Petition — Heckler v. Day

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FILED aa |

82-137] FEB 34 1993

dam lnithidain |. STEV AS,

CLERK

In the Supreme Court of the Anited States

OCTOBER TERM, 1982

SECRETARY OF HEALTH AND HUMAN SERVICES,

PETITIONER

LEON S. DAY, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

Rex E. LEE

Solicitor General

J. PAUL MCGRATH

Assistant Attorney General

KENNETH 8S. GELLER

Deputy Solicitor General

EDWIN S. KNEEDLER

Assistant to the Solicitor General

WILLIAM KANTER

JOHN F. CORDES

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 638-2217

QUESTIONS PRESENTED

1. Whether, in the absence of any showing of bad

faith, delays in the administrative adjudication of claims

for disability benefits under Title II of the Social Secu-

rity Act, 42 U.S.C. (& Supp. IV) 401 et seq., arising

from a substantial backlog of cases and resource limita-

tions, violate claimants’ statutory right to “reasonable

notice and opportunity for a hearing” (42 U.S.C.

405(b)) and justify judicial imposition of time limits on

the processing of such claims.

2. Whether, in the absence of statutory authoriza-

tion, a court may enforce judicially imposed processing

deadlines by requiring the Secretary of Health and Hu-

man Services to pay interim benefits from the Disabili-

ty Insurance Trust Fund to claimants who have not

been found entitled to such benefits but whose cases

have not been decided prior to the deadlines.

PARTIES TO THE PROCEEDING

The petitioner is the Secretary of Health and Human

Services. Richard S. Schweiker, the appellant in the

court of appeals, resigned as Secretary effective Febru-

ary 4, 1983, and his successor has not yet been ap-

pointed. The respondents are Leon S. Day and Amedie

Maurais, who are representatives of the following class

of claimants for disability benefits under Title II of the

Social Security Act, 42 U.S.C. (& Supp. IV) 401 et seq.:

All present and future Vermont residents seeking

to secure Social Security disability benefits who,

following an initial determination by the [Secre-

tary] that no disability exists, experience an unrea-

sonable delay in the scheduling of and/or issuance

of decisions in reconsiderations and fair hearings.

App. D, infra, 12a n.1.!

1 Respondents Day and Mawais had received an ALJ hearing

and decision prior to the district court’s certification of the class

on June 14, 1979. The district court held that the case was not

moot, however, concluding that the case fell within the excep-

tion recognized in Gerstein v. Pugh, 420 U.S. 103, 110 n.11

(1975), for situations in which the challenged condition is tempo-

rary and the issue as regards any particular class representa-

tive might become moot before the district court even could rule

on the class certification issue. C.A. App. 78a. See also Sosna

v. Iowa, 419 U.S. 393, 402 n.11 (1975); United States Parole

Commission v. Geraghty, 445 U.S. 388, 398-399 (1980). The dis-

trict court also found that respondents Day and Maurais would

be suitable representatives of the class in these circumstances.

C.A. App. 77a; see United States Parole Commission v.

Geraghty, supra, 445 U.S. at 405-407.

TABLE OF CONTENTS

Page

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DOE CL cc caus cwhigutivan Wine eebare ae ot l

Statutory provision involved .................. 2

NENA shan v5. c0ds'qnd decries pendbaaevemmas 2

Li EEE op cdchwuaacawsrcaveveces 4obs 2

2. The proceedings in this case ............ 6

Reasons for granting the petition.............. 11

ass ss ceases sek auch deten'onn eles 24

RC hdd Una ancy dans 645 mee cee la

LEE uth oveue Gal wks ca taekweeeckee swe 10a

ETS «.. duslen'steexbuleb nade hence elerekes lla

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SE ns Sd s sad od iii o ce aeons wae 32a

TABLE OF AUTHORITIES

Cases:

Army and Air Force Exchange Service v.

Sheehan, No. 80-1437 (June 1, 1982)..... 22

Barnett v. Califano, 580 F.2d 28 ....... 7, 8, 10,

12, 14, 15, 17

Blankenship v. Secretary of HEW, 532

Py GI EE sé sc nae vne sie sebuah 13-14, 17

Blankenship vy. Secretary of HEW,

_ 2 > Sa eee 10, 13, 15, 46

Califano v. Yamasaki, 442 U.S. 682 ...... 21

Caswell v. Califano, 583 F.2d9..... 9, 12, 15, 17

Crosby v. Social Security Administration,

No. 81-675-T (D. Mass. Nov. 16, 1982) ... 13, 16

Ill

Cases:—Continued Page

Federal Crop Insurance Co. v. Merrill, 332

OE a ID nie ata a bd 23

Finch v. Schweiker, No. Civ. Nos.

C 75-0185 L(A), C 76-0441 L(A) (W.D.

Be, POs iy SO) cee wcccnvecasvngneaes 13, 14

FTC vy. J. Weingarten, Inc., 336 F.2d 687 . 16

INS v. Miranda, No. 82-29 (Nov. &, 1982) . 23

Lassiter v. Department of Social Services,

Ge EEE BO wice'cdectvcdseateunendgpeecs 19

Lehman v. Nakshian, 453 U.S. 156 ....... 23

Little v. Streater, 462 U.S. 1 ...cccccccees 19

Martinez v. Califano, Civ. No. 73-C-900

a SR ge Rp OS :. e eer 12, 16, 17

Mathews vy. Eldridge, 424 U.S. 319 ..... 4, 5, 18,

19, 21, 22

Open America vy. Watergate Special Prose-

cution Force, 547 F.2d 606 ..........6.. 20

Pine Hill Coal Co. v. United States, 259

TENG toca 1u COA US as Faire eee OS 22

Schweiker v. Hansen, 450 U.S. 785.... 11, 12, 23

Sharpe v. Harris, 621 F.2d 530 .... 10, 12, 16, 17

United States v. Testan, 424 U.S. 392 ..... 22, 23

Vermont Yankee Nuclear Power Corp. v.

National Resources Defense Council,

ed, RR EE nsec kbSabaede enews 21

White v. Mathews, 559 F.2d 852, cert.

Gented, 405 U.S. 906.62. wvescccescnsus passim

Wright v. Califano, 587 F.2d 345 .. 10, 14, 15, 16

Constitution, statutes and regulations:

United States Constitution:

Article 1, Section 9, Clause 7 ......... 22

Constitution, statutes and regulations:—

Continued Page

Due Process Clause (Fifth Amend-

te ERE a en eae 9

Administrative Procedure Act, 5 U.S.C. ... 4

Social Security Act, Title II, 42 U.S.C. (&

i) oF 2

Section 205(a), 42 U.S.C. 405(a)....... 13

Section 205(b), 42 U.S.C. (Supp. IV)

MEE Ween a Genie cackt chess ises 3,

Section 205(g), 42 U.S.C. 405(g)....... 4

Section 205(i), 42 U.S.C. 405(i)........ 10, 22

Section 221(a), 42 U.S.C. 421(a)....... a

Section 221(c), 42 U.S.C. 421(e) ....... 3

Section 221(i), 42 U.S.C. (Supp. IV) 421

MT aM btn do Radleie'e cc bodekkeeeccine 4

Section 223(a)(1), 42 U.S.C. (& Supp.

| ES a 22

Section 223(d)(2)(A), 42 U.S.C.

RS aR a 2

Social Security Act, Title XVI, 42 U.S.C. (&

I Se NE OO OO oi enn ocavkcasss 2

Section 1611(a), 42 U.S.C. 1382(a)..... 18

Section 1611(a)(2)(B), 42 U.S.C.

eee eee 2

Section 1631(c\(2), 42 U.S.C. 1383(e2).. 5, 18

Social Security Disability Amendments of

1980, Pub. L. No. 96-265, 94 Stat. 441 et

seq.:

Section 304(a), 94 Stat. 457 ........... 5

Section 308, 94 Stat. 458 ............. 6, 19

Pub. L. No. 97-455, 96 Stat. 2497 et seq.:

Section 2, 96 Stat. 2498. .............. 6, 21

Section 3, 96 Stat. 2499 .............. 20

Section 4, 96 Stat. 2499 .............. 6, 21

Constitution, statutes and regulations:—

Continued

Pub. L. No. 94-202, Section 3, 89 Stat.

NN ete tease e ree anes

20 C.F.R.:

Section 404.907-404.921..........0.08-

ee i ev beeert eens

Section 404.929-404.961...........065.

Section 404.967-404.983 ..........000-

EN MRED Co coc cv ccccevocecsces

rr eee

Part 416, Subpart N .........--eeeeee

Miscellaneous:

128 Cong. Rec. (daily ed. Dec. 21, 1982):

Department of Health and Human Services,

Office of Hearings and Appeals, Key

Workload Indicators (Oct. 1982).........

Department of Health and Human Services,

Social Security Annual Report to the

Congress for Fiscal Year 1981 (1982) ....

Goldman, Administrative Delay and Judi-

cial Relief, 66 Mich. L. Rev. 1923 (1968) .

J. Mashaw et al. Social Security Hearings

and Appeals: A Study of the Social Secu-

rity Administration Hearing System

Re hack bss cenea ethan noeecedubsces

Note, Judicial Resolution of System Delays

in Social Security Hearings, 79 Colum. L.

A, EP UTED vcbicvesccvcccesnsvesnces

Page

VII

Miscellaneous:—Continued

teport of the Staff of the House Subcomm.

on Social Security. of the House Comm. on

Ways and Means, 94th. Cong., Ist Sess..

Appeals Process: Areas of Possible

Administrative or Legislative Actions,

CRANES: PG BTU nedioic's cck chest snes ccs

Subcomm. on Social Security of the House

Comm. on Ways and Means, 97th Cong.,

Ist Sess., Social Security Hearings and

Appeals: Pending Problems and Pro-

posed Solutions (Comm. Print 1981) .....

Page

In the Supreme Court of the Anited States

OCTOBER TERM, 1982

No.

SECRETARY OF HEALTH AND HUMAN SERVICES,

PETITIONER

LEON S. DAY, ET AL.

PETITION FOR A WV IT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

The Solicitor General, on behalf of the Secretary of

Health and Human Services, petitions for a writ of cer-

tiorari to review the judgment of the United States

Court of Appeals for the Second Circuit in this case.

OPINIONS BELOW

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

la-9a) is reported at 685 F.2d 19. The opinions of the

district court (Apps. D & E, infra, 12a-20a, 21a-31a)

are unreported.

JURISDICTION

The judgment of the court of appeals (App. B, infra,

10a) was entered on June 28, 1982, and a petition for re-

hearing was denied on September 17, 1982 (App. C,

infra, 1la). On December 7, 1982, Justice Marshall ex-

tended the time within which to file a petition for a writ

of certiorari to and including February 14, 1983. The ju-

risdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATUTORY PROVISION INVOLVED

Section 205(b) of the Social Security Act, 42 U.S.C.

(Supp. IV) 405(b), provides in pertinent part:

The Secretary is directed to make findings of

fact, and decisions as to the rights of any individual

applying for a payment under this subchapter. Any

such decision by the Secretary which involves a de-

termination of disability and which is in whole or in

part unfavorable to such individual shall contain a

statement of the case, in understardable language,

setting forth a discussion of the evidence, and

stating the Secretary’s determination and the rea-

son or reasons upon which it is based. Upon re-

quest by any such individual or upon request by a

wife, divorced wife, widow, surviving divorced

wife, surviving divorced mother, husband, widow-

er, child, or parent who makes a showing in writ-

ing that his or her rights may be prejudiced by any

decision the Secretary has rendered, he shall give

such applicant and such other individual reasonable

notice and opportunity for a hearing with respect

to such decision, and, if a hearing is held, shall, on

the basis of evidence adduced at the hearing, af-

firm, modify, or reverse his findings of fact and

such decision.

STATEMENT

1. Background

Title II of the Social Security Act, 42 U.S.C. (&

Supp. IV) 401 et seg., provides, inter alia, for the pay-

ment of disability benefits to insured individuals who,

because of physical or mental impairment, are unable to

do their previous work or to engage in any kind of sub-

stantial gainful work that exisis in the national

economy. 42 U.S.C. 423(d)(2)A). Disability benefits

also are payable under the Supplemental Security In-

come (SSI) program established by Title XVI of the

Act, 42 U.S.C. (& Supp. IV) 1381 et seg. See 42 U.S.C.

