Eliam v FSM Social Security Administration [2018] FMSC 1; 21 FSM R. 412 (App. 2018) (29 January 2018)

FSM SUPREME COURT APPELLATE DIVISION

APPEAL CASE NO. P14-2016
(Civil Action No. 2013-009)

REIEL ELIAM, a minor, through her next of )
kin, ELIANSY ELIAM, )
)
Appellant, )
)
vs. )
)
FEDERATED STATES OF MICRONESIA )
SOCIAL SECURITY ADMINISTRATION, )
)
Appellee. )
__________________________________________ )

OPINION

Argued: August 9, 2017
Decided: January 29, 2018

BEFORE:

Hon. Dennis K. Yamase, Chief Justice, FSM Supreme Court
Hon. Larry Wentworth, Associate Justice, FSM Supreme Court
Hon. Chang B. William, Specially Assigned Justice, FSM Supreme Court*

*Chief Justice, Kosrae State Court, Lelu, Kosrae

APPEARANCES:

For the Appellant: Salomon M. Saimon, Esq.
Micronesia Legal Services Corporation
P.O. Box 129
Kolonia, Pohnpei FM 96941

For the Appellee: Stephen V. Finnen, Esq.
P.O. Box 1450
Kolonia, Pohnpei FM 96941

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HEADNOTES

Administrative Law Administrative Procedures Act; Social Security
Since the Administrative Procedures Act applies to all agency action unless Congress by law provides otherwise, it applies to the Social Security Administration because no part of the Social Security Act provides otherwise. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 415 (App. 2018).

Administrative Law Judicial Review; Social Security

Statutory authority for judicial review of a Social Security Board decision provides that the Board’s findings as to the facts, if supported by competent, material and substantial evidence, are conclusive. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 415-16 (App. 2018).

Administrative Law Judicial Review; Social Security
Generally there are three possible standards of review for administrative decisions: 1) arbitrary and capricious or abuse of discretion; 2) reasonableness or substantial evidence; and 3) de novo or agreement review. Judicial review of social security law cases, because the statute expressly uses the words "reasonableness" and "substantial," uses the intermediate standard. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 416 (App. 2018).

Evidence
Substantial evidence is evidence which a reasoning mind would accept as sufficient to support a conclusion. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 416 (App. 2018).

Administrative Law Judicial Review; Administrative Law Rules and Regulations; Appellate Review Standard Civil Cases De Novo; Social Security
Since 53 F.S.M.C. 703 expressly grants Social Security rule-making power, judicial review is limited to determining whether the promulgated regulations exceed the statutory authority, which is an issue of law reviewed de novo on appeal. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 416 (App. 2018).

Administrative Law Administrative Procedures Act; Administrative Law Rules and Regulations; Social Security
53 F.S.M.C. 703 delegates to the Social Security Administration authority to promulgate regulations and provides that the Board may, pursuant to the Administrative Procedures Act, adopt, amend, or rescind regulations for the administration of the Social Security law. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 416 (App. 2018).

Administrative Law Rules and Regulations; Social Security Claims and Benefits
The statutory delegation of rule-making authority to Social Security implicitly recognizes its relative competence and expertise to ensure an efficient and equitable means to evaluate whether a claimant qualifies for benefits. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 416 (App. 2018).

Social Security; Statutes Construction
The FSM Social Security Act is patterned after United States statutes, and it is well settled rule of statutory construction that a statute adopted from another jurisdiction is presumed to have been adopted as construed by that jurisdiction’s courts. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 417 (App. 2018).

Administrative Law Rules and Regulations; Social Security Claims and Benefits
Social security regulations are entitled to great deference because Congress has given Social Security full power and authority to promulgate regulations necessary or appropriate to carry out the agency’s function and therefore Social Security regulations are not ultra vires. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 417 (App. 2018).

Domestic Relations Adoption; Social Security Claims and Benefits
A child who is dependent upon a person entitled to old age benefits or who was dependent upon an individual who died fully insured or currently insured, is entitled, upon filing an application, to a child’s insurance benefit, but actual dependency upon the adoptive parent is a prerequisite for an adopted minor to receive surviving social security benefits after the adoptive parent’s death. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 417 (App. 2018).

Social Security Claims and Benefits
Social Security’s list of "preferred evidence" is not too restrictive because "preferred" does not connote exclusive and because it allows an applicant, at the Administrator’s discretion, to adduce supplementary evidence any other documents or evidence that will prove the child’s dependency on the insured. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 419 (App. 2018).

