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JOHNSON v. HECKLER

December 17, 1984

EDNA JOHNSON AND JEROME MONTGOMERY, ON THEIR OWN BEHALF AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
MARGARET HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT.



The opinion of the court was delivered by: Bua, District Judge.

ORDER

Before the Court are defendant's motions to alter or amend the Court's order dated September 19, 1984, pursuant to Fed.R.Civ.P. 59, and to stay the order pending disposition of defendant's Rule 59 motion pursuant to Rule 62. For the reasons stated herein, defendant's motion to alter or amend is denied and its motion to stay is denied for mootness.

I. DISCUSSION

In support of its motion to alter or amend the Court's order dated September 19, 1984, defendant sets forth four grounds: (1) not all members of the plaintiff class sought appropriate review of their disability claims within 60 days of the Secretary's final decision pursuant to 42 U.S.C. § 405(g); (2) not all members of the plaintiff class obtained a final decision from the Secretary and therefore failed to exhaust their administrative remedies; (3) recent Congressional action and case law require reconsideration of the September 19, 1984 order and affirmance of the regulations' validity; and (4) recent Congressional action prevents the Court's order from being applied retroactively on the issue of the combined effect of nonsevere impairments.

A motion for reconsideration serves only to correct manifest errors of law or fact or to present newly discovered evidence. Keene Corp. v. International Fidelity Ins. Co., 561 F. Supp. 656, 665 (N.D.Ill. 1982). Therefore, a motion for reconsideration should not serve as an occasion to tender new legal theories for the first time. Id. at 666.

1. The 60-Day Requirement

Defendant argues that the 60-day provision of Section 205(g) of the Act, 42 U.S.C. § 405(g), and regulations governing the timeliness of administrative appeal, are an absolute time-bar to claims where claimants (i) did not seek administrative review of the initial administrative determination by the state agency that they were not disabled and thereafter permitted more than 60 days to elapse without taking any further action; (ii) did seek reconsideration or an ALJ hearing, but did not pursue the matter further and permitted more than 60 days to elapse without taking any further action, or (iii) exhausted their administrative remedies more than 60 days before this class action was filed but did not seek judicial review pursuant to 42 U.S.C. § 405(g). Plaintiff argues that the 60-day requirement is a statute of limitations, not a jurisdictional bar, and therefore the requirement is waived unless raised as an affirmative defense. Plaintiff concludes that defendant has waived any objection to the 60-day requirement since the Secretary raises it here for the first time. Since the first two arguments under the 60-day requirement hinge on the question of exhaustion of administrative remedies, which will be discussed later, the Court will analyze only the third argument under the 60-day requirement.

Under the Social Security Act, claimants must seek judicial review of final decisions of the Secretary "within sixty days after the mailing . . . of notice of such decision or within such further time as the Secretary may allow." 42 U.S.C. § 405(g) (1982). While the Supreme Court's position on whether the 60-day provision is jurisdictional is not free from doubt, the Court finds that the analysis in City of New York v. Heckler, 742 F.2d 729 (2d Cir. 1984) is persuasive. In City of New York, the Second Circuit Court of Appeals examined the Supreme Court cases dealing with the 60-day provision. In the stay ruling in Heckler v. Lopez, ___ U.S. ___, 104 S.Ct. 221, 222-223, 78 L.Ed.2d 217 (1984)*fn1 (Stevens, J., with whom Blackmun, J., joins, concurring in part and dissenting in part), Justice Stevens reckoned with the issue and concluded that the 60-day requirement is jurisdictional. Although the Secretary apparently had failed to raise the 60-day requirement in the District Court, Justice Stevens declined to find waiver and concurred in maintaining the stay of the Ninth Circuit's judgment insofar as the stay applied to claimants who had not sought administrative or judicial review of their termination decisions 60 days prior to the filing of the complaint.

In contrast to Justice Stevens' opinion in Heckler v. Lopez, supra, in two other cases the Supreme Court has concluded that the 60-day limitation is not jurisdictional. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975). Both Salfi and Eldridge construed the 60-day requirement as a statute of limitations, waivable by the parties. See Mathews v. Eldridge, supra, 424 U.S. at 328 n. 9, 96 S.Ct. at 899 n. 9; Weinberger v. Salfi, supra, 422 U.S. at 763-64, 95 S.Ct. at 2465-66. Notwithstanding his opinion in Lopez, Justice Stevens' separate opinion in Heckler v. Ringer, ___ U.S. ___, 104 S.Ct. 2013, 2028, 2033-36, 80 L.Ed.2d 622, incorporates the Salfi and Eldridge statements to the effect that section 405(g) contains a "statute of limitations" waivable by the parties. Justices Brennan and Marshall also view the 60-day requirement as waivable, Heckler v. Lopez, supra, 104 S.Ct. at 225, 226.

In addition to the Second Circuit, other Courts of Appeals have adopted the view that the 60-day limitation period is not jurisdictional. Lopez v. Heckler, 725 F.2d 1489, 1508 (9th Cir. 1984); Mental Health Ass'n of Minnesota v. Heckler, 720 F.2d 965, 973 n. 19 (8th Cir. 1983). Finally, the Second Circuit concluded that Justice Stevens' opinion in Lopez did not outweigh the majority opinions in Salfi and Eldridge: "In the absence of an authoritative ruling by the Supreme Court to the contrary, we continue to believe that the 60-day requirement is not jurisdictional," City of New York v. Heckler, supra, 742 F.2d at 738.

In the present case, the issue is whether the Secretary made a timely assertion of the 60-day provision as a defense. If the Secretary did not timely assert the defense under either Fed.Rules Civ.P. 8(c) and 12(h)(1), the 60-day provision need not be considered here. Mathews v. Eldridge, supra, 424 U.S. at 328 n. 9, 96 S.Ct. at 899 n. 9; Weinberger v. Salfi, supra, 422 U.S. at 763-764, 95 S.Ct. at 2465-66. The Secretary argues that she made a timely assertion of the 60-day provision as a defense in both her answer to the plaintiffs' amended complaint and her memorandum in opposition to class certification.

After examining both documents, the Court finds that the Secretary did not sufficiently raise the 60-day provision as a defense in order to preserve it. In her answer to plaintiffs' amended complaint, the Secretary merely stated that "plaintiffs have not met the prerequisites to certify this suit as a class action." In her memorandum in opposition to class certification, the Secretary focused only on the alleged failure of all members of the plaintiff class to exhaust their administrative remedies, i.e., obtain a final decision from the Secretary. The Secretary does not discuss the 60-day provision as barring untimely appeals from final decisions. Therefore, since the Secretary did not sufficiently raise the 60-day provision as a defense, it is waived and need not be considered here.

2. Exhaustion of Remedies

Defendant contends that the plaintiff class contains members who have not exhausted their administrative remedies and therefore have not met the threshold requirement of a "final decision" under 42 U.S.C. § 405(g) for an appeal to this Court. The Secretary argues that she has not waived the exhaustion requirement and neither can the Court do so. Plaintiffs counter that it is proper for the Court to waive the exhaustion requirement where, as here, plaintiffs' claims are collateral to the demand ...


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