Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lugo v. Schweiker

November 13, 1985

ANGEL LUGO AND MARIA LUNA, BY HER GUARDIAN AD LITEM ANGEL LUGO, ON BEHALF OF THEMSELVES AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED SARAH M. PICKELS, ON BEHALF OF EDWARD PICKELS, AND EDWARD F. TEREBEIENIEC, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, INTERVENORS
v.
RICHARD S. SCHWEIKER, SECRETARY, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, APPELLANT



On Appeal from the United States District Court for the Eastern District of Pennsylvania (C. A. No. 81-3797)

Author: Adams

Before: ADAMS, GIBBONS, and WEIS, Circuit Judges.

Opinion OF THE COURT

ADAMS, Circuit Judge.

This class action involves a challenge to certain regulations employed by the Social Security Administration (SSA) when it determines that incorrect sums of money were disbursed to beneficiaries. The challenge regulations provide that where SSA ascertains that a beneficiary was both underpaid and overpaid at various times in the past, the agency may "net" the amounts to determine a single adjusted overpayment or under payment. Plaintiffs argue that his procedure undercuts the rule of Califano v. Yamasaki, 442 U.S. 682, 61 L. Ed. 2d 176, 99 S. Ct. 2545 (1979). Yamasaki held that the Social Security Act entitles a recipient to a hearing before SSA may recover an over payment, to decide whether the recovery should be waived in the interest of equity and good conscience. Plaintiffs insist that the netting practice, by offsetting overpayments with under payments owed to the beneficiaries, forecloses their opportunity to seek waiver of each monthly overpayment.

The district court agreed with the plaintiffs, and held that the Secretary's netting regulations are inconsistent with the Act and therefore impermissible; it ordered expansive class relief. However, given the broad discretion confided to the Secretary to promulgate regulations, we disagree, and will direct that the district court's award of summary judgment to the plaintiffs be vacated and that summary judgment be entered in favor of the defendant.

I.

The impact of the netting regulations on the members of the plaintiff class may be demonstrated by the facts presented by the original plaintiff, Angel Lugo. Lugo became eligible for Supplemental Security Income (SSI) benefits on January 1, 1974; in 1977, the Secretary determined that he was no longer disabled and terminated his benefits. Following a series of appeals, the Secretary found on August 17, 1980, that Lugo actually had been eligible for SSI benefits since November 17, 1976. The under payment owed Lugo for the 1977-1980 period was calculated at $12,798.70. At the same time, however, SSA calculated that he was overpaid $6,100.60 from 1974 to 1976.

Pursuant to 20 C.F.R. § 416.538 (1981), the Secretary deducted the amount under paid from the amount overpaid and informed Lugo that he had received an adjusted overpayment of $3,301.90. The Secretary further decided, in accordance with 42 U.S.C. § 1383(b)(1)(A)(1976), that Lugo was without fault in receiving these excess funds and that recovery by the government against him would be inequitable. Accordingly, the $3,301.90 overpayment that had been made to Lugo was waived.

On July 13, 1981, Lugo filed a request that SSA waive repayment of the entire $6,100.60 overpayment. He also asked the agency immediately to repay him the $2,798.70 he had been underpaid. SSA denied these requires, in a Notice of Reconsideration mailed on August 19, 1981.

Lugo then instituted this civil action on September 21, 1981. n.1 (FOOTNOTE OMITTED) The district court later permitted other plaintiffs to intervene. All of the claims involved past overpayments and underpayments which resulted in a net overpayment to each of the claimants. The district court also permitted the named plaintiffs to represent a class consisting of all persons who:

%(1) have been, are, or will be served by the Philadelphia regional office of the United States Department of Health and Human Services:

(2) have been or will be determined eligible for social security or SSI benefits:

(3) have been or will be entitled to payment of benefits due for prior months:

(4) have had or will have all or part of retroactive benefits withheld from prompt payment or adjusted by defendant in order to recoup previous overpayment of benefits without receiving notice and an opportunity for a hearing on the issue of waiver of said recoupment or adjustment prior to such withholding or adjusting by defendant; and,

(5) have made or will make a claim to defendant requesting the release of benefits withheld or adjusted. The class includes all persons who received notice of the adjusted/ recouped amount of benefits within the four years prior to September 21, 1981, the date this action was commenced. The class does not include nay person as to whom a court has already rendered a decision on the issues presented in this case.

Lugo v. Schweiker, 599 F. Supp. 948, 950-51, (E. D. Pa. 1984). The Philadelphia regional office serves recipients in Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia, overseeing the cases of approximately 10% of the nation's 39,000,000 Social Security beneficiaries.

Lugo's amended complaint asserted that the Secretary's netting regulations are inconsistent with legislative authority, and also violate due process. The district court accepted the statutory argument, and granted the plaintiffs' motion for summary judgment. Further, the district court enjoined the Secretary from employing the netting procedure in the Philadelphia regional office, ordered the Secretary to provide a hearing before recoupment of Social Security or SSI overpayments by any means, and directed the Secretary to disburse to all class members the amount of withheld underpayments regardless of any overpayments. Lugo, 599 F. Supp. at 952-53.

The Secretary filed a timely appeal, and on May 7, 1985, a panel of this Court entered a stay of the district court's judgment pending appeal.

II.

Plaintiffs invoked the district court's jurisdiction under the judicial review provisions of the Social Security Act, 42 U.S.C. §§ 405(g), 1383(c)(3) (1982), as a prerequisite to judicial review. See also Yamasaki, 442 U.S. at 701. The Secretary also disputes the district court's mandamus jurisdiction, but without explanation of her reasoning.

Given our disposition of the merits, we need not address the factors a court must consider in assessing the appropriateness of district court jurisdiction over particular class members in Social Security litigation. Cf. Heckler v. Ringer, 466 U.S. 602, 104 S. Ct. 2013, 80 L. Ed. 2d 622 (1984); Mathews v. Eldridge, 424 U.S. 319, 326-32, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976); Weinberger v. Salfi, 422 U.S. 749, 756-67, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975); Liberty Alliance of the Blind v. Califano, 568 F.2d 333, 343-47 (3d Cir. 1977).*fn2 For the purpose of this Court's review of the district court's decision, it is sufficient that the district court had jurisdiction at least over the named plaintiffs, who filed administrative complaints, received adverse decisions, and then filed timely civil action in accordance with § 405(g). This Court has jurisdiction to review a final district court decision under 28 U.S.C. § 1291 (1982).

III.

A.

Turning to the merits, it is important to stress the limited scope of judicial review of administrative regulations such as those at issue in this appeal. In Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984), the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.