Reply Brief — Ricky Lee Smith, Petitioner v. Nancy A. Berryhill, Acting Commissioner of Social Security

No. 17-1606

In the Supreme Court of the United States

RICKY LEE SMITH, PETITIONER

v.

NANCY A. BERRYHILL,

ACTING COMMISSIONER OF SOCIAL SECURITY

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

REPLY BRIEF FOR THE RESPONDENT

NOEL J. FRANCISCO

Solicitor General

Counsel of Record

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

TABLE OF CONTENTS

Page

I.

A Social Security Appeals Council order dismissing

a request for review as untimely is judicially

reviewable under 42 U.S.C. 405(g) ....................................... 4

A. Section 405(g) does not prohibit courts

from reviewing whether a claimant

exhausted administrative remedies ..................... 4

B. The agency issued a final decision after a

hearing .................................................................... 7

C. Judicial review of Appeals Council dismissal

orders will not impose an undue burden on

federal courts........................................................ 13

II. Judicial review of an Appeals Council dismissal

order is limited to the stated rationale for the

agency’s decision ............................................................ 16

TABLE OF AUTHORITIES

Cases:

Bloodsworth v. Heckler, 703 F.2d 1233

(11th Cir. 1983) ............................................................ 2, 9, 14

Bowen v. City of New York, 476 U.S. 467

(1986) .................................................................7, 8, 18, 19, 21

Califano v. Sanders, 430 U.S. 99 (1977) ........................ 11, 12

Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir. 1966) ........... 11

Casey v. Berryhill, 853 F.3d 322 (7th Cir. 2017) ................ 19

Chevron U.S.A. Inc. v. Natural Res. Def. Council,

Inc., 467 U.S. 837 (1984) ..................................................... 12

FTC v. Indiana Fed’n of Dentists,

476 U.S. 447 (1986).............................................................. 20

Heckler v. Day, 467 U.S. 104 (1984)..................................... 13

Heckler v. Ringer, 466 U.S. 602 (1984) .............................. 4, 5

(I)

II

Cases—Continued:

Page

Herchak v. U.S. Dep’t of Labor, 125 Fed. Appx. 102

(9th Cir. 2005) ........................................................................ 5

INS v. Orlando Ventura, 537 U.S. 12 (2002) ...................... 20

Mathews v. Eldridge, 424 U.S. 319 (1976) .................... 2, 8, 9

Quarles v. Colvin, No. 15-572, 2016 WL 4250399

(S.D. Ala. Aug. 10, 2016)..................................................... 19

Ramey v. Merit Sys. Prot. Bd.,

476 Fed. Appx. 253 (Fed. Cir. 2012) ................................... 5

Schweiker v. Chilicky, 487 U.S. 412 (1988) ......................... 13

SEC v. Chenery Corp., 318 U.S. 80 (1943)....................... 3, 20

Shalala v. Schaefer, 509 U.S. 292 (1993) ............................... 6

Sims v. Apfel, 530 U.S. 103 (2000) ............................. 7, 13, 20

Stovic v. Railroad Ret. Bd., 826 F.3d 500

(D.C. Cir.), cert. denied, 137 S. Ct. 399 (2016) ........... 11, 12

Sullivan v. Hudson, 490 U.S. 877 (1989) .............................. 6

T-Mobile S., LLC v. City of Roswell,

135 S. Ct. 808 (2015) ........................................................... 21

Townsend v. Secretary of Health & Human Servs.,

762 F.2d 40 (6th Cir. 1985) ................................................. 10

United States v. Gonzales, 520 U.S. 1 (1997) ...................... 16

Utility Air Regulatory Grp. v. EPA,

573 U.S. 302 (2014)........................................................ 12, 13

Weinberger v. Salfi, 422 U.S. 749 (1975) ......................... 2, 21

Whitzell v. Astrue, 589 F. Supp. 2d 100

(D. Mass. 2008) .................................................................... 19

Your Home Visiting Nurse Servs., Inc. v. Shalala,

525 U.S. 449 (1999).............................................................. 11

Statutes and regulations:

5 U.S.C. 7703(a)(1) ................................................................... 5

42 U.S.C. 405 ........................................................................ 2, 6

42 U.S.C. 405(a) ......................................................... 10, 16, 17

III

Statutes and regulations—Continued:

Page

42 U.S.C. 405(b) ..................................................................... 10

42 U.S.C. 405(g) ............................................................ passim

42 U.S.C. 405(h) ..................................................................... 10

42 U.S.C. 1383 ........................................................................ 17

42 U.S.C. 1383(c)(1)(A) .......................................................... 10

42 U.S.C. 1383(d)(1) ............................................................... 17

49 U.S.C. 42121(b)(3) ............................................................... 6

49 U.S.C. 42121(b)(4) ............................................................... 6

20 C.F.R.:

Section 404.900(b) (1999) ................................................ 13

Section 416.1400(a) .......................................................... 12

Section 416.1468 .............................................................. 17

Section 416.1468(a) .......................................................... 18

Section 416.1470 .............................................................. 21

