Amicus Curiae Brief — Sims v. Apfel

No. 98-9537

IN THE

SUPREME COURT OF THE UNITED STATES

JUATASSA SIMS,

Petitioner,

v.

KENNETH S. APFEL,

Commissioner of Social Security,

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF AMICI CURIAE OF AARP;

NOSSCR; ET AL.;

IN SUPPORT OF PETITIONER

(Additional Amici continued on inside cover)

ROBERT E. RAINS ROCHELLE BOBROFF*

PROFESSOR OF LAW AARP FOUNDATION

THE DICKINSON SCHOOL LITIGATION

of LAW

THE PENNSYLVANIA STATE MICHAEL SCHUSTER

UNIVERSITY AARP

150 South College Street 601 E Street, NW

Carlisle, PA 17013 Washington, DC 20049

(717) 240-5241 (202) 434-2060

*Counsel of Record

Counsel for Amici Curiae

(Additional Amici)

National Organization of Social Security

Claimaints’ Representatives (NOSSCR);

American Network of Community Options and

Resources (ANCOR);

The Arc of the United States;

Family Voices-New Jersey;

Iowa Protection and Advocacy Systems (NAPAS);

National Association of Protection and Advocacy

Systems (NAPAS);

National Senior Citizens Law Center (NSCLC);

Statewide Parent Advocacy Network of New Jersey

TABLE OF CONTENTS

TABLE OF ALTER EMD ccc cccccccccccccccccces ill

INTERESTS OF AMICI CURIAE .... 2.6.66 cc cc ceeeee l

SUMMARY OF THE ARGUMENT ................. 2

SEED Soc coccccnncecoececscecssceoeseceses 5

I. BECAUSE OF ITS LIMITED RESOURCES,

SSA’S APPEALS COUNCIL PROVIDES

NO MORE THAN A CURSORY

REVIEW TO THE VAST MAJORITY

OF CASES THAT COME BEFORE IT ... 4

Il. AN ISSUE EXHAUSTION REQUIRE-

MENT IS OFTEN FUTILE, SINCE SSA

REFUSES TO ALLOW ITS ADMINISTRA-

TIVE APPEALS JUDGES TO APPLY

CONTROLLING CASE LAW .......... 8

Ill. SOCIAL SECURITY AND SSI

CLAIMANTS HAVE NOT RECEIVED

PROPER NOTICE PURSUANT TO THE

DUE PROCESS CLAUSE REGARDING

ISSUE EXHAUSTION ............... 14

IV. DISABLED CLAIMANTS ARE LIKELY TO

SUFFER HARM IF COURTS REFUSE TO

CONSIDER MERITORIOUS ISSUES THAT

HAVE NOT BEEN RAISED AT

THE APPEALS COUNCIL ............ 22

GEE Snechedcnncunesecedcsdessukioben 25

APPENDIX

Interests of Amici Curiae ................... Al

a oe

iii

TABLE OF AUTHORITIES

CASES

Armstrong v. Manzo,

PPD cbccncdkbenescencssccens 21

Bowen v. City of New York,

SED ctnckécdsaccnceens 4, 23, 25

Harwood v. Apfel,

186 F.3d 1039 (8th Cir. 1999) ............... 20

Johnson v. Apfel,

189 F.3d 561 (7th Cir. 1999) ............. 20, 21

Lopez v. Heckler,

713 F.3d 1432 (9th Cix. 1983), vacated,

CP ee SEE eecnccccscceccccceccces 24

Meanel v. Apfel,

172 F.3d 1111 (9th Cir. 1999) ............0.8. 20

Memphis Light, Gas and Water Division v. Craft,

I ct i ae cnet eeduennkens 3,15

Mullane v. Central Hanover Trust Co.,

ee ee desea duawed 14

Paul v. Shalala,

29 F.3d 208 (Sth Cir. 1994) ............... 18, 19

iv

Polaski v. Heckler,

751 F.2d 943 (8th Cir. 1984), vacated,

Se SEE wcducousdedsonccecvedes 24

Richardson v. Perales,

Se cecaceecessese 15, 16, 20, 21

Schaudeck v. Commissioner of SSA,

181 F.3d 429 (3rd Cir. 1999) ............. 13,14

Schweiker v. Chilicky,

ES ends ccc euuebonwuned 23

Sims v. Apfel,

No. 98-60126 (Sth Cir. Nov. 6, 1998) .......... 19

Sullivan v. Zebley,

Be eee 10

STATUTES AND REGULATIONS

Social Security Act (1999)

SEED ¢idcgcesncseseeeeecucnes 4

MN I ern 9,18

SEE cedsnunvenencedacteseseurete y

ee ee ET 9.64.04 cdicdeucsvedeons 4

Social Security Regulations (1999)

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ES cca tcccdedeasaseadcandades 8