1382(a)(2)(B). Both statutory provisions require the

Secretary, in determining whether a claimant is dis-

abled, to consider the claimant’s physical and mental

impairments and the vocational factors of age, educa-

tion, and work experience.

The disability progams established by Title II an?’

AVI “are of a size and extent difficult to comprehend.”

Richardson vy. Perales, 402 U.S. 389, 399 (1971). In fis-

cal year 1981 alone, approximately 2.3 million claims for

disability benefits were filed under the two titles.? To

provide for an orderly determination of the eligibility of

this number of claimants, Congress and the Secretary

have devised a four-level system of administrative con-

sideration of disability claims.

Under the Title II program, with which this case is

concerned, the determination whether a claimant is un-

der a disability and the date on which the disability be-

gan or ceased is made by a state agency in the first in-

stance. 42 U.S.C. 421(a); 20 C.F.R. 404.1503. By

regulation, the Secretary has provided that if the claim-

ant is dissatisfied with the initial eligibility determina-

tion, he may request a de novo reconsideration by the

appropriate state agency. 20 C.F.R. 404.907-404.921

and 404.1615. In fiscal year 1981, more than 413,000 re-

quests for reconsideration were processed.

If the decision after reconsideration by the state

agency is adverse to the claimant, he is entitled to a

hearing by the Secretary in the same manner as provid-

ed in 42 U.S.C. (Supp. IV) 405(b) for all other claimants

under the Old Age, Survivors and Disability Insurance

(OASDI) Program. See 42 U.S.C. (Supp. IV) 421(c); 20

C.F.R. — 404.929-404.961. Under 42 U.S.C.

(Supp. IV) 405(b), the Secretary is required to provide

“reasonable notice and opportunity for a hearing” with

* Department of Health and Human Services, Social Security

Annual Report to the Congress for Fiscal Year 1981, at 23, 26

(1982).

* Department of Health and Human Services, Office of Hear-

ings and Appeals, Key Workload Indicators 15 (Oct. 1982).

respect to “decisions as to the rights of any individual

applying for a payment” of benefits under Title II. If

the claimant is dissatisfied with the decision rendered

after the hearing, he may take an administrative appeal

to the Appeals Council in HHS. 20 C.F.R.

404.967-404.983. After the individual has exhausted his

administrative remedies in this fashion, he may seek ju-

dicial review of a final denial of benefits pursuant to 42

U.S.C. (Supp. IV) 405(g). See generally Mathews v.

Eldridge, 424 U.S. 319, 335-339 (1976).4

The administrative hearings provided for in 42

U.S.C. (& Supp. IV) 405(b) are conducted by a corps of

Administrative Law Judges (ALJs) in HHS. 20 C.F.R.

404.929. The total number of ALJ hearings requested

annually under all Social Security programs increased

from approximately 72,000 in fiscal year 1973 to more

than 320,000 in fiscal year 1982.5 The vast majority of

these hearing requests are in disability cases.* The in-

crease in the number of hearing requests is expected to

continue in future years, in part because of a legislative

requirement that the Secretary provide for a periodic

review of the eligibility of individuals who are already

receiving disability benefits—a process that predictably

will result in an increase in the number of recipients

whose benefits are terminated and who subsequently

request reconsideration and an ALJ hearing. See Sec-

tion 221(i) of the Act (42 U.S.C. (Supp. IV) 421 note),

4 Similar procedures are followed in SSI disability cases un-

der Title XVI of the Act. See 20 C.F.R. 416, Subpart N.

5 Key Workload Indicators, note 3, supra, at 1.

® In fiscal year 1981, more than 250,000 of the 281,737 hearing

requests were in disability cases. 1981 Annual Report, note 2,

supra, at 23, 26. In fiscal year 1980, more than 95% of all hear-

ing requests involved Title II or Title XVI disability claims.

Subcomm. on Social Security of the House Comm. on Ways and

Means, 97th Cong., Ist Sess., Social Security Hearings and

Appeals: Pending Problems and Proposed Solutions, 2 (Comm.

Print 1981).

as added by Section 304(a) of the Social Security Disa-

bility Amendments of 1980, Pub. L. No. 96-265, 94

Stat. 457.7

To meet this greatly increased workload, the number

of ALJs in HHS was increased from 420 in fiscal year

1973 to 813 in October 1982. The support staff per ALJ

was more than doubled during this same period, and

there is now an average of more than four support per-

sonnel for each ALJ. The result of these and other

administrative initiatives has been to increase the aver-

age number of dispositions per ALJ each month from 14

in 1973 to 34 in 1982. Thus, today, on the average, an

ALJ decides 1% cases each working day.* During this

same 10-year period, the average processing time from

the date on which an evidentiary hearing was requested

to the date on which the ALJ rendered his decision

varied between a high of 288 days in fiscal year 1976,

when Mathews v. Eldridge was decided (see 424 U.S.

at 341-342), to a low of 151 days in 1979. In fiscal year

1982, tle average processing time was 174 days, the

same as it had been in 1973, thereby indicating that

HHS now has been able to absorb the more than four-

fold increase in its hearing caseload since 1973 without

further extreme impact on the claimants’ interest in

receiving a hearing within a reasonable period.

Congress repeatedly has studied the problem of the

bacxlog of disability cases arising from the increase in

hearing requests (see pages 19-21, infra), but it has de-

clined to impose deadlines for the holding of hearings or

the rendering of decisions by the ALJs. For example,

although Congress provided in 42 U.S.C. 1383(¢)(2)

that Title XVI claims generally are to be determined

within 90 days of the request for a hearing, Congress

expressly excepted disability cases from that deadline,

apparently because of the complexity of the disability

determination. In 1980, Congress directed the Secre-

* See Comm. Print, note 6, supra, at 1.

* Key Workload Indicators, supra, note 3, at 1.

tary to submit for its consideration a report “recom:

mending the establishment of appropriate time limita

tions governing decisions on claims for benefits under

title I] of the Social Security Act,” including a recom-

mended time limitation for all four levels of administra.

tive review, Pub, L, No, 96-265, Section 308, 94 Stat,

458, However, Congress took no action to impose such

deadlines after receiving the Secretary's report (App,

BE, infra, 2aan.7),

Finally, in December 1982, when Congress did take

affirmative action to reduce the impact of the time

needed to adjudicate claims, it did so only in cases in-

volving the cessation of the payment of disability bene-

fits to individuals who previously had been found to be

eligible, Congress required that the state agency fur-

nish an opportunity for a face-to-face evidentiary hear:

ing at the reconsideration stage in these termination

cases in addition to the opportunity for an ALJ hearing

at a later date, Congress further provided, on a one:

year experimental basis, that the claimant in a termina:

tion case may elect to continue to receive benefits

through the ALJ stage, subject to recoupment u he is

found to have been ineligible, Pub, L.No, 97-455, See-

tions 2 and 4, 96 Stat, 2498, 2499, Congress did not pro-

vide, however, for a face-to-face hearing at the recon-

sideration stage in the case of new applications for

benefits; nor did it authorize the payment of interim

benefits pending the ALJ's decision following « hearing

on a new application,

2. The Proceedings In This Case

a. This class action was filed in the United States

District Court for the District of Vermont on Novem-

ber 15, 1978, challenging the period of time that elapsed

in Title II disability cases in Vermont between a re-

quest for recc:.sideration and the decision on reconsid-

eration and between a request for a hearing and the

convening of the hearing, Respondent Day, who had

been receiving disability benefits, was initially found to

be no longer disabled in December 1977, He requested

a reconsideration of this determination on December

21, 1977, and his claim was denied after reconsideration

on June 6, 1978—167 days later, Day then requested an

ALJ hearing, That hearing was held on December 4,

1978, soon after Day filed this action and 173 days after

he had requested the hearing, On January 17, 1979, the

ALJ issued a decision reaffirming the cessation of bene-

fits (App, D, infra, 13a-1da), Respondent Maurais, who

intervened in this suit on December 1, 1978, was

notified in April 1978 that his disability had ceased, He

requested reconsideration of that initial determination

on June 2, 1978, and an adverse reconsideration deci-

sion was rendered on January 4, 1979—215 days after

his request, Mauruis then requested an ALJ hearing,

and the hearing wae held 65 days later (id. at 14a),

b, On December 28, 1978, the district court granted

partial summary judgment for respondents with re-

spect to the timing of ALJ hearings, Relying on the

Second Circuit's prior decisions in White v. Mathews,

559 F.2d 852 (2d Cir, 1977), cert. denied, 435 U.S, 908

(1978), and Barnett vy, Califano, 580 F.2d 28 (2d Cir,

1978), the district court held that the provision in 42

U.S.C, 405(b) for the Secretary to afford a claimant

“reasonable notice and opportunity for a hearing” re-

quires that the ALJ hearing be conducted within a

“reasonable” time after it is requested (App, D, infra,

15a), In White v, Mathews, supra, a class action of Ti-

tle IT claimants in Connecticut, the court of appeals had

held that the average period of 211.8 days between a

request for a hearing and the decision following a hear-

ing did not afford an opportunity for a hearing within a

reasonable time and ordered the Secretary to reduce

that time period for Connecticut claimants to 120 days,

559 F.2d at 858-860, In Barnett vy, Califano, supra, the

court of appeals had held thet the period of 6 or 7

months that ordinarily elapsed between a hearing re-

quest and the hearing date for Title XVI disability

claimants in Vermont was unreasonable and ordered

that this tume be reduced to 90 days, 580 F.2d at 31-33,

The district court acknowledxed that the Social Secu-

rity Administration (SSA) “has made admirable strides

in reducing the average length of delay experienced by

claimants a few years ago” (App. D, infra, 17a), Never-

theless, on the basis of the holdings in White and

Barnett and evidence in this case that 43% of Vermont

residents who requested hearings on their Title II disa-

hility claims waited more than 90 days for their hear-

ings, the court found that a substantial number of

claimants had been denied their statutory right to a

hearing within a reasonable time, Accordingly, the

court ordered that ALJ hearings be held within 90 days

of a request, subject to certain exceptions for delays at-

tributable to the claimant (id, at 19a; App. F, tn/fra,

33a-34a),”

c, On August 19, 1981, the district court granted

summary judgment for respondents on the reconsidera-

tion aspect of the case as well, Although the Act does

not require that there be a de novo reconsideration by a

state agency or that any such reconsideration be held

within a reasonable time, the court reasoned that re-

consideration is an administrative prerequisite to an

ALJ hearing anc that delays in the reconsideration pro-

cedures trench on the statutory duty to provide a hear-

ing within a reasonable time (App. E, infra, 27a), The

court noted that for the years 1977-1980, reconsidera-

tion processing time ranged between 17 and 251 days in

Vermont, with a mean processing time of 68 days, and

that approximately 35% of the reconsideration requests

took more than 90 days to process, The court recog-

nized that it is often necessary to generate additional

evidence on reconsideration, but held that a period of

time for reconsideration in excess of 90 days is unrea-

* The district court previously had imposed a 90-day deadline

for the convening of a hearing is, Tithe XVI disability cases in

Vermont. See Barnett v, Califano, 680 F.2d 28 (2d Cir, 1978),

sonable except in certain situations in which delay is at-

tributable to the claimant (id. at 30a; App. F, infra,

33a), '°

The district court also ordered the Secretary to pay

interim disability benefits to any claimant who has not

received a reconsideration determination or hearing

within 180 days of the request for reconsideration or

has not received a hearing within 90 days of his hearing

request, even though the claimant has not yet been

found by the State or the Secretary to be entitled to

such benefits. These benefits were made subject to re-

coupment by the Secretary if the claimant later were

found not to be eligible (App. E, infra, 30a-31a;

App. F, infra, 34a-35a).

d, The court of appeals affirmed (App. A, infra,

la-@a), The court of appeals expressed its “sympath[y]

with the severe problems that beset SSA” and its “un-

derstand{ing) that [the district court’s] decision may

have a significant impact on its operations” (id. at 6a).

But the court nevertheless concluded that judicially

imposed timetables were appropriate for the processing

of the “flood of claims” confronting SSA (ibid., quoting

White v. Mathews, supra, 559 F.2d at 859).

The court of appeals “share[d} the First Circuit's con-

cern that ‘if the Secretary’s resources truly are inade-

quate to the task, the more litigious of the applicants

may gain an advantage over the less assertive’” (App.

