Petition for Writ of Certiorari — Bowen v. Dixon

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oe | (1) " Supreme Court, US,

, 8 6 oh > FILE D

} JUL 2 1988 |

No. JOSEPH So ea JR.

Iu the Suprenve Court of the United States

OCTOBER TERM, 1985

‘OTIS R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

Vv.

DAVID DIXON, ET AL.

.‘ PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

CHARLES FRIED

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

QUESTION PRESENTED

Whether the court of appeals correctly affirmed the

district court’s preliminary injunction barring the

Secretary from applying regulations under which a

person seeking Social Security disability benefits will

be found not to be disabled if he does not have a

medically “severe” impairment that significantly lim-

its his ability to do basic work activities.

(I)

II

PARTIES TO THE PROCEEDING

The petitioner is the Secretary of Health and Hu-

man Services. The named respondents are David

Dixon, Ricardo Ramirez, Ophelia Casey, Dominga

Carrasquillo, Joanne Lockett, Eulalia Terez, Carmen

Feliciano and Tomasina Gonzalez. In addition, the

district court certified the following class of plain-

tiffs (App., infra, 69a-70a) :

All persons in the State of New York who have

filed or will file applications for disability bene-

fits under Title II and/or Title XVI of the Social

Security Act, and whose benefits have been or

will be denied pursuant to the policies set forth

in 20 C.F.R. §§ 404.1520(c) and .1521, 416.920

(c) and .921 (1982), and Social Security Ruling

82-55 (1982); and all recipients of such benefits

who have made or will make claims for continued

benefits, and whose benefits have been or will be

terminated pursuant to the same policies.

The plaintiff class does not include, at this

time, any such persons who received decisions of

the Secretary on or before July 19, 1988 and

failed to file a complaint in federal district court

or to appeal to the next level of administrative

review within 60 days after the date of the re-

ceipt of such decision.

TABLE OF CONTENTS

Page

Opinions below ........................--....-csessess-ceeessnescssensensesnensens 1

pgp LEY ro 2

Statutory and regulatory provisions involved —............ 2

I ak alt i cctets innenetincbennatntadnipsoczenenasenccosseseseces 2

Reasons for granting the petition ................................... g

I seals eae enestptnapapencenneananenuscgecosnenccete 13

Apia A ...n.n-.--..-....n2.n2.22n0.cennsenenncmorcncccecercenceseneenseenes la

Appendix B .......................0.-----c-e--ecescecesnescensssnsesensenseneenes 16a

Apppemi Cann n.nn-n-n-.2-20-20-n<-n220.n-.anencenereenecoenersssenssnseenecenes 18a

Appendix D. .....................-..-..-..-.-0s-ecseceeneneecescosceccenneeseeeees 59a

BpmpeEEe FE .n...-.--..-.----------220220-o-cancnenesnesserenqneannoccvsneensenss 68a

Append | FP uu.............--.-.----.-.-----0-no-neenercnsoeeseanesercsenseeceeeees 89a

Ppppem Gann... -n----0-nnasernnenqereroenneceeccrccsceenoenees 92a

TABLE OF AUTHORITIES

Cases:

Bowen Vv. City of New York, No. 84-1923 (June 2,

nl re 10, 12

Bowen Vv. Yuckert, cert. granted, No. 85-1409 (May

BED enishemiinen 0s Raa 2 ne Ae Sod -sseacd, 9, 18

FTC v. Standard Oil Co., 449 U.S. 232 _................... 10

Heckler v. Lopez, 463 U.S. 1328 -............................... 11

Heckler v. Redbud Hospital District, No. A-32

(July 24, 1985), motion to vacate denied (Aug.

FD -ccccesciiebitinesscsckdidieincntiicinseicbdasnihdeRecihinerecemsoes 11

Schisler v. Heckler, 107 F.R.D. 609, aff'd, 787 F.2d

NC eee a NT cD, 12

Statutes and Regulations:

Social Security Act, 42 U.S.C. (& Supp. II) 301

et seq.:

Tit. II, 42 U.S.C. (& Supp. II) 223 et seq.:

8 205, 42 U.S.C. 406(g) .............................. 5, 6, 11

(III)

IV

Statutes and reguiations—-Continued : Page

§ 223(a)(1)(D), 42 U.S.C. (Supp. IT)

423(a)(1)(D) . 3

§ 223(d), 42 U.S.C. (& Supp. ID 423(d).. 8,11

§ 223 (d) (1) (A), 42 U.S.C. (& Supp. IT)

423(d)(1)(A) ..........-.-.. 2, 3, 92a

§ 223(d) (2) (A), 42 U.S.C. (& Supp. IT)

Ge ane (eee 2, 8, 6, 7, 92a

§ 223(d)(2)(C), 42 U.S.C. (Supp. II)

SED crcneprnepenermaningrines 2, 93a

Tit. XVI, 42 U.S.C. (& Supp. II) 1382c et seq.:

§ 1614(a), 42 U.S.C. (& Supp. II) 1382

(a) RP ETS ne ee eee 3

§ 1614(a) (3), 42 U.S.C. (& Supp. II)

i RRA AIRE I ss LE Te he ABD 8

§ 1614(a) (3) (A), 42 U.S.C. 1382c(a) (3)

PA SE Ome eme ne SKS 2, 3, 7, 93a

§ 1614(a) (3) (B), 42 U.S.C. 1382c(a) (3)

ear, ies ...2, 3, 6, 98a

§ 1614(a) (3) (G), 42 US. C. (Supp. II)

ia, 2, 94a

€ 1631(c) (3), 42 U.S.C. 1883 (c) (3)... 11

Social Security Benefits Reform Act of 1984,

Pub. L. No. 98-460, $8 Stat. 1794 et seq......... x

Fk Sec 12

63G), Se meee Bees jn... 12

§ 4, 96 Stat. 1800-1801 _.............................. 2

ane &

S4Qn eee - |

EI eee ne 8

I 12

20. C.F.R.:

I eaten 2, 3, 94a

Section 404.1520(b) 00. er 4, 95a

Section 404.1520 (c) _.....................-....--.------ 4, 95a

eee 4, 95a

ee 5, 954

\ I i eecinceneoeees 5, 96a

Vv

Statutes and regulations—Continued : Page

EE 2, 96a

Section 404.1621(a) .................................... 4, 96a

| | Sanaa 4, 96a

Section 404.1522 (1984) .....0.0........ ical 7

semen 2,3, 97a

IE ER ee 4, 97a

TO Te ee ae Oe 4, 97a

I ac entiahlnealeilinat 4, 97a

5 EE 5, 98a

ERE REED ema re) 5, 98a

a RE 2, 98a

I i incenmente 4, 98a

I eee 4, 99a

Section 416.922 (1984) 0.00. 7

Miscelianeous:

43 Fed. Reg. (1978) :

SANE a ae a CD Me Re a 7

ESET Ce eer Ree cree 7

Social Security Ruling:

I a oa ential nichsatenlistiaintind 7

7

Ruling 85-ITI-II (Apr. 1985) —.............2............

In the Supreme Court of the United States

OcTOBER TERM, 1985

No.

Oris R. BOWEN, SECRETARY OF HEALTH

AND HUMAN SERVICES, PETITIONER

v.

DAVID DIXON, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

The Solicitor General, on behalf of the Secretary

of Health and Human Services, petitions for a writ of

certiorari te review the judgment of the. United

States Court of Appeals for the Second Circuit in

this case.

OPINIONS BELOW

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

la-15a) is reported at 785 F.2d 1102. The June 22,

1984 opinion of the district court on respondents’

motions for class certification and a preliminary in-

junction (App., infra, 18a-58a) is reported at 589

F. Supp. 1494, and the June 22, 1984 opinion of the

district court on the motions by certain individual

respondents to intervene (App., infra, 59a-67a) is

(1)

9

-

reported at 589 F. Supp. 1512. The_July 26, 1984,

order of the district court granting the motions for

class certification and a preliminary injunction (App.,

infra, 68a-88a) and the July 22, 1985, order of the

district court denying the Secretary's motion to

vacate the preliminary injunction (App., infra, 89a-

9la) are unreported.

JURISDICTION

The judgment of the court of appeals was entered

on March 7, 1986 (App., infra, 16a-17a). By order

dated May 27, 1986, Justice Marshal] extended the

time within which to file a petition for a writ of

certiorari to and including July 3, 1986. The juris-

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

1254(1).

STATUTORY AND

REGULATORY PROVISIONS INVOLVED

Sections 223(d)(1)(A) and (2)(A), 1614(a)

(3) (A) and (B) of the Social Security Act, as codi-

fied at 42 U.S.C. (& Supp. Il) 423(d)(1)(A) and

(2) (A), 1382e(a) (3) (A) and (B) ; Sections 223 (d)

(2)(C) and 1614(a)(3)(G) of the Social Security

Act, as added by Section 4 of the Social Security Dis-

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

98-460, 98 Stat. 1800-1801 (codified at 42 U.S.C.

(Supp. II) 423(d)(2)(C), 1382c(a) (3) (G)); and

20 C.F.R. 404.1520, 404.1521, 416.920 and 416.921

are reproduced at App., infra, 92a-99a.

STATEMENT

This New York-wide class action involves the valid-

ity of regulations under which a claimant for Social

Security disability benefits will be found not to be

disabled if he does not have a medically “severe”

impairment. The question of the validity of these

regulations is already before the Court in Bowen v.

Yuckert, cert. granted, No. 85-1409 (May 19, 1986).

_ 1. Title II of the Social Security Act provides,

inter alia, for the payment of insurance benefits to

a person who is “under a disability” (42 U.S.C.

(Supp. Il) 423(a)(1)(D)). Disability benefits also

are provided under the Supplemental Security Income

program established by Title XVI of the Act (42

U.S.C. (& Supp. Il) 1882(a)). The term “disability”

is defined under both programs to mean the inabil-

ity “to engage in any substantial gainful activity by

reason of any medically determinable physical or

mental impairment which can be expected to result

in death or which has lasted or can be expected to

last for a continuous period of not less than 12

months” (42 U.S.C. 423(d)(1)(A), 1882e(a) (3)

(A)). The Act further provides that an individual

“shall be determined to be under a disability only if

his physical or mental impairment or impairments

are of such severity that he is not only unable to do

his previous work but cannot, considering his age,

education, and work experience, engage in any other

kind of substantial gainful work which exists in the

national economy” (42 U.S.C. (& Supp. II) 423(d)

(2) (A), 1882e(a) (3) (B)).

To implement these statutory definitions, the Sec-

retary has established a five-step “sequential evalua-

tion” process to be followed in determining whether

a claimant is disabled. 20 C.F.R. 404.1520, 416.920.

At step 1, the decision-maker (the state agency, ad-

ministrative law judge (ALJ), or Appeals Council)

determines whether the individual is engaged in work

that constitutes substantial gainful activity. If so,

he is found not to be disabled. 20 C.F.R. 404.1520

4

(b), 416.920(b). If the claimant is not engaged in

substantial gainful activity, the decision-maker must

determine at step 2 (at issue here) whether the

claimant has a medically “severe” impairment. 20

C.F.R. 404.1520(c), 416.920(c). An impairment

is not “severe” if it does not “significantly limit” the

claimant’s physical or mental ability to do “basic

work activities’ (20 C.F.R. 404.1521(a), 416.921

(a)), which include physical activities such as walk-

ing, standing, lifting, etc.; seeing, hearing and speak-

ing; understanding and carrying out simple instruc-

tions; using judgment; responding appropriately to

supervision and co-workers; and dealing with changes

in a routine work setting. 20 C.F.R. 404.1521(b),

416.921(b). If the claimant’s impairment does not

significantly limit his ability to do basic work actjiv-

ities, he is found not to be disabled on this ground

alone, without a specific consideration of his age,

education, and work experience. 20 C.F.R. 404.1520

(c), 416.920 (c).*

If the claimant does have a “severe” impairment,

the decision-maker then must determine at step 3

whether the impairment is so severe as to be the

equivalent of one of the listed impairments that are

automatically deemed to be disabling. 20 C.F.R.

404.1520(d), 416.920(d). If the impairment is not

that severe, the decision-maker then must determine

‘at step 4 whether the claimant is able to do his own

1 As we have explained in our certiorari petition in Yuckert

(at 5 n.1), the sequence in which the severity of an impair-

ment is considered now differs somewhat under the new regu-

lations governing the evaluation of persons who already are

receiving disability benefits. However, that difference in

sequence does not affect the question whether the absence of

a “severe” impairment is by itself sufficient to support a

determination that a claimant is not disabled.

5

past work; if so, he is not disabled. 20 C.F.R. 404.-

1520(e), 416.920(e). Finally, if the claimant cannot

do his past work, the decision-maker must determine

at step 5 whether, in light of the claimant’s age, edu-

cation, and work experience, he can perform other

work that exists in the national economy. 20 C.F.R.

404.1520(f), 416.920(f).

2. This class action—which consists of four con-

solidated suits—was filed on September 23, 1983, in

the United States District Court for the Southern

District of New York to challenge the “severity” step

of the sequential evaluation process. In an opinion

dated June 22, 1984, the district court granted re-

spondents’ motions for class certification and a pre-

liminary injunction (App., infra, 18a-58a).

a. The district court certified a class of all persons

in New York who: (i) have filed or will file applica-

tions for disability benefits under Title II or Title

XVI of the Act and whose applications have been or

will be denied on the basis of the severity regulations,

or (ii) have received disability benefits that have been

or will be terminated pursuant to the same policies

(App., infra, 55a). But the district court provided

that the class ‘‘at this time” does not include any

persons who received decisions of the Secretary on

or before July 19, 1983, and failed to file a complaint

in federal district court or to appeal to the next level

of administrative review within 60 days (App., infra,

70a). The cut-off date of July 19, 1988, which is

approximately 60 days before the complaint was filed

in this case, was intended to comply with the require-

ment in 42 U.S.C. 405(g) that a claimant seek judi-

cial review within 60 days of the Secretary’s final

decision (App., infra, 28a & n. 18).

6

However, the court dispensed with the other pre-

requisite to suit that ordinarily is applicable under

42 U.S.C. 405(g) by including in the class persons

who had not exhausted their administrative remedies

and obtained a decision from the Appeals Council

on their claims for benefits. The court appeared to

acknowledge that respondents’ challenge to the “sever-

ity” regulations was not collateral to their substan-

tive claims for benefits and that exhaustion of ad-

ministrative remedies was not futile because benefits

might be awarded or denied on some other basis

(App., infra, 29a-80a & n.19). Nevertheless, the

court concluded that exhaustion should not be re-

quired because class members would experience finan-

cial hardship if they did not receive disability bene-

fits and because the ALJs and the Appeals Council

are not free to disregard applicable regulations when

adjudicating claims for benefits (7d. at 30a-3la).

b. The district court determined that a preliminary

injunction should be entered because, in its view, the

class members would suffer irreparable injury with-

out that relief and were likely to succeed on the

merits of their contention that the severity regula-

tions are inconsistent with the Social Security Act.

The court read 42 U.S.C. 423(d) (2) (A) and 1382c

(a) (3) (B) to require the decision-maker to consider

the vocational factors of age, education, and work

experience in connection with every claim for benefits,

and it therefore held that benefits cannot be denied

solely on the basis of the medical severity of the im-

pairment (App., infra, 33a-35a). The district court

rejected the Secretary’s contention that the regula-

tions are a valid means of screening out those claim-

ants who have slight or de minimis impairments. Al-

though it recognized that the Secretary had explained

\

T

the regulations on that basis when they were promul-

gated in 1978 (see 43 Fed. Reg. 9284, 9296), it ob-

jected to the fact that “the regulation itself does not

use the Secretary’s language” (App., infra, 36a).

The court further recognized that the severity step

in the sequential evaluation process was supported

by the legislative history of the 1967 amendments to

the Social Security Act and that the predecessor reg-

ulations had been promulgated in 1968 to implement

those amendments. But the court nevertheless be-

lieved that the language of 42 U.S.C. 423(d) (2) (A)

and 1382c(a)(3)(A) rendered the regulations in-

valid (App., infra, 22a-23a, 39a-42a).”

ce. On July 25, 1984 the district court entered a

broad order that enjoins the Secretary from deny-

ing or terminating benefits on the basis of the policies

in the challenged regulations and directs retroactive

relief for all class members whose benefits already

have been denied or terminated on the basis of those

policies (App., infra, 68a-88a). In particular, the

court ordered the Secretary to identify all class mem-

bers within either 30 days or 75 days; to reopen the

administrative decisions denying or terminating ben-

? The district court also invalidated Social Security Ruling

(SSR) 82-55, which gave additional guidance to adjudicators

regarding the severity step of the sequential evaluation process

(App., infra, 46a-50a). SSR 82-55 provided, inter alia, that

the combined effect of several impairments would not be

considered unless each such impairment, considered sepa-

rately, was severe. See also 20 C.F.R. 404.1522, 416.922

(1984). SSR 82-55 was superseded by statutory amendments,

effective December 1, 1984, that require the consideration of

the combined effect of several impairments (see page 8 &

note 3, infra), and SSR 82-55 therefore has been formally

rescinded (SSR 85-III-II, at 47 (Apr. 1985)). As a result,

this aspect of the district court’s decision is not in issue here.

