Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-02222/USCOURTS-cand-4_15-cv-02222-4/pdf.json

Nature of Suit Code: 864
Nature of Suit: Social Security - SSID Title XVI
Cause of Action: 42:405 Review of HHS Decision (SSID)

---

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

HENRY ALLEN BYNUM, 

Plaintiff, 

v. 

CAROLYN W. COLVIN, 

Defendant. 

Case No. 15-cv-02222-JSW 

ORDER RESOLVING MOTIONS FOR 

SUMMARY JUDGMENT 

Re: Dkt. Nos. 24, 27 

Now before the Court is the Motion for Summary Judgment filed by Plaintiff Henry Allen 

Bynum (“Bynum”), and the Cross-Motion for Summary Judgment filed by the Commissioner of 

the Social Security Administration (“Commissioner”). Having carefully reviewed the 

administrative record and considered the parties’ papers and the relevant legal authority, the Court 

hereby DENIES Bynum’s Motion for Summary Judgment and GRANTS the Commissioner’s 

Cross-Motion for Summary Judgment. 

FACTUAL AND PROCEDURAL BACKGROUND 

Bynum brings this action to obtain judicial review of the Commissioner’s decision to deny 

his request for waiver of overpayment pursuant to 42 U.S.C. section 405(g). Bynum, then 62 

years old, applied for Social Security benefits on September 23, 2009. (Certified Administrative 

Record (“AR”) 16-17.) In doing so, Bynum acknowledged that “if [he] decide[d] to go back to 

work [he] must stay within the gross annual earnings limit of $14,160.00 yr/$1,800.00 mo.” (AR 

17.) Additionally, he acknowledged that if there was a possibility that he may earn wages in 

excess of this limit, he “must contact Social Security right away” to avoid creating an 

overpayment. (AR 17.) In a letter that notified Bynum of his benefit award, the Social Security 

Administration (“SSA”) stated “your benefits are based on the information you gave us. If this 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 1 of 8
2 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

information changes, it could affect your benefits. For this reason, it is important that you report 

changes to us right away.” (AR 18.) Bynum began receiving Social Security benefits in October 

2009. (Id.) 

During this time, Bynum continued to work and earned a gross paycheck in excess of the 

SSA’s prescribed earning limits. (AR 67-93.) On June 16, 2011, the SSA notified him that he had 

received an overpayment of $17,652.00 in benefits for 2010. (AR 21.) The SSA explained that he 

had earned an actual income of $78,983.00 despite reporting an income of $0.00. (Id.) Further, 

the SSA notified Bynum on April 24, 2012 that his future benefits would no longer be paid. (AR 

32.) On May 11, 2012, Bynum submitted a request for waiver of overpayment due to “extreme 

hardship.” (AR 34.) He stated his net pay was merely $720 a month due to delinquent tax 

payments. (Id.) In his request, Bynum noted, “[m]y take-home [pay] is less than the monthly 

allowance for working individuals....” (AR 39.) 

On May 26, 2012, the SSA informed Bynum that the overpayment totaled $33,921.00 for 

excess benefits paid between January 2010 and December 2011. (AR 56.) Five days later, 

Bynum filed a request for reconsideration to waive the payment. (AR 59.) In his filing, he stated 

that if he was required to pay, it would result in an inability to pay “bills for food, clothing, 

housing, medical care, or other necessary expenses.” (Id.) The SSA classified Bynum’s 

overpayment as an entitlement overpayment and denied his request for reconsideration. (AR 11, 

97.) The SSA explained, “Mr. Bynum filed an application indicating that he was retiring when in 

fact it appears that he never stopped working.” (AR 98.) Additionally, the SSA stated Bynum 

received “clear instructions on his reporting responsibilities” when he applied for benefits. (AR 

98.) On August 31, 2012, Bynum requested a hearing with an Administrative Law Judge (“ALJ”) 

to appeal the SSA’s decision. (AR 108.) In this application, Bynum declared his “earning[s] are 

moot” due to tax garnishes placed upon his wages. (Id.) 

 On August 30, 2013, the ALJ affirmed the SSA’s decision and denied Bynum’s request to 

waive the overpayment. (AR 11-15.) The ALJ found that Bynum was “not without fault” in 

creating the overpayment and therefore, was ineligible to receive a waiver. (AR 13.) Bynum 

requested review of the ALJ’s decision, which the Appeals Council denied on February 12, 2015. 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 2 of 8
3 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

(AR 2.) 

