Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_18-cv-02737/USCOURTS-azd-2_18-cv-02737-0/pdf.json

Nature of Suit Code: 863
Nature of Suit: Social Security - DIWC/DIWW (405(g))
Cause of Action: 42:405 Review of HHS Decision (DIWC)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Ernie J Perez,

Plaintiff,

v. 

Commissioner of Social Security 

Administration,

Defendant.

No. CV-18-02737-PHX-MTL

ORDER 

Before the Court is Plaintiff Ernie Perez’s challenge to the Social Security 

Administration’s eligibility determination on the amount of his benefits. The Court has 

reviewed the parties’ briefs and the administrative record. For the reasons expressed 

herein, the Court affirms the Administrative Law Judge’s (“ALJ”) decision (R. at 122–

25).

I. BACKGROUND

From 1974 to his retirement in 2007, Mr. Perez was employed as technician with 

the Arizona Air National Guard, working on military aircraft. (Doc. 24 at 3; Doc. 35 at 

6.) Persons who work in this position are classified as dual-status technicians, that is, 

they are federal civilian employees who are also members of the Air National Guard. See 

10 U.S.C. § 10216(a)(1). The position required Mr. Perez to, among other things, wear 

his military uniform while working, participate in certain military training, and comply 

with military fitness standards. (Doc. 24 at 3.) Mr. Perez’s employment entitled him to 

receive a civil service pension. (Id.) 

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Upon his retirement, Mr. Perez was honorably discharged from the Arizona Air 

National Guard. (Id.) He then began to draw on his civil service pension. (Id.) At some 

point, Mr. Perez joined the Air Force Reserve, retiring in 2011. (Id. at 5.) Mr. Perez 

received a separate military pension for his reserve service. (R. 111.) 

Mr. Perez applied for Social Security benefits in 2013. (Doc. 35 at 4.) The Social 

Security Administration (the “SSA”) notified him that he was eligible for benefits, but at 

an amount lower than what he would have received had his National Guard technician 

position paid Social Security taxes. (Id.) Following an administrative hearing, the ALJ

held that the reduction properly applied to Mr. Perez’s circumstances. (Id.) An appeals 

council within the SSA denied review, thus making the ALJ’s ruling the final agency 

decision. (Id. at 5.) Mr. Perez then filed a Complaint in this Court. (Doc. 1.)

II. LEGAL ANALYSIS

A. Standard of Review for a Social Security Case

The district court reviews only those issues in an ALJ’s decision raised by the 

challenging party. See Lewis v. Apfel, 236 F.3d 503, 517 n.13 (9th Cir. 2001). The Court 

may set aside the agency’s determination only if it is not supported by substantial 

evidence or is based on legal error. Orn v. Astrue, 495 F.3d 625, 630 (9th Cir. 2007). 

The Court reviews the ALJ’s legal conclusions de novo. Mendoza-Pablo v. Holder, 667 

F.3d 1308, 1312 (9th Cir. 2012). The Court will not simply defer to the agency’s 

interpretation of a statute unless the text is ambiguous, and the agency has offered a 

reasonable interpretation. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 

U.S. 837, 842-44 (1984).

B. Applicability of the Windfall Elimination Provision

The parties agree that Mr. Perez is entitled to Social Security benefits. At issue 

here is whether to apply a benefit reduction that accounts for Mr. Perez’s employment 

that was not subject to Social Security taxation. By way of background, Social Security 

taxes are paid on “covered” employment, while “noncovered employment” is exempt 

from that form of taxation. Employees who are in noncovered employment positions 

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may be entitled to a pension. 

With these dual taxation categories comes a risk that a retiree may claim both 

Social Security and pension benefits for the same noncovered work. This, according to 

Congress, amounts to a windfall advantage. To counteract this, Congress enacted the 

Windfall Elimination Provision (the “WEP”), a formula reducing Social Security benefits 

for persons receiving a pension from a job that is exempt from paying Social Security 

taxes. See 42 U.S.C. 415(a)(7)(A). There are some statutory exceptions to the WEP, 

including an exception for “payment[s] based wholly on service as a member of a 

uniformed service.” 42 U.S.C. § 415(a)(7)(A)(ii)(III). This is known as the Uniformed 

Service Exception (the “Exception”).