Section 416.1470(a)(5) ..................................................... 14

Section 416.1470(b) .......................................................... 10

Section 416.1475 .............................................................. 10

Section 416.1476(b) .......................................................... 10

Miscellaneous:

45 Fed. Reg. 52,078 (Aug. 5, 1980) ....................................... 17

70 Fed. Reg. 11,420 (Mar. 8, 2005) ....................................... 17

United States Courts:

Statistical Tables for the Federal Judiciary,

https://www.uscourts.gov/statistics-reports/

analysis-reports/statistical-tables-federaljudiciary (last visited Mar. 6, 2019).......................... 14

IV

Miscellaneous—Continued:

Page

U.S. District Courts—Civil Cases Commenced,

by Nature of Suit and District, During the

12-Month Period Ending June 30, 2017,

https://www.uscourts.gov/sites/default/files/

data_tables/stfj_c3_630.2017.pdf (last visited

Mar. 6, 2019) ............................................................... 14

U.S. District Courts—Civil Cases Commenced,

by Nature of Suit and District, During the

12-Month Period Ending June 30, 2016,

https://www.uscourts.gov/sites/default/files/

data_tables/stfj_c3_630.2016.pdf (last visited

Mar. 6, 2019) ............................................................... 15

In the Supreme Court of the United States

No. 17-1606

RICKY LEE SMITH, PETITIONER

v.

NANCY A. BERRYHILL,

ACTING COMMISSIONER OF SOCIAL SECURITY

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

REPLY BRIEF FOR THE RESPONDENT

The government’s opening brief explains that, when

the Social Security Administration (SSA) Appeals

Council dismissed petitioner’s request for review as

untimely, the agency issued its “final decision * * *

after a hearing” on petitioner’s claim for benefits, and

the Appeals Council dismissal order is therefore subject

to judicial review under 42 U.S.C. 405(g). That result

follows from the undisputed facts that the dismissal

order marked the agency’s last word on petitioner’s

application for Social Security benefits, that an Administrative Law Judge (ALJ) held a hearing on petitioner’s application, and that SSA was not required to

conduct another oral hearing to resolve the timeliness

of petitioner’s request for Appeals Council review. The

text of Section 405(g), its place in the structure of the

Social Security Act, this Court’s precedents, and basic

principles of administrative law all confirm that the

(1)

2

Appeals Council’s dismissal order was a reviewable

final decision.

The Court-appointed Amicus Curiae (Amicus) urges,

at bottom, that “[t]he agency and this Court have

always understood the statute to require ‘exhaustion of

the administrative remedies provided.’ ” Br. 14 (quoting

Mathews v. Eldridge, 424 U.S. 319, 327 (1976)). But

that observation shows why an Appeals Council order

dismissing a request for review as untimely is judicially

reviewable: the question for the courts in petitioner’s

case is whether he properly attempted to exhaust his

administrative remedies, and that type of question is

ordinarily resolved by courts, not by agencies in their

unreviewable discretion. See Gov’t Br. 30-31. Notably,

several courts have reviewed administrative exhaustion

determinations pursuant to other statutes that, like the

Social Security Act, authorize judicial review only after

the agency’s “final” decision. Ibid. The Amicus does

not identify any statutory text that compels a departure

from standard administrative practice and forecloses

judicial review of the limited question whether a claimant properly exhausted administrative procedures.

Section 405 does empower SSA to determine the steps

that precede the agency’s final decision. See Weinberger v. Salfi, 422 U.S. 749, 766 (1975). But it does

not authorize the agency to determine by regulation

that, because of its own conclusion regarding an

untimely filing, its decision will never become final. See

Bloodsworth v. Heckler, 703 F.2d 1233, 1239 (11th Cir.

1983) (if Appeals Council dismissal orders were not

reviewable, then “the claimant would never have a ‘final’

decision” and would be left “permanently in limbo”).

The Amicus’s concern (Br. 36) that authorizing judicial review of Appeals Council dismissal orders would

3

open the “floodgate” on federal courts is unfounded,

because Section 405(g) and standard administrative-law

principles establish that judicial review in petitioner’s

case would be limited to the ground the agency gave for

its decision, and would be highly deferential, asking

only whether the agency made findings supported by

substantial evidence and did not abuse its discretion.

See Gov’t Br. 29-30. Contrary to petitioner’s contention

(Br. 24-25), a court’s authority in this case would not

include review of his ultimate entitlement to benefits.

See SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“The

grounds upon which an administrative order must be

judged are those upon which the record discloses that

its action was based.”); cf. 42 U.S.C. 405(g) (“the court

shall review only the question of conformity with [the

agency’s] regulations”). Those limitations on judicial

review are likely to dissuade many claimants from pursuing litigation over Appeals Council dismissal orders.

And indeed, experience in the Eleventh Circuit, which

has allowed judicial review of Appeals Council dismissal

orders since Bloodsworth in 1983, has not shown an

unusual volume of Social Security cases.

The Amicus’s fallback argument (Br. 40-47) is that

the Court should defer to SSA’s existing regulations.