Having exhausted his administrative remedies, Bynum commenced this action for judicial 

review of the ALJ’s decision. Bynum argues he was without fault for the overpayment and, 

therefore, repayment should be waived. He argues he “understood” and “was led to believe” that 

the SSA’s earning limit was calculated on net pay instead of gross pay. (Pl. Br. at 6.) For support, 

Bynum cites the capitalization pattern of the words “take-home” and “gross” on the SSA’s waiver 

application form. (Id.) Additionally, he claims that the SSA was negligent, because it failed to 

notify him that the limits were based on gross earnings instead of net earnings. Further, Bynum 

argues the ALJ “erred in his conclusion” that Bynum was “evasive” in his testimony. (Id. at 7.) 

On February 4, 2016, Bynum filed the instant motion for summary judgment. On March 3, 

2016, the Commissioner filed a cross-motion for summary judgment. 

ANALYSIS 

A. Standard of Review 

A federal district court may not disturb the Commissioner’s denial of a waiver of 

overpayment request if the decision is supported by substantial evidence and without legal error. 

42 U.S.C. § 405(g); Hill v. Astrue, 698 F.3d 1153, 1158 (9th Cir. 2012). Considering the 

administrative record as a whole, “[s]ubstantial evidence means more than a scintilla, but less than 

a preponderance; it is such relevant evidence as a reasonable mind might accept as adequate to 

support a conclusion.” Robbins v. SSA, 466 F.3d 882 (9th Cir. 2006); Sandgathe v. Chater, 108 

F.3d 978, 980 (9th Cir. 1997). “[W]here the evidence is susceptible to more than one rational 

interpretation” and the ALJ has provided a rational interpretation, the district court must uphold 

the decision of the ALJ. Andrews v. Shalala, 53 F.3d 1035, 1039 (9th Cir. 1995). 

B. The ALJ’s Determination That Bynum Was Not Without Fault Is Supported By 

Substantial Evidence and Free of Legal Error. 

Bynum argues that the ALJ erred in the decision to find him not without fault for the 

overpayment, and the ALJ’s decision to deny him a waiver of overpayment must be reversed. 

Conversely, the Commissioner argues that the ALJ’s determination that Bynum was not without 

fault for the overpayment rests upon substantial evidence, and the ALJ’s decision must be 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 3 of 8
4 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

affirmed. 

The SSA may recover an overpayment of social security benefits made to a claimant when 

“an incorrect amount of benefits has been paid to an individual.” Harrison v. Heckler, 746 F.2d 

480, 481-82 (9th Cir. 1984). A claimant who receives overpayment is entitled to waiver of 

recovery only under specific circumstances. 20 C.F.R. § 404.506(a). Federal regulations provide 

that “there shall be no adjustment or recovery in any case where an overpayment under title II has 

been made to an individual who is without fault[.]” Id. In order to determine if an individual is at 

fault, the SSA considers “all pertinent circumstances, including the individual’s age and 

intelligence, and any physical, mental, educational, or linguistic limitations.” Id. § 404.507. 

Additionally, a waiver is unavailable “if adjustment or recovery would either defeat the purpose of 

title II of the Act, or be against equity and good conscience.” Id. § 404.506(a). 

1. Substantial evidence supports the ALJ’s ruling that Bynum was not without 

fault for the overpayment of benefits. 

Bynum argues that the ALJ erred in finding him to not be without fault for the 

overpayment of benefits. In reviewing the ALJ’s finding of fault, the Court must determine 

whether the ALJ’s decision is supported by substantial evidence. There are two types of 

overpayments: entitlement overpayments and deduction overpayments. See 20 C.F.R. §§ 404.507, 

404.510, 404.510a, 404.511. An entitlement overpayment is a benefit payment to an individual 

“who fails to meet one or more requirements for entitlement to such payment or a benefit payment 

exceeding the amount to which he is entitled.” 20 C.F.R. § 404.510a (emphasis added). 

Conversely, a deduction overpayment “is generally caused by excess earnings.” Tomic v. 

