Opposition Brief — Bowen v. Hyatt

P OR EI BS:

aa

CLERK

Supreme Court, U.S.

FILED

UN 26 1987

NIOL, JR,

7

5

No. 86-1861 0)

IN THE

Supreme Court of the Wnited States

OCTOBER TERM, 1986

Otis R. BOWEN, SECRETARY OF

THE UNITED STATES DEPARTMENT OF

HEALTH AND HUMAN SERVICES,

Petitioner,

Vv.

PATRICK M. HYATT, HERMAN O. CAUDLE and

MARY P. LOVINGOOD, on behalf of themselves

and all others similarly situated,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

JOHN R. WESTER CHARLES MCBRAYER SASSER

(Counsel of Record) LEGAL SERVICES OF

DAN T. COENEN SOUTHERN PIEDMONT, INC.

ROBINSON, BRADSHAW _ Suite 600-East Independence

& HINSON, P.A. Plaza

1900 Independence Center 700 East Stonewall Street

Charlotte, North Carolina Charlotte, North Carolina

28246 28202

(704) 377-2536 (704) 376-1608

Attorneys for Respondents

QUESTIONS PRESENTED

This case, previously before

this Court in No. 85-474, was the subject

thi remand order of June 9,

his Court's

1986 to the Fourth Circuit in light of

Bowen vy. City of New York, 106 S. Ct. 2022

(1986). The questions presented are

Le Whether the Fourth Circuit

erred in following this Court's instruc-

tions to apply the jurisdictional guide-

lines articulated in City of New York to th

particular facts of this case.

Zs Whether the Fourth Circuit

erred in upholding the District Court's

award of attorneys' fees premised on

findings from trial evidence that

Petitioner had adopted and followed a

purposeful policy to disregard Fourth

Circuit decisions if in conflict with

Petitioner's policy rulings.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED... ccccccececee 1

TABLE OF AUTHORITIES... cccccccces ia

STATEMENT... ccccccccccsesesessesneen 1

A. The Procedural Background

Of this CaS@uwes sr vacsesasene 1

B. The Decision in City of

New YOrK.cccsccasccscececs 8

C. The Fourth Circuit's :

Decision on Remand........ 12 )

D. The Polaski CaS@....c.eeeeees 17

DISCUSSION. o0.< 5 oi0sat0ck b4aee van eas 18

CONGCIAIG ION. .0ccceckccducceeenaauuas 48

TABLE OF AUTHORITIES

Allegheny General Hospital v.

NLRB, 608 F.2d 965

(pn se OE os | a

Beverly-Enters. v. NLRB

4a? F.2G 591 (6th Cir.

A ne a

Bowen v. City of New York,

106 S. Ct.. 2022

ee Ae ee a ae ee ee

Bowen v. Yuckert,

No. 85-1409

Cues, Utte Oe LEST) ics cccccscs

City of New York v. Heckler,

578 F. Supp. 1109 (1984),

aff'd. 742 F.2d 729

(2d Cir. 1984), aff'd

Ree See) BOGS C906) ks cess

Dotson v. Schweiker,

719 F.2d 80 (4th Cir.

A a

Elrod v. Suran,

ew Seams LAOO (1964). cc cs esc

Flores v. HEW, 228 F. Supp.

ee WO. 1668) 666i ce csc awes

“i si+

26

26

35,

9,

36

10

10

Foster v. Heckler,

780 F.2d 1125 (4th Cir.

bo ee eee ee eae ee eee 38,

Heckler v. Lopez,

466 U.S. 955 (1984)... eee 27

Heckler v. Lopez,

463 U.S. 1328, motion to

vacate stay denied,

464 U.S. 879 (1983), stay

granted in part and denied

in part, 466 U.S. 955

Oo TO PPPerrererrrreereroLee ee 27

Heckler v. Ringer,

104 S. Ct. 2013 (1984)..... eee Sy

Hollaway v. Valley,

464 U.S. 914 (1983)... eeeee 40

Hunt v. Schweiker,

685 F.2d 121 (4th Cir.

LOOE) 6 06 66'4-4:4 6.6. 609528 50 4G 488s 6

Hyatt v. Heckler,

757 F.2d 1455 (1985)... 13

Hyatt v. Heckley,

579 F. Supp. 985 (1984)....... 13,

ITT World Communications,

Inc. v. FCC, 635 F.2d 32,

f. Bes 6 oe. ere ae ee 26

Ithaca College v. NLRB,

623 F.2€ 224 (2d Cir.),

cert. denied, 499 U.S. 975

Bh 3 eee eee ee oe ee eee eee 26

-iv-

39

30

ES OPED”

Page

Jones & Laughlin Steei

Corp. v. Marshall,

636 F.2d 32 (3rd Cir.

LDPE PCT Tererer heen ceaes «20

Kosher v. Stamatis,

566 G. Ct, 1555 CICS) on cos cee ae ees 40

Lopez v. Heckler,

725 F.2d 1489 (9th Cir.)

vacated and remanded on

other grounds, 469 U.S. 1082

(1964). cocncscasseusias teeenee) aos

29

Martin v. Secretary of H.E.W.,

492 F.2d 905 (4th Cir.

oye } Pee eer eee eoeeeeeee oeeevee 3,

34,

Mary Thompson Hospital, Inc. v.

NLRB,

621 F.2d 858 (7th Cir.

eee3#e#ee#esesee 26

1980). cc cccccce

Myers v. Califano,

611 F.2d 980 (4th Cir.

ot peer re ee aces ‘

34,

Pierce v. Underwood,

No. 86-1512 cert. granted,

aE ee eer

¢

Polaski v. Heckler,

804 F.2d 456 (1986),

cert. denied, No. 86-1617

(June 16, 1987) ccccccecscccsess 4, 17

is, 2i

22, 23%

31, 40,

43, 44,

45, 46,

Polaski v. Heckler,

739 F.2d 1320

(GR Cif. ISSE) ccccccssceeseus 37

Rivera v. Heckler,

568 F. Supp. 235 (D.N.J.

LOSS) 6660 60560006000 604068 64% 25

Rosenberg v. United States,

346 U.S. 273

(1953) cccccccvccccccccecccsess 27

Siedlecki v. Schweiker,

563 F. Supp. 43 (W.D.

Mash LOSS) ccccesscescceeses coe abe 26

United States v. Mendoza,

464 U.S. 1594 (1964) .cccscececs 25, 44

Utah v. Ute Indian Tribe,

107 S. Ct. S96 (1986) ccccccese 40

Valdez v. Schweiker,

575 F. Supp. 1203

(D. COLO. LISS) cccccccccesssse 25

-Vvi-

STATUTES AND REGULATIONS

CF UO. © BORIO icc cdeucvasies

30 G.8.0. © BORDEN» kcdceccesses

28 U.S.C. § 2412(d)(2)(A).......

S. Ct.

Social Security Disability

Benefits Reform Act of 1984,

Pub. Le. NO. 98-460... ccccees

Social Security Disability

Benefits Reform Act of 1984,

§ 3(a)(2), 42 U.S.C.A.

