Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-06108/USCOURTS-cand-3_06-cv-06108-2/pdf.json

Nature of Suit Code: 444
Nature of Suit: Civil Rights Welfare
Cause of Action: 28:1331 Fed. Question

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UNITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TERRENCE DAVIS, on behalf of himself and

all others similarly situated,

Plaintiff,

v.

MICHAEL J. ASTRUE, Commissioner of

Social Security

Defendant.

_____________________________________/

No. C 06-6108 MHP

MEMORANDUM AND ORDER

Re: Defendant’s Motion to Dismiss

Second Amended Complaint

Plaintiff Terrence Davis (“plaintiff”) filed this putative class action against the

Commissioner of Social Security (“defendant”) on September 29, 2006. Plaintiff’s Second

Amended Complaint (“SAC”) alleges a cause of action for violations of Section 504 the

Rehabilitation Act of 1973 (“Rehabilitation Act” or “section 504”), violations of the Due Process

Clause of the Fifth Amendment, and “Bad Faith.” Now before the court is defendant’s motion to

dismiss this action for 

failure to comply with this court’s previous order, and for failure to state a claim upon which relief

can be granted. Having considered the parties’ submissions and arguments, and for the reasons set

forth below, the court enters the following memorandum and order.

BACKGROUND

I. Allegations in Plaintiff’s Second Amended Complaint

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Plaintiff is a San Francisco resident suffering from chronic schizophrenia. SAC ¶¶ 1 & 4. In

1985, the Social Security Administration (“SSA”) found plaintiff to be disabled due to severe mental

disability. Id. ¶ 4. On April 2, 2005 SSA issued to plaintiff a Notice of Disability Cessation based

on a “work review,” which indicated that plaintiff had been gainfully employed and therefore not

entitled to benefits. Id. ¶ 5. SSA determined that plaintiff had not qualified for disability benefits

since August 1999, and assessed an overpayment of $66,964. Id. SSA subsequently reduced this

assessment to $47,044. Id. Plaintiff asserts that he was not afforded the same procedures provided

to people with physical (as opposed to mental) disabilities who are subject to work reviews. Id. ¶ 6. 

In particular, plaintiff claims that he was not given a comprehensive review by the local field office

involving consideration of pertinent factors, and that he was never given a meaningful opportunity to

appeal his initial decision before his claims file was sent to SSA’s Payment Center in Baltimore,

Maryland to be processed for termination. Id. Plaintiff additionally claims that SSA conceded that

it had denied plaintiff meaningful access to Social Security benefits when the SAA determined that

plaintiff’s benefits should not have been terminated. Id. ¶ 8.

Plaintiff purports to represent a class consisting of “all current and future applicants,

beneficiaries, and recipients of SSA programs who have disabilities which are primarily mental or

invisible and who have made, are making, or in the future, may make attempts to return to work.” 

Id. ¶ 15. According to plaintiff’s complaint, SSA systematically terminates the benefits of persons

with mental disabilities based on work reviews by failing to apply treatment equal to the treatment

given to persons with physical disabilities. Id. ¶¶ 13–29. In particular, plaintiff identifies the

following failings on the part of SSA: (1) failing to provide training to Claim Representatives (CRs)

regarding mental disorders and anti-psychotic medication that is equivalent to the training provided

regarding non-mental disabilities; (2) failing to apply factors equivalent to those for persons with

non-mental disabilities before terminating benefits based on work continuing disability review

(“work CDR”) determinations; and (3) authorizing “low level” CRs to terminate Social Security

benefits without seeking professional input. Id. ¶¶ 23–25. Plaintiff asserts that the CRs are bound

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by an unlawful internal SSA policy that requires them to apply a “mechanical formula” without

taking into account the specific circumstances applicable to a mental health patient. Id. ¶ 28.

Plaintiff claims that this system results in a disparate impact on people with mental

disabilities, and that SSA “intentionally and in bad faith” ignores a Congressional mandate

forbidding a CR to terminate an individual who has a mental disability without a medical evaluation. 