Social Security Claims and Benefits
The list of preferred evidence set forth in the Social Security regulations streamlines the decision-making process by providing a means to efficiently and equitably evaluate dependency and makes it easier for applicants to know what evidence they need to produce for a successful application. As such, pursuant to the statutory authority to implement the social security program, the promulgated regulations are consistent with the legislature’s intent. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 419 (App. 2018).

Administrative Law Judicial Review; Domestic Relations Adoption; Social Security Claims and Benefits
When an applicant was notified that evidence of dependency was lacking and did not apply to adduce additional evidence, the Board’s findings as to the facts, if supported by competent, material and substantial evidence, are conclusive since there was no further evidence of dependency proffered. Thus, the trial court’s grant of summary judgment in Social Security’s favor was proper, since the applicant failed to adduce sufficient evidence of dependency, as required by statute. Eliam v. FSM Social Sec. Admin., 21 FSM R. 412, 419 (App. 2018).

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COURT’S OPINION

DENNIS K. YAMASE, Chief Justice:

Reiel Eliam, a minor, through her next of kin, Eliansy Eliam, appeals the FSM Supreme Court trial division June 27, 2016 order that granted summary judgment in favor of Appellee Federated States of Micronesia Social Security Administration ("the FSMSSA"). Eliam had appealed the FSMSSA Board’s confirmation of a decision to deny surviving adopted child benefits based on a failure to proffer adequate evidence of dependency. Eliam claims the trial court erred, since establishing dependency must not be limited to "preferred evidence," as set forth within the FSMSSA’s regulations. For the following reasons, we hereby affirm the trial court’s decision.

I. BACKGROUND

Reiel Eliam was born to Eliansy Eliam and Rerad Warren on July 3, 1998. It is alleged, that Reiel’s maternal grandparents, Satchou Eliam and Nelmihter Eliam, customarily adopted her at birth. The grandfather, Satchou Eliam passed away on May 2, 2003. Nelmihter Eliam applied for dependent child benefits for Reiel after her husband died. That claim was denied, as the FSMSSA required adequate evidence of a customary adoption.

On February 9, 2004, the Pohnpei Supreme Court approved a petition to confirm the customary adoption of Reiel Eliam by her maternal grandmother, Nelmihter Eliam and late husband, Satchou Eliam. At the time of this confirmation, Reiel Eliam was 6 years old and her grandmother 81 years old. Nelmihter Eliam died on April 3, 2010.The biological parents, Eliansy Eliam and Rerad Warren, were appointed legal guardians for their daughter on July 30, 2010. On September 10, 2010, the birth mother, Eliansy Eliam, applied for dependent child benefits for Reiel Eliam, claiming the minor had been dependent on her adoptive mother, the late Nelmihter Eliam. On October 29, 2010, the FSMSSA sent notice to Eliansy Eliam, that her claim for surviving adopted child benefits, on behalf of Reiel Eliam was denied for lack of evidence showing dependency.

Eliam’s attorney appealed this denial by virtue of a December 3, 2010 letter to the FSMSSA. The FSMSSA’s Board held a meeting on August 11, 2012, at which a fact-finding committee was appointed to determine the merits of this appeal and make a recommendation to the full Board. The committee then conducted a hearing on August 23, 2012, during which Eliam presented no additional evidence showing dependency. This committee then appeared before the Board on November 12, 2012 to present its finding that no evidence of dependency had been submitted.

The Board adopted the committee’s findings, which confirmed the decision to deny benefits. This determination was certified on December 18, 2012 and sent to Eliam on January 15, 2013. Eliam then filed a complaint on March 11, 2013, which appealed the FSMSSA Board’s decision, alleged due process and civil rights violations and sought declaratory and injunctive relief.

Under 17 F.S.M.C. 111(3)(b), on an appeal from an FSM administrative agency, the court, under the Administrative Procedures Act, must:

(b) hold unlawful and set aside agency actions and decisions found to be:

(i) arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law;

(ii) contrary to constitutional right, power, privilege or immunity;

(iii) in excess of statutory jurisdiction, authority or limitation or a denial of legal rights;

(iv) without substantial compliance with the procedures required by law or

(v) unwarranted by the facts.

