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STENGEL v. CALLAHAN

November 6, 1997

EDWARD C. STENGEL, Plaintiff,
v.
JOHN J. CALLAHAN, COMMISSIONER OF SOCIAL SECURITY, Defendant.



The opinion of the court was delivered by: CASTILLO

 Plaintiff Edward Stengel brought suit against John J. Callahan, in his official capacity as Commissioner of Social Security, after the Commissioner terminated Stengel's disability benefits under the Social Security Act (the "Act"). Stengel challenges the constitutionality of 42 U.S.C. § 423(d)(2)(C), which authorized the Commissioner to deny Stengel disability benefits because Stengel's alcoholism was a material factor in the initial determination of his disability. In addition, Stengel charges that the Commissioner violated his statutory duties in finding that Stengel no longer qualified for disability benefits under the Act.

 Stengel incorporated these allegations into a five count complaint. Specifically, Count I alleges that when applied to Stengel, § 423(d)(2)(C) violates his equal protection rights incorporated into the Due Process Clause of the Fifth Amendment because the law distinguishes between alcoholism and other diseases. Count II details Stengel's facial challenge to the amendment, alleging that § 423(d)(2)(C) violates the Equal Protection Clause because it precludes the Commissioner from determining that a person suffering from alcoholism is disabled even if other factors would, alone or in total, warrant such a determination. Pl.'s Am. Compl. P 24-26. Count III alleges that as applied to Stengel, § 423(d)(2)(C) violates the equal protection guarantees of the Fifth Amendment because it precludes the Commissioner from considering whether Stengel may be disabled by virtue of diseases or disorders other than alcoholism or drug addiction. Id. P 30. Count IV alleges that as applied to Stengel, § 423(d)(2)(C) violates his substantive due process rights under the Fifth Amendment because his denial of benefits is not rationally related to any governmental interest. Id. P 35. Finally, Count V charges that the Commissioner has violated his statutory duties by denying Stengel disability benefits based on the unconstitutional mandate of § 423(d)(2)(C). Id. P 39. Stengel seeks declaratory, injunctive, and any further relief that this Court deems necessary.

 This matter is currently before the Court on defendant's motion to dismiss all counts of plaintiff's amended complaint, pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). For the reasons set forth below, we grant defendant's motion to dismiss.

 BACKGROUND

 Edward Stengel worked as a clerical worker for several years before applying for disability benefits under the Social Security Act. Pl.'s Am. Compl. P 5. The Commissioner determined that Stengel's alcoholism rendered him disabled under Title II of the Act and awarded Stengel benefits. Id. at P 8. Stengel received disability benefits from January of 1989 until January of 1997, and came to rely on such benefits to support himself. Id. at PP 12, 13.

 In 1996, Congress amended the Act to deny benefits to claimants whose "alcoholism or drug addiction [is] . . . a material factor to the [Commissioner's] determination that the individual is disabled." *fn1" Id. at P 14, citing 42 U.S.C. § 423 (d)(2)(C). Alcoholism is considered "material" to a disability determination if the evidence shows that the claimant would not be disabled if he stopped using alcohol. H.R. Rep. No. 104-379, pt. II, at 16 (1995). Consequently, on June 12, 1996, the Commissioner sent Stengel a letter notifying him that he would terminate Stengel's disability benefits effective January 1, 1997. Pl.'s Am. Compl. at P 16. The letter explained that the Commissioner's original disability determination was based materially upon Stengel's alcoholism, which was no longer a permissible consideration under the newly enacted amendment. Id. at Ex. A. In addition, the letter informed Stengel that if he believed he was entitled to disability benefits for reasons other than his alcoholism, he should contact the Social Security Administration within sixty days of receiving the letter. Id.

 Stengel appealed this determination, presenting information regarding his other allegedly disabling conditions. Pl.'s Sur. at p. 2. The Commissioner initially rejected Stengel's claim that such conditions rendered Stengel disabled, and outlined the administrative appeals process should Stengel choose to challenge the Commissioner's determination. Id. The record does not reveal the current status of Stengel's claim. However, on February 21, 1997, Stengel filed this action, challenging the constitutionality of the amendment. *fn2"

 LEGAL STANDARDS

 Defendant brings this motion pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Under Rule 12(b)(1), defendant challenges the Court's subject matter jurisdiction over Stengel's claim. Under Rule 12(b)(6), defendant argues that all counts should be dismissed for failure to state a claim upon which relief can be granted. The standard applied to each motion is similar. Freiburger v. Emery Air Charter, Inc., 795 F. Supp. 253, 256 (N.D. Ill. 1992). Because a motion to dismiss does not test the merits of the suit, all well-pleaded facts are taken as true, all reasonable inferences are drawn in favor of the plaintiff, and all ambiguities are resolved in the plaintiff's favor. Dawson v. General Motors Corp., 977 F.2d 369, 372 (7th Cir. 1992). With these standards in mind, we evaluate the Commissioner's motion to dismiss Stengel's amended complaint

 ANALYSIS

 Initially, the Commissioner charges that this Court does not have subject matter jurisdiction over this action because Stengel failed to exhaust his administrative remedies. The Commissioner argues that any action arising under the Act must be brought pursuant to § 405 of the Act, which requires a final administrative determination prior to judicial review. Stengel, however, failed to obtain a final administrative determination prior to filing this action. The Commissioner then challenges the merits of Stengel's claims, contending that the Court should dismiss the action because Stengel cannot demonstrate that Congress' decision to reallocate limited federal resources lacks a rational basis. In addition, the Commissioner asserts that Stengel has neither a property interest in nor a fundamental right to the receipt of benefits, which would trigger any substantive due process rights when the benefits were terminated. Finally, the Commissioner argues that the termination of Stengel's benefits is wholly consistent with the Commissioner's statutory duties. We will address each of the Commissioner's arguments in turn.