8

efits to class members and to readjudicate those

claims; and to reinstate benefits, as of June 22, 1984,

to all class members whose benefits were terminated

(id. at 71a-74a).

3. In a brief order dated July 22, 1985, the dis-

trict court denied the Secretary’s motion to vacate

the preliminary injunction, rejecting the contention

that the severity step of the sequential evaluation

process was ratified by the Social Security Disability

Benefits Reform Act of 1984, Pub. L. No. 98-460,

98 Stat. 1794 et seg. (App., infra, 89a-91a). Section

4 of the 1984 Act requires the Secretary, effective

December 1, 1984, to consider the combined effect of

impairments in determining whether the claimant’s

impairments are severe (98 Stat. 1800-1801).*° The

district court acknowledged that Congress approved

the sequential evaluation process when it passed the

1984 Act, but it concluded that Congress did not

actually validate the severity step itself (App., infra,

9la).

4. The court of appeals affirmed the preliminary

injunction and the district court’s refusal to vacate

3 Subsections (a) and (b) of Section 4 of the 1984 Act (98

Stat. 1800) add a new paragraph (C) to Section 223(d) of

the Social Security Act (42 U.S.C. (Supp. II) 423(d) (2)) and

a new paragraph (G) to Section 1614(a) (3) of that Act (42

U.S.C. (& Supp. II) 1882c(a) (3)). Each paragraph requires

the Secretary, when considering whether a claimant’s impair-

ment or impairments “are of a sufficient medical severity that

[they] could be the basis of eligibility,” to “consider the com-

bined effect of all of the individual’s impairments without re-

gard to whether any such impairment, if considered sepa-

rately, would be of such severity.” Subsection (c) (98 Stat.

1801) provides that these amendments “shall apply with

respect to determinations made on or after the first day of

the first month beginning after 30 days after the date of the

enactment of this Act.”

9

that injunction (App., infra, la-15a). The court of

appeals acknowledged the Secretary’s arguments that

the challenged regulations “are fully consistent with

the Act” and that the district court “should have

deferred to the Secretary’s longstanding view that

medical evidence alone may justify a finding that

the claimant is not disabled within the meaning of

the Act” (id. at 10a). But “[w]hether or not these

substantive contentions may prevail on the ultimate

decision of the merits of [respondents’] claims,” the

court stated, the preliminary injunction should not

be disturbed because, in its view, the district court

did not abuse its discretion in entering the injunction

(id. at.10a-lla). In a brief discussion that did not

mention the origins of the relevant statutory and reg-

ulatory provisions, the court of appeals simply stated

that the district court had not applied “erroneous

legal principles” regarding preliminary injunctions

generally (id. at 1la-12a). The court also was “not

persuaded” (id. at 12a) that the legislative history

of the 1984 Act rendered the preliminary injunction

improper, observing that “in the absence of greater

clarity,” the district court was not required to con-

clude that the legislative history constituted a “defin-

itive ratification” of the principle embodied in the

severity regulations that benefits may be denied with-

out a specific consideration of the claimant’s age, ed-

ucation, and work experience (id. at 12a, 14a).

REASONS FOR GRANTING THE PETITION

1. The Court has granted certiorari in Bowen v.

Yuckert, No. 85-1409 (May 19, 1976), to consider

the validity of the regulations under which Social

Security benefits may be denied if the claimant does

not have a medically “severe” impairment. There is

no occasion for plenary review of that issue here as

10

well. The Court therefore should hold the petition

in this case and dispose of it as appropriate in light

of its decision in Yuckert.

2. a. Aside from the erroneous ruling below re-

garding the validity of the severity regulations, the

injunction affirmed by the court of — was im-

proper in two other respects: :

First, the district court erroneously included in

the class and granted relief to numerous claimants

who did not exhaust their administrative remedies.

As the district court appears to have recognized

(App., infra, 29a-30a & n.19), respondents’ challenge

to the validity of the severity regulations is not at

all collateral to their claims for benefits; that chal-

lenge goes to the very basis of the administrative

decisions denying their claims. Moreover, respond-

ents challenge not a “secret” policy, as the Court

found in Bowen v. City of New York, No. 84-1923

(June 2, 1986), slip op. 12-18, 17, but a policy em-

bodied in public regulations and elaborated upon in

formal Social Security Rulings. Similarly, although

the Court sustained the district court’s findings in

City of New York that the class members would

suffer a medical setback if they were required to

exhaust their administrative remedies, such that the

pursuit of administrative remedies would itself af-

firmatively cause harm (compare FTC v. Standard

Oil Co., 449 U.S. 232, 242, 244 (1980) ), in this case

the injuries respondents allege are the financial con-

sequences that result from the denial of their claims

for benefits on the merits at a preliminary stage of

the administrative review process. If those conse-

quences, which Congress must have anticipated, were

sufficient to constitute “irreparable injury” that per-

mitted a court to excuse the failure by claimants to

pursue their administrative remedies, the exhaustion

11

requirement under 42 U.S.C. 405(g) would be largely

vitiated under the disability and SSI programs.*

Second, although the court labeled its order a “pre-

liminary injunction,” the relief granted went far

beyond “the usual ‘prohibitory’ injunction which

merely freezes the positions of the parties until the

court can hear the case on the merits.” Heckler v.

Lopez, 463 U.S. 1328, 1833 (1983) (Rehnquist, Cir-

cuit Justice). The district court, affirmed by the

court of appeals, has barred the Secretary from uti-

lizing the severity regulations in adjudicating all dis-

ability claims in New York, even though neither court

has finally ruled on the validity of the regulations.

Indeed the court of appeals relied on the supposedly

“preliminary” nature of the relief to avoid address-

ing the merits of the Secretary’s arguments. As a

practical matter, that relief is not “preliminary” for

the individual claimants affected, because their claims

must be adjudicated, and either granted or denied,

without reference to the challenged regulations. Cf.

Heckler y. Redbud Hospital District, No. A-32 (July

24, 1985), slip op. 5-6 (Rehnquist, Circuit Justice),

motion to vacate denied (Aug. 28, 1985). Moreover,

the regulations the Secretary is prohibited from ap-

plying rest on a principle—that benefits may be

denied on the basis of medical evidence alone, with-

out a specific consideration of the claimant’s age,

education, and work experience—that has been an

integral part of the disability program virtually since

* Congress did not contemplate any such exception from ex-

haustion requirements for disability or SSI claimants, because

it specifically directed that judicial review would be available

under both programs in the same manner as was then generally

provided in 42 U.S.C. 405(g), which requires a “final decision”

as a prerequisite to judicial review. See 42 U.S.C. (& Supp.

II) 423(d), 1883 (c) (3).

12

its inception and has been embodied in formal regu-

lations for more than 25 years. See Yuckert Pet.

11-16. In addition to this broad prospective relief, the

courts below also erred in requiring, incident to a

supposediy “preliminary” injunction, the readjudi-

cation of the claims of all class members whose ben-

efits were denied in reliance on the severity regula-

tions and the reinstatement of benefits to class mem-

bers whose benefits were terminated.

b. Although we believe that the court of appeals

clearly erred in these additional respects when it

affirmed the district court’s preliminary injunction,

we do not seek review at this time on the issues of

exhaustion of administrative remedies and the proper

basis and scope of a preliminary injunction in this

setting. The retroactive relief ordered by the district

court for class members whose benefits were denied

or terminated was not stayed, and that relief is now

being accomplished.* All that then will remain is the

prospective effect of the injunction. If the Court sus-

5 Independently of the preliminary injunction affirmed by

the court of appeals, all class members in this case whose »

benefits weve terminated are entitled under Section 2(d) of

the 1984 Act (98 Stat. 1797) to have their claims reopened

and readjudicated because they also were members of the

certified class in Schisler v. Heckler, 107 F.R.D. 609 (W.D.N.Y.

1984), aff'd, 787 F.2d 76 (2d Cir. 1986) (petition for rehear-

ing pending), which was an action raising the question

whether medical improvement must be shown in order for a

claimant’s benefits to be terminated. In addition, class mem-

bers in this case who sought benefits on the basis of a mental

impairment have also been affected by the new standards

under Section 5 of the 1984 Act (98 Stat. 1801) for eval-

uating such claims. See Bowen v. City of New York, slip

op. 18 n.14. We have been informed by the Department of

Health and Human Services that the claims of class members

affected by Sections 2 and 5 of the 1984 Act are now being

readjudicated.

13

tains the validity of the severity regulations in Yuck-

ert, the preliminary injunction in the instant case

must be reversed on the merits, irrespective of the

other errors committed by the court below. On the

other hand, if the Court were to hold in Yuckert

that the severity regulations are invalid, the Secre-

tary of course would follow that ruling in New York,

as elsewhere, thereby mooting the other questions re-

garding the propriety of the preliminary injunction

in this case.

CONCLUSION

The petition for a writ of certiorari should be held

and disposed of as appropriate in light of the Court’s

decision in Bowen v. Yuckert, cert. granted, No. 85-

1409 (May 19, 1986).

Respectfully submitted.

CHARLES FRIED

Solicitor General

JULY 1986

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 1985

Docket Nos. 84-6288, -6302, -6304, -6306

Nos. 611, 612, 613, 614

DAvID DIXON, RICARDO RAMIREZ, OPHELIA CASEY,

DOMINGA CARRASQUILLO, JOANNE LOCKETT, EU-

LALIA TEREZ, CARMEN FELICIANO, and TOMASINA

GONZALEZ, Individually and on Behalf of All

Others Similarly Situated, PLAINTIFFS-APPELLEES

—and—

THE STATE OF NEW YORK AND CESAR PERALES, as

Commissioner of the New York State Department

of Social Services, PLAINTIFFS-INTERVENORS-APPEL-

LEES

v.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT-APPELLANT

Argued: December 18, 1985 Decided: Mar. 7, 1986

Before: OAKES, KEARSE, and PIERCE, Circuit

Judges.

(la)

2a

KEARSE, Circuit Judge:

The Secretary of Health and Human Services

(“Secretary”) appeals from orders of the United

States District Court for the Southern District of

New York, Morris E. Lasker, Judge, granting and

refusing to vacate a preliminary injunction that,

inter alia, forbids the Secretary to deny or termi-

nate disability benefits on the basis of 20 C.F.R.

$§ 404.1520(c), 404.1521, 416.920(c), and 416.921

(1984), the so-called “severity regulations” used by

the Secretary in evalauting claims for disability ben-

efits under the Social Security Disability Insurance

program established by Title II of the Social Security

Act, as amended (the “Act’”), 42 U.S.C. 401 et seg.

(1982), and the Supplementa] Security Income pro-

gram established by Title XVI of the Act, as amended,

42 U.S.C. § 1381 et seg. (1982). In an opinion re-

ported at 589 F. Supp. 1494 (1984), the court

granted the preliminary injunction after finding that

plaintiffs had demonstrated a likelihood of success

on the merits of their claim that the severity regu-

lations violate the Act. The court denied the Secre-

tary’s subsequent motion to vacate the preliminary

injunction, rejecting the contention that amendments

to the Act enacted after entry of the preliminary

injunction constituted a legislative ratification of the

severity regulations. On appeal, the Secretary con-

tends that the injunction is improper because the reg-

ulations are consistent with the Act and because the

court failed to give sufficient deference to the Secre-

tary’s longstanding interpretation of the Act. We

conclude that the granting of the injunction was not

an abuse of the court’s discretion and we therefore

affirm.

3a

BACKGROUND

In determining the eligibility of applicants for dis-

ability benefits under Title II or Title XVI of the Act,

the Secretary uses a five-step sequential evaluation

process, of which the severity regulations are a part.

Under this process, only certain types of evidence are

considered at each step of the evaluation. At issue in

the present case is step 2; a failure to meet the dis-

ability criteria set by step 2 results in a denial of

benefits without proceeding to any later step. In

City of New York v. Heckler, 742 F.2d 729, 732

(2d Cir. 1984), cert. granted, 106 S. Ct. 57 (1985),

we described the process as follows:

The first step in the sequential process is a

decision whether the claimant is engaged in

“substantial gainful activity.” If so, benefits are

denied. 20 C.F.R. §§ 404.1520(a), (b), 416.920

(a), (b) (1983). If not, the second step is a

decision whether the claimant’s medical condi-

tion or impairment is “severe.” If not, benefits

are denied. 20 C.F.R. §§ 404.1520(c), 416.920

(c). If the impairment is “severe,” the third

step is a decision whether the claimant’s impair-

ments meet or equal the “Listing of Impair-

ments” set forth in subpart P, app. 1, of the so-

cial security regulations, 20 C.F.R. §$§ 404.1520

(d), 416.920(d). These are impairments ac-

knowledged by the Secretary to be of sufficient

severity to preclude gainful employment. If a

claimant’s condition meets or equals the “listed”

impairments, he or she is conclusively presumed

to be disabled and entitled to benefits. If the

cliamant’s impairments do not satisfy the “List-

ing of Impairments,” the fourth step is assess-

_—*

y—

4a

ment of the individual’s “residual functional ca-

pacity,” .e., his capacity to engage in basic work

activities, and a decision whether the claimant’s

residual functional capacity permits him to en-

gage in his prior work. If the residual func-

tional capacity is consistent with prior employ-

ment, benefits are denied. 20 C.F.R. §§ 404.1520

(d), 416.920(e). If not, the fifth and final step

is a decision whether a claimant, in light of his

residual functional capacity, age, education, and

work experience, has the capacity to perform

“alternative occupations available in the national

economy.” Decker v. Harris, 647 F.2d 291, 298

(2d Cir. 1981); 20 C.F.R. §§ 404.1520(f),

416.920(f). If not, benefits are awarded.

At the times pertinent to the proceedings below, step

2 of the sequential process was set forth in the Sec-

retary’s regulations as follows:

You must have a severe impairment. If you do

not have any impairment(s) which significantly

limits your physical or mental ability to do basic

work activities, we will find that you do not have

a severe impairment and are, therefore, not dis-

abled. We will not consider your age, education,

and work experience.

20 C.F.R. §§ 404.1520(e), 416.920(c) (1984).

The plaintiffs in these actions, which have been

consolidated for appeal, are persons whose applica-

tions for disability benefits were denied by the Sec-

retary at the second step of the evaluation process

on the ground that the medical evidence alone as to

any single impairment, without regard to the claim-

ants’ age, education, employment experience, ability

to return to prior work, or other vocational factors,

5a

failed to establish the existence of an impairment

that significantly limited their ability to perform

basic work activities. To the extent pertinent here,

the plaintiff class consists of persons in the State of

New York who have been or will be denied disability

benefits under Title II or Title XVI of the Act or

who have had or will have such benefits terminated

on the basis of the severity regulations. Plaintiffs

contend, inter alia, that the Act requires considera-

tion of vocational factors such as age, education, and

work experience, before an applicant may be found

not disabled, and that Step 2 of the Secretary’s proc-

ess is therefore inconsistent with the Act. They also

contend that the Secretary is required to consider

their impairments in combination and is not to re-

quire that a single impairment be sufficiently severe

to constitute a disability without consideration of

their other impairments.

A. The Granting of the Preliminary Injunction

Following the commencement of the litigation,

plaintiffs moved for a preliminary injunction —

(1) prohibiting the Secretary from denying or

terminating Social Security or SSI benefits due

to the asserted non-severity of the claimant’s im-

pairments; (2) directing the Secretary to re-

store benefits to all members of the pruposed

class who (a) received decisions, finding them

no longer eligible for benefits that were rendered

at. any stage of the administrative process, on

July 20, 1983 or thereafter, or (b) had pending

challenges to such decisions on July 20, 1983;

and (38) directing the Secretary to reopen the

applications of all class members whose applica-

tions for benefits have been denied by the Sec-

6a

retary, at any stage of the administrative proc-

ess, since July 20, 1988, and to redetermine these

applications without reference to the threshold

severity test.

589 F. Supp. at 1501. Applying only the more ex-

acting branch of this Circuit’s standard for the

granting of preliminary injunctive relief, see Jack-

son Dairy, Inc. v. H.P. Hood & Sons, 596 F.2d 70,

72 (2d Cir. 1979) (per curiam) (moving party must

show, in addition to irreparable injury, either (a)

likelihood of success on the merits, or (b) fair

ground for litigation plus a balance of hardships

tipping decidedly in his favor), the court granted

the motion on the ground that plaintiffs had estab-

lished a likelihood of success on the merits of their

claims and had shown that they would suffer ir-

reparable harm in the absence of preliminary injunc-

tive relief. In considering plaintiffs’ likelihood of

succeeding on the merits of their claims, the court

noted that the scope of its review, in light of the

Secretary’s authority to establish regulations imple-

menting the disability provisions of the Act, was

limited to a determination of whether the regulations

that had been promulgated “ ‘exceeded the Secre-

tary’s statutory authority and whether they [were]

arbitrary and capricious.’” 589 F. Supp. at 1502

(quoting Heckler v. Campbell, 461 U.S. 458, 466

(1983) ).

The court began by looking at the language of the

definition of disability found in 42 U.S.C. §§ 423(d)

and 1382¢(a) (3). Sections 423(d) (1) (A) and 1382c

(a) (3) (A) define “disability” as the inability

to engage in any substantial gainful activity by

reason of any medically determinable physical or

Ta

mental impairment which can be expected to re-

sult in the death or which has lasted or can be

expected to last for a continuous period of not

less than 12 months....

