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Gregory S. Vande Merkt v. Michael J. Astrue

February 7, 2011


The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge


Plaintiff Gregory S. Vande Merkt won a favorable decision from the Social Security Administration on his disability claim and collected benefits for a seventeen-month period ending October 31, 2006. In April 2009, however, the Appeals Council notified Plaintiff that it had reopened his case for further review. In this lawsuit, Vande Merkt challenges the Social Security Administration's reopening of the decision to award him disability benefits. He alleges that doing so exceeds the scope of the SSA's authority, constitutes a denial of due process, and warrants a writ of mandamus halting any further proceedings. Defendant, Michael J. Astrue, Commissioner of the Social Security Administration, has moved to dismiss Plaintiff's complaint, arguing that Plaintiff's administrative remedies have not been exhausted and that there has been no denial of due process. More recently, now that a reexamination hearing has been scheduled, Plaintiff has filed a motion asking the court to stay the upcoming hearing. For the reasons explained below, the court will grant Defendant's motion to dismiss and deny Plaintiff's motion to stay.


Plaintiff filed an application for Social Security disability benefits on November 14, 2005. That application was denied in an initial determination on December 28, 2005. (Mot. to Dismiss [17], Declaration of Dennis V. Ford, Acting Chief of Court Case Preparation and Review Branch 1 of the Office of Appellate Operations, at 2.) Plaintiff appealed that ruling, and an administrative law judge ("ALJ") found in his favor on March 27, 2008 after a hearing at which Plaintiff and a vocational expert testified. (Mot. to Dismiss, Ex. 2 at 1.) Plaintiff suffered from upper back pain and a swollen right knee, and a doctor found vertebral osteomyelitis and septic arthritis in his right knee. He underwent knee and spinal surgery in August 2005. (Id. at 4.) The ALJ found that Plaintiff was indeed disabled within the meaning of the Social Security Act from May 15, 2005 to October 31, 2006, and that he did not engage in any "disqualifying substantial gainful activity" during that time period. (Id. at 3.) On May 7, 2008, the ALJ filed an amended decision to clarify that Plaintiff "is eligible for a trial work period . . . after the closed period." (Mot. to Dismiss, Ex. 3 at 3, 5.)

On April 24, 2009, more than one year after the ALJ's favorable ruling, the Appeals Council informed Plaintiff that it had reopened his case and intended to send it back to an ALJ "for more action and a new decision." (Ex. 4 at 1.) Citing 20 C.F.R. § 404.989(a)(3), the Appeals Council explained that it was reopening the case for "good cause . . . because the evidence considered in making the determination clearly shows that there was an error."*fn1 (Id. at 2.) Specifically, the Appeals Council pointed to notes in the record from DuPage Medical Group, dated April 12, 2006 and December 2006, showing that Plaintiff was working during the disability period. (Id. at 3.) In addition, the Appeals Council noted that Plaintiff reported earnings of $10,188.99 for 2006. (Id.) "Thus, there was evidence before the Administrative Law Judge indicating that you returned to work within 12 months of the alleged onset date. Despite those work references, the Administrative Law Judge did not take the action necessary to resolve whether that work was substantial gainful activity. . . . Thus, the evidence considered in making the decision clearly shows there was an error." (Id.) The Appeals Council announced that it would remand the case to an ALJ unless Plaintiff presented evidence that he had not worked, or that any work he engaged in did not amount to substantial gainful activity. (Id.)

Plaintiff's attorney responded to the Appeals Council, arguing that good cause did not exist to reopen the case. (Ex. 5 at 2.) As summarized in the Appeals Council's June 2009 order, Plaintiff "argued that the Appeals Council's reopening notice refers to the written record, but that [in reaching her decision to award benefits] the Administrative Law Judge [had] considered more than the written record; she 'conducted a detailed inquiry into the relevant earnings for the relevant period, including testimony from the claimant and discussion with claimant's attorney.'" (Id.) On June 11, 2009, the Appeals Council remanded Plaintiff's case to an ALJ, rejecting the argument that there was not good cause to do so. (Ex. 5 at 2.)

