# Reply Brief — Smith v. Berryhill, 139 S. Ct. 1285 (2019) (No. 17-1606)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2019

## Text

No. 17-1606

In the Supreme Court of the Ainited States

RICKY LEE SMITH, PETITIONER
vz.

NANCY A. BERRYHILL,
ACTING COMMISSIONER OF SOCIAL SECURITY

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

REPLY BRIEF FOR THE RESPONDENT

NOEL J. FRANCISCO
Solicitor General

Counsel of Record
Department of Justice
Ww he 20530-0001
gov
(202) 514-2217

TABLE OF CONTENTS

Page
|. A Social Security Appeals Council order dismissing
a request for review as untimely is judicially
reviewable under 42 U.S.C. 405(g) 4
A. Section 405(g) does not prohibit courts
from reviewing whether a claimant
exhausted administrative remedies ..................... 4

B. The agency issued a final decision after a

hearing
C. Judicial review of Appeals Council dismissal
orders will not impose an undue burden on
federal courts. 13
ll. Judicial review of an Appeals Council dismissal
order is limited to the stated rationale for the

7

agency’s decision 16
TABLE OF AUTHORITIES
Cases:

Bloodsworth v. Heckler, 703 F 2d 1233

(11th Cir. 1983) 2, 9, 14
Bowen v. City of New York, 476 U.S. 467

(1986) 7, 8, 18, 19, 21
Califano v. Sanders, 430 U.S. 99 (1977) 11, 12
Cappadora v. Celebrezze, 356 F 2d 1 (2d Cir. 1966) ...........11
Casey v. Berryhill, 853 F 3d 322 (7th Cir. 2017) ................ 19
Chevron U.S.A. Inc. vy. Natural Res. Def. Council,

Inc., 467 U.S. 837 (1984) 12
FTC v. Indiana Fed’n of Dentists,

476 U.S. 447 (1986) 20
Heckler v. Day, 467 U.S. 104 (1984) 13

Heckler v. Ringer, 466 US. G02 (1984) 00000... cccccceccseeeeneee 4,5

(D

Cases—Continued: Page
Herchak v. U.S. Dep't of Labor, 125 Fed. Appx. 102

(9th Cir. 2005) 5
INS v. Orlando Ventura, 537 U.S. 12 (2002) .. 20
Mathews v. Eldridge, 42A U.S. 319 (1976) .................... 2, 8,9
Quarles v. Colvin, No. 15-572, 2016 WL 4250399

(S.D. Ala. Aug. 10, 2016) = 19
Ramey v. Merit Sys. Prot. Bd,

476 Fed. Appx. 253 (Fed. Cir. 2012) 5
Schweiker v. Chilicky, 487 U.S. 412 (1988) 13
SEC v. Chenery Corp., 318 U.S. 80 (1943) 3, 20
Shalala v. Schaefer, 509 U.S. 292 (1993) 6
Sims v. Apfel, 530 U.S. 108 (2000) 7, 13, 20

Stovic v. Railroad Ret. Bd, 826 F.3d 500
(D.C. Cir.), cert. denied, 137 S. Ct. 399 (2016)........... 11,12

Sullivan v. Hudson, 490 U.S. 877 (1989) 6
T-Mobile S., LLC v. City of Roswell,

135 S. Ct. 808 (2015) 21
Townsend v. Secretary of Health & Human Servs.,

762 F.2d 40 (6th Cir. 1985) 10
United States v. Gonzales, 520 U.S. 1 (1997) ...........c.ccee0-- 16
Utility Air Regulatory Grp. v. EPA,

573 U.S. 302 (2014) 12,13
Weinberger v. Salfi, 422 U.S. 749 (1975) mt
Whitzell v. Astrue, 589 F . Supp. 2d 100

(D. Mass. 2008) 19
Your Home Visiting Nurse Servs., Inc. v. Shalala,

ee 11

Statutes and regulations:
ee eee 5
42 U.S.C. 405 eninmeeuainn 2,6

Il
Statutes and regulations—-Continued: Page

42 U.S.C. 405(b) 10
42 U.S.C. 405(g) passim
42 U.S.C. 405(h) 10
42 U.S.C. 1383 17
42 U.S.C. 1383(c)(1)(A) 10
42 U.S.C. 1383(d)(1) 17
49 U.S.C. 42121(b\(3) 6
49 U.S.C. 42121(b)(4) 6
20 C.F.R.:
Section 404.900(b) (1999) 13
Section 416.1400(a) 12
Section 416.1468 17
Section 416.1468(a) 18
Section 416.1470 21
Section 416.1470(a)(5) 14
Section 416.1470(b) 10
Section 416.1475 10
Section 416.1476(b) 10
Miscellaneous:
45 Fed. Reg. 52,078 (Aug. 5, 1980) 17
70 Fed. Reg. 11,420 (Mar. 8, 2005) 17
United States Courts:
Statistical Tables for the Federal Judiciary,
https-//www.uscourts.gov/statistics-reports/
analysis-reports/statistical-tables-federal-

judiciary (last visited Mar. 6, 2019) 14

IV

Miscellaneous—Continued: Page

U.S. District Courts—Civil Cases Commenced,
by Nature of Suit and District, During the
12-Month Period Ending June 30, 2017,
https-//www.uscourts.gov/sites/default/files/
data_tables/stfj_c3_630.2017.pdf (last visited
SS eee 14
U.S. District Courts—Civil Cases Commenced,
by Nature of Suit and District, During the
12-Month Period Ending June 30, 2016,
https://www.uscourts.gov/sites/default/files/
data_tables/stf]_c3_ 630.2016.pdf (last vised
SAA Sa ccarsinsierecnninssemnssniomnseatnsepninianetatamninendsteteenen 15