A, infra, 7a, quoting Caswell v. Califano, 583 F.2d 9,

17 (ist Cir. 1978)). The court concluded, however,

again quoting the Caswell! decision, that it should not

be deterred from awarding relief to the claimants be-

fore it by “‘the alleged inability of the [Secretary] fully

‘© Because the district court found violations of the Social Se-

curity Act, it did not reach respondents’ arguments that the

challenged practices violated the Due Process Clause of the

Fifth Amendment or the Administrative Procedure Act (App.

D, infra, 15a; App. E, infra, 26a). The court of appeals likewise

did not consider those arguments (App. A, infra, 9a n.8).

to meet Nis obdDligations to otners hid.). The court ol

ie.

appeals also recognized “that in the last five years Con-

gress has involved itself heavily in the administration of

the Act” and that “Congress has refused to impose its

own deadlines,” but the court viewed Congress’ failure

to enact clarifvin ‘ legislation as Be ¢ rhaps im plying that

Congress is satisfied that the problem of ‘delay is bel Ing

handled effectively OV tne courts App. A, infra, 7a).

The court of appeals also roved the district court’s

ext en sion of its holding in White to the reconsideration

level d. at Ja-Sa

In sustaining judicially imposed time limits, tae court

of appeals explicitl, pnw 0 — re infra,

7a-8a) that its decision conflicte , Wr v. Cali-

]

fano, 587 F.2d 345 (1978), in which t the Seventh Circuit

held that the time between request and hearing did not

warrant any judicial intervention, and was at odds with

Blankenship v. Secreta f HE W, 587 F.2d 329, 335

1978), in which the Sixth | Circuit eschewed judicially

imposed deadlines and instead ordered the Secretary to

promulgate nationwide regulations to implement the

reasonable time requirement. The Second Circuit nev-

ertheless adhered to its prior precedent in White,

Barnett, and Sharpe vy. Harris, 621 F.2d 530 (1980)

(App. A, infra, 6a-a

Finally, the court of appeals rejected the contention

hat the payment of interim benefits following the viola-

tion of judicially imposed deadlines is barred by 42

U. S.C. 4050), which limits payments from the Disabili-

‘ Insurance Trust Fund to those made “[u)pon final

fire of the Secretary or upon final judgment of any

court of competent jurisdiction, that [the] person is en-

titled to any payment or payments” under Title II. In

the court’s view, this provision does not “‘{e]xcluie the

possibility of interim payments ordered by a court exer-

cising its remedial power” (App. A, infra, 8a, quoting

White v. Mathews, supra, 559 F.2d at 861). The court

of appeals did not believe that its earlier holding in

White, which awarded interim benefits in the absence

of statutorv authorization, was undermined by this

Court’s intervening decision in Schweiker v. Hansen.

150 U.S. 785 (1981). The court stated that the interim

payments at issue here flow from the “district court’s

pa,

inherent powers to fashion a remedy,” not from estop-

pel (App. A, infra, Sa-9a

REASONS FOR GRANTING THE PETITION

This case direct concerns tne most serious adminis-

; ; . :

trative problem confronting the Department of Health

and Human Services toda n its implementation of tne

’ "fT ? ’ .

oclal Security Av how to assure accurate, falr,

11? lf ry y | fficiant rryiy ? ) tf rntit YY rit

Inliorm ant CLlLiCie cele {) QO] © € lLIe (a

T 1j ahilit. } ’ 54 , Pr ry y {

w IsaDlil y CMeLILS YU t “©¢\VClada bLldiLiv) ii a sais

; ts ‘ ] f . | ‘7+ .*% > " " "

who apply for benefits or whose continuing ellgibilitv is

reviewed eacn year and the nundreds of thousands of

an Administrative Law Judge. The disability hearing

‘ + ‘ »} ‘ ** " "yy te tt, . ‘ le» le *

SVstem Nas Deen CNaracterized as “provdabdlyv tne largest

‘ sf , "0 > % } + _ % > toy " . i ‘ 1¢ " +

adjudicative agency in the western world,.”!! and it is to

the Secretary of Health and Human Services. not to the

i centadelt cual

rUSLe| |

courts, that Congress has en s stewardship on

a nationwide basis. 42 U.S.C. (& Supp. IV) 405(b). The

ling of the court of appeals is another in a line of deci-

sions that have sanctioned an unwarranted and increas-

ingly burdensome judicial intrusion into the ALJ hear-

ing process through

that Congress itself has declined to impose.

rv Paar vr er aie say ;

rhe necessary effect of these decisions will be to re-

quire the secretary to divert scarce resources to the

*} r alai + " + | . ry? hi ;

detriment of claimants in other geographic areas and in

programs that are not yet subject to judicial decrees.

[wo other courts of appeals have rejected this ap-

proach, recognizing that the courts must defer to the

Secretary in giving effect to the statutory requirement

of “reasonable notice and opportunity for a hearing.”

Moreover, in the instant case, the court of appeals has

for the first time extended the principle of judicially

fashioned processing deadlines to the reconsideration

stage, which is primarily the responsibility of the

States, not the federal government.

The court of appeals also erred in ordering the pay-

ment of interim benefits when its judicially imposed

deadlines are not met. This aspect of the decision is in-

consistent with statutory provisicns directing that

funds may be paid out of the Trust Fund only if the re-

cipient has been found eligible for benefits and with this

Court’s holding in Schweiker v. Hansen, 450 U.S. 785

(1981), that such statutory prerequisites to the dis-

bursement of public funds must be honored by the

courts. Review plainly is warranted to resolve these

important and recurring questions.

1. a. Four courts of appeals have addressed the is-

sue of the timing of ALJ disability hearings in the last

several years, with four different results. The Second

Circuit, in the instant case and in three preceding

cases, held that the hearing times involved were unrea-

sonable, imposed deadlines on the hearing process, and

ordered the payment of interim benefits when those

deadlines are not met.!* The First Circuit, in Caswell

v. Califano, supra, concurred in the appropriateness of

judicially imposed time limits (583 F.2d at 15-18), but

12 White v. Mathews, supra, 559 F.2d at 858-860; Barnett v.

Califano, supra, 580 F.2d at 31-33; Sharpe v. Harris, supra,

621 F.2d at 531. See also Martinez v. Califano, Civ. No.

73-C-900 (E.D.N.Y. Jan. 3, 1978).

did not order the payment of interim benefits. 12

The Sixth Circuit also held that the hearing delays

were statutorily unreasonable. Blankenship vy. Secre-

tary of HEW, 587 F.2d 329, 333-334 (1978). However,

the Sixth Circuit reversed the district court’s order

providing for judicially imposed deadlines, principally

for three reasons: Congress had declined to impose

fixed time limits; such an order in one State would re-

quire the shifting of resources from other States: and

“{slimplistic and unrezsonably short time limitations

imposed from the outside without a thorough under-

standing of the reasons for the problem will frustrate

welfare administration, just as it would frustrate judi-

cial administration.” Jd. at 335. Instead, the Sixth Cir-

cuit ordered the Secretary to exercise his rulemaking

authority under 42 U.S.C. 405(a) to formulate regula-

tions giving substance to the statutory requirement of

“reasonable notice and opportunity for a hearing.”!4

1S However, a district court decision ordering the payment of

interim benefits if judicially imposed time limits are not met is

currently pending before the First Circuit on the Secretary's

appeal. Crosby v. Social Security Administration, No.

81-675-T (D. Mass. Nov. 16, 1982), appeal pending, No. &3-1077,

# On remand in Blankenship, the Secretary attempted to de-

velop acceptable regulations and submitted various regulatory

proposals to the district court. In the end, however, the Secre-

tary concluded that burgeoning and unpredictable caseloads

made any commitment to fixed timc limitations in regulations

unworkable. The Secretary therefore moved for relief from the

regulations requirement in favor of 4 commitment to establish

processing goals. The district court denied the Secretary's mo-

tion, ordered him to publish regulations requiring a hearing de-

cision within 180 days of request, and required the payment of

interim benefits when the time limits are not satisfied. In a com-

panion case decided the same day, Finch v. Schweiker, No.

Civ. Nos. C 75-0185 L(A), C 76-0441 L(A) (W.D. Ky. Feb. 17,

1952), the district court imposed time limits on yet another

stage of the administrative process—decisions by the Appeals

Council. Blankenship v. Secretary of Health & Human Serv-

The Seventh Circuit, in Wright v. Califano, 587 F.2d

345, 354 (1978), on the other hand, concluded that no ju-

dicial intervention whatever in the hearing delay prob-

lem was warranted. The Seventh Circuit expressly re-

fused (ihid.) to follow White, Barnett, and Caswell, the

decisions upon which the court below relied in the in-

stant case (App. A, infra, 5a-8a).15 In the Seventh Cir-

cuit’s view, a court ordinarily is not competent to evalu-

ate the efficiency of an administrative agency and to

make the essentially legislative judgment whether the

agency is performing its work with reasonable dispatch.

587 F.2d at 352-353. The Seventh Circuit observed that

Congress had committed the timing of hearings to the

discretion of the Social Security Administration and,

unlike the court below, found it significant that Con-

gress, despite careful monitoring, had failed to pre-

scribe mandatory time limits on that process “r to di-

rect the payment of interim benefits. Jd. at 553. The

Seventh Circuit further explained that since the hear-

ing delays complained of were systemwide—<nd there

were no allegations of bad faith, dilatory attitude, or

lack of evenhandedness—whether the ageucy acted

reasonably should be judged in light of the resources

Congress supplied and the impact of the deiay. In these

circumstances, the Seventh Circuit concluded, a court

should be reluctant to intervene absent “clear congres-

sional guidelines.” In Wright itself, “given the good

faith efforts of the SSA to cope with the delay problem

under severe resource constraints and the prospect of

ices, 532 F. Supp. 739, 746-747 (W.D. Ky. 1982). The Sixth Cir-

cuit granted a stay of the orders in Blankenship and Finch

pending the Secretary's appeal. The appeal was argued on Octo-

ber &, 1982, but no decision has yet been rendered.

Blankenship v. Schweiker, Nos. 82-5130, 82-5204.

18 Wright v. Califano involved applicants for old age and sur-

vivors benefits, not disability benefits, but this distinction did

not play a role in the Seventh Circuit’s legal analysis.

future progress,” the court could not find that the time

spent in processing hearing requests was so unreason-

able as to warrant judicial intervention. 587 F.2d at

353-354,

Thus, the courts of appeals are in conflict on the pro-

priety of judicial intervention in the HHS disability

hearing process and the payment of mandatory interim

benefits. The divergence in the lower courts can only be

expected to increase in the future, in view of the pend-

ency of at least 13 more class actions challenging delays

in the administrative claims procedures, 1

b. This conflict among the lower courts has substan-

tial practical consequences. The courts of appeals that

have considered the matter uniformly have recognized

that the Secretary has made significant efforts to man-

age a caseload that has quadrupled in size over the past

decade; and no court has suggested the existence of bad

faith or dilatory motive on the part of HHS. See, e.g.,

Blankenship vy. Secretary of HEW, supra, 587 F.2d at

334; Wright v. Califano, supra, 587 F.2d at 352-354:

Caswell vy. Califano, supra, 583 F.2d at 17-18: Barnett

v. Califano, supra, 580 F.2d at 32: White v. Mathews,

supra, 559 F. 2d at 861. The district court in this case

likewise noted that the Secretary hed made “admirable

strides” in reducing the waiting pericd from what it had

16 In addition to those ci ed in notes 13 and 14, supra, other

pending cases include: Cockrum vy. Califano, 475 F. Supp. 1222

(D.D.C. 1979}, vacated and remanded, 634 F.2d 1358 (D.C. Cir.

1980), pending on remand, Civ. 78-1147 (D.D.C.); Cortez y.

Califano, Civ. No. B-79-517 (D. Conn.): Dixon v. Miller, Civ.

No. 77-C-1125 (N.D. Il.); Fuentes v. H irris, Civ., No. SA-81-

CA-398 (W.D. Tex.); Holman vy. Harris, Civ. Action No. 78-494

(M.D. Pa.); Lopez v. Harris, Civ. No 1-121 (D. Conn.);

Maloney Vv. Califano, Civ. No. 77-644 D.N.M.); Matheny Vv.