Furthermore, "[t]hese Administrative Procedures Act provisions ’apply to all agency action unless Congress shall by law hereafter provide otherwise.’ 17 F.S.M.C. 113. It therefore applies to the Social Security Administration because no part of the Social Security Act provides otherwise." Alokoa v. FSM Social Sec. Admin., 16 FSM R. 271, 276 (Kos. 2009).

Following the trial court’s disposition of a threshold issue of jurisdiction, the FSMSSA filed a motion for summary judgment on April 15, 2015. A hearing on the motion for summary judgment was held on July 22, 2015. The trial court entered an order on June 27, 2016, granting summary judgment in the FSMSSA’s favor. The court below concluded that there had been a lack of evidence proffered by Eliam to demonstrate dependency and therefore no abuse of discretion by the FSMSSA in denying benefits. On August 11, 2016, Eliam appealed to the FSM Supreme Court Appellate Division.

II. ISSUE ON APPEAL

Eliam contends that the FSMSSA’s regulations requiring an applicant for benefits to satisfy a list of "preferred evidence" is invalid and as a result, the trial court erred, since there was a genuine issue of material fact relative to actual dependency.

III. STANDARD OF REVIEW

Eliam submits that the trial court erred in law and fact by granting summary judgment in FSMSSA’s favor because there were triable issues of material fact concerning actual dependency. Statutory authority for judicial review of a decision by the FSMSSA’s Board is found in 53 F.S.M.C. 708 and provides, in pertinent part that: "[t]he findings of the Board as to the facts, if supported by competent, material and substantial evidence, shall be conclusive."

Generally there are three possible standards of review for administrative decisions: (1) arbitrary and capricious or abuse of discretion; (2) reasonableness or substantial evidence; and (3) de novo or agreement review. Thalman v. FSM Social Sec. Admin., 20 FSM R. 625, 628 n.2 (Yap 2016). "Judicial review under Title 53, which codifies social security law cases, expressly uses the words ’reasonableness’ and ’substantial’ thus triggering the intermediate standard." GMP Hawaii, Inc. v. Ikosia, 19 FSM R. 551, 554 n.4 (Pon. 2014).

Accordingly, we examine the trial court’s review of the FSMSSA Board’s decision to determine whether the court’s findings were supported by substantial evidence. "Substantial evidence is evidence which a reasoning mind would accept as sufficient to support a conclusion." George v. Albert, 17 FSM R. 25, 33 n.3 (App. 2010).

Eliam also argues that the lower court erred in law since it found the FSMSSA’s regulations requiring evidence of dependency to be proper. Since 53 F.S.M.C. 703 expressly grants the FSMSSA rule-making power, our review is limited to determining whether the promulgated regulations exceeded the statutory authority. Harden v. Continental Airlines, 18 FSM R. 141, 146 n.2 (Pon. 2012) (regulation can neither contradict or exceed statutory law’s reach). Issues of law are reviewed de novo on appeal. Iriarte v. Individual Assurance Co., 18 FSM R. 340, 351 (App. 2012).

IV. ANALYSIS

A. Social Security Regulations

Eliam challenges the validity of the FSMSSA regulations under which surviving child benefits are determined and suggests that those regulations are ultra vires.

In discounting this averment, the trial court adopted the holding of Neth v. FSM Social Security Administration, 20 FSM R. 362 (Pon. 2016), which held:

1) that a valid claim for benefits as an adopted child requires proof of adoption and dependency of the adopted child on the wage earner; 2) the regulations are promulgated to [ensure] efficiency, accuracy and proficiency and prevent abuse and to regulate violations in order to protect the Social Security system; 3) the statutory scheme of the FSMSSA is not unconstitutional and 4) the exercise of the FSMSSA’s investigatory functions, which would include the request for evidence of dependency in the current matter, is lawful as long as it is authorized by law. Therefore, as ruled in Neth, the FSMSSA regulations are not ultra vires.

Order Granting Def.’s Mot. for Summ. J. at 5 (June 27, 2016).

53 F.S.M.C. 703 delegates authority for the promulgation of regulations to the Social Security Administration and provides in pertinent part: "The Board may adopt, amend or rescind regulations for the administration of this subtitle pursuant to chapter 1 of title 17 of this code."

This statutorily created grant of authority reposes within the FSMSSA an ability to carry out the provisions of the FSM social security program it was entrusted to oversee. The delegation of authority implicitly recognizes the relative competence and expertise of the FSMSSA to ensure an efficient and equitable means to evaluate whether a claimant qualifies for benefits.

