Court Opinion

ID: 2717143
Source: CourtListenerOpinion
Date Created: 2014-08-11 19:00:32.857974+00
Date Added: 2024-06-11T15:25:53.263006
License: Public Domain

FILED
                                                 United States Court of Appeals
                    UNITED STATES COURT OF APPEALS       Tenth Circuit

                           FOR THE TENTH CIRCUIT                      August 11, 2014

                                                                    Elisabeth A. Shumaker
                                                                        Clerk of Court
JEANETTE A. WICKS,

             Plaintiff-Appellant,

v.                                                       No. 13-1542
                                                (D.C. No. 1:12-CV-01510-RBJ)
CAROLYN W. COLVIN, Acting                                 (D. Colo.)
Commissioner of Social Security,

             Defendant-Appellee.

                           ORDER AND JUDGMENT*

Before TYMKOVICH, HOLMES, and McHUGH, Circuit Judges.

      Jeanette A. Wicks, proceeding pro se, appeals the district court’s judgment

affirming the Social Security Commissioner’s application of the Government Pension

Offset (“GPO”) provision of the Social Security Act (the Act) to reduce the amount

of Ms. Wicks’ social security survivor’s benefit throughout her lifetime. Exercising

jurisdiction under 28 U.S.C. § 1291 and 42 U.S.C. § 405(g), we affirm.

*
       The parties have not requested oral argument. Having examined the briefs and
appellate record, the panel concludes that oral argument would not materially assist
the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G).
Accordingly, the case is ordered submitted without oral argument. This order and
judgment is not binding precedent, except under the doctrines of law of the case, res
judicata, and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
                                   I.    Background

      For many years, Ms. Wicks worked for various state and local organizations

covered by the Public Employees’ Retirement Association of Colorado (“PERA”).

During this PERA-covered employment, Ms. Wicks was exempt from paying Social

Security taxes.

      In March 1996, after leaving PERA-covered employment, Ms. Wicks received

a lump sum payment of her PERA retirement benefits in the amount of $22,144.08,

which included Ms. Wicks’ contributions and matched contributions from her

employers. Ms. Wicks later returned to PERA-covered employment for several

years. In January 2006, she received a second lump sum payment from PERA for

$4,440.82, which also included matched employer contributions.

      Ms. Wicks began receiving a social security retirement insurance benefit (SSI

retirement benefit) in March 2006. The Social Security Administration (the Agency)

did not reduce Ms. Wicks’ SSI retirement benefit to reflect the PERA lump sum

payments. In June 2009, following the death of her former husband, Ms. Wicks

applied for a social security survivor’s benefit. At that time, the Agency informed

Ms. Wicks that the GPO applied and her survivor’s benefit would be reduced by the

prorated amount of the PERA lump sum pension payments.1 After an unsuccessful

1
       The Agency also informed Ms. Wicks that her separate social security
retirement benefit should have been reduced based upon the Windfall Elimination
Provision (WEP) of the Act. Because Ms. Wicks has not challenged the Agency’s
                                                                        (continued)
                                        -2-
request for reconsideration, Ms. Wicks sought a hearing before an Administrative

Law Judge (“ALJ”). At that hearing in July 2011, Ms. Wicks waived her right to

representation and testified on her own behalf. Ms. Wicks’ efforts were successful,

in part.

