requests that the Court order the Secretary to rescind an HHS interpretive guideline regarding how local Social Security officials are to determine whether a certain asset is a "resource."
MOTIONS BEFORE THE COURT
There are two motions before the Court. In the first, the Secretary moves for a judgment on the pleadings affirming the Secretary's decision, pursuant to Rule 12(c). In the second motion, the Commissioner moves to dismiss the Complaint (i) pursuant to Rule 12(b)(1) on the ground of lack of subject matter jurisdiction, (ii) pursuant to Rule 12(b)(6) for failure to state a claim, and (iii) pursuant to Rule 12(b)(7) and Rule 19(a) for failure to name the NCDSS as a party in this action. In the alternative, the Commissioner moves for summary judgment in his favor pursuant to Rule 56.
The Secretary contends that this Court is limited to inquiring whether the Secretary's determination is supported by substantial evidence in the record. According to the Secretary, the decision to deny SSI eligibility to Frerks should be affirmed, because the ALJ applied the proper legal standard in determining that the guardianship accounts were a resource available to the plaintiff, and there was substantial evidence in the record to support the determination.
The Secretary also contends that the ALJ's decision is supported by the HHS's interpretive guidelines to local Social Security officials for use in determining whether a particular asset is a "resource", which are set forth in the July, 1990 Social Security Program Operation Manual System ("POMS").
Finally, the Secretary argues that Navarro is inapposite to the facts of this case, because the provisions of the tort settlement order in that case proscribed the use of the settlement funds for the support and maintenance of the plaintiff.
Alternatively, the Secretary argues that her decision must be affirmed because the plaintiff is ineligible for SSI on the grounds that his "income" exceeds the statutory maximum of $ 386 a month.
The Commissioner contends that it is not apparent from the Complaint exactly what action by the Commissioner the plaintiff is challenging in this case. With respect to the allegation concerning the denial of Medicaid benefits, the Commissioner contends that the plaintiff initiated this action without exhausting his state judicial remedies pursuant to Article 78 of the New York CPLR. As a result, the Commissioner alleges that the plaintiff is precluded from bringing this action in the federal court.
Second, with respect to the allegation that the Commissioner has abdicated his duty to administer the Optional State Supplemental funds program in accordance with the federal regulations, the Commissioner contends that the plaintiff has failed to state a claim against him. Pursuant to section 211(1) Of the State Social Service Law, the Commissioner has, by agreement, delegated all questions of SSI eligibility to the HHS.
Third, the Commissioner argues that the Complaint should be dismissed because the NCDSS has not been named as a party defendant. According to the Commissioner, the NCDSS is a necessary party and complete relief cannot be given in this case unless it is joined pursuant to Rule 19(a).
The Court will separately discuss the issues raised in this case with respect to each of the defendants, after stating the standard of review applicable to a motion for judgment on the pleadings and for summary judgment.
Judgment on the Pleadings
Judgment on the pleadings is appropriate where material facts are undisputed and a judgement on the merits is possible merely by considering the contents of the pleadings. Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 642 (2d Cir. 1988). In considering a motion for judgment on the pleadings, the court must accept as true all of the non-movant's well pleaded factual allegations, and draw all reasonable inferences therefrom in favor of the non-movant. DeSantis v. United States, 783 F. Supp. 165, 168 (S.D.N.Y. 1992). Unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his or her claim which would entitle the plaintiff to relief, the court can not grant a defendant's motion for judgment on the pleadings. George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., 554 F.2d 551, 553 (2d Cir. 1977).
In its discretion and upon notice to the parties, a court may consider materials outside the pleadings. If it does so, the motion for judgment on the pleadings is treated as one for summary judgment. Sellers, 842 F.2d at 642.
In considering the Secretary's motion, the Court has considered the Complaint, Answer and Administrative Transcript, and has not looked beyond the pleadings.
Summary Judgment Standard
A court may grant summary judgment "only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact," Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990), and the movant is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); see also Fed. R. Civ. P. 56(c).
Once a party moves for summary judgment, in order to avoid the granting of the motion, the non-movant must come forward with specific facts showing that a genuine issue for trial exists. Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990) (quoting Fed. R. Civ. P. 56(e); National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 203 (2d Cir. 1989). A genuine issue of material fact exists if "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; Converse v. General Motors Corp., 893 F.2d 513, 514 (2d Cir. 1990). The Court must resolve all ambiguities and draw all reasonable inferences in the light most favorable to the party opposing the motion. See Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 568 (2d Cir. 1990). If there is evidence in the record as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. Rattner v. Netburn, 930 F.2d 204 (2d Cir. 1991).
In the Court's view, there are no genuine issues of material fact in dispute. Rather, the parties' dispute concerns whether the Secretary and Commissioner applied the correct legal standard set forth in the applicable federal statute and regulations, when they determined that the plaintiff was not eligible for SSI and Medicaid benefits because his tort settlement funds were a "resource" available to him for support and maintenance.
A. Claims Against The Secretary.
1. The Secretary's Decision is Supported by Substantial Evidence.
The Court may set aside the Secretary's determination only if it is based upon legal error, or is not supported by substantial evidence in the record as a whole. Cruz v. Sullivan, 912 F.2d 8, 11 (2d Cir. 1990); Berry v. Schweiker, 675 F.2d 464, 467 (2d Cir. 1982). Substantial evidence is defined as what a reasonable mind might accept as adequate to support a conclusion. Such evidence is more than a scintilla, but less than a preponderance of the evidence. Richardson v. Perales, 402 U.S. 389, 401, 28 L. Ed. 2d 842, 91 S. Ct. 1420 (1971).
Moreover, as long as the Secretary's view is supported by substantial evidence, this Court cannot substitute its judgment for that of the Secretary's. Parker v. Harris, 626 F.2d 225, 232 (2d Cir. 1980).
In determining that the plaintiff's trust fund was a "resource" available to the plaintiff, the ALJ decided that the funds, while "blocked," were still available to the plaintiff:
The record shows that the settlement funds . . . cannot be withdrawn without a court order. While the court does not always approve every request for withdrawal, it will release funds held in guardianship accounts that it deems necessary for the support, education and medical needs of [Frerk's].