In the Supreme Court of the United States

No. 17-1606
RICKY LEE SMITH, PETITIONER
Vv.

NANCY A. BERRYHILL,
ACTING COMMISSIONER OF SOCIAL SECURITY

ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

REPLY BRIEF FOR THE RESPONDENT

The government’s opening brief explains that, when
the Social Security Administration (SSA) Appeals
Council dismissed petitioner’s request for review as
untimely, the agency issued its “final decision * * *
after a hearing” on petitioner’s claim for benefits, and
the Appeals Council dismissal order is therefore subject
to judicial review under 42 U.S.C. 405(g). That result
follows from the undisputed facts that the dismissal
order marked the agency’s last word on petitioner’s
application for Social Security benefits, that an Admin-
istrative Law Judge (ALJ) held a hearing on peti-
tioner’s application, and that SSA was not required to
conduct another oral hearing to resolve the timeliness
of petitioner’s request for Appeals Council review. The
text of Section 405(g), its place in the structure of the
Social Security Act, this Court’s precedents, and basic
principles of administrative law all confirm that the

(1)

2

Appeals Council’s dismissal order was a reviewswle
final decision.

The Court-appointed Amicus Curiae (Amicus) urges,
at bottom, that “[t]he agency and this Court have
always understood the statute to require ‘exhaustion of
the administrative remedies provided.’” Br. 14 (quoting
Mathews v. Eldridge, 424 U.S. 319, 327 (1976)). But
that observation shows why an Appeals Council order
dismissing a request for review as untimely is judicially
reviewable: the question for the courts in petitioner's
case is whether he properly attempted to exhaust his
administrative remedies, and that type of question is
ordinarily resolved by courts, not by agencies in their
unreviewable discretion. See Gov’t Br. 30-31. Notably,
several courts have reviewed administrative exhaustion
determinations pursuant to other statutes that, like the
Social Security Act, authorize judicial review only after
the agency’s “final” decision. Jbid. The Amicus does
not identify any statutory text that compels a departure
from standard administrative practice and forecloses
judicial review of the limited question whether a claim-
ant properly exhausted administrative procedures.
Section 405 does empower SSA to determine the steps
that precede the agency’s final decision. See Wein-
berger v. Salfi, 422 U.S. 749, 766 (1975). But it does
not authorize the agency to determine by regulation
that, because of its own conclusion regarding an
untimely filing, its decision will never become final. See
Bloodsworth v. Heckler, 703 F.2d 1233, 1239 (11th Cir.
1983) (if Appeals Council dismissal orders were not
reviewable, then “the claimant would never have a ‘final’
decision” and would be left “permanently in limbo”).

The Amicus’s concern (Br. 36) that authorizing judi-
cial review of Appeals Council dismissal orders would

3

open the “floodgate” on federal courts is unfuunded,
because Section 405(g) and standard administrative-law
principles establish that judicial review in petitioner’s
case would be limited to the ground the agency gave for
its decision, and would be highly deferential, asking
only whether the agency made findings supported by
substantial evidence and did not abuse its discretion.
See Gov’t Br. 29-30. Contrary to petitioner’s contention
(Br. 24-25), a court’s authority in this case would not
include review of his ultimate entitlement to benefits.
See SEC v. Chenery Corp., 318 U.S. 80, 87 (1943) (“The
grounds upon which an administrative order must be
judged are those upon which the record discloses that
its action was based.”); cf. 42 U.S.C. 405(g) (“the court
shall review only the question of conformity with [the
agency’s] regulations”). Those limitations on judicial
review are likely to dissuade many claimants from pur-
suing litigation over Appeals Council dismissal orders.
And indeed, experience in the Eleventh Circuit, which
has allowed judicial review of Appeals Council dismissal
orders since Bloodsworth in 1983, has not shown an
unusual volume of Social Security cases.

The Amicus’s fallback argument (Br. 40-47) is that
the Court should defer to SSA’s existing regulations.
But for all the reasons given here and in the govern-
ment’s opening brief, accepting judicial review when an
ALJ held a hearing and the agency’s proceedings are
indisputably over is the only reasonable construction of
Section 405(g).

