Frank Nellom, proceeding pro se, appealed a District Court dismissal of his complaint alleging that his Social Security benefits were discontinued without proper notice in violation of federal regulations. The underlying dispute stemmed from a 2021 application for benefits where the State agency denied both the initial application and a request for reconsideration. Nellom subsequently requested a hearing before an Administrative Law Judge, but the ALJ dismissed the request on February 20, 2024, because Nellom failed to appear for two scheduled dates. Crucially, Nellom did not seek review of this dismissal by the Appeals Council. He had previously filed a similar lawsuit which was dismissed on the same grounds, and despite filing a motion alleging fraud and lack of notice, he failed to address the exhaustion requirement or pursue the available administrative appeals.
The Third Circuit exercised plenary review over the District Court's dismissal, which turned on the statutory requirement of 42 U.S.C. § 405(g). This statute limits judicial review of Social Security decisions to cases where the claimant has obtained a 'final decision' from the Commissioner. A final decision is defined as the completion of the four-step administrative process: initial determination, reconsideration, an ALJ hearing, and review by the Appeals Council. The court noted that without this final decision, the District Court lacks subject matter jurisdiction. The court rejected Nellom's arguments that he was denied benefits without notice or that the Commissioner committed fraud. The court explained that exemptions to the exhaustion requirement exist only where a claim is 'collateral' to the benefits claim or where the claimant would suffer irreparable injury if forced to exhaust remedies. The court found that neither exception applied here, as Nellom did not raise a colorable constitutional claim and his grievance regarding notice was not collateral to his underlying claim for benefits. Consequently, the court affirmed that the District Court correctly dismissed the complaint without prejudice.
The decision reinforces the strict jurisdictional bar in Social Security cases, requiring claimants to complete the full administrative process before filing suit. For Frank Nellom, the dismissal is without prejudice, meaning he may refile his complaint in District Court once he obtains a final decision by seeking Appeals Council review of the ALJ's dismissal. The ruling clarifies that arguments regarding procedural errors like lack of notice do not bypass the exhaustion requirement unless they rise to the level of a collateral constitutional claim.
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