Petition for Writ of Certiorari — Bowen v. Polaski

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86 1617 FILED

ey APR 8 1987

In the Supreme Court of the Gni

OCTOBER TERM, 1986

Otis R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

Vv.

LORRAINE POLASKI, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

CHARLES FRIED

Solicitor General

RICHARD K. WILLARD

Assistant Attorney General

ALBERT G. LAUBER, JR.

Deputy Solicitor General

EDWIN S. KNEEDLER

Assistant to the Solicitor General

WILLIAM KANTER

HOWARD S. SCHER

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTION PRESENTED

This case, on remand for reconsideration in light of this

Court’s decision in Bowen v. City of New York, No.

84-1923 (June 2, 1986), is an Eighth Circuit-wide class ac-

tion brought under 42 U.S.C. 405(g) to challenge the

Secretary’s policies regarding the manner in which allega-

tions of pain are evaluated in determining whether a claim-

ant is eligible for Social Security disability benefits. The

question presented is whether the court of appeals erred in

requiring the Secretary to reopen the claims of thousands

of class members, even though (i) Congress ratified and

the court of appeals sustained the challenged policies, and

(ii) the class members involved knowingly abandoned their

claims when they failed to seek administrative review of

the preliminary decisions denying their claims.

(I)

ica iia aii

PARTIES TO THE PROCEEDINGS

In addition to the parties named in the caption, the

other parties to these proceedings in the courts below were

Patrick Blaschko, an intervenor, and the following class

of plaintiffs certified by the district court (App. 54a-55a):

All persons residing in Minnesota, North Dakota,

South Dakota, Missouri, Nebraska, Iowa, or Arkan-

sas,

a) who have been or will be notified that their ap-

plications for Title II and/or/Title XVI benefits have

been denied or that their Title II and/or Title XVI

benefits are being terminated on medical or medical

vocational grounds; and ¢

b) who allege that they are unable to work in whole

or in part because of pain or other subjective com-

plaints and/or that their medical condition has not

improved; and

c) who are pursuing or will pursue timely administra-

tive or judicial appeals, or, if not pursuing timely ap-

peals, who have received or will receive an adverse

decision at any level of the administrative review

process on or after January 30, 1984, provided

however that,

(1) as to those who are residents of Arkansas

and who have been or will be notified that their

applications for Title II and/or Title XVI

benefits have been denied, the class includes only

(a) those who are pursuing or will pursue timely

judicial appeals and (b) those who are pursuing

timely administrative appeals at the Administra-

tive Law Judge or Appeals Council level, and (c)

those who received or will receive an adverse

decision at the Administrative Law Judge or Ap-

peals Council level on or after February 20, 1984;

(2) as to those who are residents of Arkansas

and who have been terminated from Title Il

and/or Title XVI benefits, the class also includes

those who have received or will receive an

adverse decision at any level of the adminis-

trative review process on or after February 12,

1983; and

(3) as to those who are residents of lowa and

who have been or will be notified that their ap-

plications for Title II and/or Title XVI benefits

have been denied, the class also includes those

who have received an adverse decision at any

level of the administrative review process on or

after November 26, 1983; and

(4) as to those who are residents of lowa and

who have been or will be terminated from Title Il

and/or Title XVI benefits, the class also includes

those who have received or will receive an

adverse decision at any level of the ad-

ministrative review process on or after January

13, 1982,

(d) provided, further, however, that the class of per-

sons whom plaintiffs represent shall exclude persons

who are members of class actions which have been

certified in any court in the Eighth Circuit which

challenge the Secretary’s policy with regard to a

medical improvement standard or the evaluation of

pain and other subjective complaints; provided that

such persons shall be excluded from this class only

with regard to the issue or issues actually being

litigated in such other certified class actions.[']

' The claims of the members of the certified class who had been

receiving benefits but whose benefits were terminated were remanded

to the Secretary for reconsideration pursuant to Section 2 of the Social

Security Disability Benefits Reform Act of 1984 (98 Stat. 1794), and

the court of appeals dismissed that portion of the class action (App.

Ya-11a). Those individuals therefore are no longer parties to these pro-

ceedings.

TABLE OF CONTENTS |

Page

a 500 cet bce csnced aks pbonssecsnranbensensr |

I Pe ete 0d. seca d a cada tee ak Abs cee eis l

Statutory provisions involved ..................0ceeeeeeee 2

i ie Be Pee coe. een hea g bude ee hee os 2

A. The statutory and regulatory framework .......... 2

Di. EE cc dpe deboxbdeseenensn 2

2. Substantive provisions ..................00.. 4

B. The proceedings in this case ..................... 4

Reasons for granting the PEUMION ... 2... cc ccc cc sccccseces 1]

EP, See en Cr ere Pee ey eee ee Teer ee 24

TABLE OF AUTHORITIES

Cases:

Bowen v. City of New York, No. 84-1923 (June 2, 1986) . passim

Califano v. Sanders, 430 U.S. 99 (1977) ............... 12

Califano v. Yamasaki, 442 U.S. 682 (1979) ............. 16

FTC v. Standard Oil Co., 449 U.S. 232 (1980) ......... 18

Heckler v. Day, 467 U.S. 104 (1984) .................. 15

Heckler v. Kuehner, 469 U.S. 977 (1984) ............... 8

Heckler v. Lopez, 469 U.S. 1082 (1984) ................ 8

Heckler v. Ringer, 466 U.S. 602 (1984) .............. 12, 13, 14

Hyatt v. Heckler, 807 F.2d 376 (4th Cir. 1986) .......... 23

Lindahl v. OPM, 470 U.S. 768 (1985) ................. 14

Lorillard v. Pons, 434 U.S. 575 (1978) ................. 14

Mathews v. Diaz, 426 U.S. 67 (1976) .................. 16

Mathews v. Eldridge, 424 U.S. 319 (1976) ............ 4, 12, 15

New York v. Heckler, No. 83 Civ. 5903 (RLC) (S.D.N.Y.