       A. The ALJ’s Decision

       The ALJ determined that the GPO provision applied to Ms. Wicks’ survivor’s

benefit, but only with respect to the January 2006 lump sum payment. In reaching

his conclusion, the ALJ first prorated the two lump sum pension payments to a

monthly value and then calculated their extinguishment dates according to actuarial

tables in the Agency’s Program Operations Manual System (“POMS”). For example,

because Ms. Wicks was 55 at the time of the March 1996 lump sum payment, the

ALJ adopted the actuarial value of 140.9 to prorate that payment. See POMS GN

02608.400(D)(3)(b). Specifically, the ALJ divided the $22,144.08 received in the

1996 lump sum by that 140.9 figure to arrive at the monthly value of the March 1996

PERA benefit. In addition to using the actuarial value to prorate the lump sum

payments to a monthly value, the ALJ used it to calculate the date upon which the

lump sum amount would be extinguished. Assuming that the “end of the prorated

period for the first lump sum, as indicated by the actuarial charts, is 140.9 months

after receipt, or December 1, 2007,” Admin. R. at 25 (emphasis added), the ALJ

application of the WEP on appeal, we do not address that issue in our recitation of
the facts or analysis.

                                          -3-
concluded the March 1996 lump sum payment “was deemed extinguished” before

Ms. Wicks became entitled to survivor’s benefits in June 2009. See id. at 25-26.

      Next, the ALJ determined that the POMS guidelines were ambiguous as to

whether the GPO applied when the prorated period ended before the entitlement to

benefits commenced. He therefore, resolved the ambiguity in favor of Ms. Wicks

and held the March 1996 lump sum payment was not subject to the GPO. In contrast,

because the January 2006 lump sum payment was not extinguished prior to

Ms. Wicks’ entitlement to survivor’s benefits, the ALJ concluded it was subject to

the GPO throughout Ms. Wicks’ lifetime.

      B. The Appeals Council Decision

      Concerned that the ALJ’s decision may include an error of law, the Social

Security Appeals Council notified Ms. Wicks that it was reviewing the decision on its

own motion. See 20 C.F.R. § 404.969(a); id. § 404.970(a)(2). The Appeals Council

disagreed with the ALJ’s conclusion that the GPO did not apply to the March 1996

lump sum payment. It explained that where the relevant pension plan does not

specify the payment period, Agency policy is to prorate the lump sum as if it were to

be received monthly over a lifetime, which results in a corresponding lifetime

reduction of the individual’s monthly survivor’s benefit. See 20 C.F.R.

§ 404.408a(a); POMS GN 02608.400(A); see also POMS GN 02608.400(D)(3)(b).

Accordingly, the Appeals Council ordered that Ms. Wicks’ monthly benefits be

                                        -4-
recalculated. It did not address, and, therefore, did not disturb the ALJ’s finding

regarding application of the GPO to the January 2006 lump sum pension payment.

      Ms. Wicks sought judicial review of the Appeals Council’s decision, and the

district court affirmed. See Williams v. Bowen, 844 F.2d 748, 749 (10th Cir. 1988)

(holding that Appeals Council’s decision is the Commissioner’s final decision);

20 C.F.R. § 404.981. She now appeals.

                                    II.    Discussion

      A. Standard of Review

      “We review the Commissioner’s decision to determine whether the factual

findings are supported by substantial evidence in the record and whether the correct

legal standards were applied.” Watkins v. Barnhart, 350 F.3d 1297, 1299 (10th Cir.

2003). “Substantial evidence is such relevant evidence as a reasonable mind might

accept as adequate to support a conclusion. It requires more than a scintilla, but less

than a preponderance.” Lax v. Astrue, 489 F.3d 1080, 1084 (10th Cir. 2007) (internal

citation and quotation marks omitted). “[W]e will not reweigh the evidence or

substitute our judgment for the Commissioner’s.” Id. (internal quotation marks

omitted).

      Because Ms. Wicks proceeds pro se, we liberally construe her filings.

See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). We will not, however,

serve as her advocate. See id.