Califano, Civ. No. C-78-132 (E.D. Wash.): Quintana vy.

Califano, Civ. No. 78-397 (D.N.M.); White v Schweiker, Civ.

No. 81-4023 (E.D. N.Y.): Williams vy. Schweiker, Civ. No.

$1-1070-C (II) (E.D. Mo.).

been several years earlier (App. D, infra, 17a). But de-

spite those efforts, the nationwide median case proc-

essing time at the hearing stage is currently between

170 and 180 days (see page 5, supra). It is therefore

clear that the Secretary could not satisfy the 90-day

deadline for the holding of hearings imposed in this case

or comparable deadlines imposed in other cases if those

deadlines were extended nationwide. The only way that

such deadlines can be met in the District of Vermont or

in other districts where court-imposed deadlines are in

effect is for the Secretary to divert scarce resources

from other geographic areas and other programs that

are not yet subject to such judicial decrees. This would,

of course, work to the detriment of claimants who are

awaiting hearings in those areas and programs.!? Such

a regime undermines the agency’s obligation of even-

handed treatment, which is an important element of the

guarantee of an opportunity for a hearing within a “rea-

sonable” time. Wright v. Califano, supra, 587 F.2d at

352-353; FTC v. J. Weingarten, Inc., 336 F.2d 687,

691-692 (5th Cir. 1964); Goldman, Administrative De-

lay and Judicial Relief, 66 Mich. L. Rev. 1943, 1425

(1968).

It was precisely this prospect of uneven treatment of

claimants in different States that led the Sixth Circuit

in Blankenship to overturn the hearing deadlines im-

posed by the district court for Kentucky claimants. 587

17 We have been informed by HHS, for example, that be-

tween January 1980 and September 1981, in order to comply

with judicially imposed deadlines in the Sharpe and Martinez

decisions in New York (see note 12, supra), it was necessary for

HHS to transfer more than 5000 cases to ALJs outside of the

administrative region and more than 1400 cases to ALJs in

other States within that region. Similarly, we have been in-

formed that in order for HHS to comply with the district court’s

order in Crosby (see note 13, supra), it has been necessary to

transfer all new cases to ALJs outside of Massachusetts while

ALJs in that State reduce their backlog.

F.2d at 335. Even the Second Circuit in the instant case

and the First Circuit in Caswell expressed their con-

cern that if the Secretary's resources are inadequate, li-

tigious applicants in one State will attain an advantage

over less assertive claimants in other States (App. A,

infra, 7a; 583 F.2d at 17). But they proceeded to ignore

this concern by nevertheless imposing hearing dead-

lines of far shorter duration than the national average.

Moreover, there is no uniformity even among those

courts which have concluded that judicial intervention

is appropriate. The processing time allowed from hear-

ing request to decision varies between 120 days!® and

180 days,'® while in other cases, as in the decision be-

low, the relevant deadline is for the holding of the hear-

ing by the ALJ, not his rendering of a decision.2° These

various deadlines are subject to exceptions that in turn

vary from district to district, and the reporting and

other compliance features of the decrees also differ.

The result is to produce disparity even as among the

claimants sought to be benefited by the respective de-

crees and to introduce complex administrative burdens

for HHS in seeking to comply with them.?! The effi-

cient nationwide administration of the Titles II and

XVI disability programs cannot tolerate this increasing

balkanization.

18 White v. Mathews, supra, 55% F.2d at 855; Sharpe v.

Harris, supra, 621 F.2d at 531.

1® Blankenship v. Secretary of Health & Human Services,

supra, 532 F. Supp. at 746; Crosby v. Schweiker, note 13,

supra.

20 App. A, infra, 5a; Caswel! v. Califano, supra, 583 F.2d at

11; Barnett v. Califano, supra, 280 F.2d at 33.

21 We have been informed by HHS, for example, that dif-

fering court orders in Sharpe, Martinez, and other cases in

New York (see note 12, supra) have necessitated the establish-

ment of three different administrative systems in that State

alone to track the processing of hearing requests.

Review by this Court therefore is necessary to re-

solve the conflict among the circuits and district courts

on the legal issues presented and the appropriate con-

tours of relief, as well as to eliminate the practical dis-

parit. among different classes of claimants that has

been generated by this and other decisions.?*

2. a. The court of appeals plainly erred in concluding

that the processing time for hearing requests in

Vermont was not “reasonable” for purposes of 42

U.S.C. (Supp. IV) 405(b) and that a judicially imposed

deadline of 90 days was appropriate. When Congress

has desired a fixed deadline for the conduct of ALJ

hearings, it has expressly so provided in the Social Se-

curity Act itself. For example, Congress has specified

that determination of entitlement to SSI benefits

should be made within 90 days of the request for a

hearing. 42 U.S.C. 1383(c)(2). Prompt action on claims

for SSI benefits is of greater importance because

entitlement to such benefits, unlike those provided un-

der Title II of the Act, is based on need. 42 U.S.C.

1382(a); compare Mathews vy. Eldridge, supra, 424

U.S. at 340-341. Even in the case of SSI benefits, how-

ever, Congress excluded disability cases from the

90-day requirement, presumably because of the greater

complexity of the determination of disab.ity as com-

pared with other questions involved in SSI cases.

In its decision in White v. Mathews, supra, followed

in this case, the Second Circuit relied in imposing time

22 The Court denied the Secretary's certiorari petition in 1978

seeking review of the judgment of the Second Circuit in White

v. Mathews. 435 U.S. 908. White, however, was the first court

of appeals’ decision presenting these questions. There accord-

ingly was no conflict among the circuits at that time, and the

practical consequences might have appeared to the Court to be

uncertain. There is now a clear conflict among the circuits, and

the adverse cor - quences of the proliferation of such decisions

are manifest, especially since the nationwide caseload continues

to increase.

limitations on the language in 42 U.S.C. (Supp. IV)

405(b) that requires the Secretary to provide “reason-

able notice and opportunity for a hearing.” See 559

F.2d at 858. We agree that timing is one aspect of the

requirement that the opportunity for a hearing be “rea-

sonable,” but other considerations are relevant as well.

As early as 1975, a congressional report observed

that “although mandating by statute certain processing

time limits might seem on the surface a desirable thing

to do, such legislation might also have an adverse effect

on the quality and uniformity of disability adjudication

which is already somewhat suspect.”*% Similarly, in

1980, when Congress by statute required the Secretary

to submit a report recommending the establishment of

time limitations, the statute itself directed the Secre-

tary to take into account “both the need for expeditious

processing of claims for benefits and the need to assure

that all such claims will be thoroughly considered and

accurately determined.” Pub. L. No. 96-265, Section

308, 94 Stat. 458. See also Little v. Streater, 452 U.S.

1, 13-14 (1981); Lassiter v. Department of Social Serv-

ices, 452 U.S. 18, 27-28 (1981). The important interest

in assuring uniform, thorough, and accurate decisions

would not be served if fixed deadlines do not allow a

sufficient time for a reasoned adjudication of individua!

cases or the caseload generally. The court of appeals

failed to explore these countervailing considerations

that Congress itself declared to be relevant in this very

context.

Moreover, even on the question of timing, the indi-

vidual ‘laimant’s interest is only one of the relevant fac-

tors, just as it is under the three-part due process test

of Mathews v. Eldridge, supra, 424 U.S. at 335. It is

23 See Report of the Staff of the House Subcomm. on Social

Security of the House Comm. on Ways and Means, 94t': Cong.,

Ist Sess., Appeals Process: Areas of Possible Administrative

or Legislative Actions, 1-2 (Comm. Print 1975).

necessary as well under Mathews vy. Eldridge to con-

sider “the Government's interest, including the function

involved and the fiscal and administrative burdens that

the additional or substitute procedural requirement

would entail” (//id.). So here, the court of appeals was

required to consider the resource limitations and

administrative burdens confronting HHS in determin-

ing the reasonableness of the timing of the reconsidera-

tion and hearing process and the appropriateness of

court-ordered deadlines. Note, Judicial Resolution of

Systemic Delays in Social Secu rity Hearings, 79

Colum. L. Rev. 959, 977 (1979). Cf. Open America v.

Watergate Special Prosecution Force, 547 F.2d 605,

614-616 & n.17 (D.C. Cir. 1976). The court below erred

in myopically considering only respondents’ individual

concerns.

b. The numerous and competing factors that must be

taken into account in effectuating the statutory require-

ment of a “reasonable * * * opportunity for a hearing”

under programs as vast as Titles II and XVI of the So-

cial Security Act underscore that the problem inherent-

ly is one for administrative or legislative—not judi-

cial—resolution. Indeed, at various times, both

Congress and the Secretary have adopted measures to

improve the adjudication process. In 1976, for example,

Congress addressed the backlog problem by permitting

the use of non-ALJ hearing officers to consider disabili-

ty cases, Pub. L. No. 94-202, Section 3, 89 Stat. 1135.

In 1978, the Secretary, in order to ensure uniform and

efficient determinations of disability, adopted the

medical-vocational guidelines at issue in Schweiker vy.

Campbell, No, 81-1983.

Similarly, in 1982, Congress afforded the Secretary

flexibility in selecting cases for periodic review in order

to enable him to accommodate the backlog of new appli-

cations and state staffing ‘evels. Pub. L. No. 97-455,

Section 3, 96 Stat. 2499. Congress also provided for

face-to-face hearings by state agencies at the reconsid-

eration stage and the payment of interim benefits

through the ALJ stage in disability benefit termination

cases, in recognition of the backlog in the ALJ hearing

process and the special equities involved when a person

is currently receiving and perhaps dependent upon his

benefits. Pub. L. No. 97-455. Sections 2 and 4, 96 Stat.

2498, 2499. See 128 Cong. Rec. 815963 (daily ed. Dec.

21, 1982) (remarks of Sen. Armstrong); id. at S15964

(remarks of Sens. Dow and Levin); id. at 15965 (re-

marks of Sen. Cohen). Thus, Congress was aware of

the impact of delays in the ALJ hearing process and

adopted what it determined to be appropriate reme-

dies. It did not, however, choose to impose deadlines on

the ALJ hearing process or provide for any additional

procedures or the payment of interim benefits in the

case of new applicants, as the decision of the court of

appeals would do,

“(T)his Court has been willing to assume a congres-

sional solicitude for fair procedure” (Califano v. Yama-

saki, 442 U.S. 682, 693 (1979)). It also has admonished

that “substantial weight must be given to the good-faith

judgments of the individuals charged by Congress with

the administration of social welfare programs that the

procedures they have provided assure fair considera-

tion of the entitlement clairns of individuals” (Mathews

v. Eldridge, supra, 424 U.S, at 349). As noted above,

no court has suggested that the delays experienced in

determining disability claims are the product of bad

faith or dilatory motive on the part of HHS. See page

15, supra. Accordingly, and in view of the continuing

oversight of the process by Congress and the Secre-

tury, there was no basis for the courts below to “en-

graft(}] their own notions of proper procedures upon

agencies entrusted with substantive functions by Con-

gress.” Vermont Yankee Nuclear Power Corp. v. Na-

tural Resources Defense Council, Inc., 435 U.S. 519,

525 (1978).

ments are barred. Lehman v. Nakshian, 453 U.S. 156,

162-163 (1981).

Just two terms igo, in a Social Security case, this

Court reiterated “‘the duty of all courts to observe the

conditions defined by Congress for charging the public

treasury.’” Schweiker v. Hansen, supra, 450 U.S. at

788, quoting Federal Crop Insurance Co. v. Merrill,

332 U.S. 380 (1947). The court of appeals in the instant

case refused to heed this duty. It sought to avoid the

force of Hansen by characterizing the interim benefit

requirement as flowing from the “district court’s inher-

ent powers to fashion a remedy” (App. A, infra, 8a).

But the courts of the United States have no “inherent

power” to order the payment of money from the federal

Treasury whenever they find a violation of a statute.

United States v. Testan, supra, 424 U.S. at 401, 403,

Moreover, the remedy a court may fashion for a viola-

tion of 42 U.S.C. (Supp. IV) 405(b) surely is limited by

the conditions on the payment of money from the Trust

Fund contained in Subsection (i) of that same statutory

provision. Compliance with those conditions is not ex-

cused by mere delay in processing a claim. Cf. INS v.

