” 
Id. at 497.
      Attempting to undermine the principle animating Wells, the SSA
marshals four cases—two from the Supreme Court and two from this court—
to show that the recodification canon can be used to trump clear text, but the
cases show nothing of the sort. In each, the challenged text was ambiguous or
was subject to multiple reasonable interpretations.
                                        8
      Case: 18-20185   Document: 00515050196     Page: 9   Date Filed: 07/25/2019



                                  No. 18-20185
       Leading the charge for the SSA is Tidewater Oil Co. v. United States, in
which the Supreme Court interpreted the recodified version of the
interlocutory-appeal provision found at 28 U.S.C. § 1292(a)(1). 
409 U.S. 151
,
162–63 (1972). The statutory text allowed interlocutory orders of the district
courts involving injunctions “to be appealed to the courts of appeals ‘except
where a direct review may be had in the Supreme Court.’” 
Id. at 162
(alteration
in original) (quoting 28 U.S.C. § 1292(a)(1) (1952)). The court explained that
§ 1291(a)(1)’s final clause was “susceptible of two plausible constructions”
depending on whether “may be had” meant “may be had immediately” or “may
be had eventually,” after final judgment. 
Id. Only after
finding this ambiguity,
did the Court apply the recodification canon to opt for the latter interpretation.
Id. Next up
is Southern Pacific Transportation Co. v. San Antonio, 
748 F.2d 266
(5th Cir. 1984). In that case, this court found that the deletion of certain
election-of-remedies language from the Interstate Commerce Act during a
recodification created ambiguity in the provision’s remaining language. 
Id. at 271
n.11. The court resolved the ambiguity by relying on the recodification
canon to hold that Congress had not intended to change the statute’s meaning.
Id. And in
American Bankers Insurance Co. of Florida v. United States, this
court declined to adopt the literal meaning of the word “taxable” in favor of an
alternative reasonable interpretation. 
388 F.2d 304
, 305 (5th Cir. 1968) (per
curiam). It did so in part because it did not think that Congress had intended
a drastic change in policy by replacing the word “describe” with the word
“taxable” in the statute during the recodification. 
Id. But the
district court’s




                                        9
    Case: 18-20185       Document: 00515050196          Page: 10     Date Filed: 07/25/2019



                                       No. 18-20185
opinion, which this court cited approvingly, 8 makes clear that the literal
meaning of “taxable” became “clouded with ambiguity and uncertainty” when
it was read in connection with its surrounding text, rather than in isolation.
Am. Bankers Ins. Co. of Fla. v. United States, 
265 F. Supp. 67
, 74–75 (S.D. Fla.
1967).
       Section 405(h)’s third sentence is different from the statutory provisions
in those cases. Unlike in Tidewater Oil and Southern Pacific, the third
sentence is not susceptible to two plausible constructions; it is not ambiguous.
It bars actions under §§ 1331 and 1346—no more, no less. There is no plausible
way to read “section 1331 or 1346 of Title 28” as secretly including § 1334 (or
§ 1332 for that matter). For the same reason the deletion of “materiality” was
dispositive in Wells, the deletion of § 1334 jurisdiction is dispositive here. And
the third sentence’s plain meaning does not become clouded with ambiguity
when one’s gaze is expanded to the surrounding statutory text, as was the case
in American Bankers.
       The SSA’s final case deserves a separate discussion. In Ankenbrandt v.
Richards, the Court addressed the 1948 recodification of the diversity-
jurisdiction statute. 
504 U.S. 689
(1992). The recodification changed the
statute’s language from granting federal courts diversity jurisdiction over “all
suits of a civil nature at common law or in equity” to granting it over “all civil
actions.” 
Id. at 698.
In a line of cases going back 100 years, the Court had
interpreted the pre-1948 statute as not covering certain domestic-relations
cases. 
Id. at 700.
The question for the Court was whether the new language




       8 This court largely adopted the district court’s opinion without adding much analysis
of its own. See Am. 
Bankers, 388 F.2d at 305
(“The intricacies of the statutes, their changes,
and the legal argument based thereon are set forth in the District Court’s opinion. The Court
held the contracts were subject to the tax. We agree and affirm.” (citation omitted)).
                                             10
    Case: 18-20185      Document: 00515050196        Page: 11   Date Filed: 07/25/2019