4

L A SOCIAL SECURITY APPEALS COUNCIL ORDER
DISMISSING A REQUEST FOR REVIEW AS UNTIMELY IS
JUDICIALLY REVIEWABLE UNDER 42 USC. 405(g)

The government’s opening brief explains (at 26-28,
33-37) why the Appeals Council dismissal order in peti-
tioner’s case was a “final decision *** made after a
hearing,” and therefore subject to judicial review under
42 U.S.C. 405g). Applying the straightforward mean-
ing of the statutory text, SSA’s decision was final
because it is undisputed that the agency will take no fur-
ther action on petitioner’s benefits application. And
that decision was made after a hearing by an ALJ
regarding petitioner’s entitlement to benefits. The
Amicus essentially urges a unique construction of the
terms in Section 405(g), on the ground that SSA pro-
cesses a very large number of claims each year. But
that policy rationale ultimately has no foothold in the
statutory text.

A. Section 405(g) Does Not Prohibit Courts From Reviewing
Whether A Claimant Exhausted Administrative Remedies
The Amicus repeatedly emphasizes that, due in part
to the size of the Social Security program, Congress
required claimants to exhaust administrative remedies
before filing in court. Amicus Br. 1-2, 4-6, 14, 16-19.
The Amicus argues that Congress in Section 405(g)
placed limitations on judicial review in order to avoid a
“dual * * * or duplicate administration of the law,” id.
at 5-6 (quoting legislative history of the Social Security
Act) (citation omitted), and to prevent “overly casual or
premature judicial intervention” in the administrative
system, id. at 18-19 (quoting Heckler v. Ringer, 466 U.S.
602, 627 (1984)). But those premises are not at issue in
this case, which is instead about a court’s authority to
decide a dispute over administrative exhaustion.

5

Petitioner’s claim for judicial review does not raise
any prospect of dual or duplicate administration, or
premature judicial intervention, because the agency’s
proceedings on his benefits application are complete.
Nor does the government’s interpretation of Section
405(g) call into doubt the need for Social Security claim-
ants to exhaust administrative remedies. Petitioner
sought a ruling by the district court that he did properly
exhaust his remedies in the agency. See J.A. 46-47. In
Ringer, this Court rejected judicial review because
three of the plaintiffs “stood the chance of prevailing in
administrative appeals,” and a fourth had not yet sub-
mitted a reimbursement claim to the agency. 466 U.S.
at 627. Petitioner, by contrast, submitted and pursued
his claim for benefits through SSA, and at this point—
as all agree—he cannot obtain administrative relief
without a court’s vacatur of the Appeals Council’s dis-
missal order. The Amicus’s argument is not that peti-
tioner sought judicial review too soon; it is that peti-
tioner has no opportunity at all to have a court review
whether he properly pursued administrative relief.

The Amicus’s rule would be an outlier. He does not
dispute the government’s showing (Gov't Br. 30-31) that
courts have routinely undertaken judicial review of
administrative findings of untimeliness, including pur-
suant to other statutes that, like the Social Security Act,
authorize judicial review only after the agency’s “final”
decision. See also, e.g., Ramey v. Merit Sys. Prot. Bd.,
476 Fed. Appx. 253, 255-256 (Fed. Cir. 2012) (per
curiam) (reviewing decision of Merit Systems Protec-
tion Board finding that petitioner’s administrative
appeal was untimely, pursuant to statute authorizing
judicial review of “a final order or decision of” the
Board, 5 U.S.C. 7703(a)(1)); Herchak v. U.S. Dep't of

6
Labor, 125 Fed. Appx. 102, 103-107 (9th Cir. 2005) (re-

the agency, 49 U.S.C. 42121(b)(3) and (4)). In fact, the
Amicus does not identify any instance outside of Section
405 (or other statutes incorporating it) in which courts
have interpreted a provision for judicial review of an
agency’s “final decision” to bar review of an agency’s
timeliness conclusion. And the Amicus provides no per-
suasive basis for concluding that Congress intended the
term “final decision” in Section 405(g) to mean some-
thing different from how that term is used throughout
administrative law.

Contrary to the Amicus’s contention (Br. 18-19), this
Court’s decision in Sullivan v. Hudson, 490 U.S. 877
(1989), does not support giving Section 405(g)’s text a
uniquely narrow construction that would bar judicial
review of “disputes over the rules of” SSA’s administra-
tive process even after the agency’s decision is final.
The Amicus invokes Hudson’s observation that Con-
gress created a “somewhat unusual” provision for judi-
cial review of SSA decisions. 490 U.S. at 885. But that
observation concerned the availability of attorney’s fees
under the Equal Access to Justice Act (EAJA) and the
unusual terms of sentence six of Section 405(g), which
creates a specialized procedure for an interlocutory
remand to the agency for further fact finding or pro-
ceedings while the district court retains jurisdiction
over the case. See Shalala v. Schaefer, 509 U.S. 292,
299-300 (1993) (Hudson’s allowance of EAJA fees was
limited to a “narrow class” of cases in which the district
court may remand and retain jurisdiction). Hudson

7

does not support the Amicus’s position in this case,
which does not involve sentence-six remands or attor-
ney’s fees under the EAJA.