Miranda, No. 82-29 (Nov. 8, 1982). The decision of the

court of appeals directing the payraent of interim bene-

fits therefore should not be permitted to stand.

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 1195 August Term 198]

Argued June 9, 192 Decided June 28. 1982

Docket No. &2-6009

Filed June 28, 1982

LEON 8S. DAY, ET AL., PLAINTIF F-APPELLEE,

RICHARD S. SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES, DEFENDANT-APPELLANT,

Before: FEINBERG, Chief Judge CARDAMONE,

Circuit Judge and SAND, District Judge. *

PER CURIAM:

The Secretary of Health and Human Services appeals

from various orders of the United States District Court

for the District of Vermont, James S. Holden, Ch. J..

granting summary judgment in favor of a class of claim-

ants’ seeking disability benefits under Title II of the

Social Security Act (the Act), 42 U.S.C. § 401 et seq.

*United States District Judge for the Southern District of

New York, sitt ng by designation.

' The class was certified on June 14, 1979 as:

All present and future Vermont residents seeking to se-

cure social security disability benefits who, following an

initial determination by the defendants that no disability

exists, experience an unreasonable delay in a scheduling of

and/or issuance of decisions in reconsiderations and their

hearings.

We find that most of the arguments raised in this ap-

peal are almost indistinguishable from those decided by

us in earlier cases, see Sharpe v. Harris, 621 F.2d 530

(2d Cir. 1980); Barnett v. Califano, 580 F.2d 28 (2d

Cir. 1978); White v. Mathews, 559 F.2d 852 (2d Cir.

1977), cert. denied, 435 U.S. 908 (1978), and that, in

any event, our prior decisions are controlling. Accord-

ingly, we affirm the judgment of the district court.

The procedure for challenging an initial determina-

tion that a Vermont claimant is ineligible for Title II

disability benefits is set out in the Act and regulations

adopted thereunder, and is explained in greater detail

in the district court’s opinions dated December 28, 1979

and August 19, 1981. The claimant’s first step is to re-

quest reconsideration of his claim at the District Office

(DO) of the Social Security Administration (SSA). That

office locates the claimant’s folder (which, the district

court found, is not always easy) and forwards it to the

appropriate Disability Determination Agency (DDA).

The claim is then subjected to de novo review, which

often entails updating the file with new evidence gath-

ered at the clainiant’s initiative or pursuant to a request

of the DDA. When the DDA completes its reconsidera-

tion, the claim follows one of several routes. A case

involving a “new” claimant one who had not been pre-

viously receiving benefits) is rerouted to the DO and a

reconsideration notice is sent to the claimant by the

DDA either by computer or manually. The DDA may,

however, delay sending notice while it undertakes a

“quality assurance review” of its own, or sends the case

to the Office of Disability Operations (ODO) in Balti-

more, Maryland for a quality contro] review. A case

involving cessation of payments to an “old” claimant

(one who was previously receiving benefits) is always

sent to ODO for a final review before notice of denial is

sent to the claimant. In either case, once a claimant re-

ceives notice of an adverse determination or reconsider-

ation, he is entitled to a fair hearing before an adminis-

trative law judge. The claimant is not, however, enti-

tled to resort to federal court to reverse a denial of ben-

efits until he has run the full gauntlet of administrative

review.

In the district court, appellees claimed that two kinds

of delay violated their constitutional rights under the

due process clause of the fifth amendment and their

statutory rights under the Administrative Procedure

Act, 5 U.S.C. § 555(b)? and the Social Security Act, 42

U.S.C. § 405(b).* First, they maintained that SSA took

an unreasonable amount of time to dispose of a claim

once a claimant had made a request for reconsidera-

tion.* Second, they claimed that the time between a re-

2 Section 555(b) provides in pertinent part that:

With due regard for the convenience and necessity of the

parties or their representatives and within a reasonable

time, each agency shal! proceed to include al] matters pre-

sented to it.

3 Section 408/b) provides in pertinent part that:

Upon request by any such individual or upon request by a

wife, divorced wife, widow, surviving divorced wife, sur-

viving divorced mother, husband, widower, child, or par-

ent who makes a showing in writing that his or her rights

may be prejudiced by any decision the Secretary has rend-

ered, he shall give such applicant and such other individual

reasonable notice and opportunity for a hearing with re-

spect to suci, decision, and, if a hearing is held, shall, on

the basis of ev.dence adduced at the hearing, affirm, modi-

fy, or reverse nis findings of fact and such decision.

In White, we interpreted “reasonable notice and opportunity

for a hearing” as a right to a hearing within a reasonable time,

559 F.2d at 858, and the Secretary does not challenge this

interpretation.

4 In named-plaintiff Day’s case, the district court found that

this delay amounted to 167 days; in plaintiff Maurais’s case, it

was found to be 215 days. Furthermore, the district court found

these delays to be within the normal range of delays experi-

enced by Vermont SSA claimants.

quest for a hearing and the date of hearing was unrea-

sonably lengthy.® In his December 1979 opinion, Chief

Judge Holden granted summary judgment in favor of

appellees on the latter issue, finding that the unreason-

able delay in scheduling hearings contravened the So-

cial Security Act. In his August 1981 opinion, after con-

siderable additional briefing, the judge came to the

same conclusion on the reconsideration issue. He evalu-

ated the delay there by the same standard used on the

hearing issue because he reasoned that since “(t]he time

necessary to complete a reconsideration is included in

the time that the claimant must wait before he is af-

forded a hearing... [ujnreasonable delays in the recon-

sideration procedures trench on the statutory duty to

provide a hearing within a reasonable time.”

Relying on our decisions in Barnett and White, Judge

Holden next turned to fashioning relief for appellees’

class. In a judgment entered in November 1981, the

district court ordered that with certain significant ex-

ceptions,® reconsideration processing must be com-

pleted within 90 days of a request for reconsideration,

> The district court found that in this regard Day experienced

a 173-day delay and Maurais, a 65-day delay. Neither delay was

found by the district court to be out of the normal range.

® The district court excepted delays resulting from the follow-

ing circumstances:

The claimant offers new medical evidence or reports

new medical treatment since his initial determination;

b) the claimant agrees to undergo a consultative examina-

tion when one is suggested by the defendant;

failing to provide information needed for reconsider-

ation;

(d) The claimant or his representative requests a delay; or

e) The delay is in some other way attributable to the ag-

grieved claimant or his representative.

and that with similar exceptions,’ a hearing must be

scheduled within 90 days of a request for hearing.

Judge Holden then went on to order that interim disa-

bi ity payments be made, subject to the exceptions de-

scribed above and to recoupment if the claimant is later

found to be ineligible for disability payments, whenever

no reconsideration determination is issued within 180

days of the request for reconsideration, whenever no

hearing is held within 180 days of a prior request for re-

consideration that is followed by a hearing request and

whenever no hearing is held within 90 days of a request

for a hearing.

On appeal, the Secretary raises several arguments

that are similar to those made in our earlier cases.

First, he claims that the case is nonjusticiable because

Congress has entrusted the administration of the act to

the Department of Health and Human Services. It is

true that this argument, strengthened somewhat by the

Seventh Circuit’s reading of the decision in Vermont

Yankee Nucle r Power Corp. v. Natural Resources

Defense Council, Inc., 435 U.S. 519 (1978), won the

day for the Secretary in Wright v. Califano, 587 F.2d

345, 352-54 & 356 (7th Cir. 1978). But see Smith v.

Miller, 665 F.2d 172 (7th Cir. 1981). A similar claim

also gained him a partial victory in Blankenship v. Sec-

retary of HEW, 587 F.2d 329, 335 ‘6th Cir. 1978). We,

7 The district court excepted delays resulting from the follow-

ing circumstances:

(a) The claimant or his representative causes a delay by

failing to provide information needed for adjudication;

(b) The claimant or his representative requests a delay;

the scheduled hearing;

(d) The delay is in some other way attributable to the

claimant or his representative.

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fore an administrative law judge were not actually

entitled to benefits. But such hearings have led to

reversals in more than half the cases heard. (Cita-

tion omitted.)

559 F.2d at 858. We also share the First Circuit's con-

cern that “if the Secretary's resources truly are inade-

quate to the task, the more litigious of the applicants

may gain an advantage over the less assertive.”

Caswell, 583 F.2d at 17. But we also agree with the

First Circuit's conclusion:

However, the vindication of almost every legal

right has an impact on the allocation of scarce re-

sources. And the courts, while mindful of the im-

pact of remedies upon persons not before them, can

hardly permit the legal rights of litigants to turn

upon the alleged inability of the defendant fully to

meet his obligations to others.

Id.

The Secretary’s claim based on alleged congressional

oversight is equally unpersuasive. While it is true that

in the last five years Congress has involved itself heavi-

ly in the administration of this Act, it was also carefully

examining the situation at the time of White and

Barnett, see 559 F.2d at 859; 580 F.2d at 31. Moreover,

evidence that Congress has refused to impose its own

deadlines cuts both ways. Inactivity in the face of deci-

sions imposing deadlines can also imply that Congress

is satisfied that unjustifiable delay is being handled ef-

fectively by the courts. In any case, we feel that so long

as Congress has not enacted clarifying legislation or re-

moved the term “reasonable” from the statute, our

duty is to vindicate plaintiffs’ interest as we see it.

The Secretary’s final points are new. First, he claims

that the court below erred in extending the doctrine of

White and Barnett to delays in reconsideration because

this level of administrative review is entirely a creature

of the Secretary’s discretion, and was adopted in re-

sponse to Congress’ concern for accurate determina-

tions of entitlement to disability insurance. We disa-

gree, Judge Holden was correct in finding that the only

meaningful way to encourage prompt adjudication is to

adopt a single remedial scheme incorporating all stages

of review. Furthermore, the relief ordered was crafted

with an eve towards the Secretary’s concerns. Thus,

the judge excepted from his order delay caused by the

need to garner the fresh information required to assure

accurate results.

Finally, the Secretary claims that imposition of inter-

im payments is impermissible under 42 U.S.C. 3 405(i),

which limits payments to those who have been certified

by the Secretary “[u}pon final decision of the Secretary

or upon final judgment of any court of competent juris-

diction, that [the] person is entitled to any payment or

payments....” This contention has been rejected be-

fore, see White, 559 F.2d at 861 (finding that § 405(i) is

directed at “the ordinary situation in which payments

become due after favorable administrative adjudication,

or judicial review,” and does not “exclude[e] the possi-

bility of interim payments ordered by a court exercising

its remedial power”); Barnett, 580 F.2d at 33. Nonethe-

less, the Secretary now claims that the recent decision

in Schweiker v. Hansen, 450 U.S. 785 (1981), gives his

contention new force. We believe, however, that

Hansen is distinguishable. In that case, social security

claimant Hansen argued that the Secretary should be

estopped from denying her benefits, for which she did

not apply, because her failure to file a written applica-

tion was due to misinformation given her by his repre-

sentative. Our case involves neither estoppel nor a defi-

ciency on the part of the claimant. All the claimants

who have been accorded relief by the order below have,

by definition, complied with the procedural require-

ments of the Act. Moreover, the interim payments at

issue here flow fro: the district court’s inherent pow-

ers to fashion a remedy, see Caswell, 583 F.2d at 17,

and cases there cited, and not from an estoppel that

prevents the government from raising a defense.

We have carefully reviewed al] the arguments raised

by the Secretary and find them without merit.* For the

reasons stated above, we adhere to our belief that our

prior decisions were correctly decided, and we there-

fore affirm the judgment of the district court.

* Because we affirm on the ground that the delay violated ap-

pellees’ statutory rights under 42 U.S.C. § 405(b), note 3 supra,

we do not reach their contentions under the due process clause

or the Administrative Procedure Act.

l0a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No, 82-6009

Filed June 28, 1982

LEON S. DAY. ET AL., PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES, DEFENDANT-APPELLANT.

At a stated Term of the United States Court of Ap-

peals for the Second Circuit, held at the United States

Courthouse in the City of New York, on the twenty-

eighth day of June one thousand nine hundred and

eighty-two.

Present: HON. WILFRED FEINBERG, Ch.J.,

HON. RICHARD J. CARDAMONE, C.J., HON.

LEONARD SAND, D.J.

Appeal from the United States District Court

for the District of Vermont.

This cause came on to be heard on the transcript of

record from the United States District Court for the

District of Vermont, and was argued by counsel.