§ 1382c (West Supp., 1987)....

Social Security Disability

Benefits Reform Act of 1984,

§ 4(c), 42 U.S.C.A. § 423

(West Supp., 1987) .ccccccccces

-Vvli-

RULG ZhcblAlccocovccecses

34

MISCELLANEOUS

SSR 82-55..... eccccces coccccee

SSR 82-58. cc cccccccccccceccccces

Adjudicatory Policy Memorandum

to Administrative Law Judges

(1982)... ccccce Perrrerrrere ee

C. Fallon, Social Security &

Legal Precedent, Case &

Comment, Vol. 89, No. 2 at

4 (1984) cc ccccccccccvseccceees

H. R. Conf. Rep. -1039, 98th

Cong., 2d Sess 29, 36-39,

reprinted in 1984 U.S. Code

Cong. & Admin. News 3038,

3096. cccccccccccccccccsccccces

-vill-

Page

Passim

Passim

2, 3

26

13, 37

No. 86-1861

IN THE SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1986

Otis R. Bowen, Secretary of the

United States Department of Health

and Human Services, Petitioner,

Vv.

Patrick M. Hyatt, Herman O. Caudle

and Mary P. Lovingood, on behalf

of themselves and all others

similarly situated, Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

RESPONDENTS’ BRIEF IN OPPOSITION

STATEMENT

A. The Procedural Background of this Case.

This case was the subject of a full

trial on the merits in January 1984.

App. 32a, 8. After receiving extensive

evidence, including the testimony of

officials actually administering the

Social Security Program in North

Carolina, the trial court found that the

Secretary of Health and Human Services

was following a policy of intracircuit

nonacquiescence. App. 40a-42a, 48a-49a,

54a-61la, 83a. In other words, the

Secretary purposefully was refusing to

follow controlling Court of Appeals'

decisions construing the Social Security

Act even when adjudicating claims arising

in the very Circuit that had issued those

:

decisions.+/

l/ th January 1982, for example, the Secretary's

Associate Commissioner for Hearings and Appeals

instructed all administrative law judges to

implement her’ policy of intracircuit non-

acquiescence in this directive:

[T}he federal courts do not run SSA's

programs, and [the] ALJ's are

responsible for applying the Secre-

tary's policies and guidelines regard-

less of court decisions below the

level of the Supreme Court.

Adjudicatory Policy Memorandum to Administrative

(continued)

-2-

The Court further found that the

effect of this policy in North Carolina

was systematic noncompliance with two

important Fourth Circuit decisions. In

Martin v. Secretary of H.E.W., 492 F.2d 905 (4th

Cir. 1974), the Fourth Circuit held that

social security decisionmakers must con-

Sider whether hypertension or diabetes is

disabling in the particular claimant's

case even if it is not accompanied by

end-organ damage. In Myers v. Califano,

611 F.2d 980 (4th Cir. 1980), the Fourth

Circuit ruled that, if some cause for

pain is established, decisionmakers must

consider the claimant's own subjective

accounts of the intensity of that pain,

whether or not corroborated by "objec-

tive" or "clinical" evidence. The

District Court found that decisionmakers

Law Judges (1982), quoted in full in Joint

Appendix [JA] filed with the Fourth Circuit at

353-54; see also JA 372-73.

-3-

eT a See

in North Carolina systematically were

deciding claims in violation of these

holdings because they had been instructed

to follow the Secretary's Social Security

Rulings (in particular, SSR 82-55 and

82-58) regardless of the law of the

Circuit. App. 43a-45a, 56a-57a.2/

2/ The Court also found nonacquiescence in the

"medical improvement" rule applicable in disabil-

ity termination proceedings under. Dotson vy.

Schweiker, 719 F.2d 80 (4th Cir. 1984). See

App. 58a. Due to the intervention of Congress,

this medical improvement issue and the claims of

unnamed terminee class members are not before the

Court. See Cert. Petn. 7-8. As in his petition

in Heckleryv. Polaski, cert. denied, No. 86-1617

(June 16, 1987), the Secretary cites this inter-

vention of Congress to insinuate that the Court

of Appeals erred in reinstating class relief on

the theory that the class had become improperly

represented. Cert. Petn. 6 n.3, 8 n.5. The

Secretary's "arguments" in this regard, however,

were not made to the Fourth Circuit on remand,

were not made at any time in either lower court,

and indeed are not raised by the questions pre-

sented in this petition for certiorari. Cert.

Petn. (I). In any event, these suggestions of

error are frivolous for reasons already explained

to this Court. See Reply Br. in No. 85-474,

Hyatt v. Heckler, filed Dec. 16, 1985 at 3 & n.3.

-4-

Having identified these systematic

violations of_the Social Security Act as

interpreted by the Fourth Circuit, the

District Court certified a statewide

class of Social Security claimants vic-

timized by the Secretary's policy.

App. 65a-7la. In doing so, the Court

concluded that it had jurisdiction over

the claims of all plaintiff class members

( The District

under 42 U.S.C. § 405(g).2

Court ordered new hearings for these

class members and also entered injunctive

relief. App. 62a-64a. The Secretary

appealed.

In a decision issued March 20, 1985,

a Fourth Circuit panel upheld the

3/ Section 405(g), the judicial review provision

of the Social Security Act, is reproduced at

App. 104a. The statute is the pertinent juris-

dictional provision in cases of this kind,

because federal-question jurisdiction normally is

unavailable in Social Security cases. See, e.g.,

Heckler v. Ringer, 104 S. Ct. 2013 (1984).

-5S-

District Court's award of class-wide

relief, including the award of new hear-

ings to initial-applicant members of both

the "Martin" and "Myers" subclasses.

