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Lichter v. Bowen

decided: March 12, 1987.

RON JAY LICHTER, PLAINTIFF-APPELLANT,
v.
OTIS R. BOWEN, M.D., SECRETARY OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 83 C 3521 - Paul E. Plunkett, Judge.

Cudahy, Easterbrook and Ripple, Circuit Judges.

Author: Cudahy

CUDAHY, Circuit Judge.

The plaintiff, Ronald J. Lichter, appeals from an award of social security disability benefits that began on June 20, 1983; Lichter claims that he was entitled to receive benefits beginning February 21, 1981. We reject Lichter's claim that the Social Security Disability Reform Act of 1984 entitles him to a redetermination of his eligibility. We find, however, that the administrative law judge improperly determined the date of the onset of Lichter's disability, and we remand for a redetermination of the onset date.

I.

Lichter first filed an application for disability benefits on July 14, 1981, claiming that he had been unable to work since February 12, 1981 due to a fractured right femur sustained in a hit-and-run automobile accident. His application was denied both initially and upon reconsideration. On December 29, 1982, his application was again denied following a hearing and de novo consideration by an administrative law judge ("ALJ"). Lichter requested review by the Social Security Administration Appeals Council; his request was denied on March 28, 1983.

Lichter filed a civil action in federal district court. The district court remanded the case to the Secretary of Health and Human Services (the "Secretary") to consider new evidence that Lichter introduced to establish that he suffered from a disabling mental impairment. Pursuant to that remand order and a remand order of the Appeals Council, a second hearing was held on March 16, 1984 before an ALJ. Lichter appeared personally at the hearing and was represented by an attorney. The ALJ issued a recommended decision on July 7, 1984 which found that Lichter was under a disability as defined in the Social Security Act due to a severe mental impairment but that he had been disabled only since June 20, 1983 and not since February 21, 1981 as claimed by Lichter. On September 26, 1984, the Appeals Council approved the ALJ's decision.

Lichter appealed in federal district court the Secretary's determination of the onset date of his disability. On November 27, 1985, the district court granted summary judgment in favor of the Secretary by adopting the magistrate's report and recommendation. Lichter filed a motion for reconsideration in the district court in which he claimed that he was entitled to a redetermination of his eligibility under the standards adopted pursuant to the Social Security Disability Benefits Reform Act of 1984. 98 Pub. L. No. 98-460, 98 Stat. 1794 (codified in scattered sections of 42 U.S.C.). On February 26, 1986, the district court denied Lichter's motion, finding that Lichter was not eligible for a redetermination.

II.

Lichter argues that section 5 of the Social Security Disability Benefits Reform Act of 1984 (the "Reform Act" or the "Act") entitles him to a redetermination of the onset date of his disability under the new regulations adopted pursuant to the Act. We agree with the district court that Lichter "is not eligible for redetermination because his was an initial determination of ineligibility, rather than a continuing eligibility review, and was made on September 26, 1984, prior to the enactment of the Act establishing the moratorium." Lichter v. Heckler, No. 83-C-3521 (N.D. Ill. Feb. 25, 1986) (order denying plaintiff's motion for reconsideration).

Section 5 of the Reform Act is entitled "Moratorium on Mental Impairment Reviews" and orders the Secretary to publish within 120 days of the enactment of the Act new regulations that are "designed to realistically evaluate the ability of a mentally impaired individual to engage in substantial gainful activity in a competitive workplace environment." 98 Stat. at 1801, reprinted in 42 U.S.C. ยง 421 note at 767 (Supp. III 1985). Section 5 also contains explicit directions for the retroactive application of those new regulations. Paragraph (b)(1) and clause two of paragraph (c)(1) apply only to cases involving a possible termination of benefits ("continuing benefit reviews"), that is, where the Secretary has previously found a claimant to be mentally disabled and is reviewing that finding for continued eligibility.*fn1 These provisions, therefore, do not apply to Lichter because the determination in his case was of initial, rather than continuing, eligibility.

A separate provision of section 5 governs the retroactive application of the revised regulations to claimants such as Lichter who are seeking an initial eligibility determination. The first clause of paragraph (c)(1) provides for a redetermination of eligibility under the new criteria for anyone found to be not disabled by reason of a mental impairment where the initial disability determination or reconsideration of or hearing on the initial determination was made or held after the date of the enactment of the Act and prior to the date on which the revised criteria were established by regulation.*fn2 The Reform Act was enacted on October 9, 1984. The Secretary's determination of the onset date of Lichter's disability became final on September 26, 1984, when the Appeals Council approved the ALJ's decision. Because the decision became final prior to the enactment of the Reform Act, Lichter is not eligible for a redetermination under the first clause of paragraph (c)(1).

Finally, paragraph (c)(3) of section 5 is a "catch-all" provision applicable both to claimants who were denied benefits in an initial determination and to claimants whose benefits were terminated.*fn3 Where a denial or termination of benefits occurred between March 1, 1981 and October 9, 1985 (one year after the date of enactment), the claimant may reapply for benefits. Both parties recognize that Lichter was entitled to reapply for benefits pursuant to paragraph (c)(3) and have his claim evaluated under the new regulations. Lichter, however, did not reapply and does not seek a redetermination under paragraph (c)(3). The reason for this seems clear. Benefits awarded under paragraph (c)(3) are limited to one year prior to the date of reapplication.*fn4 Because the earliest possible reapplication date was October 9, 1984 (the date of enactment), Lichter at best could have received benefits only from October 9, 1983. He already had been awarded benefits by the ALJ beginning June 20, 1983. Thus, Lichter had nothing to gain from a redetermination under paragraph (c)(3) and is arguing for a redetermination pursuant only to paragraphs (b)(1) and (c)(1).

Lichter challenges the interpretation of paragraphs (b)(1) and (c)(1) outlined above. Despite the clear wording of the statute to the contrary, he argues that the legislative history behind the Reform Act indicates that the Act treats identically initial determinations and continuing eligibility reviews, and that he is entitled to a redetermination under paragraphs (b)(1) and (c)(1). For support, Lichter relies on the House report that accompanied the bill that ...


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