ON CONSIDERATION WHEREOF, it is now here-

by ordered, adjudged, and decreed that the judgment

of the said District Court be and it hereby is affirmed in

accordance with the opinion of this court with costs to

be taxed against the appellant.

A. DANIEL FUSARO,

Clerk

By ARTHUR HELLER

ARTHUR HELLER

Deputy Clerk

lla

APPENDIX C

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

No. 82-6009

Filed Sep. 17, 1982

LEON S. DAY, ET AL., PLAINTIFF-APPELLEE,

RICHARD S. SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES, DEFENDANT-APPELLANT.

At a stated term of the United States Court of Ap-

peals, in and for the Second Circuit, at the United

States Courthouse, in the City of New York, on the

seventeenth day of September, one thousand nine hun-

dred and eighty-two.

A petition for rehearing containing a suggestion that

the action be reheard in bane having been filed herein

by counsel for the appellant, Richard S. Schweiker,

Secretary of Health and Human Services,

Upon consideration by the panel that heard the ap-

peal, it is

ORDERED that said petition for rehearing is

DENIED.

It is further noted that the suggestion for rehearing

in bane has been transmitted to the judges of the court

in regular active service and to any other judge on the

panel that heard the appeal and that no such judge has

requested that a vote be taken thereon.

A. DANIEL FUSARO,

Clerk

By FRANCIS X. GINDHART_

FRANCIS X, GINDHART

Chief Deputy Clerk

l3a

hearing within a “reasonable time” and their constitu-

tional right to due process.

Before examining the facts of this case, it is appropri-

ate to outline the administrative procedure made avail-

able by the Social Security Administration (SSA) to a

claimant for obtaining review of a decision denying

benefits.

Once the SSA has made an initial determination that

a claimant is not entitled to Title II disability benefits

or that a recipient of such benefits is no longer entitled

to them because his disability has terminated, the

claimant may request reconsideration with the local So-

cial Security District Office. The District Office then

forwards the claimant's file to Vermont Disability De-

termination Services (DDS) where medical evidence is

reviewed and a decision reached. Notice of the decision

is sent to the claimant from DDs. Until October 1978,

10% of all initial denials and all of the cessation denials

were forwarded to the Bureau of Disability Insurance

(BDI) in Baltimore, Maryland, for review and eventual

notification to the claimants. Since October 1978, BDI

no longer reviews cessation denials. However, the files

continue to be forwarded to BDI to enable that office to

prepare and transmit notification to the claimants.

If a claimant receives an adverse reconsideration de-

cision, he is then entitled to a fair hearing before an

administrative law judge (ALJ). After the District Of-

fice receives this request, it is forwarded to the Hear-

ing Office in Manchester, New Hampshire. The claim is

then assigned to an ALJ. Following pre-hearing prepa-

ration, the case is scheduled for a hearing and the

claimant is so notified.

It appears in the record in this case that in December

1977 the SSA determined that plaintiff Day was no

longer disabled and, thus, no longer eligible for disabili-

ty benefits. Although plaintiff Day requested a recon-

sideration of this determination on December 21, 1977,

l4a

he did not receive a determination until June 6, 1978,

167 days later. Since the determination was adverse,

plaintiff made a request on June 14 for a hearing. A

hearing had not yet been scheduled in November when

Day filed this action for injunctive and declaratory re-

lief. Subsequently, a hearing was held on December 4,

1978, 173 days after it was initially requested. The ALJ

issued a decision on January 17, 1979 reaffirming the

cessation of benefits.

Plaintiff Amedie Maurais intervened in this action on

December 1, 1978, after almost six months had passed

without any decision regarding his request for reconsid-

eration. in April 1978, he was notified by the SSA that

his disability had ceased in November of the previous

year and that since that time he had been overpaid

more than $2,000 in benefits. On June 2, 1978 he re-

quested reconsideration and waiver of recoupment. Af-

ter Mr. Maurais filed his motion to intervene, an ad-

verse reconsideration decision was issued on January 4,

1979, 215 days after it was requested. On January 23,

claimant wrote to the SSA requesting a hearing which

was held 65 duys later on March 29, 1979. As a result of

that hearing, plaintiff Maurais’ benefits were

reinstated.

The defendant Secretary submitted evidence con-

cerning the delays experienced by other Vermonters

seeking relief from denials or cessation of disability

benefits by the SSA. The evidence submitted by the

government is not disputed by the plaintiffs and shows

a widely varying range of delays. Of the cases proc-

essed by DDS during the four month period.of Septem-

ber through December 1978, the delays in reconsidera-

tion ranged from one to 340 days. During the period

January to November 1978, the DDS mean processing

time per case was 30.5 days, with the mean ranging be-

tween 16.7 to 51.7 days per case. Claimants whose

ld5a

cases are forwarded to BDI in Baltimore for additional

processing incur additional unspecified delays.

Statistics concerning delays between request for

hearing and hearing indicate that 57% of the hearings

requested after January 1978 were scheduled within 90

days, with a range of delays varying between two and

nine months.

Il. LAW

Plaintiffs contend that the delays they have experi-

enced in obtaining reconsideration decisions, fair hear-

ings and hearing decisions are so lengthy as to be “un-

reasonable” and contrary to provisions of the Social

Security Act and the Administrative Procedure Act.

They maintain the excessive delays violate their rights

to due process of law guaranteed hy the Fifth Amend-

ment. We consider first the legality of the delays expe-

rienced in obtaining a hearing after it is requested.

Since it appears that the defendant’s present policies

are in violation of the ‘social Security Act, it is not nec-

essary to reach the other statutory and constitutional

claims.

The Social Security Act provides in pertinent part:

The Secretary is directed to make findings of fact,

and decisions as to the rights of any individual ap-

plying for a payment under this subchapter. Upon

request by any such individual ... (the Secretary)

shall give such applicant ... reasonable notice and

opportunity for a hearing with respect to such

decision.

42 U.S.C. § 405(b) (emphasis supplied).

In support of their position, plaintiffs rely upon the

decision by this court in Barnett v. Califano, Civ. No.

74-210 (D. Vt. 1977) (Coffrin, J.), aff'd 580 F.2d 28 (2d

Cir. 1978) and White v. Mathews, 434 F.Supp. 1252 (D.

Conn. 1976), aff'd 559 F.2d 852 (2d Cir. 1977). Because

the factual and legal issues in these cases were substan-

tially the same as those presented in the case at bar, we

l6a

find them controlling. Accordingly, the court declines to

follow the contrary approach taken in Wright v. Cali-

fano, 587 F.2d 345 (7th Cir. 1978).

In White v. Mathews the district court was pre-

sented with a class action similar to the one composed

here. After examining the delays experienced by Title

II claimants in Connecticut, the court found that the

named pla‘ntiff waited 274 days before his requested

fair hearing was held. The average delay between re-

quest for a hearing and rendering of a hearing decision

was 211.8 days. The court held such excessive delays

are not reasonable within the meaning of § 405(b). The

court ordered the Secretary to reduce the maximum de-

lay between the filing of a petition for a hearing and the

issuance of a hearing decision to 180 days within nine

months of the court’s order, to 150 days within 15

months of the order, and finally to a maximum delay of

120 days within 21 months of the order.

In Barnett, this court was presented with the issue

of similar delays incurred by Vermont claimants of Title

XVI (SSI) benefits. The named plaintiffs in that action

experienced delays ranging from three to 13 months be-

fore requested hearings were held. The average delay

experienced by the class plaintiffs (Vermont SSI claim-

ants) ranged from one to 11 months. Relying upon

White, the court held that these delays were unreason-

able and ordered the Secretary to reduce the maximum

delay between request for a hearing and the scheduling

and holding of such hearing to 120 days within four

months of the order and to 90 days within ten months of

the order. The court imposed a maximum period of de-

lay between request and holding of a hearing rather

than, as the White court did, between request for a

hearing and rendering of a hearing decision. Judge

Coffrin was persuaded that such relief would afford the

Secretary flexibility and at the same time protect SSI

claimants’ statutory rights.

17a

The Secretary argues that the delays experienced

here are not unreasonable because avi rage or mean de-

lays are within or close to the 90 day request-to-hearing

maximum imposed in Barnett and the 120 day request-

to-decision time imposed in White. The Secretary’s

discussion of averages and means does not meet the is-

sue. The periods imposed in White and Barnett are pe-

riods of maximum, not average, delay which the Secre-

tary may impose upon a claimant without violating his

statutory right to a hearing within a reasonable time.

While statistics afford only a limited picture of an agen-

cy’s performance, the data presented by the govern-

ment here reveals that in 1978 nearly half (43%) of the

Vermonters who requested hearings in their claims for

disability benefits wuited more than 90 days for such

hearings to be scheduled. This record shows that a sub-

stantial number of people have been denied their statu-

tory right to a hearing within a reasonable time despite

this court’s order in Barnett that all such delays in SSI

cases should be reduced to 90 days as of January 1,

1978. As Judge Feinberg noted in his opinion affirming

that order, claimants under both Social Security pro-

grams (SSI and Disability Insurance) are entitled to a

hearing within a reasonable time. Barnett v. Califano,

589 F.2d at 31-32 (2d Cir. 1978).

The Secretary presents several arguments against

imposition of time limits such as those prescribed in

White, Barnett, and Caswell v. Califano, 583 F.2d 9

(1st Cir. 1978). The arguments were considered and re-

jected in those cases. They include the claim that the

SSA has made a good faith effort to meet the needs of

claimants for disability benefits while protecting the fis-

cal*integrity of its program with the limited resources

available. While the SSA has made admirable strides in

reducing the average length of delay experienced by

claimants a few years ago, we concur with Judge

Clarie’s statement in White that the SSA is not war-

ranted in forcing claimants to endure such lengthy de-

lays without benefits, while it puts its administrative

appeals process in order.

When the government does not act with reasonable

promptness, those claiming total disability are re-

quired to bear an unreasonable delay and suffer

unwarranted deprivation of that which is lawfully

theirs.

White v. Mathews, 434 F.Supp. 1252 at 1261 (D.Conn.

1976). This observation is particularly true of the plain-

tiff Maurais, whose benefits were eventually reinstated

after the administrative hearing.

[The Secretary next contends npecause Congress

has chosen not to impose deadlines, but to leave the

scheduling of hearings within the discretion of the So-

cial Security Administrator, this court should also re-

frain from imposing deadlines.

The Second Circuit noted in White, and again in

Barnett, that the legislative history indicates that Con-

gress’ refusal to impose time limits was based on an ex-

pectation, fostered by testimony of the Administrator,

that a 90 day deadline would be met by the SSA in

1977. White v. Mathews, 559 F.2d $52 at 859-860

(1977); Barnett v. Qalifano, 580 F.2d 28 at 31 (1978).

Judicially imposed time limits will not contravene Con-

gressional expectations.

More importantly, the lack of an express time limit

cannot alter the statutory requirement that an ap-

plicant be afforded a reasonable opportunity for a

hearing. The lack of a maximum time limit does not

mean that any delay is reasonable.

3arnett v. Califano, Civ. Action No. 74-270, Slip op. at

p. 7 (D.Vt.).

Finally, the Secretary states that she has proposed

new regulations which would provide the relief re-

quested by plaintiffs, i.e., imposition of a 90 day limit

on the delay between request for a hearing and its

2la

APPENDIX E

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF VERMONT

Civil Action

File No. 78-266

Filed August 19, 1981

LEON S. DAY AND AMEDIE MAURAIS, ON BEHALF OF

THEMSELVES AND ALL OTHERS SIMILARLY SITUATED

LICHARD SCHWEIKER, SECRETARY OF HEALTH AND

HUMAN SERVICES

MEMORANDUM OF DECISION

In this certified class action the plaintiffs challenge

the procedures used by the Social Security Administra-

tion (SSA) to reconsider and schedule hearings for indi-

viduals who seek, but have been initially denied, Social

Security disability benefits under Title II of the Social

Security Act, 42 U.S.C. § 401 et seg. (the Act). The

plaintiffs seek declaratory and injunctive relief from

two types of delay encountered by claimants: the delay

between the time a claimant requests reconsideration of

his initial denial or cessation of benefits and the comple-

tion of the SSA’s reconsideration of that finding; and

the delay between the time a claimant requests an

administrative hearing to review a denial of benefits

and the time the hearing is scheduled.