App. 26a-27a. In doing so, the Court

observed that the plaintiff class

"included claimants whose wenetite were

terminated because the Secretary did not

follow this circuit's precedent," id. at

19a, and chastened the Secretary for his

policy of nonacquiescence, id. at 20a-2la,

27a.

Based on earlier interpretations of

section 405(g) in Heckler v. Ringer, 104 S.

Ct. 2013 (1984), and dunt v. Schweiker,

685 F.2d 121 (4th Cir. 1982), however,

the Court of Appeals reduced the size of

the plaintiff class. In particular, the

Court of Appeals held that the District

Court erred in assuming jurisdiction over

those class members who had not fully

exhausted administrative remedies. The

-6§-

Court reached this conclusion because it

read Ringer as requiring exhaustion when-

ever a plaintiff asserts "a claim that

the Secretary was applying an improper

standard for entitlement." App.

re toe fe The Court of Appeals also held

that the District Court erred in

including in the class persons who did

not seek judicial review (or have this

case pursued on their behalf) within 60

days after denial of their administrative

claims. The Court considered itself

bound by Hunt to reach this conclusion,

noting that "({iJn this circuit, the 60-

day requirement is considered to be

jurisdictional" and therefore not subject

to equitable tolling. App. 23a.

Finally, the Court of Appeals vacated the

District Court's award of injunctive

relief based on its reading of the Social

Security Disability Benefits Reform Act

of 1984 (the "1984 Act"). App. 2la.

-7-

Following issuance of the Fourth

Circuit's decision, the plaintiffs peti-

tioned this Court for a writ of

certiorari on the exhaustion, 60-day and

injunction issues. This Court responded

by holding in abeyance a ruling on the

plaintiffs' petition pending its decision

in Bowen v. City of New York, 106 S. Ct. 2022

(1986).

B. The Decision in City of New York.

City of New York brought before this

Court precisely the same jurisdictional

arguments of the Secretary that’ the

Fourth Circuit had accepted in reducing

the scope of the plaintiff class in this

case. In City of New York, the plaintiffs

had proven that, contrary to published

regulations, the Secretary was concluding

routinely that mentally impaired claim-

ants were not disabled if they did not

have one of the "listed impairments" set

forth in the regulations. See id. at

-8-

2026-27 and n.5.4/ The District Court

held that the Secretary's unpublished

policy was unlawful and ordered new bene-

fit hearings for a class of claimants

4/ Under the regulations, the Secretary uses a

five-step sequential evaluation process in dis-

ability cases. The first two steps focus on

whether the applicant is actively working (if so,

benefits are denied), and whether he or she

suffers from some condition sufficient to be at

least potentially determined to be disabling (if

not, benefits are denied). The third step con-

cerns whether the claimant has one of the "listed

impairments" the Secretary views as conclusively

establishing disability (if so, benefits are

granted). If the claimant does not have a listed

impairment, then the regulations require the

decisionmaker to go on to determine whether the

claimant is nonetheless unable to perform his

former job (Step 4) or another job (Step 5) in

light of his or her "residual functional capa-

city." See generally 106 S. Ct. at 2025. In City

of New York, the plaintiffs proved that the

Secretary was routinely determining--pursuant to

a "presumption" that was “effectively conclu-

sive,'' City of New York v. Heckler, 578 F. Supp.

1109, 1115 (1984)--that a claimant was not dis-

abled if the claimant did not have a listed

impairment, regardless of the claimant's residual

functional capacity. This case, like City of New

York, involves "effectively conclusive" presump-

tions with respect to hypertension and diabetes

unaccompanied by end-organ damage and _ with

respect to pain unaccompanied by objective evi-

dence of its severity.

-9-

adversely affected by that unlawful pol-

icy. City of New York v. Heckler, 578 F. Supp.

1109, 1125. That class included persons

who had not exhausted administrative rem-

edies or strictly satisfied the 60-day

time limit set forth in 42 U.S.C.

§ 405(g). 578 F. Supp. 1109. After the

Second Circuit affirmed, 742 F.2d 729

(1984), this Court granted the writ of

certiorari to consider the proper appli-

cation of the exhaustion and 60-day

rules.

On June 2, 1986, this Court issued

its decision in Bowen v. City of New York,

106 S. Ct. 2022 (1986), and in a 9-0

ruling, rejected both of the Fourth

Circuit's holdings that had led to its

contraction of the plaintiff class in

this case. In particular, this Court

held: (1) that exhaustion of the Secre-

tary's administrative procedures properly

may be excused even. when plaintiffs

-10-

challenge the Secretary's application of

standards of entitlement, id. at 2031-33;

see note 4 supra, and (2) that the 60-day

time period of section 405(g) is not

jurisdictional and is subject to equi-

table tolling, 106 S. Ct. at 2029-31.

Based on these rulings, this Court--again

by unanimous vote--affirmed in full the

lower court's award of new hearings to

all class members, including claimants

who had not exhausted administrative

remedies or brought suit within 60 days

after the denial of their claims. Id. at

2033. One week later, this Court granted

the petition for certiorari in this case,

vacated the Fourth Circuit's March 1985

judgment, and remanded for

reconsideration in light of City of New

York.

Meanwhile, during the pendency of

the plaintiffs' petition for certiorari

in this Court, the District Court had

-ll-

entered its second order awarding

attorneys' fees to plaintiffs pursuant to

the Equal Access to Justice Act,

26 U.S.C. § 2412(d) (the "EAJA").

App. 92a-103a. The Secretary separately

appealed that decision to the Fourth

Circuit. On December 5, 1986, the Court

of Appeals issued its decision addressing

this Court's remand order- and the

attorneys' fees appeal. App. la-l3a. It

is this decision that the Secretary chal-

lenges by way of the petition now before

the Court.

C. The Fourth Circuit's Decision on Remand.

In the decision now under review,

the Court of Appeals reinstated as class

members those claimants who, as in City of

New York, had not exhausted administra-

tive remedies or filed suit within 60

days after the final denial of their

claims. In reaching this decision, the

Court relied with emphasis on the policy

-12-

of

intracircuit nonacquiescence estab-

lished during the trial of this action.

As explained by the Court of Appeals:

App.

