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Giacone v. Richard S. Schweiker Secretary of Health and Human Services

decided: August 10, 1981.

MARTIN J. GIACONE, PLAINTIFF-APPELLANT,
v.
RICHARD S. SCHWEIKER,*FN* SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE .



Appeal from the United States District Court for the Northern District of Illinois, Western Division. No. 78-C-20092 -- Stanley J. Roszkowski, Judge .

Before Fairchild and Cudahy, Circuit Judges, and Templar,*fn* Senior District Judge.

Author: Cudahy

In this appeal, plaintiff Martin J. Giacone seeks review of a district court order dismissing his complaint for lack of subject matter jurisdiction. The complaint requested judicial review of an administrative decision which denied Giacone's claim for additional retirement benefits under Title II of the Social Security Act (the "Act"). 42 U.S.C. § 401 et seq. (1979). The district court, adopting the findings and recommendations of a magistrate, concluded that Giacone failed to request reconsideration of his claim within the time limitations prescribed by the Social Security Act regulations. As a result, Giacone never obtained a "final decision" of the Secretary after a hearing on his claim. Since such a final decision is a prerequisite to judicial review of the denial of Social Security benefits under 42 U.S.C. § 405(g), the district court granted the Secretary's motion to dismiss Giacone's complaint for lack of subject matter jurisdiction. We reverse with instructions to remand to the Secretary for a new determination on whether Giacone had "good cause" for submitting a tardy request for reconsideration.

I.

On June 14, 1967, Giacone filed a claim for retirement insurance benefits under the Act. The Social Security Administration computed his "primary insurance amount"*fn1 and began to make the appropriate monthly payments to Giacone. Shortly after he began to receive these payments, Giacone returned to work.

He retired for the second time in early 1969 and applied for an increase in his Social Security benefits to reflect his earnings for this additional period of employment. When the Social Security Administration failed to act on Giacone's claim, Giacone contacted his Congressman, Representative John B. Anderson, for assistance. After Anderson's office queried the Director of the Great Lakes Program Service Center of the Social Security Administration as to the status of Giacone's claim, Giacone received an increase in his primary insurance amount.

Giacone subsequently challenged that increase because it was based on a table used to calculate primary insurance amounts in 1967, the year of his first retirement, rather than a similar table used to calculate primary insurance amounts in 1969, the year of his second retirement. Giacone contends that the Secretary's failure to use the 1969 table deprived him of at least $6800 in additional benefits over a period of several years. In a letter dated July 2, 1976, however, the Secretary denied Giacone's claim.

Giacone took the Secretary's letter to his local Social Security office in Rockford, Illinois, seeking an explanation for the Secretary's decision. According to the complaint, a clerk listened to Giacone's claim and told him that the case would be "looked into." Over the next six months, Giacone returned to the Rockford office on six separate occasions in an attempt to follow-up on the status of his claim.*fn2 On each visit, Social Security personnel offered various excuses for their failure to pursue Giacone's claim.*fn3

On January 17, 1977, Giacone filed a formal request for reconsideration of the Secretary's July 2, 1976, denial of his claim for additional benefits. Regulations in effect at that time allowed a claimant six months to request reconsideration of an initial determination by the Secretary. 20 CFR § 404.911 (1976).*fn4 For Giacone, the six month period expired on January 7, 1977. Hence, his request for reconsideration, dated January 17, 1977, was ten days late. On June 2, 1977, the Secretary denied reconsideration of Giacone's claim on the grounds that the request was not timely filed.

Later, on July 7, 1978, Giacone submitted a request for a hearing before an administrative law judge. Under Social Security Administration regulations, an individual has a right to an administrative hearing only after the Secretary has made both an initial and a reconsidered determination in the case. 20 CFR § 404.917 (1979). Since the Secretary had not made a reconsidered determination of Giacone's claim, the ALJ treated the request for a hearing as a request for an extension of time to file for a reconsidered determination. Such extensions are routinely granted when a claimant is able to demonstrate "good cause" for the filing of a tardy request for reconsideration. 20 CFR § 404.953-404.954a (1979). Giacone, an elderly man with an eighth grade education, who pursued his claim through the administrative process without benefit of counsel, was not informed of the "good cause" extension regulations or that "good cause" was even an issue and he failed to present any evidence to the ALJ on this issue. As a result, the ALJ ruled that Giacone failed to establish "good cause" for his tardy request for reconsideration and dismissed the case on the grounds that Giacone had no right to an evidentiary hearing in the absence of a reconsidered determination. Giacone petitioned the Appeals Council for review of the ALJ's ruling, but this petition was similarly denied.

On October 11, 1978, Giacone, acting pro se, filed suit in the United States District Court for the Northern District of Illinois seeking review of the denial of his claim for additional benefits. The Secretary subsequently moved to dismiss the case and the matter was assigned to a magistrate. After reviewing the administrative decision and submissions by the parties, the magistrate concluded that Giacone's failure to submit his request for reconsideration of the Secretary's decision within the six-month time limit precluded judicial review of Giacone's claim. On December 19, 1979, the district court entered an order adopting the magistrate's report and dismissing the complaint for lack of subject matter jurisdiction. After Giacone instituted this appeal, counsel was appointed to represent him before this court.

II.

Title II of the Social Security Act and the regulations which accompany it attempt to create an orderly, and not unduly vexatious, system for administrative and judicial review of the unimaginable number of decisions of claims for retirement and disability benefits filed under the Act. Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977). An individual steps up to the administrative starting line by filing a claim for benefits with the Social Security Administration. The gun sounds with the decision to grant or deny this claim, which is known as the "initial determination" of the Secretary. 20 CFR §§ 404.905-404.907 (1979). The claimant who receives an adverse "initial determination" satisfactorily jumps his first hurdle by filing a request for reconsideration. 20 CFR §§ 404.909-404.913 (1979). The Secretary then acquires discretion to review the merits of the claim for a second time and issue what is impressively denominated a "reconsidered determination." 20 C.F.R. § 404.914 (1979). After obtaining both an initial and reconsidered determination, the dissatisfied claimant, now breaking into full stride, files for an evidentiary hearing before an administrative law judge. 42 U.S.C. § 405(b) (1979); 20 CFR §§ 404.917-404.919 (1979). Before breaking the ribbon at the end of the administrative finish line, the claimant must appeal the ALJ's hearing decision to the Appeals Council, which is the final arbiter and "supreme administrative court" in the agency process. 20 CFR §§ 404.945-404.947a (1979).

Judicial review of individual claims for benefits is permitted only in accordance with the provisions of Section 405(g) of the Act. 42 U.S.C. § 405(h) (1979); Califano v. Sanders, 430 U.S. 99, 97 S. Ct. 980, 51 L. Ed. 2d 192 (1977); Weinberger v. Salfi, 422 U.S. 749, 95 S. Ct. 2457, 45 L. Ed. 2d 522 (1975). Before a federal district court may acquire jurisdiction of an action pursuant to Section 405(g), the claimant must have received a "final decision of the Secretary made after a hearing" to which the claimant was a party. 42 U.S.C. § 405(g) (1979). Although a decision rendered on a claim at each stage of the administrative process is final and binding on the parties,*fn5 the regulations define a "final decision of the Secretary" for the purpose of Section 405(g) as a decision rendered by the Appeals Council which either reviews or denies review of a determination made by an ALJ after an evidentiary hearing on the merits of the claim. 20 CFR §§ 404.940, 404.951 ...


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