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dismissing plaintiff's Complaint alleging that her right to due process was violated when the Appeals Council vacated and remanded the ALJ's entire decision even though plaintiff only appealed the determination of the onset of her disability and the Commissioner did not appeal at all.
Summary of this case from Pellegri v. BarnhartOpinion
CIVIL ACTION NO. 03-CV-11444-RGS
February 9, 2004
MEMORANDUM AND ORDER DEFENDANT'S MOTION TO DISMISS
On June 9, 2000, Sandra Popps applied for disability insurance benefits and supplemental security income pursuant to Title II and Title XVI of the Social Security Act, 42 U.S.C. § 423. Popps claimed disability from December 13, 1998. On October 24, 2001, an Administrative Law Judge (ALJ) determined Popps to be disabled, but found the onset date of her disability to have been November 1, 2000.
An appeal of all or part of an ALJ's decision must be filed with the Appeals Council within sixty days. 20 C.F.R. § 404.968(a)(1). On November 1, 2001, Popps filed a timely appeal of the ALJ's determination of the onset date. The Commissioner, for her part, did not appeal the benefits determination. On February 13, 2003, the Appeals Council vacated the ALJ's decision in its entirety and remanded with instructions to the ALJ to reconsider the award of benefits to Popps. On the day scheduled by the ALJ for a rehearing (August 5, 2003), Popps brought this Complaint in the federal district court, alleging that her right to due process had been violated by the Appeals Council's decision to reopen the benefits determination, notwithstanding the Commissioner's failure to appeal. Invoking federal question jurisdiction, 28 U.S.C. § 1331, Popps seeks an order of mandamus directing the Commissioner to reinstate the ALJ's original award of disability benefits. On October 7, 2003, the Commissioner moved to dismiss the Complaint, arguing that the district court lacks jurisdiction under section 1331 by operation of 42 U.S.C. § 405(g)and (h). Section 405(h) states that:
The rehearing was held as scheduled, although the court is led to understand that the ALJ has deferred issuing a decision pending the outcome of this case.
[t]he findings and decision of the Commissioner of Social Security after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Commissioner of Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.
Section 405(g) states that:
[a]ny individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow.
Popps agrees that a final decision of the Commissioner is ordinarily a prerequisite of judicial review, but argues that the rule should be different where an administrative agency violates a claimant's right to due process as she insists has happened in her case. Popps asks that this court deem the ALJ's original finding of disability to be the "final decision" of the Commissioner, and accordingly, take jurisdiction of her case and overturn the action of the Appeals Council in remanding the disability determination for further review.
There is a four step review process for a claim. First, a claimant must seek an initial determination of disability. If the claimant is dissatisfied with the result, he or she may seek reconsideration. If that decision is adverse, the claimant may ask for the claim to be heard by an ALJ. If the decision is again adverse, the claimant may seek review from the Appeals Council. The Council may confirm the decision of the ALJ, order a rehearing, or review the case itself. 20 C.F.R. § 404.967, 404.976. In any event, absent a final decision of the Appeals Council there is no "final decision" of the Commissioner triggering a right to judicial review. 20 C.F.R. § 404.981.
An obvious difficulty with Popps' jurisdictional argument lies in the fact that even if the court were to accord finality to the ALJ's original disability determination, no final decision has entered on Popps' appeal of the ALJ's onset date finding.
Popps looks for support to McCuin v. Secretary of Health and Human Services, 817 F.2d 161, 172 (1st Cir. 1987), where in analogous circumstances, the First Circuit held that the Secretary had violated a claimant's due process rights by improperly reopening an benefits award. The McCuin court stated that "[t]he reopening power claimed by the Secretary takes away the finality that adjudication normally affords. This lack of finality, essentially a problem of substantive due process, spawns a problem of procedural due process: the impossibility of giving Medicare recipients fair notice of the Secretary's intentions." Consequently, the Court of Appeals concluded "that jurisdiction is particularly appropriate [in the district court] in view of the constitutional challenge to the Secretary's interpretation of the regulations." Id. at 165.
While McCuin involved a dispute over Medicare benefits, the Medicare law incorporates the section 405(g) "final decision" requirement.
The Commissioner objects to McCuin on several grounds, the most substantial of which is Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000), in which the Supreme Court concluded that in erecting the elaborate statutory and regulatory scaffolding that frames the Social Security and Medicare regimes, Congress made clear its desire to reach "beyond ordinary administrative law principles of `ripeness' and `exhaustion of administrative remedies'" by channeling virtually all legal actions through the agencies' internal review processes, Id. at 2. In Corliss v. Barnhart, 225 F. Supp.2d 104 (D. Mass. 2002), Magistrate Judge Collings cogently summarized the holding and reasoning of Illinois Council.
