Stephen Yagman v. Brent Whittlesey

FILED
NOT FOR PUBLICATION
MAR 16 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

STEPHEN YAGMAN, No. 14-55006

Plaintiff - Appellant, D.C. No. 2:12-cv-08413-SVW-CW

v.
MEMORANDUM*
BRENT WHITTLESEY; LEON
WARREN WEIDMAN, I; GEORGE S.
CARDONA; ANDRE BIROTTE, Jr.;
LORETTA E. LYNCH, Attorney
General; DEREK ANTHONY WEST;
MICHAEL J. ASTRUE; TIMOTHY F.
GEITHNER,

Defendants - Appellees.

Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding

Submitted March 8, 2016**
Pasadena, California

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: CLIFTON and IKUTA, Circuit Judges and BLOCK,*** Senior District
Judge.

Stephen Yagman owes the United States approximately $22,500. A portion

of that debt is offset against his monthly Social Security benefit pursuant to 31

U.S.C. § 3716(c)(3)(A)(i). Yagman sued in the district court, raising a variety of

challenges to the offsets. He eventually pursued only a claim under the

Administrative Procedure Act, which the district court dismissed pursuant to

Federal Rule of Civil Procedure 12(b)(6). We review the district court’s decision

de novo. See Edwards v. Marin Park, Inc., 356 F.3d 1058, 1061 (9th Cir. 2004).

1. 31 U.S.C. § 3716(c)(3)(A)(ii) makes $9,000 per year—or $750 per

month—“exempt from offset.” The plain meaning of that phrase is that $750 of a

debtor’s monthly benefit cannot be withheld as an offset. The statute does not

refer to the 15% cap contained in 31 C.F.R. § 285.4(e), let alone dictate the base on

which the cap is to be calculated.

Thus, the statutory exemption guarantees only that a debtor will receive a

monthly benefit of at least $750 notwithstanding the debt. Since Yagman has

always received far in excess of that amount, the calculation of his offsets complies

with the statute’s unambiguous command.

***
The Honorable Frederic Block, Senior District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.

2
2. Yagman’s argument that § 285.4(e) is arbitrary and capricious

because the agency did not articulate a rationale for the 15% cap was not raised

below and may be disregarded. See Peterson v. Highland Music, Inc., 140 F.3d

1313, 1321 (9th Cir. 1998). In any event, the agency’s statement that Social

Security beneficiaries “may be dependent upon their Federal benefits for a

substantial part of their income,” Offset of Federal Benefit Payments To Collect

Past-due, Legally Enforceable Nontax Debt, 63 Fed. Reg. 44986, 44987 (Aug. 21,

1998), explained the rationale for the cap.

3. Yagman’s challenge to the notice-and-comment procedure by which

§ 285.4(e) was promulgated also was not raised below. Had it been, it would have

been untimely. See Wind River Min. Corp. v. United States, 946 F.2d 710, 715 (9th

Cir. 1991).

4. Finally, Yagman’s contention that the offsets were not authorized by

an agency head also was not raised below. In any event, it is without merit.

AFFIRMED.