Petition — Califano v. Sanders

NX 75-1443

ee

Ju the Supreme Court of the Unfied raters

OcTOBER TERM, 1975 ©

F, DAVID MATHEWS, SECRETARY oF HEALTH,

EDUCATION, AND WELFARE, PETITIONER

v.

MISTER SANDERS

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

RoBERT H. Bork,

Solicitor General,

Rex B. LEg,

Assistant Attorney General,

HARRIET S, SHAPIRO,

Assistant to the Solicitor General,

ROBERT E, Kopp,

THOMAS G. WILSON,

Attorneys,

Department of Justice,

Washington, D. C. 205380.

INDEX

Page

Se ES Ia 1

PEE OE A 2

Question presented 2.0... eee seedsinen 2

Statutes and regulations involved _............. 2

RETREATS SSRs. oe een 3

Reasons for granting review 5

AT iE a ce 13

III snccccschiahiuidududctananideiiavtitianiesianninges la

EE

ITED * skies ciieamentbaietaunienescniidiaeinitiionsiin aan

TED. : seindniiebinskiajestninitinomnscneamaisininbiinitinaigiees l5a

Cg EN

CITATIONS

Cases:

Aguayo v. Richardson, 473 F.2d 1090,

certiorari denied, 414 U.S. 1146 12

Bard v. Seamans, 507 F.2d 765 —...... 12

Bramblett v. Desobry, 490 F.2d 405, cer-

tiorari denied, 419 U.S. 872 12

Cappadora v. Celebrezze, 356 U.S. 1... ‘7,8

Coulter v. Weinberger, 527 F.2d 224... 10

Davis v. Richardson, 460 F.2d 772 ......—s=s—“ 7,8

Elton Orchards, Inc. v. Brennan, 508 F.

Filice v. Celebrezze, 319 F.2d 448 _..... 7

Grant v. Hogan, 505 F.2d 1220 — 12

Hobby v. Hodges, 215 F.2d 754 7

Cases—Continued Page

Hunt v. Weinberger, 527 F.2d 544 7, 10,12

Lejeune v. Mathews, 526 F.2d 950 _. 8, 10

Local 542, International Union of Oper-

ating Engineers v. National Labor Re-

lations Board, 328 F.2d 850, certiorari

denied, 379 US. 826 11

Mathews v. Eldridge, No. 74-204, decided

February 24, 1976 ._.. 7

—— v. United States, $21 ‘F.2d

sectiiisieaiiapuciediiamadatt tained AE 12

Nguyen da Yen v. Kissinger, Nos. 75-

2493 and 75-2632, decided November

5, 1975 12

Norton v. Mathews, No. 74-6212, ‘argued

January 13, 1976 ; | 9

Ortego v. Weinberger, 516 F.2d 1005 _. 7,12

Pickus v. United States Board of Parole,

607 F.26 1107 ................ 12

Romero v. International Terminal Co.,

358 U.S. 354 _........ 10

Ruiz-Olan v. Secretary of Health, Edu-

cation and Welfare, 511 F.2d 1056 8

Stuckey v. Weinberger, 488 F.2d 904 7,10

Twin Cities Chippewa Tribal Council v.

Minnesota Chippewa Tribe, 370 F.2d

§29 .... | 12

Wallace v. Weinberger, 528 F.2d 700 8

Weinberger v. Salfi, 422 U.S. 749 . 6, 8,9

Statutes and regulations:

Administrative Procedure Act, 5 U.S.C.:

5 U.S.C. 701-706 (Section 10)... 2, 5, 6,

5 U.S.C. 701(a) (1)

ul

Statutes and regulations—Continued Page

8 UAC. Wate) «..................... §, 8

bt i EE 20a

& * ee | 20a

Social Security Act, Section 205, 49 Stat.

624, as amended, 42 U.S.C. 405 2

Section 205(b), 42 U.S.C. 405(b) 7

Section 205(g), 42 U.S.C. 405(g).... 3, 7, 8,

9, 19a

Section 205(h), 42 U.S.C. 405(h).... 2, 5, 6,

7, 8,9, 19a

_ & ae

fk i)

DEE 3

5 ESSEC eneneeeeree 3

20 C.F.R. 404.916 —............. 3

20 C.F.R. 404.917 ............ | 3

20 C.F.R. 404.937 4, 20a-21la

20 C.F.R. 404.940 he 3

20 C.F.R. 404.947 ....... 2 ad 3

20 C.F.R. 404.951 _. REE oa OO 3

fl) | as

Miscellaneous:

Administrative Procedure Act, Legisla-

tive History, S. Doc. No. 248, 79th

Cong., 2d Sess. (1946) ..... 11

Attorney General’s Manual on the Ad-

ministrative Procedure Act (1947). 11

Note, The Jurisdictional Basis of Nonstat-

utory Judicial Review in Suits Against

Federal Of ficers — Jurisdictional

Amount, The Administrative Procedure

Act and Mandamus, 51 Wash. L. Rev.

iO | ) as 11

In the Supreme Court of the United States

OCTOBER TERM, 1975

No.

F. DAVID MATHEWS, SECRETARY OF HEALTH,

EDUCATION, AND WELFARE, PETITIONER

Vv.

MISTER SANDERS

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

The Solicitor General, or 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 Seventh Cir-

cuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra)

is reported at 522 F.2d 1167. The memorandum of the

district court (App. C, infra) is not reported.

