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Eisenberg v. Berryhill

United States District Court, D. New Hampshire

February 5, 2018

Leeland E. Eisenberg
Nancy A. Berryhill, Acting Commissioner, Social Security Administration


          Andrea K. Johnstone United States Magistrate Judge

         Pro se plaintiff Leeland Eisenberg initially brought this action in New Hampshire Circuit Court, seeking to recover $659.70 that he believes the Social Security Administration (“SSA”) improperly withheld from him in September 2016. SSA removed the matter to this court and moved to dismiss on the basis that Eisenberg did not exhaust his administrative remedies. Eisenberg objected to that motion and filed a cross motion for summary judgment. Both motions were referred to the undersigned magistrate judge for proposed findings of fact and a recommendation as to disposition.

         On October 20, 2017, the undersigned issued a Report and Recommendation concluding that the court lacked subject-matter jurisdiction over Eisenberg's claim. Rather than dismiss the action, however, the court recommended that it be remanded back to the New Hampshire Circuit Court. The court further recommended that both the motion to dismiss and cross motion for summary judgment be denied as moot.

         SSA now moves for reconsideration, arguing that the court erred in recommending that this matter be remanded.[1] Concluding that its previous Report and Recommendation was based on an error of law, the court recommends that SSA's motion reconsideration be granted. The court further recommends, for the reasons stated below, that the district judge grant SSA's motion to dismiss.

         A. Motion for Reconsideration

         Reconsideration is “an extraordinary remedy which should be used sparingly.” Palmer v. Champion Mtg., 465 F.3d 24, 30 (1st Cir. 2006) (citation and internal quotation marks omitted). Reconsideration is appropriate “only in a limited number of circumstances: if the moving party presents newly discovered evidence, if there has been an intervening change in the law, or if the movant can demonstrate that the original decision was based on a manifest error of law or was clearly unjust.” United States v. Allen, 573 F.3d 42, 53 (1st Cir. 2009).

         SSA argues that this court's earlier Report and Recommendation was based on a manifest error of law. Specifically, SSA contends that this court has an independent basis for jurisdiction over this action under 28 U.S.C. § 1442, which allows “[t]he United States or any agency thereof or any officer (or any person acting under that officer) of the United States or any agency thereof, in an official or individual capacity” to remove to federal court any action commenced in state court. Id. § 1442(a)(1). SSA further argues that it has raised a sovereign immunity defense, and that such defenses, when raised by the United States government, must be heard in a federal forum. Finally, SSA contends that federal courts have exclusive jurisdiction to review federal agency action. Thus, SSA argues that the New Hampshire Circuit Court “has no jurisdiction to decide any issue in this case.” Doc. no. 11 at 5.

         The court concludes, largely for the reasons stated in SSA's motion, that the New Hampshire Circuit Court does not have jurisdiction to hear this action. Thus, the court erred in recommending that this matter be remanded to that court for disposition. This does not end the court's inquiry, however, as the court still must determine whether it lacks jurisdiction over this matter based on the derivative jurisdiction doctrine. Under that doctrine, “[w]here the state court lacks jurisdiction of the subject matter or of the parties, the federal court acquires none, although in a suit originally brought in a federal court it would have had jurisdiction.” State of Minn. v. United States, 305 U.S. 382, 389 (1939).

         Congress has expressly abrogated the derivative jurisdiction doctrine for cases removed under 28 U.S.C. § 1441. See id. § 1441(f). But courts have found, particularly in the wake of the 2002 amendment to that section, that the doctrine still applies to cases removed under § 1442. See, e.g., Scallop Shell Nursing & Rehab. v. Gaffett, No. 13-cv-471 ML, 2013 WL 5592736, at *5 (D.R.I. Oct. 10, 2013) (citing cases); 14 Charles A. Wright, et al., Federal Practice and Procedure, § 3655 (4th ed.) (“The amendments to Section 1441, eliminating the derivative jurisdiction bar, left Section 1442 untouched.”). Thus, before the court may consider SSA's motion to dismiss, it must first determine under which of these provisions SSA removed this matter.

         In its notice of removal, SSA invokes both § 1441 and § 1442(a)(1). See doc. no. 1 ¶ 3.[2] Other courts have concluded that when there is an independent basis for removal under each provision, the derivative jurisdiction doctrine does not apply. See, e.g., Bloch v. Exec. Office of the President, 164 F.Supp.3d 841, 854 (E.D. Va 2016), reconsideration denied sub nom. Bloch v. Exec. Office of President, No. 1:15-cv-1146, 2016 WL 8224913 (E.D. Va. Mar. 10, 2016) (“Because defendants removed Count IV, in part, based on § 1441(a), § 1441(f) confers subject matter jurisdiction.”). Here, SSA had an independent basis to remove this action under § 1441 based on this court's federal-question jurisdiction. Such jurisdiction extends to “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Because Eisenberg's claims are predicated on his interest in obtaining benefits to which he contends he is entitled under the Social Security Act (the “Act”), they “arise under” that act. See Justiniano v. Soc. Sec. Admin., 876 F.3d 14, 22 (1st Cir. 2017).[3] The court may therefore consider SSA's motion to dismiss on the merits.

         SSA's motion for reconsideration (doc. no. 11) should accordingly be granted in full.

         B. Motion to Dismiss

         SSA moves to dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. In considering such a motion, the court accepts as true all well-pleaded factual allegations in the complaint and draws all reasonable inferences therefrom in the plaintiff's favor. See Reddy v. Foster, 845 F.3d 493, 497 (1st Cir. 2017). The court may also consider other materials and evidence in the record “whether or not the facts therein are consistent with those alleged in the complaint.” Id. When subject-matter jurisdiction is challenged, the party invoking jurisdiction has the burden of showing that it exists. Acosta-Ramirez v. Banco Popular de P.R., 712 F.3d 14, 20 (1st Cir. 2013).

         SSA contends that Eisenberg has failed to exhaust his administrative remedies. Specifically, SSA contends that its decision to suspend Eisenberg's September 2016 Supplementary Social Security Income (“SSI”) did not ...

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