Court Opinion

ID: 3045301
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:16:09.337869+00
Date Added: 2024-06-11T12:33:21.952178
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 07-1895
                                   ___________

James W. Stanley, Jr.,                *
                                      *
       Appellant,                     * Appeal from the United States
                                      * District Court for the
       v.                             * Eastern District of Arkansas.
                                      *
Michael J. Astrue, Commissioner of    * [UNPUBLISHED]
Social Security,                      *
                                      *
       Appellee.                      *
                                 ___________

                              Submitted: August 19, 2008
                                 Filed: September 30, 2008
                                  ___________

Before MURPHY, BYE, and BENTON, Circuit Judges.
                           ___________

PER CURIAM.

       Attorney James W. Stanley, Jr., appeals the district court’s1 dismissal of his
action challenging the Social Security Administration’s (SSA’s) decision to suspend
him from representing claimants. Stanley previously represented Joyce Martin on her
claims for disability insurance benefits (DIB) and supplemental security income (SSI).
Under their contract, Martin agreed to pay Stanley the lesser of 25% of all past due
benefits, or $4,000, if there was a favorable outcome on her applications. An

       1
        The Honorable James M. Moody, United States District Judge for the Eastern
District of Arkansas.
administrative law judge (ALJ) found Martin entitled to SSI and DIB based on her
mental problems and concluded that the fee agreement met statutory conditions. Soon
thereafter Stanley wrote to Martin, directing her to send him 25% of her retroactive SSI
benefits.

         The Social Security Administration (SSA) later notified Martin that Stanley was
entitled to no more than $4,000 on her DIB claim. Stanley was copied on the notice,
and the SSA issued him a $4,000 check for the DIB claim. Approximately a month
later, the SSA informed Martin that she was entitled to almost $20,000 in back benefits
on her SSI claim, and that she would be notified later as to how much Stanley could
charge. Before the allowable fee was determined, Stanley collected $4,000 from
Martin on her SSI claim; he did not place the money in a trust or escrow account.
After the SSA informed Martin, in a letter copied to Stanley, that she was responsible
for paying Stanley only $4,000 total on both her SSI and DIB claims, Stanley moved
for reconsideration arguing he was entitled to another $4,000 on the SSI claim.
Meanwhile he offered to refund Martin $2,500, and he wrote to the ALJ representing
that he and Martin had compromised on the fee; Martin’s contemporaneous letters to
the ALJ reflected her confusion on the matter. The ALJ directed Stanley to remit the
entire $4,000, because he was prohibited from collecting separate fees on the SSI and
DIB claims; Stanley did not repay Martin until around six months later.

        The SSA charged Stanley under specified statutes and regulations with
collecting and retaining a fee in excess of the SSA-authorized fee; misleading Martin
as to her benefits and other rights; and knowingly making false or misleading
statements on an SSA matter. After a hearing, an ALJ found against Stanley and
suspended him for five years from representing parties before the SSA; the Appeals
Council affirmed. This counseled lawsuit followed, in which Stanley asserted
jurisdiction under 42 U.S.C. § 405(g) and the Administrative Procedures Act (APA).

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        We agree with the district court that Stanley did not properly invoke jurisdiction
under section 405(g), which applies to DIB claims and provides that “[a]ny individual,
after any final decision of the Commissioner of Social Security made after a hearing
to which he was a party . . . may obtain a [judicial] review of such decision.” See 42
U.S.C. § 405(g); see also 42 U.S.C. § 405(h) (no decision shall be reviewed “except
as herein provided,” i.e., under § 405(g)); 42 U.S.C. § 1383(c)(3) (§ 405(g) also applies
to SSI claims); Jenkins v. Kansas City Mo. Sch. Dist., 516 F.3d 1074, 1080 (8th Cir.
2008) (de novo standard of review).

         We find it significant that, in a prior case involving a challenge to an attorney’s
fees determination, this court was not persuaded that judicial review under section
405(g) is available to attorneys. See Copaken v. Sec’y of Health, Educ. & Welfare,
590 F.2d 729, 731 (8th Cir. 1979) (per curiam) (noting that if review was not provided
for in § 405(g), then it was precluded by § 405(h)). Other circuit decisions support the
district court’s conclusion that section 405(g) did not confer jurisdiction to review the
merits of Stanley’s suspension. See Ezell v. Bowen, 849 F.2d 844, 845-46 (4th Cir.
1988) (per curiam) (applicable regulatory provisions provide for judicial review of
only “initial determinations,” which do not include decisions to disqualify or suspend
persons from acting as representatives); Howard v. Bowen, 823 F.2d 185, 186 (7th Cir.
1987) (§ 405(g) authorizes civil actions merely to review decisions denying disability
benefits); McCarthy v. Sec’y of Health & Human Servs., 793 F.2d 741, 743 (6th Cir.
1986) (attorneys are not “parties” to administrative proceedings for purposes of
§ 405(g)). We thus reject Stanley’s contention that the regulations precluding judicial
review of an administrative decision to suspend a representative are contrary to section
405(g). Further, we agree with the district court that the APA is not an alternative
basis for jurisdiction. See Califano v. Sanders, 430 U.S. 99, 104-07 (1977) (APA does
not independently grant district courts subject matter jurisdiction to review SSA
decision).

