The opinion of the court was delivered by: Michael A. Telesca United States District Judge
Plaintiff Betty J. Bigelow ("Bigelow" or "Plaintiff") brings this action pursuant to Title II of the Social Security Act seeking review of the defendant's denial of her claim for spouse's insurance benefits. Specifically, Bigelow claims that the Commissioner of Social Security ("Commissioner" or "Defendant") improperly determined that she was not eligible for spousal benefits, and further erred in failing to reopen or reconsider her claim for benefits.
Defendant argues that he properly determined that Plaintiff is not entitled to spousal benefits because such benefits are offset by a pension to which Plaintiff is entitled and receives. The Commissioner further contends that he correctly declined to reopen Plaintiff's application on grounds that the doctrine of res judicata precludes reconsidering her claim for benefits. Accordingly, the Commissioner moves to dismiss Plaintiff's Complaint pursuant to Rule 12(c) of the federal Rules of Civil Procedure ("Rule 12(c)").
Plaintiff contends that the Commissioner erred in finding that her spousal benefits were subject to an offset because of her pension, and claims that the Commissioner should have re-opened her case because she submitted new, material evidence in support of her claim for benefits. She claims that res judicata does not apply because the Commissioner constructively reopened her claim (thereby waiving the defense of res judicata) and because application of res judicata would violate her constitutional right to due process. Plaintiff cross-moves for judgment on the pleadings pursuant to Rule 12(c) seeking an Order reversing the Commissioner's decision and remanding the action back to the Commissioner for further proceedings.
For the reasons set forth below, I grant the Defendant's motion for judgment on the pleadings, and deny Plaintiff's cross-motion for judgment on the pleadings.
On April 22, 1985, following the death of her husband, Plaintiff Betty J. Bigelow applied for Social Security survivor's benefits. Although she was initially awarded such benefits in full, the Social Security Administration ("SSA") later determined that Plaintiff's benefits were subject to an offset based on her receipt of a federal pension. (See SSA Letter of May 13, 1996, Pl.'s Compl. ("Compl.") Attach. 2.) In response to the SSA's determination, Bigelow requested a hearing before an administrative law judge ("ALJ") claiming that her spousal benefits were not subject to an offset.
On January 29, 1987, ALJ John P. Chwalek, without holding a hearing, found that Plaintiff's benefits were not subject to the offset based on her receipt of a pension. Specifically, the ALJ found that because during the relevant period Plaintiff's contribution to her total household income was less than her husband's (i.e. less than 50%) the federal regulations requiring an offset of benefits based on the receipt of a federal pension did not apply. See 20 C.F.R. §§ 404.408a and 404.366, (providing that spousal benefits are exempt from a pension offset if the spouse seeking benefits received at least one-half of his or her financial support from his or her spouse at the time the now-deceased spouse became entitled to Social Security benefits). ALJ Chwalek concluded that Plaintiff met this one-half dependency exemption, and therefore was entitled to spousal benefits. (See 1987 ALJ Decision, Compl. Attach. 3.)
Pursuant to 20 C.F.R. § 404.970(a)(2), the Social Security Appeals Council ("Appeals Council"), on its own motion, reviewed the ALJ's determination. On July 2, 1987, the Appeals Council found that the ALJ committed an error of law in reaching his conclusion that the Plaintiff was exempt from the pension offset.
Specifically, the Appeals Council held that in determining whether or not a claimant qualifies for the one-half dependency exemption, the Commissioner is to determine not how much the claimant contributed to the household income generally, but instead is to determine how much the claimant contributed to the portion of the household income that supported the claimant individually. The Appeals Council noted that in a household of two people, one-half of the household income supports each person. In support of its holding, the Appeals Council concluded that a claimant must have contributed less than one half of the income needed to support herself individually (i.e. one-quarter of the total household income) in order to meet the one-half dependency exemption. The Appeals Council noted that although Plaintiff contributed less than fifty percent of the household income during the relevant period, she contributed far more than one-half of the income needed to support herself individually: an amount greater than one-quarter of the couple's income as a two-person household. Accordingly, the Appeals Council found that Plaintiff did not meet the one-half dependency exemption, and therefore, she was subject to a pension offset. (See 1987 Appeals Council Decision, Compl. Attach. 4.) Based on the amount of her pension relative to her potential survivor's benefits, the applicable offset eliminated Plaintiff's survivor's benefits altogether. (See 2007 Notice of Reconsideration, Compl. Attach. 5.) Plaintiff did not seek judicial review of the Appeals Council's ruling.
Approximately 20 years later, on April 11, 2007, Plaintiff received a letter from the SSA informing her that the amount of her monthly survivor's insurance benefits had changed. The letter further informed her, however, that the pension offset remained applicable, and that as a result, she was still not eligible to receive survivor benefits.
Plaintiff sought reconsideration of the finding that the pension offset continued to render her ineligible for benefits, and appealed the Commissioner's determination and requested a hearing before an ALJ (See Request for Hearing by ALJ, Def.'s Ex. 4.). On February 26, 2008, ALJ Joseph G. Medicis, without holding a hearing, ruled that Plaintiff's benefits were not subject to a pension offset. (See 2008 ALJ Decision, Def.'s Ex. 5.) The Appeals Council subsequently notified Plaintiff that it planned to vacate the ALJ's decision, and dismiss her request for a hearing because res judicata prohibited the Commissioner from reconsidering Plaintiff's claim for benefits. See Notice of Appeals Council Action, Apr. 24, 2008, Def.'s Ex. 6.
In its final ruling, dated August 4, 2008, the Appeals Council held that Plaintiff's claim that she was exempted from the pension offset was barred by the doctrine of res judicata. Although finding that Plaintiff's claim was barred, the Appeals Council nevertheless considered additional arguments and evidence offered by the Plaintiff. This evidence purported to establish that because she incurred extraordinary expenses in caring for her ailing mother from 1977-1980, Bigelow's contribution to the household income was in fact less than 25%, and therefore, she was exempt from the pension offset provision. (See 2008 Appeals Council Decision, Def.'s Ex. 7.) The Appeals Council, however, found that the evidence submitted by the Plaintiff did not "show how her own income for her support was diminished by the care she gave her mother." Id. Moreover, the Appeals Council noted that Plaintiff failed to ...