BP Es occu cdccecececsccesoce 16

66 inked néndedveseseedes 16

A 040g eccnedendbedeuedenus 15

SP ET codbocscscctesececees 3, 16

es EE bvb. cbbkseececcccscast 3, 16

Vv

el 16

a couanied 16

EET 16

aa 17

TGP, BOOAIIG .. oo 5 ccc cccnccccccossces 16

co uccceseeaacs 17

ee 9,12

a caedeveds 21

nc cceueeutes 20

20 C.F.R. § Part 404, Subpart P, App.1,

ac a 13

I nics cw cnsecccesses 21

TEE 16

TOGO, BURBIOND ...o oon ccccccccccssccces 16

eR RE TES tae 15

TENE SS S TREAT 3, 16

Sa 3, 16

TOGCUM. BOOEBOED .... once cccccccccccecs: 16

TOCPM. BARGIED ....o ccc cccccccsccccscs 16

be 16

ee eee 17

ee ne 16

SR eee 17

ee eee 9,12

SR EE a 20

I i ce seccdeues 6,17

52 Fed. Reg. 49141 (1987)

(codified at 1 C.F.R. § 305.87-7) ............... 5

58 Fed. Reg. 28596 (May 14, 1993) ................. 16

61 Fed. Reg. 34470 (July 2, 1996) ..............000. 11

vi

64 Fed. Reg. 57687 (October 26, 1999)... ............ 12

MISCELLANEOUS

Acquiescence, Hearing before the House Judiciary

Committee, Subcommittee on Commercial and

Administrative Law (Oct. 27, 1999) ............ ll

Hearing on H.R. 1294 Before the Subcommittee on

Commercial and Administrative Law of the House

Committee on the Judiciary (Sept. 16, 1999) .... 12

Carolyn Kubitschek, Social Security Administration

Nonacquiescence: The Need for Legislative Curbs

on Agency Discretion, 50 U. Pitt L. Rev. 399

GE <6 06 ewudnéanennnsecs chenebdidesctcke 23

Charles H. Koch, Jr. & David A. Koplow, The Fourth Bite of

The Apple: A Study of the Operation and Utility of

The Social Security Administration's Appeal Council,

17 Fla. St. U. L. Rev. 199 (1990) .............. 5

Disability Oversight, Committee on Ways and Means,

Subcommittees on Social Security and Human

Resources (Oct. 21, 19FF) ..ccccccccccccccccss 7

Form HA-520, Social Security online (last modified Jan. 18,

2000) <http://www.ssa.gov/online/ha-520.pdf> ... . . 17

Jon C. Dubin, Torquemada Meets Kafka: The Misapplication

of the Issue Exhaustion Doctrine to Inquisitional

Administrative Proceedings, 97 Columbia L. Rev.

CP EUIDUD Scccdseaveccddicccknoviwes 7, 8, 20

> ore eer" —

Vii

OFFICE OF HEARINGS AND APPEALS, SOCIAL SECURITY

ADMINISTRATION, KEY WORKLOAD INDICATORS

HEARINGS - APPEALS - CIVIL ACTIONS - ATTORNEY

FEES (1999) ...

pSeececocvececoseceseces 5, 6, 7

Matthew Diller & Nancy Morawetz, /ntracircuit

Nonacquiescence and the Breakdown of the Rule of

Law: A Response to Estreicher and Reversz,

GP TD Eads Bie CRUSE ce cccvcdccccccscccces 22

Memorandum from Social Security Administration, Office

of the General Counsel, Legal Foundations of the

Duty of Impartiality in the Hearing Process and its

Applicability to Administrative Law Judges 5-6 (Jan.

28, 1997) .....

Richard Posner, THE FEDERAL COURTS, CRISIS AND

REFORM (1985)

—_——— - ms

SSS es. et roe

No. 98-9537

IN THE

SUPREME COURT OF THE UNITED STATES

JUATASSA SIMS,

Petitioner,

v.

KENNETH S. APFEL,

Commissioner of Social Security,

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF AMICI CURIAE OF AARP;

NOSSCR; ET AL.;

IN SUPPORT OF PETITIONER

INTERESTS OF AMICI CURIAE”

This amici curiae brief is submitted on behalf of

AARP, the National Organization of Social Security

Claimants’ Representatives (NOSSCR), the American

” This brief has been authored in its entirety by undersigned

counsel for the amici. No person or entity, other than the named

amici and their counsel, made any monetary contribution to the

preparation or submission of this brief.

2

Network of Community Options and Resources (ANCOR),

The Arc, Family Voices-New Jersey, lowa Protection and

Advocacy, Inc., the National Association of Protection and

Advocacy Systems (NAPAS), the National Senior Citizens

Law Center (NSCLC), and the Statewide Parent Advocacy

Network of New Jersey. The statement of interests of amici

is included in the appendix to this brief.

By written consent of the parties, amici curiae submit

this brief in support of Petitioner.”

SUMMARY OF THE ARGUMENT

In order to exhaust administrative remedies and seek

judicial review of a denial of Social Security or Supplemental

Security Income (SSI) benefits, a claimant must request

review from the Social Security Administration (SSA)

Appeals Council. The Appeals Council utilizes up to 55

adjudicators to handle over 100,000 cases per year. These

adjudicators usually devote no more than fifteen minutes to an

individual case, while claimants typically wait over a year to

receive a decision from the Appeals Council either denying or

granting a request for review.

Unless specifically authorized, the Appeals Council is

precluded by SSA regulations and policy from considering or

citing judicial authority, including circuit court precedent

within each circuit. The Appeals Council is required to

follow SSA’s interpretation of the Social Security Act and

regulations even when that interpretation has been undercut or

rejected by judicial precedent. Therefore, it is futile for

” Letters of consent from all parties have been filed separately with

the Clerk of the Court.

3

attorneys to bring rules of law or interpretations from relevant

case law to the attention of the Appeals Council.

The Due Process Clause of the United States

Constitution requires the government to inform affected

parties of the procedures to be followed for participation in

administrative proceedings. Memphis Light, Gas and Water

Division v. Craft, 436 U.S. 1, 14 (1978). SSA regulations

provide that claimants are required only to “request” Appeals

Council review and do not require the filing of briefs, a listing

of issues, or detailed legal statements before the Appeals

Council. 20 C.F.R. §§ 404.967, 404.968, 416.1467,

416.1468 (1999). Neither the regulations nor SSA’s own

form for requesting Appeals Council review inform claimants

that a failure to raise issues before the Appeals Council will

result in a waiver of those issues in court. Moreover, since

it is unlikely that a detailed legal statement would be read by

legal staff at the Appeals Council, it is unfair to impose issue

exhaustion on claimants who do not raise every legal issue

before the Appeals Council. If courts refuse to hear

meritorious legal claims regarding errors in denying benefits

because of the failure to raise these issues at the Appeals

Council, then individuals who are truly disabled (or otherwise

entitled to Social Security benefits) are likely to suffer

extreme hardship.

4

ARGUMENT

I. BECAUSE OF ITS’_ LIMITED

RESOURCES, SSA’S APPEALS COUNCIL

PROVIDES NO MORE THAN A

CURSORY REVIEW TO THE VAST

MAJORITY OF CASES THAT COME

BEFORE IT.