On the basis of ample evidence the

Gistrict court found that the

Secretary instructed the North

Carolina disability determination

service and administrative law

judges to follow the Secretary's

regulations instead of circuit court

decisions which conflict with the

Secretary's interpretation of the

Social Security Act. Also, the

Secretary directed administrative

law judges not to cite conflicting

court decisions. 579 F. Supp. at

993-996. The Secretary's policy of

nonacquiescence in the law of the

Circuit is well documented, and it

has been the subject of congres-

Sional criticism. See Hyatt v. Heckler,

757 F.2d at 1459-60; H.R.Rep. 1039,

98th Cong., 2d Sess. 36-38,

reprinted in 1984 U.S. Code Cong. &

Admin. News 3038, 3096. The

district court found, citing

examples, that the Social Security

Administration had applied the

policy of nonacquiescence to members

of several subclasses by failing to

apply the law of the circuit in

evaluating diabetes, hypertension,

and pain.

4a-5a (emphasis added). Again

focusing on the trial evidence, the

Fourth Circuit emphasized that these

-13-

“findings of historical fact are not

clearly erroneous." App. 7a.

Confronted with this record, the

Court of Appeals held that judicial

relaxation of the exhaustion rule was

“consistent with the analysis of the

issue in Bowen’ v. City of New York."

App. 7a. The Court reasoned that, "as in

City of New York, the claim is collateral to

the claim for benefits" and “claimants

would be irreparably harmed if exhaustion

requirements were enforced." App. 6a.

The Court noted in particular this

Court's observation in City of New York that

""'(twjle should be especially sensitive to

this kind of harm where the government

seeks to require claimants to exhaust

administrative remedies merely to enable

them to receive the procedure they should

have been afforded in the first place.'"

App. 6a-7a, quoting 106 S. Ct. at 2032.

-14-

The Court of Appeais also_ found

equitable tolling of the 60-day require-

ment to be proper. Again, the Fourth

Circuit relied squarely on this Court's

tolling analysis in City of New York,

echoing in particular this Court's obser-

vation that these claimants "'were

entitled to believe that their Govern-

ment's determination of ineligibility was

the considered judgment of an agency

faithfully executing the laws of the

United States.'" App. 7a, quoting

106 S. Ct. at 2030.

The Court of Appeals emphasized that

its holdings with respect to the exhaus-

tion and 60-day rules were narrow ones

specifically based on the “exceptional

circumstances" established by this

record. App. 3a. Carefully tracking the

principles laid down in City of New York,

the Court explained that "waiver would

not be available if a claimant alleges

-15-

mere deviation from applicable regula-

tions," App. 3a, or "mere irregularities

Or errors," App. 8a. Relaxation of the

normal section 405(g) rules was warranted

only because the claimants in this case

were the eiotina of "a systematic, unpub-

lished policy that denied benefits in

disregard of the law." App. 8a-9a.

Turning to the attorneys' fee ques-

tion, the Court of Appeals affirmed the

order of the District Court. The Court

upheld in particular the District Court's

finding that the secetacs was not "sub-

Stantially justified" in "consciously and

willfully disregard[ing] the law.

App. 83a. The Court of Appeals could

"perceive no factual or legal ground for

departing" from the rule subjecting the

Secretary to EAJA liability in cases of

demonstrated intracircuit nonacquies-

cence. App. lla-l2a.

-16-

D. The Polaski case.

Approximately one month prior to the

Fourth's Circuit's issuance of its

decision in this case, the Eighth Circuit

handed down its decision in Polaski_ v.

Heckler, 804 F.2d 456 (1986). The Polaski

case -- like this case -- involved a

challenge to the Secretary's practice of

evaluating pain in violation of governing

Circuit court law. That case -- like

this case -- had been remanded by this

Court for reconsideration in light of

City of New York. In that case -- as in

this case -- the Court of Appeals on

remand held that City of New York called for

a relaxation of strict application of

section 405(g). On April 8, 1987, the

Secretary filed a petition for certiorari

seeking review of the Eighth Circuit's

decision on remand in Polaski. In his

Subsequent petition in this case, the

Secretary recommended that this case be

-l7-

sae itiieaiia a ti

held in light of Polaski. On June 16,

1987, this Court denied the Secretary's

petition in Polaski without comment or

dissent.

DISCUSSION

This case is not a proper case for

allowance of the writ of certiorari.

Indeed, all the factors normally con-

sidered by this Court in making

certiorari determinations indicate that

this petition should be denied.

In its unanimous City of New York

opinion, handed down just last term, this

Court thoroughly explored the principles

governing judicial relaxation of section

405(g)'s exhaustion and 60-day rules.

This Court then acted in this very case,

and the Court of Appeals on remand care-

fully adhered to this Court's instruc-

tions. In the decision below, the Fourth

Circuit applied the plain rules set forth

-18-

in City of New York to the particular facts

presented by this record. Indeed, the

Court of Appeals itself declared its

holding to be fact-specific and narrow,

emphasizing that “waiver of the exhaus-

tion requirement and tolling of the

period of limitation will rarely be appro-

priate." App. 3a (emphasis added).

The Secretary can point to no

decision by any other Court of Appeals--

Or indeed by any other court at all--with

which the Fourth Circuit's decision con-

flicts. In fact, the development of a

conflict is not even a future possibil-

ity, Since the Secretary's previous

policy of wholesale nonacquiescence, on

which the Fourth Circuit's decision

Squarely rests, recently has undergone a

major revision. See Cert. Petn. 17

n.9. Also during the course of this

litigation, the Secretary has rescinded

altogether one of the Social Security

-j|9-

Rulings his decisionmakers had applied in

derogation of circuit court law, _ see

Cert. Petn. 5 (discussing SSR 82-55), and

has in practical effect significantly

revised the other, see pages 36-38 infra.

In light of these developments, the

questions presented by this’ petition

cannot and will not recur.

The decision of the Court of Appeals

waS made by an experienced panel of

judges having extraordinary familiarity

with this case.2/ The panel's decision

waS unanimous, and the government's peti-

5/ All Fourth Circuit proceedings have been

before Judges Russell, Butzner and Hall. This

same panel thus has considered no less than four

full sets of briefs over the past three years,

(i.e., briefs on the initial merits appeal, briefs

on the initial attorneys' fee appeal, supple-

mental briefs ordered by the Fourth Circuit

following passage of the 1984 Act, and the exten-

sive briefs filed following this Court's remand

on June 9, 1986), three petitions for rehearing

and numerous motions filed by the litigants. In

addition, Judge Butzner, who wrote both panel

opinions, also wrote the Fourth Circuit's

decision in Myers.