Ne Pee Pee rere ree ry ree 23

Weinberger v. Salfi, 422 U.S. 749 (1975) ......... 12, 13, 14, 16

Statutes, regulations and rules:

Social Security Act, 42 U.S.C. (& Supp. II1) 301 ef seq.:

Tit. Il, 42 U.S.C. 401 ef seq.:

Oe Res Oe cs oa ce laa dae keke oe 9,14

42 U.S.C. (Supp. II1) 405(b)(1) ............... 3

GR RE Bilce ME bak 640 0 66 0404d60+06i nso passim

USA. Ge. Ties GO 0h 6v ha 0 as ede ARs 2

(V) ; \

Statutes, regulations and rules — Continued: Page

42 U.S.C. Gump. TEE) SB0GE) .. ccc ccccccccces 3,14

ee ee TS uivc%s cc ccccceescccdsceée 4

ep Ss SE co ccbicccccctceseccoce 4

42 U.S.C. (Supp. 111) 423d SMA) ..... 22... .. 9

42 U.S.C. (@ Supp. Ill) 423(f) ............... 8

42 U.S.C. (Supp. Il) 423(g) ..... ..... 2... 6. 15

Tit. XVI, 42 U.S.C. 1381 ef seq.:

ed IIIT 6 sc cco ccccccccscece 4

42 U.S.C. 1382c(aX3MC) ..... 2... ee cece, 4

Ee oc ccccsctévesacceves« 3

42 U.S.C. 1383(cM3) ......... eobuaunente sae

Se EE nec ceccccecdcccces cas 2

Social Security Amendments of 1954, Pub. L. No. 761,

es TE aco becccucdctussecvacdsneceese 14

Social Security Amendments of 1956, Pub. L. No. 880,

i Sh Ue Ge deded eckceddcasbnsd desea cee 14

Social Security Amendments of 1972, Tit. Ill, Pub. L.

PEO, Fare, OP es BONO OUGTE occ vccccccscesecéser 14

Social Security Disability Benefits Reform Act of 1984,

Pub. L. No. 98-460, 98 Stat. 1794 ef seg. ... 2... ...... 8

FR SO OR errr 8, 9, 10, 14

SD As EE EID «ac ccnnccicccccevececeses cit 8

SS Os EUMUEED 0.0.6 6 cecceasecesecenéceé 8, 20

Ne ns ee eae ane 9

De, EEE a4 oc cccccsccenmiccce Teeeukaaces 2, 9, 10

ye OEE oc 6:5 cccccéecécvcecneceeues 20

20 C.F.R:

EE (oc none ed ds eset cecudecces a 13

a. ccc cout ccbeeeSuasvebatucens 13

Section 403. 70%) ......... swkecdeadedeeanuae 13

I CE sn. wk eo beea dececeu’ a rer 13

Section 404.900(a)(5) .. 2.2.6.0... err ; 3

Section 404.904 _.... iin Wella catacvunel caeeaiens 3

Section 404.905 ............ <wesan cease tes 3

SOCRIOM GOS. STOMA) occ ccc ccccccdcccccccccciccs 3

ee as cc aauaeeeeseaceunuues 3

SR a ae 3

I oe ha ae re ee 3

Section 404.955(a) ..... sen evel 6 ae 3

Vil

Statutes, regulations and rules — Continued: Page

Section 404.968(a)(1) 3

Section 404.981 3

Section 404.1503

Section 404.1529 4,7, 1

Section 416.90}(e)

Section 416.929

Section 416.1400(a)(5)

Section 416.1404

Section 416.1404(b)(3)

Section 416.1405

Section 416.1409(a)

Section 416.1420

Section 416.1421(a)

Section 416.1433(b)

Section 416.1455(a)

Section 416.1468

Section 416.1481

Section 422.210

Fed. R. Civ. P. 2Ma)(2) |

Fed. R. Civ. P. 2MayX3)

oS w

ee ee ee oe ee ee ee oe ee

oo &

Miscellaneous:

130 Cong. Rec. (daily ed. Sept. 19, 1984):

p. H9834 22

p. H9836

o. $11458 22

5S Fed. Reg. 4171-4174 (1940) 13

H.R. Conf. Rep. 98-1039, 98th Cong., 2d Sess. (1984) 9, 20,

H.R. Rep. 98-618, 98th Cong., 2d Sess. (1984) 20, 21, 22

S. Doc. 10, 77th Cong., Ist Sess. Pt. 3 (1941) 13

S. Rep. 98-466, 98th Cong., 2d Sess. (1984) 14, 20, 21

Social Security Ruling 82-58 (1982) 4, 7, 10, 17

In the Supreme Court of the Gnited States

OCTOBER TERM, 1986

No.

Otis R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

LORRAINE POLASKI, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH 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 Eighth Circuit in this case.

OPINIONS BELOW

The memorandum opinion of the court of appeals on

remand from this Court (App. la-2a) is reported at 804

F.2d 456. Prior opinions of the court of appeals (App.

4a-29a, 30a-34a) are reported at 751 F.2d 943 and 739 F.2d

1320, respectively. The orders of the district court (App.

35a-48a, 49a-84a) on matters pertaining to the class are

reported at 585 F. Supp. 997 and 585 F. Supp. 1004,

respectively. The orders of the district court remanding the

individual claims of respondents Polaski and Blaschko to

the Secretary (App. 85a, 94a-98a) are unreported.

JURISDICTION

The judgment of the court of appeals was entered on

October 30, 1986. The order denying the Secretary’s peti-

(1)

tition for rehearing was entered on January 8, 1987 (App.

3a). The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

42 U.S.C. 405(g) and Section 3 of the Social Security

Disability Benefits Reform Act of 1984, Pub. L. No.

98-460 (98 Stat. 1799) are reproduced at App. 102a-106a.

STATEMENT

This is an Eighth Circuit-wide class action brought pur-

suant to 42 U.S.C. 405(g) to challenge the policies of the

Secretary of Health and Human Services regarding the

manner in which a claimant’s allegations of pain are

evaluated in determining whether he is entitled tc disabili-

ty benefits under the Social Security Act. Although the

court of appeals sustained the Secretary’s policies, it

ordered the Secretary to reopen the claims of thousands of

class members who failed to pursue their administrative

remedies after their claims were initially denied.

A. The Statutory And Regulatory Framework

1. Procedural Provisions

Congress has directed that the determination whether an

individual is under a disability shall be made in the first in-

stance by a state agency, pursuant to regulations,

guidelines, and performance standards established by the

Secretary. 42 U.S.C. (& Supp. III) 421(a), 1383b(a); 20

C.F.R. 404.1503, 416.903; Bowen v. City of New York,

No. 84-1923 (June 2, 1986), slip op. 3. If the state agency

determines that a new applicant is not disabled or that the

disability of a current recipient has ceased, the indivicual

may request a de novo reconsideration by the state agency.

