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Wright v. Califano

decided: November 16, 1978.

ROLAND WRIGHT, ANNA WRIGHT, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS-APPELLEES, CROSS-APPELLANTS.
v.
JOSEPH A. CALIFANO, JR., SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, ET AL., DEFENDANTS-APPELLANTS, CROSS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 75 C 1537 - Alfred Y. Kirkland, Judge.

Before Cummings and Wood, Circuit Judges, and Campbell, Senior District Judge.*fn*

Author: Wood

The question presented in this appeal is whether the district court erred in ordering the Social Security Administration to either provide hearings and Appeals Council reviews within certain time limits when requested by unsuccessful applicants for old age and survivors benefits, or else make interim payments of benefits until a final unfavorable decision has been rendered by the applicable administrative body. The court granted this relief on the grounds that the lengthy delays presently prevalent in the Social Security system violate the mandate of the Social Security Act and Administrative Procedure Act for the provision of hearings within a reasonable time. We reverse on the grounds that the delays in question, although undesirable, do not violate the applicant's due process rights and are not so unreasonable as to constitute a breach of the applicants' statutory rights justifying the extraordinary remedy imposed.

Background

The Social Security Act, 42 U.S.C. § 401, Et seq. (the Act), requires the Social Security Administration (SSA) to administer, Inter alia, insurance programs providing for old age benefits (s 401) and survivors benefits (s 402). The object of these programs is to provide monthly retirement benefits to persons who have reached a specified age and worked a sufficient period of time to have attained an insured status, and to provide retirement or survivors benefits to specified dependents of such insured workers, 42 U.S.C. §§ 402, 414. In order for benefits to be received, an application must be filed with the SSA showing eligibility for the benefits. An initial eligibility determination is made by an examiner. If the initial decision is adverse to the applicant, the applicant may request a De novo reconsideration of the decision. If the reconsideration decision remains adverse, the applicant may request a hearing before an administrative law judge (ALJ). Finally, a request for review of an adverse hearing decision may be filed with the SSA Appeals Council, after which judicial review becomes available.

In recent years there have been long delays at each step of the appeals process.*fn1 Roland Wright, the named plaintiff in this suit, applied on September 1, 1972, for an increase in old age benefits to which he believed himself entitled on account of his deceased wife's prior participation in the Social Security program. His initial application was denied on November 6, 1972. He requested a reconsideration on May 2, 1973, which led to an affirmance of the denial on August 15, 1973. On February 2, 1974, he filed a request for a hearing. When no hearing was scheduled after 420 days despite repeated requests, plaintiff-appellee filed the present lawsuit on May 13, 1975, on behalf of himself and other similarly situated applicants within Region V. The complaint alleged that the SSA's failure to render each successive decision within a "reasonable time" violated the plaintiffs' rights under Title II of the Social Security Act, Sections 555 and 706 of the Administrative Procedure Act (APA), and the Due Process Clause of the Fifth Amendment. The relief sought included a writ of mandamus ordering the SSA to process claims within specified maximum time limits at each stage of decision and review, and an order requiring the payment of benefits to any claimant whose request for a determination has been pending longer than those time limits. It was also suggested that the Secretary of the Department of Health, Education and Welfare has a duty under 42 U.S.C. § 1302 to promulgate regulations implementing these goals. Lastly, the complaint sought to overturn an SSA regulation, 20 C.F.R. § 404.968a(b), exempting from the coverage of Section 205(q) of the Act, 42 U.S.C. § 405(q), any claim in which a request for reconsideration or administrative or judicial review is pending, on the ground that the regulation conflicts with the policies behind Section 205(q).

Granting the plaintiffs' motion for summary judgment, the district court accepted the plaintiffs' argument that the delays rampant throughout the Social Security system violated Title II of the Social Security Act and the APA and therefore found it unnecessary to consider the plaintiffs' constitutional claims. The court's order required the SSA to meet certain time limits to be phased in over a period of time, so that by January 1, 1979, all hearing decisions concerning Region V claims would be issued within 90 days of a request for a hearing. Further, all Appeals Council decisions would be issued within 90 days from the date of request for review. In all cases in which the specified time limits were not met, interim benefit payments were to be made to the applicant, subject to recoupment by the SSA should the applicant eventually be found ineligible. The Secretary was instructed to promulgate regulations implementing those provisions and was enjoined from applying 20 C.F.R. § 404.968a(b)(2) to Region V applicants.

The Secretary appeals the district court's decision on a number of grounds: (1) the court lacked subject matter jurisdiction; (2) the court erred in certifying the suit as a class action; (3) there were no statutory or constitutional violations justifying the issuance of a writ of mandamus; (4) the court erred in requiring interim payments of benefits, and; (5) the court erred in setting aside 20 C.F.R. § 404.968a(b). The plaintiffs cross-appeal on the grounds that the court erred in allowing the government to recoup interim payments should an applicant eventually be found to have been ineligible. This court has jurisdiction over these appeals under 28 U.S.C. § 1291.

