Amicus Curiae Brief — Willie Earl Carr, et al., Petitioners v. Andrew M. Saul, Commissioner of Social Security
Supreme Court briefDec 31, 2020
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Nos. 19-1442, 20-105
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In The
Supreme Court of the United States
---------------------------------♦--------------------------------WILLIE EARL CARR AND KIM L. MINOR,
Petitioners,
v.
ANDREW M. SAUL, COMMISSIONER OF
SOCIAL SECURITY ADMINISTRATION,
Respondent.
---------------------------------♦--------------------------------JOHN J. DAVIS, ET AL.,
Petitioners,
v.
ANDREW M. SAUL, COMMISSIONER OF
SOCIAL SECURITY ADMINISTRATION,
Respondent.
---------------------------------♦--------------------------------On Writs Of Certiorari To The
United States Court Of Appeals
For The Tenth And Eighth Circuits
---------------------------------♦--------------------------------BRIEF FOR AMICI CURIAE SOCIAL SECURITY,
GOVERNMENT BENEFIT PROGRAM, AND
ADMINISTRATIVE LAW PROFESSORS AND
SCHOLARS IN SUPPORT OF PETITIONERS
---------------------------------♦--------------------------------JON C. DUBIN
RUTGERS LAW SCHOOL
Counsel of Record
123 Washington Street
Newark, New Jersey 07102-3206
(973) 353-3186
Jdubin@law.Rutgers.edu
FRANK S. BLOCH
VANDERBILT LAW SCHOOL
131 21st Avenue South
Nashville, Tennessee
37203-1181
(646) 962-4984
Frank.Bloch@
law.Vanderbilt.edu
================================================================================================================
COCKLE LEGAL BRIEFS (800) 225-6964
WWW.COCKLELEGALBRIEFS.COM
i
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES .................................
iv
INTEREST OF AMICI CURIAE .........................
1
SUMMARY OF ARGUMENT ..............................
3
ARGUMENT ........................................................
5
I.
SSA’S UNIQUELY INFORMAL, INQUISITORIAL, NON-ADVERSARIAL HEARING
PROCESS AND MASS JUSTICE ADJUDICATION SYSTEM DOES NOT SUPPORT A
PRUDENTIAL ALJ HEARING-LEVEL ISSUE EXHAUSTION REQUIREMENT, ESPECIALLY FOR CONSTITUTIONAL AND
LEGAL ISSUES THAT ALJS LACK THE
POWER TO ADDRESS OR REMEDY .........
5
A. This Court’s Sims v. Apfel Decision .....
5
B. The Reasoning, Policies and Circumstances Underlying All Nine Justices’
Opinions in Sims Support Rejection of
ALJ Issue Exhaustion in the Instant
Cases ....................................................
8
1. The ALJ hearing process is the prototypical inquisitorial, non-adversarial
proceeding........................................
8
2. The ALJ hearing process is unusually informal and designed and advertised to be claimant-accessible.
Agency regulations and forms implementing this design fail to supply notice of an issue exhaustion
requirement and are misleading ...... 13
ii
TABLE OF CONTENTS—Continued
Page
3. The futility and constitutional claim
exceptions to general exhaustion requirements are met in Carr/Davis,
thereby satisfying the conditions for
rejecting ALJ issue exhaustion in accordance with the Sims dissent ....... 23
II.
IMPOSITION OF AN ISSUE EXHAUSTION RULE FOR SSA’S UNIQUE HEARING MODEL, IF DEEMED NECESSARY
AND DESIRABLE BY SSA, SHOULD
COME FROM CONGRESS OR APA NOTICE AND COMMENT RULEMAKING,
NOT FROM COURTS AND JUDICIAL
COMMON LAW ......................................... 26
A. ALJ Issue Exhaustion Would Significantly Alter SSA’s Uniquely Informal
Hearing Process ................................... 27
B. A Regulation Promulgated through Notice and Comment Rulemaking Could
Address Comprehensively the Many Potential Variations, Open Issues, and
Problematic Non-Uniformity that Would
Result from an Ad Hoc, Judicial ALJ Issue Exhaustion Rule ............................. 30
iii
TABLE OF CONTENTS—Continued
Page
C. Congress, or the Agency through APA
Rulemaking, are Best Situated to Determine how an SSA ALJ Issue Exhaustion Rule Should be Implemented;
Chevron Deference Principles Reinforce
this Conclusion ..................................... 33
CONCLUSION..................................................... 36
APPENDIX
(List of Amici Curiae) .......................................... App. 1
iv
TABLE OF AUTHORITIES
Page
CASES
Anderson v. Barnhart, 344 F.3d 809 (8th Cir.
2003) .................................................................. 20, 21
Barnhart v. Thomas, 540 U.S. 20 (2003) ....................29
Bethesda Hospital Ass’n v. Bowen, 485 U.S. 399
(1988) .........................................................................8
Biestek v. Berryhill, 139 S.Ct. 1148 (2019) .................14
Bowen v. Georgetown Univ. Hosp., 488 U.S. 204
(1988) .......................................................................35
Bowen v. Yuckert, 482 U.S. 137 (1987) ........................21
Bradshaw v. Berryhill, 372 F. Supp. 3d 349
(W.D.N.C. 2019), aff ’d sub nom., Probst. v.
Saul, 980 F.3d 1015 (4th Cir. 2020) ........................30
Broz v. Schweiker, 677 F.2d 1351 (11th Cir. 1982)........ 10
Carr v. Comm’r of Soc. Sec., 961 F.3d 1267 (10th
Cir. 2020) ............................................... 15, 21, 24, 25
Carrier v. Sullivan, 944 F.2d 243 (5th Cir. 1991) .......20
Chevron U.S.A. Inc. v. Natural Resource Defense
Council, Inc., 467 U.S. 837 (1984) ...........................33
Franki Foundation v. Alger-Rau, 513 F.2d 581
(3d Cir. 1975) ...........................................................31
Heckler v. Campbell, 461 U.S. 458 (1983)............. 10, 11
Heckler v. Day, 467 U.S. 104 (1983) ...................... 13, 32
James v. Bowen, 793 F.2d 702 (5th Cir. 1986) ............20
Jaxson v. Saul, 963 F.3d 645 (7th Cir. 2020) ..............33
v
TABLE OF AUTHORITIES—Continued
Page
Johnson v. Apfel, 189 F.3d 561 (7th Cir. 1999) ..... 16, 30
Kendrick v. Sullivan, 784 F. Supp. 94 (S.D.N.Y.
1992) ........................................................................19
Kisor v. Wilkie, 139 S.Ct. 2400 (2019) ........................35
Lucia v. SEC, 138 S.Ct. 2044 (2018) ..........................17
Mathews v. Eldridge, 424 U.S. 319 (1976)....................8
Meanel v. Apfel, 172 F.3d 1111 (9th Cir. 1999) ...........22
Mills v. Apfel, 244 F.3d 1, cert. denied, 534 U.S.
1085 (2002) (1st Cir. 2001) ................................ 20, 21
Probst v. Berryhill, 377 F. Supp. 3d 578 (E.D.N.C.
2019), aff’d sub nom., Probst v. Saul, 980 F.3d
1015 (4th Cir. 2020) .................................................19
Richardson v. Perales, 402 U.S. 389 (1971) .......... 10, 13
Rodway v. United States Dept. of Agric., 514 F.2d
809 (D.C. Cir. 1975) .................................................34
Rosa v. Bowen, 677 F. Supp. 782 (D.N.J. 1988) ..........19
Salling v. Bowen, 641 F. Supp. 1046 (W.D.Va.
1986) .................................................................... 9, 30
Sears v. Bowen, 840 F.2d 394 (7th Cir. 1988) .............31
Shaibi v. Berryhill, 883 F.3d 1102 (9th Cir.
2017) ............................................................ 20, 22, 31
Shalala v. Illinois Council on Long Term Care,
Inc., 529 U.S. 1 (2000) .............................................24
Sims v. Apfel, 530 U.S. 103 (2000) ...................... passim
vi
TABLE OF AUTHORITIES—Continued
Page
Smiley v. Citibank (South Dakota), N.A., 517
U.S. 735 (1996) ............................................ 33, 34, 35
Smith v. Berryhill, 139 S. Ct. 1765 (2019) .................13
Spears v. Heckler, 625 F. Supp. 208 (S.D.N.Y.
1985) ........................................................................19
Stieberger v. Sullivan, 738 F. Supp. 716 (S.D.N.Y.
