Estate of Bernadette v. Barnhart ( 2007 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
August 2, 2007
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
ESTA TE O F BERN ADETTE F.
LEG O ,
Plaintiff-Appellant,
v. No. 06-1498
(D.C. No. 05-cv-01260-JLK)
M ICHAEL O. LEAVITT, Secretary of (D . Colo.)
the Department of Health and Human
Services,
Defendant-Appellee.
OR D ER AND JUDGM ENT *
Before TA CH A, Chief Judge, M U RPH Y and HO LM ES, Circuit Judges.
The Estate of Bernadette Lego (“the Estate”) appeals from the district
court’s decision granting the motion to dismiss filed by M ichael O. Leavitt,
Secretary of the Department of Health and Human Services (“the Secretary”), and
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
dismissing the Estate’s complaint for lack of subject matter jurisdiction.
Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.
Background
In August 2001, Bernadette Lego, a recipient of M edicare Part C benefits,
was admitted to Porter Adventist Hospital in Denver, Colorado. At the end of
September, M r. Robert Lego, an attorney and M rs. Lego’s husband, received
notice that if M rs. Lego continued her stay at Porter, she would no longer be
covered by M edicare and would be responsible for payment of all costs of
services. This determination was based on the M edicare review program’s
assessment that acute hospital care was no longer medically necessary. M r. Lego
sought reconsideration of the decision and it was denied. M rs. Lego remained at
Porter until November 9. In December, M r. Lego timely requested a hearing
before an Administrative Law Judge (A LJ) to review the denial of coverage.
After M rs. Lego’s death in June 2002, M r. Lego continued the administrative
appeal on behalf of the Estate.
On M ay 30, 2003, M r. Lego appeared at a hearing. The ALJ’s decision
reflects that “M r. Lego testified that he did not know why a hearing was being
held as it was his understanding that there was a zero balance on the account and
that no collection actions had been undertaken.” Aplt. App. at 21. The ALJ
adjourned the hearing to contact the provider, Centura Health, in order to clarify
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the matter. Id. The A LJ learned that there was an outstanding amount in excess
of $144,000 and that it w as an active collection account. Id.After the ALJ obtained this clarification, the ALJ’s staff contacted
M r. Lego to reschedule the hearing. In September 2004, another hearing was
scheduled for November 22, 2004. M r. Lego contacted the ALJ’s office by
telephone on November 19 to inform them that he was ill and requested a
continuance of the hearing. After M r. Lego’s phone call, the ALJ indicated that
he w ould not consider a continuance unless he could speak with M r. Lego’s
physician regarding M r. Lego’s medical condition. The ALJ did speak with
M r. Lego’s physician, although M r. Lego was not permitted to participate in the
phone call.
On the day of the hearing, November 22, M r. Lego filed an “Emergency
M otion to Continue Hearing and for Expedited Determination of Such
Continuance.” Representatives for Centura Health appeared at the hearing and
opposed the motion for a continuance. M r. Lego did not appear. On
December 29, the ALJ issued a decision denying the request for a continuance
and determining that “good cause” did not exist for M r. Lego’s failure to appear
at the hearing. Id. at 23. Because M r. Lego had not established good cause for
not appearing at the hearing, the ALJ dismissed the request for a hearing, which
left the earlier determination of non-coverage in effect.
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M r. Lego sought review of the A LJ’s decision through the M edicare
Appeals Council (M AC). In M ay 2005, the M AC denied the request, concluding
that there was no legal basis to review the ALJ’s decision. In July 2005,
M r. Lego filed a complaint in district court on behalf of the Estate seeking
judicial review of the ALJ’s decision. The Secretary filed a motion to dismiss,
arguing that the district court lacked subject matter jurisdiction over the Estate’s
complaint. The district court granted the motion and dismissed the case. The
Estate appealed.
Discussion
The Estate asserts that the district court erred by (1) failing to provide
factual findings and conclusions of law in violation of Fed. R. Civ. P. 52 when
the district court entered the order dismissing the complaint; and (2) granting the
Secretary’s motion to dismiss for lack of subject matter jurisdiction. W e review
de novo the district court’s dismissal of the Estate’s complaint for lack of subject
matter jurisdiction. See Harline v. Drug Enforcement Admin., 148 F.3d 1199,
1202 (10th Cir. 1998).
Rule 52
The Estate argues that the district court violated Rule 52(a) by not
providing factual findings and conclusions of law when the district court entered
its order granting the Secretary’s Fed. R. Civ. P. 12(b)(1) motion to dismiss. The
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Estate, however, provides an incomplete citation to Rule 52 thereby
misrepresenting the scope of the rule. In its brief, it states, “Fed. R. Civ. P. 52(a)
provides that a court ‘shall find the facts specially and state separately its
conclusions of law thereon . . . .’” Aplt. Br. at 14. The Estate neglects to include
in this excerpt an important and highly relevant portion of the rule, w hich states:
“Findings of fact and conclusions of law are unnecessary on decisions of motions
under Rule 12 or 56 or any other motion except as provided in subdivision (c) of
this rule.” Fed. R. Civ. P. 52(a) (emphasis added). Subdivision (c) does not apply
here because it relates to proceedings involving a trial without a jury. See Fed. R.
