# Petition — Mathews v. Mattern > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1267%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 425 U.S. 987 ## Text Peep | 7 UL v ‘19 ) Synret rt, , Se | i Sh! | a LL Le ——— me: 75-649 Yu the Supreme Court of the Waited States OcTOBER TERM, 1975 F. Davip MATHEWS, SECRETARY OF HEALTH, EpUcATION, AND WELFARE, PETITIONER v. ARLENE MATTERN, ET AL. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ROBERT H. BORK, Solicitor General, REX E. LEE, Assistant Attorney General, HARRIET S. SHAPIRO, Assistant to the Solicitor General, WILLIAM EKANTER, ROBERT S. GREENSPAN, Attorneys, Department of Justice, Washington, D.C. 20530. Page SN Ne i IOI 5 cicccnisciertnintgntcionigilinisiatbiientiabassiantninne 1 2 Constitutional and statutory provisions and I oc oceitnetieminnnann 2 SN Sicaceitadinicsteeecdaliiatiemnbaidiesiieciatnieicinirempebinanatidnaitiens 2 Reasons for granting the writ------------~--- i) II, iso salle tet eemeincipeseeanoneell 16 PE Daemannnantiensrcnesneinnie la IE Diccncniusncnsemnnsnishunninenanindn 9a PE | aCe Le hcmmauhiaaeeds 41a EE Piicudibutibbitdigtbnncnsiaesinenaaen 67a CITATIONS Cases: Arnett v. Kennery, 416 U.S. 154.--------- 13 Buffington v. Weinberger, C.A. 9, No. T4 3118, decided October 1, 1975__------ 9,14, 15 Elhott vy. Weinberger, C.A. 9, No. T4& 1611, decided October 1, 1975_____- 8, 9, 14,15 Goldberg v. Kelly, 397 U.S. 254-----_-_- 7, 9,15 Mitchell v. W. T. Grant Co., 416 U.S. 600_ 13 Richardson vy. Perales, 402, U.S. 389_____- 14 Weinberger v. Salfi, No. 74-214, decided UE Ee TET inscnesleeeetisinideesenstiebonmsabaianiicinnn’ _ 9 Constitution and regulations: United States Constitution, Fifth Amend- IEE cccsdscsliciiamnmnuntnabepdibaiendndilaidatiieaiabinniein 2 595-380—75——-1 II Page Mandamus Act, 28 U.S.C. 1361__..--_---_---- 7 Social Security Act, Title IT, 49 Stat. 622, et seq., as amended and added, 42 U.S.C. 401, et seq.: Section 202(e)(1)(B) (ii), 42 U.S.C. 402 (e)(1)(B)Gi) ---.-----.------------- 4 Section 204, 42 U.S.C. 404_____-_________ 2, 73a Section 204(a)(1), 42 U.S.C. 404(a)(1)--- 2,3 Section 204(b), 42 U.S.C. 404(b)_-----_- 3 Section 205(g), 42 U.S.C. 405(g)_------_- 9, 10 Section 223(c) (2), 42 U.S.C. (Supp. ITT) IIIT. ‘cicistischieghsepdnstiahdiabeeniatsenightiniendiatabinann: 4 er a SE Cncicddimamnckanaaminnsainens 69a Rf ee ee ne ere 5, 15 20 C.F.R. 404.907-404.913___---__-_-_-_- 3, 69a, 72a 20 C.F.R. 404.907-404.917_.__---_-__-_-___- 69a-T3a ee rs Se ilitinaeninaastinediinnmaanmenne 4, T3a Social Security Claims Manual: EE enna 67a IER - TI artnciisicncisantainentnainuiaicipinanniain 3, 67a FE attcenentediaatannen 3, 68a GF OU 4 Gu the Supreme Court of the Wuited States OcToBER TERM, 1975 No. F. Davin MaTuHews, SECRETARY OF HEALTH, EDUCATION, AND WELFARE, PETITIONER U. ARLENE MATTERN, ET AL. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT The Solicitor General, on behalf of the Secretary of Health, Education, and Welfare, petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Third Cir- cuit in this case. OPINIONS BELOW The opinion of the court of appeals (App. A, infra) is reported at 519 F. 2d 150. The opinion and order of the district court (App. C, infra) are reported at 377 F. Supp. 906. JURISDICTION > The judgment of the court of appeals (App. @, tufra) was entered on June 3, 1975. On Angust 21, (1) 2 1975, Mr. Justice Brennan extended the time for filimg a petition for a writ of certiorari to and in- cluding October 1, 1975. On September 23, 1975, Mr. Justice Brennan further extended the time for filing the petition to and including October 31, 1975. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). QUESTIONS PRESENTED 1. Whether the district court lacked jurisdiction to hear this case, 2. Whether the Due Process Clause requires that an oval hearing be held before, rather than after, a Social Security beneficiary’s payments are reduced in order to recoup an erroneous overpayment. CONSTITUTIONAL AND STATUTORY PROVISIONS AND REGULATIONS INVOLVED The Fifth Amendment of the Constitution provides in pertinent part: No person shall he property, without due process of law Section 204 of the Social Seeurity Act, 49 Stat. 624, as amended, 42 U.S.C. 404, and the regulations of the Department of Health, Education, and Welfare, are set forth in pertinent part in Appendix D, infra, °° ° deprived of * ~~ = * STATEMENT 1. Section 204(a2)(1) of the Social Security Act, 42 U.S.C. 404(a)(1), provides that in the event of an erroneous overpayment to a Social Security bene- ficiary, “proper adjustment or recovery shall be made, under regulations prescribed by the Secre- 3 tary [of Health, Education, and Welfare] * * * [by] decreas[ing] eny payment under this subchap- ter [relating to old-age, survivors, and disability insurance | to which such overpaid person is entitled.”’ Section 204(b) of the Act further provides, however, that “there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience.”’ This case concerns the constitutional validity, under the Due Process Clause, of the procedures used by the Sec- retary in enforcing and giving effect to these statu- tory provisions. : Under the Secretary’s procedures, once the Secre- tary has initially determined that an overpayment has been made, the recipient is notified of the determina- tion and given an opportunity to contest the determi- nation in writing and, in addition or in the alternative, to request that the Secretary waive recovery in ac- cordance with Section 204(b) of the Act. He is invited to discuss his case with the local Sociai Security office. See 20 C.F.R. 404.907-404.913; App. D. infra, pp. 69a-—T2a. Adjustment or recovery is deferred pending review of the initial determination. Sections 5503.3 and 5903.5 of the Social Security Claims Manual; App. D, infra, pp. 67a-69a. If the Seeretary decides upon re- view that the initial determination of an overpayment was correct and that waiver of recovery is not war- ranted, recovery is effected by decreasing the bene- ficiary’s subsequent monthly benefit payments until 4 the overpayment has been recouped, as provided by Section 204(a)(1) of the Act. Following the Secretary’s decision upon this initial review, the beneficiary is entitled to further adminis- trative review, including a full evidentiary hearing. 20 C.F.R. 404.917; App. D, infra, p. 73a. If, follow- ing the hearing, it is determined that there had been no overpayment, or that the beneficiary was entitled to waiver of recovery, the beneficiary’s withheld pay- ments are repaid and his subsequent payments re- stored to the appropriate level. 2. Respondent, Arlene Mattern, is a recipient of disabled widows’ benefits pursuant to Section 202(e) (1)(B)(Gi) of the Act... Her period of disability commenced May 18, 1971, and her entitlement to benefit payments commenced in December 1971, due to a statutorily prescribed six-month waiting period.’ Payment was, however, delayed pending reconsidera- tion of her application for benefits. On January 14, 1972, respondent informed her local Social Security district office that she was in financial distress and requested immediate payment of benefits.’ At that time the district office records erroneously indicated that respondent was entitled to benefits as of May 1971. The district office accordingly > The facts are set forth in the opinions of the court of appeals (App. A, infra, pp. 5a-7a) and the district court (App. C, infra, pp. 42a—48a). * The Act has since been amended to provide for a five-month waiting period, 42 U.S.C. (Supp. ITI) 423(¢) (2). * The Social Security Claims Manual, Section 5860 e¢ seq., pro- vides for expedited handling of cases where prompt action is necessary to meet the essential needs of the claimant, 5 forwarded respondent’s request to the regional office (the Philadelphia Payment Center), which certified payment to Mrs. Mattern for $1063.80—an amount covering the period from May to December 1971. Mrs. Mattern was advised of the forthcoming spe- cial payment in a letter of January 28, 1972. That let- ter also stated that a possibility existed of duplicate payments, and that if she received more than one check, she should return one of them to the district office. Prior to receipt of either this explanatory letter or the special payment, Mrs. Mattern received her first regular monthly benefit payment of $119.30, on about January 26, 1972. District office records indicate that Mrs. Mattern’s sister called the office on the latter date; she was advised that the check for $119.30 was correct and that the forthcoming special payment of $1063.80 was incorrect and should be returned. The records also indicate that a district office representative tele- phoned Mrs. Mattern on January 28, 1972, and ad- vised her that she was not entitled to the special payment and should return it. Mrs. Mattern did not return the check and denied receiving any phone call advising her to do so. On July 14, 1972, the Secretary notified respondent that an overpayment had been determined and that her future benefit payments would be withheld until the overpayment was recouped.‘ Respondent was fur- ther informed that she was entitled to contest the Sec- *The Secretary ultimately decided instead to recoup the over- payment by reducing future benefit payments by $30.00 per month. See 20 C.F.R. 404.502(c). 6 retary’s finding of an overpayment or to request the Secretary to waive the overpayment if she was not at fault in receiving it and recoupment would cause her serious financial hardship or be, unfair for some other reason; she was advised to submit any available docu- mentary evidence with her written request. Respond- ent was informed that unless she sought reconsider- ation or waiver within 30 days, recoupment would begin. On August 7, 1972, respondent requested the Sec- retary to waive recovery of the overpayment, con- tending that she had received no telephone call advising her of the incorrect payment, and that she was, therefore, without fault in cashing it.’ The Secretary rejected her allegation of lack of fault, finding, inter alia, that she had heen informed of the impropriety of the payment by telephone on January 28, 1972.° The Secretary adhered to this determination upon review. Respondent did not request further administra- tive review, in which she would have been entitled tu a full evidentiary hearing under the Secretary’s regulations. Instead, on December 29, 1972, respond- ent commenced this suit as a class action in the United States District Court for the Eastern District of Pennsylvania, contending that the Secretary’s pro- ° Respondent also alleged that recovery would cause her hard- ship. The Secretary has not disputed that allegation. * The Secretary also concluded that the portion of the January 28 letter advising respondent of the possibility of duplicate pay- ments should have put her on notice that she had received an incorrect payment, in view of her earlier receipt of the monthly benefit check of $119.30, 7 cedures for recovering overpayments fail to provide due process since they do not afford claimants a pre- recoupment oral hearing. The district court deter- mined that it had jurisdiction under the Mandamus Act, 28 U.S.C. 1361, and certified the case as a class action on behalf of the class of “all persons eligible for Social Security OASDI benefits within the * * * Eastern District of Pennsylvania, whose benefits may be terminated, reduced or otherwise adjusted in order to recoup an over-payment” (App. C, infra, p. 65a). Relying on Goldberg v. Kelly, 397 U.S, 254, the district court declared the Secretary’s recoupment procedure unconstitutional and enjoined the Secre- tary from recovering the overpayment that had been made to respondent until she had been given “an opportunity to present her case at a hearing’’ (App. C, infra, p. 64a). The injunction was later extended to the other members of the class.’ * The district court’s order of June 10, 1974, permanently en- joining the recoupment of overpayments before a hearing, pro- vided that the order would not apply to the following persons: (2) beneficiavies presently residing in the Eastern District of Pennsylvania whose claims are not serviced by the Philadelphia program center, unless the names of such persons are specifically brought to the attention of the defendant and his agents and attorneys; (b) beneficiaries who have received an administrative recoup- ment hearing between January 1, 1973 and April 30, 1974, and who have waived their right to further appeal ; (c) beneficiaries who have not requested an administrative re- coupment hearing, between January 1, 1973 and April 30, 1974, following a final reconsideration and administrative determina- tion to recoup benefits and notilication of the right to request such hearing. The injunction as to the class was stayed pending appeal. 8 The court of appeals affirmed the district court's holdings with regard to jurisdiction and the pro- priety of class relief, and also agreed that the Secre- tary’s recoupment procedures are unconstitutional, but vacated and remanded the case to the district court for the entry of a more limited order that would require a prior oral hearing * only in situations where the Secretary’s decision might turn upon the credibility of witnesses.’ The court of appeals deter- mined that this was such a ease, for respondent’s claim that she was not at fault rested upon her denial that she had received the telephone call advising her that she was not entitled to the special payment and should return it.”° *In describing the type of hearing required, the court of ap- peals emphasized that “the pre-recoupment hearing need not take the form of a judicial or quasijudicial trial” (App. A, infra, p. 35a). The court identified seven essential elements of such hear- ings, including “an opportunity for all parties to receive and chal- lenge the de -ision maker’s report before it becomes final” (#d. at 36a—37a). * For purposes of convenience, the court distinguished two eate- gories of overpayment disputes, “reconsideration” cases and “waiver” cases. The former generally involve the correctness of the Secretary’s determination that an overpayment has occurred (e.g., whether the computation of an earnings statement is correct, or whether two benefit checks have been received rather than one), and ordinarily can be resolved by analysis of documentary evi- dence, In “waiver” cases, however. issues of credibility are often involved in determining a claimant’s allegation of lack of “fault” in receiving an overpayment. The court determined, however, that the constitutional necessity of a prior hearing turns upon the par- ticular facts of each case and not upon whether the case is one of “reconsideration” or “waiver” (App. A, infra, pp. 29a-36a). *° On October 1, 1975, subsequent to the decision below, the Ninth Circuit, in the consolidated cases of E//iott y. Weinberger, 9 REASONS FOR GRANTING REVIEW This case raises questions similar to those now before the Court in Mathews v. Eldridge, No. 74-204, arened October 6, 1975. As in Eldridge, the district court’s assertion of jurisdiction here is inconsistent with this Court’s decision in Weinberger v. Salfi, No. 74-214, decided June 26, 1975, Also as in Eldridge, although the competing factors to be weighed here may be somewhat different, the court of appeals’ decision on the constitutional merits represents an unwarranted and improper extension of the rule of Goldberg v. Kelly, 397 U.S. 254, to the Social Security program and, if not reversed, would impose a sub- stantial and costly burden upon the administration of that program that would be wholly disproportion- ate to the relatively insubstantial private interests that would thereby be served. 1. This Court in Salfi held that the district courts have no jurisdiction over ¢laims, such as respondent’s, arising under Title II of the Social Security Act, “save as provided [by Section 205(g¢) of] the Act” No. 74-1611, and Buffington v. Weinberger, No, 74-8118, held the Secretary’s pre-recoupment procedures unconstitutional on grounds similar to those relied upon by the court of appeals in the instant case and sustained an injunction entered by the district court restraining the Secretary from enforcing his regulations throughout the nation with respect to old age and survivors’ bene- fits (with the exception of the Eastern District of Pennsylvania, which is involved in this case). The effect of the rulings in the instant case and in ///iott and Buffington is to subject the Secre- tary to a nationwide injunction against recovering overpayments without first affording beneficiaries a pre-recoupment oral hear- ing. The government intends to file a petition for a writ of cer- tiorari in those cases? 10 (slip op., p. 6). In turn, Section 205(g) confines the courts’ jurisdiction to “any final decision of the Sec- retary made after a hearing * * *.” The interim de- cision of the Secretary sought to be reviewed here— the order reducing respondent’s monthly payments pending further administrative review—was not a ‘‘final decision of the Secretary,” nor was it made “after a hearing.” Respondent could have obtained administrative re- view of the Secretary’s interim decision, and a full evidentiary hearing would have been afforded at that final review stage. It is the Secretary’s final decision at that stage, and not his intermediate decision challenged here, that is judicially reviewable under Section 205(g). We have elaborated upon this ques- tion in our supplemental and reply brief, and our separate reply brief, in Eldridge, and also in our brief in Norton v. Mathews, No. 74-6212, question of juris- diction postponed until the hearing on the merits, June 30, 1975, upon all of which we rely here.” 2. The Secretary’s present procedures governing the recovery of Social Security overpayments provide a fair and reliable basis for determining whether an overpayment has been made and, if so, whether re- covery should be waived. The social costs entailed by the requirement of a pre-recoupment evidentiary hear- ing would significantly outweigh any social benefits ‘Copies of these briefs are being furnished to respondent’s counsel, 2 11 that would accrue from such a requirement. Accord- ingly, the Secretary’s procedures afford due process and should be sustained. a. The present procedures are fair and reliable. The Secretary’s pre-recoupment procedures afford the beneficiary an ample opportunity to present his case and avoid any improper reduction of benefits in the vast majority of cases. The process begins with an initial determination by the Secretary that an over- payment has been made. The beneficiary is notified by mail of the determination, and is advised of his right to request reconsideration or waiver. If the beneficiary responds within 30 days, recoupment is deferred until the Secretary has acted on the request.”” In seeking reconsideration or waiver, the beneficiary may consult personally with officials at the Social Security district office, which is generally located near his home. The beneficiary may also include whatever documentation he wishes in support of his claim, and printed forms are made available to facilitate the pre- sentation of the beneficiary's case. It is only after the Secretary has made a fuil evaluation of the beneficiary’s case, and has adhered to his initial determination that recoupment is appro- priate, that the process of recovering the overpay- #2 Any objection at all within the 30-day period is sufficient to postpone recoupment. Even if the beneficiary does not make a request for reconsideration or waiver within that period, any such request made within six months will result in a resumption of benefits until the request has been acted on (App. D, infra. pp. 67a-69a, 71a). 12 ment actually begins. As soon as the beneficiary is advised of the Secretary’s determination, he may re- quest a full evidentiary hearing with respect to his claim. This procedure assures that the beneficiary knows the basis for the Secretary’s proposed action and en- ables the beneficiary to present his objections to that action before it is taken. Although these objections must be submitted in written form, the beneficiary can discuss his case with local Social Security officials, who are responsible for assisting him in providing all the information necessary to evaluate his case. Finally, any beneficiary who is still dissatisfied with the Secretary’s decision upon initial review has the right to a full evidentiary hearing after recoupment has started. If the Secretary’s decision is reversed after that hearing, the beneficiary receives full restitu- tion of any benefits previously withheld. These procedures, we submit, adequately protect the heneficiary’s interest in avoiding improper reduction of payments. The court of appeals’ decision to the con- trary rests in large part upon the assumption that requests for waiver, made on the ground that the reci- pient was not at fault in receiving the overpayment and that recoupment would defeat the purposes of the act or be inequitable, cannot be properly evaluated, even as a preliminary matter, without a prior oral hearing to resolve questions of credibility. Two fac- tors, however, actually underscore the essential fair- ness of the Seeretary’s procedures in such cases. 13 First, the beneficiary can personally appear before and consult with the local Social Security officials who are responsible for developing the facts concern- ing his claim (App. D, infra, pp. 68a-69a). Thus, the heneficiary does in fact have an opportunity for a pre- recoupment face-to-face confrontation with officials who may evaluate his creaibility in the course of gath- ering the facts necessary for regional office review. Second, waiver eases by definition involve situations in which the beneficiary acknowledges that he was not entitled to receive the payment but requests the See- retary to forgive repayment. In such circumstances, the Constitution does not bar the Secretary from pro- ceeding to collection, subject to a possible return of the moneys if the beneficiary’s equitable contentions are sustained upon a subsequent oral hearing. Cf. Arnett v. Kennedy, 416 U.S. 134, 150-158: Mitchell vy. W. T. Grant Co., 416 U.S. 600. b. The social costs of granting pre-recoupment oral hearings would significantly outweigh any social bene- fits of such a procedure. The adverse impact upon the Social Security Ad- ministration of the decision here may well exceed that of the court of appeals’ decision in Eldridge. Approximately 1,250,000 overpayments are made each year.” To require an oral hearing before recoupment in any significant percentage of these cases would ** In contrast, approximately 33,500 decesions that disability has terminated are made each year (E/dridge Supp. and Reply Brief, p- 14,n. 7). 