USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 1 of 24
PUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 24-1215
PATSY TALLEY,
Plaintiff – Appellant,
v.
DALE R. FOLWELL, Individually and in his Official Capacity as Treasurer of the State of North Carolina; LENTZ BREWER; JOHN EBBIGHAUSEN; VERNON GAMMON; DIRK GERMAN; BARBARA GIBSON; LINDA GUNTER; OLIVER HOLLEY; GREG PATTERSON; MARGARET READER; JOSHUA SMITH; CATHERINE TRUITT; JEFFREY WINSTEAD, individually and in their official capacity,
Defendants – Appellees.
Appeal from the United States District Court for the Eastern District of North Carolina, at Greenville. Terrence W. Boyle, District Judge. (4:22-cv-00027-BO)
Argued: December 11, 2024 Decided: April 4, 2025
Before AGEE, QUATTLEBAUM, and RUSHING, Circuit Judges.
Affirmed by published opinion. Judge Quattlebaum wrote the opinion, in which Judge Agee and Judge Rushing joined.
ARGUED: Valerie Bateman, NEW SOUTH LAW FIRM, Carrboro, North Carolina, for Appellant. Olga Eugenia Vysotskaya de Brito, NORTH CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellees. ON BRIEF: Joshua H. Stein, Attorney General, Mary W. Scruggs, Special Deputy Attorney General, NORTH CAROLINA DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellees. USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 2 of 24
QUATTLEBAUM, Circuit Judge:
“There is no such thing as a free lunch.” 1 This appeal illustrates this old adage. For
over eight years, North Carolina paid Patsy Talley $857 more in monthly retirement
benefits than she was supposed to receive. All told, Talley was overpaid to the tune of
$86,173.93. When North Carolina finally realized its mistake, it notified Talley that going
forward, her monthly benefits would be reduced to recoup the overpayment. Then, it began
doing just that. In response, Talley sued, asserting several constitutional theories all
premised on North Carolina’s failure to provide a hearing before it began reducing her
monthly retirement payments. She never denied that she was overpaid or disputed the
amount. She instead complained that the way North Carolina went about recouping its
overpayment failed to provide her due process rights. The district court dismissed all her
claims under Rule 12 of the Federal Rules of Civil Procedure. We agree that Talley failed
to plead any plausible claims. So, we affirm.
1 This phrase has an interesting history. It seems to have arisen in the late nineteenth century, when bars provided lunch at no cost to lure in customers who would spend more than the bar’s costs of providing lunch in alcohol purchases. See Rudyard Kipling, RUDYARD KIPLING’S WEST: AMERICAN NOTES BY RUDYARD KIPLING 19 (Arrell Morgan Gibson ed., 1981) (describing how he discovered “the institution of the ‘Free Lunch’” while touring the United States in 1889, in which “[y]ou paid for a drink and got as much as you wanted to eat”); see also Phoenixania, THE DAILY PHOENIX, Sept. 6, 1873, Vol. IX, No. 144 (“One of the most expensive things in this city—Free lunch.”). Milton Friedman later used the phrase as a book title to describe the economic theory of opportunity costs. See Milton Friedman, THERE’S NO SUCH THING AS A FREE LUNCH (1975). Colloquially, the point is simple. Rarely, if ever, do you get something for nothing.
2 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 3 of 24
I.
A.
Talley retired from the Beaufort County School System in 2008, after teaching in
the district for over 25 years. The North Carolina Department of State Treasurer has a
Retirement System Division (“RSD”), which in turn has a subdivision called the “Teachers’
and State Employees’ Retirement System” (“TSERS”). J.A. 16. Talley participated in
TSERS, accruing vested retirement benefits while she worked as a teacher. TSERS offers
various options through which retired teachers can receive their accrued benefits. Talley
chose an option that allowed her to receive “a larger monthly payment than the maximum
allowable benefits until the month of her sixty-second birthday, after which point [her]
payment amount [would be] decreased by an amount equal to an estimate of [her] social
security benefits.” J.A. 20. Under this method, her overall income would remain constant
even after her retirement benefits decreased because her social security benefits would
offset that reduction.
At first, things worked as planned. Talley “received $2,703.34 per month . . .until
her 62nd birthday.” J.A. 20. After her 62nd birthday, in December 2009, she began to
receive a reduced monthly benefits payment from TSERS, as expected. Also as planned,
Talley’s Social Security benefits made up the difference. But in April of 2010, things began
to go awry. At that time, TSERS 2 determined that Talley’s monthly payments were $17.90
2 Talley refers to both RSD and TSERS throughout her complaint. With the understanding that these entities are not one and the same, we will use the term TSERS in this opinion to refer to both. 3 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 4 of 24
less than they should have been both before and after she turned 62. To rectify this mistake,
TSERS paid Talley for the total amount of the underpayments through April 2010. That
corrective action itself was fine. But the next month, TSERS made another mistake. This
time, it began paying Talley the recalculated “before age 62” amount when it should have
sent the recalculated “after age 62” amount. Since the recalculated “before age 62”
payment was more than the recalculated “after age 62” payment, Talley was overpaid each
month beginning in April of 2010.
