Crespo v. Colvin
824 F.3d 667
7th Cir.2016Background
- Jose Crespo applied in 2009 to be his mother Minerva Quiñones Sostre’s SSA representative payee, certifying she lived with him in Illinois and promising to notify SSA of changes.
- Crespo submitted multiple reports affirming his mother’s Illinois residency; SSA later received a tip in 2012 that she lived in Puerto Rico and opened a fraud investigation.
- Airline records, bank deposits in Puerto Rico, and prior statements contradicted Crespo’s and Quiñones’s claims; Crespo gave inconsistent explanations during interviews.
- SSA (ALJ) found Crespo knowingly misrepresented his mother’s residence, imposed a $114,956 civil money penalty under 42 U.S.C. § 1320a-8 (combining overpayment multiplier and per-month penalties).
- Crespo’s appeal to the Departmental Appeals Board (DAB) was filed five days late; the DAB declined review as untimely. Crespo filed in district court, which dismissed for lack of jurisdiction; the case was transferred to the Seventh Circuit where merits were reached concerning the DAB’s timeliness decision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriate forum for review | Crespo: district court had jurisdiction under 42 U.S.C. § 405(g) because ALJ’s decision effectively ended benefits | SSA: review of §1320a-8 penalties lies exclusively in the court of appeals | Court: jurisdiction lies in court of appeals under §1320a-8(d)(1) (transfer cured forum issue) |
| Whether Crespo exhausted administrative remedies / timely appealed to DAB | Crespo: he reasonably believed 30-day clock ran from actual receipt (March 18) | SSA: regulation deems mailed decisions served 5 days after mailing; Crespo’s notice was deemed served March 12 so appeal due April 11 | Court: DAB correctly found Crespo’s DAB appeal untimely; service-by-mail rule controls; no abuse of discretion |
| Whether DAB’s dismissal for untimeliness bars judicial review | Crespo: untimely DAB appeal should not preclude judicial review | SSA: failure to timely appeal to DAB precludes review of ALJ decision | Court: judicial review is proper of the DAB’s decision declining review; Crespo preserved issue whether his DAB appeal was timely by petitioning court of appeals within 60 days of DAB decision |
| Excessive fines (Eighth Amendment) challenge | Crespo: penalty is excessive and violates Eighth Amendment | SSA: penalty was statutory and within limits; procedural default applies | Court: claim waived (not raised before Commissioner and perfunctory on appeal); court declines to reach merits |
Key Cases Cited
- United States v. Rogan, 517 F.3d 449 (7th Cir.) (noting uncertainty whether certain civil damages constitute "fines")
- Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257 (1989) (discussing whether punitive damages are "fines")
- United States v. Bajakajian, 524 U.S. 321 (1998) (Eighth Amendment excessive-fines analysis and deference to legislative judgments on punishment)
- Laboski v. Ashcroft, 387 F.3d 628 (7th Cir. 2004) (administrative exhaustion and review of immigration-board timeliness issues)
- United States v. Berkowitz, 927 F.2d 1376 (7th Cir. 1991) (perfunctory/undeveloped arguments may be waived)
- Hildebrandt v. Ill. Dep’t Nat. Res., 347 F.3d 1014 (7th Cir. 2003) (failure to brief an issue can result in waiver)