14 significantly increase the complexity and cost of the administrative process without any comparable off- setting advantages. Cf. Richardson v. Perales, 402 U.S. 389. For not only will the additional hearings be extremely costly, but the risk of unrecoverable over- payments will increase. We estimated that slightly more than 9,000 hear- ings a year are at stake in Eldridge (Hidridge Supp. and Reply Brief, p. 18); a substantially larger nun- ber may be at stake here. There are currently ap- proximately 50,000 waiver requests annually, of which roughly half ordinarily are granted. Of the 25,060 which are denied, it is impossible to say with any precision how many involve issues of credibility. In any event, in view of the volume of cases involved, it is not feasible to make a case-by-case review to determine whether a hearing is constitutionally neces- sarv under the standards established by the court of appeals. Therefore, under the compulsion of the out- standing injunctions in Buffington and Elliott (see note 10, supra), the Secretary is informing all over- paid beneficiaries that upon request they will receive an evidentiary hearing before recoupment is initiated. The Secretary has not yet analyzed the response to the new procedure, but any substantial increase in the number of hearings held will entail a significantly increased expenditure of funds and employment of 15 manpower to conduct these proceedings. In addition, prolonging the pre-recoupment period probably will increase the losses incurred as a result of unrecovered overpayments, which in fiscal year 1971 alone amounted to 5 million dollars.” In contrast, individual beneficiaries who are deter- mined to be entitled to waiver are unlikely to benefit appreciably from the more elaborate and expensive procedures required by the courts below. Under the Secretary’s regulations, such beneficiaries are mace whole for any incorrect pre-hearing recoupment by the simple expedient of a return of the recouped moneys. Moreover, the impact of a pre-hearing re- conpment order upon such a beneficiary is unlikely to be severe, for the Secretary adjusts the amount de- ducted from a_beneficiary’s monthly payment to alleviate severe financial need.” The pre-hearing economic impact on the individual is thus even less here than where the Secretary orders the interim termination of disability benefits as in Eldridge. ** The delay will be greater, and the effect therefore more severe, if the beneficiary must be accorded an opportunity to object to a proposed decision before it becomes final (see note 8, supra). No such opportunity is required either by Goldberg v. Kelly, supra, or by the Ninth Circuit's decision in Buffington and E/liott. ** The regulations permit repayment of as little as $10 a month, 20 C.F.R. 404.502(c). The monthly deductions here were adjusted to $30 a month so that recovery of the total amount would be achieved over 36 months. 595-380 =! u te 16 CONCLUSION For the foregoing reasons, the petition for a writ of certiorari should be granted. Respectfully submitted. Rosert H. Bork, Solicitor General. Rex E. Ler, Assistant Attorney General. Harrier 8. S4aprro, Assistant to the Solicitor General. WILLIAM KANTER, Rosert 8. GREENSPAN, Attorneys. OcTOBER 1975. APPENDIX A United States Court of Appeals, Third Circuit No. 74-1776 ARLENE MATTERN, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, APPELLEE v. CaspaR W. WEINBERGER, SECRETARY OF HEALTH, EpuCATION AND WELFARE, APPELLANT Argued January 24, 1975; Decided June 3, 1975 Before Van Dusen, Gippons AND Hunter, Circuit Judges. Opinion of the Court Hunter, Circuit Judge: This appeal involves a challenge to the constitu- tionality of the procedure established by the Secretary of Health, Education and Welfare, pursuant to section 204 of the Social Security Act,' for the recoupment of 142 U.S.C. § 404 (1970): “(a) Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, as follows: “(1) With respect to payment to a person of more than the correct amount, the Secretary shall decrease any payment under (la) (2a) alleged overpayments of benefits. The district court, 377 F. Supp. 906 (E.D.Pa., 1974), found the recoup- ment procedure violative of due process since it per- mitted an adjustment or reduction of social security payments without affording the beneficiary the right to a prior oral hearing. While we are in substantial agreement with the opinion of the district court, we vacate and remand for entry of a new order consistent with this opinion. I. RECOUPMENT PROCEDURE Section 204(a) of the Act directs the Secretary to recover overpayments of social security benefits through recoupment of future benefit payments. Sec- tion 204(b), however, requires the Secretary to ‘“‘waive” recoupment under certain circumstances. It provides that there shall be no recoupment where the overpaid beneficiary is “without fault”’* and the re- coupment either would ‘‘defeat the purpose” of Title II of the Act * or would be ‘‘against equity and good conscience.” * Pursuant to these statutory directives, the Secretary has promulgated regulations providing for a four-step process of administrative review: an this subchapter to which such overpaid person is entitled, or shall require such overpaid person or his estate to refund the amount in excess of the correct amount, or shall decrease any payment under this subchapter payable to his estate or to any other person on the basis of the wages and self-employment income which were the basis of the payment to such overpaid person, or shall apply any combination of the foregoing. * * * * * “(b) In any case in which more than the correct amount of pay- ment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience.” Footnotes 2 and 3 on p. 3a; footnote 4 is on p. 4a. (3a) initial determination that there has been an overpay- ment and that there is no basis for waiver of recovery (20 C.F.R. § 404.905) ; a reconsideration of that initial *“Fault” is defined in 20 C.F.R. § 404.507, which provides: “*Fault’ as used in ‘without fault’ (see §§ 404.506 and 405.355) applies only to the individual. Although the Administration may have been at fault in making the overpayment, that fact does not relieve the overpaid individual or any other individual from whom the Administration seeks to recover the overpayment frora liability for repayment if such individual is not without fault. In determin- ing whether an individual is at fault, the Administration will con- sider all pertinent circumstances, including his age, intelligence, education, and physical and menial condition. What constitutes fault (except for ‘deduction overpayment’—see § 404.510) on the part of the overpaid individual or on the part of any other in- dividual from whom the Administration seeks to recover the over- payment depends upon whether the facts show that the incorrect payment to the individual or to a provider of services or other person, or an incorrect payment made under section 1814(e) of the Act [42 U.S.C. § 1395f(e)], resulted from: “(a) An incorrect statement made by the individual which he knew or should have known to be incorrect ; or “(b) Failure to furnish information which he knew or should have known to be material; or “(c) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorrect.” * The phrase “defeat the purpose” of Title II is defined in 20 C.F.R. § 404.508, which provides: “(a) General ‘Defeat the purpose of title IT [42 U.S.C. § 401 et seq.],’ for purposes of this subpart, means defeat the purpose of benefits under this title, i.e., to deprive a person of income re- quired for ordinary and necessary living expenses, This depends upon whether the person has an income or financial resources suf- ficient for more than ordinary and necessary needs, or is dependent upon all of his current benefits for such needs. An individual’s ordinary and necessary expenses include: “(1) Fixed living expenses, such as food and clothing, rent, mortgage payments, utilities, maintenance, insurance (e.g., life, accident, and health insurance including premiums for supple- (4a) determination upon request by the recipient (Jd. § 404.914) ; an administrative hearing de novo before an administrative law judge (Jd. § 404.917) ; and re- view by the Appeals Council of the Social Security Administration (Id. § 404.945). Judicial review is then available, under section 205(g) of the Act, 42 U.S.C. §405(g), to claimants who have exhausted their administrative remedies. While a claimant thus has a right to a full eviden- tiary hearing at the third step in the administrative process, such a hearing is not available until after the recoupment process has begun. When a claimant 1s ‘ notified of the initial adverse determination and of mentary medical insurance benefits under title XVIII [42 U.S.C. § 1395 et seq.]), taxes, installment payments, etc. ; “(2) Medical, hospitalization, and other similar expenses ; “(3) Expenses for the support of others for whom the individual is legally responsible; and “(4) Other miscellaneous expenses which may reasonably be considered as part of the individual’s standard of living. “(b) When adjustment or recovery will defeat the purpose of title II [42 U.S.C. $401 et seq.]