Furthermore, Title 53 of the FSM Code is patterned after United States statutes, FSM Social Sec. Admin. v. Weilbacher, 7 FSM R. 137, 141 (Pon. 1995), and "[i]t is well settled rule of statutory construction that a statute adopted from another jurisdiction is presumed to have been adopted as construed by the courts of that jurisdiction." Andohn v. FSM, 1 FSM R. 433, 441 (App. 1984). As such, in Chevron U.S.A. v. National Resources Defense Council, Inc., [1984] USSC 140; 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984), the U.S. Supreme Court held that the U.S. Social Security Administration’s regulations were consistent with the statutory scheme and thus, a reasonable exercise of the authority delegated to that agency. "Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Id. at 844, 104 S. Ct. at 2782, 81 L. Ed. 2d at 703. Social security regulations are entitled to great deference. Bowen v. Yuckert, [1987] USSC 102; 482 U.S. 137, 145[1987] USSC 102; , 107 S. Ct. 2287, 2293[1987] USSC 102; , 96 L. Ed. 2d 119, 129 (1987). We hold, that Congress has given the FSMSSA full power and authority to promulgate regulations necessary or appropriate to carry out the function of this agency and therefore reject Eliam’s claim that the regulations at issue are ultra vires.

B. Eligibility Criteria set forth in the Regulations

Under 53 F.S.M.C. 803, social security benefits are only dispersed to a surviving child if he/she was "dependent upon an individual who died fully insured." In addition, social security regulation § 100.21 provides "[a] child who is dependent upon a person entitled to old age benefits or who was dependent upon an individual who died fully insured or curr insured, shall be entitled, upon filing an application, to a child’s insurance benefbenefit." Further "[a]ctual dependency upon the adoptive parent is a prerequisite for the adopted minor to receive surviving social security benefits after the adoptive parent’s death." Alokoa v. FSM Social Sec. Admin., 16 FSM R. 271, 276 n.2 (Kos. 2009). Accordingly, proof of actual dependency is required.

Eliam contends that the "preferred evidence" of dependency listed in the FSMSSA’s regulation § 100.22 is estrictive. Elia Eliam’s argument represents a facial challenge to the method employed by the FSMSSA in determining actual dependency of a surviving adopted child applicant. Social Security Regulation § 100.22 sorth:

&

§ 100.22 "Evidence of dependency"

A child shall be deemed dependent upon his proven natural p or adoptive parent unless such parent was not living in the same household with or contribntributing to the support of the child.

(a) When evidence of a child’s dependency is needed.

If you or someone on your behalf appl[ies] for child’s benefits, we may request evidence that the child was the insured person’s dependent at a specific time B usually the time you applied or the time the insured died or became disabled. What evidence we request depends upon how you claim to be related to the insured person.

(b) Preferred Evidence at least two types of preferred evidence shall be required.

(1) Evidence that the insured person and child were or are living together in one household;

(2) Evidence that the insured person was/is contributing to the support of the child;

(3) The child is listed as a child beneficiary on the insured person’s life insurance policy, if the insured person has or had insured his life;

(4) Official school records showing the insured person as provider for the child; or

(5) At the discretion of the FSMSSA Administrator, any other documents or evidence that will prove dependency of the child on the insured person.

As the trial court noted, Social Security sent a letter dated October 29, 2010, informing Eliam that it had denied the application for surviving adopted child benefits, because of a lack of evidence to show dependency on the deceased grandmother. Even though Eliam was placed on notice of this deficiency, during the August 23, 2012 hearing before the FSMSSA’s fact-finding committee, with the exception of the order confirming the customary adoption by the late grandmother and testimony that purported a shared residence, there was no evidence showing dependency. The trial court determined, that the FSMSSA possessed the authority to request additional proof of dependency, in accordance with regulation § 10sup>[1] In addition, the court below found the denial of Eliam’s claim by the FSMSSA’s Board, based on insufficient evidence, was support regulation § 1000;100.6.[2]

Following the lead of Neth v. FSM Social Security Administration, 20 FSM R. 362 (Pon. 2016), the trial court further ruled:

Social Security benefits are not a property right and do not disburse automatically once a claim is filed, rather a potential beneficiary must fulfill the requirements as set forth in Title 53 of the FSM Code and the FSMSSA regulations before being deemed eligible to receive benefits. Neth, 20 FSM R. at 367.