Civ. P. 52(c). The district court was therefore not required by Rule 52 to provide
findings of fact and conclusions of law when it granted the Secretary’s 12(b)(1)
motion to dismiss.
M oreover, we find the district court’s order sufficient to enable us to
conduct our appellate review. In the Secretary’s motion to dismiss, he argued that
the district court lacked subject matter jurisdiction because there was no final
decision after a hearing as required by 42 U.S.C. § 405(g) and that the Estate had
not alleged a colorable constitutional claim such that the Estate’s failure to
exhaust its administrative remedies should be excused. In the order, the district
court granted the motion to dismiss and then stated: “This case is DISM ISSED
for lack of subject matter jurisdiction. Plaintiff failed to exhaust all
administrative remedies.” Aplt. App. at 126. Given that the district court granted
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the motion to dismiss and dismissed the case on the basis argued for by the
Secretary in his motion, there was no need for further discussion by the district
court to enable this court to review the order.
Jurisdiction
The Estate argues that the district court erred in dismissing its complaint
for lack of subject matter jurisdiction because its complaint falls within the
judicial review language of 42 U.S.C. § 405(g). Section 405(g) is applicable to
the review of benefit decisions on M edicare+Choice Plans, substituting the
Secretary for the Commissioner of the Social Security Administration where
§ 405(g) refers to the Commissioner. See 42 U.S.C. § 1395w-22(g)(5). The
provision states in relevant part: “Any individual, after any final decision of the
[Secretary] made after a hearing to which he was a party . . . may obtain a review
of such decision by a civil action . . . .” Id. § 405(g).
Here, the ALJ dismissed the Estate’s request for a hearing based on
20 C.F.R. § 416.1457(b)(1). Under § 416.4157(b)(1)(i), an A LJ may dismiss a
request for a hearing if: (1) neither the plaintiff nor their representative appears
at the time and place set for the hearing; (2) the plaintiff has been notified before
the time set for the hearing that the request for a hearing may be dismissed
without further notice for failure to appear; and (3) good cause has not been found
for the plaintiff’s failure to appear. The ALJ concluded that the Estate had not
demonstrated good cause for its failure to appear at the hearing. This left the
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earlier determination of non-coverage in effect and no hearing was held on the
merits of the Estate’s claim regarding the denial of M edicare benefits.
In Califano v. Sanders, the Supreme Court held that § 205(g) (later codified
as § 405(g)) “clearly limits judicial review to a particular type of agency action, a
‘final decision of the Secretary made after a hearing.’” 430 U.S. 99, 108 (1977)
(quoting § 205(g)). Although Califano involved a different type of proceeding–a
petition to reopen a prior final decision–the Fifth Circuit applied Califano to a
case that is virtually identical to the case here. In Brandyburg v. Sullivan, 959
F.2d 555, 556-57 (5th Cir. 1992), the plaintiff requested a hearing with an ALJ
after his application for supplemental security income disability benefits was
denied initially and on reconsideration. His hearing was rescheduled twice. Five
days before the hearing was scheduled to take place, plaintiff’s attorney requested
a continuance. Neither plaintiff nor his attorney appeared at the hearing.
Subsequently, the ALJ entered an order dismissing the request for a hearing based
on his finding that plaintiff had failed to appear at the hearing without good
cause. Plaintiff sought review of the ALJ’s dismissal, but the Appeals Council
denied review. Plaintiff then filed an action in federal district court. Defendant
filed a motion to dismiss, arguing that the court lacked jurisdiction because
plaintiff had failed to exhaust his administrative remedies and there had been no
final decision of the Secretary within the meaning of § 405(g). The district court
granted the motion. The Fifth Circuit affirmed, noting that Califano explicitly
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held “that § 405(g) only authorizes judicial review when there is a hearing.” Id.
at 561. M oreover, the court went on to explain that it and other circuits had held
that district courts lack jurisdiction to review other types of procedural dismissals
under § 416.1457 and that a dismissal for failure to appear at a hearing should be
treated the same way. Id. Accordingly, the Fifth Circuit held “that the district
court was correct in its holding that the ALJ’s dismissal of [plaintiff’s hearing]
request was not a ‘final decision’ subject to judicial review under section 405(g).”
Id. at 562.