B. The Agency Issued A Final Decision After A Hearing

1. SSA’s decision was final. The Amicus does not
dispute that SSA’s proceedings in petitioner’s case are
over, and instead contends that “ordinary usage” and
“judicial usage” indicate that the term “final decision”
in Section 405(g) is limited to SSA decisions after com-
plete exhaustion of administrative remedies. Amicus
Br. 21-23 (citing, eg., Bowen v. City of New York,
476 U.S. 467, 482 (1986); Sims v. Apfel, 530 U.S. 103,
107 (2000); Gov’t Br. at 18-19, Mathews v. Sanders,
No. 75-1443 (Sept. 1976)). But each of those authorities
simply stated (correctly) that a claimant must proceed
through the entire administrative process in order to
receive judicial review of the “merits” of his “claim for
benefits.” Gov't Br. at 18, Sanders, supra (No. 75-1443)
(emphasis added). Petitioner’s request for judicial
review is consistent with that requirement because the
appropriate question for the district court in this case is
whether his request for Appeals Council review was
timely, not whether he is entitled to benefits. None of
the authorities cited by the Amicus suggested that an
Appeals Council order conclusively resolving a benefits
application on a procedural ground is something other
than a “final decision.” See id. at 19 (arguing that the
term “final decision” does not include “post-adjudication
refusals by the Secretary to reopen closed matters”).'

' The government’s brief in Sims, supra, No. 98-9537 (Feb. 2000),
cited by the Amicus (Br. 25-26), similarly concerned the require-
ments necessary to obtain judicial review on the merits. The Ami-
cus also cites (Br. 25-26) the government’s brief in City of New York,

8

The Amicus defends his interpretation of the term
“final decision” by arguing (Br. 20-21 & n.6) that finality
is an “‘intensely practical’ concept,” citing this Court's
decision in Eldridge, 424 U.S. at 331 n.11, among others.
But most of the cases cited concerned whether an
administrative decision was “final” notwithstanding the
absence of an ALJ hearing or review by the Appeals
Council, or else whether to excuse some other defi-
ciency in the underlying proceedings. In Eldridge, for
example, the Court considered whether SSA had issued
a final decision before there was an ALJ hearing or
Appeals Council review, thereby permitting a district
court to consider the claimant’s constitutional argument
that he was entitled to an ALJ hearing before his bene-
fits were terminated. See id. at 330-332. It was in that
context that this Court considered “the consequences of
deferment of judicial review.” /d. at 331 n.11. The Ami-
cus’s position here, however, is not that judicial review
should be deferred, but that judicial review should not
be available to petitioner at all. And this case involves
the availability of judicial review where the claimant has
had an ALJ hearing and received a final disposition of
his claim for benefits after requesting Appeals Council
review.

The Amicus also relies heavily (Br. 1-2, 24-25, 41) on
SSA’s authority, recognized by this Court, to specify
exhaustion requirements for the administrative pro-
cess. But again, petitioner does not challenge those

supra, No. 84-1923 (Dec. 1985), but that case concerned whether to
excuse incomplete exhaustion for certain claimants, and this Court
held that exhaustion should be treated as waived under the particular
circumstances presented there. See 476 U.S. at 482-486.

9

authority that Congress granted the agency “to deter-
mine when finality has occurred,” Amicus Br. 24 (quot-
ing Eldridge, 424 U.S. at 330) (emphasis added), does
not include the authority to cut off a claimant’s statu-
tory right to judicial review by saying that SSA’s deci-
sion in a particular case will never become final. See
Bloodsworth, 703 F 2d at 1239.

2. SSA’s decision was made after a hearing. The
Amicus acknowledges (Br. 34) that the Appeals Council
order dismissing petitioner's request for review was
issued after a hearing by an ALJ on petitioner’s bene-
fits application. The Amicus’s response (Br. 34-35) is
that Section 405(g) does not permit judicial review of
“collateral” orders that occur after an ALJ hearing.
But the text of Section 405(g) depends on whether the
agency’s decision after a hearing is final. And in any
event, when petitioner sought Appeals Council review
after an ALJ hearing, the Appeals Council’s finding of
untimeliness was the basis for its final disposition of
petitioner’s claim, not collateral to it. This Court can
resolve this case by holding simply that, when an ALJ
has held a hearing on an application for Social Security
benefits, judicial review is available after the agency
renders its final decision.

The Amicus objects (Br. 34) that the Appeals Council
did not hold an oral hearing like the one presided over
by an ALJ before dismissing petitioner’s request for
review as untimely. The Amicus contends that Section
405(g)’s “‘after a hearing’ requirement must be inter-
preted as referring solely to hearings required by stat-
ute,” and that the statute compels a hearing “‘ %
when the claimant timely requests a hearing before an
ALJ after an adverse initial determination. Amicus Br.