Sections 423(d) (2) (A) and 1382c(a) (3) (B) go on

to state that “[f]or purposes of” this definition, a

person will be found disabled

only if his physical or mental impairment or im-

pairments are of such severity that he is not

only unable to do his previous work but cannot,

considering his age, education, and work experi-

ence, engage in any other kind of substantial

gainful work....

Reading the two subsections together, the court con-

cluded that the statute appears to require that a

claimant’s age, education, and work experience be

considered in determining whether or not he is dis-

abled. The court noted that on at least two occasions

this Court had reserved decision on the question of

tne validity of the severity regulations, see Keith v.

Heckler, 732 F.2d 1089, 1094 (2d Cir. 1984), and

Chico v. Schweiker, 710 F.2d 947, 953 (2d Cir.

1983), and that in Chico we had noted “a seeming

conflict between the letter of § 423(d) (2) (A), on the

one hand, and, on the other, the Secretary’s under-

standable desire to supply . . . some threshold that

a claimant must pass before the Social Security Ad-

ministration is required either to apply the Appendix

2 guidelines or to call vocational experts,” 710 F.2d

at 953. The district court concluded that since the

statute speaks of “an impairment (or impairments)

which is ‘of such severity that’ the claimant cannot,

‘considering his age, education and work experience,’

perform any substantial gainful work,” 589 F. Supp.

8a

at 1502 (emphasis in opinion), the Secretary had

separated two aspects of the disability inquiry that

were intertwined in the statute, and that step 2 of

the severity regulations foreclosed consideration of

one aspect that the statutory definition required to

be taken into account.

The court rejected the Secretary’s contention that

her interpretation of the statute reflected Congress’

true intent, noting that in other sections of the

statute, such as 42 U.S.C. § 423(d)(2)(B), Con-

gress’s intent to permit the denial of benefits without

consideration of vocational characteristics had been

expressed unambiguously. It also rejected the conten-

tion that the severity regulations merely serve to

screen out claims in which the impairment is plainly

de minimis, finding that that contention was in-

consistent with the language of the regulations. The

court further noted that although the severity regula-

tions speak of the claimant’s ability to perform basic

work-related activities, the Secretary means by this ©

such activities as walking, standing, sitting, lifting,

following instructions, and responding appropri-

ately to coworkers and supervisors, see 20 C.F.R.

§ 404.1521(b), and that the term “basic” work-

related activities is not used to refer to the claimant’s

vocational characteristics.

In sum, the court concluded that plaintiffs would

likely establish that the severity regulations were in-

consistent with the definition of disability enacted by

Congress and that the authority of the Secretary

thus to interpret the statute did not extend so far.

B. The Denial of the Motion to Vacate

Some two months after the granting of plaintiffs’

motion for a preliminary injunction, Congress passed

9a

the Social Security Disability Benefits Reform Act of

1984 (the “Reform Act’), Pub. L. No. 98-460, 98

Stat. 1794. The Secretary, who had filed notices of

appeal from the order granting the preliminary in-

junction, withdrew those appeals without prejudice

to their reinstatement and moved for an order vacat-

ing so much of the preliminary injunction as, inter

alia, enjoined use of the severity regulations, on the

ground that the Reform Act’s addition of a new sub-

paragraph (C) to 42 U.S.C. § 423(d) (2), together

with Congress’s failure explicitly to repeal the se-

verity regulations, constituted a legislative ratifica-

tion of the severity regulations. The new provision

relied on reads as follows:

In determining whether an individual’s physi-

cal or mental impairment or impairments are of

a sufficient medical severity that such impair-

ment or impairments could be the basis of eligi-

bility under this section, the Secretary shail con-

sider the combined effect of all of the individual’s

impairments without regard to whether any such

impairment, if considered separately, would be

of such severity. If the Secretary does find a

medically severe combination of impairments, the

combined impact of the impairments shall be con-

sidered throughout the disability determination

process. v

Pub. L. No. 98-460, § 4(a) (1), 98 Stat. 1800.

The court denied the Secretary’s motion, noting

evidence that Congress had deliberately declined to

express support for the severity regulations and con-

cluding that the new provision was intended simply

to eliminate the Secretary’s practice of refusing to

consider impairments in combination:

10a

“The language of the new subsection added by

the 1984 Act does no more than require that the

Secretary discontinue her policy of refusing to

consider the combined effect of non-severe im-

pairments. Furthermore, the Conference Com-

mittee rejected the language of the Senate Fi-

nance Committee Report which expressed some

support for the Secretary’s severity policies.

While the Conference Committee Report endorses

the Secretary’s sequential evaluation process, it

does not validate the severity test used by the

Secretary.”

Decision dated July 22, 1985 (quoting McDonald v.

Heckler, 612 F. Supp. 298, 297 (D. Mass. 1985) ).

The Secretary appealed from the denial of its

motion to vacate and reinstated its prior appeals

from the order granting the preliminary injunction.

All of the appeals have been consolidated herein.

II. DISCUSSION

On appeal, the Secretary argues principally that

the district court’s grant of preliminary injunctive

‘relief was improper because the severity regulations

are fully consistent with the Act and because, in any

event, the court should have deferred to the Secre-

tary’s longstanding view that medical evidence alone

may justify a finding that the claimant is not dis-

abled within the meaning of the Act. Whether or not

these substantive contentions may prevail on the

ultimate decision of the merits of plaintiffs’ claims,

we are unpersuaded that the preliminary injunction

should be disturbed.

The proper standard for appellate review of an

order of the district court granting a preliminary in-

lla

junction is whether or not the order constituted an

abuse of judicial discretion. Doran v. Salem Inn, Inc.,

422 U.S. 922, 931-32 (1975); Dallas Cowboys Cheer-

leaders, Inc. v. Pussycat Cinema, Ltd., 604 F.2d 200,

206 (2d Cir. 1979). Such an abuse of discretion may

take the form of the application of erroneous legal

principles, or error in findings of fact, or error in

the substance or form of the injunction. E.g., Coca-

Cola Co. v. Tropicana Products, Inc., 690 F.2d 312,

315 (2d Cir. 1982). We are unpersuaded that the

district court abused its discretion in granting pre-

liminary injunctive relief.

First, we note that the Secretary does not contend

that the court erred with respect to any finding of

fact, or with respect to the issue of irreparable in-

jury, or with respect to the form of the injunction.

Her contentions are, rather, that the court failed to

give sufficient deference to the Secretary’s interpreta-

tion of the Act and adoption of regulations to imple-

ment the Act as thus interpreted. We find in these

contentions no ground for reversal of the preliminary

injunction. It is clear that the court recognized the

applicable legal principle that substantial deference

must be given to the Secretary’s views. It noted that

its task was limited to a determination of whether the

Secretary had exceeded her statutory authority and

whether the regulations were arbitrary and capri-

cious. It thus appears that the court made its deci-

sion within the proper legal framework.

Nor do we find an abuse of discretion in the court’s

comparison of the regulations with the Act in light

of the Secretary’s considerable discretion. The con-

clusion the court reached as to the likelihood that

the two are in conflict does not bespeak any applica-

tion of erroneous legal principles. This Court itself

12a

has noted the apparent conflict between the statutory

janguage and the severity regulations, see Chico v.

Schweiker, 710 F.2d at 953, and we have, as the

district court noted, twice reserved for another day

the question of whether the severity regulations vio-

late the Act.

Further, we are not persuaded that the legislative

history of the Reform Act should have been viewed

by the district court as a clear ratification of the

severity regulations. As the district court’s opinion

noted, there was some support in the Senate Finance

Committee’s report for the Secretary’s severity poli-

cies. That report stated that the Committee’s pro-

posed amendment of the Act, to require the Secretary

to consider the combined effect of all of the indi-

vidual’s impairments, was not intended to change the

existing sequential evaluation process and would “re-

quire[] the Secretary to determine first, on a strictly

medical basis and without regard to vocational fac-

tors, whether the individual’s impairments, con-

sidered in combination, are medically severe. If they

are not, the claim must be disallowed.” S. Rep. No.

466, 98th Cong., 2d Sess. 22 (1984). There was

equally, however an indication that the House of

Representatives did not approve of a total disregard

of vocational factors at step 2. Thus, the report of

the House of Representatives Ways and Means Com-

mittee stated as follows:

The current “sequential evaluation process” al-

lows such a determination [that impairments are

slight enough to warrant a presumption that

work ability is not seriously affected], and the

committee does not wish to eliminate or seri-

ously impair use of that process. However, the

committee notes that the Secretary has already

l3a

planned to re-evaluate the current criteria for

non-severe impairments, and urges that all due

consideration be given to revising those criteria

to reflect the real impact of impairments upon

the ability to work.

H.R. Rep. No. 618, 98th Cong., 2d Sess. 8, reprinted

in 1984 U.S. Code Cong. & Ad. News 3038, 3045

(emphasis added). Neither the Senate’s view nor

the House of Representatives’ views was incorporated

into the Conference Committee’s report. Rather, that

report stated as follow:

The conferees also believe that in the interests

of reasonable administrative flexibility and effi-

ciency, a determination that an individual is not

disabled may be based on > judgment that an

individual has no impairment, or that the medi-

cal severity of his impairment or combination of

impairments is slight enough to warrant a pre-

sumption, even without a full evaluation of voca-

tional factors, that the individual’s ability to

perform SGA is not seriously affected. The cur- ~

rent “sequential evaluation process” allows such

a determination and the conferees do not intend

to either eliminate or impair the use of that

process. The conferees note that the Secretary

has stated that it is her plan to reevaluate the

current criteria for nonsevere impairments and

expect that the Secretary will report to the Com-

mittes on the results of this evaluation.

H.R. Conf. Rep. No. 1039, 98th Cong., 2d Sess. 30,

reprinted in 1984 U.S. Code Cong. & Ad. News 3080,

3088 (emphasis added). Precisely what was meant

by the apparent endorsement of findings of no dis-

ability without a “full” evaluation of vocational fac-

l4a

tors is not clear. The implication would appear to be

that the conferees would endorse some consideration

of those factors at step 2 of the evaluation process.

In any event, in the absence of greater clarity, the

district court was hardly required to conclude that

the legislative history constituted a definitive ratifica-

tion of step 2’s apparently complete disregard of

vocational factors.

In all the circumstances, we are not prepared to

say that the district court was wrong to find that

plaintiffs had established a likelihood of success on

their claims or that it abused its discretion in grant-

ing preliminary injunctive relief.

Having thus concluded that the preliminary in-

junction should not be overturned, we are nonetheless

constrained to note that the Reform Act is not en-

tirely without effect in this case. As noted by the

district court, the Reform Act’s addition of § 423(d)

(2)(C) now expressly requires that the Secretary

give consideration to the combined effect of impair-

ments that individually may be nonsevere. Several

of the plaintiffs in these actions had claimed dis-

ability on the basis of a number of impairments that

the Secretary refused to consider in combination.

The district court noted such denials as to three of

the four named plaintiffs in the Dixon action; the

particulars of the claims of the plaintiffs in the other

actions were not discussed.

The import of the Reform Act thus may well be

that the evaluation of the claims of most of the class

representatives will be extended beyond step 2 of the

sequential evaluation process because of the severity

of their impairments viewed in combination, without

regard to the validity vel non of step 2 of the severity

regulations. The Secretary does not appear to have

15a

moved for reconsideration of the preliminary injunc-

tion on this basis, however, and we thus decline to

overturn the injunction on this basis. We do note,

however, that, given the prudential concern for ad-

judicating challenges to agency determinations with-

out unnecessarily reaching such global questions as

the validity of promulgated regulations, this aspect

of the Refcrm Act may well have implications for

the eventual determination of the case on its merits,

for the relief ultimately to be granted, for the defini-

tion of the class of plaintiffs attacking the severity

regulations, and for the appropriateness of the pres-

ent named plaintiffs to represent the certified class.

None of these questions, however, is now before this

Court.

CONCLUSION

The orders of the district court granting and

refusing to vacate the preliminary injunction are

affirmed.

l6a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

At a stated Term of the United States Court of

Appeals for the Second Circuit, held at the United

States Courthouse in the City of New York, on the

seventh day of March one thousand nine hundred

and eighty-six.

Docket Nos. 84-6288, -6302, -6304, -6306

Davip Dixon, R:cARDO RAMIREZ, OPHELIA CASEY,

DOMINGA CARRASQUILLO, JOANNE LOCKETT, Ev-

LALIA TEREZ, CARMEN FELICIANO, and TOMASINA

GONZALEZ, Individually and on Behalf of All

Others Similarly Situated, PLAINTIFFS-APPELLEES

—and—

THE STATE OF NEW YORK and CESAR PERALES, as

Commissioner of the New York State Department

of Social Services, PLAINTIFFS-INTERVENORS, APPEL-

LEES

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT-APPELLANT

APPEAL FROM THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN

DISTRICT OF NEW YORK

Le ee erate

l7a

[Filed Mar. 7, 1986]

MANDATE

Present: HON. JAMES L. OAKES,

HON. AMALYA L. KEARSE,

HON. LAWRENCE W. PIERCE,

Circuit Judges,

This cause came on to be heard on the transcript

of record from the United States District Court for

the Southern District of New York, and was argued

by counsel.

ON CONSIDERATION WHEREOF, it is now

hereby ordered, adjudged, and decreed that the orders

be and they hereby are affirmed in accordance with

the opinion of this court with costs to be taxed

against the appellant.

Elaine B. Goldsmith

Clerk

/8/ Edward J. Guardaro

EDWARD J. GUARDARO

Deputy Clerk

18a

APPENDIX C

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

No. 83 Civ. 7001 (MEL)

DAVID DIXON, RICARDO RAMIREZ, OPHELIA CASEY,

DOMINGA CARRASQUILLO, JOANNE LOCKETT, indi-

vidually and on behalf of all others similarly situ-

ated, PLAINTIFF ‘

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

No. 83 Civ. 8264 (MEL)

EULALIA TEREZ, individually and on behalf

of all others similarly situated, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

No. 83 Civ. 8609 (MEL)

CARMEN FELICIANO, individually and on behalf

of all others similarly situated, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

19a

No. 84 Civ. 110 (MEL)

TOMASINA GONZALEZ, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

June 22, 1984

LASKER, District Judge.

L

These cases present a question whose determina-

tion has twice been reserved by the Court of Ap-

peals for this Circuit:* whether the denial of fed-

eral disability claims under the so-called “severity

regulation” adopted by the Secretary of Health and

Human Services (the “Secretary”) violates the So-

cial Security Act (the “Act’’) because the regulation

conflicts with the definition of “disability” contained

in the Act. Under the regulation,’ claims for dis-

ability benefits under the Supplemental Security In-

come (“SSI”) or Old Age Survivors and Disability

Insurance (“OASDI”’) programs are denied without

regard to the claimant’s age, education, employment

experience, ability to return to prior work, or other

1 Keith v. Heckler, 732 F.2d 1089 at 1093-1094 (2d Cir.

1984) ; Chico v. Schweiker, 710 F.2d 947, 952-58 (2d Cir.

1983).

220 C.F.R. §§ 404.1520(c), 416.920(c) (1983).

20a

vocational factors, if the claimant’s impairment is

judged to be “not severe” based on medical criteria

alone. In recent weeks, two judges of this Court,

ruling on individual Social Security appeals, have re-

versed the Secretary’s denial of benefits under the

severity regulation, holding that the severity regula-

tion conflicts with the statutory definition of disabil-

ity and is invalid.* In the instant cases, the individ-

ual plaintiffs, on behalf of themselves and all other

similarly situated, together with the State of New

York and the Commissioner of the New York State

Department of Social Services, seek declaratory and

injunctive relief against the Secretary’s use of the

severity regulation in valuating disability claims, and

against her policy of refusing to consider the com-

bined effects of impairments found to be “non-

severe.”’ *

Jurisdiction is alleged under 42 U.S.C. §§ 405(g)

and 13888(c) (3), which provide for judicial review

of the Secretary’s decisions as to disability benefits;

28 U.S.C. § 1831 (federal question jurisdiction), and

3 Glover v. Heckler, 588 F.Supp. 956 (S.D.N.Y. 1984);

Boiano v. Heckler, 586 F.Supp. 782 (S.D.N.Y. 1984). The

regulation was also held invalid in a decision in the Eastern

District of California which granted class certification and

preliminary injunction motions. Smith v. Heckler, Civ. No.

8-83-1609, slip op., (E.D. Cal., June 6, 1984). The opinion

was brought to our attention immediately prior to the issu-

ance of this memorandum.

* Plaintiffs also contend that the Secretary adopted the

severity regulation without prior notice and opportunity for

public comment, as required by the Administrative Procedure

Act (“APA”), 5 U.S.C. § 553 and that the Secretary’s failure

to establish ascertainable standards for determining whether

an impairment is “severe” violates their constitutional right

to due process.

21a

28 U.S.C. § 1361 (mandamus jurisdiction).* This

memorandum addresses plaintiffs’ motion for class

certification and for a preliminary injunction. In a

separate memorandum issued this date, motions to

intervene by the State of New York, the Commis-

sioner of the New York State Department of Social

Services, and claimants Ricardo Ramirez, Ophelia

Casey, Dominga Carrasquillo, and Joanne Lockeit

have been granted.