1990) ........................................................................14
Sullivan v. Hudson, 490 U.S. 877 (1989) ......................2
United States v. Krynicki, 689 F.2d 289 (1st Cir.
1982) ........................................................................31
Ventura v. Shalala, 55 F.3d 900 (3d Cir. 1995) ..........19
Watson v. Shalala, 5 F.3d 1495 (5th Cir. 1993) ..........20
STATUTES
5 U.S.C. § 553 .......................................................... 4, 32
5 U.S.C. § 553(a) ..........................................................34
42 U.S.C. § 405(g) .................................................. 11, 24
42 U.S.C. § 423(d)(5)(A) ..............................................22
42 U.S.C. § 423(d)(5)(B) ..............................................11
42 U.S.C. § 1320a-8(d)(1) ...................................... 16, 33
42 U.S.C. § 1382c(a)(3)(H)(i) .......................................11
RULES AND REGULATIONS
10 C.F.R. § 2.341(b)(5).................................................26
20 C.F.R. § 404.900(b) ................................. 5, 14, 32, 34
vii
TABLE OF AUTHORITIES—Continued
Page
20 C.F.R. § 404.923 .....................................................15
20 C.F.R. § 404.939 .....................................................15
20 C.F.R. § 404.1512(b)(3) ...........................................21
20 C.F.R. § 404.1512(d) ...............................................11
20 C.F.R. § 416.912(b)(3) .............................................21
20 C.F.R. § 416.912(d) .................................................11
20 C.F.R. § 416.1400(b) ................................... 14, 32, 34
20 C.F.R. § 416.1433 ...................................................15
20 C.F.R. § 416.1439 ...................................................15
36 Fed. Reg. 2,532 (Jan. 28, 1971) ..............................34
39 Fed. Reg. 37,976 (Oct. 25, 1974) ............................17
39 Fed. Reg. 37,978 (Oct. 25, 1974) ............................15
41 Fed. Reg. 51,586 (Nov. 23, 1976) ............................15
47 Fed. Reg. 26,860 (June 22, 1982) ...........................34
63 Fed. Reg. 24,930-31 (May 6, 1998) ........................14
65 Fed. Reg 75,759 (Dec. 4, 2000) ...............................11
72 Fed. Reg. 61,231 (Oct. 29, 2007) ............................16
77 Fed. Reg. 1,065-01 (Feb. 23, 2012) .........................11
83 Fed. Reg. 49,613 (Oct. 2, 2018) ..............................11
84 Fed. Reg. 9,582 (March 15, 2019) ..........................17
85 Fed. Reg. 73,139-40 (Nov. 16, 2020) .......................13
Supreme Court Rule 37.6 .............................................1
viii
TABLE OF AUTHORITIES—Continued
Page
OTHER AUTHORITIES
Administrative Conference of the United States,
Recommendation 92-1: The Procedural and
Practice Rule Exemption from the APA Noticeand-Comment Rulemaking Requirements,
1992 ACUS 1 ...........................................................34
BERNARD SCHWARTZ, ADMINISTRATIVE LAW (3d
Ed. 1991) ..................................................................10
BERNARD SCHWARTZ, ADMINISTRATIVE LAW (4TH
ED.1994) .....................................................................3
CAROLYN A. KUBITSCHEK AND JON C. DUBIN, SOCIAL
SECURITY DISABILITY LAW AND PROCEDURE IN
FEDERAL COURT, 2021 EDITION (2021).... 11, 14, 24, 25
Charles H. Koch, Jr. and David A. Koplow, The
Fourth Bite at the Apple: A Study of the Operation and Utility of the Social Security Administration’s Appeals Council, 17 FLA. ST. U. L.
REV. 199 (1990) ..........................................................2
FRANK S. BLOCH AND JON C. DUBIN, SOCIAL SECURITY LAW, POLICY AND PRACTICE: CASES AND
MATERIALS (2016) ....................................................11
Frank S. Bloch, Jeffrey S. Lubbers & Paul R.
Verkuil, Developing a Full and Fair Evidentiary Record in a Nonadversary Setting: Two
Proposals for Improving Social Security Disability Adjudications, 25 CARDOZO L. REV. 1
(2003) .........................................................................2
ix
TABLE OF AUTHORITIES—Continued
Page
Frank S. Bloch, Jeffrey S. Lubbers & Paul R.
Verkuil, The Social Security Administration’s
New Disability Adjudication Rules: A Significant and Promising Reform, 92 CORNELL L.
REV. 235 (2007).................................................... 2, 27
Frank S. Bloch, Representation and Advocacy at
Non-Adversary Hearings: The Need for NonAdversary Representatives at Social Security
Disability Hearings, 59 WASH. U. L. Q. 349
(1981) .......................................................................28
German Civil Procedure Code (Zivilprozessordnung or ZPO) § 537 (1950) ...........................12
H.R. Rep. No. 76-728 (1939) .......................................13
JERRY L. MASHAW, et al., SOCIAL SECURITY HEARINGS AND APPEALS (1978) .....................................2, 28
Jerry L. Mashaw, The Management Side of Due
Process: Some Theoretical and Litigation
Notes on the Assurance of Accuracy, Fairness,
and Timeliness in the Adjudication of Social
Welfare Claims, 59 CORNELL L. REV. 772
(1974) .......................................................................28
Jerry L. Mashaw, Unemployment Compensation:
Continuity, Change and the Prospects for Reform, 29 U. MICH. J. L. REFORM 1 (1996) ..................9
John H. Langbein, The German Advantage in
Civil Procedure, 52 U. CHI. L. REV. 823 (1985) ......12
x
TABLE OF AUTHORITIES—Continued
Page
Jon C. Dubin, Overcoming Gridlock: Campbell
after a Quarter-Century and Bureaucratically
Rational Gap-Filling in Mass Justice Adjudication in the Social Security Administration’s
Disability Programs, 62 ADMIN. L. REV. 937
(2010) .........................................................................2
Jon C. Dubin, Torquemada Meets Kafka: The
Misapplication of the Issue Exhaustion Doctrine to Inquisitorial Administrative Proceedings, 97 COLUM. L. REV. 1289 (1997) ... 3, 8, 10, 12, 30
ROBERT G. DIXON, JR., SOCIAL SECURITY DISABILITY AND MASS JUSTICE (1973) .....................................2
Robert G. Dixon, The Welfare State and Mass
Justice: A Warning from the Social Security
Disability Program, 1972 DUKE L.J. 681
(1972) .......................................................................28
Social Security Administration, Annual Performance Report, Fiscal Years 2019-2021 (2020) .......28
Social Security Administration, Important Information Regarding Possible Challenges to
the Appointment of Administrative Law
Judges in SSA’s Administrative Process, EM18003 (2018) ............................................................23
SSA Form HA-501 ......................................................32
SSA Hearing, Appeals and Litigation Law Manual (HALLEX) I-2-2-10 (Jan. 13, 2016) ..................16
41 SOCIAL SECURITY FORUM 1 (Jan. 2019),
https://nosscr.org/wp-content/uploads/2020/
12/1-Jan-2019-compressed.pdf ......................... 20, 31
xi
TABLE OF AUTHORITIES—Continued
Page
U.S. Department of Labor Dictionary of Occupational Titles .............................................................11
U.S. Gov’t Accountability Office, GAO/HEHS-9687, Backlog Reduction Efforts Underway: Significant Challenges Remain (1996) ........................29
U.S. Gov’t Accountability Office, GAO-09-398,
Social Security Disability: Additional Performance Measures and Better Cost Estimates
Could Help Improve SSA’s Efforts to Eliminate Its Hearings Backlog (2009) ...........................29
William B. Fisch, Recent Developments in West
German Civil Procedure, 6 HASTINGS INT’L &
COMP. L. REV. 221 (1983) ........................................12
1
INTEREST OF AMICI CURIAE1
The amici whose views are presented here are law
professors and social security, government benefit program, or administrative law scholars with expertise in
systems of administrative adjudication and judicial review applicable to social security and Supplemental
Security Income (SSI) disability claims. Some amici
teach classroom courses in Social Security Law, Administrative Law or Government Benefit Program law.
Some of amici also teach or have taught in law school
clinical courses involving supervised law student representation of social security and SSI claimants in the
Social Security Administration’s (SSA) hearing proceedings and/or on judicial review in federal court and
their scholarship is informed by first-hand knowledge
of SSA’s unique adjudicative model. Amici submit this
brief to vindicate the public interest in ensuring proper
understanding of the application of social security, government benefit program, or administrative law as it
relates to this appeal. The full list of amici comprising
56 law professors from 40 law schools, appears in the
Appendix.