10

28 (citation omitted); see 42 U.S.C. 405(b). That argu-
ment, based on the absence of a mandatory ALJ-type
hearing by the Appeals Council, would bar judicial
review of all Appeals Council decisions, on whatever
ground. Consider a case where an ALJ determines that
a claimant is entitled to benefits, but the Appeals Coun-
cil overturns that decision on the merits based on its
review of the record. See 20 C.F.R. 416.1470(b),
416.1475; see also, e.g., Townsend v. Secretary of Health
& Human Servs., 762 F.2d 40, 41 (6th Cir. 1985). Surely
the Appeals Council’s final decision in that case would
be subject to judicial review under Section 405(g), see
id. at 43-44, notwithstanding the fact that the Appeals
Council was not required by statute to hold an oral hear-
ing to come to its decision. See 20 C.F.R. 416.1476(b)
(Appeals Council has discretion whether to permit oral
argument). Presumably the Amicus would also agree
that the Appeals Council’s decision in such a case would
be binding and unreviewable “except as * * * provided”
in Section 405(g), even though those requirements are
triggered when SSA’s “findings and decision” were
made “after a hearing,” 42 U.S.C. 405(h). See Amicus
Br. 16 (emphasizing the limits on judicial review
imposed by Section 405(h)).

The Act vests in the Commissioner the authority to
determine what procedures should be used by the
Appeals Council in making its decision. See 42 U.S.C.
1383(c)(1)(A) (The Commissioner is “authorized, on the
Commissioner’s own motion, to hold such hearings and
to conduct such investigations and other proceedings as
the Commissioner may deem necessary or proper.”);
see also 42 U.S.C. 405(a) and (b). Those discretionary
choices do not disturb the claimant’s entitlement to
judicial review after the agency gives its final decision.

11

The Amicus argues (Br. 24, 28-34) that its interpre-
tation of Section 405g), which turns on whether a hear-
ing was required by statute, is supported by this Court’s
decisions in Califano v. Sanders, 430 U.S. 99 (1977), and
Your Home Visiting Nurse Services, Inc. v. Shalala,
525 U.S. 449 (1999), as well as the court of appeals’
decision in Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir.
1966) (Friendly, J.). But none of those cases addressed
whether a court is barred from reviewing an Appeals
Council decision on a non-merits, procedural ground
like timeliness when the claimant has had no prior
opportunity for judicial review. Instead, all three cases
involved claimants who, having previously declined to
take advantage of their opportunity for judicial review
of an adverse decision, later sought unsuccessfully to
reopen their cases before the agency. See Sanders,
430 U.S. at 102-103; Your Home, 525 U.S. at 451; Cap-
padora, 356 F.2d at 2-3. This Court held that a discre-
tionary denial of reopening, after the claimant has
already been afforded an opportunity for judicial
review, is not a “final decision * * * made after a hear-
ing,” 42 U.S.C. 405(g), but is instead “the refusal to
make a new determination,” Your Home, 525 U.S. at
453; see Sanders, 430 U.S. at 108-109. Central to the
Court’s analysis was the fact that the statutes at issue
did not require the agency to provide a reopening pro-
cedure at all. See Sanders, 430 U.S. at 108; Your Home,
525 U.S. at 454 (noting that “(the right of a provider to
seek reopening exists only by grace of the Secretary”);
see also Cappadora, 356 F .2d at 4-5.”

* Stovie v. Railroad Retirement Board, 826 F 3d 500 (D.C. Cir.)
(Kavanaugh, J.), cert. denied, 137 S. Ct. 399 (2016), relied on by the
Amicus (Br. 33-34), similarly concerned an administrative refusal to
reopen a prior final decision. 826 F.3d at 501. The court of appeals

12

This Court’s decision in Sanders stands for the prop-
osition that, after a Social Security claimant has com-
pleted the administrative process and been afforded an
opportunity for judicial review under 42 U.S.C. 405(g),
the agency is permitted to create “an additional oppor-
tunity” for administrative proceedings that do not
involve a hearing and do not come with a second chance
at judicial review. 430 U.S. at 109. But this case is
starkly different. Petitioner did not attempt to obtain
the benefit of a second administrative process; the
Appeals Council dismissal order was the final step in
SSA’s first adjudication of his claim for benefits. See
20 C.F.R. 416.1400(a). Because of that critically differ-
ent posture, each of the reasons this Court gave for the
results in Sanders and Your Home is inapplicable here.
See Gov’t Br. 38-40. Nothing in Sanders suggests
that judicial review of a final decision on a benefits
application—as opposed to a reopening request—is
foreclosed simply because the Appeals Council ruled on
a procedural ground.

3. SSA’s existing regulations do not warrant defer-
ence. The Amicus contends (Br. 3, 12, 15, 40-47)
that this Court should defer to the interpretation
of 42 U.S.C. 405(g) in the agency’s regulations under
Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984). As we have explained,
however (Gov’t Br. 20-21), after reexamining the issue,
the government has concluded that the construction of
Section 405(g) adopted by SSA’s regulations and
defended by the Amicus is “‘inconsistent with the
design and structure of the statute as a whole.’” Utility

concluded that the agency’s decision was reviewable in light of tex-
tual differences between the statute at issue and the Social Security
Act. Id. at 508-505.

