## Facts

- Robert Jackson ran Life First, a private company that the Social Security Administration (SSA) designated as a representative payee for certain Social Security beneficiaries who could not manage their benefits.
- The SSA conducted an audit of Life First’s handling of beneficiary funds.
- The SSA concluded from the audit that Life First had stolen (misused) about $250,000 belonging to beneficiaries.
- The SSA provided a hearing where Jackson could present evidence to contest the audit findings and the proposed action.
- After the hearing, the SSA revoked Life First’s representative-payee status.
- Jackson contended that he could not take an administrative appeal from the revocation decision.
- Jackson alleged that Life First went out of business after losing the representative-payee designation.
- Jackson filed suit, claiming the revocation deprived Life First of property and/or liberty interests without due process of law under the Fifth Amendment.

## Issues

1. Did Life First have a constitutionally protected property or liberty interest in continuing to serve as an SSA-designated representative payee?
2. If so, did the SSA’s audit process and hearing provide constitutionally sufficient process even though Jackson alleged there was no administrative appeal from the revocation?

## Decision

- The court ruled for the United States on a dispositive motion and rejected Jackson’s Fifth Amendment procedural due process claim.
- The court concluded that Jackson had not shown a constitutionally protected interest in continued representative-payee status that required additional procedural protections beyond what the SSA provided.
- Judgment was entered (and/or the action was dismissed) in the government’s favor.

## Legal Principles

- A procedural due process claim requires (1) a protected property or liberty interest and (2) a deprivation of that interest without constitutionally adequate procedures.
- A property interest exists only when law creates a legitimate entitlement; participation in a government program or receipt of a government designation does not, by itself, create a property interest where the designation is revocable and not guaranteed.
- A liberty interest based on reputational harm generally requires more than damage to reputation or business; the claimant must show reputational stigma plus a concrete alteration of legal status or loss of a right recognized by law.
- Due process generally requires notice and a meaningful opportunity to be heard at a meaningful time; the Constitution does not require an additional layer of administrative appellate review in every setting.
- When the government provides an opportunity to contest adverse findings through a hearing where the affected party may present evidence, that procedure can satisfy the minimum requirements of procedural due process, depending on the interests at stake and the risk of error.

## Conclusion

Jackson’s due process challenge to the SSA’s revocation of Life First’s representative-payee status failed because the court found no viable basis for treating the designation as a protected property or liberty interest requiring more process than the audit, notice, and hearing the SSA provided, and the court therefore entered judgment for the United States.


Jackson v. United States, 2008 WL 4089540 (2008)