The claimant is personally informed that he must request

reconsideration within 60 days of his receipt of the adverse

initial determination (20 C.F.R. 404.904, 404.909(a)(1),

416.1404, 416.1409(a); see, e.g., P. Tr. 167; B. Tr. 947),

and that determination becomes binding upon him-if he

does not do so. 20 C.F.R. 404.905, 416.1405.

if an individual is dissatisfied with the state agency’s

decision after reconsideration, he “shall be entitled to a

hearing thereon by the Secretary” (42 U.S.C. (Supp. III)

421(d); see also 42 U.S.C. 1383(c)(1)). The Act. re-

quires —and the claimant is personally notified (see, e.g.,

P. Tr. 169; B. Tr. 92)—that he must request a hearing

before an administrative law judge (ALJ) within 60 days

of his receipt of the state agency’s reconsideration decision

(42 U.S.C. (Supp. IID) 405(b)(1); 42 U.S.C. 1383(c)(1)).

The latter decision is binding upon the claimant if he does

not timely request an ALJ hearing. 20 C.F.R. 404.920,

404.921(a), 404.933(b), 416.1404(b)(3), 416.1405,

416.1420, 416.1421(a), 416.1433(b).

If the ALJ’s decision is adverse to the claimant, he then

may seek review by the Appeals Council in the Social

Security Administration. If a claimant does not request

such review within 60 days, the adverse ALJ decision is

binding. 20 C.F.R. 404.955(a), 404.968(a)(1), 416.1455(a),

416.1468. Each claimant is personally informed that he

must seek Appeals Council review within 60 days. See,

e.g., P. Tr. 23; B. Tr. 8. It is only after the Appeals Coun-

cil has denied review, or has granted review and issued its

own decision, that the Secretary has rendered his “final

decision” on the individual’s claim for benefits, which then

is subject to judicial review pursuant to 42 U.S.C. 405(g).

See 42 U.S.C. (& Supp. III) 421(d), 1383(c)(3); 20 C.F.R.

404 .900(a)(5), 404.981, 416.1400(a)(5), 416.1481, 422.210.

2“P. Tr.” refers to the transcript of the administrative record on the

claim of the class representative, Lorraine Polaski. “B. Tr.” refers to

the transcript of the administrative record on the claim of intervenor

Patrick Blaschko.

2. Substantive Provisions

Under both Title II and Title XVI of the Social Security

Act, the term “disability” is defined to mean the “inability

to engage in any substantial gainful activity by reason of

any medically determinable physical or mental impair-

ment” that can be expected to result in death or to last for

12 months. 42 U.S.C. 423(d)(1)(A), 1382c(a)(3)(A). The

impairment must “result{] from anatomical,

physiological, or psychological abnormalities which are

demonstrable by medically acceptable clinical and

laboratory diagnostic techniques.” 42 U.S.C. 423(d)(3),

1382c(a)(3)(C). See Mathews v. Eldridge, 424 U.S. 319,

336 (1976).

Implementing regulations provide that a claimant will

not be found to be disabled under these statutory standards

on the basis of his symptoms, including pain, “unless

medical signs or findings show that there is a medical condi-

tion that could be reasonabiy expected to produce those

symptoms.” 20 C.F.R. 404.1529, 416.929. The Social

Security Administration (SSA) elaborated upon this regula-

tion in Social Security Ruling (SSR) 82-58, which was

issued in 1982. SSR 82-58 explains that symptoms may im-

pose limitations beyond those indicated by objective

medical findings and that the decisionmaker therefore must

assess the impact of pain or other symptoms on the claim-

ant’s residual functional capacity to work. In making that

assessment, SSR 82-58 requires consideration of both sub-

jective and objective factors, including the claimant’s

allegations concerning the frequency and duration of the

pain, the effect of the pain on the claimant’s daily activities, _

the mitigating effect of medication, and recorded observa-

tions about the pain by examining physicians and SSA per-

sonnel. Gov’t C.A. Addendum D.

B. The Proceedings In This Case

1. Respondent Polaski received: Title II disability

benefits beginning in 1979 (App. 36a). Her eligibility sub-

sequently was reviewed, and the state agency determined

that her disability had ceased as of June 1982 because she

was then able to engage in substantial gainful activity (P.

Tr. 166). The state agency’s decision was affirmed on

_ reconsideration (P. Tr. 169), and the ALJ rendered a deci-

sion to the same effect after a hearing (P. Tr. 23-30). The

ALJ expressly recognized that Eighth Circuit precedent

permitted a finding of disability based on the claimant’s

subjective complaints of pain (P. Tr. 28). But the ALJ

stressed that symptoms, including pain, are insufficient to

establish disability unless medical findings or signs show

that there is a medical condition that could reasonably be

expected to produce those symptoms. The ALJ further

emphasized that the mere assertion of pain does not

foreclose inquiry into whether the claimant’s complaints

are credible. After reviewing the evidence under these

principles, the ALJ concluded that “the record does not

establish the existence of pain of such intensity and fre-

quency so as to preclude [Polaski] from engaging in all

types of competitive work activity” and that she could

work in a “relatively low-stress, ‘unskilled’ work environ-

ment” (ibid.). The Appeals Council denied review of the

ALJ’s decision on November 28, 1983 (P. Tr. 6-7).

2. Polaski filed this civil action in January 1984 in the

United States District Court for the District of Minnesota

pursuant to 42 U.S.C. 405(g), seeking review of the

Secretary’s final decision that her disability had ceased.

Polaski later sought to amend her complaint to represent a

class of claimants in the Eighth Circuit. Polaski alleged

that the Secretary was “nonacquiescing” in Eighth Circuit

case law with respect to (i) the evaluation of subjective

complaints of pain, and (ii) a requirement that the

Secretary find improvement in a recipient’s medical condi-

tion before terminating that person’s disability benefits

(App. 36a).