A. Statutory and Regulatory Background

The OASDI and SSI programs provide for the pay-

ment of benefits to disabled persons. Under both

programs, a person is considered disabled if he or

she is unable

“to engage in any substantial gainful activity

by reason of any medically determinable physi-

cal or mental impairment which can be expected

to result in death or which has lasted or can be

expected to last for a continuous period of not

less than 12 months...” °

The Act provides that “for purposes of” Ride

this definition, an individual

“shall be determined to be under a disability only

if his physical or mental impairment or impair-

ments are of such severity that he is not only

unable to do his previous work but cannot, con-

sidering his age, education, and work experience,

5In view of our conclusions in this decision as to the

existence of jurisdiction under section 405 (g) and 1383 (c) (3),

we need not address the parties’ arguments as to the other

sources of jurisdiction asserted by plaintiffs.

*42 U.S.C. §§ 423(d) (1) (A) & 1882c(a) (3) (A).

22a

engage in any other kind of substantial gainful

work which exists in the national economy, re-

gardless of whether such work exists in the im-

mediate area in which he lives, or whether a

specific job vacancy exists for him, or whether

he would be hired if he applied for work... .”*

The Secretary is authorized to establish rules and

regulations, consistent with the Act, governing the

determination of disability claims.*

Before 1978, the Secretary’s regulations ° set forth

a general discussion of the factors to be applied in

evaluating disability claims. In pertinent part, it

was stated that disability

“is determined from all the facts of [the] case.

Primary consideration is given to the severity of

the individual’s impairment. Consideration is

also given to such other factors as the individ-

ual’s age, education, and work experience. Medi-

cal considerations alone can justify a finding that

the individual is not under a disability where the

only impairment is a slight neurosis, slight im-

pairment of sight or hearing, or other slight ab-

normality or a combination of slight abnormal-

ities. On the other hand, medical considerations

alone . . . can, except where other evidence rebuts

a finding of ‘disability’ . . . justify a finding that

the individual is under a disability where his im-

742 U.S.C. §§ 423(d) (2) (A) & 1882c(a) (3) (B).

8 42 U:S.C. 8§ 405 (a) & 1383 (d) (1).

® This opinion uses the word “Secretary” to refer both to

the current Secretary and her predecessors, as the context

may require.

23a

pairment .. . is listed in the appendix to the

subpart. ...” *°

In 1978 the Secretary revised the regulations, es-

tablishing a five-step sequential procedure for deter-

mining whether a claimant is disabled.” These reg-

ulations were modified again in 1980, primarily to

make their language clearer.

Under the existing regulations, if the claimant is

found not to be disabled under any one of the sequen-

tial tests, the analysis ends and the remaining steps

of the analysis are not completed. As the first step,

the Secretary ascertains whether the claimant is

working; if so, a finding of “not disabled” follows.

Next (step 2), the Secretary determines, solely on

the basis of medical factors, whether the claimant

has a “severe” impairment which “significantly lim-

its [his] physical or mental ability to do basic work

activities.” The regulation specifically provides that

at this step the Secretary “will not consider your age,

education, and work experience.” ” If the claimant

10 20 C.F.R. § 404.1520(a) (1968).

1120 C.F.R. §§ 404.1520, 416.920 (1983).

1220 C.F.R. §§ 404.1520(c), 416.920(c) (1983). The regu-

lation defines “basic work activities to include:

“(1) Physical functions such as walking, standing

sitting, lifting, pushing, pulling, reaching, carrying, or

handling;

(2) Capacities for seeing, hearing, and speaking;

(3) Understanding, carrying out, and remembering

simple instructions ;

(4) Use of judgment.

(5) Responding appropriately to supervision, co-

workers and usual work situations; and

~(6) Dealing with changes in a routine work setting.”

§ 404.1521 (b) ; 416.921 (b).

24a

is determined to have a “severe” impairment under

this definition, the Secretary next considers (step 3)

whether the impairment is one which is listed in

Appendix 1 of the regulations; if so, the claimant

is found to be disabled without requirement of fur-

ther proof that the impairment prevents him from

working. The fourth step comes into play if the

claimant’s impairment, though deemed “severe” un-

der step 2, is not a “listed” impairment under step 3.

In such cases, the Secretary determines whether, de-

spite the claimant’s impairment, he is able to per-

form his past work. If not, the Secretary determines

(step 5) whether, considering the claimant’s age, ed-

ucation, and work experience, his impairment pre-

vents him from doing any other work available in the

national economy. If the claimant cannot, he is found

to be disabled.** In addition to these regulations, the

Secretary issued a Social Security Ruling in 1982

(SSR 82-55) which instructs Social Security admin-

istrators not to consider the combined effects of im-

pairments which do not individually meet the Secre-

tary’s “severity” standard. Accordingly, someone who

suffers several impairments deemed nonsevere will

be denied benefits regardless of their combined ef-

fect. SSR 82-55 also lists 20 specific impairments

which the Secretary has determined are non-severe

per se. Moreover, the ruling is binding on all Social .

Security Administration personnel, including admin-

istrative law judges and the Appeals Council, and

was made effective retroactively to August 20, 1980.

13 See generally Chico v. Schweiker, 710 F.2d 947 (2d Cir.

1983).

25a

B.

The named plaintiffs were found “not disabled”

under the severity regulation (the second step of the

Secretary’s sequential evaluation), and thus were

denied benefits on the grounds that the medical evi-

dence alone failed to establish the existence of an im-

pairment which significantly limited their ability to

perform basic work activities. A description of the

cases of some of the named plaintiffs illustrates the

operation of the Secretary’s policies.

David Dixon suffers pain in his right hip from a

serious fracture which he sustained in an automobile

accident in 1969, and attends the Harlem Rehabilita-

tion Center as an outpaient for six hours a day, five

days a week. He is blind in one eye, (also as a

result of the automobile accident) suffers from a per-

sonality disorder, and has a verbal I.Q. at 68. The

Administrative Law Judge (“ALJ”) found each of

Dixon’s impairments to be non-severe under the sec-

ond step of the five-step disability analysis. As to

the hip fracture, The ALJ found that if Dixon under-

went “intensive therapy” he would “possibly enhance

[sic] his current disability.”” Dixon’s blindness in one

eye was found not to be a severe impairment because

he retained essentially normal sight in his other eye.

As to Digon’s mental capacity and psychological prob-

lems, the ALJ stated that there was “a good possi-

bility” that these problems would not prevent Dixon

from working if he obtained “retraining and some

program to help [him] with his motivation.” Because

the ALJ considered each impairment not to be severe

based on the medical evidence, he did not consider

(and, under the regulation, was not free to con-

sider) whether Dixon was able to return to his last

job (which had ended in 1974), or whether in view

26a

of Dixon’s impairments and his age, education, and

work experience, he was capable of performing any

job in the national economy. There is no indication

that the ALJ considered the combined effect of Dix-

on’s impairments. The Appeals Council affirmed.”

Joanne Lockett worked as an operator and super-

visor for the telephone company for twenty years, un-

til she suffered an acute onset of brain stem syndrome

in October 1981. She has suffered, as the ALJ found,

“severe neurological and psychological impairments”

as a result, manifested in particular by substantial

difficulty with memory. The ALJ found that Lockett

was unable to return to her prior job, and that she

was disabled from October 1981 to December 1982.

However, he decided that she was no longer disabled

as of December 1982 because at that time she began

participating in a sheltered workshop at the Federa-

tion for the Handicapped. In the ALJ’s view, this

participation meant that

“her condition was no longer severe, in that it no

longer significantly limited her ability to engage

in basic work activities or work related functions,

in terms of an ordinary work day on a regular

and continuing day-to-day basic [sic] in the com-

petitive job market.”

He held that, in view of this finding as to non-severity

for the period beginning in December 1982, “it is not

material whether the claimant was then able to sus-

tain any of her past relevant work or any other work

which exists in significant numbers in the national

economy.” ** Her administrative appeal is pending.

4 See Transcript of Proceedings, pp. 3, 7-16.

*° See Hearing Decision, Exhibit C to Affidavit of Nancy

Morawetz, dated January 26, 1984 (“Morawetz Affidavit”).

27a

Dominga Carrasquillo’s impairments of hyperten-

sion, arthritis, chest pain, and pain in her lower ex-

tremities were all found to be non-severe in a very

brief decision by the ALJ who presided at her hear-

ing. Her impairments were not considered in com-

bination. Carrasquillo was 59 years old at the time

of her hearing, has a third grade education, is illit-

erate in English, and last worked in 1975 as a but-

tonhole maker in a factory. None of these factors

was considered, however, because the ALJ found that

her impairments did not meet the “severity” thresh-

old on the basis of medical evidence alone.** Carra-

squillo’s administrative appeal is pending.

Ricardo Ramirez has suffered injuries to his back

in two separate accidents, one in 1961 and one in

1979, and, as the ALJ found, “has a chronic lower

back pain syndrome with degenerative changes at

L5-S1 levels.” His bending and straight leg lifting

are limited to 30 and 20 degrees, respectively. Ra-

mirez is also completely bind in his right eye. The

ALJ found that Ramirez’ impairmerts did not meet

the severity requirement. Accordingly, the ALJ failed

to perform any vocational analysis, noting specifically

that under the regulations

“medical considerations alone can justify a find-

ing that an individual is not under a disability

where the medically determinable impairment is

not severe without consideration of the voca-

tional factors.”

The ALJ did not consider the combined effect of

Ramirez’ impairments. Ramirez was 54 years old

16 See Hearing Decision, ex. D. to Morawetz Affidavit.

28a

at the time of the hearing, with a high school educa-

tion, and has not worked since his last accident.”

The Appeals Council affirmed.

II. Motion for Preliminary Injunction

A.

Preliminary relief is sought by those members of

the proposed class whose benefits were terminated

pursuant to the policies challenged in this action on

or since July 20, 1983, at any stage of the adminis-

trative process, or who had challenges to such deci-

sions pending on July 20, 1983. Because the com-

plaint was filed on September 23, 1983, these class

members all meet the Act’s statute of limitations re-

quiring that actions for judicial review of the Secre-

tary’s decision be filed within 60 days of the date of

the decision.“ However, the sub-class seeking pre-

liminary relief includes claimants whose appeals be-

fore the Appeals Council were still pending and who

therefore have not yet exhausted administrative rem-

edies. Accordingly, we must consider the Secretary’s

argument that the Court is without jurisdiction over

those claimants who have not yet exhausted their ad-

ministrative remedies as required by Section 405(g).

As is often noted, the requirement of exhaustion of

administrative remedies has a “waivable” and a “non-

waivable” element. The non-waivable element re-

quires that a plaintiff present his claim in some form

17 See Hearing Decision, Ex. I to Morawetz Affidavit.

% 42 U.S.C. §§ 405(g), 1883(c). The class actually in-

cludes claimants who received final decisions within 65 days

of the filing of the complaint, because the regulation assumes

that the decision is received within 5 days of its mailing.

to the Secretary. Full exhaustion of administrative

remedies is, however, a “waivable” element. Math-

ews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.

2d 18 (1976). The non-waivable requirement has

been satisfied here. Ali of the plaintiffs who move

for preliminary relief have presented their claims,

which have, in all cases, either been denied or termi-

nated at some level of the administrative process. The

Secretary’s argument is directed to the requirement

of full exhaustion, which may be waived by a court

under certain circumstances:

“A waiver of the exhaustion requirement may

be inferred where the plaintiffs’ legal claims are

collateral to their demand for benefits, where ex-

haustion would be a pro forma or futile gesture,

or where the harm suffered in the interim would

be irreparable in the sense that no post hoc re-

lief would be adequate.”

Smith v. Scieweiker, 709 F.2d.777, 780 (2d Cir.

1983), citing Mathews v. Eldridge, 424 U.S. at 330-

31, 96 S.Ct. at 895-896.

The Secretary contends that, under the analysis

employe in Smith, plaintiffs do not satisfy the col-

laterality and futility grounds for waiver of exhaus-

tion.” Even if the Secretary were correct as to those

1 Smith held that a class-action challenge to the Secretary’s

practice of terminating disability benefits without a finding

of medical improvement did not raise an issue which was

collateral to plaintiffs’ demand for benefits, since the plain-

tiffs there were not “asserting a right to a particular kind of

procedure” (as was true in Eldridge) but were claiming “only

that, depending on the evidence adduced, an illegal termination

of their benefits may result from the application of the Secre-

304

grounds, however, we believe that waiver of exhaus-

tion is appropriate because plaintiffs have demon-

strated that they will suffer irreparable harm for

which post hoc relief would be inadequate. Unlike

the Smith plaintiffs, who were all receiving disability

benefits at the time of the lawsuit, none of the named

plaintiffs in this case are receiving benefits. As their

affidavits demonstrate, without benefits their respec-

tive financial situations are precarious.

Moreover, neither the ALJs nor the Appeals

Council, of course, have the authority to declare the

Secretary’s severity standard unlawful, but instead

are required te apply that standard (along with SSR

82-55) to each claim. In such circumstances, to re-

quire plaintiffs to pursue a process which will be

guided by a procedure they claim is illegal, and which

has already resulted in an initial denial of benefits,

on the possibility that the claim will ultimately be

disposed of on some other basis, is unwarranted, par-

ticularly since the legal issue raised here is not one

which is likely to “benefit from further factual de-

velopment and refinement through the administrative

process.” Heckler v. Lopez, —— U.S. ——, 104 S.Ct.

10, 15, 77 L.Ed.2d 1431 (1983) (Rehnquist, J.)

application to vacate stay denied, —— U.S. ——, 104

S.Ct. 221, 78 L.Ed.2d 217 (1983) ; cf. Smith, supra,

709 F.2d at 780-81 (legal issue raised by plaintiffs

tary’s test for current disability.” Smith v. Schweiker, 709

F.2d at 780. Smith also held that exhaustion could not be

deemed futile because the plaintiffs’ claims for benefits might

be denied or granted on other grounds at other stages of the

administrative process. The decision noted that the benefits

of every named plaintiff and intervenor had actually been

restored as a result of the administrative appeal process. /d.

Bla

was “unformulated” and was not presented “in the

context of a concrete case’’) .”

B. Standard for Preliminary Relief

Plaintiffs seek a preliminary injunction

(1) prohibiting the Secretary from denying or

terminating Social Security or SSI benefits due

to the asserted non-severity of the claimant’s im-

pairments; (2) directing the Secretary to restore

benefits to all members of the proposed class who

(a) received decisions, finding them no longer

eligible for benefits that were rendered at any

stage of the administrative process, on July 20,

1983 or thereafter, or (b) had pending challenges

to such decisions on July 20, 1983; and (3) di-

recting the Secretary to reopen the applications

of all class members whose applications for bene-

fits have been denied by the Secretary, at any

stage of the administrative process, since July

20, 1983, and to redetermine these applications

without reference to the threshold severity test.

To obtain such relief, a plaintiff must ordinarily dem-

onstrate irreparable harm, and either a likelihood of

success on the merits or the existence of a fair ground

for litigation, with the balance of hardships decidedly

in his favor. Jackson Dairy, Inc. v. H.P. Hood &

The facts of this case are also clearly distinguishable

from those in Heckler v. Ringer, -—— U.S. ——, 104 S.Ct.

2013, 80 L.Ed.2d 622 (1984), where waiver of exhaustion

was denied in part because individuals asserting claims similar

to those presented by the Ringer plaintiffs were rovtinely

receiving favorable decisions from the ALJs. Jd. —— U.S. at

——, 104 §.Ct. at 2023. Here, plaintiffs have all received

unfavorable ALJ decisions.

32a

Sons, Inc., 596 F.2d 70, 72 (2d Cir. 1979) (per

curiam).

The Secretary, however, argues that on this mo-

tion the plaintiffs must show a likelihood of success

(not merely a fair ground for litigation) because the

issuance of an injunction will burden the Social Secu-

rity Administration and cause harm to the public in-

terest. The Secretary relies, inter alia, upon Union

Carbide Agricultural Products v. Costle, 632 F.2d

1014, 1018 (2d Cir.1980), cert denied, 450 U.S. 996,

101 S.Ct. 1698, 68 L.Ed.2d 196 (1981), which states

“When Congress authorizes or mandates govern-

mental action that is in the public interest, more

than a ‘fair ground for litigation’ must be shown

before the action will be stopped in its tracks by

court order.” _

Plaintiffs argue, however, that Congress has not au-

thorized the use of a severity standard in isolation

from vocational factors, and that it is in the public

interest that the disability program be administered

as Congress intended. We believe in litigation such

as this no party has an exclusive claim of the public

interest, and accordingly we doubt the appropriate-

ness of applying the doctrine of Union Carbide. In

any event, the question is not dispositive, because, as

discussed below, we conclude that plaintiffs have in

fact established a likelihood of success on the merits.

