Chelsea B. v. Commissioner of Social Security

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ________________________________________

CHELSEA B.,

Plaintiff,

v. 8:24-cv-01038 (ML) COMMISSIONER OF SOCIAL SECURITY,

Defendant. ________________________________________

APPEARANCES: OF COUNSEL:

SCHNEIDER & PALCSIK MARK A. SCHNEIDER, ESQ. Counsel for the Plaintiff 57 Court Street Plattsburgh, New York 12901

SOCIAL SECURITY ADMINISTRATION KATHRYN POLLACK, ESQ. Counsel for the Defendant Special Assistant U.S. Attorney 6401 Security Boulevard Baltimore, Maryland 21235

MIROSLAV LOVRIC, United States Magistrate Judge

ORDER Currently pending before the Court in this action, in which Plaintiff seeks judicial review of an adverse administrative determination by the Commissioner of Social Security, pursuant to 42 U.S.C. § 405(g), are cross-motions for judgment on the pleadings.1 Oral argument was heard

1 This matter, which is before me on consent of the parties pursuant to 28 U.S.C. § 636(c), has been treated in accordance with the procedures set forth in General Order No. 18. Under that General Order once issue has been joined, an action such as this is considered procedurally, as if cross-motions for judgment on the pleadings had been filed pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. in connection with those motions on March 16, 2026, during a telephone conference conducted on the record. At the close of argument, I issued a bench decision. This Court SO ORDERED that Plaintiff's Complaint at Dkt. No. 1 is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction and failure to exhaust administrative remedies. This Court set forth its reasoning and analysis on the record. After due deliberation, and based upon the Court’s oral bench decision, which has been transcribed, is attached to this order, and is incorporated herein by reference, it is ORDERED as follows: 1) Plaintiff's Complaint at Dkt. No. 1 is DISMISSED WITHOUT PREJUDICE FOR LACK OF SUBJECT MATTER JURISDICTION AND FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. 2) The Clerk of Court is respectfully directed to enter judgment, based upon this determination, DISMISSING Plaintiff's Complaint without prejudice in its entirety and closing this case. Dated: March 19, 2026 Binghamton, New York

Miroslav Lovric United States Magistrate Judge Northern District of New York

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ------------------------------------------------------x CHELSEA B., Plaintiff, -v- 24-CV-1038 ACTING COMMISSIONER OF SOCIAL SECURITY, Defendant. ------------------------------------------------------x DECISION TRANSCRIPT BEFORE THE HONORABLE MIROSLAV LOVRIC March 16, 2026 15 Henry Street, Binghamton, NY 13901 For the Plaintiff: SCHNEIDER & PALCSIK 57 Court Street Plattsburgh, New York 12901 BY: MARK A. SCHNEIDER, ESQ. For the Defendant: SOCIAL SECURITY ADMINISTRATION 6401 Security Boulevard Baltimore, Maryland 21235 BY: KATHRYN S. POLLACK, ESQ. Hannah F. Cavanaugh, RPR, CRR, CSR, NYACR, NYRCR Official United States Court Reporter 100 South Clinton Street Syracuse, New York 13261-7367 (315) 234-8545 1 (The Court and all parties present by video. Time 2 noted: 2:45 p.m.) 3 THE COURT: The Court's going to commence its 4 analysis, reasoning, and decision as follows: First, the Court 5 notes that plaintiff commenced this proceeding pursuant to Title 6 42 U.S. Code 405(g) to challenge the adverse determination by

7 the Commissioner of Social Security finding that she was not 8 disabled at the relevant times and, therefore, ineligible for 9 the benefits that she sought. 10 Procedurally, the Court notes as follows: Plaintiff 11 applied for Title XVI benefits on January 28th of 2021, alleging 12 an onset date of January 1st of 2008. 13 Administrative Law Judge Asad M. Ba-Yunus conducted a 14 hearing on May 16, 2022, to address plaintiff's application for 15 benefits, and the ALJ issued an unfavorable decision on 16 June 20th of 2022. That decision became the final determination 17 of the agency on May 9th of 2023, when the Appeals Council 18 denied plaintiff's request for review. 19 On May 18th of 2023, plaintiff filed a Complaint in 20 the U.S. District Court for the Northern District of New York 21 challenging the Commissioner's final decision, and that's found