Congress has established two separate but interrelated

programs providing benefits to individuals who are disabled:

Social Security Disability Insurance (SSDI) under Title II of

the Social Security Act, 42 U.S.C. §§ 401-433 (1999), and

Supplemental Security Income (SSI) under Title XVI of the

Social Security Act, 42 U.S.C. §§ 1381-1383f (1999). The

administrative appeals process is identical for these two

programs.

SSA’s Appeals Council is the fourth and final

administrative step for claimants seeking disability benefits

under the Social Security Act.” Claims are considered first

on an initial application. A claimant denied benefits may seek

reconsideration. If denied again, a claimant may obtain a de

novo hearing before an SSA administrative law judge (ALJ).

If denied again, a claimant may request review of the hearing

decision by SSA’s Appeals Council as a prerequisite for

seeking judicial review in federal district court. Additionally,

the Appeals Council may perform “own motion” review of an

ALJ decision which is favorable to a claimant.

» See generally Bowen v. City of New York, 476 U.S. 467, 472

(1986).

5

Because it lacks sufficient resources, the Appeals

Council is often not able to provide meaningful review of the

denial of benefits. Over a decade ago, an exhaustive study

performed under the auspices of the Administrative

Conference of the United States (ACUS) resulted in the

conclusion that the Appeals Council was deeply flawed and

not performing to anyone’s satisfaction because the size of the

then current caseload defied effective management.* At the

time of that study, by Fiscal Year (FY) 1988, the Appeals

Council was receiving annually approximately 81,500 requests

for review.2 By FY 1999, that figure had swelled to over

115,000.°

In 1987, the ACUS review suggested that in a typical

case, members of the Appeals Council examine the paper

record for less than 15 minutes.” But even this admittedly

* See Charles H. Koch, Jr. & David A. Koplow, The Fourth Bite

of The Apple: A Study of the Operation and Utility of The Social

Security Administration’s Appeal Council, 17 FLA. ST. U. L. REV.

199, 202 n.1, 318-319 (1990).

¥ Id. at 242 n.233.

* OFFICE OF HEARINGS AND APPEALS, SOCIAL SECURITY

ADMINISTRATION, KEY WORKLOAD INDICATORS HEARINGS -

APPEALS - CIVIL ACTIONS - ATTORNEY FEES ("KEY WORKLOAD

INDICATORS") 19 (1999).

” See Administrative Conference of the United States, A New Role

for the Social Security Appeals Council, 52 Fed. Reg. 49141,

49143 (1987) (codified at 1 C.F.R. § 305.87-7). Even though the

Appeals Council considers every request for review, it only awards

benefits in appreximately 2% of cases and remands approximately

(continued...)

6

cursory handling of cases by the Appeals Council in 1987

was better than the current situation, as requests for review

climbed by well over 50% between FY 1993 and FY 1999.®

The figures reveal the inevitable reality of the scarce

amount of time devoted to an individual case at the Appeals

Council level. In FY 1998, the Appeals Council disposed of

approximately 100,000 cases.” The legal staffing at the

Appeals Council consists of positions for 30 Administrative

Appeals Judges (AAJs) and 25 Appeals Officers (AOs).

Thus even when all of these positions are filled, there are only

55 adjudicators, who if they act singly each decides over

1,800 cases per year. Although the AAJs and AOs also have

staff analysts to assist them, staff analysts are not required to

be attorneys.

As the time spent by adjudicators at the Appeal

Council per case has diminished, the overall processing time

? (...continued)

18% of cases. When a request for review is denied, it is extremely

unlikely that the Appeals Council will have carefully considered

legal objections raised by claimants. Richard Posner, THE

FEDERAL COURTS, CRISIS AND REFORM 161 (1985). It is normal

practice for the Appeals Council not to provide any explanation

when it denies review.

® KEY WORKLOAD INDICATORS, supra note 6, at 19.

2 Id.

1’ The AOs have authority, on their own, only to deny requests for

review, not to grant them. 20 C.F.R. § 422.205(c) (1999). A

minimum of two AAJs are required to review a case when a request

for review has been granted. 20 C.F.R. § 422.205(b) (1999).

7

has skyrocketed. In FY 1994, the average processing time in

the Appeals Council was 126 days. By FY 1998, that figure

was 417 days, and incomplete data for FY 1999 showed an

average wait of 441 days.’ Commissioner Apfel recently

testified that claimants now must “wait more than a year for

an Appeals Council decision....””

Meanwhile, during the period of FY 1993 to FY 1998,

as receipts of requests for review rose and time spent per case

fell, the percentage of cases in which the Appeals Council

reversed the denial of benefits dropped from 3.3% to 2.1%.”

Given the low number of legal staff, the most likely

persons to read legal arguments filed at the Appeals Council

are the analysts, who generally are not lawyers. The analysts

are responsible for reviewing hearing tapes and medical

records of more than 100,000 claimants per year.

Moreover, the Appeals Council generally does not

respond to claimants’ arguments when a request for review is

denied.“ Instead, typical denial notices consist of boilerplate

4’ KEY WORKLOAD INDICATORS, supra note 6, at 23.

Disability Oversight, Committee on Ways and Means,

Subcommittees on Social Security and Human Resources 7 (Oct.

21, 1999)(statement of Kenneth S. Apfel).

’ KEY WORKLOAD INDICATORS, supra note 6, at 23. During the

same period, Appeals Council remands dropped from 27% to

18.3%. Id.

# Jon C. Dubin, Torquemada Meets Kafka: The Misapplication of

the Issue Exhaustion Doctrine to Inquisitional Administrative

(continued...)

language that does not inform the claimant or the reviewing

court of the Appeals Council’s reasoning but only states that

the request has been denied. For the vast majority of cases

reaching the courts, the ALJ decision from over a year earlier

provides the only explanation of the agency’s rationale. The

first opportunity for meaningful review of legal challenges to

the ALJ’s reasoning arises in court, although judicial review

may not be obtained until the Appeals Council has denied the

claimant’s request for review.