13

Air Regulatory Grp. v. EPA, 573 U.S. 302, 321 (2014)
(citation and brackets omitted). “Even under Chevron’s
deferential framework, agencies must operate ‘within
the bounds of reasonable interpretation.’” /bid. (citation
omitted). The regulations’ construction of 42 U.S.C.
405(g) depends on the propositions that SSA’s decision
in petitioner’s case was not “final” even though the
agency’s proceedings were over, or that SSA’s decision
was not “made after a hearing” even though an ALJ
held a hearing. The government has concluded that
those are not reasonable constructions of Section
405(g), when read in the context of the statutory scheme
and broader principles of administrative law.

C. Judicial Review Of Appeals Council Dismissal Orders
Will Not Impose An Undue Burden On Federal Courts

The Amicus urges (Br. 1) that Section 405(g) should
be construed to forbid judicial review of exhaustion
questions in order to avoid “engulfing the federal
courts” in Social Security cases (and Medicare cases,
which also incorporate Section 405). See also Amicus
Br. 4-5 (noting that SSA processes millions of claims
each year), 9-10, 36-40, 44-45. That argument falls short
because even as Congress balanced the need for effi-
ciency and fairness in Social Security cases, it pre-
served judicial review as a backstop. The most
important way by which SSA limits the number of Social
Security cases that arrive in federal court is affording
claimants an “unusually protective multi-step process
for the review and adjudication of disputed claims.”
Schweiker v. Chilicky, 487 U.S. 412, 424 (1988) (brack-
ets omitted) (quoting Heckler v. Day, 467 U.S. 104, 106
(1984)). That administrative process is conducted “in an
informal, nonadversary manner,” Sims, 530 U.S. at 111
(opinion of Thomas, J.) (quoting 20 C.F.R. 404.900(b)

14

(1999)), and includes the Appeals Council, which both
exercises appellate-style review and can consider new
evidence from the claimant in some circumstances.
20 C.F .R. 416.1470(a)(5); see also Amicus Br. 18 (noting
that “the inquisitorial social security process boasts
powerful protections for claimants”). In the rare case
in which SSA’s conclusion regarding the timeliness of a
request for Appeals Council review is not supported by
substantial evidence, the Amicus provides no persua-
sive reason why Congress would have barred a court
from correcting that error so that the administrative
process can resume.

The Amicus’s “floodgate concerns” (Br. 36) are also
not supported by the experience of the Eleventh Cir-
cuit, which has held since 1983 that Appeals Council dis-
missal orders are subject to judicial review. Bloods-
worth, supra. Statistics from the Administrative Office
of the United States Courts show that, from 2001 to
2018, the percentage of Social Security cases filed in dis-
trict courts in the Eleventh Circuit, as a percentage of
all civil cases in that Circuit, was comparable to the
national average.* For example, for the 12 months pre-
ceding June 30, 2017, Social Security cases comprised
6.69% of all civil cases filed within the Eleventh Circuit,
and 6.98% of all nationwide.‘ The year before
that, Social Security cases were 5.30% of the Eleventh

* https://www.uscourts.gov/statistics-reports/analysis-reports/
statistical-tables-federal-judiciary. The Administrative Office’s sta-
tistics are compiled twice annually and available online from 2001
onward. /bid For the “June” report in each year, Table C-3 shows
“Civil Cases Filed, by Jurisdiction, Nature of Suit, and District”
over the preceding 12 months. /bid

* https-//www.uscourts.gov/sites/default/files/data_tables/stfj c3_
630.2017.pdf

15

Circuit’s civil filings, compared to 6.34% nationally.° The
Eleventh Circuit simply has not seen the rush of addi-

Whether judicial review would be available for any
other type of SSA dismissal order (Amicus Br. 36-38),
or for a decision of any other agency (Amicus Br. 38-40),
depends on the particular features of the administrative
ruling at issue and the particular text of the relevant
statutory regime. Those questions are not before the
Court in this case, and some are the subject of disagree-
ment among the lower courts, as the Amicus acknowl-
edges. In any event, where Section 405(g) applies, the
government’s submission is modest: when the agency
has given its last word on an administrative claim, its
decision is “final,” and where an ALJ hearing occurred
and an oral hearing is not required to resolve the par-
ticular procedural dispute at issue, the agency’s deci-
sion was “made after a hearing.” 42 U.S.C. 405(g).

The court of appeals erred, therefore, in concluding
that petitioner’s suit under Section 405(g) should be dis-
missed without any review of whether he properly
exhausted administrative remedies.°

®° https//www.uscourts.gov/sites/default/files/data tables/stf} c3_
630.2016. pdf

* The government agrees with the Amicus (Br. 19 n_5) that, if the
Court rejects the government’s construction of Section 405(g), the
judgment below should be affirmed, notwithstanding the court of
appeals’ erroneous statement that petitioner's case should have
been dismissed for lack of jurisdiction. The government raised the
point in its opening brief (at 24 n.12) in order to assist this Court, if
necessary, in dispelling confusion among some lower courts that
have treated exhaustion under Section 405(g) as a jurisdictional
requirement.