[Section] 405(h) bars not only so-called "amount" claims, but all claims arising under the statute. The sole exception would be those instances in which claims would be effectively precluded from any judicial review rather than simply "channeled" through the administrative process. Illinois Council, 529 U.S. at 5. In Illinois Council, an association of nursing homes challenged the validity of certain Medicare regulations on the grounds that the remedies and sanctions therein violated both statutes and the Constitution. Illinois Council, 529 U.S. at 5. The jurisdiction of the federal district court was invoked under 28 U.S.C. § 1331. Id. The District Court dismissed the action for lack of jurisdiction and the Court of Appeals reversed, Id.
The Supreme Court found that the phrase "to recover on any claim arising under this subchapter" in § 405(h) "plainly bars § 1331 review in such a case [in which a claimant seeks a monetary benefit], irrespective of whether the individual challenges the agency's denial on evidentiary, rule-related, statutory, constitutional, or other legal grounds." Id. at 10. The more difficult question was whether § 405(h) barred claims under § 1331 in situations where the claimant "challenges in advance the lawfulness of a policy, regulation, or statute that might later bar recovery of that benefit (or authorize the imposition of a penalty)." Illinois Council, 529 U.S. at 10. The Court concluded that § 405(h) could not be limited solely to claims regarding monetary benefits because:
Claims for money, claims for other benefits, claims of program eligibility, and claims that contest a sanction or remedy may all similarly rest upon individual fact-related circumstances, may all similarly dispute agency policy determinations, or may all similarly involve the application, interpretation, or constitutionality of interrelated regulations or statutory provisions. There is no reason to distinguish among them in terms of the language or in terms of the purposes of § 405(h). Illinois Council, 529 U.S. at 13-14.
In the Court's view, the "channeling of virtually all legal attacks through the agency" affords the agency the opportunity to better "apply, interpret, or revise policies, regulations, or statutes," while all but eliminating "premature interference" by individual courts asserting jurisdiction under § 1331. Id., at 13.Corliss, 225 F. Supp.2d at 107-108.
The Commissioner pointed out at oral argument, for example, that the authority of the Commissioner to reopen a benefits determination (objected to by the McCuin court), has subsequently been affirmed by Congress. See National Kidney Patients Association v. Sullivan, 958 F.2d 1127, 1133-1134 (D.C. Cir. 1992).
Based on his analysis, Magistrate Judge Collings concluded thatIllinois Council "effectively overrules the jurisdictional discussion in McCuin." Id. at 108 n. 8. Whether or not the assessment that McCuin is no longer good law is correct, the "premature interference" lesson that Magistrate Judge Collings draws from Illinois Council is squarely on point. "Insisting on exhaustion forces parties to take administrative proceedings seriously, allows administrative agencies an opportunity to correct their own errors, and potentially avoids the need for judicial involvement altogether." Portela-Gonzalez v. Secretary of the Navy, 109 F.3d 74, 79 (1st Cir. 1997). It is true that the doctrine may delay justice in meritorious cases of which this may be one. If the Commissioner has overstepped her bounds, and if she fails to correct her course appropriately, the day of vindication will come, later to be sure than Popps would like, but in a context where relief will have systemic as well as case-specific repercussions. However, until the day of judgment arrives, because section 405(h) "plainly bars § 1331 review . . . irrespective of whether the individual challenges the agency's denial on evidentiary, rule-related, statutory, constitutional, or other legal grounds," Popps' present action must beDISMISSED as premature.
Justice Breyer made a similar point in Illinois Council.
Insofar as § 405(h) prevents application of the "ripeness" and "exhaustion" exceptions, i.e., insofar as it demands the "channeling" of virtually all legal attacks through the agency, it assures the agency greater opportunity to apply, interpret, or revise policies, regulations, or statutes without possibly premature interference by different individual courts applying "ripeness" and "exhaustion" exceptions case by case. But this assurance comes at a price, namely, occasional individual, delay-related hardship. In the context of a massive, complex health and safety program such as Medicare, embodied in hundreds of pages of statutes and thousands of pages of often interrelated regulations, any of which may become the subject of a legal challenge in any of several different courts, paying this price may seem justified. In any event, such was the judgment of Congress. . . .Id., at 13.
Popps' attempt to resuscitate the ALJ's benefits award under the doctrine of res judicata (or more accurately, issue preclusion) is also premature. Issue preclusion bars the relitigation of factual issues conclusively decided in previous litigation between the parties. For the doctrine to apply, there must be a valid and binding judgment in the prior action. Grella v. Salem Five Cent Savings Bank, 42 F.3d 26, 30 (1st Cir. 1994). The absence of a final decision in the ongoing administrative process deprives this court of jurisdiction to consider the argument on its merits.
ORDER
For the foregoing reasons, the motion to dismiss is ALLOWED. Judgment will enter for the Commissioner.SO ORDERED.