Sullivan, No. 89 C 2054, 1992 WL 43241 at *3 n.5 (N.D. Ill. Feb. 28, 1992). 

The SSA categorized Bynum’s overpayment as an entitlement overpayment (AR 97), and 

accordingly, the ALJ applied the entitlement overpayment standard for fault. (AR 12.) Under the 

entitlement overpayment standard, an individual is not without fault if the facts show that an 

incorrect payment resulted from: “(a) an incorrect statement made by the individual which he 

knew or should have known to be incorrect; (b) a failure to furnish information which he knew or 

should have known to be material; or (c) acceptance of a payment which he either knew or could 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 4 of 8
5 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

have been expected to know was incorrect.” 20 C.F.R. § 404.507(a)-(c). 

Considering Bynum’s testimony and the evidence in the record, the ALJ determined that 

Bynum knew or could be expected to know that he was being overpaid. (AR 12-14.) The ALJ 

found Bynum’s “protestations of ignorance” regarding the distinction between net and gross pay 

to be “not believable.” (AR 14.) The ALJ noted that Bynum possesses an advanced degree 

(Ph.D.) and that nothing in his “education, work experience, or intelligence” supported Bynum’s 

claimed confusion between net and gross pay. (AR 13-14.) The ALJ emphasized that Bynum 

acknowledged that the earning limits were based on gross pay when he applied for benefits. (AR 

14.) Furthermore, the ALJ found Bynum was adequately “informed of the reporting 

requirements” necessary to prevent an overpayment. (Id.) Because the ALJ found that Bynum 

could be expected to know of the overpayment and failed to take measures to prevent it, the ALJ 

found him to be not without fault in causing the overpayment. (Id.) 

To support his argument that he was without fault, Bynum points to the capitalization 

pattern of “take home” and “gross” on his waiver application form as the source of his confusion 

on the earning limits. As the Commissioner notes, this document was submitted in May 2012, and 

therefore, could not have been the basis for his failure to report his gross earnings in 2010 or 2011. 

Additionally, Bynum argues the SSA was “negligent” in “leading [him] to proceed” with his belief 

that the earning limits were based on net rather than gross pay. (Id. at 7). This also cannot sustain 

a basis to prove he was without fault as consideration of fault “applies only to the individual” and 

any possible fault of the SSA does “relieve” the individual of fault. 20 C.F.R. § 404.507. 

The Court finds the ALJ’s decision that Bynum was not without fault to be supported by 

substantial evidence. Bynum acknowledged in his initial benefit application that the SSA’s 

earning limits were based on gross pay. (AR 17.) Based on his high level of education and his 

work experience, Bynum knew or should have known the difference between gross and net pay. 

(Id.) Moreover, in his administrative hearing testimony, Bynum stated that he applied for benefits 

with the intent to “cease working.” (AR 161.) However, Bynum continued to work and failed to 

report this to the SSA. (AR 67-93.) From the outset, Bynum was notified of his reporting 

responsibilities and his duty to notify the SSA of any changes in circumstances such as returning 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 5 of 8
6 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

to work. Based on the record as a whole, the Court finds that the ALJ’s decision was supported by 

substantial evidence. 

Bynum also argues that the ALJ’s finding that he was evasive in his testimony was 

erroneous and led to an unfavorable decision.1 An ALJ may reject a plaintiff’s testimony if the 

rejection is “accompanied by a specific finding to that effect, supported by a specific, cogent 

reason for the disbelief.” Lewin v. Schwieker, 654 F.2d 631, 635 (9th Cir. 1981). A specific basis 

for rejection of testimony is “necessary” so that the court may “properly determine” if the ALJ’s 

decision is “supported by substantial evidence.” Id. To support his finding that Bynum was 

evasive in his testimony, the ALJ cited Bynum’s failure to explain the amount of tax he owed and 

Bynum’s purported attempt to delay the hearing through an unnecessary subpoena. (AR 14.) 

Bynum argues that he “stated that the amount of taxes owed was hundreds of thousands of 

dollars.” (Pl. Br. at 7.) On the contrary, Bynum never stated the amount he owed despite the 

ALJ’s inquiry into the amount. (AR 156-57.) Instead, Bynum merely suggested it was “quite a 

bit.” (AR 157.) The Court finds the ALJ’s assessment of Bynum’s testimony to be supported by 

substantial evidence.2

2. The ALJ’s decision is free of harmful legal error. 

When the SSA evaluated Bynum’s request for a waiver of overpayment, it determined that 

the overpayment was an entitlement overpayment, rather than a deduction payment. (AR 97.) 

