Opposition Brief — Gronda v. Newman

OCTOBER TERM, 1988

JOHN N. GRONDA, PETITIONER

v.

DON NEWMAN, ACTING SECRETARY OF HEALTH AND

HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

WILLIAM C. BRYSON

Acting Solicitor General

JOHN R. BOLTON

Assistant Attorney General

WILLIAM KANTER

JEREMY R. PAUL

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTIONS PRESENTED

1. Whether, in a social security disability-benefits

case, the Social Security Administration’s Appeals Council

may, consistent with 20 C.F.R. 404.969, review the entire

decision by an administrative law judge (ALJ), and not

merely those aspects appealed by the claimant, if the Ap-

peals Council does not give notice to that effect within 60

days of the ALJ decision.

2. Whether substantial evidence supported the Ap-

peals Council’s decision that petitioner did not qualify for

disability benefits.

(1)

TABLE OF CONTENTS

Page

GED cc usnadsdkaasecdsasucee 6a abowenaevaounion l

NE ee ee ee ee re l

Ee ee e-em RRS URS eum PEN Aare > tw 7 5 8 l

PED Wada cédcesedsssacoenedsvevesevecesseetéuasauas 6

EL. - sc ais win Ghu 6-4 be ae h eoaeu aoe eaen eae ee 10

TABLE OF AUTHORITIES

Cases:

Baker v. Heckler, 730 F.2d 1147 (8th Cir. 1984) ......... 10

Bauzo v. Bowen, 803 F.2d 917 (7th Cir. 1986) .......... 10

Berrios v. HHS, 796 F.2d $74 (ist Cir. 1986) ........... 10

DeLong v. Heckler, 771 F.2d 266 (7th Cir. 1985) ........ 8

Deters v. HEW, 789 F.2d 1181 (Sth Cir. 1986) .......... 10

Fierro v. Bowen, 798 F.2d 1351 (10th Cir. 1986), cert.

Se es PDD 6 b.c 00:00 060 6d betdcesracre 10

Joint Anti-Fascist Comm. v. McGrath, 341 U.S. 123

SN aie Vueae ee aca e én ke ide od eee et 7

Kellough v. Heckler, 785 F.2d 1147 (4th Cir. 1986) ...... 10

Kennedy v. Bowen, 814 F.2d 1523 (llth Cir. 1987) ...... 8

Mathews v. Eldridge, 424 U.S. 319(1976) .............. 7

Mullen v. Bowen, 800 F.2d 535 (6th Cir. 1986) .......... 10

Mullins Coal Co. v. OWCP, No. 86-327 (Dec. 14, 1987) . . 6

Parker v. Bowen, 788 F.2d 1512 (i ith Cir. 1986) ........ 10

Powell v. Heckler, 789 F.2d 176 (3d Cir. 1986) .......... s

Razey v. Heckler, 785 F.2d 172 (7th Cir. 1985), reh’g

denied, 794 F.2d 1348 (1986) ...............0....... 10

Richardson v. Perales, 402 U.S. 389 (1971)... 22.0.6... 4

United States v. Larionoff, 431 U.S. 864 (1977) ......... 6

Statutes and regulations:

Social Security Act, Tit. I], 42 U.S.C. 401 et seg. ........ 1-2

eo a ae led cs au hao va elas 3,9

ey es SE Ls aah a a dlelee aan ae aaen 2

20 C.F.R.:

Sections 404.900-404.996 ........................ u

EE Sib vas bac Wuues Sawn ededeendaneels 2, 6, 7

IV

Statutes and regulations — Continued: Page

Section 404.968(a)(1) .... 6... eee cece eee ee eeee 2

Section 404.969 ... 22.0... cece eee eee eeees 3, 4-5, 6, 8

Section 404.973 .. 0.2... . cee cece eee eee eeeeees 7,8

Section 404.976(a) .......---- eee cree teen tenes 7

Section 404.976(b) ...... 2-6. cece eee eee eeeeees 7

Section 404.979 .. 2.2... ccc cece e eee eer eeeees 4

§Jn the Supreme Court of the Anited States

OCTOBER TERM, 1988

No. 88-924

JOHN N. GRONDA, PETITIONER

v.