Il. AN ISSUE EXHAUSTION REQUIRE-

MENT IS OFTEN FUTILE, SINCE SSA

REFUSES TO ALLOW ITS

ADMINISTRATIVE APPEALS JUDGES

TO APPLY CONTROLLING CASE LAW.

Because SSA will not allow its judges and appeals

officers to apply federal court decisions directly, the Appeals

Council generally will not consider legal arguments based on

case law. At the administrative level, Social Security law is

comprised of detailed SSA regulations promulgated in the

Federal Register and annually codified in Title 20 C.F.R.

Parts 400-499, as well as less generally known sub-regulatory

authority such as Social Security Rulings (SSRs), the

(.. continued)

Proceedings, 97 COLUMBIA L. REV. 1289, 1329 (1997) (citing

letter from William C. Taylor, Executive Director, Office of

Council, to Nancy Shor, Executive Director, National Organization

of Social Security Claimants’ Representatives 1 (July 28, 1995)(on

file with the Columbia Law Review)).

& See 20 C.F.R. § 402.35(b) (1999).

‘

— Ste eopw ied

9

Hearings, Appeals and Litigation Law (Lex) (HALLEX)

Manual, and the Program Operations Manual System

(POMS). At the level of federal court review, it is comprised

of an enormous body of case law. West’s United States Code

Annotated lists 1,626 headings for annotations to 42 U.S.C.

§ 405, “Evidence, procedure and certification for payments,”

as well as 428 headings for annotations to 42 U.S.C. § 423,

“Disability insurance benefit payments.”

SSA instructs its administrative judges to adhere to the

regulations and Social Security rulings but not to apply

judicial holdings to cases before them. SSA’s Office of the

General Counsel has advised ALJs that they are “bound to

follow Agency Policy even if, in the ALJ’s opinion, the policy

is contrary to law.”

Instead of permitting its administrative judges to apply

case law, SSA reviews decisions of the Courts of Appeals. If

SSA determines that a decision conflicts with SSA’s

interpretation of the Social Security Act or regulations, and if

it chooses not to seek further judicial review of the decision,

then SSA will issue an “Acquiescence Ruling.” The

Acquiescence Ruling explains how SSA and its personne! will

apply the judicial decision. 20 C.F.R. §§ 404.985(a), (b),

416.1485(a), (b) (1999).

Such Acquiescence Rulings are issued as Social

Security Rulings which are binding on all components of SSA,

1’ Memorandum from Social Security Administration, Office

of the General Counsel, Legal Foundations of the Duty of

Impartiality in the Hearing Process and its Applicability to

Administrative Law Judges 5-6 (Jan. 28, 1997).

including the AAJs and AOs of the Appeals Council.” policy when adjudicating other claims

Therefore, SSA personnel are allowed to cite the within that district court’s jurisdiction

Acquiescence Ruling (if there is one), not to apply the case. unless the court directs otherwise .12

Indeed, Social Security Ruling (SSR) 96-1p explicitly states

SSA's purposes as follows: The General Counsel of SSA recently defended this

Purpose: To clarify longstanding policy

that, unless and until a Social Security

Acquiescence Ruling (AR) is issued

determining that a final circuit court

holding conflicts with the Agency’s

interpretation of the Social Security Act

or regulations and explaining how SSA

will apply such a holding, SSA

decisionmakers continue to be bound

by SSA’s nationwide policy, rather

than the court’s holding, in

adjudicating other claims within that

circuit court’s jurisdiction. This

Ruling does not in any way modify

SSA’s acquiescence policy to which the

Agency continues to remain firmly

committed, but instead serves to

emphasize consistent adjudication in

the programs SSA administers. This

Ruling is also issued to clarify

longstanding Agency policy that,

despite a district court decision which

may conflict with SSA’s interpretation

of the Social Security Act or

regulations, SSA Adjudicators will

continue to apply SSA’s nationwide

“’ Id. See Sullivan v. Zebley, 493 U.S. 521, 530 n.9 (1990).

policy in testimony in opposition to a bill to require SSA

adjudicators to follow circuit court precedent, stating:

By requiring each of the more than 32,000

individuals who rule on SSA claims (including,

but not limited to, ALJs) to individually apply

their own interpretation of Court of Appeals

decisions without guidance from _ the

Commissioner, would greatly undermine the

fairness and consistency in our decisionmaking

process.

If each of SSA’s thousands of decisionmakers

were responsible for interpreting circuit court

holdings, it could result in conflicting decisions

by different decisionmakers, even within the

same office.”

SSA’s regulation explicitly states that it “will release

an Acquiescence Ruling for publication in the Federal Register

for any precedential circuit court decision that we determine

contains a holding that conflicts with our interpretation of a

18 61 Fed. Reg 34470 (July 2, 1996).

12 See generally Acquiescence, Hearing before the House Judiciary

Committee, Subcommittee on Commercial and Administrative Law

(Oct. 27, 1999)(statement of Arthur J. Fried, Office of General

Counsel, Social Security Administration).

12

provision of the Social Security Act or regulation no later

than 120 days from receipt of the court’s decision.” 20 C.F.R.

§$§ 404.985(b)(1), 416. 1485(b)(1) (1999)(emphasis supplied).

Interestingly, in his testimony, SSA’s General Counsel

repeatedly referred to this provision as setting a goal of

publishing Acquiescence Rulings within 120 days, and he

claimed that SSA is complying with this goal.”

SSA has been justly criticized both for taking a very

limited view of when circuit court rulings conflict with its

own interpretation and for failing to issue Acquiescence

Rulings in a timely fashion.’ There are significant practical

ramifications resulting from SSA’s limited policy of

acquiescence. If an attorney believes that a federal court

precedent compels the overturning of an ALJ decision denying

a Client benefits, it is futile for the attorney to raise that

precedent to the Appeals Council which is forbidden to apply

it.

® Id.