-20-

tion for rehearing was denied without

objection Or comment. The result in the

panel's initial decision and its studied

application of City of New York on remand

show that the lower court's approach to

section 405(g) has been marked by caution

and restraint.

This Court's denial, only a few days

ago, of the Secretary's companion peti-

tion for certiorari in Bowen v. Polaski, cert.

denied, No. 86-1617, clearly confirms that

the petition in this case should be

denied. The Secretary himself has

acknowledged that "the issues in this

case are closely related to those pre-

sented in Bowen vy. Polaski because both

cases involved "the Secretary's policies

under SSR 82-58 regarding the evaluation

of pain." Cert. Petn. at 14. In fact,

the Secretary made precisely the same

arguments for Supreme Court review in

both petitions, with the notable excep-

-?1-

tion that in Polaski the Secretary could

advance a far stronger claim of possible

error. See discussion at 25-26, infra. [It

is not surprising, in this setting, that

the Secretary himself recommended that

"the Court hold the petition in this case

and dispose of it as appropriate in light of the disposi-

tion in Polaski." Heckler v. Poiaski,

No. 86-1617, Petition for Certiorai at 15

(emphasis added). Indeed, it would be

fundamentally inequitable to impose

further delay on these North Carolina

claimants while identically situated

Claimants in the Eighth Circuit now pro-

ceed to receive prompt reconsideration of

their claims.

The Secretary understandably wishes

that this Court had decided City of New York

differently. But, aS in Polaski, that

preference does not provide a persuasive

reason for granting the writ of

certiorari in this case. Nor has the

-22-

Secretary identified any other’ sound

reason for further Supreme Court review.

Boiled down to basics, the

Secretary's petition advances three argu-

ments for allowance of the writ. First,

_asS in Polaski, the Secretary argues that

the Court of Appeals erred. Second, as

in Polaski, the Secretary points to the

burden he now confronts in administering

the relief ordered by the lower courts.

Third, the Secretary relies on _ Polaski

itself in arguing that this Court should

revisit section 405(g). As this Court's

disposition of the Polaski petition indi-

cates, none of these arguments provides a

legitimate basis for intervention by this

Court.

(1) The Secretary devotes most of

his petition to arguing that the Fourth

Circuit's decision iS~ wrong. The

Secretary's scattershot claims of error,

however, are neither well-taken nor

-23-

deserving of plenary review by this

Court.

(a) The Secretary initially con-

tends that "the district court had no

jurisdiction over these class members’

claims" because "each such- claimant

declined to seek further review" after

receiving "a personal notice informing

him that his claim for benefits had been

denied." Cert. Petn. 13-14. This argu-

ment, however, is not an argument at all,

for it begs the very question presented;

indeed, this Court unanimously rejected

exactly the same argument in City of New

York.

(b) Making an effort to distinguish

City of New York, the Secretary contends

that his policy of intracircuit nonacqui-

escence provides no justification for

relaxing the exhaustion-= and 60-day

rules. Cert. Petn. 15-17. The Secretary

argues, for example, that intracircuit

-24-

nonacquiescence is merely one permissible

manifestation of the rule exempting the

federal government from the doctrine of

nonmutual collateral estoppel. See United

States v. Mendoza, 464 U.S. 154 (1984). The

wholesale refusal by subordinate agency

decisionmakers to follow controlling cir-

cuit court law, however, is a far cry

from authorizing relitigation in court of

particular issues earlier resolved

against the government in different

district or circuit courts. ©/ Nor can

6/ The Secretary's current reliance on Mendoza

is also improper because the Secretary specifi-

cally abandoned her defense of the legality of

nonacquiescence when the case first came before

the Court of Appeals, and because the argument

confuses the legality of nonacquiescence with

whether or not sufficiently compelling equities

exist to relax the usual limitations of § 405(g).

In any event, the courts overwhelmingly have

found impermissible the sort of intracircuit non-

acquiescence at issue in this case. Lopez v.

Heckler, 725 F.2d 1489, 1494, 1497 (9th Cir.

1984), vacated and remanded on other grounds,

469 U.S. 1082 (1984); Valdez v. Schweiker, 575 F.

Supp. 1203 (D. Colo. 1983); Rivera v. Heckler, 568

F. Supp. 235 (D. N.J. 1983); Siedlecki v.

(continued)

-25-

the Secretary persuasively contend that

his flouting of the law should be ignored

because "the Secretary in this case did

not formally announce that SSA would not

follow a particular decision." Cert.

Petn. 16 (emphasis added). Indeed, a sub

rosa policy © of intracircuit

nonacquiescence is even more pernicious

than a policy that is openly disclosed.

Accord, e.g., C. Fallon, Social Security & Legal

Precedent, Case & Comment, Vol. 89, No. 2

at 4 (1984).

The Secretary also grasps at straws

in citing what the Court “appeared to

Schweiker, 563 F. Supp. 43, 48 (W.D. Wash. 1983);

See ITT World Communications, Inc. v. FCC, 635 F.2d

32, 43 (2d Cir. 1980); Ithaca College v. NLRB,

623 F.2d 224, 228 (2d Cir.), cert. denied,

499 U.S. 975 (1980); Jones & Laughlin Steel Corp. v.

Marshall, 636 F.2d 32, 33 (3rd Cir. 1980);

Allegheny General Hospital v. NLRB, 608 F.2d 965,

970 (3rd Cir. 1979); Beverly-Enters. v. NLRB,

727 F.2d 591, 593 (6th Cir. 1984) (per curiam);

Mary Thompson Hospital, Inc. v. NLRB, 621 F.2d 858,

864 (7th Cir. 1980); Flores v. HEW, 228 F.

Supp. 877, 878 (D.P.R. 1964).

-26-

see," Cert. Petn. 16, in considering the

emergency stay motions presented in

Heckler v. Lopez, 463 U.S. 1328 (Rehnquist,

J., acting as Circuit Justice); 464 U.S.

879 (denying motion to vacate stay of

Circuit Justice). See generally Rosenberg v.

United States, 346 U.S. 273, 286-87 (1953)

(requiring substantial deference to stay

issued by Circuit Justice). In fact, in

Lopez, a unanimous Court ultimately refused

to stay the Ninth Circuit's award of new

hearings for nonacquiescence victims even

though they had failed to exhaust

administrative remedies. 466 U.S. 955

(1984), reviewing stay of judgment after affirmance

at 725 F.2d 1489 (9th Cir. 1984).