Jurisdiction

The complaint alleged jurisdiction under the Administrative Procedure Act, 5 U.S.C. § 701, Et seq., the federal question statute, 28 U.S.C. § 1331, the mandamus statute, 28 U.S.C. § 1361, and Section 205(g) of the Social Security Act, 42 U.S.C. § 405(g). We conclude that the district court had jurisdiction under Section 205(g)*fn2 and do not consider the other sections. See Caswell v. Califano, 583 F.2d 9 (1st Cir. 1978); Mattern v. Mathews, 582 F.2d 248 (3d Cir. 1978); Liberty Alliance of the Blind v. Califano, 568 F.2d 333 (3d Cir. 1977). The Secretary's principal objection to finding jurisdiction under Section 205(g) is that at the time this suit was instigated there had been no "final decision" on the plaintiffs' claims as required by the statute. However, in Weinberger v. Salfi, 422 U.S. 749, 95 S. Ct. 2457, 45 L. Ed. 2d 522 (1975), the Supreme Court distinguished between a waivable element of the jurisdictional requirements of Section 205(g) and a non-waivable element. The non-waivable element is the filing of an application for benefits, which was properly alleged in the case at bar. The waivable element is the "requirement that administrative remedies prescribed by the Secretary be exhausted." Mathews v. Eldridge, 424 U.S. 319, 328, 96 S. Ct. 893, 899, 47 L. Ed. 2d 18 (1976); See also Jimenez v. Mathews, 523 F.2d 689 (7th Cir. 1975), Cert. denied, 427 U.S. 912, 96 S. Ct. 3200, 49 L. Ed. 2d 1204 (1976). In Eldridge the Court characterized the plaintiff's asserted right to a due process hearing before his disability benefits could be terminated as being "entirely collateral to his substantive claim of entitlement" and found it to be a case "where (the) claimant's interest in having a particular issue resolved promptly is so great that deference to the agency's judgment is inappropriate."*fn3 424 U.S. at 330, 96 S. Ct. at 900. With regard to its findings of waiver in Eldridge and Salfi, the Court in Califano v. Sanders, 430 U.S. 99, 109, 97 S. Ct. 980, 986, 51 L. Ed. 2d 192 (1977), stated:

In both instances . . . the claimants challenged the Secretary's decisions on constitutional grounds. Constitutional questions obviously are unsuited to resolution in administrative hearing procedures and, therefore, access to the courts is essential to the decision of such questions. Furthermore, since federal-question jurisdiction under 28 U.S.C. § 1331 is precluded by § 205(h), Weinberger v. Salfi, supra, at 761 (95 S. Ct. 2457), a decision denying § 205(g) jurisdiction in Salfi or Eldridge would effectively have closed the federal forum to the adjudication of colorable constitutional claims. Thus those cases merely adhered to the well-established principle that when constitutional questions are in issue, the availability of judicial review is presumed, and we will not read a statutory scheme to take the "extraordinary" step of foreclosing jurisdiction unless Congress' intent to do so is manifested by " "clear and convincing' " evidence. 422 U.S., at 762 (95 S. Ct. 2457, 45 L. Ed. 2d 522); Johnson v. Robison, 415 U.S. 361, 366-367 (94 S. Ct. 1160, 39 L. Ed. 2d 389) (1974).

Under these principles, we believe that the district court clearly had jurisdiction over the plaintiffs' constitutional claims under Section 205(g), since the complaint raised colorable claims that the delays in receiving a hearing or review violated the plaintiffs' due process rights and that the deprivation would only be aggravated by further delay. Although the situation with respect to the plaintiffs' claims that the Social Security Act and APA require the SSA to act within a "reasonable time" is less clear, we believe that they also fall within the district court's Section 205(g) jurisdiction. Statutory claims such as these are both colorable and collateral, and the plaintiffs may suffer irreparable harm if judicial review is postponed. Delay in judicial review may even effectively "close the federal forum" to these claims. It must be conceded that the Secretary has an interest in interpreting the "reasonable time" requirement of the Social Security Act that is not present in a case involving only constitutional claims. The Secretary is required by 42 U.S.C. § 1302 to promulgate regulations for "the efficient administration of the functions with which (he) is charged under (the Act)." Yet the Secretary's interest in plaintiffs' statutory claims remains "unsuited to resolution in administrative Hearing procedures." Califano v. Sanders, 430 U.S. at 109, 97 S. Ct. at 986 (emphasis added). We conclude that it should be seen more as a consideration affecting the desirability of judicial intervention in the administrative process on the merits of a particular case, rather than an absolute preclusion of federal jurisdiction over the plaintiffs' claims.

We also reject the Secretary's argument that the plaintiffs' statutory claims are not collateral to their substantive claims of entitlement for benefits, since they seek payment of interim benefits when administrative delay exceeds certain time limits. It is clear that this "presumptive eligibility" is not grounded in any explicit statutory requirement, since the provisions of 42 U.S.C. § 405(q) are not applicable here.*fn4 Instead "presumptive eligibility" can only be invoked as a judicial remedy for a violation of another statutory provision or the Due Process Clause. The existence of this prayer for relief does not justify the exhaustion of administrative remedies not otherwise justifiable.

The Class Certification Issue

In the district court the Secretary opposed certification of the class only on the ground that class actions could not be maintained in Title II Social Security cases. The court properly rejected this argument. See, e. g., Jimenez v. Weinberger, 523 F.2d 689 (7th Cir. 1975), Cert. denied, 427 U.S. 912, 96 S. Ct. 3200, 49 L. Ed. 2d 1204 (1976). For the first time on appeal the Secretary raises two additional arguments as to why class certification was improper. However, "It is well settled, that a litigant may not seek reversal by this Court on a ground not presented to the district court for consideration." King v. Stevenson, 445 F.2d 565, 570-71 (7th Cir. 1971). In any event, we find the Secretary's argument to be without merit.

The Secretary first contends that the requirement under Fed.R.Civ.P. 23(a)(2) that common questions of law and fact exist among the class members was not met because of the many variables that affect the amount of delay in a particular case. However, as the Second ...


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