(1)

2

JURISDICTION

The judgment of the court of appeals (App. B, in-

fra) was entered on September 12, 1975. A timely

petition for rehearing was denied on December 12,

1975 (App. D, infra). On March 4, 1976, the Chief

Justice extended the time within which to file a peti-

tion for a writ of certiorari to and including April

10, 1976. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

QUESTION PRESENTED

Whether a decision by the Secretary of Health,

Education, and Welfare not to reopen a previously

adjudicated claim for Social Security benefits is sub-

ject to judicial review under the Administrative Pro-

cedure Act.

This question has two components:

1. Whether Section 205(h) of the Social Security

Act precludes judicial review of the Secretary’s re-

fusal to reopen prior final decisions denying claims

for benefits under that Act.

2. Whether Section 10 of the Administrative Pro-

cedure Act grants subject-matter jurisdiction to the

district courts to review agency action.

STATUTES AND REGULATIONS INVOLVED

Section 205 of the Social Security Act, 49 Stat. 624,

as amended, 42 U.S.C. 405, Section 10 the Adminis-

trative Procedure Act, 5 U.S.C. 701 et seq., and the

regulations of the Department of Health, Education,

and Welfare, are set forth in pertinent part in Ap-

pendix E, infra.

STATEMENT

In 1964, respondent filed a claim for Social Secur-

ity disability benefits." Following an evidentiary hear-

ing on the claim, the hearing examiner determined

that respondent had not been disabled within the

meaning of the Social Security Act on June 30, 1962,

the date his insured status had expired (App. A, in-

fra, p. 2a). On review, the Appeals Council sus-

tained the decision of the hearing examiner. Respond-

ent was notified of his right to seek judicial review

of the final decision of the Secretary, but review was

not sought (App. C, infra, p. 14a).

Almost seven years later, on March 15, 1973, re-

spondent filed another application for disability bene-

fits. After the claim was denied initially and upon

* A claim for disability benefits is initiated by the filing of

an application with the Social Security Administration. If the

application is denied initially, the claimant is entitled, upon

request, to reconsideration of the initial determination. 20

C.F.R. 404.910. If the claimant is still dissatisfied with the

decision after reconsideration, he can obtain, upon request,

an evidentiary hearing before an administrative law judge

(originally, a hearing examiner). 20 C.F.R. 404.917. Further

administrative review may be sought from the Appeals Coun-

cil, which, in its discretion, may review the administrative law

judge’s decision. 20 C.F.R. 404.947. Following the action of

the Appeals Council, a claimant may obtain judicial review

in a civil action brought in the district court under 42 U.S.C.

405(g). At each stage of the administrative proceedings, a

decision rendered on the claim becomes the final decision of

the Secretary unless further review is timely sought. 29

C.F.R. 404.908, 404.916, 404.940, 404.951.

4

reconsideration, respondent requested a hearing (App.

A, infra, p. 2a).

The administrative law judge, noting that respond-

ent had not met the earnings requirement for insured

status since the denial of his earlier claim, determined

that the application was barred by the doctrine of

res judicata and therefore dismissed the request for

a hearing.* The administrative law judge further

determined that, because more than four years had

elapsed since respondent’s earlier claim had been

initially denied, the prior final decision on that claim

could be reopened only to correct error on the face of

the evidence on which the decision had been based.*

The administrative law judge ruled that respondent

had failed to show that there was such error and that,

therefore, the prior final decision could not be re-

opened. The Appeals Council concluded that the action

of the administrative law judge was correct (App. C,

infra, p. 13a).

Respondent then filed this civil action in the United

States District Court for the Northern District of

Indiana, seeking review of the Secretary’s refusal to

reopen the prior fina! decision. The district court held

that it was without jurisdiction to review the Secre-

tary’s refusal to reopen a prior final decision (App.

C, infra, p. 14a).

The court of appeals, in 2-1 decision, reversed. The

court agreed with the Secretary that jurisdiction to

2 See 20 C.F.R. 404.937 (App. E, infra, pp. 20a-21a).

>See 20 C.F.R. 404.957 (App. E, infra, p. 21a).

5

review a refusal to reopen was not conferred by the

Social Security Act (App. A, infra, p. 5a). But the

court reasoned that jurisdiction generally was con-

ferred by Section 10 of the Administrative Procedure

Act, 5 U.S.C. 701 through 706, and determined that

none of the exceptions of that Act apply here.

In particular, the court held that Section 205(h)

of the Social Security Act, 42 U.S.C. 405(h), dces

not “preclude judicial review” (5 U.S.C. 701(a) (1) )

and that the Secretary’s decision whether to reopen a

prior final decision is not “committed to agency dis-

cretion by law” (5 U.S.C. 701(a)(2)). In so hold-

ing, however, the court acknowledged that “[t]he cir-

cuits are divided [both] on the question of whether

section 10 of the Administrative Procedure Act * * *

contains an independent grant of subject-matter jur-

isdiction * * * [and] on the question whether [Section

2]05(h) of the Social Security Act bars review

under the APA” (App. A, infra, pp. 5a, 6a).

Judge Bauer dissented on the ground that “the

simple language of the statute involved forbids judi-

cial review of the decision of the Secretary not to re-

open the determination” (App. A, infra, pp. 9a-10a).*

REASONS FOR GRANTING REVIEW

The courts of appeals are in conflict over whether

Section 205(h) of the Social Security Act precludes

judicial review of the Secretary’s refusal to reopen

‘ The panel subsequently denied rehearing, and the full

Seventh Circuit, with two judges dissenting, declined the sug-

gestion for rehearing en banc (App. D, infra, pp. 15a-18a).