                                      No. 18-20185
overturned that exception. The Court answered no, relying on the
recodification canon. 
Id. at 700–01.
      At first blush, Ankenbrandt may seem to ignore the statute’s plain text.
Domestic-relations cases certainly fall within the category of “all civil actions.”
Just as the Ankenbrandt Court used the recodification canon to read out of the
statute a category clearly included in the general language, the SSA asks us to
do the inverse: to read into § 405(h) a category not listed. This argument
flounders, however, when a distinction is brought to light. The words “all civil
actions” can plausibly be interpreted as a shorthand or synonym for “suits of a
civil nature at common law or in equity.” So it was reasonable for the Court to
assume that Congress did not change a 100-year-old policy by using a synonym
for the past language. This distinction does not hold with the revision to
§ 405(h)’s third sentence. Replacing “section 41 of Title 28” with “section 1331
or 1346 of [T]itle 28” cannot plausibly be interpreted as a shorthand way of
naming the near-30 grants that were originally included in 28 U.S.C. § 41, now
scattered across Title 28. And unlike in Ankenbrandt, this case does not involve
combining    the     recodification    canon   with    longstanding    congressional
acquiescence.
      In a final attempt to undermine the plain meaning of § 405(h)’s third
sentence, the SSA reverts to policy. It tells us that allowing § 1334 jurisdiction
would be ill-advised because doing so would deprive the bankruptcy court of
the SSA’s expertise in handling benefits claims. This argument is reminiscent
of the EPA’s position in Utility Air Regulatory Group v. EPA, 
573 U.S. 302
(2014). There, Congress required facilities emitting more than 100 tons per
year (“tpy”) of certain pollutants to apply for permits. The EPA interpreted the
number “100 tpy” to mean “100,000 tpy.” 
Id. at 325.
The Supreme Court
responded: “We are not willing to stand on the dock and wave goodbye as [the]
EPA embarks on this multiyear voyage of discovery. We reaffirm the core
                                          11
   Case: 18-20185     Document: 00515050196      Page: 12   Date Filed: 07/25/2019



                                  No. 18-20185
administrative-law principle that an agency may not rewrite clear statutory
terms to suit its own sense of how the statute should operate.” 
Id. at 328.
The
same could be said of the SSA’s interpretation of § 405(h)’s third sentence.
      In sum, we interpret the third sentence to mean what it says. And it says
nothing about § 1334. The district court erred by concluding that the third
sentenced barred the bankruptcy court’s § 1334 jurisdiction.
                                       B.
      Our holding on § 405(h)’s third sentence necessitates reversal of the
district court’s decision and a remand to the bankruptcy court. However, as our
interpretation of the third sentence raises possible questions for § 405(h)’s
second sentence, we offer the following guidance for the remand.
      Our precedent has largely failed to give adequate attention to the
conceptual differences between § 405(h)’s second and third sentences. Most of
the time, our cases refer to § 405(h) as a whole. See Family Rehab., Inc. v. Azar,
886 F.3d 496
, 500–01 (5th Cir. 2018); S.W. Pharmacy Solutions, Inc. v. Ctrs.
for Medicare and Medicaid Servs., 
718 F.3d 436
, 440 (5th Cir. 2013); Physician
Hospitals of Am. v. Sebelius, 
691 F.3d 649
, 652–53 (5th Cir. 2012). But see
Wolcott, M.D., P.A. v. Sebelius, 
635 F.3d 757
, 764–65 (5th Cir. 2011). But as
the following shows, the second sentence has a distinct function and should be
treated separately from the third.
      Recall that § 405(h)’s second sentence states that “[n]o findings of fact or
decision of the Commissioner of Social Security shall be reviewed by any
person, tribunal, or governmental agency except as [stated in § 405(g)].” 42
U.S.C. § 405(h). This sentence does two things. First, it channels claims
challenging a certain type of agency decision (described below) into § 405(g).
Second, it ensures that § 405(g) is the sole jurisdictional avenue for the
channeled claims. So the primary question for the remand is this: Do


                                       12
   Case: 18-20185     Document: 00515050196     Page: 13    Date Filed: 07/25/2019



                                 No. 18-20185
Benjamin’s claims challenge the type of administrative decisions that
§ 405(h)’s second sentence channels into § 405(g)?
      We will not now parse the details of Benjamin’s claims—that is a task
for remand. But we will clarify what type of decision § 405(h)’s second sentence
channels. It will be for the bankruptcy court to decide if Benjamin’s claims are
challenging that type of decision.
      At first glance, § 405(h)’s second sentence looks like it might apply to
every and any decision by the Commissioner. But upon closer inspection, we
believe that § 405(h)’s second sentence applies only where the would-be
plaintiff is challenging a decision regarding his entitlement to benefits. The
key is reading § 405(h) and § 405(g) alongside § 405(b)(1):
            Section 405(b)(1): The Commissioner of Social Security is
      directed to make findings of fact, and decisions as to the rights of
      any individual applying for a payment under this subchapter. . . .
      Upon request by any such individual . . . who makes a showing in
      writing that his or her rights may be prejudiced by any decision
      the Commissioner of Social Security has rendered, the
      Commissioner shall give such applicant . . . reasonable notice and
      opportunity for a hearing with respect to such decision . . . .