On August 9, 2009, Plaintiff filed his complaint in this court, seeking a writ of mandamus. He asks this court to direct the Social Security Administration to cease further action on his case and to treat the amended May 7, 2008 decision awarding disability benefits as final. (Compl. [1] at 3-6.) Defendant filed a motion to dismiss on December 16, 2009, arguing that Plaintiff failed to exhaust his administrative remedies as required by 42 U.S.C. § 405(g). (Mot. to Dismiss at 2.) Plaintiff filed a motion to stay further Social Security proceedings on December 22, 2009, in order for the court to resolve Plaintiff's complaint and the motion to dismiss. (Mot. to Stay [20].) The court denied that motion to stay without prejudice on January 5, 2010, (Order [22]), but now that a hearing has been set for February 16, 2011, Plaintiff has renewed his motion for a stay. (Mot. to Stay [28] ¶ 11.) Plaintiff argues that, as stated in his initial complaint, the "SSA had a clear duty to allow the decision of its ALJ to stand, once the [sixty days] provided under SSA's regulations [20 C.F.R. § 404.969(a)] for Appeals Council own motion review had expired, and that the Appeals Council acted outside its authority by purportedly reviewing the ALJ's decision outside that time limit." (Id. ¶ 7.) Plaintiff also argues that the Appeals Council "has denied him his due process rights." (Id.)


I. Motion to Dismiss

Defendant argues that Plaintiff's complaint should be dismissed because he has not received a final decision of the Commissioner and therefore has not exhausted the SSA's administrative procedure, a prerequisite for judicial review. (Mot. to Dismiss at 2.) Judicial review of Social Security proceedings is governed by 42 U.S.C. § 405(g), which allows review only "after any final decision of the Commissioner of Social Security." Defendant contends that "the reopening by the Appeals Council is not a final decision and is not judicially reviewable." (Mot. to Dismiss at 4.) The case Defendant cites for this proposition deals with the reviewability of a decision not to reopen proceedings, which courts have unanimously found to be unreviewable. Bolden v. Bowen, 868 F.2d 916, 918 (7th Cir. 1989).

Plaintiff argues that the Appeals Council's decision is subject to judicial review, and the court's mandamus power, because "the Appeals Council acted outside the scope of the authority conferred upon it by SSA's regulations in purporting to re-open the ALJ's favorable decision in this case." (Pl.'s Response to Mot. to Dismiss at 2.) Specifically, Plaintiff argues that the Appeals Council does not have "good cause" to reopen the proceedings, as required by the regulation upon which it relies for reopening. (Id. at 4.) Plaintiff does not directly engage Defendant's exhaustion argument, instead arguing that he "has exhausted his administrative remedies on the re-opening issue by presenting his arguments against re-opening to the Appeals Council." (Id. [emphasis added].) Thus, Plaintiff argues, "[t]he issue at this stage is whether the Appeals Council acted within the scope of its authority by re-opening." (Id.)

In many instances, courts have reviewed the decision to reopen a Social Security disability award--but have done so only after the ultimate disposition of the case by either the ALJ or Appeals Council. See, e.g., Heins v. Shalala, 22 F.3d 157, 161 (7th Cir. 1994) (reviewing decision to reopen after the Appeals Council declined to review ALJ decision denying benefits); Cole v. Barnhart, 288 F.3d 149, 150 (5th Cir. 2002) (finding jurisdiction to review whether a case was reopened for "good cause," after an ALJ reopened and withdrew decision granting benefits); Cieutat v. Bowen, 824 F.2d 348, 358 n. 15 (5th Cir. 1987) ("this Court should have jurisdiction over [the] challenge to the Appeals Council's reopening of his case inasmuch as the reopening forms the basis for the denial of benefits"); Montes v. Secretary of Health and Human Services, 16 F.3d 416 (Table), No. 93-2273, 1994 WL 44840, at *1 (10th Cir. Feb. 16, 1994) ("The Secretary's decision to reopen a previously denied claim for benefits is discretionary, and therefore, a non-final decision unreviewable under 405(g).").

As the Sixth Circuit explained,

Judicial review of an alleged abuse of discretion in reopening a prior determination in which benefits were granted does not implicate the concerns articulated by the Supreme Court in [Califano v. Sanders, 430 U.S. 99 (1977) (finding decision not to reopen unreviewable)]. Unlike the decision to reject a claimant's request to reopen his case, the Secretary's decision to reopen Slone's case resulted in a hearing and a final decision on the merits. Hence, the Secretary's decision produced the particular type of agency action that is subject to judicial review under ยง 405(g). Further, by requiring Slone to challenge the propriety of the decision to ...

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