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Kim Phuong Nguyen, Rin Lay, Nazdar Rahsid v. Michael S. Astrue

June 21, 2011


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

Order Granting Defendant's Motion to Dismiss Second Amended Complaint; Granting in Part Leave to File Third Amended Complaint

Presently before the Court is the motion to dismiss the Plaintiffs' second amended complaint ("SAC") 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). Plaintiffs have filed an opposition, in which they seek leave to file a third amended complaint. 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. Upon review, for the reasons explained herein, the Court GRANTS the Commissioner's motion to dismiss the second amended complaint, and GRANTS IN PART Plaintiffs' motion for leave to file a third amended complaint.


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)). Before the Commissioner appeared in the case, Plaintiffs Kim Phuong Nguyen and Audie Chau*fn1 filed their first amended complaint ("FAC") on October 4, 2010, alleging 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 FAC again alleged that the Commissioner denied Plaintiffs benefits after they refused to attend a consultative examination with Seagate Medical Group. [FAC, ¶ 9.]

By order filed January 27, 2011, the Court granted the Commissioner's motion to dismiss the FAC. The Court concluded it lacked subject matter jurisdiction over Plaintiffs' claims because Plaintiffs had not received a final decision subject to judicial review under 42 U.S.C. §405(g). [Doc. No. 20, p.6.] The Court further concluded Plaintiffs were not entitled to mandamus relief under 28 U.S.C. § 1361, because Plaintiffs have a remedy through the administrative review process and there is no clear non-discretionary duty they seek to enforce.

Plaintiff Nguyen filed a SAC on February 10, 2011. The SAC adds claims by Plaintiffs Rin Lay, Nazdar Rahsid Alzayadie, and Xuan Mong Phan. [Doc. No. 21.] Plaintiff Nguyen again alleges that the Commissioner's denial of her claim for benefits, based upon her refusal to attend a consultative examination at Seagate Medical Group, violated her right to due process and violated the Social Security Act. [SAC, ¶ 9.] Plaintiffs Rin Lay and Nazdar Alzayadie both allege they attended examinations at Seagate in the course of their claim for benefits, in the 2005-2006 time period, but the Seagate report was untruthful and misleading and resulted in the denial of their benefits. [SAC, ¶ 14-15, 23-25.] Plaintiffs Ray and Alzayadi both allege they eventually obtained a court reversal of the Commissioner's decision. [SAC, ¶ 15, 25.]

Plaintiff Xuan Phan underwent consultative medical examinations at Seagate in December of 1995 and January of 1996. [SAC, ¶ 16-17.] Based upon the reports by Seagate examiners, Plaintiff Phan's application for disability benefits was denied in October of 1997. [SAC, ¶ 18.] Plaintiff Phan again applied for disability benefits in March of 2001, and her application was denied under the principle of res judicata. [SAC, ¶ 19.] Plaintiff Phan filed a third application sometime thereafter, and was again sent for examination at Seagate. Her application for benefits was denied in January of 2009. [SAC, ¶¶ 20-21.] Plaintiff filed an appeal with the Appeals Council, but in March of 2010 was informed no appeal was pending and she should file a new application. [SAC, ¶ 22.]

All plaintiffs allege in the SAC that the Commissioner's actions in summarily denying their applications for benefits "because of plaintiffs' refusal to attend Seagate consultative examinations constitute unconstitutional compulsion and violates the Social Security Act." [SAC, ¶ 27.] They also allege violation of their right to due process and violation of the Administrative Procedures Act, 5 U.S.C. § 706(2)(A). [SAC, ¶¶ 29 and 31.] The Commissioner now moves to dismiss the SAC pursuant to Fed. R. Civ. P. 12(b)(1), arguing the Court lacks subject matter jurisdiction. Plaintiffs do not oppose the Commissioner's motion to dismiss, but instead seek leave to file a third amended complaint ("TAC"). The Court will first address the Commissioner's motion to dismiss the SAC, and then will consider whether it would be appropriate to grant Plaintiff leave to file a TAC.

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).

Pursuant to Fed. R. Civ. P. 15(a)(2), parties are permitted to file subsequent amendments to their pleadings only by leave of court. Such leave should ordinarily be freely granted, except where there is "undue prejudice to the opposing party, bad faith by the movant, futility, [or] undue delay." Cafasso, ex rel. v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1058 (9th Cir. 2011).


1. Motion to dismiss for lack of subject ...

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