. Adjustment or recovery will defeat the purpose of title II [42 U.S.C. § 401 et seq.] in (but is not limited to) situations where the person from whom recovery is sought needs substantially all of his current income (including social security monthly benefits) to meet current ordinary and necessary living expenses.” *“ Ce ee APPENDIX C In The United States District Court For The Eastern District of Pennsylvania (Civil Action No, 72-2522; April 30, 1974) ARLENE M. MAtTrern v, Caspar WEINBERGER, UNITED States SECRETARY OF HEALTH, Epucation, AND WELFARE Opinion and Order TROUTMAN, J. This action challenges the procedure utilized by the secretary of Health, Education, and Welfare [the Secretary], pursuant to Section 204 of the Social security Act [the Act], to adjust or reduce social security benefits in order to recoup an alleged over- pavinent. Specifically, plaintiff, on behalf of herself and others similarly situated, secks injunctive and declaratory relief, requiring the Secretary to conduct an evidentiary hearing prior to adjusting er reducing social security benefits to which plaintiff is entitled under Title IL of the Act. 42 U.S.C. $401 et seq. Plaintiff challenges the failure to provide an oral hearing prior to the recoupment of an alleged over- payment on the grounds that it is contrary to the pur- pose of the Act and violative of the Fourteenth Amendment to the Constitution. Presently before the Court are (1) defendant’s motion to dismiss the (tia) (42a) complaint for lack of jurisdiction, (2) plaintiff's motion for a class action determination, (3) plaintiff's motion to convene a three-judge court and (4) cross- motions for summary judgment. The relevant facts are not in dispute and are as follows: Plaintiff, at the time this action was filed, was fifty-three years old and is presently disabled. In 1971, she filed an application for disabled widow’s benefits pursuant to 42 U.S.C. §402(e) (1) (B) (ii) on the social security earnings record of her deceased husband. Her application was initially denied, but, upon reconsider- ation, she was found entitled to benefits effective De- cember 1971.' Thereafter, plaintiff informed the social security office that she was in financial distress. Upon investigation, the office forwarded a request for a critical case payment to the Philadelphia payment center on the basis of plaintiff's alleged condition of hardship. The payment center failed to consider the statutory waiting period and erroncously certified pay- ment of monthly benefits retroactive to May 1971 rather than December 1971. A check in the amount of $1063.80 was issued to plaintiff. Prior to the receipt of this check, plaintiff received another check in the amount of $119.30, representing her monthly entitle- ment. According to defendant, plaintiff was notified that the special check for $1063.80 was in error and should be returned. Upon plaintiff’s failure to return the check, she was notified of the alleged over-payment and the Secre- ‘It was determined that plaintiff established a period of dis- ability beginning on May 18, 1971. She was not entitled .o bene- fits as of that date, because the Act, at that time, provided for a six-month waiting period between the onset date and entitlement to benefits. The Act. as amended in 1972. provides for a five-month waiting period, 42 U.S.C. § 425(¢) (2). (43a) tary’s intent to adjust or reduce the amount of her monthly check in order to recoup the overpayment. Vlaintiff, thereafter requested waiver of the recovery action and completed a ** without fault” questionnaire. In her response, plaintiff admitted receiving the check for $1063.80, which she cashed to pay her bills, but de- nied the receipt of any notice that the check was not correct until she received the letter, indicating the Sec- retary’s intent to recoup the over-payment. By letter dated October 20, 1972, plaintiff was advised that re- covery of the overpayment could not be waived be- cause she was not without fault and she was further advised of her right to request reconsideration of this determination. On November 20, 1972, plaintiff filed a request for reconsideration, and as a result of this request, the adjustment action was not implemented pursuant to Section 5503.5 of the Claims Manual. On December 29, 1972, plantiff commenced this civil ac- tion. Subsequently, the reconsideration decision up- held the initial determination on the ground that plaintiff was not without fault and, therefore, liable for recovery of the overpayment. In order to alleviate undue hardship, recovery by partial adjustment of $30 per month was recommended, commencing with her January 1973 benefit. As a result of this notice, the parties entered into a stipulation continuing plain- tiff’s full benefits until the disposition of this action. Section 204 of the Act, 42 U.S.C. § 404, authorizes the Seeretary, under regulations prescribed by him, to recover incorrect overpayments or to adjust bene- fits to provide for such recovery. Section 204 provides in pertinent part: (a) Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this sub- (44a) chapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, as follows: (1) With respect to payment to a person of more than the correct amount, the Secretary shall decrease any payment under this sub- chapter to which such overpaid person is en- titled, or shall require such overpaid person or his estate to refund the amount in excess of the correct amount, or shall decrease any pay- ment under this subchapter payable to his estate or to any other person on the basis of the wages and self-employment income which were the basis of the payments to such overpaid person, or shall apply any combination of the foregoing... .” (b) In any ease in which more than the eorrect amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience. Under subsection (b) of Section 204, no adjustment or recovery shall be made where such person is with- out fault? and such adjustment or recovery would 2 “Pault” is defined in 20 CFR § 404, 507 which provides: “ ‘Fault’ as used in ‘without fault’ (see $$ 401.506 and 405.355) applies only to the individual. Although the Administration may have been at fault in making the overpayment, that fact does not relieve the overpaid individual or any other individual from whom the Administration seeks to recover the overpayment from liability for repayment if such individual is not without fault. In determining whether an individual is at fault. the Administra- tion will consider all pertinent circumstances, including his age, intelligence. education, and physical and mental condition. What constitutes fault (except for ‘deduction overpayments’—see § 404. 510) on the part of overpaid individual or on the part of any other (45a) defeat the purpose of Title IT of the Act* or would be against equity and good conscience.* individual from whom the Administration seeks to recover the overpayment depends upon whether the facts show that the in- correct payment to the individual or to a provider of services or other person, or an incorrect payment made under section 1814 (e) of the Act [42 U.S.CLA. § 1395f(e) ], resulted from: | “(a) An incorrect statement made by the individual which he knew or should have known to be incorrect : or : “(b) Failure to furnish information which he knew or should have known to be material ; or | “(e) With respect to the overpaid individual only, acceptance of a payment which he either knew or could have been expected to know was incorect.” . * The phrase “defeat the purpose” of Title II is defined in 20 CFR § 404.508, which provides: : “(a) General. ‘Defeat the purpose of title IT [42 U.S.C.A. § 401 et sey. |,’ for purposes of this subpart, means defeat the sauneen of benefits under this title, i.e., to deprive a person of income required for ordinary and necessary living expenses. This depends upon whether the person has an income or financial resources sufficient for more than ordinary and necessary needs, or is dependent upon all of his current benefits for such needs. An individual’s ordinary and necessary expenses include : . a “(1) Fixed living expenses, such as food and clothing, rent mortgage payments, utilities, maintenance, insurance (eg. life, accident, and health insurance including premiums for supple- mentary medical insurance benefits under title XVIII [42 U.S.C.A $1595 et seq.|). taxes, installment payments, ete. ; _ “(2) Medical, hospitalization, and other similar expenses ; “(3) I:xpenses for the support of others for whom the indi- vidual is legally responsible ; and “(4) Other miscellanecus expenses which may reasonably be considered as part of the individual’s standard of living. . “(b) When adjustment or recovery will defeat the purpose of title IT [42 U.S.CLA. $401 et seq.]. Adjustment or recovery will defeat the purpose of title IT [42 U.S.C_A. § 401 et seq.] in (but is not limited to) situations where the person from whom recovery is sought needs substantially all of his current income (including (46a) See also 20 CFR § 404.506. 20 CFR § 404.901 et seq. of the Social Security Administration regulation sets forth a four-step administrative process by which a claimant may obtain review of a decision to adjust benefits in order to recoup an overpayment. Following an initial determination that an over-payment has heen made and that there is no basis for waiver of recovery, the claimant may obtain reconsideration pur- suant to 20 CFR 404.914. Subsequent to a reconsid- ered determination, an individual may request a hear- ing de novo before an administrative law judge, 20 CFR 404.917, and review by the Appeals Council of the Social Security Administration. 20 CFR 404.945. Thereafter, a claimant may seek judicial review in the district courts pursuant to §205(g) of the Act. 42 U.S.C. § 405(g). During the period that a claimant is pursuing his administrative remedies, there 1s no pro- vision in the Act or in the regulations, requiring that a hearing must be conducted prior to implementation of any adjustment or recovery. Section 5503.5 of the Claims Manual provides that where reconsideration of an initial determination is requested, “withholding to recoup the overpayment will be further deferred and social security monthly benefits) to meet current ordinary and necessary living expenses.” ‘Against equity and good conscience” is defined in 20 CFR $ 404.509, which provides: “*Against equity and good conscience’ means that adjustment or recovery of an incorrect payment (under title II or title XVII [42 U.S.C.A, § 401 et seq. or § 1395 et seq.]) will be considered in- equitable if an individual, because of a notice that such payment would be made or by reason of the incorrect payment, relinquished a valuable right (examples (1), (2) and (5) or changed his posi- tion for the worse (examples (3). and (4)). In reaching such a determination, the individual’s financial circumstances are irrelevant.” (47a) payment will be continued” until a decision upon re- consideration is made. Thus, under the regulations and provisions of the Claims Manual, adjustment of bene- fits in order to recoup an overpayment may be imple- mented following a decision upon reconsideration and there is no provision for a hearing de novo before an administrative law judge prior to the implementation of the adjustment. I. JURISDICTION In plaintiff’s amended complaint, jurisdiction has heen asserted under 28 U.S.C. § 1331, 28 U.S.C. § 1345(4), 28 U.S.C. § 1346 and 28 U.S.C. § 1361. In his motion to dismiss for lack of jurisdiction, defend- ant argues that none of the above provisions confer jurisdiction on this court and that plaintiff's action is harred by Sections 205(g) and 205(h) of the Act. 42 U.S.C, § 405(g) (h).