Much social security and administrative law
scholarship has been produced about the uniqueness
of SSA’s unusually informal, non-adversarial and
1
Pursuant to Supreme Court Rule 37.6, Amici state that no
counsel for any party authored this brief in whole or in part; and
that no person or entity, other than Amici made a monetary contribution intended to fund the preparation and submission of this
brief. Counsel for all Petitioners and Respondent have consented
to the filing of this brief.
2
inquisitorial administrative adjudicative system. See,
e.g., Frank S. Bloch, Jeffrey S. Lubbers & Paul R.
Verkuil, The Social Security Administration’s New Disability Adjudication Rules: A Significant and Promising Reform, 92 CORNELL L. REV. 235 (2007); Frank S.
Bloch, Jeffrey S. Lubbers & Paul R. Verkuil, Developing
a Full and Fair Evidentiary Record in a Nonadversary
Setting: Two Proposals for Improving Social Security
Disability Adjudications, 25 CARDOZO L. REV. 1 (2003);
JERRY L. MASHAW, et al., SOCIAL SECURITY HEARINGS
AND APPEALS (1978). Social Security and administrative law scholars have also examined the delivery of
“mass justice” through the series of relatively short,
claimant-accessible administrative stages in the disability benefit process in these cases, which regularly
number in the millions rather than the hundreds as in
other federal agencies. See Jon C. Dubin, Overcoming
Gridlock: Campbell after a Quarter-Century and Bureaucratically Rational Gap-Filling in Mass Justice
Adjudication in the Social Security Administration’s
Disability Programs, 62 ADMIN. L. REV. 937 (2010);
Charles H. Koch, Jr. and David A. Koplow, The Fourth
Bite at the Apple: A Study of the Operation and Utility
of the Social Security Administration’s Appeals Council, 17 FLA. ST. U. L. REV. 199 (1990); ROBERT G. DIXON,
JR., SOCIAL SECURITY DISABILITY AND MASS JUSTICE
(1973). Indeed, this body of legal scholarship has influenced the development of legal doctrine on the application of exhaustion and judicial review principles
from SSA proceedings generally and “issue exhaustion” more specifically, such as in this Court’s decision
in Sims v. Apfel, 530 U.S. 103 (2000), rejecting the
3
application of issue exhaustion to SSA’s informal, nonadversarial, and inquisitorial Appeals Council. See
Sims, 530 U.S. at 111-112 (citing Jon C. Dubin, Torquemada Meets Kafka: The Misapplication of the Issue
Exhaustion Doctrine to Inquisitorial Administrative
Proceedings, 97 COLUM. L. REV. 1289, 1301-05; 1325-29
(1997) and BERNARD SCHWARTZ, ADMINISTRATIVE LAW
469-470 (4TH ED.1994)). Some of the participants on
this amici brief are contributors to this body of scholarship.
---------------------------------♦---------------------------------
SUMMARY OF ARGUMENT
The Sims Court’s reasoning in rejecting Appeals
Council issue exhaustion applies a fortiori to ALJ hearing level issue exhaustion of Petitioners’ “unexhausted” issue in the instant case. The decidedly
inquisitorial, non-adversarial, informal, and lay claimant-accessible nature and design of SSA’s ALJ hearing
process is fundamentally at odds with the purposes
and policies underlying a prudential issue exhaustion
requirement. Applying issue exhaustion would result
in severe disruption of an already burdened system of
mass administrative justice. In light of the assurance
of informality and claimant accessibility in SSA’s regulations, forms and adjudicative culture, ALJ issue
exhaustion would also produce inadequate and misleading notice to claimants and serve as a procedural
trap for the unwary and impediment to court access.
Even if ALJ issue exhaustion were otherwise prudentially justified, the Petitioners’ unexhausted issue—
4
the constitutionality of their ALJs’ appointment—fits
firmly within the futility and constitutional claim exceptions to otherwise applicable exhaustion requirements since ALJs lack the power to remedy or address
these constitutional issues.
The judicial imposition of issue exhaustion in the
manner urged by Respondent would reflect a significant alteration and judicialization of SSA’s uniquely
informal ALJ hearing process, with many foreseen and
unforeseen additional issues. It would place an unfair
burden on claimants and increase ALJs’ already significant responsibilities, which could stress the entire
process beyond the breaking point. Accordingly, any
such SSA ALJ issue exhaustion rule should be the
product of a comprehensive, deliberative, open and
democratically accountable process designed to reach
a nationally uniform result and to balance the impacts
on claimants, the public, and the agency alike, such as
through notice and comment rulemaking under the
Administrative Procedure Act.
---------------------------------♦---------------------------------
5
ARGUMENT
I.
SSA’S UNIQUELY INFORMAL, INQUISITORIAL, NON-ADVERSARIAL HEARING
PROCESS AND MASS JUSTICE ADJUDICATION SYSTEM DOES NOT SUPPORT A
PRUDENTIAL ALJ HEARING-LEVEL ISSUE EXHAUSTION REQUIREMENT, ESPECIALLY FOR CONSTITUTIONAL AND
LEGAL ISSUES THAT ALJS LACK THE
POWER TO ADDRESS OR REMEDY
A. This Court’s Sims v. Apfel Decision
In Sims v. Apfel, Justice Thomas’s opinion for a
four-justice plurality noted at the outset that while
administrative issue exhaustion requirements “are
largely creatures of statutes” or regulations, no statute
or regulation impose such a requirement. Sims, 530
U.S. at 107. Courts have sometimes applied judicially
imposed issue exhaustion, but the desirability and propriety of superimposing this principle on particular
systems “depends on the degree to which the analogy
to formal adversarial litigation applies in a particular
administrative proceeding.” Id. at 109. Because SSA
proceedings are inquisitorial, informal, and non-adversarial—where ALJs investigate facts and develop arguments—Justice Thomas concluded that “the
differences between courts and agencies are nowhere
more pronounced than in Social Security proceedings.”
Id. at 110. Also noted were the fact that SSA regulations expressly mandate that the agency conduct its
review process “in an informal, non-adversarial manner” (quoting 20 C.F.R. § 404.900(b)), a significant
6
number of claimants lack attorney representation, and
SSA supplies a form with only a three-line space to request administrative review which “strongly suggests
that the council does not depend much, if at all for
claimants to identify issues for review.” Id. at 111-12.
The plurality thus concluded that “issue exhaustion makes little sense in this particular context”
and therefore “a judicially created issue exhaustion
requirement is inappropriate.” Id. at 112. Although relying on repeated references to the informal, inquisitorial, non-adversarial nature of ALJ hearings in its
reasoning, the plurality reserved the issue of applying
issue exhaustion at the ALJ hearing stage since that
specific issue was not before the court. Id. at 107. After
pointing out that SSA regulations do not require issue
exhaustion, the plurality stated in dicta that “we think
it likely that the [SSA] could adopt a regulation that
did require issue exhaustion.” Id. at 108.
Justice O’Connor authored a concurring opinion,
joining in much of the plurality opinion’s doctrinal
bases and rationales but finding that “the agency’s failure to notify claimants of an issue exhaustion requirement in this context was a sufficient basis for [the
Court’s] decision.” Id. at 113 (O’Connor, J., concurring
in part and in the judgment). Justice O’Connor pointed
out that although SSA’s regulations make clear that
failing to request review at the next stage with applicable time limits “will forfeit the right to seek judicial
review, the regulations provide no notice that claimants must also raise specific issues before the Appeals
Council to preserve them for review in federal court.”
7
Id. (citations omitted). Indeed, Justice O’Connor found
that SSA’s regulations and forms were misleading and
suggest the absence of such a requirement, pointing to
the same SSA form with only a three-line space to supply grounds for review and suggesting that reading, assembling the information for, and completing the form
will take only 10 minutes. Id.
Justice O’Connor also reasoned that while SSA
represented to the Court that it does not invoke Appeals Council issue exhaustion in cases where claimants lack any form of a representative2 and that
claimants with attorney representatives, such as Ms.
Sims, might be less likely to be misled, “it would be
unwise to adopt a rule that imposes different issue
exhaustion obligations based on whether claimants
are represented by counsel.” Id. at 114. Finally, Justice
O’Connor concluded that the petitioner “did everything
that the agency asked of her. I would not impose any
additional requirements.” Id.