But for all the reasons given here and in the government’s opening brief, accepting judicial review when an

ALJ held a hearing and the agency’s proceedings are

indisputably over is the only reasonable construction of

Section 405(g).

4

I. A SOCIAL SECURITY APPEALS COUNCIL ORDER

DISMISSING A REQUEST FOR REVIEW AS UNTIMELY IS

JUDICIALLY REVIEWABLE UNDER 42 U.S.C. 405(g)

The government’s opening brief explains (at 26-28,

33-37) why the Appeals Council dismissal order in petitioner’s case was a “final decision * * * made after a

hearing,” and therefore subject to judicial review under

42 U.S.C. 405(g). Applying the straightforward meaning of the statutory text, SSA’s decision was final

because it is undisputed that the agency will take no further action on petitioner’s benefits application. And

that decision was made after a hearing by an ALJ

regarding petitioner’s entitlement to benefits. The

Amicus essentially urges a unique construction of the

terms in Section 405(g), on the ground that SSA processes a very large number of claims each year. But

that policy rationale ultimately has no foothold in the

statutory text.

A. Section 405(g) Does Not Prohibit Courts From Reviewing

Whether A Claimant Exhausted Administrative Remedies

The Amicus repeatedly emphasizes that, due in part

to the size of the Social Security program, Congress

required claimants to exhaust administrative remedies

before filing in court. Amicus Br. 1-2, 4-6, 14, 16-19.

The Amicus argues that Congress in Section 405(g)

placed limitations on judicial review in order to avoid a

“dual * * * or duplicate administration of the law,” id.

at 5-6 (quoting legislative history of the Social Security

Act) (citation omitted), and to prevent “overly casual or

premature judicial intervention” in the administrative

system, id. at 18-19 (quoting Heckler v. Ringer, 466 U.S.

602, 627 (1984)). But those premises are not at issue in

this case, which is instead about a court’s authority to

decide a dispute over administrative exhaustion.

5

Petitioner’s claim for judicial review does not raise

any prospect of dual or duplicate administration, or

premature judicial intervention, because the agency’s

proceedings on his benefits application are complete.

Nor does the government’s interpretation of Section

405(g) call into doubt the need for Social Security claimants to exhaust administrative remedies. Petitioner

sought a ruling by the district court that he did properly

exhaust his remedies in the agency. See J.A. 46-47. In

Ringer, this Court rejected judicial review because

three of the plaintiffs “stood the chance of prevailing in

administrative appeals,” and a fourth had not yet submitted a reimbursement claim to the agency. 466 U.S.

at 627. Petitioner, by contrast, submitted and pursued

his claim for benefits through SSA, and at this point—

as all agree—he cannot obtain administrative relief

without a court’s vacatur of the Appeals Council’s dismissal order. The Amicus’s argument is not that petitioner sought judicial review too soon; it is that petitioner has no opportunity at all to have a court review

whether he properly pursued administrative relief.

The Amicus’s rule would be an outlier. He does not

dispute the government’s showing (Gov’t Br. 30-31) that

courts have routinely undertaken judicial review of

administrative findings of untimeliness, including pursuant to other statutes that, like the Social Security Act,

authorize judicial review only after the agency’s “final”

decision. See also, e.g., Ramey v. Merit Sys. Prot. Bd.,

476 Fed. Appx. 253, 255-256 (Fed. Cir. 2012) (per

curiam) (reviewing decision of Merit Systems Protection Board finding that petitioner’s administrative

appeal was untimely, pursuant to statute authorizing

judicial review of “a final order or decision of ” the

Board, 5 U.S.C. 7703(a)(1)); Herchak v. U.S. Dep’t of

6

Labor, 125 Fed. Appx. 102, 103-107 (9th Cir. 2005) (reviewing decision of Labor Department Administrative

Review Board finding that petitioner’s administrative

appeal from ALJ decision was untimely, pursuant to

statute authorizing judicial review of “a final order” of

the agency, 49 U.S.C. 42121(b)(3) and (4)). In fact, the

Amicus does not identify any instance outside of Section

405 (or other statutes incorporating it) in which courts

have interpreted a provision for judicial review of an

agency’s “final decision” to bar review of an agency’s

timeliness conclusion. And the Amicus provides no persuasive basis for concluding that Congress intended the

term “final decision” in Section 405(g) to mean something different from how that term is used throughout

administrative law.

Contrary to the Amicus’s contention (Br. 18-19), this

Court’s decision in Sullivan v. Hudson, 490 U.S. 877

(1989), does not support giving Section 405(g)’s text a

uniquely narrow construction that would bar judicial

review of “disputes over the rules of ” SSA’s administrative process even after the agency’s decision is final.

The Amicus invokes Hudson’s observation that Congress created a “somewhat unusual” provision for judicial review of SSA decisions. 490 U.S. at 885. But that

observation concerned the availability of attorney’s fees

under the Equal Access to Justice Act (EAJA) and the

unusual terms of sentence six of Section 405(g), which

creates a specialized procedure for an interlocutory

remand to the agency for further fact finding or proceedings while the district court retains jurisdiction

over the case. See Shalala v. Schaefer, 509 U.S. 292,

299-300 (1993) (Hudson’s allowance of EAJA fees was

limited to a “narrow class” of cases in which the district

court may remand and retain jurisdiction). Hudson

7

does not support the Amicus’s position in this case,

which does not involve sentence-six remands or attorney’s fees under the EAJA.