6

prior final decisions denying claims under that Act

and also over whether Section 10 of the Administra-

tive Procedure Act grants subject-matter jurisdiction

to review agency action. Both issues are important

and recurring.

The conflict over the interpretation of the Social

Security Act has created substantial differences in

the procedures available to social security claimants

in different circuits. Moreover, if, as we contend, and

as this Court’s decision in Weinberger v. Salfi, 422

U.S. 749, logically implies, that Act bars judicial

review ot the Secretary’s refusal to reopen prior final

decisions, the court below, and other courts in agree-

ment with it, have imposed upon both the Secretary

and the lower courts administrative, litigative, and

adjudicative burdens significantly heavier than those

contemplated by Congress.

The conflict over the interpretation of the Admin-

istrative Procedure Act has created substantial dif-

ferences in the scope of jurisdiction exercised by the

lower federal courts in different circuits. Because of

the pervasive reach of the Administrative Procedure

Act, which establishes standards for judicial review

of “agency action,” with specific exceptions, whether

that Act independently confers subject-matter juris-

diction is a major unresolved question relating to the

jurisdiction of the federal courts.

1. Section 205(h) of the Social Security Act pre-

cludes judicial review of the Secretary’s refusal to

reopen prior final decisions denying claims for bene-

fits under that Act.

7

a. Section 205(g) of the Social Security Act per-

mits a claimant to obtain review only of a “final de-

cision of the Secretary made after a hearing.” That

provision dves not allow review of decisions that may

be made without a hearing. Filice v. Celebrezze, 319

F, 2d 443 (C.A. 9).° A petition to reopen a prior final

decision may, as here, be denied without a hearing.

Section 205(b) of the Act; see, e.g., Cappadora y.

Celebrezze, 356 F.2d 1, 4 (C.A. 2); Ortego v. Wein-

berger, 516 F.2d 1005, 1007 (C.A. 5); Filice v. Cele-

brezze, supra, 319 F.2d at 445-446. Thus the court of

appeals correctly began its analysis by observing that

the Social Security Act does not itself confer jurisdic-

tion to review the Secretary’s refusal to reopen a

prior decision (App. A, infra, p. 5a). On this pvelim-

inary matter, the courts of appeals are in general

agreement. See Cappadora v. Celebrezze, supra; Davis

v. Richardson, 460 F. 2d 772 (C.A. 3); Ortego v.

Weinberger, supra; Hunt v. Weinberger, 527 F. 2d

544 (C.A. 6); Stuckey v. Weinberger, 488 F. 2d 904

(C.A. 9) (en banc); Hobby v. Hodges, 215 F. 2d 754

(C.A. 10).

The courts cf appeals part company, however, on

the further question whether the Social Security Act

comprehensively forbids review of such determina-

tions of the Secretary. The Ninth Circuit, in Stuckey

v. Weinberger, supra, held that Section 205(h) of

‘This result is not affected by this Court’s holding in

Mathews Vv. Eldridge, No. 74-204, decided February 24, 1976,

that in some circumstances a claimant need not await a hear-

ing to which he is entitled before bringing suit.

8

the Act precludes judicial review of the Secretary’s

determination not to reopen a prior final decision, at

least where, as here, the prior decision was made af-

ter a hearing. Several other courts of appeals, includ-

ing the court below in this case, have reached the

opposite conclusion. See Ruiz-Olan v. Secretary of

Health, Edueation, and Welfare, 511 F. 2d 1056

(C.A. 1); Davis v. Richardson, supra; Lejeune v.

Mathews, 526 F, 2d 950 (C.A. 5); Wallace v. Wein-

berger, 528 F. 2d 700 (C.A, 6). Cf. Cappadora v.

Celebrezze, supra.

Section 205(h) does preclude review. As this Court

pointed out in Weinberger v. Salfi, supra, 422 U.S.

at 757, the second sentence of that provision * bars the

district courts from reviewing decisions of the Secre-

tary, “save as provided [by Section 205(g) of] the

Act.” Since, as the court of appeals acknowledged,

review here was not available under Section 205(g)

(see pp. 4 and 7, supra), it was not available at

all.

The court of appeals ignored the second sentence

of Section 205(h), however, reading the jurisdic-

tional holding in Salfi as limited to the proposition

that the third sentence of that provision’ bars only

* The second sentence of Section 205(h) provides that “[n]o

findings of fact or decision of the Secretary shall be reviewed

by any person, tribunal, or governmental agency except as

herein provided,”

' The third sentence of Section 205(h) provides that “[n]o

action against the United States, the Secretary, or any officer

or employee thereof shall be brought under Section 41 of the

Judicial Code of the United States to recover on any claim

arising under this subchapter.”

9

actions brought under 28 U.S.C. 1331 (App. A, infra,

pp. 8a-9a). In fact, jurisdiction in Salfi, as here, had

been alleged under, inter alia, the Administrative

Procedure Act (see p. 7 of the Salfi Appendix), and

this Court, in dismissing the claims of the unnamed

class members, ruled that “sources of jurisdiction

[other than Section 205(g) are] foreclosed by [Sec-

tion 2]05(h).” 422 U.S, at 764. Accordingly, as we

demonstrate at greater length at pp. 13-18 of our brief

in Norton v. Mathews, No, 74-6212, argued January

13, 1976," the third sentence of Section 205(h) bars

the district courts from asserting jurisdiction over

Social Security cases under either the mandamus

statute, 28 U.S.C. 1361, or the Administrative Pro-

cedure Act.