The certified class consists of

all present and future Vermont residents seeking

to secure Social Security Disability benefits who,

following an initial determination by the defendant

tnat no disability exists, experienced an unreasona-

ble delay in the scheduling of and/or issuance of de-

cisions in reconsiderations and fair hearings.

22a

In an opinion and order dated December 28, 1979, the

court granted partial summary judgment to the pluin-

tiffs, holding that the delays in scheduling the adminis-

trative hearings violated the Act's statutory directive

to hold hearings within a reasonable time. Applying the

rule of Barnett v. Califano, 580 F.2d 28 (2d Cir. 1978),

the court required the Secretary to hoid the administra-

tive hearings within 90 days from the time they are re-

quested, unless certain exceptions apply. The court

denied the plaintiffs’ motion for summary judgment on

the issue of delay in the reconsideration process be-

cause the factual data in the record were not sufficient

to support a summary jucgment. On two subsequent

occasions the court has similarly denied summary judg-

ment on the reconsideration issue because of

unresolved issues of fact.

In January, 1981, in response to discovery requests,

the defendant produced factual summaries of 77 ran-

domly selected disability reconsideration cases. Relying

on their respective analyses of these summaries and all

the other factual data in the record, the parties have

again filed cross motions for summary judgment on the

issue of reconsideration delays. The plaintiffs argue

that reconsideration delays are unreasonable and re-

quest the court to direct the Secretary to complete the

reconsideration process within 30 days, except in cer-

tain circumstances. The defendants maintain that the

length of time to process requests for reconsideration is

reasonable. Although the parties offer conflicting inter-

pretations of the available facts, the facts themselves

are not in dispute.

FACTUAL BACKGROUND

After the SSA has initially determined that a claim-

ant is not entitled to Title II disability benefits the

claimant may initiate an appeal of that denial omy by

requesting reconsideration of his claim at the SSA Dis-

trict Office (DO). See 20 C.F.R. § § 404.907-.910,

23a

404.917 (1980). The DO locates the claimant's claim

folder’ and forwards it to the Vermont Disability De-

termination Agency (DDA). The DDA performs a de

novo review of the evidence in the file. See id.

§ 404.914, Often, claimants seeking reconsideration al-

lege changed medical circumstances or a worsening of

condition. This review may thus include gathering new

information pertaining to the claim and updating ex-

isting evidence. In some cases the DDA decides on its

own to seek new evidence as well. The DDA may, at

the reconsideration stage, order a consultative exami-

nation to aid in its determination.? Jd. § 404.1527. In

addition, if the DDA cannot make a disability determi-

nation on the basis of medical evidence alone, it may

perform a vocational assessment in which a determina-

tion is made whether the claimant is capable of gainful

work. See id. § § 404.1502-.1513.

When the DDA has completed its reconsideration, a

claimant's case may follow one of several routes. If it is

an “initial denial case,” meaning one in which the claim-

ant has not been receiving Title II disability payments

for his claimed disability, the case folder is rerouted to

the DO and a “reconsideration notice” is sent to the

claimant from DDA. In several circumstances, how-

ever, generation of a reconsideration notice may be de-

layed. If the case involves “systems limitations” or

“special handling,”® the reconsideration notice must be

* The claims folder may not necessarily be kept at the DO.

Apparently some claims folders are kept at the SSA Office of

Disability Operations in Baltimore, Maryland.

2 A consultative examination is a physical or mental examina-

tion of the claimant undertaken at the expense of the SSA by a

physician or other professional designated by the SSA. 20

C.F.R. § 404.1527 (1980).

* “Systems limitations,” according to the Secretary, means

that computers are not programmed to take required actions,

cannot produce required information, or that the case is too

24a

manually prepared and a delay may occur. Alsc, the

DDA may undertake a “quality assurance review’ of its

own decision, thus delaying notification of the claimant.

In addition, ten percent of all initial denial reconsidera-

tions, after completion by DDA, are automatically for-

warded to the Office of Disability Operations (ODO) in

Baltimore, Maryland,‘ for a quality control review of

the DDA determination, but the parties disagree over

whether notices are sent before or after this ODO re-

view is performed.

“Continuing disability investigation cases” in which

the SSA has decided to stop paying disability benefits

(also called “cessation cases”), are all sent to ODO for

review prior to final reconsideration decision. The no-

tice is sent from ODO instead of DDA.

Apart from the rather involved standard procedures,

several other factors appear to contribute to the length

of time to complete reconsideration: delays in re-

questing and receiving information, agency mishan-

dling, new procedures, problems locating or

communicating with claimants, interagency transmis-

sions and other unaccounted for delays. It is clear that

the length and nature of these delays depend somewhat

upon the circumstances of each case. In any event, the

procedural routes a claim must travel in the reconsider-

ation process are uncertain and often devious.

In lieu of answers to a third set of interrogatories,

the defendant submitted 77 case summaries randomly

selected from a total of 453 reconsiderations performed

complex for computer processing. Defendant's Answers to

Third Interrogatories, Sept. 5, 1980, at 7. “Special handling”

means, in the Secretary's words, “human intervention” or “spe-

cial procedures to expedite the claims material.” /d.

4The ODO was formerly called the Bureau of Disability In-

surance, or “BDI”

between October 1, 1977 and January 31, 1980.5 In the

sample, total processing times ranged from 17 days to

251 days. The mean processing time was 68 days.

About 35 percent of the claims, however, took more

than 90 days to process. In ail of the cases that took

more than 90 days, as well as a significant number with

lesser processing time, there are lengthy unexplained

delays in the reconsideration process. The question is

whether such delays are unreasonable under the cir-

cumstances. The plaintiffs interpret the summaries to

show that unexceptional cases can be processed in 30

days or less, that delays beyond 30 days are almost

never attributable to the claimant, and that delays be-

yond 90 days are generally due to DDA inaction or sys-

tems limitations and failures. The Secretary interprets

the summaries to demonstrate that most delays result

from the inherently time consuming nature of the re-

consideration process. The summaries support the posi-

tions of both parties. They show the reconsideration

process is often time consuming and complex. They also

show that the process is replete with unexplained de-

lay; other requests are processed with commendable

dispatch.

DISCUSSION

This is the fourth time that the parties have ad-

dressed the reconsideration issue in summary judgment

motions. Each previous time the court has found that

the facts concerning the process were not sufficient.

The submission of the 77 case summaries, however,

satisfies the court that there are now no genuine issues

of material fact in this dispute. The defendant, although

he relies on the case summaries to support his own

motion for summary judgment, asserts that they are

* Defendant’s Answers to Third Interrogatories, March 30,

1981. The summaries are numbered consecutively from 1 to 77.

References to specific summaries are by summary number.

26a

not definitive or conclusive proof of delay. The court,

however, finds that these summaries provide sufficient

factual insight into the reconsideration process to rule

on whether the de ays are unreasonable.®

The plaintiffs contend that the delays they have ex-

perienced in obtaining reconsideration decisions are so

lengthy that they are unreasonable and therefore con-

trary to provisions of the Social Security Act and the

Administrative Procedure Act. They further argue that

these delays deny them due process of law in violation

of the Fifth Amendment. Because the court finds that

unexplained delays that are not attributable to the

claimant contravene the relevant provisions of the So-

cial Security Act, it is unnecessary to rule on the other

statutory provisions or the constitutional claim.

Section 205(b) of the Social Security Act, 42 U.S.C.

§ 405(b), provides in pertinent part:

The Secretary is directed to make findings of fact,

and decisions as to the rights of any individual ap-

plying for a payment under this subchapter. Upon

request by any such individual ... [the Secretary]

shall give such applicant ... reasonable notice and

opportunity for a hearing with respect to such

decision

This provision gives a claimant a right to a hearing

within a reasonable time. White v. Mathews, 559 F.2d

852, 858 (2d Cir. 1977), cert. denied, 435 U.S. 908

(1978). Relying upon the controlling decisions of

Barnett v. Califano, supra, and White v. Mathews,

supra, this court has already held that the delays expe-

rienced by the plaintiffs in obtaining a hearing after it is

® The defendant provided the case summaries in lieu of specif-

ic answers to the plaintiffs interrogatories requesting detailed

descriptions of all delays in all reconsiderations. That the de-

fendant chose to submit this data as representative of the recon-

sideration process lends support to the finding that there are no

genuine issues of fact.

27a

requested violate this provision of the Act. Day v.

Harris No. 78-266 (D.Vt. Dec. 28, 1979). The court is

now called unon to go bevond the holdings of Barnett

and White and find that delays in the reconsideration

process, before a claimant requests a hearing, violate

the same provision of the Act. The court finds that they

do.

A claimant, upon initial denial of his claim by the

SSA, cannot obtain a hearing until after the SSA has

completed reconsideration of his claim. 20 C.F.R.

§ 404.917 (1980). The time necessary to complete a re-

consideration is included in the time that the claimant

must wait before he is afforded a hearing. Reconsidera-

tion is an administrative prerequisite to an appeal from

the initial denial of benefits. Unreasonable delays in the

reconsideration procedures trench on the statutory

duty to provide a hearing within a reasonable time.

In Barnett, White, and other cases holding unreason-

able the time between requesting and obtaining a hear-

ing, the courts have observed the special importance of

prompt adjudication of disability claims, given the

“*tvpically modest resources of the family unit of the

physically disabled worker ...’°” White v. Mathews,

supra, 559 F.2d at 859 (quoting Mathews v. Eldridge,

424 U.S. 319, 342 (1976)). Weighing against this need

for expeditious determination, however, is the Secre-

tary’s desire to perform a complete, high-quality review

of the initial determination. The courts must give wide

deference to procedures formulated by the Secretary

and the SSA, an agency “to which Congress [has] con-

fided the responsibility for substantive judgments.”

Vermont Yankee Nuclear Power Corp. v. Natural Re-

sotirces Defense Council, Inc., 435 U.S. 519, 524

(1978). Moreover, Congress has not yet imposed statu-

tory time limits on reconsideration or hearings in Title

28a

II cases.’ But Congress enacted a reasonableness re-

quirement, and “the decision not to impose precise lim-

its should not be interpreted as an endorsement of...

delays.” White v. Mathews, supra, 559 F.2d at 859-60.

The Secretary principally argues that the reconsider-

ation process is necessarily complex and time-

consuming, and that delays encountered in the process

are therefore reasonable under the circumstances. The

court disagrees. In each of the 27 of 77 case summaries

in which reconsideration took longer than 90 days there

are periods of unexplained delay, not directly attributa-

ble to necessary steps in the reconsideration process. In

summary #41, for example, there is an unexplained

three month delay between the time DDA received the

case folder and the time that a consultative examination

was “required.” Summary #69 contains several unex-

plained delays, including two and one-half months be-

tween the time a vocational evaluation was prepared

and the determination of denial was signed. The de-

fendant contends that the delays often result from the

fact that a case file is at ODO when reconsideration is

filed, or that the DDA has difficulty obtaining evidence

from third parties, or that ODO pre-adjudicative re-

view is conducted, or that systems limitations occur. A

claimant should not, however, have to endure delays

caused by inefficient agency procedures or unnecessari-

ly lengthy internal quality control checks. Moreover,

when the explained delays in the case summaries are

subtracted, most, if not all, of tne cases could have been

completed within 90 days. Accordingly, the court finds

that, except when delay is attributable to the claimant,

7 Congress has addressed the problem of delays in Title II

disability claims and has received t! e Report of the Department

of Health and Human Services, Impiementation of Section 308,

P.L. 96-265—Time Limitations for Decisions on Title II Benefit

Claims. This report recommends a 150 day limit for

reconsiderations.

29a

delays beyond 90 days in the reconsideration process

are unreasonable and in violation of the Act.

The court declines, however, to go as far as the plain-

tiffs ask, and find that delays beyond 30 days are unrea-

sonable. The Secretary has determined that de novo re-

view is appropriate at the reconsideration stage. This

review contemplates the generation of necessary sup-

plemental evidence in addition to review of existing ma-

terials. A reasonable time for locating the claim folder,

forwarding it to the appropriate agency, obtaining and

assessing acditional evidence, and generating notices

must be allowed. The SSA should also retain some flex-

ibility to implement additional statutory review and no-

tice requirements in the future.*.

