L.N.P. v. Kilolo Kijakazi, 64 F.4th 577

Background

In Oct. 2019 L.N.P. applied for early Social Security retirement and auxiliary benefits for two dependent children; SSA awarded him $2,154/month and each child $1,107/month.
L.N.P. claimed SSA miscalculated auxiliary benefits (citing Parisi) and would be underpaying each child by $375/month; he requested reconsideration and was told by phone it was denied and a written decision might take up to a year.
After not receiving a written decision, L.N.P. sued in July 2021 under 42 U.S.C. § 405(g), seeking declaratory/injunctive relief and past-due benefits for himself, his children, and a putative class.
SSA then issued a written denial, moved to dismiss for lack of a final decision/exhaustion, and argued exhaustion could not be excused; the district court dismissed without prejudice for failure to exhaust (initially under Rule 12(b)(1), later saying same result under 12(b)(6)).
The Fourth Circuit held that § 405(g)’s exhaustion requirement is not jurisdictional but is mandatory and may be excused only in narrow circumstances; it affirmed dismissal because the complaint did not meet the Bowen exceptions to excuse exhaustion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is §405(g) exhaustion jurisdictional, making 12(b)(1) dismissal proper?	§405(g) exhaustion is not jurisdictional; dismissal under 12(b)(1) was error.	§405(g) requires a final decision; no final decision => no jurisdiction.	Not jurisdictional; court may consider exhaustion as an affirmative defense. Dismissal could be reviewed under Rule 12(b)(6) where facts permitting the defense appear on the complaint.
Are L.N.P.’s claims “collateral” to benefit claims (so exhaustion can be excused)?	Claims are systemic/procedural and thus collateral to benefits claims.	Claims are intertwined with L.N.P.’s own benefits claim and must go through SSA first.	Not collateral: claims are inextricably intertwined with the benefit dispute (Ringer); collaterality exception fails.
Would enforcing exhaustion cause irreparable injury?	Delay creates economic hardship, mortality risk, and loss of interest—irreparable harm.	Alleged harms are purely monetary and not irreparable; children still receive benefits pending appeal.	No irreparable injury: alleged harms are economic only and do not justify bypassing exhaustion.
Would administrative exhaustion be futile?	SSA’s entrenched internal policy makes reversal unlikely, so exhaustion would be futile.	Futility is speculative; agency should get opportunity to explain and possibly correct its interpretation.	No futility: plaintiff’s allegation is speculative; agency review could yield reasoned explanation or correction.

Key Cases Cited

Parisi by Cooney v. Chater, 69 F.3d 614 (1st Cir. 1995) (plaintiff’s interpretive basis for alternative auxiliary-benefit calculation)
Heckler v. Ringer, 466 U.S. 602 (1984) (systemic claims intertwined with benefits claims must exhaust administrative remedies)
Smith v. Berryhill, 139 S. Ct. 1765 (2019) (describes modern four-step exhaustion process under § 405(g))
Mathews v. Eldridge, 424 U.S. 319 (1976) (distinguishes waivable exhaustion from nonwaivable presentation-of-claim requirement)
Bowen v. City of New York, 476 U.S. 467 (1986) (identifies collaterality, irreparable injury, and futility as bases to excuse exhaustion)
Weinberger v. Salfi, 422 U.S. 749 (1975) (explains purposes of exhaustion and agency expertise)
Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007) (Rule 12(b)(6) may reach an affirmative defense when all facts appear on the complaint)
Hyatt v. Heckler, 807 F.2d 376 (4th Cir. 1986) (Fourth Circuit application of Bowen factors)