* * Section 205(g) of the Act provides: “(g) Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Sec- retary may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the Dis- trict of Columbia. As part of his answer the Secretary shall file a certified copy of the transcript of the record including the evi- dence upon which the findings and decision complained of are based. The court shal] have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or re- versing the decision of the Secretary, with or without remanding 595-380—-75——-5 (48a) Section 205(g) provides that in order to obtain judi- cial review of a decision of the Secretary, it must be_ a final decision made after a hearing to which the claimant was a party, thereby requiring exhaustion of the cause for a rehearing. The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive, and where a claim has been denied by the Secretary or a decision is rendered under subsection (b) of this section which is adverse to an individual who was a party to the hearings before the Secretary, because of failure of the claimant or such individual to submit proof in conformity with any regulation prescribed under subsection (a) of this section, the court shall review only the question of conformity with such regulations and the validity of such regulations. The Court shall, on motion of the Secretary made before he files his answer, remand the case to the Secretary for further action by the Secretary, and may, at any time, on good cause shown, order additional evidence to be taken before the Secretary, and the Secretary shall, after the casé is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or its decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testi- mony upon which his action in modifying or affirming was based. Such additional or modified findings of fact and decision shall be reviewable only to the extent provided for review of the original findings of fact and decision, The judgment of the court shall be final except that it shall be subject to review in the same manner as judgment in other civil actions. Any action instituted in ac- cordance with this subsection shall survive notwithstandmg any change in the person occupying the office of Secretary or any . vacancy in such office.” Section 205 (h) of the Act, 42 U.S.C. § 405(h) provides: “(h) The findings and decisions of the Secretary after a hear- ing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Sec- retary, or any officer or employee thereof shall be brought under sectiun 41 of Title 28 to recover on any claim arising under this subchapter.” (49a) administrative remedies, Section 205(h) specifically provides that no action against the Secretary shall be brought under Section 41 [now 28 U.S.C. § 1331] to recover on any claim arising under Title II of the Act. Defendant argues that Section 205(g) provides the exclusive means by which a claimant.can obtain judi- cial review of a decision of the Secretary. Since plain- tiff did not seek a de novo hearing before an admin- istrative law judge following the denial of her request for reconsideration, it is argued that plaintiff's action is barred for failure to exhaust her administrative remedies. In addition, defendant argues that this ac- tion is barred by the specific language in Section 205 (h). We conclude that neither the doctrine of exhaus- tion of remedies nor the specific provision of Section 205(h) bar plaintiff’s action under the facts of this case. | First, exhaustion is inapplicable beeause plaintiff claims that the statute and regulations promulgated thereunder are constitutionally insufficient in that they fail to provide a hearing prior to recoupment of an over-payment, Where a plaintiff attacks the constitu- tionality of the statute under which an administrative agency acts, the attack docs not turn upon a factual determination requiring administrative expertise and the doctrine of exhaustion of administrative remedies, therefore, does not apply. See Gainville v. Richardson, [319] F.Supp. 16, 18 (D. Mass, 1970), and cases cited therein. Secondly, the prohibition of Section 205(h), har- ring any action against the Seeretary under Section 1331 of Title 28, is inapplicable in that plaintiff is not seeking to ‘‘recover on any claim” arising under Title If of the Act. The merits of plaintiff’s claim are not before the Court and we are not asked to BEST COPY AVAILABLE (50a) review any decision of the Secretary. Plaintiff’s sole claim is that she is entitled to a hearing prior to a determination to reduce or adjust her benefits, and plaintiff seeks declaratory and injunctive relief to remedy the constitutional deficiencies in the Secre- tary’s procedure. Thus, plaintiff’s action is barred by neither Section 205(g) nor Section 205(h). Gainville v. Richardson, supra, at 18.° Plaintiff initially argues that this Court has juris- diction under 28 U.S.C. §1331(a),’ providing original jurisdiction over actions arising under the Constitu- tion, laws or treaties of the United States, where the amount in controversy exceeds $10,000. It is undis- puted that the amount in controversy in this case is $1063.80. In order to meet the $10,000 amount in con- 6In Johnson v. Robinson, 415 U.S. 361 (1974). the Supreme Court considered the threshold issue whether 38 U.S.C. § 211(a), which pro! ibit judicial review of the decisions of the Admin- istrator of Veterans’ Affairs deprived the Court of jurisdiction over plaintiff's constitutional claim challenging the denial of educational benefits to conscientious objectors under the Vet- erans’ Readjustment Act of 1966. 38 U.S.C. §§ 1651-1697. The Court held that Section 211(a) does not bar judicial consider- ation of questions concerning the constitutionality of veterans’ benefits legislation but bars only actions seeking review of de- cisions of law or fact that arise in the administration of the act. To the extent Section 211(a) is similar to Section 205(h) of the Social Security Act, the analysis utilized by the Supreme Court in Johnson supports our conclusion that Section 205(h) does not bar judicial consideration of questions concerning the constitutionality of social security administration regulations and procedures. 728 U.S.C. § 1331(a) provides: “(a) The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum of value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States.” (5la) troversy requirement of Section 1331, plaintiff claims in her memorandum that she suffered physical and emotional distress as a result of the Secretary’s action. Plaintif€’s amended complaint does not, however, it- clude a request for any relief to compensate her for her suffering. Assuming arguendo, that this claim were properly before the Court, we would, nonethe- less, conclude that it “appear[s]* to a legal certainty that the claim is really for less than the jurisdictional amount’. St. Paul Mereury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) ; Nelson v. Keefer, 451 F. 2d 289, 292-293 (3d Cir. 1971). In addition plaintiff can find no solace in the fact that she pur- ports to represent a class, for the claims of the class are not of the nature which would permit their ag- gregation under Snyder v. Harris, 394 U.S. 339 (1969) to satisfy the jurisdictional amount require- ment.” Thus Section 1331(a) does not confer juris- diction in this ease, in that the $10,000 amount in eon- troversy requirement has not been satisfied. Secondly, plaintiff asserts 28 U.S.C. ¢ 1243(4), pro- viding jurisdiction, without regard to amount in con- troversy, to secure equitable or other relief under anv Act of Congress providing for the protection of civil rights, as the jurisdictional basis of her claim. Plain- tiff’s claim, however, arises under the Social Security * Under Snyder v. Harris, supra. aggregation of claims to satisfy the amount in controversy requirement is permissible “only (1) in cases in which a single plaintiff seeks to aggregate two or more of his own claims against a single defendant and (2) in cases in which two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest.” 394 USS. at 335. Under this test, plaintiff argues that the members of the class have a “common and undivided interest” in the Social Secur- ity Trust Fund. We find this contention to be without merit. (52a) Act and it has consistently been held that the Social Security Act is not an Act of Congress providing for the protection of civil rights. Russo v. Kirby, 453 F. 2d 548 (2d Cir. 1971); McCall v. Shapiro, 416 B. 2d 246 (2d Cir. 1968). Thus, this Court lacks jurisdiction over plaintiff’s claim under Section 1343(4). Plaintiff’s allegation that 28 U.S.C. § 1346(a) (2)° provides jurisdiction likewise must fail. The Tucker Act confers concurrent jurisdiction in the District Court and the Court of Claims of any claim against the United States, not exeeeding $10,000 in amount, founded upon the Constitution or any Act of Con- gress. Plaintiff seeks declaratory and. injunctive re- lief, and this provision has been construed by the Supreme Court as authorizing only actions for money judgments and not suits for equitable relief against the United States. Richardson v. Morrts, 41 U.S.L.W. 3390 (1973). Accordingly, Section 1346(a) (2) does not. con- fer jurisdiction upon this Court. . The final jurisdictional provision under which plain- tiff brings her action is the Mandamus Act, 28 U.S.C. §1361, which provides: The district courts shall have original juris- diction of any action in the nature of mandamus to compel an officer or employee of the United *28 U.S.C. § 1346(a) (2) provides: ROTTS “(a) The district courts shall have original jurisdiction, concur- rent with the Court of Claims, of : * +. * 7 “(2) Any other civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon the Con- stitution, or any Act of Congress, or auy regulation of an execu- tive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” (53a) States or any agency thereof to perform a duty owed to the plaintiff, The legislative history of the mandamus statute re- veals that the statute’s construction turns upon tradi- tional mandamus law, and the Court of Appeals in Richardson v. United States, 465 F. 2d 844 (3d Cir. 1972), cert. granted 41 U.S.L.W. 3458 (1973), sum- marized the prior law: In order for mandamus to issue, a plaintiff must allege that an officer of the Government owes him a legal duty which is a specific, plain ministerial act “devoid of judgment or disere- tion”’. [citations omitted] An act is ministerial only when its performance is positively com- manded and so plainly preseribed as to be free from doubt. 465 F. 2d at 849. Applying these standards to the facts of the instant case, neither the provision of the Act in question nor the regulations promulgated thereunder compel the Secretary to conduct a hearing prior to the recoup- ment of an over-payment. While the statute and ree- ulations are silent on this issue, they must be read in conjunction with the requirements imposed upon goy- ernmental bodies by the due process cause of the Fifth Amendment, and our examination of these pro- visions must be coneluded in conjunction with the de- cisions of the Supreme Court construing the due process clause. The Mandamus Act does not’ distin- guish between a statutory duty owed to the plaintiff by the Secretary and a constitutional duty owed by the Secretary. Whether the Secretary owes plaintiff a duty under the Fifth Amendment of the Constitu- tion can be determined only after an analysis of the requirements of the due process clause and their ap- plication to the statutory and regulatory provisions at issue. In the instant case, plaintiff relies upon (54a) Goldberg v. Kelly, 397 U.S. 254 (1970), to establish the existence of the constitutional right to a prior hear- ing in administrative recoupment eases. She argues that Goldberg imposes the constitutional duty upon the Secretary to conduct a hearing prior to the ad- justment or reduction of her benefits in order to recoup an over-payment and that this duty is minis- terial and devoid of discretion in that it is com- pelled by the Constitution. The denial of the oppor- tunity for such a prior hearing, according to plaintiff, eives rise to jurisdiction under the Mandamus Act. We agree with the Court in Elliott v. Weinberger, 371 F. Supp. 960 (D. Hawaii 1974), that the applicability of Goldberg and its progeny is sufficiently apparent to establish jurisdiction under Section 1361. See also Martinez v. Richardson, 472 F. 2d 1121 (10th Cir. 1973).”