—EEE=—=—_—_—=—=_

By order dated April 17, 1984, the district court granted

Polaski’s motion to amend the complaint, certified an

Eighth Circuit-wide class, and entered a Circuit-wide tem-

porary restraining order (App. 35a-48a).? The class is

defined to include all persons residing in the Eighth Circuit

who have been or will be notified that their applications

for disability benefits have been denied or that their

benefits have been terminated; “who allege that they are

unable to work in whole or in part because of pain or other

subjective complaints and/or that their medical condition

has not improved”; and “who are pursuing or will pursue

timely administrative or judicial appeals, or, if not pursu-

ing timely appeals, who have received or will receive an

adverse decision at any level of the administrative review

process on or after January 30, 1984” (App. 54a-55a).4 In

a subsequent order dated April 27, 1984, the district court

3 The district court also granted the motion of Patrick Blaschko to

intervene (App. 37a). Blaschko, like Polaski, was a prior recipient of

disability benefits whose benefits were terminated. After the Appeals

Council denied Blaschko’s request for review (B. Tr. 3-4), he sought

judicial review in the district court on March 15, 1983. Blaschko v.

Heckler, Civil No. 4-83-233 (D. Minn.). His action was assigned to a

different judge (Murphy, J.) than the judge who decided the instant

case (Lord, C.J.). On March 7, 1984, Judge Murphy remanded

Blaschko’s individual case to the Secretary for further proceedings in

accordance with a magistrate’s report that concluded that the ALJ had

incorrectly discredited Blaschko’s subjective complaints of pain (App.

94a-98a). Thus, Blaschko’s individual action had already been re-

solved by a different judge when the district court permitted him to in-

tervene in the instant case. On January 12, 1985, the Appeals Council

rendered a decision fully favorable to Blaschko.

* The latter date was selected to comply with the requirement in 42

U.S.C. 405(g) that a claimant seek judicial review within 60 days of

the Secretary’s final decision on his claim for benefits (App. 26a). The

district court adopted beginning dates other than January 30, 1984 for

class members in Arkansas and Iowa, concluding that the running of

the 60-day period had been tolled by the filing of separate class actions

in those States (id. at 53a & n.1, 54a-55a). See pages II-III, supra.

rejected the Secretary’s contention that the class could not

include any persons who had failed to exhaust their ad-

ministrative remedies, as required by 42 U.S.C. 405(g)

(App. 5la-52a).

On the merits, the district court concluded that the

Secretary’s policies for the evaluation of pain embodied in

20 C.F.R. 404.1529 and SSR 82-58 were invalid (App.

§9a-65a) and that the Secretary erroneously had ter-

minated benefits without a finding of medical improve-

ment (id. at 65a-68a). The court therefore entered a

“preliminary injunction” that directed the Secretary: (i) to

notify new-applicant class members who then had admin-

istrative appeals pending that they were entitled to have

their claims considered under what the court defined as the

“proper” pain standard and to submit additional evidence

under that standard; and (ii) to notify class members

whose applications had been denied and who did not have

a timely appeal pending that they were entitled to have

their claims reopened and readjudicated under the same

conditions. The court ordered similar injunctive relief for

class members whose benefits had been terminated (id. at

76a-84a).

3. The Secretary appealed the district court’s order

entering the preliminary injunction.’ Because the

Secretary maintained on appeal that the Department had

been applying standards for the evaluation of pain that

were consistent with Eighth Circuit law (see C.A. Br.

18-26), the court of appeals, after oral argument, sug-

gested that the parties try to reach agreement on the ap-

propriate standards (App. 31a). The parties thereafter did

reach agreement (id. at 32a-33a), and on July 17, 1984, the

court of appeals approved that agreement as a correct

restatement of Eighth Circuit precedent (/d. at 30a-34a).

5 The court of appeals granted a stay pending appeal (App. 31a),

and that stay has remained in effect throughout these proceedings

with respect to the class members at issue here.

The court of appeals issued its decision on the remaining

issues in the case on December 31, 1984 (App. 4a-29a). In

the meantime, Congress had enacted the Social Security

Disability Benefits Reform Act of 1984 (Pub. L. No.

98-460, 98 Stat. 1794 et seq.), which had a direct bearing

on both the “medical improvement” and “pain” issues.

a. In Section 2(a) of the 1984 Act (98 Stat. 1794), Con-

gress enacted standards for determining whether a

person’s disability benefits should be terminated on

grounds of “medical improvement.” See 42 U.S.C. (Supp.

III) 423(f). In Section 2(d) of the 1984 Act (98 Stat.

1797-1798), Congress directed that the claims of class

representatives and unnamed class members in certified

class actions raising the “medical improvement” issue be

remanded to the Secretary for reconsideration under the

new standards, even if those individuals had not exhausted _

their administrative remedies as required by 42 U.S.C.

405(g). See Bowen v. City of New York, slip op. 18 n.14.

In the instant case, the court of appeals concluded that all

of the class members whose benefits had been terminated

were covered by the special remand provisions of the 1984

Act. It therefore remanded the claims of those class

members to the Secretary and dismissed the class action in-

sofar as it involved the “medical improvement” cases

(App. 9a-lla). That ruling was correct (see Heckler v.

Lopez, 469 U.S. 1082 (1984), and Heckler v. Kuehner, 469

U.S. 977 (1984)) and is not at issue here.®

6 Although the court of appeals did not advert to the fact, the claim

of respondent Polaski, the class representative, was covered by the

special remand provisions of the 1984 Act. In fact, the district court

separately remanded Polaski’s case to the Secretary pursuant to those

provisions on April 10, 1985 (App. 85a). Intervenor Blaschko’s case

also was subject to remand pursuant to Section 2 of the 1984 Act, and

his individual case actually had been remanded by a different

b. The court of appeals next addressed the claims of

those class members who had not previously been receiv-

ing disability benefits and who therefore were not covered

by the special remand provisions in Section 2 of the 1984

Act. As to these class members (the new applicants), the

instant case raised only the “pain” issue.

In Section 3 of the 1984 Act (98 Stat. 1799), Congress

enacted new statutory standards for the evaluation of

pain. See 42 U.S.C. (Supp. II]) 423(d)(5)(A), reprinted at

App. 104a-106a. As the court of appeals held, Section 3

was intended to ratify the Secretary’s approach to the

evaluation of pain by “ ‘put[ting] present regulatory policy

into [the] statute’ ” and “ ‘more accurately reflect{ing] cur-

rent policies’” (App. 18a-19a, quoting 130 Cong. Rec.

H9836 (daily ed. Sept. 19, 1984) (remarks of Rep. Pickle),

and H.R. Conf. Rep. 98-1039, 98th Cong., 2d Sess. 29

(1984)). The court of appeals therefore concluded that

district judge even before the 1984 Act was passed. See note 3, supra.