C. The Severity Regulation

As noted previously, the question of the lawfulness

of the Secretary’s severity regulation has been spe-

cifically reserved by the Second Circuit on at least

two occasions. See Keith v. Heckler, 732 F.2d 1089

at 1093-94 (2d Cir.1%84); Chico v. Schweiker, 710

33a

F.2d 947 (2d Cir.1983). In Chico, Judge Friendly

noted

“the close question of the validity of the ‘sever-

ity” regulation, involving as it does a seeming

conflict between the letter of § 423(d) (2) (A),

on the one hand, and, on the other, the Secre-

tary’s understandable desire to supply . . . some

threshold that a claimant must pass before the

Social Security Administration is required either

to apply the Appendix 2 guidelines or to call

vocational experts, and the Supreme Court’s rec-

ognition, reaffirmed in its recent decision in

[Heckler v.] Campbell, that Congress has ‘con-

ferred on the Secretary exceptionally broad au-

thority to prescribe standards for applying cer-

tain sections of the [Social Security] Act,’

Schweiker v. Gray Panthers, 453 U.S. 34, 48

[101 S.Ct. 2633, 2640, 69 L.Ed.2d 460] (1981).”

710 F.2d at 953.

In view of the Secretary’s authority to establish

regulations implementing the disability provisions

of the Act, our review “is limited to determining

whether the regulations promulgated exceeded the

Secretary’s statutory authority and whether they are

arbitrary and capricious.” Heckler v. Campbell, 461

U.S. 458, 103 S.Ct. 1952, 76 L.Ed.2d 66 (1983). The

starting point for this analysis, as Chico points out,

is the language of the statutory definition of “dis-

ability”. A “disability” is a

“physical or mental impairment or impairments

. . of such severity that [the claimant] is not

only unable to do his previous work but cannot,

considering his age, education and work experi-

34a

ence, engage in eny kind of substantial gainful

work which exists in the national economy.”

$§ 423 (d) (2) (A), 1882¢(a) (3) (B).

In “implementing” this definition, the Secretary has

separated the inquiry as to the severity of the im-

pairment from the inquiry as to the combined effect

of a claimant’s impairments and his age, education,

and work experience on his ability to engage in sub-

stantial gainful work. As the severity regulation

states, the claimant must first establish, based on

medical factors alone, that his impairment is severe

—that is, that it significantly limits his ability to

perform “basic work-related activities”—and at this

stage of the analysis the SSA “will not consider your

age, education, and work experience.” The plaintiffs

argue that this requirement is flatly inconsistent with

the statutory definition, which, they contend, requires

that the severity of an impairment be evaluated in

terms of the combined effect of the impairment and

the claimant’s age, education and work experience.

The Secretary argues that the statute should be read

to establish three independent requirements—that a

claimant have a severe impairment, that he be un-

able to return to his prior employment, and that his

impairment prevent him, in light of his age, educa-

tion, and work experience, from performing any other

substantial work.

In our view, the Secretary’s interpretation, which

at first glance may appear merely to have arranged

the factors mentioned in the statute in an orderly

fashion, has resulted instead in a substantive rewrit-

ing of the statute. The statute speaks of an impair-

ment (or impairments) which is “of such severity

that” the claimant cannot, “considering his age, edu-

35a

cation and work experience,” perform any substantial

gainful work. Under the severity regulation, by con-

trast, the Secretary had found that plaintiffs do not

have severe impairments, and therefore are not dis-

abled, without considering whether their impair-

ments, in light of their age, education, and work ex-

perience, permit them to perform gainful work. This

result is simply contrary to the statutory definition.

The Secretary argues, however, that it is clearly

within her authority to establish a threshold of med-

ical severity which a claimant must demonstrate be-

fore the Secretary is required to carry out a full

vocational analysis of the claimant and of his ability

to obtain a job available in the national economy. The

Secretary points out that such a threshold showing

was required in the prior regulations, under which

a claim could be denied on medical grounds alone if

the claimant had only a “slight” impairment, defined

as a “slight neurosis, slight impairment of sight or

hearing, or other slight abnormality or a combination

of slight abnormalities.”** According to the Secre-

tary, the 1978 regulations were not intended to effect

a substantive change in the level of severity that

must be shown before vocational factors will be con-

sidered, but rather to clarify the circumstances under

which a finding of not disabled could be justified on

the basis of medical considerations alone. As the Sec-

retary stated in 1978 in the commentary accompany-

ing the proposed regulations:

“there is a point in the range of impairment

severity below which the effects of the impair-

ment(s) have such a minimal effect on the indi-

vidual that they would not be expected to inter-

fere with his or her ability to work, irrespective

21 20 C.F.R. § 404.1520(a) (1968).

36a

of his or her age, education, and work experi-

ence.” #

The Secretary contends that the screening out of

claims in which the impairment is plainly de mini-

mis is a long-standing SSA practice which is neces-

sary to the efficient running of the SSI and OASDI

programs.

There are several flaws in these arguments. First,

although the Secretary’s 1978 commentary on the

severity regulation appears to describe what might

be considered a de minimis standard for screening

out unfounded claims, the regulation itself does not

use the Secretary’s language. The regulation does

not describe non-severe impairments as ones which

“have such a minimal effect . . . that they would not

be expected to interfere with his or her ability to

work irrespective of his or her age, education, and

work experience.” Instead, the severity regulation

states:

“(c) You must have a severe impairment. If

you do not have any impairment(s) which sig-

nificantly limits your physical or mental ability

to do basic work activities, we will find that you

do not have a severe impairment and are, there-

fore, not disabled. We will not consider your age,

education and work experience. .. .” *

The named plaintiffs’ cases illustrate that this reg-

ulation constitutes much more than a de minimis

standard. Plaintiff Dixon, for example, who is com-

pletely without sight in one eye, has a personality

22 43 Fed.Reg. 9284, 9296 (1978).

320 C.F.R. §§ 404.1520(c), 416.920(c) (1983).

37a

disorder and a verbal I.Q. of 68, and requires reha-

bilitation therapy five days a week, can hardly be

said to have impairments of such a de minimis nature

that they would not be expected to interfere with any-

one’s ability to work irrespective of vocational fac-

tors. Indeed, in our view none of the named plaintiffs

in this action have impairments which could be con-

sidered to be of the de minimis nature described by

the Secretary, or which could be viewed as fitting the

pre-1978 definition of a “slight” impairment. Even

if the Secretary may be assumed to have authority

to screen out claims in which the impairment is

clearly de minimis, the severity regulation as written

and as applied does not appear to be such a standard.

Second, the available statistics on the numbers of

claims denied on the basis of the severity regulation

strongly suggest that the regulation’s adoption repre-

sented not merely a fine-tuning of previous methods

of determining disability, but instead constituted a

substantial change in the administration of the ben-

efits system. In 1975, when the “slight impairment”

regulation was in effect, only 8 percent of disability

claims were denied based on medical grounds alone—

i.e., on the ground that the claimant suffered from

only a “slight” impairment. As of 1982, the per-

centage of claims denied on the basis of medical con-

siderations alone under the severity regulation

adopted in 1978 had climbed to 40 percent.* Al-

though of course we cannot rule out the possibility

that other factors apart from the change in the sever-

ity regulation may have contributed to this increase,

24 See Background Material and Data on Major Programs

Within the Jurisdiction of the Committee on Ways and Means,

W.M.C.P. 98-2, Committee on Ways & Means, United States

House of Representatives, 98th Cong., Ist Sess. at 79 (1983).

38a

it would be absurd to assume that the change in the

regulations has not played a substantial part in it.

Third, the Secretary’s own 1980 statement explain-

ing the intent of the 1978 amendments belies her cur-

rent contention that the severity regulation was not

intended to raise the level of severity which a claiin-

ant must show before vocational factors will be con-

sidered. As discussed earlier, the 1978 regulations

were slightly modified in 1980, primarily to make

theid language more understandable to claimants. In

publishing these modifications, the Secretary com-

mented on the severity regulation as follows:

“Although this evaluation approach to impair-

ments that are not severe has been in the regula-

tions for some time, we expanded it in 1978....

We anticipated that greater program efficiency

would be obtained by this provision by limiting

the number of cases in which it would be neces-

sary to follow the vocational evaluation sequence.

9? 25

Aithough the Secretary now argues that this state-

ment does not reflect an intent to limit entitlement

to benefits by the adoption of the 1978 regulations,

there can be no blinking the Secretary’s 1980 state-

ment that the regulation was intended to “limit[]

the number of cases” in which vocational factors

would be considered—something which, it would ap-

pear, can only be accomplished by increasing the num-

ber of cases decided on medical grounds alone.

Moreover, the severity regulation cannot be per-

suasively defended by arguing that the denial of sub-

stantial numbers of claims on medical grounds alone

*° 45 Fed.Reg. 55574 (1980).

39a

is merely the flip side of the Secretary’s policy of

granting claims on medical grounds alone where the

claimant’s impairment is among those listed in Ap-

pendix 1 of the regulations.** If the Secretary be-

lieves that it is operationally more efficient to con-

cede, in effect, that certain impairments are per se

disabling, than to conduct vocational evaluations for

claimants with such impairments, such a decision is

within her discretion, if only because no one would

have standing to challenge it.” It is quite another

thing to deny disability claims without consideration

of the individual’s vocational characteristics or his

ability to return to his past work, when the statute

defines disability so as to require consideration of

such factors. The Secretary cannot point to a prac-

tice which is judicially unreviewable to prove the

validity of a practice which is reviewable.

The Secretary further argues that the validity of

the severity regulation is supported by the legisla-

tive history accompanying the 1967 enactment of the

statute’s current definition of disability. The Secre-

tary argues that the 1967 revisions were prompted

by Congress’ desire to make medical considerations

paramount in disability determinations, and that the

severity regulation carries out this intent by requir-

ing an initial evaluation of severity to be based solely

on the medical evidence. This argument, however,

26 See 20 C.F.R. §§ 404.1520(d), 416.920(d).

27Of course, Congress can correct administrative rule-

making which it may consider more “generous” than the

statute warrants by revising the underlying statute; how-

ever, since the disability benefits system is (theoretically, at

least) not an adversary process, no one has standing to chal-

lenge a grant of benefits by the Secretary in an individual

case.

40a

rests on an incomplete picture of Congress’ purpose

in enacting the 1967 legislation. Although the 1967

amendments were clearly intended to limit the stat-

ute’s definition of disability, the House and Senate

reports indicate that Congress was primarily con-

cerned with matters other than the questions pre-

sented by this action. Congress was reacting in par-

ticular to judicial decisions which had interpreted the

statute to permit benefits to be awarded to people

who were actually working.* The amendments were

also intended to overrule decisions which, had held

that a claimant’s disability or non-disability had to be

evaluated in terms of the actual jobs available within

a narrow geographic area, rather than in terms of

jobs generally available within the national economy.

In addition, the amendments expressly required that

claims of disability be supported by objective medical

findings, rather than solely on a subjective claim of

disability.”

The item of legislative history upon which the Sec-

retary primarily relies as supporting her severity

regulation is a passage from the report of the Sen-

ate Committee on Finance, which stated that the

amendments

“would provide that such an individual would

be disabled only if it is shown that he has a

severe medically determinabie physical or men-

tal impairment or impairments; that if, despite

his impairment or impairments, an individual

still can do his previous work, he is not under a

disability; and that if, considering the severity

8 See S.Rep. No. 744, 90th Cong., Ist Sess. at 48 (1967),

reprinted in 1967 U.S.Code Cong. & Ad. News, 2834, 2882.

9 Td. at 2882-83.

4la

of his impairment together with his age, educa-

tion, and experience, he has the ability to en-

gage in some other type of substantial gainful

work that exists ia the national economy even

though he can no longer do his previous work,

he also is not under a disability ....”™

The Secretary contends that this passage reflects the

Committee’s view that, under the new definition of

disability, the claimant’s ability to perform previous

work and his age, education, and work experience

would be considered only if the impairment is first

found to be severe.

The problem with this argument is that Congress

simply did not write the statute that way. The stat-

ute expressly defines severity in terms of the effect

of an impairment on the claimant’s abiliy to per-

form his prior work or other work available in the

national economy, in light of the claimant’s age, edu-

cation and work experience. In any event, the pas-

sage relied upon by the Secretary is somewhat am-

biguous; it can be read simply as an explanation of

the overall circumstances under which a finding of

disability or non-c sability will be made, rather than

as a fixed sequence of screening steps under which

a “severity” test is somehow a condition precedent to

any consideration of the claimant’s ability to engage

in his prior work or of the other vocational factors.

Furthermore, the Secretary’s discussion of Con-

gress’ intent ignores the fact that when Congress

decided, in another part of the statute, to permit the

denial of benefits for certain claimants based on the

level of severity alone without individualized consid-

eration of vocational characteristics, Congress unam-

% Id. at 2882.

ai

42a

biguously expressed that intent. The definition of dis-

ability for widows’ and widowers’ benefits reads:

“A widow, surviving divorced wife, or widower

shall not be determined to be under a disability

(for purposes of section 402(¢) or (f) of this

title) unless his or her physical or mental im-

pairment or impairments are of a level of sev-

erity which under regulations prescribed by the

Secretary is deemed to be sufficient to preclude

an individual from engaging in any gainful ac-

tivity.”

42 U.S.C. § 423(d)(2)(B). The contrast between

this definition and that of section 423(d)(2)(A) (ap-

plicable to insured workers) provides strong support

for plaintiffs’ argument that Congress intended the

latter group of claimants to be evaluated in terms of

the combined effect of the severity of their impair-

ments and their individual vocational characteristics.

Finally, it must be noted that the severity regula-

tion is in conflict with longstanding judicial inter-

pretations of the burden of proof which claimants

must satisfy in order to establish a prima facie case

of disability. Under these precedents, which the Sec-

retary does not challenge, “[a] prima facie case of

disability is established when the claimant shows that

he is unable tc perform his past employment because

of his impairments. Dwmas v. Schweiker, 712 F.2d

1545, 1550 (2d Cir. 1983). The burden then shifts

%1 Accord, Dousewicz v. Harris, 646 F.2d 771, 772 (2d Cir.

1981) ; Parker v. Harris, 626 F.2d 225, 231 (2d Cir. 1980).

These burden-of-proof rules are applied in other circuits as

well. See, e.g., Hall v. Secretary of HEW, 602 F.2d 1372,

1375 (9th Cir. 1979) ; Hephner v. Mathews, 574 F.2d 359, 361-

62 (6th Cir. 1978) ; Small v. Califano, 565 F.2d 797, 800 (ist

Cir. 1977).

43a

to the Secretary to prove the existence of other sub-

stantial gainful work in the national economy which

the claimant is capable of performing. /d.

Under the severity regulation, however, the Secre-

tary simply disregards proof that the claimant can-

not perform his prior work, if the claimant cannot

first satisfy the severity test based on medical con-

siderations alone. In plaintiff Joanne Lockett’s case,

for example, it is undisputed that she is unable to

return to her prior work as a telephone company op-

erator and supervisor because of the deterioration of

her mental functions and capabilities. Nonetheless,

the ALJ did not conduct a vocational analysis to de-

termine whether she can perform other substantial

gainful work, because he found that her impairment

did not significantly limit her ability to perform basic

work-related activities and therefore was not severe.”

Indeed, it is not uncommon to see reported decisions

in which the ALJ has carried out the full sequential

evaluation, including the vocational analysis, and has

found the claimant disabled, but the Appeals Council

has nevertheless reversed on the basis that the elaim-

ant’s impairment is not “severe.” The Secretary

does not argue that this Circuit’s precedents regard-

%2 It must be emphasized that although the severity regula-

tion speaks of the claimant’s ability to perform basic work-

related activities, the Secretary does not consider the indi-

vidual’s particular vocational characteristics in making the

severity assessment. Rather, the Secretary evaluates the

medical evidence to determine whether the claimant’s impair-

ment imposes a significant limitation on his ability to perform

activities such as walking, standing, sitting, lifting, following

instructions, relating to co-workers and supervisors, etc. See

20 C.F.R. 404.1521 (b).

%3 F.g., Trafton v. Heckler, 575 F.Supp. 742 (D.Me. 1983) ;

Scruggs v. Schweiker, 559 F.Supp. 100 (MD.Tenn. 1982).

44a

ing the allocation of the burden of proof are incor-

rect, but neither does she suggest how they can be

reconciled with the severity regulation.

For all of the reasons discussed above—the conflict

between the severity regulation and the plain lan-

guage of the Act’s definition of disability; the clear

evidence that the regulation is not being applied as a

de minimis standard as the Secretary claims; the fact

that Congress expressly excluded consideration of vo-

cational factors for widows’ and widowers’ benefits,

but expressly included such factors in the statutory

definition at issue here; and the inconsistency of the

regulation with long-standing burden-of-proof rules,

which Congress has never attempted to alter—we con-

clude that plaintiffs have established a probability of

success on the merits as to their claim that the Sec-

retary exceeded her statutory authority in establish-

ing the severity regulation.”

We also note that plaintiffs, in addition to this

showing, have submitted further evidence in the form

of an affidavit by Marvin S. Lachman, Chief Social

Services Disability Analyst in the Office of Disability

Determinations (“ODD”), to support. the contention

that the Secretary, through internal administrative

actions beginning in 1976, deliberately altered the

substantive standards governing the c’*umstances

*% Plaintiffs also contend that the severity regulation is un-

lawful because the Secretary violated the notice-and-comment

procedures of the Administrative Procedure Act, 5 U.S.C.

§ 553, by failing to inform the public that the rule represented

a major change in the substantive standards t, = ich dis-

ability claims would be evaluated. In view of our venciusion

that plaintiffs have demonstrated a probability of success on

the other grounds set forth above, we need not address this

claim at this time. We also need not address the constitutional

issues raised by plaintiffs.