In short, Section 205(h) doubly “preclude[s] judi-

cial review” (5 U.S.C, 701(a) (1) ): the third sentence

of Section 205(h), which the court of appeals miscon-

strued, bars review of Social Security cases under

the Administrative Procedure Act, and the second

sentence of the statute, which the court disregarded,

bars judicial review of reopening decisions altogether.

b. The decision below frustrates the policy of ad-

ministrative finality that underlies the congressional

determination to bar review of refusals to reopen

prior final decisions. If such refusals are made sub-

ject to judicial review, “[p]ersistent claimants could

relitigate claims numerous times in hopes of securing

a favorable decision, at great cost to both the [Social

*We are furnishing a copy of our brief in Norton to re-

spondent’s counsel.

10

Security Administration] and the courts.” Stuckey

v. Weinberger, supra, 488 F. 2d at 910.

The volume of potential relitigation is substantial.

The Secretary estimates that in calendar year 1975

approximately 2,400 requests for hearings were de-

nied on the ground of res judicata; in the brief period

of time since the decision in this case was handed

down, at least three more courts of appeals have been

required to adjudicate cases arising from refusals to

reopen in such situations. See Coulter v. Weinberger,

527 F. 2d 224 (C.A. 3); Lejeune v. Mathews, supra;

Hunt v. Weinberger, supra. Unless the decision below

is reversed, cases like these can be expected to place

a continuing and growing burden on the Secretary

and the courts, a burden Congress never intended to

impose.

2. Section 10 of the Administrative Procedure Act

does not grant subject-matter jurisdiction to the dis-

trict courts to review agency action.

Congress should not be presumed to have conferred

subject-matter jurisdiction on the district courts, in

a statute not otherwise dealing with jurisdictional

matters, unless the statutory language, or at a mini-

mum the legislative history, expresses a clear inten-

tion to grant jurisdiction. Cf. Romero v. International

Terminal Co., 358 U.S. 354, 379. Section 10 of the

Administrative Procedure Act establishes the pro-

cedures and manner of judicial review of agency ac-

tion, but it does not purport by its terms to enlarge

the jurisdiction of the district courts. To the contrary,

“where the statutory method of review is either ab-

ll

sent or inadequate, the only remedy of an aggrieved

party [under Section 10] is ‘any applicable form of

legal action * * * in any court of competent jurisdic-

tion.’ ” Local 542, International Union of Operating

Engineers v. National Labor Relations Board, 328

F. 2d 850, 854 (C.A. 3), certiorari denied, 379 U.S.

826.

The legislative history of the provision is similarly

devoid of any evidence of a congressional intent to

confer additional jurisdiction on the district courts.

The Department of Justice played an active role in

the drafting of the Administrative Procedure Act,’

and the Attorney General advised Congress that Sec-

tion 10 simply “declares the existing law concerning

judicial review.” Administrative Procedure Act, Leg-

islative History, S. Doc. No, 248, 79th Cong., 2d Sess.,

p. 229 (1946). This construction apparently was

not challenged during congressional consideration of

the bill.

Accordingly, the court of appeals erred in holding

that Section 10 grants jurisdiction to review agency

action. See, e.g., Note, The Jurisdictional Basis of

Nonstatutory Judicial Review in Suits Against Fed-

eral Officers—Jurisdictional Amount, The Adminis-

trative Procedure Act and Mandamus, 51 Wash. L.

Rev. 97, 108-115 (1975). But the courts of appeals

are sharply divided on this question.

* See Attorney General’s Manual on the Administrative Pro-

cedure Act 5-6, 8 (1947).

12

In addition to the court below, the First,”

Fourth," Fifth,” Tenth,” and District of Columbia

Circuits * have held that jurisdiction is conferred by

the Administrative Procedure Act, while the Third,"

Sixth," Eighth,” and Ninth Circuits" have held

that it is not." The time is ripe for resolution of this

long-standing conflict on a fundamental issue of fed-

eral jurisdiction.

© Elton Orchards, Inc. v. Brennan, 508 F. 2d 493 (C.A. 1).

" McEachern v. United States, 321 F. 2d 31 (C.A. 4).

Ortego V. Weinberger, supra.

' Bard v. Seamans, 507 F. 2d 765 (C.A. 10).

Pickus Vv. United States Board of Parole, 507 F. 2d 1107

(C.A.D.C.).

‘ Grant V. Hogan, 605 F. 2d 1220 (C.A. 3).

* Bramblett v. Desobry, 490 F. 2d 406 (C.A. 6), certiorari

denied, 419 U.S. 872. But see Hunt v. Weinberger, supra.

'' Twin Cities Chippewa Tribal Council v. Minnesota Chip-

pewa Tribe, 370 F. 2d 529 (C.A. 8).

‘* Nguyen da Yen V. Kissinger, Nos, 76-2493 and 75-2632,

decided November 5, 1975 (C.A. 9).

' The Second Circuit considers the question open. Aguayo

v. Richardson, 473 F. 2d 1090, 1101-1102 (C.A. 2), certiorari

denied, 414 U.S. 1146.

13

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

ROBERT H. Bork,

Solicitor General.

Rex E. LEE,

Assistant Attorney General.

HARRIET S. SHAPIRO,

Assistant to the Solicitor General.

ROBERT E. Kopp,

THOMAS G. WILSON,

Attorneys.

APRIL 1976.

la

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 75-1069

MISTER SANDERS, PLAINTIFF-APPELLANT

v.