B. The Agency Issued A Final Decision After A Hearing

1. SSA’s decision was final. The Amicus does not

dispute that SSA’s proceedings in petitioner’s case are

over, and instead contends that “ordinary usage” and

“judicial usage” indicate that the term “final decision”

in Section 405(g) is limited to SSA decisions after complete exhaustion of administrative remedies. Amicus

Br. 21-23 (citing, e.g., Bowen v. City of New York,

476 U.S. 467, 482 (1986); Sims v. Apfel, 530 U.S. 103,

107 (2000); Gov’t Br. at 18-19, Mathews v. Sanders,

No. 75-1443 (Sept. 1976)). But each of those authorities

simply stated (correctly) that a claimant must proceed

through the entire administrative process in order to

receive judicial review of the “merits” of his “claim for

benefits.” Gov’t Br. at 18, Sanders, supra (No. 75-1443)

(emphasis added). Petitioner’s request for judicial

review is consistent with that requirement because the

appropriate question for the district court in this case is

whether his request for Appeals Council review was

timely, not whether he is entitled to benefits. None of

the authorities cited by the Amicus suggested that an

Appeals Council order conclusively resolving a benefits

application on a procedural ground is something other

than a “final decision.” See id. at 19 (arguing that the

term “final decision” does not include “post-adjudication

refusals by the Secretary to reopen closed matters”). 1

The government’s brief in Sims, supra, No. 98-9537 (Feb. 2000),

cited by the Amicus (Br. 25-26), similarly concerned the requirements necessary to obtain judicial review on the merits. The Amicus also cites (Br. 25-26) the government’s brief in City of New York,

1

8

The Amicus defends his interpretation of the term

“final decision” by arguing (Br. 20-21 & n.6) that finality

is an “ ‘intensely practical’ concept,” citing this Court’s

decision in Eldridge, 424 U.S. at 331 n.11, among others.

But most of the cases cited concerned whether an

administrative decision was “final” notwithstanding the

absence of an ALJ hearing or review by the Appeals

Council, or else whether to excuse some other deficiency in the underlying proceedings. In Eldridge, for

example, the Court considered whether SSA had issued

a final decision before there was an ALJ hearing or

Appeals Council review, thereby permitting a district

court to consider the claimant’s constitutional argument

that he was entitled to an ALJ hearing before his benefits were terminated. See id. at 330-332. It was in that

context that this Court considered “the consequences of

deferment of judicial review.” Id. at 331 n.11. The Amicus’s position here, however, is not that judicial review

should be deferred, but that judicial review should not

be available to petitioner at all. And this case involves

the availability of judicial review where the claimant has

had an ALJ hearing and received a final disposition of

his claim for benefits after requesting Appeals Council

review.

The Amicus also relies heavily (Br. 1-2, 24-25, 41) on

SSA’s authority, recognized by this Court, to specify

exhaustion requirements for the administrative process. But again, petitioner does not challenge those

requirements; the relevant question in this case is

instead whether petitioner complied with them. The

supra, No. 84-1923 (Dec. 1985), but that case concerned whether to

excuse incomplete exhaustion for certain claimants, and this Court

held that exhaustion should be treated as waived under the particular

circumstances presented there. See 476 U.S. at 482-486.

9

authority that Congress granted the agency “to determine when finality has occurred,” Amicus Br. 24 (quoting Eldridge, 424 U.S. at 330) (emphasis added), does

not include the authority to cut off a claimant’s statutory right to judicial review by saying that SSA’s decision in a particular case will never become final. See

Bloodsworth, 703 F.2d at 1239.

2. SSA’s decision was made after a hearing. The

Amicus acknowledges (Br. 34) that the Appeals Council

order dismissing petitioner’s request for review was

issued after a hearing by an ALJ on petitioner’s benefits application. The Amicus’s response (Br. 34-35) is

that Section 405(g) does not permit judicial review of

“collateral” orders that occur after an ALJ hearing.

But the text of Section 405(g) depends on whether the

agency’s decision after a hearing is final. And in any

event, when petitioner sought Appeals Council review

after an ALJ hearing, the Appeals Council’s finding of

untimeliness was the basis for its final disposition of

petitioner’s claim, not collateral to it. This Court can

resolve this case by holding simply that, when an ALJ

has held a hearing on an application for Social Security

benefits, judicial review is available after the agency

renders its final decision.

The Amicus objects (Br. 34) that the Appeals Council

did not hold an oral hearing like the one presided over

by an ALJ before dismissing petitioner’s request for

review as untimely. The Amicus contends that Section

405(g)’s “ ‘after a hearing’ requirement must be interpreted as referring solely to hearings required by statute,” and that the statute compels a hearing “ ‘only’ ”

when the claimant timely requests a hearing before an

ALJ after an adverse initial determination. Amicus Br.