45a

under which claims could be denied on medical

grounds alone, long before the new regulations were

publicly proposed and adopted, and indeed without

having admitted to this day that the 1978 regulations

represented a change in policy. We do not rely on

this evidence, because the points previously discussed

establish the likelihood of plaintiffs’ success on the

merits, and the Lachman affidavit raises issues that

may require further factual development.* Nonthe-

less, it is worth noting that the affidavit presents

strong evidence that the Secretary deliberately imple-

mented a policy of requiring states (which bear the

initial burden of making disability determinations)

to reject greater and greater numbers of claims on

medical grounds alone,” while simply refusing to ac-

knowledge, either in 1976 when the policy emerged,

in 1978 when the severity regulation was actually

adopted through publie rule-making, or at any time

thereafter, that a policy change had taken place.”

* It is appropriate to note, however, that the affidavit sub-

mitted on behalf of the Secretary by Jean Hall Hinckley,

Acting Deputy Associate Commissioner for Disability, pre-

sents little to counter the assertions of the Lachman afiidavit.

Although the Secretary was given, over plaintiffs’ strenuous

objections, approximately nine weeks to respond to the Lach-

man affidavit, the Hinckley affidavit offers little but specula-

tion that the 1976 increase in returns of ODD disability

determines may have been caused by facters other than a

substantive policy change.

** The procedures by which the Secretary is able to use her

administrative oversight of state disability agencies to effect

policy changes in the treatment of disability claims is described

in the Lachman Affidavit and in City of New York v. Heckler,

578 F.Supp. 1109, 1113-14 (E.D.N.Y. 1984).

* Although t?:e Secretary’s 1980 statement in the Federal

Register as to the intent of the 1978 reguiations, see discus-

46a

D. SSR 82-55

SSR 82-55 provides directions to SSA personnel on

how to apply the Secretary’s severity regulation. The

ruling contains a list of 20 impairments that are to

be considered per se non-severe. In addition, the rul-

ing directs SSA adjudicators to evaluate the severity

of a claimant’s impairments singly, not in combina-

tion. Thus, if each of a claimant’s impairments is

deemed not severe standing alone, no consideration

may be given to their combined effect on the claim-

ant.

1. Standing

Before addressing the merits of plaintiffs’ position

as to this ruling, we must consider the plaintiffs’

standing to challenge it, an issue raised by the Gov-

ernment. We believe plaintiffs have amply demon-

strated standing to challenge the policies set forth in

SSR 82-55. The Government argues that irrespective

of SSR 82-55, the named plaintiffs’ impairments were

in fact considered in combination by the ALJs, and

that therefore none of the plaintiffs have standing to

challenge that aspect of SSR 82-55. However, as

plaintiffs point out, there is no mention whatsoever

of such consideration in the ALJs’ decisions denying

benefits to plaintiffs Dixon, Carrasquillo, Ramirez,

Terez and Feliciano.” Thus, these plaintiffs clearly

sion supra, might be seen as such an BC WM lle the

Secretary states that the statement should not be so inter-

preted.

88 The statements in those decisions that the claimants had

no “impairment or impairments” that were severe, upon

which the Government relies, certainly offer no basis for the

conclusion that the combined effect of plaintiffs’ impairments

was considered.

47a

have standing to challenge the Secretary’s policy of

refusing to consider the combined effects of unrelated

impairments. As to plaintiffs Casey and Gonzalez,

although the ALJs did state in conclusory fashion

that their impairments were not severe either singly

or in combination, the opinions indicate that each

impairment was evaluated individually and found not

severe.” In view of the fact that SSR 82-55 contains

a binding directive that the combined effect of non-

severe impairments is not to be considered, we be-

lieve that, in order to establish that the ALJs ignored

the ruling and gave full consideration to the combined

effect of plaintiffs’ impairments the Secretary must

do more than point to such conclusory statements.

Moreover, several of the named plaintiffs suffer

from impairments listed as per se non-severe condi-

tions in SSR 82-55. Plaintiffs Dixon and Ramirez

have suffered a loss of sight in one eye, a per se non-

severe impairment under the ruling. Plaintiffs Car-

rasquillo, Terez and Casey suffer from arthritis,

which is per se non-severe if there are “minimal

abnormal findings on physical examination.” Plain-

tiffs Carrasquillo, Casey and Gonzalez also suffer

from hypertension, which is considered non-severe if

it is not accompanied by end organ damage. In view

of the ALJ’s obligation to consider these impairments

non-severe, the fact that the ALJs did not specifically

mention SSR 82-55 in their decisions does not under-

mine these plaintiffs’ standing to challenge the policy

set forth in that ruling. In any event, the ALJ who

%9 The decision in plaintiff Lockett’s case contains a similar

statement, although there is no indication of whether the ALJ

deemed Lockett to have several district neurological and

psychological impairments, or just one impairment with sev-

eral manifestations.

48a

ruled on Gonzalez’ claim did refer to SSR 82-55 in his

decision, and thus at the very least Gonzalez has

standing to represent a class of claimants challenging

this aspect of SSR 82-55.

2. The Merits

The Secretary’s policy of refusing to consider the

combined effects of impairments which are individ-

ually found not to be severe is manifestly irrational

and finds no support either in logic or in the Social

Security Act. SSR 82-55 contains the following ex-

planation of the Secretary’s policy:

“Inasmuch as a nonsevere impairment is one

which does not significantly limit basic work-

related functions, neither will a combination of

two or more such impairments significantly re-

strict the basic work-related functions needed to

do most jobs.”

In much the same way, a mathematician might prove

that because two does not equal four, two plus two

never equals four either.”

Clearly, in order to determine, as the Act requires,

whether a claimant has an “impairment or impair-

* The Secretary’s reasoning might be defensible if a non-

severe impairment were defined as one which places no limits

on a claimant’s ability to perform basic work-related activi-

ties. In that event, several “impairments” which place no limi-

tation on a claimant’s activity could be assumed to have no

effect in combination as well. The severity regulation, how-

ever, defines a severe impairment as one which significantly

limits work-related functions. Obviously, two impairments

which individually do not place a significant limitation on a

claimant’s work-related abilities, but which each places some

limitation on his abilities, may in combination place a signifi-

cant limitation on his abilities.

49a

ments”) of such severity that he cannot perform any

“substantial gainful work,” the Secretary must con-

sider the total effect of an individual’s impairments

on his ability to perform gainful work.“ Under the

Secretary’s policy, however, a claimant who suffers

(for example) from all twenty per se non-service

impairments listed in SSR 82-55, and thus suffers

from arthritis, loss of one eye, hypertension, obstruc-

tive airway disease, eplipsy, chronic liver disease, a

peptic ulcer and diabetes, along with the twelve other

listed impairments, is conclusively presumed not to

meet the Secretary’s severity threshold and thus is

not disabled. If such a person is also.59 years old,

illiterate, does not speak English, and has no work

experience, such circumstances are simply irrelevant,

because in the absence of a severe impairment the

claimant’s vocational factors will not be considered.

Such a result clearly cannot have been contemplated

by Congress when it drafted the definition of disabil-

ity which appears in the Act. Accordingly, plaintiffs

are plainly entitled to preliminary relief enjoining

the Secretary from continued enforcement of her

policy of disrgarding the combined effects of non-

severe impairments.

As to the Secretary’s policy that a claimant will

never be found disabled if his impairment is one of

those listed in SSR 82-55, such a pelicy is unlawful

for the same reason that the severity regulation is

unlawful. The disability statute requires consider-

ation of the combined effect of an individual’s impair-

*1 Decisions of this Circuit have held that the regulations

require the ALJ to consider the combined effect of a claim-

ant’s impairments. See Felshina v. Schweiker, 707 F.2d 71,

73 (2d Cir. 1983) ; Kolodnay v. Schweiker, 680 F.2d 878, 879-

80 (2d Cir. 1982).

50a

ment and his age, education, work experience, and

ability to return to prior work. The severity regula-

tion is unlawful because it mandates the denial of

claims without consideration of vocational factors. It

follows that the use of a list of per se non-severe im-

pairments to deny disability claims without evalua-

tion of vocational factors is also unlawful.” Indeed,

as plaintiffs point out, the use of such a list means

that many claims will not even be evaluated in terms

of the effect of the impairment on the claimant’s abil-

ity to perform basic work-related functions, as the

severity regulation itself requires. As one commenta-

tor has stated, the listed impairments “are not for

the most part, examples of slight functional impair-

ments at all but, rather, examples of medical condi-

tions. Example 1(a) thus does not refer to whether

or not the individual can bend, stoop, sit, ete., but,

rather, to osteoarthritis with minimal abnormal] find-

ings.” “ This per se approach to disability evalua-

tions is simply inconsistent with the Act.“

“2 The Fourth Circuit has long held such a practice to be

unlawful. See Martin v. Secretary of Health, Education &

Welfare, 492 F.2d 905 (4th Cir. 1974); Hyatt v. Heckler,

579 F.Supp. 985 (D.N.C. 1984).

48 Goldhammer & Bloom, Recent Changes in the Assessment

of Pain in Disability Claims Before the Social Security Ad-

ministration, Social Security Reporting Service 306 (January

1984).

- # Plaintiffs also argue that SSR 82-55 is unlawful because

it was not promulgated in accordance with the notice-and-

comment procedures of the APA. The Secretary argues that

SSR 82-55 is merely an interpretive rule and as such is not

subject to the APA’s notice-and-comment requirements. Al-

though an agency’s characterization of its own rules is entitled

to deference, it is not_necessarily dispositive in all circum-

stances. See generally Cabais v. Egger, 690 F.2d 284 (D.C.

5la

E. Irreparable Harm

As discussed above the illegal denial of benefits to

the plaintiffs in these cases is causing irreparable

harm. David Dixon has not been able to work since

1974, and public assistance is his sole means of sup-

port. He has not bought new clothing for three years.

Ricardo Ramirez has not worked since 1978 as a

result of his disabilities, and the sole means of sup-

port for Ramirez, his wife, and their three small chii-

dren, is $428 per month in public assistance and $120

per month in food stamps. Their rent is $348 per

month, and the family is behind in paying its rent

and utilities, and goes without food at times. Joanne

Lockett’s sole source of income is her pension of

$429.09 per month and she states that she owes ap-

proximately $700 in medical bills and- fears that she

will not be able to pay future medical expenses. The

circumstances of the other named plaintiffs are simi-

lar. The harm that they are suffering on a day-to-

day basis as a result of their desperate financial cir-

cumstances cannot be repaired by a retroactive award

of benefits. Accordingly, the irreparable harm ele-

ment of the test for preliminary relief is amply satis-

fied here.

F.

In holding that plaintiffs have demonstrated a like-

lihood of success as to the invalidity of the severity

regulation, we are aware that some courts outside

Cir. 1983). We need not resolve this question here, however,

since we find the policies set forth in SSR 82-55 to be invalid

on other grounds. Regardless whether the ruling is subject

to notice-and-comment requirements, the substantive policy

set forth in the ruling may be enjoined if it is inconsistent

with the statute.

52a

this Circuit have construed the regulation narrowly

so as to save it from a finding of invalidity. With

respect to these courts, we believe the analysis in

these opinions is incorrect and is likely to result only

in continued confusion and endless appeals of deci-

siuns in which the Secretary’s findings of non-severity

is reversed for failure to follow the court’s construc-

tion of the regulation. In Brady v. Heckler, 724 F.2d

914 (11th Cir.1984), the Eleventh Circuit rejected a

challenge to the severity regulation, holding that the

regulations enacted in 1978 (and slightly modified in

1980)

“were not meant to alter the level of severity for

a finding of not disabled on the basis of medical

considerations alone. Under the 1968 and 1978

regulations, an impairment can be considered as

not severe only if it is a slight abnormality which

has such a minimal effect on the individual that

it would not be expected to interfere with the

individual’s ability to work, irrespective of age,

education, or work experience.”

Id., at 920. Having interpreted the severity regula-

tion in this de minimis fashion, the Court resound-

ingly reversed the ALJ’s finding that the plaintiff’s

impairments were not severe, stating:

“an individual who suffers from pericarditis,

hypoglycemia, vertebro vascular insufficiency,

mental depression, and possible emphysema, is

not suffering from a slight neurosis, slight im-

pairment of sight or hearing, or other slight

abnormality or combination of slight abnormal-

ities.”

Id. at 921.

53a

Other courts have stopped short of ruling on the

validity of the severity regulation itself, by simply

announcing what they believe to be the correct man-

ner of applying the regulation, and reversing the

ALJ’s decision for failing to apply the regulation cor-

rectly. For example, in McCullough v. Heckler, 583

F.Supp. 934 (N.D.II.,1984), the Court stated that

the severity regulation

“should be employed only when a claim is so

groundless that any analysis of the claimant’s

work experience or residual functional capacity

would be a waste of time. Doubts should be re-

solved against resting any decision on ‘severity’

alone... .”

Id. at 937-938. In Hundreiser v. Heckler, 83 Civ.

4360, slip op., (N.D.Ill. March 19, 1984), the Court

announced a slightly different approach, ruling that

disability claims cannot be denied merely on a finding

of non-severity, if the claimant establishes that he is

unable to return to his prior work:

“the claimant can... rebut the Secretary’s

[finding of non-severity] by showing that his

impairments prevent him from doing his past

work. In other words, by making out a prima

facie case of disability through showing an in-

ability to do past work due to ‘an impairment’ the

claimant necessarily satisfies the ‘severe’ impair-

ment requirement of 20 C.F.R. § 404.1520(c).”

Id. at pp. 23-24."

45 See also Wallschlaeger v. Schweiker, 705 F.2d 191 (7th

Cir. 1983) (treating the definition of severity in the regula-

tions as an essentially tautological one, in order to reconcile

the regulation with the statutory definition of disability) ;

54a

The common conclusion of these opinions, all of

which have been handed down in individual disability

appeals, is that the problem dies not in the severity

regulation itself, but in the improper application of

the regulation by SSA personnel. In none of these

cases, however, was the court’s attention directed to

SSR 82-55—which makes clear the fact that SSA per-

sonnel are not permitted to apply the severity regula-

tion merely as a de minimis standard—or to the

statistical evidence illustrating the dramatic rise in

the percentage of cases denied on medical grounds

alone since the enactment of the severity regulation.

As our analysis on the merits indicates, the prob-

lem lies not in the proper application of the severity

regulation, but instead in the conflict between’ that

regulation and the statutory definition of disability.

Neither sound policy nor appropriate respect for Con-

gress’ goal of establishing a functioning system of

benefits administration is properly served by endless

case-by-case reversals of ALJ’s decisions, in which the

judiciary plays the role of Cuchulain battling the

invulnerable tide. Because the severity regulation,

and the policies set forth in SSR 82-55, conflict with

the Social Security Act, they are invalid.

III. Class Certification

Plaintiffs move pursuant to Fed.R.Civ.P. 23(a)

and 23(b) (2) for certification of a class consisting of

Scruggs v. Schweiker, 559 F.Supp. 100 (M.D.Tenn. 1982)

(announcing that in future Social Security appeals where the

ALJ’s analysis ended with the application of the severity test,

the Court would apply a set of presumption to supply the

missing fact-findings under the remainder of the sequential

evaluation).

55a

“All persons in the State of New York who have

filed or will file applications for disability bene-

fits under Title II and/or Title XVI of the Social

Security Act, and whose benefits have been or

will be denied pursuant to the policies set forth

in 20 C.F.R. §§ 404.1520(c) and .1521, 416.920

(c) and .921 (1982), and Social Security Rulings

cum. ed. 82-55 (1982) ; and all recipients of such

benefits who have made or will make claims for

continued benefits (threugh participation in a

Continuing Disability Interview), and whose

benefits have been or will be terminated pursuant

to the same policies.”

The Secretary raises several objections to certifi-

cation of the class as so defined. She contends that

the class is overly broad because it includes individ-

uals who (1) received final decisions from the Secre-

tary more than 60 days prior to the filing of the com-

plaint in the instant action and who have not filed

claims in federal] court, and thus have failed to meet

the 60-day filing deadline required by section 405(g)

and 13883(c) (3); (2) have not fully exhausted their

administrative remedies as required by sections 405

(zg) and 1888(c)(3); and (3) have not yet filed

claims for benefits or had their benefits terminated,

and thus have not satisfied the presentment require-

ment of sections 406(g) and 1383(c) (3).*

The exhaustion requirement has already been dis-

cussed above, in section II. A. of this Memorandum,

and we have concluded that the requirement is waived

in this case on account of the irreparable harm being

46 The Secretary’s argument that none of the named plain-

tiffs have standing to challenge SSR 82-55 has already been

discussed and rejected in section II. D. 1. of this memorandum.

56a

suffered by claimants who are unlawfully denied ben-

efits. The questions that remain to be resolved are

whether the class may include those individuals who

received final decisions more than 60 days prior to

the filing of the original complaint in this action, and

whether class certification may extend to future ap-

plicants for benefits.

Ordinarily, a claimant who has received a final

decision by the Secretary denying benefits must file a

complaint in federal court within 60 days of the denial

of his claim will be time-barred. However, the 60-day

requirement constitutes a statute wf limitations and

not a jurisdictional bar, and some <ourts have held it

to be inapplicable in cases such as this, which involve

systemwide challenges to the Secretary’s regulations

rather than individual claims for benefits. See Lopez

v. Heckler, 725 F.2d 1489, 1505-07 (9th Cir. 1984) ;

City of New York v. Heckler, supra, 578 F.Supp. at

1124.