The dissenting opinion supported issue exhaustion in this context based on standard general exhaustion rationales of agency error correction and agency
autonomy without premature judicial intervention. Id.
at 114-17 (Breyer, J., dissenting). As to the Petitioner
in Sims, since “no one claim[ed] that any established
exception to this ordinary ‘exhaustion’ or ‘waiver’ rule
2
Justice O’Connor noted that SSA’s representation to the
Court that it did not assert issue exhaustion on appeals by unrepresented claimants “appeared to be inaccurate” and cited a pro se
case where the agency had nonetheless invoked issue exhaustion.
530 U.S. at 114.
8
applie[d]” issue exhaustion was appropriate. Id. at 115.
The dissent cited as examples of such established exceptions to exhaustion principles, not asserted in Sims:
“futility” (citing Bethesda Hospital Ass’n v. Bowen, 485
U.S. 399, 406-07 (1988)) and “constitutional claims”
(citing Mathews v. Eldridge, 424 U.S. 319, 329 n.10
(1976)). Sims, 530 U.S. at 115.
B. The Reasoning, Policies and Circumstances Underlying All Nine Justices’
Opinions in Sims Support Rejection of
ALJ Issue Exhaustion in the Instant
Cases
1. The ALJ hearing process is the prototypical inquisitorial, non-adversarial
proceeding
“The primary distinction between the traditional
Anglo-American adversarial system and the European-style inquisitorial system is the degree of control
that the decisionmaker and the parties have over the
process of identifying issues and gathering and presenting evidence.” Jon C. Dubin, Torquemada Meets
Kafka: The Misapplication of the Issue Exhaustion
Doctrine to Inquisitorial Administrative Proceedings,
97 COLUM. L. REV. 1289, 1300 (1997). Professor Jerry
Mashaw has observed that “virtually all mass justice
systems have decided that they are unable to function effectively without the active-adjudicator investigation, informal rules of evidence and procedure,
and presiding officer control of issue definition and
development that characterize an inquisitorial or
9
examinational approach.” Jerry L. Mashaw, Unemployment Compensation: Continuity, Change and the Prospects for Reform, 29 U. MICH. J. L. REFORM 1, 18 (1996).
As one court described the ALJ’s role:
When the claimant appears before an ALJ, he
or she will appear before a person not wearing
a judicial robe, who is required by law to act
with three hats, (1) a judge, (2) a representative of the government who cross examines
the claimant, and, (3) an adviser to the claimant, required by regulation to fully develop
the case to see that the claimant has a fair
hearing regardless of whether the claimant is
represented by counsel or otherwise. . . . The
burden of exploring all pertinent facts and issues rests with the ALJ and in many cases,
the person is not represented by counsel nor
by any other person.
Salling v. Bowen, 641 F. Supp. 1046, 1053 (W.D.Va.
1986); see Sims, 530 U.S. at 111 (“It is the ALJ’s duty
to investigate the facts and develop arguments both for
and against granting benefits.”). In addition, in SSA’s
nonadversarial hearing model, “the Commissioner has
no representative before the ALJ to oppose the claim
for benefits.” Sims, 530 U.S. at 111. As Professor Bernard Schwartz observed, SSA’s “inquisitorial” hearing
model with multiple-role ALJs “may represent a practical method of dealing with many problems encountered in agencies dispensing mass justice[;] [t]he great
need is to deal efficiently and fairly with a horde of
cases, rather than to preserve all the accoutrements of
10
the courtroom.” BERNARD SCHWARTZ, ADMINISTRATIVE
LAW 285 (3d Ed. 1991).
Indeed, when this Court decided a challenge to
SSA’s inquisitorial, multiple-role ALJ hearing model in
Richardson v. Perales, 402 U.S. 389, 410 (1971), SSA
defended the model by arguing that its replacement
with a more adversarial and formal system would
“scarcely be beneficial to claimants,” “add substantially
to the administrative costs borne by the [social security] trust fund,” and “be contrary to Congressional intent to provide a simple procedure whereby claimants
can establish their right to benefits.” Dubin, Torquemada, 97 COL. L. REV. at 1305-06 (quoting the agency’s
Reply Brief at p.6 n.2). In Perales, this Court upheld
the inquisitorial, “multiple hat” model, noting that
SSA’s “administrative structure and procedures, with
essential determinations numbering into the millions,
are of a size and extent difficult to comprehend. . . .
‘Such a system must be fair—and it must work.’ ” 402
U.S. at 399.
To ensure such a system is workable and fair, the
courts have developed a large body of caselaw recognizing and enhancing statutory and regulatory obligations imposed on SSA ALJs to develop issues and
evidence at hearings for the benefit of claimants and to
ensure a fair hearing, even when claimants are represented. See Heckler v. Campbell, 461 U.S. 458, 471
(1983) (Brennan, J., concurring) (“[T]here is a ‘basic obligation’ on the ALJ in these nonadversarial proceedings to develop a full and fair record”) (quoting Broz v.
Schweiker, 677 F.2d 1351, 1364 (11th Cir. 1982); see
11
also Campbell, 461 U.S. at 471, n.1 (“The ‘duty of inquiry’ derives from claimants’ basic statutory and constitutional right to due process in the adjudication of
their claims.” (citations omitted)); see generally CAROLYN A. KUBITSCHEK AND JON C. DUBIN, SOCIAL SECURITY DISABILITY LAW AND PROCEDURE IN FEDERAL COURT,
2021 EDITION §§ 6.8, 6.9 (2021) (analyzing the ALJ’s
duty to develop the record); see also id. at §§ 3:90, 3:92,
3:94 (identifying circumstances when ALJs must produce vocational expert hearing testimony); Social Security Ruling (SSR)3 00-4p, 65 Fed. Reg. 75,759 (Dec. 4,
2000) (placing affirmative duty on ALJs to identify conflicts between vocational expert evidence and the U.S.
Department of Labor Dictionary of Occupational Titles); SSR 18-01p, 83 Fed. Reg. 49,613 (Oct. 2, 2018)
(delineating circumstances triggering ALJ duty to procure hearing testimony of a medical advisor); 42 USC
§§ 423(d)(5)(B); 1382c(a)(3)(H)(i); 20 C.F.R. §§ 404.1512(d);
416.912(d); 77 Fed. Reg. 1,065-01 (Feb. 23, 2012) (imposing duty on agency adjudicators, including ALJs,
to make every reasonable effort to gather evidence
from a claimant’s treating medical sources, and to recontact sources to clarify insufficient or inconsistent
reports).
When the ALJ or factfinder at least shares such
significant responsibility for identifying and developing issues, developing the record, and directing these
3
For discussion of the sources and effect of SSA sub-regulatory guidance including SSRs, HALLEX, and POMS, see FRANK
S. BLOCH AND JON C. DUBIN, SOCIAL SECURITY LAW, POLICY AND
PRACTICE: CASES AND MATERIALS CH. 9.B.1 (2016).
12
intimate, face-to-face proceedings with informal, mass
justice dispatch in an inquisitorial role, issue exhaustion is obviously less justified or appropriate. Dubin,
Torquemada, 97 COLUM. L. REV. at 1325. By way of
comparison, even in Germany’s more adversarial inquisitorial legal system, appeals from inquisitorial trials are not subject to issue exhaustion. See William B.
Fisch, Recent Developments in West German Civil Procedure, 6 HASTINGS INT’L & COMP. L. REV. 221, 223, 260
n.254 (1983) (translating and quoting the German
Civil Procedure Code (Zivilprozessordnung or ZPO)
§ 537 (1950): “[t]he subject matter of argument and decision in the appellate court is all disputed points relevant to a claim sustained or rejected below, with
respect to which the parties’ demands on appeal require argument and decision, even if these points were
not argued or decided below.”); see generally John H.
Langbein, The German Advantage in Civil Procedure,
52 U. CHI. L. REV. 823, 824, 856-57 (1985) (describing
how the German inquisitorial system avoids “the excesses of American adversarial justice” and includes
features such as fully de novo appellate review). Moreover, it is apparent that SSA ALJs have significantly
wider and more meaningful inquisitorial and investigative duties to develop issues, arguments and evidence at hearings than does the considerably moreremoved Appeals Council at issue in Sims. Indeed, Justice Thomas’s plurality opinion expressly relied on the
ALJ’s inquisitorial hearing duties and functions in determining that prudential justifications did not support issue exhaustion at the Appeals Council. See
Sims, 530 U.S. at 110-11.