 CHALLENGE TO SUBJECT MATTER JURISDICTION

 As a party seeking to invoke the jurisdiction of this Court, Stengel has the burden of establishing that jurisdiction exists. KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 81 L. Ed. 183, 57 S. Ct. 197 (1936); More & More Entertainment, Inc. v. Scotti Bros. Records, 1996 U.S. Dist. LEXIS 10235, 1996 WL 417551 (N.D. Ill. July 23, 1996). Without evidence raising a fact question as to subject matter jurisdiction, the court's inquiry is limited. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 82 L. Ed. 2d 139, 104 S. Ct. 3012 (1984). The court must simply ask whether the complaint's allegations, construed in a light most favorable to the plaintiff, are sufficient to support subject matter jurisdiction. Id.

 A. JURISDICTIONAL BASIS FOR BRINGING THIS CLAIM

 We must first determine the jurisdictional basis for Stengel 's claim. Stengel challenges the constitutionality of an amendment to the Act. Consequently, he argues that federal question jurisdiction is a valid basis to bring his action before this court. He also argues that because he is seeking declaratory relief this court has jurisdiction pursuant to 28 U.S.C. §§ 2201 & 2202. Finally, Stengel asserts jurisdiction under 28 U.S.C. § 1361, to the extent that he seeks an order requiring the Commissioner to perform his statutory duties.

 The Commissioner argues that because Stengel's action arises under the Act, this Court can have jurisdiction only under § 405. See 42 U.S.C. § 405 (g), (h) (1996). Section 405 requires claimants to obtain a final decision from the Commissioner prior to filing suit in court. Id. The Commissioner contends that Stengel's failure to comply with the Act's exhaustion requirement bars this Court's review of Stengel's claim. To determine whether § 405 is the proper jurisdictional basis for Stengel's claim, we must decide whether Stengel's claims "arise under" Title II of the Act.

 The Supreme Court addressed this issue in Weinberger v. Salfi, 422 U.S. 749, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975). The Court held that a challenge to the constitutionality of the Act necessarily "arises under" the Act, requiring the plaintiff to bring the cause of action under the jurisdictional grant of § 405. Id. at 762. In Salfi, the plaintiff questioned the constitutionality of the "duration of relationship" requirement applicable to widows and children seeking benefits under the Act. Id. at 754. The plaintiff asked the Court for declaratory and injunctive relief, as well as damages equal to the amount of the withheld benefits. Id. The plaintiff then raised constitutional questions, relying on § 1331 as the basis for jurisdiction. Id. at 755. The plaintiff argued that § 405's federal question prohibition affects only claims arising under Title II of the Act, and that her claim arose under the Constitution, not Title II. Id. at 760. In rejecting this argument, the Court noted that although this claim did arise under the Constitution, the claim also arose under the Act. Id. The Court explained that the requirements of § 405 ensure an efficient resolution of all claims, stating that § 405 does:

 
not preclude constitutional challenges. [It] simply require[s] that they be brought under jurisdictional grants contained in the Act, and thus in conformity with the same standards which are applicable to nonconstitutional claims arising under the Act. The result is not only of unquestionable constitutionality, but it is also manifestly reasonable, since it assures the Secretary the opportunity prior to constitutional litigation to ascertain, for example, that the particular claims involved are neither invalid for other reasons nor allowable under other provisions of the Social Security Act.

 Id. at 762.

 The Supreme Court reaffirmed Salfi's broad reading of § 405 in Heckler v. Ringer, 466 U.S. 602, 615, 80 L. Ed. 2d 622, 104 S. Ct. 2013 (1984). Significantly, the Ringer Court determined that the type of relief a plaintiff seeks is irrelevant in determining whether § 405 is the proper jurisdictional basis for a claim; that is, if a plaintiff is challenging the constitutionality of the Act, no matter what type of relief is sought, the claim falls within § 405's realm. Id. The Court held that § 405 covered the claimants' requests for declaratory and injunctive relief:

 
It is of no importance that respondents here, unlike the claimants in Weinberger v. Salfi, sought only declaratory and injunctive relief and not an actual award of benefits as well. . . . Had our holding in [Salfi] turned on the fact that claimants there did seek retroactive benefits, we might well have done as the dissent in that case suggested and held that § 405(h) barred federal-question jurisdiction only over claimant's specific request for benefits, and not over claimant's declaratory and injunctive claims as well."

 466 U.S. at 615-16.

 In the instance case, just as in Salfi and Ringer, Stengel's cause of action must be brought under the jurisdictional grant of § 405. Stengel's claim likewise challenges the constitutionality of a certain provision of the Act. In addition, like the plaintiffs in Salfi and Ringer, Stengel is seeking declaratory and injunctive relief as well as an order requiring the Commissioner to pay all past and future benefits to which Stengel is entitled. As Ringer points out, regardless of what type of relief Stengel seeks in conjunction with his ...


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