2 Indeed, on October 26, 1999, the day before SSA’s General

Counsel testified that SSA is meeting its “goal” of issuing

Acquiescence Rulings within 120 days, the agency issued

Acquiescence Ruling 99-4(11), acquiescing in a circuit court

decision handed down sixteen and a half years earlier, in April

1983. 64 Fed. Reg. 57687-57689 (Oct. 26, 1999). See generally

Hearing on H.R. 1294 Before the Subcommittee on Commercial

and Administrative Law of the House Committee on the Judiciary

(Sept. 16, 1999)(statement of the Hon. Walter K. Stapleton of the

United States Court of Appeals for the Third Circuit, on behalf of

the Judicial Conference of the United States, and statement of John

H. Pickering, on behalf of the American Bar Assoc.).

13

Moreover, issue exhaustion only makes sense when the

administrative and judicial forums are applying the same leyal

standard. Yet, SSA forbids the Appeals Council from

applying cases which have not been addressed in an

Acquiescence Ruling, while district courts within a circuit are

required to follow their circuit court’s decisions as soon as

they are issued. When the administrative proceeding is

actually applying different legal standards than the reviewing

court, counsel may seek to frame the case quite differently in

the two forums. The claimant should not be precluded from

reformulating the relevant issues when the case reaches the

district court.

The practical problems caused by SSA’s limited

acquiescence in circuit court rulings are best illustrated

through an example. Under SSA’s regulations, a person who

is terminally ill with Hodgkin’s disease will be entitled to

benefits if he can show that the disease is “not controlled by

prescribed therapy.” On June 25, 1999, the United States

Court of Appeals for the Third Circuit decided a case in which

SSA had denied benefits to a claimant with Hodgkin’s disease

because a nontreating doctor had reported that the claimant

was “responding to” chemotherapy. SSA argued to the circuit

court that when a person who suffers from Hodgkin’s disease

is “responding to” chemotherapy, the illness is “controlled by

the prescribed treatment.” The Third Circuit expressly

rejected that interpretation: “We hold that ‘control,’ as used

here, means that the treatment has been so successful that the

disease can be considered effectively neutralized.” Schaudeck

v. Commissioner of SSA, 181 F.3d 429, 432 (3rd Cir. 1999).

Now, 209 days later, SSA has neither issued an Acquiescence

Ruling regarding Schaudeck, nor sought review of Schaudeck

2 20 C.F.R. Part 404, Subpart P, App.1, Listing 13.06A (1999).

14

in this Court, despite the fact that the Third Circuit clearly

rejected SSA’s interpretation of its own regulation.

If counsel for a claimant residing within the Third

Circuit cited Schaudeck to any adjudicator at any level within

SSA, including the Appeals Council, that adjudicator would

be compelled by SSR 96-lp to ignore this clear precedent.

Indeed, Social Security Ruling 96-1p specifically prohibits any

adjudicator, including any AAJ, from applying the court’s

holding even if the claimant lives within the circuit. Since the

Appeals Council is precluded by SSA from following

Schaudeck, it would be unfair to bar judicial consideration of

this issue based on the claimant’s failure to raise the issue in

a request for Appeals Council review.

Ill. SOCIAL SECURITY AND _ SSI

CLAIMANTS HAVE NOT RECEIVED

PROPER NOTICE PURSUANT TO THE

DUE PROCESS CLAUSE REGARDING

ISSUE EXHAUSTION.

The Court has repeatedly held that when the

government conducts proceedings affecting the interests of

citizens, the government must inform affected parties of the

procedures to be followed for participation in these

proceedings. In Mullane v. Central Hanover Trust Co., 339

U.S. 306 (1950), the Court stated:

Anelementary and fundamental requirement of

due process in any proceeding which is to be

accorded finality is notice reasonably

calculated, under all the circumstances, to

apprise interested parties of the pendency of

15

the action and afford them an opportunity to

present their objections.

Id. at 314. Similarly, in Memphis Light, Gas and Water

Division v. Craft, 436 U.S. 1, 14 (1978), the Court stated that

the “purpose of notice under the Due Process Clause is to

apprise the affected individual of, and permit adequate

preparation for, an impending hearing.”

The Court has previously analyzed the Social Security

statute and regulations and concluded that:

there emerges an emphasis upon the informal

rather than the formal. This, we think, is as it

should be, for this administrative procedure,

and these hearings, should be understandable

to the layman claimant, should not necessarily

be stiff and comfortable only for the trained

attorney, and should be liberal and not strict in

tone and operation. This is the obvious intent

of Congress so long as the procedures are

fundamentally fair.

Richardson v. Perales, 402 U.S. 389, 400-401 (1971).

The Social Security regulations do not preclude the

claimant from raising new issues at any stage of the

administrative proceedings. The regulations provide that “any

party may raise a new issue” at a hearing before an ALJ,

“even though [the issue] arose after the request for a hearing

and even though it has not been considered in an initial or

reconsidered determination.” 20 C.F.R. §§ 404.946(b),

416.1446(b) (1999). Similarly, the Appeals Council may

review any “error of law” and “abuse of discretion by the

16

administrative law judge,” without consideration of whether

the claimant identified these issues during the initial,

reconsideration, and ALJ determinations. 20 C.F.R.

§§ 404.970(a), 416.1470(a) (1999).

The Social Security regulations provide that a

“request” is the only prerequisite to obtaining Appeals

Council review. 20 C.F.R. §§ 404.967, 404.968, 416.1467,

416.1468 (1999). The regulations further indicate that the

Appeals Council may review cases in which the claimant did

not request review and that the Appeals Council may identify

or limit issues to be addressed in its review. 20 C.F.R. §§

404.969, 404.973, 404.976(a), 416.1469, 416.1473,

416.1476(a) (1999). The regulations do not place any burden

on the claimant to conduct an exhaustive presentation of all

legal issues before the Appeals Council. Indeed, SSA

envisions that a request for review by the claimant will take

10 minutes to prepare. 58 Fed. Reg. 28596 (May 14, 1993).

Since a “request” is the only legal requirement to obtain

Appeals Council review, the regulations do not inform the

claimant that the failure to raise issues before the Appeals

Council will result in the waiver of those issues in court.