Section 2(d)(4) of the 1984 Act provides that the decision by the

Secretary on a specially remanded case “shall be regarded as a new

decision on the individual’s claim for benefits” and “shall be subject to

further administrative review and to judicial review only in conformi-

ty with the time limits, exhaustion requirements, and other provisions

of [42 U.S.C. 405] and regulations issued by the Secretary in con-

formity with such Section.” 98 Stat. 1798. Polaski therefore cannot

returii to court unless she receives an adverse decision on remand and

fully exhausts her administrative remedies. There accordingly is a

question whether there has been a proper representative of the remain-

ing class members —/.e., the new-applicant members who challenged

the Secretary’s standards for the evaluation of pain—since April 10,

1985. There also is a serious question whether petitioner, who fully ex-

hausted her administrative remedies before personally seeking judicial

review, could in any event be a proper representative under Fed. R.

Civ. P. 23(a)(3) of a class of claimants who knowingly declined to per-

sue their administrative remedies and whose claims therefore are now

barred by res judicata. See pages 15-16, infra.

Section 3 of the 1984 Act requires adjudicators to follow

20 C.F.R. 404.1529 and SSR 82-58, albeit in light of the

agreement between the parties that was approved by the

court on July 17, 1984 (App. 20a).

Thus, the court of appeals, unlike the district court, ap-

proved the Secretary’s policies for the evaluation of pain.

Moreover, Section 3 of the 1984 Act (in contrast to the

special remand provisions in Section 2) does not provide

for the readjudication of the claims of class members who

made allegations of pain but who failed to exhaust their

administrative remedies. Nevertheless, the court of ap-

peals affirmed the district court’s preliminary injunction

insofar as it required the Secretary to provide for the

reopening and readjudication of the claims of all of the

new-applicant class members in this case, despite their

failure to pursue their administrative remedies (App.

21a-28a).

4. The Secretary then filed a petition for a writ of cer-

tiorari seeking review of the court of appeals’ reopening

order. This Court granted the petition, vacated the judg-

ment of the court of appeals, and remanded the case for

further consideration in light of Bowen v. City of New

York, No. 84-1923 (June 2, 1986). See Bowen v. Polaski,

No. 85-55 (June 9, 1986). On remand, the Secretary con-

tended that the logic of this Court’s decision in City of

New York required modification of the Eighth Circuit’s

decision so as to exclude from the class those claimants

who failed to exhaust their administrative remedies.

In a brief order, the court of appeals declined to amend

its prior judgment, giving three reasons for declining to do

so (App. la-2a). First, it relied on the fact that the

Secretary had stated, in suggesting,that the Court hold the

government’s petition in No. 85-55 pending disposition of

City of New York, that the exhaustion issue here was

similar to that in City of New York, where the Court

ultimately held that exhaustion was not required. See

85-55 Pet. 12, 16; Reply Br. 2. Second, the court of appeals

stated that its judgment “simply require[d] that the claims

of the questioned class members be reopened at the admin-

istrative level” and “[did) not order that benefits be paid”

(App. 2a). Third, the court expressed the view that

“(ujnless these class members are permitted to reopen their

claims with the Secretary, they may suffer irreparable in-

jury” (ibid.). The Secretary’s petition for rehearing en

banc was denied (id. at 3a).

REASONS FOR GRANTING THE PETITION

The court of appeals has affirmed a sweeping injunction

that requires the Secretary to provide for the reopening

and readjudication of the claims of some 8000 class

members, even though (i) Congress ratified and the court

of appeals approved the Secretary’s policies governing

those claims, and (ii) the class members knowingly allowed

the administrative decisions denying their claims to

become final and binding by failing to seek timely ad-

ministrative review. This unprecedented order is inconsis-

tent with the Court’s decision last Term in Bowen v. City

of New York regarding exhaustion of administrative

remedies as a prerequisite to judicial review under 42

U.S.C. 405(g).

In City of New York, the Court carved out a narrow ex-

ception to the exhaustion requirement in what the Court

called the “unique circumstances” of that case. Slip op. 17.

Those “unique circumstances” were found to involve a

secret, systemwide, and unlawful policy that realistically

could not have been challenged by individual claimants.

/bid. But despite the Court’s remand of the instant case for

further consideration in light of City of New York, the

court below did not even mention these critical aspects of

the Court’s rationale. Here, in sharp contrast to City of

New York, the court of appeals sustained the very policies

that the plaintiff class challenged. Those policies were

published, not secret, and therefore could not have been

the cause of the class members’ failure to pursue their ad-

‘ministrative remedies. And in further contrast to the class

of mentally impaired claimants in City of New York, it

would not have been unrealistic or futile for the class

members here to pursue their administrative remedies in

order to correct any misinterpretation of the Secretary’s

policies that might have occurred in particular decisions at

the early stages of the administrative review process.

If a court may excuse claimants from the consequences

of their deliberate choices to forgo further review in cir-

cumstances such as these, then there is effectively nothing

left of the exhaustion requirement that Congress enacted

in 42 U.S.C. 405(g). Numerous other class actions raising

similar exhaustion issues are pending in the lower courts,

and such suits will proliferate if the courts persist in what

we believe to be a fundamental misunderstanding of this

Court’s exhaustion ruling in City of New York. Review by

this Court is thus warranted at this time.

1. This Court’s ruling in City of New York does not

support the court of appeals’ almost casual reaffirmance

of the district court’s injunction, which would require the

. reopening of the claims of some 8000 class members. The

Secretary’s decisions denying each member’s claim are now

final and binding by operation of 42 U.S.C. 405(g), im-

plementing regulations, and this Court’s own prior deci-

sions addressing the jurisdictional prerequisites to suit

under 42 U.S.C. 405(g). See Heckler v. Ringer, 466 U.S.

602 (1984); Califano v. Sanders, 430 U.S. 99, 108-109

(1977); Weinberger v. Salfi, 422 U.S. 749 (1975); Mathews

v. Eldridge, supra. The Court in City of New York did not

purport to sweep those prerequisites aside. See slip op. 3-4,

13-14. To the contrary, it stated that “exhaustion is the

rule in the vast majority of cases” and that exhaustion was

excused in City of New York only because of its “unique

circumstances” (slip op. 18, 17). Contrary to the court of

appeals’ holding on remand, this class action is clearly

controlled by the principles that govern “the vast majority

of cases” (ibid.).

a. The general rule that a person seeking benefits

under the Social Security Act must pursue his ad-

ministrative remedies before filing suit is not merely a

“judicially developed doctrine of exhaustion” (Sa/fi, 422

U.S. at 766). That requirement is mandated by the

language of 42 U.S.C. 405(g) itself, which provides that an

individual may obtain judicial review only “after [a] final

decision of the Secretary made after a hearing to which he

was a party” (emphasis added). Because the existence of a

“final decision” is a condition on Congress’s waiver of

sovereign immunity (compare City of New York, slip op.