° An alternative basis for sustaining jurisdiction under Sec- tion 1361 is found in Chaudoin v. Athinson 494 F. 2d 1323 (3d Cir. 1974) where the Court of Appeals stated: «.. a request for relief under Section 1361 requires ‘the court [to] utilize all relevant legislative and other materials to deter- mine the scope of discretion or power delegated to the officer.” In so holding, the Court relied on Carey v. Local Board No. 2, Hartford, Connecticut, 297 F. Supp. 252 (D. Conn. 1969), aff'd. 412 F. 2d 71 (2d Cir. 1969), where the Court held that the fact that the duty involved becomes clear only after the construction of the statute does not preclude relief under 28 U.S.C. § 1361. In so holding, the Court relied on Roberts v. United States, 176 U.S. 221 (1900), where it was stated: “Unless the writ of mandamus is to become practically value- less, and is to be refused even where a public officer is commanded to do a particular act by virtue of a particular statute, this writ should be granted. Every statute to some extent requires construc- tion by the public officer whose duties may be defined therein. Such officer must read the law, and he must, therefore, in a cer- (55a) Il. THe Crass Action In her amended complaint, plaintiff purports to represent a class consisting of “all persons eligible for Social Security OASDI benefits, and whose bene- fits have been or will be reduced, terminated or otherwise summarily adjusted by defendant without notice and opportunity for a prior administrative tain sense, construe it, in order to form a judgment from its language what duty he is directed by the statute to perform... . If the law directs him to perform an act in regard to which no discretion is committed to him, and which, upon the facts existing, he is bound to perform, then that act is ministerial, although de- pending upon a statute which requires in some degree, a construc- tion of its language.” We read Chaudoin and Carey to permit the court to review the appropriate constitutional provisions, legislative material and judicial decisions in order to determine whether under any of these three alternatives the basis of jurisdiction is provided under the Mandamus Act. Accordingly, we must proceed to determine whether the Secretary owes plaintiff a duty under the Fifth Amendment to the Constitution and the decisions of the courts construing that Amendment to conduct a hearing prior to the ad- justment of her benefits and we may assume jurisdiction under Section 1361 for the purpose of making this determination. Also significant is the recent decision of the Supreme Court in Christian v. New York State Dept. of Labor, 414 U.S. 614 1974), where plaintiffs challenged the Unemployment Com- pensation for Federal Employees Program, 5 U.S.C. § 8501 et seq. on the ground that they were denied benefits without a prior hearing. The district court dismissed the constitutional claims against the federal defendants, and on appeal, plaintiffs attacked this ruling arguing that mandamus jurisdiction lies where the act of a federal official, although authorized by statute, is alleged to violate the Constitution, relying on Garfield v. United States ex rel. (oldsby, 211 U.S. 249 (1908). At oral argument the Solicitor Gen- eral conceded jurisdiction under the Mandamus Act. The Court therefore, did not pass on this issue, despite the fact that the Court may sponte pass on jurisdictional questions. (56a) hearing.” Preliminarily, we note at the time this action was filed plaintiff was not a member of the class she purports to represent, in that her benefits had not as vet been reduced. By subsequent administrative ae- tion, however, her request for reconsideration was denied and the adjustment was scheduled for imple- mentation. It was only by the subsequent stipulation hetween the parties that her benefits have been per- mitted to continue. Tn order to establish her right to maintain a class action, it is plaintiff’s burden to satisfy all of the re- quirements of Rule 23(a) and one of the subdivision of 23(b). Philadelphia Electric vy. Anaconda Brass Co., 43 F.R.D. 452, 457 (B.D. Pa. 1968). With respect to Rule 23(a), defendant’s affidavit reveals that in 1970 there were 1,250,000 over-payment cases, from which 12,000 requests for reconsideration were filed, and 1600 requests for hearings were filed. This alone establishes that the class is so numerous that joinder of all mem- bers is impractical. The scle issue in this action is whether adjustment of social security benefits in order to recoup an over-payment may be accomplished ab- sent a prior hearing, and this issue presents questions of law and fact common to the class. Plaintiff’s claim in this respect is typical of the claims of the class. Finally, there is no issue of adequate representation, and we recognize the competency of plaintiff’s counsel. Plaintiff is proceeding under Rule 23(b)(2) which concerns the request for injunctive or declaratory re- lief and is specifically designed for situations seeking the vindication of constitutional rights. Upon a finding that plaintiff has satisfied the requirements of Rule 23 (a) and Rule 23(b) (2), plaintiff’s motion for a class action determination will be granted as modified in our order. (57a) Jil. THe TuHree-Jupce Court Plaintiff requests the convening of a three-judge court on the ground that she is challenging the con- stitutionality of Section 204 of the Act, 42 U.S. § 404. Plaintiff, however, does not challenge the right of the Secretary to recoup over-payments, but merely chal- lenges the procedure by which it is done. The lan- guage of the statute is silent on the methods by which over-payments are recovered, and it specificaily provides that over-payments are to be recovered “under regulations prescribed by the Secretary”. Thus, plaintiff’s attack is directed toward the con- stitutional deficiency of the regulations in failing to provide an evidentiary hearing in advance of recoup- ment. Under such circumstances, a three-judge court is not required, Mills v. Richardson, 464 F. 2d 995, 1001 (2d Cir. 1972) and, accordingly, plaintiff's mo- tion for the convening of a three-judge court will be denied, IV. Tue Merits The issue before the Court, as previously indicated, is whether the failure of the regulations promulgated pursuant to Section 204 to provide an opportunity for an evidentiary hearing prior to the adjustment of security benefits in order to recoup an over-paymert is (1) contrary to the purpose of the Act and (2) un- constitutional under the Fifth Amendment to the Con- stitution. V. Tue Purpose oF THE AcT The general purpose of the old-age, survivor and disability insurance provisions of Title IT of the Act is to protect workers and their dependents from the (58a) risk of loss of income due to the insured’s old age, death or disability. Delno v. Celebreeze, 347 F. 2d 159, 161 (9th Cir. 1965). In the event an over-payment is made, Section 204(a) of the Act authorizes the Secre- tary to adjust or decrease such benefits in order to 1ecover the over-payment. Section 204(b), however, contains a provision providing for the waiver of ad- justment of reeovery under certain circumstances. Where an individual is found without fault and ad- justment or recovery would either defeat the purpose of Title IIT or be against equity or good conscience, adjustment or recovery may be waived. In the regu- lations, 20 CFR § 404.508, “defeat the purpose of title II” means ‘‘to deprive a person of income re- quired for ordinary and necessary living expenses.”’ The manifest purpose of Section 204(b) of the Act is to render more equitable the recovery of incorrect payments to individuals, and the Seeretary goes to great length to justify its “paper hearings.” It is conceivable that the determination that an overpay- ment has been made can be readily determined in an ex parte proceeding by the examination of Social Se- curity records and cancelled checks. The critical ques- tion of “fault’’ and whether recovery would “defeat the purpose”’ of the Act or be “against equity and good conscience’’ are less susceptible to a summary deter- mination in an ex parte proceeding. In her amended complaint, plaintiff alleges that she has no other source of income and is totally disabled. She further alleges that if her benefits were reduced as proposed she would be unable to provide the bare necessities of life. Considering the ‘‘compassionate”’ purpose of the waiv- er provision, it appears incongruous that its purpose would mandate that the critical determinations be made summarily on an ex parte basis. Rather, the pur- (59a) pose of the Act contemplates that an individual who seeks to present evidence tending to establish the ap- plicability of the waiver provision must be given an opportunity to do so prior to adjustment or reduction of benefits. Accordingly, we conclude that the failure of the regulations to provide a hearing prior to re- coupment is contrary to the purpose of Title II of the Act. This conclusion, however, does not end our inquiry for only a finding that the Secretary owes plaintiff a constitutional duty which is so positively commanded as to be devoid of judgment or discretion will support jurisdiction under Section 1361. We must, therefore, proceed to an analysis of the due process issue. THE DUE PROCESS ISSUE The requirements of procedural due process apply only to the deprivation of interests encompassed with- in the Fifth and Fourteenth Amendments’ protection of liberty and property. Board of Regents v. Roth, 408 U.S. 564 (1972). Thus, the threshold question pre- sented is whether the nature of plaintiff’s asserted property i/evest is within the range of interests pro- tected by the Due Process Clause of the Fifth Amend- inent. Initially, we note that plaintiff does not claim a property interest in the amount of the overpayment nor does she challenge the Secretary's right to recoup an overpayment by means of a civil suit." We are con- * Section 5501 of the Claims Manual provides that the Social Security Administration shall recoup overpayments by withhold- ing benefits or by requesting the overpaid person to refund the amount in excess of the correct payment. Where waiver is not ap- plicable and the overpaid person refuses to make a refund, Sec- tion 5503.9 of the Claims Manual provides that the Secretary should consider recovery by civil suit. (60a) cerned solely with the monthly social security benefits to which plaintiff is entitled pursuant to 42 U.S.C. § 402(e) (1) (B) (ii). Piaintiff was found qualified by the Social Security Administration to receive dis- abled widow’s insurance benefits on the social security record of her deceased husband. As long as she con- tinues to satisfy the statutory requirements of the Act, plaintiff is entitled to receive benefits pursuant thereto. Plaintiff’s property interest in her monthly benefits amounts to a statutory entitlement and, there- fore, constitutes a property interest protected by the Due Process Clause of the Constitution. The basic principles of due process are well estab- lished: Parties whose rights are affected are entitled to be