CASPAR WEINBERGER, Secretary of Health,

Education and Welfare, DEFENDANT-APPELLEE

Appeal from the United States District Court

for the Northern District of Indiana

Hammond Division—No. H 74 C 146

ALLEN SHARP, Judge

Argued May 28, 1975 Decided September 12, 1975

Before TUTTLE,* TONE and BAUER, Circuit Judges.

TUTTLE, Circuit Judge. Mister Sanders appeals

the order of the district court dismissing his com-

plaint challenging the refusal of the Secretary of

Health, Education and Welfare to reopen or recon-

* Honorable Elbert P. Tuttle, United States Circuit Judge,

Fifth Circuit, sitting by designation.

2a

sider a 1966 disallowance of his claim for Social

Security benefits. The sole question which we consider

on appeal is whether the district court had jurisdic-

tion to review tne Secretary’s decision. We conclude

that there was jurisdiction, and accordingly we re-

verse.

The plaintiff applied in 1964 for Social Security

disability benefits claiming that he was disabled due

to a mental impairment, and that this disability arose

prior to the expiration of his insured status under the

Act, 42 U.S.C. $§ 416(i), 423. This claim was de-

nied.’ A final agency order was entered. Judicial re-

view of this order was not sought. The plaintiff made

his second application in 1973, almost seven years

after final agency action on his earlier application.

This application was denied on the grounds of the

prior determinations’ effect, res judicata, and the

plaintiff’s request for an administrative hearing and

administrative review of this denial were similarly

denied on the grounds of res judicata, Section 405(h)

of the Act provides:

“The findings and decision of the Secretary

after a hearing shall be binding upon all indi-

1 We will not discuss the merits of the plaintiff’s claim. As

the Secretary failed to file a certified copy of the administra-

tive record in the case below, the plaintiff has not had the

opportunity fully to develop his case as to whether there was

error on the face of the record. Counsel for plaintiff at oral

argument, in response to our questions, stated several possible

errors, and it is enough for the purposes of this appeal that

the plaintiff’s claim of error on the face of the record is not

clearly without merit.

viduals who were parties to such hearing. No

findings of fact or decision of the Secretary shall

be reviewed by any person, tribunal, or govern-

mental agency except as herein provided.”

Under the Act, a claimant may seek judicial review

of a final agency order denying disability benefits if

the request for review is filed within sixty days. 42

U.S.C. § 405(g). Such review is limited to a deter-

mination whether there was substantial evidence to

support the agency findings.’

Pursuant to his statutory authority, the Secretary

has promulgated regulations which define the cir-

cumstances under which decisions become final and

under which final decisions may be reopened.’ 20

C.F.R. § 404.937 provides that the agency may dis-

miss a request for a hearing on the grounds of res

judicata:

“(a) Res judicata. Where there has been a pre-

vious determination or decision by the Secretary

with respect to the rights of the same party on

the same facts pertinent to the same issue or

issues which has become final either by judicial

affirmance or, without judicial affirmance or,

without judicial consideration, upon the claim-

2 Section 405(g) provides in relevant part: “The findings

of the Secretary as to any fact, if supported by substantial

evidence, shall be conclusive. . . .”

* Section 405(a) gives the Secretary “full power and au-

thority to make rules and regulations and to establish pro-

cedures, not inconsistent with the provisions of [Title II},

which are necessary or appropriate to carry out such provi-

sions.”

4a

ant’s failure timely to request reconsideration

hearing, or review or to commence a civil action

with respect to such determination or decision.”

The regulations also provide that a final adverse de-

cision may be reopened within 12 months, and may

be reopened after 12 months but within four years

of the initial determination, upon a showing of “good

cause” * which is defined in 20 C.F.R. §$§ 404.958(a)

and 404.957(c) (8). “Good cause” includes a showing

of new and material facts, or “for the purpose of cor-

recting clerical error or error on the face of the evi-

dence on which [the] determination or decision was

based.”

Because the plaintiff failed to request that his ap-

plication’s denial be reopened within four years, the

administrative law judge held that the Secretary’s

earlier adverse decision could only be reopened pur-

suant to 20 C.F.R. § 404.957(c) (8) for error on the

face of the evidence, and that no such error on the

face of the evidence had been shown.”

*20 C.F.R. § 404.957(a) provides simply that an adverse

determination may be reopened within 12 months of the initial

determination; 20 C.F.R. § 404.957(b) provides for the longer

four year period upon a showing of “good cause.”

* This regulatory maze has been aptly described as “a model

of what regulations addressed mostly to laymen—or even to

lawyers—ought not to be.” Cappadora v. Celebrezze, 356 F.2d

1, 3 n.1 (2d Cir. 1966). 20 C.F.R. § 404.957(c) (8) permits

reopening an adverse decision “[a]t any time” but only when

“Cs]uch ... decision is unfavorable . . . to the party thereto

but only for the purpose of correcting . . . error on the face

of the evidence on which such . . . decision was based.”

5a

As we have noted, until shortly before oral argu-

ment in this case counsel for the plaintiff did not

have a copy of the administrative record in the ear-

lier adverse determination and was thus understand-

ably limited in his ability to make a showing of error

“on the face of the evidence.” The question before us

is whether the decision of the agency not to reopen

the prior determination is reviewable for an abuse of

discretion.

It seems quite clear that the Act itself does not ex-

pressly authorize such review. Section 405(h), the

Secretary argues, precludes judicial review save as

it is expressly authorized by the Act itself. Thus, the

Secretary argues, the review provisions of the Ad-

ministrative Procedure Act, 5 U.S.C. §§ 701-706, are

inapplicable. We disagree.