Similarly, the record does not support the Secre-

tary’s contention that a 150 day limit for the reconsider-

ation process is reasonable.’. Extending the 90 day lim-

it for holding hearings, by a 90 day limit for

reconsiderations burdens an aggrieved claimant with a

180 day wait from the time he initiates review of his

entitlement until he gets his hearing. When the claim-

ant is not responsible for the time of delay to the hear-

ing stage, anything beyond the 90 day reconsideration

phase becomes unreasonable. See White v. Mathews,

434 F. Supp. 1252, 1261 (D. Conn. 1976) (“When the

government does not act with reasonable promptness,

those claiming total disability are required to bear an

unreasonable delay and suffer unwarranted deprivation

of that which is lawfully theirs”), aff'd, 559 F.2d 852

* Beginning in 1981, the Secretary is required to review 15

percent of all DDA determinations finding disability before

paying benefits. 42 U.S.C.A. § 421(c)(3) (West Supp. 1981).

This mandatory percentage increases to 35 percent in 1982 and

65 percent thereafter. Jd. As of July 1, 1981, the Secretary is

required to send more personalized denial notices. Jd. § 405

note.

® See note 7 supra.

40a

(1977), cert. denied, 435 U.S. 908 (1978). Of course, re-

consideration delays beyond 90 days are not necessarily

unreasonable when they are caused at the claimant’s in-

stance or where the delay is assignable to the claimant’s

contention that changed circumstances mandate recon-

sideration of additional evidence.

Accordingly, the court will impose a 90 day limit on

the time from reconsideration request to the issuance of

notice of the results of reconsideration, except in the

following circumstances:

1) the claimant offers new medical evidence or re-

ports new medical treatment since his initial

determination;

2) the claimant agrees to undergo a consultative ex-

amination when one is suggested by the defendant;

3) the claimant or his representative causes a delay

by failing to provide information needed for

reconsideration;

4) the claimant or his representative requests a

delay;

5) the delay is in some other way attributable to the

aggrieved claimant or his representative.

The court will not, however, order payment of inter-

im benefits to claimants who suffer delays of more than

90 days in the reconsideration process. Imposition of

such relief would create undue complexity and difficulty

in monitoring and enforcing the order.!° Instead, the

1° For example, if a claimant did not receive a reconsideration

notice within 90 days, the Secretary would have to begin paying

interim benefits. After generating a reconsideration notice

denying benefits, the Secretary would then stop payments. The

Secretary would then be permitted to recoup the interim bene-

fits. See Barnett v. Califano, supra, 580 F.2d at 33. The proc-

ess would be repeated if the Secretary failed to hold a hearing

within 90 days of request. Such a remedial scheme would un-

doubtedly create uncertainty for claimants, implementation

problems for the Secretary, and enforcement difficulties for the

court.

3la

court will order the Secretary to pay interim benefits to

claimants in the event a hearing on the claimant’s en-

titlement is not held within 180 days from the date re-

consideration is requested. This will permit the SSA 96

days to complete reconsideration and 90 days to hold a

requested hearing. The Secretary shall be entitled to

recoup such interim benefits in the event entitlement is

ultimately denied.

If the SSA takes between 90 and 180 days to com-

plete reconsideration, but allows the claimant benefits

upon reconsideration, the claimant will, of course, re-

ceive no interim relief. But the court is persuaded that

this solution most appropriately balances the adminis-

trative difficulties in implementing this order and the fi-

nancial needs of deserving claimants. Cf. White v.

Mathews, supra, 559 F.2d at 860 (upholding the district

court order granting interim benefits in limited circum-

stances as an equitable accommodation of administra-

tive difficulties and wage earners’ needs); Caswell v.

Califano, 435 F. Supp. 127, 135-36 (D. Me. 1977) (or-

dering that disability claims hearings be held within 90

days of request, but declining to order payment of in-

terim benefits), aff'd, 583 F.2d 9 (1st Cir. 1978).

The court will direct that judgment be entered after

thirty days from the filing and service of a copy of this

order on counsel of record. The parties may apply for

leave to be heard on the settlement of the final judg-

ment order.

It is so ORDERED.

Dated at Rutland, in the District of Vermont, this

19th day of August, 1981.

s/ JAMES S. HOLDEN =

JAMES S. HOLDEN

Chief Judge

32a

APPENDIX F

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF VERMONT

Civil Action No. 78-266

Filed Nov. 6, 1981

LEON S. DAY AND AMEDIE MAURAIS, ON BEHALF OF

THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,

PLAINTIFFS, =

RICHARD S. SCHWEIKER, SECRETARY OF THE UNITED

STATES DEPARTMENT OF HEALTH AND HUMAN

SERVICES, DEFENDANT.

JUDGMENT ORDER

It Is HEREBY ORDERED that judgment be entered as

follows:

IT Is HEREBY ADJUDGED that defendant’s failure to

provide prompt administrative reconsideration de-

cisions and prompt administrative law judge hearings

to claimants for Title II disability insurance benefits

residing in the District of Vermont who request such

reconsideration and/or hearing before an administrative

law judge following adverse initial determination by the

defendant that they are not disabled conflicts with the

“reasonable notice and opportunity for a hearing” re-

quirement of 42 U.S.c. § 405(b).

It Is FURTHER ORDERED AND ADJUDGED THAT:

(1) The plaintiffs’ motion for class certification was

GRANTED on June 14, 1979, the class consisting of:

all present and future Vermont residents seeking

to secure Social Security Disability benefits who,

following an initial determination by the defendant

that no disability exists, experienced an unreason-

able delay in the scheduling of and/or issuance of

decisions in reconsiderations and fair hearings.

33a

(2) The defendant is enjoined, ordered, and directed

to conclude reconsideration processing and issue recon-

sideration determinations within 90 days of requests for

reconsideration made by claimants, pursuant to 20

C.F.R. § 404.909 or other applicable regulations,

seeking Title Ii disability insurance benefits under

§ 205(b) of the Social Security Act, 42 U.S.C. § 405(b),

except in the following circumstances:

(a) The claimant offers new medical evidence or re-

ports new medical treatment since his initial

determination;

(b) The claimant agrees to undergo a consultative

examination when one is suggested by the

defendant;

lay by failing to provide information needed for

reconsideration;

(d) The claimant or his representative requests a

delay; or

(e) The delay is in some other way attributable to

the aggrieved claimant or his representative.

(3) The time period aforementioned in paragraph (2)

shall apply to reconsideration requests made on or after

the effective day of this order and shall commence with

the date of receipt by defendant of a formal written re-

quest for reconsideration filed pursuant to 20 C.F.R.

§ 404.909 or other applicable regulations. In the event

that the last day of said time period falls upon a Satur-

day, Sunday, or legal holiday (as defined by Fed. R.

Civ. P. Rule 6(a)), the enumerated period shall run un-

til the end of the next day which is not a Saturday, Sun-

day, or legal holiday.

(4) The defendant is enjoined, ordered, and directed

to conduct administrative law judge hearings within 90

days of requests for hearings made by claimants for Ti-

tle II disability insurance benefits pursuant to § 205(b)

of the Social Security Act, 42 U.S.C. § 405 (b), except

«(+ } Fea, llaues steariemeast . ;

In the loliowlng circumstances:

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ar Pe antes | a T - |

lav bv failing Oo provide iniormation needed Io?

Ta eer eee

Ag IUCaICaLION,

. oon .

3 of mand 2 , . aie . , + P

b) The claimant or his representative requests a

; |

qgdeia

- .

+ eo¢ ¢

near for the <checduled hearing

peas AUF Ulie VEIL Tit’ alili_

ow 4 : “ > ° «rere ++ + +

a) The gelay Is In some oOLne! Way a riInpDuLaDdDie LO

. ‘

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+r Ye ;aImant * Wt “~¥\r* weer .

ne Cilalmant Or nis representative.

im 1 af, + } 5 owe ae a

) The time period aforementioned in paragraph (4

, + aw 04% + ws 6 } . . . a6 -

shall apply to hearing = < made since issuance of

the Court's preliminary injunction on eameiies 30,

1980, and shall commence with the date of receipt by

defendant of a forma! written request for hearing filed

pursuant to 20 C.F.R. § 404.933 or other applicable

regulations. In the event that the last day of said time

period falls upon a Saturday, Sunday or legal holiday

(as defined by Fed. R.Civ.P. Rule 6(a)), the enum-

era ted period shall run until the end of the next day

which is not a Saturday, Sunday or legal holday.

(6) The defendant is enjoined, ordered and directed

to grant prospective interim Title II disability insur-

ance payments to Title II disability claimants in any of

the following circumstances:

A. No reconsideration determination is issued

within 180 days of the request for reconsideration.

Said payments shall begin with the first month af-

ter the month in which the 180 day time limit is ex-

ceeded and shall end with the conclusion of the

month in which the reconsideration determination

is mailed. Said time period shall apply to the recon-

sideration requests made on or after the effective

date of this Order and shall commence with the

date of receipt by defendant of a formal written re-

quest for reconsideration filed pursuant to 20

C.F.R. § 404.909 or other applicable regulations.

398

B. No hearing is held within 180 days of a prior re-

quest for reconsideration that is followed by a

hearing request. The passage of time between the

issuance of the written decision of reconsideration

and the date of receipt of the written hearing re-

quest shall be excluded from this time period. The

interim payments shall begin with the first month

after the month in which the 180 day time limit is

exceeded and shall end with the conclusion of the

month in which the hearing before the administra-

tive law judge is held. Said time period shall apply

to reconsideration requests made on or after the ef-

fective date of this Order and shall commence with

the date of receipt by defendant of a formal written

request for reconsideration filed pursuant to 20

C.F.R. § 404.909 or other applicable regulations.

C. No nearing is held within 90 days of a request

for hearing. Said payments shall begin with the

first month after the month in which the 90 day

time period is exceeded and shall end with the con-

clusion of the month in which the hearing before an

administrative law judge is held.

Nothing in this order shall be construed to require the

payment of retroactive Title II disability insurance ben-

efits based upon the alleged date of disability onset.

Nothing in this order shall be construed to limit the de-

fendant’s right to recover payments made under this

paragraph, pursuant to standard overpayment proced-

ures, if it is finally determined that the individual so

paid is not under a disability for any period in which the

payments are made pursuant to this paragraph.

(7) Benefits pa'd pursuant to this order shall be sus-

pended if the claimant refuses to cooperate in attending

a scheduled hearing or in going to a consultative exami-

nation or in obtaining any other necessary evidence.

(8) Beginning with each applicable administrative ap-

pellate request received on the 61st day after the entry

of this order and continuing thereafter, the defendant is

directed to notify in writing each claimant who requests

36a

a reconsideration or an administrative law judge hear-

ing of his or her rights under the order by including a

brief statement of the rights accorded hereunder. Said

written notice may be given to the claimant personally

or may be included in any mailing to the claimant re-

garding his appellate request but shall not require a

separate special mailing by the Social Security office.

The plaintiff and defendant will provide this Court with

an agreed upon statement of notice.

(9) This order shall become effective on the sixty-first

day following its entry except as otherwise provided in

paragraphs 5 and 6 supra.

(10) This order shall not apply to claims for con-

current henefits under Title II and Title XVI, which

are included in Barnett v. Califano, 580 F.2d 28 (2d

Cir. 1978), but shall apply to disability claims under Ti-

tle II only.

(11) This decree shall be binding upon the Secretary

of Health and Human Services when adjudicating

administrative reconsiderations and hearings within the

State of Vermont.

(12) Within sixty (60) days from the date of this Or-

der, the defendant shall submit to the Court and to the

plaintiffs’ attorneys a detailed statement or plan for im-

plementing the relief required herein on a continued ba-

sis, and the actual administrative steps taken to effec-

tuate said plan. Any disputes between the parties as to

whether the procedure and steps outlined by the de-

fendant will fulfill the requirements of this Order shall

be resolved by the Court.

(13) This Court shall retain continuing jurisdiction

over this cause to insure compliance with the provisions

of this Order for a period of no less than one year from

the date hereof.

Dated at Rutland, in the District of Vermont, effec-

tive this 30th day of October, 1981 and entered Novem-

ber 6, 1981.

37a

s/ JAMES 3. HOLDEN :

HONORABLE JAMES S. HOLDEN

Chief Judge

U.S. District Court for the

District of Vermont

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.