heard; and in order that they may enjoy that right they must first be notified. Fuentes v. Shevin, 407 U.S. 67 (1972). It is equally fundamental that the right to notice and an opportunity to be heard “must be granted at a meaningful time and in a mean- ingful manner”’. Fuentes v. Shevin, supra, at 80; Arm- strong v. Manzo, 380 U.S. 545, 552 (1965). In the in- stant case, the regulations permit the adjustment of benefits following the summary reconsideration deci- sion on the question of waiver, and they permit the implementation of the adjustment prior to an eviden- tiary hearing before an administrative law judge. To the extent that the regulations fail to provide an op- portunity for evidentiary hearing before an adminis- trative law judge prior to the reduction of benefits, we conclude that the procedure utilized to recoup over-payments is constitutionally deficient in that it fails to provide an evidentiary hearing “at a mean- ingful time”. Plaintiff’s benefits are a matter of statu- tory entitlement and may not be terminated, reduced (61a) or otherwise adjusted absent an opportunity for a prior hearing. Goldberg v. Kelly, 397 U.S. 254 (1970). The Secretary argues that Goldberg v. Kelly, su pra, and its progeny are inapplicable to Title IT of the Act and asserts several reasons in support of his argument. First, the Secretary contends that Goldbera and Sniadach v. Family Finance Corp., 395 U.S. 337 (1969) are distinguishable from cases arising under Title Il in that the decisions in Goldberg (termina- tion of welfare benefits) and Sniadach (garnishment of wages) were based on need. Under Title II, the question whether one is entitled to benefits has noth- ing to do with one’s financial situation or need. Gold- berg and Sniadach, however, merely emphasized the special importance of welfare benefits and wages, and they did not carve out a rule of necessity. Fucntes v. Shevin, supra, at 89. The Court in Fucutes clearly rejected the narrow interpretetion that the Secretary urges us to adopt, holding: ... Both decisions were in the mainstream of past cases, having litile or nothing to do with the absolute ‘necessities’ of life but estab- lishing that due process requires an oppor- tunity for a hearing before a deprivation of property takes effect. (citations omitted) 407 U.S. at 88. It is, therefore, apparent that under the present law need or necessity do not constitute the sine qua non upon which the right to procedural due process is founded.” **In his argument, the Secretary relied heavily on Torres v. New York State Dept. of Labor, 321 F. Supp. 432 (S.D.N.Y. 1971), vacated and remanded 402 U.S. 968 (1971), adhered to 333 F. Supp. 341 (S.D.N.Y. 1971) aff'd. 405 U.S. 949 (1972). In (62a) * Secondly, the Secretary argues that the weight of judicial authority supports his position that Gold- berg is inapplicable to cases arising under Title II. In Richardson v. Wright, 405 U.S. 208 rehearing denied, 405 U.S. 1033 (1972), the Supreme Court was faced squarely with the question whether Goldbery applied to cases arising under the Act. In the light of new regulations adopted by the Secretary, the Court remanded the case for reconsideration under the new regulations. The Secretary relies on Wright for the proposition that an evidentiary hearing is not a per se requirement prior to the adjustment of social security benefits in order to recoup an over-payment. We be- lieve that the Secretary is reading too much into that decision, but it is significant in that all cases decided subsequent thereto were based on the new regulations adopted by the Secretary. The Secretary also relies on Anderson vy. Finch, 322 F. Supp. 195 (N.D. Ohio 1971), remanded 454 F. 2d 596 (1972) and Messer v. Finch, 314 F. Supp. 511 (E.D. Ky. 1970) judgment vacated for mootness, 400 U.S. 987 (1971), in support of his argument. These cases, however, were decided prior to Fuentes, and since Fuentes, the weight of Torres, the lower court upheld the constitutionality of the New York State Unemployment Compensation statutes. The Court held that Goldberg did not apply to unemployment compensation because the need was not a factor in that program. Torres was decided prior to Fuentes, and since Fuentes, three- judge courts in Pregent v. New Hampshire Department of Em- ployment, 361 F. Supp. 782 (D. [N.] H. 1973) and in Steinberg v. Fusari, 364 F. Supp. 922 (D. Conn. 1973), rejected the 7'orres rationale in the light of Fuentes and held that an evidentiary hearing is required prior to the termination of unemployment benefits. See also Wheeler v. Vermont, 3235 F. Supp. 856 (D. Vt. 1971). The Steinberg case came out of the same Circuit as did Torres and was apparently overlooked by the Secretary. (63a) judicial authority establishes that procedural due process requires an evidentiary hearing prior to ter- mination or adjustment of social security benefits. iiliott v. Weinberger, 42 U.S.L.W. 2442 (D. Hawaii, Feb. 4, 1974), (hearing required prior to adjustment of social security benefits in order to recoup an over- payment) ; Lidridge v. Weinberger, 361 F. Supp. 520 (W.D. Va. 1973) (hearing required prior to termina- tion of social security benefits) ; Williams v. Weinber- ger, 360 F. Supp. 1349 W.D. Ga. 1973) (hearing required prior to termination of social security bene- fits). But see Jarbo v. Weinberger 374 F. Supp. 310, (D.W. Wash. 1973). Finally, the Secretary argues that a preerecoupment trial type hearing would impose an insuperable burden upon the Title IT program. In support of this argu- ment, the Secretary notes that in 1970 there were 1,250,000 over-payment cases and alludes to the finan- cial and administrative burden involved. Such burden cannot override plaintiff’s manifest due process right to a prior hearing. The Supreme Court in Goldberg and Fuentes has specifically rejected this argument where a hearing is clearly required by the Due Process Clause. Moreover, the Court in Eldridge v. Wein- berger, supra, at 525-527, specifically rejected this ar- gument in the context of a social security case. See also Richardson v. Wright, supra at 223-226 (Bren- nan, J., dissenting) ; Elliott v. Weinberger, supra. A prior hearing always imposes some costs in time, effort and expense, but these costs cannot outweigh the con- stitutional right to such a hearing. Fuentes v. Shevin, supra, at 90 n.22, We conclude that the Secretary owes plaintiff a eon- stitutional duty to afford an opportunity for an evi- 595-280 —75-——-6 (64a) dentiary hearing prior to the adjustment of social security benefits in order to recoup an overpayment. This duty, arising out of the Due Process Clause of the Fifth Amendment, is so positively commanded by the cases construing that amendment as to be free from doubt. Accordingly, our conelusion in this respect supports our jurisdiction under the mandamus statute, 28 U.S.C. § 1361. Once it is determined that the protection of due process applies, the next consideration is what due process safeguards are required. It is at this point that due process is flexible to the extent that only such precedural protection is required as a particular situ- ation demands. Morrissey v. Brewer, 408 U.S. 471 (1972). Consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise na- ture of the governmental function involved as well as the private interest that has been affected by gov- ernmental action. Cafeteria d: Restaurant Workers Union v. McElroy, 367 U.S. 886, 895 (1961). In bal- ancing the interest of the respective parties, we now become more sensitive to defendant’s argument of ad- ministrative burden. Plaintiff does not seek to have us impose the full panoply of procedural safeguards upon the Secretary, rather she seeks only an oppor- tunity to present her case at a hearing prior to any adjustment of her benefits. Accordingly, our consider- ation of this case will be so limited. We hold that a recipient of social security benefits is entitled by the Due Process Clause of the Fifth Amendment to an opportunity to a hearing prior to the adjustment of his social security benefits in order to recoup an over- payment. The recipient must be accorded notice of his right to a hearing in a conspicuous manner and given sufficient time to exercise this right. We do not hold (65a) that a hearing must be held in every case, in that a voluntary, intelligent and knowing waiver of the right may obviate the need for a hearing. This, of course, presupposes adequate notice of the right to a hearing. Moreover, we see no reason why the opportunity for a hearing cannot be afforded within the present proce- dural framework of the Social Security Administra- tion. The procedures followed in a general determina- tion of qualification to Title IL benefits as followed in this case need not be varied except to suspend the im- plementation of the adjustment of benefits until an opportunity for a hearing is afforded. For the foregoing reasons, defendant’s motion for summary judgment will be denied and plaintiff’s mo- tion for summary judgment will be granted. ORDER AND NOW, this 30th day of April, 1974, IT IS ORDERED that: 1. defendant’s motion to dismiss the complaint for lack of jurisdiction is DENIED; a) 2. plaintiff’s motion for a class action determination is GRANTED; the class consisting of all persons eligible for Social Security OASDI benefits within the counties encompassed by the Eastern District of Pennsylvania, whose benefits may be terminated, re- duced or otherwise adjusted in order to recoup an over-payment ; 3. plaintiff’s motion for the convening of a three- judge court is DENIED; . 4. defendant’s motion for summary judgment is DENIED; and 5. plaintiff's motion for summary judgment 1s GRANTED. [s] E. Mac Troutman. J. APPENDIX D | I. PERTINENT PROVISIONS OF THE SocraL Security CLAIMS MANUAL Section 5503(a) provides in pertinent part: When it is determined that an incorrect pay- ment has been made, the person liable should be notified in writing (see § 5508 for sample let- ters). The notice will inform the person of: “(1) The incorrect payment made, how, and when it occurred. (If the overpayment resulted from the entitlement of another beneficiary, the adversely affected individuals(s) must be in- formed of the name, relationship to the WE, and basis for entitlement of the new beneficiary. ) **(2) The right to request reconsideration of the overpayment determination. “(3) The required recovery. “(4) The proposed adjustment or the demand for repayment where adjustment is not possible. “(5) The waiver provisions of the law (Social Security Act, sees. 204(b) or 1870(c)). “(6) The availability of partial adjustment or partial refund. “(7) The need to notify the DO promptly if he feels that the circumstances in his case would justify waiver, partial adjustment, or partial refund.”’ Section 5503.3 provides in pertinent part: Delay in Withholding Benefits to Recover Overpayments. Before we start to adjust the overpayment against the benefits due a benefici- ary, he or his payee will normally be given rea- (67a) (68a) sonable opportunity to contest the correctness of the determination or to establish that a basis exists for waiver or partial adjustment. The notice to the beneficiary will advise him that ad- justment will be deferred for a longer period when the facts in a given ease, including but not limited to time case is being worked, cutoff dates, mailing time, ete., indicate that a 30-day period would be inadequate for consideration of the matter and reply by the beneficiary and reviewing office processing time. The only exceptions to this rule are: “(1) the overpayment is based on an annual (69a) issues (§ 8737). Where reconsideration of the overpayment determination, waiver, or partial adjustment development is initiated, withhold- ing to recoup the overpayment will be further deferred and payment will be continued until development has been completed, if the bene- ficiary is otherwise entitled to benefits. If devel- opment will not be completed before the expira- tion of the 30-day period, the DO will utilize teletype to advise the reviewing office. (Empha- sis in original) IT. PERTINENT PROVISIONS OF THE Cope or Frnrnar report by the beneficiary; [*1 or ReGutations, Trre 20 [* The Social Security Administration now provides the 30-day deferral period to this class of beneficiaries also] 20 C.F.R. Part 404 provides in pertinent part: ‘*(2) the overpayment results from the super- endorsement procedures under Section 205 (n) of the Act whereby payment of a com- bined check is made to the survivor . . . In the above two situations immediate adjustment ac- tion is taken.” Section 5503.5 provides in pertinent part: Tf the person responds raising some question about the correctness of the determination of overpayment, or raises a question about recovery, waiver or partial adjustment, the DO will obtain the necessary evidence and prepare a recommendation to the reviewing office for disposing of the case. Thus, if the person lable requests reconsideration of the substantive determination and it appears that the deter- mination will be affirmed, the DO will develop the possibility of waiver of adjustment or recovery of the overpayment at the same time it receives evidence to resolve the request for reconsideration. This is necessary since, if the substantive determination is affirmed the Re- consideration Determination will cover both § 404.907 Notice of initial determination. Written notice of an initial determination shall he mailed to the party to the determina- tion at his last known address, except that no such notice shall be required in the ease of a determination that a party’s entitlement to benefits has ended because of such party’s death (see § 404.905(d)). Tf the initial determination disallows, in whole or in part, the application or request of a party, or if the initial determina- tion is to the effect that a husband, widower, or parent was not reeeiving the requisite support from an insured individual, or that a party’s entitlement to benefits has ended, or that a re- duction, deduction, or adjustment is to be made in benefits or a lump sum, or that a period of disability established for a party has termi- nated, the notice of the determination sent to the party shall state the basis for the determi- nation. Such notice shall also inform the party of the right to reconsideration (see § 404.910). Where more than the correct amount of pay- ment has been made, see § 404.502a. [37 FR. 10554, May 25, 1972] (70a) § 404.908 Effect of initial determination. The initial determination shall be final and binding upon the party or parties to such deter- mination unless it is reconsidered in accordance with §§ 404.910-404.916, or it is revised in ac- cordance with § 404.956 § 494.909 Reconsideration and hearing. Any party who is dissatisfied with an initial determination may request that the Administra- tion reconsider such determination, as provided in § 404.910. If a request for reconsideration is filed, such action shall not constitute a waiver of the right to a hearing subsequent to such re- consideration if the party requesting such re- consideration is dissatified with the determina- tion of the Administration made on such recon- sideration; and a request for a hearing may thereafter be filed, as is provided in § 404.917. [25 F.R. 1677, Feb, 26, 1960, as amended at 28 F.R. 14492, Dec. 31, 1963] § 404.910 Reconsideration; right to recon- sideration. The Administration shall reconsider an initial determination if a written request for recon- sideration is filed, as provided in § 404.911, by or for the party to the initial determination (see § 404.905). The Administration shall also reconsider an initial determination (unless the determination is with respect to the revision of the Administration’s earnings records) if a written request for reconsideration is filed, as provided in § 404.911, by an individual as a wife, widow, divorced wife, surviving divorced wife, surviving divorced mother, husband, widower, child, parent, individual alleging equitable entitlement to a lump sum, or repre- sentative of a decedent’s estate, who makes a showing in writing that his or her rights with respect to monthly benefits, a lump sum, a (71a) period of disability, or entitlement to hospital or supplementary medical insurance benefits, may be prejudiced by such determination. The Administration shall also reconsider an initial determination relating to the revision of the Administration’s record of the earnings (see § 404.905(¢)) of a deceased individual if a written request for reconsideration is filed, as provided in § 404.911, by a person as a widow, divorced wife, surviving divorced wife, surviv- ing divorced mother, widower, child, parent, an individual alleging equitable entitlement to a lump sum, or representative of the decedant’s estate. [31 F.R. 16766, Dec. 31, 1966] § 404.911 Lie and place of filing request. The request for reconsideration shall be made in writing and filed at an office of the Adminis- tration or, in the case of an individual in the Philippines, at the Veterans’ Administration Regional Office in the Philippines or, in the case of an individual having 10 or more years of service in the railroad industry (see Subpart O of this Part 404) or of an individual entitled to an annuity on the basis of an award under the Railroad Retirement Act prior to October 30, 1951, who requests in writing reconsidera- tion with respect to his application to establish a period of disability under section 216(4) of the act, at an office of the Railroad Retirement Board, within 6 months from the date of mail- ing notice of the initial determination, unless such time is extended as provided in § 404.612 or § 404,953. [25 F.R. 6468, July 9, 1960, as amended at 28 F.R. 14492, Dec. 31, 1963] § 404.912 Parties to the reconsideration. The parties to the reconsideration shall be the person who was the party to the initial deter- (72a) mination (see § 404.905), and any other person referred to in § 404.910 upon whose request the initial determination is reconsidered. § 404.913 Notice of reconsideration. If the request for reconsideration is filed by a person other than the party to the initial deter- mination, the Administration shall, before such reconsideration, mail a written notice to such party at his last known address, informing him that the initial determination is being reconsid- ered. In addition, the Administration shall give such party a reasonable opportunity to present such evidence and contentions as to fact or law as he may desire relative to the determination. [25 F.R. 1677, Feb. 28, 1960, as amended at 28 F.R. 14492, Dec. 31, 1963] § 404.914 Reconsidered determination. The Administration shall, when a request for reconsideration has been filed, as provided in $§ 404.910 and 404.911, reconsider the initial determination in question and the findings upon which it was based; and upon the basis of the evidence considered in connection with the ini- tial determination and whatever other evidence is submitted by the parties or is otherwise ob- tained, the Administration shall make a recon- sidered determination affirming or revising, in whole or in part, the findings and determination in question. f25 F.R. 1677, Feb, 28, 1960, as amended at 28 F.R. 14492, Dec. 31, 1963] § 404.915 Notice of reconsidered determina- tion. Written notice of the reconsidered determina- tion shall be mailed to the parties at their last known addresses. The reeonsidered determina- tion shall state the basis therefor and inform (73a) the parties of their right to a hearing (see § 404.917). § 404.916 Effect of reconsidered determination. The reconsidered determination shall be final and binding upon all parties to the reconsidera- tion unless a hearing is requested in accordance with § 404.918 and a decision rendered or unless such determination is revised in accordance with § 404.956. § 401.917 Hearing; right to hearing. An individual has a right to a hearing about any matter designated in § 404.905, if: (a) An initial determination and a recon- sideration of the initial determination have been made by the Administration; and (b) The individual is a party referred to in § 404.919 or § 404.920; and (¢) The individual has filed a written request for a hearing under the provisions described in § 404.918. [31 FR. 16766, Dec. 31, 1966] ILL. Pertinent Statutory Provision 42 U.S.C. 404: OVERPAYMENTS AND UNDERPAYMENTS (a) Whenever the Secretary finds that more or less than the correct amount of payment has been made to any person under this subchapter, proper adjustment or recovery shall be made, under regulations prescribed by the Secretary, tt tn: eT sect § | "4 1 ith respect to payment to a per- nt Bot: than the correct amount, the Secretary shall decrease any payment under this subchapter to which such over- paid person is entitled, or shall require BEST COPY AVAILABLE (74a) such overpaid person or his estate to re- fund the amount in excess of the correct amount, or shall decrease any payment under this subchapter payable to his estate or to any other person on the basis of the wages and self-employment income which were the basis of the payments to such overpaid person, or shall apply any combination of the foregoing. A payment made under this subchapter on the basis of an erroneous report of death by the Department of Defense of an individual in the line of duty while he is a member of the uniformed services (as defined in section 410(in) of this title) on active duty (as defined in section 410(/) of this title) shall not be considered an incorrect payment for any month prior to the month such Department notifies the Sec- retary that such individual is alive. (2) With respect to payment to a person of less than the correct amount, the Sec- retary shall make payment of the balance of the amount due such underpaid per- son, or, if such person dies before pay- ments are completed or before negotiat- ing one or more checks representing correct payments, disposition of the amount due shall be made in accordance with subsection (d) of this section. (b) In any ease in which more than the cor- rect amount of payment has been made, there shall be no adjustment of payments to, or recov- ery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this subchapter or would be against equity and good conscience. 7 * * * U.S. GOVERNMENT PRINTING OFFICE: 1978 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_1267%3A1. Public record. Not legal advice.