10-11), the Court has held that a “final decision” is “cen-

tral to the requisite grant of subject-matter jurisdiction”

and therefore is a “statutorily specified jurisdictional

prerequisite” to suit (Sa/fi, 422 U.S. at 764, 766; accord,

Ringer, 466 U.S. at 617).

Congress has left to the Secretary to specify by regula-

tion what constitutes the “final decision” that terminates

administrative proceedings on a particular claim and trig-

gers the right of judicial review. Salfi, 422 U.S. at 766 &

n.9. “Pursuant to [his] rulemaking authority,” the

Secretary “has provided that a ‘final decision’ is rendered

on a * * * claim only after the individual claimant has

pressed his claim through all designated levels of ad-

ministrative review” (Ringer, 466 U.S. at 606; see also

Salfi, 422 U.S. at 765). See pages 2-3, supra. This require-

ment has been embodied in the regulations governing

review of social security claims for almost 50 years. See

5 Fed. Reg. 4171-4174 (1940), adopting 20 C.F.R.

403.706(c), 403.708(g), 403.709(/), 403.710(e); S. Doc. 10,

77th Cong., Ist Sess. Pt. 3, at 38-39, 51-53 (1941). The

Court held in Sa/fi that the prerequisite of a final decision

by the Appeals Council “may not be dispensed with merely

by a judicial conclusion of futility” (422 U.S. at 766; see

also Ringer, 466 U.S. at 618-619).

b. When Congress enacted the disability program in

1954 and 1956 and the SSI program in 1972,’ it specified

that a disability claimant under either program may obtain

judicial review of the Secretary’s “final” decision rendered

after a hearing, in the same manner “as is provided in sec-

tion 405(g)” (see 42 U.S.C. (& Supp. III) 421(d),

1383(c)(3)). In view of the long-established rule under Sec-

tion 405(g) that a claimant must obtain a decision by the

Appeals Council before seeking judicial review, Con-

gress’. express incorporation into the disability programs

of the finality requirement and other procedures under

Section 405(g) constitutes a clear directive that the same

exhaustion rule is to be applied under those programs. See

Lindahl v. OPM, 470 U.S. 768, 782 & n.15 (1985);

Lorillard v. Pons, 434 U.S. 575, 580-581 (1978).

Congress’s general adherence to the exhaustion require-

ment in 42 U.S.C. 405(g) was confirmed by the Social

Security Disability Benefits Reform Act of 1984. The

Senate Report, in connection with its discussion of the

“medical improvement” issue that ultimately was resolved

by Section 2 of the 1984 Act (see page 8, supra), explains

the jurisdictional principles that govern judicial review

under the disability programs. See S. Rep. 98-466, 98th

Cong., 2d Sess. 13-17 (1984). The Senate Report reflects a

clear understanding that the exhaustion rules prescribed

by governing regulations and Sa/fi and Ringer are fully ap-

plicable to the disability programs and that an Appeals

Council decision is a prerequisite to judicial review. S.

Rep. 98-466, supra, at 15. Congress did not disturb

’ Social Security Amendments of 1954, Pub. L. No. 761, § 106, 68

Stat. 1079; Social Security Amendments of 1956, Pub. L. No. 880,

§ 103, 70 Stat. 815; Social Security Amendments of 1972, Tit. III,

Pub. L. No. 92-603, 86 Stat. 1465 ef seg.

the general operation of those settled principles in 1984,

although it did carve out a limited exception for “medical

improvement” cases. See page 20, infra. Against this

background, “it would be an unwarranted judicial intru-

sion into this pervasively regulated area” (Heckler v..Day,

467 U.S. 104, 119 (1984)) for a court, in the absence of the

most compelling reasons, to excuse a claimant from his

procedural default in failing to pursue his administrative

remedies as a precondition to judicial review.*®

c. The court of appeals’ decision in this case wholly

fails to respect these governing principles. The named class

representative, respondent Polaski, did exhaust her ad-

ministrative remedies and, hence, the courts below properly

took jurisdiction of her individual claim. But those courts

had no authority under Section 405(g) to grant relief to the

thousands of unnamed class members who, unlike

Polaski, did not exhaust their administrative remedies by

obtaining decisions from the Appeals Council. This Court

repeatedly has held that a class may be certified in an ac-

tion under 42 U.S.C. 405(g) only if each of the class

members individually satisfies the requirements of that

* This conclusion is reinforced by the fact that where Congress has

concluded that disability claimants might experience undue financial

hardship while they pursue their administrative remedies, it never-

theless has declined to dispense with the exhaustion requirement. In-

stead, Congress has enacted provisions permitting certain claim-

ants —those who previously had been receiving benefits and might

have become dependent upon them, but who were found by the state

agency no longer to be disabled—to continue to receive benefits

through the ALJ hearing stage. See 42 U.S.C. (Supp. II) 423(g). In all °

other circumstances, however, Congress has continued to regard a

retroactive award of benefits at a later stage of the administrative and

judicial review process to be a fully adequate remedy for an erroneous

denial of benefits at a preliminary stage of that process. See Mathews

v. Eldridge, 424 U.S. at 339-340.

Section, including the “final decision” requirement.

Califano v. Yamasaki, 442 U.S. 682, 701, 704 (1979);

Mathews v. Diaz, 426 U.S. 67, 71_n.3 (1976); Salfi, 422

U.S. at 764. Indeed, the fact that Polaski exhausted her

administrative remedies suggests that similarly-situated

claimants could have done the same if they truly wished to

challenge the denial of their claims. Instead, those un-

named class members elected to forgo the opportunity to

seek further review after they were expressly notified of

their right to do so. As a result, not only did they fail to

obtain the “final decision” of the Secretary that is a

precondition to judicial review; the state-agency or ALJ

decisions denying their claims also became binding against

them on the merits and now have res judicata effect. See

pages 2-3, supra.