Id. ¶¶ 31–32, 36. In support of these claims, plaintiff cites statistical evidence showing that

approximately 28.3% of individuals with a disability have a primary mental component, and

approximately 45% of these individuals are terminated. Id. ¶ 37. Plaintiff also cites a portion of the

Social Security Reform Act of 1984 dealing with the need to review mental impairment claims

regardless of whether or not the individual is engaged in substantial gainful employment. Id. ¶ 36. 

In addition to statutory violations, plaintiff alleges that this system violates the Due Process Clause

of the Fifth Amendment by depriving plaintiff of a protected property interest without adequate

notice and an opportunity to be heard. Id. ¶ 43.

Finally, plaintiff brings a cause of action titled “Bad Faith,” purportedly based on three

separate allegations. First, plaintiff claims that during oral argument on defendant’s motion to

dismiss the First Amended Complaint (FAC), defendant for the first time provided information that

establishes a prima facie case of noncompliance with applicable regulations. Id. ¶ 45. Second,

plaintiff asserts that defendant refused in bad faith to comply with plaintiff’s Freedom of

Information Act request regarding statistical information. Id. ¶ 46. Third, plaintiff claims that

defendant refused in bad faith to assign his case to the Office for Civil Rights or another federal

agency rather than using its own general counsel, creating a conflict of interest. Id. ¶ 47.

II. Procedural History

Plaintiff filed his FAC on November 6, 2006. Defendant moved to dismiss plaintiff’s FAC,

and the court granted defendant’s motion with leave to amend. The court dismissed plaintiff’s

causes of action under the Due Process Clause, Freedom of Information Act, and “Bad Faith”

allegations with prejudice, granting leave to amend only with respect to plaintiff’s Rehabilitation

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Act Claim. Docket Entry 26 (hereinafter “April 2007 Order”). In granting leave to amend, the court

instructed that “plaintiff is given leave to amend this claim to set forth facts, if he can, that allege

mentally disabled persons are denied meaningful access to social security benefits by reason of

SSA’s policies or procedures, spelling out those policies or procedures.” Id. at 16. Plaintiff filed his

SAC on April 23, 2007, providing additional detail with respect to his Rehabilitation Act claim, and

re-alleging the factual bases for his previously dismissed Due Process, FOIA and “Bad Faith”

claims. Defendant now moves to strike previously dismissed claims that have been re-asserted in

the SAC, and to dismiss plaintiff’s Rehabilitation Act claim for failure to state a claim upon which

relief may be granted.

LEGAL STANDARD

I. Motion to Strike

Under Rule 12(f), a court may strike a pleading—or any portion thereof—that is “redundant,

impertinent, or scandalous.” Rule 12(f) motions are generally disfavored, and the remedy of striking

a pleading is to be used when necessary to discourage parties from raising allegations completely

unrelated to the relevant claims and when the interests of justice so require. See Augustus v. Bd. of

Pub. Instruction, 306 F.2d 862, 868 (5th Cir.1962); see also Federal Deposit Ins. Corp. v. Niblo, 821

F. Supp. 441, 449 (N.D. Tex. 1993) (noting that Rule 12(f) motions will be granted when necessary

to discourage parties from filing “dilatory” pleadings and papers).

II. Motion to Dismiss

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) “tests the legal

sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Because Rule

12(b)(6) focuses on the “sufficiency” of a claim—and not the claim’s substantive merits—“a court

may [typically] look only at the face of the complaint to decide a motion to dismiss.” Van Buskirk

v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). Although the court is generally

confined to consideration of the allegations in the pleadings, when the complaint is accompanied by

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attached documents, such documents are deemed part of the complaint and may be considered in

evaluating the merits of a Rule 12(b)(6) motion. Durning v. First Boston Corp., 815 F.2d 1265,

1267 (9th Cir. 1987).

A motion to dismiss should be granted if plaintiff fails to proffer “enough facts to state a

claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, ___ U.S. ____, 127 S. Ct.