This overpayment continued for over eight years. Finally, in August 2018, TSERS
realized its mistake. A few months later, the Executive Director of RSD notified Talley by
letter that she “had been overpaid in the amount of $86,173.93 . . . .” J.A. 21. And about
one month after that, the Deputy Director of Member Services of TSERS notified Talley,
again by letter, that her monthly checks would be reduced by $926.35 beginning in April
of 2019. In April, Talley was informed by email that she could appeal the reduction.
In response to this email, Talley’s lawyer asked that an earlier email from Talley’s
son to the North Carolina State Treasurer inquiring about the reduction in her pension
payments be treated as an appeal. Her lawyer also asked that any reduction in her retirement
payments be delayed until the matter was “resolved.” J.A. 22. Despite that, in April 2019,
Talley began receiving the reduced benefit checks.
On April 24, 2019, Talley was notified that the final agency decision was to reduce
her monthly checks by 50%. In June, she filed a petition in the Office of Administrative
Hearings to stop the taking of her property “without an opportunity to be heard.” J.A. 23.
While that administrative proceeding was pending, TSERS agreed to reduce the amount of
4 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 5 of 24
recoupment each month. Instead of reducing her benefits check by 50% each month, it
agreed to reduce it by just 10%. In other words, TSERS did not agree to reduce the total
amount it was seeking to recoup, only to recoup at a slower pace.
As part of the administrative proceeding, TSERS and Talley moved for summary
judgment. On February 19, 2020, an Administrative Law Judge (“ALJ”) granted TSERS’
motion for summary judgment and denied Talley’s. In its decision, the ALJ found that
Talley was overpaid by $86,173.93. It then held that (1) TSERS had a statutory obligation
to recoup the overpayment amount under N.C. Gen. Stat. § 143-64.80(b); (2) the
overpayment amount could be recouped by offsetting the overpayment against an
individual’s retirement allowance; (3) “a contested case before the Office of Administrative
Hearings in the executive branch is ‘not a proper method of challenging the
constitutionality of a statute’”; and (4) because there was no dispute of material fact in
controversy, Talley’s petition should be dismissed. J.A. 65. In this final decision, the ALJ
notified Talley that she could appeal the decision to the superior court of the county where
she resides. Talley did not exercise this right to appeal.
B. Talley sued the State of North Carolina, TSERS, RSD, State Treasurer Dale Folwell
(individually and in his official capacity) and twelve current or former members of TSERS’
board, individually and in their official capacities, in federal court. She asserted claims for
(1) deprivation of due process under the U.S. Constitution; (2) deprivation of due process
under the North Carolina Constitution; (3) deprivation of equal protection and substantive
due process under the U.S. Constitution; and (4) deprivation of equal protection and
5 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 6 of 24
substantive due process under the North Carolina Constitution. Talley primarily
complained that reducing her monthly benefits checks without any sort of pre-deprivation
hearing and without any set protocol for how overpayments should be recouped violated
her due process and equal protection rights. In her complaint, she purported to bring claims
“on behalf of herself and all similarly situated individuals . . . under 42 U.S.C. § 1983 for
the deprivation of property and property rights without due process.” J.A. 15. But she has
yet to file a motion for class certification. Thus, for our purposes, Talley is the only plaintiff
in this case.
After defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(1)
and 12(b)(6), Talley voluntarily dismissed her claims against the State of North Carolina,
TSERS and RSD and her North Carolina Constitution-based claims. That left the individual
TSERS Board of Trustees members as defendants on the federal law-based claims. Then,
the district court dismissed Talley’s claims against the defendants in their official
capacities, explaining that Talley’s claims did not allege ongoing violations of her rights
and did not seek prospective relief. As a result, the court held that the Eleventh Amendment
immunized the defendants from those claims. It also dismissed Talley’s substantive due
process claim, explaining that “the availability of internal review” and the “post-
deprivation quasi-judicial hearing” meant that she had received fair procedure and thus
failed to state a substantive due process claim. J.A. 83. Next, the district court dismissed
her equal protection claim, holding that (1) she had “not alleged the presence of any suspect
class or the violation of a fundamental right” and (2) that she had not shown that “treating
current employees and retirees differently or reducing overpayment recoupment
6 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 7 of 24
percentages only for people who ‘push back’ [was] not rationally related to a legitimate
state interest, i.e., fully recouping the overpayment of retirement benefits.” J.A. 84. Last,
as to Talley’s procedural due process claim against the defendants in their individual
capacities, the district court held that Talley sufficiently alleged a property interest in “the
continued receipt of full benefits prior to a reduction based upon the state’s recoupment
procedures” and that the process provided to her prior to the initiation of recoupment
procedures was constitutionally inadequate. J.A. 81. This allowed the individual capacity
procedural due process claim to go forward.
The defendants answered, asserting qualified immunity, among other defenses.
They also moved for judgment on the pleadings under Rule 12(c). Around the same time,
Talley moved to amend her complaint to add additional plaintiffs.
The district court granted the defendants’ Rule 12(c) motion, explaining that
“plaintiff [] failed to respond substantively to whether defendants [were] . . . entitled to
qualified immunity” and thus waived any arguments she could have otherwise made. J.A.
466. It further held that “even assuming, without deciding, that the lack of pre-deprivation
process prior to a reduction in plaintiff’s retirement benefit amounts to a violation of her
procedural due process right, it is not apparent that such a right was clearly established,
and thus defendants are entitled to qualified immunity.” J.A. 468.
The district court also denied Talley’s motion to amend her complaint. It did so
because: (1) Talley moved to amend her complaint nearly four months after the “deadline
to amend pleadings and join parties” contained in the scheduling order; (2) the motion itself
was procedurally deficient because it did not include the required proposed amended
7 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 8 of 24
pleading and failed to indicate how the amended pleading differed from the original as
required by local rule; and (3) Talley had not shown the requisite good cause for modifying
the scheduling order under Federal Rule of Civil Procedure 16(b)(4) to add potential
plaintiffs, at least some of which she knew of prior to the expiration of the deadline. J.A.
468–71. The district court also noted that, even if good cause to modify the scheduling
order existed, “the proposed new plaintiffs do not allege deprivation of the same property
interest,” and the benefits complained about by the proposed plaintiffs were “not alleged
to be managed by the individual defendants who are . . . members of the TSERS Board.”
J.A. 470–71.
Talley now appeals: (1) the district court’s order granting the individual defendants’
Rule 12(c) motion for judgment on the pleadings as to her individual capacity procedural
due process claim; (2) the district court’s order granting the defendants’ Rule 12(b) motion
to dismiss as to her official capacity procedural due process claim, her substantive due
process claim and her equal protection claim; and (3) the district court’s denial of her
motion to amend her complaint. 3
II.
Talley argues that the district court erred in dismissing her claims. We address each
claim in turn before reviewing the district court’s denial of Talley’s motion to amend.
3 We review the district court’s grant of both the defendants’ motion to dismiss and their motion for judgment on the pleadings de novo. See Mayfield v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 674 F.3d 369, 375 (4th Cir. 2012).
8 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 9 of 24
A. Procedural Due Process – Official Capacity
Talley first appeals the district court’s dismissal of her official capacity procedural
due process claims. She argues that the board members violated her procedural due process
rights by recouping the overpaid benefits without providing sufficient process. And she
specifically complains that she was not afforded a hearing before the defendants began
reducing her benefit checks.
But under the Eleventh Amendment, “[t]he Judicial power of the United States shall
not be construed to extend to any suit in law or equity, commenced or prosecuted against
one of the United States by Citizens of another State, or by Citizens or subjects of any
Foreign State.” U.S. Const. amend. XI. “This immunity has been judicially interpreted to
run as well to actions by a state’s own citizens” including those brought “against state
agents or officials that are in fact actions against the state as the real party in interest.”
Indust. Servs. Grp., Inc. v. Dobson, 68 F.4th 155, 163 (4th Cir. 2023) (cleaned up).
However, the Supreme Court has crafted an exception to this immunity “for suits brought
against state officials . . . acting in violation of the Constitution . . . .” Id. (citing Ex parte
Young, 209 U.S. 123, 160 (1908)). Under the Ex parte Young exception, private citizens
may “petition a federal court to enjoin State officials in their official capacities from
engaging in future conduct that would violate the Constitution or a federal statute.” Id.
(internal quotation mark omitted) (quoting Antrican v. Odom, 290 F.3d 178, 184 (4th Cir.
2002)). To successfully bring a claim against a state official in their official capacity for a
violation of the Constitution, plaintiffs must “allege an ongoing violation of federal law
and seek relief properly characterized as prospective.” Verizon Md., Inc. v. Pub. Serv.
9 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 10 of 24
Comm’n, 535 U.S. 635, 645 (2002) (cleaned up). Talley argues her official capacity
procedural due process claims fall within this Ex parte Young exception to Eleventh
Amendment immunity.
Talley’s arguments have several problems. For starters, as conceded at oral
argument, her primary complaint is TSERS’ failure to provide her with sufficient process—
mostly a hearing—prior to reducing her benefits checks to recoup the overpayment. That
alleged failure occurred before she filed her complaint. Thus, it is not ongoing conduct as
required by Ex parte Young.
Talley responds that even if the failure to provide sufficient process before the
offsets began took place in the past, the continued recoupment from each of her monthly
pension payments is a “consequence” of the earlier failure to provide pre-deprivation
process that is itself an ongoing constitutional violation. And to be sure, “presently
experienced harmful consequences of past conduct” can be “ongoing violations of federally
protected constitutional rights.” Republic of Paraguay v. Allen, 134 F.3d 622, 628 (4th Cir.
1998) (collecting cases). For example, an injunction can be issued to stop the ongoing,
unequal underfunding of a school district even though the initial funding decision was
made in the past. Papasan v. Allain, 478 U.S. 265, 282 (1986). An injunction mandating a
remedial education plan is permissible to address the ongoing effects of a past policy of
racial segregation. Milliken v. Bradley, 433 U.S. 267, 288–90 (1977). An injunction can
require that a state employee terminated without due process be re-hired because, although
the termination took place in the past, he experienced a “continuing violation” of his
property rights until he was re-hired. Coakley v. Welch, 877 F.2d 304, 306–07 (4th Cir.
10 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 11 of 24
1989). And an injunction enjoining the collection of taxes is permissible even though the
illegal assessment took place in the past because future collection based on the past
assessment would violate federal law. CSX Transp., Inc. v. Bd. of Pub. Works of State of W.
Va., 138 F.3d 537, 539, 542–43 (4th Cir. 1998).
Talley’s claims are not like any of these cases. As explained in Republic of
Paraguay, for a violation to be ongoing, the officials being sued must be “in violation of
federal law at the precise moment when the case was filed.” 134 F.3d at 628. Here, the
defendants were not in violation of federal law by the time Talley filed her complaint, if
they ever were. That’s because by that time, the defendants provided the ALJ hearing at
which she was able to oppose the recoupment. See Tri-Cnty. Paving, Inc., v. Ashe Cnty.,
281 F.3d 430, 436 (4th Cir. 2002) (quoting Fields v. Durham, 909 F.2d 94, 97 (4th Cir.
1990)) (stating that “courts must consult the entire panoply of predeprivation and
postdeprivation process provided by the state” to “determine whether a procedural due
process violation has occurred”). The ALJ hearing did not end in the result that Talley
hoped it would. But her dissatisfaction with the outcome of that hearing does not make the
hearing deficient, nor does she really argue that it was.
Talley’s only real complaint about the ALJ hearing was her inability to raise
constitutional issues at the hearing. True, the ALJ noted that “[a]n Administrative Law
Judge follows the constitutional rulings of the Judicial Branch but does not make them” in
response to Talley’s “constitutional argument that she obtained a vested right to retain the
overpaid benefits.” J.A. 65. But the ALJ also informed Talley in its final decision that she
had a right to appeal that decision to the superior court of the county where she resided.
11 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 12 of 24
She declined to do so. Her decision not to avail herself of the appeals process—through
which she could have made her constitutional arguments in state court—does not render
the process she received constitutionally deficient. Thus, any recoupment now being
pursued by defendants is not an ongoing consequence of an inadequate process.
For all of these reasons, Talley’s official capacity procedural due process claims are
barred, and we affirm the district court’s dismissal of them.
B. Procedural Due Process – Individual Capacity
Talley also argues that the district court erred in holding that qualified immunity
applies to her procedural due process claims against the defendants in their individual
capacities. She argues that the “presumptively valid” North Carolina statutes under which
the board members acted when recouping the overpayments did not “require[] deprivation
of property without constitutionally mandated due process.” Op. Br. at 17. And Talley
contends that prior caselaw has held that “the taking of property by the government requires
pre-deprivation due process.” Op. Br. at 20.
To begin, Talley fails to address the district court’s statements that she did not make
substantive arguments on qualified immunity below. Thus, she likely waived her arguments
on this point. See Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 603
(4th Cir. 2004) (stating that “absent exceptional circumstances, we do not consider issues
raised for the first time on appeal”).
However, even if Talley did not waive them, her arguments would fail. “Qualified
immunity shields government officials from civil damages liability unless the official
violated a statutory or constitutional right that was clearly established at the time of the
12 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 13 of 24
challenged conduct.” Reichle v. Howards, 566 U.S. 658, 664 (2012). And “[i]n reviewing
a district court’s denial of qualified immunity, we conduct a two-pronged analysis,” asking
first “whether the plaintiff has established that a constitutional violation occurred” and
second “whether the right at issue was ‘clearly established’ at the time of the events in
question.” Rambert v. City of Greenville, 107 F.4th 388, 398 (4th Cir. 2024) (quoting
Stanton v. Elliott, 25 F.4th 227, 233 (4th Cir. 2022)). Courts have discretion over the order
in which to address these two prongs. See id.; see also Pearson v. Callahan, 555 U.S. 223,
236 (2009) (“The judges of the district courts and the courts of appeals should be permitted
to exercise their sound discretion in deciding which of the two prongs of the qualified
immunity analysis should be addressed first in light of the circumstances in the particular
case at hand.”). And here, like the district court below, we address prong two first.
“A Government official’s conduct violates clearly established law when, at the time
of the challenged conduct, the contours of a right are sufficiently clear that every reasonable
official would have understood that what he is doing violates that right.” Ashcroft v. al-
Kidd, 563 U.S. 731, 741 (2011) (cleaned up). Ultimately, qualified immunity protects “all
but the plainly incompetent or those who knowingly violate the law.” White v. Pauly, 580
U.S. 73, 79 (2017). Thus, “‘clearly established law’ should not be defined ‘at a high level
of generality.’” Id. (quoting Ashcroft, 563 U.S. at 742). Instead, it “must be ‘particularized’
to the facts of the case.” Id. (quoting Anderson v. Creighton, 483 U.S. 635, 640 (1987)).
“Otherwise, plaintiffs would be able to convert the rule of qualified immunity . . . into a
rule of virtually unqualified liability simply by alleging violation of extremely abstract
rights.” Id. (cleaned up).
13 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 14 of 24
Talley’s arguments run headlong into two problems. First, as the district court below
observed, “[r]arely will a state official who simply enforces a presumptively valid state
statute thereby lose her immunity from suit.” Swanson v. Powers, 937 F.2d 965, 969 (4th
Cir. 1991). And North Carolina General Statute § 135-9(b) provides that “any overpayment
of benefits or erroneous payments to a member in a State-administered retirement
system . . . who is later determined to have been ineligible for those benefits or untitled to
those amounts, may be offset against any retirement allowance . . . .” North Carolina law
also requires the state to pursue the recoupment of state funds; the state cannot simply
forgive the repayment of overpaid funds. See N.C. Gen. Stat. § 143-64.80.
Talley claims that these statutes do not immunize the defendants because § 143-
64.80(b) says that overpaid benefits may be recouped “by all lawful means available.”
According to Talley, “by all lawful means available” requires the pre-deprivation hearing
she claims she did not receive. She even suggests that § 143-64.80 requires “the filing of a
civil action in the General Court of Justice” to recoup overpayments. § 143-64.80(b). She
is incorrect on both counts. Section 135-9(b) permits recoupment via an offset against a
retirement allowance—making that a “lawful means” available to the defendants. Also,
§ 143-64.80 says that “all lawful means available” includes, but is not limited to, filing a
civil action to recover the money. Thus, filing a civil action is not required. As Talley
concedes, these statutes are presumptively valid. They do not on their face mandate that a
pre-deprivation hearing be provided, nor do they say that recoupment cannot be sought in
the manner that the officials used here. What’s more, we are aware of no court that has held
North Carolina’s recoupment statutes are unlawful or unconstitutional. Accordingly, as in
14 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 15 of 24
Swanson, no “extraordinary circumstances” exist that should compel us to abandon the
ordinary rule that “[u]ntil judges say otherwise, state officers . . . have the power to carry
forward the directives of the state legislature.” Swanson, 937 F.2d at 969 (quoting Lemon
v. Kurtzman, 411 U.S. 192, 208 (1973)).
Second, existing caselaw does not “place[] the . . . constitutional question [here]
beyond debate.” Adams v. Ferguson, 884 F.3d 219, 226–27 (4th Cir. 2018) (internal
quotation mark omitted) (quoting Reichle, 566 U.S. at 664). Talley’s argument that the law
clearly establishes the requirement of pre-deprivation due process before the government
can take property is too broad. Precedent from the Supreme Court and our court requires
that we look more granularly to see whether the law clearly mandates a hearing before the
government recoups overpaid retirement benefits. See White, 580 U.S. at 79; see also
Ashcroft, 563 U.S. at 742; Anderson, 483 U.S. at 640; Adams, 884 F.3d at 227–28. Here,
the law does not. In fact, we have found no court addressing these factual circumstances.
It is true that the Supreme Court has held that a pre-deprivation hearing is owed
when the individual being deprived of need-based benefits is “on the very margin of
subsistence” and when the risk of error surrounding the deprivation is significant. Mathews
v. Eldridge, 424 U.S. 319, 340, 344 (1976) (citing Goldberg v. Kelly, 397 U.S. 254, 264
(1970)). But the Supreme Court has affirmed repeatedly, in opinions to which Talley herself
cites, that “due process, unlike some legal rules, is not a technical conception with a fixed
content unrelated to time, place and circumstances.” Id. at 334 (quoting Cafeteria Workers
v. McElroy, 367 U.S. 886, 895 (1961)); see also Parratt v. Taylor, 451 U.S. 527, 540–43
(1981) (overruled in part by Daniels v. Williams, 474 U.S. 327 (1986)); Goldberg, 397 U.S.
15 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 16 of 24
at 263–64. Rather, it is “flexible and calls for such procedural protections as the particular
situation demands.” Mathews, 424 U.S. at 334 (internal quotation mark omitted) (quoting
Morrissey v. Brewer, 408 U.S. 471, 481 (1972)). And we know this to be true because
Mathews and its progeny tell us that even individuals who face total deprivations of non-
need-based benefits prior to a hearing may have received constitutionally sufficient
process. 424 U.S. at 343 (holding that, in a case involving a recipient of social security,
“there is less reason [] than in Goldberg to depart from the ordinary principle, established
by our decisions, that something less than an evidentiary hearing is sufficient prior to
adverse administrative action”). Mathews went on to explain that “[t]he judicial model of
an evidentiary hearing is neither a required, nor even the most effective, method of
decisionmaking in all circumstances.” Id. at 348.
Further, Talley’s claims are different from those in Mathews. The benefits offset here
to recoup overpayments were not need-based. Nor did Talley face a total deprivation of her
benefits, as the Goldberg and Mathews plaintiffs did. Nor is there any evidence of a great
risk of error in calculating the amount to be offset. Indeed, Talley does not claim any error
in the offset amount; she just says she should have had a hearing before the offsets began.
Thus, when we analyze the right in question here at the appropriate level of specificity, it
becomes apparent that the “contours of [the] right” Talley asserts are not clearly
16 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 17 of 24
established. Ashcroft, 563 U.S. at 741. Thus, we affirm the district court’s dismissal of
Talley’s procedural due process claim. 4
C. Substantive Due Process
As with her other claims, Talley argues that the district court wrongly dismissed her
substantive due process claim. She contends that she has sufficiently alleged that the
officials’ actions were “so arbitrary and capricious as to shock the conscience.” Op. Br. at
27. Specifically, she says that the board members “had no written process for recoupment;”
“unilaterally and without reference to any written rules or policies” commenced
recoupment; and could take as little as 10% or as much as 100% of her pension amount “at
their option.” Op. Br. at 26–27.
To succeed on a substantive due process claim, a plaintiff must demonstrate “(1)
that he had property or a property interest; (2) that the state deprived him of this property
or property interest; and (3) that the state’s action falls so far beyond the outer limits of
legitimate governmental action that no process could cure the deficiency.” Quinn v. Bd. of
Cnty. Comm’rs for Queen Anne’s Cnty., Md., 862 F.3d 433, 443 (4th Cir. 2017) (emphasis
in original) (cleaned up). Talley does not come close to alleging facts that meet this
standard.
The bar to successfully state a substantive due process claim is high. Substantive
due process is a “narrow” protection that “covers only state action which is ‘so arbitrary
4 Since the right Talley asserts to have been violated is not clearly established, we need not address Talley’s allegation that the lack of pre-deprivation process violated her procedural due process right. 17 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 18 of 24
and irrational, so unjustified by any circumstance or governmental interest, as to be literally
incapable of avoidance by any pre-deprivation procedural protections or of adequate
rectification by any post-deprivation state remedies.’” Sylvia Dev. Corp. v. Calvert Cnty,
Md., 48 F.3d 810, 827 (4th Cir. 1995) (quoting Rucker v. Hartford Cnty, 946 F.2d 278, 281
(4th Cir. 1991)). Where, as here, the alleged deprivation “is amenable to ‘rectification by .
. . post-deprivation state remedies,’” the officials’ actions are “hardly arbitrary.” Mora v.
City of Gaithersburg, 519 F.3d 216, 231 (4th Cir. 2008) (quoting Rucker, 946 F.2d at 281).
Talley does not engage at all with the fact that she received both pre-deprivation internal
review and a post-deprivation hearing before an ALJ at which she was able to contest the
fact and amount of the recoupment. But it is undisputed that she received both. Further,
Talley does not allege or argue that the deprivation she complains about—recoupment of
overpaid benefits—could not be rectified via the post-deprivation hearing.
Instead, Talley makes two primary arguments. First, she complains that the officials’
decision to withhold only 10% instead of 50% of each monthly benefit check indicates
overbroad discretion. But a substantive due process claim requires government action that
is so illegitimate that no process could cure it. Talley does not allege facts that show the
officials’ recoupment efforts—even assuming they were initially as arbitrary as she
alleges—could not be, and were not, rectified or cured by the ALJ hearing she received.