22 at Docket No. 8:23-CV-600, and that was before Magistrate Judge 23 Stewart. On October 23rd of 2023, the parties stipulated that 24 the decision of the Appeals Council be vacated and remanded for 25 further administrative proceedings, which was so ordered by 1 Magistrate Judge Daniel J. Stewart. 2 On November 29th of 2023, the Appeals Council 3 remanded for further proceedings consistent with Judge Stewart's 4 order. Accordingly, ALJ Ba-Yunus conducted a new telephonic 5 hearing on May 23rd of 2024. 6 ALJ Ba-Yunus issued a new unfavorable decision on

7 August 14th of 2024. 8 This action was commenced on August 23rd of 2024, 9 nine days after ALJ Ba-Yunus' disability determination. 10 The Court first turns to the threshold issue of 11 subject matter jurisdiction. Pursuant to Title 42, United 12 States Code, Section 405(g), an individual must obtain a "final 13 decision of the Commissioner" before a federal court can review 14 Social Security benefits determinations. The term "final 15 decision" is not defined in the Social Security Act, but has 16 been clarified by the Commissioner through a series of 17 regulations. 18 In a case like this, where a court has previously 19 remanded for further administrative proceedings, the ALJ's new 20 disability determination becomes "the final decision of the 21 Social Security Administration" unless the Appeals Council

22 assumes jurisdiction of the case in one of two ways: First -- 23 in the first way, in response to written exceptions filed by the 24 applicant within 30 days of receipt of the ALJ's decision; or 25 two, the second way, by the Appeals Council proactively 1 exercising jurisdiction over the ALJ's decision within 60 days. 2 As the notice provided with ALJ Ba-Yunus' August 14, 3 2014, decision -- I should say August 14th of 2024, so I want to 4 correct that -- that's ALJ's decision of August 14, 2024, that 5 decision explained if the claimant does not file written 6 exceptions and the Appeals Council does not exercise its review

7 powers on its own, the ALJ's decision becomes final on the 61st 8 day following its issuance. 9 The Appeals Council does not provide notice that it 10 is declining jurisdiction. Rather, a claimant who elects not to 11 file written exceptions must simply wait for the 60 days to 12 allow the Appeals Council an opportunity to assert jurisdiction. 13 Once that waiting period has expired, the claimant has 60 days 14 to file a complaint in federal court. 15 Because plaintiff's counsel filed a complaint nine 16 days after ALJ Ba-Yunus' disability determination, this Court 17 issued a text order on February 9th of 2026, directing the 18 parties to brief the discrete issue of whether this Court has 19 subject matter jurisdiction over plaintiff's complaint. 20 The Court now turns to the parties' supplemental 21 briefs on subject matter jurisdiction and exhaustion. On

22 February 10, 2026, plaintiff's counsel filed a two-page letter 23 brief on the issue, raising the following points in that letter: 24 First, plaintiff articulated that plaintiff did not file any 25 exceptions to the ALJ's decision, and the Appeals Council did 1 not assert its jurisdiction before or after the Complaint was 2 filed. Plaintiff in that letter also contends that even after 3 the Complaint was filed, the Appeals Council could have 4 exercised its authority and "deprived this Court of 5 jurisdiction." 6 Next, plaintiff articulates in that letter that the

7 Commissioner did not file a motion to dismiss the Complaint as 8 premature. 9 Plaintiff also contends the matter has been fully 10 briefed and there's no prejudice to the Commissioner if this 11 Court decides it on the merits. 12 Plaintiff then contends equitable tolling should 13 apply, and plaintiff's letter brief simply mentions equitable 14 tolling, but does not explain how plaintiff satisfies the three 15 requirements. 16 Plaintiff also in that letter articulates the Social 17 Security Act must be liberally applied to be protective of 18 individuals like the plaintiff, and "the interest of justice and 19 judicial economy" support this Court exercising jurisdiction 20 over the Complaint. 21 Plaintiff also articulates specifically at page 2 --

22 and quoting directly from page 2 of plaintiff's letter brief, 23 "In a national Lexis search, plaintiff's undersigned attorney 24 find[s] no reported cases where the district court refused 25 jurisdiction because the plaintiff filed the complaint prior to 1 60 days after the ALJ's decision when there was no exception 2 pending at the Appeals Council." Plaintiff goes on to 3 articulate, "Even if there were such a decision, equitable 4 tolling should apply. This undersigned has several times" -- 5 and I'm quoting now from the page 2 letter, "This undersigned 6 has several times in the past filed the complaint prior to the