DON NEWMAN, ACTING SECRETARY OF HEALTH AND

HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. Al-A7)

is reported at 856 F.2d 36. The order of the district court

(Pet. App. B21-B22) and the Magistrate’s Report and

Recommendation (Pet. App. B1-B19) are unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App. A7)

was entered on September 2, 1988. The petition for a writ

of certiorari was filed on November 30, 1988. The jurisdic-

tion of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. On October 23, 1984, petitioner filed a claim for

disability benefits under Title I] of the Social Security Act,

(1)

eee

2

42 U.S.C. 401 et seq. He alleged that pain in his right knee

had become so severe that he had become unable to work

beginning in 1980. Pet. App. B2. The Michigan Disability

Determination Service arranged for petitioner to be ex-

amined by a physician, whose findings later led a voca-

tional expert to conclude that petitioner could return to

sedentary work. /d. at Bl4. The same conclusion was

reached by a doctor who examined petitioner at the onset

of the knee difficulties that led to his filing for benefits.

Id. at BS. Based on that and other evidence, the state agen-

cy determined that petitioner’s condition did not render

him unable “to engage in any substantial gainful activity”

under 42 U.S.C. 423(d)(1)(A). Tr. 77-78, 83-84.' Peti-

tioner’s claim for disability benefits was accordingly

denied both initially and upon reconsideration. See Pet.

App. Al-A2.

Petitioner appealed the state agency's determination to

the Social Security Administration. On January 23, 1986,

after a hearing, the administrative law judge (ALJ) found

that petitioner did not become disabled in 1980. The ALJ

found, however, that petitioner’s difficulties with his back

had rendered him disabled beginning April 4, 1985, and

that petitioner was therefore entitled to benefits from that

date. See Pet. App. A2, B3. Petitioner was notified that he

had the right to ask the Appeals Council to review the

decision. Tr. 18.

On March 21, 1986, within 60 days of receiving the

notice (see 20 C.F.R. 404.968(a)(1)), petitioner requested

review of the ALJ decision by the Appeals Council pur-

suant to 20 C.F.R. 404.967. Tr. 16. Petitioner explained

his disagreement with the ALJ decision: “The Judge deter-

mined I was not disabled until April, 1985. 1 was disabled

“Tr.” refers to the administrative record.

ee

3

prior to that date. Substantial evidence does not support

the Judges [sic] determination. He did not follow the law.

1 am not appealing the decision that I am disabled after

April, 1985.” See Pet. App. A2. On August 18, 1986, the

Appeals Council wrote to petitioner that his case had been

reviewed pursuant to his request and that the Council had

found no substantial evidence to support the ALJ’s find-

ing that petitioner was disabled at all. /bid.; Tr. 13-15. The

Council informed petitioner that he had 20 days within

which he could submit any additional evidence or a further

written statement as to the facts or the law. Tr. 14. Peti-

‘ tioner did not avail himself of the opportunity. Pet. App.

A2. On October 17, 1986, the Appeals Council issued a

decision reversing the ALJ’s finding of disability, con-

cluding that the evidence established that petitioner had

not lost the ability to perform all substantial gainful activi-

ty for the required 12-month period because he could per-

form work of a light level of exertion. Tr. 9-10. That deci-

sion became the final decision of the Secretary. Pet. App.

A2.

2. Petitioner brought suit under 42 U.S.C. 405(g)

seeking review of the Secretary’s decision. Petitioner con-

tended that the Appeals Council was not authorized to

review the ALJ’s finding that he was disabled after April

4, 1985, because petitioner had not challenged that finding

and the Appeals Council had not notified petitioner within

60 days of the ALJ’s decision that it intended to review the

entire case, as he argued the Council was required to do by

20 C.F.R. 404.969. Pet. App. B17.? Petitioner also con-

* Section 404.969, which is titled “Appeals Council initiates

review,” states: “Anytime within 60 days after the date of a hearing

decision or dismissal, the Appeals Council itself may decide to review

the action that was taken. If the Appeals Council does review the hear-

ing decision or dismissal, notice of the action will be mailed to all par-

ties at their last known address.”