Although the Court did stay relief to

class members who had not satisfied the

60-day requirement, it did so only to

permit full exploration of the _ then-

disputed issue whether the 60-day rule is

jurisdictional. This Court, of course,

-27-

subsequently considered this very issue

in City of New York and unanimously rejected

the Secretary's position.

The Secretary's established policy

of intracircuit nonacquiescence in fact

makes this case an even stronger case

than City of New York for relaxing

section 405(g)'s exhaustion and 60-day

rules. It makes no sense to require

exhaustion in intracircuit mnonacqui-

escence cases, for the very act of

requiring exhaustion will provide the

vehicle permitting agency decisionmakers

to engage in the challenged practice of

flouting circuit court law. Strict

enforcement of the 60-day rule is also

inappropriate in this context, because

the judiciary should not be compelled to

enforce a nonjurisdictional procedural

rule to shield from judicial correction

the Secretary's purposeful disregard of

judicial authority. As the Ninth Circuit

-28-

observed in Lopez, the Secretary may not

properly "{use] the procedural require-

ments aS a mechanism for evading the law

she is required to apply." Lopez v.

Heckler, 725 F.2d 1489, 1506 (9th Cir.),

vacated and remanded on other grounds, 469 U.S.

1082 (1984). The Secretary's proven

practice of intracircuit nonacquiescence

makes this case, if any case, an appro-

priate one in which to dispense with

strict application of section 405(g).

(c) The Secretary also seeks to

avoid City of New York by arguing that the

informal nonacquiescence found to exist

in this case was not so “'secret'" that

"class members were lulled into

inaction." Cert. Petn 17. The Fourth

Circuit, however, persuasively responded

to the Secretary's argument, concluding

that considerations of "secrecy" in fact

likened this case to City of New York. As

-29-

stated by the Court of Appeals after

renand from this Court:

We cannot accept the Secretary's

argument. The Secretary never

published the agency's informal

policy of not following the law of

the circuit with respect to hyper-

tension, diabetes, and pain. On the

contrary, as the district court

found, the Secretary directed

administrative law judges not to

cite the conflicting court deci-

sions. See 579 F. Supp. at 996.

The effect of the unpublished nonac-

quiescence policy on North Carolina

claimants was not disclosed until

this case was tried. See 579 F.

Supp 993-94.

The evidence did not reveal mere

irregularities or errors in indivi-

dual cases. Instead, it depicted a

systematic, unpublished policy that

denied benefits in disregard of the

law. It is unrealistic to believe

that publication of both the

agency's regulations and the court

of appeals' decisions would alert

lay persons to the Secretary's non-

acquiescence in circuit law. The

Hyatt claimants, no less than those

in Bowen vy. City of New York, were

entitled to believe that agencies

charged with evaluating claims

according to law had faithfully per-

formed their duties.

App. 8a-9a.

-30-

The Secretary's arguments respecting

section 405(g) in effect reflect § an

effort to confine City of New York to its

own facts. This Court itself, however,

observed in City of New York that the facts

of that case fell “well within" the

"Outer bounds of our holding." 106 S.

Ct. at 2033. The Fourth Circuit's treat-

ment of section 405(g) was careful,

accurate, and strictly in keeping with

this Court's analysis in City of New York.

As in Polaski, that fact-bound analysis

Clearly provides no basis for further

review by this Court.

(d) Finally, the Secretary

challenges the Fourth Circuit's decision

by arguing that he violated no one's

rights at all; the reinstated class mem-

bers, he says, should not receive relief

because no class members ever should have

prevailed. Cert. Petn. ll n.7, 14, 16.

This challenge to the lower courts'

-3l-

underlying findings of liability--which

has nothing at all to do with section

405(g)--comes too late.2/ In any event,

the Secretary's liability arguments have

no merit.

The Secretary advances two separate

liability arguments. First, the

Secretary argues that his policies "were

not inconsistent with the Fourth

1/ The Secretary chose not to cross~-petition for

certiorari on the Liability question when this

case was last before the Court, so that the peti-

tion this Court granted presented questions con-

cerning only jurisdiction over claims of class

members who had not complied with the exhaustion

or 60-day rules and the availability of injunctive

relief in this kind of case. See Cert. Petn.

No. 85-474 at (i) and Brief for the Respondent in

No. 85-474 at (I) (identifying questions pre-

sented). Accordingly, this Court's remand order

could at most return these issues to the Circuit

Court for reconsideration. See SS. Ct.

Rule 21.l(a) (last sentence). Indeed the

Secretary argued on remand, and the Fourth

Circuit agreed, that this Court's remand order

did not put back before the Fourth Circuit even

the injunction question that had been presented

in the’ plaintiffs' granted petition’ for

certiorari, App. 9a3 afortiori, it was not and is

not open to the Secretary to reargue the underly-

ing issue of liability in this case.

-32-

Circuit's decisions in Martin and Myers."

Cert. Petn. 16. The District Court, how-

ever, both found noncompliance with Martin

and Myers in actual practice and perva-

Sively demonstrated the facial inconsis-

tency between the Secretary's Social

Security Rulings and the holdings of

these Fourth Circuit cases. App. 43a,

56a-57a. The Secretary's claim of com-

pliance with Martin and Myers has a par-

ticularly hollow ring in the posture this

case now occupies. The Fourth Circuit

itself already twice has rejected the

same claims of compliance with Fourth

Circuit law the Secretary again makes in

this petition.

In his second liability argument,

the Secretary contends that Congress

"ratified" the Secretary's “policies" in

enacting the 1984 Act. It follows, the

Secretary argues, that his policies were

always "valid"; thus the lower courts

-33-

must have erred in granting relief based

on their implementation. Cert.

Petn. 14. The most apparent fallacy in

this argument is that Congress in 1984

could not and did not change pre-existing

law. That law, in the Fourth Circuit,

was the Social-Security Act as inter-

preted in Martin and Myers. There is

nothing whatsoever in the 1984 Act pur-

porting retroactively to alter these

decisions or the principles they state.

See 1984 Act § 3(a)(2), Social Security

Disability Benefits Reform Act of 1984,

§ 3(a)(2), 42 U.8.€ A; § 1382c (West

Supp. 1987), (making statutory pain stan-

Gard applicable through future date so as

to give Congress time for further study);

id. at § 4(c), id. at 4. ° (making new

section 4 applicable more than "30 days

after enactment of this Act").