16

Il. JUDICIAL REVIEW OF AN APPEALS COUNCIL
DISMISSAL ORDER IS LIMITED TO THE STATED
RATIONALE FOR THE AGENCY’S DECISION
As the government’s opening brief explains (at

29-30), Congress understood that some of SSA’s final
decisions will rest on a procedural failure by the claim-
ant. Section 405(g) accordingly tailors the available
scope of judicial review to the agency’s rationale for its
decision. Where the claimant completes the administra-
tive process, “[t]he court shall have power to enter,
* * * a judgment affirming, modifying, or reversing the
decision of the Commissioner, *** with or without
remanding the cause for a rehearing.” 42 U.S.C. 405(g).
But where the agency’s final decision is “adverse” to the
claimant “because of failure of the claimant *** to
submit proof in conformity with any regulation pre-
scribed under [42 U.S.C. 405(a)], the court shall review
only the question of conformity with such regulations
and the validity of such regulations.” /bid.

A. The latter sentence supports the government’s
position that, because the Appeals Council in this case
issued an adverse decision based on petitioner’s failure
to submit his request for review in a timely manner, the
statute does not entirely foreclose judicial review—as
the Amicus contends—but instead limits judicial review
to “only” whether petitioner “conform[ied] with” the
timeliness regulation. 42 U.S.C. 405(g). Section 405(g)
permits limited judicial review of an adverse decision
resting on a failure “to submit proof in conformity with
any regulation prescribed under subsection (a) of this
section,” ibid. (emphasis added), and Congress’s use of
the “expansive” term “‘any’”—“that is, ‘one or some
indiscriminately of whatever kind’”—“‘means what it
says,” United States v. Gonzales, 520 U.S. 1, 5 (1997)

17

(citations omitted). The Amicus does not dispute that
Section 405(a) is the source of SSA’s authority to adopt
the Appeals Council timeliness regulation at issue in
this case. See 42 U.S.C. 1383(d)(1) (Section 405(a) “shall
apply * * * to the same extent” in Title XVI as in Title
II); 45 Fed. Reg. 52,078, 52,097 (Aug. 5, 1980) (invoking
Section 1383 as authority for 20 C.F.R. 416.1468).’
While it is admittedly somewhat awkward to describe
a failure to submit a timely request for Appeals Council
review as a failure “to submit proof” in conformity with
applicable regulations, 42 U.S.C. 405(g), that statutory
phrase makes sense in light of the text that it cross ref-
erences, which refers to SSA’s authority to “to make
rules and regulations and to establish procedures, * * *
and [to] adopt reasonable and proper rules and regula-
tions to regulate and provide for the nature and extent
of the proofs and evidence and the method of taking and
furnishing the same in order to establish the right to
benefits hereunder,” 42 U.S.C. 405(a) (emphasis added).
In other words, Congress referred in Section 405(g) to
a failure “to submit proof” because in Section 405(a) it
a ee ee eee
as one for claimants to furnish, and the agency to
receive, “proofs and evidence” regarding entitlement to
benefits. /bid. The Appeals Council is part of that pro-
cess, and a claimant’s failure to seek Appeals Council
review as required by SSA regulations constitutes a

" The Amicus contends (Br. 26-27 n.7) that “the agency’s own reg-
ulations” show that the failure-to-submit-proof sentence in Section
405(g) does not apply here, but the Amicus cites a regulation of the
Center for Medicare & Medicaid Services—not SSA—that applies
to a different benefits program. See 70 Fed. Reg. 11,420, 11,498
(Mar. 8, 2005).

18

failure to submit his case, based on the evidentiary rec-
ord, to the Appeals Council. Indeed, the very same
timeliness regulation at issue here also counsels claim-
ants to “submit any evidence [they] wish to have consid-
ered *** with [their] request for review [by the
Appeals Council],” and provides that the Appeals Coun-
cil “will consider the evidence” consistent with other
SSA regulations. 20 C.F.R. 416.1468(a).

At a minimum, Section 405g) clearly contemplates
that at least some adverse final decisions resting on a
procedural ground—those involving the failure to make
a proper submission of proof—will be judicially review-
able, contrary to the Amicus’s submission (Br. 28) that
judicial review is foreclosed unless the agency’s decision
was reached after a hearing “required by statute.”
Even if the failure-to-submit-proof sentence in Section
405(g) does not strictly control here, the principle
underlying it applies equally to petitioner’s failure to
comply with the regulations governing Appeals Council
review.

B. Although the government agrees with petitioner
that the Appeals Council’s dismissal order is judicially
reviewable, petitioner errs in contending (Br. 24-25)
that if the district court concludes that the Appeals
Council’s conclusion regarding untimeliness is not sup-
ported by substantial evidence, the court could properly
decide petitioner’s ultimate entitlement to benefits."