1955, 1974 (2007). Dismissal can be based on the lack of a cognizable legal theory or the absence

of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 901

F.2d 696, 699 (9th Cir. 1990). Allegations of material fact are taken as true and construed in the

light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38

(9th Cir. 1996). The court need not, however, accept as true allegations that are conclusory, legal

conclusions, unwarranted deductions of fact or unreasonable inferences. See Sprewell v. Golden

State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Clegg v. Cult Awareness Network, 18 F.3d 752,

754–55 (9th Cir. 1994).

DISCUSSION

I. Motion to Strike

Defendant claims that the majority of plaintiff’s SAC does not comply with the April 2007

Order and therefore should be stricken or dismissed. Specifically, the SAC restates claims under the

Due Process Clause with an additional factual allegation based on the implementing regulations of

the Rehabilitation Act; restates the “Bad Faith” claims with an additional factual allegation related to

defense counsel’s oral argument in this action; and alleges a new a separate cause of action

captioned as “Disparate Impact and/or Intentional Theory.”

In response, plaintiff claims that these allegations do not constitute separate causes of action

per se, but rather are pled to “give a fuller understanding of the case at hand.” Opp. at 2. Plaintiff

confirms that he is only pursuing a cause of action based on alleged violations of section 504. Id.

The confusion regarding this issue is a result of sloppy drafting on the part of plaintiff’s

counsel. The complaint is drafted in such a way as to suggest that plaintiff has asserted four separate

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causes of action: “Violation of Section 504 of the Federal Rehabilitation Act of 1973,” “Disparate

Impact and/or Intentional Theory,” “Noncompliance with Regulations Implementing Section 504,”

and “Bad Faith.” While plaintiff claims that each of these separate sections is merely a separate

basis for the asserted Section 504 violation, plaintiff also explicitly claims a violation of the Due

Process Clause. To avoid confusion, the portion of the complaint alleging the Due Process violation

should be stricken. Accordingly, Paragraph 43 of the SAC is stricken.

Regarding plaintiff’s re-asserted factual allegations concerning his FOIA request and

defendant’s refusal to reassign his case, this court previously held that it lacked subject matter

jurisdiction over plaintiff’s FOIA claim, and that plaintiff’s allegations of Bad Faith failed to state a

claim upon which relief can be granted under any applicable legal theory. Plaintiff may not now

preserve these allegations as theories of a separate claim. Accordingly, Paragraphs 46 and 47 of the

SAC are stricken.

II. Motion to Dismiss

A. Meaningful Access

Setting aside the parties’ extensive briefing regarding ancillary issues, the sole issue to be

decided regarding defendant’s motion to dismiss based on failure to state a claim is whether plaintiff

has pled facts “that allege mentally disabled persons are denied meaningful access to social security

benefits by reason of SSA’s policies or procedures, spelling out those policies or procedures.” April

2007 Order at 16. Plaintiff’s complaint sets forth specific SSA policies and practices that allegedly

deny mentally disabled persons meaningful access by failing to adequately account for the particular

issues and difficulties faced by persons with mental disabilities. In particular, plaintiff alleges that

he was wrongfully denied benefits, and made to suffer additional injuries even after his benefits

were restored, due to SSA’s failure to adequately evaluate the needs of mentally disabled persons. 

The Ninth Circuit has held that “meaningful access” under the Rehabilitation Act requires an agency

to “consider the particular needs of disabled” persons seeking benefits. Armstrong v. Davis, 275

F.3d 849, 862 (9th Cir. 2001). Additionally, the standard may require the agency to make

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“reasonable, but not fundamental or substantial, modifications to its programs.” Bird v. Lewis &

Clark Coll., 303 F.3d 1015, 1020 (9th Cir. 2002). The question of reasonableness requires a

“fact-specific, individualized analysis” based on the circumstances of the case. Id. (internal

quotations omitted). 

Accordingly, because plaintiff has identified the alleged SSA practices and the purported

impact on mentally disabled individuals, the issue of whether SSA’s programs deny “meaningful

access” is an issue of fact beyond the scope of a Rule 12(b)(6) motion. Defendant’s motion must

therefore be denied.

B. The Parties’ Additional Contentions

Although plaintiff has sufficiently pled a cause of action under the Rehabilitation Act for

denial of meaningful access, the parties raise several other issues which the court will address

briefly.