In any event, the Secretary reads

far too much into the 1984 Act when he

-34-

argues that the Act "ratified" even pro-

spectively the "administrative standards"

found unlawful by the lower courts.

Cert. Petn. 14. With respect to hyper-

tension and diabetes, the Secretary

argues that Section 4 of the 1984 Act

implicitly endorsed the Secretary's use

of a “severe impairment" test in the

five-step sequential evaluation process.

See Bowen v. Yuckert, No. 85-1409 (U.S.

June 8, 1987); see generally note 4, supra.

Martin, however, did not question at all

the propriety of using a "severe impair-

ment" test; rather, Martin merely rejected

the Secretary's position that end-organ

damage is an exclusive precondition to

the establishment of disability from

hypertension or diabetes. See Yuckert,

Supra, Slip op. at 15 n.12 (Court notes

that "we have no occasion to consider

whether [the severe impairment regula-

-35-

tion] is valid as_ applied;"| emphasis

added).

Faced with this fact, the Secretary

implies that Congress "ratified" even the

Secretary's treatment of hypertension and

diabetes because a Senate and Conference

Report noted ‘that the Secretary's

severity policy was “elaborated [upon] in

rulings." Cert. Petn. 9 n.6. The

suggestion that this uninformative tidbit

of legislative history somehow was

intended to repudiate the specific hold-

ing of Martin simply is not persuasive.

See also Yuckert, supra, Slip op. at 13 n.9 and

15 n.12 (noting that House Report accom-

panying 1984 Act “urged the Secretary to

reevaluate the severity criteria to

determine whether they were too strict").

The Secretary also misinterprets the

effect on this case of Congress' "ratifi-

cation" of the Secretary's policy on

pain. To be sure, Congress indicated an

-36-

ne

intent to codify the Secretary's

"current" policy with respect to pain in

passing section 3 of the 1984 Act.

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

Sess. 29 (1984). At the time Congress

acted, however, the Secretary had

restated his pain policy in a formal con-

sent order filed in the Polaski litigation

in a manner that reflected a substantial

modification of the pain rule that had

been applied to these class members.

Polaski v. Heckler, 739 F.2d 1320 (8th Cir.

1984). In the Polaski consent order,

issued ain months after the trial in this

case, the Secretary purported to clarify

the Administration's pain policy, includ-

ing by recognizing (contrary to prior

agency practice) the propriety of con-

Sidering purely subjective evidence of

the intensity of pain. This "clarifica-

tion" in the Polaski consent order had not

been set forth in the text of SSR 82-58

-37-

and incontrovertibly was not the "policy"

applied in North Carolina to these class

members' claims. See App. 44a-45a.

Because Congress "ratified" a policy that

was never applied to the claims of these

class members, the Secretary cannot

reasonably argue’ that such ratification

demonstrates an error in the findings in

this case. For all these reasons, as in

Polaski, the Secretary's ratification

argument is neither meritorious’- nor

deserving of this Court's review. 8/

8/ Nor is there any basis for the Secretary's

related argument that this purported "ratifica-

tion" by the 1984 Act somehow stripped the Lower

courts of the power to afford any remedy to the

pain claimants in this case. See Cert. Petn.

17-18. These claimants are entitled to a remedy

because the Secretary violated their rights by

not reviewing their claims in accordance with

governing law. The Fourth Circuit has remedied

this wrong by ordering agency reconsiderations

conducted in conformance with governing law.

Notably, the Fourth Circuit recently interpreted

section 3 of the 1984 Act, in conformance with

Myers, to require consideration of purely sub-

jective evidence of the intensity of pain. See

Foster v. Heckler, 780 F.2d 1125 (4th Cir. 1986).

(continued)

-38-

At bottom, the Secretary's argument

about congressional "ratification" and

the alleged consistency of his "policies"

with Martin and Myers misses the basic

point of the proof in this case. That

proof showed that the Secretary's

decisionmakers were in real life systemati-

cally misevaluating claims concerning

pain, hypertension and diabetes. See JA

186, 187, 194-95, 292, 296-97, 300-01,

360, 362, 363-64. These violations were

established by the evidence and the trial

court's findings--regardless of the

Secretary's current description of his

current "policies" and regardless of the

enactment of legislation months after the

trial of this case.

As a result, under the court's remand order,

these claimants should receive precisely the sort

of review they initially should have received,

but did not receive because of the Secretary's

illegal conduct.

-39-

(2) The Secretary's protestations

about facing a significant burden also do

not justify Supreme Court review. This

Court regularly denies petitions grounded

principally on the onerousness of the

judgment challenged in this Court .2/

Moreover, as the Polaski case illustrates,

the Secretary can claim no exemption from

this practice. Indeed, the reasons

behind the practice--the press of other

Court business, the presumed adequacy of

lower court review, the need for finality

in litigation and the unique role of this

tribunal as the arbiter of recurring

questions of legal doctrine--press

especially hard against allowance of the

9/ Cases involving life imprisonment, and even

the death penalty, are illustrative. Numerous

civil cases also come to mind. See, e.g. Utah v.

Ute Indian Tribe, 107 S. Ct. 596 (1986); Kosher v.

Stamatis, 106 S. Ct. 1515 (1986); Elrod v. Suran,

465 U.S. 1108 (1984); Holloway v. Valley, 464 U.S.

914 (1983).

~40-

Secretary's petition in this case. The

Secretary, for example, already has had a

full opportunity to litigate this case at

all three levels of the federal judici-

ary. This Court, just last term, treated

fully the general principles of

section 405(g) jurisdiction that the

Secretary asks this Court to revisit in

this case. This judicial review proceed-

ing--which has been pending since 1983

and involves potential relief for

Claimants unlawfully denied benefits as

long ago as 198l--cries out with a

vengeance for finality.

The government's plea of burdensome-

ness alsc comes to the Court unaccom-

panied by = any | convincing claim of

equity. It was the Secretary, after all,

who chose to flout controlling judicial

authority in a systematic and sweeping

fashion. See, eg., App. 48a at 4 68-69.

Given the scope of the Secretary's wrong-

-4l-

ful conduct, it is neither surprising nor

unfair that the lower courts have ordered

the Secretary to afford broad relief.