* Petitioner contends (Br. 24) that the permissible scope of judi-
cial review “is not presented here.” But the answer to that question
is directly related to why the correct interpretation of Section 405(g)
is consistent with this Court’s precedents holding that the Social
Security Act requires complete exhaustion of administrative reme-
dies before judicial review. See City of New York, 476 U.S. at 482.
Moreover, the scope-of-review question implicates how the district

19

Lower courts commonly hold that, where an error in
the administrative process prevented SSA from review-
ing a claim properly, remand to SSA is the required dis-
position. See, e.g., Casey v. Berryhill, 853 F.3d 322, 329
(7th Cir. 2017) (holding that, where the Appeals Council
erroneously dismissed an administrative appeal on pro-
cedural grounds, “the underlying merits” are “for the
agency to consider on remand”); Quarles v. Colvin,
No. 15-572, 2016 WL 4250399, at *3 (S.D. Ala. Aug. 10,
2016) (“The parties * * * agree that, when the Appeals
Council has dismissed a request for review, this Court
may not review the merits of the underlying decision
denying benefits” but only “‘whether the Appeals Coun-
cil abused its discretion in dismissing Plaintiff’s tardy
request for review.’”) (citation omitted); Whitzell v.
Astrue, 589 F. Supp. 2d 100, 109 (D. Mass. 2008) (hold-
ing that, where the Appeals Council had erroneously
declined review of the claimant’s case, Section 405(g)
did not allow the court to review the claimant’s entitle-
ment to benefits).

Limiting judicial review in a case like this one to the
procedural failure that was the basis for the agency’s
adverse decision is necessary to ensure that petitioner
completes the entire administrative process— including
giving the Appeals Council an opportunity to review the
record—before a court considers his claim on the mer-
its. See City of New York, 476 U.S. at 482 (“a claimant
is required to exhaust his administrative remedies by
proceeding through all three stages of the administra-
tive appeals process”). That limitation on the scope of
judicial review also accords with the “familiar princi-
ple[ | of administrative law” that when an agency “has

court should implement the remand order that both petitioner and
the government seek from this Court.

chosen a particular legal rationale” for its decision, “its
decision must stand or fall on that basis.” F'7TC v. Indi-
ana Fed’n of Dentists, 476 U.S. 447, 455 (1986); see also
Chenery, 318 U.S. at 87.

Petitioner’s contrary arguments are without merit.
Petitioner first invokes (Br. 24-25) Sims, supra, which
he argues “holds that a court may address an issue in
the absence of an Appeals Council determination
regarding—or even Appeals Council consideration of —
the issue.” That overstates Sims’s rationale for declin-
ing to require issue exhaustion before the Appeals
Council. Four Justices reasoned that SSA administra-
tive proceedings operate “‘in an informal, nonadversary
manner” whereby “(t]he [Appeals] Council, not the
claimant, has primary responsibility for identifying and

the issues.” Sims, 530 U.S. at 111, 112 (opin-
ion of Thomas, J.) (citation omitted). But Sims does
not say or suggest that the Appeals Council is so incon-
sequential that a court may review the merits without
the Appeals Council even considering the benefits claim
on the merits.

Reviewing the merits before the Appeals Council has
had an opportunity to consider them would also conflict
with this Court’s “ordinary ** * requirement” that a
court “should remand a case to an agency for decision
of a matter that statutes place primarily in agency
hands.” INS v. Orlando Ventura, 537 U.S. 12, 16-17
(2002) (per curiam); see also Chenery, 318 U.S. at 88 (“a
judicial judgment cannot be made to do service for an
administrative twdgment”). In Social Security cases,
SSA regulations charge the Appeals Council with

* Justice O’Connor concurred in the judgment, on the ground that
SSA had failed to notify claimants of an issue-exhaustion require
ment. Sims, 530 U.S. at 113.

21
reviewing and clarifying, if needed, the agency’s final

See 20 C.F .R. 416.1470. Completing that process is nec-
essary before a federal court can appropriately exercise
its review of whether the agency’s findings on the mer-
its are supported by “substantial evidence.” 42 U.S.C.
405(g); see Salfi, 422 U.S. at 765 (“Exhaustion is gener-
ally required *** so that the agency may function
efficiently and so that it may have an opportunity to cor-
rect its own errors, to afford the parties and the courts
the benefit of its experience and expertise, and to com-
pile a record which is adequate for judicial review”);
see also T-Mobile S., LLC v. City of Roswell, 135 S. Ct.
808, 815 (2015) (“courts cannot exercise their duty of
| substantial-evidence] review unless they are advised of
the considerations underlying the action under review”)
(citation omitted; brackets in original).

Finally, petitioner observes (Br. 25) that, under this
Court’s precedents interpreting the Social Security Act,
full exhaustion can be waived, or deemed waived, in cer-
tain situations. But the Acting Commissioner has not
waived the requirement in this case that petitioner com-
plete the administrative process before a court reviews
his entitlement to benefits. And this Court’s precedents
would not support treating that requirement as waived
here. Were the district court to find that petitioner sub-
mitted a timely request for Appeals Council review, he
has not shown “that full relief cannot be obtained”
through a remand to the Appeals Council, City of New
York, 476 U.S. at 483 (citation omitted), where petitioner
would have an opportunity to present his objections to
the ALJ’s decision denying his claim for benefits.

MARCH 2019

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0828%3A09. Public record. Not legal advice.