The plaintiffs suggest that, since preliminary relief

is being sought only by those class members who sat-

isfy the 60-day requirement, the Court may certify a

conditional class limited to those individuals, and

reserve decision on the ultimate scope of the class

until a final judgment is entered. Such a step ap-

pears appropriate, in view of the fact that the ques-

tion whether the 60-day requirement may be waived

in «»es such as this is currently before the Court of

Appeals as part of the appeal of City of New Yerk v.

Heckler, supra.

The only remaining question, therefore, is whether

the class may be defined so as to include future claim-

ants whose applications for benefits will be denied or

terminated as a result of the severity regulation and/

or SSR 82-55. The Secretary argues that the class

57a

cannot include future claimants because such in-

dividuals have not yet presented any claim to the

Secretary and thus have not satisfied the unwaivable

presentment requirement of section 405(g) of the

Act. Plaintiffs argue that defining the class to in-

clude future claimants is simply intended to assure

that the legality of the Secretary’s policies need not

be litigated over and over again as new claimants

apply for benefits. They point out that classes chal-

lenging governmental action routinely include future

members of the class. E.g., Brown v. Board of Edu-

cation, 84 F.R.D. 383 (D.Kan.1979).

The plaintiffs’ argument is persuasive. The inclu-

sion of future members of the class definition creates

no jurisdictional problem under section 405(g), be-

cause such individuals will not actually be covered by

any order or judgment entered in these cases until

they do make a claim for benefits in some form, thus

satisfying the presentment requirement.

There is no dispute as to the remaining require-

ments for class certification. The proposed class

clearly meets the numerosity, commonality, typicality,

and fair representation requirement of Fed.R.Civ.P.

23(a).“ In addition, the class satisfies the require-

ment of Rule 23(b) (2), which permits certification

where

“the party opposing the class has acted or refused

to act on grounds gene ally applicable to the

class thereby making appropriate final injunctive

relief or corresponding declaratory relief with

respect to the class as a whole.”

*T See section II. A. of this memorandum, supra.

* See Affidavit of Nancy Morawetz, dated January 26,

1984.

58a

Accordingly, the motion for class certification is

granted, with the proviso that the class presently in-

clude only those members who satisfy the 60-day fil-

ing requirement-of section 405(g) of the Act.

* * * * *

The motion for a preliminary injunction is granted.

The motion for class certification is granted to the

extent indicated in this opinion.

Settle order on notice.

LARS PNT NY

59a

APPENDIA D

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

No. 83 Civ. 7001(MEL)

DAVID DIXON, on behalf of himself and

all others similarly situated, PLAINTIFF

and

DOMINGA CARRASQUILLO, OPHELIA CASEY, RICARDO

RAMIREZ, HELEN SPIRES and JOANNE LOCKETT,

PROPOSED PLAINTIFF-INTERVENORS

and

THE STATE OF NEW YORK and CESAR PERALES, as

Commissioner of the New York State Depart-

ment of Social Services, PROPOSED PLAINTIFF-

INTERVENORS

v.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

June 22, 1984

6Ca

LASKER, District Judge.

This memorandum addresses motions to intervene

by Dominga Carrasquillo, Ophelia Casey, Ricardo

Ramirez, Joanne Lockett, Helen Spires, the State of

New York, and Cesar Perales, as Commissioner of

the New York State Department of Social Services.

The subject of this action, a challenge to the legality

of the standards by which claims for disability bene-

fits are evaluated, is described in a separate opinion

issued this date on plaintiff’s motion for a prelimi-

nary injunction and class certification.’

I.

Dominga Carrasquillo, Ophelia Casey, Ricardo

Ramirez, Joanne Lockett, and Helen Spires, all of

whom have been denied disability benefits on the

ground that their impairments are not severe, move

to intervene pursuant to Rule 24(b)(2) of the Fed-

eral Rules of Civil Procedure. Rule 24(b)(2) au-

thorizes permissive intervention where the interven-

nor’s claim and the main action “have a question of

law or fact in common.” The Secretary of Health and

Human Services (the “Secretary”) consents to the

intervention of Carrasquillo, Casey and Ramirez, and

accordingly the motion is granted as to them. The

Secretary objects, however, to the intervention of

Lockett and Spires, on the grounds that Lockett has

not sought Appeals Council review of the ALJ’s deci-

sion and therefore is barred from pursuing her claim,

and that Spires does not reside in this district.

1 This action has been consolidated with Nos. 83 Civ. 8609

(Feliciano v. Heckler), 83 Civ. 8264 (Terez v. Heckler), and

84 Civ. 0110 (Gonzalez v. Heckler), all of which assert class

allegations challenging the same regulations and policies chal-

lenged in the instant case, 589 F.Supp. 1494.

6la

In response, Lockett’s legal representative has sub-

mitted an affidavit stating that Spires does not reside

in this district. 3

In response, Lockett’s legal representative has sub-

mitted an affidavit stating that an appeal was filed

and that she has had communications with the Appeals

Council which confirm this.? The Secretary now states

that SSA is reviewing its records to verify Lockett’s

appeal. Accordingly, Lockett’s motion to intervene is

granted, without prejudice to the Secretary’s right

to move to dismiss at a later date if the facts war-

rant.

The motion to intervene is denied as to Spires.

Even if the incorrect venue of her claim is not an

automatic bar, intervention is unwarranted because

her case has now been remanded for rehearing pur-

suant to the decision in City of New York v. Heckler,

578 F. Supp. 1109 (E.D.N.Y. 1984).’ :

II. The State of New York and the Commissioner

of the New York State ronnaiemnas of Social

Services

The State of New York and Cesar Verales Com-

missioner of the New York State Department of So-

cial Services of the State of New York (together, the

“State”), move to intervene as of right as plaintiffs,

2 Affidavit of Dolores Britt, dated March 20, 1984.

8 Although Spires continues to press her motion for inter-

vention on the ground that City of New York did not address

the validity of the severity regulation, we perceive no basis

for permitting her intervention in view of the complications

that are likely to arise from the fact that her case is already

on remand. Insofar as she has an interest in the legality of

the severity regulation, her membership in the plaintiff class

will adequately protect that interest.

62a

pursuant to Fed. R. Civ. P. 24(a), on the grounds

that they have a direct interest in plaintiffs’ challenge

to the severity regulation and that the disposition of

the action may impair or impede their ability to pro-

tect that interest. Alternatively, they seek permissive

intervention pursuant to Fed. R. Civ. P. 24(b), on

the grounds that they are charged with administering

the challenged standards and that their proposed com-

plaint raises similar questions of law and fact to

those raised by the plaintiffs.

Cesar Perales (the “Commissioner”) is responsible

for administering the New York State Office of Dis-

ability Determinations (“ODD”), which, under an

agreement between the State and the Secretary, makes

the initial determination of whether an individual is

disabled for the purposes of the federal Supplemental

Security Income (“SSI’’) and Old Age Survivors and

Disability Insurance (“OASDI’) programs. ODD is

required to comply with all federal regulations and

all applicable rules, written guidelines and instruc-

tional materials issued by the Secretary.* The Secre-

tary reviews case samples from ODD. If the Secre-

tary finds that ODD is not determining disability ap-

plications in a manner consistent wiht her rules and

regulations, she may terminate the state’s authority

to make disability determinations, and assume re-

sponsibility for New York claims herself.®

To intervene as of right under Rule 24(a) (2), an

intervenor must show that

“(1) the application is timely; (2) ‘the appli-

cant claims an interest relating to the property

#42 U.S.C. §421(a) (2); 20 C.F.R. § 404.1603(a) and

416.1003 (a) (1983).

542 U.S.C. § 421(b) (1); 20 C.F.R. §§ 404.1670-75 and

416.1070-75 (1983).

63a

or transaction which is the subject matter of the

action... .’; (3) the protection of the interest

may as a practical matter be impaired by the

disposition of the action; and (4) the interest is

not adequately protected by an existing party.”

Restor-A-Dent Dental Laboratories, Inc. v. Certified

Alloy Products, Inc., 725 F.2d 871, 874 (2d Cir.

1984). The major point of dispute on this motion is

whether the State’s interest in the subject matter of

the action is adequate to support intervention as of

right. The State intervenors argue that they have a

sufficient interest because (1) the Secretary’s use of

the severity regulation forces the State to choose be-

tween making disability determinations based on

standards they believe to be unlawful, or incurring

severe administrative sanctions, including possible

takeover of their program by the Secretary, if they

refuse to follow those standards; (2) the Secretary’s

denial of disability benefits to New York residents

increases the costs of state and local public assistance

programs; (3) the State has a parens patriae inter-

est in the health and economic welfare of its citizens.

The Secretary answers that none of the asserted

interests is sufficient to confer standing on the State

to challenge the Secretary’s regulations under Fed.

R. Civ. Pr. 24(a) (2). In particular, the Secretary

contends that (1) the possibility that New York’s

disability program, will be taken over by the Secre-

tary if the State refuses to follow the Secretary's

regulations is too contingent to support intervention,

and in any event the State’s participation is volun-

tary and therefore it is not being required to ad-

minister regulations it believes to be illegal; (2) the

increased burden on state public assistance programs

caused by denials of federal disability benefits does

64a

not create a protectable interest because the OASDI

and SSI programs are not intended to ease the finan-

cial burden of state public assistance programs; and

(3) a state is without standing as parens patriae to

bring an action based on federal law against the fed-

eral government.

If any one of the interests asserted by the State is

adequate to support intervention, then this aspect of

the test for intervention as of right is satisfied. The

“interest” required under Rule 24(a), as the Court

of Appeals has stated “defies a simple definition,” but

must be one which is “ ‘significantly protectable’ ”’

and is “direct, as opposed to remote or contingent.”

Restor-A-Dent Dental Laboratories, Inc. v. Certified

Alloy Products, Inc., 725 F.2d 871, 874 (2d Cir.

1984), quoting Donaldson v. United States, 400 U.S.

517, 531, 91 S.Ct. 534, 542, 27 L.Ed.2d 580 (1971).

The first interest asserted by the State arises out

of its responsibility for making disability determina-

tions and the threat of a possible federal take-over of

the State’s program if it refuses to follow regulations

it believes to be illegal. Such an interest appears more

than adequate to support intervention. The possibility

of a federal assumption of the State’s program can-

not be considered excessively remote and contingent in

light of the Secretary’s previous threats to institute

precisely such a takeover when the State has resisted

other aspects of the Secretary’s regulations which the

State believes to be illegal. The fact that the State’s

participation in the disability benefits program is

voluntary, moreover, does not constitute a basis for

concluding that the State has no interest in applying

lawful rather than unlawful standards in making

* See Affidavit of Nelson Weinstock, dated April 26, 1984,

1 8.

65a

benefits determinations. The conflict between the

State’s duty to follow the Social Security Act, and its

duty to follow the Secretary’s regulations, creates a

dilemma for the State which is sufficiently real to

justify its intervention in this lawsuit. Cf. City of

New York v. Richardson, 473 F.2d 923 (2d Cir.

1973) (city officials have standing to challenge a state

statute alleged to be in conflict with the United States

Constitution). —

The State also relies upon its economic interest in

the proper administration of the federal disability

programs, contending that disabled individuals who

are denied benefits because of the Secretary’s unlaw-

ful regulations are compelled to turn to state and

local public assistance programs upon which they

would otherwise not have to deepnd. The Secretary

does not argue that this burden is insubstantial, but

that it is not a legally cognizable interest because the

federal disability programs are intended only to bene-

fit disabled individuals, not to ease the state’s public

assistance costs. However, as Judjre Weinstein spe-

cifically held in City of New York v. Heckler, 578

F. Supp. 1109 (E.D.N.Y. 1984), the legislative his-

tory of the SSI and OASDI programs shows that one

of Congress’ express purposes in establishing the pro-

grams was in fact “to relieve state and local govern-

ments of the soaring costs of the existing programs.”

Id. at 1121. We find Judge Weinstein’s analysis per-

suasive, and for the reasons stated in his opinion con-

clude that the State’s economic interest in the proper

administration of federal disability benefits is ade-

quate to support intervention.’

7 See also Abrams v. Heckler, 582 F.Supp. 1155 (S.D.N.Y.

1984) ; New York v. Schweiker, 557 F.Supp. 354, 358 (S.D.

~ 66a

In light of the conclusions reached above, we need

not resolve the rather complex question of whether

the State also has an interest warranting ‘interven-

tion by virtue of its parens patriae interest in the

health and economic welfare of its citizens. Compare

City of New York v. Heckler, supra, 578 F. Supp. at

1122-23, with Alfred L. Snapp & Son, Inc. v. Puerto

Rico, 458 U.S. 592, 610 n.16, 102 S.Ct. 3260, 3270

n.16, 73 L.Ed.2d 995 (1982).

The State’s satisfaction of the remaining require-

ments for intervention as of right are not signifi-

-eantly in doubt. The motion to intervene was made

approximately two months after the amended com-

plaint was filed, prior to oral argument of the motion

for preliminary relief, and is timely. Moreover, al-

though the State shares a similar objective to that of

the plaintiffs—namely, to enjoin the Secretary’s use

of the severity regulation—the State has some inter-

ests in the litigation which are not shared by plain-

tiffs, and which therefore are not “adequately repre-

sented by existing parties.” (Fed. R. Civ. Pr. 24(a) ).

As the State points out, it has an interest in attempt-

ing to assure, should it prevail in this action, that

the Secretary provides administrative funds to the

State to permit compliance with the judgment, along

with the appropriate instructions and guidelines to

N.Y. 1983); but see Doe v. Heckler, 568 F.Supp. 681, 683

(D.Md. 1983).

The parties have phrased their arguments in terms of the

requirements for interventions, rather than in terms of

standing. We note that, for the same reasons that support

the State’s right to intervene, the State has standing to chal-

lenge the Secretary’s policies. See generally Valley Forge

Christian College v. Americans United for Separation of

Church and State, 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d

700 (1982).

67a

ODD personnel for applying any revised standards

for disability determinations.

For these reasons, we conclude that the State in-

tervenors are entitled to intervention as of right un-

der Fed. R. Civ. Pr. 24(a).

* * aa + +

The motions to intervene are granted.

It is so ordered.

68a

APPENDIX E

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

No. 83-Civ. 7001 (MEL)

DAVID DIXON, RICARDO RAMIREZ, OPHELIA CASEY,

DOMINGA CARRASQUILLO and JOANNE LOCKETT,

individually and on behalf of all other similarly

situated, PLAINTIFFS

-and-

THE STATE OF NEW YORK and CESAR PERALES, as

Commissioner of the New York State Department

of Social Services, PLAINTIFF-INTERVENORS

VU.

MARGARET M. HECKLER, Secretary of the

Department of Health and Human Services,

DEFENDANT

No. 83 Civ. 8264 (MEL)

EULALIA TEREZ, individually and on behalf

of all others similarly situated, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

69a

No. 83 Civ. 8609 (MEL)

CARMEN FELICIANO, individually and on behalf

of all others similarly situated, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

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No. 83 Civ. 0110 (MEL)

TOMASINA GONZALEZ, individually and on behalf

of all others similarly situated, PLAINTIFF

Vv.

MARGARET M. HECKLER, as Secretary of the

Department of Health and Human Services,

DEFENDANT

[Filed July 26, 1984]

ORDER

Plaintiffs, having moved the Court for class certi-

fication and a class-wide preliminary injunction, and

the Court having rendered an opinion dated June 22,

1984,

IT IS HEREBY ORDERED that plaintiffs’ motion

for class certification is granted and that the plain-

tiff class is defined as follows:

70a

All persons in the State of New York who have

filed or will file applications for disability bene-

fits under Title II and/or Title 1VI of ihe Social

Security Act, and whose benefits have been or

will be denied pursuant to the policies set forth

in 20 C.F.R. §§ 404.1520(c) and .1521, 416.920

(c) and .921 (1982), and Social Security Ruling

82-55 (1982); and all recipients of such benefits

who have made or will make claims for continued

benefits, and whose benefits have been or will be

terminated pursuant to the same policies.

The plaintiff class does not include, at this

time, any such persons who received decisions of

the Secretary on or before July 19, 1983 and

failed to file a complaint in federal district court

or to appeal to the next level of administrative

review within 60 days after the date of the re-

ceipt of such decision.

IT IS FURTHER ORDERED that plaintiffs’ mo-

tion for a preliminary injunction is granted and that,

pending a final determination of this action, defend-

ant, her agents, servants, employees and their suc-

cessors:

1. Are enjoined from denying or terminating So-

cial Security Disability or Supplemental Security In-

come benefits due to the policies set forth in 20 C.F.R.