The circuits are divided on the question of whether

section 10 of the Administrative Procedure Act, 5

U.S.C. §§ 701-706, contains an independent grant of

subject-matter jurisdiction, without regard to the

amount in controversy. We choose to follow those cir-

cuits which hold that it does. See Pickus v. United

States Board of Parole, 507 F.2d 1107 (D.C. Cir.

1974); Bradley v. Weinberger, 483 F.2d 410 (1st

Cir. 1973); Brennan v. Udall, 379 F.2d 803 (10th

Cir. 1967); Deering Milliken, Inc. v. Johnston, 295

F.2d 856 (4th Cir. 1961); cf. Brandt v. Hickel, 427

F.2d 53, 55 n. 2 (9th Cir. 1970). See also Davis,

Administrative Law Treatise § 23.02 (Supp. 1970).°

*Contra: Bramblett v. Desobry, 490 F.2d 405 (6th Cir.

1974), cert. denied, 419 U.S. 872 (1974); Zimmerman V.

6a

In particular, the Act authorizes judicial review of

“final agency action for which there is no other ade-

quate remedy in a court,” 5 U.S.C. § 704, except:

“to the extent that—(1) statutes preclude judi-

cial review; or (2) agency action is committed

to agency discretion by law.” 5 U.S.C. § 701(a).

The circuits are likewise split on the question whether

§ 405(h) of the Social Security Act bars review un-

der the APA. In our view the leading case of Cappa-

dora v. Celebrezze, 356 F.2d 1 (2d Cir. 1966), was

correctly decided, and in so holding we join the First,

Third and Sixth Circuits. Enrique Ruiz-Olan v. Secre-

United States Government, 422 F.2d 326 (3d Cir. 1970),

cert. denied, 399 U.S. 911 (1970); Twin Cities Chippewa

Tribal Council Vv. Minnesota Chippewa Tribe, 370 F.2d 529

(8th Cir. 1967), but see State Highway Commission of Mis-

sourt V. Volpe, 479 F.2d 1099 (8th Cir. 1973). Rulings on the

Second Circuit are inconclusive on the question. Ove Gus-

tavsson Contracting Co. Vv. Floete, 278 F.2d 912, 914 (2d Cir.

1960), cert. denied, 364 U.S. 894 (1960), holds that section

i0 of the Administrative Procedure Act does not independ-

ently confer federal jurisdiction. Cappadora v. Celebrezze,

356 F.2d 1, 5-6 (2d Cir. 1966), however, discussed in the

text, infra, assumes that it does. See Toilet Goods Ass’n V.

Gardner, 360 F.2d 677, 679 n. 1 (2d Cir. 1967), aff’d, 387

U.S. 158 (1967). But compare Wolff v. Selective Service

Board, 372 F.2d 817, 826 (2d Cir. 1967). And see Mills v.

Richardson, 464 F.2d 995, 1001 n. 9 (2d Cir. 1972), stating

that the question had not yet been determined in the Second

Circuit. This confusion is recognized in Aguayo V. Richardson,

473 F.2d 1096, 1101-1102 (2d Cir. 1973), cert. denied, 414 U.S.

1146 (1974). As Judge Friendly observed in the latter opinion,

judicial and academic writers differ on whether the Supreme

Court has taken a position on this question in Rusk v. Cort,

369 U.S. 367 (1962), and Flast v. Cohen, 392 U.S. 83 (1968).

Ta

tary of HEW, 511 F.2d 1056 (1st Cir. 1975); Davis

v. Richardson, 460 F.2d 772 (3d Cir. 1972) ; Maddox

v. Richardson, 464 F.2d 617 (6th Cir. 1972).’

Since Cappadora was decided in 1966 there has

been an enormous expansion in the case law constru-

ing the non-reviewability provisions of the APA. The

Supreme Court has held that there is virtually a pre-

sumption of judicial review of administrative action.

Abbott Laboratories v. Gardner, 387 U.S. 136, 140

(1967), unless a contrary purpose is fairly discern-

ible in the statutory scheme, Data Processing Service

v. Camp, 397 U.S. 150, 157 (1970). Agency action

is normally found to be non-reviewable “only upon a

showing of ‘clear and convincing evidence’ of a con-

trary legislative intent.” Abbott Laboratores v.

Gardner, supra, 387 U.S. at 141. Clearly the absence

of statutory language expressly authorizing judicial

review is insufficient to offset the presumption that

administrative action is reviewable. “Indeed, judicial

review of such administrative action is the rule, and

non-reviewability an exception which must be dem-

onstrated.” Barlow v. Collins, 397 U.S. 159, 166

(1970).

? The Ninth and Tenth Circuits have held the contrary, that

review is precluded by 42 U.S.C. § 405(h). Stuckey v. Wein-

berger, 488 F.2d 904 (9th Cir. 1973); Wallace v. Weinberger,

488 F.2d 606 (9th Cir. 1973) cert. denied, 417 U.S. 91.

(1974); Neighbors v. Secretary of HEW, F.2d ——

(10th Cir., August 5, 1974). We note that the Ninth Circuit’s

en banc consideration of the question resulted in a sharply

divided court.

8a

Without the benefit of this guidance from the Su-

preme Court, the Second Circuit found that the lan-

guage of § 405(h) did not expressly preclude judicial

review of the Secretary’s refusal to reopen a deter-

mination:

“!'We] do not believe that Congress would have

wished to close the doors of the courts to a

plaintiff whose claim for social security benefits

was denied because of an unreasonable or in-

appropriate agency rule on reopening or because

of a truly arbitrary administrative decision... .