             Section 405(h): The findings and decision of the
      Commissioner of Social Security after a hearing shall be binding
      upon all individuals who were parties to such hearing. No findings
      of fact or decision of the Commissioner of Social Security shall be
      reviewed by any person, tribunal, or governmental agency except
      as [provided in § 405(g)].

            Section 405(g): Any individual, after any final decision of
      the Commissioner of Social Security made after a hearing to which
      he was a party, irrespective of the amount in controversy, may
      obtain a review of such decision by a civil action commenced within
      sixty days after the mailing to him of notice of such decision . . . .
      Section 405(b)(1) directs the Commissioner to make “findings” and
“decisions” on “the rights of any individual applying for a payment” and says

                                       13
    Case: 18-20185        Document: 00515050196          Page: 14     Date Filed: 07/25/2019



                                       No. 18-20185
that when those decisions prejudice the rights of the individuals, those
individuals shall be given a hearing if they request one. Section 405(h) parrots
that language, saying the Commissioner’s “findings” and “decision” are binding
“after a hearing” and that any review of the Commissioner’s “findings” and
“decision” must proceed as provided in § 405(g). Section 405(g) authorizes a
person to seek judicial review of the Commissioner’s “final decision . . . made
after a hearing.” As we interpret them, § 405(h) and § 405(g) refer to the same
findings, decisions, and hearings referenced in § 405(b)—findings, decisions,
and hearings regarding “the rights of individuals applying for a payment under
[Subchapter II].” Put differently, where an individual is not challenging a
decision regarding his entitlement to benefits made after an application for
payment and therefore not receiving the statutorily-prescribed hearing under
subsection (b)(1), his claim never gets channeled under § 405(h)’s second
sentence or reviewed by a court under § 405(g). 9 See Smith v. Berryhill, 139 S.
Ct. 1765, 1772 (2019) (holding that § 405(b)(1) provides “all eligible
claimants—that is, people seeking benefits—with an opportunity for a hearing
with respect to such decision[s]” (alteration in original)).
       The Supreme Court said as much in Califano v. Sanders, 
430 U.S. 99
(1977). In that case, a beneficiary sued to challenge the Commissioner’s
decision denying his motion to reopen earlier disability-determination
proceedings, arguing he could proceed under § 405(g). 
Id. at 103.
The Court
disagreed that § 405(g) permitted the suit by pointing to § 405(b): “This
provision [§ 405(g)] clearly limits judicial review to a particular type of agency
action, a ‘final decision of [the Commissioner] made after a hearing.’ But a


       9This interpretation of § 405(h)’s second sentence is fully consistent with our decision
in Wolcott, M.D., P.A. v. Sebelius, 
635 F.3d 757
(5th Cir. 2011). There, we said that the second
sentence applies when a “judicial decision favorable to the plaintiff would affect the merits of
whether the plaintiff is entitled to . . . benefits.” 
Id. at 764.
We are simply explaining the
statutory underpinnings of this conclusion.
                                              14
   Case: 18-20185    Document: 00515050196       Page: 15   Date Filed: 07/25/2019



                                No. 18-20185
petition to reopen a prior final decision may be denied without a hearing as
provided in [§ 405(b)].” 
Id. at 108
(quoting § 405(g)). It did not matter that
agency regulations provided for a hearing on motions to reopen. Id.; see 
id. at 102
(citing 20 C.F.R. §§ 404.957–404.958 (1976)). The statute channeled only
decisions of the Commissioner for which the statute prescribed a hearing—
namely, claims addressing the entitlement to benefits.
      With this guidance in mind, the bankruptcy court should examine
Benjamin’s claims and determine whether they are primarily about his
entitlement to benefits—that is, a payment of money because he (or his sister)
is disabled—or claim for money because the SSA failed to comply with its own
regulations in recouping the overpayment. The former claim would be
channeled by § 405(h)’s second sentence into § 405(g); the latter would not be.
And if Benjamin’s claims are not channeled, then the bankruptcy court had
jurisdiction under § 1334 to hear Benjamin’s claims.
                                *     *      *
      For the foregoing reasons, the judgment of the district court is
REVERSED, and this case is REMANDED to the bankruptcy court for further
proceedings consistent with this opinion.




                                      15

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer