William G. Coggins, Jr., ALJ Ruling 2020-16 (HHS CRD Sept. 4, 2020)

RULING DENYING MOTION TO VACATE THE JULY 31, 2020 ORDER OF DISMISSAL

I.        Background

On March 7, 2020, Respondent, William G. Coggins, Jr., filed a request for hearing to challenge the Social Security Administration (SSA) Inspector General’s (IG’s) proposed civil monetary penalty (CMP) of $223,024, which included a penalty of $161,784 and an assessment of $61,240.  DAB E-File Docket Entry 5 (herein “Notice of Proposed CMP”).  The IG charged that the facts underlying the IG’s proposal of a CMP included that Respondent had wrongfully received $134,820 in SSA disability insurance benefits based on his “false statements, misrepresentations, and/or omissions of material fact to the SSA.”  Notice of Proposed CMP at 1.  The IG further charged that Respondent had wrongfully received $61,240 in disability insurance benefits during the six-year limitations period.  Notice of Proposed CMP at 2; see 42 U.S.C. § 1320a-8(b)(1).

The Civil Remedies Division (CRD) issued my standing pre-hearing order (Pre-Hearing Order) on March 20, 2020.  In section 2 of the Pre-Hearing Order, I informed Respondent that he had the right to be represented by an attorney in this matter, but that I cannot appoint an attorney to represent him.  In section 15 of the Pre-Hearing Order, I explained

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that I would dismiss the case pursuant to 20 C.F.R. § 498.202(f)(2) if the parties settled and notified me that they no longer wished to proceed with this case.

I convened a pre-hearing conference on April 8, 2020.  Thereafter, I issued an order summarizing the pre-hearing conference in which I again informed the parties that I would dismiss this case if the parties notified me that they had settled and no longer wished to proceed with this case.

On July 9, 2020, the IG filed a joint motion seeking an extension of the then-pending deadlines, at which time the parties explained that they were “actively pursuing resolution via a settlement agreement and are making progress toward resolving this matter without the necessity for further litigation.”  I granted this motion the same day.  On July 30, 2020, the IG filed a joint motion to dismiss the request for hearing in which the parties reported that they had “executed a Settlement Agreement thereby resolving the pending matter.”  The joint motion to dismiss further stated that “pursuant to 20 C.F.R. § 498.202(f)(2), the SSA-OIG and [Respondent] respectfully request the Court issue an Order dismissing this case with prejudice.”  I issued an order dismissing the case (“Dismissal Order”) on July 31, 2020, in which I explained that the parties had filed a joint motion to dismiss Respondent’s request for hearing and that I had granted the motion and ordered dismissal of the case.

Respondent filed a motion to vacate the Dismissal Order on August 17, 2020, explaining that he thought that the $20,000 CMP stipulated in the settlement agreement “was the only debt that was to be paid back” and that he was surprised to learn that he continued to be liable for an overpayment of the SSA disability insurance benefits he had received.  Respondent argued that his liability for repayment of the SSA disability insurance benefits resulted from “surprising,” “misleading,” and “faulty” conduct by the IG.  Respondent argued that Rule 60 of the Federal Rules of Civil Procedure provided “grounds to re-open the case due to the mistakes, surprise and irregularity.”1  Respondent filed a copy of an undated settlement agreement that had not been executed by either party.2

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I directed the IG to file a response, which the IG filed on August 27, 2020.  In support, the IG filed, inter alia, a copy of a settlement agreement that the parties had executed on July 29, 2020.  IG Ex. D.  The opening sentence explained that the parties had settled the IG’s claim against Respondent for violations of Section 1129 of the Social Security Act, 42 U.S.C. § 1320a-8.  IG Ex. D at 1.  The parties agreed that Section 1129 of the Social Security Act authorized both the imposition of CMPs “for each false or misleading statement or representation of a material fact made for use” in connection with SSA benefits and the imposition of an assessment in lieu of twice the amount of benefits paid “because of the aforementioned false or misleading statements and/or representation, or withholding disclosure of a material fact.”  IG Ex. D at 1.  The settlement agreement memorialized that Respondent agreed to pay a total CMP of $20,000 and that there would be no assessment in lieu of damages.  IG Ex. D at 1.  In section 9, the parties further agreed to the following:

This agreement in no way relieves [Respondent] of any responsibility he may have to repay overpayments of Title II and/or Title XVI Social Security benefits and/or payments as determined by the SSA, including overpayments that originated prior to the signing of this Agreement.  This Agreement in no way limits the SSA in its determination as to the appropriate manner in which to recover any such overpayments.

[Respondent] reserves all objections, defenses, claims, appeals, and rights of any kind with respect to an alleged overpayment, and this Agreement in no way precludes [Respondent] of availing himself of any available administrative processes to challenge such an overpayment determination by the SSA.

IG Ex. D at 3.  The parties agreed that the settlement agreement “is final and binding when signed by [Respondent] and the below-named SSA-OIG representative.”  IG Ex. D at 3.  Respondent acknowledged “all of the language contained in this Agreement is accurate and satisfactory to him.”  IG Ex. D at 1 (emphasis omitted).  Respondent also acknowledged that he entered into the agreement “knowingly and voluntarily and was given reasonable time to consult with an attorney.”  IG Ex. D at 3.

Respondent, through his spouse, submitted a reply, arguing that although the IG had argued Respondent had “intentionally misrepresented his level of functioning,” he is illiterate and has a “documented IQ of 68.”3  Respondent also alleged that he had been

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adversely affected by a lack of legal representation, and he criticized the individuals who purportedly initiated the IG’s investigation.  Respondent further argued that he maintained a license and drove a dump truck because his 92-year old father was unable “to continue to drive safely,” and therefore, SSA should not have terminated his disability insurance benefits.

II.       Discussion

These proceedings are governed by 20 C.F.R. Part 498 (Civil Monetary Penalties, Assessments, and Recommended Exclusions).  Part 498 does not provide for the reopening of an order dismissing a request for hearing.  See 20 C.F.R. §§ 498.202(f)(2) (“The ALJ shall dismiss a hearing request where . . . [t]he respondent withdraws or abandons respondent’s request for a hearing.”); 498.126 (“The Inspector General has exclusive authority to settle any issues or case, without the consent of the [ALJ] or the Commissioner, at any time prior to a final determination.”). 

Although the regulations do not expressly authorize an ALJ to reopen a dismissed case, the Departmental Appeals Board (DAB) has acknowledged that “[g]enerally, a decision‑maker has inherent authority to reopen and reconsider a decision even in the absence of express authorization in its procedures” in order to ensure “fair process and sound decisions.”  Henry L. Gupton, DAB Ruling No. 2007-2 at 2 (2007).  The DAB discussed that such reopening and reconsideration may be appropriate when a party “promptly alleges a clear error of fact or law.”  Gupton, DAB Ruling No. 2007-2 at 3.  The DAB has explained that “[r]eopening a decision is not a routine step in the administrative appeal process but, rather, an opportunity for the parties to identify ‘any errors that make the decision clearly wrong.’”  Howard M. Sokoloff, DPM, MS, Inc., DAB Ruling 2020-2 at 1-2 (2019).  The DAB has explained that, in requesting the reopening of a DAB decision, “the central inquiry is whether the party requesting reopening has articulated a clear error of fact or law in the . . . decision.”  Id. at 2.

Respondent has not alleged any error of fact or law in the July 31, 2020 Dismissal Order.  Respondent entered into a settlement agreement with the IG, as contemplated by 20 C.F.R. § 498.126.  Thereafter, Respondent withdrew his request for hearing.  See IG Ex. D at 2 (“[Respondent] agrees not to contest the amount due under this Agreement, and waives all procedural rights granted under applicable law and regulation, including but not limited to 42 U.S.C. § 1320a-8 and 20 C.F.R. Part 498.”).  As required by 20 C.F.R. § 498.202(f)(2), I dismissed the case based on Respondent’s withdrawal of his request for hearing.

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Respondent argues in his motion to vacate that he thought that the terms of the settlement required that he owed a penalty of $20,000 and “nothing more.”  However, the settlement agreement is quite clear in its breadth and scope, as evidenced by its opening with the following statement:  “This Settlement Agreement . . . settles a claim against [Respondent] for violations of Section 1129 of the Social Security Act.”  IG Ex. D at 1 (emphasis omitted).  Further, not only did the settlement agreement clearly define the scope of Section 1129 (page 1, discussing Section 1129’s authorization of a CMP and an assessment), but it also explained, on page 3, that the Agreement “in no way relieves [Respondent] of any responsibility he may have to repay overpayments of Title II and/or Title XVI Social Security benefits and/or payments as determined by SSA, including overpayments that originated prior to the signing of this Agreement.”  IG Ex. D at 3.  The settlement agreement is detailed and unambiguous, and there is no doubt that its plain terms informed Respondent that he was settling the IG’s action with respect to a CMP and assessment relating to his allegedly “false or misleading statement or representation of a material fact made for use in determining an initial or continuing right” or “withholding disclosure of a material fact” in connection with his SSA benefits.  IG Ex. D at 1.  Likewise, the settlement agreement clearly informed Respondent that he may be liable for an overpayment resulting from his improper receipt of SSA benefits and that he would be afforded an opportunity to challenge any overpayment determination.  IG Ex. D at 3.

Respondent does not allege any error of fact or law, but rather, simply appears to regret his decision to enter into a settlement agreement that resolved only the IG-proposed CMP and assessment pursuant to Section 1129 of the Social Security Act.  However, such regret does not constitute an allegation of an error of fact or law in the Dismissal Order.  Further, and although not dispositive of the issue presented herein, I see nothing “surprising,” “misleading,” or “faulty” in the terms of the settlement agreement or the IG’s conduct in offering and executing the settlement agreement; Respondent requested a hearing to challenge the proposed CMP and assessment, and the settlement agreement resolved the issues that were the subject of the IG’s proposed action.  See IG Ex. D; Notice of Proposed CMP.  Therefore, Respondent has not demonstrated the existence of any error in fact or law in the dismissal of his case.

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For the foregoing reasons, I deny Respondent’s motion to vacate the Dismissal Order.