SSA's regulations explicitly provide that the Appeals

Council will "conduct the administrative review process in an

informal, non-adversarial manner." While the regulations

permit claimants to file a brief with the Appeals Council, 20

= The one exception is the requirement in the regulations for the

claimant to notify the ALJ if the claimant believes that the ALJ is

biased. 20 C.F.R. §§ 404.940, 416.1440 (1999).

20 C.F.R. §§ 404.900(b); 416.1400(b) (1999). See also,

Richardson v. Perales, 402 U.S. at 400.

17

C.F.R. §§ 404.975, 416.1475 (1999), the regulations do not

require claimants to do so. Instead, the regulations provide

that claimants may use Form HA-520 in order to request

Appeals Council review. 20 C.F.R. § 422.205 (1999).

This form provides three single spaced lines for the statement

of the issues and grounds for appeal. Like SSA regulations,

this form does not notify the claimant that issues which are not

raised before the Appeals Council will be waived.

The regulations provide that if the Appeals Council

denies review, the decision of the ALJ, not the Appeals

Council, is binding on the claimant. 20 C.F.R. §§ 404.981,

416.1481 (1999). Far from informing the claimant of issue

exhaustion, this regulation suggests that proceedings before

the Appeals Council, including any legal arguments presented,

are irrelevant when the Appeals Council denies review. The

regulations permit the filing of “an action in a Federal district

court within 60 days after the date [claimants] receive notice

of the Appeals Council action.” Jd. Thus, exhaustion only

requires that the claimants have requested review of the ALJ

hearing decision by the Appeals Council and have obtained a

notice from the Appeals Council that the requests were

denied.

The Social Security Act states:

The findings and decision of the

Commissioner of Social

Security after a hearing shall be

binding upon all individuals

®’ A copy of Form HA-520 may be found at Social Security online

(last modified Jan. 18, 2000) <http://www.ssa.gov/online/ha-

520.pdf>.

18

who were parties to such

hearing. No findings of fact or

decision of the Commissioner

of Social Security shall be

reviewed by any person,

tribunal, or governmental

agency except as_ herein

provided.

42 U.S.C. § 405(h) (1999). The Social Security Act does not

require any additional administrative review of the ALJ

hearing decision. Pursuant to the Commissioner’s power to

promulgate regulations, 42 U.S.C. § 405(a) (1999), he created

the Appeals Council. The role of the Appeals Council is

defined exclusively by regulation, not by statute. Therefore,

claimants should be able to rely upon the regulatory

instructions for presenting cases to the Appeals Council.

SSA admits that neither the Social Security Act nor the

implementing regulations require claimants to “raise an issue

before the agency in order to preserve the issue for judicial

review.” Brief for the Respondent in Opposition to the

Petition for Certiorari, (“Resp. Opp. Cert.”), Sims v. Apfel,

(No. 98-9537) at 6-7. SSA contends that Due Process was

Satisfied in this case, because it was “well-settled” by the

Fifth Circuit in cases such as Paul v. Shalala, 29 F.3d 208

(Sth Cir. 1994), that claimants were required to present their

contentions to the Appeals Council in order to preserve issues

for judicial review. Resp. Opp. Cert. at 9.

19

The Fifth Circuit held in Paul v. Shalala as well as in

the instant case’ that the court lacked jurisdiction to review

issues which had not been raised at the Appeals Council.

However, in this case and in other cases concerning issue

exhaustion in the Social Security context, SSA concedes that

courts do have jurisdiction to review legal issues which were

not raised before the Appeals Council. Resp. Opp. Cert. at

5, n.3. As explained by Chief Judge Posner of the United

States Court of Appeals for the Seventh Circuit, the

Commissioner conceded that when a claimant failed to brief

a particular issue before the Appeals Council, the claimant

nevertheless “did not fail to exhaust his administrative

remedies.” Johnson v. Apfel, 189 F.3d 561, 563 (7th Cir.

1999).

There is no dispute that the legal reasoning of the Fifth

Circuit was incorrect. Claimants who sought review by the

Appeals Council but did not raise specific legal issues have

nevertheless succeeded in exhausting their administrative

remedies. Therefore, courts have jurisdiction to review all

legal issues raised by claimants in federal court. Since the

opinions of the Fifth Circuit were based upon erroneous legal

reasoning, these decisions cannot provide constitutionally

adequate notice to claimants of the procedures to be followed

to preserve judicial review of legal issues.

SSA further asserts that petitioner’s attorney was

notified of the “judicial practice” of imposing issue exhaustion

by published case law in Courts of Appeals other than the

Fifth Circuit. Resp. Opp. Cert. at 5-9. However, SSA

concedes that there is a conflict among the Courts of Appeals

2% Sims v. Apfel, No. 98-60126, slip op. at 2 (5" Cir. Nov. 6,

1998).

20

regarding whether issue exhaustion applies in the context of

Social Security hearings. /d. at 10-11. Indeed, Chief Judge

Posner reversed previous Seventh Circuit decisions in ruling

that issue exhaustion is incompatible with the procedures of

the Appeals Council which he considered “more like a

complaint bureau than an appellate court.” Johnson v. Apfel,

189 F.3d at 563. See also, Richardson v. Perales, 402 U.S.

at 400 (SSA appeals procedures are informal). Far from

being “well-settled,” the judicial imposition of issue

exhaustion in the Social Security context has now been

rejected in two circuits. Johnson v. Apfel, 189 F.3d at 563;

Harwood v. Apfel, 186 F.3d 1039 (8th Cir. 1999).

Moreover, a substantial number of claimants are not

represented by attorneys~”’ and therefore cannot be expected

to sort through the maze of contradictory court opinions. SSA

now asserts that it will raise issue exhaustion only when

claimants have been represented by counsel or a lay

representative,’ and the Ninth Circuit seeks to apply issue

exhaustion only when claimants are represented by counsel.

Meanel v. Apfel, 172 F.3d 1111, 1115 (9th Cir. 1999). Amici

submit that such a trifurcated rule would undermine the

uniformity of a national benefits program and could even

serve to discourage attorneys from representing claimants

before the Appeals Council.