§§ 404.1520(c) and .1521, 416.920(c) and .921

(1982), and Social Security Ruling 82-55 (1982) ;

and

2. Shall immediately commence identification of

all members of the plaintiff class. Defendant shall

complete such identification of persons whose bene-

fits have been terminated at the initial or reconsid-

eration levels of review within thirty days of the

Tla

date of this order. Defendant shall complete identi-

fication of the remaining members of the class with-

in seventy-five days of the date of this order; and

3. Shall send to each class member whose appli-

cation for benefits was denied, his/her representative

and representative payee, a copy of the notice ap-

pendea hereto as attachment “A” together with an

addressed, postage-paid return envelope. The notice

to class members shall be sent within three days of

the date defendant identifies the class member; and

4. Shall send to each class member whose benefits

were terminated, his/her representative and repre-

sentative payee, a copy of the notice appended hereto

as attachment “B” together with an addressed, post-

age-paid return envelope. The notice to class mem-

bers shall be sent within three days of the date de-

fendant identifies the class member; and

5. Are directed to reinstate benefits (including

Medicare and auxiliary benefits payable on account

of Title II disability benefits) calculated as of June

22, 1984 to all members of the class who (a) received

decisions, finding them no longer eligible for benefits,

that were rendered at any stage of the administrative

process, on July 20, 1983 or thereafter, or (b) had

timely challenges to such decisions pending on July

20, 1983 or thereafter, provided the class member

verifies his/her current address and, in the case of

Supplemental Security Income benefits, satisfies the

financial eligibility requirements for the receipt of

such benefits, except that benefits shall not be rein-

stated under this order to any class member who has

an action pending in federal court based on the ter-

mination of his/her benefits unless and until the

action is remanded to the Secretary for re-evaluation.

As soon as a class member responds to notice “B”,

72a

defendant shall forthwith verify the class member’s

address and, in the case of Supplemental Security

Income recipients, shall forthwith verify the class

member’s financial eligibility ; and

6. Shall with respect to those class members whose

benefits are to be reinstated pursuant to paragraph 5

above, certify those class members’ checks to the De-

partment of the Treasury within 3 weeks of (a) the

identification of the class member or the determina-

tion that a person who presents him/herself as a po-

tential class member is in fact a class member, (b)

the verification of the class member’s address, (c) in

the case of Supplemental Security Income benefits,

the verification of the class member’s financial eli-

gibility, and (d) in the case of a class member with

an action pending in federal court, the Secretary’s re-

ceipt of notice that the action has been remanded;

and

7. Shall be considered to be in compliance with the

provisions of paragraph 5 and 6 above if 95% of

those ciass members entitled to be reinstated to Title

II benefits have checks certified to the Department

of the Treasury in accordance with the provisions of

paragraph 6 above and if 80% of those class mem-

bers entitled to be reinstated to Title XVI benefits

have checks certified to the Department of the Treas-

ury in,accordance with the provisions of paragraph 6

above, provided that the remaining class members

shall have checks certified to the Departtnent of the

Treasury within a reasonable time; and

8. Upon the reinstatement of benefits to those

class members whose benefits were terminated as de-

scribed in paragraphs 5 and 6 above, the Secretary

shall have the right to re-evaluate the class members’

entitlement to benefits and shall restore benefits ret-

13a

roactively from June 22, 1984 for any period only

upon finding that such class members were entitled te

receive benefits for that period unless otherwise re-

quired pursuant to 20 C.F.R. § 416.1336(b) and

POMS §SI 02301.605(D), and shall terminate rein-

stated benefits only upon finding that such class mem-

bers are no longer entitled to receive such benefits,

provided that such class members shall retain all

rights, if any, to continued benefits during an ad-

ministrative appeal. The Secretary shall have the

right to recoup any overpayment made as a result of

the provisions of this order in accordance with 20

C.F.R. §§ 404.501-404.515 & 416.501-416.570. Noth-

ing in this paragraph shall be construed as affecting

the matters currently being litigated ‘in Maguire v.

Heckler, 83 Civ. 7055 (RWS) ; and

9. Are directed to reopen the applications of all

class members whose applications for benefits have

been denied by the Secretary, at any stage of the

administrative process, since July 20, 1983, or had

timely challenges to such denials pending on July 20,

1983 or thereafter and to redetermine those applica-

tions without reference to the threshold severity test,

provided that any- action pending in federal court

based upon the denial of a class member’s application

for benefits has been remanded to the Secretary for

redetermination.

(a) With respect to class members whose applica-

tions for disability benefits have been denied at the

initial administrative stage or on reconsideration and

who have not requested review by an administrative

law judge:

(1) Defendant shall forthwith obtain informa-

tion on the individual’s vocational history,

including completion of form SSA-3369. In

T4a

no event shall an initial interview be sched-

uled to be held more than one week after the

class member responds to notice A or is

otherwise determined to be a class member.

(2) Defendant shall forward the class member’

case file to the Office of Disability Determi-

nation (“ODD”) for a new initial deter-

mination within three days of obtaining ap-

propriate vocational information pursuant

to subparagraph (a)(1). Defendant shall

be considered to be in compliance with the

terms of this subparagraph if she forwards

90% of class members’ case files to ODD

within three days of obtaining appropriate

vocational information or two weeks of the

date of identifying the class member, which-

ever is longer.

(3) Defendant shall make all good faith efforts

to complete the sequential evaluation of dis-

ability within four weeks of the date a class

member’s case file and completed form SSA-

3369 is received by ODD unless the class

member submits new medical evidence, re-

quests a full redevelopment of evidence and

re-evaluation of disability, or defendant de-

termines that a full redevelopment is re-

quired; provided that, in the event ODD re-

ceives more than three thousand cases in

any one week, those cases in excess of three

thousand shall be considered, for purposes

of this subparagraph, as received in the fol-

lowing week.

(b) In conducting the redetermination of those

applications in which a hearing has been held or in

which a request for a hearing is pending, defendant

75a

shall conduct a hearing before an administrative law

judge unless a determination of entitlement can be

made on the basis of the record. Such hearings shall

be scheduled within thirty days of the date the Sec-

retary identifies the class member, or determines

that a person who has presented him/herself as a

potential class member is, in fact, a class member,

or receives notice that the class member’s case has

been remanded from federal court. Defendant shall

make all good faith efforts to hold hearings within

forty-five days of the date of identification or deter-

mination of class membership or the date of receipt

of notice that the class member’s case has been re-

manded; and

10. With respect to those class members who have

actions pending in federal court and who either have

informed the Secretary that they want their case re-

manded to the Secretary for a re-evaluation or have

failed to so inform the Secretary by responding to

the notices appended hereto.as attachments “A” and

“B” within 30 days of the date of the notices, the

Secretary shall move the Court for or otherwise agree

to a remand of the case and the placement of the case

on the court’s suspense calendar; and

11. Shall provide to any person who presents him/

herself in person, by telephone or by letter to the

Social Security Administration for relief under this

Order and, at the time of such presentment, provides

his/her name, social security number, telephone num-

ber and current address, a copy of the notice ap-

pended hereto as attachment “C” stamped by Social

Security Administration personnel to indicate the

date of his/her presentment. A copy of the notice

shall be placed in that person’s file if that person in

fact has applied for or been terminated from benefits.

76a

Upon such presentment defendant shall within two

weeks determine whether such person is a class mem-

ber and shall provide a written rationale for such

determination; and

12. Shall reproduce, in both the English and Span-

ish language, the notice appended hereto as attach-

ment “D” as a 17 inch by 22 inch poster and cause

equal numbers of English and Spanish language

copies of such poster to be prominently displayed in

all Social Security Administration offices in the State

of New York to which the public has access, shall

supply plaintiffs’ attorneys with 200 copies of said

poster in the English language and 100 copies of said

poster in the Spanish language, and shall supply the

attorneys for plaintiff-intervenor the State of New

York with 1000 copies of said poster in the English

language and 500 copies of said poster in the Spainsh

language; and

13. In the event a class member does not respond

to notices “A” or “B” within two weeks, defendant

shall exercise additional efforts to contact the class

member including phone calls, personal visits, and, as

appropriate, contact with family, friends and treating

sources. In the event that a class member cannot be

notified, defendant shall contact the post office as pro-

vided in the POMS, and will, if that is not successful,

attempt to locate the individual through family,

friends and treatment source, as appropriate; and

14. Shall immediately issue instructions to Social

Security Offices in New York State, to the Office of

Hearings and Appeals, to the Appeals Council, to the

New York Regional Office and to the New York Office

of Disability Determinations requiring compliance

with paragraph (1). Defendant shall immediately

withdraw any and all instructions to stop processing

77a

cases and issuing decisions as a result of this Court’s

opinion of June 22, 1984; and

15. Shall, within one week of entry of this order,

issue instructions for compliance with this order in-

cluding procedures to be used in identifying class

members, responding to inquiries from asserted class

members and their advocates, for reevaluating initial

claims »f plaintiff class members who have been

denied at the initial administrative stage or on recon-

sideration, and for reinstating benefits to class mem-

bers whose benefits have been terminated; and

16. Shall immediately provide plaintiffs’ attorneys

with copies of all memoranda, notices, instructions,

directives and like documents issued to effect compli-

ance with this order as those documents are issued;

and

17. Shall report to plaintiffs’ counsel every four

weeks with:

(a) a list of the names and social security num-

bers of class members who have been identi-

fied; and

(b) a list of the names and social security num-

bers of persons who cannot be notified, or

have not responded to efforts to notify them

made pursuant to paragraph 13; and

(c) the number of class members identified; and

(d) the number of class members sent notices

“A” the number sent notice “B”, and the

number responding to each notice; and

(e) the number of cases ordered forwarded to

ODD; and

(f) the number of persons who have presented

themselves as potential class members, the

18a

number determined to be class members, and

the number determined not to be class mem-

bers; and

(gz) the number of class members who are for-

mer recipients of Title II benefits who have

verified their addresses and the number for

whom checks have been certified to the

Treasury ; and

(i) the number of cases that have been scheduled

for hearings, and the number of hearings

that have been conducted; and

(j) the number of redeterminations of applica-

tions that result in allowances, the number

that result in denials, and the number of

redeterminations of termination cases that

result in allowances and the number that

result in terminations.

18. The Secretary may petition the Court at any

time for relief from any one or more of the provisions

of paragraph 17 above. Such relief shall be granted

upon a showing made by the Secretary and a deter-

mination of the Court that the implementation of this

order is proceeding smoothly and that the information

called for in the particular provision or provisions

from which the Secretary seeks relief is no longer

needed or upon a showing and a determination of the

Court that such relief is otherwise appropriate.

19. Nothing in this order shall be construed as

precluding members of the plaintiff class from obtain-

ing greater relief on alternative grounds. Class mem-

bers shall retain all rights to administrative and judi-

cial review of decisions made as a consequence of this

order. Nothing in this order shall be construed as

79a

precluding class members who choose to proceed with

their individual court cases from seeking preliminary

relief in those cases.

DATED: NEW YORK, NEW YORK

July 25, 1984.

/s/ Morris E. Lasker

United States District Judge

80a

ATTACHMENT A

SOCIAL SECURITY DISABILITY AND

SUPPLEMENTAL SECURITY INCOME

APPLICANTS, THEIR REPRESENTATIVES

AND REPRESENTATIVE PAYEES

Date:

Based on our review of your file, it appears that

you may have been denied benefits because we found

that your medical condition was not severe. A federal

court has temporarily ordered us not to deny benefits

on that ground and to reopen and redetermine certain

applications denied on that ground.

If we review your case, we will need more informa-

tion from you. Therefore, you should go to or tele-

phone you: local Social Security Administration office

and be prepared to give them information about your

employment history. If you go to your local Social

Security Administration office in person, please bring

this notice with you.

If we redetermine your application, our decision

will be based upon the medical evidence that we now

have in your file unless you give us additional medi-

cal evidence. If you believe that your medical condi-

tion has changed since we last evaluated your claim,

you should make a special effort to obtain and give us

additional medical evidence from your doctor(s) and

any clinics or hospitals where you have received treat-

ment.

Sia

IT IS IMPORTANT THAT YOU CONTACT

YOUR LOCAL SOCIAL SECURIY ADMINIS-

TRATION OFFICE RIGHT AWAY

We will try to redetermine your case right away.

If you have already had a hearing, a new hearing

should be scheduled within 45 days of the date ap-

pearing above unless we decide to give you benefits.

If you have not yet had or asked for a hearing, you

should get a new decision from us about a month

after you provide us with information on your em-

ployment history. If you do not receive a hearing

date, or a new decision in your case within these time

periods you should go to your local Social Security

office again.

IF YOUR CASE IS IN FEDERAL COURT,

PLEASE SEE THE NEXT PAGE.

ATTACHMENT A (SECOND PAGE)

PERSONS WITH CASES IN FEDERAL COURTS

If you have an action pending in federal court

based upon the denial of your application, we cannot

redetermine your application unless and until the

Court sends your case back to us. You, of ccurse,

have the right to continue with your court action.

We therefore request that you indicate below whether

you want to send your case back to us for redeter-

mination. Please place your name, your signature,

your social security number and the date in the spaces

provided. Please tear off the form below and return

in the enclosed addressed, postage-paid envelope

within 20 days after the date you receive this notice.

If we do not hear from you within 30 days of the

notice, we will assume that you do not want to con-

82a

tinue with your court action, and we will ask the

Court to send your case back to us for redeter-

mination.

Date:

I want to continue my court action. I do not

want the Social Security Administration to redeter-

mine my application for benefits.

I do not want to continue with my court

action. I want the Social Security Administration to

redetermine my application for benefits.

NAME: (Please Print)

SIGNATURE:

SOCIAL SECURITY NO.:

ADDRESS: (Please Print)

TELEPHONE NUMBER:

DATE:

83a

ATTACHMENT B

SOCIAL SCURITY DISABILITY AND

SUPPLEMENTAL SECURITY INCOME

RECIPIENTS, THEIR REPRESENTATIVES

AND REPRESENTATIVE PAYEES

Date:

Based on our review of your file, it appears that

your benefits may have been terminated because we

found that your medical condition was not severe.

A federal court has temporarily ordered us not to ter-

minate benefits on that ground and to reinstate ben-

efits that were terminated for that reason. After we

reinstate your benefits, we have the right to review

your entitlement to benefits.

IT IS IMPORTANT THAT YOU CONTACT

YOUR SOCIAL SECURITY ADMINISTRA-

-TION OFFICE RIGHT AWAY. IF YOU

WERE RECEIVING SUPPLEMENTAL SE-

CURITY INCOME BENEFITS, PLASE BE

PREPARED TO GIVE US INFORMATION

ABOUT YOUR INCOME, RESOURCES AND

LIVING ARRANGEMENTS.

We will not start paying you benefits until you

verify your address. If you were receiving Supple-

mental Security Income benefits, you must also show

that you continue to be financially eligible for those

benefits. You should receive your first check about a

month after you verify your address and eligibility.

If you do not start getting your benefits within that

time, you should go to your local Social Security office

again and let them know that you did not get your

check.

84a

IF YOUR CASE IS IN FEDERAL COURT,

PLEASE SEE THE NEXT PAGE

ATTACHMENT B (second page)

PERSONS WITH CASES PENDING IN

FEDERAL COURT

If you have an action pending in federal court

based upon the termination of your benefits, your case

must be sent back to us for reevaluation before we

will reinstate your benefits. Therefore, we would like

to ask the Court to send your case back to us for

reevaluation. You, of course, have the right to con-

tinue with your court action, but if you do we will

not reinstate your benefits unless and until the Court

orders us to. We therefore request that you indicate

below whether you want to send the case back to us

for reevaluation. Please place your name, your signa-

ture, you social security number, your address, your

telephone number and the date in the spaces provided.

Please tear off the form below and return it in the

enclosed addressed, postage-paid envelope within 20

days after the date you receive this notice. If we do

not hear from you within 30 days of the date of this

notice, we will assume that you do not want to con-

tinue with your court action, and we will ask the

Court to send your case back to us for reevaluation.

Date:

I want to continue with my court action.

I do not want the Social Security Adininistration to

reevaluate the termination of my benefits.

85a

I do not want to continue with my court

action. I want the Social Security Administration to

reevaluate the termination of my benefits.

NAME: (Please Print)

SIGNATURE:

SOCIAL SECURITY NUMBER:

ADDRESS: (Please Print)

TELEPHONE NUMBER:

86a

ATTACHMENT C

DIXON APPLICATION

Date:

This acknowledges presentment on this date of

your claim the relief under DIXON v. HECKLER.

If you are a member of the class of plaintiffs in this

lawsuit and are entitled to relief, the Social Security

Administration will be reviewing your application if

you were denied benefits or reinstating your benefits

if your benefits were terminated. If you have an

action pending in federal Court, your action must be

sent back to us before we will review your application

or reinstate your benefits.

NAME: (Please Print)

SOCIAL SECURITY NUMBER:

ADDRESS: (Please Print)

TELEPHONE NUMBER:

ATTACHMENT C (BACK OF NOTICE)

The class of plaintiffs in DIXON v. HECKLER

includes people who:

1. Were denied or terminated from disability ben-

efits on or after July 20, 1983 or had an appeal pend-

ing on that date; and

2. Were denied or terminated because the Social

Security Administration found that their medical

condition was “not severe” or did not “significantly

87a

limit physical or mental abilities to do work activi-

ties”.

We will decide whether you are a member of the

class of plaintiffs in DIXON v. HECKLER within

about two weeks of the date of this notice.

If you are a member of the class of plaintiffs in

DIXON v. HECKLER, and your application was de-

nied, the Social Security Administration wil! be re-

viewing your application. You may have to provide

more information about your employment history. If

you have already had a hearing, a new hearing

should be scheduled within 30 days of the day we

decide th

This text is long and has been trimmed here. Open the source document for the complete record.