Indeed, in City of New York this Court

rejected the same protestations’ the

Secretary now makes with words that con-

tinue to ring true:

[W]e are aware that administrative

inconvenience may result from our

decision today. But the Secretary

had the capability and the duty to

prevent the illegal policy found to

exist by the District Court."

106 S. Ct. at 2033.

In addition, while the administra-

tive burden the Secretary faces may be

substantial, it pales in comparison to

the burden imposed on these class mem-

bers. Both the Court of Appeals and the

District Court have recognized the

irreparable injury that these class

members continue to endure. App. 6a,

47a. As explained by the District Court,

the availability of benefits "means for

-42-

many of the members of plaintiffs' class

the difference between existence at a

bare subsistence level and the ability to

pay the utility bills to keep warm in

freezing temperatures, or to purchase an

occasional item of clothing or piece of

meat .« « -« No amount of retroactive

benefits can compensate for years of

deprivation and anxiety--which may even

ultimately result in death." App. 53a.

The continuing human toll these class

members face is no less deserving of this

Court's attention than the administrative

burden the Secretary has brought upon

himself.

(3) Nor can the Secretary persua-

Sively rely on the Eighth Circuit's

decision in Polaski in seeking review by

this Court. See Cert. Petn. 14.

Obviously, what now is most telling about

Polaskki is that this Court unanimously

denied the Secretary's petition for

-43-

certiorari in that case. This result was

hardly surprising, for this Court has

emphasized "the benefit it receives from

permitting several courts of appeals to

explore a difficult question before this

Court grants certiorari," and "its practice

of waiting for a conflict to develop before grant-

ing the Government's petition." Mendoza,

supra, 464 U.S. at 160 (emphasis added).

The lower courts' decisions in Polaski and

this case were the very first decisions

to apply City of New York. Those decisions

conflict neither with each other nor with

any decision of any other court. Well-

established principles of certiorari

jurisdiction thus dictated the proper

disposition in Polaski, just as they do in

this case.

Indeed, this Court's denial of the

writ in Polaski establishes a fortiori that

there is no basis for allowance of the

writ here. This case came to the Court

-~44-

anaemia eee

of Appeals on findings made after a full

trial on the merits; the Eighth Circuit

in contrast, acted only on an appeal of a

preliminary injunction. On remand from

this Court, the Fourth Circuit carefully

detailed the "exceptional circumstances"

justifying a departure from the general

exhaustion and 60-day rules, see App. 3a,

6a-9a; that Court, accordingly, is not

possibly subject to criticism for being

"almost casual" in its analysis. Compare

Polaski Cert. Petn. 12 and 19.

Most significantly, however, the

Eighth Circuit in Polaski neither found

nor relied upon a policy of intracircuit

nonacquiescence. Rather, as the

Secretary repeatedly emphasized in his

Polaski petition, the Eighth Circuit's

decision rested on a Consent Order speci-

fying only that "some adjudicators" had

"Misinterpreted" operative law. See

Polaski Cert. Petn. 10, ll, 17, 19, 21.

-45-

The lower courts' additional finding of

and focus on the Secretary's systematic

nonacquiescence in this case plainly make

it an even more compelling case than

Polaski for relaxing the general rules of

section 405(g). The denial of the writ

in Polaski thus clearly indicates that the

writ should be denied here.

(4) Finally, there is no- sound

reason to hold the attorneys' fee ques-

tion presented by the Secretary's peti-

tion in light of Pierce v. Underwood, cert.

granted, No. 86-1512 (May 18, 1987).

Underwood is not relevant here because it

involved neither intracircuit nonacqui-

escence nor any conduct akin to it, and

the linchpin of both the District Court's

findings (App. 83a, 94a) and the Fourth

Circuit's reasoning with respect’ to

attorneys' fees was the Secretary's non-

acquiescence. As the Fourth Circuit

flatly stated: "The primary issue, on

-~46-

which the outcome of this case depended,

was the Secretary's policy of nonacquies-

cence in the law of the circuit." (App.

lla). Accordingly, a “hold” on the

"substantially justified" issue would not

be appropriate.

Nor is a hold warranted on the

ground that Underwood involves a challenge

to a fee award in excess of $75 per hour.

The District Court in this case adjusted

counsel fees above $75 per hour only

after making a specific finding of the

unavailability of other qualified

attorneys (as is authorized by the very

terms of the statute, see 28 U.S.C.

§ 2412(d)(2)(A)), and determining that an

adjustment to the rate was justified by

increases in the cost of living (as is

also specifically permitted by the terms

of the statute, see id.). See App. 88a,

102a. Underwood, which involved _ no

specific finding regarding the availabil-

-47-

ity of counsel and which does not concern

the relevance of cost of living adjust-

ments at all, simply is not pertinent in

these circumstances. In any event, the

fee increases involved here were modest

and gave rise to only a fraction of the

challenged award.12/ to hold this peti-

tion for this reason in these circum-

stances would be truly to let the tail

wag the dog.

CONCLUSION

Both this Court's established rules

of practice and powerful considerations

10/ the District Court increased the hourly fee

award for some counsel in this case to either $83

or $95 per hour for work performed from 1983-85.

App. 88a, 102a. These figures compare with an

award in Underwood of $120 per hour for work

performed in 1982. Indeed all but $2,836 of the

total fee award made by the District Court in

this case (i.e., the amount based on increases for

Fillette, Hayes and Harper above $83 per hour in

the initial award, see App. 88a) reflects the

fixing of fees at $75 or less, together with

cost-of-living adjustments not even at issue in

Underwood.

-48-

of fairness and finality dictate that the

Court should deny the Secretary's peti-

tion for the writ of certiorari. More-

over, the appropriateness of this result

is now especially clear in light of this

Court's denial of the Secretary's

companion petition in the Polaski case.

For all the reasons set forth above,

respondents respectfully request’ that

this Court deny en toto the Secretary's

petition in this case.

Respectfully submitted.

John R. Wester

(Counsel of Record)

Dan T. Coenen

ROBINSON, BRADSHAW & HINSON, P.A.

1900 Independence Center

Charlotte, North Carolina 28246

(704) 377-2536

Charles McBrayer Sasser

LEGAL SERVICES OF SOUTHERN

PIEDMONT, INC.

951 South Independence Boulevard

Charlotte, North Carolina 28202

(704) 376-1608

June 25, 1987

COUNSEL FOR RESPONDENTS