Subsequently, the ALJ applied the entitlement overpayment standard for fault to Bynum’s 

 

1

 In his brief, Bynum repeatedly argues that the ALJ “failed to attest that he is fair and 

equitable.” (See Pl. Br. at 7). The ALJ has a duty to preside over a hearing that is not “strict in 

tone or operation” and that is “fundamentally fair.” Richardson v. Perales, 402 U.S. 389, 400-01 

(1971). Additionally, regulations require that an administrative judge shall not conduct a hearing 

if he or she is “prejudiced or partial.” 20 C.F.R. § 404.940. Nothing in the record suggests the 

ALJ conducted an unfair proceeding or was biased in any way. Pursuant to 20 C.F.R. section 

404.940, Bynum had a right to object to the presiding ALJ and seek a new judge. Nothing in the 

record suggests Bynum did so or had grounds to do so. The Court finds no grounds to overturn 

the ALJ’s decision on this basis, and it denies Bynum’s motion to the extent it rests on this 

argument. 

2

 Because the Court finds the ALJ’s decision that Bynum was not without fault in creating 

the overpayment to be supported by substantial evidence, the Court does not reach Bynum’s 

argument that the recovery of the overpayment defeats the purpose of Title II of the Social 

Security Act. 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 6 of 8
7 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

United States District Court 

Northern District of Californi

a

requested waiver of overpayment. Though not raised by Bynum, the Commissioner notes that the 

ALJ may have incorrectly applied the entitlement overpayment standard rather than the deduction 

overpayment standard. 

Under federal regulations, entitlement overpayments and deduction overpayments have 

separate and distinct standards of fault. See 20 C.F.R. §§ 404.507, 404.510, 404.510a, 404.511. 

The deduction overpayment standard for fault requires an individual to exercise a “high degree of 

care” that varies with the plaintiff’s “circumstances and situation.” 20 C.F.R. § 404.511. 

Conversely, the entitlement standard merely requires an individual not to make incorrect 

statements, not to accept incorrect payments, and to report material information. See 20 C.F.R. § 

404.507. As such, the deduction standard is more stringent than the entitlement standard. See, 

e.g., Rogman v. Colvin, No. 4:14CV3101, 2015 WL 8483288 at *7 n.8 (D. Neb. Dec. 9, 2015) 

(finding that the plaintiff failed to meet “the lesser entitlement-overpayment standard, which 

means he necessarily failed to meet the more stringent deduction-overpayment standard of fault.”). 

Although a federal district court reviews a denial of a waiver request for legal error, the 

court has “long recognized that harmless error principles apply in the Social Security Act context.” 

Molina v. Astrue, 674 F.3d 1104, 1115 (9th Cir. 2012). Courts deem “legal errors harmless where 

it was clear they did not alter the ALJ’s decision.” Id. In doing so, the court “look[s] at the record 

as a whole to determine whether the error alters the outcome of the case.” Id. Because the ALJ 

found that Bynum failed to show he was not without fault for the lesser entitlement standard, any 

error in failing to apply the more stringent deduction standard is harmless. Accordingly, even 

when assuming arguendo that the SSA and ALJ wrongly categorized Bynum’s overpayment as an 

entitlement overpayment, there is no basis to overturn the ALJ’s decision based on legal error. 

CONCLUSION 

For the foregoing reasons, the Court GRANTS the Commissioner’s Cross-Motion for 

Summary Judgment and DENIES Bynum’s Motion for Summary Judgment. 

// 

// 

// 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 7 of 8
United States District Court 

Northern District of Californi

a

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

27 

28 

Da

The Co

IT IS S

ted: July 28,

ourt shall issu

SO ORDER

, 2016 

ue a separate

RED. 

8

 judgment, 

___

JEF

Un

and the Cler

__________

FFREY S. W

nited States D

rk shall close

___________

WHITE 

District Judg

e the file. 

__________

ge 

_______ 

Case 4:15-cv-02222-JSW Document 28 Filed 07/28/16 Page 8 of 8