                                          -5-
      B. Analysis

      As best we can discern, Ms. Wicks raises the following challenges to the

Commissioner’s decision: (1) the Appeals Council erred in determining that the

March 1996 prorated lump sum payment did not have a finite ending date after which

the GPO would no longer reduce her survivor’s benefit; (2) the Agency acted

contrary to its Congressional authority in adopting rules allowing the reduction of

social security benefits throughout the beneficiary’s lifetime based on lump sum

retirement payments from non-covered sources; and (3) the Agency violated her

federal constitutional rights to due process and equal protection. Addressing these

issues in turn, we first conclude that because the PERA retirement plan did not

identify a specific payment period, the Agency correctly imposed the GPO for as

long as Ms. Wicks is entitled to the benefit—her lifetime. Next, we hold the Agency

acted within the authority delegated to it by Congress in adopting rules governing the

lifetime application of the GPO to lump sum retirement payments made for

unspecified time periods. Finally, we reject Ms. Wicks’ constitutional claims.

             1.     Duration of the GPO

      The GPO reduces the monthly Social Security benefits, including the

survivor’s benefit, of an individual who is also entitled to a government pension

based on non-covered employment. See 42 U.S.C. § 402(k)(5)(A); 20 C.F.R.

§ 404.408a(a). Non-covered employment is employment during which the worker’s

wages are exempt from Social Security taxes. See Stroup v. Barnhart, 327 F.3d

                                         -6-
1258, 1259 (11th Cir. 2003). Because Ms. Wicks did not pay social security taxes on

the wages received from her government employers, the PERA lump sum payments

are based on non-covered employment.

      Therefore, the GPO applies and reduces Ms. Wicks’ monthly survivor’s

benefit by “two-thirds of the amount of any monthly periodic benefit” payable based

on non-covered earnings. See 42 U.S.C. § 402(k)(5)(A); see also 20 C.F.R.

§ 404.408a(d). The Act defines “Periodic benefit” to include “a benefit payable in a

lump sum if it is a commutation of, or a substitute for, periodic payments.”

42 U.S.C. § 402(k)(5)(C). There is no dispute that the lump sum PERA payments

were a commutation of or substitute for periodic pension payments, and, thus, a

periodic pension benefit under the Act. The Act, together with the Agency

regulations and guidelines, provides instruction on converting the lump sum periodic

benefit into a monthly periodic benefit for purposes of the GPO.

      When an individual’s pension is paid in a lump sum, the Act provides that it

“shall be allocated on a basis equivalent to a monthly benefit (as determined by the

Commissioner . . .).” Id.; see also 20 C.F.R. § 404.408a(a) (“If the government

pension is not paid monthly or is paid in a lump-sum, we will determine how much

the pension would be if it were paid monthly and then reduce the monthly Social

Security benefit accordingly.”). The regulations further explain, “[t]he number of

years covered by a lump-sum payment, and thus the period when the Social Security

benefit will be reduced,” varies depending on the terms of the particular pension

                                         -7-
plan. 20 C.F.R. § 404.408a(a). The terms of the pension plan dictate the duration of

the reduction when they clearly indicate the lump sum payment is for a specified

period. Id. When the payment period is not identified in the pension plan, however,

the Agency will determine the reduction period on an individual basis. Id.

      The method of determining the reduction period for a lump sum payment, and

arriving at a monthly amount on an individual basis, is explained in the Agency’s

POMS guidelines.2 POMS GN 02608.400(D)(3) provides that “[w]hen the entire

pension is paid in a lump sum, the amount may represent a specified period of time or

a ‘lifetime.’” Where, as here, the pension-paying agency – i.e. PERA – does not

itself prorate the lump sum to establish a monthly amount for GPO purposes, the

Agency prorates it in accordance with its POMS guidelines. See id. In such

circumstances, POMS GN 02608.400(D)(3)(b) directs that the lump sum be prorated

in the same manner as a lump sum representing payments for a “lifetime.” The

method for converting a “lifetime” lump sum payment to a monthly amount is to

divide the lump sum amount by an “actuarial value,” as identified in the POMS table

that corresponds to the worker’s age on the date of the lump sum award. See id. And