Besides, any flexibility in the recoupment system inured to Talley’s advantage. At first, her
benefit checks were reduced by 50%. Later, they were reduced by only 10%.
Second, Talley contends that “the manner in which the United States and several of
the individual States address overpayments” shows that the defendants’ actions were
18 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 19 of 24
arbitrary and violated her substantive due process rights. Op. Br. at 33. But again, what
other states do is not the appropriate test. Rather, our inquiry is whether Talley plausibly
alleges that the defendants took actions so arbitrary and irrational that even post-
deprivation remedies cannot cure them. See Sylvia Dev. Corp., 48 F.3d at 827. As explained
above, she has not made that argument.
We see no error in the district court’s holding that Talley has failed to state a
substantive due process claim.
D. Equal Protection
Finally, Talley argues that the district court erred in dismissing her equal protection
claim for two reasons. First, she contends that she “has a fundamental right to the full
amount of her pension.” Op. Br. at 52. Second, she insists that there was no rational basis
for beginning recoupment efforts using arbitrary percentages without set standards or rules
governing the process.
Equal protection requires a plaintiff to allege that he or she “has been treated
differently from others who are similarly situated” in light of “the appropriate level of
constitutional scrutiny.” Doe v. Settle, 24 F.4th 932, 939 (4th Cir. 2022). And that different
treatment must be worse than the similarly situated comparative group. See Fauconier v.
Clarke, 966 F.3d 265, 277 (4th Cir. 2020) (quoting Martin v. Duffy, 858 F.3d 239, 252 (4th
Cir. 2017)) (stating that a plaintiff bringing an equal protection claim must allege “that
[s]he has been treated differently from others . . . and that the unequal treatment was the
result of intentional or purposeful discrimination” (emphasis added)). As an initial matter,
Talley did not allege facts showing that she was treated worse off than anyone else. In fact,
19 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 20 of 24
her allegation that the defendants treated those who hired attorneys to challenge
recoupment efforts or pushed back on the state’s efforts differently from those who did not,
even if true, meant she was treated better than others, not worse. Next, the district court
correctly held that Talley had not alleged facts that required application of heightened
scrutiny. She did not allege that she belongs to a suspect class. Nor has she explained,
through argument or cited authority, how the right to one’s pension benefits is a
fundamental right. 5 In fact, the few cases that have touched on the question of whether
individuals have a fundamental right to government benefits—including retirement
benefits—suggest that they do not. See Thompson v. Walker, 758 F.2d 1004, 1009 (4th Cir.
1985) (holding that a limitation on judges’ ability to receive retirement benefits if they
practiced law in the Commonwealth of Virginia did not violate equal protection partly
because no fundamental right was being interfered with); see also Dandridge v. Williams,
397 U.S. 471, 484 (1970) (stating that a challenge to Maryland’s welfare system did not
“affect[] freedoms guaranteed by the Bill of Rights . . .”).
Thus, to the extent Talley has even alleged different treatment, the district court
correctly held that rational basis review applies here. So, we are left to address Talley’s
5 Fundamental rights include the right to privacy, the right to vote, the right of interstate travel, certain first amendment rights, and the right to procreate. See Mass. Bd. of Ret. v. Murgia, 427 U.S. 307, 312 n.3 (1976). Any such right must be “deeply rooted in this Nation’s history and tradition.” Dobbs v. Jackson Women’s Health Org., 597 U.S. 215, 231 (2022) (quoting Washington v. Glucksberg, 521 U.S. 702, 721 (1997)); see also San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 33 (1973) (stating that fundamental rights are those “explicitly or implicitly guaranteed by the Constitution”). And Talley makes no real argument that the right to one’s pension benefit is deeply rooted in our Nation’s history or tradition. 20 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 21 of 24
argument that defendants “have no rational basis for distinguishing between various
overpaid beneficiaries and determining . . . how much, when, and by what method
recoupment will occur.” Op. Br. at 55.
Rational basis review requires the individual challenging a law to “negate[] every
conceivable basis which might support the legislation.” Settle, 24 F.4th at 944 (quoting
Giarratano v. Johnson, 521 F.3d 298, 303 (4th Cir. 2008)). In other words, to prevail under
rational basis review, Talley must allege facts that show there is no “rational relationship
between the disparity of treatment” alleged and “some legitimate governmental purpose.”
Id. at 943 (quoting Heller v. Doe, 509 U.S. 312, 320–21 (1993)) (holding that there is no
“place in rational-basis review to question the wisdom or logic of a state’s legislation” and
that “rough line-drawing, even ‘illogical’ or ‘unscientific’ line drawing, is often necessary
to governing”).