Absent any evidence to the contrary, Congress

may rather be presumed to have intended that

the courts should fulfill their traditional role of

defining and maintaining the proper bounds of

administrative discretion and safeguarding the

rights of the individual.” Cappadora, supra,

356 F.2d at 6.

Following submission and oral argument the Su-

preme Court has decided Weinberger v. Salfi, 95 S.Ct.

2457 (1975). The government, by supplemental brief,

contends that this decision establishes the proposition

that there can be no review in this case. We conclude

that it does not. What, and all that, was be.ore the

Court in Salfi was whether a denial of benefits could

be reviewed by a court proceeding under 28 U.S.C.

$1331. The Court held that the specific terms of

$405 (h), “[n]jo action against the United States,

(or) the Secretary . .. shall be brought under

[$$ 1331 et seqg.] of Title 28 to recover on any claim

... barred suit under § 1331. The Court did not

consider the review provisions of the Administrative

Procedure Act, however, as it found that review was

9a

proper under § 405(g) of the Act. The decision is

thus inapposite to the case before us.

In our view the Cappadora court correctly con-

strued the § 405(h) language forbidding review “ex-

cept as herein provided” to apply only to judicial

review of final administrative orders on the merits

of a claim:

“Although it could be argued that the second

sentence of § 405(h) of the Social Security Act

is a statutory preclusion of such review [of a

decision not to reopen what had become a final

determination], the more reasonable construc-

tion is that this simply forbids attempts to re-

view final decisions on the merits by any route

other than that provided in § 405(g).” 356 F.

2d at 5..

We further agree with Cappadora that the decision

to reopen a determination has not been left to the

unreviewable discretion of the agency. Accordingly

the district court possessed jurisdiction under the Ad-

ministrative Procedure Act to review the Secretary’s

refusal to reopen the plaintiff’s adverse determination.

We remand for consideration by the district court as

to whether the Secretary abused his discretion in fail-

ing to reopen the determination.

Reversed and Remanded for further proceedings

not inconsistent with this opinion.

BAUER, Circuit Judge, dissenting. I feel compelled

to dissent, It seems to me the simple language of the

10a

statute involved forbids judicial review of the deci-

sion of the Secretary not to reopen the determination.

I would, therefore, affirm.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

lla

APPENDIX B

OPINION BY JUDGE TUTTLE

(JUDGE BAUER DISSENTS)

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

SEPTEMBER 12, 1975

Before

Hon. ELBERT P. TUTTLE, Circuit Judge *

Hon. PHILIP W. TONE, Circuit Judge

Hon. WILLIAM J. BAUER, Circuit Judge

No. 75-1069

MISTER SANDERS, PLAINTIFF-APPELLANT

v8.

CASPAR WEINBERGER, ETC., DEFENDANT-APPELLEE

Appeal from the United States District Court

for the Northern District of Indiana

Hammond Division—No. H 74 C 146

ALLEN SHARP, Judge

* Honorable Elbert P. Tuttle, United States District Judge,

Fifth Circuit, sitting by designation.

12a

This cause came on to be heard on the transcript

of the record from the United States District Court

for the Northern District of Indiana, Hammond Divi-

sion, and was argued by counsel.

On consideration whereof, it is ordered and ad-

judged by this court that the judgment of the said

District Court in this cause appealed from be, and

the same is hereby, REVERSED and REMANDED, with

costs, in accordance with the opinion of this Court

filed this date.

13a

APPENDIX C

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

Civil No. H 74-146

[Filed Nov. 15, 1974]

MISTER SANDERS

CASPAR WEINBERGER, Secretary of Dept. of Health,

Education and Welfare

ORDER

The Defendant’s MOTION To DISMISS is GRANTED.

The cause is ordered dismissed as this court is with-

out jurisdiction over the subject matter of this suit.

ENTER: November 15, 1974

/s/ Allen Sharp

Judge, U. S. District Court

MEMORANDUM

This cause was filed after an order of the Appeals

Council affirming the dismissal of plaintiff’s action by

the Administrative Law Judge. That determination

was based upon the doctrine of res judicata—stating

l4a

that the prior determination dated February 24, 1966

stands as the fina] determination of the Departmen¢.

Plaintiff filed no civil action subsequent to the 1966

dismissal.

Plaintiff relies upon the case of Ortiz v. Secretary

of H.E.W. to uphold his position that the affidavit

and supporting documents attached to the Motion to

Dismiss are insufficient to sustain the res judicata

defense. Ortiz, Id., 355 F.Supp. 318, (D.C, P.R.

1973). The court in Ortiz denied the motion to dis-

miss because there was no showing that the hearing

examiner included findings that the case had been

considered for possible reopening pursuant to 20 CFR

404.957 when the examiner dismissed the Ortiz case

under 20 CFR 404.937(a). That is not the situation

in the instant case. In Exhibit 1 attached to the mem-

orandum, the Administrative Law Judge, on January

15, 1973, specifically included the issue of possible

reopening before dismissing the action because it was

res judicata.

There is no compelling reason for the court to order

a complete transcript as requested by the plaintiff

when the item lacking in the Ortiz case is specifically

referred to in the Order of Dismissal] of January 15,

1973.

Therefore, this court is without jurisdiction to con-

sider the subject matter of this suit and the dismissal

is ordered to be entered accordingly.

15a

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

DECEMBER 12, 1975

Before

Hon. ELBERT P. TUTTLE, Senior Circuit Judge *

Hon. PuHitip W. TONE, Circuit Judge

Hon. WILLIAM J. BAUER, Circuit Judge

No. 75-1069

MISTER SANDERS, PLAINTIFF-APPELLANT

v8.