7 60 days and this court has never denied jurisdiction." 8 Next, on February 17th of 2026, the Commissioner 9 filed a two-page letter brief on the issue, raising the 10 following points: Defendant articulated in that letter, 11 plaintiff's complaint was filed nine days after the ALJ's 12 decision, and within the 60-day period allowed for the Appeals 13 Council to assume jurisdiction. "As such, Plaintiff's complaint 14 was prematurely filed," defendant articulated. 15 Defendant went on to state, after plaintiff filed her 16 Complaint, the Appeals Council prepared the certified 17 administrative record. 18 The defendant continued in that letter, the 19 Commissioner directs the court's attention to the case of Gray 20 v. Astrue. That's found at 10-CV-3175. That is a 2012 WL 21 570064 case. That's District of South Carolina, issued

22 January 31, 2012, and the Commissioner cites that as persuasive 23 authority. Defendant articulates in Gray, the magistrate judge 24 resolved a prematurely filed case on the merits because the 25 60-day time period ultimately passed without the Commissioner 1 moving to dismiss or otherwise objecting. 2 And in connection with the letter filed by the 3 defendant and the articulating of the Gray case, this Court 4 notes that the Gray case provides minimal analysis, and the 5 facts are distinguishable. The Gray plaintiff filed a complaint 6 47 days after the ALJ's decision, and the Gray court treated

7 this as an oversight rather than a deliberate tactic. Here, in 8 our case, counsel for plaintiff appears to have made a practice 9 of prematurely and intentionally filing complaints in federal 10 court prior to administrative exhaustion. Counsel for Plaintiff 11 admits as much in his February 10, 2026, two-page letter brief. 12 The Court also notes that in cases in the Northern District of 13 New York at the following dockets, Docket No. 26-CV-209, Docket 14 No. 25-CV-117, Docket No. 24-CV-1352, Docket No. 23-CV-1233, and 15 lastly, at Docket No. 23-CV-654, counsel for plaintiff has 16 prematurely filed complaints before administrative exhaustion. 17 In the case of Docket No. 23-CV-654 that I mentioned a few 18 moments ago, counsel for plaintiff filed the complaint in 19 federal court on the same day that the ALJ issued their 20 decision. 21 In citing Gray, counsel for defendant seems to be

22 avoiding a concrete statement on waiver of the exhaustion 23 requirements and leaving it up to the Court. However, even if 24 the Commissioner made an explicit waiver of the exhaustion 25 requirements, there is authority for the Court to disregard it, 1 given the broader impact on judicial efficiency. The 2 Commissioner has discretion to waive the exhaustion 3 requirements, but cases may arise where "deference to the 4 agency's judgment is inappropriate." See, case Mathews v. 5 Eldridge, 424 United States 319, at page 330. And that is a 6 U.S. Supreme Court case, 1976. This was the principle behind

7 equitable tolling. However, the same rationale would apply to 8 overruling a waiver in this case, given the broader policy 9 implications of approving a plaintiff ignoring the final 10 decision requirement. In addition, the Commissioner can provide 11 other administrative relief when the case is dismissed. See, in 12 Sech v. Commissioner of Social Security, 2024 WL 333067, at page 13 1. That's a Second Circuit January 25, 2024, case. Therein, 14 Magistrate Judge Baxter dismissed plaintiff's late complaint as 15 untimely. The Commissioner waited until the matter was appealed 16 to the Second Circuit before granting administrative permission 17 to file a late complaint, and the matter was remanded to the 18 district court. 19 In this case, plaintiff requested ten days to file a 20 reply brief if the Commissioner opposed her position and "has a 21 supporting precedential decision from the Second Circuit (or any

22 Circuit)." Although the Commissioner's brief -- and by brief, 23 the Court means the letter brief, did not meet this criteria, 24 this Court granted plaintiff an opportunity to file a reply. 25 On February 23rd of 2026, plaintiff filed a 1 supplemental brief to discuss a recent Second Circuit decision 2 relevant to the merits of this case, but plaintiff provided no 3 further argument or support regarding the exhaustion issue and 4 subject matter jurisdiction. 5 Lastly, on March 10, 2026, at Docket No. 26, the 6 Commissioner filed a letter brief responding to plaintiff's