Importantly, much of Talley’s briefing misapprehends the burden of proof under
rational basis review. “Under rational basis review . . . those attacking the rationality of the
rule have the burden to negative every conceivable basis which might support it.” Nat’l
Ass’n for the Advancement of Multijurisdiction Prac. v. Lynch, 826 F.3d 191, 196 (4th Cir.
2016) (cleaned up). Thus, to the extent that Talley suggests the defendants must themselves
provide a “plausible reason” for their decision to recoup overpaid benefits in different
percentages and using different “means and methods,” she is incorrect. Op. Br. at 56.
And Talley otherwise fails to explain why the defendants have no rational basis for
distinguishing between overpaid individuals and seeking recoupment in varying amounts.
As the district court noted, the defendants had a legitimate interest in recouping overpaid
21 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 22 of 24
retirement benefits. Thus, the only question is whether the defendants’ process for
recouping overpayments by reducing benefit checks in varying amounts is rationally
related to that interest. The only counterargument Talley makes is that the defendants
pursued recoupment in a way that was discretionary and resulted in different treatment for
different people. But the defendants argue that responding to different individuals
differently depending upon their requests or the requests of their attorneys merely “shows
appropriate flexibility and passes rational-basis scrutiny.” Resp. Br. at 45. In the absence
of any meaningful arguments to the contrary from Talley, and in light of the high bar set by
the many opinions applying rational-basis review, we find no error in the district court’s
holding. The defendants surely have a legitimate governmental purpose here—recouping
overpaid pension benefits. And treating Talley “differently” from other individuals by
evaluating her particular circumstances and requests and accordingly lowering her
recoupment percentage from 50% to 10% bears a rational relationship to that legitimate
purpose. The state is ensuring recoupment of those overpaid benefits while being flexible
in light of individuals’ varying circumstances, which satisfies the rational basis test. As a
result, we affirm the district court’s conclusion that Talley has not alleged an equal
protection violation.
E. Talley’s Motion for Leave to Amend
Talley also challenges the district court’s denial of her motion for leave to amend
her complaint, arguing that she was late in seeking to add the new plaintiffs because of
discovery failures on the part of defendants.
22 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 23 of 24
In her motion for leave to amend, Talley sought to add four plaintiffs to the lawsuit,
each of whom she contends has been denied due process by the state’s recoupment
procedures. The district court denied Talley’s motion because Talley filed it four months
after the deadline in the scheduling order for amending pleadings had passed and did not
file a motion to amend the scheduling order until after she filed her motion to amend her
complaint. The district court also held that Talley did all of this without showing good
cause to modify the scheduling order as required by Federal Rule of Civil Procedure 16(b).
In reaching this conclusion, it explained that Talley knew “well-before the expiration of the
deadline to seek to amend pleadings” of “at least two of the plaintiffs she presumably now
seeks to add to her complaint,” based on an email sent by plaintiff’s counsel. J.A. 470.
We review the court’s denial of her motion for leave to amend her complaint for
abuse of discretion. See Drager v. PLIVA USA, Inc., 741 F.3d 470, 474 (4th Cir. 2014). On
appeal, Talley does not contradict the district court’s finding that she knew about at least
two of these plaintiffs before the deadline passed—she simply argues that her approach of
seeking to add all plaintiffs at once is “more efficient.” Op. Br. at 58. But that is not the
point. The district court entered a scheduling order, which it is allowed to enforce. Talley
has offered no argument that the district court abused its discretion in holding that no good
cause existed to warrant modifying the scheduling order, and we find none. 6
6 The district court also held that Talley’s motion was (1) procedurally deficient due to her failure to attach both a proposed amended pleading and a document showing how the amended pleading differed from the original in accordance with local rules and (2) failed to satisfy Federal Rule of Civil Procedure 20’s limitations on joinder of parties. Because we affirm on the basis of the court’s Rule 16(b) holding, we do not address whether
23 USCA4 Appeal: 24-1215 Doc: 47 Filed: 04/04/2025 Pg: 24 of 24
III.
To sum up our ruling, Talley received an unexpected windfall when she began
receiving inflated monthly benefit checks. Having enjoyed the $86,173.93 of extra cash
she received over eight years, she naturally did not want North Carolina to recoup it. But
the state had a statutory obligation to do so. And recouping its overpayment under North
Carolina law did not violate Talley’s constitutional rights. Talley’s procedural due process
claim against the defendants in their official capacities is barred by Eleventh Amendment
immunity; her procedural due process claim against the defendants in their individual
capacities is barred by qualified immunity; she has failed to state a substantive due process
claim; and she has similarly failed to state an equal protection claim. Lastly, the district
court did not abuse its discretion in denying Talley’s motion for leave to amend her
complaint. Accordingly, the district court’s judgment is,
AFFIRMED.
Talley’s pleading was procedurally deficient or whether it runs afoul of Rule 20’s joinder requirements. 24