because the lump sum is prorated monthly over a lifetime, the individual’s monthly
2
       “The [agency’s] policy guidelines are provided in the [POMS], which is a set
of policies issued by the [agency] ‘to be used in processing claims.’” Ramey v.
Reinertson, 268 F.3d 955, 964 (10th Cir. 2001) (quoting McNamar v. Apfel, 172 F.3d
764, 766 (10th Cir. 1999)). The POMS represents the agency’s own interpretation of
its regulations and the statutes governing its operations. See Lopes v. Dep’t of Soc.
Servs., 696 F.3d 180, 186 (2d Cir. 2012). The POMS are entitled to deference unless
they are arbitrary, capricious, or contrary to law. McNamar, 172 F.3d at 766.

                                        -8-
survivor’s benefit is also reduced throughout her life. See POMS GN 02608.400(A)

(providing that lump sum payments made for unspecified periods be “prorated as

though it is received monthly over a lifetime”). See also POMS GN

02608.400(D)(3)(b). The Agency’s application of the GPO to Ms. Wicks’ survivor’s

benefit throughout her lifetime is consistent with these guidelines.3

      The Appeals Council’s application of the relevant statute, regulations, and

POMS provisions was not arbitrary, capricious, or contrary to law and we therefore

defer to the Agency’s interpretation. See McNamar v. Apfel, 172 F.3d 764, 766

(10th Cir. 1999). The Appeals Council applied the correct legal standards and its

decision is supported by substantial evidence.4 Consequently, we do not disturb its

decision.

3
       In support of her contrary position, Ms. Wicks relies on Section (C)(5) of
POMS RS 00605.360, entitled “WEP Applicability,” which in its current version
provides that WEP application ends “when . . . the proration of a lump sum payment
based on a specified period ends.” A prior version relied on by Ms. Wicks states that
WEP application ends “when . . . the proration of lump sum payment ends.” See
Dist. Ct. R. at 21. Here, the PERA lump sum payments were not based on a specified
period.
4
      The same analysis applies to the January 2006 lump sum pension payment,
which the Appeals Council did not address, and by its silence did not disturb. Like
the March 1996 lump sum payment, PERA did not specify that the January 2006
payment represented a specified period of time. The January 2006 lump sum
payment is therefore prorated as if paid over a lifetime, which results in a
corresponding lifetime reduction of Ms. Wicks’ monthly survivor’s benefit.

                                          -9-
             2.     Congressional Authority

      Ms. Wicks next challenges the Agency’s adoption of the pertinent POMS

provisions, arguing that the Commissioner has not “been given congressional

authority to by-pass congress and the President and rewrite the statu[t]es.”5 Aplt.

Opening Br. at 4. While we agree with Ms. Wicks’ general premise, we are not

convinced the Agency has exceeded its authority. Congress delegated to the

Commissioner full power and authority to make regulations and establish procedures,

not inconsistent with the Social Security Act, which are necessary to implement the

provisions of the Act. See 42 U.S.C. § 405(a). In applying the GPO to periodic

benefits paid on other than a monthly basis – i.e., a lump sum payment – the Act

provides that such a periodic benefit “shall be allocated on a basis equivalent to a

monthly benefit (as determined by the Commissioner of Social Security).”

Id. § 402(k)(5)(C) (emphasis added). Accordingly, Congress has given the

Commissioner the express authority to administer the GPO in a manner determined

by the Commissioner.

      Our review of the Agency’s “interpretation of a statute or regulation it

administers is highly deferential.” McNamar, 172 F.3d at 766. The Agency has

adopted guidelines for the application of the GPO in situations where the period

covered by a lump sum payment is unspecified by the pension plan. Nothing in those

5
       We interpret Ms. Wicks’ references to “statutes” to mean the applicable POMS
provisions.

                                         - 10 -
guidelines directly contradicts the terms of the Act. Nor are we convinced that the

Commissioner has applied the GPO in a manner that is arbitrary, capricious, or

contrary to law. As a result, we reject Ms. Wicks’ argument that the Agency

exceeded its authority or acted contrary to law in applying the GPO.