1. Congressional Intent

Defendant asserts that the Social Security Act provides that benefits may be terminated

where earnings indicate the ability to perform substantial gainful activity, regardless of medical

condition. 42 U.S.C. §§ 421(m)(2)(B), 423(d)(4)(A). Because SSA is not required to consider

medical condition at all in the face of evidence related to substantial gainful activity, defendant

argues that SSA is not required to consider any differences between physically disabled individuals

and mentally disabled persons. Accordingly, defendant argues that the additional training plaintiff

seeks in his complaint is inconsistent with the provisions of the Social Security Act. Defendant

asserts that this clear congressional mandate cannot be invalidated by the more general provision in

the Rehabilitation Act that all individuals be provided with meaningful access. This argument is

based on the canon that a “general statutory provision may not be used to nullify or to trump a

specific provision, irrespective of the priority of enactment.” California ex rel. Sacramento Metro.

Air Quality Mgmt. Dist. v. United States, 215 F.3d 1005, 1013 (9th Cir. 2000). This argument does

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not warrant dismissal of plaintiff’s complaint. Indeed, the canon could also be read to apply in the

opposite direction—the Social Security Act’s general provision that benefits may be terminated

without respect to medical condition need not trump the Rehabilitation Act’s requirement that the

needs of disabled individuals be accounted for in administering public benefits. Defendant’s

arguments regarding Congress’ fervent activity in repeatedly amending the Social Security Act

without adding a requirement to consider medical condition in terminations based on substantial

gainful activity is likewise not dispositive of the issue before the court.

2. Internal Noncompliance

As a separate theory supporting plaintiff’s cause of action, plaintiff’s SAC alleges that SSA

fails to follow its own rules and regulations. In support of this assertion, the SAC cites sections of

the Program Operations Manual System (POMS) that, as defendant points out and plaintiff appears

to acknowledge, are wholly inapplicable to plaintiff’s individual benefit claim and therefore

irrelevant to the instant action. SAC ¶ 36. In a cryptic footnote, plaintiff claims that this portion of

the complaint does not constitute an exhaustive list of SSA’s unlawful methods of administration. 

Plaintiff additionally cites the lengthiness of the POMS and appears to put the onus on defendant to

present examples of unlawful practices through discovery. Because the POMS is a public document

setting forth rules and regulations, it is plaintiff’s burden to set forth which specific provisions he

contends demonstrate that SSA practices are unlawful.

Relatedly, defendant claims that no cause of action may arise from SSA’s treatment of

plaintiff’s own benefits claim because, in processing plaintiff’s claim, SSA followed its own internal

procedures. These are precisely the procedures that plaintiff alleges are unlawful under the

Rehabilitation Act, and defendant’s arguments therefore fail. Likewise, the issue of whether

plaintiff’s asserted injuries amount to a denial of meaningful access is a factual issue and does not

warrant dismissal of the complaint.

3. Substantial and Gainful Activity

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UNITED 

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For the Northern District of California

Plaintiff argues at length, and quotes extensively from a number of cases and Social Security

rulings, regarding the requirement that SSA determine that activity be both “substantial” and

“gainful” before terminating benefits. Plaintiff perhaps interprets this standard as requiring a mental

health review prior to termination, despite the fact that none of these cases support this conclusion. 

Rather, the cases speak to the need to establish that activity is “substantial” and “gainful” based on

the hours worked and the income earned, independent of medical condition. Accordingly, the court

does not consider plaintiff’s arguments in this regard; they are entirely irrelevant to the instant

motion.

CONCLUSION

For the reasons stated above, the court GRANTS IN PART and DENIES IN PART

defendant’s motion to dismiss. Paragraphs 43, 46 and 47 of plaintiff’s Second Amended Complaint

are hereby STRICKEN. Plaintiff’s sole cause of action is one for violation of the Rehabilitation Act

based on defendant’s alleged failure to provide meaningful access to public services.

IT IS SO ORDERED.

Dated: July 17, 2007

_______________________________

MARILYN HALL PATEL

United States District Court Judge

Northern District of California

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