7 arguments on the merits. 8 And then lastly, as noted earlier, the -- on 9 March 16, 2026, at Docket No. 27, plaintiff filed correspondence 10 advising this Court of a favorable disability determination 11 issued on January 26th of 2026, commencing from the date of 12 plaintiff's more recent SSI application of September 19th of 13 2024. 14 The Court will begin its analysis as follows: The 15 parties both recognize that plaintiff's complaint was filed 16 prematurely. 17 Based on the parties' briefs and this Court's 18 research, the narrow issue presented in this case appears to be 19 one of first impression in the Northern District of New York and 20 in the Second Circuit. And the issue is -- that is, whether the 21 court has subject matter jurisdiction over a prematurely filed

22 complaint challenging an ALJ's disability determination issued 23 in response to an earlier judicial remand, where plaintiff never 24 filed written exceptions and the Appeals Council did not 25 otherwise attempt to assert jurisdiction. 1 However, the general principles applicable to 2 sovereign immunity, subject matter jurisdiction, exhaustion, 3 waiver of administrative remedies, and equitable tolling are 4 well-established in Social Security Disability cases. Thus, 5 this Court draws upon the relevant United States Supreme Court 6 precedent in Smith v. Berryhill, 587 U.S. 471, a 2019 Supreme

7 Court case, also, case of Sims v. Apfel, 530 U.S. 103, a 2000 8 U.S. Supreme Court case, Heckler v. Ringer, 466 U.S. 602, a 1984 9 Supreme Court case, also Califano v. Sanders, 430 U.S. 99, a 10 1977 Supreme Court case, and Mathews v. Eldridge, 424 U.S. 319, 11 a 1976 U.S. Supreme Court case, and then, additionally, relevant 12 Second Circuit precedent in case of Iwachiw v. Massanari, that's 13 125 F. App'x 330, a Second Circuit 2005 case, and, also, lastly, 14 Abbey v. Sullivan, at 978 F.2d 37, a Second Circuit 1992 case. 15 Following that precedent leads this Court to conclude 16 that the dismissal of plaintiff's complaint at Docket No. 1 17 without prejudice is both required and appropriate. 18 This Court notes that paragraph 14 of plaintiff's 19 complaint asserts that ALJ Ba-Yunus' August 14, 2024, disability 20 determination "is a final decision of the Commissioner for 21 purposes of review by this Court." This statement was

22 inaccurate at the time it was made. As the parties agree, there 23 was no final decision of the Commissioner when the Complaint was 24 filed on August 23rd of 2024. 25 To varying degrees, both parties' briefs suggest that 1 the eventual expiration of the 60-day period for the Appeals 2 Council to assert jurisdiction waives or cures the defect in the 3 prematurely filed Complaint. This Court rejects this legal 4 interpretation as unsupported by statute or case law. The 5 exhaustion requirement is a condition on the waiver of sovereign 6 immunity and must be strictly construed. Such "waivers of

7 sovereign immunity must be 'unequivocally expressed' in 8 statutory text, and simply cannot the implied." The few court 9 to consider similar arguments have rejected them. See case of 10 Martin v. Astrue at 07-CV-928. That is a District Judge Gary L. 11 Sharpe case, along with Magistrate Judge Lowe. That's found at 12 2008 WL 314524, a Northern District of New York, February 4, 13 2008, case. And therein, filing -- therein, the case stands for 14 filing complaints seven days after an ALJ's decision "did not 15 give the Appeals Council an opportunity to sua sponte assume 16 jurisdiction of the case." See, also, case of Linsky v. Astrue, 17 at 09-3720 SI. That's found at 2010 WL 3184485, at page 2. 18 That's a Northern District of California, August 11, 2010, case 19 standing for the proposition and finding argument that "the 20 decision of the ALJ on remand is automatically the final 21 decision unless and until the Appeals Council accepts

22 jurisdiction" ignores the "plain text of the applicable 23 regulations." This Court finds this line of cases more 24 compelling than the limited analysis set forth in the Gray case. 25 Likewise, this Court rejects the suggestion that this 1 case, which is fully briefed, has proceeded too far to be 2 dismissed on jurisdictional grounds. This argument ignores the 3 rule that subject matter jurisdiction can be raised by any party 4 or the Court at any time. It also ignores previous decisions in 5 this court, which have resolved questions of subject matter 6 jurisdiction in Social Security Disability cases after the