13
2. The ALJ hearing process is unusually informal and designed and advertised to be claimant-accessible.
Agency regulations and forms implementing this design fail to supply
notice of an issue exhaustion requirement and are misleading
In evaluating challenges to SSA’s hearing process,
the Perales Court also declared:
There emerges an emphasis upon the informal rather than the formal. This, we think, is
as it should be, for this administrative procedure, and these hearings, should be understandable to the layman claimant, should not
necessarily be stiff and comfortable only for
the trained attorney, and should be liberal
and not strict in tone and operation. This is
the obvious intent of Congress so long as the
procedures are fundamentally fair.
402 U.S. at 389. This Court has also repeatedly emphasized that the agency’s adjudicative provisions were
designed to be “unusually protective” of claimants.
Smith v. Berryhill, 139 S. Ct. 1765, 1776 (2019); Heckler v. Day, 467 U.S. 104, 106 (1983). Congressional intent supports this conclusion. See H.R. Rep. No. 76-728,
at 44 (1939) (“[I]t is not contemplated that the services
of an agent or attorney will be necessary in presenting
the vast majority of [SSA] claims . . . ”); 85 Fed. Reg.
73,139-40 (Nov. 16, 2020) (comparing legislative history of the Social Security Act and Administrative Procedure Act (APA) and observing “there are significant
14
differences between an informal, non-adversarial Social Security hearing and the type of formal, adversarial adjudication to which the APA applies.”).
Indeed, this unusual informality extends to the
substantial constriction of SSA ALJs’ legal authority;
ALJs are prohibited from applying or interpreting controlling case law from the U.S. Courts of Appeals—
which has not been first interpreted and embodied in
an SSA Acquiescence Ruling (AR)—even while adjudicating within the circuits where the caselaw arose. See
Social Security Ruling 96-1p; 63 Fed. Reg. 24,930-31
(May 6, 1998); see generally, Stieberger v. Sullivan, 738
F. Supp. 716, 757-60 (S.D.N.Y. 1990) (describing “informal non-acquiescence” through current SSA policy).
Despite numerous circuit decisions that have modified
substantive SSA disability positions, SSA effectively
nullifies many such circuit precedents by declining to
issue acquiescence rulings in the overwhelming majority of such cases. As a result, all agency adjudicators
ignore several precedential decisions at ALJ hearings.
Because many federal court appeals are decided entirely on such controlling circuit caselaw issues, see
generally KUBITSCHEK & DUBIN, at §§ 1:21-1:26, their
presentation in court is often decisive but their assertion in ALJ hearing proceedings would be futile.
Agency regulations and forms reinforce the
agency’s focus on informality, simplicity and claimantaccessibility. See 20 C.F.R. §§ 404.900(b), 416.1400(b)
(“we conduct the administrative review process in an
informal, non-adversarial manner.”); Biestek v. Berryhill, 139 S.Ct. 1148, 1152 (2019). Analogous to the
15
form Justice O’Connor found misleading for discouraging appeals council issue exhaustion in Sims, SSA
(HA-501), provided to claimants to request ALJ hearings, is similarly misleading. It supplies only a one-line
space of less than an inch to assert all issues and arguments in the request for hearing, and assures claimants, it only will take “about 10 minutes” to complete.
See https://www.ssa.gov/forms/ha-501.pdf. The Sims
plurality also emphasized that “SSA regulations do not
require issue exhaustion” 530 U.S. at 108, much less
provide clear notice of an issue exhaustion requirement to counter the pervasive reinforcement of hearing informality and lay-claimant-accessibility.
SSA has asserted for the first time in its response
to the certiorari petitions—as suggested, but not decided, by the Tenth Circuit sua sponte in Carr v.
Comm’r of Soc. Sec., 961 F.3d 1267, 1274-75 n.7 (10th
Cir. 2020)—that an existing SSA regulation requires
issue exhaustion. Resp. Cert. Br. at 10-11. This regulation requires objections to the ALJ’s notice of the date,
place, time and basic issues to be decided at the hearing; however, SSA argues that it requires ALJ issue
exhaustion of all conceivable legal and factual arguments and issues a claimant might eventually raise on
judicial review. That regulation, now in 20 C.F.R.
§§ 404.939; 416.1439, was first promulgated for the
Supplemental Security Income (SSI) program in 1974,
see 39 Fed. Reg. 37,978 (Oct. 25, 1974) (appearing in
20 C.F.R. § 416.1433), and then for the Disability Insurance Benefit (DIB) program in 1976. See 41 Fed.
Reg. 51,586 (Nov. 23, 1976) (in 20 C.F.R. § 404.923).
16
Typically, in disability program cases, the notice of
hearing informs that the ALJ will be deciding eligibility for DIB, SSI, or both, and whether the hearing’s focus is on the subject of a lower agency disability
determination or on a non-disability issue prerequisite
to benefits eligibility (such as the required income or
resource levels for SSI benefits) or the validity of an
overpayment determination.
The hearing notice does not delineate the many legal arguments and issues that may arise from adjudication of those benefit claims and, as such, does not call
for objection to all such conceivable issues or arguments, or the lack of comprehensive issue and argument delineation in the notice. See SSA Hearing,
Appeals and Litigation Law Manual (HALLEX) I-2-210 (Jan. 13, 2016). For example, it requires a claimant
requesting a hearing to challenge a denial of SSI benefits based on excess income to object that the hearing
was incorrectly noticed about disability eligibility and
not excess income. See id., at Examples 1 and 2; see also
72 Fed. Reg. 61,231 (Oct. 29, 2007) (“If you believe that
the issues contained in the hearing notice are incorrect, you should notify the [ALJ] in writing . . . no later
than 5 business days before the hearing.”). It is telling
that in the first 45 years since adoption, SSA had never
asserted that this regulation mandated exhaustion of
all issues and arguments potentially stemming from
these broader claims and categories, and no court has
so held. “The [SSA] knows how to draft a waiver rule.”
Johnson v. Apfel, 189 F.3d 561, 563 (7th Cir. 1999); cf.
42 U.S.C. § 1320a-8(d)(1) (issue exhaustion rule for
17
adversarial fraud proceedings). Indeed, when SSA first
promulgated this hearing-notice-objection regulation
in 1974, it expressly rejected a suggestion, in the notice
and comment process, urging application of formal advocacy system rules, declaring:
In administering the programs for which it is
responsible, it is the policy of the [SSA] to provide advice and assistance as necessary to insure the protection of every individual’s rights
under law. . . . From the [SSA’s] past experience in dealing with individuals of all socioeconomic backgrounds, the procedures providing support and assistance to individuals
have proven adequate without a formal advocacy approach. Therefore, the suggestion to
provide an advocacy system for individuals
under the [SSI] program is not accepted.
39 Fed. Reg. 37,976 (Oct. 25, 1974).
SSA’s adoption of Social Security Ruling (SSR) 191p, 84 Fed. Reg. 9,582 (March 15, 2019), reflecting implementation of Lucia v. SEC, 138 S.Ct. 2044 (2018) as
applied to SSA, also could not itself supply notice of an
issue exhaustion requirement on Lucia Appointments
Clause challenges and certainly not for claims prior to
March 15, 2019. Moreover, this SSR did not mandate
ALJ issue exhaustion of Appointment Clause challenges at any time. This ruling simply establishes the
condition for SSA’s provision of voluntary relief to
claimants who assert Appointments Clause claims either before the Appeals Council or an ALJ, and does
not purport to announce or supply notice of an issue
18
exhaustion rule for judicial review of such issues. Because all of the Petitioners’ cases had exited the agency
and proceeded to federal court prior to March 2019,
SSR 19-1p could not possibly have supplied notice to
them of an SSA issue exhaustion requirement on Appointments Clause claims. However, SSR 19-1p does
perhaps reveal that SSA believed, at least in March
2019, that no general issue exhaustion requirement
was already applicable. It also reflects that mandating
exhaustion of these legal issues to preserve access to
the courts for judicial review of this issue was not an
SSA policy priority for ALJ hearings, as opposed to the
Appeals Council, but rather a convenient litigating position of agency counsel when Appointments Clause
cases proceed to court.
Beyond the agency’s myriad and pervasive representations of informality through its regulations and
forms, the ALJs themselves often reinforce expectations of lay-claimant-accessibility and simplicity
through comments and actions at hearings. In a virtually identical challenge to application of issue exhaustion to bar judicial consideration of a claimant’s
constitutional objection to her ALJ’s appointment, the
court recounted an exchange between the ALJ and
claimant at the hearing’s outset:
The ALJ began by telling plaintiff that “[t]his
is just an informal fact-finding process.” Tr.27.