2. a. The court of appeals, without referring to the

foregoing considerations, believed that its order requiring

the reopening of the closed cases of the unnamed class

members could be justified on the authority of City of

New York. The court of appeals was mistaken. This Court

rested its holding in City of New York on the “unique cir-

cumstances” of that case (slip op. 17). Specifically, the

Court relied on the district court’s finding that there had

been a “systemwide, unrevealed policy that was inconsis-

tent in critically important ways with established regula-

tions” (ibid.). And the Court also observed that “exhaus-

tion would have been futile” in view of the fact that the

secret policy “was being adhered to by state agencies due

to pressure from SSA” (ibid.).

None of these factors upon which the Court relied in City

of New York is present here. The policy challenged by

respondents was not “unrevealed” or secret; it was em-

bodied in a published regulation and Social Security Rul-

ing. There accordingly can be no suggestion here, as there

was in City of New York, that “secretive conduct” by

the government might have lulled claimants into inactivity,

inducing them to abandon attempts to seek administrative

review of “a policy they could not know existed” (slip op.

12-13, 14). In further contrast to City of New York, the

court below held that the policies challenged here were

lawful and had been ratified by Congress (App. 18a-19a).

The court of appeals had no authority to order circuit-

wide reopening of claims in the absence of any finding of

an unlawful circuit-wide policy.

The agreement between the parties that was approved

by the court of appeals in July 1984 did state that “some

adjudicators” had misinterpreted the Secretary’s policies

regarding the evaluation of pain that were embodied in

SSR 82-58. However, this Court made unambiguously

clear in City of New York that such allegations do not per-

mit a court to dispense with the exhaustion requirement

even in an individual case (slip op. 16-17):

This case is materially distinguishable from one in

which a claimant sues in district court, alleging mere

deviation from the applicable regulations in his par-

ticular administrative proceeding. In the normal

course, such individual errors are fully correctable

upon subsequent administrative review since the

claimant on appeal will alert the agency to the alleged

deviation. Because of the agency’s expertise in ad-

ministering its own regulations, the agency ordinarily

should be given the opportunity to review application

of those regulations to a particular factual context.

Thus, our holding today does not suggest that exhaus-

tion is to be excused whenever a claimant alleges an ir-

regularity in the agency proceedings.

A fortiori, in a class action, allegations that errors may

have occured in some individual cases do not permit a

court to dispense with the exhaustion requirement for all

class members.?

® Indeed, once the court of appeals concluded that the pain regula-

tion and the SSR that the plaintiffs challenged were facially valid,

b. The court of appeals also sought to support its

result by theorizing that class members “may suffer ir-

reparable injury” unless the Secretary reopened their

claims (App. 2a). But this rationale likewise draws no sup-

port from City of New York. In excusing exhaustion

there, the Court relied upon the district court’s finding

that the mentally impaired class members “not only were

denied the benefits they were seeking, but ‘[t]he ordeal of

having to go through the administrative appeal process

may trigger a severe medical setback’ ” (slip op. 15 (cita-

tion omitted)). Compare FTC v. Standard Oil Co., 449

U.S. 232, 242, 244 (1980). In this case, by contrast, neither

court below found that pursuit of the administrative

review process would itself cause harm to the instant plain-

tiffs. Rather, the “irreparable injury” cited by the court of

appeals (App. 23a-24a) flowed from the facts that those

individuals voluntarily elected not to pursue their claims

and that their claims (unless reopened) were now barred by

res judicata. But if the adverse financial consequences

flowing from the denial of one’s claim — consequences that

any disability claimant might allege—were sufficient to

dispense with exhaustion, the “final decision” requirement

in 42 U.S.C. 405(g) would be nugatory in disability cases.

Congress clearly did not intend that result when it incor-

porated 42 U.S.C. 405(g) and its well-established exhaus-

tion requirement into the disability and SSI programs.

For similar reasons, the court of appeals’ passing obser-

vation that it was merely requiring that claims be re-

opened, not that benefits be paid (App. 2a), is not in itself

a basis for dispensing with the exhaustion requirement. If

it were, no decision denying benefits would ever become

each individual class member’s entitlement to benefits necessarily

turned on the facts of his own impairment. As a result, there was no

longer a question of law or fact common to the members of the class,

and the case should not have been permitted to proceed as-a class

action. See Fed. R. Civ. P. 23(a)(2).

final. This Court in City of New York did observe that the

legal argumenis presented there were “collateral” to any

claim for benefits in the sense that the class members were

not actually seeking an award of benefits, but were seeking

to challenge a policy that improperly had tainted the ad-

ministrative decision-making process. Slip op. 15. In this

case, by contrast, the court of appeals has held that the

Secretary’s policies governing the evaluation of pain were

both published and lawful. The instant plaintiffs thus ad-

vance no claim that is collateral in any sense to their claims

for benefits; they simply wish to argue that a particular

State-agency decision-maker or ALJ may have erred in

deciding their particular cases. Moreover, in City of New

York, the Court did not rest its exhaustion ruling on the

mere fact that the claimants were not actually requesting

an award of benefits. See slip op. 16-17.

In sum, the court of appeals was obligated on remand

for reconsideration in light of City of New York to define

the “unique circumstances” that distinguished the instant

case from the “vast majority of cases” in which exhaustion

would be required. See slip op. 18. The court of appeals

made no effort to do so. It decision on remand is thus in-

consistent with the reasoning and result of this Court’s

decision. !®

stated on petition for certiorari on the prior occasion that “the exhaus-

tion issue in this case was essentially identical to that presented to the

Supreme Court in [City of New York]” (App. 2a). However, an ex-

planation that two cases present some of the same general issu@of law

is standard in requesting the Court to hold a petition in one case for

the decision in the other. Moreover, in a passage the court below

ignored, the prior certiorari petition in this case (85-55 Pet. 14) argued

that the Eighth Circuit decision was more “egregious” than that of the

Second Circuit in City of New York because the Eighth Circuit did not

even find any unlawful policy. In any event, this Court did not simply

deny the Secretary’s prior certiorari petition in this case, as it

presumably would have done if it believed that this case was con-

trolled by its decision in City of New York; instead, the Court vacated

and remanded for further consideration in light of City of New York.

3. If there could be any doubt about the impropriety

of the reopening relief ordered by the court of appeals, it is

dispelled by the Social Security Disability Benefits Reform

Act of 1984. In order to resolve the controversy over the

“medical improvement” issue, Congress directed in Sec-

tion 2(d) of the Act that numerous claims raising that issue

be remanded to the Secretary for readjudication under the

new statutory standards, even if the individuals involved

had not exhausted their administrative remedies. See H.R.