7 Administrative Transcript has been filed. See case Louisiana S. 8 v. Commissioner of Social Security. That's found at 20-CV-130. 9 And that is a Chief Judge Sannes and Magistrate Judge Hummel 10 case. That's found at 2021 WL 91691, a Northern District of New 11 York, March 20, 2021, case standing for the proposition 12 requesting supplemental briefing on subject matter jurisdiction 13 after filing of Administrative Transcript and briefing on the 14 merits; see, also, case of Jaquish v. Commissioner of Social 15 Security, 16-CV-399. That is a Judge Suddaby decision, 2017 WL 16 3917019, a Northern District of New York, September 6, 2017, 17 case. And, therein, articulating that although neither party 18 briefed the issue, the court dismissed plaintiff's SSI appeal 19 for failure to exhaust before addressing the merits of 20 plaintiff's fully exhausted DIB appeal. 21 This Court also rejects plaintiff's assertion that

22 this Court has subject matter jurisdiction because "there will 23 be no prejudice to the Commissioner" by overlooking the 24 premature filing and issuing a decision on the merits. 25 Exhaustion requirements serve the dual purpose of protecting 1 administrative agency authority and promoting judicial 2 efficiency. Both the Commissioner and the courts would be 3 harmed by an approach that rendered the statutory and regulatory 4 exhaustion requirements a nullity and incentivized plaintiffs to 5 immediately file their complaint in order to step ahead of 6 litigants who complied with the exhaustion requirements in an

7 already overcrowded federal docket. That is especially true in 8 cases like this, where the relevant exhaustion requirement is 9 merely waiting for 60 days with the hope that the Appeals 10 Council will decline to act. 11 The statement from plaintiff's counsel that he has 12 ignored the final decision requirement in similar cases without 13 consequences reinforces this point. This Court's cursory review 14 finds that plaintiff's counsel has filed at least five such 15 complaints since 2023, including one complaint filed on the same 16 date as the ALJ's disability determination. Judicial approval 17 of such litigation tactics would only encourage the strategic 18 avoidance of exhaustion requirements. 19 Plaintiff raises the prospect of equitable tolling, 20 but no extraordinary circumstances exist that would justify such 21 relief. Applying the traditional three factor test, this Court

22 finds that: One, plaintiff's claim is not collateral to a 23 demand for benefits, it is the demand for benefits itself. Two, 24 there's no indication that exhaustion would have been futile. 25 Indeed, exhaustion merely required waiting for 60 days to see 1 whether the Appeals Council asserted its authority to review. 2 And three, there's no irreparable harm to plaintiff. Courts 3 have generally found irreparable harm -- courts have generally 4 not found -- excuse me, not found irreparable harm where 5 plaintiff may file a new application for SSI benefits. In 6 addition, because dismissal is without prejudice, plaintiff may

7 be able to obtain an extension of time from the Appeals Council 8 to file a new complaint even though the statute of limitations 9 has expired. See case of Sech v. Commissioner of Social 10 Security, 2024 WL 333067, at page 1. That's a Second Circuit, 11 January 25, 2024, case. 12 Finally, this Court rejects the characterization by 13 plaintiff's counsel that this decision involves the Court 14 "refusing" or "denying" jurisdiction. This Court is merely 15 applying the parameters for subject matter jurisdiction 16 established by Congress. While the Social Security Act should 17 be liberally applied, it is well-established that "strict 18 adherence to the procedural requirements specified by the 19 legislature is the best guarantee of evenhanded administration 20 of the law." 21 Therefore, based on all of this, and as a result,

22 based on these findings, it is so ordered that plaintiff's 23 Complaint, Docket No. 1, is dismissed without prejudice for lack 24 of subject matter jurisdiction and failure to exhaust 25 administrative remedies. 1 (Time noted: 3:11 p.m.) 2 3 4 5 6

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23 24 25 1 2 3 4 CERTIFICATE OF OFFICIAL REPORTER 5 6

7 I, HANNAH F. CAVANAUGH, RPR, CRR, CSR, NYACR, 8 NYRCR, Official U.S. Court Reporter, in and for the United 9 States District Court for the Northern District of New York, DO 10 HEREBY CERTIFY that pursuant to Section 753, Title 28, United 11 States Code, that the foregoing is a true and correct transcript 12 of the stenographically reported proceedings held in the 13 above-entitled matter and that the transcript page format is in 14 conformance with the regulations of the Judicial Conference of 15 the United States. 16 17 Dated this 18th day of March, 2026. 18 19 s/ Hannah F. Cavanaugh______________________ 20 HANNAH F. CAVANAUGH, RPR, CRR, CSR, NYACR, NYRCR 21 Official U.S. Court Reporter 22

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