He went on to say:
The way I explain it to people, it’s no
worse than if you and me were just sitting
in your living room talking about your
19
life. This isn’t Law and Order. This isn’t
some kind of show that you’re watching
where every one is getting cross-examined. It’s real low key, no big deal.
Tr. 28. The ALJ’s statement certainly indicates the non-adversarial nature of the hearing. But it goes well beyond that in its benign
characterization of the proceeding. The ALJ
equates the hearing to a casual conversation
in plaintiff ’s home with no legal consequences
at all. The ALJ’s statement thereby reinforces
the propriety of not applying the exhaustion
requirement in this case.
Probst v. Berryhill, 377 F. Supp. 3d 578, 586 (E.D.N.C.
2019), aff ’d sub nom., Probst v. Saul, 980 F.3d 1015
(4th Cir. 2020).
Sometimes ALJs go further and actively discourage claimant representatives from raising issues and
arguments and further developing the record because
of the ostensibly informal nature of these hearings.
See, e.g., Ventura v. Shalala, 55 F.3d 900, 903 (3d Cir.
1995); Rosa v. Bowen, 677 F. Supp. 782, 784-85 (D.N.J.
1988). Some ALJs even discourage pro se claimants
from seeking counsel as undesirable or unnecessary in
these informal hearings. See, e.g., Kendrick v. Sullivan,
784 F. Supp. 94, 102-03 (S.D.N.Y. 1992) (listing cases
demonstrating ALJs’ efforts to induce claimants to proceed without counsel, including one case, Spears v.
Heckler, 625 F. Supp. 208, 209, 218 (S.D.N.Y. 1985),
where the ALJ gave the claimant a “Hobson’s choice”
of proceeding with the hearing pro se or having the
20
case dismissed). Hearings are typically short, often
lasting less than 30 minutes. See, e.g., Watson v.
Shalala, 5 F.3d 1495 (5th Cir. 1993) (Table), 1993 WL
391418, *1 (hearing lasted 17 minutes and full transcript was 9 pages); Carrier v. Sullivan, 944 F.2d 243,
245 (5th Cir. 1991) (hearing lasted 26 minutes); James
v. Bowen, 793 F.2d 702, 705 (5th Cir. 1986) (10 minute
hearing). Approximately 50% of SSI disability claimants and 40% of all claimants lack attorney representation. See 41 SOCIAL SECURITY FORUM 1, 17 (Jan. 2019),
https://nosscr.org/wp-content/uploads/2020/12/1-Jan-2019compressed.pdf ). A total of 285,916 claimants lacked
attorney representation at their ALJ hearings in Fiscal Year 2018. Id.
In short, as developed further in Point II below, the
SSA’s ALJ hearing process, regulations, forms and
long-ingrained adjudicative culture would have to be
altered significantly to accommodate the attendant judicialization resulting from imposition of issue exhaustion at the ALJ hearing level. For example, substantial
legal briefing and presentation of all conceivable legal
issues and arguments at these hearings would inevitably follow.
Finally, SSA’s suggestion of widespread adoption
of a judicial common law ALJ issue exhaustion requirement in the circuits, consistent with this Court’s
reasoning in Sims, is inaccurate. See Resp. Cert. Br. at
10 (citing Mills v. Apfel, 244 F.3d 1, 8 (1st Cir. 2001),
cert. denied, 534 U.S. 1085 (2002); Anderson v. Barnhart,
344 F.3d 809, 814 (8th Cir. 2003); Shaibi v. Berryhill,
883 F.3d 1102, 1109 (9th Cir. 2017)); see also Carr, 961
21
F.3d at 1273-74 nn.3 and 6 (citing the same cases to
make this point). Rather than reflecting principled distinctions of Sims, the very few cases listed each failed
to identify and apply the Sims Court’s reasoning, and
in some instances also reflected misplaced or erroneous application of social security law. For example, in
Mills, the First Circuit declined to address the Sims
Court’s reasoning beyond identifying that ALJ issue
exhaustion was not addressed in Sims and erroneously
opining that only four members of the Sims court rejected Appeals Council issue exhaustion. See 244 F.3d
at 8. Moreover, the First Circuit’s application of issue
exhaustion to bar the argument that the record lacked
evidence of other work in the national economy to
which a claimant incapable of performing past relevant work could make a work adjustment is plain error; SSA regulations and settled caselaw place the
burden of production on this issue firmly on the agency.
See, e.g., Bowen v. Yuckert, 482 U.S. 137, 146 n.5 (1987);
20 C.F.R. §§ 404.1512(b)(3), 416.912(b)(3).
The Eighth Circuit’s Anderson decision made no
mention of Sims and did not apply its reasoning in declining to consider the ALJ’s only limited consideration
of the claimant’s obesity where the clamant supplied
no evidence or assertion of disabling impacts from obesity at the hearing. 344 F.3d at 814. The court’s suggestion that claimants must generally point to and
furnish evidence of their impairments to claim error
on appeal from the agency’s discounting of the impact
of such impairments is addressed expressly elsewhere
in the Social Security Act. Assuming the ALJ has
22
otherwise discharged the affirmative duty to develop
the record and statutory evidence-gathering obligations discussed above, this fact pattern is fully addressable under the statutory obligation to furnish evidence
of a medically determinable impairment in 42 U.S.C.
§ 423(d)(5)(A), or as a substantial evidence issue under
42 U.S.C. § 405(g)—and not common law issue exhaustion.
Similarly, in Shaibi the Ninth Circuit declined to
evaluate this Court’s rationales in Sims. Instead, the
court followed and relied on a pre-Sims, Ninth Circuit
decision, Meanel v. Apfel, 172 F.3d 1111 (9th Cir. 1999),
which did not apply the Sims Court’s reasoning. 883
F.3d at 1109. The court also erred in Shaibi by suggesting that ALJ issue exhaustion is supported by the sixth
sentence of 42 U.S.C. § 405(g), which restricts a remand for the taking of new evidence on judicial review
to situations where the evidence is new, material and
good cause exists for failing to submit the evidence
in the administrative proceedings. 883 F.3d at 1109;
cf. Sullivan v. Hudson, 490 U.S. 877, 885 (1989) (describing unique function of this statutory provision).
Such a limited statutory rule has no bearing on the
propriety of applying judicial, common law ALJ issue
exhaustion in SSA hearings.
If anything, these cases signal adjudicative confusion created through ad hoc, judicially created doctrines modelled after formal adversarial courtroom
procedure, such as issue exhaustion, superimposed
upon a decidedly informal, nonadversarial, inquisitorial hearing system. They underscore the importance
23
of open, deliberative, participatory and comprehensive
examination of any such proposed requirement by
Congress or through agency rulemaking, as invited by
this Court in Sims and discussed in Point II.
3. The futility and constitutional claim
exceptions to general exhaustion requirements are met in Carr/Davis,
thereby satisfying the conditions
for rejecting ALJ issue exhaustion
in accordance with the Sims dissent
The purposes of judicial common law issue exhaustion like other forms of prudential exhaustion—
agency error correction and protection from premature
interference with agency proceedings—are similarly
unserved in these cases. It is undisputed that ALJs
lack authority to address or remedy Appointment
Clause challenges to their own appointments. Indeed,
SSA specifically instructed ALJs to take no action to
address any such claims. See Social Security Administration, Important Information Regarding Possible
Challenges to the Appointment of Administrative Law
Judges in SSA’s Administrative Process, EM-18003
(2018) (“Because SSA lacks the authority to finally decide constitutional issues such as these, ALJs will not
discuss or make any findings related to the Appointments Clause issue on the record.”) (emphasis in original). Accordingly, even if issue exhaustion were
deemed applicable to SSA’s unique hearing process,
the futility and constitutional claim exceptions to
prudential exhaustion doctrine, recognized in other
24
social security statutory or regulatory claim-exhaustion
cases, firmly apply a fortiori under these circumstances to justify rejection of prudential, judicial common law issue exhaustion. See KUBITSCHEK & DUBIN,
at § 7:26 (analyzing and collecting cases on the futility
exception and general waiver of exhaustion principles);
§ 7:28 (same on constitutional issues exhaustion exception); see also id. § 7:29 (same on the improper
agency procedures exhaustion exception). Thus, this
case also fits within the Sims dissenters’ reasoning, delineating settled exhaustion doctrine exceptions and
rationale for when issue exhaustion should not be applied to agency proceedings. Sims, 530 U.S. at 114-19.