Since the Appeals Council operates informally, it is

unfair to apply issue exhaustion to any Social Security or SSI

2’ Dubin, supra note 14, at-1294 n.29.

® Resp. Opp. Cert. at 9. Claimants may be (and often are)

represented by non-attorneys during the administrative process. 20

C.F.R. §§ 404.1705, 416.1505 (1999).

21

claimant, regardless of whether the claimant is represented by

counsel or has been constructively “notified” of the judicial

doctrine. The Court has previously stated in a case involving

an application for Social Security disability benefits that

“procedural due process is applicable to the adjudicative

administrative proceeding involving the differing rules of fair

play, which through the years, have become associated with

differing types of proceedings.” Richardson v. Perales, 402

U.S. at 401 (citations omitted). The Fifth Circuit’s judicial

that claimants, including unrepresented

claimants,” supply detailed legal positions at the Appeals

Council, when these legal papers are unlikely to be read by an

attorney and are not required by the regulations, violates the

“rules of fair play.”

“The fundamental requirement of due process is the

opportunity to be heard ‘at a meaningful time and in a

meaningful manner.’” Armstrong v. Manzo, 380 U.S. 545,

552 (1965). Because the Appeals Council affords cases only

a cursory review by an attorney and a brief review by a non-

attorney analyst, the Appeals Council often does not provide

a meaningful review of legal issues. The failure of reviewing

courts to consider meritorious legal issues offends the Due

Process Clause. If legal errors which led to the improper

denial of benefits are not corrected, then disabled claimants

will be deprived of benefits which are designed by Congress

to provide them the necessities of life.

2 Unrepresented claimants would be expected to know that they

are unable to work but could not possibly be expected to be able to

identify procedural errors, such as the incorrect application of the

sequential evaluation process. 20 C.F.R. §§ 404.1520, 416.920.

22

IV. DISABLED CLAIMANTS ARE LIKELY

TO SUFFER HARM IF COURTS REFUSE

TO CONSIDER MERITORIOUS ISSUES

THAT HAVE NOT BEEN RAISED AT

THE APPEALS COUNCIL.

Judicial imposition of issue exhaustion can result in the

denial of benefits to disabled individuals who meet all the

requirements in the Social Security Act and regulations for

obtaining benefits. These people have disabling conditions

that have persisted through the many years needed to complete

four levels of administrative review and satisfy the

prerequisites for judicial review. Because of their

disabilities, they are unable to obtain gainful employment

which would provide them with the necessities of life.

“[MJany disabled persons are forced to subsist on state public

assistance programs. Others are left with no means of

subsistence. "2!

deaths of people from illnesses

that SSA said they did not have,

* Others may be in dire need of benefits as dependents, survivors,

or retirees.

*/ Matthew Diller & Nancy Morawetz, Intracircuit Non-

acquiescence and the Breakdown of the Rule of Law: A Response

to Estreicher and Reversz, 99 Yale LJ. 801, 815-816

(1990)(footnotes omitted).

23

from the exertion of returning

to work after losing benefits, or

from suicide. Many of the

survivors join the ranks of the

homeless or the

forced to forego medical

treatment that would improve

their health

The Court has recognized that Social Security

disability benefits and SSI provide “the very necessities of

life,” and that the wrongful denial of these benefits imposes

“trauma” which is “beyond what anyone of normal

sensibilities would wish to see imposed on innocent disabled

citizens.” Schweiker v. Chilicky, 487 U.S. 412, 428-29

(1988). The Court has stated that the harm from wrongful

denials of Social Security disability benefits can be

“irreparable.” Bowen v. City of New York, 476 U.S. 467,

483-484 (1986).

The Ninth Circuit similarly stated:

Our society as a whole suffers

when we neglect the poor, the

hungry, the disabled, or when

we deprive them of their rights

or privileges. Society’s interest

lies on the side of affording fair

Discretion, 50 U. Prtt L. REV. 399, 410 (1989) (footnotes

omitted)

24

procedures to all persons, even

though the expenditure of

governmental funds is required.

It would be tragic, not only

from the standpoint of the

individuals involved but also

from the standpoint of society,

were poor, elderly, disabled

people to be wrongfully

deprived of essential benefits

for any period of time.

Lopez v. Heckler, 713 F.3d 1432, 1437 (9th Cir. 1983),

vacated on other grounds, 469 U.S. 1082 (1984). The Eighth

Circuit also explained the plight of the individuals denied

Social Security disability benefits.

Claimants who lose or are

denied benefits face foreclosure

on their homes, suffer utility

cutoffs and find it difficult to

purchase food. They go

care; they lose their medical

insurance. They become

increasingly anxious,

depressed, despairing—all of

Polaski v. Heckler, 751 F.2d 943, 951 (8th Cir. 1984)

(quoting Polaski v. Heckler, 585 F. Supp. 1004, 1013 (D.

Minn. 1984)), vacated on other grounds, 476 U.S. 1167

(1986).

~ ee es

25

The Social Security Act was “designed” by Congress

“to be ‘unusually protective of claimants.’” Bowen v. City of

New York, 476 U.S. at 480 (quoting Heckler v. Day, 467 U.S.

104, 106 (1984)). Judicial imposition of issue exhaustion is

inconsistent with the goals of both the Social Security Act and

the informal nature of the SSA appeals process. The Act

relies upon the courts to remedy erroneous denials of benefits

by the Commissioner. Meritorious issues should be heard by

the courts to prevent the tragedy of the wrongful denial of the

necessities of life to disabled people.

CONCLUSION

For the reasons stated, amici urge the Court to

reverse the decision below and to remand this case to the

Fifth Circuit for consideration of all legal issues raised by

petitioner in district court.