                                            -3-
        Although there is a basis for judicial review when colorable constitutional
claims are at issue, see id. at 109, the district court correctly determined that Stanley
did not raise any such claims, see Sabhari v. Mukasey, 522 F.3d 842, 844 (8th Cir.
2008) (per curiam) (to be colorable, constitutional claim must have “some possible
validity” (quoted case omitted)). Stanley has taken the position throughout these
proceedings that he is raising only a claim of substantive due process, but we see no
basis for any colorable claim under traditional substantive due process analysis, see
Ganley v. Minneapolis Park & Recreation Bd., 491 F.3d 743, 749 (8th Cir. 2007)
(court must consider whether appellant is asserting right rooted in nation’s history and
tradition, and implicit in concept of ordered liberty, and whether complained-of
action is truly irrational); and in any event, his specific contentions--about notice,
vagueness, a chilling effect, and deprivation of a valuable property right without sworn
witnesses--are more consistent with procedural due process or First Amendment
claims.

        Giving Stanley the benefit of the doubt by examining whether his assertions
support a colorable procedural due process or First Amendment claim, as did the
district court, we conclude that they do not. First, as to notice of proscribed conduct,
the statute itself precludes Stanley from collecting $4,000 for the DIB claim and also
for the SSI claim. See 42 U.S.C. §§ 406(a)(2)(A),(C), 1383(d)(2)(A) (in case
involving both SSI and DIB claims, Commissioner may approve fee agreement only
if total fee or fees specified in agreement does not exceed, in aggregate, $4,000
(emphasis added)).2 Further, when Stanley agreed to represent Martin, he certified on
a form he signed that he would not collect any fee unless it had been approved under
the laws, regulations, and rulings cited and summarized on the form, which included
that, even after the SSA approved a fee agreement, the SSA would notify the claimant
of how much the representative could collect on a successful claim; that a fee could be

       2
       We find it odd that Stanley claims ignorance of this provision, given his
testimony that he had represented claimants before the SSA since the early 1980s and
devoted about half of his practice to SSA cases.
                                           -4-
collected in advance only if it was held in trust or escrow; and that attorneys could be
suspended or disqualified from representing anyone before the SSA if they collected
an unauthorized fee.

         Second, we fail to see how the regulations are vague and ambiguous: they
clearly provide that when there is evidence that a representative has engaged in
prohibited acts--such as knowingly misleading a claimant as to her rights, or
knowingly charging, collecting, or retaining a fee--the SSA may begin proceedings to
disqualify or suspend the representative. See 20 C.F.R. §§ 404.1740(c), 404.1745(b),
416.1540(c), 416.1545(b); cf. Woodis v. Westark Comty. Coll., 160 F.3d 435, 438 (8th
Cir. 1998) (vague regulation violates due process as it does not define offense with
sufficient definiteness that ordinary people can understand prohibited conduct, and
does not establish standards to permit enforcement in non-arbitrary, non-discriminatory
manner). Third, we are unpersuaded by Stanley’s assertion that he was deprived of a
valuable property right without the use of sworn witnesses because he had an
opportunity to testify at the administrative hearing, he did not challenge the evidence
before the ALJ, and he declined to offer any other evidence. Fourth, as to what the
district court construed as an overbreadth challenge to the regulations, Stanley was not
denied the opportunity to raise a bona fide fee dispute to the SSA, which is clearly
allowed under 20 C.F.R. §§ 404.1720(d), 416.1520(d) (review of fee determinations).
Rather, he was sanctioned for collecting an illegal fee despite his unsupported
protestations that the fee was allowed.

        Finally, Stanley’s contention that the regulations conflict with section 406(a)
appears to be a Chevron3 challenge to sections 404.1745 and 416.1545. To the extent
the district court could entertain such a challenge when it lacked jurisdiction to review
the substance of the suspension decision, we conclude any Chevron challenge was
properly rejected. See Friends of the Boundary Waters Wilderness v. Bosworth, 437

       3
        See Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837 (1984).
                                           -5-
F.3d 815, 821-22 (8th Cir. 2006) (Chevron analysis); see also Bowen v. Yuckert, 482
U.S. 137, 145 (1987) (where Social Security Act makes Commissioner responsible for
implementing provision by regulation, judicial review is limited to determining
whether regulation exceeds Commissioner’s statutory authority and is arbitrary and
capricious). In contrast to Stanley’s position on the matter, both the statute and the
challenged regulations describe the Commissioner’s decision whether to begin
proceedings to disqualify or suspend a claimant’s representative for collecting an
illegal fee in permissive, not mandatory, terms.

       Accordingly, we affirm.
                    _________________________________

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