10

28 (citation omitted); see 42 U.S.C. 405(b). That argument, based on the absence of a mandatory ALJ-type

hearing by the Appeals Council, would bar judicial

review of all Appeals Council decisions, on whatever

ground. Consider a case where an ALJ determines that

a claimant is entitled to benefits, but the Appeals Council overturns that decision on the merits based on its

review of the record. See 20 C.F.R. 416.1470(b),

416.1475; see also, e.g., Townsend v. Secretary of Health

& Human Servs., 762 F.2d 40, 41 (6th Cir. 1985). Surely

the Appeals Council’s final decision in that case would

be subject to judicial review under Section 405(g), see

id. at 43-44, notwithstanding the fact that the Appeals

Council was not required by statute to hold an oral hearing to come to its decision. See 20 C.F.R. 416.1476(b)

(Appeals Council has discretion whether to permit oral

argument). Presumably the Amicus would also agree

that the Appeals Council’s decision in such a case would

be binding and unreviewable “except as * * * provided”

in Section 405(g), even though those requirements are

triggered when SSA’s “findings and decision” were

made “after a hearing,” 42 U.S.C. 405(h). See Amicus

Br. 16 (emphasizing the limits on judicial review

imposed by Section 405(h)).

The Act vests in the Commissioner the authority to

determine what procedures should be used by the

Appeals Council in making its decision. See 42 U.S.C.

1383(c)(1)(A) (The Commissioner is “authorized, on the

Commissioner’s own motion, to hold such hearings and

to conduct such investigations and other proceedings as

the Commissioner may deem necessary or proper.”);

see also 42 U.S.C. 405(a) and (b). Those discretionary

choices do not disturb the claimant’s entitlement to

judicial review after the agency gives its final decision.

11

The Amicus argues (Br. 24, 28-34) that its interpretation of Section 405(g), which turns on whether a hearing was required by statute, is supported by this Court’s

decisions in Califano v. Sanders, 430 U.S. 99 (1977), and

Your Home Visiting Nurse Services, Inc. v. Shalala,

525 U.S. 449 (1999), as well as the court of appeals’

decision in Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir.

1966) (Friendly, J.). But none of those cases addressed

whether a court is barred from reviewing an Appeals

Council decision on a non-merits, procedural ground

like timeliness when the claimant has had no prior

opportunity for judicial review. Instead, all three cases

involved claimants who, having previously declined to

take advantage of their opportunity for judicial review

of an adverse decision, later sought unsuccessfully to

reopen their cases before the agency. See Sanders,

430 U.S. at 102-103; Your Home, 525 U.S. at 451; Cappadora, 356 F.2d at 2-3. This Court held that a discretionary denial of reopening, after the claimant has

already been afforded an opportunity for judicial

review, is not a “final decision * * * made after a hearing,” 42 U.S.C. 405(g), but is instead “the refusal to

make a new determination,” Your Home, 525 U.S. at

453; see Sanders, 430 U.S. at 108-109. Central to the

Court’s analysis was the fact that the statutes at issue

did not require the agency to provide a reopening procedure at all. See Sanders, 430 U.S. at 108; Your Home,

525 U.S. at 454 (noting that “[t]he right of a provider to

seek reopening exists only by grace of the Secretary”);

see also Cappadora, 356 F.2d at 4-5. 2

Stovic v. Railroad Retirement Board, 826 F.3d 500 (D.C. Cir.)

(Kavanaugh, J.), cert. denied, 137 S. Ct. 399 (2016), relied on by the

Amicus (Br. 33-34), similarly concerned an administrative refusal to

reopen a prior final decision. 826 F.3d at 501. The court of appeals

2

12

This Court’s decision in Sanders stands for the proposition that, after a Social Security claimant has completed the administrative process and been afforded an

opportunity for judicial review under 42 U.S.C. 405(g),

the agency is permitted to create “an additional opportunity” for administrative proceedings that do not

involve a hearing and do not come with a second chance

at judicial review. 430 U.S. at 109. But this case is

starkly different. Petitioner did not attempt to obtain

the benefit of a second administrative process; the

Appeals Council dismissal order was the final step in

SSA’s first adjudication of his claim for benefits. See

20 C.F.R. 416.1400(a). Because of that critically different posture, each of the reasons this Court gave for the

results in Sanders and Your Home is inapplicable here.

See Gov’t Br. 38-40. Nothing in Sanders suggests

that judicial review of a final decision on a benefits

application—as opposed to a reopening request—is

foreclosed simply because the Appeals Council ruled on

a procedural ground.

3. SSA’s existing regulations do not warrant deference. The Amicus contends (Br. 3, 12, 15, 40-47)

that this Court should defer to the interpretation

of 42 U.S.C. 405(g) in the agency’s regulations under

Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984). As we have explained,

however (Gov’t Br. 20-21), after reexamining the issue,

the government has concluded that the construction of

Section 405(g) adopted by SSA’s regulations and

defended by the Amicus is “ ‘inconsistent with the

design and structure of the statute as a whole.’ ” Utility

concluded that the agency’s decision was reviewable in light of textual differences between the statute at issue and the Social Security

Act. Id. at 503-505.