4

tended that no substantial evidence supported the Appeals

Council’s decision. /d. at B14.

The magistrate to whom the district court referred the

case reviewed the medical evidence and concluded that

substantial evidence supported the Appeals Council’s deci-

sion that petitioner was not disabled within the meaning of

the statute. Pet. App. B1-B17. The magistrate found sup-

port in the findings of petitioner’s treating physicians, the

findings of the Secretary’s consulting physician, and the

opinions of the vocational expert. Accordingly, the

magistrate concluded that the Appeals Council’s deter-

mination was within the “zone of choice” that is properly

left to administrative authorities. Jd. at B16-B17.

The magistrate also determined that the Appeals Coun-

cil had acted within its authority in considering issues that

were not specifically raised in petitioner’s request for

review. The magistrate relied on 20 C.F.R. 404.979, which

governs the scope of Appeals Council review, and which

States in pertinent part: “After it has reviewed all the

evidence in the administrative law judge hearing record

and any additional evidence received, * * * the Appeals

Council will make a decision or remand the case to an ad-

ministrative law judge. The Appeals Council may affirm,

modify or reverse the hearing decision or it may adopt,

modify or reject a recommended decision.” Based on that

regulation, the magistrate concluded that petitioner’s deci-

sion to seek Appeals Council review supplied the Council

with authority to review petitioner’s entire case without

providing petitioner additional notice of the issues to be

considered. Pet. App. B18. The district court adopted the

recommended decision of the magistrate on July 8, 1987,

without additional elaboration. /d. at B20-B22.

3. The court of appeals affirmed. Pet. App. Al-A7.

The court first rejected petitioner’s argument that 20

C.F.R. 404.969 precluded Appeals Council review of the

ALJ’s finding of disability beginning April 4, 1985,

because, petitioner said, he did not challenge that finding

and the Council did not give notice that it would review

the finding within 60 days of the ALJ decision. Noting the

general rule “that agency interpretations of self-prescribed

regulations are afforded a considerable presumption of

validity” (Pet. App. A3), the court upheld the Secretary’s

view that Section 404.969 applies only when the Appeals

Council, but not the claimant, has initiated Appeals Coun-

cil review. The court explained that “the task of the Ap-

peals Council is to ensure consistency of results in the

benefits program” and that “there is no fundamental un-

fairness in the Appeals Council’s practice.” Pet. App. AS.

Not only was petitioner “given the opportunity to submit

new evidence and/or arguments,” the court reasoned, but

“[b]ecause the Council unquestionably has the power to

review a decision on its Own initiative, there is no un-

fairness implicit in” the Council’s reviewing the entire deci-

sion On a more limited request for review. /bid.

The court of appeals also held that substantial evidence

supported the Secretary’s decision that petitioner was not

disabled. Pet. App. AS-A6. The court noted that the

magistrate had analyzed all the evidence and recom-

mended that the Appeals Council be affirmed. Jd. at AS.

And the court of appeals itself concluded that “[t]he

record indicates that [petitioner’s] knee and back problems

did not prevent him from exerting himself to the extent

necessary to perform light work, and that his subjective

allegations of pain were disproportionate to his underlying

condition.” /bid. Accordingly, the court held that peti-

tioner was not entitled to disability benefits.

6

ARGUMENT

1. Petitioner’s primary contention (Pet. 11-15) is that

the Appeals Council violated 20 C.F.R. 404.969 by review-

ing aspects of the ALJ decision not challenged by peti-

tioner without notifying him of its intent do so within 60

days of the ALJ decision. The court of appeals correctly

rejected that contention. Pet. App. A3-AS. Although the

Third Circuit has taken a different view, review of the con-

flict by this Court is not warranted.

a. The Secretary’s interpretation of his own regulation

is entitled to substantial deference, especially where, as

here, it has been consistently maintained. See, e.g.,

Mullins Coal Co. v. OWCP, No. 86-327 (Dec. 14, 1987),

slip op. 22-24; United States v. Larionoff, 431 U.S. 864,

872-873 (1977). Here, the Secretary’s interpretation of Sec-

tion 404.969 is plainly reasonable. Nothing in the language

of that regulation suggests that the Appeals Council may

not review an entire ALJ decision when a claimant seeks

limited review pursuant to Section 404.967. Indeed, as the

title of Section 404.969 makes clear (“Appeals Council ini-

tiates review”), the regulation is addressed only to those

cases in which the Council initiates review itself. It has no

application where a claimant seeks review under Section

404.967.