             3.     Due Process and Discrimination Claims

      Finally, Ms. Wicks complains that her constitutional rights have been violated

in two respects. First she asserts she was denied her right to due process because the

Appeals Council failed to respond promptly to her requests for extensions of time,

failed to provide her with requested information, fabricated facts, and denied her the

opportunity to appear before the Appeals Council. Second, she raises an equal

protection claim, arguing that the GPO provision treats government retirees

discriminatorily in comparison with private retirees.

      Ms. Wicks’ complaints do not constitute a denial of due process. “[D]ue

process requires notice and a meaningful opportunity to be heard.” Standard Indus.,

Inc. v. Aquila, Inc. (In re C.W. Mining Co.), 625 F.3d 1240, 1244 (10th Cir. 2010).

Ms. Wicks appeared and had an opportunity to be heard before the ALJ. When the

Appeals Council notified Ms. Wicks of its intent to review the ALJ’s decision, it

further advised her that she could provide additional evidence and request to be

present for oral argument. Although the Appeals Council ultimately denied her

request to appear and argue, it acted within its discretion in doing so. See 20 C.F.R.

§ 404.976(c). Ms. Wicks was permitted to argue and to submit written materials to

                                         - 11 -
the ALJ and that record was available to the Appeals Council. Thus, the decision to

limit her participation at the Appeals Council to the submission of written materials

was not a deprivation of Ms. Wicks’ opportunity to be heard. Having considered the

substance of Ms. Wicks’ other complaints we are convinced they also do not rise to

the level of a due process violation.6

      Finally, Ms. Wicks appears to raise an equal protection claim, arguing that the

GPO did not “equalize” government retirees and private retirees and instead

discriminated against retirees, like Ms. Wicks, who did not pay social security taxes.

In particular, she claims that if the GPO remains in effect after the full amount of the

lump sum payments has been extinguished through reductions in her social security

benefits, she will receive a reduction in benefits greater than the PERA retirement

benefits she received based on non-covered employment. This result, she claims,

treats government retirees less favorably than private retirees. Reviewing

Ms. Wicks’ claim de novo, see White v. Colorado, 157 F.3d 1226, 1232 (10th Cir.

1998), we conclude the GPO provision does not violate the Equal Protection Clause.

6
       Ms. Wicks argues that the Appeals Council failed to consider new evidence
that she submitted to it for its review of the ALJ’s decision. The Appeals Council’s
decision stated that “[n]o comments or additional evidence have been received.”
Admin. R. at 7. The Appeals Council must consider evidence submitted with a
request for review if the evidence is new, material, and relates to a period on or
before the date of the ALJ’s decision. Threet v. Barnhart, 353 F.3d 1185, 1191
(10th Cir. 2003); 20 C.F.R. § 404.970(b). Failure to consider such evidence is
grounds for remand. See Threet, 353 F.3d at 1191. Reviewing the evidence de novo,
see id., we conclude the evidence is not new or material and thus, there is no cause
for remand.

                                         - 12 -
Government retirees who have not contributed to the social security fund are not

similarly situated to private retirees who have paid social security taxes on their

wages. Unlike employees subject to social security taxes, Ms. Wicks had the benefit

of the present value of that money. Under these circumstances, the Agency decision

to treat retirees from non-covered employment, like Ms. Wicks, differently than

private retirees is not discriminatory.

                                     III.     Conclusion

      The Agency applied the GPO to the March 1996 lump sum PERA retirement

benefit according to its guidelines, which were adopted pursuant to the authority

delegated to the Agency by Congress. Ms. Wicks has not suffered a deprivation of

her constitutional rights to due process or equal protection. Accordingly, the

judgment of the district court is affirmed.

                                                     Entered for the Court

                                                     Carolyn B. McHugh
                                                     Circuit Judge

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