Toward the end of its opinion in Sims, the dissent
suggested in passing that SSA ALJ issue exhaustion,
in contrast to Appeals Council issue exhaustion, is a
“nonwaivable, non excusable” presentment requirement in the statute [42 U.S.C. § 405(g)]. 530 U.S. at 117
(“Yet I assume the plurality would not forgive the requirement that a party ordinarily must raise all relevant issues before the ALJ” (citing Shalala v. Illinois
Council on Long Term Care, Inc., 529 U.S. 1, 15 (2000)
“(noting statute’s ‘nonwaivable and nonexcusable requirement that an individual present a claim to the
agency before raising it in court’).”)). In Carr, the Tenth
Circuit expressly relied on and quoted this passage in
its opinion applying issue exhaustion to preclude consideration of petitioner’s appointment’s clause argument. 961 F.3d at 1274. However, the Sims dissent’s
suggestion, relied on in Carr, conflated the statutory
jurisdictional requirement of “presentment” of a
25
concrete “claim” for benefits under the Act before “the
agency,” with the prudential issue exhaustion doctrine
and requirement of raising and developing issues to
the ALJ to preserve those specific issues for judicial review as a matter of judicial common law prudential
principles.
Issue exhaustion is not and never has been a statutory requirement applicable to SSA ALJ hearings, or
one that is “nonwaivable and non-excusable.” Indeed,
the statutory, non-waivable “presentment requirement” in SSA cases is satisfied by having a benefits application denied by the agency and does not even
require ALJ hearing-stage presentation, much less
presentment of all issues that arise from the benefitsclaim to the ALJ. See KUBITSCHEK & DUBIN, at § 7.26
(analyzing and collecting cases on SSA statutory
nonwaivable “presentment” requirement). It is undisputed that the Carr and Davis petitioners had their
applications for benefits denied by SSA, thereby satisfying the nonwaivable statutory jurisdictional presentment requirement. They also appealed their claims for
benefits through all levels of review required to obtain
a final decision under the “waivable” statutory and regulatory exhaustion-of-benefits-claim requirements.
26
II.
IMPOSITION OF AN ISSUE EXHAUSTION
RULE FOR SSA’S UNIQUE HEARING
MODEL, IF DEEMED NECESSARY AND
DESIRABLE BY SSA, SHOULD COME
FROM CONGRESS OR APA NOTICE AND
COMMENT RULEMAKING, NOT FROM
COURTS AND JUDICIAL COMMON LAW
The judicial imposition of ALJ issue exhaustion
would reflect a significant alteration and judicialization of SSA’s uniquely informal hearing process, with
many foreseen and unforeseen additional issues raised
from such adjudicative formalization. Therefore, any
such rule should be implemented through a deliberative, open, participatory, and democratically accountable process by Congress or through APA rulemaking
designed to comprehensively address all such issues,
and not through piecemeal judicial common law. It
has been over 20 years since the Sims plurality invited the agency to promulgate an issue exhaustion
rule, if deemed necessary, as several federal agencies
with formal, adversarial hearing processes have done.
See Sims, 530 U.S. at 108; cf. 10 C.F.R. § 2.341(b)(5)
(Nuclear Regulatory Commission). SSA has not heeded
that invitation. Indeed, in the 65 years since enactment of the disability insurance benefits program, SSA
has never issued a notice of proposed rulemaking on
the subject.4 As described in Point I, current SSA
4
In 1999, government counsel in Sims represented to this
Court that “it has [the issue exhaustion] matter under review”
and “can conclusively resolve [it] by regulation.” Sims, No. 989537, Resp. Cert. Br. at 13.
27
regulations and forms emphasize informality and simplicity of SSA hearings and discourage comprehensive
briefing, argument and exhaustion of legal issues.
A. ALJ Issue Exhaustion Would Significantly Alter SSA’s Uniquely Informal
Hearing Process
Applying issue exhaustion at the ALJ hearing
level would significantly disrupt SSA’s longstanding
and unique informal administrative process. It would
burden ALJs by adding significantly to their already
significant responsibilities and could stress the entire
process beyond the breaking point.
Issue exhaustion at the ALJ hearing stage would
impose considerable additional responsibilities on already heavily burdened ALJs. The potential impact
from an avalanche of legal briefs and the judicialization of the process from issue exhaustion would be significant. If taken seriously by the agency, and not
simply adopted as a procedural trap for claimants to
diminish access to the courts, it would significantly
alter the mass justice function of the current adjudicative model. In turn, this would diminish processefficiency through system delay, and substantially
undermine fairness to claimants.
In the system at present, difficulties facing ALJs
with carrying out their duty to develop a full and fair
evidentiary record abound and are well known. See
Frank S. Bloch, Jeffrey S. Lubbers & Paul R. Verkuil,
The Social Security Administration’s New Disability
28
Adjudication Rules: A Significant and Promising Reform, 92 CORNELL L. REV. 235 (2007); Frank S. Bloch,
Representation and Advocacy at Non-Adversary Hearings: The Need for Non-Adversary Representatives at
Social Security Disability Hearings, 59 WASH. U. L. Q.
349 (1981). Assuring that any and all legal issues are
preserved fairly in the face of an issue exhaustion requirement would be a near-impossible, open-ended responsibility for the corps of Social Security ALJs. This
would impose substantial additional strains on ALJs
and their staffs in such cases, certainly so where a
claimant lacks attorney representation.
More broadly, a judicially imposed issue exhaustion requirement would add harmful stress to a fragile
“mass justice” system. As this Court noted in 1983,
“[t]he Social Security hearing system is ‘probably the
largest adjudicative agency in the western world.’ ”
Campbell, 461 U.S. at 461 n.2 (quoting J. MASHAW ET
AL., SOCIAL SECURITY HEARINGS AND APPEALS (1978) at
xi). See generally, Robert G. Dixon, The Welfare State
and Mass Justice: A Warning from the Social Security
Disability Program, 1972 DUKE L.J. 681 (1972); Jerry
L. Mashaw, The Management Side of Due Process:
Some Theoretical and Litigation Notes on the Assurance of Accuracy, Fairness, and Timeliness in the Adjudication of Social Welfare Claims, 59 CORNELL L. REV.
772 (1974). As respondent pointed out, “[e]ach year,
SSA receives about 2.3 million initial disability claims,
completes over 760,000 ALJ hearings, and pays about
$203 billion in disability insurance benefits and SSI
payments to over 15 million people. Social Security
29
Administration, Annual Performance Report, Fiscal
Years 2019-2021, at 4, 44, 46 (2020).” Resp. Cert. Br. at
8. SSA also noted, in its plan for adjudicating Lucia
challenges before the Appeals Council, “[t]he essential
requirement for any system of administrative review
in a program as large and complex as ours is that it
‘must be fair—and it must work.’ ” SSR 19-1p (quoting
Perales, at 399, and noting specifically that this Court
“has recognized that we must make decisions efficiently in order to ensure that the system continues to
work and serve the American people,” citing Barnhart
v. Thomas, 540 U.S. 20, 28-29 (2003)).
With ALJ hearings regularly plagued by tremendous delay, having to address briefs exhausting all conceivable legal arguments and issues would likely
produce a new round of chronic backlogs. See U.S. Gov’t
Accountability Office, GAO-09-398, Social Security
Disability: Additional Performance Measures and Better Cost Estimates Could Help Improve SSA’s Efforts
to Eliminate Its Hearings Backlog (2009); U.S. Gov’t
Accountability Office, GAO/HEHS-96-87, Backlog Reduction Efforts Underway: Significant Challenges Remain (1996). Hearings could double or triple in time
required, with substantial additional hearing preparation time needed by ALJs and their staffs from advance
research on and processing of comprehensive legal
briefs in cases with attorney representation. This
would produce corresponding reductions in efficiency,
heightened costs and resource allocation demands on
the agency, while imposing significant hardships to
claimants from substantial adjudication delay. Cf.