Conf. Rep. 98-1039, 98th Cong., 2d Sess. 27 (1984); S.

Rep. 98-466, supra, at 14. The claims of the terminated

beneficiaries in this case—including that of the class

representative — were duly remanded under this provision.

See page 8, supra. But Congress did not enact such special

reopening relief for any other category of claimants, such

as the new-applicant class members here who made allega-

tions of pain. Indeed, Congress could not possibly have

envisioned reopening relief for class members making such

allegations, since Congress in 1984 explicitly ratified the

Secretary’s policies in that respect.

It is in fact Congress’s ratification of the Secretary’s

policies regarding pain that distinguishes the instant case

most pointedly from City of New York. The City of New

York case involved the Secretary’s policies for the evalua-

tion of mental impairments, and Congress in 1984 strongly

criticized those policies. The House Report noted that the

courts had raised serious questions about the Secretary’s

mental impairment standards and that “in many cases in-

dividuals ha[d] been improperly denied benefits” (H.R.

Rep. 98-618, 98th Cong., 2d Sess. 15 (1984)). Accordingly,

in Section 5 of the 1984 Act (98 Stat. 1801-1802), Congress

directed the Secretary to develop new standards for the

evaluation of mental impairments, imposed a temporary

moratorium on the continuing review of such claimants,

and permitted mentally impaired individuals whose claims

were denied to reapply for benefits under the new stand-

ards. See City of New York, slip op. 18 n.14; H.R. Rep.

98-618, supra, at 15-16; H.R. Conf. Rep. 98-1039, supra,

at 30-31.

By contrast, as the court of appeals held (App.

19a-20a), Congress in the 1984 Act explicitly approved the

Secretary’s policies regarding the evaluation of pain and

signaled its intent to terminate litigation then pending on

the subject. The Senate Report stated that “[i]t has come

to the attention of the Committee that there are a number

of outstanding court cases which are challenging the cur-

rent policies of the Administration concerning the weight

to be attached to the claimant’s subjective allegations con-

cerning pain” (S. Rep. 98-466, 98th Cong., 2d Sess. 23-24

(1984)). The instant litigation and the Hyatt litigation in

the Fourth Circuit (see pages 22-23, infra)—two major

class actions involving thousands of claimants—no doubt

were the principal such cases that the Committee had in

mind.'' The Senate Report, however, expressed strong

' disapproval of these cases (ibid.), stating that the

Secretary’s regulations concerning pain

should receive appropriate deference by the courts.

However, if courts ignore the Secretary’s regulatory

authority and the expressed Congressional concerns

for careful administration, national uniformity, and

verifiable evidence, the Committee has little choice

but to draw the statute as narrowly as possible. For

this reason, the Committee has included in the

Statutory rules for determining disability a specific

rule for evaluating subjective allegations of pain. It is

the clear intention of the Committee that this rule

should be seen as a codification of the regulations and

policies currently followed by the Administration.

Other aspects of the legislative history reiterate this inten-

tion to prevent judicial intrusion into the Secretary’s

'' See S. Rep. 98-466, supra, at 45 (additional views of Senator

Long) (strongly criticizing the district court’s ruling “{iJn a recent case,

Polaski v. Heckler’).

evaluation of pain.'? The court of appeals’ order that the

Secretary readjudicate claims that were processed under

the very policies that Congress endorsed flies in the face of

this congressional judgment.

4. The practical significance of the exhaustion issue

presented in this case is illustrated by the dimensions of the

litigation on the subject in the lower courts. In addition to

affecting some 8000 claims in this case alone, the Eighth

Circuit’s ruling presumably also will control the exhaus-

tion issue in a similar class action in Missouri involving an

estimated 9500 claims. Boyd v. Heckler, Civil No.

83-0352-CV-W-1 (W.D. Mo.). In another class action

challenging the Secretary’s approach to the evaluation of

'2 See 130 Cong. Rec. H9834 (daily ed. Sept. 19, 1984) (remarks of

Rep. Rostenkowski):

The final bill also contains more explicit language concerning

pain, which we hope will resolve pending litigation until the

Social Security Subcommittee reviews a mandated study and

report.

Id. at S11458 (remarks of Sen. Long):

Instead of granting deference to the Secretary’s inherent

regulatory authority to determine the criteria for establishing

disability, a number of courts have chosen to substitute their

policy judgment that subjective allegations must be considered

even in the absence of objective evidence of the type required by

regulation. Ultimately, this would mean that eligibility would de-

pend upon the subjective credibility judgment made by each in-

dividual adjudicator of claims. This is not much different from

turning over the trust funds to the judges and letting them hand

out the funds on a case-by-case basis as they see fit.

H.R. Rep. 98-618, supra, at 14:

The committee is * * * reluctant at this time to allow deter-

minations of disability to be based on such subjective criteria.

There is plainly a critical need for a clear legislative policy, to be

applied in all cases on a nationwide basis; it is not appropriate for

the Federal courts to establish policy on such an issue simply

because the statute is insufficiently specific.

See also H.R. Conf. Rep. 98-1039, supra, at 28-29.

pain, the Fourth Circuit has required the reopening of the

claims of an estimated 80,000 class members who likewise

abandoned their claims at the preliminary stages of the ad-

ministrative review process. Hyatt v. Heckler, 807 F.2d

376 (4th Cir. 1986). We have been informed by the Depart-

ment of Health and Human Services that there are about

30 other class actions currently pending under the disabili-

ty programs that raise similar exhaustion issues. In one of

those cases, a district court in New York has rendered a

decision that, when implemented, will require the reopen-

ing of an estimated 80,000 claims. New York v. Bowen,

No. 83 Civ. 5903 (RLC) (S.D.N.Y. Jan. 21, 1987).

We believe that these decisions manifest a serious

misapprehension of this Court’s holding in City of New

York. The Court there recognized an extraordinary excep-

tion to the exhaustion requirement, but the lower courts in

the wake of that decision have begun to expand that excep-

tion to a point where it swallows the rule. Although there

is as yet no conflict among the circuits on this issue, we

think it appropriate for the Court to act now to stem a

trend of decisions that threaten to undermine adminis-

trative finality on a truly staggering scale. The instant

case, which the Court previously vacated for reconsidera-

tion in light of City of New York, is a suitable vehicle for

addressing this important question. ; ;

® CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.