Mr. Perez argues that the ALJ should have applied the Exception to his case based 

on his employment as a dual-status Air National Guard technician. Substantively, he 

claims, he performed a de facto military role as a technician. (R. 59.) The entirety of his 

job duties existed to support the Air National Guard, which is part of the armed forces. 

See 10 U.S.C. § 10216(a); 38 U.S.C. § 101(10), (26), (27). Additionally, as part of his 

job, Mr. Perez maintained military membership, he participated in certain military 

training exercises and programs, and he wore a military uniform while working. (R. 

106.) 

The Ninth Circuit is poised to decide an appeal with virtually identical facts that 

involves the same issue. Larson v. Berryhill, No. 4:17-cv-110, 2017 WL 2620068 (D. 

Mont. Sept. 26, 2018), appeal pending, No. 18-35985. In that case, the District Court 

affirmed the SSA’s decision denying the Exception to a dual-status technician similarly 

situated to Mr. Perez. Id. at *6. In the absence of controlling authority from the Ninth 

Circuit, this Court will examine the decisions of other circuits. 

In Petersen v. Astrue, 633 F.3d 633 (8th Cir. 2011), the Eighth Circuit held that 

the Exception applies to dual status technicians, thus precluding the SSA from reducing 

benefits under the WEP. The Eighth Circuit reasoned that because federal law imposed 

several job-related requirements akin to military personnel, the dual-status technician 

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position was performed “as a member of a uniformed service,” and the Exception 

applied. Id. at 637. Conversely, the Eleventh Circuit, in Martin v. Social Security

Administration, 903 F.3d 1154 (11th Cir. 2018), declined to apply the Exception. The 

Eleventh Circuit reasoned that the language of the exception cannot be read to include 

dual-status technicians because the Social Security payments were not based “wholly” on 

military service. Id. at 1168. 

Turning back to this case, the parties disagree about whether National Guard 

technicians render “service as a member of a uniformed service” as contemplated by the 

Exception. 42 U.S.C. § 415(a)(7)(A)(ii)(III) (emphasis added). (Doc. 35 at 17-18; Doc. 

36 at 3.) The Court is persuaded that Mr. Perez’s technician work was more than service 

by someone who happens to be a member of the military. See Petersen, 633 F.3d at 637. 

Rather, it was, at least in part, a form of service as a military member. See id. That does 

not, however, end the inquiry. 

When interpreting a statute, a court must give full effect to each word in the text. 

Setser v. United States, 566 U.S. 231, 239 (2012). The Eleventh Circuit’s reasoning best 

accomplishes that task. To be sure, a National Guard technician’s work is based, in part, 

on his uniformed service. The Exception, however, requires more than overlap between 

the technician work and standard military duties. As the Martin Court noted, the relevant 

statute refers to National Guard technicians as civilian employees. Martin, 903 F.3d at 

1165. Additionally, technicians have different pay and pension schemes for their 

technician work than for their military service. Id. at 1165-66. Thus, the technician role 

is not “wholly” based on military service.

III. CONCLUSION

The Court holds that the Exception unambiguously does not apply. Though Mr. 

Perez’s dual status technician pension was partially based on service as a uniformed 

service member, it was also partially based on service as a civilian. As a result, the SSA 

correctly reduced Mr. Perez’s benefits under the Windfall Elimination Provision.

/ / /

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Accordingly,

IT IS ORDERED affirming the decision of the Administrative Law Judge (R. at 

137), as upheld by the Appeals Council (R. at 5–6). 

IT IS FURTHER ORDERED directing the Clerk of Court to enter final 

judgment consistent with this Order and close this case.

Dated this 26th day of March, 2020.

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