30
Johnson, 189 F.3d at 563 (“If courts take it upon themselves to adopt waiver rules for the agency that compel
disappointed applicants for disability benefits to bombard the appeals council with full briefs in order to
preserve their right to judicial review, we shall be disserving the agency.”). Indeed, SSA’s mass justice hearing system essentially collapsed from similar chronic
problems under the strain of an ill-fated, limited experiment with adversarial hearings in the 1980s. See
Salling, 641 F. Supp. at 1059-74 (enjoining SSA’s adversarial demonstration project (SSARP) as violative
of due process, finding systemic unreasonable delays,
reduction in decisional quality, adjudicative inconsistency, and fundamental unfairness to claimants);
see Dubin, Torquemada, 97 COLUM. L. REV. at 1320,
n.158.
B. A Regulation Promulgated through Notice and Comment Rulemaking Could
Address Comprehensively the Many
Potential Variations, Open Issues, and
Problematic Non-Uniformity that Would
Result from an Ad Hoc, Judicial ALJ
Issue Exhaustion Rule
“Even if it were appropriate for the judicial branch
to design an issue-exhaustion requirement for Social
Security proceedings, the courts are poorly equipped to
do so in a way that adequately accounts for the interests of both the Administration and claimants.” Bradshaw v. Berryhill, 372 F. Supp. 3d 349, 360 (W.D.N.C.
2019), aff ’d sub nom., Probst v. Saul, 980 F.3d 1015
31
(4th Cir. 2020). For example, under an issue exhaustion
rule what issues must be exhausted to the ALJ? All
conceivable issues? Only those which the ALJ has authority to address (i.e. no constitutional issues or those
from controlling circuit caselaw not interpreted in SSA
Acquiescence Rulings)? Only factual issues? Will the
rule apply to pro se claimants or only represented
ones? Compare Sims, 530 U.S. at 114 (O’Connor, J., concurring) (“it would be unwise to adopt a rule that imposes different issue exhaustion obligations based on
whether claimants are represented by counsel”) with
Shaibi, 883 F.3d at 1109 (judicially imposing ALJ issue
exhaustion only where the “claimant is represented by
counsel”). Should non-attorney representatives be
treated as “counsel” for a rule made applicable only to
represented claimants? See Sears v. Bowen, 840 F.2d
394, 402 (7th Cir. 1988) (presumption of “best case” representation when claimant has attorney-representation at the hearing “does not necessarily hold true
when a claimant is represented by a nonlawyer”).5
Should there be exceptions to issue exhaustion based
on prudential exceptions to the appellate waiver doctrine in adversarial judicial litigation, such as where
“the new issue is purely legal and the record pertinent
to this issue can be developed no further,” United
States v. Krynicki, 689 F.2d 289, 291-92 (1st Cir. 1982)?
Or where “the public interest or justice so warrants,”
Franki Foundation v. Alger-Rau, 513 F.2d 581, 586 (3d
Cir. 1975)? How much of SSA’s other regulations, rules,
5
In FY 2018, 82,296 claimants were represented by non-attorneys. See 41 SOCIAL SECURITY FORUM, at 17.
32
forms and subregulatory guidance would be deemed
misleading, bordering on “bait and switch” notice, by
assuring claimants of an informal, simple and claimant-accessible hearing process, yet requiring formal
hearing-level presentation of even complex constitutional arguments to preserve such issues for court review? How many would require repeal or modification
to accommodate issue exhaustion and satisfy equitable
notice or due process concerns such as the putatively
misleading language in 20 C.F.R. §§ 404.900(b),
416.1400(b) and SSA Form HA-501?
Courts throughout the country will address these
issues in myriad ways producing undesirable non-uniformity in administration of a national program. See
Day, 467 U.S. at 116 (recognizing importance to SSA of
“uniform and consistent adjudication procedures necessary for the administration of a national program”).
These issues and others generated from imposition of
an ALJ issue exhaustion rule would undoubtedly benefit from a comprehensive, deliberative, open and accountable process designed to reach a nationally
uniform result and balance impacts on claimants, the
public, and the agency alike, such as through notice
and comment rulemaking under 5 U.S.C. § 553.
33
C. Congress, or the Agency through APA
Rulemaking, are Best Situated to Determine how an SSA ALJ Issue Exhaustion Rule Should be Implemented;
Chevron Deference Principles Reinforce this Conclusion
The political branches of government are best
suited to determine how an SSA issue exhaustion rule
might be implemented consistent with the SSA’s
uniquely informal, non-adversarial and inquisitorial
scheme, as well as the Act’s core relevant legislative
purposes. They are equally well-suited to consider both
present fiscal and operational realities and projected
inevitable transformations of the SSA adjudicative
process and overall pension system. A constitutionally
enacted congressional issue exhaustion provision
would be dispositive,6 and a duly promulgated issue
exhaustion regulation would be entitled to substantial
deference under Chevron U.S.A. Inc. v. Natural
6
Such a rule is not beyond the level of detail provided by
Congress for SSA. For example, Congress created an issue exhaustion rule applicable to SSA’s limited, special adversarial proceedings to impose penalties against persons who knowingly
make false statements during benefits adjudications. See 42
U.S.C. § 1320a-8(d)(1) (“[n]o objection that has not been urged before the Commissioner of Social Security shall be considered by
the court, unless the failure or neglect to urge such objection shall
be excused because of extraordinary circumstances.”); see generally Jaxson v. Saul, 963 F.3d 645, 648 (7th Cir. 2020) (noting adversarial nature of § 1320a-8 fraud proceedings).
34
Resource Defense Council, Inc., 467 U.S. 837, 842-45
(1984).7
Courts “accord deference to agencies under Chevron . . . because of a presumption that Congress, when
it left ambiguity in a statute meant for implementation
by an agency, understood that the ambiguity would be
resolved, first and foremost, by the agency, and desired
the agency (rather than the courts) to possess whatever
degree of discretion the ambiguity allows.” Smiley v.
Citibank (South Dakota), N.A., 517 U.S. 735, 740-41
(1996) (emphasis added). At present, judicial deference
is owed SSA’s adjudication process-informality regulations in 20 C.F.R. §§ 404.900(b) and 416.1400(b), not
the Justice Department’s convenient litigating positions defending SSA in court. As this Court explained:
We have never applied the principle of
[Chevron] to agency litigating positions that
7
Although the APA exempts matters related to grants and
benefits from public rulemaking requirements, SSA has agreed to
be bound by APA rulemaking, including the requirements of notice and public participation. See 36 Fed. Reg. 2,532 (Jan. 28, 1971)
(publicizing SSA announcement to follow APA notwithstanding
benefit exception in 5 U.S.C. § 553(a)); 47 Fed. Reg. 26,860 (June
22, 1982) (extending announcement). Upon agreeing to be bound
by the APA, an agency may not disregard its provisions on a caseby-case basis. See Rodway v. United States Dept. of Agric., 514
F.2d 809, 814 (D.C. Cir. 1975); see also Administrative Conference
of the United States, Recommendation 92-1: The Procedural and
Practice Rule Exemption from the APA Notice-and-Comment
Rulemaking Requirements, 1992 ACUS 1 (encouraging APA
§ 553 notice and comment rulemaking on process rules and construing the procedural exemption narrowly).
35
are wholly unsupported by regulations, rulings, or administrative practice. To the contrary, we have declined to give deference to an
agency counsel’s interpretation of a statute
where the agency itself has articulated no position on the question, on the ground that
‘Congress has delegated to the administrative
official and not to appellate counsel the responsibility for elaborating and enforcing
statutory commands.’
Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 212
(1988) (citations omitted); see Smiley, 517 U.S. at 741.
Moreover, “[t]he deliberateness of such positions, if not
indeed their authoritativeness, is suspect.” Smiley, 517
U.S. at 741. Because in the instant case, as in
Georgetown, “deference to what appears to be nothing
more than an agency’s convenient litigating position
would be entirely inappropriate,” 488 U.S. at 213; see
Kisor v. Wilkie, 139 S.Ct. 2400, 2417 (2019), an SSA
ALJ issue exhaustion rule should be left to “the noticeand-comment procedures of the Administrative Procedure Act designed to assure due deliberation.” Smiley,
517 U.S. at 741.
---------------------------------♦---------------------------------
36
CONCLUSION
For the reasons discussed above, the judgments of
the courts of appeals should be reversed.
Respectfully Submitted,
JON C. DUBIN
RUTGERS LAW SCHOOL
Counsel of Record
123 Washington Street
Newark, New Jersey 07102-3206
(973) 353-3186
Jdubin@law.Rutgers.edu
December 2020
FRANK S. BLOCH
VANDERBILT LAW SCHOOL
131 21st Avenue South
Nashville, Tennessee
37203-1181
(646) 962-4984
Frank.Bloch@
law.Vanderbilt.edu
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