Robert E. Rains

Professor of Law

The Dickinson School

of Law

The Pennsylvania State

University

150 South College Street

Carlisle, PA 17013

(717) 240-5241

26

Respectfully Submitted,

*Rochelle Bobroff

AARP Foundation Litigation

Michael Schuster

AARP

601 E Street, NW

Washington, DC 20049

(202) 434-2060

Attorneys for Amici Curiae

*Counsel of Record

Dated: January 20, 2000

APPENDIX

APPENDIX

INTERESTS OF AMICI CURIAE

AARP is a nonprofit membership organization of more

than 33 million persons age fifty and older dedicated to

addressing the needs and interests of older Americans. Over

2.8 million people between the ages of fifty and sixty-five

receive Social Security Disability Insurance. Approximately

1.25 million older Americans receive Supplemental Security

Income as disabled individuals. Americans over 65 years of

age who receive or claim Social Security retirement benefits

will also be affected by this decision. Through education,

advocacy, and service, and by promoting independence,

dignity, and purpose, AARP seeks to enhance the quality of

life for individuals of all ages. AARP has filed numerous

briefs before this Court in cases involving people with

disabilities, including most recently, Cleveland v. Policy

Management Systems Corp, 526 U.S. 795 (1999); American

Manufacturers Mutual Insurance Co. v. Sullivan, 526 U.S. 40

(1999); and Kimel, et. al. v. Florida Board of Regents, Nos.

98-791, 98-796, 2000 WL 14012 (Jan. 11, 2000).

The National Organization of Social Security

Claimants’ Representatives (NOSSCR) is a non-profit

corporation. While most NOSSCR members are attorneys in

private practice, others work in programs which provide free

legal services to the poor. NOSSCR members regularly

represent people claiming benefits (usually, but not always,

disability benefits) in administrative proceedings before the

Social Security Administration (SSA). NOSSCR members

also file actions in federal court against the Commissioner of

SSA (currently Kenneth S. Apfel) appealing the final

administrative denial of clients’ claims for such benefits.

Al

These disability benefits have been provided by the Congress

through two separate but interrelated programs: Social

Security Disability Insurance Benefits (SSDI) under Title II of

the Social Security Act and Supplemental Security Income

(SSD under Title XVI of the Social Security Act. This case

will have profound implications for the meaningfulness of

federal court review, provided by Congress, of denial of

claims under both programs. This brief is filed by NOSSCR

in a representational capacity on behalf of Social Security and

SSI claimants who, by reason of their disabilities, both

physical and mental, as well as in many instances their limited

education, often cannot protect their own interests through the

labyrinthine administrative process, much less judicial review.

The American Network of Community Options and

Resources (ANCOR) is a nationwide association of more than

650 private, non-profit, for-profit and family care agencies

that together provide support and services to more than

150,000 people with mental retardation and other severe

disabilities. ANCOR has thirty vears of proven leadership

representing private providers at the federal level. The

membership serves persons of all ages, income levels, sexes

and races in urban, rural and suburban areas-supporting

people wherever they live and work. The majority of people

to whom ANCOR members provide supports and services are

adults with very low incomes who benefit from Social

Security disability programs.

The Arc of the United States (The Arc), through its

more than 1,000 state and local chapters, is the largest

national voluntary organization in the United States devoted

solely to the welfare of the more than seven million children

and adults with mental retardation and their families. Since

its founding in 1950, The Arc has participated actively in the

A2

formulation of public policy with respect to the rights of, and

services for, citizens with mental retardation. The Arc

(formerly the Association for Retarded Citizens) has

participated as amicus curiae in numerous cases before this

Court that involve the rights of people with disabilities.

Family Voices-New Jersey is a statewide organization

dedicated to ensuring quality health care for families of

children with disabilities and special health care needs.

Family Voices-New Jersey provides information, training,

technical assistance and support to families of children with

special health care needs to assist them to make positive

healthcare decisions for their children, work effectively as

partners with healthcare professionals, and secure health

coverage that meets their children’s special needs. Family

Voices-New Jersey is an active participant in the New Jersey

SSI Alliance; Mainstreaming Medical Care/Arc of New

Jersey; Eastern Paralyzed Veterans’ Association Managed

Care workgroup, and the Community Health Law Project’s

Managed Care Advisory Group.

Iowa Protection & Advocacy, Inc. is the state-designated

entity charged with the federally mandated function of

advocating for the rights of individuals with disabilities in the

state of lowa.

The National Association of Protection and Advocacy

Systems (NAPAS) is a membership organization for the

nationwide system of protection and advocacy (P&A)

agencies. P&As are mandated under various federal statutes

to provide legal representation and related advocacy services

on behalf of all persons with disabilities in a variety of

settings. NAPAS facilitates coordination of P&A activities

and provides training and technical assistance to the P&A

A3

network. It has participated as amicus curiae in a number of

cases before this Court that involve the rights of persons with

disabilities, including Cleveland vy. Policy Management

Systems Corp., 526 U.S. 795 (1999).

The National Senior Citizens Law Center (NSCLC)

advocates nationwide to promote the independence and well-

being of low-income elderly individuals, as well as persons

with disabilities, with particular emphasis on women and

racial and ethnic minorities. Much of NSCLC's work focuses

on federal benefit programs, including Social Security and

Supplemental Security Income. To achieve its goals, NSCLC

engages in various advocacy efforts, including litigation,

policy analysis, and administrative and legislative advocacy.

Established in 1972, NSCLC maintains offices in Washington,

DC, and Los Angeles, CA.

The Statewide Parent Advocacy Network of New Jersey

(SPAN) is New Jersey’s Goals 2000 Parent Information and

Resource Center and special education Parent Training and

Information Center. SPAN provides information, training,

technical assistance, support, and public policy advocacy for

families and professionals concerned with quality education

and the healthy development of New Jersey’s children.

SPAN’s special focus is on those children at greatest risk due

to poverty, disability, special physical or mental health care

needs, or other special needs. SPAN sponsors Family

Voices-New Jersey; New Jersey Statewide Parent to Parent;

the Welfare and Human Rights Monitoring Project; and other

projects working to enhance the capacity of families to

advocate for their children. SPAN is affiliated with the

National Parent Network on Disabilities and the National

Coalition of Advocates for Students.

——E

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