13

Air Regulatory Grp. v. EPA, 573 U.S. 302, 321 (2014)

(citation and brackets omitted). “Even under Chevron’s

deferential framework, agencies must operate ‘within

the bounds of reasonable interpretation.’ ” Ibid. (citation

omitted). The regulations’ construction of 42 U.S.C.

405(g) depends on the propositions that SSA’s decision

in petitioner’s case was not “final” even though the

agency’s proceedings were over, or that SSA’s decision

was not “made after a hearing” even though an ALJ

held a hearing. The government has concluded that

those are not reasonable constructions of Section

405(g), when read in the context of the statutory scheme

and broader principles of administrative law.

C. Judicial Review Of Appeals Council Dismissal Orders

Will Not Impose An Undue Burden On Federal Courts

The Amicus urges (Br. 1) that Section 405(g) should

be construed to forbid judicial review of exhaustion

questions in order to avoid “engulfing the federal

courts” in Social Security cases (and Medicare cases,

which also incorporate Section 405). See also Amicus

Br. 4-5 (noting that SSA processes millions of claims

each year), 9-10, 36-40, 44-45. That argument falls short

because even as Congress balanced the need for efficiency and fairness in Social Security cases, it preserved judicial review as a backstop. The most

important way by which SSA limits the number of Social

Security cases that arrive in federal court is affording

claimants an “unusually protective multi-step process

for the review and adjudication of disputed claims.”

Schweiker v. Chilicky, 487 U.S. 412, 424 (1988) (brackets omitted) (quoting Heckler v. Day, 467 U.S. 104, 106

(1984)). That administrative process is conducted “in an

informal, nonadversary manner,” Sims, 530 U.S. at 111

(opinion of Thomas, J.) (quoting 20 C.F.R. 404.900(b)

14

(1999)), and includes the Appeals Council, which both

exercises appellate-style review and can consider new

evidence from the claimant in some circumstances.

20 C.F.R. 416.1470(a)(5); see also Amicus Br. 18 (noting

that “the inquisitorial social security process boasts

powerful protections for claimants”). In the rare case

in which SSA’s conclusion regarding the timeliness of a

request for Appeals Council review is not supported by

substantial evidence, the Amicus provides no persuasive reason why Congress would have barred a court

from correcting that error so that the administrative

process can resume.

The Amicus’s “floodgate concerns” (Br. 36) are also

not supported by the experience of the Eleventh Circuit, which has held since 1983 that Appeals Council dismissal orders are subject to judicial review. Bloodsworth, supra. Statistics from the Administrative Office

of the United States Courts show that, from 2001 to

2018, the percentage of Social Security cases filed in district courts in the Eleventh Circuit, as a percentage of

all civil cases in that Circuit, was comparable to the

national average. 3 For example, for the 12 months preceding June 30, 2017, Social Security cases comprised

6.69% of all civil cases filed within the Eleventh Circuit,

and 6.98% of all cases nationwide. 4 The year before

that, Social Security cases were 5.30% of the Eleventh

3

https://www.uscourts.gov/statistics-reports/analysis-reports/

statistical-tables-federal-judiciary. The Administrative Office’s statistics are compiled twice annually and available online from 2001

onward. Ibid. For the “June” report in each year, Table C-3 shows

“Civil Cases Filed, by Jurisdiction, Nature of Suit, and District”

over the preceding 12 months. Ibid.

4

https://www.uscourts.gov/sites/default/files/data_tables/stfj_c3_

630.2017.pdf

15

Circuit’s civil filings, compared to 6.34% nationally. 5 The

Eleventh Circuit simply has not seen the rush of additional Social Security claims predicted by the Amicus.

Whether judicial review would be available for any

other type of SSA dismissal order (Amicus Br. 36-38),

or for a decision of any other agency (Amicus Br. 38-40),

depends on the particular features of the administrative

ruling at issue and the particular text of the relevant

statutory regime. Those questions are not before the

Court in this case, and some are the subject of disagreement among the lower courts, as the Amicus acknowledges. In any event, where Section 405(g) applies, the

government’s submission is modest: when the agency

has given its last word on an administrative claim, its

decision is “final,” and where an ALJ hearing occurred

and an oral hearing is not required to resolve the particular procedural dispute at issue, the agency’s decision was “made after a hearing.” 42 U.S.C. 405(g).

The court of appeals erred, therefore, in concluding

that petitioner’s suit under Section 405(g) should be dismissed without any review of whether he properly

exhausted administrative remedies. 6

https://www.uscourts.gov/sites/default/files/data_tables/stfj_c3_

630.2016.pdf

6

The government agrees with the Amicus (Br. 19 n.5) that, if the

Court rejects the government’s construction of Section 405(g), the

judgment below should be affirmed, notwithstanding the court of

appeals’ erroneous statement that petitioner’s case should have

been dismissed for lack of jurisdiction. The government raised the

point in its opening brief (at 24 n.12) in order to assist this Court, if

necessary, in dispelling confusion among some lower courts that

have treated exhaustion under Section 405(g) as a jurisdictional

requirement.