CASPAR WEINBERGER, Secretary of Health,

Education and Welfare, DEFENDANT-APPELLEE

Appeal from the United States District Court

for the Northern District of Indiana

Hammond Division—No. H 74 C 146

ALLEN SHARP, Judge

* Senior Circuit Judge Elbert P. Tuttle of the United States

Court of Appeals for the Fifth Circuit is sitting by designa-

tion.

l6a 17a

ORDER UNITED STATES COURT OF APPEALS

On consideration of the petition for rehearing of we ee

the defendant-appellee and the majority of the panel Chicago, Illinois 60604

having voted to deny the petition for rehearing,

IT IS ORDERED that the petition for rehearing

be, and the same is hereby, DENIED. | Before

Judge Bauer would grant the petition for rehear- Hon. THOMAS E. FAIRCHILD, Chief Judge

~_ | Hon. LUTHER M. SwyGeErT, Circuit Judge

Hon. WALTER J. CUMMINGS, Circuit Judge

| Hon. WILBUR F. PELL, JR., Circuit Judge

Hon. JOHN PAUL STEVENS, Circuit Judge

Hon. RoBeRT A. SPRECHER, Circuit Judge

: Hon. Puitip W. TONE, Circuit Judge

Hon. WILLIAM J. BAUER, Circuit Judge

DECEMBER 12, 1975

No. 75-1069

MISTER SANDERS, PLAINTIFF-APPELLANT

vs.

CASPAR WEINBERGER, Secretary of Health,

Education and Welfare, DEFENDANT-APPELLEE

Appeal from the United States District Court

for the Northern District of Indiana

Hammond Division—No. H 74 C 146

ALLEN SHARP, Judge

18a

ORDER

On consideration of the suggestion for rehearing

en banc filed in the above-entitled cause, a vote on

the suggestion having been called for, and a majority

of the active members of the court having voted to

deny a rehearing en bane,

IT IS ORDERED that the suggestion for rehearing

en banc be, and the same is hereby, DENIED.

Judges Pell and Bauer would rehear the appeal en

banc.

—- + a

19a

APPENDIX E

1. Section 205(g) of the Social Security Act, 42

U.S.C. 405(g), provides in part:

Any individual, after any final decision of the

Secretary made after a hearing to which he was

a party, irrespective of the amount in contro-

versy, may obtain a review of such decision by

a ‘ivil action commenced within sixty days after

the mailing to him of notice of such decision or

within such further time as the Secretary may

a"

2. Section 205(h) of the Social Security Act, 42

U.S.C. 405(h), provides:

The findings and decisions of the Secretary af-

ter a hearing shall be binding upon all individuals

who were parties to such hearing. No findings

of fact or decision of the Secretary shall be re-

viewed by any person, tribunal, or governmental

agency except as herein provided. No action

against the United States, the Secretary, or any

officer or employee thereof shall be brought un-

der section 41 of Title 28 to recover on any

claim arising under this subchapter.

3. The Administrative Procedure Act, 5 U.S.C.

701(a), provides:

This chapter applies, according to the provi-

sions thereof, except to the extent that—

(1) statutes preclude judicial review; or

(2) agency action is committed to agency

discretion by law.

4.

703,

20a

The Administrative Procedure Act, 5 U.S.C.

provides:

The form of proceeding for judicial review is

the special statutory review proceeding relevant

to the subject matter in a court specified by

statute or, in the absence or inadequacy thereof,

any applicable form of legal action, including

actions for declaratory judgments or writs of

. prohibitory or mandatory injunction or habeas

dD.

corpus, in a court of competent jurisdiction. Ex-

cept to the extent that prior, adequate, and ex-

clusive opportunity for judicial review is pro-

vided by law, agency action is subject to judicial

review in civil or criminal proceedings for judi-

cial enforcement.

The Administrative Procedure Act, 5 U.S.C.

704, provides in part:

Agency action made reviewable by statute and

final agency action for which there is no other

adequate remedy in a court are subject to judi-

cial review. * * *

6. 20 C.F.R. 404.937 provides in part:

The Administrative Law Judge may, on his

own motion, dismiss » hearing request, either en-

tirely or as to any stated issue, under any of

the following circumstances:

(a) Res judicata. Where there has been

a previous determination or decision by the

Secretary with respect to the rights of the

same party on the same facts pertinent to

the same issue or issues which has become

final either by judicial affirmance or, with-

out judicial consideration, upon the claim-

Oe ee

2la

ant’s failure timely to request reconsidera-

tion, hearing, or review, or to commence a

civil action with respect to such determina-

tion or decision * * *.

7. 20 C.F.R. 404.957 provides in part:

An initial, revised, or reconsidered determina-

tion of the Administration or a decision or re-

vised decision of a hearing examiner or of the

Appeals Council which is otherwise final * * *

may be reopened:

(a) Within 12 months from the date of

the notice of the initial determination * * *

to the party to such determination, or

(b) After such 12-month period, but

within 4 years after the date of the notice

of the initial determination * * * to the

party to such determination, upon a finding

of good cause for reopening such determina-

tion or decision, or

(c) At any time when:

* * * *

(8) Such * * * determination or de-

cision * * * is unfavorable * * * to the

party thereto but only for the purpose

of correcting clerical error or error on

the face of the evidence on which such

determination or decision was based.

* * * *

WH wv. S. Goveanment printine orrice; 1976 204244 234