In line with the decision in Neth, this court holds that FSM Social Security benefits are not a property right which automatically vests upon the death of the wage earner and upon filing of a claim. The proper procedure under Title 53 and the FSM Social Security regulations must be adhered to before a claimant may be deemed eligible for benefits.

Order Granting Def.’s Mot. for Summ. J. at 4-5 (June 27, 2016).

In so holding, the trial court concluded that the Board’s dismissal of Eliam’s claim was not erroneous. Nevertheless, Eliam maintains that the list of criteria set forth in regulation '100.22, entitled "preferred evidence," is too restrictive and the applicable statute that imbues this agency with the power to promulgate regulations did not envision the absence of such preferred evidence to render a claimant’s eligibility for benefits inadequate.

Eliam’s argument is misguided, because "preferred" does not connote exclusive and because of the allowance provided an applicant to adduce supplementary evidence, as set forth in § 100.22(5).ely, "[a]t the dihe discretion of the FSMSSA Administrator, any other documents or evidence that will prove dependency of the child on the insured." In addition, we find that the list of preferred evidence set forth within the FSMSSA’s regulations streamlines the decision-making process by providing a means to efficiently and equitably evaluate dependency and makes it easier for applicants to know what evidence they need to produce for a successful application. As such, pursuant to the statutory authority to implement the social security program, the FSMSSA has promulgated regulations that are consistent with the legislature’s intent. Zebley v. Heckler, 642 F. Supp. 220, 222 (E.D. Pa. 1986).

The narrow issue which remains concerns the insufficient evidence of dependency proffered. The trial court correctly found Eliam had failed to present to Social Security evidence showing that the late grandmother was responsible for her care, custody, and support and, by implication, that Eliam was dependent on the grandmother. 53 F.S.M.C. 708 provides, in pertinent part:

If either party applies to the Court for leave to adduce additional material evidence and shows to the satisfaction of the Court that there were reasonable grounds for failure to adduce the evidence in the hearing before the Board or its authorized representatives and that such evidence is competent, material and substantial, the Court may order the additional evidence to be taken by the Board and to be allowed upon the hearing in such manner and upon such conditions as the Court considers proper.

As noted above, although Eliam was notified that evidence of dependency was lacking, no such application to adduce additional evidence was made. There being no further evidence of dependency proffered by Eliam, "[t]he findings of the Board as to the facts, if supported by competent, material and substantial evidence, shall be conclusive." 53 F.S.M.C. 708. Accordingly, we find the trial court determination to be proper.

V. CONCLUSION

The trial court’s grant of summary judgment in favor of the FSMSSA was proper, since Eliam failed to adduce sufficient evidence of dependency, as required by statute. Further, the Congress has expressly given the Board full power and authority to promulgate regulations necessary or appropriate to carry out the functions of this agency it was entrusted to administer. Finally, regulations relating to submission of preferred evidence conform and are consistent with the statutory authority delegated the FSMSSA and therefore the Board may set forth the nature and extent of proof to establish dependency and hence the right to benefits.

ACCORDINGLY, we hereby affirm the trial court’s June 27, 2016 Order Granting Defendant’s Motion for Summary Judgment.

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^[1] FSM Social Security Regulation § 100.5 Responsiy for givi giving evidence.

When evidence is needed to prove your entitlement to receive or to continue to receinefits, you will be responsible for obtaining and providing the evidence to us. Upon your your request, we will advise you as to what kinds of evidence would be convincing and we will consider any relevant evidence you give us. Evidence given to us will be kept confidential and not disclosed to anyone but you[,] except as provided in FSMC 704. You should be aware that 53 FSMC 605 provides criminal penalties for knowingly misrepresenting the facts or for not making false statements to obtain social security benefits for yourself or someone else.
^[2] FSM Social Security Regulation § 100.6 Failure to provide requested evidence.

Generally, you will be asked to provide us by a certain date specific kinds of evidence to prove you are entitled to benefits. If we do not receive the evidence by that date, we may decide to close your claim at that time. If you are already receiving benefits, you may be asked to provide us by a certain date evidence needed to determine whether you [will] continue to be entitled to benefits or whether your benefits should be terminated or reduced. If you do not provide us the requested evidence by the date given, we may decide that you are no longer entitled to benefits or that your benefits should be terminated or reduced. You may let us know if you are unable to provide us the requested evidence within the specified time, explain why there will be a delay and request additional time. If this delay is due to illness, inability to receive timely evidence you have requested from another source or a similar circumstance, you will be given additional time to provide us the evidence.