5

16

II. JUDICIAL REVIEW OF AN APPEALS COUNCIL

DISMISSAL ORDER IS LIMITED TO THE STATED

RATIONALE FOR THE AGENCY’S DECISION

As the government’s opening brief explains (at

29-30), Congress understood that some of SSA’s final

decisions will rest on a procedural failure by the claimant. Section 405(g) accordingly tailors the available

scope of judicial review to the agency’s rationale for its

decision. Where the claimant completes the administrative process, “[t]he court shall have power to enter,

* * * a judgment affirming, modifying, or reversing the

decision of the Commissioner, * * * with or without

remanding the cause for a rehearing.” 42 U.S.C. 405(g).

But where the agency’s final decision is “adverse” to the

claimant “because of failure of the claimant * * * to

submit proof in conformity with any regulation prescribed under [42 U.S.C. 405(a)], the court shall review

only the question of conformity with such regulations

and the validity of such regulations.” Ibid.

A. The latter sentence supports the government’s

position that, because the Appeals Council in this case

issued an adverse decision based on petitioner’s failure

to submit his request for review in a timely manner, the

statute does not entirely foreclose judicial review—as

the Amicus contends—but instead limits judicial review

to “only” whether petitioner “conform[ed] with” the

timeliness regulation. 42 U.S.C. 405(g). Section 405(g)

permits limited judicial review of an adverse decision

resting on a failure “to submit proof in conformity with

any regulation prescribed under subsection (a) of this

section,” ibid. (emphasis added), and Congress’s use of

the “expansive” term “ ‘any’ ”—“that is, ‘one or some

indiscriminately of whatever kind’ ”—“ ‘means what it

says,’ ” United States v. Gonzales, 520 U.S. 1, 5 (1997)

17

(citations omitted). The Amicus does not dispute that

Section 405(a) is the source of SSA’s authority to adopt

the Appeals Council timeliness regulation at issue in

this case. See 42 U.S.C. 1383(d)(1) (Section 405(a) “shall

apply * * * to the same extent” in Title XVI as in Title

II); 45 Fed. Reg. 52,078, 52,097 (Aug. 5, 1980) (invoking

Section 1383 as authority for 20 C.F.R. 416.1468). 7

While it is admittedly somewhat awkward to describe

a failure to submit a timely request for Appeals Council

review as a failure “to submit proof ” in conformity with

applicable regulations, 42 U.S.C. 405(g), that statutory

phrase makes sense in light of the text that it cross references, which refers to SSA’s authority to “to make

rules and regulations and to establish procedures, * * *

and [to] adopt reasonable and proper rules and regulations to regulate and provide for the nature and extent

of the proofs and evidence and the method of taking and

furnishing the same in order to establish the right to

benefits hereunder,” 42 U.S.C. 405(a) (emphasis added).

In other words, Congress referred in Section 405(g) to

a failure “to submit proof ” because in Section 405(a) it

had described the administrative-adjudication process

as one for claimants to furnish, and the agency to

receive, “proofs and evidence” regarding entitlement to

benefits. Ibid. The Appeals Council is part of that process, and a claimant’s failure to seek Appeals Council

review as required by SSA regulations constitutes a

The Amicus contends (Br. 26-27 n.7) that “the agency’s own regulations” show that the failure-to-submit-proof sentence in Section

405(g) does not apply here, but the Amicus cites a regulation of the

Center for Medicare & Medicaid Services—not SSA—that applies

to a different benefits program. See 70 Fed. Reg. 11,420, 11,498

(Mar. 8, 2005).

7

18

failure to submit his case, based on the evidentiary record, to the Appeals Council. Indeed, the very same

timeliness regulation at issue here also counsels claimants to “submit any evidence [they] wish to have considered * * * with [their] request for review [by the

Appeals Council],” and provides that the Appeals Council “will consider the evidence” consistent with other

SSA regulations. 20 C.F.R. 416.1468(a).

At a minimum, Section 405(g) clearly contemplates

that at least some adverse final decisions resting on a

procedural ground—those involving the failure to make

a proper submission of proof—will be judicially reviewable, contrary to the Amicus’s submission (Br. 28) that

judicial review is foreclosed unless the agency’s decision

was reached after a hearing “required by statute.”

Even if the failure-to-submit-proof sentence in Section

405(g) does not strictly control here, the principle

underlying it applies equally to petitioner’s failure to

comply with the regulations governing Appeals Council

review.

B. Although the government agrees with petitioner

that the Appeals Council’s dismissal order is judicially

reviewable, petitioner errs in contending (Br. 24-25)

that if the district court concludes that the Appeals

Council’s conclusion regarding untimeliness is not supported by substantial evidence, the court could properly

decide petitioner’s ultimate entitlement to benefits. 8

Petitioner contends (Br. 24) that the permissible scope of judicial review “is not presented here.” But the answer to that question

is directly related to why the correct interpretation of Section 405(g)

is consistent with this Court’s precedents holding that the Social

Security Act requires complete exhaustion of administrative remedies before judicial review. See City of New York, 476 U.S. at 482.