This reading of Section 404.969 is entirely consistent

with the role the regulations give to the Appeals Coun-

cil—“to ensure consistency of results in the benefits pro-

gram” (Pet. App. AS). Nothing in the regulations suggests

that Appeals Council review is restricted by a claimant’s

raising of particular issues, let alone that a 60-day notice is

required where the claimant has appealed the ALJ deci-

sion. In fact, Section 404.969, which expressly provides

for Council-initiated review of ALJ decisions, makes clear

that a claimant has no right of control over the finality of

an ALJ decision. Moreover, related regulations confirm

-

that the Appeals Council may review an entire ALJ deci-

sion, regardless of what issues a claimant raises. See 20

C.F.R. 404.967 (“If you * * * [are] dissatisfied with the

[ALJ’s] hearing decision * * *, you may request that the

Appeals Council review that action.” (emphasis added)),

404.976(a) (“[t]he Appeals Council nay limit the issues it

considers” (emphasis added)), 404.976(b) (“[t]he Appeals

Council will consider all the evidence in the administrative

law judge hearing record”). In this regulatory context, as

the court of appeals explained (Pet. App. A5), petitioner

was not somehow unfairly deprived of a vested right in the

finality of the ALJ’s disability determination.

Nor was there any unfair lack of notice or opportunity

to be heard: petitioner had a full opportunity to defend the

ALJ’s disability finding before the Appeals Council. As

the court of appeals held, petitioner has no grounds to ob-

ject that his benefit application was denied without his

having had the opportunity to submit any evidence or

arguments he thought important. Pet. App. AS. After

reaching an initial conclusion that the ALJ’s decision

awarding benefits was not supported by substantial

evidence, the Council so notified petitioner and offered

him the chance to make additional submissions before the

Council came to a final decision. /bid. “The essence of due

process is the requirement that “a person in jeopardy of a

serious loss [be given] notice of the case against him and

an opportunity to meet it.’” Mathews v. Eldridge, 424

U.S. 319, 348 (1976) (quoting Joint Anti-Fascist Comm. v.

McGrath, 341 U.S. 123, 171-172 (1951) (Frankfurter, J.,

concurring) (brackets in original)). Petitioner was af-

forded the required notice and hearing.’

3 In addition, 20 C.F.R. 404.973 provides: “When the Appeals

Council decides to review a case, it shall mail a notice to all parties at

their last known address stating the reasons for the review and the

issues to be considered.”

8

b. Petitioner correctly observes (Pet. 11) that the

Seventh Circuit is in agreement with the Sixth Circuit with

respect to Section 404.969. DeLong v. Heckler, 771 F.2d

266 (7th Cir. 1985). Petitioner argues that the Eleventh

and Third Circuits, in Kennedy v. Bowen, 814 F.2d 1523

(11th Cir. 1987), and Powell v. Heckler, 789 F.2d 176 (3d

Cir. 1986), have taken contrary positions. Pet. 11. With

respect to the Eleventh Circuit, that suggestion is incor-

rect. As the court of appeals noted (Pet. App. A4), the

Kennedy court did not rely on Section 404.969. Rather,

the court ruled that Section 404.973 required notice of

review of unchallenged issues. 814 F.2d at 1527-1528; see

note 3, supra. Not only is Section 404.973 not at issue in

the present case, but petitioner in fact received notice and

an opportunity to be heard on the disa¥ility question.

