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Kim Phuong Nguyen, and Audie Chau, et al v. Michael S. Astrue

January 27, 2011

KIM PHUONG NGUYEN, AND AUDIE CHAU, ET AL., PLAINTIFFS,
v.
MICHAEL S. ASTRUE, COMMISSIONER OF SOCIAL SECURITY, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

Order Granting Defendant's Motion to Dismiss; Granting Leave to Amend

Presently before the Court is the motion to dismiss for lack of subject matter jurisdiction filed by Defendant Michael S. Astrue, Commissioner of Social Security ("Commissioner") pursuant to Fed. R. Civ. P. 12(b)(1). Plaintiff has filed an opposition and the Commissioner filed a reply. The Court previously found the Commissioner's motion appropriate for submission on the papers and without oral argument, and vacated the hearing. Thereafter, Plaintiff filed a notice of related case, and request for judicial notice.*fn1

Upon review, for the reasons explained herein, the Court GRANTS the Commissioner's motion to dismiss, but grants Plaintiff leave to file a second amended complaint.

Background

Plaintiff Kim Phuong Nguyen, proceeding through counsel, originally filed a petition for a writ of mandamus in this case on September 16, 2010, seeking relief on behalf of an unidentified class. Plaintiff alleged the Commissioner denied her benefits, and refused to process her application, unless Plaintiff attended a consultative examination with Seagate Medical Group. Plaintiff alleged the Commissioner's denial of benefits, and refusal to process applications, violated the Social Security Act (42 U.S.C. § 301 et seq., 42 U.S.C. § 1381 et seq., and 20 C.F.R. § 416.927), her right to due process under the Fifth Amendment, and the Administrative Procedures Act (5 U.S.C. § 706(2)(A)).

Plaintiffs Kim Phuong Nguyen and Audie Chau filed their First Amended Complaint ("FAC") on October 4, 2010. Plaintiffs allege claims on behalf of the following class:

The class consists of all applicants who have applied for benefits under Title II and/or Title VXI of the Social Security Act due to severe physical and/or mental impairments and had his or her claim denied because of their refusal to attend consultative examinations wtih Seagate, or based on results of the Seagate consultative examinations. [FAC, ¶ 4.] The First Amended Complaint again alleges that the Commissioner denied Plaintiff Nguyen benefits after she refused to attend a consultative examination with Seagate Medical Group. [FAC, ¶ 9.] Plaintiff Nguyen further alleges that on October 3, 2009, she appealed the Administrative Law Judge's decision dismissing her application; however, the Appeals Council has not yet responded to the appeal. [FAC, ¶ 9.] In March 2010, Plaintiff Nguyen reapplied for benefits, but her application was again denied because she refused to attend a Seagate consultative examination. [FAC, ¶ 10.]

Plaintiff Chau applied for benefits under Title II and Title XVI of the Social Security Act in January 2006. [FAC, ¶ 12.] Plaintiff Chau was scheduled for an examination with the Seagate Group, but declined to attend the examination. Plaintiff Chau alleges an ALJ thereafter denied his benefits based upon his refusal to attend the consultative examinations at Seagate.*fn2 [FAC, ¶ 13- 14.] Plaintiff Chau appealed the ALJ's denial of benefits on December 17, 2009, but there has been no action on the appeal. [FAC, ¶ 14.]

Plaintiffs allege the Commissioner has summarily denied their applications because of their refusal to attend Seagate consultative examinations, and that such denial violates the Social Security Act and applicable regulations. [FAC, ¶ 15.] Plaintiffs also allege the Commissioner's failure to process their applications results in undue delay and violates due process. [FAC, ¶ 17.] Finally, Plaintiffs allege that the Commissioner's refusal to process their applications, either based upon their refusal to attend Seagate examinations or based upon the results of Seagate examinations, violates the Administrative Procedures Act. [FAC, ¶ 19.] Plaintiffs seek an injunction "perpetually enjoining and restraining defendant from dismissing plaintiffs' applications due to plaintiffs' refusal to attend Seagate examinations." [FAC, Prayer for Relief, ¶ 4.] Plaintiffs also seek a declaration that their due process rights have been violated and an award of attorney's fees. [FAC, Prayer for Relief, ¶¶ 5-6.]

The Commissioner now moves to dismiss pursuant to Fed. R. Civ. P. 12(b)(1), arguing the Court lacks subject matter jurisdiction.

Legal Standard

Federal Rule of Civil Procedure 12(b)(1) allows for a motion to dismiss where the court lacks subject-matter jurisdiction. Because "[f]ederal courts are courts of limited jurisdiction," the Court "presume[s] that a cause [of action] lies outside this limited jurisdiction[.]" Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A Rule 12(b)(1) motion "can attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency, and in so doing rely on affidavits or any other evidence properly before the court." St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). Thus, the existence of disputed material facts will not preclude the court from evaluating for itself the merits of jurisdictional claims. Id. Because the plaintiff bears the burden of establishing subject matter jurisdiction, no presumption of truthfulness attaches to the allegations of the plaintiff's complaint, and the Court must presume that it lacks jurisdiction until the plaintiff establishes jurisdiction. Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989).

Discussion

The Commissioner moves to dismiss under Fed. R. Civ. P. 12(b)(1), arguing the Court lacks subject matter jurisdiction over Plaintiffs' claims because Plaintiffs have not received a final reviewable decision pursuant to 42 U.S.C. § 405(g). In opposition, Plaintiffs argue the Appeals Council's delay in considering their claims constitutes de facto denial, or alternatively that the Court should waive the § 405(g) exhaustion requirement. Plaintiffs also argue the ...


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