Relying on the language of § 405(g) and the cases referenced above, the
Secretary’s position is that the district court correctly determined that it lacked
jurisdiction over the Estate’s complaint because “there was no final decision of
the Secretary after a hearing.” Aplee. Br. at 16. The Estate disagrees, arguing
that its complaint falls within the judicial review language of § 405(g) because
there were two hearings before the ALJ entered its dismissal–the impromptu
telephone hearing with M r. Lego’s doctor and the November 22 hearing.
The ALJ’s phone conversation with M r. Lego’s doctor w as not a hearing.
It was simply a conversation between the ALJ and M r. Lego’s doctor concerning
M r. Lego’s alleged medical condition and the necessity for a continuance. As for
the November 22 hearing, although Centura appeared for the hearing, M r. Lego,
the Estate’s representative, did not appear. As in Brandyburg, there was no
merits hearing that would fall within the meaning of § 405(g) and therefore the
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district court was correct in dismissing the complaint for lack of jurisdiction.
M oreover, the ALJ’s dismissal was a procedural one and, as the court noted in
Brandyburg, district courts lack jurisdiction to review an ALJ’s procedural
dismissal under § 416.1457. See Brandyburg, 959 F.2d at 561-62. This provides
an additional basis for affirming the district court’s decision.
Finally, the Estate argues that even if Califano and its progeny in some
measure support the district court’s dismissal for lack of jurisdiction, Califano
provides an exception permitting federal courts to review constitutional
challenges. In order to be entitled to jurisdiction under this exception, however,
the Estate must allege a “colorable constitutional claim.” Califano, 420 U.S.
at 109; see also Nelson v. Sec’y of Health & H um an Servs., 927 F.2d 1109, 1111
(10th Cir. 1990); Brandyburg, 959 F.2d at 562. “A constitutional claim is not
colorable if it clearly appears to be immaterial and made solely for the purpose of
obtaining jurisdiction or [] is wholly insubstantial or frivolous.” Hoye v. Sullivan,
985 F.2d 990, 991-92 (9th Cir. 1992) (per curiam) (quotation omitted).
The Estate’s complaint contains the following allegation:
Plaintiff is also entitled to relief because the proceedings pursuant to
which the Order was entered (including (I) the entire procedural
history respecting the setting of a hearing before the ALJ, and (ii) the
circumstances, beginning on November 19, 2004 with Lego’s initial
notification to the ALJ’s office that his illness would prevent his
attendance at the N ovember H earing, and culminating in the Order)
denied Plaintiff its constitutional rights of due process, including
rights to proper and timely notice and hearing with respect to review
of both the First Review Decision and the Reconsideration Decision,
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with respect [to] the November Hearing, and also with respect to the
Order.
Aplt. App. at 12-13. Although the Estate made the conclusory allegation that it
was “denied its constitutional rights of due process, including rights to proper and
timely notice and hearing,” id. at 13, it failed to allege facts to support that
allegation. For example, M r. Lego has not alleged any violations of § 416.1457.
He has not alleged (1) that he was present at the hearing; (2) that he did not
receive notice of the consequences if he failed to appear; or (3) that the ALJ
failed to make a good cause finding for his failure to appear. See
§ 416.1457(b)(1)(i).
W ith respect to any claim the Estate may have that the ALJ’s consideration
of its request for a continuance violated its due process rights, the Estate has not
identified any authority that establishes that it had a constitutionally protected
right to have a hearing on its request for a continuance. Relying on M athews v.
Eldridge, 424 U.S. 319, 333 (1976), the Estate argues that it was entitled to a
hearing on the continuance where M r. Lego was present when the ALJ spoke with
his doctor, where M r. Lego could argue before the ALJ based on the evidence,
and where M r. Lego could then receive a record of the proceedings. Although the
Estate cites to M athews, it provides no analysis as to how M athews applies to the
Estate’s request for a continuance, other than to state that under M athews “due
process requires an opportunity to be heard at a meaningful time and in a
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meaningful manner.” A plt. Br. at 22; see also id. at 25. As the Secretary points
out, however, in order for the Estate to benefit from the M athews decision, it must
establish that it “had a constitutionally protected property interest in having a
full-blown hearing on the continuance request.” Aplee. Br. at 23 (emphasis
added); see also M athews, 424 U.S. at 333 (“This Court has consistently held that
some form of hearing is required before an individual is finally deprived of a
property interest.” (emphasis added)). There is nothing in the Estate’s complaint,
its response to the motion to dismiss, or its appellate briefs that identifies the
“property interest” that it was deprived of when the ALJ did not hold a hearing on
its request for a continuance.
Given the lack of factual or legal support for the Estate’s constitutional
allegations, we conclude that it did not raise a colorable constitutional claim and
that the district court’s decision to dismiss the complaint for lack of subject
matter jurisdiction was correct. Accordingly, the judgment of the district court is
A FFIRME D.
Entered for the Court
M ichael R. M urphy
Circuit Judge
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