The Third Circuit in Powell ruled that the Appeals

Council could not review an entire ALJ decision when the

claimant appealed only part of the decision unless the

Council! gave notice of its intent to do so within the 60-day

period specified in Section 404.969. Although the Powell

ruling conflicts with the decision of the court of appeals in

the present case, that conflict does not warrant this

Court’s review. As the court of appeals in this case ob-

served (Pet. App. A4), Powell rested heavily on the Third

Circuit’s view that claimants were entitled to receive clear

notice that taking an appeal “may jeopardize an entire

benefits award.” Powell, 789 F.2d at 180. Since Powell

was decided, the Secretary has modified the standard form

notice that is sent to claimants when an ALJ decision is

reached. The new notice expressly warns claimants that, if

they take an appeal, the Appeals Council wil/ review the

entire case.* The Third Circuit may reconsider its Powell

decision in light of the new notice. In any event, if a con-

* The notice states: “When you appeal, you request the Appeals

Council to review the decision. If the Appeals Council grants your re-

9

flict persists, it is most appropriately resolved through the

Secretary’s own amendment of his regulations. Interven-

tion by this Court is not called for.

2. Petitioner also contends (Pet. 16) that the court of

appeals erred in finding, in agreement with the district

court and the magistrate, that substantial evidence sup-

ports the Appeals Council’s conclusion that petitioner was

not “disabled” within the meaning of the Social Security

Act. This narrow factual contention raises no issue war-

ranting this Court’s review. In any event, the decision of

the court of appeals is correct. Substantial evidence is

“such relevant evidence as a reasonable mind might accept

as adequate to support a conclusion.” Richardson v.

Perales, 402 U.S. 389, 401 (1971). Here, the record con-

tains testimony from a physician and a vocational expert

that petitioner could return to sedentary work. Pet. App.

BS, B13-Bl14. Moreover, the doctor who _ treated

petitioner’s back problem noted that petitioner had ex-

perienced reduced discomfort after being fitted with a

back brace. Jd. at B12. That evidence amply supports the

Appeals Council’s conclusion that petitioner was not

unable “to engage in any substantial gainful activity” (42

U.S.C. 423(d)(1)(A)).°

quest, it will review the entire record in your case. It will review those

parts of the decision which you think are wrong. It will also review

those parts which you think are correct and may make them un-

favorable or less favorable to you. You will receive a new decision.”

’ Petitioner suggests (Pet. 15) that it is the ALJ’s, not the Appeals

Council's, findings that are to be reviewed to determine whether they

are supported by substantial evidence. 42 U.S.C. 405(g) makes clear,

however, that courts are to uphold “[t}he findings of the Secretary as

to any fact, if supported by substantial evidence”; and the Secretary

has designated the Appeals Council to be his final arbiter of factual

disputes. See 20 C.F.R. 404.900-404.996. Moreover, the overwhelm-

ing weight of authority —including, as petitioner concedes (Pet. 15),

10

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

WILLIAM C. BRYSON

Acting Solicitor General

JOHN R. BOLTON

Assistant Attorney General

WILLIAM KANTER

JEREMY R. PAUL

Altorneys

FEBRUARY 1989

an en banc decision of the Sixth Circuit — supports the conclusion of

the court below that findings of the Appeals Council and not findings

of the ALJ deserve the full judicial respect afforded to a final decision

of the Secretary. Bauzo v. Bowen, 803 F.2d 917, 920-922 (7th Cir.

1986); Mullen v. Bowen, 800 F.2d 535 (6th Cir. 1986); Parker v.

Bowen, 788 F.2d 1512 (11th Cir. 1986); Fierro v. Bowen, 798 F.2d

1351, 1354 (10th Cir. 1986), cert. denied, 480 U.S. 945 (1987); Berrios

v. HHS, 796 F.2d 574, 575 (ist Cir. 1986); Deters v. HEW, 789 F.2d

1181, 1184 (Sth Cir. 1986); Kellough v. Heckler, 785 F.2d 1147 (4th

Cir. 1986); Razey v. Heckler, 785 F.2d 1426, 1429 (9th Cir.), reh’g

denied, 794 F.2d 1348 (1986); Baker v. Heckler, 730 F.2d 1147,

1149-1150 (8th Cir. 1984).

-: US GOVERNMENT PRINTING OFFICE: 1989—241-699.00091