Moreover, the scope-of-review question implicates how the district

8

19

Lower courts commonly hold that, where an error in

the administrative process prevented SSA from reviewing a claim properly, remand to SSA is the required disposition. See, e.g., Casey v. Berryhill, 853 F.3d 322, 329

(7th Cir. 2017) (holding that, where the Appeals Council

erroneously dismissed an administrative appeal on procedural grounds, “the underlying merits” are “for the

agency to consider on remand”); Quarles v. Colvin,

No. 15-572, 2016 WL 4250399, at *3 (S.D. Ala. Aug. 10,

2016) (“The parties * * * agree that, when the Appeals

Council has dismissed a request for review, this Court

may not review the merits of the underlying decision

denying benefits” but only “ ‘whether the Appeals Council abused its discretion in dismissing Plaintiff ’s tardy

request for review.’ ”) (citation omitted); Whitzell v.

Astrue, 589 F. Supp. 2d 100, 109 (D. Mass. 2008) (holding that, where the Appeals Council had erroneously

declined review of the claimant’s case, Section 405(g)

did not allow the court to review the claimant’s entitlement to benefits).

Limiting judicial review in a case like this one to the

procedural failure that was the basis for the agency’s

adverse decision is necessary to ensure that petitioner

completes the entire administrative process—including

giving the Appeals Council an opportunity to review the

record—before a court considers his claim on the merits. See City of New York, 476 U.S. at 482 (“a claimant

is required to exhaust his administrative remedies by

proceeding through all three stages of the administrative appeals process”). That limitation on the scope of

judicial review also accords with the “familiar principle[ ] of administrative law” that when an agency “has

court should implement the remand order that both petitioner and

the government seek from this Court.

20

chosen a particular legal rationale” for its decision, “its

decision must stand or fall on that basis.” FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 455 (1986); see also

Chenery, 318 U.S. at 87.

Petitioner’s contrary arguments are without merit.

Petitioner first invokes (Br. 24-25) Sims, supra, which

he argues “holds that a court may address an issue in

the absence of an Appeals Council determination

regarding—or even Appeals Council consideration of—

the issue.” That overstates Sims’s rationale for declining to require issue exhaustion before the Appeals

Council. Four Justices reasoned that SSA administrative proceedings operate “ ‘in an informal, nonadversary

manner’ ” whereby “[t]he [Appeals] Council, not the

claimant, has primary responsibility for identifying and

developing the issues.” Sims, 530 U.S. at 111, 112 (opinion of Thomas, J.) (citation omitted). 9 But Sims does

not say or suggest that the Appeals Council is so inconsequential that a court may review the merits without

the Appeals Council even considering the benefits claim

on the merits.

Reviewing the merits before the Appeals Council has

had an opportunity to consider them would also conflict

with this Court’s “ordinary * * * requirement” that a

court “should remand a case to an agency for decision

of a matter that statutes place primarily in agency

hands.” INS v. Orlando Ventura, 537 U.S. 12, 16-17

(2002) (per curiam); see also Chenery, 318 U.S. at 88 (“a

judicial judgment cannot be made to do service for an

administrative judgment”). In Social Security cases,

SSA regulations charge the Appeals Council with

Justice O’Connor concurred in the judgment, on the ground that

SSA had failed to notify claimants of an issue-exhaustion requirement. Sims, 530 U.S. at 113.

9

21

reviewing and clarifying, if needed, the agency’s final

administrative judgment regarding a claimant’s entitlement to benefits, including by receiving new evidence.

See 20 C.F.R. 416.1470. Completing that process is necessary before a federal court can appropriately exercise

its review of whether the agency’s findings on the merits are supported by “substantial evidence.” 42 U.S.C.

405(g); see Salfi, 422 U.S. at 765 (“Exhaustion is generally required * * * so that the agency may function

efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts

the benefit of its experience and expertise, and to compile a record which is adequate for judicial review”);

see also T-Mobile S., LLC v. City of Roswell, 135 S. Ct.

808, 815 (2015) (“courts cannot exercise their duty of

[substantial-evidence] review unless they are advised of

the considerations underlying the action under review”)

(citation omitted; brackets in original).

Finally, petitioner observes (Br. 25) that, under this

Court’s precedents interpreting the Social Security Act,

full exhaustion can be waived, or deemed waived, in certain situations. But the Acting Commissioner has not

waived the requirement in this case that petitioner complete the administrative process before a court reviews

his entitlement to benefits. And this Court’s precedents

would not support treating that requirement as waived

here. Were the district court to find that petitioner submitted a timely request for Appeals Council review, he

has not shown “that full relief cannot be obtained”

through a remand to the Appeals Council, City of New

York, 476 U.S. at 483 (citation omitted), where petitioner

would have an opportunity to present his objections to

the ALJ’s decision denying his claim for benefits.

22

* * * * *

For the foregoing reasons and those stated in our

opening brief, the judgment of the court of appeals

should be reversed and the case remanded for further

proceedings.

Respectfully submitted.

NOEL J. FRANCISCO

Solicitor General

MARCH 2019